SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 4, 1996
Cali Realty Corporation
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(Exact name of registrant as specified in its charter)
Maryland 1-13274 22-3305147
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(state or other jurisdiction (Commission (IRS Employer
or incorporation) File Number) Identification Number)
11 Commerce Drive, Cranford , New Jersey 07016
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Registrant's telephone number, including area code (908) 272-8000
N/A
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(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
On November 4, 1996, Cali Realty Corporation (the "Company")
completed its acquisition (the "Acquisition") of Harborside Financial Center, a
1.9 million square foot office complex located in Jersey City, New Jersey. In
connection with the Acquisition, the Company also acquired 11.3 acres of land
fully zoned and permitted for an additional 4.1 million square feet of
development. The total cost for the Acquisition of approximately $287,400,000
was financed with mortgage indebtedness of $150,000,000 and with cash of
$137,400,000 which was made available through the Company's revolving credit
facilities (including its new $80,000,000 revolving credit facility with
Prudential Securities Credit Corp.)
The foregoing description of the Acquisition, as well as the
description of the Acquisition contained in the Company's Current Report on Form
8-k, dated October 24, 1996, are not intended to be complete and are qualified
in their entirety by the completed text of the material agreements setting forth
the terms of the Acquisition, which material agreements are filed as Exhibits
10.42 through 10.50 hereto and are incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
10.42 - Agreement of Purchase and Sale, dated September 11,
1996 , among Plaza One Exchange Place Limited
Partnership, Harborside Exchange Place Limited
Partnership, Plaza II and III Urban Renewal
Associates, L.P., (Seller) and Cali Realty
Corporation (Purchaser).
10.43 - Contingent Consideration Agreement, dated November 4,
1996, between Harborside Exchange Place Limited
Partnership and Cali Harborside (Fee) Associates L.P.
10.44 - Revolving Credit Facility Agreement, dated November
1, 1996, among Cali Realty, L.P., as Borrower, the
Lenders parties thereto, and Prudential Securities
Credit Corp., as Administrative Agent, in the amount
of $80,000,000
10.45 - Mortgage Note in the amount of $42,087,513 between
Cali Harborside Plaza I (Fee) Associates L.P. and US
West Pension Trust Investment Management Company,
dated November 4, 1996
<PAGE>
10.46 - Assignment and Assumption Agreement, dated as of
November 4, 1996, among Plaza One Exchange Place
Limited Partnership (formerly known as BT Exchange
Limited Partnership), Harborside Exchange Place
Limited Partnership, Harborside Urban Renewal
Associates L.P., Plaza II & III Urban Renewal
Associates L.P., Plaza IV Urban Renewal Associates
L.P., Plaza V Urban Renewal Associates L.P., Plaza VI
Urban Renewal Associates L.P., Cali Harborside (Fee)
Associates L.P., Cal-Harbor II & III Urban Renewal
Associates L.P., Cal-Harbor IV Urban Renewal
Association L.P., Cal-Harbor V Urban Renewal
Associates L.P., Cal-Harbor VI Urban Associates
Renewal Associates L.P., Cal-Harbor VII Urban Renewal
Associates L.P., The Northwestern Mutual Life
Insurance Company and Principal Mutual Life Insurance
Company
10.47 - Management Agreement, dated November 4, 1996, among
Cali Harborside (Fee) Associates L.P., Cali
Harborside Plaza I (Fee) Associates L.P., Plaza II &
III Urban Renewal Associates L.P., Cal-Harbor II &
III Urban Renewal Associates L.P., Plaza IV Urban
Renewal Associates L.P., Cal-Harbor IV Urban Renewal
Associates L.P., Plaza V Urban Renewal Associates,
Cal-Harbor V Urban Renewal Associates L.P., Plaza VI
Urban Renewal Associates L.P., Cal-Harbor VI Urban
Renewal Associates L.P., Harborside Exchange Place
Limited Partnership, Cal-Harbor VII Urban Renewal
Associates L.P., North Pier Urban Renewal Associates
L.P., Cal-Harbor No. Pier Urban Renewal Associates
L.P., South Pier Urban Renewal Associates L.P.,
Cal-Harbor So. Pier Urban Renewal Associates L.P. and
Institutional Realty Management, LLC, as Manager.
10.48 - Rental Agency Agreement, dated November 4, 1996,
among Cali Harborside (Fee) Associates L.P., Cali
Harborside Plaza I (Fee) Associates L.P., Plaza II
and III Urban Renewal Associates L.P., Cal-Harbor II
& III Urban Renewal Associates L.P., Plaza IV Urban
Renewal Associates L.P., Cal-Harbor IV Urban Renewal
Associates L.P., Plaza V Urban Renewal Associates
L.P., Cal-Harbor V Urban Renewal Associates L.P.,
Plaza VI Urban Renewal Associates L.P., Cal-Harbor VI
Urban Renewal Associates L.P., Harborside Exchange
Place Limited Partnership, Cal-Harbor VII Urban
Renewal Associates L.P., North Pier Urban Renewal
Associates L.P., Cal-Harbor No. Pier Urban Renewal
Associates L.P., South Pier Urban Renewal Associates
L.P., Cal-Harbor So. Pier Urban Renewal Associates
L.P. and Institutional Realty Management, LLC, as
Rental Agent
<PAGE>
10.49 - Company Pledge Agreement, dated as of November 1,
1996, between Cali Realty Corporation and Prudential
Securities Credit Corp., as Administrative Agent for
the Lenders
10.50 - Pledge Agreement, dated as of November 1, 1996,
between Cali Realty, L.P. and Prudential Securities
Credit Corp., as Administrative Agent for the benefit
of the Lenders
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Cali Realty Corporation has duly caused this Report to be signed on its behalf
by the undersigned hereunto duly authorized.
CALI RELATY CORPORATION
November 18, 1996 By: /s/ Thomas A. Rizk
-----------------------------------------
Thomas A. Rizk
President and Chief Executive Officer
November 18, 1996 By: /s/ Barry Lefkowitz
-----------------------------------------
Barry Lefkowitz
Vice President - Finance and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit Number
Exhibit Title
10.42 Agreement of Purchase and Sale, dated September 11, 1996,
among Plaza One Exchange Place Limited Partnership,
Harborside Exchange Place Limited Partnership, Plaza II and
III Urban Renewal Associates, L.P., (Seller) and Cali Realty
Corporation (Purchaser)
10.43 Contingent Consideration Agreement, dated November 4, 1996,
between Harborside Exchange Place Limited Partnership and
Cali Harborside (Fee) Associates L.P.
10.44 Revolving Credit Facility Agreement, dated November 1, 1996,
among Cali Realty, L.P., as Borrower, the Lenders parties
thereto, and Prudential Securities Credit Corp., as
Administrative Agent, in the amount of $800,000,000
10.45 Mortgage Note in the amount of $42,087,513 between Cali
Harborside Plaza I (Fee) Associates L.P. and US West Pension
Trust Investment Management Company, dated November 4, 1996
10.46 Assignment and Assumption Agreement, dated as of November 4,
1996, among Plaza One Exchange Place Limited Partnership
(formerly known as BT Exchange Limited Partnership),
Harborside Exchange Place Limited Partnership, Harborside
Urban Renewal Associates L.P., Plaza II & III Urban Renewal
Associates L.P., Plaza IV Urban Renewal Associates L.P.,
Plaza V Urban Renewal Associates L.P., Plaza VI Urban
Renewal Associates L.P., Cali Harborside (Fee) Associates
L.P., Cal-Harbor II & III Urban Renewal Associates L.P.,
Cal-Harbor IV Urban Renewal Association L.P., Cal-Harbor V
Urban Renewal Associates L.P., Cal-Harbor VI Urban
Associates Renewal Associates L.P., Cali-Harbor VII Urban
Renewal Associates L.P., The Northwestern Mutual Life
Insurance Company and Principal Mutual Life Insurance
Company.
10.47 Management Agreement, dated November 4, 1996, among Cali
Harborside (Fee) Associates L.P., Cali Harborside Plaza I
(Fee) Associates L.P., Plaza II & III Urban Renewal
Associates L.P., Cal-Harbor II & III Urban Renewal
Associates L.P., Plaza IV Urban Renewal Associates L.P.,
Cal-Harbor IV Urban Renewal Associates L.P., Plaza V Urban
Renewal Associates, Cal-Harbor V Urban Renewal Associates
L.P., Plaza VI Urban Renewal Associates L.P., Harborside
Exchange Place Limited Partnership, Cal-Harbor VII Urban
Renewal Associates L.P., North Pier Urban Renewal Associates
L.P., Cal-Harbor No. Pier Urban Renewal Associates L.P.,
South Pier Urban Renewal Associates L.P., Cal-Harbor So.
Pier Urban Renewal Associates L.P. and Institutional Realty
Management, LLC, as Manager.
<PAGE>
10.48 Rental Agency Agreement, dated November 4, 1996, among Cali
Harborside (Fee) Associates L.P., Cali Harborside Plaza I
(Fee) Associates L.P., Plaza II and III Urban Renewal
Associates L.P., Cal-Harbor II & III Urban Renewal Assocites
L.P., Plaza IV Urban Renewal Associates L.P., Cal-Harbor IV
Urban Renewal Associates L.P., Plaza V Urban Renewal
Associates L.P., Cal-Harbor V Urban Renewal Associates L.P.,
Plaza VI Urban Renewal Associates L.P., Cal-Harbor VI Urban
Renewal Associates L.P., Harborside Exchange Place Limited
Partnership, Cal-Harbor VII Urban Renewal Associates L.P.,
North Pier Urban Renewal Associates L.P., Cal-Harbor No.
Pier Urban Renewal Associates L.P., South Pier Urban Renewal
Associates L.P., Cal-Harbor So. Pier Urban Renewal
Associates L.P., and Institutional Realty Management, LLC,
as Rental Agent.
10.49 Company Pledge Agreement, dated as of November 1, 1996,
between Cali Realty Corporation and Prudential Securities
Credit Corp., as Administrative Agent for the Lenders
10.50 Pledge Agreement, dated as November 1, 1996, between Cali
Realty, L.P. and Prudential Securities Credit Corp., as
Administrative Agent for the benefit of the Lenders.
AGREEMENT OF PURCHASE AND SALE
BETWEEN
PLAZA ONE EXCHANGE PLACE LIMITED PARTNERSHIP
HARBORSIDE EXCHANGE PLACE LIMITED PARTNERSHIP
PLAZA II AND III URBAN RENEWAL ASSOCIATES L.P.
collectively, as Seller,
and
CALI REALTY CORPORATION,
as Purchaser
Dated: September 11, 1996
Location Of Property:
THE HARBORSIDE FINANCIAL CENTER
JERSEY CITY, NEW JERSEY
<PAGE>
TABLE OF CONTENTS
ARTICLE I. Sale of Property....................................................
1.1. Sale ...............................................................
1.2. Ground Leases.......................................................
ARTICLE II. Purchase Price.....................................................
2.1. Purchase Price. ...................................................
2.2. Additional and Contingent Consideration.............................
ARTICLE III. Deposit...........................................................
3.1. Deposit ............................................................
3.2. Application of Deposit. ............................................
3.3. Escrow Agent........................................................
ARTICLE IV. Closing, Prorations and Closing Costs..............................
4.1. Closing ............................................................
4.2. Prorations..........................................................
4.3. Closing Costs.......................................................
ARTICLE V. Purchaser's Right of Inspection; Feasibility Period.................
5.1. Right to Evaluate...................................................
5.2. Independent Examination.............................................
5.3. Termination Right...................................................
5.4. Copies of Reports...................................................
ARTICLE VI. Title and Survey Matters...........................................
6.1. Title ..............................................................
6.2. Seller's Inability to Convey Title..................................
6.3. Survey .............................................................
ARTICLE VII. Representations and Warranties of Seller..........................
7.1. Seller's Representations............................................
7.2. Change in Representation/Waiver.....................................
7.3. Survival ...........................................................
7.4. Limitation of Liability.............................................
ARTICLE VIII. Representations and Warranties of Purchaser.......................
8.1. Authority...........................................................
8.2. Bankruptcy or Debt of Purchaser.....................................
8.3. No Financing Contingency............................................
8.4. ERISA Compliance....................................................
8.5. Purchaser's Acknowledgment..........................................
8.6. Survival ...........................................................
ARTICLE IX. Seller's Interim Operating Covenants...............................
9.1. Operations.........................................................
9.2. Maintain Insurance.................................................
9.3. Personal Property..................................................
9.4. No Sales...........................................................
9.5. Tenant Leases......................................................
9.6. Intentionally Deleted..............................................
9.7. Intentionally Deleted..............................................
9.8. Tenant Estoppels...................................................
9.9. Contracts..........................................................
9.10. Light Rail Line....................................................
9.11. Litigation.........................................................
9.12. Notices of Violation...............................................
9.13. Reciprocal Operating Agreement.....................................
ARTICLE X. Closing Conditions..................................................
10.1. Conditions to Obligations of Seller................................
10.2. Conditions to Obligations of Purchaser.............................
ARTICLE XI. Closing............................................................
11.1. Seller's Closing Obligations.......................................
11.2. Purchaser's Closing Obligations....................................
ARTICLE XII. Risk of Loss......................................................
12.1. Condemnation and Casualty..........................................
12.2. Condemnation not Material..........................................
12.3. Casualty not Material..............................................
12.4. Materiality........................................................
ARTICLE XIII. Default..........................................................
13.1. Default by Seller..................................................
13.2. Default by Purchaser. ............................................
ARTICLE XIV. Brokers...........................................................
14.1. Brokerage Indemnity.................................................
ARTICLE XV. Confidentiality....................................................
15.1. Confidentiality....................................................
15.2. Publication........................................................
ARTICLE XVI. Miscellaneous.....................................................
16.1. Notices.........................................................
16.2. Governing Law...................................................
16.3. Headings........................................................
16.4. Business Days...................................................
16.5. Counterpart Copies..............................................
16.6. Binding Effect..................................................
16.7. Assignment......................................................
16.8. Interpretation..................................................
16.9. Entire Agreement................................................
16.10. Severability....................................................
16.11. Survival........................................................
16.12. Exhibits........................................................
16.13. Limitation of Liability.........................................
16.14. Prevailing Party................................................
16.15. Escrow Agreement................................................
16.16. No Recording....................................................
16.17. Waiver of Trial by Jury.........................................
16.18. ISRA Obligations................................................
16.19. Letter of Intent................................................
16.20. Management Agreement............................................
16.21. Collective Bargaining Agreements................................
53.22. Single Purpose Entities ........................................
<PAGE>
LIST OF EXHIBITS AND SCHEDULES
Exhibits:
Exhibit A - BT Parcel
Exhibit A-1 - HEP Parcel
Exhibit B - Leases
Exhibit B-1 - Ground Leases
Exhibit C - Form of Assignment and Assumption of Ground Lease (Lessee)
Exhibit D - Form of Purchase Money Note
Exhibit E - Form of Purchase Money Mortgage
Exhibit F - Form of Assignment of Rents and Leases
Exhibit G - Form of Guaranty
Exhibit H - Form of Contingent Consideration Agreement
Exhibit I - Permitted Exceptions
Exhibit J - Rent Roll
Exhibit K - Intentionally Deleted
Exhibit L - Form of Deed
Exhibit M - Form of Assignment and Assumption of Leases and
Security Deposits
Exhibit N - Form of Assignment and Assumption of Ground Leases (Lessor)
Exhibit O - Form of Assignment and Assumption of Contracts
Exhibit P - Form of Assignment and Assumption of Option Agreement
Exhibit Q - Form of Assignment and Assumption of the Fox Lance Agreements
Exhibit R - Form of Seller's Letter to Tenants
Exhibit S - Form of Seller's Bring-Down Certificate
Exhibit T - Form of Bill of Sale
Exhibit U - Form of Firpta Affidavit
Exhibit V - Form of Purchaser's Bring-Down Certificate
Exhibit W - Remediation Property
Exhibit X - Underground Storage Tanks
Schedules:
Schedule 1 - Lease Defaults
Schedule 2 - Brokerage Commissions and Tenant Improvement Costs
Schedule 3 - Contracts
Schedule 4 - Tax Appeals
Schedule 5 - Pending Applications
Schedule 6 - Insurance Policies
Schedule 7 - Employees
Schedule 8 - Major Tenants
Schedule 9 - Fox Lance Agreements
<PAGE>
AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT OF PURCHASE AND SALE (this "Agreement") is made and
entered into as of the 11th day of September, 1996, by and between PLAZA ONE
EXCHANGE PLACE LIMITED PARTNERSHIP (formerly known as BT Exchange Place Limited
Partnership), a New Jersey limited partnership, HARBORSIDE EXCHANGE PLACE
LIMITED PARTNERSHIP ("HEPLP"), a New Jersey limited partnership and PLAZA II AND
III URBAN RENEWAL ASSOCIATES L.P. ("Plaza II and III L.P."), a New Jersey
limited Partnership (hereinafter referred to collectively as "Seller"), and CALI
REALTY CORPORATION, a Maryland corporation (hereinafter referred to as
"Purchaser").
In consideration of the mutual promises, covenants and agreements
hereinafter set forth and of other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Seller and Purchaser agree as
follows:
I. ARTICLE I.
Sale of Property
I.1. Sale. Seller hereby agrees to sell, assign and convey to Purchaser
and Purchaser agrees to purchase from Seller, all of Seller's right, title and
interest in and to, the following:
I.1.1. That certain real property lying and being situated
in the City of Jersey City, County of Hudson, State of New Jersey and being more
particularly described (i) on Exhibit A attached hereto (the "BT Parcel") and
(ii) on Exhibit A-1 attached hereto (the "HEP Parcel") (the BT Parcel and the
HEP Parcel are sometimes hereinafter collectively referred to as the "Land"),
together with any improvements located thereon (the "Improvements"). (The
portions of the HEP Parcel described on Lots 1 - 4 on Exhibit A-1 hereto are
sometimes hereinafter collectively referred to as the "Upland Parcels"; and the
portions of the HEP Parcel described on Lots 7 - 15 on Exhibit A-1 hereto are
sometimes hereinafter collectively referred to as the "Piers");
I.1.2. All of Seller's interest as lessor, or sublessor, as
the case may be, (i) in all leases, subleases, licenses and other occupancy
agreements, together with any and all amendments, modifications or supplements
thereto, as are hereafter referred to collectively as the "Leases" being more
particularly described on Exhibit B attached hereto and (ii) in all ground
leases (the "Ground Leases") being more particularly described on Exhibit B-1
attached hereto, and all prepaid rent attributable to the period following the
Closing (as hereinafter defined), and subject to Section 4.2 below, the security
deposits under such Leases (collectively, the "Leasehold Property");
I.1.3. All of Plaza II and III L.P.'s interest as lessee in
that certain Ground Lease between HEPLP, as ground lessor, and Plaza II and III
L.P., as ground lessee, as more particularly described on Exhibit B-1 hereto;
I.1.4. All rights, privileges, grants and easements
appurtenant to Seller's interest in the Land and the Improvements, if any,
including, without limitation, all of Seller's right, title and interest, if
any, in and to all mineral and water rights and all easements, licenses,
covenants and other rights-of-way or other appurtenances used in connection with
the beneficial use and enjoyment of the Land and the Improvements together with
all right, title, and interest of Seller arising from any riparian grants from
the State of New Jersey with respect to the Land including without limitation
the grant dated September 19, 1986 and recorded September 25, 1986 in Deed Book
3619 page 269 in the Office of the Register of Hudson County and the Fox Lance
Agreements (as defined on Schedule 9 attached hereto) (the Land, the
Improvements and all such easements, grants and appurtenances are sometimes
collectively referred to herein as the "Real Property");
I.1.5. All personal property (including equipment), if any,
owned by Seller and located on the Real Property as of the date hereof, all
inventory owned by Seller and located on the Real Property on the date of
Closing, and all fixtures (if any) owned by Seller and located on the Real
Property as of the date hereof (the "Personal Property");
I.1.6. All trademarks and tradenames, if any, used or useful
in connection with the Real Property (including, without limitation, all of
Seller's interest, if any, to the use of the name "Harborside Financial
Center"), but only to the extent that the same are not trademarks or tradenames
of Seller or any of Seller's affiliated companies (collectively, the
"Tradenames");
I.1.7. All (i) service contracts, utility, maintenance and
other contracts or agreements, including the Collective Bargaining Agreements
(as defined in Section 16.21 hereof) (collectively, the "Contracts"), currently
in effect with respect to the Property (as hereinafter defined) to which Seller
is a party, (ii) guarantees, licenses, approvals, certificates, permits and
warranties relating to the Property (collectively, the "Permits and Licenses"),
and (iii) telephone numbers in use at the Property allocated to Seller (other
than any telephone numbers, services or plans provided by Seller's long distance
telephone carriers) (the "phone numbers"), all to the extent assignable (the
Contracts, the Permits and Licenses and the phone numbers are sometimes
hereinafter collectively referred to as the "Intangible Property"); and
I.1.8. All other interests, whether tangible or intangible,
held by Seller in connection with the operation of "Harborside Financial
Center", or which benefit any of the interests described in Sections 1.1.1
through 1.1.7 hereof, except as otherwise provided in this Agreement or which
are proprietary to Seller or the Managing Agent (as hereinafter defined).
(The Real Property, the Leasehold Property, the Personal
Property, the Tradenames, the Intangible Property and the foregoing other
property interests held by Seller in connection with the operation of
"Harborside Financial Center" are sometimes collectively hereinafter referred to
as the "Property").
I.2. Ground Leases. North Pier Urban Renewal Associates L.P., South
Pier Urban Renewal Associates L.P., Harborside Urban Renewal Associates L.P.,
Plaza IV Urban Renewal Associates L.P., Plaza V Urban Renewal Associates L.P.,
and Plaza VI Urban Renewal Associates L.P., (each a "Ground Lessee" and,
collectively the "Ground Lessees"), individually, by their execution of this
Agreement, hereby agree and covenant to assign each of their respective
interests in the Ground Leases to such Permitted Assignees (as hereinafter
defined) designated by Purchaser in accordance with the terms of Section 16.7
hereof. As a condition of closing, at the Closing, the Ground Lessees and each
of such Permitted Assignees shall enter into an "Assignment and Assumption of
Ground Lease (Lessee)" in the form of Exhibit C attached hereto with respect to
each of the Ground Leases.
II. ARTICLE II.
Purchase Price
II.1. Purchase Price. The purchase price for the Property shall be Two
Hundred Eighty-Two Million Four Hundred Thousand Dollars ($282,400,000) (the
"Purchase Price"). The Purchase Price, net of all prorations as provided for
herein, shall be paid to Seller by Purchaser at Closing, as follows:
(i) One Hundred and Fifty Million Dollars ($150,000,000) (the
"Financed Portion"), as follows;
(a) An amount equal to the outstanding principal balance
of the Existing Financing (as hereinafter defined),
by Purchaser assuming that certain Mortgage Loan
currently encumbering the Property in the original
principal amount of $130,000,000, made by The
Northwestern Mutual Life Insurance Company
("Northwestern") and Principal Mutual Life Insurance
Company ("Principal"), as lenders (collectively, the
"Existing Lenders"), to Seller (and related parties)
which Mortgage Loan was made on December 5, 1995 (the
"Existing Financing"). Seller covenants and agrees
that, as of the Closing Date, the outstanding
principal amount due under the Existing Financing
shall not exceed $110,000,000; and
(b) The balance of the Financed Portion (the "Purchase
Money Loan"), by Purchaser executing and delivering
to Seller, or its assignee, (i) a fully recourse
purchase money note (the "Purchase Money Note")
substantially in the form of Exhibit D attached
hereto, (ii) a purchase money mortgage, assignment of
rents, security agreement and financing statement to
secure the Purchase Money Note (the "Purchase Money
Mortgage") substantially in the form of Exhibit E
attached hereto, to be recorded against the BT Parcel
at the Closing, (iii) an assignment of rents and
leases (the "Assignment of Rents and Leases") in the
form of Exhibit F attached hereto, to be recorded
against the BT Parcel at the Closing, (iv) if the
Purchase Money Note is executed by any entity other
than the Purchaser named herein, guaranties (the
"Guaranties") to be made by (a) Cali Realty
Corporation and (b) Cali Realty, L.P. guaranteeing
the payment and performance obligations of the maker
under the Purchase Money Loan, in the form of Exhibit
G attached hereto, (v) UCC-1 Financing Statements in
favor of Seller, or its assignee, as creditor (the
"Financing Statements"), and (vi) such other
documents as reasonably required by Seller, or its
assignee, which are consistent with documents
normally required by prudent lenders (the Purchase
Money Note, Purchase Money Mortgage, Assignment of
Rents and Leases, Guaranties, Financing Statements
and documents required pursuant to subsection (vi)
above, collectively, the "Purchase Money Loan
Documents").
(ii) The balance of the Purchase Price (the "Cash Portion"), by
wire transfer of immediately available funds to or as directed
by, Seller on the Closing Date. (Seller shall provide
Purchaser with wiring instructions for the payment of the Cash
Portion no later than two (2) business days prior to the
Closing.)
II.2. Additional and Contingent Consideration. As additional and
contingent consideration (the "Contingent Consideration"), Purchaser agrees,
warrants and covenants to pay Seller, for each square foot of development
commenced, or land sold or ground leased on the Upland Parcels and/or the Piers
by Purchaser, or any of its affiliates, during the thirty (30) year period
following the Closing, on the terms and conditions more particularly set forth
in that certain agreement annexed hereto as Exhibit H (the "Contingent
Consideration Agreement"). At the Closing, and as a condition thereof, Purchaser
and Seller shall execute an agreement substantially in the form of the
Contingent Consideration Agreement, which Contingent Consideration Agreement
shall, as long as same is consented to by the Existing Lenders, be recorded
against the Upland Parcels and the Piers. The Contingent Consideration shall be
payable with respect to the development of up to a maximum of 2,000,000 square
feet on the Upland Parcels and the Piers. The provisions of this Section 2.2
shall survive the Closing.
At the Closing, and as a condition thereof, Purchaser shall deliver to
Seller guaranties to be made by (a) Cali Realty Corporation and (b) Cali Realty,
L.P. guaranteeing the payment and performance obligations of Purchaser's
obligations under the Contingent Consideration Agreement (the "Contingent
Consideration Guaranties"). The Contingent Consideration Guaranties shall be in
form and substance reasonably acceptable to Seller.
Purchaser has advised Seller that Purchaser and its parent company have
substantial development plans and intentions for the development of the Property
and ready access to the capital necessary to effect such development.
III. ARTICLE III.
Deposit
III.1. Deposit. Concurrently with the execution of this Agreement, and
as a condition precedent to the formation of this Agreement, Purchaser shall
deposit with First American Title Insurance Company of New York (the "Escrow
Agent") a Two Million Dollar ($2,000,000) deposit (the "Deposit") in the form of
a sight-draft letter of credit (the "Letter of Credit") made payable to Seller,
the receipt of which is hereby acknowledged by Escrow Agent's execution hereof.
III.2. Application of Deposit. If the Closing occurs as contemplated
hereunder, the Deposit shall be returned to Purchaser. In the event that the
Closing does not occur as contemplated hereunder because Purchaser terminates
this Agreement pursuant to the terms set forth in this Agreement, the Deposit
shall be refunded to Purchaser in accordance with the provisions of Section
16.15 hereof. In the event that the Closing does not occur as contemplated
hereunder because of a default by Purchaser under this Agreement, the Deposit
shall be paid to and retained by Seller in accordance with the provisions of
Section 16.15 hereof.
Notwithstanding anything to the contrary contained in this Agreement,
including, without limitation, anything to the contrary contained in Section
16.15 hereof, Escrow Agent shall, on the date which is thirty (30) days prior to
any expiration date of the Letter of Credit, deliver the Letter of Credit to
Seller, unless prior thereto Purchaser shall have caused the issuing bank to
extend the term of the Letter of Credit. Escrow Agent shall deliver the Letter
of Credit to Seller in accordance with the terms of this Paragraph,
notwithstanding any instructions to the contrary from Purchaser. Upon receipt of
the Letter of Credit, Seller shall be entitled to draw upon the Letter of
Credit, and, thereupon, shall immediately re-deposit the proceeds from the
Letter of Credit with the Escrow Agent to be held (or disbursed) by the Escrow
Agent in accordance with the terms of this Agreement.
III.3. Escrow Agent. Escrow Agent is executing this Agreement to
acknowledge Escrow Agent's responsibilities hereunder, which may be modified
only by a written amendment signed by all of the parties. Any amendment to this
Agreement that is not signed by Escrow Agent shall be effective as to the
parties thereto, but shall not be binding on Escrow Agent. Escrow Agent shall
accept the Deposit with the understanding of the parties that Escrow Agent is
not a party to this Agreement except to the extent of its specific
responsibilities hereunder, and does not assume or have any liability for the
performance or non-performance of Purchaser or Seller hereunder to either of
them. Additional provisions with respect to the Escrow Agent are set forth in
Article XVI.
IV. ARTICLE IV.
Closing, Prorations and Closing Costs
IV.1. Closing. The closing of the purchase and sale of the Property
(the "Closing") shall be held at the offices of Skadden, Arps, Slate, Meagher &
Flom, 919 Third Avenue, New York, New York, on or before 10:00 a.m. local time
on the date which is thirty (30) days after the date on which the Waiver Notice
(as hereinafter defined) is delivered. The date of Closing is referred to in
this Agreement as the "Closing Date". Either or both parties hereto shall have a
one time right to extend the Closing Date for a period of up to ten business
days upon notice to the other party of such election, and thereafter, time shall
be of the essence with respect to the obligations of the parties hereto.
Notwithstanding anything to the contrary contained above, Purchaser shall have
the right to accelerate the Closing Date to a date selected by Purchaser,
provided Seller shall have received not less than ten (10) days prior written
notice. Either party shall have the right to adjourn the Closing for ten (10)
days from the scheduled Closing Date or the accelerated Closing Date, as the
case may be, before time shall be of the essence.
IV.2. Prorations. All matters involving prorations or adjustments to be
made in connection with Closing and not specifically provided for in some other
provision of this Agreement shall be adjusted in accordance with this Section
4.2. Except as otherwise set forth herein, all items to be prorated pursuant to
this Section 4.2 shall be prorated as of midnight of the day immediately
preceding the Closing Date (except that if the Purchase Price is not disbursed
to or for the benefit of Seller on or before 3:00 p.m. eastern time on the
Closing Date, such adjustments shall be made as of the date of such disbursement
of the Purchase Price), with Purchaser to be treated as the owner of the
Property, for purposes of prorations of income and expenses, on and after the
Closing Date.
Except as otherwise set forth herein, all prorations shall be done in
accordance with the customs with respect to title closings recommended by The
Real Estate Board of New York, Inc.
The following items shall be prorated:
IV.2.1. Real Estate and Property Taxes. Real estate and
personal property taxes and special assessments, if any. Seller shall pay all
real estate and personal property taxes and special assessments attributable to
the Property to, but not including, the Closing Date. If the real estate and/or
personal property tax rate and assessments have not been set for the year in
which the Closing occurs, then the proration of such taxes shall be based upon
the rate and assessments for the preceding tax year and such proration shall be
adjusted in cash between Seller and Purchaser upon presentation of written
evidence that the actual taxes paid for the year in which the Closing occurs
differ from the amounts used in the Closing in accordance with the provisions of
Article 4.2.14 hereof.
IV.2.2. Interest. Interest on the Existing Financing.
IV.2.3. Insurance Premiums. There shall be no proration of
Seller's insurance premiums or assignment of Seller's insurance policies with
respect to the Property and Seller shall cancel all of its existing policies as
of the Closing Date. Purchaser shall be obligated to obtain replacement
insurance policies with respect to the Property in accordance with the terms of
the Purchase Money Mortgage.
IV.2.4. Utilities and Services. Purchaser and Seller hereby
acknowledge and agree that the amounts of all telephone, electric, sewer, water
and other utility bills, trash removal bills, janitorial and maintenance service
bills and all other operating and administrative expenses relating to the
Property and allocable to the period prior to the Closing Date shall be
determined and paid by Seller before Closing, if possible, or shall be paid
thereafter by Seller or adjusted between Purchaser and Seller immediately after
the same have been determined. Seller shall attempt to have all base building
meters read as of the Closing Date. Purchaser shall cause all utility services
to be placed in Purchaser's name as of the Closing Date.
IV.2.5. Rental. Base or fixed rents and Additional Rent (as
hereinafter defined), including any prepaid rent. If on the Closing Date any
tenant under the Leases is in arrears in the payment of rent, rents received
from such tenant after the Closing shall be applied in the following order of
priority: (i) first to be apportioned between Purchaser and Seller for the month
in which the Closing occurred, (ii) then to Purchaser for any month or months
following the month in which the Closing occurred, and (iii) then to Seller for
the period prior to the month in which the Closing occurred. If rents or any
portion thereof received by Seller or Purchaser after the Closing are payable to
the other party by reason of this allocation, the appropriate sum, less a
proportionate share of any reasonable attorneys' fees and costs and expenses of
collection thereof, shall be promptly paid to the other party. Seller shall have
the right, after Closing, to proceed against tenants for delinquent rents
allocable to the period of Seller's ownership of the Property; provided,
however, in no event may Seller seek to evict any tenant or terminate any Lease
or pursue any collateral serving as security for any Lease (including equipment,
fixtures and furniture). Purchaser agrees that it shall use commercially
reasonable efforts to collect any such delinquent rents. Any unapplied security
deposits under the Leases shall be credited against the Cash Portion of the
Purchase Price at Closing. There shall be no proration of rents (including,
without limitation, base, fixed or Additional Rent) between Seller and Purchaser
with respect to the Ground Leases.
IV.2.6. Additional Rent. If any tenants under a Lease are
required to pay percentage rents, escalation charges for real estate taxes,
parking charges, operating expense and maintenance escalation rents or charges,
porter's wage increases, cost-of-living increases, "sundry charges" or other
charges of a similar nature ("Additional Rents"), and any Additional Rents are
collected by Purchaser after the Closing Date which are attributable in whole or
in part to any period prior to the Closing, then Purchaser shall promptly pay to
Seller its proportionate share thereof, less a proportionate share of any
reasonable attorneys' fees and costs and expenses of collection thereof. With
respect to any Additional Rents paid or payable by tenants under any Leases for
any period ending prior to the Closing which are to be adjusted between the
landlord and the tenant thereunder after the Closing (i) the Seller agrees, with
respect to such adjustments which are in favor of any such tenant, to reimburse
Purchaser, on demand, for the amount of such adjustments which the landlord
under such Lease is obligated to pay or credit to such tenant and (ii) the
Purchaser agrees, with respect to such adjustments which are in favor of
landlord, to pay to Seller, on demand, the amount of such adjustments which the
tenant under any such Lease pays to Purchaser. No adjustment which results in
the compromising of any claim shall be made without Seller's prior approval. The
calculation of the proration of Additional Rents hereunder shall be computed on
a straight-line basis for the calendar year in which the Closing occurs.
IV.2.7. Security Deposits. Tenants' security deposits held by
Seller (to the extent not applied by Seller pursuant to any Lease and this
Agreement) shall be turned over by Seller to Purchaser at the Closing by, in the
case of cash security deposits, crediting such amount to Purchaser pursuant to
Section 4.2.5 hereof and, in the case of any letters of credit, by the delivery
thereof by Seller to Purchaser in accordance with Section 11.1.9 hereof. At
Closing, Purchaser shall deliver to Seller a receipt for any security deposit so
turned over by Seller to Purchaser and Purchaser shall indemnify Seller with
respect thereto pursuant to, and in accordance with, the Assignment and
Assumption of Leases (as hereinafter defined). In the case of any security
deposits held by Seller in the form of letters of credit, such letters of
credit, to the extent permitted by the terms thereof, shall be assigned to
Purchaser at the Closing and Purchaser shall indemnify Seller with respect
thereto pursuant to, and in accordance with, the Assignment and Assumption of
Leases. At Closing, with respect to such letters of credit which by their terms
are assignable, Seller shall deliver any consents required by the issuing
bank(s) to the assignment of such letters of credit. Any fees imposed by such
issuing banks in connection with such assignments shall be paid 50% by Seller
and 50% by Purchaser at the Closing. In the case of any such letters of credit
which by their terms are not assignable, Seller shall use reasonable efforts to
cause the applicable tenant(s) to replace such letters of credit with ones which
are assignable to Purchaser, however, as to any such letters of credit which are
not replaced, then for the period from and after Closing, Seller shall hold such
nonassignable letters of credit in escrow for the benefit of Purchaser and, upon
written request by Purchaser, shall draw down on any such letter of credit and
simultaneously therewith, shall deliver the proceeds of such draw down to
Purchaser. Purchaser shall indemnify Seller with respect to any judgments,
suits, claims, demands, liabilities and obligations and related costs and
expenses (including reasonable attorneys' fees) arising out of Seller's draw
down and delivery of the proceeds of such letters of credit as directed by
Purchaser. Seller shall indemnify Purchaser (i) with respect to the failure of
Seller to turn over to Purchaser any cash security deposit or assignable letter
of credit security deposit of a tenant of the Real Property, or the failure to
hold any nonassignable letter of credit security deposit in escrow as set forth
above, but only in either case to the extent such security deposit (whether cash
or letter of credit) was not properly applied by Seller pursuant to any Lease,
and (ii) with respect to any judgments, suits, claims, demands, liabilities and
related costs and expenses (including reasonable attorneys' fees) arising out of
any act of Seller, as landlord, in connection with the security deposits and
related to the period prior to the Closing. The indemnities contained in this
Section 4.2.7 and in the Assignment and Assumption of Leases shall survive the
Closing.
IV.2.8. Brokerage Commissions/Tenant Improvements. (i) Seller
shall be responsible for all leasing and brokerage commissions (including the
brokerage commission set forth on Schedule 2 hereto with respect to the Lease
with Lewco Securities, if and when the same becomes due and payable), tenant
improvement costs and expenses and tenant "buy-out" or lease surrender costs
with respect to the Leases, other than (a) any such costs which are attributable
to the exercise of a lease renewal or expansion after May 1, 1996, (b) move-in
allowances in the amount of $290,000 with respect to the Lease with American
Institute of Certified Public Accountants, (c) tenant buy-out costs in the
amount of $16,750 per month through June, 1999 with respect to the Lease with
Crown Sample Card Company and (d) all tenant improvement costs and related
reimbursements in connection with the paving of certain parking lots and the
installation of revenue control equipment pursuant to the terms of Exhibit E of
the Lease between Seller and Kinney Hackensack, Inc. Any such brokerage
commissions or tenant improvement costs and expenses payable by Seller pursuant
to this Section 4.2.8 shall be payable by Seller only when such commissions,
costs and expenses become due and payable pursuant to the terms of the
respective brokerage agreements or Leases.
(ii) Purchaser shall be responsible for (y) all leasing and brokerage
commissions, tenant improvement costs and expenses and tenant "buy-out" or lease
surrender costs with respect to all leases executed in accordance with the terms
of this Agreement after the date hereof, and with respect to any and all
renewals, expansions and/or extensions of Leases exercised after May 1, 1996,
and (z) the items listed in (a), (b) and (c) in subsection (i) above.
(iii) Upon the execution of any leases prior to the fifth (5th)
anniversary of the Closing demising up to 62,520 square feet of space at the
Property which is vacant at the Closing (which vacant space shall be deemed to
include the space demised under the Jefferson Lease and the Additional Space
Lease (as said terms are hereinafter defined)), Seller shall pay (a) the actual
cost of tenant improvements to be made and/or credited on account of any such
lease; provided, however, that in no event shall Seller's obligation hereunder
be in excess of Thirty Dollars ($30.00) a square foot for tenant improvement
costs for any such lease, and (b) a full standard (and override, if applicable)
New Jersey brokerage commission due and payable with respect to such lease;
provided, however, that Seller shall only be responsible for paying any such
brokerage commission for the period from the execution of such lease, and
expiring on the ten (10) year anniversary of the Closing. In the event of
Seller's failure to make any payment required pursuant to the terms of this
subsection within five (5) business days of written notice thereof, Purchaser
shall have the right to off-set the amount of the payment stipulated in
Purchaser's notice on a dollar-for-dollar basis against the next due payment of
interest or principal to be made by Purchaser under the Purchase Money Loan.
(iv) Seller's obligations with respect to this Section 4.2.8 shall be
without regard to the limitation of Seller's liability set forth in Section 7.4
hereof.
IV.2.9. Employees. Salaries, wages, accrued vacation days and
any other fringe benefits (including, social security, unemployment
compensation, employee disability insurance, accrued sick days, "welfare" and
pension fund contributions, payments and deposits, if any) of those persons
employed by Seller or Institutional Realty Management, LLC (the "Managing
Agent") at the Property, who are listed on Schedule 7 attached hereto (as such
Schedule may be revised to reflect the addition or withdrawal of employees in
connection with the normal operation of the Property).
IV.2.10. Fuel. The value of fuel stored on the Property by
Seller, if any, at Seller's most recent cost, including any taxes, on the basis
of a reading made within ten (10) days prior to the Closing by Seller's
supplier.
IV.2.11. Contracts. Charges and payments under transferable
Contracts or permitted renewals or replacements thereof.
IV.2.12. Permit Fees. Annual municipal permit and inspection
fees.
IV.2.13. Taxes. Seller shall pay all real estate, personal
property and "excess profit" taxes, special assessments and payroll related
taxes (including any interest or penalties thereon) due and payable for the
period prior to the Closing with respect to the Property. Seller hereby agrees
and covenants that it shall file all tax returns and reports required to be
filed prior to the Closing with respect to the Property, and shall reasonably
cooperate with Purchaser in the filing of tax reports or returns which are to be
filed by Purchaser with respect to the Property for the fiscal year in which the
Closing occurs. Seller's obligations with respect to this Section 4.2.13 shall
be without regard to the limitation of Seller's liability set forth in Section
7.4 hereof.
IV.2.14. Method of Calculation. For purposes of calculating
prorations, Purchaser shall be deemed to be in title to the Property, and,
therefore, entitled to the income therefrom and responsible for the expenses
thereof for the entire day upon which the Closing occurs. All such prorations
shall be made on the basis of the actual number of days of the month which shall
have elapsed as of the day of the Closing and based upon the actual number of
days in the month and a three hundred sixty five (365) day year. The amount of
such prorations shall be initially performed at Closing but shall be subject to
adjustment in cash after the Closing as and when complete and accurate
information becomes available, if such information is not available at the
Closing. Seller and Purchaser agree to cooperate and use their best efforts to
make such adjustments sixty (60) days after the Closing. Except as set forth in
this Section 4.2, all items of income and expense which accrue for the period
prior to the Closing will be for the account of Seller and all items of income
and expense which accrue for the period on and after the Closing will be for the
account of Purchaser.
IV.2.15. Survival. The provisions of this Section 4.2 shall
survive the Closing.
IV.3. Closing Costs. All transfer taxes and expenses on the
deed and any state or county documentary stamps or transfer taxes on the deed
shall be paid by Seller. Seller shall pay all customary recordation charges,
clerk's fees, taxes, transfer, and recording charges and one-half (1/2) of any
fees charged by the Escrow Agent. Purchaser shall pay all title insurance
premiums, title examination fees, survey costs and one-half (1/2) of any fees
charged by the Escrow Agent. Each party shall be responsible for its own
attorney's fees.
V. ARTICLE V.
Purchaser's Right of Inspection; Feasibility Period
V.1. Right to Evaluate. For a period ending at 10:00 p.m. local time on
the date which is twenty (20) days following the delivery by Seller to Purchaser
of either the ROEA Waiver Notice (as hereinafter defined) or a copy of the
Existing Lender's Consent (as hereinafter defined) (the "Feasibility Period"),
Purchaser shall have the right, at its sole cost and expense, to review all
property matters, including existing contracts, leases, engineering and
environmental reports, development approval agreements, and any other
information which Purchaser deems reasonably necessary in order to prudently
consummate the transactions contemplated by this Agreement and to meet with the
Seller, the Managing Agent and their representatives regarding the Property (the
"Due Diligence Review"). It is understood that Purchaser shall have unlimited
reasonable access to the Property and all records and other information
pertaining thereto in the possession or within the control of Seller and its
Managing Agent for the purpose of conducting its investigations. The conduct of
Purchaser's Due Diligence Review shall be governed by the terms and provisions
contained in that certain letter agreement dated July 24, 1996, between Jones
Lang Wootton Realty Advisors and Purchaser (the "Access Agreement").
V.2. Independent Examination. Purchaser hereby acknowledges that it has
been, or will have been given, prior to the termination of the Feasibility
Period, a full, complete and adequate opportunity to make such legal, factual
and other determinations, analyses, inquiries and investigations as Purchaser
deems necessary or appropriate in connection with the acquisition of the
Property. Purchaser is relying upon its own independent examination of the
Property and all matters relating thereto and not upon any statements of Seller
(excluding the matters represented by Seller in this Agreement) or of any
officer, director, employee, agent or attorney of Seller with respect to
acquiring the Property. Seller shall not be deemed to have represented or
warranted the completeness or accuracy of any studies, investigations and
reports heretofore or hereafter furnished to Purchaser, except as specifically
set forth in this Agreement. The provisions of this Section 5.2 shall survive
the Closing and/or termination of this Agreement.
V.3. Termination Right. In the event that Purchaser determines that it
does not desire to acquire the Property, Purchaser shall have the right,
exercisable by written notice (the "Termination Notice") to Seller delivered at
any time prior to the expiration of the Feasibility Period to terminate this
Agreement. (For purposes of this Section 5.3, the delivery by Purchaser (or its
counsel) of the Termination Notice solely to Seller's counsel identified in
Section 16.1 hereof shall be deemed to satisfy the notice requirements set forth
in said Section 16.1 with respect to the delivery of such notice to Seller.) In
addition, this Agreement shall terminate, unless on or before the expiration of
the Feasibility Period, Purchaser shall deliver a written notice (the "Waiver
Notice") to Seller waiving Purchaser's right to terminate this Agreement
pursuant to this Section 5.3. Upon the delivery of a Termination Notice, or the
failure of Purchaser to deliver a Waiver Notice prior to the end of the
Feasibility Period, this Agreement shall terminate, the Deposit shall be
returned to Purchaser and neither party hereto shall have any further rights or
obligations pursuant hereto, subject to the Surviving Termination Obligations
(as defined in Section 16.11 hereof. If Purchaser delivers the Waiver Notice,
the termination right described in this Section 5.3 shall be immediately null
and void and of no further force or effect.
V.4. Copies of Reports. As additional consideration for the transaction
contemplated herein, if Purchaser terminates this Agreement, Purchaser agrees
that it will provide to Seller, within five (5) days following a written request
therefore, copies of any and all third-party reports, tests or studies relating
to the Property, including but not limited to those involving environmental
matters; provided, however, Purchaser shall not be required to deliver any such
reports, tests or studies which by their terms are privileged. The provisions of
this Section 5.4 shall survive the termination of this Agreement.
VI. ARTICLE VI.
Title and Survey Matters
VI.1. Title.
VI.1.1. Commitment. Purchaser and Seller have received a title
insurance search and commitment for an owner's title insurance policy (the
"Title Commitment") from First American Title Insurance Company of New York (the
"Title Company"), setting forth the status of title to the Property and any
defects in or objections or exceptions to the title, together with true and
correct copies of all instruments giving rise to such defects, objections or
exceptions. Purchaser shall forward a copy of any updates of such commitment to
the Seller's attorneys promptly upon receipt. Within ten (10) days after the
delivery of any title updates from the Title Company, Purchaser shall notify
Seller's attorney of any defects, objections or exceptions in the title to the
Property appearing in such report which Purchaser is not required to accept
under the terms of this Agreement.
VI.1.2. Elimination of Liens. If any defects, objections or
exceptions in the title to the Property appear in such commitment (other than
the Permitted Exceptions) which Purchaser is not required to accept under the
terms of this Agreement, the Seller may, at its election, undertake to eliminate
such unacceptable defects, objections or exceptions, it being agreed that Seller
shall have no obligation to incur any expense in connection with curing such
defects, objections or exceptions, other than (1) judgments against Seller, or
(2) mortgages or other liens which can be satisfied by payment of a liquidated
amount; provided, however, except as hereinafter set forth, Seller's obligation
to cure such judgments or liens shall be limited to an amount not to exceed
$1,000,000. Seller, in its discretion, may adjourn the Closing for up to sixty
(60) days in order to eliminate unacceptable defects, objections or exceptions.
If Seller is unable to eliminate all unacceptable defects, objections or
exceptions in accordance with the terms of this Agreement on or before such
adjourned date for the Closing, Purchaser shall elect either to (i) terminate
this Agreement by notice given to the Seller, in which event the provisions of
Section 6.2 shall apply, or (ii) accept title subject to such unacceptable
defects, objections or exceptions and receive no credit against or reduction of
the Purchase Price. Except as may be required in connection with the Light Rail
Line (as hereinafter defined), Seller hereby agrees and covenants that it shall
not voluntarily place any defects, objections or exceptions on title to the
Property from and after the date of issuance of the Title Commitment.
VI.1.3. At the Closing, Seller shall satisfy and obtain the
release of (i) the Property from that certain Second Mortgage Loan currently
encumbering the Property in the original principal amount of $75,000,000 made by
Boston Safe and Deposit Company, as Trustee of the U S West Pension Trust ("U S
West"), to Seller (and related parties) which Second Mortgage Loan was made on
December 5, 1995 (the "Second Mortgage Loan") and (ii) the BT Parcel from the
lien of the Existing Financing, which release shall include the satisfaction of
(x) that certain Promissory Note dated as of December 5, 1995, in the amount of
$10,000,000, from the Seller (and related parties) to Northwestern and (y) that
certain Promissory Note dated as of December 5, 1995, in the amount of
$10,000,000, from Seller (and related parties) to Principal, which notes were
delivered in connection with the Existing Financing. At the Closing, Seller
shall (i) cause the holder of the Second Mortgage Loan to deliver a release of
mortgage and related financing documents, in recordable form and on such
holder's standard form of release, releasing the Property from the lien of the
Second Mortgage Loan and (ii) cause the Existing Lenders to deliver a partial
release of mortgage and related financing documents, in recordable form and on
such holder's standard form of release, releasing the BT Parcel from the lien of
the Existing Financing. Any fees, prepayment penalties or mandatory prepayment
amounts (collectively, the "fees") which are set forth in the Existing Loan
Documents or the Second Mortgage and which are imposed by either the Existing
Lenders or U S West in connection with the delivery of the releases described
above shall by payable by Seller. Seller hereby agrees to pay any such fees at
or prior to the Closing. Notwithstanding anything to the contrary contained
herein, Seller shall pay any and all costs, expenses, fees and/or prepayment
amounts imposed by U S West with respect to the release of the Second Mortgage.
VI.1.4. Any unpaid taxes, water charges, sewer rents and
assessments, together with the interest and penalties thereon to a date not less
than ten (10) business days following the Closing Date (in each case subject to
any applicable apportionment), and any mortgages or other liens created by
Seller which can be satisfied by payment of a liquidated amount and judgments
against Seller, which the Seller is obligated to pay and discharge pursuant to
the terms of this Agreement, together with the cost of recording or filing any
instruments necessary to discharge such liens and such judgments, may be paid
out of the proceeds of the Cash Portion of the Purchase Price payable at the
Closing to Seller against which such matter exists. Seller hereby agrees to
deliver to Purchaser, on the Closing Date, instruments in recordable form
sufficient to discharge any such mortgages or other liens which can be satisfied
by payment of a liquidated amount and judgments, which Seller is obligated to
pay and discharge pursuant to the terms of this Agreement. Upon request of
Seller, delivered to Purchaser no later than two (2) business days prior to the
Closing, Purchaser shall provide at the Closing separate certified checks, or
bank checks for the foregoing payable to the order of the holder of any such
lien, charge, or judgment, or a wire transfer of federal funds as Seller shall
direct, in an aggregate amount not to exceed the Cash Portion of the Purchase
Price payable to Seller, as adjusted for apportionments required under this
Agreement, payable at the Closing.
VI.1.5. Affidavits. If the Commitment discloses judgments,
bankruptcies or other returns against other persons having names the same as or
similar to that of Seller, Seller, on request, shall deliver to the Title
Company affidavits showing that such judgments, bankruptcies or other returns
are not against Seller, or any affiliates. Upon request by Purchaser, Seller
shall deliver any affidavits and documentary evidence as are reasonably required
by the Title Company to eliminate the standard or general exceptions on the ALTA
form Owner's Policy.
VI.1.6. Permitted Exceptions. Seller shall convey and
Purchaser shall accept fee simple title to the Real Property subject only to (a)
those matters set forth on Exhibit I attached hereto and (b) all matters shown
on that certain survey (the "Survey") dated as of August 21, 1996, prepared by
John Zanetakos Associates, Inc. (collectively, the "Permitted Exceptions").
VI.2. Seller's Inability to Convey Title. If Seller is unable to convey
title in accordance with the terms of this Agreement. Purchaser elects to
terminate this Agreement, the Deposit shall be returned to Purchaser, and this
Agreement shall terminate and neither party to this Agreement shall have any
further rights or obligations hereunder other than the Surviving Termination
Obligations.
VI.3. Survey. Purchaser and Seller have received a copy of the Survey.
Purchaser shall furnish a copy of any updates of the Survey to Seller's
attorneys and the Title Company promptly upon receipt of the same. Within ten
(10) days after the delivery of any updates of the Survey to Purchaser,
Purchaser shall notify Seller's attorney of any defects, objections or
exceptions in the title to the Property appearing in such update to the Survey
which Purchaser is not required to accept under the terms of this Agreement.
Seller may, on or before the Closing Date, have any such unacceptable matters
removed by the surveyor and cause the surveyor to recertify the Survey to
Purchaser, and such other parties designated by Purchaser; provided, however, in
no event will Seller be obligated to incur costs to do so. In the event Seller
elects not to remove such unacceptable matter, Purchaser then shall elect, by
giving written notice to Seller within five (5) days thereafter, (x) to
terminate this Agreement, in which event the provisions of Section 6.2 shall
apply, or (y) to waive its disapproval of such exceptions, in which case such
exceptions shall then be deemed to be Permitted Exceptions.
VII. ARTICLE VII.
Representations and Warranties of Seller
VII.1. Seller's Representations. Seller represents and warrants that
the following matters are true and correct as of the date hereof with respect to
the Property:
VII.1.1. Authority. Each entity constituting Seller is a
limited partnership, duly organized, validly existing and in good standing under
the laws of the State of New Jersey. This Agreement has been duly authorized,
executed and delivered by each entity constituting Seller, is the legal, valid
and binding obligation of each Seller, and does not violate any provision of any
agreement or judicial order to which each Seller is a party or to which each
such Seller is subject. All documents to be executed by Seller which are to be
delivered at Closing, at the time of Closing will be duly authorized, executed
and delivered by Seller, at the time of Closing will be legal, valid and binding
obligations of each Seller, and at the time of Closing will not violate any
provision of any agreement or judicial order to which such Seller is a party or
to which such Seller is subject.
VII.1.2. Bankruptcy or Debt of Seller. Seller represents and
warrants to Purchaser that none of the entities constituting Seller has made a
general assignment for the benefit of creditors, filed any voluntary petition in
bankruptcy or suffered the filing of an involuntary petition by Seller's
creditors, suffered the appointment of a receiver to take possession of all, or
substantially all, of such Seller's assets, suffered the attachment or other
judicial seizure of all, or substantially all, of such Seller's assets, admitted
in writing its inability to pay its debts as they come due or made an offer of
settlement, extension or composition to it creditors generally.
VII.1.3. Environmental Reports and Laws. (i) Seller has
received no written notice from any governmental authority that the Property is
in violation of any federal, state and local laws, ordinances, rules and
regulations applicable to the Property relating to hazardous waste, chemical
substances or mixtures or hazardous, toxic, dangerous or unhealthy substances or
conditions (collectively, "Hazardous Substances"), whether such law is; (x)
criminal or civil, (y) federal, state or local, or (z) statutory or
administrative regulation (collectively, "Environmental Laws"), which violation
has not been corrected.
(ii) Seller has delivered to Purchaser a true and
complete copy of that certain report dated October 12, 1995 prepared by
McLaren/Hart, entitled Phase I Environmental Assessment.
VII.1.4. CERCLA. No ss. 104(e) informational request has been
received by Seller with respect to the Property issued pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 U.S.C. ss. 1251 et seq.
VII.1.5. Environmental Rights Act. Seller has not received a
written notice of intention from any governmental authority concerning the
Property to commence suit pursuant to the New Jersey Environmental Rights Act,
N.J.S.A. 2A:35A-1 et seq.
VII.1.6. No Underground Storage Tanks. To the best of Seller's
knowledge, except as set forth on Exhibit X attached hereto, there are no
underground storage tanks at the Property.
VII.1.7. Sanitary Landfill Facility. The Property has not been
used by Seller as a sanitary landfill facility as defined in the Solid Waste
Management Act, N.J.S.A. 13:1E-1 et seq.
VII.1.8. Wetlands. Seller has no knowledge that any part of
the Real Property has been designated as wetlands under any federal, state or
local law or regulation or by any governmental agency. Except as shown on the
survey of the Real Property prepared by John Zanetakos Associates, Inc. and
delivered to Purchaser pursuant to Section 5.2 hereof, the Real Property is not
located in a flood plain.
VII.1.9. Utilities. The Real Property is served by public
water and sewage systems, gas and electricity. Seller has not received any
written notice from any utility of its inability to provide the service
necessary for the current uses of the Improvements or for general office
purposes; all installations currently in place connecting the Improvements to
the utility lines serving the Real Property are fully paid for.
VII.1.10. Foreign Person. Seller is not a foreign person
within the meaning of Section 1445(f) of the Internal Revenue Code, and Seller
agrees to execute any and all documents necessary or required by the Internal
Revenue Service or Purchaser in connection with such declaration(s).
VII.1.11. Leases. (i) Seller has delivered to Purchaser true
and correct copies of the Leases and the Ground Leases. Exhibit B attached
hereto contains a description of all Leases and tenancies and all amendments or
extensions thereto, and Exhibit B-1 attached hereto contains a description of
all Ground Leases and all amendments thereto, affecting the Property as of the
date of this Agreement. Except as set forth on Exhibit B and Exhibit B-1, there
are no leases, ground leases, licenses or other occupancy agreements affecting
the Property to which Seller is a party or bound.
(ii) Seller has not received notice of a default under any of
the Leases. Except as set forth on Schedule 1 attached hereto, Seller has not
sent any notices of default (which remain outstanding) to any tenant under any
Lease.
(iii) Except with respect to the Leases with Thomson
Information Systems and Dow Jones/Telerate, all work, alterations, improvements
or installations required to be made by Seller under the Leases have been
completed and, except as contained in the Leases, there is no agreement with any
tenant for the performance of any work to be done in the future. Seller shall be
responsible for all costs and expenses associated with the completion of the
work required to be performed by Seller pursuant to the terms of the Dow
Jones/Telerate and Thomson Information Systems Leases. All bills and claims for
labor performed and materials furnished to or for the benefit of the
Improvements which are the responsibility of Seller will be paid in full on or
before the Closing Date. Seller's obligations with respect to this Section
7.1.11(iii) shall survive the Closing and shall be without regard to the
limitation of Seller's liability set forth in Section 7.4 hereof.
(iv) Except as set forth on Schedule 2 attached hereto, there
are no brokerage commissions or tenant improvement costs and expenses affecting
the Improvements currently due or payable with respect to the Leases.
VII.1.12. Contracts. Seller has delivered to Purchaser true
and complete copies of the Contracts. There are no Contracts other than those
listed on Schedule 3 to which the Property is subject and which would remain in
effect after the Closing Date. Except as set forth on Schedule 3, all Contracts
may be terminated on thirty (30) days or less notice without penalty.
VII.1.13. Condemnation. Seller has not received any written
notice of any existing, pending or contemplated condemnation, eminent domain,
environmental or similar proceeding with respect to the Real Property, or any
portion thereof.
VII.1.14. Tax Bills/Assessments. Seller has delivered true and
complete copies of all tax bills for the current tax year with respect to the
Property received to date by Seller. Seller does not currently pay any special
assessments with respect to the Property on an installment basis. Seller has
received no written notices of (i) any tax increase (other than shown on the tax
bills) or special assessment with respect to the Property, or (ii) except in
connection with the Light Rail Line, any proposed change(s) in any road or
grades with respect to the roads providing a means of ingress and egress to the
Improvements.
VII.1.15. Tax Appeal Proceedings. Except as set forth on
Schedule 4 attached hereto, Seller has not filed, and has not retained anyone to
file, notices of protest against, or to commence actions to review, real
property tax assessments against the Real Property. Purchaser hereby agrees and
acknowledges that Seller shall have the right, after the Closing, to continue to
prosecute any tax appeals or tax abatement proceedings with respect to the
Property commenced by Seller prior to the Closing Date. If any such tax appeals
of tax abatement proceedings result in tax refunds or rebates from the
applicable taxing authorities then, after deduction for Seller's reasonable
costs and expenses (including reasonable attorneys' fees) incurred in connection
with such tax appeal or abatement proceedings (i) Seller shall be entitled to
receive any such refund or rebate with respect to the period prior to the
Closing and (ii) Purchaser shall be entitled to receive any such refund or
rebate with respect to the period from and after the Closing. The party which
actually receives such tax refunds or rebates from the taxing authorities shall
promptly notify the other party thereof and pay to such party the amounts due to
such party pursuant to the terms hereof. The terms and provisions of this
Section 7.1.15 shall survive the Closing.
VII.1.16. Tax Matters. Seller has or will have paid all real
estate, personal property and "excess profit" taxes, special assessments and
payroll related taxes (including any interest and penalties thereon) due and
payable for the period prior to the Closing and filed or will have filed all tax
returns and reports required to be filed prior to the Closing with respect to
the Property. There are no tax audits or other tax proceedings by any
governmental body pending or, to the actual knowledge of Seller, threatened,
with respect to the Property.
VII.1.17. Permits and Licenses. Seller has delivered to
Purchaser true and complete copies of the Permits and Licenses (to the extent
such are in Seller's possession). Seller has received no written notice (other
than written notices that have been subsequently rescinded) that any of the
Permits and Licenses are not in full force and effect or that there is a
violation of such Permits and Licenses. No formal application by Seller
(excluding those which may relate to tenant work) for any consent,
authorization, variance, waiver, approval, license or permit with respect to the
Real Property has been denied or withdrawn during the twelve (12) month period
preceding the date hereof nor is any application pending except as set forth on
Schedule 5 attached hereto. Seller will pay all fees which are due in connection
with the Permits and Licenses for the period prior to the Closing. No such fees
are being paid on an installment basis.
VII.1.18. Insurance Policies. Schedule 6 annexed hereto and
made a part hereof is a true, correct and complete schedule of all insurance
policies maintained by Seller with respect to the Real Property and the amount
of coverage afforded by each such policy. All premiums due (or in the event that
such premiums are payable in installments, all installments of such premium
payments due) on such insurance policies have been fully paid. To the best of
Seller's knowledge, Seller has not received any written notice that it is in
default under any insurance policy and to the best of Seller's knowledge, Seller
has not received any written request for the performance of any work or
alteration with respect to the Property from any insurance company or Board of
Fire Underwriters.
VII.1.19. Legal Action Against Seller. There are no judgments,
orders, or decrees of any kind against any entity constituting a Seller unpaid
or unsatisfied of record, nor any legal action, suit or other legal or
administrative agency action relating to the Property which would adversely
affect the Property for its present use or affect Seller's ability to perform
its obligations under this Agreement, nor is Seller aware of any threatened
legal action, suit or other legal or administrative proceeding relating to the
Property, or any state of facts which might result in any such action, suit or
other proceeding.
VII.1.20. Compliance with Existing Laws. Seller has not
received notice of any violations of any law, municipal or other governmental
ordinances, orders, rules, regulations or requirements or of any recorded
restriction, covenant, or agreement affecting the Property, which have not been
corrected.
VII.1.21. No Consents or Approval. To the best of Seller's
knowledge, except for (i) the holders of the Existing Financing and (ii) the
City Consent (as hereinafter defined) there are no consents or approvals
required of any third party or governmental entity necessary to consummate the
transaction contemplated by this Agreement.
VII.1.22. Rent Roll. The rent roll attached hereto as Exhibit
J (the "Rent Roll") is a complete and accurate rent roll of the Property,
listing the date of commencement, term, base or fixed rent, additional rent and
security deposit for each Lease.
VII.1.23. Employees. Schedule 7 attached hereto is a true and
complete list of all employees and independent security guards presently
employed at the Real Property and their respective union affiliations (if any),
salaries, wages, accrued vacation days and other fringe benefits (including
social security, unemployment compensation, employee disability insurance,
accrued sick days, "welfare" and pension fund contributions, payments and
deposits, if any). Except as indicated on Schedule 7 hereto there are no union
contracts or collective bargaining agreements in effect with respect to any of
the employees employed at the Real Property.
VII.1.24. Financial Statements. Seller has delivered to
Purchaser true and complete copies of the audited financial statements of the
Property for the years ended December 31, 1994 and 1995. Since December 31,
1995, there has been no material adverse change in the financial condition of
the Property.
VII.1.25. Existing Estoppel Certificates. The estoppel
certificates previously delivered to Purchaser by Seller are true and complete
copies of the estoppel certificates received by Seller and delivered to the
Existing Lenders in connection with the Existing Financing.
VII.1.26. Existing Loan Documents. Seller has delivered to
Purchaser true and complete copies of the loan documents (the "Loan Documents")
executed by Seller and delivered to the Existing Lenders in connection with the
Existing Financing. Seller hereby covenants and agrees that it shall not modify
or amend the Loan Documents.
VII.1.27. Square Harborside Parking Litigation. (i) The Square
Harborside Parking Litigation (as hereinafter defined) does not affect the
continued operation of the Property and (ii) Seller is the defendant under such
litigation and (iii) Purchaser shall not incur any liability with respect
thereto.
VII.1.28. Intentionally Deleted.
VII.1.29. Seller's Knowledge. For purposes of this Agreement
and any document delivered at Closing, whenever the phrases "to the best of
Seller's knowledge", "to the current, actual knowledge of Seller" or the
"knowledge" of Seller or words of similar import are used, they shall be deemed
to refer to the actual knowledge only, and not any implied, imputed or
constructive knowledge, without any independent investigation having been made
or any implied duty to investigate, of John Marazzo and Victoria W. Kahn.
VII.2. Change in Representation/Waiver. Notwithstanding
anything to the contrary contained herein, Purchaser acknowledges that Purchaser
shall not be entitled to rely on any representation made by Seller in this
Article VII to the extent, prior to Closing, Purchaser shall have or shall
obtain actual knowledge of any information that was contradictory to such
representation or warranty; provided, however, if Purchaser obtains actual
knowledge prior to Closing that there is a breach of any of the representations
and warranties made by Seller above or learns of any pending legal proceedings
or administrative actions or any violations of existing laws, ordinances,
regulations and building codes affecting the Property, then Purchaser may, at
its option, by sending to Seller written notice of its election either to (i)
terminate this Agreement or (ii) waive such breach and/or conditions and proceed
to Closing with no adjustment in the Purchase Price and Seller shall have no
further liability as to such matter thereafter. In the event Purchaser
terminates this Agreement for the reasons set forth above, the Deposit shall be
immediately returned to Purchaser and neither Purchaser nor Seller shall
thereafter have any other rights or remedies hereunder other than the Surviving
Termination Obligations. In furtherance thereof, Purchaser and Seller expressly
agree that Seller shall have no liability with respect to any of the foregoing
representations and warranties to the extent that, prior to the Closing,
Purchaser obtains actual knowledge (from whatever source, including, without
limitation the property manager, the materials furnished to Purchaser and the
tenant estoppel certificates delivered pursuant to Article 10.2.8 below, as a
result of Purchaser's due diligence tests, investigations and inspections of the
Property, or disclosure by Seller or Seller's agents and employees) that
contradicts any of the foregoing representations and warranties, or renders any
of the foregoing representations and warranties untrue or incorrect, and
Purchaser nevertheless consummates the transaction contemplated by this
Agreement.
VII.2.1. Purchaser's Knowledge. For purposes of this Agreement
and any document delivered at Closing, whenever the phrases "to be best of
Purchaser's knowledge", "to the current, actual knowledge of Purchaser" or the
"knowledge" of Purchaser or words of similar import are used, they shall be
deemed to refer to the actual knowledge only, and not any implied, imputed or
constructive knowledge, without any independent investigation having been made
or any implied duty to investigate, of Thomas A. Rizk, John R. Cali, Barry
Lefkowitz, James Nugent, Roger W. Thomas, Philip Cali or A. Paul Bernheim.
VII.3. Survival. The express representations and warranties made in
this Agreement by Seller shall not merge into any instrument of conveyance
delivered at the Closing and all of the representations and warranties made in
this Agreement by Seller shall survive the Closing for a period of six (6)
months; provided, however, that any action, suit or proceeding with respect to
the truth, accuracy or completeness of such representations and warranties shall
be commenced, if at all, on or before the date which is six (6) months after the
date of the Closing and, if not commenced on or before such date, thereafter
shall be void and of no force or effect. The terms and provisions of this
Section 7.3 shall survive the Closing.
VII.4. Limitation of Liability. Notwithstanding anything to the
contrary or inconsistent in this Agreement, except as otherwise specifically
provided in this Agreement, (i) the aggregate liability of Seller arising
pursuant to or in connection with the representations and warranties of Seller
and/or the agreements or certificates or affidavits of Seller set forth in or
delivered pursuant to this Agreement shall not exceed One Million Dollars
($1,000,000) and (ii) Seller shall have no liability to Purchaser under this
Agreement, or otherwise, with respect to the representations and warranties made
by Seller herein unless Seller had actual knowledge that any such representation
or warranty is not true and correct as of the date of the Closing. Purchaser
hereby expressly agrees and acknowledges that the liability of Seller set forth
in the preceding sentence shall be Purchaser's sole and exclusive remedy after
the Closing, and Purchaser expressly waives, relinquishes and releases any right
of rescission it may have against Seller. The terms and provisions of this
Section 7.4 shall survive Closing and/or termination of this Agreement.
VIII. ARTICLE VIII.
Representations and Warranties of Purchaser
Purchaser represents and warrants to Seller that the following
matters are true and correct as of the date hereof.
VIII.1. Authority. Purchaser is a corporation duly organized and
validly existing under the laws of the State of Maryland. This Agreement has
been duly authorized, executed and delivered by Purchaser, is the legal, valid
and binding obligation of Purchaser, and does not violate any provision of any
agreement or judicial order to which Purchaser is a party or to which Purchaser
is subject. All documents to be executed by Purchaser which are to be delivered
at Closing, at the time of Closing will be duly authorized, executed and
delivered by Purchaser, at the time of Closing will be legal, valid and binding
obligations of Purchaser, and at the time of Closing will not violate any
provision of any agreement or judicial order to which Purchaser is a party or to
which Purchaser is subject.
VIII.2. Bankruptcy or Debt of Purchaser. Purchaser represents and
warrants to Seller that Purchaser has not made a general assignment for the
benefit of creditors, filed any voluntary petition in bankruptcy or suffered the
filing of an involuntary petition by Purchaser's creditors, suffered the
appointment of a receiver to take possession of all, or substantially all, of
Purchaser's assets, suffered the attachment or other judicial seizure of all, or
substantially all, of Purchaser's assets, admitted in writing its inability to
pay its debts as they come due or made an offer of settlement, extension or
composition to its creditors generally.
VIII.3. No Financing Contingency. It is expressly acknowledged by
Purchaser that this transaction is not subject to any financing contingency, and
no financing for this transaction shall be provided by Seller, except for the
Purchase Money Loan.
VIII.4. ERISA Compliance. None of the assets used by Purchaser to
acquire the Property constitutes assets of any (i) "employee benefit plan" (as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended), (ii) "plan" (as defined in Section 4975(e)(1) of the Internal
Revenue Code of 1986, as amended) or (iii) entity whose assets are deemed to
include or constitute assets of any such "employee benefit plan" or "plan."
VIII.5. Purchaser's Acknowledgment. Purchaser acknowledges and agrees
that, except as expressly provided in this Agreement, Seller has not made, does
not make and specifically disclaims any representations, warranties, promises,
covenants, agreements or guaranties of any kind or character whatsoever, whether
express or implied, oral or written, past, present or future, of, as to,
concerning or with respect to (a) the nature, quality or condition of the
Property, including, without limitation, the water, soil and geology, (b) the
income to be derived from the Property, (c) the suitability of the Property for
any and all activities and uses which Purchaser may conduct thereon, (d) the
compliance of or by the Property or its operation with any laws, rules,
ordinances or regulations of any applicable governmental authority or body,
including, without limitation, the Americans with Disabilities Act and any rules
and regulations promulgated thereunder or in connection therewith, (e) the
habitability, merchant ability or fitness for a particular purpose of the
Property, or (f) any other matter with respect to the Property, and specifically
that Seller has not made, does not make and specifically disclaims any
representations regarding solid waste, as defined by the U.S. Environmental
Protection Agency regulations at 40 C.F.R., Part 261, or the disposal or
existence, in or on the Property, of any hazardous substance, as defined by the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended, and applicable state laws, and regulations promulgated thereunder.
Purchaser further acknowledges and agrees that, except as expressly provided in
this Agreement, having been given the opportunity to inspect the Property,
Purchaser is relying solely on its own investigation of the Property and not on
any information provided or to be provided by Seller. Purchaser further
acknowledges and agrees that any information provided or to be provided with
respect to the Property was obtained from a variety of sources and that Seller
has not made any independent investigation or verification of such information.
Purchaser further acknowledges and agrees that, except as expressly provide in
this Agreement, and as a material inducement to the execution and delivery of
this Agreement, the sale of the Property as provided for herein is and on an "as
is, where is" condition and basis. Purchaser acknowledges, represents and
warrants that Purchaser is not in a significantly disparate bargaining position
with respect to Seller in connection with the transaction contemplated by this
Agreement; that Purchaser freely and fairly agreed to this acknowledgment as
part of the negotiations for the transaction contemplated by this Agreement; and
that Purchaser is represented by legal counsel in connection with this
transaction and Purchaser has conferred with such legal counsel concerning this
waiver. The terms and provisions of this Section 8.5 shall survive the Closing
and/or termination of this Agreement.
VIII.6. Survival. The express representations and warranties made in
this Agreement by Purchaser shall not merge into any instrument or conveyance
delivered at the Closing and all of the representations and warranties made in
this Agreement by Purchaser shall survive the Closing for a period of six (6)
months; provided, however, that any action, suit or proceeding with respect to
the truth, accuracy or completeness of all such representations and warranties
(except for the representation and warranty set forth in Section 8.4 hereof)
shall be commenced, if at all, on or before the date which is six (6) months
after the date of the Closing and, if not commenced on or before such date,
thereafter shall be void and of no force or effect. The terms and provisions of
this Section 8.6 shall survive the Closing.
IX. ARTICLE IX.
Seller's Interim Operating Covenants
IX.1. Operations. Seller agrees to continue to operate, manage and
maintain the Improvements through the Closing Date in the ordinary course of
Seller's business and substantially in accordance with Seller's present
practice, subject to ordinary wear and tear and further subject to Article XII
of this Agreement.
IX.2. Maintain Insurance. Seller agrees to maintain until the Closing
Date fire and extended coverage insurance on the Property which is at least
equivalent in all material respects to the insurance policies covering the Real
Property and the Improvements as of the date hereof.
IX.3. Personal Property. Seller agrees not to transfer or remove any
Personal Property from the Improvements after the date hereof except for repair
or replacement thereof. Any items of Personal Property replaced after the date
hereof shall be promptly installed prior to Closing and shall be of
substantially similar quality to the item of Personal Property being replaced.
IX.4. No Sales. Except for the execution of tenant leases pursuant to
the terms of this Agreement, Seller agrees that it shall not convey any interest
in the Property to any third party.
IX.5. Tenant Leases.
IX.5.1. Seller shall not, from and after the date hereof
through the end of the Feasibility Period, (i) enter into a new tenant lease,
(ii) modify, renew, grant any consent or rent abatement or waive any material
rights under the Leases (except pursuant to the exercise by a tenant of a
renewal or extension option contained in such tenant's existing Lease), (iii)
terminate any Lease, or (iv) accept a surrender or consent to the termination or
cancellation of any Lease, unless Seller first notifies Purchaser in writing, at
least three (3) business days in advance of the action intended to be taken by
Seller. Seller shall be authorized to undertake any such action unless Purchaser
delivers the Waiver Notice to Seller prior to the expiration of such three (3)
business day period. In the event that Seller shall enter into, modify, renew,
grant concessions or terminate a tenant lease, it shall promptly provide
Purchaser with a copy of any such lease, amendment or agreement. Seller
covenants and agrees that it shall timely provide Purchaser with drafts of any
pertinent documentation in connection with the above leasing matters and shall
keep Purchaser informed of all substantive negotiations and discussions with
respect to such leasing matters on an on-going basis.
IX.5.2. Seller shall not, from and after the expiration of the
Feasibility Period, and the delivery of the Waiver Notice, (i) modify, renew,
grant any consent or waive any material rights under the Leases (except pursuant
to the exercise by a tenant of a renewal or extension option contained in such
tenant's existing Lease), (ii) terminate any tenant lease, (iii) enter into a
new tenant lease, or (iv) accept a surrender or consent to the termination or
cancellation of any Lease, in each case without the prior written approval of
Purchaser which in each case shall not be unreasonably withheld or conditioned,
and which shall be deemed granted if Purchaser fails to respond to a request for
approval within three (3) business days after receipt of the request therefor
together with a summary of lease forms and credit information of the proposed
tenant, if the intended action is the execution of a new tenant lease.
IX.5.3. Seller covenants and agrees that any action taken by
Seller with respect to the matters set forth in this Section 9.5 shall be made
in good faith and in the ordinary course of business.
IX.6. Intentionally Deleted.
IX.7. Intentionally Deleted.
IX.8. Tenant Estoppels. Seller shall, promptly following its receipt of
the Waiver Notice, deliver to each tenant under a lease, for such tenant's
execution, an estoppel certificate certified to Purchaser and the applicable
Permitted Assignee(s) (whose names have been provided to Seller prior to the
date hereof) (each, an "Estoppel Certificate") substantially in the form of the
estoppel certificate attached to each such tenant's Lease, or, with respect to
any Lease that does not include a form of estoppel certificate, an estoppel
certificate which substantially incorporates the estoppel provisions expressly
contained in any such Lease. Seller shall use reasonable efforts to cause the
Tenants to execute and return the Estoppel Certificates not later than five (5)
business days prior to Closing.
IX.9. Contracts. Seller may, between the date hereof and the Closing,
extend, renew, replace or modify any Contract or enter into any new Contract if
the terms thereof are on commercially reasonable and competitive terms and the
term thereof is cancellable upon no more than thirty (30) days prior written
notice, without premium or penalty.
IX.10. Light Rail Line.
IX.10.1. Seller shall not, from and after the date hereof
through the end of the Feasibility Period, (i) enter into a binding agreement
with the City of Jersey City, the New Jersey Department of Transportation, or
any other pertinent party, with respect to the proposed light rail line to be
constructed on the Property (the "Light Rail Line") or (ii) grant any easement,
right of way or similar encumbrance of title in connection with the Light Rail
Line, or (iii) enter into any exchange of property or similar arrangement in
connection with the Light Rail Line, unless Seller first notifies Purchaser in
writing, at least five (5) business days in advance of the action intended to be
taken by Seller. Seller shall be authorized to undertake any such action unless
Purchaser delivers the Waiver Notice to Seller prior to the expiration of such
five (5) business day period. In the event that Seller shall enter into any such
agreement or grant any such easement, it shall promptly provide Purchaser with a
copy of any such agreement or easement. Seller covenants and agrees that it
shall timely provide Purchaser with drafts of any pertinent documentation in
connection with the Light Rail Line and shall keep Purchaser informed of all
substantive negotiations and discussions with respect to the Light Rail Line on
an on-going basis.
IX.10.2. Seller shall not, from and after the expiration of
the Feasibility Period, and the delivery of the Waiver Notice, enter into any
binding agreement or grant any easement in connection with the Light Rail Line,
in each case without the prior written approval of Purchaser which in each case
shall not be unreasonably withheld or conditioned, and which shall be deemed
granted if Purchaser fails to respond to a request for approval within three (3)
business days after receipt of the request therefor together with a summary of
the proposed action and copies of the underlying documentation.
IX.11. Litigation. Purchaser agrees and acknowledges that Seller shall
have the right to continue to prosecute the existing litigation between HEPLP,
as defendant, and Square Harborside Corp., as plaintiff (the "Square Harborside
Parking Litigation") and that Seller shall be solely entitled to receive any and
all recoveries obtained from the outcome of such litigation.
IX.12. Notices of Violation. Seller shall promptly notify Purchaser of,
and shall promptly deliver to the Purchaser a copy of any notice Seller may
receive, on or before the Closing, from any governmental authority, concerning a
violation of Environmental Laws or a discharge of Hazardous Substances.
IX.13. Reciprocal Operating Agreement. Prior to the delivery of the
Waiver Notice, Purchaser acknowledges and agrees that Seller shall have the
right to amend the Reciprocal Operation and Easement Agreement (the "ROEA") for
Harborside Financial Center to provide that for the duration of the term of the
ROEA, the owner or owners of the BT Parcel, or any Person leasing the BT Parcel
pursuant to a ground lease, shall be entitled to lease that number of parking
spaces within the Special Common Area parking facilities (or parking garages or
structures constructed on or around the Property, in the event that such garages
or structures are not designated as Special Common Area parking facilities)
which, when combined with the number of parking spaces within the Exclusive
Parking Facilities allocated to the BT Parcel, shall equal or exceed three
hundred eighty-five (385) parking spaces. (All capitalized terms used in this
subsection and not otherwise defined shall have the meanings ascribed thereto in
the ROEA.) From and after the expiration of the Feasibility Period and the
delivery of the Waiver Notice, any such amendment shall be subject to the
approval of Purchaser, which approval shall not be unreasonably conditioned or
delayed, and which shall be deemed granted if Purchaser fails to respond to a
request for approval within five (5) business days after receipt of the request
therefor together with a draft of such amendment.
X. ARTICLE X.
Closing Conditions
X.1. Conditions to Obligations of Seller. The obligations of Seller
under this Agreement to sell the Property and consummate the other transactions
contemplated hereby shall be subject to the satisfaction of the following
conditions on or before the Closing Date except to the extent that any of such
conditions may be waived by Seller in writing at Closing.
X.1.1. Representations, Warranties and Covenants of Purchaser.
All representations and warranties of Purchaser in this Agreement shall be true
and correct in all material respects as of the Closing Date, with the same force
and effect as if such representations and warranties were made anew as of the
Closing Date, and Purchaser shall have performed and complied with all covenants
and agreements required by this Agreement to be performed or complied with by
Purchaser prior to the Closing Date.
X.1.2. No Orders. No order, writ, injunction or decree shall
have been entered and be in effect by any court of competent jurisdiction or any
authority, and no statute, rule, regulation or other requirement shall have been
promulgated or enacted and be in effect, that restrains, enjoins or invalidates
the transactions contemplated hereby.
X.1.3. No Suits. No suit or other proceeding shall be pending
or threatened by any third party before any court or authority seeking to
restrain or prohibit or declare illegal, or seeking substantial damages against
Seller or any of its affiliates in connection with the transactions contemplated
by this Agreement.
X.1.4. Consent of Existing Lenders. The Existing Lenders shall
have consented (the "Existing Lenders' Consent") in writing to (i) the
assumption of the Existing Financing by Purchaser and/or its Permitted
Assignee(s) and (ii) the amendment of the ROEA pursuant to Section 9.13 hereof.
It shall be a condition to the delivery of the Existing Lenders' Consent that
the Existing Lenders shall not have imposed any obligations on Seller or
Purchaser in connection with the assumption of the Existing Financing other than
the obligations specifically provided for in that certain Mortgage dated as of
December 5, 1995 (the "Mortgage"), from Seller (and related parties), to the
Existing Lenders under the paragraph entitled "Due on Sale". Notwithstanding
anything contained herein to the contrary, Purchaser shall have the right, at
its own cost and expense, and subject to the consent of the Existing Lenders, to
satisfy any additional or contingent obligations imposed by the Existing Lenders
with respect to the granting by the Existing Lenders of the Existing Lenders'
Consent. In connection with the Existing Lenders' Consent, Seller covenants and
agrees that it shall use best efforts to obtain such consent; provided, however,
Seller shall not be required (x) to satisfy any obligations or conditions
imposed by the Existing Lenders with respect to such consent other than the
obligations specifically set forth in the Mortgage under the paragraph entitled
"Due on Sale," or (y) to incur any expense in connection with obtaining the
Existing Lenders' Consent to the matter set forth in subsection (ii) above. At
the request of the Existing Lenders, Seller shall enter into a subordination
agreement, in form and substance reasonably acceptable to Seller and the
Existing Lenders, to subordinate the Contingent Consideration Agreement to the
Existing Financing.
Seller shall have the right at any time to deliver a notice to
Purchaser (the "ROEA Waiver Notice"), waiving the delivery by the Existing
Lenders of their consent to the amendment of the ROEA as a condition of Closing
hereunder, and upon the delivery of the ROEA Waiver Notice, the provision of
subsection 10.1.4(ii) above shall be deemed deleted from this Agreement.
In the event the Existing Lenders' Consent is not obtained by
December 10, 1996, Seller shall have the right, exercisable by notice (the
"Seller's Termination Notice") to Purchaser to terminate this Agreement, but
subject to the further rights set forth in this paragraph. On the date (the
"Termination Date") which is fourteen (14) days following the delivery of the
Seller's Termination Notice to Purchaser, the Deposit shall be returned to
Purchaser and neither party hereto shall have any further rights or obligations
pursuant hereto, subject to the Surviving Termination obligations, unless prior
to the Termination Date, the Existing Lenders' Consent shall have been
delivered. Purchaser shall have the right, following the delivery of the
Seller's Termination Notice, to contact the Existing Lenders to seek to obtain
the Existing Lenders' Consent. If the Existing Lenders' Consent is so delivered,
this Agreement shall remain in full force and effect.
X.1.5. Seller's ALTA Loan Policy. Seller shall have obtained
an ALTA Loan Policy for the Purchase Money Mortgage insuring the lien thereof
subject only to the Permitted Exceptions.
X.1.6. Intentionally Deleted.
X.1.7. Contingent Consideration Agreement. Purchaser shall
have executed the Contingent Consideration Agreement.
X.1.8. Purchase Money Loan. Purchaser shall have executed the
Purchase Money Loan Documents and the same (as appropriate) shall have been
delivered to the Title Company for recording.
X.1.9. Intentionally Deleted.
X.1.10. Termination. In the event Seller shall elect not to
close due to the failure of any one or more of the conditions precedent to
Seller's obligation to sell set forth in this Section 10.1, Seller shall so
notify Purchaser on the day of Closing in writing specifying the unfulfilled
conditions, Seller shall direct the Escrow Agent to return the Deposit to
Purchaser and this Agreement shall terminate, and neither party shall have any
further obligation under this Agreement (except the Surviving Termination
Obligations). Notwithstanding anything to the contrary contained herein, in the
event that Seller delivers a termination notice to Purchaser pursuant to this
Section 10.1.9, Purchaser shall have the right (provided that it delivers a
notice to Seller within two days of its receipt of Seller's termination notice),
to extend the scheduled Closing Date for a period of up to ten (10) business
days in order to allow the satisfaction of the unfulfilled conditions to the
obligations of Seller specified in Seller's termination notice.
X.2. Conditions to Obligations of Purchaser. The obligations of
Purchaser under this Agreement to purchase the Property and consummate the other
transactions contemplated hereby shall be subject to the satisfaction of the
following conditions on or before the Closing Date, except to the extent that
any of such conditions may be waived by Purchaser in writing at Closing.
X.2.1. Representations, Warranties and Covenants of Seller.
All representations and warranties of Seller in this Agreement shall be true and
correct in all material respects as of the Closing Date, with the same force and
effect as if such representations and warranties were made anew as of the
Closing Date, any changes to such representations disclosed by Seller pursuant
to Article 11.1.15 shall be acceptable to Purchaser, and Seller shall have
performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied with by Seller
prior to the Closing Date. The provisions of this Section 10.2.1 shall be
effective whether or not Seller had actual knowledge that any of the
representations or warranties made by Seller in this Agreement were not true and
correct in all material respects as of the Closing Date.
X.2.2. No Orders. No order, writ, injunction or decree shall
have been entered and be in effect by any court of competent jurisdiction or any
authority, and no statute, rule, regulation or other requirement shall have been
promulgated or enacted and be in effect, that restrains, enjoins or invalidates
the transactions contemplated hereby.
X.2.3. No Suits. No suit or other proceeding shall be pending
or threatened by any third party not affiliated with or acting at the request of
Purchaser before any court or authority seeking to restrain or prohibit or
declare illegal, or seeking substantial damages against Purchaser in connection
with the transactions contemplated by this Agreement.
X.2.4. Intentionally Deleted.
X.2.5. Title. At the time of Closing, title to the Property
shall be as provided in this Agreement.
X.2.6. ISRA. The conditions set forth in Section 16.18 hereof
shall have been met.
X.2.7. Status of Existing Financing. Purchaser shall have
received an estoppel certificate in form and substance reasonably acceptable to
Purchaser, duly executed by each of the Existing Lenders.
X.2.8. Estoppel Certificates. Purchaser shall have received
Estoppel Certificates from (i) the six (6) major tenants (the "Major Tenants")
listed on Schedule 8 attached hereto, and (ii) Estoppel Certificates from
tenants occupying 50% of the rentable square feet of the Improvements (exclusive
of the rentable square feet of the Improvements leased to the Major Tenants).
X.2.9. Fox Lance Agreements - Consents. The City of Jersey
City shall have consented (the "City Consent") to the assignment of the
Fox-Lance Agreements (described on Schedule 9 attached hereto) to Purchaser. In
connection with the consents required pursuant to this Section 10.2.9, Seller
covenants and agrees that it shall use diligent efforts to obtain the consents
required under this subsection; provided, however, Seller shall have no
obligation to incur any costs or expenses in connection therewith.
X.2.10. Termination. In the event Purchaser shall elect not to
close due to the failure of any one or more of the conditions precedent to
Purchaser's obligation to consummate this transaction set forth in this Section
10.2, Purchaser shall so notify Seller on the day of Closing in writing
specifying the unfulfilled conditions, Seller shall direct the Escrow Agent to
return the Deposit to Purchaser and this Agreement shall terminate, and neither
party shall have any further obligation under this Agreement (except the
Surviving Termination Obligations). Notwithstanding anything to the contrary
contained herein, in the event that Purchaser delivers a termination notice to
Seller pursuant to this Section 10.2.10, Seller shall have the right (provided
that it delivers a notice to Purchaser within two days of its receipt of
Purchaser's termination notice), to extend the scheduled Closing Date for a
period of up to ten (10) business days in order to allow the satisfaction of the
unfulfilled conditions to the obligations of Purchaser specified in Purchaser's
termination notice.
XI. ARTICLE XI.
Closing
XI.1. Seller's Closing Obligations. Seller, at its sole cost and
expense, shall deliver or cause to be delivered to Purchaser at Closing the
following:
XI.1.1. A bargain and sale deed with covenants against
grantor's acts (the "Deed") substantially in the form attached hereto as Exhibit
L, properly executed by Seller conveying to Purchaser the Land and Improvements
described on Exhibit A and Exhibit A-1 in fee simple, subject only to the
Permitted Exceptions.
XI.1.2. An Assignment and Assumption of Ground Lease with
respect to each of the Ground Leases, duly executed by each of the respective
Ground Lessees.
XI.1.3. An "Assignment and Assumption of Leases" in the form
of Exhibit M attached hereto, with respect to the Leases, duty executed by
Seller.
XI.1.4. An "Assignment and Assumption of Ground Leases
(Lessor)" in the form of Exhibit N attached hereto, with respect to the Ground
Leases, duly executed by Seller.
XI.1.5. An "Assignment and Assumption of Contracts" in the
form of Exhibit O attached hereto, duly executed by Seller.
XI.1.6. An "Assignment and Assumption of Option Agreement" in
the form of Exhibit P attached hereto duly executed by Seller with respect to
that certain Option Agreement dated as of June 26, 1984 between Consolidated
Rail Corporation, as optionor, and Seller (as successor in interest), as
optionee, as more particularly described in Exhibit J.
XI.1.7. An Assignment and Assumption Agreement with respect to
the Existing Loan (the "Assignment and Assumption of the Existing Loan"), in
form and substance acceptable to Seller, Purchaser and the Existing Lenders,
duly executed by Seller.
XI.1.8. An "Assignment and Assumption of the Fox Lance
Agreements" in the form of Exhibit Q attached hereto, duly executed by Seller.
XI.1.9. A list of cash security deposits and all non-cash
security deposits (including letters of credit) delivered by tenants to Seller
under the Leases, together with, subject to the provisions of Section 4.2.7
hereof, other instruments of assignment, transfer, signature guaranty or consent
as may be necessary to permit Purchaser to realize upon the same, each duly
executed and delivered by Seller.
XI.1.10. Copies of the Contracts, the Licenses and Permits and
the warranties and guarantees (originals will be provided if available).
XI.1.11. Signed copies of all Leases in effect on such date
and all other documents in the possession of Seller or the Managing Agent
relating to the tenants under such Leases;
XI.1.12. Copies of the current plans and specifications for
the Improvements and copies of the as-built plans and specifications for the
Improvements (including tenant spaces), that are in the possession of Seller;
XI.1.13. Written notices executed by Seller, addressed to each
tenant, or subtenant, under a Lease or Ground Lease (i) acknowledging the sale
of the Property to Purchaser and (ii) indicating that rent should thereafter be
paid to Purchaser and giving instructions therefore, substantially in the form
of Exhibit R attached hereto.
XI.1.14. Written notices executed by Seller, addressed to each
party performing services pursuant to a Contract indicating that the Property
has been sold to Purchaser and that all rights of Seller thereunder have been
assigned to Purchaser.
XI.1.15. A certificate in the form of Exhibit S attached
hereto, indicating that the representations and warranties set forth in Article
VII are true and correct on the Closing Date, or, if there have been changes,
describing such changes.
XI.1.16. A "Bill of Sale" in the form attached hereto as
Exhibit T, conveying, transferring and selling to Purchaser (with no value
separate from the Real Property) all right, title and interest of Seller in and
to the Personal Property.
XI.1.17. A certificate substantially in the form attached
hereto as Exhibit U ("Firpta Affidavit") certifying that Seller is not a
"foreign person" as defined in Section 1445 of the Internal Revenue Code of
1986, as amended.
XI.1.18. The following items to the extent in Seller's
possession, or under Seller's control: (i) keys for all entrance doors in the
Improvements, (ii) all original books, records, tenant files, operating reports,
files, plans and specifications and other materials related to the operation of
the Property; (iii) the originals (or copies where originals are not available)
of the Contracts and the Licenses and Permits, and (iv) a revised Rent Roll,
updated to within ten (10) business days of the Closing.
XI.1.19. Evidence reasonably satisfactory to Purchaser and the
Title Company that the person executing the Closing documents on behalf of
Seller has full right, power and authority to do so.
XI.1.20. Affidavits and other matters as are reasonably
requested by the Title Company pursuant to Section 6.1.5 of this Agreement.
XI.1.21. Provided that Purchaser closes the transaction
hereunder in accordance with the terms and provisions of this Agreement, a
letter from Seller to the Escrow Agent authorizing the return of the Deposit to
Purchaser.
XI.1.22. The Estoppel Certificates required to be delivered by
Seller to Purchaser pursuant to Section 10.2.8 hereof.
XI.1.23. (i) A lease agreement (in form and substance
reasonably acceptable to Purchaser and Seller), between Seller, as landlord, and
a tenant reasonably acceptable to Purchaser, as tenant, pursuant to which such
tenant shall lease approximately 38,045 square feet of vacant space at the
Property previously leased to Jefferson Insurance Company (the "Jefferson
Lease") for a twelve month period commencing January 1, 1997 and agrees to pay
fixed rent under such lease in an aggregate amount of $875,000 per annum.
(ii) The Jefferson Lease will be on the standard form of lease
currently in use at the Property, and will provide that (x) until such time as
the tenant occupies the space demised under such lease, such tenant shall have
no obligations under the Jefferson Lease other than the payment of fixed rent in
the amount stipulated in subsection (i) above, (y) Purchaser shall be free to
recapture or sublease the premises demised under the Jefferson Lease in whole or
in part if it locates a suitable tenant for such space and (z) upon any such
recapture or sublet (a) the Jefferson Lease will remain in place as to the
tenant's obligation to make the monthly rental payments thereunder during the
balance of the term of such lease, and (b) fifty percent (50%) of the base rent
payable under such sublet will be applied to reduce such tenant's aggregate
payment obligations under the Jefferson Lease.
XI.1.24. A lease agreement (in form and substance reasonably
acceptable to Purchaser and Seller) between Seller, as landlord, and a tenant
reasonably acceptable to Purchaser, as tenant, pursuant to which such tenant
shall lease vacant space at the Property in the size and location to be mutually
agreed upon by Seller and Purchaser prior to the Closing, for a period of five
(5) years commencing as of the Closing, and pursuant to which the tenant agrees
to pay rent under such lease, in the monthly amount of thirty-three thousand
three hundred thirty-three ($33,333) dollars. The foregoing lease will be on the
standard form of lease currently in use at the Property and will provide that
until such time as the tenant occupies the space demised under such lease, the
tenant shall have no obligations under the lease other than the payment of fixed
rent in the amount stipulated above.
XI.1.25. A lease agreement (in form and substance reasonably
acceptable to Purchaser and Seller) between Seller, as landlord, and a tenant
reasonably acceptable to Purchaser, as tenant, with respect to approximately
62,520 square feet of space at the Property consisting of (i) the space formerly
leased to Aegis Insurance Company located on the Seventh Floor of Plaza II and
(ii) the space presently leased to American Presidential Lines located on the
Seventh Floor of Plaza III (the "Additional Space Lease"). The Additional Space
Lease shall (i) be on the standard form of lease currently in use at the
property, (ii) be for a term of five (5) years, (iii) provide for the payment of
fixed rent in the annual amount of $1,250,000, (iv) provide that until such time
as the tenant occupies the space demised thereunder, the tenant shall have no
obligations under the Additional Space Lease other than the payment of fixed
rent as provided above, and (v) be on such other terms as the Seller and
Purchaser shall reasonably agree upon.
XI.1.26. The Management Agreement and the Leasing Agreement
pursuant to Section 16.20 hereof.
XI.1.27. A Subordination and Non-Disturbance Agreement, with
respect to the Lease between Seller and BT Harborside, Inc., duly executed by
the lender under the Purchase Money Loan, or its designee, in form and substance
reasonably acceptable to such lender, or as otherwise in accordance with such
Lease.
XI.1.28. At Closing, Seller shall have delivered possession of
the Property to Purchaser, subject to the Permitted Exceptions and the rights of
tenants under the Leases.
XI.1.29. As of the Closing Date, the outstanding principal
amount due under the Existing Financing does not exceed $110,000,000.
XI.1.30. Such other documents as may be reasonably necessary
or appropriate to effect the consummation of the transactions which are the
subject of this Agreement.
XI.2. Purchaser's Closing Obligations. Purchaser, at its sole cost and
expense, shall deliver or cause to be delivered to Seller at Closing the
following:
XI.2.1. The Cash Portion of the Purchase Price, after all
adjustments are made at the Closing as herein provided, by Federal Reserve wire
transfer of immediately available funds.
XI.2.2. Purchaser shall duly execute, acknowledge (as
appropriate) and deliver:
(i) an Assignment and Assumption of Ground Lease for each
Ground Lease;
(ii) the Assignment and Assumption of Leases;
(iii) the Assignment and Assumption of Contracts;
(iv) the Assignment and Assumption of Option Agreement;
(v) the Assignment and Assumption of the Existing Loan;
(vi) the Purchase Money Loan Documents;
(vii) An opinion from Pryor Cashman Sherman & Flynn, in
form and substance reasonably acceptable to Seller,
or its assignee, regarding the due execution,
delivery and enforceability of the Purchase Money
Loan Documents;
(viii) receipt for delivery and acceptance of the Security
Deposits;
(ix) the Contingent Consideration Agreement;
(x) the Contingent Consideration Guaranties; and
(xi) the Management Agreement and the Leasing Agreement.
XI.2.3. Evidence reasonably satisfactory to Seller and the
Title Company that the person executing the Closing documents on behalf of
Purchaser has full right, power and authority to do so.
XI.2.4. A certificate in the form of Exhibit V attached
hereto, indicating that the representations and warranties set forth in Article
VIII are true and correct on the Closing Date, or, if there have been changes,
describing such changes.
XI.2.5. Such other documents as may be reasonably necessary or
appropriate to effect the consummation of the transactions which are the subject
of this Agreement.
XII. ARTICLE XII.
Risk of Loss
XII.1. Condemnation and Casualty. If, prior to the Closing Date, all or
any portion of the Property is taken by eminent domain, or is the subject of a
pending taking which has not been consummated, or is destroyed or damaged by
fire or other casualty, Seller shall notify Purchaser of such fact promptly
after Seller obtains knowledge thereof. If such condemnation or casualty is
"Material" (as hereinafter defined), Purchaser shall have the option to
terminate this Agreement upon notice to Seller given not later than fifteen (15)
days after receipt of Seller's notice, or the Closing Date, whichever is
earlier. If this Agreement is terminated, the Deposit shall be returned to
Purchaser and thereafter neither Seller nor Purchaser shall have any further
rights or obligations to the other hereunder except with respect to the
Surviving Termination Obligations. If this Agreement is not terminated, Seller
shall not be obligated to repair any damage or destruction but (x) Seller shall
assign and turn over to Purchaser all of the insurance proceeds or condemnation
proceeds, as applicable, net of all costs of repairs and net of reasonable
collection costs (or, if such have not been awarded, all of its right, title and
interest therein) payable with respect to such fire or other casualty or
condemnation, including any rent abatement insurance accruing after the Closing
for such casualty or condemnation, and (y) the parties shall proceed to Closing
pursuant to the terms hereof without abatement of the Purchase Price except for
a credit in the amount of the applicable insurance deductible.
XII.2. Condemnation not Material. If the condemnation is not Material,
then the Closing shall occur without abatement of the Purchase Price and, after
deducting all of Seller's reasonable costs and expenses incurred in collecting
any award, Seller shall assign all remaining awards or any rights to collect
awards to Purchaser on the Closing Date, unless the condemnation affects the
Upland Parcels or the Piers, in which event the condemnation award shall be
split between Purchaser and Seller.
3. Casualty not Material. If the Casualty is not Material, then the
Closing shall occur without abatement of the Purchase Price except for a credit
in the amount of the applicable deductible and Seller shall not be obligated to
repair such damage or destruction and Seller shall assign and turn over to
Purchaser all of the insurance proceeds net of any costs of repairs and net of
reasonable collection costs (or, if such have not been awarded, all of its
right, title and interest therein) payable with respect to such fire or such
casualty, including any rent abatement insurance accruing after the Closing for
such casualty.
XII.4. Materiality. For purposes of this Article 12, (i) with respect
to a taking by eminent domain, the term "Material" shall mean a taking of any
portion of (x) the office building located on the BT Parcel, or (y) the office
buildings located on the property demised under the Plaza II/III Ground Lease
(as defined in Exhibit B-1 hereto) excluding, however, any taking solely of
subsurface rights or takings for utility easements or right of way easements, if
the surface of such property, after such taking, may be used in substantially
the same manner as though such rights had not been taken and (ii) with respect
to a casualty, the term "Material" shall mean any casualty such that the cost of
repair, as reasonably estimated by an independent engineer licensed to do
business in the State of New Jersey acceptable to Seller and Purchaser, is in
excess of $5,000,000.
XIII. ARTICLE XIII.
Default
XIII.1. Default by Seller.
XIII.1.1. Except as set forth below, in the event the Closing
and the transactions contemplated hereby do not occur as provided herein by
reason of the default of Seller, Purchaser may elect, as the sole and exclusive
remedy of Purchaser, to (i) terminate this Agreement and receive the Deposit
from the Escrow Agent in accordance with the terms and provisions of Section
16.15 hereof, and in such event Seller shall not have any liability whatsoever
to Purchaser hereunder other than with respect to the Surviving Termination
Obligations or (ii) enforce specific performance of this Agreement. Purchaser
shall be deemed to have elected to terminate this Agreement (as provided in
subsection (i) above) if Purchaser fails to deliver to Seller written notice of
its intent to file a cause of action for specific performance against Seller on
or before six (6) months after written notice of termination from Seller or six
(6) months after the originally scheduled Closing Date, whichever shall occur
first, or having given Seller notice, fails to file a lawsuit asserting such
cause of action within six (6) months after the originally scheduled Closing
Date. Notwithstanding the foregoing, nothing contained herein shall limit
Purchaser's remedies at law or in equity as to the Surviving Termination
Obligations.
XIII.1.2. Notwithstanding anything to the contrary contained
herein, in the event that Seller takes an affirmative action to wilfully violate
any covenant of Seller contained herein, and Purchaser elects to terminate this
Agreement as provided herein (i) Seller shall reimburse Purchaser for all of its
actual and verified, non-affiliated third party expenses (including reasonable
attorneys' fees) incurred by Purchaser solely in connection with the transaction
contemplated under this Agreement, and (ii) in the event that Seller sells the
Property to any third party prior to December 31, 1996, Purchaser shall have the
right to sue for damages and/or pursue any remedy available to Purchaser, at law
or in equity. The mere failure to occur of any condition to Closing shall not be
deemed to be an affirmative action to wilfully violate any covenant contained
herein. The provisions of this Section 13.1.2 shall survive the Closing and/or
termination of this Agreement.
XIII.2. Default by Purchaser. In the event the Closing and the
transactions contemplated hereby do not occur as provided herein by reason of
any default of Purchaser, Purchaser and Seller agree it would be impractical and
extremely difficult to fix the damages which Seller may suffer. Therefore,
Purchaser and Seller hereby agree a reasonable estimate of the total net
detriment Seller would suffer in the event Purchaser defaults and fails to
complete the purchase of the Property is and shall be, as Seller's sole and
exclusive remedy (whether at law or in equity), a sum equal to the Deposit. Upon
such default by Purchaser, Seller shall have the right to receive the Deposit
from the Escrow Agent, in accordance with the terms and provisions of Section
16.15 hereof, as its sole and exclusive remedy and thereupon this Agreement
shall be terminated and neither Seller nor Purchaser shall have any further
rights or obligations hereunder except with respect to the Surviving Termination
Obligations. The amount of the Deposit shall be the full, agreed and liquidated
damages for Purchaser's default and failure to complete the purchase of the
Property, all other claims to damages or other remedies being hereby expressly
waived by Seller. Notwithstanding the foregoing, nothing contained herein shall
limit Seller's remedies at law or in equity as to the Surviving Termination
Obligations.
XIV. ARTICLE XIV.
Brokers
XIV.1. Brokerage Indemnity. Purchaser shall indemnify Seller, its
affiliates, and its and their partners, trustees, advisors, officers, and
directors, against all losses, damages, costs, expenses (including reasonable
fees and expenses of attorneys), causes of action, suits or judgments of any
nature arising out of any claim, demand or liability to or asserted by any
broker, agent or finder, licensed or otherwise, claiming to have dealt with
Purchaser in connection with this transaction other than Morgan Stanley Realty
Incorporated (the "Broker"). Seller shall indemnify Purchaser and its
affiliates, and its and their partners, trustees, advisors, officers and
directors, against all losses, damages, costs, expenses (including reasonable
fees and expenses of attorneys), causes of action, suits or judgments of any
nature arising out of any claim, demand or liability to or asserted by the
Broker in connection with this transaction or by any broker, agent or finder,
licensed or otherwise, claiming to have dealt with Seller in connection with
this transaction. Seller shall pay the Broker in connection with the
consummation of the transactions contemplated by this Agreement pursuant to a
separate agreement between Seller and Broker. The provisions of this Article 14
shall survive the Closing and/or termination of this Agreement.
XV. ARTICLE XV.
Confidentiality
XV.1. Confidentiality. Seller and Purchaser each expressly acknowledges
and agrees that the terms and provisions of that certain Confidentiality
Agreement dated as of April 1, 1996, between Seller and Purchaser (the
"Confidentiality Agreement"), shall remain in full force and effect and shall
not merge into this Agreement. Notwithstanding the foregoing, the
Confidentiality Agreement shall terminate and be of no further force and effect
from and after the Closing. Notwithstanding anything to the contrary contained
in the Confidentiality Agreement, Purchaser shall have the right to discuss and
commence negotiations with the City of Jersey City with respect to obtaining the
City Consent, provided that such negotiations are undertaken in coordination
with Seller's attorneys, and provided further that in no event shall Purchaser
cause any ordinances or resolutions to be passed in connection therewith,
without the prior written consent of Seller.
XV.2. Publication. Notwithstanding the foregoing, (i) from and after
the date hereof, Purchaser shall have the right to make such public
announcements or filings with respect to the transaction as Purchaser may deem
reasonably necessary in accordance with applicable law, or required on advice of
counsel, and (ii) following Closing, either party shall have the right to
announce the transfer of the Property in newspapers and real estate trade
publications (including "tombstones" publicizing the purchase). Seller shall not
make any public announcements or filings with respect to the transaction (except
as otherwise may be required by law) until the earlier of (i) the delivery of
the Waiver Notice, or (ii) until such time that Purchaser has made any such
announcement or filing. In no event may the name of any affiliates of the Seller
be disclosed in any public announcement or filings, without the express written
consent of Seller.
XVI. ARTICLE XVI.
Miscellaneous
XVI.1. Notices. Any and all notices, requests, demands or other
communications hereunder shall be deemed to have been duly given if in writing
and if transmitted by hand delivery with receipt therefor, by facsimile delivery
(with confirmation by hard copy), by overnight courier, or by registered or
certified mail, return receipt requested, first class postage prepaid addressed
as follows (or to such new address as the addressee of such a communication may
have notified the sender thereof) (the date of such notice shall be the date of
actual delivery to the recipient thereof):
To Purchaser: Cali Realty Corporation
11 Commerce Drive
Cranford, New Jersey 07016
Attn: Roger W. Thomas, Esq.
Fax No.: (908) 272-6755
With a copy to: Pryor Cashman Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attn: Andrew S. Levine, Esq.
Fax No.: (212) 326-0806
To Seller: Jones Lang Wootton Realty Advisors
335 Madison Avenue
New York, New York 10017
Attn: Stephen J. Furnary
Fax No.: (212) 883-2700
With a copy to: Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
Attn: Richard R. Kalikow, Esq.
Fax No.: (212) 735-2001
and:
Messner, Pavek & Reeves, LLC
600 17th Street
Suite 2100 South
Denver, Colorado 80202
Attn: Bryant Messner, Esq.
Fax No.: (303) 623-0552
To Escrow Agent: First American Title Insurance
Company of New York
228 East 45th Street
New York, New York 10017-3303
Attn: Judy Pagnatta
Fax No.: (212) 922-0885
Purchaser's counsel may give any notices or other communications
hereunder on behalf of Purchaser and Seller's counsel may give any notices or
other communications hereunder on behalf of Seller.
XVI.2. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
XVI.3. Headings. The captions and headings herein are for convenience
and reference only and in no way define or limit the scope or content of this
Agreement or in any way affect its provisions.
XVI.4. Business Days. If any date herein set forth for the performance
of any obligations of Seller or Purchaser or for the delivery of any instrument
or notice as herein provided should be on a Saturday, Sunday or legal holiday,
the compliance with such obligations or delivery shall be deemed acceptable on
the next business day following such Saturday, Sunday or legal holiday. As used
herein, the term "legal holiday" means any state or Federal holiday for which
financial institutions or post offices are generally closed in the state where
the Property is located.
XVI.5. Counterpart Copies. This Agreement may be executed in two or
more counterpart copies, all of which counterparts shall have the same force and
effect as if all parties hereto had executed a single copy of this Agreement.
XVI.6. Binding Effect. This Agreement shall be binding upon, and inure
to the benefit of, the parties hereto and their respective successors and
permitted assigns.
XVI.7. Assignment. This Agreement may not be assigned by Purchaser
except to a directly or indirectly wholly-owned subsidiary or subsidiaries of
Purchaser, or to a partnership in which any such wholly-owned subsidiary or
subsidiaries owns, either directly or indirectly, at least 75% of the profits,
losses and cash flow thereof and controls the management of the affairs of such
partnership (any such entity, a "Permitted Assignee") and any other assignment
or attempted assignment by Purchaser shall constitute a default by Purchaser
hereunder and shall be deemed null and void and of no force or effect.
Notwithstanding anything to the contrary contained herein, Purchaser may assign
(i) the right to purchase the Real Property and (ii) the right to purchase the
Ground Lessees' interests in the Ground Leases to different entities, provided,
however, that each of such entities is a Permitted Assignee. A copy of any
assignment permitted hereunder, together with an agreement of the assignee
assuming all of the terms and conditions of this Agreement to be performed by
Purchaser, in form reasonably satisfactory to counsel for Seller, shall be
delivered to the attorneys for Seller prior to the Closing, and in any event no
such assignment shall relieve Purchaser from Purchaser's obligations under this
Agreement nor result in a delay in the Closing.
XVI.8. Interpretation. This Agreement shall not be construed more
strictly against one party than against the other merely by virtue of the fact
that it may have been prepared by counsel for one of the parties, it being
recognized that both Seller and Purchaser have contributed substantially and
materially to the preparation of this Agreement.
XVI.9. Entire Agreement. Except with respect to (i) the Confidentiality
Agreement and (ii) the Access Agreement, which agreements shall remain in full
force and effect, this Agreement and the Exhibits attached hereto contain the
final and entire agreement between the parties hereto with respect to the sale
and purchase of the Property and are intended to be an integration of all prior
negotiations and understandings. Purchaser, Seller and their agents shall not be
bound by any terms, conditions, statements, warranties or representations, oral
or written, not contained herein. No change or modifications to this Agreement
shall be valid unless the same is in writing and signed by the parties hereto.
Each party reserves the right to waive any of the terms or conditions of this
Agreement which are for their respective benefit and to consummate the
transactions contemplated by this Agreement in accordance with the terms and
conditions of this Agreement which have not been so waived. Any such waiver must
be in writing signed by the party for whose benefit the provision is being
waived.
XVI.10. Severability. If any one or more of the provisions hereof shall
for any reason be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision hereof, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.
XVI.11. Survival. Except as otherwise specifically provided for in this
Agreement (collectively, the "Surviving Termination Obligations"), the
provisions of this Agreement and the representations and warranties herein shall
not survive after the conveyance of title and payment of the Purchase Price but
be merged therein.
XVI.12. Exhibits. Exhibits A through X and Schedules 1 through 9
attached hereto are incorporated herein by reference.
XVI.13. Limitation of Liability. The obligations of Seller are intended
to be binding only on Seller and Seller's assets, and shall not be personally
binding upon, nor shall any resort be had to, the private properties of any of
the partners, officers, directors, shareholders, advisors, trustees, agents, or
employees of Seller, or its affiliates.
XVI.14. Prevailing Party. Should either party employ an attorney to
enforce any of the provisions hereof, (whether before or after Closing, and
including any claims or actions involving amounts held in escrow), the
nonprevailing party in any final judgment agrees to pay the other party's
reasonable attorneys' fees and expenses in or out of litigation and, if in
litigation, trial, appellate, bankruptcy or other proceedings, expended or
incurred in connection therewith, as determined by a court of competent
jurisdiction. The provisions of this Section 16.14 shall survive Closing and/or
any termination of this Agreement.
XVI.15. Escrow Agreement.
XVI.15.1. Instructions. This Agreement, together with such
further instructions, if any, as the parties shall provide to Escrow Agent by
written agreement, shall constitute the escrow instructions. If any requirements
relating to the duties or obligations of Escrow Agent hereunder are not
acceptable to Escrow Agent, or if Escrow Agent requires additional instructions,
the parties hereto agree to make such deletions, substitutions and additions
hereto as counsel for Purchaser and Seller shall mutually approve, which
additional instructions shall not substantially alter the terms of this
Agreement unless otherwise expressly agreed to by Seller and Purchaser.
XVI.15.2. Real Estate Reporting Person. Escrow Agent is hereby
designated the "real estate reporting person" for purposes of Section 6045 of
Title 26 of the United States Code and Treasury Regulation 1.6045-4 and any
instructions or settlement statement prepared by Escrow Agent shall so provide.
Upon the consummation of the transaction contemplated by this Agreement, Escrow
Agent shall file Form 1099 information return and send the statement to Seller
as required under the aforementioned statute and regulation. Seller and
Purchaser shall promptly furnish their federal tax identification numbers to
Escrow Agent and shall otherwise reasonably cooperate with Escrow Agent in
connection with Escrow Agent's duties as real estate reporting person. This
provision is operative only if applicable.
XVI.15.3. Liability of Escrow Agent. The parties acknowledge
that the Escrow Agent shall be conclusively entitled to rely, except as
hereinafter set forth, upon a certificate from Purchaser or Seller as to how the
Deposit (which, for purposes of this Section shall be deemed to also include any
other escrowed funds held by the Escrow Agent pursuant to this Agreement) should
be disbursed. Any notice sent by Seller or Purchaser (the "Notifying Party") to
the Escrow Agent shall be sent simultaneously to the other noticed parties
pursuant to Section 16.1 herein (the "Notice Parties"). If the Notice Parties do
not object to the Notifying Party's notice to the Escrow Agent within ten (10)
days after the Notice Party's receipt of the Notifying Party's certificate to
the Escrow Agent, the Escrow Agent shall be able to rely on the same. If the
Notice Parties send, within such ten (10) days, written notice to the Escrow
Agent disputing the Notifying Parties certificate, a dispute shall exist and the
Escrow Agent shall hold the Deposit as hereinafter provided. The parties hereto
hereby acknowledge that Escrow Agent shall have no liability to any party on
account of Escrow Agent's failure to disburse the Deposit if a dispute shall
have arisen with respect to the propriety of such disbursement and, in the event
of any dispute as to who is entitled to receive the Deposit, disburse them in
accordance with the final order of a court of competent jurisdiction, or to
deposit or interplead such funds into a court of competent jurisdiction pending
a final decision of such controversy. The parties hereto further agree that
Escrow Agent shall not be liable for failure of any depository and shall not be
otherwise liable except in the event of Escrow Agent's gross negligence or
willful misconduct. The Escrow Agent shall be reimbursed on an equal basis by
Purchaser and Seller for any reasonable expenses (including attorneys' fees and
disbursements) incurred by the Escrow Agent arising from a dispute with respect
to the Deposit. Notwithstanding anything to the contrary contained in this
Section 16.15.3, prior to the expiration of the Feasibility Period, or the
delivery of the Waiver Notice, the Escrow Agent shall be conclusively entitled
to rely on a certificate from the Purchaser requesting the return of the Deposit
and the Escrow Agent, upon receipt of such certificate, shall promptly return
the Deposit to Purchaser and immediately thereafter notify Seller of such
action.
XVI.16. No Recording. Neither this Agreement nor any memorandum or
short form hereof shall be recorded or filed in any public land or other public
records of any jurisdiction, by either party and any attempt to do so may be
treated by the other party as a breach of this Agreement.
XVI.17. Waiver of Trial by Jury. The respective parties hereto shall
and hereby do waive trial by jury in any action, proceeding or counterclaim
brought by either of the parties hereto against the other on any matters
whatsoever arising out of or in any way connected with this Agreement, or for
the enforcement of any remedy under any statute, emergency or otherwise.
XVI.18. ISRA Obligations.
XVI.18.1. Prior to the Closing, Seller shall apply for a
letter (the "Non-Applicability Letter") from the New Jersey Department of
Environmental Protection ("NJDEP") confirming that the New Jersey Industrial
Site Recovery Act, N.J.S.A. 13:1K-6 et. seq. ("ISRA") does not apply to the sale
of the Real Property contemplated by this Agreement. If the NJDEP determines
that ISRA applies to any leasehold or other portion of the Real Property, Seller
shall undertake to obtain from the NJDEP either an approved Negative Declaration
or a No Further Action Letter (the Non-Applicability Letter, Negative
Declaration or No Further Action Letter, as the case may be, are hereinafter
referred to collectively as the "ISRA Clearance") with respect to those portions
of the Real Property which are subject to ISRA. If Seller is unable to obtain
ISRA Clearance by the date set for Closing, then either party may extend the
Closing Date for a period not to exceed sixty (60) days to obtain ISRA
Clearance.
XVI.18.2. Purchaser acknowledges that certain areas of the
Real Property, as identified by Seller on Exhibit W attached hereto (the
"Remediation Property"), were previously the subject of investigation and
cleanup either under ISRA or other environmental regulations (the "Prior
Remediation Activities"). Seller represents that there are no open requirements
pending with respect to the Prior Remediation Activities. Seller agrees to
promptly make available to Purchaser all reports, correspondence and documents
in its possession, or subject to its control, relating to the Prior Remediation
Activities.
XVI.18.3. (i) If the NJDEP determines that ISRA applies to any
leasehold or other portion of the Real Property, then Seller's and Purchaser's
environmental consultants shall determine prior to the Closing the cost of any
remediation required to obtain a Negative Declaration or a No Further Action
Letter (the "Remediation Cost").
(ii) Upon determination of the Remediation Cost, Purchaser
shall have the right to elect, in its sole discretion, to perform the work
required by NJDEP, in which event Purchaser shall receive a credit in the amount
of the Remediation Cost (provided, in all events, that such amount is equal to
or less than $250,000) against the Cash Portion of the Purchase Price at
Closing. Purchaser shall provide Seller with notice of its election (the
"Purchaser's IRSA Notice") under this subsection (ii) within ten days of the
determination of the Remediation Cost.
(iii) In the event that the Remediation Cost is equal to or
less than $250,000 and Purchaser does not so elect to perform any such
remediation work, Seller and Purchaser shall proceed to Closing, provided that
Seller shall be obligated to perform any required remediation work pursuant to:
(a) obtaining NJDEP approval of a Remedial Action Work Plan (including
establishing a remediation funding source satisfactory to NJDEP), or (b)
entering into a Remediation Agreement with NJDEP and establishing a remediation
funding source satisfactory to the NJDEP allowing the transaction to close prior
to Seller's obtaining ISRA Clearance. If the Closing occurs pursuant to
alternatives (a) or (b) above, then Purchaser shall cooperate with Seller and
allow Seller access to the Property after Closing and, subject expressly to the
limitation of Seller's liability set forth in this Section 16.18.3, Seller shall
promptly undertake all investigation and/or remediation necessary to obtain an
approved Negative Declaration or a No Further Action Letter, which Negative
Declaration or No Further Action Letter shall be delivered to Purchaser upon
receipt. In no event shall Seller's remediation involve a ground water
Classification Exception Area or engineering or institutional controls without
the consent of Purchaser, which consent shall not be unreasonably withheld,
conditioned or delayed. Such access to the Property shall be pursuant to the
terms and provisions of an access agreement, in form and substance reasonably
acceptable to the parties hereto, to be entered into between Seller and
Purchaser prior to any such investigation or remediation. In the event that
Seller undertakes such remediation work, Purchaser acknowledges and agrees that
Purchaser shall be responsible for all costs and expenses in excess of $250,000
with respect to such remediation. The provisions of this Section 16.18.1(iii)
shall survive the Closing.
(iv) In the event that the Remediation Cost is greater than
$250,000 and Purchaser does not elect to perform the remediation obligations,
then this Agreement shall automatically terminate as of the date which is ten
(10) days after Purchaser's delivery of Purchaser's ISRA Notice stipulating that
Purchaser does not elect to perform such remediation work in excess of $250,000,
unless within such ten (10) day period Seller shall notify Purchaser of its
election to assume all responsibility for all required remediation. If Seller
shall so notify ("Seller's ISRA Notice") Purchaser of its election to perform
the remediation work, Purchaser, in its sole discretion, shall notify Seller
within five (5) days of its receipt of Seller's ISRA Notice of its election to
close under this Agreement. In the event that Purchaser does not so elect to
close, then this Agreement shall automatically terminate as of the date which is
five (5) days after Seller's delivery of Seller's ISRA Notice in which event
Seller's sole obligation shall be to direct the Escrow Agent to refund the
Deposit to Purchaser and neither party hereto shall have any rights or
obligations hereto, subject to the Surviving Termination Obligations and Escrow
Agent's obligation to return the Deposit.
(v) In the event that Purchaser elects to perform such
remediation obligations pursuant to sub-section (ii) or (iii) above, Purchaser
shall enter into any requisite agreement required by the NJDEP to obtain ISRA
Clearance and shall be responsible for the posting of any remediation funding
source required in connection therewith. In the event that Purchaser so elects
to perform the remediation costs and obligations pursuant to this Section,
Purchaser acknowledges and agrees that as between Seller and Purchaser, Seller
shall have no obligation with respect to such remediation costs (other than as
specifically set forth above) or NJDEP requirements, it being the intent of the
parties hereto that Purchaser shall perform all such remediation obligations and
costs (other than as specifically set forth above).
XVI.19. Letter of Intent. Upon execution of this Agreement by all
parties hereto, it is the express intention of the parties hereto that the
Letter of Intent dated July 23, 1996, between Morgan Stanley Realty,
Incorporated and the Purchaser, and acknowledged by Seller, shall be null and
void and of no further force or effect.
XVI.20. Management Agreement. As a condition of Closing, Purchaser, or
an affiliate, shall retain the Managing Agent as the managing agent and the
exclusive leasing agent for the Property. At Closing, Purchaser and the Managing
Agent shall enter into (i) a management agreement (the "Management Agreement")
on terms and provisions reasonably acceptable to such parties; provided,
however, that (y) the management fee payable to the Managing Agent by Purchaser
shall equal three (3%) percent of the base rents collected from tenants of the
Property, inclusive of parking revenue, and (z) the term of the Management
Agreement shall be for an initial term of eighteen (18) months; provided,
however, that the Purchaser shall have the right (the "Renewal Option") to renew
the Management Agreement for a renewal term consisting of twelve (12) months on
the same terms and conditions, and (ii) a leasing agreement for the entire
Property (the "Leasing Agreement") on terms and provisions reasonably acceptable
to such parties; provided, however, that (x) the leasing commission to be
payable to the Managing Agent under the Leasing Agreement shall be the standard
leasing commissions and overrides payable in New Jersey, (y) the term of the
Leasing Agreement shall be for the lesser of (I) thirty (30) months, or (II)
until such time as Purchaser shall have executed leases for 62,520 square feet
of space at the Property which was vacant as of September 15, 1996, and (z)
shall provide that in the event the Renewal Option in the Management Agreement
is not exercised, an additional $37,500 a month for the balance of the term of
the Leasing Agreement shall be paid under the Leasing Agreement to the Managing
Agent to provide consulting and management of the leasing process for Purchaser.
The Leasing Agreement shall require the Managing Agent to retain Jones Lang
Wootton USA ("JLW USA") pursuant to a separate sub-leasing agreement to provide
leasing services for the Property. The Leasing Agreement shall provide that the
Managing Agent shall receive the applicable leasing commissions with respect to
any lease which is being negotiated (or with respect to which discussions have
been commenced with a potential tenant) at the end of the term of the Leasing
Agreement and which is executed within six (6) months following the end of such
term. The Management Agreement and the Leasing Agreement shall specifically
provide that neither the Managing Agent nor JLW USA shall be involved in, or
advise the Purchaser in connection with, the sale or development of the Upland
Parcels or the Piers. Purchaser acknowledges and agrees that all services to be
provided by the Managing Agent (or its affiliates) and all actions to be taken
in connection with the Management Agreement and the Leasing Agreement shall be
in accordance with the provisions of the Employee Retirement Income Security Act
of 1974, as amended.
Purchaser acknowledges and agrees that all management fees
with respect to the Property shall be the responsibility of Purchaser from and
after the Closing and Seller acknowledges and agrees that all management fees
with respect to the Property due for the period prior to the Closing are the
responsibility of Seller.
XVI.20.1. The provisions of this Section 16.20 shall survive the
Closing.
XVI.21. Collective Bargaining Agreements. Effective as of Closing,
Purchaser agrees to assume and continue in full force and effect Seller's
collective bargaining agreements with International Union of Operating
Engineers, Local 68-68A-68B, effective June 1, 1996 to May 31, 1999, and with
Local 617, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and
Helpers of America, effective January 1, 1996 to December 31, 1998 (the
"Collective Bargaining Agreements"), and Purchaser shall have sole
responsibility for all obligations and liabilities arising under the Collective
Bargaining Agreements on and after Closing. Seller agrees to continue in full
force and effect the Collective Bargaining Agreements prior to Closing and to
retain all obligations and liabilities arising under the Collective Bargaining
Agreements prior to Closing.
XVI.22. Single Purpose Entities. Purchaser hereby covenants and agrees
that the entity which acquires the Property, or which holds any ground lessor or
ground lessee interest under the Ground Leases shall be a single purpose entity
formed solely to own or hold such respective assets.
[Balance of Page Intentionally Left Blank]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first written above.
SELLER:
PLAZA ONE EXCHANGE PLACE LIMITED
PARTNERSHIP, a New Jersey limited partnership
By: One Harborside Corp., a Delaware
corporation, general partner
By:
Name: Stephen J. Furnary
Title: President
HARBORSIDE EXCHANGE PLACE LIMITED
PARTNERSHIP, a New Jersey limited partnership
By: Two Harborside Corp., a Delaware
corporation, general partner
By:
Name: Stephen J. Furnary
Title: President
PLAZA II AND III URBAN RENEWAL
ASSOCIATES L.P., a New Jersey limited
partnership
By: One Exchange Place Corporation, a New Jersey
corporation, general partner
By:
Name: Stephen J. Furnary
Title: President
PURCHASER:
CALI REALTY CORPORATION,
a Maryland corporation
By:
Name:
Title:
The following parties hereby execute this Agreement for the sole
purpose of agreeing to be bound by the provisions of Section 1.2 hereof.
HARBORSIDE URBAN RENEWAL
ASSOCIATES L.P., a New Jersey limited partnership
By: One Exchange Place Corporation, a New Jersey corporation,
general partner
By:
Name: Stephen J. Furnary
Title: President
PLAZA IV URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership
By: One Exchange Place Corporation, a New Jersey corporation,
general partner
By:
Name: Stephen J. Furnary
Title: President
PLAZA V URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership
By: One Exchange Place Corporation, a New Jersey
corporation, general partner
By:
Name: Stephen J. Furnary
Title: President
PLAZA VI URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership
By: One Exchange Place Corporation, a New Jersey corporation,
general partner
By:
Name: Stephen J. Furnary
Title: President
NORTH PIER URBAN RENEWAL
ASSOCIATES L.P., a New Jersey limited partnership
By: One Exchange Place Corporation, a New Jersey corporation,
general partner
By:
Name: Stephen J. Furnary
Title: President
SOUTH PIER URBAN RENEWAL
ASSOCIATES L.P., a New Jersey limited
partnership
By: One Exchange Place Corporation, a New Jersey corporation,
general partner
By:
Name: Stephen J. Furnary
Title: President
<PAGE>
The Escrow Agent hereby executes this Agreement for the sole purpose of
acknowledging receipt of the Deposit and its responsibilities hereunder and to
evidence its consent to serve as Escrow Agent in accordance with the terms of
this Agreement.
ESCROW AGENT:
FIRST AMERICAN TITLE INSURANCE
COMPANY OF NEW YORK
By:
Name:
Title:
CONTINGENT CONSIDERATION AGREEMENT
This CONTINGENT CONSIDERATION AGREEMENT (this "Agreement") is made and
entered into this ______ day of November, 1996 by and between HARBORSIDE
EXCHANGE PLACE LIMITED PARTNERSHIP, a New Jersey limited partnership, having an
office c/o Jones Lang Wootton Realty Advisors, 335 Madison Avenue, New York, New
York 10017 ("Seller") and CALI HARBORSIDE (FEE) ASSOCIATES L.P., having an
office c/o Cali Realty Corporation, 11 Commerce Drive, Cranford, New Jersey
07016 ("Purchaser").
STATEMENT OF FACTS
Pursuant to an Agreement of Purchase and Sale (the "Purchase
Agreement") dated September 11, 1996, by and between, among others,
Seller and Cali Realty Corporation, Seller and Purchaser agreed, among
other things, to enter into this Agreement to evidence their respective
ongoing liabilities and obligations to the other with respect to
certain parcels of land commonly referred to as Plaza IV, Plaza V,
Plaza VI, the South Pier, the North Pier, the North Parking Garage and
the South Parking Garage (individually, a "Plaza" and collectively, the
"Premises") at the Harborside Financial Center in Jersey City, New
Jersey, which parcels are more particularly described on Schedule "A"
annexed hereto. On the date hereof, Purchaser has acquired title to,
among other things, the Premises.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. (a) If Purchaser or any affiliate shall commence construction at any
portion of the Premises for any improvements other than for at-grade parking or
a structured parking deck, then Purchaser shall pay to Seller an amount (the
"Contingent Construction Consideration") determined by multiplying the Per
Square Foot Development Consideration shown on Schedule "B" annexed hereto
allocable to the year in which said construction shall have commenced times the
number of square feet to be constructed on said portion of the Premises. For
purposes of this Agreement, construction shall be deemed to have commenced upon
the earlier of (i) excavation for, or the pouring or laying, as the case may be,
of, the foundations or footings for said improvements or (ii) the erection of
any improvements or parts thereof above grade level. Commencement of
construction shall not include demolition of any existing structures,
improvements or parking lots. The payment to Seller made at commencement of
construction (the "Initial Contingent Construction Payment") shall be based upon
the square footage permitted to be built for said improvements pursuant to the
building permit issued by the governmental agency having jurisdiction thereover.
A copy of the building permit shall be delivered to Seller promptly after
issuance thereof. In the event that at the commencement of construction there
shall not have been issued a building permit or other permit or approval setting
forth the allowed square footage to be built, then the square footage permitted
to be built shall, for purposes of calculating the Initial Contingent
Construction Payment, be deemed to be the square footage set forth in Section
2(a) below for the applicable Plaza. Upon completion of construction (as
evidenced by a temporary or permanent certificate of occupancy or similar permit
allowing the use of the improvements for their intended purpose), Purchaser
shall so advise Seller, and Purchaser or Seller, or both, may, at their own
expense, retain a duly licensed bona fide third party architect which is a
member of the American Institute of Architects to measure the square footage
actually built by Purchaser and certify such amount to Purchaser and Seller (the
"Architect's Certification"). Purchaser shall provide access to the building in
order for Seller's architect to make such measurement. A dispute arising out of
such measurement shall be resolved in accordance with Section 10 below. Upon
resolution of a dispute, if there should be one, or if there is no dispute, then
promptly following delivery of the Architect's Certification, if the actual
square footage built shall be greater than the square footage anticipated to be
built at the commencement of construction, Purchaser shall make a payment to
Seller equal to the Contingent Construction Consideration then due Seller (which
shall be based upon the per square foot amount due at the time of commencement
of construction) less the Initial Contingent Construction Payment paid by
Purchaser on account of said construction; if the actual square footage built
shall be less than the square footage anticipated to be built at the
commencement of construction, Seller shall refund to Purchaser an amount equal
to the Initial Contingent Construction Payment less the Contingent Construction
Consideration actually due on account of said construction. The Initial
Contingent Construction Payment shall constitute satisfaction of Purchaser's
obligations hereunder with respect to that portion of the Premises so improved
if neither party commissions an Architect's Certification within thirty (30)
days after the completion of construction or forwards an Architect's
Certification to the other party within sixty (60) days after completion of
construction. If Seller shall fail to reimburse Purchaser based upon the
Architect's Certification, then Purchaser shall have the right, among its other
remedies, to offset against any further Contingent Construction Consideration
which may be due hereunder any amounts which were to have been refunded by
Seller.
(b) In the event that an amended building or other permit
shall be issued during construction, Purchaser shall be obligated to make a
payment to Seller calculated as if said amendment were part of the initial
permit issued, with such payment being due and payable within thirty (30) days
after the issuance thereof.
(c) Seller shall not be entitled to any payment from Purchaser
with respect to construction of any at-grade parking or structured parking deck.
In addition, in determining the square footage to be used in computing the
Contingent Construction Consideration, the square footage shall not include
mechanical or equipment rooms and basement space (unless the basement space is
actually used by third parties paying rent therefor).
(d) If Purchaser shall sub-divide any Plaza, then the
provisions of this Agreement shall apply on a pro-rata basis.
2. (a) If Purchaser shall sell all or any portion of any of the
Premises to a third party who is not affiliated with Purchaser, then Purchaser
shall pay to Seller an amount (the "Contingent Sale Consideration") which, for
Plaza IV, Plaza V, Plaza VI, the North Pier or the South Pier, shall be
determined by multiplying the Per Square Foot Development Consideration
allocable to the year in which the closing of said sale shall occur times the
amount of developable square footage allocable to the Plaza sold, which is
1,000,000 square feet for Plaza IV, 1,500,00 square feet for Plaza V, 1,500,00
square feet for Plaza VI, 250,000 square feet for the North Pier and 250,000
square feet for the South Pier; if the sale is of the North Parking Garage or
South Parking Garage, then if as part of the sale the use of said parcel is
restricted to parking, no Contingent Sale Consideration shall be due and if the
use is not so restricted, then the Contingent Sale Consideration shall be equal
to one-half (1/2) of the net sales proceeds. If as part of any sale, any portion
of the purchase price is paid by purchase money financing, then the net
proceeds, if any, available at the closing thereunder shall be paid to Seller on
account of the Contingent Sale Consideration then due. If any portion of the
Contingent Sale Consideration for such transaction remains unpaid, then the net
amount of any payments made by the mortgagor shall be paid over to Seller as
same are received by the mortgagee. Any portion of the Contingent Sale
Consideration remaining unpaid on account of said purchase money financing
transaction shall be paid on the fifth (5th) anniversary of the closing
thereunder. Unpaid portions of the Contingent Sale Consideration due as a result
of purchase money financing shall accrue interest at the greater of the same
rate paid by the mortgagor under the purchase money financing or the then
applicable minimum imputed interest rate (AFR) as determined under Internal
Revenue Code regulations.
(b) If Purchaser shall enter into one or more long-term ground
or net leases (each lease being referred to as a "Lease") with respect to all or
any portion of the Premises with a third party who is not affiliated with
Purchaser, then the provisions of Section 2(a) shall apply as if the Premises so
leased was sold, except that the amount due Seller shall be paid in five (5)
equal installments, with the first payment being due upon the commencement of
the payment of rent under the Lease and each subsequent payment being due on the
anniversary of the previous payment due date. Unpaid portions of the Contingent
Sale Consideration due as a result of a Lease shall accrue interest at the same
effective rate as Purchaser is then paying to US West Pension Trust, Investment
Management Company under that certain purchase money $___________ note dated on
or about the date hereof; if said note has been satisfied, then interest shall
accrue at the interest rate in effect immediately prior to the satisfaction of
the note.
(c) Seller acknowledges that the provisions of Section 2(a)
shall not apply, and no payment shall be due Seller, upon any transfer or
conveyance in which Purchaser transfers or otherwise conveys all or any portion
of the Premises (i) to an entity which controls or is controlled by Purchaser,
or is controlled by the same entity controlling Purchaser at the time of the
conveyance or (ii) in connection with a joint venture development of the
Premises so conveyed in which Purchaser, or an entity which controls or is
controlled by Purchaser, or which is controlled by the same entity controlling
Purchaser at the time of the conveyance, has a fifty (50%) percent or more
interest. Any such transfer or conveyance, however, shall not release Purchaser
of any obligation it may have to make a Contingent Construction Payment to
Seller in accordance with Section 1 hereof or a Contingent Sale Payment to
Seller if such payment is subsequently due in accordance with Section 2 hereof.
Purchaser shall not be entitled to a release of any Plaza which is so
transferred pursuant to this paragraph (c). As part of said transfer or
conveyance, the transferee shall assume Purchaser's liability hereunder as
applicable to the transferred Plaza.
3. (a) Upon payment of each Initial Contingent Construction Payment or
payment of a Contingent Sale Consideration (collectively, the "Contingent
Consideration"), and provided that Purchaser shall not be in default of its
obligations hereunder, Seller shall deliver a release of this Agreement and such
other documents reasonable requested by Purchaser (the "Release Documents"),
executed in recordable form, releasing this Agreement and any other right, title
and interest of Seller from that portion of the Premises which is the subject of
the Contingent Consideration. The Release Documents shall also include an
acknowledgement setting forth the number of square feet for which payment is
being made. If the Contingent Sale Consideration is not paid in full upon the
commencement of a Lease or on the closing of a sale in which purchase money
financing is provided, all as more particularly provided for in Section 2(b)
above, then Seller nevertheless agrees to perform as required in the first
sentence of this Section 3 and Purchaser shall, at Seller's option, collaterally
assign to Seller or its designee the Lease (pursuant to a collateral assignment
of leases and rents) or the purchase money financing documents, as the case may
be, until payment in full of the Contingent Sale Consideration.
(b) In order to facilitate transactions affecting the Premises
or any portion thereof, Seller agrees that upon request of Purchaser given from
time to time, Seller shall deliver to the New Jersey office designated by
Purchaser of any nationally recognized title company, or authorized agent
thereof, ("Escrowee") the Release Documents for that portion of the Premises
described in Purchaser's request. Said request shall include a description of
the transaction Purchaser anticipates entering into or closing accompanied by a
copy of any letter of intent or contract (with financial terms redacted), the
anticipated Contingent Consideration due on account thereof and the anticipated
date(s) for payment. Escrowee shall hold the Release Documents in escrow,
pending Escrowee's receipt of the Contingent Consideration due on account of
said transaction. Escrowee shall be entitled to release the Release Documents
from escrow and record same, as appropriate, upon Escrowee's delivery to Seller
of the Contingent Consideration then due on account of said transaction.
(c) If Seller and Purchaser dispute the Contingent
Consideration due on account of a particular transaction, Purchaser shall
nevertheless be entitled to proceed with such transaction and close thereunder
so long as Purchaser shall (i) certify to Escrowee the Contingent Consideration
due on account of the transaction then being consummated and that said amount
was calculated in good faith (such certification to be accompanied by
appropriate back-up materials and a description of the transaction and premises
covered) and (ii) shall pay Escrowee, or cause to be paid, the Contingent
Consideration so calculated; provided, however, that if Seller has responded to
Purchaser's request for Release Documents and has calculated an amount which is
different than Purchaser's amount, Purchaser shall escrow the amount calculated
by Seller. If Purchaser shall have paid to Escrowee the Contingent Consideration
so calculated and Seller shall not have delivered the Release Documents,
Escrowee, or the title insurance company or abstract agency then insuring said
transaction, is hereby authorized and directed to insure said transaction free
and clear of this Agreement and any and all right, title and interest of Seller
in and to that portion of the Premises which is the subject of the transaction,
Seller in such event hereby waiving and releasing Escrowee, the company or
agency insuring said transaction and that portion of the Premises which is the
subject of the transaction, from any claim Seller may have with respect thereto.
The Escrowee is to invest the amount so paid, and interest is to be paid Seller
so long as Seller has provided Escrowee with a tax identification number. Upon a
resolution of any dispute, the Escrowee shall distribute the money, plus accrued
interest.
4. This Agreement shall expire and shall be of no further force or
effect on the earlier to occur of (a) the date which is thirty (30) years after
the date hereof (except that the provisions of this Agreement applicable to any
reconciliation of Contingent Consideration as to any development which commenced
prior to the expiration of the thirty (30) years shall survive) or (b) the
payment by Purchaser of Contingent Consideration allocable to two million
(2,000,000) square feet. Upon the expiration of this Agreement, Seller shall
execute and deliver to Purchaser, in recordable form, the Release Documents
applicable to any portion of the Premises which are still encumbered by this
Agreement.
5. Seller shall complete and file such returns and pay all realty
transfer fees and taxes on account of the payment to it of the Contingent
Consideration.
6. (a) This Agreement shall be subject and subordinate in all respects
to any and all mortgages and related security instruments, and to ground or
underlying leases affecting the Premises, and to all renewals, modifications,
consolidations, replacements and extensions thereof. This clause shall be
self-operative and no further instrument of subordination shall be required by
any ground or underlying lessee or by any mortgagees, trustees or other lenders
or representatives thereof. In confirmation of such subordination, Seller shall
execute promptly, at no expense to Purchaser, any instrument or certificate
which Purchaser may reasonably request. In consideration of Seller's
subordination, Purchaser agrees that in the event Purchaser places, refinances,
extends, consolidates or modifies any debt which is secured in whole or in part
by the Premises for which the outstanding principal balance exceeds one hundred
ten million ($110,000,000) dollars, then (i) Purchaser shall cause Cali Realty
Corporation or successor entity to execute a guaranty of the obligations of
Purchaser hereunder, which guaranty shall be in form and substance reasonably
satisfactory to Purchaser and Seller (for purposes of the guaranty, any
foreclosure, deed-in-lieu of foreclosure or similar event shall be deemed a sale
of the Premises) and (ii) the first ten million ($10,000,000) dollars of net
proceeds from any refinancing, extension, consolidation or modification of such
debt shall be shared equally by Purchaser and Seller. Any payment made to Seller
pursuant to the preceding sentence shall be deemed a payment of Contingent
Consideration, with the square footage applicable to said payment being
calculated by dividing the amount so paid by the Per Square Foot Development
Consideration; such payment shall also be on account of the payments described
in Section 7 below.
(b) Notwithstanding the foregoing provisions of this Section
6, this Agreement shall not be subordinate to any construction financing since,
pursuant to the terms hereof, Purchaser's obligations hereunder are to be
satisfied upon any construction for which such financing is to be applicable and
this Agreement is to be released from the applicable Plaza upon such payment. In
addition, if Purchaser has defaulted on any monetary obligation hereunder and
such default remains uncured after notice thereof from Seller and the passage of
ten (10) days to cure same, this Agreement will not be subordinate to any
financing which is consummated during the continuance of said default.
7. (a) From the date hereof through November __, 1999 (the "3 Year
Prepayment Period"), Purchaser shall have the right to satisfy all of its
obligations hereunder, and obtain the Release Documents, upon payment to Seller
of Six Million Four Hundred Seventy Five Thousand ($6,475,000) Dollars (the "3
Year Prepayment Amount"), which 3 Year Prepayment Amount shall be reduced dollar
for dollar by any payments made to Seller hereunder prior to said date.
(b) From November __, 1999 through November __, 2002 (the "6
Year Prepayment Date"), Purchaser shall have the right to satisfy all of its
obligations hereunder, and obtain the Release Documents, upon payment to Seller
of Eight Million Three Hundred Eighty Six Thousand ($8,386,000) Dollars (the "6
Year Prepayment Amount"), which 6 Year Prepayment Amount shall be reduced dollar
for dollar by any payments made to Seller hereunder prior to said date. If
during the 3 Year Prepayment Period Purchaser shall have made payments to Seller
of at least Three Million Two Hundred Thirty Seven Thousand Five Hundred
($3,237,500) Dollars, then the 6 Year Prepayment Amount shall be reduced to Four
Million One Hundred Ninety Two Thousand ($4,192,000) Dollars and further reduced
by the excess of any payments made to Seller during the 3 Year Prepayment Period
over Three Million Two Hundred Thirty Seven Thousand Five Hundred ($3,237,500)
Dollars.
(c) If Purchaser shall not have made the 3 Year Prepayment
Amount or 6 Year Prepayment Amount on or before the 6 Year Prepayment Date, then
for the period from the 6 Year Prepayment Date through the date which is 6
months following the date that Purchaser gives Seller notice of the 6 Year
Prepayment Date, Seller shall have the right to cause Purchaser to pay to it the
6 Year Prepayment Amount, as the same may have been reduced as provided in
paragraph (b) above. Simultaneous with such payment, Seller shall deliver to
Purchaser the Release Documents.
8. Within ten (10) days after written request of Seller or Purchaser
given from time to time, the other party shall certify, in recordable form, to
such parties as are requested of it, such matters as are reasonably requested,
including, without limitation, the date of this Agreement and any modifications
thereof, the remaining term of this Agreement based upon the number of days
elapsed, the portions of the Premises still encumbered by this Agreement, the
payments made to date and the date said payments were made, and the number of
square feet for which payment has been made. Any parties to whom said
certifications are made shall be entitled to rely on same.
9. Any payments to be made hereunder shall be deemed proper if made by
certified or bank check, drawn on an institution with an office in the State of
New Jersey or New York, and payable directly to the order of Seller or its
designee. Seller shall have the right to designate that funds be sent to it by
wire transfer, so long as said wire transfer instructions are sent to Purchaser
and Escrowee, if applicable, at least three (3) business days prior to the
anticipated date of funding.
10. Purchaser shall give Seller at least seven (7) days notice of the
date that Purchaser anticipates making a payment to Seller of Contingent
Consideration. All payments to be made to Seller shall be sent in a manner
permitted hereunder and shall be made to the Seller named in the introductory
paragraph of this Agreement unless and until (i) Seller gives a notice to
Purchaser in the manner required by this Agreement advising of a change of name,
address or both, of Seller and (ii) a statement of such change of name, address
or both is recorded against any Premises still encumbered by this Agreement at
the time of such change. Any notice to Purchaser is to state the name of this
Agreement and to provide that the notice is a notice changing the name, address,
or both, of the party to whom payments are to be made hereunder. Until Purchaser
receives notice of such changes, then so long as Purchaser forwards payment of
any Contingent Consideration in the manner so required, Purchaser shall be
deemed to have satisfied its obligation hereunder with respect to such delivery,
notwithstanding any failure of Seller to have an office at such address.
11. If Purchaser or Seller shall dispute the Architect's Certification
provided by the other, then the disputing party shall advise the other within
thirty (30) days of receipt of the Architect's Certification, and shall
commission an Architect's Certification to be completed within thirty (30) days
after delivery of the dispute notice. During said thirty (30) day period, the
party which commissioned the first Architect's Certification shall have the
right to cause its Architect's Certification to be revised. At the end of the
aforedescribed thirty (30) day period, Seller and Purchaser shall arrange for an
in-person simultaneous exchange of each party's Architect's Certification at any
of the existing buildings then comprising the Harborside Financial Center. If
the calculations set forth in each party's Architect's Certification shall
differ by no more than 5,000 square feet, then the square footage shall be the
average of the two calculations. If the difference in square footage shall be
greater than 5,000 square feet, then each party's architect shall designate a
third architect within five (5) days after said exchange, failing which the
architect shall be selected by the American Arbitration Association, which
selection and resolution of the dispute shall be conducted in accordance with
its then existing rules and procedures. Within thirty (30) days after the
designation of the third architect, the architects shall adopt, by a majority
decision, one of the calculations set forth in the Architect's Certification.
Said determination shall be final and binding upon the parties hereto and
neither party shall have the right to appeal such decision.
12. All notices, demands, requests, or other writings in this agreement
provided to be given or made or sent, or which may be given or made or sent, by
either party hereto to the other shall be in writing and shall be delivered by
depositing the same with any nationally recognized overnight delivery service,
or by telecopy or fax machine, in either event with all transmittal fees
prepaid, properly addressed, and sent to the following addresses:
If to Purchaser: Cali Harborside (Fee) Associates L.P.
c/o Cali Realty Corporation
11 Commerce Drive
Cranford, New Jersey 07016
Attention: Roger W. Thomas, Esq.
with a copy to: Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attention: Andrew S. Levine, Esq.
If to Seller: Harborside Exchange Place Limited Partnership
c/o Jones Lang Wootton Realty Advisors
335 Madison Avenue
New York, New York 10017
Attention: Stephen J. Furnary
with a copy to: Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
Attention: Richard R. Kalikow, Esq.
or to such other address as either party may from time to time designate by
written notice to the other. Notices given by (i) overnight delivery service as
aforesaid shall be deemed received and effective on the first business day
following such dispatch and (ii) telecopy or fax machine shall be deemed given
at the time and on the date of machine transmittal provided same is sent prior
to 4:00 p.m. on a business day (if sent later, then notice shall be deemed given
on the next business day) and if the sending party receives a written send
verification on its machines and forwards a copy thereof by regular mail
accompanied by such notice or communication. Notices may be given by counsel for
the parties described above, and such Notices shall be deemed given by Seller or
Purchaser, as the case may be, for all purposes hereunder.
13. This Agreement constitutes the entire agreement between the parties
and incorporates and supersedes all prior negotiations and discussions between
the parties.
14. This Agreement cannot be amended, waived or terminated orally, but
only by an agreement in writing signed by the party to be charged.
15. This Agreement shall be interpreted and governed by the laws of the
State of New Jersey and shall be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and assigns. Seller shall have
the right to assign its rights hereunder to any affiliate of US West Pension
Trust so long as said affiliate assumes Seller's obligations hereunder and
Purchaser is delivered a copy of said assumption; no such assignment shall
relieve Seller of its obligations hereunder.
16. If any term, covenant or condition of this Agreement is held to be
invalid, illegal or unenforceable in any respect, this Agreement shall be
construed without such provision.
17. In the event that there shall be any subsequent development on a
Plaza following the release of same from the provisions of this Agreement,
Purchaser shall nevertheless be obligated to make a payment to Seller as a
result of such subsequent development, which payment shall be calculated and
paid in accordance with the terms and conditions hereof as if this Agreement
were still applicable to the Plaza.
18. This Agreement shall not be deemed to create any partnership or
joint venture between Seller and Purchaser with respect to the Premises.
19. Notwithstanding any other provision in this Agreement or default of
the Purchaser hereunder, the Seller hereby agrees and confirms that the
execution and delivery of the deed pursuant to the Purchase Agreement is
absolute and unconditional and conveys fee simple absolute title to the
Purchaser and the Seller agrees that in any action to enforce any provision of
this Agreement it will not challenge or in any manner whatsoever seek to impair
or void such conveyance in whole or in part.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
SELLER:
HARBORSIDE EXCHANGE PLACE LIMITED PARTNERSHIP L.P.
By:_____________________________
Name:
Title:
PURCHASER:
CALI HARBORSIDE (FEE)
ASSOCIATES L.P.
By:_______________________________
Name:
Title:
********************************************************************************
REVOLVING CREDIT FACILITY AGREEMENT
Dated as of November __, 1996
among
CALI REALTY, L.P.,
as Borrower,
THE LENDERS PARTIES HERETO,
and
PRUDENTIAL SECURITIES CREDIT CORP.,
as Administrative Agent
$80,000,000
********************************************************************************
TABLE OF CONTENTS
ARTICLE I. - DEFINITIONS; ACCOUNTING MATTERS
SECTION 1.01. Certain Defined Terms ............................................
SECTION 1.02. Other Definitional Provisions ....................................
SECTION 1.03. Accounting Terms and Determinations ..............................
ARTICLE II. - COMMITMENTS; LOANS; NOTES; PREPAYMENTS
SECTION 2.01. Loans .........................................................
SECTION 2.02. Borrowings ....................................................
SECTION 2.03. Full Recourse .................................................
SECTION 2.04. Notes .........................................................
SECTION 2.05. Optional Prepayments ..........................................
SECTION 2.06. Mandatory Prepayments; Permanent Reduction of Commitments......
SECTION 2.07. Mandatory Reductions of Commitments............................
SECTION 2.08. Continuation...................................................
SECTION 2.09. Optional Termination or Reduction of Commitments...............
SECTION 2.10. Refinancing of Loans...........................................
SECTION 2.11. Replacement Collateral.........................................
ARTICLE III. - PAYMENTS OF PRINCIPAL AND INTEREST...............................
SECTION 3.01. Repayment of Loans.............................................
SECTION 3.02. Interest.......................................................
SECTION 3.03. Interest Adjustments...........................................
ARTICLE IV. - PRO RATA TREATMENT, PAYMENTS, COMPUTATIONS........................
SECTION 4.01. Pro Rata Treatment and Payments................................
SECTION 4.02. Computations...................................................
SECTION 4.03. Minimum Amounts................................................
SECTION 4.04. Certain Notices................................................
SECTION 4.05. Set-Off........................................................
ARTICLE V. - YIELD PROTECTION, ETC..............................................
SECTION 5.01. Additional Costs...............................................
SECTION 5.02. Illegality.....................................................
SECTION 5.03. Treatment of Affected Loans....................................
SECTION 5.04. Compensation...................................................
SECTION 5.05. Withholding Taxes..............................................
SECTION 5.06. Indemnity......................................................
SECTION 5.07. Duty to Mitigate...............................................
ARTICLE VI. - CONDITIONS PRECEDENT..............................................
SECTION 6.01. Conditions to Initial Loan.....................................
SECTION 6.02. Conditions to Each Loan........................................
ARTICLE VII. - REPRESENTATIONS AND WARRANTIES...................................
SECTION 7.01. Partnership Existence..........................................
SECTION 7.02. Financial Condition............................................
SECTION 7.03. Litigation.....................................................
SECTION 7.04. No Breach......................................................
SECTION 7.05. Partnership Power; Authorization; Enforceable Obligations......
SECTION 7.06. Approvals......................................................
SECTION 7.07. No Default.....................................................
SECTION 7.08. Ownership of Property..........................................
SECTION 7.09. Taxes..........................................................
SECTION 7.10. Use of Credit..................................................
SECTION 7.11. ERISA..........................................................
SECTION 7.12. Investment Company Act.........................................
SECTION 7.13. Public Utility Holding Company Act.............................
SECTION 7.14. Environmental Matters..........................................
SECTION 7.15. True and Complete Disclosure...................................
SECTION 7.16. Labor Matters..................................................
SECTION 7.17. Pledged Partnership Interests..................................
ARTICLE VIII. - COVENANTS OF THE OPERATING PARTNERSHIP..........................
SECTION 8.01. Financial Statements...........................................
SECTION 8.02. Certificates and Other Information.............................
SECTION 8.03. Litigation.....................................................
SECTION 8.04. Conduct of Business, Existence, Etc............................
SECTION 8.05. Payment of Obligations.........................................
SECTION 8.06. Insurance......................................................
SECTION 8.07. Limitation on Liens............................................
SECTION 8.08. ERISA..........................................................
SECTION 8.09. Use of Proceeds................................................
SECTION 8.10. Environmental Laws.............................................
SECTION 8.11. Hazardous Substances...........................................
SECTION 8.12. Claims.........................................................
SECTION 8.13. Maintenance of Ownership.......................................
SECTION 8.14. Indebtedness...................................................
SECTION 8.15. Dividends and Distributions....................................
SECTION 8.16. Assets of Holdings.............................................
SECTION 8.17. Compliance Certification.......................................
ARTICLE IX. - EVENTS OF DEFAULT.................................................
SECTION 9.01 Events of Default..............................................
ARTICLE X. - THE ADMINISTRATIVE AGENT...........................................
SECTION 10.01. Appointment....................................................
SECTION 10.02. Delegation of Duties...........................................
SECTION 10.03. Exculpatory Provisions.........................................
SECTION 10.04. Reliance by Administrative Agent...............................
SECTION 10.05. Notice of Default..............................................
SECTION 10.06. Non-Reliance on Administrative Agent and Other Lenders.........
SECTION 10.07. Reimbursement and Indemnification..............................
SECTION 10.08. Administrative Agent in Its Individual Capacity................
SECTION 10.09. Successor Administrative Agent.................................
SECTION 10.10. Collateral Holder..............................................
ARTICLE XI. - MISCELLANEOUS.....................................................
SECTION 11.01. No Waiver; Cumulative Remedies.................................
SECTION 11.02. Notices........................................................
SECTION 11.03. Expenses.......................................................
SECTION 11.04. Amendments.....................................................
SECTION 11.05. Successors and Assigns.........................................
SECTION 11.06. Assignments and Participations.................................
SECTION 11.07. Adjustments....................................................
SECTION 11.08. Survival.......................................................
SECTION 11.09. Captions.......................................................
SECTION 11.10. Counterparts...................................................
SECTION 11.11. Severability...................................................
SECTION 11.12. Integration....................................................
SECTION 11.13. Governing Law..................................................
SECTION 11.14. Submission to Jurisdiction.....................................
SECTION 11.15. Acknowledgments................................................
SECTION 11.16. Waiver of Jury Trial...........................................
SCHEDULES
Schedule I Commitments
Schedule II Addresses for Notices
Schedule III Excess Qualified Asset Value
EXHIBITS
Exhibit A Form of Promissory Note
Exhibit B Form of Pledge Agreement
Exhibit C Form of Company Pledge Agreement
Exhibit D Form of Assignment and Acceptance
Exhibit E Form of Notice of Borrowing
THIS REVOLVING CREDIT FACILITY AGREEMENT dated as of November ______,
1996, is entered into by and among Cali Realty, L.P., a Delaware limited
partnership (the "Operating Partnership"), the several lenders from time to time
parties hereto (the "Lenders"), and Prudential Securities Credit Corp. ("PSC"),
a Delaware corporation, as administrative agent for the Lenders (in such
capacity, the "Administrative Agent").
WHEREAS, the Operating Partnership has requested the Lenders to make
revolving loans to the Operating Partnership for working capital purposes,
including the acquisition or improvement of real property, and other general
purposes of the Operating Partnership, up to an aggregate principal amount at
any one time outstanding equal to $80,000,000, pursuant to and subject to the
terms and conditions set forth herein, and each Lender is willing to make such
loans on and subject to the terms and conditions hereof in the maximum amount
set forth opposite the name of such Lender on Schedule I; and
WHEREAS, to provide assurance for the repayment of the revolving loans
and all other Obligations (as hereinafter defined) of the Operating Partnership
hereunder: (1) the Operating Partnership has agreed to secure the loans by
providing or causing to be provided to the Administrative Agent, for the benefit
of the Lenders, a first priority pledge of: (i) a 99% limited partnership
interest owned by the Operating Partnership in Holdings (as hereinafter defined)
and (ii) a 99% limited partnership interest owned by the Operating Partnership
in the UREs (as hereinafter defined), all pursuant to the Pledge Agreement (as
hereinafter defined); and (2) the Company (as hereinafter defined) has agreed to
secure the loans by providing or causing to be provided to the Administrative
Agent, for the benefit of the Lenders, a first priority pledge of 100% of the
issued and outstanding capital stock of the G.P. Subs (as hereinafter defined)
owned by the Company pursuant to the Company Pledge Agreement (as hereinafter
defined). In taking the pledge of the Pledged Partnership Interests and the
Pledged Stock, Lenders intend that they have the ability, on an Event of Default
by the Operating Partnership, to obtain full and absolute control over the
Subject Property.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, the Operating Partnership, the Lenders and the Administrative
Agent hereby agree as follows:
I. ARTICLE I.
DEFINITIONS; ACCOUNTING MATTERS
I.01.Certain Defined Terms. As used herein, the following terms shall
have the following meanings:
"Additional Costs" has the meaning set forth in Section 5.01(a).
"Administrative Agent" means Prudential Securities Credit Corp., a
Delaware corporation (formerly known as Prudential Securities Realty Funding
Corporation), as administrative agent for the Lenders, or any successor
administrative agent approved in accordance with Section 10.09.
"Affiliate" means any Person that directly or indirectly controls, or
is under common control with, or is controlled by, any other Person. As used in
this definition, "control" (including, with its correlative meaning, "controlled
by" and "under common control with") shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of the other Person (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise).
"Agreement" means this Revolving Credit Facility Agreement, as amended,
supplemented or otherwise modified from time to time.
"Amortized Leasing Costs" means, for any calendar quarter, the
aggregate amount of all tenant improvement expenses and leasing commissions for
the Subject Property allocated to such calendar quarter obtained by amortizing
all tenant improvement expenses and leasing commissions incurred by the
Operating Partnership or its Subsidiaries for the Subject Property during the
term of this Agreement in accordance with GAAP over the initial lease term of
each lease for which such expenses and commissions were incurred.
"Applicable Lending Office" means, with respect to any of the Lenders
or Reference Banks, the branch or branches (or Affiliate or Affiliates) from
which any loans of such Lender or Reference Bank, as the case may be, are made
or maintained under this Agreement, as designated by, or by notice provided to,
the Administrative Agent from time to time.
"Applicable Margin" means 125 basis points.
"Assignee" means any Lender or any Affiliate thereof, or, with the
consent of the Administrative Agent and the Operating Partnership (which shall
not be unreasonably withheld), any additional lender or financial institution,
who receives an assignment of all or any part of a Lender's rights and
obligations under the Agreement, the Notes and the other Credit Facility
Documents pursuant to Section 11.06.
"Assignment and Acceptance" means an agreement in the form of Exhibit D
hereto, executed by the assignor, assignee and other parties as contemplated
thereby.
"Assumed Debt" means: (i) the indebtedness to be owed by one or more of
the Operating Partnership, Holdings, Holdings-Parcel I or the UREs to
Northwestern Mutual Life Insurance Company and Principal Mutual Life Insurance
Company in the original principal amount of $110,000,000 and having an unpaid
principal balance of $______________ or less on the Closing Date, which is
secured by a first mortgage on the Subject Property (other than the undeveloped
parcels comprising the Subject Property), and (ii) the indebtedness to be owed
by one or more of the Company, the Operating Partnership or Holdings-Parcel I to
U S West Pension Trust, Investment Management Company in the maximum principal
amount of $________________ and having an initial unpaid principal balance of
not more than $________________ on the Closing Date, which is or will be secured
by a first mortgage on fee title to the tract upon which the building known as
Plaza I of the Harborside Financial Center, in Jersey City, New Jersey is
located. Lenders acknowledge that the principal amount of the indebtedness owed
to U S West Pension Trust, Investment Management Company is intended to increase
as the principal balance of the remainder of the Assumed Debt decreases.
"Auditor" means Price Waterhouse LLP or such other "Big Six" accounting
firm as may be acting as the Company's accountants at the time of any
determination to be made by the Auditor, unless Price Waterhouse (or the
Company's other accountants at such time) declines to act as Auditor, in which
event the Auditor shall be one of the "Big Six" accounting firms selected by
Administrative Agent.
"Available Revolving Credit Commitment" means, as to any Lender, at a
particular time, an amount equal to (a) the amount of such Lender's Commitment
at such time less (b) the sum of the aggregate unpaid principal amount at such
time of all Loans made by such Lender pursuant to Section 2.01; collectively, as
to all the Lenders, the "Available Revolving Credit Commitments"; provided,
however, that (A) the Available Revolving Credit Commitment of any Lender shall
not exceed the product of (1) such Lender's Commitment Percentage and (2) the
difference between (I) the total available Commitments and (II) the sum of the
aggregate unpaid principal amount at such time of all outstanding Loans made by
all Lenders pursuant to this Agreement; and (B) the Available Revolving Credit
Commitments shall not exceed the difference between (I) the total available
Commitments and (II) the sum of the aggregate unpaid principal amount at such
time of all outstanding Loans made by all Lenders pursuant to this Agreement.
"Bankruptcy Code" means the Federal Bankruptcy Code of 1978, as amended
from time to time.
"Basle Accord" has the meaning set forth in Section 5.01(c).
"Benefited Lender" has the meaning set forth in Section 11.07.
"Bond Indenture" has the meaning assigned thereto in the Existing
Credit Facility Documents.
"Borrowing" means a borrowing by the Operating Partnership under the
Notes pursuant to the terms of this Agreement.
"Borrowing Date" means any Business Day specified in a notice pursuant
to Section 2.02 as a date on which the Operating Partnership requests the
Lenders to make Loans hereunder.
"Business Day" means any day on which both (a) commercial banks are not
authorized or required to close in New York City, and (b) dealings in Dollar
deposits are carried out in the London interbank market.
"Capitalized Lease" shall mean, with respect to any Person, any lease
or other agreement with respect to the use of Property that, in accordance with
GAAP, must be capitalized on the lessee's or user's balance sheet or the amount
of the liability which, if so capitalized, must be disclosed in a note to such
balance sheet.
"Capitalized Lease Obligation" of any Person shall mean, as of any date
as of which the amount thereof is to be determined, the amount of the liability
capitalized or disclosed (or which should be disclosed), in accordance with
GAAP, on a balance sheet (or in a note to such balance sheet) of such Person in
respect of a Capitalized Lease of such Person.
"Closing Date" means the date on which the conditions precedent to the
making of the Loans as set forth in Section 6.01 shall be satisfied or waived by
the Majority Lenders, on behalf of all Lenders, and the first Advance is made
hereunder, which in no event shall be later than November 30, 1996.
"Collateral" means the Property described in the Pledge Agreement and
the Company Pledge Agreement.
"Collateral Holder" means PSC in its capacity as Administrative Agent
and as custodian of the Collateral under the Pledge Agreement and the Company
Pledge Agreement, and any successor thereto appointed in accordance with Section
10.09.
"Commitment" means, as to any Lender, the obligation of such Lender to
make Loans to the Operating Partnership in an aggregate principal amount at any
one time outstanding not to exceed the amount set forth opposite such Lender's
name on Schedule I hereto, in each case as such amount may be reduced from time
to time in accordance with the provisions of this Agreement, but in no event
shall the Commitments of all the Lenders collectively exceed $80,000,000 in
aggregate principal amount at any one time outstanding; provided, however, that
if the DSCR for the Subject Property as reasonably determined by the
Administrative Agent as of the end of any calendar quarter following receipt by
the Administrative Agent of the financial information for such quarter under
Section 8.01 below is less than 1.4 to 1 (rounded to the nearest one-tenth), the
Commitments will be temporarily reduced on a pro rata basis as provided in
Section 4.01(a) by an amount (rounded to the nearest $1,000,000) which is
sufficient to maintain a DSCR for the Subject Property of not less than 1.4 to 1
(rounded to the nearest one-tenth) in the future. The Commitments of all the
Lenders are herein sometimes referred to as the "Commitments". If the total
Commitments are reduced below $80,000,000 to satisfy the foregoing requirement
relating to the DSCR for the Subject Property and the DSCR for the Subject
Property subsequently increases, the Commitments shall be correspondingly
increased (subject to any other limits or restrictions on the amount of the
Commitments contained herein).
"Commitment Letter" refers to the Commitment Letter, dated as of
September 20, 1996, between the Operating Partnership and PSC, regarding, among
other matters, this Agreement.
"Commitment Percentage" means, as to any Lender at any time, the
percentage which such Lender's Commitment then constitutes of the aggregate
Commitments (or, at any time after the Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such Lender's
Loans then outstanding constitutes of the aggregate principal amount of all
Lenders' Loans then outstanding).
"Commitment Period" has the meaning set forth in Section 2.01.
"Commitment Termination Date" means the earliest to occur of (i) the
Maturity Date, (ii) the Refinance Loan Closing Date for any term loan which
refinances the indebtedness evidenced by this Agreement under Section 2.10,
(iii) such earlier date on which the Commitments shall terminate in accordance
with Article IX, and (iv) the date on which the Commitments are reduced to zero
pursuant to any mandatory prepayment, mandatory reduction or optional
termination or reduction of the Commitment under Article II hereof.
"Company" means Cali Realty Corporation, a Maryland corporation, which
is the sole general partner of the Operating Partnership.
"Company Pledge Agreement" means the pledge agreement between the
Company and the Administrative Agent, substantially in the form of Exhibit C, as
the same may be amended, supplemented or otherwise modified from time to time.
"Contingent Consideration Liability" means the contingent liability of
Holdings which may be due and owing to Harborside Exchange Place Limited
Partnership, a New Jersey limited partnership, its successors and assigns, upon
the future development of certain undeveloped parcels of the Subject Property
pursuant to a certain Contingent Consideration Agreement executed on or about
the date hereof and which is to be reflected on the books and records of
Holdings as a contingent liability in accordance with GAAP.
"Consolidated Subsidiary" means, for any Person, each Subsidiary of
such Person (whether now existing or hereafter created or acquired), the
financial statements of which shall be (or should have been) consolidated with
the financial statements of such Person in accordance with GAAP.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking (including, without limitation, its charter, bylaws or other
organizational documents) to which such Person is a party or by which it or any
of its Property is bound.
"Credit Facility Documents" means this Agreement, the Notes issued
under this Agreement, the Commitment Letter, the Pledge Agreement, the Company
Pledge Agreement and any other ancillary documentation which is required to be
otherwise executed by the Operating Partnership or any Third Party and delivered
to the Administrative Agent in connection with this Agreement, together with any
rider, addendum or amendment thereto, as amended from time to time.
"Debt Service" for the REIT Group, as of a particular determination
date, means the total of all principal and interest payments on Indebtedness of
the REIT Group (including debt service on the Commitments under this Agreement
and the Commitments under the Existing Credit Facility Documents).
"Default" means an Event of Default or any event, act or condition
which merely with notice or lapse of time, or both, would become an Event of
Default.
"Dollars" and "$" means lawful money of the United States of America.
"DSCR for the Subject Property" means, as of a particular determination
date, the debt service coverage ratio for the Subject Property, which shall be
calculated in the following manner: (i) the aggregate net cash flow for the
Subject Property (on a cash basis, after Amortized Leasing Costs and capital
expenses but before debt service on the Assumed Debt or the credit facility
described in this Agreement) for the calendar quarter just ending and the three
(3) immediately preceding calendar quarters, divided by (ii) the actual interest
expense on the Assumed Debt and pro forma debt service on the maximum aggregate
Commitments available under this Agreement (i.e., $80,000,000) for the four (4)
calendar quarters described above, assuming interest accrues on unpaid principal
at the LIBOR Rate (determined on the last business day of the calendar quarter
for which such debt service coverage ratio is being determined using an assumed
Interest Period of one month) plus 125 basis points and interest payments only.
Notwithstanding anything hereinabove to the contrary, the calculation of the
DSCR for the Subject Property shall not include any calendar quarter which ended
prior to the date of this Agreement and such calculation for the first three (3)
quarters ending during the term of this Agreement shall be based on the net cash
flow and debt service for one (1), two (2) and three (3) calendar quarters,
respectively.
"EBITDA" means as to any Person, for any determination period, earnings
before interest, taxes, depreciation and amortization, determined in accordance
with GAAP.
"Environmental Laws" means any and all present and future federal,
state, municipal and local laws, rules, regulations, statutes, ordinances or
codes, common law causes of action, judicial and administrative decisions, and
any orders or decrees of any Governmental Authority, in each case as now or
hereafter in effect, relating to the regulation or protection of the environment
or to emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals or toxic or hazardous substances or wastes into the
indoor or outdoor environment, including, without limitations, ambient air,
soil, surface water, ground water, wetlands, land or subsurface strata, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, chemicals
or toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated thereunder.
"ERISA Affiliate" means any corporation or trade or business that is a
member of any group of organizations (a) described in Section 414(b) or 414(c)
of the Internal Revenue Code of which the Operating Partnership is a member, and
(b) solely for purposes of potential liability under Section 302(c)(11) of ERISA
and Section 412(c)(11) of the Internal Revenue Code and the Lien created under
Section 302(f) of ERISA and Section 412(n) of the Internal Revenue Code,
described in Section 414(m) or 414(o) of the Internal Revenue Code of which the
Operating Partnership is a member.
"Event of Default" means any of the events specified in Article IX.
"Excess Qualified Asset Value" means, for purposes of determining Net
Worth under this Agreement, the aggregate amount by which the stipulated values
listed on Schedule III for those properties owned by one or more members of the
REIT Group listed on Schedule III exceed the values for such properties
determined under GAAP.
"Existing Collateral" means the Pledged Junior Bonds and the
instruments evidencing the Pledged Junior Bonds, and all interest, cash,
instruments and other Property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Pledged
Junior Bonds, and any other proceeds of the Pledged Junior Bonds.
"Existing Credit Facility Documents" means the Revolving Credit
Facility Agreement dated August 31, 1994 among the Operating Partnership, the
lenders party thereto and the Administrative Agent as amended from time to time,
and the other Credit Facility Documents (as that term is defined in said
Revolving Credit Facility Agreement), as amended from time to time, pursuant to
which the Pledged Junior Bonds were pledged by the Operating Partnership to the
Administrative Agent, for the benefit of the Lenders.
"Existing Pledge Agreement" means the pledge agreement among the
Operating Partnership, the Company and the Administrative Agent dated August 31,
1994, as the same may be amended, supplemented or otherwise modified from time
to time.
"GAAP" means generally accepted accounting principles in the United
States of America as of the date of the applicable financial report or
determination.
"Governmental Authority" means any federal, state or other political
subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
"G.P. Subs" means the following corporations: Cali Sub X, Inc., a
Delaware corporation, and Cali Sub XI, Inc., a Delaware corporation, each of
which is the sole general partner of one or more of Holdings, Holdings-Parcel I
and/or the UREs.
"Guaranty Obligation" means all obligations, contingent or otherwise,
of any Person guaranteeing or having the economic effect of guaranteeing in any
manner, whether directly or indirectly, any Indebtedness of any other Person,
including any obligation (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or to purchase (or advance or
supply funds for the purchase of) any security for the payment of such
Indebtedness, (ii) to purchase or lease (or advance or supply funds for the
purchase or lease of) any Property, securities or services for the purpose of
assuring the owner of such Indebtedness of the payment of such Indebtedness, or
(iii) to maintain working capital, equity capital or compliance with any other
financial condition of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or satisfy such condition.
"Hazardous Substances" means, collectively, (a) any petroleum or
petroleum products or by-products, flammable materials, explosives, radioactive
materials, asbestos-containing materials, urea formaldehyde foam insulation, and
transformers or other equipment that contain dielectric fluid containing
polychlorinated biphenyls (PCB's), (b) any infectious, carcinogenic, mutagenic,
or etiologic agents, pesticides, defoliants or any other chemicals or other
materials or substances which are now or hereafter become defined as or included
in the definition of "hazardous substances", "hazardous wastes", "hazardous
materials" "extremely hazardous wastes", "restricted hazardous wastes", "toxic
substances", "toxic pollutants", "contaminants", "pollutants" or words of
similar import or meaning under any Environmental Law, and (c) any other
chemical or other material or substance, exposure to which is now or hereafter
prohibited, limited or regulated under any Environmental Law.
"Holdings" means Cali Harborside (Fee) Associates L.P., a New Jersey
limited partnership, formed solely for the purpose of acquiring fee title to all
of the Subject Property (which excludes fee title to the tract known as Plaza I
of Harborside Financial Plaza), its successors and permitted assigns.
"Holdings-Parcel I" means Cali Harborside Plaza I (Fee) Associates
L.P., a New Jersey limited partnership, formed solely for the purpose of
acquiring fee title to the tract known as Plaza I of Harborside Financial Plaza
in Jersey City, New Jersey, its successors and permitted assigns.
"Indebtedness" means, for any Person, as of any date as of which the
amount thereof is to be determined, whether secured or unsecured, (a) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (b) all obligations of such Person upon which interest charges are
customarily paid, (c) all obligations of such Person under conditional sale or
other title retention agreements relating to Property purchased by such Person,
(d) all obligations of such Person issued or assumed as the deferred purchase
price of Property or services (other than accounts payable to suppliers incurred
in the ordinary course of business and paid within ninety (90) days after the
same are due), (e) all Indebtedness of other Persons to the extent secured by
(or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any lien or security interest on Property owned
or acquired by such Person, whether or not the obligations secured thereby have
been assumed, (f) all Capitalized Lease Obligations of such Person, (g) all
Guaranty Obligations, (h) obligations of such Person in respect of any Interest
Rate Protection Agreements, and (i) obligations of such Person in respect of
commercial letters of credit, acceptance facilities, drafts or similar
instruments issued or accepted by banks and other financial institutions for the
account of such Person and matured reimbursement obligations in respect of
standby letters of credit.
"Initial Date" means (a) in the case of the Administrative Agent and
each Person who is a Lender as of the date of this Agreement, the date of this
Agreement, and (b) in the case of each other Lender or a Participant, the date
upon which it became a Lender or Participant.
"Interest Deficit" has the meaning set forth in Section 3.03(a).
"Interest Payment Date" means (a) the last day of each Interest Period,
or (b) the Maturity Date, as applicable.
"Interest Period" means, with respect to any Loan, each period
commencing on the date such Loan is made or the day following the last day of
the preceding Interest Period and ending on the numerically corresponding day
(or, if there is no corresponding day, the last day) in the calendar month that
is one, two or three months thereafter (as the Operating Partnership may select
as provided in Section 4.04) except that each Interest Period that commences on
the last Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (a) any Interest Period that would otherwise end
after the Maturity Date shall end on the Maturity Date; and (b) each Interest
Period that would otherwise end on a day which is not a Business Day shall end
on the next succeeding Business Day (or, if such next succeeding Business Day
falls in the next succeeding calendar month, on the next preceding Business
Day).
"Interest Rate Protection Agreement" means, for any Person, an interest
rate swap, cap or collar agreement or similar arrangement between such Person
and one or more financial institutions providing for the transfer or mitigation
of interest risks either generally or under specific contingencies. For purposes
hereof, the "credit exposure" at any time of any Person under an Interest Rate
Protection Agreement to which such Person is a party shall be determined in
accordance with the standard methods of calculating credit exposure under
similar arrangements as prescribed from time to time by the Administrative
Agent, taking into account potential interest rate movements and the termination
provisions and notional principal amount and term of such Interest Rate
Protection Agreement.
"Internal Revenue Code" means the Internal Revenue Code of 1986 and the
rules and regulations issued thereunder, as amended from time to time, or any
successor provision thereto.
"Lenders" means the several lenders from time to time parties hereto as
set forth in the recitals of this Agreement.
"LIBOR Base Rate" means, for any Interest Period,
(a) either (i) the arithmetic mean of the offered rates which
the Reference Banks are quoting, as of 11:00 a.m. (London time) on the
relevant LIBOR Determination Date, for United States dollar deposits
having a term comparable to such Interest Period and in an amount
comparable to the principal amount of the Loan to be made by the
Lenders for such Interest Period, at the principal London office of
each of the Reference Banks or those of them (being at least two in
number) at which such offered quotations are, in the reasonable opinion
of the Administrative Agent, being so made, or (ii) if fewer than two
such quotations are provided to the Administrative Agent, the
arithmetic mean of the rates quoted by money center banks in New York,
New York, selected by the Administrative Agent, as of 11:00 a.m. (New
York City time), on the relevant LIBOR Determination Date, for loans in
United States dollars having a term comparable to such Interest Period
and in an amount comparable to the principal amount of the Loan to be
made by the Lenders for such Interest Period to leading European banks
for such Interest Period; or
(b) if (i) on any LIBOR Determination Date the Administrative
Agent is unable to determine the LIBOR Base Rate in the manner provided
in paragraph (a) above, or (ii) setting the LIBOR Rate at the rate
computed based on the determination of LIBOR Base Rate as provided in
paragraph (a) above would be unlawful, then the LIBOR Base Rate for
such Interest Period shall be the LIBOR Base Rate as determined on the
previous LIBOR Determination Date or, in the case of the first LIBOR
Determination Date, the rate determined by the Administrative Agent
subject to reasonable approval of the Operating Partnership.
"LIBOR Determination Date" shall mean the second Business Day preceding
the first day of each Interest Period.
"LIBOR Rate" means, for each Loan and for any Interest Period, a rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined
by the Administrative Agent to be equal to the LIBOR Base Rate for such Loan for
such Interest Period divided by 1 minus the Reserve Requirement, if any, for
such Loan for such Interest Period.
"Lien" means any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind. For purposes of this Agreement, a Person shall be
deemed to own subject to a Lien any Property that it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease, other title retention agreement (other than an
operating lease) or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction relating to such Property.
"Loan" means each loan by each Lender to the Operating Partnership
under Section 2.01.
"Majority Lenders" means, at any time, Lenders the Commitment
Percentages of which aggregate at least 51%.
"Market Maturity" means a loan term (e.g., 12 months) which is
generally available in the market for interest only term loans or credit
facilities to REITs comparable to the REIT Group at the time such loan is to be
made. In the event of any dispute between the Operating Partnership and the
Lenders with respect to whether any loan term is a Market Maturity, the Auditor
shall make the final determination on such issue, which determination shall be
final and binding on the Operating Partnership and Lender.
"Market Terms" means the loan terms (including, without limitation, the
interest rate, repayment terms, financial and other covenants, default terms,
representations and warranties) which are then available in the market for
unsecured interest only term loans or credit facilities as established by the
Auditor, which terms shall be determined by the Auditor by analyzing the loan
terms for comparable loans made to three (3) to five (5) REITs which are
publicly traded on the New York Stock Exchange and are comparable (in the
Auditor's sole discretion) to the REIT Group, and adjusting said terms based
upon the relative creditworthiness of such REITs and the REIT Group. All costs
and expenses of determining the Market Terms, including Auditor compensation,
shall be borne by the Operating Partnership. The Auditor shall use its best
efforts to determine the Market Terms within thirty (30) days after a request by
Lender.
"Material Adverse Effect" means, with respect to any Person, a material
adverse effect on the consolidated business or consolidated financial condition
of such Person and its Subsidiaries taken as a whole or, in the case of the
Operating Partnership, on the ability of the Operating Partnership to perform
its obligations hereunder.
"Maturity Date" means January 15, 1998, unless the indebtedness
evidenced by this Agreement is extended or refinanced by the Lenders under
Section 2.10 below, in which event said term shall mean either (A) the maturity
date selected by the Majority Lenders under Subsection 2.10(a)(i) if such
indebtedness is extended or refinanced under such subsection or under Subsection
2.10(e)(i), (B) the last day of the Market Maturity selected under Subsection
2.10(d)(B) if such indebtedness is refinanced under such subsection, or (C) June
30, 1998, if such indebtedness is refinanced under Subsections 2.10(e)(ii),
(iii) or (iv).
"Mortgage Indenture" shall have the meaning assigned thereto under the
Existing Credit Facility Documents.
"Multiemployer Plan" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by the Operating
Partnership and which is covered by Title IV of ERISA.
"Net Worth" means, as of a particular determination date, the Total
Assets of the REIT Group less aggregate total liabilities of the REIT Group
(determined without duplication), all determined in accordance with GAAP (with
total liabilities including all obligations, contingent or otherwise, that in
accordance with GAAP should be classified as liabilities).
"Note" has the meaning set forth in Section 2.04 .
"NYUCC" means the Uniform Commercial Code as in effect from time to
time in the State of New York.
"Obligations" means the unpaid principal of and interest on the Notes
and all other obligations and liabilities of the Operating Partnership to the
Administrative Agent or the Lenders, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred, which may
arise under, out of, or in connection with, this Agreement, the Notes, the other
Credit Facility Documents or the Existing Credit Facility Documents, or any
other document made, delivered or given in connection therewith, whether on
account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, after the occurrence of a
Default or Event of Default, all reasonable fees and disbursements of counsel to
the Administrative Agent or any Lender) or otherwise.
"Operating Partnership" means Cali Realty, L.P., a Delaware limited
partnership.
"Operating Partnership Election Period" means the period of time
commencing on October 1, 1997 and continuing through and including October 31,
1997.
"Participant" has the meaning set forth in Section 11.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means any individual, corporation, company, division of a
corporation, voluntary association, partnership, limited liability company,
joint venture, trust, association, estate, unincorporated organization or
government (or any agency, instrumentality or political subdivision thereof).
"Plan" means an employee benefit or other plan established or
maintained by the Operating Partnership that is covered by Title IV or ERISA,
other than a Multiemployer Plan.
"Pledge Agreement" means the pledge agreement between the Operating
Partnership and the Administrative Agent, substantially in the form of Exhibit
B, as the same may be amended, supplemented or otherwise modified from time to
time.
"Pledged Junior Bonds" means all of the Class A-3, Class B, Class C and
Class D Bonds pledged by the Operating Partnership to the Administrative Agent,
for the benefit of the Lenders, pursuant to the Existing Credit Facility
Documents.
"Pledged Partnership Interests" means a 99% limited partnership
interest owned by the Operating Partnership in Holdings and a 99% limited
partnership interest owned by the Operating Partnership in each of the UREs, all
to be pledged to the Administrative Agent as security for the Obligations
pursuant to the Pledge Agreement.
"Pledged Stock" means 100% of the issued and outstanding capital stock
of the G.P. Subs owned by the Company to be pledged to the Administrative Agent
as security for the Obligations pursuant to the Company Pledge Agreement.
"Post-Default Rate" means, in respect of any principal of or interest
on any Loan or any other amount whatsoever payable by the Operating Partnership
under this Agreement or the Notes that is not paid when due (whether at stated
maturity, by acceleration, by optional or mandatory prepayment or otherwise), a
rate per annum during the period from and including the due date of such amount
to but excluding the date on which such amount is paid in full (after as well as
before judgment) equal to (i) for the remainder of the then current Interest
Period for each Loan, 300 basis points in excess of the sum of the LIBOR Rate
plus the Applicable Margin, and (ii) for all periods subsequent to the then
current Interest Period for each Loan, 300 basis points in excess of the sum of
the LIBOR Rate plus the Applicable Margin for a one-month Interest Period.
"Property" means any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
"PSC" means Prudential Securities Credit Corp. (formerly known as
Prudential Securities Realty Funding Corporation).
"PSC Election Period" means the period of time commencing on September
1, 1997 and continuing through and including September 30, 1997.
"Reference Banks" initially shall be Bank of Tokyo Ltd., Barclay's
Bank, plc, National Westminster Bank plc, and Bankers Trust Company. Each
Reference Bank shall (a) be a leading bank engaged in transactions in Eurodollar
deposits in the international Eurocurrency market, and (b) have an established
place of business in London. If any such Reference Bank should be unwilling or
unable to act as such, or if any Reference Bank in any other way fails to meet
the qualifications of a Reference Bank, the Administrative Agent shall designate
alternative Reference Banks meeting the criteria specified in this paragraph.
The Administrative Agent shall have no liability or responsibility to any Person
for: (1) the selection of any Reference Bank for purposes of determining the
LIBOR Base Rate; (ii) the inability to retain at least four Reference Banks that
is caused by circumstances beyond its reasonable control; (iii) the selection of
any New York or European banks pursuant to clause (a)(ii) of the definition of
"LIBOR Base Rate" for purposes of determining the LIBOR Base Rate; or (iv) the
inability to select such New York or European banks that is caused by
circumstances beyond its reasonable control.
"Refinance Loan Closing Date" means the closing date of any loan which
refinances, or the effective date of any automatic refinance of, the
indebtedness evidenced hereby as described in Section 2.10, which date shall not
be after January 15, 1998 in accordance with the terms of said Section 2.10.
"Register" has the meaning set forth in Section 11.06(d).
"Regulations D, G, T, U and X" mean, respectively, Regulations D, G, T,
U and X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be modified and supplemented and in effect from time
to time.
"Regulatory Change" means any change after the date of this Agreement
in federal, state or foreign laws or regulations (including, without limitation,
Regulation D) or the adoption or making after such date of any interpretation,
directive, guideline, policy or request applying to a class of banks or other
financial institutions, including the Lenders, of or under any federal, state or
foreign laws or regulations (whether or not having the force of law and whether
or not failure to comply therewith would be unlawful) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
"REIT" means a real estate investment trust as defined in the Internal
Revenue Code.
"REIT Group" means the Company and all of its Affiliates.
"Release" means any material release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment, including, without limitation,
the movement of Hazardous Substances through ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata.
"Requirement of Law" means, as to any Person, all provisions of any
law, statute, treaty, rule or regulation or determination of an arbitrator or a
court or other Governmental Authority of competent jurisdiction, in each case
applicable to or binding upon such Person or any of its Property or to which
such Person or any of its Property is subject.
"Reserve Requirement" means, for any Interest Period for any Loan, the
average maximum rate at which reserves (including, without limitation, any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by the Administrative Agent (as
determined by the Administrative Agent in its sole discretion) against
"Eurocurrency Liabilities" (as such term is used Regulation D); provided,
however, that allocation of such reserves (if any) to the Loans or the
Commitments or the transactions contemplated hereby shall be in the sole
discretion of the Administrative Agent. Without limiting the effect of the
foregoing, the Reserve Requirement shall include any other reserves required to
be maintained by the Administrative Agent (as determined by the Administrative
Agent in its sole discretion) by reason of any Regulatory Change with respect to
(a) any category of liabilities that includes deposits by reference to which the
LIBOR Base Rate for Loans is to be determined as provided in the definition of
"LIBOR Base Rate" in this Section 1.01 or (b) any category of extensions of
credit or other assets that includes Loans.
"Responsible Officer" means the chief executive officer, executive vice
president or the president of the Company or, with respect to financial matters,
the chief financial officer of the Company.
"Secured Parties" has the meaning set forth in the recitals of Exhibits
B and C.
"Securities Act" means the Securities Act of 1933, as from time to time
amended.
"Security Interests" has the meaning set forth in Section 3 of Exhibits
B and C.
"Security Termination Date" has the meaning set forth in Section 19 of
Exhibits B and C.
"Subject Property" means the real property, buildings and other
improvements thereon commonly known as the Harborside Financial Center, Jersey
City, New Jersey (excluding the ground leasehold interest in the building
commonly known as Plaza I currently occupied by Bankers Trust Company and the
fee title to the land on which such building is located which is to be acquired
by Holdings-Parcel I, but including fee title to all of the remainder of
Harborside Financial Center and the ground leasehold interests in Plaza II,
Plaza III and all undeveloped parcels) all of which is to be acquired by
Holdings and/or the UREs.
"Subsidiary" means, for any Person, any corporation, partnership or
other entity (whether now existing or hereafter organized) of which at least a
majority of the securities or other ownership interests having by the terms
thereof ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions of such corporation, partnership or
other entity (irrespective of whether or not at the time securities or other
ownership interests of any other class or classes of such corporation,
partnership or other entity shall have or might have voting power by reason of
the happening of any contingency) is at the time directly or indirectly owned or
controlled by such Person or one or more Subsidiaries of such Person or by such
Person and one or more Subsidiaries of such Person.
"Taxes" means all non-excluded taxes, levies, imposts, duties, charges,
fees, deductions and withholdings, as set forth in Section 5.05(a).
"Third Party" means any Person who guarantees or pledges collateral to
secure the obligations of the Operating Partnership under this Agreement.
"Total Assets" means, as of a particular determination date, the
aggregate total value of all assets of the REIT Group (determined without
duplication and in accordance with GAAP) plus the Excess Qualified Asset Value.
"Total Debt" means, as of a particular determination date, the
aggregate of (i) all outstanding liabilities of the Company and its Subsidiaries
(including Guaranty Obligations and other contingent liabilities which are
recorded on the Company's consolidated financial statements which are used for
public reporting purposes), including the full outstanding principal amount of
the credit facilities described in this Agreement and the Existing Credit
Facility Documents and (ii) the difference between the maximum amount of the
Commitments which may be used for working capital purposes (i.e., $15,000,000)
and the outstanding balance of the Loans used for working capital purposes.
"Transferee" means any Participant or Assignee as set forth in Section
11.06(f).
"UREs" means the following limited partnerships: Cal-Harbor II & II
Urban Renewal Associates L.P., a New Jersey limited partnership, Cal-Harbor IV
Urban Renewal Associates L.P., a New Jersey limited partnership, Cal-Harbor V
Urban Renewal Associates L.P., a New Jersey limited partnership, Cal-Harbor VI
Urban Renewal Associates L.P., a New Jersey limited partnership, Cal-Harbor So.
Pier Urban Renewal Associates L.P., a New Jersey limited partnership, Cal-Harbor
No. Pier Urban Renewal Associates L.P., a New Jersey limited partnership, and
Cal-Harbor VII Urban Renewal Associates L.P., a New Jersey limited partnership,
each formed solely for the purpose of acquiring a ground leasehold interest in
the Subject Property.
SECTION I.02. Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings specified herein when used in the
Notes or the other Credit Facility Documents or any certificate or other
document made or delivered pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Article, Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(c) The meanings given to terms defined in Section 1.01 and in other
provisions of this Agreement shall be equally applicable to both the singular
and plural forms of such terms.
SECTION I.03. Accounting Terms and Determinations.
(a) Except as otherwise expressly provided herein, all
accounting terms used herein shall be interpreted, and all financial
statements and certificates and reports as to financial matters
required to be delivered to the Administrative Agent and Lenders
hereunder shall (unless otherwise disclosed to the Lenders in writing
at the time of delivery thereof) be prepared, in accordance with GAAP
consistently applied throughout the periods involved (except as
otherwise noted therein). All calculations made for the purposes of
determining compliance with this Agreement shall be made by application
of GAAP consistently applied throughout the periods involved (except as
otherwise noted therein).
(b) The Operating Partnership shall deliver to the Lenders at
the same time as the delivery of any annual or quarterly financial
statement under Section 8.01 (i) a description in reasonable detail of
any material variation between the application of accounting principles
employed in the preparation of such statement and the application of
accounting principles employed in the preparation of the next preceding
annual or quarterly financial statements, and (ii) reasonable estimates
of the difference between such statements arising as a consequence
thereof.
ARTICLE II.
COMMITMENTS; LOANS; NOTES; PREPAYMENTS
SECTION II.01. Loans. Subject to the terms and conditions hereof, each
Lender severally agrees, subject to the terms and conditions of this Agreement,
to extend credit to the Operating Partnership by making revolving credit loans
in Dollars ("Loans") to the Operating Partnership from time to time during the
period from and including the date hereof to but not including the Commitment
Termination Date (the "Commitment Period"). Notwithstanding the foregoing, in no
event shall any Loan be made if the amount of such Loan, together with the
outstanding principal balance of all Loans, would exceed the Available Revolving
Credit Commitments. Subject to the terms and conditions of this Agreement,
during the Commitment Period, the Operating Partnership may from time to time
borrow, repay without penalty or premium (other than breakage funding costs) and
reborrow the aggregate amount of the Commitments.
SECTION II.02. Borrowings. The Operating Partnership may borrow under
the Commitments during the Commitment Period on any Business Day; provided,
however, that the Operating Partnership shall give the Administrative Agent
notice of each Borrowing hereunder as provided in Section 4.04. Each notice of a
Borrowing shall be in substantially the form of Exhibit E. Upon receipt of any
such notice from the Operating Partnership, the Administrative Agent shall
promptly notify each Lender of its proportionate share of each Borrowing, the
date of such Borrowing, and the Interest Period applicable thereto. Each Lender
will make the amount of its pro rata share of each Borrowing available to the
Administrative Agent for the account of the Operating Partnership at the office
of the Administrative Agent specified in Section 11.02 prior to 1:00 P.M., New
York City time, on the Borrowing Date requested by the Operating Partnership in
funds immediately available to the Administrative Agent. Such Borrowing will
then be made available to the Operating Partnership on the dates provided herein
by the Administrative Agent crediting the account of the Operating Partnership
on the books of such office with the aggregate of the amounts made available to
the Administrative Agent by the Lenders and in like funds as received by the
Administrative Agent.
SECTION II.03. Full Recourse.The Obligations, including all Loans made
hereunder, shall be with full recourse to the assets of the Operating
Partnership and its general partner, the Company.
SECTION II.04. Notes
(a) The Loans made by the Lenders shall be evidenced by
promissory notes of the Operating Partnership payable to each Lender in
substantially the form of Exhibit A, dated the date hereof, with
appropriate insertions as to payee, date and principal amount (each a
"Note" and collectively the "Notes"), payable to the order of such
Lender and in a principal amount equal to the amount of the initial
Commitment of such Lender. The outstanding principal balance of each
Loan as evidenced by a Note shall be payable on the Maturity Date,
unless the same becomes due and payable on an earlier date pursuant to
the terms hereof. Each of the Notes will bear interest on the
outstanding principal balance thereof as set forth in Section 3.02
hereof.
(b) The date, amount, interest rate and duration of each
Interest Period of each Loan, and each payment made on account of the
principal thereof, and any continuation thereof, shall be recorded by
each Lender on its books and, prior to any transfer of the Note,
endorsed by each Lender on the schedule attached to and constituting a
part of the Note; provided, however, that the failure of the Lenders to
make any such recordation or endorsement shall not affect the
obligations of the Operating Partnership to make any payment when due
hereunder; provided further, however, that any such recordation or
endorsement shall constitute prima facie evidence of the accuracy of
the information so recorded absent manifest error.
SECTION II.05. Optional Prepayments. Subject to Sections 4.04 and 5.04,
the Operating Partnership shall have the right to prepay any Loan, in whole or
in part, at any time or from time to time without premium or penalty; provided,
however, that the Operating Partnership shall give the Administrative Agent
notice of each such prepayment as provided in Section 4.04 (and, upon the date
specified in any such notice of prepayment, the amount to be prepaid shall
become due and payable hereunder). Upon receipt of any such notice the
Administrative Agent shall promptly notify each Lender thereof. Any prepayment
on other than the last day of an Interest Period therefor shall be subject to
the provisions of Section 5.04. Partial repayments shall be in an aggregate
principal amount of $ 1,000,000 or a whole multiple of $500,000 in excess
thereof. All prepayments shall be accompanied by accrued but unpaid interest on
the principal amount being prepaid to the date of prepayment.
SECTION II.06. Mandatory Prepayments; Permanent Reduction of
Commitments. Subject to Sections 4.04 and 5.04, all proceeds received by the
Company or the Operating Partnership from the sale of unsecured debt instruments
by the Company or the Operating Partnership during any period when any amounts
are outstanding under any of the Notes or when any Lender has an obligation to
fund any Borrowing hereunder, which debt instruments are issued as part of a
public offering and are rated by one or more nationally recognized rating
agencies, shall be paid to the Administrative Agent to reduce the unpaid
principal balance of the Notes (without premium or penalty) on a pro rata basis
as provided in Section 4.01 and shall permanently reduce the Commitments on a
dollar-for-dollar basis. Any such prepayment on other than the last day of an
Interest Period therefor shall be subject to the provisions of Section 5.04. All
prepayments shall be accompanied by accrued but unpaid interest on the principal
amount being prepaid to the date of prepayment.
SECTION II.07. Mandatory Reductions of Commitments. The Operating
Partnership shall, on demand, prepay the Loans in such amounts as shall be
necessary to assure that the aggregate outstanding principal amount of the Loans
shall not at any time exceed the Commitments at such time. All prepayments
hereunder shall be made together with interest accrued on the amount prepaid.
SECTION II.08. Continuation. The Operating Partnership shall have the
right, at any time, upon the expiration of the then current Interest Period with
respect thereto, to continue any Loan or a portion thereof for a successive
Interest Period, subject to the following:
(a) The Operating Partnership shall give the Administrative
Agent prior notice of each continuation, in accordance with Section
4.04 and the applicable provisions of the term "Interest Period" set
forth in Section 1.01, and of the length of the next Interest Period to
be applicable to such Loan; such notice shall be irrevocable and to be
effective must be received by the Administrative Agent on the day
required not later than 10:00 a.m., New York City Time; the
Administrative Agent shall, after it receives notice from the Operating
Partnership, promptly give the Lenders notice of any continuation;
(b) No Event of Default or Default shall have occurred and be
continuing at the time of any continuation of any Loan into a
subsequent Interest Period;
(c) If less than the entire outstanding balance of all Loans
at the time outstanding shall be continued, such continuation shall be
made pro rata among the Lenders in accordance with the respective
principal amounts of the Loans held by the Lenders immediately prior to
such continuation;
(d) The aggregate principal amount of Loans continued as part
of the same Borrowing shall be $1,000,000 or such greater amount which
is an integral multiple of $100,000 or such lesser amount if such
lesser amount is then outstanding;
(e) Accrued interest on the outstanding principal balance of
the Loans (or portion thereof) being continued shall be paid by the
Operating Partnership at the time of continuation;
(f) The Interest Period with respect to a new Loan effected by
a continuation shall commence on the date of the continuation;
(g) Each request for a continuation which fails to state an
applicable Interest Period shall be deemed to be a request for an
Interest Period of one month; and
(h) If no request for a continuation is received by the
Administrative Agent, the Loan or Loans shall be automatically
continued and the next Interest Period shall be of the same length as
the immediately preceding Interest Period.
No continuation of the Loans under this Section 2.08 shall extend
beyond the Maturity Date.
SECTION II.09. Optional Termination or Reduction of Commitments.
(a) Upon notice by the Operating Partnership to the
Administrative Agent in accordance with Section 4.04, the Operating
Partnership may at any time in whole permanently terminate, or from
time to time in part permanently reduce, the Commitments. Each such
reduction shall be in a minimum aggregate principal amount of
$2,000,000 or in multiples of $1,000,000 in excess thereof. The
Commitments once terminated or reduced may not be reinstated.
(b) Simultaneously with such reduction or termination of each
Lender's Commitment, the Operating Partnership shall pay to the
Administrative Agent for the account of each Lender the excess of the
Loans outstanding under such Commitment over the reduced Commitment,
all accrued and unpaid interest thereon and any payments required
pursuant to Section 5.04.
(c) Any reduction of the Commitments pursuant to this Section
shall be applied pro rata to reduce the applicable Commitment of each
Lender as provided in Section 4.01.
SECTION 2.10. Refinancing of Loans.
(a) At any time during the PSC Election Period, and provided
that the indebtedness described in this Agreement has not been paid in
full and Lenders' obligations hereunder terminated, Lenders shall have
the right to notify the Operating Partnership that the Majority
Lenders, on behalf of all Lenders, have elected to extend or refinance
the indebtedness evidenced by this Agreement in accordance with one of
the options described below:
(i) The Majority Lenders, on behalf of all Lenders,
may elect to either: (A) extend the maturity date of the
indebtedness described in this Agreement to a date selected by
the Majority Lenders, on behalf of all Lenders, which date
shall not be earlier than June 30, 1998, in which case the
indebtedness evidenced by this Agreement shall continue in
full force and effect in accordance with its terms through
such extended maturity date and the Collateral and the
Existing Collateral shall continue to secure the indebtedness
evidenced by this Agreement, or (B) refinance the indebtedness
evidenced by this Agreement by extending to the Operating
Partnership either an unsecured interest only term loan or an
unsecured revolving credit facility, at the election of the
Majority Lenders', at Market Terms and having a maturity date
selected by the Majority Lenders, which maturity date shall
not be earlier than June 30, 1998; or
(ii) The Majority Lenders, on behalf of all Lenders,
may elect to have the Administrative Agent act as placement
agent to locate one or more third party lenders to refinance
the indebtedness evidenced by this Agreement with either an
unsecured interest only term loan or an unsecured revolving
credit facility, at the Majority Lenders' election, at Market
Terms, in which case Administrative Agent shall use reasonable
good faith efforts to locate such third party lender(s); such
term loan or credit facility shall have a Market Maturity
selected by the Operating Partnership.
(b) If the Majority Lenders, on behalf of all Lenders, elect
either of the options in Subsection 2.10(a)(i) above, the Operating
Partnership may, within ten (10) days of receipt of notice of Lenders'
election, request in writing that Lenders' attempt to refinance the
indebtedness evidenced by this Agreement through one or more third
party lenders under option (ii) above, in which event (A) Lenders and
the Operating Partnership shall document and prepare for closing of
such extension or refinancing of the indebtedness evidenced under this
Agreement under Subsection 2.10(a)(i) above in accordance with Lenders'
original election, and (B) Lenders shall use reasonable good faith
efforts to locate such third party lender(s); provided, however, that
if Lenders are unable to locate any such third party lender(s) who are
willing to refinance the indebtedness evidenced by this Agreement or
the Operating Partnership and such third party lender(s) are unable to
close on or before January 15, 1998, Lenders and the Operating
Partnership shall proceed with closing pursuant to Lenders' initial
election to extend or refinance.
(c) In the event the Majority Lenders, on behalf of all
Lenders, elect, and closing occurs under, either of the refinance
options (but not the extension) specified in Subsections 2.10(a)(i) and
(ii) above, the term loan or credit facility described in the option
selected by the Majority Lenders shall commence on the Refinance Loan
Closing Date; provided, however, that Lenders' (or any third party
lenders) obligation to fund any such term loan or credit facility shall
be subject to the Operating Partnership's execution and delivery of
such documents and instruments (including any documents and instruments
customarily used in transactions of a similar type) as Lenders or the
third party lenders may reasonably require to document said term loan
or credit facility, which documents and instruments shall contain all
representations, warranties, conditions, covenants, defaults, remedies
and indemnities customarily used in transactions of a similar type, and
closing of such transaction on or before January 15, 1998.
(d) If Lenders do not provide notice to the Operating
Partnership of the Majority Lenders' election to proceed with extension
of the indebtedness evidenced by this Agreement or refinancing of the
indebtedness evidenced under this Agreement on or before the end of the
PSC Election Period, then the Operating Partnership shall have, at any
time during the Operating Partnership Election Period, the right to
notify Lenders that the Operating Partnership has elected to either (A)
terminate this Agreement and fully repay the outstanding balance of
Loans thereunder, or (B) request Lenders to refinance the indebtedness
evidenced by this Agreement with an unsecured interest only term loan
or unsecured revolving credit facility, at the Operating Partnership's
option, to be provided by Lenders on Market Terms, having either a
Market Term fixed or variable interest rate and having a Market
Maturity selected by the Operating Partnership. If the Operating
Partnership either fails to notify Lenders of its election during the
Operating Partnership Election Period or elects to pay in full the
indebtedness evidenced by this Agreement and terminate this Agreement,
the Maturity Date shall be January 15, 1998. If the Operating
Partnership elects to refinance the indebtedness evidenced by this
Agreement as described above, the term loan or credit facility
described above shall commence on the Refinance Loan Closing Date;
provided, however, that Lenders' obligation to fund such term loan or
credit facility shall be subject to the Operating Partnership's
execution and delivery of such documents and instruments (including any
documents and instruments customarily used in transactions of a similar
type) as Lenders may reasonably require to document said term loan or
credit facility, which documents and instruments shall contain all
representations, warranties, conditions, covenants, defaults, remedies
and indemnities customarily used in transactions of a similar type, and
closing of such transaction on or before January 15, 1998.
(e) Notwithstanding anything herein to the contrary:
(i) in the event that the Majority Lenders, on behalf
of all Lenders, elect to extend the indebtedness evidenced by
this Agreement under Subsection 2.10(a)(i)(A) above, but
Lenders and the Operating Partnership do not execute
appropriate documentation to evidence such extension, the
indebtedness evidenced by this Agreement shall be
automatically extended in accordance with Lenders' election
and the Maturity Date shall be the maturity date (which shall
not be earlier than June 30, 1998) selected by the Majority
Lenders;
(ii) in the event that the Majority Lenders, on
behalf of all Lenders, elect to refinance the indebtedness
evidenced by this Agreement under Subsection 2.10(a)(i)(B)
above, but the Operating Partnership and the Lenders do not
execute the required documentation on or before January 15,
1998, then, effective January 15, 1998, the indebtedness
evidenced by this Agreement shall automatically be refinanced
by either an unsecured interest only term loan or an unsecured
revolving credit facility, as applicable in accordance with
the applicable election, on the Market Terms established under
the applicable option of Lenders except that the Maturity Date
shall be June 30, 1998, and the Credit Facility Documents
shall be deemed amended to incorporate the Market Terms;
(iii) in the event that the Majority Lenders, on
behalf of all Lenders, elect to have the Administrative Agent
act as placement agent to refinance the indebtedness evidenced
by this Agreement through one or more third party lender(s)
under Subsection 2.10 (a)(ii) above but the Operating
Partnership and the third party lender(s) are unable to close
such refinancing on or before January 15, 1998, then effective
January 15, 1998, the indebtedness evidenced by this Agreement
shall automatically be refinanced by either an unsecured
interest only term loan or an unsecured revolving credit
facility, as applicable in accordance with the applicable
election, on the Market Terms established under the applicable
option of Lenders except that the Maturity Date shall be June
30, 1998, and the Credit Facility Documents shall be deemed
amended to incorporate the Market Terms; and
(iv) in the event that the Operating Partnership
elects to request the Lenders to refinance the indebtedness
evidenced by this Agreement under Section 2.10(d) above and
the Lenders and the Operating Partnership are unable to close
such refinancing on or before January 15, 1998 (including
execution of all required loan documents and instruments),
then effective as of January 15, 1998, the indebtedness
evidenced by this Agreement shall automatically be refinanced
by either an unsecured interest only term loan or an unsecured
revolving credit facility, as applicable in accordance with
the applicable election, on the Market Terms established under
the applicable option of the Operating Partnership except that
the Maturity Date shall be June 30, 1998, and the Credit
Facility Documents shall be deemed amended to incorporate the
Market Terms.
On the occurrence of any of the events described in Subsections 2.10
(e) (i), (ii), (iii) or (iv) above, Lenders and the Operating
Partnership shall negotiate in good faith to promptly prepare and
execute such documents and instruments (including any documents and
instruments customarily used in transactions of a similar type) as
Lenders may reasonably require to document said term loan or credit
facility or extension (on the terms determined under such subsections),
which documents and instruments shall contain all representations,
warranties, conditions, covenants, defaults, remedies and indemnities
customarily used in transactions of a similar type; provided, however,
that failure of Lenders and the Operating Partnership to agree to or
execute any such documents shall not affect the automatic refinancing
or extension of the indebtedness evidenced by this Agreement as
described above and, in such event, the Credit Facility Documents, as
deemed amended to incorporate the Market Terms, shall govern.
(f) Unless otherwise agreed by the Operating Partnership, any
loan or credit facility extended by Lenders or any third party
lender(s) to refinance the indebtedness evidenced by this Agreement
under any provision of this Section 2.10 will be unsecured and in
connection with such refinancing the Collateral will be released by
Lenders and the Collateral Agent; provided, however, that the foregoing
shall not apply, and the Collateral shall not be released, if the
Lenders elect to extend the maturity date of the Obligations under this
Agreement rather than refinancing the same.
(g) Notwithstanding anything herein to the contrary, Lenders
shall have no obligation to refinance or extend the indebtedness
evidenced by this Agreement or to locate any third party lender(s) to
refinance such indebtedness during any time when any Default or Event
of Default exists and is continuing under this Agreement or the Credit
Facility Documents.
(h) In the event that the Market Terms are to be determined
under this Section 2.10 or in the event of a dispute as to whether a
loan term is at a Market Maturity, Lender shall notify the Auditor and
request that the Auditor make its determination or decision with
respect thereto within a reasonable time after either Lender makes an
election under this Section 2.10 which requires such determination or
Lender is notified by the Operating Partnership of its election
hereunder which requires such determination.
SECTION 2.11. Replacement Collateral. So long as no Default or Event of
Default exists and is continuing under this Agreement or the Credit Facility
Documents, upon the Operating Partnership's written request, the Majority
Lenders will consider (but shall have no obligation to permit) releasing the
Collateral provided that the Operating Partnership (a) offers replacement
collateral acceptable to the Majority Lenders, in their sole discretion, (b)
provides to the Administrative Agent and the Lenders all materials requested by
the Lenders to permit the Lenders to conduct a due diligence review and
evaluation of the proposed replacement collateral, (c) executes all documents
and agreements requested by the Majority Lenders to grant to the Administrative
Agent, for the benefit of the Lenders, a first priority, perfected pledge of and
security interest in such replacement collateral, and (d) pays to the
Administrative Agent for the benefit of Lenders all reasonable out-of-pocket
costs and expenses incurred by the Administrative Agent and Lenders (including,
without limitation, reasonable legal fees and expenses) incurred in connection
with effecting the replacement of the Collateral.
ARTICLE III.
PAYMENTS OF PRINCIPAL AND INTEREST
SECTION III.01. Repayment of Loans. The Operating Partnership agrees to
repay on the Maturity Date the aggregate outstanding principal amount of the
Loans, together with all accrued and unpaid interest thereon and all other
amounts due under the Notes and the other Credit Facility Documents. Repayment
may be made through refinancing of the Loans as provided in Section 2.10 above.
SECTION III.02. Interest.
(a) The Operating Partnership agrees to pay interest on the
unpaid principal amount of each Loan for the period from and including
the date of such Loan to but excluding the date such Loan shall be paid
in full, for each Interest Period relating thereto, at a rate per annum
(computed on the basis set forth in Section 4.02(a)) equal to the LIBOR
Rate for such Loan for such Interest Period plus the Applicable Margin.
(b) Notwithstanding the foregoing, the Operating Partnership
hereby promises to pay interest at the applicable Post-Default Rate on
any principal of or interest on any Loan and on any other amount
payable by the Operating Partnership hereunder or under any Note which
shall not be paid in full when due (whether at stated maturity, by
acceleration, by mandatory prepayment or otherwise), for the period
from and including the due date thereof to and including the date the
same is paid in full (after as well as before judgment).
(c) Accrued interest on each Loan shall be payable on each
Interest Payment Date; provided, however, that interest payable at the
Post-Default Rate shall be payable from time to time on demand.
SECTION III.03. Interest Adjustments.
(a) If the provisions of this Agreement or any Note would at
any time require payment by the Operating Partnership to any Lender of
any amount of interest in excess of the maximum amount then permitted
by the law applicable to any Loan, the interest payments to that Lender
shall be reduced to the extent necessary so that the Lender shall not
receive interest in excess of such maximum amount. If, as a result of
the foregoing, the Lender shall receive interest payments hereunder or
under a Note in an amount less than the amount otherwise provided
hereunder, such deficit (hereinafter called the "Interest Deficit")
will, to the fullest extent permitted by Requirements of Law, cumulate
and will be carried forward (without interest) until the termination of
this Agreement. Interest otherwise payable to a Lender hereunder and
under a Note for any subsequent period shall be increased by the
maximum amount of the Interest Deficit that may be so added without
causing the Lender to receive interest in excess of the maximum amount
then permitted by the law applicable to the Loans.
(b) The amount of the Interest Deficit relating to the Loans
shall be paid in full at the time of any optional prepayment by the
Operating Partnership to the Lenders of all the Loans at that time
outstanding pursuant to Sections 2.05 or 2.06. The amount of the
Interest Deficit relating to the Loans at the time of any complete
payment of the Loans at that time outstanding (other than an optional
prepayment thereof pursuant to Section 2.05 or mandatory prepayment
pursuant to Section 2.06) shall be canceled and not paid.
ARTICLE IV.
PRO RATA TREATMENT, PAYMENTS, COMPUTATIONS
SECTION IV.01. Pro Rata Treatment and Payments.
(a) Each Borrowing by the Operating Partnership from the
Lenders hereunder and any reduction of the Commitments of the Lenders
shall be made pro rata according to the respective Commitment
Percentages of the Lenders. Each payment (including each prepayment) by
the Operating Partnership on account of principal of and interest on
the Loans shall be made pro rata according to the respective
outstanding principal amounts of the Loans then held by the Lenders.
All payments (including prepayments) to be made by the Operating
Partnership hereunder and under the Notes, whether on account of
principal, interest, fees or otherwise, shall be made without
deduction, set off or counterclaim and shall be made prior to 12:00
Noon, New York City time, on the due date thereof to the Administrative
Agent, for the account of the Lenders, at the Administrative Agent's
office specified in Section 11.02, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt (and, in any event, on
the same Business Day to the extent practicable) in like funds as
received. If any payment on a Loan becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to
the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business
Day.
(b) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a Borrowing that such Lender will not
make the amount that would constitute its Commitment Percentage of such
Borrowing available to the Administrative Agent, the Administrative
Agent may assume that such Lender is making such amount available to
the Administrative Agent, and the Administrative Agent may, in reliance
upon such assumption, make available to the Operating Partnership a
corresponding amount. If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date
therefor, such Lender shall pay to the Administrative Agent, on demand,
such amount with interest thereon at a rate equal to the Prime Rate (as
defined in the Bond Indenture) until such Lender makes such amount
immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Lender with respect to any
amounts owing under this Section 4.01(b) shall be conclusive in the
absence of manifest error. If such Lender's Commitment Percentage of
such Borrowing is not made available to the Administrative Agent by
such Lender within three (3) Business Days of such Borrowing Date and
the Administrative Agent has made available to the Operating
Partnership all or a portion of the corresponding amount as provided
above, the Administrative Agent shall also be entitled to recover the
amount made available by it with interest thereon at the rate per annum
equal to the Prime Rate (as defined in the Bond Indenture), on demand,
from the Operating Partnership, without prejudice to any rights which
the Operating Partnership or the Administrative Agent may have against
any Lender hereunder; provided, however, that the Administrative Agent
shall not be entitled to recover the amount made available by it with
interest thereon from the Operating Partnership if the Operating
Partnership gives the Administrative Agent seven (7) days advance
notice of the Borrowing. Nothing contained in this Section 4.01(b)
shall relieve any Lender which has failed to make available its ratable
portion of any Borrowing hereunder from its obligation to do so in
accordance with the terms of this Agreement or any claims arising from
said failure, which obligation may be enforced by the Operating
Partnership or the Administrative Agent, as appropriate.
(c) The failure of any Lender to make any Loan to be made by
it on any Borrowing Date shall not relieve any other Lender of its
obligation, if any, hereunder to make its Loan on such Borrowing Date.
(d) The Lenders may (but shall not be obligated to) debit the
amount of any payment that is not made when due to any ordinary deposit
account of the Operating Partnership with the Lenders.
SECTION IV.02. Computations.
(a) Interest shall be computed on the basis of a year of 360
days and the actual number of days elapsed (including the first day but
excluding the last day) occurring in the period for which payable.
Other amounts owing hereunder (other than as referred to in the first
sentence hereof) shall be computed on the basis of a year of 360 days
and the actual number of days elapsed (including the first day but
excluding the last day) occurring in the period for which payable. The
Administrative Agent shall as soon as practicable notify the Operating
Partnership and the Lenders of each determination of a LIBOR Rate. Any
change in the interest rate on a Loan resulting from a change in the
Reserve Requirement shall become effective as of the opening of
business on the day on which such change becomes effective. The
Administrative Agent shall as soon as practicable notify the Operating
Partnership and the Lenders of the effective date and the amount of
each such change in interest rate.
(b) The establishment of the LIBOR Base Rate on each LIBOR
Determination Date by the Administrative Agent and the Administrative
Agent's calculation of the rate of interest for the related Interest
Period shall (in the absence of manifest error) be final and binding on
the Operating Partnership and the Lenders. The Administrative Agent
shall make available the then current LIBOR Base Rate to any Lender
upon request. Furthermore, the Administrative Agent shall promptly send
written notice of its determination of the LIBOR Base Rate to the
Operating Partnership prior to the close of business on each LIBOR
Determination Date.
SECTION IV.03. Minimum Amounts. Except for mandatory prepayments made
pursuant to Sections 2.06 and 2.07 and prepayments made pursuant to Section
5.03, and except for Borrowings utilizing the entire unutilized amount of the
Commitments, each Borrowing and partial prepayment of principal of Loans shall
be in an aggregate principal amount at least equal to $1,000,000 or in multiples
of $500,000 in excess thereof (Borrowings or partial prepayments of Loans having
different Interest Periods at the same time hereunder to be deemed separate
Borrowings and prepayments for purposes of the foregoing).
SECTION IV.04. Certain Notices. Written or telephonic (promptly
confirmed in writing) notices by the Operating Partnership of terminations or
reductions of the Commitments and of Borrowings and optional prepayments of
Loans and of the duration of Interest Periods shall be irrevocable and shall be
effective only if received by the Administrative Agent not later than 10:00
a.m., New York time, three (3) Business Days prior to the date of the relevant
termination, reduction, Borrowing or prepayment or the first day of such
Interest Period. Each such notice of termination or reduction of the Commitments
shall specify the amount of such termination or reduction. Each such notice of
Borrowing or optional prepayment shall specify the amount (subject to Section
4.03) of the Loan to be borrowed or prepaid and the date (which shall be a
Business Day) of such proposed Borrowing or prepayment. Each notice of the
duration of an Interest Period shall specify the Loans to which such Interest
Period is to relate. If no election of Interest Period is specified in a notice
of Borrowing, such notice shall be deemed to be a request for an Interest Period
of one month.
SECTION IV.05. Set-Off. In addition to any rights and remedies of the
Lenders provided by law, each Lender shall have the right, without prior notice
to the Operating Partnership, any such notice being expressly waived by the
Operating Partnership to the extent permitted by applicable law, upon any amount
becoming due and payable by the Operating Partnership hereunder or under the
Notes (whether at the stated maturity, by acceleration or otherwise) to set-off
and appropriate and apply against such amount any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit or the
account of the Operating Partnership. Each Lender agrees promptly to notify the
Operating Partnership and the Administrative Agent after any such set-off and
application made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application.
ARTICLE V.
YIELD PROTECTION, ETC.
SECTION V.01. Additional Costs.
(a) The Operating Partnership shall pay directly to the
Administrative Agent for the account of such Lender from time to time
such amounts as the Lender may (in its sole judgment) determine to be
necessary to compensate the Lender for any costs that the Lender
determines are attributable to its making or maintaining of any Loans
or its obligation to make any Loans hereunder, or any reduction in any
amount receivable by the Lender hereunder in respect of any of the
Loans or such obligation (such increases in costs and reductions in
amounts receivable being herein called "Additional Costs"), resulting
from any Regulatory Change that:
(i) subjects any Lender to, or increases the net
amount of, any tax, levy, impost, duty, charge, fee, deduction
or withholding with respect to any Loan, or changes the basis
of taxation of any amounts payable to the Lenders under this
Agreement or the Notes in respect of any of such Loans (other
than taxes imposed on or measured by the overall net income of
the Lender or of the Applicable Lending Office for any of such
Loans by the jurisdiction in which each Lender has its
principal office or such Applicable Lending Office) and other
than changes generally affecting the manner in which the
income of each Lender or its Applicable Lending Office is
subjected to taxation;
(ii) imposes, modifies or deems applicable any
reserve, deposit or similar requirements (other than the
Reserve Requirement utilized in the determination of the LIBOR
Rate for such Loan) relating to any extensions of credit or
other assets of, or any deposits with or other liabilities of,
each Lender (including, without limitation, any of such Loans
or any deposits referred to in the definition of "LIBOR Base
Rate" in Section 1.01), or the Commitments; or
(iii) imposes any other condition affecting this
Agreement or the Notes (or any of such extensions of credit or
liabilities) or the Commitments.
If any Lender requests compensation from the Operating Partnership
under this Section 5.01(a), the Operating Partnership may, by notice to
the Administrative Agent (who shall forward it to the Lender), (A)
suspend the obligation of the Lender thereafter to make or continue
Loans, until the Regulatory Change giving rise to such request ceases
to be in effect (in which case the provisions of Section 5.03 shall be
applicable), provided, however, that such suspension shall not affect
the right of the Lender to receive the compensation so requested, or
(B) prepay the Loans in full (subject always to Section 5.04).
(b) Without limiting the effect of the provisions of Section
5.01(a), in the event that, by reason of any Regulatory Change, any
Lender either (i) incurs Additional Costs based on or measured by the
excess above a specified level of the amount of a category of deposits
or other liabilities of the Lender that includes deposits by reference
to which the interest rate on Loans is determined as provided in this
Agreement or a category of extensions of credit or other assets of the
Lender that includes Loans, or (ii) becomes subject to restrictions on
the amount of such a category of liabilities or assets that it may
hold, then, if the Lender so elects by notice to the Operating
Partnership (with a copy to the Administrative Agent), the obligation
of the Lender to make Loans hereunder shall be suspended until such
Regulatory Change ceases to be in effect (in which case the provisions
of Section 5.03 shall be applicable).
(c) Without limiting the effect of the foregoing provisions of
this Section 5.01 (but without duplication), the Operating Partnership
shall pay from time to time on request such amounts as each Lender may
determine to be necessary to compensate the Lender for any costs that
it determines are attributable to maintenance by the Lender (or any
Applicable Lending Office) or the Lender's holding company, pursuant to
any law, rule or regulation or any interpretation, guideline, directive
or request (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful) of any court or
governmental or monetary authority (i) following any Regulatory Change,
or (ii) implementing any risk-based capital guideline or other
requirement (whether or not having the force of law and whether or not
the failure to comply therewith would be unlawful) heretofore or
hereafter issued by any government or governmental or supervisory
authority implementing at the national level the Basle Accord, of
capital in respect of the Commitments or Loans (such compensation to
include, without limitation, an amount equal to any reduction of the
rate of return on assets or equity of any Lender (or any Applicable
Lending Office) or the Lender's holding company to a level below that
which the Lender (or any Applicable Lending Office) or the Lender's
holding company could have achieved but for such law, regulation,
interpretation, directive or request). For purposes of this Section
5.01(c), "Basle Accord" shall mean the proposals for risk-based capital
framework described by the Basle Committee on Banking Regulations and
Supervisory Practices in its paper entitled "International Convergence
of Capital Measurement and Capital Standards", dated July 1988, as
amended, modified and supplemented and in effect from time to time or
any replacement thereof.
(d) The Administrative Agent shall notify the Operating
Partnership of any event occurring after the date of this Agreement
entitling the Lenders to compensation under Section 5.01(a) or 5.01(c)
as promptly as practicable after the Administrative Agent obtains
actual knowledge thereof. Each Lender will designate a different
Applicable Lending Office for the Loans affected by such event if such
designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole opinion of the Lender, be
materially disadvantageous to the Lender; provided, however, that the
Lender shall have no obligation to designate an Applicable Lending
Office located in the United States of America. The Lender will furnish
to the Operating Partnership (through the Administrative Agent) a
certificate setting forth the basis and amount of each request by the
Lender for compensation under Section 5.01(a) or 5.01(c).
Determinations and allocations by the Lender for purposes of this
Section 5.01 of the effect of any Regulatory Change pursuant to Section
5.01(a) or Section 5.01(b), or of the effect of capital maintained
pursuant to Section 5.01(c), on its costs or rate of return of
maintaining Loans or its obligation to make Loans, or on amounts
receivable by it in respect of Loans, and of the amounts required to
compensate the Lender under this Section 5.01, shall be conclusive and
binding on the Operating Partnership in the absence of manifest error;
provided, however, that such determinations and allocations are made on
a reasonable basis. The Operating Partnership shall pay to the
Administrative Agent for the account of each such Lender the amounts
shown as due on any such certificate within ten (10) Business Days
after its receipt of the same. No failure on the part of any Lender to
demand compensation under paragraph (a) or (c) above on any one
occasion shall constitute a waiver of its rights to demand compensation
on any other occasion. The protection of this Section shall be
available to each Lender regardless of any possible contention of the
invalidity or inapplicability of any law, regulation or other condition
which shall give rise to any demand by such Lender for compensation
thereunder. This covenant shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable
hereunder.
SECTION V.02. Illegality. Notwithstanding any other provision of this
Agreement, if any change after the date hereof in applicable law, guideline or
order, or in the interpretation thereof by any Governmental Authority charged
with the administration thereof, shall make it unlawful for any Lender to honor
its obligations to make, maintain or continue Loans hereunder, then the Lender
shall promptly notify the Operating Partnership and the Administrative Agent
thereof and the Lender's obligation to make, maintain or continue Loans shall be
suspended until such time as the Lender may again make and maintain Loans (in
which case the provisions of Section 5.03 shall be applicable).
SECTION V.03. Treatment of Affected Loans. If the obligation of the
Lenders to make Loans or to continue Loans shall be suspended pursuant to
Section 5.01 or 5.02, the Operating Partnership may, by notice to the Lenders as
provided in Section 4.04, elect to prepay the Loans in full (subject always to
Section 5.04).
SECTION V.04. Compensation.
(a) The Operating Partnership shall pay to each Lender, upon
the request of the Lender, such amount or amounts as shall be
sufficient (in the reasonable opinion of the Lender) to compensate it
for any loss, cost or expense that the Lender determines is
attributable to:
(i) any payment or mandatory or optional prepayment
of a Loan for any reason (including, without limitation, the
acceleration of the maturity of the Loans pursuant to Article
IX) on a date other than the last day of an Interest Period
for such Loan; or
(ii) any failure by the Operating Partnership for any
reason (including, without limitation, the failure of any of
the conditions precedent specified in Article VI to be
satisfied) to borrow a Loan on the date for such Borrowing
specified in the relevant notice of Borrowing given pursuant
to Section 2.02 or Section 2.08.
Without limiting the effect of the preceding sentence, such
compensation shall include an amount as reasonably determined by the
Lender equal to the excess, if any, of (A) the amount of interest,
computed at a rate equal to the LIBOR Base Rate, that otherwise would
have accrued on the principal amount so paid, prepaid or not borrowed
or continued for the period from the date of such payment, prepayment,
or failure to borrow or continue to the last day of the then current
Interest Period for such Loan (or, in the case of a failure to borrow
or continue, the Interest Period for such Loan that would have
commenced on the date specified for such Borrowing) at the applicable
rate of interest for such Loan provided for herein over (B) the amount
of interest that would have accrued for such period on such principal
amount at a rate per annum equal to the interest component of the
amount the Lender would have bid in the London interbank market for
Dollar deposits of leading banks in amounts comparable to such
principal amount and with maturities comparable to such period (as
reasonably determined by the Lender). Each Lender shall deliver to the
Operating Partnership from time to time one or more certificates
setting forth the amount of such loss (and in reasonable detail the
manner of computation thereof) as determined by such Lender, which
certificates shall be conclusive absent manifest error.
(b) If the Operating Partnership fails to prepay any Loan on
the date specified in any prepayment notice delivered pursuant to
Section 2.05 or 2.06, the Operating Partnership on demand by any Lender
shall pay to the Administrative Agent for the account of such Lender
any amounts required to compensate such Lender for any loss incurred by
such Lender as a result of such failure to prepay, including, without
limitation, any loss, cost or expenses incurred by reason of the
acquisition of deposits or other funds by such Lender to fulfill
deposit obligations incurred in anticipation of such prepayment. Each
Lender shall deliver to the Operating Partnership and the
Administrative Agent from time to time one or more certificates setting
forth the amount of such loss (and in reasonable detail the manner of
computation thereof) as determined by such Lender, which certificates
shall be conclusive absent manifest error.
SECTION V.05. Withholding Taxes.
(a) Unless otherwise provided in this Section 5.05, all
payments made by the Operating Partnership under this Agreement and the
Notes shall be made free and clear of, and without deductions or
withholding for or on account of, any present or future income, stamp
or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding, in the case of the
Administrative Agent and each Lender, net income taxes and franchise
taxes and other taxes based upon net income imposed on the
Administrative Agent or such Lender, as the case may be (all such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions
and withholdings being hereinafter called "Taxes"). Subject to clauses
(b) through (e) of this Section 5.05, if any Taxes are required to be
withheld from any amounts payable to the Administrative Agent or any
Lender, the amounts so payable to the Administrative Agent or such
Lender shall be increased to the extent necessary to ensure that (after
payment of all Taxes and any other taxes including income taxes payable
by the Administrative Agent or such Lender by reason of the receipt of
such increased amount in any jurisdiction in which the Administrative
Agent or Lender is subject to tax) the Administrative Agent or such
Lender receives an amount equal to the sum it would have received had
no such withholding been required. Whenever any Taxes are so required
to be withheld by the Operating Partnership, as promptly as possible
thereafter it shall pay such Taxes to the relevant Governmental
Authority and send to the Administrative Agent, for its own account or
for the account of such Lender as the case may be, a certified copy of
an original official receipt received by the Operating Partnership
showing payment thereof. If the Operating Partnership fails to pay any
Taxes when due to the appropriate taxing authority or fails to remit to
the Administrative Agent the required receipts or other required
documentary evidence, the Operating Partnership shall (in addition to
the foregoing) indemnify the Administrative Agent or the Lenders for
any incremental taxes, interest or penalties that may become payable by
the Administrative Agent or any Lender as a result of any such failure.
(b) The Administrative Agent and each Lender shall, prior to
the Closing Date or (if later) the date of the initial Loan for such
Lender, deliver to the Operating Partnership and the Administrative
Agent (i) two copies of a statement that it is incorporated under the
laws of the United States or a state thereof, containing such
information as is required by U.S. Treasury Regulation Section
1.1441-5(b), together with two duly completed copies of Internal
Revenue Service Form W-9 (or successor forms), or (ii) if such Lender
is not incorporated under the laws of the United States or a state
thereof (A) two duly completed copies of United States Internal Revenue
Service Form 1001 (and Form 8306 if required by applicable law) or 4224
or successor applicable form, as the case may be, and (B) Internal
Revenue Service Form W-8 or W-9 or successor applicable form. The
Administrative Agent and each such Lender also agree to deliver to the
Operating Partnership and (in the case of a Lender) the Administrative
Agent two further copies of the said Form 1001 (and Form 8306 if
required by applicable law) or 4224 and Form W-8 or W-9, or successor
applicable forms or other statement, form or manner of certification,
as the case may be, on or before the date that any such statement, form
or other certification expires or becomes obsolete or after the
occurrence of any event requiring a change in or addition to the most
recent statement, form or other certification previously delivered by
it to the Operating Partnership, and such extensions or renewals
thereof as may reasonably be requested by the Operating Partnership or
the Administrative Agent, unless in any such case any change in treaty,
law or regulation has occurred after the Initial Date with respect to
such Lender and prior to the date on which any such delivery would
otherwise be required which renders all such statements, forms or other
certifications inapplicable or which would prevent such Lender from
duly completing and delivering any such statement, form or other
certification with respect to it and such Lender so advises the
Operating Partnership and the Administrative Agent. The Administrative
Agent and each Lender, as the case may be, shall certify (1) in the
case of a Form 1001 or 4224, that it is entitled to receive payments
from the Operating Partnership under this Agreement without deduction
or withholding of any United States federal income taxes, (2) in the
case of a Form W-8 or W-9, that it is entitled to an exemption from
United States backup withholding tax, and (3) in the case of a Form
8306, that is a bona fide resident of the relevant foreign country.
(c) If the Administrative Agent or a Lender receives a refund
in respect of Taxes (whether directly or by way of offset) paid by the
Operating Partnership (for which the Operating Partnership has made
additional payments pursuant to Section 5.05(a) to the Administrative
Agent or such Lender, as the case may be), it shall promptly pay such
refund to the Operating Partnership; provided, however, that the
Operating Partnership agrees to promptly return such refund to the
Administrative Agent or the applicable Lender, as the case may be,
after it receives notice from the applicable Lender that it is required
to repay such refund.
(d) The Operating Partnership shall have no obligation to pay
additional amounts pursuant to clause (a) of this Section 5.05 to the
Administrative Agent or any Lender with respect to Taxes to the extent
that such Taxes or additional amounts result from (i) the failure of
such Lender or the Administrative Agent to comply with its obligations
or agreements under this Section 5.05, or (ii) any representation or
warranty made in any certificate or otherwise by such Lender or the
Administrative Agent pursuant to this Section 5.05 proving to have been
incorrect in any material respect when made.
(e) The agreements in this Section 5.05 shall survive the
termination of this Agreement and the payment of all obligations
payable hereunder.
(f) Each assignee of a Lender's interest in this Agreement in
conformity with Section 11.06 shall be bound by this Section 5.05, so
that such assignee will have all of the obligations and provide all of
the forms and statements and all indemnities, representations and
warranties required to be given under this Section 5.05.
SECTION V.06. Indemnity. The Operating Partnership agrees to indemnify
each Lender and to hold each Lender harmless from any loss or expense which such
Lender may sustain or incur as a consequence of (a) default by the Operating
Partnership in making a Borrowing of or continuation of Loans after the
Operating Partnership has given a notice requesting the same in accordance with
the provisions of this Agreement, (b) default by the Operating Partnership in
making any prepayment after the Operating Partnership has given a notice thereof
in accordance with the provisions of this Agreement or (c) the making of a
prepayment on a day which is not the last day of an Interest Period with respect
thereto. Such indemnification may include an amount equal to the excess, if any,
of (i) the amount of interest which would have accrued on the amount so prepaid,
or not so borrowed or continued, for the period from the date of such prepayment
or of such failure to borrow or continue to the last day of such Interest Period
(or, in the case of a failure to borrow or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Loans provided for herein (excluding, however, the
Applicable Margin included therein, if any), over (ii) the amount of interest
(as reasonably determined by such Lender) which would have accrued to such
Lender on such amount by placing such amount on deposit for a comparable period
with leading lenders in the interbank eurodollar market. This covenant shall
survive the termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder.
SECTION V.07. Duty to Mitigate.
(a) Each Lender agrees that, as promptly as practicable after
it becomes aware of the occurrence of an event or the existence of a
condition that has caused it to be affected under Section 5.01, 5.02 or
5.05, such Lender shall give notice thereof to the Operating
Partnership and, to the extent so requested by the Operating
Partnership and not inconsistent with such Lender's internal policies,
such Lender shall use reasonable efforts (including reasonable efforts
to change the office in which it is booking the relevant Loan) to
materially reduce any amounts which might otherwise be payable pursuant
to Section 5.01, 5.02 or 5.05; provided, however, that such efforts
shall not cause the imposition on such Lender of any additional costs
or legal or regulatory burdens deemed by such Lender to be material or
otherwise reasonably expected by such Lender to be materially
disadvantageous to it.
(b) If such reasonable efforts pursuant to Section 5.07(a) are
insufficient to eliminate the amounts which are payable pursuant to
Section 5.01, 5.02 or 5.05, as the case may be, then the Operating
Partnership may (but subject in any such case to the payments required
by Section 5.04), provided that there shall exist no Default or Event
of Default, upon at least five (5) Business Days' prior written or
telephonic notice to such Lender and the Administrative Agent, identify
to the Administrative Agent a lending institution (which may be a
Lender) to purchase the Lender's outstanding Loans and Commitment
hereunder and, subject to the approval of the Administrative Agent
(which approval shall not be unreasonably withheld) and such alternate
lending institution, such Lender shall transfer its Commitment, any
Loans owing to such Lender and the Notes held by such Lender to such
alternate lending institution (at a price not in excess of par)
pursuant to the provisions of Section 11.06(c) and such alternate
lending institution shall become a Lender hereunder. At the time of the
assignment, the Operating Partnership shall pay all accrued interest
and all other amounts (including, without limitation, all amounts
payable under Section 5.01) owing hereunder to the assigning Lender.
ARTICLE VI.
CONDITIONS PRECEDENT
SECTION VI.01. Conditions to Initial Loan. The obligation of each
Lender to make the initial Loan requested to be made by it is subject to the
satisfaction, prior to or concurrently with the making of such Loan, of the
following conditions precedent:
(a) Credit Facility Documents. The Administrative Agent shall
have received (i) this Agreement, executed and delivered on behalf of
the Operating Partnership by a Responsible Officer of the Company; (ii)
for the account of each Lender, a Note conforming to the requirements
hereof and executed on behalf of the Operating Partnership by a
Responsible Officer of the Company; (iii) the Pledge Agreement,
executed and delivered on behalf of the Operating Partnership by a
Responsible Officer of the Company; (iv) the Company Pledge Agreement,
executed and delivered by a Responsible Officer of the Company; and (v)
the Pledged Stock and stock powers relating to the Company Pledge
Agreement.
(b) Partnership Documents and Corporate Documents. The
Administrative Agent shall have received, with a counterpart for each
Lender:
(i) a copy of the Operating Partnership's certificate
of limited partnership, certified as of a recent date by the
Secretary of State of Delaware, together with copies of any
agreements entered into by the Operating Partnership governing
the terms or relative rights of its partnership interests;
(ii) a certificate of such Secretary of State, dated
as of a recent date, as to the good standing of and payment of
taxes by the Operating Partnership which lists the
organizational documents on file in the office of such
Secretary of State;
(iii) a certificate, dated as of a recent date, as to
the good standing of the Operating Partnership issued by the
Secretary of State of each jurisdiction in which the Operating
Partnership is required to be qualified as a foreign
partnership; and
(iv) a copy of the Company's certificate of
incorporation, certified as of a recent date by the Secretary
of State of Maryland;
(v) a certificate of such Secretary of State, dated
as of a recent date, as to the good standing of and payment of
taxes by the Company which lists the organizational documents
on file in the office of such Secretary of State;
(vi) a certificate of the Secretary or Assistant
Secretary of the Company, dated the date of the initial Loan,
and certifying (A) that attached thereto is a true and
complete copy of the partnership agreement of the Operating
Partnership as in effect on the date of such certification,
(B) that attached thereto is a true and complete copy of the
bylaws of the Corporation as in effect on the date of such
certification, (C) that attached thereto is a true and
complete copy of resolutions adopted by the board of directors
of the Company authorizing the Borrowings hereunder, the
execution, delivery and performance in accordance with their
respective terms of this Agreement, the Notes to be executed
by the Operating Partnership, the other Credit Facility
Documents and any other documents required or contemplated
hereunder or thereunder, (D) that the certificate of limited
partnership of the Operating Partnership has not been amended
since the date of the last amendment thereto indicated on the
certificate of the Secretary of State furnished pursuant to
clause (i) above, except to the extent specified in such
Secretary's certificate, (E) that the certificate of
incorporation of the Company has not been amended since the
date of the last amendment thereto indicated on the
certificate of the Secretary of State furnished pursuant to
clause (iv) above, except to the extent specified in such
Secretary's certificate and (F) as to the incumbency and
specimen signature of each officer of the Company executing
this Agreement, the Notes, the other Credit Facility Documents
or any other document delivered by the Operating Partnership
in connection herewith or therewith (such certificate to
contain a certification by another officer of the Company as
to the incumbency and signature of the officer signing the
certificate referred to in this clause (iv)).
(c) Legal Opinions. The Administrative Agent shall have
received the executed legal opinion of Pryor, Cashman, Sherman & Flynn,
counsel to the Operating Partnership, which legal opinion shall cover
such matters incident to the transactions contemplated by this
Agreement as the Administrative Agent may reasonably require.
(d) Pledged Stock. The Pledged Stock and related stock powers
shall have been delivered to the Collateral Holder in accordance with
Section 3 of the Pledge Agreement.
(e) Pledge Notice Letters. Appropriate letters to Holdings and
the UREs notifying such partnerships of the pledge of the Pledged
Partnership Interests to the Administrative Agent.
(f) Federal Reserve Regulations. The Administrative Agent
shall be satisfied that the provisions of Regulations G, T, U and X of
the Board of Governors of the Federal Reserve System will not be
violated by the transactions contemplated hereby.
(g) UCC Financing Statements and UCC Searches, etc. The
Administrative Agent shall have received, in each case in form
satisfactory to it, (i) UCC financing statements executed on behalf of
the Operating Partnership and the Company for filing in all
jurisdictions in which it shall be necessary or desirable to make a
filing in order to provide the Administrative Agent (for the benefit of
the Lenders) with a perfected security interest in the Pledged Stock,
the Pledged Partnership Interests and the other Collateral, and (ii)
UCC searches satisfactory to the Administrative Agent indicating that
no other filings with regard to the Operating Partnership or the
Company are of record in any of such jurisdictions relating to the
Collateral.
(h) Litigation. No litigation shall be pending or threatened
which would be likely to materially and adversely affect the assets,
operations, business, condition, financial or otherwise, or prospects
of the Operating Partnership and its Subsidiaries, taken as a whole, or
which could reasonably be expected to materially adversely affect the
ability of the Operating Partnership to fulfill its Obligations
hereunder or otherwise materially impair the interests in respect
thereof of the Administrative Agent.
(i) Officer's Certificate. The Administrative Agent shall have
received a certificate of a Responsible Officer of the Company dated
the date of the initial Loans, (i) to the effect set forth in clauses
(a), (b) and (c) of Section 6.02, (ii) as to the solvency of the
Company and the Operating Partnership, (iii) stating that all other
conditions precedent to the initial Borrowings are satisfied, and (iv)
such other matters as the Administrative Agent may reasonably request.
(j) Formation of Holdings, Etc./Acquisition of Subject
Property. The Operating Partnership shall have formed or caused to be
formed each of Holdings, Holdings-Parcel I, the UREs, and the G.P.
Subs, with the entire limited partnership interest in Holdings,
Holdings-Parcel I and each of the UREs to be directly owned by the
Operating Partnership, the entire general partnership interest in
Holdings, Holdings-Parcel I and the UREs to be owned by one of the
entities comprising the G.P. Subs, and 100% of the stock of the G.P.
Subs to be owned by the Company. Holdings and the UREs shall
collectively acquire all of the fee and ground leasehold interests in
the Subject Property, and Holdings-Parcel I shall acquire fee title to
Plaza I of Harborside Financial Plaza, prior to or contemporaneously
with the funding of the initial Loan or Loans under this Agreement.
(k) Other Documents. The Administrative Agent shall have
received such other documents as the Administrative Agent may
reasonably request.
(l) Other Matters. All legal matters incident to this
Agreement and the transactions contemplated hereby shall be
satisfactory to Morrison & Hecker L.L.P., counsel to the Administrative
Agent.
Promptly following the Closing Date, the Administrative Agent shall deliver to
each Lender a copy of each document, instrument, agreement and certificate
received by it pursuant to this Section 6.01.
SECTION VI.02. Conditions to Each Loan. The obligation of each Lender
to make any Loan requested to be made by it on any date (including, without
limitation, its initial Loan) is subject to the further conditions precedent
that both immediately prior to the making of such Loan and also after giving
effect thereto and to the intended use thereof:
(a) Material Changes, There shall not have been any material
and adverse change with respect to the business, operations, condition
or prospective condition (financial or otherwise), or liabilities of
the Operating Partnership or its Subsidiaries.
(b) Events of Default. There shall not have occurred and be
continuing any Default or Event of Default under this Agreement on the
date of making the Loan or after making the Loan.
(c) Representations and Warranties. Each of the
representations and warranties made by the Operating Partnership in
Article VII or in or pursuant to any Credit Facility Document qualified
as to materiality shall be true and correct in all respects and those
not so qualified shall be true and correct in all material respects, in
each case on and as of the date of the making of such Loan with the
same force and effect as if made on and as of such date.
(d) Security. All Obligations, including all Borrowings under
this Agreement, shall be secured at all times by a perfected first
priority pledge by (i) the Operating Partnership, pursuant to the
Pledge Agreement, in the Pledged Partnership Interests described
therein, (ii) the Company, pursuant to the Company Pledge Agreement, in
the Pledged Stock described therein, and (iii) the Operating
Partnership, pursuant to the Existing Pledge Agreement, in and to the
Existing Collateral.
(e) Notice. The Administrative Agent shall have received a
notice with respect to such Borrowing as required by Section 4.04.
(f) Other. All partnership and corporate and other
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated by this Agreement and the
other Credit Facility Documents shall be reasonably satisfactory in
form and substance to the Administrative Agent, and the Administrative
Agent shall have received such other documents and legal opinions in
respect of any aspect or consequence of the transactions contemplated
hereby or thereby as it shall reasonably request.
Each notice of Borrowing by the Operating Partnership hereunder shall constitute
a representation and warranty by the Operating Partnership that the conditions
contained in this Section 6.02 have been satisfied (both as of the date of such
notice and, unless the Operating Partnership otherwise notifies the Lender prior
to the date of such Borrowing, as of the date of such Borrowing).
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to make
the Loans provided for herein, the Operating Partnership hereby represents and
warrants to the Administrative Agent and each Lender that:
SECTION VII.01. Partnership Existence. The Operating Partnership: (a)
is a limited partnership duly organized, validly existing and in good standing
under the laws of the State of Delaware; (b) has all requisite partnership power
and authority, and has all material governmental licenses, authorizations,
consents and approvals, necessary to own its Property and assets and carry on
its business as now being or as proposed to be conducted; (c) is duly qualified
to do business and is in good standing under the laws of each jurisdiction in
which the nature of the business conducted by it makes such qualification
necessary and where failure so to qualify would, in the reasonable judgment of
the Operating Partnership, have a Material Adverse Effect on the Operating
Partnership; and (d) is in compliance with all Requirements of Law except to the
extent that all failures to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Operating
Partnership.
SECTION VII.02. Financial Condition.
(a) The combined financial statements and schedules of the
REIT Group dated June 30, 1996 fairly present the combined financial
position of the REIT Group and the results of operations and changes in
financial condition as of the dates and periods therein specified. Such
combined financial statements and schedules have been prepared in
accordance with GAAP consistently applied throughout the periods
involved (except as otherwise noted therein). The balance sheet of the
Company fairly presents the financial position of the Company as of its
date and has been prepared in accordance with GAAP. Neither the
Operating Partnership nor the Company has any material contingent
liability, liability for taxes or other liability not reflected in the
financial statements, except for liabilities incurred in the ordinary
course of business. During the period from July 1, 1996 to and
including the date hereof there has been no sale, transfer or other
disposition by the Operating Partnership or any of its Subsidiaries of
any material part of its business or Property and no purchase or other
acquisition of any business or Property (including any capital stock of
any other Person) material in relation to the consolidated financial
condition of the Operating Partnership and its Subsidiaries at June 30,
1996, except as would have been permitted by this Agreement if it were
then effective. Since July 1, 1996, there has been no development or
event which has had or could reasonably be expected to have a Material
Adverse Effect on the Company, the Operating Partnership or its
Subsidiaries.
(b) The Operating Partnership is not entering into the
arrangements contemplated hereby and by the other Credit Facility
Documents, and does not intend to make any transfer or incur any
obligations hereunder or thereunder, with actual intent to hinder,
delay or defraud either present or future creditors. On and as of the
Closing Date, on a pro forma basis after giving effect to all
Indebtedness (including the Loans incurred and Liens created, or to be
created, in connection therewith) and on the date of each Loan (w) the
Operating Partnership expects that the cash available to the Operating
Partnership and its Subsidiaries on a consolidated basis, after taking
into account all other anticipated uses of the cash of such Person
(including the payments on or in respect of debt referred to in clause
(y) of this Section 7.02(b)), will be sufficient to satisfy all
obligations and liabilities of the Operating Partnership and its
Subsidiaries as they become due; (x) the sum of the present fair
saleable value of the assets of the Operating Partnership and its
Subsidiaries on a consolidated basis will exceed the probable liability
of the Operating Partnership and its Subsidiaries on their debts
(including their Guaranty Obligations); (y) the Operating Partnership
and its Subsidiaries on a consolidated basis will not have incurred and
do not intend to, or believe that they will, incur debts beyond their
ability to pay such debts as such debts mature (taking into account the
timing and amounts of cash to be received by such Person from any
source, and of amounts to be payable on or in respect of debts of such
Person and the amounts referred to in clause (w)); and (z) the
Operating Partnership and its Subsidiaries on a consolidated basis will
have sufficient capital with which to conduct their present and
proposed business and the Property of the Operating Partnership and its
Subsidiaries does not constitute unreasonably small capital with which
to conduct their present or proposed business. For purposes of this
Section 7.02(b), "debt" means any liability on a claim, and "claim"
means (i) right to payment whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed (other than those being disputed in good faith),
undisputed, legal, equitable, secured or unsecured, or (ii) right to an
equitable remedy for breach of performance if such breach gives rise to
a payment, whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured.
SECTION VII.03. Litigation; There are no legal or arbitral proceedings,
or any proceedings by or before any governmental or regulatory authority or
agency, now pending or (to the knowledge of the Operating Partnership)
threatened against or affecting the Operating Partnership, any Subsidiary or any
of their Property which, if adversely determined, would have a Material Adverse
Effect on the Operating Partnership or any Subsidiary or which involve this
Agreement or any of the transactions contemplated thereby.
SECTION VII.04. No Breach; The execution and delivery of this Agreement
and the other Credit Facility Documents, the consummation of the transactions
herein contemplated and compliance with the terms and provisions hereof do not
and will not conflict with or result in a breach of, or require any consent or
constitute a default under, the certificate of limited partnership or
partnership agreement of the Operating Partnership, any Requirement of Law, any
decree of any court or governmental authority or agency, or any agreement or
instrument to which the Operating Partnership is a party or by which it or any
of its Property is bound except any such consent that may have been obtained
prior to the date hereof, and will not result in, or require, the creation or
imposition of any Lien (other than those created pursuant to the Pledge
Agreement) on any of its Property or assets.
SECTION VII.05. Partnership Power; Authorization; Enforceable
Obligations. The Operating Partnership has all necessary partnership power,
authority and legal right to make, execute, deliver and perform its obligations
under this Agreement and the other Credit Facility Documents; the making and
performance by the Operating Partnership of this Agreement and the other Credit
Facility Documents have been duly authorized by all necessary partnership action
on its part (including, without limitation, any required shareholder approvals);
and this Agreement, the Pledge Agreement and the other Credit Facility Documents
have been duly and validly executed and delivered by the Operating Partnership
and constitute, and each Note when executed and delivered by the Operating
Partnership for value will constitute, its legal, valid and binding obligation,
enforceable against the Operating Partnership in accordance with its terms,
except as such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or similar laws of general applicability affecting
the enforcement of creditors' rights, and (b) the application of general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
SECTION VII.06. Approvals; No authorizations, approvals or consents
of, and no filings or registrations with, any governmental or regulatory
authority or agency or any securities exchange are necessary for the making and
performance by the Operating Partnership of this Agreement and the other Credit
Facility Documents or for the legality, validity or enforceability thereof that
have not been made or obtained (other than any filings required for the
perfection of the security interests under the Pledge Agreement and which the
Operating Partnership will cause to be made in accordance with the Pledge
Agreement). There does not exist any judgment, order, injunction or other
restraint issued or filed or hearing seeking injunctive relief or other
restraint pending or noticed with respect to the making of Loans by the Lenders,
the performance by the Operating Partnership under any of the related documents
to which they are or will be a party or any of the transactions contemplated
thereby.
SECTION VII.07. No Default; Neither the Operating Partnership nor any
of its Subsidiaries is in default under or with respect to any of their
Contractual Obligations in any respect, or with respect to any order, writ,
injunction, decree, rule or regulation of any Governmental Authority, which
default could reasonably be expected to have a Material Adverse Effect on the
Operating Partnership or its Subsidiaries. As of the Closing Date, and as of the
date of each Loan, no Default or Event of Default has occurred and is
continuing.
SECTION VII.08. Ownership of Property; Each of the Operating
Partnership and its Subsidiaries has good record and marketable title in fee
simple to, or a valid leasehold interest in, all its real property, and good
title to, or a valid leasehold interest in, all its other Property, except to
the extent that all failures to have such good title and valid leasehold
interests could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Operating Partnership or its Subsidiaries.
SECTION VII.09. Taxes; Each of the Operating Partnership and its
Subsidiaries has filed or caused to be filed all material tax returns which, to
the knowledge of the Operating Partnership, are required to be filed by them (or
extensions of time to file such returns have been obtained) and have paid all
taxes shown to be due and payable on said returns or on any assessments made
against them or any of their Property and all other taxes, fees or other charges
imposed on them or any of their Property by any Governmental Authority (other
than any the amount or validity of which are being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of the Operating Partnership or its
Subsidiaries, as the case may be); no tax Lien has been filed, and, to the
knowledge of the Operating Partnership, no claim is being asserted in writing
with respect to any such tax, fee or other charge which, if foreclosed upon or
adversely determined, as the case may be, would have a Material Adverse Effect
on the Operating Partnership or its Subsidiaries.
SECTION VII.10. Use of Credit; The Operating Partnership is not engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing any "margin stock" as such term is defined
in Regulation U. No part of the proceeds of any Loans will be used for
"purchasing" or "carrying" any "margin stock" within the respective meanings of
each of the quoted terms under Regulation U as now and from time to time
hereafter in effect or for any purpose which violates the provisions of
Regulations G, T, U or X or other regulations of the Board of Governors of the
Federal Reserve System. If requested by any Lender or the Administrative Agent,
the Operating Partnership will furnish to the Administrative Agent and each
Lender a statement to the foregoing effect in conformity with the requirements
of FR Form U-1 referred to in said Regulation U.
SECTION VII.11. ERISA; Each of the Operating Partnership and its
Subsidiaries is in compliance in all material respects with the provisions of
ERISA and the Internal Revenue Code applicable to Plans. Each Plan, and, to the
knowledge of the Operating Partnership, each Multiemployer Plan, is in
compliance in all material respects with, and has been administered in all
material respects in compliance with, the applicable provisions of ERISA, the
Internal Revenue Code and any other federal or state law. No event or condition
has occurred and is continuing as to which the Operating Partnership or any
Subsidiary would be under an obligation to furnish a report to the Lenders under
Section 8.08 hereof. No liability to the PBGC that is material to the Operating
Partnership and its Subsidiaries taken as a whole has been, or to the Operating
Partnership's best knowledge is reasonably expected to be, incurred with respect
to any Plan.
SECTION VII.12. Investment Company Act; The Operating Partnership is
not, and will not during the term of this Agreement be, an "investment company,"
or a company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended. The Operating Partnership is not
subject to regulation under any foreign, federal, state or local statute or
regulation which limits its ability to incur Indebtedness.
SECTION VII.13. Public Utility Holding Company Act; The Operating
Partnership is not, and will not during the term of this Agreement be, a
"holding company," or an "affiliate" of a "holding company" or a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
SECTION VII.14. Environmental Matters; Each of the Operating
Partnership and its Subsidiaries has obtained all environmental, health and
safety permits, licenses and other authorizations required under all
Environmental Laws to carry on their business as now being or as proposed to be
conducted, except to the extent failure to have any such permit, license or
authorization would not in the reasonable judgment of the Operating Partnership
have a Material Adverse Effect on the Operating Partnership or its Subsidiaries.
Each of such permits, licenses and authorizations is in full force and effect
and each of the Operating Partnership and its Subsidiaries is in compliance with
the terms and conditions thereof, and is also in compliance with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any applicable Environmental
Law or in any plan, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder, except to the extent failure to comply
therewith would not in the reasonable judgment of the Operating Partnership have
a Material Adverse Effect on the Operating Partnership or its Subsidiaries.
In addition, except as previously disclosed in writing to the
Administrative Agent and the Lenders or as disclosed in writing to the Lenders
from time to time, (i) no notice, notification, demand, request for information,
citation, summons or order has been issued, (ii) no complaint has been filed,
(iii) no penalty has been assessed, and (iv) no investigation or review is
pending or threatened by any governmental or other entity, with respect to any
alleged failure by the Operating Partnership or any Subsidiary to have any
environmental permit, license or other authorization required under any
Environmental Law in connection with the conduct of the business of the
Operating Partnership or any Subsidiary or with respect to any generation, use,
treatment, storage, recycling, transportation, discharge or disposal, or any
Release or threatened Release of any Hazardous Substances generated by the
Operating Partnership or any Subsidiary.
SECTION VII.15. True and Complete Disclosure; The information, reports,
financial statements, exhibits and schedules furnished by or on behalf of the
Operating Partnership to the Lenders in connection with the negotiation,
preparation or delivery of this Agreement or included herein or delivered
pursuant hereto, when taken as a whole, do not contain any untrue statement of
material fact or omit to state any material fact necessary to make the
statements herein or therein, in light of the circumstances under which they
were made, not misleading. All written financial information furnished after the
date hereof by the Operating Partnership to the Lenders in connection with this
Agreement and the transactions contemplated hereby will be true, complete and
accurate in every material respect, or (in the case of projections) based on
estimates believed by the Operating Partnership in good faith to be reasonable,
on the date as of which such information is stated or certified. There is no
fact known to the Operating Partnership that would, in the reasonable opinion of
the Operating Partnership, have a Material Adverse Effect on the Operating
Partnership or its Subsidiaries that has not been disclosed herein or in a
report, financial statement, exhibit, schedule, disclosure letter or other
writing furnished to the Lenders for use in connection with the transactions
contemplated hereby.
SECTION VII.16. Labor Matters; Neither the Operating Partnership nor
any of its Subsidiaries has experienced any strike, labor dispute, slowdown or
work stoppage due to labor disagreements which has had a Material Adverse Effect
on the respective businesses of the Operating Partnership and its Subsidiaries
taken as a whole, and to the best knowledge of the Operating Partnership, there
is no such strike, dispute, slowdown or work stoppage threatened against the
Operating Partnership or any of its Subsidiaries.
SECTION VII.17. Pledged Partnership Interests
(a) The Operating Partnership (i) is the legal and beneficial
owner of, and has sole right, title and interest to, the Pledged Partnership
Interests, (ii) will on the Closing Date own all the Pledged Partnership
Interests free of all Liens, and (iii) has sole right and power to pledge, and
grant the Lien upon such Pledged Partnership Interests pursuant to the Pledge
Agreement.
(b) The Pledged Partnership Interests have been duly
authorized and validly issued and are fully paid and nonassessable.
(c) Upon delivery to the Administrative Agent of the
certificates, if any, evidencing the Pledged Partnership Interests in existence
on the Closing Date and the filing of financing statements in the appropriate
filing offices, the pledge hereunder will create in favor of the Administrative
Agent for the benefit of the Lenders a valid, binding and enforceable (subject,
as to enforcement, to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and to general principles of equity) security interest in and lien
upon such Pledged Partnership Interests and constitute a fully perfected first
and prior security interest in and lien upon all right, title and interest of
the Operating Partnership in such Pledged Partnership Interests.
ARTICLE VIII.
COVENANTS OF THE OPERATING PARTNERSHIP
The Operating Partnership hereby covenants and agrees that, so long as
the Commitments remain in effect and any Note or Loan remains outstanding, and
until payment in full of all amounts payable by the Operating Partnership to any
Lender or the Administrative Agent hereunder:
SECTION VIII.01. Financial Statements The Operating Partnership shall
deliver to the Administrative Agent and to each Lender:
(a) as soon as available, but in any event within forty-five
(45) days after the end of each of the first three quarterly fiscal periods of
each fiscal year of the Operating Partnership, (i) separate financial statements
for the Subject Property, including a balance sheet, an income and expense
statement, a reconciliation of surplus, occupancy percentages and such other
statements as may be required by the Administrative Agent, prepared in
accordance with GAAP, and (ii) consolidated financial statements of the Company,
the Operating Partnership and their Consolidated Subsidiaries as filed with the
Securities and Exchange Commission, including supplemental schedules of separate
consolidating balance sheets and income and expense statements for each of the
Company, the Operating Partnership and their Consolidated Subsidiaries, a
schedule showing the depreciated basis (determined under GAAP) for each of the
assets listed on Schedule III, and such other statements as may be required by
the Administrative Agent, accompanied by a certificate of a Responsible Officer
of the Company, which certificate shall state that said financial statements
fairly present the consolidated financial condition and results of operations of
the Company, the Operating Partnership and their Consolidated Subsidiaries, in
accordance with GAAP, consistently applied (without prejudice to any change made
in accordance with the provisions of Section 1.03), as at the end of, and for,
such period (subject to normal year-end audit adjustments);
(b) as soon as available, but in any event within ninety (90)
days after the end of each fiscal year of the Operating Partnership, (i)
separate financial statements for the Subject Property, including a balance
sheet, an income and expense statement, a reconciliation of surplus, occupancy
percentages and such other statements as may be required by the Administrative
Agent, prepared in accordance with GAAP, and (ii) consolidated financial
statements of the Company, the Operating Partnership and their Consolidated
Subsidiaries as filed with the Securities and Exchange Commission, including
supplemental schedules of separate consolidating balance sheets and income and
expense statements for each of the Company, the Operating Partnership and their
Consolidated Subsidiaries, a schedule showing the depreciated basis (determined
under GAAP) for each of the assets listed on Schedule III, and such other
statements as may be required by the Administrative Agent, accompanied by a
report and opinion thereon by Price Waterhouse or another independent certified
public accountant of recognized national standing acceptable to the
Administrative Agent which report shall (A) be unqualified as to going concern
and scope of audit, (B) state that said financial statements fairly present the
consolidated financial condition and results of operations of the Company, the
Operating Partnership and their Consolidated Subsidiaries as at the end of, and
for, such fiscal year in accordance with GAAP, and (C) contain no material
exceptions or qualifications except for qualifications relating to accounting
changes (with which such independent public accountants concur) in response to
FASB releases or other authoritative pronouncements.
(c) as soon as available, but in any event within forty-five
(45) days after the end of each calendar month, a true, complete and correct
cash flow statement with respect to the Subject Property in the form of Exhibit
B to the Mortgage Indenture showing (x) all cash receipts of any kind whatsoever
and all cash payments and disbursements, and (y) year-to-date summaries of such
cash receipts, payments and disbursements, together with a certification of the
Operating Partnership stating that (i) such cash flow statement is true,
complete and correct in all material respects and (ii) all operating expenses
with respect to the Subject Property which have accrued and have been billed to
the Operating Partnership or any of its Subsidiaries as of the last day of the
month preceding the month for which foregoing information is applicable have
been fully paid or otherwise provided for by the Operating Partnership or its
Subsidiaries.
(d) on a quarterly basis, a true, complete and correct rent
roll for the Subject Property, identifying each tenant, the expiration date of
such tenant's lease, the space covered by such lease, all extension, renewal,
termination or expansion rights, if any, of such tenant and any portion of the
Subject Property demised to such tenant, if any, which is not occupied for the
conduct of business by such tenant or any subtenant of such tenant, together
with a certificate of the Operating Partnership, dated as of the date of
delivery of such rent roll, certifying that such rent roll is true, correct and
complete in all material respects as of its date.
All such financial statements under (a) and (b) above shall be complete and
correct in all material respects and shall be prepared in reasonable detail and
in accordance with GAAP applied consistently throughout the periods reflected
therein and with prior periods (except as approved by such accountants or
officer, as the case may be, and disclosed therein).
SECTION VIII.02. Certificates and Other Information; The Operating
Partnership shall deliver to the Administrative Agent and to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 8.01(b), a certificate of the independent certified
public accountants reporting on such financial statements stating that in making
the examination necessary therefor no knowledge was obtained of any Default or
Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in Sections 8.01(a) and 8.01(b), a certificate of a Responsible
Officer of the Company stating that, to the best of such Responsible Officer's
knowledge, the Operating Partnership and each of its Subsidiaries has during
such period observed or performed all of its covenants and other agreements, and
satisfied every condition, in all material respects, contained in this
Agreement, the Notes and the other Credit Facility Documents to which it is a
party to be observed, performed or satisfied by it, and that no Default or Event
of Default has occurred or is continuing except as specified in such
certificate;
(c) promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent or made
available by the Operating Partnership or any of its Subsidiaries to its
partners generally, of all regular and periodic reports and all registration
statements and prospectuses, if any, filed by any of them with any securities
exchange or with the Securities and Exchange Commission, or any comparable
foreign bodies, and of all press releases and other statements made available
generally by any of them to the public concerning material developments in the
business of the Operating Partnership or any of its Subsidiaries; and
(d) promptly upon any executive officer of the Company obtaining
knowledge (i) of any Default, or becoming aware that any Lender has given notice
or taken any other action with respect to a claimed Event of Default or (ii)
that any Person has given any notice to the Operating Partnership or taken any
other action with respect to a claimed default or event or condition of the type
referred to in paragraph (b) of Article IX or any condition or event which would
be required to be disclosed in a current report filed by the Operating
Partnership with the Securities and Exchange Commission on Form 8-K (other than
Item 5 as in effect on the date hereof) if the Operating Partnership were
required to file such reports under the Securities Exchange Act of 1934, as
amended, or the rules and regulations thereunder (or any successor thereof), a
certificate of the president or chief financial officer of the Company
specifying the nature and period of existence of any such condition or event, or
specifying the notice given or action taken by such holder or Person and the
nature of such claimed Event of Default or condition and what action the
Operating Partnership has taken, is taking and proposes to take with respect
thereto.
SECTION VIII.03. Litigation; The Operating Partnership will promptly
give to the Lenders notice of all legal or arbitral proceedings, and of all
proceeding by or before any governmental or regulatory authority or agency, and
any material development in respect of such legal or other proceedings,
affecting the Operating Partnership or any of its Subsidiaries, except
proceedings which, if adversely determined, would not, in the reasonable
judgment of the Operating Partnership, have a Material Adverse Effect on the
Operating Partnership or its Subsidiaries.
SECTION VIII.04. Conduct of Business, Existence, Etc.; The Operating
Partnership will, and will cause each of its Subsidiaries to:
(a) continue to engage in business of the same general type as
now conducted by it; do or cause to be done all things necessary to preserve,
renew and maintain in full force and effect its legal existence; and take all
reasonable action to maintain all rights, privileges, licenses and franchises
necessary or desirable in the normal conduct of its business, except such
rights, privileges, licenses and franchises with respect to which the failure to
maintain could not, individually or in the aggregate, have a Material Adverse
Effect on the Operating Partnership or its Subsidiaries;
(b) comply with all Contractual Obligations and Requirements
of Law if the failure to comply with such requirements would reasonably be
expected to have a Material Adverse Effect on the Operating Partnership or its
Subsidiaries;
(c) pay and discharge all taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any of its
Property prior to the date on which penalties attach thereto, except for any
such tax, assessment, charge or levy the payment of which is being contested in
good faith and by proper proceedings and against which any reserves required by
GAAP are being maintained or the failure to pay or discharge which would not, in
the reasonable judgment of the Operating Partnership, have a Material Adverse
Effect on the Operating Partnership or its Subsidiaries;
(d) maintain all of its Property used or useful in its
business in good working order and condition, ordinary wear and tear excepted,
if failure to so maintain such Property would have a Material Adverse Effect on
the Operating Partnership or its Subsidiaries, and, from time to time (i) make
all necessary and proper repairs, renewals, replacements, additions and
improvements thereto, and (ii) comply at all times with the provisions of all
material leases and other material agreements to which it is a party so as to
prevent any loss or forfeiture thereof or thereunder;
(e) keep proper records and books of account, in which full,
true and complete entries in conformity with GAAP consistently applied and in
accordance with all Requirements of Law shall be made of all dealings and
transactions in relation to its business and activities; and
(f) permit, upon reasonable notice, representatives of the
Administrative Agent and any Lender, during normal business hours, to examine,
copy and make extracts from its books and records, to inspect any of its
Property, and to discuss its business and affairs with its officers and
independent certified accountants, all to the extent reasonably requested by the
Lenders; provided, however, that to the extent any of such information (not
including information provided pursuant to Sections 8.01 and 8.02) is defined as
"Confidential Information" in the Mortgage Indenture, the Operating Partnership
may require that the Administrative Agent and any Lender keep such information
confidential; provided further, however, that the Administrative Agent and any
Lender may disclose all or part of such information to a third party, provided
that such third party agrees to keep the same confidential and not to use such
information for competitive purposes.
SECTION VIII.05. Payment of Obligations; The Operating Partnership
will, and will cause each Subsidiary to, pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, under the terms of each mortgage, indenture,
security agreement, other debt instrument and contract and agreement by which it
is bound or to which it is a party or subject, except (a) where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Operating Partnership or its Subsidiaries, as the
case may be, (b) where the failure to pay such obligations could not,
individually or in the aggregate, have a Material Adverse Effect on the
Operating Partnership or its Subsidiaries, or (c) for trade and other accounts
payable in the ordinary course of business in accordance with customary trade
terms and which are not overdue for a period of more than ninety (90) days (or
any longer period if longer payment terms are accepted in the ordinary course of
business) or, if overdue for more than ninety (90) days (or such longer period),
as to which a dispute exists and adequate reserves in conformity with GAAP have
been established on the books of the Operating Partnership and its Subsidiaries,
as the case may be.
SECTION VIII.06. Insurance; The Operating Partnership will, and will
cause its Subsidiaries to, keep insured by responsible insurers all Property of
a character usually insured by corporations or partnerships engaged in the same
or similar business similarly situated against loss or damage of the kinds and
in the amounts customarily insured against by such corporations or partnerships
and carry such other insurance as is usually carried by such corporations or
partnerships. The Operating Partnership will furnish to the Administrative
Agent, upon written request, full information as to the insurance carried, and
will advise the Administrative Agent promptly of any policy cancellation,
reduction or amendment.
SECTION VIII.07. Limitation on Liens; The Operating Partnership will
not, nor will it permit any of its Subsidiaries to, create, incur, assume or
suffer to exist any Lien upon (i) the Subject Property except for Liens securing
the portion of the Assumed Debt due to Northwestern Mutual Life Insurance
Company and Principal Mutual Life Insurance Company, and (ii) the Collateral
described in the Pledge Agreement, except in favor of the Administrative Agent,
for the benefit of Lenders.
SECTION VIII.08. ERISA.; The Operating Partnership shall deliver to the
Administrative Agent as soon as possible, and in any event within ten (10) days
after the Operating Partnership knows or has reason to believe that any of the
events or conditions specified below with respect to any Plan or Multiemployer
Plan has occurred or exists, a statement signed by a senior financial officer of
the Operating Partnership setting forth details respecting such event or
condition and the action, if any, that the Operating Partnership or its ERISA
Affiliate proposes to take with respect thereto (and a copy of any report or
notice required to be filed with or given to PBGC by the Operating Partnership
with respect to such event or condition):
(a) any reportable event as defined in Section 4043(b) of
ERISA and the regulations issued thereunder, with respect to a Plan, as to which
PBGC has not by regulation waived the requirement of Section 4043(a) of ERISA
that it be notified within thirty (30) days of the occurrence of such event
(provided, however, that a failure to meet the minimum funding standard of
Section 412 of the Internal Revenue Code or Section 302 of ERISA, including,
without limitation, the failure to make on or before its due date a required
installment under Section 412(m) of the Internal Revenue Code or Section 302(e)
of ERISA, shall be a reportable event regardless of the issuance of any waivers
in accordance with Section 412(d) of the Internal Revenue Code); and any request
for a waiver under Section 412(d) of the Internal Revenue Code for any Plan;
(b) the distribution under Section 4041 of ERISA of a notice
of intent to terminate any Plan or any action taken by the Operating Partnership
or an ERISA Affiliate to terminate any Plan;
(c) the institution by PBGC of proceedings under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any Plan, or the receipt by the Operating Partnership or any ERISA Affiliate of
a notice from a Multiemployer Plan that such action has been taken by PBGC with
respect to such Multiemployer Plan;
(d) the complete or partial withdrawal from a Multiemployer
Plan by the Operating Partnership or any ERISA Affiliate that results in
liability under Section 4201 or 4204 of ERISA (including the obligation to
satisfy secondary liability as a result of a purchaser default) or the receipt
by the Operating Partnership or any ERISA Affiliate of notice from a
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA or that it intends to terminate or has terminated
under Section 4041A of ERISA;
(e) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against the Operating Partnership or any ERISA Affiliate to
enforce Section 515 of ERISA, which proceeding is not dismissed within thirty
(30) days; and
(f) the adoption of an amendment to any Plan that, pursuant to
Section 401(a)(29) of the Internal Revenue Code or Section 307 of ERISA, would
result in the loss of tax-exempt status of the trust of which such Plan is a
part if the Operating Partnership or an ERISA Affiliate fails to timely provide
security to the Plan in accordance with the provisions of said Sections.
SECTION VIII.09. Use of Proceeds; The Operating Partnership will use
the proceeds of Borrowings hereunder solely for working capital purposes,
including the acquisition or improvement of real property, and other general
purposes of the Operating Partnership, including capital expenditures and tenant
improvements; provided, however, that (i) the Lenders shall have no
responsibility as to the use of any of such proceeds, (ii) proceeds of
Borrowings to be used for any purpose other than property acquisitions and
improvements will be limited to $15,000,000 in the aggregate outstanding at any
one time without the prior written consent of the Administrative Agent (which
consent shall not be unreasonably withheld), and (iii) proceeds of Borrowings
will not be used to pay any dividends or distributions.
SECTION VIII.10. Environmental Laws. The Operating Partnership shall:
(a) promptly notify the Administrative Agent upon any
executive officer of the Operating Partnership becoming aware of any violation
or threatened violation or non-compliance with, or liability or threatened
liability under any Environmental Laws which, when taken together with all other
pending violations could reasonably be expected to have a Material Adverse
Effect on the Operating Partnership and its Subsidiaries taken as a whole, and
promptly furnish to the Administrative Agent all notices of any nature which the
Operating Partnership may receive from any Governmental Authority or other
Person with respect to any violation, or threatened violation or non-compliance
with, or liability or threatened liability under any Environmental Laws which,
in any case or when taken together with all such other notices, could reasonably
be expected to have a Material Adverse Effect on the Operating Partnership or
its Subsidiaries;
(b) comply with and use reasonable efforts to ensure
compliance by all tenants and subtenants with all Environmental Laws, and obtain
and comply in all material respects with and maintain and use best efforts to
ensure that all tenants and subtenants obtain and comply in all material
respects with and maintain any and all licenses, approvals, registrations or
permits required by Environmental Laws;
(c) conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required of the
Operating Partnership or its Subsidiaries under all Environmental Laws and
promptly comply in all material respects with all lawful orders and directives
of all Governmental Authorities; and
(d) defend, indemnify, protect and hold harmless the
Administrative Agent and the Lenders, and their respective employees, agents,
officers and directors (each, an "Indemnified Person"), from and against any
claims, demands, penalties, fines, liabilities, settlements, damages, defenses,
judgments, suits, proceedings, losses, obligations, costs and expenses of any
kind or nature whatsoever, known or unknown, contingent or otherwise, arising
out of, or in any way related to the violation of or noncompliance with any
Environmental Laws (relating to (1) the past, present or future ownership,
possession, control or operation of any Property or any asset of the Operating
Partnership or its Subsidiaries, (2) the past, present or future condition of
any site or facility owned, operated or leased by the Operating Partnership or
any of its Subsidiaries, or (3) any Release or threatened Release of any
Hazardous Substances from any such site or facility, including any such Release
or threatened Release which shall occur during any period when the
Administrative Agent on behalf of the Lenders shall be in possession of any such
site or facility following the exercise by the Administrative Agent on behalf of
the Lenders of any of their rights and remedies hereunder or under any related
document), including, without limitation, reasonable attorney and consultant
fees, investigation and laboratory fees and costs ("Indemnified Expenses"), but
excluding therefrom, taking into account all principles of equitable
apportionment, all claims, demands, penalties, fines, liabilities, settlements,
damages, defenses, judgments, suits, proceeds, losses, obligations, costs and
expenses of any kind or nature whatsoever, known or unknown, contingent or
otherwise, arising out of or resulting, directly or indirectly, from (i) the
gross negligence or willful misconduct of such Indemnified Person, or (ii) any
acts or omissions of any Indemnified Person occurring after such Indemnified
Person is in possession of, or controls the operation of, any Property or asset
of the Operating Partnership or any of its Subsidiaries, except to the extent
such Indemnified Expenses arise from any act or omission, condition or event in
existence on or before the date such Indemnified Person is in possession of, or
controls the operation of, any Property or asset of the Operating Partnership or
any of its Subsidiaries, even if the act or omission, condition or event (x) is
not discovered until after such date, or (y) becomes an Indemnified Expense as a
result of a change in any Environmental Law that becomes effective after such
date.
(e) The agreements in Section 8.10(d) shall survive repayment
of the Notes and all other amounts payable hereunder and any termination or
expiration of any of the Credit Facility Documents.
SECTION VIII.11. Hazardous Substances. The Operating Partnership shall
not cause or permit, or permit any Subsidiary to cause or permit, any of its
Property or assets to be used to generate, manufacture, refine, transport,
treat, store, handle, dispose, transfer, produce or process Hazardous
Substances, except in compliance in all material respects with all applicable
Environmental Laws, nor release, discharge, dispose of or permit or suffer any
release or disposal as a result of any intentional act or omission on its part
of Hazardous Substances onto any such Property or asset in material violation of
any Environmental Law.
SECTION VIII.12. Claims. The Operating Partnership shall report to the
Administrative Agent, within fifteen (15) days of the date on which an executive
officer becomes aware of the same, any legal claims against the Operating
Partnership in excess of $1,000,000 over the amount directly covered by
insurance.
SECTION VIII.13. Maintenance of Ownership The Operating Partnership
shall continue to own 100% of the issued and outstanding limited partnership
interests in Holdings and each of the UREs.
SECTION VIII.14. Indebtedness The Operating Partnership shall not, and
shall not permit any of Holdings, the UREs or the G.P. Subs to, create, incur or
suffer to exist any Indebtedness, except to Lenders and the Assumed Debt and
except for the Contingent Consideration Liability.
SECTION VIII.15. Dividends and Distributions The Operating Partnership
shall not make any distributions or pay any dividends on account of its
partnership interests during any fiscal quarter in an amount in excess of 100%
of the Operating Partnership's available funds from operations (as determined in
accordance with industry standards relating to REITs) for the immediately
preceding fiscal quarter (except to the extent such excess dividends or
distributions are attributable to gains from the sale of the Operating
Partnership's assets or are required for the Company to maintain its status as a
real estate investment trust under the Internal Revenue Code); provided,
however, that the Operating Partnership may make distributions and pay dividends
in excess of 100% of available funds from operations for the preceding fiscal
quarter for not more than three (3) consecutive fiscal quarters.
SECTION VIII.16. Assets of Holdings . The Operating Partnership shall
not permit Holdings or the UREs to acquire, own or hold any Property other than
the fee simple interest or leasehold interest in the Subject Property, as
applicable, and assets derived from the ownership of the Subject Property.
SECTION VIII.17. Compliance Certification Within forty-five (45) days
after the end of each calendar quarter, the Operating Partnership shall certify
to Lenders that the Operating Partnership has complied with all covenants
contained in this Article VIII and that, as of the last business day of such
quarter, there existed no Default or Event of Default.
ARTICLE IX.
EVENTS OF DEFAULT
SECTION 9.01. If one or more of the following events (herein called "Events of
Default") shall occur and be continuing:
(a) The Operating Partnership shall default in the payment
when due (whether at stated maturity or upon mandatory or optional prepayment or
otherwise) of any principal of any Loan, or shall default for five (5) Business
Days in the payment when due of any interest on any Loan, any fee or any other
amount payable by it hereunder, whether at the due date thereof or at a date
fixed for prepayment thereof or by acceleration thereof or otherwise; or
(b) Any Event of Default (as defined in the Mortgage
Indenture) shall occur or be continuing; or
(c) The Operating Partnership or any of its Subsidiaries shall
(i) default in the payment of principal of or interest of any other Indebtedness
(other than the Notes or Indebtedness under the Mortgage Indenture) or in the
payment of any Guaranty Obligation (in all such cases, having a principal amount
in excess of $2,000,000 in the aggregate) at any one time to any third party
when due (whether at scheduled maturity or by required prepayment, acceleration,
demand or otherwise) and such default continues after the applicable notice or
grace period, if any, specified in the agreement or instrument relating to such
Indebtedness, or (ii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or Guaranty Obligation
or contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, and such default
continues after the applicable notice or grace period, if any, specified in the
agreement or instrument relating to such Indebtedness, the effect of which
default or other event or condition is to cause, or to permit the holder or
holders of such Indebtedness or beneficiary or beneficiaries of such Guaranty
Obligation (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such Indebtedness to become due prior to its stated maturity or such Guaranty
Obligation to become payable; or
(d) Any representation, warranty or certification made or
deemed made herein or in any other Credit Facility Document (or in any
modification or supplement hereto or thereto) by the Operating Partnership or
any of its Subsidiaries, or in any certificate or document furnished to the
Lenders pursuant to the provisions of this Agreement or any such other Credit
Facility Document, shall prove to have been false or misleading as of the time
made or furnished in any material respect; or
(e) The Operating Partnership shall default in the observance
or performance of any agreement contained (i) in Section 8.02 of this Agreement,
or (ii) in the Pledge Agreement; or
(f) The Operating Partnership or any of its Subsidiaries shall
default in the performance of any of its other obligations under this Agreement
or any other Credit Facility Document and such default shall continue unremedied
for a period of thirty (30) days after notice thereof to the Operating
Partnership by the Administrative Agent, which Default cannot be cured by the
payment of a sum of money; provided, however, that if such non-monetary Default
is susceptible of cure but cannot reasonably be cured within such thirty (30)
day period, and if the Operating Partnership or Subsidiary shall have commenced
to cure such Default within such thirty (30) day period and thereafter
diligently and expeditiously proceeds to cure the same, such thirty (30) day
period shall be extended for such time as is reasonably necessary for the
Operating Partnership or such Subsidiary in the exercise of due diligence to
cure such Default, such additional period not to exceed ninety (90) days; or
(g) The Operating Partnership or any of its Subsidiaries shall
admit in writing its inability to, or be generally unable to, pay its debts as
such debts become due; or
(h) The Operating Partnership or any of its Subsidiaries shall
(i) apply for or consent to the appointment of, or the taking of possession by,
a receiver, custodian, trustee, examiner or liquidator of itself or of all or a
substantial part of its Property, (ii) make a general assignment for the benefit
of its creditors, (iii) commence a voluntary case under the Bankruptcy Code (or
the equivalent under the laws of another jurisdiction), (iv) file a petition
seeking to take advantage of any other law relating to bankruptcy, insolvency,
reorganization, liquidation, dissolution, arrangement or winding-up, or
composition or readjustment of debts, (v) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed against it in
an involuntary case under the Bankruptcy Code, or (vi) take any corporate action
for the purpose of effecting any of the foregoing; or
(i) A proceeding or case shall be commenced, without the
application or consent of the Operating Partnership or any of its Subsidiaries,
in any court of competent jurisdiction, seeking (i) its reorganization,
liquidation, dissolution, arrangement or winding-up, or the composition or
readjustment of its debts, (ii) the appointment of a receiver, custodian,
trustee, examiner, liquidator or the like of the Operating Partnership or such
Subsidiary or of all or any substantial part of its Property, or (iii) similar
relief in respect of the Operating Partnership or such Subsidiary under any law
relating to bankruptcy, insolvency, reorganization, winding-up, or composition
or adjustment of debts, and such proceeding or case shall continue undismissed,
or an order, judgment or decree approving or ordering any of the foregoing shall
be entered and continue unstayed and in effect for a period of ninety (90) or
more days; or an order for relief against the Operating Partnership or such
Subsidiary shall be entered in an involuntary case under the Bankruptcy Code (or
the equivalent under the laws of another jurisdiction); or
(j) final judgment or judgments for the payment of money in
excess of $1,300,000 (or the equivalent in another currency) in the aggregate
(exclusive of judgment amounts fully covered by insurance) shall be rendered by
one or more courts, administrative tribunals or other bodies having jurisdiction
against the Operating Partnership or its Subsidiaries and the same shall not be
satisfied or discharged (or provision shall not be made for such satisfaction or
discharge), or a stay of execution thereof shall not be procured, within sixty
(60) days from the date of entry thereof and the Operating Partnership or the
relevant Subsidiary shall not, within said period of sixty (60) days, or such
longer period during which execution of the same shall have been stayed, appeal
therefrom and cause the execution thereof to be stayed during such appeal; or
(k) An event or condition specified in Section 8.08 shall
occur or exist with respect to any Plan or Multiemployer Plan and, as a result
of such event or condition, together with all other events or conditions, the
Operating Partnership or any ERISA Affiliate shall incur or in the reasonable
opinion of the Administrative Agent shall be reasonably likely to incur a
liability to a Plan, a Multiemployer Plan or the PBGC (or any combination of the
foregoing) which would have a Material Adverse Effect on the Operating
Partnership or its Subsidiaries; or
(l) (i) Except following the termination or release thereof in
accordance with the provisions of the Credit Facility Documents, the Pledge
Agreement or the Company Pledge Agreement shall, for any reason, cease to be or
not be in full force and effect, or the Company, the Operating Partnership or
any of its Subsidiaries which is a party to the Pledge Agreement or Company
Pledge Agreement shall so assert, (ii) the Lien created by the Pledge Agreement
or Company Pledge Agreement shall cease to be or not be enforceable and of the
same effect and priority purported to be created thereby, or (iii) any Person
shall have (or the Operating Partnership shall assert that any Person has) a
right in the Pledged Junior Bonds prior to or equal to that of the
Administrative Agent on behalf of the Lenders; or
(m) Holdings or the UREs sell, assign, encumber as a security
device or otherwise transfer any interest in the Subject Property, other than
Liens securing that portion of the Assumed Debt due to Northwestern Mutual Life
Insurance Company and Principal Mutual Life Insurance Company; or
(n) If any of the partnership interests or capital stock (as
applicable) of the Operating Partnership, Holdings, any URE or any G.P. Sub
shall be sold, assigned or otherwise transferred or if a security interest or
other encumbrance shall be granted or otherwise acquired therein or with respect
thereto, except to the Administrative Agent for the benefit of Lenders as
provided in this Agreement and the Credit Facility Documents; or
(o) Holdings, any URE or any G.P. Sub shall create, incur or
suffer to exist any Indebtedness of such Person, other than Indebtedness due to
Lenders pursuant to this Agreement or, with respect to Holdings or any URE, the
Assumed Debt of such person as described in the definition of Assumed Debt under
Section 1.01 and further except for the Contingent Consideration Liability; or
(p) The ratio of EBITDA to Debt Service for the REIT Group is
less than 2 to 1; or
(q) The REIT Group's Net Worth is less than $175,000,000 at
any time; or
(r) The ratio of the Total Debt to Total Assets for the REIT
Group is greater than .6 to 1; or
(s) The Company creates, incurs or suffers to exist any Lien,
charge or encumbrance on the Pledged Stock described in the Company Pledge
Agreement; or
(t) Any Default or Event of Default occurs under the Existing
Credit Facility Documents;
THEREUPON: (1) in the case of an Event of Default other than one referred to in
clause (h) or (i) of this Article IX, either or both of the following actions
may be taken: (i) with the consent of the Majority Lenders, the Administrative
Agent may, or upon the request of the Majority Lenders, the Administrative Agent
shall, by notice to the Operating Partnership declare the Commitments to be
terminated forthwith, whereupon the Commitments shall immediately terminate; and
(ii) with the consent of the Majority Lenders, the Administrative Agent may, or
upon the request of the Majority Lenders, the Administrative Agent shall, by
notice to the Operating Partnership, declare the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement and the Notes
to be due and payable forthwith, whereupon the same shall immediately become due
and payable without presentment, demand, protest or other formalities of any
kind, all of which are hereby expressly waived by the Operating Partnership; and
(2) in the case of the occurrence of an Event of Default referred to in clause
(h) or (i) of this Article IX, automatically the Commitments shall immediately
terminate and the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the Notes shall immediately become due
and payable without presentment, demand, protest or other formalities of any
kind, all of which are hereby expressly waived by the Operating Partnership.
ARTICLE X.
THE ADMINISTRATIVE AGENT
SECTION X.01. Appointment. The general administration of the Credit
Facility Documents and any other documents contemplated by this Agreement shall
be by the Administrative Agent or its designees. Each Lender hereby irrevocably
designates and appoints PSC as the Administrative Agent of such Lender under
this Agreement and the other Credit Facility Documents, and each such Lender
irrevocably authorizes PSC as the Administrative Agent for such Lender, at its
discretion, to take or refrain from taking such action on its behalf under the
provisions of this Agreement and the other Credit Facility Documents and to
exercise or refrain from exercising such powers and perform such duties as are
expressly delegated to the Administrative Agent by the terms of this Agreement
and the other Credit Facility Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Credit Facility Document or otherwise exist against the
Administrative Agent.
SECTION X.02. Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement and the other Credit Facility
Documents by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care.
SECTION X.03. Exculpatory Provisions.
(a) Neither the Administrative Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or any other Credit Facility
Document, or responsible to the Lenders or to any of them for the consequences
of any oversight or error of judgment, or for any loss, unless the same shall
happen through its or such Person's own gross negligence or willful misconduct,
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Operating Partnership or
any officer thereof contained in this Agreement or any other Credit Facility
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with this Agreement or any other Credit Facility Document or for the
due execution, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement, the Notes, or any other Credit Facility Document,
or for the perfection of any security interest contemplated by this Agreement,
any Credit Facility Document or any related agreement, document or order, or for
the designation or failure to designate this transaction as a "Highly Leveraged
Transaction" for regulatory purposes, or for any failure of the Operating
Partnership to perform its obligations hereunder or under any other Credit
Facility Document. The Administrative Agent shall not be under any obligation to
any Lender to ascertain or to inquire as to the observance or performance of any
of the agreements or covenants contained in, or terms or conditions of, this
Agreement or any other Credit Facility Document or to inspect the Property,
books or records of the Operating Partnership.
(b) Neither the Administrative Agent nor any of its directors,
officers, employees, or agents shall have any responsibility to the Operating
Partnership on account of the failure or delay in performance or breach by any
of the Lenders or the Operating Partnership of any of their respective
obligations under this Agreement or the Notes or any related agreement or
document or in connection herewith or therewith.
SECTION X.04. Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any Note, writing, resolution, notice, consent, certificate, affidavit, letter,
telecopy, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and it shall be entitled to rely
upon advice and statements of legal counsel (including, without limitation,
counsel to the Operating Partnership), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Credit Facility Document unless it shall first receive such advice or
concurrence of the Majority Lenders as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. The Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement, the Notes and the
other Credit Facility Documents in accordance with a request of the Majority
Lenders, and any such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Notes.
SECTION X.05. Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or the Operating Partnership pursuant to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default." In the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Majority Lenders;
provided, however, that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
SECTION X.06. Non-Reliance on Administrative Agent and Other Lenders.X.
Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorney-in-fact or Affiliates
has made any representations or warranties to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
the Operating Partnership, shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Lender. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, Property, financial and other
condition and creditworthiness of the Operating Partnership and made its own
decision to make Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Credit Facility Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, Property, condition (financial or otherwise), prospects or
creditworthiness of the Operating Partnership. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, Property, condition (financial or
otherwise), prospects or creditworthiness of the Operating Partnership which may
come into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
SECTION X.07. Reimbursement and Indemnification Each of the Lenders
severally agrees (i) to reimburse the Administrative Agent, in the amount of its
proportionate share, for any expenses and fees incurred for the benefit of the
Lenders under the Credit Facility Documents, including, without limitation,
counsel fees and compensation of agents and employees paid for services rendered
on behalf of the Lenders, and any other expense incurred in connection with the
operations or enforcement thereof not reimbursed by the Operating Partnership or
one of its Subsidiaries, and (ii) to indemnify the Administrative Agent and any
of its directors, officers, employees or agents, upon demand (to the extent not
reimbursed by the Operating Partnership and without limiting the obligation of
the Operating Partnership to do so), ratably according to their respective
Commitment Percentages in effect on the date on which indemnification is sought
under this Section 10.07 (or, if indemnification is sought after the Maturity
Date, ratably according to the amount of outstanding Loans held by each Lender
on the Maturity Date), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Notes) be imposed on,
incurred by or asserted against it or them in any way relating to or arising out
of this Agreement, any of the other Credit Facility Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by it or them
under or in connection with any of the foregoing; provided, however, that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the gross negligence or willful
misconduct of the Person seeking indemnification. The agreements in this Section
10.07 shall survive the payment of the Notes and all other amounts payable
hereunder.
SECTION X.08. Administrative Agent in Its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Operating Partnership as
though the Administrative Agent were not the Administrative Agent hereunder and
under the other Credit Facility Documents. With respect to its Loans made or
renewed by it and any Note issued to it, the Administrative Agent shall have the
same rights and powers under this Agreement and the other Credit Facility
Documents as any Lender and may exercise the same as though it were not the
Administrative Agent, and the terms "Lender" and "Lenders" shall include the
Administrative Agent in its individual capacity.
SECTION X.09. Successor Administrative Agent.
(a) The Administrative Agent and the Collateral Holder may
resign as Administrative Agent and Collateral Holder at any time by giving
written notice thereof to the Lenders. If the Administrative Agent or Collateral
Holder shall resign as Administrative Agent or Collateral Holder, as the case
may be, under this Agreement and the other Credit Facility Documents, then the
Majority Lenders shall appoint from among the Lenders a successor agent or
collateral holder for the Lenders, which successor agent shall be approved by
the Operating Partnership, whereupon such successor agent or collateral holder
shall succeed to the rights, powers and duties of the Administrative Agent or
Collateral Holder, as the case may be, and the terms "Administrative Agent" or
"Collateral Holder" shall mean such successor agent or collateral holder
effective upon such appointment and approval, and the former Administrative
Agent's or Collateral Holder's rights, powers and duties as Administrative Agent
or Collateral Holder, as the case may be, shall be terminated, without any other
or further act or deed on the part of such former Administrative Agent or
Collateral Holder or any of the parties to this Agreement or any holders of the
Notes. If no successor Administrative Agent shall have been so appointed by the
Majority Lenders and shall have accepted such appointment, within thirty (30)
days after the retiring Administrative Agent's giving of notice of resignation,
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, with the consent of the Operating Partnership,
which will not be unreasonably withheld, which shall be a commercial bank
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $250,000,000. After any
retiring Administrative Agent's or Collateral Holder's resignation, the
provisions of this Article X shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent or Collateral
Holder, as the case may be, under this Agreement and the other Credit Facility
Documents.
(b) PSC may at any time and from time to time assign to any of
its Affiliates all or any part of its rights or obligations as Administrative
Agent and/or Collateral Agent under this Agreement, the Notes and the other
Credit Facility Documents. Any such assignment shall not be deemed a resignation
for purposes of Section 10.09(a).
SECTION X.10. Collateral Holder.
(a) Except for action expressly required of the Collateral
Holder hereunder and under the other Credit Facility Documents, the Collateral
Holder shall in all cases be fully justified in refusing to act hereunder and
thereunder unless it shall be further indemnified to its satisfaction by the
Lenders proportionately in accordance with the Obligations then due and payable
to each of them against any and all liability and expense that may be incurred
by it by reason of taking or continuing to take any such action.
(b) Except as expressly provided herein, the Collateral Holder
shall have no duty to take any affirmative steps with respect to the collection
of amounts payable in respect of the Collateral. The Collateral Holder shall
incur no liability as a result of any private sale of the Collateral.
(c) The Lenders hereby consent, and agree upon written request
by the Collateral Holder, to execute and deliver such instruments and other
documents as the Collateral Holder may deem desirable to confirm such consent,
to the release of the Liens and security interests in the Collateral, including
any release in connection with any sale, transfer or other disposition of the
Collateral or any part thereof in accordance with the Credit Facility Documents.
(d) The Collateral Holder shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which the Collateral Holder accords its own Property, it being understood that
neither the Collateral Holder nor any Lender shall have responsibility for (a)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Collateral, whether nor not
the Collateral Holder or any Lender has or is deemed to have knowledge of such
matters, or (b) taking any necessary steps to preserve rights against any
parties with respect to any Collateral.
ARTICLE XI.
MISCELLANEOUS
SECTION XI.01. No Waiver; Cumulative Remedies. No failure on the part
of the Administrative Agent or any Lender to exercise and no delay in
exercising, and no course of dealing with respect to, any right, power or
privilege under this Agreement or any other Credit Facility Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under this Agreement or any other Credit Facility
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights, remedies, powers and privileges
provided herein are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.
SECTION XI.02. Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or three (3) days after
being deposited in the mail, postage prepaid, or, in the case of telecopy
notice, when received, addressed as follows in the case of the Operating
Partnership and the Administrative Agent, and as set forth in Schedule II in the
case of the other parties hereto, or to such other address as may be hereafter
notified by the respective parties hereto and any future holders of the Notes:
The Operating Partnership: Cali Realty, L.P.
11 Commerce Drive
Cranford, New Jersey 07016
Attention: Barry Lefkowitz
Telecopy: (908) 272-6755
With a copy to: Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attention: Jonathan A. Bernstein, Esq.
Telecopy: (212) 326-0806
The Administrative Agent: Prudential Securities Credit Corp.
One New York Plaza
New York, New York 10292
Attention: Norman Chaleff
Telecopy: (212) 778-4312
With copies to: Prudential Securities Incorporated
One New York Plaza
New York, New York 10292
Attention: Richard K. Gupta
Telecopy: (212) 778-4389
Prudential Securities Incorporated
One New York Plaza
New York, New York 10292
Attention: Kenneth M. Leavy
Telecopy: (212) 778-2132
Prudential Securities Incorporated
One New York Plaza
New York, New York 10292
Attention: Michael Moore
Telecopy: (212) 778-4312
With a copy (except in the Morrison & Hecker L.L.P.
case of notice of 2600 Grand Avenue
Borrowings made under Kansas City, Missouri 64108
Section 4.04) to: Attn: Gerald D. Weidner
Telecopy: (816) 474-4208
provided, however, that any notice, request or demand to or upon the
Administrative Agent or the Lenders pursuant to Section 2.02, 2.05, 2.06, 2.08,
2.09, and 2.10 or 4.01(b) shall not be effective until received.
SECTION XI.03. Expenses. The Operating Partnership agrees (a) to pay or
reimburse the Administrative Agent for all its reasonable out-of-pocket third
party costs and expenses incurred in connection with the development,
preparation and execution of, any amendment, supplement, extension or
modification to, or waiver of, this Agreement, the Notes and the other Credit
Facility Documents and any other documents prepared in connection herewith or
therewith, and the consummation of the transactions contemplated thereby, and
any term loan or credit facility made by Lenders or any Third Party to refinance
the Loans, including, without limitation, the reasonable fees and disbursements
of counsel, (b) to pay or reimburse each Lender and the Administrative Agent for
all its reasonable costs and expenses including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative Agent and to
the several Lenders and the reasonable fees and disbursements of technical and
other consultants to the Administrative Agent, incurred in connection with (i)
the enforcement or preservation of any rights under this Agreement, the Notes
and the other Credit Facility Documents and any such other documents, (ii) any
Default and any enforcement or collection proceedings resulting therefrom or in
connection with the negotiation of any restructuring or "work-out" (whether or
not consummated) of the obligations of the Operating Partnership hereunder and
(iii) the enforcement of this Section 11.03, (c) to pay, indemnify and hold each
Lender and the Administrative Agent harmless from any and all recording and
filing fees which may be payable or determined to be payable in connection with
the execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the Notes and
the other Credit Facility Documents and any such other documents, (d) to pay all
transfer, stamp, documentary or other similar taxes, assessments or charges
levied by any governmental or revenue authority in respect of this Agreement,
the Notes or the other Credit Facility Documents, or any related documents, and
(e) all costs, fees and expenses (including fees of the Auditors) associated
with determining the Market Rate or Market Maturity.
The Operating Partnership hereby agrees (i) to indemnify the
Administrative Agent and each Lender and each of their respective directors,
officers, employees, attorneys and agents from, and hold each of them harmless
against, any and all losses, liabilities, claims, damages or expenses incurred
by any of them (including, without limitation, any and all losses, liabilities,
claims, damages or expenses incurred by the Administrative Agent and each
Lender, whether or not the Administrative Agent or Lender, as the case may be,
is a party thereto) arising out of or by reason of any investigation or
litigation or other proceedings (including any threatened investigation or
litigation or other proceedings) relating to the Loans hereunder or any actual
or proposed use by the Operating Partnership of the proceeds of any of the
extensions of credit hereunder, including, without limitation, the reasonable
fees and disbursements of counsel incurred in connection with any such
investigation or litigation or other proceedings (but excluding any such losses,
liabilities, claims, damages or expenses incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified), and (ii) not
to assert any claim against the Administrative Agent or Lenders, any of their
respective Affiliates, or any of their respective directors, officers,
employees, attorneys and agents, on any theory of liability, for special,
indirect, consequential or punitive (as opposed to actual) damages arising out
of or otherwise relating to any of the transactions contemplated herein.
The agreements in this Section 11.03 shall survive repayment of the
Notes and all other amounts payable hereunder and any termination or expiration
of any of the Credit Facility Documents.
SECTION XI.04. Amendments Neither this Agreement, any Note or any other
Credit Facility Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 11.04. The Majority Lenders may, on behalf of all Lenders, or, with the
written consent of the Majority Lenders, the Administrative Agent may, from time
to time, (i) enter into with the Operating Partnership written amendments,
supplements or modifications hereto and to the Notes and the other Credit
Facility Documents for the purpose of adding any provisions to this Agreement,
the Notes or the other Credit Facility Documents or changing in any manner the
rights of the Lenders or of the Operating Partnership, hereunder or thereunder,
or (ii) waive, on such terms and conditions as the Majority Lenders or the
Administrative Agent, as the case may be, may specify, in such instrument, any
of the requirements of this Agreement, the Notes or the other Credit Facility
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification
shall:
(a) reduce the amount or extend the scheduled date of maturity
(except pursuant to Section 2.10(a)(i)(A)) of any Note or of any installment
thereof, or reduce the stated rate of any interest or fee payable hereunder or
extend the scheduled date of any payment thereof or increase the amount or
extend the expiration date of any Lender's Commitment, in each case without the
consent of each Lender directly affected thereby;
(b) (i) amend, modify or waive (A) any provision of this
Section 11.04 or (B) any provision of Sections 2.06 or 2.07; (ii) consent to the
assignment or transfer by the Operating Partnership of any of its rights and
obligations under this Agreement and the other Credit Facility Documents; or
(iii) reduce the percentage specified in the definition of Majority Lenders, in
each case without the written consent of all the Lenders; or
(c) amend, modify or waive any provision of Article X without
the written consent of the then Administrative Agent.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Operating
Partnership, the Lenders, the Administrative Agent and all future holders of the
Notes. In the case of any waiver, the Operating Partnership, the Lenders and the
Administrative Agent shall be restored to their former position and rights
hereunder and under the outstanding Notes and any other Credit Facility
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.
Notwithstanding anything to the contrary contained herein, the
Administrative Agent may amend Schedule I or Schedule II hereto to reflect the
addition or deletion of Lenders in accordance with the provisions hereof and,
upon any such amendment, the Administrative Agent shall deliver a revised
Schedule I and Schedule II to each of the Operating Partnership and the Lenders.
SECTION XI.05. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the Operating Partnership, the Lenders, the
Administrative Agent, all future holders of the Notes and their respective
successors and permitted assigns.
SECTION XI.06. Assignments and Participations.
(a) The Operating Partnership may not assign or transfer any of its
rights or obligations under this Agreement, the Notes or any other Credit
Facility Document without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more Lenders or other
entities ("Participants") participating interests in any Loan owing to such
Lender, any Note held by such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Credit Facility Documents;
provided, however, that prior to any such sale by any Lender to any Participant,
such Lender shall provide written notice to the Operating Partnership of such
Lender's intention to sell a participating interest to such Participant and the
name of such Participant. In the event of any such sale by a Lender of a
participating interest to a Participant, (i) such Lender's obligations under
this Agreement to the other parties to this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible for the performance thereof,
(iii) such Lender shall remain the holder of any such Note for all purposes
under this Agreement and the other Credit Facility Documents, (iv) the Operating
Partnership and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Credit Facility Documents, and
(v) such Participant shall have no right to enforce the obligations of the
Operating Partnership or any of its Subsidiaries relating to the Loans hereunder
(other than under Section 5.01) or to approve (or refrain from approving) any
amendment, modification or waiver of any provision of this Agreement (other than
any amendment, modification or waiver decreasing any fees payable hereunder or
the amount of principal of or the rate at which interest is payable on the
Loans, extending any scheduled installment of the Loans or any date scheduled
for payment of interest on the Loans or any fees, extending the Commitments or
relating to the release of all or substantially all the Collateral; provided
further, however, in the case of any of the foregoing, that the interests held
by such Participant are directly affected by such amendment, modification or
waiver). The Operating Partnership agrees that if amounts outstanding under this
Agreement and the Notes are due or unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement and any Note to the
same extent as if the amount of its participating interest were owing directly
to it as a Lender under this Agreement or any Note; provided further, however,
that, in purchasing such participating interest, such Participant shall be
deemed to have agreed to share with the Lenders the proceeds thereof as provided
in Section 11.07 as fully as if it were a Lender hereunder. The Operating
Partnership also agrees that each Participant shall be entitled to the benefits
of Sections 5.01, 5.05, 5.06 and 11.03(b)(i) with respect to its participation
in the Commitments and the Loans outstanding from time to time as if it was a
Lender; provided further, however, that (A) such Participant shall have complied
with the requirements of said Sections and of Section 5.07 (as if such
Participant were, for purposes of said Section 5.07, a Lender hereunder), and
(B) no Participant shall be entitled to receive any greater amount pursuant to
any such Section than the transferor Lender would have been entitled to receive
in respect of the amount of the participation transferred by such transferor
Lender to such Participant had no such transfer occurred. Each Participant will
agree to keep information confidential to the same extent as the transferor
Lender was so required.
(c) Any Lender may, in the ordinary course of its business and
in accordance with applicable law, at any time and from time to time assign to
any of its Affiliates or to any Lender or any Affiliate thereof or to an
additional lender or financial institution (an "Assignee") all or any part of
its rights and obligations under this Agreement, the Notes and the other Credit
Facility Documents pursuant to an Assignment and Acceptance, substantially in
the form of Exhibit D, executed by such Assignee, such assigning Lender and, in
the case of an Assignee that is not then a Lender or an Affiliate thereof, by
the Administrative Agent and delivered to the Administrative Agent for its
acceptance and recording in the Register; provided, however, that, except (i) in
the case of an assignment to another Lender, or (ii) with the consent of the
Operating Partnership, each such assignment shall be in an amount equal to not
less than $5,000,000; provided, further, that prior to any such assignment by
any Lender to any Assignee, such Lender shall provide written notice to the
Operating Partnership of such Lender's intention to make an assignment to such
Assignee and the name of such Assignee. Upon such execution, delivery,
acceptance and recording, from and after the effective date determined pursuant
to such Assignment and Acceptance, (A) the Assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder with a Commitment as set forth
therein, and (B) the assigning Lender hereunder shall, to the extent provided in
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under this
Agreement, such assigning Lender shall cease to be party hereto).
Notwithstanding anything to the contrary contained herein, an Assignee shall be
entitled to the benefits of Sections 5.01 and 5.05 only if it shall have
complied with the requirements of said Sections (and also complied with the
requirements of Section 5.07).
(d) The Administrative Agent shall maintain at its address
referred to in Section 11.02 a copy of each Assignment and Acceptance delivered
to it and a register (the "Register") for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of the
Loans owing to, each Lender from time to time. The entries in the Register shall
be conclusive, in the absence of manifest error, and the Operating Partnership,
the Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register as the owner of the Loan recorded therein for all
purposes of this Agreement. The Register shall be available for inspection by
the Operating Partnership or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Assignee (and, if required under Section 11.06(c),
by the Operating Partnership and/or the Administrative Agent) together with
payment by the assigning Lender of the Assignee to the Administrative Agent of a
registration and processing fee of $3,500, the Administrative Agent shall (i)
promptly accept such Assignment and Acceptance, and (ii) on the effective date
determined pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the Lenders and
the Operating Partnership. On or prior to such effective date, the Operating
Partnership, at its own expense, shall execute and deliver to the Administrative
Agent (in exchange for the Note of the assigning Lender) a new Note to the order
of such Assignee in an amount equal to the Commitment assumed by it pursuant to
such Assignment and Acceptance and, if the assigning Lender has retained a
Commitment hereunder, a new Note to the order of the assigning Lender in an
amount equal to the Commitment retained by it hereunder. Such new Notes shall be
dated the Closing Date and shall otherwise be in the form of the Note replaced
thereby.
(f) The Operating Partnership authorizes each Lender to
disclose to any Participant or Assignee (each, a "Transferee") and any
prospective Transferee any and all financial information in such Lender's
possession concerning the Operating Partnership and its Affiliates which has
been delivered to such Lender by or on behalf of the Operating Partnership
pursuant to this Agreement or which has been delivered to such Lender by or on
behalf of the Operating Partnership in connection with such Lender's credit
evaluation of the Operating Partnership and its Affiliates prior to becoming a
party to this Agreement; provided, however, that no Lender shall be authorized
to disclose such information to any Transferee or prospective Transferee unless
such Transferee or prospective Transferee has agreed in writing to maintain the
confidentiality of all confidential information provided to it (subject to
customary exceptions, such as disclosure to officers, directors, professional
advisors, regulators and similar Persons, disclosure pursuant to law or legal
process, disclosure following the public dissemination of such information by
another Person and disclosure of information provided to such Transferee or
prospective Transferee by a third party); and provided further, however, that,
notwithstanding anything to the contrary contained in this Agreement, neither
the Administrative Agent nor any Lender shall be liable for any violation of the
terms of the foregoing proviso by any other Lender or the Administrative Agent,
as the case may be.
(g) Nothing herein shall prohibit any Lender from pledging or
assigning any Note to any Federal Reserve Bank in accordance with applicable
law.
SECTION XI.07. Adjustments. If any Lender (a "Benefited Lender") shall
at any time receive any payment of all or part of its Loans, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, through the exercise of a right of bank's lien, setoff or
counterclaim against the Operating Partnership, pursuant to events or
proceedings of the nature referred to in Article IX(h), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Loans, or interest thereon,
such Benefited Lender shall purchase at par for cash from the other Lenders a
participating interest in such portion of each other Lender's Loan, or shall
provide such other Lenders with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such Benefited Lender to share
the excess payment or benefits of such collateral or proceeds ratably with each
of the Lenders; provided, however, that if all or any portion of such excess
payment or benefits is thereafter recovered from such Benefited Lender, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest.
SECTION XI.08. Survival. The obligations of the Operating Partnership
under Sections 5.01, 5.04, 5.05 and 11.03 shall survive the repayment of the
Loans and the termination of the Commitments. In addition, each representation
and warranty made, or deemed to be made by a notice of any Loan hereunder, in
the other Credit Facility Documents and in any document, certificate or
statement delivered pursuant hereto or in connection herewith shall survive the
making of such representation and warranty, and the Lender shall not be deemed
to have waived, by reason of making any Loan, any Default which may arise by
reason of such representation or warranty proving to have been false or
misleading, notwithstanding that the Lender may have had notice or knowledge or
reason to believe that such representation or warranty was false or misleading
at the time such Loan was made.
SECTION XI.09. Captions. The table of contents and captions and section
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this
Agreement.
SECTION XI.10. Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement with counterpart signature pages or in any
number of separate counterparts, all of which taken together shall constitute
one and the same instrument. A set of the copies of this Agreement signed by all
the parties shall be lodged with the Operating Partnership and the
Administrative Agent.
SECTION XI.11. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION XI.12. Integration. This Agreement and the other Credit
Facility Documents represent the agreement of the Operating Partnership, the
Administrative Agent and the Lenders with respect to the subject matter hereof,
and there are no promises, undertakings, representations or warranties by the
Administrative Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Credit Facility
Documents.
SECTION XI.13. GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.
SECTION XI.14. Submission to Jurisdiction. The Operating Partnership
hereby irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Credit Facility Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the nonexclusive general jurisdiction of the Courts of the
State of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court or forum and agrees not to plead
or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Operating Partnership at its address set forth in Section 11.02 or at such other
address of which the Administrative Agent shall have been notified pursuant
thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this Section 11.14 any special, exemplary, punitive or consequential
damages.
SECTION XI.15. Acknowledgments. The Operating Partnership hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement, the Notes and the other Credit
Facility Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Operating Partnership arising out of
or in connection with this Agreement or any of the other Credit Facility
Documents, and the relationship between Administrative Agent and Lenders, on the
one hand, and the Operating Partnership, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Credit
Facility Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Operating Partnership and the
Lenders.
SECTION XI.16. WAIVER OF JURY TRIAL. THE OPERATING PARTNERSHIP, THE
ADMINISTRATIVE AGENT AND EACH LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, THE NOTES, THE CREDIT FACILITY DOCUMENTS, OR THE TRANSACTIONS
CONTEMPLATED HEREIN, AND FOR ANY COUNTERCLAIM THEREIN.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
Operating Partnership:
CALI REALTY, L.P.
By: Cali Realty Corporation,
its sole general partner
By:
Name:
Title:
Administrative Agent:
PRUDENTIAL SECURITIES CREDIT CORP.
By:
Name:
Title:
Lenders:
PRUDENTIAL SECURITIES CREDIT CORP.
By:
Name:
Title:
<PAGE>
SCHEDULE I
COMMITMENTS
Lender Commitment Amount
- ------ -----------------
Prudential Securities Credit Corp. $80,000,000
-----------------
$80,000,000
<PAGE>
SCHEDULE II
ADDRESSES FOR NOTICES
Lender: Prudential Securities Credit Corp.
<TABLE>
<CAPTION>
Funding Requests: Other Matters:
<S> <C>
=========================================================== ========================================================
Prudential Securities Credit Corp. Prudential Securities Credit Corp.
One New York Plaza One New York Plaza
New York, New York 10292 New York, New York 10292
Attention: Norman Chaleff Attention: Normal Chaleff
Telecopy: (212) 778-4312 Telecopy: (212) 778-4312
Telephone: (212) 778-4114 Telephone: (212) 778-4114
=========================================================== ========================================================
With copies to: With copies to:
Prudential Securities Incorporated Prudential Securities Incorporated
One New York Plaza One New York Plaza
New York, New York 10292 New York, New York 10292
Attention: Richard K. Gupta Attention: Richard K. Gupta
Telecopy: (212) 778-4389 Telecopy: (212) 778-4389
Telephone: (212) 778-5751 Telephone: (212) 778-5751
=========================================================== ========================================================
Prudential Securities Incorporated Prudential Securities Incorporated
One New York Plaza One New York Plaza
New York, New York 10292 New York, New York 10292
Attention: Kenneth M. Leavy Attention: Kenneth M. Leavy
Telecopy: (212) 778-2132 Telecopy: (212) 778-2312
Telephone: (212) 778-6141 Telephone: (212) 778-6141
=========================================================== ========================================================
Prudential Securities Incorporated Prudential Securities Incorporated
One New York Plaza One New York Plaza
New York, New York 10292 New York, New York 10292
Attention: Michael R. Moore Attention: Michael R. Moore
Telecopy: (212) 778-4312 Telecopy: (212) 778-4312
Telephone: (212) 778-2641 Telephone: (212) 778-2641
=========================================================== ========================================================
Morrison & Hecker L.L.P.
2600 Grand Avenue
Kansas City, Missouri 64108
Attention: Gerald D. Weidner
Telecopy: (816) 474-4208
Telephone: (816) 691-2600
=========================================================== ========================================================
</TABLE>
<PAGE>
SCHEDULE III
EXCESS QUALIFIED ASSET VALUE
<TABLE>
<CAPTION>
Allocated Value of Assets
Property Name Value
------------- -----
<S> <C>
50 Tice Boulevard, Woodcliff Lake, NJ $ 21,577,000
325 Columbia Turnpike, Florham Park, NJ 17,370,000
65 Jackson Drive, Cranford, NJ 6,319,000
6 Commerce Drive, Cranford, NJ 2,955,000
11 Commerce Drive, Cranford, NJ 5,869,000
101 Eisenhower Parkway, Roseland, NJ 20,925,000
103 Eisenhower Parkway, Roseland, NJ 17,687,000
100 Walnut Avenue, Clark, NJ 23,112,000
777 Passaic Avenue, Clifton, NJ 2,230,000
20 Commerce Drive Cranford, NJ 17,385,000
95 Christopher Columbus Drive, Jersey City, NJ 105,374,000
Route 130, Delran (Tenby Chase), NJ 12,181,000
-----------
TOTAL VALUE 252,984,000
===========
</TABLE>
MORTGAGE NOTE
$42,087,513 New York, New York
November 4, 1996
FOR VALUE RECEIVED, CALI HARBORSIDE PLAZA I (FEE) ASSOCIATES L.P., a
New Jersey limited partnership, having an address of 11 Commerce Drive,
Cranford, New Jersey 07016 (hereinafter called "Maker"), promises to pay to U S
WEST PENSION TRUST, INVESTMENT MANAGEMENT COMPANY, together with any future
holder of this Note and their successors and assigns (hereinafter called
"Payee"), or order, at BOSTON SAFE DEPOSIT AND TRUST COMPANY, as Trustee of the
U S WEST PENSION TRUST, INVESTMENT MANAGEMENT COMPANY, Attn: Doug Cook, One
Boston Place, One Cabot Road 028-004G, Medford, Massachusetts 02155, or at such
other place as may be designated, from time to time, in writing by Payee, the
principal sum of Forty-Two Million Eighty-Seven Thousand Five Hundred Thirteen
Dollars ($42,087,513) in lawful money of the United States of America, together
with interest on the principal balance outstanding from time to time, as
hereinafter provided.
1. Defined Terms. The following terms as used in this Note shall have
the following meanings:
(a) The term "Guaranty" shall mean those certain Guaranty
Agreements of even date herewith from Cali Realty Corporation, a Maryland
corporation, and Cali Realty, L.P., a Delaware limited partnership
(collectively, the "Guarantors"), for the benefit of Payee guaranteeing the full
and prompt payment of this Note and performance of all of Maker's obligations
with respect to this Note. Maker and Guarantors are jointly and severally liable
hereunder.
(b) The term "Loan Documents" shall mean the Mortgage and the
Other Security Documents.
(c) The term "Mortgage" shall mean that certain Mortgage,
Assignment of Rents, Security Agreement and Financing Statement of even date
herewith given by Maker to Payee as security for this Note encumbering certain
property located in Hudson County, New Jersey, as more particularly described
therein (the "Mortgaged Property"), as the same may hereafter be spread,
released, extended, modified or amended from time to time.
(d) The term "Other Security Documents" shall mean all and any
of the documents other than this Note or the Mortgage, now or hereafter executed
by Maker or others, and by or in favor of Payee, which wholly or partially
secure or guarantee payment of this Note.
(e) The term "Principal Balance" shall mean the outstanding
principal balance of this Note from time to time outstanding.
2. Initial Interest Rate. The initial interest rate on this Note shall
be six and 99/100 percent (6.99%) per annum ("Initial Interest Rate"). The
Initial Interest Rate was calculated by adding 90 basis points to the Current
Index, as hereinafter defined.
3. Calculation of Interest. Interest on this Note shall be computed on
the basis of a 360-day year composed of twelve (12) 30-day months from the date
of the advance until the Maturity Date (as hereinafter defined) and the actual
number of days elapsed in the period for which interest is payable.
4. Interest Rate Adjustments and Payment Adjustments. The interest rate
and payments under this Note shall be adjusted as follows:
(a) Change Dates. The interest rate charged under this Note
shall be reset on November 4, 1999 ("First Change Date") (effective for monthly
payments beginning on November 4, 1999 through November 3, 2002), and on
November 4, 2002 ("Second Change Date") (effective for monthly payments
beginning on November 4, 2002 through the Maturity Date of this Note). The First
Change Date and the Second Change Date are hereinafter referred to collectively
as the "Change Dates."
(b) The Index. On each Change Date, the interest rate will be
based on an Index. The "Index" is the weekly average yield on United States
Treasury Securities adjusted to a constant maturity of three (3) years as made
available by the Federal Reserve Board. (The Index is currently made available
in Statistical Release H-15). The most recent Index figure available as of the
Change Date is called the "Current Index." If the Index is no longer available,
the Payee will choose a new Index which is based on comparable information.
The Payee will give Maker written notice of such choice.
(c) Calculation of Interest Rate. On the First Change Date,
Payee will calculate the new interest rate by adding one hundred ten (110) basis
points to the Current Index. On the Second Change Date, Payee will calculate the
new interest rate by adding one hundred thirty (130) basis points to the Current
Index. The Initial Interest Rate and the interest rate as calculated on each
Change Date shall be the "Current Interest Rate."
(d) Effective Date of Change. The Current Interest Rate will
become effective on each Change Date. Maker will pay the amount of the new
monthly payment beginning on the first payment date after each Change Date.
(e) Notice of Changes. Payee will deliver or mail to Maker a
notice of any change in the interest rate and the amount of the new monthly
payment within ten (10) calendar days after each Change Date.
5. Monthly Payments. Interest only on the outstanding Principal Balance
shall be payable monthly in arrears beginning on the first day of the first
calendar month after the first advance of principal under this Note and
continuing on the first day of each subsequent month until January 1, 2006
(hereinafter referred to as the "Maturity Date"), on which date the entire
unpaid Principal Balance and interest shall be due and payable in full.
Notwithstanding the foregoing to the contrary, so long as Maker is not in
default under this Note or under the Loan Documents, and as long as Maker does
not give Payee notice of its intent to make an interest payment as hereinafter
provided, any interest due and payable under this Note shall be added to the
principal balance of this Note and, thereafter, bear interest at the Current
Interest Rate then in effect; provided, however, that the amount of such accrued
and unpaid interest for any monthly interest payment period during the term of
this Note shall not exceed the amount set forth under the column entitled
"Accreted Principal" on Exhibit A attached hereto and incorporated herein by
this reference for each such interest payment period. In the event that Maker
elects to pay any interest due with respect to any monthly interest payment,
Maker shall provide Payee with written notice not less than three (3) days
before any interest payment date of its election to pay any interest due and
payable on such date.
6. Application of Payments. In the absence of any default or Event of
Default under this Note or any of the other Loan Documents, all payments shall
be applied first to the payment of interest, then to costs and expenses of
collection incurred as a result of any default or Event of Default under this
Note or any of the other Loan Documents, if any, then to late charges, if any,
and then to the reduction of principal, so long as any default or Event of
Default exists, payments may be applied in such manner as Payee may elect in
Payee's sole discretion.
7. Right of Prepayment. The Principal Balance may be prepaid, in whole
or in part, without penalty, upon Maker's giving Payee at least ten (10) days
prior written notice, provided that any partial payments of principal shall be
made in the amount of One Hundred Thousand Dollars ($100,000.00), or any
integral multiples thereof, and any partial prepayments shall be applied to
installments in the inverse order of maturity. Any prepayments of the Principal
Balance in full shall be accompanied by the amount of accrued and unpaid
interest computed at the Current Interest Rate on the amount prepaid, together
with all of the amounts then due and payable under any of the Loan Documents.
8. Defaults. The occurrence of any of the following events shall
constitute an Event of Default hereunder:
(a) if any portion of the Note is not paid on the date the
same shall become due and payable, and such failure continues for five (5) days
after delivery of written notice thereof to Maker;
(b) if Maker shall fail to pay or cause to be paid within
twenty (20) days of notice and demand by Payee, any instalment of any assessment
against the Mortgaged Property for local improvements heretofore or hereafter
laid, which assessment is or may become payable in annual or periodic
installments and is or may become a lien on the Mortgaged Property,
notwithstanding the fact that such instalment may not be due and payable at the
time of such notice and demand;
(c) if any Federal tax lien is filed against Maker or the
Mortgaged Property and the same is not discharged of record within thirty (30)
days; provided, however, Maker shall have the right to contest, at its own
expense, by appropriate legal proceeding promptly initiated and conducted in
good faith and with due diligence, the amount or validity of such tax lien,
provided neither the Mortgaged Property nor any part thereof or interest therein
will in the opinion of Payee be in danger of being sold, forfeited, terminated,
lost or cancelled and, provided further, Maker shall have either set aside
adequate reserves or shall have furnished such security as may be required in
the proceeding, or as may be reasonably required by Payee;
(d) if without the consent of Payee any part of the Mortgaged
Property or any interest therein is in any manner further encumbered, sold,
transferred or conveyed in violation of the terms and provisions of Section 12
of the Mortgage, or if any Improvement or the Equipment (as defined in the
Mortgage) (except for normal replacement of the Equipment or the renovation and
construction of the Improvements) is removed, demolished or materially altered;
(e) if without the consent of Payee any of the Leases (as
defined in the Mortgage) are made, cancelled or modified in violation of the
terms and provisions of Section 8 of the Mortgage or if any portion of the Rents
(as defined in the Mortgage) are paid for a period of more than one (1) month in
advance or if any of the Rents are further assigned;
(f) if any representation or warranty of Maker, or of any
Guarantor guaranteeing payment of the Note or any portion thereof or performance
by Maker of any of the terms of this Note made herein or in any such guaranty,
or in any certificate, report, financial statement or other instrument furnished
in connection with the making of this Note, the Mortgage, or any such guaranty,
shall prove false or misleading in any material respect;
(g) if Maker or any Guarantor shall make an assignment for the
benefit of creditors;
(h) if a court of competent jurisdiction enters a decree or
order for relief with respect to Maker or any Guarantor under Title 11 of the
United States Code as now constituted or hereafter amended or under any other
applicable Federal or state bankruptcy law or other similar law, or if such
court enters a decree or order appointing a receiver, liquidator, assignee,
trustee, sequestrator (or similar official) of Maker or any Guarantor, or of any
substantial part of their respective properties, or if such court decrees or
orders the winding up or liquidation of the affairs of Maker or any Guarantor
and such order or decree is not vacated within sixty (60) days of entry;
(i) if Maker or any Guarantor files a petition or answer or
consent seeking relief under Title 11 of the United States Code as now
constituted or hereafter amended, or under any other applicable Federal or state
bankruptcy law or other similar law, or if Maker or any Guarantor consents to
the institution of proceedings thereunder or to the filing of any such petition
or to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar official) of Maker
or any Guarantor, or of any substantial part of their respective properties, or
if Maker or any Guarantor fails generally to pay their respective debts as such
debts become due, or if Maker or any Guarantor takes any action in furtherance
of any action described in this subparagraph;
(j) if Maker or any other person shall be in default beyond
any applicable grace or cure periods under the Note or under any other mortgage,
instrument or document evidencing, securing or guaranteeing payment of the Note,
in whole or in part, or otherwise executed and delivered in connection with this
Note, the Mortgage or the loan evidenced and secured thereby;
(k) if Maker shall be in default beyond applicable grace or
cure periods under any mortgage covering any part of the Mortgaged Property
whether superior or inferior in lien to the Mortgage;
(l) if the Mortgaged Property shall become subject (i) to any
tax lien, other than a lien for local real estate taxes and assessments not due
and payable, or (ii) to any mechanic's, materialman's or other lien and such
lien shall remain undischarged or unbonded for thirty (30) days after actual or
constructive notice of such lien is received by Maker;
(m) if any claim of priority to the lien of the Mortgage,
whether by title, lien or otherwise, is consented to by Maker or upheld by a
court of competent jurisdiction;
(n) if Maker shall continue to be in default under any of the
other terms, covenants or conditions of this Note or any of the other Loan
Documents for five (5) days after notice from Payee in the case of any default
which can be cured by the payment of a sum of money or for thirty (30) days
after notice from Payee in the case of any other default, provided that if such
default cannot reasonably be cured within such thirty (30) day period and Maker
shall have commenced to cure such default within such thirty (30) day period and
thereafter diligently and expeditiously proceeds to cure the same, such thirty
(30) day period shall be extended for so long as it shall require Maker in the
exercise of due diligence to cure such default, it being agreed that no such
extension shall be for a period in excess of one hundred eighty (180) days
(unless a condition exists which is beyond Maker's control, in which case such
period shall be extended for a period beyond such 180-day period as long as the
Mortgaged Property and the value thereof is in no way jeopardized or threatened
by such further extension); or
(o) If Maker shall fail to comply with the Environmental
Requirements set forth in Section 44 of the Mortgage.
9. Security. This Note is secured by the Mortgage and the Other
Security Documents. Any Event of Default under this Note shall constitute a
Default or an Event of Default under the Loan Documents, and any Event of
Default under any of the Loan Documents shall constitute an Event of Default
under this Note. Upon the occurrence of any such Event of Default, the entire
unpaid Principal Balance, accrued interest and other sums owing under this Note
shall, at the option of Payee and subject to any grace period provided for in
the Mortgage, become at once due and payable in full, without notice or demand,
and Payee shall have the option to foreclose or to require the foreclosure of
any or all liens surviving the payment thereof and/or to exercise any other
rights and remedies available to Payee hereunder or under any of the other Loan
Documents, at law or in equity. The Principal Balance, interest and other sums
due upon the maturity of this Note, by acceleration or otherwise, shall bear
interest until paid in full at a rate per annum equal to the greater on a daily
basis of (i) 20%; or (ii) 5% plus the Current Interest Rate, as defined in this
Note; provided, however, that such interest rate shall in no event exceed the
maximum interest rate which Maker may by law pay, for the period after notice
from Payee that such costs or expenses were incurred to the date of payment to
Payee ("Default Rate"). All such costs and expenses incurred by Payee pursuant
to the terms of this Note, with interest, shall be secured by this Note.
10. Acceleration. Immediately upon or any time after the occurrence of
an Event of Default hereunder or under any of the other Loan Documents, Payee,
in its sole discretion may, without notice and demand, declare the Note to be
immediately due and payable in full.
11. Waiver. Maker and all parties now or hereafter liable for payment
of this Note, primarily or secondarily, directly or indirectly, and whether as
endorser, guarantor, surety or otherwise, hereby severally (i) waive presentment
for payment, demand, protest, notice of protest, notice of dishonor and all
other notices and demands whatsoever, other than any notice which may be
required pursuant to this Note and the Mortgage, (ii) consent to impairment or
release of collateral, extensions of time for payment, and acceptance of late or
partial payments before, at or after maturity, (iii) agree that Payee's
acceptance of one or more partial payments after acceleration of the maturity of
this Note will not constitute a waiver of such acceleration, regardless of any
contrary notice or statement of condition which may accompany any such partial
payment, (iv) waive any right to require Payee to proceed against any security
for this Note before proceeding hereunder, (v) agree to pay on demand a late
charge of five (5%) of any payment which is not paid within ten (10) days after
the date due, and (vi) agree to pay all costs and expenses, including reasonable
attorney fees, which may be incurred by Payee in collecting this Note or in
enforcing and realizing upon any security for this Note.
12. Remedies Cumulative; Waiver. The remedies of Payee provided herein
or in any of the other Loan Documents shall be cumulative and concurrent, may be
pursued singularly, successively or together, at the sole discretion of Payee,
and may be exercised as often as occasion therefor shall arise. No act of
omission or commission of Payee, including specifically any failure to exercise
any right, remedy or recourse, shall be deemed to be a waiver or release of the
same, such waiver or release to be effected only through a written document
executed by Payee and then only to the extent specifically recited therein. A
waiver or release with reference to any one event shall not be construed as
continuing, as a bar to, or as a waiver or release of any subsequent right,
remedy or recourse as to a subsequent event. Acceptance by Payee of any payment
after the due date thereof shall not be deemed to be a waiver of any default
with respect to such payment or an extension of the due date of any such payment
or the due date of any other payment. Furthermore, acceptance by Payee of any
payment in any amount less than the amount then due hereunder or under the other
Loan Documents shall be an acceptance on account only and shall not in any way
affect the existence of a default hereunder or under the other Loan Documents.
13. Usury. This Note is subject to the express condition that at no
time shall Maker be obligated or required to pay interest on the Principal
Balance at a rate which could subject Payee to either civil or criminal
liability as a result of being in excess of the maximum rate which Maker is
permitted by law to contract or agree to pay. If by the terms of this Note Maker
is at any time required or obligated to pay interest on the Principal Balance at
a rate in excess of such maximum rate, the rate of interest under this Note
shall be deemed to be immediately reduced to such maximum rate and interest
payable hereunder shall be computed at such maximum rate and the portion of all
prior interest payments in excess of such maximum rate shall be applied and
shall be deemed to have been payments in reduction of the Principal Balance.
If Maker consists of more that one person or party, the obligations and
liabilities of each such person or party hereunder shall be joint and several.
14. Applicable Law. The terms of this Note shall be governed and
construed under the laws of the State of New Jersey.
15. Amendment. This Note may not be changed or terminated orally, but
only by an agreement in writing signed by the party against whom enforcement of
such change or termination is sought.
16. Validity of Obligations. Maker (and the undersigned representative
of Maker, if any) represents that Maker has full power, authority and legal
right to execute and deliver this Note and that the debt hereunder constitutes a
valid and binding obligation of Maker.
17. Headings and General Application. The section entitlements hereof
are for convenience of reference only and shall in no way affect, modify, or
define, or be used in construing the text of such section. Whenever used, the
singular number shall include the plural, the plural the singular, and the words
"Payee," "Guarantors," and "Maker" shall include their respective successors and
assigns.
18. Counting of Days. The term "days" when used herein shall mean
calendar days. If any time period ends on a Saturday, Sunday or holiday
officially recognized within which the Mortgaged Property is located, the period
shall be deemed to end on the next succeeding business day.
19. Jurisdiction. Maker hereby consents to the personal jurisdiction of
the state and federal courts of the States of New Jersey and New York.
20. Right of Offset. In the event that Plaza One Exchange Place Limited
Partnership, Harborside Exchange Place Limited Partnership, Plaza II Urban
Renewal Associates L.P., and Plaza III Urban Renewal Associates L.P.
(collectively, the "Seller") as Seller of the Mortgaged Property, fails to pay
the leasing and brokerage commissions as required by Section 4.2.8(iii) of the
Agreement of Purchase and Sale dated September 11, 1996 between Seller and
Maker, Payee hereby agrees that Maker shall be entitled to offset the amount of
the payment stipulated in Maker's notice on a dollar-to-dollar basis against the
next due payment of interest or principal due under this Note.
<PAGE>
IN WITNESS WHEREOF, Maker has duly executed this Note as of the day and
year first above written.
CALI HARBORSIDE PLAZA I (FEE) ASSOCIATES L.P.,
a New Jersey limited partnership
ATTEST: By: CALI SUB X, INC., a Delaware corporation,
general partner
________________________________ By:______________________________________
Name: __________________________ Its:_____________________________________
Title: [Asst.] Secretary
[S E A L]
<PAGE>
EXHIBIT A
(Accreted Principal)
Prepared by
--------------------------
ANDREW S. LEVINE, ESQ.
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGMENT AND ASSUMPTION AGREEMENT (this "Agreement") is entered
into October __, 1996 by and among PLAZA ONE EXCHANGE PLACE LIMITED PARTNERSHIP
(formerly known as BT Exchange Place Limited Partnership), HARBORSIDE EXCHANGE
PLACE LIMITED PARTNERSHIP, HARBORSIDE URBAN RENEWAL ASSOCIATES L.P., PLAZA II
AND III URBAN RENEWAL ASSOCIATES L.P., PLAZA IV URBAN RENEWAL ASSOCIATES L.P.,
PLAZA V URBAN RENEWAL ASSOCIATES L.P., and PLAZA VI URBAN RENEWAL ASSOCIATES
L.P., all New Jersey limited partnerships having an address c/o Lang Wootton
Realty Advisors, 335 Madison Avenue, New York, New York 10017 (collectively
"Assignors"), CALI HARBORSIDE (FEE) ASSOCIATES L.P., CAL-HARBOR II & III URBAN
RENEWAL ASSOCIATES L.P., CAL-HARBOR IV URBAN RENEWAL ASSOCIATES L.P., CAL-HARBOR
V URBAN RENEWAL ASSOCIATES L.P., CAL-HARBOR VI URBAN RENEWAL ASSOCIATES L.P. and
CAL-HARBOR VII URBAN RENEWAL ASSOCIATES, L.P., all New Jersey limited
partnerships having an address c/o Cali Realty Corporation, 11 Commerce Drive,
Cranford, New Jersey 07016 (collectively "Assignees"), and THE NORTHWESTERN
MUTUAL LIFE INSURANCE COMPANY, a Wisconsin corporation having an address at 720
E. Wisconsin Avenue, Milwaukee, Wisconsin 53202 ("Northwestern"), and PRINCIPAL
MUTUAL LIFE INSURANCE COMPANY, an Iowa corporation having an address at 711 High
Street, Des Moines, Iowa 50392-0301 ("Principal"; Northwestern and Principal
being collectively referred to herein as the "Lenders").
WITNESSETH:
WHEREAS, Lenders are the holders of:
(a) two (2) promissory notes dated December 5th, 1995 executed
by Assignors in the aggregate sum of Twenty Million ($20,000,000) Dollars (the
"Plaza I Notes"); and
(b) two (2) promissory notes dated December 5th, 1995 executed
by Assignors in the aggregate sum of One Hundred Ten Million ($110,000,000)
Dollars (the "Plaza II/III Notes"); and
WHEREAS, the Plaza II/III Notes are secured by:
(a) that certain Mortgage and Security Agreement dated
December 4th, 1995 made by Assignors in favor of Lenders and recorded December
7, 1995 in the Office of the Hudson County Clerk in Mortgage Book 5805, Page 240
(the "Mortgage"); and
(b) that certain Absolute Assignment of Leases and Rents dated
December 4, 1995 made by Assignors in favor of Lenders and recorded on December
7, 1995 in the Office of the Hudson County Clerk in Mortgage Book 5805, page 322
(the "Assignment"); and
(c) those certain UCC-1 Financing Statements listed on Exhibit
A annexed hereto (the "UCC-1s"; the Plaza II/III Notes, the Mortgage, the
Assignment and the UCC-1s being collectively referred to herein as the "Loan
Documents").
WHEREAS, the Plaza I Notes are to be satisfied, and Lenders are
releasing the property described on Exhibit B annexed hereto (the "Plaza I
Property") from the lien of the Mortgage and the Assignment; and
WHEREAS, it is the intention of the parties hereto that Assignors shall
assign, and Assignees shall assume, all rights and obligations under the Loan
Documents.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:
1. Assignors hereby grant, transfer and assign unto Assignees all right,
title and interest of Assignors in and to the Loan Documents as of the
date hereof.
2. Assignees hereby assume and agree to perform and be bound by the terms,
covenants, conditions and obligations accruing under the Loan Documents
as of the date hereof, subject to the terms of this Agreement.
3. Lender hereby acknowledges and consents to the assignment made by
Assignors to Assignees and the assumption made by Assignees pursuant to
this Agreement.
4. The Mortgage is hereby modified as follows:
(a) the term "US WEST Pension Trust" shall be deleted in its
entirety and replaced with "Cali Realty Corporation or Cali
Realty, L.P."
(b) In the Section of the Mortgage entitled "Financial
Statements", the paragraph beginning with the words "The
Audited Statements" on page 33 is hereby deleted and replaced
with the following:
"The Audited Statements shall (i) be prepared based
upon generally accepted accounting principles by a certified public
accountant satisfactory to Mortgagee, and the expense thereof shall be
borne by Mortgagors, and (ii) include or be accompanied by a written
statement by the accountants preparing or opining in regard to such
Audited Statements, in form and substance satisfactory to Mortgagee, in
the manner contemplated by New Jersey P.L. 1995, c.49, that such
accountants know that Mortgagee shall receive and rely upon such
Audited Statements."
5. Assignees acknowledge that the transfer of the Plaza II/III Property to
the Assignees is the one-time transfer permitted by the Due on Sale
provision of the Mortgage and that no subsequent transfers of the Plaza
II/III Property or Changes in the Proportionate Ownership of Purchaser
is allowed by the Mortgage.
6. This Agreement shall inure to the benefit of, and be binding upon, each
of the parties hereto and their respective successors and permitted
assigns.
7. This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof. The invalidity or
unenforceability of any term or provision hereof shall not render
invalid or unenforceable any other term or provision hereof, all of
which shall remain in full force and effect. This Agreement shall be
governed by and construed in accordance with the laws of the State of
New Jersey. This Agreement may not be amended except by a written
agreement signed by the party to be bound. All terms used herein and
not otherwise defined shall have the meaning ascribed in the Mortgage.
8. Pursuant to the "Due on Sale" Section of the Mortgage, the Lenders
hereby agree and acknowledge that the Assignors, as Mortgagors and
Borrowers under the Loan Documents, are released from liability under
the Loan Documents, except for the Environmental Indemnity Agreement
and the "Recourse Obligations", as defined in the Plaza I Notes and the
Plaza II/III Notes.
9. This Agreement may be executed in one or more counterparts, each which
when so executed and delivered shall be deemed an original, but all of
which taken together shall constitute but one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
ASSIGNORS:
PLAZA ONE EXCHANGE PLACE
LIMITED PARTNERSHIP
By: One Harborside Corp.,
general partner
By:________________________
Name:
Title:
HARBORSIDE EXCHANGE PLACE LIMITED PARTNERSHIP
By: Two Harborside Corp.,
general partner
By:________________________
Name:
Title:
HARBORSIDE URBAN RENEWAL ASSOCIATES L.P.
By: One Exchange Place Corporation,
general partner
By:________________________
Name:
Title:
PLAZA II AND III URBAN RENEWAL ASSOCIATES L.P.
By: One Exchange Place Corporation,
general partner
By:________________________
Name:
Title:
PLAZA IV URBAN RENEWAL ASSOCIATES L.P.
By: One Exchange Place Corporation,
general partner
By:________________________
Name:
Title:
PLAZA V URBAN RENEWAL ASSOCIATES L.P.
By: One Exchange Place Corporation,
general partner
By:________________________
Name:
Title:
PLAZA VI URBAN RENEWAL ASSOCIATES L.P.
By: One Exchange Place Corporation,
general partner
By:________________________
Name:
Title:
ASSIGNEES:
CALI HARBORSIDE (FEE) ASSOCIATES, L.P.
By: Cali Sub X, Inc.,
general partner
By:_______________________
Name:
Title:
CAL-HARBOR II & III URBAN RENEWAL ASSOCIATES L.P.
By: Cali Sub X, Inc.,
general partner
By:_______________________
Name:
Title:
CAL-HARBOR IV URBAN RENEWAL ASSOCIATES L.P.
By: Cali Sub X, Inc.,
general partner
By:_______________________
Name:
Title:
CAL-HARBOR V URBAN RENEWAL ASSOCIATES L.P.
By: Cali Sub X, Inc.,
general partner
By:_______________________
Name:
Title:
CAL-HARBOR VI URBAN RENEWAL ASSOCIATES L.P.
By: Cali Sub XI, Inc.,
general partner
By:_______________________
Name:
Title:
CAL-HARBOR SO. PIER URBAN RENEWAL ASSOCIATES L.P.
By: Cali Sub XI, Inc.,
general partner
By:_______________________
Name:
Title:
CAL-HARBOR NO. PIER URBAN RENEWAL ASSOCIATES L.P.
By: Cali Sub XI, Inc.,
general partner
By:_______________________
Name:
Title:
CAL-HARBOR VII URBAN RENEWAL ASSOCIATES, L.P.
By: Cali Sub XI, Inc.,
general partner
By:_______________________
Name:
Title:
ASSIGNOR:
PLAZA ONE EXCHANGE PLACE
LIMITED PARTNERSHIP
By: One Harborside Corp.,
general partner
By:________________________
Name:
Title:
HARBORSIDE EXCHANGE PLACE LIMITED PARTNERSHIP
By: Two Harborside Corp.,
general partner
By:________________________
Name:
Title:
HARBORSIDE URBAN RENEWAL ASSOCIATES L.P.
By: One Exchange Place Corporation,
general partner
By:________________________
Name:
Title:
PLAZA II AND III URBAN RENEWAL ASSOCIATES L.P.
By: One Exchange Place Corporation,
general partner
By:________________________
Name:
Title:
PLAZA IV URBAN RENEWAL ASSOCIATES L.P.
By: One Exchange Place Corporation,
general partner
By:________________________
Name:
Title:
PLAZA V URBAN RENEWAL ASSOCIATES L.P.
By: One Exchange Place Corporation,
general partner
By:________________________
Name:
Title:
PLAZA VI URBAN RENEWAL ASSOCIATES L.P.
By: One Exchange Place Corporation,
general partner
By:________________________
Name:
Title:
LENDER:
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
By:________________________
Name:
Title:
PRINICIPAL MUTUAL LIFE INSURANCE COMPANY
By:________________________
Name:
Title:
State of )
)ss.:
County of )
On the __ day of October in the year 1996 before me personally came
_____________________ to me known, who, being by me duly sworn, did depose and
say that he resides in ________________________; that he is the
____________________ of THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, the
corporation described in and which executed the above instrument; that he knows
the seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the board of directors of
said corporation, and that he signed his name thereto by like authority.
--------------------------
Notary Public
My Commission Expires: (Notarial Seal)
State of )
)ss.:
County of )
On the __ day of October in the year 1996 before me personally came
_____________________ to me known, who, being by me duly sworn, did depose and
say that he resides in ________________________; that he is the
____________________ of PRINCIPAL MUTUAL LIFE INSURANCE, the corporation
described in and which executed the above instrument; that he knows the seal of
said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the board of directors of said
corporation, and that he signed his name thereto by like authority.
--------------------------
Notary Public
My Commission Expires: (Notarial Seal)
State of New York )
)ss.:
County of New York )
On the __ day of October in the year 1996 before me personally came
_____________________ to me known, who, being by me duly sworn, did depose and
say that he resides in ________________________; that he is the
____________________ of the _________________________, the corporation described
in and which executed the above instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the board of directors of said
corporation, and that he signed his name thereto by like authority.
--------------------------
Notary Public
My Commission Expires: (Notarial Seal)
State of )
)ss.:
County of )
On the __ day of October in the year 1996 before me personally came
_____________________ to me known, who, being by me duly sworn, did depose and
say that he resides in ________________________; that he is the
____________________ of the _________________________, the corporation described
in and which executed the above instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the board of directors of said
corporation, and that he signed his name thereto by like authority.
--------------------------
Notary Public
My Commission Expires: (Notarial Seal)
MANAGEMENT AGREEMENT
between
Cali Harborside (Fee) Associates L.P., Cali Harborside Plaza I (Fee) Associates
L.P., Plaza II and III Urban Renewal Associates L.P., Cal-Harbor II & III Urban
Renewal Associates L.P., Plaza IV Urban Renewal Associates L.P., Cal-Harbor IV
Urban Renewal Associates L.P., Plaza V Urban Renewal Associates L.P., Cal-Harbor
V Urban Renewal Associates L.P., Plaza VI Urban Renewal Associates L.P.,
Cal-Harbor VI Urban Renewal Associates L.P., Harborside Exchange Place Limited
Partnership, Cali-Harbor VII Urban Renewal Associates L.P., North Pier Urban
Renewal Associates L.P., Cal-Harbor No. Pier Urban Renewal Associates L.P.,
South Pier Urban Renewal Associates L.P., and Cal-Harbor So. Pier Urban Renewal
Associates L.P.
and
Institutional Realty Management, LLC, Manager
PROPERTY: Harborside Financial Center
Jersey City, New Jersey
DATE: November 4, 1996
<PAGE>
TABLE OF CONTENTS
1. Appointment of Manager
2. Management Services
2.1 Orientation
2.2 Management of Property
2.3 Specific Duties of Manager
2.4 Services Not Included
3. Contractor Insurance/Indemnification
3.1 Minimize Interference
4. Service Contracts
5. Compensation for Services
5.1 Management Fee
6. Accounting, Records, Reports
6.1 Financial Records
6.2 Financial Reports
6.3 Audits
6.4 Annual Budgets
6.5 Tenant Statements
6.6 Computerized Accounting
7. Expenses
7.1 Expenses of Owner
7.2 Expenditure Authorization and Reimbursement
7.2.1 Annual Budget
7.2.2 Emergency Repairs
7.2.3 Fund
8. Indemnification
8.1 Owner's Indemnity
9. Term and Termination
9.1 Term
9.2 Termination for Cause
9.3 Termination Without Cause
9.4 Manager's Obligations after Termination
10. (Deliberately Omitted)
11. Assignment
12. No Waiver
13. Licenses
14. Notices
15. Confidentiality and Nondisclosure
16. Benefit; Liability
17. Captions
18. Construction
19. Applicable Law
20. Entire Agreement
21. Attorneys' Fees
22. Owner's Representative
23. Nondiscrimination
24. Owner's Consent
25. Venue
26. Treatment of Assets
27. Amendment
28. Disputes; Arbitration
29. Time
30. Management Office
Exhibits
A - Legal Description of Land
B - Funding Request
C - Reporting Requirements
D - [Intentionally Deleted]
E. Dedicated On-Site Employees
<PAGE>
BASIC INFORMATION SHEET
The following Basic Information is hereby incorporated into the
Management Agreement as though set out in full therein:
I. Effective Date: November 4 , 1996
II. Owner: Cali Harborside (Fee) Associates L.P., a New Jersey
limited partnership, Cali Harborside Plaza I (Fee)
Associates L.P., a New Jersey limited partnership,
Plaza II and III Urban Renewal Associates L.P., a New
Jersey limited partnership, Cal-Harbor II & III Urban
Renewal Associates L.P., a Delaware limited
partnership, Plaza IV Urban Renewal Associates L.P.,
a New Jersey limited partnership, Cal-Harbor IV Urban
Renewal Associates L.P., a New Jersey limited
partnership, Plaza V Urban Renewal Associates L.P., a
New Jersey limited partnership, Cal-Harbor V Urban
Renewal Associates L.P., a New Jersey limited
partnership, Plaza VI Urban Renewal Associates L.P.,
a New Jersey limited partnership, Cal-Harbor VI Urban
Renewal Associates L.P., a New Jersey limited
partnership, Harborside Exchange Place Limited
Partnership, a New Jersey limited partnership,
Cali-Harbor VII Urban Renewal Associates L.P., a New
Jersey limited partnership, North Pier Urban Renewal
Associates L.P., a New Jersey limited partnership,
Cal-Harbor No. Pier Urban Renewal Associates L.P., a
New Jersey limited partnership, South Pier Urban
Renewal Associates L.P., a New Jersey limited
partnership, and Cal-Harbor So. Pier Urban Renewal
Associates L.P., a New Jersey limited partnership,
III. Owner's Address : c/o Cali Realty Corporation
11 Commerce Drive
Cranford, New Jersey 07016
Attn: Roger W. Thomas, Esq.
IV. Manager: Institutional Realty Management, LLC
V. Manager's Address: 13760 Noel Road
Suite 905
Dallas, TX 75240
VI. Initial Term: 18 months commencing on the Effective Date.
VII. Property Description: The parcel of land and improvements thereon
commonly known as Harborside Financial Center, Jersey City, New Jersey,
such parcel of land being more particularly described in Exhibit A
attached to the Management Agreement.
<PAGE>
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT ("Agreement") is made as of the Effective
Date by and between Owner and Manager.
RECITALS:
OWNER AND MANAGER ENTER THIS AGREEMENT on the basis of the following
facts, understandings and intentions:
A. Owner has recently acquired the Property.
B. Manager managed the Property prior to its acquisition by Owner.
C. To ease the ownership transition, Owner desires to retain the
services of Manager, as an independent contractor, as manager of the Property
with responsibilities for managing and supervising the operation, maintenance,
and servicing of the Property, and Manager wishes to provide such services, all
as provided herein.
NOW THEREFORE, in consideration of the foregoing and of the full and
faithful performance by Manager and Owner of all the terms, conditions, and
obligations imposed upon Manager and Owner hereunder, respectively, Manager and
Owner agree as follows:
1. Appointment of Manager. Owner hereby appoints Manager as manager of
the Property with the responsibilities and upon the terms and conditions set
forth herein, and Manager hereby accepts such appointment.
2. Management Services
2.1 Orientation. Manager has (i) all books and records
respecting the operation of the Property, (ii) all personal property on or
within the Property belonging to (or leased by) Owner, if any, (iii) all current
and future tenant leases and related agreements, (iv) all warranties, guaranties
and service contracts and agreements relating to the Property, (v) any and all
development agreements, permits, approvals, and certificates of occupancy
relating to the Property, and (vi) all other contracts, agreements and other
documents relating to the operation, maintenance and servicing of the Property
that Manager may require from time to time in order to discharge its duties
under this Agreement (such items (i) and (iii)-(vi), inclusive, being sometimes
hereinafter together referred to as the "Basic Documents").
2.2 Management of Property. Manager shall devote its
commercially reasonable efforts consistent with first-class professional
management as manager of the Property, and shall perform its duties hereunder in
accordance with the Operating Budget and in a reasonable, diligent, and careful
manner so as to manage and supervise the operation, maintenance, and servicing
of the Property in a manner that is comparable to the manner in which Manager
managed the Property for the previous owner. Manager agrees to cooperate with
Owner in the management and operation of the Property.
2.3 Specific Duties of Manager. Without limiting the duties
and obligations of Manager under any other provisions of this Agreement, Manager
shall have the following duties and perform the following services:
2.3.1 Repairs and Maintenance. In accordance with and subject
to the Operating Budget, Manager shall cause to be made all repairs and shall
cause to be performed all maintenance on the buildings, appurtenances and
grounds of the Property as are required to maintain the Property in such
condition and repair (and in compliance with applicable codes) that is
comparable to the condition in which the Property was maintained by its previous
owner, and such other repairs as may be required to be made under the leases and
other Basic Documents. Subject to the terms of Section 4 below, Manager may
enter into such service, cleaning and maintenance (including preventative
maintenance) contracts necessary or appropriate for the operation and
maintenance of the Property and the performance of Manager's duties hereunder,
including without limitation contracts to service the equipment and systems
located in or serving the Property (including the elevators, escalators and
telephones therein, if any), contracts for landscape maintenance, and contracts
to supply utilities, rubbish removal, fuel, security services and vermin
extermination. To the extent that Owner is obligated to perform such obligations
under any tenant lease or the Basic Documents, Manager shall use its
commercially reasonable efforts to keep or cause to be kept all sidewalks,
parking areas and other common areas of the Property free from cracks, snow,
ice, excess water, debris and other accumulations, and shall cause any rubbish
or other debris to be removed therefrom.
2.3.2 Rents, Billings and Collections. Manager shall be
responsible for the monthly billing of rents and all other charges due from
tenants to Owner with respect to the Property, including, without limitation the
calculation of all components of rent due, and the preparation and distribution
of monthly billing statements. Manager shall instruct the tenants of the
Property to pay all rent and other such payments in accordance with instructions
to be provided by Owner. Manager shall use its commercially reasonable efforts
to collect all such rents and other charges when due, other than security
deposits. Manager shall not collect more than one month's rent in advance unless
approved in writing by Owner. Manager shall notify Owner of any delinquent rents
or defaults under the leases, and shall advise Owner of Manager's best judgment
of the appropriate course of action in collecting any such delinquent rent
and/or remedying any such tenant defaults.
2.3.3 Obligations Under Basic Documents; Disbursement Account.
Manager shall supervise and use its commercially reasonable efforts to cause
Owner's performance and compliance, duly and punctually, with all of the
obligations, terms and conditions required to be performed or complied with by
Owner under the Basic Documents relating to the operation, maintenance and
servicing of the Property, including, without limitation (but subject to the
remainder of this Section), the timely payment of all sums required to be paid
thereunder, all to the end that Owner's interest in the Property and its
interests (including without limitation its interests as landlord under the
leases) shall be preserved and no default chargeable to Owner shall occur under
the Basic Documents. Within five (5) days after the execution of this Agreement,
Owner shall provide funds to Manager to be deposited in a separate checking
account approved or opened by Owner (the "Disbursement Account"). From the
Disbursement Account, Manager shall pay all ordinary or necessary expenses of
the Property. Within ten (10) days following presentation to Owner of a check
register report (each, a "Funding Request"), Owner shall cause the Disbursement
Account to be funded to the amount necessary for Manager to pay all ordinary or
necessary expenses for the upcoming month, and all other expenses incurred by
Manager on Owner's behalf that are authorized by the terms of this Agreement,
all as described in each Funding Request but subject to the Operating Budget,
and any other expenses Owner shall approve or direct Manager to pay. Owner
agrees to maintain a minimum of $25,000 in the Disbursement Account at all
times. The Management Fee shall be payable as set forth in Section 5.1.
All disbursement bank accounts shall be established by Owner
for the Property and shall be in the name of Owner and have the Owner and
Manager or Owner's and Manager's designated representatives as signatories. Two
signatories shall be required to make withdrawals from the Disbursement Account,
provided however, that the signature of Owner or Owner's designated
representative alone, shall be sufficient to make withdrawals from the
Disbursement Account. Owner shall notify Manager of any withdrawals made by
Owner from the Disbursement Account. Manager shall not establish any banking
accounts for the Property without prior approval by Owner.
Notwithstanding anything to the contrary contained in this
Agreement, Manager shall have no obligation to perform any task otherwise
required of Manager under this Agreement if the cost thereof is to be funded by
Owner and Owner fails to provide such funding; and under no circumstances shall
Manager be required to advance funds on Owner's behalf in order to pay any
expense of the Property.
2.3.4 Equipment and Supplies. Manager shall make all
arrangements for the furnishing to the Property of utility, maintenance and
other services and for the acquisition of equipment and supplies necessary for
the management, operation, maintenance and servicing of the Property as required
under the Basic Documents and this Agreement. Manager shall use best efforts to
obtain for Owner, all rebates, discounts or other incentives pertaining to the
furnishing to the Property of such utility, maintenance and other services and
for the acquisition of such equipment and supplies.
2.3.5 Tax Assessments. If requested by Owner, Manager shall
cause all real and personal property taxes to be paid when due and engage an
independent tax consultant for purposes of reviewing, and if appropriate,
contesting, either the validity or the amount thereof. In the event Owner
retains, at Owner's sole expense (whether directly or through Manager as
provided above) an independent tax consultant or tax counsel, Manager shall
diligently cooperate with such tax consultant or tax counsel as requested by
such tax consultant or tax counsel.
2.3.6 Owner's Insurance. If requested by Owner, at Owner's
expense, Manager shall cause to be placed and kept in force all forms of
insurance required by law or otherwise requested by Owner from time to time,
including, without limitation, (i) comprehensive or commercial general and
excess liability insurance in an amount requested by Owner, and (ii) property
insurance as may be desirable or requested by Owner or required by any mortgage,
deed of trust or other security agreement covering all or any part of the
Property. Manager is to be named as an additional insured on the general and
excess liability policies in its capacity as managing agent. Should Owner elect
to place such insurance coverage directly, Manager shall be named as an
additional insured on the general and excess liability policies in its capacity
as managing agent and Owner will provide Manager with a certificate of insurance
evidencing such coverage. If requested to do so by Owner, Manager shall duly and
punctually pay on behalf of Owner, from a disbursement account, all premiums
with respect thereto.
2.3.7 Manager's Insurance. Manager will obtain, at Manager's
expense, the following insurance:
(a) Commercial or comprehensive general liability on
a per occurrence basis for bodily injury liability and property damage liability
with limits of One Million Dollars ($1,000,000) combined single limit each
occurrence and Two Million Dollars ($2,000,000) from the aggregate of all
occurrences within each policy year.
(b) Excess liability (umbrella) insurance in the
amount of $4,000,000.
(c) Comprehensive form automobile liability covering
owned, hired and non-owned vehicles with limits of One Million Dollars
($1,000,000) combined single limit per occurrence.
(d) Employer's liability insurance in an amount not
less than Five Hundred Thousand Dollars ($500,000).
(e) Blanket crime coverage protecting Manager against
fraudulent or dishonest acts of its employees, whether acting alone or with
others, with limits of liability of not less than Five Hundred Thousand
($500,000) in any one occurrence.
(f) Such other insurance as Owner shall reasonably
request provided such insurance is customarily maintained by managers of
property similar to the Property.
Owner shall be named as an additional insured with
respect to the policies referred to in (a) and (b) above, but only with respect
to claims arising out of actions beyond the scope of Manager's duties under this
Agreement.
Manager will provide Owner with a certificate of
insurance evidencing all required coverages in a timely manner.
2.3.8 Compliance with Insurance Policies; Compliance by
Tenants with Tenant Leases. To the extent of its actual knowledge, Manager shall
use its commercially reasonable efforts to prevent the use of the Property for
any purpose that might void any policy of insurance held by Owner, or any tenant
at the Property, that might render any loss insured thereunder uncollectible or
that would be in violation of any governmental restriction or the provisions of
any tenant lease. Manager shall use its commercially reasonable efforts to
secure full compliance by the tenants with the terms and conditions of their
respective tenant leases, including, but not limited to, periodic maintenance of
all building systems, including individual tenant's heating, ventilation and
air-conditioning systems.
2.3.9 Personnel. Manager shall employ such personnel as
employees of Manager or Manager's affiliates or subsidiary, and not of Owner, as
may be necessary in order for Manager to perform its obligations hereunder. All
dedicated on-site employees shall be expensed to the Property. A schedule of all
dedicated on-site employees as of the date of this Agreement is appended as
Exhibit E. Upon request of Owner, Manager shall reduce the number of dedicated
on-site employees; provided however, that in such event, the standard to which
Manager has agreed to manage and operate the Property shall be lowered
appropriately to reflect such reduction of personnel. Nothing contained herein
shall reduce the Management Fee payable pursuant to this Agreement.
Manager agrees that it will not replace John Marazzo as the
building manager of the Property without the prior consent of Owner. The parties
hereto agree that John Marazzo may perform services for the Manager with respect
to other projects provided that: (i) Manager shall pay to the Owner a reasonable
per diem amount for the use of John Marazzo's services during the term of this
Agreement, and (ii) the performance by John Marazzo of such services for Manager
shall not interfere with the performance of his responsibilities with respect to
the Property in more than a de minimus nature. The per diem amount which is paid
to Owner for the use of John Marazzo's time shall be equal to that which is
charged to the Property for purposes of determining escalation rent to be paid
by the tenants of the Property.
2.3.10 Tenant Relations. Manager will maintain cordial and
frequent contact with the tenants of the Property and keep Owner informed of the
tenants' concerns, expansion or contraction plans, changes in occupancy or use,
and other matters that could have a bearing upon the leasing, operation or
ownership of the Property. Manager will exercise all due diligence to project a
positive and responsible image of Owner to the tenants and to the larger
community, and to the extent known by Manager, will inform Owner of any
condition, policy, or event that could reasonably be expected to harm the
reputation of Owner among the tenants or in the larger community. Any tenant
retention program is subject to approval by Owner and is at Owner's sole cost
and expense.
2.3.11 Compliance with Laws. Manager shall use its
commercially reasonable efforts to determine such action as may be necessary,
inform Owner of action as may be necessary and, when authorized by Owner, and
subject to appropriate funding by Owner, take such action as may be necessary,
to cause the Property to comply with all current and future laws, rules,
regulations, or ordinances affecting the ownership, use, or operation of the
Property, including orders of the Board of Fire Underwriters or other similar
bodies; provided, however, that Manager need not obtain the prior authorization
of Owner to take action in case of an emergency or any threat to life, safety or
property, so long as Manager shall give Owner prompt notice of any such action
taken. Manager shall comply with all laws relating to the employment by Manager
of its employees.
2.3.12 Notices. Manager shall deliver forthwith to Owner at
the address stated on the Basic Information Sheet all written notices received
by Manager from any mortgagee, tenant, or other party to any of the Basic
Documents given pursuant thereto or pertaining thereto and all written notices
from any governmental entity.
2.3.13 Cooperation. Should any claims, demands, suits, or
other legal proceedings be made or instituted by any third party against Owner
that arise out of any matters relating to the Property or this Agreement or
Manager's performance hereunder, Manager shall promptly give Owner all pertinent
information and assistance in the defense or other disposition thereof;
provided, however, in the event the foregoing requires Manager to incur any
expenses beyond the ordinary cost of doing business and so long as Manager
proceeds with commercially reasonable diligence and efficiency, Owner shall pay
for any such out-of-pocket costs of which Owner has been advised in writing.
Nothing contained herein shall require Owner to reimburse Manager for any
out-of-pocket costs which are incurred as a result of any acts of Manager in
violation of the terms of this Agreement.
2.3.14 Notice of Complaints, Violations and Fire Damage.
Manager shall respond to complaints and requests from tenants and notify Owner
within five (5) business days of Manager's having received any complaint made by
a tenant of any alleged landlord default under any tenant lease. Additionally,
Manager shall notify Owner as soon as is practical (such notice to be
accompanied by copies of supporting documentation) of each of the following: any
notice of any governmental requirements received by Manager; and upon becoming
aware of any fire or significant damage to the Property, or other matter which
might have an adverse, or material, impact on the Property.
2.3.15 Notice of Damages and Suits; Settlement of Claims.
Manager shall notify Owner's general liability insurance broker or carrier as
soon as is practical (but in no event later than five (5) business days after it
obtains knowledge) of the occurrence of any bodily injury or property damage
occurring to or claimed by any tenant or third party on or with respect to the
Property, and promptly forward to Owner and the broker, any summons, subpoena or
other like legal documents served upon Manager relating to actual or alleged
potential liability of Owner, Manager or the Property. Notwithstanding the
foregoing, Manager shall not be authorized to accept service of process on
behalf of Owner, unless such authority is otherwise imputed by law.
2.3.16 Enforcement of Leases. Manager shall enforce compliance
by tenants with each and all of the terms and provisions of the tenant leases,
in accordance with policies set by Owner, provided, however, that Manager shall
not, without the prior written consent of Owner in each instance, which consent
may be withheld by Owner in its sole discretion, institute legal proceedings in
the name of Owner to enforce tenant leases, collect income and rent or
dispossess tenants or others occupying the Property or any portion thereof, or
terminate any tenant lease, lock out a tenant, or engage counsel or institute
any proceedings for recovery of possession of the Property.
2.3.17 Environmental.
(a) Notice. Manager shall promptly advise Owner in
writing of any evidence of non-compliance with any Hazardous Materials Laws, as
defined below, which Manager is aware of, together with a written report of the
nature and extent of the non-compliance and the potential threat, if any, to the
health and safety of persons and/or damage to the Property or the property
adjacent to or surrounding the Property. Owner acknowledges that (A) Manager is
not an environmental engineer and does not have any special expertise in the
Hazardous Materials Laws, (B) Manager's duties under this Section 2.3.17 are
limited to the quality of reasonable commercial care and diligence customarily
applied to property managers, and (C) Manager shall have no liability with
respect to the presence of Regulated Substances on, in or about the Property or
for the Property's compliance with Hazardous Materials Laws.
(b) Rights; Limitations. Without limiting any other
provision contained herein and subject to Section 2.3.16, Manager shall use
commercially reasonable efforts to enforce Owner's rights under the tenant
leases insofar as any tenant's compliance with Hazardous Materials Laws are
concerned; provided, however, Manager shall not retain environmental consultants
or otherwise initiate environmental reviews by any third parties without Owner's
prior written consent; and provided further, Manager shall hold in confidence
all information bearing on Hazardous Materials Laws and Regulated Substances,
except to the extent expressly instructed otherwise in writing by Owner, or
except to the extent necessary to protect against the imminent threat to the
life and safety of persons and/or damage to the Property or damage to the
property adjacent to or surrounding the Property, or except to the extent such
disclosure is required by Hazardous Materials Laws, other laws, or court order.
(c) Definitions. For the purposes of this Section
2.3.17, "Hazardous Materials Laws" shall mean all federal, state and local
environmental statutes, ordinances, regulations, orders and requirements of
common law, and "Regulated Substances" shall mean any "hazardous substance",
"pollutant or contaminant", "petroleum", all as defined in or otherwise referred
to in the Hazardous Materials laws, or any material containing petroleum, any
polychlorinated biphenyls (PCBs) or substances containing PCBs, any urea
formaldehyde foam, or any asbestos or materials containing asbestos.
2.3.18 Miscellaneous; Hiring of Professionals. Manager shall
perform such other acts and deeds as may be necessary and proper in the
discharge of its duties under this Agreement, including without limitation
hiring consultants, lawyers and other professionals the Manager shall reasonably
require from time to time in connection with the operation and management of the
Property under this Agreement, subject however, to the consent of Owner.
2.4 Services Not Included. Notwithstanding anything to the contrary in
this Agreement, Owner acknowledges that the following services are not included
in the services to be performed by Manager under this Agreement: (i) marketing
studies; (ii) expansion potential analysis and implementation, including major
tenant negotiation, land acquisition, design and construction; (iii) peripheral
land planning, including site analysis, ground leases, market review, sales and
development review and coordination; (iv) financing, refinancing and/or sale
services, (v) construction supervision services, and (vi) leasing services. In
the event Owner requests Manager to perform any of these services, such
additional services shall be performed at a fee to be negotiated by Owner and
Manager prior to the commencement of such services.
Anything to the contrary herein notwithstanding, in no event
shall Manager be required, or permitted, to render any advice to Owner in
connection with the development of the so-called Upland Parcels and the Piers,
nor shall Manager be required to take any action which would violate the
Employee Retirement Income Security Act of 1974.
3. Contractors.
3.1 Contractor Insurance/Indemnification.
(a) Manager shall require that all independent
contractors brought onto the Property have insurance coverage at the
contractor's expense, in the following minimum amounts:
(i) Commercial or Comprehensive General
Liability on an occurrence form for bodily injury liability and property damage
liability with limits of One Million Dollars ($1,000,000) combined single limit
each occurrence and Two Million Dollars ($2,000,000) in the aggregate with
respect to all occurrences within each policy year.
(ii) Comprehensive form automobile liability
covering owned, hired and non-owned vehicles with limits of One Million Dollars
($1,000,000) combined single limit each occurrence.
(iii) Employer's liability insurance in an
amount not less than Five Hundred Thousand Dollars ($500,000).
(iv) Workers compensation insurance in
accordance with the laws of the State of New Jersey.
The foregoing insurance shall name Owner and
Manager as additional insureds. The Manager shall obtain and keep on file a
Certificate of Insurance which shows that the contractor is so insured.
(b) Manager shall use commercially reasonable efforts
to require that each independent contractor indemnify and agree to pay on behalf
of, defend and hold harmless Owner, Manager and Owner's Representative, their
principals, officers, directors, trustees, fiduciaries, advisors, shareholders,
partners, employees and agents (individually and collectively, the "Indemnified
Party") from and against all liabilities, claims, suits, damages, judgments,
costs and expenses of whatever nature, including, but not limited to, reasonable
attorneys' fees and disbursements, to which the Indemnified Party may become
subject by reason or arising out of contractor's negligence or malfeasance.
3.2 Minimize Interference. All activities undertaken by
Manager under Section 2 shall include Manager's efforts to (i) minimize
interference with the operation and maintenance of the Property and the tenants
that occupy space at the Property, and (ii) ensure that such work does not
materially interfere with the structure of the Property or the electrical,
mechanical HVAC and other building systems at the Property. The Manager shall
make available to the Owner the advice and consultation of Manager's
professional staff in connection with such Owner Improvements.
4. Service Contracts. Manager shall not execute or otherwise enter into
or bind Owner with respect to any purchase order, contract or agreement for
equipment, supplies, services, or any other item without (A) obtaining three (3)
competitive written bids from contractors approved by Owner for work exceeding
Twenty-Five Thousand Dollars ($25,000) in costs, or such other amount as may be
specified by Owner from time to time, provided, however, that Manager shall
notify Owner with respect to any contractors submitting bids which may be
affiliates of Manager, (B) furnishing copies of the same, if requested, to
Owner, and (C) receiving the prior written consent of Owner, which consent may
be withheld by Owner in its sole discretion. All such contracts and agreements
shall be re-bid by Manager at such intervals as may be required by Owner from
time to time, but in no event less than once every three years unless Owner
offers not to rebid a contract on Manager's recommendation. All contracts shall
be prepared by Manager for Owner's execution (or at the request of Owner, for
Manager's execution on Owner's behalf) in conformity with applicable guidelines
of Owner. All service contracts shall contain a provision permitting Owner to
terminate on thirty (30) days written notice for any reason whatsoever, without
penalty. Manager shall not hold itself out as having the authority to approve
any contract or agreement without the prior approval of Owner except as provided
above. In the event Owner requests that Manager enter any such required
contracts, Manager shall do so on Owner's behalf as Owner's agent; provided,
however, that Owner shall reimburse and hold Manager harmless from any loss,
cost, claim, or expense arising in connection with Owner's failure to timely pay
(or to make available funds to timely pay) any such vendor, or any other breach
of such contract; provided further, however, that such reimbursement and hold
harmless agreement shall not extend to any claim based on Manager's gross
negligence or willful misconduct. From time to time, as may be requested by
Owner, Manager will review the performance of building service contractors and
vendors, and make recommendations to Owner for improving efficiency and quality,
and/or reducing costs.
5. Compensation for Services.
5.1 Management Fee.
5.1.1 Determination. As compensation for the
performance of the Manager's obligations under this Agreement, Owner shall pay
Manager a monthly fee (the "Management Fee") in an amount equal to three percent
(3%) of the Gross Income (as hereinafter defined) from the Property. As used
herein, the term "Gross Income" shall mean the aggregate dollar amount,
calculated on a cash basis, of all base rent actually received from any tenants
or licensees of any portion of the Property, including without limitation, all
parking revenue, and any percentage rent paid pursuant to a lease in connection
with which no base rent is being paid. The Management Fee shall be determined on
a monthly basis using Gross Income actually collected from the operation of the
Property for the applicable month with respect to which such fee is payable.
As between each of he Owners, the Management Fee due
Manager shall be paid by each Owner based upon the Gross Income from that
portion of the Property to which said Owner is entitled to receive Gross Income.
5.1.2 Payment. The Management Fee shall be payable by
Owner to Manager out of the Disbursement Account monthly in arrears prior to or
on the first (1st) day of each month, commencing as of the expiration of the
first full calendar-month after the Effective Date. If management services are
provided for less than one (1) full calendar month the Management Fee for such
partial month shall be calculated by determining the Management Fee that would
have been paid for the entire calendar month, and multiplying such amount by a
fraction, the numerator of which shall be the number of days management services
were provided in such month, and the denominator of which shall be the total
number of days in such month.
6. Accounting, Records, Reports.
6.1 Financial Records. Manager shall maintain, at the
Property, a comprehensive system of financial records for the Property on an
accrual basis in accordance with generally accepted accounting principles, and
other books and accounts, all of which shall belong to Owner. Owner and others
designated by Owner shall at all times have access to such records, accounts and
books and to all vouchers, files and all other material pertaining to the
Property and this Agreement, all of which Manager agrees to keep safe,
available, and distinct from any records not having to do with the Property.
Upon request of Owner, the reports required by this Section 6.1 and by Section
6.2 shall be provided electronically.
6.2 Financial Reports. Manager shall furnish to Owner monthly
unaudited financial reports by the 20th day of the succeeding calendar month, as
well as the monthly reports listed on Exhibit C.
6.3 Audits. Manager will cooperate with and give assistance in
a timely fashion to any internal or independent public accountant retained by
Owner to examine such statements or other records pertaining to the Property.
6.4 Annual Budgets. No later than 60 days before the start of
each succeeding fiscal year, or such other date specified in a written notice
from Owner to Manager, Manager shall deliver to Owner the annual budget
statements. These budget statements shall be in a form prepared by or approved
by Owner. Owner shall notify Manager of its approval or disapproval of such
budget statements within thirty (30) days of receipt by Owner thereof, and
Manager shall modify such budget statements according to Owner's comments. The
final, approved budget is referred to herein as the "Operating Budget".
6.5 Tenant Statements. Not later than one hundred twenty (120)
days after the closing of each annual reporting period, Manager shall provide
each tenant with a reconciliation statement and related back-up to the extent
required by its tenant lease. At the same time, to the extent required under
each tenant lease, Manager shall provide each tenant with such expense and tax
or other statements for the current year setting forth the payment required to
be made by such tenant pursuant to its tenant lease, based, to the extent
permitted by an applicable tenant lease, upon the current Operating Budget and
estimate of expenses and taxes for the then-current year, or setting forth such
other information that may be required therein. All material to be provided to
the tenants pursuant to this paragraph shall be submitted to Owner for its prior
review. Manager shall, at no additional cost to Owner, respond to any audit
request made by any tenant in connection with the material distributed pursuant
to this section.
6.6 Computerized Accounting.
6.6.1 System. Owner recognizes that Manager uses the
MRI property management/accounting system to report on property operations and
accounting functions. If Owner decides to convert to its own system which is not
compatible with Manager's system, Owner agrees to pay for all conversion costs
included but not limited to software, hardware and personnel time associated
with the conversion and training.
7. Expenses.
7.1 Expenses of Owner. All obligations or expenses incurred by
Manager hereunder, as specifically permitted or authorized hereunder or in the
Operating Budget, shall be for the account of, on behalf of, and at the expense
of Owner, except as otherwise specifically provided in this Agreement; provided,
however, that Owner shall not be obligated to reimburse Manager for (A) any
expenses for office equipment or office supplies of Manager's corporate office,
(B) any corporate overhead expenses of an off-site management office, and/or (C)
any salaries (including benefits) of the corporate staff of Manager including,
without limitation, any executives or supervisory personnel of Manager or the
secretary of such personnel or the bookkeeper of Manager, other than those
specified in Section 2.3.9 above. Owner shall have the right of prior approval
with respect to all expenses of Manager to be reimbursed by Owner and shall have
the right to audit any allocation of expenses between the Property and any other
properties managed or owned by Manager provided that such approval shall be
deemed to have been given if any such expense is specifically permitted or
authorized hereunder or in the Operating Budget.
7.2 Expenditure Authorization and Reimbursement.
7.2.1 Annual Budget. Manager shall be entitled to
expend money hereunder only in accordance with the funding request guidelines
set forth in Section 2.3.3. Any other expenditures not permitted in the
Operating Budget or under Section 7.2.2. shall require Owner's prior written
consent.
7.2.2 Emergency Repairs. Manager shall use its
diligent efforts to inform Owner of any casualty, breakdown in machinery or
other similar emergency, and Manager shall make payments for repairs,
maintenance equipment, or supplies, in excess of the authorization amounts
stated herein and without following the bidding procedures otherwise required,
if in the best business judgment of Manager, emergency action prior to written
approval from Owner is necessary to prevent injury to persons or to prevent
additional damage to the Property or a greater total expenditure arising from
such damage or to protect the Property from damage or prevent a default on the
part of Owner under the Basic Documents or the tenant leases. Any such payment
shall be made only in concert with prompt telecopy or electronic notification by
Manager to Owner.
7.2.3 Fund. Any authorized payments made by Manager
in the performance of its duties and obligations under this Agreement shall be
made out of such funds as Manager may from time to time hold for the account of
Owner or as may be provided by Owner. Without any obligation to do so, Manager
may advance for Owner's account any amount for the payment of any authorized
expenses, and Owner shall, upon notice from Manager, promptly reimburse Manager
therefor without interest. Manager shall notify Owner, in advance, of any
foreseeable deficiency of the funds in such accounts.
8. Indemnification.
8.1 Owner's Indemnity. Owner hereby indemnifies and agrees to
pay on behalf of, defend and hold harmless Manager, its principals, officers,
affiliates, directors, shareholders, partners, employees, advisors and agents
(individually and collectively, the "Manager Indemnified Party") from and
against all liabilities, claims, suits, damages, judgments, costs and expenses
of whatever nature, including, but not limited to reasonable attorney's fees and
disbursements, to which the Manager Indemnified Party may become subject arising
out of the management, operation, maintenance or leasing of the Property,
provided that (i) the Manager Indemnified Party promptly notifies Owner of any
matter with respect to which Owner is required to indemnify, hold harmless or
reimburse the Manager Indemnified Party, and (ii) the Manager Indemnified Party
does not take any actions, including an admission of liability, which would bar
Owner from defending itself with respect to such matter. Notwithstanding the
foregoing, Owner shall not be required to indemnify, defend, hold harmless or
reimburse the Manager Indemnified Party with respect to any matter to the extent
the same resulted from the negligence or malfeasance of the Manager Indemnified
Party or actions taken by the Manager Indemnified Party beyond the scope of the
Manager's duties or authority under this Agreement, or the scope of any express,
written direction of Owner that is not in conflict with the terms of this
Agreement. The provisions of this Section shall survive the expiration and any
termination of this Agreement.
8.2 Manager's Indemnity. Except with respect to any loss or
damage to property, Manager hereby indemnifies and agrees to pay on behalf of,
defend and hold harmless Owner, its principals, officers, affiliates, directors,
shareholders, partners, employees and agents (individually and collectively, the
"Owner Indemnified Party") from and against all liabilities, claims, suits,
damages, judgments, costs and expenses of whatever nature, including, but not
limited to reasonable attorney's fees and disbursements, to which the Owner
Indemnified party may become subject arising out of any proven breach during the
term of this Agreement, by Manager, its employees or agents, of any provisions
of this Agreement, or any proven negligence or malfeasance by Manager or its
employees or agents, provided that (i) the Owner Indemnified Party promptly
notifies Manager of any matter with respect to which Manager is required to
indemnify, hold harmless or reimburse the Owner Indemnified Party, and (ii) the
Owner Indemnified Party does not take any actions, including an admission of
liability, which would bar Manager from defending itself with respect to such
matter. The provisions of this Section shall survive the expiration and any
termination of this Agreement.
9. Term and Termination.
9.1 Term. The initial term of this Agreement shall be for the
Initial Term. Owner shall have the right, upon notice to Manager delivered at
any time prior to the date which is thirty (30) days prior to the end of the
Initial Term, to extend the term of this Agreement for a period of twelve months
commencing as of the last day of the Initial Term. Any such extension shall be
on the same terms and conditions which are contained in this agreement.
9.2 Termination for Cause.
9.2.1 By Manager. Manager may terminate this
Agreement in the event that Owner has materially defaulted in the performance of
its obligations hereunder.
9.2.2 By Owner. Owner may terminate this Agreement,
in the event that: (A) Manager has been negligent in the management, operation,
maintenance or servicing of the Property or has otherwise materially defaulted
in the performance of its obligations hereunder; or (B) a receiver, liquidator
or trustee of Manager shall be appointed by court order, or a petition to
liquidate or reorganize Manager shall be filed against Manager under any
bankruptcy, reorganization, or insolvency law, and such order or petition is not
vacated or dismissed within sixty (60) days, or Manager shall file a petition in
bankruptcy or under reorganization or insolvency laws, or if Manager shall make
an assignment for the benefit of its creditors, or if Manager is adjudicated as
bankrupt; or (C) there is damage or destruction to all or a substantial portion
of the Property and Owner decides not to rebuild or restore the Property or
there is a taking by condemnation, or similar proceeding, of a substantial
portion of the Property.
9.2.3 Notice and Opportunity to Cure. Except as
otherwise provided herein, any termination for cause shall be effective upon
receipt of written notice of termination given by the terminating party to the
defaulting party or thereafter upon such other date as specified by the
terminating party in such written notice; provided, however, that for those
causes for termination set forth in Section 9.2.1 and clause (A) of Section
9.2.2 the terminating party shall notify in writing the defaulting party that
the defaulting party shall have thirty (30) days (the "Cure Period") after
receiving such written notice within which to cure to the reasonable
satisfaction of the terminating party any such cause. Notwithstanding the above,
if Manager is terminated as a result of fraud, bad faith, or illegal activity,
no cure period shall be permitted.
9.3 Termination Without Cause.
9.3.1 By Manager. Manager may terminate this
Agreement without cause by written notice to Owner subject to the provisions of
Section 9.4 below. Such termination shall be effective ninety (90) days after
Owner's receipt of written notice of such termination given by Manager or
thereafter upon such other later date as specified by Manager in such written
notice.
9.4 Manager's Obligations after Termination. Upon the
expiration or earlier termination of this Agreement:
9.4.1 Stop Work. Manager shall stop work under this
Agreement.
9.4.2 Orders. Manager shall place no further orders
or subcontracts for materials, services, or facilities.
9.4.3 Final Accounting. Manager shall deliver to
Owner, within thirty (30) days of termination, a final accounting, reflecting
the balance of income and expenses of the Property as of the date of
termination.
9.4.4 Funds. Manager shall deliver to Owner any
monies of Owner or tenant security deposits, or both, held by Manager with
respect to the Property, together with an accounting therefor.
9.4.5 Books and Records. Upon request, Manager shall
deliver to Owner, or such other person or persons designated by Owner, the Basic
Documents, and copies of all books and records of the Property, all plans,
specifications, permits, contracts, leases and any other property or
documentation associated with the Property and not owned by Manager but which is
in Manager's possession or control. Upon request, all such information will be
provided electronically.
9.4.6 Service Contracts. Manager shall assign,
transfer, or convey to Owner or such other person or persons designated by
Owner, all service contracts relating to or used in the management, leasing,
operation and maintenance of the Property.
9.4.7 Continuing Covenant. Manager shall refer
questions or requests from tenants on the Property regarding the Property to
Manager's replacement.
Upon any termination of this Agreement pursuant to this
Section 9, the obligations of the parties hereto (except those specified as
surviving) shall cease as of the date specified in the notice of termination,
except that Manager shall comply with the applicable provisions hereof and shall
be entitled to receive any and all compensation that may be due Manager
hereunder at the time of such termination.
10. (Deliberately Omitted)
11. Assignment. Manager may not assign, hypothecate or transfer this
Agreement without the prior approval of Owner.
12. No Waiver. The failure of either party to seek redress
for breach, or to insist upon the strict performance of any covenant, agreement,
provisions or condition of this Agreement shall not constitute a waiver thereof,
and both parties shall have all remedies provided herein and by applicable law
with respect to any subsequent act that would have originally constituted a
breach.
13. Licenses. Manager, at all times hereunder, shall, at Manager's sole
cost and expense, obtain and maintain any and all licenses, permits and other
governmental consents required in order for Manager to perform its obligations
hereunder.
14. Notices. All notices required or permitted to be given hereunder
shall be in writing and shall be deemed given or made by personal delivery, by
overnight courier, or by mailing the same by United States certified or
registered mail, return receipt requested, postage prepaid, and addressed as set
forth in the Basic Information Sheet. Either party hereto may from time to time
by notice in writing served on the other party as aforesaid, designate a
different mailing address or different person(s) to which all such notices are
thereafter to be addressed.
15. Confidentiality and Nondisclosure. Manager shall hold in strictest
confidence all operating information and all financial information pertaining to
the Property. Manager shall immediately notify Owner if Manager receives a
request from a third party for the disclosure of information related to the
Property.
16. Benefit; Liability. This Agreement and all of the terms, covenants
and conditions hereof shall extend to the benefit of, and be binding upon, the
respective successors, and permitted assigns of the parties hereto. This
Agreement, and any liability that may arise as a consequence of the execution of
this Agreement by or on behalf of Owner shall be the liability of Owner and not
the personal liability of any trustee, officer, employee or agent of Owner.
17. Captions. The captions of this Agreement are inserted only for the
purpose of convenient reference and do not define, limit or prescribe the scope
or intent of this Agreement or any part hereof.
18. Construction. Each party participated in the preparation of this
Agreement personally and with the benefit of counsel. If this Agreement is ever
construed by a court of law or equity, such court shall not construe this
Agreement or any provision hereof more harshly against any party as drafter.
19. Applicable Law. This Agreement shall be construed in accordance
with the laws of the state in which the Property is located. Owner and Manager,
by execution of this Agreement, acknowledge and submit to the jurisdiction of
the Courts of such state in this matter.
20. Entire Agreement. This Agreement, including any exhibits and
addenda attached hereto, embodies the entire understanding of the parties, and
there are no further agreements or understandings, written or oral, in effect
between the parties relating to the subject matter hereof.
21. Attorneys' Fees. In the event of any litigation between Owner and
Manager arising out of the obligations of Owner or Manager under this Agreement
or concerning the meaning or interpretation of any provision contained herein,
the losing party shall pay the prevailing party's costs and expenses of such
litigation, including, without limitation, reasonable attorneys' fees.
22. Owner's Representative. Owner may, by written notice to Manager,
delegate all or any portion of its authority hereunder to a designated
representative of Owner. All decisions made by Owner's designee shall be binding
on Owner until Manager has received written notice of Owner's termination of
such delegation.
23. Nondiscrimination. Manager shall not discriminate against any
employee or applicant for employment because of race, color, sex, religion,
national origin, creed, marital status, age, or the presence of any sensory,
mental or physical handicap.
24. Owner's Consent. Owner agrees to use its commercially reasonable
efforts to respond to all matters requiring Owner's consent or approval herewith
within five (5) business days of Owner's receipt of such information from
Manager for which Owner's consent or approval is required. Owner further
acknowledges and agrees that Manager may rely upon the instruction, direction,
approval and consent given by Owner's Representative, in the same manner as if
Owner had given such instruction, direction, approval and consent; and that any
submissions for such approval or consent may be direct by Manager solely to
Owner's Representative; and that delivery or notice to Owner's Representative of
any notice or submission shall be deemed effective delivery or notice to Owner.
25. Venue. Any action related to this Agreement shall be filed in the
State in which the Property is located.
26. Treatment of Assets.
26.1 Title to all property furnished by Owner shall remain
Owner's. Title to all property purchased by Manager for which Manager is
entitled to be reimbursed as a direct item of cost under this Agreement shall
pass to and vest in Owner upon the expiration or earlier termination of this
Agreement.
26.2 Any property of Owner furnished to Manager shall, unless
otherwise provided in this Agreement, or approved by Owner, be used only for the
performance of this Agreement.
26.3 If any of Owner's property is lost, destroyed or damaged,
Manager shall immediately so notify Owner and shall take all reasonable steps to
protect the property from further damage.
27. Amendment. Any alteration, amendment, modification or waiver of any
clause or condition of this Agreement shall not be effective or binding unless
made in writing and signed by both parties hereto.
28. Disputes; Arbitration. Manager and Owner agree that all disputes
arising between Manager and Owner with respect to the terms of this Agreement
shall be resolved by means of binding arbitration in accordance with the then
applicable commercial arbitration rules of the American Arbitration Association,
and judgment upon the award rendered by the arbitrators may be entered into any
court of competent jurisdiction. Depositions may be taken and other discovery
obtained during such arbitration proceedings to the same extent as authorized in
civil judicial proceedings in the state in which the Property is located. The
arbitrator shall be limited to awarding compensatory damages and shall have no
authority to award punitive, exemplary or similar type damages. The cost of the
arbitration proceedings shall be borne by the losing party; the respective
parties shall bear the costs and fees of their respective counsel.
29. Time. Time is of the essence in the performance of the parties'
obligations under this Agreement. The parties acknowledge and agree that
notwithstanding that this Agreement may have been executed after the Effective
Date, the parties have complied and performed the terms of the Agreement since
the Effective Date.
30. Management Office. Owner shall provide Manager, at Owner's sole
cost and expense, with a rent-free office on the Property for the purpose of
performing Manager's obligations under this Agreement. Currently Manager
occupies approximately 10,000 sf on the ground floor of Plaza II which is used
by the building operational employees and by the building contractors and
approximately 3,000 sf on the 4th floor of Plaza II. If Owner requires Manager
to relocate, Owner will provide Manager with alternative space which is
reasonably acceptable to Manager. Owner shall supply such office furniture,
telephone service, copying machines, typewriters, computers and other business
machines as was provided by the previous owner of the Property.
31. Prohibition Against Recordation. This document may not be recorded
against the Property.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
Owner:
CALI HARBORSIDE (FEE)
ASSOCIATES, L.P., a New Jersey
limited partnership
BY: Cali Sub X, Inc., a Delaware
corporation, its General Partner
BY:
Name:
Title:
CALI HARBORSIDE PLAZA I (FEE)
ASSOCIATES L.P., a New Jersey
limited partnership
BY: Cali Sub X, Inc., a Delaware
corporation, its General Partner
BY:
Name:
Title:
<PAGE>
PLAZA II AND III URBAN RENEWAL
ASSOCIATES L.P., a New Jersey
limited partnership
By: One Exchange Place Corporation,
a Delaware corporation, general partner
By:
Name: Stephen J. Furnary
Title: President
CAL-HARBOR II & III URBAN RENEWAL ASSOCIATES L.P.,
a Delaware limited partnership
By: Cali Sub X, Inc., a New Jersey
corporation, its General Partner
By:
Name:
Title:
<PAGE>
PLAZA IV URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership
By: One Exchange Place Corporation,
a New Jersey corporation, general partner
By:
Name: Stephen J. Furnary
Title: President
CAL-HARBOR IV URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership
By: Cali Sub X, Inc., a Delaware
corporation, general partner
By:
Name:
Title:
<PAGE>
PLAZA VI URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership
By: One Exchange Place Corporation,
a New Jersey corporation, general partner
By:
Name: Stephen J. Furnary
Title: President
CAL-HARBOR VI URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership
By: Cali Sub XI, Inc., a Delaware
corporation, general partner
By:
Name:
Title:
<PAGE>
PLAZA V URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership
By: One Exchange Place Corporation,
a Delaware corporation, general partner
By:
Name: Stephen J. Furnary
Title: President
CAL-HARBOR V URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership
By: Cali Sub XI, Inc., a Delaware
corporation, general partner
By:
Name:
Title:
<PAGE>
NORTH PIER URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership
By: One Exchange Place Corporation,
a Delaware corporation, general partner
By:
Name: Stephen J. Furnary
Title: President
CAL-HARBOR NO. PIER URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership
By: Cali Sub XI, Inc., a Delaware
corporation, general partner
By:
Name:
Title:
<PAGE>
SOUTH PIER URBAN RENEWAL ASSOCIATES L.P., a New Jersey
limited partnership
By: One Exchange Place Corporation,
a Delaware corporation, general partner
By:
Name: Stephen J. Furnary
Title: President
CAL-HARBOR SO. PIER URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership
By: Cali Sub XI, Inc., a Delaware
corporation, general partner
By:
Name:
Title:
<PAGE>
HARBORSIDE EXCHANGE PLACE LIMITED PARTNERSHIP,
a New Jersey limited partnership
By: Two Harborside Corp., a Delaware corporation,
its General Partner
By:
Name: Stephen J. Furnary
Title: President
CALI-HARBOR VII URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership
By: Cali Sub XI, Inc., a Delaware
corporation, general partner
By:
Name:
Title:
Manager: Institutional Realty Management, LLC
By:________________________
Print
Name:
Print
Title:
<PAGE>
Exhibit A
Legal Description of Land
<PAGE>
Exhibit B
[Intentionally Deleted]
<PAGE>
Exhibit C
Reporting Requirements
Monthly Reports
By the 15th Day of the Following Month
1. Executive Summary
2. Leasing Reports:
a. Rent Roll
b. Physical Occupancy Report
c. Tenant Litigation Report
d. Leasing prospects, including renewals and expansions
3. Financial Reports (Accrual):
a. Balance Sheet (GAAP)
b. Income Statement
c. Statement of Cash Flows (Sources and Uses)
d. Budget vs. Actual With Variance Amounts -
Statement of Operations
e. Y-T-D Variance Explanation(1) of Budget vs. Actual
f. Trial Balance
g. Check/Disbursement Register
h. Accounts Payable Listing
i. Management Fee Computation
j. Capital Expenditures (Budget vs. Actual),
with Y-T-D variance explanation
k. Bank Statements
l. Bank Reconciliations
- -------------
1. Variance Scope
Comparison to year-to-date budget, including explanations for variances
greater than 7.5% and $20,000.
<PAGE>
4. Accounts Receivable Reports:
a. Accounts Receivable Aging Report with narrative for rents
over 90 days past due
b. Tenant Receivable Ledger Report - Charges and Collections
by Tenant and charge type
c. Reconciliation of Aged Tenants Account Receivable Balance
to total receivable per per Balance Sheet
d. Analysis of Allowance for Doubtful Accounts, by tenant
e. Bad Debt/Write-Off Schedule, by tenant
5. Operations Reports:
a. Report of Property Operations, including staffing,
engineering, maintenance & repairs, security incidents,
etc.
b. Report of any emergency repair expenses incurred during
the report period.
c. Report of tenant complaints for the month and a schedule
of corrective measures and related costs
d. Report of violations and other notices from any
governmental authority, agency or department, insurance
company, board of fire underwriters, or similar body, and
schedule of corrective measures and related costs
e. Report of any personal injury, property damage or
violation of public or building regulations suffered or
claimed by a third party or tenant
<PAGE>
Exhibit D
[Intentionally Deleted]
<PAGE>
Exhibit E
Dedicated On-Site Employees
RENTAL AGENCY AGREEMENT
AGREEMENT, made as of November 4, 1996 between Cali Harborside (Fee) Associates
L.P., a New Jersey limited partnership, Cali Harborside Plaza I (Fee) Associates
L.P., a New Jersey limited partnership, Plaza II and III Urban Renewal
Associates L.P., a New Jersey limited partnership, Cal-Harbor II & III Urban
Renewal Associates L.P., a Delaware limited partnership, Plaza IV Urban Renewal
Associates L.P., a New Jersey limited partnership, Cal-Harbor IV Urban Renewal
Associates L.P., a New Jersey limited partnership, Plaza V Urban Renewal
Associates L.P., a New Jersey limited partnership, Cal-Harbor V Urban Renewal
Associates L.P., a New Jersey limited partnership, Plaza VI Urban Renewal
Associates L.P., a New Jersey limited partnership, Cal-Harbor VI Urban Renewal
Associates L.P., a New Jersey limited partnership, Harborside Exchange Place
Limited Partnership, a New Jersey limited partnership, Cali-Harbor VII Urban
Renewal Associates L.P., a New Jersey limited partnership, North Pier Urban
Renewal Associates L.P., a New Jersey limited partnership, Cal-Harbor No. Pier
Urban Renewal Associates L.P., a New Jersey limited partnership, South Pier
Urban Renewal Associates L.P., a New Jersey limited partnership, and Cal-Harbor
So. Pier Urban Renewal Associates L.P., a New Jersey limited partnership, all
having an address at 11 Commerce Drive, Cranford, New Jersey 07016
(collectively, the "Owner") and Institutional Realty Management, LLC maintaining
an office at 13760 Noel Road, Suite 905, Dallas, Texas ("Agent").
WITNESSETH:
In consideration of the premises and the mutual covenants herein contained, the
parties hereto agree for themselves and their respective successors and assigns,
as follows:
1. Appointment of Agent; Services of Agent. (a) Owner hereby appoints Agent, and
Agent hereby accepts appointment, as the exclusive leasing agent for the
building known as Harborside Financial Center, Jersey City, New Jersey (the
"Building"), for the term of this Agreement, Agent having the exclusive right,
subject to the provisions herein set forth, for the leasing of all space in the
Building which is now or hereafter during the term of this Agreement available
for rental. In the performance of such obligation Agent shall retain Jones Lang
Wootton USA ("JLW USA") as its exclusive sub-agent. Subject to the payment by
Owner to Agent of the compensation due hereunder, Agent shall be responsible for
the payment of any fees due to JLW USA in connection with the performance of its
duties as the exclusive sub-agent. Anything herein to the contrary
notwithstanding, in no event shall JLW USA be deemed to be an Outside Broker (as
hereinafter defined) for purposes of this Agreement.
(b) Agent, subject to the terms of this Agreement, shall use its best
efforts, skills and services and those of its organizations to secure tenants
for the Building satisfactory to Owner and to work with prospective tenants so
as to obtain leases in the Building satisfactory to Owner. To such end Agent
shall solicit the services of and cooperate actively with other New Jersey
licensed real estate brokers. All leases, and all modifications, amendments,
renewals and extensions thereof, shall be subject to the prior written approval
of Owner and shall be executed by Owner or Owner's designated representative,
and Agent shall be furnished with a copy of each such executed lease agreement.
All negotiations of transactions covered by this Agreement shall be conducted by
Agent, subject to direction by Owner and Owner's review and final approval.
Agent will discuss lease proposals and shall formulate a leasing program to be
discussed with Owner. Agent will, quarterly during the term of this Agreement
and otherwise when reasonably requested by Owner, render to Owner written
reports of its services and efforts hereunder including descriptions of the
vacant space to be leased, descriptions of any prospective tenants, recommended
terms for leases, the status of each pending negotiation and recommendations as
to its ongoing leasing program.
(c) Nothing herein shall be construed to create a partnership, joint
venture or other similar relationship between Owner and Agent, nor shall Agent
or any of its employees or agents be deemed to be an employee of Owner.
2. Advertising and Publicity. At Owner's sole expense and subject to the express
written direction and approval of Owner, Agent shall conduct the renting program
for the Building. All written advertising, circulars, brochures, broker's
"set-ups", and other publicity material, programs press releases, press
interviews and promotions (collectively, "Publicity") shall be subject to
Owner's prior approval. All Publicity shall name Agent and JLW USA as leasing
agents for the Building, and will name JLW USA as prominently as it names Agent.
3. Inquiries. Owner shall refer to Agent all offers and inquiries received by
Owner for the leasing of any space in the Building, regardless of the source of
such offers and inquiries. Agent agrees diligently to investigate, pursue and
develop such offers and inquires.
4. Compensation of Agent. Owner agrees to pay Agent, and Agent agrees to accept,
as its full compensation hereunder, a commission computed at the rates provided
in Schedule A attached hereto and made a part hereof (the "Schedule A Rates"),
such commissions to be payable as provided in Paragraph 5 hereof, subject to the
terms, conditions, exceptions and provisions of Paragraphs 6 and 7 hereof. The
amount of the commissions payable to Agent shall be computed as follows:
(a) For each lease of space at the Building executed during the term of
this Agreement, or thereafter as provided in Paragraph 15 hereof, for which
lease there is no Outside Broker, as hereinafter defined, (each such executed
lease being hereinafter referred to as an "Agent's Lease"), Agent shall be
entitled to a commission computed in accordance with Schedule A subject to the
provisions of Paragraphs 6 and 7 hereof (an "Agent Commission").
(b) For each lease of space at the Building executed during the term of
this Agreement, or thereafter as provided in Paragraph 15 hereof, for which a
New Jersey licensed real estate broker other than Agent (an "Outside Broker") is
the effective procuring cause (an "Outside Lease"), Agent shall be entitled to
an Agent Commission which Agent shall pay to the Outside Broker, and an Override
Commission (as hereinafter defined), subject to the provisions of Paragraphs 6
and 7 hereof, which Agent shall be entitled to retain.
(c) For each renewal or extension of an Agent's Lease pursuant to an
option to renew or extend contained in the lease, Agent shall be entitled to an
Agent Commission subject to the provisions of Paragraphs 6 and 7.
(d) For each renewal or extension of an Outside Lease pursuant to an
option to renew or extend contained in the lease, Agent shall be entitled to an
Agent Commission which Agent shall pay to the Outside Broker, and if the renewal
or extension occurs during the term of this Agreement, Agent shall be entitled
to an Override Commission, subject to the provisions of Paragraphs 6 and 7.
(e) For each renewal or extension of an Agent's Lease or an Outside
Lease during the term of this Agreement, which is not pursuant to an option to
renew or extend, or in the event an Existing Tenant Lease (as hereinafter
defined) is renewed during the term of this Agreement, and such renewal is not
pursuant to an option to renew or extend, Agent shall be entitled to a
commission as follows: (i) in the event an Outside Broker is involved, Agent
shall be entitled to an Agent Commission, which Agent shall pay to the Outside
Broker, and an Override Commission, subject to the provisions of Paragraphs 6
and 7, and (ii) in the event no Outside Broker is involved, Agent shall be
entitled to one Agent Commission.
(f) For each Agent's Lease or Outside Lease which contains an option or
options or right of first refusal or other rights with respect to space in the
Building, or any expansion into additional space in the Building, then upon the
unconditional exercise of each such option or right at any time pursuant to the
terms thereof, Agent shall be entitled to a commission as follows: (i) in the
event an Outside Broker is involved, Agent shall be entitled to an Agent
Commission, which Agent shall pay to the Outside Broker and an Override
Commission, subject to the provisions of Paragraphs 6 and 7, and (ii) in the
event no Outside Broker is involved, Agent shall be entitled to an Agent
Commission.
(g) For any lease at the Building which is unconditionally amended or
modified during the term of this Agreement, other than pursuant to an option or
right contained therein, to lease additional space thereunder or as to which a
new lease is unconditionally executed to cover additional space, Agent shall be
entitled to a commission as follows: (i) in the event an Outside Broker is
involved, Agent shall be entitled to an Agent Commission, which Agent shall pay
to the Outside Broker, and an Override Commission, subject to the provisions of
Paragraphs 6 and 7, and (ii) in the event no Outside Broker is involved, Agent
shall be entitled to one Agent Commission.
As used herein, the term "Override Commission" shall mean a commission
equal to fifty (50%) percent of a commission computed in accordance with the
Schedule A Rates. As used herein, the term "Existing Tenant Lease" shall mean
each lease of space at the Building executed prior to the effective date of this
Agreement with a tenant which is an existing occupant of the Building on the
effective date of this Agreement.
For purposes of this Agreement, an "Outside Broker" shall include any
New Jersey licensed broker who is affiliated with JLW USA and is not part of the
agency representation team for the Building; provided however, that in no event
shall Owner be obligated to pay more than one Agent Commission unless a New
Jersey licensed broker, other than a New Jersey licensed broker who is
affiliated with JLW USA, is the effective procuring cause of the applicable
lease.
Anything to the contrary herein notwithstanding, Agent shall only be
entitled to an Override Commission during the term of this Agreement.
5. Payment of Compensation. All commissions payable hereunder with respect to
new leases, renewals, or additional space shall be payable in two (2)
installments, the first installment, in an amount equal to one-third (1/3) of
the applicable commission, shall be payable on the date provided for in
Paragraph 6(a) hereof, and the second installment to be due and payable upon the
earlier to occur of (i) substantial completion of the applicable premises and
the issuance of a certificate of occupancy, or (ii) the rent commencement date
set forth in the applicable lease.
6. Conditions of Payment. Subject to the terms of this Agreement, all
commissions shall be earned upon the unconditional execution and delivery of the
lease by Owner and tenant. The payment of all commissions hereunder shall be
subject to the following terms and conditions:
(a) In the case of (i) an Agent's Lease or an Outside Lease or (ii) a
renewal or extension of any lease or a lease of additional space other than
pursuant to an option contained therein, any commission provided for herein
shall be due and payable (and then only as to the first installment thereof)
when, as and if the Agent's Lease or Outside Lease or the renewal or extension
of the then existing lease or lease of additional space is duly and
unconditionally executed and delivered by Owner and tenant. In the case of any
renewal or extension of a lease or the lease of additional space pursuant to an
option or right contained in the lease, the commission shall be due and payable
as follows: (i) in the event an option to renew is exercised not earlier than
two years prior to the end of the initial term, one-third (1/3) of the
commission shall be payable upon the exercise of the renewal option, and the
balance shall be due upon the commencement of the renewal term; (ii) in the
event the option to renew is exercised earlier than two years prior to the end
of the initial term, the entire commission shall be due and payable upon the
exercise of the renewal options; and (iii) with respect to the exercise of an
option for additional space, the entire commission shall be due upon the earlier
to occur of (a) substantial completion of the applicable premises and the
issuance of a certificate of occupancy, or (b) the rent commencement date for
the applicable space.
(b) In the case of any renewal or extension of the term of a lease, or
the lease of additional space covered thereby, pursuant to an option or right
contained in the lease, and which pursuant to this Agreement a commission is due
and payable hereunder, if the rent payable for the renewal or extension term, or
additional space, has not been fixed as of the exercise of such option, the
commission payable hereunder shall be based upon the rent payable by the tenant
until the new basic rent is determined and, when the new rent is finally fixed,
such commission shall be recomputed based upon the new rent.
(c) Agent will indemnify and hold Owner harmless against the payment of
any commission to a broker claiming to have dealt with Agent with respect to a
lease and who is not disclosed to Owner prior to the unconditional execution and
delivery of the lease.
(d) Under no circumstances shall Owner be liable for or required to pay
to Agent in excess of one Agent Commission and one Override Commission for any
lease transaction.
(e) Anything to the contrary herein notwithstanding, in no event shall
Agent receive a commission pursuant to subsections (c)-(g) of Section 4 of this
Agreement for a period which extends beyond the Cut-Off Date (as hereinafter
defined), unless the initial term of the applicable lease is less than ten (10)
years, in which event a commission shall be paid for a period ending on the
earlier of (i) the date which is five (5) years from the end of the initial term
of the applicable lease, or (ii) the date which is the last day of the renewal
term. As used herein, the term "Cut-Off Date" shall mean the date which is
earlier to occur of (x) the date which is the twentieth (20) anniversary of the
commencement date of the initial term of the applicable lease, and (y) the date
which results from extending the initial term of applicable lease by fifty (50%)
percent of such initial term. For purposes of subsection (g), in no event shall
the initial term be deemed to have commenced prior to the date of this
Agreement.
7. Computation of Commissions. All commissions payable hereunder shall be
computed upon the basic rent reserved in the applicable lease document subject
to the limitations set forth in this Paragraph 7. The following rules shall
govern the computation of commission:
(a) In furtherance of the limitations of the commissions payable
hereunder to the basic rent reserved in the applicable lease, the following
shall be excluded from, or not included in, as the case may be, basic rent for
the purposes of computing commissions due hereunder: (i) any adjustments to the
basic rent or additional rent payable pursuant to any escalator provision
pursuant to which the tenant pays a share of Owner's increased taxes, increases
in all costs or expenses, including, but not limited to utility, cleaning and
operating cost escalation and escalation based upon wage rates; (ii) any
percentage or additional rental payable by a tenant based upon gross or net
income, sales or profits; (iii) any amounts payable by a tenant, as a
sublandlord or assignor for or in respect of any subletting or assignment,
including, without being limited to, any gross of net income or profit sharing;
(iv) any additional rent payable for extra services, without being limited to,
extra hours HVAC or elevator service, extra cleaning services and special
personnel services; (v) any amount included in or added to the fixed rent or
otherwise paid for electric current charges (whether or not on a "rent
inclusion" basis), (vi) any rent concessions granted to the tenant provided the
same is contained in the lease or a contemporaneous supplementary document
(except a free rent period granted to a tenant in lieu of a standard landlord's
work letter); and (vii) any increase in fixed rent or additional rent based upon
a cost of living or other price index used in lieu of all or any part of
operating expense escalation.
(b) If, in connection with any leasing transaction, Owner shall agree
to assume the tenant's obligations in respect of any space then occupied by
tenant ("Current Space") (or shall indemnify or agree to reimburse tenant in
respect of any Current Space), then there shall be added to the basic rent any
net proceeds actually received by Owner from the subletting, assignment,
surrender or cancellation of any Current Space, and deducted from the basic rent
the total dollar amount of the obligations so undertaken by Owner. When the
Owner's actual obligations with respect to the Current Space are finally
liquidated as to the actual cost thereof (including any ancillary or indirect
costs such as brokers commissions, moving costs and reasonable redecorating
costs and the like in respect of any Current Space), the commissions due
hereunder in respect of the subject lease transaction shall be recomputed and
appropriate adjustments made.
(c) If a lease shall provide that the tenant may cancel the term of the
lease (whether prior to or after the commencement thereof), the commission shall
initially be earned and payable only upon the basic rent payable during the
uncancellable portion of the initial term. If and when the tenant's right to
cancel expires, the balance of such commission shall then become due and payable
on the later to occur of (i) the day following the last day on which the tenant
could have exercised its right to cancel, or (ii) the date the commission would
otherwise be due pursuant to the terms hereof. However, if the cancellation
penalty includes a commission computed over the entire lease term, then Agent
shall be paid a commission for the entire lease term in accordance with
paragraph 5 of this Agreement as if the tenant did not have an option to cancel
the term of the lease. Notwithstanding the foregoing, if the cancellation is by
mutual agreement not pursuant to a provision contained in the lease, or if the
right of cancellation is contingent on Owner's acts or failure to act or
otherwise within Owner's control, Agent shall be paid a commission for the
entire lease term. A lease shall not be deemed cancelled within the meaning of
this subparagraph unless the tenant vacates the Building.
(d) If a lease provides for the payment of additional rent based upon
the tenant's proportionate share of operating payments and/or real estate taxes,
but does not provide for a "base year" with respect to which such escalation
expenses for operating expenses or real estate taxes are calculated, i.e., a
"Net Lease," the portion of operating expenses and real estate taxes for the
year in which the lease is executed, shall be allocable to the space covered by
the lease, and such allocable amount shall be considered rent on which Agent's
commission is payable. In making the computation, the amounts of such items for
the current year, if fixed, shall be used; if not fixed, the amounts of such
items for the previous year shall be used. The amount of such items for the
first year of the lease term shall be deemed to be the amount of all subsequent
years of the lease term for the purposes of computing the commission and no
subsequent increases shall be subject to commission.
8. Outside Brokers. Agent shall cooperate with Outside Brokers and shall
encourage their participation in the renting of space in the Building. Agent
shall use its reasonable efforts to have each Outside Broker execute a brokerage
agreement on a form which is reasonably satisfactory to Owner.
9. Term. The original term of this Agreement shall commence as of the date
hereof and shall continue until April 30, 1999, unless terminated earlier in
accordance with the provisions of Paragraph 11 hereof, and thereafter shall
continue in full force and effect unless and until terminated by Agent upon
thirty (30) days prior written notice to Owner, or by Owner upon ten (10) days
prior written notice to Agent.
10. Confidentiality. Agent shall hold in strictest confidence all operating and
financial information, and marketing strategy and planning, pertaining to the
Building and the overall business of the Owner and its affiliates, and shall not
disclose such information except in furtherance of the performance of its
leasing duties under this Agreement. Agent will cooperate with Owner's
reasonable requests not to disclose confidential information.
11. Termination. (a) In the event (i) a petition in bankruptcy is filed by Owner
or Agent, or any party hereto shall make an assignment for the benefit of
creditors to take advantage of any insolvency act or (ii) an involuntary
petition in bankruptcy is filed against Owner or Agent and is not dismissed or
rescinded within sixty (60) days, the other party hereto may forthwith terminate
this Agreement upon written notice to the other.
(b) Owner shall have the right to terminate this Agreement on ten (10)
days notice given at any time after the earlier to occur of (i) April 30, 1999,
or (ii) the date Three Harborside Corp. shall cease to have any obligations to
pay rent under that certain lease dated as of November 1, 1996, between Plaza II
and III Urban Renewal Associates L.P., as lessor, and Three Harborside Corp., as
lessee, affecting a portion of the Building.
12. Representations. Owner represents to Agent that Owner is the owner of the
Building and the Land on which it stands.
13. Assignment. (a) This Agreement may be assigned by Owner upon Owner's
transfer of ownership of the Building, provided any such assignee assumes in
writing Owner's obligations under this Agreement. Owner shall thereupon be
relieved of any liability hereunder so assumed.
(b) This Agreement may not be assigned by Agent (other than to a
wholly-owned subsidiary of the Agent capable of performing the covenants and
agreements of Agent herein, the performance of which subsidiary is assured by
Agent in a manner acceptable to Owner) without the prior written consent of
Owner.
14. Notices. All notices or other communications required or permitted to be
given hereunder shall be sent by first class registered or certified mail,
return receipt requested, Federal Express or similar overnight delivery or by
facsimile transmission, addressed to the party to which such notice is to be
given at the address set forth below or at such other address as the party may
designate by notice given as aforesaid.
OWNER: c/o Cali Realty Corporation
11 Commerce Drive
Cranford, New Jersey 07016
Attn: James G. Nugent
AGENT: Institutional Realty Management, LLC
13760 Noel Road, Suite 905
Dallas, TX 75240
Attn: Bruce Sirof
Notice or communications given hereunder shall be deemed to be given on the
earlier of (i) the date the same are actually received or (ii) three (3) days
after the date the same have been sent.
15. Post-Term Commissions. Within fifteen (15) days after the expiration or
termination of this Agreement, Agent shall deliver to Owner a written list,
certified by it, of all leasing transactions then in the course of negotiations
and the prospective tenants involved therein (denoting as to each whether Agent
is the sole procuring broker). For a period of six (6) months following the
expiration or termination of this Agreement, Owner shall continue to recognize
Agent, and any appropriate Outside Broker, as the broker in any leasing
transaction which may, at the time of such expiration or termination, be in the
course of negotiation and, if any such leasing transaction is consummated with
the prospective tenant with whom negotiations are being conducted within six (6)
months thereafter, the commission on any such leasing transaction shall be paid
to Agent, including any commissions payable to any Outside Broker, according to
the applicable terms and conditions of this Agreement. Following the expiration
or termination of this Agreement, Agent shall deliver to Owner at list of all
leasing transactions which are in the course of negotiations, which list shall
include the names and addresses of the potential tenants, the proposed space to
be leased, the proposed terms, and the name of any Outside Broker, if any.
16. Miscellaneous. (a) Agent agrees that it will, and will cause any person who
is a current employee of Agent to, execute and deliver promptly to Owner any
documentation reasonably requested by Owner to effect a partial or complete
waiver of the right of Agent and any persons who are current employees of Agent
to file a lien and/or to effect a release and discharge of record of any lien
which has been filed against the Building to the extent of any payment by Owner
of any commission payable by Owner pursuant to the terms of this Agreement.
Agent agrees to provide to Landlord promptly after demand evidence satisfactory
to landlord that all persons employed by Agent who have a right to file a
mechanic's lien in respect of the transaction contemplated by this Agreement
have been or, simultaneously with Owner's payment hereunder, will be, paid any
sums to which they are entitled to be paid by Agent to the extent of Owner's
payment hereunder.
(b) Any commission payable to any Outside Broker shall only be paid
upon delivery by the Outside Broker of a document releasing Owner and Agent from
any liability in connection with the lease for which such commission is being
paid.
(c) This Agreement may not be recorded against the Property.
(d) The term "Agent" as used in this Agreement shall include any
corporate subsidiaries or affiliates of Agent who perform services in, on or
about the Building arising out of or in connection with this Agreement. The term
"Owner" shall be deemed to include any subsidiaries, affiliates, successors,
nominees, heirs, distributees, executors, administrators or permitted assigns of
same.
(e) Anything to the contrary herein notwithstanding, in no event shall
Agent be required, or permitted, to render any advice to Owner in connection
with the development of the so-called Upland Parcels and the Piers, nor shall
Agent be required to take any action which would violate the Employee Retirement
Income Security Act of 1974.
(f) This Agreement contains the entire understanding of the parties and
it may not be changed or modified orally but only by written instrument signed
by duly authorized officers of the parties hereto. This Agreement shall be
governed by and construed in accordance with the laws of the Sate of New Jersey.
This Agreement shall be binding on the parties hereto, their successors and
assigns.
(g) Reference is made to a Management Agreement (the "Management
Agreement") of even date herewith between Owner and Institutional Realty
Management, LLC, affecting the Building. In the event Owner does not renew the
term of the Management Agreement for a period of at least twelve (12) months
following the Initial Term (as defined in the Management Agreement), and
provided that Institutional Realty Management LLC did not resign from its
obligations under the Management Agreement or was not removed for cause in
accordance with the terms of the Management Agreement, Owner hereby agrees to
pay Agent, as additional compensation hereunder, on the first day of each month
during the term of this Agreement commencing as of the first day of the
nineteenth month of this Agreement, and ending on the thirtieth month
(inclusive) of this Agreement, (unless this Agreement is terminated earlier), an
amount equal to $37,500, and in connection therewith, Agent agrees to provide
leasing consulting services to the Owner.
(h) As between each of the Owners, any commission due Agent shall be
paid by the Owner of the Building with respect to which the applicable lease was
executed.
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their hands the day
and year first above written.
Owner:
CALI HARBORSIDE (FEE)
ASSOCIATES, L.P., a New Jersey
limited partnership
BY: Cali Sub X, Inc., a Delaware
corporation, its General Partner
BY:
Name:
Title:
CALI HARBORSIDE PLAZA I (FEE)
ASSOCIATES L.P., a New Jersey
limited partnership
BY: Cali Sub X, Inc., a Delaware
corporation, its General Partner
BY:
Name:
Title:
<PAGE>
PLAZA II AND III URBAN RENEWAL
ASSOCIATES L.P., a New Jersey
limited partnership
By: One Exchange Place Corporation,
a Delaware corporation, general partner
By:
Name: Stephen J. Furnary
Title: President
CAL-HARBOR II & III URBAN RENEWAL ASSOCIATES L.P.,
a Delaware limited partnership
By: Cali Sub X, Inc., a New Jersey
corporation, its General Partner
By:
Name:
Title:
<PAGE>
PLAZA IV URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership
By: One Exchange Place Corporation,
a New Jersey corporation, general partner
By:
Name: Stephen J. Furnary
Title: President
CAL-HARBOR IV URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership
By: Cali Sub X, Inc., a Delaware
corporation, general partner
By:
Name:
Title:
<PAGE>
PLAZA VI URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership
By: One Exchange Place Corporation,
a New Jersey corporation, general partner
By:
Name: Stephen J. Furnary
Title: President
CAL-HARBOR VI URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership
By: Cali Sub XI, Inc., a Delaware
corporation, general partner
By:
Name:
Title:
<PAGE>
PLAZA V URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership
By: One Exchange Place Corporation,
a Delaware corporation, general partner
By:
Name: Stephen J. Furnary
Title: President
CAL-HARBOR V URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership
By: Cali Sub XI, Inc., a Delaware
corporation, general partner
By:
Name:
Title:
<PAGE>
NORTH PIER URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership
By: One Exchange Place Corporation,
a Delaware corporation, general partner
By:
Name: Stephen J. Furnary
Title: President
CAL-HARBOR NO. PIER URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership
By: Cali Sub XI, Inc., a Delaware
corporation, general partner
By:
Name:
Title:
<PAGE>
SOUTH PIER URBAN RENEWAL ASSOCIATES L.P., a New Jersey
limited partnership
By: One Exchange Place Corporation,
a Delaware corporation, general partner
By:
Name: Stephen J. Furnary
Title: President
CAL-HARBOR SO. PIER URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership
By: Cali Sub XI, Inc., a Delaware
corporation, general partner
By:
Name:
Title:
<PAGE>
HARBORSIDE EXCHANGE PLACE LIMITED PARTNERSHIP,
a New Jersey limited partnership
By: Two Harborside Corp., a Delaware corporation,
its General Partner
By:
Name: Stephen J. Furnary
Title: President
CALI-HARBOR VII URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership
By: Cali Sub XI, Inc., a Delaware
corporation, general partner
By:
Name:
Title:
INSTITUTIONAL REALTY MANAGEMENT, LLC
BY:
its President
<PAGE>
SCHEDULE A
Standard Leasing Commission
Rates: 5% of basic rent payable under the lease.
COMPANY PLEDGE AGREEMENT
This COMPANY PLEDGE AGREEMENT dated as of November ___, 1996 (this
"Agreement") is entered into between Cali Realty Corporation, a Maryland
corporation (the "Company"), and Prudential Securities Credit Corp., as
Administrative Agent (the "Administrative Agent") for the lenders (the
"Lenders") who are or may become parties to the Credit Agreement (as hereinafter
defined) and as custodian of the Collateral (as hereinafter defined) (Prudential
Securities Credit Corp., in its capacity as Administrative Agent and custodian
of the Collateral, is hereafter referred to as the "Collateral Holder", and in
any capacity other than as Administrative Agent or Collateral Holder is referred
to as "PSC").
R E C I T A L S
A. The Lenders, the Administrative Agent and Cali Realty, L.P., a
Delaware limited partnership (the "Operating Partnership") have entered into:
(i) a Revolving Credit Facility Agreement of even date herewith (such Revolving
Credit Facility Agreement, as it may hereafter be amended or otherwise modified
from time to time, being the "Credit Agreement"), and (ii) a Revolving Credit
Facility Agreement dated August 31, 1994 (as amended or otherwise modified from
time to time, the "Existing Credit Agreement").
B. The Company is the sole general partner and a limited partner in the
Operating Partnership and has received and will continue to receive substantial
benefit from the extensions of credit by Lenders to the Operating Partnership
under the Credit Agreement and the Existing Credit Agreement.
C. It is a condition precedent to the effectiveness of the Credit
Agreement, and to the making of Loans by the Lenders under the Credit Agreement
and the Existing Credit Agreement, that the Company shall have granted the
pledge and security interest contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Lenders to make Loans to the Operating Partnership from time to time under
the Credit Agreement and Existing Credit Agreement, the Company hereby agrees
with the Collateral Holder for its benefit and the ratable benefit of the
Lenders as follows:
SECTION 1. Definitions. Unless specified otherwise, capitalized terms
used but not defined in this Agreement shall have the meanings assigned thereto
under the Credit Agreement. In addition, the following terms shall have the
respective meanings set forth below.
"Collateral" shall have the meaning assigned thereto in Section 2 of
this Agreement.
"Credit Agreement Obligations" shall mean all indebtedness and
obligations of the Operating Partnership to the Administrative Agent and the
Lenders under the Credit Agreement and the Existing Credit Agreement (including,
without limitation, the Obligations (as that term is defined in the Credit
Agreement and the Existing Credit Agreement)).
"Event of Default" shall mean any Event of Default (as defined in the
Credit Agreement).
"Secured Obligations" shall mean: (i) the Company's obligations under
this Agreement, (ii) the Credit Agreement Obligations, and (iii) all other
obligations and liabilities of the Operating Partnership to the Administrative
Agent or the Lenders, whether direct or indirect, absolute or contingent, due or
to become due, now existing or hereafter incurred.
SECTION 2. Grant of Security. As collateral security for payment and
performance in full of all of the Secured Obligations in accordance with the
Credit Facility Documents and the Existing Credit Facility Documents, the
Company hereby pledges, hypothecates, assigns, transfers, sets over and delivers
unto the Collateral Holder, and grants to the Collateral Holder for its benefit
and the ratable benefit of the Lenders a continuing and perfected first priority
security interest in the following (the "Collateral"):
(a) All of the Company's right, title and interest in and to the
securities of each issuer identified on Schedule I, whether now owned or
hereafter acquired;
(b) All shares of capital stock, options, rights and warrants now or
hereafter issued to the Company as an addition to, in substitution or exchange
for, or on account of, any of the shares of capital stock described in
subsection (a) above;
(c) All dividends and distributions, whether cash or property, and all
accounts, contract rights and general intangibles, arising from all of the
foregoing or relating thereto;
(d) All Proceeds of the foregoing.
SECTION 3. Security for Obligations. The assignments, pledges, liens
and security interests granted under this Agreement (collectively, the "Security
Interest") by the Company secure the payment and performance in full of all
Secured Obligations.
SECTION 4. Delivery of Collateral. All certificates or instruments
representing or evidencing the Collateral shall be delivered to and held by the
Collateral Holder pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, and by such other instruments or documents as the
Collateral Holder may reasonably request, all in form and substance reasonably
satisfactory to the Collateral Holder. The Collateral Holder shall have the
right, at any time in its sole discretion and without prior notice to the
Company, to transfer to or to register in the name of the Collateral Holder or
any of its nominees any or all of the Collateral, subject only to the revocable
rights specified in Section 7(a). In addition, the Collateral Holder shall have
the right at any time to exchange certificates or instruments representing or
evidencing the Collateral for certificates or instruments reflecting smaller or
larger ownership interests.
SECTION 5. Representations and Warranties. The Company represents and
warrants as follows:
(a) The Company is the legal, equitable and beneficial owner of the
Collateral, free and clear of any Lien, except for Liens created by this
Agreement, and the Company will make no other assignment, pledge, mortgage,
hypothecation or transfer of the Collateral. The Company has good right and
legal authority to pledge the Collateral in the manner hereby done or
contemplated and will defend its title thereto against the claims of all persons
whomsoever and will maintain and preserve the Security Interest with respect to
the Collateral as long as this Agreement shall remain in full force and effect.
(b) No consent or approval of any governmental body or regulatory
authority or of any securities exchange was or is necessary as a condition to
the validity of the pledge by the Company of the Collateral hereunder.
(c) This Agreement, and the pledge of the Collateral pursuant hereto,
create a valid and perfected first priority Security Interest in the Collateral
to secure the Secured Obligations. The Company has delivered or is delivering,
together with such appropriate endorsements or documentation of assignment
thereof, all Collateral consisting of certificated securities, instruments or
the like.
(d) As of the date of this Agreement, Schedule I is true, complete and
correct in all material respects.
(e) The Company's principal place of business and chief executive
office is located at 11 Commerce Drive, Cranford, New Jersey 07016.
(f) Each issuer of securities identified on Schedule I is a corporation
duly organized and validly existing under the laws of the state of its
incorporation as specified on Schedule I.
(g) The Company has delivered to the Collateral Holder true and correct
copies of the Articles of Incorporation, Bylaws and other organizational
documents of each of the issuers specified on Schedule I, and such Articles of
Incorporation, Bylaws and organizational documents are valid, effective and
enforceable in accordance with their respective terms.
(h) All conditions and requirements under the applicable Articles of
Incorporation, Bylaws, organizational documents and shareholder agreements of
each of the issuers specified on Schedule I with respect to the pledge,
assignment and transfer of the Collateral have been satisfied or obtained.
(i) The securities specified on Schedule I have been duly authorized
and validly issued and are fully paid and non-assessable.
(j) Upon delivery to the Collateral Holder of the certificates
evidencing the securities described on Schedule I, together with stock powers as
required by the Collateral Holder, the pledge hereunder in favor of the
Collateral Holder for the benefit of the Lenders will create a valid, binding
and enforceable (subject, as to enforcement, to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforceability of creditors' rights generally and general principles of equity)
security interest in and lien on the Collateral and constitute a fully perfected
first and prior security interest in and lien upon all right, title and interest
of the Company in the Collateral.
SECTION 6. Further Assurances. The Company agrees that from time to
time, at the expense of the Company, it will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary, or that the Collateral Holder may reasonably request, in order to
perfect and protect the Security Interest granted hereby or to enable the
Collateral Holder to exercise and enforce its rights and remedies hereunder with
respect to the Collateral.
SECTION 7. Voting Rights; Etc.
(a) So long as no Event of Default shall have occurred and be
continuing:
(i) The Company shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral or any
part thereof; provided, however, that the Company shall give the
Collateral Holder at least five (5) days' prior written notice of the
manner in which it intends to exercise any such right; provided
further, however, that the Company shall not exercise or refrain from
exercising any such right if, in the Collateral Holder's reasonable
judgment, such action would have a material adverse effect on the value
of the Collateral or any part thereof or is otherwise inconsistent with
the terms of this Agreement, the other Credit Facility Documents or the
Existing Credit Facility Documents (collectively, the "Operative
Documents").
(ii) The Company shall be entitled to receive and retain any
and all dividends, distributions and other payments paid on and in
respect of the Collateral.
(iii) The Collateral Holder shall execute and deliver (or
cause to be executed and delivered) to the Company all such proxies and
other instruments as the Company may reasonably request for the purpose
of enabling it to exercise the voting and other rights that it is
entitled to exercise pursuant to paragraph (i) above and to receive the
dividends, distributions and other payments that it is authorized to
receive and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) All rights of the Company to exercise the voting and other
consensual rights that it would otherwise be entitled to exercise
pursuant to Section 7(a)(i) and to receive the dividends, distributions
and other payments that it would otherwise be authorized to receive and
retain pursuant to Section 7(a)(ii) shall cease, and all such rights
shall thereupon become vested in the Collateral Holder who shall
thereupon have the sole right to exercise voting and other consensual
rights and to receive and hold as Collateral such dividends,
distributions and other payments.
(ii) All dividends, distributions and other payments that are
received by the Company contrary to the provisions of paragraph (i) of
this Section 7(b) shall be received and held in trust for the benefit
of the Collateral Holder and the Lenders, shall be segregated from
other funds of the Company and shall be forthwith paid over to the
Collateral Holder as Collateral in the same form as so received (with
any necessary endorsement).
SECTION 8. Transfers and Other Liens. The Company shall not (a) sell,
assign (by operation of law or otherwise) or otherwise dispose of, or grant any
option with respect to, any of the Collateral, or (b) create or suffer to exist
any Lien upon or with respect to any of the Collateral except for Liens created
by this Agreement.
SECTION 9. Collateral Holder Appointed Attorney-in-Fact. The Company
hereby constitutes and appoints the Collateral Holder its attorney-in-fact for
the purpose of carrying out the provisions of this Agreement and taking any
action and executing any instrument that the Collateral Holder may deem
necessary or advisable to accomplish the purposes hereof, which appointment is
irrevocable and coupled with an interest; provided, however, that the Collateral
Holder shall not exercise any right pursuant to this grant until the occurrence
of an Event of Default. Without limiting the generality of the foregoing, the
Collateral Holder shall have the right, after the occurrence of an Event of
Default hereunder, with full power of substitution, either in the Collateral
Holder's name or in the name of the Company, to ask for, demand, sue for,
collect, receive, and give acquittance for any and all moneys due or to become
due under and by virtue of any Collateral, to endorse checks, drafts, orders and
other instruments for the payment of money payable to the Collateral Holder or
the Lenders, representing any dividend, distribution or other amount payable in
respect of the Collateral or any part thereof or on account thereof and to give
full discharge for the same, to settle, compromise, prosecute or defend any
action, claim or proceeding with respect thereto, and to sell, assign, endorse,
pledge, transfer and make any agreement respecting, or otherwise deal with, the
same; provided, however, that nothing herein contained shall be construed as
requiring or obligating the Collateral Holder to make any commitment or to make
any inquiry as to the nature or sufficiency of any payment received by it, or to
present or file any claim or notice, or to take any action with respect to the
Collateral or any part thereof or the moneys due or to become due in respect
thereof or any Property covered thereby, and no action taken or omitted to be
taken by the Collateral Holder with respect to the Collateral or any part
thereof shall give rise to any defense, counterclaim or offset in favor of the
Company or to any claim or action against the Collateral Holder.
SECTION 10. Collateral Holder May Perform. If the Company fails to
perform any agreement contained herein, the Collateral Holder may itself
perform, or cause the performance of, such agreement, and the reasonable expense
of the Collateral Holder incurred in connection therewith shall be payable by
the Company under Section 13(b).
SECTION 11. The Collateral Holder's Duties. The powers conferred on the
Collateral Holder hereunder are solely to protect its and the Lenders' interest
in the Collateral and shall not impose any duty upon it to exercise any such
powers. Except for a duty to exercise reasonable care in respect of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Collateral Holder shall have no duty as to any Collateral, as
to ascertaining or taking action with respect to calls, conversions, exchanges,
tenders or other matters relative to any Collateral, whether or not the
Collateral Holder or any Lender has or is deemed to have knowledge of such
matters, or as to the taking of any necessary steps to preserve rights against
any parties or any other rights pertaining to any Collateral. The Collateral
Holder shall be deemed to have exercised reasonable care in the custody and
preservation of any Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which the Collateral Holder accords its
own Property. The duties of the Collateral Holder under this Agreement shall be
mechanical and administrative in nature; the Collateral Holder shall not have,
by reason of this Agreement, a fiduciary relationship in respect of any Lender,
and nothing herein, express or implied, is intended to or shall be so construed
as to impose upon the Collateral Holder any obligations in respect of this
Agreement except as expressly set forth herein.
SECTION 12. Remedies. If any Event of Default shall have occurred and
be continuing:
(a) The Collateral Holder may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party on default under the NYUCC
(whether or not the NYUCC applies to the affected Collateral) and also shall
have the right, as the Collateral Holder may deem necessary or advisable, to do
any of the following:
(i) to foreclose the Security Interest by any available
judicial procedure or without judicial process;
(ii) to notify the issuer of the Collateral that the
Collateral has been assigned to the Collateral Holder and that all
dividends, distributions and other payments thereon are to be made
directly and exclusively to the Collateral Holder;
(iii) to enter into any extension or reorganization agreement
or other agreement relating to or affecting the Collateral and in
consideration therewith, the Collateral Holder may deposit or surrender
control of the Collateral or accept other Property in exchange of the
Collateral;
(iv) to settle, adjust, defend, compromise or release, on
terms acceptable to the Collateral Holder, in whole or in part, any
amounts owing on the Collateral and/or any disputes with respect
thereto; or
(v) to exercise all other rights, powers, privileges and
remedies of an owner of the Collateral.
(b) Without notice except as specified below, the Collateral Holder
may, or shall at the express written direction of (i) so long as any Loans under
the Credit Agreement or the Existing Credit Agreement are outstanding, Lenders
holding at least 25% in aggregate principal amount of the outstanding Loans
under the Credit Agreement and Existing Credit Agreement, and (ii) otherwise,
PSC (the party or parties so entitled to give such direction, the "Controlling
Lenders"), on behalf, and for the ratable benefit, of all of the Lenders, retain
the Collateral or sell, assign, transfer, endorse and deliver the Collateral or
any part thereof in one or more parcels at public or private sale, on any
exchange, over the counter market or at any of the Collateral Holder's offices
or elsewhere, for cash, on credit or for other Property, for immediate or future
delivery, and at such price or prices and upon such other terms as the
Collateral Holder or the Controlling Secured Parties may deem commercially
reasonable. Upon consummation of any such sale, the Collateral Holder shall have
the right to assign, transfer, endorse and deliver to the purchaser or
purchasers thereof the Collateral so sold. Each such purchaser at any such sale
shall hold the Property sold absolutely free from any claim or right on the part
of the Company, and the Company hereby waives (to the fullest extent permitted
by law) all rights of redemption, stay or appraisal which the Company now has or
may at any time in the future have under any rule of law or statute now existing
or hereafter enacted. The Company agrees that ten (10) days' prior written
notice to the Company of the time and place of any public sale or the time after
which any private sale is to be made shall constitute commercially reasonable
notification within the meaning of Section 9-504(3) of the NYUCC. Any such sale
shall be held at such time or times and at such place or places as the
Collateral Holder may fix.
At any such sale, the Collateral, or portion thereof to be sold, may be
sold as an entirety or in separate portions, as the Collateral Holder may, in
its sole and absolute discretion, determine. The Collateral Holder shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Collateral Holder may, without notice or publication, adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. In case sale of all or any part of
the Collateral is made on credit or for future delivery, the Collateral so sold
may be retained by the Collateral Holder until the sale price is paid by the
purchaser or purchasers thereof, but the Collateral Holder shall not incur any
liability in case any such purchaser or purchasers shall fail to take up and pay
for the Collateral so sold and, in case of any such failure, such Collateral may
be sold again upon like notice. At any sale made pursuant to this Agreement, the
Collateral Holder and (i) so long as any Loans under the Credit Agreement or the
Existing Credit Agreement are outstanding, any Lender, and (ii) otherwise, PSC,
may bid for or purchase, free from any right of redemption, stay or appraisal on
the part of the Company (all said rights being also hereby waived and released
to the fullest extent permitted by law), any part of or all of the Collateral
offered for sale, and the Collateral Holder and any such Lender may, upon
compliance with the terms of sale, hold, retain and dispose of such Property
without further accountability to the Company therefor. The Collateral Holder
shall not be required to register or qualify any of the Collateral under
applicable state or federal securities laws if the sale is effected in a manner
that complies with all applicable federal and state securities laws. The
Collateral Holder may, at any private sale, if it deems advisable, restrict the
prospective bidders or purchasers to persons who will represent and agree that
they are purchasing the Collateral for their own account for investment and not
with a view to the distribution or sale thereof. If any such Collateral is sold
at private sale in a manner that the Collateral Holder in good faith believes to
be reasonable under the circumstances then existing, then (i) the sale shall be
deemed to be commercially reasonable in all respects, (ii) the Company shall not
be entitled to a credit against the Secured Obligations in an amount in excess
of the purchase price, and (iii) the Collateral Holder shall not incur any
liability or responsibility to the Company in connection therewith,
notwithstanding the possibility that a substantially higher price might have
been realized at a public sale.
The Company recognizes that a ready market may not exist for such
Collateral if it is not regularly traded on a recognized securities exchange,
and that a sale by the Collateral Holder of any such Collateral for an amount
substantially less than the value thereof (whether determined by book value,
appraisal or otherwise) may be commercially reasonable in view of the
difficulties that may be encountered in attempting to sell Collateral that is
privately traded. Until the Collateral Holder is able to effect a sale or other
disposition of the Collateral or any part thereof, the Collateral Holder shall
have the right, but not the obligation, to exercise all rights of an owner of
the Collateral or any part thereof to the extent that it deems appropriate for
the purpose of preserving the Collateral or its value or for any other purpose
deemed by the Collateral Holder to be commercially reasonable in the exercise of
the Collateral Holder's remedies hereunder. The Collateral Holder shall have no
obligation to the Company to maintain or preserve the rights of the Company as
against third parties with respect to the Collateral.
(c) All dividends, distributions and other payments received by the
Collateral Holder under, in connection with, or otherwise in respect of the
Collateral, and all cash proceeds received by the Collateral Holder in respect
of any sale of, collection from, or other realization upon all or any part of
the Collateral may, in the discretion of the Collateral Holder, be held by the
Collateral Holder as collateral for, and/or then or at any time thereafter
applied (after first payment of any amounts payable to the Collateral Holder
pursuant to Section 13 and then payment of any costs, expenses or indemnities
then due and payable by the Company to any Lender hereunder or under the Credit
Agreement, any other Credit Facility Document or any Existing Credit Facility
Document) in whole or in part by the Collateral Holder for the ratable benefit
of the Lenders, in the following order of priority:
(i) first, ratably among the holders of the Credit Agreement
Obligations until all of the Credit Agreement Obligations are repaid in
full;
(ii) second, ratably among the holders of the other Secured
Obligations (other than those specified in subsection (i) above) until
all of said other Secured Obligations are repaid in full.
Any surplus of such payments or cash proceeds held by the Collateral Holder and
remaining after payment in full of all the Secured Obligations shall be paid
over to the Company or to whomsoever may be lawfully entitled to receive such
surplus. If, however, there remains any deficiency between the amount of the
proceeds of the Collateral and the aggregate amount of the Secured Obligations,
the Operating Partnership shall remain liable to the extent of such deficiency.
SECTION 13. Indemnity and Expenses.
(a) The Company agrees to indemnify the Collateral Holder from and
against any and all claims, losses and liabilities arising out of or resulting
from this Agreement (including, without limitation, enforcement of this
Agreement), except claims, losses or liabilities resulting from the Collateral
Holder's gross negligence or willful misconduct.
(b) The Company, upon demand, shall promptly pay to the Collateral
Holder the amount of any and all reasonable expenses, including the reasonable
fees and disbursements of its counsel and of any experts, that the Collateral
Holder may incur in connection with (i) the custody, preservation, use of, or
the sale of, collection from or other realization upon, any of the Collateral,
(ii) the exercise or enforcement of any of the rights of the Collateral Holder
or the Lenders hereunder, or (iii) the failure by the Company to perform or
observe any of the provisions hereof.
SECTION 14. Amendments, Waivers; Etc.
(a) No amendment or waiver of any provision of this Agreement, and no
consent to any departure by the Company herefrom, shall in any event be
effective unless the same shall be in writing and signed by the Collateral
Holder, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
(b) The waiver by the Collateral Holder of any breach of the terms and
conditions of this Agreement, and the consent of any Lender thereto, shall not
prejudice any remedy of the Collateral Holder or any Lender in respect of any
continuing or other breach of the terms and conditions hereof, and shall not be
construed as a bar to any right or remedy that the Collateral Holder or any
Lender would otherwise have on any future occasion under this Agreement.
(c) No failure on the part of the Collateral Holder or any Lender to
exercise, and no delay on any of their parts in exercising, any right, power,
privilege or remedy under this Agreement, shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or remedy preclude
any other or the further exercise thereof or the exercise of any other right,
power or remedy. All remedies hereunder are cumulative and are not exclusive of
any other remedies provided by law.
SECTION 15. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing (including telegraphic communication)
and shall be mailed, telegraphed, telecopied, telexed, cabled or delivered to
the appropriate party at its address specified in the Credit Agreement (for
Collateral Holder) and in the signature block of this Agreement for the Company
or, as to either party, at such other address as shall be designated by such
party in a written notice to each other party complying as to delivery with the
terms of this Section. All such notices and other communications shall be
effective (a) when received, if mailed or delivered, or (b) when delivered to
the telegraph company, transmitted by telecopier, confirmed by telex
answer-back, or delivered to the cable company, respectively, addressed as
aforesaid.
SECTION 16. Continuing Security Interest, Assignments under the Credit
Agreements. This Agreement shall create a continuing Security Interest in the
Collateral and shall (a) remain in full force and effect until termination in
accordance with the provisions of Section 17, (b) be binding upon the Company,
its successors and assigns, and (c) inure, together with the rights and remedies
of the Collateral Holder hereunder, to the benefit of the Collateral Holder, the
Lenders and their respective successors, transferees and assigns. Without
limiting the generality of the foregoing clause (c), any Lender may assign or
otherwise transfer all or any portion of its rights and obligations under the
Credit Facility Documents or Existing Credit Facility Documents (including,
without limitation, all or any portion of its Commitments and the Loans owing to
it thereunder) held by it to any other person or entity, and such other person
or entity shall thereupon become vested with all the benefits in respect thereof
granted to such Lender herein or otherwise, subject, however, to the provisions
of Article X (concerning the Administrative Agent and the Collateral Holder) and
Section 11.06 (concerning Assignments and Participations) of the Credit
Agreement and Existing Credit Agreement. The Company shall not be permitted to
assign this Agreement or any interest herein or in the Collateral, or any part
thereof, except as permitted by the Credit Agreement, or otherwise pledge,
encumber or grant any option with respect to the Collateral, or any part
thereof, or any cash or Property held by the Collateral Holder as collateral
under this Agreement. No notice to or demand on the Company shall entitle the
Company to any other or further notice or demand in the same, similar or other
circumstances.
SECTION 17. Termination. The Security Interest granted hereby shall
terminate and all rights to the Collateral shall revert to the Company upon the
first to occur of the following (the "Security Termination Date"): (a) the
Credit Agreement shall have terminated and the Loans and other amounts due
thereunder shall have been paid in full and Lenders have no further commitment
to extend credit to the Operating Partnership under the Credit Agreement, or (b)
all of the Loans and all other amounts due under the Credit Agreement shall have
been refinanced by Lenders as an unsecured interest only term loan or an
unsecured revolving credit facility as provided in Section 2.10 of the Credit
Agreement. Upon any such Security Termination Date, the Collateral Holder shall
reassign and redeliver the Collateral then held by or for the Collateral Holder
and execute and deliver to the Company, at the Company's expense, such documents
as it shall reasonably request to evidence such termination.
SECTION 18. Governing Law.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
(b) The Company hereby expressly and irrevocably agrees and consents
that any suit, action or proceeding arising out of or relating to this Agreement
and the transactions contemplated herein may be instituted by the Collateral
Holder or any Lender in any State or Federal court sitting in the County of New
York, State of New York, United States of America and, by the execution and
delivery of this Agreement, the Company expressly waives any objection that it
may have now or hereafter to the laying of the venue or to the jurisdiction of
any such suit, action or proceeding, and irrevocably submits generally and
unconditionally to the jurisdiction of any such suit, action or proceeding, and
irrevocably submits generally and unconditionally to the jurisdiction of any
such court in any such suit, action or proceeding.
<PAGE>
(c) The Company agrees that service of process may be made on the
Company by personal service of a copy of the summons and complaint or other
legal process in any such suit, action or proceeding, or by registered or
certified mail (postage prepaid) to the address of the Company specified in
Section 15, or by any other method of service provided for under the applicable
laws in effect in the State of New York.
(d) Nothing contained in Sections 18(b), 18(c) and 18(d) shall preclude
the Collateral Holder or any Lender from bringing any suit, action or proceeding
arising out of or relating to this Agreement or the other Credit Facility
Documents in the courts of any place where the Company or any of the Company's
Property or assets may be found or located. To the extent permitted by the
applicable laws of any such jurisdiction, the Company hereby irrevocably submits
to the jurisdiction of any such court and expressly waives, in respect of any
such suit, action or proceeding, the jurisdiction of any other court or courts
which now or hereafter, by reason of its present or future domicile, or
otherwise, may be available to it.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN
CONNECTION WITH THE FOREGOING, THE COMPANY HEREBY AGREES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY AND THE COMPANY HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY HAVE THAT
SUCH ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(f) Unless otherwise defined herein or in the Credit Agreement, terms
used in Article 9 of the NYUCC are used herein as therein defined.
SECTION 19. Waiver of Claims. Except as otherwise provided in this
Agreement, THE COMPANY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, NOTICE OF JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL
HOLDER'S TAKING POSSESSION OR THE COLLATERAL HOLDER'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICES AND
HEARINGS FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT THAT THE
COMPANY WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED
STATES OR OF ANY STATE, and the Company hereby further waives:
(a) all damages occasioned by such taking of possession except any
damages which are the direct result of the Collateral Holder's gross negligence
or willful misconduct;
(b) all other requirements as to the time, place and terms of sale or
other requirements with respect to the enforcement of the Collateral Holder's
rights hereunder; and
(c) all rights of redemption, appraisement, valuation, stay, extension
or moratorium now or hereafter in force under any applicable law in order to
prevent or delay the enforcement of this Agreement or the absolute sale of the
Collateral or any portion thereof, and the Company, for itself and all who may
claim under it, insofar as it now or hereafter lawfully may, hereby waives the
benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other
realization upon, any Collateral shall operate to divest all right, title,
interest, claim and demand, either at law or in equity, of the Company therein
and thereto, and shall be a perpetual bar both at law and in equity against the
Company and against any and all persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, through and
under the Company.
SECTION 20. Registration In Nominee's or Collateral Holder's Name. The
Collateral Holder shall have the right (in its sole and absolute discretion) to
hold the Collateral in its own name or in the name of its nominee, all in form
and substance satisfactory to the Collateral Holder.
SECTION 21. Separability of Provisions. Any provision of this Agreement
prohibited by the laws of any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition, or be modified to conform with
such laws, without invalidating the remaining provisions of this Agreement, and
any such prohibition in any jurisdiction or any impairment or invalidity of this
Agreement under the laws of any jurisdiction as security for any portion of the
Secured Obligations hereunder shall not impair or invalidate this Agreement as
security for any other portion thereof.
SECTION 22. Headings. Section headings used herein are for convenience
only and are not to affect the construction of or be taken into consideration in
interpreting this Agreement.
SECTION 23. Counterparts. This Agreement may be executed with
counterpart signature pages or in any number of counterparts, each of which
shall be deemed to be an original and all of which when taken together shall
constitute but one in the same instrument.
<PAGE>
IN WITNESS WHEREOF, each party has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
COLLATERAL HOLDER:
PRUDENTIAL SECURITIES CREDIT CORP.
By: ____________________________________
Name (print): ___________________________
Title: _____________________________________
COMPANY:
CALI REALTY CORPORATION
By: ____________________________________
Name (print): ___________________________
Title: _____________________________________
Notice Address: 11 Commerce Drive
Cranford, NJ 07016
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
PLEDGED STOCK
====================================================================================================================
State of Type of Percentage
Issuer Incorporation Security Ownership
- ------------------------------ ---------------------------- --------------------------- ----------------------------
<S> <C> <C> <C>
Cali Sub X, Inc. Delaware Common Stock 100%
- ------------------------------ ---------------------------- --------------------------- ----------------------------
Cali Sub XI, Inc. Delaware Common Stock 100%
============================== ============================ =========================== ============================
</TABLE>
PLEDGE AGREEMENT
This PLEDGE AGREEMENT dated as of November ___, 1996 (this "Agreement")
is entered into between Cali Realty, L.P., a Delaware limited partnership (the
"Operating Partnership"), and Prudential Securities Credit Corp., as
Administrative Agent (the "Administrative Agent") for the benefit of the lenders
(the "Lenders") who are or may become parties to the Credit Agreement (as
hereinafter defined) and as custodian of the Collateral (as hereinafter defined)
(Prudential Securities Credit Corp., in its capacity as Administrative Agent and
custodian of the Collateral, is hereafter referred to as the "Collateral
Holder", and in any capacity other than as Administrative Agent or Collateral
Holder is referred to as "PSC").
R E C I T A L S
A. The Lenders, the Administrative Agent and the Operating Partnership
have entered into: (i) a Revolving Credit Facility Agreement of even date
herewith (such Revolving Credit Facility Agreement, as it may hereafter be
amended or otherwise modified from time to time, being the "Credit Agreement"),
and (ii) a Revolving Credit Facility Agreement dated August 31, 1994 (as amended
or otherwise modified from time to time, the "Existing Credit Agreement").
B. It is a condition precedent to the effectiveness of the Credit
Agreement, and to the making of Loans by the Lenders under the Credit Agreement,
that the Operating Partnership shall have granted the security interest
contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Lenders to make Loans from time to time under the Credit Agreement and
Existing Credit Agreement, the Operating Partnership hereby agrees with the
Collateral Holder for its benefit and the ratable benefit of the Lenders as
follows:
SECTION 1. Definitions. Unless specified otherwise in this Agreement,
capitalized terms used but not defined in this Agreement shall have the meanings
assigned thereto under the Credit Agreement. In addition, the following terms
shall have the respective meanings set forth below.
"Collateral" shall have the meaning assigned thereto under Section 2 of
this Agreement.
"Credit Agreement Obligations" shall mean all indebtedness and
obligations owed by the Operating Partnership to the Administrative Agent or
Lenders under the Credit Agreement or the Existing Credit Agreement (including,
without limitation, the Obligations (as that term is defined in the Credit
Agreement and the Existing Credit Agreement)).
"Event of Default" shall mean any Event of Default (as defined in the
Credit Agreement).
"Secured Obligations" shall mean the Credit Agreement Obligations
together with all other obligations and liabilities of the Operating Partnership
to the Administrative Agent or the Lenders, whether direct or indirect, absolute
or contingent, due or to become due, now existing or hereafter incurred.
SECTION 2. Grant of Security. As collateral security for payment and
performance in full of all of the Secured Obligations in accordance with the
Credit Facility Documents and the Existing Credit Facility Documents, the
Operating Partnership hereby pledges, hypothecates, assigns, transfers, sets
over and delivers unto the Collateral Holder, and grants to the Collateral
Holder for its benefit and the ratable benefit of the Lenders a continuing and
perfected first priority security interest in the following (the "Collateral"):
(a) All right, title and interest that the Operating Partnership now
owns or hereafter acquires as a limited partner in those limited partnerships
specified on Schedule I;
(b) All compensation, fees, cash distributions, distributions of
Property and returns of contributions that the Operating Partnership is now or
hereafter becomes entitled to receive by virtue of its ownership of the limited
partnership interests in the limited partnerships specified on Schedule I; and
(c) All Proceeds of all of the foregoing.
SECTION 3. Security for Obligations. The assignments, pledges, liens
and security interests granted under this Agreement (collectively, the "Security
Interest") by the Operating Partnership secure the payment and performance in
full of all Secured Obligations.
SECTION 4. Delivery of Collateral. All certificates or instruments
representing or evidencing the Collateral, if any, shall be delivered to and
held by the Collateral Holder pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, and by such other instruments or documents as
the Collateral Holder may reasonably request, all in form and substance
reasonably satisfactory to the Collateral Holder. The Collateral Holder shall
have the right, at any time in its sole discretion and without prior notice to
the Operating Partnership, to transfer to or to register in the name of the
Collateral Holder or any of its nominees any or all of the Collateral, subject
only to the revocable rights specified in Section 7(a). In addition, the
Collateral Holder shall have the right at any time to exchange certificates or
instruments representing or evidencing the Collateral for certificates or
instruments representing smaller or larger percentage interests.
SECTION 5. Representations and Warranties. The Operating Partnership
represents and warrants as follows:
(a) The Operating Partnership is the legal, equitable and beneficial
owner of the Collateral, free and clear of any Lien, except for Liens created by
this Agreement, and the Operating Partnership will make no other assignment,
pledge, mortgage, hypothecation or transfer of the Collateral. The Operating
Partnership has good right and legal authority to pledge the Collateral in the
manner hereby done or contemplated and will defend its title thereto against the
claims of all persons whomsoever and will maintain and preserve the Security
Interest with respect to the Collateral as long as this Agreement shall remain
in full force and effect.
(b) No consent or approval of any governmental body or regulatory
authority or of any securities exchange was or is necessary as a condition to
the validity of the pledge by the Operating Partnership of the Collateral
hereunder.
(c) This Agreement, and the pledge of the Collateral pursuant hereto,
create a valid and perfected first priority Security Interest in the Collateral
to secure the Secured Obligations. The Operating Partnership has delivered or is
delivering to the Collateral Holder, together with such appropriate endorsements
or documentation of assignment thereof, all Collateral consisting of
certificated securities, instruments or the like.
(d) As of the date of this Agreement, Schedule I is true, complete and
correct in all material respects.
(e) The Operating Partnership's principal place of business and chief
executive office is located at 11 Commerce Drive, Cranford, New Jersey 07016.
(f) Each limited partnership identified on Schedule I is a limited
partnership duly organized and validly existing under the laws of the state of
its organization as specified on Schedule I.
(g) The Operating Partnership has delivered to the Collateral Holder
true and correct copies of the limited partnership agreements of each of the
limited partnerships specified on Schedule I, and such partnership agreements
are valid, effective and enforceable in accordance with their respective terms.
(h) None of the limited partnerships specified on Schedule I have
issued certificates of partnership interest or any other writing or certificate
as evidence of the limited partnership interests owned by the Operating
Partnership and the respective partnership agreements constitute the only
documents evidencing the ownership interest of the Operating Partnership in the
limited partnerships specified on Schedule I.
(i) All conditions and requirements under the applicable partnership
agreements of each of the limited partnerships specified on Schedule I and under
applicable law with respect to the pledge, assignment and transfer of the
Collateral, and the Collateral Holder's right to receive distributions and
payments arising from or relating to the Collateral, have been satisfied or
obtained.
SECTION 6. Further Assurances. The Operating Partnership agrees that
from time to time, at the expense of the Operating Partnership, it will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary, or that the Collateral Holder may reasonably
request, in order to perfect and protect the Security Interest granted hereby or
to enable the Collateral Holder to exercise and enforce its rights and remedies
hereunder with respect to the Collateral, including, without limitation,
execution of financing statements and notices to the limited partnerships listed
on Schedule I and/or the general partners thereof.
SECTION 7. Voting Rights; Etc.
(a) So long as no Event of Default shall have occurred and be
continuing:
(i) The Operating Partnership shall be entitled to exercise
any and all voting and other consensual rights pertaining to the
Collateral or any part thereof; provided, however, that the Operating
Partnership shall give the Collateral Holder at least five (5) days'
prior written notice of the manner in which it intends to exercise any
such right; provided further, however, that the Operating Partnership
shall not exercise or refrain from exercising any such right if, in the
Collateral Holder's reasonable judgment, such action would have a
material adverse effect on the value of the Collateral or any part
thereof or is otherwise inconsistent with the terms of this Agreement,
the other Credit Facility Documents or the Existing Credit Facility
Documents (collectively, the "Operative Documents").
(ii) The Operating Partnership shall be entitled to receive
and retain any and all distributions and other payments paid on and in
respect of the Collateral.
(iii) The Collateral Holder shall execute and deliver (or
cause to be executed and delivered) to the Operating Partnership all
such proxies and other instruments as the Operating Partnership may
reasonably request for the purpose of enabling it to exercise the
voting and other rights that it is entitled to exercise pursuant to
paragraph (i) above and to receive the distributions and other payments
that it is authorized to receive and retain pursuant to paragraph (ii)
above.
(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) All rights of the Operating Partnership to exercise the
voting and other consensual rights that it would otherwise be entitled
to exercise pursuant to Section 7(a)(i) and to receive the
distributions and other payments that it would otherwise be authorized
to receive and retain pursuant to Section 7(a)(ii) shall cease, and all
such rights shall thereupon become vested in the Collateral Holder who
shall thereupon have the sole right to exercise voting and other
consensual rights and to receive and hold as Collateral such
distributions and other payments.
(ii) All distributions and other payments that are received by
the Operating Partnership contrary to the provisions of paragraph (i)
of this Section 7(b) shall be received and held in trust for the
benefit of the Collateral Holder and the Lenders, shall be segregated
from other funds of the Operating Partnership and shall be forthwith
paid over to the Collateral Holder as Collateral in the same form as so
received (with any necessary endorsement).
SECTION 8. Transfers and Other Liens. The Operating Partnership shall
not (a) sell, assign (by operation of law or otherwise) or otherwise dispose of,
or grant any option with respect to, any of the Collateral, or (b) create or
suffer to exist any Lien upon or with respect to any of the Collateral except
for Liens created by this Agreement.
SECTION 9. Collateral Holder Appointed Attorney-in-Fact. The Operating
Partnership hereby constitutes and appoints the Collateral Holder its
attorney-in-fact for the purpose of carrying out the provisions of this
Agreement and taking any action and executing any instrument that the Collateral
Holder may deem necessary or advisable to accomplish the purposes hereof, which
appointment is irrevocable and coupled with an interest; provided, however, that
the Collateral Holder shall not exercise any rights pursuant to this grant until
the occurrence of an Event of Default. Without limiting the generality of the
foregoing, the Collateral Holder shall have the right, after the occurrence of
an Event of Default hereunder, with full power of substitution, either in the
Collateral Holder's name or in the name of the Operating Partnership, to ask
for, demand, sue for, collect, receive, and give acquittance for any and all
moneys due or to become due under and by virtue of any Collateral, to endorse
checks, drafts, orders and other instruments for the payment of money payable to
the Collateral Holder or the Lenders, representing any distribution payable in
respect of the Collateral or any part thereof or on account thereof and to give
full discharge for the same, to settle, compromise, prosecute or defend any
action, claim or proceeding with respect thereto, and to sell, assign, endorse,
pledge, transfer and make any agreement respecting, or otherwise deal with, the
same; provided, however, that nothing herein contained shall be construed as
requiring or obligating the Collateral Holder to make any commitment or to make
any inquiry as to the nature or sufficiency of any payment received by it, or to
present or file any claim or notice, or to take any action with respect to the
Collateral or any part thereof or the moneys due or to become due in respect
thereof or any Property covered thereby, and no action taken or omitted to be
taken by the Collateral Holder with respect to the Collateral or any part
thereof shall give rise to any defense, counterclaim or offset in favor of the
Operating Partnership or to any claim or action against the Collateral Holder.
SECTION 10. Collateral Holder May Perform. If the Operating Partnership
fails to perform any agreement contained herein, the Collateral Holder may
itself perform, or cause the performance of, such agreement, and the reasonable
expenses of the Collateral Holder incurred in connection therewith shall be
payable by the Operating Partnership under Section 13(b).
SECTION 11. The Collateral Holder's Duties. The powers conferred on the
Collateral Holder hereunder are solely to protect its and the Lenders' interest
in the Collateral and shall not impose any duty upon it to exercise any such
powers. Except for a duty to exercise reasonable care in respect of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Collateral Holder shall have no duty as to any Collateral, as
to ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Collateral, whether or not
the Collateral Holder or any Lender has or is deemed to have knowledge of such
matters, or as to the taking of any necessary steps to preserve rights against
any parties or any other rights pertaining to any Collateral. The Collateral
Holder shall be deemed to have exercised reasonable care in the custody and
preservation of any Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which the Collateral Holder accords its
own Property. The duties of the Collateral Holder under this Agreement shall be
mechanical and administrative in nature; the Collateral Holder shall not have,
by reason of this Agreement, a fiduciary relationship in respect of any Lender,
and nothing herein, express or implied, is intended to or shall be so construed
as to impose upon the Collateral Holder any obligations in respect of this
Agreement except as expressly set forth herein.
SECTION 12. Remedies. If any Event of Default shall have occurred and
be continuing:
(a) The Collateral Holder may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party on default under the NYUCC
(whether or not the NYUCC applies to the affected Collateral) and also shall
have the right, as the Collateral Holder may deem necessary or advisable, to do
any of the following:
(i) to foreclose the Security Interest by any available
judicial procedure or without judicial process;
(ii) to notify the limited partnerships listed on Schedule I
and/or the general partners thereof that the Collateral has been
assigned to the Collateral Holder and that all distributions and
payments thereon are to be made directly and exclusively to the
Collateral Holder;
(iii) to enter into any extension or reorganization agreement
or other agreement relating to or affecting the Collateral, and in
consideration therewith, the Collateral Holder may deposit or surrender
control of the Collateral or accept other Property in exchange of the
Collateral;
(iv) to settle, adjust, defend, compromise or release, on
terms acceptable to the Collateral Holder, in whole or in part, any
amounts owing on the Collateral and/or any disputes with respect
thereto; or
(v) to exercise all other rights, powers, privileges and
remedies of an owner of the Collateral.
(b) Without notice except as specified below, the Collateral Holder
may, or shall at the express written direction of (i) so long as any Loans under
the Credit Agreement or Existing Credit Agreement are outstanding, Lenders
holding at least 25% in aggregate principal amount of the outstanding Loans
under the Credit Agreement and Existing Credit Agreement, and (ii) otherwise,
PSC (the party or parties so entitled to give such direction, the "Controlling
Secured Parties"), on behalf, and for the ratable benefit, of all of the
Lenders, retain the Collateral or sell, assign, transfer, endorse and deliver
the Collateral or any part thereof in one or more parcels at public or private
sale, on any exchange, over the counter market or at any of the Collateral
Holder's offices or elsewhere, for cash, on credit or for other Property, for
immediate or future delivery, and at such price or prices and upon such other
terms as the Collateral Holder or the Controlling Secured Parties may deem
commercially reasonable. Upon consummation of any such sale, the Collateral
Holder shall have the right to assign, transfer, endorse and deliver to the
purchaser or purchasers thereof the Collateral so sold. Each such purchaser at
any such sale shall hold the Property sold absolutely free from any claim or
right on the part of the Operating Partnership, and the Operating Partnership
hereby waives (to the fullest extent permitted by law) all rights of redemption,
stay or appraisal which the Operating Partnership now has or may at any time in
the future have under any rule of law or statute now existing or hereafter
enacted. The Operating Partnership agrees that ten (10) days' prior written
notice to the Operating Partnership of the time and place of any public sale or
the time after which any private sale is to be made shall constitute
commercially reasonable notification within the meaning of Section 9-504(3) of
the NYUCC. Any such sale shall be held at such time or times and at such place
or places as the Collateral Holder may fix.
At any such sale, the Collateral, or portion thereof to be sold, may be
sold as an entirety or in separate portions, as the Collateral Holder may, in
its sole and absolute discretion, determine. The Collateral Holder shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Collateral Holder may, without notice or publication, adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. In case sale of all or any part of
the Collateral is made on credit or for future delivery, the Collateral so sold
may be retained by the Collateral Holder until the sale price is paid by the
purchaser or purchasers thereof, but the Collateral Holder shall not incur any
liability in case any such purchaser or purchasers shall fail to take up and pay
for the Collateral so sold and, in case of any such failure, such Collateral may
be sold again upon like notice. At any sale made pursuant to this Agreement, the
Collateral Holder and (i) so long as any Loans under the Credit Agreement or
Existing Credit Agreement are outstanding, any Lender, and (ii) otherwise, PSC,
may bid for or purchase, free from any right of redemption, stay or appraisal on
the part of the Operating Partnership (all said rights being also hereby waived
and released to the fullest extent permitted by law), any part of or all of the
Collateral offered for sale, and the Collateral Holder and any such Lender may,
upon compliance with the terms of sale, hold, retain and dispose of such
Property without further accountability to the Operating Partnership therefor.
The Collateral Holder shall not be required to register or qualify any of the
Collateral under applicable state or federal securities laws if the sale is
effected in a manner that complies with all applicable federal and state
securities laws. The Collateral Holder may, at any private sale, if it deems
advisable, restrict the prospective bidders or purchasers to persons who will
represent and agree that they are purchasing the Collateral for their own
account for investment and not with a view to the distribution or sale thereof.
If any such Collateral is sold at private sale in a manner that the Collateral
Holder in good faith believes to be reasonable under the circumstances then
existing, then (i) the sale shall be deemed to be commercially reasonable in all
respects, (ii) the Operating Partnership shall not be entitled to a credit
against the Secured Obligations in an amount in excess of the purchase price,
and (iii) the Collateral Holder shall not incur any liability or responsibility
to the Operating Partnership in connection therewith, notwithstanding the
possibility that a substantially higher price might have been realized at a
public sale.
The Operating Partnership recognizes that a ready market may not exist
for such Collateral if it is not regularly traded on a recognized securities
exchange, and that a sale by the Collateral Holder of any such Collateral for an
amount substantially less than the value thereof (whether determined by book
value, appraisal or otherwise) may be commercially reasonable in view of the
difficulties that may be encountered in attempting to sell Collateral that is
privately traded. Until the Collateral Holder is able to effect a sale or other
disposition of the Collateral or any part thereof, the Collateral Holder shall
have the right, but not the obligation, to exercise all rights of an owner of
the Collateral or any part thereof to the extent that it deems appropriate for
the purpose of preserving the Collateral or its value or for any other purpose
deemed by the Collateral Holder to be commercially reasonable in the exercise of
the Collateral Holder's remedies hereunder. The Collateral Holder shall have no
obligation to the Operating Partnership to maintain or preserve the rights of
the Operating Partnership as against third parties with respect to the
Collateral.
(c) All distributions and other payments received by the Collateral
Holder under, in connection with, or otherwise in respect of the Collateral, and
all cash proceeds received by the Collateral Holder in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral
may, in the discretion of the Collateral Holder, be held by the Collateral
Holder as collateral for, and/or then or at any time thereafter applied (after
first payment of any amounts payable to the Collateral Holder pursuant to
Section 13 and then payment of any costs, expenses or indemnities then due and
payable by the Operating Partnership to any Lender hereunder or under the Credit
Agreement, any other Credit Facility Document or any Existing Credit Facility
Document) in whole or in part by the Collateral Holder for the ratable benefit
of the Lenders, in the following order of priority:
(i) first, ratably among the holders of the Credit Agreement
Obligations until all of the Credit Agreement Obligations are repaid in
full;
(ii) second, ratably among the holders of the other Secured
Obligations (other than those specified in subsection (i) above), until
all of said other Secured Obligations are repaid in full.
Any surplus of such payments or cash proceeds held by the Collateral Holder and
remaining after payment in full of all the Secured Obligations shall be paid
over to the Operating Partnership or to whomsoever may be lawfully entitled to
receive such surplus. If, however, there remains any deficiency between the
amount of the proceeds of the Collateral and the aggregate amount of the Secured
Obligations, the Operating Partnership shall remain liable to the extent of such
deficiency.
SECTION 13. Indemnity and Expenses.
(a) The Operating Partnership agrees to indemnify the Collateral Holder
from and against any and all claims, losses and liabilities arising out of or
resulting from this Agreement (including, without limitation, enforcement of
this Agreement), except claims, losses or liabilities resulting from the
Collateral Holder's gross negligence or willful misconduct.
(b) The Operating Partnership, upon demand, shall promptly pay to the
Collateral Holder the amount of any and all reasonable expenses, including the
reasonable fees and disbursements of its counsel and of any experts, that the
Collateral Holder may incur in connection with (i) the custody, preservation,
use of, or the sale of, collection from or other realization upon, any of the
Collateral, (ii) the exercise or enforcement of any of the rights of the
Collateral Holder or the Lenders hereunder, or (iii) the failure by the
Operating Partnership to perform or observe any of the provisions hereof.
SECTION 14. Amendments, Waivers; Etc.
(a) No amendment or waiver of any provision of this Agreement, and no
consent to any departure by the Operating Partnership herefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Collateral Holder, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
(b) The waiver by the Collateral Holder of any breach of the terms and
conditions of this Agreement, and the consent of any Lender thereto, shall not
prejudice any remedy of the Collateral Holder or any Lender in respect of any
continuing or other breach of the terms and conditions hereof, and shall not be
construed as a bar to any right or remedy that the Collateral Holder or any
Lender would otherwise have on any future occasion under this Agreement.
(c) No failure on the part of the Collateral Holder or any Lender to
exercise, and no delay on any of their parts in exercising, any right, power,
privilege or remedy under this Agreement, shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or remedy preclude
any other or the further exercise thereof or the exercise of any other right,
power or remedy. All remedies hereunder are cumulative and are not exclusive of
any other remedies provided by law.
SECTION 15. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing (including telegraphic communication)
and shall be mailed, telegraphed, telecopied, telexed, cabled or delivered to
the appropriate party at its address specified in the Credit Agreement or, as to
either party, at such other address as shall be designated by such party in a
written notice to each other party complying as to delivery with the terms of
this Section. All such notices and other communications shall be effective (a)
when received, if mailed or delivered, or (b) when delivered to the telegraph
company, transmitted by telecopier, confirmed by telex answer-back, or delivered
to the cable company, respectively, addressed as aforesaid.
SECTION 16. Continuing Security Interest, Assignments under the Credit
Agreements. This Agreement shall create a continuing Security Interest in the
Collateral and shall (a) remain in full force and effect until termination in
accordance with the provisions of Section 17, (b) be binding upon the Operating
Partnership, its successors and assigns, and (c) inure, together with the rights
and remedies of the Collateral Holder hereunder, to the benefit of the
Collateral Holder, the Lenders and their respective successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), any Lender
may assign or otherwise transfer all or any portion of its rights and
obligations under the Credit Facility Documents or Existing Credit Facility
Documents (including, without limitation, all or any portion of its Commitments
and the Loans owing to it thereunder) held by it to any other person or entity,
and such other person or entity shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise, subject,
however, to the provisions of Article X (concerning the Administrative Agent and
the Collateral Holder) and Section 11.06 (concerning Assignments and
Participations) of the Credit Agreement and Existing Credit Agreement. The
Operating Partnership shall not be permitted to assign this Agreement or any
interest herein or in the Collateral, or any part thereof, except as permitted
by the Credit Agreement, or otherwise pledge, encumber or grant any option with
respect to the Collateral, or any part thereof, or any cash or Property held by
the Collateral Holder as collateral under this Agreement. No notice to or demand
on the Operating Partnership shall entitle the Operating Partnership to any
other or further notice or demand in the same, similar or other circumstances.
SECTION 17. Termination. The Security Interest granted hereby shall
terminate and all rights to the Collateral shall revert to the Operating
Partnership on the first to occur of the following (the "Security Termination
Date"): (a) the Credit Agreement shall have terminated and the Loans and other
amounts due thereunder shall have been paid in full and Lenders have no further
commitment to extend credit to the Operating Partnership under the Credit
Agreement, or (b) all of the Loans and all other amounts due under the Credit
Agreement shall have been refinanced by Lenders as an unsecured interest only
term loan or an unsecured revolving credit agreement as provided in Section 2.10
of the Credit Agreement. Upon any such Security Termination Date, the Collateral
Holder shall reassign and redeliver the Collateral then held by or for the
Collateral Holder and execute and deliver to the Operating Partnership, at the
Operating Partnership's expense, such documents as it shall reasonably request
to evidence such termination.
SECTION 18. Governing Law.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
(b) The Operating Partnership hereby expressly and irrevocably agrees
and consents that any suit, action or proceeding arising out of or relating to
this Agreement and the transactions contemplated herein may be instituted by the
Collateral Holder or any Lender in any State or Federal court sitting in the
County of New York, State of New York, United States of America and, by the
execution and delivery of this Agreement, the Operating Partnership expressly
waives any objection that it may have now or hereafter to the laying of the
venue or to the jurisdiction of any such suit, action or proceeding, and
irrevocably submits generally and unconditionally to the jurisdiction of any
such suit, action or proceeding, and irrevocably submits generally and
unconditionally to the jurisdiction of any such court in any such suit, action
or proceeding.
(c) The Operating Partnership agrees that service of process may be
made on the Operating Partnership by personal service of a copy of the summons
and complaint or other legal process in any such suit, action or proceeding, or
by registered or certified mail (postage prepaid) to the address of Operating
Partnership specified in Section 15, or by any other method of service provided
for under the applicable laws in effect in the State of New York.
(d) Nothing contained in Sections 18(b), 18(c) and 18(d) shall preclude
the Collateral Holder or any Lender from bringing any suit, action or proceeding
arising out of or relating to this Agreement or the other Credit Facility
Documents in the courts of any place where the Operating Partnership or any of
the Operating Partnership's Property or assets may be found or located. To the
extent permitted by the applicable laws of any such jurisdiction, the Operating
Partnership hereby irrevocably submits to the jurisdiction of any such court and
expressly waives, in respect of any such suit, action or proceeding, the
jurisdiction of any other court or courts which now or hereafter, by reason of
its present or future domicile, or otherwise, may be available to it.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN
CONNECTION WITH THE FOREGOING, THE OPERATING PARTNERSHIP HEREBY AGREES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY AND THE OPERATING
PARTNERSHIP HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY OBJECTION THAT IT MAY HAVE THAT SUCH ACTION OR PROCEEDING HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.
(f) Unless otherwise defined herein or in the Credit Agreement, terms
used in Article 9 of the NYUCC are used herein as therein defined.
SECTION 19. Waiver of Claims. Except as otherwise provided in this
Agreement, THE OPERATING PARTNERSHIP HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, NOTICE OF JUDICIAL HEARING IN CONNECTION WITH THE
COLLATERAL HOLDER'S TAKING POSSESSION OR THE COLLATERAL HOLDER'S DISPOSITION OF
ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICES
AND HEARINGS FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT THAT THE
OPERATING PARTNERSHIP WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE
OF THE UNITED STATES OR OF ANY STATE, and the Operating Partnership hereby
further waives:
(a) all damages occasioned by such taking of possession except any
damages which are the direct result of the Collateral Holder's gross negligence
or willful misconduct;
(b) all other requirements as to the time, place and terms of sale or
other requirements with respect to the enforcement of the Collateral Holder's
rights hereunder; and
(c) all rights of redemption, appraisement, valuation, stay, extension
or moratorium now or hereafter in force under any applicable law in order to
prevent or delay the enforcement of this Agreement or the absolute sale of the
Collateral or any portion thereof, and the Operating Partnership, for itself and
all who may claim under it, insofar as it now or hereafter lawfully may, hereby
waives the benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other
realization upon, any Collateral shall operate to divest all right, title,
interest, claim and demand, either at law or in equity, of the Operating
Partnership therein and thereto, and shall be a perpetual bar both at law and in
equity against the Operating Partnership and against any and all persons
claiming or attempting to claim the Collateral so sold, optioned or realized
upon, or any part thereof, through and under the Operating Partnership.
SECTION 20. Registration In Nominee's or Collateral Holder's Name. The
Collateral Holder shall have the right (in its sole and absolute discretion) to
hold the Collateral in its own name or in the name of its nominee, all in form
and substance satisfactory to the Collateral Holder.
SECTION 21. Separability of Provisions. Any provision of this Agreement
prohibited by the laws of any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition, or be modified to conform with
such laws, without invalidating the remaining provisions of this Agreement, and
any such prohibition in any jurisdiction or any impairment or invalidity of this
Agreement under the laws of any jurisdiction as security for any portion of the
Secured Obligations hereunder shall not impair or invalidate this Agreement as
security for any other portion thereof.
SECTION 22. Headings. Section headings used herein are for convenience
only and are not to affect the construction of or be taken into consideration in
interpreting this Agreement.
SECTION 23. Counterparts. This Agreement may be executed with
counterpart signature pages or in any number of counterparts, each of which
shall be deemed to be an original and all of which when taken together shall
constitute but one in the same instrument.
<PAGE>
IN WITNESS WHEREOF, each party has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
COLLATERAL HOLDER:
PRUDENTIAL SECURITIES CREDIT CORP.
By: _____________________________________
Name: ________________________________________
Title: _______________________________________
OPERATING PARTNERSHIP:
CALI REALTY, L.P.
By: Cali Realty Corporation, its general partner,
By: _____________________________________
Name: ________________________________________
Title: _______________________________________
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
PLEDGED PARTNERSHIP INTERESTS
====================================================================================================================
State of
Partnership Name Organization Percentage Interest
- ------------------------------------------------ ----------------------------- -------------------------------------
<S> <C> <C>
Cali Harborside (Fee) Associates L.P. New Jersey 99%
- ------------------------------------------------ ----------------------------- -------------------------------------
Cal-Harbor II & III Urban Renewal Associates New Jersey 99%
L.P.
- ------------------------------------------------ ----------------------------- -------------------------------------
Cal-Harbor IV Urban Renewal Associates L.P. New Jersey 99%
- ------------------------------------------------ ----------------------------- -------------------------------------
Cal-Harbor V Urban Renewal Associates L.P. New Jersey 99%
- ------------------------------------------------ ----------------------------- -------------------------------------
Cal-Harbor VI Urban Renewal Associates L.P. New Jersey 99%
- ------------------------------------------------ ----------------------------- -------------------------------------
Cal-Harbor No. Pier Urban Renewal Associates New Jersey 99%
L.P.
- ------------------------------------------------ ----------------------------- -------------------------------------
Cal-Harbor So. Pier Urban Renewal Associates New Jersey 99%
L.P.
- ------------------------------------------------ ----------------------------- -------------------------------------
Cal-Harbor VII Urban Renewal Associates L.P. New Jersey 99%
====================================================================================================================
</TABLE>
