Exhibit 1.2
RECKSON OPERATING PARTNERSHIP, L.P.
(a Delaware limited partnership)
Debt Securities
Fully and Unconditionally Guaranteed By
RECKSON ASSOCIATES REALTY CORP.
(a Maryland corporation)
TERMS AGREEMENT
June 21, 2005
To: Reckson Operating Partnership, L.P.
Reckson Associates Realty Corp.
000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We understand that Reckson Operating Partnership, L.P. (the "Operating
Partnership") proposes to issue and sell $250,000,000 in aggregate principal
amount of its 4.00% Exchangeable Senior Debentures due June 15, 2025 (the
"Debentures"), which shall be fully and unconditionally guaranteed (the
"Guarantee") as to the payment of principal and interest thereon by Reckson
Associates Realty Corp. (the "Company"). The Debentures and the Guarantee
shall be collectively referred to herein as the "Securities." The Securities
shall be exchangeable in accordance with their terms and the terms of the
Indenture (as defined in the Underwriting Agreement) into cash and, if
applicable, shares of the Company's common stock, par value $0.01 per share (
the "Underlying Shares"). Subject to the terms and conditions set forth or
incorporated by reference herein, the underwriter named below (the
"Underwriter") offers to purchase the aggregate principal amount of Securities
set forth below opposite its name at the purchase price set forth below.
Aggregate Principal
Underwriter Amount Of Debentures
----------- ---------------------
Citigroup Global Markets Inc. $250,000,000
Total: $250,000,000
The Debentures shall have the following terms:
Title: 4.00% Exchangeable Senior Debentures due 2025
Rank: The Debentures will be senior unsecured
obligations and will rank equally with each
other and with all of the Company's other senior
unsecured indebtedness, except that the
Debentures will be effectively subordinated to
all of our secured debt and to all liabilities
and preferred equity of our subsidiaries.
Ratings: Baa3 by Xxxxx'x Investors Service BBB- by
Standard & Poor's
Aggregate Principal Amount: $250,000,000
Aggregate Principal Amount
of Option Debentures: $37,500,000
Purchase Price: 98% of the principal amount, plus accrued
interest, if any, from the date of issuance
(payable in same day funds).
Interest Rate: The interest rate for the Debentures is 4.00%
per annum.
Interest Payment Dates: Interest on the Debentures is payable
semi-annually in arrears on June 15 and December
15 of each year, commencing December 15, 2005.
Maturity Dates: The Debentures will mature on June 15, 2025.
Redemption Provisions: The Debentures are redeemable at any time on or
after June 18, 2010 (or earlier, if necessary to
preserve the status of the Company as a real
estate investment trust) at the option of the
Operating Partnership or the Company, in whole
or in part, at a redemption price equal to the
sum of the principal amount of the Debentures
being redeemed and any unpaid interest accrued
thereon to the redemption date.
Repurchase provisions Holders of the Debentures have the right to
require the Operating Partnership to repurchase
their Debentures in whole or in part on June 15,
2010, June 15, 2015 and June 15, 2020 and in the
event of a change in control prior to June 15,
2010 for cash equal to the sum of the principal
amount of the Debentures being repurchased and
any unpaid interest accrued thereon to the
repurchase date.
Initial Exchange Rate: 24.6124 Underlying Shares per $1,000 principal
amount of Debentures.
Exchange Provisions: The Debentures will be exchangeable in
accordance with their terms and the terms of the
Indenture into cash and, if applicable,
Underlying Shares.
Lock-up Provisions: See attached Form of Lock-Up Agreement.
Sinking Fund requirements: N/A
Other terms and conditions: N/A
Closing date and location: June 27, 2005 at the offices of Sidley Xxxxxx
Xxxxx & Xxxx LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000.
All of the provisions contained in the document attached as Annex I
hereto entitled "RECKSON OPERATING PARTNERSHIP, L.P. AND RECKSON ASSOCIATES
REALTY CORP.-- UNDERWRITING AGREEMENT" are hereby incorporated by reference in
their entirety herein and shall be deemed to be a part of this Terms Agreement
to the same extent as if such provisions had been set forth in full herein.
Terms defined in such document are used herein as therein defined.
Please accept this offer no later than 7 o'clock p.m. (New York City
time) on June 21, 2005 by signing a copy of this Terms Agreement in the space
set forth below and returning the signed copy to us.
Very truly yours,
CITIGROUP GLOBAL MARKETS INC.
By: /s/ Xxxx Xxxxxxxxx
------------------------------
Name: Xxxx Xxxxxxxxx
Title: Managing Director
Acting on behalf of themselves and as Representatives for the other named
Underwriters.
Accepted:
RECKSON OPERATING PARTNERSHIP, L.P.
By: RECKSON ASSOCIATES REALTY CORP., its sole general partner
By: /s/ Xxxxxxx Xxxxxx
---------------------------
Name: Xxxxxxx Xxxxxx
Title: Executive Vice President and
Chief Financial Officer
RECKSON ASSOCIATES REALTY CORP.
By: /s/ Xxxxxxx Xxxxxx
---------------------------
Name: Xxxxxxx Xxxxxx
Title: Executive Vice President and
Chief Financial Officer
Form of Lock-Up Agreement
[Letterhead of officer or director of Reckson Associates Realty Corp.]
Reckson Operating Partnership, L.P.
Reckson Associates Realty Corp.
Public Offering of Exchangeable Senior Debentures
June 21, 2005
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the Terms Agreement
(the "Terms Agreement"), dated June 21, 2005, among Reckson Operating
Partnership, L.P., a Delaware limited partnership (the "Partnership"), Reckson
Associates Realty Corp., a Maryland corporation (the "Company"), and you,
relating to an underwritten public offering of the Partnership's 4.00%
Exchangeable Senior Debentures due June 15, 2025 (the "Debentures"), which
shall be fully and unconditionally guaranteed as to the payment of principal
and interest thereon by the Company (the "Guarantee" and, collectively with
the Debentures, the "Securities"), and shall be exchangeable in accordance
with their terms into cash and, if applicable, shares of the Company's common
stock, par value $0.01 per share (the "Common Stock").
In order to induce you to enter into the Terms Agreement, the undersigned will
not, without the prior written consent of Citigroup Global Markets Inc.,
offer, sell, contract to sell, pledge or otherwise dispose of (or enter into
any transaction which is designed to, or might reasonably be expected to,
result in the disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the undersigned or any
affiliate of the undersigned or any person in privity with the undersigned or
any affiliate of the undersigned), directly or indirectly, including the
filing (or participation in the filing) of a registration statement with the
Securities and Exchange Commission in respect of (except for a registration
statement on Form S-8 with respect to shares of Common Stock issuable under
the Company's 2005 Stock Option Plan and a shelf registration statement on
Form S-3), or establish or increase a put equivalent position or liquidate or
decrease a call equivalent position within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Securities and Exchange Commission promulgated thereunder with respect to,
any shares of Common Stock of the Company, any securities substantially
similar to the Securities or shares of Common Stock or any securities
convertible into or exercisable or exchangeable for such shares of Common
Stock or any securities substantially similar to the Securities or shares of
Common Stock, or publicly announce an intention to effect any such
transaction, for a period of thirty days after the date of the Terms
Agreement, other than shares of Common Stock disposed of as bona fide gifts
approved by Citigroup Global Markets Inc.
If for any reason the Terms Agreement shall be terminated prior to the Closing
Date (as defined in the Terms Agreement), the agreement set forth above shall
likewise be terminated.
Sincerely,
