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EXHIBIT 10.44
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CONTRIBUTION AGREEMENT
by and between
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and
TOWER REALTY OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership
Dated as of July 31, 1997
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TABLE OF CONTENTS
Page
RECITALS ................................................................. -1-
1. CONTRIBUTION OF PARTNERSHIP INTEREST AND EXCHANGE FOR OP
UNITS................................................................. -2-
1.1 CONTRIBUTION TRANSACTION........................................ -2-
1.2 ISSUANCE OF OP UNITS............................................ -3-
1.3 ADJUSTED CONSIDERATION.......................................... -3-
1.4 INTENTIONALLY OMITTED........................................... -3-
1.5 CONTRIBUTION OF CERTAIN RIGHTS.................................. -3-
1.6 PRORATIONS...................................................... -3-
1.7 TREATMENT AS CONTRIBUTION....................................... -4-
2. CLOSING............................................................... -4-
2.1 CONDITIONS PRECEDENT............................................ -4-
2.2 TIME AND PLACE.................................................. -5-
2.3 CLOSING DELIVERIES.............................................. -6-
2.4 CLOSING COSTS................................................... -6-
3. REPRESENTATIONS, WARRANTIES AND INDEMNITIES........................... -7-
3.1 REPRESENTATIONS AND WARRANTIES OF THE OPERATING
PARTNERSHIP..................................................... -7-
3.2 REPRESENTATIONS AND WARRANTIES OF CONTRIBUTOR................... -7-
3.3 INDEMNIFICATION................................................. -7-
4. COVENANTS............................................................. -8-
4.1 COVENANTS OF CONTRIBUTOR........................................ -8-
5. RELEASES AND WAIVERS.................................................. -8-
5.1 GENERAL RELEASE OF OPERATING PARTNERSHIP........................ -9-
5.2 GENERAL RELEASE OF CONTRIBUTOR.................................. -9-
5.3 INTENTIONALLY OMITTED........................................... -9-
5.4 WAIVER OF RIGHTS UNDER PARTNERSHIP AGREEMENT.................... -9-
6. POWER OF ATTORNEY..................................................... -9-
6.1 GRANT OF POWER OF ATTORNEY...................................... -9-
6.2 LIMITATION ON LIABILITY.........................................-10-
7. MISCELLANEOUS.........................................................-11-
7.1 FURTHER ASSURANCES..............................................-11-
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7.2 COUNTERPARTS....................................................-11-
7.3 GOVERNING LAW...................................................-11-
7.4 NOTICES.........................................................-11-
EXHIBIT LIST
SECTION FIRST
EXHIBITS REFERENCED
A Constituent Interests of Contributor's Partnership Interest...........Recital D
B Contribution and Assumption Agreement.......................................1.1
C Form of Quitclaim...........................................................1.1
D Calculation of Number of OP Units...........................................1.2
E Representations, Warranties and Indemnities of Contributor..................3.2
Attachment 1..........................................Exchange Rights Agreement
Attachment 2......................................Registration Rights Agreement
Attachment 3.................................................Lock-Up Agreements
Attachment 4.......................................List of Portfolio Agreements
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CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (hereinafter referred to as the
"Contribution Agreement") is made and entered into as of July 31, 1997 by and
between Tower Realty Operating Partnership, L.P., a Delaware limited partnership
(the "Operating Partnership"), and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual (the
"Contributor").
RECITALS
A. The Operating Partnership desires to consolidate the ownership
of a portfolio of office properties (the "Participating Properties") owned or
managed by Tower Equities & Realty Corp. or its affiliates through a series of
transactions (the "Formation Transactions") whereby the Operating Partnership
will acquire direct interests in certain of the Participating Properties (the
"Property Interests") and all of the interests in certain limited partnerships,
certain limited liability companies and certain other entities (collectively,
the "Participating Partnerships and LLCs") which currently own directly or
indirectly the Participating Properties (the "Consolidation").
B. The Formation Transactions relate to the proposed initial
public offering (the "Public Offering") of the common stock, par value $.01 per
share (the "Common Stock") of Tower Realty Trust, Inc., a Maryland corporation
(the "Company"), which will operate as a self-administered and self-managed real
estate investment trust ("REIT") and will be the sole general partner of the
Operating Partnership.
C. The owners of the Property Interests and the partners and
members of the Participating Partnerships and LLCs will either transfer their
Property Interests and interests in the Participating Partnerships and LLCs to
the Company in exchange for cash (the "Cash Participants") or contribute such
interests directly to the Operating Partnership in exchange for an interest in
the Operating Partnership (the "OP Participants").
D. The Contributor owns interests in certain of the Participating
Partnerships and LLCs as set forth on EXHIBIT A (the "Partnerships") which
Partnerships own directly or indirectly interests in certain of the
Participating Properties also as set forth on EXHIBIT A (the "Property" or the
"Properties"). As used herein, "Partnership Agreement" means the partnership
agreement or membership agreement, as applicable, under which each such
Partnership was formed.
E. The Contributor has previously contributed certain interests
in the Partnerships to the Operating Partnership in exchange for OP Units (as
defined below).
F. The Contributor desires to, and the Operating Partnership
desires the Contributor to, contribute to the Operating Partnership, all of its
right, title and interest, as a
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partner (or member) of the Partnerships, including, without limitation, all of
its voting rights and interests in the capital, profits and losses of the
Partnerships or any property distributable therefrom, constituting all of its
interests in the Partnerships (such right, title and interest are hereinafter
collectively referred to as the "Partnership Interest"), in exchange for
partnership units in the Operating Partnership (the "OP Units"), on the terms
and subject to the conditions set forth herein.
G. The Operating Partnership desires to make, and the
Contributor desires to receive, a return of certain contributions previously
made by the Contributor to the Operating Partnership that relate to direct or
indirect interests in certain limited partnerships, limited liability companies
and certain other entities that do not relate to the Consolidation (the
"Excluded Interests").
NOW, THEREFORE, for and in consideration of the foregoing premises, and
the mutual undertakings set forth below, the parties hereto agree as follows:
ARTICLE 1. CONTRIBUTION OF PARTNERSHIP INTEREST AND EXCHANGE FOR
OP UNITS
1.1 CONTRIBUTION TRANSACTION
(a) At the Closing (as defined in ARTICLE 2.2 hereof) and
subject to the terms and conditions contained in this Contribution Agreement,
the Contributor shall transfer to the Operating Partnership, absolutely and
unconditionally, all of its Partnership Interest (as such term is defined in
Recital F herein) not previously contributed to the Operating Partnership. The
contribution of the Contributor's Partnership Interest shall be evidenced by a
"Contribution and Assumption Agreement" for each of the Partnerships in
substantially the form of EXHIBIT B attached hereto. Furthermore, the
Contributor shall execute and have duly acknowledged an individual quitclaim
deed for each property in the form of EXHIBIT C quitclaiming to the Operating
Partnership any direct or indirect ownership interest in and to the Properties.
The parties shall take such additional actions and execute such additional
documentation as may be required by the Partnership Agreement and the Agreement
of Limited Partnership of the Operating Partnership (the "OP Agreement") in
order to effect the transactions contemplated hereby.
(b) At the Closing, and subject to the terms and
conditions set forth in this Contribution Agreement, the Operating Partnership
shall transfer to the Contributor, absolutely and unconditionally, all of the
Excluded Interests (as such term is defined in Recital G herein) previously
contributed by the Contributor to the Operating Partnership.
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1.2 ISSUANCE OF OP UNITS
The Operating Partnership shall, in exchange for the
Partnership Interest and after taking into account the transfer of the Excluded
Interests to the Contibutor, increase or decrease the number of OP Units issued
to the Contributor in accordance with EXHIBIT D hereto. The increase or decrease
of OP Units Issued to the Contributor shall be evidenced by either an amendment
(the "Amendment") to the OP Agreement or by certificates relating to such units
(the "Certificates") in either case, as shall be acceptable to the Contributor.
The parties shall take such additional actions and execute such additional
documentation as may be required by the Partnership Agreement and the OP
Agreement in order to effect the transactions contemplated hereby.
1.3 ADJUSTED CONSIDERATION
The Operating Partnership reserves the right not to acquire
any particular interest that constitutes part of the Partnership Interest, if in
good faith the Operating Partnership determines that the ownership of such
interest or the underlying Property would be inappropriate for the Operating
Partnership for any reason whatsoever. Contributor hereby agrees that, in such
event, the number of OP Units to be received by the Contributor pursuant to this
Contribution Agreement may be reduced by an amount to be agreed upon between the
Operating Partnership and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ to reflect the reduction in total
value of the Partnership Interest ultimately contributed by the Contributor.
1.4 INTENTIONALLY OMITTED
1.5 CONTRIBUTION OF CERTAIN RIGHTS
Effective upon the Closing, the Contributor hereby contributes
to the Operating Partnership all of its rights and interests, if any, including
rights to indemnification in favor of the Contributor, if any, under the
agreements pursuant to which the Contributor or its affiliates initially
acquired the Partnership Interest transferred pursuant to this Contribution
Agreement.
1.6 PRORATIONS
At the Closing, or as promptly as practicable following the
Closing, to the extent such matters are not the right or responsibility of all
tenants of a given Property, all revenue and all charges that are customarily
prorated in transactions of this nature, including accrued rent currently due
and payable, overpaid taxes or fees, real and personal property taxes, common
area maintenance charges and other similar periodic charges payable or
receivable with respect to such Property shall be ratably prorated between the
partners of the Partnership which holds such Property prior to the Closing and
the Operating Partnership on and after the Closing, effective as of the Closing.
After providing for such prorations, (i) if any of the Partnerships has a
resultant cash surplus, the value of the Contributor's Partnership
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Interest shall be increased in proportion to Contributor's ratable share of such
cash surplus and additional OP Units (based on the Mid-Point (as such term is
defined in Exhibit D attached hereto) of the proposed offering prices per share
set forth in the final preliminary prospectus relating to the offering of shares
of Common Stock ) shall be issued to the Contributor as a valuation adjustment
to the consideration to be received by the Contributor pursuant to this
Contribution Agreement, and (ii) if any of the Partnerships has a resultant cash
deficit, the value of the Contributor's Partnership Interest shall be reduced in
proportion to Contributor's ratable share of such cash deficit, and fewer OP
Units shall be issued to the Contributor as a valuation adjustment to the
consideration to be received by the Contributor pursuant to this Contribution
Agreement, unless such deficit is cured prior to the Closing.
1.7 TREATMENT AS CONTRIBUTION
The transfer, assignment and exchange of interests effectuated
with respect to the Operating Partnership, pursuant to this Contribution
Agreement, shall constitute a "Capital Contribution" pursuant to Article IV of
the OP Agreement and is intended to be governed by Section 721(a) of the
Internal Revenue Code of 1986, as amended (the "Code").
ARTICLE 2. CLOSING
2.1 CONDITIONS PRECEDENT
The effectiveness of the Company's registration statement
filed with the Securities and Exchange Commission on Form S-11 (the
"Registration Statement") is a condition precedent to the obligations of all
parties to this Contribution Agreement to effect the transactions contemplated
by this Contribution Agreement on the Closing Date (as defined below).
The obligations of the Operating Partnership to effect the
transactions contemplated hereby shall be subject to the following additional
conditions:
(a) The representations and warranties of the Contributor
contained in this Contribution Agreement shall have been true and correct in all
material respects on the date such representations and warranties were made, and
shall be true and correct in all material respects on the Closing Date as if
made at and as of such date;
(b) Each of the obligations of the Contributor to be
performed by it shall have been duly performed by it on or before the Closing
Date;
(c) Concurrently with the Closing, the Contributor shall
have executed and delivered to the Operating Partnership the documents required
to be delivered pursuant to ARTICLE 2.3 hereof;
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(d) The Contributor shall have obtained all necessary
consents or approvals of governmental authorities or third parties to the
consummation of the transactions contemplated hereby;
(e) The Contributor shall not have breached any of its
covenants contained herein in any material respect;
(f) No order, statute, rule, regulation, executive order,
injunction, stay, decree or restraining order shall have been enacted, entered,
promulgated or enforced by any court of competent jurisdiction or governmental
or regulatory authority or instrumentality that prohibits the consummation of
the transactions contemplated hereby, and no litigation or governmental
proceeding seeking such an order shall be pending or threatened;
(g) There shall not have occurred between the date hereof
and the Closing Date any material adverse change in any of the Partnerships'
businesses;
(h) All existing management agreements with respect to
the Properties shall have been contributed to the Operating Partnership prior to
or simultaneously with the Closing; and
(i) All management functions with respect to the
Properties presently conducted by Tower Equities & Realty Corp. and its
affiliates shall be assumed by the Operating Partnership or Tower Equities
Management, Inc.
2.2 TIME AND PLACE
The date, time and place of the transactions contemplated
hereunder shall be the day the Operating Partnership receives the proceeds from
the Public Offering from the underwriter(s), at 10:00 a.m. in the office of
Battle ▇▇▇▇▇▇ LLP, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Closing"
or "Closing Date"). The transfers described in ARTICLE 1.1 of this Contribution
Agreement, and all closing deliveries, and the consummation of the Public
Offering, shall be deemed concurrent for all purposes.
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2.3 CLOSING DELIVERIES
At the Closing, the parties shall make, execute, acknowledge
and deliver, or cause to be made, executed, acknowledged and delivered through
the Attorney-in-Fact (see ARTICLE 6.1 below), the legal documents and other
items (collectively, the "Closing Documents") necessary to carry out the
intention of this Contribution Agreement, which Closing Documents and other
items shall include, without limitation, the following:
(i) A Contribution and Assumption Agreement for each
Partnership;
(ii) An individual quitclaim deed for each Property,
fully executed and duly acknowledged from each of the
individual constituent partners and/or members of the
Contributor, as required by the Operating Partnership;
(iii) The Amendment or the Certificates evidencing
the transfer of OP Units to the Contributor;
(iv) American Land Title Assurances ("ALTA") policies
of title insurance with appropriate endorsements and levels of
reinsurance for the Properties issued as of the Closing Date
or endorsements or other assurances that the existing policy
or policies of title insurance are sufficient for purposes of
this Contribution Agreement, which the Contributor shall cause
the title company to issue to the Operating Partnership in a
form acceptable to the Operating Partnership (the "Title
Policies") including satisfaction by the Contributor of any
and all title company requirements applicable to it;
(v) The Partnerships' books and records and
securities or other evidences of ownership held by the
Contributor; and
(vi) An affidavit from the Contributor stating, under
penalty of perjury, the Contributor's United States Taxpayer
Identification Number and that the Contributor is not a
foreign person pursuant to section 1445(b)(2) of the Code and
a comparable affidavit satisfying California and any other
withholding requirements.
(vii) The Exchange Rights Agreement, the Registration
Rights Agreement and the Lock-Up Agreements substantially in
the form attached hereto as ATTACHMENTS 1, 2, and 3,
respectively.
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2.4 CLOSING COSTS
The Operating Partnership shall pay any documentary transfer
taxes, escrow charges, title charges and recording taxes or fees incurred in
connection with the transactions contemplated hereby.
ARTICLE 3. REPRESENTATIONS, WARRANTIES AND INDEMNITIES
3.1 REPRESENTATIONS AND WARRANTIES OF THE OPERATING
PARTNERSHIP
The Operating Partnership hereby represents and warrants to
and covenants with the Contributor that:
(a) Organization; Authority. The Operating Partnership
has been duly formed and is validly existing with requisite power to enter this
Contribution Agreement and all agreements contemplated hereby. The persons and
entities executing this Contribution Agreement and all agreements contemplated
hereby on behalf of the Operating Partnership have the power and authority to
enter into this Contribution Agreement and such other contemplated agreements.
(b) Due Authorization. The execution, delivery and
performance by the Operating Partnership of its obligations under this
Contribution Agreement and all agreements contemplated hereby will not
contravene any provision of applicable law, the OP Agreement, charter,
declaration of trust or other constituent document of the Operating Partnership,
or any agreement or other instrument binding upon the Operating Partnership or
any judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Operating Partnership, and no consent, approval,
authorization or order of or qualification with any governmental body or agency
is required for the performance by the Operating Partnership of its obligations
under this Contribution Agreement and all other agreements contemplated hereby.
3.2 REPRESENTATIONS AND WARRANTIES OF CONTRIBUTOR
The Contributor represents and warrants to and covenants with
the Operating Partnership as provided in EXHIBIT E attached hereto, and
acknowledges and agrees to be bound by the indemnification provisions contained
therein.
3.3 INDEMNIFICATION
The Operating Partnership shall indemnify and hold harmless
the Contributor (the "Indemnified Contributor Party") from and against any and
all claims, losses, damages, liabilities and expenses, including, without
limitation, amounts paid in settlement, reasonable
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attorneys' fees, costs of investigation and remediation, costs of investigative
judicial or administrative proceedings or appeals therefrom and costs of
attachment or similar bonds (collectively, "Losses") asserted against, imposed
upon or incurred by the Indemnified Contributor Party in connection with: (i)
any breach of a representation or warranty of the Operating Partnership
contained in this Contribution Agreement; and (ii) all fees, costs and expenses
of the Operating Partnership in connection with the transactions contemplated by
this Contribution Agreement, including, without limitation, any and all costs
associated with the transfers contemplated herein.
ARTICLE 4. COVENANTS
4.1 Covenants of Contributor
(a) From the date hereof through the Closing, the
Contributor shall not:
(i) Sell or transfer all or any portion of the
Partnership Interest; or
(ii) Mortgage, pledge or encumber (or permit to
become encumbered) all or any portion of the Partnership
Interest.
(b) From the date hereof through the Closing, the
Contributor shall permit each of the Partnerships to conduct its business in the
ordinary course, consistent with past practice, and shall not permit any of the
Partnerships to:
(i) Enter into any material transaction not in the
ordinary course of business;
(ii) Sell or transfer any assets of the Partnerships;
(iii) Mortgage, pledge or encumber (or permit to
become encumbered) any assets of the Partnerships, except (x)
liens for taxes not due, (y) purchase money security interests
and (z) mechanics' liens being disputed by any of the
Partnerships in good faith and by appropriate proceedings;
(iv) Amend, modify or terminate any material
agreements or other instruments to which any of the
Partnerships is a party; or
(v) Materially alter the manner of keeping the
Partnerships' books, accounts or records or the accounting
practices therein reflected.
(c) The Contributor shall use its good faith diligent
efforts to obtain any approvals, waivers or other consents of third parties
required to effect the transactions contemplated by this Contribution Agreement.
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ARTICLE 5. RELEASES AND WAIVERS
Each of the releases and waivers enumerated in this ARTICLE 5
shall become effective only upon the Closing of the contribution and exchange of
the Partnership Interest pursuant to ARTICLES 1 and 2 hereof.
5.1 GENERAL RELEASE OF OPERATING PARTNERSHIP
As of the Closing, the Contributor irrevocably waives,
releases and forever discharges the Operating Partnership and the Operating
Partnership's affiliates, partners, agents, attorneys, successors and assigns of
and from any and all charges, complaints, claims, liabilities, damages, actions,
causes of action, losses and costs of any nature whatsoever (collectively,
"Contributor Claims"), known or unknown, suspected or unsuspected, arising out
of or relating to any of the Partnership Agreements, this Contribution Agreement
or any other matter which exists at the Closing, except for Contributor Claims
arising from the breach of any representation, warranty, covenant or obligation
under this Contribution Agreement.
5.2 GENERAL RELEASE OF CONTRIBUTOR
As of the Closing, the Operating Partnership irrevocably
waives, releases and forever discharges the Contributor and Contributor's
agents, attorneys, successors and assigns of and from any and all charges,
complaints, claims, liabilities, damages, actions, causes of action, losses and
costs of any nature whatsoever (collectively, "Operating Partnership Claims"),
known or unknown, suspected or unsuspected, arising out of or relating to any of
the Partnership Agreements, this Contribution Agreement or any other matter
which exists at the Closing, except for Operating Partnership Claims arising
from the breach of any representation, warranty, covenant or obligation under
this Contribution Agreement or any supplemental representations and warranties
agreement entered into as of the Closing Date by and among the Contributor,
certain other continuing investors in the Operating Partnership and the
Operating Partnership.
5.3 INTENTIONALLY OMITTED
5.4 WAIVER OF RIGHTS UNDER PARTNERSHIP AGREEMENT
As of the Closing, the Contributor waives and relinquishes all
rights and benefits otherwise afforded to Contributor under the Partnership
Agreements including, without limitation, any right to consent to or approve of
the sale or contribution by the other partners (or members) of the Partnerships
of their partnership interests to the Company or the Operating Partnership.
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ARTICLE 6. POWER OF ATTORNEY
6.1 GRANT OF POWER OF ATTORNEY
Contributor does hereby irrevocably appoint the Operating
Partnership (or its designee) and each of them individually and any successor
thereof from time to time (such Operating Partnership or designee or any such
successor of any of them acting in his, her or its capacity as attorney-in-fact
pursuant hereto, the "Attorney-in-Fact") as the true and lawful attorney-in-fact
and agent of Contributor, to act in the name, place and stead of Contributor to
make, execute, acknowledge and deliver all such other contracts, orders,
receipts, notices, requests, instructions, certificates, consents, letters and
other writings (including, without limitation, the execution of any Closing
Documents or other documents relating to the acquisition by the Operating
Partnership of Contributor's Partnership Interest), to provide information to
the Securities and Exchange Commission and others about the transactions
contemplated hereby and, in general, to do all things and to take all actions
which the Attorney-in-Fact in its sole discretion may consider necessary or
proper in connection with or to carry out the transactions contemplated by this
Contribution Agreement, as fully as could Contributor if personally present and
acting. Further, Contributor hereby grants to Attorney-in-Fact a proxy (the
"Proxy") to vote Contributor's Partnership Interest on any matter related to the
Formation Transactions presented to the partners of any of the Partnerships for
a vote, including, but not limited to, the transfer of interests in any of the
Partnerships by the other partners.
Each of the Power of Attorney and Proxy and all authority
granted hereby shall be coupled with an interest and therefore shall be
irrevocable and shall not be terminated by any act of Contributor, by operation
of law or by the occurrence of any other event or events, and if any other such
act or events shall occur before the completion of the transactions contemplated
by this Contribution Agreement, the Attorney-in-Fact shall nevertheless be
authorized and directed to complete all such transactions as if such other act
or events had not occurred and regardless of notice thereof. Contributor agrees
that, at the request of the Operating Partnership, it will promptly execute a
separate power of attorney and proxy on the same terms set forth in this ARTICLE
6, such execution to be witnessed and notarized. Contributor hereby authorizes
the reliance of third parties on each of the Power of Attorney and Proxy.
Contributor acknowledges that the Operating Partnership has,
and any designee or successor thereof acting as Attorney-in-Fact may have, an
economic interest in the transactions contemplated by this Contribution
Agreement.
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6.2 LIMITATION ON LIABILITY
It is understood that the Attorney-in-Fact assumes no
responsibility or liability to any person by virtue of the Power of Attorney or
Proxy granted by Contributor hereby. The Attorney-in-Fact makes no
representations with respect to and shall have no responsibility for the
Formation Transactions or the Public Offering, or the acquisition of the
Partnership Interest by the Operating Partnership and shall not be liable for
any error or judgment or for any act done or omitted or for any mistake of fact
or law except for its own gross negligence or bad faith. Contributor agrees to
indemnify the Attorney-in-Fact for and to hold the Attorney-in-Fact harmless
against any loss, claim, damage or liability incurred on its part arising out of
or in connection with it acting as the Attorney-in-Fact under the Power of
Attorney or Proxy created by Contributor hereby, as well as the cost and expense
of investigating and defending against any such loss, claim, damage or
liability, except to the extent such loss, claim, damage or liability is due to
the gross negligence or bad faith of the Attorney-in-Fact. Contributor agrees
that the Attorney-in-Fact may consult with counsel of its own choice (who may be
counsel for Operating Partnership or its successors or affiliates), and it shall
have full and complete authorization and protection for any action taken or
suffered by it hereunder in good faith and in accordance with the opinion of
such counsel. It is understood that the Attorney-in-Fact may, without breaching
any express or implied obligation to Contributor hereunder, release, amend or
modify any other power of attorney or proxy granted by any other person under
any related agreement.
ARTICLE 7. MISCELLANEOUS
7.1 FURTHER ASSURANCES.
The Contributor shall take such other actions and execute such
additional documents following the Closing as the Operating Partnership may
reasonably request in order to effect the transactions contemplated hereby.
7.2 COUNTERPARTS
This Contribution Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.3 GOVERNING LAW
This Contribution Agreement shall be governed by the internal
laws of the State of New York, without regard to the conflicts of laws
provisions thereof.
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7.4 NOTICES
Any notice to be given hereunder by any party to the other
shall be given in writing by personal delivery or by registered or certified
mail, postage prepaid, return receipt requested, and shall be deemed
communicated as of the date of personal delivery (including delivery by
overnight courier). Mailed notices shall be addressed as set forth below, but
any party may change the address set forth below by written notice to other
parties in accordance with this paragraph.
To the Contributor:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
c/o Feldman Equities
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
To the Operating Partnership:
Tower Realty Operating Partnership, L.P.
c/o Tower Realty Trust, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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IN WITNESS WHEREOF, the parties have executed this
Contribution Agreement as of the date first written above.
OPERATING PARTNERSHIP:
Tower Realty Operating Partnership, L.P.
By: Tower Realty Trust, Inc.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: Chief Operating Officer and
Executive Vice President
CONTRIBUTOR:
/s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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EXHIBIT A
CONSTITUENT INTERESTS OF
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇'▇ (THE "CONTRIBUTOR") PARTNERSHIP INTEREST
PARTNERSHIPS IN WHICH CONTRIBUTOR PARTNERSHIPS IN WHICH CONTRIBUTOR PROPERTIES HELD BY THE PARTNERSHIPS
HOLDS A DIRECT INTEREST* HOLDS AN INDIRECT INTEREST
Tower 45 Associates Limited Tower 45 Associates Limited Tower 45
Partnership Partnership
Maitland Property Investors, Ltd. Maitland Property Investors, Ltd. Maitland Forum
Maitland Associates, Ltd. Maitland Forum ground lease
▇▇▇▇▇▇▇ FSA Corp. FSA Associates, L.P. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇ MOT Portfolio Corp. D/F Portfolio Associates Limited
FSA Associates, L.P. Partnership
286 Madison, L.P.
FSA Associates, L.P. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇.
D/F Portfolio Associates Limited
Partnership
290 Madison, L.P.
FSA Associates, L.P. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇.
D/F Portfolio Associates Limited
Partnership
292 Madison, L.P.
FSA Associates, L.P. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
D/F Portfolio Associates Limited
East Broadway 5151, L.P.
FSA Associates, L.P. One Orlando Center
D/F Portfolio Associates Limited
Magnolia Associates Limited
Partnership
2800 Company, L.L.C. 2800 Associates, L.P. 2800 North Central
5750 ▇▇▇▇▇▇▇, Ltd. 5750 ▇▇▇▇▇▇▇, Ltd. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
5750 ▇▇▇▇▇▇▇▇▇, Ltd.
5750 Associates Limited Partnership
Terco Partners I, L.L.C. Maitland West Associates Limited Maitland West
Terco Partners II, L.L.C. Partnership
Corporate-Partners, L.L.C. Corporate Center, L.L.C. Corporate Center
Corporate-▇▇▇▇▇▇▇, L.L.C. Corporate Center Associates, Limited
Partnership
-------------------------------
* Corporations owned by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ that hold interests in any of the
Properties shall contribute the partnership interests held by such
corporations to the Operating Partnership.
A-1
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EXHIBIT B
CONTRIBUTION AND ASSUMPTION AGREEMENT
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and
sufficiency of which are hereby acknowledged, the undersigned hereby assigns,
transfers, contributes and conveys to Tower Realty Operating Partnership, L.P.,
a Delaware limited partnership (the "Operating Partnership"), its entire legal
and beneficial right, title and interest in and to
______________________________, a __________________________ (the
"Partnership"), including, without limitation, all right, title and interest, if
any, of the undersigned in and to the assets of the Partnership and the right to
receive distributions of money, profits and other assets from the Partnership,
presently existing or hereafter at any time arising or accruing (such right,
title and interest are hereinafter collectively referred to as the "Partnership
Interest"), TO HAVE AND TO HOLD the same unto the Operating Partnership, its
successors and assigns, forever.
Upon the execution and delivery hereof, the Operating
Partnership assumes all obligations in respect of the Partnership Interest.
The Partnership owns certain real property as described in
ATTACHMENT 4 attached hereto.
Executed: ___________ ___, 1997
By: -------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
B-1
19
EXHIBIT C
FORM OF QUITCLAIM
Order No.
Escrow No.
Loan No.
WHEN RECORDED MAIL TO:
--------------------------------------------------------------------------------
MAIL TAX STATEMENTS TO: SPACE ABOVE THIS LINE FOR RECORDER'S USE
DOCUMENTARY TRANSFER TAX $ ....................
........Computed on the consideration or value of
property conveyed; OR
........Computed on the consideration or value
less liens or encumbrances remaining at
time of sale.
-------------------------------------------------
Signature of Declarant of Agent determining
tax -- Firm name
--------------------------------------------------------------------------------
QUITCLAIM DEED
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
do(es) hereby REMISE, RELEASE and FOREVER QUITCLAIM to
Tower Realty Operating Partnership, L.P., a Delaware limited partnership
the real property in the City of ____________, County of _____________, State of
_____________, described as
Dated _______________________ ___________________________________
___________________________________
___________________________________
▇-▇
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
)
COUNTY OF )
On _________________________________________________________________ before me,
_______________________________________________________________________________,
personally appeared ___________________________________________________________,
_______________________________________________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s) or the entity upon behalf of which the person(s) acted,
executed the instrument.
WITNESS my hand and official seal.
Signature ___________________________ (This area for official notarial seal)
C-2
21
EXHIBIT D
CALCULATION OF NUMBER OF OP UNITS
The number of OP Units to be issued to Contributor shall be
calculated as follows:
IAD 1
(AP x ( ------- - TNSU ) - MCU) x -------
IADPS MP
Where:
AP = 1.0 - the sum of (i) AP (expressed as a decimal fraction)
as set forth in Exhibit D of the Contribution Agreements of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ and (ii) the actual
percentage (expressed as a decimal fraction) of SRSE to be received by
▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇ as set forth in Exhibit D of their
Contribution Agreements (expressed as a decimal fraction).
IAD = Total estimated annual distributions to be made by the
Operating Partnership as set forth in the final preliminary prospectus
included in the Registration Statement on Form S-11 filed by the
Company with the Securities and Exchange Commission in connection with
the proposed public offering of shares of Common Stock (the
"Preliminary Prospectus").
IADPS = Estimated initial annual distribution per share of
Common Stock or OP Unit as set forth in the Preliminary Prospectus.
TNSU = The total number of shares of Common Stock and OP Units
to be issued in the IPO to persons other than ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇ as set forth in the Preliminary Prospectus, other than the number
of OP Units to be issued to ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇▇▇▇▇ in respect of the minimum contribution consideration
to be received by each of them in respect of their individual
Contribution Agreements (assuming all shares of Common Stock are issued
at the MidPoint (as defined below)).
MCU = The total number of OP Units to be issued to Contributor
directly or indirectly under the Omnibus Management Company Option Agreement
(assuming all shares of Common Stock and OP Units are issued at the Mid-Point
(as defined below)).
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22
MP or "Mid-Point" = The median of the proposed per share price
range for the Common Stock as set forth in the Preliminary Prospectus.
D-2
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EXHIBIT E
REPRESENTATIONS, WARRANTIES AND INDEMNITIES
OF CONTRIBUTOR
ARTICLE 1. ADDITIONAL DEFINED TERMS
1.1 For purposes of this EXHIBIT E, the following terms have the
meanings set forth below. Terms which are not defined below shall have the
meaning set forth for those terms as defined in the Contribution Agreement to
which this EXHIBIT E is attached:
ACTIONS: Means all actions, complaints, charges, accusations,
investigations, petitions, suits or other proceedings, whether civil or
criminal, at law or in equity, or before any arbitrator or Governmental Entity.
CLAIMS: Means claims, disputes, actions, suits, arbitrations,
proceedings or investigations (collectively, "Claims") pending or, to Knowledge,
threatened that directly or indirectly affect any of the Contributor, the
Partnerships or the Properties.
CONTRIBUTION AGREEMENT: Means the Contribution Agreement to which this
EXHIBIT E is attached.
GOVERNMENTAL ENTITY: Means any government or agency, bureau, board,
commission, court, department, official, political subdivision, tribunal or
other instrumentality of any government, whether federal, state or local,
domestic or foreign.
INDEMNIFYING PARTY: Means any party required to indemnify any other
party under ARTICLE 3.2 of this EXHIBIT E or under the indemnification
provisions substantially identical to ARTICLE 3.2 hereof in the other Portfolio
Agreements.
KNOWLEDGE: Means, with respect to any representation or warranty so
indicated, the actual knowledge, upon reasonable investigation and inquiry in
good faith, of the signatory to the Contribution Agreement.
LIENS: Means, with respect to any real and personal property, all
mortgages, pledges, liens, options, charges, security interests, restrictions,
prior assignments, encumbrances, covenants, encroachments, assessments, rights
of others, licenses, easements, liabilities or claims of any kind or nature
whatsoever, direct or indirect, including, without limitation, interests in or
claims to revenues generated by such property.
▇-▇
▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇: Means (a) Liens, or deposits made to secure the
release of such Liens, securing taxes, the payment of which is not delinquent or
the payment of which is actively being contested in good faith by appropriate
proceedings diligently pursued;
(b) Zoning laws and ordinances generally applicable to the
districts in which the Properties are located which are not violated by the
existing structures or present uses thereof;
(c) Liens imposed by laws, such as carriers', warehousemen's and
mechanics' liens, and other similar liens arising in the ordinary course of
business which secure payment of obligations not more than 60 days past due or
which are being contested in good faith by appropriate proceedings diligently
pursued;
(d) non-exclusive easements for public utilities, minor
encroachments, rights of access or other non-monetary matters that do not have a
material adverse effect upon, or materially interfere with the use of, the
Properties; and
(e) any exceptions contained in the Title Policies.
PERSON: Means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or governmental entity.
PORTFOLIO AGREEMENTS: Means the agreements, including the Contribution
Agreement, listed on ATTACHMENT 4 hereto, which contemplate the transfer of
partnership and/or limited liability company membership interests in certain of
the Participating Partnerships and LLCs from any entity directly or indirectly
owned by Contributor to the Company and the Operating Partnership.
PROSPECTUS: Means the Company's Form S-11 Registration Statement.
REIT STOCK: Shall have the meaning set forth in the OP Agreement.
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTOR
The Contributor represents and warrants to the Operating Partnership as
set forth below in this ARTICLE 2. Notwithstanding any other provision of the
Contribution Agreement or this EXHIBIT E, the Contributor makes representations,
warranties and indemnities only with respect to: (i) the Properties identified
on EXHIBIT A to the Contribution Agreement (the "Property" or the "Properties"),
and (ii) the interests in the Partnerships to be transferred by the Contributor.
E-2
25
2.1 ORGANIZATION; AUTHORITY. The Contributor (A) if a natural
person, has the legal capacity to enter the Contribution Agreement; if not a
natural person, is duly formed, validly existing and in good standing (to the
extent applicable) under the laws of the jurisdiction of its formation, and (B)
has all requisite power and authority to own, lease or operate its property and
to carry on its business as presently conducted and, to the extent required
under applicable law, is qualified to do business and is in good standing in
each jurisdiction in which the nature of its business or the character of its
property make such qualification necessary.
2.2 DUE AUTHORIZATION. The execution, delivery and performance of
the Contribution Agreement by the Contributor has been duly and validly
authorized by all necessary action of the Contributor. This Contribution
Agreement and each agreement, document and instrument executed and delivered by
or on behalf of the Contributor pursuant to this Contribution Agreement
constitutes, or when executed and delivered will constitute, the legal, valid
and binding obligation of the Contributor, each enforceable against the
Contributor in accordance with its terms, as such enforceability may be limited
by bankruptcy or the application of equitable principles.
2.3 CONSENTS AND APPROVALS. No consent, waiver, approval or
authorization of any third party is required to be obtained by the Contributor
in connection with the execution, delivery and performance of the Contribution
Agreement and the transactions contemplated hereby, except any of the foregoing
that shall have been satisfied prior to the Closing Date.
2.4 OWNERSHIP OF THE PARTNERSHIP INTERESTS. The Contributor is the
sole owner of the Partnership Interest and has good and valid title to such
Partnership Interest, free and clear of all Liens, other than Permitted Liens.
2.5 PARTNERSHIP INTEREST. The Partnership Interest constitutes all
of the issued and outstanding interests owned by the Contributor in the
Partnerships. The Partnership Interest is validly issued, fully paid and
non-assessable, and was not issued in violation of any preemptive rights. The
Partnership Interest has been issued in compliance with applicable law and the
relevant Partnership Agreements (as then in effect). There are no rights,
subscriptions, warrants, options, conversion rights, preemptive rights or
agreements of any kind outstanding to purchase or to otherwise acquire any of
the interests which comprise the Partnership Interest or any securities or
obligations of any kind convertible into any of the interests which comprise the
Partnership Interest or other equity interests or profit participation of any
kind in the Partnerships. At the Closing, upon receipt of the consideration, the
Contributor will have transferred the Partnership Interest free and clear of all
security interests, mortgages, pledges, liens, encumbrances, claims and equities
to the Operating Partnership.
E-3
26
2.6 NO VIOLATION. None of the execution, delivery or performance
of the Contribution Agreement and the transactions contemplated hereby does or
will, with or without the giving of notice, lapse of time, or both, (i) violate,
conflict with, result in a breach of, or constitute a default under or give to
others any right of termination or cancellation of (A) the organizational
documents, including the charters and bylaws, if any, of the Contributor, (B)
any material agreement, document or instrument to which the Contributor is a
party or by which the Contributor or its Property is bound or (C) any term or
provision of any judgment, order, writ, injunction, or decree of any
governmental or regulatory authority binding on the Contributor or by which the
Contributor or any of its assets or properties are bound or subject or (ii)
result in the creation of any Lien, other than a Permitted Lien, upon the
Property or the Partnership Interest.
2.7 NON-FOREIGN STATUS. The Contributor is not a foreign person,
foreign corporation, foreign partnership, foreign trust or foreign estate (as
defined in the Code), and is, therefore, not subject to the provisions of the
Code relating to the withholding of sales proceeds to foreign persons.
2.8 WITHHOLDING. The Contributor shall execute at Closing such
certificates or affidavits reasonably necessary to document the inapplicability
of any federal or state withholding provisions. If Contributor fails to provide
such certificates or affidavits, the Operating Partnership may withhold a
portion of any payments otherwise to be made to the Contributor as required by
the Code or New York law.
2.9 INVESTMENT PURPOSES. The Contributor acknowledges his, her or
its understanding that the offering and sale of the OP Units to be acquired
pursuant to the Contribution Agreement are intended to be exempt from
registration under the Securities Act of 1933, as amended, and the rules and
regulations in effect thereunder (the "Act"). In furtherance thereof, the
Contributor represents and warrants to the Company as follows:
2.9.1 INVESTMENT. The Contributor is acquiring the OP Units
solely for his, her or its own account for the purpose of investment and not as
a nominee or agent for any other person and not with a view to, or for offer or
sale in connection with, any distribution of any thereof. The Contributor agrees
and acknowledges that he, she or it will not, directly or indirectly, offer,
transfer, sell, assign, pledge, hypothecate or otherwise dispose of
(hereinafter, "Transfer") any of the OP Units unless (i) the Transfer is
pursuant to an effective registration statement under the Act and qualification
or other compliance under applicable blue sky or state securities laws, or (ii)
counsel for the Contributor (which counsel shall be reasonably acceptable to the
Operating Partnership) shall have furnished the Operating Partnership with an
opinion, reasonably satisfactory in form and substance to the Operating
Partnership to the effect that no such registration is required because of the
availability of an exemption from registration under the Act and qualification
or other compliance under applicable blue sky or state securities laws.
E-4
27
2.9.2 KNOWLEDGE. The Contributor is knowledgeable,
sophisticated and experienced in business and financial matters; the Contributor
has previously invested in securities similar to the OP Units and fully
understands the limitations on transfer imposed by the Federal securities laws
and as described in the Contribution Agreement. The Contributor is able to bear
the economic risk of holding the OP Units for an indefinite period and is able
to afford the complete loss of his, her or its investment in the OP Units; the
Contributor has received and reviewed all information and documents about or
pertaining to the Company, the Operating Partnership, the business and prospects
of the Company and the Operating Partnership and the issuance of the OP Units as
the Contributor deems necessary or desirable, and has been given the opportunity
to obtain any additional information or documents and to ask questions and
receive answers about such information and documents, the Company, the Operating
Partnership, the business and prospects of the Company and the Operating
Partnership and the OP Units which the Contributor deems necessary or desirable
to evaluate the merits and risks related to his, her or its investment in the OP
Units; and the Contributor understands and has taken cognizance of all risk
factors related to the purchase of the OP Units.
2.9.3 HOLDING PERIOD. The Contributor acknowledges that he,
she or it has been advised that (i) the OP Units and the common stock of the
Company into which the OP Units may be exchanged in certain circumstances (the
"Common Stock") must be held indefinitely, and the Contributor must continue to
bear the economic risk of the investment in the OP Units (and any Common Stock
that might be exchanged therefor) unless they are subsequently registered under
the Act or an exemption from such registration is available, (ii) a restrictive
legend in the form hereafter set forth shall be placed on the certificates
representing the OP Units (and any Common Stock that might be exchanged
therefor), and (iii) a notation shall be made in the appropriate records of the
Operating Partnership (and the Company) indicating that the OP Units (and any
Common Stock that might be exchanged therefor) are subject to restrictions on
transfer.
2.9.4 ACCREDITED INVESTOR. If the Contributor is an
individual, such individual is an "accredited investor" (as such term is defined
in Rule 501(a) of Regulation D under the Act) and as such:
(i) is a director or executive officer of the
Company; or
(ii) has an individual net worth, or joint net
worth with his or her spouse, in excess of $1,000,000; or
(iii) had an individual annual adjusted gross
income in excess of $200,000 in each of the two most recent years and reasonably
expects to have annual adjusted gross income in excess of $200,000 in the
current year; or
E-5
28
(iv) had a joint income with his spouse in excess
of $300,000 in each of the two most recent years and reasonably expects to have
an annual adjusted gross income, with his spouse, in excess of $300,000 in the
current year.
If the Contributor is not an individual, it is an "accredited
investor" (as such term is defined in Rule 501(a) of Regulation D under the
Act).
2.9.5 LEGENDING. Each certificate representing the OP Units
(and any Common Stock that might be exchanged therefor) shall bear the following
legend:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO
THE COMPANY AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, TO THE
EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE
EFFECTED WITHOUT REGISTRATION UNDER THE ACT AND UNDER APPLICABLE STATE
SECURITIES OR "BLUE SKY" LAWS.
In addition, the Common Stock for which the OP Units might be
exchanged shall also bear a legend which generally provides the following:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
ON BENEFICIAL AND CONSTRUCTIVE OWNERSHIP AND TRANSFER FOR THE PURPOSE
OF THE CORPORATION'S MAINTENANCE OF ITS STATUS AS A REAL ESTATE
INVESTMENT TRUST UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE"). SUBJECT TO CERTAIN FURTHER RESTRICTIONS AND EXCEPT AS
EXPRESSLY PROVIDED IN THE CORPORATION'S CHARTER, (1) NO PERSON MAY
BENEFICIALLY OWN OR CONSTRUCTIVELY OWN SHARES OF THE CORPORATION'S
COMMON STOCK IN EXCESS OF 9.8% (BY VALUE OR BY NUMBER OF SHARES,
WHICHEVER IS MORE RESTRICTIVE) OF THE OUTSTANDING COMMON STOCK OF THE
CORPORATION; (2) NO PERSON MAY BENEFICIALLY OR CONSTRUCTIVELY OWN
COMMON STOCK THAT WOULD RESULT IN THE CORPORATION BEING "CLOSELY HELD"
UNDER SECTION 856(H) OF THE CODE OR OTHERWISE CAUSE THE CORPORATION TO
FAIL TO QUALIFY AS A REIT; AND (3) NO PERSON MAY TRANSFER COMMON STOCK
IF SUCH TRANSFER WOULD RESULT IN THE CAPITAL STOCK OF THE CORPORATION
BEING OWNED BY FEWER THAN 100 PERSONS. ANY
E-6
29
PERSON WHO BENEFICIALLY OR CONSTRUCTIVELY OWNS OR ATTEMPTS TO
BENEFICIALLY OR CONSTRUCTIVELY OWN COMMON STOCK WHICH CAUSES OR WILL
CAUSE A PERSON TO BENEFICIALLY OR CONSTRUCTIVELY OWN COMMON STOCK IN
EXCESS OF THE ABOVE LIMITATIONS MUST IMMEDIATELY NOTIFY THE
CORPORATION. IF ANY OF THE RESTRICTIONS ON TRANSFER OR OWNERSHIP ARE
VIOLATED, THE COMMON STOCK REPRESENTED HEREBY WILL BE AUTOMATICALLY
TRANSFERRED TO A TRUSTEE OF A TRUST FOR THE BENEFIT OF ONE OR MORE
CHARITABLE BENEFICIARIES. IN ADDITION, THE CORPORATION MAY REDEEM
SHARES UPON THE TERMS AND CONDITIONS SPECIFIED BY THE BOARD OF
DIRECTORS IN ITS SOLE DISCRETION IF THE BOARD OF DIRECTORS DETERMINES
THAT OWNERSHIP OR A TRANSFER OR OTHER EVENT MAY VIOLATE THE
RESTRICTIONS DESCRIBED ABOVE. FURTHERMORE, UPON THE OCCURRENCE OF
CERTAIN EVENTS, ATTEMPTED TRANSFERS IN VIOLATION OF THE RESTRICTIONS
DESCRIBED ABOVE MAY BE VOID AB INITIO. ALL CAPITALIZED TERMS IN THIS
LEGEND HAVE THE MEANINGS DEFINED IN THE CHARTER OF THE CORPORATION, AS
THE SAME MAY BE AMENDED FROM TIME TO TIME, A COPY OF WHICH, INCLUDING
THE RESTRICTIONS ON TRANSFER AND OWNERSHIP, WILL BE FURNISHED TO EACH
HOLDER OF COMMON STOCK ON REQUEST AND WITHOUT CHARGE. REQUESTS FOR SUCH
A COPY MAY BE DIRECTED TO THE SECRETARY OF THE CORPORATION.
2.10 LITIGATION. There are no Claims which could
reasonably be anticipated to result in damages in excess of $50,000 pending or,
to Knowledge, threatened that directly or indirectly affect the Contributor, the
Partnerships, the Properties or the Formation Transactions, nor has any such
claim been pending or, to Knowledge, threatened as of the Closing.
2.11 NO BROKERS. Neither the Contributor nor any of its
respective officers, directors or employees has employed or made any agreement
with any broker, finder or similar agent or any person or firm which will result
in the obligation of the Operating Partnership or any of its affiliates to pay
any finder's fee, brokerage fees or commissions or similar payment in connection
with the transactions contemplated by the Contribution Agreement.
2.12 SOLVENCY. The Contributor has been and will be
solvent at all times prior to and immediately following the transfer of the
Partnership Interest to the Operating Partnership.
E-7
30
2.13 NO MISREPRESENTATIONS. No representation, warranty or
statement made, or information provided, by the Contributor in the Contribution
Agreement or in any other document or instrument furnished or to be furnished by
or on behalf of the Contributor pursuant hereto or as contemplated hereby (i)
contains or will contain any untrue statement of a material fact or (ii) omits
or will omit to state a material fact necessary to make the statements contained
herein or therein not misleading. For purposes of the preceding sentence,
materiality shall be determined with reference to the total portfolio of real
properties and other interests to be transferred pursuant to the Operating
Partnership pursuant to the Formation Transactions.
ARTICLE 3. INDEMNIFICATION
3.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; REMEDY
FOR BREACH.
(a) Subject to ARTICLE 3.6, all representations and
warranties contained in this EXHIBIT E or in any Schedule or certificate
delivered pursuant hereto shall survive the Closing.
(b) Notwithstanding anything to the contrary in the
Contribution Agreement or this EXHIBIT E, no party hereto shall be liable under
this EXHIBIT E or the Contribution Agreement for monetary damages (or otherwise)
for breach of any of its representations and warranties contained in this
EXHIBIT E or the Contribution Agreement, or in any Schedule, certificate or
affidavit delivered by it pursuant thereto, other than pursuant to the
succeeding provisions of this ARTICLE 3.
3.2 GENERAL INDEMNIFICATION
(a) The Contributor shall indemnify and hold harmless the
Operating Partnership, the Company, and their affiliates and each of their
respective directors, officers, employees, agents, representatives and
affiliates (each of which is an "Indemnified Party") from and against any and
all claims, losses, damages, liabilities and expenses, including, without
limitation, amounts paid in settlement, reasonable attorneys' fees, costs of
investigation, costs of investigative, judicial or administrative proceedings or
appeals therefrom, and costs of attachment or similar bonds (collectively,
"Losses"), asserted against, imposed upon or incurred by the Indemnified Party
in connection with or as a result of any breach of a representation or warranty
of the Contributor contained in the Contribution Agreement or in any Schedule,
certificate or affidavit delivered by the Contributor pursuant to the
Contribution Agreement.
E-8
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(b) The Contributor shall indemnify and hold harmless the
Indemnified Parties from and against any and all Losses, asserted against,
imposed upon or incurred by the Indemnified Parties in connection with or as a
result of:
(i) all fees and expenses of the Contributor in
connection with the transactions contemplated by the Contribution
Agreement;
(ii) any liabilities or obligations incurred, arising
from or out of, in connection with or as a result of the failure of the
Contributor to obtain all consents required to consummate the
transactions contemplated by the Contribution Agreement; or
(iii) any breach of any representation, warranty or
covenant set forth in the Contribution Agreement.
3.3 PAYMENT OF INDEMNIFICATION. The Contributor may
satisfy its obligations hereunder by the prompt delivery (paid promptly as and
when expenses are incurred) to an Indemnified Party of OP Units, subject to the
limits on ownership and transfer of REIT Stock set forth in the Company's
articles of incorporation. Any OP Units delivered to an Indemnified Party
hereunder shall be valued based upon the initial public offering price of the
Company's Common Stock.
3.4 NOTICE AND DEFENSE BY CLAIMS. As soon as reasonably
practicable after receipt by the Indemnified Party of notice of any liability or
claim incurred by or asserted against the Indemnified Party that is subject to
indemnification under this ARTICLE 3, the Indemnified Party shall give notice
thereof to the Contributor. The Indemnified Party may at its option demand
indemnity under this ARTICLE 3 as soon as a claim has been threatened by a third
party, regardless of whether an actual Loss has been suffered, so long as the
Indemnified Party shall in good faith determine that such claim is not frivolous
and that the Indemnified Party may be liable for, or otherwise incur, a Loss as
a result thereof and shall give notice of such determination to the Contributor.
The Indemnified Party shall permit the Contributor, at its option and expense,
to assume the defense of any such claim by counsel selected by the Contributor
and reasonably satisfactory to the Indemnified Party, and to settle or otherwise
dispose of the same; PROVIDED, HOWEVER, that the Indemnified Party may at all
times participate in such defense at its expense; and PROVIDED FURTHER, HOWEVER,
that the Contributor shall not, in defense of any such claim, except with the
prior written consent of the Indemnified Party in its sole and absolute
discretion, consent to the entry of any judgment or enter into any settlement
that does not include as an unconditional term thereof the giving by the
claimant or plaintiff in question to the Indemnified Party and its affiliates a
release of all liabilities in respect of such claims, or that does not result
only in the payment of money damages. If the Contributor shall fail to undertake
such defense within 30 days after such notice, or within such shorter time as
may be reasonable under the circumstances, then the Indemnified Party shall have
the right to undertake the
E-9
32
defense, compromise or settlement of such liability or claim on behalf of and
for the account of the Contributor.
3.5 LIMITATIONS ON INDEMNIFICATION UNDER ARTICLE 3.
Notwithstanding anything contained herein to the contrary, the Contributor shall
not be liable or obligated to make payments under this ARTICLE 3 with respect to
any Property or Partnership Interest to the extent such payments in the
aggregate would exceed the value of the OP Units (based upon the initial public
offering price of the Common Stock) received by the Contributor at the Closing.
Notwithstanding anything contained herein to the contrary, the Indemnified
Parties shall look first to the Contributor's OP Units for indemnification under
this ARTICLE 3 and then to the Contributor's other assets.
3.6 LIMITATION PERIOD.
(a) Notwithstanding the foregoing, any claim for
indemnification under ARTICLE 3.2 hereof must be asserted in writing by the
Indemnified Party, stating the nature of the Losses and the basis for
indemnification therefor within one year after the Closing.
(b) If so asserted in writing prior to the applicable
expiration date, such claims for indemnification shall survive until resolved by
mutual agreement between the Contributor and the Indemnified Party or by
judicial determination. Any claim for indemnification not so asserted in writing
prior to the applicable expiration date shall not thereafter be asserted and
shall forever be waived.
3.7 RESERVATION OF CONTRIBUTOR RIGHTS. Notwithstanding
anything else in this Contribution Agreement to the contrary, the Contributor
reserves unto itself all rights and remedies (including rights to seek
contribution) against any third party indemnitors, prior property owners or
occupants, and contributors to any contamination, for which the Partnerships
have been indemnified by the Contributor hereunder. To the extent the
Contributor's rights against any such third party owners, occupants, indemnitors
or contributors may be materially prejudiced by actions or inactions by any
owner or occupant of the Properties after the Closing, the Contributor's
indemnity obligation shall be reduced in accordance with the effect of the
actions or inactions which so prejudiced the Contributor's rights.
E-10
33
ATTACHMENT 1
EXCHANGE RIGHTS AGREEMENT
THIS EXCHANGE RIGHTS AGREEMENT (this "AGREEMENT"), dated as of __________
__, 1997, is entered into by and among Tower Realty Trust, Inc., a Maryland
corporation (the "COMPANY"), Tower Realty Operating Partnership, L.P., a
Delaware limited partnership (the "OPERATING PARTNERSHIP"), and the Persons
whose names are set forth on Exhibit A attached hereto (as it may be amended
from time to time).
R E C I T A L S:
(a) The Company, together with certain other limited
partners, has formed the Operating Partnership
pursuant to the Agreement of Limited Partnership of
the Operating Partnership dated __________ __, 1997
(as such agreement may be amended or amended and
restated from time to time, the "PARTNERSHIP
AGREEMENT").
(b) Pursuant to the Partnership Agreement, the Limited
Partners (as defined below) directly or indirectly
hold units of limited partnership interest ("OP
UNITS") in the Operating Partnership.
(c) The Operating Partnership has agreed to provide the
Limited Partners with certain direct or indirect
rights to exchange their OP Units for cash or, at the
election of the Company, for shares of the Company's
common stock, par value $0.01 per share (the "REIT
STOCK").
Accordingly, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINED TERMS
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
"ASSIGNEE" means a Person to whom one or more OP Units have been
transferred in a manner permitted under the Partnership Agreement, but who has
not become a substituted Limited Partner in accordance therewith.
34
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close.
"CASH AMOUNT" means an amount of cash per OP Unit equal to the Value on
the Valuation Date of the REIT Stock Amount.
"EXCHANGE FACTOR" means 1.0, provided, that in the event that the Company
(i) declares or pays a dividend on its outstanding REIT Stock in REIT Stock or
makes a distribution to all holders of its outstanding REIT Stock in REIT Stock;
(ii) subdivides its outstanding REIT Stock; or (iii) combines its outstanding
REIT Stock into a smaller number of shares of REIT Stock, the Exchange Factor
shall be adjusted by multiplying the Exchange Factor by a fraction, the
numerator of which shall be the number of shares of REIT Stock issued and
outstanding on the record date for such dividend, contribution, subdivision or
combination assuming for such purpose that such dividend, distribution,
subdivision or combination has occurred as of such time, and the denominator of
which shall be the actual number of shares of REIT Stock (determined without the
above assumption) issued and outstanding on the record date for such dividend,
distribution, subdivision or combination. Any adjustment to the Exchange Factor
shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event.
"EXCHANGING PARTNER" has the meaning set forth in Section 2.1 hereof.
"EXCHANGE RIGHT" has the meaning set forth in Section 2.1 hereof.
"IPO" means an initial public offering by the Company of the REIT Stock
pursuant to a Registration Statement on Form S-11, filed with and declared
effective by the SEC.
"LIEN" means any lien, security interest, mortgage, deed of trust, charge,
claim, encumbrance, pledge, option, right of first offer or first refusal and
any other right or interest of others of any kind or nature, actual or
contingent, or other similar encumbrance of any nature whatsoever.
"LIMITED PARTNER" means any Person, other than the Company, named as a
Limited Partner on Exhibit A, as such Exhibit may be amended from time to time.
"LOCK-UP AGREEMENT" means, collectively, the several Lock-up Agreements
executed by each of the Limited Partners other than the Company, dated the date
hereof, which prohibit the transfer of the OP Units held by such Limited Partner
without the consent of ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇, Incorporated
and/or the Operating Partnership
"NOTICE OF EXCHANGE" means the Notice of Exchange substantially in the
form of Exhibit B to this Agreement.
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35
"PERSON" shall mean an individual, partnership, corporation, limited
liability company, trust, estate, or unincorporated organization, or other
entity, or a government or agency or political subdivision thereof.
"REIT STOCK AMOUNT" means that number of shares of REIT Stock equal to the
product of the number of OP Units offered for exchange by an Exchanging Partner,
multiplied by the Exchange Factor as of the Valuation Date, provided, that in
the event the Company or the Operating Partnership issues to all holders of REIT
Stock rights, options, warrants or convertible or exchangeable securities
entitling the stockholders to subscribe for or purchase REIT Stock, or any other
securities or property (collectively, the "rights"), then the REIT Stock Amount
shall also include such rights that a holder of that number of shares of REIT
Stock would be entitled to receive.
"SEC" means the Securities and Exchange Commission.
"SPECIFIED EXCHANGE DATE" means the tenth (10th) Business Day after
receipt by the Operating Partnership and the Company of a Notice of Exchange.
"VALUATION DATE" means the date of receipt by the Operating Partnership
and the Company of a Notice of Exchange or, if such date is not a Business Day,
the first Business Day thereafter.
"VALUE" means, with respect to shares of REIT Stock, the average of the
daily market price for the five (5) consecutive trading days immediately
preceding the Valuation Date. The market price for each such trading day shall
be:
(i) if the REIT Stock are listed or admitted to trading on the
New York Stock Exchange (the "NYSE"), any other national securities
exchange or the Nasdaq Stock Market ("Nasdaq"), the closing price on
such day, or if no such sale takes place on such day, the average of
the closing bid and asked prices on such day; or
(ii) if the REIT Stock are not listed or admitted to trading
on the NYSE, any national securities exchange or Nasdaq, the last
reported sale price on such day or, if no sale takes place on such day,
the average of the closing bid and asked prices on such day, as
reported by a reliable quotation source designated by the Company.
In the event the REIT Stock Amount includes rights that a holder of REIT Stock
would be entitled to receive, then the Value of such rights shall be determined
by the independent directors of the Company acting in good faith on the basis of
such quotations and other information as they consider, in their reasonable
judgment, appropriate.
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ARTICLE II
EXCHANGE RIGHT
2.1 Exchange Right. (a) Subject to Sections 2.2, 2.3, 2.4 and 2.5
hereof, and subject to any limitations under applicable law, the Operating
Partnership hereby grants to each Limited Partner and each Limited Partner
hereby accepts the right (the "EXCHANGE RIGHT"), exercisable on or after the
date that is one (1) year after the closing of the IPO, to exchange on a
Specified Exchange Date all or a portion of the OP Units held by such Limited
Partner at an exchange price equal to the Cash Amount.
(b) The Exchange Right shall be exercised pursuant to a Notice of
Exchange delivered to the Operating Partnership, with a copy delivered to the
Company, by the Limited Partner who is exercising the Exchange Right (the
"EXCHANGING PARTNER"); provided, however, that the Company, on behalf of the
Operating Partnership, may elect, after a Notice of Exchange is delivered, to
satisfy the Exchange Right which is the subject of such notice in accordance
with Section 2.2.
(c) A Limited Partner may not exercise the Exchange Right for less
than one thousand (1,000) OP Units or, if such Limited Partner holds less than
one thousand (1,000) OP Units, all of the OP Units held by such Limited Partner.
(d) Any Assignee of a Limited Partner may exercise the rights of
such Limited Partner pursuant to this Article 2, and such Limited Partner shall
be deemed to have assigned such rights to such Assignee and shall be bound by
the exercise of such rights by such Assignee.
(e) In connection with any exercise of such rights by an Assignee
on behalf of a Limited Partner, the Cash Amount or the REIT Stock Amount, as the
case may be, shall be satisfied by the Operating Partnership or the Company, as
the case may be, directly to such Assignee and not to such Limited Partner.
2.2 Option of Company to Exchange for REIT Stock. (a)
Notwithstanding the provisions of Section 2.1, the Company may, on behalf of the
Operating Partnership, in its sole and absolute discretion, elect to satisfy an
Exchanging Partner's Exchange Right by exchanging REIT Stock and rights equal to
the REIT Stock Amount on the Specified Exchange Date for the OP Units offered
for exchange by the Exchanging Partner.
(b) In the event the Company shall elect to satisfy, on behalf of
the Operating Partnership, an Exchanging Partner's Exchange Right by exchanging
REIT Stock for the OP Units offered for exchange,
(i) the Company hereby agrees so to notify the Exchanging
Partner within five (5) Business Days after the receipt by the Company
of such Notice of Exchange,
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37
(ii) each Exchanging Partner hereby agrees to execute such
documents and instruments as the Company may reasonably require in
connection with the issuance of REIT Stock upon exercise of the
Exchange Right, and
(iii) the Company hereby agrees to deliver stock certificates
representing fully paid and nonassessable shares of REIT Stock.
2.3 Prohibition of Exchange for REIT Stock. Notwithstanding
anything herein to the contrary, the Company shall not be entitled to satisfy an
Exchanging Partner's Exchange Right pursuant to Section 2.2 if the delivery of
REIT Stock to such Limited Partner by the Company pursuant to Section 2.2
(regardless of the Operating Partnership's obligations to the Limited Partner
under Section 2.1)
(a) would be prohibited under the Articles of Incorporation of
the Company,
(b) would otherwise jeopardize the REIT status of the Company,
or
(c) would cause the acquisition of the REIT Stock by the
Limited Partner to be "integrated" with any other distribution of REIT
Stock by the Company for purposes of complying with the registration
provisions of the Securities Act.
2.4 Payment Date. Any Cash Amount to be paid to an Exchanging
Partner shall be paid on the Specified Exchange Date; provided, however, that
the Operating Partnership may elect to cause the Specified Exchange Date to be
delayed for up to an additional 180 days to the extent required for the Company
to cause additional REIT Shares to be issued to provide financing to be used to
make such payment of the Cash Amount by the Operating Partnership.
2.5 Exercise by Pledgee. Notwithstanding the provisions of this
Article 2, any person to whom OP Units have been pledged, in compliance with the
terms of the Lock-up Agreement, may exercise its Exchange Right prior to the
date that is one (1) year after the closing of the IPO, provided, however, such
OP Units shall only be exchangeable for the Cash Amount.
2.6 Expiration of Exchange Right. The Exchange Right shall expire
with respect to any OP Units for which an Exchange Notice has not been delivered
to the Operating Partnership and the Company on or before December 31, 2047.
2.7 Effect of Exchange. (a) Any exchange of OP Units pursuant to
this Article 2 shall be deemed to have occurred as of the Specified Exchange
Date for all purposes, including without limitation the payment of distributions
or dividends in respect of OP Units or REIT Stock, as applicable.
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38
(b) Any OP Units acquired by the Company pursuant to an exercise
by any Limited Partner of an Exchange Right shall be deemed to be acquired by
and reallocated or reissued to the Company.
(c) The Company, as general partner of the Operating Partnership,
shall amend the Partnership Agreement to reflect each such exchange and
reallocation or reissuance of OP Units and each corresponding recalculation of
the OP Units of the Limited Partners.
ARTICLE III
OTHER PROVISIONS
3.1 Covenants of the Company. (a) At all times during the pendency
of the Exchange Right, the Company shall reserve for issuance such number of
shares of REIT Stock as may be necessary to enable the Company to issue such
shares in full payment of the REIT Stock Amount in regard to all OP Units held
by Limited Partners which are from time to time outstanding.
(b) During the pendency of the Exchange Right, the Company shall
deliver to Limited Partners in a timely manner all reports filed by the Company
with the SEC to the extent the Company also transmits such reports to its
stockholders and all other communications transmitted from time to time by the
Company to its stockholders generally.
(c) The Company shall notify each Limited Partner, upon request,
of the then current Exchange Factor and such notice will include a reasonable
explanation of the Exchange Factor calculation to be applied at such time.
3.2 Fractional Shares. (a) No fractional shares of REIT Stock
shall be issued upon exchange of OP Units.
(b) The number of full shares of REIT Stock which shall be
issuable upon exchange of OP Units (or the cash equivalent amount thereof if the
Cash Amount is paid) shall be computed on the basis of the aggregate amount of
OP Units so surrendered.
(c) Instead of any fractional shares of REIT Stock which would
otherwise be issuable upon exchange of any OP Units, the Operating Partnership
shall pay a cash adjustment in respect of such fraction in an amount equal to
the Cash Amount of an OP Unit multiplied by such fraction.
3.3 Investment Representations and Warranties. By delivering to
the Company a Notice of Exchange, each Exchanging Partner will be deemed to
represent and warrant to the Company and the Operating Partnership that such
Exchanging Partner is aware of the Company's option to exchange such Exchanging
Partner's OP Units for REIT Stock pursuant to Section 2.2 hereof and that:
(a) (i) Such Exchanging Partner has received and reviewed
-6-
39
(A) a copy of the prospectus contained in the
Registration Statement on Form S-11 filed by the Company in
connection with the IPO, any prospectus contained in any
Registration Statement subsequently filed by the Company, and
any supplement or amendment thereto (each, a "PROSPECTUS"),
and
(B) copies of all reports and other filings (the "SEC
REPORTS"), including Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K, made by
the Company with the SEC pursuant to the Securities Exchange
Act of 1934, as amended, and the rules and regulations
thereunder,
and understands the risks of, and other considerations relating to, an
investment in REIT Stock.
(ii) Such Exchanging Partner, by reason of its business and
financial experience, together with the business and financial
experience of those persons, if any, retained by it to represent or
advise it with respect to its investment in REIT Stock,
(A) has such knowledge, sophistication and experience
in financial and business matters and in making investment
decisions of this type that it is capable of evaluating the
merits and risks of and of making an informed investment
decision with respect to an investment in REIT Stock,
(B) is capable of protecting its own interest or has
engaged representatives or advisors to assist it in protecting
its interests and
(C) is capable of bearing the economic risk of such
investment.
(iii) (A) Such Exchanging Partner is an "accredited
investor" as defined in Rule 501 of the regulations promulgated under
the Securities Act.
(B) If such Exchanging Partner has retained or
retains a person to represent or advise it with respect to its
investment in REIT Stock, such Exchanging Partner will advise
the Company of such retention and, at the Company's request,
such Exchanging Partner shall, prior to or at delivery of the
REIT Stock hereunder,
(I) acknowledge in writing such
representation and
(II) cause such representative or advisor to
deliver a certificate to the Company containing such
representations as may be reasonably requested by the
Company.
(b) (i) Such Exchanging Partner understands that an investment in
the Company involves substantial risks.
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40
(ii) Such Exchanging Partner has been given the opportunity to
make a thorough investigation of the activities of the Company and has
been furnished with materials relating to the Company and its
activities, including, without limitation, each Prospectus and the SEC
Reports.
(iii) Such Exchanging Partner has relied and is making its
investment decision based upon the Prospectus relating to the IPO and
any subsequent Prospectus, the SEC Reports and other written
information provided to the Exchanging Partner by or on behalf of the
Company and, as applicable, such Exchanging Partner's position as a
director or executive officer of the Company.
(c) (i) The REIT Stock to be issued to such Exchanging Partner
hereunder will be acquired by such Exchanging Partner for its own
account, for investment only and not with a view to, or with any
intention of, a distribution or resale thereof, in whole or in part, or
the grant of any participation therein.
(ii) Such Exchanging Partner was not formed for the specific
purpose of acquiring an interest in the Company.
(d) (i) Such Exchanging Partner acknowledges that
(A) the shares of REIT Stock to be issued to such
Exchanging Partner hereunder have not been registered under
the Securities Act or state securities laws by reason of a
specific exemption or exemptions from registration under the
Securities Act and applicable state securities laws and, the
certificates representing such shares of REIT Stock will bear
a legend to such effect,
(B) the Company's and the Operating Partnership's
reliance on such exemptions is predicated in part on the
accuracy and completeness of the representations and
warranties of such Exchanging Partner contained herein,
(C) the REIT Stock to be issued to such Exchanging
Partner hereunder may not be resold or otherwise distributed
unless registered under the Securities Act and applicable
state securities laws, or unless an exemption from
registration is available,
(D) there may be no market for unregistered shares of
REIT Stock, and
(E) the Company has no obligation or intention to
register such REIT Stock under the Securities Act or any state
securities laws or to take any action that would make
available any exemption from the registration requirements of
such laws, except as provided in the Registration Rights
Agreement entered into by the Company and the Exchanging
Partner (the "REGISTRATION RIGHTS AGREEMENT").
-8-
41
(ii) Such Exchanging Partner acknowledges that because of the
restrictions on transfer or assignment of such REIT Stock to be issued
hereunder, such Exchanging Partner may have to bear the economic risk
of its investment in REIT Stock issued hereunder for an indefinite
period of time, although the holder of any such REIT Stock will be
afforded certain rights to have such REIT Stock registered under the
Securities Act and applicable state securities laws pursuant to the
Registration Rights Agreement.
(e) The address set forth under such Exchanging Partner's name in the
Notice of Exchange is the address of the Exchanging Partner's principal place of
business or, if a natural person, the address of the Exchanging Partner's
residence, and such Exchanging Partner has no present intention of becoming a
resident of any country, state or jurisdiction other than the country and state
in which such principal place of business or residence is situated.
ARTICLE IV
GENERAL PROVISIONS
4.1 Addresses and Notice. Any notice, demand, request or report
required or permitted to be given or made to the Operating Partnership, the
Company, a Limited Partner or Assignee, as the case may be, under this Agreement
shall be in writing and shall be deemed given or made when delivered in person
or when sent by first class United States mail or by other similarly reliable
means of written communication to the Operating Partnership, the Company, a
Limited Partner or Assignee, as the case may be, (i) at the address listed on
the records of the Operating Partnership, with respect to a Limited Partner or
Assignee, and (ii) at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attn:
President, with respect to the Operating Partnership or the Company.
4.2 Titles and Captions. All article or section titles or captions
in this Agreement are for convenience only. They shall not be deemed part of
this Agreement and in no way define, limit, extend or describe the scope or
intent of any provisions hereof. Except as specifically provided otherwise,
references to "Articles" and "Sections" are to Articles and Sections of this
Agreement.
4.3 Pronouns and Plurals. Whenever the context may require, any
pronoun used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and verbs
shall include the plural and vice versa.
4.4 Further Action and Additional Restrictions. The parties shall
execute and deliver all documents, provide all information and take or refrain
from taking action as may be necessary or appropriate to achieve the purposes of
this Agreement.
-9-
42
4.5 Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, executors,
administrators, successors, legal representatives and permitted assigns.
4.6 Waiver. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
condition.
4.7 Counterparts. This Agreement may be executed in counterparts,
all of which together shall constitute one agreement binding on all of the
parties hereto, notwithstanding that all such parties are not signatories to the
original or the same counterpart. Each party shall become bound by this
Agreement immediately upon affixing its signature hereto.
4.8 Applicable Law. This Agreement shall be construed and enforced
in accordance with and governed by the laws of the State of Maryland, without
regard to the principles of conflicts of law thereof.
4.9 Invalidity of Provisions. If any provision of this Agreement
is or becomes invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not be affected thereby.
4.10 Entire Agreement. This Agreement contains the entire
understanding and agreement among the Limited Partners, the Operating
Partnership and the Company with respect to the subject matter hereof and
supersedes any other prior written or oral understandings or agreements among
them with respect thereto.
4.11 Amendment. This Agreement may be amended from time to time
with the consent of the Company by a vote of the Limited Partners in the same
manner as the Partnership Agreement (in accordance with Section 14.1(a) thereof)
may be amended as provided therein, provided, however, that the Company shall
vote its limited partnership interests in proportion to the votes of the other
Limited Partners.
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43
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
THE COMPANY:
TOWER REALTY TRUST, INC.
By:
------------------------------------
Name:
Title:
OPERATING PARTNERSHIP:
TOWER REALTY OPERATING PARTNERSHIP, L.P.
BY: Tower Realty Trust, Inc.,
its general partner
By:
--------------------------------
Name:
Title:
LIMITED PARTNERS:
----------------------------------------
Signature
----------------------------------------
Name (Please Print or Type)
-11-
44
Exhibit A
Name and Address of Limited Partners
[To be attached]
-12-
45
Exhibit B
Notice of Exchange
The undersigned Limited Partner hereby irrevocably (i) exchanges
___________ OP Units in Tower Realty Operating Partnership, L.P., in accordance
with the terms of the Exchange Rights Agreement, dated as of _________ __, 1997
(the "EXCHANGE RIGHTS AGREEMENT"), and the Exchange Right referred to therein;
(ii) surrenders such OP Units and all right, title and interest therein; and
(iii) directs that the Cash Amount or REIT Stock Amount (as determined by the
Company) deliverable upon exercise of the Exchange Right be delivered to the
address specified below, and if REIT Stock is to be delivered, such REIT Stock
will be registered or placed in the name(s) and at the address(es) specified
below.
The undersigned hereby represents, warrants, and certifies that the
undersigned (a) has marketable and unencumbered title to such OP Units, free and
clear, other than any encumbrance arising pursuant to the Partnership Agreement,
of the rights or interests of any other person or entity; (b) has the full
right, power, and authority to exchange and surrender such OP Units as provided
herein; and (c) has obtained the consent or approval of all persons or entities,
if any, (other than consent or approval that may be required of the Company or
the Operating Partnership) having the right to consent or approve such exchange
and surrender on the part of the undersigned.
The undersigned hereby makes the representations and warranties contained
in Section 3.3 of the Exchange Rights Agreement as if such representations and
warranties had been set forth in full in this Notice of Exchange.
Dated: __________________________
______________________________________
Name of Limited Partner (Please Print)
Signature guaranteed by:
(Signature of Limited Partner)
__________________________________
(Street Address)
(City) (State) (Zip Code)
If REIT Stock is to be issued, issue to:
Name:
Limited Partner's social security or tax
identification number:
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46
BATTLE ▇▇▇▇▇▇ LLP
DRAFT - 7/24/97
ATTACHMENT 2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made and entered
into as of _______ __, 1997 by and among Tower Realty Trust, Inc., a Maryland
corporation, which operates as a real estate investment trust (the "COMPANY"),
Tower Realty Operating Partnership, L.P., a Delaware limited partnership (the
"OPERATING PARTNERSHIP"), and the other parties which are signatories hereto
(together with their respective successors, transferees and assigns, each a
"HOLDER" and collectively the "HOLDERS").
WHEREAS, on the date hereof, the Operating Partnership is acquiring, among
other things, certain partnership interests or assets of various partnerships,
joint ventures, limited liability companies, corporations and other entities
which are Holders or in which the Holders own direct or indirect interests (the
"PROPERTY PARTNERSHIPS") pursuant to Option or Contribution Agreements (the
"OPTION AGREEMENTS") among the Operating Partnership and the Grantors named
therein, and in connection therewith the Holders will receive units of limited
partnership interest in the Operating Partnership (such units of limited
partnership interest being referred to hereinafter as the "OP UNITS");
WHEREAS, the Company, the Operating Partnership and the Holders are
parties to an Exchange Rights Agreement which provides the Holders, among other
things, with the right to demand that the Operating Partnership redeem their OP
Units for cash and, at the option of the Company, the Company may satisfy that
redemption request on behalf of the Operating Partnership through the issuance
of the Company's Common Stock, par value $0.01 per share; and
WHEREAS, in order to induce the Property Partnerships and the Holders to
consummate the closings contemplated under the Option Agreements, the Company
has agreed to grant to the Holders the registration rights set forth in Section
2 hereof.
NOW, THEREFORE, the parties hereto, in consideration of the foregoing, the
mutual covenants and agreements hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, hereby agree as follows:
I Definitions.
47
As used in this Agreement, the following capitalized defined terms shall
have the following meanings:
"COMMON STOCK" shall mean shares of common stock, par value $0.01 per
share, of the Company.
"COMPANY" shall have the meaning set forth in the Preamble and also shall
include the Company's successors.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"EXCHANGE RIGHTS AGREEMENT" shall mean the Exchange Rights Agreement,
dated the date hereof, among the Company, the Operating Partnership and the
other parties thereto.
"EXCHANGE STOCK" shall mean any Common Stock issued or to be issued to the
Holders upon the exchange of their OP Units pursuant to the Exchange Rights
Agreement.
"HOLDER" or "HOLDERS" shall have the meaning set forth in the Preamble.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"OP UNITS" shall have the meaning set forth in the Preamble.
"OPERATING PARTNERSHIP" shall have the meaning set forth in the Preamble
and also shall include the Operating Partnership's successors.
"PERSON" shall mean an individual, partnership, corporation, limited
liability company, trust, estate, or unincorporated organization, or other
entity, or a government or agency or political subdivision thereof.
"PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement with respect to the terms
of the offering of any portion of the Registrable Securities covered by a Shelf
Registration Statement, and by all other amendments and supplements to such
prospectus, including post-effective amendments, and in each case including all
material incorporated by reference therein.
"REGISTRABLE SECURITIES" shall mean the Exchange Stock, excluding
(i) Exchange Stock for which a Registration Statement relating
to the sale thereof shall have become effective under the Securities
Act and which have been disposed of under such Registration Statement
or
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48
(ii) Exchange Stock sold or eligible for sale pursuant to Rule
144(k).
"REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance with this Agreement, including, without limitation:
(i) all SEC, stock exchange or NASD registration and filing
fees;
(ii) all fees and expenses incurred in connection with
compliance with state securities or "blue sky" laws (including
reasonable fees and disbursements of counsel in connection with "blue
sky" qualification of any of the Registrable Securities and the
preparation of a Blue Sky Memorandum) and compliance with the rules of
the NASD;
(iii) all expenses of any Persons in preparing or assisting in
preparing, word processing, printing and distributing any Registration
Statement, any Prospectus, certificates and other documents relating to
the performance of and compliance with this Agreement;
(iv) all fees and expenses incurred in connection with the
listing, if any, of any of the Registrable Securities on any securities
exchange or exchanges pursuant to Article III, Section (xii) hereof;
and
(v) the fees and disbursements of counsel for the Company and
of the independent public accountants of the Company, including the
expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance.
Registration Expenses shall specifically exclude underwriting discounts and
commissions, the fees and disbursements of counsel representing a selling
Holder, and transfer taxes, if any, relating to the sale or disposition of
Registrable Securities by a selling Holder, all of which shall be borne by such
Holder in all cases.
"REGISTRATION STATEMENT" or "SHELF REGISTRATION STATEMENT" shall mean a
"shelf" registration statement of the Company and any other Person required to
be a registrant with respect to such shelf registration statement pursuant to
the requirements of the Securities Act which covers the issuance or resale of
the Registrable Securities on Form S-3 or otherwise under Rule 415 promulgated
under the Securities Act, or any similar rule that may be adopted by the SEC,
and all amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all materials incorporated by reference
therein.
"RULE 144" shall mean Rule 144 promulgated under the Securities Act, as
amended from time to time, and any successor rule or regulation under the
Securities Act.
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"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended from
time to time, and any successor Act.
"SHELF REGISTRATION" shall mean a registration required to be effected
pursuant to Section 2 hereof.
II Shelf Registration Under the Securities Act.
2.1 Filing of Shelf Registration Statement.
(i) Within 15 days after the first anniversary date of the
date hereof, the Company shall cause to be filed a Shelf Registration
Statement providing for the sale by the Holders of the Registrable
Securities and will use its reasonable efforts to cause such Shelf
Registration Statement to be declared effective by the SEC as soon as
practicable.
(ii) The Company agrees to use its reasonable best efforts to
keep the Shelf Registration Statement continuously effective for a
period expiring on the date on which all of the Registrable Securities
covered by the Shelf Registration Statement have been sold pursuant to
the Shelf Registration Statement or have become eligible for sale
pursuant to Rule 144(k) and, subject to Article III hereof, further
agrees to supplement or amend the Shelf Registration Statement, if and
as required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration
Statement or by the Securities Act or by any other rules and
regulations thereunder for shelf registration; provided, however, that
the Company shall not be deemed to have used its reasonable efforts to
keep a Registration Statement effective during the applicable period if
it voluntarily takes any action that would result in selling Holders
covered thereby not being able to sell such Registrable Securities
during that period, unless such action is required under applicable law
or the Company has filed a post-effective amendment to the Registration
Statement and the SEC has not declared it effective.
(iii) Notwithstanding the foregoing, the Company shall not be
required to file a Registration Statement or to keep a Registration
Statement effective if the negotiation or consummation of a transaction
is pending or an event has occurred, which negotiation, consummation or
event would require additional disclosure by the Company in the
Registration Statement of material information which the Company has a
bona fide business purpose for keeping confidential and the
nondisclosure of which in the Registration Statement might cause the
Registration Statement to fail to comply with applicable disclosure
requirements; provided, however, that the Company may not
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delay, suspend or withdraw a Registration Statement for such reason for
more than 60 days or more often than twice during any period of 12
consecutive months.
(iv) The Company is not required to file a separate
Registration Statement, but may file one Registration Statement
covering the Registrable Securities held by more than one Holder.
2.2 Expenses.
(i) The Company shall pay all Registration Expenses in
connection with any registration pursuant to Article II.
(ii) Each Holder shall pay all underwriting discounts, if any,
sales commissions, the fees and disbursements of counsel representing
such Holder and transfer taxes, if any, relating to the sale or
disposition of such Holder's Registrable Securities pursuant to the
Shelf Registration Statement or Rule 144.
2.3 Inclusion in Shelf Registration Statement. Any Holder that
does not, within 10 days after receipt of a reasonable request by the Company
for information in connection with the Shelf Registration Statement, provide
such information to the Company, shall not be entitled to have its Registrable
Securities included in the Shelf Registration Statement.
2.4 Effect of Material Breach. In the event that the Company shall
breach any of its material obligations hereunder in any material respect, any
Holder of Registrable Securities may demand that the Company file a registration
statement covering such Holder's Registrable Securities. The Company agrees to
file such registration statement within 60 days after receipt of such demand and
agrees to use its best efforts to procure the effectiveness of such registration
statement within 60 days after filing.
III Registration Procedures. (a) In connection with the obligations of the
Company with respect to the Registration Statement required to be filed pursuant
to Article 2 hereof, the Company shall, to the extent applicable:
(i) Prepare and file with the SEC, within the time period set
forth in Section 2 hereof, a Shelf Registration Statement, which Shelf
Registration Statement
(A) shall be available for the sale of the
Registrable Securities in accordance with the intended method
or methods of distribution by the selling Holders thereof, and
(B) shall comply as to form in all material respects
with the requirements of the applicable form of registration
statement and include all financial statements required by the
SEC to be filed therewith.
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(ii) (A) Subject to Article III, Section (a)(ii)(B),
(I) prepare and file with the SEC such amendments and
post-effective amendments to each such Registration Statement
as may be necessary to keep such Registration Statement
effective for the applicable period;
(II) cause each such Prospectus to be supplemented by
any required prospectus supplement, and as so supplemented to
be filed pursuant to Rule 424 or any similar rule that may be
adopted under the Securities Act;
(III) respond as promptly as practicable to any
comments received from the SEC with respect to the Shelf
Registration Statement, or any amendment, post-effective
amendment or supplement relating thereto; and
(IV) comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by
each Registration Statement during the applicable period in
accordance with the intended method or methods of distribution
by the selling Holders thereof.
(B) (I) Each Holder shall promptly provide to the Company
such information as the Company reasonably requests in order
to identify such Holder and the method of distribution in a
post-effective amendment to the Registration Statement or a
supplement to the Prospectus.
(II) Such Holder also shall notify the Company in
writing upon completion of any offer or sale or at such time
as such Holder no longer intends to make offers or sales under
the Registration Statement.
(iii) Furnish to each Holder of Registrable Securities, without charge,
as many copies of each Prospectus, including each preliminary Prospectus, and
any amendment or supplement thereto and such other documents as such Holder may
reasonably request, in order to facilitate the public sale or other disposition
of the Registrable Securities; the Company consents to the use of the
Prospectus, including each preliminary Prospectus, by each such Holder of
Registrable Securities in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or the preliminary Prospectus.
(iv) Use its reasonable efforts to register or qualify the Registrable
Securities by the time the applicable Registration Statement is declared
effective by the SEC under all applicable state securities or "blue sky" laws of
such jurisdictions as any Holder of
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Registrable Securities covered by a Registration Statement shall reasonably
request in writing, keep each such registration or qualification effective
during the period such Registration Statement is required to be kept effective,
and do any and all other acts and things which may be reasonably necessary or
advisable to enable such Holder to consummate the disposition in each such
jurisdiction of such Registrable Securities owned by such Holder; provided,
however, that the Company shall not be required to
(A) qualify generally to do business in any jurisdiction or to
register as a broker or dealer in such jurisdiction where it would not
otherwise be required to qualify but for this Article III, Section
(a)(iv),
(B) subject itself to taxation in any such jurisdiction, or
(C) submit to the general service of process in any such
jurisdiction.
(v) Notify each Holder of Registrable Securities promptly and, if
requested by such Holder, confirm such notification in writing
(A) when a Registration Statement has become effective and
when any post-effective amendments and supplements thereto become
effective,
(B) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that
purpose,
(C) if the Company receives any notification with respect to
the suspension of the qualification of the Registrable Securities for
sale in any jurisdiction or the initiation of any proceeding for such
purpose, and
(D) of the happening of any event during the period a
Registration Statement is effective which is of a type specified in
Article II, Section 2.1(iii) hereof or as a result of which such
Registration Statement or the related Prospectus contains any untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made (in
the case of the Prospectus), not misleading.
(vi) Make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the earliest
possible moment.
(vii) Furnish to each Holder of Registrable Securities, without charge,
at least one conformed copy of each Registration Statement and any
post-effective amendment
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thereto (without documents incorporated therein by reference or exhibits
thereto, unless requested).
(viii) (A) Cooperate with the selling Holders of Registrable
Securities to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any Securities
Act legend; and
(B) enable certificates for such Registrable Securities to be
issued for such numbers of shares of Common Stock and registered in
such names as the selling Holders may reasonably request at least two
business days prior to any sale of Registrable Securities.
(ix) Subject to Article II, Section 2.1(iii) and Article III, Section
(a)(ii)(B) hereof, upon the occurrence of any event contemplated by Article III,
Section (a)(v)(D) hereof, use its reasonable efforts promptly to prepare and
file a supplement or prepare, file and obtain effectiveness of a post-effective
amendment to a Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Securities, such
Prospectus will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(x) Make available for inspection by representatives of the Holders of
the Registrable Securities and any counsel or accountant retained by such
Holders, all financial and other records, pertinent corporate documents and
properties of the Company, and cause the respective officers, directors and
employees of the Company to supply all information reasonably requested by any
such representative, counsel or accountant in connection with a Registration
Statement; provided, however, that such records, documents or information which
the Company determines, in good faith, to be confidential and notifies such
representatives, counsel or accountants in writing that such records, documents
or information are confidential shall not be disclosed by such representatives,
counsel or accountants unless
(A) the disclosure of such records, documents or information
is necessary to avoid or correct a material misstatement or omission in
a Registration Statement,
(B) the release of such records, documents or information is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction, or
(C) such records, documents or information have been generally
made available to the public.
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(xi) Within a reasonable time prior to the filing of any Registration
Statement, any Prospectus, any amendment to a Registration Statement or
amendment or supplement to a Prospectus, provide copies of such document (not
including any documents incorporated by reference therein unless requested) to
the Holders of Registrable Securities.
(xii) Use its reasonable efforts to cause all Registrable Securities to
be listed on any securities exchange on which similar securities issued by the
Company are then listed.
(xiii) Provide a CUSIP number for all Registrable Securities, not later
than the effective date of a Registration Statement.
(xiv) Otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the SEC and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering at
least 12 months which shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 promulgated thereunder.
(xv) Use its reasonable efforts to cause the Registrable Securities
covered by a Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable Holders to consummate the
disposition of such Registrable Securities.
(b) The Company may require each Holder of Registrable Securities to furnish to
the Company in writing such information regarding the proposed distribution by
such Holder of such Registrable Securities as the Company may from time to time
reasonably request in writing.
(c) In connection with and as a condition to the Company's obligations with
respect to the Registration Statement required to be filed pursuant to Section 2
hereof and this Section 3, each Holder agrees that
(i) it will not offer or sell its Registrable Securities under the
Registration Statement until it has received copies of the supplemental or
amended Prospectus contemplated by Article III, Section (a)(ii) hereof and
receives notice that any post-effective amendment has become effective, and
(ii) upon receipt of any notice from the Company of the happening of
any event of the kind described in Article III, Section (a)(v)(D) hereof, such
Holder will forthwith discontinue disposition of Registrable Securities pursuant
to a Registration Statement until such Holder receives copies of the
supplemented or amended Prospectus contemplated by Article III, Section (a)(ix)
hereof and receives notice that any post-
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effective amendment has become effective, and, if so directed by the Company,
such Holder will deliver to the Company (at the expense of the Company) all
copies in its possession, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Registrable Securities current at
the time of receipt of such notice.
IV Indemnification; Contribution.
4.1 Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Holder and its officers and directors and each
Person, if any, who controls any Holder (within the meaning of Section 15 of the
Securities Act) as follows:
(a) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of
(A) any untrue statement or alleged untrue statement
of a material fact contained in any Registration Statement (or
any amendment thereto) pursuant to which Registrable
Securities were registered under the Securities Act, including
all documents incorporated therein by reference, or
(B) the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to
make the statements therein not misleading or
(C) arising out of any untrue statement or alleged
untrue statement of a material fact contained in any
Prospectus (or any amendment or supplement thereto), including
all documents incorporated therein by reference, or
(D) the omission or alleged omission therefrom of a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading;
(b) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, if such settlement is
effected with the written consent of the Company, which consent shall
not be unreasonably withheld or delayed; and
(c) against any and all expense whatsoever, as incurred
(including reasonable fees and disbursements of counsel), reasonably
incurred in investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental
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agency or body, commenced or threatened, in each case whether or not a
party, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under subparagraph (a) or (b)
above;
provided, however, that the indemnity provided pursuant to this Article
IV, Section 4.1(c) does not apply to any Holder with respect to any
loss, liability, claim, damage or expense to the extent arising out of
(x) any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with
written information furnished to the Company by such Holder expressly
for use in a Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto) or
(y) such Holder's failure to deliver an amended or
supplemental Prospectus, after having been provided copies of any such
amended or supplemental Prospectus by the Company, if such loss,
liability, claim, damage or expense would not have arisen had such
delivery occurred.
4.2 Indemnification by Holders. Each Holder severally agrees to
indemnify and hold harmless the Company and the other selling Holders, and each
of their respective directors and officers (including each director and officer
of the Company who signed the Registration Statement), and each Person, if any,
who controls the Company or any other selling Holder within the meaning of
Section 15 of the Securities Act, under the same circumstances and to the same
extent as the indemnity contained in Section 4.1(a) hereof (except that any
settlement described in Section 4.1(a)(B) shall be effected with the written
consent of such Holder, which consent shall not be unreasonably withheld or
delayed), but only insofar as such loss, liability, claim, damage or expense
arises out of or is based upon any untrue statement or omission, or alleged
untrue statements or omissions, made in a Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such selling Holder expressly for use in such Registration Statement
(or any amendment thereto) or such Prospectus (or any amendment or supplement
thereto).
4.3 Conduct of Indemnification Proceedings. (i) Each indemnified
party shall give reasonably prompt notice to each indemnifying party of any
action or proceeding commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party
(A) shall not relieve it from any liability which it
may have under the indemnity agreement provided in Section
4.1(a) or 4.1(b) above, unless and to the extent it did not
otherwise learn of such action and the lack of notice by the
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indemnified party results in the forfeiture by the
indemnifying party of substantial rights and defenses and
(B) shall not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than
the indemnification obligation provided under Section 4.1(a)
or 4.1(b) above.
(ii) If the indemnifying party so elects within a reasonable
time after receipt of such notice, the indemnifying party may assume
the defense of such action or proceeding at such indemnifying party's
own expense with counsel chosen by the indemnifying party and approved
by the indemnified parties defendant in such action or proceeding,
which approval shall not be unreasonably withheld; provided, however,
that, if such indemnified party or parties reasonably determine that a
conflict of interest exists where it is advisable for such indemnified
party or parties to be represented by separate counsel or that, upon
advice of counsel, there may be legal defenses available to them which
are different from or in addition to those available to the
indemnifying party, then the indemnifying party shall not be entitled
to assume such defense and the indemnified party or parties shall be
entitled to one separate counsel at the indemnifying party's or
parties' expense.
(iii)(A) If an indemnifying party is not entitled to assume
the defense of such action or proceeding as a result of the
proviso to Section 4.1(c), such indemnifying party's counsel
shall be entitled to conduct such indemnifying party's
defense, and counsel for the indemnified party or parties
shall be entitled to conduct the defense of such indemnified
party or parties, it being understood that both such counsel
will cooperate with each other to conduct the defense of such
action or proceeding as efficiently as possible.
(B) If an indemnifying party is not so entitled to
assume the defense of such action or does not assume such
defense, after having received the notice referred to in
Section 4.1(c), the indemnifying party or parties will pay the
reasonable fees and expenses of counsel for the indemnified
party or parties as incurred.
(C) In such event, however, no indemnifying party
will be liable for any settlement effected without the written
consent of such indemnifying party, which consent may not be
unreasonably withheld or delayed.
(iv) If an indemnifying party is entitled to assume, and
assumes, the defense of such action or proceeding in accordance with
this Section 4(c), such indemnifying party shall not be liable for any
fees and expenses of counsel for the indemnified parties incurred
thereafter in connection with such action or proceeding.
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4.4 Contribution.
(i) (A) In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement
provided for in this Section 4 is for any reason held to be
unenforceable although applicable in accordance with its
terms, the Company and the selling Holders shall contribute to
the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by such indemnity
agreement incurred by the Company and the selling Holders, in
such proportion as is appropriate to reflect the relative
fault of and benefits to the Company on the one hand and the
selling Holders on the other (in such proportions that the
selling Holders are severally, not jointly, responsible for
the balance), in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable
considerations.
(B) (I) The relative benefits to the indemnifying
party and indemnified parties shall be determined by
reference to, among other things, the total proceeds
received by the indemnifying party and indemnified
parties in connection with the offering to which such
losses, claims, damages, liabilities or expenses
relate.
(II) The relative fault of the indemnifying
party and indemnified parties shall be determined by
reference to, among other things, whether the action
in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged
omission to state a material fact, has been made by,
or relates to information supplied by, such
indemnifying party or the indemnified parties, and
the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent
such action.
(ii) (A) The parties hereto agree that it would not be just or
equitable if contribution pursuant to this Section 4.4(d) were
determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable
considerations referred to in Section 4.4(i).
(B) Notwithstanding the provisions of this Section
4.4, no selling Holder shall be required to contribute any
amount in excess of the amount by which the total price at
which the Registrable Securities of such selling Holder were
offered to the public exceeds the amount of any damages which
such selling Holder would otherwise have been required to pay
by reason of such untrue statement or omission.
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(iii) Notwithstanding the foregoing, no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
(iv) For purposes of this Section 4.4, each Person, if any,
who controls a Holder within the meaning of Section 15 of the
Securities Act and directors and officers of a Holder shall have the
same rights to contribution as such Holder, and each director of the
Company, each officer of the Company who signed the Registration
Statement and each Person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act shall have the same rights
to contribution as the Company.
V Filing of Exchange Act Reports; Rule 144 Sales
5.1 The Company covenants that it will file the reports required
to be filed by the Company under the Securities Act and the Exchange Act so as
to enable any Holder to sell Exchange Stock pursuant to Rule 144.
5.2 In connection with any sale, transfer or other disposition by
any Holder of any Exchange Stock pursuant to Rule 144, the Company shall
cooperate with such Holder to facilitate the timely preparation and delivery of
certificates representing Exchange Stock to be sold and not bearing any
Securities Act legend, and enable certificates for such Exchange Stock to be for
such number of shares and registered in such names as the selling Holders may
reasonably request at least two business days prior to any sale of Exchange
Stock.
VI Miscellaneous.
6.1 Amendments and Waivers. (i) The provisions of this Agreement,
including the provisions of this Section 6.1(i), may not be amended,
modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given without the written consent of
the Company and the Holders of a majority in amount of the outstanding
Registrable Securities; provided, however, that no amendment,
modification or supplement or waiver or consent to the departure with
respect to the provisions of Articles 2, 4 or 5 hereof shall be
effective as against any Holder unless consented to in writing by such
Holder.
(ii) Notice of any amendment, modification or supplement to
this Agreement adopted in accordance with this Section 6.1 shall be
provided by the Company to each Holder at least thirty (30) days prior
to the effective date of such amendment, modification or supplement.
6.2 Notices. (i) All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex,
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telecopier, or any courier guaranteeing overnight delivery, to the parties at
their respective addresses set forth opposite their signatures below or at such
other address as a party may indicate by written notice to the other party or
parties.
(ii) All such notices and communications shall be deemed to
have been duly given:
(A) at the time delivered by hand, if personally
delivered;
(B) three (3) business days after being deposited in
the mail, postage prepaid, if mailed;
(C) when answered back, if telexed;
(D) when receipt is acknowledged, if telecopied; or
(E) at the time delivered, if delivered by an air
courier guaranteeing overnight delivery.
6.3 Successors, Assigns and Transferees. (i) This Agreement shall
inure to the benefit of and be binding upon the successors, assigns and
transferees of each of the parties, including, without limitation and without
the need for an express assignment, subsequent Holders.
(ii) If any successor, assignee or transferee of any Holder
shall acquire Registrable Securities, in any manner, whether by
operation of law or otherwise, such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Securities such Person shall be entitled to
receive the benefits hereof and shall be conclusively deemed to have
agreed to be bound by all of the terms and provisions hereof.
(iii) The term "successor, assignee or transferee of a Holder"
shall include any Person that acquires Registrable Securities by
operation of law, including upon the merger or consolidation,
liquidation or dissolution of a Holder.
6.4 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
6.5 Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
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6.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND WITHOUT GIVING
EFFECT TO THE CONFLICTS OF LAW PROVISIONS THEREOF.
6.7 Specific Performance. The parties hereto acknowledge that
there would be no adequate remedy at law if any party fails to perform any of
its obligations hereunder, and accordingly agree that each party, in addition to
any other remedy to which it may be entitled at law or in equity, shall be
entitled to compel specific performance of the obligations of any other party
under this Agreement in accordance with the terms and conditions of this
Agreement in any court of the United States or any State thereof having
jurisdiction.
6.8 Entire Agreement. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
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IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement, or caused this Agreement to be duly executed on its behalf, as of the
date first written above.
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ TOWER REALTY TRUST, INC.
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
By:
---------------------------------
Name:
Title:
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ TOWER REALTY OPERATING
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ PARTNERSHIP, L.P.
By: Tower Realty Trust, Inc., its
general partner
By:
---------------------------------
Name:
Title:
HOLDERS:
[Address:]
--------------------------------------
Signature
--------------------------------------
Name (Please Print or Type)
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ATTACHMENT 3
FORM OF
LOCK-UP AGREEMENT
_____________, 1997
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
World Financial Center
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
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Dear Sirs,
The undersigned understands that ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇,
Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and certain other firms propose to enter into an
Underwriting Agreement (the "Underwriting Agreement") providing for the purchase
by ▇▇▇▇▇▇▇ ▇▇▇▇▇ and such other firms (the Underwriters") of shares (the
"Shares") of Common Stock, par value $0.01 per share (the "Common Stock"), of
Tower Realty Trust, Inc. (the "Company") and that the Underwriters propose to
reoffer the Shares to the public pursuant to a public offering (the "Offering").
Capitalized terms used but not otherwise defined in this letter agreement will
have the meaning set forth in the Company's Registration Statement on Form S-11
in connection with the registration under the Securities Act of 1933, as amended
(the "Act"), of Shares.
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the undersigned hereby irrevocably
agrees that without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, the undersigned
will not (and, except as may be disclosed in the Prospectus, will not announce
or disclose any intention to) directly or indirectly sell, offer to sell,
solicit an offer to buy, contract to sell, grant any option to purchase, or
otherwise transfer or dispose (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition at any time in
the future) of, any shares of Common Stock, or any securities convertible into
or exercisable or exchangeable for Common Stock, including any units of limited
partnership interest (the "OP Units") in Tower Realty Operating Partnership,
L.P., a Delaware limited partnership (the "Operating Partnership") beneficially
owned by the undersigned as of the date of the closing of the Company's initial
public offering, for a period of twenty-four (24) months after the later of (i)
date of the final Prospectus relating to the
64
offering of the Shares to the public by the Underwriters and (ii) the date the
Offering is consummated and closed. Prior to the expiration of such period, the
undersigned will not publicly announce or disclose any intention to do anything
after the expiration of such period which the undersigned is prohibited, as
provided in the preceding sentence, from doing during such period.
The undersigned agrees that the provisions of this agreement shall also be
binding upon the successors, assigns, heirs and personal representatives of the
undersigned.
In furtherance of the foregoing, the Company and ________________________,
its Transfer Agent, are hereby authorized to decline to make any transfer of
securities if such transfer would constitute a violation or breach of this
letter agreement.
Very truly yours,
[INVESTOR]
By:____________________________
Name:
Title:
-2-
65
ATTACHMENT 3
(CONTINUED)
FORM OF
LOCK-UP AGREEMENT
_____________, 1997
Tower Realty Operating Partnership, L.P.
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Dear Sirs,
Reference is made to the Option Agreement, dated _________, 1997 (the
"Option Agreement"), by and between the undersigned and Tower Realty Operating
Partnership, L.P., a Delaware limited partnership (the "Operating Partnership").
Capitalized terms used but not otherwise defined in this letter agreement will
have the meaning set forth in the Option Agreement.
In consideration of the execution and exercise of the Option Agreement by
the Operating Partnership, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the undersigned hereby
irrevocably agrees that without the prior written consent of the Operating
Partnership, the undersigned will not directly or indirectly sell, offer to
sell, solicit an offer to buy, contract to sell, grant any option to purchase,
or otherwise transfer or dispose (or enter into any transaction or device which
is designed to, or could be expected to, result in the disposition at any time
in the future) of any any units of limited partnership interest (the "OP Units")
in the Operating Partnership, or any securities convertible into or exercisable
or exchangeable for OP Units, beneficially owned by the undersigned as of the
date hereof, for a period of twenty-four (24) months after the date hereof.
Prior to the expiration of such period, the undersigned will not publicly
announce or disclose any intention to do anything after the expiration of such
period which the undersigned is prohibited, as provided in the preceding
sentence, from doing during such period.
The undersigned agrees that the provisions of this agreement shall also be
binding upon the successors, assigns, heirs and personal representatives of the
undersigned.
In furtherance of the foregoing, the Operating Partnership is hereby
authorized to decline to make any transfer of securities if such transfer would
constitute a violation or breach of this letter agreement.
Very truly yours,
[INVESTOR]
By:________________________________
Name:
Title: