<PAGE>
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 16, 1998
----------------
Mack-Cali Realty Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 1-13274 22-3305147
- --------------------------------------------------------------------------------
(state or other jurisdiction (Commission (IRS Employer
or incorporation) File Number) Identification Number)
11 Commerce Drive, Cranford , New Jersey 07016
- --------------------------------------------------------------------------------
Registrant's telephone number, including area code (908) 272-8000
--------------
N/A
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Item 5, Other Events
- --------------------
In addition to the acquisition of 54 office properties from the Mack Company and
Patriot American Office Group on December 11, 1997 (which is more fully
described in the Form 8-K, dated December 11, 1997, and is being incorporated
herein by reference), during the period November 19, 1997 through January 16,
1998, Mack-Cali Realty Corporation and subsidiaries (the "Company") acquired
three separate office buildings through three individual transactions with
separate, unrelated sellers (to be collectively referred to as the "Completed
Acquisitions"). The Company also intends to acquire through three individual
transactions with separate, unrelated sellers: (a) an individual office
property, (b) a 22-property office/flex portfolio and (c) a vacant office
property. The Company also intends to acquire developable land with a "build-to-
suit" lease arrangement. The four transactions are to be collectively referred
to as the "Probable Transactions". The Completed Acquisitions and the Probable
Transactions are to be hereinafter collectively referred to as the "Reported
Events".
The following is a brief description of the Completed Acquisitions:
On November 19, 1997, the Company acquired 1000 Madison Avenue ("The Trooper
Building"), a 100,655 square-foot office building located in Lower Providence
Township, Montgomery County, Pennsylvania. The property was acquired for
approximately $14.2 million, which was made available from the Company's cash
reserves.
On December 19, 1997 the Company acquired 100 Overlook Center ("Princeton
Overlook"), a 149,600 square-foot office building, and a 20-acre land parcel
zoned for an additional 149,600 square feet of office development, located in
Princeton, Mercer County, New Jersey. The property was acquired for
approximately $27.1 million, which was funded by the issuance of 41,421 Common
Units in Mack-Cali Realty, L.P. (the Operating Partnership), with a value at
closing of $1.6 million, with the remaining cash portion made available from
drawing on one of the Company's credit facilities.
Additionally, on December 19, 1997, the Company acquired 200 Concord Plaza Drive
("Concord Plaza"), a 248,700 square-foot office building located in San Antonio,
Bexar County, Texas. The property was acquired for approximately $34.1 million,
which was made available from drawing on one of the Company's credit facilities.
The following is a brief description of the Probable Transactions:
The Company has entered into a contract to acquire 500 West Putnam Avenue ("500
West Putnam"), a 121,250 square-foot office building located in Greenwich,
Fairfield County, Connecticut. The property is to be acquired for a total cost
of approximately $20.1 million, $8 million of which is to be funded from drawing
on one of the Company's credit facilities, as well as the assumption of mortgage
debt with an estimated present value of approximately $12.1 million (the "West
Putnam Mortgage"), with an effective annual interest rate of 6.52 percent.
The Company has entered into a separate contract to acquire a 21-building
office/flex portfolio, aggregating approximately 948,060 square feet, with an
option to purchase another 88,000 square foot office/flex property, all located
in the Moorestown West Corporate Center in Moorestown, Burlington County, New
Jersey and in Bromly Commons in Burlington, Burlington County, New Jersey. The
initial 21 properties are to be acquired for a total cost of approximately $60.4
million, with the option property to be purchased upon completion of
construction and required lease-up for approximately $3.7 million (the total of
22 properties, including the option property, to be collectively referred to
hereinafter as the "McGarvey Portfolio"). The contract also allows the Company
to acquire up to six additional office/flex properties totaling 202,000 square
feet upon their development and lease-up. The initial transaction is to be
funded primarily from drawing on one of the Company's credit facilities, as well
as the assumption of
<PAGE>
an aggregate of mortgage debt with an estimated present value of approximately
$15.1 million (the "McGarvey Mortgages"). The McGarvey Mortgages currently have
a weighted average annual effective interest rate of 6.21 percent and are
secured by eight of the office/flex properties being acquired.
The Company also has entered into a separate contract to acquire 2115 Linwood
Avenue ("2115 Linwood"), a 68,000 square-foot vacant office building located in
Fort Lee, Bergen County, New Jersey. The vacant building is expected to be
acquired for approximately $5.1 million, with funds made available from drawing
on one of the Company's credit facilities.
Finally, the Company has entered into a contract to acquire 10 acres of vacant
land at 650 West Avenue ("650 West") in the Stamford Executive Park, located in
Stamford, Fairfield County, Connecticut for $1.4 million, which will be funded
from drawing on one of the Company's credit facilities. The vacant land, on
which the Company plans to develop a 40,000 square-foot office/flex property, is
to be acquired from RMC Development Co., LLC, the "residual" company remaining
after the Company's acquisition of 65 properties from the Robert Martin Company
in January 1997. In conjunction with the proposed acquisition of the developable
land, the Company has signed a 15-year lease, on a triple-net basis, with
Davidoff of Geneva to occupy the entire property to be developed. This "build-
to-suit" lease arrangement is contingent upon the Company completing the
acquisition of the vacant land.
Further information regarding the Completed Acquisitions and the Probable
Transactions is attached on SCHEDULE A.
Each of the Completed Acquisitions and the Probable Transactions was, or will
be, pursuant to individual agreements for the sale and purchase of each property
between each selling entity and the Company. The factors considered by the
Company in determining the price to be paid for the properties include their
historical and expected cash flow, nature of the tenants and terms of leases in
place, occupancy rates, opportunities for alternative and new tenancies, current
operating costs and real estate taxes on the properties and anticipated changes
therein under Company ownership, the physical condition and locations of the
properties, the anticipated effect on the Company's financial results (including
particularly funds from operations) and the ability to sustain and potentially
increase its distributions to Company stockholders, and other factors. The
Company takes into consideration capitalization rates at which it believes other
comparable office buildings had recently sold, but determined the price it is
willing to pay primarily on the factors discussed above relating to the
properties themselves and their fit with the Company's operations. No separate
independent appraisals were, or will be, obtained in connection with the
acquisition of properties by the Company. The Company, after investigation of
the properties, is not aware of any material factors, other than those
enumerated above, that would cause the financial information reported not to be
necessarily indicative of future operating results.
Item 7, Financial Statements, Pro Forma Financial Information and Exhibits
- --------------------------------------------------------------------------
(a) Financial Statements
--------------------
The Statements of Revenue and Certain Expenses included in this report
encompass the following:
. Audited Statement of Revenue and Certain Expenses for The Trooper
Building for the year ended December 31, 1996 and unaudited interim
financial information for the nine months ended September 30, 1997,
<PAGE>
. Audited Statement of Revenue and Certain Expenses for Princeton
Overlook for the year ended December 31, 1996 and unaudited interim
financial information for the nine months ended September 30, 1997,
. Audited Statement of Revenue and Certain Expenses for Concord Plaza
for the year ended December 31, 1996 and unaudited interim
financial information for the nine months ended September 30, 1997,
. Audited Statement of Revenue and Certain Expenses for 500 West
Putnam for the year ended December 31, 1996 and unaudited interim
financial information for the nine months ended September 30, 1997,
and
. Audited Statement of Revenue and Certain Expenses for the McGarvey
Portfolio for the year ended December 31, 1996 and unaudited
interim financial information for the nine months ended September
30, 1997.
(b) Pro Forma Financial Information (unaudited)
-------------------------------------------
Unaudited pro forma financial information for the Company is presented as
follows:
. Condensed consolidated balance sheet as of September 30, 1997.
. Condensed consolidated statements of operations for the nine months
ended September 30, 1997 and the year ended December 31, 1996.
. Estimated twelve-month pro forma statement of taxable net operating
income and operating funds available for the twelve months ended
September 30, 1997.
(c) Exhibits
--------
10.125 - Purchase and Sale Agreement dated November 19, 1997 between The
Trooper Partnership, LTD. and Cali Realty Acquisition
Corporation.
<PAGE>
SCHEDULE A:
MACK-CALI REALTY CORPORATION
Summary of Reported Events
<TABLE>
<CAPTION>
DATE
ACQUIRED TOTAL % OCCUPIED INITIAL
(if SQUARE AS OF COST TO PRINCIPAL TENANTS
transaction FEET DECEMBER YEAR COMPANY (based on percentage of
PROPERTY completed) 31, 1997 COMPLETED (in thousands) property leased)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
The Trooper Building 11/19/97 100,655 97% 1990 $ 14,173 Reality Online Inc. (37%),
1000 Madison Avenue First Chicago National
Lower Providence, Bank (21%),
Montgomery County, Danka Corp. (14%),
Pennsylvania Seton Company (12%)
- --------------------------------------------------------------------------------------------------------------------------------
Princeton Overlook 12/19/97 149,600 99.0% 1988 $ 27,100 Novo Nordisk
100 Overlook Center, Pharmaceutical (24%),
Princeton, Xerox Corp. (24%),
Mercer County, Hydrocarbon Research Inc.
New Jersey (14%),
Hannoch Weisman (10%)
- --------------------------------------------------------------------------------------------------------------------------------
Concord Plaza 12/19/97 248,700 98% 1986 $ 34,100 Colorado Sports Club
200 Concord Plaza Drive, Venture (22%),
San Antonio, Merrill Lynch & Co (12%)
Bexar County,
Texas
- --------------------------------------------------------------------------------------------------------------------------------
500 West Putnam Pending 121,250 100% 1973 $ 20,121 Hachette Magazines, Inc.
500 West Putnam Ave. (27%),
Greenwich, Great Brands of Europe
Fairfield County, (12%),
Connecticut Winklevoss Consultants,
Inc. (12%),
Orthopaedics Associates,
P.C. (11%)
- --------------------------------------------------------------------------------------------------------------------------------
McGarvey Portfolio Pending 1,036,060 97%(a) 1985 $ 64,105 Color Graphics (6%),
(22 Properties) to Stanfas (5%),
Moorestown & Burlington, 1997 C.S.C. (5%)(a)
Burlington County,
New Jersey(a)
- --------------------------------------------------------------------------------------------------------------------------------
2115 Linwood Pending 68,000 Vacant 1981 $ 5,050 N/A
2115 Linwood Ave.
Fort Lee,
Bergen County,
New Jersey
- --------------------------------------------------------------------------------------------------------------------------------
650 West Pending Developable N/A(b) N/A(b) $ 1,411 Davidoff of Geneva (100%)
650 West Ave. Land (b)
Stamford,
Fairfield County,
Conneticut(b)
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL 1,724,265 $166,060
================================================================================================================================
</TABLE>
(a) The McGarvey Portfolio is comprised of 21 office/flex properties, as well as
an 88,000 square-foot office/flex "option" property, which the Company will
acquire once constructed and leased up. The option property was excluded
for purposes of the "percent occupied" calculation.
(b) 650 West is developable land on which the Company plans to develop a 40,000
square-foot office/flex property, for which it has a signed lease with
Davidoff of Geneva for the entire space.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Mack-Cali
Realty Corporation has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
MACK-CALI REALTY CORPORATION
January 16, 1998 By: /s/ Thomas A. Rizk
--------------------------------
Thomas A. Rizk
Chief Executive Officer
January 16, 1998 By: /s/ Barry Lefkowitz
--------------------------------
Barry Lefkowitz
Executive Vice President and
Chief Financial Officer
<PAGE>
- --------------------------------------------------------------------------------
MACK-CALI REALTY CORPORATION
Index to Financial Information
Page
----
THE TROOPER BUILDING
Report of Independent Accountants..........................................
Statements of Revenue and Certain Expenses for:
The Year Ended December 31, 1996.........................................
The Nine Months Ended September 30, 1997 (unaudited).....................
Notes to Statements of Revenue and Certain Expenses.......................
PRINCETON OVERLOOK
Report of Independent Accountants..........................................
Statements of Revenue and Certain Expenses for:
The Year Ended December 31, 1996.........................................
The Nine Months Ended September 30, 1997 (unaudited)
Notes to Statements of Revenue and Certain Expenses.......................
CONCORD PLAZA
Report of Independent Accountants..........................................
Statements of Revenue and Certain Expenses for:
The Year Ended December 31, 1996.........................................
The Nine Months Ended September 30, 1997 (unaudited).....................
Notes to Statements of Revenue and Certain Expenses.......................
500 WEST PUTNAM
Report of Independent Accountants..........................................
Statements of Revenue and Certain Expenses for:
The Year Ended December 31, 1996.........................................
The Nine Months Ended September 30, 1997 (unaudited).....................
Notes to Statements of Revenue and Certain Expenses.......................
McGARVEY PORTFOLIO
Report of Independent Accountants..........................................
Statements of Revenue and Certain Expenses for:
The Year Ended December 31, 1996.........................................
The Nine Months Ended September 30, 1997 (unaudited).....................
Notes to Statements of Revenue and Certain Expenses.......................
MACK-CALI REALTY CORPORATION
Pro Forma (unaudited):
Condensed Consolidated Balance Sheet as of September 30, 1997..............
Condensed Consolidated Statements of Operations for the Nine...............
Months Ended September 30, 1997 and for the Year Ended
December 31, 1996........................................................
Estimated Twelve-Month Pro Forma Statement of Taxable Net
Operating Income and Operating Funds Available for
the Twelve Months September 30, 1997.....................................
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Board of Directors and Shareholders of
Mack-Cali Realty Corporation
Cranford, New Jersey
We have audited the accompanying Statement of Revenue and Certain Expenses for
the Property known as the Trooper Building, for the year ended December 31,
1996. The financial statement is the responsibility of the Property's
management. Our responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial
statement. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying statement of revenue and certain expenses was prepared as
described in Note 2, for the purpose of complying with the rules and regulations
of the Securities and Exchange Commission (for inclusion in the Form 8-K of
Mack-Cali Realty Corporation) and is not intended to be a complete presentation
of The Trooper Building's revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the revenue and certain expenses for The Trooper
Building, on the basis described in Note 2, for the year ended December 31,
1996, in conformity with generally accepted accounting principles ("GAAP").
/s/ Schonbraun, Safris, Sternlieb & Co., L.L.C.
------------------------------------------------------
SCHONBRAUN SAFRIS STERNLIEB & CO., L.L.C.
Certified Public Accountants
Roseland, New Jersey
November 21, 1997
<PAGE>
THE TROOPER BUILDING
--------------------
STATEMENT OF REVENUE AND CERTAIN EXPENSES
-----------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1996
------------------------------------
<TABLE>
<CAPTION>
Revenues
<S> <C>
Base rents (Note 3) $ 967,408
Escalations and recoveries from tenants 368,789
----------
1,336,197
----------
Certain Expenses
Real estate taxes 114,490
Utilities 238,647
Operating services 180,558
General and administration (Note 4) 35,892
----------
569,587
----------
Revenue in excess of certain expenses $ 766,610
==========
</TABLE>
The accompanying notes are an integral part of this Statement of Revenue and
Certain Expenses.
<PAGE>
THE TROOPER BUILDING
--------------------
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
--------------------------------------------------
1. ORGANIZATION AND OPERATION OF PROPERTY
--------------------------------------
For the purpose of the accompanying statement of revenue and certain
expenses, The Trooper Building (the "Property") is an office building
located in Lower Providence Township, Montgomery County, Pennsylvania which
was acquired by a subsidiary of Mack-Cali Realty Corporation, (the
"Company").
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
a. Basis of Presentation
---------------------
The accompanying statement of revenue and certain expenses has been
prepared on the accrual basis of accounting.
The accompanying financial statement is not representative of the
actual operations for the period presented, as certain revenues and
expenses, which may not be comparable to the revenues and expenses to
be earned or incurred by the Company in the future operations of the
Property have been excluded. Revenues excluded consist of interest
and other revenues unrelated to the continuing operations of the
Property. Expenses excluded consist of depreciation of the building
and improvements, and amortization of organization and other
intangible costs and other expenses not directly related to the future
operations of the Property.
b. Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles ("GAAP") requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosures of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the period. Actual results could differ
from those estimates.
c. Revenue Recognition
-------------------
Base rents are recognized on a straight-line basis over the term of
the respective lease.
3. LEASES
------
Leases for the Property have various remaining lease terms of up to six
years with options to certain tenants for renewal. Minimum rental amounts
for certain leases increase as set forth under the terms of each lease. In
addition to base rents, the leases provide for the tenants to pay their
proportionate share of real estate taxes and operating expenses over base
year amounts.
<PAGE>
THE TROOPER BUILDING
--------------------
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
--------------------------------------------------
3. LEASES (Continued)
------
Future minimum rents to be received over the next six years from tenants as
of December 31, 1996 are as follows:
<TABLE>
<CAPTION>
<S> <C>
1997 $1,567,052
1998 1,640,335
1999 1,659,266
2000 1,408,014
2001 1,303,641
2002 366,477
----------
$7,944,785
==========
</TABLE>
For the year ended December 31, 1996, three tenants made up 76.8% of base
rents, comprised of: Reality Online (36.1%), First Chicago National Bank
(25.9%), and Allstate Insurance (14.8%).
For the nine months ended September 30, 1997, four tenants made up 92.8% of
base rents, comprised of: Reality Online (53.3%), First Chicago National
Bank (15.9%), Allstate Insurance (12.1%) and Seton Corporation (11.5%).
4. GENERAL AND ADMINISTRATIVE EXPENSES
-----------------------------------
The Property incurred management fees based on three percent of base rent
received which totaled $24,411 for the year ended December 31, 1996,
$25,277 for the nine months ended September 30, 1997.
5. INTERIM STATEMENTS
------------------
The interim financial data for the nine months ended September 30, 1997 is
unaudited. However, in the opinion of the Property's management, the
interim data includes all adjustments, consisting only of normally
recurring adjustments, necessary for a fair statement of the results for
the interim period. The results for the period presented are not
necessarily indicative of the results to be expected for the entire fiscal
year or any other period.
<PAGE>
THE TROOPER BUILDING
--------------------
STATEMENT OF REVENUE AND CERTAIN EXPENSES
-----------------------------------------
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
--------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Revenue
<S> <C>
Base rents (Note 3) $1,180,656
Escalations and recoveries from tenants 456,959
----------
1,637,615
----------
Certain Expenses
Real estate taxes 91,853
Utilities 196,883
Operating services 155,150
General and administrative (Note 4) 49,255
----------
493,141
----------
Revenue in excess of certain expenses $1,144,474
==========
</TABLE>
The accompanying notes are an integral part of this Statement of Revenue and
Certain Expenses.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Board of Directors and Shareholders of
Mack-Cali Realty Corporation
Cranford, New Jersey
We have audited the accompanying Statement of Revenue and Certain Expenses for
the property known as Princeton Overlook, for the year ended December 31, 1996.
The financial statement is the responsibility of the Property's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial
statement. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying statement of revenue and certain expenses was prepared as
described in Note 2, for the purpose of complying with the rules and regulations
of the Securities and Exchange Commission (for inclusion in the Form 8-K of
Mack-Cali Realty Corporation) and is not intended to be a complete presentation
of Princeton Overlook's revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the revenue and certain expenses for Princeton Overlook,
on the basis described in Note 2, for the year ended December 31, 1996, in
conformity with generally accepted accounting principles ("GAAP").
/s/ Schonbraun, Safris, Sternlieb & Co., L.L.C.
------------------------------------------------
SCHONBRAUN SAFRIS STERNLIEB & CO., L.L.C.
Certified Public Accountants
Roseland, New Jersey
October 15, 1997
<PAGE>
PRINCETON OVERLOOK
------------------
STATEMENT OF REVENUE AND CERTAIN EXPENSES
-----------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1996
------------------------------------
<TABLE>
<S> <C>
Revenue
Base rents (Note 3) $3,268,034
Escalations and recoveries from tenants 226,276
----------
3,494,310
----------
Certain expenses
Real estate taxes 473,396
Utilities 243,866
Operating services 352,985
General and administrative (Note 4) 151,211
----------
1,221,458
----------
Revenue in excess of certain expenses $2,272,852
==========
</TABLE>
The accompanying notes are an integral part of this Statement of Revenue and
Certain Expenses.
<PAGE>
PRINCETON OVERLOOK
------------------
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
--------------------------------------------------
1. ORGANIZATION AND OPERATION OF PROPERTY
--------------------------------------
For the purpose of the accompanying statement of revenue and certain
expenses, Princeton Overlook (the "Property") is an office building located
in Princeton, Mercer County, New Jersey which was acquired by a subsidiary
of Mack-Cali Realty Corporation, (the "Company").
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
a. Basis of Presentation
---------------------
The accompanying statement of revenue and certain expenses has been
prepared on the accrual basis of accounting.
The accompanying financial statement is not representative of the
actual operations for the period presented, as certain revenues and
expenses, which may not be comparable to the revenues and expenses to
be earned or incurred by the Company in the future operations of the
Property have been excluded. Revenues excluded consist of interest
and other revenues unrelated to the continuing operations of the
Property. Expenses excluded consist of depreciation of the building
and improvements, and amortization of organization and other
intangible costs and other expenses not directly related to the future
operations of the Property.
b. Use of Estimates
----------------
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the period. Actual results could differ from those estimates.
c. Revenue Recognition
-------------------
Base rents are recognized on a straight-line basis over the term of
the respective lease.
3. LEASES
------
Leases for the Property have various remaining lease terms of up to seven
years with options to certain tenants for renewal. Minimum rental amounts
for certain leases increase as set forth under the terms of each lease. In
addition to base rents the leases provide for the tenants to pay a portion
of real estate taxes and operating expenses in excess of base year amounts.
<PAGE>
PRINCETON OVERLOOK
------------------
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
--------------------------------------------------
3. LEASES (Continued)
------
Future minimum rents to be received over the next five years from tenants
as of December 31, 1996 are as follows:
<TABLE>
<S> <C>
1997 $ 3,768,529
1998 3,610,455
1999 3,411,623
2000 1,797,483
2001 93,249
----------
$12,681,339
===========
</TABLE>
For the year ended December 31, 1996, four tenants contributed 71.7 percent
of base rents. For the nine months ended September 30, 1997 (unaudited),
four tenants contributed 71.7 percent of base rents.
Hannock Weisman contributed 10.0 percent of base rents for the year ended
December 31, 1996, and the nine months ended September 30, 1997
(unaudited).
Squib Novo contributed 25.8 percent of base rents for the year ended
December 31, 1996 and the nine months ended September 30, 1997 (unaudited).
Xerox Corporation contributed 23.9 percent of base rents for the year ended
December 31, 1996 and the nine months ended September 30, 1997 (unaudited).
Hydrocarbon Research contributed 12.0 percent of base rents for the year
ended December 31, 1996 and the nine months ended September 30, 1997
(unaudited).
4. GENERAL AND ADMINISTRATIVE
--------------------------
The Property incurred management fees based on three percent of revenues
received which totaled $145,466 for the year ended December 31, 1996 and
$111,287 for the nine months ended September 30, 1997 (unaudited).
Effective June 1, 1997, management fees increased to five percent of
revenues received.
<PAGE>
PRINCETON OVERLOOK
------------------
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
--------------------------------------------------
5. INTERIM STATEMENTS
------------------
The interim financial data for the nine months ended September 30, 1997 and
the nine months ended September 30, 1997 are unaudited; however, in the
opinion of the Property's management, the interim data includes all
adjustments, consisting only of normally recurring adjustments, necessary
for a fair statement of the results for the interim period. The results
for the period presented are not necessarily indicative of the results to
be expected for the entire fiscal year or any other period.
The accompanying notes are an integral part of this Statement of Revenue and
Certain Expenses.
<PAGE>
PRINCETON OVERLOOK
------------------
STATEMENT OF REVENUE AND CERTAIN EXPENSES
-----------------------------------------
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
--------------------------------------------
(Unaudited)
<TABLE>
<S> <C>
Revenue
Base rents (Note 3) $2,455,302
Escalations and recoveries from tenants 217,625
----------
2,672,927
----------
Certain expenses
Real estate taxes 371,591
Utilities 177,526
Operating services 266,248
General and administrative (Note 4) 126,089
----------
941,454
----------
Revenue in excess of certain expenses $1,731,473
==========
</TABLE>
The accompanying notes are an integral part of this Statement of Revenue and
Certain Expenses.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Board of Directors and Shareholders of
Mack-Cali Realty Corporation
Cranford, New Jersey
We have audited the accompanying Statement of Revenue and Certain Expenses for
the property known as Concord Plaza, for the year ended December 31, 1996. The
financial statement is the responsibility of the Property's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial
statement. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying statement of revenue and certain expenses was prepared as
described in Note 2, for the purpose of complying with the rules and regulations
of the Securities and Exchange Commission (for inclusion in the Form 8-K of
Mack-Cali Realty Corporation) and is not intended to be a complete presentation
of Concord Plaza's revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the revenue and certain expenses for Concord Plaza, on
the basis described in Note 2, for the year ended December 31, 1996, in
conformity with generally accepted accounting principles ("GAAP").
/s/ Schonbraun, Safris, Sternlieb & Co., L.L.C.
-------------------------------------------------------
SCHONBRAUN SAFRIS STERNLIEB & CO., L.L.C.
Certified Public Accountants
Roseland, New Jersey
November 18, 1997
<PAGE>
CONCORD PLAZA
-------------
STATEMENT OF REVENUE AND CERTAIN EXPENSES
-----------------------------------------
YEAR ENDED DECEMBER 31, 1996
----------------------------
<TABLE>
<S> <C>
Revenue
Base rents (Note 3) $3,530,492
Escalations and recoveries from tenants 610,787
Other income 126,392
----------
4,267,671
----------
Certain Expenses
Real estate taxes 575,223
Utilities 253,540
Operating services 635,729
General and administrative (Note 4) 204,509
----------
1,669,001
----------
Revenue in excess of certain expenses $2,598,670
==========
</TABLE>
The accompanying notes are an integral part of this Statement of Revenue and
Certain Expenses.
<PAGE>
CONCORD PLAZA
-------------
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
--------------------------------------------------
1. ORGANIZATION AND OPERATION OF PROPERTY
--------------------------------------
For the purpose of the accompanying statement of revenue and certain
expenses, Concord Plaza (the "Property") is an office building located in
San Antonio, Bexar County, Texas which was acquired by a subsidiary of
Mack-Cali Realty Corporation, (the "Company").
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
a. Basis of Presentation
---------------------
The accompanying statement of revenue and certain expenses has been
prepared on the accrual basis of accounting.
The accompanying financial statement is not representative of the
actual operations for the period presented, as certain revenues and
expenses, which may not be comparable to the revenues and expenses to
be earned or incurred by the Company in the future operations of the
Property have been excluded. Revenues excluded consist of interest
and other revenues unrelated to the continuing operations of the
Property. Expenses excluded consist of depreciation of the building
and improvements, and amortization of organization and other
intangible costs and other expenses not directly related to the future
operations of the Property.
b. Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles ("GAAP") requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosures of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the period. Actual results could differ
from those estimates.
c. Revenue Recognition
-------------------
Base rents are recognized on a straight-line basis over the term of
the respective lease.
3. LEASES
------
Leases for the Property have various remaining lease terms of up to eleven
years with options to certain tenants for renewal. Minimum rental amounts
for certain leases increase as set forth under the terms of each lease. In
addition to base rents, the leases provide for the tenants to pay a portion
of real estate taxes and operating expenses in excess of base year amounts.
<PAGE>
CONCORD PLAZA
-------------
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
--------------------------------------------------
3. LEASES (Continued)
------
Future minimum rents to be received over the next five years and thereafter
from tenants as of December 31, 1996 are as follows:
<TABLE>
<CAPTION>
<S> <C>
1997 $ 3,644,177
1998 3,701,682
1999 3,483,403
2000 3,253,209
2001 2,610,607
Thereafter 5,768,059
-----------
$22,461,137
===========
</TABLE>
For the year ended December 31, 1996, three tenants make up 40.77% of the
base straight-line rents comprised of: Merrill, Lynch, Pierce, Fenner and
Smith, Inc. (13.88%), Harte Hanks Communications, Inc. (11.08%) and
Colorado Club Sports Venture, L.L.C. (15.81%).
For the nine months ended September 30, 1997, three tenants make up 42.59%
of the base straight-line rents comprised of: Merrill, Lynch, Pierce,
Fenner and Smith, Inc. (14.50%), Harte Hanks Communications, Inc. (11.57%)
and Colorado Club Sports Venture, L.L.C. (16.52%) (unaudited).
4. GENERAL AND ADMINISTRATIVE EXPENSES
-----------------------------------
The Property incurred management fees based on 2.9 percent of gross rents
and other income received which totaled $129,485 for the year ended
December 31, 1996 and $100,773 for the nine months ended September 30, 1997
(unaudited).
5. INTERIM STATEMENTS
------------------
The interim financial data for the nine months ended September 30, 1997 are
unaudited. However, in the opinion of the Property's management, the
interim data includes all adjustments, consisting only of normally
recurring adjustments, necessary for a fair statement of the results for
the interim periods. The results for the periods presented are not
necessarily indicative of the results to be expected for the entire fiscal
year or any other period.
<PAGE>
CONCORD PLAZA
-------------
STATEMENT OF REVENUE AND CERTAIN EXPENSES
-----------------------------------------
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
--------------------------------------------
(unaudited)
-----------
<TABLE>
<CAPTION>
Revenue
<S> <C>
Base rents (Note 3) $2,902,817
Escalations and recoveries from tenants 379,525
Other income 95,162
----------
3,377,504
----------
Certain Expenses
Real estate taxes 463,955
Utilities 197,266
Operating services 429,916
General and administrative (Note 4) 134,654
----------
1,225,791
----------
Revenue in excess of certain expenses $2,151,713
==========
</TABLE>
The accompanying notes are an integral part of this Statement of Revenue and
Certain Expenses.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Board of Directors and Shareholders of
Mack-Cali Realty Corporation
Cranford, New Jersey
We have audited the accompanying statement of revenue and certain expenses for
the property known as 500 West Putnam for the year ended December 31, 1996. The
financial statement is the responsibility of the Property's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial
statement. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying statement of revenue and certain expenses was prepared as
described in Note 2, for the purpose of complying with the rules and regulations
of the Securities and Exchange Commission (for inclusion in Form 8-K of Mack-
Cali Realty Corporation) and is not intended to be a complete presentation of
Concord Plaza's revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the revenue and certain expenses for 500 West Putnam, on
the basis described in Note 2, for the year ended December 31, 1996, in
conformity with generally accepted accounting principles ("GAAP").
/s/ Schonbraun, Safris, Sternlieb & Co., L.L.C.
--------------------------------------------------------------
SCHONBRAUN SAFRIS STERNLIEB & CO., L.L.C.
Certified Public Accountants
Roseland, New Jersey
December 22, 1997
<PAGE>
500 WEST PUTNAM
---------------
STATEMENT OF REVENUE AND CERTAIN EXPENSES
-----------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1996
------------------------------------
<TABLE>
<CAPTION>
Revenue
<S> <C>
Base rents (Note 3) $2,043,659
Escalations and recoveries from tenants 477,289
----------
2,520,948
----------
Certain Expenses
Real estate taxes 163,925
Utilities 271,077
Operating services 314,070
General and administrative (Note 4) 147,318
----------
896,390
----------
Revenue in excess of certain expenses $1,624,558
==========
</TABLE>
The accompanying notes are an integral part of this Statement of Revenue and
Certain Expenses.
<PAGE>
500 WEST PUTNAM
---------------
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
--------------------------------------------------
1. ORGANIZATION AND OPERATION OF PROPERTY
--------------------------------------
For the purpose of the accompanying statement of revenue and certain
expenses, 500 West Putnam (the "Property") is an office building located in
Greenwich, Fairfield County, Connecticut which is expected to be acquired
by a subsidiary of Mack-Cali Realty Corporation, (the "Company").
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
a. Basis of Presentation
---------------------
The accompanying statement of revenue and certain expenses has been
prepared on the accrual basis of accounting.
The accompanying financial statement is not representative of the
actual operations for the period presented, as certain revenues and
expenses, which may not be comparable to the revenues and expenses to
be earned or incurred by the Company in the future operations of the
Property have been excluded. Revenues excluded consist of interest
and other revenues unrelated to the continuing operations of the
Property. Expenses excluded consist of depreciation of the building
and improvements, and amortization of organization and other
intangible costs and other expenses not directly related to the future
operations of the Property.
b. Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles ("GAAP") requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosures of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the period. Actual results could differ
from those estimates.
c. Revenue Recognition
-------------------
Base rents are recognized on a straight-line basis over the term of
the respective lease.
3. LEASES
------
Leases for the Property have various remaining lease terms of up to
thirteen years with options to certain tenants for renewal. Minimum rental
amounts for certain leases increase as set forth under the terms of each
lease. In addition to base rents, the leases provide for the tenants to
pay their proportionate share of real estate taxes and operating expenses
over base year amounts.
<PAGE>
500 WEST PUTNAM
---------------
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
--------------------------------------------------
3. LEASES (Continued)
------
Future minimum rents to be received over the next five years and thereafter
from tenants as of December 31, 1996 are as follows:
<TABLE>
<S> <C>
1997 $ 2,268,461
1998 2,271,990
1999 2,258,878
2000 2,000,824
2001 1,299,182
Thereafter 6,873,077
-----------
$16,972,412
===========
</TABLE>
For the year ended December 31, 1996, four tenants contributed 69.42
percent of base straight-line rents comprised of: Orthopaedic Associates,
P.C. (12.88%), Hachette Magazines, Inc. (26.93%), Great Brands of Europe
(17.29%) and Winklevoss Consultants, Inc. (12.32%).
For the nine months ended September 30, 1997, four tenants contributed
62.08 percent of base straight-line rents comprised of: Orthopaedic
Associates, P.C. (11.52%), Hachette Magazines , Inc. (24.08%), Great Brands
of Europe (15.46%) and Winklevoss Consultants, Inc. (11.02%).
4. GENERAL AND ADMINISTRATIVE
--------------------------
The Property incurred management fees of approximately 5 percent and 6
percent for 1996 and the nine months ended September 30, 1997,
respectively, which amounted to $118,596 for the year ended December 31,
1996, and $117,864 for the nine months ended September 30, 1997.
5. INTERIM STATEMENTS
------------------
The interim financial data for the nine months ended September 30, 1997 is
unaudited. However, in the opinion of the Property's management, the
interim financial data includes all adjustments, consisting only of
normally recurring adjustments, necessary for a fair statement of the
results for the interim periods. The results for the periods presented are
not necessarily indicative of the results to be expected for the entire
fiscal year or any other period.
<PAGE>
500 WEST PUTNAM
---------------
STATEMENT OF REVENUE AND CERTAIN EXPENSES
-----------------------------------------
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
--------------------------------------------
(unaudited)
-----------
<TABLE>
<S> <C>
Revenue
Base rents (Note 3) $1,713,789
Escalations and recoveries from tenants 401,612
----------
2,115,401
----------
Certain Expenses
Real estate taxes 125,856
Utilities 200,949
Operating services 265,722
General and administrative (Note 4) 139,255
----------
731,782
----------
Revenue in excess of certain expenses $1,383,619
==========
</TABLE>
The accompanying notes are an integral part of this Statement of Revenue and
Certain Expenses.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Board of Directors and Shareholders of
Mack-Cali Realty Corporation
Cranford, New Jersey
We have audited the accompanying statement of revenue and certain expenses for
the properties known as McGarvey Portfolio, for the year ended December 31,
1996. The financial statement is the responsibility of the Property's
management. Our responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial
statement. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying statement of revenue and certain expenses was prepared as
described in Note 2, for the purpose of complying with the rules and regulations
of the Securities and Exchange Commission (for inclusion in a Form 8-K of Mack-
Cali Realty Corporation) and is not intended to be a complete presentation of
McGarvey Portfolio revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the revenue and certain expenses for McGarvey Portfolio,
on the basis described in Note 2, for the year ended December 31, 1996, in
conformity with generally accepted accounting principles ("GAAP").
/s/ Schonbraun, Safris, Sternlieb & Co., L.L.C.
-------------------------------------------------------
SCHONBRAUN SAFRIS STERNLIEB & CO., L.L.C.
Certified Public Accountants
Roseland, New Jersey
October 10, 1997
<PAGE>
McGARVEY PORTFOLIO
------------------
STATEMENT OF REVENUE AND CERTAIN EXPENSES
-----------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1996
------------------------------------
<TABLE>
<S> <C>
Revenue
Base rents (Note 3) $3,969,052
Recoveries from tenants 1,122,819
----------
5,091,871
----------
Certain Expenses
Real estate taxes 586,455
Utilities 98,490
Operating services 405,185
General and administrative (Note 4) 21,596
----------
1,111,726
----------
Revenue in excess of certain expenses $3,980,145
==========
</TABLE>
The accompanying notes are an integral part of this Statement of Revenue and
Certain Expenses.
<PAGE>
McGARVEY PORTFOLIO
------------------
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
--------------------------------------------------
1. ORGANIZATION AND OPERATION OF PROPERTY
--------------------------------------
For the purpose of the accompanying statement of revenue and certain
expenses, McGarvey Portfolio (the "Properties") are 21 office/flex
buildings located in southern New Jersey which are expected to be acquired
by a subsidiary of Mack-Cali Realty Corporation (the "Company").
Another property, which is currently being constructed, will be considered
an option property to be acquired by the Company subsequent to the
acquisition of the 21 original buildings. As this property is not in
operation, it was excluded from these statements.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
a. Basis of Presentation
---------------------
The accompanying statement of revenue and certain expenses has been
prepared on the accrual basis of accounting.
The accompanying financial statement is not representative of the
actual operations for the period presented, as certain revenues and
expenses, which may not be comparable to the revenues and expenses to
be earned or incurred by the Company in the future operations of the
Property have been excluded. Revenues excluded consist of interest
and other revenues unrelated to the continuing operations of the
Property. Expenses excluded consist of depreciation of the building
and improvements, and amortization of organization and other
intangible costs and other expenses not directly related to the future
operations of the Property.
b. Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles ("GAAP") requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosures of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the period. Actual results could differ
from those estimates.
c. Revenue Recognition
-------------------
Base rents are recognized on a straight-line basis over the term of
the respective lease.
3. LEASES
------
The Properties are leased to tenants under operating leases with expiration
dates through 2009 with options to certain tenants for renewal.
Substantially all of the leases provided for annual base rent plus
recoveries based upon the tenants proportionate share of increases in real
estate taxes and certain operating costs as defined.
<PAGE>
McGARVEY PORTFOLIO
------------------
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
--------------------------------------------------
3. LEASES (Continued)
------
Future minimum rents to be received over the next five years and thereafter
from tenants as of December 31, 1996 are as follows:
<TABLE>
<CAPTION>
<S> <C>
1997 $5,031,704
1998 4,856,736
1999 4,189,320
2000 3,780,186
2001 2,455,047
Thereafter 4,700,744
----------
$25,013,737
===========
</TABLE>
4. RELATED PARTY TRANSACTIONS
--------------------------
The Properties incurred landscaping and repair and maintenance expenses
paid to related parties which totaled $110,512 for the year ended December
31, 1996 and $14,122 for the nine months ended September 30, 1997
(unaudited).
Related party revenue totaled $92,225 for the ended December 31, 1996 and
$55,181 for the nine months ended September 30, 1997 (unaudited).
5. INTERIM STATEMENTS
------------------
The interim financial data for the nine months ended September 30, 1997 is
unaudited. However, in the opinion of management, the interim data
includes all adjustments, consisting only of normally recurring
adjustments, necessary for a fair statement of the results for the interim
period. The results for the period presented are not necessarily indicative
of the results to be expected for the entire fiscal year or any other
period.
<PAGE>
McGARVEY PORTFOLIO
------------------
STATEMENT OF REVENUE AND CERTAIN EXPENSES
-----------------------------------------
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
--------------------------------------------
(unaudited)
-----------
<TABLE>
<S> <C>
Revenue
Base rent (Note 3) $3,716,904
Recoveries from tenants 874,897
----------
4,591,801
----------
Certain Expenses
Real estate taxes 466,313
Utilities 120,797
Operating services 347,938
General and administrative (Note 4) 17,670
----------
952,718
----------
Revenue in excess of certain expenses $3,639,083
==========
</TABLE>
The accompanying notes are an integral part of this Statement of Revenue and
Certain Expenses.
<PAGE>
MACK-CALI REALTY CORPORATION
Pro Forma Condensed Consolidated Balance Sheet (unaudited)
As of September 30, 1997 (in thousands)
- --------------------------------------------------------------------------------
The following unaudited pro forma condensed consolidated balance sheet is
presented as if the completion by the Company of the Mack Transaction (as
referred to in the Company's Current Report on Form 8-K, dated December 11,
1997 incorporated by reference herein), and the acquisitions of the Trooper
Building, Princeton Overlook, Concord Plaza, 500 West Putnam, the McGarvey
Portfolio, 2115 Linwood and 650 West had occurred on September 30, 1997. This
unaudited pro forma condensed consolidated balance sheet should be read in
conjunction with the pro forma condensed consolidated statement of operations of
the Company and the historical financial statements and notes thereto of the
Company included in the Company's Form 10-K for the year ended December 31,
1996, the Company's Form 10-Q for the nine months ended September 30, 1997, and
the Company's Current Report on Form 8-K (relating to the Mack Transaction),
dated December 11, 1997, respectively.
The pro forma condensed consolidated balance sheet is unaudited and is not
necessarily indicative of what the actual financial position of the Company
would have been had the aforementioned acquisition actually occurred on
September 30, 1997, nor does it purport to represent the future financial
position of the Company.
<TABLE>
<CAPTION>
Pro Forma
Unadjusted Adjustments Company
Company for Reported Pro Forma
ASSETS Pro Forma(a) Events (unaudited)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Rental property, net $2,453,729 $166,060(b) $2,619,789
Cash and cash equivalents 3,409 -- 3,409
Unbilled rents receivable 25,617 -- 25,617
Deferred charges and other
assets, net 18,571 -- 18,571
Restricted cash 6,621 -- 6,621
Accounts receivable, net 5,637 -- 5,637
Mortgage note receivable 7,250 -- 7,250
- --------------------------------------------------------------------------------
Total assets $2,520,834 $166,060 $2,686,894
================================================================================
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Mortgages and loans payable $ 913,856 $164,436 (c) $1,078,292
Dividends and distributions payable 20,377 -- 20,377
Accounts payable and accrued
expenses 21,711 -- 21,711
Accrued interest payable 2,081 -- 2,081
Rents received in advance
and security deposits 27,801 -- 27,801
- --------------------------------------------------------------------------------
Total liabilities 985,826 164,436 1,150,262
- --------------------------------------------------------------------------------
Minority interest of unitholders in
Operating Partnership 376,831 1,624 (d) 378,455
- --------------------------------------------------------------------------------
Stockholders' equity
Common stock, $.01 par value 496 -- 496
Other stockholders' equity 1,157,681 -- 1,157,681
- --------------------------------------------------------------------------------
Total stockholders' equity 1,158,177 -- 1,158,177
- --------------------------------------------------------------------------------
Total liabilities and stockholders'
equity $2,520,834 $166,060 $2,686,894
================================================================================
</TABLE>
See accompanying footnotes on subsequent page.
<PAGE>
MACK-CALI REALTY CORPORATION
Notes to Pro Forma Condensed Consolidated Balance Sheet (unaudited)
As of September 30, 1997 (in thousands)
- --------------------------------------------------------------------------------
(a) Amounts are incorporated by reference from the Company's Current Report on
Form 8-K, relating to the completion of the Mack Transaction and related
1997 Offering, dated December 11, 1997. Reference should be made to the
Pro Forma Condensed Consolidated Balance Sheet and related Notes thereto
included in such Current Report.
(b) Represents the approximate aggregate cost of the Reported Events,
consisting of the acquisitions of the Trooper Building on November 19, 1997
for $14,173, Princeton Overlook on December 19, 1997 for $27,100 and
Concord Plaza December 19, 1997 for $34,100, and the proposed acquisitions
of 500 West Putnam for $20,121, the McGarvey Portfolio for $64,105, 2115
Linwood for $5,050 and 650 West for $1,411.
(c) Represents the Company's assumption of the McGarvey Mortgages with an
estimated present value of $15,085 and the West Putnam Mortgage with an
estimated present value of $12,104, as well as the approximate aggregate
pro forma drawings on the Company's credit facilities of $137,247, which
are to be, and have been used, as the primary means in funding the cash
portion of the Reported Events, listed in note (b) above.
(d) Represents the issuance of 41,421 Common Units in the Operating Partnership
in connection with the completion of the Princeton Overlook acquisition.
<PAGE>
MACK-CALI REALTY CORPORATION
Pro Forma Condensed Consolidated Statement of Operations (unaudited)
For the Nine Months Ended September 30, 1997
And the Year Ended December 31, 1996
- --------------------------------------------------------------------------------
The unaudited pro forma condensed consolidated statements of operations for the
nine months ended September 30, 1997 and for the year ended December 31, 1996
are presented as if each of the following had occurred on January 1, 1996: (i)
the partial prepayment by the Company of its Initial Mortgage Financing
("Partial Prepayment") in 1996, (ii) the disposition by the Company of its
property at 15 Essex Road in Paramus, New Jersey ("Essex Road") in 1996, (iii)
the acquisition by the Company of the properties known as 103 Carnegie, Rose
Tree, the Mount Airy Road Buildings , Five Sentry Parkway, Harborside, Whiteweld
Centre, One Bridge Plaza and Airport Center in 1996, (iv) the net proceeds
received by the Company as a result of its common stock offering of 3,450,000
shares on August 13, 1996 (the "August Offering"), (v) the net proceeds received
by the Company as a result of its common stock offering of 17,537,500 shares on
November 22, 1996 (the "November Offering"), (vi) the completion by the Company
of the RM Transaction, (vii) the acquisitions of 1345 Campus Parkway, Westlakes
Office Park, the Moorestown Buildings, Shelton Plaza, 200 Corporate and Three
Independence in 1997, (viii) the completion by the Company of the Mack
Transaction and the 1997 Offering (which are more fully discussed in the
Company's Current Report on Form 8-K, dated December 11, 1997 incorporated by
reference herein), and (ix) the acquisitions of The Trooper Building, Princeton
Overlook and Concord Plaza in 1997, and the pending acquisitions of 500 West
Putnam, the McGarvey Portfolio, 2115 Linwood and 650 West (all to be
collectively referred to as the "Reported Events").
Such pro forma information is based upon the historical consolidated results of
operations of the Company for the nine months ended September 30, 1997 and for
the year ended December 31, 1996, after giving effect to the transactions
described above. The pro forma condensed consolidated statements of operations
should be read in conjunction with the pro forma condensed consolidated balance
sheet of the Company and the historical financial statements and notes thereto
of the Company included in the Company's Form 10-Q for the nine months ended
September 30, 1997, in the Company's Form 10-K for the year ended December 31,
1996, and in the Company's Current Report on Form 8-K (relating to the Mack
Transaction) dated December 11, 1997.
The unaudited pro forma condensed consolidated statements of operations are not
necessarily indicative of what the actual results of operations of the Company
would have been assuming the transactions had been completed as set forth above,
not does it purport to represent the Company's results of operations for future
periods.
<PAGE>
MACK-CALI REALTY CORPORATION
Pro Forma Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 1997
(in thousands, except per share amount)
- --------------------------------------------------------------------------------
(unaudited)
<TABLE>
<CAPTION>
Unadjusted Pro Forma Adj.
Company for Reported Company
REVENUES Pro Forma (b) Events Pro Forma
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Base rents $259,592 $12,385 (a) $271,977
Escalations and recoveries
from tenants 36,370 2,331 (a) 38,701
Parking and other 11,900 95 (a) 11,995
Interest income 1,312 -- 1,312
- --------------------------------------------------------------------------------
Total revenues 309,174 14,811 323,985
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Real estate taxes 31,813 1,520 (a) 33,333
Utilities 24,466 894 (a) 25,360
Operating services 37,320 1,465 (a) 38,785
General and administrative 16,254 467 (a) 16,721
Depreciation and
amortization 44,134 2,396 (a) 46,530
Interest expense 47,816 8,014 (c) 55,830 (c)
- --------------------------------------------------------------------------------
Total expenses 201,803 14,756 216,559
- --------------------------------------------------------------------------------
Income before minority
interest 107,371 55 107,426
Minority interest 22,073 70 (d) 22,143 (d)
- --------------------------------------------------------------------------------
Net income $ 85,298 ($15) $ 85,283
================================================================================
Weighted average common
shares outstanding 49,668 49,668 (e)
------ ------
Net income per common share (f) $ 1.72 $ 1.72
------ ------
</TABLE>
<PAGE>
MACK-CALI REALTY CORPORATION
Notes to Pro Forma Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 1997
(in thousands)
- --------------------------------------------------------------------------------
(a) Reflects:
Revenues and expenses for the Reported Events for the nine months ended
September 30, 1997, as follows:
<TABLE>
<CAPTION>
Real
Date Base Escalations/ Other Estate Operating General and
Property (1) Acquired Rents (2) Recoveries Income Taxes Utilities Services Administrative Depreciation (3)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
The Trooper Building November 19, 1997 $ 1,181 $ 457 -- $ 92 $197 $ 155 $ 49 $ 213
Princeton Overlook December 19, 1997 2,813 218 -- 372 178 266 126 407
Concord Plaza December 19, 1997 2,822 379 $95 464 197 430 135 512
500 West Putnam Pending 1,810 402 -- 126 201 266 139 302
McGarvey Portfolio Pending 3,759 875 -- 466 121 348 18 962
- ------------------------------------------------------------------------------------------------------------------------------------
Total Pro Forma Adj. for
Reported Events $12,385 $2,331 $95 $1,520 $894 $1,465 $467 $2,396
====================================================================================================================================
</TABLE>
(1) 2115 Linwood and 500 West were not in operations, due to being a vacant
building and vacant land, respectively, during 1996 and for the nine months
ended September 30, 1997.
(2) Pro forma base rents are presented on a straight-line basis calculated from
January 1, 1996 forward.
(3) Depreciation is based on the building-related portion of the purchase price
and associated costs depreciated using the straight-line method over a 40-
year life.
<PAGE>
MACK-CALI REALTY CORPORATION
Notes to Pro Forma Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 1997
(in thousands)
- --------------------------------------------------------------------------------
(b) Amounts are incorporated by reference from the Company's Current Report on
Form 8-K, relating to the completion of the Mack Transaction and related
1997 Offering, dated December 11, 1997. Reference should be made to the Pro
Forma Condensed Consolidated Statements of Operations for the Nine Months
Ended September 30, 1997 and related Notes thereto included in such Current
Report.
(c) Pro forma adjustment to interest expense for the nine months ended September
30, 1997 reflects interest on mortgage debt assumed with certain
acquisitions and additional borrowings from the Company's credit facilities
to fund certain acquisitions. Pro forma interest expense for the nine months
ended September 30, 1997 is computed as follows:
<TABLE>
<S> <C>
Interest expense on the Initial Mortgage Financing, after the Partial Pre- $ 3,665
payment (fixed interest rate of 8.02 percent on $44,313 and variable rate of
30-day LIBOR plus 100 basis points on $20,195; weighted average interest rate
used is 6.60 percent)
Interest expense on loan assumed with Fair Lawn acquisition on March 3, 1995 1,154
(fixed interest rate of 8.25 percent on average outstanding principal balance
of approximately $18,605)
Interest expense on mortgages in connection with the Harborside acquisition in 8,125
1996 (fixed interest rate of 7.32 percent on $107,912 and initial rate of 6.99
percent on $42,088)
Interest expense on Teachers Mortgage assumed with the RM Transaction on January 9,977
31, 1997 (fixed interest rate of 7.18 percent on $185,283)
Interest expense on Mack Assumed Debt ($291,883) with a weighted average 16,791
interest rate of 7.67 percent
Interest expense on West Putnam Mortgage ($12,104) with an effective interest 592
rate of 6.52 percent
Interest expense on McGarvey Mortgages ($15,085) with a weighted average 703
effective interest rate of 6.21 percent
Interest expense on Pro Forma drawings on the Company's credit facilities of 14,100
$274,356 at a weighted average rate of 6.85 percent
Historical amortization of deferred mortgage, finance and title costs for the 723
nine months ended September 30, 1997 -------
Pro forma interest expense for the nine months ended September 30, 1997: $55,830
-------
Unadjusted Company Pro Forma Interest Expense 47,816
-------
Adjustment $ 8,014
=======
</TABLE>
Interest expense can be effected by increases and decreases in the variable
interest rates under the Company's various floating rate debt. For example, a
one-eighth percent change in such variable interest rates will result in a $343
change for the nine months ended September 30, 1997.
<PAGE>
MACK-CALI REALTY CORPORATION
Notes to Pro Forma Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 1997
(in thousands)
- --------------------------------------------------------------------------------
(d) Represents minority interest computed as follows:
<TABLE>
<S> <C> <C>
Income before extraordinary item and minority interest $107,426
Dividend yield of 6.75 percent on the Preferred Units with a $ 11,672
par value of $230,562
Income allocable to common stockholders of the Company and $ 95,754
unitholders in the Operating Partnership --------
Allocation to minority interest based upon weighted average 10,471
percentage of Common Units outstanding of 10.94 percent --------
Minority interest for the Nine Months Ended 22,143
September 30, 1997 --------
Unadjusted Company Pro Forma 22,073
--------
Adjustment: $ 70
========
</TABLE>
(e) The following is a reconciliation of the historical weighted average shares
outstanding to the pro forma primary weighted average shares outstanding
(shares in thousands):
<TABLE>
<CAPTION>
<S> <C>
Historical weighted average shares outstanding 36,469
Shares issued in connection with the 1997 Offering 13,000
Vesting of 199 shares on an accelerated basis as a result of the
Transaction 199
------
Pro forma weighted average shares outstanding 49,668
======
</TABLE>
(f) Fully-diluted pro forma net income per share is not presented since common
stock equivalents and the Preferred Units are not dilutive.
<PAGE>
MACK-CALI REALTY CORPORATION
Pro Forma Condensed Consolidated Statement Of Operations
For the Year Ended December 31, 1996 (unaudited)
(in thousands, except per share amount)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Unadjusted Pro Forma Adj.
Company for Reported Company
REVENUES Pro Forma (b) Events Pro Forma
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Base rents $338,112 $ 14,364 (a) $352,476
Escalations and recoveries
from tenants 48,384 2,806 (a) 51,190
Parking and other 10,048 126 (a) 10,174
Interest income 1,179 -- 1,179
- --------------------------------------------------------------------------------
Total revenues 397,723 17,296 415,019
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Real estate taxes 40,700 1,912 (a) 42,612
Utilities 31,847 1,106 (a) 32,953
Operating services 50,002 1,889 (a) 51,891
General and administrative 21,070 561 (a) 21,631
Depreciation and amortization 57,929 3,191 (a) 61,120
Interest expense 63,612 10,555 (c) 74,167 (c)
- --------------------------------------------------------------------------------
Total expenses 265,160 19,214 284,374
- --------------------------------------------------------------------------------
Income before gain on sale
of rental property, minority
interest and extraordinary
item 132,563 (1,918) 130,645
Gain on sale of rental
property -- -- --
- --------------------------------------------------------------------------------
Income before minority
interest and extraordinary
item 132,563 (1,918) 130,645
Minority interest 28,381 (134)(d) 28,247 (d)
- --------------------------------------------------------------------------------
Income before extraordinary
item $104,182 (1,784) $102,398
================================================================================
Weighted average common
shares outstanding 49,401 49,401 (e)
------ ------
Income before extraordinary
item per common share (f) $ 2.11 $ 2.07
------ ------
</TABLE>
<PAGE>
MACK-CALI REALTY CORPORATION
Notes to Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 1996
(in thousands)
- --------------------------------------------------------------------------------
(a) Reflects:
Revenues and expenses for the Reported Events for the year ended December 31,
1996, as follows:
<TABLE>
<CAPTION>
Real
Date Base Escalations/ Other Estate Operating General and
Property (1) Acquired Rents (2) Recoveries Income Taxes Utilities Services Administrative Depreciation (3)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
The Trooper Building November 19, 1997 $ 968 $ 369 -- $ 114 $ 239 $ 181 $ 36 $ 283
Princeton Overlook December 19, 1997 3,735 226 -- 473 244 353 151 542
Concord Plaza December 19, 1997 3,423 611 $126 575 254 636 205 682
500 West Putnam Pending 2,171 477 -- 164 271 314 147 402
McGarvey Portfolio Pending 4,067 1,123 -- 586 98 405 22 1,282
- ------------------------------------------------------------------------------------------------------------------------------------
Total Pro Forma Adj. for
Reported Events $14,364 $2,806 $126 $1,912 $1,106 $1,889 $561 $3,191
====================================================================================================================================
</TABLE>
(1) 2115 Linwood and 650 West were not in operations, due to being a vacant
building and vacant land, respectively, during 1996.
(2) Pro forma base rents are presented on a straight-line basis calculated from
January 1, 1996 forward.
(3) Depreciation is based on the building-related portion of the purchase price
and associated costs depreciated using the straight-line method over a 40-
year life.
<PAGE>
MACK-CALI REALTY CORPORATION
Notes to Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 1996
(in thousands)
- --------------------------------------------------------------------------------
(b) Amounts are incorporated by reference from the Company's Current Report on
Form 8-K, relating to the completion of the Mack Transaction and related
1997 Offering, dated December 11, 1997. Reference should be made to the Pro
Forma Condensed Consolidated Statements of Operations for the Year Ended
December 31, 1996 and related Notes thereto included in such Current Report.
(c) The pro forma adjustment to interest expense for the year ended December 31,
1996 reflects interest on mortgage debt assumed with certain acquisitions
and additional borrowings from the Company's credit facilities to fund
certain acquisitions. Pro forma interest expense for the year ended
December 31, 1996 is computed as follows:
<TABLE>
<CAPTION>
<S> <C>
Interest expense on the Initial Mortgage Financing, after the Partial $ 4,867
Pre-payment (fixed interest rate of 8.02 percent on $44,313 and variable
rate of 30-day LIBOR plus 100 basis points on $20,195; weighted average
interest rate used is 6.50 percent)
Interest expense on loan assumed with Fair Lawn acquisition on March 3, 1,535
1995 (fixed interest rate of 8.25 percent on average outstanding
principal balance of approximately $18,605)
Interest expense on mortgages in connection with the Harborside 10,841
acquisition on November 4, 1996 (fixed interest rate of 7.32 percent on
$107,912 and initial rate of 6.99 percent on $42,088)
Interest expense on Teachers Mortgage assumed with the RM Transaction on 13,303
January 31, 1997 (fixed interest rate of 7.18 percent on $185,283)
Interest expense on Mack Assumed Debt ($291,883) with a weighted average 22,300
interest rate of 7.64 percent
Interest expense on West Putnam Mortgage ($12,104) with an effective 789
interest rate of 6.52 percent
Interest expense on McGarvey Mortgage ($15,085) with a weighted average 937
effective interest rate of 6.21 percent
Interest expense on pro forma drawings on the Company's credit 18,514
facilities of $274,356 at a weighted average rate of 6.7 percent
Historical amortization of deferred mortgage, finance and title costs 1,081
for the year ended December 31, 1996
-------
Pro forma interest expense for the year ended December 31, 1996: $74,167
-------
Unadjusted Company Pro Forma 63,612
-------
Adjustment $10,555
=======
</TABLE>
<PAGE>
MACK-CALI REALTY CORPORATION
Notes to Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 1996
(in thousands)
- --------------------------------------------------------------------------------
NOTE (c) continued:
Interest expense can be effected by increases and decreases in the
variable rates under the Company's various floating rate debt. For
example, a one-eight percent change in such variable interest rates will
result in a $458 change for the year ended December 31, 1996.
(d) Represents minority interest computed as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Income before extraordinary item and minority interest $130,645
Dividend yield of 6.75 percent on the Preferred Units with a $15,563
par value of $230,562
Income allocable to common stockholders of the Company and 115,082
unitholders in the Operating Partnership
Allocation to minority interest based upon weighted average 12,684
percentage of Common Units outstanding of 11.02 percent, ------
respectively
Minority interest for the Year Ended December 31, 1996 28,247
------
Unadjusted Company Pro Forma $28,381
-------
Adjustment: $ (134)
=======
</TABLE>
(e) The following is a reconciliation of the historical weighted average shares
outstanding to the pro forma primary weighted average shares outstanding
(shares in thousands):
<TABLE>
<CAPTION>
<S> <C>
Historical weighted average shares outstanding 18,461
Shares issued in connection with the November 1996 offering 17,538
Issued in connection with the August 1996 offering 3,450
Adjustment for period of year during which shares issued with (3,247)
the 1996 offerings were outstanding
Shares issued in connection with the 1997 Offering 13,000
Vesting of 199 shares on an accelerated basis as a result of the
Transaction 199
------
Pro forma weighted average shares outstanding 49,401
======
</TABLE>
(f) Fully-diluted pro forma net income before extraordinary item per share is
not presented since common stock equivalents and the Preferred Units are not
dilutive.
<PAGE>
MACK-CALI REALTY CORPORATION
Estimated Twelve Month Pro Forma Statement of
Taxable Net Operating Income and Operating Funds Available
- --------------------------------------------------------------------------------
(unaudited)
The following unaudited statement is a Pro Forma estimate for a twelve month
period of taxable income and funds available from operations of the Company.
The Pro Forma statement is based on the Company's historical operating results
for the twelve month period ended September 30, 1997, adjusted for historical
operations of the properties acquired or to be acquired during the period from
October 1, 1996 to January 16, 1998 (as reported in this Current Report and
previous Form 8-K and 8-K/A filings of the Company dated December 11, 1997,
September 19, 1997, September 18, 1997, January 31, 1997, December 31, October
27, October 28, October 8, and July 16, 1996) and certain items related to
operations which can be factually supported. This statement does not purport to
forecast actual operating results for any period in the future.
This statement should be read in conjunction with (i) the financial statements
of the Company and (ii) the Pro Forma financial statements of the Company.
<TABLE>
<CAPTION>
Estimate of Taxable Net Operating Income (in thousands):
<S> <C>
Cali Realty Corporation historical income before minority interest for the year
ended December 31, 1996, exclusive of depreciation and amortization......................... $ 47,333
Cali Realty Corporation historical income before minority interest for the nine
months ended September 30, 1997, exclusive of depreciation and
amortization................................................................................ 83,736
Cali Realty Corporation historical income before minority interest for the nine
months ended September 30, 1996, exclusive of depreciation and
amortization................................................................................ (31,120)
--------
Cali Realty Corporation historical income before minority interest for the
twelve month period ended September 30, 1997 , exclusive of depreciation and
amortization (Note 1)....................................................................... 99,949
Properties acquired October 1, 1996 through January 16, 1998, historical
earnings from operations, as adjusted, exclusive of depreciation and
amortization (Note 2)....................................................................... 49,234
Pro Forma adjustments relating to the Company's common stock offerings (Note 3).............. 38,772
Net adjustment for tax basis revenue recognition (Note 4).................................... (1,852)
Estimated tax deduction from the exercise and sale of stock options under the
Company's Employee Stock Option Plan........................................................ (3,700)
Estimated tax depreciation and amortization (Note 5)......................................... (53,012)
--------
Pro Forma taxable income before allocation to minority interest and dividends deduction...... 129,391
Estimated allocation to minority interest (Note 6)........................................... (30,182)
Estimated dividends deduction (Note 7)....................................................... (99,336)
--------
$ (127)
========
Pro Forma taxable net operating income....................................................... $ 0
========
Estimate of Operating Funds Available (in thousands):
Pro Forma taxable operating income before allocation to minority interests and
dividends deduction......................................................................... $129,391
Add: Pro Forma depreciation and amortization................................................. 53,012
--------
Estimated Pro Forma operating funds available (Note 8)....................................... $182,403
========
</TABLE>
<PAGE>
MACK-CALI REALTY CORPORATION
Estimated Twelve Month Pro Forma Statement of
Taxable Net Operating Income and Operating Funds Available
- --------------------------------------------------------------------------------
(unaudited)
Note 1 - The historical income before minority interest represents the
Company's income before minority interest for the twelve month period
ended September 30, 1997.
Note 2 - The historical earnings from operations represents the Pro Forma
results of the properties acquired during the period from October 1,
1996 to January 16, 1998 for the period from October 1, 1996 through
the earlier of the date of acquisition or September 30, 1997.
Note 3 - Represents the Pro Forma interest reduction resulting from the paydown
of funds drawn on the Company's credit facilities with proceeds from
the Company's common stock offerings on November 22, 1996, and
October 15, 1997.
Note 4 - Represents the net adjustment to (i) recognize prepaid rent and (ii)
reverse the effect of rental revenue recognition on a straight line
basis.
Note 5 - Tax depreciation for the Company is based upon the original cost or
purchase price allocated to the buildings, depreciated on a straight-
line method over their respective tax lives.
Note 6 - Estimated allocation of taxable income to minority interests is based
on a 20.43 percent minority interest in the operating partnership
after certain gross income and depreciation adjustments, with a
special allocation of depreciation on properties included in the
Initial Public Offering and subsequent acquisitions where Operating
Units were issued as part of the consideration in the transaction.
Note 7 - Estimated dividends deduction is based on 49,668,044 weighted average
shares outstanding at the dividend rate of $2.00 per share. Shares
outstanding, on a Pro Forma basis, are 49,668,044.
Note 8 - Operating funds available does not represent cash generated from
operating activities in accordance with generally accepted accounting
principles and is not necessarily indicative of cash available to fund
cash needs.
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Cali Realty Corporation on Forms S-3 (File Nos. 333-25475, 333-09875, 333-19101,
333-09081, 33-96542, and 33-96538) and Forms S-8 (File No. 33-91822, 333-18725,
333-19831 and 333-32661) of our report dated November 21, 1997 on our audit of
the Statement of Revenue and Certain Expenses for The Trooper Building, of our
report dated October 15, 1997 on our audit of the Statement of Revenue and
Certain Expenses for Princeton Overlook, of our report dated November 18, 1997
on our audit of the Statement of Revenue and Certain Expenses for Concord Plaza,
of our report dated December 22, 1997 on our audit of the Statement of Revenue
and Certain Expenses for 500 West Putnam, and of our report dated October 10,
1997 on our audit of the Statement of Revenue and Certain Expenses for the
McGarvey Portfolio, which reports are included in this Current Report on Form
8-K.
/s/ Schonbraun, Safris, Sternlieb, & Co., L.L.C.
- ------------------------------------------------
Schonbraun, Safris, Sternlieb, & Co., L.L.C.
Roseland, New Jersey
January 16, 1998
<PAGE>
DATED NOVEMBER 19, 1997 BETWEEN
THE TROOPER PARTNERSHIP, LTD.
and
CALI REALTY ACQUISITION CORPORATION
================================================================================
<PAGE>
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement") is made this ___ day of
November, 1997, between THE TROOPER PARTNERSHIP, LTD., a limited partnership
organized under the laws of the Commonwealth of Pennsylvania having an address
at 920 Madison Avenue, Norristown, Pennsylvania 19403 ("Seller") and CALI REALTY
ACQUISITION CORPORATION, a corporation organized under the laws of the State of
Delaware having an address c/o Cali Realty Corporation, 11 Commerce Drive,
Cranford, New Jersey 07016 ("Purchaser).
RECITALS
A. Seller is the owner of certain property located in the Township of
Lower Providence, County of Montgomery, Commonwealth of Pennsylvania commonly
known as The Trooper Building, 1000 Madison Avenue, Valley Forge, Pennsylvania.
B. Seller has agreed to sell to Purchaser, and Purchaser has agreed to
purchase from Seller, such property and certain other assets, all as more
particularly set forth below, subject to the terms and conditions set forth
herein.
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 Seller hereby agrees to sell and convey, and Purchaser hereby
agrees to purchase, subject to all terms and conditions set forth in this
Agreement:
(a) that certain plot, piece or parcel of land situate, lying and
being in the Township of Lower Providence, County of Montgomery, and
Commonwealth of Pennsylvania, comprised of approximately 8.64 acres in the
aggregate of developed land, and being more particularly described on Exhibit
1.1(a) (the "Land"), the building or buildings constructed on the Land (the
"Building") and all of the other improvements located on the Land (together with
the Building, the "Improvements");
(b) all rights, privileges, grants and easements appurtenant to
Seller's interest in the Land and Improvements, including without limitation,
all of Seller'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
<PAGE>
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 and Improvements (the Land and Improvements and all such rights,
privileges, easements, grants and appurtenances are sometimes referred to herein
as the "Real Property");
(c) all personal property, fixtures, equipment, inventory and
fixtures owned by Seller and located on or at the Real Property, or used in
connection with the Real Property (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 (individually, a "Lease", and
collectively, 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 obligations
of the tenant or user (individually a "Tenant", and collectively, the "Tenants")
under the Leases;
(e) all of Seller's right, title and interest in and to all
trademarks and tradenames used or useful in connection with the Real Property,
including without limitation the name "The Trooper Building" and any other name
by which the Real Property is commonly known, and all goodwill, if any, related
to said names, all for which Purchaser shall have the sole and exclusive rights
(collectively, the "Tradenames");
(f) all of Seller's right, title and interest in and to all
permits, licenses, guaranties, approvals, certificates and warranties relating
to the Real Property and the Personal Property (collectively, the "Permits and
Licenses"), all of Seller's right, title and interest in and to those contracts
and agreements for the servicing, maintenance and operation of the Real Property
("Service Contracts"), which Purchaser elects to take, and telephone numbers of
Seller in use at any of the Real Property (together with the Permits and
Licenses and the Service Contracts, the "Intangible Property");
(g) all promotional material, brochures, photographs
(collectively, "Promotional Materials"), original leases and lease files,
current rent roll, all keys to the Property in the Seller's possession, Seller's
operational manual for the Building, and copies of those documents and
reproducible drawings described in cover letters of the following dates from
Thomas J. Maher, CEO or Marion Lawrence, Vice President, both of First
Union/Maher Partners, to John Kropke and/or to Stephan K. Pahides, Esquire:
September 19, 1997, September 24, 1997, September 30, 1997 and October 9, 1997
(collectively and together with the Promotional Materials, the "Books and
Records"); and
(h) all other rights, privileges and appurtenances owned by
Seller, if any, and in any way related to the rights and interests described
above in this Section.
<PAGE>
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".
2. PURCHASE PRICE AND TERMS OF PAYMENT.
-----------------------------------
2.1 The purchase price for the Property is FOURTEEN MILLION DOLLARS
($14,000,000) (the "Purchase Price"), payable on the Closing Date (as defined in
Section 10) by the wiring of federal funds to Seller or the Title Company (as
hereinafter defined), subject to adjustment as provided herein. At the request
of Seller given at least five (5) business days prior to the Closing Date,
Purchaser agrees to provide to Seller bank or certified checks up to the amount
due under this Section on account of sums due in order for Seller to perform its
obligations hereunder.
3. INSPECTION PERIOD; PURCHASER'S RIGHT OF TERMINATION
AND REJECTION PRIOR TO CLOSING
---------------------------------------------------
3.1 Through the period ending at 11:59 p.m. (Philadelphia time) on
November 7, 1997 (the "Inspection Period"), Purchaser may perform, or cause to
be performed, tests, investigations and studies of or related to the Property
including, but not limited to, soil tests and borings, ground water tests and
investigations, percolation tests, surveys, architectural, engineering,
subdivision, utility availability, sewer capacity, environmental, access,
financial, market analysis, development and economic feasibility studies and
other tests, investigations or studies as Purchaser, in its sole discretion,
determines is necessary or desirable in connection with the Property and may
inspect the physical (including environmental) and financial condition of the
Property, including but not limited to the Leases, Service Contracts,
engineering and environmental reports, zoning and land zoning development
approval agreements, permits and approvals, which inspection shall be
satisfactory to Purchaser in its sole discretion. Purchaser shall conduct any
tests and studies in a manner which does not unreasonably impede the day-to-day
operations of the Property, and shall repair and restore any portion of the
surface of the Premises disturbed by Purchaser, its agents or contractors during
the conduct of any tests and studies to substantially the same condition as
existed prior to such disturbance. Such right of inspection and the exercise of
such right shall not constitute a waiver by Purchaser of the breach of any
representation, warranty covenant or agreement of Seller which might, or should,
have been disclosed by such inspection.
3.2 During the Inspection Period, Purchaser, its agents and
contractors, shall have unlimited access to the Property, subject to the rights
of Tenants, and other information pertaining thereto in the possession or within
the control of Seller for the purpose of performing such studies, tests,
borings, investigations and inspections for the purposes described in Section
3. Seller shall cooperate with Purchaser in facilitating its due diligence
inquiry and shall obtain, and use its best reasonable efforts to obtain, any
consents that may be necessary in order for Purchaser to perform same, and use
its best efforts to secure the cooperation of Tenants. In
<PAGE>
addition, Seller will deliver to Purchaser, promptly after request, true and
complete copies of all test borings, Environmental Documents (as defined in
Section 5.2(e)), surveys, title materials and engineering and architectural data
and the like relating to the Property that are in Seller's possession or under
its control. In the event any additional materials or information come within
Seller's possession or control after the date of this Agreement, Seller shall
promptly submit true and complete copies of the same to Purchaser. Seller shall
notify Purchaser of any dangerous conditions on the Property of which Seller has
knowledge, without specific investigation, 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 Purchaser may pose a
dangerous condition to Purchaser or Purchaser's agents and contractors.
3.3 Purchaser may terminate this Agreement for any reason, by written
notice to Seller given within the Inspection Period. In the event Purchaser
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
Purchaser does not terminate this Agreement by the end of the Inspection Period,
Purchaser shall be deemed to have elected to terminate this Agreement. Upon such
termination (other than as a result of a breach of this Agreement by Seller),
Purchaser agrees to return to Seller all materials received from Seller pursuant
to this Agreement and to provide to Seller, without cost to Seller, copies of
all reports and tests (other than financial, economic, market or similar
reports, studies or tests) relating to the Property which were generated by or
for Purchaser to the extent that Purchaser has the right to do so.
3.4 Notwithstanding the expiration of the Inspection Period,
Purchaser shall continue to have the rights set forth in Subsections 3.1 and
3.2, provided that this Agreement has not been terminated.
4. TITLE MATTERS TO WHICH THIS SALE IS SUBJECT.
-------------------------------------------
4.1 At Closing, title to the Property shall be transferred in fee
simple, good and marketable and free and clear of all liens and encumbrances,
except for the following (collectively, the "Permitted Encumbrances"):
(a) The lien 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;
(b) The rights of Tenants, as tenants only;
(c) Those restrictions, covenants, agreements, easements, matters
and things affecting title to the Real Property of record as more particularly
described in Schedule 4.1(c) annexed hereto and by this reference made a part
hereof;
<PAGE>
(d) Any and all laws, statutes, ordinances, codes, rules,
regulations, requirements, or executive mandates affecting the Property as of
the date hereof except for engineering or institutional controls, including
without limitation, a deed notice or declaration of environmental restrictions,
or a groundwater classification exception area;
(e) The state of facts shown on the survey, if any, described on
Schedule 4.1(c), and any other state of facts which a recent and accurate survey
of the Real Property would actually show, provided same does not impair the use
of the Real Property as intended by Purchaser and do not render title
uninsurable at standard rates.
4.2 Purchaser shall cause any title company licensed to do business
in the State in which the Real Property is located (the "Title Company") to
prepare a title insurance search and commitment for an owner's title insurance
policy for the Real Property (the "Title Commitment") which shall be attached
hereto as Schedule 4.2 and shall cause a copy of same to be delivered to counsel
for Seller. If any defects, objections or exceptions in the title to the Real
Property appear in the Title Commitments (other than the Permitted Encumbrances)
which Purchaser is not required to accept under the terms of this Agreement,
Seller agrees to use good faith efforts to cure same prior to Closing (as
defined in Section 10) and in any event to cure, at its expense, (i) judgments
against Seller, (ii) mortgages or other liens which can be satisfied by payment
of a liquidated amount and (iii) defects, objections or exceptions which can be
removed by payments not to exceed five (5%) percent of the Purchase Price in the
aggregate. If, after complying with the foregoing requirements, Seller is
unable to eliminate all unacceptable defects, objections or exceptions in
accordance with the terms of this Agreement on or before the Closing, Purchaser
shall elect either (w) to terminate this Agreement by notice given to the
Seller, in which event the provisions of Section 4.10 shall apply, or (x) to
accept title subject to such unacceptable defects, objections or exceptions and
receive no credit against or reduction of the Purchase Price. Seller agrees and
covenants that it shall not voluntarily place any defects, objections or
exceptions to title to any of the Real Property from and after the date hereof.
4.3 It shall be a condition to Closing that Seller convey, and that
the Title Company insure, title to the Real Property in the amount of the
Purchase Price (at a standard rate for such insurance) in the name of Purchaser
or its designees, after delivery of the Deed (as defined in Section 10), by a
standard 1992 ALTA Owners Policy, free and clear of all liens, encumbrances and
other matters, other than the Permitted Encumbrances (the "Title Policy"), with
affirmative insurance that any Permitted Encumbrances have not been violated,
and that any future violation thereof will not result in a forfeiture or
reversion of title. Seller shall provide such affidavits, including title
affidavits and survey affidavits of no change, and undertakings as the Title
Company insuring title to the Property may reasonably require. 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.
4.4 In the event that Purchaser obtains a survey of the Real
Property, Seller
<PAGE>
agrees to use in the Deed the metes and bounds description of the Land contained
on such survey, provided that, such survey is certified to Seller.
4.5 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 Seller,
which Seller 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 Seller. Seller shall deliver to Purchaser, on the Closing Date, a
letter executed by an appropriate officer of each mortgagor or lien holder of
each mortgage or other lien which Seller is obligated to pay and discharge
pursuant to the terms of this Agreement evidencing its agreement that upon
receipt of payment of a specified amount the mortgage or lien will be discharged
and it shall promptly prepare, execute and file a satisfaction piece with
respect to such mortgage or lien.
4.6 If the Title Commitments disclose judgments, bankruptcies or
other returns against other persons having names the same as or similar to that
of Seller, Seller, on request, shall deliver to the Title Company affidavits
showing that such judgments, bankruptcies or other returns are not against
Seller, or any affiliates. Upon request by Purchaser, Seller shall deliver any
affidavits and documentary evidence as are reasonably required by the Title
Company to eliminate the standard or general exceptions on the ALTA form Owner's
Policy.
4.7 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, of which the first installment is either
then a charge or lien or has been paid, then for the purposes of this Agreement
all the unpaid installments of any such assessment, including those which are to
become due and payable after the Closing Date, shall be deemed to be due and
payable and to be liens upon the Property and shall be paid and discharged by
Seller on the Closing Date.
4.8 If, at or before Closing, it appears that the Property may be or
is subject to mechanics' or materialmen's liens or the lien of decedent's debts,
Seller shall, at Seller's cost and expense, provide special insurance from the
Title Company against such lien and upon so doing the same shall be considered
good delivery of title with respect thereto under this Agreement.
4.9 If, at or before Closing, it appears that the Property is subject
to the possible lien of unsettled corporate taxes or will be subject to possible
corporate tax liability of Seller, Seller will enter into an agreement
satisfactory to Title Company or deposit funds or security with Title Company as
required to induce Title Company to insure title to the Property free and clear
of loss or damage by reason of the nonpayment of such unsettled and other
corporate taxes and the same shall be considered good delivery of title with
respect thereto under this Agreement.
<PAGE>
4.10 If Seller is unable to convey title in accordance with the terms
of this Agreement and Purchaser elects to terminate this Agreement, then this
Agreement shall terminate and except as provided in the following sentence,
neither party to this Agreement shall have any further rights or obligations
hereunder other than those which are expressly stated herein to survive any such
termination. Upon a termination of this Agreement by Purchaser, Seller shall
refund to Purchaser all charges made for (i) examining the title to all of the
Real Property, (ii) any appropriate additional municipal searches made in
accordance with this Agreement, and (iii) survey and survey inspection charges,
which refund obligation shall survive said termination.
4.11 The Title Commitment lists as an exception to title, as item 3 on
Schedule B, Section II, restrictions contained in a deed dated October 9, 1959,
as modified by an Agreement to Modify Restrictions dated March 14, 1963, (as
modified, the "Restrictions"). Seller agrees that, at Purchaser's request, it
shall cause Valley Forge Equities, Inc., or such other appropriate successor of
Valley Forge Industrial Park, Inc., (the "Declarant") to execute and deliver to
Purchaser an instrument containing terms and conditions reasonably acceptable to
Purchaser, and in recordable form, pursuant to which Declarant waives any rights
or benefits under the Restrictions with respect to the Property and Purchaser's
ownership thereof, and agrees not to enforce or impose the Restrictions against
the Property or Purchaser.
5. REPRESENTATIONS AND WARRANTIES OF SELLER.
----------------------------------------
5.1 In order to induce Purchaser to enter into this Agreement and to
perform as required hereunder, Seller hereby warrants and represents the
following:
(a) Seller is a duly organized and validly existing limited
partnership organized under the laws of the Commonwealth of Pennsylvania, is
duly authorized to transact business in the Commonwealth of Pennsylvania, 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 Seller 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 or
will be taken prior to Closing.
(b) This Agreement, when duly executed and delivered, will be the
legal, valid and binding obligation of Seller, enforceable in accordance with
the terms of this Agreement. The performance by Seller 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 Seller 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 Seller is a party or by which its
assets are or may be bound.
<PAGE>
(c) Annexed hereto as Schedule 5.1 (c) is a true, complete and
correct schedule of all of the Leases. The Leases are valid and bona fide
obligations of the landlord and tenants thereunder and are in full force and
effect. No defaults exist thereunder and no condition exists which, with the
passage of time or the giving of notice or both, will become a default, except
as specifically set forth in the Rent Roll. The Leases constitute all of the
leases, tenancies or occupancies affecting the Real Property on the date hereof.
Except as set forth in the Leases, there are no agreements which confer upon any
Tenant or any other person or entity any rights to purchase, lease, license or
otherwise possess, occupy or own the Property. All Tenants have commenced
occupancy. No Tenant is entitled now or in the future to any concession, rebate,
offset, allowance or free rent for any period, nor has any such claim been
asserted by any Tenant, except as set forth in the Leases.
(d) Annexed hereto as Schedule 5.1(d) (the "Rent Roll") is a
true, complete and correct listing of the Leases, which also sets forth the
following: (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; (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 (other than a Lease) under which any Tenant is
occupying space on the date hereof or will in the future, occupy such space;
(vii) any 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.
(e) Seller has performed all of the material obligations and
observed all of the material covenants required of the landlord under the
Leases. 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 except as set
forth in the Leases. No work has been performed at the Building which would
require an amendment to the certificate of occupancy for the Building, and any
and all work performed at the 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 bills and claims for labor performed and
materials furnished to or for the benefit of the Seller will be paid in full on
the Closing Date. Except for certain construction activities to be undertaken by
Reality Online, Inc., to the best of Seller's knowledge, no work, alterations,
improvements or installations have been undertaken within four months prior to
the date hereof, or are being undertaken on the date hereof, or are contemplated
to be undertaken after the date hereof other than as may be provided in a Lease.
(f) There are no service contracts, maintenance contracts, union
contracts, employment agreements or other agreements affecting the Property or
the operation thereof, except the Service Contracts. True, accurate and complete
copies of the Service Contracts have been initialed by the parties. All of the
Service Contracts are and will on the
<PAGE>
Closing Date be unmodified from what the Purchaser has received from Seller and
in full force and effect without any default or claim of default by any of the
parties thereto. All sums presently due and payable by Seller 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 on the Closing Date.
All of the Service Contracts may be terminated as provided therein.
(g) The Permits and Licenses include all certificates, licenses,
permits and authorizations, including without limitation any Permits and
Licenses relating to any environmental matters, necessary to operate and occupy
the Building or customarily obtained in operating and occupying buildings
similar to the Building, all of which Permits and Licenses are listed on
Schedule 5.1(g), along with the expiration date of same. Seller has not
received any notice that any of the Permits and Licenses are subject to, or in
jeopardy of, revocation or non-renewal. Seller is current in the payment of any
fees required to be paid for the Permits and Licenses. All Permits and Licenses
are in full force and effect and shall upon Closing, to the extent permitted by
law, be transferred to Purchaser by Seller, without additional payment by
Purchaser.
(h) There are no actions, suits, labor disputes, litigation or
proceedings currently pending or, to the knowledge of Seller, threatened against
or related to Seller or to all or any part of the Property, the environmental
condition thereof, or the operation thereof, nor does Seller know of any basis
for any such action.
(i) There are no 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.
(j) Seller 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 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 Property, (iii) any proposed
or pending special assessments affecting the Property or any portion thereof,
(iv) any penalties or interest due with respect to real estate taxes assessed
against the 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 Property.
Seller agrees to furnish Purchaser with a copy of any such notice received
within five (5) days after receipt, but in any event prior to Closing.
(k) Seller has provided Purchaser with all material reports,
including without limitation, the Environmental Documents, in Seller's
possession or under its control related to the physical condition of the
Property and to the best of Seller's knowledge all material Books and Records
necessary for Purchaser to conduct its due diligence of the Property.
<PAGE>
(l) Seller has no knowledge of any notices, suits, investigations
or judgments relating to any violations (including, without limitation,
Environmental Laws as defined in Section 5.2(e)) of any laws, ordinances or
regulations affecting the Property, or any violations or conditions that may
give rise thereto, and has no reason to believe that any agency, board, bureau,
commission, department, office 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 Property or the management,
operation, use or improvement thereof (collectively, the "Governmental
Authorities") contemplates the issuance thereof, and there are no outstanding
orders, judgments, injunctions, decrees, directives or writs of any Governmental
Authorities against or involving Seller or the Property.
(m) Seller has no employees working at or in connection with the
Property. There are not any union agreements affecting the Property as of the
date hereof, nor shall any such agreements affect the Property as of the Closing
Date.
(n) Annexed hereto as Schedule 5.1(n) is a schedule of all
leasing commission obligations affecting the Property. The respective
obligations of Seller and Purchaser with respect to said commissions are set
forth in Section 8 hereof.
(o) Seller 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 Seller's creditors, suffered the appointment of a
receiver to take possession of all, or substantially all, of such Seller's
assets, suffered the attachment or other judicial seizure of all, or
substantially all, of such Seller's assets, admitted in writing its inability to
pay its debts as they come due or made an offer of settlement, extension or
composition to its creditors generally.
(p) The Personal Property is now owned and will on the Closing
Date be owned solely by Seller free and clear of any conditional bills of sale,
chattel mortgages, security agreements or financing statements or other security
interests of any kind. Seller is the fee simple owner of the Real Property. No
person, firm or entity has any rights in, or rights to acquire, all or part of
the Property, other than Purchaser.
(q) No portion of the Property is located in a flood plain.
(r) Seller has paid all Taxes (as defined in Section 5.1(s)) due
and payable prior to the Closing and filed all returns and reports required to
be filed prior to the Closing with respect to the ownership and operation of the
Property (by it or any predecessor entity) for which Purchaser could be held
liable or a claim made against the acquired property.
(s) Except as set forth in Schedule 5.1(s), there are no audits
or other proceedings by any Governmental Authorities pending or, to the
knowledge of Seller, threatened with respect to the Taxes resulting from the
ownership and operation of the Property (by it or any predecessor entities) for
which Purchaser could be held liable or a claim made against the
<PAGE>
acquired property. No assessment of Taxes is proposed against Seller (including
any predecessor entities), the Property. Seller 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. "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 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.
(t) No representation or warranty made by Seller 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 Seller to
Purchaser or any of its designees or affiliates pursuant to this Agreement
contains or will contain any untrue statement of a material fact or omits or
will omit to state any material fact necessary, in light of the circumstances
under which it was or will be made, which will make the statements herein or
therein misleading or fail to fully and fairly provide the information required
to be provided in any such document, certificate, Schedule or Exhibit. All
documents delivered by Seller to Purchaser or any of its designees or affiliates
will be and are true and correct copies of Seller's records, and except
Schedules made at the specific direction of this Agreement or otherwise by
Purchaser, maintained by Seller in its ordinary course of business.
5.2 In addition to the provisions of Section 5.1, as an inducement to
Purchaser, Seller hereby warrants and represents the following with respect to
environmental matters:
(a.) To the best of Seller's knowledge, except as disclosed on
Schedule 5.2(a):
(i) there are no Contaminants (as defined in Section
5.2(e)) on, under, at, emanating from or affecting the Property, except those in
compliance with all applicable Environmental Laws (as defined in Section
5.2(e));
(ii) neither Seller, nor any current occupant or any prior
owner or occupant, of the Property has received any Notice (as defined in
Section 5.2(e)) from any Governmental Authority (as defined in Section 5.2(e))
or any other third party with respect to Contaminants on, under, at, emanating
from or affecting the Property, and to Seller's knowledge no Contaminants have
been Discharged (as defined in Section 5.2(e)) as to which a Governmental
Authority has demanded that a cleanup be undertaken or which requires that a
cleanup be undertaken under Environmental Laws;
(iii) no portion of the Property has ever been used by
Seller or, to Seller's knowledge, any former owner or current or former occupant
to generate, manufacture, refine,
<PAGE>
produce, treat, store, handle, dispose of, transfer or process Contaminants,
with the exception of small quantities of office maintenance supplies and office
supplies which contain Contaminants which are used and disposed of in accordance
with Environmental Laws;
(iv) Seller has not transported any Contaminants, nor to
Seller's knowledge has any current or former occupant or owner transported any
Contaminants, from the Property to another location which was not done in
compliance with all applicable Environmental Laws;
(v) no (S)104(e) informational request has been received by
Seller with respect to the Property or with respect to any real property within
the Valley Forge Corporate Center issued pursuant to CERCLA (as defined in
Section 5.2(e));
(vi) there is no asbestos or asbestos containing material in
any friable state or otherwise in violation of Environmental Laws on the
Property;
(vii) all transformers and capacitators containing
polychlorinated biphenyls ("PCBs"), and all "PCB Items", as defined in 40
C.F.R., (S)761.3, located on the Property, are identified in Schedule 5.2(a) and
are in compliance with all Environmental Laws;
(viii) there are no above ground storage tanks or Underground
Storage Tanks (as defined in Section 5.2(e)) at the Property, regardless of
whether such tanks are regulated tanks or not;
(ix) all pre-existing above ground storage tanks and
Underground Storage Tanks at the Property have been removed and their contents
disposed of in accordance with and pursuant to Environmental Laws;
(x) the Property has not been used as a facility for the
disposal of regulated waste, including, without limitation, solid, hazardous and
municipal waste, which is regulated under Environmental Laws, including, without
limitation, the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
----------
(S)6901 et seq., the Solid Waste Management Act, 35 PA. Cons. Stat. Ann.
-- ---
(S)6018.101 et seq., the Hazardous Sites Cleanup Act, 35 PA. Cons. Stat. Ann.
-- ---
(S)6020.101 et seq., the Municipal Waste Management Regulations, 25 PA. Code
-- ---
(S)271.1 et seq., and the Hazardous Waste Regulations, 25 PA. Code (S)260.1 et
-- --- --
seq.;
- ---
(xi) Seller and each occupant of the Property have all
environmental certificates, licenses and permits ("Permit") required to operate
the Property and there is no violation of any applicable statute, ordinance,
rule, regulation, order, code, directive or requirement, including, without
limitation, Environmental Laws with respect to any Permit, nor any pending
application for any Permit;
(xii) Seller has no knowledge that the Property is in violation
of, and the
<PAGE>
development and use of the Property as presently constructed and used
are not subject to, any ruling, order or agreement with respect to, to any
statutory land use regulation, including without limitation, wetlands
regulations, administered by the United States of America, Army Corps of
Engineers, the Environmental Protection Agency or the DEP (as defined in Section
5.2(e));
(xiii) there are no federal or state liens as referred to under
CERCLA, 35 PA. Cons. Stat. Ann (S)6020.509 or 35 PA. Cons. Stat. Ann.
(S)6021.702, or any other Environmental Laws or that have attached to the
Property;
(xiv) Seller has not, and has not permitted any occupant to
engage in any activity on the Property in violation of Environmental Laws;
(xv) the Property is in material compliance with Environmental
Laws; and
(xvi) there are not engineering or institutional controls on the
Property, including, without limitation, any deed notice, declaration of
environmental restriction, groundwater classification exception area or well
restriction area, pursuant to Environmental Laws, nor has any event taken place
at the Property that would require that any Deed to be delivered pursuant to
Section 10.2(a) contain any notification pursuant to 35 PA. Cons. Stat. Ann.
(S)6018.405, 35 PA. Cons. Stat. Ann. (S)6020.512, 25 PA. Code (S)264.119, as
amended, or any other Environmental Law.
(b) Contemporaneously with the execution of this Agreement, and
subsequently promptly upon receipt by Seller or Seller's representatives, Seller
shall deliver to Purchaser: (i) all Environmental Documents concerning the
Property generated by or on behalf of predecessors in title or former occupants
of the Property to the extent in Seller's possession or control; (ii) all
Environmental Documents concerning the Property generated by or on behalf of
Seller, whether currently or hereafter existing; (iii) all Environmental
Documents concerning the Property generated by or on behalf of current or future
occupants of the Property to the extent in Seller's possession or control,
whether currently or hereafter existing; and (iv) a description of all known
operations, past and present, undertaken at the Property, and existing maps,
diagrams and other documentation to the extent in Seller's possession or control
designating the location of past and present operations at the Property and past
and present storage of Contaminants above or below ground, on, under, at,
emanating from or affecting the Property or its environs.
(c) Seller shall notify Purchaser in advance of all meetings
scheduled between Seller or Seller's representatives and DEP with respect to the
Property, and Purchaser, and Purchaser's representatives shall have the right,
without obligation, to attend and participate in all such meetings.
(d) Seller shall indemnify, defend and hold harmless Purchaser from
and against all claims, liabilities, losses, damages (other than lost profits
and consequential damages), penalties and costs, foreseen or unforeseen
including, without limitation reasonable counsel,
<PAGE>
engineering and other professional or expert fees, which Purchaser may incur to
the extent resulting, directly or indirectly, wholly or partly, from any
misrepresentation or breach of warranty by Seller or by reason of Seller's
action or non-action with regard to Seller's obligations under this Section 5.2.
(e) The following terms shall have the following meanings when used
in this Agreement:
(i) "Contaminants" shall mean, without limitation, any regulated
substance, toxic substance, hazardous substance, hazardous waste, pollution,
pollutant or contaminant, as defined in or regulated by on the date hereof, the
"Tanks Laws" as defined below; the Resource Conservation and Recovery Act, as
--
amended, 42 U.S.C. (S)6901 et seq.; the Comprehensive Environmental Response,
- ------- -- ---
Compensation and Liability Act, as amended, 42 U.S.C. (S)9601 et seq.
-- ------- -- ----
("CERCLA"); the Water Pollution and Control Act, 33 U.S.C. (S)1251 et seq.;
-- ---
together with any amendments thereto, regulations promulgated thereunder and all
substitutions thereof, in effect on the date hereof, as well as words of similar
purport or meaning referred to in any other applicable federal, state, county or
municipal environmental statute, ordinance, code, rule or regulation, including,
without limitation, radon, asbestos, polychlorinated biphenyls, urea
formaldehyde and petroleum products and petroleum based derivatives. Where a
statute, ordinance, code, rule or regulation defines any of these terms more
broadly than another, the broader definition shall apply.
(ii) "Discharge" shall mean the releasing, spilling, leaking,
leaching, disposing, pumping, pouring, emitting, emptying, treating or dumping
of Contaminants at, into, onto or migrating from or onto the Property,
regardless of whether the result of an intentional or unintentional action or
omission.
(iii) "Environmental Documents" shall mean all environmental
documentation in the possession or under the control of Seller concerning the
Property, or the Valley Forge Corporate Center 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.
(iv) "Environmental Laws" shall mean each and every applicable
federal, state, county or municipal statute, ordinance, rule, regulation, order,
code, directive or requirement, together with all successor statutes,
ordinances, rules, regulations, orders, codes, directives or requirements, of
any Governmental Authority in any way related to Contaminants in effect on the
date hereof.
<PAGE>
(v) "Governmental Authority" shall mean the federal, state,
county or municipal government, or any department, agency, bureau or other
similar type body obtaining authority therefrom, or created pursuant to any law.
(vi) "DEP" shall mean the Pennsylvania Department of
Environmental Protection or its successor.
(vii) "Notice" shall mean, in addition to its ordinary meaning,
any written communication of any nature, whether in the form of correspondence,
memoranda, order, directive or otherwise.
(viii) "Tank Laws" shall mean the Pennsylvania Storage Tank
and Spill Prevention Act, 35 PA. Cons. Stat. Ann (S)6020.101, et. seq., the
-- ---
Pennsylvania Underground Storage Act, 58 PA. Cons. Stat. Ann. (S)451, et. seq.
-- ---
and the federal underground storage tank law (Subtitle I) of the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. (S)6901 et seq., together
-- ------- -- ---
with any amendments thereto, regulations promulgated thereunder, and all
substitutions thereof, and any successor legislation and regulations in effect
on the date hereof.
(ix) "Underground Storage Tank" shall mean each and every
"underground storage tank", whether or not subject to the Tank Laws, as well as
the "monitoring system", the "leak detection system", the "discharge detection
system" and the "tank system" associated with the "underground storage tank", as
those terms are defined by the Tank Laws.
5.3 All representations and warranties made by Seller in this
Agreement shall be considered to have been made both on the date hereof and on
the Closing Date. All representations and warranties made by Seller in this
Agreement shall survive the Closing Date for a period of one (1) year, except
that the representations, warranties, covenants and agreements set forth in
Section 5.1(a), (b) and (q) and in Section 5.2 shall survive the Closing Date
for a period of four (4) years (unless otherwise specified herein), and shall
not be merged in the delivery of the Deed. The applicable survival period shall
be extended if a claim is made by Purchaser within such period. Seller agrees
to indemnify and defend Purchaser, and to hold Purchaser 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 Purchaser, by
reason of or resulting from any misrepresentation or breach of any
representation or warranty, or any incompleteness of Schedule 5.2(a), or any
nonfulfillment of any covenant and agreement of Seller contained in this
Agreement.
5.4 Purchaser acknowledges and agrees that, except as provided in
this Agreement, Seller has not made any representations or warranties of any
kind or character whatsoever, whether express or implied, with respect to the
Property and that, except as provided in this Agreement, the transfer of the
Property is on an "as is" condition. Purchaser acknowledges that it is not in a
significantly disparate bargaining position with respect to Seller
<PAGE>
in connection with the transaction contemplated by this Agreement and that
Purchaser was represented by legal counsel in connection with this transaction.
Except as set forth in this Agreement, Purchaser hereby waives and releases
Seller from any and all claims, liabilities, losses, costs and damages, known or
unknown, foreseen or unforeseen, which exist or which may arise in the future
under any common or statutory law, including without limitation, CERCLA, now or
hereinafter in effect with respect to any Discharge of Contaminants at the
Property, but not with respect to any Contaminants on, under, at, emanating from
or migrating from any other property currently or previously owned by Seller or
subsequently acquired by Seller, including without limitation, any Contaminants
migrating from any other property currently or previously owned by Seller or
subsequently acquired by Seller onto, under or at the Property.
5.5 For purposes of this Agreement the terms "to the best of Seller's
knowledge" or "to Seller's knowledge" or any similar derivation thereof shall
mean the actual knowledge of Roger C. Hope and Donald Nuss, both of whom have
been active in the management of the Building since its development, with
thoughtful consideration but without specific investigation, except where
specifically stated to be with Seller's due inquiry and investigation.
6. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
-------------------------------------------
6.1 In order to induce Seller to enter into this Agreement and to
perform as required hereunder, Purchaser hereby warrants and represents the
following:
(a) Purchaser 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 sell the Property in accordance with the terms and conditions
hereof. All necessary actions of the Board of Directors 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, when duly executed and delivered, will be the
legal, valid and binding obligation of Purchaser, enforceable in accordance with
the terms of this Agreement. The performance by Purchaser 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 Purchaser 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 Purchaser is a party or by which its
assets are or may be bound.
6.2 All representations and warranties made by Purchaser in this
Agreement shall survive the Closing Date for a period of one (1) year, and shall
not be merged in the
<PAGE>
delivery of the Deed. From and after the Closing, Purchaser agrees to indemnify
and defend Seller, and to hold Seller 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 Seller, by reason of or resulting
from any breach, inaccuracy, incompleteness or nonfulfillment of the
representations, warranties, covenants and agreements of Purchaser contained in
this Agreement.
6.3 Seller acknowledges that it is not in a significantly disparate
bargaining position with respect to Purchaser in connection with the transaction
contemplated by this Agreement and that Seller was represented by legal counsel
in connection with this transaction.
7. COVENANTS OF SELLER.
-------------------
7.1 Seller covenants and agrees that between the date hereof and the
Closing Date it shall perform or observe the following:
(a) Seller will operate and maintain the Property in the ordinary
course of business and use reasonable efforts to reasonably preserve for
Purchaser the relationships of Seller with the Tenants, suppliers, managers,
employees and others having on-going relationships with the Property. Seller
will complete any capital expenditure program currently in process or
anticipated to be completed. Seller will not defer taking any actions or
spending any of its funds, or otherwise manage the Property differently, due to
the pending sale of the Property.
(b) Seller, as landlord, will not enter into any new leases with
respect to the Property, or renew or modify any Lease, without Purchaser's prior
written consent, which consent shall not be unreasonably withheld or delayed.
(c) If prior to the Closing Date Seller shall have received from
(i) any insurance company which issued a policy with respect to the Property,
(ii) any board of fire underwriters or other body exercising similar functions,
or (iii) the holder of any mortgage, any notice requiring or recommending any
repair work to be done on the Property, Seller will do the same expeditiously
and diligently at its own cost and expense prior to the Closing Date.
(d) Seller shall not:
(i) Enter into any agreement requiring Seller to do work
for any Tenant after the Closing Date without first obtaining the prior written
consent of Purchaser;
(ii) Accept the surrender of any Service Contract or Lease,
or grant any concession, rebate, allowance or free rent;
(iii) Apply against rent due any Security Deposits with
respect
<PAGE>
to any Tenant in occupancy on the Closing Date;
(iv) Renew, extend or modify any of the Service Contracts
without the prior written consent of Purchaser, except as provided in
subparagraph 7.1(h);
(v) 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 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 Purchaser; or
(vi) Cause or permit the Property, or any interest therein,
to be alienated, mortgaged, licensed, encumbered or otherwise be transferred.
(e) Upon request of Purchaser at any time after the date hereof,
Seller shall assist Purchaser in its preparation of audited financial
statements, statements of income and expense, and such other documentation as
Purchaser may reasonably request, covering the period of Seller's ownership of
the Property.
(f) Seller will make all required payments under any mortgage
affecting the Property within any applicable grace period, but without
reimbursement by Purchaser therefor. Seller shall also comply with all other
terms covenants, and conditions of any mortgage on the Property.
(g) Up to and including the Closing Date, Seller agrees to
maintain and keep such hazard, liability and casualty insurance policies in full
force and effect in such amounts and covering such risks sufficiently to protect
the Property and to protect, to a reasonable and prudent extent, the owner of
the Property, in such amounts as are required so as not to be deemed a co-
insurer, and for actual replacement cost, against any loss, damage, claim or
liability.
(h) Seller shall cancel, at its sole cost and expense, the
contract with Schindler Elevator Corporation dated September 4, 1991, (the
"Schindler Contract") and such other Service Contracts which Purchaser elects
not to assume. Seller agrees to indemnify, defend and hold Purchaser harmless
from and against any claim made by Schindler Elevator Corporation under or in
connection with the Schindler Contract.
(i) Seller shall permit Purchaser and its authorized
representatives to inspect the Books and Records of its operations at all
reasonable times. All Books and Records not conveyed to Purchaser hereunder
shall be maintained for Purchaser's inspection at Seller's address as set forth
above.
(j) All violations of statutes, ordinances, rules, regulations,
orders, codes, directives or requirements affecting the Property, whether or not
such violations are now noted in the records of or have been issued by any
Governmental Authorities shall be complied
<PAGE>
with by Seller prior to the Closing and the Property shall be conveyed free of
any such violations, including, without limitation, violations of Environmental
Laws.
(k) Seller shall:
(i) Promptly notify Purchaser of, and promptly deliver to Purchaser, a
true and complete copy of any Notice Seller may receive, on or before the
Closing Date, from any Governmental Authority, concerning a violation of
Environmental Laws or Discharge of Contaminants;
(ii) At its own cost and expense, be responsible for the remediation
of all Contaminants to the extent existing on, under, at, emanating from or
affecting the Property, as of the date of Closing, in violation of Environmental
Laws, and for which Seller shall be liable to remediate under Environmental Laws
except to the extent resulting from or caused by the activities of or
exacerbated by Purchaser after Closing. In no event shall Seller's remediation
involve any engineering or institutional controls, including, without
limitation, capping, a deed notice, a declaration of environmental restrictions
or other institutional control notice or a groundwater classification exception
area or well restriction area which would impair Purchaser's ability to finance
the Property or to use the Property for its current use or which would have a
material adverse affect on the property value of the Property or the groundwater
at, under, about, or emanating from the Property. Any such remediation and
associated activities shall be undertaken pursuant to a right of access
agreement reasonably acceptable to Purchaser, which agreement shall, among other
things, include the requirements imposed upon Purchaser under Section 3.1 above.
This paragraph shall survive the Closing for a period of two (2) years; and
(iii) Contemporaneously with the execution and delivery of this
Agreement, and subsequently, promptly upon receipt by Seller or its
representatives, deliver to Purchaser a certified true and complete copy of all
Environmental Documents.
7.2 Seller represents that set forth on Schedule 7.2 are the only
proceedings now pending for a reduction in the assessed valuation of the
Property. Seller is hereby authorized to continue the proceedings set forth on
Schedule 7.2, and except as provided in the next sentence, to litigate or settle
the same in Seller's discretion. Notwithstanding the foregoing, Seller shall
not litigate or settle any such matters without Purchaser's prior written
consent, not to be unreasonably withheld, if such litigation or settlement shall
affect the current tax year or any future tax year. Purchaser is hereby
authorized by Seller, in Purchaser's sole discretion, to file any applicable
proceeding for any tax years following the last tax year set forth on Schedule
7.2. The net refund of taxes, if any, for any tax year for which Seller or
Purchaser shall be entitled to share in the refund shall be divided between
Seller and Purchaser in accordance with the apportionment of taxes pursuant to
the provisions hereof. All expenses in connection therewith, including counsel
fees, shall be paid for by the party entitled to the benefits thereof, with a
pro-rata sharing between Seller and Purchaser for any tax year in which both
- --- ----
parties are
<PAGE>
entitled to a portion of the refund. The provisions of this Section shall
survive the Closing Date.
7.3 To the extent that any of the Promotional Materials are not in
the possession of Seller, Seller shall cause the holders or owners of same to
deliver such Materials to Purchaser, without cost or expense, which obligation
shall survive the Closing.
8. LEASING COMMISSIONS AND TENANT IMPROVEMENT OBLIGATIONS.
------------------------------------------------------
8.1 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 (but not renewals or extensions of such leases
which are exercised after the Closing Date) shall be paid by Seller. All
leasing commissions on account of extensions or renewals of Leases made after
the Closing Date shall be paid by Purchaser. All tenant improvements
obligations for the current term of any Lease shall be satisfied prior to the
Closing Date. Except as set forth in the Leases, there are no obligations of
the landlord under any Lease with respect to any tenant improvements. The
provisions of this Section shall survive the Closing.
9. ESTOPPEL CERTIFICATES.
---------------------
9.1 On or prior to the date hereof, Seller agrees to deliver to each
Tenant an estoppel certificate in the form annexed hereto as Exhibit 9.1 for
Tenant's execution, completed to reflect the Tenant's particular Lease status.
Seller agrees to use its best 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, Seller shall nevertheless be obligated
to obtain estoppel certificates in the form in which each Tenant is obligated to
deliver same as provided in its Lease. Seller agrees to deliver to Purchaser,
upon receipt, copies of all estoppel letters received by Tenants, in the form
received by Seller. An Estoppel Certificate shall be deemed delivered by a
particular Tenant for the purposes of this Agreement if it is in the form
required by the Lease for such Tenant. The estoppel certificates required to be
obtained pursuant to this Section 9.1 are collectively referred to as the
"Estoppel Certificates".
9.2 As a condition to Closing, Seller shall deliver (a) an Estoppel
Certificate from each Tenant which leases space at the Property in excess of
10,000 square feet or more in the aggregate and (b) Estoppel Certificates from
the remaining Tenants leasing at least seventy-five (75%) percent of the
aggregate remaining square footage of the Real Property.
9.3 For an Estoppel Certificate to be deemed delivered for purposes
of this Agreement, it must certify that the Tenant's most recent rental payment
under its Lease was made not more than one (1) month prior to the month in which
the Closing occurs.
9.4 Seller shall propose to Tenants in the Estoppel Certificates, a
provision, as follows:
<PAGE>
"Except as set forth in Schedule ____________ annexed hereto, Tenant
does not use, store, manufacture, generate, handle or dispose of at
the Property, any chemical, element or compound which is identified or
classified as a regulated substance, toxic substance, hazardous
substance, hazardous waste, pollution, pollutant, toxic pollutant,
contaminant, solid waste or special waste ("Hazardous Materials")
under any law, ordinance, rule, regulation, order, directive or
requirement of any governmental authority ("Laws"), other than small
quantities of household cleaning and office supplies and the typical
waste products resulting from the use thereof. To the extent
Hazardous Materials are set forth on Schedule _______________ annexed,
each of such Hazardous Materials is used, stored, manufactured,
generated, handled and disposed of in accordance with the Laws."
Provided, however, that such a provision shall not be required to be contained
in Estoppel Certificates to satisfy the conditions set forth in Subsection 9.2.
10. CLOSING.
-------
10.1 The consummation of the transactions contemplated hereunder (the
"Closing") shall take place at the offices of Eckell, Sparks, Levy, Auerbach,
Monte & Emper, P.C., 344 West Front Street, Media, PA 19063 on or about the
date which is fifteen (15) days following the end of the Inspection Period (the
"Closing Date"). Upon notice to Seller, Purchaser may elect to accelerate the
Closing Date to a date not less than five (5) days after the date of Purchaser's
notice.
10.2 On the Closing Date, Seller, at its sole cost and expense, will
execute and deliver or cause to be executed and delivered to Purchaser the
following documents:
(a) A special warranty deed (the "Deed"), in form reasonably
acceptable to and prepared by Purchaser and in proper statutory form for
recording so as to convey to Purchaser good and marketable title to the Real
Property, free and clear of all liens and encumbrances, except the Permitted
Encumbrances. The delivery of the Deed shall also be deemed to constitute a
transfer of the Personal Property associated with the Land conveyed by the Deed.
In no event shall the Deed contain a notification pursuant to 35 PA. Cons. Stat.
Ann. (S)6018.405, 35 PA. Cons. Stat. Ann. (S)6020.5120, or 25 PA. Code
(S)264.119, as amended, or any other Environmental Law.
-- -------
(b) All original Leases and all other documents pertaining
thereto, and certified copies of such Leases or other documents where Seller,
using its best efforts, is unable to deliver originals of same.
<PAGE>
(c) Originals of all other documents or instruments referred to herein
(except where copies are permitted), including without limitation the Service
Contracts, Licenses and Permits and Books and Records, and certified copies of
same where Seller, using its best efforts, is unable to deliver originals.
(d) A letter, in form reasonably acceptable to Purchaser, to Tenants
advising the Tenants of the sale hereunder and directing that rent and other
payments thereafter be sent to Purchaser or its designee, as Purchaser shall so
direct.
(e) Duly executed and acknowledged assignment and assumption of all
Leases, Rents, Security Deposits and Intangible Property in the form of Exhibit
10.2(e) annexed hereto.
(f) Duly executed and acknowledged assignment and assumption of all
Service Contracts in the form of Exhibit 10.2(f) annexed hereto, other than
those Service Contracts for which Purchaser elects not, or is not obligated, to
assume.
(g) If requested by Purchaser, a bill of sale, in form reasonably
acceptable to Purchaser, with respect to the Personal Property.
(h) An affidavit, and such other document or instruments reasonably
required by the Title Company, executed by Seller certifying to the Title
Company (i) against any work done or supplies delivered to the Property (other
than the work to be performed by Reality Online, Inc.) which might be grounds
for a materialman's or mechanic's lien under or pursuant to Pennsylvania Law, in
form sufficient to enable the Title Company to affirmatively insure Purchaser
against any such lien, (ii) that the signatures on the Deed are sufficient to
bind Seller and convey the Property to Purchaser and (iii) a list of tenants
under the Leases.
(i) Affidavits and other instruments, including but not limited to all
organizational documents of Seller and Seller's general partner including
operating agreements, filed copies of limited liability certificates, articles
of organization, and good standing certificates, reasonably requested by
Purchaser and the Title Company evidencing the power and authority of Seller 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 Purchaser to realize upon same.
(l) A certificate indicating that the representations and warranties
of
<PAGE>
Seller made in this Agreement are true and correct as of the Closing Date, or if
there have been any changes, a description thereof.
(m) A Rent Roll, current as of the Closing Date, certified by
Seller as being true and correct in all respects and showing no materially
adverse change from the Rent Roll annexed hereto.
(n) A letter from each applicable municipal department or agency
having jurisdiction that the Premises is in compliance with the laws, codes,
rules, regulations and ordinances regarding (i) zoning, (ii) building, (iii)
health and (iv) fire, life and safety.
(o) All proper instruments as shall be reasonably required for
the conveyance to Purchaser of all right, title and interest, if any, of Seller
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 pr Improvements 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 or Improvements.
(p) A certificate signed by an officer or partner of Seller to
the effect that Seller is not a "foreign person" as that term is defined in
Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended (the
"Code"), in order to avoid the imposition of the withholding tax payment
pursuant to Section 1445 of the Code.
(q) All such transfer and other tax affidavits, statements of
value, declarations and returns and information returns, duly executed and sworn
to by Seller as may be required of Seller by law in connection with the
conveyance of the Property to Purchaser, including but not limited to, Internal
Revenue Service forms.
(r) A statement setting forth the Purchase Price with all
adjustments and prorations shown thereon.
(s) Any instruments reasonably required by Purchaser evidencing
the assignment of the Tradenames.
(t) Such other documents as may be reasonably required or
appropriate to effectuate the consummation of the transactions contemplated by
this Agreement.
(u) A credit against the Purchase Price to the account of
Purchaser in the amount of all cash Security Deposits and any prepaid rents,
together with interest required to be paid thereon.
10.3 On the Closing Date, Purchaser, at its sole cost and expense,
will deliver
<PAGE>
or cause to be delivered to Seller the following documents:
10.3.1 The balance of the Purchase Price, net of adjustments and
prorations.
(a) Duly executed and acknowledged assignment and assumption of
all Leases, Rents, Security Deposits and Intangible Property in the form of
Exhibit 10.2(e) annexed hereto.
(b) Duly executed and acknowledged assignment and assumption of
all Service Contracts in the form of Exhibit 10.2(f) annexed hereto, other than
those Service Contracts for which Purchaser elects not to assume.
(c) A certificate indicating that the representations and
warranties of Purchaser made in this Agreement are true and correct as of the
Closing Date, or if there have been any changes, a description thereof.
(d) Such other documents as may be reasonably required or
appropriate to effectuate the consummation of the transactions contemplated by
this Agreement.
10.4 Seller and Purchaser shall each pay one-half (1/2) of all state
and local realty transfer taxes imposed on this transaction. Purchaser shall pay
all recording fees and charges necessary or required in order for the Deed to be
recorded in the appropriate county register's or recorder's office and all title
insurance premiums and examination fees and the costs of its due diligence
investigations, except as may specifically be provided for herein. Each party
shall be responsible for its own attorney's fees and one-half (1/2) of any
reasonable escrow fees. The provisions of this Section 10.4 shall survive the
Closing.
11. ADJUSTMENTS.
-----------
11.1 The following items with respect to the Property are to be
apportioned as of midnight on the date preceding the Closing:
(a) Rents and escalation charges payable by Tenants as and when
collected. All moneys received from Tenants from and after the Closing shall
belong to Purchaser and shall be applied by Purchaser to current rents and other
charges under the Leases. After application of such moneys to current rents and
charges, Purchaser agrees to remit to Seller 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, not in excess of one (1) month's rent.
(b) Utility charges payable by Seller, including, without
limitation, electricity, water charges and sewer charges. If there are meters on
the Real Property, Seller will cause readings of all said meters to be performed
not more than five (5) days prior to the Closing
<PAGE>
Date.
(c) Amounts payable under the Service Contracts other than those
Service Contracts which Purchaser has elected not to assume.
(d) Real estate taxes due and payable for the then current tax
year. 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 Seller agrees to pay Purchaser any increase shown by such
recomputation and vice versa.
(e) The value of fuel stored at any of the Real Property, at
Seller's most recent cost, including taxes, on the basis of a reading made
within ten (10) days prior to the Closing by Seller's supplier.
11.2 At the Closing, Seller shall deliver to Purchaser a list of
additional rent, however characterized, under each Lease, including without
limitation, real estate taxes, electrical charges, utility costs and operating
expenses (collectively, "Additional Rents") billed to Tenants for the calendar
year in which the Closing occurs (both on a monthly basis and in the aggregate),
the basis for which the monthly amounts are being billed and the amounts
incurred by Seller on account of the components of Additional Rent for such
calendar year. Upon the reconciliation by Purchaser of the Additional Rents
billed to Tenants, and the amounts actually incurred for such calendar year,
Seller and Purchaser shall be liable for overpayments of Additional Rents, and
shall be entitled to payments from Tenants, as the case may be, based on the
actual costs incurred by such party during each party's period of ownership
during such calendar year.
11.3 Except as otherwise provided in this Agreement, the adjustments
shall be made in accordance with the customs in respect to closings in the
Commonwealth of Pennsylvania.
11.4 Any errors in calculations or adjustments shall be corrected or
adjusted as soon as practicable after the Closing.
11.5 The provisions of this Section 11 shall survive the Closing
Date.
12. CONDITIONS PRECEDENT TO CLOSING.
-------------------------------
12.1 The obligations of Seller to deliver title to the Property and
to perform the other covenants and obligations to be performed by Seller 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 Seller):
<PAGE>
(a) The representations and warranties made by Purchaser herein shall
be true and correct in all respects with the same force and effect as though
such representations and warranties had been made on and as of the Closing Date.
(b) Purchaser shall have delivered to Seller all of the documents
provided herein for said delivery.
12.2 The obligations of Purchaser to accept title to the Property and
to perform the other covenants and obligations to be performed by Purchaser 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 Purchaser):
(a) The representations and warranties made by Seller herein shall be
true and correct in all respects with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date.
(b) Seller shall have performed all covenants and obligations
undertaken by Seller 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
Purchaser a Title Policy meeting the requirements set forth in Section 4 hereof
for an "insurable title".
(d) Seller shall have delivered to Purchaser all of the documents
provided herein for said delivery.
(e) The Property shall be in material compliance with all
Environmental Laws.
13. ASSIGNMENT.
----------
This Agreement may not be assigned by Purchaser except to a directly
or indirectly wholly-owned subsidiary or subsidiaries of Purchaser, or to a
partnership in which any such wholly-owned subsidiary or subsidiaries owns,
either directly or indirectly, at least 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 Purchaser shall constitute a default by
Purchaser hereunder and shall be deemed null and void and of no force and
effect. In addition, at Closing, Purchaser shall have the right to cause Seller
to direct the Deed and other closing instruments to such party as Purchaser
shall direct in writing. No assignment or direction of the closing instruments
shall relieve Purchaser from Purchaser's obligations under this Agreement.
<PAGE>
14. BROKER.
------
14.1 Purchaser and Seller represent that they have not dealt with any
brokers, finders or salesmen other than First Union/Maher Partners ("Broker"),
in connection with this transaction, and 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 either party may
sustain, incur or be exposed to by reason of any claim for fees or commissions
made by anyone other than Broker through the other party. Seller agrees that it
shall be solely liable for the commission due to Broker with respect to this
transaction. The provisions of this Section shall survive the Closing or other
termination of this Agreement.
15. CASUALTY LOSS.
-------------
15.1 Seller shall maintain fire and extended coverage insurance
policies with respect to the Property (the "Policy") in effect until the time of
the Closing which is at least equivalent in all material respects to the
insurance policies covering the Property as of the date hereof, which insurance
Seller represents is customary and prudent for the assets owned by Seller.
15.2 If at any time prior to the Closing Date any portion of the
Property is destroyed or damaged as a result of fire or any other casualty (a
"Casualty"), Seller shall promptly give written notice ("Casualty Notice")
thereof to Purchaser along with Seller's estimate, given in good faith, of the
cost to repair as a result of the Casualty (the "Repair Cost"). If the Repair
Cost is in excess of three (3%) percent of the Purchase Price, then Purchaser
shall have the right, at its sole option, of terminating this Agreement by
written notice to Seller given within fifteen (15) days after receipt of the
Casualty Notice. If Purchaser does not terminate this Agreement, the proceeds
of any insurance with respect to the Property paid between the date of this
Agreement and the Closing Date plus the amount of Seller's deductible under the
policy insuring the Casualty shall be paid to Purchaser at Closing, and all
unpaid claims and rights in connection with losses to the Property shall be
assigned to Purchaser at Closing without in any manner affecting the Purchase
Price.
15.3 Seller shall cause all temporary repairs to be made to the
Property as shall be required to prevent further deterioration and damage to the
Property prior to the Closing Date; provided, however, that any such repairs
shall first be approved by Purchaser, which approval shall not be unreasonably
delayed or withheld. Seller shall have the right to be reimbursed from the
proceeds of any insurance with respect to the Property paid between the date of
this Agreement and the Closing Date for the cost of all such repairs.
15.4 Seller shall not settle or compromise any insurance claims
without Purchaser's prior written consent.
16. CONDEMNATION.
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<PAGE>
In the event that prior to Closing, Seller shall become aware of the
institution or threatened institution of any proceedings, judicial,
administrative or otherwise, by eminent domain or otherwise, which propose to
affect a material portion of the Property or any portion of the Building, Seller
shall give notice (a "Condemnation Notice") to Purchaser promptly thereafter.
Within fifteen (15) days following receipt of the Condemnation Notice, Purchaser
shall have the right and option to terminate this Agreement by giving Seller
written notice thereof. Any damage to or destruction of a Property as a result
of a taking by eminent domain shall be deemed "material" for purposes of this
Section if the estimate of the damage, which estimate shall be performed by an
insurance adjuster and Purchaser's architect, shall exceed three (3%) percent of
the Purchase Price. Should Purchaser so terminate this Agreement in accordance
with this Section, neither party shall have any further liability or obligations
to the other. In the event Purchaser shall not elect to cancel this Agreement,
Seller shall assign all proceeds of such taking to Purchaser, same shall be
Purchaser's sole property, and Purchaser shall have the sole right to settle any
claim in connection with the Property.
17. PUBLICATION; CONFIDENTIALITY.
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17.1 Purchaser shall have the right to make such public announcements
or filings with respect to the exchange as Purchaser may deem reasonably
prudent. Purchaser shall not issue any such announcement without the prior
approval of Seller as to the text of the announcement, not to be unreasonably
withheld or delayed; provided, however, that Purchaser shall be entitled to make
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such filings or announcements upon advice of counsel as may be necessary or
required.
17.2 Without the prior written consent of the other party, until
Purchaser shall make a public announcement as provided in Section 17.1, neither
Purchaser nor Seller shall disclose, and Seller and Purchaser will direct their
respective representatives, employees, agents and consultants not to disclose,
to any person or entity the fact that Purchaser and Seller have entered into an
agreement to acquire the Property or any of the terms, conditions or other facts
with respect to this Agreement. Notwithstanding the foregoing, either party may
disclose those terms and conditions which are required to be disclosed pursuant
to law or in order to comply with this Agreement; provided, however, that the
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disclosing party shall use its best efforts to limit the disclosure to the
information necessary, shall advise any party to whom disclosure is made that
said terms and conditions are subject to a confidentiality requirement and shall
obtain the agreement of said party to keep any information disclosed to it as
confidential. In the event of a breach of the provisions of this Section 17.2,
either party shall be entitled to all of its rights and remedies at law or in
equity.
18. REMEDIES
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18.1 In the event Purchaser fails to perform on the Closing Date or
otherwise defaults hereunder, Purchaser's sole liability and Seller's sole
recourse shall be limited to an action for damages in the amount of Four Hundred
Twenty Thousand Dollars ($420,000). Seller
<PAGE>
agrees that such amount constitutes fixed and liquidated damages resulting from
Purchaser's default. Seller agrees that the exact amount of damages that Seller
will sustain is difficult to determine and that the amount of the liquidated
damages is a fair and reasonable estimate of such damages. Seller waives any
other claim, right or remedy at law or in equity, either against Purchaser or
against any person, known or unknown, disclosed or undisclosed.
18.2 (a) If, after complying with the terms of this Agreement,
Seller shall be unable to convey the Property in accordance with the terms of
this Agreement, the sole obligation and liability of Seller shall be to perform
in accordance with Section 4.10, following which this Agreement shall be deemed
canceled and the parties hereto shall be released of all obligations and
liabilities under this Agreement, except those that are expressly stated to
survive the cancellation or termination of this Agreement.
(b) In the event of any default on the part of Seller or
Seller's failure to comply with any representation, warranty or agreement in any
material respect, Purchaser shall be entitled: (i) to terminate this Agreement
upon notice to Seller, in which event neither party shall thereafter have any
further obligations under this Agreement; (ii) to commence an action against
Seller seeking specific performance of Seller's obligations under this
Agreement; (iii) to pursue all of its remedies at law or in equity, including
without limitation actions for recovery of lost profits and consequential
damages; or (iv) to do any or all of the above.
18.3 The acceptance of the Deed by Purchaser shall be deemed a full
performance and discharge of every agreement and obligation of Seller to be
performed under this Agreement, except those, if any, which are specifically
stated in this Agreement to survive the Closing or those which, by their terms,
cannot be performed or complied with until after the Closing.
18.4 The provisions of this Section 18 shall survive the Closing or
earlier termination of this Agreement.
19. NOTICE.
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19.1 All notices, demands, requests, or other writings (a "Notice")
in this Agreement provided to be given or made or sent, or which may be given or
made or sent, by either party hereto to the other, shall be in writing and shall
be delivered by depositing the same with any nationally recognized overnight
delivery service, or by telecopy or fax machine, in either event with all
transmittal fees prepaid, properly addressed, and sent to the following
addresses:
If to Purchaser: c/o Cali Realty Corporation
11 Commerce Drive
Cranford, New Jersey 07016
Attn: David Parisier,
<PAGE>
Director of Acquisitions
(908) 272-8000 (tele.)
(908) 272-6755 (fax)
with a copy to: c/o Cali Realty Corporation
11 Commerce Drive
Cranford, New Jersey 07016
Attention: Roger W. Thomas, Esq.
(908) 272-8000 (tele.)
(908) 272-6755 (fax)
with a copy to: Stephan K. Pahides, Esquire
Eckell, Sparks, Levy, Auerbach,
Monte & Emper, P.C.
344 West Front Street
Media, PA 19063
(610) 565-3700 (tele.)
(610) 565-1596 (fax)
<PAGE>
If Seller: Attn.: Roger C. Hope
President
c/o Valley Forge Equities, Inc.
920 Madison Avenue
Norristown, PA 19403
(610) 666-6000 (tele.)
(610) 666-6367 (fax)
with a copy to: Arthur S. O'Neill, Esquire
935 South Trooper Road
Norristown, PA 19403
(610) 666-5550 (tele.)
(610) 666-1950 (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.
19.2 Any Notice which, pursuant to this Agreement, requires a response
within a certain number of days or gives the other party certain rights if said
party responds within a certain number of days, shall set forth such requirement
or right in order for the Notice to be effective.
20. MISCELLANEOUS
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20.1 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 reasonably 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) Seller agrees to execute, acknowledge and
deliver any such reasonable instrument and to make any such deposit.
20.2 This Agreement (a) constitutes the entire agreement between the
parties and incorporates, (b) supersedes all prior negotiations and discussions
between the parties, (c) cannot be amended, waived or terminated orally, but
only by an agreement in writing signed by the party to be charged, (d) shall be
interpreted and governed by the laws of the Commonwealth
<PAGE>
of Pennsylvania and (e) shall be binding upon the parties hereto and their
respective successors and assigns.
20.3 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. 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.
20.4 Each party shall, from time to time, execute, acknowledge and
deliver such further instruments, and perform such additional acts, as the other
party may reasonably request in order to effectuate the intent of this
Agreement. Nothing contained in this Agreement shall be deemed to create any
rights or obligations of partnership, joint venture or similar association
between Seller and Purchaser. 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 Seller,
Purchaser or the party whose counsel drafted this Agreement.
20.5 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.
20.6 All references herein to any section, schedule or exhibit shall
be to the sections of this Agreement and to the schedules and exhibits annexed
hereto unless the context clearly dictates otherwise. All of the schedules and
exhibits annexed hereto are, by this reference, incorporated herein.
20.7 In the event of any litigation or alternative dispute resolution
between Seller and Purchaser 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.
20.8 This Agreement shall not be recorded in the office for recording
of deeds or in any other office or place of public record.
20.9 The parties waive the formal requirements for tender of payment
and deed. The parties agree that all times are of the essence.
20.10 The Legislature has established a Real Estate Recovery Fund.
The purpose of the fund is to compensate persons who obtain a judgment because
of the fraud, misrepresentation or deceit of an agent. For further information
concerning the Recovery Fund telephone: (717) 783-3658.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
SELLER:
THE TROOPER PARTNERSHIP, LTD
By: Valley Forge Equities, Inc.,
its general partner
By: /s/ Roger C. Hope
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ROGER C. HOPE, PRESIDENT
PURCHASER:
CALI REALTY ACQUISITION CORPORATION
By: /s/ Roger W. Thomas
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ROGER W. THOMAS,
VICE PRESIDENT
