1
Exhibit 10.53
OPTION AGREEMENT
This Option Agreement (this "AGREEMENT") dated as of the 8th day of
May, 1997 is entered into by and among TOWER REALTY OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership (the "OPERATING PARTNERSHIP"), and Xxxxxxx X.
Xxxxxx (the "GRANTOR").
R E C I T A L S:
A. The Grantor owns direct or indirect interests in Tower 45 Associates
Limited Partnership (the "PARTNERSHIP").
B. The Operating Partnership desires to acquire from the Grantor, and
the Grantor desires to grant to the Operating Partnership, an option to acquire,
on the terms and conditions set forth herein, all interests owned by the Grantor
and any other direct or indirect interests the Grantor may have in the
Partnership or in the property located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx. (Such property and all personal property related thereto or to the
operation thereof is hereinafter referred to as the Partnership's "PROPERTY,"
and all of such direct or indirect interests of the Grantor in the Partnership
or Property are referred to collectively as the Grantor's "PROPERTY INTERESTS").
C. The Operating Partnership desires to acquire the Property Interests
in connection with (i) the ongoing formation of Tower Realty Trust, Inc., a
Maryland corporation (the "COMPANY"), which intends to qualify as a real estate
investment trust and which is the sole general partner as well as a limited
partner of the Operating Partnership, and (ii) the proposed initial public
offering ("IPO") and concurrent private placement (collectively, the
"OFFERINGS") of shares of the Company's common stock, par value $0.01 per share
("COMMON STOCK").
NOW, THEREFORE, in consideration of $35,000 irrevocably and
indefeasibly paid on the date hereof by the Operating Partnership to the
Grantor, the mutual covenants and conditions set forth herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Operating Partnership and the Grantor agree as follows:
2
ARTICLE I: THE OPTION
1.1 Grant of Option. The Grantor hereby irrevocably grants to the
Operating Partnership the right and option (the "OPTION") to acquire all the
Grantor's right, title and interest in the Grantor's Property Interests on the
terms and conditions set forth herein.
1.2 Term and Exercise of Option. The Option may be exercised by the
Operating Partnership at any time from and after the date hereof through 5:00
p.m. on September 30, 1997 (the "OPTION TERMINATION DATE"). Subject to the
foregoing, if the Operating Partnership does not exercise the Option by the
Option Termination Date, the Option shall be deemed terminated and shall be of
no further force or effect and the Grantor of the Option shall have no further
obligations hereunder.
1.3 Acquisition Consideration. The consideration (the "ACQUISITION
CONSIDERATION") to be received by the Grantor shall be $25,000 in cash.
ARTICLE II: CLOSING PROCEDURES
2.1 Contribution of Property Interests. Upon the Operating
Partnership's exercise of the Option, the Grantor shall, in accordance with
Section 2.2 hereof, transfer, assign, and convey to the Operating Partnership
and the Operating Partnership shall accept from the Grantor, all right, title
and interest in the Grantor's Property Interests, free and clear of all
encumbrances, in exchange for the Grantor's Acquisition Consideration.
2.2 Closing; Conditions to Obligations. (a) (i) The Operating
Partnership shall exercise the Option by delivering to the Grantor
prior to the Option Termination Date a notice (the "OPTION NOTICE"),
which notice shall state the date (the "CLOSING DATE") of the closing
of the transactions contemplated by Section 2.1 (the "CLOSING"), which
date shall be no less than 3 business days and no more than 30 days
following the date of such Option Notice.
(ii) The Closing shall be held within the period specified in
the Option Notice at the offices of Battle Xxxxxx LLP, 75 East 55th
Street, New York, New York, or at the offices of the attorneys for the
lead underwriter of the IPO, or such other place as may be agreed upon
by the parties hereto.
(iii) Following delivery of an Option Notice, the Operating
Partnership and the Grantor will at or prior to the
-2-
3
Closing execute and deliver all closing documents (the "CLOSING
DOCUMENTS") required by the Operating Partnership pursuant to Section
2.3 and, pending the Closing, deposit such Closing Documents in escrow
with Commonwealth Land Title Insurance Company, as escrow agent of the
Operating Partnership (the "ESCROW AGENT").
(b) The following deliveries shall be made at the Closing:
(i) the Operating Partnership shall cause to be delivered
to the Escrow Agent or its designee, the Acquisition
Consideration;; and
(ii) upon receipt of the consideration set forth in clause (i)
above, the Escrow Agent will release the Closing Documents to the
Operating Partnership and deliver to the Grantor the Acquisition
Consideration.
2.3 Documents to Be Delivered at the Closing. At or prior to the
Closing, the Grantor shall execute, acknowledge where deemed necessary or
desirable by the Operating Partnership, and deliver to the Escrow Agent, in
addition to any other documents mentioned elsewhere herein, the following (the
"CLOSING DOCUMENTS"):
(a) An assignment of the Grantor's Property Interests (the
"ASSIGNMENT") in the form attached hereto as Exhibit A.
(b) An affidavit establishing an exemption from the withholding
requirements of the Foreign Investment in Real Property Tax Act ("FIRPTA"), as
amended.
(c) Any other documents, agreements or instruments as the Operating
Partnership shall reasonably request in order to assign, transfer and convey the
Grantor's Property Interests to the Operating Partnership and to otherwise
effect the transfer contemplated hereby.
2.4 Closing Costs. The Operating Partnership agrees to pay all of the
closing costs, other than the Grantor's legal fees (provided, however, that the
Operating Partnership agrees to pay the Grantor's reasonable legal fees and
expenses incurred with respect to documents, agreements or instruments
requrested pursuant to Section 2.3(c)), arising from the transfer of the
Property Interests to the Operating Partnership pursuant to the exercise by the
Operating Partnership of the Option. The Operating Partnership has paid to the
attorneys for the Grantor and Xxxxxxx X. Grey, a grantor under a similar option
agreement, $10,000 in respect of their legal fees incurred through the date
hereof.
-3-
4
ARTICLE III:
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE GRANTORS
As a material inducement to the Operating Partnership to enter into
this Agreement and to consummate the transactions contemplated hereby, the
Grantor hereby makes to the Operating Partnership, with respect only to the
Property Interest, each of the representations and warranties and covenants set
forth in this Article III, which representations and warranties (unless
otherwise noted) are true as of the date hereof. As a condition to the Operating
Partnership's obligation to consummate the transfer of the Grantor's Property
Interests to the Operating Partnership after the exercise of the Option, such
representations and warranties must be true, and such covenants must have been
complied with, as of the Closing Date.
3.1 Authority; No Conflicts. The Grantor has full right, authority,
power and capacity:
(i) to execute and deliver this Agreement, and each Closing
Document;
(ii) to perform the transactions contemplated by this
Agreement; and
(iii) to transfer, assign, convey and deliver all of such
Grantor's Property Interests to the Operating Partnership in accordance
with this Agreement.
3.2 No Other Agreements. Prior to the exercise of the Option, the
Grantor has made no agreement with, and will not enter into any agreement with,
and has no obligation (absolute or contingent) to, any other person or entity to
sell, transfer, dispose of or in any way encumber any of the Grantor's Property
Interests or restricting in any way the Grantor's ability to transfer the
Property Interests to the Operating Partnership or to enter into any agreement
with respect to the Grantor's Property Interests.
3.3 No Brokers. The Grantor has not entered into, and covenants that it
will not enter into, any agreement, arrangement or understanding with any person
or entity which will result in the obligation of the Operating Partnership to
pay any finder's fee, brokerage commission or similar payment in connection with
the transactions contemplated hereby.
-4-
5
ARTICLE IV:
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE OPERATING
PARTNERSHIP
As a material inducement to the Grantor to enter into this Agreement
and to consummate the transactions contemplated hereby, the Operating
Partnership hereby makes to the Grantor each of the representations and
warranties and covenants set forth in this Article IV. As a condition to the
Grantor's obligation to consummate the transfer of the Property Interests to the
Operating Partnership after the exercise of the Option, such representations and
warranties must be true, and such covenants must have been complied with, as of
the Closing Date.
4.1 Authority. (a) The Operating Partnership is a limited partnership
duly organized, validly existing and in good standing under the laws of the
state of Delaware.
(b) The Operating Partnership has full right, authority, power and
capacity:
(i) to execute and deliver this Agreement, each Closing
Document to which it is a party and each other agreement, document and
instrument to be executed and delivered by or on behalf of it pursuant
to this Agreement; and
(ii) to perform the transactions contemplated by this
Agreement.
4.2 No Brokers. The Operating Partnership has not entered into, and
covenants that it will not enter into, any agreement, arrangement or
understanding with any person or entity which will result in the obligation of
the Grantor to pay any finder's fee, brokerage commission or similar payment in
connection with the transactions contemplated hereby.
ARTICLE V: MISCELLANEOUS
5.1 Amendment. (a) Any amendment hereto shall be effective only against
those parties hereto who have acknowledged in writing their consent to such
amendment.
(b) No waiver of any provisions of this Agreement shall be valid unless
in writing and signed by the party against whom enforcement is sought.
5.2 Entire Agreement; Counterparts; Applicable Law. This Agreement
-5-
6
(a) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof,
(b) may be executed in several counterparts, each of which will be
deemed an original and all of which shall constitute one and the same instrument
and
(c) shall be governed in all respects, including validity,
interpretation and effect, by the laws of the State of New York without giving
effect to the conflicts of law provisions thereof.
5.3 Assignability. This Agreement shall be binding upon, and shall be
enforceable by and inure to the benefit of, the parties hereto and their
respective heirs, legal representatives, successors and assigns; provided,
however, that this Agreement may not be assigned (except by operation of law) by
the Operating Partnership without the prior written consent of the Grantor, or
by the Grantor without the prior written consent of the Operating Partnership,
and any attempted assignment without such consent shall be void and of no
effect; provided, further, however, that the Operating Partnership may assign
all or any portion of this Agreement and the Closing Documents and any agreement
contemplated hereunder or thereunder to the Company or to an affiliate of the
Operating Partnership or the Company without the consent of the Grantor.
5.4 Titles. The titles and captions of the Articles, Sections and
paragraphs of this Agreement are included for convenience of reference only and
shall have no effect on the construction or meaning of this Agreement.
5.5 Third Party Beneficiary. No provision of this Agreement is
intended, nor shall it be interpreted, to provide or create any third party
beneficiary right or any other right of any kind in any customer, affiliate,
stockholder, partner, director, officer or employee of any party hereto or any
other person or entity, provided, however, that Article V and Section 5.3 of
this Agreement shall be enforceable by and shall inure to the benefit of the
persons described therein.
5.6 Severability. (a) If any provision of this Agreement, or the
application thereof, is for any reason held to any extent to be invalid or
unenforceable, the remainder of this Agreement and application of such provision
to other persons or circumstances will be interpreted so as reasonably to effect
the intent of the parties hereto.
(b) The parties further agree to replace such void or unenforceable
provision of this Agreement with a valid and enforceable provision that will
achieve, to the extent possible,
-6-
7
the economic, business and other purposes of the void or unenforceable provision
and to execute any amendment, consent or agreement deemed necessary or desirable
by the Operating Partnership to effect such replacement.
5.7 Equitable Remedies. (a) The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached.
(b) It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any federal or state court
located in the State of New York (as to which the parties agree to submit to
jurisdiction for the purposes of such action), this being in addition to any
other remedy to which they are entitled under this Agreement or otherwise at law
or in equity.
5.8 Notices; Exercise of Option. Any notice or demand which must or may
be given under this Agreement (including the exercise by the Operating
Partnership of the Option) or by law shall, except as otherwise provided, be in
writing and shall be deemed to have been given (i) when physically received by
personal delivery (which shall include the confirmed receipt of a telecopied
facsimile transmission), (ii) three (3) business days after being deposited in
the United States certified or registered mail, return receipt requested,
postage prepaid, or (iii) one (1) business day after being deposited with a
nationally known commercial courier service utilizing its next day delivery
service (such as Federal Express); addressed and delivered or telecopied in the
case of a notice to the Operating Partnership to the following address and
telecopy number:
Tower Realty Operating Partnership, L.P.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxxx X. Xxxxxxx
Phone: (000)000-0000
Telecopy: (000)000-0000
-7-
8
with a copy to:
Battle Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxxx, Esq.
Phone: (000)000-0000
Telecopy: (000)000-0000
and addressed and delivered or telecopied, in the case of a notice
to the Grantor, to
-------------------------
-------------------------
-------------------------
with a copy to:
Xxxx Marks & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxxx, Esq.
Phone: (000)000-0000
Telecopy: (000)000-0000
5.9 Confidentiality. (a) The Grantor shall treat as strictly
confidential the fact that the Company is contemplating an offering of its
Common Stock until such time as the Company has filed the Registration Statement
with the Securities and Exchange Commission, and shall not communicate at any
time the terms of this Agreement to any person other than counsel, accountants
or advisors to the Grantor who agree to keep such terms confidential and any
lender holding a lien on any Property Interests.
(b) The Grantor shall treat all information received from the Operating
Partnership or its counsel, accountants or advisors pertaining to the Operating
Partnership or the Company confidential and shall disseminate same only to
counsel to the Grantor who agrees to keep such information confidential.
5.10 Computation of Time. Any time period provided for herein which
shall end on a Saturday, Sunday or bank or legal holiday shall extend to 5:00
p.m. of the next full business day. All times are New York City time.
5.11 Survival. It is the express intention and agreement of the parties
hereto that the representations, warranties and covenants of the Operating
Partnership and the Grantor set forth in this Agreement shall survive the
consummation of the transactions contemplated hereby.
-8-
9
5.12 Time of the Essence. Time is of the essence with respect to all
obligations under this Agreement.
5.13 No Consent. Nothwithstanding anything to the contrary herein,
nothing in this Agreement shall be construed to permit a transfer, prior to the
exercise of the Option, of the Property without the consent of the Grantor, or
to imply that any such consent would be required.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement, or caused this Agreement to be duly executed on its behalf, as of the
date first written above.
OPERATING PARTNERSHIP:
TOWER REALTY OPERATING
PARTNERSHIP, L.P.
By: TOWER REALTY TRUST, INC.,
its general partner
By: /s/ Xxxxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: President
GRANTOR:
/s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxx
-9-
10
EXHIBIT A
ASSIGNMENT
In exchange for $25,000, the receipt and sufficiency of which
is hereby acknowledged, Xxxxxxx X. Xxxxxx (the "Assignor") hereby assigns,
transfers and conveys to Tower Realty Operating Partnership, L.P., a Delaware
limited partnership (the "Operating Partnership"), his entire right, title and
interest in and to all interests directly or indirectly held by him in Tower 45
Associates Limited Partnership, a New York limited partnership, including Xxxx
XX Associates and Tower 45 Ventures, L.P. (collectively, the "Partnership"), or
in the property located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx (the
"Interests"), including, without limitation, all rights to receive distributions
of money, profits and other assets from or relating to the Partnership,
presently existing or hereafter arising or accruing, TO HAVE AND TO HOLD the
same unto the Operating Partnership, its successors and assigns, forever. This
Assignment is made by Assignor without recourse, covenant, representation or
warranty, express or implied, oral or written, except that the undersigned
represents and warrants that he has not transferred, sold, pledged or
hypothecated, or otherwise disposed of or encumbered, the Interests. The
undersigned hereby releases the Partnership and its general partner Tower 45,
Inc. [add general partners of Xxxx XX Associates and Tower 45 Ventures, L.P.]
(collectively, the "GP") (but only in its capacity as a general partner of the
Partnership and in connection with the Partnership) from any and all liabilities
or obligations now or hereafter owing to the undersigned, arising out of and
liabilities or pursuant to the Agreement of Limited Partnership of the
Partnership. The Operating Partnership hereby assumes all obligations in respect
of the Interests. The Operating Partnership, the GP and the Partnership hereby
release the Assignor from any and all liabilities and obligations arising from
the Assignor's ownership of the Interests, and agree to indemnify and hold
harmless Assignor against any liability or obligation in respect thereof. The
Operating Partnership, Partnership and the GP acknowledge that the Grantor does
not owe the Partnership any outstanding capital contributions, fees or any other
money of any nature whatsoever.
Upon the execution and delivery of this Assignment, the
undersigned withdraws from the Partnership for all purposes.
Dated: _______________, 1997
11
------------------------------
Xxxxxxx X. Xxxxxx
Accepted and agreed:
TOWER REALTY OPERATING
PARTNERSHIP, L.P.
By: Tower Realty Trust, Inc., its general
partner
By:_____________________________
Xxxxxxxx X. Xxxxxxx
President
Agreed:
TOWER 45 ASSOCIATES LIMITED PARTNERSHIP
By: TOWER 45, INC., its
general partner
By:___________________________________
Xxxxxxxx X. Xxxxxxx
President
TOWER 45, INC.
By:____________________________________
Xxxxxxxx X. Xxxxxxx
President
[Add signature blocks for Xxxx XX Associates and Tower 45
Ventures, L.P. general partners.]
-2-
