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):
January 31, 1997
----------------
CALI REALTY CORPORATION
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Maryland
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation)
1-13274 22-3305147
- --------------------------------------------------------------------------------
(Commission File No.) (I.R.S. Employer
Identification No.)
11 Commerce Drive, Cranford, New Jersey 07016
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(908) 272-8000
--------------
(Registrant's telephone number, including area code)
not applicable
- --------------------------------------------------------------------------------
(Former Name of Former Address, if Changed Since Last Report)
Page 1 of 7 Pages
<PAGE>
Item 2. Acquisition or Disposition of Assets
On January 31, 1997, Cali Realty Corporation and subsidiaries (the
"Company") acquired 65 properties (the "RM Properties") and the related
operations of Robert Martin Company LLC and affiliates ("RM"), for a total cost
of approximately $450 million. The cost of the transaction was financed through
the assumption of a $185 million mortgage, $220 million in cash, substantially
all of which was obtained from the Company's cash reserves, and the issuance of
1,401,225 units (the "Units") in Cali Realty, L.P., the operating partnership.
In connection with the transaction, the Company assumed a $185 million
non-recourse mortgage loan with Teachers Insurance and Annuity Association of
America ("TIAA"), with interest only payable monthly at a fixed annual rate of
7.18 percent (the "TIAA Mortgage"). The TIAA Mortgage is secured and
cross-collateralized by 43 of the RM Properties and matures on December 31,
2003. The Company, at its option, may convert the TIAA Mortgage to unsecured
public debt upon achievement by the Company of an investment credit rating of
Baa3/BBB- or better. The TIAA Mortgage is prepayable in whole or in part subject
to certain provisions, including yield maintenance.
The RM Properties consist primarily of 58 office and office/flex properties
aggregating approximately 3.7 million square feet and six industrial/warehouse
properties aggregating approximately 400,000 square feet. The RM Properties are
located primarily in established business parks in Westchester County, New York
and Fairfield County, Connecticut. The Company has agreed not to sell certain of
the RM Properties for a period of seven years without the consent of the RM
principals, except for sales made under certain circumstances and/or conditions.
In connection with this transaction, the Company was granted a three-year
option to acquire a 115,000 square foot office property and an 84,000 square
foot office/flex property (the "Option Properties") for an aggregate minimum
price of $19 million and has granted RM the right to put such properties to the
Company between a range of an aggregate purchase price of $11.6 to $21.3
million, under certain conditions. The purchase prices, under the agreement, are
subject to adjustment based on
Page 2 of 7 Pages
<PAGE>
different formulas and are payable in cash or Units.
The Company provided an $11.6 million non-recourse mortgage loan ("Mortgage
Receivable") to entities controlled by the RM principals, bearing interest at an
annual rate of 450 basis points over one-month LIBOR. The Mortgage Receivable,
which is secured by the Option Properties and guaranteed by certain of the RM
principals, matures on February 1, 2000. In addition, the Company received a
three percent origination fee in connection with the Mortgage Receivable.
In connection with the RM transaction, the Company's environmental
consultant undertook environmental audits of the properties, including sampling
activities, which identified certain environmental conditions at several of the
properties (the "Designated Properties") that will likely require further
investigation and/or remedial activities. RM retained the liability and
responsibility for remediation of the environmental conditions of the Designated
Properties, and has established an escrow in the amount of $1.5 million (the
"Environmental Escrow") as a clean-up fund. Any remediation costs for the
Designated Properties exceeding the Environmental Escrow will remain the
responsibility of the principals of RM.
Additionally, RM has made certain customary representations and warranties
to the Company, most of which survive the closing for a period of one year. RM
has agreed to maintain a minimum net worth of $25 million during such period.
Page 3 of 7 Pages
<PAGE>
RM, headquartered in Elmsford, New York, is a large real estate development
company doing business in the Westchester County, New York and Fairfield County,
Connecticut region. The privately-held firm owns and manages a portfolio of over
4.1 million square feet of office, office/flex and industrial/ warehouse
properties throughout the two-county area. RM is a fully integrated firm,
offering in-house architecture, engineering, construction, leasing and
management services to approximately 600 tenants.
As part of the transaction, Brad W. Berger, President and Chief Executive
Officer of RM, and Timothy M. Jones, Chief Operating Officer of RM, joined the
Company as Executive Vice Presidents under three-year employment agreements.
Pursuant to the agreements, Messrs. Berger and Jones were each issued warrants
to purchase 170,000 shares of the Company's common stock at a stock price of $33
per share, which vest equally over a three-year period and expire on January 31,
2007.
Robert F. Weinberg, co-founder of RM, and Mr. Berger will serve on the
Company's Board of Directors for an initial term of three years. The Company
will also appoint two additional independent Board members, thereby increasing
the size of the Board from nine to thirteen members.
Following the transaction, the Company's portfolio consists of 123
properties, aggregating 11.4 million square of office, office/flex and
industrial/warehouse properties, located in New Jersey, New York, Pennsylvania
and Connecticut.
Item 7. Financial Statements, Pro forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired.
It is impracticable to provide the financial information required under
Item 7(a) as of the required filing date of this Form 8-K. Such required
financial information will be filed under cover of Form 8-K/A as soon as
available and in no event later than April 21, 1997.
Page 4 of 7 Pages
<PAGE>
(b) Pro Forma Financial Information.
It is impracticable to provide the pro forma financial information required
under Item 7(b) as of the required filing date of this Form 8-K. Such required
pro forma financial information will be filed under cover of Form 8-K/A as soon
as available and in no event later than April 21, 1997.
(c) Exhibits.
Exhibit
Number Exhibit Title
- ------ -------------
10.59 Contribution and Exchange Agreement,
dated January 24, 1997, among
Robert Martin Company, LLC, Robert
Martin-Eastview North Company, L.P.,
Cali Realty, L.P. and Cali
Realty Corporation (including Schedule
28.1 - Special Environmental Matters, and certain Exhibits).
10.60 Amended and Restated Agreement of Limited
Partnership of Cali Realty, L.P., dated as
of January 16, 1997.
10.61 Third Modification and Assumption of Loans
Agreement among Robert Martin Company, LLC,
Cali CW Realty Associates L.P., Elmsford
Realty Associates L.P., Talleyrand Realty
Associates L.P., Cali Mid-West Realty
Associates L.P., Cali So. West Realty
Associates L.P., Cali WP Realty Associates
L.P. and Teachers Insurance and Annuity
Association of America, dated as of January
31, 1997 (including certain Exhibits).
Page 5 of 7 Pages
<PAGE>
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.
Dated: February 18, 1997
CALI REALTY CORPORATION
By: /s/ Thomas A. Rizk
---------------------------
Thomas A. Rizk
President and Chief
Executive Officer
By: /s/ Barry Lefkowitz
---------------------------
Barry Lefkowitz
Vice President - Finance
and Chief Financial Officer
Page 6 of 7 Pages
<PAGE>
Exhibit Index
Sequentially
Exhibit Numbered
Number Exhibit Title Page
- ------ ------------- ------------
10.59 Contribution and Exchange Agreement, dated
January 24, 1997, among Robert Martin Company,
LLC, Robert Martin-Eastview North Company,
L.P., Cali Realty, L.P. and Cali Realty
Corporation (including Schedule 28.1 - Special
Environmental Matters, and certain Exhibits).
10.60 Amended and Restated Agreement of Limited
Partnership of Cali Realty, L.P., dated as of
January 16, 1997.
10.61 Third Modification and Assumption of Loans
Agreement among Robert Martin Company, LLC,
Cali CW Realty Associates L.P., Elmsford Realty
Associates L.P., Talleyrand Realty Associates
L.P., Cali Mid-West Realty Associates L.P.,
Cali So. West Realty Associates L.P., Cali WP
Realty Associates L.P. and Teachers Insurance
and Annuity Association of America, dated as of
January 31, 1997 (including certain Exhibits).
EXHIBIT 10.59 to FORM 8-K
<PAGE>
CONTRIBUTION AND EXCHANGE AGREEMENT
between
ROBERT MARTIN COMPANY, LLC
ROBERT MARTIN-EASTVIEW NORTH COMPANY, L.P.
and
CALI REALTY, L.P.
CALI REALTY CORPORATION
Date: January 24, 1997
<PAGE>
TABLE OF CONTENTS
INDEX OF DEFINED TERMS...................................................
INDEX OF SCHEDULES AND EXHIBITS..........................................
1. SUBJECT OF CONVEYANCE...........................................
2. PAYMENT TERMS; RESTRUCTURE OF DEBT; UNITS.......................
3. INSPECTION PERIOD; CRLP'S RIGHT OF TERMINATION
AND REJECTION PRIOR TO CLOSING..................................
4. TITLE; MATTERS TO WHICH THIS SALE IS SUBJECT....................
5. REPRESENTATIONS AND WARRANTIES OF RM............................
6. REPRESENTATIONS AND WARRANTIES OF CALI
AND CRLP........................................................
7. COVENANTS OF RM.................................................
8. OPTION PROPERTIES...............................................
9. ESTOPPEL CERTIFICATES...........................................
10. CLOSING.........................................................
11. ADJUSTMENTS.....................................................
12. CONDITIONS PRECEDENT TO CLOSING.................................
13. LEASING COMMISSIONS AND TENANT IMPROVEMENT OBLIGATIONS .........
14. ASSIGNMENT......................................................
15. BROKER..........................................................
16. CASUALTY LOSS...................................................
17. CONDEMNATION....................................................
18. TRANSFER RESTRICTIONS; RIGHT OF FIRST REFUSAL...................
i
<PAGE>
19. LIMITED GUARANTY OF RM..........................................
20. TAX MATTERS.....................................................
21. PUBLICATION.....................................................
22. REMEDIES........................................................
23. EMPLOYEE MATTERS................................................
24. NOTICE..........................................................
25. ACCOUNTING DISPUTE RESOLUTION...................................
26. RETAINED PROPERTIES AND NOMINEE PROPERTIES......................
27. RESTRICTIONS ON SALE OF THE PROPERTY............................
28. SPECIAL ENVIRONMENTAL MATTERS...................................
29. MISCELLANEOUS...................................................
ii
<PAGE>
INDEX OF DEFINED TERMS
Defined Term Section
------------ -------
1. 1997 Options...............................ss.29.11
2. 1998 Options...............................ss.29.11
3. 200........................................ss.3.3
4. Accountant.................................ss.25
5. Act........................................ss.5.2
6. Additional Rents...........................ss.11.3
7. Aggregate Break Point......................ss.2.2(b)
8. Agreement..................................Preface
9. Allocated Debt.............................ss.2.3
10. Allocated Property Value...................ss.2.3
11. Annual Break Point.........................ss.2.2(b)
12. Associations...............................ss.7.5
13. B. Berger..................................ss.2.2(d)
14. Board......................................ss.6.1(q)
15. Books and Records..........................ss.1(g)
16. Break-up Fee...............................ss.22.1
17. Building...................................ss.1(a)
18. Calculation Period.........................ss.2.2(a)
19. Cali.......................................Preface
20. Cali Debt Amount...........................ss.19.1
21. Cali Group.................................ss.19.1
22. Cash Payment...............................ss.2.1
23. Casualty...................................ss.16.2
24. Casualty Notice............................ss.16.2
25. CERCLA.....................................ss.5.1(y)(x)(A)
26. Closing....................................ss.10.1
27. Closing Date...............................ss.10.1
28. Code.......................................ss.5.1(w)(iii)
29. Common Stock...............................ss.2.2(f)
30. Competitive Use............................ss.26.4
31. Conn. Development Site.....................ss.26.7(d)
32. Contaminants .............................ss.5.1(y)(x)(A)
33. CRLP.......................................Preface
34. Declarant..................................ss.7.5
35. Declarations...............................ss.7.5
iii
<PAGE>
36. Deeds......................................ss.10.2(a)
37. Development Limitations....................ss.26.1
38. Development Sites..........................ss.26.1
39. Development Standards......................ss.26.2
40. Discharge..................................ss.5.1(y)(x)(B)
41. Disposition Securities.....................ss.18.2
42. Disposition Notice.........................ss.18.2
43. Earnout Period.............................ss.2.2(a)
44. Environmental Documents....................ss.5.1(y)(x)(C)
45. Environmental Escrowee.....................ss.28.1
46. Environmental Laws.........................ss.5.1(y)(x)(D)
47. Escrowee...................................ss.28.1
48. ERISA......................................ss.5.1(w)(ii)
49. Estoppel Certificates......................ss.9.1
50. Exchange Act...............................ss.5.2(b)
51. Excluded Properties........................ss.5.1(r)
52. Exercise Notice............................ss.18.3
53. First American.............................ss.4.2
54. GAAP.......................................ss.5.1(v)
55. Governmental Authorities...................ss.5.1(k)
56. Ground Lessees.............................ss.1(a)
57. Ground Leases..............................ss.1(a)
58. Improvements...............................ss.1(a)
59. Inspection Period..........................ss.3.1
60. Insurance Policies.........................ss.16.1
61. Intangible Property........................ss.1(f)
62. Jones......................................ss.2.2(d)
63. Land.......................................ss.1(a)
64. Leases.....................................ss.1(d)
65. M. Berger..................................ss.5.1(r)
66. Material Taking............................ss.17
67. Mortgagors.................................ss.2
68. New Cali Employees.........................ss.12.1(c)
69. Nominee Properties.........................ss.26.1
70. Notice Period..............................ss.18.3
71. Offering Notice............................ss.27.5
72. Omnibus Agreement..........................ss.10.2(f)
73. OP Agreement...............................ss.5.2(a)
74. Option Properties..........................ss.3.3
75. Option Loan................................ss.8.1
iv
<PAGE>
76. Option Loan Origination Fee................ss.8.2
77. Option Mortgage............................ss.8.1
78. Other Debt Amounts.........................ss.19.2
79. Other Groups...............................ss.19.2
80. Parking Agreement .........................ss.7.9
81. Parking License............................ss.7.9
82. PCBs.......................................ss.5.1(y)(vi)
83. Permanent Certificates.....................ss.2.2(e)
84. Permits and Licenses.......................ss.1(f)
85. Permits....................................ss.5.1(y)(vii)
86. Permitted Designees........................ss.27.1
87. Permitted Transferees......................ss.18.1
88. Permitted Encumbrances.....................ss.4.1
89. Permitted Assignee.........................ss.14.1
90. Personal Property..........................ss.1(c)
91. Personal Option Guaranty...................ss.8.1
92. Phase I Reports............................ss.3.3
93. Phase II Reports...........................ss.3.3
94. Preferred Stock............................ss.6.1(l)(i)
95. Property Financials........................ss.5.1(v)
96. Property...................................ss.1(h)
97. Property Repairs...........................ss.7.7
98. Proposed Disposition.......................ss.18.2
99. Purchase Option............................ss.18.3
100. Purchaser..................................ss.18.2
101. Put-Call Agreement.........................ss.8.3
102. Real Property..............................ss.1(b)
103. Recapture Certificates.....................ss.2.2(e)
104. Reconciliation Period......................ss.2.2(d)
105. Reduction Year.............................ss.2.2(b)
106. REIT.......................................ss.6.1(m)(i)
107. Rent Roll..................................ss.5.1(e)
108. Reserve....................................ss.11.2
109. Restricted Period..........................ss.27.1
110. Retained Properties........................ss.26.1
111. RM Group...................................ss.5.1(r)
112. RM 401(K) Plan.............................ss.5.1(w)(ii)
113. RM Welfare Plans...........................ss.5.1(w)(ii)
114. RM Debt Amount.............................ss.11.2
115. RM Vacation Time...........................ss.23.5
v
<PAGE>
116. RMAP.......................................ss.7.9
117. RM Plans...................................ss.5.1(w)(ii)
118. RM.........................................Preface
119. RM Unit Group..............................ss.19.1
120. RM Units...................................ss.2.2(a)
121. RMC LLC....................................Preface
122. RMEMC......................................Preface
123. SEC Documents..............................ss.5.2(b)
124. Security Deposit...........................ss.1(d)
125. Seller.....................................ss.18.2
126. Service Contracts..........................ss.1(f)
127. Skyline....................................ss.3.3
128. Stock Options..............................ss.28.11
129. Stock Option Plan..........................ss.10.3(c)
130. Subsidiaries...............................ss.6.1(f)
131. Suspect Properties.........................ss.28.1
132. Taxes......................................ss.20.4
133. Teachers...................................ss.2
134. Teachers Mortgagee.........................ss.2.1
135. Teachers Debt..............................ss.2.1
136. Teachers Mortgage..........................ss.2.1
137. Tenants....................................ss.4.1(b)
138. Third Party Management Agreements..........ss.5.1(q)
139. Third Party Management Fees................ss.2.2(a)
140. Title Documents............................ss.4.2
141. Title Commitments..........................ss.4.2
142. Title Policy...............................ss.4.3
143. Title Company..............................ss.4.2
144. Tradenames.................................ss.1(e)
145. Transfer...................................ss.5.2(a)
146. Transferred................................ss.18.1
147. Underlying Shares..........................ss.18.1
148. Unit Holders...............................ss.2.1
149. Units......................................ss.2.2(a)
150. Warrant Transferees........................ss.10.3(c)
151. Warrants...................................ss.12.1(h)
152. Weinberg...................................ss.5.1(r)
153. WFC........................................ss.7.9
154. YIDA.......................................ss.5.1
vi
<PAGE>
SCHEDULES
Schedule 1.1(a) Property Addresses, Block and Lot Numbers
Schedule 1.1(b) Ground Leases
Schedule 1.1(c)-1 Excluded Personal Property
Schedule 1.1(c)-2 Excluded Artwork
Schedule 1.1(e) Tradenames
Schedule 2.2(b)-1 Properties Generating Third Party Management Fees of a
Nature Different from the RealProperty
Schedule 2.2(b)-2 Third Party Management Agreements with RM Affiliates
Schedule 2.2(c)-1 Managed Properties without Existing Management Agreements
Schedule 2.3 Allocated Property Value
Schedule 4.1(c) Restrictions, Covenants and Easements
Schedule 4.1(e) Surveys of Real Property
Schedule 5.1(d)-1 Leases as of December 6, 1996
Schedule 5.1(d)-2 Leases from December 6, 1996 to Date
Schedule 5.1(d)-3 Leased and Vacant Net Rentable Area
Schedule 5.1(d)-4 New Leases and Renewals Out for Signature
Schedule 5.1(e)-1 Rent Roll as of January 15, 1997
Schedule 5.1(f) Tenants Work
Schedule 5.1(g) Contracts Schedule 5.1(h) RM Litigation, Disputes, etc.
Schedule 5.1(i) Proceedings related to the Real Property
Schedule 5.1(j) Engineering Reports
Schedule 5.1(k) Violations affecting the Property
Schedule 5.1(l) Personnel
Schedule 5.1(m) Leasing Commission Obligations
Schedule 5.1(o) Encumbered Personal Property
Schedule 5.1(q) Third Party Management Agreements
Schedule 5.1(r) Excluded Commercial Properties
Schedule 5.1(t) Storage Tanks or Vessels
Schedule 5.1(v) Year-End Adjustments
Schedule 5.1(w)(i) All Existing RM Plans
Schedule 5.1(w)(ii) RM Plans
Schedule 5.1(x) Insurance Policies
Schedule 5.1(y)(ii) Environmental Discharges
Schedule 5.1(y)(iv) Storage Tanks and Vessels
Schedule 5.1(y)(v) Asbestos
Schedule 5.1(y)(vi) PCB Items
Schedule 5.1(y)(vii) Missing Permits
Schedule 5.1(z) Tax Audits
Schedule 5.1(bb) Basis of Property
Schedule 5.4(b) Net Worth Statement
Schedule 6.1(i) Cali Subsidiaries, Partnerships and Trusts
Schedule 6.1(j) Materially Adverse Business Transactions
vii
<PAGE>
Schedule 6.1(k) Material Liabilities and Obligations
Schedule 6.1(l)(iii) Conversion/Exchange Right re: Warrants, Options and
Convertible Securities
Schedule 6.1(m)(ii) Cali Tax Proceedings
Schedule 6.1(m)(iv) Individual Owners of Cali Interests in Excess of 9.8%
Schedule 6.1(q) Cali Board Committees
Schedule 6.1(r) Agreements with Certain Cali Executives
Schedule 6.1(s) Agreements regarding Sale or Voting of Units or
Common Stock
Schedule 7.2 Property Charts and Tables
Schedule 7.11 Personal Property to be Released of Liens
Schedule 8.1 Permitted Encumbrances on Options Properties
Schedule 12.1(c)(i) New Cali Employees
Schedule 12.1(c)(ii) General and Administrative Expense Budget
Schedule 12.1(c)(iii) New Cali Employees Not Actively-at-Work
Schedule 14.2 Transferees of the Real Property
Schedule 20.3 Reduction of Property Value Proceedings
Schedule 26.1 Development Sites and Properties
Schedule 26.2(a) Approved Site Plan
Schedule 27.1 Property not Subject to Restricted Period
Schedule 27.4 Built-in Gain
Schedule 28.1 Special Environmental Matters
viii
<PAGE>
EXHIBITS
Exhibit 1.1(c) License Agreement for Artwork
Exhibit 2.2(c)-2 Management Agreement
Exhibit 8.1 Option Loan Documents
Exhibit 8.3 Put-Call Agreement
Exhibit 10.2(s) Non-Competition Agreement
Exhibit 10.2(t) Employment Agreement
Exhibit 10.2(z) License
Exhibit 10.2(nn) Consent to Transfer of RM Units
Exhibit 10.3(j) Registration Rights Agreement
Exhibit 10.3(k) Amendment to OP Agreement
Exhibit 12.1(h) Warrants
Exhibit 12.2(d) Terms of Teachers Mortgage
Exhibit 26.1 Right of First Offer
Exhibit 26.6 USPS Transaction Description
ix
<PAGE>
CONTRIBUTION AND EXCHANGE AGREEMENT
THIS CONTRIBUTION AND EXCHANGE AGREEMENT (the "Agreement") made this 24th
day of January, 1997 between ROBERT MARTIN COMPANY, LLC ("RMC LLC") a limited
liability company organized under the laws of the State of New York and ROBERT
MARTIN-EASTVIEW NORTH COMPANY, L.P., a New York limited partnership ("RMENC";
together with RMC LLC, collectively "RM"), each having an address at 100
Clearbrook Road, Elmsford, New York 10523 and CALI REALTY, L.P., a Delaware
limited partnership ("CRLP") and CALI REALTY CORPORATION, a Maryland corporation
("Cali"), each having an address at 11 Commerce Drive, Cranford, New Jersey
07016.
RECITALS
A. RM and certain affiliated entities own, develop and manage various
commercial properties located throughout southern New York and Connecticut.
Cali, through CRLP and certain affiliated entities of CRLP, similarly owns,
develops and manages various commercial properties located throughout New Jersey
and the greater New Jersey area.
B. RM, CRLP and Cali have determined that it is in the best interests of
the parties' long term strategic growth to combine their respective properties
and related assets. In order to effectuate this combination, RM has agreed to
contribute certain properties and other assets owned or controlled by RM to
designees of CRLP, to cause certain key executives of RM to become part of the
management of Cali and through RM's existing management structure to continue
(i) to manage and operate the properties being contributed by RM, and (ii) to
provide, on the terms and conditions provided below, management, construction
and leasing services to third parties. RM has also been granted certain rights
with respect to appointing members of the Board of Directors of Cali, which is
the sole general partner of CRLP.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and of other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound hereby, do hereby agree as follows:
1. SUBJECT OF CONVEYANCE.
1.1 In accordance with the terms and conditions of this Agreement and
subject to Cali and CRLP's performance and satisfaction of the conditions,
covenants and obligations contained herein, RM agrees to convey to certain
designees of CRLP the assets set forth in paragraphs (a) through (h) of this
Section 1.1:
(a) that certain real property situate, lying and being in the States
of New York and Connecticut and being more particularly described on Schedule
1.1(a) (the "Land"), which Schedule 1.1(a) sets forth the property addresses and
blocks and lots for each parcel, all
<PAGE>
right, title and interest of the lessees (the "Ground Lessees") in and to the
ground leases (the "Ground Leases") described on Schedule 1.1(b), which Schedule
1.1(b) sets forth the names of each party to each of the Ground Leases, the
dates thereof and any amendments thereto, as well as the name, state of
organization and type of entity of each Ground Lessee, and all of the
improvements located on the Land or the properties which are subject to the
Ground Leases (individually, a "Building" and collectively, the "Improvements");
(b) all rights, privileges, grants and easements appurtenant to RM's
interest in the Land, Improvements and Ground Leases, if any, including without
limitation, all of RM's right, title and interest in and to all land lying in
the bed of any public street, road or alley, all mineral and water rights and
all easements, licenses, covenants and rights-of -way or other appurtenances
used in connection with the beneficial use and enjoyment of the Land,
Improvements and Ground Leases (the Land, Improvements, Ground Leases and all
such rights, privileges, easements, grants and appurtenances are sometimes
referred to herein as the "Real Property");
(c) except as set forth on Schedule 1.1(c)-1 and except for the
artwork set forth on Schedule 1.1(c)-2 (which artwork shall have a value in
excess of $500 per piece and for which RM and CRLP will enter into a license
agreement for nominal rent substantially in the form of Exhibit 1.1(c) annexed
hereto), all personal property, fixtures, equipment, inventory and computer
programming and software owned or licensed by RM and located on any of the Real
Property or used at any of the management and corporate offices of RM (the
"Personal Property");
(d) all leases and other agreements with respect to the use and
occupancy of the Real Property, together with all amendments and modifications
thereto and any guaranties provided thereunder (the "Leases"), and rents,
additional rents, reimbursements, profits, income, receipts and the amount
deposited (the "Security Deposit") under any Lease in the nature of security for
the performance of the Tenant's obligations under such Lease;
(e) CRLP and its designees shall have the sole and exclusive right to
the tradenames "Robert Martin Company", the initials "RM" and the initials "RM"
with any number, other name or letter of the alphabet other than "C", and any
trademark applicable thereto, and/or any name by which any of the Real Property
is commonly known, and all goodwill, if any, related to said names
(collectively, the "Tradenames"); provided, however, that the Tradenames shall
not include, and RM and its designees shall continue to have the sole and
exclusive right to use, the initials and names set forth in Schedule 1.1(e)
annexed hereto and the initials "RMC" with any other letter of the alphabet,
number or other name, as more particularly set forth in a Tradenames Assignment
Agreement substantially in the form of Exhibit 10.2(r) annexed hereto;
(f) all permits, licenses, guaranties, approvals, certificates and
warranties relating to the Real Property and the Personal Property
(collectively, the "Permits and Licenses"), all of RM's right, title and
interest in and to those contracts and agreements for the servicing, maintenance
and operation of the Real Property ("Service Contracts") and telephone numbers
in use at any of the Real Property or the management offices and corporate
headquarters
2
<PAGE>
of RM (together with the Permits and Licenses and the Service Contracts, the
"Intangible Property");
(g) all books, records, promotional material, tenant data, leasing
material and forms, past and current rent rolls, files, statements, tax returns,
market studies, keys, plans, specifications, reports, tests and other materials
of any kind owned by or in the possession
of RM which are or may be used by RM in the use and operation of the Real
Property or Personal Property (collectively, the "Books and Records"); and
(h) all other rights, privileges and appurtenances owned by RM, if
any, and in any way related to the rights and interests described above in this
Section.
The Real Property, the Personal Property, the Leases, the Tradenames,
the Intangible Property, the Books and Records and the other property interests
being conveyed hereunder are hereinafter collectively referred to as the
"Property".
1.2 For all purposes herein, unless the context clearly dictates otherwise,
any reference herein to RM shall be deemed to be a reference to any entity which
is to convey any of the Property hereunder to CRLP or its designees.
1.3 CRLP agrees that (a) RM shall have access to the Books and Records,
after Closing, for inspection or duplication, at the offices of CRLP at
reasonable times and upon reasonable notice and (b) through the eighth (8th)
anniversary of the Closing Date, before any of the Books and Records are
destroyed or disposed of by CRLP, CRLP shall offer to return such Books and
Records to RM, at RM's cost and expense, and RM shall respond to such offer
within ten (10) business days of receipt of same. This obligation of CRLP shall
not require CRLP to maintain any computer equipment or programs in order to
access or retrieve any of said Books and Records.
2. PAYMENT TERMS; RESTRUCTURE OF DEBT; UNITS.
2.1 At Closing, and upon satisfaction of the terms and conditions
provided herein, RM agrees to contribute the Property to CRLP or its Permitted
Assignees and CRLP agrees (a) to accept the Property, (b) to enter into an
assumption of that certain mortgage (the "Teachers Mortgage") encumbering the
property set forth on Schedule 2.3-b granted to Teachers Insurance and Annuity
Association of America ("Teachers"), which Teacher's Mortgage, as restructured,
is to have an outstanding principal balance immediately following the Closing
(the "Teachers Debt") of at least One Hundred Eighty-Five Million Two Hundred
Fifty Thousand ($185,250,000) Dollars, which restructuring is to be in
accordance with Section 12.2(d) hereof, (c) to pay to RM or its designee (the
"Cash Payment") an amount derived by subtracting from $395,700,000 the Teachers
Debt, and (d) to issue the RM Units to RM or such persons as the record owners
of the Property shall direct in writing at the Closing (the "Unit Holders");
provided, however, that RMC LLC shall be issued and shall hold, in accordance
with the provisions of Section 5.4(b), Eight Hundred Thousand (800,000) Units.
3
<PAGE>
2.2 (a) Simultaneous with CRLP accepting the Property and assuming the
Teachers Mortgage, CRLP agrees to issue units of limited partnership interests
in CRLP ("Units") in the amount of One Million Four Hundred-One Thousand Two
Hundred Twenty-Five (1,401,225) ( the "RM Units"). The number of RM Units is
based, in part, upon an estimate of the fees (the "Third Party Management Fees")
anticipated to be paid to CRLP, Cali or their Subsidiaries as a result of the
leasing and management operations presently being conducted by RM on account of
generating Third Party Management Fees. The Third Party Management Fees are and
will include, without limitation, fees for construction management, property
management and leasing, for the period ending 36 months after the Closing Date
(the "Earnout Period"); provided, however, (x) all or any portion of the
management or other fees, or any commissions, received by CRLP, Cali or their
Subsidiaries which are to be paid over to others shall not be included in the
Third Party Management Fees and (y) with respect to fees paid on account of
construction and tenant improvements, only net construction fees collected after
payment of costs of supplies and materials, shall be included in the Third Party
Management Fees. Third Party Management Fees shall be calculated for each of the
consecutive three 12-month periods thereof (each a "Calculation Period") and for
the entire Earnout Period, as more particularly described in Section 2.2(d)
below. The number of RM Units to be retained by the Unit Holders is subject to
reduction effective as of the end of the Earnout Period, as set forth in this
Section 2.2.
(b) In the event that the Third Party Management Fees paid to CRLP,
Cali or their Subsidiaries in any Calculation Period are less than One Million
Two Hundred Fifty Thousand ($1,250,000) Dollars (the "Annual Break Point"; any
Calculation Period in which the Third Party Management Fees paid to CRLP, Cali
or their Subsidiaries are less than the Annual Break Point is herein defined as
a "Reduction Year"), then the RM Units to be retained following the Earnout
Period shall be reduced by an amount equal to .0933 Units (which represents the
quotient of .28 divided by 3) for each dollar in a Reduction Year by which the
Third Party Management Fees paid to CRLP, Cali or their Subsidiaries are less
than the Annual Break Point, rounded to the nearest whole Unit. For purposes of
calculating the Third Party Management Fees for the entire Earnout Period, in
the event of a reduction pursuant to the preceding sentence, the Third Party
Management Fees for any Reduction Year shall be deemed to be One Million Two
Hundred Fifty Thousand ($1,250,000) Dollars. In the event that the Third Party
Management Fees paid to CRLP, Cali or their Subsidiaries (including any amounts
deemed paid pursuant to the preceding sentence) during the entire Earnout Period
are less than Five Million Five Hundred Eighty Thousand ($5,580,000) Dollars
(the "Aggregate Break Point"), then the RM Units to be retained following the
Earnout Period shall be reduced by an amount equal to .28 Units for each three
dollars by which the Third Party Management Fees paid to CRLP, Cali or their
Subsidiaries are less than the Aggregate Break Point, rounded to the nearest
whole Unit. An example of an application of this Section 2.2(b) is set forth
below in Section 2.2(i). In no event shall the number of RM Units to be retained
be reduced by more than 221,625 Units, nor shall there be any additional Units
issued if the Third Party Management Fees exceed either the Annual Break Point
or the Aggregate Break Point. RM acknowledges and agrees that (i) only (x) those
Third Party Management Fees generated by properties similar in nature to the
properties which are being contributed by RM hereunder or the properties which
are set forth in Schedule 2.2(b)-1 annexed hereto and (y) commissions payable to
CRLP, Cali or
4
<PAGE>
their Subsidiaries upon the sale of commercial real estate where the RM Group is
the procuring cause, shall be included in calculating the Annual Break Point and
Aggregate Break Point; (ii) the agreements pursuant to which said fees are to be
paid, including agreements with entities affiliated with RM and the RM Group,
shall be on commercially reasonable terms and conditions; (iii) in generating
Third Party Management Fees, RM shall not exceed the portion of general and
administrative expenses which RM historically dedicated to generating third
party management fees; (iv) the only existing agreements for generating Third
Party Management Fees are set forth on Schedule 2.2(b)-2; and (v) RM shall cause
those persons affiliated with RM who also have an interest in the entities
owning properties which are paying Third Party Management Fees to use their best
efforts (subject to any fiduciary obligations) to cause such entities to
continue to appoint CRLP as the leasing agent and manager of said properties.
(c) At Closing, Cali agrees to enter into management agreements for
the properties set forth on Schedule 2.2(c)-1 in substantially the form of
Exhibit 2.2(c)-2 annexed hereto. Third Party Management Fees payable as a result
of management and leasing activities for the Option Properties shall be
applicable to the Annual Break Point and the Aggregate Break Point. In the event
that CRLP acquires either or both of the Option Properties, the Annual Break
Point shall be reduced proportionately for the balance of the current
Calculation Period and for each subsequent Calculation Period based upon the
amount of Third Party Management Fees generated by the Option Property or
Properties so acquired for the twelve-month period immediately preceding said
acquisition, and the Aggregate Break Point shall be proportionately reduced as
well. In the event that either or both of the Option Properties are acquired
within one year of the Closing, the reduction in said Break Points shall be
calculated by determining the amount of Third Party Management Fees generated by
the Option Property or Properties so acquired for the period commencing at
Closing through acquisition of said Option Property or Properties and
annualizing said amount.
(d) Within ninety (90) days following the end of the Earnout Period
and each Calculation Period, CRLP shall provide Brad W. Berger ("B. Berger") and
Timothy M. Jones ("Jones") and such other persons as are designated by RM with a
schedule of all calculations made with respect to the Third Party Management
Fees. CRLP shall make available to B. Berger and Jones and such other persons as
are designated by RM such information as is necessary for B. Berger and Jones to
confirm the amount of the Third Party Management Fees. In the event that the
amount of the Third Party Management Fees as calculated by CRLP shall differ
from the amount of said fees as calculated by B. Berger and Jones and such other
persons as are designated by RM, which difference is not reconcilable by the end
of the ninety (90) day period following the expiration of the Earnout Period
(the "Reconciliation Period"), then the parties shall proceed as provided in
Section 25.
(e) At Closing, CRLP shall issue to RM and/or the Unit Holders
certificates representing the RM Units as follows: (i) certificates representing
in the aggregate 1,179,600 Units (the "Permanent Certificates"), which Permanent
Certificates shall contain the legend set forth in Section 5.4(a)(i); and (ii)
certificates representing 221,625 Units (the "Recapture Certificates"), which
Recapture Certificates shall contain the legends set forth in Sections 5.4(a)(i)
and 5.4(a)(ii). Upon the expiration of the Reconciliation Period (or upon
5
<PAGE>
expiration of the dispute resolution period set forth in Section 25, if
applicable), RM and/or the Unit Holders shall return the Recapture Certificates
to CRLP and CRLP shall re-issue to RM and/or the Unit Holders, within five (5)
days after receipt of the Recapture Certificates, new certificates in the form
of the Permanent Certificates representing in the aggregate 221,625 Units less
the number of RM Units, if any, reduced pursuant to Section 2.2.
(f) All rights and benefits incidental to the ownership of the RM
Units, including, but not limited to, the right to receive distributions, voting
rights and the right to exchange the RM Units for shares of common stock of Cali
("Common Stock"), shall accrue for the benefit of RM and/or the Unit Holders
commencing on the Closing Date and shall automatically terminate with respect to
the RM Units, if any, reduced pursuant to Section 2.2(b).
(g) If, during the Earnout Period, Cali or CRLP shall instruct RM in
writing that Third Party Management Fees are not to be earned or collected (or
to be collected in an amount less than what RM could otherwise receive for such
service) and such prohibition results in Third Party Management Fees in an
amount less than the Annual Break Point or the Aggregate Break Point being paid
to or collected by CRLP, Cali or their Subsidiaries, then the Annual Break Point
and the Aggregate Break Point shall be deemed to be reduced by the amounts
forfeited by RM as a result of such notice from Cali or CRLP.
(h) With respect to the first Partnership Record Date (as defined in
the OP Agreement), on or after the Closing, RM and the Unit Holders shall
receive distributions payable with respect to the RM Units on a pro-rata basis
based upon the number of days during the calendar quarter preceding such
Partnership Record Date that the Unit Holders held RM Units.
(i) For purposes of an example of the application of Section 2.2(b)
only, assume that Third Party Management Fees for each of the three Calculation
Periods are as follows: (i) One Million ($1,000,000) Dollars in the first
Calculation Period, (ii) One Million Two Hundred and Fifty Thousand ($1,250,000)
Dollars in the second Calculation Period, and (iii) Two Million ($2,000,000)
Dollars in the third Calculation Period. Because the first Calculation Period is
a Reduction Year, the RM Units to be retained shall be reduced by an amount
equal to .0933 multiplied by 250,000 or 23,325 Units. For purposes of
calculating the Third Party Management Fees for the entire Earnout Period, the
Third Party Management Fees for the first Calculation Period shall be deemed to
be One Million Two Hundred and Fifty Thousand ($1,250,000) Dollars. Accordingly,
the aggregate amount of Third Party Management Fees for the entire Earnout
Period shall be deemed to be Four Million Five Hundred Thousand ($4,500,000)
Dollars. The number of RM Units to be retained shall be further reduced by the
amount of 5,580,000 less 4,500,000, divided by 3 and multiplied by .28 which is
equal to 100,800 Units. At the end of the Earnout Period, the amount of RM Units
to be retained shall be reduced by an amount equal to the sum of (i) 100,800,
representing the reduction for the entire Earnout Period, and (ii) 23,325,
representing the reduction for the First Calculation Period, or 124,125 Units.
6
<PAGE>
2.3 The purchase price of the Property is Four Hundred Thirty-Nine
Million Four Hundred Eighty-Eight Thousand Two Hundred Eighty-One ($439,488,281)
Dollars which is to be allocated among the Real Property as set forth on
Schedule 2.3 (the "Allocated Property Value").
3. INSPECTION PERIOD; CRLP'S RIGHT OF TERMINATION AND REJECTION PRIOR TO
CLOSING
3.1 Through the period ending at 5:00 p.m. on Monday, January 27, 1997
(the "Inspection Period"), time being of the essence as to such date, and
thereafter, and subject further to Section 28 hereof, CRLP, at its sole cost and
expense, may perform, or cause to be performed, tests, investigations and
studies of or related to the Property and the Option Properties including, but
not limited to, soil tests and borings, ground water tests and investigations,
percolator tests, surveys, architectural, engineering, subdivision,
environmental, access, financial, market analysis, development and economic
feasibility studies and other tests, investigations or studies as CRLP, in its
sole discretion, determines is necessary or desirable in connection with the
Property and the Option Properties and may inspect the physical (including
environmental) and financial condition of the Property and the Option
Properties, including but not limited to the Ground Leases, Leases, Service
Contracts, contracts pursuant to which the Third Party Management Fees are
payable, copies of RM's tax returns and the Property Financials as of and for
the years ending December 31, 1993, 1994 and 1995 and for the period of January
1, 1996 through September 30, 1996, certified by RM, engineering and
environmental reports, development approval agreements, permits and approvals,
which inspection shall be satisfactory to CRLP in its sole discretion. RM agrees
to cooperate with CRLP in such review and inspection and to the extent not yet
delivered, shall deliver said documents and information to CRLP promptly. CRLP
may terminate this Agreement for any reason, by written notice given to RM prior
to the expiration of the Inspection Period. Notwithstanding the provisions of
Section 24 of this Agreement, for the purposes of this Section 3 only, a notice
of termination executed by counsel for CRLP and telecopied to RM and its counsel
no later than 5:00 p.m. on the date of expiration of the Inspection Period shall
be deemed effective for purposes of terminating this Agreement. In the event
CRLP terminates this Agreement during the Inspection Period, this Agreement
shall be null and void and the parties hereto shall be relieved of all further
obligations hereunder except as otherwise provided herein. In the event CRLP
does not terminate this Agreement by the end of the Inspection Period, then CRLP
shall be deemed to have elected not to terminate this Agreement.
3.2 During the Inspection Period and thereafter, CRLP, its agents and
contractors, shall have reasonable access to the Property and the Option
Properties and other information pertaining thereto in the possession or within
the control of RM for the purpose of performing such studies, tests, borings,
investigations and inspections for the purposes described in Section 3.1 above.
Any inspection of the Real Property shall be performed in accordance with the
Access Agreement previously entered into by CRLP and RM. Such right of
inspection and the exercise of such right shall not constitute a waiver by CRLP
of the breach of any representation or warranty of RM which might, or should,
have been disclosed by such inspection. RM shall cooperate with CRLP in
facilitating its due diligence inquiry and shall
7
<PAGE>
obtain, and use commercially reasonable efforts to obtain, any consents that may
be necessary in order for CRLP to perform same. In addition, RM shall notify
CRLP of any dangerous conditions on the Real Property and the Option Properties
of which RM has knowledge, including, without limitation, conditions which due
to the nature of the borings, studies, investigations, inspections or testing to
be performed by or on behalf of CRLP may pose a dangerous condition to CRLP or
CRLP's agents and contractors.
3.3 RM and CRLP have agreed to share equally the costs of certain
Phase I environmental studies (the "Phase I Reports") affecting one or more of
the Real Property and the properties commonly known as 7 Skyline Drive, Mount
Pleasant, New York ("Skyline") and 200 Corporate Boulevard South, Yonkers, New
York ("200"; together with Skyline, the "Option Properties"), provided, however,
that RM's maximum obligation for the cost of said Phase I Reports shall be
$42,250. RM shall bear the costs and expenses relating to the Phase II
environmental studies (the "Phase II Reports") to be prepared for the Real
Property up to a maximum amount of $235,200 and any additional costs and
expenses relating to the Phase II Reports shall be borne by CRLP, except that
the costs and expenses associated with the special environmental matters set
forth in Section 28 hereof are more particularly provided for in said Section.
CRLP shall provide RM with copies of all Phase II environmental studies.
3.4 Notwithstanding the expiration of the Inspection Period, CRLP
shall continue to have the rights, and upon exercise of same shall be subject to
the obligations, of this Section 3, other than the right to terminate this
Agreement.
3.5 During the Inspection Period and thereafter, Cali and CRLP shall
provide to RM and its agents and advisors reasonable access to Cali's and CRLP's
books and records and Cali and CRLP shall provide RM such other reasonable
information including, without limitation, all Securities and Exchange
Commission filings of CRLP and Cali and federal, state, and local income,
excise, franchise, and all other tax filings, in order to permit RM, at its sole
cost and expense, to perform reasonable due diligence on such parties. Nothing
arising from RM's inspection or due diligence as permitted by this Section shall
give rise to a right of RM to terminate this Agreement, unless said discovered
matter results in a breach of a representation, warranty, covenant or agreement
of Cali or CRLP as set forth herein, which pursuant to this Agreement permits RM
to so terminate.
4. TITLE; MATTERS TO WHICH THIS SALE IS SUBJECT.
4.1 The Property is to be contributed to CRLP subject to the following
(collectively, the "Permitted Encumbrances"):
(a) The liens of real estate taxes, personal property taxes,
water charges, and sewer charges provided same are not due and payable, but
subject to adjustment as provided herein;
8
<PAGE>
(b) the rights of those parties occupying space at any of the
Improvements (collectively, "Tenants"), as tenants only;
(c) those restrictions, covenants, agreements, easements, matters
and things affecting title to the Real Property as of the date hereof and more
particularly described in Schedule 4.1(c) annexed hereto and by this reference
made a part hereof and such other easements, covenants and restrictions which
are entered into with the consent of CRLP after the date hereof, such consent
not to be unreasonably withheld, delayed or conditioned and any additional items
not objected to by CRLP in accordance with Section 4.2 below;
(d) any and all laws, statutes, ordinances, codes, rules,
regulations, requirements, or executive mandates affecting the Real Property
including, without limitation, those related to zoning and land use, as of the
date hereof;
(e) the state of facts shown on the surveys described on Schedule
4.1(e) for each of the individual properties comprising the Real Property,
Skyline and 200, and any other state of facts which a recent and accurate survey
of the Real Property would actually show, provided same do not impair the use of
the Real Property as it is currently being used and do not render title
uninsurable at standard rates;
(f) the Service Contracts;
(g) any installment not yet due and payable of assessments
imposed after the date hereof and affecting the Real Property or any portion
thereof;
(h) any utility company rights, easements and franchises to
maintain poles, lines, wires, cables, pipes, boxes and other fixtures and
facilities in, over, under or upon the Real Property, provided same do not
impair in other than a de minimus manner the present use of the Real Property;
(i) prohibition against the interference with the natural and
unobstructed flow of any applicable brook crossing the Real Property or other
riparian rights, provided same does not impair the use of the Real Property as
it is currently being used and do not render title uninsurable at standard
rates;
(j) such matters as the Title Company shall be willing, without
special premium, to omit as exceptions to coverage including minor variations
between record lines and tax lot lines; and
(k) the lien of the Teachers Mortgage on those parcels of Real
Property encumbered by the Teachers Mortgage as of the date hereof (but on the
terms and conditions of this Agreement).
4.2 CRLP has, prior to the date hereof, directed First American Title
Insurance Company ("First American") to prepare title insurance searches and
commitments
9
<PAGE>
for owner's title insurance policies for each of the Real Property (the "Title
Commitments"). CRLP shall cause First American, or such other or additional
title insurance companies as may be selected by CRLP (collectively, the "Title
Company"), to deliver to RM and its counsel copies of the Title Commitments and
the documents describing the title exceptions shown on the Title Commitments
(collectively, the "Title Documents") which have been delivered to CRLP and its
counsel as of the date hereof, within three (3) business days after the
execution and delivery of this Agreement by all of the parties hereto, and to
deliver the remaining Title Documents to RM and its counsel promptly upon their
delivery to CRLP and its counsel. Within five (5) business days after delivery
to RM of each Title Commitment and Title Document, RM shall deliver to CRLP and
its counsel RM's proposed list of additional items to be included as Permitted
Encumbrances and CRLP shall have the right to review such list. All matters
shown on said list which are not objected to by CRLP by delivery of written
notice to RM within (5) business days of receipt of same shall be conclusively
deemed to be acceptable to CRLP and such items shall be deemed to be Permitted
Encumbrances, provided that RM's notice specifically states that all matters not
objected to by CRLP within five (5) business days of receipt thereof shall be
deemed to be acceptable to CRLP. If any defects, objections or exceptions in the
title to the Real Property appear in the Title Commitments (other than the
Permitted Encumbrances) which CRLP is not required to accept under the terms of
this Agreement, RM may, at its election, undertake to eliminate such
unacceptable defects, objections or exceptions, it being agreed that other than
(i) judgments against RM, (ii) mortgages or other liens which can be satisfied
by payment of a liquidated amount, other than the Teachers Mortgage, (iii)
defects, objections or exceptions which can be removed by payments not to exceed
$500,000 in the aggregate and (iv) a payment to Teachers in order to cause
Teachers to consent to the assumption of the Teachers Mortgage, and except as
provided below, RM shall have no obligation to incur any expense in connection
with curing such defects, objections or exceptions. RM, in its discretion, may
adjourn the Closing for up to sixty (60) days in order to eliminate unacceptable
defects, objections or exceptions. Other than the items described in (i)-(iv) of
the preceding sentence, which RM agrees to cure at its sole cost and expense
without regard to the cost thereof (other than as expressly set forth in items
(iii) and (iv)), if, after complying with the foregoing requirements, RM 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, CRLP shall elect either (w) to terminate this Agreement by notice
given to RM, in which event the provisions of Section 22.2 shall apply, or (x)
to accept title subject to such unacceptable defects, objections or exceptions
and receive no credit against or reduction of the consideration to be given
hereunder for the Property. RM agrees and covenants that it shall not
voluntarily place any encumbrances or restrictions to title to any of the Real
Property from and after the date of the first issuance of the Title Commitment
for said Property. From and after the Closing, CRLP agrees that it shall not
unreasonably withhold or delay its approval and execution of such easements for
utilities, water, parking, sewer and ingress and egress encumbering the Real
Property for the benefit of properties owned by RM (or any affiliate thereof)
within close proximity of the Real Property as requested by said owners so long
as (A) any mortgagees or parties-in-interest shall consent to same, (B) CRLP
shall not incur any cost, expense or obligation as a result thereof and (C) to
the extent necessary, any applicable governmental authorities shall have
approved or consented to same. Cali and CRLP agree that
10
<PAGE>
they shall conduct any due diligence with any governmental entities with a view
toward maintaining the confidentiality of the transaction contemplated by this
Agreement.
4.3 It shall be a condition to Closing that RM convey, and that the
Title Company insure, title to each Real Property in the amount of the Allocated
Property Value thereof (at a standard rate for such insurance) in the name of
CRLP or its designees, after delivery of the Deeds or assignments of ground
leases, by a standard 1992 ALTA Owners Policy, with such ALTA endorsements as
are available in each applicable state where the Real Property is located and as
required by CRLP attached, free and clear of all liens, encumbrances and other
matters, other than the Permitted Encumbrances (the "Title Policy"). The Title
Company shall provide affirmative insurance that any (i) Permitted Encumbrances
have not been violated, and that any future violation thereof will not result in
a forfeiture or reversion of title; (ii) CRLP's contemplated use of the Real
Property will not violate the Permitted Encumbrances; and (iii) the exception
for taxes shall apply only to the current taxes not yet due and payable. RM
shall provide such affidavits and undertakings as the Title Company insuring
title to the Real Property may reasonably require and shall cure all other
defects and exceptions other than the Permitted Encumbrances and as required
pursuant to Section 4.2. The words "insurable title" and "insurable" as used in
this Agreement are hereby defined to mean title which is insurable at standard
rates (without special premium) by the Title Company without exception other
than the Permitted Encumbrances, and standard printed policy and survey
exceptions.
4.4 Any unpaid taxes, water charges, sewer rents and assessments,
together with the interest and penalties thereon to a date not less than seven
(7) business days following the Closing Date (in each case subject to any
applicable apportionment), and any mortgages or other liens created by RM, which
RM is obligated to pay and discharge pursuant to the terms of this Agreement,
together with the cost of recording or filing of any instruments necessary to
discharge such liens and such judgments, shall be paid at the Closing by RM. RM
shall deliver to CRLP, on the Closing Date, instruments in recordable form
sufficient to discharge any such mortgages or other liens which RM is obligated
to pay and discharge pursuant to the terms of this Agreement.
4.5 If the Title Commitments disclose judgments, bankruptcies or other
returns against other persons having names the same as or similar to that of RM,
RM, on request, shall deliver to the Title Company affidavits showing that such
judgments, bankruptcies or other returns are not against RM, or any affiliates.
Upon request by CRLP, RM 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.
5. REPRESENTATIONS AND WARRANTIES OF RM.
5.1 In order to induce CRLP and Cali to perform as required hereunder,
RM hereby warrants and represents the following with respect to the Property and
the Option Properties:
11
<PAGE>
(a) RMC LLC is a duly organized and validly existing limited
liability company organized under the laws of the State of New York, is duly
authorized to transact business in the States of New York and Connecticut, has
all requisite power and authority to execute and deliver this Agreement and all
other documents and instruments to be executed and delivered by it hereunder,
and to perform its obligations hereunder and under such other documents and
instruments in order to sell the Property in accordance with the terms and
conditions hereof. All necessary actions of the members of RMC LLC to confer
such power and authority upon the persons executing this Agreement and all
documents which are contemplated by this Agreement on its behalf have been
taken.
(b) RMENC is a duly organized and validly existing limited
partnership organized under the laws of the State of New York, is duly
authorized to transact business in the State of New York, has all requisite
power and authority to execute and deliver this Agreement and all other
documents and instruments to be executed and delivered by it hereunder, and to
perform its obligations hereunder and under such other documents and instruments
in order to sell the Property in accordance with the terms and conditions
hereof. All necessary actions of RMENC to confer such power and authority upon
the persons executing this Agreement and all documents which are contemplated by
this Agreement on its behalf have been taken.
(c) This Agreement, when duly executed and delivered, will be the
legal, valid and binding obligation of RM, enforceable in accordance with the
terms of this Agreement. The performance by RM of its duties and obligations
under this Agreement and the documents and instruments to be executed and
delivered by it hereunder will not conflict with, or result in a breach of, or
default under, any provision of any of the organizational documents of RM or any
agreements, instruments, decrees, judgments, injunctions, orders, writs, laws,
rules or regulations, or any determination or award of any court or arbitrator,
to which RM is a party or by which its assets are or may be bound.
(d) Annexed hereto as Schedule 5.1(d)-1 is a true, complete and
correct schedule of all of the Leases as of December 6, 1996 and annexed hereto
as Schedule 5.1(d)-2 is a true, complete and correct schedule of all of the
Leases executed and delivered from December 6, 1996 through the date hereof.
Annexed hereto as Schedule 1.1(b) is a true, complete and correct schedule of
all of the Ground Leases. The Leases are valid and bona fide obligations of the
landlord and, to RM's knowledge, the tenants thereunder and are in full force
and effect. The Ground Leases are valid and bona fide obligations of the tenant
and, to RM's knowledge, the landlords thereunder and are in full force and
effect. To RM's knowledge, except as set forth on Schedules 5.1(d)-1 and
5.1(d)-2: no defaults remain uncured pursuant to notices of default sent to any
Tenants and no condition exists which, solely with the passage of time or the
giving of notice or both, will become a default; RM has not received any notices
of default under the Leases; the Leases constitute all of the leases, tenancies
or occupancies affecting the Real Property on the date hereof; all Tenants have
commenced occupancy; there are no agreements which confer upon any Tenant or any
other person or entity any rights with respect to acquiring all or a portion of
the Property, nor has any claim been asserted by any Tenant in writing for an
offset to its rent, nor is any Tenant currently asserting, in writing, a
concession,
12
<PAGE>
rebate, allowance or free rent (if any Tenant is asserting any concession,
rebate, allowance or free rent, RM shall not be obligated to set forth the
amount of said claim on Schedules 5.1(d)-1 and 5.1(d)-2). Annexed hereto as
Schedule 5.1(d)-3 is a true, complete and correct schedule of the leased and
vacant net rentable area at each of the Real Property. Annexed hereto as
Schedule 5.1(d)-4 is a true, complete and correct schedule of all new leases and
lease renewals currently out for signature to tenants, which Schedule 5.1(d)-4
sets forth the terms and conditions of such new leases or renewals; true,
complete and correct copies of such new leases and renewals have been provided
to CRLP.
(e) Annexed hereto as Schedule 5.1(e)-1 is a listing (the "Rent
Roll") of the following as of January 15, 1997, which is true, complete and
correct in all material respects for each Building: (i) the name of each Tenant;
(ii) the fixed rent actually being collected; (iii) the expiration date or
status of each Lease (including all rights or options to renew); (iv) the
Security Deposit, if any; (v) whether there is any guaranty of a Tenant's
obligations from a third party, and if so the nature of said guaranty; (vi)
arrangements under which any Tenant is occupying space on the date hereof or
will in the future, occupy such space; (vii) any written notices given by any
Tenant of an intention to vacate space in the future; (viii) the base year(s)
and base year amounts for all items of rent or additional rent billed to each
Tenant on that basis; and (ix) any arrearages of any Tenant beyond thirty (30)
days.
(f) To the knowledge of RM, RM has performed all of the material
obligations and observed all of the covenants required of each landlord under
the terms of the Leases. Except as set forth on Schedule 5.1(f) annexed hereto,
all work, alterations, improvements or installations required to be made for or
on behalf of all Tenants under the Leases have in all respects been carried out,
performed and complied with, and there is no agreement with any Tenant for the
performance of any work to be done in the future other than that which is
required pursuant to its Lease. Except as set forth on Schedule 5.1(f), no work
has been performed at any Building which would require an amendment to the
certificate of occupancy for such Building for which an amendment has not been
obtained, and any and all work performed at the Real Property to the date hereof
and to the Closing Date has been and will be in accordance with the rules, laws
and regulations of all applicable authorities. All undisputed bills and claims
for labor performed and materials furnished to or for the benefit of the
Property arising prior to the Closing Date will be paid in full by RM within
customary time periods, not to exceed forty-five (45) days from the receipt of
an invoice by RM, although RM shall have the right to cause payment of same to
be made from the Reserve established in Section 11.2. To the extent any bills
and claims for labor performed and materials furnished to or for the benefit of
the Real Property prior to the Closing Date are disputed, RM shall commence any
actions related to such bills and claims promptly, such commencement being no
later than forty-five (45) days from the receipt of an invoice by RM, and shall
diligently prosecute same to its conclusion. If such action results in either
(i) a lien on the Real Property which lien remains unbonded for thirty (30)
days, or (ii) any vendor providing unique services or services at a below market
price refusing to service the Real Property, then CRLP shall have the right to
cause payment of same to be made from Reserve established in Section 11.2.
13
<PAGE>
(g) There are no service contracts, equipment leases, union
contracts, employment agreements or other agreements affecting the Property or
the operation thereof, except the Service Contracts and the contracts set forth
on Schedule 5.1(g) annexed hereto. To RM's knowledge, all of the Service
Contracts are and will on the Closing Date be unmodified (except in the ordinary
course of business) and in full force and effect without any material default or
claim of material default by RM. All sums presently due and payable by RM under
the Service Contracts have been fully paid and all sums which become due and
payable between the date hereof and the Closing Date shall be fully paid by RM
within customary time periods, not to exceed forty-five (45) days from the
receipt of an invoice by RM, although RM shall have the right to cause payment
of same to be made from the Reserve established in Section 11.2. There are no
employees of RM or an RM affiliate working at or in connection with the Real
Property pursuant to any of the Service Contracts and contracts set forth on
Schedule 5.1(g).
(h) Except as set forth on Schedule 5.1(h) annexed hereto and
except as covered by insurance, there are no actions, suits, labor disputes,
litigation or proceedings currently pending or, to the knowledge of RM,
threatened against or related to RM (with respect to the Property being sold) or
to all or any part of the Property or the Option Properties, the environmental
condition thereof, or the operation thereof. RM shall be permitted to continue
to prosecute suits set forth on Schedule 5.1(h) and may initiate suits or
actions against former tenants who are no longer in occupancy at any of the Real
Property.
(i) Except as set forth on Schedule 5.1(i) annexed hereto, RM has
received no written notice and has no knowledge of (i) any pending or
contemplated annexation or condemnation proceedings, or private purchase in lieu
thereof, affecting or which may affect the Real Property, or any part thereof,
(ii) any proposed or pending proceeding to change or redefine the zoning
classification of all or any part of the Real Property, (iii) any proposed or
pending special assessments affecting the Real Property or any portion thereof,
(iv) any penalties or interest due with respect to real estate taxes assessed
against the Real Property and (v) any proposed change(s) in any road or grades
with respect to the roads providing a means of ingress and egress to the Real
Property. RM agrees to furnish CRLP with a copy of any such notice received
within two (2) business days after receipt.
(j) RM has provided CRLP with the reports set forth on Schedule
5.1(j) annexed hereto, which constitute all third-party reports in RM's
possession or under its control related to the physical condition of the Real
Property which have been prepared within the last four (4) years.
(k) Except as set forth on Schedule 5.1(k) annexed hereto, RM has
no knowledge of any notices, suits, or judgments relating to any violations
(including environmental) of any laws, ordinances or regulations affecting the
Real Property or the Option Properties, or any violations or conditions that may
give rise thereto, and has no reason to believe that any agency, board, bureau,
commission, department or body of any municipal, county, state or federal
governmental unit, or any subdivision thereof, having, asserting or acquiring
jurisdiction over all or any part of the Real Property or the Option Properties
or the management, operation, use or improvement thereof (collectively, the
"Governmental Authorities")
14
<PAGE>
contemplates the issuance thereof, and there are no outstanding orders,
judgments, injunctions, decrees or writ of any Governmental Authorities against
or involving RM, the Real Property or the Option Properties.
(l) There are no employees of RM or an affiliate of RM working at
or in connection with the Real Property, except as set forth on Schedule 5.1(l).
Said Schedule also sets forth a true and complete list of all employees
presently employed by RM or an affiliate of RM working at the Real Property and
their respective union affiliations (if any), 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).
(m) Annexed hereto as Schedule 5.1(m) is a schedule of all
leasing commission obligations affecting the Property. The respective
obligations of RM and CRLP with respect to said commissions are set forth in
Section 13.
(n) RM has not made a general assignment for the benefit of
creditors, filed any voluntary petition in bankruptcy or suffered the filing of
any involuntary petition by RM's creditors, suffered the appointment of a
receiver to take possession of all, or substantially all, of such RM's assets,
suffered the attachment or other judicial seizure of all, or substantially all,
of such RM'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.
(o) Except as set forth on Schedule 5.1(o), the Personal Property
will on the Closing Date be owned by RM free and clear of any conditional bills
of sale, chattel mortgages, security agreements or financing statements or other
security interests of any kind, other than liens created by CRLP.
(p) Deleted prior to execution.
(q) Annexed hereto as Schedule 5.1(q) is a true, complete and
correct schedule of all agreements generating Third Party Management Fees as of
the date hereof (the "Third Party Management Agreements"). RM has provided CRLP
with true and complete copies of each of the Third Party Management Agreements.
(r) All of the commercial real estate assets and properties
actually controlled, directly or indirectly and legally or beneficially, by RM,
Martin S. Berger ("M. Berger"), Robert F. Weinberg ("Weinberg"), B. Berger and
Jones (RM, M. Berger, Weinberg, B. Berger and Jones are collectively referred to
as the "RM Group") or any one or more of them is included in the Property other
than the Option Properties and the real estate assets and properties set forth
on Schedule 5.1(r) (collectively, the "Excluded Properties").
(s) RM has no knowledge that any part of the Real Property or the
Option Properties has been designated as wetlands under the Federal Water
Pollution Control Act, 33 U.S.C. ss1251 et seq., the Freshwater Wetlands Act,
N.Y. Envtl. Conserv. Law, ss24-0101
15
<PAGE>
et seq., the Tidal Wetlands Act, N.Y. Envtl. Conserv. Law, ss25-0101 et seq.,
the Inland Wetlands and Watercourses Act, Conn. Gen. Stat. Ann. ssss22a-36 et
seq. and the Tidal Wetlands Act, Conn. Gen. Stat. Ann. ssss22A-28 et. seq., or
any applicable local law or regulation promulgated pursuant to any of the
foregoing.
(t) There are no aboveground or underground storage tanks or
vessels which contain any Contaminants at the Real Property or the Option
Properties, regardless of whether such tanks or vessels are regulated tanks or
vessels or not, except as set forth on Schedule 5.1(t).
(u) RM has no knowledge of outstanding requirements or
recommendations by (i) the insurance company(s) currently insuring the Property;
(ii) any board of fire underwriters or other body exercising similar functions,
or (iii) the holder of any mortgage encumbering any of the Property, which
require or recommend any repairs or work to be done on the Property of a
material nature.
(v) The combined financial statements, including the income and
expense statements and the balance sheets of RM LLC and its affiliates,
excluding only those assets, liabilities and operations not contemplated to be
contributed pursuant to this Agreement relating to the ownership and operation
of the Property and the related combined statement of income, partners' capital
and cash flows, including the footnotes thereto (the "Property Financials") as
of and for the years ending December 31, 1993, 1994 and 1995 and for the period
of January 1, 1996 through September 30, 1996, certified by RM, fairly present
the combined financial position of RM LLC relating to the Property as at such
dates and the combined results of operations and combined cash flows of RM LLC
relating to the ownership and operation of the Property for such respective
periods, in each case in accordance with generally accepted accounting
principles ("GAAP") consistently applied for the periods covered thereby. The
Property Financials from January 1, 1996 through September 30, 1996 are subject
to the normal year-end adjustments described in Schedule 5.1(v). There has been
no material adverse change in the financial condition of the Property between
September 30, 1996 and the date hereof.
(w) (i) Annexed hereto as Schedule 5.1(w)(i) is a true and
complete list of all collective bargaining agreements, employment and consulting
agreements, executive compensation plans, bonus plans, directors' fee
arrangements, deferred compensation agreements, employee pension plans or
retirement plans, employee profit sharing plans, 401(k) savings plans,
multiemployer plans, employee stock purchase and stock option plans, employee
welfare plans, severance plans, group life insurance, hospitalization insurance
or other similar plans or arrangements (either written or oral, but only to the
extent an oral plan provides material benefits) providing for benefits to New
Cali Employees.
(ii) Annexed hereto as Schedule 5.1(w)(ii) is a true and
complete list of all RM employee welfare plans (the "RM Welfare Plans")
providing for benefits to New Cali Employees pursuant to Section 23, and the RM
401(k) Savings Plan (the "RM 401(k) Plan"; together with the RM Welfare Plans
collectively, the "RM Plans").
16
<PAGE>
(iii) RM has complied and currently is in compliance in all
material respects, both as to form and operation, with the applicable provisions
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and the Internal Revenue Code of 1986, as amended (the "Code"), with respect to
each RM Plan. To the extent applicable, with respect to each RM Welfare Plan, RM
has supplied CRLP with a true and complete copy of: (A) the most recent annual
report on the applicable Form 5500 series filed with the Internal Revenue
Service (including all attachments filed), (B) the employee benefit plan
including all amendments thereto, (C) each trust agreement and insurance
contract relating to such employee benefit plan, including all amendments
thereto, and (D) the most recent summary plan description for such employee
benefit plan, including all amendments thereto. With respect to the RM 401(k)
Plan, RM has supplied CRLP with the most recent determination letter issued by
the Internal Revenue Service with respect to such employee benefit plan. With
respect to collective bargaining agreements which cover New Cali Employees, RM
has supplied CRLP with a true and complete copy of each collective bargaining
agreement currently in effect including all amendments thereto.
(iv) Notwithstanding anything else set forth herein, other
than routine claims for benefits (i) there are no pending claims, threatened
litigation (which has been communicated to RM in writing), administrative
actions or proceedings involving any of the RM Welfare Plans by any participant
in such plan or by any other person, including, without limitation, any
governmental agency, and (ii) RM has not incurred any material liability with
respect to any of the RM Welfare Plans that is currently due and owing and has
not yet been satisfied, including, without limitation, under ERISA, the Code or
other applicable law, and no event has occurred, and, to the knowledge of the
current partners of RM, there exists no condition or set of circumstances (other
than liability for benefits under the normal terms of any of the RM Welfare
Plans), that could result in the imposition of any material liability on RM with
respect to any of the RM Welfare Plans, including, without limitation, under
ERISA, the Code or other applicable law with respect to any of the RM Welfare
Plans or pursuant to which CRLP may incur liability or have liability attributed
to it under any Federal, state or local law as a result of the transactions
contemplated by this Agreement. To the knowledge of RM, there are no facts or
circumstances that could subject any of the RM Welfare Plans, related trusts,
trustees, administrators or fiduciaries of any of the RM Welfare Plans, or CRLP
or any person dealing with any of the RM Welfare Plans to any penalties or
excise taxes under Section 4971 through 4980B (inclusive) of the Code.
(x) Except as required by applicable law or provided in any
insurance policy listed in Schedule 5.1(x) hereto, RM has not committed itself,
orally (but only to the extent an oral commitment has been made to provide a
material benefit) or in writing, (A) to provide or cause to be provided to any
New Cali Employee any payments or provision of any material "welfare" or
"pension" benefits (as defined in Sections 3(l) and 3(2) of ERISA) in addition
to, or in lieu of, those payments or benefits set forth under any of the RM
Plans, (B) to continue the payment of, or accelerate the payment of, benefits
under any of the RM Plans, except as expressly set forth thereunder, or (C) to
provide or cause to be provided any severance or other post-employment benefit,
salary continuation, termination, disability, death, retirement,
17
<PAGE>
health or medical benefit to any New Cali Employee, except as set forth under
any of the RM Welfare Plans or as may be required by law. In addition, except as
required by applicable law, RM does not have any obligations for post-retirement
or post-employment benefits under any of the RM Welfare Plans that cannot be
terminated upon no more than sixty (60) days notice without incurring any
liability thereunder.
(y) (i) RM does not own or operate any property which any
Governmental Authority has demanded in writing, addressed to and received by RM
or any of its affiliates, counsel or agents, be cleaned up and which has not
been cleaned up.
(ii) Except as disclosed in Schedule 5.1(y)(ii), to RM's
knowledge, no Contaminants have been Discharged which relate to the Real
Property and the Option Properties which would allow a Governmental Authority to
demand that a cleanup be undertaken.
(iii) To the knowledge of RM, no ss.104(e) informational
request has been received by RM issued pursuant to CERCLA, with respect to the
Real Property or the Option Properties.
(iv) To the knowledge of RM, all pre-existing aboveground
and underground storage tanks and vessels, if any, at the Real Property and the
Option Properties have been removed and their contents disposed of in accordance
with and pursuant to all applicable Environmental Laws, except as set forth on
Schedule 5.1(y)(iv).
(v) To the knowledge of RM, there is no asbestos or asbestos
containing material requiring remediation under Environmental Laws on the Real
Property or the Option Properties, except as set forth on Schedule 5.1(y)(v).
(vi) To the knowledge of RM, all transformers and capacitors
containing polychlorinated biphenyls ("PCBs") , and all "PCB Items", as defined
in 40 CFR, ss.761.3, located on or affecting the Real Property or the Option
Properties, are identified in Schedule 5.1(y)(vi) and are in compliance with all
Environmental Laws.
(vii) To the knowledge of RM, RM has all material
certificates, licenses and permits (the "Permits"), including, without
limitation, environmental Permits, required to operate the Real Property and the
Option Properties, except as set forth in Schedule 5.1(y)(vii). To RM's
knowledge, there is no violation of any Environmental Laws with respect to any
Permits, all Permits are in full force and effect, are transferable with the
Real Property or the Option Properties, as the case may be, without additional
payment by CRLP, and shall, upon closing, be transferred to CRLP by RM.
(viii) The Real Property and the Option Properties have not
been used during the period of RM's ownership or, to the knowledge of RM,
previously, as solid waste management facilities as defined in New York
Environmental Conservation Law ss.27-0701.
18
<PAGE>
(ix) RM has not, and shall not knowingly permit any person
or entity to engage in any activity on the Real Property or the Option
Properties, in violation of Environmental Laws.
(x) For purposes of this Agreement, the following words
shall have the respective meaning set forth below:
(A) "Contaminants" shall include, without limitation, any
regulated substance, toxic substance, hazardous substance, hazardous waste,
pollution, pollutant or contaminant, as defined or referred to in the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. ss.6901 et seq.; the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 U.S.C. ss.9601 et seq. ("CERCLA"); the Water Pollution and Control
Act, 33 U.S.C. ss.1251 et seq.; together with any amendments thereto,
regulations promulgated thereunder and all substitutions thereof, as well as
words of similar purport or meaning referred to in any other applicable federal,
state, county or municipal environmental statute, ordinance, rule or regulation,
including, without limitation, asbestos, polychlorinated biphenyls, urea
formaldehyde and petroleum products and petroleum based derivatives.
(B) "Discharge" shall mean the releasing, spilling, leaking,
leaching, disposing, pumping, pouring, emitting, emptying, treating or dumping
of Contaminants at, into, onto or from the Property or the Option Properties, as
the case may be, regardless of whether the result of an intentional or
unintentional action or omission.
(C) "Environmental Documents" shall mean all environmental
documentation in the possession or under the control of RM concerning the
Property or the Option Properties, as the case may be, or their environs,
including, without limitation, all sampling plans, cleanup plans, preliminary
assessment plans and reports, site investigation plans and reports, remedial
investigation plans and reports, remedial action plans and reports, or the
equivalent, sampling results, sampling result reports, data, diagrams, charts,
maps, analysis, conclusions, quality assurance/quality control documentation,
correspondence to or from any Governmental Authority, submissions to any
Governmental Authority and directives, orders, approvals and disapprovals issued
by any Governmental Authority.
(D) "Environmental Laws" means each and every applicable
federal, state, county or municipal statute, ordinance, rule, regulation, order,
code, directive or requirement of any Governmental Authority in any way related
to Contaminants.
(z) RM and each of its affiliated entities have paid all
Taxes due and payable prior to the Closing and timely filed all returns and
reports required to be filed prior to the Closing with respect to the ownership
and operation of the Real Property and Option Properties (by it or any
predecessor entity) for which CRLP could be held liable or a claim made against
the acquired property. Each such tax return or report is true and correct in all
material respects. RM and each of its affiliated entities have paid or provided
for a reserve for all taxes
19
<PAGE>
related to the period ending on the Closing Date but required to be paid after
the Closing Date with respect to the operation of the Real Property and the
Option Properties (by it or any predecessor entity) for which CRLP could be held
liable or a claim made against the acquired property. Except as set forth in
Schedule 5.1(z), there are no audits or other proceedings by any Governmental
Authorities pending or, to the knowledge of RM and each of its affiliated
entities, threatened with respect to the Taxes resulting from the ownership and
operation of the Real Property and the Option Properties (by it or any
predecessor entities) for which CRLP could be held liable or a claim made
against the acquired property and no agreement extending the period for
assessment and collection has been executed with respect thereto. To the
knowledge of RM and each of its affiliated entities, no assessment of Taxes is
proposed against RM (including any predecessor entities), the Real Property or
the Option Properties. RM is not party to, and has no liability under (including
liability with respect to a predecessor entity), any indemnification, allocation
or sharing agreement with respect to Taxes.
(aa) RMC LLC is the successor in interest to the Robert
Martin Company, which entity owned and operated certain of the Real Property
prior to July 16, 1996, the date on which RMC LLC succeeded to the Real Property
owned by the Robert Martin Company. As of January 1, 1993, the Robert Martin
Company and RMENC collectively owned legal and beneficial interest in the Real
Property (CRLP acknowledging that the foregoing does not constitute a
representation as to title, but rather as to the continuation of the business).
(bb) Annexed hereto as Schedule 5.1(bb) is a listing of the
following, which is true, complete and correct in all material aspects for each
Real Property contributed to CRLP: (i) its adjusted basis as of December 31,
1996; (ii) the date placed in service; (iii) the depreciation method; and (iv)
the remaining useful life.
(cc) (i) The Associations have not borrowed money.
(ii) No person or entity is delinquent in any payments of
assessments or maintenance fees owed to any Association.
(iii) No Association has committed to make any capital
improvements to any Building in the future nor is any Association currently in
the process of constructing or managing the construction of any capital
improvements relating to any Building.
(iv) There are no suits, judgments or violations of any
laws, ordinances or regulations relating to any Association nor is any
Association currently involved in any form of litigation, mediation or
arbitration.
(dd) No representation or warranty made by RM contained in
this Agreement, and no statement contained in any document, certificate,
Schedule or Exhibit furnished or to be furnished by or on behalf of RM to CRLP
or any of its designees or affiliates pursuant to this Agreement contains or
will contain any untrue statement of a material fact (taking into account any
knowledge, materiality or other similar qualifiers contained therein) or, to
RM's knowledge, omits or will omit to state any material fact necessary, in
light of the
20
<PAGE>
circumstances under which it was or will be made, in order to make the
statements herein or therein not misleading or necessary in order to fully and
fairly provide the information required to be provided in any such document,
certificate, Schedule or Exhibit.
(ee) As used throughout this Agreement, the phrases "to RM's
knowledge," "to the knowledge of RM" or any similar derivation thereof, shall
mean the actual knowledge of M. Berger, Weinberg, B. Berger, Jones, Mark Durno,
Vice President of Construction, Greg Berger, Vice President of Property
Management, Michael Grossman, Vice President of Leasing, Lloyd I. Roos, Hal
Reiff and John Roche after due inquiry and investigation.
5.2 In order to induce Cali and CRLP to issue the RM Units, RM hereby
acknowledges its understanding that the issuance of the RM Units is intended to
be exempt from registration under the Securities Act of 1933, as amended, and
the rules and regulations in effect thereunder (the "Act"). In furtherance
thereof, RM represents and warrants to CRLP to as follows:
(a) RM and the Unit Holders are acquiring the RM Units solely for
their own account for the purpose of investment and not as a nominee or agent
for any other person and not with a view to, or for offer or sale in connection
with, any distribution of any thereof other than to the Unit Holders. RM agrees
and acknowledges that it is not permitted to offer, transfer, sell, assign,
pledge, hypothecate or otherwise dispose of ("Transfer") any of the RM Units
except as provided in this Agreement and the Agreement of Limited Partnership of
CRLP, as amended through the date hereof (the "OP Agreement").
(b) RM and the Unit Holders are knowledgeable, sophisticated and
experienced in business and financial matters; RM and the Unit Holders fully
understand the limitations on transfer described in this Agreement and the OP
Agreement. RM and the Unit Holders are able to bear the economic risk of holding
the RM Units for an indefinite period and are able to afford the complete loss
of their investment in the RM Units; RM and the Unit Holders have received and
reviewed the OP Agreement and copies of the documents filed by Cali since its
inception under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and all registration statements and related prospectuses and supplements
filed by Cali and declared effective under the Securities Act of 1933, as
amended, since its inception (collectively, the "SEC Documents") and have been
given the opportunity to obtain any additional information or documents and to
ask questions and receive answers about such documents, Cali and CRLP and the
business and prospects of Cali and CRLP which RM and the Unit Holders deem
necessary to evaluate the merits and risks related to its investment in the RM
Units; and RM and the Unit Holders understand and have taken cognizance of all
risk factors related to the purchase of the RM Units.
(c) RM and the Unit Holders acknowledge that they have been
advised that (i) the RM Units must be held indefinitely, and RM and the Unit
Holders will continue to bear the economic risk of the investment in the RM
Units, unless they are redeemed pursuant to the OP Agreement or are subsequently
registered under the Act or an exemption from such
21
<PAGE>
registration is available, (ii) it is not anticipated that there will be any
public market for the Units at anytime, (iii) Rule 144 promulgated under the Act
may not be available with respect to the sale of any securities of CRLP (and
that upon redemption of the RM Units in CRLP for shares of Common Stock a new
holding period under Rule 144 may commence), and CRLP has made no covenant, and
makes no covenant, to make Rule 144 available with respect to the sale of any
securities of CRLP (although Cali and CRLP have agreed to register the Common
Stock pursuant to the Registration Rights Agreement), (iv) a restrictive legend
as set forth in Section 5.4(a) below shall be placed on the certificates or
instruments representing the RM Units, and (v) a notation shall be made in the
appropriate records of CRLP indicating that the RM Units are subject to
restrictions on transfer.
(d) RM and the Unit Holders also acknowledge that (i) the
redemption of RM Units for shares of Common Stock is subject to certain
restrictions contained in the OP Agreement; and (ii) the shares of said Common
Stock which may be received upon such a redemption may, under certain
circumstances, be restricted securities and be subject to limitations as to
transfer , and therefore subject to the risks referred to in Section 5.2(c)
above. Notwithstanding anything herein or in the OP Agreement to the contrary,
RM hereby acknowledges and agrees that it and the Unit Holders may not exercise
the Redemption Rights (as defined in the OP Agreement) until after the date
which is one year from the Closing Date.
(e) RM and each of the Unit Holders is either an "accredited
investor" (as such term is defined in Rule 501 (a) of Regulation D under the
Act) or RM and each of the Unit Holders either alone or with its purchaser
representative(s) has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the prospective
investment.
5.3 All representations and warranties made by RM in this Agreement
shall survive the Closing Date for a period of one (1) year, except that the
representations and warranties set forth in clauses (a), (b), (c) and (z) of
Section 5.1 shall survive the Closing Date for the applicable period of the
statute of limitations (unless otherwise specified herein), and shall not be
merged in the delivery of the Deed. Notwithstanding the foregoing, to the extent
that a Tenant shall certify in its Estoppel Certificate as to any of the matters
which are contained in the representations and warranties made by RM in Section
5.1(e) of this Agreement, then RM's representations and warranties as to such
matters shall terminate. RM agrees to indemnify and defend CRLP, and to hold
CRLP harmless, from and against any and all claims, liabilities, losses,
deficiencies and damages as well as reasonable expenses (including attorney's,
consulting and engineering fees), and interest and penalties related thereto,
incurred by CRLP, by reason of or resulting from any breach, inaccuracy,
incompleteness or nonfulfillment of the representations, warranties, covenants
and agreements of RM contained in this Agreement to the extent same was not
actually known at Closing by any senior executive officer of Cali or CRLP, up to
a maximum liability of $25,000,000, except that such maximum liability is
subject to the provisions of Section 5.6. In addition, CRLP shall not have a
right to bring a claim against RM by virtue of any of the representations or
warranties being false or misleading unless (i) such claim is brought on or
prior to the date through which such representation or warranty survives, (ii)
and until notice of the false or misleading representation or warranty has been
given to RM
22
<PAGE>
and RM has had a reasonable opportunity to cure same and (iii) the aggregate
damages to CRLP resulting from such false, misleading or untrue representations
and warranties are reasonably expected to exceed $750,000, but thereafter CRLP
may bring a claim against RM for the entire amount of its aggregate damages up
to $25,000,000. RMC LLC and RMENC shall be jointly and severally liable for any
damages hereunder.
5.4 (a) (i) RM hereby acknowledges that each Permanent Certificate and
Recapture Certificate representing the RM Units shall bear the following legend:
"THE UNITS REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT MAY NOT BE TRANSFERRED,
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH
TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES
WITH THE PROVISIONS OF THE PARTNERSHIP AGREEMENT DATED AS OF AUGUST 31, 1994 AS
AMENDED AS OF JANUARY 16, 1997 (A COPY OF WHICH IS ON FILE WITH THE OPERATING
PARTNERSHIP). EXCEPT AS OTHERWISE PROVIDED IN SUCH AGREEMENT, NO TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE UNITS REPRESENTED
BY THIS CERTIFICATE MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR (B) IF
THE OPERATING PARTNERSHIP HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF
COUNSEL FOR THE HOLDER THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF
THE ACT AND THE RULES AND REGULATIONS IN EFFECT THEREUNDER. IN ADDITION, THE
UNITS ARE SUBJECT TO THE PROVISIONS OF SECTION 18.1 OF A CERTAIN CONTRIBUTION
AND EXCHANGE AGREEMENT DATED JANUARY 24, 1997 (A COPY OF WHICH IS ON FILE WITH
THE OPERATING PARTNERSHIP)."
(ii) The Recapture Certificates shall also bear the
following restrictive legend:
"THE UNITS ARE ALSO SUBJECT TO FORFEITURE PURSUANT TO THE TERMS OF THE
CONTRIBUTION AND EXCHANGE AGREEMENT WHICH RIGHTS OF FORFEITURE ARE SUPERIOR TO
THE RIGHTS OF ANY HOLDER, TRANSFEREE OR PLEDGEE OF THE UNITS."
(b) RMC LLC shall continue to hold legal and beneficial title to
Eight Hundred Thousand (800,000) Units for the longer of (i) one (1) year
following the Closing and (ii) the resolution of any claim asserted by CRLP
within the one (1) year period following the Closing pursuant to Section 5.3
(the longer of (i) and (ii) being the "Representation Holding Period"), subject
to no prior liens or encumbrances other than The Chase Manhattan Bank, its
successors and assigns ("Chase"), subject to the agreement referenced in Section
10.2 (mm). RMC LLC agrees that throughout the Representation Holding Period, it
shall have a net worth, on a current value basis, at least the same as its net
worth as of the Closing after taking into
23
<PAGE>
account the transactions contemplated by this Agreement, as evidenced by a
statement of such net worth certified by the chief financial officer of RMC LLC
attached hereto as Schedule 5.4 (b) which shall be reaffirmed at Closing;
provided, however, that after the one (1) year period following the Closing, if
any claims have been asserted by CRLP pursuant to Section 5.3, RMC LLC's net
worth, on a current value basis, need only be equal to the aggregate amount of
said claims up to a maximum amount of $25,000,000. For purposes of this Section
5.4 only, and in particular for the purposes of calculating from time to time
the net worth of RMC LLC, the RM Units shall be valued as of the close of
business on January 23, 1997.
(c) The RM Group agrees that during the Representation Holding
Period, RMC LLC shall not voluntarily dispose of assets without substituting
assets of reasonably equivalent or superior value or otherwise maintaining
substantially the same net worth after said disposal; provided, however, that
after the one (1) year period following the Closing, the RM Group's obligations
shall only apply to the amount of any claims asserted by CRLP pursuant to
Section 5.3 up to a maximum amount of $25,000,000.
5.5 RM acknowledges that it is not in a significantly disparate
bargaining position with respect to CRLP in connection with the transaction
contemplated by this Agreement and that RM was represented by legal counsel in
connection with this transaction.
5.6 Notwithstanding anything to the contrary contained in Section 5.3,
the right of CRLP to pursue a claim for a failure of RM to perform the
obligations set forth in Sections 5.4(c), 7.2, 7.5, 7.7, 7.11, 11.2, 11.3,
11.11, 13.1, 15, 26.1 through 26.10 and 28.1 through 28.5 shall be without
regard to a minimum in damages suffered, and shall not be subject to the cap on
damages, as provided in Section 5.3, nor shall any recovery on account of a
failure to perform in accordance with said Sections apply to the $25,000,000
cap.
6. REPRESENTATIONS AND WARRANTIES OF CALI AND CRLP.
6.1 In order to induce RM to perform as required hereunder, Cali and
CRLP hereby jointly and severally warrant and represent the following:
(a) (i) CRLP is a duly organized and validly existing limited
partnership organized and in good standing under the laws of the State of
Delaware, has all requisite power and authority to execute and deliver this
Agreement and all other documents and instruments to be executed and delivered
by it hereunder, and to perform its obligations hereunder and under such other
documents and instruments in order to acquire the Property in accordance with
the terms and conditions hereof. All necessary actions of the partners of CRLP
to confer such power and authority upon the persons executing this Agreement and
all documents which are contemplated by this Agreement on its behalf have been
taken.
(ii) Cali is a duly organized and validly existing
corporation organized and in good standing under the laws of the State of
Maryland, has all requisite power and authority to execute and deliver this
Agreement and all other documents and instruments to be executed and delivered
by it hereunder, and to perform its obligations hereunder and under
24
<PAGE>
such other documents and instruments in order to permit CRLP to acquire the
Property in accordance with the terms and conditions hereof. All necessary
actions of the board of directors of Cali to confer such power and authority
upon the persons executing this Agreement and all documents which are
contemplated by this Agreement on its behalf have been taken.
(b) This Agreement and the agreements and other documents to be
executed and delivered by each of Cali and CRLP hereunder, when duly executed
and delivered, will be the legal, valid and binding obligation of each of Cali
and CRLP, enforceable in accordance with the terms of this Agreement. The
performance by each of Cali and CRLP of each of its duties and obligations under
this Agreement and the documents and instruments to be executed and delivered by
each of them hereunder will not conflict with, or result in a breach of, or
default under, any provision of any of the organizational documents of each of
Cali and CRLP or any agreements, instruments, decrees, judgments, injunctions,
orders, writs, laws, rules or regulations, or any determination or award of any
court or arbitrator, to which each of Cali and CRLP is a party or by which each
of its assets are or may be bound.
(c) The RM Units to be issued to RM and/or the Unit Holders are
duly authorized and, when issued by CRLP, will be fully paid and non-assessable,
free and clear of any mortgage, pledge, lien, encumbrance, security interest,
claim or rights of interest of any third party of any nature whatsoever. The
shares of Common Stock to be issued by Cali upon redemption of the RM Units or
exercise of the Stock Options or Warrants are authorized (with respect to any
Stock Options, the authorization is subject to subsequent stockholder approval
at the next annual meeting of Cali) and will be reserved for future listing with
the New York Stock Exchange prior to the date upon which any of the same become
exercisable or redeemable for Common Stock, and, upon such issuance, will be
fully paid and non-assessable, free and clear of any mortgage, pledge, lien,
encumbrance, security interest, claim or rights of interest of any third party
of any nature whatsoever.
(d) CRLP has furnished to RM a true and complete copy of the OP
Agreement, as amended to date.
(e) Cali has caused to be delivered to RM copies of the SEC
Documents and will cause to be delivered to RM copies of such additional
documents as may be filed by Cali pursuant to the Act or the Exchange Act on or
prior to the Closing Date. The SEC Documents were, and those additional
documents filed between the date hereof and the Closing will be, prepared and
filed in compliance with the rules and regulations promulgated by the SEC, and
do not and will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein in order to make the
statements contained therein, in light of the circumstances under which they
were made or will be made, not misleading.
(f) The consolidated financial statements included in the SEC
Documents have been prepared in accordance with GAAP applied on a consistent
basis during the period involved (except as may be indicated in the notes
thereto or, in the case of the unaudited statements, as permitted by Form 10-Q)
and present fairly (subject, in the case of the unaudited statements, to normal,
recurring year-end audit adjustments) the consolidated financial
25
<PAGE>
position of Cali and its Subsidiaries at the dates thereof and the consolidated
results of operations and cash flows for the periods then ended. For purposes of
this Agreement, the terms "Subsidiary" and "Subsidiaries" shall mean (i) any
entity of which Cali (or other specified entity) shall own directly or
indirectly through a subsidiary, a nominee arrangement or otherwise (x) at least
a majority of the outstanding capital stock (or other shares of beneficial
interest) or (y) at least a majority of the partnership, joint venture or
similar interests, and (ii) any entity in which Cali (or other specified entity)
is a general partner or joint partner, including without limitation CRLP; for
purposes of Section 6.1(f) only, the terms "Subsidiary" or "Subsidiaries" shall
specifically exclude Cali Services, Inc. and Grove Street Urban Renewal Corp.,
which are the only non-qualified REIT subsidiaries of Cali as of the date
hereof.
(g) No action, suit, claim, investigation or proceeding, whether
legal or administrative or in mediation or arbitration, is pending or, to the
best of each of Cali's and CRLP's knowledge, threatened, at law or in equity,
against either of Cali or CRLP before or by any court or federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality which would prevent either of Cali or CRLP from performing its
respective obligations pursuant to this Agreement. There are no judgments,
decrees or orders entered on a suit or proceeding against Cali or CRLP, an
adverse decision which might, or which judgment, decree or order does, adversely
affect Cali's and CRLP's ability to perform its respective obligations pursuant
to, or RM's rights under, this Agreement, or which seeks to restrain, prohibit,
invalidate, set aside, rescind, prevent or make unlawful this Agreement or the
carrying out of this Agreement or the transactions contemplated hereby.
(h) The execution and delivery of this Agreement and the
performance by each of Cali and CRLP of its respective obligations hereunder do
not and will not conflict with or violate any law, rule, judgment, regulation,
order, writ, injunction or decree of any court or governmental or
quasi-governmental entity with jurisdiction over Cali or CRLP, including,
without limitation, the United States of America, the States of New York and New
Jersey or any political subdivision of any of the foregoing, or any decision or
ruling of any arbitrator to which Cali or CRLP is a party or by which Cali or
CRLP is bound or affected.
(i) Except for CRLP and as set forth on Schedule 6.1(i), Cali and
CRLP have no Subsidiaries and no interests or investments in any partnership,
trust or other entity or organization. Each Subsidiary of Cali and CRLP listed
on Schedule 6.1(i) has been duly organized, is validly existing and in good
standing under the laws of the jurisdiction of its organization, has the
corporate power and authority to own its properties and to conduct its business
and is duly registered, qualified and authorized to transact business and is in
good standing in each jurisdiction in which the conduct of its business or the
nature of its properties requires such registration, qualification or
authorization, except where the failure to be so registered, qualified or
authorized and in good standing would not have a material adverse effect on Cali
and its Subsidiaries, taken as a whole; all of the outstanding equity or other
participating interests of each Subsidiary listed on Schedule 6.1(i) have been
duly authorized and validly issued, are fully paid and non-assessable.
26
<PAGE>
(j) Except as disclosed in the SEC Documents filed with the SEC
prior to the date hereof or in Schedule 6.1(j), since September 30, 1996, Cali
and each of its Subsidiaries has conducted its business only in the ordinary
course of such business and has not (i) sold or acquired any real estate or (ii)
leased all or substantially all of any property or (iii) entered into any
financing arrangements in connection therewith or (iv) granted an option to
purchase or lease all or substantially all of any property or (v) entered into a
contract, letter of intent, term sheet or other similar instrument to do any of
the foregoing and there has not been any change, circumstance or event that has
resulted in a material adverse effect on the business properties, results of
operations or financial condition of Cali and its Subsidiaries, taken as a
whole.
(k) Except as set forth on Schedule 6.1(k), neither Cali nor any
Subsidiary has any material liabilities or obligations of any nature (whether
absolute, accrued, contingent or otherwise) except for (i) liabilities or
obligations reflected or reserved against in its September 30, 1996 unaudited
consolidated balance sheet, (ii) liabilities and obligations relating to
outstanding leases that are not required to be disclosed under GAAP and (iii)
current liabilities incurred in the ordinary course of business since the date
of such balance sheet.
(l) (i) As of the second business day immediately preceding the
date hereof: (A) the authorized capital stock of Cali consisted of 95,000,000
shares of its Common Stock and 5,000,000 shares of preferred stock, par value
$.01 per share (the "Preferred Stock"); (B) the issued and outstanding shares of
capital stock of Cali consisted of 36,318,937 shares of Common Stock; (C) no
shares of Preferred Stock were outstanding; and (D) all the outstanding shares
of capital stock of Cali have been duly and validly issued and are fully paid
and non-assessable.
(ii) As of the second business day immediately preceding the
date hereof: (A) the issued and outstanding Units consist of 2,689,945 Units;
and (B) if the RM Units had been issued on said date, the RM Units would have
constituted 34.25 % of the Units.
(iii) Except for the RM Units, the Warrants and the
conversion or exchange rights which attach to the warrants, options and
convertible securities which are listed on Schedule 6.1(l)(iii), as of the date
hereof and except for the existing outstanding Units and options granted under
the Cali Employee and Director Stock Option Plans (as to which 1,528,107 shares
are issuable as of the second business day immediately preceding the date hereof
subject, in certain cases, to vesting requirements), there are no shares of
Common Stock or any other equity security of Cali issuable upon conversion or
exchange of any security of Cali as of the date hereof. As of the date hereof,
no stockholder of Cali is entitled to any preemptive or similar rights to
subscribe for shares of capital stock of Cali.
(m) (i) Cali (A) intends to file its federal income tax return
for the tax year that will end on December 31, 1996 as a real estate investment
trust within the meaning of Sections 856 and 857 of the Code ("REIT"), (B) has
complied with all applicable provisions of the Code relating to a REIT for 1994
and 1995, (C) has operated, and intends to continue to operate, in such a manner
as to qualify as a REIT for 1996 and (D) has not taken or omitted to
27
<PAGE>
take any action which would reasonably be expected to result in a challenge to
its status as a REIT, and no such challenge is pending or, to Cali's knowledge,
threatened.
(ii) Cali has timely filed with the appropriate taxing
authorities all tax returns required to be filed by it or has timely requested
extensions and any such request has been granted and has not expired. Each such
tax return is complete and accurate in all aspects. All taxes shown as owed by
Cali or any of its Subsidiaries on any tax return have been paid or accrued,
except for taxes being contested in good faith and for which adequate reserves
have been taken. None of Cali or any of its Subsidiaries has executed or filed
with the Internal Revenue Service or any other taxing authority any agreement
now in effect extending the period for assessment or collection of any Tax.
Except as set forth in Schedule 6.1(m)(ii), none of Cali or any of its
Subsidiaries is a party to any material pending action or proceedings by any
taxing authority for assessment or collection of any Tax, and no material claim
for assessment or collection of any Tax has been asserted against it. True and
complete copies of all federal, state and local income or franchise tax returns
filed by Cali and each of its Subsidiaries for 1994 and 1995 and all
communications relating thereto will be delivered to RM or have been or will
hereafter promptly be made available to representatives of RM. No claim has been
made by an authority in a jurisdiction where Cali or any of its Subsidiaries
does not file tax returns that it is or may be subject to taxation by the
jurisdiction. Except as set forth in Schedule 6.1(m)(ii), there is no material
dispute or claim concerning any Tax liability of Cali or any of its
Subsidiaries, (A) claimed or raised by any taxing authority in writing or (B) as
to which Cali or any of its Subsidiaries has knowledge, and neither Cali nor any
of its Subsidiaries has entered into or intends to enter into any agreements
with any taxing authority, including but not limited to closing agreements.
(iii) To its knowledge, as of the date hereof, Cali is a
"domestically-controlled" REIT within the meaning of Code Section 897(h)(4)(B).
(iv) Cali represents and warrants that to its knowledge,
except as set forth in Schedule 6.1(m)(iv), no person or entity which would be
treated as an "individual" for purposes of Section 542(a)(2) of the Code (as
modified by Section 856(h) of the Code) owns or would be considered to own
(taking into account the ownership attribution rules under Section 544 of the
Code, as modified by Section 856(h) of the Code) in excess of 9.8% of the value
of the outstanding equity interest in Cali.
(v) Cali represents and warrants that (A) each Subsidiary
organized as a partnership including, without limitation, CRLP (and any other
Subsidiary that files tax returns as a partnership for federal income tax
purposes) was and continues to be classified as a partnership for federal income
tax purposes; and (B) each corporation or association which is taxable as a
corporation for federal income tax purposes and in which Cali has a direct or
indirect interest is either (i) a "qualified REIT subsidiary", as such term is
defined in Code Section 856(i), or (ii) a corporation of which less than ten
(10%) percent of the voting securities are owned by Cali and of which the total
securities owned by Cali represent less than five percent of the value of the
total assets of Cali, within the meaning of Code Section 856(c)(5).
28
<PAGE>
(n) Neither Cali nor any of its Subsidiaries is in default under,
or in violation of, any provision of its organizational documents.
(o) All of Cali's real property and other material assets are
owned by Cali indirectly through its ownership of CRLP and CRLP's Subsidiaries
and certain subsidiaries of Cali.
(p) Neither Cali nor CRLP has made a general assignment for the
benefit of creditors, filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by either of Cali's or CRLP's creditors,
suffered the appointment of a receiver to take possession of all, or
substantially all, of Cali's or CRLP's assets, suffered the attachment or other
judicial seizure of all, or substantially all, of Cali's or CRLP'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.
(q) Schedule 6.1(q) annexed hereto sets forth a true and complete
list of all committees established by the Board of Directors of Cali (the
"Board").
(r) Schedule 6.1(r) sets forth the only agreements Cali has
entered into with John J. Cali, Angelo Cali, Ed Leshowitz, John R. Cali, Brant
Cali and Thomas Rizk in the nature of non-competition, employment and
compensation agreements, other than agreements in the normal course of corporate
practice or agreements applying to every officer, director or both. Each
agreement set forth in Schedule 6.1(r) is in full force and effect. True and
complete copies of each such agreement have been delivered to RM.
(s) Except for the OP Agreement, this Agreement and as set forth
on Schedule 6.1(s) annexed hereto, there are no stockholders' agreements,
partners' agreements, voting trust agreements or other restrictive agreements
relating to the sale or voting of the Units or the Common Stock.
6.2 Each of Cali and CRLP acknowledges that it is not in a
significantly disparate bargaining position with respect to RM in connection
with the transaction contemplated by this Agreement and that Cali and CRLP were
represented by legal counsel in connection with this transaction.
6.3 All representations and warranties made by Cali and CRLP in this
Agreement shall survive the Closing Date for a period of one (1) year, except
that (a) the representations and warranties set forth in clauses (a), (b), (c),
(d) and (l) of Section 6.1 shall survive the Closing Date for the applicable
period of the statute of limitations (unless otherwise specified herein), and
shall not be merged in the delivery of the Deed; and (b) the representations and
warranties set forth in clauses m(ii) and (iii) shall not survive the Closing
Date. Cali and CRLP agree to indemnify and defend RM, and to hold RM harmless,
from and against any and all claims, liabilities, losses, deficiencies and
damages as well as reasonable expenses (including attorney's, consulting and
engineering fees), and interest and penalties related thereto, incurred
29
<PAGE>
by RM, by reason of or resulting from any breach, inaccuracy, incompleteness or
nonfulfillment of the representations, warranties, covenants and agreements of
Cali and CRLP contained in this Agreement to the extent same was not actually
known at Closing by any senior executive officers of RM, up to a maximum
liability of $25,000,000, except that such maximum liability is subject to the
provisions of Section 6.4. In addition, RM shall not have a right to bring a
claim against Cali or CRLP by virtue of any of the representations or warranties
being false or misleading unless (i) such claim is brought on or prior to the
date through which such representation or warranty survives, (ii) and until
notice of the false or misleading representation or warranty has been given to
CRLP and CRLP has had a reasonable opportunity to cure same and (iii) the
aggregate damages to RM resulting from such false, misleading or untrue
representations and warranties are reasonably expected to exceed $750,000, but
thereafter RM may bring a claim against Cali or CRLP for the entire amount of
its aggregate damages up to $25,000,000. Cali and CRLP shall be jointly and
severally liable for any damages hereunder.
6.4 Notwithstanding anything to the contrary contained in Section 6.3,
the right of RM to pursue a claim for a failure of CRLP or Cali to perform the
obligations set forth in Sections 1.3, 2.2(e), 2.2(h), the last sentence of
11.1(a), 11.2, 11.3, 11.9, 11.11, 13.1, 15, 19, 23, 26, 27, 29.11, 29.12 and
29.13 shall be without regard to a minimum in damages suffered, and shall not be
subject to the cap on damages, as provided in Section 6.3, nor shall any
recovery on account of a failure to perform in accordance with said Sections
apply to the $25,000,000 cap.
7. COVENANTS OF RM.
7.1 RM covenants and agrees that between the date hereof and the
Closing Date it shall perform or observe the following with respect to the Real
Property:
(a) RM will operate and maintain the Real Property in the
ordinary course of business and use reasonable efforts to reasonably preserve
for CRLP the relationships of RM and RM's Tenants, suppliers, managers,
employees and others having on-going relationships with the Real Property. RM
will complete any capital expenditure program currently in process and
anticipated to be completed at or prior to Closing. RM will not defer taking any
actions or spending any of its funds, or otherwise manage the Real Property
differently, due to the transaction contemplated by this Agreement.
(b) RM, as landlord, will not enter into any new leases with
respect to the Property, or renew or modify any Lease, without CRLP's prior
written consent; provided, however that RM shall be permitted to enter into new
leases, renewals or modifications upon prior notice to, but without the prior
written consent of, CRLP so long as such lease, renewal or modification is on
market terms and conditions with bona fide third parties and is the type of
transaction which RM currently enters into in the ordinary course of its
business.
(c) RM shall not:
(i) Enter into any agreement requiring RM to do work for any
Tenant after the Closing Date without first obtaining the prior written consent
of CRLP unless
30
<PAGE>
such agreement, in RM's reasonable opinion, is on market terms and conditions
with bona fide third parties and is the type of agreement which RM currently
enters into in the ordinary course of its business, in which case no consent of
CRLP will be required; or
(ii) Accept the surrender of any Service Contract or Lease,
or grant any concession, rebate, allowance or free rent, except in its ordinary
course of business on market terms, with bona fide third parties and upon prior
written notice to CRLP.
(iii) Establish, adopt or amend any employee benefit plans
(severance or otherwise) or collective bargaining agreement, grant any options,
or increase in any manner the compensation or fringe benefits of any director,
officer or employee or other personnel (whether employees or independent
contractors) or pay any benefit not payable under any existing agreement or RM
Plan, except (A) in the ordinary course of business and consistent with past
practices and as required by law, provided that, before entering into any
employment agreement or increasing or agreeing to increase the compensation,
bonuses or other benefits of any employee in the ordinary course of business and
as required by law, RM shall first have consulted in good faith with Cali and/or
CRLP with respect to the terms of any such employment agreement or increase in
compensation, bonuses or other benefits; or (B) in connection with the
transactions contemplated by this Agreement for which Cali or CRLP would not
have any liability.
(d) RM shall not, between the date hereof and the Closing Date,
apply any Security Deposits with respect to any Tenant in occupancy on the
Closing Date, except in its ordinary course of business.
(e) Between the date hereof and the Closing Date, RM will not
renew, extend or modify any of the Service Contracts without the prior written
consent of CRLP unless such is done by RM in the ordinary course of its business
and such Service Contracts contain a right to terminate on thirty (30) days'
notice with no material cost to exercise such right, in which case no consent of
CRLP will be required.
(f) RM shall not remove any Personal Property located in or on
the Property, except as may be required for repair and replacement. All
replacements shall be free and clear of liens and encumbrances except to the
extent the original Personal Property was so encumbered and shall be of quality
at least equal to the replaced items and shall be deemed included in this sale,
without cost or expense to CRLP, other than expressly provided herein.
(g) RM shall, upon request of CRLP at any time after the date
hereof, assist CRLP in its preparation of audited financial statements,
statements of income and expense, and such other documentation as CRLP may
reasonably request, covering the period of RM's ownership of the Real Property.
(h) Between the date hereof and the Closing Date, RM will make
all required payments under any mortgage affecting the Real Property (other than
payments due at stated maturity) within any applicable grace period, but without
reimbursement by CRLP
31
<PAGE>
therefor. RM shall also comply with all other material terms covenants, and
conditions of any mortgage on the Real Property.
(i) RM shall not cause or permit the Real Property, or any
interest therein, to be alienated, mortgaged, licensed, encumbered or otherwise
be transferred.
(j) RM agrees to maintain and keep in full force and effect the
hazard, liability and casualty insurance policies it is currently maintaining.
(k) RM shall permit CRLP and its authorized representatives to
inspect the Books and Records of its operations at all reasonable times upon
reasonable notice. All Books and Records not conveyed to CRLP hereunder shall be
maintained for CRLP's inspection at RM's address as set forth above.
(l) RM shall:
(i) promptly notify CRLP of, and promptly deliver to CRLP, a
certified true and complete copy of any notice RM may receive, on or before the
Closing Date, from any Governmental Authority, concerning a violation of
Environmental Laws or Discharge of Contaminants.
(ii) contemporaneously with the signing and delivery of this
Agreement, and subsequently promptly upon receipt by RM or its representatives,
deliver to CRLP a certified true and complete copy of all Environmental
Documents.
(m) RM shall diligently pursue obtaining waivers of any rights of
first refusal for the Property presently held by any third parties, and shall
provide CRLP with copies of all requests for such waivers.
(n) RM, at its sole cost and expense, shall complete all work
under construction at the Property, including the work shown on Schedule 5.1(f),
in accordance with the obligation giving rise to such work having to be
performed, and shall obtain and deliver to CRLP, as soon as practical, all final
certificates of completion and occupancy, or other documentation reasonably
satisfactory to CRLP, evidencing the acceptance of said work by all appropriate
governmental authorities having jurisdiction thereover and the party for whom
the work is being so performed; said obligations shall survive Closing.
7.2 No later than February 28, 1997, RM shall deliver to CRLP the
Property Financials certified by Ernst & Young, LLP or another internationally
recognized firm of certified public accountants for the calendar years 1994,
1995 and 1996, and reviewed by such accountants for the period from January 1,
1997 through the Closing, in all instances prepared in accordance with the
standards and presenting the type of information as described in Section 5.1(v).
RM shall bear the cost and expense for the preparation and delivery of same for
the calendar years 1994 and 1995, and RM and Cali shall share equally the cost
and expense for the preparation and delivery of same for the calendar year 1996,
provided, however, that Cali's share
32
<PAGE>
of said costs for the 1996 statements shall not exceed $34,000. All of said
statements shall show no material adverse change from the financial statements
delivered to CRLP on or prior to the Closing. No later than thirty (30) days
from the Closing Date, RM shall also deliver to CRLP, from the accountants
certifying the foregoing information, a comfort letter covering the Property
charts and tables described on Schedule 7.2.
7.3 RM covenants and agrees that it shall timely provide CRLP with
drafts of any pertinent documentation in connection with leasing matters,
Service Contracts and agreements for work to be done on behalf of tenants and
shall keep CRLP informed of all substantive negotiations and discussions with
respect to the foregoing matters on an on-going basis.
7.4 RM covenants and agrees that the RM Group shall work with and
assist CRLP in order for CRLP to become a licensed real estate broker in New
York and Connecticut. If CRLP, for any reason, does not become licensed as
aforementioned, the parties shall agree upon a mechanism to provide for payment
of the Third Party Management Fees from a licensed party to CRLP. The provisions
of this Section 7.4 shall survive the Closing Date.
7.5 It is the intention of the parties that from and after the
Closing, CRLP have all of the rights attendant to the "Declarant" under those
certain recorded declarations (the "Declarations") affecting the Real Property,
the "Associations" formed pursuant to the Declarations (the "Associations"), and
any income, payments, receipts or other amounts to which any of the Associations
is due and owed. As of the date hereof, the mechanism for transferring said
rights and obligations has not yet been finalized. Therefore, from and after the
Closing, RM covenants and agrees to permit CRLP to exercise any rights granted
to RM or its successors pursuant to the Declarations and in connection with the
Associations, and to promptly act upon any reasonable requests made by CRLP in
furtherance thereof. RM and the Associations shall not take any actions with
respect to the Declarations, including, but not limited to, levying any
assessments or commencing any improvements, without the prior written consent of
CRLP. In the event that the Associations succeed to the rights of the Declarants
pursuant to the Declarations, RM agrees to cooperate with CRLP to enable CRLP to
become entitled to said rights. RM shall also cooperate with CRLP to transfer to
CRLP, Cali or an affiliate all of the rights attendant to the Declarant and the
Associations arising from and after the Closing. The provisions of this Section
7.5 shall survive the Closing Date.
7.6 As soon as is practicable after the Closing, RM covenants and
agrees to change the name of any of its affiliates containing the words "Robert
Martin", except for Glorious Sun Robert Martin, L.L.C., so as to delete such
words from such name.
7.7 The garage at the portion of the Real Property known as 3 Barker
Avenue, White Plains, New York requires waterproofing, and certain structural
deficiencies related to water problems require correction (collectively, the
"Property Repairs"). CRLP agrees to perform the Property Repairs and engage a
contractor selected by RM, provided that said
33
<PAGE>
contractor is reasonably acceptable to CRLP and agrees to perform the Property
Repairs pursuant to RM's plans and specifications, which plans and
specifications shall be subject to CRLP's reasonable approval. CRLP shall pay up
$250,000 for the total costs and expense related to the Property Repairs,
including the cost of permits, fees, reports, materials and supplies, and the RM
Group shall be jointly and severally liable to CRLP for any costs and expenses
in excess of $250,000, which liability shall be affirmed in the acknowledgment
set forth in Section 10.2 (kk) hereof. The provisions of this Section 7.7 shall
survive the Closing.
7.8 Deleted prior to execution.
7.9 With respect to the property generally known and referred to as
Westchester Financial Center ("WFC"), consisting of 50 Main Street, 25 Martine
Avenue and 11 Martine Avenue, which CRLP is to acquire, CRLP agrees to the
utilization of the parking garage within WFC as contemplated by the Westchester
Financial Center Parking Agreement (the "Parking Agreement") dated as of
December 31, 1996 between 24/25 Maintenance Association, Inc. and RMAP Partners
("RMAP"). Notwithstanding the reference to an "Underlying Agreement" in the
Parking Agreement, RM warrants and represents that no such document has been
executed as of the date hereof. At the request of RM, CRLP agrees not to
unreasonably withhold, delay or condition its consent and approval to the terms
and conditions of RMAP's requests relating to the use of the parking garage as
contemplated by the Parking Agreement. Upon such consent and approval, and
provided CRLP receives the documents described in Sections 10.2 (ll), CRLP shall
implement such agreements ( the "Parking License") consistent with its approval
as shall be necessary to implement the parking rights contemplated by the
Parking Agreement. The provisions of this Section 7.9 shall survive the closing.
7.10 For a period of up to two (2) years after the Closing, RM agrees
that CRLP may use, at its discretion, the RISC computer, which RM agrees to
maintain at no cost to CRLP.
7.11 RM covenants and agrees to remove all liens and security
interests of any kind from the Personal Property set forth as Schedule 7.11
annexed hereto within thirty (30) days after the Closing.
8. OPTION PROPERTIES.
8.1 At the Closing, CRLP shall loan to the record owner(s) of the
Option Properties the sum of Eleven Million Six Hundred Thousand ($11,600,000)
Dollars (the "Option Loan"), which Option Loan shall be on terms and conditions
set forth in, and evidenced by, a note and shall be secured by, among other
things, a cross-collateralized and cross-defaulted mortgage (the "Option
Mortgage") together with note and mortgage modification, consolidation and
spreader agreements to preserve the existing liens encumbering the Option
Properties, title to which shall be subject to the encumbrances set forth in
Section 4.1(a) through (k) and on Schedule 8.1-a annexed hereto, a joint and
several guaranty given by M. Berger, Weinberg, B. Berger and Jones (the
"Personal Option Guaranty"), UCC-1 financing
34
<PAGE>
statements, assignments of leases and rents, environmental indemnity and such
other documents as are reasonably required by CRLP which are consistent with
documents normally required by prudent lenders. All of the documents set forth
in this Section 8.1 other than the environmental indemnity shall be
substantially in the form of Exhibit 8.1-b. Notwithstanding the foregoing, in
the event legal title to 200 remains with the Yonkers Industrial Development
Authority ("YIDA"), then the documents will be modified (a) to maintain the
non-recourse nature of the Option Loan to YIDA's interest in 200, (b) to provide
that a default with respect to 200 will constitute a default with respect to
Skyline but that a default with respect to Skyline will not constitute a default
with respect to 200 and (c) the mortgage to be recorded against 200 shall be in
the amount of $4,600,000 and the mortgage to be recorded against Skyline shall
be in the amount of $7,000,000. In addition, the environmental indemnity shall
be as reasonably agreed to by the parties.
8.2 (a) The Option Mortgage shall be recorded against the Option
Properties and RM shall provide CRLP or its designee with title insurance
insuring the first priority lien of the Option Mortgage.
(b) All costs and expenses, except fees payable to CRLP's
attorneys, incurred in connection with the Option Loan shall be borne by RM,
including, but not limited to, payment of a loan origination fee in the amount
of Three Hundred Forty-Eight Thousand ($348,000) Dollars (the "Option Loan
Origination Fee").
(c) The Option Loan shall also contain such other terms and
conditions as CRLP and its counsel shall reasonably require.
8.3 At the Closing, the owner(s) of the Option Properties and CRLP or
its designee shall enter into an agreement (the "Put-Call Agreement") in
recordable form, substantially in the form of Exhibit 8.3, whereby said owners
and CRLP, or its designee, shall have certain rights to sell and purchase,
respectively, the Option Properties on the terms and conditions more
particularly set forth therein. The Put-Call Agreement shall be recorded against
the Option Properties.
9. ESTOPPEL CERTIFICATES.
9.1 RM agrees to deliver to each Tenant, no later than the date
hereof, an estoppel certificate in the form previously agreed upon by RM and
CRLP for Tenant's execution, completed to reflect the Tenant's particular Lease
status. RM agrees to use commercially reasonable efforts to obtain from all
Tenants the estoppel certificates in such form; provided, however, that if any
Tenant shall refuse to execute an estoppel letter in such form, RM shall
nevertheless use commercially reasonable efforts to obtain estoppel certificates
in the form in which each Tenant is obligated to deliver same as provided in its
Lease. RM agrees to deliver to CRLP copies of all estoppel letters received by
Tenants in the form received by RM. The estoppel certificates required to be
obtained pursuant to this Section 9.1 are collectively referred to as the
"Estoppel Certificates".
35
<PAGE>
9.2 As a condition to Closing, RM shall deliver (a) an Estoppel
Certificate from all but two (2) of the Tenants which lease space at the Real
Property in excess of 25,000 square feet or more in the aggregate and (b)
Estoppel Certificates from the remaining Tenants leasing at least seventy-five
(75%) percent of the square footage of the Real Property including the Tenants
set forth in clause 9.2(a) above.
10. CLOSING.
10.1 The consummation of the transactions contemplated hereunder (the
"Closing") shall take place at the offices of Pryor, Cashman, Sherman & Flynn,
410 Park Avenue, New York, New York 10022 on or about January 31, 1997 (the
"Closing Date").
10.2 On the Closing Date, RM, at its sole cost and expense, will
deliver or cause to be delivered to CRLP the following documents, fully executed
by all parties thereto other than CRLP or parties claiming by, through or under
CRLP:
(a) Bargain and Sale Deeds or for any property situated in
Connecticut, Warranty Deeds (collectively, the "Deeds") with covenant in proper
statutory form for recording so as to convey to CRLP good and marketable title
to the Land, free and clear of all liens and encumbrances, except the Permitted
Encumbrances. The delivery of each Deed shall also be deemed to constitute a
transfer of the Personal Property associated with the Land conveyed by the Deed;
the delivery of all of the Deeds shall be deemed to constitute a transfer of the
balance of the Personal Property to CRLP. No portion of the Purchase Price is
attributable to the Personal Property.
(b) All original Leases and Ground Leases and all other documents
pertaining thereto, and certified copies of such Leases or other documents where
RM, using its best efforts, is unable to deliver originals of same.
(c) All other original documents or instruments referred to
herein, including without limitation the Service Contracts, Licenses and Permits
and Books and Records, and certified copies of same where RM, using its best
efforts, is unable to deliver originals.
(d) A letter to Tenants advising the Tenants of the transaction
hereunder and directing that rent and other payments thereafter be sent to CRLP
or its designee, as CRLP shall so direct.
(e) Duly executed and acknowledged assignment and assumption of
all Leases, Rents and Security Deposits substantially in the form previously
agreed to by the parties.
(f) Duly executed and acknowledged omnibus assignment
substantially in the form previously agreed to by the parties ("Omnibus
Assignment").
(g) Deleted prior to execution.
36
<PAGE>
(h) An affidavit, and such other document or instruments required
by the Title Company, executed by RM certifying (i) against any work done or
supplies delivered to the Real Property which might be grounds for a
materialman's or mechanic's lien under or pursuant to New York Lien Law, in form
sufficient to enable the Title Company to affirmatively insure CRLP against any
such lien, (ii) that the signatures on the Deed are sufficient to bind RM and
convey the Property to CRLP and (iii) the Rent Roll.
(i) Affidavits and other instruments, including but not limited
to all organizational documents of RM and RM's general partner, as applicable,
including operating agreements, filed copies of limited liability certificates,
articles of organization, and good standing certificates, reasonably requested
by CRLP and the Title Company evidencing the power and authority of RM to enter
into this Agreement and any documents to be delivered hereunder, and the
enforceability of same.
(j) The original Estoppel Certificates.
(k) A list of all cash security deposits and all non-cash
security deposits (including letters of credit) delivered by Tenants under the
Leases, together with other instruments of assignment, transfer or consent as
may be necessary to permit CRLP to realize upon same.
(l) A certificate indicating that the representations and
warranties of RM made in this Agreement are true and correct in all material
respects as of the Closing Date, or if there have been any changes, a
description thereof.
(m) A Rent Roll for each Real Property, Skyline and 200, current
as of the Closing Date, certified by RM as being true and correct in all
material respects.
(n) All proper instruments as shall be reasonably required for
the conveyance to CRLP of all right, title and interest, if any, of RM in and to
any award or payment made, or to be made, (i) for any taking in condemnation,
eminent domain or agreement in lieu thereof of land adjoining all or any part of
the Improvements, (ii) for damage to the Land, Improvements or Ground Leases or
any part thereof by reason of change of grade or closing of any such street,
road, highway or avenue, and (z) for any taking in condemnation or eminent
domain of any part of the Land, Improvements or Ground Leases.
(o) In order to avoid the imposition of the withholding tax
payment pursuant to Section 1445 of the Code, a certificate signed by an officer
of RM to the effect that RM is not a "foreign person" as that term is defined in
Section 1445(f)(3) of the Code.
(p) All such transfer and other tax declarations and returns and
information returns, duly executed and sworn to by RM as may be required of RM
by law in connection with the conveyance of the Property to CRLP, including but
not limited to, Internal Revenue Service forms.
37
<PAGE>
(q) A statement setting forth all adjustments and prorations
shown thereon.
(r) A Tradenames Assignment Agreement substantially in the form
previously agreed to by the parties.
(s) Non-Competition Agreements from M. Berger and Weinberg
substantially in the form of Exhibit 10.2(s).
(t) Employment Agreements with B. Berger and Jones substantially
in the form of Exhibit 10.2(t).
(u) Estoppel certificate addressed to CRLP from Teachers in form
and substance reasonably acceptable to CRLP.
(v) (i) The Put-Call Agreement substantially in the form of
Exhibit 8.3; (ii) the Personal Option Guaranty substantially in the form of
Exhibit 8.1; (iii) the documents evidencing and securing the Option Loan
substantially in the form of Exhibit 8.1; and (iv) an opinion of counsel from
Battle Fowler LLP regarding the due execution, delivery and enforceability of
this Agreement and the foregoing documents in form reasonably satisfactory to
CRLP.
(w) The guaranties, if any, undertaken at RM's option, as
provided for in Section 19 with respect to the Teachers Mortgage.
(x) Duly executed and acknowledged assignment and assumption of
all Third Party Management Agreements, with consents of all necessary parties,
substantially in the form previously agreed to by the parties.
(y) Duly executed and acknowledged assignment and assumption of
all Ground Leases substantially in the form previously agreed to by the parties.
(z) License between CRLP and RM for a portion of space not to
exceed 3,852 square feet at 100 Clearbrook Road, Elmsford, New York in
substantially the form of Exhibit 10.2(z) annexed hereto.
(aa) Such other documents as may be reasonably required by CRLP
or Teachers providing for the restructure of the Teachers Mortgage as provided
herein.
(bb) Duly executed and acknowledged Rights of First Offer for
each of the Development Sites set forth in Schedule 26.1 substantially in the
form of Exhibit 26.1 annexed hereto, each of which shall be recorded against the
respective Development Site affected thereby. Notwithstanding such recordation,
RM acknowledges that the "Offer Right" with respect to "Capital Improvements"
(all as noted in Exhibit 26.1) is not limited to a particular
38
<PAGE>
Development Site, but is applicable generally to the States of New York, New
Jersey, Connecticut and Pennsylvania..
(cc) Letter of direction regarding the issuance of the RM Units
to the Unit Holders from the legal and beneficial owners of the Property. The
signatories of said letter are also to acknowledge that they are the legal and
beneficial owners of same.
(dd) Estoppel letters addressed to RM, its successors and assigns
from the lessors under the Ground Leases in form and substance reasonably
acceptable to CRLP.
(ee) Waivers of rights of first refusal, or evidence of the lapse
of said rights, in form reasonable satisfactory to CRLP, with respect to any of
the Property which is subject to said rights.
(ff) A reaffirmation of the statement of the net worth of RMC LLC
set forth in Schedule 5.4(b).
(gg) Leases, either fully executed or executed by the tenants
thereunder, for the two (2) spaces currently being used as health club
facilities at the buildings commonly known as 150 Clearbrook Road, Elmsford, New
York and One Odell Plaza, Yonkers, New York, on a standard form of lease for
"flex" space currently used by RM, and which provide for fixed rent of not less
than nine ($9.00) dollars per square foot.
(hh) To the extent not previously delivered, the Property
Financials for the years ending December 31, 1993, 1994 and 1995 and for the
period of January 1, 1996 through September 30, 1996, certified by the chief
financial officer of RM.
(ii) Evidence of compliance with the Connecticut Transfer Act or
the affidavit described in Section 12.2(e).
(jj) With respect to the Declarations, evidence that all
Association common charges, assessments, maintenance payments and other items of
a similar nature are current and paid through the Closing Date.
(kk) Acknowledgment by M. Berger, Weinberg, B. Berger and Jones
(i) that they will each be liable for cost overruns resulting from the Property
Repairs to be performed pursuant to Section 7.7 hereof and (ii) that they shall
be personally liable for a violation of the covenants set forth in Section
5.4(c).
(ll) An assignment of the Parking License, as well as an opinion
addressed to CRLP from the law firm of Cuddy and Feder and Worby that the
execution of, and performance under, the Parking Agreement and any documents
executed in connection therewith does not require the consent or acknowledgment
of Teachers or any other "party-in-interest" at the Westchester Financial
Center.
39
<PAGE>
(mm) An acknowledgment from Chase that the right and ability of
CRLP to recapture the RM Units which are evidenced by the Recapture Certificate
are superior to any claims which Chase may have to such RM Units and that CRLP's
rights to the balance of the RM Units are subordinate to any claim or lien of
Chase to such RM Units.
(nn) A consent to the transfer of RM Units substantially in the
form of Exhibit 10.2(nn) annexed hereto.
(oo) Such other documents as may be reasonably required or
appropriate to effectuate the consummation of the transactions contemplated by
this Agreement.
10.3 On the Closing Date, Cali and CRLP, at their sole cost and
expense, will deliver or cause to be delivered to RM the following documents,
fully executed by all parties thereto other than RM or parties claiming by,
through or under RM:
(a) The Cash Payment, net of adjustments and prorations.
(b) The Permanent Certificates and Recapture Certificates
representing, in the aggregate, the RM Units.
(c) Resolutions of the Board, effective as of the Closing Date,
(i) expanding the Board by the addition of four (4) members, two of whom shall
be designated by RM and appointed to three year terms and two of whom shall be
designated by the current members of the Board; the new members to be so
designated by the Board shall be independent of control by Cali; (ii) appointing
Messrs. B. Berger and Jones as Executive Vice Presidents; (iii) approving the
issuance of the Warrants to be issued to Messrs. B. Berger and Jones; (iv)
approving the allocation of certain of the Warrants otherwise to be issued to
Messrs. B. Berger and Jones at the Closing, in their sole discretion, to Greg
Berger, Andrew Greenspan and Michael Grossman (the "Warrant Transferees"); and
(v) amending Cali's stock option plan (the "Stock Option Plan") (subject to
subsequent stockholder approval at Cali's next annual meeting) to increase the
maximum number of options for Common Stock in an amount sufficient to permit an
aggregate of 150,000 options for Common Stock in June 1997 and 150,000 options
for Common Stock in June 1998 to be available for grant at the then current fair
market value to certain New Cali Employees (and Messrs. B. Berger and Jones if
and to the extent they have allocated Warrants to Warrant Transferees, as more
particularly described in Section 29.11).
(d) Duly executed and acknowledged assignment and assumption of
all Leases, Rents and Security Deposits substantially in the form previously
agreed to by the parties.
(e) Duly executed and acknowledged Omnibus Assignment.
(f) A certificate indicating that the representations and
warranties of Cali and CRLP made in this Agreement are true and correct as of
the Closing Date, or if there have been any changes, a description thereof.
40
<PAGE>
(g) Employment agreements with B. Berger and Jones substantially
in the form of Exhibit 10.2(t) annexed hereto.
(h) Affidavits and other instruments, including but not limited
to all organizational documents of Cali and CRLP including limited partnership
agreements, filed copies of limited partnership certificates, articles of
organization, and good standing certificates, reasonably requested by RM
evidencing the power and authority of Cali and CRLP to enter into this Agreement
and any documents to be delivered hereunder, and the enforceability of same.
(i) An opinion of counsel of Pryor, Cashman, Sherman & Flynn
substantially in the form previously agreed to by the parties and reasonably
satisfactory to RM.
(j) A Registration Rights Agreement substantially in the form of
Exhibit 10.3(j).
(k) Amendment to OP Agreement substantially in the form of
Exhibit 10.3(k) reflecting admission of RM as limited partner.
(l) The Tradenames Assignment Agreement substantially in the form
previously agreed to by the parties.
(m) Duly executed and acknowledged assignment and assumption of
all Ground Leases substantially in the form previously agreed to by the parties.
(n) Deleted prior to execution.
(o) The management agreements contemplated under Section 2.2(b).
(p) A consent to the transfer of RM Units substantially in the
form of Exhibit 10.2(nn).
(q) An acknowledgment from CRLP that the right and ability of
CRLP to recapture the RM Units which are evidenced by the Recapture Certificate
are superior to any claims which Chase may have to such RM Units and that CRLP's
rights to the balance of the RM Units are subordinate to any claim or lien of
Chase to such RM Units.
(r) Such other documents as may be reasonably required or
appropriate to effectuate the consummation of the transactions contemplated by
this Agreement.
10.4 All transfer taxes and expenses on the Deeds, any state or county
documentary stamps or transfer taxes on the Deeds and any taxes and recording
charges to record the documents executed in connection with the Option Loan
shall be paid by RM. RM shall pay all customary recordation charges, clerk's
fees, taxes, transfer and recording charges. CRLP shall pay all title insurance
premiums, title examination fees and survey costs. Each party shall be
41
<PAGE>
responsible for its own attorney's fees. The provisions of this Section 10.4
shall survive the Closing.
10.5 The Closing shall be consummated without compliance with bulk
sales laws. If by reason of any applicable bulk sales law, any claims are
asserted by creditors of RM related to periods prior to the Closing, such claims
shall be the responsibility of RM, and RM shall jointly and severally indemnify,
defend and hold harmless CRLP (and their respective directors, officers,
employees, affiliates, successors and assigns) from and against all losses or
liabilities, if any, based upon, arising out of or otherwise in respect of the
failure to comply with such bulk sales laws.
10.6 (a) Cali and CRLP acknowledge and agree that, except as set forth
in this Agreement, CRLP is acquiring the Property in its "as is" condition
"subject to all faults" and specifically and expressly without any warranties,
representations or guarantees, either express or implied, of any kind, nature,
or type whatsoever from or on behalf of RM. Cali and CRLP acknowledge that,
except as set forth in this Agreement, and except for documents, reports and
information related to the environmental integrity of the Real Property, the
Option Properties, or both, neither Cali nor CRLP has relied and is not relying
on any information, document, reports, sales brochure or other literature, maps
or sketches, financial information, projections, proformas or statements, that
may have been given by or made by or on behalf of RM. CRLP and Cali further
acknowledge that, except as otherwise set forth herein, all materials relating
to the Property which have been provided by RM, including but not limited to,
the Phase I Reports, have been provided without any warranty or representation,
expressed or implied as to their content, suitability for any purpose, accuracy,
truthfulness or completeness and neither CRLP nor Cali shall have any recourse
against RM or its counsel, advisors, agents, officers, directors or employees
for any information in the event of any errors therein or omissions therefrom.
(b) Cali and CRLP hereby acknowledge and agree that, except as
set forth herein, they are not entitled to, and do not, rely on RM or its agents
as to (i) the quality, nature, adequacy or physical condition, whether latent or
patent, of the Property including, but not limited to, the structural elements,
foundation, roof, appurtenances, access, landscaping parking facilities or the
electrical, mechanical, HVAC, plumbing, sewage or utility system, facilities or
appliances at or in connection with the Real Property, if any; (ii) the
existence, quality, nature, adequacy, physical condition, or location of any
utilities serving the Real Property; (iii) the development potential of the Real
Property, its habitability, merchantability or fitness, suitability or adequacy
of the Property for any particular purpose; (iv) the zoning or other legal
status of the Real Property or the potential use of the Property; (v) the Real
Property's or its operations' compliance with any applicable codes, laws,
building codes, fire codes, regulations, statutes, ordinances, covenants,
conditions or restrictions of, or agreements with any governmental or
quasi-governmental entity or of any other person or entity; (vi) the quality of
any labor or materials relating in any way to the Real Property; or (vii) the
condition of title to the Real Property or the nature, status and extent of any
right, encumbrance, license, reservation, covenant, condition, restriction or
any other matter affecting title to the Real Property.
42
<PAGE>
11. ADJUSTMENTS.
11.1 The following items under (a) through (g) with respect to the
Real Property and under (h) are to be apportioned as of midnight on the date
preceding the Closing:
(a) Rents, escalation charges and percentage rents payable by
Tenants as and when collected. All moneys received from Tenants from and after
the Closing shall belong to CRLP and shall be applied by CRLP to current rents
and other charges under the Leases. After application of such moneys to current
rents and charges, CRLP agrees to remit to RM any excess amounts paid by a
Tenant to the extent that such Tenant was in arrears in the payment of rent
prior to the Closing, but subject to the provisions of Section 11.3 with respect
to Additional Rents.
(b) Upon sufficient advance notice, a cashier's or certified
check or wire transfer to the order of CRLP in the amount of all cash Security
Deposits and any prepaid rents, together with interest required to be paid
thereon. Upon prior notice to RM, at the election of CRLP, such amount may be
allotted to CRLP as a credit against the Cash Payment.
(c) Utility charges payable by RM, including, without limitation,
electricity, water charges and sewer charges. If there are meters on the Real
Property, RM will cause readings of all said meters to be performed not more
than ten (10) days prior to the Closing Date. To the extent said meters are not
read prior to Closing, CRLP will cause same to be read promptly thereafter and a
pro-rata adjustment shall be made upon said reading.
(d) Amounts payable under the Service Contracts other than those
Service Contracts which CRLP has elected not to assume.
(e) Real estate taxes due and payable for the calendar year or
fiscal year, as applicable. If the Closing Date shall occur before the tax rate
is fixed, the apportionment of real estate taxes shall be upon the basis of the
tax rate for the preceding year applied to the latest assessed valuation. If
subsequent to the Closing Date, real estate taxes (by reason of change in either
assessment or rate or for any other reason) for the Real Property should be
determined to be higher or lower than those that are apportioned, a new
computation shall be made, and RM agrees to pay CRLP any increase shown by such
recomputation and vice versa.
(f) Short term interest due on the Option Loan.
(g) The value of fuel stored at any of the Real Property, at RM's
most recent cost, including taxes, on the basis of a reading made within fifteen
(15) days prior to the Closing by RM's supplier. To the extent said reading is
not made prior to Closing, CRLP will cause same to be read promptly thereafter
and a pro-rata adjustment shall be made upon said reading.
(h) Amounts incurred or accrued prior to the Closing Date or
payable to or with respect to any New Cali Employees or other personnel (i.e.
independent contractors of
43
<PAGE>
RM or an affiliate of RM) for services performed or otherwise, including,
without limitation, costs related to the RM Welfare Plans (to the extent the RM
Welfare Plans are fully insured, the allocation will be applicable to premium
costs), but excluding vacation time.
11.2 At Closing, RM shall deposit, or cause to be deposited, an amount
equal to $1,700,000 into an interest bearing reserve account (the "Reserve") to
be maintained by CRLP. All sums payable by RM on account of third party
suppliers or contractors which accrued and are unpaid prior to the Closing Date
shall be paid from the Reserve by RM (CRLP and Cali hereby acknowledging that
neither CRLP nor Cali shall have the right to settle any claims of third party
suppliers or contractors from the Reserve). CRLP shall deliver the balance of
the Reserve, if any, to RM within ninety (90) days after the Closing Date. The
existence of the Reserve shall not constitute a limitation on RM's obligation to
pay the sums due to such suppliers or contractors which accrued prior to the
Closing Date.
11.3 Promptly following request by CRLP, RM shall deliver to CRLP a
list of additional rent, however characterized, under a Lease, including without
limitation, real estate taxes, electrical charges, utility costs and operating
expenses (collectively, "Additional Rents") billed to Tenants for the calendar
year 1997 (both on a monthly basis and in the aggregate), the basis for which
the monthly amounts are being billed and the amounts incurred by RM on account
of the components of Additional Rent for calendar year 1997. CRLP shall be
entitled to all monies and payments on account of Additional Rents for calendar
year 1997. In the event that the Closing Date is later than January 31, 1997, RM
shall be entitled to receive, upon collection, its pro-rata share of Additional
Rents which accrued after January 31, 1997.
11.4 All amounts due and owing under the Teachers Mortgage other than
the outstanding principal balance thereof, including by way of example accrued
and unpaid interest, deferred interest, late charges, default interest,
prepayment fees or penalties, and other fees and charges, shall be paid by RM on
or before the Closing.
11.5 If, on the Closing Date, the Property or any part thereof shall
be or shall have been affected by an assessment or assessments which are or may
become payable in annual installments, all the unpaid installments of any such
assessment due and payable on or prior to the Closing Date shall be paid and
discharged by RM on the Closing Date.
11.6 At the Closing, the parties shall adjust for certain unperformed
tenant improvement work, as more particularly described in Section 13.2 hereof,
and CRLP shall receive a credit therefor.
11.7 At the Closing, CRLP shall be credited with the sum of Seven
Hundred Fifty Thousand ($750,000) Dollars on account of certain repairs to be
performed at the Real Property.
11.8 At the Closing, CRLP shall be credited with the sum of Two
Hundred Thirty Five Thousand Two Hundred ($235,200) Dollars on account of Phase
II Reports.
44
<PAGE>
11.9 At the Closing, CRLP shall be credited with those unpaid leasing
commissions which are currently the obligation of RM but which are not yet due
and payable. Said commissions are to be set forth on a schedule to be attached
to the statement of adjustments and prorations. CRLP agrees to pay such
commissions on the dates same become due and payable and indemnifies RM on
account thereof.
11.10 At the Closing, CRLP shall be credited with the sum of Three
Hundred Forty-Eight Thousand ($348,000) Dollars on account of the Option Loan
Origination Fee set forth in Section 8.2.
11.11 At the Closing, CRLP shall be credited with the sum of Eighty
Thousand One Hundred Ninety Five ($80,195) Dollars on account of an early lease
termination fee previously paid by ANSCO+RE Systems, Inc. for 19,739 square feet
on the third floor at 100 Clearbrook Road, Elmsford, New York.
11.12 Except as otherwise provided in this Agreement, the adjustments
shall be made in accordance with the customs in respect to title closings in the
State of New York.
11.13 Any errors in calculations or adjustments shall be corrected or
adjusted as soon as practicable after the Closing.
11.14 The credits set forth in Sections 11.6 through 11.11 shall be
made against the Cash Payment.
11.15 The provisions of this Section 11 shall survive the Closing
Date.
12. CONDITIONS PRECEDENT TO CLOSING.
12.1 The obligations of RM to deliver title to the Real Property and
to perform the other covenants and obligations to be performed by RM on the
Closing Date shall be subject to the following conditions (all or any of which
may be waived, in whole or in part, by RM):
(a) The representations and warranties made by CRLP and Cali
herein shall be true and correct in all material respects with the same force
and effect as though such representations and warranties had been made on and as
of the Closing Date; provided, however, that a failure of any representations or
warranties to be true and correct in all material respects shall not give rise
to a claim by RM hereunder so long as such matters do not have a material
adverse effect on the transactions contemplated herein. For the purposes of the
Closing condition described in this Section 12.1(a), any limitation to the
knowledge, best knowledge, or actual knowledge in any representation, warranty,
covenant or agreement made by CRLP or Cali herein shall be inapplicable.
(b) CRLP and Cali shall have executed and delivered to RM all of
the documents provided herein for said delivery.
45
<PAGE>
(c) Cali or CRLP shall have offered employment to the persons set
forth on Schedule 12.1(c)(i), provided that the aggregate salaries and benefits
of such employees are in accordance with a budget for general and administrative
expenses agreed upon by RM and Cali and/or CRLP, as set forth on Schedule
12.1(c)(ii) annexed hereto. Such employees who accept the offer shall be
considered new Cali employees ("New Cali Employees"). RM shall not have the
right to allocate among the New Cali Employees any of the salaries and benefits
offered to those employees of RM who do not become New Cali Employees. Schedule
12.1(c)(iii) shall identify the persons, if any, who are not expected to be
actively-at-work on the Closing Date, provided, however, that New Cali Employees
who on the Closing Date are on vacation or not at work due to a scheduled day
off or a short term illness not expected to last more than five (5) days shall
be considered actively-at-work for purposes of Schedule 12.1 (c)(iii).
(d) Deleted prior to execution.
(e) Cali and CRLP shall have performed all covenants and
obligations undertaken by Cali and CRLP herein in all respects and complied with
all conditions required by this Agreement to be performed or complied with by
them on or before the Closing Date.
(f) The Board shall have been expanded by the addition of four
(4) members (i) two of whom shall have been designated by the current members of
the Board and who shall be independent of control of Cali and (ii) two of whom
shall have been designated by RM and each of whom shall have been appointed to
three year terms.
(g) Cali shall have elected to be taxed as a REIT in its most
recent federal income tax return, and shall be in compliance with all applicable
laws, rules and regulations, including the Code, necessary to permit it to be
taxed as a REIT. Cali shall not have taken any action or have failed to take any
action which would reasonably be expected to, alone or in conjunction with any
other factors, result in the loss of its status as a REIT for federal income tax
purposes.
(h) Cali shall have issued an aggregate amount of 400,000
warrants ("Warrants") to B. Berger and Jones, inclusive of allocations to the
Warrant Transferees, which Warrants shall be substantially in the form of
Exhibit 12.1(h) hereto.
12.2 The obligations of Cali and CRLP to accept title to the Property
and Cali and CRLP's obligation to perform the other covenants and obligations to
be performed by Cali and CRLP on the Closing Date shall be subject to the
following conditions (all or any of which may be waived, in whole or in part, by
Cali or CRLP):
(a) The representations and warranties made by RM herein shall be
true and correct in all material respects with the same force and effect as
though such representations and warranties had been made on and as of the
Closing Date; provided, however, that a failure of a representation or warranty
to be true and correct in all material respects shall
46
<PAGE>
not give rise to a claim by Cali or CRLP hereunder so long as such matters do
not have a material adverse effect on the transactions contemplated herein. For
the purposes of the Closing condition described in this Section 12.2(a), any
limitation to the knowledge, best knowledge, or actual knowledge in any
representation, warranty, covenant or agreement made by RM herein shall be
inapplicable.
(b) RM shall have performed all covenants and obligations
undertaken by RM herein in all respects and complied with all conditions
required by this Agreement to be performed or complied with by it on or before
the Closing Date.
(c) The Title Company is unconditionally prepared to issue to
CRLP a Title Policy meeting the requirements set forth in Section 4 hereof for
an "insurable title".
(d) Teachers and CRLP shall have entered into such documents as
shall be acceptable to each of the parties for the restructure of the Teachers
Mortgage with an outstanding principal balance of at least One Hundred Eighty
Five Million Two Hundred Fifty Thousand ($185,250,000) Dollars and on
substantially the terms and conditions set forth (i) on Exhibit 12.2(d) and (ii)
in the documents delivered to CRLP by Teachers prior to the date hereof.
(e) In regard to the Stamford Executive Park, RM shall, prior to
the Closing, at its sole cost and expense, comply with the Connecticut Transfer
Act, Conn. Gen. Stat. Ann. ssss22a-134 et seq., the regulations promulgated
thereunder and any amending and successor legislation and regulations now or
hereafter existing. RM shall, at RM's sole cost and expense, make all
submissions to, provide all information to and comply with all requirements of
the Connecticut Department of Environmental Protection or its successor. In the
event that the Stamford Executive Park is not an establishment subject to the
Connecticut Transfer Act, then prior to the Closing, RM shall, at its sole cost
and expense, provide to CRLP an affidavit of an officer of RM stating that the
Stamford Executive Park is not an establishment which is subject to the
provisions of the Connecticut Transfer Act.
(f) All rights of first refusals with respect to the Property
shall have been waived, either pursuant to a specific waiver executed by the
beneficiary thereof or by the lapse of time as provided in the instrument
setting forth such right. If the waiver is based upon the lapse of time, RM
shall certify compliance with the relevant instrument.
(g) RM shall have executed and delivered to CRLP all of the
documents provided for herein for said delivery.
13. LEASING COMMISSIONS AND TENANT IMPROVEMENT OBLIGATIONS.
13.1 All leasing commissions and tenant improvement obligations for
which CRLP shall receive a credit at Closing (which shall be set forth on a
schedule to be annexed to the schedule of adjustments and prorations done at
Closing), and all leasing commissions and
47
<PAGE>
tenant improvement obligations on account of extensions, renewals or amendments
(including expansions) of Leases made after the Closing (other than commissions
and tenant improvement obligations due on account of the leases described on
Schedule 5.1(d)-4 for which CRLP does not receive a credit at Closing) shall be
the responsibility of CRLP. All leasing commissions due on account of the
original term of all Leases made before the date of this Agreement and
extensions and renewals which are presently effective, tenant improvement
obligations which were to have been performed, completed or paid for prior to
the Closing, and commissions and tenant improvement obligations due on account
of the leases described on Schedule 5.1(d)-4, in each instance for which CRLP
does not receive a credit at Closing, shall be the obligation of RM.
13.2 RM and CRLP agree to proceed in good faith in establishing all of
the amounts to be adjusted pursuant to Section 13.1, including the cost of all
tenant improvement obligations with respect to the Property which were to have
been performed, completed and paid for prior to the Closing and the cost of the
tenant improvement obligations for the leases described on Schedule 5.1(d)-4.
13.3 The provisions of this Section 13 shall survive the Closing.
14. ASSIGNMENT.
14.1 This Agreement may not be assigned by Cali or CRLP except to a
directly or indirectly wholly-owned subsidiary or subsidiaries of Cali or CRLP,
or to a partnership in which any such wholly-owned subsidiary or subsidiaries
owns, either directly or indirectly, at least seventy-five (75%) percent 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 Cali or CRLP shall constitute a default by
Cali or CRLP hereunder and shall be deemed null and void and of no force and
effect. Notwithstanding anything to the contrary contained herein, Cali or CRLP
may assign the right to purchase individual portions of the Property to various
entities provided 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
Cali or CRLP with respect to the portion of the applicable Real Property, in
form reasonably satisfactory to counsel for RM, shall be delivered to the
attorneys for RM prior to the Closing, and in any event no such assignment shall
relieve Cali and CRLP from their obligations under this Agreement.
14.2 As of the date hereof, CRLP anticipates that the parties set
forth on Schedule 14.2 shall be the transferee of that portion of the Real
Property set forth opposite its name and the balance of the Property
attributable to said Real Property.
15. BROKER.
15.1 Cali, CRLP and RM represent that they have not dealt with any
brokers, finders or salesmen, in connection with this transaction, except that
certain fees may be payable
48
<PAGE>
by CRLP or Cali to Prudential Securities Incorporated, as financial advisors,
and certain fees may be payable by RM to Lazard Freres & Company, LLC, as
financial advisors. Cali, CRLP and RM agree to indemnify, defend and hold each
other harmless from and against any and all loss, cost, damage, liability or
expense, including reasonable attorneys' fees, which they may sustain, incur or
be exposed to by reason of any claim for fees or commissions. The provisions of
this Section shall survive the Closing or other termination of this Agreement.
16. CASUALTY LOSS.
16.1 RM shall continue to maintain, in all material respects, the fire
and extended coverage insurance policies with respect to the Property (the
"Insurance Policies") which are currently in effect, through the date that said
coverage currently expires or the Closing, whichever is later, which obligation
shall survive the Closing.
16.2 If at any time prior to the Closing Date all or any portion of
the Property is destroyed or damaged as a result of fire or any other casualty
(a "Casualty"), RM shall promptly give written notice ("Casualty Notice")
thereof to CRLP. CRLP shall not have the right to terminate this Agreement,
provided that (a) RM's insurance fully covers the damage resulting from the
Casualty, (b) subject to the rights of any holders of existing debt, the
proceeds of any insurance, together with a credit equal to RM's deductible under
the Insurance Policies, shall be paid to CRLP at the time of the Closing, (c)
all unpaid claims and rights in connection with losses to the Property shall be
assigned to CRLP at Closing without in any manner affecting the consideration
hereunder, (d) the Tenants do not have a right to terminate their Leases as a
result of the Casualty, (e) there is adequate rent interruption insurance in
place for a period of at least (2) years, and (f) all governmental approvals are
available to permit the Real Property to be rebuilt. If any of the provisos set
forth in the preceding sentence are not met, CRLP shall have the right to
terminate this Agreement in its entirety.
16.3 If a Property is the subject of a Casualty but CRLP does not
terminate this Agreement pursuant to the provisions of this Section, then RM
shall prior to the Closing Date cause all temporary repairs to be made to the
Property as shall be required to prevent further deterioration and damage to the
Property and to protect public health and safety, provided, the cost of any such
repairs shall not exceed the amount of proceeds made available to RM. RM shall
have the right to be reimbursed from the proceeds of any insurance with respect
to the Property for the cost of such temporary repairs.
17. CONDEMNATION.
In the event of a material taking (as defined in this Section 17),
CRLP shall have the right, at its sole option, to either (a) terminate this
Agreement by giving RM written notice to such effect at any time after its
receipt of written notification of any such occurrence, or (b) accept title to
the remainder of the Property without reduction of any consideration given
hereunder. Should CRLP so terminate this Agreement in accordance with this
Section, neither party shall have any further liability or obligations to the
other. In the event CRLP shall not elect
49
<PAGE>
to cancel this Agreement, RM shall, subject to the rights of the holder of any
existing mortgage, assign all proceeds of such taking to CRLP, and same shall be
CRLP's sole property, and CRLP shall have the sole right to settle any claim in
connection with the Property. The term "material taking" shall be defined to
mean the institution of any proceedings, judicial, administrative or otherwise
which (a) would reasonably be expected to reduce the aggregate useable square
footage of the Real Property by at least a full floor, (b) entitle a Tenant
occupying at least a full floor to terminate its Lease, (c) cause access to the
Real Property to be taken or materially diminished (i.e., such taking does not
provide access to a publicly dedicated street or is an impediment to traffic
flow from and to the Real Property), or (d) result in parking no longer being in
compliance with applicable zoning laws.
18. TRANSFER RESTRICTIONS; RIGHT OF FIRST REFUSAL.
18.1 RM hereby agrees that the RM Units may not be sold, assigned,
transferred, pledged, encumbered or in any manner disposed of (collectively,
"Transferred") or redeemed for shares of Common Stock until the first
anniversary of the Closing Date. Thereafter, the RM Units and/or the shares of
Common Stock underlying the RM Units (the "Underlying Shares") may only be
Transferred (i) privately in accordance with the terms of the OP Agreement and
this Section 18, or (ii) in the form of Underlying Shares only, publicly
(subject to the restrictions of the Act and the rules and regulations
promulgated thereunder) in trading blocks of 300,000 shares of Common Stock or
less. Notwithstanding anything herein to the contrary (other than and subject to
and in compliance with the provisions in Section 5.4(b)), the provisions of this
Section 18 shall not apply to, and, in addition to any rights under the OP
Agreement, RM and the Unit Holders shall have the right to make the following
Transfers: (i) pledges or encumbrances of all or a portion of the RM Units to an
institutional lender and/or (ii) Transfers of all or any portion of the RM Units
to Permitted Transferees in accordance with the OP Agreement as it exists on the
date hereof. "Permitted Transferees" means (i) any entity or individual
comprising RM or the Unit Holders; (ii) any direct or indirect equity owner of
RM or the Unit Holders; and (iii) members of the Immediate Family (as defined in
the OP Agreement) of RM or the Unit Holders (or any direct or indirect equity
owner thereof) and trusts for the benefit of one or more members of the
Immediate Family of RM or the Unit Holders (or any direct or indirect equity
owner thereof) created for estate and/or gift tax purposes. Any holder of RM
Units pursuant to (i) or (ii) of the preceding sentence, shall be subject to the
applicable terms and conditions of the OP Agreement and shall sign a counterpart
of the OP Agreement to such effect.
18.2 If RM, the Unit Holders, or any of their Permitted Transferees
(each a "Seller") receives a bona fide written offer to purchase part or all of
its RM Units or Underlying Shares in a privately negotiated transaction which it
desires to accept, such Seller shall not sell, transfer, or otherwise dispose of
(the "Proposed Disposition") such Units or Underlying Shares (the "Disposition
Securities") to a third party (the "Purchaser"), unless, prior to such Proposed
Disposition, such Seller shall have promptly reduced the terms and conditions,
if any, of the Proposed Disposition to a reasonably detailed writing and shall
have delivered written notice (the "Disposition Notice") of such Proposed
Disposition to CRLP. All offers to purchase RM Units or Underlying Shares must
be for cash. The Disposition Notice shall contain an irrevocable offer
50
<PAGE>
to sell all, but not less than all, the Disposition Securities to CRLP upon the
same terms (including price) and subject to the same conditions, if any, as
those contemplated by the Proposed Disposition, and shall be accompanied by a
true and correct copy of the agreement embodying the terms and conditions, if
any, of the Proposed Disposition (which shall identify the Purchaser, the
Disposition Securities, the consideration and method of payment contemplated by
the Proposed Disposition and all other terms and conditions, if any, of the
Proposed Disposition).
18.3 CRLP shall have the irrevocable right and option (the "Purchase
Option"), within five (5) business days after receipt of the Disposition Notice
(the "Notice Period"), to accept such irrevocable offer to purchase the
Disposition Securities which are subject to the Proposed Disposition. If CRLP
determines to exercise such Purchase Option, it shall deliver to the Seller
written notice of the exercise of its Purchase Option with respect to the
Disposition Securities (an "Exercise Notice") prior to the expiration of the
Notice Period.
18.4 If CRLP shall have timely delivered its Exercise Notice with
respect to the Disposition Securities, all certificates for the Disposition
Securities shall be delivered to CRLP at a closing to be held on the later of
the date on which the Proposed Disposition, if accepted, would close or five (5)
business days after such Exercise Notice is given, at the offices of Pryor,
Cashman, Sherman & Flynn located at 410 Park Avenue, New York, New York 10022.
At such closing, CRLP shall deliver to the Seller in immediately available funds
the amount of the purchase price set forth in the Disposition Notice due against
the simultaneous delivery of certificates representing the Disposition
Securities so disposed of, duly endorsed in blank or accompanied by a stock
power or powers duly endorsed in blank, and in proper form for transfer,
together with any necessary stock-transfer stamps, and such Disposition
Securities shall be delivered free and clear of all liens, security interests
and encumbrances whatsoever.
18.5 If CRLP (i) notifies the Seller that it is not exercising its
Purchase Option or (ii) does not deliver an Exercise Notice prior to the
expiration of the Notice Period, CRLP shall be deemed to have waived its
Purchase Option in which event Seller may sell the Disposition Securities to the
Purchaser for a period of thirty (30) days after the expiration of the Notice
Period in which event the transferee shall take free and clear of the
restrictions set forth in this Section 18; provided, however, that such
Disposition Securities are sold to the Purchaser at a price not less than that
contained in the Disposition Notice and on terms and conditions, if any, not
more favorable to the Purchaser than those contained in the Disposition Notice.
If Seller wishes to sell all or any part of the Disposition Securities on terms
more favorable to the Purchaser than those set forth in the Disposition Notice
or does not sell such Disposition Securities on the terms and conditions
contained in the Disposition Notice within the aforementioned thirty (30) day
period, it shall again be obligated to make new offers to CRLP, in accordance
with this Section 18, before it shall be permitted to consummate a Proposed
Disposition of the Disposition Securities, or any part thereof, in a privately
negotiated transaction.
51
<PAGE>
19. LIMITED GUARANTY OF RM.
19.1 In order to allow RM and/or the Unit Holders (the "RM Unit
Group") to defer the recognition of gain for Federal income tax purposes
resulting from the contribution of property to CRLP, at Closing, or at any time
subsequent thereto in accordance with the terms hereof, CRLP and its affiliates
will permit the RM Unit Group to guarantee, or indemnify CRLP or Cali for, the
"bottom portion" (i.e., the least risky portion) of the Teachers Debt or any
other debt incurred by CRLP, Cali and their Subsidiaries and affiliates
(together with Permitted Assignees) up to the amount of $184,000,000
(hereinafter referred to as the "RM Debt Amount"). As of the Closing Date, those
persons currently guaranteeing all or any portion of debt of CRLP or any
Subsidiary (the "Cali Group") will be permitted to guaranty an amount of debt
incurred by CRLP (exclusive of the Teachers Debt) up to $83,000,000 (the "Cali
Debt Amount"). Until the expiration of the Restricted Period, CRLP, Cali and
their Subsidiaries and affiliates (together with Permitted Assignees) agree, to
the extent possible, to maintain an amount of liabilities of CRLP, Cali and
their Subsidiaries and affiliates (together with Permitted Assignees) for the RM
Unit Group to guarantee or indemnify, as the case may be, in order to allow the
RM Unit Group to continue to defer recognition of gain for Federal income tax
purposes. CRLP and Cali agree to take any and all action necessary so that the
execution of each guarantee or indemnity by the RM Unit Group results in basis
for the RM Unit Group for Federal income tax purposes.
19.2 Notwithstanding the foregoing provisions of Section 19.1, it is
expressly understood and agreed that CRLP, Cali and their Subsidiaries and
affiliates (together with Permitted Assignees) are under no obligation to incur
or maintain a specific amount of liabilities and that subsequent to the Closing,
CRLP, Cali and their Subsidiaries and affiliates (together with Permitted
Assignees) may from time to time issue additional Units in exchange for other
properties to unrelated third parties in tax deferred transactions (the "Other
Groups"). In such event, the additional unit holders may similarly require an
amount of liabilities available for guarantees to permit them to defer
recognition of gain for Federal income tax purposes and, if so, the aggregate
amount of debt for such Other Groups is referred to herein as the "Other Debt
Amounts."
19.3 In the event that subsequent to the Closing the sum of (i) the RM
Debt Amount, (ii) the Cali Debt Amount, and (iii) the Other Debt Amounts, if
any, exceeds the aggregate amount of liabilities of CRLP, Cali and their
Subsidiaries and affiliates (together with Permitted Assignees), the RM Unit
Group, the Cali Group and the Other Groups shall re-compute their respective
Debt Amounts in such a manner as to maintain the ratios as established on the
Closing Date between the RM Unit Group and the Cali Group and any subsequent
closing date among the RM Unit Group, the Cali Group and the Other Groups (i.e.,
initially $184,000,000/$83,000,000 or 2.217 to 1). The ratio shall be adjusted
periodically to reflect only the members of each of the RM Unit Group, the Cali
Group and the Other Groups (if any) who need to continue to guarantee or
indemnify a portion of the debt of CRLP, Cali and their Subsidiaries and
affiliates (together with Permitted Assignees) to defer recognition of gain for
federal income tax purposes resulting from the contribution of property to CRLP.
The individual members of the RM Unit Group and the Cali Group shall then be
entitled to guarantee or
52
<PAGE>
indemnify a portion of the aggregate amount of liabilities of CRLP, Cali and
their Subsidiaries and affiliates (together with Permitted Assignees) pro rata,
in pari passu, to the aggregate amounts required by all of such members
(including, if any, members of Other Groups) to defer recognition of gain for
federal income tax purposes resulting from the contribution of property to CRLP.
In this regard, the members of the RM Unit Group and the members of the Cali
Group agree to readjust the amounts of their guarantees and indemnities and
CRLP, Cali and their Subsidiaries and affiliates (together with Permitted
Assignees) agree to use commercially reasonable efforts to structure its
financing in such a way to permit the members of RM Unit Group and the members
of the Cali Group to restructure their respective guarantees or indemnities so
that the re-computed Debt Amounts maintain the ratio established on the
applicable closing date, as adjusted pursuant to this Section 19. For example,
if after the Closing Date CRLP's total liabilities are reduced to $200,000,000,
the RM Debt Amount will be reduced to $137,827,715 and the Cali Debt Amount will
be reduced to $62,172,285.
20. TAX MATTERS.
20.1 RM will pay or provide for payment of all Taxes due and payable
on or after the Closing and will file all returns and reports required to be
filed on or after the Closing with respect to Taxes imposed in connection with
the ownership and operation of the Property for all taxable periods (or portions
thereof) ending on or prior to the Closing, for which CRLP could be held liable
on a claim made against CRLP.
20.2 RM shall pay any and all Taxes including, without limitation,
Taxes imposed with respect to the ownership or operation of the Property for all
taxable periods (or portions thereof) ending on or prior to the Closing, imposed
upon CRLP based, in whole or in part, upon the failure to comply with the bulk
sales laws.
20.3 RM is hereby authorized to continue the proceeding or proceedings
now pending for the reduction of the assessed valuation of the Property and the
Option Properties as set forth on Schedule 20.3 and to litigate or settle the
same in RM's discretion. CRLP is hereby authorized by RM, in CRLP's sole
discretion, to file any applicable proceeding for the 1997 tax roll for the
reduction of the assessed valuation of the Property and the Option Properties,
except that CRLP shall not be authorized to do so with respect to the Real
Property located in White Plains to the extent same has already been filed or
pursued by RM. The net refund of taxes, if any, for any tax year for which RM or
CRLP shall be entitled to share in the refund shall be divided between RM and
CRLP in accordance with the apportionment of taxes pursuant to the provisions
hereof. All expenses in connection therewith, including counsel fees, shall be
borne by RM and CRLP in proportion to their ownership period of the asset in
question.
20.4 "Taxes" mean all federal, state, county, local, foreign and other
taxes of any kind whatsoever (including, without limitation, income, profits,
premium, estimated, excise, sales, use, occupancy, gross receipts, franchise, ad
valorem, severance, capital levy, production, transfer, license, stamp,
environmental, withholding, employment, unemployment compensation, payroll
related and property taxes, import duties and other governmental charges or
assessments), whether or not measured in whole or in part by net income, and
including
53
<PAGE>
deficiencies, interest, additions to tax or interest, and penalties with respect
thereto, and including expenses associated with contesting any proposed
adjustment related to any of the foregoing.
20.5 Cali, as the general partner of CRLP, covenants and agrees that
CRLP and its affiliates will use the "traditional method" (as defined in Treas.
Reg. Section 1.704-3(b)) of allocating income, gain, loss and deduction to
account for the variation between the fair market value and adjusted basis of
the Property for Federal income tax purposes with respect to (i) the
contribution of the Property, and (ii) any revaluation of the Property in
accordance with the provisions of Treas. Reg. Sections 1.704-1(b)(2)(iv)(f),
1.704-1(b)(2)(iv)(g) and 1.704-3(a)(6).
20.6 The provisions of this Section shall survive the Closing Date.
21. PUBLICATION.
21.1 CRLP shall have the right to make such public announcements or
filings with respect to the exchange as CRLP may deem reasonably prudent
(provided that prior to any such announcement or filing, CRLP shall submit the
text of the announcement or filing to RM for its approval not to be unreasonably
withheld or delayed). CRLP shall not issue any such announcement without the
prior reasonable written approval of RM as to the text of the announcement;
provided, however, that CRLP shall be entitled to make such filings or
announcements upon advice of counsel as may be necessary or required by law.
CRLP and RM agree that any public announcements will refer to the exchange
contemplated herein as a merger of the two entities. CRLP agrees to use
commercially reasonable efforts to coordinate with RM and jointly make any
public announcements with regard to the agreements contained herein. RM's right
to approve public announcements or filings as set forth in this Section 21 shall
not survive the Closing.
22. REMEDIES
22.1 If the obligations set forth in Section 12.2 have been satisfied
(unless the failure or inability to be so satisfied is due to Cali or CRLP) and
if CRLP or Cali is not ready, willing and able to perform its obligations
hereunder on the Closing Date, or in the event of a willful default of CRLP or
Cali or CRLP's or Cali's willful failure to comply with any representation,
warranty, covenant or agreement set forth herein, then RM shall have the right
as its sole and exclusive remedy to (a) terminate this Agreement upon notice to
CRLP, and (b) receive a break-up fee (the "Break-up Fee") in the amount of
$5,000,000, following which neither party shall thereafter have any further
obligations under this Agreement. Unless the Closing occurs, the Break-up Fee,
to the extent due to RM hereunder, shall be payable by CRLP on the scheduled
Closing Date. RM agrees that payment of the Break-up Fee shall constitute fixed
and liquidated damages, it being agreed that RM's damages in case of CRLP's
default are impossible to ascertain and that the Break-up Fee constitutes a fair
and reasonable amount of damages under the circumstances and is not a penalty.
54
<PAGE>
22.2 If the obligations set forth in Section 12.1 have been satisfied
(unless the failure or inability to be so satisfied is due to RM) and if RM is
not ready, willing and able to perform its obligations hereunder on the Closing
Date, or in the event of any willful default on the part of RM or RM's willful
failure to comply with any representation, warranty, covenant or agreement set
forth herein, CRLP shall be entitled to either (a) terminate this Agreement upon
notice to RM and receive the Break-up Fee from RM, following which neither party
shall thereafter have any further obligations under this Agreement; or (b) to
commence an action against RM seeking specific performance of RM's obligations
under this Agreement, and collect its attorneys fees from RM as provided in
Section 29.10 of this Agreement.
22.3 The acceptance of the Deeds by CRLP shall be deemed a full
performance and discharge of every agreement and obligation of RM to be
performed under this Agreement; provided, however, that any agreements and
obligations of RM, CRLP and Cali to each other which are specifically stated in
this Agreement to survive the Closing or which by their terms are to be, or may
only be, performed after the Closing, shall survive the Closing. The provisions
of this Section 22.3 shall survive Closing.
23. EMPLOYEE MATTERS.
23.1 During the calendar year 1997, Cali will provide New Cali
Employees with benefits under the RM Welfare Plans set forth on Schedule
5.1(w)(ii) which will be adopted and assumed by Cali, only with respect to New
Cali Employees. Thereafter, all benefits shall be determined by Cali, in its
sole discretion.
23.2 Cali shall grant all New Cali Employees on and after the Closing
Date credit for all service with RM and its affiliates and their respective
predecessors prior to the Closing Date for purposes for which such service was
recognized by RM and its affiliates under the RM Plans, including without
limitation the Cali 401(k) Plan. Cali shall have no liability to any current or
former RM employees who are not New Cali Employees, including without limitation
any liabilities which may arise as a result of the consummation of the
transactions contemplated by this Agreement, under any RM Plans, or arising
under applicable federal or state law including without limitation under the
Worker Adjustment and Retraining Notification Act (WARN) and Consolidated
Omnibus Budget Reconciliation Act of 1985 (COBRA). The provisions of this
Section 23.2 shall survive the Closing.
23.3 The New Cali Employees will be hired directly by Cali and their
employment with RM shall terminate and their employment with Cali shall begin as
of the Closing Date. Cali shall not be liable to any independent contractor of
RM or an RM affiliate or to any New Cali Employee or to RM for any compensation,
benefits or other liabilities related to any employment or services performed,
or otherwise, which were incurred or accrued prior to the Closing Date, except
for vacation time which accrued subsequent to January 1, 1997 and any wages for
which an adjustment pursuant to Section 11.1(h) of this Agreement is being made.
RM shall not be liable to any New Cali Employees or other personnel (i.e.,
independent contractors of RM or an affiliate of RM) for vacation time which
accrued subsequent to January 1, 1997 and wages pursuant to which CRLP receives
a credit under Section 11.1(h).
55
<PAGE>
23.4 Except for the RM Welfare Plans listed on Schedule 5.1(w)(ii),
Cali shall not be required to assume with respect to any New Cali Employee any
agreement related to employment, compensation or benefits. Cali shall cause its
401(k) Plan to accept transfers of account balances from the RM 401(k) Plan by
way of direct rollover. Except as otherwise provided herein with respect to New
Cali Employees, all liabilities with respect to current or former employees of
RM, whether incurred under an RM Plan or otherwise, are the sole responsibility
of RM. The provisions of this Section 23.4 shall survive the Closing.
23.5 Cali will credit New Cali Employees with any unused vacation time
which accrues between January 1, 1997 and the Closing Date. Any vacation time
which accrued prior to January 1, 1997 shall not be the obligation or
responsibility of CRLP or Cali.
24. NOTICE.
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 Cali or CRLP: c/o Cali Realty Corporation
11 Commerce Drive
Cranford, New Jersey 07016
Attn: Roger W. Thomas, Esq.
(908) 272-8000 (tele.)
(908) 272-6755 (fax)
with a copy to: Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attn: Jonathan A. Bernstein, Esq.
(212) 326-0425 (tele.)
(212) 326-0806 (fax)
If RM: Robert Martin Company, LLC
100 Clearbrook Road
Elmsford, NY 10523
Attn.: Brad Berger and
Lloyd I. Roos, Esq.
(914) 592-4800 (tele.)
(914) 592-4836 (fax)
56
<PAGE>
with a copy to: Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Attn: Robert J. Wertheimer, Esq.
(212) 856-7000 (tele.)
(212) 856-7808 (fax)
or to such other address as either party may from time to time designate by
written notice to the other or to the Escrow Agent. 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 confirmation on its machine 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 said party, for all purposes hereunder.
25. ACCOUNTING DISPUTE RESOLUTION
In the event of an application of this Section pursuant to Section
2.2(d), the parties hereby agree to rely upon Deloitte & Touche (the
"Accountant") to render a binding decision as to the amount of Third Party
Management Fees. Each party shall submit, within ten (10) business days after
Reconciliation Period, their calculation of the Third Party Management Fees and
the basis of said calculation. Within fifteen (15) business days of said
submissions, the Accountant shall render his decision. All fees and expenses of
the Accountant shall be divided equally between RM and CRLP. In the event of the
death or unavailability of the Accountant, the parties shall attempt to agree
upon an accountant whose decision as to the amount of Third Party Management
Fees shall be binding. If the parties are unable to agree, within seven (7)
business days, upon an accountant, each shall appoint an accountant, within
three (3) business days, and the two so selected shall appoint a third
accountant. If the two so selected are unable to agree, within seven (7)
business days, on a third accountant, the third accountant shall be appointed
pursuant to an action brought for such purpose before the New York State Supreme
Court situated in Manhattan, upon application of either party. Each party shall
submit, within fifteen (15) business days after the appointment of the necessary
accountant(s), their calculation of the Third Party Management Fees and the
basis for said calculation. Within fifteen (15) business days of said
submissions, the accountants shall render their decision. A decision as to the
amount of Third Party Management Fees by a majority of the accountants shall be
binding upon both parties; provided, however, if a majority of the accountants
are unable to agree on an amount, then the average of the calculations of the
two closest accountants shall be binding on both parties. The fees and expenses
of the third accountant shall be divided equally between RM and CRLP. All other
expenses shall be borne by the party incurring them. All accountants appointed
pursuant to this Section 25 shall be certified public accountants with at least
fifteen (15) years experience.
57
<PAGE>
26. RETAINED PROPERTIES AND NOMINEE PROPERTIES
26.1 RM is contributing to CRLP certain portions of the Real Property
due to the lack of a subdivision of such property from the developed parcels
adjacent or in close proximity thereto; such property is herein defined as the
"Nominee Properties" and is more particularly described as such on Schedule
26.1. In addition, there is certain other property which is to continue to be
owned by RM but which ownership and development is to be subject to the terms
and conditions of this Section 26; such property is herein defined as the
"Retained Properties". Any property set forth on Schedule 26.1 which is not
defined as a Nominee Property is a Retained Property, and the Nominee Properties
and the Retained Properties are collectively referred to herein as the
"Development Sites". Cali, CRLP and RM agree to establish mutually acceptable
arrangements, subject to this Section 26 and CRLP's Right of First Offer as set
forth in Exhibit 26.1 (collectively, the "Development Limitations"), allowing RM
to develop the Development Sites.
26.2 (a) In determining the square footage of the building(s) which
may be developed on any Development Site, RM shall be entitled to a pro-rata
share of the total development rights applicable to the parcel of which the
Development Site is a part based upon the square footage of the Development
Sites then being developed and the square footage of the Real Property to which
the Development Site is related; provided, however, that with respect to the
approved site plans described on Schedule 26.2(a) for the Development Sites and
the remaining undeveloped square footage permitted thereon (which is also set
forth on said Exhibit), RM shall have the right, subject to the Development
Limitations, to process and develop such square footage so long as such
development is approved by all governmental authorities having jurisdiction
thereover.
(b) In connection with the Nominee Properties and the Development
Sites which are subject to future development, CRLP agrees to cooperate, at RM's
cost and expense, in all reasonable respects with RM for all amendments or
modifications to municipal approvals, provided same do not (i) cause the
property being retained by CRLP to be subject to violations of applicable
building, zoning, health, fire or other applicable laws, rules, regulations,
codes or ordinances affecting such property, (ii) cause CRLP to be in violation
of any of the Leases, Ground Lease or mortgages or recorded instruments which
encumber the Property on the Closing Date or any leases, ground leases,
mortgages or recorded instruments entered into after the Closing Date so long as
such documents do not contain restrictions or requirements substantially greater
than the Leases, Ground Leases, mortgages or recorded instruments in effect on
the Closing Date, (iii) reduce by number or size the parking spaces available to
the Property owned by CRLP or require a relocation of said parking except to a
location reasonably acceptable to CRLP, (iv) result in any restrictions or
impositions on the Property owned by CRLP or (v) result in any cost or expense
to, or liability on, CRLP (items (i) through (v) being collectively referred to
herein as the "Development Standards"). RM shall provide copies of all filings
to CRLP in connection with such amendments or modifications, and CRLP shall have
the right to review such materials which are submitted by RM on its behalf and
shall promptly respond to RM regarding such materials.
58
<PAGE>
(c) All costs and expenses associated with the Nominee
Properties, including, without limitation, maintenance, real estate taxes and
insurance, shall be borne by RM, except that CRLP shall pay for the maintenance
costs for the Real Property known as 75 Clearbrook Road, Elmsford, New York
until RM shall commence construction or sale of the Nominee Property adjacent to
75 Clearbrook Road, and to the extent any such costs and expenses are not
separately allocated between the Nominee Property and the Real Property of which
the Nominee Property is a part, then such costs and expenses shall be allocated
in a manner reasonably satisfactory to both parties. Except to the extent more
specifically set forth in Sections 26.7, 26.8, 26.9 and 26.10, RM shall be
responsible for any and all environmental matters affecting the Nominee
Properties, and hereby indemnifies, defends and holds harmless CRLP from and
against any and all loss, cost, expense (including reasonable attorney's fees),
damage and claim arising in connection with CRLP's ownership of the Nominee
Properties, including without limitation, environmental matters, unless as a
result of the gross negligence or willful misconduct of CRLP or its affiliates
owning the subject property. CRLP agrees not to lease or construct on the
Nominee Properties. The provisions of this Section 26.2(c) shall survive the
Closing.
(d) At any time after a Nominee Property shall be subdivided from
the Development Site of which it is a part, CRLP, upon the request of RMC LLC,
shall convey the Nominee Properties to RM or its designee; provided, however,
the Nominee Properties shall continue to be subject to the Development
Limitations unless such conveyance shall be to a person or entity which is not
affiliated with, under the common control of or directly or indirectly owned or
controlled by, the RM Group or any part thereof. RM agrees that at the request
of CRLP, it shall diligently and continuously pursue a subdivision of all of the
Nominee Property to completion, which subdivision shall take into account the
requirements of this Section 26, and shall keep CRLP advised as to the status of
same.
26.3 CRLP and RM shall cooperate in good faith to enter into
reciprocal easement agreements which will provide for, among other things,
shared parking, access across the other parties' property and such other matters
as a Development Site and the Real Property associated therewith may reasonably
require for the use of either parties' property, subject to the Development
Standards.
26.4 (a) The RM Group shall be permitted to obtain the necessary
approvals to develop the Development Sites, and to market the Development Sites;
provided, however, in no event shall the RM Group, or any part thereof, be
permitted to build, manage, lease or own a Development Site for flex, industrial
or office use (collectively, a "Competitive Use"), regardless of whether or not
CRLP shall waive its right to acquire the Development Sites. The foregoing
limitation shall not preclude the RM Group from selling or entering into a
long-term ground lease of all or a portion of a Development Site, subject to
CRLP's Right of First Offer. In addition, notwithstanding the foregoing
limitation, in the event that a bona fide third party desires to retain RM to
construct, for a fee, any project for office, flex or industrial use or a
combination thereof, then RM shall first offer such right to CRLP (accompanied
by all relevant information necessary for CRLP to make such election) and CRLP
shall have the right of first refusal to perform such services as more
particularly set forth in Exhibit 26.1.
59
<PAGE>
(b) Except (i) as otherwise provided in the balance of this
Section 26.4(b), (ii) with respect to the Development Sites (which are more
particularly addressed in Section 26.4(a)) and (iii) as provided in Exhibit
26.1, the RM Group shall have the right to develop, own, operate, manage, lease
or dispose of any of the Excluded Property in any manner. In no event shall the
RM Group, or any part thereof, be permitted to build, manage, operate, lease or
own any of the parcels identified at numbers 24) and 25) on Schedule 5.1(r) for
a Competitive Use, nor shall any property 100% owned by the RM Group, or any
part thereof, be used for a Competitive Use which is not currently being used
for a Competitive Use. In addition, in the event that the RM Group, or any part
thereof, shall acquire, directly or indirectly, 100% of any property identified
on Schedule 5.1(r), and said property was not, on the date so acquired, being
used for a Competitive Use, then from and after the date of such acquisition
said property shall be subject to the Competitive Use limitations.
Notwithstanding the foregoing, if (x) Jones or B. Berger are no longer subject
to the non-compete provisions of the Employment Agreements described in Section
10.1 (t) or (y) CRLP has waived its right of first offer on the Excluded
Properties, then either Jones or B. Berger shall be permitted to develop, own,
operate, manage, lease or dispose of such Excluded Property for any use,
including a Competitive Use.
26.5 CRLP agrees to use reasonable efforts to obtain the consent of
any future mortgagees of any Real Property which is the subject of a Development
Site to the structure of the Development Sites as provided in this Section 26
and to agree to the execution of certain post-closing easements as more
particularly described in the penultimate sentence of Section 4.2
26.6 The following provisions more particularly address the agreement
of the parties with respect to the noted properties, and to the extent of any
conflict between the preceding provisions of this Section and this Section 26.6,
the terms and conditions of this Section 26.6 shall govern and control:
(a) With respect to the property commonly known as 7 Warehouse
Lane, which is part of the Elmsford Distribution Center and is more particularly
shown as "Parcel X" on the certain "Survey of Property prepared for Robert
Martin Company" dated June 29, 1993, brought to date December 19, 1996 and
prepared by Ward Carpenter Engineering Inc., the northeasterly line of Parcel
X/7 Warehouse Lane is to run approximately along the line shown on said Survey
as the "Edge of Paved Area" and "chain link fence";
(b) With respect to the property adjacent to 75 Clearbrook Road,
which is more particularly shown as "Parcel 3" (and containing 4.239 acres) on
the certain "As Built Survey prepared for Robert Martin Company" dated February
4, 1991, brought to date December 19, 1996 and prepared by Ward Carpenter
Engineering Inc., the 20' foot Wide Access Easement shown thereon is to be of
record if it is not already of record, and any development of Parcel 3 is to be
subject to the availability of sufficient parking for the tenant of the
Westchester Broadway Theater pursuant to the lease for said building in effect
on the date hereof. Any conveyance of this Parcel 3 is to be subject to the
recording of an easement or other document evidencing and establishing of record
this shared parking arrangement;
60
<PAGE>
(c) With respect to the property being leased by RM from the
County of Westchester and across from the properties currently known as 11
Skyline Drive, 15 Skyline Drive and 17 Skyline Drive (11 Skyline Drive, 15
Skyline Drive and 17 Skyline Drive are herein collectively referred to as the
"Skyline Properties", and the property across from the Skyline Properties is
herein referred to as the "RM Skyline Property"), the Skyline Properties shall
have the right to use the parking area on the RM Skyline Property. RM agrees
that any development of the RM Skyline Property shall be subject to this right
to use said parking area, and that the parties will enter into appropriate
documentation in recordable form evidencing same. CRLP agrees to permit RM to
use the parking area of the Skyline Properties for so long as CRLP is using the
RM Skyline Property for such purpose, subject to revocation by CRLP, in which
event CRLP's rights over the RM Skyline Property shall also be modified.
Notwithstanding the foregoing, if RM requests that CRLP consent to a lease for
any part of the RM Skyline Property which necessitates the use of the parking
area on the Skyline Properties and CRLP so consents, then CRLP shall not have
the right to revoke said parking rights for the term of said lease. RM also
agrees to advise CRLP if it intends not to perform, or does not perform, any
obligations under the ground lease for the RM Skyline Property which could cause
a default thereunder, and to forward to CRLP any notices of default it receives
under said ground lease. If RM intends to terminate said ground lease, it shall
use reasonable efforts to allow CRLP to assume same; and
(d) With respect to the approximately eight (8) acres adjacent to
and part of the Stamford Executive Park, Stamford and Greenwich, Connecticut
(the "Conn. Development Site"), Exhibit 26.6 describes a potential transaction
with the United States Postal Service (the "USPS"), whereby the USPS may acquire
a part of the Conn. Development Site and as a result thereof the Property being
contributed to CRLP hereunder in Stamford/Greenwich, Connecticut shall be
reconfigured (the "USPS Transaction"). CRLP has agreed conceptually to the USPS
Transaction. If the USPS Transaction is consummated, then RM shall be entitled
to all of the proceeds of same. Notwithstanding such approval of the conceptual
terms of the USPS Transaction, during the development of the property expansion
and reconfiguration, CRLP shall continue to have approval rights, not to be
unreasonably exercised, over the plans and specifications thereof. In addition,
any ability of RM to construct any improvements as part of the USPS Transaction
shall be subject to the Right of First Offer in Exhibit 26.1.
26.7 For so long as the Nominee Properties are owned by CRLP, RM
covenants, at RM's own cost and expense, to promptly comply or, to the extent
CRLP allows, in its sole discretion, any tenant or occupant onto the Nominee
Properties, cause the applicable tenant or occupant to promptly comply, with
each and every Environmental Law applicable to the Nominee Properties, any
tenant or occupant of the Nominee Properties, any operations at the Nominee
Properties, the rental of the Nominee Properties, the sale of the Nominee
Properties, or all of them, regardless of whether an Environmental Law now
exists or is hereafter enacted or promulgated.
26.8 For so long as the Nominee Properties are owned by CRLP, RM
covenants, at its own cost and expense, to promptly obtain and maintain or, to
the extent CRLP allows, in its sole discretion, any tenant or occupant onto the
Nominee Properties, cause the
61
<PAGE>
applicable tenant or occupant to promptly obtain and maintain any and all
permits, licenses, certificates or approvals required pursuant to any
Environmental Laws now existing or hereafter enacted or promulgated, with
respect to the Nominee Properties, including without limitation any permits,
licenses, certificates or approvals required with respect to the ownership,
development, operation, management, rental or sale of the Nominee Properties.
26.9 For so long as the Nominee Properties are owned by CRLP, then RM
covenants that in the event of any past, existing or future Discharge of
Contaminants at, on or under the Nominee Properties or otherwise affecting the
Nominee Properties, or migrating or originating from the Nominee Properties and
affecting the Real Property which is adjacent or contiguous thereto, RM shall,
at its own cost and expense, and in accordance with all currently existing or
hereafter enacted or promulgated Environmental Laws, undertake all action
(including, without limitation, cleaning up the Discharge and removing all
Contaminants from the Nominee Properties, or any Real Property which is adjacent
or contiguous thereto or both, as the case may be) required pursuant to such
Environmental Law. In addition, in the event of such a Discharge, RM shall
immediately notify CRLP and Cali of such fact, shall provide CRLP and Cali with
a copy of all documentation received by RM or its representatives from any
Governmental Authority or submitted by RM or its representatives to any
Governmental Authority with respect to such Discharge and shall advise CRLP and
Cali in advance of all meetings scheduled between RM or any of its
representatives and any Governmental Authority and CRLP and Cali, or their
representatives, or all of them, shall have the right, without the obligation,
to attend and participate in all such meetings.
26.10 RM shall indemnify, defend and hold harmless, CRLP, Cali and
each of their respective partners, shareholders, officers, directors, employees,
agents, affiliates, and representatives from and against any and all claims,
liabilities, losses, damages, penalties and costs, foreseen or unforeseen,
including without limitation, reasonable counsel, engineering and other
professional or expert fees, which an indemnified party may incur, to the extent
that they result directly or indirectly, from (i) the breach of RM's covenants
set forth under this Section 26, (ii) any past, existing or future Discharge of
Contaminants at, on, or under the Nominee Properties or otherwise affecting the
Nominee Properties, or migrating or originating from the Nominee Properties and
affecting the Real Property, regardless of when discovered, or (iii) both of
them. The provisions of this Section 26.10 shall survive the Closing and CRLP's
ownership of the Nominee Properties.
27. RESTRICTIONS ON SALE OF THE PROPERTY
27.1 From the period beginning on the Closing Date and ending upon the
earlier of (a) the death of Weinberg and M. Berger or (b) the date upon which
Weinberg and M. Berger have transferred, sold or otherwise disposed of
ninety-eight (98%) percent or more of their RM Units in a taxable transaction or
any other transaction which results in a basis step-up to the holders of the RM
Units, in the Properties, to their current fair market value, to other than
Permitted Designees (the "Restricted Period"), CRLP, Cali and their Subsidiaries
and affiliates (including, without limitation, any Permitted Assignee) may not
dispose of or distribute any of the Property at any time except (i) in a
tax-free like-kind exchange which satisfies the
62
<PAGE>
requirements of Code Section 1031 and the Treasury Regulations promulgated
thereunder, provided that any replacement property is considered a Property for
purposes of this Section 27, (ii) in the event of the sale of the Property
described in Schedule 27.1 annexed hereto, (iii) if a sale or disposition of any
of the Property would not result in recognition of Built-in Gain by Weinberg or
M. Berger, (iv) otherwise in compliance with the provisions of this Section 27,
or (v) if CRLP promptly pays to the holders of the RM Units an amount equal to
the sum of (A) the federal, state, and local income taxes payable by the holders
of the RM Units resulting from the recognition of the Built-in Gain triggered by
such sale and (B) an additional payment in an amount equal to the amount such
that after payment by the holders of the RM Units of all taxes (including
interest or penalties) on amounts received under Section 27.1 (v)(A) and this
Section (v)(B) the RM unit holders retain an amount equal to the amount
described in Section 27.1(v)(A). After the Restricted Period, the restrictions
contemplated by this Section 27 shall terminate in their entirety. "Permitted
Designees" shall include any inter vivos transfers to (i) spouses of Weinberg or
M. Berger or (ii) any trusts or other entities in which they own an interest
unless any such transfers trigger Built-in Gain or result in a basis step-up to
the holders of the RM Units. For purposes of this Section 27.1, unless CRLP is
furnished with an opinion of counsel to the contrary, any transfer of the RM
Units to any person or entity other than a Permitted Designee is presumed to be
a taxable transaction. RM agrees to cooperate with Cali and CRLP regarding the
calculation of the amount of actual Built-in Gain attributable to any Property
recognized upon any transfer. The provisions of this Section 27.1 shall survive
the Closing.
27.2 During the Restricted Period, CRLP, Cali and their Subsidiaries
(including, without limitation, any Permitted Assignee), may dispose of any of
the Property at any time in connection with (i) the sale of all or substantially
all of the properties owned by CRLP under such terms and conditions which the
Board, in its sole judgment, determines to be in the best interests of Cali and
its public stockholders, or (ii) a sale (including without limitation a transfer
to a secured lender in lieu of foreclosure) which the Board, in its sole
judgment, determines is reasonably necessary (1) to satisfy any material
unsecured debt, judgment or liability of CRLP when they become due (at maturity
or otherwise) or (2) to cure any default under any material mortgage, debt or
liability with respect to the Property; provided, however, that no such sales
will be made under clause (ii) unless CRLP is unable to settle or refinance any
such debts, judgments or liabilities or cure any such defaults after making
commercially reasonable efforts to do so under then prevailing market
conditions. In the event the Board, in its sole judgment, determines that it is
reasonably necessary to dispose of any of the Property to satisfy a material
unsecured debt, judgment or liability of CRLP when it becomes due (at maturity
or otherwise), CRLP covenants and agrees that it shall treat all of its
properties proportionately, including the Property, in its determination of what
properties to dispose of to satisfy such material debt, judgment or liability.
Such proportionate treatment shall mean that the ratio of the value of the
Property that is sold over the value of the total amount of property that is
sold shall be no greater than the ratio of the value of the total Property over
the value of the total CRLP/Cali portfolio. In the case of any disposition of
any of the Property pursuant to this Section 27.2, RM and/or the Unit Holders
may attempt to obtain title to the Property in question so long as any equity in
the Property which CRLP may otherwise be seeking to preserve is not lost or
jeopardized. Moreover, in the event of a transfer of any of the Property to a
63
<PAGE>
secured lender in lieu of foreclosure, CRLP shall use commercially reasonable
efforts to provide RM and/or the Unit Holders the right to (a) cure the default;
(b) acquire such Property from the lender subject to the debt or liability; or
(c) permit RM and/or the Unit Holders to exercise CRLP's right of redemption
with respect to such Property.
27.3 During the period beginning after the seventh anniversary date of
the Closing and ending upon the expiration of the Restricted Period, in addition
to the rights set forth in Sections 27.1 and 27.2 above, CRLP may dispose of any
of the Property at any time in any manner whatsoever, provided, however, that RM
and/or the Unit Holders shall have a right of first offer with respect to the
sale of any of such Property by CRLP as set forth in Section 27.5 below.
27.4 During the period beginning after the tenth anniversary date of
the Closing and ending on the fifteenth anniversary date of the Closing and for
every five year period thereafter until the expiration of the Restricted Period,
in addition to the rights set forth in Sections 27.1, 27.2 and 27.3 above, CRLP
shall have the right to sell an amount of the then remaining Property equal to
ten (10%) percent of the aggregate amount of Built-in Gain, of all of the
Property as of the Closing Date (as set forth on Schedule 27.1) during each five
year period without having to make any right of first offer to RM and/or the
Unit Holders. CRLP's right shall be cumulative, e.g., if CRLP does not sell any
Property during the first five year period, CRLP may sell an amount of Property
equal to 20% of the aggregate amount of Built-in Gain during the second five
year period. For purposes of this Section 27.4, the term "Built-in Gain" for
each Property shall be as set forth on Schedule 27.4, which Schedule sets forth
said Built-in Gain by subtracting the adjusted basis of each Property from its
agreed upon fair market value as of the Closing, all of which is set forth in
Schedule 27.1 and shall not be adjusted notwithstanding any subsequent
adjustments to such values for book or tax purposes, whether as a result of an
audit or otherwise. No later than ten (10) days prior to a sale pursuant to this
Section, CRLP agrees to provide to RM with a calculation setting forth CRLP's
determination of the Built-in Gain thresholds for which CRLP may sell Property
in accordance with this Section, after taking into account any prior sales of
Property pursuant to a right to do so under this Section.
27.5 In the event CRLP desires to sell or otherwise desires to dispose
of, or receives an offer to purchase any of, the Property pursuant to Section
27.2 or 27.3 above, CRLP shall give notice (the "Offering Notice") thereof to RM
and/or the Unit Holders. The Offering Notice shall specify the nature of the
sale, and the consideration and other terms upon which it intends to undertake
such sale. Within thirty (30) days thereafter, RM and/or the Unit Holders may
elect, by notice to CRLP, to purchase the Property which is the subject of the
Offering Notice. If RM and/or the Unit Holders elect to so purchase, then such
purchase shall be consummated on the terms and conditions set forth in the
Offering Notice; provided, however, to the extent that the Property in question
is then subject to separately allocated debt and the lender thereof consents to
RM assuming such debt at no cost, expense or liability to CRLP, CRLP will convey
the Property subject to such debt. RM and/or the Unit Holders may use their
Units as currency, in whole or in part, in connection with the purchase of any
of the Property from CRLP pursuant to this Section 27.5. In addition, as part of
a transfer of any Property pursuant to
64
<PAGE>
Section 27.2(ii) (1) or (2), if RM and/or the Unit Holders can cause the third
party which is otherwise to obtain title to any Property to accept Units, in
whole or in part, in lieu of obtaining title to such Property, RM and/or the
Unit Holders shall have the right to do so provided that such third party agrees
to be bound by all of the terms and conditions of the OP Agreement and performs
in accordance therewith, including, without limitation, performing the
requirements pertaining to a transfer of Units (other than the need to obtain
the consent of the general partner of CRLP, which consent is deemed to be given
pursuant to the terms of Section 27.5); in such event, title to the Property
which would otherwise have been transferred to such third party shall be
transferred to RM and/or the Unit Holders. If within the thirty (30) day period
during which RM and/or the Unit Holders have the right to elect to purchase the
Property for sale under the Offering Notice, RM and/or the Unit Holders do not
make the election or fail to respond to the Offering Notice, then CRLP may
undertake to sell such Property on such terms and conditions as it shall elect;
provided, however, that the sale of any of the Property to which this Section
27.5 applies shall not be consummated at less than 95% of the price as specified
in the Offering Notice unless CRLP again offers the Property to RM and/or the
Unit Holders upon such more favorable terms and conditions (in which case the
thirty (30) day period described above shall be reduced to ten (10)). If RM
and/or the Unit Holders notify CRLP of their intention not to purchase the
Property as set forth in the revised Offering Notice, then CRLP may consummate
the sale at any time thereafter, provided that such sale shall not be
consummated at less than 95% of the price specified in the revised Offering
Notice unless CRLP again complies with the provisions of this Section 27.5.
27.6 In the event that RM and/or the Unit Holders elect to purchase a
Property pursuant to this section 27, CRLP agrees to cooperate with RM and/or
the Unit Holders, at no cost, expense or liability to CRLP, to cause debt to be
placed on the Property immediately prior the closing of the conveyance of said
Property, provided that (i) RM and/or the Unit Holders arrange for such debt at
their sole cost and expense, (ii) RM and/or the Unit Holders are unconditionally
prepared to close such conveyance immediately after said closing of the loan,
(iii) RM agrees to assume the debt and thereafter assumes same at the closing
and (iv) CRLP is released of all liability thereunder immediately following the
closing of the conveyance of the Property.
28. SPECIAL ENVIRONMENTAL MATTERS
See Schedule 28.1.
65
<PAGE>
29. MISCELLANEOUS
29.1 If any instrument or deposit is necessary in order to obviate a
defect in or objection or exception to title, the following shall apply: (i) any
such instrument shall be in such form and shall contain such terms and
conditions as may be required by the Title Company to omit any defect, objection
or exception to title, (ii) any such deposit shall be made with the Title
Company, and (iii) RM agrees to execute, acknowledge and deliver any such
instrument and to make any such deposit.
29.2 This Agreement constitutes the entire agreement between the
parties and incorporates and supersedes all prior negotiations and discussions
between the parties. This Agreement shall be binding upon and inure solely to
the benefit of each party hereto and their successors and assigns, and nothing
in the Agreement express or implied, is intended to confer upon any other person
any rights or remedies of any nature whatsoever under or by reason of this
Agreement.
29.3 This Agreement cannot be amended, waived or terminated orally,
but only by an agreement in writing signed by the party to be charged.
29.4 This Agreement shall be interpreted and governed by the laws of
the State of New York and shall be binding upon the parties hereto and their
respective successors and assigns.
29.5 The caption headings in this Agreement are for convenience only
and are not intended to be part of this Agreement and shall not be construed to
modify, explain or alter any of the terms, covenants or conditions herein
contained.
29.6 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.
29.7 Prior to and after the Closing, each party shall, from time to
time, execute, acknowledge and deliver such further instruments, in recordable
form, if necessary, and perform such additional acts, as the other party may
reasonably request in order to effectuate the intent of this Agreement, within
thirty (30) days of the request. Nothing contained in this Agreement shall be
deemed to create any rights or obligations of partnership, joint venture or
similar association between RM and CRLP. This Agreement shall be given a fair
and reasonable construction in accordance with the intentions of the parties
hereto, and without regard to or aid of canons requiring construction against
RM, CRLP or the party whose counsel drafted this Agreement. The provisions of
this Section 29.7 shall survive the Closing.
29.8 This Agreement shall not be effective or binding until such time
as it has been executed and delivered by all parties hereto. This Agreement may
be executed by the parties hereto in counterparts, all of which together shall
constitute a single Agreement.
66
<PAGE>
29.9 All references herein to any Section or Exhibit shall be to the
Sections of this Agreement and to the Exhibits annexed hereto unless the context
clearly dictates otherwise. All of the Exhibits annexed hereto are, by this
reference, incorporated herein.
29.10 In the event of any litigation or alternative dispute resolution
between CRLP and RM in connection with this Agreement or the transaction
contemplated herein, the non-prevailing party in such litigation or alternative
dispute resolution shall be responsible for payment of all expenses and
reasonable attorneys' fees incurred by the prevailing party. The provisions of
this Section 29.10 shall survive the Closing.
29.11 Cali acknowledges that B. Berger and Jones desire to cause Cali
to grant an aggregate of 300,000 options to purchase Common Stock ("Stock
Options") to New Cali Employees as directed by B. Berger and Jones as follows:
150,000 in June 1997 (the "1997 Options") and 150,000 in June 1998 (the "1998
Options"). Any 1997 Options which are not actually granted in June 1997 may be
granted in June 1998, and any 1998 Options which are not actually granted in
June 1998 may be granted in June 1999, provided that all such Stock Options
shall be granted at the then current fair market value. If B. Berger and Jones
have allocated Warrants to the Warrant Transferees, then of the foregoing Stock
Options, B. Berger and Jones may cause Cali to grant to themselves an amount of
Stock Options equal to the Warrants allocated to the Warrant Transferees up to
an aggregate of 120,000 Stock Options. Cali shall present an amendment to its
Stock Option Plan, and use commercially reasonable efforts to obtain stockholder
approval of such amendment, at the first annual meeting of its stockholders
following the Closing Date (and at each annual meeting thereafter, if necessary,
with the dates above to be adjusted accordingly), in order to permit the
issuance of the Stock Options to the New Cali Employees and Messrs. B. Berger
and Jones as contemplated herein.
29.12 Cali will use its best efforts to renominate Weinberg and B.
Berger to re-election to the Board for second three year terms upon the
expiration of the initial three year terms contemplated herein. In addition, if
either or both of Weinberg and B. Berger die, resign or otherwise become unable
to serve during the aggregate six year period contemplated above, Cali will use
its best efforts to nominate an individual selected by the survivor of Weinberg
and B. Berger (or if there is no survivor, by M. Berger and Jones) to the
vacancy created by such death, resignation or inability to serve. The provisions
of this Section 29.12 shall only be applicable if at the relevant time, the RM
Group still owns more than 51% of the RM Units or an equivalent amount of shares
of Common Stock into which such RM Units may be converted.
67
<PAGE>
29.13 In the event Cali establishes an executive or acquisitions
committee of the Board and RM continues to have a designated director, Cali
shall use its best efforts to cause the members of the Board to elect, appoint
or designate at least one (1) director designated by RM to serve on such
committee(s).
29.14 Whenever used herein, the singular number shall include the
plural, the plural shall include the singular, and the use of any gender shall
be applicable to all genders.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
CALI REALTY, L.P.
By: Cali Realty Corporation
By: /s/ Roger Thomas
------------------------------
Roger Thomas, Vice President
CALI REALTY CORPORATION
By: /s/ Roger Thomas
------------------------------
Roger Thomas, Vice President
ROBERT MARTIN COMPANY, LLC
By: /s/ Martin Berger
------------------------------
Martin Berger, Manager
ROBERT MARTIN - EASTVIEW NORTH
COMPANY, L.P.
By: Robert Martin Company, LLC
By: /s/ Martin Berger
------------------------------
Martin Berger, Manager
68
<PAGE>
Schedule 28.1
Outline of Environmental Provisions to
CRLP Realty Corp./Robert Martin Deal
1. RM is to be responsible, at its sole cost and expense, for remediation of
all environmental conditions described in Schedule 5.1(y)(ii)
(collectively, the "Suspect Properties" and individually each a "Suspect
Property"), on the terms described below.
2. RM will establish an escrow (the "Environmental Escrow") in the amount of
One Million Five Hundred Thousand ($1,500,000) Dollars, which may be drawn
upon from time to time, upon reasonable approval by CRLP based upon
submission of bills and adequate backup data and information. Should
remediation costs exceed the escrow amount, RM will be responsible for all
excess costs as and when incurred. Should remediation costs be less than
the escrow, then RM will be entitled to a refund of the remaining balance.
At the point when the only remaining remediation activities may consist of
continued monitoring of groundwater ("GW"), then the parties will agree to
a reasonably acceptable reduction in the amount of the escrow to cover the
total anticipated costs of continuing GW monitoring. Should the continued
monitoring result in any further required remediation, then RM will be
responsible for the further remediation, notwithstanding the prior
reduction in the escrow amount.
3. Tim Jones will be responsible for supervising the RM remediation
activities, and for assuring the Cali Board of Directors, upon completion
of remediation, that remediation has been completed for each of the
properties where environmental conditions have been identified.
4. RM's remediation activities will be undertaken by an environmental
consultant (the "Consultant") reasonably acceptable to both CRLP and RM. At
CRLP's cost and expense, Environmental Waste Management Associates ("EWMA")
and Farer Siegal Fersko ("FSF") will monitor the remediation activities of
the Consultant on behalf of CRLP, and the Consultant will be responsible
for soliciting the input of EWMA and FSF prior to completion and submission
of any plans or reports to any environmental authority. At RM's costs and
expense, Donald Elmendorf will monitor the remediation activities of the
Consultant on behalf of RM, and the Consultant will be responsible for
soliciting the input of Mr. Elmendorf prior to completion and submission of
any plans or reports to any environmental authority.
5. Remediation standards:
(a) RM will obtain no further action letters, or their equivalent, from
NYDEC, as to soils and groundwater for all properties where environmental
conditions have been identified.
(b) As to the Suspect Properties, including 399 Executive Boulevard and 1,
3 and 6 Warehouse Lane, where underground storage tank ("UST") petroleum
discharges including free floating product have been identified, RM will
cleanup to
<PAGE>
the standards set by the NYDEC guidance known as Spill Technology and
Remediation Theories #1 (Aug. 1992) ("STARS"). Soil remediation will meet
the standards of STAR's TCLP alternative guidance value, GW remediation
will meet the standards of STAR's TCLP extraction guidance value (Ca and
Cw). If RM establishes to CRLP's reasonable satisfaction that particular
STARS cleanup standards are unattainable or undefined, or expected to be
unattainable, at a particular Suspect Property or Suspect Properties, then
CRLP in its reasonable discretion may accept cleanup to an alternative
standard, unless unacceptable to NYDEC, except that in no event may such
standard have a material adverse effect on property value, on current
property use, on groundwater, or on the ability of CRLP to finance any
Suspect Property.
(c) As to environmental conditions at the Suspect Properties other than
those described in subparagraph (b) above or subparagraph (d) below, such
as waste oil tank discharges that have been identified, the same STARS
standards described above will be applied to those compounds having cleanup
standards under STARS, and as to other compounds, such as metals, RM will
clean up to such standards set by the NYDEC. If RM establishes to CRLP's
reasonable satisfaction that particular STARS or other NYDEC cleanup
standards are unattainable or undefined, or expected to be unattainable on
a technical or cost-effectiveness basis, at a particular Suspect Property
or Suspect Properties, then CRLP in its reasonable discretion may accept
cleanup to an alternative standard, unless unacceptable to NYDEC, except
that in no event may such standard have a material adverse affect on
property value, on current property use, on groundwater, or on the ability
of CRLP to finance any Suspect Property.
(d) As to Suspect Properties where historic fill has been identified, other
than fill contaminated by on-site discharges described in subparagraphs (b)
and (c) above, then RM will obtain from NYDEC no further action letters or
their equivalent as to the historic fill at each of those Suspect
Properties. Should NYDEC require any remediation at those Suspect
Properties, then RM will undertake all necessary cleanup as defined in the
subparagraphs above in order to obtain the NFAs or their equivalent. In the
event that NYDEC does not or will not review or issue rulings on such
Suspect Properties, then RM will clean up the Suspect Properties to
standards reasonably acceptable to CRLP, or will establish to CRLP's
reasonable satisfaction that particular standards are unattainable on a
technical or cost-effectiveness basis. Notwithstanding any determination by
NYDEC, in no event may remaining contaminants have a material adverse
affect on property value, on current property use, on groundwater, or on
the ability of CRLP to finance any property.
6. In the event of a dispute between CRLP and RM as to CRLP's exercise of
reasonable discretion concerning the acceptability of particular soil or GW
cleanup standards, or the material adverse affect of remaining contaminants
on property value, on current property use, on groundwater, or on the
ability of CRLP to finance any property, then the dispute will be resolved
by the independent members of the Cali Board of
<PAGE>
Directors.
7. CRLP agrees to forego its rights to initiate any actions against RM under
CERCLA or analogous state laws as to environmental conditions already
identified at the Suspect Properties, but maintains those rights as to
conditions not currently identified or known at the Suspect Properties but
discovered in the future. As to currently unknown or unidentified
environmental conditions discovered in the future at properties other than
the Suspect Properties where environmental conditions have already been
identified, CRLP agrees to forego its rights to initiate any actions
against RM under CERCLA or analogous state laws. However, as to any of the
Real Property, if CRLP is pursued by third parties, including governmental
authorities, concerning any environmental conditions existing as of the
date of Closing, then CRLP may involve RM in those matters, whether through
litigation or other proceedings.
8. Notwithstanding anything to the contrary contained in this Schedule or in
Article 28 to the contrary, should the actual out-of-pocket cost of
remediation and verification, and/or the Consultant's estimate of such cost
of remediation and verification, (a) with respect to any one of the Suspect
Properties exceed the Allocated Property Value for said Suspect Property,
then RM shall have the right, exercisable in its sole and absolute
discretion, to redeem any such Suspect Property in exchange for cash and/or
Units at a price equal to the Allocated Property Value for such Suspect
Property and (b) with respect to all or any one of the Suspect Properties
exceed the amount of the Environmental Escrow, then RM shall have the
right, exercisable in its sole and absolute discretion, to redeem one or
more of the Suspect Properties in exchange for cash and/or Units at a price
equal to the Allocated Property Value for such Suspect Property or
Properties such that the Environmental Escrow is sufficient to pay for the
actual out-of-pocket cost of remediation and verification, or the
Consultant's estimate of such cost of remediation and verification, for the
remaining Suspect Properties.
9. Notwithstanding anything to the contrary set forth above, should RM choose
to have CRLP redeem a Suspect Property pursuant to Section 8 above, then as
to any such properties RM will indemnify, defend and hold CRLP harmless
from and against any and all environmental claims, actions or proceedings
concerning any such property, including those under CERCLA or analogous
state laws.
10. For purposes of valuing the Units, the Units shall be deemed to have a
value of $31.25 per share. All remediation and verification shall be
performed pursuant to the terms and conditions of this Schedule.
<PAGE>
EXHIBIT 2.2(c)-2
<PAGE>
MANAGEMENT AND LEASING AGREEMENT
Agreement, made as of January _____, 1997, between ROBERT MARTIN COMPANY,
LLC ("Owner"), a New York limited liability company having an office at 100
Clearbrook Road, Elmsford, New York 10523 and CALI SERVICES, INC. ("Agent"), a
New Jersey corporation having an office at 11 Commerce Drive, Cranford, New
Jersey 07016.
W I T N E S S E T H:
WHEREAS, Owner is the fee owner of that certain building and other
improvements located at 7 Skyline Drive, Mt. Pleasant, New York (collectively,
the "Building"); and
WHEREAS, Owner desires to engage and appoint Agent as its exclusive
managing and leasing agent for the Building, and Agent desires to accept this
appointment, upon and subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth below, Owner and Agent agree as follows:
1. AppointmentAppointment. Owner hereby appoints and employs Agent as the
exclusive managing and leasing agent for the Building, and Agent hereby accepts
such appointment.
2. Term. This Agreement shall commence on January ____ , 1997
(the "Commencement Date") and shall remain in full force and effect until the
last day of the month in which the third annual anniversary of the Commencement
Date shall occur, unless terminated sooner as hereinafter provided.
3. Agent's Duties and PowersAgent's Duties and Powers.
(a) General Scope. Agent shall manage, coordinate, and supervise the proper
conduct of the ordinary and usual business and affairs pertaining to the
operation, maintenance, leasing and management of the Building (collectively the
"Management Activities"). Agent shall have such responsibilities, and shall
perform and take, or cause to be performed or taken, all such services and
actions customarily performed or taken by managing and leasing agents of
property of similar nature, location and character to that of the Building for
the proper conduct of the Management Activities, including, without limitation,
the duties set forth in Sections 3(b) through 3(l) hereof. In the event Owner is
not satisfied with Agent's management of the Building, Owner's sole recourse
shall be to terminate this Agreement pursuant to Section 10 hereof, provided
however, that the foregoing shall in no event limit or discharge Agent from
liability for failure to perform its obligations pursuant to this Agreement.
(b) Rent Bills and Collections. (1) Agent shall prepare and deliver to all
persons, firms, and entities occupying or using space in the Building
(individually a "Tenant" and
1
<PAGE>
collectively "Tenants") monthly bills setting forth all rent, escalation
payments, and other amounts payable by such Tenants (collectively "Rent") under
their respective leases or licenses, occupancy or similar agreements
(individually a "Lease" and collectively "Leases"). These bills shall be
accompanied by such other information and materials as Owner is required to
furnish such Tenants under their respective Leases. Agent shall use all
commercially reasonable efforts to collect all Rent and shall deposit the Rent
in one or more bank accounts maintained by Agent on behalf of Owner.
(2) Except as directed otherwise by Owner, Agent shall take all such
actions as shall be necessary or advisable to enforce all rights and remedies of
Owner under the Leases or to protect the interests of Owner, including, without
limitation, the preparation and delivery to Tenants of all "late payment",
default, and other appropriate notices, requests, bills, demands, and
statements. Subject to the prior approval of Owner (which approval shall not be
unreasonably withheld or delayed), Agent may retain counsel, collection
agencies, and such other persons and firms as Agent shall deem appropriate or
advisable to enforce by legal action, the rights and remedies of Owner against
any Tenant in default in the performance of its obligations under a Lease
provided however, Owner shall be responsible for all legal action Agent
commences on Owner's behalf. Agent shall notify Owner of the progress of any
such legal action on a regular basis.
(c) EmployeesEmployees. Agent shall have the duty, subject to the
limitations set forth in this Agreement, to investigate, hire, train, pay,
supervise and discharge the personnel (the "Management Personnel") necessary to
be employed in order to properly maintain and operate the Building in accordance
with the obligations of Agent under this Agreement. Such Management Personnel
shall in every instance be deemed employees of Agent and not of Owner. Agent, on
behalf of Owner and at Owner's expense, shall obtain and maintain Workers'
Compensation Insurance (including Employer's Liability Insurance) covering all
employees of Agent employed in, on or about the Building to provide statutory
benefits as required by applicable state and federal laws. Agent shall directly
control the time and manner of the work and services to be performed by the
employees of Agent and Agent shall comply with all applicable federal, state and
local laws, ordinances and regulations applicable to such employees. Agent shall
make all necessary payroll deductions for disability and unemployment insurance,
social security, withholding taxes and other applicable taxes, and prepare,
maintain and file all necessary reports with respect to such taxes or
deductions, and all other necessary statements and reports pertaining to labor
employed on or about the Building. Notwithstanding the fact that personnel
employed in or about the Building are to be employees of Agent, all compensation
(including benefits) paid to them by Agent shall be considered operating
expenses of the Building provided such compensation is no greater than the
expenditures authorized pursuant to the Approved Budget.
(d) Professionals and Contractors. To the extent Agent deems it to be
necessary in connection with the Management Activities, Agent shall (i) identify
and, as Owner's agent, enter into contracts with architects, engineers,
accountants, attorneys, tradespeople, and other independent contractors to
perform services (other than service contracts, as provided for in Section
3(e)(3) hereof) and (ii) supervise the administration, and monitor the
performance, of all
2
<PAGE>
work to be performed and services to be rendered, under all such contracts.
Agent shall use due care in the selection of all such professionals and other
independent contractors. Any and all such contracts and all purchase orders for
an amount in excess of Five Thousand Dollars ($5,000) shall be in form and
substance acceptable to Owner. In the event Owner witholds its consent to any
contract in excess of Five Thousand Dollars ($5,000), Owner shall be liable for
all ramifications of said action, provided however, that such withholding of
consent shall in no event reduce the obligations of Agent as otherwise provided
in this Agreement. Agent shall identify any contracts to be entered into or
purchase orders to be placed with any partner, officer, employee, or Affiliate
of Agent and any such contract shall not exceed the amounts customarily charged
by independent third parties for similar services. As used herein, the term
"Affiliate" shall mean (x) any entity or person directly or indirectly
controlling, controlled by, or under common control with, Agent or any officer,
director, or partner of Agent, (y) any entity or person owning or controlling
51% or more of the outstanding voting securities or interest in capital or
profits of Agent and (z) any officer, director, or partner of Agent.
Notwithstanding the foregoing, Owner acknowledges and consents to contracts with
Affiliates of Agent.
(e) Maintenance. (1) Agent shall cause the Building to be maintained in a
good and safe condition comparable to that of other properly maintained
properties of similar type and location.
(2) To the extent of the capacity of all equipment and systems located in
or servicing the Building, Agent shall cause all such equipment and systems to
be operated effectively and maintained in good repair. Further, Agent shall
cause to be provided or made available to Tenants those services which Owner is
required to provide or make available under their respective Leases.
(3) Subject to an Approved Budget, Agent shall negotiate on behalf of Owner
contracts for water, electricity, gas, fuel, oil, telephone, vermin
extermination, trash removal, and other services necessary or advisable for the
operation of the Building. All professionals and other service providers whose
services are to be retained in respect of the Building, pursuant to this Section
3(e)(3), may be designated by Agent at its discretion, provided, however, if (a)
any such professional is retained for a term in excess of one (1) year or (b)
the terms of such contract with any such professional or other service provider
require payment to such professional or other service provider in excess of
$20,000, then Owner shall have the right to disapprove of such contract with
such professional or other service provider. Agent shall also place orders in
the name of Owner for such equipment, tools, appliances, materials and supplies
as are reasonable and necessary to maintain properly the Building, subject to
any applicable limitations contained in an Approved Budget.
(f) Repairs. Subject to an Approved Budget, Agent shall cause such ordinary
and necessary repairs to be made to the Building and all equipment and systems
located in or servicing the Building, as shall be deemed necessary or advisable
for its proper operation and maintenance. Notwithstanding the cost limitations
set forth in Section 4(a) hereof or the first sentence of this paragraph, Agent
may cause to be made all repairs that are immediately necessary for the
preservation or protection of the Building or the safety of Tenants and other
3
<PAGE>
persons in or on the Building, or are otherwise required to avoid the suspension
of any necessary services in the Building, without Owner's prior approval and
without limitation as to cost; provided, however, that in each such instance
Agent shall, before causing any such emergency repair to be made, use reasonable
efforts under the circumstances to notify Owner of the emergency situation and
the need for such action.
(g) Supervision of Tenants. (1) In order to insure minimum disturbance to
the operation of the Building and to other Tenants then occupying or preparing
to occupy space in the Building, Agent shall plan and coordinate the moving in
and moving out of Tenants and all construction, alteration, and decoration work
Owner is required under Leases to perform for Tenants.
(2) Agent shall receive, and use reasonable efforts to attend to and
resolve, all complaints of Tenants and shall attempt to resolve any complaints,
disputes, or disagreements by or among Tenants but shall not expend, on behalf
of and at the cost of Owner, more than $5,000 to settle any dispute with a
Tenant without having obtained the prior written consent of Owner.
(3) Agent shall monitor all Tenants to insure their compliance with the
terms and provisions of their respective Leases, including, without limitation,
the Rules and Regulations of the Building. Agent shall notify the respective
Tenants and Owner of any material violations of such Leases and use reasonable
efforts to cause such Tenants to correct all violations promptly.
(h) INTENTIONALLY OMITTED
(i) Advertising - Public Relations. Subject to the Approved Budget, on
behalf of and at the cost of Owner, Agent shall hire such advertising services,
place such advertisements, and generally supervise and attend to all promotional
matters pertaining to the operation of the Building as Agent shall deem
advisable. Agent shall represent Owner in connection with all matters of general
public interest and which pertain to the Building, and shall attempt to amicably
resolve any complaints, disputes, or disagreements in connection therewith as
promptly as is reasonably possible.
(j) Compliance. (1) Subject to an Approved Budget, Agent shall take or
cause to be taken all such appropriate actions in and about or affecting the
Building as shall be necessary to comply with all legal requirements applicable
to the Building and those of any Board of Fire Underwriters or similar agency
having jurisdiction over the Building.
(2) Notwithstanding the cost limitations set forth in Section 4(a) hereof
or this Section 3(j), Agent may, without Owner's prior written approval, take or
cause to be taken any such actions if failure to do so would or might, in
Agent's reasonable judgment, expose Owner or Agent to criminal liability;
provided, however, that in each such instance Agent shall, before taking or
causing to be taken any such action, use reasonable efforts under the
circumstances to notify Owner of the need for such action. Agent and Owner shall
each promptly notify the other of any violation, order, rule or determination of
any governmental authority or Board of Fire Underwriters or similar agency that
affects the Building.
4
<PAGE>
(k) Payment of Expenses. Agent, on behalf of Owner, shall coordinate the
payment of, with funds from the Operating Accounts (defined in Section 6(b)
hereof), all expenses Agent shall have incurred under the terms of this
Agreement including, without limitation, Agent's compensation under this
Agreement. Agent shall at all times use all commercially reasonable efforts to
obtain for Owner, and shall credit to the account of Owner in each case, all
discounts, rebates, and other favorable financial terms that may be available to
Agent from third parties in connection with any costs or expenses Agent shall
incur under this Agreement.
(l) Leasing. Agent shall negotiate Leases for space in the Building;
provided, however, such Lease shall be subject to Owner's approval as provided
for in Section 8 hereof.
(m) Coordination of Tenant Finish Work. Throughout the term of this
Agreement, Agent shall supervise, coordinate and expedite the completion of all
tenant finish work with respect to each Lease at an additional cost to Owner of
twenty (20%) percent of the "hard" costs of construction, including the cost of
printing and obtaining permits (the "Construction Management Fee"). The
Construction Management Fee shall be payable to Agent on a monthly basis, if
Agent, on behalf of Owner, is hired by Owner to supervise the tenant work. The
Construction Management Fee shall not be payable to Agent, if a tenant is
supervising and paying for its own tenant work. Agent's duties and
responsibilities if hired in connection with the foregoing shall include,
without limitation, (i) finalizing space plans and obtaining prices of materials
and services related to the tenant finish work, (ii) assisting the Tenant in the
selection of tenant finish materials and in such other matters as the Tenant may
reasonably request, (iii) coordinating planning and construction activities
among the architect, contractor and Tenant in order to facilitate the prompt
completion of all such activities while minimizing any disruption of normal
building operations, and (iv) monitoring construction to ensure that the tenant
finish work is performed in compliance with the plans and specifications
approved in writing by Owner in connection therewith. In the event Agent is not
hired by Owner to supervise the tenant work, Agent shall have no obligation or
responsibility for the quality, impact or effect of such tenant work, including
but not limited to, the impact or effect on the Building and Building systems.
(n) General Duties. In addition to the duties more particularly described
in this Section 3, Agent shall be responsible for the implementation of any and
all decisions of Owner, upon its request, and for initiating and taking such
other actions (not inconsistent with this Agreement) in the management and
administration of the Building so as to achieve the maximum efficiency and
success thereof for the benefit of Owner.
4. Limitations of Agent's Powers and Authority.
(a) Expenditures. Except to the extent provided for in an Approved Budget
or as otherwise specifically provided in Sections 3(f) and 3(j) with respect to
emergency situations, or in Section 3(e)(3) with respect to service contracts,
Agent shall not, without the prior written
5
<PAGE>
approval of Owner, incur any single expense for a repair, alteration, service,
supply, or other matter that would involve a cost in excess of $5,000.
(b) Debt Service, Refinancings and Sales of the Property. Agent shall not
be responsible for the payment of any debt service, ground rentals, or other
amounts due under mortgages or ground leases which may from time to time affect
the Building. In addition, Agent shall not be required to represent Owner in
connection with any refinancings affecting, or sales of, the Building.
5. Operating Budgets.
(a) Budget for First Operating Year. Attached hereto as Exhibit B is a true
and correct copy of Owner's operating budget for 1996. Agent and Owner shall use
their good faith and best efforts to establish a budget for all costs pertaining
to the operation and maintenance of the Building during the initial Operating
Year (i.e., the period from the Commencement Date through December 31, 1997)
within 30 days after the Commencement Date. Such budget shall (y) set forth
expenditures on an annual and a monthly basis, and (z) not, except for
informational purposes, include estimates for costs and expenses for which Owner
will be reimbursed by Tenants under Leases. Pending the Owner's approval of a
budget for the initial Operating Year, the provisions of Section 5(d) shall
apply.
(b) Annual Budgets After First Operating Year. Agent shall prepare and
submit to Owner for its approval at least 45 days before the beginning of each
Operating Year (as defined in Section 5(c) hereof) subsequent to the first
Operating Year, a proposed pro forma budget for all costs pertaining to the
operation and maintenance of the Building during such Operating Year. Each such
budget shall (x) be in substantially the same form as the Approved Budget in
effect for the prior Operating Year, (y) set forth expenditures on an annual and
a monthly basis, and (z) not, except for informational purposes, include
estimates for costs and expenses for which Owner will be reimbursed by Tenants
under Leases. Agent shall make such modifications to each proposed pro forma
budget it prepares in accordance with this Section until Owner shall have
approved this budget in writing.
(c) Approved Budgets and Operating Years. Each pro forma operating budget
approved by Owner in accordance with Sections 5(a) and 5(b), together with any
adjustments thereto, shall be deemed to be the "Approved Budget" for the period
covered by the budget. Each Approved Budget for each year following the initial
Operating Year shall cover a period which shall begin January 1 and end December
31 and which is referred to in this Agreement as an "Operating Year".
(d) Limitations of Approved Budgets. Except as otherwise specifically
provided in this Agreement, Agent shall incur costs and expenses (excluding
costs and expenses for which Owner will be reimbursed by Tenants) in connection
with the operation and maintenance of the Building during any Operating Year
only within the limitations established by the Approved Budget for such
Operating Year. In the event there shall be a material variance between the
results of operations for any month and the estimated results of operations for
such
6
<PAGE>
month as set forth in an Approved Budget, Agent shall furnish to Owner
along with the monthly report for such month a written explanation as to why
such variance occurred.
If any Operating Year shall commence before Owner shall have approved the
proposed pro forma budget for such year, Agent shall use its reasonable judgment
in incurring costs and expenses relating to the operation and maintenance of the
Building (during such Operating Year) until an Approved Budget for such
Operating Year shall be in effect, and in doing so shall be guided by the
Approved Budget for the prior Operating Year. In such case, Agent shall be
subject to the same financial limitations established by the last effective
Approved Budget as if such budget had been in effect for the then current
Operating Year, increasing, however, the amount of funds established for costs
and expenses relating to utility charges, real estate taxes, insurance or other
matters that are not within Agent's reasonable control and which, if not
incurred, would adversely and materially affect the operation and maintenance of
the Building, by the amount necessary to pay such utility charges, real estate
taxes and insurance premiums in full, and with respect to such other matters
that are not within Agent's reasonable control, by not more than five percentage
points in excess of the New Index less the Base Index. (The "Index" shall mean
the Revised Consumer Price Index for Urban Wage Earners and Clerical Workers for
the New York - Northeastern New Jersey Area, 1967=100, published by the United
States Department of Labor, Bureau of Labor Statistics. "Base Index" shall mean
the Index published in respect of January (or if not published the month closest
preceding January in which the Index is published) of the year covered by the
then effective Approved Budget, and "New Index" shall mean the Index published
in respect of January (or if not published, the month closest preceding January
in which the Index is published) of such year. In the event the Base Index or
the New Index shall no longer be published, a substantively similar index of
inflation will be substituted in order to give effect to the intentions of the
parties.)
6. Books, Records, Accounts, Reports and Remittances.
(a) Books and Records. Agent shall establish and maintain such books of
account, records and other documentation pertaining to the operation and
maintenance of the Building as are customarily maintained by managing agents of
properties in Westchester County. Agent shall prepare or cause to be prepared
and file all returns and other reports relating to the Building, other than
income tax returns as may be required by any governmental authority or otherwise
under this Agreement. During the term of this Agreement, all such books and
records, as well as all other books and records of Agent that relate to the
Building, shall be available for inspection and audit by Owner at its expense at
all reasonable times during normal business hours. All such books and records
shall be delivered promptly to Owner pursuant to Section 10(d) upon the
termination of this Agreement.
(b) Operating Accounts. Agent, in the name of Owner, shall open and
maintain an account or accounts (collectively, "Operating Accounts"), as Owner
shall deem necessary or appropriate, in a banking institution or institutions in
Westchester or New York County (designated from time to time by Owner) in
Owner's name. Agent shall deposit in the Operating Accounts all funds collected
by Agent under this Agreement and all funds deposited in the Operating Accounts
shall be and remain Owner's property. Notwithstanding the foregoing,
7
<PAGE>
Agent shall be permitted to endorse all checks for deposit only into the
Operating Accounts. Owner may periodically remove funds in excess of those
needed by Agent to operate and maintain the Building in accordance with this
Agreement.
(c) Security Deposits. Agent shall deposit and maintain in separate
accounts approved by Owner in accordance with applicable laws and Leases, all
security deposits of Tenants.
(d) Monthly Reports. Agent shall prepare and deliver to Owner a monthly
report within 45 days after the end of each calendar month, setting forth
detailed statements of collections, disbursements, delinquencies, uncollectible
accounts, balances of Operating Accounts, accounts payable, expenses, and other
matters relating to the Management Activities. These statements shall, upon
Owner's request, be accompanied by appropriate documentation of all expenditures
made by Agent under this Agreement.
(e) Quarterly Statements. Agent shall prepare and deliver to Owner on a
quarterly basis within 45 days after the end of each calendar quarter, Agent's
written estimates of the amounts, if any, by which any major categories of the
Approved Budget must be adjusted to fund adequately the operation and
maintenance of the Building for the then current quarter. Agent also shall
furnish Owner with such further information covering the operation and
maintenance of the Building as Owner may reasonably require.
(f) Year-End and Final Reports. As soon as practicable after the end of
each Operating Year and after the expiration or termination of this Agreement
(but in any event prior to 105 days after the end of such Operating Year or
expiration or termination), Agent shall prepare and deliver to Owner a statement
of income and expenses showing the results of operations for the calendar year
or portion thereof during which the provisions of this Agreement were in effect,
and any other information that may be necessary to file income tax returns or
that may be required by any governmental authority (to the extent available to
Agent). Each annual statement of income and expenses report shall be prepared in
accordance with generally accepted accounting principles (on an accrual basis,
unless otherwise requested by Owner).
7. Owner's Duties.
(a) Plans, Specifications, and Documents. As such are available to Owner,
Owner shall make readily available to Agent copies of the plans and
specifications of the Building and a recent survey of the property and shall
provide Agent with such information and materials pertaining to the layout and
construction of the Building, the elevators and lighting of the Building, and
the heating, air conditioning, ventilating, plumbing, electrical, and other
mechanical systems and equipment in or servicing the Building as Agent may
reasonably request. As such are available to Owner, Owner shall also provide
Agent with copies of, or convenient access to, all agreements, licenses,
certificates, permits, contracts, bills, notices, and other documents pertaining
to the Building.
8
<PAGE>
(b) Insurance. Owner shall maintain such policies of public liability,
workers' compensation, employer's liability, fidelity bond, and other insurance
as may be necessary for the protection of the interest of Owner and Agent or as
Agent otherwise may reasonably request in the performance of the Management
Activities. Owner shall designate Agent under these policies as an additional
party insured thereunder. Owner shall select an issuer of each policy (which
shall in all cases be an insurance company licensed to do business in the State
of New York, with an A-VIII rating or better in Best's Insurance Guide), the
amount of coverage under each policy, and the broker or agents therefor.
8. Leasing.
(a) Relationship of Owner and Agent with Respect to Leasing. Owner
acknowledges that Agent is the exclusive leasing agent for the Property. In the
event Agent leases space at the Property, Agent shall be entitled to a
commission in accordance with Section 9(d) hereof. Agent agrees that it will
cooperate with outside brokers in order to achieve the leasing objectives of the
Owner. Agent shall procure references from prospective Tenants, investigate such
references, and use its best judgment in the selection of prospective Tenants,
provided however, that in no event and under no circumstances shall Agent be
deemed a guarantor or surety of any obligation of any Tenant. Agent agrees to
perform whatever service may be reasonably required in connection with the
negotiation of Leases or renewals, extensions, modifications, or cancellations
thereof. Leasing commissions shall be paid by Owner from the Operating Accounts
or collateral accounts established pursuant to a loan agreement with Owner's
lender.
(b) Leasing Plan. Not later than 45 days prior to the start of 1998 and
each succeeding calendar year, Agent shall develop a plan for all space that is
anticipated to be available for leasing during the coming year (the "Leasing
Plan"). The Leasing Plan will identify the individual space and indicate the
number of square feet, the existing Tenants, current base rent and percentage
rent (if any) and Lease expiration date.
(c) Monthly Leasing Reports. Agent shall prepare monthly leasing reports
for Owner. Said reports shall be forwarded to Owner within 45 days after the end
of each calendar month during the term of this Agreement. Such reports shall set
forth Agent's activities during the preceding month, including a brief
description of the progress of all significant leasing negotiations during that
month and all significant contacts had with each prospective Tenant during the
month in question, the name of the representative of each such prospective
Tenant, the name, address, and telephone number, if available, of the
representative of each Tenant who has accepted occupancy or vacated its premises
during the month and the dates of such occupancies or vacancies, and a brief
description of any litigation concerning collection proceedings. The report will
also generally describe the progress of Agent's leasing program from the end of
the prior report to the date of the report.
(d) Lease Proposals. All Lease proposals must be made to the Owner in
writing. At the time of the submission of the Lease proposal to Owner, Agent
shall forward to Owner the results of a current financial investigation of the
potential Tenant, together with
9
<PAGE>
Agent's business recommendations regarding the Leasing, and an estimate of the
leasing commissions. All final Leases shall be written on the form of space
tenant leases then being used by or approved by Owner. The final Lease shall be
prepared by Owner's attorneys, or at Owner's option, Agent or Agent's attorneys.
The prepared Lease will be forwarded to the potential Tenant for such Tenant's
signature. Upon execution by the Tenant, the Lease (together with an abstract of
that Lease prepared by Agent on a form approved by both Owner and Agent) shall
be returned to the Owner for its signature.
(e) Post-Termination Leases. If within six (6) months prior to the
termination of this Agreement Agent has commenced negotiations with a bona fide
prospect listed by Agent with Owner at the expiration or termination of this
Agreement (i.e., a prospect that has visited the site and expressed a written
interest therein or in connection with a current tenant or occupant of the
Building a prospect that has executed an agreed upon term sheet) and if within
six (6) months after the expiration or termination of this Agreement a Lease is
executed, or a contract to lease is entered into with such bona fide prospect,
then Owner shall recognize Agent as the broker for any such transaction and
shall pay to Agent the commission according to the applicable terms and
conditions of this Agreement.
(f) Personnel. Agent shall submit to Owner, for informational purposes
only, the resumes of all personnel who have primary responsibility for the
leasing of the Building.
9. Compensation - Management and Leasing Fees.
(a) Amount and Payment. Owner shall pay Agent an annual fee for its
performance of the Management Activities in an amount equal to four per cent
(4.0%) (the "Management Fee") of the gross income from the operation of the
Building for the Operating Year with respect to which such fee shall be payable.
This fee shall be payable in monthly installments in arrears in accordance with
Section 3(k).
(b) Gross Income. For the purposes of this Section, the "gross income from
the operation of the Building" shall mean all amounts actually collected by
Agent as rents or other charges for use and occupancy of the Building, but shall
exclude all income derived from interest or investments or otherwise, proceeds
of claims on account of insurance policies, abatement of taxes and awards
arising from eminent domain proceedings or the threat thereof, discounts,
forfeited deposits, deposits, dividends on insurance policies, a sale of the
Building or any financing proceeds.
(c) Additional Fees. Except for construction management services as set
forth in Section 3(m) hereof, Agent shall not charge Tenants additional fees for
services which are to be retained by Agent and not credited to Owner without
Owner's express prior approval, which approval shall not be unreasonably
withheld or delayed.
(d) Leasing. Subject to Section 9(e) below, Owner agrees that if a Lease of
all or any part of the Building is entered into by Owner during the term of this
Agreement or pursuant to Section 8(e) hereof, Owner shall pay Agent a leasing
commission (the "Leasing
10
<PAGE>
Commission") in accordance with Exhibit A attached hereto and made a part hereof
for all purposes; provided, however, that the form and content of any such Lease
shall be satisfactory to Owner in its sole and absolute discretion
(e) Deault. Agent shall not be entitled to any commission in the event of a
default by Agent under this Agreement, excepting such commissions otherwise
accrued prior to the occurrence of an event of default.
(f) Sale. Agent understands that this Section relates to Leases only and
Agent shall have no right to a commission or other compensation in the event of
any sale or financing of the Property, whether or not to a tenant or pursuant to
any option or right of first refusal contained in any Lease.
(g) Expense of Owner. All expenses incurred by Agent in performing its
obligations pursuant to Section 3 hereof, including third party accounting, tax
and legal expenses, shall be considered an operating expense borne by Owner,
except as otherwise specifically provided in this Section 9 or elsewhere herein
and except that Owner shall not be obligated to reimburse Agent for any expenses
(i) for office equipment or office supplies of Agent for any overhead expense of
Agent incurred in its general offices, (ii) for any salaries of executive
employees of Agent, (iii) for any salaries or wages allocable to time spent on
projects other than the Building, or (iv) for any salaries, wages, and expenses
for any personnel other than personnel spending a portion of their working hours
(to be charged on a pro rata basis) directly involved in the management of the
Building or in specifically performing Agent's management duties hereunder,
whether on or off Building site. All payments to be made by Agent hereunder for
which Agent is entitled to be reimbursed shall be reimbursed from funds
deposited in the Operating Account. Agent shall not be obligated to make any
advance to or for the account of Owner or to pay any sums, except out of funds
held in the Operating Account, nor shall Agent be obligated to incur any
liability or obligation for the account of Owner without the assurance that the
necessary funds for the discharge thereof will be provided.
10. Default - Termination.
(a) Optional Termination. Owner and Agent may terminate this Agreement at
any time if the other shall default in the performance of any of its material
obligations under this Agreement. In such event, the party declaring the default
shall provide the other party (the "Recipient") with written notice thereof
setting forth the nature of the default, and the Recipient shall have (i) ten
days to cure a monetary default or (ii) 30 days to cure a non-monetary default,
provided however, that if the nature of the alleged non-monetary default is such
that it cannot reasonably be cured within 30 days, the Recipient may cure such
default by commencing in good faith to cure such default promptly after its
receipt of such written notice and prosecuting the cure of such default to
completion with diligence and continuity within a reasonable time thereafter.
This Agreement may be terminated by Owner upon written notice to Agent,
effective as of the date stated to be the termination date in said notice, if
any of the five Management and Leasing Agreements entered into by Agent
(contemporaneously with the execution and delivery of this Agreement) relating
to properties owned by Owner or companies affiliated with Owner
11
<PAGE>
shall be terminated by the Owner (defined in each such Agreement) by reason of
Agent's failure to perform its obligations thereunder.
(b) Automatic Termination. This Agreement shall terminate automatically if:
(i) all or substantially all of the Building is condemned or acquired by
eminent domain;
(ii) all or substantially all of the Building is destroyed by fire or other
casualty as a result of which all or substantially all of the Tenants are unable
to continue the normal conduct of their businesses in their respective occupied
spaces or are permanently released under their respective Leases from the
payment of all rent thereunder;
(iii) Owner or Agent shall (v) commence a voluntary case or action under
the federal bankruptcy laws, as now or hereafter constituted, or any other
applicable federal or state bankruptcy, insolvency or other similar law, or (w)
consent to the appointment of, or taking possession by, a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar official) of Owner
or Agent (as the case may be) or of any substantial part of its property, or (x)
make any assignment of any substantial part of its property for the benefit of
creditors, or (y) fail generally to pay its debts as such debts become due, or
(z) take action in furtherance of any of the foregoing;
(iv) a court having jurisdiction over Owner or Agent (as the case may be)
shall enter a decree or order for relief in respect of Owner or Agent (as the
case may be) in an involuntary case under the federal bankruptcy laws, as now or
hereafter constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, or appoint a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of Owner or Agent (as the
case may be) or of any substantial part of its property, or for the winding-up
or liquidation of its affairs, and such decree or order shall continue unstayed
and in effect for a period of 60 consecutive days; or
(v) the Building is sold to a third party purchaser.
(c) Survival of Obligations. Upon the expiration or termination of this
Agreement (i) Owner's appointment of Agent hereunder shall cease and terminate
and, except as otherwise specifically provided hereunder, Owner and Agent shall
have no further obligation or liability to the other, (ii) Agent shall no longer
have any authority to represent Owner or take or cause to be taken any actions
on Owner's behalf, and (iii) Owner shall pay Agent all fees that shall have
accrued through the date of termination. The provisions of this Section shall
survive any such expiration or termination. Anything herein to the contrary
notwithstanding, in the event this Agreement is terminated as a result of a
default described in Section 10(a) hereof, such termination shall not relieve
the defaulting party of any liability for actual damages, if any, incurred by
the non-defaulting party as a result of such default.
12
<PAGE>
(d) Return of Owner's Property. Agent shall use reasonable efforts to
deliver to Owner all books, records, Leases, agreements, and other documents
that are necessary or materially pertinent to the future management of the
Building and which were delivered by Owner to Agent as soon as possible, and in
any event, within 30 days after the expiration or termination of this Agreement.
Following such termination, Agent shall cooperate with the new manager appointed
by Owner for a reasonable period of time to insure a smooth transition of the
management of the Building.
11. Indemnification.
(a) Owner Indemnification. Owner shall indemnify, and, if required by
Agent, defend, at Owner's sole cost and expense (using counsel selected by
Owner's insurance carrier), and hold Agent, its shareholders, partners, members,
employees, agents, officers and directors free and harmless from and against any
and all claims, demands, causes of action, losses, damages, judgments,
liabilities, costs and expenses (including, without limitation, attorneys' fees
and court costs) (collectively, "Claims") arising out of the operation and
management of the Building, except Claims caused by or resulting from the
negligence or misconduct of Agent, its shareholders, partners, members,
employees, agents, officers or directors, or caused by or resulting from the
breach of any of Agent's obligations under this Agreement by Agent, its
shareholders, partners, members, employees, agents, officers or directors.
(b) Agent Indemnification. Agent shall indemnify, and, if required by
Owner, defend, at Agent's sole cost and expense (using counsel selected by
Agent's insurance carrier), and hold Owner, its employees, agents, and partners
free and harmless from and against any and all Claims sustained or incurred by
or asserted against Owner, its employees, agents and/or partners, as a result of
or arising from the gross negligence or willful misconduct of Agent, its
shareholders, partners, members, employees, agents, officers or directors, or
caused by or resulting from the breach of any of Agent's obligations under this
Agreement by Agent, its shareholders, partners, members, employees, agents,
officers or directors.
12. Timely Performance. Owner and Agent shall each perform all of their
respective obligations under this Agreement in a proper, prompt, and timely
manner. Each shall furnish the other with such information and assistance as the
other may from time to time reasonably request in order to perform its
responsibilities under this Agreement. Owner and Agent each shall take all such
actions as the other may from time to time reasonably request and otherwise
cooperate with the other so as to avoid or minimize any delay or impairment of
either party's performance of its obligations under this Agreement. Agent shall
not be obligated to perform any services required of it pursuant to the
provisions of this Agreement unless the rental income from the Building and the
funds required by the provisions of this Agreement to be provided by Owner shall
be sufficient to pay for such services, provided however, that the lack of such
income and funds shall in no event limit the obligations of Agent to provide the
services generally described in clauses (i), (ii), (iii) and (iv) of the first
sentence of Section 9(g).
13. Assignment.
13
<PAGE>
(a) Permissible Assignments. Neither Owner nor Agent may assign or transfer
this Agreement without the prior written consent of the other, provided however,
that either party may assign this Agreement to an Affiliate.
(b) Assumption and Release. Each permitted assignee of this Agreement shall
agree in writing to personally assume, perform, and be bound by all of the
terms, covenants, conditions, and agreements contained in this Agreement, and
thereupon the assignor of this Agreement shall be relieved of all obligations
under this Agreement except those which shall have accrued before the
effectiveness of such assignment.
14. Notices.
(a) General. Any and all notices or other communications given under this
Agreement shall be deemed to have been properly given when delivered, if
personally delivered, or three days after the date mailed if sent by certified
or registered mail, return receipt requested and postage prepaid, or the first
business day after the delivery of same (with payment of shipping costs) to a
nationally recognized overnight carrier (e.g., Federal Express) and addressed to
the parties at the following addresses:
If to Agent, to:
Cali Services, Inc.
c/o Realty Corporation
11 Commerce Drive
Cranford, New Jersey 07016
Attn: Roger W. Thomas, Esq.
If to Owner, to:
Robert Martin Company, LLC
100 Clearbrook Road
Elmsford, New York 10023
Attention: Mr. Robert F. Weinberg
and
Robert Martin Company, LLC
100 Clearbrook Road
Elmsford, New York 10523
Attention: Lloyd I. Roos, Esq.
Any notice delivered by either party in any manner other than those
described above shall be deemed properly given when received. Either party may
change its address for the giving of notices under this Agreement by delivering
to the other party ten days' written notice of the change of address.
14
<PAGE>
(b) Emergency Notices. Either party may give the other notice of emergency
situations, orally (personally, by telephone, or otherwise) or by telecopy,
telex, telegram, or other method, provided that the party giving any such
emergency notice shall confirm the same by written notice in accordance with
Section 14(a).
15. Miscellaneous.
(a) Applicable Law. This Agreement shall be construed and enforced in
accordance with, and governed by, the laws of the State of New York.
(b) Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties and supersedes all prior agreements and
understanding relating to the subject matter hereof.
(c) Modifications. This Agreement may not be modified, amended, or
terminated, nor may any term or provision hereof be waived or discharged, except
in writing signed by the party against whom such amendment, modification,
termination, waiver, or discharge is sought to be enforced.
(d) Binding Effect. All of the terms of this Agreement, whether so
expressed or not, shall be binding upon the respective successors and permitted
assigns of the parties hereto and shall inure to the benefit of and be
enforceable by the parties hereto and their respective successors and permitted
assigns.
(e) Partial Invalidity. If any of the provisions of this Agreement shall to
any extent be invalid or unenforceable, the remaining provisions of this
Agreement shall not be affected thereby and every provision of this Agreement
shall be valid and enforceable to the fullest extent permitted by law.
(f) Headings. The headings of this Agreement are for purposes of reference
only and shall not limit or otherwise affect the meaning hereof.
(g) Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(h) Notice of Commencement of Proceedings. Owner and Agent shall give
notice to each other of the commencement of any action, suit or proceeding
against Owner or Agent with respect to the operation of the Building, or
otherwise affecting the Building.
(i) Cooperation by Agent. Agent, at Owner's expense, shall cooperate and
cause its employees to cooperate, in connection with the prosecution or defense
of all legal proceedings affecting the Building.
15
<PAGE>
(j) Conflict of Interest. Owner acknowledges that Agent's ownership and
active management (and the ownership and active management by companies
affiliated with Agent) of facilities competitive with the Building shall in no
event be deemed a conflict of interest or a violation of Agent's obligations
hereunder, provided however, that in no event shall Agent, its employees or
agents devote less time, attention and energy to the management and leasing of
the Building as a result of the Building not being owned by Agent or an entity
controlling, controlled by, or under common control with, Agent.
(k) Owner recognizes that this Management Agreement is entered into as a
part of the sale of certain properties by Owner, and the purchase of those
properties by affiliates of Agent, as evidenced by the Contribution and Exchange
Agreement dated January , 1997 (the "Exchange Agreement"). Accordingly, it is
the intent of the parties hereto that the Agent shall manage the Building in
substantially the same form and manner as it had been managed prior to the
closing under the Exchange Agreement. In this regard, all Monthly Reports,
Quarterly Statements, Year-End Reports Leasing Plans and Monthly Leasing Reports
shall continue to contain the same information as had been provided prior to the
closing under the Exchange Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
16
<PAGE>
instrument to be duly executed by their duly authorized officers as of the day
and year first above written.
OWNER:
ROBERT MARTIN COMPANY, LLC
By:
------------------------------
Name:
Title:
AGENT:
CALI SERVICES, INC.
By:
------------------------------
Name:
Title:
17
<PAGE>
EXHIBIT A
Schedule of Lease Commissions
A. LEASE COMMISSIONS:
Commissions shall be payable in accordance with the following payment
schedule and rate:
1. Payment Schedule of Commissions:
(a) 100 percent (100%) upon the actual occupancy by such tenant of the
leased premises and the payment of the first regular installment of fixed rent
under the lease (as opposed to a security deposit or the payment of the first
month's rent at signing).
2. Rates:
(a) In all leases not involving outside Brokers (as defined below), leasing
commissions are paid as follows:
(i) six percent (6%) of the total Gross Rents (as defined below) for
years 1 through 3 of the lease term;
(ii) three percent (3%) of the total Gross Rents for years 4 through
10 of the lease term; and
(iii) one percent (1%) of the total Gross Rents for years 10 through
20 years of the lease term.
(b) In all Leases involving brokers or real estate salesman not affiliated
with Agent ("Outside Brokers") (for purposes of this Agreement, employees of
Agent or any entity controlling, controlled by, or under common control with,
Agent shall not be recognized as Outside Brokers), fifty percent (50%) of the
total leasing commission payable pursuant to Section A(2)(a) of this Exhibit A
to Agent, out of which Agent shall pay any commission owing to the Outside
Broker. It is agreed and understood that Owner shall have the right to
separately negotiate any commission paid to Outside Brokers.
B. TERMS AND CONDITIONS OF LEASE COMMISSIONS:
The above payment schedule and rates are subject to the following terms and
conditions:
1. Term of More than Twenty Years:
<PAGE>
If a lease term (including any and all renewal periods) is in excess of
twenty (20) years, then no commission shall be paid for that period following
the twentieth (20th) anniversary of the lease commencement date, unless agreed
to in writing by Owner and Agent.
2. Option(s) to Renew or Extend Lease or to Option(s) to Expand Premises:
If a lease for which a commission is payable under this Agreement contains
an option(s) to renew or extend, and a lease term(s) is renewed or extended
pursuant to such option and the tenant commences payment of regularly scheduled
monthly minimum or base rental following the expiration of all rental abatement
[during the term of this Agreement], then subject to paragraph B(1) of this
Exhibit A, Owner shall pay a leasing commission, with respect to the term of the
renewal or extension, equal to fifty percent(50%) of the leasing commission
payable pursuant to Section A(2) of this Exhibit A payable during such renewal
or extension period (not to exceed twenty years) and no other sums shall be owed
with respect to such lease; subject, however, to the condition that Agent shall,
upon Owner's request, participate in the negotiation of the renewal or extension
(whether evidenced by a new lease or an amendment to the then existing lease);
and further subject to the condition that if a real estate broker or agent
(other than Agent) has been designated by such tenant to represent it, then the
payment shall be in accordance with Paragraph A(2)(b) of this Exhibit A.
If a lease for which a commission is payable hereunder contains an
option(s) to expand, and a tenant exercises such option and occupies additional
space pursuant to such option and commences payment of regularly scheduled
monthly minimum or base rental following the expiration of all rental abatement
[during the term of this Agreement], then subject to paragraph B(1) of this
Exhibit A, Owner shall pay leasing commission, with respect to the additional
space, equal to fifty percent(50%) of the leasing commission which would be
payable pursuant to Section A(2)(a) of this Exhibit A in respect of such
additional space; subject, however, to the condition that if a real estate
broker or agent (other than Agent) has been designated by such tenant to
represent it, then the payment shall be in accordance with Paragraph A(2)(b) of
this Exhibit A.
3. Gross Rents:
For the purposes of this Agreement, the term "Gross Rents" shall mean the
aggregate amount of minimum or base rental to be paid by a tenant during the
applicable portion of the term of such tenant's lease with respect to the
applicable portion of the leased premises subject to such lease, but shall
exclude the following:
(a) Escalations in excess of the original minimum or base
rental for each year, as stated in the lease, including without limitation,
escalations resulting from increases in ad valorem/real estate taxes, in
operating expense pass-throughs and/or in the Consumer Price Index or similar
index resulting in a corresponding increase to the minimum or base rental (if
applicable).
2
<PAGE>
(b) Rentals credited to any tenant by reason of lease takeover or lease
pick-ups and/or Owner take-back or subleasing.
(c) Additional rentals (whether or not called, or included in, "Base
Rental" or any similar term in tenant's lease) for special tenant services
specifically negotiated for by the tenant above and over Owner's customary
tenant services, including without limitation the amortization of the cost of
tenant improvements to the extent Owner is providing tenant improvements (or
cash allowance in lieu thereof ) above and over Owner's customary standard
tenant finish.
(d) Cancellation or penalty payments for termination rights.
(e) Late payment charges.
(f) Payments for parking.
(g) Rentals payable upon continuation of a tenancy on a month-to-month or
statutory basis or any other tenancy following the expiration or termination of
the lease.
(h) Percentage rental in the case of retail leases, excepting percentage
rent only in retail leases.
(i) Cash credits, payment deferments or abatements of rents or other
concession items.
(j) Sums designated as "additional rent" under the lease, except to the
extent such "additional rent" actually represents increases in "base rental" and
is not otherwise excludable under this paragraph 3.
(k) Security deposits (including any amounts necessary to restore any
security deposit after application of same.)
(l) Rent for services or facilities available to tenant at locations other
than the leased premises covered by the lease.
4. No leasing commission shall be deemed earned or payable on the
cancellation portion of a lease term. A commission shall be payable only on the
noncancellable portion of the lease term, and such term shall apply for the
purposes of calculating the commission earned and payable. In the event the
lease is not canceled, then an additional leasing commission shall be due for
the remaining lease term.
5. Notwithstanding anything to the contrary contained in this Exhibit A,
any commission payable to Agent hereunder in respect of new leases, expansions
of leased premises, and renewals or extensions of lease terms shall be reduced
by the amount of commissions, if any, which Owner is obligated to pay any prior
broker ("Prior Broker") under any prior agreements relating to the Building in
connection with any such leases, expansions or renewals or
3
<PAGE>
extensions, including, without limitation, any tenant which has been referred to
the Building by, registered with Owner by, been submitted a proposal or been
listed as a tenant prospect by, Prior Broker prior to the Commencement Date, and
any tenant under a lease for space on the Building existing as of the
Commencement Date.
The provisions hereof are subject to the terms and provisions of the Management
and Leasing Agreement to which this Exhibit A is attached.
4
<PAGE>
EXHIBIT 8.1
AMENDED AND RESTATED REPLACEMENT NOTE
AGREEMENT, dated as of this __ day of January, 1997, between CALI
REALTY, L.P., a Delaware limited partnership having an office c/o Cali Realty
Corporation, 11 Commerce Drive, Cranford, New Jersey 07016 ("Payee") and ROBERT
MARTIN COMPANY, LLC, a New York limited liability company, having an address at
100 Clearbrook Road, Elmsford, New York 10523 ("Maker").
W I T N E S S E T H
WHEREAS, Payee is the owner and holder of those certain notes in the
principal amount of $11,600,000 securing those mortgages more particularly
described on Exhibit A annexed hereto (the "Notes"); and
WHEREAS, Payee and Maker wish to amend, restate, replace and modify the
Notes in their entirety in the manner hereinafter set forth.
NOW, THEREFORE, in consideration of $1.00 and other good and valuable
consideration, receipt and sufficiency of which are hereby acknowledged, the
parties hereto covenant and agree as follows:
A. Maker shall pay the indebtedness evidenced by the Notes and all
interest thereon at the rate of interest and on the terms provided for below,
which terms shall constitute a renewal, extension, modification and restatement
of the terms of the Notes, all of which terms are superseded by, and subsumed
within the terms provided for as follows:
MORTGAGE NOTE
$11,600,000 New York, New York
January __, 1997
FOR VALUE RECEIVED, ROBERT MARTIN COMPANY LLC, a New York limited
liability company, having an address at 100 Clearbrook Road, Elmsford, New York
10523 (hereinafter called "Maker"), promises to pay CALI REALTY, L.P., together
with any future holder of this Note and their successors and assigns
(hereinafter called "Payee"), or order, at c/o Cali Realty Corporation, 11
Commerce Drive, Cranford, New Jersey 07016, or at such other place as may be
designated, from time to time, in writing by Payee, the principal sum of ELEVEN
MILLION SIX HUNDRED THOUSAND DOLLARS ($11,600,000) in lawful money of the United
States of America, together with interest on the principal balance outstanding
from time to time, as hereinafter provided.
<PAGE>
1. Defined Terms. The following terms as used in this Note shall have the
following meanings:
(a) The term "Guaranty" shall mean that certain Guaranty of even
date herewith from Brad W. Berger, Timothy M. Jones, Martin S. Berger and Robert
F. Weinberg (collectively, the "Guarantors"), for the benefit of Payee.
(b) The term "Loan Documents" shall mean the Mortgage and the Other
Security Documents.
(c) The term "Mortgage" shall mean that certain Mortgage
Modification Agreement of even date herewith given by Maker to Payee as security
for this Note encumbering certain property located in Westchester County, New
York, 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. Monthly Payments. Interest only on the outstanding Principal Balance
shall be payable monthly beginning March 1,1997 and continuing on the
corresponding day of each subsequent month until February 1, 2000 (hereinafter
referred to as the "Maturity Date"), on which date the entire unpaid Principal
Balance and interest shall be due and payable in full.
3. Interest Rate. (a) The following terms as used in this Note shall have
the following meaning:
(i) The term "Interest Period" shall mean each period commencing on
the date hereof or the day following the last day of the preceding Interest
Period and ending on the numerically corresponding day (if there is no
corresponding day, the last day) in the calendar month that is one month
thereafter; provided, however, that if any such corresponding day of a calendar
month shall not be a Business Day (as hereinafter defined), the Interest Period
to which the same pertains shall be extended to the next succeeding Business
Day, and further provided that the last Interest Period during the term of this
Note shall end on the Maturity Date unless the Maturity Date is not a Business
Day, in which event such last Interest Period shall end on the Business Day
immediately preceding the Maturity Date.
(ii) The "LIBOR Rate" applicable to a particular Interest Period
shall mean a rate per annum equal to four hundred and fifty (450) basis points
plus the Base LIBOR Rate applicable to such Interest Period. The "Base LIBOR
Rate" applicable to a particular Interest
2
<PAGE>
Period shall mean (a) the rate per annum (rounded upward, if necessary, to the
nearest one eighth (1/8th) of one percent) for one-month U.S. Dollar deposits
appearing on Telerate Page 3750 (or such display substituted therefor as is then
customarily used to quote the London interbank offering rate as determined by
Payee in its reasonable discretion) as of approximately 11:00 a.m. (London time)
on the Interest Rate Determination Date (as hereinafter defined) for such
Interest Period, or (b) if on the Interest Rate Determination Date for such
Interest Period no such rate appears on Telerate Page 3750 (or such display
substituted therefor as is then customarily used to quote the London interbank
offering as determined by Payee in its reasonable discretion), a rate determined
by Payee as the arithmetic mean (rounded upwards as aforesaid) of the rates
quoted at approximately 11:00 a.m., London Time, on such Interest Rate
Determination Date by at least two major banks, as reasonably selected by Payee,
in the London interbank market, to prime banks in the London interbank market
for one-month U.S. Dollar deposits commencing on the first day of such Interest
Period and in a principal amount equal to an amount that is representative for a
single transaction in such market at such time, it being understood that Payee
will request the principal London office of each of such major banks to provide
a quotation of its respective rate in accordance with the foregoing, and if at
least two such quotations are provided, the Base LIBOR Rate for such Interest
Period will be the arithmetic mean of such quotations, and if fewer than two
quotations are provided as requested, the Base LIBOR Rate for such Interest
Period will be the arithmetic mean of the rates quoted by money center banks in
New York City as shall be selected by Payee, as of approximately 11:00 a.m., New
York City time, on the Interest Rate Determination Date for loans in U.S.
dollars to leading European banks with a one-month maturity commencing on the
first day of such Interest Period in a principal amount equal to an amount that
is representative for a single transaction in such market at such time. The
"Interest Rate Determination Date" for a particular Interest Period shall mean a
date that is three (3) Business Days prior to the commencement of such Interest
Period. The term "Telerate 3750" means the display as designated as "Page 3750"
on the Associated Press-Dow Jones Telerate Service (or such other page as may
replace Page 3750 on the Associated Press-Down Jones Telerate Service). Any Base
LIBOR Rate determined on the base of the rate displayed on Telerate Page 3750 in
accordance with the foregoing provisions of this subparagraph shall be subject
to corrections, if any, made in such rate and displayed by the Associated
Press-Dow Jones Telerate Service. Each determination of the LIBOR Rate and the
Base LIBOR Rate applicable to a particular Interest Period shall be made by
Payee and shall be conclusive and binding upon Maker absent manifest error.
Interest at the applicable LIBOR Rate from time to time shall be calculated for
the actual number of days elapsed on the basis of a 360-day year comprised of
twelve (12) thirty (30) day months.
(iii) The "Roll Over Date" applicable to a particular Interest
Period shall mean the last day of such Interest Period.
(iv) The term "Business Day" shall mean any day on which commercial
banks in the City of London, England are open for dealings in U.S. dollar
deposits in the London Interbank Market.
(b) From and including the date hereof to, but not including, the last day
of the last Interest Period during the term of this Note the entire Principal
Balance, shall except as specifically
3
<PAGE>
provided to the contrary in this Section 3, bear interest at the applicable
LIBOR Rate in effect from time to time. If the last Interest Period during the
term of this Note shall be a period of less than one month, then for such period
the entire Principal Balance shall at the election of Payee either bear interest
at the Floating Rate (as defined below) or at a one-month LIBOR Rate determined
in accordance with the provisions of paragraph a(ii), it being agreed that the
one-month LIBOR Rate applicable to such last Interest Period shall be determined
as if such last Interest Period was for a period of one month.
(c) Except as otherwise specifically provided to the contrary in paragraph
(b) of this Section with respect to the last Interest Period during the term of
this Note, Payee shall, as soon as practicable after 10:00 a.m., New York City
time, on each Interest Rate Determination Date, determine the LIBOR Rate which
will be in effect during the next Interest Period and inform Maker of the LIBOR
Rate so determined and the amount of the payment to be made to Payee (which
determination shall be conclusive and binding upon Maker absent manifest error).
Except as otherwise specifically provided to the contrary in paragraph (b) of
this Section with respect to the last Interest Period during the term of this
Note, the entire Principal Balance shall bear interest at the LIBOR Rate so
determined from and including the first day of such particular Interest Period
to, but not including, the last day of such particular Interest Period. In the
event, and on each occasion, that on the Interest Rate Determination Date
pertaining to a particular Interest Period, Payee shall have determined in good
faith (which determination shall be conclusive and binding upon Maker) that U.S.
Dollar deposits in an amount approximately equal to the Principal Balance are
not generally available at such time in the London Interbank Market, or
reasonable means do not exist for ascertaining a LIBOR Rate for such particular
Interest Period, Payee shall so notify Maker (by telecopy or by telephone
confirmed in writing) and the interest rate applicable to the entire Principal
Balance shall automatically convert to the Floating Rate (hereinafter defined)
as of the next occurring Roll Over Date, it being agreed that the Floating Rate
shall remain in effect with respect to the entire Principal Balance for each
Interest Period occurring thereafter unless and until Payee shall have
determined in good faith (which determination shall be conclusive and binding
upon Maker) that the aforesaid circumstances no longer exist, whereupon the
interest rate applicable to the Principal Balance shall be converted back to a
LIBOR Rate determined in the manner hereinabove set forth in this Note effective
as of the first day of the first Interest Period which commences ten (10)
Business Days or more after such good faith determination by Payee. If on any
date Payee shall have in good faith determined that the making, maintaining or
continuation of loans bearing interest at a spread over the Base LIBOR Rate (i)
has become unlawful as a result of compliance by Payee in good faith with any
law, treaty, governmental rule, regulation, guideline or order (or would
conflict with any such treaty, governmental rule, regulation, guideline or order
not having the force of law even through the failure to comply therewith would
not be unlawful) or (ii) would cause Payee material hardship, as a result of
contingencies occurring after the date of this Note which materially and
adversely affect the London Interbank Market, then, upon notice by Payee to
Maker (by telecopy or by telephone confirmed in writing) the entire Principal
Balance shall be automatically converted to the Floating Rate, it being agreed
that any notice given by Payee to Maker pursuant to this sentence shall, if
lawful, be effective on the last day of the then existing Interest Period, or if
not lawful, shall be effective immediately upon being given by Payee to Maker,
and that the Floating Rate shall remain in effect with respect to the entire
Principal Balance for each Interest Period or portion thereof occurring
thereafter unless and until Payee shall
4
<PAGE>
have determined in good faith (which determination shall be conclusive and
binding upon Maker) that the aforesaid circumstances no longer exist, whereupon,
the interest rate applicable to the Principal Balance shall be converted to a
LIBOR Rate determined in the manner hereinabove set forth in this Note effective
as of the first day of the first Interest Period which commences ten (10)
Business Days or more after such good faith determination by Payee.
(d) Maker recognizes that the cost to Payee of making or maintaining a
LIBOR Rate with respect to the Principal Balance or any portion thereof may
fluctuate and Maker agrees to pay Payee within ten (10) days after demand by
Payee an additional amount or amounts as Payee shall reasonably determine will
compensate Payee for actual costs incurred by Payee in maintaining a LIBOR Rate
on the Principal Balance or any portion thereof as a result of any change, after
the date of this Note, in applicable law, rule or regulation or in the
interpretation or administration hereof by any domestic or foreign governmental
authority charged with the interpretation or administration thereof (whether or
not having the force of law) or by any domestic or foreign court changing the
basis of taxation of payments to Payee, of the Principal Balance or interest on
the Principal Balance or any portion thereof at LIBOR Rate or any other fees or
amounts payable under this Note, or Other Security Documents, other than taxes
imposed on all or any portion of the overall net income of Payee, by the State
of New York or the Federal government or by any political subdivision or taxing
authority of the State of New York or the Federal government or any such state
or country, or imposing, modifying or applying any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of,
credit extended by, or any other acquisition of funds for loans by Payee or
imposing on Payee, or on the London Interbank Market any other condition
affecting this Note, or Other Security Documents or the portion of the Principal
Balance bearing interest at a LIBOR Rate so as to increase the cost to Payee of
Making or maintaining a LIBOR Rate with respect to the Principal Balance or any
portion thereof or to reduce the amount of any sum received or receivable by
Payee under this Note or Other Security Documents (whether of principal,
interest or otherwise), by an amount deemed by Payee in good faith to be
material, but without duplication for payments required under subparagraph (i)
above.
Any amount or amounts payable by Maker to Payee pursuant to subparagraph (i) or
(ii) above shall be paid by Maker to Payee within ten (10) days of receipt by
Maker from Payee of a statement setting forth the amount or amounts due and the
basis for the determination from time to time of such amount or amounts, which
statement shall be conclusive and binding upon Maker absent manifest error.
Failure on the part of Payee to demand compensation for any increased costs in
any Interest Period shall not constitute a waiver of Payee's rights to demand
compensation for any increased costs incurred during any such Interest Period or
in any other subsequent Interest Period.
(e) The term "Floating Rate" shall mean a rate per annum equal to the
Prime Rate. The term "Prime Rate" shall mean such rate of interest as is
publicly announced by The Chase Manhattan Bank at its principal office from time
to time as its prime rate. Any change in the Prime Rate shall be effective on
the date such change is announced by The Chase Manhattan Bank. Any change in the
Floating Rate as a result of a change in the Prime Rate shall be effective on
the effective date of any such change in the Prime Rate. The Floating Rate and
the components thereof shall be calculated for the actual number of days elapsed
on the basis of a 360-day year. Each
5
<PAGE>
determination of the Floating Rate shall be made by Payee and shall be
conclusive and binding upon Maker absent manifest error.
4. 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.
5. Right of Prepayment. (a) Maker shall not have the right to prepay the
Principal Balance of this Note, in whole or in part, except as expressly set
forth herein. Maker shall be entitled to prepay the entire (but not less than
the entire) Principal Balance of this Note on not less than fifteen (15) days'
prior written notice to Payee, provided that any prepayment of the Principal
Balance shall be accompanied by (i) the amount of accrued and unpaid interest
computed at the interest rate in effect at the time of prepayment on the amount
prepaid, (ii) all of the amounts then due and payable under any of the Loan
Documents and (iii) an amount (the "Prepayment Premium") equal to the Principal
Balance multiplied by 1.5%, which is further multiplied by the number of days
from the date of prepayment to the Maturity Date divided by 360. Notwithstanding
the foregoing, no Prepayment Premium shall be required in the event of a
casualty or a condemnation. However, a Prepayment Premium shall be due and
payable upon a conveyance of either of the Mortgaged Property to Payee or its
designee pursuant to that certain Put-Call Agreement between Maker and Payee
dated on or about the date hereof.
(b) Maker specifically acknowledges and agrees that if all or any part of
the Principal Balance shall be paid prior to the Maturity Date for any reason
whatsoever, whether such payment is voluntary or involuntary and whether or not
such payment arises by virtue of (i) the exercise by Maker of the prepayment
privilege expressly set forth in this Note, or (ii) a default by Maker hereunder
or under the Mortgage or any other Loan Document or a default arising from the
failure for any reason of Maker to pay the Principal Balance of this Note after
giving Payee written notice of its intention to make such prepayment, then such
payment shall include an amount equal to the Prepayment Premium.
(c) MAKER HEREBY FURTHER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT (i) THE
PREPAYMENT PREMIUM IS REASONABLE IN AMOUNT, (ii) THE PREPAYMENT PREMIUM SHALL BE
PAID WITHOUT PREJUDICE TO THE RIGHT OF PAYEE TO COLLECT ANY OTHER AMOUNTS
PROVIDED TO BE PAID HEREUNDER OR UNDER THE MORTGAGE OR ANY OTHER LOAN DOCUMENT,
(iii) ANY TENDER OF PAYMENT BEFORE THE MATURITY DATE FOR ANY REASON WHATSOEVER
OF ALL OR ANY PART OF THE PRINCIPAL BALANCE SHALL INCLUDE THE PREPAYMENT
PREMIUM, (iv) PAYEE SHALL BE ENTITLED TO BID ALL OR A PORTION OF THE PREPAYMENT
PREMIUM AT ANY FORECLOSURE SALE UNDER THE MORTGAGE, (v) IF AN EVENT OF DEFAULT
OCCURS HEREUNDER OR UNDER THE MORTGAGE OR ANY OTHER LOAN DOCUMENT, PAYEE SHALL
BE ENTITLED TO DAMAGES FOR THE DETRIMENT CAUSED THEREBY, BUT THAT IT IS
6
<PAGE>
EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAIN THE EXTENT OF SUCH DAMAGES AND
THAT THE PREPAYMENT PREMIUM IS A REASONABLE ESTIMATE OF SUCH DAMAGE, AND (vi)
NOTHING CONTAINED HEREIN OR IN THE MORTGAGE SHALL BE DEEMED TO MEAN THAT MAKER
HAS ANY RIGHT TO PAY ALL OR ANY PART OF THE PRINCIPAL BALANCE PRIOR TO THE
MATURITY DATE.
MAKER HEREBY ACKNOWLEDGES AND AGREES THAT PAYEE WOULD NOT LEND TO
MAKER THE LOAN EVIDENCED BY THIS NOTE WITHOUT MAKER'S AGREEMENT, AS SET FORTH
ABOVE IN THIS SECTION 5, TO PAY PAYEE A PREPAYMENT PREMIUM HEREUNDER, UPON THE
SATISFACTION OF ALL OR ANY PORTION OF THE PRINCIPAL BALANCE FOLLOWING THE
ACCELERATION OF THE MATURITY DATE HEREOF BY REASON OF A DEFAULT HEREUNDER.
6. Security. This Note is secured by the Mortgage and the Other Security
Documents. Any default under this Note shall constitute a 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 lower of (a) fifteen (15 %) percent and (b) 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.
7. 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.
8. 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%) percent of any payment other than principal repayments which
is not paid within ten (10) days after the date due, and (vi) agree to pay
7
<PAGE>
all reasonable third party out-of-pocket 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.
9. 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.
10. 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.
11. Applicable Law. The terms of this Note shall be governed and construed
under the laws of the State of New York.
12. 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.
13. 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.
14. 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
8
<PAGE>
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.
15. 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 the state in which the Mortgaged Property is located, the
period shall be deemed to end on the next succeeding business day.
16. Jurisdiction. Maker hereby consents to the personal jurisdiction of
the state and federal courts of the State of New York.
17. Maker's Exculpation. Notwithstanding any other provision of this Note,
the Mortgage or any other Loan Document, the obligation of Maker to pay the
indebtedness evidenced by this Note, and to perform and observe and make good
the other covenants, warranties, and agreements contained in this Note, the
Mortgage or in any Loan Document shall not be enforced by any action or
proceeding against Maker or its members wherein or whereby any deficiency or
other money judgment shall be sought against Maker or its members (a "Deficiency
Action"), and neither Maker nor its members shall be liable for such deficiency
or money judgment and Mortgagee specifically waives any right to bring suit for
a Deficiency Action; provided that Maker may be made a party defendant in a
foreclosure action against the Mortgaged Property and any judgment in such
foreclosure action shall be enforceable against Maker, and provided further that
nothing contained above shall be deemed (i) to limit or restrict any right to
seek injunctive relief against Maker or affect the lien of the Mortgage, (ii) to
be a release or impairment of the other obligations of Maker under this Note,
(iii) to limit Payee from enforcing its rights under this Note, the Mortgage or
any Loan Document, (iv) to constitute a waiver, release or discharge of any
indebtedness or obligation under this Note or secured by the Mortgage or (v) to
affect the personal liability of Guarantors under the Guaranty. Notwithstanding
any limitation of liability set forth above, Maker shall be personally liable to
Payee for actual out-of-pocket expenses at all times for (i) the willful
misapplication of (a) any insurance proceeds paid under any insurance policies
by reason of damage, loss, or destruction to the Mortgaged Property, to the
extent of such misapplication or (b) proceeds or awards resulting from
condemnation or other taking in lieu of condemnation of any portion of the
Mortgaged Property to the extent of such misapplication, (ii) any damages to
Payee resulting form any fraud or intentional misrepresentation made by Maker
and (iii) any damage resulting from or on account of any action or lien on
account of any environmental matters to the extent Borrower is liable for same
as more particularly set forth in the Mortgage.
18. Assignment. This Note may not be assigned or transferred by Payee.
B. As hereby restated and amended, the Notes are hereby ratified and confirmed
by Maker in all respects and Maker hereby represents and warrants to Payee that
the Notes, as restated and amended hereby, continue in full force and effect,
and that there exist no offsets, counterclaims or defenses under the Notes, as
restated and amended hereby, and no event has occurred which,
9
<PAGE>
with the giving of notice or the passage of time or both, would constitute a
default under the Notes.
C. The execution and delivery of this Agreement shall not extinguish the
indebtedness evidenced by the Notes nor impair the lien of the mortgages
securing the Notes, and no part thereof shall be discharged, disturbed, canceled
or impaired by the execution and delivery of this Agreement. This Agreement (a)
fully amends, and restates the indebtedness evidenced by the Notes and (b)
secures no new indebtedness beyond the principal indebtedness evidenced by the
Notes.
D. This Agreement shall in no event be deemed to constitute a novation, waiver,
release, discharge or other extinguishment of the indebtedness evidenced by the
Notes. If for any reason this Agreement shall be held to be invalid, illegal or
unenforceable, the principal amount of the Notes, together with interest
thereon, shall become due and payable in accordance with the provisions of the
Notes, without regard to this Agreement.
F. This Agreement shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns.
G. This Agreement shall be governed by and construed in accordance with the laws
of the State of New York without regard to principles of conflict of laws.
[Remainder of page intentionally left blank]
10
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed by each of
the parties hereto.
CALI REALTY, L.P.
By: Cali Realty Corporation,
its general partner
By:________________________________
Name:
Title:
ROBERT MARTIN COMPANY, LLC
By:________________________________
Name:
Title:
11
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this __ day of January, 1997, before me personally came
________________ to me known, who, being duly sworn, did depose and state that
he resides at _______________; that he is the ________________ of Cali Realty
Corporation, the general partner of Cali Realty, L.P., the Delaware limited
partnership described in and which executed the above instrument; and that he
signed his name thereto by order of the Board of Directors of said corporation,
as general partner of said limited partnership.
_______________________
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this __ day of January, 1997, before me personally came
________________ to me known, who, being duly sworn, did depose and state that
he resides at _______________; that he is a Manager of Robert Martin, LLC, the
limited liability company described in and which executed the above instrument;
and that he signed his name thereto as the act and deed of, and on behalf of
said company.
_______________________
Notary Public
12
<PAGE>
EXHIBIT A
(Notes)
13
<PAGE>
EXHIBIT 8.1 (cont.)
================================================================================
ROBERT MARTIN COMPANY, LLC, a
New York limited liability company
Mortgagor,
-TO-
CALI REALTY, L.P., a
Delaware limited partnership
Mortgagee.
----------------------------------------------------
MORTGAGE MODIFICATION AND SPREADER AGREEMENT
----------------------------------------------------
Dated: As of January __, 1997
Location: 200 Corporate Boulevard South, Yonkers, New York
7 Skyline Drive, Mt. Pleasant, New York
RECORD AND RETURN TO:
Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attention: Andrew S. Levine, Esq.
================================================================================
<PAGE>
THIS MORTGAGE MODIFICATION AND SPREADER AGREEMENT (hereinafter referred to
as "Agreement") made the _____ day of January, 1997, between Robert Martin
Company, LLC, a New York limited liability company, having its principal place
of business at 100 Clearbrook Road, Elmsford, New York 10523 (hereinafter
referred to as "Mortgagor"), and Cali Realty, L.P., a Delaware limited
partnership, having its principal place of business c/o Cali Realty Corporation,
11 Commerce Drive, Cranford, New Jersey 07016 (hereinafter referred to as
"Mortgagee").
W I T N E S S E T H :
WHEREAS, Mortgagor is the fee owner of the real property and
improvements described in EXHIBIT A-1 and EXHIBIT A-2 attached hereto
(hereinafter collectively referred to as the "Premises"); and
WHEREAS, Mortgagor, Robert Martin-Eastview North Company, L.P.
("RME") and The Prudential Insurance Company of America ("Prudential") entered
into that certain Agreement of Spreader, Consolidation and Modification of
Mortgage and Security Agreement dated as of August 24, 1995 (the "Original
Mortgage") pursuant to which the mortgages set forth on Exhibit B attached
hereto were consolidated into a single lien; and
WHEREAS, pursuant to that certain Certificate of Reduction by
Prudential, dated as of the date hereof, which is intended to be recorded in the
Westchester County Clerk's Office (the "Office") prior to the recording of this
Agreement, the amount of the Original Mortgage was reduced to $11,600,000; and
WHEREAS, pursuant to that certain Assignment of Mortgage (the
"Assignment") by Prudential to Mortgagee, dated as of the date hereof, which is
intended to be recorded in the Office prior to the recording of this Agreement,
the Original Mortgage was assigned to Mortgagee; and
WHEREAS, as consideration for Mortgagee's acceptance of the
Assignment, Mortgagor has agreed to spread the lien of such Original Mortgage
over those portions of the Mortgaged Property (as hereinafter defined) not
already covered by the Original Mortgage; and
WHEREAS, there is now owing on the notes secured by the Original
Mortgage (the "Notes") and the Original Mortgage the unpaid principal sum of
$11,600,000 together with interest (said principal sum, interest and all other
sums which may or shall become due under the Note, and/or the Original Mortgage,
as spread, coordinated, modified, amended and restated pursuant to the
provisions hereof, being hereinafter collectively referred to as the "Debt").
NOW, THEREFORE, in consideration of the mutual agreements herein
expressed and other valuable consideration, the receipt of which is hereby
acknowledged, Mortgagor and Mortgagee covenant and agree as follows:
<PAGE>
The lien of the Original Mortgage is hereby spread by this Agreement
over the Premises described on Exhibit A-2, such that the lien evidenced by this
Agreement includes the Premises described in Exhibit A-1 and Exhibit A-2 and
which Premises includes all right, title and estate of Mortgagor, now owned, or
hereafter acquired, in and to the following property, rights, interests and
estates (such property, rights, and interests being hereinbefore and hereinafter
collectively referred to as the "Mortgaged Property"):
(a) the Premises;
(b) all the estate, right, title, claim or demand of any nature whatsoever
of Mortgagor, either in law or in equity, in possession or expectancy, in and to
the Mortgaged Property or any part thereof;
(c) all buildings and improvements now or hereafter located on the
Premises (hereinafter referred to as the "Improvements");
(d) all easements, rights-of-way, gores of land, streets, ways, alleys,
passages, sewer rights, waters, water courses, water rights and powers, and all
estates, rights, titles, interests, privileges, liberties, tenements,
hereditaments, and appurtenances of any nature whatsoever, in any way belonging,
relating or pertaining to the Mortgaged Property including, without limitation,
all air rights and transfer developments rights and all land lying in the bed of
any street, road or avenue, opened or proposed, in front of or adjoining the
Premises to the center line thereof;
(e) all machinery, apparatus, equipment, fittings, fixtures and other
property of every kind and nature whatsoever owned by Mortgagor, or in which
Mortgagor has or shall have an interest, now or hereafter located upon the
Mortgaged Property, or appurtenances thereto, and usable in connection with the
present or future operation and occupancy of the Mortgaged Property, all general
intangibles including abstracts of title, surveys, engineering drawings,
permits, licenses, franchises, certificates and other rights and privileges
obtained in connection with the Mortgaged Property, and all building equipment,
materials and supplies of any nature whatsoever owned by Mortgagor, or in which
Mortgagor has or shall have an interest, now or hereafter located upon the
Mortgaged Property (hereinafter collectively referred to as the "Equipment"),
and the right, title and interest of Mortgagor in and to any of the Equipment
which may be subject to any security agreements (as defined in the Uniform
Commercial Code of the State in which the Premises are located), superior in
lien to the lien of this Mortgage;
(f) subject to the terms of this Mortgage, all awards or payments,
including interest thereon, and the right to receive the same, which may be made
with respect to the Mortgaged Property, whether from the exercise of the right
of eminent domain (including any transfer made in lieu of the exercise of said
right), or for any other injury to or decrease in the value of the Mortgaged
Property;
(g) all leases, contracts, subleases and other agreements affecting the
use or occupancy of the Mortgaged Property now or hereafter entered into
(hereinafter referred to as the "Leases") and the right to receive and apply the
income, rents, royalties, revenues, issues and profits (other
2
<PAGE>
than income, rents, issues, and profits received from the operation of parking
areas and parking structures now or hereafter located on the Premises) and the
security deposits (to the extent permitted by law) of the Mortgaged Property as
such sums become due (hereinafter referred to as the "Rents") to the payment of
the Debt;
(h) subject to the terms of this Mortgage, all proceeds of and any
unearned premiums on any insurance policies covering the Mortgaged Property,
including, without limitation, the right to receive and apply the proceeds of
any insurance, judgments, or settlements made in lieu thereof, for damage to the
Mortgaged Property; and
(i) the right, in the name and on behalf of Mortgagor, to appear in and
defend any action or proceeding brought with respect to the Mortgaged Property
and to commence any action or proceeding to protect the interest of Mortgagee in
the Mortgaged Property.
TO HAVE AND TO HOLD the above granted and described Mortgaged
Property unto and to the proper use and benefit of Mortgagee, and the successors
and assigns of Mortgagee, forever.
PROVIDED, ALWAYS, and these presents are upon this express condition, if
Mortgagor shall well and truly pay to Mortgagee the Debt in the manner provided
in the Note and this Mortgage and shall well and truly abide by and comply with
each and every covenant and condition set forth herein and in the Note, then
these presents and the estate hereby granted shall cease, determine and be void.
AND Mortgagor covenants with and represents and warrants to Mortgagee as
follows:
1. Payment of Debt. Mortgagor will pay the Debt at the time and in the
manner provided for its payment in the Note and in this Mortgage.
2. Warranty of Title. Mortgagor warrants the title to the Premises and the
Improvements subject to the state of title as set forth on the policy of title
insurance issued by First American Title Insurance Company insuring the first
lien of this Mortgage on the Mortgaged Property.
3. Insurance. Mortgagor (i) will keep the Improvements and the Equipment
insured against loss or damage by fire, standard extended coverage perils and
such other hazards as Mortgagee shall from time to time reasonably require in
amounts approved by Mortgagee, which amounts shall in no event be less than 100%
of the full insurable value of the Improvements and the Equipment and shall be
sufficient to meet all applicable co-insurance requirement, and (ii) will
maintain rental and business interruption insurance and such other forms of
insurance coverage with respect to the Mortgaged Property as Mortgagee shall
from time to time reasonably require, as determined by buildings of a similar
nature in the vicinity of the Mortgaged Property, in amounts approved by
Mortgagee not to exceed twelve (12) months. All policies of insurance
(hereinafter referred to as the "Policies") shall be issued by an insurer
lawfully doing business in New York and acceptable to Mortgagee and shall
contain the standard New York mortgagee non-contribution
3
<PAGE>
clause endorsement or an equivalent endorsement reasonably satisfactory to
Mortgagee naming Mortgagee as the person to which all payments made by such
insurance company shall be paid, a waiver of subrogation endorsement (if
available) benefiting Mortgagee and shall contain a provision requiring each
such insurance company to notify Mortgagee prior to cancelling or terminating
the Policies. Mortgagor shall pay or cause to be paid the premiums for the
Policies as the same become due and payable. At the request of Mortgagee,
Mortgagor will assign and deliver the Policies to Mortgagee. Not later than
thirty (30) days prior to the expiration date of each of the Policies, Mortgagor
will deliver to Mortgagee a renewal policy or policies or certificates thereof
marked "premium paid" or accompanied by other evidence of payment of premium
reasonably satisfactory to Mortgagee. If at any time Mortgagee is not in receipt
of written evidence that all insurance required hereunder is in force and
effect, Mortgagee shall have the right after prior notice to Mortgagor and a
fifteen (15) business day cure period (except where Mortgagee reasonably
believes its interest in the Mortgaged Property is threatened, in which case no
notice shall be required) to take such action as Mortgagee deems reasonably
necessary to protect its interest in the Mortgaged Property, including, without
limitation, the obtaining of the insurance set forth above, and all reasonable
third party out-of pocket expenses incurred by Mortgagee in connection with such
action or in obtaining such insurance and keeping it in effect shall be paid by
Mortgagor to Mortgagee within ten (10) business days of demand. If the Mortgaged
Property shall be damaged or destroyed, in whole or in part, by fire or other
casualty, Mortgagor shall give prompt notice thereof to Mortgagee. If Mortgagor
decides to restore the improvements, Mortgagee shall make the net amount of all
insurance proceeds received by Mortgagee pursuant to the provisions of the
Mortgage as a result of such damage or destruction after deduction of its
reasonable third party out-of-pocket costs and expenses, if any, in collecting
the same (hereinafter referred to as the "Net Proceeds") available for the
repair and restoration of the Improvements and the Equipment, provided that (i)
no default beyond the expiration of applicable grace or cure periods, if any,
shall exist under the Note or this Mortgage; (ii) Mortgagor shall proceed with
the repair and restoration of the Improvements and the Equipment as nearly as
possible to a condition (with respect to both use and value) equal to or better
than the condition the Improvements and Equipment were in immediately prior to
such fire or other casualty promptly after the insurance claims are settled; and
(iii) Mortgagee shall be satisfied that upon completion of the repair and
restoration the gross cash flow and the net cash flow of the Mortgaged Property
will be restored to a level sufficient to cover all carrying costs and operating
expenses of the Mortgaged Property, including, without limitation, debt service
on the Note. Upon satisfaction of the provisions of the preceding sentence of
this paragraph or, provided, in Mortgagee's reasonable judgment, Mortgagor will
be able to satisfy such provisions, the Net Proceeds will be disbursed by
Mortgagee to Mortgagor to pay for the costs of repair and restoration of the
Improvements and the Equipment. The Net Proceeds shall be held by Mortgagee in
escrow in an interest bearing special account until expended in connection with
the repair and restoration of the Improvements and the Equipment, it being
agreed that any Net Proceeds (including interest earned thereon) so held by
Mortgagee shall constitute additional security for the payment of the Debt. The
Net Proceeds shall be paid by Mortgagee to, or as directed by, Mortgagor from
time to time during the course of the repair and restoration, upon receipt of
evidence reasonably satisfactory to Mortgagee that (i) all materials installed
and work and labor performed (except to the extent that they are to be paid for
out of the requested payment) in connection with the repair and restoration have
been paid for in full (or will be paid for out of the requested payment), (ii)
there exists no notices of intention, mechanics or other liens and
4
<PAGE>
encumbrances on the Mortgaged Property arising out of the repair and
restoration, and (iii) the balance of the Net Proceeds plus the balance of any
deficiency deposits made by Mortgagor pursuant to the provisions of this
paragraph hereinafter set forth shall be sufficient to pay in full the balance
of the cost of the repair and restoration. The repair and restoration shall be
done and completed by Mortgagor in an expeditious and diligent fashion and in
compliance with all applicable laws, rules and regulations, and all plans and
specifications required in connection with the repair and restoration shall be
subject to review and approval in all respects by an independent inspecting
engineer selected by Mortgagee (hereinafter referred to as the "Inspecting
Engineer"). All reasonable third party out-of-pocket costs and expenses incurred
by Mortgagee in connection with making the Net Proceeds available for the repair
and restoration, including, without limitation, appraisal fees, counsel fees and
the Inspecting Engineer's fees incurred by Mortgagee, shall be paid by
Mortgagor. In no event shall Mortgagee be obligated to make disbursements of the
Net Proceeds in excess of an amount equal to the costs actually incurred for
work in place as part of the repair and restoration, as certified by the
Inspecting Engineer, minus a retainage equal to 10% of the costs actually
incurred in connection with the making of such repair and restoration until such
time as 50% of such repair and restoration are certified to have been
satisfactorily completed by the Inspecting Engineer after which there will be no
further retainage (hereinafter referred to as the "Retainage"). Mortgagee shall
not be obligated to make disbursements of the Net Proceeds more than once every
thirty (30) days. The Retainage shall not be released until the Inspecting
Engineer certifies that the repair and restoration have been completed in
accordance with the provisions of this paragraph, and Mortgagee receives
evidence reasonably satisfactory to Mortgagee that the costs of the repair and
restoration have been completed in accordance with the provisions of this
paragraph, and Mortgagee receives evidence reasonably satisfactory to Mortgagee
that the costs of the repair and restoration have been paid in full or will be
paid in full out of the Retainage. Notwithstanding anything to the contrary
contained in this paragraph, if the Net Proceeds shall be less than $100,000 and
if the costs of making the repair and restoration shall be less than $150,000,
the Net Proceeds will be disbursed by Mortgagee to Mortgagor upon receipt,
provided that no default beyond the expiration of any applicable grace or cure
period has occurred and is continuing under the Note or this Mortgage and
Mortgagor delivers to Mortgagee a written undertaking to expeditiously commence
and to satisfactorily complete with due diligence such repair and restoration or
to cause the same to so occur. The excess, if any, of the Net Proceeds after the
repair and restoration of the Improvements as nearly as possibly to a condition
equal to or better than their former condition and the payment in full of all
costs incurred in connection therewith shall be remitted by Mortgagee to
Mortgagor provided Mortgagor is not in default beyond the expiration of any
applicable grace or cure period under the terms of the Note or this Mortgage. If
at any time the Net Proceeds, or the undisbursed balance thereof, shall not, in
the opinion of Mortgagee, be sufficient to pay in full the balance of the costs
which will be incurred in connection with the completion of the repair and
restoration, Mortgagor shall deposit the deficiency with Mortgagee before any
further disbursement of the Net Proceeds shall be made, which deficiency deposit
shall be held in an interest bearing special account and shall be disbursed for
costs actually incurred in connection with the repair and restoration, on the
same conditions applicable to the Net Proceeds. Any such deficiency deposit
until disbursed pursuant to this paragraph shall constitute additional security
for the payment of the Debt. The balance, if any, of any such deficiency deposit
remaining after the Inspecting Engineer certifies that the repair and
restoration have been completed in accordance with the provisions of this
paragraph and the receipt by Mortgagee of evidence
5
<PAGE>
reasonably satisfactory to Mortgagee that all costs incurred in connection with
the repair and restoration have been paid in full or will be paid in full upon
release of such deposit, shall be returned by Mortgagee to Mortgagor. All costs
of the repair and restoration in excess of the Net Proceeds shall be paid for by
Mortgagor. All insurance proceeds received by Mortgagee and not required to be
disbursed for the repair and restoration shall be remitted to Mortgagor pursuant
to the provisions of this paragraph hereinabove set forth may be retained and
applied by Mortgagee toward the payment of the Debt whether then due and payable
in such priority and proportions as Mortgagee in its discretion shall deem
proper or, at the discretion of Mortgagee, the same may be paid, either in whole
or in part, to Mortgagor for such purposes as Mortgagee shall designate. If
Mortgagee shall receive and retain such insurance proceeds, the lien of this
Mortgage shall be reduced only by the amount thereof received and retained by
Mortgagee and actually applied by Mortgagee in reduction of the Debt.
4. Payment of Taxes, etc. Mortgagor shall pay or cause to be paid all
taxes, assessments, water rates, sewer rents and other charges, including vault
charges and license fees for the use of vaults, chutes and similar areas
adjoining the Premises, now or hereafter levied or assessed against the
Mortgaged Property by any local, county or state governmental entity having
jurisdiction over the Mortgaged Property (hereinafter referred to as the
"Taxes") prior to the date upon which any fine, penalty, interest or cost may be
added thereto or imposed by law for the nonpayment thereof. Mortgagor shall
deliver to Mortgagee, upon request, receipted bills, cancelled checks and other
evidence reasonably satisfactory to Mortgagee evidencing the payment of the
Taxes prior to the date upon which any fine, penalty, interest or cost may be
added thereto or imposed by law for the nonpayment thereof.
5. Contestment of Taxes. After prior notice to Mortgagee, in the case of
any material item, Mortgagor, at its own expense, may contest by appropriate
legal proceeding, promptly initiated and conducted in good faith and with due
diligence, the amount or validity or application in whole or in part of any of
the Taxes, provided that (i) Mortgagor shall pay the Taxes "under protest" or
otherwise in accordance with the provisions of New York State law; (ii) no
default beyond the expiration of applicable grace or cure periods, if any,
exists under the Note or this Mortgage; (iii) Mortgagor is permitted to do so
under the provisions of any mortgage superior in lien to the Mortgage, if any;
(iv) such proceeding shall be permitted under and be conducted in accordance
with the provisions of any other instrument to which Mortgagor or the Mortgaged
Property is subject and shall not constitute a default thereunder; and (v)
neither the Mortgaged Property nor any part thereof or interest therein will in
the opinion of the Mortgagee be in danger of being sold, forfeited, terminated,
cancelled or lost.
6. Escrow Fund. Mortgagor will, at the option of Mortgagee, pay to
Mortgagee, on the first day of each calendar month one-twelfth of an amount
(hereinafter referred to as the "Escrow Fund") which would be sufficient to pay
the Taxes payable, or estimated by Mortgagee to be payable, during the ensuing
twelve (12) months. Mortgagee will apply the Escrow Fund to the payment of Taxes
which are required to be paid by Mortgagor pursuant to the provisions of this
Mortgage. If the amount of the Escrow Fund shall exceed the amount of the Taxes
payable by Mortgagor pursuant to the provisions of this Mortgage, Mortgagee
shall, in its discretion, (a) return any excess to Mortgagor, or (b) credit such
excess against future payments to be made to the
6
<PAGE>
Escrow Fund. If the Escrow Fund is not sufficient to pay the Taxes, as the same
become payable, Mortgagor shall pay to Mortgagee, upon request, an amount which
Mortgagee shall estimate as sufficient to make up the deficiency. Until expended
or applied as above provided, any amounts in the Escrow Fund shall be held by
Mortgagee in a special interest bearing account and shall constitute additional
security for the Debt. Notwithstanding the foregoing, Mortgagee shall not
require payments by Mortgagor to the Escrow Fund unless and until a default
shall have occurred and shall be continuing beyond the expiration of applicable
grace or cure periods, if any, under the Note or this Mortgage.
7. Condemnation. Notwithstanding any taking by any public or quasi-public
authority through eminent domain or otherwise, Mortgagor shall continue to pay
the Debt at the time and in the manner provided for its payment in the Note and
this Mortgage and the Debt shall not be reduced until any award or payment
therefor shall have been actually received and applied by Mortgagee to the
discharge of the Debt. Subject to the provisions of this paragraph hereinafter
set forth, Mortgagee may apply the entire amount of any such award or payment to
the discharge of the Debt whether or not then due and payable in such priority
and proportions as Mortgagee in its discretion shall deem proper. If the
Mortgaged Property is sold, through foreclosure or otherwise, prior to the
receipt by Mortgagee of such award or payment, Mortgagee shall have the right,
whether or not a deficiency judgment on the Note shall have been sought,
recovered or denied, to receive such award or payment, or a portion thereof
sufficient to pay the Debt, whichever is less. Mortgagor shall file and
prosecute its claim or claims for any such award or payment in good faith and
with due diligence and cause the same to be collected and paid over to
Mortgagee, and hereby irrevocably authorizes and empowers Mortgagee, in the name
of Mortgagor or otherwise to collect and receipt for any such award or payment
and to file and prosecute such claim or claims (provided that, as long as
Mortgagor is, in Mortgagee's reasonable judgment, in good faith and with due
diligence prosecuting its claim or claims, Mortgagor shall have the right to
control any such proceeding and Mortgagee shall only have the right to
participate in such proceeding), and although it is hereby expressly agreed that
the same shall not be necessary in any event, Mortgagor shall, upon demand of
Mortgagee, make, execute and deliver any and all assignments and other
instruments sufficient for the purpose of assigning any such award or payment to
Mortgagee, free and clear of any encumbrances of any kind or nature whatsoever.
If less than all the Mortgaged Property is taken, Mortgagee shall make the
portion of the aggregate award or payment received by Mortgagee pursuant to the
provisions of the Mortgage as a result of such taking which is specifically
awarded for the repair and restoration of the portion of the Improvements not
taken or, in the absence of any such specific award, is in the reasonable
opinion of Mortgagee and the Inspecting Engineer necessary to pay for the costs
which will be incurred in connection with the repair and restoration of the
portion of the Improvements not taken after deduction of its reasonable third
party out-of-pocket costs and expenses, if any, in collecting the same
(hereinafter referred to as the "Net Restoration Award") available for the
repair and restoration of the Improvements, provided that (i) no default beyond
applicable grace and cure periods, if any, shall exist under the Note or this
Mortgage; (ii) Mortgagor shall proceed with the repair and restoration of the
Improvements to a condition equal to or better than the condition the
Improvements were in immediately prior to such taking promptly after the award
is settled; and (iii) Mortgagee shall be satisfied that upon completion of the
repair and restoration the gross cash flow and the net cash flow of the
Mortgaged Property will be restored to a level sufficient to cover all carrying
costs and
7
<PAGE>
operating expenses of the Mortgaged Property, including, without limitation,
debt service on the Note. Upon satisfaction of the provisions of the preceding
sentence of this paragraph, the Net Restoration Award will be disbursed by
Mortgagee to Mortgagor to pay for the costs of repair and restoration of the
Improvements. The Net Restoration Award shall be held by Mortgagee in escrow
until expended in connection with the repair and restoration of the Improvements
in an interest bearing special account, and such Net Restoration Award together
with all interest earned thereon shall constitute additional security for the
payment of the Debt. The Net Restoration Award shall be paid by Mortgagee to, or
as directed by, Mortgagor from time to time during the course of the repair and
restoration, upon receipt of evidence satisfactory to Mortgagee that (i) all
materials installed and work and labor performed (except to the extent that they
are to be paid for out of the requested payment) in connection with the repair
and restoration have been paid for in full; (ii) there exists no notices of
intention, mechanics or other liens and encumbrances on the Mortgaged Property
arising out of the repair and restoration; and (iii) the balance of the Net
Restoration Award plus the balance of any deficiency deposits made by Mortgagor
pursuant to the provisions of this paragraph hereinafter set forth shall be
sufficient to pay in full the balance of the cost of the repair and restoration.
The repair and restoration shall be done and completed by Mortgagor in an
expeditious and diligent fashion and in compliance with all applicable laws,
rules and regulations, and all plans and specifications required in connection
with the repair and restoration shall be subject to review and approval in all
respects by the Inspecting Engineer. All reasonable third party out-of-pocket
costs and expenses incurred by Mortgagee in connection with making the Net
Restoration Award available for the repair and restoration, including, without
limitation, appraisal fees, counsel fees and the Inspecting Engineer's fees
incurred by Mortgagee, shall be paid by Mortgagor. In no event shall Mortgagee
be obligated to make disbursements of the Net Restoration Award in excess of an
amount equal to the costs actually incurred for work in place as part of the
repair and restoration, as certified by the Inspecting Engineer, minus a
retainage equal to 10% of the costs actually incurred in connection with the
making of such repair and restoration until such time as 50% of such repair and
restoration are certified to have been satisfactorily completed by the
Inspecting Engineer after which there will be no further retainage (hereinafter
referred to as the "Retainage"). Mortgagee shall not be obligated to make
disbursements of the Net Restoration Award more than once every thirty (30)
days. The Retainage shall not be released until the Inspecting Engineer
certifies that the repair and restoration have been completed in accordance with
the provisions of this paragraph, and Mortgagee receives evidence reasonably
satisfactory to Mortgagee that the costs of the repair and restoration have been
paid in full or will be paid in full out of the Retainage. Notwithstanding
anything to the contrary contained in this paragraph, if the Net Restoration
Award shall be less than $100,000 and if the costs of making the repair and
restoration shall be less than $150,000, the Net Restoration Award will be
disbursed by Mortgagee to Mortgagor upon receipt, provided that no default
beyond the expiration of any applicable grace or cure periods under the Note or
this Mortgage has occurred and is continuing and Mortgagor delivers a written
undertaking to Mortgagee to expeditiously commence and to satisfactorily
complete such repair and restoration. The excess, if any, of the Net Restoration
Award after the repair and restoration of the Improvements as nearly as possible
to their former condition and the payment in full of all costs incurred in
connection therewith shall be applied by Mortgagee in reduction of the Debt in
such priority and proportions as Mortgagee in its discretion shall deem proper.
If at any time the Net Restoration Award, or the undisbursed balance thereof,
shall not, in the opinion of Mortgagee, be sufficient to pay in full the balance
of the costs which will be incurred
8
<PAGE>
in connection with the completion of the repair and restoration, Mortgagor shall
deposit the deficiency with Mortgagee before any further disbursement of the Net
Restoration Award shall be made, which deficiency deposit shall be held in an
interest bearing special account and shall be disbursed for costs actually
incurred in connection with the repair and restoration on the same conditions
applicable to the Net Restoration Award. Any such deficiency deposit until
disbursed pursuant to this paragraph shall constitute additional security for
the payment of the Debt. The balance, if any, of any such deficiency deposit
remaining after the Inspecting Engineer certifies that the repair and
restoration have been completed in accordance with the provisions of this
paragraph and the receipt by Mortgagee of evidence reasonably satisfactory to
Mortgagee that all costs incurred in connection with the repair and restoration
have been paid in full, shall be returned by Mortgagee to Mortgagor. All costs
of the repair and restoration in excess of the Net Restoration Award shall be
paid for by Mortgagor.
8. Lease and Rents. Mortgagor hereby grants to Mortgagee an absolute and
present assignment (i) of all of the Leases in effect or hereinafter in effect,
and (ii) to collect all Rents with respect to the Mortgaged Property, and
Mortgagee hereby grants to Mortgagor a concurrent license to Mortgagor to manage
and control the Mortgaged Property and collect the Rents therefrom and to
retain, use and enjoy the same. The license created and granted hereby may be
revoked by Mortgagee upon any default beyond the expiration of applicable grace
or cure periods, if any, by Mortgagor under the terms of the Note or this
Mortgage by giving notice of such revocation to Mortgagor. Following such notice
Mortgagee may retain and apply the Rents toward payment of the Debt in such
priority and proportions as Mortgagee, in its discretion, shall deem proper, or
to the operation, maintenance and repair of the Mortgaged Property. Mortgagor
shall not, without the consent of Mortgagee (which consent shall not be
unreasonably withheld, conditioned or delayed), make, or suffer to be made, or
modify any Leases which provide for a rental rate which is less than the fair
market rate, or cancel any Leases which are in excess of 5,000 square feet, or
accept prepayments of installments of the Rents for a period of more than one
(1) month in advance or further assign the whole or any part of the Rents.
Mortgagor shall (a) fulfill or perform each and every material provision of the
Leases on the part of Mortgagor to be fulfilled or performed, (b) promptly send
copies of all notices of default which Mortgagor shall send or receive under the
Leases to Mortgagee, and (c) enforce, short of termination of the Leases, the
performance or observance of the provisions thereof by the tenants thereunder.
In addition to the rights which Mortgagee may have herein, in the event of any
default beyond the expiration of applicable grace or cure periods, if any, under
this Mortgage, Mortgagee, at its option, may require Mortgagor to pay monthly in
advance to Mortgagee, or any receiver appointed to collect the Rents, the fair
and reasonable rental value for the use and occupation of such part of the
Mortgaged Property as may be in possession of Mortgagor. Upon default in any
such payment, Mortgagor will vacate and surrender possession of the Mortgaged
Property to Mortgagee, or to such receiver and, in default thereof, Mortgagor
may be evicted by summary proceedings or otherwise. Nothing contained in this
paragraph shall be construed as imposing on Mortgagee any of the obligations of
the lessor under the Leases.
9. Maintenance of the Mortgaged Property. Mortgagor shall cause the
Mortgaged Property to be maintained in good condition and repair and will not
commit or suffer to be committed any waste of the Mortgaged Property. The
Improvements and the Equipment shall not
9
<PAGE>
be removed, demolished or materially altered (except for normal replacement of
the Equipment) without the consent of Mortgagee, such consent not to be
unreasonably withheld, conditioned or delayed. Mortgagor shall promptly repair,
replace or rebuild any part of the Mortgaged Property which may be damaged or
destroyed by any casualty (including any casualty for which insurance was not
obtained) or which may be affected by any taking by any public or quasi-public
authority through eminent domain or otherwise. If such casualty shall be covered
by the Policies, Mortgagor's obligation to repair, replace or rebuild such
portion of the Mortgaged Property shall be contingent upon Mortgagee paying
Mortgagor the proceeds of the Policies, or such portion thereof as shall be
sufficient to complete such repair, replacement or rebuilding, whichever is
less. Mortgagor will not, without obtaining the prior consent of Mortgagee
(which consent shall not be unreasonably withheld, conditioned or delayed),
initiate, join in or consent to any private restrictive covenant, zoning
ordinance, or other public or private restrictions, limiting or defining the
uses which may be made of the Mortgaged Property or any part thereof. Mortgagor
shall promptly comply with or cause compliance with all existing and future
governmental laws, orders, ordinances, rules and regulations affecting the
Mortgaged Property, or the use thereof (including, without limitation, all
environmental, petroleum products and hazardous waste laws, orders, ordinances,
rules and regulations including those relating to the presence of asbestos)
(hereinafter referred to collectively as "Environmental Requirements"). After
prior notice to Mortgagee, Mortgagor, at its own cost and expense, may contest
by appropriate legal proceeding, promptly initiated and conducted in good faith
and with due diligence, the validity or application in whole or in part of any
governmental laws, orders, ordinances, rules and regulations affecting the
Mortgaged Property (other than Taxes, which may be contested as provided in
Section 5 of this Mortgage) or the use thereof (including any Environmental
Requirement) provided that (i) no default beyond the expiration of applicable
grace or cure periods, if any, exists under the Note or this Mortgage; (ii)
Mortgagor is permitted to do so under the provisions of any mortgage superior in
lien to this Mortgage; (iii) such proceeding shall suspend enforcement of such
legal requirement against Mortgagor and the Mortgaged Property; (iv) such
proceeding shall be permitted under and be conducted in accordance with the
provisions of any other instrument to which Mortgagor or the Mortgaged Property
is subject and shall not constitute a default thereunder; (v) neither the
Mortgaged Property nor any part thereof or interest therein will in the opinion
of Mortgagee be in danger of being sold, forfeited, terminated, lost, or
cancelled nor shall the value thereof be threatened or impaired; and (vi)
Mortgagor 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
requested by Mortgagee to insure full compliance with such legal requirements.
10. Estoppel Certificates. Mortgagor, within ten (10) business days after
request by Mortgagee and at its expense, will furnish Mortgagee with a
statement, duly acknowledged and certified, setting forth the amount of the Debt
and the offsets or defenses thereto, if any. Mortgagee, within ten (10) business
days after request by Mortgagor, will furnish Mortgagor with a statement setting
forth the amount of the Debt and the date to which interest was last paid and
whether, to the best of Mortgagee's knowledge without any independent
investigation, Mortgagor is in default under this Mortgage or the Note.
11. Subordination Agreements. Mortgagee, as of the date hereof, will
furnish Mortgagor with a Subordination, Non-Disturbance and Attornment Agreement
in form reasonably
10
<PAGE>
acceptable to Mortgagee for the benefit of any existing bona fide third party
tenants leasing in excess of 25,000 square feet.
12. Transfer of Mortgaged Property or Controlling Interest in Mortgagor;
Assumption. The sale, transfer, assignment or conveyance of all or any portion
of the Mortgaged Property or the transfer, assignment or conveyance of a
controlling interest in Mortgagor, whether voluntarily or by operation of law
(other than through death or incapacity), without the prior written approval of
Mortgagee, shall constitute a default under the terms of this Mortgage and
entitle Mortgagee, at its sole option, to accelerate all sums due on the Note,
late payment charges, or any other amounts secured hereby.
It shall be a default hereunder if Mortgagor shall amend, modify,
transfer, assign or terminate the operating agremeent, partnership agreement,
certificate of partnership or articles of incorporation, as the case may be, of
Mortgagor to change the management or control or both of Mortgagor and, in the
reasonable determination of Mortgagee, such amendment, modification, transfer,
assignment or termination shall have a material adverse effect on Mortgagee, the
Mortgaged Property or the security thereof; provided that any amendment,
modification, transfer, assignment or termination of Mortgagor's operating
agreement or any other action pursuant to which the current members of Mortgagor
shall (a) cease to be the members of Mortgagor (other than through death or
incapacity); or (b) except to the extent permitted herein, cease to own or
maintain an interest in Mortgagor equal to or greater than its interest at the
time this Mortgage is executed shall be deemed to have a material adverse effect
upon Mortgagee and the Mortgaged Property and shall be a default hereunder.
Mortgagor shall provide Mortgagee with copies of any proposed amendment to its
operating agremeent, partnership agreement, certificate of partnership or
articles of incorporation, as the case may be, so that Mortgagee may, in its
sole discretion, determine whether such amendment adversely affects Mortgagee,
the Mortgaged Property, or the security value thereof. Transfers to family
members and trusts shall not be deemed to be a violation of this provision.
In the event the ownership of the Mortgaged Property, or any part
thereof, shall become vested in a person or entity other than Mortgagor, whether
with or without the prior written consent of Mortgagee, Mortgagee may, without
notice to Mortgagor, deal with such successor or successors in interest with
reference to the Mortgaged Property, this Mortgage and the Note in the same
manner and to the same extent as with Mortgagor without in any way vitiating or
discharging Mortgagor's liability hereunder or under the Note. No sale, transfer
or conveyance of the Mortgaged Property, no forbearance on the part of Mortgagee
and no extension of the time for the payment of the Note hereby secured given by
Mortgagee to Mortgagor shall operate to release, discharge, modify, change or
affect the original liability of Mortgagor, either in whole or in part, unless
expressly set forth in writing executed by Mortgagee. Notwithstanding anything
contained herein to the contrary, Mortgagor hereby waives any right it now has
or may hereafter have to require Mortgagee to prove an impairment of its
security as a condition to exercise Mortgagee's rights under this Section 12.
13. Further Encumbrance Prohibited; Subrogation. So long as the Note
remains unpaid, Mortgagor shall neither voluntarily nor involuntarily permit the
Mortgaged Property or any part
11
<PAGE>
thereof to become subject to any secondary lien, mortgage, security interest or
encumbrance of any kind whatsoever, except for easements, rights-of-ways or
similar encumbrances granted for utilities, which must be approved in writing by
Mortgagee, which approval shall not be unreasonably delayed, conditioned or
withheld. The imposition of any such secondary lien, mortgage, security interest
or encumbrance, except for any utility easements, right-of-ways or similar
encumbrances approved by Mortgagee, shall constitute an Event of Default
hereunder and entitle Mortgagee, at its sole option, to declare all sums due in
accordance with the terms of the Note to be and become immediately due and
payable. In the event that Mortgagee shall hereafter give its written consent to
the imposition of any such secondary lien, mortgage, security interest or other
encumbrance upon the Mortgaged Property, Mortgagee, at its sole option, shall be
entitled to accelerate the maturity of the Note and exercise any and all
remedies provided and available to Mortgagee hereunder in the event that the
holder of any such secondary lien or encumbrance shall institute foreclosure or
other proceedings to enforce the same; it being understood and agreed that a
default under any instrument or document evidencing, securing or secured by any
such secondary lien or encumbrance shall be and constitute an Event of Default
hereunder.
14. Notice. Any notice, request, demand, statement or consent made
hereunder shall be in writing and shall be sent by hand or by reputable
overnight courier or by registered or certified mail, return receipt requested,
and shall be deemed given when delivered if by hand (if delivered by 3:00 p.m.)
or by overnight courier or three (3) business days after mailing when delivery
is by first class mail with sufficient postage to cause the notice to be sent to
its intended addressee, certified mail, return receipt requested. In all cases,
same shall be addressed as follows:
If to Mortgagor: Robert Martin Company, LLC
100 Clearbrook Road
Elmsford, New York 10523
Attention: Brad Berger
Lloyd I. Roos, Esq.
Fax No. (914) 592-4836
With a copy to: Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Attention: Robert J. Wertheimer, Esq.
Fax No. (212) 856-7808
To Mortgagee: Cali Realty, L.P.
11 Commerce Drive
Cranford, New Jersey 07016
Attn: Roger W. Thomas, Esq.
Fax No. (908) 272-6755
12
<PAGE>
With a copy to: Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attn: Jonathan A. Bernstein, Esq.
Fax No. (212) 326-0806
Each party may designate a change of address by notice to the other party, given
at least fifteen (15) days before such change of address is to become effective.
15. Changes in Laws Regarding Taxation. In the event of the passage after
the date of this Mortgage of any law of the State in which the Premises are
located deducting from the value of real property for the purpose of taxation
any lien or encumbrance thereon or changing in any way the laws for the taxation
of mortgages or debts secured by mortgages for state or local purposes or the
manner of the collection of any such taxes, and imposing a tax, either directly
or indirectly, on this Mortgage, the Note or the Debt, Mortgagor shall, if
permitted by law, pay any tax imposed as a result of any such law within the
statutory period or within fifteen (15) days after demand by Mortgagee,
whichever is less, provided, however, that if, in the opinion of the attorneys
for Mortgagee, Mortgagor is not permitted by law to pay such taxes, Mortgagee
shall have the right, at its option, to declare the Debt due and payable on a
date specified in a prior notice to Mortgagor of not less than one hundred
eighty (180) days.
16. No Credits on Account of the Debt. Mortgagor will not claim or demand
or be entitled to any credit or credits on account of the Debt for any part of
the Taxes assessed against the Mortgaged Property or any part thereof and no
deduction shall otherwise be made or claimed from the taxable value of the
Mortgaged Property, or any part thereof, by reason of this Mortgage or the Debt.
17. Other Security for the Debt. Mortgagor shall observe and perform all
of the terms, covenants and provisions contained in the Note and in all other
mortgages and other instruments or documents evidencing, securing or
guaranteeing payment of the Debt, in whole or in part, or otherwise executed and
delivered in connection with the Note, this Mortgage or the loan evidenced and
secured thereby (hereinafter collectively referred to as the "Loan Documents"),
in each case within the applicable notice and grace periods, if any, set forth
therein.
18. Documentary Stamps. If at any time the United States of America, any
state thereof or any governmental subdivision of any such state, shall require
revenue or other stamps to be affixed to the Note or this Mortgage, Mortgagor
will pay for the same, with interest and penalties thereon, if any.
19. Right of Entry. Subject to the rights of tenants under Leases,
Mortgagee and its agents shall have the right during normal business hours to
enter and inspect the Mortgaged Property at all reasonable times after giving
Mortgagor reasonable prior notice.
20. Books and Records. Mortgagor will keep and maintain or will cause to
be kept and maintained on a fiscal year basis in accordance with generally
accepted accounting practices
13
<PAGE>
consistently applied proper and accurate books, records and accounts reflecting
all of the financial affairs of Mortgagor and all items of income and expense in
connection with the operation of the Mortgaged Property or in connection with
any services, equipment or furnishings provided in connection with and which are
material to the operation of the Mortgaged Property, whether such income or
expense be realized by Mortgagor or by any other person either related to or
affiliated with Mortgagor in connection with the operations of Mortgagor or the
Mortgaged Property. Mortgagee shall have the right from time to time at all
times during normal business hours, upon giving Mortgagor reasonable prior
notice, to examine such books, records and accounts at the office of Mortgagor
or other person maintaining such books, records and accounts and to make copies
or extracts thereof as Mortgagee shall desire.
21. Performance of Other Agreements. Mortgagor shall observe and perform
each and every material term to be observed or performed by Mortgagor pursuant
to the terms of any material agreement or recorded instrument affecting or
pertaining to the Mortgaged Property.
22. Defaults. The Debt shall become due at the option of Mortgagee upon
the occurrence of any one of the following events:
(a) if any portion of the Debt is not paid on the date the same
shall become due and payable and such failure continues for five (5) days after
Mortgagee delivers written notice thereof to Mortgagor;
(b) if Mortgagor shall fail to pay or cause to be paid within twenty
(20) days of written notice and demand by Mortgagee, any installment 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 installment may not be due and payable at the
time of such notice and demand;
(c) if any Federal tax lien is filed against Mortgagor or the
Mortgaged Property and the same is not discharged of record within ninety (90)
days; provided, however, Mortgagor 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 Mortgagee be in danger of being sold, forfeited,
terminated, lost or cancelled and, provided further, Mortgagor 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 Mortgagee;
(d) if without the consent of Mortgagee 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 this Mortgage, or if any Improvement or the Equipment (except for normal
replacement of the Equipment or the renovation and construction of the
Improvements) is removed, demolished or materially altered;
14
<PAGE>
(e) if without the consent of Mortgagee any Leases are made,
cancelled or modified in violation of the terms and provisions of Section 8 of
this Mortgage or if any portion of the Rents is 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 Mortgagor, or of any person
(hereinafter referred to as a "Guarantor") guaranteeing payment of the Debt or
any portion thereof or performance by Mortgagor of any of the material terms of
this Mortgage made herein or in any such guaranty, or in any certificate,
report, financial statement or other instrument furnished in connection with the
making of the Note, this Mortgage, or any such guaranty, shall prove false or
misleading in any material respect;
(g) if Mortgagor 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 Mortgagor 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 Mortgagor 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 Mortgagor or any
Guarantor and such order or decree is not vacated within one hundred twenty
(120) days of entry; provided, however, Mortgagee and its affiliates shall not
be permitted to participate in such involuntary petition;
(i) if Mortgagor 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 Mortgagor 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 Mortgagor or any Guarantor, or of any substantial part of their
respective properties, or if Mortgagor or any Guarantor fails generally to pay
their respective debts as such debts become due, or if Mortgagor or any
Guarantor takes any action in furtherance of any action described in this
subparagraph;
(j) if Mortgagor or 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 Debt,
in whole or in part;
(k) if Mortgagor 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 this Mortgage;
(l) if the Mortgaged Property shall become subject (i) to any tax
lien which is not released within sixty (60) days, other than a lien for local
real estate taxes and assessments not
15
<PAGE>
due and payable, or (ii) to any mechanic's, materialman's or other lien and such
lien shall remain undischarged or unbonded for forty-five (45) days after actual
or constructive notice of such lien is received by Mortgagor;
(m) if any claim of priority to the lien of the Mortgage, whether by
title, lien or otherwise, is consented to by Mortgagor or upheld by a court of
competent jurisdiction;
(n) if Mortgagor shall continue to be in default under any of the
other terms, covenants or conditions of this Mortgage or any of the other Loan
Documents for five (5) days after notice from Mortgagee 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 Mortgagee in the case of any other default, provided that
if such default cannot reasonably be cured within such thirty (30) day period
and Mortgagor 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 Mortgagor 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 Mortgagor'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 Mortgagor shall fail to comply with the environmental
requirements set forth in Section 43 of this Mortgage.
23. Acceleration. Immediately upon or any time after the occurrence of any
Event of Default hereunder, Mortgagee may, without notice or demand, declare the
Debt to be immediately due and payable in full.
24. Right to Cure Defaults. If default beyond the expiration of applicable
grace or cure periods, if any, in the performance of any of the covenants of
Mortgagor herein occurs, Mortgagee may, at its discretion, remedy the same and
for such purpose shall have the right to enter upon the Mortgaged Property or
any portion thereof without thereby becoming liable to Mortgagor or any person
in possession thereof holding under Mortgagor. If Mortgagee shall remedy such a
default or appear in, defend, or bring any action or proceeding to protect its
interest in the Mortgaged Property or to foreclose this Mortgage or collect the
Debt, the costs and expenses thereof (including reasonable attorneys' fees to
the extent permitted by law), shall be paid by Mortgagor to Mortgagee within ten
(10) business days of demand, with interest accruing after such (10) day period
at the Default Rate as defined in the Note; provided, however, that such
interest rate shall in no event exceed the maximum interest rate which Mortgagor
may by law pay, for the period after notice from Mortgagee that such costs or
expenses were incurred to the date of payment to Mortgagee. All such costs and
expenses incurred by Mortgagee pursuant to the terms of this Mortgage, with
interest, shall be secured by this Mortgage.
25. Late Payment Charge. If any portion of the Debt is not paid within ten
(10) days after the date on which it is due, Mortgagor shall pay to Mortgagee
upon demand an amount equal
16
<PAGE>
to 5% of such unpaid portion of the Debt as a late payment charge, and such
amount shall be secured by this Mortgage.
26. Appointment of Receiver. Mortgagee, in any action to foreclose this
Mortgage or upon the actual or threatened waste to any part of the Mortgaged
Property or upon the occurrence of any default beyond the expiration of
applicable grace or cure periods, if any, hereunder, shall be at liberty,
without notice, to apply for the appointment of a receiver of the Rents, and
shall be entitled to the appointment of such receiver as a matter of right,
without regard to the value of the Mortgaged Property as security for the Debt,
or the solvency or insolvency of any person then liable for the payment of the
Debt. Mortgagor hereby specifically waives its right to the appointment of a
receiver as aforesaid and hereby expressly agrees that such appointment shall be
made as an admitted equity and as a matter of absolute right to Mortgagee.
27. Non-Waiver. The failure of Mortgagee to insist upon strict performance
of any term of this Mortgage shall not be deemed to be a waiver of any term of
this Mortgage. Mortgagor shall not be relieved of Mortgagor's obligation to pay
the Debt at the time and in the manner provided for its payment in the Note and
this Mortgage by reason of (i) failure of Mortgagee to comply with any request
of Mortgagor to take any action to foreclose this Mortgage or otherwise enforce
any of the provisions hereof or of the Note or any other mortgage, instrument or
document evidencing, securing or guaranteeing payment of the Debt or any portion
thereof; (ii) the release, regardless of consideration, of the whole or any part
of the Mortgaged Property or any other security for the Debt; or (iii) any
agreement or stipulation between Mortgagee and any subsequent owner or owners of
the Mortgaged Property or other person extending the time of payment or
otherwise modifying or supplementing the terms of the Note, this Mortgage or any
other mortgage, instrument or document evidencing, securing or guaranteeing
payment of the Debt or any portion thereof, without first having obtained the
consent of Mortgagor, and in the latter event, Mortgagor shall continue to be
obligated to pay the Debt at the time and in the manner provided in the Note and
this Mortgage, as so extended, modified and supplemented, unless expressly
released and discharged by Mortgagee. Regardless of consideration, and without
the necessity for any notice to or consent by the holder of any subordinate
lien, encumbrance, right, title or interest in or to the Mortgaged Property,
Mortgagee may release any person at any time liable for the payment of the Debt
or any portion thereof or any part of the security held for the Debt and may
extend the time of payment or otherwise modify the terms of the Note or this
Mortgage, including, without limitation, a modification of the interest rate
payable on the principal balance of the Note, without in any manner impairing or
affecting this Mortgage or the lien thereof or the priority of this Mortgage, as
so extended and modified, as security for the Debt over any such subordinate
lien, encumbrance, right, title or interest. Mortgagee may resort for the
payment of the Debt to any other security held by Mortgagee in such order and
manner as Mortgagee, in its discretion, may elect. Mortgagee may take action to
recover the Debt, or any portion thereof, or to enforce any covenant hereof
without prejudice to the right of Mortgagee thereafter to foreclose this
Mortgage. Mortgagee shall not be limited exclusively to the rights and remedies
herein stated but shall be entitled to every additional right and remedy now or
hereafter afforded by law. The rights of Mortgagee under this Mortgage shall be
separate, distinct and cumulative and none shall be given effect to the
exclusion of the others. No act of Mortgagee shall be construed as an election
to proceed under any one provision herein to the exclusion of any other
provision.
17
<PAGE>
28. Construction. The terms of this Mortgage shall be construed in
accordance with the laws of the State in which the Premises are located.
29. Effect of Security Agreement. Mortgagor does hereby grant and this
Mortgage is and shall be deemed to create, grant, give and convey a Mortgage of,
a lien and encumbrance upon, and a present security interest in both real and
personal property owned by Mortgagor, including all improvements, goods,
chattels, furniture, furnishings, fixtures, equipment, apparatus, appliances and
other items of tangible or intangible personal property, hereinabove
particularly or generally described and conveyed, whether now or hereafter
affixed to, located upon, necessary for or used or useful, either directly or
indirectly, in connection with the operation of the Mortgaged Property as an
office building project, and this Mortgage shall also serve as a "security
agreement" within the meaning of that term as used in the Uniform Commercial
Code as adopted and in force from time to time in the State of New York, and
shall be operative and effective as a security agreement in addition to, and not
in substitution for, any other security agreement executed by Mortgagor in
connection with the extension of the credit transaction secured hereby.
Mortgagor agrees to and shall, upon the request of Mortgagee, execute and
deliver to Mortgagee, in form and content satisfactory to Mortgagee, such
financing statements, descriptions of property and such further assurances as
Mortgagee, in its sole discretion, may from time to time consider necessary to
create perfect, continue and preserve the lien and encumbrances hereof and the
security interest granted herein upon and in such real and personal property and
fixtures described herein, including all buildings, improvements, goods,
chattels, furniture, furnishings, fixtures, equipment, apparatus, appliances and
other items of tangible and intangible personal property herein specifically or
generally described and intended to be the subject of the security interest,
lien and encumbrance hereby created, granted and conveyed. Without the prior
written consent of Mortgagee, Mortgagor shall not create or suffer to be
created, pursuant to the Uniform Commercial Code, any other security interest in
such real and personal property and fixtures described herein. Upon the
occurrence of a default hereunder or Mortgagor's breach of any other covenants
or agreements between the parties entered into in conjunction herewith,
Mortgagor shall have the remedies of a secured party under the Uniform
Commercial Code and, at Mortgagee's option, the remedies provided for in this
Mortgage. Mortgagee, at the expense of Mortgagor, may or shall cause such
statements, descriptions and assurances, as herein provided in this Section 29,
and this Mortgage to be recorded and re-recorded, filed and refiled, at such
times and in such places as may be required or permitted by law to so create,
perfect and preserve the lien and encumbrance hereof upon all of the Mortgaged
Property.
30. Further Acts, etc. Mortgagor will, at the cost of Mortgagor, and
without expense to Mortgagee, do, execute, acknowledge and deliver all and every
such further acts, deeds, conveyances, mortgages, assignments, notices of
assignments, transfers and assurances as Mortgagee shall, from time to time,
reasonably require, for the better assuring, conveying, assigning, transferring
and confirming unto Mortgagee the property and rights hereby mortgaged or
intended now or hereafter so to be, or which Mortgagor may be or may hereafter
become bound to convey or assign to Mortgagee, or for carrying out the intention
or facilitating the performance of the terms of this Mortgage or for filing,
registering or recording this Mortgage and, on demand, will
18
<PAGE>
execute and deliver one or more financing statements, chattel mortgages or
comparable security instruments, to evidence more effectively the lien hereof
upon the Mortgaged Property.
31. Headings, etc. The headings and captions of various paragraphs of this
Mortgage are for convenience of reference only and are not to be construed as
defining or limiting, in any way, the scope or intent of the provisions hereof.
32. Filing of Mortgage, etc. Mortgagor forthwith upon the execution and
delivery of this Mortgage and thereafter, from time to time, will cause this
Mortgage, and any security instrument creating a lien or evidencing the lien
hereof upon the Mortgaged Property and each instrument of further assurance to
be filed, registered or recorded in such manner and in such places as may be
required by any present or future law in order to publish notice of and fully to
protect the lien hereof upon, and the interest of Mortgagee in the Mortgaged
Property, Mortgagor will pay all filing, registration or recording fees, and all
expenses incident to the preparation, execution and acknowledgment of this
Mortgage, any mortgage supplemental hereto, any security instrument with respect
to the Mortgaged Property and any instrument of further assurance, and all
Federal, state, county and municipal taxes, duties, imposts, assessments and
charges arising out of or in connection with the execution and delivery of this
Mortgage, any mortgage supplemental hereto, any security instrument with respect
to the Mortgaged Property or any instrument of further assurance. Mortgagor
shall hold harmless and indemnify Mortgagee, its successors and assigns, against
any liability incurred by reason of the imposition of any tax on the making and
recording of this Mortgage.
33. Usury Laws. This Mortgage and the Note are subject to the express
condition that at no time shall Mortgagor be obligated or required to pay
interest on the principal balance due under the Note at a rate which could
subject the holder of the Note to either civil or criminal liability as a result
of being in excess of the maximum interest rate which Mortgagor is permitted by
law to contract or agree to pay. If by the terms of this Mortgage or the Note,
Mortgagor is at any time required or obligated to pay interest on the principal
balance due under the Note at a rate in excess of such maximum rate, the rate of
interest under the Note shall be deemed to be immediately reduced to such
maximum rate and the interest payable shall be computed at such maximum rate and
all prior interest payments in excess of such maximum rate and 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 of the Note.
34. Discretion of Mortgagee. Wherever pursuant to this Mortgage, Mortgagee
exercises any right given to it to approve or disapprove, or any arrangement or
term is to be satisfactory to Mortgagee, except where otherwise expressly
provided to the contrary, the decision of Mortgagee to approve or disapprove or
to decide that arrangements or terms are satisfactory or not satisfactory shall
be the reasonable discretion of Mortgagee.
35. Recovery of Sums Required To Be Paid. Mortgagee shall have the right
from time to time to take action to recover any sum or sums which constitute a
part of the Debt as the same become due, without regard to whether or not the
balance of the Debt shall be due, and without
19
<PAGE>
prejudice to the right of Mortgagee thereafter to bring an action of
foreclosure, or any other action, for a default or defaults by Mortgagor
existing at the time such earlier action was commenced.
36. Authority. Mortgagor (and the undersigned representative of Mortgagor,
if any) has full power, authority and legal right to execute this Mortgage and
to mortgage, give, grant, bargain, sell, alien, enfeoff, convey, confirm and
assign the Mortgaged Property pursuant to the terms hereof and to keep and
observe all of the terms of this Mortgage on Mortgagor's part to be performed.
37. Actions and Proceedings. Mortgagee shall have the right but not the
obligation to appear in and defend any action or proceeding brought with respect
to the Mortgaged Property and to bring any action or proceeding, in the name and
on behalf of Mortgagor, which Mortgagee, in its reasonable discretion, feels
should be brought to protect its interest in the Mortgaged Property.
38. Inapplicable Provisions. If any terms, covenant or condition of this
Mortgage shall be held to be invalid, illegal or unenforceable in any respect,
this Mortgage shall be construed without such provision.
39. Duplicate Originals. This Mortgage may be executed in any number of
duplicate originals and each such duplicate original shall be deemed to
constitute but one and the same instrument.
40. Certain Definitions. Unless the context clearly indicates a contrary
intent or unless otherwise specifically provided herein, words used in this
Mortgage shall be used interchangeably in singular or plural form and the word
"Mortgagor" shall mean each Mortgagor and any subsequent owner or owners of the
Mortgaged Property or any part thereof or interest therein, the word "Mortgagee"
shall mean Mortgagee or any subsequent holder of the Note, the word "Note" shall
mean the Note or any other evidence of indebtedness secured by this Mortgage,
the word "Guarantor" shall mean each person guaranteeing payment of the Debt or
any portion thereof or performance by Mortgagor of any of the terms of this
Mortgage and their respective heirs, executors, administrators, legal
representatives, successors and assigns, the word "person" shall include an
individual, corporation, partnership, trust, unincorporated association,
government, governmental authority, or other entity, the words "Mortgaged
Property" shall include any portion of the Mortgaged Property or interest
therein, and the word "Debt" shall mean all sums secured by this Mortgage.
Whenever the context may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural and vice versa.
41. Waiver of Notice. Mortgagor shall not be entitled to any notices of
any nature whatsoever from Mortgagee except with respect to matters for which
this Mortgage specifically and expressly provides for the giving of notice by
Mortgagee to Mortgagor, and Mortgagor hereby expressly waives the right to
receive any notice from Mortgagee with respect to any matter for which this
Mortgage does not specifically and expressly provide for the giving of notice by
Mortgagee to Mortgagor.
20
<PAGE>
42. No Oral Change. This Mortgage may only be modified or amended by an
agreement in writing signed by Mortgagor and Mortgagee, and may only be
released, discharged or satisfied of record by an agreement in writing signed by
Mortgagee.
43. Environmental Requirements. Mortgagor shall keep or cause the
Mortgaged Property to be kept free of Hazardous Materials; provided however that
to the extent the presence of Hazardous Materials on the Mortgaged Property has
been disclosed to Mortgagee pursuant to the Contribution and Exchange Agreement
by and between Mortgagor, Robert Martin-Eastview North Company, L.P., Mortgagee
and Cali Realty Corporation, dated as of January __, 1997 (the "Contribution and
Exchange Agreement"), the provisions of the Contribution and Exchange Agreement
shall govern the remediation thereof. In furtherance thereof and subject to any
express provisions in the Contribution and Exchange Agreement relating to
Hazardous Materials, Mortgagor shall not cause or permit the Mortgaged Property
to be used to generate, manufacture, refine, transport, treat, store, handle,
dispose, transfer, produce or process Hazardous Materials nor shall Mortgagor
cause or permit, as a result of any intentional or unintentional act or omission
on the part of Mortgagor or any tenant or subtenant, a release of Hazardous
Materials onto the Mortgaged Property or onto any other property. Mortgagor
shall comply with and use its best efforts to ensure compliance by all tenants
and subtenants with all applicable federal, state and local laws, ordinances,
rules and regulations whenever and by whomever triggered, and shall obtain and
comply with any and all approvals, registrations or permits required thereunder.
Mortgagor shall defend, indemnify, and hold harmless the Mortgagee and its
employees, agents, officers, and directors, from and against any claims,
demands, penalties, fines, liabilities, settlements, damages, costs, or expenses
of whatever kind or nature, known or unknown, contingent or otherwise, arising
out of, or in any way related to (i) the presence, disposal, release, or
threatened release of any Hazardous Materials which are on, from, or affecting
the soil, water, vegetation, buildings, personal property, persons, animals, or
otherwise; (ii) any personal injury (including wrongful death) or property
damage (real or personal) arising out of or related to such Hazardous Materials;
(iii) any lawsuit brought or threatened, settlement reached, or government order
relating to such Hazardous Materials; and/or (iv) any violation of laws, orders,
regulations, requirements, or demands of government authorities, or any policies
or requirements of the Mortgagee, which are based upon or in any way related to
such Hazardous Materials including, without limitation, reasonable attorney and
consultant fees, investigation and laboratory fees, court costs, and litigation
expenses; provided however that in the event Mortgagor has transferred the
Mortgaged Property to Mortgagee pursuant to the Put-Call Agreement (as
hereinafter defined), Mortgagor shall not indemnify, defend or hold Mortgagee
harmless from and against any claims relating to Hazardous Materials disclosed
to Mortgagee in the Contribution and Exchange Agreement or otherwise disclosed
to Mortgagee and consented to by Mortgagee in writing. In the event this
Mortgage is foreclosed, or Mortgagor tenders a deed in lieu of foreclosure,
Mortgagor shall deliver the Mortgaged Property to the Mortgagee free of any and
all Hazardous Materials that do not exist on the Mortgaged Property as of the
date hereof so that the condition of the Mortgaged Property shall conform with
all applicable federal, state and local laws, ordinances, rules or regulations
affecting the Mortgaged Property. The provisions of this Section 43 shall be in
addition to any and all obligations and liabilities Mortgagor may have to the
Mortgagee at common law and shall survive the transactions contemplated herein.
21
<PAGE>
"Environmental Law" means any and all present and future federal, state or
local laws, statutes, codes, ordinances, rules, regulations, permits, consents,
approvals, licenses, judgments, orders, writs, decrees, injunctions or other
restrictions or requirements relating to health, the environment, any Hazardous
Materials or any use, storage, release, threatened release, emission, discharge,
generation, processing, abatement, removal or disposition of any Hazardous
Materials from, under, into or on the Mortgaged Property or any handling,
transportation or treatment of Hazardous Materials relating to the Mortgaged
Property, including, but not limited to, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section
9601, et seq.), the Resource Conservation and Recovery Act, as amended (42
U.S.C. Section 6921, et seq.), the Hazardous Materials Transportation Act, as
amended (42 U.S.C. Section 1801, et seq.), the Clean Air Act, as amended (42
U.S.C. Sections 7401, et seq.), the Clean Water Act, as amended (33 U.S.C.
Sections 1251, et seq.), the Toxic Substances Control Act, as amended (15 U.S.C.
Sections 2601 et seq.), the Safe Drinking Water Act, as amended (42 U.S.C.
Section 300f et seq.), the Atomic Energy Act, as amended (42 U.S.C. Sections
2011 et seq.), the Federal Insecticide, Fungicide and Rodenticide Act, as
amended (7 U.S.C. Sections 136 et seq), the Occupational Safety and Health Act,
as amended (29 U.S.C. Sections 651 et seq.), and the regulations adopted and
publications promulgated pursuant thereto.
"Hazardous Materials" means any substance, material or waste which is
regulated by any federal, state or local governmental or quasi-governmental
authority, and includes, without being limited to (a) any substance, materials
or waste defined, used or listed as a "hazardous waste", "extremely hazardous
waste", "restricted hazardous waste", "hazardous substance", "Hazardous
Material", "toxic substance" or other similar or related terms as defined, used
or listed in any Environmental Law, (b) any petroleum products, asbestos,
polychlorinated biphenyls, flammable explosives or radioactive materials, (c)
any additional substances or materials which are now or hereafter hazardous or
toxic substances under any Environmental Law relating to the Premises and (d) as
of any date of determination, any additional substances or materials which are
hereafter incorporated in or added to the definition of "hazardous substance"
for purpose of any Environmental Law.
44. Accessibility Requirements.
(a) Mortgagor hereby agrees to indemnify Mortgagee and hold
Mortgagee harmless from and against any and all losses, liabilities, damages,
injuries, costs, expenses and claims of any and every kind whatsoever paid,
incurred or suffered by, or asserted against Mortgagee for, with respect to, or
as a direct or indirect result of, the noncompliance of the Mortgaged Property
with the Accessibility Laws (hereinafter defined) from and after the date
hereof, provided that such loss, liability, damage, injury, cost, expense or
claim arises prior to such time as Mortgagee takes title to the Mortgaged
Property pursuant to the Put-Call Agreement (as hereinafter defined), a
deed-in-lieu of foreclosure or another transfer of the Mortgaged Property.
(b) It is expressly understood and agreed that the obligations of
Mortgagor with respect to this Section 44 of this Mortgage shall survive any
termination, satisfaction, assignment, entry of judgment of foreclosure, or
delivery of a deed in lieu of foreclosure including, but not limited to, the
obligation to remedy and cure any such condition at Mortgagor's sole cost and
22
<PAGE>
expense, and to indemnify Mortgagee as aforesaid, and shall survive Mortgagee's
sale, lease or assignment of the Mortgaged Property or its interest therein.
(c) "Accessibility Laws" shall be defined as all federal, state and
municipal laws, ordinances, rules and regulations currently in existence or
hereinafter enacted or rendered governing accessibility for the disabled
including, but not limited to (i) [The Architectural Barriers Act of 1968, The
Rehabilitation Act of 1973,] The Fair Housing Act of 1988, The Americans With
Disabilities Act, and all New York statutes and regulations; (ii) judicial or
administrative interpretations thereof, including any judicial or administrative
orders or judgments; and (iii) ordinances, codes, plans, injunctions, decrees,
permits, demand letters, concessions, grants, franchises, licenses, agreements,
notices or other governmental restrictions relating to the protection of the
disabled or the handicapped.
45. Mortgagor's Exculpation. Notwithstanding any other provision of this
Mortgage, the Note or any other Loan Document, the obligations of Mortgagor to
pay the indebtedness evidenced by the Note, and to perform and observe and make
good the other covenants, warranties, and agreements contained in the Note, this
Mortgage or in any Loan Document shall not be enforced by an action or
proceeding against Mortgagor or its members wherein or whereby any deficiency or
other money judgment shall be sought against Mortgagor or its members (a
"Deficiency Action"), and neither Mortgagor nor its members shall be liable for
such deficiency or money judgment and Mortgagee specifically waives any right to
bring suit for a Deficiency Action; provided that Mortgagor may be made a party
defendant in a foreclosure action against the Mortgaged Property and any
judgment in such foreclosure action shall be enforceable against Mortgagor, and
provided further that nothing contained above shall be deemed (i) to limit or
restrict any right to seek injunctive relief against Mortgagor or affect the
lien of the Mortgage, (ii) to be a release or impairment of the other
obligations of Mortgagor under this Mortgage, (iii) to limit Mortgagee from
enforcing its rights under the Note, this Mortgage or any Loan Document, (iv) to
constitute a waiver, release or discharge of any indebtedness or obligation
under the Note or secured by this Mortgage or (v) to affect the liability of
Guarantors under any guaranty. Notwithstanding any limitation of liability set
forth above, Mortgagor shall be personally liable to Mortgagee for actual
out-of-pocket expenses at all times for (i) the willful misapplication of (a)
any insurance proceeds paid under any Policies by reason of damage, loss, or
destruction to the Mortgaged Property, to the extent of such misapplication or
(b) proceeds or awards resulting from condemnation or other taking in lieu of
condemnation of any portion of the Mortgaged Property to the extent of such
misapplication, (ii) any damages to Mortgagee resulting from any fraud or
intentional misrepresentation made by Mortgagor and (iii) any damage resulting
from or on account of any action or lien on account of any environmental matters
to the extent Mortgagor is liable for same as more particularly set forth in
Section 43 hereof.
46. Release of Individual Parcel. Mortgagor and Mortgagee have entered
into a certain Put-Call Agreement dated on or about the date hereof (the
"Put-Call Agreement"). In the event that Mortgagee acquires either of the
parcels constituting the Premises pursuant to the Put-Call Agreement (an
"Acquired Parcel"), then upon payment of the release price for the Acquired
Parcel, as set forth on Exhibit C annexed hereto and made a part hereof, and
upon payment of all other amounts and charges then due and payable hereunder or
under any of the Loan Documents,
23
<PAGE>
the Mortgagor shall be entitled to a release of the Acquired Parcel from the
lien of this Mortgage. The Mortgagor will pay all reasonable third party
out-of-pocket costs and expenses, including attorney's fees, incurred by the
Mortgagee in connection with any release requested by the Mortgagor hereunder.
47. Multiple Dwelling. The Mortgaged Property is not principally improved
or to be improved by one or more structures containing in the aggregate not more
than six (6) residential dwelling units, each dwelling unit having its own
separate cooking facilities.
IN WITNESS WHEREOF, Mortgagor and Mortgagee have duly executed this
Mortgage the day and year first above written.
ROBERT MARTIN COMPANY, LLC
By:__________________________________
Martin S. Berger, Manager
CALI REALTY, L.P.
By: Cali Realty Corporation,
its general partner
By:__________________________________
Roger W. Thomas, Vice President
24
<PAGE>
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On this ___ day of _______________, 1997, before me, personally came
___________________ to me known, who, being by me duly sworn, did depose and say
that he resides at _____________________________________; that he is an
authorized member of ROBERT MARTIN COMPANY, LLC, a New York limited liability
company, and the company described in and which executed the foregoing
instrument and that he executed such instrument as the act and deed of, and on
behalf of, said company.
_______________________________________
My Commission Expires:_________________
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this __ day of January, 1997, before me personally came
________________ to me known, who, being duly sworn, did depose and state that
he resides at _______________; that he is the ________________ of Cali Realty
Corporation, the general partner of Cali Realty, L.P., the Delaware limited
partnership described in and which executed the above instrument; and that he
signed his name thereto by order of the Board of Directors of said corporation,
as general partner of said limited partnership.
_____________________________________
Notary Public
25
<PAGE>
EXHIBIT A-1
(Skyline Premises)
26
<PAGE>
EXHIBIT A-2
(200 Premises)
27
<PAGE>
EXHIBIT B
(Mortgages)
28
<PAGE>
EXHIBIT C
(Release Prices)
Parcel Price
------ -----
1. 7 Skyline Drive $7,250,000
Mount Pleasant, New York
2. 200 Corporate Boulevard South $4,350,000
Yonkers, New York
29
<PAGE>
EXHIBT 8.1 (cont.)
GUARANTY
THIS GUARANTY ("Guaranty"), dated January __, 1997, made by MARTIN S.
BERGER, having an address at 630 Park Avenue, Apt. 8A, New York, New York 10021,
ROBERT F. WEINBERG, having an address at 5 Barker Avenue, White Plains, New York
10601, BRAD W. BERGER, having an address at 455 East 86th Street, Apt. 30D, New
York, New York 10028, and TIMOTHY M. JONES, having an address at 20 Church
Street, Greenwich, Connecticut 06830 (collectively, the "Guarantors") in favor
of CALI REALTY, L.P., a Delaware limited partnership, having an address c/o Cali
Realty Corporation, 11 Commerce Drive, Cranford, New Jersey 07016 (the
"Lender").
RECITALS
A. Robert Martin Company LLC, a New York limited liability company (the
"Borrower"), has agreed to execute its Amended and Restated Replacement Note in
the principal amount of Eleven Million Six Hundred Thousand ($11,600,000)
Dollars payable to the order of Lender (the "Note").
B. Borrower has executed or will execute a Mortgage Modification and
Spreader Agreement (the "Mortgage") encumbering certain real property interests
in Westchester County, New York, more particularly described on Exhibits A-1 and
A-2 to the Mortgage (the "Property") to secure the payment of the Note.
C. In addition, the Borrower has executed or will execute an Absolute
Assignment of Leases and Rents of even date herewith (the "Assignment of
Leases") to secure the payment of the Note.
D. In order to induce the Lender to accept the Note, which Lender would
not do but for the execution, delivery and performance of this Guaranty, each of
the Guarantors has agreed to guarantee the prompt payment of the Obligations (as
hereinafter defined) and the performance by Borrower of the terms, covenants,
and conditions of the Note, the Mortgage, and the Security Documents (as
hereinafter defined).
E. Upon the execution of the Note by Borrower and the delivery thereof to
Lender, this Guaranty will be the legal, valid and binding obligation of each of
the Guarantors.
1
Prepared by and return to:
______________________________
Bryant Messner, Esq.
Messner Pavel & Reeves, LLC
600 Seventeenth Street
Suite 2100-South
Denver, Colorado 80202
<PAGE>
GUARANTY
1. For valuable consideration, each of the Guarantors hereby jointly and
severally and unconditionally guarantees to Lender, irrespective of the validity
and enforceability of the Note or the obligations of Borrower thereunder, and
irrespective of any other circumstances that might affect the liability of a
guarantor or surety:
(a) the prompt and unconditional payment by Borrower of all sums
from time to time owing to Lender from Borrower on account of: (i) principal and
interest on the Note when due and payable; and (ii) any other sums payable by
Borrower to Lender under the Note, the Mortgage, the Assignment of Leases, or
any other instrument whether now in existence or hereafter executed relating to
or securing payment of the Note (the "Security Documents"); and
(b) the performance by Borrower of the terms and conditions
contained in the Note, and any of the Security Documents.
All of the foregoing obligations described in this Section 1 are herein
collectively referred to as the "Obligations."
2. Each of the Guarantors authorizes Lender, without notice to Guarantor
and without impairing the liability of Guarantor hereunder, from time to time:
(a) to renew, extend, accelerate, modify, or otherwise change the times for or
terms of payment or performance of the Obligations including, but not limited to
any increase or decrease in the rate of interest provided for in the Note; (b)
to take and hold security for the performance of this Guaranty or the
Obligations, and to exchange, enforce, waive, and release any such security; (c)
to apply such security or direct the order or manner of sale thereof as Lender,
in its sole discretion, may determine; and (d) to release or substitute, in
whole or in part, any one or more of the parties who guarantee the Obligations
without affecting the liability of the remaining Guarantors. Without limiting
the generality of the foregoing, each of the Guarantors waives any rights which
they might otherwise have by reason of any release of fewer than all of the
Guarantors of the Obligations.
3. Each of the Guarantors hereby waives presentation to, demand of,
payment from, and protest to Borrower of the Obligations, and notice of dishonor
and protest for nonpayment. The obligations of the Guarantors hereunder shall
not be affected by: (a) the failure of Lender to assert any claim or demand or
to enforce any right or remedy against Borrower under the provisions of the
Note, the Mortgage, the Assignment of Leases or any of the other Security
Documents; (b) any extension or renewal of the Note, the Mortgage, the
Assignment of Leases, or any of the other Security Documents; (c) any
rescission, waiver, amendment, or modification of any of the terms or
2
Prepared by and return to:
______________________________
Bryant Messner, Esq.
Messner Pavel & Reeves, LLC
600 Seventeenth Street
Suite 2100-South
Denver, Colorado 80202
<PAGE>
provisions hereof or of the Note, the Mortgage, the Assignment of Leases, or any
of the other Security Documents; or (d) the release of any security held by
Lender for the Obligations.
4. Each of the Guarantors further agrees that this Guaranty constitutes a
guarantee of payment and not of collection, and waive any right to require that
any resort be had by Lender to any security held by it for payment of the
Obligations before demanding payment hereunder.
5. The obligations of each of the Guarantors hereunder shall not be
subject to any reduction, limitation, impairment, or termination for any reason
including, without limitation, any claim or waiver, release, surrender,
alteration, or compromise, and shall not be subject to any defense of setoff,
counterclaim, recoupment, or termination whatsoever by reason of the invalidity,
illegality, or unenforceability of the Obligations or otherwise. Without
limiting the generality of the foregoing, the obligations of each of the
Guarantors hereunder shall not be discharged or impaired or otherwise affected
by the failure of Lender to assert or enforce any claim, demand, or remedy
hereunder or under the Note or any instrument securing payment of the Note, by
any waiver or modification of the Note, the Mortgage, the Assignment of Leases,
or any of the other Security Documents, by any default, failure or delay,
willful or otherwise, in the performance of the Obligations, or any other act,
omission, or delay which might in any manner or to any extent vary the risk of
the Guarantors or which might otherwise discharge the Guarantors by operation of
law.
6. Each of the Guarantors further agrees that this Guaranty shall continue
to be effective or shall be reinstated if any payment of principal or interest
on the Note or any other obligation or any part thereof is rescinded or must
otherwise be restored by Lender, or if any other right which Lender may have at
law or in equity against the Guarantors by virtue hereof becomes subject to any
bankruptcy limitation. Upon failure of Borrower to pay any sum on the Note when
and as the same shall become due and payable beyond any applicable grace and
cure periods available to Borrower thereunder, each of the Guarantors hereby
promises to and will, upon receipt of written demand by Lender, forthwith pay or
cause to be paid to Lender in cash an amount equal to the sum of: (a) the unpaid
principal amount of the Note plus accrued and unpaid interest and all expenses
of collection; and (b) all other unpaid Obligations. Thereupon, Lender shall
assign the Note or Obligations, together with all security then held by it for
the Note or hereunder, to the Guarantors (on a prorata basis with payments made
by any other guarantor) or shall make such other disposition thereof as the
Guarantors shall direct (all without recourse to Lender and without any
representation or warranty by Lender).
7. In the event any payment of Borrower to Lender is held to constitute a
preference under the bankruptcy laws, or if for any other reason Lender is
required to refund such payment or pay the amount thereof to any other party,
such payment by Borrower to Lender shall not constitute a release of Guarantors
from any liability hereunder, but each of the Guarantors agrees to pay such
3
Prepared by and return to:
______________________________
Bryant Messner, Esq.
Messner Pavel & Reeves, LLC
600 Seventeenth Street
Suite 2100-South
Denver, Colorado 80202
<PAGE>
amount to Lender upon demand and this Guaranty shall continue to be effective or
shall be reinstated, as the case may be, to the extent of any such payment or
payments.
8. Upon a default of Borrower, Lender may elect to foreclose against any
real or personal property security it holds for the Obligations or any part
thereof, or exercise any other remedy against Borrower, any security or any
Guarantor of the Obligations, even if the effect of that action is to deprive
any or all Guarantors of the Obligations of the right to collect reimbursement
from Borrower for any sums paid to Lender.
9. No delay on the part of Lender in exercising any right hereunder, nor
any failure by Lender to exercise the same, shall operate as a waiver of such
rights. No notice to or demand on any of the Guarantors shall be deemed to be a
waiver of the Obligations or of the right of Lender to take further action
without notice or demand as provided herein.
10. Each of the Guarantors hereby agrees to pay to Lender the amount of
any actual third-party out-of-pocket costs and reasonable attorneys' fees
incurred by Lender in the collection of any amounts due Lender pursuant to, or
in respect of, this Guaranty whether or not suit is filed hereon.
11. Any notice, request, demand, statement or consent made hereunder
shall be in writing and shall be sent by hand or by reputable overnight courier
or by registered or certified mail, return receipt requested, and shall be
deemed given when delivered if by hand or by overnight courier or when
postmarked and addressed as follows:
To Guarantors: Martin S. Berger
630 Park Avenue, Apt. 8A
New York , New York 10021
Robert F. Weinberg
5 Barker Avenue
White Plains, New York 10601
Brad W. Berger
455 East 86th Street, Apt. 30D
New York, New York 10028
Timothy M. Jones
20 Church Street
Greenwich, Connecticut 06830
4
Prepared by and return to:
______________________________
Bryant Messner, Esq.
Messner Pavel & Reeves, LLC
600 Seventeenth Street
Suite 2100-South
Denver, Colorado 80202
<PAGE>
With a copy to: Battle Fowler, LLP
75 East 55th Street
New York, New York 10022
Attn: Robert J. Wertheimer, Esq.
Fax No. (212) 856-7808
To Lender: Cali Realty, L.P.
c/o 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: Jonathan A. Bernstein, Esq.
Fax No. (212) 326-0806
Each party may designate a change of address by notice to the other party, given
at least fifteen (15) days before such change of address is to become effective.
12. Each of the Guarantors assumes full responsibility for keeping fully
informed of the financial condition of Borrower and all other circumstances
affecting Borrower's ability to perform its Obligations to Lender, and agrees
that Lender will have no duty to report to the Guarantors any information which
Lender receives about Borrower's financial condition or any circumstances
bearing on its ability to perform.
13. Each of the Guarantors hereby postpones and subordinates to the claims
of Lender against Borrower any indebtedness or other claim which each of the
Guarantors may have against Borrower. Until all of the Obligations have been
paid and satisfied in full, each of the Guarantors shall have no right of
subrogation, and waives any right to enforce any remedy which Lender now has or
may hereafter have against Borrower, and waives any benefit of, and any right to
participate in, any security now or hereafter held by Lender.
14. Neither this Guaranty nor any provisions hereof may be amended,
modified, waived, discharged, or terminated orally, but only by an instrument in
writing duly signed by or on behalf of each of the Guarantors and Lender. This
is a continuing Guaranty and shall remain in full force and
5
Prepared by and return to:
______________________________
Bryant Messner, Esq.
Messner Pavel & Reeves, LLC
600 Seventeenth Street
Suite 2100-South
Denver, Colorado 80202
<PAGE>
effect and be binding upon each of the Guarantors and its successors and assigns
and shall inure to the benefit of any successor or assign of Lender (including,
without limitation, any holder of the Note).
15. This Guaranty shall be deemed to be made under and shall be governed
by the laws of the State of New York.
16. For any action related to the judicial enforcement or interpretation
of this Guaranty and all other agreements or documents contemplated by this
Guaranty, each of the Guarantors expressly submits to the nonexclusive
jurisdiction of the competent courts of the state or federal courts located in
the State of New York, United States of America. Nothing contained in this
Section shall affect the right to serve process in any other manner permitted by
law or the right of Lender to bring legal action or proceedings in any other
jurisdiction.
17. In the event that Borrower voluntarily transfers the Property to
Lender or its designee, each of the Guarantor's liability hereunder shall
terminate as of the date of said transfer, provided that (a) all transfer taxes
and recording and other fees due as a result of said transfer have been fully
paid by Borrower, (b) title to the Property shall be subject only to the
encumbrances set forth as exceptions to title policy numbers 221-W-6569-9 and
221-W-6569-25 issued by First American Title Insurance Company insuring the lien
of the Mortgage on the Property; (c) the Property has been leased in accordance
with the provisions of the Mortgage; and (d) the Property is conveyed subject to
the Guarantor's continuing obligations under that certain Environmental
Indemnity given on the date hereof from the Borrower to the Lender and subject
to such parties performance thereunder. Title shall also be free and clear of
all liens, encumbrances, judgments, real estate taxes and water and sewer
charges. Current real estate taxes, water and sewer charges and other items
customarily apportioned shall be apportioned as of the transfer date from
Borrower to Lender. Notwithstanding the foregoing provision, the each of the
Guarantors shall continue to be liable for any Obligations arising between the
date upon which Lender notifies Borrower that Borrower is in default beyond
applicable grace and cure periods, if any, under the Note, the Mortgage or any
other Security Document and the date upon which Borrower tenders a deed to the
Property to the Lender in the manner and condition set forth in this Section 17.
18. This Guaranty may be executed by the parties hereto in counterparts,
all of which together shall constitute a single Guaranty.
6
Prepared by and return to:
______________________________
Bryant Messner, Esq.
Messner Pavel & Reeves, LLC
600 Seventeenth Street
Suite 2100-South
Denver, Colorado 80202
<PAGE>
IN WITNESS WHEREOF, each of the Guarantors has caused this Guaranty to be
executed as of the day and year first above written.
_______________________________
Martin S. Berger
_______________________________
Robert F. Weinberg
_______________________________
Brad W. Berger
_______________________________
Timothy M. Jones
7
Prepared by and return to:
______________________________
Bryant Messner, Esq.
Messner Pavel & Reeves, LLC
600 Seventeenth Street
Suite 2100-South
Denver, Colorado 80202
<PAGE>
STATE OF NEW YORK )
:ss.:
COUNTY OF NEW YORK )
On the ___ day of January, 1997 before me personally came Martin S.
Berger, to me known to be the individual described in and who executed the
foregoing instrument, and acknowledged to me that he executed same.
_______________________________
Notary Public
STATE OF NEW YORK )
:ss.:
COUNTY OF NEW YORK )
On the ___ day of January, 1997 before me personally came Robert F.
Weinberg, to me known to be the individual described in and who executed the
foregoing instrument, and acknowledged to me that he executed same.
_______________________________
Notary Public
8
Prepared by and return to:
______________________________
Bryant Messner, Esq.
Messner Pavel & Reeves, LLC
600 Seventeenth Street
Suite 2100-South
Denver, Colorado 80202
<PAGE>
STATE OF NEW YORK )
:ss.:
COUNTY OF NEW YORK )
On the ___ day of January, 1997 before me personally came Brad W. Berger,
to me known to be the individual described in and who executed the foregoing
instrument, and acknowledged to me that he executed same.
_______________________________
Notary Public
STATE OF NEW YORK )
:ss.:
COUNTY OF NEW YORK )
On the ___ day of January, 1997 before me personally came Timothy M.
Jones, to me known to be the individual described in and who executed the
foregoing instrument, and acknowledged to me that he executed same.
_______________________________
Notary Public
9
Prepared by and return to:
______________________________
Bryant Messner, Esq.
Messner Pavel & Reeves, LLC
600 Seventeenth Street
Suite 2100-South
Denver, Colorado 80202
<PAGE>
EXHIBIT 8.1 (cont.)
================================================================================
ROBERT MARTIN COMPANY, LLC, a
New York limited liability company
Assignor,
-TO-
CALI REALTY, L.P., a
Delaware limited partnership
Assignee.
----------------------------------------------------
ABSOLUTE ASSIGNMENT OF LEASES AND RENTS
----------------------------------------------------
Dated: As of January __, 1997
Location: 200 Corporate Boulevard South, Yonkers, New York
7 Skyline Drive, Mt. Pleasant, New York
Section:
Block:
Lot:
RECORD AND RETURN TO:
Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attention: Andrew S. Levine, Esq.
<PAGE>
ABSOLUTE ASSIGNMENT OF LEASES AND RENTS
(With License Back)
THIS ABSOLUTE ASSIGNMENT OF LEASES AND RENTS (this "Assignment") is made
as of the ___ day of January, 1997, by and between ROBERT MARTIN COMPANY, LLC, a
New York limited liability company, having an address at 100 Clearbrook Road,
Elmsford, New York 10523 (the "Borrower"), and CALI REALTY, L.P., a Delaware
limited partnership, having an address c/o Cali Realty Corporation, 11 Commerce
Drive, Cranford, New Jersey 07016 ("Lender").
WITNESSETH:
FOR AND IN CONSIDERATION of the indebtedness hereinafter described,
Borrower does hereby assign, transfer and set over unto Lender, subject to the
terms hereof, all of the right, title and interest of Borrower in and to the
property hereinafter described (the "Security"), to wit:
(a) All rents, issues and profits arising from or related to the land,
situated in the County of Westchester and State of New York and described in
Exhibit A attached hereto and fully incorporated herein by reference for all
purposes and all improvements and any other property, whether real, personal or
mixed, located thereon (which land, improvements and other property are
hereinafter collectively called the "Property");
(b) All of Borrower's rights, titles, interests and privileges, as lessor,
in the leases now existing or hereafter made affecting the Property, whether or
not made by Borrower and as the same may have been, or may from time to time
hereafter be, modified, extended and renewed (hereinafter collectively called
the "Leases");
(c) All tenant security deposits and other amounts due and becoming due
under the Leases;
(d) All guarantees of the Leases, including guarantees of tenant
performance;
(e) All insurance proceeds, including rental loss coverage and business
interruption coverage with respect to the Leases; and
(f) All judgment and settlements of claims in favor of Borrower (including
condemnation proceeds, if any) and all rights, claims and causes of action under
any court proceeding including, without limitation, any bankruptcy,
reorganization or insolvency proceeding, or otherwise arising from the Leases.
2
<PAGE>
TO HAVE AND TO HOLD the Security unto Lender, its successors and assigns
forever, subject to the terms hereof.
ARTICLE 1
DEFINITIONS
1.1 Terms Defined Above. As used in this Assignment, the terms "Borrower,"
"Leases," "Lender," "Property," and "Security" shall have the respective
meanings indicated above.
1.2 Certain Definitions. The following terms shall have the meanings
assigned to them below whenever they are used in this Assignment, unless the
context clearly otherwise requires. Except where the context otherwise requires,
words in the singular form shall include the plural and vice versa.
(a) "Event of Default" shall mean any Event of Default as defined in
the Lien Instrument.
(b) "Guaranty" shall mean that certain Guaranty of even date
herewith, executed by Martin S. Berger, Robert F. Weinberg, Brad W. Berger and
Timothy M. Jones (the "Guarantors").
(c) "Lien Instrument" or "Mortgage" shall mean that certain Mortgage
Modification and Spreader Agreement of even date herewith, executed by Borrower
and granting a lien on the Property to Lender, as such instrument may be amended
and restated from time to time.
(d) "Loan Documents" shall mean the Note, the Lien Instrument, the
Guaranty, the Other Security Documents and all other instruments and documents
(as the same may be amended from time to time) executed by Borrower and
delivered to Lender in connection with, or as security for, the indebtedness
evidenced by the Note, except any separate environmental indemnity agreement.
(e) "Note" shall mean the Amended and Restated Replacement Note of
even date herewith, in the original principal amount of Eleven Million Six
Hundred Thousand ($11,600,000) Dollars, executed by Borrower and payable to the
order of Lender, as such instrument may be amended, renewed and restated from
time to time.
(f) "Obligations" shall mean the following:
(i) The indebtedness evidenced by the Note and all interest
thereon;
(ii) The performance of all covenants and agreements of
Borrower contained in the Loan Documents;
3
<PAGE>
(iii) All funds hereafter advanced by Lender to or for the
benefit of Borrower in accordance with the terms of any Loan Document and
all interest thereon;
(iv) All renewals, extensions, rearrangements and
modifications of any of the Obligations described hereinabove; and
(v) Actual reasonable attorneys' fees and actual reasonable
third party expenses of collection payable under the terms of any Loan
Document.
(g) "Other Security Documents" shall mean all and any of the
Documents other than the Note, Lien Instrument and the Guaranty, now or
hereafter executed by Borrower or others, and by or in favor of Lender, which
wholly or partially secure or guarantee payment of the Note.
ARTICLE 2
ASSIGNMENT
2.1 Absolute Assignment. This Assignment is, and is intended to be, an
absolute and present assignment of the Security from Borrower to Lender with a
concurrent license back to the Borrower (which license is subject to revocation
upon the occurrence of an Event of Default as herein provided) and is not
intended as merely the granting of a security interest relating to the
Obligations.
2.2 License. Borrower is hereby granted the license to manage and control
the Security and to collect at the time of, or within thirty (30) days in
advance of, the date provided for the payment thereof, all rents, issues, and
profits from the Property and to retain, use and enjoy the same. The license
created and granted hereby shall be recoverable upon the terms and conditions
contained herein.
2.3 Revocation of License. Immediately upon the occurrence of an Event of
Default and at any time thereafter, Lender, without in any way waiving such
default, may, at its option and without regard to the adequacy of the security
for the Obligations, either by an authorized representative or agent, with or
without bringing or instituting any judicial or other action or proceeding, or
by a receiver appointed by a court, immediately revoke the license granted in
Section 2.2, as evidenced by a written notice to said effect given to Borrower
and, further, at Lender's option (without any obligation to do so), take
possession of the Property and the Security and have, hold, manage, lease and
operate the Property and the Security on such terms and for such period of time
as Lender may deem proper and, in addition, either with or without taking
possession of the Property, demand, sue for or otherwise collect and receive all
rents, issues and profits from the Property, including those past due and
unpaid, with full power to make, from time to time, all alterations,
renovations, repairs or replacements thereto or thereof as may seem proper to
the Lender in its sole discretion, and to apply (in such order and priority as
Lender shall determine in its sole discretion, any statute, law, custom or use
to the contrary notwithstanding) such rents, issues and profits to the payment
of:
4
<PAGE>
(a) all reasonable expenses of (i) managing the Property including,
without limitation, the salaries, fees and wages of a managing agent and such
other employees as Lender may, in its sole discretion, deem necessary or
desirable and (ii) operating and maintaining the Property including, without
limitation, all taxes, charges, claims, assessments, water rents, sewer rents
and any other liens, and premiums for all insurance which Lender may in its sole
discretion deem necessary or desirable; the cost of any and all alterations,
renovations, repairs or replacements of or to the Property; and any and all
expenses incident to taking and retaining possession of the Property and the
Security; and
(b) the Obligations.
The exercise by Lender of the rights granted it in this Section 2.3, and the
collection and receipt of rents, issues and profits and the application thereof
as herein provided, shall not be considered a waiver of any Event of Default.
2.4 Trust Funds. All monies or funds covered by this Assignment paid to,
or for the benefit of, Borrower after the occurrence of an Event of Default are
hereby declared, and shall be deemed to be, trust funds in the hands of Borrower
for the sole benefit of Lender, until all Events of Default have been cured or
waived or the Obligations have been paid and performed in full. Borrower, or any
officer, director, representative or agent thereof receiving such trust funds or
having control or direction of same, is hereby made and shall be construed to be
a trustee of such trust funds so received or under its control and direction,
and such person shall be under a strict obligation and duty should such persons
receive or constructively receive trust funds to (1) remit any and all such
trust funds to Lender within five (5) days of receipt, upon demand therefor by
Lender; or (2) to apply such trust funds only to Obligations then due or the
operating expenses of the Property.
ARTICLE 3
COVENANTS, REPRESENTATIONS AND WARRANTIES
3.1 Liability. Lender shall not be liable for any loss sustained by
Borrower resulting from Lender's failure to let the Property after the
occurrence of an Event of Default or from any other act or omission of Lender in
managing the Property or the Security after taking possession of the Property
following the occurrence of an Event of Default, except for acts constituting
gross negligence, willful misconduct or bad faith. Lender shall not be obligated
to perform or discharge, nor does Lender hereby undertake to perform or
discharge, any obligation, duty or liability under any Lease or under or by
reason of this Assignment arising prior to Lender's taking possession of the
Property, and Borrower shall and does hereby indemnify Lender for, and save and
hold Lender harmless from, any and all liability, loss or damages, except so
much thereof as shall result from the gross negligence, willful misconduct or
bad faith of Lender, which may or might be incurred under any Lease or under or
by reason of this Assignment and from any and all claims and demands
5
<PAGE>
whatsoever which may be asserted against Lender by reason of any alleged
obligation or undertaking on its part to perform or discharge any of the terms,
covenants or agreements contained in any Lease including, without limitation,
any claims by any tenants of credit for rents for any period actually paid to
and received by Borrower but not delivered to Lender, and arising prior to
Lender's taking possession of the Property. Should Lender incur any such
liability under any Lease, under or by reason of this Assignment or in defense
of any such claim or demand, the amount thereof including, without limitation,
all third party out-of-pocket expenses and reasonable attorneys' fees, shall be
added to the principal of the Note and Borrower shall reimburse Lender therefor
immediately upon prior written demand. Unless and until Lender shall become a
mortgagee in possession or the fee owner of the Property or otherwise takes
possession or control of the Property following the occurrence of an Event of
Default, this Assignment shall not operate to place responsibility upon Lender
for the control, care, upkeep, management, operation or repair of the Property
and the Security or for the carrying out of any of the terms and conditions of
any Lease; nor shall this Assignment operate to make Lender responsible or
liable for any waste committed on the Property by the tenants or any other
party, for any dangerous or defective condition of the Property or for any
negligence in the control, care, upkeep, operation, management or repair of the
Property resulting in loss or injury or death to any tenant, licensee, employee,
stranger or other person whatsoever.
3.2 Termination. Upon payment and performance of the Obligations in full,
this Assignment shall become null and void and of no further legal force or
effect, but the affidavit, certificate, letter or statement of any officer,
agent, authorized representative or attorney of Lender showing any part of the
Obligations remaining unpaid or unperformed may be relied upon by any person as
conclusive evidence of the validity, effectiveness and continuing force of this
Assignment. To the extent all or any section of the Property is released from
the Lien Instrument, Leases pertaining to the Property or such section of the
Property shall be released from this Assignment and Lender shall, at no cost to
Borrower (other than recording charges), execute and deliver to Borrower a
written release in recordable form. Borrower hereby authorizes and directs all
tenants under the Leases, all guarantors of Leases, all insurers providing
rental loss or business interruption insurance with respect to the Property, all
governmental authorities and all other occupants of the Property, upon receipt
from Lender of written notice to the effect that Lender is then the holder of
the Note and that an Event of Default exists, to pay over to Lender all rents
and other amounts due and to become due under the Leases and under guaranties of
the Leases and all other issues and profits from the Property and to continue so
to do until otherwise notified in writing by Lender. This right may be exercised
without Lender taking actual or constructive possession of the Property or any
part thereof.
3.3 Security. Lender may take or release any security for the payment or
performance of the Obligations, may release any party primarily or secondarily
liable therefor and may apply any security held by it to the satisfaction of all
or any portion of the Obligations, without prejudice to any of its rights under
this Assignment, the other Loan Documents or otherwise available at law or in
equity.
6
<PAGE>
3.4 Covenants. Borrower covenants with Lender (a) to observe and to
perform all the material obligations imposed upon the lessor under all Leases
and not to do or permit to be done anything to impair the Leases without
Lender's prior written consent; (b) not to collect any of the rent or other
amounts due under any Lease or other issues or profits from the Property in any
manner more than thirty (30) days in advance of the time when the same shall
become due (save and except only for collecting one month's rent in advance plus
the security deposit, if any, at the time of execution of a Lease); (c) except
as provided in the Lien Instrument, not to execute any other assignment of
rents, issues or profits arising or accruing from the Leases or from the
Property; (d) not to enter into any Lease or a modification or amendment of any
Lease now or hereafter existing which provides for a rental rate which is less
than the fair market rate, without the prior written consent of Lender (which
consent shall not be unreasonably withheld, conditioned or delayed) as to the
terms and conditions of such Lease; (e) to execute and deliver, at the request
of Lender, all such further assurances and acknowledgments of the assignment
contained herein and the other provisions hereof, with respect to specific
Leases or otherwise, as Lender shall from time to time require, provided such
further assurances and assignments do not increase Borrower's obligations or
diminish its rights under the Loan Documents; (f) to obtain from any tenant at
the Property, from time to time as requested by Lender, estoppel certificates,
in form and substance reasonably satisfactory to Lender, confirming the terms of
such tenant's Lease and the absence of default thereunder; and (g) except as is
consistent with the usual and customary operation of the Property, Borrower
shall not, without the prior written consent of Lender, cancel, surrender or
terminate any Lease unless such Lease is in default, exercise any option which
might lead to such termination or consent to any change, modification, or
alteration thereof, or consent to the release of any party liable thereunder or
to the assignment of the lessee's interest therein, and any of said acts, if
done without the prior written consent of Lender, shall be null and void as
between Borrower and Lender. To the extent that the terms and provisions of this
Section 3.4 conflict with the Mortgage, the terms and provisions of the Mortgage
shall govern.
3.5 Authority to Assign. Borrower represents and warrants that (a)
Borrower has full right and authority to execute this Assignment and has no
knowledge of any existing material defaults under any of the existing Leases;
(b) all material conditions precedent to the effectiveness of said existing
Leases have been satisfied; (c) Borrower has not executed or granted any
modification of the existing Leases, either orally or in writing, except as
heretofore delivered to Lender; (d) the existing Leases are in full force and
effect according to the terms set forth in the Lease instruments, assignments,
modifications and amendments heretofore submitted to Lender; and (e) Borrower
has not executed any other instrument which might prevent Lender from operating
under any of the terms and conditions of this Assignment, including any other
assignment of the Leases or the rents, issues and profits from the Property.
3.6 Cross-Default. Violation or default beyond any applicable cure or
grace periods under any of the covenants, representations, warranties, and
provisions contained in this Assignment by the Borrower shall be deemed a
default hereunder as well as under the terms of the other Loan Documents, and
any default thereunder beyond any applicable cure or grace period shall likewise
be a default under this Assignment. Any third party out-of-pocket expenditures
made by
7
<PAGE>
Lender in curing any default by Borrower under any of the terms of any Lease on
Borrower's behalf, with interest thereon at the Default Rate (as defined in the
Note), shall become part of the Obligations.
3.7 No Mortgagee in Possession. The acceptance by Lender of this
Assignment, with all the rights, powers, privileges and authority created
hereby, shall not, prior to entry upon and taking possession of the Property by
Lender, be deemed or construed to constitute Lender a "mortgagee in possession,"
or hereafter or at any time or in any event obligate Lender to appear in or
defend any action or proceeding relating to any Lease, the Property, or the
Security, to take any action hereunder, to expend any money, incur any expense,
perform or discharge any obligation, duty or liability under any Lease, or to
assume any obligation or responsibility for any security deposits or other
deposits delivered to Borrower by any tenant and not actually delivered to
Lender. Lender shall not be liable in any way for any injury or damage to any
person or property sustained in or about the Property prior to taking possession
of the Property.
ARTICLE 4
GENERAL
4.1 Remedies. The rights and remedies provided Lender in this Assignment
and the other Loan Documents are cumulative. Nothing contained in this
Assignment, and no act done or omitted by Lender pursuant hereto including,
without limitation, the collection of any rents, shall be deemed to be a waiver
by Lender of any of its rights and remedies under the other Loan Documents or
applicable law or a waiver of any default under the other Loan Documents, and
this Assignment is made and accepted without prejudice to any of the rights and
remedies provided by Lender by the other Loan Documents. The right of Lender to
collect the principal balance and interest due on the Note and to enforce the
other Loan Documents may be exercised by Lender either prior to, simultaneously
with, or subsequent to any action taken by it hereunder.
4.2 Notices. Any notice, request, demand, statement or consent made
hereunder shall be in writing and shall be sent by hand or by reputable
overnight courier or by registered or certified mail, return receipt requested,
and shall be deemed given when delivered if by hand or by overnight courier or
when postmarked and addressed as follows:
To Lender: Cali Realty, L.P.
c/o Cali Realty Corporation
11 Commerce Drive
Cranford, New Jersey 07016
Attn: Roger W. Thomas, Esq.
Fax No. (908) 272-6755
8
<PAGE>
With a copy to: Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attn: Jonathan A. Bernstein, Esq.
Fax No. (212) 326-0806
If to Borrower: Robert Martin Company, LLC
100 Clearbrook Road
Elmsford, New York 10523
Attn: Brad Berger
Lloyd I. Roos, Esq.
Fax No. (914) 592-4836
With a copy to: Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Attn: Robert J. Wertheimer, Esq.
Fax No. (212) 856-7808
Each party may designate a change of address by notice to the other party, given
at least fifteen (15) days before such change of address is to become effective.
4.3 Captions. The titles and headings of the various Articles and Sections
hereof are intended solely for reference and are not intended to modify, explain
or affect the meaning of the provisions of this Assignment.
4.4 Severability. If any of the provisions of this Assignment or the
application thereof to any persons or circumstances shall to any extent be
invalid or unenforceable, the remainder of this Assignment, and the application
of such provision or provisions to persons or circumstances other than those as
to whom or which it is held invalid or unenforceable, shall not be affected
thereby, and every provision of this Assignment shall be valid and enforceable
to the fullest extent permitted by law.
4.5 Attorneys' Fees. In the event that Lender prevails in any controversy,
claim, dispute, or litigation between the parties hereto to enforce any
provision of this Assignment or any right of Lender hereunder, Borrower agrees
to pay to Lender all costs and expenses, including reasonable attorneys' fees
incurred therein by Lender, whether in preparation for or during any trial, as a
result of an appeal from a judgment entered in such litigation or otherwise.
4.6 Amendments. This Assignment may not be modified, amended or otherwise
changed in any manner unless done so by a writing executed by the parties
hereto.
9
<PAGE>
4.7 Benefits. This Assignment and all the covenants, terms and provisions
contained herein shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, executors, administrators, successors and
assigns.
4.8 Assignment. Borrower shall have no right to assign or transfer the
revocable license granted herein without the prior written consent of Lender.
4.9 Time of Essence. Time is of the essence as to this Assignment.
4.10 Governing Law. The laws of the State of New Jersey shall govern and
control the interpretation of this Assignment and the rights, obligations,
duties and liabilities of the parties hereto.
4.11 Borrower's Exculpation. Notwithstanding any other provision of this
Assignment, the Note, the Mortgage or any other Loan Document, the obligation of
Borrower to pay the indebtedness evidenced by the Note, and to perform and
observe and make good the other covenants, warranties, and agreements contained
in this Assignment, the Note, the Mortgage or in any Loan Document shall not be
enforced by any action or proceeding against Borrower or its members wherein or
whereby any deficiency or other money judgment shall be sought against Borrower
or its members (a "Deficiency Action"), and neither Borrower nor its members
shall be liable for such deficiency or money judgment and Lender specifically
waives any right to bring suit for a Deficiency Action; provided that Borrower
may be made a party defendant in a foreclosure action against the Property and
any judgment in such foreclosure action shall be enforceable against Borrower,
and provided further that nothing contained above shall be deemed (i) to limit
or restrict any right to seek injunctive relief against Borrower or affect the
lien of the Mortgage, (ii) to be a release or impairment of the other
obligations of Borrower under this Assignment, (iii) to limit Lender from
enforcing its rights under this Assignment, the Note, the Mortgage or any Loan
Document, (iv) to constitute a waiver, release or discharge of any indebtedness
or obligation under this Assignment or the Note or secured by the Mortgage or
(v) to affect the personal liability of Guarantors under the Guaranty.
Notwithstanding any limitation of liability set forth above, Borrower shall be
personally liable to Lender for actual out-of-pocket expenses at all times for
(i) the willful misapplication of (a) any insurance proceeds paid under any
insurance policies by reason of damage, loss, or destruction to the Property, to
the extent of such misapplication or (b) proceeds or awards resulting from
condemnation or other taking in lieu of condemnation of any portion of the
Property to the extent of such misapplication, (ii) any damages to Lender
resulting form any fraud or intentional misrepresentation made by Borrower and
(iii) any damage resulting from or on account of any action or lien pursuant to
any environmental requirement set forth in the Mortgage.
10
<PAGE>
IN WITNESS WHEREOF, this Assignment has been entered into as of the day
and year first above written.
ROBERT MARTIN COMPANY, LLC
By:_______________________________
Its:______________________________
11
<PAGE>
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the ____ day of January in the year 1997 before me personally came
________________________ to me known, who, being by my duly sworn, did depose
and say that he resides in ______________________________; that he is an
authorized member of ROBERT MARTIN COMPANY, LLC, a New York limited liability
company, and the company described in and which executed the foregoing
instrument and that he executed such instrument as the act and deed of, and on
behalf of, said company.
[S E A L] _______________________________________
Notary Public
My Commission Expires:_______________
12
<PAGE>
EXHIBIT A
(The Property)
<PAGE>
EXHIBIT 8.3
PUT-CALL AGREEMENT
THIS PUT-CALL AGREEMENT (the "Agreement") dated January __, 1997 by and
between ROBERT MARTIN COMPANY, LLC, a New York limited liability company with an
address at 100 Clearbrook Road, Elmsford, New York 10523 ("Optionor") and CALI
REALTY, L.P., a Delaware limited partnership, with offices c/o Cali Realty
Corporation, 11 Commerce Drive, Cranford, New Jersey 07016 ("Optionee").
STATEMENT OF FACTS
Optionor, Robert Martin-Eastview North Company LP ("RMENC"), Cali Realty
Corporation ("Cali") and Optionee have entered into a certain agreement
dated January 24, 1997 (the "Contribution and Exchange Agreement") with
respect to the contribution by Optionor and RMENC of various properties
throughout southern New York and Connecticut, all as more particularly set
forth in the Contribution and Exchange Agreement. Optionor is also the
owner in fee simple of, among other things, two properties commonly known
as 7 Skyline Drive, Mount Pleasant, New York ("Skyline") and 200 Corporate
Boulevard South, Yonkers, New York ("200"; together with Skyline, the
"Option Properties" and individually, an "Option Property"), which Option
Properties are more particularly set forth on Exhibits "A" and "B",
respectively. On or about the date hereof, an affiliate of Optionee has
made a first mortgage loan (the "Loan") to Optionor in the amount of
Eleven Million Six Hundred Thousand ($11,600,000) Dollars secured in part
by a mortgage on the Option Properties (the "Mortgage").
NOW, THEREFORE, in consideration of the payment of ten ($10.00) dollars
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. (a) For the period (the "Put Term") commencing on the date hereof and
terminating on January 31, 2000 and upon satisfaction of the terms and
conditions set forth herein, Optionor shall have the right to cause Optionee to
acquire either or both of the Option Properties by giving written notice thereof
to Optionee (a "Put Notice"). In the event that the first Put Notice shall be
with respect to only one of the Option Properties, then so long as the Put Term
shall not have expired, Optionor shall thereafter have the right to give
Optionee a further Put Notice with respect to the other Option Property. The Put
Term is subject to extension in accordance with Section 11 of this Agreement. In
addition, the expiration of the Put Term will not effect the parties obligations
to close pursuant to a Put Notice.
(b) The Put Notice shall set forth (i) whether Optionor is electing
to contribute both, or one, of the Option Properties, and if only one, then
which of Skyline or 200 (the parcel(s) which are the subject of the Put Notice
are hereinafter referred to singularly or
13
<PAGE>
collectively as the "Put Parcel") and (ii) the price (the "Put/Call Price") of
the Put Parcel, which is to be calculated as provided in Section 3 below.
Optionor shall not have the right to give a Put Notice for Skyline if the
Put/Call Price for Skyline is less than Seven Million Two Hundred Fifty Thousand
($7,250,000) Dollars and for 200 if the Put/Call Price for 200 is less than Four
Million Three Hundred Fifty Thousand ($4,350,000) Dollars. In addition, in the
event that Optionor gives a Put Notice for Skyline, the Put/Call Price thereof
shall not exceed Thirteen Million Three Hundred Thousand ($13,300,000) Dollars
regardless of the amount calculated as provided in Section 3, and in the event
that Optionor gives a Put Notice for 200, the Put/Call Price thereof shall not
exceed Eight Million ($8,000,000) Dollars regardless of the amount calculated as
provided in Section 3.
(c) Within ten (10) days after receipt of the Put Notice, Optionee
shall give notice to Optionor (the "Allocation Notice") advising Optionor as to
the method of payment of the Put/Call Price, which may be in the form of cash or
a combination of cash and operating partnership interests in Optionee ("Units").
If Optionee shall elect to pay a portion of the Put/Call Price in Units, then
the number of Units is to be calculated as provided in Section 4 below. Optionee
agrees that the Allocation Notice shall set forth a minimum cash payment in the
amount necessary to satisfy all then current amounts due under the Loan if the
Put Notice is for both of the Option Properties; if the Put Notice is for only
one of the Option Properties, then the minimum cash payment set forth in the
Allocation Notice shall be the amount necessary to satisfy all then current
amounts due under that portion of the Loan allocated to the Option Property
which is the subject of the Put Notice. The allocation of the Loan, which
allocation is made for purposes of this Agreement and this Agreement only, is
Seven Million Two Hundred and Fifty ($7,250,000) Dollars for Skyline and Four
Million Three Hundred and Fifty ($4,350,000) Dollars for 200. Notwithstanding
the foregoing, Optionee shall have no obligation to include in the minimum cash
payment amounts which are then past due under the Loan, charges arising as a
result of said past due payments, such as late charges and default interest, and
protective advances.
(d) The closing with respect to a Put Notice shall occur no later
than (30) days following the giving of a Put Notice in accordance with the terms
of this Agreement, subject to extension as provided in Section 11 of this
Agreement.
2. For the period commencing on the date that at least 99,000 rentable
square feet shall have been leased at Skyline to bona fide third parties and
terminating on January 31, 2000 (the "Call Expiration Date"), Optionee shall
have the right to cause Optionor to convey title to Skyline to Optionee by
giving written notice thereof to Optionor (the "Skyline Call Notice"). In
addition, for the period commencing on the date that at least 72,000 rentable
square feet shall have been leased at 200 to bona fide third parties and
terminating on the Call Expiration Date, Optionee shall have the right to cause
Optionor to convey title to 200 to Optionee by giving written notice thereof to
Optionor (the "200 Call Notice"; together with the Skyline Call Notice,
collectively, a "Call Notice"). Any Call Notice shall (a) specify whether it is
a Skyline Call Notice or a 200 Call Notice, (b) set forth the Put/Call Price for
the Option Property which is the subject of the Call Notice and (c) specify
whether the Put/Call Price is to be paid in cash or a combination of cash and
2
<PAGE>
Units. If the Put/Call Price is to be paid in a combination of cash and Units,
then the requirements of Section 1(c) above as to minimum cash payments shall
apply. In the event that Optionee gives a Call Notice for Skyline, the Put/Call
Price thereof shall not be less than Eleven Million Five Hundred Thousand
($11,500,000) Dollars, and in the event that Optionee gives a Call Notice for
200, the Put/Call Price thereof shall not be less than Seven Million Five
Hundred Thousand ($7,500,000) Dollars. Any closing with respect to a Call Notice
shall occur no later than thirty (30) days following the giving of a Call Notice
in accordance with the terms of this Agreement, subject to extension as provided
in Section 11 of this Agreement. Optionor agrees to give Optionee notice of the
achievement of the occupancy levels necessary to trigger Optionee's rights as
set forth in this Section 2 promptly upon the occurrence of same and upon
request by Optionee, to make available to Optionee all information reasonably
required by Optionee to calculate the Put/Call Price.
3. (a) The Put/Call Price shall be equal to the lower of (i) stabilized
net operating income for the Option Property, or Properties, as the case may be,
which is the subject of the Put Notice or the Call Notice, as the case may be (a
"Notice"), for the twenty-four (24) months following the date of the Notice
capitalized at a rate equal to ten and one-half (10.5%) percent or (ii)
stabilized cash flow for the Option Property, or Properties, as the case may be,
which is the subject of the Notice, for the twenty-four (24) months following
the date of the Notice capitalized at a rate equal to nine and one-quarter
(9.25%) percent. If the party receiving the Notice (the "Recipient") shall
dispute the Put/Call Price set forth by the party issuing the Notice (the
"Issuer"), then the Recipient shall have the right to initiate an arbitration as
to the Put/Call Price in accordance with Section 3(b) below. The time periods
for closing under a Notice shall toll during any such arbitration, and the
closing thereunder shall occur as soon as practicable following the completion
of said arbitration. For purposes of this Agreement, "stabilized net operating
income" shall be calculated in accordance with generally accepted accounting
principles consistently applied ("GAAP"), excluding adjustments for
straight-line rent and excluding amortization, depreciation and interest expense
and interest income and "stabilized cash flow" shall be calculated in the same
manner as stabilized net operating income less expenses capitalizable in
accordance with GAAP, such as tenant improvements, leasing commissions and
capital expenditures.
(b) In the event that the Recipient initiates an arbitration
pursuant to Section 3(a), the parties hereby agree to rely upon Deloitte &
Touche (the "Accountant") to render a binding decision as to the Put-Call Price.
Each party shall submit their calculation of the Put-Call Price and the basis of
said calculation within ten (10) business days after receipt of the Notice by
the Recipient. Within fifteen (15) business days of said submissions, the
Accountant shall render his decision. All fees and expenses of the Accountant
shall be divided equally between Optionor and Optionee. In the event of the
death or unavailability of the Accountant, the parties shall attempt to agree
upon an accountant whose decision as to the Put-Call Price shall be binding. If
the parties are unable to agree upon a mutually acceptable accountant within
seven (7) business days, each shall appoint their own accountant within three
(3) business days, and the two accountants shall appoint a third accountant. If
the two accountants are unable to agree on a third accountant within seven (7)
business days, the third accountant shall be appointed pursuant to an action
brought for such purpose before the New York State Supreme Court situated in
Manhattan, upon application of either party. Each party shall submit their
calculation of the Put-
3
<PAGE>
Call Price and the basis for said calculation within fifteen (15) business days
after the appointment of the necessary accountant(s). Within fifteen (15)
business days of said submissions, the accountants shall render their decision.
A decision as to the Put-Call Price by a majority of the accountants shall be
binding upon both parties; provided, however, if a majority of the accountants
are unable to agree on the Put-Call Price, then the average of the calculations
of the two closest accountants shall be binding on both parties. The fees and
expenses of the third accountant shall be divided equally between Optionor and
Optionee. All other expenses shall be borne by the party incurring them. All
accountants appointed pursuant to this Section 3(b) shall be certified public
accountants experienced in real estate with at least fifteen (15) years
experience.
4. In the event that Optionee elects to issue Units as a portion of its
payment of the Put/Call Price, the number of Units shall be calculated as
provided in this Section 4. Each Unit shall have a value equal to the Current
Market Value Per Unit, computed as of the Trading Day immediately preceding the
Allocation Date. "Current Market Value Per Unit" on any date shall mean the
average of the Closing Price for a share of Common Stock of Cali Realty
Corporation ("Cali"), for fifteen (15) consecutive Trading Days ending on such
date. "Closing Price" shall mean, on any date, with respect to a share of Common
Stock of Cali, the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way,
for one share of Common Stock of Cali in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange, provided, however,
that there shall be no special odd lot premium by virtue of calculating one
share. "Trading Day" shall mean a day on which the principal national securities
exchange on which the Common Stock of Cali is listed or admitted to trading is
open for the transaction of business or, if the Common Stock of Cali is not
listed or admitted to trading on any national securities exchange, any day other
than a Saturday, Sunday or a day on which banking institutions in the State of
New York are authorized or obligated by law or executive order to close.
5. The following terms and conditions shall apply to the conveyance of an
Option Property pursuant to a Notice:
(a) The conveyance of the Option Property shall be deemed to be a
conveyance of all of the other assets of Optionor related to said Option
Property as set forth in Section 1 of the Contribution and Exchange Agreement.
(b) Optionee shall have the right to designate the entity (the
"Designee") to which Optionor shall convey the Option Property, by notice given
to Optionor at least five (5) days prior to the closing thereunder.
Notwithstanding such designation, Optionee shall continue to be responsible for
Optionee's and such Designee's obligations under this Agreement. On each closing
date, Optionor shall convey the Option Property by bargain and sale deed with
covenants against grantor's acts free and clear of all liens and encumbrances
the except for the permitted encumbrances set forth on Exhibit "C" with respect
to Skyline and Exhibit "D" with respect to 200. Optionor shall also deliver all
other documents referred to in Section 10.2 of the
4
<PAGE>
Contribution and Exchange Agreement which are applicable to the Option Property
so conveyed. The Designee shall be the transferee for all of the closing
documents.
(c) On each closing date, Optionee shall deliver to Optionor the
Put/Call Price, and all other documents referred to in Section 10.3 of the
Contribution and Exchange Agreement which are applicable to the Option
Properties.
(d) Optionor shall pay all real estate transfer taxes and
documentary stamps in connection with the conveyance of the Option Property. All
other provisions of the Contribution and Exchange Agreement relating to each
party's obligation as to the payment of taxes are incorporated herein.
(e) Title to the Option Property shall be conveyed in accordance
with the terms and provisions of Section 4 of the Contribution and Exchange
Agreement.
(f) Adjustments on account of any conveyance of an Option Property
shall be made in accordance with the provisions of Section 11 of the
Contribution and Exchange Agreement as of the closing date pursuant to a Notice
hereunder.
(g) The restrictions on transferability of the Units set forth in
Section 18 of the Contribution and Exchange Agreement shall apply to any Units
issued pursuant to this Agreement. The Units shall also be subject to all of the
relevant provisions of the Agreement of Limited Partnership of Optionee dated as
of August 31, 1994, as amended as of January 16, 1997 (the "Partnership
Agreement"). The Units shall not be redeemable pursuant to the Partnership
Agreement for a period of one (1) year from the date of their issuance.
(h) It shall be a condition of Optionee's obligation to perform
hereunder following a Put Notice, which condition may be waived by Optionee in
its sole discretion, that (i) all of the representations and warranties of
Optionor set forth in the Contribution and Exchange Agreement which are
applicable to an Option Property, be true and correct in all material respects
as of the closing date of a conveyance of an Option Property and survive said
closing date for the same period for which such representations and warranties
survive under the Contribution and Exchange Agreement and (ii) between the date
hereof and said closing date, Optionor shall have operated and maintained the
Option Property in the manner required hereunder and in the manner required
under Article 7 of the Contribution and Exchange Agreement for the operation and
maintenance of the property being conveyed thereunder for the period between the
date of the Contribution and Exchange Agreement and the closing thereunder.
(i) It shall be a condition of Optionor's obligation to perform
hereunder following a Call Notice, which condition may be waived by Optionor in
its sole discretion, that all of the representations and warranties of Optionee
set forth in the Contribution and Exchange Agreement which are applicable to the
Option Property, be true and correct in all material respects as of the closing
date of a conveyance of an Option Property and survive said closing
5
<PAGE>
date for the same period for which such representations and warranties survive
under the Contribution and Exchange Agreement.
6. If Optionee or its affiliate are not managing the Option Properties,
then Optionor shall respond to inquiries of Optionee as to the status of the
Option Properties, including leasing activities, and shall forward to Optionee
such documents as Optionee shall reasonably request, including current tax
rolls, tax and operating expense histories and statements of income and expense
and financial statements.
7. RM's right to execute leases is as set forth in the Mortgage.
8. (a) From and after the date hereof until May 31, 1997 (the
"Environmental Period") Optionee shall have the right to obtain Phase I Reports
(as defined in the Contribution and Exchange Agreement) on the Option
Properties. During the Environmental Period, Optionee may reject either or both
of the Option Properties in the event that the environmental condition of said
Option Property reveals a Discharge of Contaminants (as defined in the
Contribution and Exchange Agreement), in Optionee's sole discretion. In the
event that either or both of the Option Properties are rejected by Optionee,
then Optionee's right to deliver a Call Notice with respect to said rejected
Option Property or Properties and Optionor's right to deliver a Call Notice with
respect to said rejected Option Property or Properties shall be terminated.
(b) In the event of any Discharge of Contaminants at, on or under
either or both of the Option Properties or otherwise affecting either or both of
the Option Properties, from and after the date of the Phase I Reports on each
respective Option Property (but not following the transfer of title to said
Option Property or Properties, as the case may be, pursuant to this Agreement or
the Mortgage), regardless of when discovered, Optionor shall, at its own cost
and expense, and in accordance with all currently existing or hereafter enacted
or promulgated Environmental Laws (as defined in the Contribution and Exchange
Agreement), undertake all action required pursuant to such Environmental Laws
and shall clean up the Discharge and remove all Contaminants from the said
property. In addition, in the event of such a Discharge, Optionor shall
immediately notify Optionee and Cali of such fact, shall provide Optionee and
Cali with a copy of all documentation received by Optionor or its
representatives from any Governmental Authority (as defined in the Contribution
and Exchange Agreement) or submitted by Optionor or its representatives to any
Governmental Authority with respect to such Discharge and shall advise Optionee
and Cali in advance of all meetings scheduled between Optionor or any of its
representatives and any Governmental Authority and Optionee and Cali, or their
representatives, or all of them, shall have the right, without the obligation,
to attend and participate in all such meetings. Notwithstanding the foregoing,
in the event that clean up of any Discharge and removal of all Contaminants can
not be completed within sixty (60) days from the date of its discovery, Optionee
shall not be obligated to acquire said Option Property or Properties, as the
case may be, pursuant to a Put Notice.
(c) Optionor shall indemnify, defend and hold harmless, Optionee,
Cali and each of their respective partners, shareholders, officers, directors,
employees, agents, affiliates, and representatives from and against any and all
claims, liabilities, losses, damages, penalties and
6
<PAGE>
costs, foreseen or unforeseen, including without limitation, counsel,
engineering and other professional or expert fees, which an indemnified party
may incur, resulting directly or indirectly, wholly or partly from (i)
Optionor's actions or omissions with regard to Optionor's obligations under this
Section 8, (ii) any Discharge of Contaminants at, on, or under the Option
Properties or otherwise affecting the Option Properties, from and after the date
of the Phase I Reports for each of the respective Option Properties, regardless
of when discovered, or (iii) both of them.
9. Simultaneous with the execution of this Agreement, the parties shall
execute a memorandum, in recordable form, evidencing the respective rights and
obligations of the parties hereto and either party shall have the right to cause
said memorandum to be recorded in the Clerk's Office for Westchester County. The
parties further agree to execute any additional documentation in order to cause
said memorandum to be recorded. The provisions of this Section 9 shall survive
the closing hereunder.
10. (a) The rights granted to Optionee hereunder are separate and distinct
from the rights and remedies granted to Optionee in any of the documents
evidencing or securing the Loan (the "Loan Documents"). In the event that
Optionee exercises any of the rights and remedies granted to it under the Loan
Documents, Optionor shall not raise as a defense thereto, and hereby waives any
claim, that the rights granted to Optionee hereunder are the sole rights of
Optionee.
(b) Not more than one hundred twenty (120) days nor less than ninety
(90) days prior to the maturity of the Loan, Optionor may request from Optionee
in writing (the "Exercise Request") that Optionee notify Optionor of its
intention to call either or both of the Option Properties or its intention to
extend the term of the Loan. The Exercise Request shall set forth the stabilized
net operating income and the stabilized cash flow for each of the Option
Properties as of the date of such notice. In the event that Optionee elects to
call either or both of the Option Properties, the Optionee agrees to perform in
accordance with this Agreement, provided that the occupancy conditions of
Section 2 hereof are satisfied. In the event that Optionee elects not to call
either or both of the Option Properties or elects not to extend the term of the
Loan, Optionee may nevertheless elect to call either or both of the Option
Properties or to extend the term of the Loan prior to the Call Expiration Date,
provided that Optionee shall reimburse to Optionor the amount of any reasonable
out-of-pocket expenses actually incurred by Optionor, if any, in connection with
refinancing the Loan (the "Refinance Expenses"). Notwithstanding the provisions
of the preceding sentence, in the event that either the stabilized net operating
income or the stabilized cash flow of the Option Property or Properties, as the
case may be, shall have increased from the amount of same set forth in the
Exercise Request, then, in the event Optionee later elects to call said Option
Property, or Properties, as the case may be, Optionee shall not be required to
reimburse Optionor for its Refinance Expenses; provided, however, that if the
occupancy conditions of Section 2 were not satisfied at the time of the Exercise
Notice but become satisfied prior to the Call Expiration Date, Optionee shall
extend the term of the Loan for thirty (30) days.
7
<PAGE>
(c) In the event that (i) the occupancy conditions of Section 2
hereof have not been satisfied and (ii) Optionee is prepared to extend the term
of the Loan on a minimum of three month extensions and Optionor nevertheless
elects to refinance the Loan, Optionee shall have the right to call either or
both of the Option Properties regardless of whether less than 99,000 rentable
square feet shall have been leased at Skyline to bona fide third parties or less
than 72,000 rentable square feet shall have been leased at 200 to bona fide
third parties. If Optionee elects to call either or both of the Option
Properties pursuant to the terms of this Section 10(c), the Put/Call Price shall
be calculated based on actual occupancy levels without regard to the amount
calculated as provided in Section 3 or the minimum Put/Call Price set forth in
Section 2.
11. In the event of a casualty to an Option Property, or Properties, as
the case may be, which is the subject of a Notice, the closing date shall be
extended until such time as the Option Property, or Properties, as the case may
be, shall have been restored as required by the terms of the Mortgage.
12. Optionor shall not convey, encumber, transfer or assign the Option
Properties, or any part thereof or interest therein, during the term of this
Agreement, other than to a successor or affiliated entity, and in such event so
long as such successor or affiliated entity confirms in writing to Optionee the
acceptance of the terms of this Agreement and assumes the obligations of
Optionor hereunder. No such assignment shall relieve Optionor of its primary
obligations hereunder. Except in connection with a sale of all of the assets of
Optionee, Optionee shall not assign its rights under this Agreement without the
prior consent of Optionor.
13. In the event that Optionee issues Units to Optionor pursuant to this
Agreement, Cali shall enter into a registration rights agreement substantially
in the form of Exhibit 10.3(j) to the Contribution and Exchange Agreement with
respect to the issuance and resale of shares of its common stock issuable upon
redemption of such Units.
14. This Agreement shall be binding on, and shall inure to the benefit of,
the heirs, legal representatives, successors and permitted assigns of the
parties hereto.
15. 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
any nationally recognized overnight delivery service, properly addressed, and
sent to the following addresses:
8
<PAGE>
Optionor:
Robert Martin Company, LLC
100 Clearbrook Road
Elmsford, New York 10523
Attention: Martin Berger
Lloyd I. Roos, Esq.
Telephone: (914) 592-4800
Fax No.: (914) 592-4836
with a copy to:
Battle Fowler LLP
75 East 55nd Street
New York, New York 10022
Attention: Robert J. Wertheimer, Esq.
Telephone: (212) 856-6910
Fax No.: (212) 856-7808
If to Optionee:
Cali Realty, L.P.
c/o Cali Realty Corporation
11 Commerce Drive
Cranford, New Jersey 07106
Attention: Roger W. Thomas, Esq.
Telephone: (908) 272-8000
Fax No.: (908) 272-6755
with a copy to Optionee's counsel:
Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attention: Jonathan A. Bernstein, Esq.
Telephone: (212) 326-0425
Fax No.: (212) 326-0806
16. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
17. This Agreement may not be changed, amended, modified, waived,
discharged or terminated, except by an instrument in writing signed by the party
against whom enforcement of such change, amendment, modification, waiver,
discharge or termination is sought.
9
<PAGE>
18. This Agreement constitutes the entire agreement and understanding
between the parties hereto respecting the subject matter hereof and there are no
other agreements, understandings, undertakings, representations or warranties
among the parties hereto with respect to the subject matter hereof except as set
forth herein.
19. If any term of this Agreement or the application thereof to any
persons or circumstances shall, to any extent, be invalid or unenforceable, the
remainder of this Agreement, or the application of such term to persons or
circumstances other than those as to which it is invalid or unenforceable, shall
not be affected thereby, and each term of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
20. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original Agreement, but all of which shall
constitute but one and the same Agreement.
21. In the event that Optionor and Optionee enter into litigation or
alternative dispute resolution in connection with this Agreement or the
transaction contemplated herein, the non-prevailing party in such litigation or
alternative dispute resolution shall be responsible for payment of all expenses
and reasonable attorneys' fees incurred by the prevailing party. The provisions
of this Section 21 shall survive the closing or other termination of this
Agreement.
22. Optionor and Optionee represent that they have not dealt with any
brokers, finders or salesmen, in connection with this transaction, except that
certain fees may be payable by Optionee to Prudential Securities Incorporated,
as financial advisors, and certain fees may be payable by Optionor to Lazard
Freres & Company, LLC, as financial advisors. Optionor and Optionee agree to
indemnify, defend and hold each other harmless from and against any and all
loss, cost, damage, liability or expense, including reasonable attorneys' fees,
which they may sustain, incur or be exposed to by reason of any claim for fees
or commissions. The provisions of this Section shall survive the closing or
other termination of this Agreement.
10
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto on the day and year first above written.
OPTIONOR
ROBERT MARTIN COMPANY, LLC
By:_____________________________
Name:
Title:
OPTIONEE
CALI REALTY, L.P.
By:___________________________
Name:
Title:
11
<PAGE>
EXHIBIT 10.3(j)
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
January 31, 1997, is by and among CALI REALTY CORPORATION, a Maryland
corporation (the "Company"), and the persons and entities listed on Schedule I
attached hereto and made a part hereof (such individuals and entities,
collectively the "Investors" and each individually an "Investor").
W I T N E S S E T H:
WHEREAS, pursuant to a Contribution and Exchange Agreement dated
January 24, 1997 by and between the Company, Cali Realty, L.P., a Delaware
limited partnership (the "Operating Partnership"), Robert Martin Company, LLC
("RMC LLC"), a limited liability company organized under the laws of the State
of New York, and Robert Martin-Eastview North Company, L.P., a New York limited
partnership ("RMENC"; together with RMC LLC, collectively "RM"), RM, the Company
and the Operating Partnership have agreed to combine their respective properties
and related assets and, in consideration therefor, the Operating Partnership
will issue to certain of the Investors units of limited partner interests (the
"RM Units") in the Operating Partnership;
WHEREAS, the RM Units will be redeemable for unregistered shares of
common stock, par value $.01 per share, of the Company (the "Common Stock"); and
WHEREAS, pursuant to the Warrant Agreements dated January 31, 1997
by and between the Company and certain of the Investors (the "Warrant
Agreements"), the Company will issue warrants (the "Warrants") exercisable for
unregistered shares of Common Stock; and
WHEREAS, the Company has agreed to provide the Investors with
certain registration rights as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations hereinafter set forth, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as follows:
1. Definitions. For purposes of this Agreement, capitalized terms used
herein shall have the meanings set forth in the preambles hereto and in this
Section 1.
1.1 "Cali Group" shall mean those individuals and entities, other
than the Company, that received Units at the time of the initial public offering
of the Company.
1
<PAGE>
1.2 "Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
1.3 "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
1.4 "Holder" shall mean any registered holder, from time to time, of
Registrable Securities.
1.5 "Initiating Holders" shall mean any Holder or Holders who, in
the aggregate, are Holders of Registrable Securities representing at least fifty
percent (50%) of the Registrable Securities then outstanding, and who initiate a
request pursuant to Section 3.1 below for the registration of all or part of
such Holder or Holders' Registrable Securities.
1.6 "Person" shall mean any individual, firm, corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, government (or an agency or political subdivision thereof)
or other entity of any kind.
1.7 "Register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement with the
Commission in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of the effectiveness of
such registration statement by the Commission.
1.8 "Registrable Securities" shall mean any of the following which
are held by any Investor and its permitted transferees under the Warrant
Agreements, in the case of the Warrants, or under the partnership agreement
governing the Operating Partnership, in the case of the RM Units ("Permitted
Transferees"): (a) shares of Common Stock issuable upon the redemption of the RM
Units or the exercise of the Warrants, which RM Units or Warrants are held by
any Investor on the date hereof and any such RM Units or Warrants subsequently
transferred to an Investor's Permitted Transferees, (b) shares of Common Stock
issued pursuant to a dividend reinvestment plan adopted by the Company, (c)
shares of Common Stock then outstanding which were issued as, or upon the
conversion or exercise of other securities issued as, a dividend or other
distribution with respect to or in replacement of other Registrable Securities,
(d) shares of Common Stock then issuable upon the conversion or exercise of
other securities which were issued as a dividend or other distribution with
respect to or in replacement of other Registrable Securities, and (e) any equity
securities of the Company issued or issuable with respect to the securities
referred to in clauses (a) through (d) by way of a stock dividend or stock split
or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization; provided, however, that any such
Registrable Securities shall cease to be Registrable Securities when (i) a
registration statement with respect to the sale of such securities shall have
become effective under the Securities Act and such securities shall have been
disposed of in accordance with such registration statement, (ii) they shall have
been sold as permitted by Rule 144 (or any successor provision) under the
Securities Act, (iii) they shall be eligible for sale pursuant to Rule 144(k)
(or any successor provision) under the Securities Act as confirmed in a written
opinion of counsel to the Company addressed to the Investor and its Permitted
2
<PAGE>
Transferees, (iv) they shall have been otherwise transferred, new certificates
for them not bearing a legend restricting further transfer shall have been
delivered by the Company and subsequent public distribution of them shall not
require registration of them under the Securities Act, or (v) they shall have
ceased to be outstanding. For purposes of this Agreement, a Person will be
deemed to be a holder of Registrable Securities whenever such Person has the
unqualified right to acquire such Registrable Securities (by conversion,
redemption or otherwise, but disregarding any legal restrictions upon the
exercise of such right), whether or not such acquisition has actually been
effected.
1.9 "Registration Expenses" shall mean all expenses incurred by the
Company in compliance with this Agreement, excluding Selling Expenses but
including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel for the Company, and the fees and
expenses of one counsel for all Holders, all blue sky fees and expenses, and the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company, which shall
be paid in any event by the Company).
1.10 "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute enacted hereafter, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect
from time to time.
1.11 "Selling Expenses" shall mean all underwriting discounts and
commissions applicable to the sale of Registrable Securities.
1.12 "1994 Registration Rights Agreement" shall mean that certain
Registration Rights Agreement dated as of August 31, 1994 by any among the
Company and the Cali Group.
2. Company Registration.
2.1 If the Company shall determine to register any of its shares of
Common Stock or other securities ("Other Securities") issued by it having terms
substantially similar to the Common Stock, either for its own account or the
account of a security holder or holders exercising any demand registration
rights, other than a registration relating solely to employee benefit plans or a
registration relating solely to a Rule 145 (under the Securities Act)
transaction, the Company will:
(a) promptly give to each Holder written notice thereof (which shall
include a list of the jurisdictions in which the Company intends to
attempt to qualify such securities under the applicable blue sky or other
state securities laws); and
(b) include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests made by any Holder within fifteen (15) days after receipt of the
written notice from the Company described in clause (a)
3
<PAGE>
above, except as set forth in Section 2.3 below. Such written request may
specify all or a part of a Holder's Registrable Securities.
2.2 Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 2.1(a). The right of any Holder to require registration
pursuant to this Section 2 shall be conditioned upon such Holder's participation
in such underwriting and the inclusion of such Holder's Registrable Securities
in the underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company and any officers, directors or Other Shareholders (as defined below)
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters selected by the Company. "Other Shareholders" shall
mean Persons who, by virtue of their agreements with the Company, are entitled
to include their securities in such registration.
2.3 Limitations on Shares to be Included. With respect to Company
registrations, notwithstanding any other provision of this Section 2, if the
representative of the underwriters advises the Company in writing that marketing
factors require a limitation or elimination on the number of shares to be
underwritten, the representative may (subject to the allocation priority set
forth below) limit the number of Registrable Securities to be included in the
registration and underwriting. The Company shall so advise all Holders of
securities requesting registration, and the number of shares of securities that
are entitled to be included in the registration and underwriting shall be
allocated first, to the Company for securities being sold for its own account or
to the security holder or holders exercising any demand registration rights on
such security holder or holders' account, second, among all Persons requesting
registration pursuant to the terms of the 1994 Registration Rights Agreement,
and third, among all such Holders requesting registration and all officers,
directors or Other Shareholders (except as provided in clause second above)
requesting registration pursuant to the exercise of piggyback registration
rights, in each case in proportion, as nearly as practicable, to the respective
amounts of Registrable Securities or other securities of the Company (the
"Additional Shares") which are held by such Holders, officers or directors of
the Company or Other Shareholders which they had requested to be included in
such registration at the time of filing the registration statement. If any
Holder of Registrable Securities or any officer, director or Other Shareholder
disapproves of the terms of any such underwriting, he may elect to withdraw
therefrom by written notice to the Company and the underwriter. The limitations
contained in this Section 2.3 shall not apply in any respect to Section 2.6
below.
2.4 Withdrawal from Registration. Any Holder requesting inclusion of
Registrable Securities pursuant to this Section 2 may, at any time prior to the
effective date of the registration statement relating to such registration,
revoke such request by delivering written notice of such revocation to the
Company; provided, however, that if the Company, in consultation with its
financial and legal advisors, determines that such revocation would materially
delay the registration or otherwise require a recirculation of the prospectus
contained in the registration statement, then such Holder shall have no such
right to revoke its request. If the withdrawal of any Registrable Securities or
Additional Shares would allow, within the
4
<PAGE>
marketing limitations set forth above, the inclusion in the underwriting of a
greater number of shares of Registrable Securities or Additional Shares, then,
to the extent practicable and without delaying the underwriting, the Company
shall offer to the Holders and to the Other Shareholders an opportunity to
include additional shares of Registrable Securities or Additional Shares, as the
case may be, in the proportions and in the priorities discussed in Section 2.3
above.
2.5 Termination or Withdrawal by Company. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 2 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration.
2.6 Certain Shelf Registrations. The foregoing notwithstanding, on
January 31, 1998 (the "Anniversary Date"), or as soon thereafter as is
reasonably practicable, the Company shall, at its expense, register the
Registrable Securities through a shelf registration statement pursuant to Rule
415 under the Securities Act, which shelf registration statement shall cover
only the Registrable Securities. The Company shall, at its expense, use its best
efforts to maintain the effectiveness of such registration statement until the
earlier of (i) such time as when all of the Registrable Securities have been
disposed of or (ii) three (3) years after the redemption or exercise, as the
case may be, of all of the RM Units and the Warrants into Common Stock.
Notwithstanding anything in this Section 2.6 to the contrary, if at the
Anniversary Date the Company determines, in the good faith judgment of the Board
of Directors of the Company, with the advice of counsel, that the filing of such
shelf registration statement would require the disclosure of non-public material
information the disclosure of which would have a material adverse effect on the
Company or would otherwise adversely affect a material financing, acquisition,
disposition, merger or other significant transaction, the Company shall deliver
a certificate to such effect signed by its President or any Vice President to
the Holders and the Company shall not be required to effect a registration
pursuant to this Section 2.6 until the earlier of (A) the date upon which such
material information is disclosed to the public or ceases to be material or (B)
90 days after the Company makes such good faith determination.
3. Requested Registration.
3.1 Request for Registration. At any time on or after January 31,
1998, if any Registrable Securities are outstanding and the Holders (and any
prior holder) have not yet had the opportunity to register such shares pursuant
to Section 2 above, including without limitation pursuant to Section 2.6 above,
upon written notice from Initiating Holders requesting that the Company effect
any registration with respect to all or part of the Registrable Securities held
by such Initiating Holders, the Company shall (a) promptly give written notice
of the proposed registration to all other Holders (the "Demand Registration
Notice") and (b) as soon as practicable but not later than sixty (60) days after
receipt of the request from the Initiating Holders, use its best efforts and
take all appropriate action to effect such registration (including, without
limitation, the execution of an undertaking to file post-effective amendments,
appropriate qualification under the blue sky or other state securities laws
requested by Initiating Holders and appropriate compliance with applicable
regulations issued under the Securities Act) as may be so requested and as would
permit or facilitate the sale and distribution of all or such
5
<PAGE>
portion of such Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any Holder or
Holders joining in such request as are specified in a written request given
within thirty (30) days after receipt of the Demand Registration Notice;
provided, however, that:
(i) in no event shall the Company be required to effect, or to take
any action to effect, more than one registration pursuant to this Section
3;
(ii) if, upon receipt of a registration request pursuant to this
Section 3, the Company is advised in writing by a nationally recognized
independent investment banking firm selected by the Company to act as lead
underwriter in connection with a public offering of securities by the
Company (a "Company Offering") that, in such firm's opinion, a
registration at the time and on the terms requested would materially
adversely affect such Company Offering that had been contemplated by the
Company prior to the notice by the Initiating Holders, the Company shall
not be required to effect a registration pursuant to this Section 3 until
the earliest of (A) three months after the completion of such Company
Offering, (B) the termination of any "black out" period, if any, required
by the underwriters to be applicable to any Holder who has requested to
have any Registrable Securities registered in connection with such
registration, (C) promptly after abandonment of such Company Offering or
(D) four months after the date of written notice from the Initiating
Holders demanding registration pursuant to this Section 3; and
(iii) if, while a registration request is pending pursuant to this
Section 3, the Company determines, in the good faith judgment of the Board
of Directors of the Company, with the advice of counsel, that the filing
of a registration statement would require the disclosure of non-public
material information the disclosure of which would have a material adverse
effect on the Company or would otherwise adversely affect a material
financing, acquisition, disposition, merger or other significant
transaction, the Company shall deliver a certificate to such effect signed
by its President or any Vice President to the proposed selling Holders and
the Company shall not be required to effect a registration pursuant to
this Section 3 until the earlier of (A) the date upon which such material
information is disclosed to the public or ceases to be material or (B) 90
days after the Company makes such good faith determination.
3.2 Additional Shares to be Included. The registration statement
filed pursuant to the request of the Initiating Holders may, subject to the
provisions of Section 3.5 below, include (a) Additional Shares which are held by
officers or directors of the Company or which are held by Other Shareholders
who, by virtue of agreements with the Company, are entitled to include their
securities with the Holders referred to in Section 3.1 above, and (b) securities
of the Company being sold for the account of the Company (the "Company Shares").
3.3 Withdrawal of Registration. If the Initiating Holders inform the
Company by written notice that they are withdrawing their registration request
made pursuant to Section 3.1 above and the Initiating Holders pay all of the
Company's out-of-pocket expenses with respect to such registration incurred to
the date of such notice, then the registration
6
<PAGE>
statement need not be filed and all efforts pursuant to this Agreement will not
count as a registration (or an exercise of rights) under this Section 3;
provided, however, that if the Company decides to go forward with the
registration on its own behalf, or on behalf of any other shareholders, then the
Initiating Holders shall not be required to pay any of the Company's
out-of-pocket expenses and such registration will not count as a registration
(or an exercise of rights) under this Section 3.
3.4 Underwriting.
(a) If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
this Section 3 and the Company shall include such information in the Demand
Registration Notice, and such Demand Registration Notice shall also state that
any registration pursuant to this Section 3 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein and
subject to the limitations provided herein. A Holder may elect to include in
such underwriting all or a part of such Holder's Registrable Securities.
(b) The Company shall (together with all Holders, officers,
directors and Other Shareholders proposing to distribute their securities
through such underwriting) enter into an underwriting agreement in customary
form with the representative of the underwriter or underwriters selected for
such underwriting by a majority in interest of the Initiating Holders.
3.5 Limitations on Shares to be Included. Notwithstanding any other
provision of this Section 3, if the representative of the underwriters advises
the Company or the Initiating Holders in writing that marketing factors require
a limitation on the number of shares to be underwritten or that the inclusion of
Additional Shares or Company Shares may adversely affect the sale price (of the
shares to be registered) that may be obtained, first the Additional Shares shall
be excluded from such registration to the extent so required by such limitation,
then the Company Shares shall be excluded from such registration to the extent
so required by such limitation, and if a limitation of the number of shares is
still required, the number of shares that may be included in the registration
and underwriting shall be allocated among all Holders in proportion, as nearly
as practicable, to the respective amounts of Registrable Securities which they
have requested to be included in such registration statement. If the Company or
any Holder of Registrable Securities, officer, director or Other Shareholder who
has requested inclusion in such registration as provided above disapproves of
the terms of any such underwriting, such Person may elect to withdraw such
Person's Registrable Securities, Additional Shares or Company Shares therefrom
by written notice to the Company, the underwriter and the Initiating Holders. If
the withdrawal of any Registrable Securities, Additional Shares or Company
Shares would allow, within the marketing limitations set forth above, the
inclusion in the underwriting of a greater number of shares of Registrable
Securities or Additional Shares, then, to the extent practicable and without
delaying the underwriting, the Company shall offer first to the Holders and
second to the Other Shareholders an opportunity to include additional shares of
Registrable Securities or Additional Shares, as the case may be, in the
proportions discussed above.
7
<PAGE>
4. Expenses of Registration. All Registration Expenses incurred in
connection with the registration or qualification of, or compliance with, any
registration statement under Sections 2 and 3 of this Agreement shall be borne
by the Company. All Selling Expenses shall be borne pro rata by each Holder and
each Other Shareholder in accordance with the number of shares sold.
5. Registration Procedures.
5.1 In the case of each registration to be effected by the Company
pursuant to this Agreement, the Company will keep each Holder advised in writing
as to the initiation of each registration and all amendments thereto and as to
the completion thereof, advise any such Holder, upon request, of the progress of
such proceedings, use its best efforts to effect the registration of any
Registrable Securities under the Securities Act, and will, at its expense:
(a) Prepare and file with the Commission a registration
statement covering such Registrable Securities and use its best efforts to cause
such registration statement to be declared effective by the Commission and to
keep such registration effective for a period of one hundred eighty (180) days
or until the Holder or Holders have completed the distribution described in the
registration statement relating thereto, whichever first occurs; provided,
however, that the Company shall keep such registration effective for longer than
one hundred and eighty (180) days if the costs and expenses associated with such
extended registration are borne by the selling Holders; provided further,
however, that the foregoing shall not apply to any registration statement filed
pursuant to Section 2.6 hereof.
(b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such registration statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement;
(c) Furnish to each seller of Registrable Securities covered
by such registration statement and each Holder two conformed copies of such
registration statement and of each such amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities Act,
and such other documents, as such seller or Holder, as the case may be, may
reasonably request;
(d) Promptly notify each seller of Registrable Securities
covered by such registration statement and each Holder at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event as a result of which the prospectus included
in such registration statement, as then in effect, includes an untrue
8
<PAGE>
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
incomplete in the light of the circumstances then existing, and at the request
of any such seller, prepare and furnish to such seller a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be necessary
so that, as thereafter delivered to the purchasers of such shares, such
prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or incomplete in the light of the
circumstances then existing;
(e) Use its best efforts (i) to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities or blue sky laws of such states of the
United States of America where an exemption is not available and as the sellers
of Registrable Securities covered by such registration statement shall
reasonably request, (ii) to keep such registration or qualification in effect
for so long as such registration statement remains in effect and (iii) to take
any other action which may be reasonably necessary or advisable to enable such
sellers to consummate the disposition in such jurisdictions of the securities to
be sold by such sellers; provided, however, that the Company shall not for any
such purpose be required to (x) qualify generally to do business as a foreign
corporation in any jurisdiction wherein it would not but for the requirements of
this clause (e) be obligated to be so qualified, (y) subject itself to taxation
in any such jurisdiction or (z) consent to general service of process in any
such jurisdiction;
(f) Use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by such
other federal or state governmental agencies or authorities as may be necessary
in the opinion of counsel to the Company and counsel to the seller or sellers of
Registrable Securities to enable the seller or sellers thereof to consummate the
disposition of such Registrable Securities;
(g) Use its best efforts to list all such Registrable
Securities registered in such registration on each securities exchange or
automated quotation system on which the Common Stock of the Company is then
listed;
(h) Provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration;
(i) Make available for inspection by any seller of Registrable
Securities and each Holder, any underwriter participating in any disposition
pursuant to such registration statement, and any attorney or accountant retained
by any such seller, Holder or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company's officers, directors, employees and independent accountants to supply
all information reasonably requested by any such seller, Holder, underwriter,
attorney or accountant in connection with such registration statement, which
information shall be subject to reasonable restrictions concerning
confidentiality and non-disclosure;
9
<PAGE>
(j) Furnish to each selling Holder upon request a signed
counterpart, addressed to the selling Holder, of
(i) an opinion of counsel for the Company, dated the
effective date of the registration statement and in form reasonably
acceptable to the Company and such Holder, and
(ii) "comfort" letters signed by the Company's
independent public accountants who have examined and reported on the
Company's financial statements included in the registration statement, to
the extent permitted by the standards of the American Institute of
Certified Public Accountants,
in the case of (i) and (ii) covering substantially the same matters with respect
to the registration statement (and the prospectus included therein) and (in the
case of the accountants' "comfort" letters) with respect to events subsequent to
the date of the financial statements, as are customarily covered in opinions of
issuer's counsel and in accountants' "comfort" letters delivered to the
underwriters in underwritten public offerings of securities;
(k) Furnish to each selling Holder a copy of all
correspondence from or to the Commission in connection with any such offering;
(l) In the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Registrable Securities included in such registration statement for sale in
any jurisdiction, the Company will use its reasonable best efforts promptly to
obtain the withdrawal of such order; and
(m) Otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and, if required, make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months, but not more
than eighteen months, beginning with the first month after the effective date of
the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.
5.2 It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Agreement that the Holders proposing
to register Registrable Securities shall furnish to the Company such information
regarding them, the Registrable Securities held by them, and the intended method
of distribution of such Registrable Securities as the Company shall reasonably
request and as shall be required in connection with the action to be taken by
the Company.
5.3 In connection with the preparation and filing of each
registration statement under this Agreement, the Company will give the Holders
on whose behalf such Registrable Securities are to be registered and their
underwriters, if any, and their respective counsel and accountants, the
opportunity to participate in the preparation of such registration statement,
each
10
<PAGE>
prospectus included therein or filed with the Commission, and each amendment
thereof or supplement thereto, and will give each such Holder such access to the
Company's books and records and such opportunities to discuss the business of
the Company with its officers, its counsel and the independent public
accountants who have certified the Company's financial statements, as shall be
necessary, in the opinion of such Holders or such underwriters or their
respective counsel, in order to conduct a reasonable and diligent investigation
within the meaning of the Securities Act. Without limiting the foregoing, each
registration statement, prospectus, amendment, supplement or any other document
filed with respect to a registration under this Agreement shall be subject to
review and reasonable approval by the Holders registering Registrable Securities
in such registration and by their counsel.
6. Indemnification.
6.1 Indemnification by the Company. In the event of any registration
of any securities of the Company under the Securities Act, the Company will
indemnify and hold harmless each Holder, each of its officers, directors,
partners, employees, agents, attorneys and consultants and each Person
controlling such Holder, and each underwriter, if any, and each Person who
controls any underwriter, against all claims, losses, damages and liabilities,
joint and several (or actions, proceedings or settlements in respect thereof)
arising out of or based upon any untrue statement (or alleged untrue statement)
of a material fact contained in any prospectus, offering circular or other
document (including any related registration statement, notification or the
like) incident to any such registration, qualification or compliance, or based
upon any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act or any rule or
regulation thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each such Holder, each of its
officers, directors and partners, and each Person controlling such Holder, each
such underwriter and each Person who controls any such underwriter, for any
legal and any other expenses reasonably incurred in connection with
investigating and defending or settling any such claim, loss, damage, liability
or action; provided, however, that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission made in reliance
upon and based upon written information furnished to the Company by such Holder
or underwriter and expressly stated to be specifically for use therein.
6.2 Indemnification by the Holders. Each Holder will, if Registrable
Securities held by such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, severally and not
jointly, indemnify the Company, each of its directors and officers and each
underwriter, if any, of the Company's securities covered by such a registration
statement, each Person who controls the Company (other than such Holder) or such
underwriter within the meaning of the Securities Act and the rules and
regulations thereunder, each other such Holder and each of their officers,
directors and partners, and each Person controlling such Holder or other
stockholder, against all claims, losses, damages, expenses and liabilities (or
actions in respect thereof) arising out of or based upon any untrue statement
(or alleged untrue statement) of a material fact contained in any such
11
<PAGE>
registration statement, prospectus, offering circular or other document, or any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse the Company, each of its directors and officers, each underwriter
or control Person, each other Holder and each of their officers, directors and
partners and each Person controlling such Holder or other shareholder for any
legal or any other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company by such Holder
and expressly stated to be specifically for use therein; provided, however, that
the liability of any such Holder under this Section 6.2 shall be limited to the
amount of proceeds received by such Holder in the offering giving rise to such
liability.
6.3 Notices of Claims, Procedures, etc. Each party entitled to
indemnification under this Section 6 (the "Indemnified Party") shall give notice
to the party required to provide indemnification (the "Indemnifying Party")
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting therefrom; provided,
that counsel for the Indemnifying Party, who shall conduct the defense of such
claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld), and the
Indemnified Party may participate in such defense at the Indemnified Party's
sole expense; provided, further, that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 6 unless such failure is prejudicial to the
ability of the Indemnifying Party to defend such claim or action.
Notwithstanding the foregoing, such Indemnified Party shall have the right to
employ its own counsel in any such litigation, proceeding or other action if (i)
the employment of such counsel has been authorized by the Indemnifying Party, in
its sole and absolute discretion, or (ii) the named parties in any such claims
(including any impleaded parties) include any such Indemnified Party and the
Indemnified Party and the Indemnifying Party shall have been advised in writing
(in suitable detail) by counsel to the Indemnified Party either (A) that there
may be one or more legal defenses available to such Indemnified Party which are
different from or additional to those available to the Indemnifying Party, or
(B) that there is a conflict of interest by virtue of the Indemnified Party and
the Indemnifying Party having common counsel, in any of which events, the legal
fees and expenses of a single counsel for all Indemnified Parties with respect
to each such claim, defense thereof, or counterclaims thereto, shall be borne by
the Indemnifying Party. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of each Indemnified Party, consent
to entry of any judgment or enter into any settlement (x) which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation, or (y) which requires action other than the payment of money by the
Indemnifying Party. Each Indemnified Party shall cooperate to the extent
reasonably required and furnish such information regarding itself or the claim
in question as an Indemnifying Party may reasonably request in writing and as
shall be reasonably required in connection with defense of such claim and
litigation resulting therefrom.
12
<PAGE>
6.4 Contribution. If the indemnification provided for in this
Section 6 shall for any reason be held by a court to be unavailable to an
Indemnified Party under Section 6.1 or 6.2 hereof in respect of any loss, claim,
damage or liability, or any action in respect thereof, then, in lieu of the
amount paid or payable under Section 6.1 or 6.2, the Indemnified Party and the
Indemnifying Party under Section 6.1 or 6.2 shall contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating the same), (i) in such
proportion as is appropriate to reflect the relative fault of the Company and
the prospective sellers of Registrable Securities covered by the registration
statement which resulted in such loss, claim, damage or liability, or action or
proceeding in respect thereof, with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action or proceeding in
respect thereof, as well as any other relevant equitable considerations or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as shall be appropriate to reflect the relative benefits
received by the Company and such prospective sellers from the offering of the
securities covered by such registration statement; provided, that for purposes
of this clause (ii), the relative benefits received by the prospective sellers
shall be deemed not to exceed the amount of proceeds received by such
prospective sellers. No Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. Such prospective sellers' obligations to contribute as
provided in this Section 6.4 are several in proportion to the relative value of
their respective Registrable Securities covered by such registration statement
and not joint. In addition, no Person shall be obligated to contribute hereunder
any amounts in payment for any settlement of any action or claim effected
without such Person's consent, which consent shall not be unreasonably withheld.
7. Information by Holder. Each Holder of Registrable Securities shall
furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification or compliance referred to in this Agreement.
8. Transfer or Assignment of Registration Rights. The rights with respect
to any Registrable Securities to cause the Company to register such securities
granted to a Holder by the Company under this Agreement may be transferred or
assigned by a stockholder, in whole or in part, to a transferee or assignee of
any Registrable Securities and, in such case, the Company shall be given written
notice stating the name and address of said transferee or assignee and
identifying the securities with respect to which such registration rights are
being transferred or assigned.
9. Rule 144 and Rule 144A. The Company shall file the reports required to
be filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the Commission thereunder, and will take all actions
reasonably necessary to enable holders of Registrable Securities to sell such
securities without registration under the Securities Act within the limitation
of the provisions of (a) Rule 144 under the Securities Act, as such Rule may be
13
<PAGE>
amended from time to time, (b) Rule 144A under the Securities Act, as such Rule
may be amended from time to time, if applicable or (c) any similar rules or
regulations hereafter adopted by the Commission. Upon the request of any holder
of Registrable Securities, the Company will deliver to such holder a written
statement as to whether it has complied with such requirements.
10. Specific Performance. Each holder of Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
11. No Inconsistent Agreements. The Company will not hereafter enter into
any agreement with respect to its securities which is inconsistent with the
rights granted to the holders of Registrable Securities in this Agreement.
Without limiting the generality of the foregoing, the Company will not hereafter
enter into any agreement with respect to its securities which grants, or modify
any existing agreement with respect to its securities to grant, to the holder of
its securities in connection with an incidental registration of such securities
higher priority to the rights granted to the Holder under Section 2 of this
Agreement; provided, however, the Company shall be entitled to enter into an
agreement which grants, or modify any existing agreement with respect to its
securities to grant, to the holder of its securities in connection with an
incidental registration of such securities equal priority to the rights granted
to the Holders under Section 2 of this Agreement.
12. Benefits of Agreement: Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns, legal representatives and heirs; this
Agreement does not create, and shall not be construed as creating, any rights
enforceable by any other Person.
13. Complete Agreement. This Agreement constitutes the complete
understanding among the parties with respect to its subject matter and
supersedes all existing agreements and understandings, whether oral or written,
among them. No alteration or modification of any provisions of this Agreement
shall be valid unless made in writing and signed by a majority in interest of
the Holders.
14. Section Headings. The section headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
15. Notices. All notices, offers, acceptances and other communications
required or permitted to be given or to otherwise be made to any party to this
Agreement shall be deemed to be sufficient if contained in a written instrument
delivered by hand, first class mail (registered or certified, return receipt
requested), telex, telecopier or overnight air courier guaranteeing next day
delivery, if to the Corporation, to it at Cali Realty Corporation, 11 Commerce
Drive, Cranford, New Jersey 07016, Attention: Thomas A. Rizk, Esq., with a copy
to Pryor, Cashman, Sherman & Flynn, 410 Park Avenue, New York, New York 10022,
Attention: Jonathan A.
14
<PAGE>
Bernstein, Esq., and if to any Holder, to the address of such Holder as set
forth in the stock transfer books of the Corporation.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged, if telecopied; and
the next business day after timely delivery to the courier, if sent by overnight
air courier guaranteeing next day delivery. Any party may change the address to
which each such notice or communication shall be sent by giving written notice
to tie other parties of such new address in the manner provided herein for
giving notice.
16. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York without giving
effect to the provisions, policies or principles thereof respecting conflict or
choice of laws.
17. Counterparts. This Agreement may be executed in one or more
counterparts each of which shall be deemed an original but all of which taken
together shall constitute one and the same agreement.
18. Severability. Any provision of this Agreement which is determined to
be illegal, prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such illegality, prohibition or
unenforceability without invalidating the remaining provisions hereof which
shall be severable and enforceable according to their terms and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
15
<PAGE>
IN WITNESS WHEREOF, the parties have signed this Agreement as of the date
first set forth above.
CALI REALTY CORPORATION
By:_________________________________
Name:
Title:
ROBERT MARTIN COMPANY, LLC
By:_________________________________
Name:
Title:
___________________________________
Brad W. Berger
___________________________________
Timothy M. Jones
___________________________________
Greg Berger
___________________________________
Andrew Greenspan
___________________________________
Michael Grossman
16
<PAGE>
EXHIBIT 26.1
RIGHT OF
FIRST OFFER AGREEMENT
This Agreement, dated January ___, 1997 by and between the ROBERT MARTIN
COMPANY, LLC, a New York limited liability company having an address at 100
Clearbrook Road, Elmsford, New York 10523 ("RM"), CALI REALTY, L.P., a Delaware
limited partnership having an address at 11 Commerce Drive, Cranford, New Jersey
07016-3599 ("CRLP") and CALI REALTY CORPORATION, a Maryland corporation having
an address at 11 Commerce Drive, Cranford, New Jersey 07016-3599 ("CRC",
together with CRLP, collectively "Cali").
STATEMENT OF FACTS
RM has transferred to Cali, on the date hereof, certain undeveloped land
located in [Westchester, New York] [Stamford, Connecticut], which property is
more particularly described on Exhibit A annexed hereto (the "Property"). RM has
agreed to grant to Cali certain rights of first refusal and first offer as set
forth below.
NOW, THEREFORE, in consideration of the mutual covenants and promises set
forth below, the parties hereto hereby agree as follows:
1. RM hereby grants to Cali a right of first offer with respect to any
offer acceptable to RM to sell the Property, or to enter into to a ground lease
of the Property which has a potential term, inclusive of renewal options, of
thirty (30) years or more, on the following terms and conditions:
(i) If RM shall be prepared to sell or ground lease the Property to
a bona fide third party, it shall give notice (the "Sale Notice") to Cali of the
terms and conditions of such offer, which notice shall advise Cali of the date
upon which its response to said Notice is required and shall specify that if
Cali fails to respond by such date, Cali's rights thereunder shall be waived.
(ii) If the Sale Notice provides that RM is prepared to sell the
Property, then Cali shall have thirty (30) days (the "Sale Option Period")
thereafter to elect to acquire the Property, on the terms and conditions of the
Sale Notice. If Cali shall elect to so acquire the Property, the parties shall
execute a contract reflecting such terms and conditions and shall close on such
acquisition as required therein. If the Sale Notice provides that RM is prepared
to ground lease the Property, then Cali's rights shall be to acquire the
Property pursuant to a purchase price determined as provided in (v) below.
(iii) If Cali shall elect not to so acquire the Property, or shall
fail to make an election on a timely basis, time being of the essence, RM shall
have the right to sell or ground lease the Property to a bona fide third party
on terms and conditions no less favorable than those
1
<PAGE>
set forth in the Sale Notice and at a sale price or effective rental, as the
case may be, of not less than ninety-five (95%) percent of the price or
effective rental stated in the Sale Notice and so long as such sale or ground
lease is consummated within one (1) year from the expiration of the Sale Option
Period. If RM shall desire to accept an offer on terms and conditions which are
less favorable than those set forth in the Sale Notice or at a sale price or
effective rental, as the case may be, of ninety-five (95%) percent or less than
the price or effective rental stated in the Sale Notice, or shall not sell or
ground lease the Property within the aforesaid one (1) year period, then RM
shall comply with the procedures of clauses (i) and (ii) of this Section 1 with
regard to such Property, and the restrictions set forth in this Section 1 shall
remain in force and effect.
(iv) In the event Cali shall fail to timely respond to the Sale
Notice or shall elect not to proceed in accordance with same, then within ten
(10) business days after RM's written request of Cali, Cali shall deliver a
written notice (the "Sale Waiver Notice") to RM waiving Cali's rights as set
forth in this Section 1 other than the requirement that the sale be consummated
within one (1) year from the expiration of the Sale Option Period and within the
terms and conditions and ninety-five (95%) percent requirements set forth in
Section 1(iii). If Cali shall fail to deliver the Sale Waiver Notice, time being
of the essence, then Cali shall be deemed to have irrevocably and
unconditionally waived its rights as set forth in this Section 1. In no event,
however, shall RM be permitted to build (except as permitted in Section 2
below), manage, lease or own the Property for flex, industrial or office use, or
any combination thereof, regardless of whether Cali shall be deemed to have
waived its rights set forth in this Section 1.
(v) If the Sale Notice provides that RM is prepared to ground lease
the Property, then said Notice shall be accompanied by RM's proposal of a price
to sell the Property based upon the terms and conditions of the ground lease and
the residual value of the Property (a "Proposed Sale Price"). Within the Sale
Option Period, Cali shall advise RM as to whether or not Cali is prepared to
acquire the Property at the Proposed Sale Price. If Cali is not so prepared,
then within ten (10) days following Cali's response, each party shall submit to
the other the final price at which it is prepared to sell and purchase the
Property, respectively (each party's proposal shall be deemed the "Seller's
Final Price" and "Purchaser's Final Price", respectively). Within ten (10) days
thereafter, the parties shall attempt to reach agreement on a mutually
acceptable sale price. If the parties fail to so agree, then within an
additional five (5) days, the parties shall attempt to agree upon a mutually
acceptable arbitrator to resolve said matter, failing which either party shall
have the right to petition the American Arbitration Association in New York City
to choose a single arbitrator with at least fifteen (15) years experience
valuating real estate properties in the greater metropolitan New York area. The
arbitrator hearing said matter shall be instructed to choose one of the Seller's
Final Price or Purchaser's Final Price, after accepting such documentary
evidence as RM and Cali shall elect to present within ten (10) days of the
arbitrator being agreed upon or chosen, as the case may be. The arbitrator shall
not accept oral testimony, shall be limited to either Seller's Final Price or
Purchaser's Final Price, and shall be instructed to render a decision with
twenty (20) days after being agreed upon or chosen, as the case may be. Said
decision shall be binding upon both RM and Cali, and RM and Cali shall share all
of the costs and expenses of the arbitration. Either party shall also have the
right to enforce the arbitrator's decision in the appropriate courts having
jurisdiction.
2
<PAGE>
2. RM shall be permitted to construct any project for office, flex or
industrial use, or any combination thereof, for a fee, for a bona fide third
party, subject to the provisions of this Section 2. In the event that such
proposal is made to RM, then RM hereby grants to Cali a right of first offer
(the "Offer Right") with respect to such development or new construction (a
"Capital Improvement"). If RM shall desire to perform any Capital Improvement at
the Property it shall offer the right to do so to Cali on the following terms
and conditions:
(i) RM shall give a notice (the "Improvement Notice") to Cali
specifying (a) that RM is prepared to perform, or cause to be performed on its
behalf, a Capital Improvement at the Property, (b) the nature of the Capital
Improvement and (c) the terms and conditions for which it is prepared to have
the Capital Improvement performed by it or on its behalf. The Improvement Notice
shall also advise Cali of the date upon which its response to said Notice is
required and shall specify that if Cali fails to respond by such date, Cali's
rights thereunder shall be waived.
(ii) Upon receipt of the Improvement Notice, Cali shall have ten
(10) days (the "Improvement Option Period") thereafter to elect to perform the
Capital Improvement which is the subject of the Improvement Notice on the terms
and conditions of the Improvement Notice. If Cali shall elect to proceed as set
forth therein, the parties shall promptly thereafter execute a development
agreement reflecting such terms and conditions and the parties shall proceed
thereafter.
(iii) If Cali shall elect not to perform the Capital Improvement, or
shall fail to make an election on a timely basis, RM shall have the right to
perform the Capital Improvement or cause such other parties as it shall elect to
perform the Capital Improvement on terms and conditions substantially the same
as those set forth in the Improvement Notice, so long as the Capital Improvement
which is the subject of the Improvement Notice is commenced within one (1) year
from the expiration of the Improvement Option Period. If RM shall desire to
perform or have performed on its behalf the Capital Improvement which is the
subject of the Improvement Notice on terms and conditions which are less
favorable than those set forth in the Improvement Notice, or shall not commence
such work within the aforesaid one (1) year period, then RM shall comply with
the procedures of clauses (i) and (ii) of this Section 2, and the restrictions
set forth in this Section 2 shall remain in full force and effect.
(iv) In the event Cali shall fail to timely respond to the
Improvement Notice or shall elect not to proceed in accordance with same, Cali
shall, upon request of RM, deliver a written notice (the "Improvement Waiver
Notice") to RM waiving Cali's rights as set forth in this Section 2, other than
the requirement that the Capital Improvement which is the subject of the
Improvement Notice be commenced within one (1) year from the expiration of the
Improvement Option Period. If Cali shall fail to deliver the Improvement Waiver
Notice, then Cali shall be deemed to have irrevocably and unconditionally waived
its rights as set forth in this Section 2.
3
<PAGE>
3. In the event that the Property is developed by RM for any use other
than flex, industrial or office use, CRLP shall release the Property from this
Agreement promptly upon request by RM .
4. If CRLP waives its rights hereunder following a Sale Notice and RM
consummates a sale thereafter in accordance with this Agreement, then CRLP shall
release the Property from this Agreement promptly upon request of RM.
5. All notices to be given or sent hereunder shall be sent to the address
of the party first set forth above and may be given personally or may be
delivered by depositing the same with any nationally recognized overnight
delivery service. Notices given by personal delivery service shall be deemed
given on the day so delivered, and notices delivered by a nationally recognized
overnight delivery service shall be deemed given on the first business day
following the deposit of same with such service. Notices shall be given to the
parties at the address first set forth above, with the notice to RM being sent
to the attention of Brad Berger and Lloyd Roos, Esq. and the notice to Cali
being sent to the attention of Roger W. Thomas, Esq. Copies of notices to Cali
also given by a nationally recognized overnight delivery service to Pryor,
Cashman, Sherman & Flynn, 410 Park Avenue, New York, New York 10022, Attention:
Jonathan A. Bernstein, Esq., and copies of notices to RM also given by a
nationally recognized overnight delivery service to Battle Fowler LLP, 75 East
55th Street, New York, New York, Attention: Robert J. Wertheimer, Esq. Notices
may be given by counsel to the respective parties.
6. This Agreement (a) may not be amended except by a written instrument
executed by all the parties hereto and (b) shall be governed by the laws of the
State of New York applicable to agreements made and to be performed in such
state.
7. This Agreement may be executed in counterparts and each counterpart so
executed shall constitute an original, all of which when taken together shall
constitute one agreement, notwithstanding that all of the parties are not
signatories to the same counterpart.
4
<PAGE>
8. This Agreement is the entire agreement among the parties with respect
to the subject matter hereof and supersedes all prior agreements relative to
such matter.
IN WITNESS WHEREOF, the parties hereto shall be deemed to have executed
this Agreement as of the day and year first above written.
ROBERT MARTIN COMPANY, LLC
By: ____________________________________
Name:
Title:
CALI REALTY CORPORATION
By: ____________________________________
Name:
Title:
CALI REALTY, L.P.
By: Cali Realty Corporation
By: ____________________________________
Name:
Title:
5
EXHIBIT 10.60 TO F0RM 8-K
<PAGE>
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CALI REALTY, L.P.
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS...................................................... 1
ARTICLE 2 CONTINUATION OF THE PARTNERSHIP.................................. 11
2.1 Continuation................................................... 11
2.2 Entire Agreement............................................... 11
ARTICLE 3 NAME AND OFFICES................................................. 11
3.1 Name 11
3.2 Principal and Registered Offices............................... 11
ARTICLE 4 PURPOSE.......................................................... 12
4.1 Purpose........................................................ 12
4.2 Powers......................................................... 12
ARTICLE 5 TERM AND FISCAL YEAR............................................. 13
5.1 Term 13
5.2 Fiscal Year.................................................... 13
ARTICLE 6 CAPITAL CONTRIBUTIONS, ADDITIONAL FUNDING AND
CAPITAL ACCOUNTS.......................................................... 13
6.1 Capital Contributions of the General Partner................... 13
6.2 Capital Contributions of the Limited Partners.................. 14
6.3 General Partner Option to Contribute Additional
Capital................................................... 14
6.4 General Partner Option to Issue Additional
Partnership Units to Limited Partners......................... 16
(a) Issuance of Additional Partnership Units.............. 16
(b) Issuance of New Securities............................ 18
6.5 Capital Accounts............................................... 18
6.6 Limited Liability.............................................. 19
6.7 Return of Capital.............................................. 19
6.8 No Interest on Capital Contributions........................... 19
6.9 No Third Party Beneficiary..................................... 19
6.10 Common Stock Option Plans..................................... 20
ARTICLE 7 ALLOCATION OF PROFITS AND LOSSES................................. 20
7.1 General Allocation of Profits and Losses....................... 20
7.2 Allocations with Respect to Transferred Interests.............. 20
i
<PAGE>
7.3 Regulatory Allocations......................................... 21
(a) Minimum Gain Chargeback.............................. 21
(b) Exceptions to Section 7.3(a).......................... 21
(c) Qualified Income Offset............................... 21
(d) Gross Income Allocation............................... 22
(e) Partner Nonrecourse Debt.............................. 22
(f) Interpretation........................................ 22
(g) Curative Allocations.................................. 22
7.4 Special Allocations with Respect to Contributed or
Revalued Property.............................................. 23
7.5 Allocations with Respect to Partnership Units other
than the OP Units.............................................. 23
ARTICLE 8 DISTRIBUTIONS.................................................... 23
8.1 Distribution of Net Cash Flow.................................. 23
8.2 Distributions in Kind.......................................... 24
8.3 Withholding.................................................... 24
8.4 Distributions with Respect to Partnership Units
other than OP Units....................................... 25
ARTICLE 9 MANAGEMENT....................................................... 25
9.1 Management of Partnership Affairs.............................. 25
9.2 Powers and Authorities of the General Partner.................. 26
9.3 Major Decisions................................................ 29
9.4 Restrictions on General Partner's Authority.................... 29
9.5 Engagements by the Partnership................................. 30
9.6 Engagement of Affiliates....................................... 30
9.7 Liability of the General Partner............................... 30
9.8 Reimbursement of Certain Expenses of
the General Partner ...................................... 30
9.9 Outside Activities of the General Partner...................... 31
9.10 Operation in Accordance with REIT Requirements................ 31
9.11 Title Holder.................................................. 31
ARTICLE 10 RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS...................... 32
10.1 No Participation in Management of Partnership;
Rights of Limited Partners to Certain Documents............... 32
10.2 Withdrawal, Retirement, Death, Incompetency,
Insolvency or Dissolution of a Limited Partner................ 33
10.3 Redemption Rights............................................. 33
(a) Grant of Rights....................................... 33
(b) Delivery of Exercise Notices.......................... 33
(c) Assumption by General Partner......................... 34
(d) Limitation on Exercise of Redemption Rights........... 34
ii
<PAGE>
(e) Computation of Number of Exchange Shares
and/or Cash To Be Paid................................ 35
(f) Closing; Delivery of Election Notice.................. 36
(g) Closing Deliveries.................................... 36
(h) Term of Rights........................................ 37
(i) Covenants of the General Partner...................... 37
(j) Limited Partners' Covenant............................ 39
ARTICLE 11 BANKING, RECORDS AND TAX MATTERS................................ 39
11.1 Partnership Funds............................................. 39
11.2 Books and Records............................................. 40
11.3 Financial Statements.......................................... 40
11.4 Tax Returns................................................... 40
11.5 Section 754 Matters........................................... 40
11.6 Tax Matter Partners........................................... 41
11.7 Other Reports................................................. 41
ARTICLE 12 TRANSFER OF GENERAL PARTNER INTERESTS........................... 41
12.1 Transfer of Interest of the General Partner................... 41
12.2 Retirement of the General Partner............................. 41
12.3 Transferee of the General Partner's Interest.................. 42
12.4 Retirement of Last Remaining General Partner.................. 42
12.5 Continuation of Partnership................................... 43
ARTICLE 13 TRANSFER OF LIMITED PARTNER INTERESTS........................... 43
13.1 Transfer of Interest of a Limited Partner..................... 43
13.2 Assignee and Substitute Limited Partners...................... 44
13.3 Assignment.................................................... 44
13.4 Cost of Admission............................................. 45
ARTICLE 14 DISSOLUTION AND LIQUIDATION OF PARTNERSHIP...................... 45
14.1 Dissolution of the Partnership................................ 45
14.2 Winding Up of Affairs......................................... 46
14.3 Accounting.................................................... 46
14.4 Final Distribution of Partnership Property.................... 46
14.5 Certificate of Cancellation................................... 47
ARTICLE 15 POWER OF ATTORNEY............................................... 47
15.1 Power of Attorney............................................. 47
15.2 Grant of Authority Irrevocable................................ 48
ARTICLE 16 AMENDMENT OF PARTNERSHIP AGREEMENT.............................. 48
16.1 Amendments by Partners........................................ 48
iii
<PAGE>
16.2 Amendment by the General Partner.............................. 49
16.3 Amendment of Certificate...................................... 50
ARTICLE 17 INDEMNIFICATION................................................. 50
17.1 Partnership Indemnification of Partner........................ 50
17.2 Partner Indemnification of Partnership........................ 50
ARTICLE 18 MISCELLANEOUS PROVISIONS........................................ 51
18.1 Notices....................................................... 51
18.2 Severability.................................................. 51
18.3 Parties Bound................................................. 51
18.4 Applicable Law................................................ 51
18.5 Partition..................................................... 51
18.6 Computation of Accountants.................................... 51
18.7 Headings...................................................... 52
18.8 Counterparts.................................................. 52
iv
<PAGE>
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CALI REALTY, L.P.
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (this
"Agreement") of CALI REALTY, L.P., a Delaware limited partnership (the
"Partnership"), is made and entered into as of the 16th day of January, 1997, by
and among CALI REALTY CORPORATION, a Maryland corporation, as general partner,
and those parties who are designated as limited partners upon the Exhibit A
attached hereto and made a part hereof by this reference, as limited partners.
R E C I T A L S:
WHEREAS, the Partnership was previously formed pursuant to that certain
Agreement of Limited Partnership, dated as of May 31, 1994 (the "Original
Agreement"), and that certain Certificate of Limited Partnership, dated as of
May 31, 1994, which was filed with the Secretary of State of Delaware on May 31,
1994;
WHEREAS, the Original Agreement was amended and restated pursuant to the
terms of that certain Agreement of Limited Partnership, dated as of August 31,
1994 (the "LP Agreement");
WHEREAS, the parties hereto desire to continue the Partnership and amend
and restate the terms and provisions of the LP Agreement in its entirety, all
upon the terms and provisions, and subject to the conditions, set forth herein;
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
ARTICLE 1
DEFINITIONS
As used in this Agreement, unless otherwise clearly indicated to the
contrary, the following terms have the meanings set forth below.
"Accountants" shall mean the firm or firms of independent certified public
accountants selected from time to time by the General Partner on behalf of the
Partnership to audit the books
- 1 -
<PAGE>
and records of the Partnership and to prepare statements and reports in
connection therewith.
"Act" shall mean the Delaware Revised Uniform Limited Partnership Act, as
amended from time to time subsequent to the date hereof.
"Additional Partnership Units" shall have the definition assigned to such
term in Section 6.3 hereof.
"Additional Limited Partner" shall have the definition assigned to such
term in Section 6.4 hereof.
"Affiliate" shall mean, with respect to any Partner (or as to any other
Person the affiliates of whom are relevant for purposes of any of the provisions
of this Agreement), (i) any member of the Immediate Family of such Partner; (ii)
any trustee or beneficiary of a Partner; (iii) any legal representative,
successor or assignee of such Partner or any Person referred to in the preceding
clauses (i) and (ii); (iv) any trustee for the benefit of such Partner or any
Person referred to in the preceding clauses (i) through (iii); or (v) any Person
which directly or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with such Partner or any Person
referred to in the preceding clauses (i) through (iv).
"Agreed Value" shall mean, with respect to any property contributed by a
Partner to the Partnership hereunder, an amount equal to (i) the Gross Asset
Value of the Capital Contribution determined as of the date of such
contribution, less (ii) the amount of any and all liabilities securing such
contributed property that the Partnership is considered to assume or take
subject to with respect to such property under Code Section 752 or the
Regulations promulgated thereunder.
"Board of Directors" shall mean the Board of Directors of the General
Partner.
"Capital Account" shall have the definition assigned to such term in
Section 6.5 hereof.
"Capital Contribution" shall mean, with respect to any Partner, the amount
of money and the Agreed Value of any property (other than money) contributed to
the Partnership with respect to the Partnership Interest held by such Partner.
"Certificate" shall mean the Partnership's Certificate of Limited
Partnership, as amended from time to time in accordance with the terms hereof
and the Act.
- 2 -
<PAGE>
"Closing Price" shall mean, on any date, with respect to a share of Common
Stock, the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, for one
share of Common Stock in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Common Stock is not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Common Stock is listed
or admitted to trading, or if the Common Stock is not listed or admitted to
trading on any national securities exchange, the last quoted price, or if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotations System or, if such system is no longer in use, the
principal other automated quotations system that may then be in use or, if the
Common Stock is not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Common Stock as such person is selected from time to time by the Board of
Directors.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time or any successor statute thereto.
"Common Stock" shall mean the shares of the common stock, par value $.01
per share, of the General Partner.
"Completion of the Offering" shall mean the closing of the first sale of
Common Stock in the Offering.
"Control" shall mean the ability, whether by the direct or indirect
ownership of shares or other equity interests, by contract or otherwise, to
elect a majority of the directors of a corporation, to select the managing
partner of a partnership, or otherwise to select, or have the power to remove
and then select, a majority of those persons exercising governing authority over
any particular entity. In the case of a limited partnership, the sole general
partner, all of the general partners to the extent each has equal management
control and authority, or the managing general partner or managing general
partners thereof shall be deemed to have control of such partnership and, in the
case of a trust, any trustee thereof or any Person having the right to select
any such trustee shall be deemed to have control of such trust.
- 3 -
<PAGE>
"Current Per Share Market Price", on any date, shall mean the average of
the Closing Price for the five (5) consecutive Trading Days ending on such date.
"Depreciation" shall mean, with respect to any asset of the Partnership
for any fiscal year or other period, the depreciation, depletion, amortization
or other cost recovery deduction, as the case may be, allowed or allowable for
Federal income tax purposes in respect of such asset for such fiscal year or
other period; provided, however, that if there is a difference between the Gross
Asset Value and the adjusted tax basis of such asset, Depreciation shall mean
"book depreciation, depletion or amortization" as determined under Section
1.704-1(b)(2)(iv)(g)(3) of the Regulations.
"Excess Deficit Capital Account Balance" of any Partner shall be the
Capital Account balance of such Partner, adjusted as provided in the immediately
following sentence, to the extent, if any, that such balance is a deficit (after
adjustment). For purposes of determining the existence and amount of an Excess
Deficit Capital Account Balance, the Capital Account balance of a Partner shall
be adjusted by: (i) crediting thereto (A) that portion of any deficit Capital
Account balance that such Partner is required to restore under the terms of this
Agreement or any other document, and (B) the amount of such Partner's share of
Minimum Gain, including any Partner Nonrecourse Debt Minimum Gain; and (ii)
charging thereto the items described in Regulation Sections 1.704-1(b)(2)(ii)
(d)(4), (5) and (6) that apply to such Partner. The existence and amount of
Excess Deficit Capital Account Balance at the end of any year shall be
determined before any other allocations provided for in Article 7 for such year
have been made.
"Exercise Notice" shall mean the written notice as described in Section
10.3(b) hereof to be given by an Exercising Partner to the General Partner to
exercise Redemption Rights, the form of which Exercise Notice is attached to the
Unit Certificate as Attachment 1.
"Exercising Partners" shall have the meaning set forth in Section 10.3(b)
hereof.
"General Partner" shall mean Cali Realty Corporation, a Maryland
corporation, and any substitute or additional General Partner(s) duly admitted
pursuant to the terms of this Agreement, or, where the context so requires, any
successor General Partner(s) acting pursuant to the provisions of this
Agreement.
- 4 -
<PAGE>
"Gross Asset Value" shall mean, with respect to any asset of the
Partnership, such asset's adjusted basis for Federal income tax purposes, except
as follows:
(a) The initial Gross Asset Value of any asset contributed by a
Partner shall be equal to the gross fair market value of such asset as
determined by the General Partner, in its reasonable discretion; provided,
however, that the Gross Asset Values of the assets contributed by a
Limited Partner on the date hereof shall be equal to the product of (1)
the number of Partnership Units set forth opposite such Partner's name on
Exhibit A attached hereto, multiplied by (2) the initial public offering
price per share of Common Stock in connection with the Offering.
(b) If the General Partner reasonably determines that an adjustment
is necessary or appropriate to reflect the relative economic interests of
the Partners, the Gross Asset Values of all Partnership assets shall be
adjusted to equal their respective gross fair market values, as reasonably
determined by the General Partner, as of the following times:
(i) a Capital Contribution (other than a de minimis Capital
Contribution) to the Partnership by a new or existing
Limited Partner as consideration for a Partnership
Interest;
(ii) the distribution by the Partnership to a Partner of more
than a de minimis amount of Partnership money or
property as consideration for the redemption of a
Partnership Interest;
(iii) the liquidation of the Partnership within the meaning of
Section 1.704-1(b)(2)(ii)(g) of the Regulations; and
(iv) any other time that such adjustment may be made under
the Code, the Regulations or any administrative
pronouncement or ruling by the IRS.
(c) The Gross Asset Values of Partnership assets distributed to any
Partner shall be the gross fair market values of such assets as reasonably
determined by the General Partner as of the date of distribution; and
- 5 -
<PAGE>
(d) The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such
assets pursuant to Sections 734(b) or 743(b) of the Code, but only to the
extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the Regulations;
provided, however, that Gross Asset Values shall not be adjusted pursuant
to this paragraph to the extent that the General Partner reasonably
determines that an adjustment pursuant to paragraph (b) above is necessary
or appropriate in connection with a transaction that would otherwise
result in an adjustment pursuant to this paragraph (d).
At all times, Gross Asset Values shall be adjusted by any Depreciation taken
into account with respect to the Partnership's assets for purposes of computing
Profits and Losses. Any adjustment to the Gross Asset Values of Partnership
property shall require an adjustment to the Partners' Capital Accounts; as for
the manner in which such adjustments are allocated to the Capital Accounts, see
clause (iii) of the definition of Profits and Losses in the case of adjustment
by Depreciation, and clause (iv) of said definition in all other cases.
"Immediate Family" shall mean, with respect to any individual Person, such
individual Person's spouse, parents, parents-in-law, descendants, nephews,
nieces, brothers, sisters, brothers-in-law, sisters-in-law and children-in-law.
"IRS" means the Internal Revenue Service, which administers the federal
tax laws of the United States.
"Limited Partners" shall mean any Person named as a Limited Partner on the
Exhibit A attached hereto as such Exhibit may be amended from time to time, or
any substituted Limited Partner or additional Limited Partner duly admitted to
the Partnership pursuant to the terms of this Agreement.
"Liquidation" shall mean the disposition of all or substantially all of
the assets of the Partnership pursuant to a complete liquidation of the
Partnership.
"Minimum Gain" shall have the meaning given such term in Treasury
Regulation Section 1.704-2(d), and shall generally mean the amount by which the
nonrecourse liabilities secured by any assets of the Partnership exceed the
adjusted tax basis of such assets as of the date of determination. A Partner's
share of Minimum Gain (and any net decrease thereof) at any time shall be
determined in accordance with Treasury Regulation Section 1.704-2(g).
- 6 -
<PAGE>
"Net Cash Flow" shall mean, with respect to any fiscal period of the
Partnership, the excess, if any, of "Receipts" over "Expenditures." For purposes
hereof, the term "Receipts" means the sum of (i) all cash receipts of the
Partnership from all sources for such period, including Net Sale Proceeds and
Net Financing Proceeds but excluding Capital Contributions, and (ii) any amounts
held as reserves as of the last day of the period immediately prior to such
fiscal period that the General Partner deemed necessary for any capital or
operating expenditure permitted hereunder. The term "Expenditures" means the sum
of (a) all cash expenses of the Partnership for such period, (b) the amount of
all payments of principal and interest on account of any indebtedness of the
Partnership including payments of principal and interest on account of any
indebtedness owed to a Partner during such period, (c) any amounts held as
reserves as of the last day of such fiscal period as the General Partner in its
sole discretion deems necessary for any capital or operating expenditures
permitted hereunder or reserves for any other purpose that the General Partner
in its sole discretion shall determine to be appropriate and (d) any amounts
held in working capital accounts or other cash or similar balances which the
General Partner determines to be necessary or appropriate in its sole
discretion. In the event the General Partner issues additional classes of
Partnership Units other than OP Units, the General Partner may, to the extent
necessary, in its sole discretion, determine the amount of Net Cash Flow
attributable to each class of Partnership Units and the timing of payment
thereof.
"Net Financing Proceeds" shall mean the cash proceeds received by the
Partnership in connection with any borrowing or refinancing of borrowing by or
on behalf of the Partnership (whether or not secured), after deduction of all
costs and expenses incurred by the Partnership in connection with such
borrowing, and after deduction of that portion of such proceeds used to repay
any other indebtedness of the Partnership, or any interest or premium thereon.
"Net Sale Proceeds" means the cash proceeds received by the Partnership in
connection with a sale of any asset by or on behalf of the Partnership after
deduction of any costs or expenses incurred by the Partnership, or payable
specifically out of the proceeds of such sale (including, without limitation,
any repayment of any indebtedness required to be repaid as a result of such sale
or which the General Partner elects to repay out of the proceeds of such sale,
together with accrued interest and premium, if any, thereon and any sales
commissions or other costs and expenses due and payable to any Person in
connection with a sale, including to a Partner or its Affiliates).
- 7 -
<PAGE>
"Offered Units" shall mean the Partnership Units of the Exercising
Partners identified in an Exercise Notice which, pursuant to the exercise of a
Redemption Right, can be acquired by the General Partner under the terms hereof.
"Offering" shall mean the initial public offering of the General Partner's
Common Stock.
"OP Units" shall mean those Partnership Units issued prior to September 1,
1995 and any additional OP Units issued by the General Partner pursuant to
Article 6 hereof.
"Original Agreement" shall have the meaning assigned to such term in the
Recitals set forth above.
"Partner or Partners" shall mean, unless the context in which the term is
used requires otherwise, the General Partner and the Limited Partners.
"Partner Nonrecourse Debt" shall have the meaning assigned to such term in
Regulation Section 1.704-2(b)(4).
"Partner Nonrecourse Debt Minimum Gain" shall have the meaning assigned to
such term in Regulation Section 1.704-2(i).
"Partnership" shall mean Cali Realty, L.P., a Delaware limited
partnership.
"Partnership Agreement" shall mean this Agreement of Limited Partnership
and the Exhibits and Schedules hereto, and any amendments hereto from time to
time.
"Partnership Interest" shall mean the ownership interest of a Partner in
the Partnership from time to time, including such Partner's Percentage Interest
and Capital Account and any and all other benefits to which the holder of such a
Partnership Interest may be entitled as provided in this Agreement and under
applicable laws, together with all obligations of such Person to comply with the
terms and provisions of this Agreement.
"Partnership Interests Exchange Agreement" shall mean, with respect to a
particular Limited Partner, that certain Partnership Interests Exchange
Agreement, dated as of July 26, 1994, by and among the Partnership, such Limited
Partner, and the other parties thereto, pursuant to which such Limited Partner
is contributing to the Partnership, directly or indirectly, all of such
Partner's right, title and interest in and to a particular Property Partnership.
- 8 -
<PAGE>
"Partnership Unit" shall mean a fractional, undivided share of the
Partnership Interests of all Partners issued pursuant to Article 6 hereof;
provided, however, that in the event the General Partner issues classes of
Partnership Units to Limited Partners other than the OP Units pursuant to
Section 6.4 hereof, the term Partnership Unit shall mean with respect to each
class of Partnership Units, a fractional, undivided share of the Partnership
Interests of all Partners in such class.
"Partnership Record Date" shall mean the record date established by the
General Partner for any particular distribution of Net Cash Flow pursuant to
Article 8 hereof, which record date shall be the same as the record date
established by the General Partner for distribution to its shareholders of some
or all of its portion of such distribution.
"Percentage Interest" shall mean, with respect to any Partner, its
interest in the Partnership as determined by dividing the Partnership Units
owned by such Partner by the total number of Partnership Units then issued and
outstanding; provided, however, that in the event the General Partner issues
classes of Partnership Units other than OP Units, the term Percentage Interest
shall mean with respect to any Partner, its interest in the Partnership as
determined by dividing the Partnership Units of each class owned by such Partner
by the total number of Partnership Units in such class then issued and
outstanding.
"Person" shall mean a natural person, corporation, trust, partnership,
estate, unincorporated association or other entity.
"Profits or Losses" shall mean, for each fiscal year or other applicable
period, an amount equal to the Partnership's net income or loss for such year or
period as determined for Federal income tax purposes by the Accountants,
determined in accordance with Section 703(a) of the Code (for this purpose, all
items of income, gain, loss or deduction required to be stated separately
pursuant to Section 703(a) of the Code shall be included in taxable income or
loss), with the following adjustments: (i) by including as an item of gross
income any tax-exempt income received by the Partnership; (ii) by treating as a
deductible expense any expenditure of the Partnership described in Section
705(a)(2)(B) of the Code (including amounts paid or incurred to organize the
Partnership (unless an election is made pursuant to Code Section 709(b)) or to
promote the sale of interests in the Partnership and by treating deductions for
any losses incurred in connection with the sale or exchange of Partnership
property disallowed pursuant to Section 267(a)(1) or Section 707(b) of the Code
as expenditures described in Section 705(a)(2)(B) of the Code); (iii) in lieu of
depreciation, depletion, amortization and
- 9 -
<PAGE>
other cost recovery deductions taken into account in computing total income or
loss, there shall be taken into account Depreciation; (iv) gain or loss
resulting from any disposition of Partnership property with respect to which
gain or loss is recognized for Federal income tax purposes shall be computed by
reference to the Gross Asset Value of such property rather than its adjusted tax
basis; and (v) in the event of an adjustment of the Gross Asset Value of any
Partnership asset which requires that the Capital Accounts of the Partnership be
adjusted pursuant to Regulation Section 1.704-1(b)(2)(iv)(e), (f) and (m), the
amount of such adjustment is to be taken into account as additional Profits or
Losses pursuant to Article 7.
"Property Partnership" shall mean each of the following (i.e., those
partnerships in which, pursuant to the Partnership Interests Exchange
Agreements, the Limited Partners are contributing to the Partnership, directly
or indirectly, all of their right, title and interest as partners in such
partnerships): (i) 11 Commerce Drive Associates, (ii) 6 Commerce Drive
Associates, (iii) Century Plaza Associates, (iv) C.W. Associates, (v) D.B.C.
Associates, (vi) Cali Building V Associates, (vii) 500 Columbia Turnpike
Associates, (viii) Chestnut Ridge Associates, (ix) Roseland II Limited
Partnership, (x) Grove Street Associates of Jersey City Limited Partnership,
(xi) 20 Commerce Drive Associates, (xii) Tenby Chase Apartments and (xiii)
Office Associates, Ltd.
"Redemption Rights" shall have the meaning set forth in Section 10.3(a)
hereof.
"Registration Statement" shall mean the Registration Statement No.
33-79892 (including the prospectus contained therein) heretofore filed by the
General Partner with the United States Securities and Exchange Commission, and
any amendments at any time made thereto (other than post-effective amendments),
pursuant to which the General Partner proposes to offer and sell certain of its
Common Stock.
"Regulations" shall mean the Income Tax Regulations promulgated under the
Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Regulatory Allocations" has the meaning set forth in Section 7.3(g) of
this Agreement.
"REIT" shall mean a real estate investment trust under Section 856 of the
Code.
- 10 -
<PAGE>
"REIT Requirements" shall mean any and all requirements that must be met
to qualify as a REIT under the Code and the Regulations.
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Common Stock is listed or admitted to trading is open for
the transaction of business or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, any day other than a Saturday, a
Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
"Unit Certificate" shall have the meaning set forth in Section 6.2 hereof.
ARTICLE 2
CONTINUATION OF THE PARTNERSHIP
2.1 Continuation. The Partners hereby continue the Partnership as a
limited partnership formed under and pursuant to the terms and provisions of the
Act, and the rights and obligations of the Partners shall be as provided therein
except as otherwise expressly provided in this Agreement. The Partners agree to
execute such certificates or documents and do such filings and recordings and
all other acts, including the filing or recording of an amendment to the
Certificate and any assumed name certificates in the appropriate offices in the
State of Delaware and any other applicable jurisdictions as may be required to
comply with applicable law. The Partners agree that immediately after the
admission of one Limited Partner, the Organizational Limited Partner shall be
deemed to have withdrawn from the Partnership.
2.2 Entire Agreement. Each and every other agreement or understanding,
oral or written, relating in any way to the formation or operation of the
Partnership including, but not limited to, the Original Agreement, is hereby
superseded in its entirety. From and after the execution of this Agreement, the
same shall constitute the only Agreement of Limited Partnership of the
Partnership except as the same may hereafter be amended pursuant to the
provisions hereof. This Agreement represents the entire agreement and
understanding of the parties hereto concerning the Partnership and their
relationship as Partners, and all prior or concurrent agreements,
understandings, representations and warranties in regard to the subject matter
hereof including, but not limited to, the Original Agreement, are and have been
merged herein.
- 11 -
<PAGE>
ARTICLE 3
NAME AND OFFICES
3.1 Name. The business of the Partnership shall be conducted under the
name of "Cali Realty, L.P.", or such other name as the General Partner may from
time to time designate upon notice to the Limited Partners.
3.2 Principal and Registered Offices. The principal place of business of
the Partnership shall be located at c/o the General Partner at 11 Commerce
Drive, Cranford, New Jersey 07016. The registered agent of the Partnership shall
be The Prentice-Hall Corporation System, Inc. The registered office of the
Partnership shall be 32 Loockerman Square, Suite L-100, Dover, Kent County,
Delaware 19901. The General Partner may from time to time designate another
registered agent or another location for the registered office or principal
place of business of the Partnership upon notice to the other Partners. The
Partnership may maintain offices at such other place or places within or outside
the State of Delaware as the General Partner deems advisable.
ARTICLE 4
PURPOSE
4.1 Purpose. The purpose and nature of the business to be conducted by the
Partnership is (i) to conduct any business that may be lawfully conducted by a
limited partnership organized pursuant to the Act; provided, however, that such
business shall be limited to and conducted in such a manner as to permit the
General Partner at all times to be classified as a REIT for federal income tax
purposes, unless the General Partner has determined to cease to qualify as a
REIT, (ii) to enter into any partnership, joint venture or other similar
arrangements to engage in any of the foregoing or the ownership of interests in
any entity engaged in any of the foregoing and (iii) to do anything necessary or
incidental to the foregoing. In connection with the foregoing, and without
limiting the General Partner's right in its sole discretion to cease qualifying
as a REIT, the Partners acknowledge that the General Partner's status as a REIT
inures to the benefit of all of the Partners and not solely the General Partner.
4.2 Powers. The Partnership is empowered to do any and all acts and things
necessary, appropriate, proper, advisable,
- 12 -
<PAGE>
incidental to or convenient for the furtherance and accomplishment of the
purposes and business described herein and for the protection and benefit of the
Partnership; provided, that the Partnership shall not take, or shall refrain
from taking, any action which, in the judgment of the General Partner, in its
sole and absolute discretion, (i) could adversely affect the ability of the
General Partner to continue to qualify as a REIT, (ii) could subject the General
Partner to any additional taxes under Section 857 or Section 4981 of the Code or
any successor or newly enacted provisions of the Code imposing other additional
taxes or penalties on the General Partner, or (iii) could violate any law or
regulation of any governmental body or agency having jurisdiction over the
General Partner or its securities, unless any such action (or inaction) under
(i), (ii) or (iii) shall have been specifically consented to by the General
Partner in writing.
ARTICLE 5
TERM AND FISCAL YEAR
5.1 Term. The term of the Partnership commenced on May 31, 1994, the date
the Certificate was filed in the appropriate offices in the State of Delaware,
and shall continue until terminated pursuant to the provisions of Article 14 of
this Agreement.
5.2 Fiscal Year. The first fiscal year of the Partnership shall terminate
on December 31, 1994, and succeeding fiscal years shall terminate on December 31
of each year thereafter, or such other date as the Partnership shall terminate
as herein provided.
ARTICLE 6
CAPITAL CONTRIBUTIONS, ADDITIONAL FUNDING AND CAPITAL ACCOUNTS
6.1 Capital Contributions of the General Partner. Upon Completion of the
Offering, the General Partner shall contribute the proceeds of the Offering to
the Partnership, which proceeds will be net of the underwriter's discount and
other expenses. Notwithstanding the exact amount of such net proceeds which are
contributed to the Partnership, the General Partner shall be deemed to have made
a Capital Contribution to the Partnership in the amount of the gross proceeds of
the Offering and the Partnership shall be deemed simultaneously to have
reimbursed the General Partner pursuant to Section 9.8(c) hereof for the amount
of any such underwriter's discount or other expenses paid out of the gross
proceeds of the Offering. Notwithstanding the immediately preceding sentence,
the General Partner shall have
- 13 -
<PAGE>
the right, in its sole and absolute discretion, to treat the contribution to the
Partnership by the General Partner of any proceeds from the Offering in a manner
other than that described in the immediately preceding sentence if, upon the
advice of counsel to the General Partner and/or the Partnership, such
alternative treatment will provide a more favorable federal and/or state tax
consequence to the General Partner and/or the Partnership. The General Partner
shall initially be issued and thereafter shall own Partnership Units in the
amount set forth opposite its name on Exhibit A, which number of Partnership
Units shall be adjusted on such Exhibit A from time to time by the General
Partner to the extent necessary to reflect accurately issuances, exchanges,
redemptions, Capital Contributions, or similar events having an effect on a
Partner's Partnership Units. The Partners hereby acknowledge and agree that the
aggregate initial number of Partnership Units to be issued to the General
Partner shall be exactly equal to the number of shares of Common Stock issued
and outstanding immediately after the Completion of the Offering. Upon any
subsequent sales of shares of Common Stock pursuant to the exercise of the
over-allotment option in connection with the Offering, the General Partner
shall, subject to and in accordance with the terms and conditions of this
Section 6.1, contribute the proceeds of such subsequent sale to the Partnership,
and shall be issued additional Partnership Units in an amount exactly equal to
the number of shares of Common Stock subsequently sold in connection with the
Offering.
6.2 Capital Contributions of the Limited Partners. Concurrent with the
execution of this Agreement, each Limited Partner, pursuant to one or more
Partnership Interests Exchange Agreements, shall contribute to the Partnership,
directly or indirectly, as its initial Capital Contribution, all of such Limited
Partner's right, title and interest in and to the Property Partnerships. Each
Limited Partner shall initially be issued and thereafter shall own Partnership
Units in the amount set forth opposite such Limited Partner's name on Exhibit A,
which number of Partnership Units on such Exhibit A shall be adjusted from time
to time by the General Partner to the extent necessary to reflect accurately
exchanges, redemptions, Capital Contributions, or similar events having an
effect on such Partner's Partnership Units. The Partnership Units issued to each
Limited Partner shall be evidenced by the issuance of a certificate (the "Unit
Certificate") in substantially the form of Exhibit B attached hereto, which Unit
Certificate shall bear the following legend:
"THE UNITS REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION
- 14 -
<PAGE>
COMPLIES WITH THE PROVISIONS OF THE AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP DATED AS OF JANUARY 17, 1997 (A COPY OF WHICH IS ON
FILE WITH THE PARTNERSHIP). EXCEPT AS OTHERWISE PROVIDED IN SUCH
AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION OF THE UNITS REPRESENTED BY THIS CERTIFICATE MAY BE MADE
EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR (B) IF THE PARTNERSHIP
HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER
THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT AND THE
RULES AND REGULATIONS IN EFFECT THEREUNDER."
On the date of admission of one or more Limited Partners to the Partnership, the
Organizational Limited Partner shall be entitled to a return of his Capital
Contribution, and shall be deemed to have withdrawn from the Partnership.
6.3 General Partner Option to Contribute Additional Capital. If the
Partnership requires funds at any time or from time to time in excess of funds
available to the Partnership through borrowings and prior or additional Capital
Contributions, the General Partner may, but shall not be required to, borrow
such funds from a financial institution or other lender or through public debt
offerings and lend such funds to the Partnership on the same terms and
conditions as are applicable to the General Partner. If, notwithstanding the
foregoing, the Partnership requires funds for any proper Partnership purpose in
excess of any other funds anticipated by the General Partner to be available to
the Partnership (including through borrowings and prior Capital Contributions),
or if the General Partner concludes that borrowings are inappropriate, the
General Partner may, but shall not be required to, raise such additional funds
pursuant to the issuance of shares of its Common Stock (any such issuance which
is made for the purpose of providing additional funds to the Partnership shall
be referred to herein as an "Additional Issuance"). In the event any such
Additional Issuance is consummated, then (i) the General Partner shall
contribute the net amount of cash raised pursuant to such Additional Issuance to
the capital of the Partnership and (ii) the Partnership shall issue additional
Partnership Units ("Additional Partnership Units") to the General Partner, on
the date upon which such funds are contributed to the Partnership, in an amount
equal to that number of Partnership Units which, if such Additional Partnership
Units were redeemed as of their date of issuance by the General Partner for
shares of Common Stock pursuant to Section 10.3 hereof, would result in the
General Partner receiving that number of shares of Common Stock equal to the
number of shares of Common Stock that were issued pursuant to such Additional
Issuance. Notwith-
- 15 -
<PAGE>
standing anything contained herein to the contrary, if the proceeds actually
received and thereafter contributed to the Partnership by the General Partner
pursuant to any Additional Issuance as described in this Section 6.3 are less
than the gross proceeds of such issuance as a result of any underwriter's
discount or other expenses paid or incurred in connection with such issuance,
then the General Partner shall be deemed to have made a Capital Contribution to
the Partnership in the amount of the gross proceeds of such issuance and the
Partnership shall be deemed simultaneously to have reimbursed the General
Partner pursuant to Section 9.8(c) hereof for the amount of such underwriter's
discount or other expenses. In addition, in the event that the General Partner
shall issue shares of Common Stock (and/or pay cash out of the net proceeds of
any Additional Issuance) in connection with any subsequent merger, consolidation
or other acquisition, the General Partner may contribute the shares of stock,
assets and/or other consideration received by the General Partner in connection
therewith to the capital of the Partnership in exchange for Additional
Partnership Units in an amount equal to that number of Partnership Units which,
if such Additional Partnership Units were redeemed as of their date of issuance
by the General Partner for shares of Common Stock pursuant to Section 10.3
hereof, would result in the General Partner receiving that number of shares of
Common Stock equal to the number of shares of Common Stock that were issued in
connection with such merger, consolidation or other acquisition and/or such
Additional Issuance. Notwithstanding the foregoing sentence, the General Partner
shall have the right, in its sole discretion, to treat a contribution to the
capital of the Partnership in a manner other than as described above if, upon
the advice of counsel to the General Partner and/or the Partnership, such
alternative treatment will provide a more favorable federal and/or state tax
consequence to the General Partner and/or the Partnership.
6.4 General Partner Option to Issue Additional Partnership Units to
Limited Partners.
(a) Issuance of Additional Partnership Units. At any time after the
date hereof without the consent of any Partner, but subject to the provisions of
Section 13.1 hereof, the General Partner may, upon its determination, which
shall be made in its sole and absolute discretion, that the issuance of
Additional Partnership Units to new or existing limited partners is in the best
commercial interests of the Partnership, cause the Partnership to issue
Additional Partnership Units to and admit as a limited partner in the
Partnership, any Person (an "Additional Limited Partner" herein) in exchange for
the contribution by such Person of cash and/or property desirable to further the
purposes of the Partnership under Article 4 hereof. In the event that
- 16 -
<PAGE>
Additional Partnership Units are issued by the Partnership pursuant to this
Section 6.4, the amount of such Partnership Units issued to each Additional
Limited Partner shall, unless otherwise determined by the General Partner in the
exercise of its sole discretion but subject to its fiduciary duty to all Limited
Partners (i) be fixed by agreement between the General Partner and such
Additional Limited Partner in the General Partner's sole discretion or (ii) be
equal to that number of Partnership Units which, if such Additional Partnership
Units were redeemed as of their date of issuance by such Additional Limited
Partner pursuant to Section 10.3 hereof, would result in such Additional Limited
Partner receiving that number of shares of Common Stock equal to (x) the Agreed
Value of any property (as determined by the General Partner, in its sole and
absolute discretion), plus the amount of any cash contributed by the Additional
Limited Partner, as of the date of contribution to the Partnership divided by
(y) the Current Per Share Market Price (computed as of the Trading Day
immediately preceding the date of contribution to the Partnership or such other
date or average of Trading Days as the General Partner may agree with such
Additional Limited Partner in the exercise of its sole discretion). In addition,
the General Partner is hereby authorized to cause the Partnership from time to
time to issue to the Partners (including the General Partner) or other Persons
additional Partnership Units or such other Partnership Interests in one or more
classes, or one or more series of such classes, with such designations,
preferences and relative, participating, optional or other special rights,
powers and duties, including rights, powers and duties which may be senior, pari
passu or junior to OP Units, all as shall be determined by the General Partner
in its sole and absolute discretion subject to Delaware law, including, without
limitation, (i) the allocations of items of Partnership income, gain, loss,
deduction and credit to each such class or series of Partnership Interests; (ii)
the right of each such class or series of Partnership Interests to share in
Partnership distributions; and (iii) the rights of each such class or series of
Partnership Interests upon dissolution and liquidation of the Partnership;
provided that no such additional Partnership Units or other Partnership
Interests shall be issued to the General Partner unless either (A)(1) the
additional Partnership Interests are issued in connection with the issuance of
shares of Common Stock or other shares by the General Partner, which shares have
designations, preferences and other rights such that the economic interests
attributed to such shares are substantially similar to the designations,
preferences and other rights of the additional Partnership Interests issued to
the General Partner in accordance with this Section 6.4, and (2) the General
Partner shall make a Capital Contribution to the Partnership in an amount equal
to the proceeds raised in connection with the issuance of such shares of the
General
- 17 -
<PAGE>
Partner, or (B) the additional Partnership Units are issued to all the Partners
in proportion to their respective Percentage Interests. Any Additional Limited
Partner shall be issued a Unit Certificate representing the amount of
Partnership Units issued to such Additional Limited Partner and, in the event
the General Partner issues Partnership Units other than OP Units, indicating the
class, terms, preferences and other restrictions or rights of such Partnership
Unit. The General Partner shall be authorized on behalf of each of the Partners
to amend this Agreement to reflect the issuance of Additional Partnership Units
(including, without limitation, the issuance of new classes of Partnership
Units) and/or the admission of any Additional Limited Partner(s) in accordance
with the provisions of this Section 6.4, and the General Partner shall promptly
deliver a copy of such amendment (which, in the event that new classes of
Partnership Units are issued, shall contain the terms of such new classes of
Partnership Units) to each Limited Partner. Without limiting the foregoing, the
General Partner is expressly authorized to cause the Partnership to issue
Partnership Units for less than fair market value, so long as the General
Partner concludes in good faith that such issuance is in the interest of the
General Partner and the Partnership (for example, and not by way of limitation,
the issuance of Partnership Units pursuant to an employee purchase plan
providing for employee purchases of Partnership Units at a discount from fair
market value or employee options that have an exercise price that is less than
the fair market value of the Partnership Units, either at the time of issuance
or at the time of exercise).
(b) Issuance of New Securities. After the date hereof, the General
Partner shall not issue any additional shares of Common Stock (other than shares
of Common Stock issued pursuant to Section 10.3 hereof), or rights, options,
warrants or convertible or exchangeable securities containing the right to
subscribe for or purchase shares of Common Stock (collectively, "New
Securities"), other than to all holders of shares of Common Stock, unless (i)
the General Partner shall cause the Partnership to issue to the General Partner
Partnership Interests or rights, options, warrants or convertible or
exchangeable securities of the Partnership having designations, preferences and
other rights, all such that the economic interests are substantially similar to
those of the New Securities, and (ii) the General Partner contributes to the
Partnership the proceeds from the issuance of such New Securities and from the
exercise of rights contained in such New Securities. Without limiting the
foregoing, the General Partner is expressly authorized to issue New Securities
for less than fair market value, and the General Partner is expressly authorized
to cause the Partnership to issue to the General Partner corresponding
Partnership Interests, so long as (x) the General Partner concludes in good
faith that such
- 18 -
<PAGE>
issuance is in the interest of the General Partner and the Partnership (for
example, and not by way of limitation, the issuance of shares of Common Stock
and corresponding Units pursuant to an employee stock purchase plan providing
for employee purchases of shares of Common Stock at a discount from fair market
value or employee stock options that have an exercise price that is less than
the fair market value of the shares of Common Stock, either at the time of
issuance or at the time of exercise), and (y) the General Partner contributes
all proceeds from such issuance and exercise to the Partnership.
6.5 Capital Accounts. A separate capital account (a "Capital Account")
shall be maintained for each Partner in accordance with the Code and the
Regulations promulgated thereunder including, but not limited to, the rules
regarding the maintenance of partners' Capital Accounts set forth in Regulation
Section 1.704-1. Subject to the immediately preceding sentence, there shall be
credited to each Partner's Capital Account: (i) the amount of money contributed
by the Partner to the Partnership (subject, however, in the case of Additional
Issuances of Common Stock, to the specific provisions of Section 6.3 hereof
regarding the amount of the Capital Contribution by the General Partner under
such circumstances), (ii) the Gross Asset Value of any property contributed by
the Partner to the Partnership, (iii) the amount of any Partnership liabilities
assumed by such Partner or which are secured by any property distributed to such
Partner and (iv) the Partner's share of income or gain (or items thereof),
including income and gain exempt from tax. There shall be charged against each
Partner's Capital Account: (w) the amount of money distributed to the Partner by
the Partnership, (x) the Gross Asset Value of any property distributed to the
Partner by the Partnership, (y) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership and (z) the Partner's share of loss and
deduction (or items thereof). To the extent a Partner's Capital Account is
greater than zero, such excess is hereinafter referred to as a "positive
balance". To the extent a Partner's Capital Account is less than zero, said
amount is hereinafter referred to as a "deficit balance".
6.6 Limited Liability. Notwithstanding anything in this Agreement to the
contrary, the personal liability of a Limited Partner arising out of or in any
manner relating to the Partnership shall be limited to and shall not exceed such
Limited Partner's Capital Contribution made or required to be made pursuant to
this Agreement. No Limited Partner shall have any personal liability for
liabilities or obligations of the Partnership, except to the extent of its
Capital Contribution, as aforesaid.
- 19 -
<PAGE>
6.7 Return of Capital. Except as otherwise provided herein, (i) no Partner
shall be required to make any further or additional contributions to the capital
of the Partnership or to lend or advance funds to the Partnership for any
purpose and (ii) no Partner shall be entitled to the return of its capital,
except to the extent, if any, that distributions are made or deemed to be made
to such Partner otherwise than out of Profits pursuant to this Agreement.
6.8 No Interest on Capital Contributions. No interest or additional share
of Profits shall be paid or credited to the Partners on their Capital Accounts,
or on any undistributed Profits or funds left on deposit with the Partnership;
provided, however, that nothing contained herein shall be construed to prevent
or prohibit the payment of interest on account of loans made by the Partners to
the Partnership. Any loans made to the Partnership by a Partner shall not
increase its Capital Contribution or interest in the Profits, Losses or Net Cash
Flow of the Partnership, but shall be a debt due from the Partnership and repaid
accordingly.
6.9 No Third Party Beneficiary. No creditor or other third party having
dealings with the Partnership shall have the right to enforce the right or
obligation of any Partner to make Capital Contributions or loans or to pursue
any other right or remedy hereunder or at law or in equity, it being understood
and agreed among the parties hereto that the provisions of this Agreement shall
be solely for the benefit of, and may be enforced solely by, the parties hereto
and their respective successors and assigns. None of the rights or obligations
of the Partners herein set forth to make Capital Contributions or loans to the
Partnership shall be deemed an asset of the Partnership for any purpose by any
creditor or other third party, nor may such rights or obligations be sold,
transferred or assigned by the Partnership or pledged or encumbered by the
Partnership to secure any debt or other obligation of the Partnership or of any
of the Partners.
6.10 Common Stock Option Plans. The Partners hereby acknowledge that prior
to the Offering the General Partner has adopted, and the Partners hereby
acknowledge and agree that from and after the Offering the General Partner may
adopt, without the consent of any Limited Partner, one or more stock option or
incentive plans ("Stock Plans") pursuant to which officers, directors, trustees
and/or employees of the General Partner, the Partnership or any Affiliate of
either of them may acquire shares of Common Stock. On each date on which the
General Partner issues any shares of Common Stock to a person pursuant to a
Stock Plan (i) the consideration paid for each such share of Common Stock shall,
as soon as received by the General Partner, be
- 20 -
<PAGE>
contributed to the capital of the Partnership and (ii) the General Partner shall
be issued Partnership Units in an amount equal to that number of Partnership
Units which, if such Partnership Units were redeemed as of their date of
issuance by the General Partner for shares of Common Stock pursuant to Section
10.3 hereof, would result in the General Partner receiving that number of shares
of Common Stock which are being issued to any such person pursuant to the Stock
Plan. For purposes of this Section 6.10 only, shares of Common Stock issued
subject to forfeiture or other similar restrictions shall be deemed issued upon
the lapse of such restrictions. Notwithstanding anything herein to the contrary,
the mere grant of options to purchase shares of Common Stock pursuant to any
Stock Plan shall not constitute the grant or issuance of shares of Common Stock
for purposes of this Section 6.10.
ARTICLE 7
ALLOCATION OF PROFITS AND LOSSES
7.1 General Allocation of Profits and Losses. Except as otherwise provided
in this Article 7, after giving effect to any and all special allocations set
forth in Sections 7.3 and 7.4 below, all Profits and Losses of the Partnership
(including all items of income and expense entering into the determination of
such Profits and Losses), as finally determined by the Accountants for Federal
income tax purposes for each fiscal year of the Partnership, shall be allocated
to and among the Partners in accordance with their respective Percentage
Interests.
7.2 Allocations with Respect to Transferred Interests. Unless otherwise
required by the Code and/or the Regulations or as agreed to by the General
Partner, in its sole and absolute discretion, any Profits or Losses allocable to
an additional Partnership Interest issued during any year or any fiscal quarter
or to a Partnership Interest which has been transferred during any year shall be
allocated among the Persons who were holders of such Partnership Interest during
such year in the manner described in Section 13.3(c) below.
7.3 Regulatory Allocations.
(a) Minimum Gain Chargeback. Notwithstanding any other provision of
this Agreement (except as provided in Section 7.3(b) below), if there is a
net decrease in Minimum Gain for a Partnership taxable year, each Partner
shall be allocated, before any other allocation of Partnership items for
such taxable year, items of gross income and gain for such year (and, if
necessary, for subsequent years) in
- 21 -
<PAGE>
proportion to, and to the extent of, the amount of such Partner's share of
the net decrease in Minimum Gain during such year. The income allocated
pursuant to this Section 7.3(a) in any taxable year shall consist first of
gains recognized from the disposition of property subject to one or more
nonrecourse liabilities of the Partnership, and any remainder shall
consist of a pro rata portion of other items of income or gain of the
Partnership.
(b) Exceptions to Section 7.3(a). The allocation otherwise required
pursuant to Section 7.3(a) shall not apply to a Partner to the extent
that: (a) such Partner's share of the net decrease in Minimum Gain is
caused by a guarantee, refinancing or other change in the instrument
evidencing a nonrecourse debt of the Partnership which causes such debt to
become a partially or wholly recourse debt or a Partner Nonrecourse Debt,
and such Partner bears the economic risk of loss (within the meaning of
Treasury Regulation Section 1.752-2) for such changed debt; (b) such
Partner's share of the net decrease in Minimum Gain results from the
repayment of a nonrecourse liability of the Partnership, which repayment
is made using funds contributed by such Partner to the capital of the
Partnership; (iii) the IRS, pursuant to Treasury Regulation Section
1.704-2(f)(4), waives the requirement of such allocation in response to a
request for such waiver made by the General Partner on behalf of the
Partnership (which request the General Partner may or may not make, in its
sole discretion, if it determines that the Partnership would be eligible
therefor); or (iv) additional exceptions to the requirement of such
allocation are established by revenue rulings issued by the IRS pursuant
to Treasury Regulation Section 1.704-2(f)(5), which exceptions apply to
such Partner, as determined by the General Partner in its sole discretion.
(c) Qualified Income Offset. Notwithstanding any other provision of
this Agreement, if a Partner unexpectedly receives an adjustment,
allocation or distribution described in Regulation Section
1.704-1(b)(2)(ii)(d)(4),(5) or (6) that causes or increases an Excess
Deficit Capital Account Balance with respect to such Partner, items of
Partnership gross income and gain shall be specially allocated to such
Partner in an amount and manner sufficient to eliminate such Excess
Deficit Capital Account Balance as quickly as possible.
(d) Gross Income Allocation. If at the end of any Partnership
taxable year, a Partner has an Excess Deficit Capital Account Balance,
such Partner shall be specially allocated items of Partnership income or
gain in an amount
- 22 -
<PAGE>
and manner sufficient to eliminate such Excess Deficit Capital Account
Balance as quickly as possible.
(e) Partner Nonrecourse Debt. Notwithstanding any other provision of
this Agreement, any item of Partnership Loss, deduction or expenditures
described in Code Section 705(a)(2)(B) that is attributable to a Partner
Nonrecourse Debt shall be allocated to those Partners that bear the
economic risk of loss for such Partner Nonrecourse Debt, and among such
Partners in accordance with the ratios in which they share such economic
risk, determined in accordance with Treasury Regulation Section
1.704-2(i). If there is a net decrease for a Partnership taxable year in
any Partner Nonrecourse Debt Minimum Gain of the Partnership, each Partner
with a share of such Partner Nonrecourse Debt Minimum Gain as of the
beginning of such year shall be allocated items of gross income and gain
in the manner and to the extent provided in Treasury Regulation Section
1.704-2(i)(4).
(f) Interpretation. The foregoing provisions of this Section 7.3 are
intended to comply with Treasury Regulation Sections 1.704-1(b) and
1.704-2 and shall be interpreted consistently with this intention. Any
terms used in such provisions that are not specifically defined in this
Agreement shall have the meaning, if any, given such terms in the
Regulations cited above.
(g) Curative Allocations. If any allocation of gain, income, loss,
expense or any other item is made pursuant to Section 7.3(a), 7.3(c),
7.3(d) or 7.3(e) of this Agreement (the "Regulatory Allocations") with
respect to one or more Partners (the "Deficit Partners"), then the balance
of such items for the current and all subsequent fiscal years shall be
allocated among the Partners other than the Deficit Partners as if such
items were allocated among all the Partners (including the Deficit
Partners) without regard to this Section 7.3, until the amount of such
items that would have been allocated to the Deficit Partners but for the
Regulatory Allocations equal the amount allocated to the Deficit Partners
pursuant to the Regulatory Allocations.
7.4 Special Allocations with Respect to Contributed or Revalued Property.
Notwithstanding anything contained herein to the contrary, taxable income, gain,
loss and deduction with respect to any Partnership property that is contributed
to the Partnership by a Partner shall be shared among the Partners for income
tax purposes pursuant to Regulations promulgated under Section 704(c) of the
Code, so as to take into account the variation, if any, between the basis of the
property to the
- 23 -
<PAGE>
Partnership and its initial Gross Asset Value. With respect to Partnership
property that is initially contributed to the Partnership upon its formation,
such variation between basis and initial Gross Asset Value shall be taken into
account under the "traditional method" as described in Treasury Regulation
Section 1.704-3(b), unless otherwise determined by the General Partner and the
contributing Partner. With respect to properties subsequently contributed to the
Partnership, the Partnership shall account for such variation under any method
approved under Section 704(c) of the Code and the applicable regulations as
chosen by the General Partner. In the event the Gross Asset Value of any
Partnership asset is adjusted pursuant to subparagraph (b) of the definition of
Gross Asset Value (as provided in Article 1 of this Agreement), subsequent
allocations of tax items with respect to such asset shall take account of the
variation, if any, between the adjusted basis of such asset and its Gross Asset
Value in the same manner as under Section 704(c) of the Code and the applicable
regulations.
7.5 Allocations with Respect to Partnership Units other than OP Units. In
the event the General Partner issues additional classes of Partnership Units
other than OP Units to Limited Partners, then the General Partner shall
determine, in its sole discretion, the Profits and Losses attributable to each
class and shall allocate to Profits and Losses of each class of Partnership
Units among the Partners in such class in proportion to their respective
Percentage Interests in such class, after giving effect to any and all special
allocations set forth in Sections 7.3 and 7.4 above.
ARTICLE 8
DISTRIBUTIONS
8.1 Distribution of Net Cash Flow. Net Cash Flow of the Partnership, if
any, shall be distributed to and among the Partners as follows:
(a) If such Net Cash Flow has not arisen pursuant to a Liquidation
of the Partnership, such Net Cash Flow shall be distributed to and among
the Partners in accordance with their respective Percentage Interests; or
(b) If such Net Cash Flow has arisen pursuant to a Liquidation of
the Partnership, such Net Cash Flow shall be distributed to and among the
Partners having positive balances in their Capital Accounts (after any and
all allocations of Profits and Losses and prior distributions
- 24 -
<PAGE>
are reflected in such Capital Accounts), in proportion to and to the
extent of such positive balances.
Net Cash Flow shall be distributed to the Partners in such amounts and at such
intervals as the General Partner, in its sole discretion, may determine, but no
less frequently than quarterly. With respect to each and every distribution of
Net Cash Flow to the Partners hereunder, the General Partner shall distribute
such Net Cash Flow only to those Partners who are Partners on the Partnership
Record Date and whose Partnership Units were outstanding during the period to
which such distribution relates and, with respect to those Partners who were
issued additional Partnership Units during such period, the General Partner
shall distribute Net Cash Flow (i) on a pro-rated basis based upon the number of
days during such period that such Partners held such additional Partnership
Units or (ii) on such other reasonable basis as determined by the General
Partner in its sole discretion; provided, however, in no event may a Partner
receive a distribution of Net Cash Flow with respect to any particular
Partnership Unit if such Partner is entitled to receive a distribution out of
such Net Cash Flow with respect to one or more shares of Common Stock for which
such Partnership Unit has been redeemed. Notwithstanding the foregoing, the
General Partner shall take such reasonable efforts, as determined by it in its
sole and absolute discretion and consistent with its qualification as a REIT, to
cause the Partnership to distribute sufficient amounts to enable the General
Partner to pay stockholder dividends that will (i) satisfy the REIT Requirements
and (ii) avoid any federal income or excise tax liability of the General
Partner.
8.2 Distributions in Kind. No right is given to any Partner to demand and
receive property or cash. The General Partner may determine, in its sole and
absolute discretion, to make a distribution in kind to the Partners of
Partnership assets, and such assets shall be distributed in such a fashion as to
ensure that the fair market value of such assets is distributed and allocated in
accordance with Section 8.1 hereof.
8.3 Withholding. Each Limited Partner hereby authorizes the Partnership to
withhold from or pay on behalf of or with respect to such Limited Partner any
amount of federal, state, local or foreign taxes that the General Partner
determines or reasonably believes that the Partnership is required to withhold
or pay with respect to any amount distributable or allocable to such Limited
Partner pursuant to this Agreement, including, without limitation, any taxes
required to be withheld or paid by the Partnership pursuant to Code Sections
1441, 1442, 1445 or 1446. Any and all amounts withheld pursuant to this Section
8.3 with respect to any allocation, payment or distribution to any
- 25 -
<PAGE>
Partner hereunder shall be treated as amounts distributed to such Partner
pursuant to Section 8.1 hereof for all purposes under this Agreement. If any
amount is withheld by the Partnership pursuant to this Section 8.3 with respect
to a particular Partner and such amount would not have been distributed to such
Partner pursuant to Section 8.1 hereof at any time on or before the date it is
withheld, then such Partner shall contribute to the capital of the Partnership
an amount equal to the amount so withheld as soon as practicable after the
delivery by the General Partner to such Partner of a notice requesting such
contribution to the Partnership. The General Partner, on behalf of the
Partnership, shall have the right to offset any obligation of a Partner to
contribute additional funds to the Partnership pursuant to the immediately
preceding sentence of this Section 8.3 against any future distributions due to
such Partner under Section 8.1 hereof.
8.4 Distributions with Respect to Partnership Units other than OP Units.
Notwithstanding the foregoing provisions of this Article 8, in the event the
General Partner issues additional classes of Partnership Units other than OP
Units to Limited Partners, then the General Partner shall determine, in its sole
discretion, the amount of distributions of Net Cash Flow attributable to each
class and shall distribute such Net Cash Flow to each class of Partnership Units
among the Partners in such class in proportion to their respective Percentage
Interests in such class or otherwise required pursuant to the terms of such
Partner's Unit Certificates.
ARTICLE 9
MANAGEMENT
9.1 Management of Partnership Affairs. Except as otherwise specifically
provided in this Agreement, the General Partner shall have full, exclusive and
complete responsibility and discretion in the management and control of the
business and affairs of the Partnership and shall make all decisions affecting
the Partnership's business and affairs. Subject to the foregoing, the General
Partner shall have all the rights, powers and obligations of a general partner
as provided in the Act, and, except as otherwise provided, any action taken by
the General Partner (in its capacity as such) shall constitute the act of and
serve to legally bind the Partnership. Persons dealing with the Partnership
shall be entitled to rely conclusively on the power and authority of the General
Partner as set forth in this Agreement.
- 26 -
<PAGE>
9.2 Powers and Authorities of the General Partner. Except as otherwise
specifically provided in this Agreement, and subject to Section 9.3 hereof, the
General Partner is hereby granted the right, power and authority to do on behalf
of the Partnership all things which, in its best business judgment, are
necessary, proper or desirable to carry out its duties and responsibilities,
including but not limited to, the right, power and authority:
(a) To manage, control, invest, reinvest, acquire by purchase, lease
or otherwise, develop, expand, sell, contract to purchase or sell, grant,
obtain or exercise options to purchase, options to sell or conversion
rights, assign, transfer, convey, deliver, endorse, exchange, pledge,
mortgage, abandon, improve, repair, maintain, insure, lease for any term
and otherwise deal with any and all property of whatsoever kind and
nature, and wheresoever situated, in furtherance of the purposes of the
Partnership;
(b) To acquire, directly or indirectly, interests in real estate of
any kind and of any type, and any and all kinds of interests therein, and
to determine the manner in which title thereto is to be held; to manage,
insure against loss, protect and subdivide any of the real estate,
interests therein or parts thereof; to improve, develop or redevelop and
expand any such real estate; to participate in the ownership and
development of any property; to dedicate for public use, to vacate any
subdivisions or parts thereof, to resubdivide, to contract to sell, to
grant options to purchase or lease, to sell on any terms; to convey, to
mortgage, pledge or otherwise encumber said property, or any part thereof;
to lease said property or any part thereof from time to time, upon any
terms and for any period of time, and to renew or extend leases, to amend,
change or modify the terms and provisions of any leases and to grant
options to lease and options to renew leases and options to purchase; to
partition or to exchange said real property, or any part thereof, for
other real or personal property; to grant easements or charges of any
kind; to release, convey or assign any right, title or interest in or
about or easement appurtenant to said property or any part thereof; to
construct and reconstruct, remodel, alter, repair, add to or take from
buildings on said premises; to insure any Person having an interest in or
responsibility for the care, management or repair of such property; to
direct the trustee of any land trust to mortgage, lease, convey or
contract to convey the real estate held in such land trust or to execute
and deliver deeds, mortgages, notes, and any and all documents pertaining
to the property subject to such land trust or in any matter regarding such
trust; to execute
- 27 -
<PAGE>
assignments of all or any part of the beneficial interest in such land
trust;
(c) To employ, engage or contract with or dismiss from employment or
engagement Persons to the extent deemed necessary by the General Partner
for the operation and management of the Partnership business, including
but not limited to, contractors, subcontractors, engineers, architects,
surveyors, mechanics, consultants, accountants, attorneys, insurance
brokers, real estate brokers and others;
(d) To enter into contracts on behalf of the Partnership;
(e) To borrow money, procure loans and advances from any Person for
Partnership purposes, and to apply for and secure, from any Person, credit
or accommodations; to contract liabilities and obligations, direct or
contingent and of every kind and nature with or without security; and to
repay, discharge, settle, adjust, compromise or liquidate any such loan,
advance, credit, obligation or liability;
(f) To pledge, hypothecate, mortgage, assign, deposit, deliver,
enter into sale and leaseback arrangements or otherwise give as security
or as additional or substitute security, or for sale or other disposition
any and all Partnership property, tangible or intangible, including, but
not limited to, real estate and beneficial interests in land trusts, and
to make substitutions thereof, and to receive any proceeds thereof upon
the release or surrender thereof; to sign, execute and deliver any and all
assignments, deeds and other contracts and instruments in writing; to
authorize, give, make, procure, accept and receive moneys, payments,
property, notices, demands, vouchers, receipts, releases, compromises and
adjustments; to waive notices, demands, protests and authorize and execute
waivers of every kind and nature; to enter into, make, execute, deliver
and receive written agreements, undertakings and instruments of every kind
and nature; to give oral instructions and make oral agreements; and
generally to do any and all other acts and things incidental to any of the
foregoing or with reference to any dealings or transactions which any
attorney may deem necessary, proper or advisable;
(g) To acquire and enter into any contract of insurance which the
General Partner deems necessary or appropriate for the protection of the
Partnership, for the conservation of the Partnership's assets or for any
purpose convenient or beneficial to the Partnership;
- 28 -
<PAGE>
(h) To conduct any and all banking transactions on behalf of the
Partnership; to adjust and settle checking, savings, and other accounts
with such institutions as the General Partner shall deem appropriate; to
draw, sign, execute, accept, endorse, guarantee, deliver, receive and pay
any checks, drafts, bills of exchange, acceptances, notes, obligations,
undertakings and other instruments for or relating to the payment of money
in, into, or from any account in the Partnership's name; to execute,
procure, consent to and authorize extensions and renewals of the same; to
make deposits and withdraw the same and to negotiate or discount
commercial paper, acceptances, negotiable instruments, bills of exchange
and dollar drafts;
(i) To demand, sue for, receive, and otherwise take steps to collect
or recover all debts, rents, proceeds, interests, dividends, goods,
chattels, income from property, damages and all other property, to which
the Partnership may be entitled or which are or may become due to the
Partnership from any Person; to commence, prosecute or enforce, or to
defend answer or oppose, contest and abandon all legal proceedings in
which the Partnership is or may hereafter be interested; and to settle,
compromise or submit to arbitration any accounts, debts, claims, disputes
and matters which may arise between the Partnership and any other Person
and to grant an extension of time for the payment or satisfaction thereof
on any terms, with or without security;
(j) To make arrangements for financing, including the taking of all
action deemed necessary or appropriate by the General Partner to cause any
approved loans to be closed;
(k) To take all reasonable measures necessary to insure compliance
by the Partnership with applicable arrangements, and other contractual
obligations and arrangements entered into by the Partnership from time to
including periodic reports as required to lenders and using all due
diligence to insure that the Partnership is in compliance with its
contractual obligations;
(l) To maintain the Partnership's books and records; and
(m) To prepare and deliver, or cause to be prepared and delivered by
the Partnership's Accountants, all financial and other reports with
respect to the operations of the Partnership, and preparation and filing
of all Federal and state tax returns and reports.
- 29 -
<PAGE>
Except as otherwise provided herein, to the extent the duties of the General
Partner require expenditures of funds to be paid to third parties, the General
Partner shall not have any obligations hereunder except to the extent that
Partnership funds are reasonably available to it for the performance of such
duties, and nothing herein contained shall be deemed to authorize or require the
General Partner, in its capacity as such, to expend its individual funds for
payment to third parties or to undertake any individual liability or obligation
on behalf of the Partnership.
9.3 Major Decisions.
The General Partner shall not, without the prior consent of holders
of at least eighty-five percent (85%) of the Partnership Units taken as a single
class, on behalf of the Partnership, undertake any of all following actions:
(a) Cause or permit the merger of the Partnership into any Person
pursuant to a transaction in which the Partnership is not the surviving
entity, or take any other action which may have the effect of the
foregoing;
(b) Dissolve, liquidate or wind-up the Partnership; or
(c) Convey or otherwise transfer all or substantially all of the
Partnership's assets in one or a series of transactions.
9.4 Restrictions on General Partner's Authority.
(a) The General Partner may not take any action in contravention of
this Agreement, including, without limitation:
(i) Take any action that would make it impossible to carry on
the ordinary business of the Partnership, except as otherwise provided in
this Agreement;
(ii) Admit a Person as a Partner, except as otherwise provided
in this Agreement;
(iii) Perform any act that would subject a Limited Partner to
liability as a general partner in any jurisdiction or any other liability
except as provided herein or under the Act; or
(iv) Enter into any contract, mortgage, loan or other
agreement that prohibits or restricts, or has the effect of prohibiting or
restricting, the ability of a
- 30 -
<PAGE>
Limited Partner to exercise its Redemption Rights in full, except with the
written consent of such Limited Partner.
(b) The General Partner may not, without the consent of all of the
Limited Partners, change its policy of holding its assets and conducting its
business solely through the Partnership.
9.5 Engagements by the Partnership. The General may engage, on behalf and
at the expense of the Partnership, such professional persons, firms or
corporations as the General Partner in its reasonable judgment shall deem
advisable for the conduct and operation of the business of the Partnership,
including, without limitation, brokers, mortgage bankers, lawyers, accountants,
architects, engineers, consultants, contractors and purveyors of other such
services for the Partnership on such terms and for such compensation or costs as
the General Partner, in its reasonable judgment, shall determine.
9.6 Engagement of Affiliates. The General Partner may, on behalf and at
the expense of the Partnership, engage the General Partner or a firm in which
the General Partner, a Limited Partner, or a Partner, officer, director,
stockholder or Affiliate of any of them, has an interest, to render services to
the Partnership and/or the assets of the Partnership, provided that the fees or
other compensation payable for such services are specifically authorized by the
terms of this Agreement or are comparable to those prevailing in arm's-length
transactions for similar services and are approved by the Board of Directors.
9.7 Liability of the General Partner. The General Partner and its
Affiliates, officers, directors, agents and employees shall not be liable,
responsible or accountable in damages or otherwise to the Partnership or any of
the Partners or their successors or assigns for any acts or omissions performed
or omitted within the scope of its authority as General Partner, or otherwise
conferred on the General Partner and such Affiliates, officers, directors,
agents and employees by this Agreement, provided that the General Partner or
such Affiliates, officers, directors, agents or employees shall act in good
faith and shall not be guilty of willful misconduct or gross negligence.
9.8 Reimbursement of Certain Expenses of the General Partner.
(a) Except as provided in this Section 9.8 and elsewhere in this
Agreement (including the provisions of Articles 7 and 8 regarding
distributions, payments and allocations to which it may be entitled), the
General
- 31 -
<PAGE>
Partner shall not be compensated for its services as general partner of
the Partnership.
(b) The General Partner shall be reimbursed on a monthly basis, or
such other basis as the General Partner may determine in its sole and
absolute discretion, for all expenses it incurs relating to the ownership
and operation of, or for the benefit of, the Partnership, including
without limitation, any expenses incurred by the General Partner in
connection with the management by the General Partner of any property
owned by any Property Partnership; provided, however, that the amount of
any such reimbursement shall be reduced by any interest earned by the
General Partner with respect to bank accounts or other instruments or
accounts held by it on behalf of the Partnership. The Limited Partners
acknowledge that the General Partner's sole business is the ownership of
interests in and operation of the Partnership and that all of the General
Partner's expenses are incurred for the benefit of the Partnership.
(c) The General Partner shall be deemed to be reimbursed in
accordance with the provisions of Sections 6.1 and 6.3 hereof for all
expenses it incurs relating to the Offering and any other offering and/or
issuance of Additional Partnership Units, Partnership Interests and/or
Common Stock as described in Sections 6.1 and 6.3 hereof.
9.9 Outside Activities of the General Partner. The General Partner shall
not directly or indirectly enter into or conduct any business, other than in
connection with the ownership, acquisition and disposition of Partnership
Interests as a General Partner and the management of the business of the
Partnership, and such activities as are incidental to same. The General Partner
shall not, directly or indirectly, participate in or otherwise acquire any
interest in any real or personal property, except its Partnership Interest as a
General Partner and as otherwise provided in this Agreement, and other than such
short-term liquid investments, bank accounts or similar instruments as it deems
necessary to carry out its responsibilities contemplated under this Agreement.
9.10 Operation in Accordance with REIT Requirements. The Partners
acknowledge and agree that the Partnership shall be operated in a manner that
will enable the General Partner to (i) satisfy the REIT Requirements and (ii)
avoid the imposition of any federal income or excise tax liability. The
Partnership shall avoid taking any action which would result in the General
Partner ceasing to satisfy the REIT Requirements or would result in the
imposition of any federal income or excise tax liability on the General Partner.
- 32 -
<PAGE>
9.11 Title Holder. To the extent allowable under applicable law, title to
all or any part of the properties of the Partnership may be held in the name of
the Partnership or any other individual, corporation, partnership, trust or
otherwise, 100% of the beneficial interest in which shall at all times be vested
in the Partnership. Any such title holder shall perform any and all of its
respective functions to the extent and upon such terms and conditions as may be
determined from time to time by the General Partner.
ARTICLE 10
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
10.1 No Participation in Management of Partnership; Rights of Limited
Partners to Certain Documents.
(a) The Limited Partners shall have such rights as are enumerated as
rights of limited partners under the Act. The Limited Partners, in such
capacity, shall not take part in, or interfere in any manner, with the
conduct or control of the Partnership's business and shall have no right
or authority to act for or bind the Partnership, said powers being vested
solely and exclusively in the General Partner. Except as specifically set
forth in this Agreement, the Limited Partners, in their capacities as
such, shall not have any right or power whatsoever to take any action with
respect to the conduct or control of the Partnership or its business
including, but not limited to, any right to vote on, or otherwise approve,
any matters or decisions, whether material, major or otherwise, in
connection with the business of the Partnership.
(b) In addition to any other rights provided in this Agreement or by
the Act, and except as limited by Section 10.1(c) below, each Limited
Partner shall have the right, for a purpose reasonably related to such
Limited Partner's interest as a limited partner in the Partnership, upon
written demand with a statement of the purpose of such demand and at such
Limited Partner's own expense:
(i) to obtain a copy of the most recent annual and quarterly
reports filed with the Securities and Exchange Commission by
the General Partner pursuant to the Securities Exchange Act of
1934, as amended, and each report sent to the stockholders of
the General Partner;
- 33 -
<PAGE>
(ii) to obtain a copy of the Partnership's federal, state and local
income tax returns for each fiscal year of the Partnership;
(iii) to obtain a current list of the name and last known business,
residence or mailing address of each Partner;
(iv) to obtain a copy of this Agreement and the Certificate and all
amendments thereto, together with executed copies of all
powers of attorney pursuant to which this Agreement, the
Certificate and all amendments thereto have been executed; and
(v) to obtain true and full information regarding the amount of
cash and a description and statement of any other property or
services contributed by each Partner and which each Partner
has agreed to contribute in the future, and the date on which
each became a Partner.
(c) Notwithstanding any other provisions of Section 10.1(b), the
General Partner may keep confidential from the Limited Partners, for such
period of time as the General Partner determines in its sole and absolute
discretion to be reasonable, any information that (i) the General Partner
believes to be in the nature of trade secrets or other information the
disclosure of which the General Partner in good faith believes is not in
the best interests of the Partnership or the General Partner or (ii) the
Partnership or the General Partner is required by law or by agreements
with unaffiliated third parties to keep confidential.
10.2 Withdrawal, Retirement, Death, Incompetency, Insolvency or
Dissolution of a Limited Partner. A Limited Partner shall have no right to
withdraw, retire or resign from the Partnership. The death, incompetency,
insolvency or dissolution of a Limited Partner shall not terminate the
Partnership. Upon the death of a Limited Partner, his or her executor,
administrator or successor in interest shall have all of the rights and duties
of a Limited Partner for the purpose of settling his or her estate.
10.3 Redemption Rights.
(a) Grant of Rights. The General Partner does hereby grant to the
Limited Partners and the Limited Partners do hereby accept the right, but
not the obligation (such right shall be referred to hereinafter sometimes
as the "Redemption Rights"), to require the Partnership to redeem all or
part of their Partnership Units for shares of Common
- 34 -
<PAGE>
Stock and/or cash, at any time or from time to time after the date which
is one (1) year after the date of this Agreement, on the terms and subject
to the conditions and restrictions contained in this Section 10.3.
(b) Delivery of Exercise Notices. Any one or more Limited Partners
("Exercising Partners") may, subject to the limitations set forth in this
Section 10.3, deliver to the General Partner written notice in the form
attached to the Unit Certificate as Attachment 1 (the "Exercise Notice")
pursuant to which such Exercising Partners elect to exercise their
Redemption Rights with respect to all or any portion of their Partnership
Units. The Exercise Notice shall specify the specific number of
Partnership Units which the Limited Partner intends to require the
Partnership to redeem for shares of Common Stock and the specific number
of Partnership Units which the Limited Partner intends to require the
Partnership to redeem for cash. Only whole numbers of Partnership Units
may be redeemed. Once delivered, the Exercise Notice shall be irrevocable,
subject to payment by the General Partner of shares of Common Stock and/or
cash in respect of such Partnership Units in accordance with the terms
hereof.
(c) Assumption by General Partner. Notwithstanding anything
contained herein to the contrary, the General Partner may, in its sole and
absolute discretion, assume directly the obligation with respect to and
satisfy an Exercising Partner's exercise of a Redemption Right by paying
to the Exercising Partner, at the General Partner's election, shares of
Common Stock and/or cash, as determined in accordance with the provisions
of Section 10.3(e) below, whereupon the General Partner shall acquire the
Offered Units and shall be treated for all purposes of this Agreement as
the owner of such Offered Units. In the event the General Partner shall
exercise its right to satisfy the Redemption Right in the manner described
in the preceding sentence, the Partnership shall have no obligation to pay
any amount to the Exercising Partner with respect to such Exercising
Partner's exercise of the Redemption Right, and each of the Exercising
Partner, the Partnership and the General Partner shall treat the
transaction between the General Partner and the Exercising Partner as a
sale of the Offered Units to the General Partner for federal income tax
purposes.
(d) Limitation on Exercise of Redemption Rights. Redemption Rights
may be exercised at any time and from time to time after the date which is
one (1) year after the date of this Agreement, subject to the following
limitations:
- 35 -
<PAGE>
(i) A Limited Partner may not exercise its Redemption Rights
pursuant to any one particular Exercise Notice for less
than One Thousand (1,000) Partnership Units or, if such
Limited Partner holds less than One Thousand (1,000)
Partnership Units, all of the Partnership Units held by
such Limited Partner;
(ii) A Limited Partner shall not have the right to exercise
its Redemption Rights hereunder if, in the opinion of
counsel selected by the General Partner, in its sole and
absolute discretion, such exercise and/or issuance of
shares of Common Stock may or would (A) violate the
General Partner's Articles of Incorporation, as amended
from time to time, (B) cause the General Partner to fail
any one or more of the REIT Requirements or (C)
constitute a violation of applicable securities laws;
and
(iii) Each Limited Partner acknowledges and agrees that the
issuance of shares of Common Stock pursuant to the
Redemption Rights will not be registered under the
Securities Act of 1933, as amended (the "Act"), or any
state securities laws. Accordingly, shares of Common
Stock issued to such Limited Partner may be required to
be held indefinitely and the General Partner shall have
no obligation to register such shares under the Act or
any state securities laws unless required to do so
pursuant to a separate written agreement entered into by
the General Partner at the time of the issuance. In
addition, such Limited Partner will be required to meet
such other requirements and to provide such other
information and representations as the General Partner
may require, which are required in the opinion of its
counsel to lawfully allow it to issue such shares
without registration under the Act and any applicable
state securities laws. Each Limited Partner acknowledges
that the certificates representing shares of Common
Stock issued will also bear a legend with respect to any
restrictions on transfer required in the opinion of
counsel for the
- 36 -
<PAGE>
General Partner. The General Partner acknowledges that
the Limited Partners have been granted the right, in
certain circumstances and subject to certain
limitations, to require the registration under the Act
of the shares of Common Stock issued pursuant to the
Redemption Rights.
(e) Computation of Number of Exchange Shares and/or Cash To Be Paid.
Each Partnership Unit which is to be redeemed for shares of Common Stock
shall be redeemed for one share of Common Stock, as adjusted from time to
time as provided in Section 10.3(i). Each Partnership Unit which is to be
redeemed for cash shall be redeemed for an amount of cash equal to the
Current Per Share Market Price (determined as of the Trading Day
immediately preceding the date upon which the closing of the redemption of
Offered Units is to occur). Notwithstanding anything contained herein to
the contrary, the General Partner, in its sole and absolute discretion,
shall have the right either (i) to deliver shares of Common Stock to each
Exercising Partner in lieu of all or any portion of the cash requested by
such Exercising Partner, the number of which shares of Common Stock shall
be determined pursuant to the first sentence of this Section 10.3(e) or
(ii) to cause the Partnership to pay cash to each Exercising Partner in
lieu of all or any portion of the number of shares of Common Stock
requested by such Exercising Partner, the amount of such cash per
Partnership Unit shall be determined pursuant to the second sentence of
this Section 10.3(e). The General Partner shall not be required to issue
fractions of shares of Common Stock in return for Partnership Units. If
more than one Partnership Unit shall be requested to be redeemed at the
same time by the same Limited Partner, the number of full shares of Common
Stock that shall be issuable upon the redemption thereof shall be computed
on the basis of the aggregate number of shares of Common Stock represented
by the Partnership Units so presented. If any fraction of a share of
Common Stock would, except for the provisions of this Section 10.3(e), be
issuable on the redemption of any Partnership Units (or specified portion
thereof), the General Partner shall pay an amount in cash equal to the
Current Per Share Market Price (determined as of the Trading Day
immediately preceding the date upon the closing of the Redemption of the
Offered Units is to occur), multiplied by such fraction.
(f) Closing; Delivery of Election Notice. The closing of the
redemption of Offered Units shall, unless otherwise mutually agreed, be
held at the principal offices of the
- 37 -
<PAGE>
General Partner, on the date agreed to by the General Partner and the
Exercising Partners, which date shall in no event be later than: (i) ten
(10) business days after the date of delivery of the Exercise Notice to
the General Partner or (ii) the first date upon which all legal and other
conditions with respect to such redemption have been satisfied (which
shall include the expiration or termination of any applicable waiting
periods).
(g) Closing Deliveries. At the closing of the redemption of Offered
Units, (i) the Exercising Partners shall execute and deliver (A) proper
instruments of transfer and assignment of the Offered Units, (B) a Unit
Certificate or Unit Certificates representing the number of Offered Units
to be so redeemed and (C) representations and warranties with respect to
their due authority to sell all of the right, title and interest in and to
such Offered Units to the General Partner and, with respect to the status
of the Offered Units, that such Offered Units are free and clear of all
liens, claims and encumbrances whatsoever, and (ii) the General Partner
shall (A) if shares of Common Stock are to be issued, execute and deliver
representations and warranties with respect to its due authority to issue
the shares of Common Stock to be received in the exchange; deliver an
opinion of counsel for the General Partner, reasonably satisfactory to the
Exercising Partners, to the effect that such shares of Common Stock have
been duly authorized, are validly issued, fully-paid and non-assessable;
and deliver a stock certificate or certificates evidencing the shares of
Common Stock to be issued and registered in the name(s) of the Exercising
Partner(s) or its or their designee(s), and/or (B) if cash is to be paid
for Partnership Units, deliver a check in the amount of any cash due to
the Exercising Partner(s) at such closing. If any Exercising Partner shall
have delivered a Unit Certificate or Unit Certificates representing a
number of Partnership Units in excess of the number of Offered Units, the
Partnership shall issue to such Exercising Partner, at the expense of the
Partnership, a new Unit Certificate covering the number of Partnership
Units representing the unredeemed portion of the Unit Certificate or Unit
Certificates so surrendered, which new Unit Certificate shall entitle the
holder thereof to such rights of ownership of Partnership Units to the
same extent as if the Unit Certificate covering such unredeemed
Partnership Units had not been surrendered for redemption.
(h) Term of Rights. Unless sooner terminated, the rights of the
parties with respect to the Redemption Rights shall commence as of the
date which is one (1) year after
- 38 -
<PAGE>
the date of this Agreement and lapse for all purposes and in all respects
upon the termination of the Partnership; provided, however, that the
parties hereto shall continue to be bound by an Exercise Notice delivered
to the General Partner prior to such termination.
(i) Covenants of the General Partner. To facilitate the General
Partner's ability to fully perform its obligations hereunder, the General
Partner covenants and agrees as follows:
(i) At all times during the pendency of the Redemption
Rights, the General Partner shall reserve for issuance
such number of shares of Common Stock as may be
necessary to enable the General Partner to issue such
shares in full exchange for all Partnership Units held
by the Limited Partners which are from time to time
issued and outstanding;
(ii) During the pendency of the Redemption Rights, each
Limited Partner shall receive in a timely manner all
reports and/or other communications transmitted from
time to time by the General Partner to its shareholders
generally; and
(iii) In case the General Partner shall issue rights or
warrants to all holders of shares of its Common Stock
entitling them to subscribe for or purchase shares of
Common Stock at a price per share less than the Current
Per Share Market Price as of the date immediately prior
to the date of such issuance, the General Partner shall
also issue to each holder of a Partnership Unit such
number of rights or warrants, as the case may be, as he
would have been entitled to receive had he required the
Partnership to redeem his Partnership Units immediately
prior to the record date for such issuance by the
General Partner.
(iv) In case the outstanding shares of Common Stock shall be
subdivided into a greater number of shares, the number
of shares of Common Stock for which each Partnership
Unit thereafter may be redeemed shall be increased
proportionately, and, conversely, in case outstanding
shares of Common Stock each shall
- 39 -
<PAGE>
be combined into a smaller number of shares, the number
of shares of Common Stock for which each Partnership
Unit thereafter may be redeemed shall be reduced
proportionately, such increase or reduction as the case
may be, to become effective immediately after the
opening of business on the Trading Day following the day
upon which such subdivision or combination becomes
effective.
(v) In case shares of Common Stock shall be changed into the
same or a different number of shares of any class or
classes of shares of beneficial interest, whether by
capital reorganization, reclassification or otherwise
(other than a subdivision or combination of shares or a
stock dividend described in Section 10.3(i)(iv) above)
then and in each such event the Limited Partners shall
have the right thereafter to require the Partnership to
redeem their Partnership Units for the kind and amount
of shares and other securities and property which would
have been received upon such reorganization,
reclassification or other change by holders of the
number of shares of Common Stock for which the
Partnership Units might have been redeemed immediately
prior to such reorganization, reclassification or
change.
(vi) The General Partner may, but shall not be required to,
make such adjustments to the number of shares of Common
Stock issuable upon redemption of a Partnership Unit, in
addition to those required by paragraphs (iii), (iv) and
(v) of this Section 10.3(i), as the Board of Directors
considers to be advisable in order that any event
treated for Federal income tax purposes as a dividend of
stock or stock rights shall not be taxable to the
recipients. The Board of Directors shall have the power
to resolve any ambiguity or correct any error in the
adjustments made pursuant to this Section 10.3(i) and
its actions in so doing shall be final and conclusive.
(j) Limited Partners' Covenant. Each Limited Partner covenants and
agrees with the General Partner that all Offered Units tendered to the
General Partner in accordance
- 40 -
<PAGE>
with the exercise of Redemption Rights herein provided shall be delivered
to the General Partner free and clear of all liens, claims and
encumbrances whatsoever and should any such liens, claims and/or
encumbrances exist or arise with respect to such Offered Units, the
General Partner shall be under no obligation to acquire the same. Each
Limited Partner further agrees that, in the event any state or local
property transfer tax is payable as a result of the transfer of its
Offered Units to the General Partner (or its designee), such Limited
Partner shall assume and pay such transfer tax.
ARTICLE 11
BANKING, RECORDS AND TAX MATTERS
11.1 Partnership Funds. All funds of the Partnership shall be deposited in
its name in accounts (with banks, "money-market funds," or securities of the
United States government or like investment or depository media) designated by
the General Partner, and the General Partner or its designees shall have the
right to draw checks or other orders of withdrawal thereon and make, deliver,
accept and endorse negotiable instruments in connection with the Partnership
business.
11.2 Books and Records. The following books, records, and accounts shall
be maintained by the Partnership, showing its assets, liabilities, transactions,
and financial condition: a current list of the full name and last known address
of each Partner, separately identifying the General and Limited Partners and set
forth in alphabetical order and setting forth the amount of cash or a
description and statement of the Agreed Value of other property contributed or
agreed to be contributed by each partner; the date on which each became a
Partner; a copy of the Certificate and all amendments thereto; copies of the
Partnership's federal, state and local income tax returns and reports, if any,
for the six most recent years; copies of this Agreement and any amendments
thereto; and copies of any financial statements of the Partnership for the three
most recent years. The Partnership's books shall be maintained at the principal
office of the Partnership. Each Partner shall have the right to inspect and copy
such materials at all reasonable times and during ordinary business hours. The
General Partner is not required to deliver to any Limited Partner copies of the
Certificate or any amendments thereto, unless requested by such Limited Partner.
11.3 Financial Statements. Within ninety-five (95) days after the close of
each fiscal year of the Partnership, the
- 41 -
<PAGE>
General Partner shall cause to be prepared (at the Partnership's expense) and
furnished to each Person who was a Partner during the fiscal year then ended, a
balance sheet of the Partnership as of the close of such fiscal year and
statements of income or loss, and Net Cash Flow, if any. Such statements shall
be prepared in accordance with generally accepted accounting principles and
certified by the Accountants for the Partnership, unless such certification is
waived, in writing, by all of the Partners.
11.4 Tax Returns. Within ninety (90) days following the close of each
fiscal year of the Partnership, the General Partner shall cause to be prepared
(at the Partnership's expense) a United States Partnership Return of Income and
cause to be furnished to each Person who was a Partner during the fiscal year a
schedule (a "K-1 Schedule") of each such Partner's share of income, credits, and
deductions on the form then prescribed by the IRS. All elections and options
available to, or determinations as to items of income or expense of, the
Partnership for federal or state income tax purposes shall be taken, rejected or
made by the Partnership in the sole discretion of the General Partner.
11.5 Section 754 Matters. The General Partner, on behalf of the
Partnership, shall file an election under Section 754 of the Code in accordance
with the procedures set forth in the applicable Regulations promulgated
thereunder, which shall be effective beginning with the first fiscal year of the
Partnership with respect to which the Partnership is eligible to make such
election, which election, for such fiscal year, may not be revoked for any
reason.
11.6 Tax Matter Partners. The General Partner is hereby appointed the "tax
matters partner" of the Partnership for all purposes pursuant to Sections
6221-6231 of the Code. The Partnership shall reimburse the tax matters partner
for any and all out-of-pocket costs and expenses (including attorneys' and
accountants' fees) incurred or sustained by it in its capacity as tax matters
partner. The Partnership shall indemnify, defend and hold the tax matters
partner harmless from and against any loss, liability, damage, cost or expense
(including attorneys' and accountants' fees) sustained or incurred as a result
of any act or decision concerning the Partnership tax matters and within the
scope of its responsibility as tax matters partner.
11.7 Other Reports. The General Partner shall deliver to each Limited
Partner, in a timely manner, all reports and/or other communications transmitted
from time to time by the General Partner to its shareholders.
- 42 -
<PAGE>
ARTICLE 12
TRANSFER OF GENERAL PARTNER INTERESTS
12.1 Transfer of Interest of the General Partner. No General Partner may
at any time sell, assign, transfer, pledge or encumber any or all of its
Partnership Interest in the Partnership or withdraw or retire from the
Partnership except as otherwise provided herein or with the prior written
consent of Partners owning eighty-five percent (85%) of the issued and
outstanding Partnership Units taken as a single class. Retirement or withdrawal
from the Partnership shall not relieve the General Partner of any obligation
theretofore incurred by it hereunder. Notwithstanding anything contained herein
to the contrary, the Limited Partners shall have no right whatsoever to remove
the General Partner from the Partnership.
12.2 Retirement of the General Partner. If a General Partner shall
liquidate or dissolve, be adjudged bankrupt, enter into an assignment for the
benefit of creditors, have a receiver appointed to administer its interest in
the Partnership, be the subject of a voluntary or involuntary petition for
bankruptcy that is not dismissed or vacated within ninety (90) days of filing,
or have its interest in the Partnership seized by a judgment creditor, or if
there shall be an individual general partner and he shall die, be adjudicated
incompetent or become permanently disabled (each of the foregoing events is
referred to hereinafter as an "Event of Retirement"), such General Partner,
without further act or notice, immediately shall be deemed to have retired as
General Partner of the Partnership. If the General Partner retires as General
Partner of the Partnership as aforesaid, (i) such General Partner (or its
administrator, executor, personal representative or successor) (a) shall become
a nonparticipating Limited Partner (a "Nonparticipating Limited Partner")
retaining the General Partner's former interest in the Profits, Losses and Net
Cash Flow of the Partnership, but shall not acquire any right or interest in any
payment or distribution to the Limited Partners, as such, pursuant hereto, (b)
shall have no right to participate in the management of the affairs of the
Partnership, and (c) shall be disregarded in determining whether any approval,
consent, or other action has been given or taken by the Limited Partners; and
(ii) the surviving General Partner(s), if any, shall remain as such and the
Partners hereby agree and consent that the Partnership shall continue in effect
and shall not terminate, subject, however, to the provisions of Section 12.5
hereof.
12.3 Transferee of the General Partner's Interest. Any Person, other than
the General Partner, who acquires, in any
- 43 -
<PAGE>
manner whatsoever (except as herein otherwise provided) the interest, or any
portion thereof, of the General Partner, shall not be a General Partner, but
shall be entitled to become a Nonparticipating Limited Partner upon written
acceptance and adoption of all of the terms and provisions of this Agreement and
compliance with the requirements of Section 13.3 of this Agreement. Such Person
shall, to the extent of the interest acquired, be entitled only to the
transferor General Partner's rights, if any, in the Profits, Losses and Net Cash
Flow of the Partnership, but shall not acquire any right or interest in any
payment or distribution to the Limited Partners, as such, pursuant hereto. No
such Person shall have any right to participate in the management of the affairs
of the Partnership, and the interest acquired by such Person shall be
disregarded in determining whether any approval, consent or other action has
been given or taken by the Limited Partners.
12.4 Retirement of Last Remaining General Partner. If the last remaining
General Partner shall at any time withdraw or suffer an Event of Retirement, the
Limited Partners shall have the right, within ninety (90) days thereafter, by a
written consent executed and delivered by Limited Partners owning a majority of
the issued and outstanding Partnership Interests taken as a single class, to
appoint one or more new General Partners as replacement General Partners, unless
the Act requires a greater percentage of the Limited Partners to consent to the
continuation of the Partnership, in which case such higher percentage shall be
required for the continuation of the Partnership. In such event, the Limited
Partners shall create for such replacement General Partners such interest in the
Partnership Profits, Losses and Net Cash Flow as the Limited Partners may agree
upon from among their collective interests in the Partnership.
12.5 Continuation of Partnership. In the event of the timely appointment
of a replacement or new General Partner(s) pursuant to this Article 12, the
relationship of the Partners shall be governed by the provisions of this
Agreement, the Partnership shall be continued, and the replacement or new
General Partner(s) shall have all of the management rights, duties,
responsibilities, authority and powers provided the General Partner in this
Agreement. If the Limited Partners fail to select a replacement or new General
Partner(s), whichever the case may be, within ninety (90) days following
retirement of the last remaining General Partner, the Partnership shall dissolve
and terminate.
ARTICLE 13
- 44 -
<PAGE>
TRANSFER OF LIMITED PARTNER INTERESTS
13.1 Transfer of Interest of a Limited Partner. Except as otherwise
specifically provided in this Agreement, no Limited Partner may sell, assign,
transfer, pledge, encumber or in any manner dispose of all or any part of its
Partnership Interest without the prior written consent of the General Partner,
which consent may not be unreasonably withheld. Notwithstanding the foregoing,
each Limited Partner shall have the right to (i) pledge or otherwise encumber
all or any portion of its Partnership Interest (subject, however, to applicable
securities laws) and/or (ii) transfer all or any portion of its Partnership
Interest to members of the Immediate Family of such Limited Partner and to one
or more trusts for the benefit of one or more members of the Immediate Family of
such Limited Partner for estate and/or gift tax purposes, upon prior written
notice to the General Partner. Without limiting the generality of the foregoing,
in no event shall the General Partner consent to an assignment of all or any
portion of the Partnership Interest of a Limited Partner in the Partnership if,
in the opinion of the General Partner (or of counsel satisfactory to the General
Partner), such assignment (i) will result in a termination of the Partnership
for federal income tax purposes or otherwise result in adverse tax consequences
to the Partnership or any Partner, (ii) will result in the Partnership failing
to qualify for an exemption from the registration requirements of the federal or
any applicable state securities laws, (iii) will result in the imposition of
fiduciary responsibility on the Partnership or any Partner under the Employee
Retirement Income Security Act of 1974, as amended from time to time, (iv) will
result in a violation of any provision of any mortgage or trust deed (or the
note or bond secured thereby) constituting a lien against any assets of the
Partnership, or other instrument, document or agreement to which the Partnership
is a party or otherwise bound, (v) represents a transfer of any component
portion of a Partnership Interest, such as the Capital Account, or rights to Net
Cash Flow, separate and apart from all other components of a Partnership
Interest, or (vi) will cause the General Partner to cease to comply with any and
all REIT Requirements. Subject to satisfaction of the conditions therefor set
forth or referred to herein, each Limited Partner hereby consents to the
substitution or admission of any assignee of a Limited Partner. Any sale,
assignment, transfer, pledge, encumbrance, hypothecation or other disposition by
a Limited Partner of all or any part of its Partnership Interest in violation of
the provisions hereof shall be void ab initio and of no force or effect
whatsoever.
13.2 Assignee and Substitute Limited Partners. No Person shall be admitted
as an assignee or substituted Limited Partner under this Agreement unless and
until:
- 45 -
<PAGE>
(a) An assignment is made in writing, signed by the assigning
Partner and accepted in writing by the assignee, and a duplicate original
of such assignment has been delivered to and approved by the General
Partner;
(b) The General Partner has received an opinion of counsel favorably
covering the matters described in clauses (i) through (vi) of Section 13.1
above, or waived all or any portion of this requirement;
(c) The prospective admittee executes and delivers to the General
Partner a written agreement in form reasonably satisfactory to the General
Partner pursuant to which said Person agrees to be bound by and confirms
the obligations, representations, warranties and power of attorney
contained in this Agreement; and
(d) An appropriate amendment to this Agreement is executed.
13.3 Assignment. In the event an assignment is made in accordance with the
terms hereof, unless otherwise required by the Code:
(a) The effective date of such assignment shall be the date the
written instrument of assignment is delivered to the Partnership and
approved by the General Partner;
(b) The Partnership and the General Partner shall be entitled to
treat the assignor of the assigned interest as the absolute owner thereof
in all respects and shall incur no liability for allocations of Profits or
Losses and distributions of Net Cash Flow made in good faith to such
assignor until such time as the written instrument of assignment has been
actually received and approved by the General Partner, and recorded in the
books of the Partnership; and
(c) The division and allocation of Profits or Losses, other than
Profits or Losses arising from a Liquidation of the Partnership,
attributable to the applicable Partnership Interests between the assignor
and assignee during any fiscal year of the Partnership shall be based upon
the length of time during such fiscal year, as measured by the effective
date of such assignment, that the assigned Partnership Interest was owned
by each of them and shall not be based upon the date or dates during such
fiscal year in which income was earned or losses were sustained by the
Partnership; provided, however, that the division and
- 46 -
<PAGE>
allocation of Profits or Losses resulting from a Liquidation of the
Partnership shall be based upon the date or dates such income was earned
or losses were sustained.
13.4 Cost of Admission. The cost of processing and perfecting an admission
contemplated by this Article 13 (including reasonable attorney's fees incurred
by the Partnership) shall be borne by the party seeking admission as a Partner
to the Partnership.
ARTICLE 14
DISSOLUTION AND LIQUIDATION OF PARTNERSHIP
14.1 Dissolution of the Partnership. The Partnership shall be dissolved
upon the happening of any of the following:
(a) An election to dissolve and wind up the affairs of the
Partnership by the General Partner (subject to Section 9.3 hereof);
(b) The occurrence of an Event of Retirement to the last remaining
General Partner, unless the Limited Partners elect to continue the
business of the Partnership pursuant to the provisions of Sections 12.4
and 12.5;
(c) Any event that makes it unlawful for the Partnership business to
be continued;
(d) The sale, disposition, or abandonment of all or substantially
all of the assets of the Partnership unless the General Partner, with the
written consent of Partners owning eighty-five percent (85%) of the
Partnership Interests taken as a single class (which consent may not be
unreasonably withheld), elects to continue the Partnership business for
the purpose of the receipt and the collection of indebtedness or the
collection of any other consideration to be received in exchange for the
assets of the Partnership (which activities shall be deemed to be part of
the winding up of the affairs of the Partnership);
(e) Dissolution required by operation of law; or
(f) December 31, 2093.
14.2 Winding Up of Affairs. In the event of the dissolution and
liquidation of the Partnership for any reason, the General Partner shall
commence to wind up the affairs of the Partnership and shall convert all of the
Partnership's assets to cash or cash
- 47 -
<PAGE>
equivalents within such reasonable period of time as may be required to receive
fair value therefor. All items of income, gain, loss, deduction and credit
during the period of liquidation shall be allocated among the Partners in the
same manner as before the dissolution. If there is no General Partner to effect
such Liquidation, then the Limited Partners, pursuant to a vote of Limited
Partners owning a majority of the issued and outstanding Partnership Units owned
by all Limited Partners, may designate any person, firm or corporation, as a
Liquidating Trustee, for that purpose who shall have all of the rights, powers
and authority of a General Partner stated herein in connection therewith.
14.3 Accounting. In the case of the dissolution and termination of the
Partnership, prior to any distributions to Partners pursuant to Section 14.4(c)
below, a proper accounting shall be made of the Capital Accounts of the Partners
and of each item of income, gain, loss, deduction and credit of the Partnership
from the date of the last previous accounting to the date of dissolution. The
General Partner shall provide a copy of such accounting to all Partners.
14.4 Final Distribution of Partnership Property. Upon termination of the
Partnership, the General Partner shall apply and distribute the remaining
property of the Partnership, together with the proceeds of any sales of same, as
follows:
(a) first, all Partnership debts and liabilities shall be paid and
discharged, including debts owed to Partners and any Affiliates of
Partners;
(b) second, to establish any reserve for any contingent or
unforeseen liabilities or obligations of the Partnership. Such funds shall
be placed in escrow by the General Partner for the purposes of disbursing
such funds in payment of any of the contingencies, liabilities or
obligations, and, at the expiration of such period as the General Partner
shall deem advisable, the balance then remaining shall be distributed
pursuant to subsection (c) of this Section 14.4; and
(c) third, to distribute the balance to the Partners in the manner
and priority set forth in Article 8 hereof, with any and all Net Cash Flow
arising from the ordinary course of the Partnership's business during the
period of liquidation being distributed pursuant to Section 8.1(a) and any
and all Net Cash Flow arising pursuant to the sale and/or other
liquidation of Partnership property being distributed pursuant to Section
8.1(b) hereof.
- 48 -
<PAGE>
Distributions upon liquidation of the Partnership (or any Partner's
interest in the Partnership) and related adjustments shall be made by the end of
the taxable year of the liquidation (or, if later, within 90 days after the date
of such liquidation) or as otherwise permitted by the Regulations.
14.5 Certificate of Cancellation. Upon completion of the liquidation of
the Partnership and the distribution of all Partnership property, the
Partnership shall terminate and the General Partner shall have the authority to
execute and record one or more Certificates of Cancellation of the Partnership
as well as any and all other documents required or considered advisable by the
General Partner to effectuate the dissolution and termination of the
Partnership.
ARTICLE 15
POWER OF ATTORNEY
15.1 Power of Attorney. Each Partner, by its execution hereof, irrevocably
constitutes and appoints the General Partner, or any substitute or replacement
General Partner, with full power of substitution, as such Partner's true and
lawful attorney-in-fact, in its name, place and stead to make, execute, sign,
acknowledge, certify, deliver, file and record on its behalf and on behalf of
the Partnership, the following:
(a) This Agreement, all Certificates of Limited Partnership,
Certificates of Doing Business under an Assumed Name, amendments to any or
all of the foregoing, and any other certificates or instruments which may
be required to be filed by the Partnership or the Partners under the laws
of the State of Delaware or any other jurisdiction;
(b) One or more Certificates of Cancellation of the Partnership and
such other instruments or documents as may be deemed necessary or
desirable by the General Partner upon termination of the Partnership
business;
(c) Any and all amendments to this Agreement and to the instruments
described in subsections (a) and (b) above, provided such amendments are
either required by law or have been authorized by the Partner(s) in
accordance with Article 16 and/or any other provision of this Agreement
(including, without limitation, any amendment to this Agreement and to the
Certificate to reflect the substitution or admission of a Limited Partner
pursuant to this Agreement); and
- 49 -
<PAGE>
(d) Any and all such other documents and instruments as may be
deemed necessary or desirable by said attorney to carry out fully the
provisions of this Agreement in accordance with its terms.
15.2 Grant of Authority Irrevocable. The foregoing grant of authority (a)
is a special power of attorney coupled with an interest, is irrevocable and
shall survive the death or incapacity of a Partner who is a natural person or,
in the case of a Partner that is not a natural person, the merger, dissolution
or other termination of its existence of the Partner, (b) may be exercised by
the General Partner on behalf of each Partner, by a facsimile signature or by
listing all of the Partners executing any instrument with a single signature as
attorney-in-fact for all of them, and (c) shall survive the assignment by a
Partner of the whole or any portion of his or its interest in the Partnership.
- 50 -
<PAGE>
ARTICLE 16
AMENDMENT OF PARTNERSHIP AGREEMENT
16.1 Amendments by Partners. Except as may be specifically provided below
in this Section 16.1 and in Sections 16.2 and 9.3 hereof, this Agreement may
only be amended with the written concurrence of the General Partner and the
written consent of Partners owning a majority of the Partnership Units taken as
a single class (which shall mean that only the General Partner's consent is
necessary if the General Partner owns a majority of the Partnership Units, taken
as a single class, in which case the Limited Partners need not be solicited but
shall be informed of the amendment); provided, however, that absent the
concurrence of the General Partner and the approval of all of the Limited
Partners no amendment shall increase the obligation of any Partner to make
contributions to the capital of the Partnership; provided, further, however,
that absent the concurrence of the General Partner and the approval of Limited
Partners owning eighty-five percent (85%) of the Partnership Units held by all
Limited Partners, taken as a single class, no amendment shall:
(a) modify the order of allocation of distributions of the Net Cash
Flow or liquidating distributions, or the allocation of Profits and Losses
among the Partners (other than as specifically provided for herein,
including without limitation, modifications pursuant to Section 6.4
hereof);
(b) change the Partnership to a general partnership;
(c) reduce the percentage of Limited Partners required to consent to
any matter in this Agreement; or
(d) amend Section 9.4(a)(iv) hereof or amend Section 10.3 hereof in
any manner that prohibits or restricts, or has the effect of prohibiting
or restricting, the ability of a Limited Partner to exercise its
Redemption Rights in full; or
(e) amend this Article 16.
16.2 Amendment by the General Partner. Notwithstanding anything contained
in this Agreement to the contrary, the General Partner shall have the power,
without the consent of the Limited Partners, to amend this Agreement as may be
required to facilitate or implement any of the following purposes:
(a) To add to the obligations of the General Partner or surrender
any right or power granted to the General
- 51 -
<PAGE>
Partner or any Affiliate of the General Partner for the benefit of the
Limited Partners;
(b) To reflect the admission, substitution, termination or
withdrawal of Partners in accordance with this Agreement, including
without limitation, the issuance of additional classes of Partnership
Units to Limited Partners pursuant to Section 6.4 hereof;
(c) To reflect a change that is of an inconsequential nature and
does not adversely affect the Limited Partners in any material respect, or
to cure any ambiguity, correct or supplement any provision in this
Agreement not inconsistent with law or with other provisions, or make
other changes with respect to matters arising under this Agreement that
will not be inconsistent with law or with the provisions of this
Agreement;
(d) To satisfy any requirements, conditions or guidelines contained
in any order, directive, opinion, ruling or regulation of a federal or
state agency or contained in federal or state law; and
(e) To amend the provisions of this Agreement that protect the
qualification of the General Partner as a REIT if such provisions are no
longer necessary because of a change in applicable law (or an
authoritative interpretation thereof), a ruling of the IRS, or if the
General Partner has determined to cease qualifying as a REIT.
The General Partner will provide notice to the Limited Partners when any action
under this Section 16.2 is taken.
16.3 Amendment of Certificate. If this Agreement shall be amended pursuant
to this Article 16, the General Partner shall cause the Certificate to be
amended, to the extent required by applicable law, to reflect such change. The
Partners shall be promptly notified of any amendments made under this Article
16.
ARTICLE 17
INDEMNIFICATION
17.1 Partnership Indemnification of Partner. To the maximum extent
permitted from time to time under Delaware law, the Partnership shall indemnify,
defend and hold the General Partner (in its capacity as General Partner) and its
Affiliates, trustees, officers, directors, employees and agents, or their
respective successors, executors, administrators or personal
- 52 -
<PAGE>
representatives harmless from and against any loss, liability, damage, cost or
expense (including reasonable attorneys' fees) sustained or incurred as a result
of any act or omission concerning the business or activities of the Partnership
or General Partner; provided such act or omission was not in violation of any
term or provision of this Agreement or any provision of law. The foregoing
indemnity shall not be enforceable against any Limited Partner personally but
solely from such Limited Partner's interest in the Partnership.
17.2 Partner Indemnification of Partnership. In the event the Partnership
is made a party to any litigation or otherwise incurs any loss or expense as a
result of or in connection with any Partner's personal obligations or
liabilities unrelated to Partnership business, such Partner shall indemnify and
reimburse the Partnership for all such loss and expense incurred, including
reasonable attorneys' fees, and the interest of such Partner in the Partnership
may be charged therefor. The liability of a Partner under this Section 17.2
shall not be limited to such Partner's interest in the Partnership, but shall be
enforceable against such Partner personally.
ARTICLE 18
MISCELLANEOUS PROVISIONS
18.1 Notices. All notices and demands required or permitted under this
Agreement shall be in writing and may be delivered personally to the Person to
whom it is authorized to be given, or sent by registered, certified or first
class mail, or by overnight delivery, postage prepaid, and if intended for the
Partnership, addressed to the Partnership at the principal office of the
Partnership, and if intended for a Partner, addressed to the Partner at its
address on the signature pages hereof, or to such other person or at such other
address designated by written notice given to the Partnership. Any notice or
demand mailed as aforesaid shall be deemed to have been delivered two (2) days
after the date that such notice or demand is deposited in the mails.
18.2 Severability. If any provision of this Agreement or the application
of such provision to any Person or circumstance shall be held invalid, the
remainder of this Agreement, or the application of such provision to Persons or
circumstances other than those as to which it is held invalid shall not be
affected.
18.3 Parties Bound. Any Person acquiring or claiming an interest in the
Partnership, in any manner whatsoever, shall be subject to and bound by all
terms, conditions and obligations of
- 53 -
<PAGE>
this Agreement to which his or its predecessor in interest was subject or bound,
without regard to whether such Person has executed a counterpart hereof or any
other document contemplated hereby. No Person, including the legal
representative, heir or legatee of a deceased Partner, shall have any rights or
obligations greater than those set forth in this Agreement and no Person shall
acquire an interest in the Partnership or become a Partner thereof except as
permitted by the terms of this Agreement. This Agreement shall be binding upon
the parties hereto, their successors, heirs, devisees, assigns, legal
representatives, executors and administrators.
18.4 Applicable Law. The Partnership and this Agreement shall be governed
by the laws of the State of Delaware.
18.5 Partition. Each Partner hereby irrevocably waives during the term of
the Partnership any right that he or it may have to maintain any action for
partition with respect to any property of the Partnership.
18.6 Computation of Accountants. Except with respect to matters as to
which the General Partner is granted discretion under this Agreement, the
opinion of the Accountants shall be final and binding with respect to all
allocations made under Article 7 or distributions made under Article 8 or
Section 14.4 hereof.
18.7 Headings. The headings in this Agreement are inserted for convenience
and identification only and are in no way intended to describe, interpret,
define or limit the scope, extent or intent of this Agreement or any provision.
18.8 Counterparts. This Agreement may be executed in multiple counterparts
with separate signature pages, each such counterpart shall be considered an
original, but all of which together shall constitute one and the same
instrument.
- 54 -
<PAGE>
IN WITNESS WHEREOF, each of the parties has executed this Agreement as of
the date first set forth above, confirms his or its agreement to become a
General or Limited Partner, as the case may be, of the Partnership, agrees to be
bound by this Agreement and acknowledges the appointment of attorneys-in-fact as
set forth herein, and swears that the statements set forth herein are true and
correct.
GENERAL PARTNER:
CALI REALTY CORPORATION,
a Maryland corporation
By: Roger W. Thomas
----------------------------------
Its: Vice President
Address: 11 Commerce Drive
Cranford, New Jersey 07016
LIMITED PARTNERS:
/s/ John J. Cali
-----------------------------------
John J. Cali
/s/ Angelo R. Cali
-----------------------------------
Angelo R. Cali
/s/ Edward Leshowitz
-----------------------------------
Edward Leshowitz
/s/ Brant B. Cali
-----------------------------------
Brant B. Cali
/s/ John R. Cali
-----------------------------------
John R. Cali
/s/ Christopher Cali
-----------------------------------
Christopher Cali
/s/ Jonna Cali-Paleski
-----------------------------------
Jonna Cali-Paleski
- 55 -
<PAGE>
TAR Investments, L.P.
By: TAR Realty Corp.,
general partner
By: /s/ Thomas A. Rizk
--------------------------
Thomas A. Rizk
President
/s/ Albert Spring
-----------------------------------
Albert Spring
/s/ Philip Cali Jr.
-----------------------------------
Philip Cali, Jr.
/s/ Susan Sandson
-----------------------------------
Susan Sandson
/s/ Jed Leshowitz
-----------------------------------
Jed Leshowitz
/s/ Rudolph Daunno, Jr.
-----------------------------------
Rudolph Daunno, Jr.
/s/ Richard W. Daunno
-----------------------------------
Richard W. Daunno
/s/ Christopher A. Daunno
-----------------------------------
Christopher A. Daunno
/s/ Gloria Seminara
-----------------------------------
Gloria Seminara
/s/ Maryann J. Pascale
-----------------------------------
Maryann J. Pascale
/s/ Thomas Seminara
-----------------------------------
Thomas Seminara
/s/ Gary Seminara
-----------------------------------
Gary Seminara
/s/ Rosemary Monteyne
-----------------------------------
Rosemary Monteyne
/s/ Helen Paruta
-----------------------------------
Helen Paruta
- 56 -
<PAGE>
/s/ John J. DeCaro
-----------------------------------
John J. DeCaro
/s/ Anthony DeCaro, Sr.
-----------------------------------
Anthony DeCaro, Sr.
/s/ Anthony P. DeCaro, Jr.
-----------------------------------
Anthony P. DeCaro, Jr.
/s/ Harvey Halberstradter
-----------------------------------
Harvey Halberstradter
/s/ Sanford Halberstradter
-----------------------------------
Sanford Halberstradter
/s/ Daniel Richheimer
-----------------------------------
Daniel Richheimer
/s/ Chela Richheimer
-----------------------------------
Chela Richheimer
/s/ Liza Richheimer
-----------------------------------
Liza Richheimer
/s/ Mark Baumgarten
-----------------------------------
Mark Baumgarten
/s/ Jeffrey Fisch
-----------------------------------
Jeffrey Fisch
/s/ James Nugent
-----------------------------------
James Nugent
/s/ Michael K. Nevins
-----------------------------------
Michael K. Nevins
/s/ Rose Cali
-----------------------------------
Rose Cali
- 57 -
<PAGE>
Angelo R. Cali Irrevocable Trust
dated January 28, 1975
f/b/o Angela Cali
By:/s/ Edward Leshowitz
--------------------------------
Name: Edward Leshowitz
Title: Trustee
Angelo R. Cali Irrevocable Trust
dated January 28, 1975
f/b/o John R. Cali
By:/s/ Edward Leshowitz
--------------------------------
Name: Edward Leshowitz
Title: Trustee
Angelo R. Cali Irrevocable Trust
dated January 28, 1975
f/b/o Joanne Cali
By:/s/ Edward Leshowitz
--------------------------------
Name: Edward Leshowitz
Title: Trustee
Angelo R. Cali Irrevocable Trust
dated July 1, 1979
By:/s/ Edward Leshowitz
--------------------------------
Name: Edward Leshowitz
Title: Trustee
John J. Cali Irrevocable Trust
dated July 1, 1979
By:/s/ Angelo R. Cali
--------------------------------
Name: Angelo R. Cali
Title: Trustee
P.S.L. Associates
By:/s/ Benn Quinn
--------------------------------
Name: Benn Quinn
Title:
/s/ Jonathan Bernstein
-----------------------------------
Jonathan Bernstein
- 58 -
<PAGE>
M.B.M. Associates
By: Fair Lawn-McBride Associates IV,
General Partner
By:/s/ W. Peter McBride
--------------------------------
W. Peter McBride
Managing General Partner
By:/s/ David F. McBride
--------------------------------
David F. McBride
Managing General Partner
By: Marcus-Burroughs Associates,
General Partner
By:/s/ Malvern C. Burroughs
--------------------------------
Malvern C. Burroughs
General Partner
By:/s/ Stanley H. Marcus
--------------------------------
Stanley H. Marcus
General Partner
- 59 -
<PAGE>
EXHIBIT A
Partners and Partnership Units
Name and Address of Partner Partnership Units
- --------------------------- -----------------
General Partner
- ---------------
Cali Realty Corporation 18,781,394
11 Commerce Drive
Cranford, New Jersey 07016
Limited Partners
- ----------------
John J. Cali 290,561
61 Wayside Place
Montclair, NJ 07042
Angelo R. Cali 261,090
15 Kips Ridge
Montclair, NJ 07042
Edward Leshowitz 307,916
1065 Park Avenue, Apt. #23AB
New York, NY 10128
Brant B. Cali 149,501
175 Eagle Rock Way
Montclair, NJ 07042
John R. Cali 83,951
203 Laurel Hill Road
Mountain Lakes, NJ 07046
Christopher Cali 59,703
61 Wayside Place
Montclair, NJ 07042
A-1
<PAGE>
Jonna Cali-Paleski 51,912
6 Tothill Road
Essex Fells, NJ 07021
TAR Investments, L.P. 141,383
c/o Cali Realty Corporation
11 Commerce Drive
Cranford, NJ 07016
Albert Spring 42,029
15 Nottingham Road
West Orange, NJ 07043
Philip Cali, Jr. 21,026
49 Krysch Lane
Wyckoff, NJ 07481
Susan Sandson 84,583
3842 Wonderland Hill
Boulder, CO 80304
Jed Leshowitz 166,145
1065 Park Avenue, Apt. #23AB
New York, NY 10128
Rudolph Daunno, Jr. 37,235
46 Starlight Drive
Clark, NJ 07066
Richard W. Daunno 42,235
28 Olsen Drive
Warren, NJ 07059
Christopher A. Daunno 15,102
c/o Mary Daunno
890 Pennsylvania Avenue
Westfield, NJ 07090
A-2
<PAGE>
Gloria Seminara 99,314
67 Butternut Drive
Wayne, NJ 07470
Maryann J. Pascale 15,102
204 Montclair Road
Barnegat, NJ 08005
Thomas Seminara 13,504
3900 North Ocean Drive
Lauderdale By The Sea, FL 33308
Gary Seminara 16,439
19 Ronnie Road
Wayne, NJ 07470
Rosemary Monteyne 13,504
c/o Gary Seminara
19 Ronnie Road
Wayne, NJ 07470
Helen Paruta 66,042
7 Phillips Lane
Roseland, NJ 07068
John J. DeCaro 92,215
141 Post Kennel Road
Far Hills, NJ 07931
Anthony DeCaro, Sr. 53,080
320 South Street, Apt. 16B
Morristown, NJ 07960
Anthony P. DeCaro, Jr. 19,231
62 Mountain Avenue
Cedar Knolls, NJ 07927
A-3
<PAGE>
Harvey Halberstadter 20,000
P.O. Box 918
Great Barrington, MA 01230
Sanford Halberstadter 43,684
621 Beeechwood Road
Linden, NJ 07036
Daniel Richheimer 659
c/o Susan Sandson
3842 Wonderland Hill
Boulder, Co. 80304
Chela Richheimer 659
c/o Susan Sandson
3842 Wonderland Hill
Boulder, Co. 80304
Liza Richheimer 658
c/o Susan Sandson
3842 Wonderland Hill
Boulder, Co. 80304
Mark Baumgarten 2,964
Ravin, Sarasohn, Cook, Baumgarten,
Fisch & Baime
103 Eisenhower Parkway
Roseland, NJ 07068
Jeffrey Fisch 2,964
Ravin, Sarasohn, Cook, Baumgarten,
Fisch & Baime
103 Eisenhower Parkway
Roseland, NJ 07068
James Nugent 14,783
608 North Blvd.
Belmar, NJ 07719
A-4
<PAGE>
Michael K. Nevins 5,618
35 Birdseye Glen
Verona, NJ 07044
Rose Cali 2,663
61 Wayside Place
Montclair, NJ 07042
Angelo R. Cali Irrevocable Trust 63,522
dated January 28, 1975 f/b/o
Angela Cali
c/o Edward Leshowitz
Cali Associates
11 Commerce Drive
Cranford, NJ 07016
Angelo R. Cali Irrevocable Trust 63,523
dated January 28, 1975 f/b/o
John R. Cali
c/o Edward Leshowitz
Cali Associates
11 Commerce Drive
Cranford, NJ 07016
Angelo R. Cali Irrevocable Trust 63,523
dated January 28, 1975 f/b/o
Joanne Cali
c/o Edward Leshowitz
Cali Associates
11 Commerce Drive
Cranford, NJ 07016
Angelo R. Cali Irrevocable Trust 44,291
dated July 1, 1979
c/o Edward Leshowitz
Cali Associates
11 Commerce Drive
Cranford, NJ 07016
A-5
<PAGE>
John J. Cali Irrevocable Trust 44,291
dated July 1, 1979
c/o Edward Leshowitz
Cali Associates
11 Commerce Drive
Cranford, NJ 07016
P.S.L. Associates 76,918
c/o Benn Quinn
Applegate, Quinn & Magee
78 Main Street
Madison, NJ 07940
Jonathan A. Bernstein 2,964
c\o Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, NY 10022
M.B.M. Associates 93,458
851 Franklin Lakes Road
Franklin Lakes, NJ 07417
A-6
<PAGE>
EXHIBIT B
CALI REALTY, L.P. UNIT CERTIFICATE
* SEE RESTRICTIVE LEGENDS ON REVERSE *
CALI REALTY, L.P.
A DELAWARE LIMITED PARTNERSHIP
Number: ______ Units: ______
This is to certify that ____________________ is the owner of
______________________________________________________ fully paid limited
Partnership Units of Cali Realty, L.P., a Delaware limited partnership (the
"Partnership"), transferable only on the books of the Partnership by the holder
hereof in person or by the duly authorized Attorney upon surrender of this
Certificate properly endorsed.
WITNESS, the seal of the General Partner of the Partnership and the
signatures of its duly authorized officers.
Dated: ______________
___________________________ ________________________
President Secretary
- -SEAL-
B-1
<PAGE>
REVERSE OF
CALI REALTY, L.P. UNIT CERTIFICATE
THE UNITS REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION COMPLIES WITH THE PROVISIONS OF THE AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP DATED AS OF JANUARY 17, 1997 (A COPY OF
WHICH IS ON FILE WITH THE PARTNERSHIP). EXCEPT AS OTHERWISE PROVIDED IN
SUCH AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR
OTHER DISPOSITION OF THE UNITS REPRESENTED BY THIS CERTIFICATE MAY BE MADE
EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR (B) IF THE PARTNERSHIP
HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER
THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT AND THE
RULES AND REGULATIONS IN EFFECT THEREUNDER.
FOR VALUE RECEIVED, _________________ hereby sell, assign and transfer
unto __________________________________ _________________ limited Partnership
Units represented by the within Certificate, and do hereby irrevocably
constitute and appoint ________________________ Attorney to transfer the said
limited Partnership Units on the books of the within named Partnership with full
power of substitution in the premises.
Dated: ________________ ___________________________
In presence of:
________________________
B-2
<PAGE>
Attachment 1 to Unit Certificate
EXERCISE NOTICE
To:
Reference is made to that certain Amended and Restated Agreement of
Limited Partnership of Cali Realty, L.P. dated as of January 17, 1997 (the
"Partnership Agreement"), pursuant to which Cali Realty Corporation, a Maryland
corporation, and certain other persons, including the undersigned, continued the
Delaware limited partnership known as Cali Realty, L.P. (the "Partnership").
Capitalized terms used but not defined herein shall have the meanings set forth
in the Partnership Agreement. Pursuant to Section 10.3 of the Partnership
Agreement, each of the undersigned, being a limited partner of the Partnership
(an "Exercising Partner"), hereby elects to exercise its Redemption Rights as to
a portion or portions of its Partnership Units, as all specified opposite its
signature below (notwithstanding the foregoing, each of the undersigned hereby
acknowledges and agrees that the General Partner has the right, in its sole and
absolute discretion, to deliver shares of Common Stock to the undersigned in
lieu of all or any portion of the cash requested below by the undersigned, all
in accordance with Section 10.3 of the Partnership Agreement):
Dated:
================================================================================
Number of Number of
Offered Units to Offered Units to
Exercising be Redeemed for be Redeemed for
Partner Shares Cash
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
---------------
- --------------------------------------------------------------------------------
---------------
================================================================================
EXHIBIT 10.61 to FORM 8-K
<PAGE>
================================================================================
THIRD MODIFICATION AND ASSUMPTION OF LOANS AGREEMENT
among
ROBERT MARTIN COMPANY, LLC
and
CALI CW REALTY ASSOCIATES L.P.
and
ELMSFORD REALTY ASSOCIATES L.P.
and
TALLEYRAND REALTY ASSOCIATES L.P.
and
CALI MID-WEST REALTY ASSOCIATES L.P.
and
CALI SO. WEST REALTY ASSOCIATES L.P.
and
CALI WP REALTY ASSOCIATES L.P.
and
TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA
Dated as of
January 31, 1997
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
1. Assumption of the First Replacement Notes............................... 13
2. The Second Mortgage..................................................... 15
3. Termination of YIDA Documents........................................... 15
4. INTENTIONALLY OMITTED................................................... 15
5. Recourse Loan........................................................... 15
6. Prepayment.............................................................. 16
7. Non-Recourse............................................................ 17
8. Representations and Warranties of the
Borrowers and the LLC................................................... 20
9. Transfer, Pledge and Assignment of
Company Interests....................................................... 23
10. Partial Releases........................................................ 23
11. Environmental Indemnity................................................. 25
12. RMC Escrow Agreement.................................................... 25
13. Lockbox Account......................................................... 25
14. Letter Agreement........................................................ 25
15. Miscellaneous........................................................... 25
i
<PAGE>
SCHEDULES
Schedule I-A Schedule of Original Loan A Notes, Mortgages and Lease
Assignments
Schedule I-B Schedule of Original Loan B Notes, Mortgages and Lease
Assignments
Schedule I-C Schedule of Original Loan C Notes, Mortgages and Lease
Assignments
Schedule I-D Schedule of Original Loan D Notes, Mortgages and Lease
Assignments
Schedule I-E Schedule of Original Loan E Notes, Mortgages and Lease
Assignments
Schedule I-F Schedule of Original Loan F Notes, Bonds, Mortgages and Lease
Assignments
Schedule I-G Schedule of Original Loan G Notes, Mortgages and Lease
Assignments
Schedule I-H Schedule of Original Loan H Notes, Mortgages and Lease
Assignments
Schedule I-I Schedule of Original Notes, Mortgages and Lease Assignment
Schedule II Release Prices and List of Properties Subject to Partial
Release
Exhibit A Loan A Property Description
Exhibit B Loan B Property Description
Exhibit C Loan C Property Description
Exhibit D Loan D Property Description
Exhibit E Loan E Property Description
Exhibit F Loan F Property Description
Exhibit G Loan G Property Description
Exhibit H Loan H Property Description
Exhibit I Loan I Property Description
ii
<PAGE>
Exhibit J-1 Form of Amended and Restated First Replacement Mortgage
Exhibit J-2 Form of Amended and Restated First Replacement Assignment of
Leases
Exhibit J-3 Form of Amended and Restated Cross-collateral Mortgage
Exhibit J-4 Form of Amended and Restated Cross-collateral Assignment of
Leases
Exhibit J-5 Form of Consolidation, Spreader and Modification Agreement
Exhibit J-6 Form of Amended and Restated Loan F First Replacement Note
Exhibit K Form of Termination of YIDA Lease
Exhibit L Term Sheet for Recourse Loan
Exhibit M Form of Environmental Indemnity
Exhibit N Form of Termination of RMC Escrow Agreement
Exhibit O Form of Termination of Lock-Box Agreement
Exhibit P Form of Letter Agreement
iii
<PAGE>
THIRD MODIFICATION AND ASSUMPTION OF LOANS AGREEMENT
THIS THIRD MODIFICATION AND ASSUMPTION OF LOANS AGREEMENT is made as of
January __, 1997 by and among ROBERT MARTIN COMPANY, LLC (the "LLC"), a New York
limited liability company, successor-in-interest to ROBERT MARTIN COMPANY, a New
York general partnership (the "Partnership") and having an address at 100
Clearbrook Road, Elmsford, New York 10523, CALI CW REALTY ASSOCIATES L.P. ("Cali
CW"), a New York limited partnership, ELMSFORD REALTY ASSOCIATES L.P. ("Elmsford
Realty"), a New York limited partnership, TALLEYRAND REALTY ASSOCIATES L.P.
("Talleyrand Realty"), a New York limited partnership, CALI MID-WEST REALTY
ASSOCIATES L.P. ("Cali MW"), a New York limited partnership, CALI SO. WEST
REALTY ASSOCIATES L.P. ("Cali SW"), a New York limited partnership, CALI WP
REALTY ASSOCIATES L.P. ("Cali WP"), a New York limited partnership (Cali CW,
Elmsford Realty, Talleyrand Realty, Cali MW, Cali SW and Cali WP are hereinafter
sometimes individually referred to as a "Borrower" and collectively referred to
as the "Borrowers"), each of which has an address at c/o Cali Realty
Corporation, 11 Commerce Drive, Cranford, New Jersey 07016, and TEACHERS
INSURANCE AND ANNUITY ASSOCIATION OF AMERICA, a New York corporation ("TIAA"),
having an address at 730 Third Avenue, New York, New York 10017.
W I T N E S S E T H T H A T :
WHEREAS, on November 19, 1985, TIAA made a loan to the Partnership in the
original principal amount of $15,400,000, which loan was originally (a)
evidenced by the six notes, as assigned and modified, set forth in Schedule I-A
attached hereto (collectively, the "Original Loan A Note"), and (b) secured by,
among other things, (i) the six mortgages, as assigned, consolidated, spread and
modified, set forth in Schedule I-A attached hereto (collectively, the "Original
Loan A Mortgage"), covering certain land described on Exhibit A attached hereto
and the other property described therein and located in Elmsford, New York (the
"Loan A Property"), and (ii) the assignment of lessor's interest in leases set
forth in Schedule I-A attached hereto (the "Original Loan A Lease Assignment");
WHEREAS, on June 30, 1986, TIAA made a loan to the Partnership in the
original principal amount of $26,000,000, which loan was originally (a)
evidenced by the 24 notes, as assigned and modified, set forth in Schedule I-B
attached hereto (collectively, the "Original Loan B Note"), and (b) secured by,
among other things, (i) the 24 mortgages, as assigned, consolidated, spread and
modified, set forth in Schedule I-B attached hereto (collectively, the "Original
Loan B Mortgage"), covering certain land described on Exhibit B attached hereto
and the other
1
<PAGE>
property described therein and located in Elmsford, New York (the "Loan B
Property"), and (ii) the assignment of lessor's interest in leases set forth in
Schedule I-B attached hereto (the "Original Loan B Lease Assignment");
WHEREAS, on June 4, 1986, TIAA made a loan to the Partnership in the
original principal amount of $6,350,000, which loan was originally (a) evidenced
by the note set forth in Schedule I-C attached hereto (the "Original Loan C
Note"), and (b) secured by, among other things, (i) the mortgage set forth in
Schedule I-C attached hereto (the "Original Loan C Mortgage"), covering certain
land described on Exhibit C attached hereto and the other property described
therein and located in Mount Pleasant, New York (the "Loan C Property"), and
(ii) the assignment of lessor's interest in leases set forth in Schedule I-C
attached hereto (the "Original Loan C Lease Assignment");
WHEREAS, on December 9, 1986, TIAA made a loan to the Partnership in the
original principal amount of $93,000,000, which loan was originally (a)
evidenced by the 32 notes, as assigned, consolidated and modified set forth in
Schedule I-D attached hereto (collectively, the "Original Loan D Note"), and (b)
secured by, among other things, (i) the 32 mortgages, as assigned, consolidated,
extended, spread and modified, set forth in Schedule I-D attached hereto
(collectively, the "Original Loan D Mortgage"), covering certain land described
on Exhibit D attached hereto and the other property described therein and
located in Greenburgh, Mount Pleasant, Ossining, White Plains and Yonkers, New
York (the "Loan D Property"), and (ii) the assignment of lessor's interest in
leases set forth in Schedule I-D attached hereto (the "Original Loan D Lease
Assignment");
WHEREAS, on August 11, 1988, TIAA made a loan to the Partnership in the
original principal amount of $30,000,000, which loan was originally (a)
evidenced by the note set forth in Schedule I-E attached hereto (the "Original
Loan E Note"), and (b) secured by, among other things, (i) the mortgage set
forth in Schedule I-E attached hereto (the "Original Loan E Mortgage"), covering
certain land described on Exhibit E attached hereto and the other property
described therein and located in White Plains, New York (the "Loan E Property"),
and (ii) the assignment of lessor's interest in leases set forth in Schedule I-E
attached hereto (the "Original Loan E Lease Assignment");
WHEREAS, on October 12, 1989, TIAA made a loan to the Partnership in the
original principal amount of $10,200,000 and a loan to the City of Yonkers
Industrial Development Agency ("YIDA") in the original principal amount of
$7,000,000, which loans were originally (a) evidenced, in part, by the two notes
issued by the Partnership, as consolidated and modified, set
2
<PAGE>
forth in Schedule I-F attached hereto (collectively, the "Original Loan F
Note"), (b) evidenced, in part, by the 1989 Taxable Industrial Development
Revenue Refunding Bond issued by YIDA, as consolidated and modified, set forth
in Schedule I-F attached hereto (the "Original Loan F Bond"), which Original
Loan F Bond provides that the obligations of YIDA thereunder are limited to
payment of the Original Loan F Bond from the rentals under that certain Amended
and Restated Lease Agreement, dated October 1, 1989, between YIDA and the
Partnership (the "Original YIDA Lease" and, as amended by the First Amendment to
Lease, dated as of July 28, 1993, between YIDA and the Partnership, the "Amended
YIDA Lease"), and (c) secured by, among other things, (i) the three mortgages,
as consolidated, spread and modified, set forth in Schedule I-F attached hereto
(collectively, the "Original Loan F Mortgage"), covering certain land described
on Exhibit F attached hereto and the other property described therein and
located in Yonkers and Greenburgh, New York (the "Loan F Property"), and (ii)
the assignments of lessor's interest in leases set forth in Schedule I-F
attached hereto (the "Original Loan F Lease Assignments");
WHEREAS, on February 5, 1990, TIAA made a loan to the Partnership in the
original principal amount of $37,700,000, which loan was originally (a)
evidenced by the four notes, as assigned, consolidated and modified, set forth
in Schedule I-G attached hereto (collectively, the "Original Loan G Note"), and
(b) secured by, among other things, (i) the four mortgages, as assigned,
consolidated and modified, set forth in Schedule I-G attached hereto
(collectively, the "Original Loan G Mortgage"), covering certain land described
on Exhibit G attached hereto and the other property described therein and
located in Mount Pleasant, New York (the "Loan G Property"), and (ii) the
assignment of lessor's interest in leases, as modified as set forth in Schedule
I-G attached hereto (the "Original Loan G Lease Assignment");
WHEREAS, on September 11, 1990, TIAA made a loan to the Partnership in the
original principal amount of $42,400,000, which loan was originally (a)
evidenced by the four notes, as assigned, consolidated and modified, set forth
in Schedule I-H attached hereto (collectively, the "Original Loan H Note") four
mortgages, as assigned, consolidated and modified, set forth on Schedule I-H
attached hereto (collectively, the "Original Loan H Mortgages") covering certain
land described on Exhibit H attached hereto and the other property described
therein and located in White Plains, New York (the "Loan H Property"), and (ii)
the assignment of lessor's interest in leases, as modified, set forth in
Schedule I-H attached hereto (the "Original Loan H Lease Assignment");
3
<PAGE>
WHEREAS, on July 15, 1982 and on January 29, 1990, TIAA made two loans to
the Partnership and its tenant-in-common (Tallyrand Property, Inc. or Corporate
Property Investors, as applicable), which loans were originally (a) evidenced by
the three notes, as assigned, consolidated and modified, set forth in Schedule
I-I attached hereto (collectively, the "Original Loan I Note"; the Original Loan
A Note, the Original Loan B Note, the Original Loan C Note, the Original Loan D
Note, the Original Loan E Note, the Original Loan F Note, the Original Loan F
Bond, the Original Loan G Note, the Original Loan H Note and the Original Loan I
Note are hereinafter sometimes referred to individually as an "Original Note"
and collectively as the "Original Notes"), and (b) secured by, among other
things, (i) the three mortgages, as assigned, consolidated and modified, set
forth in Schedule I-I attached hereto (collectively, the "Original Loan I
Mortgage"; the Original Loan A Mortgage, the Original Loan B Mortgage, the
Original Loan C Mortgage, the Original Loan D Mortgage, the Original Loan E
Mortgage, the Original Loan F Mortgage, the Original Loan G Mortgage, the
Original Loan H Mortgage and the Original Loan I Mortgage are hereinafter
sometimes referred to collectively as the "Original Mortgages"), covering
certain land described on Exhibit I attached hereto and the other property
described therein and located in Tarrytown, New York (the "Loan I Property"; the
Loan A Property, the Loan B Property, the Loan C Property, the Loan D Property,
the Loan E Property, the Loan F Property, the Loan G Property, the Loan H
Property and the Loan I Property are hereinafter sometimes referred to
individually as a "Property" and collectively as the "Properties"), and (ii) the
assignment of lessor's interest in leases, as modified, set forth in Schedule
I-I attached hereto (the "Original Loan I Lease Assignment");
WHEREAS, pursuant to that certain Modification of Loans Agreement, dated
as of July 28, 1993, among the Partnership, YIDA and TIAA (as amended by the
Supplemental Modification Agreement (as hereinafter defined), the "1993
Modification Agreement"), each of the loans evidenced by the Original Notes
(other than the loans evidenced by the Original Loan I Note) was restructured so
as to modify the maturity date thereof, the interest payable thereunder and
certain other terms relating to the repayment of such loans as more fully set
forth therein and such loans were subsequently further modified by that certain
Modification of Notes, Mortgage and Other Loan Documents (the "Supplemental
Modification Agreement"), dated as of July 30, 1993, among the Partnership, YIDA
and TIAA;
WHEREAS, pursuant to the 1993 Modification Agreement, (i) the Original
Loan A Note was amended and restated in its entirety by that certain First
Amended and Restated Consolidated Mortgage Note, dated as January 1, 1992, from
the Partnership to
4
<PAGE>
TIAA, in the original principal amount of $15,342,294.10 (as amended by the
Supplemental Modification Agreement and by that certain Allonge, dated July 30,
1993, the "Loan A 1993 Amended Note"), (ii) the Original Loan A Mortgage was
amended and restated in its entirety by that certain First Amended and Restated
Consolidated Mortgage and Security Agreement (as amended by the Supplemental
Modification Agreement, the "Loan A 1993 Mortgage"), dated as of July 28, 1993,
between the Partnership and TIAA and (iii) the Original Loan A Lease Assignment
was amended and restated in its entirety by that certain Amended and Restated
Assignment of Lessor's Interest in Leases (as amended by the Supplemental
Modification Agreement, the "Loan A 1993 Lease Assignment") between the
Partnership and TIAA;
WHEREAS, pursuant to the 1993 Modification Agreement, (i) the Original
Loan B Note was amended and restated in its entirety by that certain First
Amended and Restated Consolidated Mortgage Note, dated as January 1, 1992, from
the Partnership to TIAA, in the original principal amount of $25,950,053.98 (as
amended by the Supplemental Modification Agreement and by that certain Allonge,
dated July 30, 1993, the "Loan B 1993 Amended Note"), (ii) the Original Loan B
Mortgage was amended and restated in its entirety by that certain First Amended
and Restated Consolidated Mortgage and Security Agreement (as amended by the
Supplemental Modification Agreement, the "Loan B 1993 Mortgage"), dated as of
July 28, 1993, between the Partnership and TIAA and (iii) the Original Loan B
Lease Assignment was amended and restated in its entirety by that certain
Amended and Restated Assignment of Lessor's Interest in Leases (as amended by
the Supplemental Modification Agreement, the "Loan B 1993 Lease Assignment")
between the Partnership and TIAA;
WHEREAS, pursuant to the 1993 Modification Agreement, (i) the Original
Loan C Note was amended and restated in its entirety by that certain First
Amended and Restated Mortgage Note, dated as January 1, 1992, from the
Partnership to TIAA, in the original principal amount of $6,337,801.65 (as
amended by the Supplemental Modification Agreement and by that certain Allonge,
dated July 30, 1993, the "Loan C 1993 Amended Note"), (ii) the Original Loan C
Mortgage was amended and restated in its entirety by that certain First Amended
and Restated Mortgage and Security Agreement (as amended by the Supplemental
Modification Agreement, the "Loan C 1993 Mortgage"), dated as of July 28, 1993,
between the Partnership and TIAA and (iii) the Original Loan C Lease Assignment
was amended and restated in its entirety by that certain Amended and Restated
Assignment of Lessor's Interest in Leases (as amended by the Supplemental
Modification Agreement, the "Loan C 1993 Lease Assignment") between the
Partnership and TIAA;
WHEREAS, pursuant to the 1993 Modification Agreement, (i) the Original
Loan D Note was amended and restated in its entirety by that certain First
Amended and Restated Consolidated Mortgage Note, dated as January 1, 1992, from
the Partnership to TIAA, in the original principal amount of $93,000,000 (as
amended by the Supplemental Modification Agreement and by that certain Allonge,
dated July 30, 1993, the "Loan D 1993 Amended Note"), (ii) the Original Loan D
Mortgage was amended and restated in its entirety by that certain First Amended
and Restated Consolidated Mortgage and Security Agreement (as amended by the
Supplemental Modification Agreement, the "Loan D 1993 Mortgage"), dated as of
July 28, 1993, between the Partnership and TIAA and (iii) the Original Loan D
Lease Assignment was amended and restated in its entirety by that certain
Amended and Restated Assignment of Lessor's Interest in Leases (as amended by
the Supplemental Modification Agreement, the "Loan D 1993 Lease Assignment")
between the Partnership and TIAA;
5
<PAGE>
WHEREAS, pursuant to the 1993 Modification Agreement, (i) the Original
Loan E Note was amended and restated in its entirety by that certain First
Amended and Restated Consolidated Mortgage Note, dated as January 1, 1992, from
the Partnership to TIAA, in the original principal amount of $30,000,000 (as
amended by the Supplemental Modification Agreement, the "Loan E 1993 Amended
Note"), (ii) the Original Loan E Mortgage was amended and restated in its
entirety by that certain First Amended and Restated Consolidated Mortgage and
Security Agreement (as amended by the Supplemental Modification Agreement, the
"Loan E 1993 Mortgage"), dated as of July 28, 1993, between the Partnership and
TIAA and (iii) the Original Loan E Lease Assignment was amended and restated in
its entirety by that certain Amended and Restated Assignment of Lessor's
Interest in Leases (as amended by the Supplemental Modification Agreement, the
"Loan E 1993 Lease Assignment") between the Partnership and TIAA;
WHEREAS, pursuant to the 1993 Modification Agreement, (i) the Original
Loan F Note was amended and restated in its entirety by that certain First
Amended and Restated Consolidated Mortgage Note, dated as January 1, 1992, from
the Partnership to TIAA, in the original principal amount of $10,200,000 (as
amended by the Supplemental Modification Agreement, the "Loan F 1993 Amended
Note"), (ii) the Original Loan F Bond was amended and restated in its entirety
by that certain First Amended and Restated 1989 Taxable Industrial Development
Revenue Refunding Bond, dated as January 1, 1992, from YIDA to TIAA in the
original principal amount of $7,000,000 (as amended by the Supplemental
Modification Agreement, the "Loan F 1993 Amended Bond"), (iii) the Original Loan
F Mortgage was amended and restated in its entirety by that certain First
Amended and Restated Consolidated Mortgage and Security Agreement (as amended by
the
6
<PAGE>
Supplemental Modification Agreement, the "Loan F 1993 Mortgage"), dated as of
July 28, 1993, between the Partnership, YIDA and TIAA and (iv) the Original Loan
F Lease Assignments were amended and restated in their entirety by that certain
Amended and Restated Assignment of Lessor's Interest in Leases (as amended by
the Supplemental Modification Agreement, the "Loan F 1993 Lease Assignment")
between the Partnership, YIDA and TIAA;
WHEREAS, pursuant to the 1993 Modification Agreement, (i) the Original
Loan G Note was amended and restated in its entirety by that certain First
Amended and Restated Consolidated Mortgage Note, dated as January 1, 1992, from
the Partnership to TIAA, in the original principal amount of $37,700,000 (as
amended by the Supplemental Modification Agreement, the "Loan G 1993 Amended
Note"), (ii) the Original Loan G Mortgage was amended and restated in its
entirety by that certain First Amended and Restated Consolidated Mortgage and
Security Agreement (as amended by the Supplemental Modification Agreement, the
"Loan G 1993 Mortgage"), dated as of July 28, 1993, between the Partnership and
TIAA and (iii) the Loan G Lease Assignment was amended and restated in its
entirety by that certain Amended and Restated Assignment of Lessor's Interest in
Leases (as amended by the Supplemental Modification Agreement, the "Loan G 1993
Lease Assignment") between the Partnership and TIAA;
WHEREAS, pursuant to the 1993 Modification Agreement, (i) the Original
Loan H Note was amended and restated in its entirety by that certain First
Amended and Restated Consolidated Mortgage Note, dated as January 1, 1992, from
the Partnership to TIAA, in the original principal amount of $42,211,848.58 (as
amended by the Supplemental Modification Agreement and by that certain Allonge,
dated July 30, 1993, the "Loan H 1993 Amended Note"; the Loan A 1993 Amended
Note, the Loan B 1993 Amended Note, the Loan C 1993 Amended Note, the Loan D
1993 Amended Note, the Loan E 1993 Amended Note, the Loan F 1993 Amended Note,
the Loan F 1993 Amended Bond, the Loan G 1993 Amended Note and the Loan H 1993
Amended Note are hereinafter sometimes referred to individually as a "1993
Amended Note" and collectively as the "1993 Amended Notes" and the 1993 Amended
Notes and the Loan I Amended Note (as hereinafter defined) are collectively
referred to as the "Amended Notes"), (ii) the Original Loan H Mortgage was
amended and restated in its entirety by that certain First Amended and Restated
Consolidated Mortgage and Security Agreement (as amended by the Supplemental
Modification Agreement, the "Loan H 1993 Amended Mortgage"; the Loan A 1993
Amended Mortgage, the Loan B 1993 Amended Mortgage, the Loan C 1993 Amended
Mortgage, the Loan D 1993 Amended Mortgage, the Loan E 1993 Amended Mortgage,
the Loan F 1993 Amended Mortgage, the Loan F 1993 Amended Bond, the Loan G 1993
Amended Mortgage and the Loan H 1993 Amended Mortgage are hereinafter sometimes
referred to
7
<PAGE>
individually as a "1993 Amended Mortgage" and collectively as the "1993 Amended
Mortgages" and the 1993 Amended Mortgages and the Loan I Amended Mortgage (as
hereinafter defined) are collectively referred to as the "Existing Amended
Mortgages"), dated as of July 28, 1993, between the Partnership and TIAA and
(iii) the Original Loan H Lease Assignment was amended and restated in its
entirety by that certain Amended and Restated Assignment of Lessor's Interest in
Leases (as amended by the Supplemental Modification Agreement, the "Loan H 1993
Lease Assignment"; the Loan A 1993 Lease Assignment, the Loan B 1993 Lease
Assignment, the Loan C 1993 Lease Assignment, the Loan D 1993 Lease Assignment,
the Loan E 1993 Lease Assignment, the Loan F 1993 Lease Assignment, the Loan G
1993 Lease Assignment and the Loan H 1993 Lease Assignment are hereinafter
sometimes referred to individually as a "1993 Lease Assignment" and collectively
as the "1993 Lease Assignments" and the 1993 Lease Assignments and the Loan I
Amended Lease Assignment (as hereinafter defined) are collectively referred to
as the "Existing Amended Lease Assignments"), dated as of July 28, 1993, between
the Partnership and TIAA;
WHEREAS, pursuant to the 1993 Modification Agreement, the Partnership and
YIDA executed a Second Mortgage and Security Agreement (as amended by the
Supplemental Modification Agreement, the "Second Mortgage") and a Subordinate
Assignment of Lessor's Interest in Lease(s) (as amended by the Supplemental
Modification Agreement, the "Subordinate Assignment"), in each case covering the
Properties (other than the Loan I Property) and in favor of TIAA, as security
for the payment and performance by the Partnership of its obligations under that
certain Mortgage Note (the "Additional Note"), dated July 28, 1993, in favor of
TIAA in the original principal amount of $1,500,000;
WHEREAS, pursuant to the 1993 Modification Agreement, the Partnership
executed (a) a separate Third Mortgage and Security Agreement for each of the
Properties (other than the Loan I Property) in favor of TIAA (each such Third
Mortgage and Security Agreement, as amended by the Supplemental Modification
Agreement, is hereinafter referred to individually as a "Cross-collateral
Mortgage" and collectively as the "Cross-collateral Mortgages"), and (b) a
separate Subordinate Assignment of Lessor's Interest in Leases for each of the
Properties (other than the Loan I Property) (each such Subordinate Assignment of
Lessor's Interest in Leases, as amended by the Supplemental Modification
Agreement, is hereinafter referred to individually as a "Cross-collateral Lease
Assignment" and collectively as the "Cross-collateral Lease Assignments"), in
each case as additional security for the payment and performance by the
Partnership of its obligations under the 1993 Amended Notes, the 1993 Amended
8
<PAGE>
Mortgages, the 1993 Lease Assignments and the 1993 Modification Agreement;
WHEREAS, (i) the Original Loan I Note was amended and restated in its
entirety by that certain First Amended and Restated Consolidated Note, dated as
January 1, 1994, from the Partnership to TIAA, in the original principal amount
of $16,366,391.61 (the "Loan I Amended Note"), (ii) the Original Loan I Mortgage
was amended by that certain Consolidation, Modification, Spreader and Extension
Agreement (as amended, the "Loan I Amended Mortgage"), dated as of December 23,
1994, between the Partnership and TIAA and (iii) the Original Loan I Lease
Assignment was amended and restated in its entirety by that certain Amended and
Restated Assignment of Lessor's Interest in Leases (the "Loan I Amended Lease
Assignment");
WHEREAS, on July 16, 1996, the Partnership converted into a limited
liability company under Section 1006 of the New York Liability Company Law and
is now known as the LLC;
WHEREAS, pursuant to the Second Modification of Loans Agreement (the
"Second Modification Agreement"), dated as of December 30, 1996, between the LLC
and TIAA and nine (9) separate Mortgage Splitter and Modification Agreements
(the "Mortgage Splitter Agreements"), each dated as of December 30, 1996,
between the LLC and TIAA, the LLC and TIAA amended the terms of the loans
evidenced by the Amended Notes (other than the loan evidenced by the Loan F 1993
Amended Bond) so as to, among other things, split such loans into (i) separate
first mortgage loans on the Properties in the aggregate principal amount
(together with the principal amount of the loan evidenced by the Loan F 1993
Amended Bond) of $185,283,477, such first mortgage loans evidenced by (a) the
First Replacement Mortgage Note, dated as of December 30, 1996, from the LLC to
TIAA in the principal amount of $10,292,001 (the "Loan A First Replacement
Note"), (b) the First Replacement Mortgage Note, dated as of December 30, 1996,
from the LLC to TIAA in the principal amount of $25,600,537 (the "Loan B First
Replacement Note"), (c) the First Replacement Mortgage Note, dated as of
December 30, 1996, from the LLC to TIAA in the principal amount of $4,462,646
(the "Loan C First Replacement Note"), (d) the First Replacement Mortgage Note,
dated as of December 30, 1996, from the LLC to TIAA in the principal amount of
$58,596,855 (the "Loan D First Replacement Note"), (e) the First Replacement
Mortgage Note, dated as of December 30, 1996, from the LLC to TIAA in the
principal amount of $15,464,970 (the "Loan E First Replacement Note"), (f) the
First Replacement Mortgage Note, dated as of December 30, 1996, from the LLC to
TIAA in the principal amount of $3,058,354 (the "Loan F First Replacement
Note"), and the Loan F 1993 Amended Bond in the amount of $7,000,000, (g) the
First Replacement
9
<PAGE>
Mortgage Note, dated as of December 30, 1996, from the LLC to TIAA in the
principal amount of $21,552,695 (the "Loan G First Replacement Note"), (h) the
First Replacement Mortgage Note, dated as of December 30, 1996, from the LLC to
TIAA in the principal amount of $27,918,366 (the "Loan H First Replacement
Note"), and (i) the First Replacement Mortgage Note, dated as of December 30,
1996, from the LLC to TIAA in the principal amount of $11,337,053 (the "Loan I
First Replacement Note"; the Loan A First Replacement Note, the Loan B First
Replacement Note, the Loan C First Replacement Note, the Loan D First
Replacement Note, the Loan E First Replacement Note, the Loan F First
Replacement Note and the Loan F 1993 Amended Bond (as such Loan F 1993 Amended
Bond may be replaced by the Reduced Subordinate Replacement Note (as hereinafter
defined) and as such Reduced Subordinate Replacement Note and Loan F First
Replacement Note may be consolidated, amended and restated pursuant to the
Amended Loan F First Replacement Note (as hereinafter defined)), the Loan G
First Replacement Note, the Loan H First Replacement Note and the Loan I First
Replacement Note are hereinafter sometimes referred to individually as a "First
Replacement Note" and collectively as the "First Replacement Notes") and (ii) a
separate subordinate mortgage loan on the Properties (other than YIDA's interest
in the Loan F Property) in the aggregate principal amount of $98,637,600.31,
such subordinate mortgage loan evidenced by the Subordinate Replacement Notes
(as defined in the Second Modification Agreement);
WHEREAS, pursuant to the Second Modification and the Mortgage Splitter
Agreements, (i) each First Replacement Note is secured by the Existing Amended
Mortgage affecting the applicable Property, as amended by the Mortgage Splitter
Agreement with respect to such Property (each such mortgage being hereinafter
referred to as a "First Replacement Mortgage" and all such First Replacement
Mortgages being hereinafter collectively referred to as the "First Replacement
Mortgages"), and (ii) the Subordinate Replacement Notes are secured by a
Subordinate Replacement Mortgage and Security Agreement (the "Subordinate
Replacement Mortgage"), dated as of December 30, 1996, between the LLC and TIAA
covering the Properties (other than YIDA's interest in the Loan F Property);
WHEREAS, pursuant to the Second Modification Agreement and nine (9)
separate Lease Assignment Splitter and Modification Agreements (the "Lease
Splitter Agreements"), each dated as of December 30, 1996, between the LLC and
TIAA, (i) each First Replacement Note is also secured by the Existing Amended
Lease Assignment affecting the applicable Property, as amended by the Lease
Splitter Agreement with respect to such Property (each such assignment of
lessor's interest in leases being hereinafter referred to as the "First
Replacement Lease Assignment" and all
10
<PAGE>
such First Replacement Lease Assignments being hereinafter collectively referred
to as the "First Replacement Lease Assignments"), and (ii) the Subordinate
Replacement Notes are also secured by a Subordinate Replacement Assignment of
Lessor's Interest in Leases (the "Subordinate Replacement Lease Assignment"),
dated as of December 30, 1996, between the LLC and TIAA covering the Properties
(other than YIDA's interest in the Loan F Property);
WHEREAS, pursuant to the Second Modification Agreement, (i) the terms of
each of the Cross-collateral Mortgages and the Cross-collateral Assignments were
amended pursuant to separate First Amendments to Third Mortgage and Security
Agreement and to Subordinate Assignment of Lessor's Interest in Leases, each
dated as of December 30, 1996, between the LLC and TIAA so as to, among other
things, secure the First Replacement Notes and to incorporate amendments
necessary to reflect the changes in loan terms contemplated by the Second
Modification Agreement and by the First Replacement Notes (as so amended the
"Loan A-H Cross-collateral Mortgages" and the "Loan A-H Cross-collateral
Assignments", respectively) and (ii) a new cross-collateral mortgage and
security agreement (the "Loan I Cross-collateral Mortgage"; the Loan A-H
Cross-collateral Mortgages and the Loan I Cross-collateral Mortgage are
hereinafter collectively referred to as the "Amended Cross-collateral
Mortgages") and a new subordinate assignment of lessor's interest in leases (the
"Loan I Cross-collateral Lease Assignment"; the Loan A-H Cross-collateral
Assignments and the Loan I Cross-collateral Lease Assignment are hereinafter
collectively referred to as the "Amended Cross-collateral Lease Assignments") on
the Loan I Property was executed by the LLC as additional security for the First
Replacement Notes;
WHEREAS, simultaneously with the execution and delivery hereof, the LLC is
acquiring title to the portion of the Loan F Property owned by YIDA;
WHEREAS, simultaneously with the execution and delivery hereof, the LLC is
transferring the Properties to the Borrowers and simultaneously therewith the
LLC is prepaying in its entirety the Additional Note and the Loan F 1993 Amended
Bond and is prepaying the amount outstanding on the Subordinate Replacement
Notes in excess of $7,000,000 (the remaining $7,000,000 principal amount of the
Subordinate Replacement Notes shall be evidenced by the Subordinate Replacement
Mortgage Note, dated December 30, 1996, from the LLC to TIAA in the original
principal amount of $7,141,646 and as so reduced shall hereinafter be referred
to as the "Reduced Subordinate Replacement Note") (the "Principal Prepayment")
and is making certain other payments to TIAA in connection with the transactions
contemplated hereby;
11
<PAGE>
WHEREAS, as a condition to such transfer of the Properties, the Borrowers
have agreed to assume the First Replacement Notes (subject to the non-recourse
provisions expressly set forth therein);
WHEREAS, TIAA and Borrowers desire to consolidate the Loan F First
Replacement Note and the Reduced Subordinate Replacement Note so as to form a
single first indebtedness of $10,058,354 (as so consolidated, the "Amended Loan
F First Replacement Note") and to consolidate, modify and spread the primary
mortgages securing such notes; and
WHEREAS, TIAA and the Borrowers desire to amend and restate in their
entirety the First Replacement Mortgages, the First Replacement Lease
Assignments, the Amended Cross-collateral Mortgages and the Amended
Cross-collateral Lease Assignments.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the LLC, the Borrowers, and TIAA
hereby agree as follows:
1. Assumption of the First Replacement Notes. Cali CW hereby assumes the
Loan A First Replacement Note and the Loan B Replacement Note. Cali MW hereby
assumes the Loan C First Replacement Note and the Loan G First Replacement Note.
Elmsford Realty, Cali CW, Cali SW, Cali WP and Cali MW each hereby jointly and
severally assumes the Loan D First Replacement Note. Cali WP hereby assumes the
Loan E First Replacement Note and the Loan H First Replacement Note. Cali CW and
Cali SW each hereby jointly and severally assumes the Loan F First Replacement
Note and the Reduced Subordinate Replacement Note. Talleyrand Realty hereby
assumes the Loan I First Replacement Note. Each of the Borrowers agrees to be
personally bound for such performance pursuant to the First Replacement Notes to
the same extent as if said instruments had originally been executed by the
Borrowers, subject to the non-recourse provisions contained therein and herein.
In connection with such assumption, TIAA and the Borrowers are, simultaneously
with the execution and delivery of this Agreement, executing and delivering (a)
Amended and Restated First Replacement Mortgage and Security Agreements, each in
the form of Exhibit J-1 attached hereto (the "Amended and Restated First
Replacement Mortgages"), for each of the Properties, amending and restating in
its entirety each of the First Replacement Mortgages, (b) Amended and Restated
First Replacement Assignment of Lessor's Interest in Leases, each in the form of
Exhibit J-2 attached hereto (the "Amended and Restated First Replacement Lease
Assignments"), for each of the Properties, amending and restating in its
entirety each of the First Replacement Lease Assignments, (c) Amended and
Restated Cross-
12
<PAGE>
collateral Mortgage and Security Agreements, each in the form of Exhibit J-3
attached hereto (the "Amended and Restated Cross-collateral Mortgages"), for
each of the Properties, amending and restating in its entirety each of the
Amended Cross-collateral Mortgages, (d) Amended and Restated Cross-collateral
Assignment of Lessor's Interest in Leases, each in the form of Exhibit J-4
attached hereto (the "Amended and Restated Cross-collateral Lease Assignments"),
for each of the Properties, amending and restating in its entirety each of the
Amended Cross-collateral Lease Assignments, (e) Consolidation, Spreader and
Modification Agreement in the form of Exhibit J-5 attached hereto among Cali CW,
Cali SW and TIAA, and (f) Amended and Restated First Replacement Mortgage Note
in the form of Exhibit J-6 attached hereto (the "Amended Loan F First
Replacement Note") from Cali CW and Cali SW to TIAA, the Borrowers shall execute
and deliver such additional security documents, including, without limitation,
amendments to all existing or new Uniform Commercial Code Financing Statements,
as TIAA may reasonably request. Promptly after the execution and delivery
thereof, the Borrowers shall cause this Agreement and related security documents
to be duly recorded or filed in the appropriate County Recorder's or Secretary
of State's offices and shall pay all recording, registration, filing fees and
other charges in connection therewith. This Agreement, the First Replacement
Notes, the Amended and Restated First Replacement Mortgages, the Amended and
Restated First Replacement Lease Assignments, the Amended and Restated
Cross-collateral Mortgages, the Amended and Restated Cross-collateral Lease
Assignments, and the additional security documents executed by the Borrowers are
hereinafter referred to collectively as the "Loan Documents". TIAA and the
Borrowers acknowledge that from and after the execution and delivery of this
Agreement, the terms of the loans from TIAA to Borrowers, and the Borrowers
obligations to TIAA with respect to such loans, shall be governed by the Loan
Documents and the Environmental Indemnity (as hereinafter defined). All
references in the Loan Documents to the "First Replacement Notes" shall be
deemed to refer to the First Replacement Notes as defined herein.
2. The Second Mortgage and Subordinate Replacement Mortgage. The parties
acknowledge that the Principal Prepayment represents the amounts due under the
Additional Note, and secured by the Second Mortgage and Subordinate Assignment,
and the amounts due under the Subordinate Replacement Note and secured by the
Subordinate Replacement Mortgage and the Subordinate Replacement Lease
Assignment. Simultaneously with the execution and delivery hereof, TIAA will
cause the necessary satisfactions, releases and termination statements related
to the Additional Note, the Second Mortgage, the Subordinate Assignment, the
Subordinate Replacement Notes, the Subordinate Replacement Mortgage and the
Subordinate Replacement Lease Assignment and
13
<PAGE>
related security documents to be executed and delivered to the LLC and the LLC
will cause such documents to be duly recorded or filed in the appropriate county
or secretary of state's offices in New York.
3. Termination of YIDA Documents. Simultaneously with (or prior to) the
execution and delivery of this Agreement, YIDA, the LLC and TIAA, as
appropriate, shall enter into the Lease Termination Agreement in the form of
Exhibit K attached hereto (the "YIDA Lease Termination Agreement"), pursuant to
which the Amended YIDA Lease and certain security documents relating thereto
shall be terminated. Promptly after the execution and delivery thereof, the LLC
shall cause the YIDA Lease Termination Agreement to be duly recorded or filed in
the appropriate county or secretary of state's offices in New York and shall pay
all recording, registration and filing fees and other charges, if any, in
connection therewith. As a result of the execution and delivery of the
above-described documents, YIDA shall no longer have any interest in the Loan F
Property and the loans and security agreements for such Loan F Property shall be
directly between TIAA and Cali CW and Cali SW.
4. INTENTIONALLY OMITTED
5. Recourse Loan. Cali Realty, LP ("CRLP") shall have the right to cause
the loans evidenced by the First Replacement Notes to be refinanced through a
senior unsecured publicly registered and rated recourse loan by TIAA to CRLP
(the "Recourse Loan"), provided that such conversion right shall be subject to
various closing conditions to be agreed upon by TIAA and CRLP, each party acting
reasonably, including, without limitation, the preparation of acceptable loan
documents, the rating of such Recourse Loan as BBB- or better by Standard &
Poor's (or the equivalent rating by Moody's Investors Services) and by either
Fitch Investor Services or Duff & Phelps (or such organization's equivalent
rating), there being no material adverse change in the financial condition of
CRLP, and there being no Event of Default or event which, with the passage of
time or the giving of notice of both, would be an Event of Default under the
Loan Documents or the documents to evidence such Recourse Loan. If CRLP elects
to enter into the Recourse Loan, such Recourse Loan shall be on the terms and
conditions set forth on the term sheet attached hereto as Exhibit L or on such
other terms and conditions as shall be acceptable to CRLP and TIAA and which are
customary for debt issuances by public real estate investment trusts owning
properties similar to the Properties which debt issuances have been rated by
Standard & Poor's (or Moody's Investor Services) and have a rating comparable to
the rating on the Recourse Loan. TIAA and each of the Borrowers agree that any
reference in the First Replacement
14
<PAGE>
Notes to Paragraph 7 of the Second Modification Agreement shall, from and after
the date hereof, be deemed to refer to this Paragraph 5.
6. Prepayment. The First Replacement Notes shall be prepayable in their
entirety (except partial prepayments shall be permitted as set forth in
Paragraph 12 of the Second Modification Agreement) at any time from and after
the date hereof upon delivery to TIAA of not less than fifteen (15) (nor more
than sixty (60)) days prior written notice by the Borrower of their intent to
prepay the First Replacement Notes and upon payment to TIAA of a prepayment
premium as set forth in the First Replacement Notes, all as more fully set forth
in the First Replacement Notes, provided that no prepayment premium shall be
required in connection with the refinancing of the First Replacement Notes
pursuant to the terms set forth in Paragraph 5 hereof. Upon default by any
Borrower and following the acceleration of maturity of any First Replacement
Note, a tender of payment of the amount necessary to satisfy the entire
indebtedness (including sale under any power of sale contained in the security
documents) or during any redemption period after foreclosure, by any Borrower,
its successors or assigns, or by any one on behalf of any Borrower, its
successors or assigns, shall constitute an evasion of the prepayment privilege
and shall be deemed to be a prepayment of the First Replacement Notes and such
prepayment, to the extent permitted by law, will therefore include a premium
required under the prepayment privilege set forth in the First Replacement
Notes.
7. Non-Recourse. Notwithstanding any provisions in this Agreement, the
First Replacement Notes or in the Loan Documents, it is expressly understood and
agreed that if TIAA at any time takes action to enforce the collection of
amounts owing under the First Replacement Notes or the Loan Documents, TIAA will
proceed to foreclose the Amended and Restated First Mortgages and/or the Amended
and Restated Cross-collateral Mortgages and to exercise its remedies with
respect to collateral securing the First Replacement Notes. If, as a result of
such foreclosure and sale of the property described therein, a lesser sum is
realized therefrom than the amount then due and owing under the First
Replacement Notes and any document securing the First Replacement Notes, TIAA
will never institute any action, suit, claim or demand in law or in equity
against the Borrowers or the partners of the Borrowers or any directors,
officers, shareholders or employees of the Borrowers or the partners of
Borrowers seeking personal liability for or on account of such deficiency.
Nothing contained in the immediately preceding paragraph will in any way
affect or impair (i) the lien of the
15
<PAGE>
Amended and Restated First Replacement Mortgages, the Amended and Restated
Cross-collateral Mortgages or any lien on other collateral, TIAA's ability to
foreclose the Amended and Restated First Replacement Mortgages, the Amended and
Restated Cross-collateral Mortgages or any lien on other collateral, or any
representation or warranty of title made by any Borrower, all of which will
remain in full force and effect and inure to the benefit of TIAA and to the
benefit of any insurer of title to a Property; (ii) TIAA's rights under any
master lease, any indemnity agreement or any guarantee given by any Borrower or
the partners of any Borrower to TIAA in connection with the indebtedness
evidenced by the First Replacement Notes; (iii) TIAA's right to present and
collect on any letter of credit in connection with the indebtedness evidenced by
the First Replacement Notes; or (iv) any Borrower's personal liability for the
indebtedness evidenced by any of the First Replacement Notes if at the time of
acceleration of the indebtedness or foreclosure of the Amended and Restated
First Replacement Mortgages or the Amended Cross-collateral Mortgages and sale
of a Property, such Borrower is in default under any of the provisions of
Sections 62, 63 or 64 of any of the Amended and Restated First Replacement
Mortgages or the Amended and Restated Cross-collateral Mortgages (such sections
relating to Environmental Laws as defined therein) and such default has an
adverse effect on the value of such Property, but such personal liability shall
be only to the extent of the loss in value of such Property resulting from such
failure to comply with the provisions of such sections. Further, the following
are excluded and excepted from the provisions of the immediately preceding
paragraph and TIAA may recover personally against the Borrowers for the
following:
(1) all losses, damages or liabilities suffered by TIAA arising out of
any fraud or willful or intentional misrepresentation by the any Borrower or
any of the Borrower's partners, members or principals of any Borrower in
connection (i) with any Borrower's performance or fulfillment of any of
TIAA's conditions to or requirements in advancing the indebtedness evidenced
by the First Replacement Notes or otherwise with any Borrower's inducements
to TIAA to advance such indebtedness; (ii) with the execution and delivery of
any of the documents evidencing or securing the indebtedness evidenced by the
First Replacement Notes; (iii) with the making of any representations or
warranties (which are in addition to the representations and warranties of
title in the Amended and Restated First Replacement Mortgages or the Amended
and Restated Cross-collateral Mortgages covered under the preceding
paragraph) contained in any of the documents evidencing or securing the
indebtedness evidenced by the First Replacement Notes; or (iv) with any
Borrower's performance of any of its obliga-
16
<PAGE>
tions under any of the documents evidencing or securing the indebtedness
evidenced by the First Replacement Notes;
(2) all rents and other revenues, payments or reimbursements ("Income")
of any kind whatsoever (including all payments and contributions from tenants
for taxes, insurance, operating expenses and common area maintenance charges)
derived from a Property after a default by any Borrower (whether or not
notice of such default has been given) under any of the documents evidencing
or securing the indebtedness evidenced by the First Replacement Notes or on
deposit on the date such default occurs in one or more accounts used by any
Borrower or any Borrower's agents, representatives or property manager in
connection with the operation of a Property, except to the extent properly
applied (as documented by evidence reasonably satisfactory to TIAA) to the
normal and customary expenses and operations of a Property;
(3) all security deposits collected by any Borrower (or any of such
Borrower's predecessors) and not properly refunded to tenants and all advance
rents collected by a Borrower (or any of such the Borrower's predecessors)
and not properly applied in due course; proper refunding or application must
be documented by evidence reasonably satisfactory to TIAA;
(4) the replacement cost of any items of personalty or any fixtures
removed from a Property, and not replaced with personalty or fixtures of a
like kind, value and utility, after any Borrower defaults under any of the
documents evidencing or securing the indebtedness evidenced by the First
Replacement Notes;
(5) all losses, damages or liabilities suffered by TIAA arising from
any acts of commission or omission by any Borrower that result in waste upon
a Property;
(6) all payments made by TIAA to discharge mechanic's liens,
materialmen's liens or any other liens arising from work performed on or
materials delivered to a Property prior to foreclosure of the Amended
Restated First Replacement Mortgage or the Amended and Restated
Cross-collateral Mortgage and sale of a Property but only to the extent TIAA
had advanced funds to such Borrower to pay for such work or materials and has
not been reimbursed therefor; and
(7) any insurance or condemnation proceeds attributable to a Property
that are not applied in accordance with the terms of the Amended and Restated
First Replacement
17
<PAGE>
Mortgage or the Amended and Restated Cross-collateral Mortgage and any
insurance or condemnation proceeds attributable to a Property that were not
paid to TIAA when and to the extent required under the terms of the Amended
and Restated First Replacement Mortgages or the Amended and Restated
Cross-collateral Mortgages.
The provisions of this Paragraph 7 shall not be deemed to diminish or
limit the liability of an indemnitor under that certain Environmental Indemnity
dated as of even date herewith from Borrowers and CRLP to TIAA given to
indemnify TIAA against any loss TIAA may incur by reason of a failure to comply
with any Environmental Laws.
8. Representations and Warranties of the Borrowers and the LLC.
(a) In order to induce TIAA to enter into this Agreement, the Borrowers
hereby jointly and severally warrant and represent to TIAA as follows:
(i) Each Borrower is a duly organized and validly existing limited
partnership organized under the laws of the State of Delaware, has all
requisite power and authority to execute and deliver this Agreement and all
other documents and instruments to be executed and delivered by it hereunder,
and to perform its obligations hereunder and under such other documents and
instruments in order to assume all of the obligations of the LLC and the
Partnership as set forth in the Loan Documents in accordance with the terms
and conditions hereof. All necessary actions of the partners of each Borrower
to confer such power and authority upon the persons executing this Agreement
and all documents which are contemplated by this Agreement on its behalf have
been taken.
(ii) This Agreement and the agreements and other documents to be
executed and delivered by each of the Borrowers hereunder, when duly executed
and delivered, will be the legal, valid and binding obligation of such
Borrower, enforceable in accordance with their terms. The performance by each
Borrower of each of its duties and obligations under this Agreement and the
documents and instruments to be executed and delivered by each of them
hereunder will not conflict with, or result in a breach of, or default under,
any provision of any of the organizational documents of each Borrower or any
agreements, instruments, decrees, judgments, injunctions, orders, writs,
laws, rules or regulations, or any determination or award of any court or
arbitrator, to
18
<PAGE>
which each Borrower is a party or by which each of its assets are or may be
bound.
(iii) Each Borrower has furnished to TIAA a true and complete copy of
its Partnership Agreement, as amended to date, and of the Partnership
Agreement of CRLP as amended to date.
(iv) No action, suit, claim, investigation or proceeding, whether legal
or administrative or in meditation or arbitration, is pending or, to best
knowledge of each Borrower, threatened, at law or in equity, against any of
the Borrowers before or by any court or federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality
which would prevent any of the Borrowers from performing their respective
material obligations pursuant to this Agreement or the Loan Documents. There
are no judgments, decrees or orders entered on a suit or proceeding against
any Borrower, an adverse decision in which might, or which judgment, decree
or order does, adversely affect the ability of any Borrower to perform its
respective material obligations pursuant to this Agreement or the Loan
Documents, or which seeks to restrain, prohibit, invalidate, set aside,
rescind, prevent or make unlawful this Agreement or the carrying of this
Agreement or the transactions contemplated hereby.
(v) The execution and delivery of this Agreement and the documents
contemplated hereby and the performance by each Borrower of its respective
obligations hereunder and thereunder do not and will not conflict in any
material respect with or violate any law, rule, judgment, regulation, order,
writ, injunction or decree of any court or governmental or quasi-governmental
entity with jurisdiction over any Borrower, including, without limitation,
the United States of America, the States of New York and New Jersey or any
political subdivision of any of the foregoing, or any decision or ruling of
any arbitrator to which any Borrower is a party or by which any Borrower is
bound or affected.
(vi) The sole general partner of each Borrower is a wholly-owned
subsidiary of the REIT and the sole limited partner of each Borrower is CRLP.
(vii) None of the REIT, CRLP or any Borrower has made a general
assignment for the benefit of creditors, filed any voluntary petition in
bankruptcy or suffered the filing of any involuntary petition by either of
the REIT's, CRLP's or any Borrower's creditors, suffered the appointment of a
receiver to take possession of all, or substantially all, of
19
<PAGE>
the REIT's, CRLP's or any Borrower's assets, suffered the attachment or other
judicial seizure of all, or substantially all, of the REIT's, CRLP's or any
Borrower'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.
(b) In order to induce TIAA to enter into this Agreement, the LLC hereby
represents and warrants to TIAA as follows (it being acknowledged that the
following are representations and warranties made by the LLC for the benefit of
TIAA and that any failure of such representations and warranties to be true and
correct shall not constitute a default under the Loan Documents):
(i) The LLC is a limited liability company duly formed and validly
existing under the laws of the State of New York.
(ii) The LLC has full power and authority to execute and deliver this
Agreement and to perform all transactions (including the execution and
delivery of all documents) required of the LLC for the performance of this
Agreement. This Agreement has been duly authorized and, when executed and
delivered, shall constitute the legal, valid and binding obligation of the
LLC, enforceable in accordance with its terms. Prior to or on the date of
this Agreement, all transactions required by this Agreement to be performed
as of such date by the LLC shall have been duly accomplished, all documents
required by this Agreement to be executed and delivered by the LLC shall have
been duly authorized, executed and delivered and all such documents shall be
enforceable in accordance with their terms.
(iii) The execution and delivery of this Agreement and the performance
by the LLC of all transactions required by this Agreement (including the
execution and delivery of all documents required by this Agreement to be
executed and delivered by the LLC):
(x) do not breach any contractual covenants or restrictions between the
LLC and any third party and do not conflict with the any federal, state
or local laws and the rules and regulations promulgated thereunder;
(y) do not require any consent or approval of any public or private
authority; and
(z) are not threatened with invalidity or unenforceability by any
action, proceeding (including, without limitation, bankruptcy or
insolvency proceed-
20
<PAGE>
ings) or investigation pending or presently threatened by or against
the LLC.
9. Transfer, Pledge and Assignment of Company Interests. Without the prior
written consent of TIAA, CRLP and the REIT shall be prohibited from, directly or
indirectly, transferring, pledging or assigning, in one or more transactions,
any of their respective interests in the Borrowers, provided that it is
understood and agreed that the prior written consent of TIAA shall not be
required for any transfer or conveyance to one or more wholly-owned subsidiaries
of CRLP or the REIT.
10. Partial Releases. If any Borrower shall desire to sell, transfer or
otherwise convey its interest in any Property, or any portion thereof, to an
unaffiliated third party, such Borrower shall have the right to obtain a partial
release of the Amended and Restated First Replacement Mortgage and the Amended
and Restated Cross-collateral Mortgage and the other Loan Documents encumbering
such Property, or portion thereof, subject in each case to the terms and
conditions as set forth in this Paragraph 10. A partial release shall only be
permitted with respect to the properties listed on Schedule II attached hereto
and such properties may not be further subdivided for purposes of this Paragraph
10. In order to qualify for a partial release of the Amended and Restated First
Replacement Mortgage and the Amended and Restated Cross-collateral Mortgage
encumbering such Property, or portion thereof, the Borrower must satisfy all of
the following conditions:
(a) As of the release date, there shall be no Event of Default or
condition or event which, with the giving of notice or the
expiration of time, or both, would constitute an Event of Default
under any of the Loan Documents;
(b) TIAA shall have received, not less than 15 days prior to the
proposed release date (the "Release Date"), a written request for
such release from the Borrower that owns the applicable Property, or
portion thereof, which notice shall specify the Property, or portion
thereof, proposed to be released and the proposed release payment
pursuant to this Paragraph 10.
(c) TIAA shall have received pursuant to this Paragraph 10 with respect
to the requested release of the Property in question, or portion
thereof, a prepayment of the First Replacement Note secured by a
first mortgage on such Property (or portion thereof) in an amount
equal to the amount set
21
<PAGE>
forth on Schedule II attached hereto with respect to such Property
(or portion thereof) plus any accrued interest on the amount of such
prepayment and the prepayment premium, if any, thereon in accordance
with the terms of such First Replacement Note;
(d) TIAA shall have received such title reports and endorsements to the
title insurance policies issued in connection with the Amended and
Restated First Replacement Mortgages and the Amended and Restated
Cross-collateral Mortgages as TIAA shall reasonably require and as
shall be reasonably available confirming that the release of the
Property (or portion thereof) will not affect the title insurance
issued to TIAA on the remaining Properties;
(e) TIAA shall be reasonably satisfied that the release of the Property
in question, or a portion thereof, will not result in a violation in
any applicable legal requirements relating to the building code and
zoning laws with respect to the Properties remaining as collateral
for the First Replacement Notes and that the Property, or a portion
thereof, to be released constitutes a separate tax lot;
(f) All of TIAA's reasonable legal, title, recording and other
transaction costs with respect to such requested release (including
attorney fees and expenses) shall be paid by the Borrower requesting
such release; and
(g) If after the date hereof any entity shall guaranty all or any
portion of the indebtedness evidenced by the First Replacement Notes
or the Loan Documents, such guarantor shall have agreed that the
release of the Property will not affect the terms of its Guaranty.
Upon the satisfaction of all of the foregoing conditions, TIAA shall
execute and deliver to the applicable Borrower on the Release Date a partial
release or partial assignment (without representation or warranty by TIAA and
without recourse to TIAA) of the First Replacement Mortgage and the Amended and
Restated Cross-collateral Mortgage and the other Loan Documents encumbering the
Property (or portion thereof) to be released, such partial release to cover the
portion of the Property to be released as set forth above and to be in a form
22
<PAGE>
reasonably satisfactory to TIAA. TIAA and each of the Borrowers agree that any
reference in the First Replacement Notes to Paragraph 12 of the Second
Modification Agreement shall, from and after the date hereof, be deemed to refer
to this Paragraph 10.
11. Environmental Indemnity. Simultaneously with the execution and
delivery of this Agreement, each Borrower and CRLP shall, in consideration of
the execution and delivery of this Agreement by TIAA, execute and deliver to
TIAA an environmental indemnity agreement in the form of Exhibit M attached
hereto (the "Environmental Indemnity").
12. RMC Escrow Agreement. Pursuant to the 1993 Modification Agreement, the
Partnership established the Impound Escrow Account and the RMC Escrow Account(as
such terms are defined in the 1993 Modification Agreement). Simultaneously with
the execution and delivery of this Agreement, the Impound Escrow Account and the
RMC Escrow Account will be terminated pursuant to a Termination of Escrow
Agreements in the form of Exhibit N attached hereto and the proceeds thereof
will be released to the LLC.
13. Lockbox Account. Pursuant to the 1993 Modification Agreement, the
Partnership established a Lock-Box Account with the Bank (as such terms are
defined in the 1993 Modification Agreement). Simultaneously with the execution
and delivery of this Agreement, the Lock-Box Account shall be terminated and
TIAA, the Bank and the LLC shall enter into a Termination of Lock-Box Agreements
in the form of Exhibit O attached hereto.
14. Letter Agreement. Simultaneously with the execution hereof the
Borrowers and TIAA shall enter into a side letter substantially in the form of
Exhibit P attached hereto, which shall address certain issues regarding the
transaction contemplated herein, including but not limited to press releases
issued by any of the Borrowers and/or CRLP and late charges payable under the
First Replacement Notes.
15. Miscellaneous. References in this Agreement to any document or
agreement shall also include any subsequent amendment, modification,
restatement, consolidation or replacement thereof. Except as expressly set forth
in this Agreement, this Agreement supersedes in its entirety the Second
Modification Agreement. This Agreement may be executed in counterparts. If any
provision of the Loan Documents or other documents delivered in connection
therewith is inconsistent with or contrary to any provision of this Agreement,
the provision of this Agreement shall control and prevail over such inconsistent
or contrary provision in such other document.
23
<PAGE>
IN WITNESS WHEREOF, the LLC, the Borrowers and TIAA have executed and
delivered this Assumption of Loans Agreement as of the date and year first above
written.
ROBERT MARTIN COMPANY, LLC
By /s/ Robert F. Weinberg
---------------------------------
Name: Robert F. Weinberg
Title: Manager
CALI CW REALTY ASSOCIATES L.P.
By: Cali Sub XIII, Inc.,
its sole general partner
By /s/ Roger W. Thomas
---------------------------------
Name: Roger W. Thomas
Title: V.P. and General Counsel
ELMSFORD REALTY ASSOCIATES L.P.
By: Cali Sub XIII, Inc.,
its sole general partner
By /s/ Roger W. Thomas
---------------------------------
Name: Roger W. Thomas
Title: V.P. and General Counsel
TALLEYRAND REALTY ASSOCIATES L.P.
By: Cali Sub XIII, Inc.,
its sole general partner
By /s/ Roger W. Thomas
---------------------------------
Name: Roger W. Thomas
Title: V.P. and General Counsel
24
<PAGE>
CALI MID-WEST REALTY ASSOCIATES L.P.
By: Cali Sub XIV, Inc.,
its sole general partner
By /s/ Roger W. Thomas
---------------------------------
Name: Roger W. Thomas
Title: V.P. and General Counsel
CALI SO. WEST REALTY ASSOCIATES L.P.
By: Cali Sub XIV, Inc.,
its sole general partner
By /s/ Roger W. Thomas
---------------------------------
Name: Roger W. Thomas
Title: V.P. and General Counsel
CALI WP REALTY ASSOCIATES L.P.
By: Cali Sub XIV, Inc.,
its sole general partner
By /s/ Roger W. Thomas
---------------------------------
Name: Roger W. Thomas
Title: V.P. and General Counsel
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By /s/ Mark DePrima
---------------------------------
Name: Mark DePrima
Title: Associate Director
25
<PAGE>
EXHIBIT J-6
FORM OF AMENDED AND RESTATED LOAN F FIRST REPLACEMENT NOTE
AMENDED AND RESTATED FIRST
REPLACEMENT MORTGAGE NOTE
$10,058,354 New York, New York
January ___, 1997
FOR VALUE RECEIVED, the undersigned, CALI CW REALTY ASSOCIATES L.P.,
a New York limited partnership, and CALI SO. WEST REALTY ASSOCIATES L.P., a New
York limited partnership, each having offices at 11 Commerce Drive, Cranford,
New Jersey 07016 (jointly and severally, "Maker"), jointly and severally promise
to pay to TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA ("Holder"), a
New York corporation, or order, during regular business hours at its offices at
730 Third Avenue, New York, New York 10017, or at such other place as may be
designated from time to time in writing by Holder, the principal sum of TEN
MILLION FIFTY-EIGHT THOUSAND THREE HUNDRED FIFTY-FOUR ($10,058,354) DOLLARS, or
so much thereof as may have been advanced hereunder, together with Fixed
Interest (as hereinafter defined) on so much thereof as is from time to time
outstanding and unpaid, all in lawful money of the United States of America
which shall at that time be deemed to be legal tender in payment of all debts
and dues, public and private. The principal amount hereof, and the Fixed
Interest, shall be paid by Maker to Holder as set forth below.
1. Definitions. As used in this Note, the following terms shall have
the following meanings.
"Applicable Rate" shall mean a rate of interest equal to 7.18% per
annum.
"Consolidation Agreement" shall mean the Consolidation, Spreader and
Modification Agreement, dated as of the date hereof, between Maker and
Holder
"Cross-Collateral Mortgages" shall have the meaning specified in
Section 13.
"Default Discount Rate" shall mean the Discount Rate (as hereinafter
defined) less 300 basis points.
"Default Rate" shall mean twelve percent (12%) per annum.
<PAGE>
"Discounted Value" shall mean the discounted value of a Note Payment
(as hereinafter defined), based on the following formula:
NP
-----------
(1 + R/12)^n = Discounted Value
NP = Amount of Note Payment
R = Discount Rate or Default Discount Rate, as the case may be.
n = The number of months between the date of prepayment and the
Maturity Date (as hereinafter defined), rounded to the nearest
integer.
"Discount Rate" shall mean the sum of (a) the yield on a U.S.
Treasury issue selected by Holder, as published by The Wall Street
Journal, two (2) weeks prior to a permitted Payment Date (as hereinafter
defined) having a maturity date corresponding (or most closely
corresponding, if not identical) to the Maturity Date and a coupon
interest rate corresponding (or most closely corresponding, if not
identical) to the rate of interest on this Note and (b) 1%.
"Fixed Interest" shall have the meaning specified in Section 2.
"Holder" shall mean Teachers Insurance and Annuity Association of
America, a New York corporation.
"Loan Documents" shall have the meaning set forth in the Third Loan
Modification Agreement.
"Maker" shall mean, jointly and severally, CALI CW REALTY ASSOCIATES
L.P., a New York limited partnership, and CALI SO. WEST REALTY ASSOCIATES
L.P., a New York limited partnership.
"Maturity Date" shall mean December 31, 2003.
"Mortgage" shall mean the mortgages identified on Schedule I
attached hereto, as consolidated, amended and restated in their entirety
by Amended and Restated Consolidated First Replacement Mortgage, dated as
of the date hereof, between Maker and Holder, covering certain property
described therein and located in Greenburgh and Yonkers, New York.
"Mortgaged Property" shall have the meaning specified in the
Granting Clauses of the Mortgage.
2
<PAGE>
"Note Payments" shall mean any payments of Fixed Interest and
principal under this Note, but does not include other payments under this
Note or the Loan Documents such as late payment charges, interest paid at
the Default Rate, escrow payments or payments made as reimbursement for
sums expended by Holder under the terms of the Loan Documents, whether or
not those sums expended are deemed added to principal pursuant to the
terms of the Loan Documents.
"Other Replacement Notes" shall mean (a) the First Replacement
Mortgage Note, dated December 30, 1996, from Robert Martin Company, LLC
(the "LLC") to Holder, in the principal amount of $10,292,001, (b) the
First Replacement Mortgage Note, dated December 30, 1996, from the LLC to
Holder, in the principal amount of $25,600,537, (c) the First Replacement
Mortgage Note, dated December 30, 1996, from the LLC to Holder, in the
principal amount of $4,462,646, (d) the First Replacement Mortgage Note,
dated December 30, 1996, from the LLC to Holder, in the principal amount
of $15,464,970, (e) the First Replacement Mortgage Note, dated December
30, 1996, from the LLC to Holder, in the principal amount of $58,596,855,
(f) the First Replacement Mortgage Note, dated December 30, 1996, from the
LLC to Holder, in the principal amount of $21,552,695, (g) the First
Replacement Mortgage Note, dated December 30, 1996, from the LLC to
Holder, in the principal amount of $27,918,366 and (h) the First
Replacement Mortgage Note, dated December 30, 1996, from the LLC to
Holder, in the principal amount of $11,337,053.
"Payment Date" shall mean the Maturity Date or any earlier date on
which there is a voluntary or involuntary prepayment of this Note,
including any payment or prepayment of this Note after acceleration or
otherwise.
"Prepayment Date" shall mean the date on which any principal
evidenced by this Note, the accrued Fixed Interest thereon and all other
sums then due and owing under the Loan Documents are paid.
"Prepayment Premium" shall mean the amount by which the sum of the
Discounted Value of Note Payments, calculated at the Discount Rate exceeds
the principal balance of this Note on the Prepayment Date, provided that
(a) if such Prepayment Premium is being calculated in connection with a
prepayment of this Note following the occurrence of an Event of Default
under the Loan Documents the Default Discount Rate shall be used in lieu
of the Discount Rate, and (b) in the case of a partial prepayment of this
Note in accordance with Paragraph 10 of the Third Loan Modification
Agreement, the Note
3
<PAGE>
Payments shall be calculated based upon the principal amount being prepaid
and the Fixed Interest thereon.
"Properties" shall have the meaning specified in the Third Loan
Modification Agreement.
"Replacement Notes" shall mean this Note and the Other Replacement
Notes.
"Third Loan Modification Agreement" shall mean the Third
Modification and Assumption of Loans Agreement, dated as of the date
hereof, among the LLC, Maker, certain other subsidiaries of Cali Realty
L.P. and Holder.
2. Fixed Interest; Payments of Fixed Interest. From and after the
date hereof, fixed interest shall accrue on the principal balance outstanding
hereunder at the Applicable Rate (the "Fixed Interest").
Maker shall make payments on account of Fixed Interest to Holder, at
the address and in the manner specified above, in arrears on the first day of
each calendar month commencing on January 1, 1997 and continuing through and
including December 1, 2003.
3. Maturity Date. The entire unpaid principal balance of this Note,
together with all unpaid Fixed Interest and all sums due hereunder and under the
Mortgage shall be due and payable on the Maturity Date.
4. Prepayment. (a) Maker shall have no right, power or privilege to
prepay this Note in whole or in part except as expressly set forth herein. From
and after the date hereof, Maker shall be entitled to prepay the entire (but not
less than the entire, provided that after the Transfer Date partial prepayments
of this Note shall be permitted in accordance with paragraph 10 of the Third
Loan Modification Agreement) principal balance of this Note on not less than
fifteen (15) days' prior written notice to Holder, together with all unpaid
Fixed Interest and all other sums then due and owing under this Note and the
Mortgage, upon the payment of an amount equal to the Prepayment Premium,
provided that, except with respect to partial prepayments under Paragraph 10 of
the Third Loan Modification Agreement, simultaneously with any such prepayment
Maker shall also prepay all of the Other Replacement Notes in accordance with
their respective terms. Notwithstanding the aforesaid to the contrary, no
Prepayment Premium shall be required in connection with (x) a refinancing of
this Note pursuant to Paragraph 5 of the Third Loan Modification Agreement, or
(y) so long as no Event
4
<PAGE>
of Default has occurred and is continuing, a prepayment of this Note occurring
on or after October 1, 2003.
(b) Maker specifically acknowledges and agrees that if all or any
part of the indebtedness evidenced hereby shall be paid prior to the Maturity
Date for any reason whatsoever, whether such payment is voluntary or involuntary
and whether or not such payment arising by virtue of (i) the exercise by Maker
of the prepayment privilege, if any, expressly reserved in this Note, or (ii) a
default by Maker hereunder or under the Mortgage or any other document
evidencing or securing the loan evidenced hereby or a default arising from the
failure for any reason of Maker to pay the principal balance of this Note after
giving Holder written notice of its intention to make such prepayment, then such
payment, except as set forth in clause (a) above, shall include an amount equal
to the Prepayment Premium. No Prepayment Premium shall be due in connection with
a prepayment of the whole or any part of this Note from insurance proceeds or
condemnation awards.
(c) MAKER HEREBY FURTHER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT
(A) THE PREPAYMENT PREMIUM IS REASONABLE IN AMOUNT, (B) THE PREPAYMENT PREMIUM
SHALL BE PAID WITHOUT PREJUDICE TO THE RIGHT OF HOLDER TO COLLECT ANY OTHER
AMOUNTS PROVIDED TO BE PAID HEREUNDER OR UNDER THE MORTGAGE OR ANY OTHER
DOCUMENT EVIDENCING OR SECURING THE LOAN EVIDENCED HEREBY, (C) ANY TENDER OF
PAYMENT BEFORE THE MATURITY DATE FOR ANY REASON WHATSOEVER (EXCEPT IN CONNECTION
WITH HOLDER'S APPLICATION, IF ANY, OF INSURANCE PROCEEDS OR CONDEMNATION AWARDS
TO REDUCE THE OUTSTANDING PRINCIPAL BALANCE HEREOF AND EXCEPT AS PROVIDED IN
CLAUSE (a) ABOVE) OF ALL OR ANY PART OF THE INDEBTEDNESS EVIDENCED HEREBY SHALL
INCLUDE THE PREPAYMENT PREMIUM, (D) HOLDER SHALL BE ENTITLED TO BID ALL OR A
PORTION OF THE PREPAYMENT PREMIUM AT ANY FORECLOSURE SALE UNDER THE MORTGAGE,
(E) IF AN EVENT OF DEFAULT OCCURS HEREUNDER OR UNDER THE MORTGAGE OR ANY OTHER
DOCUMENT EVIDENCING OR SECURING THE LOAN EVIDENCED HEREBY, HOLDER SHALL BE
ENTITLED TO DAMAGES FOR THE DETRIMENT CAUSED THEREBY, BUT THAT IT IS EXTREMELY
DIFFICULT AND IMPRACTICAL TO ASCERTAIN THE EXTENT OF SUCH DAMAGES AND THAT THE
PREPAYMENT PREMIUM IS A REASONABLE ESTIMATE OF SUCH DAMAGE, AND (F) NOTHING
CONTAINED HEREIN OR IN THE MORTGAGE SHALL BE DEEMED TO MEAN THAT MAKER HAS ANY
RIGHT TO PAY ALL OR ANY PART OF THE INDEBTEDNESS EVIDENCED HEREBY PRIOR TO THE
MATURITY DATE EXCEPT FOR THE PRIVILEGE EXPRESSLY RESERVED TO SO PREPAY, AS SET
FORTH IN THIS NOTE.
MAKER HEREBY ACKNOWLEDGES AND AGREES THAT HOLDER WOULD NOT LEND TO
MAKER THE LOAN EVIDENCED BY THIS NOTE WITHOUT MAKER'S AGREEMENT, AS SET FORTH
ABOVE IN THIS SECTION 4, TO PAY HOLDER A PREPAYMENT PREMIUM HEREUNDER, UPON THE
SATISFACTION OF ALL OR ANY PORTION OF THE PRINCIPAL INDEBTEDNESS EVIDENCED
HEREBY FOLLOWING
5
<PAGE>
THE ACCELERATION OF THE MATURITY DATE HEREOF BY REASON OF A DEFAULT HEREUNDER,
INCLUDING, WITHOUT LIMITATION, A DEFAULT ARISING FROM THE CONVEYANCE OF ANY
RIGHT, TITLE OR INTEREST IN THE MORTGAGED PROPERTY ENCUMBERED BY THE MORTGAGES
IN VIOLATION OF THE MORTGAGE, AND MAKER HAS CAUSED THOSE PERSONS SIGNING THIS
NOTE ON MAKER'S BEHALF TO SEPARATELY SIGN THE AGREEMENT CONTAINED IN THIS
SECTION, SUBJECT TO SECTION 11.
CALI CW REALTY ASSOCIATES L.P.
By: Cali Sub XIII, Inc.,
its general partner
By:
Roger Thomas
Vice President
CALI SO. WEST REALTY ASSOCIATES, L.P.
By: Cali Sub XIII, Inc.,
its general partner
By:
Roger Thomas
Vice President
5. Acceleration Upon Transfer. Maker has represented and warranted
and does hereby represent and warrant that as of the date hereof Maker is a
limited partnership duly organized and validly existing under the laws of the
State of New York and is wholly-owned (directly or indirectly) by Cali Realty,
L.P. ("CRLP") and Cali Realty Corporation (the "REIT"). Maker understands and
acknowledges that Holder, in making the loan evidenced by this Note, is relying
to a material extent upon the business expertise and net worth of CRLP and the
REIT (subject to the terms of Section 11 below) and upon the continuing interest
which CRLP and the REIT shall have in the Mortgaged Property securing this Note.
Accordingly, in the event CRLP and the REIT, shall, directly or indirectly,
voluntarily or involuntarily, sell, assign, transfer, dispose of, enter into any
ground or underlying lease and lease back or further encumber or suffer to exist
any lien (other than the lien of the Mortgage as security for this Note or the
lien of any other mortgage in favor of Holder) against all or any portion of or
any interest in the Mortgaged Property, except as otherwise expressly permitted
under the Mortgage, or in the event the composition or control of Maker is
changed (including, without limitation, the transfer of any interest in Maker or
portion of such interest or the change in control or composition of any partner
in Maker, provided that the
6
<PAGE>
foregoing shall not apply to a change in control or composition of CRLP or the
REIT), then, or at any time thereafter, Holder, at its option, may declare the
entire indebtedness evidenced hereby and/or payable under the Mortgage and/or
any other document evidencing or securing this Note, in default and immediately
due and payable and may exercise any other remedies for default set forth herein
or in any document which secures the indebtedness evidenced hereby, provided
that the foregoing will not apply to any transfer of the Mortgaged Property or
interest in Maker to one or more wholly-owned subsidiaries of CRLP or the REIT.
6. Acceleration Upon Default. If default is made in the payment of
any installment under this Note or if default is made in the performance of any
of the terms, conditions, representations, covenants or warranties contained
herein or in the Mortgage or any other documents evidencing or securing the loan
evidenced hereby, and upon the expiration of any applicable grace period, then
in either such event, at the option of Holder, the entire principal sum
evidenced hereby and secured by the Mortgage, together with interest accrued and
unpaid thereon, and all other sums then outstanding under this Note or the
Mortgage, without notice, shall immediately become due and payable. Failure to
exercise this option by Holder shall not constitute a waiver of the right to
exercise same in the event of any subsequent default.
7. Default Interest. In the event (a) Maker fails to make any
payment hereunder, under the Mortgage or under any other agreement or instrument
evidencing or securing the loan evidenced hereby, or (b) of any default
hereunder or under the Mortgage or under any other agreement or instrument
evidencing or securing the loan evidenced hereby and, in the case of either (a)
or (b), upon acceleration of the entire indebtedness aforesaid, fixed interest
shall accrue thereafter on the unpaid principal balance together with any
accrued but unpaid interest thereon from and including the date of such default
(until the date such default is cured and the indebtedness is reinstated) at the
Default Rate, such interest to be compounded annually. Such interest shall be
paid on demand.
8. Late Charges. In addition to the foregoing, if Maker shall fail
to make any payment of interest or principal or other sum, including, without
limitation, payments due on maturity, on or before the date any such payment is
due, a late charge by way of damages shall be immediately due and payable. Maker
recognizes that default by Maker in making the payments herein or in the
Mortgage or in any other document securing this Note agreed to be paid when due
will result in Holder incurring additional expense in servicing the loan, in
loss to Holder of the use of the money due and in frustration to Holder in
meeting
7
<PAGE>
its loan commitments. Maker agrees that, if for any reason Maker fails to pay on
the date due any amount due under this Note or under the Mortgage or under any
other document securing this Note, Holder shall be entitled to damages for the
detriment caused thereby, but that it is extremely difficult and impractical to
ascertain the extent of such damages. Maker therefore agrees that a sum equal to
five cents ($.05) for each one dollar ($1.00) of each payment which is not paid
when due is a reasonable estimate of the said damages to Holder, which sum shall
be payable by Maker on demand and shall be secured by the Mortgage.
9. Costs of Collection; Attorneys' Fees. Maker shall pay all costs
of collection incurred, whether or not an action or suit be filed, to enforce
this Note, including but not limited to reasonable attorneys' fees. If any suit
or action be instituted on this Note, Maker promises to pay Holder, in addition
to the costs and disbursements allowed by law, such sum as the court may adjudge
reasonable as attorneys' fees in said suit or action.
10. Waivers. Maker and all endorsers hereof and all others who may
become liable for all or any part of this obligation agree hereby to be jointly
and severally bound, and they jointly and severally waive and renounce, to the
extent permitted by law, any and all homestead and exemption rights and the
benefits of all valuation and appraisement privileges as against this
indebtedness and any renewal or extension thereof and waive demand, protest,
notice of nonpayment and any and all lack of diligence or delays in collection
or enforcement hereof, waive the right to plead any and all statutes of
limitation as a defense to any demand on this Note or under the Mortgage and
expressly consent to any extension of time, release of any party liable for this
obligation, release of any of the security of this Note, acceptance of other
security therefor, or any other indulgence or forbearance whatsoever. Any such
extension, release, acceptance, indulgence or forbearance may be made without
notice to any party and without in any way affecting the personal liability of
any party.
11. Non-Recourse. Notwithstanding any provisions in this Note or in
the Mortgage or in any other document securing this Note (except as provided in
the immediately succeeding paragraph), it is expressly understood and agreed
that if Holder at any time takes action to enforce the collection of the
indebtedness evidenced by this Note, the Mortgage, the Cross-collateral
Mortgages and any other documents securing this Note, Holder will proceed to
foreclose the Mortgage and/or one or more of the Cross-collateral Mortgages and
to exercise its remedies with respect to other collateral securing this Note.
If, as a result of such foreclosure and sale of the property described therein,
a
8
<PAGE>
lesser sum is realized therefrom than the amount then due and owing hereunder
and under the Mortgage, the Cross-collateral Mortgages and any other documents
securing this Note, Holder will never (except as expressly provided in the
immediately succeeding paragraph) institute any action, suit, claim or demand in
law or in equity against Maker or its partners or members or any of the
officers, directors, shareholders or employees of Maker or its partners or
members seeking personal liability for or on account of such deficiency.
Nothing contained in the immediately preceding paragraph will in any
way affect or impair (i) the lien of the Mortgage, the Cross-collateral
Mortgages or any lien on other collateral, Holder's ability to foreclose the
Mortgage, the Cross-collateral Mortgages or any lien on other collateral, or any
representation or warranty of title made by Maker, all of which will remain in
full force and effect and inure to the benefit of Holder and to the benefit of
any insurer of title to the Mortgaged Property; (ii) Holder's rights under any
master lease, any indemnity agreement or any guarantee given by Maker or the
partners, members or principals of Maker to Holder in connection with the
indebtedness evidenced by this Note; (iii) Holder's right to present and collect
on any letter of credit given in connection with the indebtedness evidenced by
this Note; or (iv) Maker's personal liability for the indebtedness evidenced by
this Note if at the time of acceleration of the indebtedness or foreclosure of
the Mortgage and sale of the Mortgaged Property, Maker is in default under any
of the provisions of sections 62, 63 or 64 of the Mortgage (being the sections
relating to Environmental Laws as defined therein) and such default has an
adverse effect on the value of the Mortgaged Property, but such personal
liability shall be only to the extent of the loss in value of the Mortgaged
Property resulting from such failure to comply with the provisions of such
sections. Further, the following are excluded and excepted from the provisions
of the immediately preceding paragraph and Holder may recover personally against
Maker for the following:
(1) all losses, damages or liabilities suffered by Holder arising
out of any fraud or willful or intentional misrepresentation by Maker or any of
the Maker's partners, members or principals in connection (i) with Maker's
performance or fulfillment of any of Holder's conditions to or requirements in
advancing the indebtedness evidenced by this Note or otherwise with Maker's
inducements to Holder to advance such indebtedness; (ii) with the execution and
delivery of any of the documents evidencing or securing the indebtedness
evidenced by this Note; (iii) with the making of any representations or
warranties (which are in addition to the representations and warranties of title
in the Mortgage covered under the preceding paragraph) contained in
9
<PAGE>
any of the documents evidencing or securing the indebtedness evidenced by this
Note; or (iv) with Maker's performance of any of its obligations under any of
the documents evidencing or securing the indebtedness evidenced by this Note;
(2) all rents and other revenues, payments or reimbursements
("Income") of any kind whatsoever (including all payments and contributions from
tenants for taxes, insurance, operating expenses and common area maintenance
charges) derived from the Mortgaged Property after a default by Maker (whether
or not notice of such default has been given) under any of the documents
evidencing or securing the indebtedness evidenced by this Note or on deposit on
the date such default occurs in one or more accounts used by Maker or Maker's
agents, representatives or property manager in connection with the operation of
the Mortgaged Property, except to the extent properly applied (as documented by
evidence reasonably satisfactory to Holder) to the normal and customary expenses
and operations of the Mortgaged Property;
(3) all security deposits collected by Maker (or any of Maker's
predecessors) and not properly refunded to tenants and all advance rents
collected by Maker (or any of Maker's predecessors) and not properly applied in
due course; proper refunding or application must be documented by evidence
reasonably satisfactory to Holder;
(4) the replacement cost of any items of personalty or any fixtures
removed from the Mortgaged Property, and not replaced with personalty or
fixtures of a like kind, value and utility, after Maker defaults under any of
the documents evidencing or securing the indebtedness evidenced by this Note;
(5) all losses, damages or liabilities suffered by Holder arising
from any acts of commission or omission by Maker that result in waste upon the
Mortgaged Property;
(6) all payments made by TIAA to discharge mechanic's liens,
materialmen's liens or any other liens arising from work performed on or
materials delivered to the Mortgaged Property prior to foreclosure of the
Mortgage and sale of the Mortgaged Property but only to the extent Holder had
advanced funds to pay for such work or materials and has not been reimbursed
therefor; and
(7) any insurance or condemnation proceeds attributable to the
Mortgaged Property that are not applied in accordance with the terms of the
Mortgage, or the Cross-collateral Mortgage and any insurance or condemnation
proceeds attributable to the Mortgaged Property that were not paid to
10
<PAGE>
Holder when and to the extent required under the terms of the Mortgage or the
Cross-collateral Mortgages.
12. Loan F 1993 Amended Note. This Note has been issued by Maker to
replace the notes identified in Schedule I attached hereto, as assigned,
consolidated and modified as set forth on Schedule I. The effective date of the
modification effected by this instrument is the date hereof. The Holder of this
Note is entitled to the benefit of the Mortgage and the other mortgages referred
to in Section 13, to which reference is made for a description of the properties
and rights included in such security, the nature of such security and the rights
of the holders of this Note and Maker in respect of such security.
13. Mortgages. This Note is secured or to be secured by the Mortgage
covering the Mortgaged Property located in Greenburgh and Yonkers, County of
Westchester, State of New York. This Note is also secured by mortgages listed on
Schedule II attached hereto (the "Cross-collateral Mortgages") covering the
properties more particularly described therein.
14. Miscellaneous. (a) This Note is intended as a contract under and
shall be construed and enforced in accordance with the laws of the State of New
York.
(b) As used herein, the term "Maker" shall be deemed to include its
permitted successors, legal representatives and assigns, whether by voluntary
action by Maker or by the operation of law. As used herein, the term "Holder"
shall be deemed to include its successors, legal representatives and assigns,
whether by voluntary action by Holder or by the operation of law.
(c) References in this Note to any document or agreement shall be
deemed to include all subsequent amendments, modifications, consolidations,
restatements and replacements thereof.
(d) The headings used herein are for convenience of reference only
and shall not limit or otherwise affect any of the terms hereof.
11
<PAGE>
IN WITNESS WHEREOF, the undersigned have duly executed and delivered
this Amended and Restated First Replacement Mortgage Note as of the day and year
first above written acting through the undersigned general partner of the Maker,
said general partner being duly authorized so to act.
CALI CW REALTY ASSOCIATES L.P.
By: Cali Sub XIII, Inc.,
its general partner
By:
Roger Thomas
Vice President
CALI SO. WEST REALTY ASSOCIATES L.P.
By: Cali Sub XIII, Inc.,
its general partner
By:
Roger Thomas
Vice President
12
<PAGE>
SCHEDULE I
ORIGINAL NOTES AND ORIGINAL MORTGAGES
13
<PAGE>
SCHEDULE II
THE CROSS-COLLATERAL MORTGAGES
1. Separate Third Mortgage and Security Agreements, each dated as of July 28,
1993, for Robert Martin Company to Holder, each as amended by the
Supplemental Modification Agreement and by First Amendment to Third
Mortgage and Security Agreement and to Subordinate Assignment of Lessor's
Interest in Leases, dated as of December 30, 1996, between the LLC and
Holder, and each as amended and restated in its entirety by Amended and
Restated Cross-collateral Mortgage and Security Agreement, dated as of the
date hereof, between Maker and Holder, covering the Properties (other than
the Loan F Property and the Loan I Property (as such terms are defined in
the Third Loan Modification Agreement)).
2. Third Mortgage and Security Agreement, dated December 30, 1996, from the
LLC to Holder, covering the Loan I Property and as amended and restated in
its entirety by Amended and Restated Cross-collateral Mortgage and
Security Agreement, dated as of the date hereof, between Maker and Holder.
14
