FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
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*
RCPI Trust*
(Exact name of registrant as specified in its charter)
Delaware 13-7087445
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o Tishman Speyer Properties, L.P.
45 Rockefeller Plaza, New York, N.Y. 10111
(Address of principal executive offices) (Zip Code)
(212) 332-6500
(Registrant's telephone number, including area code)
--------------------------------------
(Former name, former address, and former fiscal year,
if changed since last report)
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 _____
- ---------------------------------------------
* As successor in interest to Rockefeller Center Properties, Inc.
(Commission File No. 1-8971)
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RCPI TRUST
INDEX
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PAGE
PART I--FINANCIAL INFORMATION
ITEM 1. Financial Statements
The accompanying unaudited, interim financial statements have been prepared in
accordance with the instructions to Form 10-Q. In the opinion of management, all
adjustments necessary for a fair presentation have been included.
RCPI Trust, Balance Sheets as of June 30, 1997 (unaudited) and
December 31, 1996 1
RCPI Trust, Statements of Operations for the quarter and six months ended
June 30, 1997 (unaudited) 2
RCPI Trust, Statements of Cash Flows for the quarter and six months ended
June 30, 1997 (unaudited) 3
Rockefeller Center Properties, Inc. (Predecessor), Statements of Operations for
the quarter and six months ended June 30, 1996 (unaudited) 4
Rockefeller Center Properties, Inc. (Predecessor), Statement of Cash Flows for
the quarter and six months ended June 30, 1996 (unaudited) 5
Notes to Financial Statements (unaudited) 6
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 14
PART II--OTHER INFORMATION 19
ITEM 1. Legal Proceedings 19
ITEM 2. Changes in Securities 19
ITEM 6. Exhibits and Reports on Form 8-K 20
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PART I -- FINANCIAL INFORMATION
ITEM 1. Financial Statements
RCPI TRUST
BALANCE SHEETS
($ in thousands)
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AS OF AS OF
JUNE 30, 1997 DECEMBER 31, 1996
(Unaudited)
ASSETS
Real Estate:
Land $158,149 $158,149
Buildings and improvements 602,931 596,880
Tenant improvements 20,745 14,405
Furniture and fixtures 3,957 3,911
785,782 773,345
Less: Accumulated depreciation 15,272 6,718
770,510 766,627
Cash and cash equivalents 19,684 28,765
Restricted cash 7,607 10,027
Accounts receivable 10,996 19,859
Prepaid expenses 17,653 478
Deferred costs, net of accumulated amortization
of $795 and $329 16,620 5,486
Accrued rent 15,555 8,430
Total Assets $858,625 $839,672
LIABILITIES AND OWNERS' EQUITY
Liabilities:
Zero coupon convertible debentures, net of unamortized
discount of $201,560 and $224,030 $384,625 $362,155
14% debentures (includes premium of $25,455 and
$26,155) 100,455 101,155
NationsBank Loans 55,000 -
Floating rate notes - 10,000
Accrued interest payable 5,648 7,234
Accounts payable and accrued expenses 15,559 19,383
Tenant security deposits payable 7,276 7,279
Total Liabilities 568,563 507,206
Contingencies
Owners' Equity 290,062 332,466
Total Liabilities and Owners' Equity $858,625 $839,672
</TABLE>
See notes to financial statements
1
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RCPI TRUST
STATEMENTS OF OPERATIONS
($ in thousands)
(UNAUDITED)
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FOR THE QUARTER FOR THE SIX
ENDED MONTHS ENDED
JUNE 30, 1997 JUNE 30, 1997
Revenues:
Base rental $40,396 $83,462
Escalations and percentage rents 607 3,381
Interest and other income 3,402 5,212
Total revenues 44,405 92,055
Expenses:
Interest 14,478 28,084
Real estate taxes 8,234 16,468
Payroll and benefits 4,716 9,062
Repairs, maintenance, and supplies 3,458 5,392
Utilities 3,240 7,840
Cleaning 3,267 6,856
Professional fees 1,535 4,242
Insurance 314 599
Management and accounting fees 857 1,704
General and administrative 576 889
Depreciation and amortization 4,683 9,206
Total expenses 45,358 90,342
Net (loss) income $ (953) $ 1,713
</TABLE>
See notes to financial statements
2
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RCPI TRUST
STATEMENTS OF CASH FLOWS
($ in thousands)
(UNAUDITED)
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FOR THE SIX
MONTHS ENDED
JUNE 30, 1997
Cash Flows from Operating Activities:
Net (loss) income $ 1,713
Adjustments to reconcile net income to net cash
provided by operating activities
Amortization of original issue discount and premium 21,770
Depreciation and amortization 9,206
Decrease in restricted cash 2,420
Decrease in accounts receivable 8,864
Increase in prepaid expenses (17,175)
Increase in accrued rent (7,124)
Decrease in accounts payable and accrued expenses (3,826)
Decrease in accrued interest payable (1,587)
Net cash provided by operating activities 14,261
Cash Flows from Investing Activities:
Additions to buildings and improvements (6,051)
Additions to tenant improvements (6,351)
Additions to furniture, fixtures and equipment (46)
Additions to deferred costs (11,776)
Net cash (used in) investing activities (24,224)
Cash Flows from Financing Activities:
Additions from NationsBank Loans 55,000
Capital contributions 10
Distributions to owners (44,128)
Payment of floating rate notes (10,000)
Net cash provided by financing activities 882
Decrease in cash and cash equivalents (9,081)
Cash and cash equivalents at beginning of period 28,765
Cash and cash equivalents at end of period 19,684
</TABLE>
See notes to financial statements
3
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ROCKEFELLER CENTER PROPERTIES, INC.
(Predecessor)
STATEMENTS OF OPERATIONS
($ in thousands, except per share data)
(UNAUDITED)
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FOR THE QUARTER FOR THE SIX
ENDED MONTHS ENDED
JUNE 30, 1996 JUNE 30, 1996
Revenues:
Other income $ 22 $ 36
22 36
Expenses:
Interest expense:
Current coupon convertible debentures 5,511 11,022
Zero coupon convertible debentures 8,985 17,971
14% debentures 2,739 5,489
Floating rate notes 3,808 7,642
GSMC facility 1,323 2,379
22,366 44,503
General and administrative 1,479 4,652
Amortization of deferred debt issuance costs 829 1,765
Increase in liability for stock appreciation rights 22 1,929
Effects of execution and delivery of merger agreement (6,623) (6,623)
Expenses related to the March 25, 1996
special meeting of stockholders (51) 398
18,022 46,624
Net Loss ($18,000) ($46,588)
Net loss per share ($ 0.47) ($ 1.22)
</TABLE>
See notes to financial statements
4
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ROCKEFELLER CENTER PROPERTIES, INC.
(Predecessor)
STATEMENT OF CASH FLOWS
($ in thousands)
(UNAUDITED)
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FOR THE SIX
MONTHS ENDED
JUNE 30, 1996
Cash flow from operating activities:
Other interest income received $ 36
Interest paid on current coupon convertible debentures (27,712)
Interest paid on floating rate notes (7,626)
Interest paid on 14% debentures (5,308)
Payments for accounts payable, accrued expenses and other assets (7,392)
Net cash (used in) operating activities (48,002)
Cash flows from financing activities:
Net proceeds from GSMC facility 47,700
Net cash provided by financing activities 47,700
Net decrease in cash and cash equivalents (302)
Cash and cash equivalents at the beginning of the period 1,298
Cash and cash equivalents at the end of the period $ 996
Reconciliation of net loss to net cash (used in) operating activities:
Net loss ($46,588)
Adjustments to reconcile net loss to net cash (used in) operating activities:
Amortization of discount:
Zero coupon convertible debentures 17,971
14% debentures 179
Decrease in deferred debt issuance costs and other assets, net 1,423
(Decrease) in accrued interest payable (14,293)
Increase in stock appreciation rights liability 1,929
(Decrease) in accounts payable and accrued expenses (8,623)
Net cash (used in) operating activities ($48,002)
</TABLE>
See notes to financial statements
5
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RCPI TRUST
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION AND PURPOSE
RCPI Trust (the "Company"), was established in the State of Delaware on
March 26, 1996 as a Delaware business trust. The Company was organized
pursuant to the Trust Agreement dated July 10, 1996 (the "Trust Agreement")
between Rockefeller Center Properties, Inc. (the "Predecessor"), a
wholly-owned subsidiary of RCPI Holdings, Inc. ("Holdings") and RCPI
Investors L.L.C. ("LLC"), each owning a 50% undivided beneficial interest.
The primary purpose of the Company is to acquire, manage and operate the
landmarked buildings and public space known as Rockefeller Center (the
"Property") and to be successor in interest to the Predecessor.
The Predecessor was incorporated in Delaware on July 17, 1985. The
Predecessor qualified and elected to be treated, for Federal income tax
reporting purposes, as a real estate investment trust (a "REIT") under the
Internal Revenue Code of 1986, as amended (the "Code"). The Predecessor was
originally formed to permit public investment in two convertible,
participating mortgages on the Property. From the proceeds of its offering
of common stock (the "Common Stock") and the offerings of its Current
Coupon Convertible Debentures ("Current Coupons") due December 31, 2000 and
Zero Coupon Convertible Debentures ("Zero Coupons") due December 31, 2000
(collectively, the "Convertible Debentures"), the Predecessor made a $1.3
billion convertible, participating mortgage loan (the "Mortgage Loan") to
two partnerships, Rockefeller Center Properties and RCP Associates
(collectively, the "Previous Owners"). The partners of the Previous Owners
were Rockefeller Group, Inc. ("RGI") and Radio City Music Hall Productions,
Inc. ("RCMHP"), a wholly owned subsidiary of RGI. Mitsubishi Estate
Company, Ltd. controlled an 80% equity interest in RGI, and Rockefeller
family interests held the remaining 20%. On July 10, 1996, pursuant to the
Merger Agreement (as described below), Holdings purchased all the
outstanding Common Stock of the Predecessor with approximately $172 million
of its own equity and approximately $172 million obtained through a note
payable to LLC. The note payable was then transferred to the Predecessor
prior to the transfer of all the Predecessor's assets and liabilities to
the Company in exchange for a 50% undivided beneficial ownership interest.
At the same time, LLC contributed its note receivable of $172 million to
the Company which was in exchange for a 50% undivided beneficial ownership
interest.
Prior to July 10, 1996, the Company's activities were limited to
organizational matters.
Merger Agreement
Pursuant to an Agreement and Plan of Merger dated November 7, 1995, (the
"Merger Agreement"), entered into between the Predecessor and a group of
investors (the "Investor Group") the members of which were Exor Group S.A.,
Prometheus Investors, L.L.C., Rockprop, L.L.C., Troutlet Investments
Corporation, Gribble Investments (Tortola) BVI, Inc., Weevil Investments
(Tortola) BVI, Inc. and Whitehall Street Real Estate Limited Partnership V
("Whitehall"), RCPI Merger Inc., a wholly owned subsidiary of Holdings, was
merged (the "Merger") with and into the Predecessor. Consequently, the
Predecessor became a subsidiary of Holdings, a Delaware corporation
controlled by the Investor Group.
The Merger Agreement was approved by the stockholders of the Predecessor on
March 25, 1996 and became effective on July 10, 1996 (the "Effective
Date"). Pursuant to the Merger, each share of the Predecessor's Common
Stock outstanding as of the Effective Date (other than (i) shares of Common
Stock held by the Predecessor or any of its subsidiaries, (ii) shares of
Common Stock held by Holdings or any of its subsidiaries (including RCPI
Merger Inc. ) and (iii) any shares of Common Stock held by a stockholder
who was entitled to demand, and who properly demanded and had not withdrawn
such demand, appraisal for such shares in accordance with Section 262 of
the Delaware General Corporation Law) was converted into the right to
receive $8.00 in cash, without interest thereon. As of the Effective Date,
the Common Stock of the Predecessor was held by Holdings and the Warrants
and Stock Appreciation Rights (see Note 4), previously
6
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RCPI TRUST
NOTES TO FINANCIAL STATEMENTS (cont'd)
(UNAUDITED)
held by Whitehall were contributed through Holdings to the Predecessor and
canceled. Thereafter, on the Effective Date, the Predecessor transferred
substantially all of its assets (including the Mortgage Loan) and
liabilities to the Company and the Company became the successor to the
Predecessor under the Indenture governing the Convertible Debentures (see
Note 4).
Borrower's Chapter 11 Plan
On May 11, 1995, the Previous Owners filed for protection under Chapter 11
of the Federal Bankruptcy Code in the United States Bankruptcy Court in the
Southern District of New York. The Previous Owners and their partners filed
a Chapter 11 reorganization plan (the "Chapter 11 Plan") that contemplated
ownership of the Property being turned over to the Predecessor or its
designee upon consummation of the Chapter 11 Plan. Pursuant to the order of
the Bankruptcy Court, the Chapter 11 Plan was confirmed on May 29, 1996,
and became effective on July 17, 1996, upon the transfer of the Property by
the Previous Owners to the Company in satisfaction of the Mortgage Loan
(the "Transfer").
NBC Sale
Pursuant to the Agreement dated April 23, 1996, among the Investor Group,
General Electric Company ("GE"), National Broadcasting Company, Inc.
("NBC") and NBC Trust No. 1996A ("NBC Trust"), on July 17, 1996,
immediately preceding the transfer of the Property, the Previous Owners
sold to GE, NBC and NBC Trust (the "NBC Sale"), interests in certain
buildings in the Property (the "NBC Space") previously leased by GE or its
affiliates, including NBC. Pursuant to the Chapter 11 Plan, proceeds of
$440 million from the NBC Sale were paid directly to the Company reducing
the outstanding Mortgage Loan. Goldman Sachs Mortgage Company ("GSMC"), an
affiliate of Whitehall, was paid $4.4 million by the Company in connection
with securing the proceeds of the NBC Sale as a partial repayment of the
Mortgage Loan. Upon satisfaction of the Mortgage Loan, this fee was
expensed by the Company during the third quarter of 1996.
Merger with Holdings
On June 30, 1997, the Predecessor merged with and into Holdings, with
Holdings being the surviving corporation. Pursuant to the merger, Holdings
succeeded to the Predecessor's beneficial interest in the Company and
Holdings was renamed Rockefeller Center Properties, Inc.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
Basis of preparation
The accompanying financial statements are prepared in accordance with
generally accepted accounting principles ("GAAP"). The preparation of
financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
The accompanying financial statements present the Company's balance sheet,
as successor to the Predecessor, as of June 30, 1997 and December 31, 1996
and the results of operations and cash flows for the quarter and six months
ended June 30, 1997. The accompanying financial statements also present the
Predecessor's results of operations and cash flows for the quarter and six
months ended June 30, 1996.
These financial statements should be read in conjunction with the Company's
Annual Report on Form 10-K for the year ended December 31, 1996.
There have been no significant changes in accounting principals or the
estimates used in the preparation of the financial statements since the end
of the most recently completed fiscal year.
7
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RCPI TRUST
NOTES TO FINANCIAL STATEMENTS (cont'd)
(UNAUDITED)
3. MORTGAGE LOAN AND INTEREST INCOME
Due to the significant uncertainties caused by the filing of the Chapter 11
Plan, the Predecessor limited recognition of income on the Mortgage Loan
for the quarter and six months ended June 30, 1996 to the cash actually
received from the Previous Owners. No cash was received during this period.
4. DEBT
Convertible Debentures
The Convertible Debentures were issued pursuant to an Indenture, dated as
of September 15, 1985 (as amended, the "Indenture"), between the
Predecessor and Manufacturers Hanover Trust Company (now the United States
Trust Company) as Trustee. The Convertible Debentures were convertible into
shares of Common Stock of the Predecessor on the maturity date, December
31, 2000, and upon certain other events. On July 10, 1996, pursuant to the
terms of the Indenture, the Indenture was amended in connection with the
Merger to provide that the holder of a Convertible Debenture shall, after
the Effective Date and only at such times as may be provided by the terms
and conditions of the Indenture and such Convertible Debenture, have the
right to convert such Convertible Debenture only into cash in an amount
equal to eight dollars ($8.00) in respect of each share of Common Stock of
the Predecessor into which such Convertible Debenture could otherwise have
been converted at the time of conversion pursuant to the terms and
conditions of the Indenture and such Convertible Debenture. At such time,
the Company became the successor to the Predecessor under the amended
Indenture.
Upon maturity, the Convertible Debentures are also exchangeable into
nonconvertible floating rate notes, at the holder's option. In the event a
holder of a Convertible Debenture fails to timely surrender such
Convertible Debenture for conversion or exchange, such holder shall be
deemed to have elected to exchange such Convertible Debenture, unless the
holders of 90% of the aggregate principal amount of such series of
Convertible Debentures have elected to convert their Convertible
Debentures, in which case such holder shall be deemed to have elected to
convert such Convertible Debenture. After exchange, the floating rate notes
would mature on December 31, 2007 and, would be prepayable anytime at the
Company's option, at par. The notes will bear interest at the three-month
London Interbank Offering Rate ("LIBOR") plus 1/4% or such greater spread
(not in excess of 1%) as would, in the opinion of a major international
investment bank selected by the Company, cause such notes to trade at par.
Prior to 1994, the Predecessor had repurchased and retired 36.4% of
original principal amount of the Current Coupons and 38.4% of the face
amount of the Zero Coupons. The Predecessor's repurchase of its Convertible
Debentures was initially funded through floating rate short-term unsecured
bank loans which were later fully repaid when the Predecessor initiated a
commercial paper program. The commercial paper borrowings were fully repaid
in 1994 with proceeds from sales of the Predecessor's portfolio securities,
operating cash flow and the issuance of 14% Debentures and Floating Rate
Notes (see below).
Interest expense recognized by the Predecessor on the Convertible
Debentures was based on the average yields to the maturity date. The
average yields were computed (using the interest method with semiannual
compounding) by (1) combining the differing coupon rates on the Current
Coupons and (2) amortizing the original issue discount related to the Zero
Coupons. The resulting effective annual interest rates were 9.23% and
10.23% through the Effective Date for the Current Coupons and Zero Coupons,
respectively. Upon consummation of the Merger, the carrying value of the
Zero Coupons was adjusted by the Company to reflect the fair market value
using an imputed interest rate of 12.10%. The face amount of the Zero
Coupons is approximately $586.2 million.
The Current Coupons bore interest from the date of issuance until December
31, 1994 at the rate of 8% per annum, and therefore at the rate of 13% per
annum payable annually on December 31 of each year. On August 28, 1996, the
Current Coupons were redeemed at the principal amount of approximately
$213.2 million plus accrued interest.
8
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RCPI TRUST
NOTES TO FINANCIAL STATEMENTS (cont'd)
(UNAUDITED)
GSMC Facility
Pursuant to a Loan Agreement dated December 18, 1994, between the
Predecessor and GSMC (as Agent and as Lender), the Predecessor issued
Floating Rate Notes totaling $150 million (the "GSMC Facility"). The
Predecessor made mandatory principal payments on the Floating Rate Notes of
approximately $33.7 million, which reduced the principal balance to
approximately $116.3 million prior to the Effective Date. On July 17, 1996,
a total of approximately $106.3 million of the outstanding principal,
approximately $1.2 million of accrued interest and a prepayment penalty of
approximately $1.6 million was prepaid by the Company.
Pursuant to the Amended and Restated Loan Agreement dated July 17, 1996,
the Company was named as successor in interest to the Predecessor. The GSMC
Facility, among other things, was amended to change the maturity date of
the Floating Rate Notes to January 31, 1997 and provided for an Additional
Advance, as defined, up to a maximum outstanding balance of $60 million.
Subsequent amendments to the Amended and Restated Loan Agreement had
extended the maturity date to May 31, 1997. On May 16, 1997, the remaining
$10 million of principal was prepaid, plus accrued interest of
approximately $196,000 and a prepayment penalty of $150,000. At that time
the GSMC Facility was terminated.
The Floating Rate Notes bore interest based on 90-day LIBOR plus 4% which
was reset two business days prior to each interest payment date. The
weighted average interest rate was 9.52% for the six months ended June 30,
1997 for the Company, and 9.61% for the six months ended June 30, 1996 for
the Predecessor. Interest was payable quarterly on March 1, June 1,
September 1, and December 1 of each year.
The Merger Agreement provided that GSMC would make a line of credit (the
"GSMC Loan") available to the Predecessor during the period between
November 7, 1995 and the earlier of (1) the consummation of the Merger as
contemplated by the Merger Agreement or (2) any termination of the Merger
Agreement. The GSMC Loan accrued interest at the rate of 10% per annum
(compounded quarterly) and was prepayable at any time without penalty. The
Predecessor borrowed a total of approximately $63.7 million under the GSMC
Loan which was repaid, along with accrued interest, on July 17, 1996 by the
Company.
14% Debentures
The 14% Debentures were issued pursuant to a Debenture Purchase Agreement
dated as of December 18, 1994 between the Predecessor and Whitehall and
amended effective July 10, 1996 to, among other things, name the Company as
the successor in interest to the Predecessor. The unsecured 14% Debentures
mature on December 31, 2007 and bear interest at a rate of 14% per annum.
On May 16, 1997, the agreement was further amended in conjunction with the
execution of the NationsBank Loan (see below), to change the semi-annual
interest payment dates from each June 2 and December 2 to each July 31 and
January 31, respectively.
The Company's interest expense for the 14% Debentures includes the
amortization of a premium adjustment to reflect the carrying amount of the
14% Debentures at their estimated fair value as of the Effective Date. The
premium on the 14% Debentures is being amortized on the effective interest
method until maturity. The Predecessor's interest expense on the 14%
Debentures includes the straight line amortization of the original issue
discount related to the Warrants and SARs (see below) through the maturity
date, December 31, 2007.
Under the terms of the 14% Debentures, to the extent that Net Cash Flow, as
defined, is insufficient to pay interest on an interest payment date, the
Company will not be obligated to pay interest on the 14% Debentures on such
date and such interest will accrue. If an Event of Default, as defined,
were to occur and be continuing, the 14% Debentures would bear interest at
18% per annum. Upon the occurrence of an Event of Default, the holders of
the 14% Debentures may declare the unpaid principal thereof and accrued
interest thereon due and payable. The 14% Debentures are redeemable in
whole or in part at any time after December 30, 2000 provided the Floating
Rate Notes have been paid in full. The Debenture Purchase Agreement
provides for decreasing penalties for early redemption of the 14%
Debentures before December 31, 2003.
In connection with the issuance of the 14% Debentures in December 1994, the
Predecessor issued to Whitehall 4,155,927 Warrants, to acquire shares of
newly issued Common Stock of the Predecessor and
9
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RCPI TRUST
NOTES TO FINANCIAL STATEMENTS (cont'd)
(UNAUDITED)
5,349,541 Stock Appreciation Rights ("SARs"),which were exchangeable for
14% Debentures or, under certain circumstances, for Warrants on a
one-for-one basis. The Predecessor was required to make adjustments to
earnings for the difference between the aggregate principal amount of 14%
Debentures issuable upon exchange of the SARs (SARs liability) and the
value at which the SARs liability was carried. In connection with the
Merger (see Note 1), all outstanding Warrants and SARs were contributed by
Whitehall through Holdings to the Predecessor at a value of $4.00 per
Warrant and SAR and were then canceled.
NationsBank Credit Facility
The Company entered into a Credit Agreement (the "NationsBank Credit
Agreement") dated as of May 16, 1997, with NationsBank of Texas, N.A.
("NationsBank"), pursuant to which NationsBank agreed to make term loans
(the "NationsBank Loans") to the Company in an aggregate principal amount
of up to $100 million. On May 16, 1997, NationsBank made a term loan to the
Company in the principal amount of $55 million. The Company may elect
interest periods based on one, two, three, or six month LIBOR rates.
Interest accrues at LIBOR plus 1.75% and is payable at the end of each
interest period. As of June 30, 1997, interest was accruing at 7.5% on the
initial $55 million and no other NationsBank Loans have been made. The
maximum amount of NationsBank Loans which may be outstanding at any time
reduces quarterly commencing March 31, 1998 through the May 16, 2000
maturity date. Subject to the satisfaction of certain conditions precedent,
the Company may extend the maturity date of the NationsBank Loans to
12/31/00 and such loans will bear interest based on LIBOR plus 2.125%
during such extension period.
In connection with the NationsBank Loans, the Company purchased an interest
rate protection agreement from Goldman Sachs Capital Markets L.P. capping
LIBOR at 7.69% during the first two years of the initial term and at 8.69%
thereafter including the extension period.
As a condition to making the NationsBank Loans, the holder of the 14%
Debentures and the Company executed an intercreditor and subordination
agreement pursuant to which the holder of the 14% Debentures agreed (i) to
subordinate payment on the 14% Debentures to the NationsBank Loans, (ii)
that in certain circumstances interest would accrue but not be paid on the
14% Debentures, and (iii) that NationsBank may take certain actions on
behalf of the holder of the 14% Debentures upon the occurrence of certain
bankruptcy related events in respect of the Company.
In addition, certain members of the Investor Group and/or certain of their
affiliates entered into a Limited Recourse Agreement dated as of May 16,
1997, in favor of NationsBank.
Interest rate swap agreements
In connection with its short term floating rate debt, the Predecessor
entered into interest rate swap agreements with financial institutions that
were intended to fix a portion of the Predecessor's interest rate risk on
floating rate debt. The Predecessor paid a fixed rate of interest
semi-annually and received a variable rate of interest semi-annually based
on 180-day LIBOR. In connection with the issuance of the Floating Rate
Notes and 14% Debentures in December 1994, the Predecessor retired all but
three of its interest rate swap agreements. The remaining three contracts
have an aggregate notional amount of $105 million and each expires during
1998.
The amount to be paid or received from interest rate swap agreements is
accrued as floating interest rates are reset semi-annually.
On the Effective Date, the Company assumed the three remaining interest
rate swap agreements and adjusted the carrying value of the swap
liabilities to reflect their estimated fair value of approximately $5.3
million. For each swap, the Company and the Predecessor paid a net weighted
average rate of interest of 3.84% and 3.91% for the six months ended June
30, 1997 and 1996, respectively. As of June 30, 1997 and December 31, 1996,
the net weighted average interest rate of swaps outstanding for the Company
was 3.78% and 3.93%, respectively.
10
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RCPI TRUST
NOTES TO FINANCIAL STATEMENTS (cont'd)
(UNAUDITED)
The interest rate swaps were used by the Predecessor for hedging purposes,
therefore the fair value of these swaps are not reflected in the
Predecessor's balance sheet and the incremental revenue or expense is
recognized in the Predecessor's statements of operations.
The interest rate swaps are reported in the Company's financial statements
on a mark to market basis. As of June 30, 1997 and December 31, 1996, the
carrying amount of all interest rate swap agreements was reported as a
liability by the Company of approximately $3.2 million and $5.2 million
respectively, based on information supplied by the swap counterparties to
the swap contracts. During the six months ended June 30, 1997, the Company
recorded an adjustment of approximately $2.0 million to properly mark to
market the swaps as of June 30, 1997 and reflected the adjustment as
reduction of interest expense in the Company's statement of operations.
5. CONTRIBUTIONS, DISTRIBUTION AND NET LOSS PER SHARE
Pursuant to the Stock Subscription and Stockholders Agreement dated July 9,
1996 that organized Holdings, the Limited Liability Company Agreement dated
July 9, 1996 that organized LLC (hereinafter Holdings and LLC will be
collectively referred to as the "Owners") and the Amendment Agreement dated
May 1, 1997 among the Owners, the Owners are required to provide additional
contributions up to the Maximum Additional Mandatory Contribution, as
defined, totaling $82.5 million. The Maximum Additional Mandatory
Contribution shall be used to fund unforeseen capital expenditures and
similar contingencies reasonably necessary to protect and maintain the
value of the Property. During the quarter ended June 30, 1997, the Company
made cash distributions to each of its Owners in an aggregate amount of
$44,127,504. RCPI and LLC each received 50% of the distribution. In
addition, during the quarter ended June 30, 1997 LLC contributed an
additional $10,000 to the Company. LLC receives an 8% cumulative preferred
return on the $10,000 contribution.
The Indenture governing the Convertible Debentures limits cash
distributions to the Owners of the Company to the amount of cumulative
Distributable Cash. The Indenture defines Distributable Cash as cash
receipts from operations less operating expenses and interest. The amount
of Distributable Cash, net of dividends and distributions paid (including
the distribution referred to above), at June 30, 1997 and December 31, 1996
was approximately $33 million and $63 million respectively. This amount
includes cash flows from operating activities and certain investing
activities, net of dividends paid, from the Predecessor's inception through
July 9, 1996 of approximately $70 million. As interest income was not
received by the Predecessor during the period when the Previous Owners were
under Chapter 11 protection, net cash flows from operations of the
Property, which accrued to the benefit of the Company during this period,
are also included.
Net loss per share for the Predecessor is based upon 38,260,704 average
shares of Common Stock outstanding during the six months ended June 30,
1996. For this period, fully diluted net loss per share is not presented
since the effect of the assumed conversion of the Convertible Debentures,
Warrants and SARs would be anti-dilutive.
6. LEGAL MATTERS
On January 23, 1995, Bear, Stearns & Co., Inc. and Donaldson, Lufkin &
Jenrette Securities Corporation commenced an action against the Predecessor
in the Supreme Court of New York, County of New York. The plaintiffs
alleged that the Predecessor breached a contract relating to the
plaintiffs' provision of investment banking services to the Predecessor in
connection with a proposed 1994 transaction. The plaintiffs sought $5.1
million, plus costs, attorneys' fees and interest. On October 19, 1995, the
Predecessor filed an answer to the complaint which denied the plaintiffs'
allegations and asserted numerous affirmative defenses. On June 11, 1996,
the plaintiffs moved for partial summary judgment on their claim for
$950,000 in advisory fees and reimbursement of expenses incurred in
connection with the underlying proposed transaction. On December 19, 1996,
the court granted plaintiffs' motion, and on February 5, 1997, the court
entered judgment on that claim in the total amount, including pre-judgment
interest, of $1,115,612.33. The Company satisfied that judgment prior to
trial. The trial regarding the plaintiffs' claims for its "success fees"
and indemnification of legal fees and expenses commenced on February 24,
1997. On March 3, 1997, during
11
<PAGE>
RCPI TRUST
NOTES TO FINANCIAL STATEMENTS (cont'd)
(UNAUDITED)
the course of the trial, the parties agreed to a settlement. Pursuant to
the settlement agreement, the Company paid plaintiffs $2 million, and
plaintiffs dismissed the lawsuit with prejudice. Plaintiffs and the Company
executed mutual releases of all claims arising out of the engagement of
plaintiffs in connection with the proposed 1994 transaction.
On May 24, 1995, Jerry Krim commenced an action encaptioned Krim v.
Rockefeller Center Properties, Inc. and Peter D. Linneman. On June 7, 1995,
Kathy Knight and Moishe Malamud commenced an action encaptioned Knight, et
al. v. Rockefeller Center Properties, Inc. and Peter D. Linneman. Both
actions were filed in the United States District Court for the Southern
District of New York and purport to be brought on behalf of a class of
plaintiffs comprised of all persons who purchased the Predecessor's Common
Stock between March 20, 1995 and May 10, 1995. The complaints allege that
the Predecessor and Dr. Linneman violated the federal securities laws by
their purported failure to disclose, prior to May 11, 1995, that the
Previous Owner would file for bankruptcy protection. The cases have been
consolidated. On July 28, 1995, Predecessor and Dr. Linneman filed answers
to the complaints denying plaintiffs' substantive allegations and asserting
numerous affirmative defenses. On September 22, 1995, plaintiffs served an
Amended Class Action Complaint adding the Predecessor's remaining directors
and its president as defendants. In addition to the foregoing claims, the
Amended Complaint also asserts a cause of action for breach by the
Predecessor's directors and its president of their fiduciary duties by
approving the Agreement and Plan of Combination dated as of September 11,
1995, between the Predecessor and Equity Office Holdings, L.L.C. ("EOH")
(the "Combination Agreement"). The plaintiffs are seeking damages in such
amount as may be proved at trial. Plaintiffs are also seeking injunctive
relief, plus costs, attorneys' fees and interest. Plaintiffs' counsel has
advised that they may further amend the complaints in both actions. The
Company intends to vigorously contest these actions.
On November 15, 1996, Charal Investment Co., Inc. and C.W. Sommer & Co.
filed a purported class action complaint in the United States District
Court for the District of Delaware against certain former directors and
officers of the Predecessor and against certain of the Company's indirect
shareholders. Plaintiffs alleged that the defendants violated Section 10(b)
of the Securities and Exchange Act of 1934 (the "Act") and Rule 10b-5
promulgated thereunder, and Section 14 of the Act and Rule 14a-9
promulgated thereunder by allegedly failing to provide adequate disclosure
of the alleged possibility of a sale or lease financing of a portion of the
Property to NBC and its parent corporation, GE, prior to the shareholder
vote on the Merger. The complaint sought unspecified damages, recission of
the Merger and/or disgorgement. The Company may have indemnity obligations
with respect to one or more of the defendants. On December 11, 1996 and
December 18, 1996, identical complaints were filed in the federal court in
Delaware by additional plaintiffs. On January 13, 1997, all these actions
were consolidated under the caption In re Rockefeller Center Properties,
Inc. Securities Litigation, Cons. C.A. No 96-543 (RRM) ("In re RCPI"). On
January 31, 1997, all defendants moved to dismiss the complaint for failure
to state a claim. On March 3, 1997, the plaintiffs in In re RCPI responded
to the motion to dismiss by filing an amended complaint. The two federal
securities law claims remain the same, but the plaintiffs added new
allegations that defendants failed adequately to disclose (i) the existence
of certain transferable development rights, or air rights, that were
obtained by the Company in connection with the Merger, and (ii) alleged
negotiations with Christie's Auction House and the Walt Disney Company to
become new tenants at Rockefeller Center. On April 30, 1997, defendants
supplemented their initial motion to dismiss by moving to dismiss the
amended complaint for failure to state a claim. On May 9, 1997, the court
signed a supplemental order of consolidation admitting four new plaintiffs.
On January 21, 1997, an action entitled Flashman v. Goldman, Sachs & Co.,
97 Civ. 0403 (MGC) (S.D.N.Y.), was filed in New York Federal court
containing allegations substantially similar to those in the original
complaint in In re RCPI. Subsequently, the plaintiff in Flashman joined as
a plaintiff in the amended complaint filed in In re RCPI and voluntarily
dismissed the New York action without prejudice.
On February 25, 1997, an action entitled Debora v. Rockefeller, et. al., 97
Civ. 01312 (LLS) ("Debora"), was filed in the United States District Court
for the Southern District of New York. The complaint in Debora was
substantially similar to the original complaint in In re RCPI. The
defendants are the same in both actions. Subsequently, the plaintiff in
Debora voluntarily dismissed the action without prejudice and joined as a
plaintiff in In re RCPI.
12
<PAGE>
RCPI TRUST
NOTES TO FINANCIAL STATEMENTS (cont'd)
(UNAUDITED)
On July 31, 1995, L.L. Capital Partners, L.P. commenced an action against
the Predecessor in the United States District Court in the Southern
District of New York. The plaintiff alleged that, the Predecessor's
prospectus dated November 3, 1993, failed to disclose its purported belief
that the Rockefeller Interests and Mitsubishi Estate would cease to fund
the Previous Owner's cash flow shortfalls. On January 3, 1997, the parties
entered into a settlement agreement and executed and filed stipulations of
dismissals and releases dismissing all claims, counterclaims and third
party claims with prejudice. In connection with the dismissal, the Company
paid L.L. Capital Partners, L.P. the sum of $50,000.
On September 13 and 14, 1995, five class action complaints, captioned
Faegheh Moezinia v. Peter D. Linneman, Benjamin D. Holloway, Peter G.
Peterson, William F. Murdoch, Jr. and Rockefeller Center Properties, Inc.;
Martin Zacharias v. B.D. Holloway, P.G. Peterson, W.F. Murdoch, P.D.
Linneman Rockefeller Center Properties, Inc.; James Cosentino v. Peter D.
Linneman, Benjamin D. Holloway, Peter G. Peterson, William F. Murdoch, Jr.
and Rockefeller Center Properties, Inc.; Mary Millstein v. Peter D.
Linneman, Peter G. Peterson, Benjamin D. Holloway, William F. Murdoch, Jr.
and Rockefeller Center Properties, Inc.; and Robert Markewich v. Peter D.
Linneman and Daniel M. Neidich, et al. were filed in the Delaware Court of
Chancery. On October 11, 1995, an additional complaint captioned Hunter
Hogan v. Rockefeller Center Properties, Inc., et al. was filed in the
Delaware Court of Chancery. Each of the complaints purports to be brought
on behalf of a class of plaintiffs comprised of stockholders of the
Predecessor who have been or will be adversely affected by the Combination
Agreement. All of the complaints allege that the Predecessor's directors
breached their fiduciary duties by approving the Combination Agreement. The
plaintiffs seek damages in such amount as may be proved at trial.
Plaintiffs also seek injunctive relief, plus costs and attorneys fees. On
November 8, 1995, the Delaware Court of Chancery entered an order
consolidating these actions under the caption In re Rockefeller Center
Properties, Inc. Shareholders Litigation, Consol. C.A. No. 14612. In a
status report filed with the court on February 28, 1997, plaintiffs counsel
represented to the court that the actions "had been mooted" and that an
application for counsel fees was being prepared. The Company intends to
contest any such application vigorously.
On July 31, 1996, a Petition for Appraisal, captioned Solomon v.
Rockefeller Center Properties, Inc., C.A. No. 15155, was filed in the
Delaware Court of Chancery. The petitioners allege that the consideration
paid to RCPI's stockholders in conjunction with the Merger was inadequate
and they request that the Court determine the fair value of their stock at
the time of the Merger. Predecessor filed its Response to the Petition for
Appraisal on October 7, 1996, in which it asserts that the fair value of
Predecessor common stock at the time of the Merger was not more than $8.00
per share and asks the Court to so determine.
Although the outcome of claims, litigation and disputes cannot be predicted
with certainty, in the opinion of management based on facts known at this
time, the resolution of such matters are not anticipated to have a material
adverse effect on the financial position or results of operations of the
Company. As these matters continue to proceed through the process to
ultimate resolution, it is reasonably possible that the Company's
estimation of the effect of such matters could change within the next year.
13
<PAGE>
RCPI TRUST
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The discussion below relates primarily to the results of operations of the
Predecessor for the six months ended June 30, 1996 and the financial
condition and results of operation of the Company at and for the six months
ended June 30, 1997. In addition, pro forma operating statements are
presented to provide a meaningful comparison of the results of operation of
the Property for the six months ended June 30, 1997 and 1996 as if the
acquisition of the Property and the NBC Sale (see below) had occurred on
January 1, 1996.
Results of Operations - Rockefeller Center Properties, Inc.
The Predecessor's principle source of revenue was interest income received
on the Mortgage Loan. For the six months ended June 30, 1996 the
Predecessor limited recognition of income on the Mortgage Loan to the cash
actually received. Since the Previous Owner filed for Chapter 11 protection
on May 11, 1995, and through the Effective Date, the Predecessor did not
receive any interest payments and accordingly no income was recognized.
Other income for the six months ended June 30, 1996 was approximately
$36,000, and relates to interest earned on cash deposits.
Amortization of deferred debt issuance costs for the six months ended June
30, 1996 was approximately $1.8 million. The total relates to normal
amortization of deferred debt issuance costs related to the Current
Coupons, Zero Coupons, 14% Debentures, and Floating Rate Notes.
The Predecessor was required to adjust the SAR liability to reflect the
aggregate principal amount of 14% Debentures that would have been issuable
upon exchange of the SARs on June 30, 1996. This adjustment, which is
directly related to the increase in the Predecessor's stock price, resulted
in an expense of approximately $1.9 million for the six months ended June
30, 1996. Concurrent with the Merger, the Predecessor's SARs and Warrants
were canceled.
During the six months ended June 30, 1996 the Predecessor recognized
approximately $398,000 in expenses related to the March 25, 1996 special
meeting of stockholders. The stockholders approved the Merger Agreement on
that date.
All debt of the Predecessor was transferred to the Company on the Effective
Date. To provide a more meaningful analysis, interest expense recognized by
the Company for the six months ended June 30, 1997 is compared to interest
expense recognized by the Predecessor for the six months ended June 30,
1996. The following table illustrates comparative interest expense for the
six months ended June 30, 1997 and 1996.
14
<PAGE>
RCPI TRUST
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION (cont'd)
<TABLE>
<CAPTION>
($ In Thousands)
For the six months ended June 30
<S> <C> <C>
1997 1996
Zero coupon convertible debentures $ 22,470 $ 17,971
Current coupon convertible debentures - 11,022
14% debentures 4,579 5,489
NationsBank Loan 541 -
Floating rate notes 507 5,588
GSMC Loan - 2,379
Interest rate swaps and other (13) 2,054
Total $28,084 $44,503
</TABLE>
Interest expense on the Zero Coupons increased partially as a result of the
accretion of the principal amount, which increases the carrying value of
the Zero Coupons each year. In addition, the accretion had compounded at an
effective interest rate of 10.23% prior to the Merger. As of the Effective
Date, the fair market value of the Zero Coupons was adjusted, and the
carrying amount of the Zero Coupons has been accreting at 12.10% since that
date.
The Predecessor recognized approximately $11.0 million of interest expense
on the Current Coupons for the six months ended June 30, 1996. As the
Current Coupons were redeemed on August 28, 1996, the Company did not
recognize any interest expense for the six months ended June 30, 1997.
Interest expense on the 14% Debentures accrued at the pay rate of 14%, plus
amortization of the discount related to the warrants and SARs, prior to the
Effective Date. As of the Effective Date, the fair market value of these
Debentures was adjusted resulting in a premium. As a result of premium
amortization related to this adjustment, the effective interest rate on the
14% Debentures has been approximately 9.03% since the Effective Date.
Accordingly, interest expense is lower for the six months ended June 30,
1997.
On May 16, 1997 the Company entered into the NationsBank Credit Agreement.
As of June 30, 1997 the Company had borrowed $55 million under the
NationsBank Credit Agreement. Interest expense for the six months ended
June 30, 1997 was approximately $541,000. There is no corresponding expense
for the six months ended June 30, 1996.
On September 1, 1995, the Predecessor repaid $33.7 million of the $150
million of Floating Rate Notes originally issued in December 1994. On July
17, 1996, the Company prepaid an additional $106.3 million of outstanding
principal plus accrued interest. On May 16, 1997 the remaining $10 million
of principal was repaid. Interest expense related to the Floating Rate
Notes is lower for the six months ended June 30, 1997 due to the smaller
principal balance outstanding during that period. Interest expense on the
swap agreement, which the Predecessor had accounted for as a component of
interest expense related to the Floating Rate Notes, has been reclassified
for this analysis.
Interest expense related to the GSMC Loan was approximately $2.4 million
for the six months ended June 30, 1996. The GSMC Loan was repaid in full on
July 17, 1996, thus there is no related expense for the six months ended
June 30, 1997.
Other interest expense for the six months ended June 30, 1997 resulted in a
credit of $13,000 as a result of the mark to market adjustment of
approximately $2.0 million, which fully offset interest expense related to
the interest rate swap agreements. The Predecessor did not account for the
interest rate swap agreements on a mark to market basis, thus there is no
corresponding adjustment for the six months ended June 30, 1996.
15
<PAGE>
RCPI TRUST
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION (cont'd)
Liquidity and Capital Resources - RCPI Trust
Land and Building
As discussed above, on July 17, 1996, the Property was transferred to the
Company and the related Mortgage Loan was canceled. Concurrently, the
Previous Owners sold the NBC Space to GE, NBC, and their affiliates for
$440 million. The NBC Space, measured in accordance with the standards
promulgated by the New York Real Estate Board in 1987, accounted for
approximately 1.5 million square feet, or 20.5% of the total area of the
Property. At June 30, 1997 the Property, exclusive of the NBC Space, was
approximately 86.4% occupied. Occupancy rates for the Property at various
dates are presented in the following table. Occupancy rates for dates prior
to the Effective Date have been adjusted to account for the sale of the NBC
space.
March 31, 1997 83.3% June 30, 1996 82.2%
December 31, 1996 83.6% March 31, 1996 83.8%
September 30, 1996 82.8% December 31, 1995 82.7%
The following table shows selected lease expirations and vacancy of the
Property as of June 30, 1997. Area, as presented below and discussed above,
is measured based on standards promulgated by the New York Real Estate
Board in 1987. Lease turnover could offer an opportunity to increase the
revenue of the Property or might have a negative impact on the Property's
revenue. Actual renewal and rental income will be affected significantly by
market conditions at the time and by the terms at which the Company can
then lease space.
<TABLE>
<S> <C> <C>
Square Feet Percent
Year Expiring Expiring
Vacant 801,957 13.6%
1997 205,234 3.5%
1998 317,415 5.4%
1999 202,683 3.4%
2000 452,990 7.7%
2001 114,456 1.9%
Thereafter 3,804,962 64.5%
Total 5,899,697 100.0%
</TABLE>
Debt
The Zero Coupons due December 31, 2000 accrete to a face value of
approximately $586.2 million at an effective annual interest rate of
12.10%. Concurrent with the Merger, the carrying value of the Zero Coupons
was adjusted to reflect the fair market value as of the Effective Date. As
a result, the effective annual interest rate was adjusted from 10.23% to
12.10%. At June 30, 1997 and December 31, 1996, the carrying value of the
Zero Coupons, net of unamortized discount, was approximately $384.6 million
and $362.2 million, respectively.
The Current Coupons were redeemed on August 28, 1996. Principal in the
amount of $213.2 million plus accrued interest of $18.3 million was paid on
that date. Interest accrued at the pay rate of 13% from the Effective Date
through the redemption date. Prior to the Effective Date, interest accrued
at an effective annual interest rate of 9.23%.
The GSMC Loan was repaid in full on July 17, 1996. The total payment of
$66.5 million included accrued interest of $2.8 million. Interest accrued
at 10% from inception through the payment date.
On July 17, 1996, outstanding principal on the Floating Rate Notes in the
amount of $106.3 million was prepaid and on May 16, 1997, the remaining $10
million of principal was repaid. Interest had accrued at LIBOR
16
<PAGE>
RCPI TRUST
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION (cont'd)
plus 4%. Interest was paid quarterly on March 1, June 1, September 1, and
December 1.
The 14% Debentures have a principal balance of $75 million and mature on
December 31, 2007. On the Effective Date, the carrying value of the 14%
Debentures was adjusted to reflect their estimated fair value at that date,
resulting in a premium. The effective interest rate, which is net of the
amortization of this premium, is approximately 9.03%. Interest payments are
made semi-annually on January 31 and July 31. As of June 30, 1997 and
December 31, 1996, the carrying value of the 14% Debentures was
approximately $100.5 million and $101.2 million, respectively.
On May 16, 1997, the Company entered into the NationsBank Credit Agreement
and as of June 30, 1997 has drawn $55 million under its $100 million
facility and has incurred $541,000 in interest.
Cash Flow
During the six months ended June 30, 1997 the Company received cash flows
of approximately $14.3 million from operations of the Property. The Company
used this cash flow from operations and its existing cash balance to fund
tenant improvements of approximately $6.3 million and other leasing costs
of approximately $8.4 million. In addition, the Company expended
approximately $6.1 million for building improvements, furniture, fixtures
and equipment. Legal costs and placement fees incurred in connection with
the closing of the NationasBank Credit Agreement were approximately $3.4
million.
The Company believes that its current cash balance and future cash flows
from operations, together with the remaining undrawn amount pursuant to the
NationsBank Credit Agreement, will be sufficient to fund its requirements
for the foreseeable future.
Inflation
Inflation and changing prices during the current period did not
significantly affect the markets in which the Company conducts its
business. In view of the moderate rate of inflation, its impact on the
Company's business has not been significant.
Results of Operations - RCPI Trust
As the Company has only been active since July 10, 1996, pro forma
operating statements for the six months ended June 30, 1997 and 1996 have
been prepared as if the Property had been acquired on January 1, 1996. The
discussion below highlights certain items included on the Company's
operating statement for the six months ended June 30, 1997, which are not
otherwise discussed. For a discussion of comparative results of operations
of the Property, refer to the caption "Pro Forma Results of Operations -
The Property."
During the six months ended June 30, 1997, the Company expensed $2.0
million, which is included with professional fees, related to the
settlement of the Bear Stearns & Co., Inc. and Donaldson, Lufkin, &
Jenrette Securities Corporation lawsuit (See Note 6). In addition to the
$2.0 million settlement, the Company expensed approximately $617,000 of
related legal fees. The payment is for full settlement of plaintiffs' claim
for "success fees" and indemnification of legal fees and expenses.
Plaintiffs' claim for advisory fees had been accrued by the Predecessor and
such expense, including interest thereon, is included in the Predecessor's
statement of operations for the year ended December 31, 1995.
For a comparison of interest expense of the Company and the Predecessor for
the six months ended June 30, 1997 and 1996, see "Results of Operations -
Rockefeller Center Properties, Inc."
Pro Forma Results of Operations - The Property
To provide a more meaningful comparison of results of operations, pro forma
statements of operations have been presented for the six months ended June
30, 1997 and 1996 as if the acquisition of the Property by the Company had
occurred on January 1, 1996. The pro forma statements of operations are
based upon the
17
<PAGE>
RCPI TRUST
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION (cont'd)
Company's statement of operations for the six months ended June 30, 1997
and the Previous Owners' statement of operations for the six months ended
June 30, 1996.
The pro forma statements of operations for the six months ended June 30,
1997 and 1996 have been adjusted to show the effect of (i) gross revenues
and operating expenses had the NBC Sale occurred on January 1, 1996; (ii)
interest expense had the GSMC Loan and Current Coupons been repaid in full,
and had $106.3 million of principal on the Floating Rate Notes been paid on
January 1, 1996; (iii) depreciation and amortization expense had the
Property been purchased and had the NBC Sale occurred on January 1, 1996,
and (iv) general and administrative expenses had certain bankruptcy related
costs not been incurred by the Previous Owners and had costs related to the
NBC Sale been incurred during the six months ended June 30, 1996.
The pro forma results are for illustrative purposes only, and do not
purport to be indicative of the actual results which would have occurred,
nor are they indicative of future results of operations.
<TABLE>
<CAPTION>
($ In Thousands)
Six months ended June 30,
<S> <C> <C>
1997 1996
Gross Revenue:
Rent and other tenant charges $91,231 $90,324
Interest income 824 771
92,055 91,095
Operating Expenses:
Real estate taxes 16,468 16,967
Utilities 7,840 8,278
Maintenance, engineering, and other operating expenses 21,909 30,522
Depreciation and amortization 9,206 8,376
Management fee 1,704 3,324
General and administrative 5,131 7,875
62,258 75,342
Earnings before interest 29,797 15,753
Interest expense 28,084 25,067
Net income (loss) $ 1,713 ($ 9,314)
</TABLE>
Rent and other tenant charges increased by approximately $960,000 for the
six months ended June 30, 1997 as compared to the same period in the prior
year. Occupancy, which remained fairly stable, was 86.4% at June 30, 1997
as compared to 82.2% at June 30, 1996. The increase in rent and other
tenant charges is due in part to new leases signed at higher rental rates
than were existing in the prior year and termination payments received
totaling $1.2 million.
The decrease in utilities; maintenance, engineering and other operating
expenses; and management fees in an aggregate amount of $10.7 million is
due to achieving cost reductions during the first six months of 1997.
The decrease in general and administrative expenses is due primarily to
legal and professional fees related to the NBC Sale of approximately $6.1
million, which based on pro forma results, would have been incurred during
the first six months of 1996. This decrease is offset by the $2.0 million
settlement and $617,000 of legal fees expended during the six months ended
June 30, 1997 related to the settlement of the Bear Sterns & Co., Inc. and
Donaldson, Lufkin & Jenrette Securities Corporation lawsuit.
Based on pro forma calculations, interest expense increased by $3.0 million
for the six months ended June 30, 1997. This increase is due primarily to
interest related to the Zero Coupons, which compound at 12.10% annually
resulting in an additional $2.5 million of expense during 1997. In addition
$541,000 of interest expense related to the NationsBank Loan was incurred
during the first six months of 1997. As the company executed the loan on
May 16, 1997, there was no corresponding expense during 1996.
18
<PAGE>
RCPI TRUST
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The information set forth in Note 6 to the financial statements is
incorporated herein by reference. See also the Company's Quarterly
Report on Form 10-Q for the period ended March 31, 1997.
Item 2. Changes in Securities
On May 1, 1997, the company issued a Special Interest
(representing a cumulative 8% preferred return on the cost of the
Special Interest) to L.L.C. for $10,000.
The Special Interest described above was issued without
registration under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to the exemption therefrom provided by
Section 4(2) of the Securities Act due to the limited number of
offerees.
19
<PAGE>
ITEM 6. (a) EXHIBITS
(3.1) Certificate of Trust of RCPI Trust, dated March 22,
1996 is incorporated by reference to Exhibit 3.1 to
the Company's Six monthsly Report on Form 10-Q for
the fiscal six months ended June 30, 1996.
(4.1) Amended and Restated Debenture Purchase Agreement
dated as of July 17, 1996 between the Company and
WHRC Real Estate Limited Partnership is
incorporated by reference to Exhibit 4.1 to the
Company's Annual Report on Form 10-K for the year
ended December 31, 1996.
(4.2) Indenture dated as of September 15, 1985 between
the Predecessor and Manufacturers Hanover Trust
Company, as 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
Predecessor's Six monthsly Report on Form 10-Q for
the period ended September 30, 1985.
(4.3) First Supplemental Indenture dated as of December
15, 1985 between the Predecessor and the Trustee,
is incorporated by reference to the Predecessor's
Annual Report on Form 10-K for the year ended
December 31, 1985.
(4.4) Second Supplemental Indenture dated as of July 10,
1996 between the Company and the United States
Trust Company of New York, as Trustee, is
incorporated by reference to the Company's Annual
Report on Form 10-K for the year ended December 31,
1996.
(4.5) 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 is incorporated by
reference to Exhibit 4.21 to the Predecessor's
Annual Report on Form 10-K for the year ended
December 31, 1993.
(4.6) Credit Agreement, dated as of May 16, 1997, between
the Company, NationsBank of Texas,
N.A. and the Lenders parties thereto.
(4.7) Intercreditor and Subordination Agreement, dated as
of May 16, 1997, among WHRC Real Estate Limited
Partnership, as attorney-in-fact for the 14%
Debenture holder, the Company and NationsBank of
Texas, N.A..
(4.8) Limited Recourse Agreement, dated as of May 16,
1997, made by certain members of the Investor Group
and/or certain of their affiliates in favor of
NationsBank of Texas, N.A..
(27.1) Company's Financial Data Schedule.
(b) REPORTS ON FORM 8-K
No Current Reports on Form 8-K have been filed during the last
fiscal quarter.
20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RCPI TRUST
Date: August 14, 1997 By: /s/ David Augarten
Vice President
(Principal Financial Officer)
21
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from RCPI Trust's
Balance Sheet as of March 31, 1997 and RCPI Trust's Statement of Operations for
the quarter ended March 31, 1997 and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 19,684
<SECURITIES> 0
<RECEIVABLES> 10,996
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 785,782
<DEPRECIATION> 15,272
<TOTAL-ASSETS> 858,625
<CURRENT-LIABILITIES> 21,207
<BONDS> 540,080
0
0
<COMMON> 0
<OTHER-SE> 290,062
<TOTAL-LIABILITY-AND-EQUITY> 858,625
<SALES> 0
<TOTAL-REVENUES> 92,055
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 62,258
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 28,084
<INCOME-PRETAX> 2,666
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,713
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,713
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
EXHIBIT 4.6
================================================================================
CREDIT AGREEMENT
AMONG
RCPI TRUST,
BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
AND
NATIONSBANK OF TEXAS, N.A.,
AS AGENT
DATED AS OF MAY 16, 1997
================================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
SECTION 1. DEFINITIONS............................................................................................1
1.1 DEFINED TERMS................................................................................................1
1.2 OTHER DEFINITIONAL PROVISIONS...............................................................................20
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS.......................................................................20
2.1 COMMITMENTS.................................................................................................20
2.2 NOTES.......................................................................................................20
2.3 PROCEDURE FOR BORROWING.....................................................................................21
2.4 UNUSED COMMITMENT FEE.......................................................................................21
2.5 TERMINATION OR REDUCTION OF COMMITMENTS.....................................................................22
2.6 EXTENSION OF MATURITY DATE..................................................................................22
2.7 INTEREST RATES AND PAYMENT DATES............................................................................23
2.8 CONVERSION AND CONTINUATION OPTIONS.........................................................................23
2.9 MINIMUM AMOUNTS AND MAXIMUM NUMBER OF TRANCHES..............................................................24
2.10 OPTIONAL PREPAYMENTS........................................................................................24
2.11 MANDATORY PREPAYMENTS.......................................................................................24
2.12 COMPUTATION OF INTEREST AND FEES............................................................................25
2.13 INABILITY TO DETERMINE INTEREST RATE........................................................................26
2.14 PRO RATA TREATMENT AND PAYMENTS.............................................................................26
2.15 ILLEGALITY..................................................................................................27
2.16 REQUIREMENTS OF LAW.........................................................................................27
2.17 TAXES.......................................................................................................28
2.18 INDEMNITY...................................................................................................30
2.19 LENDING OFFICES; CHANGE OF LENDING OFFICE...................................................................31
2.20 CERTIFICATES, ETC...........................................................................................31
SECTION 3. REPRESENTATIONS AND WARRANTIES........................................................................32
3.1 FINANCIAL CONDITION.........................................................................................32
3.2 NO CHANGE...................................................................................................33
3.3 EXISTENCE; COMPLIANCE WITH LAW..............................................................................33
3.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS...............................................................33
3.5 NO LEGAL BAR................................................................................................34
3.6 NO MATERIAL LITIGATION......................................................................................34
3.7 NO DEFAULT..................................................................................................34
3.8 OWNERSHIP OF PROPERTY; CONDITION OF TITLE; LEASES MAJOR SPACE LEASES AND MAJOR
RETAIL LEASES; LIENS; OTHER AGREEMENTS......................................................................34
3.9 INTELLECTUAL PROPERTY.......................................................................................36
3.10 TAXES.......................................................................................................36
3.11 FEDERAL REGULATIONS.........................................................................................37
3.12 ERISA.......................................................................................................37
3.13 INVESTMENT COMPANY ACT; OTHER REGULATIONS...................................................................37
3.14 SUBSIDIARIES................................................................................................37
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<PAGE>
3.15 ACCURACY AND COMPLETENESS OF INFORMATION....................................................................38
3.16 LABOR RELATIONS.............................................................................................38
3.17 INSURANCE...................................................................................................38
3.18 SOLVENCY....................................................................................................38
3.19 PURPOSE OF LOANS............................................................................................39
3.20 ENVIRONMENTAL MATTERS.......................................................................................39
3.21 OBLIGATION TO CONVEY........................................................................................40
3.22 CERTAIN EXISTING INDEBTEDNESS...............................................................................40
SECTION 4. CONDITIONS PRECEDENT..................................................................................41
4.1 CONDITIONS TO INITIAL LOANS.................................................................................41
4.2 CONDITIONS TO EACH LOAN.....................................................................................44
SECTION 5. AFFIRMATIVE COVENANTS.................................................................................45
5.1 FINANCIAL STATEMENTS........................................................................................45
5.2 CERTIFICATES; OTHER INFORMATION.............................................................................46
5.3 PAYMENT OF OBLIGATIONS......................................................................................47
5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE............................................................48
5.5 MAINTENANCE OF PROPERTY; INSURANCE..........................................................................48
5.6 DAMAGE, DESTRUCTION, CONDEMNATION...........................................................................50
5.7 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS......................................................53
5.8 NOTICES.....................................................................................................53
5.9 ENVIRONMENTAL LAWS..........................................................................................54
5.10 PROPERTY MANAGER............................................................................................54
5.11 CONDOMINIUM DOCUMENTS; EXPENSE SHARING AGREEMENT............................................................54
5.12 ASBESTOS....................................................................................................55
5.13 ESTOPPEL CERTIFICATES.......................................................................................55
SECTION 6. NEGATIVE COVENANTS....................................................................................55
6.2 LIMITATION ON INDEBTEDNESS AND HEDGING OBLIGATIONS..........................................................55
6.2 LIMITATION ON LIENS.........................................................................................56
6.3 LIMITATION ON GUARANTEE OBLIGATIONS.........................................................................57
6.4 LIMITATION ON FUNDAMENTAL CHANGES...........................................................................57
6.5 LIMITATION ON SALE OF ASSETS................................................................................57
6.6 LIMITATION ON RESTRICTED PAYMENTS...........................................................................58
6.7 LIMITATION ON CAPITAL EXPENDITURES..........................................................................59
6.8 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES...............................................................60
6.9 LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF AGREEMENTS.............................................60
6.10 LIMITATION ON TRANSACTIONS WITH AFFILIATES..................................................................61
6.11 LIMITATION ON CHANGES IN FISCAL YEAR........................................................................61
6.12 LIMITATION ON NEGATIVE PLEDGE CLAUSES.......................................................................61
6.13 LIMITATION ON LINES OF BUSINESS.............................................................................61
6.14 GOVERNING DOCUMENTS.........................................................................................61
6.15 LIMITATION ON SUBSIDIARY FORMATION..........................................................................61
6.16 LIMITATION ON SECURITIES ISSUANCES..........................................................................62
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<PAGE>
6.17 ASBESTOS....................................................................................................62
6.18 ALTERATIONS, MAINTENANCE, REPAIRS, WASTE....................................................................62
6.19 LIMITATIONS ON LEASING......................................................................................62
SECTION 7. EVENTS OF DEFAULT.....................................................................................62
SECTION 8. THE AGENT.............................................................................................66
8.1 APPOINTMENT.................................................................................................66
8.2 DELEGATION OF DUTIES........................................................................................67
8.3 EXCULPATORY PROVISIONS......................................................................................67
8.4 RELIANCE BY AGENT...........................................................................................67
8.5 NOTICE OF DEFAULT...........................................................................................68
8.6 NON-RELIANCE ON AGENT AND OTHER LENDERS.....................................................................68
8.7 INDEMNIFICATION.............................................................................................68
8.8 AGENT IN ITS INDIVIDUAL CAPACITY............................................................................69
8.9 SUCCESSOR AGENT.............................................................................................69
SECTION 9. MISCELLANEOUS.........................................................................................70
9.1 AMENDMENTS AND WAIVERS......................................................................................70
9.2 NOTICES.....................................................................................................70
9.3 NO WAIVER; CUMULATIVE REMEDIES..............................................................................72
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES..................................................................72
9.5 PAYMENT OF EXPENSES AND TAXES...............................................................................72
9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS......................................................73
9.7 ADJUSTMENTS; SET-OFF........................................................................................75
9.8 COUNTERPARTS................................................................................................76
9.9 SEVERABILITY................................................................................................76
9.10 INTEGRATION.................................................................................................76
9.11 GOVERNING LAW...............................................................................................76
9.12 SUBMISSION TO JURISDICTION; WAIVERS.........................................................................77
9.13 ACKNOWLEDGMENTS.............................................................................................77
9.14 WAIVERS OF JURY TRIAL.......................................................................................78
9.15 CONFIDENTIALITY.............................................................................................78
9.16 RECOURSE....................................................................................................78
</TABLE>
SCHEDULES
Schedule I Lenders, Commitments, and Lending Offices
Schedule 1.1(a) Properties and Allocated Loan Amounts
Schedule 1.1(b) Capital Expenditures Adjustments
Schedule 2.2 Scheduled Loan Repayments
Schedule 3.4(b) Permitting and Regulatory Matters
Schedule 3.6 Certain Litigation
Schedule 3.8(a) Permitted Encumbrances
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<PAGE>
Schedule 3.8(c) Lease Defaults
Schedule 3.8(d) Service Contracts
Schedule 3.8(e) Tax Assessments
Schedule 3.8(g) Amendments to Condominium
Schedule 3.8(h) Ground Lease Defaults
Schedule 3.8(i) Tenant Improvement Obligations
Schedule 3.8(m) Leasing Brokerage Contracts
Schedule 3.14 Subsidiaries
Schedule 3.20 Environmental Matters
Schedule 4.1(b) Scheduled Leases
Schedule 6.1 Existing Indebtedness and Hedging Obligations
Schedule 6.3 Existing Guarantee Obligations
Schedule 6.10 Certain Affiliate Transactions
EXHIBITS
Exhibit A Form of Note
Exhibit B Form of Tax Status Certificate
Exhibit C Form of Initial Borrowing Certificate
Exhibit D Form of Opinion of Sullivan & Cromwell
Exhibit E Form of Assignment and Acceptance
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<PAGE>
CREDIT AGREEMENT, dated as of May 16, 1997, among RCPI TRUST, a
Delaware business trust (the "Borrower"), the lenders from time to time parties
to this Agreement (the "Lenders") and NATIONSBANK OF TEXAS, N.A., a national
banking association, as agent for the Lenders hereunder.
RECITALS
The Borrower was formed to take title to certain real and personal
property constituting a portion of the twelve buildings in New York City known
as Rockefeller Center, pursuant to the Second Amended Joint Plan of
Reorganization, confirmed on May 29, 1996, in the bankruptcy cases of RCP
Associates, a New York limited partnership, and Rockefeller Center Properties, a
New York general partnership. Pursuant to the Agreement and Plan of Merger,
dated as of November 7, 1995, as amended (the " Merger Agreement"), among RCPI,
RCPI Holdings, Inc., a Delaware corporation ("Holdings"), RCPI Merger, Inc., a
Delaware corporation ("RCPI Merger"), and certain investors party thereto, RCPI
Merger was merged with and into RCPI effective July 10, 1996, after giving
effect to which RCPI was a wholly-owned subsidiary of Holdings. Each of RCPI and
RCPI Investors LLC, a Delaware limited liability company (the "LLC"), are the
owners of approximately 50% in beneficial interest in the Borrower. The Borrower
has assumed substantially all of the liabilities of RCPI. The Borrower, has
requested that each of the Lenders make one or more term loans to the Borrower
in one or more advances, in an aggregate principal amount not to exceed
$100,000,000, the proceeds of which would be used to refinance certain
indebtedness of the Borrower, to pay or refinance certain settlement
obligations, to finance certain capital expenditures and for other general
working capital purposes of the Borrower.
The Lenders are willing to make such term loans available to the
Borrower, but only on the terms, and subject to the conditions, set forth in
this Agreement.
Accordingly, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
"Accelerated Amortization Payment": as defined in Section 2.11(e).
"Adjusted Net Operating Income": for any Test Period, Net Operating
Income for such period minus the Stabilized Capital Expenditures Amount for
such period.
"Affected Lender": as defined in Section 2.21.
-1-
<PAGE>
"Affiliate": as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person
(including, with its correlative meanings, "controlled by" and "under
common control with") means the power, directly or indirectly, either to
(a) vote 10% or more of the securities having ordinary voting power for the
election of directors of such Person or (b) direct or cause the direction
of the management and policies of such Person, whether by contract or
otherwise.
"Agent": NationsBank of Texas, N.A., together with its affiliates, as
the arranger of the Commitments and as the agent for the Lenders under this
Agreement and the other Loan Documents.
"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Air Rights": the excess, if any, of the maximum permissible floor
area of buildings now or hereafter available for "as of right" development
of buildings on the portion of the Properties described "Remaining
Property" on Schedule 1.1(a) annexed hereto, together with all buildings
and improvements thereon and all rights appurtenant thereto, without regard
to the landmark status of the improvements thereon, over the current
as-built floor area of the improvements erected on such parcel, all
determined in accordance with the applicable provisions of the Zoning
Resolution, and including, without limitation, the development rights
specified in the Special Permit. As used in this definition, "Special
Permit" means that certain special permit granted by the City Planning
Commission of The City of New York (Permit No. C 890639 ZSM), as amended,
renewed or replaced from time to time; and "Zoning Resolution" means the
Zoning Resolution of The City of New York, as amended from time to time,
promulgated by the City Planning Commission pursuant to Section 200 of the
New York City Charter.
"Allocated Loan Amount": with respect to any Property, the amount set
forth opposite the name of such Property on Schedule 1.1(a); provided,
however, that the Allocated Loan Amount of each Property shall be reduced
on and as of the date of any scheduled payment of principal of the Loans or
any optional or mandatory prepayment of the Loans (other than any mandatory
prepayment made pursuant to Section 2.11(a) in connection with any Release,
but only to the extent of the Allocated Loan Amount(s) of the Property or
Properties (or portions thereof) being released) by an amount equal to the
amount of such payment or prepayment multiplied by a fraction, the
numerator of which shall be such Allocated Loan Amount immediately prior to
such reduction and the denominator of which shall be the aggregate of all
Allocated Loan Amounts of all Properties owned by the Borrower immediately
prior to such reduction; provided, further, however, that for purposes of
determining any reduction of any Allocated Loan Amount, if a Release shall
occur on the same date as any payment or prepayment of the Loans which
would require a reduction in Allocated Loan Amounts pursuant to the
-2-
<PAGE>
immediately preceding proviso, such Release shall be deemed to occur prior
to such payment or prepayment and prior to such reduction in Allocated Loan
Amounts; and provided, further, however, that, with respect to the Release
of any portion of any Property, (i) the Allocated Loan Amount of such
Property shall be allocated ratably between the portion of such Property
subject to such Release and the portion of such Property not subject to
such Release by the Agent in good faith based upon such factors as, without
limitation, the respective square footages and loan to value ratios of such
portions of such Property and the contractual rents attributable to such
portions of such Property, and such allocated amount shall be deemed the
"Allocated Loan Amount" for each such portion of such Property, and (ii)
from and after such Release, the portion of such Property which was not
subject to such Release shall be deemed to be a "Property" for all purposes
hereof.
"Applicable Lending Office": for each Lender and for each Type of
Loan, the lending office of such Lender designated for such Type of Loan on
Schedule I hereto (or any other lending office from time to time notified
to the Agent by such Lender ) as the office at which its Loans of such Type
are to be made and maintained.
"Applicable Margin": for any Loan of any Type at any time, the rate
per annum set forth under the relevant column heading below opposite the
applicable period set forth below:
Eurodollar Base Rate
Period Loans Loans
----------------- --------------- --------------
Initial Term 1.75% 0.50%
Extension Term 2.125% 0.875%
"Arranger": NationsBanc Capital Markets, Inc., as the arranger and
syndication agent of the Commitments.
"Assignee": as defined in Section 9.6(c).
"Assignment and Acceptance": as defined in Section 9.6(c).
"Available Commitment": as to any Lender at any time, an amount equal
to the excess, if any, of (a) the amount of such Lender's Commitment at
such time over (b) the aggregate principal amount of all Loans theretofore
made by such Lender.
"Base Rate": for any day, the rate per annum (rounded upward, if
necessary, to the next 1/100 of 1%) equal to the greater of (a) the Prime
Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. For purposes hereof, "Prime Rate" shall
mean the rate of interest publicly announced by
-3-
<PAGE>
NationsBank in Charlotte, North Carolina, from time to time as its base
rate (the base rate not being intended to be the lowest rate of interest
charged by NationsBank in connection with extensions of credit to debtors.)
"Base Rate Loans": Loans the rate of interest applicable to which is
based upon the Base Rate.
"Borrower": as defined in the heading to this Agreement.
"Borrowing Date": any Business Day specified in a notice pursuant to
Section 2.3 as a date on which the Borrower requests the Lenders to make
Loans hereunder.
"Business": as defined in Section 3.21(b).
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in Dallas, Texas or New York City are authorized or
required by law to close, and, if such day relates to a borrowing of, a
payment or prepayment of principal of or interest on, or a Conversion of or
into, or an Interest Period for, a Eurodollar Loan or a notice by the
Borrower with respect to any such borrowing, payment, prepayment,
Conversion or Interest Period, which is also a day on which dealings in
Dollar deposits are carried out in the London interbank market.
"Capital Budget": as defined in Section 5.2(c).
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all similar ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"Cash Equivalents": (a) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed or insured by the
United States Government or any agency thereof, (b) certificates of deposit
and eurodollar time deposits with maturities of one year or less from the
date of acquisition and overnight bank deposits of any Lender or of any
commercial bank having capital and surplus in excess of $500,000,000, (c)
repurchase obligations of any Lender or of any commercial bank satisfying
the requirements of clause (b) of this definition, having a term of not
more than 30 days with respect to securities issued or fully guaranteed or
insured by the United States Government, (d) commercial paper of a domestic
issuer rated at least A-1 or the equivalent thereof by Standard and Poor's
Ratings Group ("S&P") or P-1 or the equivalent thereof by Moody's Investors
Service, Inc. ("Moody's") and in either case maturing within 270 days after
the day of acquisition, (e) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A
-4-
<PAGE>
by Moody's, (f) securities with maturities of one year or less from the
date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of
this definition or (g) shares of money market mutual or similar funds which
invest exclusively in assets satisfying the requirements of clauses (a)
through (f) of this definition.
"Closing Date": the date on which the conditions precedent set forth
in Section 4.1 are satisfied and the initial Loans are made.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment": as to any Lender, its obligation to make Loans to the
Borrower pursuant to Section 2.1 in an aggregate amount not to exceed the
amount set forth opposite such Lender's name on Schedule I or in an
Assignment and Acceptance, as such amount may be reduced from time to time
in accordance with the provisions of this Agreement.
"Commitment Period": the period from and including the date hereof to
but not including the Termination Date or such earlier date on which the
Commitments shall terminate as provided herein.
"Commitment Percentage": as to any Lender, the quotient, expressed as
a percentage, equal to such Lender's Commitment divided by the aggregate
Commitments.
"Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of
Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.
"Condominium": The Rockefeller Center Tower Condominium formed
pursuant to the document specified in clause (b) of the definition of
"Condominium Documents".
"Condominium Documents": the collective reference to:
(a) the Expense Sharing Agreement;
(b) the Amended and Restated Declaration, dated as of July 17,
1996, establishing a Plan for Condominium Ownership of Premises in a
Portion of the Block Bounded by Rockefeller Plaza, Avenue of the
Americas, West 49th Street and West 50th Street, New York, N.Y.,
pursuant to Article 9-B of the Real Property Law of the State of New
York, Name: The Rockefeller Center Tower Condominium, including the
By-Laws of the Condominium annexed thereto;
(c) the Operation, Maintenance and Reciprocal Easement Agreement,
dated as of July 17, 1996, among the Borrower, NBC Trust, NBC, the
-5-
<PAGE>
Condominium, RCP Associates and the New York City Industrial
Development Agency;
(d) the Declaration of Covenants and Restrictions, dated as of
July 17, 1996, between the Borrower and NBC; and
(e) the Agreement of First Offer, dated as of July 17, 1996,
between the Borrower and NBC;
as any of the foregoing may be amended, supplemented or otherwise modified
from time to time in accordance with Section 6.10.
"Condominium Regime": the condominium regime created by the Amended
and Restated Declaration dated as of July 17, 1996 for Rockefeller Center
Tower Condominium recorded in the Office of the New York City Register in
Reel 2348 at page 0853.
"Continue", "Continuation" and "Continued" shall refer to the
continuation of a Eurodollar Loan from one Interest Period to the next
Interest Period.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Convert", Conversion" and "Converted" shall refer to a conversion of
Eurodollar Loans into Base Rate Loans or of Base Rate Loans into Eurodollar
Loans, which may be accompanied by the transfer by a Lender (at its sole
discretion) of a Loan from one Applicable Lending Office to another.
"Credit Exposure": as to any Lender at any time, the sum of (a) its
unutilized Commitment, if any, and (b) the unpaid principal amount of its
Loans.
"Credit Exposure Percentage": as to any Lender at any time, a fraction
(expressed as a percentage), the numerator of which is the Credit Exposure
of such Lender at such time and the denominator of which is the aggregate
Credit Exposures of all of the Lenders at such time.
"Debt Service Coverage Ratio": for any period, the ratio of (a)
Adjusted Net Operating Income for such period to (b) the sum of (i) all
installments of principal on the Loans scheduled to be paid during such
period (determined without giving effect to any optional prepayments of the
Loans pursuant to Section 2.10 or optional reductions of the Commitments
pursuant to Section 2.5 made at any time), (ii) all interest accrued or
payable on the Loans during such period (after giving effect to any
principal payments made on account of the Loans) and (iii) the interest
accrued or payable on the 14% Debentures during such period (excluding
scheduled interest accrued on the 14% Debentures during any time prior to
such period, but including interest accrued on such
-6-
<PAGE>
unpaid interest for the period since the immediately preceding 14%
Debenture Interest Payment Date), whether or not such interest has been
paid, in accordance with the Intercreditor Agreement.
"Debt to Value Ratio": at any time, (a) the aggregate amount of all
Indebtedness of the Borrower then outstanding, divided by (b) the sum of
the Fair Market Values at such time of all of the Properties then owned by
the Borrower.
"Default": any of the events specified in Section 7, whether or not
any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Dollars" and "$": dollars in lawful currency of the United States of
America.
"Eligible Assignee": (i) a Lender; (ii) an Affiliate of a Lender;
(iii) a commercial bank organized under the laws of the United States, or
any State thereof, and having a combined capital and surplus of at least
$500,000,000; (iv) a savings and loan association or savings bank organized
under the laws of the United States, or any State thereof, and having a
combined capital and surplus of at least $500,000,000; (v) a commercial
bank organized under the laws of any other country that is a member of the
Organization For Economic Cooperation and Development or has concluded
special lending arrangements with the International Monetary Fund
associated with its General Arrangements to Borrow or a political
subdivision of any such country, and having a combined capital and surplus
of at least $500,000,000, so long as such bank is acting through a branch
or agency located in the United States; and (vi) a finance company,
insurance company or other financial institution, mutual fund or other fund
(whether a corporation, partnership, trust or other entity) that is engaged
in making, purchasing or otherwise investing in commercial loans in the
ordinary course of its business and having a combined capital and surplus
of at least $250,000,000; provided, however, that neither any Loan Party
nor any Affiliate of a Loan Party shall qualify as an Eligible Assignee
under this definition.
"Engineers Reports": collectively, (a) the report of Merritt & Harris,
Inc., dated September 2, 1995, (b) the report of Hoffmann Architects, dated
September, 1995, (c) the report of Edwards & Zuck, P.C., not dated, (d) the
report of Tornton-Tomasetti/Engineers, dated August 28, 1995, (e) the
report of Syska & Hennessy, Inc., Engineers, dated August 28, 1995, (f) the
report of Facilities Technology Consultants, Inc., dated August 25, 1995,
and (g) the report of Landmark Elevator Consultants as edited by Merritt &
Harris, Inc., dated September 2, 1995, in each case addressed to Tishman
with respect to the Properties.
"Environmental Laws": any and all Federal, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees,
requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning
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protection of human health or the environment, as now or may at any time
hereafter be in effect and applicable to the Borrower or its properties.
"Estimated Calculation": as defined in Section 5.2(h).
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities"
in Regulation D of such Board) maintained by a member bank of such System.
As of the date hereof, the Eurocurrency Reserve Requirements are zero.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, (i) the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate
Page 3750 (or any successor page) as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period for a term comparable
to such Interest Period, or (ii) if for any reason the rate described in
clause (i) of this definition is not available, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable to such
Interest Period, provided, however, that if more than one rate is specified
on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic
mean of all such rates.
"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 7; provided
that any requirement for the giving of notice, the lapse of time, or both,
or any other condition, has been satisfied.
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"Expense Sharing Agreement": the Unit Owners Agreement dated as of
July 17, 1996 between the Borrower, NBC Trust, NBC, General Electric
Company and the Condominium.
"Extension Fee": as defined in Section 2.6(g).
"Extension Term": if the Maturity Date is extended pursuant to Section
2.6, the period commencing on the Original Maturity Date and ending on the
New Maturity Date.
"Fair Market Value": with respect to any Property at any time, the
value of such Property most recently determined by an appraisal completed
by an MAI appraiser, reasonably acceptable to the Agent and, if required
under FIRREA or other applicable Requirements of Law, engaged by the Agent,
such appraisal to be completed utilizing only a Sales Comparison Approach
and Income Capitalization Approach in accordance with the appraisal
criteria specified in The Appraisal of Real Estate, Eleventh Edition,
published by the Appraisal Institute.
"Federal Funds Effective Rate": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for the day of such transactions received by
the Agent from three federal funds brokers of recognized standing selected
by it.
"Fee Letter": the letter agreement, dated as of the date hereof,
between the Borrower and NationsBank, as the same may be amended,
supplemented or otherwise modified from time to time.
"Financing Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee
"FIRREA": the Financial Institutions Reform, Recovery and Enforcement
Act of 1989, as amended.
"14% Debenture Interest Payment Date": any date on which interest is
payable pursuant to the 14% Debentures and the 14% Debentures Purchase
Agreement (disregarding the effect of the Intercreditor Agreement).
"14% Debenture Quarterly Amount": with respect to any 14% Debenture
Interest Payment Date, one-half of the amount of interest scheduled to be
paid on the 14% Debentures on such 14% Debenture Interest Payment Date
(excluding scheduled interest on the 14% Debentures unpaid from prior 14%
Debenture Interest Payment
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Dates, but including interest accrued on such unpaid interest for the
period since the immediately preceding 14% Debenture Interest Payment
Date).
"14% Debentures": the Borrower's 14% Debentures due 2007.
"14% Debentures Purchase Agreement": the Amended and Restated
Debenture Purchase Agreement, dated as of July 17, 1996, between the
Borrower and Whitehall, as amended pursuant to the First Amendment to
Amended and Restated Debenture Purchase Agreement, dated as of the date
hereof, and as further amended, supplemented or otherwise modified from
time to time as permitted hereunder.
"GAAP": generally accepted accounting principles in the United States
of America in effect from time to time.
"Governing Documents": as to any Person, its articles or certificate
of incorporation and by-laws, its partnership agreement, its certificate of
formation and operating agreement, and/or the other organizational or
governing documents of such Person.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Ground Leases": collectively, (a) that certain unrecorded Amended and
Restated Lease dated July 17, 1996 by and between RCP Associates as
landlord and Rockefeller Center Properties as tenant, and (b) that certain
Lease, dated August 23, 1949, between the Ministers, Elders and Deacons of
the Reformed Protestant Dutch Church of The City of New York, a religious
corporation organized under the Royal Charter of 1696 and existing under
the laws of the State of New York (the "Church"), as lessor, and
Massachusetts Mutual Life Insurance Company, a Massachusetts corporation
("Mass Mutual"), as lessee, recorded in the Office of the City Register for
New York County (the "Register's Office") on September 2, 1949 in Liber
4637, page 103, as modified by the Modification of Lease Agreement dated
April 26, 1950, between the Church and Mass Mutual, recorded on May 10,
1950 in the Register's Office in Liber 4673, page 106, as assigned by the
Assignment of Lease, dated May 13, 1963, between the Church and
Rock-Sinclair, Inc., a New York corporation ("Rock-Sinclair"), recorded on
May 16, 1963 in the Register's Office in Liber 5232, page 130, as modified
by the Modification of Lease dated May 15, 1963, made by and between the
Church and Rock-Sinclair, Inc., recorded May 16, 1963 in Liber 5232 cp 130,
as assigned by the Assignment of Lease, dated May 22, 1963, made by
Rock-Sinclair, as Assignor, to Rockefeller Center, Inc., as Assignee,
recorded May 23, 1963 in Liber 5233 cp 171, as modified by the Modification
of Lease, dated as of October 15, 1979, between the Church and Rockefeller
Center, Inc., recorded on March 4, 1980 in the Register's Office in Reel
516, page 92, as assigned by the Assignment and Assumption Agreement, dated
September 11, 1985, between Rockefeller Group, Inc., formerly known as
Rockefeller Center, Inc., as Assignor, and Rockefeller Center
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Properties, as Assignee, recorded September 12, 1985 in Reel 960 page 766,
as assigned by the Assignment and Assumption of Ground Lease, dated as of
July 17, 1996, made by Rockefeller Center Properties to RCPI Trust,
recorded on July 22, 1996 in the Register's Office in Reel 2347, page 605.
"GSMC": Goldman Sachs Mortgage Company, a New York limited
partnership.
"GSMC Loan": the loan, in the original principal amount of
$10,000,000, owing by the Borrower to GSMC pursuant to the GSMC Loan
Agreement and the other GSMC Loan Documents.
"GSMC Loan Agreement": the Amended and Restated Loan Agreement among
the Borrower, the lenders parties thereto and GSMC, as agent, dated as of
July 17, 1996.
"GSMC Loan Documents": the "Loan Documents" as defined in the GSMC
Loan Agreement.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to
induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "primary obligations") of any other third Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of
business. The terms "Guarantee" and "Guaranteed" used as a verb shall have
a correlative meaning. The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lower of (a) an amount equal
to the stated or determinable amount of the primary obligation in respect
of which such Guarantee Obligation is made and (b) the maximum amount for
which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the
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amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined
by the Borrower in good faith.
"Hedging Obligations": of any Person, all obligations of such Person
in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap
transaction, currency option, credit derivative transaction or any other
similar transaction (including any option with respect to any of the
foregoing transactions) or any combination of the foregoing transactions.
"Holdings": RCPI Holdings, Inc., a Delaware corporation, including,
upon the merger of RCPI with and into RCPI Holdings, Inc., a Delaware
corporation, the surviving corporation of such merger.
"Indebtedness": of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money (whether by loan or the
issuance and sale of debt securities) or for the deferred purchase price of
property or services, (b) any other indebtedness of such Person which is
evidenced by a note, bond, debenture or similar instrument, (c) all
obligations of such Person under Financing Leases, (d) all obligations of
such Person in respect of letters of credit, acceptances or similar
instruments issued or created for the account of such Person and (e) all
liabilities secured by any Lien on any property owned by such Person even
though such Person has not assumed or otherwise become liable for the
payment thereof, provided, however, that Indebtedness shall not include (i)
the obligations of the Borrower under any lease to provide tenant
improvements or tenant allowances, or (ii) except for purposes of Section
6.1, current trade liabilities permitted under Section 6.1(g) hereof.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intercreditor Agreement": the Intercreditor and Subordination
Agreement to be executed and delivered by the Agent, on behalf of the
Lenders, the holder(s) of the 14% Debentures, Whitehall and the Borrower,
in form as agreed among the Borrower, Whitehall, the holder(s) of the 14%
Debentures and the Agent, as the same may be amended, supplemented or
otherwise modified from time to time.
"Interest Payment Date": (a) as to any Base Rate Loan, the last day of
each calendar month, and (b) as to any Eurodollar Loan, the last day of
each Interest Period therefor.
"Interest Period": with respect to any Eurodollar Loan:
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(i) initially, the period commencing on the Borrowing Date or
Conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower in its notice of borrowing or notice of Conversion, as
the case may be, given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three or six months thereafter, as selected by the
Borrower by irrevocable notice to the Agent not less than three
Business Days prior to the last day of the then current Interest
Period with respect thereto;
provided that,
(1) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be
to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding
Business Day;
(2) any Interest Period that would otherwise extend beyond the
Maturity Date shall end on the Maturity Date; and
(3) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of a calendar month.
"Investors": collectively, WHRC II Real Estate Limited Partnership, a
Delaware limited partnership; Prometheus Investors, L.L.C., a Delaware
limited liability company; Derrycroft Enterprises, Inc., a Delaware
corporation; FIMA Finance Management Inc., a British Virgin Islands
corporation; Rockprop, L.L.C., a Delaware limited liability company;
Troutlet Investments Corporation, a British Virgin Islands corporation;
Gribble Investment (Tortola) BVI, Inc., a British Virgin Islands
corporation; Weevil Investment (Tortola) BVI, Inc., a British Virgin
Islands corporation; and Coreopsis Corporation, a Delaware corporation.
"Key Principals": collectively, Whitehall Street Real Estate Limited
Partnership V, a Delaware limited partnership, David Rockefeller, EXOR
Group S.A., a Luxembourg investment holding company, Tishman Speyer Crown
Equities, a Delaware general partnership and Bonito Investments, LDC, a
Bahamas limited duration company.
"Leases": collectively, the Space Leases and the Retail Leases.
"Lenders": as defined in the caption to this Agreement.
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"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, violation, encumbrance, lien (statutory, choate, inchoate or
other), charge or other security interest or any preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other
title retention agreement and any Financing Lease having substantially the
same economic effect as any of the foregoing), and the filing of any
financing statement under the Uniform Commercial Code or comparable law of
any jurisdiction in respect of any of the foregoing.
"Limited Recourse Agreement": the Limited Recourse Agreement to be
executed and delivered by each Key Principal, in form as agreed between the
Borrower, the Agent and each Key Principal, as the same may be amended,
supplemented or otherwise modified from time to time.
"LLC": RCPI Investors LLC, a Delaware limited liability company.
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Documents": this Agreement, the Notes, the Intercreditor
Agreement and the Limited Recourse Agreement.
"Loan Parties": collectively, the Borrower, Whitehall and each Key
Principal.
"Majority Lenders": at any time, Lenders the Credit Exposure
Percentages of which aggregate more than 50%.
"Major Retail Lease": any Retail Lease, or Retail Leases to an
affiliated group of tenants, providing for the lease of space in an
aggregate amount of 10,000 square feet or more.
"Major Space Lease": any Space Lease, or Space Leases to an affiliated
group of tenants, providing for the lease of space in an aggregate amount
of 100,000 square feet or more.
"Material Adverse Effect": a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole or (b) the
validity or enforceability of this or any of the other Loan Documents or
the rights or remedies of the Agent or the Lenders hereunder or thereunder.
"Material Environmental Amount": an amount payable by the Borrower
and/or its Subsidiaries in excess of $5,000,000 for remedial costs,
compliance costs, compensatory damages, punitive damages, fines, penalties
or any combination thereof.
"Material Service Contracts": as defined in Section 3.8(d).
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"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation other
than in de minimus quantities which are maintained in compliance with
applicable law.
"Maturity Date": May 16, 2000, as such date may be extended pursuant
to Section 2.6.
"Merger Agreement": the Agreement and Plan of Merger, dated as of
November 7, 1995, as amended, among RCPI, Holdings, RCPI Merger and certain
investors party thereto.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"NationsBank": NationsBank, N.A., a national banking association.
"NBC": National Broadcasting Company, Inc.
"NBC Trust": NBC Trust No. 1996A, a Delaware business trust.
"Net Cash Flow after Debt Service": for any period, Net Operating
Income for such period, minus (a) all expenditures during such period made
by the Borrower in respect of tenant improvements, leasing commissions,
capital expenditures and replacement reserves, and (b) all interest and
principal payments (including Accelerated Amortization Payments) made on
the Loans, and all interest actually paid on the 14% Debentures (other than
payments of interest on the 14% Debentures made with the proceeds of cash
contributions to the common equity of the Borrower by the Investors made
contemporaneously with such interest payments), during such period.
"Net Operating Income": for any period, all cash revenues earned by
the Borrower from the Properties for such period, including all base,
storage and percentage rents, all escalation charges, all miscellaneous
tenant charges, proceeds from rental interruption insurance, and tax,
insurance and any other tenant reimbursements (but specifically excluding
proceeds from dispositions of assets and any net payments received by the
Borrower with respect to Hedging Obligations permitted under Section 6.1(c)
and (f)) less any and all costs and expenses of a non-capital nature,
including but not limited to operating, maintenance, taxes, rents,
management fees paid to the Property Manager, administrative, promotional,
marketing, legal and accounting costs and expenses, incurred on a cash
basis in connection with the Properties, but specifically excluding debt
service and any net payments made by the Borrower with respect to Hedging
Obligations permitted under Section 6.1 (e) and (f).
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"Net Proceeds": (i) the aggregate cash consideration received by the
Borrower or a Subsidiary in connection with any Release or any transaction
referred to in Section 2.11(b) less (ii) the actual expenses (including
out-of-pocket expenses) incurred by the Borrower or such Subsidiary in
connection with such transaction (including, in the case of any issuance of
debt or equity securities, underwriters' commissions and fees) and the
amount of any federal and state taxes incurred in connection with such
transaction, in each case as certified by a Responsible Officer to the
Agent at the time of such transaction.
"New Maturity Date": as defined in Section 2.6.
"Non-Excluded Taxes": as defined in Section 2.17.
"Note": as defined in Section 2.2.
"Obligations": the unpaid principal amount of, and interest
(including, without limitation, interest accruing after the maturity of the
Loans and interest accruing after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) on the Loans, and all
other obligations and liabilities of the Borrower to the Agent and the
Lenders, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under,
or out of or in connection with this Agreement, the Notes and any other
Loan Documents and any other document made, delivered or given in
connection therewith or herewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees and disbursements of counsel to
the Agent or to the Lenders that are required to be paid by the Borrower
pursuant to the terms of the Loan Documents) or otherwise.
"Original Maturity Date": as defined in Section 2.6.
"Participant": as defined in Section 9.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"Permitted Encumbrances": as defined in Section 3.8(a).
"Permitted Major Retail Lease": any Major Retail Lease which has been
(or a substantially final draft of which has been) submitted to the Agent,
together with a written summary of the economic terms thereof, and which
the Agent has not disapproved of in writing within ten days of such
submission to the Agent.
"Permitted Major Space Lease": any Major Space Lease which has been
(or a substantially final draft of which has been) submitted to the Agent,
together with a
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written summary of the economic terms thereof, and which the Agent has not
disapproved of in writing within ten days of such submission to the Agent.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.
"Plan": at a particular time, any Multiemployer Plan or Single
Employer Plan, and any other employee benefit plan within the meaning of
Section 3(3) of ERISA, which is maintained for employees of the Borrower or
a Commonly Controlled Entity.
"Property": any parcel of real property listed on Schedule 1.1(a) (and
any portion thereof to the extent set forth in the third proviso of the
definition of "Allocated Loan Amount"), excluding any such parcel (or
portion thereof) that is sold after the Closing Date in accordance with
Section 6.5.
"Property Management Agreement": as defined in Section 5.10.
"Property Manager": Tishman, in its capacity as property manager under
the Property Management Agreement, or any successor property manager
permitted under the terms of this Agreement.
"RCPI": Rockefeller Center Properties, Inc., a Delaware corporation.
"RCPI Merger": RCPI Merger, Inc., a Delaware corporation.
"Recourse Party": as defined in the Limited Recourse Agreement.
"Register": as defined in Section 9.6(d).
"Regulation U": Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"Release": any sale, lease (excluding any tenant lease which is not in
economic substance a financing or disposition transaction), assignment,
exchange, transfer or other disposition of any Property or any interest in
any Property. Each of the terms "Release", "Releasing" and "Released", used
as a verb or adjective, as applicable, shall have a correlative meaning.
"Release Price": with respect to any Property (or portion thereof),
125% of the Allocated Loan Amount of such Property (or portion thereof),
but in no event greater than the aggregate outstanding principal balance of
the Loans.
"Rent Roll": the rent roll prepared by the Property Manager dated May
14, 1997 showing in tabular form the base and additional rent under all
Leases for the month prior to the Closing Date.
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"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under Sections .13, .14, .16, .18, .19 or .20 of PBGC Reg. Sec.
4043.
"Required Lenders": at any time, Lenders the Credit Exposure
Percentages of which aggregate greater than 50%.
"Requirement of Law": as to any Person, the certificate of
incorporation and by-laws or other organizational documents or Governing
Documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority,
in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
"Responsible Officer": the president or any vice president of the
Borrower.
"Restricted Payments": as defined in Section 6.6.
"Retail Lease": any lease, sublease (under which the Borrower or any
Affiliate or Subsidiary of the Borrower is sublandlord), master lease,
concession or license of retail space at any Property now existing or
entered into by the Borrower after the date hereof in accordance with the
terms of this Agreement.
"RGT Telecommunications Agreement": the letter agreement, dated July
17, 1996, between Rockefeller Group Telecommunications Services, Inc. and
the Borrower, and the letter agreement, dated July 17, 1996, between
Rockefeller Group, Inc. and the Borrower, in each case as amended,
supplemented or otherwise modified.
"Scheduled Leases": as defined in Section 4.1(b).
"Scheduled Payment Amount": as defined in Schedule 2.2.
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Space Lease": any lease, sublease (under which the Borrower or any
Affiliate or Subsidiary of the Borrower is sublandlord), master lease,
concession or license of space (other than retail space) at any Property
now existing or entered into by the Borrower after the date hereof in
accordance with the terms of this Agreement.
"Stabilized Capital Expenditures Amount": for any Test Period, an
amount equal to (a) $20,500,000 minus (b) the product of (i) $20,500,000
and (ii) the sum of the percentages set forth on Schedule 1.1(b) for all
Properties and portions of Properties which have been Released prior to the
beginning of such Test Period, plus with respect to any Property or portion
of a Property which have been released during
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such Test Period, the sum of the percentages set forth on Schedule 1.1(b)
for each such Property or portion of a Property after such percentage has
been multiplied by a fraction, the numerator of which is the number of days
in such Test Period following the Release of such Property or portion of a
Property and the denominator of which is the number of days in such Test
Period.
"Subsidiary": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through
one or more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.
"Tax Status Certificate": as defined in Section 2.17(b)(i)(B).
"Tenant Improvement Obligations": all obligations of Borrower under
Leases existing as of the Closing Date, in an aggregate amount in excess of
$1,000,000 over four years following the Closing Date for any one tenant.
"Termination Date": June 30, 1998.
"Test Period": any period of four consecutive fiscal quarters of the
Borrower ended during 1998 or any subsequent year.
"Tishman": Tishman-Speyer Properties, L.P., a New York limited
partnership.
"Tranche": the collective reference to Eurodollar Loans the then
current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).
"Transferee": as defined in Section 9.6(f).
"Type": as to any Loan, its nature as a Base Rate Loan or a Eurodollar
Loan.
"Whitehall": WHRC Real Estate Limited Partnership, a Delaware limited
partnership.
"Zeros": the Borrower's Zero Coupon Convertible Debentures due 2000.
"Zeros Indenture": the Indenture, dated as of September 15, 1985, made
by the Borrower (as successor to RCPI) to The Chase Manhattan Bank (as
successor to Manufacturers Hanover Trust Company), as modified by the First
Supplemental Indenture thereto, dated as of December 15, 1985, and the
Second Supplemental Indenture thereto, dated as of July 10, 1996, and as
otherwise modified prior to the date
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hereof, and as the same may be further amended, supplemented or otherwise
modified as provided in Section 6.9 hereof.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any Notes or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in any Notes, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to the
Borrower and its Subsidiaries not defined in Section 1.1 and accounting terms
partly defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments. Subject to the terms and conditions hereof, each
Lender severally agrees to make one or more term loans (each, a "Loan") to the
Borrower from time to time during the Commitment Period in an aggregate
principal amount not to exceed the amount of the Commitment of such Lender then
in effect; provided, that the Commitments shall terminate at 3:00 p.m., Dallas,
Texas time, on May 19, 1997, if the initial Loans have not been made prior to
that time; and provided, further , that the Borrower shall not request Loans
more frequently than once per calendar month; and provided, further, that after
giving effect to the making of any Loans on any Borrowing Date occurring on or
after any date set forth in the table on Schedule 2.2, the aggregate outstanding
principal amount of Loans may in no event exceed the amount set forth on such
table opposite such date as the "Maximum Allowable Loan Balance". The Loans may
from time to time be (a) Eurodollar Loans, (b) Base Rate Loans or (c) a
combination thereof, as determined by the Borrower and notified to the Agent in
accordance with Sections 2.3 and 4.2. Amounts repaid on account of the Loans may
not be reborrowed.
2.2 Notes. The Loans of each Lender shall be evidenced by a promissory
note of the Borrower, substantially in the form of Exhibit A with appropriate
insertions as to payee, date and principal amount (a "Note"), payable to the
order of such Lender and representing the obligation of the Borrower to pay a
principal amount equal to the lesser of (a) the amount of the Commitment of such
Lender and (b) the aggregate unpaid principal amount of all Loans made by such
Lender. Each Lender is hereby authorized to record the date, Type and amount of
its Loans and the date and amount of each payment or prepayment of principal
thereof on the schedule annexed to and constituting a part of its Note, and any
such
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recordation shall constitute prima facie evidence of the accuracy of the
information so recorded absent manifest error; provided, that the failure of
such Lender to make any such recordation shall not impair or otherwise affect
the validity or enforceability of its Note. Each Note shall (a) be dated the
Closing Date, (b) be stated to mature in installments in amounts equal to such
Lender's Commitment Percentage of the amounts, and payable on the dates, set
forth, or determined as set forth, on Schedule 2.2, and (c) bear interest for
the period from the date thereof on the unpaid principal amount thereof at the
applicable interest rates per annum specified in Section 2.7. Interest on the
Notes shall be payable on the dates specified in Section 2.7(d).
2.3 Procedure for Borrowing. The Borrower may borrow under the
Commitments during the Commitment Period on any Business Day in an aggregate
principal amount not exceeding the aggregate Available Commitments then in
effect, provided that the Borrower shall give the Agent irrevocable notice
(which notice must be received by the Agent prior to 10:00 a.m., Dallas, Texas
time, (a) three Business Days prior to the requested Borrowing Date, if all or
any part of the Loans are to be initially Eurodollar Loans or (b) one Business
Day prior to the requested Borrowing Date, otherwise) requesting that the
Lenders make the Loans on such requested Borrowing Date and specifying (i) the
amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether the
borrowing is to be of Eurodollar Loans or Base Rate Loans or a combination
thereof, (iv) if the Loans are to be entirely or partly Eurodollar Loans, the
amounts of such Type of Loan and the lengths of the initial Interest Periods
therefor, and (v) the certificate required pursuant to Section 4.2(c). Each
borrowing under the Commitments shall be in an amount equal to at least
$1,000,000, provided that the initial borrowing under the Commitments shall be
in an amount not less than $55,000,000. Upon receipt of such notice the Agent
shall promptly notify each Lender thereof. Each Lender will make the amount of
its pro rata share of each borrowing available to the Agent for the account of
the Borrower at the office of the Agent specified in Section 9.2 prior to 11:00
a.m., Dallas, Texas time, on the Borrowing Date requested by the Borrower in
funds immediately available to the Agent. Such borrowing will then be made
available to the Borrower by the Agent by wire transfer to an account designated
by the Borrower in writing with the aggregate of the amounts made available to
the Agent by the Lenders and in like funds as received by the Agent.
2.4 Unused Commitment Fee. The Borrower agrees to pay to the Agent for
the account of each Lender an unused commitment fee for the period from and
including the first day of the Commitment Period to the earlier of the
Termination Date and the first day on which the aggregate principal amount of
all Loans borrowed from and after the Closing Date exceeds 75% of the aggregate
Commitments as in effect on the Closing Date, computed at the rate of 0.25% per
annum on the average daily amount of the Available Commitment of such Lender
during the period for which payment is made, payable quarterly in arrears on the
last day of each March, June, September and December and on the Termination Date
or such earlier date as the Commitments shall terminate as provided herein,
commencing June 30, 1997.
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2.5 Termination or Reduction of Commitments. The Borrower shall have
the right at any time during the Commitment Period, upon not less than five
Business Days' notice to the Agent, to terminate the Commitments or, from time
to time, to reduce the amount of the Commitments. Any such reduction shall be in
an amount equal to $1,000,000 or a whole multiple thereof and shall reduce
permanently the Commitments then in effect.
2.6 Extension of Maturity Date. The Borrower may, at its option and
subject to the satisfaction of the conditions precedent set forth in the next
succeeding sentence, on a single occasion request that the Maturity Date as in
effect on the date of this Agreement (the "Original Maturity Date") be extended
to December 31, 2000 (such new date, the "New Maturity Date"). The effectiveness
of the extension of the Original Maturity Date to the New Maturity Date shall be
subject to the satisfaction of the following conditions precedent on and as of
the Original Maturity Date:
(a) the Borrower shall have provided written notice to the Agent, at
least 30 days but no more than 90 days prior to the Original Maturity Date,
that it has elected to extend the Original Maturity Date to the New
Maturity Date, which notice shall contain a certification from a
Responsible Officer of the Borrower that as of the date of such notice the
Borrower shall be able to satisfy each of the other conditions precedent to
the extension of the Maturity Date set forth in this Section 2.6 and shall
include computations, in reasonable detail, supporting the assertion that
the Borrower shall be able to satisfy the conditions set forth in clauses
(d) and (e) of this Section 2.6;
(b) the Borrower shall not have received written notice from the Agent
of any Default;
(c) no Event of Default shall have occurred and be continuing;
(d) the Debt to Value Ratio (based upon the appraisal delivered
pursuant to Section 5.2(g)) shall not exceed 72.5%;
(e) the Debt Service Coverage Ratio for the Test Period ended December
31, 1999 shall not be less than 1.55 to 1;
(f) the Borrower shall have obtained an interest rate swap, cap,
collar or other interest rate hedge with respect to at least 50% of the
then outstanding principal amount of the Loans, fixing the Eurodollar Rate
for the Extension Term at not more than 3% above the Eurodollar Rate as in
effect on the Original Maturity Date; and
(g) the Borrower shall have paid an extension fee (the "Extension
Fee"), in an amount equal to 0.25% of the aggregate principal amount of the
Loans then outstanding, to the Agent for the ratable benefit of the
Lenders.
From and after the effectiveness of any such extension as provided in this
Section 2.6, the New Maturity Date shall constitute the Maturity Date for all
purposes of the Loan Documents.
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2.7 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period (excluding the last day
of each Interest Period) with respect thereto at a rate per annum equal to the
Eurodollar Rate determined for such day plus the Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per annum equal
to the Base Rate plus the Applicable Margin.
(c) If any Event of Default shall have occurred and be continuing, the
principal of the Loans and any interest, commitment fee or other amount shall
bear interest during the period such Event of Default continues at a rate per
annum which is the higher of (A) (x) in the case of principal, the rate that
would otherwise be applicable thereto pursuant to the foregoing provisions of
this Section plus 2% or (y) in the case of any such overdue interest, commitment
fee or other amount, the rate described in paragraph (b) of this Section plus
2%, and (B) the rate at which interest accrues on overdue amounts payable under
the Zeros in each case from the date of such non-payment until such overdue
principal, interest, commitment fee or other amount is paid in full (as well
after as before judgment), but in no event in excess of the maximum amount
permitted by applicable law.
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this Section
shall be payable from time to time on demand.
2.8 Conversion and Continuation Options. (a) The Borrower may elect
from time to time to Convert Eurodollar Loans to Base Rate Loans, by giving the
Agent at least two Business Days' prior irrevocable notice of such election,
provided that any such Conversion of Eurodollar Loans may only be made on the
last day of an Interest Period with respect thereto. The Borrower may elect from
time to time to Convert Base Rate Loans to Eurodollar Loans by giving the Agent
at least three Business Days' prior irrevocable notice of such election. Any
such notice of Conversion to Eurodollar Loans shall specify the length of the
initial Interest Period or Interest Periods therefor. Upon receipt of any such
notice the Agent shall promptly notify each Lender thereof. All or any part of
outstanding Eurodollar Loans and Base Rate Loans may be Converted as provided
herein, provided that (i) no Loan may be Converted into a Eurodollar Loan when
any Event of Default has occurred and is continuing and the Agent has determined
or the Required Lenders have notified the Agent of their determination that such
a Conversion is not appropriate, (ii) any such Conversion may only be made if,
after giving effect thereto, Section 2.9 shall not have been contravened, and
(iii) no Loan may be converted into a Eurodollar Loan after the date that is one
month prior to the Maturity Date.
(b) Any Eurodollar Loans may be Continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
notice to the Agent, in accordance with the applicable provisions of the term
"Interest Period" set forth in Section 1.1, of the length of the next Interest
Period to be applicable to such Loans, provided that no Eurodollar Loan may be
Continued as such (i) when any Event of Default has occurred and is continuing
and the Agent has determined or the Required Lenders have notified the
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Agent of their determination that such a Continuation is not appropriate, (ii)
if, after giving effect thereto, Section 2.9 would be contravened or (iii) after
the date that is one month prior to the Maturity Date and provided, further,
that if the Borrower shall fail to give such notice or if such Continuation is
not permitted such Loans shall be automatically converted to Base Rate Loans on
the last day of such then expiring Interest Period.
2.9 Minimum Amounts and Maximum Number of Tranches. All borrowings,
Conversions and Continuations of Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of the Loans comprising each Tranche shall be equal to $1,000,000 or a whole
multiple of $250,000 in excess thereof. In no event shall there be more than
four Tranches outstanding at any time.
2.10 Optional Prepayments. The Borrower may at any time and from time
to time, prepay the Loans, in whole or in part, without premium or penalty, upon
at least four Business Days' irrevocable notice to the Agent, specifying the
date and amount of prepayment and whether the prepayment is of Eurodollar Loans,
Base Rate Loans or a combination thereof, and, if of a combination thereof, the
amount allocable to each. Upon receipt of any such notice the Agent shall
promptly notify each Lender thereof. If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified therein,
together with any amounts payable pursuant to Section 2.18 and accrued interest
to such date on the amount prepaid. Partial prepayments of the Loans pursuant to
this Section shall be applied to the installments of principal thereof in the
direct order of their scheduled maturities. Amounts prepaid on account of the
Loans may not be reborrowed. Partial prepayments pursuant to this Section shall
be in an aggregate principal amount of $100,000 or a whole multiple thereof.
2.11 Mandatory Prepayments.
(a) (i) Upon the date of any Release of any Property (or portion
thereof) other than the Air Rights, the Borrower shall prepay the Loans in an
amount equal to (x) if such Release is made pursuant to Section 6.5(a)(i), the
Release Price of such Property (or portion thereof), and (y) if such Release is
made pursuant to Section 6.5(a)(ii), the portion of the Net Proceeds of the sale
of such Property (or portion thereof) specified in Section 6.5(a)(ii); and (ii)
upon the sale or other disposition of the Air Rights, the Borrower shall prepay
the Loans in an amount equal to 10% of the Net Proceeds of such sale.
(b) To the extent required to be applied to the prepayment of the
Loans pursuant to Section 5.6, unless the Required Lenders otherwise agree, the
Borrower shall prepay the Loans in an amount equal 100% (or such smaller portion
as required pursuant to Section 5.6) of the Net Proceeds of any destruction,
casualty or taking of any property of the Borrower or any Subsidiary (including
any insurance proceeds), in any such case no later than three Business Days
following receipt by the Borrower or such Subsidiary of such proceeds, together
with accrued interest to such date on the amount prepaid.
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(c) Prepayments of Loans pursuant to Section 2.11(a) and (b) shall be
applied pro rata to the installments of the Loans and such amounts so prepaid
may not be reborrowed. Prepayments of Loans pursuant to this Section 2.11 (other
than Section 2.11(a) and (b)) shall be applied to the installments of the Loans
in the inverse order of maturity and such amounts so prepaid may not be
reborrowed.
(d) Nothing in Section 2.11(a) shall be construed to derogate any
restriction or limitation contained in any Loan Document imposed on any
transaction of the types described in Section 2.11(a), including without
limitation the restrictions and limitations set forth in Sections 6.1, 6.4 and
6.5 hereof.
(e) If, on the last day of any fiscal quarter of the Borrower
(commencing with first quarter of 1998), the Debt Service Coverage Ratio for the
Test Period ended on such day was less than 1.40 to 1, the Borrower shall prepay
the Loans in an amount equal to the 14% Debenture Quarterly Amount for the 14%
Debenture Interest Payment Date next occurring after the last day of such
quarter (any such prepayment pursuant to this Section 2.11(e), an "Accelerated
Amortization Payment").
Such calculations of Debt Service Coverage Ratio for any such Test Period shall
be made on the date the Estimated Calculation for such Test Period is required
to be delivered to the Agent pursuant to Section 5.2(h), and the Borrower shall
make any such prepayment required by this Section 2.11(e) based upon such
Estimated Calculation. If, on the date that the financial statements for the
fiscal quarter ended on the last day of such Test Period are delivered to the
Agent pursuant to Section 5.1(a) or (b), the amounts calculated for Debt Service
Coverage Ratio for such Test Period based upon such financial statements would
have resulted in a determination that a prepayment is or is not required under
Section 2.11(e) that is different from the determination resulting from the
Estimated Calculation, on the date of delivery of such financial statements the
Borrower shall make such prepayment, or the Lenders shall as soon as reasonably
practicable after such delivery of such financial statements return to the
Borrower the prepayment made pursuant to such Estimated Calculation, as the case
may be, so that the prepayment made by the Borrower for such Test Period is the
prepayment required under this Section 2.11(e) based upon the calculation of
Debt Service Coverage Ratio for such Test Period determined with reference to
such financial statements delivered pursuant to Section 5.1(a) or (b).
2.12 Computation of Interest and Fees. (a) Commitment fees and
interest shall be calculated on the basis of a 360-day year for the actual days
elapsed. The Agent shall as soon as practicable notify the Borrower and the
Lenders of each determination of a Eurodollar Rate. Any change in the interest
rate on a Loan resulting from a change in the Base Rate or the Eurocurrency
Reserve Requirements shall become effective as of the opening of business on the
day on which such change becomes effective. The Agent shall as soon as
practicable notify the Borrower and the Lenders of the effective date and the
amount of each such change in interest rate.
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(b) Each determination of an interest rate by the Agent pursuant to
any provision of this Agreement shall be conclusive and binding on the Borrower
and the Lenders in the absence of manifest error. The Agent shall, at the
request of the Borrower, deliver to the Borrower a statement showing the
quotations used by the Agent in determining any interest rate pursuant to
Section 2.7(a).
2.13 Inability to Determine Interest Rate. If prior to the first day
of any Interest Period for a Eurodollar Loan:
(a) the Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist
for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Agent shall have received notice from the Majority Lenders
that the Eurodollar Rate determined or to be determined for such Interest
Period will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Agent shall give telecopy or telephonic notice thereof to the Borrower and
the Lenders as soon as practicable thereafter. If such notice is given (x) any
Eurodollar Loans requested to be made on the first day of such Interest Period
shall be made as Base Rate Loans, and (y) any outstanding Eurodollar Loans shall
be Converted, on the first day of such Interest Period, to Base Rate Loans.
Until such notice has been withdrawn by the Agent, no further Eurodollar Loans
shall be made or Continued as such.
2.14 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee hereunder and any reduction of the Commitments of the Lenders
shall be made pro rata according to the respective Commitment Percentages, as
applicable, of the Lenders. Each payment (including each prepayment) by the
Borrower on account of principal of and interest on the Loans shall be made pro
rata according to the respective outstanding principal amounts of the Loans then
held by the Lenders. All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without set-off or counterclaim and shall be made prior
to 12:00 noon, Dallas, Texas time, on the due date thereof to the Agent, for the
account of the Lenders, at the Agent's office specified in Section 9.2, in
Dollars and in immediately available funds. The Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder (other than payments on Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension. If any payment on a Eurodollar Loan becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day unless the
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result of such extension would be to extend such payment into another calendar
month in which event such payment shall be made on the immediately preceding
Business Day.
(b) Unless the Agent shall have been notified in writing by any Lender
prior to a borrowing that such Lender will not make the amount that would
constitute its Commitment Percentage of such borrowing available to the Agent,
the Agent may assume that such Lender is making such amount available to the
Agent, and the Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to the
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Agent, on demand, such amount with interest thereon at a rate equal to
the daily average Federal Funds Effective Rate for the period until such Lender
makes such amount immediately available to the Agent. A certificate of the Agent
submitted to any Lender with respect to any amounts owing under this Section
shall be conclusive in the absence of manifest error. If such Lender's
Commitment Percentage of such borrowing is not made available to the Agent by
such Lender within three Business Days of such Borrowing Date, the Agent shall
also be entitled to recover, without duplication of interest paid by such Lender
pursuant to the second preceding sentence, such amount with interest thereon at
the rate per annum applicable to Base Rate Loans hereunder, on demand, from the
Borrower.
2.15 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans and Continue Eurodollar Loans as such
shall forthwith be canceled and (b) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be Converted automatically to Base Rate Loans on
the respective last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If any such
Conversion of a Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrower shall pay to
such Lender such amounts, if any, as may be required pursuant to Section 2.18.
2.16 Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority, in any such case,
made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement, any Note or any Eurodollar Loan made by it, or
change the basis of taxation of payments to such Lender in respect thereof
(except for Non-Excluded Taxes covered by Section 2.17 and changes in the
rate of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or
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any other acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate hereunder;
or
(iii) shall impose on any Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, Continuing or
maintaining Eurodollar Loans or to reduce any amount receivable hereunder in
respect thereof, then, in any such case, the Borrower shall promptly pay such
Lender, upon its written demand, such additional amount or amounts as will
compensate such Lender for such increased cost or the amount by which such
amount received is reduced.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority, in any such case, made subsequent to the date hereof shall have the
effect of reducing the rate of return on such Lender's or such corporation's
capital as a consequence of its obligations hereunder to a level below that
which such Lender or such corporation could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, the Borrower shall, subject
to paragraph (c) below and Section 2.20, promptly pay to such Lender such
additional amount or amounts as will compensate such Lender for such reduction.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this Section, it shall promptly notify the Borrower (with a copy to
the Agent) of the event by reason of which it has become so entitled. A
certificate as to any additional amounts payable pursuant to this Section
submitted by such Lender to the Borrower (with a copy to the Agent) shall be
conclusive in the absence of manifest error. The agreements in this Section
shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.
(d) Any amount payable by the Borrower on account of this Section 2.16
shall not be duplicative of any amounts payable under Sections 2.17 or 2.18 or
included in the calculation of Eurodollar Rate.
2.17 Taxes. (a) All payments made by the Borrower under this Agreement
and any Notes shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Agent or any Lender as a result of a
present or former connection between the Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from the Agent or such
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Lender having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any Note). If any such
non-excluded taxes, levies, imposts, duties, charges, fees deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Agent or any Lender hereunder or under any Note, the amounts so
payable to the Agent or such Lender shall be increased to the extent necessary
to yield to the Agent or such Lender (after payment of all Non-Excluded Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement, provided, however, that the Borrower shall
not be required to increase any such amounts payable to any Lender that is not
organized under the laws of the United States of America or a state thereof if
such Lender fails to comply with the requirements of clause (b) of this Section.
Whenever any Non-Excluded Taxes are payable by the Borrower, as promptly as
possible thereafter the Borrower shall send to the Agent for its own account or
for the account of such Lender, as the case may be, a certified copy of an
original official receipt received by the Borrower showing payment thereof. If
the Borrower fails to pay any Non-Excluded Taxes when due to the appropriate
taxing authority or fails to remit to the Agent the required receipts or other
required documentary evidence, the Borrower shall indemnify the Agent and the
Lenders for any incremental taxes, interest or penalties that may become payable
by the Agent or any Lender as a result of any such failure. The agreements in
this Section shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(i) (A) if such Lender is a "bank" within the meaning of Section
881(c)(3)(A) of the Code, deliver to the Borrower and the Agent (x) two
duly completed copies of United States Internal Revenue Service Form 1001
or 4224, or successor applicable form, as the case may be, and (y) an
Internal Revenue Service Form W-8 or W-9, or successor applicable form, as
the case may be, or (B) if such Lender is not a "bank" within the meaning
of Section 881(c)(3)(A) of the Code and cannot deliver either Internal
Revenue Service Form 1001 or 4224, deliver (x) a certificate substantially
in the form of Exhibit B (a "Tax Status Certificate") and (y) two completed
and signed copies of Internal Revenue Service Form W-8 or successor
applicable form;
(ii) deliver to the Borrower and the Agent two further copies of any
such form or certification on or before the date that any such form or
certification expires or becomes obsolete and after the occurrence of any
event requiring a change in the most recent form previously delivered by it
to the Borrower; and
(iii) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the Borrower or
the Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from
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duly completing and delivering any such form with respect to it and such Lender
so advises the Borrower and the Agent. Such Lender shall certify (i) in the case
of a Form 1001 or 4224, that it is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes, (ii) in the case of a Tax Status Certificate, that it is not a "bank" as
such term is defined in Section 881(c)(3)(A) of the Code, and (iii) in the case
of a Form W-8 or W-9, that it is entitled to an exemption from United States
backup withholding tax. Each Person that shall become a Lender or a Participant
pursuant to Section 9.6 shall, upon the effectiveness of the related transfer,
be required to provide all of the forms and statements required pursuant to this
Section, provided that in the case of a Participant such Participant shall
furnish all such required forms and statements to the Lender from which the
related participation shall have been purchased.
(c) Any amount payable by the Borrower on account of this Section 2.17
shall not be duplicative of any amounts payable under Sections 2.16 or 2.18 or
included in the calculation of Eurodollar Rate.
2.18 Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of or Continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (b)
default by the Borrower in making any prepayment after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (c) the
making of a prepayment or Conversion of Eurodollar Loans on a day which is not
the last day of an Interest Period with respect thereto. Such indemnification
may include an amount equal to the excess, if any, of (i) the amount of interest
which would have accrued on the amount so prepaid or Converted, or not so
borrowed or Continued, for the period from the date of such prepayment or
Conversion or of such failure to borrow or Continue to the last day of such
Interest Period (or, in the case of a failure to borrow or Continue, the
Interest Period that would have commenced on the date of such failure) in each
case at the applicable rate of interest for such Loans provided for herein
(excluding, however, the Applicable Margin included therein, if any) over (ii)
the amount of interest (as reasonably determined by such Lender) which would
have accrued to such Bank on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank eurodollar market. Any
amount payable by the Borrower on account of this Section 2.18 shall not be
duplicative of any amounts payable under Sections 2.16 or 2.17 or included in
the calculation of Eurodollar Rate. This covenant shall survive the termination
of this Agreement and the payment of the Loans and all other amounts payable
hereunder.
2.19 Lending Offices; Change of Lending Office. (a) Loans of each Type
made by any Lender shall be made and maintained at such Lender's Applicable
Lending Office for Loans of such Type.
(b) Each Lender agrees that if it makes any demand for payment under
Section 2.16 or 2.17(a), or if any adoption or change of the type described in
Section 2.15 shall occur with respect to it, it will use reasonable efforts
(consistent with its internal policy
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and legal and regulatory restrictions and so long as such efforts would not be
disadvantageous to it, as determined in its sole discretion) to designate a
different lending office if the making of such a designation would reduce or
obviate the need for the Borrower to make payments under Section 2.16 or
2.17(a), or would eliminate or reduce the effect of any adoption or change
described in Section 2.15.
2.20 Certificates, Etc. (a) If requested by the Borrower, in
connection with any demand for payment pursuant to Sections 2.16, 2.17 or 2.18,
a Lender shall provide to the Borrower, with a copy to the Agent, a certificate
setting forth in reasonable detail the basis for such demand and the
satisfaction of the conditions set forth in the next succeeding sentence.
(b) Anything to the contrary herein notwithstanding, no Lender shall
have the right to demand any payment or compensation under Section 2.16 or 2.17
(i) with respect to any period more than nine months prior to the date it has
made a demand pursuant to such Sections, and (ii) to the extent that such Lender
determines in good faith that the interest rate or margin on the relevant Loans
appropriately accounts for the increased cost or reduced rate of return which is
the subject of such demand.
2.21 Replacement of Lenders. If no Default or Event of Default shall
have occurred and be continuing, the Borrower may replace any Lender (other than
NationsBank or any Affiliate thereof) that has requested the Borrower to pay
amounts pursuant to Sections 2.16 or 2.17 or the obligations of which to make
any Loans has been suspended pursuant to Section 2.15 (such Lender, an "Affected
Lender"), at any time until such Affected Lender's request for payment under
Section 2.16 or 2.17 has been withdrawn or such suspension of the obligation to
make Loans has ceased, by giving not less than 10 Business Days' notice to the
Agent (which shall promptly notify the Affected Lender and each other Lender)
that it intends to replace such Affected Lender with one or more Eligible
Assignees (or other lender acceptable to the Agent). Such replacement shall be
effected by Assignment and Acceptance and registration of such assignment in the
Register in accordance with Section 9.6(c). Upon the effective date of any such
replacement pursuant to this Section 2.21, and as a condition thereto, the
Borrower shall, or shall cause the replacement Lender or Lenders to, pay to the
Affected Lender being so replaced an amount equal to the entire outstanding
principal amount of such Affected Lender's Loans and any other amounts owing to
such Affected Lender hereunder (including, without limitation, interest, fees,
compensation and additional amounts under this Section 2, in each case accrued
to the effective date of such replacement), whereupon (i) each replacement
lender shall become a "Lender" for all purposes of this Agreement and the other
Loan Documents having a Commitment in the amount of such Affected Lender's
Commitment assumed by it, (ii) the Commitment of the Affected Lender being
replaced shall be terminated upon such effective date and (iii) the Affected
Lender shall cease to be a "Lender" as of such effective date.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this Agreement and
to make the Loans, the Borrower hereby represents and warrants to the Agent and
each Lender that:
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3.1 Financial Condition. (a) The balance sheet of the Borrower as at
December 31, 1996 and the related statements of income and of cash flows for the
fiscal year ended on such date, reported on by Arthur Andersen LLP, copies of
which have heretofore been furnished to the Agent, are complete and present
fairly the financial condition of the Borrower as at such date, and the results
of its operations and its cash flows for the fiscal year then ended. All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by such accountants or Responsible Officer,
as the case may be, and as disclosed therein). The Borrower did not have, at the
date of the most recent balance sheet referred to above, any material Guarantee
Obligation, contingent liability or liability for taxes, or any long-term lease
(other than the Ground Leases, and other than leases with respect to which the
Borrower is landlord) or unusual forward or long-term commitment, including,
without limitation, any interest rate or foreign currency swap or exchange
transaction or other financial derivative, which is not reflected in the
foregoing statements or in the notes thereto. During the period from December
31, 1996 to and including the date hereof there has been no sale, transfer or
other disposition by the Borrower of any material part of its business or
property and no purchase or other acquisition of any business or property
(including any Capital Stock of any other Person) material in relation to the
financial condition of the Borrower at December 31, 1996.
(b) The pro forma balance sheet of the Borrower as at March 31, 1997,
certified by a Responsible Officer of the Borrower (the "Pro Forma Balance
Sheet"), a copy of which has been provided to the Agent, is the unaudited
balance sheet of the Borrower adjusted to give effect (as if such events had
occurred on such date) to (i) the making of Loans in an aggregate principal
amount of $55,000,000, (ii) the application of the proceeds of the Loans to (A)
the repayment in full of all principal, interest and other amounts owing on the
GSMC Loan, (B) the distribution of $44,100,000 by the Borrower to the Investors
and (iii) the payment of all fees and expenses related to the foregoing
transactions, as estimated in good faith as of the date of the Pro Forma Balance
Sheet. The Pro Forma Balance Sheet, together with the notes thereto, presents
fairly, on a pro forma basis, the financial position of the Borrower as at March
31, 1997, assuming that the events specified in the preceding sentence had
actually occurred on such date.
(c) The operating forecast and cash flow projections of the Borrower,
copies of which have heretofore been furnished to the Agent, were prepared in
good faith under the direction of a Responsible Officer of the Borrower.
3.2 No Change. (a) Since December 31, 1996 there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect, and (b) during the period from December 31, 1996 to and
including the date hereof no distributions have been declared, paid or made upon
the Capital Stock of the Borrower nor has any of the Capital Stock of the
Borrower been redeemed, retired, purchased or otherwise acquired for value by
the Borrower, any Investor or any of their respective Affiliates or
Subsidiaries.
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3.3 Existence; Compliance with Law. The Borrower (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the power and authority, and the legal
right, to own and operate its property, to lease the property it operates as
lessee and to conduct the business in which it is currently engaged, (c) is duly
qualified and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification and (d) is in compliance with all Requirements of
Law except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
3.4 Power; Authorization; Enforceable Obligations. (a) The Borrower
has the power and authority, and the legal right, to make, deliver and perform
the Loan Documents to which it is a party and to borrow hereunder and has taken
all necessary action to authorize the borrowings on the terms and conditions of
this Agreement and any Notes and to authorize the execution, delivery and
performance of the Loan Documents to which it is a party. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
borrowings hereunder or with the execution, delivery, performance, validity or
enforceability of the Loan Documents to which the Borrower is a party, except as
may have been obtained or made and is in full force and effect. This Agreement
has been, and each other Loan Document to which it is a party will be, duly
executed and delivered on behalf of the Borrower. This Agreement constitutes,
and each other Loan Document to which it is a party when executed and delivered
will constitute, a legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(b) To the knowledge of Borrower, except as set forth on Schedule 3.4(b),
the Properties and the use thereof by the Borrower or any tenant of the Borrower
comply in all material respects with (i) all applicable federal, state and local
laws, ordinances, building codes, rules and regulations pertaining to zoning,
building, subdivision, land use and environmental matters, (ii) all special
permits, variances and certificates of occupancy, if any, issued by the New York
City Planning Commission, the New York City Board of Estimate, the New York City
Council, the New York City Landmarks Preservation Commission, the New York City
Board of Standards and Appeals, the New York City Building Department and the
New York City Fire Department, and (iii) other similar restrictions.
3.5 No Legal Bar. The execution, delivery and performance of the Loan
Documents to which the Borrower is a party, the borrowings hereunder and the use
of the proceeds thereof will not violate any Requirement of Law or material
Contractual Obligation of the Borrower and will not result in, or require, the
creation or imposition of any Lien on any of its or their respective properties
or revenues pursuant to any such Requirement of Law or material Contractual
Obligation.
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3.6 No Material Litigation. Except as set forth on Schedule 3.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or against any Property or any of its
other properties or revenues (a) with respect to any of the Loan Documents or
any of the transactions contemplated hereby or thereby, or (b) which could
reasonably be expected to have a Material Adverse Effect. All litigation, claims
and proceedings relating to a transaction proposed in 1995 by a group of Persons
organized by Samuel Zell for the refinancing of the mortgage loan made by RCPI
to RCP Associates and Rockefeller Center Properties (including without
limitation the actions captioned Zell/Merrill Lynch Real Estate Opportunity
Partners Limited Partnership III v. Rockefeller Center Properties, Inc., 96 Civ.
1445, United States District Court, Southern District of New York, and
Rockefeller Center Properties, Inc. v. Zell/Merrill Lynch Real Estate
Opportunity Partners Limited Partnership III and Equity Office Holdings, L.L.C.,
Index No. 106176/96, Supreme Court for the State of New York, New York County)
have been fully resolved and settled, all proceedings related thereto have been
dismissed with prejudice, any amounts required to be paid by the Borrower in
connection with any such settlements have been paid in full, and there are no
further obligations binding upon the Borrower in connection therewith.
3.7 No Default. The Borrower is not in default under or with respect
to any of its Contractual Obligations in any respect which could reasonably be
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
3.8 Ownership of Property; Condition of Title; Leases Major Space
Leases and Major Retail Leases; Liens; Other Agreements.
(a) The Borrower has good and marketable fee or leasehold title to
each Property as set forth on Schedule 1.1(a); and the Borrower owns each
Property free and clear of all Liens, except those Liens described on Schedule
3.8(a) hereof (the "Permitted Encumbrances"). The Properties constitute all of
the real property owned, leased or operated by the Borrower as of the Closing
Date. Schedule 1.1(a) accurately sets forth as to each Property the nature of
the Borrower's interest therein. As of the date of the Rent Roll, none of the
Properties is subject to any leases other than the Leases described in the Rent
Roll. No Person has any possessory interest in any Property or right to occupy
the same except under and pursuant to the provisions of a Lease or the RGT
Telecommunications Agreement.
(b) The Rent Roll contains a complete list of all Leases in effect
with respect to the Properties as of the date thereof and the information
disclosed therein is true, accurate and complete in all material respects as of
such date.
(c) Except as noted on Schedule 3.8(c) the Borrower has not received
any written notice from any tenant claiming that the Borrower is in default
under any of the Scheduled Leases.
(d) Schedule 3.8(d) annexed hereto is a summary of all contracts
affecting the Properties to which Borrower is a party (other than Leases, Loan
Documents and the Property Management Agreement) which require payments by the
Borrower in excess of
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$250,000 per annum, including without limitation, management, service and supply
agreements, all as in effect on the date of this Agreement (herein collectively
referred to as the "Material Service Contracts"), setting forth, with respect to
each of the Material Service Contracts, (i) the names of the parties thereto,
(ii) the service provided thereunder or the subject matter thereof, (iii) the
monthly payment or other rate of payment payable thereunder as of the date of
this Agreement and (iv) the termination rights of the Borrower, if any. The
copies of the Material Service Contracts which were heretofore furnished by the
Borrower to the Agent or its counsel are true and complete copies thereof. As of
the date of this Agreement no amounts are delinquent (under customary trade
terms) under any Material Service Contract.
(e) Except as set forth in Schedule 3.8(e) annexed hereto, as of the
date of this Agreement there is no real property tax assessment pending or
affecting any Property.
(f) To Borrower's knowledge, the Borrower has all governmental
permits, licenses and approvals to occupy each Property as it is occupied as of
the date hereof, including, but not limited to, the Certificate of Occupancy and
such governmental permits, licenses and approvals for each Property or the
operation thereof are in full force and effect.
(g) The Condominium Regime is in full force and effect, the
condominium declaration therefor has been recorded in the Office of the Register
of New York County, and has not been amended, supplemented or modified except as
shown on Schedule 3.8(g). No assessment or unit charge now delinquent thereunder
by Borrower remains unpaid. Borrower has not received any written notice of
default from the Board of Managers under the Condominium Regime.
(h) The Ground Leases are in full force and effect and have not been
amended, modified or supplemented in any way. Except as noted on Schedule
3.8(h), Borrower has no knowledge of any material default of Borrower under the
Ground Leases.
(i) Except as shown on Schedule 3.8(i), there are no Tenant
Improvement Obligations under any Leases in effect on the Closing Date which
have not been fully performed and paid for.
(j) Borrower has not assigned, sold, pledged, transferred or
hypothecated any Lease or any interest therein or any rents payable thereunder.
(k) The Property Management Agreement is in full force and effect and
has not been amended, modified or supplemented. To Borrower's knowledge, there
are no defaults under the Property Management Agreement by either party and
there are no conditions that, with the passage of time or the giving of notice,
or both, would constitute defaults thereunder. Borrower has not received any
written notice from the Property Manager claiming that Borrower is in default
under the Property Management Agreement.
(l) The Expense Sharing Agreement is in full force and effect and has
not been amended, modified or supplemented. To Borrower's knowledge, there are
no defaults under the Expense Sharing Agreement by either party and there are no
conditions that, with the
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passage of time or the giving of notice, or both, would constitute defaults
thereunder. Borrower has not received any written notice from any other party
thereto claiming that Borrower is in default under the Expense Sharing
Agreement.
(m) Attached hereto as Schedule 3.8(m) is a true and complete schedule
of all brokerage agreements requiring payment of an amount in excess of $100,000
to which the Borrower is a party as of the Closing Date.
3.9 Intellectual Property. The Borrower owns, or is licensed to use,
all trademarks, tradenames, copyrights, technology, know-how and processes
necessary for the conduct of its business as currently conducted except for
those the failure to own or license which could not reasonably be expected to
have a Material Adverse Effect (the "Intellectual Property"). No claim has been
asserted and is pending by any Person challenging or questioning the use by the
Borrower of any such Intellectual Property or the validity or effectiveness of
any such Intellectual Property. The use of such Intellectual Property by the
Borrower does not infringe on the rights of any Person, except for such claims
and infringements that, in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
3.10 Taxes. The Borrower has filed or caused to be filed all tax
returns which, to the knowledge of the Borrower, are required to be filed and
has paid all taxes shown to be due and payable by the Borrower on said returns
or on any assessments made against it or any of its property and all other
taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower). No tax Lien has been filed, and, to the knowledge of the
Borrower, no claim is being asserted, with respect to any such tax, fee or other
charge.
3.11 Federal Regulations. No part of the proceeds of any Loans will be
used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation G or Regulation U of the
Board of Governors of the Federal Reserve System as now and from time to time
hereafter in effect, or for any purpose which violates, or which would be
inconsistent with, the provisions of the regulations of such Board of Governors.
3.12 ERISA. There is no "accumulated funding deficiency" (within the
meaning of Section 412 of the Code or Section 302 of ERISA), whether or not
waived, in respect of any Plan as of the last day of the most recent fiscal year
of such Plan ended prior to the date hereof. No Reportable Event has occurred
during the five year period prior to the date on which this representation is
made or deemed made with respect to any Plan which would have a Material Adverse
Effect. Each Plan has complied in all material respects with the applicable
provisions of ERISA and the Code. No termination of a Single Employer Plan has
occurred which has resulted in the imposition of a Lien in favor of the PBGC or
a Plan has arisen. The present value of all accrued benefits under each Single
Employer Plan (based on
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those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits. Neither the Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan, and neither the
Borrower nor any Commonly Controlled Entity would become subject to any
liability under ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent. As of
the Closing Date, neither the Borrower nor any Commonly Controlled Entity has
any liability for post retirement benefits to be provided to their current and
former employees under Plans which are welfare benefit plans (as defined in
Section 3(1) of ERISA).
3.13 Investment Company Act; Other Regulations. The Borrower is not an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. The
Borrower is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.
3.14 Subsidiaries. Schedule 3.14 sets forth the name of each direct or
indirect Subsidiary of the Borrower, its form of organization, its jurisdiction
of organization, the total number of issued and outstanding shares or other
interests of Capital Stock thereof, the classes and number of issued and
outstanding shares or other interests of Capital Stock of each such class, the
name of each holder of Capital Stock thereof and the number of shares or other
interests of such Capital Stock held by each such holder and the percentage of
all outstanding shares or other interests of such class of Capital Stock held by
such holders. None of the Subsidiaries of the Borrower owns any material
property or engages in any operations except as set forth on Schedule 3.14.
3.15 Accuracy and Completeness of Information. (a) All factual
information, reports and other papers and data with respect to the Borrower and
the Properties (other than projections) furnished, and all factual statements
and representations made, to the Agent or the Lenders by the Borrower, or on
behalf of the Borrower, were, at the time the same were so furnished or made,
when taken together with all such other factual information, reports and other
papers and data previously so furnished and all such other factual statements
and representations previously so made, complete and correct in all material
respects, to the extent necessary to give the Agent and the Lenders true and
accurate knowledge of the subject matter thereof in all material respects, and
did not, as of the date so furnished or made, contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements contained therein not misleading in light of the circumstances in
which the same were made.
(b) No fact has occurred and is known to the Borrower which has or in
the future is reasonably likely (so far as the Borrower can reasonably foresee)
to have a Material
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Adverse Effect which has not been set forth in the financial statements referred
to in Section 3.1 or in such information, reports, papers and data or otherwise
disclosed to the Agent or the Lenders prior to the Closing Date.
3.16 Labor Relations. To Borrower's knowledge, there is (a) no unfair
labor practice compliant pending or threatened against the Borrower before the
National Labor Relations Board which could reasonably be expected to have a
Material Adverse Effect and no grievance or arbitration proceeding arising out
of or under a collective bargaining agreement is so pending or threatened; (b)
no strike, labor dispute, slowdown or stoppage pending or threatened against the
Borrower; and (c) no union representation question existing with respect to the
employees of the Borrower and no union organizing activities are taking place
with respect to any thereof.
3.17 Insurance. The Borrower has, with respect to its properties and
business, insurance covering the risks, in the amounts, with the deductible or
other retention amounts, and with the carriers, disclosed on the insurance
certificates or other evidence of insurance delivered pursuant to Section
4.1(q), which insurance meets the requirements of Section 5.5 hereof as of the
Closing Date.
3.18 Solvency. On the Closing Date, after giving effect to the
borrowing of Loans in an aggregate principal amount of $55,000,000, the
application of the proceeds of such Loans to the repayment in full of all
principal, interest and other amounts owing on the GSMC Loan, and the
distribution of $44,107,504 by the Borrower to RCPI and the LLC, (i) the amount
of the "present fair saleable value" of the assets of the Borrower will, as of
such date, exceed the amount of all "liabilities of the Borrower, contingent or
otherwise", as of such date, as such quoted terms are determined in accordance
with applicable federal and state laws governing determinations of the
insolvency of debtors, (ii) the present fair saleable value of the assets of the
Borrower will, as of such date, be greater than the amount that will be required
to pay the liabilities of the Borrower on its debts as such debts become
absolute and matured, (iii) the Borrower will not have, as of such date, an
unreasonably small amount of capital with which to conduct its business, and
(iv) the Borrower will be able to pay its debts as they mature. For purposes of
this Section 3.18, "debt" means "liability on a claim", "claim" means any (x)
right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured, and (y) right to an
equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured
or unsecured.
3.19 Purpose of Loans. Subject to Section 6.6(a), the proceeds of the
Loans shall be used by the Borrower only for the repayment in full of all
principal, interest and other amounts owing on the GSMC Loan, the distribution
permitted under Section 6.6(a), the payment of property tax expenses, the
payment of interest on the 14% Debentures in accordance with the terms hereof
and of the Intercreditor Agreement, the payment of the purchase price of any
Zeros repurchased by the Borrower in accordance with the terms hereof,
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the funding of tenant work allowances and leasing commissions incurred before
and after the Closing Date, the funding of capital expenditures on the
Properties identified as necessary on the Engineer's Report, the funding of
other capital improvements on the Properties incurred before or after the
Closing Date to the extent permitted hereunder, and for the general working
capital purposes of the Borrower. None of the proceeds of the Loans shall be
used to pay any amounts in connection with any settlement, decree or judgment
entered in connection with any investigation, litigation or proceeding.
3.20 Environmental Matters. Except as set forth on Schedule 3.20:
(a) To the Borrower's knowledge and except as disclosed in any
environmental report delivered to the Agent by or on behalf of the Borrower on
or prior to the Closing Date, the Properties do not contain any Materials of
Environmental Concern in amounts or concentrations which (i) constitute or
constituted a violation of, or (ii) could reasonably be expected to give rise to
liability under, any Environmental Law except in either case insofar as such
violation or liability, or any aggregation thereof, is not reasonably likely to
result in the payment of a Material Environmental Amount.
(b) To the Borrower's knowledge and except as disclosed in any
environmental report delivered to the Agent by or on behalf of the Borrower on
or prior to the Closing Date, the Properties and all operations at the
Properties are in compliance, and have since July 17, 1996 been in compliance,
in all material respects with all applicable Environmental Laws, and there is no
contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the business operated by the
Borrower (the "Business") which could materially interfere with the continued
operation of the Properties or materially impair the fair saleable value
thereof.
(c) The Borrower has not received any notice of violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to any
of the Properties or the Business, nor does the Borrower have knowledge or
reason to believe that any such notice will be received or is being threatened
except insofar as such notice or threatened notice, or any aggregation thereof,
does not involve a matter or matters that is or are reasonably likely to result
in the payment of a Material Environmental Amount.
(d) To the Borrower's knowledge, Materials of Environmental Concern
have not been transported or disposed of from the Properties in violation of, or
in a manner or to a location which could reasonably be expected to give rise to
liability under, any Environmental Law, nor have any Materials of Environmental
Concern been generated, treated, stored or disposed of at, on or under any of
the Properties in violation of, or in a manner that could reasonably be expected
to give rise to liability under, any applicable Environmental Law except insofar
as any such violation or liability referred to in this paragraph, or any
aggregation thereof, is not reasonably likely to result in the payment of a
Material Environmental Amount.
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(e) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower is or is threatened to be named as a
party with respect to the Properties or the Business, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other orders,
or other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business except insofar
as such proceeding, action, decree, order or other requirement, or any
aggregation thereof, is not reasonably likely to result in the payment of a
Material Environmental Amount.
(f) To the Borrower's knowledge, there has been no release or threat
of release of Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations of the Borrower in connection with the
Properties or otherwise in connection with the Business, in violation of or in
amounts or in a manner that could reasonably give rise to liability under
Environmental Laws except insofar as any such violation or liability referred to
in this paragraph, or any aggregation thereof, is not reasonably likely to
result in the payment of a Material Environmental Amount.
3.21 Obligation to Convey. As of the Closing Date, there is no
contract or other obligation providing for or requiring the Borrower to convey
(other than lease) any interest in any of the Properties to any Person.
3.22 Certain Existing Indebtedness. (a) As of the Closing Date, (i)
the aggregate outstanding principal amount of the 14% Debentures is $75,000,000
and (ii) the aggregate accreted amount with respect to all Zeros outstanding is
approximately $410,000,000.
(b) After giving effect to the execution and delivery of the Loan
Documents, no provision of the Zeros or the Zeros Indenture requires that the
Zeros shall be prepaid, redeemed, repurchased or defeased with any portion of
any proceeds of any sale, lease, assignment, transfer, pledge, exchange or other
disposition or hypothecation of any property of the Borrower (including, without
limitation, any proceeds received upon any destruction, casualty or condemnation
with respect to any such property).
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Initial Loans. The agreement of each Lender to make
the initial Loan requested to be made by it is subject to the satisfaction,
immediately prior to or concurrently with the making of such Loan on the Closing
Date, of the following conditions precedent:
(a) Loan Documents. The Agent shall have received:
(i) this Agreement, executed and delivered by a duly authorized
officer of the Borrower, with a counterpart for each Lender,
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(ii) for the account of each Lender a Note conforming to the
requirements hereof and executed by a duly authorized officer of the
Borrower,
(iii) the Intercreditor Agreement, executed and delivered by a
duly authorized officer or attorney-in-fact of the party thereto, with
a counterpart or a conformed copy for each Lender, and
(iv) the Limited Recourse Agreement, executed and delivered by a
duly authorized officer of each party thereto and notarized or
otherwise duly legalized with respect to any party thereto which is a
natural person, with a counterpart or a conformed copy for each
Lender.
(b) Related Agreements. The Agent shall have received a certificate of
the Borrower certifying that the copies of the Zeros Indenture, the 14%
Debentures Purchase Agreement, the Property Management Agreement, the GSMC
Loan Documents, the Condominium Documents and the Leases listed on Schedule
4.1(b) (such Leases, the "Scheduled Leases") provided to, or made available
for inspection by, the Agent by or on behalf of the Borrower on or prior to
the Closing Date were complete and correct.
(c) Concurrent Transactions. All amounts owing to GSMC under the GSMC
Loan Documents shall have been, or shall be concurrently with the making of
the initial Loans, repaid in full, and the GSMC Loan Document shall
terminate and be of no further force and effect upon such repayment, in
each case pursuant to such payout letters and other documents as the Agent
may require, each of which shall be inform and substance satisfactory to
the Agent.
(d) Initial Capitalization. The Agent shall have received (i) evidence
satisfactory to it that the Investors shall have made initial capital
investments in the Borrower in an aggregate amount of not less than
$344,107,504, and (ii) a certificate of the Borrower certifying that no
distributions have been made of the Investors' initial capital
contributions prior to the making of the initial Loans on the Closing Date.
(e) Initial Borrowing Certificate. The Agent shall have received, with
a counterpart for each Lender, a certificate of the Borrower, dated the
Closing Date, substantially in the form of Exhibit C, with appropriate
insertions and attachments, satisfactory in form and substance to the
Agent, executed by the President or any Vice President and the Secretary or
any Assistant Secretary of the Borrower.
(f) Proceedings of the Borrower. The Agent shall have received a copy
of the resolutions, in form and substance satisfactory to the Agent, of the
Board of Trustees of the Borrower authorizing (i) the execution, delivery
and performance of this Agreement and the other Loan Documents to which it
is a party, and (ii) the borrowings contemplated hereunder, certified by
the Secretary or an Assistant Secretary of the Borrower as of the Closing
Date, which certificate shall be in form
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and substance satisfactory to the Agent and shall state that the
resolutions thereby certified have not been amended, modified, revoked or
rescinded.
(g) Borrower Incumbency Certificate. The Agent shall have received,
with a counterpart for each Lender, a certificate of the Borrower, dated
the Closing Date, as to the incumbency and signature of the officers of the
Borrower executing any Loan Document satisfactory in form and substance to
the Agent, executed by the President or any Vice President and the
Secretary or any Assistant Secretary of the Borrower.
(h) Proceedings of the Other Loan Parties. The Agent shall have
received a copy of the resolutions, in form and substance satisfactory to
the Agent, of the Board of Directors (or other governing body) of each Loan
Party other than the Borrower and other than any Loan Party who is a
natural person authorizing the execution, delivery and performance of the
Loan Documents to which it is a party, certified by the Secretary or an
Assistant Secretary of such Loan Party as of the Closing Date, which
certificate shall be in form and substance satisfactory to the Agent and
shall state that the resolutions thereby certified have not been amended,
modified, revoked or rescinded.
(i) Loan Party Incumbency Certificates. The Agent shall have received,
with a counterpart for each Lender, a certificate of each Loan Party other
than the Borrower and other than any Loan Party who is a natural person,
dated the Closing Date, as to the incumbency and signature of the officers
of such Loan Party executing any Loan Document, satisfactory in form and
substance to the Agent, executed by the President or any Vice President and
the Secretary or any Assistant Secretary of such Loan Party.
(j) Organizational Documents. The Agent shall have received true and
complete copies of the trust agreement and the certificate of trust or
other similar governing or organization documents of the Borrower,
certified as of the Closing Date as complete and correct copies thereof by
the Secretary or an Assistant Secretary of the Borrower.
(k) Good Standing Certificates. The Agent shall have received, with a
copy for each Lender, certificates dated as of a recent date from the
Secretary of State or other appropriate authority, evidencing the good
standing of the Borrower and of each other Loan Party for which such
certificates are available (i) in the jurisdiction of its organization and
(ii) in each other jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires it to qualify as a foreign
Person except, as to this subclause (ii), where the failure to so qualify
could not have a Material Adverse Effect.
(l) Fees. The Agent shall have received the fees to be received on the
Closing Date referred to in the Fee Letter.
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(m) Legal Opinions. The Agent shall have received, with a counterpart
for each Lender, the executed legal opinion of Sullivan & Cromwell, counsel
to the Borrower and certain of the Loan Parties, substantially in the form
of Exhibit D, and from other counsel to the other Loan Parties reasonably
acceptable to the Agent, in form and substance reasonably satisfactory to
the Agent. Such legal opinions shall cover such other matters incident to
the transactions contemplated by this Agreement as the Agent may reasonably
require.
(n) Lien Searches. The Agent shall have received the results of a
recent search by a Person satisfactory to the Agent, of the Uniform
Commercial Code, judgment and tax lien filings which may have been filed
with respect to personal property of the Borrower, and the results of such
search shall be satisfactory to the Agent.
(o) Engineer's Reports. The Agent and each Lender shall have received
a copy of each of the Engineer's Reports, which Engineer's Reports shall be
in form and substance satisfactory to the Agent.
(p) Appraisal. The Agent shall have received a recent appraisal of the
Properties, performed by a Person satisfactory to the Agent in its
discretion and otherwise in form and substance satisfactory to the Agent,
which appraisal shall, among other things, disclose a Debt to Value Ratio
(determined on a pro forma basis assuming the borrowing of Loans in the
full amount of the Commitments, the application of the proceeds of the
Loans to the payments contemplated in the Pro Forma Balance Sheet as
specified in Section 3.1(b), an aggregate outstanding principal amount of
14% Debentures equal to $75,000,000 and an aggregate accreted principal
amount of Zeros equal to approximately $410,000,000) as of the date of such
appraisal of not greater than 65%.
(q) Insurance. The Agent shall have received evidence in form and
substance satisfactory to it that all of the requirements of Section 5.5
hereof shall have been satisfied.
(r) Interest Rate Protection. The Agent shall have received evidence
in form and substance satisfactory to it that the Borrower shall have
obtained an interest rate swap, cap, collar or other interest rate hedge
with respect to an aggregate principal amount of the Loans equal to, from
the Closing Date through June 29, 1997, $55,000,000, from June 30, 1997
through August 30, 1997, $75,000,000, from August 31, 1997 through November
29, 1997, $85,000,000 and thereafter, the Maximum Allowable Loan Balance
set forth in Schedule 2.2, (a)(i) fixing for the first two years following
the Closing Date, the Eurodollar Base Rate at not more than 2.0% above the
Eurodollar Rate as in effect on the Closing Date, and (ii) fixing for the
third year following the Closing Date, the Eurodollar Base Rate at not more
than 3.0% above the Eurodollar Rate as in effect on the Closing Date or (b)
containing
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such terms as may be agreed to by the Borrower and the Agent and are
standard and customary for transactions of this kind.
(s) Estoppel Certificates. The Agent shall have received estoppel
certificates, in form and substance satisfactory to the Agent, from each
tenant under the Scheduled Leases, except (i) with respect to any of such
Leases which do not by their terms require the tenant thereunder to provide
estoppel certificates, and (ii) with respect to any of such Leases as to
which the Borrower shall not, after using commercially reasonable efforts,
have been successful in obtaining such estoppel certificates.
4.2 Conditions to Each Loan. The agreement of each Lender to make any
Loan requested to be made by it on any date (including, without limitation, its
initial Loan) is subject to the satisfaction of the following conditions
precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by the Borrower in or pursuant to the Loan Documents shall
be true and correct in all material respects on and as of such date as if
made on and as of such date, other than any such representations or
warranties which by their terms relate solely to another earlier date.
(b) No Default. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the Loans requested to
be made on such date.
(c) Use of Proceeds. The Agent shall have received a certificate of a
Responsible Officer of the Borrower specifying in reasonable detail the
anticipated use of proceeds of the requested Loans, and if requested by the
Agent such supporting documentation and other evidence as the Agent may
reasonably require to verify that such use of proceeds is consistent with
the provisions of this Agreement and the other Loan Documents.
(d) Additional Matters. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents
shall be satisfactory in form and substance to the Agent, and the Agent
shall have received such other documents and legal opinions in respect of
any aspect or consequence of the transactions contemplated hereby or
thereby as it shall reasonably request.
Each borrowing by the Borrower hereunder shall constitute a representation and
warranty by the Borrower as of the date thereof that the conditions contained in
this Section 4.2 have been satisfied (other than, with respect to Section 4.2(c)
and (d), to the extent the satisfaction of such conditions are dependent upon
the subjective satisfaction of the Agent with the matters referenced on such
paragraphs).
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SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as any of the Commitments
remain in effect or any amount is owing to any Lender or the Agent hereunder or
under any other Loan Document, the Borrower shall:
5.1 Financial Statements. Furnish to the Agent:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower, a copy of the balance sheet of the
Borrower as at the end of such year and the related statements of income and
retained earnings and of cash flows for such year, setting forth in each case in
comparative form the figures for the previous year, reported on without a "going
concern" or like qualification or exception, or qualification arising out of the
scope of the audit, by Arthur Andersen LLP or other independent certified public
accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal year
of the Borrower, the unaudited balance sheet of the Borrower as at the end of
such quarter and the related unaudited statements of income and retained
earnings and of cash flows of the Borrower for such quarter and the portion of
the fiscal year through the end of such quarter, setting forth in each case in
comparative form the figures for the previous year, certified by a Responsible
Officer as being fairly stated in all material respects (subject to normal
year-end audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
5.2 Certificates; Other Information. Furnish to the Agent:
(a) concurrently with the delivery of the financial statements
referred to in Section 5.1(a), a certificate of the independent certified public
accountants reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in Sections 5.1(a) and (b), (A) a certificate of a Responsible
Officer (i) stating that such Officer has obtained no knowledge of any Default
or Event of Default except as specified in such certificate, (ii) showing in
detail the calculations supporting such Officer's certification of the
Borrower's compliance with the requirements of Sections 6.6 and 6.7, and (iii)
specifying the percentage of the capital expenditures budgeted for such period
in the Capital Budget therefor which were actually expended during such period,
and (B) a rent roll for the Properties showing in tabular form, in substantially
the same format and detail as the Rent Roll delivered prior to the Closing Date,
all Leases for the Properties and the base and additional rent under such Leases
during such period;
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(c) within five days after the final acceptance thereof by the
Borrower, but in any event not later than 30 days after the first day of the
fiscal year to which the same relate, the Operating Budget, Capital Improvement
Budget and Leasing Guidelines (as such terms are defined in Section 3.1(c) of
the Property Management Agreement) for each fiscal year of the Borrower which
were provided by the Property Manager pursuant to Section 3.1(c) of the Property
Management Agreement, and any modification to any thereof (such Capital
Improvements Budget for such fiscal year, as finally accepted by the Borrower in
accordance to Section 3.1 of the Property Management Agreement or if not
accepted the latest version submitted to the Borrower, being referred to herein
as the "Capital Budget" for such fiscal year);
(d) within five Business Days after the same are filed, copies of all
financial statements and reports which the Borrower may make to, or file with,
the Securities and Exchange Commission or any successor or analogous
Governmental Authority;
(e) during the month of May in each calendar year, certificates of
insurance or other evidence of insurance satisfactory to the Agent with respect
to the insurance maintained by the Borrower in accordance with Section 5.5 of
this Agreement;
(f) (i) at any time any Major Space Lease or Major Retail Lease shall
be executed and delivered a copy of such Major Space Lease or Major Retail Lease
and a summary of the economic terms thereof, and (ii) at any time a Major Space
Lease or Major Retail Lease shall be modified in any material respect or
terminated, or any notice of default shall have been received by the Borrower
with respect thereto (which default shall not have been cured), a description in
reasonable detail of such modification, termination or default;
(g) if the Borrower elects to extend the Original Maturity Date
pursuant to Section 2.6, not earlier than 90 days nor later than 30 days prior
to the Original Maturity Date, a recent appraisal of the Properties, in form and
by an appraiser satisfactory to and engaged by the Agent, setting forth the Fair
Market Values of the Properties as of a date no earlier than 12 months prior to
the Original Maturity Date; provided, that if the Borrower shall not have
notified the Agent of its intention to request or not request an extension of
the Original Maturity Date on or prior to the date 90 days before the Original
Maturity Date, the Agent may engage an appraiser to commence the appraisal
required by this Section 5.3(g) (and the Agent agrees to notify the Borrower
prior to any such engagement), and, unless both (x) the Borrower shall have
irrevocably notified the Agent of its election not to extend the Original
Maturity Date pursuant to Section 2.6 prior to the Agent's engagement of such
appraiser and (y) there is no Event of Default continuing at any time from the
time of such irrevocable notification by the Borrower to and including the
Original Maturity Date, the fees and expenses of such appraiser in connection
therewith shall be for the account of the Borrower, whether or not the Borrower
elects to extend the Original Maturity Date pursuant to Section 2.6;
(h) on the last day of each Test Period, a calculation, in such form
and in such detail as the Agent may reasonably require and certified by a
Responsible Officer of the
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Borrower as being true and correct based upon the best information then
available to the Borrower, setting forth the Borrower's estimated calculation of
Debt Service Coverage Ratio for such Test Period (with respect to any such Test
Period, the "Estimated Calculation");
(i) if requested in writing by the Agent, not more than 30 days after
the end of each year or if longer as soon as reasonably practicable after the
same becomes available to the Borrower, an overview report of the Manhattan
office market for such year (which the Agent and the Lenders acknowledge is
anticipated to be prepared by a Person other than the Borrower), setting forth
basic New York City economic factors, and summaries (by building class,
submarket and overall market) of market lease concessions, market rental rates,
leasing activity, net absorption, market vacancy and such other information
about the Manhattan office market for such year as is customarily published in
standard reports generally accepted in the Manhattan office leasing industry;
and
(j) promptly, such additional financial and other information as the
Agent, at the direction of any Lender, may from time to time reasonably request.
5.3 Payment of Obligations. (a) Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
the Borrower, as the case may be, or except to the extent that the failure to so
pay, discharge or satisfy such obligations would not result in a Material
Adverse Effect.
(b) Without limiting the generality of the foregoing, (i) pay all
taxes (including any component of maintenance charges comprised of taxes),
assessments, water rates and sewer rents, now or hereafter levied or assessed or
imposed against any Property or any part thereof and all ground rents, other
governmental impositions, and other charges, including, without limitation,
vault charges and license fees for the use of vaults, chutes and similar areas
adjoining any such Property, prior to the date any of the same become
delinquent; (ii) pay all maintenance charges (other than those covered by
subclause (i) of this Section 5.3(b)) prior to the date any of the same become
delinquent, and (iii) promptly cause to be paid and discharged any lien or
charge whatsoever which may be or become a Lien or charge including, without
limitation, any mechanic's lien against any Property; and promptly pay for all
utility services provided to the Properties; except, in each case, where the
amount or validity thereof is being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Borrower or other security therefor has been
provided as required by applicable law.
5.4 Conduct of Business and Maintenance of Existence. Continue to
engage in business of the same general type as now conducted by it and preserve,
renew and keep in full force and effect its existence and take all reasonable
action to maintain all rights, privileges and franchises necessary or desirable
in the normal conduct of its business except as otherwise permitted pursuant to
Section 6.4; comply with all Contractual Obligations and Requirements
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of Law except to the extent that failure to comply therewith would not, in the
aggregate, be reasonably expected to have a Material Adverse Effect.
5.5 Maintenance of Property; Insurance. (a) Keep all property useful
and necessary in its business in good working order and condition.
(b) The Borrower will keep each Property insured as follows:
(i) "All Risk" property insurance, including sprinkler
leakage in an amount sufficient to prevent the Borrower
from becoming a co-insurer of any loss under the terms of
the policy but in no event less than the then full
replacement value of such Property;
(ii) rental value insurance in an amount equal to not less
than one year's gross rent from such Property;
(iii) steam boiler and machinery breakdown direct damage
insurance and third-party liability coverage (if not
covered under the comprehensive general liability
policy), with full comprehensive coverage on a repair and
replacement cost basis, for all boilers and machinery
which form a part of such Property, including rental
value insurance in connection therewith in accordance
with subsection (ii) of this Section 5.5(b) above;
(iv) comprehensive general liability insurance with respect to
all the Properties in an amount not less than $10,000,000
(or such higher amount as the Agent may from time to time
require) combined single limit for bodily injury and
property damage; such insurance shall include premises
liability insurance, blanket contractual liability
insurance (during the period of any construction or
restoration work at any Property) and personal injury
liability insurance;
(v) during any period of construction or restoration of such
Property, a policy or policies of builder's risk coverage
written on a completed value basis insuring against such
risks (including, without limitation, fire and extended
coverage, collapse of such Property) as the Agent may
request, in form and substance acceptable to the Agent;
(vi) a policy or policies of workers' compensation insurance
as required by workers' compensation insurance laws
subject to the statutory limits of the State of New York
in respect of any work or other operations on, about or
in connection with all the Properties and covering all
employees of the Borrower and
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employer's liability insurance coverage of not less than
$5,000,000; and
(vii) such other insurance with respect to such Property as the
Agent from time to time may reasonably require and which
is customary to be required by institutional lenders for
properties of a type similar to the Properties.
(c) All policies of insurance required under this Section 5.5 shall be
issued by companies having a claims paying ability determined by A. M. Best
Company of A or better and which are licensed to do business in the State of New
York or with such other companies satisfactory to the Agent. The Agent shall be
furnished with a duplicate original of each policy required to be provided by
the Borrower hereunder, which policy shall provide that no cancellation,
material change or reduction thereof shall be effective until at least ten (10)
Business Days after receipt by the Agent of written notice thereof. At least ten
(10) Business Days prior to expiration of any policy required to be provided by
the Borrower hereunder, the Borrower shall furnish the Agent (without notice or
demand by the Agent) with a duplicate original of such renewal policy replacing
the policy so expiring; provided, however, if such renewal policy is not yet
available, the Borrower shall provide the Agent with an insurance certificate or
certificates thereof executed by the insurer or its authorized agent evidencing
the insurance maintained under such policy which shall be acceptable to the
Agent on an interim basis until the duplicate original thereof is available. The
Borrower shall furnish the Agent receipts for the payment of premiums on such
insurance policies or other evidence of such payment satisfactory to the Agent.
In the event that the Borrower does not deposit with the Agent a new duplicate
original policy of insurance with evidence of payment of premiums thereon at
least ten (10) Business Days prior to the expiration of any expiring policy,
then the Agent may, but shall not be obligated to, procure such insurance and
pay the premiums therefor, and the Borrower agrees to repay to the Agent the
premiums thereon promptly on demand, together with interest thereon at the rate
per annum which would be applicable to Base Rate Loans under Section 2.7(c) and
the same shall be part of the Obligations.
(d) The Borrower may effect coverage under this Section 5.5 under a
blanket insurance policy satisfactory to the Agent, provided that (i) any such
policy of blanket insurance shall specify therein, or the insurer under such
policy shall certify to the Agent, (A) the maximum amount of the total insurance
afforded by the blanket policy allocated to such Property, and (B) any sublimits
in such blanket policy applicable to such Property, which amounts shall not be
less than the limits required pursuant to the provisions of this Section 5.5;
(ii) any such policy of blanket insurance shall comply in all respects with the
other provisions of this Section 5.5; and (iii) the protection afforded under
any policy of blanket insurance hereunder shall be no less than that which would
have been afforded under a separate policy or policies relating only to such
Property.
(e) The Borrower shall not take out separate insurance concurrent in
form or contributing in the event of loss with the insurance required under this
Section 5.5 unless (i) the policies are submitted to the Agent for its approval;
and (ii) the insurers thereunder and the
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terms thereof are not unreasonably disapproved of by the Agent within 10
Business Days of such submission. The Borrower shall notify the Agent thirty
(30) days before any such separate insurance is taken out and shall furnish the
Agent with duplicate originals of the policy or policies or certificate or
certificates of insurance executed by the insurer or its authorized agent with
respect thereto, in the same manner as provided in subsection (c) of this
Section 5.5 with respect to insurance required to be maintained hereunder.
(f) For purposes of this Section, the term "full replacement value"
shall mean the actual cost of replacing the property in question, exclusive of
the cost of excavations, foundations and footings, as determined from time to
time (but not less often than once every calendar year) by the insurance company
or companies holding such insurance or by an appraiser, engineer, architect or
contractor proposed by the Borrower and approved by said company or companies
and the Agent.
(g) No approval by the Agent of any insurer shall be construed to be a
representation, certification or warranty of its solvency and no approval by the
Agent as to the amount, type and/or form of any insurance shall be construed to
be a representation, certification or warranty of its sufficiency.
5.6 Damage, Destruction, Condemnation. (a) In the event of any damage
to or loss or destruction of any Property, the Borrower shall (i) promptly
notify the Agent of such event and take such steps as shall be necessary to
preserve any undamaged portion of such Property and (ii) if no Event of Default
has occurred and is continuing, at the Borrower's election (subject to the
requirements of clause (b) of this Section 5.6), or if an Event of Default has
occurred and is continuing, at the Agent's election, either (x) commence and
diligently pursue to completion the restoration, replacement and rebuilding of
such Property as nearly as possible to its value, condition and character
immediately prior to such damage, loss or destruction and in accordance with
plans and specifications reasonably approved by the Agent, and apply the Net
Proceeds of any insurance award thereto, or (y) apply the Net Proceeds of any
insurance award to prepay the Loans (without premium or penalty).
(b) In the event that any portion of any Property is so damaged,
destroyed or lost, and such damage, destruction or loss is covered, in whole or
in part, by insurance described in Section 5.5, then, (i) if no Event of Default
has occurred and is continuing and the amount of Net Proceeds received (or
reasonably anticipated by the Borrower to be received) in connection with such
damage, destruction or loss is less than $50,000,000, then the Borrower may
retain such Net Proceeds and, at the Borrower's option, apply such Net Proceeds
to the restoration, replacement or rebuilding, in whole or in part, of the
portion of such Property so damaged, destroyed or lost or to prepayment of the
Loans, provided, however, that the Borrower shall be required to apply such Net
Proceeds to the prepayment of the Loans (x) if the Borrower shall have failed to
commence the restoration, replacement or rebuilding, in whole or in part, of the
portion of such Property so damaged, destroyed or lost within six months
following the receipt of such Net Proceeds or (y) if the Borrower shall cease to
be diligently continuing such restoration, replacement or rebuilding, in the
case of each of (x) and (y), subject to force majeure; or (ii) if no Event of
Default has occurred and is continuing and
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the amount of Net Proceeds received (or reasonably anticipated by the Borrower
to be received) in connection with such damage, destruction or loss is
$50,000,000 or greater, then the Borrower shall cause such Net Proceeds to be
deposited in a segregated account at a bank (which need not be a Lender)
selected by the Borrower, and the Borrower hereby covenants and agrees that such
Net Proceeds shall be withdrawn from such segregated account and applied solely
for the purpose of, and in the amounts necessary to, make required payments in
connection with the restoration, replacement or rebuilding, in whole or in part,
of the portion of such Property so damaged, destroyed or lost or to prepayment
of the Loans, provided, however, that the Borrower shall be required to apply
such Net Proceeds to the prepayment of the Loans (x) if the Borrower shall have
failed to commence the restoration, replacement or rebuilding, in whole or in
part, of the portion of such Property so damaged, destroyed or lost within six
months following the receipt of such Net Proceeds or (y) if the Borrower shall
cease to be diligently continuing such restoration, replacement or rebuilding,
in the case of each of (x) and (y), subject to force majeure.
(c) The Borrower, promptly upon obtaining knowledge of any pending or
threatened institution of any proceedings for the condemnation of any Property,
or any part or interest therein, or of any right of eminent domain, or of any
other proceedings arising out of injury or damage to or decrease in the value of
any Property (including a change in grade of any street), or any part thereof or
interest therein, will notify the Agent of the threat or pendency thereof. The
Borrower shall, at its expense, diligently prosecute any such proceedings. In
the event of any condemnation of any Property or any part or interest therein or
any similar event with respect thereto, if no Event of Default has occurred and
is continuing, at the Borrower's option (subject to the requirements of clause
(d) of this Section 5.6), and if an Event of Default has occurred and is
continuing, at the Agent's option, the Borrower shall either (x) commence and
diligently pursue to completion the replacement of such Property as nearly as
possible to its value, condition and character immediately prior to such
condemnation or similar event in accordance with plans and specifications
reasonably approved by the Agent, and apply the Net Proceeds of any award
thereto, or (y) apply the Net Proceeds of any award received by the Borrower to
prepay the Loans (without premium or penalty).
(d) In the event of any condemnation of any Property or any part or
interest therein or any similar event with respect thereto, then, (i) if no
Event of Default has occurred and is continuing and the amount of Net Proceeds
received (or reasonably anticipated by the Borrower to be received) in
connection with such condemnation or similar event is less than $50,000,000,
then the Borrower may retain such Net Proceeds and, at the Borrower's option,
apply such Net Proceeds to the replacement, in whole or in part, of such
Property or such part thereof so condemned or to prepayment of the Loans,
provided, however, that the Borrower shall be required to apply such Net
Proceeds to the prepayment of the Loans (x) if the Borrower shall have failed to
commence the replacement of such Property or such part thereof so condemned
within six months following the receipt of such Net Proceeds or (y) if the
Borrower shall cease to be diligently continuing such replacement, in the case
of each of (x) and (y), subject to force majeure; or (ii) if no Event of Default
has occurred and is continuing and the amount of Net Proceeds received (or
reasonably anticipated by the Borrower to be
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received) in connection with such condemnation or similar event is $50,000,000
or greater, then the Borrower shall cause such Net Proceeds to be deposited in a
segregated account at a bank (which need not be a Lender) selected by the
Borrower, and the Borrower hereby covenants and agrees that such Net Proceeds
shall be withdrawn from such segregated account and applied solely for the
purpose of, and in the amounts necessary to, make required payments in
connection with the replacement of such Property or such part thereof so
condemned or to prepayment of the Loans, provided, however, that the Borrower
shall be required to apply such Net Proceeds to the prepayment of the Loans (x)
if the Borrower shall have failed to commence the replacement of such Property
or such part thereof so condemned within six months following the receipt of
such Net Proceeds or (y) if the Borrower shall cease to be diligently continuing
such replacement, in the case of each of (x) and (y), subject to force majeure.
(e) Notwithstanding any condemnation, taking or other proceeding
referred to in this Section causing injury to or decrease in value of any
Property (including a change in grade of any street), or any interest therein,
the Borrower shall continue to pay and perform the Obligations as provided
herein. Any reduction in the Obligations resulting from an application of
condemnation proceeds or awards shall be deemed to take effect only on the date
of receipt by the Agent of such proceeds or awards and application against the
Obligations.
5.7 Inspection of Property; Books and Records; Discussions. Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP shall be made of all dealings and transactions in relation
to its business and activities; and permit representatives of the Agent or any
Lender to visit and inspect any of its properties and examine and make abstracts
from any of its books and records upon reasonable notice and during normal
business hours to discuss the business, operations, properties and financial and
other condition of the Borrower with officers of the Borrower and with its
independent certified public accountants.
5.8 Notices. Promptly give notice to the Agent and, in the case of
clauses (a) and (g), to each Lender, of:
(a) the occurrence of any Default or Event of Default;
(b) any event of default under any Contractual Obligation of the
Borrower which, if not cured, could reasonably be expected to have a
Material Adverse Effect;
(c) any Release at least fifteen (15) Business Days prior to the
anticipated date of effectiveness of such Release, any such notice to
include a calculation in reasonable detail of the Release Price with
respect to the Property for which such Release is so requested;
(d) any Restricted Payment to any Investor or other equity holder of
the Borrower at least ten (10) Business Days prior to the anticipated date
of such Restricted Payment, such notice to be accompanied by a certificate
of a Responsible Officer
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setting forth in reasonable detail the calculations showing that such
Restricted Payment is permitted under Section 6.6(a);
(e) (i) any litigation or proceeding affecting the Borrower or any
Property in which the amount involved is $5,000,000 or more and not covered
by insurance or in which injunctive or similar relief is sought, (ii) any
judgment rendered against the Borrower or affecting any Property involving
a liability (to the extent not paid or covered by insurance) of $1,000,000
or more, (iii) any written decisions, dispositions of pleadings, dismissal
or joinder of parties, or other material developments in the action
captioned Charal Investment Co. v. Rockefeller, et al., U.S. District
Court, District of Delaware, Civ. A. No. 96-543 or any other related
litigation or any civil or criminal litigation, proceeding or investigation
arising therefrom or arising from or relating in whole or in part to any
claim that there was an alleged misstatement or omission in the RCPI Proxy
Disclosure (as defined in the Limited Recourse Agreement) and (iv) any
denial of coverage by any insurance company of claims arising out of the
Charal litigation referred to in clause (iii) of this Section 5.8(e) or any
other civil or criminal litigation or proceeding referred to in such clause
(iii);
(f) the following events, as soon as possible and in any event within
30 days after the Borrower knows thereof: (i) the occurrence of any
Reportable Event with respect to any Plan (other than such a Reportable
Event for which the 30-day notice period is waived), a failure to make any
required contribution to a Plan which would give rise to a Lien in favor of
such Plan under Section 302(f) of ERISA, the creation of any Lien in favor
of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC or
the Borrower or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the terminating, Reorganization or
Insolvency of, any Plan; and
(g) any change, development or event which could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto.
5.9 Environmental Laws. (a) Comply with, and use commercial reasonable
efforts to cause compliance by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply in all material respects
with and maintain, and use commercially reasonable efforts to cause all tenants
and subtenants obtain and comply in all material respects with and maintain, any
and all licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly
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comply in all material respects with all lawful orders and directives of all
Governmental Authorities regarding Environmental Laws.
5.10 Property Manager. Cause the Properties to be managed at all times
pursuant to the Management and Leasing Agreement, dated as of July 10, 1996,
between Borrower and Tishman (as amended, supplemented or otherwise modified in
accordance with Section 6.9, the "Property Management Agreement"), provided
that, upon the prior written request of the Borrower received by the Agent at
least 30 days prior to the requested resignation or removal of the incumbent
Property Manager, the Property Manager may resign or be removed if such Property
Manager is immediately thereupon replaced by another Person reasonably
acceptable to the Agent. Upon such replacement as provided herein and the
assumption by such Person of the obligations of the Property Manager under the
Property Management Agreement, such Person shall be deemed the Property Manager
for all purposes of this Agreement.
5.11 Condominium Documents; Expense Sharing Agreement. Comply with the
Condominium Documents and Expense Sharing Agreement in all material respects.
5.12 Asbestos. With respect to any friable asbestos or substance
containing asbestos currently present in the any Property, the Borrower, at the
Borrower's expense, shall promptly comply with and shall use commercially
reasonable efforts to cause all tenants of each Property to comply with all
present and future applicable federal, state or local laws, rules, regulations
or orders relating to asbestos, friable asbestos and asbestos containing
materials, or to the continued presence at such Property or the removal from
such Property and disposal of such asbestos, friable asbestos and asbestos
containing materials. In the event any asbestos, friable asbestos or asbestos
containing material is discovered at any Property, the Borrower shall obtain a
comprehensive asbestos report prepared by a licensed engineer or asbestos
consultant acceptable to the Agent describing the form, extent, location and
condition of such asbestos and recommending methods of removal or abatement. The
Borrower shall promptly comply at its sole cost and expense with the
recommendations contained in such report, such compliance to be performed in
accordance with all applicable federal, state and local laws, statutes, rules
and regulations. The Borrower shall indemnify the Agent and each Lender and hold
harmless the Agent and each Lender from and against all loss, cost, damage and
expense (including, without limitation, attorneys' fees and costs incurred in
the investigation, defense and settlement of claims) that the Agent or any
Lender may incur as a result of or in connection with the assertion against the
Agent or any Lender of any claim relating to the presence or removal of any
asbestos substance referred to in this section, or compliance with any federal,
state or local laws, rules, regulations or orders relating thereto, excepting
only those arising out of the Agent's or the Lenders' gross or willful
negligence or any action taken following assumption of control over the property
by the Agent or the Lenders other than in response to a pre-existing violation
of Environmental Laws. The obligations and liabilities of the Borrower under
this Section 5.12 shall survive full payment of the Loans and all other amounts
payable hereunder.
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5.13 Estoppel Certificates. For a period of 120 days following the
Closing Date, diligently seek to obtain any estoppel certificates with respect
to any Scheduled Leases described in Section 4.1(s)(ii) as to which estoppel
certificates were not delivered to the Agent on the Closing Date.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as any of the Commitments
remain in effect or any amount is owing to any Lender or the Agent hereunder or
under any other Loan Document, the Borrower shall not, directly or indirectly:
6.1 Limitation on Indebtedness and Hedging Obligations. Create, incur,
assume or suffer to exist any Indebtedness or Hedging Obligations, except:
(a) Indebtedness of the Borrower under this Agreement;
(b) the 14% Debentures outstanding on the date hereof;
(c) the Zeros outstanding on the date hereof;
(d) Indebtedness of the Borrower and any of its Subsidiaries incurred
to finance the acquisition of fixed or capital assets (whether pursuant to
a loan, a Financing Lease or otherwise) in an aggregate principal amount
not exceeding as to the Borrower and its Subsidiaries $5,000,000 at any
time outstanding, provided, however, that in no event shall the amount of
Indebtedness permitted pursuant to this Section 6.1(d), together with the
aggregate amount of Indebtedness permitted by Section 6.1(g) and 6.1(h),
exceed $25,000,000;
(e) Indebtedness and Hedging Obligations outstanding on the date
hereof and listed on Schedule 6.1;
(f) the Hedging Obligations under the agreement required pursuant to
Section 4.1(r);
(g) current trade liabilities incurred in the ordinary course of
business or in connection with tenant improvements or capital expenditures
and payable in accordance with customary terms, in an aggregate amount,
together with the aggregate principal amount of Indebtedness permitted
pursuant to Sections 6.1(d) and 6.1(h), not to exceed $25,000,000 at any
one time outstanding; and
(h) additional Indebtedness of the Borrower in an aggregate principal
amount at any time outstanding not to exceed $1,000,000, provided, however,
that in no event shall the additional Indebtedness permitted pursuant to
this Section 6.1(h), together with the aggregate amount of Indebtedness
permitted pursuant to Sections 6.1(d) and 6.1(g), exceed $25,000,000.
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6.2 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet delinquent or which have been bonded and
are being contested in good faith by appropriate proceedings;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are
not overdue for a period of more than 10 days or which have been bonded, if
required, and are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(e) Permitted Encumbrances;
(f) other easements, rights-of-way, restrictions, defects or
irregularities in title and other similar title matters not, in any
material respect, interfering with the operation, use or value of any
Property; and
(g) other non-consensual Liens filed against the Properties which
aggregate not more than $5,000,000 unless such Liens are discharged of
record by the posting of a bond pursuant to requisite court proceedings or
by payment within 45 days.
6.3 Limitation on Guarantee Obligations. Create, incur, assume or
suffer to exist any Guarantee Obligation except Guarantee Obligations in
existence on the date hereof and listed on Schedule 6.3.
6.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business.
6.5 Limitation on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, including any disposition by way of any
arrangement with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or
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rental obligations of the Borrower or such Subsidiary, or, in the case of any
Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock to any
Person other than the Borrower or any wholly owned Subsidiary of the Borrower,
except:
(a) the Release of any Property or portion thereof (other than the Air
Rights) so long as either:
(i) (A) the Release Price of such Property or portion thereof is
paid to the Agent in cash for the benefit of the Lenders concurrently
with such Release, such Release Price to be applied as a prepayment of
the Loans and a reduction of the Commitments pursuant to Section
2.11(a), (B) no Default under Section 7(a) or Event of Default has
occurred and is continuing or would result therefrom, and (C)
concurrently with such Release the Borrower prepays Loans and/or
prepays, redeems or repurchases Zeros, in an aggregate amount so that,
immediately after giving effect to such Release, the prepayment of the
Loans required in connection therewith pursuant to Section 2.11(a) and
such prepayment, redemption or repurchase of Loans and Zeros, the Debt
to Value Ratio shall be equal to or less than 65%, or
(ii) (A) such Property (or portion thereof) is sold for a net
sale price not less than the minimum net sale price (or ratable
portion thereof, in the case of a Release of a portion of a Property)
for such Property specified on Schedule 1.1(a), (B) not less than 30%
of the Net Proceeds from the sale of such Property or portion thereof
is paid to the Agent in cash for the benefit of the Lenders
concurrently with such Release, such amount of Net Proceeds to be
applied as a prepayment of the Loans and a reduction of the
Commitments pursuant to Section 2.11(a), (C) no Default under Section
7(a) or Event of Default has occurred and is continuing or would
result therefrom, and (D) concurrently with such Release the Borrower
prepays Loans and/or prepays, redeems or repurchases Zeros, in an
aggregate amount so that, immediately after giving effect to such
Release, the prepayment of the Loans required in connection therewith
pursuant to Section 2.11(a) and such prepayment, redemption or
repurchase of Loans and Zeros, the Debt to Value Ratio shall be equal
to or less than 72.5%, provided, that in the event that the Loans
outstanding immediately prior to the prepayment required pursuant to
subclause (B) of this Section 6.5(a)(ii) would be paid in full and the
Commitments would be terminated as a result of such prepayment, then,
so long as the Loans are so repaid in full and the Commitments are so
terminated, the Borrower shall not be required to make prepayments,
redemptions or repurchases pursuant to this Section 6.5(a)(ii) in an
aggregate amount in excess of the amount required to repay the Loans
in full;
(b) the sale or other disposition of obsolete or worn out property
(other than any Property) in the ordinary course of business;
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(c) leases of space pursuant to tenant leases which are not in
economic substance financing or disposition transactions;
(d) the sale of inventory in the ordinary course of business; and
(e) the sale or other disposition of the Air Rights so long as the
Borrower shall concurrently make the prepayment required by Section
2.11(a)(ii).
6.6 Limitation on Restricted Payments. Declare or pay any dividend or
other distributions on, or make any payment on account of, or set apart assets
for a sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares or other interests of any class
of Capital Stock of the Borrower or any warrants or options to purchase any such
Capital Stock, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the Borrower or any Subsidiary (such
declarations, payments, setting apart, purchases, redemptions, defeasances,
retirements, acquisitions and distributions being herein called "Restricted
Payments"), except that:
(a) prior to December 31, 1997, the Borrower may distribute up to
$44,107,504 to RCPI and the LLC, for further ultimate distribution to the
Investors, provided that no such distributions shall be permitted if,
either before or after giving effect to such distribution, any Default
under Section 7(a) or any Event of Default is or will be continuing;
(b) at any time after December 31, 1997, the Borrower may make
additional distributions to RCPI (or, after the merger of RCPI with and
into Holdings, Holdings) and the LLC, so long as:
(i) the Debt Service Coverage Ratio for the Test Period most
recently ended prior to the time of such distribution was not less
than 1.40 to 1,
(ii) the cumulative amount of all Restricted Payments made by the
Borrower from and including January 1, 1998 to the date of
determination would not, after giving effect to any such additional
distribution, exceed the Net Cash Flow after Debt Service for the
period from January 1, 1998 to such date of determination (taken as a
single accounting period) plus any capital contributions made to the
Borrower during such period (other than capital contributions the
proceeds of which were used to pay interest on the 14% Debentures),
and
(iii) both before and after giving effect to such distribution,
no Default under Section 7(a) nor any Event of Default shall have
occurred and be continuing; and
(c) the Borrower may make distributions of Net Proceeds of any
Release provided that (i) the Borrower shall have made all prepayments
required to be
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made pursuant to Section 2.11 in respect of such Release, and (ii) both
before and after giving effect to such distribution, no Default under
Section 7(a) nor any Event of Default shall have occurred and be
continuing.
6.7 Limitation on Capital Expenditures. (a) Make or commit to make (by
way of the acquisition of securities of a Person or otherwise) any expenditure
in respect of the purchase or other acquisition of fixed or capital assets
(excluding any such asset acquired in connection with normal replacement and
maintenance programs properly charged to current operations) except for
expenditures not exceeding (without duplication of commitments to make such
expenditures included in any prior year), during the Borrower's fiscal year
ended December 31, 1997, $36,240,000, and during any subsequent fiscal year of
the Borrower, 125% of the amount set forth in the Capital Budget for such fiscal
year; or
(b) fail to make capital expenditures (other than any tenant
improvements or leasing commissions) during each period commencing January 1,
1997 and ending on the days set forth below in an aggregate amount of at least
the amount set forth opposite such day below:
Day Amount
----------------------- ---------------
December 31, 1997 $14,000,000
December 31, 1998 $34,000,000
December 31, 1999 $50,000,000
provided, however, that each of the amounts set forth in the foregoing table
shall be reduced by an amount equal to the amount so set forth in such table
multiplied by the sum of the percentages set forth opposite each of the
Properties or portions of Properties listed in Schedule 1.1(b) which have been
Released prior to the date set forth opposite such amount in the foregoing
table.
6.8 Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of or any assets constituting a
business unit of, or make any other investment in, any Person, except:
(a) loans to tenants pursuant to new Leases with such tenants, the
proceeds of which loans are to be used solely in connection with the
improvement or occupancy by such tenants of the space leased under such
Leases;
(b) extensions of trade credit in the ordinary course of business in
an aggregate amount not to exceed $3,000,000 at any one time outstanding;
and
(c) investments in Cash Equivalents.
6.9 Limitation on Optional Payments and Modifications of Agreements.
(a) Make any optional payment or prepayment on or redemption or purchase of any
14% Debentures, Zeros or any Indebtedness or Hedging Obligations listed on
Schedule 6.1, except that the Borrower may repurchase Zeros and may repay
Indebtedness and Hedging Obligations
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listed on Schedule 6.1, provided that (A) all Zeros so purchased shall be
immediately retired and (B) immediately prior to and after giving effect to any
such purchase or repayment, no Default under Section 7(a) nor any Event of
Default shall have occurred and be continuing; (b) amend, modify or change, or
consent or agree to any amendment, modification or change to any of the terms of
the 14% Debentures, the Zeros or any Indebtedness or Hedging Obligations listed
on Schedule 6.1, or any instrument, agreement or other document governing or
evidencing the same (other than any such amendment, modification or change which
would extend the maturity or reduce the amount of any payment of principal
thereof or which would reduce the rate or extend the date for payment of
interest thereon, and other modifications not materially adverse to the Agent or
the Lenders); (c) amend, modify or change the Property Management Agreement in
any respect which would be materially disadvantageous to the Borrower or the
Lenders; (d) amend, modify or change any Condominium Document in any respect
which would cause the Condominium Documents to be materially more restrictive to
the Borrower or impose any material additional obligations on the Borrower; or
(e) amend, modify or change, or consent to any amendment, modification or change
to, any Major Space Lease or Major Retail Lease (except amendments or
modifications which would increase any rent, eliminate any free or reduced rent
provision, or which would not otherwise be materially adverse to the interests
of the Agent and the Lenders) unless such amendment (or a substantially final
draft thereof) has been submitted to the Agent, together with a written summary
of the economic terms thereof, and the Agent has not disapproved of such
amendment in writing within ten days of such submission.
6.10 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement and (b) upon
fair and reasonable terms no less favorable to the Borrower than it would obtain
in a comparable arm's length transaction with a Person which is not an
Affiliate, provided that, notwithstanding the foregoing, the transactions listed
on Schedule 6.10 shall not be prohibited by this Section 6.10.
6.11 Limitation on Changes in Fiscal Year. Permit the fiscal year of
the Borrower to end on a day other than December 31.
6.12 Limitation on Negative Pledge Clauses. Enter into with any Person
any agreement, other than (a) this Agreement, (b) the 14% Debentures Purchase
Agreement, (c) the Zeros Indenture, and (d) any industrial revenue bonds,
purchase money mortgages or Financing Leases permitted by this Agreement (in
which cases, any prohibition or limitation shall only be effective against the
assets financed thereby), which prohibits or limits the ability of the Borrower
to create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired.
6.13 Limitation on Lines of Business. Enter into any business, either
directly or through any Subsidiary, except for those businesses in which the
Borrower is engaged on the date of this Agreement and businesses reasonably
related thereto.
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6.14 Governing Documents. Amend its trust agreement or other Governing
Documents in any material respect which would be adverse to the Agent or the
Lenders, without the prior written consent of the Required Lenders, which shall
not be unreasonably withheld or delayed.
6.15 Limitation on Subsidiary Formation. Form any Subsidiaries, unless
(a) the Borrower shall have given the Agent and the Lenders not less than ten
Business Days' notice of such proposed formation, (b) all of the Capital Stock
of such Subsidiary is directly owned by the Borrower and (c) simultaneously with
the formation of such Subsidiary, this Agreement and the other Loan Documents
are amended in a manner satisfactory to the Agent to provide that such
Subsidiary becomes a joint obligor with the Borrower with respect to all
Obligations.
6.16 Limitation on Securities Issuances. Issue or permit any
Subsidiary to issue any additional equity interests except to the Borrower.
6.17 Asbestos. Install or permit to be installed in any Property,
friable asbestos or any substance containing asbestos.
6.18 Alterations, Maintenance, Repairs, Waste. (a) Commit any waste on
any Property or (b) substantially alter or demolish or remove all or any
material portion of the improvements or personal property on the Properties, or
erect any material additions to the existing improvements or other structures on
the Properties, which, in the aggregate and after giving effect to such
demolition or removal and the completion of any improvements scheduled to be
made in connection with such demolition or removal, will materially diminish the
fair market value thereof or materially increase any ordinary fire or other
hazard arising out of construction or operation.
6.19 Limitations on Leasing. (a) Enter into any Major Space Lease or
Major Retail Lease that is not a Permitted Major Space Lease or Permitted Major
Retail Lease;
(b) lease all or any part of Property, other than for actual occupancy
by the tenant thereunder; or
(c) assign the whole or any part of any Major Space Lease or Major
Retail Lease or the rents thereunder.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan when due
in accordance with the terms thereof or hereof; or the Borrower shall fail
to pay any interest on any Loan or any other amount payable hereunder or
under the other Loan
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Documents or the Fee Letter, within five days after any such interest or
other amount becomes due in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by the Borrower
herein or in any other Loan Document or which is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been incorrect in any material respect on or
as of the date made or deemed made; or
(c) The Borrower shall default in the observance or performance of any
agreement contained in Section 5.2(g) or (h) or Section 6 other than
Section 6.1(d) and (g) and Section 6.10; or
(d) The Borrower shall default in the observance or performance of any
agreement contained in Section 6.1(d) or (g) and such default shall
continue unremedied for a period of ten days, or the Borrower shall default
in the observance or performance of any agreement contained in Section 6.10
and such default shall continue unremedied for a period of five days after
notice from the Agent (which notice has not been rescinded or withdrawn);
or
(e) The Borrower shall default in the observance or performance of any
other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (d) of this Section), and
such default shall continue unremedied for a period of 30 days after notice
of such default is given by the Agent to the Borrower or, if such default
is not reasonably amenable to cure within such 30 days and the Borrower is
at all times diligently pursuing the cure thereof, such default shall
continue unremedied for a period of 90 days after notice of such default is
given by the Agent to the Borrower; or
(f) (i) Any "Event of Default" as defined in the 14% Debentures
Purchase Agreement or any "Event of Default" as defined in the Zeros
Indenture shall occur, or (ii) any of the subordination provisions set
forth in the Intercreditor Agreement shall be or become unenforceable, or
any party to the Intercreditor Agreement (other than the Agent) shall so
assert in writing (other than an assertion that such subordination
provisions are or have become unenforceable as a result of a breach by the
Agent of its obligations under the Intercreditor Agreement); or
(g) The Borrower shall (i) default in any payment of principal of or
interest of any Indebtedness (other than the Loans) or in the payment of
any Guarantee Obligation or Hedging Obligation, beyond the period of grace
(not to exceed 30 days), if any, provided in the instrument or agreement
under which such Indebtedness or Guarantee Obligation or Hedging Obligation
was created, if the aggregate amount of the Indebtedness and/or Guarantee
Obligations and/or termination or liquidation or similar payments with
respect to the Hedging Obligations in respect of which such default or
defaults shall have occurred is at least $10,000,000; or (ii) default,
after the giving of notice if required and the lapse of any mandatory grace
period, in the
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observance or performance of any other agreement or condition relating to
any such Indebtedness or Guarantee Obligation or Hedging Obligation or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of
which default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness or Hedging Obligations or
beneficiary or beneficiaries of such Guarantee Obligation (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries)
to cause, such Indebtedness to become due prior to its stated maturity or
such Guarantee Obligation to become payable or any liquidation or
termination payment or payments in respect of such Hedging Obligations to
become due; or
(h) (i) The Borrower or the Property Manager shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets, or the Borrower or the Property Manager shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Borrower or the Property Manager any case, proceeding
or other action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a
period of 60 days; or (iii) there shall be commenced against the Borrower
or the Property Manager any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results in
the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days from
the entry thereof; or (iv) the Borrower or the Property Manager shall take
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) the Borrower or the Property Manager shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due, and, in the case of any of the foregoing events
relating to the Property Manager, the Property Manager has not be replaced
with a new Property Manager acceptable to the Agent within 30 days; or
(i) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or
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appointment of a trustee is likely to result in the termination of such
Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower or any
Commonly Controlled Entity shall incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with respect
to a Plan; and in each case in clauses (i) through (vi) above, such event
or condition, together with all other such events or conditions, if any,
could reasonably be expected to have a Material Adverse Effect; or
(j) Except as described in Section 7(n), one or more settlements,
judgments or decrees shall be entered against the Borrower involving in the
aggregate a liability (but only to the extent not paid or covered by
insurance) of $5,000,000 or more, and all such settlements, judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending
appeal, or paid or otherwise satisfied, within 60 days from the entry
thereof; or
(k) (i) RCPI (or, after the merger of RCPI with and into Holdings,
Holdings) and the LLC shall cease to own, beneficially and of record, 100%
of the equity ownership of the Borrower, or (ii) prior to the merger of
RCPI with and into Holdings, Holdings shall cease to own, beneficially and
of record, 100% of the common equity ownership of RCPI, or (iii) one or
more of the Investors, and/or one or more other wholly-owned Subsidiaries
of any Key Principals, taken as a whole, cease to own, beneficially and of
record, 100% of the common equity ownership of Holdings and the equity
ownership of the LLC, or (iv) WHRC II Real Estate Limited Partnership, a
Delaware limited partnership, and Rockprop, L.L.C., a Delaware limited
liability company, shall collectively cease to own, beneficially and of
record, at least 50% of the common equity ownership of Holdings and the
equity ownership of the LLC, or (v) any of the Key Principals shall cease
to own, beneficially and of record, at least the same percentage equity
ownership of the Investors as such Key Principal owned on the date hereof,
except that any Key Principal, other than Whitehall Street Real Estate
Limited Partnership V and, so long as Tishman remains Property Manager,
Tishman Speyer Crown Equities, may transfer any or all of its ownership
interest in the Investors to another Key Principal or, so long as such Key
Principal expressly agrees to remain liable under the Limited Recourse
Agreement to the same extent as provided on the Closing Date, to any other
Person; provided that, the parties hereto agree that nothing in this
Section 7(k) is intended to restrict or limit any transfer of any ownership
interest in any Key Principal; or
(l) Whitehall shall at any time prior to May 16, 1998 fail to maintain
an economic interest in the 14% Debentures such that if 14% Debentures in
an aggregate principal amount of $75,000,000 are not repaid in full, then
Whitehall would be subject to the same risk of loss, and would suffer the
economic effect of such nonpayment, to the same extent as if Whitehall
owned the 14% Debentures directly; or
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(m) the aggregate net worth of the Key Principals shall be less than
$300,000,000, or the Key Principals shall have failed to deliver to the
Agent one or more true and accurate Key Principal Net Worth Letters (as
defined in the Limited Recourse Agreement) as required by the Limited
Recourse Agreement demonstrating an aggregate net worth of the Key
Principals of at least $300,000,000; or
(n) (i) one or more settlements, judgments or decrees shall be entered
against or entered into by any Key Principal or any other Person (including
without limitation any present or former director or officer of RCPI,
Holdings or any predecessor) with respect to which the Borrower has an
indemnification obligation, involving in the aggregate a liability (but
only to the extent not paid by insurance, or covered by insurance with
respect to which the insurance company has acknowledged coverage) of
$15,000,000 or more, and all such settlements, judgments or decrees have
not been vacated, discharged, stayed or bonded pending appeal or paid or
otherwise satisfied within 60 days from the entry thereof, or (ii) any
settlement, judgment or decree shall be entered against or entered into by
any of the Borrower, RCPI, the LLC or Holdings in the Charal litigation
referred to in Section 5.8(e)(iii) or any civil or criminal litigation,
proceeding or investigation arising from or relating in whole or in part to
any claim that there was an alleged material misstatement or omission in
the RCPI Proxy Disclosure (as defined in the Limited Recourse Agreement),
involving in the aggregate a liability (but only to the extent not paid by
insurance, or covered by insurance with respect to which the insurance
company has acknowledged coverage) of $15,000,000 or more, which
settlement, judgment or decree shall not have been vacated, discharged,
stayed or bonded pending appeal, or paid or otherwise satisfied, within
five Business Days from the entry thereof;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (h) of this Section with respect to the
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement shall immediately become due and payable, and (B) if such
event is any other Event of Default, either or both of the following actions may
be taken: (i) with the consent of the Required Lenders, the Agent may, or upon
the request of the Required Lenders, the Agent shall, by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) with the consent of the Required Lenders,
the Agent may, or upon the request of the Required Lenders, the Agent shall, by
notice to the Borrower, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement to be due and payable
forthwith, whereupon the same shall immediately become due and payable. Except
as expressly provided above in this Section, presentment, demand, protest and
all other notices of any kind are hereby expressly waived.
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SECTION 8. THE AGENT
8.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes the Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
8.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
8.3 Exculpatory Provisions. Neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or any other Loan Document (except
for its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agent under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or for any failure
of the Borrower to perform its obligations hereunder or thereunder. The Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Borrower.
8.4 Reliance by Agent. The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower or any other Loan Party),
independent accountants and other experts selected by the Agent. The Agent may
deem and treat the payee of any Note as the owner thereof for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Agent. The Agent
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shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement and the other Loan Documents
in accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Loans.
8.5 Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder unless
the Agent has received notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Agent receives such a
notice, the Agent shall give notice thereof to the Lenders. The Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that unless and until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
8.6 Non-Reliance on Agent and Other Lenders. Each Lender expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Agent hereinafter taken, including
any review of the affairs of the Borrower or any other Loan Party, shall be
deemed to constitute any representation or warranty by the Agent to any Lender.
Each Lender represents to the Agent that it has, independently and without
reliance upon the Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and the other Loan Parties and
made its own decision to make its Loans hereunder and enter into this Agreement.
Each Lender also represents that it will, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Agent hereunder or under the other Loan Documents, the Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the Borrower or any
other Loan Party which may come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
8.7 Indemnification. The Lenders agree to indemnify the Agent and the
Arranger in their respective capacities as such (to the extent not reimbursed by
the Borrower
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and without limiting the obligation of the Borrower to do so), ratably according
to their respective Credit Exposure Percentages in effect on the date on which
indemnification is sought, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against the Agent or the Arranger in any
way relating to or arising out of, the Commitments, this Agreement, any of the
other Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Agent or the Arranger under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Agent's or the Arranger's gross negligence or willful misconduct. The agreements
in this Section shall survive the payment of the Loans and all other amounts
payable hereunder.
8.8 Agent in Its Individual Capacity. The Agent and its Affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with the Borrower and the other Loan Parties as though the Agent were not the
Agent hereunder and under the other Loan Documents. With respect to the Loans
made by it, the Agent shall have the same rights and powers under this Agreement
and the other Loan Documents as any Lender and may exercise the same as though
it were not the Agent, and the terms "Lender" and "Lenders" shall include the
Agent in its individual capacity.
8.9 Successor Agent. The Agent may resign as Agent upon 10 days'
notice to the Lenders. If the Agent shall resign as Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent shall be
approved by the Borrower, whereupon such successor agent shall succeed to the
rights, powers and duties of the Agent, and the term "Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Agent's rights, powers and duties as Agent shall be terminated, without any
other or further act or deed on the part of such former Agent or any of the
parties to this Agreement or any holders of the Loans. After any retiring
Agent's resignation as Agent, the provisions of this Section 8 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement and the other Loan Documents.
8.10 Dealings with Agent. Except as otherwise expressly provided
herein, in connection with any matter consented to, approved or waived by the
Lenders or to be consented to, approved or waived by the Lenders, as between the
Borrower, on the one hand, and the Lenders and the Agent, on the other hand, the
Borrower shall be entitled to rely upon the Agent's approval or consent.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement nor any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except
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in accordance with the provisions of this Section 9.1. The Required Lenders may,
or, with the written consent of the Required Lenders, the Agent may, from time
to time, (a) enter into with the Borrower written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Borrower hereunder or thereunder or
(b) waive, on such terms and conditions as the Required Lenders or the Agent, as
the case may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) reduce the amount or extend the scheduled
date of maturity of any Loan or of any installment thereof, or reduce the stated
rate of any interest or fee payable hereunder or extend the scheduled date of
any payment thereof or increase the aggregate amount or extend the expiration
date of any Lender's Commitment, in each case without the consent of each Lender
affected thereby, or (ii) amend, modify or waive any provision of this Section
9.1 or reduce the percentage specified in the definition of Required Lenders or
Majority Lenders, or consent to the assignment or transfer by the Borrower of
any of its rights and obligations under this Agreement and the other Loan
Documents or release any collateral for the Obligations or any Recourse Party
from its obligations under the Limited Recourse Agreement, in each case without
the written consent of all the Lenders, or (iii) amend, modify or waive any
provision of Section 8 without the written consent of the then Agent. Any such
waiver and any such amendment, supplement or modification shall apply equally to
each of the Lenders and shall be binding upon the Borrower, the Lenders, the
Agent and all future holders of the Loans. In the case of any waiver, the
Borrower, the Lenders and the Agent shall be restored to their former positions
and rights hereunder and under the other Loan Documents, and any Default or
Event of Default waived shall be deemed to be cured and not continuing; but no
such waiver shall extend to any subsequent or other Default or Event of Default
or impair any right consequent thereon.
9.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three days after being
deposited in the mails, postage prepaid, (c) in the case of delivery by
overnight courier, one Business Day after being delivered to a nationally
recognized overnight courier service, with shipping charges paid for delivery on
the next Business Day, or (d) in the case of delivery by facsimile transmission,
when sent and receipt has been electronically confirmed, addressed as follows in
the case of the Borrower and the Agent, and as set forth in Schedule I in the
case of the other parties hereto, or to such other address as may be hereafter
notified by the respective parties hereto:
The Borrower: RCPI Trust
c/o Tishman Speyer Properties L.P.
520 Madison Avenue
New York, New York 10022
Attention: Mr. Jerry Speyer
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Telephone: 212-715-0310
Fax: 212-319-1745
with copies to:
Whitehall Street Real Estate Limited Partnership V
85 Broad Street
New York, New York 10004
Attention: Chief Financial Officer
Telephone: 212-902-3171
Facsimile: 212-357-5505;
and
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Gary Israel, Esq.
Telephone: 212-558-4005
Facsimile: 212-558-3588
The Agent: NationsBank of Texas, N.A.
901 Main Street, TXI-492-51-01
Dallas, Texas 75202
Attention: Ms. Carolyn Mason
Telephone: 214-508-9338
Facsimile: 214-508-1571
with copies to:
NationsBank, N.A.
100 North Tryon Street, 11th Floor
Charlotte, North Carolina 28255
Attention: Mr. Thomas K. Sittema
Telephone: 704-386-0637
Facsimile: 704-388-9408
and
Cadwalader, Wickersham & Taft
201 South College Street, Suite 1510
Charlotte, North Carolina 28211
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Attention: Steven N. Cohen, Esq.
Telephone: 704-348-5100
Facsimile: 704-348-5200
provided that any notice, request or demand to or upon the Agent pursuant to
Section 2.3, 2.5, 2.6 or 2.10, or from the Lenders pursuant to Section 2.13(b),
shall not be effective until received.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Agent or any Lender, any right, remedy,
power or privilege hereunder or under the other Loan Documents shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
9.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.
9.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Agent and the Arranger, and each Lender (but limited, with respect
to the Lenders pursuant to this Section 9.5(a) (but not the Agent or Arranger),
to an aggregate amount not to exceed the lesser of $10,000 per Lender and
$50,000) for all their out-of-pocket costs and expenses incurred in connection
with the development, preparation and execution of, and any amendment,
supplement or modification to, this Agreement and the other Loan Documents and
any other documents prepared in connection herewith or therewith, and the
consummation and (except with respect to the Lenders) the administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of Cadwalader, Wickersham & Taft, special
counsel to the Agent, (b) to pay or reimburse each Lender and the Agent for all
its costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including, without limitation, the fees and
disbursements of counsel to each Lender and of counsel to the Agent, (c) to pay,
indemnify, and hold each Lender and the Agent harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other taxes, if any, which
may be payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Loan Documents and
any such other documents, and (d) to pay, indemnify, and hold each Lender, the
Agent and the Arranger harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
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execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents, or the use of the proceeds of the Loans and
any such other documents, including, without limitation, any of the foregoing
relating to the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of the Borrower, any of its
Subsidiaries, or any of the Properties (all the foregoing in this clause (d),
collectively, the "indemnified liabilities"), provided, that the Borrower shall
have no obligation hereunder to the Agent, Arranger or any Lender with respect
to indemnified liabilities arising from (i) the gross negligence or willful
misconduct of the Agent or any such Lender or (ii) legal proceedings commenced
against the Agent or any such Lender by any security holder or creditor thereof
arising out of and based upon rights afforded any such security holder or
creditor solely in its capacity as such. The agreements in this Section shall
survive repayment of the Loans and all other amounts payable hereunder.
9.6 Successors and Assigns; Participations and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Agent and their respective successors and assigns, except that the
Borrower may not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or more
banks or other entities ("Participants") participating interests in any Loan
owing to such Lender, any Commitment of such Lender or any other interest of
such Lender hereunder and under the other Loan Documents. In the event of any
such sale by a Lender of a participating interest to a Participant, such
Lender's obligations under this Agreement to the other parties to this Agreement
shall remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Loan for
all purposes under this Agreement and the other Loan Documents, and the Borrower
and the Agent shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
the other Loan Documents. The Borrower agrees that if amounts outstanding under
this Agreement are due or unpaid, or shall have been declared or shall have
become due and payable upon the occurrence of an Event of Default, each
Participant shall, to the maximum extent permitted by applicable law, be deemed
to have the right of setoff in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement, provided that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 9.7(a) as fully as if it were a Lender
hereunder. The Borrower also agrees that each Participant shall be entitled to
the benefits of Sections 2.16, 2.17 and 2.18 with respect to its participation
in the Commitments and the Loans outstanding from time to time as if it was a
Lender; provided that, in the case of Section 2.17, such Participant shall have
complied with the requirements of said Section and provided, further, that no
Participant shall be entitled to receive any greater amount pursuant to any such
Section than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred.
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(c) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time and from time to
time assign to any Lender or to an additional bank or financial institution or
entity which is an Eligible Assignee or, with the consent of the Agent (in its
sole discretion) and the Borrower (which consent of the Borrower shall not be
unreasonably withheld, delayed or conditioned), to an additional bank or
financial institution or entity which is not a Lender or an Eligible Assignee
(such assignee Lender, Eligible Assignee or other financial institution or
entity, an "Assignee") all or any part of its rights and obligations under this
Agreement and the other Loan Documents pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit E, with appropriate completions (an
"Assignment and Acceptance"), executed by such Assignee, such assigning Lender
(and, in the case of an Assignee that is not then a Lender, by the Agent) and
delivered to the Agent for its acceptance and recording in the Register,
provided that, in the case of any such assignment to an additional bank or
financial institution, the sum of the aggregate principal amount of the Loans
and Available Commitment being assigned shall be at least $10,000,000 or, if
less, all of the rights and obligations of the assigning Lender. Upon such
execution, delivery, acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with Commitments as set forth therein, and (y) the assigning Lender thereunder
shall, to the extent provided in such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such assigning Lender shall cease to be a
party hereto). Notwithstanding any provision of this paragraph (c) and paragraph
(e) of this Section, the consent of the Borrower shall not be required, and,
unless requested by the Assignee and/or the assigning Lender, new Notes shall
not be required to be executed and delivered by the Borrower, for any assignment
which occurs at any time when any of the events described in Section 7(g) with
respect to the Borrower shall have occurred and be continuing.
(d) The Agent, on behalf of the Borrower, shall maintain at the
address of the Agent referred to in Section 9.2 a copy of each Assignment and
Acceptance delivered to it and a register (the "Register") for the recordation
of the names and addresses of the Lenders and the Commitments of, and principal
amounts of the Loans owing to, each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Agent and the Lenders may (and, in the case of any Loan or other
obligation hereunder not evidenced by a Note, shall) treat each Person whose
name is recorded in the Register as the owner of a Loan or other obligation
hereunder as the owner thereof for all purposes of this Agreement and the other
Loan Documents, notwithstanding any notice to the contrary. Any assignment of
any Loan or other obligation hereunder not evidenced by a Note shall be
effective only upon appropriate entries with respect thereto being made in the
Register. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
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<PAGE>
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender, by the Agent) together with payment to the Agent of a
registration and processing fee of $3,500, the Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto record the information contained therein in the Register and
give notice of such acceptance and recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any Participant
or Assignee (each, a "Transferee") and any prospective Transferee, subject to
the provisions of Section 9.15, any and all financial information in such
Lender's possession concerning the Borrower and its Affiliates which has been
delivered to such Lender by or on behalf of the Borrower pursuant to this
Agreement or which has been delivered to such Lender by or on behalf of the
Borrower in connection with such Lender's credit evaluation of the Borrower and
its Affiliates prior to becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this Section concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law.
(h) Notwithstanding anything to the contrary set forth in this Section
9.6, no assignment under Section 9.6(c) shall be permitted unless, immediately
after giving effect to such assignment, NationsBank of Texas, N.A.'s Commitment
and Loans shall be not less than 20% of the aggregate Commitments and Loans of
all of the Lenders.
9.7 Adjustments; Set-off. (a) If any Lender (a "benefited Lender")
shall at any time receive any payment of all or part of its Loans, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 7(g), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Loans, or interest thereon, such benefited Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loan, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such benefited Lender to share the excess payment or benefits
of such collateral or proceeds ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. The Borrower agrees that each Lender so
purchasing a portion of another Lender's Loan may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such portion
as fully as if such Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to the Borrower, any
such notice being
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expressly waived by the Borrower to the extent permitted by applicable law, upon
any amount becoming due and payable by the Borrower hereunder (whether at the
stated maturity, by acceleration or otherwise), but after compliance with any
applicable notice provisions and after expiration of any applicable grace
periods, to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender agrees
promptly to notify the Borrower and the Agent after any such set-off and
application made by such Lender, provided that the failure to give such notice
shall not affect the validity of such set-off and application.
9.8 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
facsimile transmission of signature pages hereto), and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged with
the Borrower and the Agent.
9.9 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Agent and the Lenders with respect
to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Agent or any Lender relative to subject
matter hereof not expressly set forth or referred to herein or in the other Loan
Documents.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of North Carolina in Mecklenburg County, the courts of the United
States of America for the Western District of North Carolina, and appellate
courts from any thereof;
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<PAGE>
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in Section 9.2 or at such other address
of which the Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section any special, exemplary, punitive or consequential damages.
9.13 Acknowledgments. (a) The Borrower hereby acknowledges that:
(i) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Loan Documents;
(ii) neither the Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and
the relationship between the Borrower and the other Loan Parties, on
one hand, and Agent and Lenders, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(iii) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.
(b) Each of the Lenders hereby expressly acknowledges and agrees to
the provisions of Section 11 of the Limited Recourse Agreement.
9.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENT AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
9.15 Confidentiality. The Agent and each Lender agrees to keep
confidential all information provided to it by the Borrower or any Loan Party
pursuant to this Agreement;
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provided that nothing herein shall prevent any Lender from disclosing any such
information (i) to the Agent or any other Lender or any Affiliate thereof as
reasonably necessary in connection with its review, analysis, and evaluation of
the Loan Parties and the Properties, and the entry into, administration,
monitoring and enforcement of the Loan Documents, (ii) to any Transferee which
receives such information having been made aware of the confidential nature
thereof and having become a party to a confidentiality agreement on terms
substantially similar to this Section 9.15, (iii) to its employees, directors,
agents, attorneys, accountants and other professional advisors as reasonably
necessary in connection with its review, analysis, and evaluation of the Loan
Parties and the Properties, and the entry into, administration, monitoring and
enforcement of the Loan Documents, (iv) upon the request or demand of any
examiner or other Governmental Authority having jurisdiction over such Lender,
(v) in response to any order of any court or other Governmental Authority or as
may otherwise be required pursuant to any Requirement of Law, (vi) which has
been publicly disclosed other than (to the knowledge of such Person) in breach
of this Agreement, or (vii) in connection with the exercise of any remedy
hereunder.
9.16 Recourse. Except as otherwise expressly provided in the Limited
Recourse Agreement or the other Loan Documents, the Agent and the Lenders hereby
agree that none of the Borrower's beneficiaries, the Investors nor the Key
Principals, nor any of their respective partners, officers, employees or agents,
shall have any liability (contractual or otherwise) in respect of the Loans or
any of the other Obligations and the Agent and the Lenders shall not have
recourse against the assets of any of the Borrower's beneficiaries, the
Investors, the Key Principals nor any of their respective partners, officers,
employees or agents in respect of the Loans or any of the other Obligations.
[Signature Pages Follow]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
RCPI TRUST
By:
--------------------------------------
Title:
NATIONSBANK OF TEXAS, N.A.,
as Agent and as a Lender
By:
--------------------------------------
Title:
Credit Agreement: Signature Page
<PAGE>
SCHEDULE I
LENDERS, COMMITMENTS AND LENDING OFFICES
<TABLE>
<CAPTION>
Lender, Lending Offices and Notice Addresses Commitment
<S> <C>
NATIONSBANK OF TEXAS, N.A. $100,000,000
Eurodollar Lending Offices: 901 Main Street
Dallas, Texas 75202
Attention: Ms. Carolyn Mason
Telephone: 214-508-9338
Telecopy: 214-508-1571
Base Rate Lending Office: 901 Main Street
Dallas, Texas 75202
Attention: Ms. Carolyn Mason
Telephone: 214-508-9338
Telecopy: 214-508-1571
Notice Address: 901 Main Street
Dallas, Texas 75202
Attention: Ms. Carolyn Mason
Telephone: 214-508-9338
Telecopy: 214-508-1571
TOTAL: $100,000,000
</TABLE>
<PAGE>
SCHEDULE 1.1(a)
PROPERTIES, ALLOCATED LOAN AMOUNTS AND MINIMUM NET SALE PRICES
<TABLE>
<CAPTION>
PARCEL Nature of Property Interest
<S> <C>
(1250 Avenue of the Americas - P/O Parcel A-1) Block 1265 - Lots 1002, fee
1003, 1005, 1007, 1058-1070, 1073, 1074, 1076, 1077, 1080, 1081, 1092
and 1093 and RGI Unit Lot 1004
(1250 AVENUE OF THE AMERICAS - P/O PARCEL A-1) Block 1265 Lot 1054 fee
(1250 AVENUE OF THE AMERICAS - P/O PARCEL A-1) Block 1265 - Lots 1023 fee
and 1024
(1250 AVENUE OF THE AMERICAS - P/O PARCEL A-1) Block 1265 - Lots 1028 fee
and 1031-104
(610 FIFTH AVENUE - PARCEL A-2) Block 1265 - Lot 50 leasehold
(NO ADDRESS - PARCEL A-3) Block 1265 - Lot 40 fee
(NO ADDRESS - PARCEL A-4) Block 1265 - Lot 8040 fee
1, 9 ROCKEFELLER PLAZA - P/O PARCEL C) Block 1264 - Part of Lot 5 fee
(1220-1236 AVENUE OF THE AMERICAS - UNIDENTIFIED P/O PARCEL) Block leasehold
1264 - Remainder of Lot 5
8, 12 WEST 49TH STREET - PARCELS E-1, E-2 AND E-3) Block 1264 - Part fee
of Lot 30
(P/O 600 FIFTH AVENUE - P/O PARCEL E-4) Block 1264 - Remainder Part of leasehold
Lot 30
(1258 AVENUE OF THE AMERICAS - PARCEL D) Block 1265 - Lot 71 fee
(1260-1276 AVENUE OF THE AMERICAS - P/O PARCEL B) Block 1266 - Lot 1 fee
(excluding Radio City Music Hall)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PROPERTY ALLOCATED LOAN AMOUNT MINIMUM NET SALES PRICE
<S> <C> <C>
30 Rockefeller Plaza $28,900,000 $260,100,000
International Building $18,100,000 $162,900,000
One Rockefeller Plaza $6,800,000 $61,200,000
600 Fifth Avenue $5,000,000 $45,000,000
10 Rockefeller Plaza $5,400,000 $48,600,000
1230 Avenue of the Americas $10,200,000 $91,800,000
50 Rockefeller Plaza $7,400,000 $66,600,000
1270 Avenue of the Americas (excluding $3,500,000 $31,500,000
Radio City Music Hall
French Building $3,000,000 $27,000,000
British Building $3,700,000 $33,300,000
Radio City Music Hall $8,000,000 $72,000,000
TOTAL $100,000,000 $900,000,000
</TABLE>
<PAGE>
Remaining Property
ALL of Parcel 1 (Block 1265, Lot 50) other than the following:
ALL that certain plot, piece or parcel of land, situate, lying and being in
the Borough of Manhattan, County of New York, City and State of New York,
bounded and described as follows:
BEGINNING at the intersection of the northerly side of West 49th Street and
the westerly side of 5th Avenue;
RUNNING THENCE along the westerly side of 5th Avenue 200 feet 10 inches to
the intersection of the westerly side of 5th Avenue and the southerly side of
West 50th Street;
THENCE westerly along the southerly side of West 50th Street 315 feet 0
inches to the easterly side of Rockefeller Plaza;
THENCE southerly along the easterly side of Rockefeller Plaza 200 feet 10
inches to the northerly side of West 49th Street;
THENCE easterly along the northerly side of West 49th Street 315 feet 0
inches to the westerly side of 5th Avenue to the point or place of BEGINNING.
<PAGE>
Schedule 1.1(b)
CAPITAL EXPENDITURES ADJUSTMENTS
BUILDING Percentage
30 Rockefeller Plaza (Condominium Buildings)
RCPI Trust Units 22.9504%
NBC Units 0%
610 Fifth Avenue 2.1754%
620 Fifth Avenue 2.1096%
10 Rockefeller Plaza 5.6365%
1 Rockefeller Plaza 9.6536%
630 Fifth Avenue 21.1761%
50 Rockefeller Plaza 8.0619%
1230 Avenue of the Americas 12.2724%
600 Fifth Avenue 7.4047%
1270 Avenue of the Americas 8.1930%
Rockefeller Plaza (Sunken Plaza) 0.3664%
Subway Mezzanine 0%
1258 Avenue of the Americas 0%
1240 Avenue of the Americas 0%
Radio City Music Hall 0%
Auction Premises 0%
Garage 0%
TOTAL: 100%
<PAGE>
SCHEDULE 2.2
SCHEDULED LOAN REPAYMENTS
The Loans shall be repaid in amounts (each, a "Scheduled Payment
Amount"), payable on each day listed below, equal to:
(i) the aggregate principal amount of Loans borrowed on or prior to
the Termination Date, minus
(ii) the sum of the Maximum Allowable Loan Balance set forth below
opposite such day plus the amount allocated to such Scheduled Payment
Amount pursuant to Sections 2.10, 2.11 and 5.6 plus the aggregate principal
amount of all Scheduled Payment Amounts for all dates prior to such day,
provided that if such difference is equal to or less than zero then the amount
of the Scheduled Payment Amounts for such quarter shall be zero, and provided,
further, that, notwithstanding anything set forth in this Schedule 2.2
otherwise, all remaining unpaid principal of the Loans shall be due on December
31, 2000:
MAXIMUM BALANCE
DATE ALLOWABLE LOAN
BALANCE
June 30, 1997 $100,000,000
September 30, 1997 $100,000,000
December 31, 1997 $100,000,000
March 31, 1998 $95,000,000
June 30, 1998 $90,000,000
September 30, 1998 $85,000,000
December 31, 1998 $80,000,000
March 31, 1999 $73,750,000
June 30, 1999 $67,500,000
September 30, 1999 $61,250,000
<PAGE>
December 31, 1999 $55,000,000
March 31, 2000 $45,000,000
May 16, 2000 $0, or if the
Maturity Date shall
have been extended
pursuant to Section
2.6, $45,000,000
June 30, 2000 $35,000,000*
September 30, 2000 $25,000,000*
December 31, 2000 $0*
*Only if the Maturity Date shall have been extended pursuant to Section 2.6.
<PAGE>
EXHIBIT B
TAX STATUS CERTIFICATE
Reference is hereby made to the Credit Agreement, dated as of May 16,
1997, among RCPI Trust, a Delaware business trust, the lenders parties thereto,
and NationsBank of Texas, N.A., as agent (as amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"). Pursuant to the
provisions of Section 2.17(b)(i)(B) of the Credit Agreement, the undersigned
hereby certifies that it is not a "bank" as such term is defined in Section
881(c)(3)(A) of the Internal Revenue Code of 1986, as amended.
[NAME OF LENDER]
By:
---------------------------------
Title:
Date: , 19
-------------
EXHIBIT 4.7
INTERCREDITOR AND SUBORDINATION AGREEMENT
INTERCREDITOR AND SUBORDINATION AGREEMENT, dated as of May 16, 1997, by
and among the registered holder of the 14% Debentures (defined as hereinafter
provided) (the "Holder"), WHRC REAL ESTATE LIMITED PARTNERSHIP, a Delaware
limited partnership ("Whitehall"), RCPI TRUST, a Delaware business trust
(together with its successors and assigns, the "Borrower"), and NATIONSBANK OF
TEXAS, N.A., a national banking association, as agent (together with its
successors and assigns in such capacity, the "Agent") for the Lenders parties to
the Senior Credit Agreement (as hereinafter defined).
The parties hereto hereby agree as follows:
1. Definitions. (a) Unless otherwise defined herein, terms defined in
the Senior Credit Agreement and used herein shall have the meanings given to
them in the Senior Credit Agreement.
(b) The following terms shall have the following meanings:
"Agreement": this Intercreditor and Subordination Agreement, as the
same may be amended, modified or otherwise supplemented from time to time.
"Blockage Period": any of:
(a) any period commencing on the date a Default Blockage Notice is
given and ending on the earlier to occur of:
(i) the date when the Event of Default that was the basis for
such Default Blockage Notice has been cured or waived; and
(ii) 180 days after the date such Default Blockage Notice is
given; and
(b) any period commencing on the date that the Borrower is required to
make any prepayment pursuant to Section 2.11(e) of the Senior Credit Agreement
and ending on the first 14% Debenture Interest Payment Date thereafter (i) which
occurs after the time when at least two complete fiscal quarters have elapsed
since the date the Borrower is required to make such prepayment and (ii) on
which the Debt Service Coverage Ratio for each of the Test Periods ended on the
last days of each of the fiscal quarters of the Borrower ended after the
immediately preceding 14% Debenture Interest Payment Date shall have been 1.40
to 1 or greater.
"Default Blockage Notice": a written notice from the Agent to the
Borrower given as provided in the Senior Credit Agreement that a Non-Payment
Event of Default has occurred and is continuing.
<PAGE>
"Insolvency Event": (1) The Borrower or any of its Material
Subsidiaries commencing any case, proceeding or other action (i) under any
existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, conservatorship or relief of debtors,
seeking to have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other relief
with respect to it or its debts, or (ii) seeking appointment of a receiver,
trustee, custodian, conservator or other similar official for it or for all or
any substantial part of its assets, or the Borrower or any of its Material
Subsidiaries making a general assignment for the benefit of its creditors; or
(2) there being commenced against the Borrower or any of its Material
Subsidiaries any case, proceeding or other action of a nature referred to in
clause (1) above which (i) results in the entry of an order for relief or any
such adjudication or appointment or (ii) remains undismissed, undischarged or
unbonded for a period of 60 days; or (3) there being commenced against the
Borrower or any of its Material Subsidiaries any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets which results
in the entry of an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the entry
thereof; or (4) the Borrower or any of its Material Subsidiaries taking any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (1), (2) or (3) above; or
(5) the Borrower or any of its Material Subsidiaries generally not paying, or
being unable to pay, or admitting in writing its inability to pay, its debts as
they become due.
"Material Subsidiary": any Subsidiary of the Borrower having assets
(other than the Air Rights) with a fair market value in excess of $10,000,000.
"Non-Payment Event of Default": any event (other than a Payment Event
of Default) the occurrence of which entitles one or more of the Senior Lenders
to accelerate the maturity of any of the Senior Obligations.
"Payment Event of Default": any default in the payment of the Senior
Obligations (whether upon maturity, mandatory prepayment, acceleration or
otherwise) beyond any applicable grace period with respect thereto.
"Senior Credit Agreement": the Credit Agreement, dated as of May 16,
1997, among the Borrower, the Agent and the Lenders parties thereto from time to
time, as such Credit Agreement may be amended, modified, supplemented or
replaced from time to time, including, without limitation, amendments,
modifications, supplements and restatements thereof giving effect to increases,
renewals, extensions, refundings, deferrals, restructurings, replacements or
refinancings of, or additions to, the arrangements provided in such Credit
Agreement (whether provided by the original Agent and Lenders under such Credit
Agreement or a successor Agent or other Lenders).
"Senior Lenders": the holders from time to time of Senior Obligations.
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"Senior Loan Documents": the collective reference to the Senior Credit
Agreement, the Senior Notes and all other documents that from time to time
evidence the Senior Obligations or secure or support payment or performance
thereof.
"Senior Loans": the loans made by the Senior Lenders to the Borrower
pursuant to the Senior Credit Agreement.
"Senior Notes": the promissory notes of the Borrower outstanding from
time to time under the Senior Credit Agreement.
"Senior Obligations": the collective reference to the unpaid principal
of and interest on the Senior Notes and all other obligations and liabilities of
the Borrower to the Agent and the Senior Lenders (including, without limitation,
interest accruing at the then applicable rate provided in the Senior Credit
Agreement after the maturity of the Senior Loans and interest accruing at the
then applicable rate provided in the Senior Credit Agreement after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding),
whether direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, the Senior Credit Agreement, the Senior Notes, this Agreement, the other
Senior Loan Documents or any other document made, delivered or given in
connection therewith, in each case whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to the
Agent or to the Lenders that are required to be paid by the Borrower pursuant to
the terms of the Senior Credit Agreement or this Agreement or any other Senior
Loan Document).
"Subordinated Debt Documents": the collective reference to the 14%
Debentures Purchase Agreement, the 14% Debentures and any other documents or
instruments that from time to time evidence the 14% Debentures or secure or
support payment or performance thereof.
"Subordinated Holders": the holders from time to time of the
Subordinated Obligations.
"Subordinated Obligations": the collective reference to the unpaid
principal of and interest on the 14% Debentures, all obligations of the Borrower
to redeem, repurchase or defease any 14% Debentures and all other obligations
and liabilities of the Borrower to the Subordinated Holders (including, without
limitation, interest accruing at the then applicable rate provided in the 14%
Debenture Purchase Agreement after the maturity of the 14% Debentures and
interest accruing at the then applicable rate provided in the 14% Debenture
Purchase Agreement after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, the 14% Debenture Purchase
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Agreement, the 14% Debentures or any other Subordinated Debt Document, in each
case whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to the Subordinated Holders that are required
to be paid by the Borrower pursuant to the terms of the 14% Debenture Purchase
Agreement or this Agreement or any other Subordinated Debt Document).
"Subordination Event": either of the following events:
(i) the occurrence of any Insolvency Event; or
(ii) the Senior Obligations becoming due and payable in full, whether
upon maturity, acceleration or otherwise.
"Whitehall" as defined in the caption to this Agreement.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section and paragraph
references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Subordination. (a) Each of the Subordinated Holders agrees, for
itself and each future holder of the Subordinated Obligations, that the
Subordinated Obligations are expressly "subordinate and junior in right of
payment" (as that phrase is defined in paragraph 2(b)) to all Senior
Obligations.
(b) "Subordinate and junior in right of payment" means that:
(1) no part of the Subordinated Obligations shall have any claim to
the assets of the Borrower on a parity with or prior to the claim of the Senior
Obligations;
(2) unless and until the Senior Notes have been paid in full and the
Commitments have been terminated, without the express prior written consent of
the Agent,
(A) no Subordinated Holder will take, demand or receive from the
Borrower, and the Borrower will not make, give or permit, directly or
indirectly, by set-off, redemption, purchase or in any other manner, any
payment of or security for the whole or any part of the Subordinated
Obligations, and
(B) no Subordinated Holder will accelerate for any reason the
scheduled maturities of any amount owing under the 14% Debentures;
provided, however, that
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(i) at any time, except during a Blockage Period or when a Payment
Event of Default has occurred and is continuing, the Borrower may make,
and the Subordinated Holders may receive, scheduled payments on account of
interest (including deferred interest) on the 14% Debentures in accordance
with the terms thereof, and
(ii) upon the occurrence of a Subordination Event the Subordinated
Holders may accelerate the scheduled maturities of the 14% Debentures but
may not receive payments in respect thereof until the Senior Notes have
been paid in full and the Commitments have been terminated; and
provided, further, however, that, notwithstanding clause (i) of the immediately
preceding proviso, the Borrower may make, and the Subordinated Holders may
receive, during the continuance of any Blockage Period existing solely pursuant
to clause (b) of the definition of "Blockage Period", payments on account of
current and accrued interest on the 14% Debentures:
(x) on any 14% Debenture Interest Payment Date in an amount, and
only up to an amount, equal to the excess, if any, of the amount of
interest scheduled to be paid on the 14% Debentures on such 14%
Debenture Interest Payment Date (excluding any scheduled interest on
the 14% Debentures unpaid from prior 14% Debenture Interest Payment
Dates, but including interest accrued on such unpaid interest for the
period since the immediately preceding 14% Debenture Interest Payment
Date) over the aggregate amount of any Accelerated Amortization
Payments payable in respect of each of the two Test Periods most
recently ended prior to such 14% Debenture Interest Payment Date, and
(y) on any 14% Debenture Interest Payment Date in an amount, and
only up to an amount, equal to the 14% Debenture Quarterly Amount for
such 14% Debenture Interest Payment Date, so long as (1) no payment of
interest on the 14% Debentures pursuant to this clause (y) of this
proviso has been made during the one-year period preceding the date of
such payment and (2) after giving effect to such payment, the Borrower
shall have cash and Cash Equivalents standing to its account in an
aggregate amount not less than $10,000,000, and
(z) so long as no Default or Event of Default (as to which, if any
notice is required to be given by the Agent, such notice has been
given) shall have occurred and be continuing before or after giving
effect to such payment, in an amount not in excess of a cash
contribution to the common equity of the Borrower by the Investors made
contemporaneously with such payment.
(c) No Event of Default which existed on the date any Default Blockage
Notice was given shall be the basis for giving any subsequent Default Blockage
Notice, unless such Event of Default shall have been cured or waived or
otherwise ceased to exist for a period of not less than 90 consecutive days
after the date such Default Blockage Notice was given.
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(d) No more than one Default Blockage Notice may be given within any
consecutive 180-day period.
(e) The expressions "prior payment in full," "payment in full," "paid
in full" and any other similar terms or phrases when used herein with respect to
the Senior Obligations shall mean the payment in full, in cash and in
immediately available funds, of all of the Senior Obligations.
3. Additional Provisions concerning Subordination. (a) The Subordinated
Holders and the Borrower agree that upon the occurrence of any Subordination
Event:
(1) all Senior Obligations shall be paid in full before any
payment or distribution is made with respect to the Subordinated
Obligations; and
(2) any payment or distribution of assets of the Borrower, whether in
cash, property or securities, to which any Subordinated Holder would be
entitled except for the provisions hereof, shall be paid or delivered by
the Borrower, or any receiver, trustee in bankruptcy, liquidating trustee,
disbursing agent or other Person making such payment or distribution,
directly to the Agent, for the account of the Senior Lenders, to the extent
necessary to pay in full all Senior Obligations, before any payment or
distribution shall be made to any Subordinated Holder.
(b) Upon the occurrence of any event or proceeding described in clause
(1) or (2) of the definition of "Insolvency Event" commenced by or against the
Borrower:
(1) each Subordinated Holder irrevocably authorizes and empowers the
Agent (A) to demand, sue for, collect and receive every payment or
distribution on account of the Subordinated Obligations payable or
deliverable in connection with such event or proceeding and give
acquittance therefor, and (B) to file claims and proofs of claim in any
statutory or non-statutory proceeding and take such other actions (but
excluding the right to vote any claim of any Subordinated Holder in any
such proceeding), in its own name as Agent, or in the name of the
Subordinated Holders or otherwise, as the Agent may deem necessary or
advisable for the enforcement of the provisions of this Agreement;
provided, however, that the foregoing authorization and empowerment imposes
no obligation on the Agent to take any such action, and provided, further,
however, that if the Agent shall take such action, the Agent shall use its
reasonable efforts to keep the Subordinated Holders reasonably informed in
connection with such action;
(2) each Subordinated Holder shall take such action, duly and
promptly, as the Agent may reasonably request from time to time (A) to
collect the Subordinated Obligations for the account of the Senior Lenders
and (B) to file appropriate proofs of claim in respect of the Subordinated
Obligations; and
(3) each Subordinated Holder shall execute and deliver such powers of
attorney, assignments or proofs of claim or other instruments as the Agent
may reasonably request to enable the Agent to enforce any and all claims in
respect of the Subordinated Obligations
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and to collect and receive any and all payments and distributions which may
be payable or deliverable at any time upon or in respect of the
Subordinated Obligations.
(c) If any payment or distribution, whether consisting of money,
property or securities, be collected or received by any Subordinated Holder in
respect of the Subordinated Obligations, except payments permitted to be made at
the time of payment as provided in paragraph 2(b), such Subordinated Holder
forthwith shall deliver the same to the Agent for the account of the Senior
Lenders, in the form received, duly endorsed to the Agent, if required, to be
applied to the payment or prepayment of the Senior Obligations until the Senior
Obligations are paid in full. Until so delivered, such payment or distribution
shall be held in trust by such Subordinated Holder as the property of the Senior
Lenders, segregated from other funds and property held by such Subordinated
Holder.
4. Subrogation. Subject to the prior payment in full of the Senior
Obligations, the Subordinated Holders shall be subrogated to the rights of the
Senior Lenders to receive payments or distributions of assets of the Borrower in
respect of the Senior Obligations. For the purposes of such subrogation,
payments or distributions to the Agent, for the account of the Senior Lenders,
of any money, property or securities to which any Subordinated Holder would be
entitled except for the provisions of this Agreement shall be deemed, as between
the Borrower and its creditors other than the Senior Lenders and such
Subordinated Holder, to be a payment by the Borrower to or on account of
Subordinated Obligations, it being understood that the provisions of this
Agreement are, and are intended solely, for the purpose of defining the relative
rights of the Subordinated Holders, on the one hand, and the Senior Lenders, on
the other hand.
5. Consent of Subordinated Holders.
(a) Each Subordinated Holder consents, notwithstanding any provision
to the contrary contained in the Subordinated Debt Documents, to the execution,
delivery and performance of the Senior Loan Documents and to the incurrence and
existence of the Senior Obligations.
(b) Each Subordinated Holder consents that, without the necessity of
any reservation of rights against any Subordinated Holder, and without notice to
or further assent by any Subordinated Holder:
(1) any demand for payment of any Senior Obligations made by the Agent
or any Senior Lender may be rescinded in whole or in part by the Agent or
any such Senior Lender, and any Senior Obligation may be continued, and the
Senior Obligations, or the liability of the Borrower or any co-obligor or
any other party upon or for any part thereof, or right of offset with
respect thereto, or any obligation or liability of the Borrower or any
other party under the Senior Credit Agreement or any other agreement, may,
from time to time, in whole or in part, be renewed, extended, modified,
accelerated, compromised, waived, surrendered, or released by the Agent or
any Senior Lender; and
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(2) the Senior Credit Agreement, the Senior Notes and any other Senior
Loan Document may be amended, modified, supplemented or terminated, in
whole or in part, as the Agent or any Senior Lender may deem advisable from
time to time, provided, that no such amendment, supplement or other
modification shall increase the aggregate principal amount of the
Commitments or Loans available and outstanding thereunder, or increase the
interest rate thereon,
in each case all without notice to or further assent by any Subordinated Holder,
which will remain bound under this Agreement, and all without impairing,
abridging, releasing or affecting the subordination provided for herein.
(c) Each Subordinated Holder waives any and all notice of the creation,
renewal, extension or accrual of any of the Senior Obligations and notice of or
proof of reliance by the Senior Lenders upon this Agreement. The Senior
Obligations, and any of them, shall be deemed conclusively to have been created,
contracted or incurred in reliance upon this Agreement, and all dealings between
the Borrower and the Senior Lenders shall be deemed to have been consummated in
reliance upon this Agreement. Each Subordinated Holder acknowledges and agrees
that the Senior Lenders have relied upon the subordination provided for herein
in entering into the Senior Credit Agreement and in making funds available to
the Borrower thereunder. Each Subordinated Holder waives notice of or proof of
reliance on this Agreement and protest, demand for payment and notice of
default.
6. Covenants of the Subordinated Holders and Whitehall. (a) So long as
any of the Senior Obligations shall remain outstanding, no Subordinated Holder
shall, without the prior written consent of the Agent:
(i) sell, assign, or otherwise transfer, in whole or in part, the
Subordinated Obligations or any interest therein to any other Person (a
"Transferee") or create, incur or suffer to exist any security interest,
lien, charge or other encumbrance whatsoever upon the Subordinated
Obligations in favor of any Transferee unless such transaction is made
expressly subject to this Agreement, and the Transferee expressly
acknowledges to the Agent, by a writing in form and substance reasonably
satisfactory to the Agent, the subordination provided for herein and agrees
to be bound by all of the terms hereof;
(ii) permit any of the Subordinated Debt Documents to be amended,
modified or otherwise supplemented; or
(iii) commence, or join with any creditors other than the Senior
Lenders in commencing any proceeding referred to in clause (1) or (2) of
the definition of "Insolvency Event."
(b) Whitehall covenants and agrees that, in the event of any sale,
assignment or transfer by any Subordinated Holder of any interest in the
Subordinated Obligations, Whitehall shall (i) give prompt written notice thereof
to the Agent and (ii) concurrently with such notice, deliver a certificate to
the Agent certifying that such sale, assignment and/or transfer would not result
in an Event of Default under Section 7(l) of the Senior Credit Agreement.
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7. Senior Obligations Unconditional. All rights and interests of the
Senior Lenders hereunder, and all agreements and obligations of the Subordinated
Holders and the Borrower hereunder, shall remain in full force and effect
irrespective of:
(a) any lack of validity or enforceability of any Senior Security
Documents or any other Senior Loan Documents by reason of the commencement or
pendency of any case, proceeding or action described in clause (1) or (2) of the
definition of 'Insolvency Event";
(b) subject to the proviso to Section 5(b)(2) hereof, any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Senior Obligations, or any amendment or waiver or other modification, whether by
course of conduct or otherwise, of the terms of the Senior Credit Agreement or
any other Senior Loan Document;
(c) any exchange, release or nonperfection of any security interest in
any collateral for any Senior Obligations, or any release, amendment, waiver or
other modification, whether in writing or by course of conduct or otherwise, of
all or any of the Senior Obligations or any guarantee thereof; or
(d) any other circumstances which otherwise might constitute a defense
available to, or a discharge of, the Borrower in respect of the Senior
Obligations, or of either any Subordinated Holder or the Borrower in respect of
this Agreement which is or is in the nature of a defense available to a surety.
8. Representations and Warranties. (a) The Holder represents and
warrants to the Agent and the Senior Lenders that:
(i) its 14% Debentures are owned by the Holder free and clear of any
Liens whatsoever arising from, through or under the Holder, other than the
interest of Whitehall, Goldman Sachs Capital Markets, L.P. and the interest
of the Senior Lenders under this Agreement.
(ii) The Holder has the corporate power and authority and the legal
right to execute and deliver and to perform its obligations under this
Agreement and has taken all necessary corporate action to authorize its
execution, delivery and performance of this Agreement.
(iii) This Agreement constitutes a legal, valid and binding obligation
of the Holder enforceable against the Holder in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of
good faith and fair dealing.
(iv) The execution, delivery and performance of this Agreement will not
violate any provision of any Requirement of Law or Contractual Obligation
of the Holder and will not result in the creation or imposition of any Lien
on any of the properties or revenues of the
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Holder pursuant to any Requirement of Law affecting or any Contractual
Obligation of the Holder, except the interest of the Senior Lenders under
this Agreement.
(v) No consent or authorization of, filing with, or other act by or in
respect of, any arbitrator or Governmental Authority and no consent of any
other Person (including, without limitation, any stockholder or creditor of
the Holder), is required in connection with the execution, delivery,
performance, validity or enforceability of this Agreement.
(b) Whitehall hereby represents and warrants to the Agent and the
Senior Lenders as of the date hereof that no Event of Default under Section 7(l)
of the Senior Credit Agreement has occurred and is continuing.
9. No Representation by Agent. Neither the Agent nor any Senior Lender
has made, and none of them hereby or otherwise makes to the Subordinated
Holders, any representations or warranties, express, or implied, nor does the
Agent or any Senior Lender assume any liability to any Subordinated Holder with
respect to: (a) the financial or other condition of obligors under any
instruments of guarantee with respect to the Senior Obligations, (b) the
enforceability, validity, value or collectibility of the Senior Obligations or
the Subordinated Obligations, any collateral therefor, or any guarantee or
security which may have been granted in connection with any of the Senior
Obligations or the Subordinated Obligations or (c) the Borrower's title or right
to transfer any collateral or security.
10. Waiver of Claims. To the maximum extent permitted by law, each
Subordinated Holder waives any claim it might have against the Senior Lenders
with respect to, or arising out of, any action or failure to act or any error of
judgment, negligence, or mistake or oversight whatsoever on the part of the
Agent, the Senior Lenders or their respective directors, officers, employees or
agents with respect to any exercise of rights or remedies under the Senior Loan
Documents. Neither the Agent, any Senior Lender nor any of their respective
directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon any of such collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any such
collateral upon the request of the Borrower or any Subordinated Holder or any
other Person or to take any other action whatsoever with regard to such
collateral or any part thereof.
11. Provisions Applicable After Bankruptcy; No Turnover.
(a) The provisions of this Agreement shall continue in full force and
effect notwithstanding the occurrence of any Insolvency Event.
(b) To the extent that any Subordinated Holder has or acquires any
rights under Section 363 or Section 364 of the Bankruptcy Code with respect to
any collateral for any Senior Obligations or Subordinated Obligations, such
Subordinated Holder hereby agrees not to assert such rights without the prior
written consent of the Agent, on behalf of the Senior Lenders; provided that, if
requested by the Agent, such Subordinated Holder shall seek to exercise such
rights in the manner requested by the Agent, including the rights in payments in
respect of such rights.
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12. Further Assurances. The Subordinated Holders and the Borrower, at
their own expense and at any time from time to time, upon the written request of
the Agent will promptly and duly execute and deliver such further instruments
and documents and take such further actions as the Agent reasonably may request
for the purposes of obtaining or preserving the full benefits of this Agreement
and of the rights and powers herein granted.
13. Provisions Define Relative Rights. This Agreement is intended
solely for the purpose of defining the relative rights of the Agent and the
Senior Lenders on the one hand and the Subordinated Holders on the other, and no
other Person shall have any right, benefit or other interest under this
Agreement.
14. Powers Coupled With An Interest. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until the Senior Obligations are paid in full and the Commitments
are terminated.
15. Authority of Agent. The Borrower and the Subordinated Holders
acknowledge that the rights and responsibilities of the Agent under this
Agreement with respect to any action taken by the Agent or the exercise or
non-exercise by the Agent of any option, request, judgment or other right or
remedy provided for herein or resulting or arising out of this Agreement shall,
as between the Agent and the Senior Lenders, be governed by the Senior Credit
Agreement and by such other agreements with respect thereto as may exist from
time to time among them, but, as between the Agent, on the one hand, and the
Borrower and the Subordinated Holders, on the other hand, the Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and neither the Borrower nor any
Subordinated Holder shall be under any obligation, or entitlement, to make any
inquiry respecting such authority.
16. Notices. All notices, requests and demands to or upon the Agent or
the Borrower or any Subordinated Holder to be effective shall be in writing
(including by facsimile transmission) and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (1) in the case of
delivery by hand, when delivered or (2) in the case of delivery by mail, three
days after being deposited in the mails, postage prepaid, (3) in the case of
delivery by overnight courier, one Business Day after being delivered to a
nationally recognized overnight courier service, with shipping charges paid for
delivery on the next Business Day, or (4) in the case of delivery by facsimile
transmission, when sent and receipt has been electronically confirmed, addressed
as follows:
If to the Agent: NationsBank of Texas, N.A.
901 Main Street, TXI-492-51-01
Dallas, Texas 75202
Attention: Ms. Carolyn Mason
Telephone: 214-508-9338
Facsimile: 214-508-1571
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with copies to:
NationsBank, N.A.
100 North Tryon Street, 11th Floor
Charlotte, North Carolina 28255
Attention: Mr. Thomas K. Sittema
Telephone: 704-386-0637
Facsimile: 704-388-9408
and
Cadwalader, Wickersham & Taft
201 South College Street, Suite 1510
Charlotte, North Carolina 28211
Attention: Steven N. Cohen, Esq.
Telephone: 704-348-5100
Facsimile: 704-348-5200
If to the Borrower: RCPI Trust
c/o Tishman Speyer Properties L.P.
520 Madison Avenue
New York, New York 10022
Attention: Mr. Jerry Speyer
Telephone: 212-715-0310
Facsimile: 212-319-1745
with copies to:
Whitehall Street Real Estate Limited Partnership V
85 Broad Street
New York, New York 10004
Attention: Chief Financial Officer
Telephone: 212-902-3171
Facsimile: 212-357-5505;
and
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Gary Israel, Esq.
Telephone: 212-558-4005
Facsimile: 212-558-3588
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If to Whitehall: WHRC Real Estate Limited Partnership
85 Broad Street
New York, New York 10004
Attention: Chief Financial Officer
Telephone: 212-902-3171
Facsimile: 212-357-5505;
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Gary Israel, Esq.
Telephone: 212-558-4005
Facsimile: 212-558-3588
If to any Subordinated Holder, at its address or transmission number for notices
set forth under its signature below.
The Agent, the Borrower and any Subordinated Holder may change their addresses
and transmission numbers for notices by notice in the manner provided in this
Section.
18. Counterparts. This Agreement may be executed by one or more of the
parties on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the counterparts of this Agreement signed by all the parties shall be lodged
with the Agent.
19. Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
20. Integration. This Agreement represents the agreement of the Agent
and the Senior Lenders and the Subordinated Holders with respect to the subject
matter hereof and there are no promises or representations by the Agent or any
Senior Lender or any Subordinated Holder relative to the subject matter hereof
not reflected herein.
21. Amendments in Writing; No Waiver: Cumulative Remedies. (a) None of
the terms or provisions of this Agreement may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by the Agent, the
Borrower and each Subordinated Holder; provided that any provision of this
Agreement may be waived by the Agent and the Senior Lenders in a letter or
agreement executed by the Agent or by telex or facsimile transmission from the
Agent.
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(b) No failure to exercise, nor any delay in exercising, on the part
of the Agent or any Senior Lender, any right, power or privilege hereunder shall
operate as a waiver thereof. No single or partial exercise of any right, power
or privilege hereunder shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
22. Section Headings. The section headings used in this Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
23. Successors and Assigns. (a) This Agreement shall be binding upon
the successors and assigns of the Borrower and the Subordinated Holders and
shall inure to the benefit of the Agent and the Senior Lenders and their
successors and assigns.
(b) Upon a successor Agent becoming the Agent under the Senior Credit
Agreement, such successor Agent automatically shall become the Agent hereunder
with all the rights and powers of the Agent hereunder without the need for any
further action on the part of any party hereto.
24. Governing Law. This Agreement shall be governed by, and construed
and interpreted in accordance with, the law of the State of New York.
[Signature Pages Follow]
-14-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
NATIONSBANK OF TEXAS, N.A., as Agent
By______________________________
Title____________________________
RCPI TRUST
By___________________________
Title_________________________
HOLDER OF 14% DEBENTURES
By: WHRC Real Estate Limited Partnership, its
attorney-in-fact
By: WHRC Gen-Par, Inc., its General Partner
By______________________________
Title____________________________
Address:
85 Broad Street
New York, New York 10004
Attention: Chief Financial Officer
Fax: 212-357-5505
-15-
<PAGE>
Solely as to Sections 6(b) and 8(b):
WHRC REAL ESTATE LIMITED PARTNERSHIP
By: WHRC Gen-Par, Inc., its General Partner
By______________________________
Title____________________________
Address:
85 Broad Street
New York, New York 10004
Attention: Chief Financial Officer
Fax: 212-357-5505
-16-
EXHIBIT 4.8
LIMITED RECOURSE AGREEMENT
LIMITED RECOURSE AGREEMENT, dated as of May 16, 1997 (the "Agreement"),
made by Whitehall Street Real Estate Limited Partnership V, a Delaware limited
partnership ("Whitehall LP"), EXOR Group S.A., a Luxembourg investment holding
company ("EXOR"), David Rockefeller, an individual residing in the State of New
York ("Rockefeller"), Tishman Speyer Crown Equities, a Delaware general
partnership ("Tishman Speyer"), and Bonito Investments, LDC, a Bahamas limited
duration company ("Bonito"), in favor of NATIONSBANK OF TEXAS, N.A., as agent
(in such capacity, the "Agent") for the lenders (the "Lenders") parties to the
Credit Agreement referred to below.
RECITALS
Pursuant to the Credit Agreement, dated as of May 16, 1997 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among RCPI Trust, a Delaware business trust (the "Borrower"), the Lenders and
the Agent, the Lenders have severally agreed to make loans to the Borrower upon
the terms and subject to the conditions set forth therein, such loans to be
evidenced by the Notes issued by the Borrower thereunder. The Key Principals (as
hereinafter defined) indirectly own all of the outstanding common equity
interests in the Borrower. It is a condition precedent to the obligation of the
Lenders to make their respective loans to the Borrower under the Credit
Agreement that the Key Principals shall have executed and delivered this
Agreement to the Agent for the ratable benefit of the Lenders.
NOW, THEREFORE, in consideration of the premises and to induce the Agent
and the Lenders to enter into the Credit Agreement and to induce the Lenders to
make their respective loans to the Borrower under the Credit Agreement, each Key
Principal hereby agrees with the Agent, for the ratable benefit of the Lenders,
as follows:
1. Defined Terms. (a) Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.
(b) The following terms shall have the following meanings:
"Foreign Jurisdiction": any jurisdiction other than the United States of
America or any State thereof.
"Foreign Key Principal": any Key Principal which is organized under the
laws of a Foreign Jurisdiction.
"Joint Recourse Obligation": with respect to (a) any Lien voluntarily
granted or consented to by the Borrower in respect of any Property at any time
other than such Liens permitted under the Credit Agreement, the obligation to
pay all amounts and to take all such other actions as are necessary to cause
such Lien to be immediately released from the Property,
<PAGE>
including, without limitation, the obligation to pay an amount sufficient
immediately to discharge any debt, judgment, liability or other obligation
secured by such Lien, and (b) any settlement, judgment or decree arising out of
or in connection with any suit, litigation, investigation or other proceeding
based on a claim that there was an alleged material misstatement or omission in
the RCPI Proxy Disclosure (including without limitation any such settlement,
judgment or decree arising from (i) the action pending in the U.S. District
Court for the District of Delaware captioned Charal Investment Co. v.
Rockefeller, et al., or (ii) any state or federal civil or criminal proceeding
or investigation relating in whole or in part to a claim that there was any
alleged material misstatement or omission in the RCPI Proxy Disclosure) entered
against or entered into by any Key Principal or any other Person (including,
without limitation, any present or former director or officer of RCPI, Holdings
or any predecessor) involving in the aggregate a liability (to the extent not
paid by insurance, or covered by insurance with respect to which the insurance
company has acknowledged coverage) of $15,000,000 or more with respect to which
the Borrower has any liability (whether pursuant to an indemnification
obligation or otherwise), the obligation to pay all amounts and to take all such
other actions as are necessary to cause such liability of the Borrower to be
satisfied or discharged or such judgment or decree to be vacated, discharged,
stayed or bonded pending appeal.
"judgment currency": as defined in Section 19.
"Key Principal": any of EXOR, Whitehall LP, Rockefeller, Tishman Speyer and
Bonito.
"Key Principal Net Worth Letter": with respect to any Key Principal, as of
any date, a balance sheet certified by, or a letter or certificate, in form
satisfactory to the Agent, addressed to the Agent and the Lenders and executed
by, the chief financial officer, the certified public accountant, or other
Person with sufficient familiarity with financial statements of such Key
Principal (setting forth the basis of such Person's knowledge), which shall set
forth the net worth, cash flow, recourse obligations and other contingent
obligations of such Key Principal as of such date, including the amount of such
net worth which is held in cash, cash equivalents or readily marketable
securities; provided, however, that no Key Principal shall be required to
deliver a Key Principal Net Worth Letter to Agent that is broader in scope than
the balance sheets or letters delivered to the Agent prior to the date of this
Agreement.
"Pro-Rata Recourse Obligations": collectively:
(i) any Obligations resulting from, arising as a result of, incurred
in reliance on, or which may become immediately due and payable as a result
of the fraud of the Borrower; and
(ii) the obligation to comply with, and cause the Borrower to comply
with, each of Sections 2.18, 5.3(b)(i), 5.5(b) and (c), and 5.9 of the
Credit Agreement, including liability to pay any amounts required to be
paid by the Borrower pursuant to such Sections 2.18, 5.3(b)(i), 5.5(b) and
(c), and 5.9.
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<PAGE>
"Pro Rata Recourse Amount": with respect to any Key Principal, an amount
equal to $100,000,000 multiplied by the percentage set forth opposite such Key
Principal's name on Exhibit A hereto.
"RCPI Proxy Disclosure": collectively, (i) the Schedule 14A filed by RCPI
with the Securities and Exchange Commission on February 14, 1996, and the proxy
statement of RCPI, dated February 14, 1996 contained therein and sent to the
former stockholders of RCPI in connection with a meeting of stockholders of RCPI
held on March 25, 1996 soliciting approval of, among other matters, the
transactions contemplated by the Merger Agreement, including, without
limitation, any amendments or supplements to such Schedule 14A and proxy
statement, any preliminary proxy statement filed in connection therewith, and
all documents incorporated by reference in any thereof, (ii) any further
documents filed between February 14, 1996 and March 25, 1996 by RCPI, or any
Investor or any Affiliate of any thereof with the Securities and Exchange
Commission or comparable state authority, or disseminated to the former
stockholders of RCPI, in each such case in connection with such proxy statement
or meeting of stockholders of RCPI, and (iii) any press releases issued prior to
March 25, 1996 by or on behalf of RCPI or any of the Investors in connection
with the transactions contemplated by the Merger Agreement and such proxy
statement and filings prior to such meeting of stockholders of RCPI.
"Recourse Obligations": the collective reference to the Joint Recourse
Obligations and the Pro-Rata Recourse Obligations.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section and paragraph
references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall
be equally applicable to both the singular and plural forms of such
terms.
2. Recourse. (a) The Key Principals hereby agree, (i) that they shall be
jointly and severally liable to the Agent on behalf of the Lenders and their
respective permitted successors and assigns for, (ii) that Agent on behalf of
the Lenders and their respective permitted successors and assigns shall have
recourse to the assets of the Key Principals, jointly and severally, for, and
(iii) that they shall, upon the demand of the Agent, for the ratable benefit of
the Lenders and their respective permitted successors and assigns, promptly and
completely pay and perform when due (whether at the stated maturity, by
acceleration or otherwise), the Joint Recourse Obligations.
(b) Each Key Principal hereby agrees (i) that it shall be severally and not
jointly liable to the Agent on behalf of the Lenders and their respective
permitted successors and assigns for, (ii) that Agent on behalf of the Lenders
and their respective permitted successors and assigns shall have recourse to the
assets of such Key Principal for, and (iii) that it shall, upon the demand of
the Agent, for the ratable benefit of the Lenders and their respective permitted
successors and assigns, promptly and completely pay and perform when due
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<PAGE>
(whether at the stated maturity, by acceleration or otherwise), up to such Key
Principal's Pro Rata Recourse Amount, the Pro-Rata Recourse Obligations.
(c) Each Key Principal further agrees that it shall be liable to pay any
and all expenses (including, without limitation, all reasonable fees and
disbursements of counsel) which may be paid or incurred by the Agent and, at any
time after an Event of Default, any Lender, in enforcing any rights with respect
to, or collecting, any or all of the Recourse Obligations and/or enforcing any
rights with respect to, or collecting against, the Key Principals under this
Agreement. Such liability shall be joint and several to the extent such expenses
arise out of or relate to the Joint Recourse Obligations, and several, to the
extent such expenses arise out of or relate to the Pro-Rata Recourse
Obligations. This Agreement shall remain in full force and effect until the
Obligations are paid in full and the Commitments are terminated, notwithstanding
that from time to time prior thereto the Borrower may be free from any
Obligations.
(d) Each Key Principal agrees that the Obligations may at any time and from
time to time exceed the amount of the liability of such Key Principal hereunder
without impairing this Agreement or affecting the rights and remedies of the
Agent or any Lender hereunder.
3. No Subrogation. Notwithstanding any payment or payments made by any Key
Principal hereunder, such Key Principal shall not be entitled to be subrogated
to any of the rights of the Agent or any Lender against (i) the Borrower or any
right of offset held by any Lender for the payment of the Obligations until all
amounts owing to the Agent and the Lenders on account of the Obligations are
paid in full or (ii) any other Key Principal or any right of offset held by any
Lender for the payment of the Recourse Obligations until all amounts owing to
the Agent and the Lenders on account of the Recourse Obligations are paid in
full, nor shall any Key Principal seek or be entitled to seek any contribution
or reimbursement (x) from the Borrower in respect of payments made by such Key
Principal hereunder until all amounts owing to the Agent and the Lenders by the
Borrower on account of the Obligations are paid in full or (y) from any other
Key Principal or any other Person in respect of payments made by such Key
Principal hereunder until all amounts owing to the Agent and the Lenders on
account of claims made for Recourse Obligations are paid in full. If any amount
shall be paid by the Borrower to any Key Principal on account of such
subrogation rights at any time when all of the Obligations shall not have been
paid in full, or if any amount shall be paid by the Borrower or a Key Principal
to another Key Principal on account of such subrogation rights at any time when
all claims made for Recourse Obligations shall not have been paid in full, such
amount shall be held by such Key Principal in trust for the Agent and the
Lenders, segregated from other funds of such Key Principal, and shall, forthwith
upon receipt by such Key Principal, be turned over to the Agent in the exact
form received by such Key Principal (duly endorsed by such Key Principal to the
Agent, if required), to be applied against the Obligations or the Recourse
Obligations, as the case may be, whether matured or unmatured, in such order as
the Agent may determine.
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<PAGE>
4. Amendments, etc. with respect to the Obligations; Waiver of Rights. Each
Key Principal shall remain obligated hereunder notwithstanding that any demand
for payment of any of the Obligations made by the Agent may be rescinded by such
party and any of the Obligations continued, and the Obligations, or the
liability of any other party upon or for any part thereof, or right of offset
with respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Agent, and any of the Loan Documents and any other documents
executed and delivered in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the Agent may deem advisable
from time to time, and any right of offset at any time held by the Agent or any
Lender for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released. When making any demand hereunder against any Key
Principal, the Agent may, but shall be under no obligation to, make a similar
demand on the Borrower, and any failure by the Agent to make any such demand or
to collect any payments from the Borrower or any release of the Borrower shall
not relieve such Key Principal of its obligations or liabilities hereunder, and
shall not impair or affect the rights and remedies, express or implied, or as a
matter of law, of the Agent against such Key Principal. For the purposes hereof
"demand" shall include the commencement and continuance of any legal
proceedings. Without limiting, diminishing or otherwise modifying the liability
of any Key Principal hereunder, if the Agent makes a demand for payment on any
Key Principal the Agent hereby agrees that it will accept payment by the
Borrower.
5. Recourse Obligations Absolute and Unconditional. Each Key Principal
waives all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Agent or any Lender upon
this Agreement or acceptance of this Agreement, the Obligations, and any of
them, shall be deemed to have been incurred, or extended, amended or waived, in
reliance upon this Agreement; and all dealings between the Borrower and the Key
Principals, on the one hand, and the Agent and the Lenders, on the other hand,
likewise shall be presumed to have been had or consummated in reliance upon this
Agreement. Each Key Principal waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Borrower or any Key
Principal with respect to the Obligations. Each Key Principal understands and
agrees that this Agreement shall be construed to be continuing, without regard
to (a) the validity, regularity or enforceability of the Credit Agreement, any
Note or any other Loan Document, any of the Obligations or any other collateral
security therefor or guarantee or right of offset with respect thereto at any
time or from time to time held by the Agent or any Lender, (b) any defense,
set-off or counterclaim (other than a defense of payment or performance) which
may at any time be available to or be asserted by the Borrower against the Agent
or any Lender, or (c) any other circumstance which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrower for the
Obligations, or of the Key Principals under this Agreement, in bankruptcy or in
any other instance. When pursuing its rights and remedies hereunder against the
Key Principals, the Agent may pursue such rights and remedies as it may have
against the Borrower or any other Person or any right of offset with respect
thereto, and any failure by the Agent to pursue such other rights or remedies or
to collect any payments from the Borrower or any such other Person or to
exercise any such right of offset, or any release of the Borrower or any such
other Person or right of offset, shall not relieve any Key Principal of any
liability hereunder, and
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<PAGE>
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Agent and the Lenders against each Key
Principal. This Agreement shall remain in full force and effect and be binding
in accordance with and to the extent of its terms upon each Key Principal and
the successors and assigns thereof, and shall inure to the benefit of the Agent
and the Lenders, and their respective successors, endorsees, transferees and
assigns, until all the Obligations and the obligations of each Key Principal
under this Agreement shall have been satisfied by payment in full and the
Commitments shall be terminated, notwithstanding that from time to time during
the term of the Credit Agreement the Borrower may be free from any Obligations.
6. Reinstatement. This Agreement shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Obligations or the Recourse Obligations is rescinded or must
otherwise be restored or returned by the Agent or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or any Key Principal, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Key Principal or any substantial part of its property, or
otherwise, all as though such payments had not been made.
7. Payments. Each Key Principal hereby agrees that payments hereunder will
be paid to the Agent on demand without set-off or counterclaim in U.S. Dollars
at the office of the Agent specified in Section 9.2 of the Credit Agreement.
8. Representations and Warranties.
(a) CORPORATIONS: Each Key Principal that is a corporation hereby
represents and warrants that:
(i) it is duly organized, validly existing and, if applicable, in good
standing under the laws of the jurisdiction of its organization and has the
corporate power and authority and the legal right to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged;
(ii) it has the corporate power and authority and the legal right to
execute and deliver, and to perform its obligations under, this Agreement,
and has taken all necessary corporate action to authorize its execution,
delivery and performance of this Agreement;
(iii) this Agreement has been duly executed and delivered on behalf of
such Key Principal, and constitutes a legal, valid and binding obligation
of such Key Principal enforceable in accordance with its terms, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether
considered on a proceeding in equity or at law) and an implied covenant of
good faith and fair dealing;
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(iv) the execution, delivery and performance of this Agreement will
not violate any provision of any Requirement of Law or material Contractual
Obligation of such Key Principal and will not result in or require the
creation or imposition of any material Lien on any of the properties or
revenues of such Key Principal pursuant to any Requirement of Law or
material Contractual Obligation of such Key Principal;
(v) no consent or authorization of, filing with, notice to, or other
act by or in respect of, any Governmental Authority or any other Person
(including, without limitation, any stockholder or creditor of such Key
Principal) is required in connection with the execution, delivery,
performance, validity or enforceability of this Agreement, other than such
consents, authorizations, filings, notices and other acts which have been
obtained, made or taken, as the case may be;
(vi) except for the litigation described in clause (b) of the
definition of "Joint Recourse Obligation" in Section 1, no litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority is pending or, to the knowledge of such Key Principal, threatened
by or against such Key Principal or against any of its properties or
revenues (i) with respect to this Agreement or any of the transactions
contemplated hereby, or (ii) which could have a material adverse effect on
the business, operations, property or financial or other condition of such
Key Principal; and
(vii) it has filed or caused to be filed all tax returns which, to its
knowledge, are required to be filed and has paid all taxes shown to be due
and payable on said returns prior to the same becoming delinquent or on any
assessments made against it or any of its property and all other taxes,
fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP or other applicable
standard have been provided on the books of such Key Principal and other
than those, the non-payment of which would not have a material adverse
effect on such Key Principal, taking into consideration the assets and
liabilities of such Key Principal).
(b) LIMITED PARTNERSHIP, LIMITED DURATION COMPANY OR LIMITED LIABILITY
COMPANY: Each Key Principal that is a limited partnership, a limited duration
company or a limited liability company hereby represents and warrants that:
(i) it is duly organized, validly existing and, if applicable, in good
standing under the laws of the jurisdiction of its organization and has the
power and authority and the legal right to own and operate its property, to
lease the property it operates as lessee and to conduct the business in
which it is currently engaged;
(ii) it has the power and authority and the legal right to execute and
deliver, and to perform its obligations under, this Agreement, and has
taken all necessary action to authorize its execution, delivery and
performance of this Agreement;
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(iii) this Agreement has been duly executed and delivered on behalf of
such Key Principal, and constitutes a legal, valid and binding obligation
of such Key Principal enforceable in accordance with its terms, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether
considered on a proceeding in equity or at law) and an implied covenant of
good faith and fair dealing;
(iv) the execution, delivery and performance of this Agreement will
not violate any provision of any Requirement of Law or material Contractual
Obligation of such Key Principal and will not result in or require the
creation or imposition of any material Lien on any of the properties or
revenues of such Key Principal pursuant to any Requirement of Law or
material Contractual Obligation of such Key Principal;
(v) no consent or authorization of, filing with, notice to, or other
act by or in respect of, any Governmental Authority or any other Person
(including, without limitation, any stockholder, partner, owner or creditor
of such Key Principal) is required in connection with the execution,
delivery, performance, validity or enforceability of this Agreement, other
than such consents, authorizations, filings, notices and other acts which
have been obtained, made or taken, as the case may be;
(vi) except for the litigation described in clause (b) of the
definition of "Joint Recourse Obligation" in Section 1, no litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority is pending or, to the knowledge of such Key Principal, threatened
by or against such Key Principal or against any of its properties or
revenues (i) with respect to this Agreement or any of the transactions
contemplated hereby, or (ii) which could have a material adverse effect on
the business, operations, property or financial or other condition of such
Key Principal; and
(vii) it has filed or caused to be filed all tax returns which, to its
knowledge, are required to be filed and has paid all taxes shown to be due
and payable on said returns prior to the same becoming delinquent or on any
assessments made against it or any of its property and all other taxes,
fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP or other applicable
standard have been provided on the books of such Key Principal and other
than those, the non-payment of which would not have a material adverse
effect on such Key Principal, taking into consideration the assets and
liabilities of such Key Principal).
(c) ROCKEFELLER hereby represents and warrants that:
(i) he has the legal right to execute and deliver this Agreement and
to perform his obligations hereunder;
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(ii) no consent or authorization of, filing with, or other act by or
in respect of, any arbitrator or Governmental Authority and no consent of
any other Person (including, without limitation, any creditor of such Key
Principal) is required in connection with the execution, delivery,
performance, validity or enforceability of this Agreement other than such
consents, authorizations, filings, notices and other acts which have been
obtained, made or taken, as the case may be;
(iii) this Agreement has been duly executed and delivered by him and
constitutes his legal, valid and binding obligation enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity (whether enforcement is sought in proceedings in
equity or at law);
(iv) the execution, delivery and performance of this Agreement will
not violate any provision of any Requirement of Law or any of his material
Contractual Obligations and will not result in or require the creation or
imposition of any material Lien on any of his properties or revenues
pursuant to any Requirement of Law or any of his material Contractual
Obligations; and
(v) except for the litigation described in clause (b) of the
definition of "Joint Recourse Obligation" in Section 1 and claims made for
breach of fiduciary duty as an officer and/or a director of RCPI, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to his knowledge, threatened by or
against him or against any of his properties or revenues (i) with respect
to this Agreement or any of the transactions contemplated hereby, or (ii)
which could have a material adverse effect on his business, operations,
property or financial or other condition.
(d) FOREIGN KEY PRINCIPALS: Each Foreign Key Principal further represents
that:
(i) there are no Non-Excluded Taxes imposed by the United States or by
the Foreign Jurisdiction in which such Foreign Key Principal is organized
or has its principal place of business either (x) on or by virtue of the
execution or delivery of this Agreement or any other document to be
furnished hereunder, or (y) on any payment to be made by such Foreign Key
Principal; and
(ii) the courts of the jurisdiction in which such Foreign Key
Principal maintains its principal place of business should, in a properly
presented case, give effect to a judgment for money damages on this
Agreement duly entered by a New York court, subject to applicable exequatur
proceedings.
(e) Each Key Principal further represents and warrants that Exhibit A
hereto correctly sets forth the aggregate percentage equity interest in the
Borrower directly or indirectly owned by such Key Principal.
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(f) Each Key Principal further represents and warrants that the Key
Principal Net Worth Letter most recently delivered by such Key Principal was
true and correct as of the date thereof.
Each Key Principal agrees that the foregoing representations and warranties
shall be deemed to have been made by such Key Principal on the date of each
borrowing by the Borrower under the Credit Agreement on and as of such date of
borrowing as though made hereunder on and as of such date.
9. Covenants. Each Key Principal hereby covenants and agrees with the Agent
and each Lender that, from and after the date of this Agreement until the
Obligations are paid in full and the Commitments are terminated:
(a) Each Key Principal shall furnish to the Agent and each Lender, as soon
as available, but in any event within 90 days after the end of each calendar
year (or, in the case of EXOR, on or before July 15 of each year), a Key
Principal Net Worth Letter as of the end of such calendar year (or with respect
to EXOR, the fiscal year most recently ended) with respect to such Key
Principal.
(b) With respect to any Foreign Key Principal, it will make all payments
required to by made by it under this Agreement free and clear of, and without
deduction or withholding for or on account of, any present or future
Non-Excluded Taxes. If any Non-Excluded Taxes are required to be withheld from
any amounts payable to the Agent or any Lender hereunder, the amounts so payable
to the Agent or such Lender shall be increased to the extent necessary to yield
to the Agent or such Lender (after payment of all Non-Excluded Taxes) any such
amounts payable hereunder at the rates or in the amounts specified in this
Agreement. Whenever any Non-Excluded Taxes are payable by any Foreign Key
Principal, as promptly as possible thereafter such Foreign Key Principal shall
send to the Agent for its own account or for the account of such Lender, as the
case may be, a certified copy of an original official receipt received by such
Foreign Key Principal showing payment thereof. If such Foreign Key Principal
fails to pay any Non-Excluded Taxes when due to the appropriate taxing authority
or fails to remit to the Agent the required receipts or other required
documentary evidence, such Foreign Key Principal shall indemnify the Agent and
the Lenders for any incremental taxes, interest or penalties that may become
payable by the Agent or any Lender as a result of any such failure. The
agreements in this Section shall survive the termination of this Agreement and
the payment of all amounts payable hereunder.
(c) With respect to each Foreign Key Principal, it will maintain in New
York, New York a Person acting as its agent to receive on its behalf and on
behalf of its property service of process and capable of discharging the
functions of process agent of such Foreign Key Principal. Each Foreign Key
Principal shall be permitted to designate and so maintain such agent to serve
solely as agent for service of process on matters relating to this Agreement.
Each Foreign Key Principal shall provide to the Agent when requested from time
to time a notice setting forth the name and address of its process agent in such
location and a
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confirmation from such process agent acknowledging its appointment as process
agent and its undertaking to so act on behalf of such Foreign Key Principal.
10. Authority of Agent. Each Key Principal acknowledges that the rights and
responsibilities of the Agent under this Agreement with respect to any action
taken by the Agent or the exercise or non-exercise by the Agent of any option,
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Agent and any Key Principal, the Agent shall be conclusively presumed to be
acting as agent for the Lenders with full and valid authority so to act or
refrain from acting, and no Key Principal shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.
11. Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by facsimile
transmission) and, unless otherwise expressly provided herein, shall be deemed
to have been duly given or made (a) in the case of delivery by hand, when
delivered, (b) in the case of delivery by mail, three days after being deposited
in the mails, postage prepaid, (c) in the case of delivery by overnight courier,
one Business Day after being delivered to a nationally recognized overnight
courier service, with shipping charges paid for delivery on the next Business
Day, or (d) in the case of delivery by facsimile transmission, when sent and
receipt has been electronically confirmed, addressed as follows:
(a) if to the Agent or any Lender, at its address or transmission number
for notices provided in Section 9.2 of the Credit Agreement; and
(b) if to any Key Principal, at its address or transmission number for
notices set forth on Exhibit A hereto.
The Agent, each Lender and each Key Principal may change its address and
transmission numbers for notices by notice in the manner provided in this
Section.
12. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
13. Integration. This Agreement represents the agreement of each Key
Principal with respect to the subject matter hereof and there are no promises or
representations by the Agent or any Lender relative to the subject matter hereof
not reflected herein.
14. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None of the
terms or provisions of this Agreement may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by each Key Principal
and the
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Agent, provided that any provision of this Agreement may be waived by
the Agent and the Lenders in a letter or agreement executed by the Agent or by
telex or facsimile transmission from the Agent.
(b) Neither the Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 14(a) hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Agent or any Lender, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the Agent
or such Lender would otherwise have on any future occasion.
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
15. Section Headings. The section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
16. Successors and Assigns. This Agreement shall be binding upon the
permitted successors and assigns of each Key Principal and shall inure to the
benefit of the Agent and the Lenders and their successors and assigns.
17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
18. Submission To Jurisdiction; Waivers. Each Key Principal hereby
irrevocably and unconditionally:
(a) submits for itself and its property solely with respect to any legal
action or proceeding relating to this Agreement, or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive personal
jurisdiction of the courts of the State of New York in New York County, the
courts of the United States of America for the Southern District of New York
sitting in the borough of Manhattan, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
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(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Key Principal at
its address set forth on Exhibit A hereto or in the case of any Foreign Key
Principal to its process agent referenced in Section 9(c) or at such other
address of which the Agent shall have been notified pursuant hereto;
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it may
have to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.
19. Judgment Currency. The obligations and liabilities of any Foreign Key
Principal hereunder to the Agent or any Lender shall, notwithstanding any
judgment in a currency (the "judgment currency") other than Dollars, be
discharged only to the extent that on the Business Day following the receipt by
such Agent or Lender (as the case may be) of any sum adjudged to be so due in
the judgment currency such Agent or Lender (as the case may be) may in
accordance with normal banking procedures purchase Dollars with the judgment
currency; if the amount of Dollars so purchased is less than the sum originally
due to such Agent or Lender (as the case may be) in Dollars, such Foreign Key
Principal agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify such Agent or Lender (as the case may be) against such
loss, and if the amount of Dollars so purchased exceeds the sum originally due
to such Agent or Lender (as the case may be), such Agent or Lender (as the case
may be) agrees to remit to such Foreign Key Principal such excess.
20. Acknowledgments. Each Key Principal hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a party;
(b) neither the Agent nor any Lender has any fiduciary relationship with or
duty to such Key Principal arising out of or in connection with this Agreement
or any of the other Loan Documents to which it is a party, and the relationship
between each Key Principal, the Borrower and the other Loan Parties, on one
hand, and Agent and Lenders, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among any Key Principal, the Borrower, any of the other Loan Parties
and the Lenders.
21. WAIVERS OF JURY TRIAL. EACH KEY PRINCIPAL AND THE AGENT HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
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<PAGE>
22. Recourse. Notwithstanding anything to the contrary contained herein or
in any other Loan Document, the Agent and the Lenders hereby agree that no
shareholder, member, partner, other equity holder, officer, director, employee
or agent of any Key Principal that is not a natural person shall have any
liability (contractual or otherwise) in respect of any Recourse Obligation and
the Agent and the Lenders shall not have recourse against the assets of any
shareholder, member, partner, other equity holder, officer, director, employee
or agent of any such Key Principal in respect of any Recourse Obligations;
provided, that the foregoing shall not limit any Recourse Obligation of any Key
Principal.
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<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this
Agreement to be duly executed and delivered by its duly authorized
officer as of the day and year first above written.
WHITEHALL: WHITEHALL STREET REAL ESTATE
LIMITED PARTNERSHIP V
By: WH ADVISORS, L.P. V, general
partner
By: WH ADVISORS, INC. V, general
partner
By:
------------------------------
Name:
Title:
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<PAGE>
PROMETHEUS:
----------------------------------
David Rockefeller
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<PAGE>
STATE OF )
) ss.
COUNTY OF )
On the _____ day of ___________, 1997, before me came David Rockefeller, to me
known to be the individual described in and who executed the foregoing
instrument, and acknowledged that he executed the same.
Name:___________________________________
NOTARY PUBLIC, State of_________________
Commission No.__________________________
My Commission Expires:__________________
[NOTARIAL SEAL]
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<PAGE>
TISHMAN SPEYER: TISHMAN SPEYER CROWN EQUITIES
BY: TISHMAN SPEYER ASSOCIATES,
LIMITED PARTNERSHIP, its General
Partner
By:______________________________________
Name: Jerry Speyer
Title: General Partner
BY: TSE LIMITED PARTNERSHIP, its
General Partner
By:_______________________________________
Name: Charles H. Goodman
Title: General Partner
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EXOR: EXOR GROUP S.A.
By:_______________________________________
Name:
Title:
19
<PAGE>
NIARCHOS: BONITO INVESTMENTS, LDC
By:_______________________________________
Name:
Title:
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<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
KEY PRINCIPALS
- ----------------------------------------------------------------------------------------------------------------------------------
Key Principal Notice Address Percentage
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Whitehall LP 85 Broad Street 50.0%
New York, New York 10004
Attention: Chief Financial Officer
Fax: 212-357-5505
- ----------------------------------------------------------------------------------------------------------------------------------
Rockefeller c/o Richard E. Salomon 4.5455%
Room 5600
30 Rockefeller Plaza
New York, New York 10112
Fax: 212-765-6817
with a copy to:
Milbank Tweed Hadley & McCloy
One Chase Manhattan Plaza
New York, New York 10005
Attn: Peter Herman
Fax: 212-530-5219
- ----------------------------------------------------------------------------------------------------------------------------------
Tishman Speyer 520 Madison Avenue 4.5455%
New York, New York 10022
Attn: Jerry I. Speyer
Fax: 212-319-1745
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attn: Thomas P. Dore, Jr.
Fax: 212-450-5738
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A-1
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
EXOR Voltastrasse, 61 20.4545%
Zurich, SWITZERLAND CH804-1
Attn: N. Peter Ruys
Fax: 011 41 1 262 4212
with a copy to:
EXOR America, Inc.
375 Park Avenue
New York, New York 10152
Attn: G. Andrea Botta
Fax: 212-355-5690
- ----------------------------------------------------------------------------------------------------------------------------------
Bonito c/o Venus Shipping Company, S.A. 20.4545%
Villa Bijou
19 Avenue de la Costa
Monte Carlo, MC 98000
MONACO
Fax: 011 377 93 301 672
with a copy to:
Milbank Tweed Hadley & McCloy
One Chase Manhattan Plaza
New York, New York 10005
Attn: Peter Herman
Fax: 212-530-5219
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A-2
