SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )
Lexington Corporate Properties, Inc.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
529039109
(CUSIP Number)
Mr. Matthew W. Kaplan
Rothschild Realty Inc.
1251 Avenue of the Americas
New York, New York 10020
(212) 403-3500
(Name, address and telephone number of person
authorized to receive notices and communications)
January 21, 1997
(Date of event which requires filing of this statement)
______________________
If the filing person has previously filed a statement
on Schedule 13G to report the acquisition which is the subject of
this Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the
statement [x]. (A fee is not required only if the reporting
person: (1) has a previous statement on file reporting
beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent
or less of such class.) (See Rule 13d-7.)
Page 1 of 7 Pages
<PAGE>
13D
CUSIP No. 529039109
_____________________________________________________________________________
(1) NAME OF REPORTING PERSON Five Arrows Realty Securities L.L.C.
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS
WC
_____________________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
_____________________________________________________________________________
NUMBER OF (7) SOLE VOTING POWER -0-
SHARES ______________________________________________________________
BENEFICIALLY (8) SHARED VOTING POWER 700,000 (upon conversion of 700,000
shares of Class A Senior Cumulative Convertible Preferred
Stock held by the reporting person, which are convertible
into Common Stock on a 1-for-1 basis, subject to adjustment)
OWNED BY ______________________________________________________________
EACH (9) SOLE DISPOSITIVE POWER -0-
REPORTING ______________________________________________________________
PERSON WITH (10) SHARED DISPOSITIVE POWER 700,000 (upon conversion of
700,000 shares of Class A Senior 700,000 shares of Class A
Senior Cumulative Convertible Preferred Stock held by the
reporting person, which are convertible into Common Stock
on a 1-for-1 basis, subject to adjustment)
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 700,000 (upon conversion of
700,000 shares of Class A Senior 700,000 shares of Class A
Senior Cumulative Convertible Preferred Stock held by the
reporting person, which are convertible into Common Stock on
a 1-for-1 basis, subject to adjustment)
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** [ ]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11) 6.9%
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON
OO
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 2 of 7 Pages
<PAGE>
13D
CUSIP No. 529039109
_____________________________________________________________________________
(1) NAME OF REPORTING PERSON Rothschild Realty Investors II L.L.C.
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS
WC
_____________________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
_____________________________________________________________________________
NUMBER OF (7) SOLE VOTING POWER -0-
SHARES ______________________________________________________________
BENEFICIALLY (8) SHARED VOTING POWER 700,000 (upon conversion of 700,000
shares of Class A Senior Cumulative Convertible Preferred
Stock held by the reporting person, which are convertible
into Common Stock on a 1-for-1 basis, subject to adjustment)
OWNED BY ______________________________________________________________
EACH (9) SOLE DISPOSITIVE POWER -0-
REPORTING ______________________________________________________________
PERSON WITH (10) SHARED DISPOSITIVE POWER 700,000 (upon conversion of
700,000 shares of Class A Senior 700,000 shares of Class A
Senior Cumulative Convertible Preferred Stock held by the
reporting person, which are convertible into Common Stock
on a 1-for-1 basis, subject to adjustment)
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 700,000 (upon conversion of
700,000 shares of Class A Senior 700,000 shares of Class A
Senior Cumulative Convertible Preferred Stock held by the
reporting person, which are convertible into Common Stock on
a 1-for-1 basis, subject to adjustment)
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** [ ]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11) 6.9%
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON
OO
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 3 of 7 Pages
<PAGE>
Item 1. Security and Issuer
This statement on Schedule 13D ("Schedule 13D") is being filed
with respect to the Common Stock, par value $.001 per share (the "Common
Stock") of Lexington Corporate Properties, Inc., a Maryland corporation
(the "Company"), whose principal executive offices are located at 344
Lexington Avenue, New York, New York 10017.
Item 2. Identity and Background
(a) This Schedule 13D is being filed on behalf of (i) Five Arrows
Realty Securities L.L.C., a Delaware limited liability company ("Five Arrows")
and (ii) Rothschild Realty Investors II L.L.C., a Delaware limited liability
company and sole Managing Member of Five Arrows ("Rothschild").
The reporting entities are making a joint filing pursuant to Rule
13d-1(f) because, by reason of the relationship as described herein, they may
be deemed to be a "group" within the meaning of Section 13(d)(3) with respect
to acquiring, holding and disposing of shares of Preferred Stock.
(b) The business address of each of the Five Arrows and Rothschild
is 1251 Avenue of the Americas, New York, New York 10020.
(c) Five Arrows is a private investment limited liability company.
The principal occupation of Rothschild is acting as managing member of Five
Arrows. The current Managers of Rothschild are John D. McGurck, Matthew W.
Kaplan, James E. Quigley, 3rd, and D. Pike Aloian.
(d) Neither of Five Arrows or Rothschild has, during the last five
years, been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors).
(e) Neither Five Arrows or Rothschild has, during the last five
years, been a party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and as result of such proceeding was or is subject
to a judgment decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws or a finding of any violation with respect to such laws.
Page 4 of 7 Pages
<PAGE>
Item 3. Source and Amount of Funds or Other Consideration
The source of funds for the purchases reported by Five Arrows herein
was Five Arrow's capital. The total amount of funds used by Five Arrows to
purchase the 700,000 shares of Class A Senior Cumulative Convertible Preferred
Stock (the "Preferred Stock") reported herein was $8,750,000.
Item 4. Purpose of Transaction
The purpose of the acquisition of the shares of Preferred Stock
by Five Arrows is for investment. The acquisition of the 700,000 shares of
Preferred Stock was made pursuant to an Investment Agreement, dated as of
December 31, 1996, between the Company and Five Arrows (the "Investment
Agreement"). The Investment Agreement provides that on or before December 31,
1997, the Company shall be required to sell to Five Arrows, and Five Arrows
shall be required to purchase from the Company, an additional 1,300,000 shares
of Preferred Stock.
Five Arrows intends to review its holdings with respect to the
Company on a continuing basis. Depending on Five Arrows's evaluation of the
Company's business and prospects, and upon future developments (including, but
not limited to, market prices of the shares of Preferred Stock and
availability and alternative uses of funds; as well as conditions in the
securities markets and general economic and industry conditions), Five Arrows
may acquire other securities of the Company; sell all or a portion of its
shares of Preferred Stock or other securities of the Company, now owned or
hereafter acquired, or maintain its position at current levels.
Pursuant to the Articles Supplementary of the Charter of the
Company, the holders of the Preferred Stock have the right to elect one member
of the Board of Directors of the Company. Additionally, upon the occurrence
of certain other events, the holders of the Preferred Stock shall have the
right to elect a second member of the Board of Directors of the Company.
Consequently, John D. McGurck has been designated as a member of the Board
of Directors of the Company and has been appointed to the Board of Directors
of the Company by the existing Board of Directors of the Company.
Other than as described above, Five Arrows has no present plans or
proposals which relate to, or would result in, any of the matters enumerated
in paragraphs (b) through (j), inclusive, of Item 4 of Schedule 13D. Five
Arrows may, at any time and from time to time, review or reconsider its
position with respect to the Company, and formulate plans or proposals with
respect to any such matters.
Page 5 of 7 Pages
<PAGE>
Item 5. Interest in Securities of the Issuer
(a) As of the close of business on January 21, 1997, Five Arrows
owned, within the meaning of Rule 13d-3 under the Exchange Act, 700,000
shares of the Preferred Stock, which is convertible at any time on a 1-for-1
basis into Common Stock of the Company, subject to adjustment. Upon the full
conversion of the 700,000 shares of Preferred Stock, at the initial conversion
ratio, Five Arrows would own 6.9% of the issued and outstanding shares of
Common Stock (based on the Company reporting 9,426,900 shares of Common Stock
on December 31, 1996). Rothschild, as sole managing member of Five Arrows,
may be deemed the beneficial owner of the 700,000 shares of Preferred Stock
held by Five Arrows.
(b) Five Arrows has the sole power to vote and dispose of the
700,000 shares of Preferred Stock owned by it, which power may be exercised
by Rothschild.
(c) Five Arrows purchased the 700,000 shares of Preferred Stock
from the Company on January 21, 1997 pursuant to the Investment Agreement. In
consideration for the 700,000 shares of Preferred Stock, Five Arrows paid
$12.50 per share for a total of $8,750,000.
(d) Not applicable.
(e) Not applicable.
ITEM 6. Contracts, Arrangements, Understandings or Relationships
With Respect to Securities of the Issuer
Pursuant to the Articles Supplementary of the Company and the terms of
the Preferred Stock, Five Arrows has the right to require the Company to
redeem its shares of Preferred Stock at a premium upon the occurrence of
certain events. Additionally, the Company has the right to redeem shares of
the Preferred Stock at a premium on or after December 31, 2001. Other than
as described herein, or the agreement described in Exhibit 99.1 in Item 7
below, there are no contracts, understandings or relationships (legal or
otherwise) among the persons named in Item 2 hereof and between such persons
or any person with respect to any securities of the Company, including but
not limited to transfer or voting of any of the Common Stock, finder's fees,
joint ventures, loan or option arrangements, puts or calls, guarantees of
profits, division of profits or loss, or the giving or withholding of proxies.
Page 6 of 7 Pages
<PAGE>
ITEM 7. Material To Be Filed As Exhibits
Exhibit Number Description
99.1 Joint Acquisition Statement, as required
by Rule 13d-1(f)(1) of the Securities Act
of 1934.
99.2 Investment Agreement, dated as of
December 31, 1996, between the Company
and Five Arrows.
SIGNATURE
After reasonable inquiry and to the best of their knowledge and
belief, the undersigned certify that the information set forth in this
statement is true, complete and correct.
Dated: January 30, 1997
FIVE ARROWS REALTY SECURITIES L.L.C.
By: /s/ Matthew W. Kaplan
Matthew W. Kaplan
Manager
ROTHSCHILD REALTY INVESTORS II L.L.C.
By: /s/ Matthew W. Kaplan
Matthew W. Kaplan
Senior Vice President
Page 7 of 7 Pages
EXHIBIT 99.1
JOINT ACQUISITION STATEMENT
PURSUANT TO RULE 13D-1(f)1
The undersigned acknowledge and agree that the foregoing statement on
Schedule 13D, as amended, is filed on behalf of each of the undersigned and
that all subsequent amendments to this statement on Schedule 13D, as amended,
shall be filed on behalf of each of the undersigned without the necessity of
filing additional joint acquisition statements. The undersigned acknowledge
that each shall be responsible for the timely filing of such amendments, and
for the completeness and accuracy of the information concerning him or it
contained therein, but shall not be responsible for the completeness and
accuracy of the information concerning the other, except to the extent that
he or it knows or has reason to believe that such information is inaccurate.
January 30, 1997
FIVE ARROWS REALTY SECURITIES L.L.C.
By: /s/ Matthew W. Kaplan
Matthew W. Kaplan
Manager
ROTHSCHILD REALTY INVESTORS II L.L.C.
By: /s/ Matthew W. Kaplan
Matthew W. Kaplan
Senior Vice President
INVESTMENT AGREEMENT
between
LEXINGTON CORPORATE PROPERTIES, INC.
and
FIVE ARROWS REALTY SECURITIES L.L.C.
______________________
Dated as of December 31, 1996
______________________
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINED TERMS
SECTION 1.1 DEFINED TERMS 1
SECTION 1.2 TERMS DEFINED HEREIN 6
ARTICLE 2 SALE AND PURCHASE OF PREFERRED SHARES
SECTION 2.1 SALE OF PREFERRED SHARES 6
SECTION 2.2 PAYMENT FOR THE PREFERRED SHARES 7
SECTION 2.3 TRANSFER TAXES 7
ARTICLE 3 CLOSINGS
SECTION 3.1 CLOSINGS 7
SECTION 3.2 CLOSING DATES 7
SECTION 3.3 CANCELLATION OF SUBSEQUENT CLOSINGS 7
SECTION 3.4 AVAILABILITY FEE 8
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.1 DUE INCORPORATION AND STATUS OF THE COMPANY 9
SECTION 4.2 AUTHORITY 9
SECTION 4.3 VALID AGREEMENT OF THE COMPANY 9
SECTION 4.4 NO DEFAULT 9
SECTION 4.5 NO REQUIRED CONSENTS 10
SECTION 4.6 RESERVATION OF SHARES 10
SECTION 4.7 VALIDITY OF PREFERRED SHARES 10
SECTION 4.8 TRANSFERABILITY 10
SECTION 4.9 DISCLOSURE 10
SECTION 4.10 CAPITALIZATION 11
SECTION 4.11 LITIGATION 12
SECTION 4.12 ERISA 12
SECTION 4.13 ENVIRONMENTAL MATTERS 12
SECTION 4.14 INVESTMENT COMPANY 13
SECTION 4.15 TAXES 13
SECTION 4.16 INSURANCE 13
SECTION 4.17 AFFILIATED TRANSACTIONS 14
SECTION 4.18 LIABILITIES 14
SECTION 4.19 LIMITED WAIVER OF OWNERSHIP LIMITATIONS 14
SECTION 4.20 NO EVENT OF DEFAULT 15
SECTION 4.21 NO BROKERS 15
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
SECTION 5.1 ORGANIZATION 15
SECTION 5.2 ACCREDITED INVESTOR 15
SECTION 5.3 VALID AGREEMENTS OF THE INVESTOR 15
SECTION 5.4 NO DEFAULT 15
SECTION 5.5 OPPORTUNITY FOR INQUIRY 16
SECTION 5.6 MATERIALS 16
SECTION 5.7 KNOWLEDGE AND EXPERIENCE 16
SECTION 5.8 NO BROKERS 16
SECTION 5.9 INVESTMENT COMPANY 16
ARTICLE 6 COVENANTS AND UNDERTAKINGS
SECTION 6.1 CLOSINGS 16
SECTION 6.2 EXPENSES OF ROTHSCHILD REALTY INC. 16
SECTION 6.3 FEES AND EXPENSES OF SCHULTE ROTH & ZABEL LLP 17
ARTICLE 7 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE
INVESTOR TO CLOSE
SECTION 7.1 REPRESENTATIONS AND COVENANTS 17
SECTION 7.2 GOOD STANDING CERTIFICATES 17
SECTION 7.3 GOVERNMENTAL PERMITS AND APPROVALS 18
SECTION 7.4 LEGISLATION 18
SECTION 7.5 LEGAL PROCEEDINGS 18
SECTION 7.6 THIRD PARTY CONSENTS 18
SECTION 7.7 STOCK CERTIFICATES 18
SECTION 7.8 APPROVAL OF COUNSEL TO THE INVESTOR 18
SECTION 7.9 APPOINTMENT OF DIRECTOR 19
SECTION 7.10 CERTIFICATE OF DESIGNATION 19
SECTION 7.11 OPERATING AGREEMENT 19
SECTION 7.12 AGREEMENT AND WAIVER 19
SECTION 7.13 OPINION OF COUNSEL 19
SECTION 7.14 EXPENSES OF ROTHSCHILD REALTY INC. 19
SECTION 7.15 FEES AND EXPENSES OF SCHULTE ROTH & ZABEL LLP 19
ARTICLE 8 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE
COMPANY TO CLOSE
SECTION 8.1 REPRESENTATIONS AND COVENANTS 19
SECTION 8.2 GOVERNMENTAL PERMITS AND APPROVALS 20
SECTION 8.3 LEGAL PROCEEDINGS 20
SECTION 8.4 THIRD PARTY CONSENTS 20
SECTION 8.5 PURCHASE PRICE 20
SECTION 8.6 APPROVAL OF COUNSEL TO THE COMPANY 20
SECTION 8.7 OPINION OF COUNSEL 20
ARTICLE 9 ASSIGNMENT
SECTION 9.1 ASSIGNABILITY BY INVESTOR 21
SECTION 9.2 ASSIGNABILITY BY THE COMPANY 21
SECTION 9.3 BINDING AGREEMENT 21
ARTICLE 10 MISCELLANEOUS
SECTION 10.1 APPLICABLE LAW 21
SECTION 10.2 NOTICES 21
SECTION 10.3 ENTIRE AGREEMENT; AMENDMENT 21
SECTION 10.4 REMEDIES FOR BREACHES OF THIS AGREEMENT 22
SECTION 10.5 CONFIDENTIALITY 23
SECTION 10.6 LOCK-UP 24
SECTION 10.7 TERMINATION 24
SECTION 10.8 COUNTERPARTS 25
<PAGE>
INVESTMENT AGREEMENT
INVESTMENT AGREEMENT dated as of December 31, 1996
between Lexington Corporate Properties, Inc., a corporation
organized under the laws of the State of Maryland (the
"Company"), and Five Arrows Realty Securities L.L.C., a limited
liability company organized under the laws of the State of
Delaware (the "Investor").
WHEREAS, the Company wishes to issue the Preferred
Shares (as defined herein) to the Investor, and the Investor
wishes to purchase, acquire and accept the Preferred Shares from
the Company (the "Investment").
NOW THEREFORE, in consideration of the promises and the
mutual covenants herein contained and for other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
ARTICLE 1 DEFINED TERMS.
Section 1.1 Defined Terms. The following terms
shall, unless the context otherwise requires, have the meanings
set forth in this Section 1.1.
"Adverse Consequences" means all actions, suits,
proceedings, hearings, investigations, charges, complaints,
claims, demands, injunctions, judgments, orders, decrees,
rulings, damages, dues, penalties, fines, costs, amounts paid in
settlement, liabilities, obligations, taxes, liens, losses,
expenses, and fees, including court costs and reasonable
attorneys' fees and disbursements.
"Affiliate" means, with respect to any Person, (a) any
member of the Immediate Family of such Person or a trust
established for the benefit of such member, (b) any beneficiary
of a trust described in (a), (c) any Entity which, directly or
indirectly though one or more intermediaries, is deemed to be the
beneficial owner of 10% or more of the voting equity of the
Person for the purposes of Section 13(d) of the Exchange Act, (d)
any officer of the Person or any member of the Board of Directors
of the Person or (e) any Entity which, directly or indirectly
through one or more intermediaries, controls, is controlled by,
or is under common control with, such Person, including such
Person or Persons referred to in the preceding clauses (a) or
(d); provided, however, that none of the Investor, Rothschild
Realty Inc. or their respective Affiliates nor any of their
respective officers, directors, partners, members or Affiliates
nor any Preferred Director (as such term is defined in the
Certificate of Designation) shall be considered an Affiliate of
the Company or its Subsidiaries for purposes of this Agreement.
"Agreement" means this Investment Agreement, as
originally executed and as hereafter from time to time
supplemented, amended and restated.
"Agreement and Waiver" means the Agreement and Waiver,
dated as of the date of the first Closing, between the Company
and the Investor.
"Benefit Plan" means a defined benefit plan as defined
in Section 3(35) of ERISA that is subject to Title IV of ERISA
(other than a Multiemployer Plan) and in respect of which the
Company or any ERISA Affiliate is or within the immediately
preceding six (6) years was an "employer" as defined in
Section 3(5) of ERISA.
"Business Day" means any Monday, Tuesday, Wednesday,
Thursday or Friday which is not a day in which banking
institutions in New York City are authorized or obligated by law
or executive order to close.
"Certificate of Designation" means the Articles
Supplementary classifying 2,000,000 shares of preferred stock as
Class A Senior Cumulative Convertible Preferred Stock of the
Company and 2,000,000 shares of excess stock, par value $.01 per
share, as Excess Class A Preferred Stock of the Company, in the
form of Exhibit A attached hereto.
"Charter" means the Articles of Amendment and
Restatement of the Company as currently in effect.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time or any successor statute thereto.
"Common Stock" means the shares of the common stock,
par value $.01 per share, of the Company.
"Confidential Information" means the identity of the
Company in the context of the Investment, the existence and
contents of discussions regarding the Investment and information
concerning the assets, operations, business, records, projections
and prospects of the Company; provided, however, that the term
"Confidential Information" does not include information that (i)
is or becomes available to the public other than as a result of
disclosure by any of the Investor or Rothschild Realty Inc. or
any of their respective representatives, (ii) was available to
the Investor or Rothschild Realty Inc. or was within their
respective knowledge on a non-confidential basis prior to its
disclosure by the Company to them, (iii) becomes available to the
Investor or Rothschild Realty Inc., on a non-confidential basis
from a source other than the Company, provided that such source
is not known by them to be bound by a confidentiality agreement
with the Company or its representative or (iv) is independently
developed by the Investor or Rothschild Realty Inc. without
reference to the Confidential Information.
"Entity" means any general partnership, limited
partnership, corporation, joint venture, trust, business trust,
real estate investment trust, limited liability company,
cooperative or association.
"Environmental Claim" means any complaint, summons,
citation, notice, directive, order, claim, litigation,
investigation, judicial or administrative proceeding, judgment,
letter or other communication from any governmental agency,
department, bureau, office or other authority, or any third party
involving material violations of Environmental Laws or Releases
of Hazardous Materials.
"Environmental Laws" means the Comprehensive
Environmental Response, Compensation and Liability Act
("CERCLA"), 42 U.S.C. 9601 et seq., as amended; the Resource
Conservation and Recovery Act ("RCRA), 42 U.S.C. 6901 et seq., as
amended; the Clean Air Act ("CAA"), 42 U.S.C. 7401 et seq., as
amended; the Clean Water Act ("CWA"), 33 U.S.C. 1251 et seq., as
amended; the Occupational Safety and Health Act ("OSHA"), 29
U.S.C. 655 et seq., and any other federal, state, local or
municipal laws, statutes, regulations, rules or ordinances
imposing liability or establishing standards of conduct for
protection of the environment.
"Environmental Liabilities" means any monetary
obligations, losses, liabilities (including strict liability),
damages, punitive damages, consequential damages, treble damages,
costs and expenses (including all reasonable out-of-pocket fees,
disbursements and expenses of counsel, reasonable out-of-pocket
expert and consulting fees and reasonable out-of-pocket costs for
environmental site assessments, remedial investigation and
feasibility studies), fines, penalties, sanctions and interest
incurred as a result of any Environmental Claim filed by any
governmental authority or any third party which relate to any
violations of Environmental Laws, Remedial Actions, Releases of
Hazardous Materials from or onto (i) any assets, properties or
businesses presently or formerly owned by the Company, its
Subsidiaries or a predecessor in interest, or (ii) any facility
which received Hazardous Materials generated by the Company, its
Subsidiaries or a predecessor in interest.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended, and any successor statute of similar
import, and regulations thereunder, in each case as in effect
from time to time. References to sections of ERISA shall be
construed also to refer to any successor sections.
"ERISA Affiliate" means any (i) corporation which is a
member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code) as the Company,
(ii) partnership or other trade or business (whether or not
incorporated) under common control (within the meaning of
Section 414(c) of the Code) with the Company, or (iii) member of
the same affiliated service group (within the meaning of
Section 414(m) of the Code) as the Company, any corporation
described in clause (i) above or any partnership or trade or
business described in clause (ii) above.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"52-Week Trading High" means, for any date, the highest
per share closing price of the Common Stock for the 52-calendar
week period immediately preceding such date.
"GAAP" means United States Generally Accepted
Accounting Principles, as in effect from time to time.
"Hazardous Materials" means (a) any element, compound,
or chemical that is defined, listed or otherwise classified as a
contaminant, pollutant, toxic pollutant, toxic or hazardous
substance, extremely hazardous substance or chemical, hazardous
waste, medical waste, biohazardous or infectious waste, special
waste, or solid waste under Environmental Laws; (b) petroleum,
petroleum-based or petroleum-derived products; (c)
polychlorinated biphenyls; and (d) asbestos-containing materials.
"Immediate Family" means, with respect to any Person,
such Person's spouse, parents, parents-in-law, descendants,
nephews, nieces, brothers, sisters, brothers-in-law, sisters-in-
law, stepchildren, sons-in-law and daughters-in-law.
"Lien" means and includes any lien, security interest,
pledge, charge, option, right of first refusal, claim, mortgage,
lease, easement or any other encumbrance whatsoever.
"Material Adverse Effect," when used with reference to
events, acts, failures or omissions to act, or conduct of a
specified Person, means that such events, acts, failures or
omissions to act, or conduct would have a material adverse effect
on (i) the condition (financial or otherwise), earnings, or
business affairs of such Person and its consolidated
subsidiaries, considered as one enterprise, or (ii) the ability
of such Person to perform its obligations under the Operative
Instruments.
"Multiemployer Plan" means a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA and subject to Title IV of
ERISA which is, or within the immediately preceding six (6) years
was, contributed to by the Company or any ERISA Affiliate.
"Operating Agreement" means the Operating Agreement,
dated as of the initial Closing Date, between the Company and the
Investor, in the form of Exhibit B attached hereto.
"Operative Instruments" means this Agreement, the
Certificate of Designation, and the Operating Agreement.
"Permit" means a permit, license, consent, order or
approval by any federal, state or local governmental agency.
"Person" means any individual or Entity.
"Plan" means an employee benefit plan defined in
Section 3(3) of ERISA in respect of which the Company or any
ERISA Affiliate is, or within the immediately preceding six (6)
years was, an "employer" as defined in Section 3(5) of ERISA.
"Preferred Shares" means the shares of the Company
designated in the Certificate of Designation as Class A Senior
Cumulative Convertible Preferred Stock.
"REIT" means a real estate investment trust described
in Code Section 856.
"Release" means any spilling, leaking, pumping,
emitting, emptying, discharging, injecting, escaping, leaching,
migrating, dumping, or disposing of Hazardous Materials
(including the abandonment or discarding of barrels, containers
or other closed receptacles containing Hazardous Materials) into
the environment.
"Remedial Action" means all actions taken to (i) clean
up, remove, remediate, contain, treat, monitor, assess, evaluate
or in any other way address Hazardous Materials in the indoor or
outdoor environment; (ii) prevent or minimize a Release or
threatened Release of Hazardous Materials so they do not migrate
or endanger or threaten to endanger public health or welfare or
the indoor or outdoor environment; (iii) perform pre-remedial
studies and investigations and post-remedial operation and
maintenance activities; or (iv) any other actions authorized by
42 U.S.C. 9601.
"Reportable Event" means any of the events described in
Section 4043(b) of ERISA (other than events for which the notice
requirements have been waived).
"Representatives" means, with respect to any Person,
the directors, officers, employees, Affiliates, representatives
(including, but not limited to, financial advisors, attorneys and
accountants), agents or potential sources of financing of such
person.
"SDAT" means the State Department of Assessment and
Taxation of Maryland.
"SEC" means the Securities and Exchange Commission or
any successor regulatory authority responsible for enforcement
and oversight of the federal securities laws.
"Securities Act" means the Securities Act of 1933, as
amended.
"Subsidiary" of any Person or Entity means an Entity in
which such Person or Entity has the ability, whether by the
direct or indirect ownership of shares or other equity interests,
by contract or otherwise, to elect a majority of the directors of
a corporation or the trustees of a real estate investment trust,
to select the managing partner of a partnership, or otherwise to
select, or have the power to remove and then select, a majority
of those persons exercising governing authority over such Entity.
In the case of a limited partnership, the sole general partner,
all of the general partners to the extent each has equal
management control and authority, or the managing general partner
or managing general partners thereof shall be deemed to have
control of such partnership and, in the case of a trust other
than a real estate investment trust, any trustee thereof or any
Person having the right to select any such trustee shall be
deemed to have control of such trust.
"Termination Event" means (i) a Reportable Event with
respect to any Benefit Plan; (ii) the withdrawal of the Company
or any ERISA Affiliate from a Benefit Plan during a plan year in
which the Company or any ERISA Affiliate was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA; (iii) the
imposition of an obligation on the Company or any ERISA Affiliate
under Section 4041 of ERISA to provide affected parties written
notice of intent to terminate a Benefit Plan in a distress
termination described in Section 4041(c) of ERISA; or (iv) the
institution by the PBGC of proceedings to terminate a Benefit
Plan.
Section 1.2 Terms Defined Herein. In addition to
the terms defined in Section 1.1 above, the following terms
shall, unless the context otherwise requires, have the meanings
set forth in this Agreement in the section set forth next to such
term.
Defined Term Section
accredited investor 5.2
Breach 4.20
Closing 2.1
Excess Stock 4.10
Indemnified Party 10.4.3
Indemnifying Party 10.4.3
Liabilities 4.18
NYSE 3.2
1996 10-Qs 4.9
1995 10-K 4.2
1996 Proxy Statement 4.9
Preferred Stock 4.10
Purchase Price 2.1
Third Party Claim 10.4.3
ARTICLE 2 SALE AND PURCHASE OF PREFERRED SHARES.
Section 2.1 Sale of Preferred Shares. At the
closings provided for, and subject in all respects to the terms
and conditions set forth, in Article 3 and Section 10.7 hereof
(each a "Closing"): (i) the Company shall issue and sell an
aggregate of 2,000,000 Preferred Shares to the Investor, and
shall deliver to the Investor a stock certificate or certificates
representing all of the Preferred Shares, registered in the
Investor's or its nominee's name; and (ii) the Investor shall
purchase, acquire and accept such Preferred Shares for $12.50 per
share (the "Purchase Price") or an aggregate, if all such
2,000,000 Preferred Shares shall be issued, of approximately
twenty-five million dollars ($25,000,000.00).
Section 2.2 Payment for the Preferred Shares.
At the Closings and in accordance with, and subject to,
the provisions set forth in Article 3, the Purchase Price shall
be paid by the Investor to the Company in United States dollars
by wire transfer of funds immediately available in New York City
to such account(s) as the Company shall designate in a written
notice delivered to the Investor not less than five (5) Business
Days prior to the applicable Closing Date.
Section 2.3 Transfer Taxes. The Company shall pay
all stock transfer taxes, recording fees and other sales,
transfer, use, purchase or similar taxes resulting from the
Investment.
ARTICLE 3 CLOSINGS.
Section 3.1 Closings. Subject to the provisions of
Section 3.2 and Section 10.7, the Company shall be entitled to
designate up to three Closings, the first two of which shall
provide, in the Company's discretion, for the sale to the
Investor of at least 400,000 Preferred Shares each, and the last
of which shall provide for the sale to the Investor of the
remaining Preferred Shares, if any. Each Closing of the sale and
purchase of the Preferred Shares shall take place at the offices
of Schulte Roth & Zabel LLP, 900 Third Avenue, New York, New York
10022 at 10:00 a.m. New York City time.
Section 3.2 Closing Dates. The first Closing shall
occur on or before January 21, 1997, and each subsequent Closing,
if required, shall occur on a date designated by the Company upon
not less than ten (10) Business Days notice to the Investor, or,
in either case, at such other time and place as the Company and
the Investor mutually agree in writing (each, a "Closing Date");
provided, however, that if the sale of all of the Preferred
Shares as provided for herein shall not have occurred before the
one year anniversary date of this Agreement, the Closing for such
Preferred Shares as shall not have been previously so sold,
subject to the provisions of this Article 3 and Section 10.7,
shall occur on such anniversary date; provided, further, that,
without reducing the availability fee under Section 3.4, the
Company shall not be required to sell and the Investor shall not
be required to purchase, that number of Preferred Shares that
would cause the Company to violate Section 312 of the New York
Stock Exchange ("NYSE") Listed Company Manual.
Section 3.3 Cancellation of Subsequent Closings. In
the event that a Change of Control or a Put Event (each as
defined in the Certificate of Designation) occurs after any
Closing Date, but prior to the sale by the Company to the
Investor of all 2,000,000 Preferred Shares to be sold pursuant to
this Agreement, and the Investor notifies the Company that it
will tender into the Put Offer (as defined in the Certificate of
Designation), any further Closings shall be canceled and the
Company shall, within ten (10) days after receipt of such notice,
pay to the Investor by wire transfer in immediately available
funds an amount equal to the product of (i) $0.25, multiplied by
(ii) the difference between (x) 2,000,000 and (y) the number of
Preferred Shares which the Company has sold to the Investor
pursuant to this Agreement prior to the consummation of such
Change of Control or occurrence of such Put Event. In the event
that a REIT-Put Event (as defined in the Certificate of
Designation) occurs after any Closing Date, but prior to the sale
by the Company to the Investor of all 2,000,000 Preferred Shares
to be sold pursuant to this Agreement, and the Investor notifies
the Company that it will tender into the REIT-Put Offer (as
defined in the Certificate of Designation), any further Closings
shall be canceled and the Company shall, within ten (10) days
after receipt of such notice, pay to the Investor by wire
transfer in immediately available funds an amount equal to the
product of (1) the greater of (x) $1.25, (y) the product of 0.05
multiplied by the Current Market Price (as defined in the
Certificate of Designation) referred to in Section 8(c)(ii) of
the Certificate of Designation, and (z) the difference between
the 52-Week Trading High and $12.50, multiplied by (2) the
difference between (x) 2,000,000 and (y) the number of Preferred
Shares which the Company has sold to the Investor pursuant to
this Agreement prior to the consummation of such Change of
Control or occurrence of such Put Event.
Section 3.4 Availability Fee. In the event that
the Company has determined not to sell all 2,000,000 Preferred
Shares to the Investor on or prior to April 1, 1997, the Company
shall pay, on each of April 1, 1997, May 1, 1997 and June 1,
1997, to the Investor by wire transfer in immediately available
funds, an amount equal to the product of (i) 0.0015, multiplied
by (ii) the difference between (x) $25,000,000, multiplied by (y)
the aggregate Purchase Price paid by the Investor in respect of
Preferred Shares which the Company has sold to the Investor
pursuant to this Agreement prior to each such date. In the event
that the Company has determined not to sell all 2,000,000
Preferred Shares to the Investor on or prior to July 1, 1997, the
Company shall pay, on each of July 1, 1997, August 1, 1997 and
September 1, 1997, to the Investor by wire transfer in
immediately available funds, an amount equal to the product of
(i) 0.0025, multiplied by (ii) the difference between (x)
$25,000,000 and (y) the aggregate Purchase Price paid by the
Investor in respect of Preferred Shares which the Company has
sold to the Investor pursuant to this Agreement prior to each
such date. In the event that the Company has determined not to
sell all 2,000,000 Preferred Shares to the Investor on or prior
to October 1, 1997, the Company shall pay, on each of October 1,
1997, November 1, 1997 and December 1, 1997, to the Investor by
wire transfer in immediately available funds, an amount equal to
the product of (i) 0.0035, multiplied by (ii) the difference
between (x) $25,000,000 and (y) the aggregate Purchase Price paid
by the Investor in respect of Preferred Shares which the Company
has sold to the Investor pursuant to this Agreement prior to each
such date. No availability fee shall be required to be paid on
any date after which (i) the Company shall have sold all such
2,000,000 Preferred Shares to the Investor pursuant to this
Agreement, (ii) all subsequent Closings have been canceled
pursuant to Section 3.3 of this Agreement (iii) this Agreement
shall have been terminated pursuant to Section 10.7, or (iv) the
fee contemplated by Section 8.7 of the Operating Agreement shall
have been paid.
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to the
Investor as follows:
Section 4.1 Due Incorporation and Status of the
Company.
Section 4.1.1 Due Incorporation. The Company and
each of its Subsidiaries have been duly incorporated or formed,
as the case may be, and are validly existing and in good standing
under the laws of their respective states of organization and are
qualified or licensed, and in good standing, as a foreign
corporation authorized to do business in each other jurisdiction
in which their ownership of properties or their conduct of
business requires such qualification or licensing, except where
the failure to be so qualified or licensed, or in good standing,
as a foreign corporation would not have a Material Adverse Effect
on the Company.
Section 4.1.2 REIT Status. As of the date
hereof, the Company qualifies as a REIT under the Code and has
taken no action or omitted to take any action, the effect of
which could reasonably be likely to disqualify the Company as a
REIT under the Code.
Section 4.2 Authority. The Company has the power
and authority to own, lease and operate its properties, directly
or indirectly, and to conduct its business as presently conducted
and as described in the Annual Report on Form 10-K as filed by
the Company under the Exchange Act for the year ended December
31, 1995 (the "1995 10-K").
Section 4.3 Valid Agreement of the Company. The
execution, delivery and performance of this Agreement, the
Agreement and Waiver and the Operating Agreement have each been
duly authorized by the Company. This Agreement has been, and the
Agreement and Wavier and the Operating Agreement, upon the
Closing, will be duly executed and delivered by the Company.
This Agreement represents and the Agreement and Waiver and the
Operating Agreement, upon the Closing will represent, the valid
and binding obligations of the Company, each enforceable against
the Company in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general
principles of equity (whether enforcement is sought by
proceedings in equity or at law).
Section 4.4 No Default. The execution and delivery
of the Operative Instruments by the Company and the performance
by the Company of its obligations thereunder do not (or if not
yet executed, upon the execution and delivery thereof will not)
(a) violate the Charter or By-Laws of the Company; (b) violate or
constitute a breach of or default under any mortgage, indenture,
loan agreement, promissory note or other material agreement to
which the Company or any of its Subsidiaries is a party, or by
which any of them is bound, or to which any property of the
Company or any of its Subsidiaries is subject; or (c) conflict
with or violate any law or any regulation, rule, order or decree
of any governmental body, court or administrative agency having
jurisdiction over the Company or any of its Subsidiaries or the
properties of any of them; except that Preferred Shares
representing in excess of 20% of the Company's voting power
outstanding at the time of issuance or 20% of the number of
shares of Common Stock before such issuance may not be sold to
the Investor hereunder without violating Section 312 of the NYSE
Listed Company Manual unless the approval of the holders of a
majority of the Common Stock is obtained prior thereto.
Section 4.5 No Required Consents. The execution and
delivery of the Operative Instruments by the Company and the
performance by the Company of its obligations thereunder do not
legally or contractually require any filing or registration with,
or the receipt of any consent by, any governmental or regulatory
authority by the Company or its Subsidiaries other than any which
have already been obtained or waived.
Section 4.6 Reservation of Shares . The Company has
duly reserved solely for purposes of issuance upon conversion of
the Preferred Shares the shares of Common Stock into which the
Preferred Shares may be converted from time to time.
Section 4.7 Validity of Preferred Shares. The
Company has duly authorized the issuance and delivery of
2,000,000 shares of Preferred Stock pursuant to this Agreement
and, upon delivery thereof and receipt by the Company of the
Purchase Price therefor, such shares of Preferred Stock will be
duly authorized, validly issued, fully paid and nonassessable.
The Preferred Shares have the dividend, conversion, voting and
other terms set forth in the Certificate of Designation and, to
the extent not inconsistent therewith, as set forth in the
Charter and By-Laws of the Company and the Maryland General
Corporation Law.
Section 4.8 Transferability. Upon the issuance and
sale of the Preferred Shares by the Company to the Investor
pursuant to this Agreement, the Preferred Shares shall be fully-
registered shares under the Securities Act. Upon such issuance
and sale, such Preferred Shares shall be freely transferable by
the Investor without the requirement that (i) such Preferred
Shares be registered or qualified pursuant to any federal or
state securities law or (ii) the Investor comply with the
prospectus delivery requirements of the Securities Act; provided,
however, that the transfer of such Preferred Shares may be
subject to the restrictions on transferability imposed by the
Securities Act on "affiliates" or "control persons" (as such
terms are defined by the Securities Act). Upon the conversion of
the Preferred Shares into shares of Common Stock, pursuant to the
provisions of the Certificate of Designation, such shares of
Common Stock shall be fully-registered shares under the
Securities Act. Upon such conversion, such shares of Common
Stock shall be freely transferable by the Investor without the
requirement that (i) such shares of Common Stock be registered or
qualified pursuant to any federal or state securities law or (ii)
the Investor comply with the prospectus delivery requirements of
the Securities Act; provided, however, that the transfer of such
shares of Common Stock may be subject to the restrictions on
transferability imposed by the Securities Act on "affiliates" or
"control persons" (as such terms are defined by the Securities
Act).
Section 4.9 Disclosure. The Company has heretofore
delivered to the Investor the Proxy Statement relating to its
1996 Annual Meeting of Shareholders (the "1996 Proxy Statement"),
the 1995 10-K, and the Quarterly Reports on Form 10-Q as filed by
the Company under the Exchange Act for the quarters ended March
31, 1996, June 30, 1996 and September 30, 1996 (the "1996 10-
Qs").
Section 4.9.1 No Misstatement or Omission. At
the time of filing, the 1996 Proxy Statement, the 1995 10-K and
the 1996 10-Qs complied in all material respects with the
requirements of the Exchange Act and the rules and regulations
promulgated by the SEC thereunder. The 1996 Proxy Statement, the
1995 10-K and the 1996 10-Qs do not, as of their respective
dates, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
in order to make the statements made, in light of the
circumstances under which they were made, not misleading.
Section 4.9.2 Financial Statements. The
financial statements, including the notes thereto, and supporting
schedules included in the 1995 10-K and the 1996 10-Qs have been
prepared in conformity with GAAP applied on a consistent basis
(except as otherwise noted therein and except that the quarterly
statements are subject to standard year-end adjustments) and
present fairly the financial position of the Company and its
Subsidiaries as of the dates indicated and the results of their
operations for the periods shown.
Section 4.9.3 Subsequent Events. Since the
respective dates as of which information is given in the 1995 10-
K and the 1996 10-Qs, except as otherwise stated therein or in
the press releases listed on Schedule 4.9.3 hereto and other than
changes in general economic conditions or industry conditions,
there has not been any change in the condition (financial or
otherwise) or in the earnings or business affairs of the Company
and its Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, which could
reasonably be likely to have a Material Adverse Effect on the
Company.
Section 4.10 Capitalization. The authorized capital
stock of the Company consists of: (i) 40,000,000 shares of
Common Stock; (ii) 10,000,000 shares of preferred stock, par
value $.0001 per share (the "Preferred Stock"); and (iii)
40,000,000 shares of excess stock, par value $.0001 per share
(the "Excess Stock"). As of the date hereof, (i) 9,426,900, 0,
and 0 shares of the Common Stock, the Preferred Stock and the
Excess Stock, respectively, were validly issued and outstanding,
fully paid and nonassessable; and (ii) 3,820,443, 0, and 0 shares
of the Common Stock, the Preferred Stock and the Excess Stock,
respectively, were reserved for issuance as set forth on Schedule
4.10 hereto. Except as set forth in the preceding sentence of
this Section 4.10 or as set forth on Schedule 4.10 hereto, as of
the date hereof there are no other shares of capital stock of the
Company outstanding and no other outstanding options, warrants,
convertible or exchangeable securities, subscriptions, rights
(including preemptive rights), stock appreciation rights, calls
or commitments of any character whatsoever to which the Company
is a party or may be bound requiring the issuance or sale of
shares of any capital stock of the Company, and there are no
contracts or other agreements by which the Company is or may
become bound to issue additional shares of its capital stock or
any options, warrants, convertible or exchangeable securities,
subscriptions, rights (including preemptive rights), stock
appreciation rights, calls or commitments of any character
whatsoever relating to such shares.
Section 4.11 Litigation. Except as set forth on
Schedule 4.11 hereto or in the 1995 10-K or the 1996 10-Qs, the
Company has not received any written notice of any outstanding
judgments, rulings, orders, writs, injunctions, awards or decrees
of any court or any foreign, federal, state, county or local
government or any other governmental, regulatory or
administrative agency or authority or arbitral tribunal against
or involving the Company or any of its Subsidiaries. Neither the
Company nor any of its Subsidiaries is a party to, or to the
knowledge of the Company, threatened with, any litigation or
judicial, governmental, regulatory, administrative or arbitration
proceeding which, if decided adversely to their respective
interests could be reasonably likely to have an adverse effect
upon the transactions contemplated hereby or a Material Adverse
Effect on the Company.
Section 4.12 ERISA. (i) Each Plan is in substantial
compliance with the applicable provisions of ERISA and the Code,
(ii) no Termination Event has occurred nor is reasonably expected
to occur with respect to any Benefit Plan, (iii) the most recent
annual report (Form 5500 Series) with respect to each Plan,
including Schedule B (Actuarial Information) thereto, copies of
which have been filed with the Internal Revenue Service, is
complete and correct in all material respects and fairly presents
the funding status of such Benefit Plan, and since the date of
such report there has been no material adverse change in such
funding status, (iv) no Benefit Plan had an accumulated or waived
funding deficiency or permitted decreases which would create a
deficiency in its funding standard account within the meaning of
Section 412 of the Code at any time during the previous 60
months, and (v) no Lien imposed under the Code or ERISA exists or
is likely to arise on account of any Benefit Plan within the
meaning of Section 412 of the Code. Neither the Company nor any
of its ERISA Affiliates has incurred any withdrawal liability
under ERISA with respect to any Multiemployer Plan, and the
Company is not aware of any facts indicating that the Company or
any of its ERISA Affiliates may in the future incur any such
withdrawal liability. Except as required by Section 4980B of the
Code, the Company does not maintain a welfare plan (as defined in
Section 3(1) of ERISA) which provides benefits or coverage after
a participant's termination of employment. Neither the Company
nor any of its ERISA Affiliates has incurred any liability under
the Worker Adjustment and Retraining Notification Act. All Plans
in existence as of the date hereof are set forth on Schedule 4.12
hereto.
Section 4.13 Environmental Matters. Except as set
forth in Schedule 4.13 hereto, to the knowledge of the Company:
(a) The operations and properties of the Company and
its Subsidiaries are in material compliance with Environmental
Laws;
(b) There has been no Release (i) at any assets,
properties or businesses currently owned or operated by the
Company, any of its Subsidiaries or any predecessor in interest;
(ii) from adjoining properties or businesses; or (iii) from or
onto any facilities which received Hazardous Materials generated
by the Company, any of its Subsidiaries or any predecessor in
interest, in each case that would result in any Environmental
Liabilities affecting the Company;
(c) No Environmental Claims have been asserted against
the Company, any of its Subsidiaries or any predecessor in
interest which is or has been an Affiliate of the Company and
neither the Company nor any of its Subsidiaries has notice of any
threatened or pending Environmental Claims;
(d) No Environmental Claims have been asserted against
any facilities that may have received Hazardous Materials
generated by the Company, any of its Subsidiaries or any
predecessor in interest which is or has been an Affiliate of the
Company;
(e) The Company or its predecessors have conducted
Phase 1 Environmental Site Assessments on all of the assets,
properties and businesses owned or operated by the Company and
its Subsidiaries and the Company has delivered to the Investor
true and complete copies of all material environmental reports,
studies or investigations in their possession regarding any
Environmental Liabilities at the assets, properties or businesses
of the Company or any of its Subsidiaries; and
(f) None of the assets, properties or businesses owned
or operated by the Company or any of its Subsidiaries are located
in "wetlands" regulated under Environmental Laws and no dredged
or fill materials have been placed, discharged or deposited in
any wetlands located at any asset, property or business owned or
operated by the Company or any of its Subsidiaries except in
either case where such was in compliance, in all material
respects, with Environmental Laws.
Section 4.14 Investment Company. The Company is not,
and upon the issuance and sale of the Preferred Shares as herein
contemplated will not be, an "investment company" or an Entity
"controlled" by an "investment company" as such terms are defined
in the Investment Company Act of 1940, as amended.
Section 4.15 Taxes. The Company has filed all
federal, state, local or foreign tax returns that are required to
be filed or has duly requested extensions thereof and has paid
all taxes required to be paid by it and any related assessments,
fines or penalties, except for any such tax, assessment, fine or
penalty that is being contested in good faith and by appropriate
proceedings or where the failure to make any such filing or
payment would not be reasonably expected to have a Material
Adverse Effect on the Company; and adequate charges, accruals and
reserves have been provided for in the financial statements of
the Company in respect of all material federal, state, local and
foreign taxes for all periods as to which the tax liability of
the Company has not been finally determined or remains open to
examination by applicable taxing authorities. The Company is not
currently under review by any federal or state taxing authority.
Section 4.16 Insurance. The Company carries or is
entitled to the benefits of insurance in such amounts and
covering such risks as is reasonably sufficient under the
circumstances and is consistent with comparable businesses and
all such insurance is in full force and effect.
Section 4.17 Affiliated Transactions. Except as
disclosed in the 1995 10-K, the 1996 10-Qs or the 1996 Proxy
Statement or as generally described on Schedule 4.17, Schedule
4.17 sets forth a description of all transactions with, or
payments to, any Affiliate in excess of $30,000 in the aggregate
(other than reimbursement of expenses and compensation payable to
employees or officers or directors' fees payable to the Company's
directors). Except as set forth on Schedule 4.17 or as disclosed
in the 1995 10-K, the 1996 10-Qs or the 1996 Proxy Statement,
neither the Company, nor any officer or director of the Company,
nor any of its Subsidiaries, or any Affiliate of any of the
foregoing, or, to the knowledge of the Company, any member of the
Immediate Family of any of the foregoing: (i) owns, directly or
indirectly, any interest in (excepting not more than five (5)
percent stock holdings held solely for investment purposes in
securities of any Person which are listed on any national
securities exchange or regularly traded in the over-the-counter
market) or is an owner, sole proprietor, shareholder, partner,
director, officer, employee, consultant or agent of any person
which is a competitor, lessor, lessee, customer or supplier of
the Company or any of its Subsidiaries; (ii) owns, directly or
indirectly, in whole or in part, any property, patent, trademark,
service mark, trade name, copyright, franchise, invention,
permit, license or secret or confidential information which the
Company or any of its Subsidiaries is using or the use of which
is necessary for the business of the Company or any of its
Subsidiaries; or (iii) has any cause of action or other suit,
action or claim whatsoever against, or owes any amount to, the
Company or any of its Subsidiaries, in each case (i) through
(iii) except for those in the ordinary course of business.
Section 4.18 Liabilities. Except as set forth on
Schedule 4.18 or as disclosed in the 1995 10-K, the 1996 10-Qs or
the 1996 Proxy Statement and except for obligations which the
Company may have under the terms of its leases with tenants, to
the knowledge of the Company, the Company and its Subsidiaries,
as of the date of this Agreement, do not have any material direct
or indirect indebtedness, liability, claim, loss, damage,
deficiency or obligation, fixed or unfixed, choate or inchoate,
liquidated or unliquidated, secured or unsecured, subordinated or
unsubordinated, matured or unmatured, accrued, absolute,
contingent or otherwise, including, without limitation,
liabilities on account of taxes, other governmental, regulatory
or administrative charges or lawsuits brought, whether or not of
a kind required by GAAP to be set forth on a financial statement
(collectively, "Liabilities"), that were not adequately reflected
or reserved against on the Balance Sheet of the Company (less
Liabilities that have been discharged in the ordinary course of
business since the date of the Balance Sheet of the Company).
Section 4.19 Limited Waiver of Ownership Limitations.
Subject to the terms and conditions set forth in the Agreement
and Waiver, the Board of Directors of the Company, acting
pursuant to Section subparagraph (a)(9) of Article NINTH of the
Charter, has properly voted to exempt the Investor, and has
agreed to exempt any successor in interest to the Investor that
is an Affiliate of the Investor, from the Ownership Limit imposed
by the Charter; provided, however, that such waiver shall not be
effective, unless the terms and conditions of the Agreement and
Waiver have been satisfied, or to exempt any Person from such
ownership limits imposed by the Charter if the ownership of such
interest by such Person would cause the Company to fail to
qualify as a REIT.
Section 4.20 No Event of Default. No event has
occurred and is continuing and no condition exists which
constitutes a material breach, an event of default, or otherwise
gives any other party the rights to accelerate or require payment
of any obligation, or with the passage of time would constitute
such an event (a "Breach"), under any material agreement or
instrument to which the Company or any of its Subsidiaries is a
party; provided, however, that to the extent that a Breach exists
with respect to an immaterial agreement or instrument, which
under a cross-default, cross-acceleration or comparable provision
creates a Breach under a material agreement, such Breach shall be
deemed to be material for purposes of this Section 4.20.
Section 4.21 No Brokers. In connection with the
Investment, the Company has not retained or become obligated to
any broker or finder other than Rothschild Realty Inc.
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE INVESTOR.
In order to induce the Company to enter into this
Agreement and to consummate the transactions contemplated hereby,
the Investor hereby represents and warrants to, and covenants
with, the Company as follows:
Section 5.1 Organization. The Investor has been
duly organized and is validly existing and in good standing under
the laws of the State of Delaware.
Section 5.2 Accredited Investor. The Investor is an
"accredited investor," as such term is defined in Rule 501(a) of
Regulation D promulgated under the Securities Act.
Section 5.3 Valid Agreements of the Investor. The
Investor has all right, power and authority to enter into this
Agreement, the Agreement and Waiver and the Operating Agreement
and to consummate the transactions contemplated hereby and
thereby. Each of the Operative Instruments to which the Investor
is a party has been duly authorized, executed and delivered by
the Investor, and constitutes a legal, valid and binding
obligation of the Investor, enforceable against the Investor in
accordance with its terms.
Section 5.4 No Default. The execution and delivery
of this Agreement and the Operating Agreement by the Investor and
the performance by the Investor of its obligations thereunder do
not (or if not yet executed, upon the execution and delivery
thereof will not) (a) violate the organizational documents of the
Investor; (b) violate or constitute a breach of or default under
any mortgage, indenture, loan agreement, promissory note or other
agreement to which the Investor is a party, or by which the
Investor is bound, or to which any property of the Investor is
subject; or (c) conflict with or violate any law or any
regulation, rule, order or decree of any governmental body, court
or administrative agency having jurisdiction over the Investor or
its properties except with respect to clauses (b) and (c) where
such conflict, breach, default or violation would not reasonably
be expected to have a Material Adverse Effect on the Investor.
Section 5.5 Opportunity for Inquiry. The Investor
has had a reasonable opportunity to ask questions of and to
receive answers from representatives of the Company regarding the
business, management and financial affairs of the Company; it
being understood that no inquiry or investigation shall affect
the Investor's ability to rely on any representation or warranty
of the Company or the conditions to the obligations of the
Investor under this Agreement.
Section 5.6 Materials. The Investor acknowledges
that all documents, agreements, instruments, records, and books
that it has requested pertaining to the Company and its
businesses and financial affairs have been made available to the
Investor and the Investor's attorneys, accountants and advisors
for inspection. The Investor further acknowledges that it has
received copies of the 1996 Proxy Statement, the 1995 10-K and
the 1996 10-Qs.
Section 5.7 Knowledge and Experience. The Investor
has such knowledge and experience in financial and business
matters that the Investor is capable of evaluating the merits and
risks involved in connection with the Investment.
Section 5.8 No Brokers. In connection with the
Investment, the Investor has not retained or become obligated to
any broker or finder.
Section 5.9 Investment Company. The Investor is
not, and upon the purchase of the Preferred Shares as herein
contemplated, will not be, an "investment company" or an Entity
"controlled" by and "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended.
ARTICLE 6 COVENANTS AND UNDERTAKINGS.
Section 6.1 Closings. The Company shall use its
reasonable best efforts to comply with all conditions precedent
to the Closings, including, without limiting the foregoing,
causing the Certificate of Designation to have been filed with
the SDAT and become effective.
Section 6.2 Expenses of Rothschild Realty Inc. The
Company agrees to reimburse Rothschild Realty Inc. at each
Closing for its reasonable out-of-pocket expenses incurred in
connection with this transaction documented to the reasonable
satisfaction of the Company. All such amounts paid pursuant to
this Section 6.2 shall be paid by wire transfer of funds
immediately available in New York City to such account(s) as
Rothschild Realty Inc. shall designate in a written notice
delivered to the Company not less than two Business Days prior to
the initial Closing Date; provided, however, that the Investor,
on behalf of the Company, may directly pay out of the Purchase
Price payable hereunder such fees and expenses to Rothschild
Realty Inc.; provided, further, that the aggregate of all such
expenses including, without limitation, the fees and expenses of
Schulte Roth & Zabel LLP provided for in Section 6.3 hereof,
shall not exceed $100,000 through the initial Closing Date,
$15,000 (plus any amount of the $100,000 remaining) through the
second Closing Date, if applicable, and $15,000 (plus any amount
of the $100,000 or $15,000 remaining) through the third Closing
Date, if applicable.
Section 6.3 Fees and Expenses of Schulte Roth &
Zabel LLP. Subject to the limitation set forth in Section
6.2, the Company agrees to pay to Schulte Roth & Zabel LLP,
counsel to the Investor, at each Closing reasonable fees and
expenses in connection with services rendered and expenses
incurred in connection with the issuance and sale of Preferred
Shares to the Investor. All such amounts paid pursuant to this
Section 6.3 shall be paid by wire transfer of funds immediately
available in New York City to such account(s) as Schulte Roth &
Zabel LLP shall designate in a written notice delivered to the
Company not less than two Business Days prior to each Closing
Date; provided, however, that the Investor, on behalf of the
Company, may directly pay out of the Purchase Price hereunder
such fees and expenses to Schulte Roth & Zabel LLP.
ARTICLE 7 CONDITIONS PRECEDENT TO THE OBLIGATION
OF THE INVESTOR TO CLOSE.
The obligation of the Investor to complete each Closing is
subject, at its option, to the fulfillment on or prior to the
related Closing Date (unless otherwise provided) the following
conditions, any one (1) or more of which may be waived by it in
its sole discretion:
Section 7.1 Representations and Covenants. The
representations and warranties of the Company contained in this
Agreement shall be true, complete and accurate in all material
respects on and as of the related Closing Date with the same
force and effect as though made on and as of the related Closing
Date, except for changes contemplated or permitted by this
Agreement and except to the extent that any representation or
warranty is made as of a specified date, in which case, such
representation and warranty shall be true and correct in all
material respects as of such date. The Company shall have
performed and complied in all material respects with all
covenants and agreements required by this Agreement to be
performed or complied with by the Company on or prior to the
related Closing Date. The Company shall have delivered to the
Investor a certificate, dated the related Closing Date and signed
by the President and Chief Financial Officer of the Company, to
the foregoing effect and stating that all conditions to the
Investor's obligations hereunder have been satisfied.
Section 7.2 Good Standing Certificates. The Company
shall have delivered to the Investor: (i) copies of its Charter,
including all amendments thereto, certified by the SDAT; (ii) a
certificate from the SDAT to the effect that the Company is in
good standing and subsisting in such jurisdiction and listing all
charter documents of the Company on file in such state; (iii) a
certificate from the Secretary of State or other appropriate
official in each State in which the Company is qualified to do
business to the effect that the Company is in good standing in
such State; and (iv) a certificate as to the Tax status of the
Company from the appropriate official in Maryland and each State
in which the Company is qualified to do business, in each case,
dated as of a date within reasonable proximity to the related
Closing Date.
Section 7.3 Governmental Permits and Approvals. Any
and all Permits necessary for the consummation of the
transactions contemplated hereby shall have been obtained and a
copy thereof shall have been delivered to the Investor.
Section 7.4 Legislation. No legislation shall have
been proposed or enacted, and no statute, law, ordinance, code,
rule or regulation shall have been adopted, revised or
interpreted, by any foreign, federal, state, county or local
government or any other governmental, regulatory or
administrative agency or authority, which would require, upon or
as a condition to the acquisition of the Preferred Shares by the
Investor, the divestiture or cessation of the conduct of any
business presently conducted by the Company, on the one hand, or
by the Investor, on the other hand, or which, in the good faith
judgment of the Investor, may, individually or in the aggregate,
have a Material Adverse Effect on it or on the Company in the
event that the transactions contemplated hereby are consummated.
Section 7.5 Legal Proceedings. No suit, action,
claim, proceeding or investigation shall have been instituted or
threatened by or before any court or any foreign, federal, state,
county or local government or any other governmental, regulatory
or administrative agency or authority seeking to restrain,
prohibit or invalidate the issuance or sale of the Preferred
Shares to the Investor hereunder or the consummation of the
transactions contemplated hereby or to seek damages in connection
with such transactions.
Section 7.6 Third Party Consents. All consents,
waivers, licenses, variances, exemptions, franchises, permits,
approvals and authorizations from parties to any contracts and
other agreements (including any amendments and modifications
thereto) with the Company which may be required in connection
with the performance by the Company of its obligations under this
Agreement or to assure such contracts and other agreements
continue in full force and effect after the consummation of the
transactions contemplated hereby (without any Breach by the
Company or any of its Subsidiaries) shall have been obtained.
Section 7.7 Stock Certificates. The Company shall
have delivered to the Investor the stock certificate or
certificates representing the Preferred Shares to be purchased on
such Closing Date in accordance with Section 3.1 hereof,
registered in the Investor's or it's nominee's name.
Section 7.8 Approval of Counsel to the Investor.
The Company shall furnish to counsel for the Investor such
certificates and documents as may reasonably be requested by
counsel to the Investor to enable such counsel to pass on or
evaluate the satisfaction of the conditions set forth in this
Article 7. All actions and proceedings hereunder and all
documents and other papers required to be delivered by the
Company hereunder or in connection with the consummation of the
transactions contemplated hereby, and all other related matters,
shall have been reasonably approved by Schulte Roth & Zabel LLP,
counsel to the Investor, as to their form and substance.
Section 7.9 Appointment of Director. Prior to or
concurrent with the initial Closing, the nominee designated by
the Investor as a director of the Company shall have been elected
and qualified to become a member of the Board of Directors of the
Company, and prior to and concurrent with any second Closing or
third Closing, the nominee designated by the Investor as a
director of the Company shall be continuing to serve as a member
of the Board of Directors of the Company.
Section 7.10 Certificate of Designation. The
Certificate of Designation shall be effective.
Section 7.11 Operating Agreement. The Company shall
have executed and delivered to the Investor the Operating
Agreement.
Section 7.12 Agreement and Waiver. The Company
shall have executed and delivered to the Investor the Agreement
and Waiver.
Section 7.13 Opinion of Counsel. The Investor shall
have received favorable opinion letters from Paul Hastings,
Janofsky & Walker LLP and Piper & Marbury to the effect of the
matters contained in Sections 4.1.1, 4.1.2, 4.2, 4.3, 4.4, 4.5,
4.6, 4.7, 4.8, the first sentence of 4.10, 4.11, 4.14, and 4.19
hereof.
Section 7.14 Expenses of Rothschild Realty Inc.
Rothschild Realty Inc. shall have been reimbursed for the
expenses to be paid by the Company as described under Section
6.2.
Section 7.15 Fees and Expenses of Schulte Roth &
Zabel LLP. Schulte Roth & Zabel LLP shall have received the fees
and disbursements to be paid by the Company as described under
Section 6.3.
ARTICLE 8 CONDITIONS PRECEDENT TO THE OBLIGATION OF
THE COMPANY TO CLOSE.
The obligation of the Company to complete each Closing is
subject, at its option, to the fulfillment on or prior to the
related Closing Date of the following conditions, any one (1) or
more of which may be waived it in its sole discretion:
Section 8.1 Representations and Covenants. The
representations and warranties of the Investor contained in this
Agreement shall be true, complete and accurate in all material
respects on and as of the related Closing Date with the same
force and effect as though made on and as of the related Closing
Date, except for changes contemplated or permitted by this
Agreement and except to the extent that any representation or
warranty is made as of a specified date, in which case, such
representation and warranty shall be true, complete and accurate
in all material respects as of such date. The Investor shall
have performed and complied in all material respects with all
covenants and agreements required by this Agreement to be
performed or complied with by it on or prior to the related
Closing Date. The Investor shall have delivered to the Company a
certificate, dated the related Closing Date and signed by an
officer of the Investor to the foregoing effect and stating that
all conditions to the Company's obligations hereunder have been
satisfied.
Section 8.2 Governmental Permits and Approvals. Any
and all Permits necessary for the consummation of the
transactions contemplated hereby shall have been obtained.
Section 8.3 Legal Proceedings. No suit, action,
claim, proceeding or investigation shall have been instituted or
threatened before any court or any foreign, federal, state,
county or local government or any other governmental, regulatory
or administrative agency or authority seeking to restrain,
prohibit or invalidate the sale of the Preferred Shares to the
Investor hereunder or the consummation of the transactions
contemplated hereby or to seek damages in connection with such
transactions.
Section 8.4 Third Party Consents. All consents,
waivers, licenses, variances, exemptions, franchises, permits,
approvals and authorizations from parties to any contracts and
other agreements (including any amendments and modifications
thereto) with the Investor which may be required in connection
with the performance by the Investor of its obligations under
this Agreement shall have been obtained.
Section 8.5 Purchase Price. The Investor shall have
tendered payment for the Preferred Shares in the amount and in
the manner specified in Section 3.1 hereof.
Section 8.6 Approval of Counsel to the Company. The
Investor shall furnish to counsel for the Company such
certificates and documents as may reasonably be requested by
counsel to the Company to enable such counsel to pass on or
evaluate the satisfaction of the conditions set forth in this
Article 8. All actions and proceedings hereunder and all
documents or other papers required to be delivered by the
Investor hereunder or in connection with the consummation of the
transactions contemplated hereby, and all other related matters,
shall be subject to the reasonable approval of Paul Hastings,
Janofsky & Walker LLP counsel to the Company, as to their form
and substance.
Section 8.7 Opinion of Counsel. The Company shall
have received a favorable opinion letter from Schulte Roth &
Zabel LLP to the effect of the matters contained in Section 5.1,
5.3, 5.4(a) and 5.9 hereof.
ARTICLE 9 ASSIGNMENT.
Section 9.1 Assignability by Investor. The Investor
may, without the consent or approval of the Company, assign its
rights and obligations under this Agreement to a Person to whom
the Investor assigns its interest in the Preferred Shares, in
proportion to the percentage of Preferred Shares transferred,
provided that (i) such assignee agrees in writing to be bound by
the terms of this Agreement and (ii) no such assignment shall be
valid as to any Person who purchases less than ten percent (10%)
of the outstanding Preferred Shares.
Section 9.2 Assignability by the Company. Without
the prior written consent of the Investor, in the sole and
absolute discretion of the Investor, the Company may not assign
or delegate its rights or obligations hereunder.
Section 9.3 Binding Agreement. Subject to the
provisions of Sections 9.1 and 9.2, this Agreement shall be
binding upon the heirs, successors and assigns of the parties.
ARTICLE 10 MISCELLANEOUS.
Section 10.1 Applicable Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York as applied between residents of that State
entering into contracts to be performed wholly within that State.
Section 10.2 Notices. All notices hereunder shall be
in writing and shall be given: (a) if to the Company, at 355
Lexington Avenue, New York, New York 10017, Attention: T. Wilson
Eglin, or such other address or addresses of which the Investor
shall have been given notice, with copies to Paul Hastings,
Janofsky & Walker LLP, 399 Park Avenue, New York, New York 10022,
Attention: Barry A. Brooks, or such other address of which the
Investor shall have been given notice; and (b) if to the
Investor, at Rothschild Realty Inc., 1251 Avenue of the Americas,
New York, New York 10020, Attn: Matthew Kaplan, or such other
address of which the Company shall have been given notice, with
copies to Schulte Roth & Zabel LLP, 900 Third Avenue, New York,
New York 10022, Attention: Andre Weiss, Esq., or such other
address of which the Company shall have been given notice. Any
notice shall be deemed to have been given if personally delivered
or sent by United States mail or by commercial courier or
delivery service or by telegram or telex and shall be deemed
received, unless earlier received, (i) if sent by certified or
registered mail, return receipt requested, three business days
after deposit in the mail, postage prepaid, (ii) if sent by
United States Express Mail or by commercial courier or delivery
service, one Business Day after delivery to a United States Post
Office or delivery service, postage prepaid, (iii) if sent by
telegram, telex or facsimile transmission, when receipt is
acknowledged by answerback, and (iv) if delivered by hand, on the
date of receipt.
Section 10.3 Entire Agreement; Amendments. This
Agreement and other agreements referred to herein set forth the
entire understanding of the parties hereto with respect to the
subject matter hereof, and this Agreement shall not be amended
except by an instrument in writing executed by the Company and
the Investor.
Section 10.4 Remedies for Breaches of This Agreement.
Section 10.4.1 Survival of Certain Provisions.
All of the representations and warranties of the Company
contained in Article 4 above and all of the covenants and
undertakings of the Company contained in Article 6 above, shall
survive the Closings hereunder and continue in full force and
effect until April 1, 1998 (subject to any applicable statutes of
limitations).
Section 10.4.2 Indemnification Provisions for
Benefit of the Investor. In the event the Company breaches any
of its representations, warranties, and covenants contained
herein, provided that the Investor makes a written claim for
indemnification against the Company pursuant to Section 10.2,
then the Company agrees to indemnify the Investor from and
against the entirety of any Adverse Consequences the Investor may
actually suffer through and after the date of the claim for
indemnification (including any Adverse Consequences the Investor,
its members or Rothschild Realty Inc. may suffer after the end of
any applicable survival period, provided that notice of any claim
is delivered prior to the end of such survival period) resulting
from, arising out of, relating to, or caused by such material
breach; provided, however, that the Company's obligation to so
indemnify the Investor shall not exceed the amount of funds
invested by the Investor in the Company at any time a claim is
made. In addition to the indemnification rights provided for
herein, the Investor shall also have the right to all such
remedies to which it is entitled as a matter of law or equity.
Section 10.4.3 Matters Involving Third Parties.
(i) If any third party shall notify any party
entitled to be indemnified hereunder (the "Indemnified
Party") with respect to any matter (a "Third Party Claim")
which may give rise to a claim for indemnification against
the Company (the "Indemnifying Party") under this Section
10.4, then the Indemnified Party shall promptly notify each
Indemnifying Party thereof in writing; provided, however,
that no delay on the part of the Indemnified Party in
notifying any Indemnifying Party shall relieve the
Indemnifying Party from any obligation hereunder unless (and
then solely to the extent) the Indemnifying Party thereby is
prejudiced.
(ii)Any Indemnifying Party will have the right to
assume the defense of the Third Party Claim with counsel of
its choice reasonably satisfactory to the Indemnified Party
at any time within 15 days after the Indemnified Party has
given written notice of the Third Party Claim; provided,
however, that the Indemnifying Party must conduct the
defense of the Third Party Claim actively and diligently
thereafter in order to preserve its rights in this regard;
and provided further that the Indemnified Party may retain
separate co-counsel at its sole cost and expense and
participate in the defense of the Third Party Claim.
(iii) So long as the Indemnifying Party has
assumed and is conducting the defense of the Third Party
Claim in accordance with Section 10.4.3(ii) above, the
Indemnifying Party will not consent to the entry of any
judgment or enter into any settlement with respect to the
Third Party Claim without the prior written consent of the
Indemnified Party (not to be withheld unreasonably) unless
the judgment or proposed settlement involves only the
payment of money damages by one or more of the Indemnifying
Parties and does not impose an injunction or other equitable
relief upon the Indemnified Party.
(iv)So long as the Indemnifying Party has assumed
and is conducting the defense of the Third Party Claim in
accordance with Section 10.4.3(ii) above, the Indemnified
Party will not consent to the entry of any judgment or enter
into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnifying Party
(not to be withheld unreasonably).
(v) In the event none of the Indemnifying Parties
assumes and conducts the defense of the Third Party Claim in
accordance with Section 10.4.3(ii) above, (A) the
Indemnified Party may defend against, and consent to the
entry of any judgment or enter into any settlement with
respect to, the Third Party Claim in any manner he or it
reasonably may deem appropriate (and the Indemnified Party
need not consult with, or obtain any consent from, any
Indemnifying Party in connection therewith) and (B) the
Indemnifying Parties will remain responsible for any Adverse
Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to, or caused by the Third
Party Claim to the fullest extent provided in this Section
10.4.
Section 10.5 Confidentiality. The Investor and
Rothschild Realty Inc. agree not to use, and that their
respective representatives will not use, any Confidential
Information for any purpose other than in connection with
evaluating the Investment. The Investor and Rothschild Realty
Inc. agree that the Confidential Information will be kept
confidential by them and their respective representatives;
provided, however, that (i) any of such information may be
disclosed to such of their respective representatives for the
purpose of evaluating the Investment (it being understood that
such representatives shall be informed by us of the confidential
nature of such information and the Investor and Rothschild Realty
Inc. agree to be responsible for any breach of the provisions of
this Section 10.5 by such representatives), (ii) the Company may
make such disclosure as is necessary under applicable securities
laws, including the filing of a Current Report on Form 8-K and
(iii) any disclosure of such information may be made if the
Company shall consent thereto.
In the event that the Investor, Rothschild Realty Inc.
or any of their respective representatives are requested or
required (by oral question, interrogatories, requests for
information or documents, subpoena, civil investigative demand or
similar process) to disclose any Confidential Information, the
Investor, Rothschild Realty Inc. will, to the extent permitted by
law, promptly notify the Company of such request or requirement
so that the Company may seek an appropriate protective order. In
the event that such protective order is not obtained, the Company
agrees that the Investor, Rothschild Realty Inc. or such
representative may furnish that portion (and only such portion)
of the Confidential Information that they are advised by counsel
is legally required to be disclosed.
Without the prior written consent of the other party or
until such time as a mutually agreeable public announcement is
made, none of the Company, the Investor or Rothschild Realty Inc.
will disclose to any person either the fact that discussions or
negotiations are taking place concerning the Investment or any of
the terms, conditions or other facts with respect to the
Investment, including the status thereof, nor that the
Confidential Information has been made available to the Investor.
Section 10.6 Lock-Up. The Investor agrees that for a
period of one year, commencing on the date of this Agreement, it
shall not sell, transfer, assign, pledge or otherwise dispose of
any interest in any of the Preferred Shares or any shares of
Common Stock obtained upon conversion of any such Preferred
Shares.
Section 10.7 Termination. This Agreement may be
terminated at any time prior to the date on which all of the
Preferred Shares have been sold hereunder:
(a) by the mutual written consent of the Investor and
the Company; or
(b) by the Company or the Investor if the first
Closing has not occurred on or prior to January ___, 1997, or if
the remaining amount of Preferred Shares to be sold by the
Company to the Investor pursuant to this Agreement following the
initial Closing Date have not been sold by the Company to the
Investor on or prior to January 1, 1998; provided that the party
attempting to terminate this Agreement is not in material breach
of any of its representations, warranties, covenants or
agreements contained in this Agreement. In the event of
termination by the Company or the Investor pursuant to this
Section 10.7, written notice thereof shall forthwith be delivered
to the other party.
Section 10.8 Counterparts. This Agreement may be
executed in more than one counterpart, each of which may be
executed by fewer than all the parties, with the same effect as
if the parties executed one counterpart as of the day and year
first above written.
IN WITNESS WHEREOF, the parties hereto have hereunto
set their hands and seals as of the day and year first above
written.
LEXINGTON CORPORATE PROPERTIES, INC.
By: /s/ T. Wilson Eglin
Name: T. Wilson Eglin
Title: President
FIVE ARROWS REALTY SECURITIES L.L.C.
By: /s/ Matthew W. Kaplan
Name: Matthew W. Kaplan
Title: Manager
<PAGE>
Schedule 4.9.3
Subsequent Events
None
<PAGE>
Schedule 4.10
Capital Stock
1. The Company has reserved 800,000 shares of its Common Stock
for issuance under the Company's 1993 Stock Option Plan.
2. The Company has reserved 2,520,443 shares of its Common
Stock for issuance to holders of units (convertible or
exchangeable into Common Stock) in subsidiary partnerships
upon conversion or exchange of such partnership units into
Common Stock.
3. The Company has reserved 250,000 shares of its Common Stock
for issuance under the Company's 1994 Outside Director Stock
Plan.
4. The Company has reserved 250,000 shares of its Common Stock
for issuance under the Company's 1994 Employee Stock
Purchase Plan.
<PAGE>
Schedule 4.11
Litigation
None
<PAGE>
Schedule 4.12
Benefits Plans
1. The Company's 401(k) Plan.
<PAGE>
Schedule 4.17
Affiliate Transaction
1. Mr. E. Robert Roskind owns approximately $50,000 of
furniture and equipment used by the Company.
<PAGE>
Schedule 4.18
Liabilities
None
