EXHIBIT 10.9
SUPPLEMENTAL REPRESENTATIONS AND
WARRANTIES AGREEMENT
THIS SUPPLEMENTAL REPRESENTATIONS AND WARRANTIES AGREEMENT (this
"AGREEMENT") is made and entered into as of _______, 1997 by and among Xxxxxxx
X. Xxxxx, Hippomenes Associates, LLC, 64-36 Realty Associates, 673 First
Associates L.P., Green 6th Avenue Associates, L.P., X.X. Xxxxx Realty, Inc.,
X.X. Xxxxx Properties, Inc. and EBG Midtown South Corp. (each an "INDEMNITOR",
collectively, the "INDEMNITORS"), XX Xxxxx Operating Partnership, L.P., a
Delaware limited partnership (the "OPERATING PARTNERSHIP") and XX Xxxxx Realty
Corp., a Maryland corporation (the "COMPANY").
WHEREAS, in connection with an initial public offering of shares of
common stock of the Company (the "OFFERING"), the closing of which is occurring
on the date hereof, (a) direct or indirect interests in certain properties owned
by the Indemnitors or entities of which the Indemnitors or affiliates of the
Indemnitors are general partners or managing members (the "GENERAL PARTNERS")
are being contributed to the Operating Partnership pursuant to the omnibus
contribution agreement (the "OMNIBUS CONTRIBUTION AGREEMENT"), the Contract of
Sale regarding 000 Xxxx Xxxxxx Xxxxx and the Contract of Sale regarding 00 Xxxx
00xx Xxxxxx (together with the Omnibus Contribution Agreement, the "Contribution
Agreements"), (b) non-voting stock representing 95% of the economic interest in
each of the construction, management and leasing businesses (collectively, the
"SERVICE BUSINESSES"), respectively, of Emerald City Construction Corp., a New
York corporation, X.X. Xxxxx Management Corp., a New York corporation and X.X.
Xxxxx Realty, Inc., a New York corporation (collectively, the "SERVICE
COMPANIES") are being contributed to the Operating Partnership pursuant to the
Omnibus Contribution Agreement, and (c) the Indemnitors will receive certain
units of partnership interest ("UNITS") in the Operating Partnership (all of the
foregoing being collectively referred to herein as the "TRANSACTIONS"); and
WHEREAS, in order to induce the Company to consummate the Offering and
to cause the foregoing transfers to occur, the Indemnitors have each agreed to
make the representations and warranties contained in this Agreement for the
benefit of the Company and the Operating Partnership on the condition that the
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liability of the Indemnitors hereunder be limited as provided in Section 4
hereof.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE PROPERTIES, THE
ENTITIES AND OTHER ASSETS. Each Indemnitor hereby represents and warrants to
the Company and the Operating Partnership, with respect to (i) each of the
properties listed on EXHIBIT "A" (including all personal property related
thereto or to the operation thereof owned by the partnerships and limited
liability companies that currently own such properties) (individually, a
"PROPERTY" and collectively, the "PROPERTIES"), (ii) each of the partnerships
and limited liability companies that currently own the Properties (the
"ENTITIES") which are listed on EXHIBIT "B-1", and (iii) all management,
construction and leasing assets set forth on EXHIBIT B-2 (the "OTHER ASSETS"),
as follows:
1.1. ORGANIZATION, POWER AND AUTHORITY, AND QUALIFICATION. Each
Entity is duly formed and organized, validly existing and in good standing under
the laws of the jurisdiction of its organization. Each Entity has the requisite
power and authority to carry on its business as it is now being conducted. The
general partner or managing member of each Entity has made available to the
Operating Partnership complete and correct copies of such Entity's
organizational documents, with all amendments as in effect on the date of this
Agreement (the "ENTITY AGREEMENTS"). Each Entity is duly qualified to do
business and is in good standing in each jurisdiction where the character of its
property owned or leased or the nature of its activities make such qualification
necessary, except where the failure to be so qualified and in good standing
would not have a material adverse effect on the business or financial condition
of such Entity.
Except as set forth on SCHEDULE 1.1, none of the execution and
delivery of the Contribution Agreements by the Contributors (as defined
therein), the consummation by the Contributors of the contribution of the
Interests (as that term is defined in the Contribution Agreements) or compliance
by the
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Contributors with any of the provisions of the Contribution Agreements will (i)
conflict with or result in any breach of any provisions of any of the Entity
Agreements; (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 Entity is a
party or by which any Entity may be bound; or (iii) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to any Partnership or
its property; except in the case of clauses (ii) or (iii) above, for violations,
breaches or defaults that would not in the aggregate have a material adverse
effect on the business or financial condition of any Entity and that will not
impair the effectiveness of the contributions pursuant to the Omnibus
Contribution Agreement and, except in the case of clauses (i), (ii) and (iii)
above, for which waivers or consents have been obtained on or prior to the date
hereof.
1.2. COMPLIANCE WITH ENTITY AGREEMENTS AND CONTRACTS. None of the
Entities are (i) in violation of its Entity Agreements or (ii) to the knowledge
of the Contributor, in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease, partnership agreement, joint
venture or other instrument or agreement to which the Entity is a party or by
which the Entity or its assets are or may be bound, except for a default which
would not have a material adverse effect on the business or financial condition
of the Entity.
1.3. TITLE. Each Entity owns marketable, legal and beneficial title
to each of the Properties owned by it subject only to (a) the leases described
on the rent roll attached hereto as SCHEDULE 1.4(A) (the "LEASES") and (b) the
matters set forth on SCHEDULE 1.3 (the "PERMITTED EXCEPTIONS").
1.4. LEASES. The rent roll attached hereto as SCHEDULE 1.4(A) for
each Property is a true, correct and complete schedule of all Leases, licenses,
possessing agreements, and occupancy agreements relating to the Properties and
(except with respect to the Properties known as 0000 Xxxxxxxx, 0000 Xxxxxx of
the Americas and 00 Xxxx 00xx Xxxxxx) was true and correct as of the
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date thereof, and (except with respect to the Properties known as 0000 Xxxxxxxx,
0000 Xxxxxx of the Americas and 00 Xxxx 00xx Xxxxxx) there have been no material
changes to such rent roll since the date thereof, except as set forth on
SCHEDULE 1.4(B) attached hereto. With respect to each Property, the Leases
(including all amendments, modifications and supplements thereto), are the only
leases, licenses, tenancies, possession agreements and occupancy agreements
affecting that Property on the date hereof in which that Entity holds the
lessor's, licensor's or grantor's interest thereunder and there are no other
leases, licenses, tenancies, possession agreements or occupancy agreements
affecting the Property (other than subleases, licenses, tenancies or other
possession or occupancy agreements which may have been entered into by the
tenants, or their predecessors in interest, under such Leases); a true and
complete copy of all such Leases have been delivered to the Operating
Partnership; such Leases, are in full force and effect and have not been
amended, modified or extended, except as set forth in SCHEDULE 1.4, and, except
as indicated otherwise on SCHEDULE 1.4, the Entities, as landlord under such
Leases, has not received any notice that it is in default of any of its
obligations under such Leases beyond any applicable grace period which has not
been cured; fixed rent and additional rent are being billed to the tenants in
accordance with the schedule set forth on SCHEDULE 1.4; no tenant is entitled to
"free" rent, rent concessions, rebates, rent abatements, set-offs, or offsets
against rent except as set forth in the Lease with such tenant and no tenant
claims a right to any of the foregoing, except as set forth on SCHEDULE 1.4;
except as set forth on SCHEDULE 1.4, the Entities has received no written notice
that any tenant contests its pro rata shares of tax increases as required by its
Lease or that any tenant contests its pro rata shares of tax increases as
required by its Lease or that any tenant contests any rent, escalation or other
charges billed to it; except as set forth in SCHEDULE 1.4, no tenant under any
Lease is more than thirty (30) days in arrears in the payment of rent; except as
set forth on SCHEDULE 1.4, no tenant under any Lease has any purchase option or
right of termination; no assignment of the Entities' rights under any Lease is
in effect on the date hereof other than collateral assignments to secure
mortgage indebtedness; and, except as set forth on SCHEDULE 1.4, with respect to
any Leases entered into by the Entities, no brokerage commissions will be due
upon the failure of any tenant to exercise any cancellation
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right granted in its Lease or upon any extension or renewal of such Leases.
1.5. TAX BILLS. The copies of the most recent real property tax bills
(the "TAX BILLS") for each Property for the current tax year which have been
furnished to the Operating Partnership are true and correct copies of all of the
tax bills for such tax year actually received by the Entities or the Entities'
agents for the Property. All real estate taxes and assessments presently due
and owing with respect to the Properties have been paid in full.
1.6. EMPLOYEES AND CONTRACTS. There are no (a) employees of any
Entity (and there have never been any employees of any Entity), nor (b) service,
maintenance or other contracts (except for contracts relating to the mortgage
financing assumed by the Operating Partnership in connection with the
Transactions and the Leases or which are Permitted Exceptions) affecting any
Property which are not cancelable upon thirty (30) days notice or less or which
are for a contract amount greater than $20,000 per annum, except as shown on
SCHEDULE 1.6; all persons who regularly perform services at any Property are
employees of the Service Companies, or other independent contractors; true and
correct copies of all contracts, including the service, supply, utility or
maintenance agreements relating to any Property which are presently in effect
(each a "CONTRACT" and collectively, the "CONTRACTS") have been delivered to the
Operating Partnership and the same are in full force and effect and have not
been modified or amended. No Entity and, to the best of the Indemnitor's
knowledge, no other party to any Contract has breached or defaulted under the
terms of any Contract which has not been cured, except for such breaches or
defaults that would not, singularly or in the aggregate have a material adverse
effect on the condition (financial or otherwise), earnings, assets, business
affairs or business prospects of any Indemnitor Entity, the Properties or on the
Transactions.
1.7. GOVERNMENTAL PROCEEDINGS. There is no governmental suit, action
or proceeding (zoning or otherwise) or governmental investigation which is, in
each case, pending or threatened in writing against the Indemnitors or relating
to any Property or the transactions contemplated by this Agreement other than
tax certiorari proceedings which have been commenced by an Entity.
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1.8. NO AGREEMENTS. Except as set forth in the partnership or
operating agreements of the Entities or as set forth on SCHEDULE 1.8, other than
the Leases, no Property is subject to any outstanding agreement of sale or
lease, option to purchase or other right of any third party to acquire any
interest therein.
1.9. LITIGATION. Except as set forth in Section 1.7 or on SCHEDULE
1.9 and except for actions covered (less any deductibles thereunder) by the
policies of insurance described in Section 1.18, there is no litigation actions,
suits or legal proceedings pending or threatened in writing within the lasts six
(6) months prior to the date hereof against any Entity or with respect to any
Property or any Entity's interest therein (including, but not limited to,
landlord-tenant proceedings). Neither any Entity nor any Property is subject to
any order, judgment, injunction or decree of any court, tribunal or other
governmental, regulatory or other authority or body, that individually or
collectively would have a material adverse effect on the business or financial
condition of the Entity or the business, financial or other condition of the
Property. Except as disclosed in the Registration Statement or in SCHEDULE 1.9,
there is no pending or, to the knowledge of the Indemnitors, threatened
litigation, moratorium, condemnation proceedings, zoning change, or other
similar proceeding or action that is likely to 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 Property, except such proceedings or actions
that would not, singularly or in the aggregate, have a material adverse effect
on the condition (financial or otherwise), earnings, assets, business, affairs
or business prospects of or with respect to such Property or of any Entity or,
following the consummation of the Transactions, the Company or the Operating
Partnership.
1.10. VIOLATIONS. To the knowledge of the Contributors, the only
violations of law or municipal ordinances, orders or requirements noted in or
issued by the department of buildings, fire, labor, health or other Federal,
State, County, City, Town or other departments and governmental agencies having
jurisdiction against or affecting any Property (each a "VIOLATION", collectively
the "VIOLATIONS") against or affecting any Property on the date hereof are set
forth on SCHEDULE 1.10.
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Except as set forth in SCHEDULE 1.10, no Indemnitor, Entity or proper
representatives thereof has received any written or other notice of any
Violation, or of any employment, environmental, or other regulatory law, order,
regulation, or requirement relating to a 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 Indemnitor, Entity or Property or
on the Transactions.
1.11. HAZARDOUS SUBSTANCES. Seller has not received any written
notice (which remains outstanding) from any governmental authority stating that
any Hazardous Substances (hereinafter defined) have been stored, disposed of,
released or transported at or from the Property, or any portion thereof, in
violation of, or in a manner requiring remediation under, any Environmental Laws
(hereinafter defined). To the best of Seller's knowledge and except as
otherwise disclosed in any environmental report listed on Schedule 1.11 with
respect to the Property ("ENVIRONMENTAL REPORT"), no Hazardous Substances have
been stored, disposed of, released or transported at or from the Property, or
any portion thereof, in violation of, or requiring remediation under, any
Environmental Laws (the foregoing representation does not apply to the customary
and ordinary application, storage and use of chemicals for landscape
maintenance, janitorial services, pest control and the day to day maintenance or
operation of office buildings and by tenant sin the day to day conduct of their
business). Without limiting the generality of the foregoing, to the best of
Seller's knowledge and except as otherwise disclosed in any Environmental
Report, there have been no and are no (A) aboveground or underground storage
tanks; (B) polychlorinated biphenyls ("PCBS")or PCB-containing equipment; (C)
asbestos containing materials; (D) lead based paints; or (E) dry-cleaning
facilities in, on, under or at the Property. As used therein; (i) the term
"Environmental Law" shall mean all applicable existing federal, state and local
statutes, ordinances, orders, rules and regulations issued, promulgated or
adopted by any governmental authority having jurisdiction over the Property
relating to environmental pollution or protection, including, without
limitation, the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
Section 6901 ET SEQ., the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Section 9601 ET SEQ., as amended by the
Superfund Amendments and Reauthorization Act of 1986, the
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Hazardous Materials Transportion Act, 49 U.S.C. Section 1801 ET SEQ., the
Federal Water Pollution Control Act, 33 U.S.C. Section 1251 ET SEQ., the Clean
Air Act, 42 U.S.C. Section 7401 ET SEQ., the Toxic Substances Control Act, 15
U.S.C. Sections 2601-2629, the Safe Drinking Water Act, 42 U.S.C. Section 300f
ET SEQ., together with all existing rules, regulations and orders promulgated
thereunder, and all similar applicable existing local, state and federal
statutes and regulations promulgated pursuant thereto; (ii) the term "Hazardous
Substances" shall mean (x) any chemical, material or substance defined as or
included in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "extremely hazardous waste", "restricted hazardous
waste", or "toxic substances" or words of similar import under any Environmental
Laws, (y) any oil, petroleum or petroleum derived substances, any flammable
substances or explosives, any radioactive materials, any asbestos or any
substance containing more than 0.1 percent asbestos, any oil or dielectric fluid
containing levels of polychlorinated biphenyls in excess of fifty parts per
million, and any urea formaldehyde insulation, and (z) any other chemical,
material or substance, exposure to which is prohibited, limited or regulated by
any Environmental Laws.
1.12. CAPITAL IMPROVEMENTS; CONDITION OF PROPERTY. To the
knowledge of each of the Indemnitors, 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
uninsured 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 (i) 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 improvements program
and (ii) as described in the reports listed on SCHEDULE 1.12 hereof.
1.13. DEBT. As of the date hereof, each Property is subject to
mortgage debt (the "MORTGAGE DEBT") in the approximate outstanding principal
balance set forth on SCHEDULE 1.13. No default has occurred and is continuing
under any of the documents evidencing or securing any Mortgage Debt of which any
Entity has received written notice that has not been cured and there are no
uncured events of default thereunder. No Entity has received any notice of such
a default which has not been cured.
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To the best of each Indemnitor's knowledge, no event has occurred which, with
the giving of notice and/or the passage of time, or both, would constitute an
event of default under the Existing Mortgages or Existing Notes.
1.14. FINANCIAL STATEMENTS. The consolidated financial statements
included in the Registration Statement or Form S-11 of the Company with respect
to certain of the Entities (the "FINANCIAL STATEMENTS") have been prepared from
the books and records of such Entities in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
specified. The balance sheets in the Financial Statements fairly present the
financial condition of such Entities as of the dates shown, and the income
statements in the Financial Statements fairly present the results of operations
for the periods indicated. There are no known material liabilities of any of
such Entities that are not described on such Financial Statements.
1.15. FINANCIAL CONDITION. Since the date of the Financial
Statements and except as set forth on SCHEDULE 1.15, there has been no material
adverse change in the business or financial condition of any Entity or any
Property. No Indemnitor or Entity (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, or (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 any such Indemnitor or
Entity.
1.16. PERMITS. To the knowledge of the Contributors, each Entity
has all permits, certificates, licenses and other authorizations from
governmental or political subdivisions or regulatory authorities thereof
(collectively, "PERMITS") as are necessary for the ownership, use and operation
of each Property, except for such Permits for which the failure to possess would
not have a material adverse effect on the business or financial condition of the
Entities and except for such Permits as are required to be obtained by tenants
pursuant to the terms of the Leases. To the knowledge of the Indemnitors, each
Entity is not in violation of any permit in any material
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respect, all Permits are in full force and effect and will not be revoked,
invalidated or violated by the consummation of the Transactions.
1.7. TAXES. (a) all taxes or information returns required to be filed
on or before the date hereof by or on behalf of the partnerships have been filed
through the date hereof in accordance with all applicable laws; (b) there is no
action, suit or proceeding pending against, or with respect to, any Entity or
any Property for any tax, nor has any claim for additional tax been asserted by
any authority; and (c) except as set forth on SCHEDULE 1.17, all taxes
(including any related penalties, interest and additional amounts) imposed upon
any Entity and required to be reflected upon a return required to be filed
(without regard to any applicable extensions) on or before the date hereof have
been paid or will be paid on or before the date hereof.
1.8. INSURANCE. Each Entity currently has in place public liability,
casualty and other insurance coverage with respect to its Property in customary
amounts for projects similar to the Properties in the markets in which such
Properties are located, and in all cases in compliance with the documents
evidencing or securing the Mortgage Debt. Each of such policies 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 Entity has received from any
insurance company notice of any material defects or deficiencies which affect
the insurability of any Property or any notices of cancellation or intent to
cancel any such insurance.
2. REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE SERVICE BUSINESSES.
The Indemnitors hereby represent and warrant to the Company and the Operating
Partnership with respect to the Service Businesses, as follows:
2.1. TITLE TO TRANSFERRED ASSETS. The applicable Indemnitor has good
and valid title to the Service Businesses. To the knowledge of the Indemnitors,
the Service Businesses are not subject to any imperfections in title, liens,
encumbrances, pledges, claims, chargers, options, defects, preferential purchase
rights, or other encumbrances (collectively referred to herein as "LIENS")
except for liens which are not material in character, amount, or extent and do
not materially detract from
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the value or interfere with the operation of the Service Businesses ("PERMITTED
LIENS").
2.2 MANAGEMENT AGREEMENTS, ETC. Annexed hereto as SCHEDULE 2.2 are
the only agreements pursuant to which the Service Companies provide management
and/or leasing services with respect to any property (the "MANAGEMENT
AGREEMENTS"). Each of the Management Agreements is valid and binding on the
applicable Service Company and is in full force and effect in all material
respects. Except as set forth in SCHEDULE 2.2, neither the Service Companies
nor, to the knowledge of the applicable Service Company, any other party thereto
has breached or defaulted under the terms of any of the Management Agreements,
except for such breaches or defaults that would not have a material adverse
effect on the Transactions or the Service Businesses. A true and correct copy
of each of the Management Agreements has been delivered to or made available to
the Operating Partnership.
2.3. PERMITS. To the knowledge of the applicable Service Company,
each Service Company has all Permits as are necessary for the ownership, use and
operation of its Service Business, except for such Permits for which the failure
to possess would not have a material adverse effect on such Service Business.
To the knowledge of the applicable Service Company, such Service Company is not
in violation of any Permit in any material respect, all Permits are in full
force and effect and will not be revoked, invalidated or violated by the
consummation of the Transactions.
2.4. LITIGATION. Except as set forth in SCHEDULE 2.4 hereto, there
are no claims, actions, suits, proceedings or investigations pending or,
threatened in writing within the last six (6) months prior to the date hereof
against such Service Company, or any properties or rights of such Service
Company, before any court or administrative, governmental or regulatory
authority or body, domestic or foreign, that would have a material adverse
effect on the Service Businesses. Neither the Service Companies nor the Service
Businesses are 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
Service Businesses.
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2.5. COMPLIANCE WITH LAWS. The Service Companies have not received any
written or other actual notice from any governmental authority having
jurisdiction over the Service Companies of any violation of any applicable
regulation or ordinance, or of andy employment or other regulatory law, order,
regulation or requirement relating to the Service Businesses that remains
uncured, and, to the knowledge of the applicable Service Company, there are no
such violations that, individually or in the aggregate, would have a material
adverse effect on the Service Businesses.
2.6. INSURANCE. The Service Companies have insurance coverage with
respect to the Service Businesses as is customary and appropriate to the nature
of the business. Each of such policies is in full force and effect, and all
premiums due and payable thereunder have been fully paid when due.
3. ADDITIONAL REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE
INDEMNITORS. The Indemnitors hereby represent and warrant to the Company and
the Operating Partnership, as follows:
3.1. AUTHORITY RELATIVE TO THIS AGREEMENT. All action of each of the
Indemnitors necessary to authorize the execution, delivery and performance of
this Agreement and the Contribution Agreements by each Indemnitor has been
taken, and no other proceedings on the part of each Indemnitor is necessary to
authorize the execution and delivery by the Indemnitors of this Agreement and
the Contribution Agreements and the consummation by each of the Indemnitors of
the transactions hereunder and thereunder.
Neither the execution and delivery of this Agreement by each of
the Indemnitors nor compliance by the Indemnitors with any of the provisions of
this Agreement will (i) conflict with or result in any breach of any provisions
of the partnership agreements, the articles of incorporation or bylaws or other
organizational documents, as applicable, to which each such Indemnitor is bound
or is a party, (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 each Entity
or Indemnitor (which are not individuals) or of any note, bond, mortgage,
indenture, lease,
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license, contract, agreement or other instrument or obligation to which any of
the forgoing is a party or by which any of the foregoing or any of their assets
and properties may be bound, or (iii) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to an Indemnitor, except, in the
case of (ii) and (iii) above, for violations, breaches or defaults that would
not singularly or in the aggregate have a material adverse effect on the
business or financial condition of the Indemnitors or the obligations of the
Indemnitors hereunder and, except for which waivers or consents have been
obtained on or prior to the date hereof.
3.2. CONSENTS OBTAINS; BINDING OBLIGATIONS. All consents or waivers
necessary for the execution of this Agreement and the Contribution Agreements by
each Indemnitor has been obtained and are in full force and effect. This
Agreement has been duly and validly executed and delivered by each of the
Indemnitors and constitutes a valid and binding agreement of each of the
Indemnitors, enforceable against each of the Indemnitors in accordance with its
terms, except as such enforcement may be subject to bankruptcy, conservatorship,
receivership, insolvency, moratorium or similar laws affecting creditors' rights
generally and to general principles of equity.
3.3. REGISTRATION STATEMENT. The indemnitors have reviewed the
Registration Statement and represent and warrant that it does not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading.
3.4. UTILITIES; PROPERTIES AS INDEPENDENT UNITS. To the best of
Contributor's knowledge, all water, sewer, gas, electric, telephone, drainage
and other utility equipment, facilities and services required by applicable laws
and regulations or necessary for the current operation of the Property, are
installed and connected pursuant to valid permits, are adequate to serve the
Property for its intended use, and are in working operating condition.
4. INDEMNITY; LIMITATIONS ON LIABILITY. Subject to the terms hereof, the
Indemnitors hereby agree to indemnify and hold harmless the Company and the
Operating Partnership from any damage, expense, loss, cost, claim or liability
(each a "CLAIM")
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suffered or incurred by the Company or the Operating Partnership as a result of
any inaccuracy in any representation or warranty contained in Sections 1, 2 and
3 herein. Notwithstanding anything to the contrary contained herein, (a) the
liability of the Indemnitors shall hereunder be joint and several and (b) the
maximum liability of the Indemnitors collectively shall not exceed
$20,000,000.00 and shall be satisfied exclusively from, and recourse of the
Company and the Operating Partnership shall be limited exclusively to, the
rights of the Indemnitors to the Units pledged by the Indemnitors pursuant to a
Pledge Agreement (the "PLEDGE AGREEMENT") in the form of EXHIBIT C attached
hereto. The Indemnitors shall not have any personal liability to the Company or
the Operating Partnership under the terms of this Agreement and the Indemnitors
shall not have any liability resulting from any Claims or other assertion of
liability under this Agreement unless and until such damages shall exceed in the
aggregate $250,000. The liability of the Indemnitors hereunder is expressly
limited to the actual out-of-pocket expenses, damages, losses, costs or
liabilities suffered or incurred by the Company or the Operating Partnership
(after application of any insurance proceeds (including, without limitation,
reasonable attorney's fees and expenses and other costs incurred in defending
any claims) as a result of a breach by an Indemnitor of any of the
representations and warranties set forth in Sections 1, 2 or 3 hereof and with
respect to which a claim is made in accordance with Section 5 hereof, and the
Indemnitors shall not be liable to the Company or the Operating Partnership
under this Agreement for any indirect, special, consequential, loss of profits,
loss of value or other similar speculative damages asserted or claimed by the
Company or the Operating Partnership.
5. SURVIVAL. It is the express intention and agreement of the parties
hereto that the representations and warranties of the Indemnitors set forth in
this Agreement. Shall survive the consummation of the Transactions for the
period ending 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 the Indemnitors in good faith pursuant hereto by written notice
from the Company, the Operating Partnership or the Services Company to the
indemnitor at any time within the one (1) year period following the date hereof.
Any written notice given within such one (1) year period must set forth the
nature and details of the claim with specificity in order to constitute a valid
notice pursuant to the preceding sentence.
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6. PLEDGE OF UNITS BY INDEMNITORS. As security for the full and timely
performance of their obligations hereunder, the Indemnitors shall execute and
deliver the Pledge Agreement and make the deliveries and perform the obligations
required thereunder.
7. MISCELLANEOUS.
7.1. NOTICES. All notices, demands, requests or other communications
which may be or are required to be given or made by the Indemnitors or by the
Company or the Operating Partnership 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 at the following addresses:
If to an Indemnitor: c/o XX Xxxxx Realty Corp.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
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With a copy to: Greenberg, Traurig, Hoffman,
Lipoff, Xxxxx & Quentel
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Ivanhoe, Esq.
If to the Operating XX Xxxxx Operating
Partnership or the Partnership, L.P.
Company, to: 00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
With a copy to: Xxxxx & Xxxx LLP
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxx, Esq.
or such other address as the addressee may indicate by written notice to the
other parties.
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 deliver ed to the addressee (with the
delivery receipt, the affidavit of a 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.
7.2. 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 (if the assignor is the
Operating Partnership, the Company or the Service Companies) or the Operating
Partnership, the Company and the Service Companies (if the assignor is the
Indemnitors), which consent 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 of
the parties hereto and their respective successors and assigns as permitted
hereunder. No person or entity other
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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.
7.3. ENTIRE AGREEMENT; AMENDMENT. This Agreement, the Pledge
Agreement and the Schedules hereto contain s the final 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. The
parties of this Agreement shall not be bound by any terms, conditions,
statements, warranties or representations, oral or written, relating to the
subject matter hereof 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.
7.4. 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.
7.5. 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).
7.6. 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.
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IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement, or caused this Agreement to be duly executed and delivered on its
behalf as of the date first above written.
___________________________
XXXXXXX X. XXXXX
HIPPOMENES ASSOCIATES, LLC
By: ________________________
64-36 REALTY ASSOCIATES
By: ________________________
673 FIRST ASSOCIATES L.P.
By: ________________________
GREEN 0XX XXXXXX ASSOCIATES, L.P.
By: ________________________
X.X. XXXXX REALTY, INC.
By: ________________________
X.X. XXXXX PROPERTIES, INC.
By: ___________________________
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EBG MIDTOWN SOUTH CORP.
By: ___________________________
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XX XXXXX OPERATING PARTNERSHIP, L.P.
By: ___________________________
XX XXXXX REALTY CORP.
By: ___________________________
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REPRESENTATION AND WARRANTIES - EXHIBITS
Exhibit A-1 List of properties
B-1 List of entities owning properties
Schedule 1.1 Conflicts with Entity Agreements, Mortgages and other
Agreements or violates any orders
Schedule 1.3 Permitted Exceptions
Schedule 1.4 Leases - arrears, reps., etc.
Schedule 1.6 Contracts not terminated on 30 days or less
Schedule 1.8 Agreements re Sale, option or lease any interest in Property
(other than the Leases)
Schedule 1.9 Litigation
Schedule 1.10 Violations
Schedule 1.11 Environmental Reports
Schedule 1.12 Property Conditions Reports
Schedule 1.3 Mortgage Schedules (with unpaid balances)
Schedule 1.5 Changes in Entity or Property since date of Financial
Statements
Schedule 1.17 Unpaid tax (non RE) obligations
Schedule 2.2 Management and Leasing Agreements
Issues - Rent Rolls vs Leases
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