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EXHIBIT 10.39
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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 AUTHORIZATION................................................... -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 Contributor, 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 determined by ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, in his sole discretion, to reflect the reduction in total value of the
Partnership Interest ultimately contributed by the Contributor.
1.4 AUTHORIZATION
Contributor hereby authorizes ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ to make any and
all determinations to be made by him pursuant to ARTICLE 1.3 hereof, and any and
all such determinations shall be final and binding on all parties.
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
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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 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;
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(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;
(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 (including ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇), 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 Executive Officer
and President
CONTRIBUTOR:
/s/ ▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇
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EXHIBIT A
CONSTITUENT INTERESTS OF
▇▇▇▇ ▇▇▇▇▇▇'▇ (THE "CONTRIBUTOR") PARTNERSHIP INTEREST
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PARTNERSHIPS IN WHICH CONTRIBUTOR PARTNERSHIPS IN WHICH CONTRIBUTOR PROPERTIES HELD BY THE PARTNERSHIPS
HOLDS A DIRECT INTEREST* HOLDS AN INDIRECT INTEREST
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5750 Associates Limited Partnership ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
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* Corporations owned by ▇▇▇▇ ▇▇▇▇▇▇ that hold interests in any of the
Properties shall contribute the partnership interests held by such
corporations to the Operating Partnership.
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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 1
attached hereto.
Executed: ___________ ___, 1997
By: _____________________________________
▇▇▇▇ ▇▇▇▇▇▇
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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)
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21
EXHIBIT D
CALCULATION OF NUMBER OF OP UNITS
The number of OP units to be issued to Contributor shall be calculated
as follows:
$202,561/Mid-Point
For purposes of this Contribution Agreement, the "Mid-Point" means the
median of the proposed per share price range for the Common Stock as set forth
in the Preliminary Prospectus.
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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 1 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.
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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.
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25
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
26
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
27
(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
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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.
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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.
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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
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31
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.
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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).
RECITALS:
(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.
33
"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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"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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(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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(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
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(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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(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").
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(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.
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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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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)
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Exhibit A
Name and Address of Limited Partners
[To be attached]
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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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45
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.
46
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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(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.
-5-
50
(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
-7-
52
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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53
(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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54
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
-10-
55
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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56
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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59
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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60
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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61
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:
[Address:] HOLDERS:
_________________________________________
Signature
_________________________________________
Name (Please Print or Type)
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62
ATTACHMENT 3
FORM OF
LOCK-UP AGREEMENT
_____________, 1997
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
World Financial Center
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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
63
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
64
ATTACHMENT 3
(continued)
FORM OF
LOCK-UP AGREEMENT
, 1997
Tower Realty Operating Partnership, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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 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:
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Name:
Title: