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EXHIBIT 10.64
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (the "Agreement") is made and entered
into this 25th day of July, 1997 by and among RSH ASSOCIATES, a New York general
partnership ("RSH"), XXXX XXXXXX ("Xxxxxx") and XXXXXXXX X.
XXXXXXX ("X. Xxxxxxx").
R E C I T A L S
WHEREAS, RSH is the owner and holder of a certain limited partnership
interest in Tower 45 Associates Limited Partnership, a New York limited
partnership ("Tower 45 LP") (together with all claims and interests of RSH,
Wiener and/or any Wiener Entity (as defined below) against or in X. Xxxxxxx or
any of the Xxxxxxx Entities (as defined below), the "LP Interest") and is the
owner and holder of security interests and liens (collectively, the "XX Xxxx",
provided, however, the XX Xxxx shall not include, in any event, any lien of RSH
(not otherwise hypothecated by RSH) on proceeds of any sale of interests or
settlement in the Bankruptcy Case (as defined below)) on and against interests
in Tower 45 and certain other limited partnership interests, as set forth on
Exhibit A hereto (the LP Interest and the XX Xxxx, the "RSH Interests");
WHEREAS, X. Xxxxxxx desires to purchase the LP Interest and cause a
release of the XX Xxxx (but not the claim which the XX Xxxx secures); and
WHEREAS, RSH has threatened to assert and/or has asserted various
claims or causes of action; and
WHEREAS, X. Xxxxxxx and the persons, firms and entities listed on
Exhibit B hereto (the "Xxxxxxx Released Parties") have consistently denied, and
continue to deny, that any of the "Claims" (as defined below) have any merit
whatsoever; and
WHEREAS, X. Xxxxxxx and some of the Xxxxxxx Entities and affiliates
have been working on a proposed transaction pursuant to which Tower Realty
Trust, Inc. (the "Tower REIT"), a real estate investment trust, which is one of
the Xxxxxxx Entities, intends to conclude an initial public offering of its
shares.
NOW, THEREFORE, in consideration of the mutual promises set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
A G R E E M E N T
1. Consideration by X. Xxxxxxx. X. Xxxxxxx agrees that X. Xxxxxxx
shall, if this Agreement has not yet been terminated, pay or, with respect to
the payment set forth in Section 1(b) below, shall, upon satisfaction of the
provisions of Section 2 hereof, cause the Tower REIT to pay to RSH the following
consideration on the following dates:
(a) the sum of $350,000 (at RSH's election, by federal funds
wire transfer to an account designated by RSH in writing or by delivery of New
York Clearinghouse bank check payable to the order of RSH) not later that the
earliest to occur of (i) five (5) days after the date (the "First Payment Date")
of entry by the United States Bankruptcy Court for the Eastern District of New
York (the "Bankruptcy Court") of an order in Case No. 000-00000-000 (the
"Bankruptcy Case"), which shall have become a "Final Order" (as defined in the
"Stipulation" (as defined below)), approving the terms of the Stipulation, a
copy of which is attached hereto as Exhibit C (or a stipulation or arrangement
substantially similar thereto or in lieu thereof) (in either case, the
"Stipulation"), (ii) five (5) days after the payment of any funds to the Trustee
in the
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Bankruptcy Case (the "Trustee") on or after July 1, 1997 pursuant to paragraph 1
of the Stipulation, and (iii) the "Second Payment Date" (as defined below); and
(b) the sum of $3,650,000 (at RSH's election, by federal funds
wire transfer to an account designated by RSH in writing or by delivery of New
York Clearinghouse bank check payable to the order of RSH) and, for no
additional consideration, one share of stock in the Tower REIT (provided such
stock is of the same type and quality as the shares sold in the Tower REIT
Transaction, other than that it is unregistered and may not be sold or disposed
of for two (2) years), on the date (the "Second Payment Date") which is the
earliest to occur of (i) whether currently contemplated by X. Xxxxxxx or any
entity (now or heretofore) controlled by X. Xxxxxxx (such entities, collectively
with X. Xxxxxxx, the "Xxxxxxx Entities") or not, the closing of the public
offering for the "Tower REIT Transaction" (as defined below) or the formation of
any real estate investment trust ("REIT") or entity, whether or not designed to
be a REIT, in which any of the following occurs (each, a "Trigger Deal"): other
than with respect to an entity formed, structured or restructured in connection
with any pre-public offering formation transactions with respect to the Tower
REIT, X. Xxxxxxx becomes an officer, director, employee of or consultant for
such REIT or other entity, or X. Xxxxxxx receives stock, operating partnership
units and/or interests in such REIT or other entity (and/or rights with respect
to any of the foregoing); (ii) any of the following occurs regarding Tower 45
LP: any material amount of its assets is assigned, conveyed or transferred
(other than in connection with any pre-public offering formation transactions
with respect to the Tower REIT), any material amount of its debt is paid (other
than amounts currently due and payable, as and when due and payable) or any
agreements with respect to such debt are modified (except for agreements to be
entered into in accordance with testimony of X. Xxxxxxx in Bankruptcy Court on
May 12-13, 1997) and/or rights therein acquired by X. Xxxxxxx or any Xxxxxxx
Entity; and/or (iii) the closing of any transactions (other than those in
connection with any pre-public offering formation transactions with respect to
the Tower REIT) involving properties which have aggregate square footage which
constitutes at least fifty percent (50%) of the aggregate square footage of the
properties (the "REIT Properties") listed on page ____ of the May 9, 1996 draft
registration statement on Form S-11 for Tower Realty Trust, Inc. (the "May 9
S-11"). For purposes hereof, the "Tower REIT Transaction" is the transaction
described in the May 9 S-11, and any variant thereof, whether public or private,
involving a REIT whose capital (debt and/or equity) is raised for one or more of
the Xxxxxxx Entities. Notwithstanding the foregoing, in no event shall a Tower
REIT Transaction include (x) a debt financing provided by Xxxxxx Xxxxxxx Asset
Management, Inc. ("MSAM") or any advisory clients of MSAM, the proceeds of which
are used to fund the organizational and other necessary costs associated with
the formation and offering of the Tower REIT, (y) the exercise of, or the
closing of any transaction relating to, an existing buy/sell agreement between
existing partners in the property partnerships that own the Tower REIT
properties or (z) the transactions that have occurred prior to April 2, 1997.
Together with the payment specified above, X. Xxxxxxx and the Xxxxxxx Released
Parties shall, for no additional consideration and upon delivery of the
documents to be received from RSH pursuant to Section 2, execute and deliver the
release annexed hereto as Exhibit D.
2. Transfer of the RSH Interests. In further consideration for and upon
the Second Payment Date, as defined herein, if this Agreement has not then been
terminated, RSH shall, for no additional consideration and upon payment to RSH
of all sums provided in Section 1 hereof and delivery of the release and other
items contemplated hereby, execute and deliver the documents annexed hereto as
Exhibits E, F and G.
3. Commitments by RSH and Wiener. In consideration of X. Xxxxxxx'x
promise herein and the execution and delivery of the guaranty of payments under
this Agreement (the "Guaranty") by the Guarantor (as defined in the Guaranty),
RSH and Wiener hereby undertake, prior to the termination of this Agreement but
only as long as the Xxxxxxx Entities materially
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comply with all the terms hereof and no Xxxxxxx Entity commences any action
against RSH, Wiener and/or any entity controlled by RSH or Wiener (collectively,
the "RSH/Wiener Entities"), the following commitments: from and after the date
hereof, no RSH/Wiener Entity shall:
(a) xxx, or cause any other person or entity to xxx, X.
Xxxxxxx or any entity known by RSH or Wiener to be a Xxxxxxx Entity with respect
to the LP Interest or the XX Xxxx or any other matter (but the foregoing shall
in no way limit the rights, claims, judgments and/or obligations secured by the
XX Xxxx (or actions by RSH or Wiener with respect thereto) in connection with
the Bankruptcy Case for any matter occurring prior to the date hereof relating
to the RSH Interests other than against the such Xxxxxxx Entities), or threaten
in writing any of the Xxxxxxx Entities with respect to the foregoing, provided
that, with respect to and/or in the Bankruptcy Case, RSH may prosecute claims,
assert any of its rights, defend any adversary proceeding and seek proceeds with
respect to the claims, judgments and/or obligations secured by the XX Xxxx; and
(b) acquire or cause to be acquired any ownership interest in
any REIT and/or any claim against or interest in any Xxxxxxx Entity (other than
claims already owned that relate to the Bankruptcy Case and as otherwise
provided in Section 11 hereof) and use such interest or claim in any action to
challenge or prevent the closing of the Tower REIT; and
(c) take any action to challenge or prevent the closing of the
REIT; and
(d) challenge or invalidate or attempt to invalidate this
Agreement or any of the terms and provisions hereof; and
(e) file an objection to the Stipulation or directly cause any
other party in interest to object to the Stipulation.
(f) on the Second Payment Date, enter into a Lockup Agreement
substantially in the form (including the handwritten change and provided that
RSH, Wiener and/or any RSH/Wiener Entity shall not be subject to any additional
obligation, cost or liability) attached hereto as Exhibit X.
X. Xxxxxxx expressly acknowledges and agrees that the foregoing commitments
shall not survive the closing of a Trigger Deal (unless $4 million in the
aggregate has been paid to RSH and the release has been delivered pursuant to
Section 1 hereof) and that, in the event of any violation of any of the
provisions of Section 3 hereof, the only remedy is to bring an action for
damages, and further agrees that any such violation shall not give him any right
to forestall or fail to make payments (or perform) pursuant to Section 1 hereof
when otherwise due or required.
4. Covenants of the Xxxxxxx Entities. In consideration of RSH's
promises, commitments and agreements hereunder, X. Xxxxxxx, on behalf of himself
and all Xxxxxxx Entities, covenants and agrees, prior to the termination of this
Agreement but only as long as the RSH/Wiener Entities materially comply with all
the terms hereof and no RSH/Wiener Entity commences any action against any
Xxxxxxx Entity, that they:
(a) shall provide to RSH (as set forth in Section 12), upon
filing with the Securities and Exchange Commission, each draft of the S-11
relating to the Tower REIT; and
(b) shall not challenge or invalidate or attempt to invalidate
this Agreement or to any of the terms and provisions hereof; and
(c) agree that from the date hereof and until 30 days
following the Termination Date (as defined below), each statute of limitations
otherwise applicable to the RSH Interests or
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to any claims or causes of action relating to Tower 45 LP against Tower 45 LP
and/or one or more of its current and former general partners and/or persons or
entities controlling or controlled by one or more of such general partners (any
"Claim") shall be tolled to the extent that such statute of limitations might
apply to any such Claim; and
(d) agrees not to assert any failure by RSH, Wiener or any
RSH/Wiener Entity to proceed with any Claim as a defense with respect to any
Claim; and
(e) shall give notice (in addition to any notice required by
law) to RSH within three (3) business days after the termination or modification
of the Stipulation (with a copy of any such termination or modification); and
(f) shall, on (and dated on) the date when any payment is made
to RSH hereunder, deliver a solvency certificate (the "Solvency Certificate")
from X. Xxxxxxx and the chief financial officer of the Tower REIT, respectively,
which provides that each of X. Xxxxxxx and Tower REIT is solvent immediately
prior to, upon and immediately after such payment.
5. Representations And Warranties of RSH and Wiener. As a material
inducement to the Xxxxxxx Entities in causing them to enter into this Agreement,
RSH and Wiener, to the best of Wiener's knowledge, hereby make the following
representations and warranties:
(a) RSH is the sole owner of the RSH Interests; and
(b) the RSH Interests and RSH's Claims are owned by RSH free
and clear of any and all liens, claims, encumbrances, hypothecations and
pledges; and
(c) the execution and delivery of this Agreement by RSH and
the binding of the RSH/Wiener Entities contemplated hereby has been duly
authorized by all necessary entity action, and it is not necessary for any
person other than the RSH signatory to this Agreement to execute this Agreement,
consent to it or approve it; and
(d) RSH is not in default under any agreement or understanding
which in any way prevents the consummation of the transactions contemplated in
this Agreement; and
(e) Wiener is under no personal or other disability in
entering into this Agreement; and
(f) Wiener has the ability to direct the management and
affairs of RSH and to bind RSH without the consent of any other individual or
entity;and
(g) There is no current hypothecation of the RSH Interests;
and
(h) The aggregate net worth of all partners of RSH is at least
$5,000,000.
6. Representations and Warranties by the Xxxxxxx Entities. As a
material inducement to RSH and Wiener in causing it and him to enter into this
Agreement, X. Xxxxxxx hereby makes the following representations and warranties:
(a) X. Xxxxxxx is under no personal or other disability in
entering into this agreement; and
(b) no Xxxxxxx Entity is in default under any agreement or
understanding which in any way prevents or would likely prevent, prior to the
Second Payment Date, the consummation of the transactions contemplated in this
Agreement; and
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(c) the execution and delivery of this Agreement and the
binding of the Xxxxxxx Entities contemplated hereby has been authorized by all
necessary entity action and it is not necessary for any other person other than
X. Xxxxxxx to execute this Agreement, consent to it or approve it; and
(d) each of X. Xxxxxxx and the Tower REIT is solvent on the
date hereof and shall be solvent continuously through that day which is one
business day after the date when the last payment required to be made to RSH
hereunder is made.
7. Preservation of RSH's Economic Interest In Distributions From The
Bankruptcy Case. Notwithstanding anything herein or otherwise to the contrary,
even if the Agreement is terminated, nothing herein shall release, waive,
diminish or otherwise interfere with, and neither X. Xxxxxxx nor any of the
Xxxxxxx Entities shall object to the allowance of, RSH's claim in the Bankruptcy
Case and X. Xxxxxxx and the Xxxxxxx Entities shall cooperate with RSH, at no
cost, expense or obligation to the Xxxxxxx Entities, to have its claim allowed
in full and to have its claim allowed as a secured claim to the extent of the
value of the security granted to RSH which includes, inter alia, that portion of
the proceeds realized from the May 13, 1997 sale by the Trustee to the sale of
Xxxxxx Xxxxxxx'x Class A Limited Partnership interests in Tower 45 LP, Xxxxxx
Xxxxxxx'x direct or indirect interests in Tower 45 Ventures Limited Partnership
and Xxxxxx Xxxxxxx'x direct or indirect interests in Xxxx XX Associates Limited
Partnership.
8. Further Assurances. Each of X. Xxxxxxx, RSH and Wiener hereby agrees
to execute and deliver (at no cost, expense or obligation to the deliverer) such
other and further documents or instruments as are necessary to effectuate the
transactions contemplated by this Agreement; provided that for any request made
of RSH or Wiener by X. Xxxxxxx pursuant to this Section 8, X. Xxxxxxx shall be
solely responsible for the payment of reasonable attorneys' fees and for all
other costs and expenses of RSH and Wiener, and neither RSH nor Wiener shall be
obligated to advance any amounts whatsoever to cover such fees, costs or
expenses.
9. Termination.
(a) Subject to the provisions of Section 9(c) hereof, RSH
shall have the right to terminate this Agreement by giving written notice to X.
Xxxxxxx on or after any of the following (the date specified in such notice, the
"Termination Date"):
(i) at any time on or after October 31, 1997, if (1)
$350,000 has not been received by RSH from X. Xxxxxxx or Tower REIT pursuant to
Section 1(a) hereof or this Section 9(a)(i), at X. Xxxxxxx'x election, or (2) a
Solvency Certificate therefor is not delivered therewith within two (2) business
days of a request therefor; or
(ii) at any time on or after December 15, 1997, upon
the election of RSH or Wiener, if (1) $4 million in the aggregate has not been
received by RSH from X. Xxxxxxx or Tower REIT pursuant to Section 1 hereof or
this Section 9(a)(ii), at X. Xxxxxxx'x election, or (2) a Solvency Certificate
therefor is not delivered therewith within two (2) business days of a request
therefor; or
(iii) if X. Xxxxxxx fails to deliver to RSH any
documentation required to be delivered pursuant to Section 4 hereof within three
(3) business days of delivery of a request therefor in accordance with the
notice provisions hereof requesting such documentation; or
(iv) if any payment to be made hereunder is not made
in full when required to be made; or
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(v) the Stipulation (as attached hereto) is
terminated or materially and adversely in any respect to RSH or Wiener modified
(or a Final Order with respect thereto does not exist by December 15, 1997).
(b) Subject to the provisions of Section 9(c) hereof, the
Xxxxxxx Entities shall have the right to terminate this Agreement by giving
written notice to RSH and Wiener at any time after January 15, 1998, if both of
the following are true: (i) a Trigger Deal has not occurred and (ii) all
payments, if any, required to be made to RSH hereunder have been made when
required. In the event of a termination in accordance with the prior sentence,
no further payment shall be due RSH hereunder.
(c) In the event of the termination of this Agreement, if less
than all of the payments described in Section 1 hereof shall have been made
hereunder, RSH and Wiener reserve all of their rights and remedies, and RSH
shall be entitled to retain any payments made pursuant hereto.
10. Limitation of Liability. In addition to any other limitation set
forth herein:
(a) On the Second Payment Date, (i) provided that all
deliveries by RSH and Wiener required by this Agreement have been made as and
when required, the Xxxxxxx Released Parties, without any further action, shall
be irrevocably deemed to have released RSH, Wiener and each RSH/Wiener Entity
from all disputes, claims, causes of action, and liabilities under this
Agreement or otherwise and (ii) provided that all payments and deliveries by X.
Xxxxxxx and/or Tower REIT required by this Agreement have been made as and when
required, all RSH/Wiener Entities, without any further action, shall be
irrevocably deemed to have released X. Xxxxxxx and each Xxxxxxx Released Party
from all disputed, claims, causes of action, and liabilities under this
Agreement or otherwise.
(b) All Xxxxxxx Entities acknowledge and agree that, provided
that the representation made in Section 5(f) hereof is not shown to be false,
the past and present partners of RSH (other than Wiener, as provided herein)
shall be subject to no personal liability in connection with this Agreement or
any claims, actions or disputes relating to this Agreement or Tower 45 LP, and
release all past and present partners of RSH (other than Wiener, as provided
above) from any liability which may be asserted hereunder.
11. Reservation of Rights. All rights and/or remedies (including,
without limitation, the foreclosure or obtaining of an interest in any Xxxxxxx
Entity) of RSH, Wiener and the RSH/Wiener Entities against any person or entity
that is not a Xxxxxxx Entity or a Xxxxxxx Released Party are hereby reserved in
full.
12. Miscellaneous.
(a) The terms and provisions of this Agreement shall be
binding in all respects upon the signatories hereto, and each of their
respective successors and assigns (and, upon the death of any natural person,
his heirs), and shall inure to the benefit of the Xxxxxxx Entities, RSH and
Wiener, and each of their permitted successors and assigns. Neither RSH nor
Wiener may assign its or his rights or obligations under this Agreement without
X. Xxxxxxx'x prior written consent, except that Wiener may assign his rights but
not his obligations under this Agreement to any of his immediate family members
(that is, his spouse or any of his parents, children or siblings) without such
consent. X. Xxxxxxx may not assign any of his rights or obligations under this
Agreement without RSH's prior written consent, except that X. Xxxxxxx may,
without such consent, assign his rights and/or obligations to a nominee or
designee, but only immediately prior to and in conjunction with the actual
occurrence of a Trigger Deal in which all payments required
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to be made under this Agreement are made as and when required and not later than
such assignment.
(b) Any notice to be given to any of the parties hereto shall
be delivered in writing at the addresses listed below, either (i) hand delivered
or (ii) sent by Federal Express or another nationally recognized courier
service, and effective upon receipt:
If to RSH and/or Wiener:
RSH Associates
c/o Wiener Realtors
0000 Xxxxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
With a copy delivered simultaneously to:
Xxxxxx X. Xxxx, Esq.
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
Xxxxxx X. Xxxxxx, Esq.
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to X. Xxxxxxx:
Xxxxxxxx X. Xxxxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
With a copy delivered simultaneously to:
Xxxxxxx X. XxXxxxxx, Xx., Esq.
Battle Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
Xxxxxx Xxxxxx Primoff, Esq.
Battle Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(c) This Agreement constitutes the entirety of the parties'
understandings with respect to the subject matter hereof and all prior
discussions, drafts and correspondence relating to the subject matter hereof are
hereby merged into and superseded by this Agreement.
(d) This Agreement may be amended, modified, or changed only
by an instrument executed by all of the parties hereto.
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(e) This Agreement may be executed in telecopied or original
counterparts, each of which shall for all purposes by deemed an original.
(f) Each of the parties hereto shall be responsible for paying
its own legal fees incurred in connection with the negotiation and execution of
this Agreement. If any litigation shall be commenced concerning or with respect
to this Agreement, the prevailing party in such litigation shall be entitled to
recover the professional fees, costs and expenses of its attorneys and other
professionals retained or engaged in connection with such litigation from the
losing party.
(g) This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
(h) Each of the parties hereto consents to jurisdiction in any
court in New York County.
(i) Each of the parties hereto irrevocably and unconditionally
waives any and all rights to trial by jury in any action, suit or counterclaim
arising under or relating to this Agreement.
(j) Time is of the essence with respect to this Agreement and
all actions to be taken hereunder by X. Xxxxxxx, any Xxxxxxx Entity, RSH,
Wiener, or any RSH/Wiener Entity.
(k) All Exhibit or Section references are to Exhibits to, or
Sections of, this Agreement, unless otherwise specified, and all Exhibits hereto
are incorporated herein by this reference as if set forth herein in their
entirety. All headings in this Agreement have been inserted solely for purposes
of convenience and are of no legal force of effect.
(l) All payments made pursuant to Section 1 shall be allocated
in the following ratios: XX Xxxx - 100,000; LP Interest - 3,000,000; releases
delivered hereunder by RSH and Wiener - 900,000; provided, however, that the
foregoing allocation shall not preclude X. Xxxxxxx, the Tower REIT and/or Tower
Realty Operating Partnership, L.P., from making a different allocation of
consideration outside the Bankruptcy Case.
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(m) Each payment specified in Sections 1(a) and 1(b) hereof
shall be non-refundable under all circumstances once paid (but the
non-refundable quality shall not preclude claims by the Xxxxxxx Entities to the
extent that, and only to the extent that, Wiener and/or RSH default hereunder
and an action is commenced against an RSH/Wiener Entity (and notice given to
Wiener and RSH hereunder) prior to the Second Payment Date).
IN WITNESS WHEREOF, the parties hereto hereby executed this Agreement
as of the date first above written.
/s/ Xxxxxxxx X. Xxxxxxx
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XXXXXXXX X. XXXXXXX
RSH ASSOCIATES, a New York general
partnership
By: /s/ Xxxx Xxxxxx
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General Partner
/s/ Xxxx Xxxxxx
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XXXX XXXXXX
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