SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------------
FORM 10-K
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(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended December 31, 1996.
[ ] 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) 332-6535
(Registrant's telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------ ---------------------
None None
Securities Registered Pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of the
registrant is $0.
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 2 Trust Ownership Interests as
of March 31, 1997.
Documents Incorporated by Reference
Rockefeller Center Properties Inc.'s Proxy Statement for its 1996 Special
Meeting of Stockholders, dated February 14, 1996, is incorporated by reference
as a supplemental response to the information required by Items 10, 11, 12 and
13 of Part III of this Annual Report on Form 10-K.
- - -----------------------------
* As successor in interest to Rockefeller Center Properties, Inc. (Commission
File No. 1-8971).
<PAGE>
RCPI TRUST
TABLE OF CONTENTS
PAGE
PART I
ITEM 1. Business ................................................... 1
ITEM 2. Property ................................................... 4
ITEM 3. Legal Proceedings .......................................... 8
ITEM 4. Submission of Matters to a Vote of
Security Holders ........................................... 11
PART II
ITEM 5. Market for the Registrant's Common Equity
and Related Stockholder Matters ............................ 12
ITEM 6. Selected Financial Data .................................... 13
ITEM 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations .............. 16
ITEM 8. Financial Statements and Supplementary Data ................ 23
ITEM 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure ..................... 53
PART III
ITEM 10. Directors and Executive Officers
of the Registrant .......................................... 54
ITEM 11. Executive Compensation ..................................... 55
ITEM 12. Security Ownership of Certain
Beneficial Owners and Management ........................... 56
ITEM 13. Certain Relationships and Related
Transactions ............................................... 57
PART IV
ITEM 14. Exhibits, Financial Statements Schedules
and Reports on Form 8-K .................................... 58
(i)
<PAGE>
PART I
Item 1. Business
Organization and Purpose
Rockefeller Center Properties, Inc. (referred to as "RCPI" or the
"Predecessor") was incorporated in Delaware on July 17, 1985. RCPI was
formed to permit public investment in two convertible participating
mortgages totaling $1.3 billion (collectively the "Mortgage Loan"). On
September 19, 1985, the Company issued 37,510,000 shares of common stock
(the "Common Stock") in an initial public offering registered under the
Securities Act of 1933 (the "Act"). Simultaneously with the offering of
the Common Stock, the Company issued Current Coupon Convertible
Debentures due 2000 and Zero Coupon Convertible Debentures due 2000
(collectively, the "Convertible Debentures"). In December of 1993,
750,704 warrants issued in connection with the settlement of litigation
were exercised and a like number of shares of Common Stock were issued.
In December 1994, the Company issued $150 million of Floating Rate Notes
(the "Floating Rate Notes") due December 31, 2000 to Goldman Sachs
Mortgage Company, and $75 million of 14% Debentures (the "14%
Debentures") due December 31, 2007 to Whitehall Street Real Estate
Limited Partnership V ("Whitehall"). In conjunction with the issuance of
the 14% Debentures, the Company also issued 4,155,927 Warrants
("Warrants") to acquire newly issued common stock exercisable at $5 per
share and 5,394,541 Stock Appreciation Rights ("SARS") convertible into
14% Debentures or under certain circumstances, Warrants.
The net proceeds of the initial Common Stock offering and the offerings
of Convertible Debentures were used by RCPI to make 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 a wholly-owned
subsidiary of RGI.
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 RCPI, a wholly owned subsidiary of RCPI Holdings,
Inc. ("Holdings") and RCPI Investors LLC ("LLC"), each owning a 50%
undivided beneficial interest. The primary purpose of the Company is to
own, manage and operate the landmarked buildings and public space known
as Rockefeller Center (the "Property"), and to be successor in interest
to RCPI.
On July 10, 1996, pursuant to the Merger Agreement (as described below),
Holdings purchased all the outstanding Common Stock of RCPI 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 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, (as
amended, the "Merger Agreement"), entered into between RCPI and a group
of investors (the "Investor Group") the members of which are Exor Group
S.A., Prometheus Investors, L.L.C., Rockprop, L.L.C., Troutlet
Investments
1
<PAGE>
Corporation, Gribble Investments (Tortola) BVI, Inc., Weevil Investments
(Tortola) BVI, Inc. and 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 has 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 RCPI was held by
Holdings and the Warrants and SARS, previously held by Whitehall were
contributed through Holdings to RCPI and canceled. Thereafter, on the
Effective Date, RCPI transferred substantially all of its assets
(including the Mortgage Loan) and liabilities to the Company and the
Company became the successor to RCPI under the Indenture governing the
Convertible Debentures.
In addition, under the Merger Agreement, Goldman Sachs Mortgage Company
("GSMC"), which was a party to the Merger Agreement for this purpose,
agreed to make a line of credit available to the Predecessor (the "GSMC
Loan") during the period between November 7, 1995 and the earlier of (1)
the consummation of the merger contemplated by the Merger Agreement or
(2) any termination of the Merger Agreement. The Predecessor had
borrowed $63.7 million under the GSMC Loan. The principal balance and
accrued interest was repaid in full on July 17, 1996 by the Company.
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 its
partners filed a Chapter 11 reorganization plan (the "Chapter 11 Plan")
that contemplated ownership of the Property being turned over to RCPI 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 Investors
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 ("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, the
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.
2
<PAGE>
Repurchases and Repayments of Debt
Between 1987 and 1992, the Predecessor repurchased and retired 36.4% of
the original principal amount of the Current Coupon Convertible
Debentures and 38.4% of the face amount of the Zero Coupon Convertible
Debentures. These repurchases were financed with unsecured short term
nonconvertible borrowings. Subsequently, these borrowings were replaced
with Floating Rate Notes and 14% Debentures in December 1994. The
remaining Current Coupon Convertible Debentures were redeemed on August
28, 1996 and the principal amount of $213,170,000 plus accrued interest
was paid on that date. The remaining Zero Coupon Convertible Debentures
accrete to a face value of $586,185,000. A total of $106,296,000 of the
outstanding principal plus accrued interest of the Floating Rate Notes
was prepaid on July 17, 1996. As of December 31, 1996, an aggregate
principal amount of $10 million remained outstanding. See also Note 6 to
the Financial Statements provided in response to Item 8.
Competitive Market
The information set forth in this section is based upon data supplied by
Cushman Wakefield, Inc. ("C&W") and publicly available sources. The
statements with respect to real estate markets and market trends made in
this section and elsewhere in this Report are based upon the conclusions
of C&W as experts and is based upon their 1996 year end office summary.
New York City is the largest office real estate market in the United
States. Its central business district has two primary concentrations,
midtown and downtown Manhattan. The Property is located in Manhattan's
midtown office market. The midtown market comprises approximately 221
million square feet of rentable office space, of which 169 million
square feet of existing space is considered Class "A" or "Prime". The
market principally serves corporate headquarters and financial, legal,
communications, advertising and other service firms, as well as foreign
businesses and governments, for which prestige, central location and
amenities are factors justifying the higher rental rates charged for
prime office space.
Leasing activity in Midtown Manhattan reached a healthy 18.6 million
square feet during 1996, exceeding last year's level by nearly 11%. The
Grand Central submarket recorded the highest activity with 3.7 million
square feet leased. As total leasing outweighed new space
availabilities, absorption was positive, totaling 1.8 million square
feet.
The midtown Manhattan office space market has historically been
cyclical. Following a low point in 1975, the market rebounded sharply at
the end of the decade because of the low level of new construction and
improvement in the local and national economies. During the period
1975-1979, vacancies decreased sharply from approximately 15% to
approximately 2% and average asking rents doubled to approximately
$20.50 per square foot at the start of 1980. By 1985, rents had reached
$38 per square foot, and vacancies had risen to over 9%. An
unprecedented amount of new construction accounted for approximately 22
million square feet added to the market from 1986 to 1992. For prime
space, vacancy levels reached 17.2% and average asking rents topped $40
per square foot in 1990; by December 1995, the vacancy rate had
decreased to 12.1%, while asking rents averaged $34.97 per square foot,
and by December 1996, the overall vacancy rate had dropped to 11.1% and
for prime space, the vacancy rate dropped to 10.0%. The prime space
vacancy rate of 10% is the lowest in ten years.
Class "A" direct space asking rental prices in Midtown, which have been
steadily rising, increased to $35.74 per square foot in 1996, up from
$34.97 at the end of 1995.
The Property competes with a large number of existing prime office
properties in the midtown Manhattan market. The Property will be subject
to competition in the future from continuing new office construction in
midtown Manhattan. As of December 31, 1996, there was one additional
building under construction in the midtown market, 4 Times Square,
which will serve as the new headquarters for Conde Naste, Inc. and the
law firm of Skadden Arps, Slate, Meagher, and Flom.
Within the midtown market, certain high quality office buildings have
historically achieved above-average rents and rent rate stability due to
various factors including their location, amenities and name
recognition. Changes in local, national and international economic
conditions will continue to affect the midtown Manhattan office space
market, so it is anticipated there will be fluctuations of both
occupancy levels and rental rates.
3
<PAGE>
Item 2. Property
Rockefeller Center is among the best-known commercial real estate
complexes in the world, offering an architecturally renowned combination
of office, retail and public space. Occupying most of the three blocks
(approximately 12 acres) between 48th and 51st Streets and Fifth Avenue
and Avenue of the Americas in midtown Manhattan, the Property includes
12 buildings, all but one of which were completed between 1932 and 1940,
having approximately 7.4 million square feet of rentable office, retail,
storage and studio space as measured in accordance with the measurement
standards promulgated by the Real Estate Board of New York in 1987
(including the NBC space). The Company owns the fee interest in the
entire Property, except the NBC Space, and except the land underlying a
portion of the building at 600 Fifth Avenue, which is owned by an
unrelated party and leased to the Company through the year 2000 at an
annual rent of $650,000. This lease provides for three renewal periods
of 21 years each.
Also included in the Property is Radio City Music Hall (the "Music
Hall"), which is leased to Radio City Music Hall Productions, Inc.
("RCMHP") at $5,400,000 annually through January 31, 1998. RCMHP is a
wholly-owned subsidiary of an affiliate of the Previous Owner. RCMHP is
obligated under the lease to pay for the expenses of maintaining the
interior of the Music Hall and the property taxes assessed against the
portion of the building housing the Music Hall. The Company is
responsible for the expenses of exterior maintenance.
4
<PAGE>
The following table provides summary information regarding the buildings
included in the Property.
<TABLE>
<CAPTION>
At December 31, 1996
---------------------------------
Number of Rentable area Occupancy
Building Year opened stories (sq.ft.)(1) percentage
-------- ----------- --------- ------------- ----------
<S> <C> <C> <C> <C>
GE (2) 1933 69 2,289,904 93.2
NBC Studio (2) 1933 10 384,592 100.0
GE West (2) 1933 16 188,814 100.0
1270 Avenue of the Americas (3) 1932 32 478,602 67.0
Associated Press 1938 16 469,128 83.8
International 1935 40 1,239,226 83.9
British Empire 1933 9 123,596 92.3
La Maison Francaise 1933 9 127,570 88.2
One Rockefeller Plaza 1937 35 566,231 75.7
Ten Rockefeller Plaza 1939 17 346,986 79.2
Simon & Schuster 1940
and Addition 1955 21 729,836 90.7
600 Fifth Avenue 1952 29 434,258 82.7
Additional Property (4) ---- ---- 35,385 100.0
----------- -----
Subtotal 7,414,128 87.0
=====
Less: NBC Space 1,514,431
----------
Total 5,899,697 83.6
========== =====
</TABLE>
-----------------
(1) Measured in accordance with the standard for measurement promulgated
by the New York Real Estate Board in 1987. Includes office, retail
and storage space. ( Includes NBC Space of 1,514,431 square feet.)
(2) Includes NBC Space in the GE, NBC Studio, and GE West buildings, of
941,025, 384,592 and 188,814, respectively.
(3) Radio City Music Hall is included as part of this building but
excluded from the rentable area and occupancy percentage data.
(4) Includes the underground concourse and lower plaza and includes the
Television City and Hurley's restaurant buildings.
Rockefeller Center is one of the world's largest privately-owned
business and entertainment complexes. In addition to the buildings
described above, the Property contains a wide range of amenities
including the Channel Gardens landscaped promenade, the lower plaza used
as an ice skating rink during colder weather and otherwise for outdoor
dining, a six-story 725-car parking garage and extensive off-street
truck delivery areas, an underground retail and pedestrian concourse
connecting all buildings and providing access to an on-site subway
station, roof gardens and the Music Hall. Retail space within the
Property includes approximately 200 shops and 35 restaurants. The murals
and statuary which are an integral part of the Property include over one
hundred major works by more than thirty artists, including the renowned
sculpture "Prometheus". A private street, Rockefeller Plaza, parallels
Fifth Avenue and the Avenue of the Americas and bisects the Property.
Under the existing zoning regulations, there is allocable to the
Property the right to develop up to approximately 2.0 million square
feet of floor area in excess of the floor area presently constructed
thereon. These excess development rights may be transferred to other
properties or, with the approval of the New York City Landmarks
Preservation Commission (the "Landmarks Commission"), used to construct
additional floor area within the Property. The Company has reserved the
right to transfer these rights. See also Note 3 to the Financial
Statements provided in response to Item 8.
In April 1985, the Landmarks Commission granted landmark status to the
exterior of all of the buildings in the Property. The Landmarks
Commission has also designated as landmarks portions of the interiors of
the GE and International Buildings and the interior of the Music Hall.
As a result of these
5
<PAGE>
designations, alteration, demolition and reconstruction of the Property
will under most circumstances be subject to approval of the Landmarks
Commission.
On March 24, 1997, the Company signed a 30 year lease with Christie's
auction house. Christie's will move its New York headquarters to a new
300,000 square foot facility in the Property consisting of auction,
gallery, and office space.
Appraisal Value
The Property was appraised as of December 31, 1994 by Douglas Elliman
appraisal and Consulting Division ("Douglas Elliman") an independent
appraisal firm. In a report dated January 11, 1995, Douglas Elliman
concluded that, as of December 31, 1994, the fair market value of the
Property was $1.25 billion, an increase of $100 million from the value
assigned in an appraisal conducted by that same firm as of December 31,
1993. The Weitzman Group, Inc. ("The Weitzman Group"), an independent
real estate consulting firm, reviewed the Douglas Elliman appraisal and
issued a review and concurrence report dated February 15, 1995 stating
that, based upon the review described in such report, the Weitzman Group
concurred with the Douglas Elliman appraisal and that, in the opinion of
the Weitzman Group, the market value estimated by Douglas Elliman did
not vary by more than 5 percent from the market value The Weitzman Group
would have estimated in a full and complete appraisal of the same
interests. Copies of the 1994 appraisal and concurrence report were
filed as exhibits to the Predecessor's Current Report on Form 8-K filed
on February 22, 1995 and a copy of the 1993 appraisal was filed as an
exhibit to the Predecessor's Current Report on Form 8-K filed on
February 22, 1994. Based on the price of $8.00 per share paid for the
Predecessor's common stock, the fair market value of the Property on the
Effective Date, prior to the sale of the NBC Space, was $1.21 billion.
6
<PAGE>
Property Management
On July 10, 1996 the Company entered into a management agreement (the
"Management Agreement") with Tishman Speyer Properties ("the Agent"), an
affiliate of Rockprop, L.L.C. which expires on July 17, 1999. The
Management Agreement will automatically renew for additional one year
terms unless either party gives notice of election not to renew. The
Agent earns a management fee based on 1.5% of Gross Revenues, as
defined. See also Item 13. Certain Relationships and Related
Transactions.
Real Estate Taxes
The targeted and actual assessed valuation of the Property and the real
estate taxes payable by the Property are set forth in the following
schedule for the fiscal year periods encompassing the years ended
December 31, 1994, 1995, 1996 and 1997. The schedule reflects the final
settlement negotiated with the Tax Commission of the City of New York
during 1995. This settlement reduced the targeted assessed valuation of
the Property. Increases in targeted assessed valuation are required to
be phased-in over a five-year period commencing with the fiscal year for
which it is first increased.
7
<PAGE>
($ in millions)
Targeted
Assessed Actual Assessed Real Estate
Fiscal Year Valuation Valuation Taxes Payable
July 1-June 30 (1) (2) (1) (2) (1) (2)
-------------- ------- ------- -------
1993/94 $359.7 $359.7 $39.6
1994/95 $320.8 $320.8 $34.0
1995/96 $318.2 $318.2 $33.1
1996/97 $345.3 $345.3 $35.4
1997/98 $353.4 $353.4 $36.2(3)
---------------
(1) Excluded amounts applicable to Radio City Music Hall. Real estate
taxes assessed against the Music Hall portions of the Property are
not charged to the Property.
(2) Excluded amounts applicable to the NBC space.
(3) Based on the tax rate for 1996/97 fiscal year.
Item 3. Legal Proceedings
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 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
8
<PAGE>
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, the 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. The
Company intends to vigorously contest these actions.
On July 6, 1995, Charal Investment Company, Inc. commenced a derivative
action against certain of the Predecessor's present and former directors
in the Court of Chancery of the State of Delaware in and for New Castle
County ("Delaware Court of Chancery"). The Predecessor was named as a
nominal defendant. The plaintiff alleged that the directors breached
their fiduciary duties by: (1) using commercial paper proceeds to
repurchase Convertible Debentures in 1987-1992; (2) entering into
interest rate swaps; and (3) making capital distributions to
stockholders during the years 1990 through 1994. The plaintiff filed
several amendments to its complaint and on February 29, 1996, Charal
Investment Company, Inc. filed new actions in the Delaware court of
Chancery purporting to assert both derivative and class counts. On June
5, 1996, Charal filed an amended and supplemental complaint which
repeated the allegations contained in the February 29, 1996 complaint
and added a new class claim against the individual defendants alleging
that they had breached their fiduciary duties by not including certain
information in the proxy statement disseminated in connection with the
Merger. On October 18, 1996, the defendants, including the Company,
moved to dismiss the amended and supplemental complaint. On December 30,
1996, the plaintiff voluntarily dismissed the claim without prejudice.
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 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
9
<PAGE>
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. The Company has been advised that plaintiff intends to dismiss the
New York action voluntarily and to join as plaintiff in the consolidated
Delaware federal action described above.
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 is
substantially similar to the original complaint in In re RCPI. The
defendants are the same in both actions. The Debora complaint alleges
common fraud and deceit in addition to the two federal securities law
violations alleged in In re RCPI.
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.
On November 6, 1996, the parties filed stipulations of dismissal with
prejudice in Zell/Merrill Lynch Real Estate Opportunity Partners Limited
Partnership III ("ZML") v. Rockefeller Center Properties,
10
<PAGE>
Inc., 96 Civ. 1445, in the United States District Court for the 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. ("EOH"), Index No. 106176/96, in
the Supreme Court for the State of New York, New York County, dismissing
all claims, counterclaims and third- party claims with prejudice. In
connection with the dismissal of the two actions, the Company paid in
the aggregate $10.3 million to EOH and ZML.
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.
Item 4. Submission of Matters to a Vote of Security Holders
None
11
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
There is no established public trading market for the Company's Trust
Ownership Interests. There are two (2) record holders of such interests
as of March 31, 1997.
The Company has not paid any dividends since its organization on March
26, 1996. 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 paid, at December 31,
1996 was approximately $63 million. 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 and cash flows used in operating activities of
the Company for the period ending December 31, 1996 of approximately $7
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.
On July 10, 1996, pursuant to the Merger Agreement, Holdings and RCPI
Investors LLC each received a 50% undivided beneficial interest in
the Company for $172 million each. This sale of securities was exempt
from the registration requirements of The Securities Act of 1933, as
amended, by virtue of Section 4(2) thereof due to the fact that there
were only two offerees. See also Item 1. Business.
12
<PAGE>
Item 6. Selected Financial Data
RCPI Trust
Selected Financial Information
(Dollars in thousands)
Statement of Operations Data
(for the period from July 10 through
December 31, 1996)
Gross revenue $88,488
Operating expenses 62,575
Interest expense 30,508
Depreciation and amortization 7,047
Net (loss) (11,642)
Balance Sheet Data (at December 31, 1996)
Real estate 766,627
Total assets 839,672
Debt 473,310
Debt due after one year 463,310
Total liabilities 507,206
Owners' equity 332,466
Other Financial Data (for the period
from July 10 through December 31, 1996)
Net cash (used in) operating activities (6,997)
Net cash provided by investing activities (1) 419,852
Net cash (used in) financing activities (2) (384,090)
Repurchase of Convertible Debentures(3) 213,170
--------------
(1) Included in net cash provided by investing activities is $440,000 of
proceeds received from the sale of the NBC space.
(2) Net cash (used in) financing activities includes cash expended to
retire the Current Coupons, GSMC Facility, and a significant
portion of the Floating Rate Notes.
(3) As of December 31, 1996, the aggregate face value of the
Convertible Debentures repurchased since 1987 was $701,065.
13
<PAGE>
Item 6. Selected Financial Data (Continued)
ROCKEFELLER CENTER PROPERTIES, INC.
(PREDECESSOR)
SELECTED FINANCIAL INFORMATION
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Statement of Operations Data July 9, December 31, December 31, December 31, December 31,
(for the period ended): 1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Revenues (1) $ 38 $ 21,470 $109,285 $113,560 $122,414
--------- --------- -------- -------- --------
Interest Expense 46,984 85,563 77,501 78,343 80,799
General and Administrative 4,774 11,267 4,170 3,728 4,229
Amortization of financing costs (2) 12,421 9,258 705 705 705
Stock appreciation rights liability (4) 2,041 10,795 -- -- --
Effects of the execution and delivery
of the merger agreement (3) (8,232) 99,163 -- -- --
Expenses related to the March 25, 1996
special meeting of the stockholders 422 553 -- -- --
Cost of swap terminations and modifications
related to debt extinguishment -- -- 9,855 3,451 --
Cost of evaluating alternative financing -- -- 1,942 -- --
--------- --------- -------- -------- --------
58,410 216,599 94,173 86,227 85,803
--------- --------- -------- -------- --------
(Loss) income before non-recurring income
and extraordinary item (58,372) (195,129) 15,112 27,333 36,611
--------- --------- -------- -------- --------
Non-recurring income (gain on sales of
portfolio securities) -- -- 31 8,593 --
--------- --------- -------- -------- --------
Extraordinary gain on debt extinguishment -- -- -- -- 2,537
--------- --------- -------- -------- --------
Net (loss) income ($ 58,372) ($195,129) $ 15,143 $ 35,926 $ 39,148
--------- --------- -------- -------- --------
Weighted average shares outstanding 38,261 38,261 38,261 37,510 37,510
========= ========= ======== ======== ========
(Loss) income per share before
extraordinary item ($ 1.53) ($ 5.10) $ 0.40 $ 0.96 $ 0.97
========= ========= ======== ======== ========
Net (loss) income per share ($ 1.53) ($ 5.10) $ 0.40 $ 0.96 $ 1.04
========= ========= ======== ======== ========
</TABLE>
14
<PAGE>
ROCKEFELLER CENTER PROPERTIES, INC.
(PREDECESSOR)
SELECTED FINANCIAL INFORMATION (Cont'd)
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Balance Sheet Data (at end of 1995 1994 1993 1992
period): ---- ---- ---- ----
<S> <C> <C> <C> <C>
Total assets (1)(2) $1,190,776 $1,319,995 $1,317,509 $1,432,210
Total debt 770,667 760,394 756,936 879,284
Total debt due after one year 760,467 760,394 756,936 859,284
Total liabilities 874,177 802,528 792,344 910,360
Total stockholders' equity 316,599 517,467 525,165 521,850
Other Financial Data:
Ratio of earnings to fixed
charges (5) - 1.19X 1.35X 1.45X
Net cash (used in)
provided by operating activities ($17,706) $57,198 $58,231 $62,735
Net cash provided by
investing activities 50,000 14,331 126,668 23,560
Net cash used in financing activities
Excluding dividends paid 28,154 44,015 147,082 22,955
Dividends paid 5,739 24,869 37,697 63,392
Dividends paid per share 0.15 0.65 1.00 1.69
Portion of dividends
representing a return of
capital 100% 39.4% 7.4% 38.2%
Book value per share $8.27 $13.52 $13.73 $13.91
Book value per share
assuming exercise of
Warrants and SARs $7.90 $11.88 - -
Market price per share
(at end of period) $7.625 $5.00 $6.75 $7.625
Repurchase of Convertible Debentures - - - $30,410
</TABLE>
- - ----------------------
(1) On May 11, 1995, the Previous Owners filed for protection under Chapter 11
of the Bankruptcy Code. RCPI's only significant source of income was
interest received on the Mortgage Loan from the Previous Owner.
Due to the significant uncertainties created by the Previous Owners' Chapter
11 filings, RCPI has limited recognition of income on the Mortgage Loan for
the period ended July 9, 1996 and the year ended December 31, 1995 to the
cash actually received from the Previous Owner during this period, which
amounts were $0 and $20,339 respectively.
(2) Included in the amortization of deferred financing costs for the period
ended July 9, 1996 is a write-off of the unamortized balance of $10,565
relating to the debt which was transferred to the Company on the Effective
Date. Included in amortization for the year ended December 31, 1995 is the
write-off of debt issuance costs and letter of intent fees totaling $4,650
relating to the termination of the working capital loan and the Agreement
and Plan of Combination dated as of September 11, 1995, between RCPI and
Equity Office Holdings, L.L.C.
(3) RCPI reflected in its December 31, 1995 financial statements a valuation
reserve, totaling $74,000 to reduce the carrying value of the Mortgage Loan
to reflect the economics of the transactions contemplated by the Merger
Agreement. In addition, RCPI recorded certain transaction costs and expenses
aggregating $25,163 for the year ended December 31, 1995. RCPI adjusted
these costs by $8,232 for the period ended July 9, 1996 to more accurately
reflect the amounts actually paid upon consummation of the Merger and
amounts remaining unpaid.
(4) Due to the increase in the market price of RCPI's Common Stock during the
period ended July 9, 1996 and the year ended December 31, 1995, the Company
was required to increase its liability for the SARs issued in December 1994
and record a current noncash charge to earnings of $2,041 and $10,795
respectively.
(5) For purposes of determining the ratio of earnings to fixed charges, earnings
are defined as net income plus fixed charges. Fixed charges consist of
interest expense and amortization of financing costs. For the year ended
December 31, 1995, earnings were inadequate to cover fixed charges by
$195,129 due to the Company's net loss for the year. The loss was due
primarily to the Previous Owners' failure to pay interest on the Mortgage
Loan after the Previous Owners' Chapter 11 filings (see (1) above).
15
<PAGE>
RCPI TRUST
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The discussion below relates primarily to the results of operations of RCPI for
the period ended July 9, 1996 and the years ended December 31, 1995 and 1994,
and the financial condition and results of operations of the Company for the
period from July 10, 1996 to December 31, 1996. In addition, pro forma operating
statements are presented to provide a meaningful comparison of the results of
operation of the Property for the years ended December 31, 1996 and 1995 as if
the acquisition of the Property and the NBC Sale (see below) had occurred on
January 1, 1995.
Results of Operations - Rockefeller Center Properties, Inc.
RCPI's principle source of revenue for the period ended July 9, 1996 and
December 31, 1995 and 1994 was interest income received on the Mortgage Loan.
For the periods ended July 9, 1996 and December 31, 1995, RCPI limited
recognition of income on the Mortgage Loan to the cash actually received. During
the year ended December 31, 1995, RCPI recognized $20.3 million of revenue,
prior to the Previous Owner filing for Chapter 11 protection on May 11, 1995.
Since that date and through the Effective Date, RCPI did not receive any
interest payments and accordingly no income was recognized. For the year ended
December 31, 1994, RCPI recognized approximately $108.7 million of income on the
Mortgage Loan. This amount exceeded cash actually received by approximately $3.2
million due partially to the amortization of the original issue discount
applicable to the Mortgage Loan and partially to the recognition of income
according to the effective interest method.
Due principally to decreased cash available for investment, other income for the
period ended July 9, 1996 was $38,000 as compared to $1.1 million and $553,000
for the years ended December 31, 1995 and 1994, respectively.
Amortization of deferred debt issuance costs for the period ended July 9, 1996
and the years ended December 31, 1995 and 1994 was $12.4 million, $9.3 million
and $705,000, respectively. The increase from 1994 to 1995 is due partially to
the write off of debt issuance costs and letter of intent fees totaling $4.7
million relating to the termination of the working capital loan and the
Agreement and Plan of Combination between RCPI and Equity Office Holding,
L.L.C., and partially to the issuance of the 14% Debentures and Floating Rate
Notes in December 1994. Included in the period ended July 9, 1996 is the
write-off of the unamortized balance of $10.6 million related to the debt which
was transferred to the Company on the Effective Date.
RCPI 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 July 9, 1996 and December 31, 1995. This adjustment, which is directly
related to the increase in RCPI's stock price, resulted in an expense of $2.0
million and $10.8 million for those periods, respectively. Concurrent with the
Merger, RCPI's SARS and Warrants were canceled.
During the year ended December 31, 1995 RCPI recorded certain transaction costs
and expenses aggregating $25.2 million which reflected the breakup fee related
to the termination of the Combination Agreement, professional fees, and certain
liquidation expenses and other liabilities specifically provided for in the
Merger Agreement. Also during this period, RCPI reduced the carrying value of
the Mortgage Loan by $74 million to reflect the economics of the Merger
Agreement. This total of $99.2 million recognized during the year ended December
31, 1995, was adjusted by $8.2 million during the period ended July 9, 1996 to
more accurately reflect the amounts actually paid upon consummation of the
Merger and amounts remaining unpaid. As a result, a credit is reflected for the
period ended July 9, 1996.
16
<PAGE>
RCPI TRUST
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Cont'd)
During the period ended July 9, 1996 and the year ended December 31, 1995 RCPI
recognized $422,000 and $553,000, respectively of expenses related to the March
25, 1996 special meeting of stockholders. The stockholders approved the Merger
Agreement on that date.
In connection with RCPI's retirement of commercial paper borrowing in 1994, RCPI
exchanged payments with certain counter parties to retire all of the asset swaps
and certain of the liability swaps, thereby reducing the net swap liability
outstanding. As a result of these transactions, RCPI recognized $9.9 million of
expenses for the year ended December 31, 1994.
During the year ended December 31, 1994, RCPI incurred $1.9 million of expenses
in connection with its evaluation of alternative financing.
During the year ended December 31, 1994, RCPI recognized non-recurring income of
$31,000 consisting of gains on sales of portfolio securities.
All debt of RCPI was transferred to the Company on the Effective Date. To
provide a more meaningful comparison to the years ended December 31, 1995 and
1994 interest expense recognized by RCPI for the period January 1 through July
9, 1996 and interest expense recognized by the Company for the period July 10,
1996 through December 31, 1996 have been combined. The following table
illustrates comparative interest expense for the years ended December 31, 1996,
1995 and 1994:
For the years ended December 31,
1996 1995 1994
-------- ------- -------
Current coupon convertible debentures $15,337 $22,979 $22,478
Zero coupon convertible debentures 38,890 33,420 30,320
14% debentures 10,221 10,973 87
Floating rate notes 6,517 14,272 166
GSMC Facility 2,664 153 -
Interest rate swaps and other 3,863 3,766 24,450
------- ------- -------
Total $77,492 $85,563 $77,501
======= ======= =======
The Current Coupon Convertible Debentures were redeemed on August 28, 1996. Due
primarily to the shorter period such Debentures were outstanding during 1996,
interest expense related to these Debentures decreased from 1995 to 1996.
Interest expense increased from 1994 to 1995 due to the recognition of interest
expense according to the effective interest method, by which interest is
calculated on the basis of the average interest expense on the Current Coupons
through maturity.
Interest expense on the Zero Coupons increased each year as a result of accruals
of interest on the increasing accretion of the principal amount. 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.
17
<PAGE>
RCPI TRUST
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Cont'd)
Interest expense on the 14% Debentures, which were issued in December 1994,
accrues at the pay rate of 14%. The fair market value of these Debentures was
adjusted as of the Effective Date. As a result of premium amortization related
to this adjustment, interest expense was lower during 1996.
On September 1, 1995, RCPI 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. As of December 31, 1996 $10 million remained outstanding. Interest
expense related to the Floating Rate Notes decreased due to the smaller
principal balance outstanding during the year ended December 31, 1996. Interest
expense on the swap agreement, which RCPI 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 Facility, which was obtained in November
1995 and repaid in full on July 17, 1996, totaled $2.7 million during the year
ended December 31, 1996.
The decrease in other interest is due primarily to maturities of commercial
paper and the termination of several interest rate swap obligations during 1994.
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 certain interests in certain buildings in the Property ("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 1,514,000 square feet, or 20.5% of the total
area of the Property. At December 31, 1996, the Property, exclusive of the NBC
Space was approximately 83.6% 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.
September 30, 1996 82.8% December 31, 1995 82.7%
June 30, 1996 82.2% September 30, 1995 86.2%
March 31, 1996 83.8% June 30, 1995 85.2%
The following table shows selected lease expirations and vacancy of the Property
as of December 31, 1996. 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.
18
<PAGE>
Square Feet Percent
Year Expiring Expiring
- - ---- ----------- --------
Vacant 965,680 16.4%
1997 378,443 6.4%
1998 302,898 5.1%
1999 224,569 3.8%
2000 486,206 8.2%
2001 105,367 1.8%
Thereafter 3,436,534 58.2%
--------- -----
Total 5,899,697 100.0%
========= ======
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 such Debentures 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 December 31, 1996, the
carrying value of the Debentures, net of unamortized discount, was approximately
$362.2 million.
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 Facility 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.
The Floating Rate Notes mature on March 31, 1997 and bear interest at the London
Interbank Offered Rate ("LIBOR") plus 4%. Interest is paid quarterly on March 1,
June 1, September 1, and December 1. At December 31, 1996, interest was accruing
at 9.50%. On July 17, 1996, outstanding principal in the amount of $106.3
million plus accrued interest of $1.2 million was prepaid. As of December 31,
1996, $10 million of principal remained outstanding.
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. Interest expense is net of the amortization of this
premium. Interest payments are made semi-annually on June 2 and December 2. As
of December 31, 1996, the carrying value of the Debentures was $101.2 million.
Cash Flow
The proceeds from the sale of the NBC Space were used primarily to retire the
Current Coupons, the GSMC Facility, and a significant portion of the Floating
Rate Notes.
19
<PAGE>
The Company expended approximately $12.6 million of legal and consulting fees to
acquire the Property. Since acquisition of the Property, the Company has
expended $2.7 million, $14.4 million and $3.1 million in building improvements,
tenant improvements and leasing commissions, respectively.
The Company believes that its current cash balance and future cash flows from
operations, together with its expected borrowings in an amount currently
believed not to exceed $100 million, 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's statement of operations only reflects activity from the
Effective Date through December 31, 1996, pro forma operating statements for the
years ended December 31, 1996 and 1995 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 period from July 10, 1996
through December 31, 1996, which are not otherwise discussed. For a discussion
of comparative results of operations, refer to the caption "Pro Forma Results of
Operations - The Property."
The Company expended $1.8 million to buy out the lease of a tenant who had filed
for bankruptcy in order to gain control of the underlying space.
For a comparison of interest expense of the Company and RCPI for the years ended
December 31, 1996 and 1995, 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 years ended December 31,
1996 and 1995 as if the acquisition of the Property by the Company had occurred
on January 1, 1995. The pro forma statements of operations are based upon the
Company's statement of operations for the period from July 18, 1996 through
December 31, 1996 and the Previous Owners' statements of operations for the
period from January 1, 1996 through July 17, 1996 and for the year ended
December 31, 1995.
The pro forma statements of operations for the years ended December 31, 1996 and
1995 have been adjusted to show the effect of (i) gross revenues and operating
expenses had the NBC Sale occurred on January 1, 1995; (ii) interest expense had
the GSMC Loan and Current Coupons been repaid in full, and had $106.3 million of
principal on the Floating Rate Notes been paid on January 1, 1995; (iii)
depreciation and amortization expense had the Property been purchased and the
NBC Sale had occurred on January 1, 1995, and (iv) general and administrative
expenses had certain bankruptcy related costs not been incurred by the Previous
Owners and costs related to the NBC Sale had been incurred during 1995.
The pro forma results are for illustrative purposes only, and do not purport to
be indicative of the actual results which would have occurred, nor are they
indicative of future results of operations.
20
<PAGE>
($ In Thousands)
Year ended December 31,
1996 1995
--------- ---------
Gross Revenue:
Rent and other tenant charges $ 177,653 $ 174,856
Interest income 1,483 639
--------- ---------
179,136 175,495
Operating Expenses:
Real estate taxes 33,876 33,867
Real estate tax refund -- (7,535)
Utilities 15,356 14,850
Maintenance, engineering, and other operating
expenses 54,193 52,966
Depreciation and amortization 16,955 16,614
Management fee 5,052 3,059
General and administrative 6,371 10,630
--------- ---------
131,803 124,451
--------- ---------
Earnings before interest 47,333 51,044
Interest expense 55,606 51,166
--------- ---------
Net (loss) ($ 8,273) ($ 122)
========= =========
Rent and other tenant charges increased by $2.8 million for the year ended
December 31, 1996 as compared to the prior year due primarily to increased fixed
rent related to new leases. Occupancy at December 31, 1996 was 83.6% as compared
to 82.7% at December 31, 1995.
The increase in interest income of $844,000 was due primarily to a larger
average cash balance on hand during 1996 as compared to 1995.
On June 29, 1995, the bankruptcy court approved a settlement between the
Previous Owners and New York City that incorporated a reduction in the assessed
valuation of the Property. The agreement for the period from July 1, 1989
through June 30, 1995, resulted in a total New York City real estate tax refund
accruing to the property in the amount of $25.6 million, net of certiorari
attorneys fees. Of the total refund, $15.4 million was credited to existing and
former tenants and $2.7 million reduced the current year real estate tax
expense. The remaining $7.5 million related to prior years and is included under
the caption "Real estate tax refund."
21
<PAGE>
The increase in management fees is due to a renegotiated fee schedule obtained
by the Previous Owners prior to the Company's acquisition of the Property and to
a new management agreement, signed concurrently with the acquisition of the
Property.
The decrease in general and administrative expenses is due primarily to legal
and professional fees related to the NBC Sale, which based on pro forma
calculations, would have been incurred entirely during 1995.
Based on pro forma calculations, interest expense increased by $4.4 million for
the year ended December 31, 1996. This increase is due primarily to increased
interest related to the Zero Coupons. The Zero Coupons compound at 12.10%
annually, which resulted in an additional $4.7 million of expense during 1996.
22
<PAGE>
Item 8. Financial Statements and Supplementary Data
INDEX TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULE
<TABLE>
<S> <C>
I. Financial Statements and Reports of Public Accountants
RCPI Trust (the "Company") and Rockefeller Center Properties, Inc. Page No.
(the "Predecessor") --------
1. Reports of Independent Public Accountants
a. Arthur Andersen LLP..........................................................24
b. Ernst & Young LLP............................................................25
2. RCPI Trust (Company)
a. Balance Sheet as of December 31, 1996........................................26
b. Statement of Operations for the period from July 10, 1996 through
December 31, 1996..........................................................27
c. Statement of Changes in Owners' Equity for the period from July 10, 1996
through December 31, 1996....................................................28
d. Statement of Cash Flows for the period from July 10, 1996 through
December 31, 1996............................................................29
3. Rockefeller Center Properties, Inc. (Predecessor)
a. Balance Sheet as of December 31, 1995........................................30
b. Statements of Operations for the period from January 1, 1996 through
July 9, 1996 and for the years ended December 31, 1995 and 1994..............31
c. Statements of Stockholders' Equity for period from January 1, 1996
through July 9, 1996 and for the years ended
December 31, 1995 and 1994...................................................32
d. Statements of Cash Flows for the period from January 1, 1996
through July 9, 1996 and for the years ended
December 31, 1995 and 1994...................................................33
4. Notes to Financial Statements....................................................35
II. Financial Statement Schedules
Schedule III - Real Estate and Accumulated Depreciation at December 31, 1996...........51
</TABLE>
All other schedules in the applicable accounting regulation of the
Securities and Exchange Commission are not required under the related
instructions or are inapplicable and therefore have been omitted.
23
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Trustees of RCPI Trust:
We have audited the accompanying balance sheet of RCPI Trust (a Delaware
business trust) as of December 31, 1996, and the related statements of
operations, changes in owners' equity and cash flows for the period from July
10, 1996 (commencement of operations) through December 31, 1996. We have also
audited the statements of operations, changes in stockholders' equity and cash
flows of Rockefeller Center Properties, Inc., as more fully described in Note 1,
for the period from January 1, 1996 through July 9, 1996. These financial
statements, and the schedule referred to below, are the responsibility of the
Companies' management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of RCPI Trust as of December 31,
1996, and the results of its operations and its cash flows for the period from
July 10, 1996 (commencement of operations) through December 31, 1996 and the
results of operations, changes in stockholders' equity and cash flows for
Rockefeller Center Properties, Inc. for the period January 1, 1996 through July
9, 1996, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements, described above, taken as a whole. The schedule listed in
the accompanying index to financial statements is presented for purposes of
complying with the Securities and Exchange Commission's rules and are not part
of the basic financial statements. This schedule has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.
/s/ ARTHUR ANDERSEN LLP
New York, New York
February 10, 1997 (except with
respect to the matters discussed
in Note 14 as to which the dates
are March 3, 1997 and March
31, 1997, respectively)
24
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
Board of Directors and Stockholders
Rockefeller Center Properties, Inc.
We have audited the accompanying balance sheet of Rockefeller Center Properties,
Inc. (the "Company") as of December 31, 1995 and the related statements of
operations, changes in stockholders' equity and cash flows for each of the two
years in the period ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Rockefeller Center Properties,
Inc. at December 31, 1995, and the results of its operations and its cash flows
for each of the two years in the period ended December 31, 1995, in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern as more fully described in Note 1 to the
Company's financial statements. The borrowers (collectively, the "Borrower")
under the mortgage loan, the Company's principal asset, filed for protection
under Chapter 11 of the Federal Bankruptcy Code on May 11, 1995. As a result of
these filings and until such time as the Chapter 11 cases have been brought to a
conclusion, the Company does not expect to receive interest payments from the
Borrower, and the Company's ability to enforce its rights under the mortgage
loan has been and will be stayed unless and until the Bankruptcy Court issues an
order permitting the Company to take steps to enforce such rights. The Company
cannot predict either the time it will take to conclude these proceedings or
their ultimate outcome. On November 7, 1995, the Company executed and delivered
an Agreement and Plan of Merger (as amended as of February 12, 1996, the "Merger
Agreement") with an investor group. If the transactions contemplated by the
Merger Agreement are consummated, the stockholders will receive $8.00 in cash
for each of their shares of the Company's Common Stock. Also on November 7,
1995, the Company entered into an agreement that would allow the Company to make
a $200 million publicly registered rights offering should the stockholders not
approve the Merger Agreement. The uncertainties created by the bankruptcy of the
Borrower raise substantial doubt about the Company's ability to continue as a
going concern if the Merger Agreement is not approved by the Company's
stockholders or if the transactions contemplated by the Merger Agreement are not
consummated. The financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
/s/ ERNST & YOUNG LLP
New York, New York
February 29, 1996
25
<PAGE>
RCPI TRUST
BALANCE SHEET
AS OF DECEMBER 31, 1996
($ in thousands)
ASSETS
Real Estate:
Land $158,149
Buildings and improvements 596,880
Tenant improvements 14,405
Furniture and fixtures 3,911
--------
773,345
Less: Accumulated depreciation 6,718
--------
766,627
Cash and cash equivalents 28,765
Restricted cash 10,027
Accounts receivable 20,337
Deferred costs, net of accumulated amortization of $329 5,486
Accrued rent 8,430
--------
Total Assets $839,672
========
LIABILITIES AND OWNERS' EQUITY
Liabilities:
Zero coupon convertible debentures, net of unamortized
discount of $224,030 $362,155
14% debentures (includes premium of $26,155) 101,155
Floating rate notes 10,000
Accrued interest payable 7,234
Accounts payable and accrued expenses 19,383
Tenant security deposits payable 7,279
--------
Total Liabilities 507,206
Contingencies
Owners' Equity 332,466
--------
Total Liabilities and Owners' Equity $839,672
========
See notes to financial statements
26
<PAGE>
RCPI TRUST
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM JULY 10, 1996 (COMMENCEMENT
OF OPERATIONS) THROUGH DECEMBER 31, 1996
($ in thousands)
Revenues:
Base rental $ 76,496
Escalations and percentage rents 6,562
Interest and other income 5,430
--------
Total revenues 88,488
--------
Expenses:
Interest 30,508
Real estate taxes 15,585
Payroll and benefits 10,375
Repairs, maintenance and supplies 8,137
Utilities 6,539
Cleaning 7,253
Professional fees 8,735
Insurance 1,451
Management and accounting fees 1,424
General and administration 1,297
Tenant buyout costs 1,779
Depreciation and amortization 7,047
--------
Total expenses 100,130
--------
Net Loss $(11,642)
========
See notes to financial statements
27
<PAGE>
RCPI TRUST
STATEMENT OF CHANGES IN OWNERS' EQUITY
FOR THE PERIOD FROM JULY 10, 1996 (COMMENCEMENT
OF OPERATIONS) THROUGH DECEMBER 31, 1996
($ in thousands)
<TABLE>
<CAPTION>
Balance Balance
Percentage July 10, 1996 December 31,
Interest 1996 Activity 1996
-------------- ----------- ------------- ------------
<S> <C> <C> <C> <C>
Rockefeller Center Properties, Inc.:
Initial capital contribution 50% $172,054 $ - $172,054
Net loss - (5,821) (5,821)
-------- -------- --------
Total 172,054 (5,821) 166,233
-------- -------- --------
RCPI Investors LLC:
Initial capital contribution 50% 172,054 - 172,054
Net loss - (5,821) (5,821)
-------- -------- --------
Total 172,054 (5,821) 166,233
-------- -------- --------
Total Owners' Equity $344,108 $(11,642) $332,466
======== ======== ========
</TABLE>
See notes to financial statements
28
<PAGE>
RCPI TRUST
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JULY 10, 1996 (COMMENCEMENT
OF OPERATIONS) THROUGH DECEMBER 31, 1996
($ in thousands)
Cash Flows from Operating Activities:
Net loss $ (11,642)
Adjustments to reconcile net loss to net cash
used in operating activities:
Amortization of original issue discount and premium 19,263
Depreciation and amortization 7,047
Increase in restricted cash (3,260)
Increase in accounts receivable (5,138)
Decrease in prepaid expenses 18,169
Increase in accrued rent (8,430)
Decrease in accounts payable and accrued expenses (3,959)
Decrease in accrued interest payable (19,047)
---------
Net cash used in operating activities (6,997)
---------
Cash Flows from Investing Activities:
Repayment on mortgage loan receivable 440,000
Cash acquired as part of Transfer 2,800
Additions to buildings and improvements (2,728)
Additions to tenant improvements (14,405)
Additions to deferred costs (5,815)
---------
Net cash provided by investing activities 419,852
---------
Cash Flows from Financing Activities:
Payment of current coupon debentures (213,170)
Payment of floating rate notes (107,891)
Payment of GSMC facility (63,029)
---------
Net cash used in financing activities (384,090)
---------
Increase in cash and cash equivalents 28,765
Cash and cash equivalents, at July 10, 1996 -
---------
Cash and cash equivalents, at December 31, 1996 $ 28,765
=========
See notes to financial statements
29
<PAGE>
ROCKEFELLER CENTER PROPERTIES, INC.
(Predecessor)
BALANCE SHEET
AS OF DECEMBER 31, 1995
($ in thousands)
ASSETS
Loan receivable and interest receivable,
net of valuation reserve of $74,000 and
net of unamortized discount of $34,906 $1,176,220
Deferred debt issuance costs, net 12,421
Cash and cash equivalents 1,298
Other assets 837
----------
Total Assets $1,190,776
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Current coupon convertible debentures due 2000 $ 213,170
Zero coupon convertible debentures due 2000, net of
unamortized discount of $225,902 360,283
Floating rate notes due 2000 116,296
14% debentures due 2007, net of unamortized discount of $4,282 70,718
GSMC loan 10,200
Accrued interest payable 61,914
Stock appreciation rights 13,406
Accounts payable and accrued expenses 3,027
Accrued transaction costs and expenses 25,163
----------
Total Liabilities 874,177
----------
Contingencies
Stockholders' Equity:
Common stock, $.01 par value:
150,000,000 shares authorized;
38,260,704 shares issued and outstanding 383
Additional paid-in capital 707,545
Distributions to stockholders in excess of net income (391,329)
----------
Total Stockholders' Equity 316,599
----------
Total Liabilities and Stockholders' Equity $1,190,776
==========
See notes to financial statements.
30
<PAGE>
ROCKEFELLER CENTER PROPERTIES, INC.
(Predecessor)
STATEMENTS OF OPERATIONS
($ in thousands, except per share data)
<TABLE>
<CAPTION>
For the period from Years Ended
January 1, 1996 through December 31,
July 9, 1996 1995 1994
----------------------- ---- -----
<S> <C> <C> <C>
Revenues:
Loan interest income $ - $ 20,339 $108,732
Other income 38 1,131 553
--------- --------- --------
38 21,470 109,285
--------- --------- --------
Expenses:
Interest expense:
Current coupon convertible debentures 11,642 22,979 22,478
Zero coupon convertible debentures 18,985 33,420 30,320
14% debentures 5,790 10,973 87
Floating rate notes 8,013 17,858 166
GSMC Facility 2,554 153 -
Commercial paper and other - 180 24,450
--------- --------- --------
46,984 85,563 77,501
General and administrative 4,774 11,267 4,170
Amortization of deferred debt issuance costs 12,421 9,258 705
Increase in liability for stock appreciation rights 2,041 10,795 -
Effects of the execution and delivery of the
merger agreement (8,232) 99,163 -
Expenses related to the March 25, 1996 special
meeting of stockholders 422 553 -
Cost of swap terminations related
to debt extinguishment - - 9,855
Cost of evaluating alternative financing - - 1,942
--------- --------- --------
58,410 216,599 94,173
--------- --------- --------
(Loss) income before non-recurring income (58,372) (195,129) 15,112
Non-recurring income (gain on sales of portfolio
securities) - - 31
--------- --------- --------
Net (loss) income ($ 58,372) ($ 195,129) $ 15,143
========= ========= ========
Net (loss) income per share ($ 1.53) ($ 5.10) $ 0.40
========= ========= ========
</TABLE>
See notes to financial statements.
31
<PAGE>
ROCKEFELLER CENTER PROPERTIES, INC.
(Predecessor)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
($ in thousands, except per share data)
FOR THE PERIOD FROM JANUARY 1, 1996 THROUGH JULY 9, 1996 AND FOR
THE YEARS ENDED DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
Distributions
Additional to stockholders Total
Common Stock paid-in in excess of stockholders'
Shares Amount capital net income equity
------ ------ ---------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Balance at
December 31, 1993 38,260,704 $383 $705,517 ($180,735) $525,165
Issuance of warrants 2,028 2,028
Net income 15,143 15,143
Distributions to
stockholders
($0.65 per share) (24,869) (24,869)
----------- ---- -------- --------- --------
Balance at
December 31, 1994 38,260,704 383 707,545 (190,461) 517,467
Net loss (195,129) (195,129)
Distributions to
stockholders
($0.15 per share) (5,739) (5,739)
----------- ---- -------- --------- --------
Balance at
December 31, 1995 38,260,704 383 707,545 (391,329) 316,599
Net loss (from January 1,
through July 9, 1996) (58,372) (58,372)
----------- ---- -------- --------- --------
Balance at July 9, 1996 38,260,704 $383 $707,545 ($449,701) $258,227
=========== ==== ======== ========= ========
</TABLE>
See notes to financial statements.
32
<PAGE>
ROCKEFELLER CENTER PROPERTIES, INC.
(Predecessor)
STATEMENTS OF CASH FLOWS
($ in thousands)
<TABLE>
<CAPTION>
For the period from Years Ended
January 1, 1996 through December 31,
July 9, 1996 1995 1994
-------------------------- -------- ----------
<S> <C> <C> <C>
Cash flow from operating activities:
Loan interest received $ - $ 20,339 $ 105,495
Other interest income received 38 1,131 998
Interest paid on floating rate notes (7,626) (17,114) -
Interest paid on 14% debentures (5,308) (9,917) -
Interest paid on commercial paper and other - (198) (27,020)
Interest paid on current coupon convertible debentures (27,712) - (17,053)
Payments for accounts payable, accrued expenses
and other assets (13,463) (11,947) (5,222)
-------- -------- ---------
Net cash (used in) provided by operating activities (54,071) (17,706) 57,198
-------- -------- ---------
Cash flows from investing activities:
Draw downs on letter of credit support - 50,000 -
Portfolio sales, maturities and redemptions - - 14,331
-------- -------- ---------
Net cash provided by investing activities - 50,000 14,331
-------- -------- ---------
Cash flows from financing activities:
Dividends paid - (5,739) (24,869)
Floating rate note principal repayment - (33,704) -
Interim financing cost - (4,650) -
Net proceeds from GSMC loan 52,829 10,200 -
Proceeds from issuance of floating rate notes,
14% debentures, warrants and SARs net of
issuance costs - - 212,522
Maturities of commercial paper, net - - (246,682)
Payments to terminate interest rate swaps - - (9,855)
-------- -------- ---------
Net cash provided by (used in) financing activities 52,829 (33,893) (68,884)
-------- -------- ---------
Net (decrease) increase in cash and cash equivalents (1,242) (1,599) 2,645
Cash and cash equivalents at the beginning of the year 1,298 2,897 252
-------- -------- ---------
Cash and cash equivalents at the end of the year $ 56 $ 1,298 $ 2,897
======== ======== =========
</TABLE>
(Continued on 34)
See notes to financial statements.
33
<PAGE>
ROCKEFELLER CENTER PROPERTIES, INC.
(Predecessor)
STATEMENTS OF CASH FLOWS (CONT'D)
($ in thousands)
RECONCILIATION OF NET (LOSS) INCOME TO NET CASH (USED IN) PROVIDED BY OPERATING
ACTIVITIES:
<TABLE>
<CAPTION>
For the period from Years Ended
January 1, 1996 through December 31,
July 9, 1996 1995 1994
---------------------- --------- --------
<S> <C> <C> <C>
Net (loss) income ($58,372) ($195,129) $15,143
Adjustments to reconcile net (loss) income to net cash
(used in) provided by operating activities:
Effects of the execution and delivery of the
merger agreement - 99,163 -
Gain on sale of portfolio securities - - (31)
Cost of swap terminations related to
debt extinguishment - - 9,855
Amortization of discount:
Zero coupon convertible debentures 18,985 33,420 30,320
14% debentures 188 357 -
Decrease in deferred debt issuance costs
and other costs, net 12,280 8,270 1,130
Increase in interest receivable and
amortization of loan receivable discount, net - - (2,793)
(Decrease) increase in accrued interest payable and amortized
unpaid discount on commercial paper (12,836) 24,576 3,135
Increase in stock appreciation rights liability 2,041 10,795 -
(Decrease) increase in accounts payable and
accrued expenses (16,357) 842 439
-------- -------- --------
Net cash (used in) provided by operating activities ($54,071) ($ 17,706) $57,198
======== ======== ========
</TABLE>
See notes to financial statements.
34
<PAGE>
RCPI TRUST
NOTES TO FINANCIAL STATEMENTS
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 LLC ("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 qualifies and has 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 are 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
35
<PAGE>
(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 has
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 6), previously
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 6).
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 Investors 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 in the Company's accompanying statement of operations.
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 December 31, 1996 and the results of
operations, changes in owners' equity and cash flows for the period from
July 10, 1996 through December 31, 1996. The accompanying financial
statements also present the Predecessor's balance sheet as of December 31,
1995 and the results of operations, changes in stockholders' equity and
cash flows for the period from January 1, 1996 through July 9, 1996 and for
the years ended December 31, 1995 and 1994. Pro forma results of operations
for the Company, as if the acquisition of the Property and the NBC Sale had
occurred as of January 1, 1996, are presented in Note 13 to the financial
statements.
36
<PAGE>
The Merger was accounted for by the Predecessor under the purchase
accounting method whereby the purchase price was allocated among the assets
acquired and liabilities assumed based on their respective fair market
values on July 10, 1996. These assets and liabilities were then transferred
down to the Company on the same day.
The Transfer on July 17, 1996 was also accounted for under the purchase
method whereby the Company recorded the value of the assets and liabilities
received from the Previous Owners based on their respective fair market
values as of that date.
Real Estate
Buildings and improvements are carried at cost and depreciated using the
straight-line method over their estimated useful lives of forty years.
Significant renovations or improvements which extend the economic useful
life of the assets are capitalized.
The Company evaluates the carrying value of the Property based on the
requirements of the Statement of Financial Accounting Standards No. 121
"Accounting for the Impairment of Long Lived Assets". As of December 31,
1996, there was no impairment in the value of the Property.
Tenant improvements are depreciated over the terms of the respective
leases. Furniture, fixtures and equipment are depreciated using the
straight-line method over their expected useful lives of five to ten years.
Expenditures for maintenance and repairs are expensed as incurred.
Restricted Cash
On July 17, 1996, the Company entered into a Collateral Agreement with
Chase Manhattan Bank, pursuant to certain tenant lease agreements. The
Collateral Agreement establishes five letters of credit, as defined, in the
aggregate amount of approximately $10.4 million. As of December 31, 1996,
three letters of credit remained outstanding and the restricted cash
balance in the Company's cash collateral account was approximately $2.7
million.
The Company also maintains tenant security deposits in a restricted cash
account. At December 31, 1996, the balance in the restricted cash account
for tenant security deposits was approximately $7.3 million.
Deferred Costs
Deferred costs include costs incurred in the successful negotiation of
leases, including brokerage and legal and are being amortized on a
straight-line basis over the terms of the respective leases. Deferred costs
also include costs incurred in connection with the formation of the Company
and are being amortized over a period of five years.
Debt issuance costs include fees and costs incurred by the Predecessor to
obtain long-term financing, and were amortized over the terms of the
respective loans on a basis which approximated the interest method. The
Predecessor had unamortized deferred debt issuance costs related to their
outstanding Convertible Debentures, Floating Rate Notes and 14% Debentures
as of December 31, 1995 of approximately $3.5 million, $5.8 million and
$3.1 million, respectively. On July 9, 1996, the Predecessor fully
amortized the remaining deferred debt issuance costs due to the Merger (see
Note 1).
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Revenue Recognition
Base rental revenue is reported on a straight-line basis over the terms of
the respective leases. Differences between base rental revenue and
contractual amounts are recorded in the accompanying balance sheet as
accrued rent. The impact of the straight-line adjustment increased base
rental revenues for the Company by approximately $8.4 million for the
period ending December 31, 1996. Escalations and percentage rents, which
are provided for in the leases, are recognized as income when earned and
their amounts can be reasonably estimated.
Statements of Cash Flows
The statement of cash flows for the period ending December 31, 1996 is
presented in accordance with the indirect method. The statements of cash
flows for the period from January 1, 1996 through July 9, 1996 and for the
years ended December 31, 1995 and 1996 are presented in accordance with
the direct method.
The Company and the Predecessor consider all highly liquid assets with
original maturities of three months or less to be cash equivalents.
Interest paid by the Company on its debt obligations was approximately
$30.3 million for the period ending December 31, 1996.
On July 10, 1996, pursuant to the Merger Agreement, the Predecessor
transferred all of its assets (including the Mortgage Loan) totaling
approximately $1.220 billion and liabilities (including the note payable
to LLC of approximately $172 million) totaling approximately $1.048
billion to the Company in exchange for its 50% undivided beneficial
ownership interest. Simultaneously, LLC contributed its note receivable of
$172 million for its 50% undivided beneficial ownership interest. These
transactions are considered non cash investing and financing activities.
On July 17, 1996, the Company obtained title to the Property, subsequent
to the NBC Sale, and certain other assets (net of cash acquired of
approximately $2.8 million) totaling approximately $795.4 million and
assumed liabilities totaling approximately $18.8 million in full
satisfaction of the Mortgage Loan. This transaction is considered a non
cash investing activity.
3. THE PROPERTY
Rockefeller Center
The Property consists of twelve landmarked buildings and public space
located in midtown Manhattan, New York City. The Company owns the fee
interest in the entire Property, except for the NBC Space and the land
underlying a portion of the building located at 600 Fifth Avenue which is
subject to a ground lease. The ground lease held by The Minister, Elders
and Deacons of the Reformed Protestant Dutch Church of the City of New
York (the "Church Lease") provides for an annual rent of $650,000 through
the year 2000. Thereafter, the Church Lease provides for three renewal
periods of 21 years each at annual rents of 6%, 7% and 8%, respectively,
of the value of the land (exclusive of improvements and unencumbered by
the Church Lease) appraised for its highest and best use, determined at
the beginning of each such renewal term. The ground rent expense is
included in general and administration in the accompanying statement of
operations.
At December 31, 1996, approximately 4.9 million square feet representing
approximately 83% of total rentable square feet was leased to tenants
under operating leases. Of the total rentable square feet, approximately
23% or 1.4 million square feet is under lease to six tenants in the
financial services, legal or publishing industry. These leases are
scheduled to expire in years 2000 through 2014.
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Future Minimum Rentals
Future minimum rentals to be received under non-cancelable tenant leases
at December 31, 1996 are as follows:
($ in Thousands)
1997 $154,195
1998 145,620
1999 141,578
2000 135,939
2001 127,231
Thereafter 922,069
The Rockefeller Center Tower Condominium
On July 17, 1996, in connection with the NBC Sale, NBC purchased 53.75% of
the office condominium units within 30 Rockefeller Plaza, 1250 Avenue of
the Americas and the Studio Building (collectively known as the
"Condominium Buildings"). The Company amended and restated the Declaration
of The Rockefeller Tower Condominium (the "Condominium") to establish the
ownership rights of the office condominium units between NBC and the
Company. The purpose of the Condominium is to operate and maintain the
Common Elements, as defined in the Operation, Maintenance and Reciprocal
Easement Agreement ("REA") and the Unit Owners Agreement ("UOA"). The
Board, as defined, of the Condominium consists of three members appointed
by the Company and two members appointed by NBC. The Executive Committee,
as defined, within the Board consists of the three members appointed by
the Company. On behalf of the Condominium, the Company is responsible for
determining and collecting all costs pursuant to the REA and UOA
(collectively the "Shared Costs").
For financial reporting purposes, the Company's portion of Shared Costs is
allocated to the respective expense accounts based on the REA and UOA in
the accompanying statement of operations. The following represents the
summary of Shared Costs for the period ending December 31, 1996:
The Rockefeller Center Tower Condominium
Summary of Shared Costs
($ in thousands)
(Unaudited)
Payroll and benefits $ 4,082
Repairs, maintenance and supplies 3,100
Utilities 3,085
Cleaning 2,657
General and administration 2,093
Management and accounting fees 668
--------
Shared Costs, as defined $ 15,685
========
Shared Costs, NBC $ 5,645
Shared Costs, the Company 10,040
--------
$ 15,685
========
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RCP Associates
Effective July 17, 1996, the Company and Rock-Around-The-Block, Inc.
("Rock Block"), an affiliate of the Previous Owner, entered into the
Amended and Restated Agreement of Limited Partnership of RCP Associates
("RCPA"). The Company holds a 45% general partnership interest and Rock
Block holds a 55% limited partnership interest. The purpose of RCPA is to
act as landlord under the Amended and Restated Ground Lease (the "RCPA
Ground Lease"), whereas the Company acts as tenant. The RCPA Ground Lease
has a 200 year term expiring in the year 2196. The net annual ground rent
charged to the Company is $1. Upon commencement of the RCPA Ground Lease,
the Company paid $200 to RCPA in order to satisfy the net annual ground
rent over the term of the lease. The RCPA Ground Lease covers the
underlying land of certain buildings at the Property. Pursuant to the RCPA
Ground Lease, at any time after the Transfer Date, as defined, the Company
shall have the right to purchase for $1 the fee interest of RCPA in the
Property.
As described in the RCPA Partnership Agreement and RCPA Ground Lease, the
Company has the right to develop additional floor area in excess of the
floor area presently constructed at the Property. These excess development
air rights may be transferred to other properties or, with the approval of
the New York City Landmarks Preservation Commission, used to construct
additional floor area over certain buildings at the Property.
4. MORTGAGE LOAN AND INTEREST INCOME
The Mortgage Loan, which was issued in the original face amount of $1.3
billion, was made pursuant to a Mortgage Loan Agreement between the
Predecessor and the Previous Owners on September 19, 1985 (as amended, the
"Mortgage Loan Agreement"), and was evidenced by two notes. Following the
Previous Owners' failure to make the interest payment due on May 31, 1995,
the Predecessor drew down the full amount available under the $50 million
of letters of credit which supported, among other things, payment of Base
Interest, as defined, on the Mortgage Loan. Due to the significant
uncertainties caused by the filing of the Chapter 11 Plan and solely for
accounting purposes, this $50 million was applied to reduce the carrying
value of the Mortgage Loan to $1.25 billion. Subsequent to the Previous
Owners' Chapter 11 Plan filing and prior to the execution and delivery of
the Merger Agreement, the Predecessor had based the value assigned to the
Property and hence to the Mortgage Loan on an independent appraisal as of
December 31, 1994, which was supported by a concurring review. The terms
of the Merger Agreement indicated that the market value of the Property
was less than its carrying value. As such, the Predecessor further reduced
the carrying value of the Mortgage Loan by $74 million as of December 31,
1995. The impact of the writedown is included on the Predecessor's
statement of operations as a component of "effects of the execution and
delivery of the merger agreement", which reflects the economics of the
transactions contemplated by the Merger Agreement.
The Predecessor limited recognition of income on the Mortgage Loan for the
year ended December 31, 1995 and the period from January 1, 1996 through
July 9, 1996 to the cash actually received from the Previous Owners. The
Company continued this income recognition policy of the Predecessor from
the date it received the Mortgage Loan (July 10, 1996) from the
Predecessor to the date it acquired the Property (July 17, 1996) from the
Previous Owners in full satisfaction of the Mortgage Loan.
5. FAIR VALUE OF FINANCIAL INSTRUMENTS
In assessing the fair value of financial instruments, at December 31, 1996
and 1995, the Company and the Predecessor, respectively, have used a
variety of methods and assumptions which are based on estimates of market
conditions and risks existing at the time. In cases where quoted market
prices are not available, fair values are based on estimates using present
value and other techniques. Such techniques are significantly affected by
the assumptions used, including the discount rate and estimates of future
cash flows. Derived fair value estimates cannot be substantiated by
comparison to independent markets and may not reflect the values that
could be realized in any immediate settlement of the instrument or
otherwise. The aggregate fair value amounts may not necessarily represent
the underlying value of the Company or the Predecessor.
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The following methods and assumptions were used by the Company and the
Predecessor in estimating their fair value disclosures for financial
instruments:
Cash and cash equivalents
The carrying amounts of cash and cash equivalents approximate their fair
value.
Debt
The fair values of the Zero Coupons and Current Coupons are estimated
using quoted market prices. The fair value of all other debt instruments
are estimated using discount cash flow analysis, based on incremental
borrowing rates currently available to the Company or the Predecessor for
debt with similar terms and maturity.
As of December 31, 1996 and 1995, the estimated fair value of the Zero
Coupons was approximately $373 million and $333 million, respectively, as
compared to its carrying amount of approximately $362 million and $360
million, respectively. As of December 31, 1995, the estimated fair value
of the Current Coupons was approximately $235 million, as compared to its
carrying amount of approximately $213 million. As of December 31, 1996 and
1995, the carrying values of all other debt instruments approximated their
estimated fair values.
Off-balance-sheet financial instruments
Fair values for the Predecessor's off-balance-sheet financial instruments
(interest rate swaps) were based on market quotes. The Predecessor used
interest rate swaps to manage interest rate risk on a portion of its
floating rate debt.
6. 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. On July 10, 1996, the Indenture was amended to
eliminate this convertible feature. At such time, the Company became the
successor to the Predecessor under the amended Indenture.
Upon maturity, the Convertible Debentures are convertible to
nonconvertible floating rate notes, at the Company's option. After
conversion, 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 the
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).
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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 were 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 and, pursuant to the
Amended Indenture, are secured by the Property.
The Current Coupons bore interest from the date of issuance until December
31, 1994 at the rate of 8% per annum, and thereafter 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
$213,170,000 plus accrued interest.
Interest expense recorded by the Company for the Zero Coupons and Current
Coupons was approximately $19.9 million and $3.7 million, respectively,
for the period from July 10, 1996 through December 31, 1996.
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 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 plus accrued
interest was prepaid by the Company, including a prepayment penalty of
approximately $1.6 million.
Pursuant to the Amended and Restated Loan Agreement (the "GSMC Facility")
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 February 28, 1997 (see
Note 14) and provides for an Additional Advance, as defined, up to a
maximum outstanding balance of $60 million. As of December 31, 1996, no
amounts have been drawn on the Additional Advance and the balance remains
at $10 million.
The Floating Rate Notes bear interest based on 90-day LIBOR plus 4% which
is reset two business days prior to each interest payment date. At
December 31, 1996 and 1995, the interest rate in effect was 9.28% and
9.88%, respectively. The weighted average interest rate was 9.48% for the
period from July 10, 1996 through December 31, 1996, for the Company, and
9.50%, 10.17% and 10.38% for the period from January 1, 1996 through July
9, 1996 and for the years ended December 31, 1995 and 1994, respectively,
for the Predecessor. Interest is payable quarterly on March 1, June 1,
September 1, and December 1 of each year. Interest expense for the Company
on the Floating Rate Notes was approximately $622,000 for the period from
July 10, 1996 through December 31, 1996. As of July 17, 1996, the GSMC
Facility is secured by a guarantee from the Investor Group.
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. Interest expense incurred by the Company prior to the
repayment was approximately $110,000.
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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, payable semi-annually on June 2 and December 2.
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. Interest expense, net of premium amortization of
$641,000, on the 14% Debentures was approximately $4.5 million for the
period from July 10, 1996 through December 31, 1996.
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
(each June and December 2), 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 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. The non cash charge to earnings was
approximately $2.0 million and $10.8 million for the period from January
1, 1996 through July 9, 1996 and for the year ended December 31, 1995,
respectively. 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.
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. As a result, the Predecessor
recorded, as a cost of swap terminations, $9.9 million for the year ended
December 31, 1994. The remaining three contracts have an aggregate
notional amount of $105 million and each expires during 1998.
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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 weighted
average fixed rate of interest semi-annually at 9.64% for the years ended
December 31, 1996 and 1995, respectively. The Company received a weighted
average variable rate as of December 31, 1996 of 5.71%. The Predecessor
received a weighted average variable rate as of December 31, 1995 of
5.89%. As of December 31, 1996 and 1995, the weighted average interest
rate of swaps outstanding for the Company and the Predecessor were 3.93%
and 3.75%, respectively.
The aggregate net interest expense relating to the swap agreements for the
period from July 10, 1996 through December 31, 1996 for the Company and
the period from January 1, 1996 through July 9, 1996 and the years ended
December 31, 1995 and 1994 for the Predecessor were approximately $1.9
million, $ 2.1 million, $3.6 million and $5.5 million, respectively.
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 December 31, 1996, the carrying amount of
all interest rate swap agreements was reported as a liability by the
Company of approximately $5.2 million, based on information supplied by
the swap counterparties to the swap contracts. The Company recorded an
adjustment of approximately $142,000 to properly mark to market the swaps
as of December 31, 1996 and reflected the adjustment as reduction of
interest expense in the Company's statement of operations.
7. CONTRIBUTIONS, DISTRIBUTION AND NET LOSS PER SHARE
Pursuant to the Stock Subscription and Stockholders Agreement dated July
9, 1996 that organized Holdings and the Limited Liability Company
Agreement dated July 9, 1996 that organized LLC (hereinafter Holdings, and
LLC will be collectively referred to as the "Owners"), the Owners are
required to provide additional contributions up to the Maximum Additional
Mandatory Contribution, as defined, totaling $60 million. The Maximum
Additional Mandatory Contribution shall be used to repay amounts
outstanding under the GSMC Facility and to fund unforeseen capital
expenditures and similar contingencies reasonably necessary to protect and
maintain the value of the Property. No additional contributions were made
to the Company by the Owners since their initial capital contributions on
July 10, 1996.
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 paid, at December 31, 1996 was
approximately $63 million. 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 and cash flows used in operating activities of the Company for the
period ending December 31, 1996 of approximately $7 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 period from January 1, 1996
through July 9, 1996, and for the years ended December 31, 1995 and
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1994. For each of these periods, 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.
8. INCOME TAXES
The Company, formed as a Delaware business trust, is taxable as a
partnership for Federal, state and local income tax reporting purposes. No
provision for income taxes is made in the accompanying financial
statements for the Company since such taxes are liabilities of the Owners
and depend on their respective tax positions. Further, the owners' equity
accounts reflected in the Company's accompanying financial statements
differ from the amounts reported on the Company's Federal income tax
return due to differences in accounting policies adopted for financial and
tax reporting purposes.
No provisions for current or deferred income taxes have been made by the
Predecessor on the basis that it has qualified under the Code as a REIT
and has distributed at least 95% of its annual net income as computed for
tax purposes to stockholders. To the extent that such distributions exceed
such income, the excess will be treated as a return of capital. Net
capital gains generated by the Predecessor are proportionately distributed
to the stockholders as net capital gains dividends. During the period
January 1, 1996 through July 9, 1996, the Predecessor had no taxable
income and did not make any distributions to stockholders. During the
years ended December 31, 1995 and 1994, the Predecessor made per share
distributions to stockholders of $0.15 and $0.65, respectively, of which
approximately $0.15 and $0.26, respectively, represented returns of
capital, and $0 and $0.369, respectively, represented ordinary income, and
$0 and $0.021, respectively, represented a net capital gain dividend.
Through December 31, 1995, the cumulative return of capital paid was $5.25
per share. During 1995, due to the uncertainties created by the Previous
Owners' Chapter 11 Plan, the Predecessor paid only one dividend in April.
Under the terms of the Merger Agreement, the Predecessor was prohibited
from paying additional dividends unless required to do so to maintain REIT
status. During 1994, dividends were paid in April, July, October and
December.
As of December 31, 1995, the aggregate tax basis of the Predecessor's net
assets exceeded the amounts reported on the financial statements by
approximately $113 million. This difference relates primarily to amounts
that will be recognized for tax purposes when paid or realized. For the
year ended December 31, 1994, no significant difference existed between
the aggregate tax basis of the Predecessor's net assets and the amounts
reported on the financial statements.
9. GENERAL AND ADMINISTRATIVE AND OTHER EXPENSES
General and administrative expenses includes compensation and benefits for
the Predecessor's employees, rent and related facility costs, director's
and officers' liability insurance premiums, registrar and transfer agent
fees, debenture trustee fees, legal, audit and financial advisory fees and
stockholder reporting costs. The increase in general and administrative
expenses for 1994 to 1995 is principally due to increased legal fees,
investor relations related expenses and financial advisory fees
principally due to actions taken as a result of the Previous Owners'
Chapter 11 Plan.
During the year ended December 31,1995, the Predecessor incurred
approximately $99.2 million of expenses related to the effects of the
execution and delivery of the Merger Agreement including the writedown of
the Mortgage Loan (as discussed in Note 4) and certain transaction costs
and expenses aggregating approximately $25.2 million. These transaction
costs and expenses included the accrual for the break up fee related to
the termination of the Combination Agreement entered into by the
Predecessor, EOH and ZHL (see Note 10).
For the period from January 1, 1996 through July 9, 1996, these costs were
adjusted by the Predecessor by $8.2 million to more accurately reflect the
amounts actually paid upon consummation of the Merger and amounts
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remaining unpaid. As a result, a credit of $8.2 million is reflected on
the accompanying statement of operations of the Predecessor for the period
from January 1, 1996 through July 9, 1996.
10. 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 the plaintiffs' motion, and on February 5, 1997,
the court entered judgment on that claim in the total amount, including
pre-judgment interest, of approximately $1.1 million. 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 was scheduled to commence on February 24, 1997.
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, the
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. The Company intends to vigorously
contest these actions.
On July 6, 1995, Charal Investment Company, Inc. commenced a derivative
action against certain of the Predecessor's present and former directors
in the Court of Chancery of the State of Delaware in and for New Castle
County ("Delaware Court of Chancery"). The Predecessor was named as a
nominal defendant. The plaintiff alleged that the directors breached their
fiduciary duties by: (1) using commercial paper proceeds to repurchase
Convertible Debentures in 1987-1992; (2) entering into interest rate
swaps; and (3) making capital distributions to stockholders during the
years 1990 through 1994. The plaintiff filed several amendments to its
complaint and on February 29, 1996, Charal Investment Company, Inc. filed
new actions in the Delaware court of Chancery purporting to assert both
derivative and class counts. On June 5, 1996, Charal filed an amended and
supplemental complaint which repeated the allegations contained in the
February 29, 1996 complaint and added a new class claim against the
individual defendants alleging that they had breached their fiduciary
duties by not including certain information in the proxy statement
disseminated in connection with the Merger. On October 18, 1996, the
defendants, including the Company, moved to dismiss the amended and
supplemental complaint. On December 30, 1996, the plaintiff voluntarily
dismissed the claim without prejudice.
46
<PAGE>
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. The action is entitled Charal Investment Co. v. Rockefeller
et. al., Civil Action No. 96-543 ("Charal II"). 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, recision 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). On January 31, 1997, all
defendants moved to dismiss the complaint for failure to state a claim.
That motion is pending.
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 Charal II. The Company has been advised that plaintiff
intends to dismiss the New York action voluntarily and to join as
plaintiff in the consolidated Delaware federal action described above.
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 plaintiffs 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. 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
47
<PAGE>
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.
On November 6, 1996, the parties filed stipulations of dismissal with
prejudice in Zell/Merrill Lynch Real Estate Opportunity Partners Limited
Partnership III ("ZML") v. Rockefeller Center Properties, Inc., 96 Civ.
1445, in the United States District Court for the 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. ("EOH"), Index No. 106176/96, in the Supreme Court for
the State of New York, New York County, dismissing all claims,
counterclaims and third-party claims with prejudice. In connection with
the dismissal of the two actions, the Company paid in the aggregate $10.3
million to EOH and ZML.
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.
11. RELATED PARTY TRANSACTIONS
On July 10, 1996, the Company entered into a management agreement (the
"Management Agreement"), with an affiliate of Rockprop, L.L.C., (the
"Agent") which expires on July 17, 1999. The Management Agreement will
automatically renew for additional one year terms unless either party
gives notice of election not to renew. The Agent earns a management fee
based on 1.5% of Gross Revenues, as defined. For the period ending
December 31, 1996, the Agent earned approximately $1.3 million. Of total
management fees earned by the Agent, the Company and NBC incurred
approximately $909,000 and $432,000, respectively.
In addition, the Company pays the Agent an accounting fee pursuant to the
Management Agreement. The payment is equal to $1,134,000 for the first
year to be increased each year by an additional 4% of the sum of $254,000
plus the aggregate amount of the prior year increases. For the period
ending December 31, 1996, the total accounting fee was approximately
$515,000.
The Agent also earns commissions for leasing services provided to the
Company. For the period ending December 31, 1996, total leasing
commissions paid to the Agent were approximately $85,000. As of December
31, 1996, the Company owes approximately $443,000 to the Agent for leasing
commissions.
The Agent also earns fees for cleaning and development fees. For the
period ending December 31, 1996, the Agent earned approximately $291,000
in cleaning fees. Of total cleaning fees earned by the Agent, NBC incurred
approximately $16,000 related to these fees. For the period ending
December 31, 1996, the Company incurred all development fees of
approximately $36,000.
Prior to the commencement of the Management Agreement, the Agent provided
consulting and other services related to the transaction in the amount of
approximately $2.4 million. GSMC also provided consulting and other
services related to the transaction in the amount of approximately
$574,000. These costs were capitalized to the Property as transaction
costs.
48
<PAGE>
12. INTERIM FINANCIAL INFORMATION (Unaudited)
($ in thousands, except per share data)
<TABLE>
<CAPTION>
RCPI TRUST
1996 1Q 2Q 3Q 4Q
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues N/A N/A $38,490 $49,998
Net loss N/A N/A ($11,446) ($ 196)
Net loss per share N/A N/A N/A N/A
---------------------------------------------------------------------------------------------
Rockefeller Center Properties, Inc.
1996 1Q 2Q 3Q 4Q
---------------------------------------------------------------------------------------------
Revenues $14 $22 $2 N/A
Net loss ($28,588) ($18,000) ($11,784) N/A
Net loss per share ($0.75) ($0.47) ($0.31) N/A
---------------------------------------------------------------------------------------------
1995 1Q 2Q 3Q 4Q
---------------------------------------------------------------------------------------------
Revenues $20,446 $339 $556 $129
Net loss ($7,478) ($17,818) ($141,078) ($28,755)
Net loss per share ($0.20) ($0.46) ($3.69) ($0.75)
---------------------------------------------------------------------------------------------
1994 1Q 2Q 3Q 4Q
---------------------------------------------------------------------------------------------
Revenues $27,270 $27,262 $27,417 $27,336
Net income (loss) $6,667 $6,551 $3,321 ($1,396)
Net income (loss) per share $0.17 $0.17 $0.09 ($0.03)
</TABLE>
13. PRO FORMA FINANCIAL INFORMATION
To provide a more meaningful comparison of results of operations, pro forma
statements of operations have been presented for the years ended December 31,
1996 and 1995 as if the acquisition of the Property by the Company had occurred
on January 1, 1995. The pro forma statements of operations are based upon the
Company's statement of operations for the period from July 18, 1996 through
December 31, 1996 and the Previous Owners' statements of operations for the
period from January 1, 1996 through July 17, 1996 and for the year ended
December 31, 1995.
The pro forma statements of operations for the years ended December 31, 1996 and
1995 have been adjusted to show the effect of (i) gross revenues and operating
expenses had the NBC Sale occurred on January 1, 1995; (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, 1995; (iii)
depreciation and amortization expense had the Property been purchased and the
NBC Sale had occurred on January 1, 1995, and (iv) general and administrative
expenses had certain bankruptcy related costs not been incurred by the Previous
Owners and costs related to the NBC Sale had been incurred during 1995.
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.
Year Ended
December 31,
1996 1995
--------- ---------
Gross Revenues: $ 179,136 $ 175,495
Less:
Operating expenses (131,803) (124,451)
Interest expense (55,606) (51,166)
--------- ---------
Net Loss ($ 8,273) ($ 122)
========= =========
49
<PAGE>
December 31, 1995 was adjusted to give effect to interest expense had the
Previous Owners not defaulted on the Mortgage Loan in May 1995.
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.
Year Ended
December 31,
------------
1996 1995
---------- -------
Gross Revenues: $180,636 $202,451
Less:
Operating expenses (130,131) (142,299)
Interest expense (52,047) (110,630)
---------- ---------
Net Loss ($ 1,542) ($ 50,478)
========== ==========
14. SUBSEQUENT EVENTS
As discussed in Note 10, Bear, Stearns & Co., Inc. and Donaldson, Lufkin &
Jenrette Securities Corporation commenced an action against the
Predecessor in the Supreme Court of New York. 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
the course of the trial, the parties agreed to a settlement. Pursuant to
the settlement agreement, the Company paid the plaintiffs $2 million, and
the plaintiffs dismissed the lawsuit with prejudice. The 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 March 31, 1997, the GSMC Facility was amended to extend the maturity
date of the Floating Rate Notes to April 30, 1997.
50
<PAGE>
RCPI TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
(Dollars in thousands)
<TABLE>
<CAPTION>
Column A Column B Column C Column D
-------- -------- -------- --------
Cost Capitalized
Initial Cost Subsequent to Acquisition(1)
------------------------ -----------------------------
Building and Building and
Description Encumbrances Land Improvements Land Improvements
----------- ------------ ---- ------------ ---- ------------
<S> <C> <C> <C> <C> <C>
GE Building (a) 46,715 165,626 - 1,515
International Building (a) 29,984 106,308 - 4,548
One Rockefeller Plaza (a) 12,890 45,701 - 2,479
600 Fifth Avenue (a) - 33,442 - 39
Ten Rockefeller Plaza (a) 14,835 52,598 - 83
Simon & Schuster (a) 10,535 37,351 - 1,667
Associated Press (a) 10,625 37,669 - 5,866
1270 Ave. of the Americas/Radio City Music Hall (a) 16,636 58,981 - 790
La Maison Francaise (a) 6,449 22,864 - 120
British Empire Building (a) 6,909 24,496 - 26
Additional Property (a) 2,571 9,116
--------- ------------ --------------- -------------
158,149 594,152 0 17,133
========= ============ =============== =============
</TABLE>
<TABLE>
<CAPTION>
Column A Column E Column F
-------- -------- --------
Gross Amount at Which
Carried at Close of Period
-----------------------------------------------
Building and Accumulated
Description Land Improvements Total Depreciation
----------- ---- ------------ ----- ------------
<S> <C> <C> <C> <C>
GE Building 46,715 167,141 213,856 1,738
International Building 29,984 110,856 140,840 1,161
One Rockefeller Plaza 12,890 48,180 61,070 483
600 Fifth Avenue 0 33,481 33,481 349
Ten Rockefeller Plaza 14,835 52,681 67,516 550
Simon & Schuster 10,535 39,018 49,553 421
Associated Press 10,625 43,535 54,160 530
1270 Ave. of the Americas/Radio City Music Hall 16,636 59,771 76,407 300
La Maison Francaise 6,449 22,984 29,433 240
British Empire Building 6,909 24,522 31,431 572
Additional Property 2,571 9,116 11,687 95
---------------- ---------------- ------------ ----------------
158,149 611,285 769,434 6,439
================ ================ ============ ================
</TABLE>
<TABLE>
<CAPTION>
Column A Column G Column H Column I
-------- -------- -------- --------
Life on which
Date of Date Depreciation
Description Construction Acquired is calculated (b)
----------- ------------ -------- -----------------
<S> <C> <C> <C>
GE Building 1933 1996 40 years
International Building 1935 1996 40 years
One Rockefeller Plaza 1937 1996 40 years
600 Fifth Avenue 1952 1996 40 years
Ten Rockefeller Plaza 1939 1996 40 years
Simon & Schuster 1940 1996 40 years
Associated Press 1938 1996 40 years
1270 Ave. of the Americas/Radio City Music Hall 1932 1996 40 years
La Maison Francaise 1933 1996 40 years
British Empire Building 1933 1996 40 years
Additional Property 1996 40 years
</TABLE>
(1) Tenant improvements of $14,405,000 are included and are being depreciated
over the life of the respective lease.
51
<PAGE>
RCPI TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
DECEMBER 31, 1996
(In thousands)
The changes in real estate for the year ended December 31, 1996 are as follows:
July 17, 1996
to
December 31, 1996
-----------------
Real estate balance at beginning
of period $594,152
Improvements 17,133
------------------
Balance at close of period $611,285
==================
The changes in accumulated depreciation, exclusive of amounts relating to
equipment and furniture and fixtures for the year ended December 31, 1996 are as
follows:
July 17, 1996
to
December 31, 1996
------------------
Balance at beginning of period -
Depreciation for period 6,439
------------------
Balance at end of period 6,439
==================
52
<PAGE>
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Due to a change in ownership of the Property pursuant to the Merger,
Arthur Andersen LLP was appointed to replace Ernst & Young LLP as the
principal accountants. The Board of Trustees of the Company
recommended the decision to change accountants.
Ernst & Young LLP's report on the financial statements at December
31, 1995 and for the two years ended December 31, 1995 did not
contain an adverse opinion or a disclaimer of opinion. However,
their report included an explanatory paragraph which discusses
uncertainties which raised substantial doubt about the Company's
ability to continue as a going concern. The report also stated that
the financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
There were no disagreements during the last two fiscal years preceding
such change in ownership with Ernst & Young LLP on any matter of
accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreement, if not resolved to the
satisfaction of Ernst & Young LLP, would have caused Ernst & Young LLP
to make reference to the subject matter of such disagreement in
connection with its report.
On November 14, 1996, the Company engaged Arthur Andersen LLP as its
principal accountants.
53
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant.
The following information is furnished with respect to the trustees and
executive officers of the Company.(1)
<TABLE>
<CAPTION>
Company Position
Occupation and Business Experience Held Continuously Term
Name Age During the Last Five Years(2) Since Expires(3)
---- --- ---------------------------------- ----------------- ----------
<S> <C> <C> <C> <C>
David Rockefeller 81 Chairman of the Board of Trustees; July, 1996 Indefinite
Chairman of the Board of Rockefeller
Group, Inc. since prior to 1992; retired
since October, 1995.
Henry M. Paulson 51 Vice Chairman of the Board of Trustees; July, 1996 Indefinite
Partner of Goldman, Sachs & Co. since
prior to 1992; Managing Director of
Goldman, Sachs & Co. since November, 1996.
Ralph F. Rosenberg 32 Trustee, Vice President, Treasurer and July, 1996 Indefinite
Assistant Secretary; Vice President of
Goldman, Sachs & Co. since 1994 and
an associate of Goldman, Sachs & Co.
since 1990. Also a director of Metropolis
Realty Trust, Inc.
Mark Tercek 40 Trustee; Vice President of Goldman, Sachs July, 1996 Indefinite
& Co. since prior to 1992; Managing Director
of Goldman, Sachs & Co. since November, 1996.
Daniel M. Neidich 47 Trustee; Partner of Goldman, Sachs & Co. July, 1996 Indefinite
since prior to 1992; Managing Director of
Goldman, Sachs & Co. since November, 1996.
Barry S. Volpert 37 Trustee; Vice President of Goldman, Sachs July, 1996 Indefinite
since prior to 1992; Partner of Goldman,
Sachs & Co. since November, 1994; Managing
Director of Goldman, Sachs & Co. since
November, 1996. Also a director of Insilco
Corporation.
G. Andrea Botta 43 Trustee; President from 1993 to present and July, 1996 Indefinite
Vice President from 1981-1993 of EXOR
America Inc. Also a director of Lear Corpor-
ation, Constitution Re Corporation and
Riverwood International Corporation.
Andreas C. Dracopoulos 33 Trustee; financial consultant to Transoceanic July, 1996 Indefinite
Marine, Inc. since prior to 1992.
Richard E. Salomon 54 Trustee; President and Managing Director July, 1996 Indefinite
of Spears, Benzak, Salomon & Farrell (an
investment advisor). Also
</TABLE>
- - --------
(1) Wilmington Trust Company also serves as a trustee of the Company pursuant to
the requirement of Title 12, Section 3807 of the Delaware Code but has no
vote and does not have any management responsibilities with respect to the
Company.
(2) The names of companies subject to the periodic reporting requirements of the
Securities Exchange Act of 1934, as amended, on which any of the trustees
serves as a director are also listed.
(3) The Company's existence will terminate, if not earlier terminated, in 2046.
54
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
a director of Cousins Properties, Inc.
Jerry I. Speyer 56 President and Chief Executive July, 1996 Indefinite
Officer; President and Chief Executive
Officer of Tishman Speyer Properties,
L.P. since prior to 1992.
David Augarten 41 Vice President, Treasurer and Assistant July, 1996 Indefinite
Secretary; Chief Financial Officer of
Tishman Speyer Properties, L.P. since
prior to 1992.
Geoffrey P. Wharton 54 Vice President, Assistant Treasurer and July, 1996 Indefinite
Assistant Secretary; Managing Director
of Tishman Speyer Properties, L.P.
since prior to 1992.
</TABLE>
The Predecessor's Proxy Statement for its 1996 Special Meeting of
Stockholders, dated February 14, 1996 is incorporated by reference as
a supplemental response to the information required by this item.
Item 11. Executive Compensation.
None(1)
The Predecessor's Proxy Statement for its 1996 Special Meeting of
Stockholders, dated February 14, 1996 is incorporated by reference as a
supplemental response to the information required by this item.
----------------
(1) Wilmington Trust Company receives as annual administration fee of
$2,500 and certain other immaterial transaction based fees.
55
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Security Ownership of Certain Beneficial Owners
The following table sets forth certain information as of March 31,
1997 concerning the beneficial ownership of the outstanding Trust
Ownership Interests by each person known by the Company to own more
than 5% of the outstanding Trust Ownership Interests on March 31,
1997.
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent of Trust
of Beneficial Owner Beneficial Amount(1) Ownership Outstanding
------------------- --------------------- ---------------------
<S> <C> <C>
Rockefeller Center Properties, Inc. 1(2) 50%
c/o Tishman Speyer Properties, L.P.
45 Rockefeller Plaza
New York, NY 10111
RCPI Investors LLC 1(2) 50%
c/o Tishman Speyer Properties, L.P.
45 Rockefeller Plaza
New York, NY 10111
</TABLE>
-------------------------
(1) This table lists beneficial ownership in accordance with the definitions
contained in Rule 13d-3 adopted by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended. All shares and
other equity interests listed are subject to the sole investment and
voting power of the named beneficial owner.
(2) Each of Rockefeller Center Properties, Inc. and RCPI Investors LLC has
sole investment and voting power with respect to its interest in the
Company.
Security Ownership of Management
Except as disclosed in the Predecessor's Proxy Statement for its 1996
Special Meeting of Stockholders, dated February 14, 1996 which is
incorporated by reference as a supplemental response to the
information required by this item as of March 26, 1997, no person who
since July 10, 1996 served as a trustee or executive officer of RCPI
Trust has beneficial ownership of any equity interest in the Company,
the Predecessor, RCPI Investors LLC or other affiliates of the
Company.
56
<PAGE>
Item 13. Certain Relationships and Related Transactions.
On July 10, 1996, the Company entered into a management agreement (the
"Management Agreement"), with an affiliate of Rockprop, L.L.C., (the
"Agent") which expires on July 17, 1999. The Management Agreement will
automatically renew for additional one year terms unless either party
gives notice of election not to renew. The Agent earns a management fee
based on 1.5% of Gross Revenues, as defined. For the period ending
December 31, 1996, the Agent earned approximately $1.3 million. Of
total management fees earned by the Agent, the Company and NBC incurred
approximately $909,000 and $432,000, respectively.
In addition, the Company pays the Agent an accounting fee pursuant to
the Management Agreement. The payment is equal to $1,134,000 for the
first year to be increased each year by an additional 4% of the sum of
$254,000 plus the aggregate amount of the prior year increases. For the
period ending December 31, 1996, the total accounting fee was
approximately $515,000.
The Agent also is entitled to reimbursement for the following
reasonable out-of-pocket expenses incurred by the Agent in connection
with its performance of its responsibilities under the Management
Agreement, including: (i) travel and entertainment expenses (including
meals and lodging), (ii) costs of advertising and engaging in
promotional activities (including the preparation of brochures and
other marketing materials) and (iii) costs of insurance required to be
maintained by the Agent pursuant to the Management Agreement. The
Company also reimburses the Agent for compensation paid to employees of
the Agent which are listed in the Operating Budget (as defined) as
payable by the Company and placement fees and other out-of-pocket
expenses incurred in connection with the hiring of employees whose
compensation is payable by the Company pursuant to the Operating
Budget. If with the Company's consent or at the Company's direction,
the Agent hires any attorneys to negotiate and prepare leases of space
at the Property or to perform other work in respect of the Property,
the compensation of such attorneys will be paid or reimbursed by the
Company.
The Agent also earns commissions for leasing services provided to the
Company. The Agent earns for each lease the sum of the following, as
appropriate: 5% of the Fixed Rent (as defined) for the 1st year of any
lease term, 4% for the 2nd year, 3 1/2% for the 3rd through 5th years,
2 1/2% for the 6th through 10th year, 2% for the 11th through 20th
year, and 1% for the 21st year and each succeeding year thereafter.
This fee is reduced by 50% for renewals. In addition, if the lease is
secured by an outside broker, the Agent receives 50% of such broker's
commission in lieu of the fee structure set forth above. For the period
ending December 31, 1996, total leasing commissions paid to the Agent
were approximately $85,000. As of December 31, 1996, the Company owes
approximately $443,000 to the Agent for leasing commissions.
The Agent also earns fees for cleaning and development fees. The Agent
earns 5% of the amount of any wages and other compensation (including
benefit obligations but excluding severance obligations) payable any
year to employees to furnish cleaning services to the Property, and 4%
of the Hard Construction Costs (as defined) of capital improvements
(excluding tenant improvements) for the Agent's supervisory and
coordinating services. For the period ending December 31, 1996, the
Agent earned approximately $291,000 in cleaning fees. Of total cleaning
fees earned by the Agent, NBC incurred approximately $16,000 related to
these fees. For the period ending December 31, 1996, the Company
incurred all development fees of approximately $36,000.
The Agent will also earn an incentive fee under certain circumstances.
If the Company disposes of its interest in all of the Property, the
Company and the Agent will calculate (as provided in the Management
Agreement) the internal rate of return received by RCPI and the LLC
from the date the Company first acquired its interest in the Property
to the date of such disposition. If such internal rate of return
exceeds fifteen percent then the Company will pay to the Agent an
amount equal to ten percent of all amounts received by RCPI and the LLC
which result in the internal rate of return exceeding fifteen percent
(the "Incentive Fee") unless the Management Agreement is terminated by
the Company due to certain defaults by the Agent.
The Agent is also indemnified by the Company for certain claims arising
under the Management Agreement and the Agent's activities pursuant
thereto.
Prior to the commencement of the Management Agreement, the Agent
provided consulting and other services related to the transaction in
the amount of approximately $2.4 million. GSMC also provided consulting
and other services related to the transaction in the amount of
approximately $574,000. These costs were capitalized to the Property as
transaction costs.
GSMC 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.
The Predecessor's Proxy Statement for its 1996 Special Meeting of
Stockholders, dated February 14, 1996 is incorporated by reference as a
supplemental response to the information required by this item.
57
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules And Reports on Form 8-K
<TABLE>
<CAPTION>
(a) Documents filed as part of the report
1. Financial Statements and Reports of Public Accountants Page No.
--------
<S> <C> <C>
RCPI Trust (the "Company") and Rockefeller Center Properties, Inc.
(the "Predecessor")
(1) Reports of Independent Public Accountants
a. Arthur Andersen LLP.........................................................24
b. Ernst & Young LLP...........................................................25
(2) RCPI Trust
a. Balance Sheet as of December 31, 1996.......................................26
b. Statement of Operations for the period from July 10, 1996 through
December 31, 1996........................................................27
c. Statement of Changes in Owners' Equity for the period from July 10, 1996
through December 31, 1996................................................28
d. Statement of Cash Flows for the period from July 10, 1996 through
December 31, 1996........................................................29
(3) Rockefeller Center Properties, Inc. (Predecessor)
a. Balance Sheet as of December 31, 1995.......................................30
b. Statements of Operations for the period from January 1, 1996 through
July 9, 1996 and for the years ended December 31, 1995 and 1994.............31
c. Statements of Changes in Stockholders' Equity for period from
January 1, 1996 through July 9, 1996 and for the years ended
December 31, 1995 and 1994..................................................32
d. Statements of Cash Flows for the period from January 1, 1996
through July 9, 1996 and for the years ended
December 31, 1995 and 1994..................................................33
(4) Notes to Financial Statements..................................................35
</TABLE>
58
<PAGE>
PART IV (Cont'd)
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
2. Financial Statement Schedules
Schedule III - Real Estate and Accumulated Depreciation
at December 31, 1996.............................................................51
All other schedules are either not required under the applicable
accounting regulation of the Securities and Exchange Commission or
under the related instructions and therefore have been omitted.
3. 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
Quarterly Report on Form 10-Q for the fiscal quarter 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.
(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 Quarterly 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.
(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.
(10.1) Amended and Restated Loan Agreement dated as of July 17,
1996 among the Company, the lenders parties thereto and
GSMC, as agent.
(10.2) Guarantee dated July 17, 1996 by Whitehall Street Real
Estate Limited Partnership V, Exor Group S.A., Tishman
Speyer Crown Equities, David Rockefeller, Troutlet
Investments Corporation, Gribble Investments (Tortola) BVI,
Inc. and Weevil Investments (Tortola) BVI, Inc., as
guarantors in favor of GSMC, as agent and lender.
(10.3) Agreement and Plan of Merger dated as of November 7, 1995
among the Predecessor, RCPI Holdings Inc., RCPI Merger Inc.,
Whitehall Street Real Estate Limited Partnership V,
Rockprop, L.L.C., David Rockefeller, Exor Group S.A. and
Troutlet Investments Corporation is incorporated by
reference to Exhibit 10.28 to the Predecessor's Current
Report on Form 8-K dated November 13, 1995.
</TABLE>
59
<PAGE>
PART IV (Cont'd)
<TABLE>
<S> <C>
3. Exhibits: (Cont'd)
(10.4) Amendment No. 1 dated as of February 12, 1996 to the
Agreement and Plan of Merger dated as of November 7, 1995
among the Predecessor, RCPI Holdings Inc., RCPI Merger Inc.,
Whitehall Street Real Estate Limited Partnership V,
Rockprop, L.L.C., David Rockefeller, Exor Group S.A. and
Troutlet Investments Corporation is incorporated by
reference to Exhibit 10.31 to the Predecessor's Current
Report on Form 8-K dated February 22, 1996.
(10.5) Amendment No. 2 to the Agreement and Plan of Merger, dated
as of April 25, 1996 is incorporated herein by reference to
the Predecessor's Current Report on Form 8-K, filed on April
25, 1996.
(10.6) Amendment No. 3 to the Agreement and Plan of Merger, dated
as of May 29, 1996 is incorporated herein by reference to
the Predecessor's Current Report on Form 8-K, filed on May
29, 1996.
(10.7) Amendment No. 4 to the Agreement and Plan of Merger, dated
as of June 30, 1996 is incorporated herein by reference to
the Predecessor's Current Report on Form 8-K, filed on July
1, 1996.
(16.1) Letter Re Change In Certifying Accountant.
(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.
</TABLE>
60
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
RCPI TRUST
By: /s/JERRY I. SPEYER
------------------
JERRY I. SPEYER
President
Date: March 31, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
By: /s/DAVID ROCKEFELLER
--------------------
DAVID ROCKEFELLER
Chairman of the Board of Trustees
Date: March 31, 1997
By: /s/HENRY M. PAULSON
-------------------
HENRY M. PAULSON
Vice Chairman of the Board of
Trustees
Date: March 31, 1997
By: /s/RALPH F. ROSENBERG
---------------------
RALPH F. ROSENBERG
Trustee and Vice President
Date: March 31, 1997
61
<PAGE>
SIGNATURES (Cont'd)
By: /s/MARK TERCEK
--------------
MARK TERCEK
Trustee
Date: March 27, 1997
By: /s/DANIEL M. NEIDICH
--------------------
DANIEL M. NEIDICH
Trustee
Date: March 31, 1997
By: /s/BARRY S. VOLPERT
BARRY S. VOLPERT
Trustee
Date: March 31, 1997
By: /s/G. ANDREA BOTTA
------------------
ANDREA BOTTA
Trustee
Date: March 31, 1997
By: /s/ANDREAS C. DRACOPOULOS
-------------------------
ANDREAS C. DRACOPOULOS
Trustee
Date: March 31, 1997
62
<PAGE>
SIGNATURES (Cont'd)
By: /s/RICHARD E. SALOMON
---------------------
RICHARD E. SALOMON
Trustee
Date: March 31, 1997
By: /s/JERRY I. SPEYER
------------------
JERRY I. SPEYER
President
(Principal Executive Officer)
Date: March 31, 1997
By: /s/DAVID AUGARTEN
-----------------
DAVID AUGARTEN
Vice President
(Principal Financial Officer and
Principal Accounting Officer)
Date: March 31, 1997
63
<PAGE>
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO
SECTION 12 OF THE ACT.
No proxy material has been sent to more than ten (10) of the Company's security
holders and no annual report has been sent to the Company's security holders.
64
EXHIBIT 4.1
AMENDED AND RESTATED
DEBENTURE PURCHASE AGREEMENT
between
RCPI TRUST
and
WHRC REAL ESTATE LIMITED PARTNERSHIP
dated as of
July 17, 1996
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS.................. 1
1.01. Definitions................................................... 1
1.02. Computation of Time Periods................................... 19
1.03. Accounting Terms.............................................. 19
SECTION 2
THE DEBENTURES........................... 19
2.01. Issuance of Debentures........................................ 19
2.02. Maturity...................................................... 20
(a) Maturity Date........................................ 20
(b) Principal Payment.................................... 20
2.03. Interest...................................................... 20
2.04. Denominations................................................. 20
2.05. Form of Legend for Securities................................. 21
2.06. Payments and Computations..................................... 21
2.07. Withholding; Payment of Additional Amounts.................... 22
2.08. Registration, Registration of Transfer and
Exchange, Restriction on Transfer......................... 24
(a) Security Register.................................. 24
(b) Transfer Restrictions................................. 25
2.09. Mutilated, Destroyed, Lost and Stolen
Debentures................................................ 28
2.10. Persons Deemed Owners......................................... 28
2.11. Cancellation.................................................. 29
2.12. Subordination................................................. 29
SECTION 3
CONDITIONS PRECEDENT........................ 29
3.01. Execution of this Agreement................................... 29
(a) No Default; Representations and
Warranties......................................... 29
(b) Opinion of Counsel................................... 29
(c) Trust Documents...................................... 30
(d) Related Transactions................................. 30
(e) Other Agreement...................................... 30
(f) Registration Rights Agreement........................ 30
(g) Other Documents...................................... 30
SECTION 4
REPRESENTATIONS AND WARRANTIES OF COMPANY............. 31
4.01. Existence, Power and Ownership................................ 31
4.02. Authorization................................................. 31
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<PAGE>
Page
----
4.03. No Violation or Conflicts..................................... 31
4.04. Consents...................................................... 31
4.05. Enforceable Obligations....................................... 32
4.06. Government Regulation......................................... 32
SECTION 5
AFFIRMATIVE COVENANTS OF THE COMPANY................ 32
5.01. Information Covenants......................................... 32
(a) Annual Financial Statements.......................... 32
(b) Auditor's Certificate.............................. 33
(c) Quarterly Financial Statements....................... 33
(d) Officer's Certificate................................ 33
(e) Notice of Default.................................... 33
5.02. Preservation of Existence and Franchises...................... 34
5.03. Books and Records............................................. 34
5.04. Compliance with Law........................................... 34
5.05. Insurance..................................................... 34
5.06. Maintenance of Property....................................... 34
5.07. ERISA......................................................... 35
5.08. Intercreditor Agreement....................................... 35
SECTION 6
NEGATIVE COVENANTS......................... 35
6.01. Indebtedness.................................................. 35
6.02. Liens......................................................... 40
6.03. Nature of Business............................................ 40
6.04. Consolidation, Merger, Sale or Purchase of
Assets.................................................... 41
6.05. Limitation on Investments..................................... 41
6.06. Transactions with Affiliates.................................. 41
6.07. Sale and Leaseback............................................ 42
6.08. Limitation on Restricted Payments............................. 42
6.09. Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries....................... 44
6.10. Limitation on Asset Dispositions.............................. 45
6.11. Limitation on Repayment of Indebtedness....................... 46
6.12. Limitation on Use of Senior Debt Proceeds..................... 46
SECTION 7
EVENTS OF DEFAULT......................... 47
7.01. Events of Default............................................. 47
(a) Payment.............................................. 47
(b) Representations...................................... 47
(c) Covenants............................................ 47
(d) Bankruptcy, Etc...................................... 48
(e) Defaults under Other Agreements...................... 48
(f) Judgments............................................ 49
7.02 Remedies....................................................... 49
-ii-
<PAGE>
Page
----
SECTION 8
REDEMPTION............................. 50
8.01. Redemption.................................................... 50
(a) Voluntary Redemption................................. 50
(c) Partial Redemption................................... 51
(d) Notice of Redemption............................... 52
(e) Interest after Redemption Date....................... 52
SECTION 9
MISCELLANEOUS........................... 53
9.01. Notices....................................................... 53
9.02. Benefit of Agreement; Assignments and
Participations............................................ 53
9.03. No Waiver; Remedies Cumulative................................ 53
9.04. Payment of Expenses; Indemnification.......................... 54
9.05. Amendments, Waivers and Consents.............................. 56
9.06. Counterparts.................................................. 56
9.07. Headings...................................................... 57
9.08. Survival of Indemnities....................................... 57
9.09. Governing Law; Submission to Jurisdiction;
Venue..................................................... 57
9.10. Severability.................................................. 57
9.11. Entirety...................................................... 58
9.12. Survival of Representations and Warranties.................... 58
EXHIBIT A Debenture
EXHIBIT B Officer's Certificate
EXHIBIT C Form of Registration Rights Agreement
EXHIBIT D The Real Estate
EXHIBIT E Form of Intercreditor Agreement
EXHIBIT F Form of Agreement
EXHIBIT G Examples of Application of Section 6.01(ix)
-iii-
<PAGE>
AMENDED AND RESTATED DEBENTURE PURCHASE AGREEMENT
AMENDED AND RESTATED DEBENTURE PURCHASE AGREEMENT, dated as of July
17, 1996 (this "Agreement"), between RCPI Trust, a Delaware business trust and
the successor in interest to Rockefeller Center Properties, Inc. (the
"Company"), and WHRC Real Estate Limited Partnership, a Delaware limited
partnership ("Whitehall").
RECITALS
WHEREAS, pursuant to that certain Debenture Purchase Agreement,
dated as of December 18, 1994 (the "Original Debenture Purchase Agreement"),
between Rockefeller Center Properties, Inc., a Delaware corporation ("RCPI"),
and Whitehall Street Real Estate Limited Partnership V, a Delaware limited
partnership ("Whitehall Street V"), RCPI duly issued $75,000,000 aggregate
principal amount of its 14% Debentures due 2007 (the "Debentures") of
substantially the tenor hereinafter set forth.
WHEREAS, Whitehall is currently the registered holder of all of the
outstanding Debentures.
WHEREAS, on the date hereof, RCPI has transferred all of its assets
to the Company and the Company has assumed all of the liabilities of RCPI
(including the Debentures) all pursuant to that certain Assignment Agreement,
dated as of July 10, 1996 (the "Assignment Agreement").
WHEREAS, the Company and Whitehall, as holder of all of the
outstanding Debentures, desire to amend and restate the Original Debenture
Purchase Agreement.
NOW, THEREFORE, THE ORIGINAL DEBENTURE PURCHASE AGREEMENT IS HEREBY
AMENDED AND RESTATED AS FOLLOWS:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.01. Definitions. As used herein, the following terms shall have
the meanings specified herein unless the context otherwise requires. Defined
terms herein shall include in the singular number the plural and in the plural
the singular:
-1-
<PAGE>
"Additional Amounts" has the meaning specified in
Section 2.07.
"Adjusted Consolidated Net Income" means, for any period, the
aggregate net income (or loss) of the Company and its Subsidiaries for such
period determined on a consolidated basis in conformity with Generally Accepted
Accounting Principles; provided that the following items shall be excluded in
computing Adjusted Consolidated Net Income (without duplication):
(i) the net income (or loss) of any Person (other than net income
(or loss) attributable to a Subsidiary) in which the Company or any of its
Subsidiaries has an equity interest, except to the extent of the amount of
dividends or other distributions actually paid to the Company or any of
its Subsidiaries by such other Person during such period;
(ii) the net income (or loss) of any Person accrued prior to the
date it becomes a Subsidiary or is merged into or consolidated with the
Company or any of its Subsidiaries or all or substantially all of the
property and assets of such Person are acquired by the Company or any of
its Subsidiaries;
(iii) the net income (or loss) of any Subsidiary to the extent that
the declaration or payment of dividends or similar distribution by such
Subsidiary of such net income is not at the time permitted by the
operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to such Subsidiary;
(iv) any gains or losses (on an after-tax basis) attributable to
asset sales outside the ordinary course of business;
(v) all extraordinary gains and extraordinary losses; and
(vi) the cumulative effect of changes in accounting principles.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling (including, but not limited to, all partners,
directors, members, stockholders, trustees, beneficiaries and officers of such
Person), controlled by or under direct or indirect common
-2-
<PAGE>
control with such Person. A Person shall be deemed to control another Person
that is a corporation, a trust, a limited liability company or a partnership if
such Person possesses, directly or indirectly, the power (i) to vote 10% or more
of the securities having ordinary voting power for the election of directors of
such corporation or to vote 10% or more of the partnership, member, beneficiary
or other ownership interests of such other Person or (ii) to direct or cause
direction of the management and policies of such other Person, whether through
the ownership of voting securities, as managing or general partner, as managing
member, by contract or otherwise.
"Agent" has the meaning specified in the Loan Agreement.
"Asset Disposition" by any Person means any transfer, conveyance,
sale, lease or other disposition by such Person or any of its Subsidiaries
(including a consol idation or merger or other sale of any such Subsidiary with,
into or to another Person in a transaction in which such Subsidiary ceases to be
a Subsidiary, but excluding a dispo sition by a Subsidiary of such Person to
such Person or a Wholly Owned Subsidiary of such Person or by such Person to a
Wholly Owned Subsidiary of such Person) of (i) shares of Capital Stock (other
than directors' qualifying shares) or other ownership interests of a Subsidiary
of such Person or (ii) other assets or rights of such Person or any of its
Subsidiaries outside of the ordinary course of business including, without
limitation, any one or more buildings or condominium units constituting part of
the Real Estate.
"Assignment Agreement" has the meaning specified in the Recitals.
"Benefit Plan" means any employee benefit plan, as defined in
Section 3(3) of ERISA (other than a Multiemployer Plan), sponsored by the
Company or any ERISA Affiliate or to which the Company or any ERISA Affiliate
contributes or has any obligation to contribute.
"Business Day" means any day other than a Saturday, a Sunday, a
legal holiday in New York, New York or a day on which banking institutions in
New York, New York are authorized by law or other governmental action to close;
provided, however, that so long as the Notes are out standing, any day that is
not a " Business Day" under the Loan Agreement shall not be a Business Day
hereunder.
-3-
<PAGE>
"Capital Improvement Debt" of any Person means Indebtedness of such
Person which Indebtedness constitutes all or part of the cost of capital
improvements, tenant improvements, tenant allowances, other tenant concessions
paid by the Company and leasing commissions relating to the Real Estate;
provided, however, that (x) the Indebtedness so incurred does not exceed 100% of
the cost of such capital improvements and leasing commissions and (y) such
capital improvements are or should be included in "addition to property and
equipment" in accordance with generally accepted accounting principles on the
balance sheet of such Person.
"Capital Lease Obligation" of any Person means the obligation to pay
rent or other payment amounts under a lease of (or other Indebtedness
arrangements conveying the right to use) real or personal property of such
Person which is required to be classified and accounted for as a capital lease
or a liability on the face of a balance sheet of such Person in accordance with
generally accepted accounting principles. The stated maturity of such obligation
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty. The principal amount of such obligation
shall be the capitalized amount thereof that would appear on the face of a
balance sheet of such Person in accordance with generally accepted accounting
principles.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock or
other equity participations, including partnership interests, whether general or
limited, membership interests and beneficial trust interests of such Person.
"Cash Equivalents" means (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than six months from the date of acquisition, (ii) U.S. dollar denominated time
deposits and certificates of deposit of a bank (an "Approved Bank") that is
either (x) any domestic commercial bank of recognized standing having capital
and surplus in excess of $500,000,000 or (y) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or
from Moody's is at least P-1 or the equivalent
-4-
<PAGE>
thereof, in each case with maturities of not more than six months from the date
of acquisition, (iii) commercial paper and variable or fixed rate notes issued
by any Approved Bank (or by the parent company thereof) or any variable rate
notes issued or guaranteed by any Approved Bank rated at least A-1 (or the
equivalent thereof) by S&P or at least P-1 (or the equivalent thereof) by
Moody's and maturing within six months of the date of acquisition, (iv)
repurchase agreements with a bank or trust company or recognized securities
dealer having capital and surplus in excess of $500,000,000 for direct
obligations issued by or fully guaranteed by the United States of America in
which the Company shall have a perfected first priority security interest
(subject to no other Liens) and having, on the date of purchase thereof, a fair
market value of at least 100% of the amount of the repurchase obligations, and
(v) publicly traded short-term notes, bonds and other obligations having
short-term unsecured debt ratings of at least A-1 (or the equivalent thereof) by
S&P or at least P-1 (or the equivalent thereof) by Moody's.
"Closing Date" means December 29, 1994.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Common Stock" of any Person means Capital Stock of such Person that
does not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Consistent Basis" or "consistent basis" means, with regard to the
application of accounting principles, accounting principles consistent in all
material respects with the accounting principles used and applied in prepara
tion of the financial statements previously delivered to the Holders.
"Consolidated Net Worth" of any Person means the consolidated
stockholders', partners' or beneficiaries' equity of such Person, determined on
a consolidated basis in accordance with Generally Accepted Accounting
Principles, less amounts attributable to Redeemable Stock of such Person;
provided that, with respect to the Company, adjustments following the date
hereof to the accounting books and records of the Company in accordance with
Accounting Principles Board Opinions Nos. 16 and 17 (or
-5-
<PAGE>
successor opinions thereto) or otherwise resulting from the acquisition of
control of the Company by another Person shall not be given effect to.
"Debentures" has the meaning specified in the Recitals.
"Default" means any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated thereunder.
"ERISA Affiliate" means each person (as defined in Section 3(9) of
ERISA) which together with the Company would be deemed to be a member of the
same "controlled group" within the meaning of Section 414(b), (c), (m) or (o) of
the Code.
"Event of Default" has the meaning specified in Section 7.01 hereof.
"Generally Accepted Accounting Principles" or "generally accepted
accounting principles" means generally accepted accounting principles in the
United States in effect as of the date of this Agreement.
"Guaranty Obligations" means any obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) guaranteeing any Indebtedness, leases, dividends or other
obligations of any other Person in any manner, whether direct or indirect, and
including, without limitation, any obligation, whether or not contingent, (i) to
purchase any such Indebtedness or other obligation or any property constituting
security therefor, (ii) to advance or provide funds or other support for the
payment or purchase of such Indebtedness or obligation or to maintain working
capital, solvency or other balance sheet condition of such other Person
(including without limitation keep well agreements, maintenance agreements,
comfort letters or similar agree ments or arrangements), (iii) to lease or
purchase property, securities or services primarily for the purpose of assuring
the owner of such Indebtedness or obligation, or (iv) to otherwise assure or
hold harmless the owner of such Indebt edness or obligation against loss in
respect thereof.
-6-
<PAGE>
"Holder" or "Holders" means a holder of any Debenture.
"Incur" means, with respect to any Indebtedness or other obligation
of any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, guarantee or otherwise become liable in respect of such Indebtedness or
other obligation including by acquisition of Subsidiaries or the recording, as
required pursuant to generally accepted accounting principles or otherwise, of
any such Indebtedness or other obligation on the balance sheet of such Person
(and "Incurrence", "Incurred", "Incurrable" and "Incurring" shall have meanings
correlative to the foregoing); provided, however, that a change in generally
accepted accounting principles that results in an obligation of such Person that
exists at such time becoming Indebtedness shall not be deemed an Incurrence of
such Indebtedness.
"Indebtedness" means, with respect to any Person, without
duplication, (i) all indebtedness of such Person for borrowed money, (ii) the
deferred purchase price of assets which in accordance with generally accepted
accounting prin ciples would be shown to be a liability (or on the liability
side of a balance sheet) of such Person, (iii) all Guaranty Obligations of such
Person in respect of Indebtedness or dividends of another Person, (iv) the
maximum amount of all letters of credit issued or acceptance facilities estab
lished for the account of such Person and, without duplica tion, all drafts
drawn thereunder (other than letters of credit (x) supporting other Indebtedness
of such Person, or (y) offset by a like amount of cash or government securities
held in escrow to secure such letter of credit and draws thereunder), (v) all
Capital Lease Obligations of such Person, (vi) all indebtedness of another
Person secured by any lien on any property of such Person, whether or not such
indebtedness has been assumed, (vii) all obligations under take-or-pay or
similar arrangements or under interest rate swap, currency swap, or commodities
agreements of such Person, (viii) indebtedness created or arising under any
conditional sale or title retention agreement of such Person, and (ix) all
Redeemable Stock issued by such Person; provided, however, that Indebtedness
shall not include trade payables and accrued expenses arising or incurred in the
ordinary course of business.
"Indenture Securities" means the securities of the Company issued
pursuant to the 1985 Indenture.
-7-
<PAGE>
"Intercreditor Agreement" means the Intercreditor Agreement dated as
of December 18, 1994 among the Agent, the Lenders, Whitehall Street V and RCPI
and one or more other Intercreditor Agreements entered into between the Holders
of the Debentures and the holder(s) of any Senior Debt pursuant to Section 2.12
in substantially the form of Exhibit E hereto with such changes as may
reasonably be agreed by the Holders of the Debentures and the holder(s) of such
Senior Debt.
"Interest Payment Date" means each June 2 and December 2 from and
after December 29, 1994 until the Maturity Date and the Maturity Date.
"Investment" by any Person means any direct or indirect loan,
advance or other extension of credit or capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) to, or purchase or
acquisition of Capital Stock, bonds, notes, debentures or other securities or
evidence of Indebtedness issued by, any other Person, including any payment on a
Guaranty Obligation with respect to any obligation of such other Person.
"Lenders" means the lender or lenders under the Loan Agreement.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encum brance, lien (statutory or
otherwise), preference, priority or charge of any kind (including any agreement
to give any of the foregoing, any conditional sale or other title retention
agreement and any lease in the nature thereof).
"Loan Agreement" means the Amended and Restated Loan Agreement,
dated as of July 17, 1996, among the Company, the Lenders and the agent named
therein.
"Loan Documents" means this Agreement, the Loan Agreement, the
Debentures, the Registration Rights Agreement and the Notes.
"Loans" means the monies advanced to RCPI by the Lenders pursuant to
the Loan Agreement.
"Maturity Date" shall have the meaning given to such term in Section
2.02(a) hereof.
"Moody's" means Moody's Investors Service, Inc.
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"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which the Company or any ERISA Affiliate is then
making or accruing an obligation to contribute or has within the preceding five
plan years made contributions.
"Net Available Proceeds" from any Asset Disposi tion by any Person
means cash or readily marketable cash equivalents received (including by way of
sale or discoun ting of a note, installment receivable or other receivable, but
excluding any other consideration received in the form of assumption by the
acquiree of Indebtedness or other obligations relating to such properties or
assets) therefrom by such Person, net of (i) all legal, title and recording tax
expenses, commissions and other fees and expenses Incurred and all federal,
state, provincial, foreign and local taxes required to be accrued as a liability
as a consequence of such Asset Disposition, (ii) all payments made by such
Person or its Subsidiaries on any Indebtedness which is secured by such assets
in accordance with the terms of any Lien upon or with respect to such assets or
which must by the terms of such Lien, or in order to obtain a necessary consent
to such Asset Disposition or by applicable law, be repaid out of the proceeds
from such Asset Disposition, (iii) all distributions and other payments made to
minority interest holders in Subsidiaries of such Person or joint ventures as a
result of such Asset Disposition and (iv) appropriate amounts to be provided by
such Person or any Subsidiary thereof, as the case may be, as a reserve in
accordance with generally accepted accounting principles against any liabilities
associated with such assets and retained by such Person or any Subsidiary
thereof, as the case may be, after such Asset Disposition, including, without
limitation, liabilities under any indemnification obligations and severance and
other employee termination costs associated with such Asset Disposition, in each
case as determined by the Board of Trustees of the Company, in its reasonable
good faith judgment evidenced by a resolution of the Board of Trustees;
provided, however, that any reduction in such reserve within twelve months
following the consummation of such Asset Disposition will be treated for all
purposes of this Agreement and the Debentures as a new Asset Disposition at the
time of such reduction with Net Available Proceeds equal to the amount of such
reduction.
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"Net Cash Flow" means, for any period,
(A) for purposes of Sections 2.03(b), 6.01(x) and 6.11, (i) Net
Operating Income for such period, minus (ii) consolidated cash interest expense
on Senior Debt and on other Indebtedness of the Company that ranks pari passu
with the Debentures (other than consolidated cash interest expense on any
refinancing of all or substantially all of the Company's current coupon
debentures or zero coupon debentures issued pursuant to the 1985 Indenture) paid
during such period, minus (iii) for purposes of Sections 6.01(x) and 6.11 only,
consolidated cash interest expense on any refinancing of all or substantially
all of the Company's current coupon debentures or zero coupon debentures issued
pursuant to the 1985 Indenture that ranks pari passu with the Debentures paid
during such period, minus (iv) cash taxes paid during such period, minus (v) any
repayments of Senior Debt or other Indebtedness of the Company that ranks pari
passu with the Debentures (other than any refinancing of all or substantially
all of the Company's current coupon debentures or zero coupon debentures issued
pursuant to the 1985 Indenture) required by the terms of the documents governing
such Senior Debt or other Indebtedness made during such period (and not
refinanced) (excluding repayments made out of Net Cash Flow for the prior
period), minus (vi) for purposes of Sections 6.01(x) and 6.11 only, any
repayments of any refinancing of all or substantially all of the Company's
current coupon debentures or zero coupon debentures issued pursuant to the 1985
Indenture that ranks pari passu with the Debentures required by the terms of the
documents governing such Indebtedness made during such period (and not
refinanced) (excluding repayments made out of Net Cash Flow for the prior
period), minus (vii) capital expenditures paid in cash during such period, minus
(viii) any increase (or plus any decrease) in consolidated working capital for
such period, minus (ix) for purposes of Section 2.03(b) only, an amount equal to
50% of the projected capital expenditures projected to be funded in cash for the
Company and its Subsidiaries for the subsequent period; and
(B) for purposes of Section 6.08, (i) Net Operating Income for such
period, minus (ii) consolidated cash interest expense on Indebtedness paid
during such period, minus (iii) interest expense with respect to the Debentures
which has been accrued during such period pursuant to Section 2.03(b) and which
has not been repaid during such period, minus (iv) cash taxes paid during such
period, minus (v) any repayments or repurchases of
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Indebtedness made during such period (and not refinanced) (excluding repayments
or repurchases of Indebtedness made out of Net Cash Flow for the prior period),
minus (vi) capital expenditures made (whether paid in cash or funded with
Indebtedness) during such period (excluding capital expenditures in excess of
$40 million in any fiscal year that are funded with Indebtedness), minus (vii)
any increase (or plus any decrease) in consolidated working capital for such
period.
"Net Operating Income" means, for any period, the sum of the amounts
for each period of (i) Adjusted Consolidated Net Income, plus (ii) consolidated
interest expense, plus (iii) income taxes, to the extent deducted in calculating
Adjusted Consolidated Net Income, excluding the income tax effect (either
positive or negative) attributable to extraordinary gains or extraordinary
losses or asset sales outside the ordinary course of business, plus (iv)
depreciation expenses, to the extent deducted in calculating Adjusted
Consolidated Net Income, plus (v) amortization expense, to the extent deducted
in calculating Adjusted Consolidated Net Income, plus (vi) all other noncash
items reducing Adjusted Consolidated Net Income, less all non-cash items
increasing Adjusted Consolidated Net Income, all as determined on a consolidated
basis for the Company and its Subsidiaries in conformity with Generally Accepted
Accounting Principles.
"1985 Indenture" means the Indenture, dated as of September 15, 1985
from RCPI (predecessor in interest to the Company) to United States Trust
Company (as successor to Manufacturers Hanover Trust Company), as Trustee, as
amended by the First Supplemental Indenture dated as of December 15, 1985, and
the Second Supplemental Indenture dated as of July 10, 1996, as further amended
from time to time.
"1985 Loan Agreement" means the Loan Agreement dated as of September
19, 1985 among RCPI (predecessor in interest to the Company), RCPA and RCP, as
amended from time to time.
"Notes" means, collectively, the floating rate promissory notes of
the Company executed in accordance with the Loan Agreement.
"Offer to Purchase" means a written offer (the "Offer") sent by the
Company by first class mail, postage prepaid, to each Holder at his address
appearing in the Security Register on the date of the Offer offering to
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purchase up to the principal amount of Debentures specified in such Offer at the
purchase price specified in such Offer (as determined pursuant to this
Agreement). Unless otherwise required by applicable law, the Offer shall specify
an expiration date (the "Expiration Date") of the Offer to Purchase which shall
be, subject to any contrary requirements of applicable law, not less than 30
days or more than 60 days after the date of such Offer and a settlement date
(the "Purchase Date") for purchase of Debentures within five Business Days after
the Expiration Date. The Offer shall be mailed by the Company in the name and at
the expense of the Company. The Offer shall contain information concerning the
business of the Company and its Subsidiaries which the Company in good faith
believes will enable such Holders to make an informed decision with respect to
the Offer to Purchase (which at a minimum will include (i) the most recent
annual and quarterly financial statements and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" contained in the
documents required to be filed with the Trustee pursuant to the 1985 Indenture
(which requirements may be satisfied by delivery of such documents together with
the Offer), (ii) a description of material developments in the Company's
business subsequent to the date of the latest of such financial statements
referred to in clause (i) (including a description of the events requiring the
Company to make the Offer to Purchase), (iii) if applicable, appropriate pro
forma financial information concerning the Offer to Purchase and the events
requiring the Company to make the Offer to Purchase and (iv) any other
information required by applic able law to be included therein. The Offer shall
contain all instructions and materials necessary to enable such Holders to
tender Debentures pursuant to the Offer to Purchase. The Offer shall also state:
(1) the Section of this Agreement pursuant to which the Offer to
Purchase is being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate principal amount of the outstanding Debentures
offered to be purchased by the Company pursuant to the Offer to Purchase
(including, if less than 100%, the manner by which such has been
determined pursuant to the Section hereof requiring the Offer to Purchase)
(the "Purchase Amount");
(4) the purchase price to be paid by the Company for each $1,000
aggregate principal amount of
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Debentures accepted for payment (as specified pursuant to this Agreement)
(the "Purchase Price");
(5) that the Holder may tender all or any portion of the Debentures
registered in the name of such Holder and that any portion of a Debenture
tendered must be tendered in an integral multiple of $1,000 principal
amount;
(6) the place or places where Debentures are to be surrendered for
tender pursuant to the Offer to Purchase;
(7) that interest on any Debenture not tendered or tendered but not
purchased by the Company pursuant to the Offer to Purchase will continue
to accrue;
(8) that on the Purchase Date the Purchase Price will become due and
payable upon each Debenture being accepted for payment pursuant to the
Offer to Purchase and that interest thereon shall cease to accrue on and
after the Purchase Date;
(9) that each Holder electing to tender a Debenture pursuant to the
Offer to Purchase will be required to surrender such Debenture at the
place or places specified in the Offer prior to the close of business on
the Expiration Date (such Debenture being, if the Company so requires,
duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company duly executed by, the Holder thereof or
his attorney duly authorized in writing);
(10) that Holders will be entitled to withdraw all or any portion of
Debentures tendered if the Company receives, not later than the close of
business on the Expiration Date, a telegram, telex, facsimile transmission
or letter setting forth the name of the Holder, the principal amount of
the Debenture the Holder tendered, the certificate number of the Debenture
the Holder tendered and a statement that such Holder is withdrawing all or
a portion of his tender;
(11) that (a) if Debentures in an aggregate principal amount less
than or equal to the Purchase Amount are duly tendered and not withdrawn
pursuant to the Offer to Purchase, the Company shall purchase all such
Debentures and (b) if Debentures in an aggregate
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principal amount in excess of the Purchase Amount are tendered and not
withdrawn pursuant to the Offer to Purchase, the Company shall purchase
Debentures having an aggregate principal amount equal to the Purchase
Amount on a pro rata basis (with such adjustments as may be deemed
appropriate so that only Debentures in denominations of $1,000 or integral
multiples thereof shall be purchased); and
(12) that in the case of any Holder whose Debenture is purchased
only in part, the Company shall execute and deliver to the Holder of such
Debenture without service charge, a new Debenture or Debentures, of any
authorized denomination as requested by such Holder, in an aggregate
principal amount equal to and in exchange for the unpurchased portion of
the Debenture so tendered.
Any Offer to Purchase shall be governed by and effected in accordance with the
Offer for such Offer to Purchase.
"Original Debenture Purchase Agreement" has the meaning specified in
the Recitals.
"Permitted Investments" means cash, Cash Equivalents and permitted
non-cash consideration received in connection with an Asset Disposition.
"Permitted Liens" means (i) Liens for taxes not yet due or Liens for
taxes being contested in good faith by appropriate proceedings for which
adequate reserves have been established (and as to which the property subject to
such Lien is not yet subject to foreclosure, sale or loss on account thereof);
(ii) Liens in respect of property imposed by law arising in the ordinary course
of business such as materialmen's, mechanics', warehousemen's and other like
Liens; provided that such Liens secure only amounts not yet due and payable or
amounts being contested in good faith by appropriate proceedings for which
adequate reserves have been established (and as to which the property subject to
such lien is not yet subject to foreclosure, sale or loss on account thereof);
(iii) Liens arising from good faith deposits in connection with or to secure
performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, contracts, performance and return-of-money bonds and other similar
obligations incurred in the ordinary course of business (other than obligations
in respect of the payment of borrowed money); and (iv) any attachment or
judgment lien, unless the judgment it secures shall not,
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within 30 days after the entry thereof, have been discharged or execution
thereof stayed pending appeal, or shall not have been discharged within 30 days
after the expiration of any such stay.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
(whether or not incorporated), or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means any employee pension benefit plan as defined in Section
3(2) of ERISA (other than a Multiemployer Plan) which (i) is subject to the
provisions of Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the Code and (ii) which the Company or any ERISA Affiliate
sponsors or to which the Company or any ERISA Affiliate contributes or has been
obligated to contribute within the preceding five plan years.
"Preferred Stock" of any Person means Capital Stock of such Person
of any class or classes (however designated) that ranks prior, as to the payment
of dividends or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to shares of
Capital Stock of any other class of such Person.
"Purchase Money Secured Debt" of any Person means (A) Indebtedness
of such Person secured by a Lien on real or personal property of such Person
which Indebtedness (a) constitutes all or a part of the purchase price or
construction cost of such property or (b) is incurred prior to, at the time of
or within 60 days after the acquisition or substantial completion of such
property for the purpose of financing all or any part of the purchase price or
construction cost thereof and (B) Indebtedness secured by a Lien on real or
personal property Incurred by such Person as the result of such Person acquiring
such real or personal property or acquiring the Person that owns such real or
personal property; provided, however, that (w) the Indebtedness so incurred does
not exceed 100% of the purchase price or construction cost of such property, (x)
such Lien does not extend to or cover any property other than such property and
(y) the purchase price or construction cost for such property is or should be
included in "addition to property and equipment" in accordance with generally
accepted accounting principles on the balance sheet of such Person.
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"RCP" means Rockefeller Center Properties, a New York general
partnership.
"RCPA" means RCP Associates, a New York limited partnership.
"RCPI" has the meaning specified in the Recitals.
"Real Estate" means the real property identified in Exhibit D
hereto.
"Redeemable Stock" of any Person means any Capital Stock of such
Person that by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or otherwise (including upon the
occurrence of an event) matures or is required to be redeemed (pursuant to any
sinking fund obligation or otherwise) or is convertible into or exchangeable for
Indebtedness or is redeemable at the option of the holder thereof, in whole or
in part, at any time prior to the final Maturity Date of the Debentures.
"Redemption Date" has the meaning given to such term in Section
8.01(a).
"Redemption Price" means the redemption price of the Debentures
calculated as specified in Section 8.01(a)(ii) or 8.01(b), as applicable.
"Redevelopment Debt" of any Person means Indebtedness of such Person
which Indebtedness (a) constitutes all or a part of the construction cost of
substantially altering, renovating or expanding the improvements located on the
Real Property or (b) is incurred prior to, at the time of or within 60 days
after the substantial completion of such substantial alteration, renovation or
expansion for the purpose of financing all or any part of the construction cost
thereof; provided, however, that (x) the Indebtedness so incurred does not
exceed 100% of the construction cost of such substantial alteration, renovation
or expansion, and (y) the construction cost for such substantial alteration,
renovation or expansion is or should be included in "addition to property and
equipment" in accordance with generally accepted accounting principles on the
balance sheet of such Person.
"Refinancing" or "refinancing" has the meaning specified in Section
6.01(ii).
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"Registration Rights Agreement" means the Regis tration Rights
Agreement, dated July 17, 1996, in the form of Exhibit C hereto between RCPI and
Whitehall.
"Regular Record Date" has the meaning given to such term in Section
2.06.
"Regulation G, T, U or X" means, respectively, Regulation G, T, U
and X of the Board of Governors of the Federal Reserve System as from time to
time in effect and any successor to all or a portion thereof.
"REIT" has the meaning specified in Section 6.08.
"Related Person" of any Person means any other Person directly or
indirectly owning (a) 5% or more of the outstanding Common Stock of such Person
(or, in the case of a Person that is not a corporation, 5% or more of the equity
interest in such Person) or (b) 5% or more of the combined voting power of the
voting stock of such Person.
"Required Holders" means Holders holding more than 50% of the
aggregate outstanding principal amount of the Debentures.
"S&P" means Standard & Poor's Corporation.
"Security Register" has the meaning given to such term in Section
2.08(a).
"Senior Debt" means any Indebtedness of the Company to which the
Debentures have been subordinated pursuant to Section 2.12.
"Subsidiary" of any Person means, with respect to such Person, (i)
any corporation more than 50% of whose stock of any class or classes having by
the terms thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time, any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person directly
or indirectly through Subsidiaries, and (ii) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries has more than 50% equity interest at any time.
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"Trustee" means United States Trust Company, as Trustee, under the
1985 Indenture, or any successor trustee thereto.
"United States" means the United States of America, the District of
Columbia, Puerto Rico, the United States Virgin Islands, Guam, American Samoa,
Wake Island and the Northern Mariana Islands.
"United States Alien" means any person which is a foreign
corporation, a nonresident alien individual, a nonresident alien fiduciary of a
foreign estate or trust, or a foreign partnership one or more of the members of
which is, for United States federal income tax purposes, a foreign corporation,
a nonresident alien individual or a nonresident alien fiduciary of a foreign
estate or trust in any of the cases above to the extent that the income of such
Person in respect of the Debentures is not subject to United States federal
income tax on a net income basis.
"Weighted Average Life" means, as of the date of determination, with
respect to any Indebtedness, the quotient obtained by dividing (i) the sum of
the products of the number of years from the date of determination to the dates
of each successive scheduled principal payments of such Indebtedness, and the
amount of such principal payments, by (ii) the sum of all such principal
payments.
"Whitehall" has the meaning specified in the first paragraph of this
Agreement.
"Whitehall Street V" has the meaning specified in the Recitals.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such Person.
"Yield Maintenance Premium" shall mean the excess, if any, of the
aggregate amount of the remaining scheduled payments of interest (assuming the
Company has sufficient Net Cash Flow to make such payments pursuant to Section
2.03(b)) and principal (assuming the Debentures are scheduled to be repaid in
full on December 30, 2000 at 105% of the outstanding principal balance of the
Debentures as of
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the date a redemption notice is delivered in connection with a mandatory
redemption pursuant to Section 8.01(b)) on the Debentures, discounted to their
present value on the date of redemption, over the outstanding principal balance
of the Debentures as of the date a redemption notice is delivered in connection
with a mandatory redemption pursuant to Section 8.01(b). The discount rate will
be the yield to maturity implied by the Treasury Constant Maturity Series yields
reported in Federal Reserve Statistical Release H.15(159) (or any comparable
successor publication) for actively traded U.S. treasury securities having a
constant maturity equal to the remaining life to December 30, 2000 of the
Debentures plus 100 basis points. For purposes of such calculation the implied
yield shall be determined, if necessary, by interpolating linearly between
Treasury Constant Maturity Series yields.
1.02. Computation of Time Periods. For purposes of computation of
periods of time hereunder, the word "from" means "from and including" and the
words "to" and "until" each mean "to but excluding."
1.03. Accounting Terms. Accounting terms used but not otherwise
defined herein shall have the meanings provided under, and be construed in
accordance with, generally accepted accounting principles.
SECTION 2
THE DEBENTURES
2.01. Issuance of Debentures. (a) The Company agrees to issue and
sell, from time to time, the Debentures pursuant to the terms of this Agreement.
The Debentures shall be executed on behalf of the Company by its
President or one of its Vice Presidents, attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Debentures
may be manual or facsimile.
Debentures bearing the manual or facsimile signa tures of
individuals who were at any time the proper offi cers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Debentures or
did not hold such offices at the date of such Debentures.
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(b) Issuance to Whitehall Street V. The parties hereto hereby
acknowledge that (i) on the Closing Date, RCPI (as predecessor in interest to
the Company) duly issued, sold and delivered to Whitehall Street V and Whitehall
Street V purchased and paid for Debentures in the aggregate principal amount of
$75,000,000 and (ii) Whitehall is currently the registered holder of all of such
Debentures.
2.02. Maturity.
(a) Maturity Date. The Debentures shall mature on December 31, 2007
(the "Maturity Date").
(b) Principal Payment. The Company agrees to pay the outstanding
principal amount of the Debentures, together with all accrued but unpaid
interest thereon and all other amounts owing from the Company to the Holders, on
the Maturity Date.
2.03. Interest.
(a) The Debentures shall bear interest at the rate of 14% per annum
from the date of issuance of each Debenture or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, as the case
may be, payable semi-annually on June 2 and December 2, commencing June 2, 1995,
until the principal thereof is paid. Notwithstanding the foregoing, upon the
occurrence and during the continuance of an Event of Default, the Debentures
shall bear interest, payable on demand, at a rate of 16% per annum. Except as
otherwise provided herein, accrued interest shall be payable in arrears on each
Interest Payment Date.
(b) To the extent that Net Cash Flow for the preceding six months
ending immediately prior to an Interest Payment Date shall be insufficient to
pay interest as provided above on such Interest Payment Date, the Company shall
not be obligated to pay interest on such date and such interest shall accrue and
shall compound semi-annually at the then applicable rate provided in Section
2.03(a). Any such accrued interest shall be paid on the next Interest Payment
Date on which Net Cash Flow shall be available after the payment of current
interest on such Interest Payment Date, to the extent of such Net Cash Flow.
2.04. Denominations. The Debentures shall be issuable only in
registered form without coupons and only in denominations of U.S. $1,000 and any
integral multiple
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thereof, substantially in the form of Exhibit A attached hereto.
2.05. Form of Legend for Securities.
Unless otherwise permitted by Section 2.08, every Debenture issued
and delivered hereunder shall bear a legend in substantially the following form:
THE SECURITY REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER APPLICABLE STATE
SECURITIES LAWS. SUCH SHARES MAY BE OFFERED, SOLD OR TRANSFERRED ONLY IN
COMPLIANCE WITH THE REQUIREMENTS OF SUCH ACT AND OF ANY APPLICABLE STATE
SECURITIES LAWS AND SUBJECT TO THE PROVISIONS OF THE AMENDED AND RESTATED
DEBENTURE PURCHASE AGREEMENT, DATED AS OF JULY 17, 1996, BETWEEN RCPI TRUST AND
WHRC REAL ESTATE LIMITED PARTNERSHIP. A COPY OF SUCH AMENDED AND RESTATED
DEBENTURE PURCHASE AGREEMENT IS AVAILABLE AT THE OFFICES OF THE COMPANY.
2.06. Payments and Computations. All payments of principal or
interest hereunder shall be paid to the persons in whose names such Debentures
are registered on the Security Register at the close of business on the date
fifteen days prior to the related Interest Payment Date (the "Regular Record
Date"). Principal on any Debenture shall be payable against surrender therefor
and payments of interest on Debentures shall be made, in accordance with this
Agree ment and subject to applicable laws and regulations, by check mailed on or
before the due date for such payment to the person entitled thereto at such
person's address appearing on the Security Register (or, in the case of a Holder
holding not less than $5,000,000 aggregate principal amount of Debentures, by
wire transfer to such account as such Holder shall designate by written
instructions received by the Company no less than 15 days prior to any
applicable Interest Payment Date, which wire instruction shall continue in
effect until such time as the Holder otherwise notifies the Company or such
Holder no longer is the registered owner of such Debenture or Debentures).
Whenever any payment hereunder shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day (subject to accrual of interest and fees for the period of such
extension). All computations of interest and fees shall be made on the basis of
actual number of days elapsed over a year of 360 days. Interest on each
Debenture shall accrue from and include the Closing Date but exclude the date of
payment. All payments
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received from the Company hereunder shall be applied in the following order:
first, to the payment of any costs and expenses and other amounts due pursuant
to Section 9.04; second, to the payment of any amount due under this Agreement
other than any amount referred to in this sentence; third, to the ratable
payment of interest due on the Debentures; and fourth, to the ratable payment of
principal and premium, if any, due on the Debentures.
2.07. Withholding; Payment of Additional Amounts.
(a) The Company will pay to the Holder of any Debenture who is a
United States Alien such additional amounts ("Additional Amounts") as may be
necessary in order that every net payment of the principal of and interest on
such Debenture, after deduction or withholding for or on account of any present
or future tax, assessment or govern mental charge imposed upon or as a result of
such payment by the United States or any political subdivision or taxing
authority thereof or therein, will not be less than the amount provided for in
such Debenture to be then due and payable; provided, however, that the foregoing
obligation to pay Additional Amounts will not apply to any one or more of the
following:
(1) any tax, assessment or other governmental charge which would not
have been so imposed but for (i) the existence of any present or former
connection between such Holder (or between a fiduciary, settlor,
beneficiary or member of such Holder, if such Holder is an estate, a trust
or a partnership) and the United States, including, without limitation,
such Holder (or such fiduciary, settlor, beneficiary or member) being or
having been a citizen or resident or treated as a resident thereof, or
being or having been engaged in trade or business or present therein, or
having or having had a permanent establishment therein, or (ii) such
Holder's present or former status as a passive foreign investment company,
a personal holding company, a foreign personal holding company, or a
controlled foreign corporation for United States tax purposes or a
corporation which accumulates earnings to avoid United States federal
income tax;
(2) any tax, assessment or other governmental charge imposed on
interest received by reason of such Holder's past or present status as the
actual or constructive owner (taking into account attribution rules of
Ownership under Section 871(h)(3) of the Code)
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of 10% or more of the capital or profits interest in the Company;
(3) any tax, assessment or other governmental charge which would not
have been imposed but for the failure to comply with any certification,
identifica tion or other reporting requirements concerning the
nationality, residence, identity or connection with the United States of
the Holder or beneficial owner of such Debenture if compliance is required
by statute or by regulation of the United States Treasury Department as a
precondition to exemption from such tax, assessment or other governmental
charge;
(4) any estate, inheritance, gift, sales trans fer, personal
property or any similar tax, assessment or other governmental charge;
(5) any tax, assessment or other governmental charge which is
payable otherwise than by deduction or withholding from payments of
principal of or interest on such Debenture; or
(6) any tax, assessment or other governmental charge which would not
have been so imposed but for the presentation by the Holder of such
Debenture for pay ment on a date more than 15 days after the date on which
such payment became due and payable or the date on which payment thereof
is duly provided for, whichever occurs later;
nor will Additional Amounts be paid with respect to any payment of principal of
or interest on any such Debenture to any United States Alien who is a fiduciary
or partnership or other than the sole beneficial owner of any such payment to
the extent that a beneficiary or settlor with respect to such fiduciary, a
member of such a partnership or the bene ficial owner would not have been
entitled to the Additional Amounts had such beneficiary, settlor, member or
beneficial owner been the Holder of such Debenture.
(b) All references in this Agreement to principal and interest in
respect of Debentures shall, unless the context otherwise requires, be deemed to
mean and include all Additional Amounts, if any, payable in respect thereof as
set forth in this Agreement.
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2.08. Registration, Registration of Transfer and
Exchange, Restriction on Transfer.
(a) Security Register. The Company shall maintain a register (the
"Security Register") for the registration or transfer of the Debentures. The
name and address of the Holder of each Debenture, records of any transfers of
the Debentures and the name and address of any transferee of a Debenture shall
be entered in the Security Register and the Company shall, promptly upon receipt
thereof, update the Security Register to reflect all information received from a
Holder. There shall be no more than one Holder for each Debenture, including all
beneficial interests therein.
Upon surrender for registration of transfer of any Debenture at the
office or agency of the Company, the Company shall execute and deliver, in the
name of the desig nated transferee or transferees, one or more new Debentures,
of any authorized denominations and like aggregate principal amount.
At the option of the Holder, Debentures may be exchanged for other
Debentures, of any authorized denomina tions and of like aggregate principal
amount, upon surrender of the Debentures to be exchanged at such office or
agency. Whenever any Debentures are so surrendered for exchange, the Company
shall execute and deliver the Debentures which the Holder making the exchange is
entitled to receive.
All Debentures issued upon any registration of transfer of exchange
of Debentures shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Agreement, as the Debentures
surrendered upon such registration of transfer or exchange.
Every Debenture presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company duly executed, by the Holder thereof or his attorney duly authorized
in writing.
No service charge shall be made for any registra tion of transfer or
exchange of Debentures, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Debentures,
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other than exchanges pursuant to Article 8 not involving any transfer.
If the Debentures are to be redeemed in part, the Company shall not
be required (A) to issue, register the transfer of or exchange any Debenture
during a period begin ning at the opening of business 15 days before the day of
the mailing of a notice of redemption of any such Debentures selected for
redemption under Section 8.01 and ending at the close of business on the day of
such mailing, or (B) to register the transfer of or exchange any Debenture so
selected for redemption in whole or in part, except the unredeemed portion of
any Debenture being redeemed in part.
(b) Transfer Restrictions. No Debenture may be sold, transferred or
otherwise disposed of (any such sale, transfer or other disposition is herein
referred to as a "sale"), except in compliance with this Section 2.08(b).
(i) A Holder may sell Debentures to a transferee that is an
"accredited investor" or a "qualified institutional buyer", as such terms
are defined in Regulation D and Rule 144A under the Securities Act,
respectively, provided that each of the following conditions is satisfied:
(x) such Holder or transferee represents that it is acquiring
the Debenture or Debentures for its own account and that it is not
acquiring such Debenture or Debentures with a view to, or for offer
or sale in connection with, any distri bution thereof (within the
meaning of the Securi ties Act) that would be in violation of the
securities laws of the United States or any state thereof, but
subject, nevertheless, to the disposition of its property being at
all times within its control; and
(y) such transferee agrees to be bound by the provisions of
this Section 2.08(b) with respect to any sale of the Debentures.
(ii) A Holder may sell its Debentures to a transferee in accordance
with Regulation S under the Securities Act; provided, that each of the
following conditions is satisfied:
(x) if such Holder would be deemed to be the Company, a
distributor or any of their respective
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affiliates or any person acting on behalf of any of the foregoing
for purposes of Regulation S under the Securities Act:
(1) the Company is a "reporting issuer" as such term is
defined in Rule 902(l) under the Securities Act;
(2) any distributor (as defined in Rule 902(c) under the
Securities Act) involved in a sale of Debentures has agreed in
writing that all offers and sales of Debentures shall be made
only in accordance with the provi sions of Rule 903 or Rule
904 under the Securities Act;
(3) all offering materials and docu ments (other than
press releases) used in connection with offers and sales of
the Debentures shall conform to the requirements of Rule
902(h)(2) under the Securities Act; and
(4) each distributor (as defined in (2) above) selling
Debentures to a distributor, dealer (as defined in Section
2(12) of the Securities Act), or a person receiving a selling
concession, fee or other remuneration in respect of the
Debentures sold sends a confirmation or other notice to the
purchaser stating that the purchaser is subject to the same
restrictions on offers and sales that apply to a distributor
prescribed by Regulation S under the Securities Act.
(y) if such exercise and/or sale by a Holder is not governed
by (x) above:
(1) the offer of Debentures is not made to a person in
the United States;
(2) either:
(A) at the time the buy order is originated, the transferee is
outside the United States or the Holder and any person acting on its
behalf reason ably believes that the transferee is outside the
United States, or
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(B) the transaction is executed in, on or through the
facilities of a designated offshore securities market and neither
the Holder nor any person acting on its behalf knows that the
transaction was pre-arranged with a buyer in the United States;
(3) no directed selling efforts are made in
contravention of the requirements of Rule 903(b) or 904(b) of
Regulation S under the Securities Act, as applicable; and
(4) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act.
(iii) In the event of a proposed exercise or sale that does
not qualify under either Section 2.08(b)(i) or 2.08(b)(ii) above, a
Holder may sell its Debentures only if:
(x) such Holder gives written notice to the Company of
its intention to exercise or effect such sale, which notice
(1) shall describe the manner and circumstances of the
proposed trans action in reasonable detail and (2) shall desig
nate the counsel for such Holder, which counsel shall be
reasonably satisfactory to the Company;
(y) counsel for the Holder shall render an opinion, to
the effect that such proposed sale may be effected without
registration under the Securi ties Act or under applicable
Blue Sky laws; and
(z) such Holder or transferee complies with Sections
2.08(b)(i)(x) and 2.08(b)(i)(y).
(iv) A Holder may not sell Debentures to a trans feree if the
consideration for such sale constitutes the assets of an Employee
Benefit Plan as defined in Section 3(3) of ERISA, unless prior to
such sale the Holder consults with the Company and, after such
consultation, determines in good faith that the sale will not
constitute a "prohibited transaction" within the meaning of Section
406 of ERISA or Section 4975 of the Code.
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2.09. Mutilated, Destroyed, Lost and Stolen Debentures.
If any mutilated Debenture is surrendered to the Company, the
Company shall execute and deliver in exchange therefor a new Debenture of the
same principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company (i) evidence to its
satisfaction of the destruction, loss or theft of any Debenture and (ii) such
security or indemnity as may be required by them to save each of it and any
agent harmless, then, in the absence of notice that such Debenture has been
acquired by a bona fide purchaser, the Company shall execute and deliver, in
lieu of any such destroyed, lost or stolen Debenture, a new Debenture of a like
prin cipal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Debenture has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Debenture, pay such Debenture.
Upon the issuance of any new Debenture pursuant to this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses connected therewith.
Every new Debenture issued pursuant to this Section in lieu of any
destroyed, lost or stolen Debenture shall constituted an original additional
contractual obli gation of the Company, whether or not the destroyed, lost or
stolen Debenture shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Agreement equally and proportionately with
any and all other Deben tures duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Debentures.
2.10. Persons Deemed Owners. Prior to due presentment of a Debenture
for registration of transfer, the Company and any agent of the Company may treat
the Person in whose name such Debenture is registered as the owner of such
Debenture for the purpose of receiving payment of principal
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of and interest on such Debenture and for all other purposes whatsoever, whether
or not such Debenture be overdue and neither the Company nor any agent of the
Company shall be affected by notice to the contrary.
2.11. Cancellation. All Debentures surrendered for registration of
transfer or exchange shall, if surren dered to any Person other than the
Company, be delivered to the Company and shall be promptly cancelled by it. All
Debentures surrendered to the Company for payment or redemp tion shall at the
election of the Company either (i) be promptly cancelled by it or (ii) be deemed
to be repurchased or purchased by and assigned (without representation or
warranty whatsoever by, or recourse to, any Holder) to the Company or its
designee, and in either case, from and after the payment for such Debentures
such Debentures shall cease to be entitled to the benefit of this Agreement.
2.12. Subordination. The Holders of the Debentures hereby agree to
enter into one or more Intercreditor Agreements with one or more lenders to
subordinate the Debentures to up to $170 million of Indebtedness for borrowed
money (including any Indebtedness at anytime outstanding under the Notes)
permitted to be Incurred by the Company pursuant to Section 6.01(xi).
SECTION 3
CONDITIONS PRECEDENT
3.01. Execution of this Agreement. The obligation of Whitehall to
enter into this Agreement is subject to satisfaction (or waiver by Whitehall) of
the following conditions (in form and substance acceptable to Whitehall):
(a) No Default; Representations and Warranties. Receipt by Whitehall
of a certificate signed by the President of the Company to the effect that at
the date hereof (i) there shall exist no Default or Event of Default, and (ii)
all representations and warranties contained herein shall be true and correct in
all material respects.
(b) Opinion of Counsel. Receipt by Whitehall of a legal opinion, or
opinions, in form and substance reasonably satisfactory to Whitehall and dated
as of the date hereof, from legal counsel to the Company as to the legal matters
referred to in Section 4.
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(c) Trust Documents. Receipt by Whitehall of all documents
reasonably requested by Whitehall relating to the existence of the Company, the
validity of the Loan Documents and other matters relating thereto, in form and
substance satisfactory to Whitehall, including, but not limited to:
(i) Certificates of Authorization and Incumbency. Certificate of the
Secretary of the Company, dated as of the date hereof, as to resolutions
approving and adopting this Agreement and authorizing the execution and
delivery hereof and as to the authority of the persons executing such
documents.
(ii) Trust Documents. Copies of the Declaration of Trust, the
Certificate of Trust and the Trust Agreement of the Company, together with
all amendments thereto certified as of the date hereof.
(iii) Certificates of Good Standing or Existence. Certificates of
good standing or existence for the Company issued as of a recent date by
its state of organization and each other state where the Company, by the
nature of its business, is required to qualify or register.
(d) Related Transactions. The occurrence of the effectiveness of the
Second Amended Joint Plan of Reorgan ization, as modified, for the Debtor under
Chapter 11 of the Bankruptcy Code Proposed by Rockefeller Center Properties, RCP
Associates and Rockefeller Group, Inc., as modified to the date hereof.
(e) Other Agreement. An agreement in the form attached hereto as
Exhibit F shall have been duly executed and delivered by the parties thereto.
(f) Registration Rights Agreement. The Registration Rights Agreement
shall have been duly executed and delivered by the parties thereto.
(g) Other Documents. Receipt by Whitehall of such other certificates
and documents as it may reasonably request.
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SECTION 4
REPRESENTATIONS AND WARRANTIES OF COMPANY
The Company hereby represents and warrants that on the date hereof:
4.01. Existence, Power and Ownership.
It is a business trust duly organized, validly existing and in good
standing under the laws of the State of Delaware and is in good standing as a
foreign business trust in each other jurisdiction where ownership of its
properties or the conduct of its business requires it to be so, and it has all
power and authority under such laws and its declara tion of trust, certificate
of trust and trust agreement and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.
4.02. Authorization. It has the power and authority to enter into
this Agreement and to perform its obligations under and consummate the
transactions contem plated by this Agreement and has by proper action duly
authorized the execution and delivery of this Agreement.
4.03. No Violation or Conflicts. Neither the execution and delivery
of this Agreement, nor the consumma tion of the transactions contemplated
herein, nor perfor mance of and compliance with the terms and provisions hereof
will (i) violate or conflict with any provision of its declaration of trust,
certificate of trust or trust agreement, (ii) violate any law, regulation
(including without limitation Regulation G, T, U or X), order, writ, judgment,
injunction, decree or permit applicable to it, (iii) violate or materially
conflict with any contractual provisions of, or cause an event of default under,
any indenture, loan agreement, mortgage, deed of trust, contract or other
agreement or instrument to which it is a party or by which it or any of its
properties may be bound, or (iv) result in or require the creation of any lien,
security interest or other charge or encumbrance (other than those contemplated
in or in connection with the Loan Documents) upon or with respect to its
properties.
4.04. Consents. No consent, approval, authorization or order of, or
filing, registration or qualification with, any court or governmental authority
or
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other Person is required in connection with the execution, delivery or
performance of this Agreement.
4.05. Enforceable Obligations. This Agreement, the Debentures and
the Registration Rights Agreement have been duly executed and delivered by the
Company, or in the case of the Debentures and the Registration Rights Agreement,
by RCPI, as predecessor in interest to the Company, and constitute legal, valid
and binding obligations of the Company, enforceable in accordance with their
respective terms.
4.06. Government Regulation. It is not subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, or the
Interstate Commerce Act, each as amended. In addition, it is not (i) an
"investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended, and is not controlled by such a
company, or (ii) a "holding company," or a "Subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "Subsidi ary" or a
"holding company," within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
SECTION 5
AFFIRMATIVE COVENANTS OF THE COMPANY
The Company hereby covenants and agrees that so long as this
Agreement is in effect and until the Deben tures, together with interest, fees
and other obligations hereunder, have been paid in full:
5.01. Information Covenants. The Company will furnish, or cause to
be furnished, to each Holder:
(a) Annual Financial Statements. As soon as available and in any
event within 90 days after the close of each fiscal year of the Company, a
balance sheet of the Company as at the end of such fiscal year together with
related statements of income and retained earnings and of cash flows for such
fiscal year, all in reasonable detail and examined by independent certified
public accountants of recognized national standing whose opinion shall be to the
effect that such financial statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis (except
for changes with which such accountants concur) and shall not be qualified as to
the scope of the audit.
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(b) Auditor's Certificate.At the time of delivery of the financial
statements provided for in Section 5.01(a) hereof, a certificate from the
accountants examining such financial statements, that, to the best of their
knowl edge, no Event of Default exists, or, if any Event of Default does exist,
providing a reasonably detailed summary of all relevant information known to
such accountants.
(c) Quarterly Financial Statements. As soon as available and in any
event within 45 days after the end of each fiscal quarter of each fiscal year of
the Company, (i) except for the fourth fiscal quarter of each fiscal year, a
balance sheet of the Company as at the end of such quarterly period together
with related statements of income and retained earnings for such quarterly
period and for the portion of the fiscal year ending with such period, all in
reasonable detail, and accompanied by a certificate of a duly authorized officer
of the Company (holding the title of vice president or above) as being true and
correct and as having been prepared in accordance with generally accepted
accounting principles applied on a consistent basis, subject to changes
resulting from audit and normal year-end audit adjustments and (ii) a report
showing the calculation of Net Cash Flow for such fiscal quarter and on a
cumulative basis since June 30, 1996. For so long as the Company is required to
file reports pursuant to the Securities Exchange Act of 1934, the Company may
satisfy its obligations under Section 5.01(a) and 5.01(c)(i) hereof by delivery
to each Holder, within the time periods specified in such Sections, of copies of
its reports on Form 10-K and Form 10-Q, respectively, with the Securities and
Exchange Commission.
(d) Officer's Certificate. At the time of delivery of the financial
statements provided for in Sections 5.01(a) and (c) hereof, a certificate of a
duly authorized officer of the Company (holding the title of vice president or
above) substantially in the form of Exhibit B to the effect that no Default or
Event of Default exists, or, if any Default or Event of Default does exist,
specifying the nature and extent thereof and what action the Company proposes to
take with respect thereto.
(e) Notice of Default. Upon the Company obtaining knowledge thereof,
it will give written notice to each Holder promptly, but in any event within
five Business Days, of the occurrence of an event or condition consisting of a
Default, specifying the nature and existence thereof and what action the Company
proposes to take with respect thereto.
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5.02. Preservation of Existence and Franchises. Subject to Section
6.04, the Company will do or cause to be done all things necessary to preserve
and keep in full force and effect its existence, rights, franchises and
authority.
5.03. Books and Records. The Company will keep complete and accurate
books and records of its transactions in accordance with good accounting
practices on the basis of generally accepted accounting principles applied on a
consistent basis (including the establishment and maintenance of appropriate
reserves).
5.04. Compliance with Law. The Company will comply in all material
respects with all applicable laws, rules, regulations and orders of, and all
applicable restrictions imposed by, all applicable governmental bodies, foreign
or domestic, or authorities and agencies thereof (including quasi-governmental
authorities and agencies), in respect of the conduct of its business and the
ownership of its property; provided, however, that the Company shall not be in
violation of this Section 5.04, (i) if the Company shall in good faith contest
the violation of any such law, rule, regulation or order, or the validity
thereof by appropriate proceedings and compliance therewith shall legally be
held in abeyance without subjecting the Company or any Holder to any criminal
liability for failure so to comply therewith, or (ii) in the case of any such
law, ordinance, order, rule and regulation relating to environ mental, safety
and other standards or controls, to the extent that the failure to comply
therewith does not have a material adverse effect on the value of the Real
Estate.
5.05. Insurance. The Company will at all times maintain in full
force and effect insurance (including worker's compensation insurance, liability
insurance, property and casualty insurance and business interruption insurance)
in such amounts, covering such risks and liabilities and with such deductibles
or self-insurance retentions as are in accordance with normal industry practice.
5.06. Maintenance of Property. The Company will maintain and
preserve its properties and assets in good repair, working order and condition,
normal wear and tear excepted, and will make, or cause to be made, in such
properties and assets from time to time all repairs, renewals, replacements,
extensions, additions, betterments and improvements thereto as may be needed or
proper, to the
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extent and in the manner customary for companies in similar businesses.
5.07. ERISA. The Company shall make in all material respects all
contributions required to be made to each Plan under Section 412 of the Code and
Section 302 of ERISA, unless waivers to such contribution requirements have been
obtained.
5.08. Intercreditor Agreement. The Company will comply with the
terms of any Intercreditor Agreement in respect of payments to be made in
respect of the Debentures notwithstanding that such terms may alter the
provisions set forth herein or in the Debentures. Each Holder agrees by
accepting a Debenture to be bound by the terms and provisions of each
Intercreditor Agreement as if such Holder were a party thereto.
SECTION 6
NEGATIVE COVENANTS
The Company hereby covenants and agrees that so long as this
Agreement is in effect and until the Debentures, together with all interest,
fees and other obligations hereunder, have been paid in full:
6.01. Indebtedness. The Company will not, and will not permit any
Subsidiary of the Company to Incur or suffer to exist any Indebtedness, except:
(i) Indebtedness arising under this Agreement and the Debentures;
(ii) The Indenture Securities and any Indebtedness which is
exchanged for or the proceeds of which are used to refinance or refund, or
any extension or renewal of, such Indebtedness (other than the Company's
Current Coupon Convertible Debentures) (each of the foregoing, a
"refinancing") in an aggregate principal amount not to exceed the
principal amount or then outstanding accreted value of the Indebtedness so
refinanced plus the amount of any premium required to be paid in
connection with such refinancing pursuant to the terms of the Indebtedness
so refinanced or the amount of any premium reasonably determined by the
Company as necessary to accomplish such refinancing by means of a tender
offer or privately negotiated repur chase, plus the expenses of the
Company or the
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Subsidiary, as the case may be, incurred in connection with such
refinancing; provided, however, that (A) Indebtedness the proceeds of
which are used to refinance the Debentures or Indebtedness which is pari
passu with or subordinate in right of payment to the Debentures shall only
be permitted if (x) in the case of any refinancing of the Debentures or
Indebtedness which is pari passu to the Debentures, the refinancing
Indebtedness is Incurred by the Company and made pari passu to the
Debentures or subordinated to the Debentures, and (y) in the case of any
refinancing of Indebtedness which is subordinated to the Debentures, the
refinancing Indebtedness is Incurred by the Company and is also
subordinated to the Debentures; (B) the refinancing Indebtedness by its
terms, or by the terms of any agreement or instrument pursuant to which
such Indebtedness is issued, (1) does not provide for payments of
principal of such Indebtedness at the stated maturity thereof or by way of
a sinking fund applicable thereto or by way of any mandatory redemption,
defeasance, retirement or repurchase thereof (including any redemption,
defeasance, retirement or repurchase which is contingent upon events or
circumstances, but excluding any retirement required by virtue of
acceleration of such Indebtedness upon any event of default thereunder),
in each case prior to the stated maturity of the Indebtedness being
refinanced and (2) does not permit redemption or other retirement
(including pursuant to an offer to purchase) of such Indebtedness at the
option of the holder thereof prior to the final stated maturity of the
Indebtedness being refinanced, other than a redemption or other retirement
at the option of the holder of such Indebtedness (including pursuant to an
offer to purchase) which is conditioned upon provisions substantially
similar to those described in Section 6.10; and (C) any refinancing of
such Indebtedness may be Incurred only by the Company; and provided,
further, that Indebtedness Incurred pursuant to this clause (ii) may not
be Incurred more than 60 days prior to the application of the proceeds to
repay the Indebtedness to be refinanced;
(iii) Indebtedness (other than the Debentures) owed by the Company
to RCPI, RCPI Holdings, Inc., RCPI Investors LLC, Whitehall, Whitehall V,
Rockprop L.L.C., Prometheus Investors, L.L.C., Troutlet Investments
Corporation, Gribble Investments (Tortola) BVI, Inc., Weevil Investments
(Tortola) BVI, Inc., Exor Group
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S.A., Derrycroft Enterprises, Inc. or any of their successors, transferees
or assigns for which fair value has been received; provided that any such
Indebtedness shall be subordinated to the Debentures pursuant to an
intercreditor agreement substantially in the form attached hereto as
Exhibit E;
(iv) Purchase Money Secured Debt Incurred by the Company or any
Subsidiary of the Company in respect of property acquired after the date
hereof, and any refinancing of such Indebtedness in an aggregate principal
amount not to exceed the principal amount or then outstanding Indebtedness
so refinanced plus the amount of any premium required to be paid in
connection with such refinancing pursuant to the terms of the Indebtedness
so refinanced or the amount of any premium reasonably determined by the
Company as necessary to accomplish such refinancing by means of a tender
offer or privately negotiated repurchase, plus the expenses of the Company
or the Subsidiary, as the case may be, incurred in connection with such
refinancing; provided, however, that (A) Indebtedness the proceeds of
which are used to refinance Indebtedness which is pari passu with or
subordinate in right of payment to the Debentures shall only be permitted
if (x) in the case of any refinancing of Indebtedness which is pari passu
to the Debentures, the refinancing Indebtedness is Incurred by the Company
and made pari passu to the Debentures or subordinated to the Debentures,
and (y) in the case of any refinancing of Indebtedness which is
subordinated to the Debentures, the refinancing Indebtedness is Incurred
by the Company and is also subordinated to the Debentures; (B) the
refinancing Indebtedness by its terms, or by the terms of any agreement or
instrument pursuant to which such Indebtedness is issued, (1) does not
have a Weighted Average Life less than the Weighted Average Life of the
Indebtedness being refinanced and does not have a final stated maturity
earlier than the final stated maturity of the Indebtedness being
refinanced and (2) does not permit redemption or other retirement
(including pursuant to an offer to purchase) of such Indebtedness at the
option of the holder thereof prior to the final stated maturity of the
Indebtedness being refinanced, other than a redemption or other retirement
at the option of the holder of such Indebtedness (including pursuant to an
offer to purchase) which is conditioned upon provisions substantially
similar to those described in Section 6.10 or, in the case of Purchase
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Money Secured Debt, which is conditioned upon the sale or other
disposition of the property that secures such Purchase Money Secured Debt;
and (C) in the case of any refinancing of Indebtedness Incurred by the
Company, the refinancing Indebtedness may be Incurred only by the Company,
and in the case of any refinancing of Indebtedness Incurred by a
Subsidiary, the refinancing Indebtedness may be Incurred only by such
Subsidiary and; provided, further, that a refinancing Incurred pursuant to
this clause (iv) may not be Incurred more than 60 days prior to the
application of the proceeds to repay the Indebtedness to be refinanced;
(v) Capital Lease Obligations Incurred by the Company or any
Subsidiary of the Company in a principal amount not to exceed $5,000,000
in the aggregate at any one time outstanding, provided that the principal
amount of any such Capital Lease Obligation does not, at the time of
Incurrence, exceed the fair market value of the property acquired in
connection with such Capital Lease Obligation;
(vi) Redevelopment Debt Incurred by the Company or any Subsidiary of
the Company in respect of the Real Estate and any refinancing of such
Indebtedness that meets requirements identical to those specified in
clause (iv) above;
(vii) Capital Improvement Debt Incurred by the Company or any
Subsidiary of the Company in respect of the Real Estate and any
refinancing of such Indebtedness that meets requirements identical to
those specified in clause (iv) above;
(viii) The letters of credit required to be maintained by the
Company pursuant to that certain Tax Indemnity Agreement, dated May 29,
1996, by and among the Company, RCP, RCPA, Radio City Music Hall
Productions, Inc. and Rockefeller Group, Inc., and those certain letters
of credit issued on behalf of the Company in respect of any obligations of
the Company to tenants under leases of any part of the Real Estate not to
exceed $30,000,000 in the aggregate at any one time outstanding;
(ix) Up to $170,000,000 of Indebtedness Incurred by the Company from
and after the date of this Agreement, including the Notes to the extent
outstanding on the date of this Agreement and any
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refinancing in an aggregate principal amount not to exceed the principal
amount of the Indebtedness so refinanced plus the amount of any premium
required to be paid in connection with such refinancing pursuant to the
terms of the Indebtedness so refinanced or the amount of any premium
reasonably determined by the Company as necessary to accomplish such
refinancing by means of a tender offer or privately negotiated repurchase,
plus the expenses of the Company or the Subsidiary, as the case may be,
incurred in connection with such refinancing; provided, however, that a
refinancing of Indebtedness Incurred pursuant to this clause (xi) may not
be Incurred more than 60 days prior to the application of the proceeds to
repay the Indebtedness to be refinanced. Notwithstanding anything to the
contrary in this clause (ix), if Net Available Proceeds are used to repay
or repurchase any such Indebtedness the principal amount of such repaid or
repurchased Indebtedness may not be subsequently Incurred under this
clause (ix) unless (1) after giving effect to the Incurrence of such
principal amount of Indebtedness the aggregate principal amount of
Indebtedness then outstanding under this clause (ix) is equal to or less
than $100,000,000 and (2) the proceeds from the Incurrence of such
principal amount of Indebtedness are used to improve the Company's assets.
In determining whether additional Indebtedness may be Incurred under
clause (1) of the immediately preceding sentence, Indebtedness incurred
after such a repayment or repurchase shall first be deemed not to be
reIncurred in respect of such repaid or repurchased Indebtedness. Set
forth on Exhibit G hereto are examples of the application of this clause
(ix).
(x) If any holder of at least 40% of the Company's Capital Stock is
a REIT and if Net Cash Flow is insufficient to allow the Company to make a
distribution to its equity holders in any fiscal year in the amount
necessary to permit the Company to make a dividend or distribution that
would be sufficient for such REIT to pay dividends so that it would
continue to qualify as a REIT under the Code, and a concurrent pro rata
dividend or distribution to the other holders of the Company's Capital
Stock (the "REIT Qualification Amount"), Indebtedness for borrowed money
up to the REIT Qualification Amount.
The Company may not permit any Subsidiary of the Company to issue
any Preferred Stock to any Person other
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than the Company or a Wholly Owned Subsidiary of the Company or permit any
Person other than the Company or any Wholly Owned Subsidiary of the Company to
hold any Preferred Stock of a Subsidiary of the Company.
6.02. Liens. The Company will not and will not permit any Subsidiary
to (A)(i) Incur or suffer to exist any Lien with respect to any of its property
or assets of any kind (whether real or personal, tangible or intangible),
whether now owned or hereafter acquired to secure any Indebtedness, or (ii)
assign any right to receive income without in either case making, or causing
such Subsidiary to make, effective provision for securing the Debentures (x)
equally and ratably with such Indebtedness as to such property for so long as
such Indebtedness will be so secured or (y) in the event such Indebtedness is
Indebtedness of the Company which is subordinate in right of payment to the
Debentures, prior to such Indebtedness as to such property for so long as such
Indebtedness will be so secured or (B) Incur or suffer to exist any (i) Liens
for taxes, (ii) Liens in respect of property imposed by law such as
materialmen's mechanics', warehousemen's and other like Liens, (iii) Liens to
secure performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases, contracts, performance and return-of-money bonds and other similar
obligations and (iv) attachment or judgment Liens.
The foregoing restrictions shall not apply to: (i) Liens securing
only the Debentures; (ii) Liens in favor of the Company; (iii) Liens on real or
personal property of the Company or a Subsidiary of the Company as described in
the definition of "Purchase Money Secured Debt" to secure only Purchase Money
Secured Debt, (iv) Liens securing only Senior Debt, (v) Permitted Liens or (vi)
any interest in or title of a lessor to any property subject to a Capital Lease
Obligation which is permitted under this Agreement.
6.03. Nature of Business. The Company will not alter the character
or conduct of its business from that conducted and contemplated as of the date
hereof except that the Company may engage in related or incidental businesses.
6.04. Consolidation, Merger, Sale or Purchase of Assets. The Company
may not, in a single transaction or a series of related transactions, (i)
consolidate with or merge into any other Person or permit any other Person to
consolidate with or merger into the Company or (ii) directly or indirectly,
transfer, sell, lease or otherwise dispose of all or substantially all of its
assets, unless: (1) in a
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transaction in which the Company does not survive or in which the Company sells,
leases or otherwise disposes of all or substantially all of its assets, the
successor entity to the Company is organized under the laws of the United States
of America or any state thereof or the District of Columbia and shall expressly
assume, by a separate agreement in form satisfactory to the Required Holders,
all of the Company's obligations under this Agreement; (2) immediately before
and after giving effect to such transaction no Default or Event of Default shall
have occurred and be continuing; and (3) immediately after giving effect to such
transaction, the Consolidated Net Worth of the Company (or other successor
entity to the Company) is equal to or greater than that of the Company
immediately prior to the transaction.
6.05. Limitation on Investments. The Company may not, and may not
permit any Subsidiary of the Company to, make or suffer to exist any Investment
in any Person other than an Investment in the Company or a Subsidiary of the
Company or a Person that will become or be merged into or consolidated with a
Subsidiary as a result of such Investment; provided, however, that
notwithstanding the foregoing, the Company and any Subsidiary of the Company may
make (i) Permitted Investments or (ii) any Investment the amount of which is
treated as a Restricted Payment for all purposes of this Agreement.
6.06. Transactions with Affiliates. The Company will not enter into
any transaction or series of trans actions with any stockholder, employee or
Affiliate other than on terms and conditions substantially as favorable to the
Company as would be obtainable by it in a comparable arm's-length transaction
with a Person other than a stock holder, employee or Affiliate, except for (i)
employment contracts and other employee benefit plans and arrangements entered
into in the ordinary course of business, (ii) arran gements with directors
approved by the Board of Trustees of the Company, (iii) the Management
Agreement, dated June 18, 1996, by and between the Company and Tishman Speyer
Properties, L.P. as it may be extended on substantially the same terms, (iv)
making any permitted Restricted Payment or (v) incurring any Indebtedness
permitted under Section 6.01(iii). For any transaction that involves payments in
excess of $10,000,000, a majority of the disinterested members of the Board of
Trustees shall determine that the transaction satisfies the above criteria and
shall evidence such a determination by a resolution of the Board of Trustees.
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6.07. Sale and Leaseback. The Company will not enter into any
arrangement pursuant to which it will lease back, as lessee, any property (real,
personal or mixed, tangible or intangible) previously owned by it and sold or
otherwise transferred or disposed of, directly or indirectly, to the
owner-lessor of such property unless such transaction is in lieu of the
Incurrence of Purchase Money Secured Debt and a Lien to secure such Indebtedness
which would be permitted under the terms of Sections 6.01(iv) and 6.02.
6.08. Limitation on Restricted Payments. The Company (i) may not,
and may not permit any Subsidiary of the Company to, directly or indirectly,
declare or pay any dividend or make any distribution (including any payment in
connection with any merger or consolidation derived from assets of the Company
or any Subsidiary) in respect of its Capital Stock or to the holders thereof,
excluding (a) any dividends or distributions by the Company payable solely in
shares of its Capital Stock (other than Redeemable Stock) or in options,
warrants or other rights to acquire its Capital Stock (other than Redeemable
Stock), and (b) in the case of a Subsidiary, dividends or distributions payable
to the Company or a Wholly Owned Subsidiary of the Company or pro rata dividends
or distributions, (ii) may not, and may not permit any Subsidiary to, purchase,
redeem, or otherwise acquire or retire for value (a) any Capital Stock of the
Company or any Subsidiary or any Related Person of the Company or (b) any
options, warrants or other rights to acquire shares of Capital Stock of the
Company or any Subsidiary or any Related Person of the Company or any securities
convertible or exchangeable into shares of Capital Stock of the Company or any
Subsidiary or any Related person of the Company, in each case except, in the
case of Capital Stock of a Subsidiary, from the Company or a Wholly Owned
Subsidiary of the Company, and (iii) may not, and may not permit any Subsidiary
to, redeem, repurchase, defease or otherwise acquire or retire for value prior
to any scheduled maturity, repayment or sinking fund payment Indebtedness of the
Company which is subordinate in right of payment to the Debentures (each of
clauses (i) through (iii) being a "Restricted Payment") if: (1) a Default or
Event of Default shall have occurred and is continuing or would result from such
Restricted Payment, or (2) upon giving effect to such Restricted Payment, the
aggregate of all Restricted Payments (which term does not include any Permitted
Distributions (as defined below)) from June 30, 1996 exceeds the sum of: (a)
cumulative Net Cash Flow (or, in the case Net Cash Flow shall be negative, less
such
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deficit) of the Company since June 30, 1996 through the last day of the last
full fiscal quarter ending immediately preceding the date of such Restricted
Payment for which quarterly or annual financial statements are available (taken
as a single accounting period); plus (b) 100% of the aggregate net proceeds
received by the Company after July 10, 1996, from contributions of capital or
the issuance and sale (other than to a Subsidiary) of Capital Stock (other than
Redeemable Stock) of the Company, options, warrants or other rights to acquire
Capital Stock (other than Redeemable Stock) of the Company and Indebtedness of
the Company that has been converted into or exchanged for Capital Stock (other
than Redeemable Stock and other than by or from a Subsidiary) of the Company
other than Investors Equity (as defined below). Prior to the making of any
Restricted Payment, the Company shall deliver to the Holder's a certificate of
the President of the Company setting forth the computations by which the
determination required by clause (2) above was made and stating that no Default
or Event of Default has occurred and is continuing or will result from such
Restricted Payment.
Notwithstanding the foregoing, the Company shall be entitled to make
the following Restricted Payments unless a payment Default described in Section
7.01(a) has occurred and is continuing or would result from the making of such
Restricted Payment:
(x) if any holder of at least 40% of the Company's Capital Stock is
a real estate investment trust ("REIT") as defined in the Code, any
dividends or distributions that together with other Restricted Payments
permitted to be made pursuant to this Section 6.08 would be sufficient for
such REIT to pay dividends to the extent the payment of such dividends
would permit such REIT to receive a dividends paid deduction and reduce
its corporate level tax (but not below zero), and a concurrent pro rata
dividend or distribution to the other holders of the Company's Capital
Stock; and
(y) distributions or dividends permitted under Section 6.10.
Notwithstanding any provision herein to the contrary, the Company
shall be permitted to make distributions and dividends to the extent the Company
would be able, pursuant to the terms of Section 1008 of the 1985 Indenture, to
make a distribution of "Distributable Cash"
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(as defined therein), such distributions and dividends under this final
paragraph of Section 6.08 being "Permitted Distributions," provided that after
giving effect to a Permitted Distribution and all prior Permitted Distributions,
the amount distributed pursuant to this final paragraph of Section 6.08 is no
greater than the total amount of equity invested directly or indirectly in the
Company by the Equity Investors on or after July 10, 1996 (the "Investors
Equity") minus $300,000,000. Permitted Distributions shall not be considered
Restricted Payments for any purpose under this Agreement. For purposes of this
final paragraph of Section 6.08, Equity Investors means RCPI, RCPI Holdings,
Inc., RCPI Investors LLC, Whitehall, Whitehall V, Rockprop L.L.C., Prometheus
Investors, L.L.C., Troutlet Investments Corporation, Gribble Investments
(Tortola) BVI, Inc., Weevil Investments (Tortola) BVI, Inc., Exor Group S.A.,
Derrycroft Enterprises, Inc. or any of their successors, transferees or assigns.
6.09. Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries. The Company may not, and may not permit any Subsidiary
to, directly or indir ectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any Subsidiary
of the Company (i) to pay divi dends (in cash or otherwise) or make any other
distributions in respect of its Capital Stock owned by the Company or any other
Subsidiary of the Company or pay any Indebtedness or other obligation owed to
the Company or any other Subsid iary; (ii) to make loans or advances to the
Company or any other Subsidiary; or (iii) to transfer any of its property or
assets to the Company or any other Subsidiary. Notwith standing the foregoing,
the Company may, and may permit any Subsidiary to, suffer to exist any such
encumbrance or restriction (a) pursuant to the 1985 Indenture and the Loan
Agreement; (b) pursuant to an agreement relating to any Indebtedness Incurred by
a Person (other than a Subsidiary of the Company existing on the date hereof or
any Subsidiary carrying on any of the businesses of any such Subsidiary) prior
to the date on which such Person became a Subsidiary of the Company and
outstanding on such date and not Incurred in anticipation of becoming a
Subsidiary, which encumbrance or restriction is not applicable to any Person, or
the properties or assets of any Person, other than the Person so acquired; (c)
pursuant to an agreement relating to any Indebtedness Incurred by a Subsidiary
of the Company that does not own any of the properties or assets that are owned
by the Company as of the date hereof, which encumbrance or restriction is not
applicable to any Person, or the
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properties or assets of any Person, other than such Subsidiary; (d) pursuant to
an agreement effecting a renewal, refunding or extension of Indebtedness
Incurred pursuant to an agreement referred to in clause (a), (b) or (c) above;
provided, however, that the provisions contained in such renewal, refunding or
extension agreement relating to such encumbrance or restriction are no more
restrictive in any material respect than the provisions contained in the
agreement the subject thereof, as determined in good faith by the Board of
Trustees and evidenced by a resolution of the Board of Trustees; (e) in the case
of clause (iii) above, restrictions contained in any security agreement
(including a capital lease) securing Indebtedness of a Subsidiary otherwise
permitted under this Agreement, but only to the extent such restrictions
restrict the transfer of the property subject to such security agreement; (f) in
the case of clause (iii) above, customary nonassignment provisions entered into
in the ordinary course of business consistent with past practices in leases and
other contracts to the extent such provisions restrict the transfer or
subletting of any such lease or the assignment of rights under any such
contract; (g) any restriction with respect to a Subsidiary of the Company
imposed pursuant to an agreement which has been entered into for the sale or
disposition of all or substantially all of the Capital Stock or assets of such
Subsidiary, provided that consummation of such transaction would not result in a
Default or Event of Default, that such restriction terminates if such
transaction is closed or abandoned and that the closing or abandonment of such
transaction occurs within one year of the date such agreement was entered into;
or (h) if such encumbrance or restriction is the result of applicable corporate
law or regulation relating to the payment of dividends or distributions.
6.10. Limitation on Asset Dispositions. The Company may not, and may
not permit any Subsidiary to, make any Asset Disposition in one or more related
transactions unless: (i) the Company or the Subsidiary, as the case may be,
receives consideration for such disposition at least equal to the fair market
value for the assets sold or disposed of as determined by the Board of Trustees
in good faith and evidenced by a resolution of the Board of Trustees; (ii) at
least 75% of the consideration for such disposition consists of cash or readily
marketable cash equivalents or the assumption of Indebtedness of the Company
(other than Indebtedness that is subordinated to the Deben tures) relating to
such assets and release from all liabil ity on the Indebtedness assumed; and
(iii) all Net Available
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Proceeds, less any amounts invested within 360 days of such disposition in
assets related to the business of the Company, are applied within 360 days of
such disposition (1) first, to the permanent repayment or reduction of Senior
Debt then outstanding under any agreements or instruments which would require
such application or prohibit payments pursuant to clause (2) or (3) following,
(2) second, to the permanent repayment or reduction of other Indebtedness of the
Company that ranks pari passu with the Debentures Incurred after the date hereof
and permitted pursuant to Section 6.01 then outstanding under any agreements or
instruments which would require such application or prohibit payments pursuant
to clause (3) following, (3) third to the extent of remaining Net Available
Proceeds, to make an Offer to Purchase outstanding Debentures at 102.5% (or at
the then applicable Redemption Price, if lower) of their principal amount plus
accrued interest to the date of purchase, and (4) fourth, to the extent of any
remaining Net Available Proceeds, to any other use as determined by the Company
which is not otherwise prohibited by this Agreement including, without
limitation, the repayment of other Indebtedness of the Company or Indebtedness
of a Subsidiary of the Company (to the extent permitted under the terms thereof)
and the payment of any dividend or distribution in respect of the Capital Stock
of the Company. The provisions of this Section 6.10 shall not apply in the event
of a sale, lease or other disposition of all or substantially all of the
Company's assets in which case the provisions of Section 6.04 or Section 8.01(b)
shall apply as appropriate.
6.11. Limitation on Repayment of Indebtedness. The Company may not
and may not permit any Subsidiary to, use Net Cash Flow to voluntarily repay or
repurchase, in whole or in part, any Indebtedness for borrowed money of the
Company or any Subsidiary that ranks pari passu with the Debentures without
first making an Offer to Purchase outstanding Debentures in an amount of the Net
Cash Flow proposed to be used to repay or repurchase such other Indebtedness at
102.5% (or at the then applicable Redemption Price (calculated pursuant to
Section 8.01(a)(ii)), if lower) of their principal amount plus accrued interest
to the date of purchase.
6.12. Limitation on Use of Senior Debt Proceeds. The Company may not
and may not permit any Subsidiary to, use the proceeds of any Senior Debt to
make a Restricted Payment or to voluntarily repay or repurchase, in whole or in
part, any Indebtedness for borrowed money of the Company or any Subsidiary that
ranks pari passu with the Debentures
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without first making an Offer to Purchase outstanding Debentures in an amount of
such proceeds proposed to be used to make such Restricted Payment or to repay or
repurchase such other Indebtedness at 102.5% (or at the then applicable
Redemption Price (calculated pursuant to Section 8.01(a)(ii)), if lower) of
their principal amount plus accrued interest to the date of purchase.
SECTION 7
EVENTS OF DEFAULT
7.01. Events of Default. An Event of Default shall exist upon the
occurrence of any of the following specified events (each an "Event of
Default"):
(a) Payment. The Company shall (i) default in the payment when due
of any principal, or premium, owing hereunder or under the Debentures
(including any mandatory redemption required hereunder or any voluntary
redemption after giving notice thereof in accordance with Section 8.01 or
any repurchase price payable pursuant to Section 6.10 or 6.11), or (ii)
default in the payment when due of any interest, fees or other amounts
owing hereunder or under the Debentures or in connection herewith or
therewith and such default referred to in this subparagraph (ii) shall
continue unremedied for at least thirty (30) days; or
(b) Representations. Any representation, warranty or statement made
on the date hereof by the Company herein or in any statement or
certificate delivered or required to be delivered pursuant hereto shall
prove untrue in any material respect on the date as of which it was made
or deemed to have been made; or
(c) Covenants. The Company shall (i) default in the due performance
or observance of any term, covenant or agreement contained in Section
5.01(e) or in Section 6 (other than Sections 6.03 and 6.06), or (ii)
default in the due performance or observance by it of any term, covenant
or agreement (other than those referred to in subsection (a), (b) or (c)
(i) of this Section 7.01) contained in this Agreement, and such default
referred to in this subparagraph (ii) shall continue unremedied for a
period of at least 30 days after notice from Holders owning at least
twenty-five percent (25%) of the outstanding Debentures of such
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default (or, if such default cannot be cured within such thirty (30) day
period and the Company is at all times diligently pursuing the cure
thereof, such default shall continue unremedied for a period of at least
ninety (90) days after notice of such default is given); or
(d) Bankruptcy, Etc. (i) The Company or any Subsidiary of the
Company shall commence a voluntary case concerning itself under the
Bankruptcy Code in Title 11 of the United States Code (as amended,
modified, succeeded or replaced, from time to time, the "Bankruptcy
Code"); or (ii) an involuntary case is commenced against the Company or
any Subsidiary of the Company under the Bankruptcy Code and the petition
is not dismissed within 90 days after commencement of the case; or (iii) a
custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of all or substantially all of the property of the Company or any
Subsidiary of the Company; or (iv) the Company or any Subsidiary of the
Company commences any other proceeding under any reorganization,
arrangement, adjustment of the debt, relief of creditors, dissolution,
insolvency or similar law of any jurisdiction whether now or hereafter in
effect relating to the Company or any Subsidiary of the Company; or (v)
there is commenced against the Company or any Subsidiary of the Company
any such proceeding which remains undismissed for a period of 90 days
after commencement of such proceeding; or (vi) the Company or any
Subsidiary of the Company is adjudicated insolvent or bankrupt; or (vii)
any order of relief or other order approving any such case or proceeding
is entered; or (viii) the Company or any Subsidiary of the Company suffers
appointment of any custodian or the like for it or for any substantial
part of its property and such appointment continues unchanged or unstayed
for a period of 90 days after commencement of such appointment; or (ix)
the Company or any Subsidiary of the Company makes a general assignment
for the benefit of creditors; or (x) any corporate, partnership or trust
action, as applicable, is taken by the Company or any Subsidiary of the
Company for the purpose of effecting any of the foregoing; or
(e) Defaults under Other Agreements. (i) The Company or any
Subsidiary of the Company shall (x) default in any payment in an amount of
$5,000,000 or more (beyond the applicable grace period with
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respect thereto, if any) with respect to any other Indebtedness, or (y)
default in the observance or performance of any agreement or condition
relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event or
condition shall occur or condition exist, the effect of which default, in
the case of (y), or other event or condition is that either (i) any such
Indebtedness of the Company or any Subsidiary of the Company, in an amount
of $5,000,000 or more, shall be declared due and payable, or required to
be prepaid other than by a regularly scheduled required prepayment, prior
to the stated maturity thereof or (ii) the holder or holders of such
Indebtedness (or trustee or agent on behalf of such holders) have become
entitled (either voluntarily or involuntarily) to receive any of the
assets of the Company or any Subsidiary of the Company as full or partial
satisfaction of such Indebtedness.
(f) Judgments. One or more final judgments or decrees shall be
entered against the Company or any Subsidiary of the Company involving a
liability of $10,000,000 or more in the aggregate for all such judgments
and decrees collectively (not paid or fully covered by insurance provided
by a carrier who has acknowledged coverage) and any such judgments or
decrees shall not have been vacated, discharged, paid or stayed or bonded
pending appeal within the time permitted to appeal therefrom other than
any such judgment or decree arising out of, associated with or related to
the litigation captioned Zell/Merrill Lynch Real Estate Opportunity
Partners Limited Partnership III v. Rockefeller Center Properties, Inc.,
96 Civ. 1445 that is pending in the United States Federal District Court
for the Southern District of New York or Zell/Merrill Lynch Real Estate
Opportunity Partners Limited Partnership III v. Rockefeller Center
Properties, Inc., et, al., Case No. 96 CH 03341 that is pending in the
Circuit Court of Cook County, Illinois.
7.02 Remedies. Upon the occurrence of an Event of Default, the
Required Holders, by written notice to the Company, may take any of the
following actions without prejudice to its rights to enforce its claims against
the Company, except as otherwise specifically provided for herein:
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(i) Acceleration of Debentures. Declare the unpaid principal of and
any accrued interest in respect of the Debentures to be due whereupon the
same shall be immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Company;
(ii) Enforcement of Rights. Enforce any and all Liens and security
interests in favor of the Holders in respect of the Debentures and any
other amounts due and all rights of set-off; and
(iii) Waiver of Past Defaults. The Holders of not less than a
majority in principal amount of the outstanding Debentures may on behalf
of the Holders of all the Debentures waive any past default hereunder,
except a default:
(1) in the payment of the principal of, or premium, or any
interest on any Debenture, or
(2) in respect of a covenant or provision hereof which under
Section 9.05 cannot be modified or amended without the consent of
the Holder of each outstanding Debenture.
Upon any such waiver, such default ceases to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Agreement; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
provided, however, that, notwithstanding the foregoing, if an Event of Default
specified in Section 7.01(d) shall occur, then the Debentures shall immediately
become due and payable without the giving of any notice or other action by any
Holder.
SECTION 8
REDEMPTION
8.01. Redemption.
(a) Voluntary Redemption. (i) Provided the Notes have been paid in
full or funds for such payment have been irrevocably deposited with an agent
(reasonably satisfactory to the Agent) for such payment, the Company shall have
the right to redeem the Debentures at any time on or after
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December 30, 2000 in whole or in part upon 30 days advance written notice in
accordance with Section 8.01(d) to each Holder which notice shall specify the
date on which the Company will effect such redemption (a "Redemption Date").
(ii) Debentures redeemed from December 30, 2000 through December 31,
2001, inclusive, shall be redeemed at 105% of the principal amount of Debentures
redeemed; debentures redeemed from January 1, 2002 through December 31, 2002,
inclusive, shall be redeemed at 103% of the principal amount of Debentures
redeemed; debentures redeemed from January 1, 2003 through December 31, 2003,
inclusive, shall be redeemed at 101.5% of the principal amount of Debentures
redeemed; and Debentures redeemed thereafter shall be redeemed at 100% of the
principal amount of Debentures redeemed, in each case with interest accrued to
the date of redemption.
(b) Mandatory Redemption. Concurrently with the consummation of any
single transaction or upon the sale, lease or other disposition of assets having
fifty percent (50%) of the value of all of the Company's assets in connection
with a series of related transactions, in either case, in which the Company
shall directly or indirectly sell, lease or otherwise dispose of all or
substantially all of its assets to two or more Persons that are not Affiliated
with one another, the Company shall redeem all, but not less than all, of the
Debentures upon 30 days advance written notice in accordance with Section
8.01(d) to each Holder, which notice shall specify the Redemption Date, at the
following redemption price:
(i) if such redemption shall occur prior to December 30, 2000, at
100% of the principal amount of the Debentures, plus the Yield Maintenance
Premium, plus accrued interest to the date of redemption; or
(ii) if such redemption shall occur on or after December 30, 2000,
at the then applicable Redemption Price calculated pursuant to Section
8.01(a)(ii) plus accrued interest to the date of redemption.
(c) Partial Redemption. (i) If less than all of the then outstanding
Debentures are to be redeemed on any Redemption Date, the Company shall (x)
include in the notice provided to the Holders pursuant to Section 8.01(d) the
principal amount of Debentures then outstanding and the principal amount of
Debentures to be redeemed and (y) effect
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such redemption (to the extent practicable within $1,000 increments) on a pro
rata basis.
(ii) Any Debenture which is to be redeemed only in part shall be
surrendered at the place specified in the notice delivered to Holders pursuant
to Section 8.01(d) (with due endorsement by, or a written instrument of transfer
in form satisfactory to the Company duly executed by, the Holder thereof or his
attorney duly authorized in writing), and the Company shall execute and deliver
to the Holder of such Debenture without service charge, a new Debenture or
Debentures of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Debenture so surrendered. At the Company's election, any
such redemption may be treated as a repurchase of such Debentures and in such
case, the Holders of such Debentures shall assign such Debentures to the Company
or its designee (without representation or warranty by, or recourse to, such
Holders).
(d) Notice of Redemption. Notice of redemption shall be given by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date, to each Holder, at his address appearing in the
Security Register (as defined below).
All notices of redemption shall state:
(i) the Redemption Date,
(ii) the Redemption Price,
(iii) that on the Redemption Date the Redemption Price will become
due and payable upon each Debenture and that interest thereon will cease
to accrue on and after said date, and
(iv) the place or places where each Debenture is to be surrendered
for payment of Redemption Price.
Notice of redemption of Debentures to be redeemed at the election of
the Company shall be given by the Company and at the expense of the Company and
shall be irrevocable.
(e) Interest after Redemption Date. On any Redemption Date on which
the then outstanding Debentures are to be redeemed in whole, the then
outstanding Debentures shall become due and payable at the Redemption Price, and
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from and after such date (unless the Company shall default in the payment of the
Redemption Price and accrued interest) such Debentures shall cease to bear
interest. Upon surrender of any such Debenture for redemption in accordance with
the notice specified in Section 8.01(d), such Debenture shall be paid by the
Company at the Redemption Price, together with accrued interest to the
Redemption Date. If any Debenture called for redemption shall not be so paid
upon surrender thereof for redemption, the principal shall, until paid, bear
interest from the Redemption Date at the rate plus such additional rate
prescribed in Section 2.03.
SECTION 9
MISCELLANEOUS
9.01. Notices. Except as otherwise expressly provided herein, all
notices and other communications shall have been duly given and shall be
effective (i) when delivered, (ii) when transmitted via telecopy (or other
facsimile device) to the number set out below, (iii) the day following the day
on which the same has been delivered prepaid to a reputable national overnight
air courier service or (iv) the third Business Day following the day on which
the same is sent by certified or registered mail, postage prepaid, in each case
to the respective parties at the address set forth below, or at such other
address as such party may specify by written notice to the other party hereto:
if to the Company: RCPI Trust
c/o Tishman Speyer Properties, L.P.
520 Madison Avenue
New York, New York 10022
Attention: Jerry Speyer
Telephone: 212-715-0310
Telecopy: 212-319-1745
if to the Holders: at the addresses set forth in the
Security Register
9.02. Benefit of Agreement; Assignments and Participations.
This Agreement shall be binding upon and inure to the benefit of and
be enforceable by the respective successors and assigns of the parties hereto;
provided that the Company may not assign and transfer any of its interests
without prior written consent of each Holder.
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Nothing in this Agreement or in the Debentures, express or implied,
shall give to any Person other than the parties hereto, any benefit or any legal
or equitable right, remedy or claim under this Agreement.
9.03. No Waiver; Remedies Cumulative. No failure or delay on the
part of any Holder in exercising any right, power or privilege hereunder or
under the Debentures and no course of dealing between the Company and any Holder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder or under the Debentures preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege hereunder or thereunder. The rights and remedies provided herein are
cumulative and not exclusive of any rights or remedies which the Holders would
otherwise have. No notice to or demand on the Company in any case shall entitle
the Company to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Holders to any other
or further action in any circumstances without notice or demand.
9.04. Payment of Expenses; Indemnification. The Company agrees to:
(i) pay all reasonable out-of-pocket costs and expenses of
Whitehall, Whitehall Street V and the Holders in connection with any
amendment, waiver or consent relating hereto including, but not limited
to, any such amendments, waivers or consents resulting from or related to
any work-out, renegotiation or restructure relating to the performance by
the Company under this Agreement and of the Holders in connection with
enforcement of this Agreement, the Debentures and any documents and
instruments referred to herein or therein (including, without limitation,
the fees and disbursements of counsel for the Company);
(ii) pay and hold the Holders harmless from and against any and all
present and future stamp and other similar taxes with respect to the
foregoing matters and save the Holders harmless from and against any and
all liabilities with respect to or resulting from any delay or omission
(other than to the extent attributable to the Holders) to pay such taxes;
(iii) indemnify the Holders, their respective officers, directors,
partners, employees, representatives, affiliates and agents from and hold
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each of them harmless against any and all losses, liabilities, claims,
damages or expenses incurred by any of them as a result of, or arising out
of, or in any way related to, or by reason of, any investigation,
litigation or other proceeding (whether or not any Holder is a party
thereto) related to the entering into and/or performance of this Agreement
or the Debentures or the use of proceeds of the Debentures hereunder or
the consummation of any other transactions contemplated in this Agreement
or the Debentures (including the resale of the Debentures and the exchange
of the Debentures as contemplated by the agreement referred to in Section
3.01(e)), including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such
investigation, litigation or other proceeding, as the same are incurred
(but excluding any such losses, liabilities, claims, damages or expenses
to the extent incurred by reason of gross negligence or willful misconduct
on the part of the Person to be indemnified); and
(iv) if the indemnification provided for in Section 9.04(iii) is
unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses (or
actions in respect thereof) referred to therein, then the Company shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and
the Holders on the other from the consummation of the transactions
contemplated in this Agreement and the Original Debenture Purchase
Agreement. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the
one hand and the Holders on the other in connection with the actions which
resulted in such losses, liabilities, claims, damages or expenses (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and the Holders on the other hand shall be deemed to be in the same
proportion as the total net proceeds from the
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Debentures (before deducting expenses) received by the Company (as
successor in interest to RCPI) bear to the net fees paid in accordance
with this Agreement and the Original Debenture Purchase Agreement and
retained by the indemnified Holders. The relative fault shall be
determined by reference to, among other things, whether the action of the
Company on the one hand or the Holders on the other and the parties
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Holders
agree that it would not be just and equitable if contributions pursuant to
this subsection (iv) were determined by any method of allocation which
does not take account of the equitable considerations referred to above in
this subsection (iv). The amounts paid or payable by an indemnified party
as a result of the losses, liabilities, claims, damages or expenses (or
actions in respect thereof) referred to above in this subsection (iv)
shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending
any such action or claim, as the same are incurred. The Company's and the
Holders' obligations in this subsection (iv) to contribute are several and
not joint.
Neither Whitehall nor any of its directors, officers, agents or employees shall
be liable to the Company for any action taken or omitted to be taken by it or
any of them under or in connection with this Agreement or the Debentures, except
for gross negligence or willful misconduct attributable to such Person.
9.05. Amendments, Waivers and Consents. Any provision of this
Agreement or the Debentures may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Company and the Required
Holders; provided, that no such amendment, waiver or modification shall, unless
signed by all the Holders (i) subject any Holder to any additional obligation,
(ii) reduce the principal of, or premium, if any, or rate of interest on any
Debenture or any fees hereunder, (iii) postpone the date fixed for any payment
of principal of, or premium, if any, or interest on any Debenture or any fees
hereunder, (iv) change the percentage of the aggregate unpaid principal amount
of the Debentures, or the number of Holders which shall be required for the
Holders or any of them to take any action under this Section 9.05 or any other
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provision of this Agreement or (v) amend or waive the provisions of this Section
9.05.
9.06. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall constitute one and the same instrument. It shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart.
9.07. Headings. The headings of the sections and subsections hereof
are provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
9.08. Survival of Indemnities. All indemnities set forth herein,
including, without limitation, in Section 9.04, shall survive the execution and
delivery of this Agreement, the issuance of the Debentures, and the payment of
principal of the Debentures and other obligations hereunder.
9.09. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. Nothing herein shall affect the right of any
Holder to commence legal proceedings or to otherwise proceed against the Company
in any other jurisdiction.
(b) The Company hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or the
Debentures brought in the courts referred to in subsection (a) hereof and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in
an inconvenient forum.
(c) THE COMPANY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
THEREBY.
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9.10. Severability. If any provision of this Agreement is determined
to be illegal, invalid or unenforceable, such provision shall be fully severable
and the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
9.11. Entirety. This Agreement together with the other Loan
Documents represents the entire agreement of the parties hereto and thereto, and
supersedes all prior agreements and understandings, oral or written, if any,
relating to the Loan Documents or the transactions contemplated herein.
9.12. Survival of Representations and Warranties. All
representations and warranties made by the Company herein shall survive issuance
and delivery of the Debentures hereunder.
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IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
RCPI TRUST
By: /s/ Geoffrey P. Wharton
--------------------------------
Name: Geoffrey P. Wharton
Title: Vice President
WHRC REAL ESTATE LIMITED
PARTNERSHIP
By: WHRC Gen-Par, Inc.,
--------------------------------
its General Partner
By: /s/ Ralph F. Rosenberg
--------------------------------
Name: Ralph F. Rosenberg
Title: Vice President
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EXHIBIT A
Debenture
[Form of Face of Debenture.]
..............
No. ......... $ ........
RCPI Trust, a business trust duly organized and existing under the
laws of Delaware (herein called the "Company", which term includes any successor
Person under the Debenture Purchase Agreement hereinafter referred to), for
value received, hereby promises to pay to
......................................, or registered assigns, the principal sum
of ...................................... Dollars on Decem ber 31, 2007. This
Debenture shall bear interest on the unpaid principal amount hereof from the
date hereof or from the most recent Interest Payment Date to which interest has
been paid at the rate of 14% per annum until the principal hereof is paid. Such
interest shall be paid semi-annually on June 2 and December 2 in each year,
commencing June 2, 1995, except as otherwise provided in Section 2.03(b) of the
Debenture Purchase Agreement. Notwithstanding the foregoing, upon the occurrence
and during the continuance of an Event of Default, the rate of interest borne by
this Debenture shall be 16% per annum, compounded semi-annually. The interest
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in such Indenture, be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be the May 15
or November 15 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any
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securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture.
Payment of the principal of (and premium, if any) and any such
interest on this Security will be made at the office or agency of the Company
maintained for that purpose in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts provided, however, that at the option of the Company payment of
interest may be made by check drawn on a member of the New York Clearing House
Association mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated:
RCPI Trust
By...................................................
Attest:
.........................................
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[Form of Reverse of Security]
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued under an
Amended and Restated Debenture Purchase Agreement, dated as of July __, 1996
(herein called the "Debenture Purchase Agreement"), between the Company and WHRC
Real Estate Limited Partnership, a Delaware limited partnership and reference is
hereby made to the Debenture Purchase Agreement for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, issued and delivered.
The Securities of this series are subject to redemption upon not
less than 30 days' notice by mail, at any time on or after December 30, 2000, as
a whole or in part, at the election of the Company, at the following redemption
prices (expressed as percentages of the principal amount): If redeemed from
December 30, 2000 through December 31, 2001, inclusive, 105%; from January 1,
2002 through December 31, 2002, inclusive 103%; from January 1, 2003 through
December 31, 2003, inclusive, 101.5%; and thereafter at a price equal to 100%,
together in the case of any such redemption with accrued interest to the
Redemption Date. The Securities are also subject to mandatory redemption as
provided in the Debenture Purchase Agreement.
The Debenture Purchase Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities under
the Debenture Purchase Agreement at any time by the Company with the consent of
the Required Holders (as defined in the Debenture Purchase Agreement). The
Debenture Purchase Agreement also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Debenture Purchase Agreement. Any such consent or
waiver by any Holder shall be conclusive and binding upon such Holder and upon
all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Debenture Purchase Agreement and no
provision of this Security or of the
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Debenture Purchase Agreement shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, premium
(if any) and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Debenture Purchase Agreement and subject to
certain limitations therein set forth, the transfer of this Security is
registrable in the Security Register, upon surrender of this Security for
registration of transfer at the office or agency of the Company in any place
where the principal of interest on this Security are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Securities of this series and of like tenor, of authorized denominations and for
the same aggregate principal amount, will be issued to the designated transferee
or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Debenture Purchase Agreement and subject to certain limitations
therein set forth, Securities are exchangeable for a like aggregate principal
amount of Securities of a different authorized denomination, as requested by the
Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company and any agent of the Company may treat the Person in whose
name this Security is registered as the owner hereof for all purposes, whether
or not this Security be overdue, and neither the Company nor any such agent
shall be affected by notice to the contrary.
By accepting this Debenture the Holder agrees to be bound by the
terms and provisions of any Intercreditor Agreement as if such Holder were a
party thereto.
All terms used in this Security which are defined in the Debenture
Purchase Agreement shall have the meanings assigned to them in the Debenture
Purchase Agreement.
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EXHIBIT B
Officer's Certificate
I, ___________________, the _____________ of RCPI Trust (the
"Company"), hereby certify that, to the best of my knowledge, with respect to
that certain Amended and Restated Debenture Purchase Agreement between the
Company and WHRC Real Estate Limited Partnership, dated as of July __, 1996, as
of the date hereof no Default or Event of Default has occurred and is
continuing.
This the __th day of _________, 19__.
_________________________
[ ]
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EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of July __, 1996, by and
between RCPI Trust, a Delaware business trust (the "Company"), and WHRC Real
Estate Limited Partnership, a Delaware limited partnership ("Whitehall").
RECITALS
WHEREAS, the Company and Whitehall have entered into an Amended and
Restated Debenture Purchase Agreement (the "Debenture Purchase Agreement"),
dated as of July __, 1996, relating to the Company's Debentures (the
"Debentures", which term shall include any security issued by the Company
pursuant to that certain Agreement, dated July __, 1996, between the Company and
Whitehall, a form of which is attached as Exhibit F to the Debenture Purchase
Agreement, which agreement, by its terms, applies only to the parties named
therein and any Future Beneficiary (as defined therein)) in the aggregate
principal amount of $75 million.
WHEREAS, this Agreement is being entered into as a condition to
entering into the Debenture Purchase Agreement to facilitate the resale by
Whitehall and its successors and assigns of the Debentures;
NOW, THEREFORE, in consideration of the premises, and of the mutual
covenants, representations, warranties and agreements herein contained, the
parties hereto agree as follows:
1. Certain Definitions.
1.1. As used in this Agreement, the following terms shall have the
following respective meanings:
(a) "Business Day" means any day that is not a day on which banking
institutions are authorized or required to be closed in the State of New York or
the State in which the principal corporate trust office of any trustee under an
Indenture is located.
(b) "Company" has the meaning specified in the first paragraph to this
agreement.
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(c) "Company Securities" has the meaning specified in Section 2.1(g).
(d) "Cut Back Notice" has the meaning specified in Section 2.1(d).
(e) "Debenture Purchase Agreement" has the meaning specified in the
Recitals.
(f) "Debentures" has the meaning specified in the Recitals.
(g) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(h) "Holders" means the holders from time to time of the Debentures.
(i) "Piggyback Registration Rights" has the meaning specified in Section
2.2.
(k) "Prospectus" means the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering made pursuant to Section 2.1 or 2.2 of any of the
Company's debt securities covered by such Registration Statement and by all
other amendments and supplements to such prospectus, including post-effective
amendments and all material incorporated by reference in such prospectus.
(l) "Registered Securities" has the meaning specified in Section 3.1.
(m) "Registration Demand" has the meaning specified in Section 2.1.
(n) "Registration Statement" means any registration statement of the
Company pursuant to Section 2.1 or 2.2 filed under the Securities Act that
covers any of the Company's debt securities, including the Prospectus, any
amendments and supplements to such Registration Statement, including
post-effective amendments, and all exhibits and all materials incorporated by
reference in such registration statement.
(o) "Representative" has the meaning specified in Section 3.8.
(p) "SEC" means the Securities and Exchange Commission.
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(q) "Securities Act" means the Securities Act of 1933, as amended.
(r) "Shelf Registration" has the meaning specified in Section 2.1(c)(i).
(s) "Shelf Registration Statement" has the meaning specified in Section
2.1(c)(i).
(t) "Takedown" has the meaning specified in Section 2.1(c)(ii).
2. Registration Rights.
2.1. Demand Registration. (a) The Holders of (i) at least
$30,000,000 aggregate principal amount of Debentures then outstanding shall have
the right to request in writing that the Company effect a registration of such
Holders' Debentures pursuant to the provisions of this Section 2.1 or (ii) at
least $20,000,000 aggregate principal amount of Debentures then outstanding
shall have the right to request in writing that the Company effect a
registration of such Holders' Debentures pursuant to a Takedown under this
Section 2.1 (each such request, a "Registration Demand"). A Registration Demand
shall specify the principal amount of Debentures that each such Holder proposes
to sell in the offering. If no Shelf Registration Statement (as defined in
Section 2.1(c)(i) below) shall be effective as of the date of the Registration
Demand, the demanding Holders may elect to have the Company register such
Debentures in accordance with either Section 2.1(c)(i) or Section 2.1(d). If a
Shelf Registration Statement shall be effective as of the date of the
Registration Demand, then all demanding Holders shall be deemed to have elected
to register their Debentures pursuant to Section 2.1(c)(ii). The Holders of
Debentures may each make one Registration Demand pursuant to Sections 2.1(c)(i)
and 2.1(d) and two Registration Demands per year pursuant to an existing Shelf
Registration Statement pursuant to Section 2.1(c)(ii) for which the Company will
pay and bear all costs and expenses in accordance with Section 3.3 and
thereafter, the Holders may make one Registration Demand per year pursuant to
Sections 2.1(c)(i) and 2.1(d) and one Registration Demand per year pursuant to
an existing Shelf Registration Statement pursuant to Section 2.1(c)(ii) for
which such requesting Holders shall pay and bear all costs and expenses.
(b) Upon receipt of a Registration Demand (other than for a
Takedown), the Company shall give written notice thereof to all of the other
Holders of Debentures at least 30
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days prior to the initial filing of a Registration Statement relating to such
Registration Demand. Each of the other Holders of Debentures shall have the
right, within 20 days after the delivery of such notice, to request that the
Company include all or a portion of such Holder's Debentures in such
Registration Statement. Upon receipt of a Registration Demand that is a
Takedown, a Representative of such selling Holders shall give written notice
thereof to all of the Holders of Debentures at least three Business Days prior
to the initial filing of a Registration Statement relating to such Registration
Demand. Each of the other such Holders shall have the right, within one Business
Day after the delivery of such notice, to request that the Company include all
or a portion of such Holder's Debentures in such Registration Statement.
(c) (i) As promptly as practicable and in no event later than 120
days after the Company receives a Registration Demand electing to register
Debentures pursuant to this Section 2.2(c)(i), the Company shall file under the
Securities Act a "shelf" registration statement (the "Shelf Registration
Statement") providing for the registration and the sale on a continuous or
delayed basis of all of the Debentures pursuant to Rule 415 under the Securities
Act and/or any similar rule that may be adopted by the SEC (the "Shelf
Registration"); provided, that at the time the Company receives such
Registration Demand, the Company is eligible to file a Shelf Registration
Statement under the Securities Act. The Company agrees to use its best efforts
to cause the Shelf Registration Statement to become or be declared effective as
soon as practicable and to keep such Shelf Registration continuously effective
for a period ending on the occurrence of the earlier of (x) the third
anniversary of the Registration Demand and (y) notification by all of the
requesting Holders that such Holders have sold all of the Debentures owned by
them. The Company further agrees to supplement or make amendments to the Shelf
Registration Statement and the prospectus included therein (x) as may be
necessary to effect and maintain the effectiveness of such Shelf Registration
Statement for the period set forth in the previous sentence and (y) as may be
required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration or by the
Securities Act or rules and regulations thereunder for shelf registration. The
Company agrees to furnish to the Holders of the securities registered thereby
copies of any such supplement or amendment (but excluding any periodic reports
required to be filed with the SEC under the Exchange Act) so that such Holders
through the Representative(s) have a reasonable opportunity to comment thereon
prior to its being used and/or filed with the SEC.
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(ii) As promptly as practicable after the Company receives a
Registration Demand from a Holder or Holders of Debentures pursuant to which
such Holder is deemed to have elected to register Debentures pursuant to an
existing Shelf Registration Statement (a "Takedown"), the Company shall file a
Prospectus or any necessary supplement to a Prospectus with the SEC and
otherwise comply with the Securities Act and all rules, regulations and
instructions thereunder applicable to such Takedown. In the event that no
Prospectus or other filing is required nor any other action that necessitates
the Company's participation is required to effect a sale of Debentures pursuant
to an effective Shelf Registration Statement, each selling Holder agrees to
provide the Company with at least three Business Days' notice of its intention
to sell Debentures pursuant to the Shelf Registration Statement; provided,
however, that the Company shall have the right to postpone any such sale for a
reasonable period of time not to exceed 90 days if: the President of the Company
delivers a certificate to such selling Holders stating that it would be
significantly disadvantageous to the Company to proceed with such sale at such
time.
(d) As promptly as practicable and in no event later than 120 days
after the Company receives a Registration Demand electing to register Debentures
pursuant to this Section 2.1(d), the Company shall file with the SEC a
Registration Statement, on any form that shall be available and appropriate for
the sale of such Debentures in accordance with the intended method of
distribution thereof. The Company shall include in such Registration Statement
all of the Debentures of such requesting Holders that such Holders have
requested to be included therein pursuant to Sections 2.1(a) and 2.1(b);
provided, however, that, if the requested registration involves an underwritten
offering, the Debentures to be registered may be reduced if the managing
underwriter delivers a notice (a "Cutback Notice") pursuant to Section 2.1(g).
The Company shall use its best efforts to cause each such
Registration Statement to be declared effective and to keep such Registration
Statement continuously effective and usable for resale of such Debentures for a
period of 90 days from the date on which the SEC declares such Registration
Statement effective or such shorter period as is necessary to complete the
distribution of the securities registered thereunder.
(e) The Representative(s) shall determine the method of distribution
of Debentures pursuant to a Registration Demand.
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(f) If a Registration Demand involves an underwritten offering,
Goldman, Sachs & Co. shall be the managing underwriter for such offering unless
Goldman, Sachs & Co. declines such engagement, in which event, the
Representative(s) shall select the managing underwriter; provided that such
managing underwriter so selected shall be reasonably satisfactory to the
Company.
(g) In the event that the proposed offering is an underwritten
offering and includes securities to be offered for the account of the Company
(the "Company Securities"), the provisions of this Section 2.1(g) shall be
applicable if the managing underwriter delivers a Cutback Notice stating that,
in its opinion, the principal amount of Company Securities and the principal
amount of Debentures that the Holders have requested to be registered exceeds
the maximum principal amount of securities specified by the managing underwriter
in such Cutback Notice that may be distributed without adversely affecting the
price, timing or distribution of the securities being distributed. If the
managing underwriter delivers such Cutback Notice, the number of Company
Securities and Debentures requested to be registered shall be reduced in the
following order until the principal amount of securities to be registered has
been reduced to the maximum principal amount of securities specified by the
managing underwriter in the Cutback Notice: first, the Company Securities and
second, the Debentures in proportion to the respective principal amount of
Debentures that each Holder has requested to be registered.
(h) No Registration Demand relating to Debentures (other than a
Takedown) may be made until the expiration of six months following the
completion of the distribution of the securities registered under any
Registration Statement that has been filed and has become effective pursuant to
a prior Registration Demand relating to Debentures.
(i) The Company shall not be obligated to file a Registration
Statement relating to any Registration Demand (other than a Takedown) unless the
requests by the Holders for such registration cover $30,000,000 or more
aggregate principal amount of Debentures then outstanding.
2.2. Piggyback Registration Rights. (a) If the Company proposes to
file a Registration Statement with the SEC respecting an offering, whether
primary or secondary, of any debt securities of the Company other than a Demand
Registration, the Company shall give written notice to all the Holders of
Debentures at least 30 days prior to the initial filing of the Registration
Statement relating to such offering. Each Holder shall have the right, within 20
days
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after delivery of such notice, to request in writing that the Company include
all or a portion of such Holder's Debentures in such Registration Statement
("Piggyback Registration Rights").
(b) In the event that the proposed offering is an underwritten
offering covering debt securities to be offered for the account of the Company,
the provisions of this Section 2.2(b) shall be applicable if the managing
underwriter delivers a Cutback Notice stating that, in its opinion, the
aggregate principal amount of Company Securities and the principal amount of
Debentures that the Holders have requested to be registered exceeds the maximum
principal amount of securities specified by the managing underwriter in such
Cutback Notice that may be distributed without adversely affecting the price,
timing or distribution of the securities being distributed. If the managing
underwriter delivers such Cutback Notice, the principal amount of Company
Securities and Debentures requested to be registered shall be reduced in the
following order until the principal amount of securities to be offered has been
reduced to the maximum principal amount of securities specified by the managing
underwriter in the Cutback Notice: first, the Debentures in proportion to the
respective principal amount of Debentures that each Holder has requested to be
registered and second, the Company Securities.
(c) The provisions of this Section 2.2 shall not be applicable in
connection with (i) a registration statement filed by the Company pursuant to
Section 2.1 or (ii) a transaction in which a registration statement is filed by
the Company on Form S-4 or any successor forms.
2.3. Company's Ability to Postpone Registration Rights. (a) The
Company shall have the right to postpone the filing of any Registration
Statement relating to a Demand Registration for a reasonable period of time not
to exceed 90 days if: the President of the Company delivers to each Holder of a
Debenture a certificate stating that it would be significantly disadvantageous
to the Company to file such Registration Statement at such time; provided,
however, that such 90-day period shall be deducted from the six-month interval
allowed between Registration Demands pursuant to Section 2.1(h).
(b) If at any time after the Company notifies the Holders of its
intention to file a Registration Statement that would trigger Piggyback
Registration Rights, the Board of Trustees of the Company in good faith shall
determine for any reason not to effect such registration or to postpone such
registration, the Company shall (i) in the case of a
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determination not to effect such registration, be relieved of its obligation to
register any Debentures of Holders requesting inclusion in such registration,
and (ii) in the case of a determination to postpone such registration, be
permitted to postpone registering the Debentures of Holders requesting inclusion
in such registration.
(c) The Company shall as promptly as practicable notify the Holders
of any postponement pursuant to this Section 2.3, specifying the reasons
therefor.
2.4. Holder Withdrawal Rights. The Company shall withdraw from
registration any Debentures on request of a Holder thereof; provided that, in
the case of a Registration Demand under Section 2.1, a Demand Registration shall
be deemed to have been made for the purpose of the number of such Demands
permitted to be made under Section 2.1(a) if the Company shall have incurred
$25,000 in expenses relating to such Demand Registration at such time as such
Holder makes such withdrawal. The Company shall not be obligated to maintain the
effectiveness of any Registration Statement if, after any withdrawal of
Debentures by a Holder, the principal amount of Debentures remaining subject to
such Registration Statement is less than $30,000,000 aggregate principal amount
of Debentures then outstanding, unless the Company is also registering
securities on such Registration Statement for its own account.
3. Registration Procedures.
3.1. Covenants of the Company Applicable to All Registration
Statements. This Section 3.1 applies to all Registration Statements filed by the
Company and referred to in Section 2.1 or 2.2. The securities covered by each
such Registration Statement are referred to as the "Registered Securities". Each
underwriter, agent, selling broker, dealer manager or similar securities
industry professional participating in any offering of the Registered Securities
is referred to as an "underwriter" or "agent" and any agreement entered into
with an underwriter or agent is referred to as an "underwriting or agency
agreement". In connection with each such registration, the Company covenants
with each Holder of Debentures participating in such offering (each, a "selling
holder") and each underwriter or agent participating therein as follows:
(a) The Company will notify the selling holders and the managing
underwriter or agent, immediately, and confirm the notice in writing, (i)
when the Registration
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Statement, or any post-effective amendment to the Registration Statement,
shall have become effective, or any supplement to the Prospectus or any
amended Prospectus shall have been filed, (ii) of the receipt of any
comments from the SEC, (iii) of any request by the SEC to amend the
Registration Statement or amend or supplement the Prospectus or for
additional information, (iv) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Registered Securities for offering
or sale in any jurisdiction, or of the institution or threatening of any
proceedings for any of such purposes, (v) if at any time when a prospectus
is required by the Securities Act to be delivered in connection with sales
of the Registered Securities the representations and warranties of the
Company contemplated by Section 3.1(i) cease to be true and correct and
(vi) of the existence of any fact that results or may result in the
Registration Statement, the Prospectus or any document incorporated
therein by reference containing an untrue statement of material fact or
omitting to state a material fact required to be stated therein or
necessary to make any statement therein not misleading.
(b) The Company will use every reasonable effort to prevent the
issuance of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus and, if any such order is issued, to obtain the
lifting thereof at the earliest possible moment.
(c) The Company will afford the Representative(s) and the managing
underwriters a reasonable opportunity to comment prior to its being filed
with the SEC any Registration Statement, any amendment thereto, or any
amendment of or supplement to the Prospectus (including amendments of the
documents incorporated by reference into the Prospectus but excluding any
periodic reports required to be filed with the SEC pursuant to the
Exchange Act).
(d) The Company will furnish to each selling holder and to the
managing underwriter or agent, without charge, as many signed copies of
the Registration Statement (as originally filed) and of all amendments
thereto, whether filed before or after the Registration Statement becomes
effective, copies of all exhibits and documents filed
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therewith, including documents incorporated by reference into the
Prospectus, and signed copies of all consents and certificates of experts,
as such selling holder or the managing underwriter or agent may reasonably
request, and will furnish to the managing underwriter, for each other
underwriter participating in an underwritten offering, one conformed copy
of the Registration Statement as originally filed and of each amendment
thereto (including documents incorporated by reference into the Prospectus
but without exhibits).
(e) The Company will deliver to each selling holder and each
underwriter or agent participating in such offering, without charge, as
many copies of each preliminary prospectus as such selling holder or such
underwriter or agent may reasonably request, and the Company hereby
consents to the use of such copies for purposes permitted by the
Securities Act. The Company will deliver to each selling holder and each
underwriter or agent participating in such offering, without charge, from
time to time during the period when the Prospectus is required to be
delivered under the Securities Act, such number of copies of the
Prospectus (as supplemented or amended) as such selling holder or such
underwriter or agent may reasonably request.
(f) The Company will comply to the best of its ability with the
Securities Act and the rules and regulations of the SEC thereunder, and
the Exchange Act and the rules and regulations of the SEC thereunder so as
to permit the completion of the distribution of the Registered Securities
in accordance with the intended method or methods of distribution
contemplated in the Prospectus. If at any time when a prospectus is
required by the Securities Act to be delivered in connection with sales of
the Registered Securities any event shall occur or condition exist as a
result of which it is necessary, in the opinion of counsel for the selling
holders, counsel for the underwriters or agents or counsel for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if
it shall be necessary, in the opinion any of such counsel, at any such
time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the Securities Act
or the rules and regulations of the
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SEC thereunder, the Company will promptly prepare and file with the SEC,
subject to Section 3.1(c), such amendment or supplement as may be
necessary to correct such untrue statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements.
(g) The Company will use its best efforts, in cooperation with the
selling holders or the underwriters or agents, as the case may be, to
qualify the Registered Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions as the
selling holders or the managing underwriter or agents, as the case may be,
may designate; provided, however, that the Company shall not be obligated
to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in
which it is not so qualified or to subject itself to taxation in respect
of doing business in any jurisdiction in which it is not otherwise so
subject. The Company will file such statements and reports as may be
required by the laws of each jurisdiction in which the Registered
Securities have been qualified as above provided.
(h) The Company will use its best efforts to effect the listing of
the Registered Securities covered by a Registration Statement not then
listed on each national securities exchange on which similar securities
issued by the Company are then listed or, if no such securities are then
listed, on any national securities exchange if, in either case, so
requested by Whitehall with respect to the Debentures for so long as it is
a holder of Debentures, or if requested by the managing underwriter.
(i) The Company shall make such representations and warranties to
the selling holders and the underwriters or agents, if any, in form,
substance and scope as are customarily made by issuers to underwriters in
underwritten public offerings.
(j) On the effective date of the Registration Statement or, in the
case of an underwritten offering, on the date of delivery of the
Registered Securities sold pursuant thereto, the Company shall cause to be
delivered to the selling holders and the underwriters or agents, if any,
opinions of counsel for the Company with respect to, among other things,
the due incorporation and good standing of the Company; the qualification
of the Company to transact business as foreign corporation; the due
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authorization, execution and delivery of this Agreement; the due
authorization, execution, authentication and issuance, and the validity
and enforceability, of the Debentures; the absence of material legal or
governmental proceedings involving the Company; the absence of a breach by
the Company of, or a default under, agreements binding the Company; the
absence of governmental approvals required to be obtained in connection
with the registration, offering and sale of the Debentures; the compliance
as to form of the Registration Statement and any documents incorporated by
reference therein with the requirements of the Securities Act; the
effectiveness of such Registration Statement under the Securities Act; and
a statement that, as of the date of the opinion and of the Registration
Statement or most recent post-effective amendment thereto, as the case may
be, nothing has come to the attention of such counsel which causes them to
believe that either the Registration Statement or the Prospectus included
therein, as then amended or supplemented, or the documents incorporate by
reference therein (in the case of such documents, in the light of the
circumstances existing at the time that such documents were filed with the
Commission under the Exchange Act), contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein not misleading (it being understood that such counsel
need express no opinion as to the financial statements and other financial
data included therein or omitted therefrom).
In the event that any broker-dealer registered under the Exchange
Act shall be an "affiliate" of, or shall have a "conflict of interest"
with, the Company (each such term as defined in Schedule E to the By-Laws
of the National Association of Securities Dealers ("NASD")), and such
broker-dealer shall underwrite debt securities of the Company or
participate as a member of an underwriting syndicate or selling group or
otherwise "assist in the distribution" (within the meaning of the Rules of
Fair Practice and the By-Laws of the NASD) thereof, whether as a holder of
such debt securities of the Company or as an underwriter, a placement or
sales agent or a broker or dealer in respect of such debt securities or
otherwise, the Company shall assist such broker-dealer, in complying with
the requirements of such Rules and By-Laws, including, without limitation,
by (1) if such Rules or By-Laws, including Schedule E thereto, shall so
require, engaging a "qualified independent underwriter" (as defined in
such Schedule) to participate in the preparation of the registration
statement relating
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to such debt securities to exercise usual standards of due diligence in
respect thereto and, if any portion of the offering contemplated by the
Registration Statement is an underwritten offering or is made through a
placement or sales agent, to recommend the maximum public offering price
of such debt securities, (2) paying the fees and expenses of any such
qualified independent underwriter and indemnifying the qualified
independent underwriter to the extent of the indemnification of
underwriters provided in Section 3.4 hereof, and (3) providing to such
broker-dealer such information concerning the Company and its affiliates,
officers, directors, employees and securityholders as may be required in
order for such broker-dealer to comply with the requirements of Schedule E
to the NASD Bylaws and Section 44 of the Rules of Fair Practice.
(k) Immediately prior to the effectiveness of the Registration
Statement or, in the case of an underwritten offering, at the time of
delivery of any Registered Securities sold pursuant thereto, the Company
shall cause to be delivered to the selling holders and the underwriters or
agents, if any, letters from the Company's independent public accountants
stating that such accountants are independent public accountants with
respect to the Company within the meaning of the Securities Act and the
applicable published rules and regulations of the SEC thereunder, and
otherwise in customary form and covering such financial and accounting
matters as are customarily covered by letters of the independent public
accountants delivered in connection with primary underwritten public
offerings.
(l) If the managing underwriter or agent so requests, the
underwriting or agency agreement shall set forth in full the provisions
hereof relating to covenants, registration expenses, lock-up agreements,
indemnification and contribution contained in Sections 3.1, 3.2, 3.3, 3.4,
3.5, 3.8 and 3.9, with such changes therein as may be agreed to by the
managing underwriter or agent, the Company and the selling holders.
(m) The Company shall deliver such documents and certificates as may
be reasonably requested by any selling holder or the underwriters or
agents, if any, to evidence compliance with Section 3.1(i) and with any
customary conditions contained in the underwriting or agency agreement, if
any.
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(n) The Company will make available for inspection by
representatives of the selling holders and the underwriters or agents
participating in such offering, any attorney or accountant retained by
such selling holders or underwriters or agents and, with respect to any
private placement of Debentures upon notice to the Company, prospective
purchasers, all financial and other records, pertinent corporate documents
and properties of the Company, and cause the Company's officers, directors
and employees to supply all information reasonably requested by any such
representative, underwriter or agent, attorney or accountant in connection
with the preparation of the Registration Statement; provided, however,
that any records, information or documents that are designated by the
Company in writing as confidential shall be kept confidential by each such
person (by, among other things, if so requested by the Company, entering
into a confidentiality agreement in form and substance satisfactory to the
Company) unless such records, information or documents become part of the
public domain through no fault of such person or unless disclosure thereof
is required by court or administrative order or the SEC (including the
federal securities law).
(o) The Company will make generally available to its security
holders as soon as practicable, but not later than 45 days after the close
of the period covered thereby (or 90 days if such period is a fiscal
year), an earnings statement of the Company (in form complying with the
provisions of Rule 158 under the rules and regulations of the SEC under
the Securities Act), covering a period of 12 months beginning after the
effective date of the Registration Statement but not later than the first
day of the Company's fiscal quarter next following such effective date.
(p) The Company will enter into such customary agreements, including
a customary underwriting or agency agreement with the underwriters or
agents, if any, and take all such other actions in connection with the
offering in order to expedite or facilitate the disposition of the
Registered Securities.
(q) (i) Prior to or at the time the Registration Statement becomes
effective, the Company will prepare and qualify a trust indenture relating
to the Debentures (an "Indenture"), under the Trust Indenture Act of 1939.
In the event that any modification or amendment to such Indenture is
required by such Act or the rules and regulations thereunder or by the
staff of the SEC in
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order so to qualify the Indenture, the Company shall without delay solicit
consents of holders (as defined in such Indenture) in the manner and with
the effect provided by such Indenture, pursuant to which such holders
shall be asked to consent to such modifications or amendments, but only
such modifications or amendments, as shall be so required. In connection
with any such solicitation, the Company shall recommend that Holders of
Debentures consent to such modifications or amendments. Notwithstanding
the foregoing, in the event that such modifications or amendments may be
effected without the consent of such Holders pursuant to the applicable
provisions of the Indenture, the Company shall use its best efforts to
effect such modifications or amendments without such consent.
(ii) In the event that any such amendment or modification involves
the appointment of a new trustee under the Indenture, the Company shall
appoint a new trustee thereunder pursuant to the applicable provisions of
the Indenture.
3.2. Covenants of the Selling Holders. (a) Each selling holder shall
use its best efforts to furnish to the Company such information regarding the
distribution of such Registered Securities as is customarily requested from
selling holders in underwritten public offerings.
(b) Each selling holder agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
3.1(a)(vi), such selling holder will forthwith discontinue the disposition of
its Registered Securities pursuant to the Registration Statement until such
selling holder's receipt of the copies of a supplemented or amended Prospectus
contemplated by Section 3.1(f) and return of all copies of the old prospectus in
the possession of such selling holder, or until it is advised in writing by the
Company that the use of such Prospectus may be resumed. If the Company shall
give any such notice, the Company shall extend the period of time during which
the Company is required to keep the Registration Statement effective and usable
by the number of days during the period from the date of receipt of such notice
to the date when each selling holder of Registered Securities covered by such
Registration Statement either receives the copies of a supplemented or amended
Prospectus contemplated by Section 3.1(f) or is advised in writing by the
Company that the use of such Prospectus may be resumed.
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(c) Each selling holder agrees to make customary representations and
warranties to the Company and the underwriters or agents, if any, in form,
substance and scope as are customarily made by selling holders in underwritten
public offerings, but no selling holders, as such, shall be required to make any
representation or warranty as to the accuracy or completeness of the
Registration Statement (except as to written information furnished to the
Company by such selling holder expressly for use therein).
(d) Each selling holder agrees to provide the Company, upon receipt
of its request, with such information about the selling holder to enable the
Company to comply with the requirements of the Securities Act and to execute
such certificates as the Company may reasonably request in connection with such
information and otherwise to satisfy any requirements of law.
3.3. Registration Expenses. (a) Except as otherwise provided in
Section 2.1, the Company will pay and bear all costs and expenses incident to
the performance of its obligations under this Agreement with respect to each
registration pursuant to Section 2.1 or 2.2, including, without limitation:
(i) the preparation, printing and filing of the Registration
Statement (including financial statements and exhibits), as originally
filed and as amended, any preliminary prospectuses and the Prospectus and
any amendments or supplements thereto, and the cost of furnishing such
copies thereof to the selling holders or the underwriters or agents as
they may reasonably request, as the case may be;
(ii) the preparation, printing and distribution of any underwriting
or agency agreement, certificates representing the Registered Securities,
any Blue Sky Survey and other documents relating to the performance of and
compliance with this Agreement;
(iii) the fees and disbursements of the Company's counsel and
accountants and the reasonable fees and disbursements of one counsel
retained by the selling holders pursuant to Section 3.3(b);
(iv) the fees and disbursements of the underwriters or agents
customarily paid by issuers or sellers of securities and the reasonable
fees and expenses of any special experts retained in connection with the
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Registration Statement, but excluding underwriting discounts and
commissions and transfer taxes, if any;
(v) the qualification of the Registered Securities under applicable
securities laws in accordance with Section 3.1(g) and any filing for
review of the offering with the NASD, including filing fees and fees and
disbursements of counsel for the selling holders and the underwriters or
agents, as the case may be, in connection therewith, in connection with
any Blue Sky Survey; and
(vi) all fees and expenses incurred in connection with the listing,
if any, of any of the Registered Securities on any securities exchange
pursuant to Section 3.1(h).
(b) In connection with the filing of each Registration Statement,
the Company will reimburse the selling holders for the reasonable fees and
disbursements of one firm of legal counsel, which shall be chosen by the
Representative(s) and shall be reasonably satisfactory to the Company.
(c) Each selling holder will pay and bear all costs and expenses
incident to the delivery of the Registered Securities to be sold by it,
including any transfer taxes payable upon the sale of such Registered Securities
to the purchaser thereof and any underwriting discounts or commissions payable
to underwriters or agents in connection therewith.
3.4. Indemnification. (a) In connection with each registration
pursuant to Section 2.1 or 2.2, the Company agrees to indemnify and hold
harmless each selling holder, each underwriter or agent participating in such
offering, and each person, if any, who controls any selling holder or any such
underwriter or agent within the meaning of Section 15 of the Securities Act as
follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of an untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of an untrue
statement of a material fact included in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) or the omission or
alleged omission
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therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company, which shall not be unreasonably
withheld; and
(iii) against any and all expense whatsoever, as incurred (including
fees and disbursements of counsel chosen by the selling holders and by the
underwriters or agents), reasonably incurred in investigating, preparing
or defending against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under subparagraph (i) or (ii) above;
provided, however, that, with respect to any selling holder or any underwriter
or agent, this indemnity does not apply to any loss, liability, claim, damage or
expense to the extent (i) arising out of an untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by any such selling holder or
underwriter or agent, respectively, expressly for use in the Registration
Statement (or any amendment thereto), or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) or (ii) with respect to any
preliminary prospectus, resulting from the fact that such selling holder or
underwriter or agent sold Debentures to a person as to whom it shall be
established that there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus or of the Prospectus as then
amended or supplemented, in any case where such delivery is required by the
Securities Act, if the Company had previously furnished copies thereof in
sufficient quantity to such selling holder or underwriter or agent and the loss,
liability, claim, damage or expense of such selling holder or underwriter or
agent resulted from an untrue statement or omission of a material fact contained
in a preliminary prospectus or Prospectus which was identified in writing at
such time to such selling holder or underwriter or
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agent and corrected in the Prospectus or the Prospectus as then amended or
supplemented.
(b) Each selling holder agrees severally, and not jointly, to
indemnify and hold harmless the Company, its directors, each of its officers who
signed a Registration Statement, each underwriter or agent participating in such
offering and the other selling holders, and each person, if any, who controls
the Company, any such underwriter or agent and any other selling holder within
the meaning of Section 15 of the Securities Act, against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
Section 3.4(a), as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such selling
holder expressly for use in the Registration Statement (or any amendment
thereto), or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
(c) The obligations of the Company under Section 3.4(a) and of the
selling holders under Section 3.4(b) to indemnify any underwriter or agent who
participates in an offering (or any person, if any, controlling such underwriter
or agent within the meaning of Section 15 of the Securities Act) shall be
conditioned upon the underwriting or agency agreement with such underwriter or
agent containing an agreement by such underwriter or agent to indemnify and hold
harmless the Company, its directors, each of its officers who signed a
Registration Statement, and each selling holder, and each person, if any, who
controls the Company or any such selling holder within the meaning of Section 15
of the Securities Act, against any and all loss, liability, claim, damage and
expense described in the indemnity contained in Section 3.4(a), as incurred, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment
thereto), or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such underwriter or agent expressly for use in the
Registration Statement (or any amendment thereto), or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(d) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it
C-19
<PAGE>
in respect of which indemnity may be sought hereunder, but failure to so notify
an indemnifying party shall not relieve the indemnifying party from any
liability it may have under this Agreement, except to the extent that the
indemnifying party is materially prejudiced thereby. If it so elects, after
receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it (which counsel shall be reasonably satisfactory
to the indemnified party), provided that the indemnified party shall be entitled
to participate in the defense of such action with counsel chosen by it, the fees
and expenses of which, subject to the next sentence, shall be paid by the
indemnified party. In no event shall the indemnifying party or parties be liable
for the fees and expenses of more than one counsel for (i) the Company, its
officer, directors and controlling persons as a group, (ii) the selling holders
and their controlling persons as a group and (iii) the underwriters or agents
and their controlling persons as a group, in each case, in connection with any
one action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
3.5. Contribution. (a) In order to provide for just and equitable
contribution in circumstances under which the indemnity provided for in this
Section 3 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company, the selling
holders and the underwriters or agents shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity incurred by the Company, the selling holders and one or more of the
underwriters or agents, as incurred, in such proportions that (i) the
underwriters or agents are responsible for that portion represented by the
percentage that the underwriting discounts and commissions for the offering
appearing on the cover page of the Prospectus (or, if not set forth on the cover
page, that are applicable to the offering) bear to the initial public offering
price appearing on the cover page (or, if not set forth on the cover page, that
are applicable to the offering) and (ii) each of the selling holders and the
Company is responsible for that proportion of the balance which is appropriate
to reflect the relative fault of the Company and the selling holders, as well as
any other relevant equitable considerations. The relative fault of the Company,
on the one hand, and the selling holders, on the other hand, shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information
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<PAGE>
supplied by the Company or the selling holders and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(b) No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 3.5, each person, if any, who
controls an underwriter or agent within the meaning of Section 15 of the
Securities Act shall have the same rights to contribution as such underwriter or
agent, and each director of the Company, each officer of the Company who signed
a Registration Statement, and each person, if any, who controls the Company or a
selling holder within the meaning of Section 15 of the Securities Act shall have
the same rights to contribution as the Company or such selling holder, as the
case may be.
3.6. Representations, Warranties and Indemnities to Survive. The
indemnity and contribution agreements contained in this Section 3 and the
representations and warranties of the Company referred to in Section 3.1(i)
shall remain operative and in full force and effect regardless of (i) any
termination of any underwriting or agency agreement, (ii) any investigation made
by or on behalf of the selling holders, the Company or any underwriter or agent
or controlling person or (iii) the consummation of the sale or successive
resales of the Registered Securities.
3.7. Rule 144. The Company covenants that it will continue to file
the reports required to be filed by it under the Exchange Act and the rules and
regulations of the SEC thereunder and it will take such further action as any
Holder of Debentures may reasonably request, all to the extent required from
time to time to enable such Holder to sell Debentures without registration under
the Securities Act within the limitation of the exemptions provided by Rule 144
under the Securities Act, as such Rule may be amended from time to time. Upon
the request of any Holder of Debentures, the Company will deliver to such Holder
a written statement as to whether it has complied with such requirements.
3.8. Participation in Underwritten Offerings. No Holder of
Debentures may participate in any underwritten offering hereunder unless:
(a) Such Holder executes a power of attorney appointing one or more
(up to three) attorneys (each, a "Representative") designated by the
selling holders
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<PAGE>
proposing to sell a majority of the Debentures proposed to be sold by all
selling holders. Each such Representative shall be authorized, on
customary terms, to execute the underwriting agreement on behalf of each
selling holder and to otherwise act for the selling holders in connection
with the offering.
(b) Such Holder directly through its Representative enters into an
underwriting agreement with the Company, the other selling holders, any
selling securityholders and the underwriters, which underwriting agreement
shall comply with the provisions of this Section 3.
(c) Such Holder executes all questionnaires and other documents
required by the underwriting agreement to be executed by such Holder.
3.9. Lock-Up Agreements. (a) The Company agrees that it will not,
directly or indirectly, sell, offer to sell, grant any option for the sale of,
or otherwise dispose of, any debt securities of the Company, in the case of any
registration pursuant to Section 2.1, for a period of 90 days from the effective
date of any Registration Statement.
(b) Each Holder whose Debentures are covered by a Registration
Statement filed pursuant to Section 2.1 or 2.2 agrees that it will not, directly
or indirectly, sell, offer to sell, grant any option for the sale of, or
otherwise dispose of, any debt securities of the Company (except such Debentures
covered by such Registration Statement) for a period of 180 days from the
effective date of any Registration Statement.
(c) The lock-up agreements set forth in Sections 3.9(a) and 3.9(b)
shall be subject to customary exceptions that may be contained in an
underwriting agreement if any such registration involves an underwritten
offering.
4. Miscellaneous.
4.1. No Inconsistent Agreements. The Company covenants and agrees
that it shall not grant registration rights with respect to Registrable
Securities or any other securities which would be inconsistent with the terms
con tained in this Agreement.
4.2. Specific Performance. The parties hereto acknowledge that there
may be no adequate remedy at law if any party fails to perform any of its
obligations hereunder and
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<PAGE>
that each party may be irreparably harmed by any such failure, and accordingly
agree that each party, in addition to any other remedy to which it may be
entitled at law or in equity, shall be entitled to compel specific performance
of the obligations of any other party under this Agreement in accordance with
the terms and conditions of this Agreement, in any court of the United States or
any State thereof having jurisdiction.
4.3. Notices. All notices, requests, claims, demands, waivers and
other communications hereunder shall be in writing and shall be deemed to have
been duly given when delivered by hand, if delivered personally or by courier,
or three days after being deposited in the mail (registered or certified mail,
postage prepaid, return receipt requested) as follows: If to the Company, to it
at c/o Tishman Speyer Properties, L.P., 520 Madison Avenue, New York, New York
10022, Attention: Jerry I. Speyer; if to Whitehall, to it at 85 Broad Street,
New York, New York 10004; and if to a Holder, to the address of such Holder set
forth in the security register or other records of the Company, or to such other
address as any party may have furnished to the others in writing in accordance
herewith, except that notices of change of address shall be effective only upon
receipt.
4.4. Parties in Interest. All the terms and provisions of this
Agreement shall be binding upon, shall inure to the benefit of and shall be
enforceable by the respective successors and assigns of the parties hereto. In
the event that any transferee of any Holder of Debentures shall acquire
Debentures, in any manner, whether by gift, bequest, purchase, operation of law
or otherwise, such transferee shall, without any further writing or action of
any kind, be deemed a party hereto for all purposes and such Debentures shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Debentures such transferee shall be entitled to receive the benefits of and
be conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement. If the Company shall so request, any
such successor, assign or transferee shall agree in writing to acquire and hold
the Debentures subject to all of the terms hereof.
4.5. Survival. The respective indemnities, agreements,
representations, warranties and each other provision set forth in this Agreement
or made pursuant hereto shall remain in full force and effect regardless of any
investigation (or statement as to the results thereof) made by or on behalf of
any Holder of Debentures, any director, officer or partner of such Holder, any
agent or underwriter or
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<PAGE>
any director, officer or partner thereof, or any controlling person of any of
the foregoing, and shall survive delivery of and payment for the Debentures
pursuant to the Debenture Purchase Agreement and the transfer and registration
of Debentures by such Holder.
4.6. LAW GOVERNING. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
4.7. Headings. The descriptive headings of the several Sections and
paragraphs of this Agreement are inserted for convenience only, do not
constitute a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.
4.8. Amendments. This Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) only by a written instrument
duly executed by the Company and the Holders of at least 75 percent in aggregate
principal amount of the Debentures at the time outstanding. Each Holder of any
Debentures at the time or thereafter outstanding shall be bound by any amendment
or waiver effected pursuant to this Section 4.8, whether or not any notice,
writing or marking indicating such amendment or waiver appears on such
Debentures or is delivered to such Holder.
4.9. Inspection. For so long as this Agreement shall be in effect,
this Agreement and a complete list of the names and addresses of all the Holders
of Debentures shall be made available for inspection and copying on any business
day, on reasonable notice, by any holder of Debentures at the offices of the
Company at the address thereof set forth in Section 4.3.
4.10. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be duly executed as of the date first written above.
RCPI TRUST
By:________________________________
Name:
Title:
WHRC REAL ESTATE LIMITED PARTNERSHIP
By: WHRC Gen-Par, Inc.,
its General Partner
By:_________________________________
Name:
Title:
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<PAGE>
EXHIBIT D
The Real Estate
(By New York City Block and Lot Numbers)
Parcel A-1: Block 1265, Lots 1002-1005, 1023, 1024, 1028, 1031-1049,
1054, 1058-1070, 1073, 1074, 1076, 1077, 1080, 1081, 1092 and
1093
(at 30 Rockefeller Plaza and 1250 Avenue of
the Americas)
Parcel A-2: Block 1265, Lot 50
(610 Fifth Avenue and 620 Fifth Avenue)
Parcel A-3: Block 1265 Lot 40
(No street address)
Parcel A-4: Block 1265 Lot 8040
(No street address)
Parcel B: Block 1266 Lot 1
(1270 Avenue of the Americas, 50 Rockefeller
Plaza and 630 Fifth Avenue)
Parcel C: Block 1264 Lot 5
(1230 Avenue of the Americas, 10 Rockefeller
Plaza and 1 Rockefeller Plaza)
Parcel D: Block 1265 Lot 71
(1256 Avenue of the Americas)
Parcel E-1: Block 1264 Part of Lot 30
(600 Fifth Avenue)
Parcel E-2: Block 1264 Part of Lot 30
(600 Fifth Avenue)
Parcel E-3: Block 1264 Part of Lot 30
(600 Fifth Avenue)
Parcel F: Block 1257 Lot 22
D-1
<PAGE>
EXHIBIT E
INTERCREDITOR AGREEMENT
This Intercreditor Agreement is made as of _______________, 199_
(this "Agreement"), between [NAME OF LENDER], a ____________________ ("Lender"),
and WHRC Real Estate Limited Partnership, a Delaware limited partnership
("Whitehall").
WITNESSETH:
WHEREAS, RCPI Trust, a Delaware business trust (the "Company"), and
the Lender have entered into a Loan Agreement dated as of the date hereof (the
"Loan Agreement"), pursuant to which the Lender has agreed to make a loan to the
Company in the aggregate principal amount of $___________, such loan to be
evidenced by one or more notes (as amended or replaced pursuant to the terms of
the Loan Agreement, the "Notes") bearing interest at the rate provided for in
the Loan Agreement, including during continuance of an Event of Default
thereunder a rate __% per annum in excess of the rate otherwise applicable
(interest during an Event of Default to the extent it exceeds the rate otherwise
applicable being hereinafter referred to as "Default Interest"); and
WHEREAS, the Company and Debenture Holders have entered into an
Amended and Restated Debenture Purchase Agreement dated as of July 17, 1996 (as
amended or replaced pursuant to its terms (and the terms of that certain
Agreement, dated as of July 17, 1996, between the Company and Whitehall), (the
"Debenture Purchase Agreement"), pursuant to which Whitehall (together with its
successors and assigns, the "Debenture Holders") purchased $75,000,000 aggregate
principal amount of the Company's 14% Debentures (as amended or replaced
pursuant to the terms of the Debenture Purchase Agreement, the "Debentures");
and
WHEREAS, for value received and in connection with the transactions
contemplated by the Loan Agreement and the Debenture Purchase Agreement, the
parties hereto desire to enter into this Agreement to determine the priority, as
between the Lender and the Debenture Holders, of the Notes and the Debentures;
NOW, THEREFORE, the Lender and the Debenture Holders hereby agree as
follows:
1. Definitions. All capitalized terms used but not defined herein
shall have the meanings assigned to them in
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<PAGE>
the Debenture Purchase Agreement. All references herein to "interest" on the
Notes (other than Default Interest) shall include interest (other than Default
Interest) accruing (a) at the rate otherwise applicable to the Notes subsequent
to the occurrence of an Event of Default, whether or not the claim for such
interest is allowed or allowable under the Bankruptcy Code (as defined in
Section 7.01(d) of the Debenture Purchase Agreement) or any similar law and (b)
at the rate otherwise applicable to the Notes on overdue principal or interest
(other than Default Interest). "Allowable Amounts" means amounts owing to the
Lender under Section ______ of the Loan Agreement, but only in the event that
such amounts represent reimbursement or indemnification for costs, expenses,
taxes, losses, liabilities, claims or damages incurred in respect of acts or
omissions by the Lender that are beneficial to the Debenture Holders. Solely for
the purpose of this Agreement and notwithstanding any provision of the Loan
Agreement or the Debenture Purchase Agreement to the contrary, (x) payments
received by the Lender shall be deemed applied (unless otherwise designated by
order of a court in the bankruptcy of the Company) first to Allowable Amounts,
then to interest (other than Default Interest) on the Notes and then to
principal of and premium, if any, on the Notes and (y) payments received by the
Debenture Holders shall be deemed applied (unless otherwise designated by order
of a court in the bankruptcy of the Company) first to Allowable Expenses, then
to interest on the Debentures and then to principal of and premium, if any, on
the Debentures. "Allowable Expenses" means amounts owing to Whitehall and the
Debenture Holders under Section 9.04 of the Debenture Purchase Agreement, but
only in the event that such amounts represent reimbursement or indemnification
for costs, expenses, taxes, losses, liabilities, claims or damages incurred in
respect of acts or omissions by Whitehall or any Debenture Holder that are
beneficial to the Lender.
2. Subordination. Notwithstanding any provision to the contrary in
the Debenture Purchase Agreement or the Debentures, Whitehall and each Debenture
Holder agree by accepting or having accepted a Debenture that all principal of,
premium, if any, and interest on the Debentures shall be subordinate and junior
in right of payment to all principal of, premium, if any, and interest (other
than Default Interest) on the Notes and all Allowable Amounts, to the extent set
forth below.
a. Priority in Certain Proceedings. In the event of (i) any
insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding in
E-2
<PAGE>
connection therewith, relative to the Company or to its assets, or (ii)
any liquidation, dissolution or other winding up of the Company, whether
voluntary or involuntary and whether or not involving insolvency or
bankruptcy, or (iii) any assignment for the benefit of creditors or any
other marshalling of assets and liabilities of the Company, or any similar
event or proceeding relating to the Company or its assets, then and in any
such event the Lender shall be entitled to receive payment in full of all
principal of, premium, if any, and interest (other than Default Interest)
on the Notes and all Allowable Amounts before any amounts shall be paid to
Debenture Holders on account of the Debentures, and to that end, the
Lender shall be entitled to receive, for application to the payment of the
Notes held by it (other than payment of Default Interest), any payment or
distribution of any kind or character, whether in cash, property or
securities which may be payable or deliverable in respect of the
Debentures in any such case, proceeding, dissolution, liquidation or other
winding up or event, pro-rata on the basis of the principal amount of the
Notes then outstanding.
b. Events of Default Under the Senior Loan Agreement. In the event
and during the continuation of any Event of Default under the Loan
Agreement, no direct or indirect payments shall be made to the Debenture
Holders on account of the Debentures and all payments owing by the Company
on account of any of the Debentures shall be paid instead to the Note
Holders until all amounts then due (including by reason of acceleration)
in respect of principal of, premium, if any, and interest (other than
Default Interest) on the Notes and all Allowable Amounts shall have been
paid in full.
3. Payment to the Note Holders of Certain Amounts Received by the
Debenture Holders. In the event that, notwithstanding the foregoing, any
distribution of assets by the Company or payment by or on behalf of the Company
of any kind or character, whether in cash, securities or other property, to
which the Debenture Holders would be entitled but for the provisions of this
Agreement, shall be received by the Debenture Holders before all amounts due in
respect of principal of, premium, if any, and interest (other than Default
Interest) on the Notes and all Allowable Amounts shall have been paid in full,
such distribution or payment shall be held in trust for the benefit of, and
shall, immediately upon receipt thereof, be paid over or delivered to the Lender
for application to the payment of Notes (other than payment of
E-3
<PAGE>
Default Interest) pro-rata on the basis of the principal amount of the Notes
then outstanding.
For purposes of this Agreement, a payment in respect of the
Debentures shall not be deemed to include a payment or distribution of stock or
securities of the Company provided for by a plan of reorganization or
readjustment authorized by an order or decree of a court of competent
jurisdiction in a reorganization proceeding under any applicable bankruptcy law
or of any other corporation provided for by such plan of reorganization or
readjustment which stock or securities are subordinated in right of payment to
all then outstanding Notes to substantially the same extent as the Debentures
are so subordinated as provided in this Agreement. The consolidation of the
Company with, or the merger of the Company into, another Person or the
liquidation or dissolution of the Company following the conveyance or transfer
of all or substantially all of its properties and assets as an entirety to
another Person upon the terms and conditions set forth in Section 6.04 of the
Debenture Purchase Agreement shall not be deemed a dissolution, liquidation or
other winding up or event for the purposes of Section 2a. of this Agreement if
the Person formed by such consolidation or into which the Company is merged or
the Person which acquires by conveyance or transfer such properties and assets
as an entirety, as the case may be, shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions set forth in Section
6.04 of the Debenture Purchase Agreement.
The failure to make any payment on the Debentures by reason of the
provisions of this Agreement shall not be construed as preventing the occurrence
of an Event of Default (as defined in the Debenture Purchase Agreement) with
respect to the Debentures arising from any such failure to make payment.
4. Authorizations to the Note Holders. The Debenture Holders (x)
irrevocably authorize and empower (without imposing any obligation on) the
Lender to demand, sue for, collect, receive and receipt for all payments and
distributions in respect to the Debentures which are required to be paid or
delivered to the Lender as provided in this Agreement, and to file and prove all
claims therefor and take all such other action, in the name of the Debenture
Holders or otherwise, as the Lender may determine to be necessary or appropriate
for the enforcement of this Agreement; and (y) agree to execute and deliver to
the Lender all such further instruments confirming the above authorization, and
all such powers of attorney, proofs of claim, assignments of claim and other
instruments, and to take all such other
E-4
<PAGE>
action, as may be requested by the Lender in order to enable the Lender to
enforce all claims upon or in respect of the Debentures.
5. No Waiver. No right of the Lender to enforce the provisions
contained herein shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by the Lender or by any noncompliance by the Company with
the terms, provisions and covenants of this Agreement, the Loan Agreement, the
Notes, the Debenture Purchase Agreement or the Debentures, regardless of any
knowledge thereof which the Lender may have or be otherwise charged with.
6. Subrogation. Subject to the payment in full of all amounts due in
respect of all Notes (other than Default Interest), the Debenture Holders shall
be subrogated to the rights of the Lender to receive distribution of assets of
the Company, or payments by or on behalf of the Company, made on the Notes,
until the obligations under the Debentures shall be fully satisfied.
7. Benefit of This Agreement. This Agreement is intended solely to
define the relative rights of the Lender and the Debenture Holders and the
Company and their respective successors and assigns. Nothing contained in this
Agreement is intended to or shall impair, as between the Company and the
Debenture Holders, the obligation of the Company, which is absolute and
unconditional, to pay to the Debenture Holders all amounts due or to become due
on or in respect of the Debentures as and when the same shall become due and
payable in accordance with the terms thereof, or is intended to or shall affect
the relative rights of the Debenture Holders and creditors of the Company other
than the Lender.
8. Further Assurances. The Debenture Holders, at their own cost,
will take all such further actions, including entering into additional
agreements, giving notices to offerees of the Debentures in any public or
private offering and taking such further action as the Lender may reasonably
request in order more fully to carry out the intent and purpose of this
Agreement.
9. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
10. Amendment, Termination and Assignment. This Agreement may not be
amended, modified or terminated without
E-5
<PAGE>
the prior written consent of the Lender. The Lender may assign, sell or transfer
any of the Notes from time to time in accordance with the terms of the Loan
Agreement, and any such assignee, purchaser, transferee or holder of a Note
shall be entitled to all of the rights of the Lender hereunder with respect to
the Notes so assigned, sold or otherwise transferred.
11. Agent or Trustee. Any payment to the Lender provided for herein
may be made to any duly authorized agent or trustee on its behalf, and any
actions provided for herein to be taken by the Lender may be taken by any duly
authorized agent or trustee acting on its behalf.
12. No Partnership. Nothing contained in this Agreement, and no
action taken by any party pursuant hereto, is intended to constitute or shall be
deemed to constitute two or more parties hereto a partnership, association,
joint venture or other common entity.
13. Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts, each of which shall be an original, and all of which
taken together shall constitute a single agreement. This Agreement shall become
effective only upon the execution and delivery of the Loan Agreement and the
closing of the transactions contemplated thereby.
E-6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first set forth above.
[NAME OF LENDER]
By:_____________________________________
Name:
Title:
WHRC Real Estate Limited Partnership
By: WHRC Gen-Par, Inc.
By:_____________________________
Name:
Title:
The Company hereby acknowledges and accepts notice of the foregoing
Intercreditor Agreement and agrees to recognize the rights of the Lender
provided therein and to make payments as provided therein.
RCPI Trust
By:_________________________
Name:
Title:
E-7
<PAGE>
EXHIBIT F
AGREEMENT
This AGREEMENT, dated as of July __, 1996 (this "Agreement") is
entered into by and between RCPI Trust, a Delaware business trust (the
"Company"), and WHRC Real Estate Limited Partnership, a Delaware limited
partnership ("Whitehall").
WHEREAS, the Company and Whitehall have entered into that certain
Amended and Restated Debenture Purchase Agreement, dated as of the date hereof
(the "Debenture Purchase Agreement"). Capitalized terms used herein but not
defined herein shall have the meaning assigned to them in the Debenture Purchase
Agreement; and
WHEREAS, it is a condition to the execution and delivery of the
Debenture Purchase Agreement that the Company and Whitehall enter into this
Agreement;
NOW THEREFORE, to induce Whitehall to enter into the Debenture
Purchase Agreement and for other valuable considerations the receipt and
sufficiency of which is hereby acknowledged, the Company and Whitehall hereby
agree as follows:
1. Resale of Debentures. The Company, upon the request of Whitehall
from time to time, will exchange the Debentures for any other evidences of
indebtedness or debt securities, whether notes, debentures or otherwise (the
"New Debt"), and shall enter into any such agreements, whether in the form of an
amendment hereto, an indenture, a debenture purchase agreement or otherwise (the
"New Documents"), as shall be deemed necessary or desirable by Whitehall in
connection with the resale of the Debentures, whether as a private placement, a
registered public offering or otherwise, provided only that the aggregate
principal amount of the New Debt shall be equal to the unpaid principal amount
of the Debentures at the time of exchange and the business terms (including
aggregate interest) of the New Documents shall be substantially the same as the
business terms (including affirmative and negative covenants) contained in the
Debenture Purchase Agreement. Notwithstanding the foregoing, it is understood by
the parties that (a) the New Debt shall be in such denominations and tranches
and have such other features (including, without limitation, intercreditor
and/or priority arrangements among tranches) as may be deemed appropriate by
Whitehall, (b) the New Documents will contain additional terms and provisions
governing the voting rights of the holders of
F-1
<PAGE>
the New Debt (to be on a majority basis except for the requirement of unanimous
approval of the holders of New Debt for waivers or amendments in respect of any
provision relating to any change to the stated maturity of the principal of, or
any installment of interest on, any New Debt, any reduction to the principal
amount of (or the premium) or rate of interest on, any New Debt and any other
provisions customarily so treated), (c) the New Documents will contain such
additional terms and provisions as are customarily contained in such documents
governing the issuance of debt including provisions governing the rights of
indenture trustees and/or administrative agents and bank set-off and sharing
provisions, as applicable, (d) the New Documents will contain such other
additional terms and provisions as are reasonably requested by Whitehall in
order to effectuate the resale of the Debentures and such other additions hereto
or variations herefrom as are requested by any rating agency rating the New
Debt, including, without limitation, requiring accrual of payments that are due
in escrow or trust accounts, except to the extent otherwise prohibited by the
1985 Indenture and except that no such escrow shall be required in respect of
regularly scheduled payments on account of the Debentures and (e) the New
Documents will be in such form and will contain such terms and provisions as are
necessary to comply with all applicable securities laws, including, in the case
of an indenture, the Trust Indenture Act of 1939, as amended. In furtherance of
the foregoing, the Company will provide Whitehall with all such documents and
information, financial or otherwise, assist in all such due diligence and do
such other things and enter into such other agreements as are reasonably
necessary to resell the Debentures and carry out the intent of this Agreement.
2. Payment of Expenses. The Company hereby agrees to pay all
reasonable out-of-pocket costs and expenses of Whitehall and Whitehall Street V
in connection with the exchange of the Debentures for the New Debt and the
negotiation, preparation, execution and delivery of any New Documents as
contemplated by Section 1 above (including, without limitation, the fees and
expenses of Sullivan & Cromwell and any indenture trustee, administrative agent
or like parties in respect of the New Debt, and the resale of the New Debt and
the reasonable travel expenses of employees of Whitehall and Whitehall Street V.
3. Liens. In the event the Debentures are secured equally and
ratably with other pari passu Indebtedness pursuant to Section 6.02 of the
Debenture Purchase Agreement, so long as Whitehall is the registered Holder of
any of the Debentures, Whitehall shall be granted such rights to actively
F-2
<PAGE>
administer the security arrangements (e.g., the mortgage) that are at least
equal to any other holder of Indebtedness that ranks pari passu with the
Debentures.
4. Offer to Purchase. Whitehall hereby agrees that so long as
Whitehall is the registered Holder of all of the outstanding Debentures, (i) the
Expiration Date of any Offer to Purchase made pursuant to the Debenture Purchase
Agreement shall be not less than fifteen (15) days or more than 60 days after
the date of such Offer and (ii) the Company shall not be required to provide to
Whitehall the information referred to in the third sentence of the definition of
Offer to Purchase set forth in the Debenture Purchase Agreement.
5. Limitation on Restricted Payments. Whitehall hereby agrees that
so long as Whitehall is the registered Holder of all of the outstanding
Debentures, the Company shall not be required to deliver the certificate
referred to in the last sentence of the first paragraph of Section 6.08 of the
Debenture Purchase Agreement.
6. Release of Collateral. The Company hereby agrees that so long as
Whitehall is the registered Holder of any of the Debentures, the Company shall
not and shall not permit the release of any collateral which may at any time
secure the Debentures without Whitehall's prior written consent unless such
release is made pursuant to the express terms of the documents governing the
collateral relating to a partial release of collateral.
7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall constitute one and the same instrument. It shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart.
8. Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
9. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. Nothing herein shall affect the right of
Whitehall
F-3
<PAGE>
to commence legal proceedings or to otherwise proceed against the Company in any
other jurisdiction.
(b) The Company hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement brought in the
courts referred to in subsection (a) hereof and hereby further irrevocably
waives and agrees not to plead or claim in any such court that any such action
or proceeding brought in any such court has been brought in an inconvenient
forum.
(c) THE COMPANY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.
10. Severability. If any provision of this Agreement is determined
to be illegal, invalid or unenforceable, such provision shall be fully severable
and the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11. Benefit of this Agreement. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto, and any
registered Holder of a Debenture that is an Affiliate of Whitehall V or Goldman,
Sachs & Co. (a "Future Beneficiary"), it being agreed that any other registered
Holder of a Debenture shall have no rights or obligations under this Agreement
and no right to enforce this Agreement and it being further agreed that the
Company may not assign or transfer any of its rights or obligations hereunder
without the prior written consent of Whitehall and/or any Future Beneficiary.
F-4
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
RCPI TRUST
By:____________________________
Name:
Title:
WHRC REAL ESTATE LIMITED PARTNERSHIP
By:____________________________
Name:
Title:
F-5
<PAGE>
EXHIBIT G
EXAMPLES OF THE APPLICATION OF SECTION 6.01(ix)
Example 1:
Step #1 The Company has $170,000,000 of Senior Debt outstanding.
Step #2 The Company then uses $90,000,000 of Net Available Proceeds to repay
Senior Debt.
Step #3 The Company may Incur up to an additional $20,000,000 of Senior Debt
provided the proceeds are used to improve the Company's Assets.
Example 2:
Step #1 The Company has $130,000,000 of Senior Debt outstanding.
Step #2 The Company then uses $50,000,000 of Net Available Proceeds to repay
Senior Debt, leaving a balance of $80,000,000.
Step #3 The Company Incurs an additional $40.000,000 of Senior Debt which is
deemed not to be a reIncurrence of the Senior Debt paid in Step #2
resulting in a balance of $120,000,000.
Step #4 The Company may not at this point Incur additional Senior Debt
because it has over $100,000,000 of Senior Debt outstanding.
Step #5 The Company uses $30,000,000 of Net Available Proceeds to repay
Senior Debt, leaving a balance of $90,000,000.
Step #6 At this point the Company may Incur an additional $10,000,000 of
Senior Debt provided the proceeds are used to improve the Company's
assets.
G-1
<PAGE>
G-2
EXHIBIT 4.4
SECOND SUPPLEMENTAL INDENTURE, dated as of July 10, 1996 (this
"Second Supplemental Indenture"), among Rockefeller Center Properties, Inc., a
corporation duly organized and existing under the laws of the State of Delaware
(the "Company"), having its principal office at c/o Tishman Speyer Properties,
L.P., 520 Madison Avenue, New York, New York 10022, RCPI Trust, a business trust
duly organized and existing under the laws of the State of Delaware (the "New
Company"), and United States Trust Company of New York (as successor to
Manufacturers Hanover Trust Company pursuant to that certain Instrument of
Resignation, Appointment and Acceptance, dated as of December 1, 1993, among the
Company, Chemical Bank (successor by merger to Manufacturers Hanover Trust
Company) and United States Trust Company of New York), a banking corporation
duly organized and existing under the laws of the State of New York, as Trustee
(the "Trustee") having its Corporate Trust Office at 114 West 47th Street, 15th
Floor, New York, New York 10036-1532.
RECITALS OF THE COMPANY
The Company has heretofore executed and delivered to the Trustee an
Indenture dated as of September 15, 1985 (the "Original Indenture") and a First
Supplemental Indenture dated as of December 15, 1985 (the "First Supplemental
Indenture" and together with the "Original Indenture", the "Indenture") under
which the Company issued its Current Coupon Convertible Debentures due 2000 and
Zero Coupon Convertible Debentures due 2000 (collectively, the "Securities").
Section 1206 of the Indenture requires that the Company execute and
deliver a supplemental indenture to the Trustee in the event of a change in the
relative rights or preferences of outstanding shares of the Company's common
stock.
Section 801(1) of the Indenture requires that in the event the
Company conveys or transfers its properties and assets substantially as an
entirety to any Person, among other things, such Person is required to execute a
supplemental indenture in which such Person expressly assumes the due and
punctual payment of the principal of and interest (including all additional
amounts, if any, payable pursuant to Section 1004 of the Indenture) on all the
Securities and the performance of every covenant of the Indenture on the part of
the Company to be performed or
<PAGE>
observed and to provide for conversion rights in accordance with Section 1206 of
the Indenture.
On the date hereof, pursuant to the Agreement and Plan of Merger,
dated as of November 7, 1995, among RCPI Holdings Inc., a Delaware corporation
("RCPI Holdings"), RCPI Merger Inc., the investors listed therein and the
Company (the "Merger Agreement"), RCPI Holdings merged with and into the
Company, with the Company being the surviving corporation after such merger
(such merger is herein referred to as the "REIT Merger"). In connection with the
REIT Merger, each outstanding share of the Company's common stock (other than
the shares of the Company's common stock described in the first parenthetical
clause of Section 2.1(a) of the Merger Agreement) has been converted into the
right to receive a cash payment equal to eight dollars ($8.00).
Also on the date hereof, and immediately following the REIT Merger,
the Company transferred all of its assets and liabilities to the New Company
(the "Asset Transfer") and the New Company has assumed the due and punctual
payment of the principal of and interest (including all additional amounts, if
any, payable pursuant to Section 1004 of the Indenture) on all the Securities
and the performance of every covenant of the Indenture on the part of the
Company to be performed or observed.
The Company and the New Company desire to enter into this Second
Supplemental Indenture (i) pursuant to Section 1206 of the Indenture, to reflect
the change in the relative rights of outstanding shares of the Company's common
stock resulting from the REIT Merger and (ii) pursuant to Section 801(1) of the
Indenture, to evidence the New Company's assumption of the due and punctual
payment of all amounts owing in respect of the Securities and the performance of
every other covenant of the Indenture on the part of the Company to be performed
or observed as a result of the Asset Transfer.
The Company and the New Company also desire to supplement the
Indenture pursuant to Section 901(7) thereof to provide for the repurchase of
Securities by the Company in any instance in which the Company would be
permitted to redeem Securities under the Indenture at a repurchase price
identical to the consideration payable in respect of the redemption of such
Securities in order that the additional provision providing for the
aforementioned right to repurchase Securities shall not adversely affect the
interests of the Holders of Securities of any series or any related coupons in
any material respect.
2
<PAGE>
The Company and the New Company therefore desire that the Trustee
join in the execution of this Second Supplemental Indenture for the purpose of
supplementing and amending certain provisions of the Indenture as hereinafter
set forth.
All things necessary to make this Second Supplemental Indenture a
valid agreement of the Company and the New Company in accordance with its terms
have been done.
NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises, it is mutually covenanted
and agreed, for the equal and proportionate benefit of all Holders of the
Securities or of series thereof, as follows:
SECTION 1. Definitions. All terms which are defined in the Indenture and not
otherwise defined herein shall have the meanings set forth in the Indenture when
used herein.
SECTION 2. Reclassification of the Company's Common Stock.
(a) In accordance with Section 1206 of the Indenture, from and after
the effective time of the REIT Merger (the "Effective Time"), the Holder of a
Current Coupon Debenture or Zero Coupon Debenture Outstanding at the Effective
Time shall, after the Effective Time and only at such times as may be provided
by the terms and conditions of the Indenture and such Current Coupon Debenture
or Zero Coupon Debenture, have the right to convert such Current Coupon
Debenture or Zero Coupon Debenture only into cash in an amount equal to eight
dollars ($8.00) in respect of each share of Common Stock into which such Current
Coupon Debenture or Zero Coupon Debenture could otherwise have been converted at
the time of conversion pursuant to the terms and conditions of the Indenture and
such Current Coupon Debenture or Zero Coupon Debenture.
(b) In compliance with Sections 801(3) and 1206 of the Indenture,
the Company has delivered to the Trustee (i) an Officers' Certificate and an
Opinion of Counsel, each stating that the transactions described in the fourth
Recital hereto and the provisions of this Second Supplemental Indenture comply
with Article Eight of the Indenture and confirming compliance with all
conditions precedent provided for in Article Eight of the Indenture relating to
such transactions and (ii) an Opinion of Counsel as to the correctness of the
provisions contained in this Second Supplemental Indenture relating to the
amount of cash receivable by Holders of the Securities upon the conversion
3
<PAGE>
of their Securities after the consummation of the transactions described in the
fourth recital hereto.
SECTION 3. Transfer of the Company's Assets and Liabilities
to New Company
(a) In accordance with Section 801(1) of the Indenture:
(i) New Company hereby represents that it is a business trust
organized and existing under the laws of the State of Delaware;
(ii) New Company hereby expressly assumes the due and punctual
payment of the principal of and interest (including all additional amounts, if
any, payable pursuant to Section 1004 of the Indenture) on all the Securities
and the performance of every covenant of the Indenture on the part of the
Company to be performed or observed; and
(iii) New Company hereby agrees to provide for the conversion
rights granted to Holders of the Securities in accordance with Section 1206 of
the Indenture as modified by Section 2 of this Second Supplemental Indenture.
(b) In compliance with Section 801(3) of the Indenture, the Company
has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that the transactions described in the fifth Recital hereto and the
provisions of this Second Supplemental Indenture comply with Article Eight of
the Indenture and confirming compliance with all conditions precedent provided
for in Article Eight of the Indenture relating to such transactions.
SECTION 4. Amendment to the Indenture
The Original Indenture is hereby amended pursuant to Section 901(7)
of the Indenture by
(i) amending Sections 305, 309 and 614 by adding the words "or
repurchase or purchase" after the word "redemption" in each case;
(ii) amending the form of Face of Coupon and the form of Face of
Special Coupon for the Securities set forth in Article Two by adding ",
repurchase or purchase" after the word "redemption" in each case;
(iii) amending the seventh paragraph of the Form of Reverse of the
Form of Definitive Current Coupon Debenture set forth in Section 202 by
adding the words
4
<PAGE>
"or repurchase" after the word "redemption" in the eighteenth line thereof
and adding the words "or Repurchase Date, as the case may be" after the
words "Redemption Date" in the nineteenth line thereof;
(iv) amending Section 401 as follows:
(A) adding the words "or repurchase or purchase" after
the word "redemption" on the eighth line of Section 401(1)(A) and
the first and third lines of Section 401(1)(B)(iii); and
(B) adding the words "or Repurchase Date" after the
words "Redemption Date" on the ninth line of Section 401(1)(A);
(C) adding "either (a)" after the word
"above," on the tenth line of Section 401(B); and
(D) adding the words "or (b) in the case of the
repurchase or purchase of all such Securities, has deposited or
caused to be deposited with the Trustee as trust funds in trust for
the purpose, an amount sufficient to pay the entire Repurchase Price
plus interest to the Repurchase Date on such Securities and coupons
not theretofore delivered to the Trustee for cancellation" at the
end of Section 401(1)(B);
(v) amending Section 508 by replacing the second parenthetical
clause with "(or, in the case of redemption, repurchase or purchase, on
the Redemption Date or Repurchase Date, as appropriate)";
(vi) amending Section 514 by replacing the parenthetical clause
therein with "(or, in the case of redemption, repurchase or purchase, on
or after the Redemption Date or Repurchase Date, as appropriate)";
(vii) amending the title of Article Eleven to read
"Redemption or Repurchase of Securities";
(viii) amending Article Twelve by adding "or Repurchase Date" after
"Redemption Date" in each case other than as provided in clause (ix)
below; and
(ix) amending Section 1201 by adding the words "or repurchase" after
the word "redemption" on the fourth line thereof and adding the words "or
Repurchase Date, as the case may be" after the words "Redemption Date" on
the fifth line thereof;
5
<PAGE>
(x) adding the following provision as Section 1108 of the Original
Indenture:
"Section 1108. Repurchase in lieu of Redemption.
(a) In the event the Company is permitted or required to
redeem any Securities in accordance with their terms and Article 11 of
this Indenture, the Company may instead elect to repurchase or cause its
designee to purchase such Securities from the Holders in accordance with
this Section 1108.
(b) The election of the Company to repurchase or cause its
designee to purchase any Securities shall be evidenced by a Board
Resolution. In the case of any repurchase or purchase at the election of
the Company of less than all the Securities of any series, the Company
shall, at least 60 days prior to the date fixed by the Company for such
repurchase or purchase (unless a shorter notice shall be satisfactory to
the Trustee) (such date, the "Repurchase Date"), notify the Trustee of
such Repurchase Date and of the principal amount of Securities of such
series to be repurchased or purchased. In the case of any repurchase or
purchase of Securities prior to the expiration of any restriction on the
redemption, repurchase or purchase of such Securities provided in the
terms of such Securities or elsewhere in this Indenture, the Company shall
furnish the Trustee with an Officers' Certificate evidencing compliance
with such restriction or condition. If the redemption of any Securities
which the Company elects to repurchase or purchase would have been subject
to a condition specified in the terms of such Securities, the Company
shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction or condition.
(c) If less than all the Securities of any series are to be
repurchased or purchased, the particular Securities to be repurchased or
purchased shall be selected not more than 60 days prior to the Repurchase
Date by the Trustee, from the Outstanding Securities of such series not
previously called for redemption, repurchase or purchase, by such method
as the Trustee shall deem fair and appropriate and which may provide for
the selection for repurchase or purchase of portions (equal to $5,000 or
any integral multiple thereof) of the principal amount of Registered
Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series. The Trustee shall
promptly notify the
6
<PAGE>
Company in writing of the Securities selected for repurchase or purchase
and, in the case of any Securities selected for partial repurchase or
purchase, the principal amount thereof to be repurchased or purchased. For
all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the repurchase or purchase of Securities shall
relate, in the case of any Securities repurchased or purchased or to be
repurchased or purchased only in part, to the portion of the principal
amount of such Securities which has been or is to be repurchased or
purchased.
(d) Notice of repurchase shall be given in the manner provided
in Section 106 to the Holders of Securities to be repurchased or purchased
not less than 30 nor more than 60 days prior to the Repurchase Date.
All notices of repurchase shall state:
(1) the Repurchase Date,
(2) the price at which the Securities to be repurchased or
purchased would have been redeemed had the Company not
elected to repurchase or cause its designee to purchase
such Securities but instead had elected to redeem such
Securities (the "Repurchase Price"),
(3) if less than all the Outstanding Securities of any
series are to be repurchased or purchased, the
identification (and, in the case of partial repurchase
or purchase, the principal amounts) of the particular
Securities to be repurchased or purchased,
(4) that on the Repurchase Date the Repurchase Price will
become due and payable upon each such Security to be
repurchased or purchased and, if applicable, that
interest thereon will cease to accrue on and after said
date,
(5) in the case of Current Coupon Debentures or of Zero
Coupon Debentures, the Conversion Price, the date on
which the right to convert the principal of the Current
Coupon Debentures or Zero Coupon Debentures to be
repurchased or
7
<PAGE>
purchased may be exercised and the place or places where
such Current Coupon Debentures or Zero Coupon Debentures
may be surrendered for conversion, and
(6) the place or places where such Securities, together in
the case of Bearer Securities with all coupons
appertaining thereto, if any, maturing after the
Repurchase Date, are to be surrendered for payment of
the Repurchase Price.
A notice of repurchase published as contemplated by Section
106 need not identify particular Registered Securities to be repurchased
or purchased.
Notice of repurchase of Securities to be repurchased or
purchased at the election of the Company shall be given by the Company or,
at the Company's request, by the Trustee in the name and at the expense of
the Company.
(e) Prior to any Repurchase Date, the Company or its designee
shall deposit with the Trustee or with a Paying Agent (or, if the Company
is acting as its own Paying Agent, segregate and hold in trust as provided
in Section 1003) an amount of money sufficient to pay the Repurchase Price
of, and (except if the Repurchase Date shall be an Interest Payment Date)
accrued interest on, all the Securities which are to be repurchased or
purchased on that date other than any Current Coupon Debentures or Zero
Coupon Debentures called for repurchase or purchase on that date which
have been surrendered for conversion prior to the date of such deposit.
If any Current Coupon Debenture or Zero Coupon Debenture
called for repurchase or purchase is converted, any money deposited with
the Trustee or with a Paying Agent or so segregated and held in trust for
the repurchase or purchase of such Current Coupon Debenture or Zero Coupon
Debenture shall be paid to the Company on Company Request or, if then held
by the Company, shall be discharged from such trust.
(f) Notice of repurchase having been given by the Company to
the Holders of the Securities to be repurchased or purchased in accordance
with Section 106 and Section 1108(d), (i) on the Repurchase Date, the
indebtedness evidenced by the Securities to be
8
<PAGE>
repurchased or purchased shall be deemed to be repurchased or purchased by
and assigned (without representation or warranty whatsoever by, or
recourse to, any Holder or the Trustee) to the Company or its designee,
and from and after the Repurchase Date (unless the Company or its designee
shall default in the payment of the Repurchase Price and accrued interest)
such Securities shall cease to be entitled to the benefit of the
Indenture, and (ii) on the Repurchase Date, the Holders of the Securities
so to be repurchased or purchased shall be paid the Repurchase Price,
together with accrued interest to the Repurchase Date. In furtherance of
the foregoing, subsequent to such repurchase or purchase, as aforesaid,
upon surrender of any such Security for repurchase or purchase in
accordance with said notice, together with all coupons, if any,
appertaining thereto maturing after the Repurchase Date, such Security
shall be endorsed over to the Company or its designee by the Trustee or
such other Person to whom the Security was surrendered in accordance with
the terms of this Indenture; provided, however, that installments of
interest on Bearer Securities whose Stated Maturity is on or prior to the
Repurchase Date shall be payable only upon presentations and surrender of
coupons for such interest (at an office or agency located outside the
United States except as otherwise provided in Section 1002), and provided,
further, that installments of interest on Registered Securities whose
Stated Maturity is on or prior to the Repurchase Date shall be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 307.
If any Bearer Security surrendered in accordance with the
foregoing shall not be accompanied by all appurtenant coupons maturing
after the Repurchase Date, the Repurchase Price to be paid for such
Security may be reduced by an amount equal to the face amount of all such
missing coupons, or the surrender of such missing coupon or coupons may be
waived by the Company and the Trustee, if there be furnished to them such
security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall
surrender to any Paying Agent any such missing coupon in respect of which
a deduction shall have been made from the Repurchase Price, such Holder
shall be entitled to receive the amount so deducted; provided,
9
<PAGE>
however, that interest represented by coupons shall be payable only upon
presentation and surrender of those coupons at an office or agency located
outside of the United States except as otherwise provided in Section 1002.
If any Security called for repurchase or purchase shall not be
so repurchased or purchased in accordance with the foregoing, the
principal shall, until paid, bear interest from the Repurchase Date at the
rate prescribed therefor in the Security.
(g) Any Registered Security which is to be repurchased or
purchased only in part shall be surrendered at a Place of Payment therefor
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without
service charge, a new Registered Security or Securities of the same
series, of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the portion of the
principal of the Security so surrendered which is not repurchased or
purchased, as the case may be.
(h) Notwithstanding the terms of Section 309, the Securities
and coupons surrendered for repurchase or purchase pursuant to Section
1108 shall not be cancelled by the Trustee.
(i) The Holder of any Security called for purchase or
repurchase shall have the same rights to convert such Security as the
Holder of a Security called for redemption. The Holder of any Security
purchased or repurchased only in part shall have the same rights to be
issued a new Security or Securities for the portion not purchased or
repurchased as the Holder of a Security redeemed only in part would have
to be issued a new Security or Securities for the portion not redeemed.
The Holder of a Zero Coupon Debenture called for purchase or repurchase
shall have the same rights to the payment of interest in the event of a
default in payment upon purchase or repurchase as a Holder of a Zero
Coupon Debenture called for redemption would have in the event of a
default in payment upon redemption."
10
<PAGE>
SECTION 5. Miscellaneous
(a) THIS SECOND SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(b) This Second Supplemental Indenture may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all of which shall together constitute but one and the same instrument.
(c) The Company, the New Company and the Trustee hereby ratify and
reaffirm the provisions of the Original Indenture, as amended by the First
Supplemental Indenture and as further amended by this Second Supplemental
Indenture, in all respects.
11
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.
ROCKEFELLER CENTER PROPERTIES, INC.
By:/s/ Ralph F. Rosenberg
-------------------------
Name: Ralph F. Rosenberg
Title: Vice President
Attest:
/s/ Geoffrey P. Wharton
- - ---------------------------
Name: Geoffrey P. Wharton
Title: Vice President and
Assistant Secretary
UNITED STATES TRUST COMPANY
OF NEW YORK
By:/s/ Louis P. Young
---------------------
Name: Louis P. Young
Title: Vice President
Attest:
/s/ Gerard F. Ganey
- - ----------------------
Name: Gerard F. Ganey
Title: Senior Vice President
RCPI TRUST
By:/s/ Ralph F. Rosenberg
-------------------------
Name: Ralph F. Rosenberg
Title: Vice President
Attest:
/s/ Geoffrey P. Wharton
- - ---------------------------
Name: Geoffrey P. Wharton
Title: Vice President and
Assistant Secretary
12
EXHIBIT 16.1
March 31, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: RCPI Trust
Gentlemen:
We have read Item 9 of Form 10-K dated March 31, 1997 of RCPI Trust and are in
agreement with the statements contained in the second and third paragraphs on
the page therein. We have no basis to agree or disagree with other statements of
the registrant contained therein.
Very truly yours,
/s/ ERNST & YOUNG LLP
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from RCPI Trust's
Balance Sheet as of December 31, 1996 and RCPI Trust's Statement of Operations
for the period from July 10, 1996 through December 31, 1996 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 38,792
<SECURITIES> 0
<RECEIVABLES> 20,337
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 773,345
<DEPRECIATION> 6,718
<TOTAL-ASSETS> 839,672
<CURRENT-LIABILITIES> 10,000
<BONDS> 463,310
0
0
<COMMON> 0
<OTHER-SE> 332,466
<TOTAL-LIABILITY-AND-EQUITY> 839,672
<SALES> 0
<TOTAL-REVENUES> 88,488
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 69,622
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