UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: September 20, 2005
RECKSON ASSOCIATES REALTY CORP.
and
RECKSON OPERATING PARTNERSHIP, L.P.
(Exact name of each Registrant as specified in its Charter)
Reckson Associates Realty Corp. - Maryland Reckson Associates Realty Corp. -
Reckson Operating Partnership, L.P. - Delaware 11-3233650
(State or other jurisdiction of incorporation or organization) Reckson Operating Partnership, L.P. -
11-3233647
(IRS Employer ID Number)
225 Broadhollow Road 11747
Melville, New York (Zip Code)
(Address of principal executive offices)
1-13762
(Commission File Number)
(631) 694-6900
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrants under any of
the following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
1. Tranche I Closing of Reckson New York Property Trust
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As described in a Current Report on Form 8-K filed with the Securities
and Exchange Commission on August 18, 2005, Reckson Associates Realty Corp.
("Reckson") entered into (i) an underwriting agreement relating to the public
offering in Australia of approximately A$263 million (approximately US$202
million) of units ("LPT Units") in a newly-formed Reckson-sponsored Australian
listed property trust, Reckson New York Property Trust ("Reckson LPT"), to be
traded on the Australian Stock Exchange and (ii) contribution and sale
agreements pursuant to which, among other things, Reckson will transfer 25 of
its properties at a purchase price of approximately US$563 million, in three
separate tranches, to Reckson Australia Operating Company LLC (the "Joint
Venture"), a newly-formed joint venture, in exchange for a 25% interest in the
Joint Venture and approximately US$502 million in cash (inclusive of proceeds
from mortgage debt). On September 21, 2005, Reckson LPT completed its public
offering and the tranche I closing of this transaction.
In the tranche I closing, the Joint Venture purchased from Reckson 17
properties containing approximately 2.0 million square feet for a purchase
price of approximately US$367 million (including the assumption of
approximately US$196 million in mortgage debt which had been incurred by
subsidiaries of Reckson Operating Partnership, L.P. (the "Operating
Partnership") in August 2005). In return, Reckson received a 25% interest in
the Joint Venture and approximately US$128 million in cash. A list of the
properties contributed to the Joint Venture in the tranche I closing is
contained in Reckson's Current Report on Form 8-K filed with the Securities and
Exchange Commission on July 26, 2005.
Joint Venture Operating Agreement. In connection with the foregoing, on
September 21, 2005, Reckson Australia Holdings LLC ("Reckson Holdings"), a
wholly-owned subsidiary of the Operating Partnership, and Reckson Australia
LPT Corporation ("LPT REIT"), a U.S. real estate investment trust the common
stock of which is wholly-owned by Reckson LPT, entered into the Amended and
Restated Limited Liability Company Agreement governing the Joint Venture (the
"Operating Agreement"). Pursuant to the Operating Agreement, LPT REIT holds a
75% interest in, and acts as the managing member for, the Joint Venture, and
Reckson Holdings holds a 25% non-managing member interest therein. The
Operating Agreement provides that, if at any time additional capital
contributions are made to the Joint Venture, Reckson Holdings will have a
right to make additional capital contributions up to an amount necessary to
maintain its 25% interest therein on the same terms and conditions as such
other capital contributions.
As the managing member of the Joint Venture, LPT REIT has the sole
responsibility for managing its business and affairs on a day-to-day basis,
other than with respect to certain identified "major decisions," including but
not limited to a merger or consolidation involving the Joint Venture, a
disposition of all or substantially all of its assets, or the liquidation or
dissolution of the Joint Venture. Such major decisions require the prior
written consent of a majority of the non-managing members.
Affiliates of Reckson will provide asset management, property management,
leasing, construction and other services to the Joint Venture and affiliates of
Reckson will be entitled to transaction fees and ongoing fees relating to the
Joint Venture.
Under the Operating Agreement, Reckson Holdings will have a right,
beginning September 21, 2007, to require LPT REIT to redeem all or a portion
of Reckson Holdings'
membership interest in the Joint Venture for cash or, at LPT REIT's option,
shares of LPT REIT's common stock (which may be exchanged for LPT Units) on a
one-for-one basis. Reckson Holdings also has a right to cause the liquidation
of the Joint Venture in the event that a Reckson affiliate is replaced as
Reckson LPT's "Responsible Entity." In addition, the Operating Agreement
contains a right of first refusal granting Reckson Holdings the right to
acquire any asset of the Joint Venture, at fair market value, in the event of
an attempted sale of such asset or the exercise of Reckson Holdings' right to
liquidate the Joint Venture.
A copy of the Operating Agreement has been filed as Exhibit 10.1 hereto.
Option Agreement. In connection with the tranche I closing, on September
21, 2005 the Operating Partnership, the Joint Venture and LPT REIT entered
into an Option Agreement (the "Option Agreement") pursuant to which the
Operating Partnership granted the Joint Venture options to acquire ten
additional properties containing an aggregate of approximately 1.2 million
square feet over a two year period, beginning January 1, 2006, at a price
based upon the fair market value at the time of transfer to the Joint Venture.
The Option Agreement contains a right of first refusal granting the Joint
Venture the right to acquire any option property in the event the Operating
Partnership receives, and is amenable to, an offer from a third party to
purchase such option property. The Option Agreement will terminate under
certain circumstances, including if (i) the Joint Venture sends notice of its
intent to exercise its option but fails to close as obligated, (ii) the Joint
Venture is in default under the Option Agreement, the contribution agreement
or the sale agreement or (iii) a Reckson affiliate is no longer the
Responsible Entity of Reckson LPT. A copy of the Option Agreement has been
filed as Exhibit 10.2 hereto.
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Additional information concerning this transaction is contained in
Reckson's Current Reports on Form 8-K filed with the Securities and Exchange
Commission on July 26, 2005, August 18, 2005 and September 1, 2005,
respectively. Moreover, information concerning Reckson LPT and the Joint
Venture soon will be available on an ongoing basis through a link on Reckson's
website at www.reckson.com. The information contained on Reckson's website is
not part of this Current Report on Form 8-K and is not incorporated herein by
reference.
2. Extension of Employment Agreements
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On September 27, 2005, Reckson entered into agreements with each of Scott
Rechler, President and Chief Executive Officer of Reckson, Michael Maturo,
Executive Vice President and Chief Financial Officer of Reckson, and Jason
Barnett, Executive Vice President and General Counsel of Reckson, pursuant to
which the terms of such officers' employment and noncompetition agreements
were extended in all respects through December 31, 2005. A copy of the
agreement with Mr. Rechler has been filed as Exhibit 10.3 hereto.
Item 8.01. Other Events
Approval of Settlement. On September 20, 2005, Judge Evelyn Omega Cannon
of the Circuit Court for Baltimore City signed an Order and Final Judgment
approving the Stipulation of Settlement, dated March 14, 2005, resolving the
shareholder derivative actions in connection with the disposition of Reckson's
industrial portfolio previously described under "Part I, Item 3.
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Legal Proceedings" in Reckson's Annual Report on Form 10-K for the year ended
December 31, 2004, and under "Item 8.01. Other Events" in Current Reports on
Form 8-K filed by Reckson on April 4, 2005 and June 27, 2005. The Stipulation
of Settlement includes various changes to Reckson's corporate governance
policies to provide for an Affiliate Transaction Committee and to require that
Reckson's Board of Directors be comprised of at least two-thirds independent
directors (as defined in Reckson's Corporate Governance Guidelines), as well
as certain other matters, and provides for the payment of plaintiffs' counsel's
fees and expenses of $2.15 million. Although Reckson believes such payment is
covered by insurance subject to a $500,000 deductible, it is currently in
discussions with its carrier concerning such coverage. Pursuant to the terms
of the Stipulation of Settlement, the parties to the shareholder derivative
litigation intend to seek the dismissal of the actions filed in New York
federal and state court.
Item 9.01. Financial Statements and Exhibits
(c) Exhibits
10.1 Amended and Restated Limited Liability Company Agreement, dated as
of September 21, 2005, by and between Reckson Australia Holdings LLC
and Reckson Australia LPT Corporation
10.2 Option Agreement, dated as of September 21, 2005, by and between
Reckson Operating Partnership, L.P., Reckson Australia Operating
Company LLC and Reckson Australia LPT Corporation
10.3 Agreement for Extension of Employment and Noncompetition Agreement,
dated as of September 27, 2005, by and between Reckson Associates
Realty Corp. and Scott Rechler*
---------------------------
* Each of Michael Maturo and Jason Barnett has entered into an Agreement
for Extension of Employment and Noncompetition Agreement, dated as of
September 27, 2005, with Reckson. These agreements are identical in all
material respects to the Agreement for Extension of Employment and
Noncompetition Agreement for Scott Rechler filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RECKSON ASSOCIATES REALTY CORP.
By: /s/ Michael Maturo
----------------------------------
Michael Maturo
Executive Vice President
and Chief Financial Officer
RECKSON OPERATING PARTNERSHIP, L.P.
By: Reckson Associates Realty Corp.,
its General Partner
By: /s/ Michael Maturo
----------------------------------
Michael Maturo
Executive Vice President
and Chief Financial Officer
Date: September 27, 2005
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