MODIFICATION AGREEMENT
MODIFICATION AGREEMENT, dated as of May 10, 2000, by and among
Capital Trust, Inc., a Maryland corporation and successor to Capital Trust, a
California business trust (the "Company"), Xxxx X. Xxxxx and Xxxxx X. Xxxxxxxxx
(the "Regular Trustees"), as Regular Trustees for CT Convertible Trust I, a
Delaware statutory business trust and consolidated subsidiary of the Company
(the "Trust"), Vornado Realty L.P., a Delaware limited partnership ("VNO"),
Vornado Realty Trust, a Maryland real estate investment trust that has elected
to be treated as a real estate investment trust for federal income tax purposes
("VRT"), EOP Operating Limited Partnership, a Delaware limited partnership
("EOP"), Equity Office Properties Trust, a Maryland real estate investment trust
that has elected to be treated as a real estate investment trust for federal
income tax purposes ("EOPT"), and State Street Bank and Trust Company, as
trustee for General Motors Employes Global Group Pension Trust, a New York trust
and successor to both General Motors Hourly-Rate Employes Pension Trust, a New
York trust, and General Motors Salaried Employes Pension Trust, a New York trust
("GM Trust").
Preliminary Statement
A. VNO, EOP and GM Trust are the holders ("CTP Holders") of an
aggregate of $150,000,000 in liquidation amount of 8.25% step up convertible
trust preferred securities (the "CTP Securities") representing undivided
beneficial interests in the assets of the Trust, which was organized pursuant to
that certain declaration of trust, dated and effective as of July 28, 1998, by
the Company and the Trustees as defined therein and the holders, from time to
time, of undivided beneficial interests in the assets of the Trust (the
"Declaration"). The Company is the holder (the "CTC Holder",and together with
the CTP Holders, the "Holders") of $4,650,000 in liquidation amount of 8.25%
step up convertible trust common securities (the "CTC Securities," and together
with the CTP Securities, the "Securities") representing undivided beneficial
interests in the assets of the Trust. The Trust holds $154,650,000 in aggregate
principal amount of 8.25% step up convertible junior subordinated debentures due
September 30, 2018 (the "Convertible Debentures") issued pursuant to the
indenture, dated as of July 28, 1998, between the Company and Wilmington Trust
Company (the "Indenture").
B. Pursuant to the Declaration, the distribution rates and
distribution payment dates for the CTP Securities and the CTC Securities
correspond to the interest rates and interest payment dates of the Convertible
Debentures, and the CTP Holders have the power to direct the exercise of the
consent and voting rights of holders of Convertible Debentures in proportion to
the liquidation amount of the CTP Securities held by them.
C. The Company and certain of its affiliates and certain
affiliates of Citigroup Investments Inc., a Delaware corporation, are parties to
that certain venture agreement (the "Venture Agreement"), dated as of March 8,
2000, pursuant to which, among other things, the parties thereto will
co-sponsor, commit to invest capital in and manage real estate mezzanine
investment opportunity funds, provided however, that the parties hereto (i)
enter into a termination agreement that would terminate as of March 8, 2000 that
certain co-investment
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agreement, dated as of July 28, 1998, among the parties hereto and (ii) enter
into this Agreement with respect to the proposed amendments to the Indenture and
the Declaration that would modify the terms of the CTP Securities and the CTC
Securities to provide the Company with significantly greater flexibility with
regard to electing to be taxed as a REIT as required in the Venture Agreement.
D. The Company has requested that the CTP Holders provide
their consent, and the Company, as CTC Holder, intends to provide its consent,
to an amendment and restatement of each of the Indenture and the Declaration
that would modify the terms thereof in a manner to provide the Company with the
desired flexibility discussed above. The CTP Holders are willing to do so in
consideration of the benefits to the Company and its business arising from the
Venture Agreement and the transactions governed thereby and the benefits of
certain modifications to the terms of the CTP Securities that are favorable to
the CTP Holders.
Accordingly, the parties hereto agree as follows:
ARTICLE 1
AGREEMENT AND CLOSING
Section 1.1 Agreement. Subject to the conditions contained
herein:
(a) The Company hereby agrees to execute the amended and
restated indenture in the form attached hereto as Exhibit A (the"Amended and
Restated Indenture") and deliver the same to the Trustee as defined in the
Indenture (the "Indenture Trustee") at the Closing.
(b) The Company hereby agrees to issue pursuant to the terms
of the Amended and Restated Indenture, upon execution and delivery thereof by
the parties thereto, to the Declaration Institutional Trustee Debentures (as
defined herein) in the aggregate principal amount of $154,650,000 (the "New
Debentures") against delivery of the Convertible Debentures to the Indenture
Trustee for cancellation.
(c) The Regular Trustees hereby agree to execute the amended
and restated declaration of trust in the form attached hereto as Exhibit B (the
"Amended and Restated Declaration") and to deliver the same to the Institutional
Trustee as defined in the Declaration (the "Declaration Institutional Trustee")
and the Delaware Trustee as defined in the Declaration (the "Declaration
Delaware Trustee") at the Closing.
(d) Each CTP Holder and the Company, as the CTC Holder, hereby
agrees to execute a written direction in the form attached hereto as Exhibit C
(the "Written Direction"), directing the Declaration Institutional Trustee to
execute a written consent to the Amended and Restated Indenture (the "Indenture
Consent") in the form attached hereto as Exhibit D and to deliver such Written
Direction to the Declaration Institutional Trustee at the Closing.
(e) Each CTP Holder and the Company, as the CTC Holder, hereby
agrees to execute a written consent in the form attached hereto as Exhibit E to
the Amended and
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Restated Declaration (the "Declaration Consent") and to deliver the same to the
Declaration Institutional Trustee and the Declaration Delaware Trustee at the
Closing.
(f) The Company shall request the Indenture Trustee to join
the Company in the execution of the Amended and Restated Indenture and, in
connection therewith, shall comply with Sections 8.2, 8.4 and 15.5 of the
Indenture and, without limitation, deliver to the Indenture Trustee at the
Closing:
(i) certified copies of resolutions of the board of
directors of the Company, in the form attached hereto as Exhibit F (the
"Indenture Resolutions"), authorizing the execution of the Amended and
Restated Indenture;
(ii) an officers' certificate in the form attached
hereto as Exhibit G (the "Indenture Officers' Certificate"); and
(iii) an opinion of counsel in the form attached
hereto as Exhibit H (the "Opinion of Counsel");
and take any and all action on its part necessary to accomplish the same.
(g) The Regular Trustees shall request the Declaration
Institutional Trustee and the Declaration Delaware Trustee to join the Regular
Trustees in the execution of the Amended and Restated Declaration and, in
connection therewith, shall comply with Sections 3.7(a)(vii), 3.10(a) and 12.1
of the Declaration and Section 8(b) of Annex I to the Declaration and, without
limitation, deliver to the Declaration Institutional Trustee, the Declaration
Delaware Trustee and, as required, the Trust at the Closing:
(i) an officers' certificate, signed by two officers
of the Company, in the form attached hereto as Exhibit I (the
"Declaration Company Officers' Certificate");
(ii) an officers' certificate, signed by the Regular
Trustees, in the form attached hereto as Exhibit J (the "Declaration
Trust Officers' Certificate");
(iii) the Opinion of Counsel;
and take any and all action on their part necessary to accomplish the same.
(h) The Regular Trustees shall request the Declaration
Institutional Trustee as the holder of the Convertible Debentures to (i) consent
to the Amended and Restated Indenture and, in connection therewith, shall comply
with Section 3.7(a)(vii) of the Declaration and Section 8(b) of Annex I to the
Declaration and, without limitation, deliver to the Declaration Institutional
Trustee and the Trust at the Closing an opinion of tax counsel in the form
attached hereto as Exhibit K (the "Tax Opinion") and (ii) deliver at the Closing
to the Indenture Trustee for cancellation the Convertible Debentures against
delivery of the New Debentures issued to it in accordance with the terms hereof.
(i) The Declaration Trustees hereby agree to cause the Trust
to issue, pursuant to the terms of the Amended and Restated Declaration, upon
execution and delivery thereof by the parties thereto at the Closing, (i) to
each CTP Holder Convertible Preferred
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Securities (as defined therein) (the "New CTP Securities") in the aggregate
liquidation amount of $50,000,000 (for a total, to all CTP Holders, of
$150,000,000 in liquidation amount) and (ii) to the Company Common Securities
(as defined therein) in the aggregate liquidation amount of $4,650,000 ("New CTC
Securities").
(j) Each CTP Holder hereby, severally and not jointly, agrees
to deliver at the Closing to the Declaration Institutional Trustee for
cancellation the CTP Securities held by it against delivery of the New CTP
Securities issued to it in accordance with the terms hereof. The Company, as the
CTC Holder, hereby agrees to deliver at the Closing to the Declaration
Institutional Trustee for cancellation the CTC Securities held by it against
delivery of the New CTC Securities issued to it in accordance with the terms
hereof.
(k) The Regular Trustees hereby agree to deliver written
notice of the Amended and Restated Declaration as executed to the Holders in the
form attached hereto as Exhibit L (the "Amended and Restated Declaration
Notice").
(l) The Company hereby agrees to execute and deliver at the
Closing, and to request that Wilmington Trust Company, as trustee, execute and
deliver at the Closing, an amended and restated preferred securities guarantee
agreement for the benefit of the holders, from time to time, of the New CTP
Securities, in the form attached hereto as Exhibit M (the "New Preferred
Securities Guarantee").
(m) The Company hereby agrees to execute and deliver at the
Closing an amended and restated common securities guarantee agreement for the
benefit of the holders, from time to time, of the New CTC Securities, in the
form attached hereto as Exhibit N (the "New Common Securities Guarantee").
Section 1.2 Closing. The execution and delivery of the
documents and the other actions referred to in Section 1.1 (the "Closing") shall
take place at the offices of Battle Xxxxxx LLP, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 at 10:00 a.m. on the date hereof (the "Closing Date").
Section 1.3 Conditions to Closing. (a) The obligation of the
Company and the Trust to close the transactions contemplated hereunder is
subject to the satisfaction on or prior to the Closing of the following
conditions:
(i) no order, injunction or decree issued by any
court or agency of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the closing of the
transactions contemplated by this Agreement shall be in effect;
(ii) each of the terms, covenants and conditions of
this Agreement to be complied with and performed by the CTP Holders on
or prior to the Closing shall have been duly complied with and
performed in all material respects, and all documents to be delivered
or actions to be taken by the CTP Holders shall have been delivered or
performed; and
(iii) each of the representations and warranties made
by the CTP Holders herein shall be true and correct in all material
respects as of the Closing Date
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(unless such representation and warranty is made as of a specific date
and then shall be true and correct as of such date).
(b) The obligation of the CTP Holders to close the
transactions contemplated hereunder is subject to the satisfaction on or prior
to the Closing of the following conditions:
(i) no order, injunction or decree issued by any
court or agency of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the closing of the
transactions contemplated by this Agreement shall be in effect;
(ii) each of the terms, covenants and conditions of
this Agreement to be complied with and performed by the Company, in its
capacity as the CTC Holder and otherwise, and the Trust on or prior the
Closing shall have been duly complied with and performed in all
material respects, and all documents to be delivered or actions to be
taken by the Company, in its capacity as the CTC Holder and otherwise,
and the Trust shall have been delivered or performed;
(iii) each of the representations and warranties made
by the Company and the Trust herein shall be true and correct in all
material respects as of the Closing Date (unless such representation
and warranty is made as of a specific date and then shall be true and
correct as of such date);
(iv) the Declaration Institutional Trustee shall have
executed and delivered to the Indenture Trustee the Indenture Consent;
(v) the Indenture Trustee shall have executed and
delivered to the Company the Amended and Restated Indenture;
(vi) the Declaration Institutional Trustee and the
Declaration Delaware Trustee shall have executed and delivered to the
Company the Amended and Restated Declaration;
(vii) the Company and Wilmington Trust Company, as
trustee, shall have executed and delivered to the CTP Holders the New
Preferred Securities Guarantee;
(viii) the Company shall have executed and delivered
to the CTC Holder the New Common Securities Guarantee;
(ix) Xxxxxxxx, Xxxxxx and Finger shall have delivered
an opinion, dated the Closing Date, in the form attached hereto as
Exhibit O;
(x) Battle Xxxxxx LLP shall have delivered an
opinion, dated the Closing Date, in the form attached hereto as Exhibit
P; and
(xi) Xxxxxxx Xxxxx Xxxxxxx and Xxxxxxxxx shall have
delivered an opinion, dated the Closing Date, in the form attached
hereto as Exhibit Q.
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Section 1.4 Closing Deliveries and Actions. At the Closing,
the following deliveries shall be made:
(a) The Company shall deliver to the Institutional Trustee the
Amended and Restated Indenture executed by the Company.
(b) The Regular Trustees shall deliver to the Declaration
Institutional Trustee and the Declaration Delaware Trustee the Amended and
Restated Declaration executed by the Regular Trustees.
(c) Each CTP Holder and the Company, as the CTC Holder, shall
deliver to the Declaration Institutional Trustee a Written Direction executed by
each such CTP Holder and the Company.
(d) Each CTP Holder and the Company, as the CTC Holder, shall
deliver to the Declaration Institutional Trustee and the Declaration Delaware
Trustee a Declaration Consent executed by each such CTP Holder and the Company.
(e) The Company shall deliver to the Indenture Trustee the
Indenture Resolutions, the Indenture Officers' Certificate and the Opinion of
Counsel.
(f) The Regular Trustees shall deliver to the Declaration
Institutional Trustee, the Declaration Delaware Trustee and, as appropriate, the
Trust the Declaration Company Officers' Certificate, the Declaration Trust
Officers' Certificate, the Opinion of Counsel and the Tax Opinion and shall
deliver to each Holder the Amended and Restated Declaration Notice.
(g) The Company shall deliver to the Declaration Institutional
Trustee $154,650,000 aggregate principal amount of New Debentures duly
registered in its name.
(h) The Trust shall deliver $50,000,000 in liquidation amount
of New CTP Securities, duly registered in their respective names, to each CTP
Holder and $4,650,000 in liquidation amount of New CTC Securities duly
registered in its name to the Company.
(i) There shall have been delivered to each CTP Holder the
opinions referred to in Section 1.3(b)(ix), (x) and (xi).
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND THE TRUST
The Company and the Regular Trustees, jointly and severally,
represent and warrant to the CTP Holders, as of the Closing Date, as follows:
Section 2.1 Existence and Authority of the Company. The
Company is a corporation duly incorporated and validly existing under and by
virtue of the laws of the State of
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Maryland and is in good standing with the State Department of Assessments and
Taxation of Maryland. The Company has the requisite corporate power to execute
and deliver this Agreement, the Amended and Restated Indenture and the Amended
and Restated Declaration and to carry out the terms and conditions hereof and
thereof applicable to it. The Company is duly qualified to transact business and
is in good standing in each jurisdiction in which such qualification is
necessary, except to the extent that the failure to so qualify or be in good
standing would not have a material adverse effect on the management, assets,
business, business prospects, earnings or condition (financial or otherwise) of
the Company. The execution, delivery and performance by the Company of this
Agreement, the Amended and Restated Indenture and the Amended and Restated
Declaration have been duly authorized by all necessary corporate action on the
part of the Company. This Agreement has been duly executed and delivered, and
the Amended and Restated Indenture and the Amended and Restated Declaration,
when delivered to the Indenture Trustee, will have been duly executed, on behalf
of the Company, and assuming due execution of this Agreement by each CTP Holder,
due execution of the Amended and Restated Indenture by the Indenture Trustee,
and due execution of the Amended and Restated Declaration by the Declaration
Institutional Trustee and the Declaration Delaware Trustee, this Agreement
constitutes, and the Amended and Restated Indenture and the Amended and Restated
Declaration will constitute, valid and legally binding obligations of the
Company, enforceable against the Company in accordance with their terms, except
to the extent that their enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and by general equitable principles ("Bankruptcy
Exceptions").
Section 2.2 Existence and Authority of the Trust. The Trust
has been duly created and is validly existing and in good standing as a business
trust under Delaware law with the trust power and authority to own its
properties and to conduct its business and to enter into and perform its
obligations under this Agreement and the Amended and Restated Declaration. The
Trust is duly qualified to transact business and is in good standing in each
jurisdiction in which such qualification is necessary, except to the extent that
the failure to so qualify or be in good standing would not have a material
adverse effect on the management, assets, business, business prospects, earnings
or condition (financial or otherwise) of the Trust. The Trust is and will, upon
consummation of the transactions contemplated hereby, be classified under
current law for United States federal income tax purposes as a grantor trust and
not as an association taxable as a corporation. The execution, delivery and
performance of this Agreement and the consummation by the Trust of the
transactions contemplated hereby have been duly authorized by all necessary
proceedings on the part of the Trust. This Agreement has been duly executed and
delivered on behalf of the Trust , and assuming due execution of this Agreement
by each CTP Holder, constitute a valid and legally binding obligation of the
Trust, enforceable against the Trust in accordance with its terms, except to the
extent that their enforceability may be limited by Bankruptcy Exceptions.
Section 2.3 No Consents, Approvals, Violations or Breaches.
Neither the execution and delivery by the Company and the Trust of this
Agreement and the other agreements to be executed and delivered pursuant hereto,
nor the consummation by the Company and the Trust of the transactions
contemplated hereby and thereby, will (i) require any consent, approval,
authorization or permit of, or filing, registration or qualification with or
notification to, any governmental or regulatory authority under any law of the
United States, any state or any political subdivision thereof ("Governmental
Entity"), (ii) violate any statute, law, ordinance, rule or regulation of the
United States, any state or any political subdivision thereof,
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or any judgment, order, writ, decree or injunction applicable to the Company or
the Trust or any of their respective properties or assets or (iii) violate,
conflict with or result in a material breach of any provisions of, or constitute
a material default (or any event which, with or without due notice or lapse of
time, or both, would constitute a material default) under, or result in the
termination of, or accelerate the performance required by, any of the terms,
conditions or provisions of any charter, by-laws, declaration of trust, note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which the Company or the Trust is a party or by
which any of their properties or assets may be bound.
2.4 Private Offering
(a) None of the Company, the Trust, their affiliates (as such
term is defined in Rule 501(b) under the Securities Act for any person or
entity) ("Affiliates"), or any person acting on their or any of their
Affiliates' behalf has engaged, or will engage, in connection with the proposed
amendment and restatement of the Indenture and the Declaration, in any
communication or other form of general solicitation or general advertising
within the meaning of Rule 502(c) under the Securities Act of 1933, as amended
(the "Securities Act"). Based in part upon the representations of the CTP
Holders set forth in Section 3.1, the proposed amendment and restatement of the
Indenture and the Declaration in the manner contemplated by this Agreement is
exempt from the registration and prospectus delivery requirements of the
Securities Act, and the New CTP Securities are exempt from registration and
qualification under the registration, permit or qualification requirements of
all applicable state securities laws.
2.5 Payments Current
(a) The Company has paid to the Trust all interest accrued on
the Convertible Debentures through the date hereof except for accrued interest
to be paid pursuant to Section 5.1 hereof, and the Trust, upon receipt of such
interest payments, has paid to the CTP Holders all distributions accrued on the
CTP Securities through the date hereof except for accrued distributions to be
paid pursuant to Section 5.1 hereof.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF THE CTP HOLDERS
Section 3.1 Certain Representation and Warranties. Each CTP
Holder, severally and not jointly, represents and warrants to the Company, as of
the Closing, as follows:
(a) It has acquired the CTP Securities and the New CTP
Securities for its own account for investment and not with a view towards the
resale, transfer or distribution thereof, nor with any present intention of
distributing the CTP Securities, but subject, nevertheless, to any requirement
of law that the disposition of such CTP Holder's property shall at all times be
within the CTP Holder's control, and without prejudice to the CTP Holder's right
at all times to sell or otherwise dispose of all or any part of such securities
under a registration under the Securities Act or under an exemption from said
registration available under the Securities Act.
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(b) It has the power and authority to execute and deliver this
Agreement and to perform its obligations hereunder.
(c) It has taken all action necessary for the authorization,
execution, delivery, and performance of this Agreement by such CTP Holder and
its obligations hereunder, and, upon execution and delivery by the Company, this
Agreement shall constitute the valid and binding obligations of such CTP Holder,
enforceable against such CTP Holder in accordance with its terms, except as such
enforcement may be limited by Bankruptcy Exceptions.
(d) It has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
amendment to its investment in the Trust and Company as contemplated by this
Agreement, and is able to bear the economic risk of such investment for an
indefinite period of time. It has been furnished access to such information and
documents as it has requested and has been afforded an opportunity to ask
questions of and receive answers from representatives of the Company and the
Trust concerning the terms and conditions of this Agreement and the proposed
amendments to the Indenture and Declaration contemplated hereby and the business
and financial condition of the Company and the Trust.
(e) It is an "accredited investor" as such term is defined in
Rule 501 under the Securities Act.
(g) It acknowledges that the CTP Securities and the New CTP
Securities have not been registered under the Securities Act and may not be
offered or sold within the United States, except pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of the
Securities Act. It has not offered or sold, and will not offer or sell, the New
CTP Securities as amended pursuant hereto within the United States, except
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act.
ARTICLE 4
FURTHER ASSURANCES
Section 4.1 Further Assurances.
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(a) Each party to this Agreement shall, at the request of
another party to this Agreement, at any time and from time to time following the
Closing hereunder, execute and de liver or cause to be executed and delivered
all such further instruments and take or cause to be taken all such further
action as may be reasonably necessary or appropriate in order to more
effectively carry out the provisions of this Agreement.
(b) Each of the CTP Holders shall, at the request of the
Company, at any time and from time to time following the Closing hereunder,
execute and deliver or cause to be executed and delivered all such further
instruments and take or cause to be taken all such action to further amend or
modify the Amended and Restated Declaration and the Amended and Restated
Indenture in such a manner as to eliminate any impediments to the Company's
ability to be taxed as a real estate investment trust ("REIT") under Section 857
of the Internal
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Revenue Code of 1986, as amended (the "Code"), provided that such amendment(s)
or modification(s) do not adversely affect or impair the economic value of the
New CTP Securities (including the liquidity of such securities) held by such CTP
Holder; it being further agreed that a change in tax status to being taxed as a
REIT in and of itself shall not be deemed to impair the economic value of the
New CTP Securities in any manner. Notwithstanding the foregoing, none of GM
Trust, VNO or EOP shall be obligated in any manner (i) in the case of GM Trust,
to monitor or advise the Company as to whether GM Trust, or any entity in which
GM Trust is a direct or indirect owner, is a tenant, leaseholder or occupant of
any real property owned by the Company or is providing services to any such
tenant, leaseholder or occupant or to change GM Trust's ownership in any such
entity in any manner, and (ii) in the case of VNO and EOP, to monitor or advise
the Company as to whether VNO or EOP, or any entity of which either VNO or EOP
is a direct or indirect owner, or any entity which is a direct or indirect owner
of VNO or EOP, is a tenant, leaseholder, or occupant of any real property owned
by the Company or is providing services to any such tenant, leaseholder or
occupant or to change the ownership of VNO or EOP of any such entity or the
ownership of any such entity of VNO or EOP in any manner. Further, it is
understood that any changes to any charter or other organizational document
necessary to avoid becoming a "pension-held REIT" as defined in Section
856(h)(3)(D) of the Code pursuant to Section 5.3 hereof shall not be considered
in any manner to affect the economic value of the New CTP Securities (including
the liquidity of such securities) provided that such changes to the charter or
other organizational document do not void any equity ownership in the Company or
right to acquire equity ownership in the Company upon conversion of the CTP
Holders' New CTP Securities or limit any interest that any CTP Holder has in
equity ownership in the Company acquired or acquirable on conversion of such CTP
Holder's New CTP Securities including, without limitation, the right to vote,
the right to distributions and the right of appreciation in value with respect
to such equity ownership.
ARTICLE 5
ADDITIONAL AGREEMENTS
Section 5.1 Accrued Distributions. The Company agrees to pay
on June 30, 2000 to the Trust the interest accrued on the Convertible Debentures
from April 1, 2000 to but not including the date hereof, and upon receipt
thereof, the Trust agrees to pay on June 30, 2000 to each of the Holders the
distributions accrued on their Securities from April 1, 2000 to but not
including the date hereof.
Section 5.2 VNO and EOP.
(a) The Company represents to VNO and its affiliates,
including VRT, and to EOP and its affiliates, including EOPT, that the Company's
board of directors has twelve members and the Company covenants, for the benefit
of VNO and its affiliates, including VRT, and of EOP and its affiliates,
including EOPT, that the number of seats on the Company's board of directors
will not be decreased without the prior written consent of VNO and EOP and that
any vacancy on the Company's board of directors will be filled in the ordinary
course pursuant to the Company's charter and by-laws.
(b) The Company covenants to VNO and its affiliates, including
VRT, and to EOP and its affiliates, including EOPT, that promptly upon request
by VRT or EOPT, or both of
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them made at any time after December 31, 2000 it will make a joint taxable REIT
subsidiary election (a "TRS" election) under Section 856(l) of the Code with
VRT, in the case of a request by VRT, and/or with EOPT, in the case of a request
by EOPT; provided, however, that:
(i) the Company shall not be required to make a TRS
election, and VRT and EOPT, as the case may be, covenant that promptly
upon request by the Company, they will join with the Company in
revoking any previously made TRS election if the New CTP Securities
owned by VRT or EOPT, as the case may be, represent less than 8% of the
total voting power and value of the Company for purposes of clause
(iii) of Section 856(c)(4)(B) of the Code;
(ii) in the event that the Internal Revenue Service
takes the position that a TRS may not elect REIT status, then at such
time as the Company determines that it will either merge into or
otherwise combine with an existing REIT or elect REIT status at such
time as the Company is not prohibited by Section 856(g) of the Code
from electing REIT status, VRT and EOPT, as the case may be, covenant
that promptly upon request by the Company, they will join with the
Company in revoking any previously made TRS election (such revocation
to be made at the time requested by the Company that will enable it to
merge or otherwise combine with an existing REIT or reelect REIT
status); provided however, that, if the Company fails to qualify as a
REIT or otherwise is no longer taxed as a REIT, the Company shall again
be subject to the covenant to make a TRS election contained in
subsection 5.2(b) hereof; and
(iii) if at any time it appears, based on a TRS
election and on the Company's business plan for its current or next
subsequent tax year, that the Company will be prohibited by Section
163(j) of the Code from taking an interest deduction for all or a
portion of the interest to be paid by the Company to VRT or EOPT, as
the case may be, in that year, or that the Company will otherwise
suffer an actual economic loss from such election (except as a result
of the covenants contained in subsection (c) of this Section), then VRT
and EOPT, as the case may be, covenant that promptly upon request by
the Company, they will join with the Company in revoking any previously
made TRS election; provided further, however, that VRT and EOPT as the
case may be shall not be required to join with the Company in revoking
any previously made TRS election, and the Company shall not revoke such
election, if VRT and EOPT agree to compensate the Company fully on an
after tax basis for the value of the lost deduction for interest paid
to them or compensate the Company fully for such economic loss.
(c) The Company covenants that it will not, directly or
indirectly, operate or manage a lodging facility or health care facility, or
provide to any person (under a franchise, license or otherwise) rights to any
brand name under which any lodging facility or health care facility is operated
at any time during any taxable year in which the Company has a TRS election
outstanding with respect to VRT or EOPT. Terms used in this Section have the
same meanings as when used in Section 856(l) of the Code or any successor
provision.
(d) The Company covenants that it shall provide VRT and EOPT
with such information as either of them shall reasonably request about the
capital structure, assets or activities of the Company in connection with
evaluating the effect of their investment in the New CTP Securities on their
REIT.
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(e) VRT and its affiliates and EOPT and its affiliates are
intended third party beneficiaries of the representations, covenants and
agreements of the Company set forth in this Section 5.2.
Section 5.3 GM Trust. The Company hereby agrees that without
the prior written consent of GM Trust, it shall not elect to become or
consummate a transaction in which the Company or any successor is or becomes
taxed as a REIT unless upon consummation of such election or transaction (i) the
Company or any such successor would not be or become a "pension-held REIT" as
defined in Section 856(h)(3)(D) of the Code, (ii) the Company or any such
successor shall have included in, or shall have amended to include in, its
charter or other organizational document provisions thereof that are
specifically intended to prevent the Company or any such successor from becoming
a "pension-held REIT" as defined in Section 856(h)(3)(D) of the Code and (iii)
the Company's charter or other organizational document does not void any equity
ownership in the Company or right to acquire equity ownership in the Company
upon conversion of GM Trust's New CTP Securities or limit any interest that GM
Trust has in equity ownership in the Company acquired or acquirable on
conversion of GM Trust's New CTP Securities including, without limitation, the
right to vote, the right to distributions and the right of appreciation in value
with respect to such equity ownership.
Section 5.4 Notice of Ownership Increases; Requested Ownership
Percentage; Irrevocable Proxy.
(a) Certain Corporation Actions. In the event that the Company
decides to undertake an action (such as redeeming a portion of its outstanding
capital stock) that causes an increase in the percentage of the Company's
outstanding voting capital stock or in the percentage of the value of all voting
and non-voting stock (determined after giving effect to the exercise or
conversion of all options, warrants and convertible securities owned by EOP and
its affiliates or VNO and its affiliates, as applicable, including Trust
securities) owned by EOP and its affiliates, or VNO and its affiliates, as
applicable, the Company shall notify EOP or VNO, as applicable, of such decision
at least ten (10) days prior to such action, which notice shall also state the
notice recipient's percentage ownership of voting stock and of value (as so
determined) as shown on the Company's books and records.
(b) Quarterly and Requested Ownership Reports. No later than
ten (10) days prior to the end of each calendar quarter and at any other time
upon the request of EOP or VNO, as applicable, the Company shall provide a
written statement to EOP or VNO, as applicable, setting forth (i) the percentage
of the Company's outstanding voting capital stock and the percentage of the
Company's outstanding value (as determined pursuant to Section 5.4(a)) shown on
the Company's books and records to be owned by EOP and its affiliates or VNO and
its affiliates, as applicable, and (ii) the total number and value of
outstanding shares of capital stock of the Company (separated by class and
series).
(c) Irrevocable Proxy. EOP hereby grants an irrevocable proxy
(subject to the last sentence of this subsection (c)) to the Company to vote or
act by written consent with respect to any and all Excess Shares owned by EOP
from time to time. EOP affirms that the proxy granted hereby is coupled with an
interest and shall be irrevocable. For purposes of this Section 5.4(c), the term
"Excess Shares" shall mean any Company securities owned by EOP and its
affiliates which exceeds 9.9% of the voting power or value of the Company for
purposes
915272.17
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of clause (iii) of Section 856(c)(4)(B) of the Code. During the effectiveness of
any TRS election or while the Company is a REIT, this subsection (c) shall be of
no force and effect.
Section 5.5 Other. The Company and the Regular Trustees shall
treat the New Debentures as indebtedness for United States federal income tax
purposes.
ARTICLE 6
MISCELLANEOUS
Section 6.1 Assignment. This Agreement may not be assigned by
any party hereto without the prior written consent of each other party. This
Agreement shall be binding upon and inure to the benefit of the parties hereto,
their successors in interest and permitted assigns.
Section 6.2 Notices. All notices or other communications under
this Agreement shall be sufficient if in writing and delivered by hand or sent
by telecopy, or sent, postage prepaid by registered, certified or express mail,
or by recognized overnight air courier service and shall be deemed given when so
delivered by hand or telecopied, or if mailed or sent by overnight courier
service, on the third (3rd) business day after mailing (one business day in the
case of express mail or overnight courier service) to the parties at the
following addresses:
(a) If to the CTP Holders, to:
Vornado Realty L.P.
c/o Vornado Realty Trust
Park 00 Xxxx, Xxxxx XX
Xxxxxx Xxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx Xxxxxx
Executive Vice President,
Finance and Administration
Facsimile:
with a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxxxx
Facsimile: (000) 000-0000
EOP Operating Limited Partnership
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
915272.17
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with a copy to:
Xxxx, Xxxxxx & Xxxxxxxxx
Two North LaSalle Street, Suite 2200
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxxxx
Facsimile: (000) 000-0000
State Street Bank and Trust Company, as trustee for
General Motors Employes
Global Group Pension Trust
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, P.C.
Facsimile: (000) 000-0000
(b) If to the Company, to:
Capital Trust, Inc.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxx
Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to
Battle Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
or to such other address as the addressee may have specified in a notice duly
given to the sender as provided herein.
Section 6.3 Entire Agreement. This Agreement, including the
Exhibits hereto, constitutes the entire understanding of the parties relating to
the subject matter hereof and supersedes all prior agreements and
understandings, whether oral or written. No amendment
915272.17
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or modification of the terms of this Agreement shall be binding or effective
unless expressed in writing and signed by each party.
Section 6.4 No Waiver. The waiver by any party of the breach
of any of the terms and conditions of, or any right under, this Agreement shall
not be deemed to constitute the waiver of any other breach of the same or any
other term or condition or of any similar right. No such waiver shall be binding
or effective unless expressed in writing and signed by the party giving such
waiver.
Section 6.5 Costs and Expenses. Except as provided below, each
party to this Agreement shall bear its own respective costs and expenses
incurred in connection with the negotiation, preparation, execution, delivery
and enforcement of this Agreement and the consummation of the transactions
contemplated hereby. The Company shall reimburse each of VNO, EOP and GM Trust
for its reasonable out-of-pocket expenses incurred in connection with the
negotiation, preparation, execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby (including the fees and
expenses of Xxxxxxxx & Xxxxxxxx, counsel to VNO, Xxxx Xxxxxxx & Xxxxxx LLP,
counsel to GM Trust, and Xxxx Xxxxxx & Xxxxxxxxx, counsel to EOP).
Section 6.6 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements executed and to be fully performed in such State.
Section 6.7 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument.
Section 6.8 Construction. The article and section headings
contained in this Agreement are inserted for reference purposes only and shall
not affect the meaning or interpretation of this Agreement.
915272.17
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
CAPITAL TRUST, INC., in its own capacity and as the
CTC Holder
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Chief Executive Officer
XXXX X. XXXXX
/s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx, as Regular Trustee
Solely as trustee and not in his individual capacity
XXXXX X. XXXXXXXXX
/s/ Xxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxxxxxx, as Regular Trustee
Solely as trustee and not in her individual capacity
EOP OPERATING LIMITED PARTNERSHIP
By: Equity Office Properties Trust,
its general partner
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President
EQUITY OFFICE PROPERTIES TRUST
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President
915272.17
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VORNADO REALTY L.P.
By: Vornado Realty Trust,
its general partner
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx, Vice President
Title: Chief Financial Officer
VORNADO REALTY TRUST
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx, Vice President
Title: Chief Financial Officer
STATE STREET BANK AND TRUST
COMPANY, as trustee for
General Motors Employes Global Group Pension Trust
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Authorized Signatory
915272.17
