EXHIBIT 10.11
AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
AMONG
XXXXX INTERESTS LIMITED PARTNERSHIP,
XXXXX-SUMISEI U.S. CORE OFFICE FUND, L.P.,
XXXXX-SUMISEI NY CORE OFFICE TRUST,
GENERAL MOTORS INVESTMENT MANAGEMENT CORPORATION,
FIRST PLAZA GROUP TRUST,
GMAM CORE PLUS II-NYC-DC, LLC
AND
[----------------- ----------------]
Dated as of December 23, 2003
TABLE OF CONTENTS
Page No.
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ARTICLE 1 DEFINITIONS............................................................................... 1
ARTICLE 2 MAJOR DECISIONS; CONSULTATION AND INFORMATION RIGHTS...................................... 7
Section 2.01 Major Decisions.......................................................... 7
Section 2.02 Consultation and Information Rights...................................... 8
ARTICLE 3 FORCED SALE/REDEMPTION/PURCHASE RIGHT..................................................... 9
Section 3.01 Forced Sale/Redemption Right............................................. 9
Section 3.02 Forced Sale Process...................................................... 10
Section 3.03 Superceding Provisions................................................... 10
ARTICLE 4 REDEMPTION RIGHT......................................................................... 10
Section 4.01 Future Investments...................................................... 10
Section 4.02 Remedy.................................................................. 11
Section 4.03 Superceding Provisions.................................................. 11
ARTICLE 5 APPRAISAL................................................................................ 12
Section 5.01 Appraised Value......................................................... 12
Section 5.02 Appraisals.............................................................. 12
ARTICLE 6 CO-INVESTMENT RIGHTS..................................................................... 13
Section 6.01 20% Co-Investment Right................................................. 13
Section 6.02 Third Party Co-Investment Right......................................... 14
Section 6.03 Exceptions.............................................................. 14
Section 6.04 Structure............................................................... 14
Section 6.05 Qualified Investments................................................... 15
Section 6.06 Co-Investment Procedures................................................ 16
Section 6.07 Default................................................................. 16
Section 6.08 Termination............................................................. 16
Section 6.09 Co-Investment by Others................................................. 17
ARTICLE 7 MEETINGS; INFORMATION RIGHTS............................................................. 17
Section 7.01 Meetings................................................................ 17
Section 7.02 Co-Investment Prospects................................................. 18
ARTICLE 8 TAG ALONG RIGHTS; RIGHT OF FIRST NEGOTIATION............................................. 18
Section 8.01 Tag Along Rights........................................................ 18
Section 8.02 Right of First Negotiation.............................................. 19
ARTICLE 9 MISCELLANEOUS............................................................................ 19
Section 9.01 Successors and Assigns.................................................. 19
Section 9.02 Governing Law........................................................... 20
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Section 9.03 Counterparts............................................................ 20
Section 9.04 Amendment............................................................... 20
Section 9.05 Beneficiaries........................................................... 20
Section 9.06 No Public Announcement.................................................. 20
Section 9.07 Termination of Certain Rights........................................... 20
Section 9.08 Notices................................................................. 20
Section 9.09 Specific Performance.................................................... 22
Section 9.10 Addition of MT Trust and GM/Xxxxx Co-Investment Vehicles................ 22
Section 9.11 Term.................................................................... 22
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AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
This AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (this "Agreement")
is entered into as of December 23, 2003 among XXXXX INTERESTS LIMITED
PARTNERSHIP, a Delaware limited partnership ("HILP"), Xxxxx-SUMISEI U.S. Core
OFFICE Fund, L.P., a Delaware limited partnership (the "Holding Partnership"),
XXXXX-SUMISEI NY CORE OFFICE TRUST, a Maryland real estate investment trust (the
"Trust"), GENERAL MOTORS INVESTMENT MANAGEMENT CORPORATION, a Delaware
corporation, on behalf of one or more investors advised by it ("GMIMCo"), FIRST
PLAZA GROUP TRUST, a New York trust ("First Plaza"), GMAM CORE PLUS II-NYC-DC,
LLC, a Delaware limited liability company ("CPII"), and [----- -----] ("GM-X,"
and together with First Plaza and CPII, the "Current GM Investors").
This Agreement amends and restates the Investor Rights Agreement
originally entered into by the parties hereto as of August 19, 2003 (the
"Original Agreement"), to correct certain technical deficiencies therein.
In consideration of the terms and conditions set forth herein, the
mutual benefits to be gained by the performance thereof and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree that the Original Agreement is hereby amended
and restated in its entirety as follows:
ARTICLE 1
DEFINITIONS
For the purposes of this Agreement, the following terms shall have the
following meanings:
"20% CO-INVESTMENT RIGHT" has the meaning ascribed thereto in Section
6.01.
"20% THRESHOLD" has the meaning ascribed thereto in Section 6.01.
"AFFILIATE" shall mean, with respect to any Person, any other Person
that, directly or indirectly, Controls or is Controlled by or is under common
Control with such Person; provided that, for purposes of this Agreement (i) the
Holding Partnership and Persons Controlled by the Holding Partnership shall not
be deemed to be Affiliates of HILP, and Persons Controlled by HILP shall not be
deemed to be Affiliates of the Holding Partnership, (ii) each of the parties to
this Agreement shall be deemed not to be an Affiliate of any Investment Vehicle
or of any Person Controlled by any Investment Vehicle, and (iii) no Investment
Vehicle or Person Controlled by an Investment Vehicle shall be deemed an
Affiliate of any other Investment Vehicle.
"AGREEMENT" has the meaning ascribed thereto in the preamble.
"APPOINTMENT DATE" has the meaning ascribed thereto in Section 5.02.
"APPRAISAL NOTICE" has the meaning ascribed thereto in Section 5.02.
"APPRAISED VALUE" has the meaning ascribed thereto in Section 5.01.
"APPROVED CAPITAL CONTRIBUTIONS" has the meaning ascribed thereto in
Section 2.01(d).
"ASSET SALE" has the meaning ascribed thereto in Section 8.01(b).
"ASSET SALE OFFER NOTICE" has the meaning ascribed thereto in Section
8.01(b).
"BUSINESS DAY" has the meaning ascribed thereto in the Organization
Agreement.
"CBD" has the meaning ascribed thereto in the definition of Qualified
Investment.
"CO-INVESTMENT RIGHT" has the meaning ascribed thereto in Section 6.02.
"CONSOLIDATED OFFERING ENTITY" has the meaning ascribed thereto in
Section 8.01(a).
"CONFLICT DECISION" shall mean any Major Decision which is reasonably
likely to materially benefit an asset in which the Holding Partnership or any of
its Affiliates holds an interest but in which a GM Investor does not.
"CONTROL" shall mean, with respect to any Person, the possession,
directly or indirectly, of the power to direct or cause the direction of the
management policies and procedures of such Person, whether through the ownership
of voting securities, by contract, or otherwise.
"CPII" has the meaning ascribed thereto in the preamble.
"CURRENT GM INVESTORS" has the meaning ascribed thereto in the
preamble.
"DECLARATION OF TRUST" has the meaning ascribed thereto in the
Organization Agreement.
"DEFAULT RATE" shall mean a rate equal to the greater of (i) the Prime
Rate plus 4% or (ii) 18% (unless such rate exceeds the highest lawful rate, in
which event the rate shall be the highest lawful rate).
"DISTRIBUTION RATE" means (a) if the Forced Sale Notice is given after
the Lock Out Date, the Specified Rate for the period commencing nine months
following the applicable Forced Sale Notice and ending on the first anniversary
of such Forced Sale Notice, and the Default Rate thereafter, or (b) if the
Forced Sale Notice is given prior to the Lock Out Date, the rate of eleven
percent (11%) per annum from the date that is nine months following the Forced
Sale Notice until the later of (i) the Lock Out Date and (ii) the first
anniversary of the Forced Sale Notice, and the Default Rate thereafter.
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"ELECTION NOTICE" has the meaning ascribed thereto in Section 8.02.
"FIRST CLOSING PROPERTIES" has the meaning ascribed thereto in the
Master Agreement.
"FIRST PLAZA" has the meaning ascribed thereto in the preamble.
"FORCED SALE DATE" has the meaning ascribed thereto in Section 6.08
"FORCED SALE INVESTMENT" has the meaning ascribed thereto in Section
3.01.
"FORCED SALE NOTICE" has the meaning ascribed thereto in Section 3.01.
"FORCED SALE RIGHT" has the meaning ascribed thereto in Section 3.01.
"GM/XXXXX CO-INVESTMENT VEHICLE" shall mean, with respect to each
Investment in which one or more GM Investors holds an interest, the Person owned
by one or more Affiliates of the Holding Partnership or of HILP and such GM
Investors through which such GM Investors hold their interest in such
Investment.
"GMIMCO" has the meaning ascribed thereto in the preamble.
"GM INVESTORS" shall mean the Current GM Investors and any other
investor advised by GMIMCo with respect to an investment in an Investment, and
each is sometimes referred to herein as a "GM INVESTOR".
"GM-X" has the meaning ascribed thereto in the preamble.
"HCP" has the meaning ascribed thereto in Section 6.05(c).
"HILP" has the meaning ascribed thereto in the preamble.
"XXXXX CORE FUND" shall mean Xxxxx U.S. Core Office Properties, L.P., a
Delaware limited partnership, as well as any entity in which the Holding
Partnership holds a direct or indirect interest in such entity.
"XXXXX INVESTOR" has the meaning ascribed thereto in the Organization
Agreement.
"HOLDING PARTNERSHIP" has the meaning ascribed thereto in the preamble.
"HP GENERAL PARTNER" shall mean Xxxxx US Core Office Capital LLC, a
Delaware limited liability company, and its successors, and any Person hereafter
admitted as General Partner (or if more than one General Partner, the Managing
General Partner) of the Holding Partnership.
"HSOV" has the meaning ascribed thereto in Section 6.05(d).
"INITIAL FORCED SALE NOTICE" has the meaning ascribed thereto in
Section 3.01.
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"INVESTMENT" shall mean any Qualified Investment held directly or
indirectly from time to time by the Holding Partnership.
"INVESTMENT VEHICLE" shall mean any of the Trust, MT Trust (if it is
organized as contemplated by the Organization Agreement) or any GM/Xxxxx
Co-Investment Vehicle.
"LIQUIDATION PERIOD" has the meaning ascribed thereto in Section 4.01.
"LOCK OUT DATE" means the earlier of (i) August 19, 2006, and (ii) the
date on which third party investors have in the aggregate committed to
contribute at least $1 billion in equity capital to the Holding Partnership
and/or the Xxxxx Core Fund (and the Holding Partnership shall notify GMIMCo in
writing promptly following the occurrence of such date).
"MAJOR DECISION" has the meaning ascribed thereto in Section 2.01.
"MAJOR HOLDING PARTNERSHIP INVESTOR" shall mean any Person that invests
or commits to invest more than $100 million in equity capital in the Holding
Partnership and/or the Xxxxx Core Fund.
"MAJOR LEASE DECISION" has the meaning ascribed thereto in Section
2.01(f).
"MANHATTAN TOWER" has the meaning ascribed to "101 East 00xx Xxxxxx" in
the Master Agreement.
"MASTER AGREEMENT" shall mean that certain Amended and Restated Master
Agreement, dated as of March 31, 2003, among HILP, Xxxxx US Core Office
Properties LP and Sumitomo Life Realty (N.Y.), Inc., as modified by two letter
agreements dated March 31, 2003 and an extension letter agreement dated June 26,
2003, and as amended by the amendment thereto dated as of July 22, 2003 and
letter agreement dated July 22, 2003 and by the letter agreement dated as of
August 19, 2003.
"MATERIAL ALTERATIONS" shall mean, with respect to any building,
modifications or alterations to such building which are reasonably expected to
cost an amount equal to the lesser of (i) $2 million and (ii) two percent of the
gross acquisition cost of such building.
"MT TRUST" has the meaning ascribed thereto in the Organization
Agreement.
"NOP" has the meaning ascribed thereto in Section 6.05(f).
"OFFER NOTICE" has the meaning ascribed thereto in Section 8.01(a).
"OFFERING" has the meaning ascribed thereto in Section 8.01(a).
"OFFERING ENTITY" has the meaning ascribed thereto in Section 8.01(a).
"ORGANIZATION AGREEMENT" shall mean the Amended and Restated
Organization Agreement for the Xxxxx-Sumisei NY Core Office Trust, dated as of
December 23, 2003,
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among the parties hereto and the Xxxxx Investor, as such agreement may be
amended from time to time.
"ORIGINAL AGREEMENT" has the meaning ascribed thereto in the preamble.
"OTHER CO-INVESTORS" has the meaning ascribed thereto in Section 6.09.
"PARTICIPATING GM ENTITY" has the meaning ascribed thereto in Section
8.01(a).
"PARTICIPATING INVESTORS" has the meaning ascribed thereto in Section
8.01(a).
"PERSON" shall mean any individual, any foreign or domestic general or
limited partnership, limited liability company, corporation, joint enterprise,
trust, employee benefit plan, cooperative or association.
"PRIME RATE" shall mean the highest domestic prime lending rate
published from time to time in the Wall Street Journal.
"PROJECTED NET PROCEEDS" shall mean, with respect to any Investment,
the total cash amount that would be available for distribution by the Investment
Vehicle that holds an interest in such Investment, if such Investment were sold
for a sales price equal to its Appraised Value less a reasonable estimate of the
costs and expenses, including reasonable and customary brokerage commissions,
that would have been incurred by such Investment Vehicle, as seller, in making
such sale.
"PROPOSED LIQUIDATION DATE" has the meaning ascribed thereto in Section
4.01.
"PROSPECTIVE INVESTMENT" shall mean each opportunity afforded to or
obtained by or on behalf of any of HILP, the Holding Partnership or any of their
respective Affiliates to invest in any Qualified Investment which opportunity is
offered or required to be offered to the Xxxxx Core Fund pursuant to its
organizational documents.
"QUALIFIED APPRAISER" means an appraiser having the "MAI" designation
and not less than ten years of experience appraising assets of the type in
question in the market in which the asset in question is located.
"QUALIFIED INVESTMENT" shall mean an investment in one or more existing
office properties that the HP General Partner (or, if applicable, the general
partner of Xxxxx Core Fund) believes are desirable long term "core" holdings for
the Xxxxx Core Fund. The Holding Partnership will target high quality properties
in attractive Central Business District ("CBD") and suburban locations, with the
expectation that approximately 70% or more of the Holding Partnership's
available capital will be invested in CBD properties.
"REDUCED CAPITAL DATE" has the meaning ascribed thereto in Section
6.08.
"SELLING ENTITY" has the meaning ascribed thereto in Section 8.02.
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"SPECIFIED RATE" shall mean a rate equal to the greater of (i) the
Prime Rate plus 4% or (ii) 10% (unless such rate exceeds the highest lawful
rate, in which event the rate shall be the highest lawful rate).
"STANDARD GM INVESTOR CO-INVESTMENT TERMS" has the meaning ascribed
thereto in Section 6.02.
"TAG ALONG ELECTION NOTICE" has the meaning ascribed thereto in Section
8.01(a).
"TAG ALONG ASSET SALE ELECTION NOTICE" has the meaning ascribed thereto
in Section 8.01(b).
"TERMINATED INVESTMENT" has the meaning ascribed thereto in Section
6.06(c)(ii).
"TERMINATION DATE" has the meaning ascribed thereto in Section 6.08.
"THIRD PARTY CO-INVESTMENT RIGHT" has the meaning ascribed thereto in
Section 6.02.
"TRIGGERING DECISION" has the meaning ascribed thereto in Section 3.01.
"TRUST" has the meaning ascribed thereto in the preamble.
ARTICLE 2
MAJOR DECISIONS; CONSULTATION AND INFORMATION RIGHTS
Section 2.01 Major Decisions.
As used herein, "Major Decision" means the following decisions
(including a decision not to act) with respect to any Investment Vehicle or any
Investment held by any Investment Vehicle:
(a) selling any Investment (or deciding not to accept a bona fide
purchase offer made by a third party with respect to an Investment);
(b) financing or refinancing any indebtedness of such Investment
Vehicle or of any subsidiary thereof, or which is secured by any asset owned by
such Investment Vehicle or any such subsidiary;
(c) agreeing to perform or consenting to Material Alterations
(other than tenant improvement work) to any building owned by such Investment
Vehicle;
(d) calling or accepting capital contributions other than capital
contributions explicitly approved by GMIMCo in connection with formation of such
Investment Vehicle ("Approved Capital Contributions") (it being understood that
all capital contributions required or
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permitted to be made to the Trust or the MT Trust under the terms of the
Organization Agreement are Approved Capital Contributions);
(e) issuing additional securities of such Investment Vehicle or of
any of their subsidiaries, other than in connection with Approved Capital
Contributions;
(f) entering into a new lease, materially modifying, extending,
renewing or terminating an existing lease, in each case affecting in excess of
15% of the net rentable area of the building in which space is leased or to be
leased by that tenant (each of the foregoing, a "Major Lease Decision");
(g) terminating or entering into any property management agreement
or agreeing to material modifications to any property management agreement other
than as may be explicitly approved by GMIMCo or as may be entered into in
connection with the formation of such Investment Vehicle;
(h) entering into or agreeing to material modifications of any
agreement with HILP, the Holding Partnership or any of their respective
Affiliates other than as may be explicitly approved by GMIMCo in connection with
formation of such Investment Vehicle;
(i) taking or electing not to take any other action that, in the
opinion of management of such Investment Vehicle, is reasonably likely to have
an impact on the value of any Investment owned by such Investment Vehicle, in
any case in excess of five percent (5%) of the then fair market value thereof;
provided, however, that GMIMCo shall have the right to dispute management's
assessment of the impact of the action by delivering written notice to such
Investment Vehicle within thirty days following the decision to take or not take
the applicable action. If the parties acting in good faith do not reach
agreement as to the extent of the impact within thirty days following GMIMCo's
notice, the amount of such impact will be determined at the Investment Vehicle's
expense by an independent third party selected by GMIMCo; and
(j) such Investment Vehicle deciding not to pursue lease
\ negotiations with a particular tenant, but only if a building on which such
Investment Vehicle has an interest could accommodate that tenant.
Section 2.02 Consultation and Information Rights.
(a) Purchase Offers. Each Investment Vehicle shall (i) promptly
(and in any event within three Business Days) inform GMIMCo of any bona fide
offer received by HILP, the Holding Partnership or such Investment Vehicle or
any of their respective Affiliates from a third party with respect to a proposed
acquisition of an Investment or Investments in which such Investment Vehicle has
an interest; (ii) provide GMIMCo with all relevant information relating to such
offer and the offeror as has been received or obtained by HILP, the Holding
Partnership or such Investment Vehicle, or any of their respective Affiliates;
and (iii) consult with GMIMCo during the negotiation process and prior to taking
definitive action with respect to such offer. GMIMCo shall keep the terms of any
purchase offers received by it pursuant to the preceding sentence confidential.
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(b) Major Decisions. With respect to Major Decisions as described
in clauses (a) through (e) and (g) through (i) of Section 2.01, at least
forty-five days (or in the case of an emergency, as soon as reasonably
practicable) prior to the formal Board of Trustees meeting (or analogous
governance event with respect to a GM/Xxxxx Co-Investment Vehicle that is not a
trust), the Investment Vehicle with respect to which such Major Decision is
being considered shall (i) provide GMIMCo with all relevant information relating
to such Major Decision as has been obtained or produced by such Investment
Vehicle, HILP, the Holding Partnership, or any Affiliate of the foregoing,
including without limitation all materials presented to the Board of Trustees or
applicable governing body of such Investment Vehicle with respect to such Major
Decision, (ii) promptly provide additional analysis or follow-up as reasonably
requested by GMIMCo and (iii) consult with GMIMCo prior to taking definitive
action with respect to such Major Decision.
(c) Major Lease Decisions. With respect to Major Lease Decisions
being considered by any Investment Vehicle, such Investment Vehicle shall (i) at
least ten days prior to making an initial proposal to a tenant, provide GMIMCo
with a summary of the material economic terms of the proposal, including but not
limited to, stacking plans, square footage, alternatives available to building
ownership and to the tenant, and any encumbrances including but not limited to
rights to terminate, renew, expand, contract or cancel and a list of the
following net effective rent numbers calculated according to a method
satisfactory to GMIMCo: (a) the initial proposal, (b) the target or goal, (c)
the lowest acceptable number and (d) the estimated net effective rent at
competitive projects, and (ii) during the negotiation process, consult with
GMIMCo and provide updated information and analyses, including net effective
calculations for the tenant's counter-offers and landlord's offers in response
thereto.
ARTICLE 3
FORCED SALE/REDEMPTION/PURCHASE RIGHT
Section 3.01 Forced Sale/Redemption Right. If GMIMCo is not
satisfied with any Major Decision made by any Investment Vehicle (other than a
decision by such Investment Vehicle to sell an Investment), GMIMCo shall have
the right (the "Forced Sale Right") to require such Investment Vehicle to sell
the Investment or Investments which are affected by such Major Decision, which
may be all Investments owned by such Investment Vehicle, or, at the election of
the governing body of the applicable Investment Vehicle or as provided in the
organizational documents of such Investment Vehicle if such Investment Vehicle
only owns affected Investments, to redeem the entire interest of all GM
Investors in such Investment Vehicle. In the event of such sale or redemption,
there shall be distributed to the GM Investors having an interest in such
Investment Vehicle an amount equal to the distribution that would have been
payable to such GM Investors if each affected Investment had been sold for its
Appraised Value and the Projected Net Proceeds had been distributed in
accordance with the organizational document of the Investment Vehicle. Each
Investment Vehicle shall notify GMIMCo promptly (and in any event within three
Business Days) of any Major Decision made by such Investment Vehicle. If GMIMCo
is dissatisfied with such Major Decision, it may exercise the Forced Sale Right
by delivering (i) within ten days following GMIMCo's receipt of notice of such
Major Decision, an initial written notice (the "Initial Forced Sale Notice") to
such Investment Vehicle, indicating that GMIMCo may elect to exercise the Forced
Sale Right and identifying the Major Decision with which it is not satisfied
(such decision a "Triggering Decision") and the
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Investments affected by such Major Decision (each a "Forced Sale Investment"),
and, if applicable, that, pursuant to Section 5.02, such Investment Vehicle
should seek a new appraisal or the parties should otherwise attempt to agree on
the Appraised Value and Projected Net Proceeds with respect to the Forced Sale
Investments, and (ii) within forty-five days following GM's receipt of notice of
such Major Decision, a formal written notice indicating GMIMCo's election to
exercise the Forced Sale Right (the "Forced Sale Notice") with respect to the
applicable Investment Vehicle or Vehicles. The distribution or redemption
triggered by the Forced Sale Right must occur (i) if the Forced Sale Notice is
given prior to the Lock Out Date, on or prior to the later of (A) the Lock Out
Date and (B) the first anniversary of the Forced Sale Notice or (ii) if the
Forced Sale Notice is given after the Lock Out Date, on or prior to the first
anniversary of the Forced Sale Notice; provided, however, if the distribution or
redemption does not occur within nine months following the date of the Forced
Sale Notice, from and after the date that is nine months following the Forced
Sale Notice until distribution or redemption, the applicable Investment Vehicle
will be required to make quarterly preferred distributions to the GM Investors
holding an interest therein in an amount equal to 1/4 of the annual cumulative
return at the Distribution Rate, compounded quarterly, on the amount of proceeds
that would have been distributable to the GM Investors if the Forced Sale
Investment or Investments had been sold at its Appraised Value and the Projected
Net Proceeds as of the date of the Forced Sale Notice, which distributions shall
be in lieu of any dividends or distributions to GM Investors on account of such
Investment. Any such quarterly preferred distribution shall be prorated for a
partial quarter, and dividends or distributions which are attributable to an
Investment in any vehicle that owns more than one Investment shall be determined
by allocating to such Investment an amount equal to (y) the entire amount of the
distributions or dividends for such vehicle for the relevant period, multiplied
by (z) a fraction, the numerator of which is the net operating revenues
generated by such Investment and the denominator of which is the entire net
operating revenues for such vehicle for the relevant period.
Section 3.02 Forced Sale Process. In the event of a forced sale, the
applicable Investment Vehicle may, at its election, sell each Forced Sale
Investment to any third party or to HILP, the Holding Partnership, the Xxxxx
Core Fund or an Affiliate of one of the foregoing for such terms as may be
agreed by such Investment Vehicle and such other party. The Investment Vehicle
must distribute all proceeds from a forced sale (or, if applicable, apply such
proceeds to the redemption of the interests of GM Investors in such Investment
Vehicle) promptly following the closing of that sale, and any proceeds held back
at closing must be distributed immediately upon release.
Section 3.03 Superceding Provisions. To the extent the organizational
documents of an Investment Vehicle provide for the making of distributions or
redemption payments in respect of Forced Sale Investments, then, notwithstanding
anything to the contrary in this Agreement, the applicable provisions of such
organizational documents, and not this Article 3, shall govern the making of
distributions and/or redemption payments in respect of any Forced Sale
Investments held by such Investment Vehicle (provided that such provisions of
such organizational documents have been approved or consented to by GMIMCo, on
behalf of the GM Investors holding an interest in such Investment Vehicle, and
by Holding Partnership or Xxxxx Core Fund). Without limiting the generality of
the foregoing, notwithstanding anything to the contrary in this Agreement, (i)
the making of any distributions or redemption payments by the Trust in respect
of any Forced Sale Investment held by the Trust shall be governed by
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Sections 6.6(c), 6.6(d) and 6.7 of the Declaration of Trust, and not
by this Article 3, and (ii) the making of any distributions or redemption
payments by the MT Trust in respect of any Forced Sale Investment held by the MT
Trust shall be governed by Sections 6.6(c), 6.6(d) and 6.7 of the MT Declaration
of Trust, and not by this Article 3.
ARTICLE 4
REDEMPTION RIGHT
Section 4.01 Future Investments. At the time the Holding Partnership or
Xxxxx Core Fund acquires an Investment in which one or more GM Investors
acquires an interest pursuant to a Co-Investment Right, the Holding Partnership
or Xxxxx Core Fund will, at the time of the acquisition, establish a three-year
period (the "Liquidation Period") during which the GM/Xxxxx Co-Investment
Vehicle will be obligated to acquire or redeem or arrange for the acquisition of
all of the GM Investors' interests in such Investment, such period to end no
later than the twelfth anniversary of the date the GM Investors acquire their
interests in such Investment. GMIMCo may repeatedly extend the Liquidation
Period for any such Investment to a later three year period by giving notice to
such effect to the applicable GM/Xxxxx Co-Investment Vehicle not less than one
year prior to the start of the Liquidation Period then in effect. The GM/Xxxxx
Co-Investment Vehicle will acquire or redeem or arrange for the acquisition of
the GM Investors' interests in each such Investment, or arrange for the sale of
such asset and the distribution of the GM Investors' share of the proceeds of
such sale to the GM Investors, at any time during the Liquidation Period for the
Investment. Any such acquisition or redemption of the GM Investors' interest in
an Investment shall be, if the Investment is sold to a third party, for the
amount that is distributed to the GM Investor by such GM/Xxxxx Co-Investment
Vehicle as a result of such sale, and if it is not sold to a third party, then
the amount that would be distributed by such GM/Xxxxx Co-Investment Vehicle if
the Investment were sold for its Appraised Value and the Projected Net Proceeds
were distributed to all Persons holding an interest in such GM/Xxxxx
Co-Investment Vehicle. The GM/Xxxxx Co-Investment Vehicle shall give the GM
Investors at least sixty days written notice of the particular date during the
Liquidation Period (the "Proposed Liquidation Date") in which the GM/Xxxxx
Co-Investment Vehicle intends to acquire or redeem the GM Investors' interests
in such GM/Xxxxx Co-Investment Vehicle and the appraisal or appraisals on which
the acquisition or redemption will be based (if the Investment is not sold to a
third party). GMIMCo may then elect to require a new appraisal or appraisals for
such acquisition or redemption in accordance with Section 5.02. If the Holding
Partnership or the GM/Xxxxx Investment Co-Investment Vehicles, as applicable,
elects to sell such Investment, it may sell the Investment to any third party
for any price agreed to by such third party or to HILP, the Holding Partnership,
the Xxxxx Core Fund or an Affiliate of one of the foregoing for its Appraised
Value.
Section 4.02 Remedy. If the sale or redemption of each GM Investor's
interest in a particular Investment does not occur by the end of the relevant
Liquidation Period, as applicable, in addition to all other rights and remedies
available to the GM Investors, from and after expiration of the Liquidation
Period, the GM/Xxxxx Co-Investment Vehicle will be required to make quarterly
preferred distributions to the applicable GM Investors in an amount equal to 1/4
of the annual cumulative return at the Default Rate, compounded quarterly, on
the amount of proceeds that would have been distributable to the GM Investors if
the Investment or Investments had been sold and the Projected Net Proceeds
distributed upon expiration of the
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Liquidation Period, which distributions shall be in lieu of any dividends or
distributions to GM Investors on account of such Investment. Any such quarterly
preferred distribution shall be prorated for a partial quarter, and dividends or
distributions which are attributable to an Investment in any vehicle that owns
more than one Investment shall be determined by allocating to such Investment an
amount equal to (y) the entire amount of the distributions or dividends for such
vehicle for the relevant period, multiplied by (z) a fraction, the numerator of
which is the net operating revenues generated by such Investment and the
denominator of which is the entire net operating revenues for such vehicle for
the relevant period.
Section 4.03 Superceding Provisions. To the extent the organizational
documents of a GM/Xxxxx Co-Investment Vehicle provide for the establishment or
adjustment of a Liquidation Period for Investments held by such GM/Xxxxx
Co-Investment Vehicle and/or for the liquidation of such Investment and the
making of distributions or redemption payments in respect thereof as
contemplated by this Article 4, then, notwithstanding anything to the contrary
in this Agreement, the applicable provisions of such organizational documents,
and not this Article 4, shall govern the establishment and adjustment of such
Liquidation Period and the making of such distributions and/or redemption
payments (provided that such provisions of such organizational documents have
been approved or consented to by GMIMCo, on behalf of the GM Investors holding
an interest in such Investment Vehicle, and by Holding Partnership or Xxxxx Core
Fund).
ARTICLE 5
APPRAISAL
Section 5.01 Appraised Value. As used herein, "Appraised Value" means,
with respect to an Investment, the fair market value of such Investment, as set
forth in the most recent appraisal of the Investment determined in accordance
with Section 5.02.
Section 5.02 Appraisals. Each Investment Vehicle shall obtain annual
opinions as to the Appraised Value and Projected Net Proceeds of each Investment
held by it. Any Person selected to appraise an Investment must be a Qualified
Appraiser. Appraisers will be rotated or replaced so that no Investment is
appraised by the same appraiser for more than three consecutive years. GMIMCo
shall have the right to approve the Qualified Appraiser and the assumptions
underlying each appraisal, such approval not to be unreasonably withheld. If (i)
GMIMCo does not approve the assumptions underlying an appraisal and the
applicable Investment is the subject of an Initial Forced Sale Notice or a
redemption pursuant to Article 4, (ii) the Appraised Value has not been
determined within the one year period prior to an Initial Forced Sale Notice or
the Proposed Liquidation Date, as applicable, or (iii) an event (including a
bona fide third party purchase offer that differs from the most recent appraisal
by more than five percent (5%) (but not including any such bona fide offer
received in connection with the marketing of an Investment for sale for purposes
of funding any redemption or other payments required to be made to any GM
Investor under the terms of this Agreement)) has occurred subsequent to the most
recent appraisal which GMIMCo or the Holding Partnership believes would be
reasonably likely to have had a material effect on the value of the Investment,
then the parties shall attempt to agree on an Appraised Value and Projected Net
Proceeds, and if the parties are unable to reach such an agreement, within
twenty days after the applicable Initial Forced Sale Notice or at least twenty
days after GMIMCo receives notice of the Proposed
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Liquidation Date, the applicable Investment Vehicle shall obtain a new appraisal
or appraisals with a Qualified Appraiser and assumptions approved by GMIMCo
(such approval not to be unreasonably withheld), as follows:
GMIMCo shall notify the applicable Investment Vehicle in writing (the
"Appraisal Notice") of its intent to trigger this appraisal process. Within ten
days following the Appraisal Notice (the "Appointment Date"), each of GMIMCo, on
the one hand, and such Investment Vehicle, on the other hand, shall select a
Qualified Appraiser. Within ten days following the Appointment Date, the first
two Qualified Appraisers shall select a third Qualified Appraiser. Within thirty
days following the Appointment Date, each of the first two Qualified Appraisers
shall render its opinion as to the Appraised Value of the affected Investment or
Investments and the Projected Net Proceeds that would be distributable with
respect to a sale thereof as of the date of the appraisal or, in the case of a
forced sale, as of the date immediately prior to the earlier of (i) the
Triggering Decision or (ii), if applicable, public announcement or other media
coverage of the Triggering Decision (i.e., without giving effect to the
Triggering Decision). If the difference, if any, between the opinions of the
first two Qualified Appraisers as to the Projected Net Proceeds is not greater
than one percent (1%) of the average of the two opinions, the Projected Net
Proceeds shall be the average of the two opinions. If the difference is greater
than one percent (1%), the third Qualified Appraiser shall select the opinion of
one of the first two Qualified Appraisers to be the Projected Net Proceeds.
ARTICLE 6
CO-INVESTMENT RIGHTS
Section 6.01 20% Co-Investment Right. GMIMCo shall have the right (the
"20% Co-Investment Right"), but not the obligation, on the terms and subject to
the conditions set forth in this Agreement, to cause one or more GM Investors to
co-invest with the Holding Partnership in connection with each Investment made
by the Holding Partnership (specifically including any Qualified Investments
made by the Xxxxx Core Fund). It is understood that the Holding Partnership does
not intend to own Investments directly but rather indirectly through the Xxxxx
Core Fund. Accordingly, any time reference is made in Article 6 to Investments
made by the Holding Partnership, it shall specifically include Investments made
by the Xxxxx Core Fund, and any co-investment contemplated hereby shall be made
with Xxxxx Core Fund or an Affiliate of Xxxxx Core Fund. Subject to the rights
that may be granted to Major Holding Partnership Investors as described in
Section 6.09, the Holding Partnership will have the obligation to offer GMIMCo
at least twenty percent (20%) of the total equity capital (and the Holding
Partnership may offer a greater percentage) to be invested in any Holding
Partnership Investment; provided that, if at the time the Holding Partnership
identifies a Prospective Investment and at the time the Holding Partnership
actually closes on such Investment, the aggregate interest held by GM Investors
in Holding Partnership Investments exceeds twenty percent (20%) (including in
the denominator any co-investment equity of Other Co-Investors analogous to the
20% Co-Investment Right), excluding from both the numerator and the denominator
GM Investors' equity investment in (i) the First Closing Properties and
Manhattan Tower and (ii) any investments acquired pursuant to the Third Party
Co-Investment Right (defined below) (the "20% Threshold"), then the Holding
Partnership may offer GMIMCo less than twenty percent (20%) of a Prospective
Investment so long as the offered interest, when combined with all other
interests then held by GM Investors as a result of exercise of the 20%
Co-Investment Right,
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would at least equal the 20% Threshold. In order to exercise the 20%
Co-Investment Right, GMIMCo must agree to cause one or more GM Investors to
acquire at least twenty percent (20%) of the Prospective Investment (or such
lesser amount as may be offered in accordance with the provisions of this
Section 6.01). Each of HILP and the Holding Partnership shall take or cause any
of its respective Affiliates, if applicable, to take all actions necessary to
fulfill the obligations of the Holding Partnership under this Article 6. Unless
otherwise agreed by the Holding Partnership and GMIMCo, each co-investment under
this Section 6.021 shall be on the same economic terms between HILP and the
Xxxxx Investor, on the one hand, and the GM Investors, on the other hand, as the
Investment in the First Closing Properties and Manhattan Tower (i.e., the Xxxxx
Investor or its Affiliate will receive a 7.5% promoted interest but no fees
other than property-level management, leasing and construction and development
management fees in the amounts provided for in the form of Property Management
and Leasing Agreement attached as Exhibit B to the Organization Agreement. (the
"Standard GM Investor Co-Investment Terms").
Section 6.02 Third Party Co-Investment Right. In addition to the 20%
Co-Investment Right, in the event the Holding Partnership desires to seek one or
more third party co-investors (other than GMIMCo or Other Co-Investors) for a
Prospective Investment, prior to the Termination Date, GMIMCo shall have the
right (the "Third Party Co-Investment Right", and together with the 20%
Co-Investment Right, the "Co-Investment Rights" and each, a "Co-Investment
Right"), but not the obligation, to invest at least 50% of the co-investment
capital sought by the Holding Partnership from such third parties for such
Prospective Investment, and the Holding Partnership will have the obligation to
offer GMIMCo the opportunity to invest at least 50% of such coinvestment
capital. In order to exercise the Third Party Co-Investment Right, GMIMCo must
agree to cause GM Investors to invest at least 50% of the capital to be invested
from sources other than the Holding Partnership. It is understood and agreed
that the co-investment rights described in this Section 6.02 apply only where
the Holding Partnership seeks third party co-investors who are not GMIMCo or
Other Co-Investors. Unless otherwise agreed by the Holding Partnership and
GMIMCo, each co-investment under this Section 6.02 shall be on the Standard GM
Investor Co-Investment Terms or, if GMIMCo elects, the economic terms offered to
any third party, if any.
Section 6.03 Exceptions. GMIMCo will not be entitled to any
Co-Investment Rights in the following circumstances:
(a) Whether or not GMIMCo (on behalf of the Current GM Investors)
participates in the acquisition of Manhattan Tower pursuant to the Organization
Agreement, GMIMCo will have no Co-Investment Rights with respect to the First
Closing Properties or Manhattan Tower.
(b) In the event the current owner of a Qualified Investment
desires to contribute such Qualified Investment to the Holding Partnership or
the Xxxxx Core Fund and receive limited partnership interests in the Holding
Partnership or the Xxxxx Core Fund on a tax-deferred basis, rather than cash or
stock in exchange for such Qualified Investment, GMIMCo will have no
co-investment rights with respect to any portion of such Qualified Investment
being made through the issuance of such tax-deferred consideration.
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Notwithstanding anything in this Agreement to the contrary, in the
event HILP notifies GMIMCo in writing that HILP has ceased marketing the Holding
Partnership and/or the Xxxxx Core Fund to potential investors and has returned
or released all uninvested committed capital to the Holding Partnership and the
Xxxxx Core Fund, then HILP and its Affiliates shall no longer be obligated to
present prospective Qualified Investments to the Holding Partnership and the
rights of GMIMCo under this Article 6 shall terminate.
Section 6.04 Structure. For purposes of determining when the promoted
interest has been earned with respect to the First Closing Properties and
Manhattan Tower, any future Co-Investment by GM Investors will not be pooled
with the First Closing Properties and Manhattan Tower. In addition, any promoted
interest that may be payable with respect to any co-investment will not be
pooled, except to the extent that any such co-investments are acquired as part
of a single transaction. GMIMCo and the GM Investors will have management,
consultation, information, forced sale and redemption rights with respect to any
interests acquired in an Investment pursuant to a Co-Investment Right equal to
or the same as the management, consultation, information, forced sale and
redemption rights granted to GMIMCo and the Current GM Investors with respect to
the First Closing Properties and Manhattan Tower. The parties will cooperate
with each other in good faith to structure any co-investment made under this
Article 6 to take into account any ERISA, tax and similar requirements either
may have. It currently is anticipated that future co-investments will be
structured so that the GM/Xxxxx Co-Investment Vehicle and an Affiliate of the
Holding Partnership each hold an indirect undivided interest in the Investment
as tenants in common. The governing documents of the GM/Xxxxx Co-Investment
Vehicle and a co-tenancy agreement between the GM/Xxxxx Co-Investment Vehicle
and the applicable Affiliate of the Holding Partnership will set forth the
rights and obligations of the parties with respect to the Investment. In the
event of any conflict between the terms of any such governing documents and
co-tenancy agreement, on the one hand, and this Agreement on the other, the
terms of such governing documents and co-tenancy agreement shall control;
provided that such governing documents and co-tenancy agreement have been
approved or consented to by GMIMCo, on behalf of the GM Investors having an
interest in such GM/Xxxxx Co-Investment Vehicle, and by Holding Partnership or
Xxxxx Core Fund.
Section 6.05 Qualified Investments. During the period commencing on
August 19, 2003, and ending on the Termination Date, HILP and its Affiliates
shall present the Holding Partnership any prospective Qualified Investment that
becomes available to HILP or any Affiliate thereof; provided that such
restriction shall not apply to the following:
(a) Any investment which the HP General Partner has decided not to
make or pursue based on a good faith determination that such investment is
inappropriate or inadvisable for the Holding Partnership, whether due to
capacity, diversification, rate of return objectives or other considerations;
(b) Any investment by the Xxxxx U.S. Office Value Added Fund of
any other fund or investment program affiliated with HILP which has investment
policies and objectives which differ substantially from those of the Holding
Partnership and which, in the good faith judgment of the HP General Partner,
does not compete in any material way for investments that would be suitable for
the Holding Partnership;
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(c) Any investment in an office building more than 75% leased
(including a pre-lease) to a single tenant under a lease having at least two
years remaining on its term (including extension options), but only to the
extent such building must be offered first to Xxxxx Corporate Properties, a
joint venture between Affiliates of HILP and the New York Common Fund ("HCP");
(d) Any non-brokered suburban office asset with a purchase price
f $65 million or less that was originated by General Electric Capital
Corporation for Xxxxx Suburban Office Venture, LLC, an entity formed by an
Affiliate of HILP and an Affiliate of General Electric Capital Corporation for
the purpose of acquiring suburban office buildings on a national basis ("HSOV");
(e) Passive investments (i.e., investments which do not involve
active participation in management by HILP or any Affiliate of HILP); and
(f) Any investment made by National Office Partners Limited
Partnership, a limited partnership formed by the State of California Public
Employees' Retirement System and an Affiliate of HILP ("NOP") or by HSOV,
pursuant to an investment opportunity allocated to NOP or HSOV in accordance
with the HILP investment allocation procedure described on Schedule 6.05.
Neither HILP nor its Affiliates shall place any other fund or
investment vehicle in the queue for investment allocation with the Xxxxx Core
Fund, NOP and HSOV.
Section 6.06 Co-Investment Procedures. The parties will endeavor in
good faith to develop and agree upon mutually acceptable procedures for exercise
of the Co-Investment Rights which shall be based on the actual procedures HILP
and GMIMCo have used in connection with other recent investments. The parties
agree that GMIMCo shall not bear any costs incurred by the Holding Partnership,
HILP or any of their Affiliates with respect to a Qualified Investment in which
GMIMCo does not ultimately participate, except for costs incurred specifically
at the request of GMIMCo.
Section 6.07 Default. In the event that, except as otherwise permitted
by Section 6.05, HILP fails to present to GMIMCo for its consideration pursuant
to this Article 6 any Qualified Investment that becomes available to the Holding
Partnership, or the Xxxxx Core Fund or any of their respective Affiliates during
the period beginning on August 19, 2003, and ending on the Termination Date,
GMIMCo shall have the right to exercise all rights and remedies available to it,
including, without limitation, the right to compel HILP to comply with the
provisions hereof by seeking specific performance of the terms of this
Agreement.
Section 6.08 Termination. The Co-Investment Rights shall terminate on
the date (the "Termination Date") that is the earlier of (i) the Forced Sale
Date, and (ii) the later of (A) the Reduced Capital Date and (B) August 19,
2011. As used herein, "Forced Sale Date" means the date on which GMIMCo
exercises its Forced Sale Right with respect to a third Triggering Decision;
provided, however, that any exercise by GMIMCo of its Forced Sale Right as a
result of any Conflict Decision shall not be included in determining whether
GMIMCo has reached the threshold number of exercises. As used herein, "Reduced
Capital Date" means
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the date on which the amount of unreturned capital of GM Investors invested in
the Trust, MT Trust and in any other Holding Partnership Investments has been
less than $100 million in the aggregate for a continuous period of more than
three consecutive years, and the Holding Partnership has offered and GMIMCo has
rejected sufficient co-investment opportunities during the relevant three year
period so that if one or more of such offered co-investment opportunities had
been accepted by GMIMCo, the aggregate investment of GM Investors would have
exceeded $100 million during the three year period. Notwithstanding the
foregoing to the contrary, if the Trust sells the property known as 000
Xxxxxxxxx Xxxxxx in New York City, the threshold will be reduced from $100
million to $50 million until such time as the Holding Partnership directly or
indirectly owns more than $600 million in real property assets (based on
original acquisition cost), at which time the threshold will return to $100
million.
Section 6.09 Co-Investment by Others. Except as set forth in this
Section 6.09, neither HILP nor the Holding Partnership shall, without the prior
consent of GMIMCo in its sole discretion, enter into an agreement where it is
bound to offer any Person the right to make co-investments with the Holding
Partnership. Notwithstanding the foregoing, the Holding Partnership and/or the
Xxxxx Core Fund may (i) make such an agreement with up to two Major Holding
Partnership Investors on the same terms (including size and economics) as
GMIMCo's 20% Co-Investment Right, subject to adjustment as set forth in this
Section 6.09 (provided that the Holding Partnership can offer different terms so
long as such different terms are also offered to GMIMCo) and (ii) make such an
agreement with any Person with respect to participation in investments for which
the Holding Partnership or the Xxxxx Core Fund seeks third party capital,
provided such rights do not conflict with the Third Party Co-Investment Right.
If any co-investment rights are granted pursuant to clause (i) above, the
Holding Partnership shall offer co-investment rights to each of GMIMCo and the
other Major Holding Partnership Investors with co-investment rights (the "Other
Co-Investors") in accordance with a queue as follows:
The Holding Partnership will offer the initial co-investment
opportunity to investors in the order that they committed to the Holding
Partnership, the Xxxxx Core Fund, the Trust or the MT Trust, as the case may be.
If an investor accepts a co-investment opportunity that investor goes to the end
of the queue. The Holding Partnership will then offer the next co-investment
opportunity first to that investor in the queue who was not offered a
co-investment opportunity in a prior round because the investor immediately
ahead in the queue accepted the co-investment opportunity in the prior round. If
the Holding Partnership offers all investors a co-investment opportunity in a
round (either because all investors declined or because the one at the end of
the queue accepted it), then the Holding Partnership will offer the next
co-investment opportunity to the investor who was at the head of the queue for
the prior round. Notwithstanding the foregoing to the contrary in this Section
6.09, if an investor becomes an Other Co-Investor after the Holding Partnership
has already offered one or more co-investments to other investors, that new
investor goes to the end of the queue for the first round in which it
participates even though it has not yet been shown any co-investment
opportunities.
ARTICLE 7
MEETINGS; INFORMATION RIGHTS
Section 7.01 Meetings. Representatives of HILP and the Holding
Partnership shall meet with representatives of GMIMCo (without other investors
present) at least twice each
16
calendar year, one time during the thirty days following GMIMCo's receipt of the
annual report for the Holding Partnership and for Xxxxx Core Fund and one time
approximately six months thereafter. HILP and the Holding Partnership shall
cause GMIMCo to be invited to observe all Xxxxx Core Fund and Holding
Partnership investor and advisory committee meetings.
Section 7.02 Co-Investment Prospects. At least one time in each
calendar quarter, the Holding Partnership and HILP shall send to GMIMCo a
summary of any prospective Qualified Investments expected to be considered by
the Holding Partnership, HILP or any of their respective Affiliates, and the
quarterly report prepared by the HILP Investment Allocation Committee for the
prior quarter, showing how all Prospective Investments were allocated pursuant
to Schedule 6.05 as well as a brief summary of each Prospective Investment that
HILP believes may be presented to GMIMCo during the next six month period.
GMIMCo will keep confidential non-public information related to investments
sourced through HILP's proprietary deal flow.
ARTICLE 8
TAG ALONG RIGHTS; RIGHT OF FIRST NEGOTIATION
Section 8.01 Tag Along Rights.
(a) In the event of a decision by Xxxxx-Sumisei U.S. Core Office
Trust, the Holding Partnership, the Xxxxx Core Fund or any of their respective
Affiliates (an "Offering Entity") to sell its securities in an underwritten
(firm commitment) public offering registered under the Securities Act of 1933,
as amended, resulting in the listing of the Offering Entity's securities on a
nationally recognized stock exchange (an "Offering"), before such Offering
Entity proposes to make any transfer of its securities in the Offering, such
Offering Entity shall deliver written notice (an "Offer Notice") to GMIMCo. The
Offer Notice will disclose in reasonable detail the proposed terms and
conditions of the Offering to the extent such terms and conditions are
reasonably determinable, in consultation with the managing underwriter of the
Offering, at the time the Offer Notice is given. The Offering Entity shall not
consummate the Offering until at least thirty days after the Offer Notice has
been given to the GMIMCo. GMIMCo can elect to require the Offering Entity to
allow the Trust, the MT Trust or any GM/Xxxxx Co-Investment Vehicle to
participate with the Offering Entity in the contemplated Offering (a
"Participating GM Entity"), by delivering written notice (the "Tag Along
Election Notice") on behalf of the Participating GM Entity to the Offering
Entity within thirty days after receipt of the Offer Notice, in which event the
Offering Entity and Participating GM Entity shall (i) use their good faith
efforts to effect the merger, contribution of assets or other consolidation of
their respective assets so that the contemplated Offering is conducted by an
entity (the "Consolidated Offering Entity") in which interests are held by
Persons which held interests in the Offering Entity and by GM Investors and
other Persons which held interests in the Participating GM Entity (all such
Persons, "Participating Investors"), with the interest of each Participating
Investor in the Consolidated Offering Entity to be determined by reference to
the valuation of such Person's interest in the Offering Entity or Participating
GM Entity, as applicable, using the same valuation methodology for all such
interests; provided that if the parties are unable to agree on the valuations of
all such interests, such valuations shall be determined by appraisals conducted
in accordance with the procedures provided for the determination of Projected
Net Proceeds in the second paragraph of Section 5.02. All Participating
Investors, including the GM Investors which
17
are Participating Investors, shall have the same rights and be subject to the
same restrictions with respect to the conduct of and participation in the
Offering. Without limiting the generality of the foregoing, each Participating
Investor shall enter into such customary affiliate letters, lock-up or similar
agreements as the managing underwriter of the Offering may require.
(b) In the event of a decision by the Holding Partnership to sell
all or substantially all of its assets in a portfolio sale to a third party
purchaser, whether by asset-level or entity-level transfer (an "Asset Sale"),
before the Holding Partnership proposes to consummate the Asset Sale, the
Holding Partnership shall deliver written notice (an "Asset Sale Offer Notice")
to GMIMCo and the Holding Partnership shall not consummate the Asset Sale until
at least thirty days after the Asset Sale Offer Notice has been given to GMIMCo.
GMIMCo can elect to require the Holding Partnership to include the assets held
by the Trust, the MT Trust and/or any GM/Xxxxx Co-Investment Vehicle in the
proposed Asset Sale by delivering written notice (the "Tag Along Asset Sale
Election Notice") to the Holding Partnership within thirty days after receipt of
the Asset Sale Offer Notice, in which event the Holding Partnership shall cause
the assets of the applicable Investment Vehicle to be included in the Asset
Sale, based on the same valuation methodology applied to other Holding
Partnership assets; provided that if the parties are unable to agree on the
allocation of consideration among the assets included in such Asset Sale, the
valuation of each asset as to which there is disagreement shall be determined by
appraisals conducted in accordance with the procedures provided for the
determination of Projected Net Proceeds in the second paragraph of Section 5.02.
Section 8.02 Right of First Negotiation. If the Trust, the MT Trust or
any GM/Xxxxx Co-Investment Vehicle (the "Selling Entity") decides to sell an
Investment other than pursuant to Article 3 and other than to the Xxxxx Core
Fund, HILP, the Holding Partnership or an Affiliate of any of them, then prior
to the marketing of such an asset to third parties, the Selling Entity shall
notify GMIMCo. If GMIMCo shall so elect (on behalf of one or more of the GM
Investors in such Investment, or, if such GM Investors pass or otherwise agree,
on behalf of other investors advised by GMIMCo) by written notice (the "Election
Notice") delivered within ten days, the Selling Entity and GMIMCo shall enter
into good faith discussions concerning the purchase of such Investment by GMIMCo
or an entity advised by it. If, however, the parties have not reached agreement
(each acting in its sole and absolute discretion) for the purchase and sale of
such Investment within thirty days after the Election Notice, the Selling Entity
shall have no further obligations to GMIMCo and the Selling Entity shall be free
to sell such asset to a third party upon such terms and conditions as it may
elect in its sole discretion. By way of clarification, the Selling Entity shall
be free to sell such asset at a price less than the price offered by GMIMCo and
the Selling Entity shall have no obligation to re-offer such asset to GMIMCo in
such event. Further, the failure of the Selling Entity to deliver any
information requested by GMIMCo concerning such asset shall not extend in any
way such thirty-day period, but the Selling Entity shall use good faith efforts
to deliver such information as long as the same can be done at a minimal cost to
the Selling Entity. In all events, if agreement is reached for GMIMCo to
purchase an Investment, it shall be required to post a non-refundable deposit
equal to the greater of $2 million or one percent (1%) of the gross purchase
price and the closing shall occur within sixty days after such agreement is
reached.
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ARTICLE 9
MISCELLANEOUS
Section 9.01 Successors and Assigns. This Agreement shall bind and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. Neither this Agreement nor any right hereunder may be
assigned by any party without the prior written consent of the other parties
hereto.
Section 9.02 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to the principles of conflict of laws thereof.
Section 9.03 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
Section 9.04 Amendment. This Agreement may be amended only by a written
instrument signed by each of the parties hereto.
Section 9.05 Beneficiaries. This Agreement is entered into solely for
the benefit of the parties hereto, and the parties do not intend that any other
Person shall be a third-party beneficiary of the covenants by any party
contained in this Agreement.
Section 9.06 No Public Announcement. Each of the parties hereto agrees
that it will not, without the prior written consent of the other parties, issue
a press release or make any other public announcement regarding the transaction
contemplated by this Agreement and the Organization Agreement.
Section 9.07 Termination of Certain Rights. In the event one or more GM
Investors transfer their interests in a particular Investment Vehicle so that
the collective GM Investor interest in such Investment Vehicle drops below the
lesser of twenty percent () or the original interest acquired by the GM
Investors, the rights granted to GMIMCo and the GM Investors pursuant to Section
2.02, Article 3, Article 7 and Article 8 of this Agreement shall terminate with
respect to that particular Investment Vehicle and the Investment or Investments
held by it (but rights with respect to all other Investment Vehicles and
Investments shall remain in effect).
Section 9.08 Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) mailed, registered mail, first-class postage paid, (ii) sent
by overnight mail or courier, or (iii) delivered by hand, if to any Person, at
such Person's address, or to such Person's facsimile number, as follows:
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If to the Trust: Hines-Sumisei NY Core Office Trust
c/o Hines Interests Limited Partnership
0000 Xxxx Xxx Xxxx., Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxx
If to the HILP: Xxxxx Interests Limited Partnership
0000 Xxxx Xxx Xxxx., Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
If to Holding Partnership or the c/o Hines Interests Limited Partnership
Hines Core Fund: 0000 Xxxx Xxx Xxxx., Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxx
If to any of the foregoing Xxxxx Xxxxx L.L.P.
entities, with a copy to: 0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx Xxxxxxx, Esq.
If to a GM Investor: Name of such GM Investor
c/o General Motors Investment
Management Corporation
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx
With a copy to: Xxxxxxxx & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, P.C.
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Any party may change the address to which notices, requests, demands or
other communications under this Agreement are to be delivered by giving the
other parties notice pursuant to this Section 9.8. Any notice shall be deemed to
have been duly given if personally delivered or sent by the mails or courier or
by facsimile confirmed by letter and will be deemed received, unless earlier
received, (i) if sent by certified or registered mail, return receipt requested,
when actually received, (ii) if sent by overnight mail or courier, when actually
received, and (iii) if delivered by hand, on the date of receipt.
Section 9.09 Specific Performance. The parties hereto hereby
acknowledge and agree that in the event of any breach of any agreement,
obligation or covenant contained herein by any of HILP, the Holding Partnership
or the Trust on the one hand or GMIMCo or the Current GM Investors on the other
hand, the other interested party or parties would be irreparably harmed and
could not be made whole by monetary damages. It is accordingly agreed that, in
addition to any other right or remedy that such party may have in law or equity
under applicable law, the non-breaching interested party or parties shall be
entitled to compel specific performances of such agreement, obligation or
covenant by the nonperforming party or parties.
Section 9.10 Addition of MT Trust and GM/Hines Vehicles. If GMIMCo
causes one or more GM Investors to invest in Manhattan Tower pursuant to the
Organization Agreement or in any other Investment pursuant to exercise of a
Co-Investment Right, the Holding Partnership or, if applicable, Hines Core Fund
will cause MT Trust and each GM/Hines Co-Investment Vehicle, as applicable, to
enter into an amendment to this Agreement pursuant to which MT Trust or the
GM/Hines Co-Investment Vehicle, as applicable, is added as a party to this
Agreement and agrees to be bound by the obligations set forth herein applicable
to GM/Hines Co-Investment Vehicles.
Section 9.11 Term. This Agreement shall terminate and be of no further
force and effect upon the earlier of (a) one hundred years after the date
hereof, or (b) the later of the Termination Date and the date no GM Investor
owns any interest in the First Closing Properties, Manhattan Tower or any
GM/Xxxxx Co-Investment Vehicle. Further, this Agreement shall terminate as to
Manhattan Tower if GMIMCo does not invest in Manhattan Tower pursuant to the
terms of the Organization Agreement.
21
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
XXXXX INTERESTS LIMITED PARTNERSHIP
By: Hines Holdings, Inc.
By: /s/ XXXXXXX X. XXXXXX
----------------------------
Xxxxxxx X. Xxxxxx
Executive Vice President
HINES-SUMISEI U.S. CORE OFFICE FUND, L.P.
By: Hines US Core Office Capital LLC
By: Xxxxx Interests Limited
Partnership,
By: Hines Holdings, Inc.,
By: /s/ XXXXXXX X. XXXXXX
-------------------------
Xxxxxxx X. Xxxxxx
Executive Vice President
HINES-SUMISEI NY CORE OFFICE TRUST
By: /s/ XXXXX X. XXXX
-----------------------------------
Xxxxx X. Xxxx
President
GENERAL MOTORS INVESTMENT MANAGEMENT
CORPORATION
By: /s/ XXXXXX X. XXXXXXXXX
-------------------------------
Xxxxxx X. Xxxxxxxxx
Managing Director
GMAM CORE PLUS II-NYC-DC, LLC
By:General Motors Investment
Management Corporation, as its
Manager
By: /s/ XXXXXX X. XXXXXXXXX
-------------------------
Xxxxxx X. Xxxxxxxxx
Managing Director
FIRST PLAZA GROUP TRUST
By:XX Xxxxxx Chase Bank, as trustee
for First Plaza Group Trust
By: /s/ XXXX X. XXXXXXXX
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Assistant Treasurer
[-- --]
By: [-- --]
By: [-- --]
____________________________
Name: [-- --]
Title: [-- --]
Schedule 6.05
HILP INVESTMENT ALLOCATION PROCEDURE
If HILP becomes aware of investment opportunities which are permitted
investments for the Holding Partnership (including the Hines Core Fund) and are
not covered by clauses (a) through (e) of Section 6.05, and which one or more of
the fund managers of NOP and HSOV wishes to pursue on behalf of its respective
fund, HILP shall cause such investment opportunities to be allocated as follows:
(A) if the investment opportunity is a suburban office real estate property, the
expected price of which is less than or equal to $65 million, such investment
opportunity shall be allocated on a rotating basis among the Holding
Partnership, NOP and HSOV or (B) if the investment opportunity either is not a
suburban real estate property or the expected price of such investment
opportunity is greater than $65 million, such investment opportunity shall be
allocated on a rotating basis between the Holding Partnership and NOP, in each
case based on the chronological order in which such opportunities arose (as
determined in good faith by the HILP Investment Allocation Committee).
The "HILP Investment Allocation Committee" is a committee of HILP executives and
advisors that is responsible for implementing the investment allocation
procedure described above.
HILP reserves the right to alter these investment allocation procedures to be
consistent with those adopted from time to time by the Holding Partnership and
the Hines Core Fund; provided, however, that such alterations are approved by
GMIMCo, such approval to not be unreasonably withheld as long as the same do not
adversely affect the Co-Investment rights of GMIMCo contained in Article 6.
