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EXHIBIT 10.62
SUPPLEMENTAL REPRESENTATIONS,
WARRANTIES AND INDEMNITY AGREEMENT
THIS SUPPLEMENTAL REPRESENTATIONS, WARRANTIES AND INDEMNITY
AGREEMENT (this "Agreement") is made and entered into as of October __, 1997, by
and among Xxxxxxxx X. Xxxxxxx, Xxxxxx X. Xxx, Xxxxxx X. Xxxxxx, Xxxx X. Xxxxxx,
Xxxxxx Xxxxxxxxx, Xxxxxxxx Xxxxx and Xxxx Xxxxxx and [LIST ENTITIES CONTROLLED
BY THE FOREGOING WHICH WILL OWN UNITS OR SHARES] (collectively, the
"Indemnitors," and each, individually, an "Indemnitor"), TOWER REALTY OPERATING
PARTNERSHIP, a Delaware limited partnership (the "Operating Partnership"), and
TOWER REALTY TRUST, INC., a Maryland corporation (the "Company").
WHEREAS, in connection with an initial public offering of
common stock of the Company (the "Offering"), the closing of which is occurring
on the date hereof, (a) certain Office Properties (or interests therein) owned
in whole or in part (directly or indirectly through one or more limited
partnerships or other entities) by the Indemnitors or by affiliates of the
Indemnitors identified on Exhibit A-1 and certain Office Properties not owned by
the Indemnitors or by affiliates of the Indemnitors identified on Exhibit A-2
(the "Acquired Properties") are being transferred to the Operating Partnership
pursuant to the option or transfer agreements referred to on Exhibit A-3
attached hereto (collectively, the "Transfer Agreements"), (b) the rights of
certain affiliates of the Indemnitors to acquire certain Development Parcels are
being transferred to the Operating Partnership (the Development Parcels together
with the Office Properties and the Acquired Properties are referred to herein as
the "Properties"), and (c) the management, leasing and tenant/landlord
representation businesses (the "Management Business") of Tower Equities and
Realty Corp., a Delaware corporation, and its affiliates and Properties
Atlantic, Inc., a [FLORIDA] corporation (collectively, the "Predecessor
Management Companies"), are being transferred ultimately to Tower Equities
Management, Inc., a Delaware corporation (the "Management Company"), pursuant to
agreements (collectively, the "Management Transfer Agreements") dated as of
__________ , 1997 by and between the Predecessor Management Companies, the
Operating Partnership and the Management Company (all of the foregoing transfers
being collectively referred to herein as the "Formation Transactions")
(capitalized terms used in this Agreement and not otherwise defined herein have
the meanings ascribed to them in the Registration Statement defined in Section 1
hereof); and
WHEREAS, to induce the Company to consummate the Offering and
to cause the Formation Transactions to occur, the Indemnitors, severally but not
jointly, have agreed to make the representations, warranties and indemnities
contained in this Agreement for the benefit of the Company and the Operating
Partnership on the condition that the individual liability of each such
Indemnitor hereunder be limited as
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provided in Section 3 hereof.
NOW, THEREFORE, in consideration of the foregoing and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Representations and Warranties with Respect to Properties, Sellers,
Etc. Each of the Indemnitors represents and warrants to the Company and the
Operating Partnership Properties with respect to (i) each of the properties (the
"Properties") described as "Properties" in the Company's Registration Statement
on Form S-11, No. 333-33011, filed with the Securities Exchange Commission on
August 6, 1997, as amended through the date hereof, (the "Registration
Statement"), (ii) each of the partnerships that currently own the Properties, as
reflected on Exhibit B attached hereto (the "Asset Partnerships"), (iii) each of
the entities listed on Exhibit C attached hereto (the "Xxxxxxx Investor
Entities"), which entities own direct or indirect partnership interests in the
Asset Partnerships, and (iv) the persons or entities transferring direct or
indirect partnership interests in the Asset Partnerships or Xxxxxxx Investor
Entities, as applicable, to the Company or the Operating Partnership pursuant to
the Transfer Agreements (the "Sellers"), as follows:
1.1 Organization and Qualification. Each Asset Partnership and
Xxxxxxx Investor Entity that is a limited partnership was duly formed and is
validly existing and in good standing under the laws of its jurisdiction of
organization, and has the requisite power and authority to carry on its business
as it is now being conducted and, if applicable, to engage in the Formation
Transactions to which it is a party. Each Asset Partnership and Xxxxxxx Investor
Entity that is a general partnership or limited liability company was duly
formed under the laws of its jurisdiction of organization, and has the requisite
power and authority to carry on its business as it is now being conducted and to
engage in the Formation Transactions to which it is a party. Each Xxxxxxx
Investor Entity that is a corporation was duly organized and is validly existing
and in good standing under the laws of its jurisdiction of organization, and has
the requisite power and authority to carry on its business as it is now being
conducted and to engage in the Formation Transactions to which it is a party.
Each Asset Partnership and Xxxxxxx Investor Entity has made available to the
Operating Partnership or the Company complete and correct copies of its
governing instruments, together with all amendments thereto, as in effect on the
date of this Agreement. Each Asset Partnership and Xxxxxxx Investor Entity is
duly qualified or registered to transact business in each jurisdiction in which
such qualification or registration is required, whether by reason of the
ownership or leasing of property, the management of properties owned by others
or the conduct of business, except where the failure to so qualify would not
have a material adverse effect on the condition (financial or otherwise) or the
earnings, assets, business affairs or business prospects of such entity. To the
knowledge of the Indemnitors, each party to the Transfer Agreements relating to
the Acquired Properties who is not an individual person is validly existing in
good standing under the laws of jurisdiction of its incorporation or
organization (if applicable) and is
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duly qualified or registered to transact business in each jurisdiction where
qualification or registration is required and has the requisite power and
authority to execute
1.2 Authority Relative to Transfer Agreements. All action of
each Seller and, to the knowledge of the Indemnitors, each party to the Transfer
Agreements relating to the Acquired Properties, necessary to authorize the
execution, delivery and performance by such Seller of the Transfer Agreements to
which it is a party has been taken, and no other proceedings on the part of any
Seller are necessary to authorize (i) the execution and delivery by such Seller
(or by any attorney-in-fact duly appointed pursuant to the Transfer Agreements
(an "Attorney-in-Fact")), of the Transfer Agreements to which it is a party and
the assignment of partnership interests and other deliveries contemplated
thereby (collectively, the "Seller Agreements") or (ii) the consummation by such
Seller (directly, or through an Attorney-in-Fact) of the Formation Transactions
to which it is a party. Neither the execution and delivery by any Seller, and to
the knowledge of the Indemnitors, each party to the Transfer Agreements relating
to the Acquired Properties (or by any Attorney-in-Fact ), of the Seller
Agreements to which it is a party, nor the consummation by such Seller (or by
any Attorney-in-Fact), of the Transactions to which it is a party, nor
compliance by such Seller (or by any Attorney-in-Fact ), with any of the
provisions of the Seller Agreements to which it is a party will (i) conflict
with or result in any breach of any provisions of the governing instruments of
any such Seller that is not an individual person or of any Asset Partnership or
Xxxxxxx Investor Entity in which such Seller owns a direct or indirect
partnership interest, (ii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any of the organizational documents of the Asset
Partnerships or of the Xxxxxxx Investor Entities or of any note, bond, mortgage,
indenture, lease, license, easement, restriction, contract, agreement or other
instrument or obligation to which such Seller or any such Asset Partnership or
Xxxxxxx Investor Entity is a party or by which any of the foregoing or any of
their respective properties or other assets may be bound, or (iii) violate any
order, writ, injunction, law, decree, statute, agreement, rule or regulation
applicable to any such Seller, Asset Partnership, Xxxxxxx Investor Entity or
Property, except in the case of (ii) or (iii) for violations, breaches or
defaults which would not, singly or in the aggregate, have a material adverse
effect on the business or financial condition of any such Seller, Asset
Partnership, Xxxxxxx Investor Entity or Property or on the Formation
Transactions.
1.3 Consents Obtained; Binding Obligation; Absence of
Undisclosed Liabilities. All consents or waivers necessary for the execution and
performance of the Seller Agreements by each Seller party thereto and, to the
knowledge of the Indemnitors, by each party to the Transfer Agreements relating
to the Acquired Properties (directly or through an Attorney-in-Fact), have been
obtained and are in full force and effect except for those consents or waivers
the failure to obtain would not have a material adverse effect on the financial
condition or earnings, assets or business affairs of the Operating Partnership
or the Company following the consummation of the
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Formation Transactions. Each Seller Agreement has been duly and validly executed
and delivered by each Seller that is a party thereto and, to the knowledge of
the Indemnitors, each party to the Transfer Agreements relating to the Acquired
Properties (directly or through an Attorney-in-Fact), and constitutes a valid
and binding agreement of such Seller, enforceable against such Seller in
accordance with its terms, except that such enforcement may be subject to
bankruptcy, conservatorship, receivership, insolvency, moratorium or similar
laws affecting creditors' rights generally or the rights of creditors of
partnerships and to general principles of equity. Upon consummation of the
assignments and other transactions contemplated by the Transfer Agreements, the
Operating Partnership will acquire, directly or indirectly, good and valid title
to 100% of the ownership interests in each Xxxxxxx Investor Entity and each of
the Asset Partnerships (except that the Operating Partnership will acquire a 10%
ownership interest in the 2800 North Central Property), in each case free and
clear of any liens, encumbrances, debts, liabilities or obligations, direct or
indirect, contingent or non-contingent, and matured or unmatured (collectively,
"Liabilities") except for (i) the liens or encumbrances to which the Company and
the Operating Partnership are taking subject as enumerated in the Registration
Statement (ii) real estate taxes and assessments not yet due and payable, and
(iii) liens and encumbrances reflected on the commitments for title insurance
for each Property heretofore delivered to the Company and the Operating
Partnership (collectively, "Permitted Encumbrances").
1.4 Brokers. No Seller nor any of its general partners,
officers or directors has employed any broker or finder, or incurred any
liability therefor, in connection with the Transactions to which it is a party.
1.5 Ownership. Attached hereto as Exhibit D is a true and
complete listing or diagram of (a) the direct and indirect owners of each
Property, Asset Partnership, and Xxxxxxx Investor Entity and (b) the percentage
interest owned by each such owner therein. No Seller has granted to any person
(other than pursuant to the Transfer Agreements) any option, warrant or other
right to acquire any interest in any Asset Partnership, Xxxxxxx Investor Entity
or Property or, if such Seller is a limited partnership, corporation, or trust,
in such Seller, and to the knowledge of the Indemnitors, no other person or
entity has granted to any person any option, warrant or other right to acquire
any interest in any such Asset Partnership, Xxxxxxx Investor Entity, Seller or
Property (in each case, other than options, warrants or other rights of third
parties that have been duly waived or released).
1.6 Assets. No Asset Partnership or Xxxxxxx Investor Entity
owns any assets other than the assets being transferred to the Operating
Partnership pursuant to the Transfer Agreements.
1.7 Title to Assets. To the knowledge of the Indemnitors, (a)
each Asset Partnership has fee simple title to the Property or a valid and
enforceable leasehold interest in the Property listed on Exhibit D as being
owned or leased by such Asset Partnership and all personal property used or
useful for the operation of such
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Property, and (b) each Seller has good and valid title to the interests in each
Xxxxxxx Investor Entity being transferred by such Sellers pursuant to the Seller
Agreements, in each case free and clear of Liabilities of any kind except
Permitted Encumbrances.
1.8 Debt. Except for the existing mortgage debt with respect
to each Property, as described in the Registration Statement and in the title
commitments referred to in Section 1.3 hereof, no Asset Partnership or Xxxxxxx
Investor Entity has any indebtedness other than indebtedness incurred by it in
its ordinary course of business (which in no case exceeds $10,000 for any single
Xxxxxxx Investor Entity or Asset Partnership). There exists no default, or event
which with the passage of time or notice or both would constitute a default,
with respect to the mortgage debt or any other debt of any such entity that has
not been cured or that would have a material adverse effect on the condition
(financial or otherwise), earnings, business, affairs or business prospects of
such entity or any Property or on the Formation Transactions.
1.9 Financial Condition. Since June 30, 1997, there has been
no material adverse change in the condition (financial or otherwise), earnings,
business, affairs or business prospects of any Seller, any Asset Partnership or
any Xxxxxxx Investor Entity or, to the knowledge of the Indemnitors, any
Acquired Property. No Asset Partnership or Xxxxxxx Investor Entity or, to the
knowledge of the Indemnitors, any Seller of the Acquired Properties (i) is in
receivership or dissolution, (ii) has made an assignment for the benefit of
creditors or admitted in writing its inability to pay its debts as they mature,
and (iii) has been adjudicated a bankrupt or filed a petition in voluntary
bankruptcy or a petition or answer seeking reorganization or an arrangement with
creditors under the federal bankruptcy law or any other similar law or statute
of the United States or any jurisdiction and no such petition has been filed
against such Asset Partnership.
1.10 Contracts. To the knowledge of the Indemnitors, Exhibit E
attached hereto lists all contracts or other understandings, written or oral, to
which any Asset Partnership or Xxxxxxx Investor Entity is a party or by which
any Asset Partnership or Xxxxxxx Investor Entity is bound that relate to a
Property or that would otherwise become binding on the Company or the Operating
Partnership following consummation of the Formation Transactions (collectively,
the "Contracts") which (a) singly or in the aggregate for any Property could
require payments in excess of $20,000 in any year and (b) would not be
terminable on 30 days' notice or less by the Operating Partnership without
violating the terms thereof. Each of the Contracts is valid and binding on the
Asset Partnership or Xxxxxxx Investor Entity that is a party thereto and is in
full force and effect in all material respects. No Asset Partnership or Xxxxxxx
Investor Entity, nor to the knowledge of the Indemnitors, any other party to any
Contract has breached or defaulted under the terms of such Contract, except for
such breaches or defaults that would not, singly or in the aggregate, have a
material adverse effect on the business or operations of any Asset Partnership,
any Xxxxxxx Investor Entity, or any of the Properties or on the Formation
Transactions.
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1.11 Leases; Rent Rolls. With respect to each Property, a true
and correct copy of the form of lease for such Property has been delivered to
the Company and the Operating Partnership. The rent roll attached hereto as
Exhibit F for each Property was true and correct as of the date thereof, and
there have been no material changes to such rent roll since the date thereof,
except as set forth on Exhibit F.
1.12 Permits. There exists for each Development Parcel, and
Office Property, and to the knowledge of the Indemnitors, each Acquired Property
(and will continue to exist immediately following the consummation of the
Formation Transactions) all certificates, licenses, permits and other
authorizations from governmental or political subdivisions or regulatory
authorities (collectively "Permits") as are necessary for the ownership, use,
operation and licensing of such Property as it is currently being operated,
except for such Permits for which the failure to possess would not have a
material adverse effect on the condition (financial or otherwise) earnings,
business, affairs or business prospects of such Property. All such Permits are
in full force and effect and no such Permit has been violated in any material
respect.
1.13 Litigation; Moratoria, Etc. There are no claims, actions,
suits, proceedings or investigations pending or, to the knowledge of the
Indemnitors, threatened against any Seller, any Asset Partnership, any Xxxxxxx
Investor Entity or any of the properties or rights of any of them (including,
without limitation, any Development Parcel and Office Property), or, to the
knowledge of the Indemnitors, against any Acquired Property, before or by any
court or administrative, governmental or regulatory authority or body, domestic
or foreign, that would have a material adverse effect on the condition
(financial or otherwise), earnings, business, affairs or business prospects of
any Property, any such Seller, any such Asset Partnership or Xxxxxxx Investor
Entity or the Formation Transactions. No Seller, Asset Partnership, Xxxxxxx
Investor Entity or Development Parcel or Office Property, or, to the knowledge
of the Indemnitors, any Acquired Property, is subject to any order, judgment,
injunction or decree of any court, tribunal or other governmental authority
(other than generally applicable laws, rules and regulations) that would have a
material adverse effect on the business or condition (financial or otherwise),
earnings, business, affairs or business prospects of such Seller, Asset
Partnership, Xxxxxxx Investor Entity, or Property. To the knowledge of the
Indemnitors, there is no pending or threatened litigation, moratorium,
condemnation proceeding, zoning change, or other similar proceeding or action
that could in any manner affect the size of, use of, improvements on,
construction on, access to or availability of utilities or other necessary
services to any Development Parcel or Office Property, or, to the knowledge of
the Indemnitors, any Acquired Property, except such proceedings or actions that,
singly or in the aggregate, would not have a material adverse effect on the
condition (financial or otherwise), or on the earnings, assets, business,
affairs or business prospects of or with respect to such Property or of any
Predecessor Entity or, following the consummation of the Formation Transactions,
the Company or the Operating Partnership.
1.14 Compliance with Laws, Etc. No Development Parcel or
Office
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Property, or, to the knowledge of the Indemnitors, any Acquired Property, is in
violation in any material respect of any zoning code, law, regulation or
ordinance or any recorded covenants applicable to such Property. No Asset
Partnership, Xxxxxxx Investor Entity or proper representative thereof has
received any written or other notice of any violation of any applicable zoning
code, law, regulation or ordinance, or of any employment, environmental, or
other regulatory law, order, regulation, or requirement relating to a
Development Parcel or Office Property, or, to the knowledge of the Indemnitors,
any Acquired Property, which remains uncured, and there are no such violations
which, individually or in the aggregate, would have a material adverse effect on
the condition (financial or otherwise), earnings, business, affairs or business
prospects of any Seller, Asset Partnership, Xxxxxxx Investor Entity or Property
or on the Formation Transactions.
1.15 Taxes; Utilities, Etc. Except for such matters that in
the aggregate would not result in a material adverse effect on the condition
(financial or otherwise), earnings, business, affairs or business prospects of
any Seller, Asset Partnership, Xxxxxxx Investor Entity or Property or on the
Formation Transactions, (i) all tax or information returns required to be filed
on or before the date hereof by or on behalf of any Seller, Asset Partnership or
Xxxxxxx Investor Entity have been filed through the date hereof or will be filed
on or before the closing of the Offering in accordance with all applicable laws,
and (ii) there is no action, suit or proceeding pending against, or with respect
to, any Seller (other than tax abatement proceedings, Asset Partnership, Xxxxxxx
Investor Entity or Development Parcel or Office Property or, to knowledge of the
Indemnitors, any Acquired Property, in respect of any tax (other than tax
abatement proceedings), nor is any claim for additional tax asserted by any such
authority. No amounts due and owing with respect to any Property in connection
with utilities, insurance, assessments or other charges customarily prorated in
real estate transactions have been outstanding more than 30 days.
1.16 Insurance. Each Asset Partnership and each Xxxxxxx
Investor Entity, and, to the knowledge of the Indemnitors, each Seller of an
Acquired Property, as applicable, currently has in place the public liability,
casualty and other insurance coverage with respect to its property or properties
as is required by the applicable mortgage or bond financing documents to be
assumed by the Company or the Operating Partnership or to be placed by the
Company or the Operating Partnership on any Property (as described in the
Registration Statement) or as would otherwise customarily be carried by prudent
owners or operators of projects similar to the Properties in the markets in
which such Properties are located. Each of the insurance policies with respect
to a Development Parcel or Office Property and, to the knowledge of the
Indemnitors, any Acquired Property, is in full force and effect and all premiums
due and payable thereunder have been fully paid when due. None of the
Indemnitors nor any Asset Partnership or Xxxxxxx Investor Entity, nor, to the
knowledge of the Indemnitors, any Seller of an Acquired Property, has received
from any insurance company notice of any material defects or deficiencies
affecting the insurability of any Property or any notices of cancellation or
intent to cancel any such insurance.
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1.17 Employees. No Asset Partnership or Xxxxxxx Investor
Entity has any employees or has ever had any employees.
1.18 Environmental. To the knowledge of each Indemnitor,
except as disclosed in the Registration Statement, (A) The Environment (as
defined below) at each Property and each property that is subject to a
Management Contract (as defined in Section 2.7 hereof) (each, a "Managed
Property"), is free of any Hazardous Substance (as defined below) except for
Hazardous Substances that would not have a material adverse effect on the
condition (financial or otherwise) or on the earnings, assets, business, affairs
or business prospects of the Property, any Asset Partnership or Xxxxxxx Investor
Entity, the Formation Transactions, or the Company, or the Operating
Partnership, (B) no Asset Partnership or Xxxxxxx Investor Entity or Seller of an
Acquired Property (each, a "Predecessor Entity") has caused or suffered to occur
any Release (as defined below) of any Hazardous Substance into the Environment
on, in, under or from any property either in violation of any Environmental Law
(as defined below) applicable to such Property or Managed Property or in an
amount that would have a material adverse effect on the condition (financial or
otherwise), or on the earnings, assets, business, affairs or business prospects
of any Property, any Asset Partnership or Xxxxxxx Investor Entity, the Formation
Transactions, or the Company or Operating Partnership, and no condition exists
on, in, under or, to the knowledge of any Indemnitor, adjacent to any such
Property or Managed Property, that could result in the incurrence of material
liabilities under, or any material violations, of any Environmental Law
applicable to such property, give rise to the imposition of any Lien (as defined
below) under any Environmental Law, or cause or constitute a health, safety or
environmental hazard to any property, person or entity; (C) no Predecessor
Entity is engaged in or intends to engage in any manufacturing or any other
similar operations at any Property and no Predecessor Management Company is
engaged in any such activity at any Managed Property that (1) require the use,
handling, transportation, storage, treatment or disposal of any Hazardous
Substance (other than paints, stains, cleaning solvents, pool chemicals,
insecticides, herbicides, or other substances that are used in the ordinary
course of operating the Property or Managed Property, and in compliance with all
applicable Environmental Laws) or (2) require permits or are otherwise regulated
pursuant to any Environmental Law (other than paints, stains, cleaning solvents,
insecticides, pool chemicals, herbicides, or other substances that are used in
the ordinary course of operating the Property or Managed Property in compliance
with all applicable Environmental Laws); (D) no Predecessor Entity or
Predecessor Management Company has received any notice of a claim under or
pursuant to any Environmental Law applicable to a Property or a Managed Property
or under common law pertaining to Hazardous Substances on any Property or
Managed Property or pertaining to other property at which Hazardous Substances
generated at any Property or Managed Property have come to be located; (E) no
Predecessor Entity or Predecessor Management Company not, to the knowledge of
the Indemnities, any owners of an Acquired Property has received any notice from
any Governmental Authority (as defined below) claiming any violation of any
Environmental Law that is uncured or unremediated as of the date hereof; (F) no
Property or Managed Property
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(1) is included or proposed for inclusion on the National Priorities List issued
pursuant to CERCLA (as defined below) by the United States Environmental
Protection Agency (the "EPA") or on the Comprehensive Environmental Response,
Compensation, and Liability Information System database maintained by the EPA,
and has not otherwise been identified by the EPA as a potential CERCLA removal,
remedial or response site or (2) is included or proposed for inclusion on, any
similar list of potentially contaminated sites pursuant to any other applicable
Environmental Law nor has any Predecessor Entity received any written notice
from the EPA or any other Governmental Authority proposing the inclusion of any
Community on such list; and (G) except as disclosed in the Registration
Statement, there are no underground storage tanks located on or in the property
at any Property or Managed Property.
As used herein, "Hazardous Substance" shall include any
hazardous substance, hazardous waste, toxic or dangerous substance, pollutant or
solid waste, including, oil, petroleum or any petroleum-derived substance or
waste, asbestos or asbestos-containing materials, PCBs, pesticides, explosives,
radioactive materials, dioxins, urea formaldehyde insulation, including any such
Substance listed or regulated under any Environmental Law; "Environment" shall
include any surface water, drinking water, ground water, land surface,
subsurface strata, river sediment, buildings, structures, and ambient, workplace
and indoor air located at, on, or under the Properties or the Managed
Properties; "Environmental Law" shall include the Comprehensive Environmental
Response, Compensation and Liability Act, as amended (42 U.S.C. Section 9601 et
seq.) ("CERCLA"), the Resource Conservation and Recovery Act, as amended (42
U.S.C. Section 6901, et seq.), the Clean Air Act, as amended (42 U.S.C. Section
7401, et seq.), the Clean Water Act, as amended (33 U.S.C. Section 1251, et
seq.), the Toxic Substances Control Act, as amended (15 U.S.C. Section 2601, et
seq.), and the Occupational Safety and Health Act, as amended (29 U.S.C. Section
651, et seq.), together with all rules, regulations and orders promulgated
thereunder and all other analogous state and local laws, together with all
rules, regulations and orders promulgated thereunder; "Governmental Authority"
shall mean any federal, state or local governmental office, agency or authority
having the duty or authority to promulgate, implement or enforce any
Environmental Law; "Lien" shall mean, with respect to any Property or Managed
Property, any mortgage, deed of trust, pledge, security interest, lien,
encumbrance, penalty, fine, charge, assessment, judgment or other liability in,
on or affecting such Property or Managed Property; and "Release" shall mean any
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping, emanating or disposing of any Hazardous Substance
into the Environment, including, without limitation, the abandonment or discard
of barrels, containers, tanks (including, without limitation, underground
storage tanks) or other receptacles containing or previously containing any
Hazardous Substance or any release, emission, discharge or similar term, as
those terms are defined or used in any Environmental Law.
1.19 Condition of Property; No Alterations. To the knowledge
of the Indemnitors, except for conditions specifically described in the
structural reports
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prepared for the Properties, there is no material defect in the condition of any
Property, the improvements thereon, the structural elements thereof, or the
mechanical systems therein, nor any material damage from casualty or other
cause, nor any soil condition of any such Property that will not support all of
the improvements thereon without the need for unusual or new subsurface
excavations, fill, footings, caissons or other installations, except for any
such defect, damage or condition that has been corrected or will be corrected in
the ordinary course of the business of such Property as part of its scheduled
annual maintenance and improvement program. There have been no alterations to
the exteriors of any of the buildings or other improvements on any Development
Parcel, Office Property or, to the knowledge of any Indemnitor, any Acquired
Property, that would render any of the surveys for such Properties furnished to
the Company or the Operating Partnership inaccurate in any material respect.
2. Additional Representations and Warranties with Respect to the
Indemnitors. Each Indemnitor each hereby further represents and warrants to the
Company and the Operating Partnership as follows:
2.1 Authority Relative to this Agreement. All action of such
Indemnitor necessary to authorize the execution, delivery and performance of
this Agreement by such Indemnitor has been taken, and no other proceedings on
the part of such Indemnitor are necessary to authorize the execution and
delivery by such Indemnitor of this Agreement and the consummation by such
Indemnitor of the transactions hereunder. Neither the execution and delivery of
this Agreement by such Indemnitor, nor the consummation by such Indemnitor of
the transactions contemplated hereunder, nor compliance by such Indemnitor with
any of the provisions of this Agreement will (i) conflict with or result in any
breach of any provisions of the partnership agreement, the articles of
incorporation or bylaws or other organizational documents, as applicable, of any
such Indemnitor, (ii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, lease, license,
contract, agreement or other instrument or obligation to which such Indemnitor
is a party or by which such Indemnitor may be bound, or (iii) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to such
Indemnitor, except in the case of (ii) or (iii) for violations, breaches or
defaults which would not in the aggregate have a material adverse effect on the
business or financial condition of such Indemnitor.
2.2 Binding Obligation. This Agreement has been duly and
validly executed and delivered by such Indemnitor and constitutes a valid and
binding agreement of such Indemnitor, enforceable against such Indemnitor in
accordance with its terms, except that such enforcement may be subject to
bankruptcy, conservatorship, receivership, insolvency, moratorium or similar
laws affecting creditors' rights generally and to general principles of equity.
2.3 Authority Relative to the Management Transfer Agreements.
All
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action of the Predecessor Management Companies necessary to authorize the
execution, delivery and performance of the Management Transfer Agreements by the
Predecessor Management Companies has been taken, and no other proceedings on the
part of the Predecessor Management Companies are necessary to authorize the
execution and delivery by the Predecessor Management Companies of the Management
Transfer Agreements and the consummation by the Predecessor Management Companies
of the Formation Transactions to which they are a party.
Neither the execution and delivery of the Management Transfer
Agreements by the Predecessor Management Companies nor the consummation by
either Predecessor Management Company of the Formation Transactions to which it
is a party nor compliance by the Predecessor Management Companies with any of
the provisions of the Management Transfer Agreements will (i) conflict with or
result in a breach of any provisions of the articles of incorporation or bylaws
of the Predecessor Management Companies, (ii) result in a violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or obligation
to which any Predecessor Management Company is a party or by which any
Predecessor Management Company may be bound (including, without limitation, any
Management Contract), or (iii) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to any Predecessor Management Company,
except in the case of (ii) or (iii) for violations, breaches or defaults of any
of the foregoing (other than the Management Contracts) which would not in the
aggregate have a material adverse effect on the business or financial condition
of the Predecessor Management Companies.
2.4 Binding Obligation. Each of the Management Transfer
Agreements has been duly and validly executed and delivered by the applicable
Predecessor Management Company and constitutes a valid and binding agreement of
such Predecessor Management Company, enforceable against such Predecessor
Management Company in accordance with its terms, except that such enforcement
may be subject to bankruptcy, conservatorship, receivership, insolvency,
moratorium or similar laws affecting creditors' rights generally and to general
principles of equity.
2.5 Title to Assets. The Predecessor Management Companies have
good and valid title to all the assets being conveyed to the Management Company
under the Management Transfer Agreements. The Management Business is not subject
to any imperfections in title, easements, liens, mortgages, encumbrances,
pledges, claims, charges, options, defects, preferential purchase rights or
Liabilities, except such of the foregoing as are, singly or in the aggregate,
not material in character, amount, or extent and do not materially detract from
the value, or interfere with the business operations of, the Management
Business.
2.6 Financial Condition. Since June 30, 1997, there has been
no
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12
material adverse change in the condition (financial or otherwise) earnings,
business, affairs or business prospects of the Predecessor Management Companies
or the Management Business.
2.7 Management Contracts. Exhibit G attached hereto sets forth
(a) all of the contracts or other understandings, written or oral, to which the
Predecessor Management Companies are a party or by which the Predecessor
Management Companies are bound, including all amendments thereto, that relate to
the management of the Properties and other projects indicated thereon, including
the Excluded Properties, as defined in the Registration Statement, (the
"Management Contracts") and (b) all other such contracts or understandings that
relate to the Management Business, except for contracts or understandings that
are not material to the business and operations of the Management Business. Each
of the Management Contracts and such other contracts is valid and binding on the
parties thereto and is in full force and effect. To the knowledge of the
Indemnitors, no party to any Management Contract or any such other contract has
breached or defaulted under the terms of such Management Contract, except for
such breaches or defaults that would not, singly or in the aggregate, have a
material adverse effect on the business or operations of the Predecessor
Management Companies or the Management Business. A true and correct copy of each
of the Management Contracts and such other contracts, and all amendments
thereto, has been delivered to or made available to the Company or the Operating
Partnership. The Predecessor Management Companies have not assigned or granted
to any person or entity any rights in the Management Contracts or such other
contracts other than pursuant to the Management Transfer Agreements, and, upon
consummation of the Management Transfer Agreements, such contracts shall be
conveyed to the Management Companies free and clear of any Liabilities.
2.8 Permits. To the knowledge of the Indemnitors, the
Predecessor Management Companies have, and the Management Company immediately
following the consummation of the Formation Transactions will have, such
franchises, certificates, licenses, permits and other authorizations from
government political subdivisions or regulatory authorities (collectively
"Permits") as are necessary for the ownership, use, operation and licensing of
the Management Business, except for such Permits for which the failure to
possess would not have a material adverse effect on the condition (financial or
otherwise) earnings, business, affairs or business prospects of the Predecessor
Management Companies or the Management Business, and, to the knowledge of each
Indemnitor, no Predecessor Management Company is in violation of any Permit in
any material respect.
2.9 Compliance with Laws. No Predecessor Management Company
has received any written or other notice of any violation by such Predecessor
Management Company or any property subject to a Management Contract of any
applicable zoning code, law, regulation or ordinance, or of any employment,
environmental, or other regulatory law, order, regulation, or requirement
relating to any Predecessor Management Company, any such property, or the
Management Business
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13
which remains uncured, and, to the knowledge of the Indemnitors, there are no
such violations which, individually or in the aggregate, would have a material
adverse effect on the business or financial condition of the Predecessor
Management Companies, any such property or the Management Business.
2.10 Insurance. The Predecessor Management Companies currently
have in place the public liability, casualty and other insurance coverage with
respect to the Management Business and each property subject to a Management
Contract as is customary for the conduct of similar businesses and the operation
of similar projects in each market in which the Management Business is conducted
or such property is located, as applicable. To the knowledge of each Indemnitor,
each of the insurance policies with respect to the Management Business and such
properties is in full force and effect and all premiums due and payable
thereunder have been fully paid when due. To the knowledge of each Indemnitor,
the Predecessor Management Companies have not received from any insurance
company notice of any material defects or deficiencies affecting the
insurability of any such property or the Management Business or any notices of
cancellation or intent to cancel any such insurance.
2.11 Option Rights. Exhibit H attached hereto sets forth a
true, complete and correct list of the options or contracts to acquire two of
the four properties referred to as the "Development Parcels" in the Registration
Statement (the "Purchase Contracts"). Each of the purchaser parties to the
Purchase Contracts (the "Purchasers") is duly organized and validly existing and
in good standing in the jurisdiction where it is organized and is qualified to
do business and in good standing in all jurisdictions in which the conduct of
its business or the ownership of its properties makes such qualification
necessary, except where the failure to be so qualified and in good standing
would not, singly or in the aggregate, have a material adverse effect on the
Transactions. All action of each Purchaser necessary to authorize the execution,
delivery and performance by such Purchaser of the Purchase Contracts to which it
is a party, and the assignment thereof to the Operating Partnership has been
taken. Neither the execution and delivery by any Purchaser of the Purchase
Contracts to which it is a party, nor the assignment thereof to the Operating
Partnership, nor compliance by such Purchaser with any of the provisions
thereof, will (i) conflict with or result in any breach of any provisions of the
organizational documents of any such Purchaser, (ii) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under any of the terms, conditions or provisions of any of the organizational
documents of such Purchaser or of any note, bond, mortgage, indenture, lease,
license, easement, restriction, contract, agreement or other instrument or
obligation to which such Purchaser is a party or by which any such Purchaser or
any of its assets may be bound, or (iii) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to any such Purchaser, except in
the case of (ii) or (iii) for violations, breaches or defaults which would not,
singly or in the aggregate, have a material adverse effect on the business or
financial condition of any such Purchaser or on the Formation Transactions. All
consents or waivers necessary for the assignment
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14
of the Purchase Contracts to the Operating Partnership, as applicable, have been
obtained and are in full force and effect. Each Purchase Contract, and each
instrument assigning a Purchase Contract to the Operating Partnership has been
duly and validly executed and delivered by each Purchaser that is a party
thereto and constitutes a valid and binding agreement of such Purchaser,
enforceable against such Purchaser in accordance with its terms, except that
such enforcement may be subject to bankruptcy, conservatorship, receivership,
insolvency, moratorium or similar laws affecting creditor's rights generally or
the rights of creditors of partnerships and to general principles of equity. To
the knowledge of the Indemnitors, each Purchase Contract is binding on and
enforceable against the seller party thereunder. The Purchase Contracts will be
assigned to the Operating Partnership free and clear of any Liabilities. No fact
or condition has come to the attention of any Purchaser or Indemnitor, in
connection with the feasibility analysis, if any, under the applicable Purchase
Contract or otherwise, that is reasonably likely to render the project
contemplated by such Purchase Contract unviable or make it likely that the
Purchaser, in the exercise of its reasonable judgment, would exercise its
termination rights under such Purchase Contract if such Purchase Contract were
not assigned to the Operating Partnership.
3. Indemnity; Limitations on Liability. Subject to the terms hereof,
the Indemnitors hereby agree to indemnify and hold harmless the Company and the
Operating Partnership (each, a "Covered Party") from any damage, expense, loss,
cost, claim or liability (each a "Claim") suffered or incurred by any Covered
Party (i) as a result of any inaccuracy in any representation or warranty
contained herein or (ii) arising out of or related to any claims made by direct
or indirect partners of (or other investors in) Asset Partnerships or Xxxxxxx
Investor Entities in connection with the Formation Transactions. Notwithstanding
anything to the contrary contained herein, (a) the maximum aggregate liability
of the Indemnitors collectively hereunder shall not exceed $__________ [VALUE OF
ALL UNITS AND SHARES TO BE RECEIVED BY INDEMNITORS, BASED ON IPO PRICE OF
SHARES], (b) the liability of the Indemnitors hereunder shall not be joint but
rather shall be several, with each Indemnitor being liable for a pro rata
portion of each Claim based on the proportion which the amount set forth
opposite such Indemnitor's name below bears to $__________ [VALUE OF ALL UNITS
AND SHARES TO BE RECEIVED BY INDEMNITORS, BASED ON IPO PRICE OF SHARES], (c) in
the event of any Claim for which a third party other than an Indemnitor shall
have liability under the applicable Transfer Agreement, the Operating
Partnership and the Company shall, as and to the extent provided in Section 4
below, first make reasonable efforts to exhaust their remedies under such
indemnities against such third party prior to proceeding against the Indemnitors
hereunder; and (d) recourse against any individual Indemnitor for the payment of
any amount due hereunder shall be limited to the amounts set forth opposite such
Indemnitor's name below:
Xxxxxxxx X. Xxxxxxx $
-------
Xxxxxx X. Xxx $
-------
Xxxxxx X. Xxxxxx $
-------
Xxxx X. Xxxxxx $
-------
-00-
00
Xxxxxx Xxxxxxxxx $
-------
Xxxxxxxx X. Xxxxx $
-------
Xxxx Xxxxxx $
-------
Total = $
=======
provided, however, that the Indemnitors shall have no liability resulting from
any Claims under clause (i) of the first sentence of this Section 3, unless and
until the amount of such Claims shall exceed in the aggregate $200,000. The
liability of the Indemnitors hereunder is expressly limited to the actual
out-of-pocket damages, expenses, losses, costs or liabilities suffered or
incurred by the Company or the Operating Partnership (including, without
limitation, reasonable attorneys' fees and expenses and other costs incurred in
defending against any adverse claims) as a result of any matter referred to in
clauses (i) or (ii) of the first sentence of this Section 3 (each, a "Covered
Matter"), and with respect to which a claim is made in accordance with Section 5
hereof, and no Indemnitor shall be liable to any Covered Party under this
Agreement for any indirect, special, consequential, loss of profits, or similar
speculative damages asserted or claimed by a Covered Party.
4. Survival; Agreements Regarding Certain Claims. It is the express
intention and agreement of the parties hereto that the representations and
warranties set forth in this Agreement shall survive the consummation of the
Transactions for a period equal to one (1) year from the date hereof and shall
expire and be terminated and extinguished forever at such time, except with
respect to claims asserted against any Indemnitor in good faith pursuant hereto
by written notice from any or all of the Covered Parties to such Indemnitor at
any time within the one (1) year period following the date hereof. Each Covered
Party agrees that, if such Covered Party could reasonably make any claim with
respect to a matter covered by this Agreement under any existing policy of
insurance or against any Transferor under any Transfer Documents, such Covered
Party shall, prior to taking any action arising hereunder against any
Indemnitor, make a claim under such policy or against such Transferor and
thereafter shall use reasonable efforts to prosecute such claim to completion:
provided, however, that if such Covered Party believes in good faith that by the
failure to take action against such Indemnitor for such Claim such Covered Party
could lose its rights to bring an action hereunder, such Covered Party may take
actions against such Indemnitor as are reasonably necessary to preserve such
rights, and provided, further, that from and after (a) the time that notice is
given to an Indemnitor that a Claim exists but that coverage therefore is being
sought from an insurer or Transferor and that no action or (in accordance with
the preceding proviso) limited action is being taken against such Indemnitor,
through and including (b) 30 days after the date of abandonment (by
non-prosecution or otherwise) of such Claim against such carrier or Transferor
or, if earlier, the applicable limitations period for such claim, such one-year
period (if applicable), with respect to that Indemnitor and that Claim only and
no other Claim (other than other Claims satisfying the conditions of this
proviso), shall be stayed, as necessary, to preserve such Covered Party's rights
against such Indemnitor under this Agreement.
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16
5. Miscellaneous.
5.1 Notices. All notices, demands, requests or other
communications which may be or are required to be given or made either by the
Indemnitors, on the one hand, or the Company or the Operating Partnership, on
the other hand, pursuant to this Agreement shall be in writing and shall be
hand-delivered or transmitted by certified mail, express overnight mail or
delivery service, telegram, telex or facsimile transmission to the parties to
the following addresses:
If to an Indemnitor, to: the address set forth under such
Indemnitor's name on the signature
pages hereto.
If to the Company,
or the Operating
Partnership, to: 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Xxxxxxx
Telecopy:
or to such other address in the United States of America as the addressee may
indicate by written notice to the other party in conformance with this Section
6.1.
Each notice, demand, request or communication which shall be
given or made in the manner described above shall be deemed sufficiently given
or made for all purposes at such time as it is delivered to the addressee (with
the delivery receipt, the affidavit of messenger or (with respect to a telex)
the answer back being deemed conclusive but not exclusive evidence of such
delivery) or at such time as delivery is refused by the addressee upon
presentation.
5.2 Benefit and Assignment. No party hereto shall assign this
Agreement, in whole or in part, whether by operation of law or otherwise,
without the prior written consent of the Indemnitors to be bound by such
assignment (if the assignor is the Operating Partnership or the Company) or of
the Operating Partnership and the Company (if the assignor is any Indemnitor),
which consent in either case shall not be unreasonably withheld; and any
purported assignment contrary to the terms hereof shall be null, void and of no
force and effect. This Agreement shall be binding upon and shall inure to the
benefit to the parties hereto and their respective successors and assigns as
permitted hereunder. No person or entity other than the parties hereto is or
shall be entitled to bring any action to enforce any provision of this Agreement
against any of the parties hereto, and the covenants and agreements set forth in
this Agreement shall be solely for the benefit of, and shall be enforceable only
by, the parties hereto or their respective successors and assigns as permitted
hereunder.
5.3 Entire Agreement; Amendment. This Agreement contains the
final
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17
and entire agreement between the parties hereto with respect to the subject
matter hereof and is intended to be an integration of all prior negotiations and
understandings, provided that this Agreement in no way affects the liability of
any Indemnitor under any Transfer Agreement to which it is a party. The parties
to this Agreement shall not be bound by any terms, conditions, statements,
warranties or representations, oral or written, not contained or referred to
herein or therein. No change or modification of this Agreement shall be valid
unless the same is in writing and signed by the parties hereto.
5.4 No Waiver. No delay or failure on the part of any party
hereto in exercising any right, power or privilege under this Agreement or under
any other instrument or document given in connection with or pursuant to this
Agreement shall impair any such right, power or privilege or be construed as a
waiver of any default or any acquiescence therein. No single or partial exercise
of any such right, power or privilege shall preclude the further exercise of
such right, power or privilege. No waiver shall be valid against any party
hereto unless made in writing and signed by the party against whom enforcement
of such waiver is sought and then only to the extent expressly specified
therein.
5.5 Governing Law. This Agreement, the rights and obligations
of the parties hereto and any claims or disputes relating thereto shall be
governed by and construed under the laws of the State of New York (but not
including the choice of law rules thereof).
5.6 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
5.7 Incorporation by Reference. Any item or notice listed on
any schedule or exhibit to this Agreement or to any of the Transfer Agreements
or Management Transfer Agreements shall be deemed a disclosure for purposes of
this Agreement.
5.8 Definitions. The words "herein," "hereunder" and similar
words when used herein shall refer to the entirety of this Agreement and shall
not be limited to the paragraphs and sections where used.
5.9 Definition of Knowledge. As used herein, "to the
knowledge" of the Indemnitors means the actual knowledge of the Indemnitors
after due inquiry of all appropriate individuals having responsibility for the
subject matter of the relevant representation and, with respect to Messrs.
Feldman, Cox, Kasman, Feimer, Friederg, Xxxxx and Xxxxxx, review of the due
diligence material prepared and obtained in connection with the purchase by the
Operating Partnership of the equity interests in the Asset Partnerships and
Xxxxxxx Investor Entities or the purchase of the Acquired Properties. The
parties hereto acknowledge that the Indemnitors in making the representations
and warranties set forth herein have, in certain cases, relied on certificates
provided to the Indemnitors by the managers of certain Properties.
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18
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered on its behalf as of the date first
above written.
TOWER REALTY TRUST, INC.
By:
Name:
Title:
TOWER REALTY OPERATING PARTNERSHIP
By: Tower Realty Trust, Inc.,
General Partner
By:
Name:
Title:
XXXXXXXX X. XXXXXXX
By:
Name:
Title:
Address:
XXXXXX X. XXX
By:
Name:
Title:
Address:
XXXXXX X. XXXXXX
By:
Name:
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19
Title:
Address:
XXXX X. XXXXXX
By:
Name:
Title:
Address:
XXXXXX XXXXXXXXX
By:
Name:
Title:
Address:
XXXXXXXX X. XXXXX
By:
Name:
Title:
Address:
XXXX XXXXXX
By:
Name:
Title:
Address:
[LIST ENTITIES CONTROLLED BY THE FOREGOING THAT WILL OWN UNITS OR SHARES]
By:
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Name:
Title:
Address:
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