UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1997
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number: 1-13274
MACK-CALI REALTY CORPORATION
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(Exact Name of Registrant as specified in its charter)
Maryland 22-3305147
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
11 Commerce Drive, Cranford, New Jersey 07016-3599
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(Address of principal executive offices (Zip code)
(908) 272-8000
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(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
(Title of Each Class) (Name of Each Exchange on Which Registered)
Common Stock, $0.01 par value New York Stock Exchange
Pacific Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendments to this Form 10-K. [X]
As of March 27, 1998, the aggregate market value of the voting stock held
by non-affiliates of the registrant was $2,180,886,172. The aggregate market
value was computed with references to the closing price on the New York Stock
Exchange on such date. This calculation does not reflect a determination that
persons are affiliates for any other purpose.
As of March 27, 1998, 55,830,686 shares of common stock, $0.01 par value,
of the Company ("Common Stock") were outstanding.
LOCATION OF EXHIBIT INDEX: The index of exhibits is contained in Part IV
herein on page number 59.
DOCUMENTS INCORPORATED BY REFERENCE: Portions of the registrant's
definitive proxy statement to be issued in conjunction with the registrant's
annual meeting of shareholders to be held on May 21, 1998 are incorporated by
reference in Part III of this Form 10-K.
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TABLE OF CONTENTS
FORM 10-K
Page #
------
PART I
Item 1 Business................................................... 3
Item 2 Properties ................................................ 13
Item 3 Legal Proceedings.......................................... 44
Item 4 Submission of Matters to a Vote of
Security Holders........................................ 44
PART II
Item 5 Market for Registrant's Common Stock
and Related Stockholder Matters ........................ 45
Item 6 Selected Financial Data.................................... 46
Item 7 Management's Discussion and Analysis of
Financial Condition and Results of
Operations.............................................. 49
Item 7a Quantitative and Qualitative Disclosures About
Market Risk............................................. 56
Item 8 Financial Statements and Supplementary
Data.................................................... 56
Item 9 Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure.................................... 56
PART III
Item 10 Directors and Executive Officers of
the Registrant ......................................... 57
Item 11 Executive Compensation..................................... 57
Item 12 Security Ownership of Certain
Beneficial Owners and Management........................ 57
Item 13 Certain Relationships and Related
Transactions ........................................... 57
PART IV
Item 14 Exhibits, Financial Statements, Schedules
and Reports on Form 8-K................................. 58
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PART I
ITEM 1. BUSINESS
GENERAL
Mack-Cali Realty Corporation, previously Cali Realty Corporation, (together with
its subsidiaries, the "Company") is a fully-integrated, self-administered and
self-managed real estate investment trust ("REIT") that owns and operates a
portfolio comprised predominantly of Class A office and office/flex properties
located primarily in the Northeast and Southwest, as well as commercial real
estate leasing, management, acquisition, development and construction
businesses. As of December 31, 1997, the Company owned 189 properties,
consisting of 118 office properties (the "Office Properties"), 59 office/flex
properties (the "Office/Flex Properties"), and six industrial/warehouse
properties (the "Industrial/Warehouse Properties"), encompassing an aggregate of
approximately 22.0 million square feet, as well as two multi-family residential
properties, two stand-alone retail properties, and two land leases
(collectively, the "Properties"). See "Business -- Recent Developments." As of
December 31, 1997, the Office Properties, Office/Flex Properties and
Industrial/Warehouse Properties in the aggregate, were approximately 95.8
percent leased to approximately 2,300 tenants. The Company believes that its
Properties have excellent locations and access and are well-maintained and
professionally managed. As a result, the Company believes that its Properties
attract high quality tenants and achieve among the highest rental, occupancy and
tenant retention rates within their markets.
The Company's strategy has been to focus its development and ownership of office
properties in sub-markets where it is, or can become, a significant and
preferred owner and operator. The Company will continue this strategy by
expanding, primarily through acquisitions, initially into sub-markets where it
has, or can achieve, similar status. Consistent with its growth strategy, during
1997, the Company acquired 132 properties, primarily office and office/flex
properties, for an aggregate acquisition cost of approximately $1.8 billion,
including the December 1997 acquisition of 54 Class A office properties (the
"Mack Properties"), aggregating approximately 9.2 million square feet, from The
Mack Company and Patriot American Office Group for a total cost of approximately
$1.1 billion (the "Mack Transaction"). Additionally, in January 1997 the Company
completed the acquisition of 65 properties, aggregating approximately 4.1
million square feet, (the "RM Properties") of the Robert Martin Company, LLC
("RM") and affiliates for approximately $450.0 million the ("RM Transaction").
See "Business -- Recent Developments." Management believes that the recent trend
towards increasing rental and occupancy rates in office buildings in the
Company's sub-markets continues to present significant opportunities for
growth. The Company may also develop properties in such sub-markets,
particularly with a view towards potential utilization of certain vacant land
recently acquired or on which the Company holds options. Management believes
that its extensive market knowledge provides the Company with a significant
competitive advantage which is further enhanced by its strong reputation for and
emphasis on delivering highly responsive management services, including direct
and continued access to the Company's senior management. See "Business -- Growth
Strategies."
The Company's ten largest tenants, based on actual rent billings in December
1997, are AT&T Corporation, AT&T Cellular Services, Donaldson, Lufkin & Jenrette
Securities Corp., Dow Jones Telerate Systems Inc., Prentice-Hall Inc., American
Institute of Certified Public Accountants (AICPA), Allstate Insurance Company,
CMP Media Inc., Toys 'R' Us, Inc., and KPMG Peat Marwick LLP. The average age of
the Office Properties, Office/Flex Properties and Industrial/Warehouse
Properties is approximately 15, 15 and 36 years, respectively.
Cali Associates, the entity to whose business the Company succeeded in 1994, was
founded by John J. Cali, Angelo R. Cali and Edward Leshowitz (the "Founders")
who have been involved in the development, leasing, management, operation and
disposition of commercial and residential properties in Northern and Central New
Jersey for over 40 years and have been primarily focusing on office building
development for the past fifteen years. In addition to the Founders, the
Company's executive officers have been employed by the Company and its
predecessor for an average of approximately 10 years. The Company and its
predecessor have built approximately four million square feet of office space,
more than one million square feet of industrial facilities and over 5,500
residential units.
Upon the completion of the Mack Transaction on December 11, 1997, the Company
became one of the largest equity REITs in the country. The transaction also
marked the combination with the Company of respected names in the real estate
business, most notably William L. Mack and Mitchell E. Hersh. In connection with
the Mack Transaction, Mr. Mack and Mr. Hersh were appointed to the Board of
Directors of the Company. Mr. Mack also serves as Chairman of the Executive
Committee of the Board of Directors, and Mr. Hersh also serves as President and
Chief Operating Officer of the Company. In connection with the Mack Transaction,
Thomas A. Rizk resigned as President of the Company, but
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remains as Chief Executive Officer and as a Director of the Company. See
"Recent Developments -- Mack Transaction" for a more detailed description of the
Mack Transaction. With the completion of the Mack Transaction, the Company
changed its name from "Cali Realty Corporation" to "Mack-Cali Realty
Corporation" and its operating partnership changed its name from "Cali Realty,
L.P." to "Mack-Cali Realty, L.P."
As of March 10, 1998, executive officers and directors of the Company and other
former owners of interests in certain of the Properties (many of whom are
employees of the Company) owned approximately 20.1 percent of the Company's
outstanding shares of Common Stock (including Units redeemable or convertible
for shares of Common Stock). As used herein, the term "Units" refers to limited
partnership interests in Mack-Cali Realty, L.P., a Delaware limited partnership
(the "Operating Partnership"), through which the Company conducts its real
estate activities.
The Company performs substantially all construction, leasing, management and
tenant improvements on an "in-house" basis and is self-administered and
self-managed.
The Company was incorporated on May 24, 1994. The Company's executive offices
are located at 11 Commerce Drive, Cranford, New Jersey 07016, and its telephone
number is (908) 272-8000. The Company has an internet Web address at
"http://www.mack-cali.com".
GROWTH STRATEGIES
The Company's objectives are to maximize growth in funds from operations (as
defined in Item 6 below) and to enhance the value of its portfolio through
effective management, acquisition and development strategies. The Company
believes that opportunities exist to increase cash flow per share by: (i)
implementing operating strategies to produce increased effective rental and
occupancy rates and decreased concession and tenant installation costs as
vacancy rates in the Company's sub-markets continue to decline; (ii) acquiring
properties with attractive returns in sub-markets where, based on its expertise
in leasing, managing and operating properties, it is, or can become, a
significant and preferred owner and operator; and (iii) developing properties
where such development will result in a favorable risk-adjusted return on
investment.
Based on its evaluation of current market conditions, the Company believes that
a number of factors will enable it to achieve its business objectives,
including: (i) the limited availability to competitors of capital for financing
development, acquisitions or capital improvements or for refinancing maturing
mortgages; (ii) the lack of new construction in the Company's primary markets
providing the Company with the opportunity to maximize occupancy levels at
attractive rental rates; and (iii) the large number of distressed sellers and
inadvertent owners (through foreclosure or otherwise) of office properties in
the Company's primary markets creating enhanced acquisition opportunities.
Management believes that the Company is well positioned to exploit existing
opportunities because of its extensive experience in its markets and its proven
ability to acquire, develop, lease and efficiently manage office properties.
The Company focuses on enhancing growth in cash flow per share by: (i)
maximizing cash flow from the existing Properties through continued active
leasing and property management; (ii) managing operating expenses through the
use of in-house management, leasing, marketing, financing, accounting, legal,
construction, management and data processing functions; (iii) emphasizing
programs of repairs and capital improvements to enhance the Properties'
competitive advantages in their markets; (iv) maintaining and developing
long-term relationships with a diverse tenant group; and (v) attracting and
retaining motivated employees by providing financial and other incentives to
meet the Company's operating and financial goals.
The Company will seek to increase its cash flow per share by acquiring
additional properties that: (i) provide attractive initial yields with
significant potential for growth in cash flow from property operations; (ii) are
well located, of high quality and competitive in their respective sub-markets;
(iii) are located in its existing sub-markets or in sub-markets which lack a
significant owner or operator; and (iv) have been under-managed or are otherwise
capable of improved performance through intensive management and leasing that
will result in increased occupancy and rental revenues.
Consistent with its acquisition strategy during 1997, the Company invested an
aggregate of approximately $1.8 billion in the Mack Transaction, the RM
Transaction and the acquisition of 13 other office and office/flex properties
(the "Individual Property Acquisitions"), thereby increasing its portfolio by
approximately 308 percent over year-end 1996 (based upon total net rentable
square feet). See "Business -- Recent Developments." There can be no assurance,
however, that the Company will be able to improve the operating performance of
any properties that are acquired.
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The Company may also develop office and office/flex space on certain vacant land
acquired in connection with various acquisitions, or on which the Company holds
options, when market conditions support a favorable risk-adjusted return on such
development, primarily in stable submarkets where the demand for such space
exceeds available supply and where the Company is, or can become, a significant
owner and operator. The Company believes that opportunities exist for it to
acquire properties in the majority of its sub-markets at less than replacement
cost. Therefore, the Company currently intends to emphasize its acquisition
strategies over its development strategies until market conditions change. To
the extent that the costs associated with implementing such acquisition and
development strategies are financed using the Company's cash flow, such costs
may adversely affect the Company's ability to make distributions.
The Company currently intends to maintain a ratio of debt to total market
capitalization (total debt of the Company as a percentage of the market value of
issued and outstanding shares of Common Stock, including interests redeemable
therefor, plus total debt) of approximately 50 percent or less, although the
Company's organizational documents do not limit the amount of indebtedness that
the Company may incur. As of December 31, 1997, the Company's total debt
constituted approximately 27.8 percent of the total market capitalization of the
Company. The Company will utilize the most appropriate sources of capital for
future acquisitions, development and capital improvements, which may include
funds from operating activities, short-term and long-term borrowings (including
draws on the Company's revolving credit facilities) and issuances of debt
securities or additional equity securities.
EMPLOYEES
As of December 31, 1997, the Company had over 300 employees.
COMPETITION
The leasing of real estate is highly competitive. The Company's Properties
compete for tenants with lessors and developers of similar properties located in
its respective markets primarily on the basis of location, rent charged,
services provided, and the design and condition of property improvements. The
Company also experiences competition when attempting to acquire equity interests
in desirable real estate, including competition from domestic and foreign
financial institutions, other REIT's, life insurance companies, pension trusts,
trust funds, partnerships and individual investors.
REGULATIONS
Many laws and governmental regulations are applicable to the Properties and
changes in these laws and regulations, or their interpretation by agencies and
the courts, occur frequently.
Under various laws and regulations relating to the protection of the
environment, an owner of real estate may be held liable for the costs of removal
or remediation of certain hazardous or toxic substances located on or in the
property. These laws often impose liability without regard to whether the owner
was responsible for, or even knew of, the presence of such substances. The
presence of such substances may adversely affect the owner's ability to rent or
sell the property or to borrow using such property as collateral and may expose
it to liability resulting from any release of, or exposure to, such substances.
Persons who arrange for the disposal or treatment of hazardous or toxic
substances at another location may also be liable for the costs of removal or
remediation of such substances at the disposal or treatment facility, whether or
not such facility is owned or operated by such person. Certain environmental
laws impose liability for release of asbestos-containing materials into the air,
and third parties may also seek recovery from owners or operators of real
properties for personal injury associated with asbestos-containing materials and
other hazardous or toxic substances. In connection with the ownership (direct or
indirect), operation, management and development of real properties, the Company
may be considered an owner or operator of such properties or as having arranged
for the disposal or treatment of hazardous or toxic substances and, therefore,
potentially liable for removal or remediation costs, as well as certain other
related costs, including governmental penalties and injuries to persons and
property.
The Company obtained Phase I Assessments of each of its original properties (the
"Initial Properties") at the time of its initial public offering in August 1994
(the "IPO"). With the acquisition of each new property, the Company obtains a
Phase I Assessment for such property. These Phase I Assessments have not
revealed any environmental liability that the Company believes would have a
material adverse effect on the Company's business, assets or results of
operations taken as a whole, nor is the Company aware of any such material
environmental liability.
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In connection with the RM Transaction, the Company's environmental consultant
undertook environmental audits of the properties, including sampling activities,
which identified certain environmental conditions at several of the properties
(the "Designated Properties") that will likely require further investigation
and/or remedial activities. RM retained the liability and responsibility for
remediation of the environmental conditions of the Designated Properties, and
established an escrow in the amount of $1.5 million (the "Environmental Escrow")
as a clean-up fund. It is possible that the Company's assessments do not reveal
all environmental liabilities and that there are material environmental
liabilities of which the Company is unaware. Any remediation costs for the
Designated Properties exceeding the Environmental Escrow will remain the
responsibility of RM, with RM retaining the right to repurchase some or all of
the Designated Properties under certain conditions, including if the costs of
remediation of such property exceeds either its allocated property value or the
Environmental Escrow. See "Business -- Recent Developments -- RM Transaction."
There can be no assurance that (i) future laws, ordinances or regulations will
not impose any material environmental liability, (ii) the current environmental
condition of the Properties will not be affected by tenants, by the condition of
land or operations in the vicinity of the Properties (such as the presence of
underground storage tanks), or by third parties unrelated to the Company or
(iii) the Company's assessments reveal all environmental liabilities and that
there are no material environmental liabilities of which the Company is unaware.
If compliance with the various laws and regulations, now existing or hereafter
adopted, exceeds the Company's budgets for such items, the Company's ability to
make expected distributions to stockholders could be adversely affected.
There are no other laws or regulations which have a material effect on the
Company's operations, other than typical federal, state and local laws affecting
the development and operation of real property, such as zoning laws.
INDUSTRY SEGMENTS
The Company operates in only one industry segment-real estate. The Company does
not have any foreign operations and its business is not seasonal.
RECENT DEVELOPMENTS
During 1997, the Company completed the RM Transaction, the Mack Transaction and
the Individual Property Acquisitions, and has improved the operating performance
of its existing portfolio by maintaining high occupancies and controlling costs.
The Company's funds from operations (after adjustment for the straight-lining of
rents) for the year ended December 31, 1997 was $111.8 million. As a result of
the Company's improved operating performance and expanded equity capital base
through equity offerings of its Common Stock, in September 1997 the Company
announced an 11.1 percent increase in its regular quarterly distribution,
commencing with the Company's distribution with respect to the third quarter of
1997, from $0.45 per share of Common Stock ($1.80 per share of Common Stock on
an annualized basis) to $0.50 per share of Common Stock ($2.00 per share of
Common Stock on an annualized basis). Since 1995, the Company has increased its
regular quarterly distribution by 23.8 percent.
During 1997, the Company invested approximately $1.8 billion in the purchase of
the RM Transaction, the Mack Transaction and the Individual Property
Acquisitions, increasing its portfolio by approximately 308 percent (based upon
total net rentable square feet). The cash portions of the purchase prices for
such transactions and acquisitions (as more fully described below) were obtained
by the Company from (i) the net proceeds of the Company's public offering of
Common Stock in October 1997 for net proceeds of approximately $489.1 million,
(ii) borrowings under the Company's revolving credit facilities and from the
$200.0 million Prudential Term Loan (as hereinafter defined), and (iii)
available working capital. Furthermore, approximately $348.3 million in Units
were issued in connection with the RM Transaction, the Mack Transaction and one
of the Individual Property Acquisitions. In addition, a portion of each of the
purchase prices for the RM Transaction and the Mack Transaction included the
assumption of mortgage indebtedness ($185.3 million for the RM Transaction and
$291.9 million for the Mack Transaction). See "Business -- Financing
Activities." Set forth below are summary descriptions of the RM Transaction, the
Mack Transaction and the Individual Property Acquisitions:
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RM Transaction
On January 31, 1997, the Company acquired the RM Properties for a total cost of
approximately $450.0 million. The RM Properties consist of 16 office properties,
38 office/flex properties, six industrial/warehouse properties, two stand-alone
retail properties, two land leases, and a multi-family residential property. The
RM Transaction was financed through the assumption of a $185.3 million mortgage,
approximately $220.0 million in cash, substantially all of which was obtained
from the Company's cash reserves, and the issuance of 1,401,225 Units, valued at
approximately $43.8 million.
In connection with the RM Transaction, the Company assumed a $185.3 million
non-recourse mortgage with Teachers Insurance and Annuity Association of
America, with interest only payable monthly at a fixed annual rate of 7.18
percent (the "TIAA Mortgage"). The TIAA Mortgage is secured and
cross-collateralized by 43 of the RM Properties and matures on December 31,
2003. The Company, at its option, may convert the TIAA Mortgage to unsecured
debt upon achievement by the Company of an investment credit rating of Baa3/BBB-
or better. The TIAA Mortgage is prepayable in whole or in part subject to
certain provisions, including yield maintenance.
The RM Properties, which consist primarily of 54 office and office/flex
properties aggregating approximately 3.7 million square feet and six
industrial/warehouse properties aggregating approximately 387,000 square feet,
are located primarily in established business parks in Westchester County, New
York and Fairfield County, Connecticut. The Company has agreed not to sell
certain of the RM Properties for a period of seven years without the consent of
the RM principals, except for sales made under certain circumstance and/or
conditions.
In connection with the RM Transaction, the Company was granted a three-year
option to acquire two properties (the "Option Properties") under certain
conditions, one of which was acquired in 1997. See "Recent Developments --
Individual Property Acquisitions." The purchase price for the remaining Option
Property is subject to adjustment based upon different formulas and is payable
in cash or common units.
In connection with the RM Transaction, the Company holds a $7.3 million
non-recourse mortgage loan ("Mortgage Note Receivable") with entities controlled
by the RM principals, bearing interest at an annual rate of 450 basis points
over the one-month London Inter-Bank Offered Rate (LIBOR). The Mortgage Note
Receivable, which is secured by the remaining Option Property and guaranteed by
certain of the RM principals, matures on February 1, 2000.
In conjunction with the completion of the RM Transaction, Robert F. Weinberg and
Brad W. Berger, son of Martin S. Berger, co-founder of RM with Mr. Weinberg,
were appointed to the Company's Board of Directors for an initial term of three
years. Mr. Berger subsequently resigned from the Board of Directors in December
1997 as a result of the Mack Transaction.
Mack Transaction
On December 11, 1997, the Company acquired the Mack Properties from The Mack
Company and Patriot American Office Group, pursuant to a Contribution and
Exchange Agreement (the "Agreement"), for a total cost of approximately $1.1
billion.
The Mack Properties consist of 54 office properties comprising a total of
approximately 9.2 million net rentable square feet, ranging from approximately
40,000 to 475,100 square feet. The Mack Properties are located primarily in the
Northeast and Southwest, with a concentration of properties located in Northern
New Jersey (25 properties compromising approximately 4.8 million square feet),
Texas (17 properties comprising approximately 2.5 million square feet) and
Arizona (four properties comprising approximately 485,000 square feet).
The total cost of the Mack Transaction was financed as follows: (i)
approximately $498.8 million in cash made available from the Company's cash
reserves and from the $200.0 million term loan from Prudential Securities Credit
Corp. (the "Prudential Term Loan"), (ii) approximately $291.9 million in
mortgage debt assumed by the Company (the "Mack Mortgages"), (iii) the issuance
of 1,965,886 common Units, valued at approximately $66.4 million, (iv) the
issuance of 15,237 Series A preferred units and 215,325 Series B preferred
units, valued at approximately $236.5 million (collectively, the "Preferred
Units"), (v) warrants to purchase 2,000,000 common units (the "Unit Warrants"),
valued at approximately $8.5 million, and (vi) the issuance of Contingent Units
(as defined below). The Preferred Units are convertible into common units at
$34.65 per unit and the Unit Warrants are exercisable at $37.80 per unit.
2,006,432 contingent common units, 11,895 Series A contingent Preferred Units
and 7,799 Series B contingent Preferred Units (collectively, the "Contingent
Units") were issued as contingent non-participating units. Such Contingent Units
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have no voting, distribution or other rights until such time as they are
redeemed into common units, Series A Preferred Units, and Series B Preferred
Units, respectively. Redemption of such Contingent Units shall occur upon the
achievement of performance goals relating to certain of the Mack Properties,
specifically the achievement of certain leasing activity.
With the Mack Transaction, the Company assumed an aggregate of approximately
$291.9 million of mortgage indebtedness with eight separate lenders, encumbering
17 of the Mack Properties. Such debt matures at various dates from March 1998
through January 2009. The Mack Mortgages are comprised of an aggregate of
approximately $199.9 million of fixed rate debt bearing interest at a weighted
average rate of approximately 7.66 percent per annum, certain of which require
monthly principal amortization payments, and an aggregate of approximately $91.9
million in variable rate debt bearing interest at a weighted average floating
rate of approximately 76 basis points over LIBOR.
With the completion of the Mack Transaction, the "Cali Realty Corporation" name
was changed to "Mack-Cali Realty Corporation", and the name of the Operating
Partnership was changed from "Cali Realty, L.P." to "Mack-Cali Realty, L.P."
In connection with the Mack Transaction, Brant Cali, Brad W. Berger, Angelo R.
Cali, Kenneth A. DeGhetto, James W. Hughes and Alan Turtletaub resigned from the
Board of Directors of the Company. Mitchell E. Hersh, William L. Mack and Earle
I. Mack were added to the Board as "inside" members, and Martin D. Gruss,
Jeffrey B. Lane, Vincent Tese and Paul A. Nussbaum were added as independent
members.
In accordance with the Agreement, Thomas A. Rizk remained Chief Executive
Officer but resigned as President of the Company, with Mitchell E. Hersh
appointed as President and Chief Operating Officer. The Company's other officers
retained their existing positions and responsibilities, except that Brant Cali
resigned as Chief Operating Officer and John R. Cali resigned as Chief
Administrative Officer. Brant Cali and John R. Cali remained as officers of the
Company as Executive Vice Presidents.
Entering into new employment agreements with the Company after the Mack
Transaction on December 11, 1997 were Thomas A. Rizk, Mitchell E. Hersh, Brant
Cali, and John R. Cali. Entering into amended and restated employment agreements
were Roger W. Thomas, as Executive Vice President, General Counsel and Assistant
Secretary, Barry Lefkowitz, as Executive Vice President and Chief Financial
Officer and Timothy M. Jones, as Executive Vice President.
Additionally, the Company entered into non-competition agreements on December
11, 1997 with each of William, Earle, David and Fredric Mack, which restricted
the business dealings of such individuals relative to their involvement in
commercial real estate activities to those specified in the Agreement. The
non-competition agreements have a term of the later of (a) three years from the
completion of the Mack Transaction, or (b) the occurrence of specified
circumstances including, but not limited to, the removal of William, Earle,
David or Fredric Mack, respectively, from the Company's Board of Directors or
Advisory Board, as applicable, and a decrease in certain ownership levels.
In connection with the Mack Transaction, under each of the Company's executive
officer's then existing employment agreements (dated January 21, 1997), due to a
change of control of the Company (as defined in each employment agreement), each
of the aforementioned officers received the benefit of the acceleration of (i)
the immediate vesting and issuance of his restricted stock, including tax
gross-up payments associated therewith, (ii) the forgiveness of his Stock
Purchase Rights loan, including tax gross-up payments associated therewith, and
(iii) the vesting of his unvested employee stock options and warrants.
Additionally, under each of Thomas Rizk's, Brant Cali's and John R. Cali's
employment agreements with the Company, each of these officers became entitled
to receive certain severance-type payments, as a result of certain provisions in
each of their agreements, triggered as result of the Mack Transaction. Finally,
certain officers and employees of the Company were given transaction-based
payments as a reward for their efforts and performance in connection with the
Mack Transaction. The total expense associated with the acceleration of vesting
of restricted stock, the forgiveness of Stock Purchase Rights loans, and the
payment of certain severance-type payments as well as performance payments, and
related tax-obligation payments, which were approved by the Company's Board of
Directors and which took place simultaneous with completion of the Mack
Transaction, totaled $45.8 million.
Individual Property Acquisitions
In addition to the RM Transaction and the Mack Transaction, during 1997, the
Company invested approximately $204.4 million in the acquisition of 13 office
and office/flex properties.
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On January 28, 1997, the Company acquired 1345 Campus Parkway, a 76,300 square
foot office/flex property, located in Wall Township, Monmouth County, New Jersey
for approximately $6.7 million in cash, made available from the Company's cash
reserves. The property is located in the same office park in which the Company
previously acquired two office properties and four office/flex properties in
November 1995.
On May 8, 1997, the Company acquired four buildings in Westlakes Office Park, a
suburban Class A office complex located in Berwyn, Chester County, Pennsylvania,
totaling approximately 444,350 square feet. The properties were acquired for a
total cost of approximately $74.7 million, which was made available primarily
from drawing on one of the Company's credit facilities.
On July 21,1997, the Company acquired two vacant office buildings in the
Moorestown Corporate Center, a suburban Class A office complex located in
Moorestown, Burlington County, New Jersey. The properties, each consisting of
74,000 square feet, were acquired for a total cost of approximately $10.2
million, which was made available from drawing on one of the Company's credit
facilities.
On August 1, 1997, the Company acquired 1000 Bridgeport Avenue, a 133,000 square
foot Class A office building located in Shelton, Fairfield County, Connecticut.
The property was acquired for a total cost of approximately $15.8 million, which
was made available from drawing on one of the Company's credit facilities.
On August 15, 1997, the Company acquired one of the Option Properties, 200
Corporate Boulevard South ("200 Corporate"), an 84,000 square foot office/flex
building located in Yonkers, Westchester County, New York. The property was
acquired for approximately $8.1 million through the exercise of a purchase
option obtained in connection with the RM Transaction. The acquisition cost, net
of the mortgage receivable prepayment described below, was financed from the
Company's cash reserves.
In conjunction with the acquisition of 200 Corporate, the sellers of the
property, certain RM principals, prepaid $4.4 million of the $11.6 million
Mortgage Note Receivable between the Company and such RM principals.
On September 3, 1997, the Company acquired Three Independence Way, a 111,300
square foot Class A office building in South Brunswick, Middlesex County, New
Jersey. The property was acquired for a total cost of approximately $13.4
million, which was made available from drawing on one of the Company's credit
facilities.
On November 19, 1997, the Company acquired 1000 Madison Avenue, a 100,655 square
foot Class A office building located in Lower Providence Township, Montgomery
County, Pennsylvania. The property was acquired for approximately $14.3 million,
which was made available from the Company's cash reserves.
On December 19, 1997, the Company acquired 100 Overlook Center, a 149,600 square
foot Class A office building, in Princeton, Mercer County, New Jersey. The
property was acquired for a total cost of approximately $27.2 million, which was
funded through the issuance of 41,421 Common Units, valued at approximately $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, a 248,700 square-foot Class A 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.
First Quarter 1998 Acquisitions
On January 23, 1998, the Company acquired 10 acres of vacant land in the
Stamford Executive Park, located in Stamford, Fairfield County, Connecticut for
approximately $1.3 million, which was funded from the Company's cash reserves.
The vacant land, on which the Company plans to develop a 40,000 square-foot
office/flex property, was acquired from RMC Development Company, LLC. In
conjunction with the acquisition of the developable land, the Company signed a
15-year lease, on a triple-net basis, with a single tenant to occupy the entire
property being developed.
On January 30, 1998, the Company acquired a 17-building office/flex portfolio,
aggregating approximately 748,660 square feet located in the Moorestown West
Corporate Center in Moorestown, Burlington County, New Jersey and in Bromley
Commons in Burlington, Burlington County, New Jersey. The 17 properties were
acquired for a total cost of approximately $47.0 million. The Company is under
contract to acquire an additional four office/flex properties in the same
locations. The Company also has an option to purchase a property following
completion of construction and
9
<PAGE>
required lease-up for approximately $3.7 million. The purchase contract also
provides the Company a right of first refusal to acquire up to six additional
office/flex properties totaling 202,000 square feet upon their development and
lease-up. The initial transaction was funded primarily from drawing on one of
the Company's credit facilities as well as the assumption of mortgage debt with
an estimated value of approximately $8.4 million (the "McGarvey Mortgages"). The
McGarvey Mortgages currently have a weighted average annual effective interest
rate of 6.24 percent and are secured by five of the office/flex properties
acquired.
On February 2, 1998, the Company acquired 2115 Linwood Avenue, a 68,000
square-foot vacant office building located in Fort Lee, Bergen County, New
Jersey. The building was acquired for approximately $5.1 million, which was made
available from drawing on one of the Company's credit facilities.
On February 5, 1998, the Company acquired 500 West Putnam Avenue, a 121,250
square-foot office building located in Greenwich, Fairfield County, Connecticut.
The property was acquired for a total cost of approximately $20.1 million,
funded from drawing on one of the Company's credit facilities as well as the
assumption of mortgage debt with an estimated value of $12.1 million which bears
interest at an annual effective interest rate of 6.52 percent.
On February 25, 1998, the Company acquired 10 Mountainview Road, a 192,000
square-foot office building, located in Upper Saddle River, Bergen County, New
Jersey. The property was acquired for approximately $24.5 million, which was
made available from proceeds received from the Company's February 1998 public
offering of common stock.
On March 12, 1998, the Company acquired 1250 Capital of Texas Highway South, a
270,703 square-foot office building located in Austin, Travis County, Texas. The
property was acquired for approximately $37.0 million, which was made available
from drawing on one of the Company's credit facilities.
On March 27, 1998, the Company acquired for approximately $170.0 million
substantially all of the interests in Prudential Business Campus, an 875,000
square-foot office complex with five office buildings and a daycare center, plus
land parcels, located in Parsippany and East Hanover, Morris County, New Jersey.
The properties were acquired utilizing the proceeds from the $100.0 million
Equity Placement (as hereinafter defined) and from drawing on one of the
Company's credit facilities.
Additionally, in March, the Company signed a contract to purchase Morris County
Financial Center, a 308,215 square-foot two-building office complex located in
Parsippany, Morris County, New Jersey for $52.5 million.
The Company also announced in March, an agreement to acquire 19 properties from
Pacifica Holding Company ("Pacifica"), a private real estate owner and operator
in Denver, Colorado, for a total cost of $188.0 million. The acquisition will
include Pacifica's entire 1.4 million square-foot office portfolio, which
includes 19 office buildings, and related operations; and 2.5 acres of land
located in the Denver Tech Center. Pacifica's office properties are located in
suburban Denver and Colorado Springs, Colorado.
FINANCING ACTIVITIES
The Company utilizes the most appropriate sources of capital for acquisitions,
development, joint ventures and capital improvements, which sources may include
undistributed funds from operations, borrowings under its revolving credit
facilities, issuances of debt or equity securities and/or bank and other
institutional borrowings.
Revolving Credit Facilities and Other Indebtedness
As of December 31, 1997, the Company's two revolving credit facilities consisted
of the Unsecured Facility and the Prudential Facility (each described below)
with an aggregate borrowing capacity of $500.0 million and an aggregate
outstanding balance of $122.1 million.
The Company has a revolving credit facility ("Prudential Facility") from
Prudential Securities Credit Corp. ("PSC"), an affiliate of Prudential
Securities Incorporated, in the amount of $100.0 million, which currently bears
interest at 110 basis points over one-month LIBOR, and matures on March 31,
1999. The Prudential Facility is a recourse liability of the Operating
Partnership and is secured by the Company's equity interest in its property
known as the Harborside Financial Center ("Harborside"). The terms of the
Prudential Facility include certain restrictions and covenants that limit, among
other things, dividend payments and additional indebtedness and that require
compliance with specified financial ratios and other financial measurements.
10
<PAGE>
In August 1997, the Company obtained an unsecured revolving credit facility (the
"Unsecured Facility") in the amount of $400.0 million from a group of 13 lender
banks. The unsecured Facility has a three year term and currently bears interest
at 125 basis points over one-month LIBOR. Based upon the Company's achievement
of an investment grade long-term unsecured debt rating, the interest rate will
be reduced, on a sliding scale, and a competitive bid option will become
available. The lending group for the Unsecured Facility includes: Fleet National
Bank, The Chase Manhattan Bank, and Bankers Trust Company, as agents; PNC Bank,
N.A., Bank of America National Trust and Savings Association, Commerzbank AG,
and First National Bank of Chicago, as co-agents; and Keybank, Summit Bank,
Crestar Bank, Mellon Bank, N.A., Signet Bank, and KredietBank NV.
The terms of the Unsecured Facility include certain restrictions and covenants
which limit, among other things, dividend payments and additional indebtedness
and which require compliance with specified financial ratios and other financial
measurements. The Unsecured Facility also requires a fee on the unused balance
payable quarterly in arrears, at a rate ranging from one-eighth of one percent
to one-quarter of one percent of such balance, depending on the level of
borrowings outstanding in relation to the total facility commitment.
Concurrently with the closing of the Unsecured Facility, the Company drew funds
on such facility to repay in full and terminate two of the Company's existing
secured revolving credit facilities and to repay in full the then outstanding
balance under its Prudential Facility. In addition, in August 1997, the Company
retired its remaining $64.5 million real estate mortgage investment conduit
(REMIC) secured financing primarily from funds drawn on the Unsecured Facility.
On December 10, 1997, the Company obtained the Prudential Term Loan in the
amount of $200.0 million from PSC. The proceeds of the loan were used to fund a
portion of the cash consideration in completion of the Mack Transaction. The
loan has a one-year term and bears interest at 110 basis points over one-month
LIBOR.
Contingent Obligation
As part of the Harborside acquisition in 1996, the Company agreed to make
payments (with an estimated net present value of approximately $5.7 million at
December 31, 1997) to the seller for development rights ("Contingent
Obligation") if and when the Company commences construction on the acquired site
during the next several years. However, the agreement provides, among other
things, that even if the Company does not commence construction, the seller may
nevertheless require the Company to acquire these rights during the six-month
period after the end of the sixth year. After such period, the seller's option
lapses, but any development in years 7 through 30 will require a payment, on an
increasing scale, for the development rights.
Permanent Indebtedness
As of December 31, 1997, the Company had outstanding an aggregate balance of
approximately $644.8 million of long-term mortgage indebtedness (excluding
borrowings under the Company's revolving credit facilities and other
indebtedness described above).
In connection with the acquisition of an office building in Fair Lawn, Bergen
County, New Jersey on March 3, 1995, the Company assumed an $18.8 million
non-recourse mortgage loan ("Fair Lawn Mortgage") bearing interest at a fixed
rate of 8.25 percent per annum. The loan currently requires payment of principal
and interest on a 20-year amortization schedule, with the remaining principal
balance due October 1, 2003. At December 31, 1997, the principal balance for the
Fair Lawn Mortgage was approximately $18.0 million.
In connection with the acquisition of Harborside, on November 4, 1996, the
Company assumed existing mortgage debt and was provided seller-financed mortgage
debt aggregating $150.0 million. The existing financing, with a principal
balance of approximately $104.8 million as of December 31, 1997, bears interest
at a fixed rate of 7.32 percent per annum for a term of approximately nine
years. The seller-provided financing, with a principal balance of approximately
$45.2 million as of December 31, 1997, also has a term of approximately nine
years and initially bears interest at a rate of 6.99 percent per annum. The
interest rate on the seller-provided financing will be reset at the end of the
third and sixth loan years based on the yield of the three-year treasury
obligation at that time, with spreads of 110 basis points in years four through
six and 130 basis points in years seven through maturity.
In connection with the RM Transaction on January 31, 1997, the Company assumed a
$185.3 million non-recourse mortgage loan with Teachers Insurance and Annuity
Association of America, with interest only payable monthly at a fixed annual
rate of 7.18 percent. The TIAA Mortgage is secured and cross-collateralized by
43 of the RM Properties and matures on December 31, 2003. The Company, at its
option, may convert the TIAA Mortgage to unsecured public
11
<PAGE>
debt upon achievement by the Company of an investment credit rating of Baa3/BBB-
or better. The TIAA Mortgage is prepayable in whole or in part subject to
certain provisions, including yield maintenance.
In connection with the Mack Transaction on December 11, 1997, the Company
assumed an aggregate of approximately $291.9 million of mortgage indebtedness
with eight separate lenders, encumbering 17 of the Mack Properties. Such debt
matures at various dates from March 1998 through January 2009. The Mack
Mortgages are comprised of an aggregate of approximately $199.9 million of fixed
rate debt bearing interest at a weighted average rate of approximately 7.66
percent per annum, certain of which require monthly principal amortization
payments, and an aggregate of approximately $91.9 million in variable rate debt
bearing interest at a weighted average floating rate of approximately 76 basis
points over LIBOR. At December 31, 1997, the aggregate principal balances for
the Mack Mortgages was approximately $291.5 million.
Interest Rate Contracts:
The Company has an interest rate swap agreement with a commercial bank. The swap
agreement fixes the Company's one-month LIBOR base to 6.285 percent per annum on
a notional amount of $24.0 million through August 1999.
The Company has another interest rate swap agreement with a commercial bank.
This swap agreement has a three-year term and a notional amount of $26.0
million, which fixes the Company's one-month LIBOR base to 5.265 percent per
annum through January 1999.
On November 20, 1997, the Company entered into a seven-year, interpolated U.S.
Treasury interest rate lock agreement with a commercial bank. The agreement
fixes the Company's base Treasury rate at 5.88 percent per annum on a notional
amount of $150.0 million.
The Company is exposed to credit loss in the event of non-performance by the
other parties to the interest rate contracts. However, the Company does not
anticipate non-performance by any of its counterparties.
First Quarter 1998 Financing Activity:
On February 26, 1998, the Company obtained a commitment from Prudential
Insurance Company of America for a $150.0 million secured loan. The seven-year,
secured loan will bear interest only at a fixed annual rate of 115 basis points
above the interpolated U.S. Treasury rate.
On March 10, 1998, the Company obtained a commitment from The Chase Manhattan
Bank and Fleet National Bank to expand the Unsecured Facility by $400.0 million,
from $400.0 million to $800.0 million. The Unsecured Facility will have a
three-year term and will bear interest at 110 basis points over LIBOR.
Equity Offerings and Shelf Registration Statements:
On October 15, 1997, the Company completed an underwritten public offer and sale
of 13,000,000 shares of its Common Stock using several different Underwriters to
underwrite such public offer and sale. The shares were issued from the Company's
$1.0 billion shelf registration statement (declared effective on January 7,
1997). The Company received approximately $489.1 million in net proceeds (after
offering costs) from the October 1997 offering, and used such funds to pay down
outstanding borrowings on its revolving credit facilities, to fund a portion of
the purchase price of the Mack Transaction and to invest in certain short-term
investments.
The Company filed a shelf registration statement with the SEC for an aggregate
amount of $2.0 billion in equity securities of the Company, which was declared
effective on January 29, 1998. The Company presently has not issued any
securities under this shelf registration.
On February 25, 1998, the Company completed an underwritten public offer and
sale of 2,500,000 shares of its common stock (the "1998 Offering") and used the
net proceeds of approximately $92.0 million (after offering costs) to pay down a
portion of its outstanding borrowings under the Unsecured Facility and to fund
the acquisition of Mountainview. The Company used a sole underwriter to
underwrite such offer and sale.
On March 18, 1998, the Company completed the sale of 2,705,628 shares of its
Common Stock pursuant to a Stock Purchase Agreement with The Prudential
Insurance Company of America, Strategic Value Investors, LLC and Strategic Value
Investors International, LLC (the "Equity Placement"). The Company received
approximately $100.0 million in proceeds and subsequently on March 27, 1998,
used such funds to finance a portion of the purchase price of the Prudential
Business Campus acquisition.
12
<PAGE>
On March 27, 1998, the Company completed an underwritten offer and sale of
650,407 shares of its Common Stock using a sole underwriter for such offer and
sale. The Company received approximately $23.7 million in net proceeds (after
offering costs) and used such funds to reduce outstanding borrowings under its
revolving credit facilities and for general corporate purposes.
ITEM 2. PROPERTIES
GENERAL
As of December 31, 1997, the Company owned 183 office, office/flex and
industrial/warehouse properties, ranging from one to 19 stories, as well as two
multi-family residential properties, two stand-alone retail properties and two
land leases. The Properties are located primarily in the Northeast and
Southwest. The Properties are easily accessible from major thoroughfares and are
in close proximity to numerous amenities. The Properties contain a total of
approximately 22.0 million square feet, with the individual Properties ranging
from approximately 6,600 to 761,200 square feet. The Properties, managed by
on-site employees, generally have attractively landscaped sites, atriums and
covered parking in addition to quality design and construction. The Company's
tenants include many service sector employers, including a large number of
professional firms and national and international businesses. The Company
believes that all of its Properties are well-maintained and do not require
significant capital improvements.
The following tables set forth certain information relating to each of the
Office Properties, the Office/Flex Properties, and the Industrial/Warehouse
Properties.
13
<PAGE>
<TABLE>
<CAPTION>
Percentage
of Total 1997
Office, 1997
Percentage Office/Flex, Average
Net Leased 1997 1997 and Industrial/ Base Rent
Rentable as of Base Effective Warehouse Per
Property Year Area 12/31/97 Rent Rent Base Rent Sq. Ft.
Location Built (Sq. Ft.) (%) (1) ($000) (2) ($000) (3) (%) ($) (4)
-------- ----- --------- ------- ---------- ---------- --------------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
The Office Properties:
ATLANTIC COUNTY, NEW JERSEY
Egg Harbor
100 Decadon Drive 1987 40,422 100.0 772 772 0.38 19.10
200 Decadon Drive 1991 39,922 67.4 528 505 0.26 19.62
BERGEN COUNTY, NEW JERSEY
Fair Lawn
17-17 Route 208 North 1987 143,000 100.0 3,424 3,391 1.71 23.94
Fort Lee
One Bridge Plaza 1981 200,000 98.7 4,163 4,124 2.07 21.09
Little Ferry
200 Riser Road (7) 1974 286,628 100.0 110 110 0.05 6.67
Montvale
95 Chestnut Ridge Road (7) 1975 47,700 100.0 32 32 0.02 11.66
135 Chestnut Ridge Road (7) 1981 66,150 100.0 69 69 0.03 18.13
Paramus
140 Ridgewood Avenue (7) 1981 239,680 99.0 296 295 0.15 21.68
15 East Midland Avenue (7) 1988 259,823 100.0 375 375 0.19 25.09
461 From Road (7) 1988 253,554 99.8 334 334 0.17 22.94
650 From Road (7) 1978 348,510 100.0 428 428 0.21 21.35
61 South Paramus Avenue (7) 1985 269,191 96.2 322 322 0.16 21.61
Rochelle Park
120 Passaic Street (7) 1972 52,000 100.0 32 32 0.02 10.70
365 West Passaic Street (7) 1976 212,578 81.2 192 191 0.10 19.33
Saddle River
1 Lake Street (7) 1973/94 474,801 100.0 421 421 0.21 15.41
Woodcliff Lake
400 Chestnut Ridge Road (7) 1982 89,200 100.0 120 120 0.06 23.38
470 Chestnut Ridge Road (7) 1987 52,500 100.0 67 67 0.03 22.18
530 Chestnut Ridge Road (7) 1986 57,204 100.0 66 66 0.03 20.05
50 Tice Boulevard 1984 235,000 99.1 4,676 4,011 2.33 20.09
300 Tice Boulevard 1991 230,000 100.0 4,723 4,711 2.35 20.53
BURLINGTON COUNTY, NEW JERSEY
Moorestown
224 Strawbridge Drive (7) 1984 74,000 49.2 -- -- -- --
228 Strawbridge Drive (7) 1984 74,000 -- -- -- -- --
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
1997 Tenants Leasing
Average 10% or More
Effective of Net
Rent Per Rentable Area
Property Sq. Ft. Per Property
Location ($) (5) as of 12/31/97 (6)
-------- ------- ------------------
<S> <C> <C>
The Office Properties:
ATLANTIC COUNTY, NEW JERSEY
Egg Harbor
100 Decadon Drive 19.10 Computer Sciences Corp. (80%), United States of America (20%)
200 Decadon Drive 18.77 Advanced Casino Systems Corp. (24%), Computer Sciences Corp. (17%),
Dimensions International Inc. (15%)
BERGEN COUNTY, NEW JERSEY
Fair Lawn
17-17 Route 208 North 23.71 Lonza, Inc. (63%), Federal Insurance Company/Chubb (16%), Boron-Lepore
Assoc., Inc. (10%)
Fort Lee
One Bridge Plaza 20.89 Broadview Associates LLP (16%), Bozell Worldwide, Inc. (14%), Coopers &
Lybrand L.L.P. (13%)
Little Ferry
200 Riser Road (7) 6.67 Ford Motor Company (34%), Sanyo Fischer Service Corp. (33%), Dassault
Falcon Jet Corp. (33%)
Montvale
95 Chestnut Ridge Road (7) 11.66 Roussel-UCLAF Holding Corp (100%)
135 Chestnut Ridge Road (7) 18.13 Alliance Funding Company (100%)
Paramus
140 Ridgewood Avenue (7) 21.61 AT&T Wireless Services, Inc. (46%), Smith Barney Shearson (19%)
15 East Midland Avenue (7) 25.09 AT&T Wireless Services, Inc. (98%)
461 From Road (7) 22.94 Toys 'R' Us, Inc. (92%)
650 From Road (7) 21.35 Western Union Financial Services, Inc. (38%), Long Beach Acceptance
Corp. (10%)
61 South Paramus Avenue (7) 21.61 Dun & Bradstreet Software Services, Inc. (10%)
Rochelle Park
120 Passaic Street (7) 10.70 Electronic Data Systems Corp. (100%)
365 West Passaic Street (7) 19.23 Sizes Unlimited Inc. (26%), Catalina Marketing Corp. (10%), Financial
Telesis Inc. (10%)
Saddle River
1 Lake Street (7) 15.41 Prentice-Hall Inc. (100%)
Woodcliff Lake
400 Chestnut Ridge Road (7) 23.38 Timeplex, Inc. (100%)
470 Chestnut Ridge Road (7) 22.18 Andermatt LP (100%)
530 Chestnut Ridge Road (7) 20.05 KPMG Peat Marwick, LLP (100%)
50 Tice Boulevard 17.22 Syncsort, Inc (22%)
300 Tice Boulevard 20.48 Merck-Medco Managed Care LLC (20%), Xerox Corp. (14%), Chase Home
Mortgage Corp. (12%), Comdisco, Inc. (11%), NYCE, Corp. (11%)
BURLINGTON COUNTY, NEW JERSEY
Moorestown
224 Strawbridge Drive (7) -- Allstate Insurance Co. (49%)
228 Strawbridge Drive (7) --
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Percentage
of Total 1997
Office, 1997
Percentage Office/Flex, Average
Net Leased 1997 1997 and Industrial/ Base Rent
Rentable as of Base Effective Warehouse Per
Property Year Area 12/31/97 Rent Rent Base Rent Sq. Ft.
Location Built (Sq. Ft.) (%) (1) ($000) (2) ($000) (3) (%) ($) (4)
-------- ----- --------- ------- ---------- ---------- --------------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
ESSEX COUNTY, NEW JERSEY
Millburn
150 J.F. Kennedy Parkway (7) 1980 247,476 100.0 369 369 0.18 25.92
Roseland
101 Eisenhower Parkway 1980 237,000 94.2 3,614 3,343 1.80 16.19
103 Eisenhower Parkway 1985 151,545 100.0 3,223 2,974 1.61 21.27
HUDSON COUNTY, NEW JERSEY
Jersey City
95 Christopher Columbus Drive 1989 621,900 100.0 12,788 11,594 6.37 20.56
Harborside Financial Center Plaza I 1983 400,000 98.7 8,022 8,022 4.00 20.32
Harborside Financial Center Plaza II 1990 761,200 99.4 15,265 15,133 7.60 20.17
Harborside Financial Center Plaza III 1990 725,600 97.0 14,554 14,554 7.25 20.68
MERCER COUNTY, NEW JERSEY
Princeton
5 Vaughn Drive 1987 98,500 97.3 2,102 2,072 1.05 21.93
400 Alexander Road 1987 70,550 100.0 1,253 1,054 0.62 17.76
103 Carnegie Center 1984 96,000 99.1 1,758 1,705 0.88 18.48
100 Overlook Center (7) 1988 149,600 97.9 143 143 0.07 27.41
MIDDLESEX COUNTY, NEW JERSEY
East Brunswick
377 Summerhill Road (7) 1977 40,000 100.0 21 21 0.01 9.13
South Brunswick
3 Independence Way (7) 1983 111,300 100.0 672 672 0.33 18.36
Woodbridge
581 Main Street (7) 1991 200,000 61.2 191 190 0.10 27.12
MONMOUTH COUNTY, NEW JERSEY
Neptune
3600 Route 66 1989 180,000 100.0 2,412 2,412 1.20 13.40
Wall Township
1305 Campus Parkway 1988 23,350 92.4 402 381 0.20 18.65
1350 Campus Parkway 1990 79,747 91.7 1,106 1,068 0.55 15.14
MORRIS COUNTY, NEW JERSEY
Florham Park
325 Columbia Parkway 1987 168,144 100.0 3,528 3,081 1.76 20.98
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
1997 Tenants Leasing
Average 10% or More
Effective of Net
Rent Per Rentable Area
Property Sq. Ft. Per Property
Location ($) (5) as of 12/31/97 (6)
-------- ------- ------------------
<S> <C> <C>
ESSEX COUNTY, NEW JERSEY
Millburn
150 J.F. Kennedy Parkway (7) 25.92 KPMG Peat Marwick, LLP (42%), Budd Larner Gross (23%), Coldwell
Banker Residential Real Estate (13%)
Roseland
101 Eisenhower Parkway 14.97 Arthur Andersen, LLP (32%), Brach, Eichler, Rosenberg, Silver, Bernstein &
Hammer (13%)
103 Eisenhower Parkway 19.62 Ravin, Sarasohn, Cook, Baumgarten (18%), Lum, Danzis, Drasco (15%),
Chelsea GCA Realty (15%)
HUDSON COUNTY, NEW JERSEY
Jersey City
95 Christopher Columbus Drive 18.64 Donaldson, Lufkin & Jenrette Securities Corp. (66%), NTT Data Corp. (22%)
Harborside Financial Center Plaza I 20.32 Bankers Trust Harborside, Inc. (96%)
Harborside Financial Center Plaza II 20.00 Dow Jones Telerate Systems, Inc. (44%), Dean Witter Trust Company (24%),
BTM Information Services (13%), Lewco Sercurities (11%)
Harborside Financial Center Plaza III 20.68 AICPA (34%), Bank of Tokyo Information Services, Inc. (21%)
MERCER COUNTY, NEW JERSEY
Princeton
5 Vaughn Drive 21.62 U.S. Trust of NJ (19%), Woodrow Wilson National Fellowship Foundation
(14%), Princeton Venture Research Corp. (14%), Villeroy & Boch Tableware
Ltd. (11%)
400 Alexander Road 14.94 Berlitz International Inc. (100%)
103 Carnegie Center 17.92 Ronin Development Corp. (15%)
100 Overlook Center (7) 27.41 Squibb-Novo Inc. (24%), Xerox Corp. (24%), Hydrocarbon Research, Inc.
(14%), Hannoch Weisman (10%)
MIDDLESEX COUNTY, NEW JERSEY
East Brunswick
377 Summerhill Road (7) 9.13 Greater New York Mutual Insurance Company (100%)
South Brunswick
3 Independence Way (7) 18.36 Merrill Lynch Pierce Fenner & Smith (72%)
Woodbridge
581 Main Street (7) 26.98 First Investors Management Company, Inc. (41%)
MONMOUTH COUNTY, NEW JERSEY
Neptune
3600 Route 66 13.40 The United States Life Insurance Company (100%)
Wall Township
1305 Campus Parkway 17.68 McLaughlin, Bennet, Gelson (35%), Centennial Cellular Corp. (35%), NJ
Natural Energy Co. (10%)
1350 Campus Parkway 14.62 Meridan Health Realty Corp. (22%), New Jersey National Bank (17%),
Stephen E. Gertler (17%), Hospital Computer Systems Inc. (11%)
MORRIS COUNTY, NEW JERSEY
Florham Park
325 Columbia Parkway 18.32 Bressler Amery & Ross (24%), General Motors Acceptance Corp.
(14%), Dun & Bradstreet Inc. (12%)
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Percentage
of Total 1997
Office, 1997
Percentage Office/Flex, Average
Net Leased 1997 1997 and Industrial/ Base Rent
Rentable as of Base Effective Warehouse Per
Property Year Area 12/31/97 Rent Rent Base Rent Sq. Ft.
Location Built (Sq. Ft.) (%) (1) ($000) (2) ($000) (3) (%) ($) (4)
-------- ----- --------- ------- ---------- ---------- --------------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Parsippany
600 Parsippany Road 1978 96,000 100.0 1,476 1,440 0.74 15.38
Morris Plains
201 Littleton Road (7) 1979 88,369 100.0 95 95 0.05 18.69
250 Johnston Road (7) 1977 75,000 100.0 64 64 0.03 14.83
Morris Township
340 Mt. Kemble Avenue (7) 1985 387,000 100.0 312 312 0.16 14.01
412 Mt. Kemble Avenue (7) 1986 475,100 100.0 390 390 0.19 14.27
PASSAIC COUNTY, NEW JERSEY
Clifton
777 Passaic Avenue 1983 75,000 69.7 935 814 0.47 17.89
Totowa
999 Riverview Drive 1988 56,066 91.9 923 908 0.46 17.91
Wayne
201 Willowbrook Boulevard (7) 1970 178,329 99.0 141 140 0.07 13.88
SOMERSET COUNTY, NEW JERSEY
Basking Ridge
222 Mt. Airy Road 1986 49,000 100.0 434 434 0.22 8.86
233 Mt. Airy Road 1987 66,000 100.0 762 740 0.38 11.55
Bridgewater
721 Route 202/206 (7) 1989 192,741 100.0 220 220 0.11 19.84
UNION COUNTY, NEW JERSEY
Clark
100 Walnut Avenue 1985 182,555 87.6 3,688 3,214 1.84 23.07
Cranford
6 Commerce Drive 1973 56,000 100.0 948 850 0.47 16.93
11 Commerce Drive (6) 1981 90,000 82.2 1,063 947 0.53 14.39
12 Commerce Drive (7) 1967 72,260 88.1 34 34 0.02 9.28
20 Commerce Drive 1990 176,600 81.0 3,077 2,641 1.53 21.51
65 Jackson Drive 1984 82,778 100.0 1,460 1,101 0.73 17.64
New Providence
890 Mountain Road (7) 1977 80,000 100.0 92 92 0.05 19.99
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
1997 Tenants Leasing
Average 10% or More
Effective of Net
Rent Per Rentable Area
Property Sq. Ft. Per Property
Location ($) (5) as of 12/31/97 (6)
-------- ------- ------------------
<S> <C> <C>
Parsippany
600 Parsippany Road 15.00 Metropolitan Life Insurance Co. (36%), IBM Corporation (30%)
Morris Plains
201 Littleton Road (7) 18.69 Poppe Tyson, Inc. (34%), Xerox Corp. (29%), Willis Corroon Corp. of New
Jersey (20%), CHEP USA (11%)
250 Johnston Road (7) 14.83 Electronic Data Systems Corp. (100%)
Morris Township
340 Mt. Kemble Avenue (7) 14.01 AT&T Corp. (100%)
412 Mt. Kemble Avenue (7) 14.27 AT&T Corp. (100%)
PASSAIC COUNTY, NEW JERSEY
Clifton
777 Passaic Avenue 15.57 Motorola Inc. (19%)
Totowa
999 Riverview Drive 17.62 Bank of New York (47%), Commonwealth Land Title Insurance Co. (11%),
Bankers Mortgage Company (10%)
Wayne
201 Willowbrook Boulevard (7) 13.78 The Grand Union Co. (76%), Woodward-Clyde Consultants (23%)
SOMERSET COUNTY, NEW JERSEY
Basking Ridge
222 Mt. Airy Road 8.86 Lucent Technologies Inc. (100%)
233 Mt. Airy Road 11.21 AT&T Corp. (100%)
Bridgewater
721 Route 202/206 (7) 19.84 Allstate Insurance Company (37%), Norris, McLaugin & Marcus, PA (31%),
AT&T Corp. (20%)
UNION COUNTY, NEW JERSEY
Clark
100 Walnut Avenue 20.10 BDSI, Inc. (34%), Allstate Insurance Company (13%), The Equitable Life
Assurance Society of the United States (10%)
Cranford
6 Commerce Drive 15.18 Excel Scientific Protocols, Inc. (32%), Public Service Electric & Gas Co. (18%),
Columbia National, Inc. (13%)
11 Commerce Drive (6) 12.82 Northeast Administrators (10%)
12 Commerce Drive (7) 9.28 Dames & Moore (42%), Registrar & Transfer Co. (23%), Body Connections,
Inc. (20%)
20 Commerce Drive 18.46 Public Service Electric & Gas Co. (26%)
65 Jackson Drive 13.30 Kraft General Foods, Inc. (35%), Allstate Insurance Co. (27%), Procter &
Gamble Distribution Co., Inc. (18%), Unum Life Insurance Co. (14%)
New Providence
890 Mountain Road (7) 19.99 Allstate Insurance Co. (59%), Dun & Bradstreet (25%), K Line America, Inc.
(16%)
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
Percentage
of Total 1997
Office, 1997
Percentage Office/Flex, Average
Net Leased 1997 1997 and Industrial/ Base Rent
Rentable as of Base Effective Warehouse Per
Property Year Area 12/31/97 Rent Rent Base Rent Sq. Ft.
Location Built (Sq. Ft.) (%) (1) ($000) (2) ($000) (3) (%) ($) (4)
-------- ----- --------- ------- ---------- ---------- --------------- -------
DUTCHESS COUNTY, NEW YORK
Fishkill
<S> <C> <C> <C> <C> <C> <C> <C>
300 South Lake Drive (7) 1987 118,727 98.7 114 114 0.06 16.91
NASSAU COUNTY, NEW YORK
North Hempstead
111 East Shore Road (7) 1980 55,575 100.0 86 86 0.04 26.90
600 Community Drive (7) 1983 206,274 100.0 280 280 0.14 23.59
ROCKLAND COUNTY, NEW YORK
Suffern
400 Rella Boulevard 1988 180,000 98.3 3,214 3,169 1.60 18.16
WESTCHESTER COUNTY, NEW YORK
Elmsford
100 Clearbrook Road (6) (7) 1975 60,000 65.2 698 698 0.35 19.44
101 Executive Boulevard (7) 1971 50,000 79.0 834 828 0.42 23.00
570 Taxter Road (7) 1972 75,000 97.6 1,277 1,271 0.64 19.01
Hawthorne
1 Skyline Drive (7) 1980 20,400 99.0 164 164 0.08 8.85
2 Skyline Drive (7) 1987 30,000 85.9 440 440 0.22 18.60
17 Skyline Drive (7) 1989 85,000 100.0 1,260 1,260 0.63 16.15
30 Saw Mill River Road (7) 1982 248,400 100.0 4,100 4,100 2.04 17.98
Tarrytown
200 White Plains Road (7) 1982 89,000 98.5 1,552 1,483 0.77 19.29
220 White Plains Road (7) 1984 89,000 93.2 1,626 1,611 0.81 21.36
White Plains
1 Barker Avenue (7) 1975 68,000 93.3 1,371 1,367 0.68 23.54
3 Barker Avenue (7) 1983 65,300 100.0 1,165 1,156 0.58 19.44
1 Water Street (7) 1979 45,700 99.8 871 870 0.43 20.81
11 Martine Avenue (7) 1987 180,000 94.4 3,793 3,753 1.89 24.32
50 Main Street (7) 1985 309,000 94.5 6,407 6,387 3.19 23.91
Yonkers
1 Executive Boulevard (7) 1982 112,000 100.0 1,780 1,767 0.89 17.32
3 Executive Plaza (7) 1987 58,000 100.0 1,131 1,131 0.56 21.25
CHESTER COUNTY, PENNSYLVANIA
Berwyn
1000 Westlakes Drive (7) 1989 60,696 98.3 866 866 0.43 22.26
1055 Westlakes Drive (7) 1990 118,487 100.0 1,513 1,513 0.75 19.58
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
1997 Tenants Leasing
Average 10% or More
Effective of Net
Rent Per Rentable Area
Property Sq. Ft. Per Property
Location ($) (5) as of 12/31/97 (6)
-------- ------- ------------------
DUTCHESS COUNTY, NEW YORK
Fishkill
<S> <C> <C>
300 South Lake Drive (7) 16.91 Allstate Insurance Company (16%)
NASSAU COUNTY, NEW YORK
North Hempstead
111 East Shore Road (7) 26.90 Adminstrations For The Professions, Inc. (100%)
600 Community Drive (7) 23.59 CMP Media, Inc. (100%)
ROCKLAND COUNTY, NEW YORK
Suffern
400 Rella Boulevard 17.91 The Prudential Insurance Co. (21%), Provident Savings F.A. (20%), Allstate
Insurance Co. (16%), John Alden Life Insurance Co. (11%)
WESTCHESTER COUNTY, NEW YORK
Elmsford
100 Clearbrook Road (6) (7) 19.44
101 Executive Boulevard (7) 22.84 Pennysaver Group Inc. (23%), MCS Business Solutions Inc. (11%)
570 Taxter Road (7) 18.92 Connecticut General Life (16%), New York State United Teachers
Association (10%)
Hawthorne
1 Skyline Drive (7) 8.85 Boxx International Corp. (50%), Childtime Childcare Inc. (49%)
2 Skyline Drive (7) 18.60 Perini Construction (45%), MW Samara (41%)
17 Skyline Drive (7) 16.15 IBM Corp. (100%)
30 Saw Mill River Road (7) 17.98 IBM Corp. (100%)
Tarrytown
200 White Plains Road (7) 18.43 Independent Health Associates (28%), Allmerica Financial (17%), NYS Dept.
of Environmental Services (13%)
220 White Plains Road (7) 21.16 Stellare Management Corp. (11%)
White Plains
1 Barker Avenue (7) 23.48 O'Connor McGuinn Conte (19%), United Skys Realty Corp. (18%)
3 Barker Avenue (7) 19.29 Bernard C. Harris Publishing Co. Inc. (56%)
1 Water Street (7) 20.76 Trigen Energy Co. (37%), Stewart Title Insurance Co. (16%)
11 Martine Avenue (7) 24.06 McCarthy Fingar Donovan (11%), David Worby (11%)
50 Main Street (7) 23.83 National Economic Research (10%)
Yonkers
1 Executive Boulevard (7) 17.19 Wise Contact US Optical (12%), Protective Tech International (11%), York
International Agency (11%)
3 Executive Plaza (7) 21.25 GMAC/MIC (48%), Metropolitan Life Insurance (29%), City & Suburban
Federal Savings Bank (15%)
CHESTER COUNTY, PENNSYLVANIA
Berwyn
1000 Westlakes Drive (7) 22.26 PNC Bank, NA (38%), Drinker Biddle & Reath (24%), Manchester, Inc.
(14%)
1055 Westlakes Drive (7) 19.58 Tokai Financial Services Inc. (92%)
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
Percentage
of Total 1997
Office, 1997
Percentage Office/Flex, Average
Net Leased 1997 1997 and Industrial/ Base Rent
Rentable as of Base Effective Warehouse Per
Property Year Area 12/31/97 Rent Rent Base Rent Sq. Ft.
Location Built (Sq. Ft.) (%) (1) ($000) (2) ($000) (3) (%) ($) (4)
-------- ----- --------- ------- ---------- ---------- --------------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1205 Westlakes Drive (7) 1988 130,265 99.1 1,748 1,748 0.87 20.77
1235 Westlakes Drive (7) 1986 134,902 99.8 1,787 1,786 0.89 20.36
DELAWARE COUNTY, PENNSYLVANIA
Media
1400 Providence Road - Center I 1986 100,000 98.3 1,865 1,840 0.93 18.99
1400 Providence Road - Center II 1990 160,000 97.9 3,010 2,996 1.50 19.22
Lester
100 Stevens Drive 1986 95,000 99.7 2,074 2,074 1.03 21.90
200 Stevens Drive 1987 208,000 99.8 3,940 3,940 1.96 18.98
300 Stevens Drive 1992 68,000 100.0 1,416 1,416 0.71 20.82
MONTGOMERY COUNTY, PENNSYLVANIA
Lower Providence
1000 Madison Avenue (7) 1990 100,700 96.5 181 181 0.09 15.18
Plymouth Meeting
Five Sentry Parkway East 1984 91,600 100.0 1,427 1,427 0.71 15.58
Five Sentry Parkway West 1984 38,400 100.0 638 638 0.32 16.61
1150 Plymouth Meeting Mall (7) 1970 167,748 91.8 103 103 0.05 11.63
FAIRFIELD COUNTY, CONNECTICUT
Shelton
1000 Bridgeport Avenue (7) 1986 133,000 85.3 983 983 0.49 20.67
BEXAR COUNTY, TEXAS
San Antonio
111 Soledad (7) 1918 248,153 92.0 83 83 0.04 6.32
1777 N.E. Loop 410 (7) 1986 256,137 95.4 188 188 0.09 13.38
84 N.E. Loop 410 (7) 1971 187,312 91.4 141 141 0.07 14.32
200 Concord Plaza Drive (7) 1986 248,700 97.2 159 159 0.08 18.47
COLLIN COUNTY, TEXAS
Plano
555 Republic Place (7) 1986 97,889 100.0 65 65 0.03 11.54
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
1997 Tenants Leasing
Average 10% or More
Effective of Net
Rent Per Rentable Area
Property Sq. Ft. Per Property
Location ($) (5) as of 12/31/97 (6)
-------- ------- ------------------
<S> <C> <C>
1205 Westlakes Drive (7) 20.77 Provident Mutual Life Insurance Co. (35%), Oracle Corp. (30%)
1235 Westlakes Drive (7) 20.34 Pepper Hamilton & Scheetz (18%), Ratner & Prestia (14%), Turner
Investment Partners (10%)
DELAWARE COUNTY, PENNSYLVANIA
Media
1400 Providence Road - Center I 18.74 Erie Insurance Company (11%)
1400 Providence Road - Center II 19.13 Barnett International (36%)
Lester
100 Stevens Drive 21.90 SAP America, Inc. (82%)
200 Stevens Drive 18.98 PNC Bank NA (52%), Keystone Mercy Health Plan (35%)
300 Stevens Drive 20.82 SAP America, Inc. (50%), McLaren Hart Environmental Engineering Corp.
(33%), Keystone Mercy Health Plan (14%)
MONTGOMERY COUNTY, PENNSYLVANIA
Lower Providence
1000 Madison Avenue (7) 15.18 Reality Online Inc. (37%), First Chicago Nat'l Proc. (21%), Danka Corp.
(14%), Seton Company (12%)
Plymouth Meeting
Five Sentry Parkway East 15.58 Merck & Co. Inc. (73%), Selas Fuild Processing Corp. (23%)
Five Sentry Parkway West 16.61 Merck & Co. Inc. (70%), David Cutler Group (30%)
1150 Plymouth Meeting Mall (7) 11.63 Computer Learning Centers, Inc. (18%), Ken Crest Services (16%), ATC
Group Services (14%)
FAIRFIELD COUNTY, CONNECTICUT
Shelton
1000 Bridgeport Avenue (7) 20.67 Weseley Software Development (22%), William Carter Company (20%),
Toyota Motor Credit (11%), Land Star System, Inc. (11%)
BEXAR COUNTY, TEXAS
San Antonio
111 Soledad (7) 6.32 SBC Communications, Inc. (34%)
1777 N.E. Loop 410 (7) 13.38
84 N.E. Loop 410 (7) 14.32 Pacificare of Texas, Inc. (29%), KBL Cable, Inc. (26%), Kraft General Foods
Inc. (25%)
200 Concord Plaza Drive (7) 18.47 Colorado Sports Club Venture(22%), Merrill Lynch Pierce Fenner & Smith
(12%)
COLLIN COUNTY, TEXAS
Plano
555 Republic Place (7) 11.54 William Smith Enterprises (22%), Kaiser Foundation Health Plan of Texas
(17%), Dayton Hudson Corporation (14%)
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Percentage
of Total 1997
Office, 1997
Percentage Office/Flex, Average
Net Leased 1997 1997 and Industrial/ Base Rent
Rentable as of Base Effective Warehouse Per
Property Year Area 12/31/97 Rent Rent Base Rent Sq. Ft.
Location Built (Sq. Ft.) (%) (1) ($000) (2) ($000) (3) (%) ($) (4)
-------- ----- --------- ------- ---------- ---------- --------------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
DALLAS COUNTY, TEXAS
Dallas
3030 LBJ Freeway (6) (7) 1984 367,018 95.5 316 316 0.16 15.67
3100 Monticello (7) 1984 173,837 90.7 131 131 0.07 14.44
8214 Westchester (7) 1983 95,509 99.1 78 78 0.04 14.32
Irving
2300 Valley View (7) 1985 142,634 99.3 123 123 0.06 15.09
Richardson
1122 Alma Road (7) 1977 82,576 100.0 34 34 0.02 7.16
HARRIS COUNTY, TEXAS
Houston
10497 Town & Country Way (7) 1981 148,434 98.6 103 103 0.05 12.24
14511 Falling Creek (7) 1982 70,999 90.1 34 34 0.02 9.24
1717 St. James Place (7) 1975 109,574 92.8 67 67 0.03 11.45
1770 St. James Place (7) 1973 103,689 96.6 69 69 0.03 11.97
5225 Katy Freeway (7) 1983 112,213 90.9 60 60 0.03 10.22
5300 Memorial (7) 1982 155,099 96.8 107 107 0.05 12.39
POTTER COUNTY, TEXAS
Amarillo
6900 IH - 40 West (7) 1986 71,771 80.5 30 30 0.01 9.03
TARRANT COUNTY, TEXAS
Euless
150 West Parkway (7) 1984 74,429 90.2 73 73 0.04 18.90
MARICOPA COUNTY, ARIZONA
Glendale
5551 West Talavi Boulevard (7) 1991 130,000 100.0 67 67 0.03 8.96
Phoenix
19640 North 31st Street (7) 1990 124,171 100.0 81 81 0.04 11.34
20002 North 19th Avenue (7) 1986 119,301 100.0 40 40 0.02 5.83
Scottsdale
9060 E. Via Linda Boulevard (7) 1984 111,200 100.0 81 81 0.04 12.66
SAN FRANCISCO COUNTY, CALIFORNIA
San Francisco
760 Market Street (7) 1908 267,446 83.1 190 190 0.09 14.86
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
1997 Tenants Leasing
Average 10% or More
Effective of Net
Rent Per Rentable Area
Property Sq. Ft. Per Property
Location ($) (5) as of 12/31/97 (6)
-------- ------- ------------------
<S> <C> <C>
DALLAS COUNTY, TEXAS
Dallas
3030 LBJ Freeway (6) (7) 15.67 Club Corporation of America (32%)
3100 Monticello (7) 14.44 Insignia Commercial, Inc. (23%), Time Marketing Corporation (12%), Heath
Insurance Brokers, Inc. (10%)
8214 Westchester (7) 14.32 Preston Business Center, Inc. (15%), Malone Mortgage Company America,
Inc. (11%), State Bank & Trust (11%)
Irving
2300 Valley View (7) 15.09 Nokia, Inc. (52%), Alltel Information Services, Inc. (12%), Computer Task
Group, Inc. (12%)
Richardson
1122 Alma Road (7) 7.16 MCI Telecommunications Corp. (100%)
HARRIS COUNTY, TEXAS
Houston
10497 Town & Country Way (7) 12.24 Vastar Resources, Inc. (23%), Texas Ohio Gas, Inc. (11%)
14511 Falling Creek (7) 9.24 Nationwide Mutual Insurance Company (12%)
1717 St. James Place (7) 11.45 MCX Corp (14%), Home Loan Corporation (10%)
1770 St. James Place (7) 11.97 Gateway Homes, Inc. (10%)
5225 Katy Freeway (7) 10.22
5300 Memorial (7) 12.39 Drypers Corporation (20%), Datavox, Inc. (17%), HCI Chemicals USA, Inc.
(14%)
POTTER COUNTY, TEXAS
Amarillo
6900 IH - 40 West (7) 9.03 Sitel Corporation (16%)
TARRANT COUNTY, TEXAS
Euless
150 West Parkway (7) 18.90 Warrantech Automotive, Inc. (40%), Mike Bowman Realtors/Century 21
(17%), Landmark Bank-Mid Cities (16%)
MARICOPA COUNTY, ARIZONA
Glendale
5551 West Talavi Boulevard (7) 8.96 Honeywell, Inc. (100%)
Phoenix
19640 North 31st Street (7) 11.34 American Express Travel Related Services Co., Inc. (100%)
20002 North 19th Avenue (7) 5.83 American Express Travel Related Services Co., Inc. (100%)
Scottsdale
9060 E. Via Linda Boulevard (7) 12.66 Sentry Insurance A Mutual Company (100%)
SAN FRANCISCO COUNTY, CALIFORNIA
San Francisco
760 Market Street (7) 14.86 R.H. Macy & Company, Inc. (26%), Comp USA, Inc. (12%)
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Percentage
of Total 1997
Office, 1997
Percentage Office/Flex, Average
Net Leased 1997 1997 and Industrial/ Base Rent
Rentable as of Base Effective Warehouse Per
Property Year Area 12/31/97 Rent Rent Base Rent Sq. Ft.
Location Built (Sq. Ft.) (%) (1) ($000) (2) ($000) (3) (%) ($) (4)
-------- ----- --------- ------- ---------- ---------- --------------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
HILLSBOROUGH COUNTY, FLORIDA
Tampa
501 Kennedy Boulevard (7) 1982 297,429 91.1 206 206 0.10 13.22
POLK COUNTY, IOWA
West Des Moines
2600 Westown Parkway (7) 1988 72,265 95.3 59 59 0.03 14.89
DOUGLAS COUNTY, NEBRASKA
Omaha
210 South 16th Street (7) 1894 319,535 89.9 178 178 0.09 10.77
- -----------------------------------------------------------------------------------------------------------------------------------
Total Office Properties 18,526,067 95.6 $165,164 $159,809 82.26 $17.72
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
1997 Tenants Leasing
Average 10% or More
Effective of Net
Rent Per Rentable Area
Property Sq. Ft. Per Property
Location ($) (5) as of 12/31/97 (6)
-------- ------- ------------------
<S> <C> <C>
HILLSBOROUGH COUNTY, FLORIDA
Tampa
501 Kennedy Boulevard (7) 13.22 Fowler, White, Gillen, Boggs, Villareal & Banker, PA (32%), Raytheon
Engineers & Constructors, Inc. (31%)
POLK COUNTY, IOWA
West Des Moines
2600 Westown Parkway (7) 14.89 St. Paul Fire and Marine Insurance Company (19%), MCI
Telecommunications Corp. (14%), New England Mutual Life Insurance
Company (13%), American Express Financial Advisors, Inc. (10%)
DOUGLAS COUNTY, NEBRASKA
Omaha
210 South 16th Street (7) 10.77 Union Pacific Railroad Company (70%)
- ---------------------------------------------------------------------------------------------------------------------------
Total Office Properties $17.41
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
Percentage
of Total 1997
Office, 1997
Percentage Office/Flex, Average
Net Leased 1997 1997 and Industrial/ Base Rent
Rentable as of Base Effective Warehouse Per
Property Year Area 12/31/97 Rent Rent Base Rent Sq. Ft.
Location Built (Sq. Ft.) (%) (1) ($000) (2) ($000) (3) (%) ($) (4)
-------- ----- --------- ------- ---------- ---------- --------------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
The Office/Flex Properties:
MERCER COUNTY, NEW JERSEY
Hamilton Township
100 Horizon Drive 1989 13,275 100.0 226 226 0.11 17.02
200 Horizon Drive 1991 45,770 85.3 445 445 0.22 11.40
300 Horizon Drive 1989 69,780 100.0 912 901 0.45 13.07
500 Horizon Drive 1990 41,205 100.0 452 424 0.23 10.97
MONMOUTH COUNTY, NEW JERSEY
Wall Township
1320 Wykoff Avenue 1986 20,336 100.0 194 194 0.10 9.54
1324 Wykoff Avenue 1987 21,168 75.0 200 199 0.10 12.60
1325 Campus Parkway 1988 35,000 99.3 416 406 0.21 11.97
1340 Campus Parkway 1992 72,502 94.6 595 589 0.30 8.68
1345 Campus Parkway (7) 1995 76,300 100.0 648 648 0.32 9.20
1433 Highway 34 1985 69,020 78.8 563 510 0.28 10.35
PASSAIC COUNTY, NEW JERSEY
Totowa
11 Commerce Way 1989 47,025 100.0 437 432 0.22 9.29
20 Commerce Way 1992 42,540 85.9 447 447 0.22 12.23
29 Commerce Way 1990 48,930 100.0 465 420 0.23 9.50
40 Commerce Way 1987 50,576 100.0 443 414 0.22 8.76
45 Commerce Way 1992 51,207 100.0 482 456 0.24 9.41
60 Commerce Way 1988 50,333 100.0 382 338 0.19 7.59
80 Commerce Way 1996 22,500 88.7 211 138 0.11 10.57
100 Commerce Way 1996 24,600 100.0 68 31 0.03 2.76
120 Commerce Way 1994 9,024 100.0 128 128 0.06 14.18
140 Commerce Way 1994 26,881 99.5 209 207 0.11 7.81
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
1997 Tenants Leasing
Average 10% or More
Effective of Net
Rent Per Rentable Area
Property Sq. Ft. Per Property
Location ($) (5) as of 12/31/97 (6)
-------- ------- ------------------
<S> <C> <C>
The Office/Flex Properties:
MERCER COUNTY, NEW JERSEY
Hamilton Township
100 Horizon Drive 17.02 HIP of New Jersey Inc. (100%)
200 Horizon Drive 11.40 O.H.M. Remediation Services Corp. (85%)
300 Horizon Drive 12.91 State of NJ/DEP (50%), McFaul & Lyons (26%), Fluor Daniel GTI
(24%)
500 Horizon Drive 10.29 First Financial (30%), Lakeview Child Center, Inc. (19%), MCI Systems
House Corp. (18%), NJ Builders Assoc. (14%), Diedre Moire Corp. (11%)
MONMOUTH COUNTY, NEW JERSEY
Wall Township
1320 Wykoff Avenue 9.54 Eastern Automation (71%), Lucent Technologies (29%)
1324 Wykoff Avenue 12.53 Collectors Alliance (53%), Supply Saver, Inc. (22%)
1325 Campus Parkway 11.68 American Press Inc. (71%)
1340 Campus Parkway 8.59 Groundwater & Environmental Services (33%), GEAC Comp (22%), State
Farm (17%), Association For Retarded Citizens (11%), Digital Lightwave,
Inc. (11%)
1345 Campus Parkway (7) 9.20 Depot America, Inc. (37%), Quadramed Corp. (24%), De Vine Corp. (11%)
1433 Highway 34 9.38 State Farm Mutual Insurance Co. (30%), New Jersey Natural Gas Co (24%)
PASSAIC COUNTY, NEW JERSEY
Totowa
11 Commerce Way 9.19 Caremark Healthcare (78%), Olsten Health Services (11%), Siemens
Electromechanical (11%)
20 Commerce Way 12.23 Motorola Inc. (45%), Siemens Fiber Optics (41%)
29 Commerce Way 8.58 Sandvik Sorting Systems, Inc. (44%), Paterson Dental Supply Inc. (23%),
Fujitec America Inc. (22%), Wiltel Communications (11%)
40 Commerce Way 8.19 Thomson Electronics (43%), Interek Testing Services (29%), Snap-On, Inc.
(14%), System 3R USA (14%)
45 Commerce Way 8.91 Ericsson Radio Systems Inc. (52%), Woodward Clyde Consultants (27%),
Security Technologies, Inc. (10%), Oakwood Corporate Housing (10%)
60 Commerce Way 6.72 Relectronic Service Corp. (43%), Ericsson Inc. (29%), Maxlite S.K. America
(14%), HW Exhibits (14%)
80 Commerce Way 6.91 Hey Diddle Diddle Inc. (40%), IDEXX Veterinary (37%), Bell Atlantic (12%)
100 Commerce Way 1.26 Minolta Business Systems, Inc. (34%), Capstone Pharmaceutical (34%),
CCH Inc. (32%)
120 Commerce Way 14.18 Deerfield Healthcare (100%)
140 Commerce Way 7.74 Advanced Image System (20%), Philips Consumer Electronic, Inc. (1990), Holder
Group, Inc. (11%), Alpha Testing (10%), Dairygold (10%), Showa Tool USA, Inc.
(10%), Telsource, Inc. (10%), Universal Hospital Services (10%)
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
Percentage
of Total 1997
Office, 1997
Percentage Office/Flex, Average
Net Leased 1997 1997 and Industrial/ Base Rent
Rentable as of Base Effective Warehouse Per
Property Year Area 12/31/97 Rent Rent Base Rent Sq. Ft.
Location Built (Sq. Ft.) (%) (1) ($000) (2) ($000) (3) (%) ($) (4)
-------- ----- --------- ------- ---------- ---------- --------------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
WESTCHESTER COUNTY, NEW YORK
Elmsford
1 Westchester Plaza (7) 1967 25,000 100.0 267 265 0.13 11.64
2 Westchester Plaza (7) 1968 25,000 100.0 367 367 0.18 15.99
3 Westchester Plaza (7) 1969 93,500 100.0 1,000 1,000 0.50 11.65
4 Westchester Plaza (7) 1969 44,700 99.8 509 503 0.25 12.43
5 Westchester Plaza (7) 1969 20,000 100.0 250 250 0.12 13.62
6 Westchester Plaza (7) 1968 20,000 78.0 199 199 0.10 13.90
7 Westchester Plaza (7) 1972 46,200 95.9 556 554 0.28 13.67
8 Westchester Plaza (7) 1971 67,200 97.4 484 462 0.24 8.06
11 Clearbrook Road (7) 1974 31,800 100.0 295 295 0.15 10.11
75 Clearbrook Road (7) 1990 32,720 100.0 716 716 0.36 23.84
150 Clearbrook Road (7) 1975 74,900 100.0 907 907 0.45 13.19
175 Clearbrook Road (7) 1973 98,900 99.7 999 981 0.50 11.04
200 Clearbrook Road (7) 1974 94,000 94.5 917 916 0.46 11.25
250 Clearbrook Road (7) 1973 155,000 83.7 1,048 1,047 0.52 8.81
50 Executive Boulevard (7) 1969 45,200 97.2 340 337 0.17 8.43
77 Executive Boulevard (7) 1977 13,000 100.0 161 161 0.08 13.49
85 Executive Boulevard (7) 1968 31,000 99.4 360 359 0.18 12.73
300 Executive Boulevard (7) 1970 60,000 99.7 526 526 0.26 9.58
350 Executive Boulevard (7) 1970 15,400 98.8 223 223 0.11 15.97
399 Executive Boulevard (7) 1962 80,000 100.0 879 879 0.44 11.97
400 Executive Boulevard (7) 1970 42,200 89.7 515 514 0.26 14.82
500 Executive Boulevard (7) 1970 41,600 100.0 535 533 0.27 14.01
525 Executive Boulevard (7) 1972 61,700 100.0 734 730 0.37 12.96
Hawthorne
4 Skyline Drive (7) 1987 80,600 97.2 1,062 1,045 0.53 14.77
8 Skyline Drive (7) 1985 50,000 98.9 618 618 0.31 13.62
10 Skyline Drive (7) 1985 20,000 100.0 265 258 0.13 14.44
11 Skyline Drive (7) 1989 45,000 100.0 549 549 0.27 13.29
15 Skyline Drive (7) 1989 55,000 100.0 809 761 0.40 16.03
200 Saw Mill River Road (7) 1965 51,100 87.5 489 483 0.24 11.92
</TABLE>
27
<PAGE>
<TABLE>
<CAPTION>
1997 Tenants Leasing
Average 10% or More
Effective of Net
Rent Per Rentable Area
Property Sq. Ft. Per Property
Location ($) (5) as of 12/31/97 (6)
-------- ------- ------------------
<S> <C> <C>
WESTCHESTER COUNTY, NEW YORK
Elmsford
1 Westchester Plaza (7) 11.55 British Apparel (40%), American Greeting (20%), RS Knapp (20%),
Thin Film Concepts (20%)
2 Westchester Plaza (7) 15.99 Board of Cooperative Education (80%), Kin-Tronics (10%), Squires
Productions (10%)
3 Westchester Plaza (7) 11.65 Apria Healthcare (32%), Kangol Headwear (28%), V-Band Corp. (16%),
Dental Concepts (12%)
4 Westchester Plaza (7) 12.29 Metropolitan Life (38%), EEV Inc. (34%), Arsys Innotech Corp. (13%)
5 Westchester Plaza (7) 13.62 Kramer Scientific (26%), Rokonet Industries (25%), UA Plumbers Education
(25%), Fujitsu (12%), Furniture Etc. (12%)
6 Westchester Plaza (7) 13.90 Signacon Controls (28%), Xerox Corp. (28%), Girard Rubber Co. (13%)
7 Westchester Plaza (7) 13.62 Emigrant Savings Bank (57%), Fire End Croker (22%), Health Maintenance
Programs (10%)
8 Westchester Plaza (7) 7.69 Ciba Specialty (19%), Mamiya America (17%), Kubra Data (15%)
11 Clearbrook Road (7) 10.11 Eastern Jungle Gym (27%), Treetops Inc. (21%), MCS Marketing (18%),
Creative Medical Supplies (14%), Westchester Party Rental (14%)
75 Clearbrook Road (7) 23.84 Evening Out Inc. (100%)
150 Clearbrook Road (7) 13.19 Court Sports I (24%), Philips Medical (18%), Transwestern Publications
(12%), ADT Security Systems, Inc. (11%)
175 Clearbrook Road (7) 10.84 36 Midland Ave Corp. (35%), Hypres Inc (15%)
200 Clearbrook Road (7) 11.24 36 Midland Ave Corp. (22%), Proftech Corp (20%), I R Industries (18%),
Wyse Technology (15%)
250 Clearbrook Road (7) 8.80 AFP Imaging Corp (42%), The Artina Group (14%), Conri Services (11%)
50 Executive Boulevard (7) 8.36 MMO Music Group (69%), Medical Billing Associates (22%)
77 Executive Boulevard (7) 13.49 Bright Horizons Children (55%), WNN Corp. (35%)
85 Executive Boulevard (7) 12.69 VREX Inc (49%), Westhab Inc. (18%), John Caufield (13%), Saturn II
Systems (11%)
300 Executive Boulevard (7) 9.58 Varta Batteries (44%), Princeton Ski Outlet (43%), LMG International Inc.
(12%)
350 Executive Boulevard (7) 15.97 Copytex Corp. (99%)
399 Executive Boulevard (7) 11.97 American Banknote (72%), Kaminstein Imports (28%)
400 Executive Boulevard (7) 14.79 Baker Engineering (39%), North American Van Lines (25%), Execu
Lunch, Inc. (13%)
500 Executive Boulevard (7) 13.96 Original Consume (36%), Dover Elevator (16%), Commerce Overseas (16%),
Charles Martine (13%), Olsten Home Health (13%)
525 Executive Boulevard (7) 12.89 Vie De France (59%), New York Blood Center (21%)
Hawthorne
4 Skyline Drive (7) 14.53 GEC Alsthom Int'l. (60%)
8 Skyline Drive (7) 13.62 Cityscape Corp. (62%), Reveo Inc (29%)
10 Skyline Drive (7) 14.06 Bi-Tronic Inc/LCA (51%), Phoenix Systems Int'l (33%), Galson Corp.
(16%)
11 Skyline Drive (7) 13.29 Cube Computer (41%), Bowthorpe Holdings (19%), Agathon Machine (12%),
Planned Parenthood (11%)
15 Skyline Drive (7) 15.08 United Parcel Service (34%), Tellabs (27%), Emisphere Technology (23%),
Minolta Copier (16%)
200 Saw Mill River Road (7) 11.77 Walter Degruyter (21%), Monahans Plumbing (15%), ABSCOA (12%),
Argents Air Express (12%)
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
Percentage
of Total 1997
Office, 1997
Percentage Office/Flex, Average
Net Leased 1997 1997 and Industrial/ Base Rent
Rentable as of Base Effective Warehouse Per
Property Year Area 12/31/97 Rent Rent Base Rent Sq. Ft.
Location Built (Sq. Ft.) (%) (1) ($000) (2) ($000) (3) (%) ($) (4)
-------- ----- --------- ------- ---------- ---------- --------------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Yonkers
1 Odell Plaza (7) 1980 106,000 100.0 1,108 1,108 0.55 11.39
5 Odell Plaza (7) 1983 38,400 99.6 444 444 0.22 12.65
7 Odell Plaza (7) 1984 42,600 99.6 598 591 0.30 15.36
4 Executive Plaza (7) 1986 80,000 99.9 851 836 0.42 11.60
6 Executive Plaza (7) 1987 80,000 100.0 994 994 0.50 13.54
100 Corporate Boulevard (7) 1987 78,000 98.5 1,199 1,199 0.60 17.02
200 Corporate Boulevard South (7) 1990 84,000 99.7 478 478 0.24 14.97
FAIRFIELD COUNTY, CONNECTICUT
Stamford
419 West Avenue (7) 1986 88,000 99.8 1,358 1,358 0.68 16.86
500 West Avenue (7) 1988 25,000 83.9 279 279 0.14 14.49
550 West Avenue (7) 1990 54,000 100.0 696 688 0.35 14.04
- -----------------------------------------------------------------------------------------------------------------------------------
Total Office/Flex Properties 3,034,692 96.7 $32,507 $31,966 16.19 $12.10
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
1997 Tenants Leasing
Average 10% or More
Effective of Net
Rent Per Rentable Area
Property Sq. Ft. Per Property
Location ($) (5) as of 12/31/97 (6)
-------- ------- ------------------
<S> <C> <C>
Yonkers
1 Odell Plaza (7) 11.39 Court Sports II (19%), Gannet Satellite (11%), Crown Trophy
(10%)
5 Odell Plaza (7) 12.65 Voyetra Technologies (44%), Photo File Inc. (34%), Pharmerica Inc. (22%)
7 Odell Plaza (7) 15.18 US Postal Service (41%), TT Systems Co. (24%), Bright Horizons (16%)
4 Executive Plaza (7) 11.40 O K Industries (42%), E&B Giftware (17%)
6 Executive Plaza (7) 13.54 Cablevision Systems (40%), KVL Audio Visual Services (12%), Empire
Managed Care Inc. (10%)
100 Corporate Boulevard (7) 17.02 Montefiore Medical (19%), Xerox Corp. (13%), Minami Int'l. (12%),
Medigene (11%)
200 Corporate Boulevard South (7) 14.97 Belmay (32%), Montefiore Medical (23%), Codenoll Techonology (13%)
FAIRFIELD COUNTY, CONNECTICUT
Stamford
419 West Avenue (7) 16.86 Smith Industries Aerospace (80%)
500 West Avenue (7) 14.49 Stamford Assoc. (26%), TNT Skypac (26%), Lead Trackers (20%),
M. Cohen & Sons (11%)
550 West Avenue (7) 13.88 Davidoff of Geneva (56%), Lifecodes Corp. (44%)
- ---------------------------------------------------------------------------------------------------------------------------
Total Office/Flex Properties $11.91
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
Percentage
of Total 1997
Office, 1997
Percentage Office/Flex, Average
Net Leased 1997 1997 and Industrial/ Base Rent
Rentable as of Base Effective Warehouse Per
Property Year Area 12/31/97 Rent Rent Base Rent Sq. Ft.
Location Built (Sq. Ft.) (%) (1) ($000) (2) ($000) (3) (%) ($) (4)
-------- ----- --------- ------- ---------- ---------- --------------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
The Industrial/Warehouse Properties:
WESTCHESTER COUNTY, NEW YORK
Elmsford
1 Warehouse Lane (7) 1957 6,600 100.0 53 53 0.03 8.75
2 Warehouse Lane (7) 1957 10,900 100.0 97 97 0.05 9.70
3 Warehouse Lane (7) 1957 77,200 100.0 237 233 0.12 3.34
4 Warehouse Lane (7) 1957 195,500 95.4 1,608 1,601 0.80 9.39
5 Warehouse Lane (7) 1957 75,100 96.2 641 637 0.32 9.67
6 Warehouse Lane (7) 1982 22,100 99.8 467 467 0.23 23.07
- -----------------------------------------------------------------------------------------------------------------------------------
Total Industrial/Warehouse Properties 387,400 96.9 $3,103 $ 3,088 1.55 $9.00
- -----------------------------------------------------------------------------------------------------------------------------------
Total Office, Office/Flex,
and Industrial/Warehouse Properties 21,948,159 95.8 $200,774 $194,863 100.00 $17.30
===================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
1997 Tenants Leasing
Average 10% or More
Effective of Net
Rent Per Rentable Area
Property Sq. Ft. Per Property
Location ($) (5) as of 12/31/97 (6)
-------- ------- ------------------
<S> <C> <C>
The Industrial/Warehouse Properties:
WESTCHESTER COUNTY, NEW YORK
Elmsford
1 Warehouse Lane (7) 8.75 JP Trucking Service (100%)
2 Warehouse Lane (7) 9.70 RJ Bruno Roofing Inc. (55%), Savin Engineers PC (41%)
3 Warehouse Lane (7) 3.29 United Parcel Service (100%)
4 Warehouse Lane (7) 9.35 San Mar Laboratory (59%), Marcraft Clothes (18%), Adams Global Industries
(11%)
5 Warehouse Lane (7) 9.61 F&V Distribution Co. (54%), E & H Tire Boxing (19%), Conway Import Co.
(10%)
6 Warehouse Lane (7) 23.07 Conway General (96%)
- ----------------------------------------------------------------------------------------------------------------------------
Total Industrial/Warehouse Properties $8.96
- ----------------------------------------------------------------------------------------------------------------------------
Total Office, Office/Flex,
and Industrial/Warehouse Properties $17.01
============================================================================================================================
</TABLE>
See footnotes on subsequent page.
30
<PAGE>
- ----------
(1) Based on all leases in effect as of December 31, 1997.
(2) Total base rent for 1997, determined in accordance with generally accepted
accounting principles (GAAP). Substantially all of the leases provide for
annual base rents plus recoveries and escalation charges based upon the
tenant's proportionate share of and/or increases in real estate taxes and
certain operating costs, as defined, and the pass through of charges for
electrical usage.
(3) Total base rent for 1997 minus total 1997 amortization of tenant
improvements, leasing commissions and other concessions and costs,
determined in accordance with GAAP.
(4) Base rent for 1997 divided by net rentable square feet leased at December
31, 1997. For those Properties acquired by the Company during 1997,
amounts presented are annualized, as per Note 7.
(5) Effective rent for 1997 divided by net rentable square feet leased at
December 31, 1997. For those Properties acquired by the Company during
1997, amounts presented are annualized, as per Note 7.
(6) Excludes office space leased by the Company.
(7) As this Property was acquired by the Company during 1997, the amounts
represented in 1997 base rent and 1997 effective rent reflect only that
portion of the year during which the Company owned or placed the Property
in service. Accordingly, these amounts may not be indicative of the
Property's full year results. For comparison purposes, the amounts
represented in 1997 average base rent per sq. ft. and 1997 average
effective rent per sq. ft. for this Property have been calculated by
taking 1997 base rent and 1997 effective rent for such Property and
annualizing these partial-year results, dividing such annualized amounts
by the net rentable square feet leased at December 31, 1997. These
annualized per square foot amounts may not be indicative of the Property's
results had the Company owned or placed such Property in service for the
entirety of 1997.
31
<PAGE>
Retail Properties
The Company owned two stand-alone retail properties as of December 31, 1997,
both acquired in the RM Transaction, described below:
The Company owns an 8,000 square foot restaurant, constructed in 1986, located
in the South Westchester Executive Park in Yonkers, Westchester County, New
York. The restaurant is 100 percent leased to Magic at Yonkers, Inc. for use as
a Red Robin restaurant under a 25-year lease. The lease currently provides for
fixed annual base rent of $230,000, with fully-reimbursed real estate taxes, and
operating expenses escalated based on the consumer price index ("CPI") over a
base year CPI. The lease, which expires on June 30, 2012, includes scheduled
rent increases in July 1997 to approximately $265,000 annually, and in July 2002
to approximately $300,000 annually. The lease also provides for additional rent
calculated as a percentage of sales over a specified sales amount, as well as
for two five-year renewal options. 1997 total base rent for the property,
calculated in accordance with GAAP, was approximately $276,239.
The Company also owns a 9,300 square foot restaurant, constructed in 1984,
located at 230 White Plains Road, Tarrytown, Westchester County, New York. The
restaurant is 100 percent leased to TGI Fridays under a 10-year lease which
provides for fixed annual base rent of approximately $195,000, with
fully-reimbursed real estate taxes, and operating expenses escalated based on
CPI over a base year CPI. The lease, which expires on August 31, 2004, also
provides for additional rent calculated as a percentage of sales over a
specified sales amount, as well as for four five-year renewal options. 1997
total base rent for the property, calculated in accordance with GAAP, was
approximately $178,750.
Land Leases
The Company owned two land leases as of December 31, 1997, both acquired in the
RM Transaction, described below:
The Company has land leased to Star Enterprises, where a 2,264 square-foot
Texaco gas station was constructed, located at 1 Enterprise Boulevard in
Yonkers, Westchester County, New York. The 15-year, triple-net land lease
provides for annual rent of approximately $125,000 through January 1998, with an
increase to approximately $145,000 annual rent through April 30, 2005. The lease
also provides for two five-year renewal options. 1997 total base rent under this
lease, calculated in accordance with GAAP, was approximately $131,974.
The Company also leases five acres of land to Rake Realty, where a 103,500
square-foot office building exists, located at 700 Executive Boulevard,
Elmsford, Westchester County, New York. The 22-year, triple-net land lease
provides for fixed annual rent plus a CPI adjustment every five years, and
expires on November 30, 2000. 1997 total base rent under this lease, calculated
in accordance with GAAP, was approximately $88,418. The lease also provides for
several renewal options which could extend the lease term for an additional 30
years.
Multi-family Residential Properties
The Company owned two multi-family residential properties, as of December 31,
1997, described below:
Tenby Chase Apartments, Delran, Burlington County, New Jersey
The Company's multi-family residential property, known as the Tenby Chase
Apartments, was built in 1970. The property contains 327 units, comprised of 196
one-bedroom units and 131 two-bedroom units, with an average size of
approximately 1,235 square feet per unit. The property had an average monthly
rental rate of approximately $732 per unit during 1997 and was approximately
93.9 percent leased as of December 31, 1997. The property had 1997 total base
rent of approximately $2.7 million, which represented approximately 1.3 percent
of the Company's 1997 total base rent. The average occupancy rate for the
property in each of 1997, 1996 and 1995, was 95.5 percent, 95.3 percent, and
93.6 percent, respectively.
32
<PAGE>
25 Martine Avenue, White Plains, Westchester County, New York
The Company's multi-family residential property, acquired in the RM Transaction
and known as 25 Martine Avenue, was built in 1987. The property contains 124
units, comprised of 18 studio units, 71 one-bedroom units and 35 two-bedroom
units, with an average size of approximately 722 square feet per unit. The
property had an average monthly rental rate of approximately $1,370 per unit
during 1997 and was 95.2 percent leased as of December 31, 1997. The property
had 1997 total base rent of approximately $2.0 million, which represented
approximately 1.0 percent of the Company's 1997 total base rent. The average
occupancy rate for the property in each of 1997, 1996 and 1995 was 97.6 percent,
96.4 percent and 98.3 percent, respectively.
33
<PAGE>
Office Properties: Schedule of Lease Expirations
The following table sets forth a schedule of the lease expirations for the
Office Properties beginning January 1, 1998, assuming that none of the tenants
exercises renewal options:
<TABLE>
<CAPTION>
Average Annual
Percentage Of Rent Per Net
Net Rentable Total Leased Annual Base Rentable
Area Subject Square Feet Rent Under Square Foot
Number Of To Expiring Represented By Expiring Represented
Year Of Leases Leases Expiring Leases By Expiring
Expiration Expiring (1) (Sq. Ft.) Leases (%) (2) ($000) (3) Leases ($)
- ---------- ------------ ---------------- ----------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
1998.............. 438 1,418,579 8.07 $25,651 $18.08
1999.............. 411 1,925,267 10.96 35,921 18.66
2000.............. 348 3,362,857 19.14 58,931 17.52
2001.............. 239 1,931,996 10.99 33,326 17.25
2002.............. 247 2,067,386 11.76 38,854 18.79
2003.............. 87 1,648,267 9.38 25,220 15.30
2004.............. 40 710,332 4.04 13,923 19.60
2005.............. 26 505,137 2.88 9,658 19.12
2006.............. 28 385,694 2.19 8,226 21.33
2007.............. 21 753,831 4.29 15,504 20.57
2008.............. 9 713,343 4.06 11,460 16.07
2009 and thereafter 22 2,151,731 12.24 41,711 19.38
- ------------------------------------------------------------------------------------------------------------------------------------
Total/Weighted
Average......... 1,916 17,574,420 100.00 $318,385 $18.12
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes office tenants only. Excludes leases for amenity, retail, parking
and month-to-month office tenants. Some tenants have multiple leases.
(2) Excludes all space vacant as of December 31, 1997.
(3) Based upon aggregate base rent, determined in accordance with GAAP,
including all leases dated on or before December 31, 1997.
34
<PAGE>
Office/Flex Properties: Schedule of Lease Expirations
The following table sets forth a schedule of the lease expirations for the
Office/Flex Properties, beginning January 1, 1998, assuming that none of the
tenants exercises renewal options or termination rights:
<TABLE>
<CAPTION>
Average Annual
Percentage Of Rent Per Net
Net Rentable Total Leased Annual Base Rentable
Area Subject Square Feet Rent Under Square Foot
Number Of To Expiring Represented By Expiring Represented
Year Of Leases Leases Expiring Leases By Expiring
Expiration Expiring(1) (Sq. Ft.) Leases (% )(2) ($000) (3) Leases ($)
- ---------- ----------- ------------- ----------------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
1998................. 91 486,027 16.44 $5,877 $12.09
1999................. 61 439,528 14.87 5,023 11.43
2000................. 56 541,450 18.32 6,307 11.65
2001................. 58 615,916 20.84 7,589 12.32
2002................. 53 481,695 16.29 6,059 12.58
2003................. 8 78,195 2.65 1,034 13.22
2004................. 4 64,305 2.18 784 12.19
2005................. 2 17,575 0.59 208 11.83
2006................. 3 77,163 2.61 1,644 21.31
2007................. 3 86,918 2.94 1,217 14.00
2008................. 2 34,376 1.16 320 9.31
2009 and thereafter.. 2 32,863 1.11 560 17.04
- -----------------------------------------------------------------------------------------------------------------------------------
Total/Weighted
Average............ 343 2,956,011 100.00 $36,622 $12.39
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes office/flex tenants only. Excludes leases for amenity, retail,
parking and month-to-month office tenants. Some tenants have multiple
leases.
(2) Excludes all space vacant as of December 31, 1997.
(3) Based upon aggregate base rent determined in accordance with GAAP,
including all leases dated on or before December 31, 1997.
35
<PAGE>
Industrial/Warehouse Properties: Schedule of Lease Expirations
The following table sets forth a schedule of the lease expirations for the
Industrial/Warehouse Properties, beginning January 1, 1998, assuming that none
of the tenants exercises renewal options or termination rights:
<TABLE>
<CAPTION>
Average Annual
Percentage Of Rent Per Net
Net Rentable Total Leased Annual Base Rentable
Area Subject Square Feet Rent Under Square Foot
Number Of To Expiring Represented By Expiring Represented
Year Of Leases Leases Expiring Leases By Expiring
Expiration Expiring (1) (Sq. Ft.) Leases (%) (2) ($000) (3) Leases ($)
- ---------- ------------ -------------- ----------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
1998.............. 8 148,913 39.74 $ 893 $ 6.00
1999.............. 2 7,500 2.00 76 10.13
2000.............. 4 60,044 16.02 566 9.43
2001.............. 3 33,778 9.02 597 17.67
2002.............. 1 10,150 2.71 108 10.64
2004.............. 2 114,332 30.51 1,147 10.03
- ------------------------------------------------------------------------------------------------------------------------------------
Total/Weighted
Average......... 20 374,717 100.00 $3,387 $ 9.04
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes industrial/warehouse tenants only. Excludes leases for amenity,
retail, parking and month-to-month office tenants. Some tenants have
multiple leases.
(2) Excludes all space vacant as of December 31, 1997.
(3) Based upon aggregate base rent determined in accordance with GAAP,
including all leases dated on or before December 31, 1997.
36
<PAGE>
Harborside Financial Center, Jersey City, Hudson County, New Jersey
As the book value of Harborside was in excess of 10 percent of the Company's
total assets at December 31, 1997, additional information regarding the Property
is provided below.
Harborside, acquired by the Company on November 4, 1996, is a completely
redeveloped, three-building office complex containing 1,886,800 square feet of
net rentable area located in the Exchange Place Newport Center submarket of
Jersey City, New Jersey. This submarket is a satellite office market of
Manhattan and is occupied primarily by the support and technical operations of
New York City-based financial institutions. The buildings, known as Plazas I, II
and III, were developed as a complete reconstruction of existing buildings in
two phases, with the first completed in 1983 and the second in 1990. The
buildings are connected via an enclosed 1,000 foot waterfront promenade
featuring restaurants, service retail shops and a food court, as well as an
atrium lobby. The promenade includes various retail operations such as
restaurants, a bank, and a dry cleaner. The property is situated on 47.98 acres
for the existing building complex, 11.29 acres of undeveloped land, 5.78 acres
of piers and 21.61 acres of underwater land (excluding piers).
Plaza I is served by six passenger elevators as well as a 15,000 lb. freight
car. Plazas II and III are each served by ten passenger elevators and have seven
oversized freight elevators in total. In addition, there are large shafts where
freight elevators have been removed which enable tenants to bring significant
electric telecommunications cabling to their space at minimal cost.
The property leases space to parking operators and provides for approximately
1,685 parking spaces including 200 spaces on the south pier. Public
transportation to the property is available through the Exchange Place PATH rail
station which is immediately adjacent to the property and links Harborside to
downtown Manhattan in approximately four minutes. The PATH also provides access
to midtown Manhattan, Newark and Hoboken in less than twenty minutes. The
property is also connected to Manhattan by road via a three mile drive to the
Holland Tunnel and a five-mile drive to the Lincoln Tunnel. Interstates 78 and
495, U.S. Routes 1, 9 and 440, and NJ Route 3 connect the property to locations
throughout northern New Jersey.
37
<PAGE>
The following table sets forth certain information (on a per rentable square
foot basis unless otherwise indicated) about the Property since January 1, 1993
(based upon an average of all lease transactions during the respective periods):
<TABLE>
<CAPTION>
Year Ended December 31,
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Number of leases signed
during period (1) 3 9 5 8 1
Rentable square feet leased
during period (1) 12,143 201,933 50,806 186,133 16,911
Base rent ($) (2) 20.35 16.04 22.33 20.41 22.43
Tenant improvements ($) (3) 24.31 17.69 19.21 13.38 --
Leasing commissions ($) (4) 8.68 10.28 4.71 10.45 16.68
Effective rent ($) (5) 13.86 13.91 19.95 18.07 20.75
Expense stop ($) (6) 3.42 3.91 2.52 4.34 7.97
Effective equivalent triple
net rent ($) (7) 10.44 10.00 17.43 13.73 12.78
Occupancy rate at end of
period (%) (1) 88.1 93.3 96.1 98.8 98.3
</TABLE>
- ---------------------
(1) Includes only office tenants with lease terms of 12 months or longer.
Excludes leases for amenities, parking, retail and month-to-month office
tenants.
(2) Equals aggregate base rent received over their respective terms from all
lease transactions during the period, divided by the terms in months for
such leases during the period, multiplied by 12, divided by the total net
rentable square feet leased under all lease transactions during the
period.
(3) Equals work letter costs net of estimated provision for profit and
overhead. Actual cost tenant improvements may differ from estimated work
letter costs.
(4) Equals an aggregate of leasing commissions payable to employees and third
parties based on standard commission rates and excludes negotiated
commission discounts obtained from time to time.
(5) Equals aggregate base rent received over their respective terms from all
lease transactions during the period minus all tenant improvements,
leasing commissions and other concessions from all lease transactions
during the period, divided by the terms in months for such leases,
multiplied by 12, divided by the total net rentable square feet under all
lease transactions during the period.
(6) Equals the aggregate of each base year tax and common area maintenance
pool multiplied by the respective pro rata share for all lease
transactions during the period, divided by the total net rentable square
feet leased under all lease transactions during the period.
(7) Equals effective rent minus expense stop.
38
<PAGE>
The following schedule sets forth the average percent leased and average annual
rental per leased square foot for the years ended December 31, 1993 through 1997
for Harborside:
Average Annual
Average Base Rent Per
Percentage Leased Square
Year Leased (%) (1) Foot ($) (2)
---- -------------- -------------
1997 98.6 20.34
1996 97.5 16.23
1995 94.7 15.99
1994 90.7 15.26
1993 83.4 16.36
- ---------------------
(1) Average of beginning and end of year aggregate percentage leased.
(2) Total base rents for the year, determined in accordance with GAAP, divided
by average of beginning and end of year aggregate net rentable area
leased.
Four tenants at Harborside occupy approximately 65.6 percent of the net rentable
square feet in the aggregate as of December 31, 1997, as follows:
Bankers Trust Harborside, Inc., a commercial bank, occupied 385,000 square feet
(approximately 20.4 percent of the net rentable square feet of Harborside) at
December 31, 1997, pursuant to a triple-net lease which expires March 31, 2003,
with a five-year renewal option. Total rental income from Bankers Trust,
including escalations and recoveries, was approximately $3.4 million for the
year ended December 31, 1997. The lease provides, among other things, for an
annual rent increase of $770,000 to an annual rent of approximately $3.3 million
beginning on April 1, 1998.
Dow Jones Telerate Systems, Inc., a tele-communications firm, occupied 378,232
square feet at December 31, 1997 (approximately 20 percent of the net rentable
square feet of Harborside) pursuant to various leases expiring June 30, 1999
through March 31, 2001, with two five-year renewal options of 187,817 square
feet of space and one five-year option on 45,187 square feet of space. Total
rental income from Dow Jones Telerate Systems, Inc., including escalations and
recoveries, was approximately $9.7 million for the year ended December 31, 1997.
Certain of the leases provide for annual rental increases totaling approximately
$181,000 beginning in June 2001.
AICPA, a professional organization, occupied approximately 250,000 square feet
(approximately 13.3 percent of the net rentable square feet of Harborside) at
December 31, 1997, pursuant to a lease which expires July 31, 2012, with a
ten-year renewal option. Total rental income from the AICPA, including
escalations and recoveries, was approximately $7.5 million for the year ended
December 31, 1997. The AICPA lease provides for, among other things, annual
rental increases of approximately $836,000 in July 2002 and $836,000 in July
2007.
Dean Witter Trust Company ("Dean Witter"), a securities firm, occupied 225,078
square feet (approximately 11.9 percent of the net rentable square feet of
Harborside) at December 31, 1997, pursuant to a lease which expires February 8,
2008, with a ten-year and a five-year renewal option. Total rental income from
Dean Witter, including escalations and recoveries, was approximately $6.2
million for the year ended December 31, 1997. The lease provides for, among
other things, annual rental increases of approximately $250,784 beginning in
February 1998, $59,262 in September 2000, $537,393 in February 2003 and $126,990
in May 2003.
39
<PAGE>
The following table sets forth a schedule of the lease expirations for
Harborside, beginning January 1, 1998, assuming that none of the tenants
exercise renewal options.
<TABLE>
<CAPTION>
Average
Annual
Percentage Of Rent Per Net
Net Rentable Total Leased Annual Base Rentable
Area Subject Square Feet Rent Under Square Foot
Number Of To Expiring Represented By Expiring Represented
Year Of Leases Leases Expiring Leases By Expiring
Expiration Expiring (1) (Sq. Ft.) Leases (%) (2) ($000) (3) Leases ($)
- ---------- ------------ ---------------- ----------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
1998.............. 3 28,511 1.64 $ 676 $ 23.71
1999.............. 7 85,209 4.90 1,986 23.31
2000.............. 6 289,577 16.67 5,763 19.90
2001.............. 2 69,996 4.03 1,680 24.00
2003.............. 1 385,000 22.16 3,103 8.06
2004.............. 1 24,729 1.42 590 23.86
2005.............. 5 118,971 6.85 1,735 14.58
2006.............. 7 100,807 5.80 2,157 21.40
2007.............. 2 28,472 1.64 631 22.16
2008 ............. 4 221,461 12.75 4,129 18.64
2009 and thereafter 5 384,644 22.14 9,300 24.18
- ------------------------------------------------------------------------------------------------------------------------------------
Total/Weighted
Average......... 43 1,737,377 100.00 $31,750 $ 18.27
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes office tenants only. Excludes leases for amenities, retail,
parking and month-to-month office tenants.
(2) Excludes all space vacant as of December 31, 1997.
(3) Based upon aggregate base rent, calculated in accordance with GAAP,
including all leases dated on or before December 31, 1997.
40
<PAGE>
The aggregate tax basis of depreciable real property at Harborside for federal
income tax purposes was approximately $254.5 million as of December 31, 1997.
Depreciation and amortization are computed on a straight-line basis over the
estimated useful
41
<PAGE>
life of the real property which range from 15 to 39 years. There is no
depreciable personal property associated with Harborside for federal income tax
purposes as of December 31, 1997.
Tax abatements for Harborside were obtained in 1988 by the former owner of the
property from the City of Jersey City under the Fox-Lance Program and were
assumed by the Company as part of the acquisition of Harborside on November 4,
1996. The abatements, which commenced in 1990, are for a term of 15 years. The
Company is required to pay municipal services equal to two percent of Total
Project Costs, as defined, in year one and increase by $75,000 per annum through
year fifteen. Total Project Costs, as defined, are $148.7 million. The service
charges for the remaining undeveloped parcels will be equal to two percent of
Total Project Costs for each unit in year one and increase to three percent by
year fifteen.
THE COMPANY'S REAL ESTATE MARKETS
The Company's Properties are located primarily in the Northeast and Southwest,
including a predominant presence in New Jersey, New York, Pennsylvania, Texas
and Arizona. The following is a discussion of the markets within which
substantially all of the Company's properties are located:
Northern New Jersey: The Northern New Jersey market consists of Bergen, Essex,
Hudson, Morris and Passaic Counties. Northern New Jersey's five counties are
part of the greater New York metropolitan area, are less than a 45 minute drive
from Manhattan, and are widely regarded as major centers for corporate and
international business. The region has direct access to New York City by public
transportation and extensive road networks. In addition to being home to the two
largest cities in New Jersey, Newark and Jersey City, Newark International
Airport and the New York/New Jersey Harbor are also located within the
five-county boundary.
Overall vacancy rates have declined in the Northern New Jersey market for the
fifth consecutive year as a direct result of an increase in leasing activity and
net absorption levels. Although some built-to-suit activity is present,
speculative construction remains virtually nonexistent. The Company owns and
operates approximately 8.6 million square feet of office and office/flex space
in Northern New Jersey.
Central New Jersey: The Central New Jersey market consists of Union, Somerset,
Hunterdon, Middlesex, Mercer and Monmouth Counties. Encompassing approximately
2,000 square miles in six counties, Central New Jersey is notable for its
proximity to major highway arteries, including Interstates 78 and 287, Route 1,
the Garden State Parkway and the New Jersey Turnpike. This market continues to
be a prime location for Fortune 500 headquarters, research & development
operations and financial, insurance and real estate (FIRE) sector businesses.
Central New Jersey vacancy rates are decreasing while average asking rents are
increasing. This is, in part, attributable to the increase in demand, measured
by leasing activity, which rose predominantly due to corporate expansions. The
Company owns and operates approximately 2.6 million square feet of office and
office/flex space in the Central New Jersey counties of Union, Mercer and
Monmouth.
Suburban Philadelphia, Pennsylvania: The Suburban Philadelphia market consists
of six counties in Pennsylvania on the west side of the Delaware River and eight
counties in New Jersey on the east side of the Delaware River. The Pennsylvania
counties consist of Bucks, Chester, Delaware, Montgomery, Lehigh and Northampton
Counties. These six counties surround the City of Philadelphia, are home to many
affluent communities, and are regarded as major centers for corporate and
international business. The areas are served by an extensive highway network
allowing easy access to Philadelphia International Airport and the Port of
Philadelphia.
Over the last few years the overall vacancy rate in this region has declined and
in 1996, the rate dipped below 10 percent for the first time as a result of
strong leasing activity and virtually no new construction. The Company owns and
operates approximately 1.5 million square feet of office space in these Suburban
Philadelphia counties.
42
<PAGE>
The New Jersey counties consist of Burlington, Camden, Atlantic, Ocean,
Gloucester, Salem, Cumberland and Cape May Counties. This market has extensive
geographic boundaries, stretching from the Delaware River to the Atlantic Ocean
and Atlantic City. This region is mainly suburban, with the exception of Camden
County, which is home to many affluent communities, and Atlantic City, one of
the nation's largest centers for gaming/tourism.
The Company owns and operates approximately 228,300 square feet of office space
and one 327-unit multi-family residential complex in Atlantic and Burlington
Counties.
Rockland County, New York: Rockland County, New York is located north of the New
Jersey/New York border directly adjacent to Bergen County. Rockland County has
excellent highway access to both New York City via Interstate 87 and to New
Jersey via Interstate 287.
The Company owns and operates a 180,000 square foot office property in Rockland
County.
Westchester County, New York: Westchester County, New York, is located
immediately north of New York City and is accessible to New York City by public
transportation and through an extensive road network. In Westchester County, the
vacancy rate has declined steadily over the last three years as the office
market has absorbed 3 million square feet that IBM, AT&T and NYNEX vacated from
1989 to 1993. Speculative construction has been virtually non-existent during
the past five years.
The Company owns and operates approximately 3.6 million square feet of office
and office/flex space, 387,400 square feet of industrial/warehouse space, a
126-unit multi-family residential property, two stand-alone retail properties,
and two land leases in Westchester County, New York. The Company entered this
market for the first time with the RM Transaction.
Fairfield County, Connecticut: Fairfield County, Connecticut is the county in
Connecticut closest in proximity with New York City. It has direct access to New
York City via public transportation and through an extensive road network. The
county is home to ten Fortune 500 headquarters and there has been a substantial
decline in vacancy during the past two years.
The Company owns and operates approximately 300,000 square feet of office and
office/flex space in Fairfield County. The Company entered this market for the
first time with the RM Transaction.
Dallas-Fort Worth, Texas: The Dallas-Fort Worth market includes Dallas, Tarrant
and portions of Collin and Denton Counties. The market includes the central
business districts of both Dallas and Fort Worth and the suburban areas
primarily to the north of those cities. Dallas-Forth Worth International Airport
is one of the busiest airports in the nation and is important to the growth of
the area. This area is home to the headquarters of numerous Fortune 500
companies. The Company entered this market for the first time with the Mack
Transaction, and owns and operates approximately 1.0 million square feet of
office space in Dallas, Tarrant and Collin Counties.
Houston, Texas: The Houston office market is comprised primarily of the city of
Houston and its surrounding suburbs. Houston is a major location of Fortune 500
companies' headquarters, primarily in the oil and gas industries. Houston is
also a major port serving the southern portion of the United States. The Company
entered this market for the first time with the Mack Transaction, and owns and
operates approximately 700,000 square-feet in the Houston market.
San Antonio, Texas: The San Antonio market consists primarily of Bexar County.
San Antonio is located at the cross roads of two major arteries, Interstate 35
and Interstate 10, and is a primary location of military facilities. San Antonio
is the third largest metropolitan area in Texas, behind Dallas and Houston. The
Company entered this market for the first time with the Mack Transaction, and
owns approximately 940,000 square feet of office space in Bexar County.
Phoenix, Arizona: The Phoenix market is comprised primarily of the city of
Phoenix and several suburbs to the north and west, including Scottsdale. Phoenix
is the focal point of Arizona, in addition to being the state capital. It is the
location of numerous corporate headquarters and regional headquarter facilities.
The Phoenix market has been considered one of the most rapidly growing markets
in the county. The Company entered this market for the first time with the Mack
Transaction, and owns and operates approximately 484,670 square feet of office
space in the Phoenix market.
43
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings, other than ordinary routine
litigation incidental to its business, to which the Company is a party or to
which any of its Properties is subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On December 11, 1997, the Company held a special meeting of shareholders (the
"Special Meeting") to vote upon the Mack Transaction, among other things. At the
Special Meeting, the shareholders voted upon and approved the following
proposals: (i) the adoption of the contribution and exchange agreement, dated as
of September 18, 1997, as amended, among the Company, the Operating Partnership
and the Mack Company, pursuant to which the Mack Company contributed the Mack
Properties to the Operating Partnership in exchange for a combination of cash,
assumption of debt, common and preferred units and warrants to purchase common
units. See "Recent Developments -- Mack Transaction." (Number of shares For:
37,992,118, Number of shares Against: 86,217, Number of shares Abstain: 155,603,
Number of shares Broker Non-Vote: 0); (ii) the adoption of an amendment to the
Company's Amended and Restated Articles of Incorporation to change the Company's
name from "Cali Realty Corporation" to "Mack-Cali Realty Corporation" (Number of
shares For: 37,969,601, Number of shares Against: 119,714, Number of shares
Abstain: 144,623, Number of shares Broker Non-Vote: 0); (iii) the adoption of an
amendment to the Company's Employee Stock Option Plan to increase the number of
shares authorized thereunder by 2,200,000 shares, from 2,780,188 to 4,980,188
(Number of shares For: 35,151,729, Number of shares Against: 2,854,495, Number
of shares Abstain: 226,713, Number of shares Broker Non-Vote: 1,001); and (iv)
the adoption of two amendments to the Company's Director Stock Option Plan to
(a) increase the number of shares authorized thereunder by 200,000 shares, from
200,000 to 400,000 and (b) provide for the participation thereunder of
non-employee members of the Advisory Board (Number of shares For: 35,566,739,
Number of shares Against: 2,401,437, Number of shares Abstain: 264,759, Number
of shares Broker Non-Vote: 993).
44
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
The shares of the Company's common stock are traded on the New York Stock
Exchange ("NYSE") and the Pacific Exchange under the symbol "CLI".
Market Information
The following table sets forth the quarterly high, low, and closing price per
share of Common Stock reported on the NYSE for the years ended December 31, 1997
and 1996, respectively:
For the Year Ended December 31, 1997:
High Low Close
---- --- -----
First Quarter $34.8750 $30.0000 $32.0000
Second Quarter $34.0000 $28.7500 $34.0000
Third Quarter $41.6250 $32.3750 $41.6250
Fourth Quarter $42.6875 $36.2500 $41.0000
For the Year Ended December 31, 1996:
High Low Close
---- --- -----
First Quarter $23.6250 $20.7500 $22.3750
Second Quarter $24.6250 $21.5000 $24.2500
Third Quarter $27.1250 $22.6250 $27.1250
Fourth Quarter $30.8750 $26.1250 $30.8750
On March 27, 1998, the closing Common Stock sales price on the NYSE was $39.0625
per share.
Holders
On March 27, 1998, the Company had 346 common shareholders of record.
Dividends and Distributions
As a result of the Company's improved operating performance, in September 1997,
the Company announced an 11.1 percent increase in its regular quarterly
distribution, commencing with the Company's distribution with respect to the
third quarter of 1997, from $0.45 per share ($1.80 per share of Common Stock on
an annualized basis) to $0.50 per share of Common Stock ($2.00 per share of
Common Stock on an annualized basis). The Company declared a cash dividend of
$0.50 per share on December 17, 1997 to stockholders of record on January 5,
1998. Also, on that date, the Company declared a cash distribution to the
limited partners in the Operating Partnership that was equivalent to $0.50 per
common unit, as well as the pro-rated fourth quarter preferred unit distribution
aggregating approximately $888,000. The dividend and distributions were paid on
January 16, 1998. The declaration and payment of dividends and distributions
will continue to be determined by the Board of Directors in light of conditions
then existing, including the Company's earnings, financial condition, capital
requirements, applicable legal restrictions and other factors.
45
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
46
<PAGE>
Selected Financial Data
Mack-Cali Realty Corporation and Subsidiaries
The following table sets forth selected financial data on a consolidated basis
for the Company and on a combined basis for the Cali Group. The consolidated
selected financial data of the Company as of December 31, 1997, 1996, 1995 and
1994, and for the periods then ended, and the combined selected financial
data of the Cali Group as of December 31, 1993 and for the periods ended August
30, 1994 and December 31, 1993 have been derived from financial statements
audited by Price Waterhouse LLP, independent accountants.
<TABLE>
<CAPTION>
====================================================================================================================================
Operating Data
The Company The Cali Group
-------------------------------------------------- ----------------------------------
August 31, January 1,
1994 to 1994 to Year Ended
Year Ended December 31, December 31, August 30, December 31,
In thousands, except per share data 1997 1996 1995 1994 1994 1993
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Total revenues $249,801 $ 95,472 $ 62,335 $ 16,841 $ 33,637 $ 47,900
Operating and other expenses $ 75,150 $ 29,662 $ 20,705 $ 5,240 $ 11,155 $ 16,408
General and administrative $ 15,862 $ 5,800 $ 3,712 $ 1,079 $ 2,288 $ 2,618
Depreciation and amortization $ 36,825 $ 14,731 $ 10,655 $ 3,319 $ 5,093 $ 7,934
Interest expense $ 39,078 $ 13,758 $ 10,117 $ 2,213 $ 13,969 $ 22,004
Non-recurring merger-related charges $ 46,519 -- -- -- -- --
Income (loss) before minority interest
and extraordinary item $ 36,367 $ 37,179 $ 17,146 $ 4,990 $ (110) $ (1,064)
Income (loss) before extraordinary item $ 4,988 $ 32,419 $ 13,638 $ 3,939 $ (110) $ (1,064)
Basic earnings per common share--
before extraordinary item(1) $ 0.13 $ 1.76 $ 1.23 $ 0.38
Diluted earnings per common share--
before extraordinary item(1) $ 0.12 $ 1.73 $ 1.22 $ 0.38
Dividends declared per common share $ 1.90 $ 1.75 $ 1.66 $ 0.54
Basic weighted average shares
outstanding 39,266 18,461 11,122 10,500
Diluted weighted average shares
outstanding 44,156 21,436 14,041 13,302
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================================
Balance Sheet Data
The Company The Cali Group
---------------------------------------------------------- ---------------
December 31, December 31,
In thousands 1997 1996 1995 1994 1993
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Rental property, before accumulated
depreciation and amortization $2,629,616 $ 853,352 $ 387,675 $ 234,470 $ 213,675
Total assets $2,593,444 $1,026,328 $ 363,949 $ 225,295 $ 208,828
Mortgages and loans payable $ 972,650 $ 268,010 $ 135,464 $ 77,000 $ 231,981
Total liabilities $1,056,759 $ 297,985 $ 150,058 $ 88,081 $ 243,163
Minority interest $ 379,245 $ 26,964 $ 28,083 $ 28,903 --
Stockholders' equity (partner's deficit) $1,157,440 $ 701,379 $ 185,808 $ 108,311 $ (34,355)
</TABLE>
47
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Other Data
The Company The Cali Group
--------------------------------------------------- --------------------------
August 31, January 1,
1994 to 1994 to Year Ended
Year Ended December 31, December 31, August 30, December 31,
In thousands 1997 1996 1995 1994 1994 1993
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Cash flows provided by operating
activities $ 98,142 $ 46,823 $ 28,446 $ 6,367 $ 6,328 $ 2,735
Cash flows (used in) provided by
investing activities $(939,501) $(307,752) $(133,736) $ (8,947) $ 1,975 $ (3,227)
Cash flows provided by (used in)
financing activities $ 639,256 $ 464,769 $ 99,863 $ 8,974 $ (1,038) $ (886)
Funds from operations before
distribution to preferred unitholders
and minority interest of common
unitholders(2) $ 111,752 $ 45,220 $ 27,397 $ 8,404
Funds from operations before
minority interest(2) $ 110,864 $ 45,220 $ 27,397 $ 8,404
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Earnings per share (EPS) amounts were retroactively restated in accordance
with FASB No. 128, except for the Cali Group periods, as the Cali Group
consisted of a series of partnerships.
(2) The Company considers funds from operations (after adjustment for
straight-lining of rents) one measure of REIT performance. Funds from
operations is defined as net income (loss) before minority interest of
unitholders (preferred and common) computed in accordance with generally
accepted accounting principles ("GAAP"), excluding gains (or losses) from
debt restructuring, other extraordinary and significant non-recurring
items and sales of property, plus real estate-related depreciation and
amortization. Funds from operations should not be considered as an
alternative for net income as an indication of the Company's performance
or to cash flows as a measure of liquidity. Funds from operations
presented herein is not necessarily comparable to Funds from operations
presented by other real estate companies due to the fact that not all real
estate companies use the same definition. However, the Company's funds
from operations is comparable to the funds from operations of real estate
companies that use the current definition of the National Association of
Real Estate Investment Trusts ("NAREIT"), after the adjustment for
straight-lining of rents.
48
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
49
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Mack-Cali Realty Corporation and Subsidiaries
The following discussion should be read in conjunction with the Consolidated
Financial Statements of Mack-Cali Realty Corporation and the notes thereto.
The following comparisons for the year ended December 31, 1997 ("1997"),
as compared to the year ended December 31, 1996 ("1996") and for 1996, as
compared to the year ended December 31, 1995 ("1995") make reference to the
following: (i) the effect of the "Same-Store Properties," which represent all
properties owned by the Company at December 31, 1995 (for the 1997 versus 1996
comparison), and which represents all properties owned by the Company at
December 31, 1994 (for the 1996 versus 1995 comparison), (ii) the effect of the
acquisition of the RM Properties on January 31, 1997 (iii) the effect of the
acquisition of the Mack Properties on December 11, 1997, (iv) the effect of the
"Acquired Properties," which represent all properties acquired by the Company
from January 1, 1996 through December 31, 1997 excluding the RM Properties and
the Mack Properties, (for the 1997 versus 1996 comparison), and which represent
all properties acquired by the Company from January 1, 1995 through December 31,
1996 (for the 1996 versus 1995 comparison), and (v) the effect of the
"Disposition," which refers to the Company's sale of its Essex Road property on
March 20, 1996.
Year Ended December 31, 1997 Compared to Year Ended December 31, 1996
Total revenues increased $154.3 million, or 161.6 percent, for 1997 over 1996.
Base rents increased $129.3 million, or 168.1 percent, of which an increase of
$61.4 million, or 79.7 percent, was attributable to the Acquired Properties, an
increase of $58.4 million, or 75.9 percent, due to the RM Properties, an
increase of $8.0 million, or 10.4 percent, due to the Mack Properties and an
increase of $1.8 million, or 2.4 percent, due to occupancy and rental rate
changes at the Same-Store Properties, offset by a decrease of $0.3 million, or
0.3 percent, due to the Disposition. Escalations and recoveries increased $16.7
million, or 115.7 percent, of which an increase of $11.2 million, or 77.4
percent, was attributable to the Acquired Properties, an increase of $4.9
million, or 34.2 percent, due to the RM Properties, an increase of $0.5 million,
or 3.7 percent, due to the Mack Properties, and an increase of $0.1 million, or
0.4 percent, due to occupancy changes at the Same-Store Properties. Parking and
other income increased $4.7 million, or 213.5 percent, of which $4.0 million, or
182.1 percent, was attributable to the RM Properties and $0.8 million, or 37.6
percent, was attributable to the Acquired Properties, offset by a decrease of
$0.1 million, or 6.2 percent, due to the Same-Store Properties. Interest income
increased $3.6 million, or 189.3 percent, due primarily to investment of the
funds held from the Company's October 1997 common stock offering.
Total expenses for 1997 increased $149.4 million, or 233.7 percent, as
compared to 1996. Real estate taxes increased $16.6 million, or 176.7 percent,
for 1997 over 1996, of which an increase of $6.6 million, or 69.6 percent, was
attributable to the Acquired Properties, an increase of $9.0 million, or 95.9
percent, due to the RM Properties, an increase of $0.6 million, or 6.6 percent,
due to the Mack Properties, and an increase of $0.5 million, or 5.1 percent,
attributable to the Same-Store Properties, offset by a decrease of $0.1 million,
or 0.5 percent, due to the Disposition. Additionally, operating services
increased $18.7 million, or 154.9 percent, and utilities increased $10.1
million, or 124.2 percent, for 1997 over 1996. The aggregate increase in
operating services and utilities of $28.8 million, or 142.6 percent, consists of
$15.5 million, or 76.7 percent, attributable to the Acquired Properties, an
increase of $12.9 million, or 63.8 percent, due to the RM Properties, and an
increase of $1.7 million, or 8.2 percent, due to the Mack Properties, offset by
a decrease of $1.1 million, or 5.3 percent, attributable to the Same-Store
Properties and a decrease of $0.2 million, or 0.8 percent, due to the
Disposition. General and administrative expense increased $10.1 million, or
173.5 percent, of which $7.1 million, or 121.1 percent, is due primarily to an
increase in payroll and related costs as a result of the Company's expansion in
late 1996 and 1997 and $3.0 million, or 52.4 percent, is attributable to
additional costs related to the RM Properties. Depreciation and amortization
increased $22.1 million, or 150.0 percent, for 1997 over 1996, of which $10.4
million, or 70.4 percent, relates to depreciation on the Acquired Properties, an
increase of $10.0 million, or 67.7 percent, attributable to the RM Properties,
an increase of $1.0 million, or 6.6 percent, due to the Mack Properties, and an
increase of $0.8 million, or 5.8 percent, due to the Same-Store Properties,
offset by a decrease of $0.1 million, or 0.5 percent, due to the Disposition.
Interest expense increased $25.3 million, or 184.0 percent, for 1997 over 1996,
of which $12.2 million, or 88.6 percent, was attributable to the TIAA Mortgage,
$9.1 million, or 66.5 percent, due to the Harborside Mortgages, an increase of
$1.4 million, or 9.9 percent, due to assumed mortgages from the Mack Properties,
and an increase of $8.3 million, or 60.1 percent, due to net additional drawings
from the Company's credit facilities as a result of Company acquisitions and the
$200 million Prudential Term Loan obtained in December 1997, as well as changes
in LIBOR, offset by a decrease of $5.7 million, or 41.1 percent, due to the
August 1997 prepayment of the Mortgage Financing. Non-recurring merger-related
charges of $46.5 million were incurred in 1997, as a result of the Mack
Transaction.
50
<PAGE>
MD&A
Mack-Cali Realty Corporation and Subsidiaries
Income before gain on sale of rental property, minority interest, and
extraordinary items increased to $36.4 million in 1997 from $31.5 million in
1996. The increase of $4.9 million was due to the factors discussed above.
Net income decreased $30.5 million for 1997, from $31.9 million in 1996 to
$1.4 million in 1997, primarily as a result of an increase in income allocable
to minority interests of $26.6 million, including the effect of the beneficial
conversion feature and distributions to preferred unitholders (See Note 13 to
Financial Statements). Net income was also effected by a gain on the sale of the
Disposition property of $5.7 million in 1996 and the recognition in 1997 of an
extraordinary loss of $3.6 million (net of minority interest's share of $0.4
million), offset by an increase in income before gain on sale of rental
property, minority interest and extraordinary item of $4.9 million, and the
recognition in 1996 of an extraordinary loss of $0.5 million (net of minority
interest's share of $0.1 million.)
Year Ended December 31, 1996 Compared to Year Ended December 31, 1995
Total revenues increased $33.1 million, or 53.2 percent, for 1996 over 1995.
Base rents increased $26.1 million, or 51.4 percent, of which an increase of
$26.4 million, or 52.0 percent, was attributable to the Acquired Properties, and
an increase of $0.9 million, or 1.8 percent, as a result of occupancy changes at
the Same-Store Properties, offset by a decrease of $1.2 million, or 2.4 percent,
as a result of the Disposition. Escalations and recoveries increased $4.9
million, or 51.8 percent, of which an increase of $4.6 million, or 49.0 percent,
was attributable to the Acquired Properties, and $0.4 million, or 4.0 percent,
as a result of occupancy changes at the Same-Store Properties, offset by a
decrease of $0.1 million, or 1.2 percent, due to the Disposition. Parking and
other income increased $0.5 million, or 29.5 percent, of which $0.3 million, or
17.9 percent, was attributable to the Same-Store Properties, and $0.3 million,
or 15.9 percent, due to the Acquired Properties, offset by a decrease of $0.1
million, or 4.3 percent, due to the Disposition. Interest income increased $1.6
million for 1996 over 1995, due primarily to the funds held at December 31, 1996
from the Company's common stock offering in November 1996.
Total expenses for 1996 increased $18.7 million, or 41.5 percent, as
compared to 1995. Real estate taxes increased $3.5 million, or 60.4 percent, for
1996 over 1995, of which $3.6 million, or 60.9 percent, was a result of the
Acquired Properties, and $0.1 million, or 2.6 percent, related to the Same-Store
Properties, offset by a decrease of $0.2 million, or 3.1 percent, due to the
Disposition. Additionally, operating services increased $3.6 million, or 42.4
percent, and utilities increased $1.8 million, or 28.6 percent. The aggregate
increase in operating services and utilities of $5.4 million, or 36.5 percent,
consists of $5.9 million, or 39.9 percent, attributable to the Acquired
Properties, offset by a decrease of $0.5 million, or 3.4 percent, as a result of
the Disposition. General and administrative expense increased $2.1 million, or
56.3 percent, of which $2.2 million, or 57.5 percent, is primarily attributable
to an increase in payroll and related costs as a result of the Company's
expansion in 1996, offset by a decrease of $0.1 million, or 1.2 percent, due to
the Disposition. Depreciation and amortization increased $4.1 million, or 38.3
percent, for 1996 over 1995, of which $4.4 million, or 41.8 percent, related to
depreciation on the Acquired Properties, offset by decreases of $0.1 million, or
1.3 percent, for amortization of deferred financing costs due to reduction in
debt outstanding on the Same-Store Properties, and $0.2 million, or 2.2 percent,
as a result of the Disposition. Interest expense increased $3.6 million, or 36.0
percent, primarily due to an increase in the average outstanding borrowings on
the Company's credit facilities during 1996 over 1995 in connection with an
increase in property acquisitions, as well as the increase in mortgage
indebtedness assumed in connection with the acquisition of Harborside.
Income before gain on sale of rental property, minority interest and
extraordinary item increased to $31.5 million in 1996 from $17.1 million in
1995. The increase of $14.4 million was due to the factors discussed above.
Net income increased $18.3 million for 1996, from $13.6 million in 1995 to
$31.9 million in 1996, as a result of an increased in income before gain on sale
of property, minority interest and extraordinary item of $14.4 million and a
gain on sale of the Disposition property of $5.7 million, offset by the increase
in minority interest of $1.3 million and the recognition in 1996 of an
extraordinary loss for the early retirement of debt of $0.5 million (net of
minority interest's share of $0.1 million).
Liquidity and Capital Resources
Statement of Cash Flows
During the year ended December 31, 1997, the Company generated $98.1 million in
cash flows from operating activities, and together with $489.1 million in net
proceeds from the Company's 13 million share offering in October 1997, $469.2
million in borrowings from the Company's credit facilities, $202.1 million from
the Company's cash reserves, $200.0 million in proceeds from a short-term
mortgage loan, $7.2 million of proceeds from stock options exercised, and $1.1
million from restricted cash, used an aggregate of $1.47 billion to purchase 132
51
<PAGE>
properties and pay for other tenant improvements and building improvements for
$929.0 million, repay outstanding borrowings on its credit facilities and other
mortgage debt of $441.8 million, pay quarterly dividends and distributions of
$74.5 million, provide $11.6 million for a Mortgage Note Receivable, repurchase
152,000 shares of the Company's common stock for $4.7 million, pay financing
costs of $3.1 million, pay debt prepayment and other costs of $1.8 million and
pay the amortization on mortgage principal of $0.4 million.
Capitalization
On August 13, 1996 the Company sold 3,450,000 shares of its common stock through
a public stock offering (the "August 1996 Offering"). Net proceeds from the
August 1996 Offering (after offering costs) were approximately $76.8 million.
On November 4, 1996, the Company obtained a revolving credit facility
("Second Prudential Facility") from PSC currently totaling $100 million which
bears interest at 110 basis points over one-month LIBOR, and matures on March
31, 1999. The Second Prudential Facility is a recourse liability of the
Operating Partnership and is secured by the Company's equity interest in
Harborside. The terms of the Second Prudential Facility include certain
restrictions and covenants that limit, among other things, dividend payments and
additional indebtedness and that require compliance with specified financial
ratios and other financial measurements.
In addition, on November 4, 1996, the Company assumed existing debt and
was provided seller-financed mortgage debt aggregating $150 million in
connection with the Harborside acquisition (see Note 7 to the Financial
Statements).
On November 22, 1996, the Company completed an underwritten public offer
and sale of 17,537,500 shares of its common stock using several different
underwriters to underwrite such public offer and sale (which included an
exercise of the underwriters' over-allotment option of 2,287,500 shares). The
Company received approximately $441.2 million in net proceeds (after offering
costs) from the offering, and used such funds to complete certain of the
Company's property acquisitions in November and December 1996, pay down
outstanding borrowings on its revolving credit facilities, and invest in
Overnight Investments.
In connection with the RM Transaction on January 31, 1997, the Company
assumed a $185.3 million non-recourse mortgage loan with TIAA (see Note 7 to the
Financial Statements).
From April 18, 1997 through April 24, 1997, the Company purchased, for
constructive retirement, 152,000 shares of its outstanding common stock for $4.7
million. Concurrent with this purchase, the Company sold to the Operating
Partnership 152,000 Common Units for $4.7 million.
On May 15, 1997, the stockholders approved an increase in the authorized
shares of common stock in the Company from 95 million to 190 million.
On August 6, 1997, the Company obtained an unsecured revolving credit
facility (the "Unsecured Facility") in the amount of $400 million from a group
of 13 lender banks. The Unsecured Facility has a three-year term and currently
bears interest at 125 basis points over one-month LIBOR. Based upon the
Company's achievement of an investment grade long-term unsecured debt rating,
the interest rate will be reduced, on a sliding scale, and a competitive bid
option will become available.
The lending group for the Unsecured Facility consist of: Fleet National
Bank, The Chase Manhattan Bank, and Bankers Trust Company, as agents; PNC Bank,
N.A., Bank of America National Trust and Savings Association, Commerzbank AG,
and The First National Bank of Chicago, as co-agents; and KeyBank, Summit Bank,
Crestar Bank, Mellon Bank, N.A., Signet Bank, and KredietBank NV.
In conjunction with the Company obtaining the Unsecured Facility, the
Company drew funds on the new facility to repay in full and terminate both the
First Prudential Facility and the Bank Facility. The Company drew an additional
$70 million to repay in full the outstanding balance under the Second Prudential
Facility.
On August 12, 1997, the Company prepaid in full and retired the secured
Mortgage Financing from funds made available primarily from drawing on the
Unsecured Facility (see Note 7 to the Financial Statements).
With the Mack Transaction on December 11, 1997, the Company assumed an
aggregate of approximately $291.9 million of mortgage indebtedness with eight
separate lenders, encumbering 17 of the Mack Properties (the "Mack Mortgages").
Such debt matures at various dates from March 1998 through January 2009. The
Mack Mortgages are comprised of an aggregate of approximately $199.9 million of
fixed rate debt bearing interest at a weighted average rate of approximately
7.66 percent per annum, certain of which require monthly principal amortization
payments, and an aggregate of approximately $92.0 million in variable rate debt
bearing interest at a weighted average floating rate of approximately 76 basis
points over LIBOR (see Note 7 to the Financial Statements).
On December 10, 1997, the Company obtained a $200 million term loan from
PSC (the "Prudential Term Loans"). The proceeds of the loan were used to fund a
portion of the cash consideration in completion of the Mack Transaction. The
loan has a one-year term and interest payments are required monthly at an
interest rate of 110 basis points over one-month LIBOR. The loan is a recourse
loan secured by 11 properties owned by the Company and located in New Jersey.
52
<PAGE>
MD&A
Mack-Cali Realty Corporation and Subsidiaries
On October 15, 1997, the Company completed an underwritten public offer
and sale of 13,000,000 shares of its common stock (the "1997 Offering"), from
which the Company received approximately $489.1 million in net proceeds (after
offering costs). The Company used $160 million of such proceeds to repay
outstanding borrowings on its Unsecured Facility and the remainder of the
proceeds to fund a portion of the purchase price of the Mack Transaction, for
other acquisitions, and for general corporate purposes.
On February 25, 1998, the Company completed an underwritten public offer
and sale of 2,500,000 shares of its common stock using one underwriter. The
Company used the net proceeds, which totaled approximately $92.0 million (after
offering costs) to make a partial paydown of outstanding borrowings under the
Unsecured Facility and to fund the acquisition of Mountainview.
Following the February 1998 stock offering, the Company has approximately
$2.4 billion in availability under its effective equity shelf registrations.
As of December 31, 1997, the Company had 114 unencumbered properties,
totaling 11.3 million square feet, representing approximately 51.2 percent of
the Company's year-end portfolio.
Historically, rental revenue has been the principal source of funds to pay
operating expenses, debt service and capital expenditures, excluding
non-recurring capital expenditures. Management believes that the Company will
have access to the capital resources necessary to expand and develop its
business. To the extent that the Company's cash flow from operating activities
is insufficient to finance its non-recurring capital expenditures such as
property acquisition costs and other capital expenditures, the Company expects
to finance such activities through borrowings under its credit facilities and
other debt and equity financing.
The Company expects to meet its short-term liquidity requirements
generally through its working capital and net cash provided by operating
activities, along with the Second Prudential Facility and the Unsecured
Facility. The Company is frequently examining potential property acquisitions
and, at any given time, one or more of such acquisitions may be under
consideration. Accordingly, the ability to fund property acquisitions is a major
part of the Company's financing requirements. The Company expects to meet its
financing requirements through funds generated from operating activities,
long-term or short term borrowings (including draws on the Company's credit
facilities) and the issuance of debt securities or additional equity securities.
In addition, the Company anticipates utilizing the Second Prudential Facility
and the Unsecured Facility primarily to fund property acquisition activities.
The Company does not intend to reserve funds to retire the existing TIAA
Mortgage, Harborside Mortgages, Mack Mortgages, and borrowings under the
revolving credit facilities or other long-term mortgages and loans payable upon
maturity. Instead, the Company will seek to refinance such debt at maturity or
retire such debt through the issuance of additional equity or debt securities.
The Company anticipates that its available cash and cash equivalents and cash
flows from operating activities, together with cash available from borrowings
and other sources, will be adequate to meet the Company's capital and liquidity
needs both in the short and long-term. However, if these sources of funds are
insufficient or unavailable, the Company's ability to make the expected
distribution discussed below may be adversely affected.
To maintain its qualification as a REIT, the Company must make annual
dividend payments to its stockholders of at least 95 percent of its REIT taxable
income, determined without regard to the dividends paid deduction and by
excluding net capital gains. Moreover, the Company intends to continue to make
regular quarterly dividend payments to its stockholders which, based upon
current policy, in the aggregate would equal approximately $104.9 million on an
annualized basis, as well as quarterly distributions to unitholders. However,
any such dividend or distribution, whether for federal income tax purposes or
otherwise, would only be paid out of available cash after meeting both operating
requirements and scheduled debt service on mortgages and loans payable.
Funds from Operations
The Company considers funds from operations, (after adjustment for
straight-lining of rents), one measure of REIT performance. Funds from
operations is defined as net income (loss) before minority interest of
unitholders (preferred and common), computed in accordance with Generally
Accepted Accounting Principles ("GAAP"), excluding gains (or losses) from debt
restructuring, other extraordinary and significant non-recurring items, and
sales of property, plus real estate-related depreciation and amortization. Funds
from operations should not be considered as an alternative to net income as an
indication of the Company's performance or to cash flows as a measure of
liquidity.
53
<PAGE>
MD&A
Mack-Cali Realty Corporation and Subsidiaries
Funds from operations for the year ended December 31, 1997, 1996, and
1995, calculated in accordance with the National Association of Real Estate
Investment Trusts' ("NAREIT") definition published in March 1995, are summarized
in the following table:
- --------------------------------------------------------------------------------
In thousands
Year Ended December 31, 1997 1996 1995
================================================================================
Income before non-recurring
merger-related charges, gain
on sale of rental property,
distribution to preferred
unitholders, minority interest,
and extraordinary item $ 82,886 $ 31,521 $ 17,146
Add: Real estate-related
depreciation and amortization 36,599 14,677 10,563
Deduct: Rental income
adjustment for straight-lining
of rents (7,733) (978) (312)
- --------------------------------------------------------------------------------
Funds from operations after
adjustment for straight-lining of
rents and before distributions
to preferred unitholders $ 111,752 $ 45,220 $ 27,397
Deduct: Distribution to preferred
unitholders (888) -- --
- --------------------------------------------------------------------------------
Funds from operations after
adjustment for straight-lining
of rents $ 110,864 $ 45,220 $ 27,397
================================================================================
Fully-converted weighted average
shares/units outstanding(1) 43,739 21,171 13,986
- --------------------------------------------------------------------------------
Weighted average shares/units
outstanding(2) 43,356 21,171 13,986
================================================================================
(1) Assumes redemption/conversion of all outstanding units (both preferred and
common), calculated on a weighted average basis, for shares of common
stock in the Company.
(2) Assumes redemption of all common units, calculated on a weighted average
basis, for shares of common stock in the Company.
Inflation
The Company's leases with the majority of its tenants provide for recoveries and
escalation charges based upon the tenant's proportionate share of, and/or
increases in, real estate taxes and certain operating costs, which reduce the
Company's exposure to increases in operating costs resulting from inflation.
Disclosure Regarding Forward-Looking Statements
The Company considers portions of this information to be forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of The Securities Exchange Act of 1934. Although the Company
believes that the expectations reflected in such forward-looking statements are
based upon reasonable assumptions, it can give no assurance that its
expectations will be achieved.
54
<PAGE>
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The response to this item is submitted as a separate section of this Form 10-K.
See Item 14.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
56
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by Item 10 is incorporated by reference from the
Company's definitive proxy statement, dated March 31, 1998, for its annual
meeting of shareholders to be held on May 21, 1998.
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 is incorporated by reference from the
Company's definitive proxy statement, dated March 31, 1998, for its annual
meeting of shareholders to be held on May 21, 1998.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by Item 12 is incorporated by reference from the
Company's definitive proxy statement, dated March 31, 1998, for its annual
meeting of shareholders to be held on May 21, 1998.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by Item 13 is incorporated by reference from the
Company's definitive proxy statement, dated March 31, 1998, for its annual
meeting of shareholders to be held on May 21, 1998.
57
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. Financial Statements and Report of Price Waterhouse LLP, Independent
Accountants
Consolidated Balance Sheets:
Consolidated as of December 31, 1997 and 1996
Consolidated Statements of Operations:
Consolidated for the Years Ended December 31, 1997, 1996 and 1995
Consolidated Statements of Changes in Stockholders' Equity:
Consolidated for the Years Ended December 31, 1997, 1996 and 1995
Consolidated Statements of Cash Flows:
Consolidated for the Years Ended December 31, 1997, 1996 and 1995
Notes to Consolidated Financial Statements
(a) 2. Financial Statement Schedules
Schedule III - Real Estate Investments and Accumulated
Depreciation as of December 31, 1997
All other schedules are omitted because they are not required or the
required information is shown in the financial statements or notes
thereto.
(a) 3. Exhibits
The following exhibits are filed herewith or are incorporated by
reference to exhibits previously filed:
58
<PAGE>
EXHIBIT INDEX:
Exhibit
Number Exhibit Title
- ------ -------------
10.99 First Amendment to Contribution and Exchange Agreement, dated as
of December 11, 1997 by and among the Company and the Mack Group
(1)
10.100 Certificate of Designation of Series A Preferred Operating
Partnership Units of Limited Partnership Interest of Mack-Cali
Realty, L.P. (1)
10.101 Certificate of Designation of Series B Preferred Operating
Partnership Units of Limited Partnership Interest of Mack- Cali
Realty, L.P. (1)
10.102 Certificate of Designation of Contingent Non-Participating
Common Operating Partnership Units of Limited Partnership
Interest of Mack- Cali Realty, L.P. (1)
10.103 Certificate of Designation of Series A Contingent
Non-Participating Preferred Operating Partnership Units of
Limited Partnership Interest of Mack- Cali Realty, L.P. (1)
10.104 Certificate of Designation of Series B Contingent
Non-Participating Preferred Operating Partnership Units of
Limited Partnership Interest of Mack- Cali Realty, L.P. (1)
10.105 Form of Warrant Agreement to purchase Common Operating
Partnership Units of Limited Partnership Interest of Mack- Cali
Realty, L.P. (1)
10.106 Warrant Agreement, dated December 12, 1997, executed in favor
Mitchell E. Hersh to purchase shares of common stock (Common
Stock), par value $.01 per share, of Mack-Cali Realty
Corporation (1)
10.107 Warrant Agreement, dated December 12, 1997, executed in favor
James Mertz to purchase shares of Common Stock of Mack-Cali
Realty Corporation (1)
10.108 Warrant Agreement, dated December 12, 1997, executed in favor
James Clabby to purchase shares of Common Stock of Mack-Cali
Realty Corporation (1)
10.109 Registration Rights Agreement, dated December 11, 1997 among
Mack-Cali Realty Corporation and the investors listed therein
(1)
10.110 Second Amended and Restated Agreement of Limited Partnership,
dated December 11, 1997, for Mack-Cali Realty, L.P. (1)
10.111 Employment Agreement, dated December 11, 1997, between Mack-Cali
Realty Corporation and Mitchell E. Hersh (1)
10.112 Employment Agreement, dated December 11, 1997, between Mack-Cali
Realty Corporation and Thomas A. Rizk (1)
10.113 Employment Agreement, dated December 11, 1997, between Mack-Cali
Realty Corporation and Brant Cali (1)
10.114 Employment Agreement, dated December 11, 1997, between Mack-Cali
Realty Corporation and John R. Cali (1)
59
<PAGE>
10.115 Amended and Restated Employment Agreement, dated December 11,
1997, between Mack-Cali Realty Corporation and Roger W. Thomas
(1)
10.116 Amended and Restated Employment Agreement, dated December 11,
1997, between Mack-Cali Realty Corporation and Barry Lefkowitz
(1)
10.117 Amended and Restated Employment Agreement, dated December 11,
1997, between Mack-Cali Realty Corporation and Timothy M. Jones
(1)
10.118 Non-Competition Agreement, dated December 11, 1997, between
Mack-Cali Realty Corporation and Earle Mack (1)
10.119 Non-Competition Agreement, dated December 11, 1997, between
Mack-Cali Realty Corporation and David Mack (1)
10.120 Non-Competition Agreement, dated December 11, 1997, between
Mack-Cali Realty Corporation and Frederic Mack (1)
10.121 Non-Competition Agreement, dated December 11, 1997, between
Mack-Cali Realty Corporation and William Mack (1)
10.122 Credit Agreement, dated as of December 10, 1997, by and among
Cali Realty, L.P. and the other signatories thereto (1)
10.123 Form of Promissory Note, dated as of December 10, 1997, of Cali
Realty, L.P. in favor of Prudential Securities Credit
Corporation (1)
10.124 Mortgage, Security Agreement and assignment of Leases and Rents,
dated as of December 10, 1997, in favor of Prudential Securities
Credit Corporation (1)
10.125 Purchase and Sale Agreement dated November 19, 1997 between The
Trooper Partnership, LTD. and Cali Realty Acquisition
Corporation (2)
10.126 Contribution and Exchange Agreement among Princeton Overlook
Limited Liability Company, Cali Realty, L.P. and Cali Realty
Corporation, dated October 18, 1997
10.127 First Amendment to Contribution and Exchange Agreement among
Princeton Overlook Limited Liability Company and Cali Realty,
L.P. and Cali Realty Corporation, dated December 18, 1997
10.128 Purchase and Sale Agreement by and between The Concord Plaza
Joint Venture, as Seller, and Cali Realty Acquisition Corp., as
Buyer, dated December 19, 1997
10.129 Purchase and Sale Agreement between RMC Development Company, LLC
and Cali Stamford Realty Associates L.P., dated January 23, 1998
10.130 Agreement of Sale between John S. McGarvey, Joanne H. McGarvey,
et als., as Sellers, and Mack-Cali Realty, L.P. and Burlington
Commerce Realty Associates, L.P., as Purchasers, dated January
30, 1998
10.131 Agreement of Sale between The Moorestown Twosome and Lancer
Associates, L.L.C., as Seller, and Mack-Cali Realty, L.P., as
Purchaser, dated January 30, 1998
10.132 Agreement by and between Lancer Associates, L.L.C. and Mack-Cali
Realty, L.P., dated January 30, 1998
10.133 Loan Modification and Assumption Agreement by and among John S.
McGarvey and Joanne H. McGarvey, Mack- Cali Realty, L.P., and
Sun Life Assurance Company of Canada, dated January 30, 1998
60
<PAGE>
10.134 Note and Mortgage Modification and Assumption Agreement, dated
January 30, 1998, by and between Mack-Cali Realty, L.P. and
First Union National Bank, successor by merger to First Fidelity
Bank, National Association, and Bromley Common Associates
10.135 Loan Modification and Assumption Agreement, dated January 30,
1998, by and among Moorestown West Partnership, Mack-Cali
Realty, L.P., and Sun Life Assurance Company of Canada
10.136 Agreement of Purchase and Sale by and between Brel Associates
XIV, L.P. (Seller) and Mack-Cali Realty, L.P. (Purchaser), dated
February 2, 1998
10.137 Purchase Agreement by and between 500 West Putnam Associates,
Cecio Properties Limited Partnership, and Cali Realty
Acquisition Corporation, dated February 3, 1998
10.138 Purchase Agreement for Real Property and Escrow Instructions
between IB Brell, L.P., as Seller, and Mack-Cali Realty, L.P.,
as Buyer, dated February 4, 1998
10.139 First Amendment to Purchase Agreement for Real Property, dated
February 23, 1998, by and between IB Brell, L.P., as Seller, and
Mack-Cali Realty, L.P., as Buyer
10.140 First Amendment to Agreement of Purchase and Sale, dated March
12, 1998, by and between JMB Group Trust III, as Seller, and
Mack-Cali Realty Acquisition Corp., as Purchaser
10.141 Agreement of Purchase and Sale by and between Group Trust III,
as Seller, and Mack-Cali Realty Acquisition Corp., as Buyer,
dated January 27, 1998
10.142 Underwriting Agreement, dated October 9, 1997, by and between
Cali Realty Corporation and Prudential Securities Incorporated
10.143 Underwriting Agreement, dated February 19, 1998, by and between
Mack-Cali Realty Corporation and Prudential Securities
Incorporated
10.144 Underwriting Agreement, dated March 24, 1998, by and between
Mack-Cali Realty Corporation and Wheat First Securities, Inc.
23 Consent of Price Waterhouse LLP
27 Financial Data Schedule
- -------------------------------
(1) Incorporated by reference to the identically numbered exhibit to
the Company's Form 8-K, dated December 11, 1997.
(2) Incorporated by reference to the identically numbered exhibit to
the Company's Form 8-K, dated January 16, 1998.
- -------------------------------
(b). Reports on Form 8-K
The Company filed Current Reports on Form 8-K and 8-K/A, dated
December 11, 1997 and September 19, 1997, respectively, during
the quarter ended December 31, 1997. Items 2 and 7 were
reported.
61
<PAGE>
MACK-CALI REALTY CORPORATION
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Mack-Cali Realty Corporation
----------------------------
(Registrant)
Date: March 30, 1998 /s/ Barry Lefkowitz
------------------------------
Barry Lefkowitz
Executive Vice President
and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated:
Date: March 30, 1998 /s/ John J. Cali
------------------------------
John J. Cali
Chairman of the Board
Date: March 30, 1998 /s/ Thomas A. Rizk
------------------------------
Thomas A. Rizk
Chief Executive Officer and Director
Date: March 30, 1998 /s/ Mitchell E. Hersh
------------------------------
Mitchell E. Hersh
President, Chief Operating Officer
and Director
Date: March 30, 1998 /s/ Barry Lefkowitz
------------------------------
Barry Lefkowitz
Executive Vice President
and Chief Financial Officer
Date: March 30, 1998 /s/ Brendan T. Byrne, Esq.
------------------------------
Brendan T. Byrne, Esq.
Director
Date: March 30, 1998 /s/ Martin D. Gruss
------------------------------
Martin D. Gruss
Director
62
<PAGE>
Date: March 30, 1998 /s/ Jeffrey B. Lane
------------------------------
Jeffrey B. Lane
Director
Date: March 30, 1998 /s/ Earle I. Mack
------------------------------
Earle I. Mack
Director
Date: March 30, 1998 /s/ William L. Mack
------------------------------
William L. Mack
Director
Date: March 30, 1998 /s/ Paul A. Nussbaum
------------------------------
Paul A. Nussbaum
Director
Date: March 30, 1998 /s/ Alan G. Philibosian
------------------------------
Alan G. Philibosian
Director
Date: March 30, 1998 /s/ Dr. Irvin D. Reid
------------------------------
Dr. Irvin D. Reid
Director
Date: March 30, 1998 /s/ Vincent Tese
------------------------------
Vincent Tese
Director
Date: March 30, 1998 /s/ Robert F. Weinberg
------------------------------
Robert F. Weinberg
Director
63
<PAGE>
Report of Independent Accountants
To the Board of Directors and
Shareholders of Mack-Cali Realty Corporation
In our opinion, the consolidated financial statements listed in the index
appearing in Item 14 (a) (1) and (2) present fairly, in all material respects,
the financial position of Mack-Cali Realty Corporation and its subsidiaries at
December 31, 1997 and 1996, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 1997, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
/s/ Price Waterhouse LLP
- ------------------------
Price Waterhouse LLP
New York, New York
February 26, 1998
F-1
<PAGE>
Consolidated Balance Sheets
Mack-Cali Realty Corporation and Subsidiaries
In thousands, except per share amounts
<TABLE>
<CAPTION>
December 31, 1997 1996
=========================================================================================================
<S> <C> <C>
Assets
Rental property
Land $ 374,242 $ 98,127
Buildings and improvements 2,206,462 718,466
Tenant improvements 44,596 35,626
Furniture, fixtures and equipment 4,316 1,133
- ---------------------------------------------------------------------------------------------------------
2,629,616 853,352
Less--accumulated depreciation and amortization (103,133) (68,610)
- ---------------------------------------------------------------------------------------------------------
Total rental property 2,526,483 784,742
Cash and cash equivalents (includes $201,269 in overnight investments
at December 31, 1996) 2,704 204,807
Unbilled rents receivable 27,438 19,705
Deferred charges and other assets, net 18,989 11,840
Restricted cash 6,844 3,160
Accounts receivable, net of allowance for doubtful accounts of $327 and $189 3,736 2,074
Mortgage note receivable 7,250 --
- ---------------------------------------------------------------------------------------------------------
Total assets $ 2,593,444 $ 1,026,328
=========================================================================================================
=========================================================================================================
Liabilities and Stockholders' Equity
Mortgages and loans payable $ 972,650 $ 268,010
Dividends and distributions payable 28,089 17,554
Accounts payable and accrued expenses 31,136 5,068
Rents received in advance and security deposits 21,395 6,025
Accrued interest payable 3,489 1,328
- ---------------------------------------------------------------------------------------------------------
Total liabilities 1,056,759 297,985
- ---------------------------------------------------------------------------------------------------------
Minority interest of unitholders in Operating Partnership 379,245 26,964
- ---------------------------------------------------------------------------------------------------------
Commitments and contingencies
Stockholders' equity:
Preferred stock, 5,000,000 shares authorized, none issued
Common stock, $.01 par value, 190,000,000 shares authorized,
49,856,289 and 36,318,937 shares outstanding 499 363
Additional paid-in capital 1,244,883 714,052
Dividends in excess of net earnings (87,942) (13,036)
- ---------------------------------------------------------------------------------------------------------
Total stockholders' equity 1,157,440 701,379
- ---------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 2,593,444 $ 1,026,328
=========================================================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-2
<PAGE>
Consolidated Statements of Operations
Mack-Cali Realty Corporation and Subsidiaries
<TABLE>
<CAPTION>
In thousands, except per share amounts
Year Ended December 31, 1997 1996 1995
======================================================================================================
<S> <C> <C> <C>
Revenues
Base rents $ 206,215 $ 76,922 $ 50,808
Escalations and recoveries from tenants 31,130 14,429 9,504
Parking and other 6,910 2,204 1,702
Interest income 5,546 1,917 321
- ------------------------------------------------------------------------------------------------------
Total revenues 249,801 95,472 62,335
- ------------------------------------------------------------------------------------------------------
======================================================================================================
Expenses
Real estate taxes 25,992 9,395 5,856
Utilities 18,246 8,138 6,330
Operating services 30,912 12,129 8,519
General and administrative 15,862 5,800 3,712
Depreciation and amortization 36,825 14,731 10,655
Interest expense 39,078 13,758 10,117
Non-recurring merger-related charges 46,519 -- --
- ------------------------------------------------------------------------------------------------------
Total expenses 213,434 63,951 45,189
- ------------------------------------------------------------------------------------------------------
Income before gain on sale of rental property, minority interest
and extraordinary item 36,367 31,521 17,146
Gain on sale of rental property -- 5,658 --
- ------------------------------------------------------------------------------------------------------
Income before minority interest and extraordinary item 36,367 37,179 17,146
Minority interest 31,379 4,760 3,508
- ------------------------------------------------------------------------------------------------------
Income before extraordinary item 4,988 32,419 13,638
Extraordinary item--loss on early retirement of debt
(net of minority interest's share of $402 and $86) (3,583) (475) --
- ------------------------------------------------------------------------------------------------------
Net income $ 1,405 $ 31,944 $ 13,638
======================================================================================================
Basic earnings per share:
Income before extraordinary item $ 0.13 $ 1.76 $ 1.23
Extraordinary item (0.09) (0.03) --
- ------------------------------------------------------------------------------------------------------
Net income $ 0.04 $ 1.73 $ 1.23
======================================================================================================
Diluted earnings per share:
Income before extraordinary item $ 0.12 $ 1.73 $ 1.22
Extraordinary item (0.08) (0.02) --
- ------------------------------------------------------------------------------------------------------
Net income $ 0.04 $ 1.71 $ 1.22
======================================================================================================
Dividends declared per common share $ 1.90 $ 1.75 $ 1.66
- ------------------------------------------------------------------------------------------------------
Basic weighted average shares outstanding 39,266 18,461 11,122
Diluted weighted average shares outstanding 44,156 21,436 14,041
======================================================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-3
<PAGE>
Consolidated Statement of Changes in Stockholders' Equity
Mack-Cali Realty Corporation and Subsidiaries
<TABLE>
<CAPTION>
Retained
Earnings
Additional (Dividends in Unamortized Total
Common Stock Paid-In Excess of Stock Stockholders'
In thousands Shares Par Value Capital Net Earnings) Compensation Equity
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1995 10,500 $ 105 $ 109,920 $ (1,714) -- $ 108,311
Net income -- -- -- 13,638 -- 13,638
Dividends -- -- -- (19,238) -- (19,238)
Net proceeds from common stock offering 4,600 46 83,548 -- -- 83,594
Purchase of treasury stock (100) (1) (1,594) -- -- (1,595)
Conversion of Units to shares of
common stock 105 1 1,097 -- -- 1,098
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1995 15,105 151 192,971 (7,314) -- 185,808
Net income -- -- -- 31,944 -- 31,944
Dividends -- -- -- (37,666) -- (37,666)
Net proceeds from common stock offerings 20,987 210 518,009 -- -- 518,219
Conversion of Units to shares of
common stock 101 1 1,072 -- -- 1,073
Proceeds from stock options exercised 126 1 2,000 -- -- 2,001
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1996 36,319 363 714,052 (13,036) -- 701,379
Net income -- -- -- 1,405 -- 1,405
Dividends -- -- -- (76,311) -- (76,311)
Net proceeds from common stock offering 13,000 130 488,986 -- -- 489,116
Issuance of Stock Award Rights
and Stock Purchase Rights 351 4 12,522 -- (12,526) --
Amortization of stock compensation -- -- -- -- 12,526 12,526
Beneficial conversion feature -- -- 26,801 -- -- 26,801
Purchase of treasury stock (152) (2) (4,678) -- -- (4,680)
Conversion of Units to shares of
common stock 1 -- 17 -- -- 17
Proceeds from stock options exercised 337 4 7,183 -- -- 7,187
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1997 49,856 $ 499 $ 1,244,883 $ (87,942) -- $ 1,157,440
====================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-4
<PAGE>
Consolidated Statements of Cash Flows
Mack-Cali Realty Corporation and Subsidiaries
<TABLE>
<CAPTION>
In thousands
Year Ended December 31, 1997 1996 1995
===========================================================================================================
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net income $ 1,405 $ 31,944 $ 13,638
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 36,825 14,731 10,655
Amortization of deferred financing costs 983 1,081 1,456
Amortization of stock compensation 12,526 -- --
Gain on sale of rental property -- (5,658) --
Minority interest 31,379 4,760 3,508
Extraordinary item-loss on early retirement of debt 3,583 475 --
Changes in operating assets and liabilities:
Increase in unbilled rents receivable (7,733) (979) (312)
Increase in deferred charges and other assets, net (9,507) (4,335) (1,678)
Increase in accounts receivable, net (1,663) (629) (99)
Increase in accounts payable and accrued expenses 17,569 1,823 35
Increase in rents received in advance and
security deposits 10,614 2,911 878
Increase in accrued interest payable 2,161 699 365
- -----------------------------------------------------------------------------------------------------------
Net cash provided by operating activities $ 98,142 $ 46,823 $ 28,446
===========================================================================================================
===========================================================================================================
Cash Flows from Investing Activities
Additions to rental property $(928,974) $(318,145) $(133,489)
Issuance of mortgage note receivable (11,600) -- --
Proceeds from sale of rental property -- 10,324 --
Decrease (increase) in restricted cash 1,073 69 (247)
- -----------------------------------------------------------------------------------------------------------
Net cash used in investing activities $(939,501) $(307,752) $(133,736)
===========================================================================================================
===========================================================================================================
Cash Flows from Financing Activities
Proceeds from mortgages and loans payable $ 669,180 $ 272,113 $ 60,402
Repayments of mortgages and loans payable (442,185) (294,819) (20,702)
Payment of financing costs (3,095) -- (102)
Debt prepayment premiums and other costs (1,812) (312) --
Purchase of treasury stock (4,680) -- (1,595)
Net proceeds from common stock offerings 489,116 518,219 83,594
Proceeds from stock options exercised 7,187 2,001 --
Payment of dividends and distributions (74,455) (32,433) (21,734)
- -----------------------------------------------------------------------------------------------------------
Net cash provided by financing activities $ 639,256 $ 464,769 $ 99,863
===========================================================================================================
Net (decrease) increase in cash and cash equivalents $(202,103) $ 203,840 $ (5,427)
Cash and cash equivalents, beginning of period 204,807 967 6,394
- -----------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 2,704 $ 204,807 $ 967
===========================================================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-5
<PAGE>
Notes to Consolidated Financial Statements
Mack-Cali Realty Corporation and Subsidiaries
(dollars in thousands, except per share or unit amounts)
1) Organization and Basis of Presentation
Organization
Mack-Cali Realty Corporation, (previously Cali Realty Corporation) a Maryland
corporation, and subsidiaries (the "Company") is a fully-integrated,
self-administered, self-managed real estate investment trust ("REIT") providing
leasing, management, acquisition, development, construction and tenant-related
services for its properties. As of December 31, 1997, the Company owned and
operated 189 properties (the "Properties") aggregating approximately 22.0
million square feet, consisting of 177 office and office/flex buildings totaling
approximately 21.6 million square feet, six industrial/warehouse buildings
totaling approximately 387,000 square feet, two multi-family residential
complexes consisting of 453 units, two stand-alone retail properties and two
land leases. The Properties are located in ten states, primarily in the
Northeast and Southwest.
Basis of Presentation
The accompanying consolidated financial statements include all accounts of the
Company and its majority-owned subsidiaries, which consist principally of
Mack-Cali Realty, L.P. (the "Operating Partnership"). All significant
intercompany accounts and transactions have been eliminated.
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
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
2) Significant Accounting Policies
Rental Property - Rental properties are stated at cost less accumulated
depreciation and amortization. Costs directly related to the acquisition and
development of rental properties are capitalized. Capitalized development costs
include interest, property taxes, insurance and other project costs incurred
during the period of construction. Ordinary repairs and maintenance are expensed
as incurred; major replacements and betterments, which improve or extend the
life of the asset, are capitalized and depreciated over their estimated useful
lives. Fully-depreciated assets are removed from the accounts.
Depreciation and amortization is computed on a straight-line basis over
the estimated useful lives of the assets as follows:
- --------------------------------------------------------------------------------
Buildings and improvements 5 to 40 years
- --------------------------------------------------------------------------------
Tenant improvements The shorter of the term of
the related lease or useful life
- --------------------------------------------------------------------------------
Furniture, fixtures and equipment 5 to 10 years
- --------------------------------------------------------------------------------
On a periodic basis, management assesses whether there are any indicators
that the value of the real estate properties may be impaired. A property's value
is impaired only if management's estimate of the aggregate future cash flows
(undiscounted and without interest charges) to be generated by the property are
less than the carrying value of the property. Management does not believe that
the value of any of its rental properties is impaired.
Cash and Cash Equivalents - All highly liquid investments with a maturity of
three months or less when purchased are considered to be cash equivalents. At
December 31, 1996, cash and cash equivalents included investments in overnight
reverse repurchase agreements ("Overnight Investments") totaling $201,269.
Investments in Overnight Investments are subject to the risks that the
counter-party will default and the collateral will decline in market value. The
Overnight Investments held by the Company at December 31, 1996 matured on
January 2, 1997. The entire balance, including interest income earned, was
realized by the Company and ultimately used in the funding of the RM Transaction
on January 31, 1997 (see Note 3).
Deferred Financing Costs - Costs incurred in obtaining financing are capitalized
and amortized on a straight-line basis, which approximates the effective
interest method, over the term of the related indebtedness. Amortization of such
costs is included in interest expense and was $983, $1,081 and $1,456 for the
years ended December 31, 1997, 1996 and 1995, respectively.
Deferred Leasing Costs - Costs incurred in connection with leases are
capitalized and amortized on a straight-line basis over the terms of the related
leases and are included in depreciation and amortization. Unamortized deferred
leasing costs are charged to amortization expense upon early termination of the
lease. Certain employees of the Operating Partnership provide leasing services
to the Properties and receive fees as compensation ranging from 0.667 percent to
2.667 percent of adjusted rents. For the years ended December 31, 1997, 1996 and
1995, such fees, which are capitalized and amortized, approximated $761, $490
and $575, respectively.
Revenue Recognition - The Company recognizes base rental revenue on a
straight-line basis over the terms of the respective leases. Unbilled rents
receivable represents the amount by which straight-line rental revenue exceeds
rents currently billed in accordance with the lease agreements. Parking revenue
includes income from parking spaces leased to tenants. Rental income on
multi-family residential property under operating leases having terms generally
of one year or less is recognized when earned.
F-6
<PAGE>
The Company receives reimbursements from tenants for certain costs as
provided in the lease agreements. These costs generally include real estate
taxes, utilities, insurance, common area maintenance and other recoverable costs
(see Note 12).
Income and Other Taxes - The Company has elected to be taxed as a REIT under
Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the
"Code"). As a REIT, the Company generally will not be subject to federal income
tax to the extent it distributes at least 95 percent of its REIT taxable income
to its shareholders and satisfies certain other requirements. REITs are subject
to a number of organizational and operational requirements. If the Company fails
to qualify as a REIT in any taxable year, the Company will be subject to federal
income tax (including any applicable alternative minimum tax) on its taxable
income at regular corporate tax rates. The Company is subject to certain state
and local taxes.
Interest Rate Contracts - Interest rate contracts are utilized by the Company to
reduce interest rate risks. The Company does not hold or issue derivative
financial instruments for trading purposes.
The differentials to be received or paid under contracts designated as
hedges are recognized in income over the life of the contracts as adjustments to
interest expense. Gains and losses are deferred and amortized to interest
expense over the remaining life of the associated debt to the extent that such
debt remains outstanding.
Earnings Per Share - In accordance with Statement of Financial Accounting
Standards No. 128 ("FASB No. 128") the Company presents both basic and diluted
earnings per share ("EPS"). Basic EPS excludes dilution and is computed by
dividing net income available to common stockholders by the weighted average
number of shares outstanding for the period. Diluted EPS reflects the potential
dilution that could occur if securities or other contracts to issue common stock
were exercised or converted into common stock, where such exercise or conversion
would result in a lower EPS amount. FASB No. 128 is effective for the year ended
December 31, 1997, and all prior annual and quarterly periods have been
restated.
Dividends and Distributions Payable - The dividends and distributions payable at
December 31, 1997 represents dividends payable to shareholders of record on
January 5, 1998 (49,856,289 shares), distributions payable to minority interest
common unitholders (6,097,477 common units) on that same date and preferred
distributions to preferred unitholders (230,562 preferred units) for the fourth
quarter 1997. The fourth quarter 1997 dividends and common unit distributions of
$0.50 per share and per common unit (pro-rated for units issued during quarter),
as well as the pro-rated fourth quarter preferred unit distribution aggregating
$888, were approved by the Board of Directors on December 17, 1997 and were paid
on January 16, 1998.
Extraordinary Item - Extraordinary item represents the effect resulting from the
early settlement of certain debt obligations, net of write-offs of related
deferred financing costs, prepayment penalties, yield maintenance payments and
other related items.
Underwriting Commissions and Costs - Underwriting commissions and costs incurred
in connection with the Company's stock offerings are reflected as a reduction of
additional paid-in-capital.
Stock Options - The Company accounts for stock-based compensation using the
intrinsic value method prescribed in Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," and related Interpretations ("APB
No. 25"). Under APB No. 25, compensation cost is measured as the excess, if any,
of the quoted market price of the Company's stock at the date of grant over the
exercise price of the option granted. Compensation cost for stock options, if
any, is recognized ratably over the vesting period. The Company's policy is to
grant options with an exercise price equal to the quoted closing market price of
the Company's stock on the business day preceding the grant date. Accordingly,
no compensation cost has been recognized for the Company's stock option plans.
The Company provides additional pro forma disclosures as required under
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("FASB No. 123"). See Note 13.
Non-recurring Charges - The Company considers non-recurring charges as costs
incurred specific to significant non-recurring events that materially distort
the comparative measurement of the Company's performance.
Reclassifications - Certain reclassifications have been made to prior period
balances in order to conform with current period presentation.
3) Acquisitions/Transactions
In 1995, the Company acquired 27 office and office/flex properties totaling
approximately 1.6 million square feet for a total cost of approximately
$150,630. The acquired properties are all located in New Jersey and New York.
In 1996, the Company acquired 15 office properties and completed
construction on two office/flex properties totaling approximately 3.4 million
square feet for a total cost of approximately $451,623. The acquired and
constructed properties are all located in New Jersey and Pennsylvania.
Concurrently with the acquisition of 103 Carnegie Center in Princeton, Mercer
County, New Jersey, the Company sold its office building at 15 Essex Road in
Paramus, Bergen County, New Jersey ("Essex Road"). The concurrent transactions
with unrelated parties qualified as a tax-free exchange, as the Company used
subsequently all of the proceeds from the sale of Essex Road to acquire 103
Carnegie Center.
F-7
<PAGE>
Notes
Mack-Cali Realty Corporation and Subsidiaries
On January 28, 1997, the Company acquired 1345 Campus Parkway ("1345
Campus"), a 76,300 square foot office/flex property, located in Wall Township,
Monmouth County, New Jersey, for approximately $6,729 in cash, made available
from the Company's cash reserves. The property is located in the same office
park in which the Company previously acquired two office properties and four
office/flex properties in November 1995.
On January 31, 1997, the Company acquired 65 properties ("RM Properties")
from Robert Martin Company, LLC and affiliates ("RM") for a total cost of
approximately $450,000. The cost of the transaction (the "RM Transaction") was
financed through the assumption of $185,283 of mortgage indebtedness ("TIAA
Mortgage"), the payment of approximately $220,000 in cash, substantially all of
which was obtained from the Company's cash reserves, and the issuance of
1,401,225 common units, valued at $43,788.
The RM Properties consist primarily of 54 office and office/flex
properties aggregating approximately 3.7 million square feet and six
industrial/warehouse properties aggregating approximately 387,000 square feet.
The RM Properties are located primarily in established business parks in
Westchester County, New York and Fairfield County, Connecticut. The Company has
agreed not to sell certain of the RM Properties for a period of seven years
without the consent of the RM principals, except for sales made under certain
circumstances and/or conditions.
In connection with the RM Transaction, the Company was granted a
three-year option to acquire two properties (the "Option Properties"), under
certain conditions, one of which was acquired in 1997 (see below). The purchase
price for the remaining Option Property, under the agreement, is subject to
adjustment based on different formulas and is payable in cash or common units.
In connection with the RM Transaction, the Company holds a $7,250 mortgage
loan ("Mortgage Note Receivable") secured by the remaining Option Property (see
Note 6).
On May 8, 1997, the Company acquired four buildings in the Westlakes
Office Park ("Westlakes"), a suburban office complex located in Berwyn, Chester
County, Pennsylvania, totaling approximately 444,350 square feet. The properties
were acquired for a total cost of approximately $74,700, which was made
available primarily from drawing on one of the Company's credit facilities.
On July 21, 1997, the Company acquired two vacant office buildings in the
Moorestown Corporate Center, a suburban office complex located in Moorestown,
Burlington County, New Jersey. The properties, each consisting of 74,000 square
feet, were acquired for a total cost of approximately $10,200, which was made
available from drawing on one of the Company's credit facilities.
On August 1, 1997, the Company acquired 1000 Bridgeport Avenue ("Shelton
Place"), a 133,000 square-foot office building located in Shelton, Fairfield
County, Connecticut. The property was acquired for approximately $15,787, which
was made available from drawing on one of the Company's credit facilities.
On August 15, 1997, the Company acquired one of the Option Properties, 200
Corporate Boulevard South ("200 Corporate"), an 84,000 square-foot office/flex
building located in Yonkers, Westchester County, New York. The property was
acquired for approximately $8,078 through the exercise of a purchase option
obtained in connection with the RM Transaction. The acquisition cost, net of the
mortgage prepayment described below, was financed from the Company's cash
reserves.
In conjunction with the acquisition of 200 Corporate, the sellers of the
property, certain RM principals, prepaid $4,350 of the $11,600 Mortgage Note
Receivable between the Company and such RM principals (See Note 6).
On September 3, 1997, the Company acquired Three Independence Way ("Three
Independence"), a 111,300 square-foot office building located in South
Brunswick, Middlesex County, New Jersey. The property was acquired for
approximately $13,388, which was made available from drawing on one of the
Company's credit facilities.
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 $14,271, which was made available from the Company's cash
reserves.
On December 11, 1997, the Company acquired 54 office properties (the "Mack
Properties") from the Mack Company and Patriot American Office Group (the "Mack
Transaction"), pursuant to a Contribution and Exchange Agreement (the
"Agreement"), for a total cost of approximately $1,102,024.
The Mack Properties consist of 54 office properties comprising a total of
approximately 9.2 million net rentable square feet, ranging from approximately
40,000 to 475,100 square feet. The Mack Properties are located primarily in the
Northeast and Southwest, with a concentration of properties located in Northern
New Jersey (25 properties compromising approximately 4.8 million square feet),
Texas (17 properties comprising approximately 2.5 million square feet) and
Arizona (four properties comprising 485,000 square feet).
The total cost of the Mack Transaction was financed as follows: (i)
$498,757 in cash made available from the Company's cash reserves and from the
$200,000 Prudential Term Loan (See Note 7), (ii) $291,879 in debt assumed by the
Company (the "Mack Mortgages"), (iii) the issuance of 1,965,886 common units,
valued at $66,373, (iv) the issuance of 15,237 Series A preferred units and
215,325 Series B preferred units, valued at $236,491, (collectively, the
"Preferred Units"), (v) warrants to purchase 2,000,000 common units (the "Unit
Warrants"), valued at $8,524, and (vi) issuance of Contingent Units, as
described below.
In addition, 2,006,432 contingent common units, 11,895 Series A contingent
Preferred Units and 7,799 Series B contingent Preferred Units (collectively, the
"Contingent Units") were issued as contingent non-participating units. Such
Contingent Units have no voting, distribution or
F-8
<PAGE>
other rights until such time as they are redeemed into common units, Series A
Preferred Units, and Series B Preferred Units, respectively. Redemption of such
Contingent Units shall occur upon the achievement of certain performance goals
relating to certain of the Mack Properties, specifically the achievement of
certain leasing activity.
With the Mack Transaction, the Company assumed an aggregate of
approximately $291,879 of mortgage indebtedness with eight separate lenders,
encumbering 17 of the Mack Properties. Such debt matures at various dates from
March 1998 through January 2009. The Mack Mortgages are comprised of an
aggregate of approximately $199,931 of fixed rate debt bearing interest at a
weighted average rate of approximately 7.66 percent per annum, certain of which
require monthly principal amortization payments, and an aggregate of
approximately $91,948 in variable rate debt bearing interest at a weighted
average floating rate of approximately 76 basis points over the London
Inter-Bank Offered Rate (LIBOR). See Note 7.
With the completion of the Mack Transaction, the Cali Realty Corporation
name was changed to Mack-Cali Realty Corporation, and the name of the Operating
Partnership was changed from Cali Realty, L.P. to Mack-Cali Realty, L.P.
In connection with the Mack Transaction, Brant Cali, Brad W. Berger,
Angelo R. Cali, Kenneth A. DeGhetto, James W. Hughes and Alan Turtletaub
resigned from the Board of Directors of the Company. Mitchell E. Hersh, William
L. Mack and Earle I. Mack were added to the Board as "inside" members, and
Martin D. Gruss, Jeffrey B. Lane, Vincent Tese and Paul A. Nussbaum were added
as independent members.
In accordance with the Agreement, Thomas A. Rizk remained Chief Executive
Officer and resigned as President of the Company, with Mitchell E. Hersh
appointed as President and Chief Operating Officer. The Company's other officers
retained their existing positions and responsibilities, except that Brant Cali
resigned as Chief Operating Officer and John R. Cali resigned as Chief
Administrative Officer. Brant Cali and John R. Cali remained as officers of the
Company as Executive Vice Presidents.
Entering into new employment agreements with the Company after the Mack
Transaction were Thomas A. Rizk, Mitchell E. Hersh, Brant Cali, and John R.
Cali. Entering into amended and restated employment agreements were Roger W.
Thomas, as Executive Vice President, General Counsel and Assistant Secretary,
Barry Lefkowitz, as Executive Vice President and Chief Financial Officer and
Timothy M. Jones, as Executive Vice President.
Additionally, the Company entered into non-competition agreements with
each of William, Earle, David and Fredric Mack, which restricted the business
dealings of such individuals relative to their involvement in commercial real
estate activities to those specified in the Agreement. The non-competition
agreements have a term of the later of (a) three years from the completion of
the Mack Transaction, or (b) the occurrence of specified circumstances
including, but not limited to, the removal of William, Earle, David or Fredric
Mack, respectively, from the Company's Board of Directors or Advisory Board, as
applicable, and a decrease in certain ownership levels.
In connection with the Mack Transaction, under each of the Company's
executive officer's then existing employment agreements, due to a change of
control of the Company (as defined in each employment agreement), each of the
aforementioned officers received the benefit of the acceleration of (i) the
immediate vesting and issuance of his restricted stock, including tax gross-up
payments associated therewith, (ii) the forgiveness of his Stock Purchase Rights
loan, including tax gross-up payments associated therewith, and (iii) the
vesting of his unvested employee stock options and warrants. Additionally, under
each of Thomas Rizk's, Brant Cali's and John R. Cali's employment agreements
with the Company, each of these officers became entitled to receive certain
severance-type payments, as a result of certain provisions in each of their
agreements, triggered as result of the Mack Transaction. Finally, certain
officers and employees of the Company were given transaction-based payments as a
reward for their efforts and performance in connection with the Mack
Transaction. The total expense associated with the acceleration of vesting of
restricted stock, the forgiveness of Stock Purchase Rights loans, and the
payment of certain severance-type payments, as well as performance payments and
related tax-obligation payments, which were approved by the Company's Board of
Directors and which took place simultaneous with completion of the Mack
Transaction, totaled $45,769. Such expenses are included in non-recurring
merger-related charges for the year ended December 31, 1997. See Note 13.
On December 19, 1997 the Company acquired 100 Overlook Center ("Princeton
Overlook") a 149,600 square-foot office building located in Princeton, Mercer
County, New Jersey. The property was acquired for approximately $27,218, which
was funded through the issuance of 41,421 common units valued at $1,624, 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
$34,075, which was made available from drawing on one of the Company's credit
facilities.
On January 23, 1998, the Company acquired 10 acres of vacant land in the
Stamford Executive Park, located in Stamford, Fairfield County, Connecticut for
approximately $1,300, which was funded from the Company's cash reserves. The
vacant land, on which the Company plans to develop a 40,000 square-foot
office/flex property, was acquired from RMC Development Co., LLC. In conjunction
with the acquisition of the developable land, the Company signed a 15-year
lease, on a triple-net basis, with a single tenant to occupy the entire property
being developed.
F-9
<PAGE>
Notes
Mack-Cali Realty Corporation and Subsidiaries
On January 30, 1998, the Company acquired a 17-building office/flex
portfolio, aggregating approximately 748,660 square feet located in the
Moorestown West Corporate Center in Moorestown, Burlington County, New Jersey
and in Bromley Commons in Burlington, Burlington County, New Jersey. The 17
properties were acquired for a total cost of approximately $46,993. The Company
is under contract to acquire an additional four office/flex properties in the
same locations. The Company also has an option to purchase a property following
completion of construction and required lease-up for approximately $3,700. The
purchase contract also provides the Company a right of first refusal to acquire
up to six additional office/flex properties totaling 202,000 square feet upon
their development and lease-up. The initial transaction was funded primarily
from drawing on one of the Company's credit facilities as well as the assumption
of mortgage debt with an estimated value of $8,419 (the "McGarvey Mortgages").
The McGarvey Mortgages currently have a weighted average annual effective
interest rate of 6.24 percent and are secured by five of the office/flex
properties acquired.
On February 2, 1998, the Company acquired 2115 Linwood Avenue, a 68,000
square-foot vacant office building located in Fort Lee, Bergen County, New
Jersey. The building was acquired for approximately $5,100, which was made
available from drawing on one of the Company's credit facilities.
On February 5, 1998, the Company acquired 500 West Putnam Avenue, a
121,250 square-foot office building located in Greenwich, Fairfield County,
Connecticut. The property was acquired for a total cost of approximately
$20,125, funded from drawing on one of the Company's credit facilities, as well
as the assumption of mortgage debt with an estimated value of $12,104 which
bears interest at an annual effective interest rate of 6.52 percent.
On February 25, 1998, the Company acquired 10 Mountainview Road, a 192,000
square-foot office building, located in Upper Saddle River, Bergen County, New
Jersey. The property was acquired for approximately $24,500, which was made
available from proceeds received from the Company's February 1998 offering of
common stock (see Note 13).
As of February 27, 1998, the Company's portfolio consisted of 209
properties aggregating approximately 23.1 million square feet, consisting
primarily of office and office/flex buildings, located in ten states, primarily
in the Northeast and Southwest.
In March 1998, the Company agreed to acquire for $170,000 substantially
all of the interests in Prudential Business Campus, an 875,000 square-foot
office complex with five office buildings and a daycare center, plus land
parcels, located in Parsippany and East Hanover, Morris County, New Jersey.
Additionally, in March, the Company signed a contract to purchase Morris
County Financial Center, a 308,215 square-foot two-building office complex also
located in Parsippany, Morris County, New Jersey for $52,500.
The Company also announced, in March, an agreement to acquire 19
properties from Pacifica Holding Company ("Pacifica"), a private real estate
owner and operator in Denver, Colorado, for $188,000. The acquisition will
include Pacifica's entire 1.4 million square-foot office portfolio, which
includes 19 office buildings, and related operations; and 2.5 acres of land
located in the Denver Tech Center. Pacifica's office properties are located in
suburban Denver and Colorado Springs, Colorado.
F-10
<PAGE>
================================================================================
4) Deferred Charges and Other Assets
- --------------------------------------------------------------------------------
December 31, 1997 1996
================================================================================
Deferred leasing costs $ 20,297 $ 14,031
Deferred financing costs 3,640 5,390
- --------------------------------------------------------------------------------
23,937 19,421
Accumulated amortization (9,535) (8,994)
- --------------------------------------------------------------------------------
Deferred charges, net 14,402 10,427
Prepaid expenses and other assets 4,587 1,413
- --------------------------------------------------------------------------------
Total deferred charges and other assets, net $ 18,989 $ 11,840
================================================================================
================================================================================
5) Restricted Cash
Restricted cash includes security deposits for the Company's residential
properties and certain commercial properties, and escrow and reserve funds for
debt service, real estate taxes, property insurance, capital improvements,
tenant improvements, and leasing costs established pursuant to certain mortgage
financing arrangements, and is comprised of the following:
- --------------------------------------------------------------------------------
December 31, 1997 1996
================================================================================
Escrow and other reserve funds $1,278 $2,814
Security deposits 5,566 346
- --------------------------------------------------------------------------------
Total restricted cash $6,844 $3,160
================================================================================
================================================================================
6) Mortgage Note Receivable
In connection with the RM Transaction on January 31, 1997, the Company provided
an $11,600 non-recourse, non-amortizing mortgage loan to entities controlled by
the RM principals, bearing interest at an annual rate of 450 basis points over
one-month LIBOR. The Mortgage Note Receivable, which is secured by the Option
Properties and guaranteed by certain of the RM principals, matures on February
1, 2000. In addition, the Company received a three percent origination fee in
connection with providing the Mortgage Note Receivable.
In conjunction with the acquisition of 200 Corporate, one of the Option
Properties, on August 15, 1997, the sellers of the property, certain RM
principals, prepaid $4,350 of the Mortgage Note Receivable, leaving a remaining
principal balance of $7,250 secured by the remaining Option Property. The
Company also received a prepayment fee of $163.
F-11
<PAGE>
================================================================================
7) Mortgages and Loans Payable
- --------------------------------------------------------------------------------
December 31, 1997 1996
================================================================================
TIAA Mortgage $185,283 --
Harborside Mortgages 150,000 $150,000
Mortgage Financing -- 64,508
CIGNA Mortgages 86,650 --
Mitsubishi Mortgages 72,204 --
Prudential Mortgages 62,205 18,445
Other Mortgages 88,474 --
Prudential Term Loan 200,000 --
Revolving Credit Facilities 122,100 29,805
Contingent Obligation 5,734 5,252
- --------------------------------------------------------------------------------
Total mortgages and loans payable $972,650 $268,010
================================================================================
TIAA Mortgage
In connection with the RM Transaction, on January 31, 1997, the Company assumed
a $185,283 non-recourse mortgage loan with Teachers Insurance and Annuity
Association of America ("TIAA"), with interest only payable monthly at a fixed
annual rate of 7.18 percent. The TIAA Mortgage is secured and
cross-collateralized by 43 of the RM Properties and matures on December 31,
2003. The Company, at its option, may convert the TIAA Mortgage to unsecured
debt upon achievement by the Company of an investment grade credit rating of
Baa3/BBB- or better. The TIAA Mortgage is prepayable in whole or in part subject
to certain provisions, including yield maintenance.
Harborside Mortgages
In connection with the acquisition of Harborside Financial Center
("Harborside"), on November 4, 1996, the Company assumed existing mortgage debt
and was provided seller-financed mortgage debt aggregating $150,000. The
existing financing, with a principal balance of $104,768 as of December 31,
1997, bears interest at a fixed rate of 7.32 percent per annum for a term of
approximately nine years. The seller-provided financing, with a principal
balance of $45,232 as of December 31, 1997, also has a term of approximately
nine years and initially bears interest at a rate of 6.99 percent per annum. The
interest rate on the seller-provided financing will be reset at the end of the
third and sixth loan years based on the yield of the three-year treasury
obligation at that time, with spreads of 110 basis points in years four through
six and 130 basis points in years seven through maturity.
Mortgage Financing
The $64,508 in mortgage financing (the "Mortgage Financing") consisted of
$43,313, which bore interest at a net cost to the Company equal to a fixed rate
of 8.02 percent per annum and $20,195, which bore interest at a net cost to the
Company equal to a floating rate of 100 basis points over one-month LIBOR with a
lifetime interest rate cap of 11.6 percent. On August 12, 1997, the Company
retired the Mortgage Financing with funds made available primarily from drawing
on the Unsecured Facility (see below). On account of prepayment fees, loan
origination fees, legal fees and other costs incurred in the retirement of the
Mortgage Financing, an extraordinary loss of $3,583, net of minority interest's
share of the loss ($402) was recorded for the year ended December 31, 1997.
CIGNA Mortgages
In connection with the Mack Transaction, the Company assumed non-recourse
mortgage debt (the "CIGNA Mortgages") aggregating $86,650 in principal as of
December 31, 1997, with Connecticut General Life Insurance Company (CIGNA). Such
mortgages, which are secured by five of the Mack Properties, bear interest at a
weighted average annual fixed rate of 7.77 percent and require monthly payments
of interest and principal on various term amortization schedules. The CIGNA
Mortgages mature between March 1998 and October 2003.
Mitsubishi Mortgages
In connection with the Mack Transaction, the Company assumed non-recourse
variable-rate mortgage debt (the "Mitsubishi Mortgages") aggregating $72,204 in
principal as of December 31, 1997 with Mitsubishi Trust and Banking Corporation.
Such mortgages, which are secured by two of the Mack Properties, bear interest
payable monthly at a variable rate of 65 basis points over LIBOR (5.72 percent
at December 31, 1997) and mature between January 2008 and January 2009.
Prudential Mortgages
The Company has mortgage debt (the "Prudential Mortgages") aggregating $62,205
in principal as of December 31, 1997 with Prudential Insurance Company of
America, substantially all of which was assumed in the Mack Transaction. Such
mortgages, which are secured by three properties, bear interest at a weighted
average annual fixed rate of 8.43 percent, all of which require monthly payments
of interest. In addition, certain of the Prudential Mortgages also require
monthly payments of principal, in addition to interest, on various term
amortization schedules. The Prudential Mortgages mature between October 2003 and
July 2004.
Other Mortgages
The Company has mortgage debt ("Other Mortgages") aggregating $88,474 in
principal as of December 31, 1997 with six different lenders, all of which was
assumed in the Mack Transaction, and are secured by eight of the Mack
Properties. The Other Mortgages are comprised of: (i) fixed rate debt
aggregating $69,110, which bears interest at a weighted average fixed rate of
7.11 percent, and require monthly payments of principal and interest on various
term amortization schedules, and (ii) variable rate debt aggregating $19,364,
which bears interest at 115 basis points over LIBOR. The Other Mortgages mature
between February 1999 and September 2005.
Prudential Term Loan
On December 10, 1997, the Company obtained a $200,000 term loan (the "Prudential
Term Loan") from Prudential Securities Credit Corp. ("PSC"). The proceeds of the
loan were used to fund a portion of the cash consideration in completion of the
Mack Transaction. The loan has a one-year
F-12
<PAGE>
Notes
Mack-Cali Realty Corporation and Subsidiaries
term and interest payments are required monthly at an interest rate of 110
basis points over one-month LIBOR. The loan is a recourse loan secured by 11
properties owned by the Company and located in New Jersey.
Revolving Credit Facilities
First Prudential Facility - The Company had a $70,000 revolving credit facility
(the "First Prudential Facility") with PSC. The First Prudential Facility bore
interest at a floating rate equal to 150 basis points over one-month LIBOR for
the period January 1, 1996 through August 31, 1996. Effective September 1, 1996,
the interest rate was reduced to a floating rate equal to 125 basis points over
one-month LIBOR. In conjunction with obtaining the Unsecured Facility (see
below), the Company repaid in full and terminated the First Prudential Facility
on August 7, 1997. The Company had outstanding borrowings of $6,000 at December
31, 1996 under the First Prudential Facility.
Bank Facility - The Company had a revolving credit facility (the "Bank
Facility"), secured by certain of its properties, in the amount of $75,000 from
two participating banks. The Bank Facility had a three-year term and bore
interest at 150 basis points over one-month LIBOR. In conjunction with obtaining
the Unsecured Facility (see below), the Company repaid in full and terminated
the Bank Facility on August 7, 1997. The Company had outstanding borrowings of
$23,805 at December 31, 1996 under the Bank Facility.
Second Prudential Facility - The Company has a revolving credit facility
("Second Prudential Facility") from PSC in the amount of $100,000 which
currently bears interest at 110 basis points over one-month LIBOR, and matures
on March 31, 1999. The Second Prudential Facility is a recourse liability of the
Operating Partnership and is secured by the Company's equity interest in
Harborside. The terms of the Second Prudential Facility include certain
restrictions and covenants that limit, among other things, dividend payments and
additional indebtedness and that require compliance with specified financial
ratios and other financial measurements. The Company had no outstanding
borrowings at December 31, 1997 and 1996 under the Second Prudential Facility.
Unsecured Facility - On August 6, 1997, the Company obtained an unsecured
revolving credit facility (the "Unsecured Facility") in the amount of $400,000
from a group of 13 lender banks. The Unsecured Facility has a three-year term
and currently bears interest at 125 basis points over one-month LIBOR. Based
upon the Company's achievement of an investment grade long-term unsecured debt
rating, the interest rate will be reduced, on a sliding scale, and a competitive
bid option will become available.
The terms of the Unsecured Facility include certain restrictions and
covenants which limit, among other things, dividend payments and additional
indebtedness and which require compliance with specified financial ratios and
other financial measurements. The Unsecured Facility also requires a fee on the
unused balance payable quarterly in arrears, at a rate ranging from one-eighth
of one percent to one-quarter of one percent of such balance, depending on the
level of borrowings outstanding in relation to the total facility commitment.
The lending group for the Unsecured Facility consist of: Fleet National
Bank, The Chase Manhattan Bank, and Bankers Trust Company, as agents; PNC Bank,
N.A., Bank of America National Trust and Savings Association, Commerzbank AG,
and The First National Bank of Chicago, as co-agents; and KeyBank, Summit Bank,
Crestar Bank, Mellon Bank, N.A., Signet Bank, and KredietBank NV.
In conjunction with the Company obtaining the Unsecured Facility, the
Company drew funds on the new facility to repay in full and terminate both the
First Prudential Facility and the Bank Facility. The Company had outstanding
borrowings of $122,100 at December 31, 1997 under the Unsecured Facility.
Contingent Obligation
As part of the Harborside acquisition, the Company agreed to make payments (with
an estimated net present value of approximately $5,252 at acquisition date) to
the seller for development rights ("Contingent Obligation") if and when the
Company commences construction on the acquired site during the next several
years. However, the agreement provides, among other things, that even if the
Company does not commence construction, the seller may nevertheless require the
Company to acquire these rights during the six-month period after the end of the
sixth year. After such period, the seller's option lapses, but any development
in years 7 through 30 will require a payment, on an increasing scale, for the
development rights. For the year ended December 31, 1997, interest was imputed
on the Contingent Obligation, thereby increasing the balance of the Contingent
Obligation to $5,734 as of December 31, 1997.
Interest Rate Contracts
The Company has an interest rate swap agreement with a commercial bank. The swap
agreement fixes the Company's one-month LIBOR base to 6.285 percent per annum on
a notional amount of $24,000 through August 1999.
The Company has another interest rate swap agreement with a commercial
bank. This swap agreement has a three-year term and a notional amount of
$26,000, which fixes the Company's one-month LIBOR base to 5.265 percent per
annum through January 1999.
On November 20, 1997, the Company entered into a seven-year, interpolated
U.S. Treasury interest rate lock agreement with a commercial bank. The agreement
fixes the Company's base Treasury rate to 5.88 percent per annum on a notional
amount of $150,000.
The Company is exposed to credit loss in the event of non-performance by
the other parties to the interest rate contracts. However, the Company does not
anticipate non-performance by any of its counterparties.
F-13
<PAGE>
Scheduled Principal Payments, Interest Paid and Capitalized Interest
Scheduled principal payments on the mortgages and loans payable, as of December
31, 1997, are as follows:
- --------------------------------------------------------------------------------
Year Amount
================================================================================
1998 $278,788
1999 61,848
2000 125,265
2001 5,538
2002 10,406
Thereafter 490,805
- --------------------------------------------------------------------------------
Total $972,650
================================================================================
Cash paid for interest for the years ended December 31, 1997, 1996, and
1995 was $36,917, $12,096, and $8,322, respectively. Interest capitalized by the
Company for the years ended December 31, 1997, 1996 and 1995 was $820, $118 and
$27, respectively.
8) Minority Interest
Minority interest in the accompanying consolidated financial statements relates
to common units in the Operating Partnership, in addition to certain preferred
units in the Operating Partnership issued in conjunction with the Mack
Transaction, held by parties other than the Company. Preferred and common units
issued during 1997 are described in Note 3.
Preferred Units
As described in Note 3, in connection with the funding of the Mack Transaction,
the Company issued 15,237 Series A Preferred Units and 215,325 Series B
Preferred Units, with an aggregate value of $236,490. The Preferred Units have a
stated value of $1,000 per unit and are preferred as to assets over any class of
common units or other class of preferred units of the Company, based on
circumstances per the applicable unit certificates.
The quarterly distribution on each Preferred Unit is an amount equal to
the greater of (i) $16.875 (representing 6.75 percent of the stated value of
$1,000 per Preferred Unit on an annualized basis) or (ii) the quarterly
distribution attributable to a Preferred Unit determined as if such unit had
been converted into common units, subject to adjustment for customary
anti-dilution rights. Each of the Series A Preferred Units may be converted at
any time into common units at a conversion price of $34.65 per common unit, and,
after the one year anniversary of the date of the Series A Preferred Units'
initial issuance, common units received pursuant to such conversion may be
redeemed into common stock. Each of the Series B Preferred Units may be
converted at any time into common units at a conversion price of $34.65 per
unit, and, after the three year anniversary of the date of the Series B
Preferred Units' initial issuance, common units received pursuant to such
conversion may be redeemed into common stock. Each of the common units are
redeemable after one year for an equal number of shares of common stock.
The Preferred Unit to common unit conversion rate of $34.65 per common
unit was less than the $39.0625 closing stock price on the date of closing of
the Mack Transaction. Accordingly, on December 11, 1997, the financial value
ascribed to this beneficial conversion feature inherent in the Preferred Units
upon issuance totaled $26,801 ($29,361 before allocation to minority common
unitholders) and was recorded as beneficial conversion feature in stockholders'
equity. The beneficial conversion feature was amortized in full as the Preferred
Units were immediately convertible upon issuance; such amortization was included
in minority interest for the year ended December 31, 1997.
Common Units
Certain individuals and entities own common units in the Operating Partnership.
A common unit and a share of common stock of the Company have substantially the
same economic characteristics in as much as they effectively share equally in
the net income or loss of the Operating Partnership.
Common units are redeemable by the common unitholders at their option,
subject to certain restrictions, on the basis of one common unit for either one
share of common stock or cash equal to the fair market value of a share at the
time of the redemption. The Company has the option to deliver shares of common
stock in exchange for all or any portion of the cash requested. When a
unitholder redeems a common unit, minority interest is reduced and the Company's
investment in the Operating Partnership is increased.
As described in Note 3, the Company issued an aggregate of 3,408,532
common units in 1997 in connection with the completion of the RM Transaction,
the Mack Transaction and Princeton Overlook.
Contingent Common and Preferred Units
In conjunction with the completion of the Mack Transaction, 2,006,432 contingent
Common units, 11,895 Series A contingent Preferred Units and 7,799 Series B
contingent Preferred Units (collectively, the "Contingent Units") were issued as
contingent non-participating units. Such Contingent Units have no voting,
distribution or other rights until such time as they are redeemed into common
units, Series A Preferred Units, and Series B Preferred Units, respectively.
Redemption of such Contingent Units shall occur upon the achievement of certain
performance goals relating to certain of the Mack Properties, specifically the
achievement of certain leasing activity.
Unit Warrants
As described in Note 3, in connection with the funding of the Mack Transaction,
the Company granted warrants to purchase 2,000,000 common units.
The Unit Warrants are exercisable at any time after one year from the date
of their issuance and prior to the fifth anniversary thereof at an exercise
price of $37.80 per common unit.
F-14
<PAGE>
Notes
Mack-Cali Realty Corporation and Subsidiaries
Minority Ownership
As of December 31, 1997 and 1996, the minority interest common unitholders owned
10.9 percent (20.4 percent, including the effect of the conversion of Preferred
Units into common units) and 6.9 percent of the Operating Partnership,
respectively (in all cases, excluding the effect of any exercise of Unit
Warrants).
9) Employee Benefit Plan
All employees of the Company who meet certain minimum age and period of service
requirements are eligible to participate in a 401(k) defined contribution plan
(the "Plan"). The Plan allows eligible employees to defer up to 15 percent of
their annual compensation. The amounts contributed by employees are immediately
vested and non-forfeitable. The Company, at management's discretion, may match
employee contributions. No employer contributions have been made to date.
10) Disclosure of Fair Value of Financial Instruments
The following disclosure of estimated fair value was determined by management
using available market information and appropriate valuation methodologies.
However, considerable judgement is necessary to interpret market data and
develop estimated fair value. Accordingly, the estimates presented herein are
not necessarily indicative of the amounts the Company could realize on
disposition of the financial instruments at December 31, 1997 and 1996. The use
of different market assumptions and/or estimation methodologies may have a
material effect on the estimated fair value amounts.
Cash equivalents, receivables, accounts payable, and accrued expenses and
other liabilities are carried at amounts which reasonably approximate their fair
values.
Mortgages and loans payable had an aggregate carrying value of $972,650
and $268,010 as of December 31, 1997 and 1996, respectively, which approximates
their estimated aggregate fair value (excluding prepayment penalties) based upon
then current interest rates for debt with similar terms and remaining
maturities.
The estimated cost to settle the Company's interest rate contracts, at
December 31, 1997 and 1996, based on quoted market prices of comparable
contracts was $1,404 and $140, respectively.
Disclosure about fair value of financial instruments is based on pertinent
information available to management as of December 31, 1997 and 1996. Although
management is not aware of any factors that would significantly affect the fair
value amounts, such amounts have not been comprehensively revalued for purposes
of these financial statements since December 31, 1997 and current estimates of
fair value may differ significantly from the amounts presented herein.
11) Commitments and Contingencies
Tax Abatement Agreements
Grove Street Property Pursuant to an agreement with the City of Jersey City, New
Jersey, as amended, expiring in 2004, the Company is required to make payments
in lieu of property taxes ("PILOT") on its property at 95 Christopher Columbus
Drive, Jersey City, Hudson County, New Jersey. Such PILOT, as defined, is $1,267
per annum through May 31, 1999 and $1,584 per annum through May 31, 2004.
Harborside Financial Center Property Pursuant to an agreement with the City of
Jersey City, New Jersey obtained by the former owner of Harborside in 1988 and
assumed by the Company as part of the acquisition of the property in November
1996, the Company is required to make PILOT payments on its Harborside property.
The agreement, which commenced in 1990, is for a term of 15 years. Such PILOT is
equal to two percent of Total Project Costs, as defined, in year one and
increases by $75 per annum through year fifteen. Total Project Costs, as
defined, are $148,712.
F-15
<PAGE>
Ground Lease Agreements
Future minimum rental payments under the terms of all non-cancelable ground
leases, under which the Company is the lessee, are as follows:
- --------------------------------------------------------------------------------
Year Amount
================================================================================
1998 $ 320
1999 320
2000 320
2001 320
2002 320
Thereafter 17,851
- --------------------------------------------------------------------------------
Total $19,451
================================================================================
Other Contingencies
On December 10, 1997, a Shareholder's Derivative Action was filed in Maryland
Court on behalf of one individual shareholder. The complaint questioned certain
executive compensation decisions made by the Company's Board of Directors in
connection with the Mack Transaction. The Board's compensation decisions were
discussed in the proxy materials distributed in connection with the Mack
Transaction and were approved by in excess of 99 percent of the voting
shareholders. Although the Company believes that this lawsuit is factually and
legally baseless, the Company recorded $750 for this litigation, which is
included in non-recurring merger-related charges for the year ended December 31,
1997.
The Company is a defendant in certain other litigation arising in the
normal course of business activities. Management does not believe that the
resolution of these matters will have a materially adverse effect upon the
Company.
F-16
<PAGE>
12) Tenant Leases
The Properties are leased to tenants under operating leases with various
expiration dates through 2020. Substantially all of the leases provide for
annual base rents plus recoveries and escalation charges based upon the tenant's
proportionate share of, and/or increases in, real estate taxes and certain
operating costs, as defined, and the pass-through of charges for electrical
usage.
Future minimum rentals to be received under non-cancelable operating
leases at December 31, 1997 are as follows:
- --------------------------------------------------------------------------------
Year Amount
================================================================================
1998 $ 335,286
1999 304,157
2000 259,715
2001 207,136
2002 168,239
Thereafter 690,884
- --------------------------------------------------------------------------------
Total $1,965,417
================================================================================
13) Stockholders' Equity
To maintain its qualification as a REIT, not more than 50 percent in value of
the outstanding shares of the Company may be owned, directly or indirectly, by
five or fewer individuals (defined to include certain entities), at any time
during the last half of any taxable year of the Company, other than its initial
taxable year applying certain constructive ownership rules. To help ensure that
the Company will not fail this test, the Company's Articles of Incorporation
provide for, among other things, certain restrictions on the transfer of the
common stock to prevent further concentration of stock ownership. Moreover, to
evidence compliance with these requirements, the Company must maintain records
that disclose the actual ownership of its outstanding common stock and will
demand written statements each year from the holders of record of designated
percentages of its common stock requesting the disclosure of the beneficial
owners of such common stock.
On August 13, 1996, the Company sold 3,450,000 shares of its common stock
through a public stock offering (the "August 1996 Offering"), which included an
exercise of the underwriters over-allotment option of 450,000 shares. Net
proceeds from the August 1996 Offering (after offering costs) were approximately
$76,830.
On November 22, 1996, the Company completed an underwritten public offer
and sale of 17,537,500 shares of its common stock. The Company received
approximately $441,215 in net proceeds (after offering costs) from the offering,
and used such funds to complete certain of the Company's property acquisitions
in November and December 1996, pay down outstanding borrowings on its revolving
credit facilities, and invest in Overnight Investments.
On May 15, 1997, the stockholders approved an increase in the authorized
shares of common stock in the Company to 190,000,000.
On October 15, 1997, the Company completed an underwritten public offer
and sale of 13,000,000 shares (the "1997 Offering") of its common stock. The
Company received approximately $489,116 in net proceeds (after offering costs)
from the 1997 Offering. The Company used $160,000 of such proceeds to repay
outstanding borrowings on its Unsecured Facility and the remainder of the
proceeds to fund a portion of the purchase price of the Mack Transaction, for
other acquisitions, and for general corporate purposes.
On February 25, 1998, the Company completed an underwritten public offer
and sale of 2,500,000 shares of its common stock (the "1998 Offering") and used
the net proceeds, of approximately $92,000 (after offering costs) to pay down a
portion of its outstanding borrowings under the Unsecured Facility and to
fund the acquisition of Mountainview (see Note 3).
Stock Option Plans
In 1994, and as subsequently amended, the Company established the Cali Employee
Stock Option Plan ("Employee Plan") and the Cali Director Stock Option Plan
("Director Plan") under which a total of 5,380,188 shares (subject to
adjustment) of the Company's common stock have been reserved for issuance
(4,980,188 shares under the Employee Plan and 400,000 shares under the Director
Plan). Stock options granted under the Employee Plan in 1994 and 1995 become
exercisable over a three-year period and those options granted under the
Employee Plan in 1996 and 1997 become exercisable over a five-year period. All
stock options granted under the Director Plan become exercisable in one year.
All options were granted at the fair market value at the dates of grant and have
terms of ten years.
As a result of provisions contained in certain of the Company's executive
officers' employment agreements, on December 11, 1997, the Mack Transaction
triggered the accelerated vesting of unvested stock options held by such
officers on that date.
Information regarding the Company's stock option plans is summarized
below:
- --------------------------------------------------------------------------------
Shares under option: Employee Plan Director Plan
================================================================================
Outstanding at January 1, 1995
$15.25-$17.25 per share 600,000 25,000
Granted at $17.25-$19.875 per share 220,200 10,000
Less-Lapsed or canceled (3,588) --
- --------------------------------------------------------------------------------
Outstanding at December 31, 1995
$15.25-$19.875 per share 816,612 35,000
Granted at $21.50-$26.25 per share 795,700 14,000
Less-Lapsed or canceled (7,164) --
Exercised at $17.25 per share (116,041) (10,000)
- --------------------------------------------------------------------------------
Outstanding at December 31, 1996
$15.25-$26.25 per share 1,489,107 39,000
Granted at $33.00-$38.75 per share 1,956,538 170,000
Less-Lapsed or canceled (30,073) --
Exercised at $17.25-$26.25 per share (335,282) (2,000)
- --------------------------------------------------------------------------------
Outstanding at December 31, 1997
$15.25-$38.75 per share 3,080,290 207,000
================================================================================
Exercisable at December 31, 1997 967,618 37,000
- --------------------------------------------------------------------------------
Available for grant at December 31, 1996 175,040 51,000
Available for grant at December 31, 1997 1,448,575 181,000
================================================================================
F-17
<PAGE>
Notes
Mack-Cali Realty Corporation and Subsidiaries
The weighted-average fair value of options granted during 1997, 1996, and
1995 were $6.66, $2.41, and $1.28 per option, respectively. The fair value of
each significant option grant is estimated on the date of grant using the
Black-Scholes model. The following weighted average assumptions are included in
the Company's fair value calculations of stock options:
- --------------------------------------------------------------------------------
1997 1996 1995
================================================================================
Expected life (years) 6 6 6
Risk-free interest rate 5.84% 6.11% 6.58%
Volatility 23.76% 19.14% 1.41%
Dividend yield 5.29% 7.58% 10.20%
================================================================================
Warrants
On January 31, 1997, in conjunction with the completion of the RM Transaction,
the Company granted a total of 400,000 warrants to purchase an equal number of
shares of common stock at $33 per share (the market price at date of grant) to
Timothy Jones, Brad Berger and certain other Company employees formerly with RM.
Such warrants vest equally over a three-year period and have a term of ten
years. The unvested warrants held by Timothy Jones and Brad Berger became
immediately exercisable on December 11, 1997 as a result of provisions contained
in their employment agreements, which were triggered by the Mack Transaction.
On December 12, 1997, in conjunction with the completion of the Mack
Transaction, the Company granted a total of 491,756 warrants to purchase an
equal number of shares of common stock at $38.75 per share (the market price at
date of grant) to Mitchell Hersh, and certain other Company executives formerly
with Patriot American Office Group. Such warrants vest equally over a five-year
period and have a term of ten years.
The weighted-average fair value of warrants granted during 1997 were $6.27
per warrant. No warrants were granted in 1995 or 1996. The fair value of each
warrant grant is estimated on the date of grant using the Black-Scholes model.
The following weighted average assumptions are included in the Company's fair
value calculation of warrants granted during 1997:
- --------------------------------------------------------------------------------
Expected life (years) 6
Risk-free interest rate 5.96%
Volatility 22.77%
Dividend yield 5.29%
================================================================================
FASB No. 123
Under the above models, the value of stock options and warrants granted during
1997, 1996 and 1995 totaled approximately $22,998, $1,955, and $294,
respectively, which would be amortized ratably on a pro forma basis over the
appropriate vesting period. Had the Company determined compensation cost for
these granted securities in accordance with FASB No. 123, the Company's pro
forma net (loss) income and basic (loss) earnings per share and diluted (loss)
earnings per share would have been ($3,153), ($0.08) and ($0.08) in 1997,
$31,980, $1.73 and $1.49 in 1996 and $13,553, $1.22 and $0.97 in 1995,
respectively. The FASB No. 123 method of accounting does not apply to options
granted prior to January 1, 1995 and accordingly, the resulting pro forma
compensation cost may not be representative of that to be expected in the
future.
Stock Compensation
In January 1997, the Company entered into employment contracts with seven of its
key executives which provided for, among other things, compensation in the form
of stock awards (the "Restricted Stock Awards") and Company-financed stock
purchase rights (the "Stock Purchase Rights"), and associated tax obligation
payments. In connection with the Restricted Stock Awards, the executives were to
receive 199,070 shares of the Company's common stock vesting over a five-year
period contingent on the Company meeting certain performance objectives.
Additionally, pursuant to the terms of the Stock Purchase Rights, the Company
provided fixed rate, non-recourse loans, aggregating $4,750, to such executives
to finance their purchase of 152,000 shares of the Company's common stock, which
the Company agreed to forgive ratably over five years, subject to continued
employment. Such loans were for amounts equal to the fair market value of the
associated shares at the date of grant. Subsequently, from April 18, 1997
through April 24, 1997, the Company purchased, for constructive retirement,
152,000 shares of its outstanding common stock for $4,680. The excess of the
purchase price over par value was recorded as a reduction to additional paid-in
capital. Concurrent with this purchase, the Company sold to the Operating
Partnership 152,000 Units for $4,680.
The value of the Restricted Stock Awards and the balance of the loans
related to the Stock Purchase Rights at the grant date, were recorded as
unamortized stock compensation in stockholders' equity. As a result of
provisions contained in certain of the Company's executive officers' employment
agreements, which were triggered by the Mack Transaction on December 11, 1997,
the loans provided by the Company under the Stock Purchase Rights were forgiven
by the Company, and the vesting and issuance of the restricted stock issued
under the Restricted Stock Awards was accelerated, and the related tax
obligation payments were made. As a result, the accelerated cost of $16,788
affecting the stock compensation described above was included in non-recurring
merger-related charges for the year ended December 31, 1997. With such
accelerated vestings, there was no remaining balance in unamortized stock
compensation as of December 31, 1997.
Included in general and administrative expense for the year ended December
31, 1997 is $2,257 relating to the normal cost of the Restricted Stock Awards
and Stock Purchase Rights.
Earnings Per Share
FASB No. 128 requires a dual presentation of basic and diluted EPS on the face
of the income statement for all companies with complex capital structures even
where the effect of such dilution is not material. Basic EPS excludes dilution
and is computed by dividing net income available to common stockholders by the
weighted average number of shares outstanding for the period. Diluted EPS
reflects the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock.
F-18
<PAGE>
<TABLE>
<CAPTION>
The following information presents the Company's results for the years ended
December 31, 1997, 1996 and 1995 in accordance with FASB No. 128.
- ------------------------------------------------------------------------------------------------------------------------------------
For the Year Ended December 31, 1997 1996 1995
====================================================================================================================================
Basic EPS Diluted EPS Basic EPS Diluted EPS Basic EPS Diluted EPS
<S> <C> <C> <C> <C> <C> <C>
Net income $ 1,405 $ 1,405 $31,944 $31,944 $13,638 $13,638
Add: Net income attributable to potentially
dilutive securities -- 143 -- 4,760 -- 3,508
- ------------------------------------------------------------------------------------------------------------------------------------
Adjusted net income $ 1,405 $ 1,548 $31,944 $36,704 $13,638 $17,146
====================================================================================================================================
Weighted average shares 39,266 44,156 18,461 21,436 11,122 14,041
- ------------------------------------------------------------------------------------------------------------------------------------
Per Share $ 0.04 $ 0.04 $ 1.73 $ 1.71 $ 1.23 $ 1.22
====================================================================================================================================
</TABLE>
The following schedule reconciles the shares used in the basic EPS
calculation to the shares used in the diluted EPS calculation.
- --------------------------------------------------------------------------------
Shares in thousands 1997 1996 1995
================================================================================
Basic EPS Shares: 39,266 18,461 11,122
Add:
Stock Options 579 264 55
Restricted Stock Awards 188 -- --
Warrants 33 -- --
Common Operating
Partnership units 4,090 2,711 2,864
- --------------------------------------------------------------------------------
Diluted EPS Shares: 44,156 21,436 14,041
================================================================================
The Preferred Units and Contingent Units issued in 1997 were not included
in the computation of diluted EPS as such units were anti-dilutive during the
period.
On February 25, 1998, the Company sold 2.5 million shares of its common
stock in the 1998 Offering.
14) Impact of Recently Issued Accounting Standards
In June 1997, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 130, Reporting Comprehensive Income ("FASB
No. 130"), which establishes standards for the reporting and display of
comprehensive income and its components. This statement requires a separate
statement to report the components of comprehensive income for each period
reported. The provisions of this statement are effective for fiscal years
beginning after December 15, 1997. Management believes that they currently do
not have items that would require presentation in a separate statement of
comprehensive income.
In June 1997, the FASB also issued Statement of Financial Accounting
Standards No. 131, Disclosures about Segments of an Enterprise and Related
Information, ("FASB No. 131"), which establishes standards for the way that
public business enterprises report information about operating segments in
annual financial statements and require that those enterprises report selected
information about operating segments in interim financial reports issued to
shareholders. This statement is effective for financial statements for periods
beginning after December 15, 1997, and requires that comparative information
from earlier years be restated to conform to the requirements of this standard.
15) Pro Forma Financial Information (unaudited)
The following pro forma financial information for the years ended December 31,
1997 and 1996 are presented as if the acquisitions, disposition and common stock
offerings in 1996, the RM Transaction, the Mack Transaction and 1997 stock
offering and the 1997 acquisitions of 1345 Campus, Westlakes, Shelton Place, 200
Corporate, Three Independence, The Trooper Building, Concord Plaza and Princeton
Overlook had all occurred on January 1, 1996. The pro forma financial
information excludes any deduction for the non-recurring merger-related charges
and the beneficial conversion feature charge included in the Company's
historical information for the year ended December 31, 1997. In management's
opinion, all adjustments necessary to reflect the effects of these transactions
have been made.
This pro forma financial information is not necessarily indicative of what
the actual results of operations of the Company would have been assuming such
transactions had been completed as of January 1, 1996, nor do they represent the
results of operations of future periods.
- --------------------------------------------------------------------------------
Year Ended December 31, 1997 1996
================================================================================
Total revenues $429,796 $407,181
Operating and other expenses 129,293 125,618
General and administrative 24,112 21,462
Depreciation and amortization 61,197 59,440
Interest expense 66,496 67,217
- --------------------------------------------------------------------------------
Income before minority interest and
extraordinary item 148,698 133,444
Minority interest 30,112 28,555
- --------------------------------------------------------------------------------
Income before extraordinary item $118,586 $104,889
================================================================================
Basic earnings per common share $ 2.39 $ 2.12
================================================================================
Basic weighted average shares outstanding 49,676 49,401
================================================================================
F-19
<PAGE>
Notes
Mack-Cali Realty Corporation and Subsidiaries
16) Condensed Quarterly Financial Information (unaudited)
The following summarizes the condensed quarterly financial information for the
Company:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Quarter Ended 1997 December 31 September 30 June 30 March 31
====================================================================================================================================
<S> <C> <C> <C> <C>
Total revenues $ 74,495 $ 62,609 $ 60,542 $ 52,155
Operating and other expenses 22,580 18,928 18,068 15,574
General and administrative 5,260 3,675 3,754 3,173
Depreciation and amortization 11,194 9,339 8,799 7,493
Interest expense 10,680 10,694 9,884 7,820
Non-recurring merger-related charges 46,519 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
(Loss) income before minority interest and extraordinary item (21,738) 19,973 20,037 18,095
Minority interest 25,716 2,015 2,012 1,636
- ------------------------------------------------------------------------------------------------------------------------------------
(Loss) income before extraordinary item (47,454) 17,958 18,025 16,459
Extraordinary item--loss on early retirement debt
(Net of minority interest's share of $402) -- 3,583 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net (loss) income $(47,454) $ 14,375 $ 18,025 $ 16,459
====================================================================================================================================
Basic earnings per common share:
(Loss) income before extraordinary item $ (1.00) $ 0.49 $ 0.49 $ 0.45
Extraordinary item--loss on early retirement of debt -- (0.10) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net (loss) income $ (1.00) $ 0.39 $ 0.49 $ 0.45
====================================================================================================================================
Diluted earnings per common share:
(Loss) income before extraordinary item $ (1.00) $ 0.48 $ 0.49 $ 0.44
Extraordinary item -- (0.09) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net (loss) income $ (1.00) $ 0.39 $ 0.49 $ 0.44
====================================================================================================================================
Dividends declared per common share $ 0.50 $ 0.50 $ 0.45 $ 0.45
====================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Quarter Ended 1996 December 31 September 30 June 30 March 31
====================================================================================================================================
<S> <C> <C> <C> <C>
Total revenues $ 32,370 $ 22,518 $ 21,013 $ 19,571
Operating and other expenses 9,404 7,035 6,579 6,644
General and administrative 2,365 1,371 1,128 936
Depreciation and amortization 4,880 3,469 3,348 3,034
Interest expense 4,665 2,999 3,265 2,829
- ------------------------------------------------------------------------------------------------------------------------------------
Income before gain on sale of rental property,
minority interest and extraordinary item 11,056 7,644 6,693 6,128
Gain on sale of rental property -- -- -- 5,658
- ------------------------------------------------------------------------------------------------------------------------------------
Income before minority interest and extraordinary item 11,056 7,644 6,693 11,786
Minority interest 894 1,045 1,009 1,812
- ------------------------------------------------------------------------------------------------------------------------------------
Income before extraordinary item 10,162 6,599 5,684 9,974
Extraordinary item--loss on early retirement debt
(Net of minority interest's share of $86) -- -- -- 475
- ------------------------------------------------------------------------------------------------------------------------------------
Net income $ 10,162 $ 6,599 $ 5,684 $ 9,499
====================================================================================================================================
Basic earnings per common share:
Income before extraordinary item $ 0.39 $ 0.39 $ 0.37 $ 0.66
Extraordinary item--loss on early retirement of debt -- -- -- (0.03)
- ------------------------------------------------------------------------------------------------------------------------------------
Net income $ 0.39 $ 0.39 $ 0.37 $ 0.63
====================================================================================================================================
Diluted earnings per common share:
Income before extraordinary item $ 0.38 $ 0.38 $ 0.37 $ 0.65
Extraordinary item -- -- -- (0.03)
- ------------------------------------------------------------------------------------------------------------------------------------
Net income $ 0.38 $ 0.38 $ 0.37 $ 0.62
====================================================================================================================================
Dividends declared per common share $ 0.45 $ 0.45 $ 0.43 $ 0.43
====================================================================================================================================
</TABLE>
F-20
<PAGE>
Mack-Cali Realty Corporation
Real Estate Investments and Accumulated Depreciation
December 31, 1997
(dollars in thousands)
SCHEDULE III
<TABLE>
<CAPTION>
Initial Costs Costs
------------------- Capitalized
Year Related Building and Subsequent
Property Location (2) Built Acquired Encumbrances Land Improvements to Acquisition
- --------------------- ----- -------- ------------ ---- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
ATLANTIC COUNTY, NEW JERSEY
Egg Harbor
100 Decadon Drive (O).............. 1987 1995 -- $ 300 $ 3,282 $ 71
200 Decadon Drive (O).............. 1991 1995 -- 369 3,241 97
BERGEN COUNTY, NEW JERSEY
Fair Lawn
17-17 Rte 208 N.(O)................ 1987 1995 $18,033 3,067 19,415 282
Fort Lee
One Bridge Plaza (O)............... 1981 1996 13,800 2,439 24,462 1,137
Little Ferry
200 Riser Road (O)................. 1974 1997 7,006 3,888 15,551 --
Montvale
135 Chestnut Ridge Road (O)........ 1981 1997 -- 2,587 10,350 --
95 Chestnut Ridge Road (O)......... 1975 1997 1,183 1,227 4,907 --
Paramus
140 Ridgewood Avenue (O)........... 1981 1997 -- 7,932 31,729 --
15 East Midland Avenue (O)......... 1988 1997 28,022 10,375 41,497 --
461 From Road (O).................. 1988 1997 29,890 13,194 52,778 --
61 South Paramus Avenue (O)........ 1985 1997 -- 9,005 36,018 --
650 From Road (O).................. 1978 1997 -- 10,487 41,949 --
Rochelle Park
120 Passaic Street (O)............. 1972 1997 -- 1,354 5,415 --
365 West Passaic Street (O)........ 1976 1997 -- 4,148 16,592 --
Saddle River
1 Lake Street (O).................. 1973/94 1997 -- 13,952 55,812 --
Woodcliff Lake
400 Chestnut Ridge Road (O)........ 1982 1997 15,281 4,201 16,802 --
470 Chestnut Ridge Road (O)........ 1987 1997 -- 2,346 9,385 --
530 Chestnut Ridge Road (O)........ 1986 1997 -- 1,860 7,441 --
50 Tice Boulevard (O).............. 1984 1994 19,300 4,500 -- 25,325
300 Tice Boulevard (O)............. 1991 1996 17,400 5,424 29,688 162
BURLINGTON COUNTY, NEW JERSEY
Delran
Tenby Chase Apartments (M)......... 1970 1994 -- 396 -- 5,107
Moorestown
224 Strawbridge Drive (O).......... 1984 1997 -- 766 4,334 1,381
228 Strawbridge Drive (O).......... 1984 1997 -- 767 4,333 383
ESSEX COUNTY, NEW JERSEY
Millburn
150 J.F. Kennedy Parkway (O)....... 1980 1997 28,890 12,606 50,425 --
Roseland
101 Eisenhower Parkway (O)......... 1980 1994 10,900 228 -- 13,930
103 Eisenhower Parkway (O)......... 1985 1994 11,200 -- -- 14,040
HUDSON COUNTY, NEW JERSEY
Jersey City
95 Christopher Columbus Drive (O).. 1989 1994 74,600 6,205 -- 79,479
Harborside Financial Center Plaza I (O) 1983 1996 -- 3,923 51,013 5
Harborside Financial Center Plaza II (O) 1990 1996 48,099 17,655 101,546 1,343
Harborside Financial Center Plaza III (O) 1990 1996 107,635 17,655 101,878 367
</TABLE>
F-21
<PAGE>
<TABLE>
<CAPTION>
Gross Amount at Which
Carried at Close of
Period (1)
------------------------------
Building and Accumulated
Property Location (2) Land Improvements Total Depreciation
- --------------------- ---- ------------ ----- ------------
<S> <C> <C> <C> <C>
ATLANTIC COUNTY, NEW JERSEY
Egg Harbor
100 Decadon Drive (O).............. $ 300 $ 3,353 $ 3,653 $ 180
200 Decadon Drive (O).............. 369 3,338 3,707 193
BERGEN COUNTY, NEW JERSEY
Fair Lawn
17-17 Rte 208 N.(O)................ 3,067 19,697 22,764 1,420
Fort Lee
One Bridge Plaza (O)............... 2,439 25,599 28,038 644
Little Ferry
200 Riser Road (O)................. 3,888 15,551 19,439 17
Montvale
135 Chestnut Ridge Road (O)........ 2,587 10,350 12,937 11
95 Chestnut Ridge Road (O)......... 1,227 4,907 6,134 5
Paramus
140 Ridgewood Avenue (O)........... 7,932 31,729 39,661 35
15 East Midland Avenue (O)......... 10,375 41,497 51,872 46
461 From Road (O).................. 13,194 52,778 65,972 58
61 South Paramus Avenue (O)........ 9,005 36,018 45,023 40
650 From Road (O).................. 10,487 41,949 52,436 46
Rochelle Park
120 Passaic Street (O)............. 1,354 5,415 6,769 6
365 West Passaic Street (O)........ 4,148 16,592 20,740 18
Saddle River
1 Lake Street (O).................. 13,952 55,812 69,764 62
Woodcliff Lake
400 Chestnut Ridge Road (O)........ 4,201 16,802 21,003 16
470 Chestnut Ridge Road (O)........ 2,346 9,385 11,731 10
530 Chestnut Ridge Road (O)........ 1,860 7,441 9,301 8
50 Tice Boulevard (O).............. 4,500 25,325 29,825 9,453
300 Tice Boulevard (O)............. 5,424 29,850 35,274 813
BURLINGTON COUNTY, NEW JERSEY
Delran
Tenby Chase Apartments (M)......... 396 5,107 5,503 3,138
Moorestown
224 Strawbridge Drive (O).......... 766 5,715 6,481 --
228 Strawbridge Drive (O).......... 767 4,716 5,483 --
ESSEX COUNTY, NEW JERSEY
Millburn
150 J.F. Kennedy Parkway (O)....... 12,606 50,425 63,031 56
Roseland
101 Eisenhower Parkway (O)......... 228 13,930 14,158 6,849
103 Eisenhower Parkway (O)......... 2,300 11,740 14,040 4,643
HUDSON COUNTY, NEW JERSEY
Jersey City
95 Christopher Columbus Drive (O).. 6,205 79,479 85,684 19,212
Harborside Financial Center Plaza I (O) 3,923 51,018 54,941 1,488
Harborside Financial Center Plaza II (O) 17,843 101,721 119,544 2,994
Harborside Financial Center Plaza III (O) 17,823 102,077 119,900 2,993
</TABLE>
F-22
<PAGE>
SCHEDULE III
<TABLE>
<CAPTION>
Initial Costs Costs
------------------- Capitalized
Year Related Building and Subsequent
Property Location (2) Built Acquired Encumbrances Land Improvements to Acquisition
- --------------------- ----- -------- ------------ ---- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
MERCER COUNTY, NEW JERSEY
Hamilton Township
100 Horizon Drive (F) 1989 1995 -- 205 1,676 --
200 Horizon Drive (F) 1991 1995 -- 205 3,027 1
300 Horizon Drive (F) 1989 1995 -- 379 4,355 8
500 Horizon Drive (F) 1990 1995 -- 379 3,395 86
Princeton
5 Vaughn Drive (O) 1987 1995 -- 657 9,800 148
400 Alexander Road (O) 1987 1995 -- 344 3,917 2,397
103 Carnegie Center (O) 1984 1996 -- 2,566 7,868 362
100 Overlook Center (O) 1988 1997 -- 4,068 23,150 --
MIDDLESEX COUNTY, NEW JERSEY
East Brunswick
377 Summerhill Road (O)............ 1977 1997 -- 649 2,594 --
South Brunswick
3 Independence Way (O)............. 1983 1997 -- 1,997 11,391 --
Woodbridge
581 Main Street (O)................ 1991 1997 24,707 3,237 12,949 --
MONMOUTH COUNTY, NEW JERSEY
Neptune
3600 Route 66 (O).................. 1989 1995 12,200 1,098 18,146 40
Wall Township
1305 Campus Parkway (O)............ 1988 1995 -- 335 2,560 39
1320 Wykoff Avenue (F)............. 1986 1995 -- 255 1,285 --
1324 Wykoff Avenue (F)............. 1987 1995 -- 230 1,439 88
1325 Campus Parkway (F)............ 1988 1995 -- 270 2,928 24
1340 Campus Parkway (F)............ 1992 1995 -- 489 4,621 100
1350 Campus Parkway (O)............ 1990 1995 -- 454 7,134 487
1433 Highway 34 (F)................ 1985 1995 -- 889 4,321 241
1345 Campus Parkway (F)............ 1995 1997 -- 1,023 5,703 --
MORRIS COUNTY, NEW JERSEY
Florham Park
325 Columbia Parkway (O)........... 1987 1994 12,800 1,564 -- 15,116
Parsippany
600 Parsippany Road (O)............ 1978 1994 -- 1,257 5,594 444
Morris Plains
201 Littleton Road (O)............. 1979 1997 -- 2,407 9,627 --
250 Johnston Road (O).............. 1977 1997 2,354 2,004 8,016 --
Morris Township
340 Mt. Kemble Avenue (O).......... 1985 1997 32,178 13,624 54,496 --
412 Mt. Kemble Avenue (O).......... 1986 1997 40,025 15,737 62,954 --
PASSAIC COUNTY, NEW JERSEY
Clifton
777 Passaic Avenue (O)............. 1983 1994 -- -- -- 6,932
Totowa
11 Commerce Way (F)................ 1989 1995 -- 586 2,986 65
120 Commerce Way (F)............... 1994 1995 -- 228 -- 1,187
140 Commerce Way (F)............... 1994 1995 -- 229 -- 1,187
20 Commerce Way (F)................ 1992 1995 -- 516 3,108 26
29 Commerce Way (F)................ 1990 1995 -- 586 3,092 225
40 Commerce Way (F)................ 1987 1995 -- 516 3,260 399
45 Commerce Way (F)................ 1992 1995 -- 536 3,379 103
60 Commerce Way (F)................ 1988 1995 -- 526 3,257 226
999 Riverview Drive (O)............ 1988 1995 -- 476 6,024 115
100 Commerce Way (F)............... 1996 1996 -- 226 -- 1,615
80 Commerce Way (F)................ 1996 1996 -- 227 -- 1,616
</TABLE>
F-23
<PAGE>
<TABLE>
<CAPTION>
Gross Amount at Which
Carried at Close of
Period (1)
------------------------------
Building and Accumulated
Property Location (2) Land Improvements Total Depreciation
- --------------------- ---- ------------ ----- ------------
<S> <C> <C> <C> <C>
MERCER COUNTY, NEW JERSEY
Hamilton Township
100 Horizon Drive (F) ............. 205 1,676 1,881 99
200 Horizon Drive (F) ............. 205 3,028 3,233 164
300 Horizon Drive (F) ............. 379 4,363 4,742 237
500 Horizon Drive (F) ............. 379 3,481 3,860 204
Princeton
5 Vaughn Drive (O) ................ 657 9,948 10,605 620
400 Alexander Road (O) ............ 344 6,314 6,658 415
103 Carnegie Center (O) ........... 2,566 8,230 10,796 397
100 Overlook Center (O) ........... 4,068 23,150 27,218 --
MIDDLESEX COUNTY, NEW JERSEY
East Brunswick
377 Summerhill Road (O)............ 649 2,594 3,243 3
South Brunswick
3 Independence Way (O)............. 1,997 11,391 13,388 95
Woodbridge
581 Main Street (O)................ 3,237 12,949 16,186 14
MONMOUTH COUNTY, NEW JERSEY
Neptune
3600 Route 66 (O).................. 1,098 18,186 19,284 987
Wall Township
1305 Campus Parkway (O)............ 335 2,599 2,934 166
1320 Wykoff Avenue (F)............. 255 1,285 1,540 70
1324 Wykoff Avenue (F)............. 230 1,527 1,757 78
1325 Campus Parkway (F)............ 270 2,952 3,222 166
1340 Campus Parkway (F)............ 489 4,721 5,210 250
1350 Campus Parkway (O)............ 454 7,621 8,075 427
1433 Highway 34 (F)................ 889 4,562 5,451 282
1345 Campus Parkway (F)............ 1,023 5,703 6,726 133
MORRIS COUNTY, NEW JERSEY
Florham Park
325 Columbia Parkway (O)........... 1,564 15,116 16,680 5,024
Parsippany
600 Parsippany Road (O)............ 1,257 6,038 7,295 493
Morris Plains
201 Littleton Road (O)............. 2,407 9,627 12,034 11
250 Johnston Road (O).............. 2,004 8,016 10,020 9
Morris Township
340 Mt. Kemble Avenue (O).......... 13,624 54,496 68,120 60
412 Mt. Kemble Avenue (O).......... 15,737 62,954 78,691 70
PASSAIC COUNTY, NEW JERSEY
Clifton
777 Passaic Avenue (O)............. 1,100 5,832 6,932 2,230
Totowa
11 Commerce Way (F)................ 586 3,051 3,637 167
120 Commerce Way (F)............... 228 1,187 1,415 --
140 Commerce Way (F)............... 229 1,187 1,416 128
20 Commerce Way (F)................ 516 3,134 3,650 169
29 Commerce Way (F)................ 586 3,317 3,903 214
40 Commerce Way (F)................ 516 3,659 4,175 209
45 Commerce Way (F)................ 536 3,482 4,018 221
60 Commerce Way (F)................ 526 3,483 4,009 222
999 Riverview Drive (O)............ 476 6,139 6,615 345
100 Commerce Way (F)............... 226 1,615 1,841 79
80 Commerce Way (F)................ 227 1,616 1,843 79
</TABLE>
F-24
<PAGE>
SCHEDULE III
<TABLE>
<CAPTION>
Initial Costs Costs
------------------- Capitalized
Year Related Building and Subsequent
Property Location (2) Built Acquired Encumbrances Land Improvements to Acquisition
- --------------------- ----- -------- ------------ ---- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Wayne
201 Willowbrook Boulevard (O)...... 1970 1997 11,637 3,103 12,410 --
SOMERSET COUNTY, NEW JERSEY
Basking Ridge
222 Mt. Airy Road (O).............. 1986 1996 -- 775 3,636 16
233 Mt. Airy Road (O).............. 1987 1996 -- 1,034 5,033 16
Bridgewater
721 Route 202/206 (O).............. 1989 1997 24,315 6,730 26,919 --
UNION COUNTY, NEW JERSEY
Clark
100 Walnut Avenue (O).............. 1985 1994 13,900 -- -- 17,299
Cranford
11 Commerce Drive (O).............. 1981 1994 -- 470 -- 5,807
20 Commerce Drive (O).............. 1990 1994 11,000 2,346 -- 21,192
6 Commerce Drive (O)............... 1973 1994 2,900 250 -- 2,655
65 Jackson Drive (O)............... 1984 1994 -- 541 -- 6,944
12 Commerce Drive (O).............. 1967 1997 -- 887 3,549 --
New Providence
890 Mountain Road (O).............. 1977 1997 8,551 2,796 11,185 --
DUTCHESS COUNTY, NEW YORK
Fishkill
300 South Lake Drive (O)........... 1987 1997 -- 2,258 9,031 --
NASSAU COUNTY, NEW YORK
North Hempstead
111 East Shore Road (O)............ 1980 1997 8,000 2,093 8,370 --
600 Community Drive (O)............ 1983 1997 -- 11,018 44,070 --
ROCKLAND COUNTY, NEW YORK
Suffern
400 Rella Boulevard (O)............ 1988 1995 -- 1,090 13,412 457
WESTCHESTER COUNTY, NEW YORK
Elmsford
1 Warehouse Lane (I)............... 1957 1997 161 3 268 --
1 Westchester Plaza (F)............ 1967 1997 1,320 199 2,023 17
100 Clearbrook Road (O)............ 1975 1997 1,281 220 5,366 98
101 Executive Boulevard (O)........ 1971 1997 3,600 267 5,838 19
11 Clearbrook Road (F)............. 1974 1997 1,367 149 2,159 --
150 Clearbrook Road (F)............ 1975 1997 4,464 497 7,030 --
175 Clearbrook Road (F)............ 1973 1997 4,826 655 7,473 197
2 Warehouse Lane (I)............... 1957 1997 402 4 672 --
2 Westchester Plaza (F)............ 1968 1997 1,760 234 2,726 --
200 Clearbrook Road (F)............ 1974 1997 4,263 579 6,620 8
250 Clearbrook Road (F)............ 1973 1997 5,631 867 8,647 205
3 Warehouse Lane (I)............... 1957 1997 1,166 21 1,948 --
3 Westchester Plaza (F)............ 1969 1997 5,080 655 7,936 --
300 Executive Boulevard (F)........ 1970 1997 2,403 460 3,609 --
350 Executive Boulevard (F)........ 1970 1997 -- 100 1,793 --
399 Executive Boulevard (F)........ 1962 1997 4,560 531 7,191 --
4 Warehouse Lane (I).............. 1957 1997 8,043 84 13,393 8
4 Westchester Plaza (F)............ 1969 1997 2,400 320 3,729 12
400 Executive Boulevard (F)........ 1970 1997 2,403 2,202 1,846 --
5 Warehouse Lane (I)............... 1957 1997 2,855 19 4,804 3
5 Westchester Plaza (F)............ 1969 1997 1,200 118 1,949 --
50 Executive Boulevard (F)......... 1969 1997 1,680 237 2,617 --
500 Executive Boulevard (F)........ 1970 1997 2,643 258 4,183 --
525 Executive Boulevard (F)........ 1972 1997 -- 345 5,499 --
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Gross Amount at Which
Carried at Close of
Period (1)
------------------------------
Building and Accumulated
Property Location (2) Land Improvements Total Depreciation
- --------------------- ---- ------------ ----- ------------
<S> <C> <C> <C> <C>
Wayne
201 Willowbrook Boulevard (O)...... 3,103 12,410 15,513 14
SOMERSET COUNTY, NEW JERSEY
Basking Ridge
222 Mt. Airy Road (O).............. 775 3,652 4,427 129
233 Mt. Airy Road (O).............. 1,034 5,049 6,083 179
Bridgewater
721 Route 202/206 (O).............. 6,730 26,919 33,649 30
UNION COUNTY, NEW JERSEY
Clark
100 Walnut Avenue (O).............. 1,822 15,477 17,299 5,750
Cranford
11 Commerce Drive (O).............. 470 5,807 6,277 2,824
20 Commerce Drive (O).............. 2,346 21,192 23,538 4,980
6 Commerce Drive (O)............... 250 2,655 2,905 1,458
65 Jackson Drive (O)............... 541 6,944 7,485 2,475
12 Commerce Drive (O).............. 887 3,549 4,436 4
New Providence
890 Mountain Road (O).............. 2,796 11,185 13,981 12
DUTCHESS COUNTY, NEW YORK
Fishkill
300 South Lake Drive (O)........... 2,258 9,031 11,289 10
NASSAU COUNTY, NEW YORK
North Hempstead
111 East Shore Road (O)............ 2,093 8,370 10,463 9
600 Community Drive (O)............ 11,018 44,070 55,088 49
ROCKLAND COUNTY, NEW YORK
Suffern
400 Rella Boulevard (O)............ 1,090 13,869 14,959 982
WESTCHESTER COUNTY, NEW YORK
Elmsford
1 Warehouse Lane (I)............... 3 268 271 6
1 Westchester Plaza (F)............ 199 2,040 2,239 47
100 Clearbrook Road (O)............ 220 5,464 5,684 125
101 Executive Boulevard (O)........ 267 5,857 6,124 136
11 Clearbrook Road (F)............. 149 2,159 2,308 49
150 Clearbrook Road (F)............ 497 7,030 7,527 161
175 Clearbrook Road (F)............ 655 7,670 8,325 184
2 Warehouse Lane (I)............... 4 672 676 15
2 Westchester Plaza (F)............ 234 2,726 2,960 62
200 Clearbrook Road (F)............ 579 6,628 7,207 152
250 Clearbrook Road (F)............ 867 8,852 9,719 203
3 Warehouse Lane (I)............... 21 1,948 1,969 45
3 Westchester Plaza (F)............ 655 7,936 8,591 182
300 Executive Boulevard (F)........ 460 3,609 4,069 83
350 Executive Boulevard (F)........ 100 1,793 1,893 41
399 Executive Boulevard (F)........ 531 7,191 7,722 165
4 Warehouse Lane (I).............. 84 13,401 13,485 309
4 Westchester Plaza (F)............ 320 3,741 4,061 87
400 Executive Boulevard (F)........ 2,202 1,846 4,048 42
5 Warehouse Lane (I)............... 19 4,807 4,826 111
5 Westchester Plaza (F)............ 118 1,949 2,067 45
50 Executive Boulevard (F)......... 237 2,617 2,854 60
500 Executive Boulevard (F)........ 258 4,183 4,441 96
525 Executive Boulevard (F)........ 345 5,499 5,844 126
</TABLE>
F-25
<PAGE>
SCHEDULE III
<TABLE>
<CAPTION>
Initial Costs Costs
------------------- Capitalized
Year Related Building and Subsequent
Property Location (2) Built Acquired Encumbrances Land Improvements to Acquisition
- --------------------- ----- -------- ------------ ---- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
570 Taxter Road (O)................... 1972 1997 3,847 438 6,078 18
6 Warehouse Lane (I).................. 1982 1997 2,654 10 4,419 --
6 Westchester Plaza (F)............... 1968 1997 1,280 164 1,998 --
7 Westchester Plaza (F)............... 1972 1997 2,720 286 4,321 9
700 Executive Boulevard (L)........... N/A 1997 -- 970 -- --
75 Clearbrook Road (F)................ 1990 1997 -- 2,313 4,717 --
77 Executive Boulevard (F)............ 1977 1997 3,982 34 1,104 --
8 Westchester Plaza (F)............... 1971 1997 3,378 447 5,262 111
85 Executive Boulevard (F)............ 1968 1997 1,562 155 2,507 --
Hawthorne
1 Skyline Drive (O)................... 1980 1997 -- 66 1,711 --
10 Skyline Drive (F).................. 1985 1997 1,729 134 2,799 109
11 Skyline Drive (F).................. 1989 1997 -- -- 4,788 --
15 Skyline Drive (F).................. 1989 1997 -- -- 7,449 305
17 Skyline Drive (O).................. 1989 1997 -- -- 7,269 --
2 Skyline Drive (O)................... 1987 1997 -- 109 3,128 --
200 Saw Mill River Road (F)........... 1965 1997 2,172 353 3,353 4
30 Saw Mill River Road (O)............ 1982 1997 21,553 2,355 34,254 --
4 Skyline Drive (F)................... 1987 1997 -- 363 7,513 210
8 Skyline Drive (F)................... 1985 1997 2,734 212 4,410 --
Tarrytown
200 White Plains Road (O)............. 1982 1997 5,150 378 8,367 335
220 White Plains Road (O)............. 1984 1997 5,030 367 8,112 15
230 White Plains Road (R)............. 1984 1997 1,158 124 1,845 --
White Plains
1 Barker Avenue (O)................... 1975 1997 -- 208 9,629 33
1 Water Street (O).................... 1979 1997 3,298 211 5,382 6
11 Martine Avenue (O)................. 1987 1997 15,465 127 26,833 --
25 Martine Avenue (M)................. 1987 1997 -- 120 11,366 --
3 Barker Avenue (O)................... 1983 1997 122 7,864 249
50 Main Street (O).................... 1985 1997 27,919 564 48,105 144
Yonkers
1 Enterprise Boulevard (L)............ N/A 1997 -- 1,380 -- --
1 Executive Boulevard (O)............. 1982 1997 684 1,104 11,904 24
1 Odell Plaza (F)..................... 1980 1997 -- 1,206 6,815 --
100 Corporate Boulevard (F)........... 1987 1997 6,211 602 9,910 --
2 Executive Plaza (R)................. 1986 1997 7,722 89 2,439 --
3 Executive Plaza (O)................. 1987 1997 -- 385 6,259 4
4 Executive Plaza (F)................. 1986 1997 1,528 584 6,134 162
5 Odell Plaza (F)..................... 1983 1997 -- 331 2,988 --
6 Executive Plaza (F)................. 1987 1997 -- 546 7,246 --
7 Odell Plaza (F)..................... 1984 1997 -- 419 4,418 53
200 Corporate Boulevard South (F)..... 1990 1997 -- 502 7,575 --
CHESTER COUNTY, PENNSYLVANIA
Berwyn
1000 Westlakes Drive (O).............. 1989 1997 -- 619 9,016 60
1055 Westlakes Drive (O).............. 1990 1997 -- 1,951 19,046 116
1205 Westlakes Drive (O).............. 1988 1997 -- 1,323 20,098 127
1235 Westlakes Drive (O).............. 1986 1997 -- 1,417 21,215 136
DELAWARE COUNTY, PENNSYLVANIA
Media
1400 Providence Road - Center I (O)... 1986 1996 -- 1,042 9,054 532
1400 Providence Road - Center II (O).. 1990 1996 -- 1,543 16,464 518
Lester
100 Stevens Drive (O)................. 1986 1996 -- 1,349 10,018 109
200 Stevens Drive (O)................. 1987 1996 -- 1,644 20,186 133
300 Stevens Drive (O)................. 1992 1996 -- 491 9,490 74
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Gross Amount at Which
Carried at Close of
Period (1)
------------------------------
Building and Accumulated
Property Location (2) Land Improvements Total Depreciation
- --------------------- ---- ------------ ----- ------------
<S> <C> <C> <C> <C>
570 Taxter Road (O)................... 438 6,096 6,534 143
6 Warehouse Lane (I).................. 10 4,419 4,429 101
6 Westchester Plaza (F)............... 164 1,998 2,162 46
7 Westchester Plaza (F)............... 286 4,330 4,616 100
700 Executive Boulevard (L)........... 970 -- 970 --
75 Clearbrook Road (F)................ 2,313 4,717 7,030 108
77 Executive Boulevard (F)............ 34 1,104 1,138 25
8 Westchester Plaza (F)............... 447 5,373 5,820 128
85 Executive Boulevard (F)............ 155 2,507 2,662 57
Hawthorne
1 Skyline Drive (O)................... 66 1,711 1,777 39
10 Skyline Drive (F).................. 134 2,908 3,042 69
11 Skyline Drive (F).................. -- 4,788 4,788 110
15 Skyline Drive (F).................. -- 7,754 7,754 211
17 Skyline Drive (O).................. -- 7,269 7,269 167
2 Skyline Drive (O)................... 109 3,128 3,237 72
200 Saw Mill River Road (F)........... 353 3,357 3,710 77
30 Saw Mill River Road (O)............ 2,355 34,254 36,609 785
4 Skyline Drive (F)................... 363 7,723 8,086 187
8 Skyline Drive (F)................... 212 4,410 4,622 101
Tarrytown
200 White Plains Road (O)............. 378 8,702 9,080 250
220 White Plains Road (O)............. 367 8,127 8,494 193
230 White Plains Road (R)............. 124 1,845 1,969 42
White Plains
1 Barker Avenue (O)................... 208 9,662 9,870 225
1 Water Street (O).................... 211 5,388 5,599 124
11 Martine Avenue (O)................. 127 26,833 26,960 615
25 Martine Avenue (M)................. 120 11,366 11,486 260
3 Barker Avenue (O)................... 122 8,113 8,235 191
50 Main Street (O).................... 564 48,249 48,813 1,111
Yonkers
1 Enterprise Boulevard (L)............ 1,380 -- 1,380 --
1 Executive Boulevard (O)............. 1,104 11,928 13,032 284
1 Odell Plaza (F)..................... 1,206 6,815 8,021 156
100 Corporate Boulevard (F)........... 602 9,910 10,512 227
2 Executive Plaza (R)................. 89 2,439 2,528 56
3 Executive Plaza (O)................. 385 6,263 6,648 143
4 Executive Plaza (F)................. 584 6,296 6,880 150
5 Odell Plaza (F)..................... 331 2,988 3,319 68
6 Executive Plaza (F)................. 546 7,246 7,792 166
7 Odell Plaza (F)..................... 419 4,471 4,890 108
200 Corporate Boulevard South (F)..... 502 7,575 8,077 174
CHESTER COUNTY, PENNSYLVANIA
Berwyn
1000 Westlakes Drive (O).............. 619 9,076 9,695 167
1055 Westlakes Drive (O).............. 1,951 19,162 21,113 343
1205 Westlakes Drive (O).............. 1,323 20,225 21,548 359
1235 Westlakes Drive (O).............. 1,417 21,351 22,768 391
DELAWARE COUNTY, PENNSYLVANIA
Media
1400 Providence Road - Center I (O)... 1,042 9,586 10,628 395
1400 Providence Road - Center II (O).. 1,543 16,982 18,525 711
Lester
100 Stevens Drive (O)................. 1,349 10,127 11,476 253
200 Stevens Drive (O)................. 1,644 20,319 21,963 508
300 Stevens Drive (O)................. 491 9,564 10,055 239
</TABLE>
F-26
<PAGE>
SCHEDULE III
<TABLE>
<CAPTION>
Initial Costs Costs
------------------- Capitalized
Year Related Building and Subsequent
Property Location (2) Built Acquired Encumbrances Land Improvements to Acquisition
- --------------------- ----- -------- ------------ ---- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
MONTGOMERY COUNTY, PENNSYLVANIA
Lower Providence
1000 Madison Avenue (O)............ 1990 1997 -- 1,713 12,559 1
Plymouth Meeting
Five Sentry East (O)............... 1984 1996 -- 642 8,168 255
Five Sentry West (O)............... 1984 1996 -- 268 3,406 34
1150 Plymouth Meeting Mall (O)..... 1970 1997 -- 125 499 --
FAIRFIELD COUNTY, CONNECTICUT
Stamford
419 West Avenue (F)................ 1986 1997 -- 4,538 9,246 --
500 West Avenue (F)................ 1988 1997 -- 415 1,679 --
550 West Avenue (F)................ 1990 1997 -- 1,975 3,856 --
Shelton
1000 Bridgeport Avenue (O)......... 1986 1997 -- 773 15,036 --
BEXAR COUNTY, TEXAS
San Antonio
111 Soledad (O).................... 1918 1997 -- 2,004 8,017 --
1777 N.E. Loop 410 (O)............. 1986 1997 -- 3,119 12,477 --
84 N.E. Loop 410 (O)............... 1971 1997 -- 2,596 10,382 --
200 Concord Plaza Drive (O)........ 1986 1997 -- 5,109 28,967 --
COLLIN COUNTY, TEXAS
Plano
555 Republic Place (O)............. 1986 1997 -- 942 3,767 --
DALLAS COUNTY, TEXAS
Dallas
3030 LBJ Freeway (O)............... 1984 1997 -- 6,098 24,366 --
3100 Monticello (O)................ 1984 1997 -- 1,940 7,762 --
8214 Westchester (O)............... 1983 1997 -- 1,705 6,819 --
Irving
2300 Valley View (O)............... 1985 1997 -- 1,913 7,651 --
Richardson
1122 Alma Road (O)................. 1977 1997 -- 754 3,015 --
HARRIS COUNTY, TEXAS
Houston
10497 Town & Country Way (O)....... 1981 1997 -- 1,619 6,476 --
14511 Falling Creek (O)............ 1982 1997 -- 434 1,738 --
1717 St. James Place (O)........... 1975 1997 -- 909 3,636 --
1770 St. James Place (O)........... 1973 1997 -- 730 2,920 --
5225 Katy Freeway (O).............. 1983 1997 -- 1,403 5,610 --
5300 Memorial (O).................. 1982 1997 -- 1,283 7,269 --
POTTER COUNTY, TEXAS
Amarillo
6900 IH - 40 West (O).............. 1986 1997 -- 287 1,147 --
TARRANT COUNTY, TEXAS
Euless
150 West Park Way (O).............. 1984 1997 -- 852 3,410 --
MARICOPA COUNTY, ARIZONA
Glendale
5551 West Talavi Boulevard (O)..... 1991 1997 7,847 2,732 10,927 --
Phoenix
19640 North 31st Street (O)........ 1990 1997 11,518 3,437 13,747 --
</TABLE>
F-27
<PAGE>
<TABLE>
<CAPTION>
Gross Amount at Which
Carried at Close of
Period (1)
------------------------------
Building and Accumulated
Property Location (2) Land Improvements Total Depreciation
- --------------------- ---- ------------ ----- ------------
<S> <C> <C> <C> <C>
MONTGOMERY COUNTY, PENNSYLVANIA
Lower Providence
1000 Madison Avenue (O)............ 1,713 12,559 14,272 32
Plymouth Meeting
Five Sentry East (O)............... 642 8,423 9,065 239
Five Sentry West (O)............... 268 3,440 3,708 100
1150 Plymouth Meeting Mall (O)..... 125 499 624 1
FAIRFIELD COUNTY, CONNECTICUT
Stamford
419 West Avenue (F)................ 4,538 9,246 13,784 213
500 West Avenue (F)................ 415 1,679 2,094 38
550 West Avenue (F)................ 1,975 3,856 5,831 88
Shelton
1000 Bridgeport Avenue (O)......... 773 15,036 15,809 148
BEXAR COUNTY, TEXAS
San Antonio
111 Soledad (O).................... 2,004 8,017 10,021 9
1777 N.E. Loop 410 (O)............. 3,119 12,477 15,596 14
84 N.E. Loop 410 (O)............... 2,596 10,382 12,978 11
200 Concord Plaza Drive (O)........ 5,109 28,967 34,076 30
COLLIN COUNTY, TEXAS
Plano
555 Republic Place (O)............. 942 3,767 4,709 4
DALLAS COUNTY, TEXAS
Dallas
3030 LBJ Freeway (O)............... 6,098 24,366 30,464 27
3100 Monticello (O)................ 1,940 7,762 9,702 9
8214 Westchester (O)............... 1,705 6,819 8,524 8
Irving
2300 Valley View (O)............... 1,913 7,651 9,564 8
Richardson
1122 Alma Road (O)................. 754 3,015 3,769 3
HARRIS COUNTY, TEXAS
Houston
10497 Town & Country Way (O)....... 1,619 6,476 8,095 7
14511 Falling Creek (O)............ 434 1,738 2,172 2
1717 St. James Place (O)........... 909 3,636 4,545 4
1770 St. James Place (O)........... 730 2,920 3,650 3
5225 Katy Freeway (O).............. 1,403 5,610 7,013 6
5300 Memorial (O).................. 1,710 6,841 8,551 8
POTTER COUNTY, TEXAS
Amarillo
6900 IH - 40 West (O).............. 287 1,147 1,434 1
TARRANT COUNTY, TEXAS
Euless
150 West Park Way (O).............. 852 3,410 4,262 4
MARICOPA COUNTY, ARIZONA
Glendale
5551 West Talavi Boulevard (O)..... 2,732 10,927 13,659 12
Phoenix
19640 North 31st Street (O)........ 3,437 13,747 17,184 15
</TABLE>
F-28
<PAGE>
SCHEDULE III
<TABLE>
<CAPTION>
Initial Costs Costs
------------------- Capitalized
Year Related Building and Subsequent
Property Location (2) Built Acquired Encumbrances Land Improvements to Acquisition
- --------------------- ----- -------- ------------ ---- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
20002 North 19th Avenue (O) 1986 1997 -- 1,843 7,371 --
Scottsdale
9060 E. Via Linda Boulevard (O) 1984 1997 10,095 3,720 14,879 --
SAN FRANCISCO COUNTY, CALIFORNIA
San Francisco
760 Market Street (O) 1908 1997 -- 5,588 22,352 --
HILLSBOROUGH COUNTY, FLORIDA
Tampa
501 Kennedy Boulevard (O) 1982 1997 -- 3,959 15,837 --
POLK COUNTY, IOWA
West Des Moines
2600 Westown Parkway (O) 1988 1997 -- 1,708 6,833 --
DOUGLAS COUNTY, NEBRASKA
Omaha
210 South 16th Street (O) 1894 1997 -- 2,559 10,236 --
Projects Under Development -- 1,163 -- 1,073
Furniture, Fixtures & Equipment -- -- -- 4,316
- --------------------------------------------------------------------------------------------------------------------
TOTALS $850,550 $368,684 $2,020,297 $240,635
====================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Gross Amount at Which
Carried at Close of
Period (1)
------------------------------
Building and Accumulated
Property Location (2) Land Improvements Total Depreciation
- --------------------- ---- ------------ ----- ------------
<S> <C> <C> <C> <C>
20002 North 19th Avenue (O) 1,843 7,371 9,214 8
Scottsdale
9060 E. Via Linda Boulevard (O) 3,720 14,879 18,599 16
SAN FRANCISCO COUNTY, CALIFORNIA
San Francisco
760 Market Street (O) 5,588 22,352 27,940 25
HILLSBOROUGH COUNTY, FLORIDA
Tampa
501 Kennedy Boulevard (O) 3,959 15,837 19,796 18
POLK COUNTY, IOWA
West Des Moines
2600 Westown Parkway (O) 1,708 6,833 8,541 8
DOUGLAS COUNTY, NEBRASKA
Omaha
210 South 16th Street (O) 2,559 10,236 12,795 11
Projects Under Development 1,163 1,073 2,236 --
Furniture, Fixtures & Equipment -- 4,316 4,316 1,140
- --------------------------------------------------------------------------------------
TOTALS $374,242 $2,255,374 $2,629,616 $103,133
======================================================================================
</TABLE>
(1) The aggregate cost for federal income tax purposes at December 31, 1997
was approximately $1.68 billion.
(2) Legend of Property Codes:
(O)=Office Property (M)=Multi-family Residential Property
(F)=Office/Flex Property (R)=Stand-alone Retail Property
(I)=Industrial/Warehouse Property (L)=Land Lease
F-29
<PAGE>
Mack-Cali Realty Corporation
Note to Schedule III
Changes in rental properties and accumulated depreciation for the periods ended
December 31, 1997, 1996 and 1995 are as follows:
1997 1996 1995
---------- ---------- ----------
Rental Properties
Balance at beginning of year $ 853,352 $ 387,675 $ 234,470
Additions 1,776,264 473,371 153,753
Retirements/Disposals -- (7,694) (548)
---------- ---------- ----------
Balance at end year $2,629,616 $ 853,352 $ 387,675
========== ========== ==========
Accumulated Depreciation:
Balance at beginning of year $ 68,610 $ 59,095 $ 50,800
Depreciation expense 34,523 12,810 8,807
Retirements/Disposals -- (3,295) (512)
---------- ---------- ----------
Balance at end of year $ 103,133 $ 68,610 $ 59,095
========== ========== ==========
F-30
EXHIBIT NO. 10.126
CONTRIBUTION AND EXCHANGE AGREEMENT
THIS CONTRIBUTION AND EXCHANGE AGREEMENT (the "Agreement") made this 18th day of
October, 1997 among PRINCETON OVERLOOK LIMITED LIABILITY COMPANY
("Contributor"), a limited liability company organized under the laws of the
State of New Jersey having an address at c/o Bessemer Trust Company, N.A., 630
Fifth Avenue, New York, New York 10111, and CALI REALTY, L.P., a Delaware
limited partnership ("CRLP") and CALI REALTY CORPORATION, a Maryland corporation
("Cali", and together with CRLP, collectively, the "Cali Group"), each having an
address at 11 Commerce Drive, Cranford, New Jersey 07016.
RECITALS
A. Contributor is the owner in fee simple of certain property located in
Princeton, New Jersey more particularly described on Schedule 1.1(a).
Contributor desires to contribute such property to CRLP in exchange for (i) cash
and (ii) OP Units ("Units") as described in the OP Agreement (as herein
defined), in a transaction which is structured to partially defer the
recognition of gain by Contributor and/or its members for federal income tax
purposes.
B. The Cali Group desires to accept the contribution of such property in
exchange for cash and the issuance of Units to Contributor upon, and subject to,
the terms, covenants and conditions herein contained.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and for Ten Dollars ($10.00) and other good and valuable consideration,
the mutual receipt and legal sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, do hereby agree as
follows:
1. CONTRIBUTION AND EXCHANGE.
1.1 Upon, and subject to, the terms, covenants and conditions of this
Agreement, on the Closing Date Contributor shall contribute or otherwise
transfer to CRLP, and CRLP shall acquire, all of Contributor's rights, titles
and interest in, to and under the following:
(a) that certain real property situate, lying and being in the State of
New Jersey and being more particularly described on Schedule 1.1(a) (the
"Land"), and all of the improvements located
<PAGE>
on the Land (individually, a "Building", and collectively, the "Improvements");
(b) all rights, privileges, grants and easements appurtenant to
Contributor's interest in the Land and Improvements including, without
limitation, all of Contributor's rights, titles and interests in and to all land
lying in the bed of any public street, road or alley, all mineral and water
rights and all easements, licenses, covenants and rights-of -way or other
appurtenances used in connection with the beneficial use and enjoyment of the
Land 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 computer
programming and software owned or licensed by Contributor and located on any of
the Real Property or used in connection with or in relation to the sale,
management, leasing, promotion, ownership, development, maintenance, use or
occupancy of the Real Property including, without limitation, the items
described on Schedule 1.1(c) (collectively 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 (each a "Lease", and collectively
the "Leases"), and all 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 a tenant's (each a "Tenant", and
collectively the "Tenants") obligations under such Lease;
(e) whatever rights Contributor may have to the tradename "Princeton
Overlook", and any trademark applicable thereto, and all goodwill, if any,
related to said name (the "Tradename");
(f) all assignable permits, licenses, guaranties, approvals,
certificates and warranties relating to the Real Property and the Personal
Property (collectively, the "Permits and Licenses"), and all those contracts and
agreements for the servicing, maintenance and operation of the Real Property, to
the extent CRLP has elected to accept an assignment of same as set forth on
Schedule 1.1(f) ("Service Contracts"), and the telephone numbers in use at any
of the Real Property (together with the Permits and Licenses and the Service
Contracts, collectively the "Intangible Property");
(g) all promotional materials, brochures, prints and/or pictures of the
Land and Improvements (collectively, "Promotional Materials"), books, records,
tenant data, leasing material and
<PAGE>
forms, past and current rent rolls, files, statements, tax returns, market
studies, keys, plans, specifications, reports, tests and other materials of any
kind owned by or in the possession of Contributor which are or may be used by
Contributor in the use and operation of the Real Property or Personal Property
(together with the Promotional Materials, collectively the "Books and Records");
and
(h) all other rights, privileges and appurtenances owned by
Contributor, if any, and in any way related to the rights and interests
described above in this Section (expressly excluding, however, Contributor's
Share (as hereinafter defined)), and any and all rights, payments (including,
without limitation, the reimbursement in the approximate amount of $173,686.00)
and/or entitlements respecting or relating to the D&R interceptor sewer line
(the "Sewer Line Rights and Payments").
The Real Property, the Personal Property, the Leases, the Security Deposits, the
Tradename, the Intangible Property, the Books and Records and the other property
interests being conveyed hereunder are hereinafter collectively referred to as
the "Property".
2. PROPERTY CONTRIBUTION AND
EXCHANGE CONSIDERATION; DEPOSIT.
I. Contributor shall contribute the Property to CRLP or its designee at Closing,
and CRLP shall pay the aggregate amount of $26,850,000.00 ("Consideration") as
follows:
(a) $268,500.00 (together with interest accrued thereon, the "Deposit")
by check, subject to collection, payable to Stewart Title Insurance Company
("Escrow Agent") or, at CRLP's option, by wire transfer of federal funds to an
account designated by Escrow Agent, within three (3) business days after a fully
executed counterpart of this Agreement has been delivered to CRLP, which Deposit
shall be held and delivered in accordance with the terms and conditions of
Section 23 of this Agreement;
(b) Not less than $21,581,500.00 (the "Cash Payment"), but subject to
adjustment as provided in this Agreement, at Closing by the wiring of federal
funds to Contributor to an account designated by such party; and
(c) Not more than $5,000,000.00 at Closing by the issuance of Units to
Contributor and/or its designees (collective "Unitholders"). The aggregate
number of such Units (the "Contributor Units") to be issued to the Unitholders
shall be calculated by dividing (i) $5,000,000.00, by (ii) the Current
<PAGE>
Market Value Per Unit (as hereinafter defined) as of the second Business Day
immediately preceding the Closing Date.
If CRLP shall fail to pay the Deposit to the Escrow Agent in accordance with the
terms and conditions herein contained, at Contributor's option: (i) this
Agreement shall be void ab initio and shall be of no force or effect and neither
the Cali Group nor the Contributor shall have any further obligation to the
other under or by virtue of this Agreement, or (ii) such failure to pay the
Deposit shall be a material breach by CRLP and Contributor shall have a cause of
action against CRLP for the payment of the Deposit, but neither CRLP nor Cali
shall have any other or further liability in excess of the Deposit.
2.2 At Closing, CRLP shall issue to Contributor and/or the Unit Holders
certificates ("Certificates") representing the Contributor Units, which
Certificates shall contain the legend set forth in Section 5.5. All rights and
benefits incidental to the ownership of the Contributor Units including, but not
limited to, the right to receive distributions, voting rights and the right to
exchange the Contributor Units for shares of common stock of Cali ("Common
Stock"), shall accrue for the benefit of the Contributor and/or the Unit Holders
commencing on the Closing Date. Not less than ten (10) days prior to Closing,
Contributor shall advise CRLP of the amount of the Cash Payment to be paid at
Closing and the dollar value of the Units to be issued at Closing, subject to
Section 2.1(a) and (b).
2.3 With respect to the first Partnership Record Date (as defined in
the OP Agreement) on or after the Closing, the Unitholders shall receive
distributions payable with respect to the Contributor Units on a pro rata basis
based upon the number of days during the calendar quarter preceding such
Partnership Record Date that the Unitholders held the Contributor Units. The
Contributor Units to be issued at Closing shall be issued to the Unitholders in
accordance with a letter of direction to be provided by Contributor to the Cali
Group identifying such Unitholders at least three (3) Business Days prior to
Closing.
2.4 For purposes of this Agreement, the following terms shall have the
following meanings:
(a) "Closing Price" means, on any date, with respect to a share of
Common Stock of Cali, the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, for one share of Common Stock of Cali in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange.
<PAGE>
(b) "Common Stock" means the shares of common stock of Cali.
(c) "Current Market Value Per Unit" on any date means the average of
the Closing Price for a share of Common Stock of Cali, for thirty (30)
consecutive Trading Days ending on such date.
(d) "Trading Day" shall mean a day on which the principal national
securities exchange on which the Common Stock of Cali is listed or admitted to
trading is open for the transaction of business.
3. INSPECTION RIGHTS.
3.1 Prior To Closing, CRLP 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,
percolator tests, surveys, architectural, engineering, subdivision,
environmental, access, financial, market analysis, development and economic
feasibility studies and other tests, investigations or studies as CRLP, in its
sole discretion, determines is necessary or desirable in connection with the
Property. CRLP and its agents and contractors may inspect the physical
(including environmental) and financial condition of the Property including, but
not limited to the Leases, Service Contracts, copies of Contributor's tax
returns and the Property financials as of and for the years ending December 31,
1994, 1995 and 1996 certified by Contributor, engineering and environmental
reports, development approval agreements, permits and approvals, Environmental
Documents (as hereinafter defined) provided, however, that nothing contained in
this Section 3.1 shall entitle CRLP to terminate this Agreement or give rise to
any liability on the part of Contributor unless such right of termination or
liability is expressly provided for in the other Sections of this Agreement
(including, without limitation, Sections 4, 5, 7, 8, 9, 10, 12 and 21), all of
which rights are expressly reserved (and are not waived) by CRLP. Contributor
agrees to cooperate with CRLP in such review and inspection at no cost or
expense to Contributor and, to the extent not yet delivered, shall deliver said
documents and information to CRLP promptly. CRLP shall, without representation
or warranty as to the matters contained therein, provide Contributor (unless
such provision is prohibited by the preparer of such report) with copies of any
reports commissioned by CRLP prior to Closing and in its possession relating to
the results of its inspection of the Property including, without limitation, all
studies, reports, surveys and the like, at no cost to the Contributor. CRLP
shall also return all Contributor's documents, studies, reports, leases,
agreements, permits, approvals and the like which were supplied by Contributor
to assist CRLP in conducting its due diligence.
<PAGE>
3.2 Any inspection of a portion of the Property which is leased to a
Tenant shall be subject to the rights of the Tenant under its Lease.
Notwithstanding the foregoing, Contributor shall make all reasonable efforts to
facilitate CRLP's inspection.
3.3 As a condition precedent to any entry on the Property by CRLP, its
contractors or agents, CRLP shall deliver to Contributor evidence of insurance
containing at least the coverages set forth in Schedule 3.3 annexed hereto,
which coverages may be in the form of a blanket policy. CRLP shall, to the
extent reasonably practicable, restore the Property after any such inspection to
its pre-existing condition. CRLP shall further hold and save Contributor
harmless of, from and against any and all loss, cost, damage, injury or expense
arising out of or in any way related to the acts of CRLP, its agents or
contractors in connection with the exercise by CRLP of its rights under this
Section 3. This provision shall survive Closing or termination of this
Agreement, notwithstanding any provision herein to the contrary.
4. TITLE; MATTERS TO WHICH THIS SALE IS SUBJECT.
4.1 The Property is to be contributed to CRLP subject only to the
following (collectively, the "Permitted Encumbrances"):
(a) the liens of real estate taxes, personal property taxes, water
charges, and sewer charges provided same are not due and payable, but subject to
adjustment as provided herein;
(b) the rights of Tenants, as tenants only;
(c) those restrictions, covenants, agreements, easements, matters and
things affecting title to the Real Property as of the date hereof and more
particularly described in Schedule 4.1(c) annexed hereto and by this reference
made a part hereof;
(d) any and all laws, statutes, ordinances, codes, rules, regulations,
requirements, or executive mandates affecting the Real Property as of the date
hereof, so long as there are no engineering or institutional controls including,
without limitation, a deed notice or declaration of environmental restrictions,
a groundwater classification exception area or well restriction area affecting
the Real Property;
(e) the state of facts shown on the survey, if any, described on
Schedule 4.1(e), and any other state of facts which an accurate survey of the
Real Property would actually show, provided same do not impair the use of the
Real Property as it is currently being used and do not render title uninsurable
at standard rates; and
<PAGE>
(f) the Service Contracts, excluding, however, any Service Contract
CRLP advises Contributor to terminate prior to Closing.
4.2 (a) CRLP has, prior to the date hereof, directed Stewart Title
Insurance Company ("Title Company") to prepare, and the Title Company has
prepared and delivered to CRLP and Contributor, title insurance searches and
commitments for an owner's title insurance policy for the Real Property (the
"Title Commitment") which is annexed hereto as Schedule 4.2(a). Contributor
agrees that all of the requirements marked "satisfy" set forth in Schedule B,
Section I of the Title Commitment shall be met prior to Closing, and that all of
the items marked "Omit by Contributor" set forth in Schedule B, Section II of
the Title Commitment shall be removed prior to Closing. In addition, if CRLP
shall become aware of any defects, objections or exceptions in the title to the
Real Property which do not appear in the Title Commitment and are not Permitted
Encumbrances ("New Title Defects"), Contributor shall use its good faith efforts
to remove such New Title Defects prior to Closing provided, however, Contributor
shall not be required to institute any litigation or incur any expense in
connection therewith, except for professional and other fees and expenses in an
amount not to exceed $2,000.00 in each instance, unless CRLP agrees to pay such
fees and expenses in excess of $2,000.00 on Contributor's behalf. Contributor
shall have the right to adjourn the Closing for up to sixty (60) days in order
to eliminate unacceptable defects, objections or exceptions. If after complying
with the foregoing requirements, Contributor is unable to eliminate all
unacceptable defects, objections or exceptions in accordance with the terms of
this Agreement on or before such adjourned date for the Closing, CRLP may elect
either (w) to terminate this Agreement by notice given to Contributor, in which
event the provisions of Section 4.7 shall apply, or (x) to accept title subject
to such unacceptable defects, objections or exceptions and receive no credit
against or reduction of the Consideration. Contributor agrees and covenants that
it shall not voluntarily place any encumbrances or restrictions to title to the
Real Property from and after the date of the first issuance of the Title
Commitment for the Real Property.
<PAGE>
4.2 (b) CRLP has been advised that First American Title
Insurance Co., by its agent General Land Abstract Co. ("First American") will
issue a title commitment for the Real Property without requiring any of the
following: consent of Troast Overlook Associates (Troast"), Troast's execution
of the Deed, review of Troast's partnership agreement, or any proofs regarding
Troast (collectively the "Troast Requirements"). If the Title Company will not
reissue the Title Commitment without the Troast Requirements, and if First
American or any other major title insurer (e.g. Chicago Title or Lawyers Title)
reasonably acceptable to CRLP (the "Major Title Insurers") will insure title to
the Real Property without the Troast Requirements and otherwise in accordance
with the terms of this Agreement and subparagraph (a) above, CRLP will accept
such insurance. If the Title Company, First American or the Major Title Insurers
will not insure title to the Real Property without exceptions for the Troast
Requirements and Contributor is unable to have them removed, CRLP may elect to
either (i) terminate this Agreement, in which event the provisions of Section
4.7 shall apply or (ii) accept title subject to the Troast Requirements and
receive no credit against or reduction of the Consideration.
[THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY]
<PAGE>
4.3 It shall be a condition to Closing that Contributor conveys, and
that the Title Company insure, title to the Real Property in the amount of the
Consideration (at a standard rate for such insurance) in the name of CRLP or its
designee, after delivery of the Deed, by a standard 1992 ALTA Owners Policy that
is consistent in all respects with the Title Commitment (the "Title Policy").
Contributor shall provide a standard New Jersey title affidavit substantially in
the form annexed hereto as Schedule 4.3, as well as such undertakings as the
Title Company insuring title to the Real Property may reasonably require in
order to cure all other defects and exceptions other than the Permitted
Encumbrances, as required pursuant to Section 4.2. The words "insurable title"
and "insurable" as used in this Agreement are hereby defined to mean title which
is insurable by the Title Company without exception other than the Permitted
Encumbrances and any other matters provided the Title Company is willing to
insure CRLP against any loss or liability by reason thereof.
4.4 Prior to Closing, CRLP shall cause one or more surveyors reasonably
acceptable to CRLP (a) to certify and warrant to CRLP and the Title Company the
square footage and acreage of the Land (to the nearest one-one hundredth
(1/100)), (b) to certify that the survey is a complete and accurate
representation of the Real Property, (c) to certify that there are no gores,
gaps or strips, and such other facts that are customarily required by the Title
Company, (d) to provide to CRLP and the Title Company a metes and bounds
description of the Land and any off-site private easements benefiting the Real
Property, and (e) otherwise prepare the survey in accordance with the customary
requirements of a lending institution financing such a transaction. CRLP shall
cause the surveyor to update the survey as of the Closing Date and have the
general survey exception removed from the Title Policy (and replaced by a
specific exception based on the survey) and the survey affirmatively insured to
CRLP. If the metes and bounds description prepared by the surveyor varies from
the deed into Contributor's predecessor, the deed shall contain the metes and
bounds description prepared by the Surveyor only if the survey is certified to
Contributor.
4.5 Any unpaid taxes, lienable water charges, lienable sewer rents,
together with the interest and penalties thereon to a date not less than one (1)
business day following the Closing Date (in each case subject to any applicable
apportionment), and any mortgages or other liens created by Contributor, which
Contributor 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,
<PAGE>
shall be paid at the Closing by Contributor and Contributor may direct that the
Cash Payment or any part thereof be used to make such payment. Contributor shall
deliver to CRLP, on the Closing Date, instruments in recordable form sufficient
to discharge any such mortgages or other liens which Contributor is obligated to
pay and discharge pursuant to the terms of this Agreement, or, if acceptable to
the Title Company, Contributor shall deliver payoff letters from the lien
holders.
4.6 If, on the date of this Agreement, the Real Property or any part
thereof shall be or shall have been affected by an assessment or assessments for
municipal improvements 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
Real Property and shall be paid and discharged by Contributor on the Closing
Date. Any other assessments shall be the sole responsibility of CRLP.
4.7 If Contributor is unable to convey title in accordance with the
terms of this Agreement and CRLP elects to terminate this Agreement, then the
Deposit shall be returned to CRLP, this Agreement shall terminate and 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.
5. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTOR.
5.1 In order to induce CRLP and Cali to perform as required hereunder,
Contributor hereby warrants and represents the following:
(a) Contributor is a duly organized and validly existing limited
liability company organized under the laws of the State of Delaware duly
authorized to transact business in the State of New Jersey, 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 Contributor 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.
<PAGE>
(b) This Agreement, when duly executed and delivered, will be the
legal, valid and binding obligation of Contributor, enforceable in accordance
with the terms of this Agreement. The performance by Contributor 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 Contributor 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 Contributor is a party or by which
its assets are or may be bound.
(c) Annexed hereto as Schedule 5.1(c-i) a true, complete and correct
schedule of all of the Leases. The Leases are valid and bona fide obligations of
the landlord and Contributor has no knowledge that the Leases are not in full
force and effect. Contributor has not received notice from any tenant claiming
that it's lease is not its valid and bona fide obligation. No condition exists
which, solely with the passage of time or the giving of notice or both, will
become a material default under the Leases. The Leases constitute all of the
leases, tenancies or occupancies affecting the Real Property on the date hereof,
excluding any subleases, occupancies or tenancies created or allowed by any
Tenants without Contributor's knowledge . All Tenants have commenced occupancy;
there are no agreements which confer upon any Tenant or any other person or
entity any rights with respect to Property. Except as provided in Schedule
5.1(c-ii), no Tenant is entitled now or in the future to any offset to its rent,
nor is any Tenant currently asserting a concession, rebate, allowance or free
rent for any period.
(d) Annexed hereto as Schedule 5.1(d) (the "Rent Roll") is a true,
complete and correct listing of the Leases, together with the following
information: (i) the name of each Tenant; (ii) the fixed rent actually being
collected; (iii) the expiration date or status of each Lease (including all
rights or options to renew); (iv) the Security Deposit, if any; (v) whether
there is any guaranty of a Tenant's obligations from a third party, and if so
the nature of said guaranty; (vi) arrangements under which any Tenant is
occupying space on the date hereof or will, in the future, occupy such space;
(vii) any written notices given by any Tenant of an intention to vacate space in
the future; (viii) the base year(s) and base year amounts for all items of rent
or additional rent billed to each Tenant on that basis; and (ix) any arrearages
of any Tenant.
(e) Except as set forth on Schedule 5.1(e), Contributor has
<PAGE>
performed all of the material obligations and observed all of the covenants
required of the landlord under the terms of the Leases. All work, alterations,
improvements or installations required to be made by Contributor for or on
behalf of all Tenants under the Leases prior to Closing have been or will, prior
to Closing, be in all respects carried out, performed and complied with, and
there is no agreement by or on behalf of Contributor with any Tenant for the
performance of any work to be done after Closing except as set forth on Schedule
5.1(e). Contributor has no knowledge that any work has been performed at the
Real Property which would require an amendment to the certificate of occupancy
for which an amendment has not been obtained. Contributor has no knowledge that
any and all work performed at the Real Property to the date hereof and to the
Closing Date has not been or will not 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 Property by or on
behalf of Contributor will be paid in full by Contributor.
(f) There are no Service Contracts (except for those set forth on
Schedule 1.1(f)), equipment leases, union contracts, employment agreements or
other agreements affecting the Property or the operation thereof. True, accurate
and complete copies of the Service Contracts have been initialed by the parties.
(g) Contributor has provided CRLP with all reports including, without
limitation, the Environmental Documents (as hereinafter defined) in
Contributor's possession or under its control relating to the physical condition
of the Real Property, and all Books and Records necessary for CRLP to conduct
its due diligence of the Property.
(h) Contributor has not received written notice of: (i) any suits,
investigations or judgments relating to any violations (including, without
limitation, Environmental Laws (as hereinafter defined)) of any laws, ordinances
or regulations affecting the Real Property, or (ii) any violations or conditions
that may give rise thereto, from 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 Real Property or the management,
operation, use or improvement thereof (collectively, the "Governmental
Authorities") and there are no outstanding orders, judgments, injunctions,
decrees, directives or writ of any Governmental Authorities against or involving
Contributor or the Real Property.
<PAGE>
(i) Annexed hereto as Schedule 5.1(i) is a schedule of all leasing
commission obligations which Contributor may have liability for affecting the
Property. The respective obligations of Contributor and CRLP with respect to
said commissions are set forth in Section 8.
(j) Contributor 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 Contributor's creditors, suffered the appointment of
a receiver to take possession of all, or substantially all, of such
Contributor's assets, suffered the attachment or other judicial seizure of all,
or substantially all, of such Contributor'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.
(k) Contributor has paid all Taxes (as hereinafter defined) due and
payable as of the date of this Agreement, and Contributor shall pay all Taxes
due and payable prior to Closing. Contributor has filed all returns and reports
required to be filed for which claim could be made against the Property. "Taxes"
means 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.
(l) Annexed hereto as Schedule 5.1(l) is a listing of the following,
which is true, complete and correct in all material aspects for each Real
Property contributed to CRLP: (i) its adjusted basis as of December 31, 1996;
(ii) the date placed in service; (iii) the depreciation method; and (iv) the
remaining useful life.
5.2 In order to induce Cali and CRLP to issue the Contributor
Units, Contributor hereby acknowledges its understanding that the
issuance of the Contributor Units is intended to be exempt from
registration under the Securities Act of 1933, as amended, and the
rules and regulations in effect thereunder (the "Act"). In
<PAGE>
furtherance thereof, Contributor represents and warrants to CRLP to as follows:
(a) Contributor and the Unit Holders are acquiring the Contributor
Units solely for their own account for the purpose of investment and not as a
nominee or agent for any other person and not with a view to, or for offer or
sale in connection with, any distribution of any thereof other than to the Unit
Holders. Contributor agrees and acknowledges that it is not permitted to offer,
transfer, sell, assign, pledge, hypothecate or otherwise dispose of ("Transfer")
any of the Contributor Units except as provided in this Agreement and the
Agreement of Limited Partnership of CRLP, as amended through the date hereof
(the "OP Agreement").
(b) Contributor and the Unit Holders are knowledgeable, sophisticated
and experienced in business and financial matters. Contributor and the Unit
Holders fully understand the limitations on transfer described in this Agreement
and the OP Agreement. Contributor and the Unit Holders are able to bear the
economic risk of holding the Contributor Units for an indefinite period and are
able to afford the complete loss of their investment in the Contributor Units.
Contributor and the Unit Holders have received and reviewed the OP Agreement and
copies of the documents filed by Cali since its inception under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and all registration
statements and related prospectuses and supplements filed by Cali and declared
effective under the Securities Act of 1933, as amended, since its inception
(collectively, the "SEC Documents") and have been given the opportunity to
obtain any additional information or documents and to ask questions and receive
answers about such documents, Cali and CRLP and the business and prospects of
Cali and CRLP which Contributor and the Unit Holders deem necessary to evaluate
the merits and risks related to its investment in the Contributor Units.
Contributor and the Unit Holders understand and have taken cognizance of all
risk factors related to the purchase of the Contributor Units.
(c) Contributor and the Unit Holders acknowledge that they have been
advised that (i) the Contributor Units must be held indefinitely, and
Contributor and the Unit Holders will continue to bear the economic risk of the
investment in the Contributor Units, unless they are redeemed pursuant to the OP
Agreement or are subsequently registered under the Act or an exemption from such
registration is available, (ii) it is not anticipated that there will be any
public market for the Units at anytime, (iii) Rule 144 promulgated under the Act
may not be available with respect to the sale of any securities of CRLP (and
that upon redemption of the
<PAGE>
Contributor Units in CRLP for shares of Common Stock a new holding period under
Rule 144 may commence), and CRLP has made no covenant, and makes no covenant, to
make Rule 144 available with respect to the sale of any securities of CRLP
(although Cali and CRLP have agreed to register the Common Stock pursuant to the
Registration Rights Agreement, as hereinafter defined), (iv) a restrictive
legend as set forth in Section 5.5 below shall be placed on the Certificates
representing the Contributor Units, and (v) a notation shall be made in the
appropriate records of CRLP indicating that the Contributor Units are subject to
restrictions on transfer.
(d) Contributor and the Unit Holders also acknowledge that (i) the
redemption of Contributor Units for shares of Common Stock is subject to certain
restrictions contained in the OP Agreement; and (ii) the shares of said Common
Stock which may be received upon such a redemption may, under certain
circumstances, be restricted securities and be subject to limitations as to
transfer, and therefore subject to the risks referred to in subsection (c)
above. Notwithstanding anything herein or in the OP Agreement to the contrary,
Contributor hereby acknowledges and agrees that it and the Unit Holders may not
exercise the Redemption Rights (as defined in the OP Agreement) until after the
date which is one year from the Closing Date.
(e) Contributor and each of the Unit Holders is either an "accredited
investor" (as such term is defined in Rule 501 (a) of Regulation D under the
Act) or Contributor and each of the Unit Holders either alone or with its
purchaser representative(s) has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of the
prospective investment.
5.3 In addition to the provisions of Section 5.1, Contributor hereby
warrants and represents the following with respect to environmental matters:
(a) To Contributor's knowledge, except as disclosed on Schedule 5.3(a)
and except for Contaminants used for cleaning the Property (including, without
limitation, the Personal Property) which are stored and used on the Property in
accordance with all Environmental Laws:
(i) there are no Contaminants (as hereinafter defined) on, under, at,
emanating from or affecting the Real Property, except those in compliance with
all applicable Environmental Laws (as hereinafter defined)
<PAGE>
(ii) Contributor has not received any Notice (as hereinafter defined)
or advice from any Governmental Authority or any other third party with respect
to Contaminants on, under, at, emanating from, or affecting the Real Property,
and, to Contributor's knowledge, no Contaminants have been Discharged (as
hereinafter defined) which has resulted in a Governmental Authority demanding
that a cleanup be undertaken;
(iii) no portion of the Real Property has ever been used by Contributor
to generate, manufacture, refine, produce, treat, store, handle, dispose of,
transfer or process Contaminants, whether or not any of those parties has
received Notice or advice from any Governmental Authority or any other third
party with respect thereto;
(iv) no portion of the Real Property is now, or, to Contributor's
knowledge, ever been used as a Major Facility (as hereinafter defined) and
Contributor shall not use, nor shall Contributor permit use of any portion of
the Real Property, for that purpose;
(v) Contributor has not transported any Contaminants from the Real
Property to another location which was not done in compliance with applicable
Environmental Laws;
(vi) no ss.104(e) informational request has been received by
Contributor issued pursuant to CERCLA (as hereinafter defined);
(vii) there are no above ground storage tanks or Underground Storage
Tanks (as hereinafter defined) at the Real Property, regardless of whether such
tanks are regulated tanks or not;
(viii) all pre-existing above ground storage tanks and Underground
Storage Tanks at the Real Property, if any, existing during Contributor's
ownership of the Real Property, have been removed and their contents disposed of
in accordance with and pursuant to Environmental Laws;
(ix) Contributor has not received any Notice that it does not have all
environmental certificates, licenses and permits ("Permit") required to operate
the Real Property and Contributor has not received any Notice that there is no
violation of any 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
<PAGE>
Permit;
(x) Contributor has not in the past and does not now own, operate or
control any Major Facility (as hereinafter defined); and
(xi) Contributor has not received Notice that the Real Property is in
not material compliance with Environmental Laws.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the obligation of CRLP to pay the Consideration and otherwise proceed
to Closing shall be subject to the condition that Contributor obtain a Letter of
Non-Applicability pursuant to ISRA from the Element (as hereinafter defined) on
or before the date (hereinafter called the "ISRA Compliance Date") that is
twenty (20) days after this Agreement is executed by Contributor. Upon CRLP's
request, Contributor shall provide CRLP with all information, reports, studies
and analysis which Contributor delivered to the NJDEP with the application for,
or otherwise in connection with the issuance of, the Letter of
Non-Applicability. If the requirements of this Section are not satisfied on or
before the ISRA Compliance Date, CRLP shall have the right to extend the ISRA
Compliance Date for up to thirty (30) days or to terminate this Agreement, and
if the requirements of this Section are not satisfied by the extended ISRA
Compliance Date, either party shall have the right to terminate this Agreement.
If this Agreement is so terminated, this Agreement shall be rendered null and
void and of no further force or effect, the Deposit shall promptly be paid to
CRLP, and neither party shall have any further liability or obligation to the
other under or by virtue of this Agreement. Contributor or Contributor's
representatives, to the extent in Contributor's possession or control, have
delivered to CRLP: (i) all Environmental Documents concerning the Real Property;
(ii) all Environmental Documents concerning the Real Property generated by or on
behalf of Contributor; (iii) all Environmental Documents concerning the Real
Property generated by or on behalf of current or future occupants of the Real
Property.
(c) Contributor shall notify CRLP in advance of all meetings scheduled
between Contributor or Contributor's representatives and NJDEP, and CRLP, and
CRLP's representatives, shall have the right, without obligation, to attend and
participate in all such meetings.
(d) The following terms shall have the following meanings when used in
this Agreement:
(i) "Contaminants" shall include, without limitation, any regulated
substance, toxic substance, hazardous substance,
<PAGE>
hazardous waste, pollution, pollutant or contaminant, as defined or referred to
in the New Jersey Environmental Rights Act, N.J.S.A. 2A:35A-1 et seq.; the New
Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11 et seq. (the
"Spill Act"); the New Jersey Air Pollution Control Act, N.J.S.A. 26:2C-1 et
seq.; the Hazardous Substances Discharge: Reports and Notices Act, N.J.S.A.
13:1K-15 et seq.; the Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et seq.;
the "Tanks Laws" as defined below; the Resource Conservation and Recovery Act,
as amended, 42 U.S.C. ss.6901 et seq.; the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. ss.9601 et seq.
("CERCLA"); the Water Pollution and Control Act, 33 U.S.C. ss.1251 et seq.;
together with any amendments thereto, regulations promulgated thereunder and all
substitutions thereof, as well as words of similar purport or meaning referred
to in any other applicable federal, state, county or municipal environmental
statute, ordinance, 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 Real Property,
regardless of whether the result of an intentional or unintentional action or
omission.
(iii) "Element" shall mean the Industrial Site Evaluation Element or
its successor of the NJDEP.
(iv) "Environmental Documents" shall mean all environmental
documentation in the possession or under the control of Contributor concerning
the Real Property, or its environs, including without limitation, all sampling
plans, cleanup plans, preliminary assessment plans and reports, site
investigation plans and reports, remedial investigation plans and reports,
remedial action plans and reports, or the equivalent, sampling results, sampling
result reports, data, diagrams, charts, maps, analysis, conclusions, quality
assurance/quality control documentation, correspondence to or from any
Governmental Authority, submissions to any Governmental Authority and
directives, orders, approvals and disapprovals issued by any Governmental
Authority.
(v) "Environmental Laws" shall mean each and every applicable federal,
state, county or municipal statute, ordinance, rule, regulation, order, code,
directive or requirement, together with
<PAGE>
all successor statutes, ordinances, rules, regulations, orders, codes,
directives or requirements, of any Governmental Authority in any way related to
Contaminants.
(vi) "Major Facility" is as defined in the Spill Act.
(vii) "NJDEP" shall mean the New Jersey Department of Environmental
Protection or its successor.
(viii) "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.
(ix) "Tank Laws" shall mean the New Jersey Underground Storage of
Hazardous Substances Act, N.J.S.A. 58:10A-21 et seq., and the federal
underground storage tank law (Subtitle I) of the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. ss.6901 et seq., together with any
amendments thereto, regulations promulgated thereunder, and all substitutions
thereof, and any successor legislation and regulations.
(x) "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.
5.4 All representations and warranties made by Contributor in this
Agreement shall survive the Closing Date for a period of six (6) months and
shall not be merged in the delivery of the Deed. Any claim for a breach of any
representation or warranty shall be waived unless a claim in writing (which
includes, in reasonable detail, a description of the nature of the claim) to
Contributor is made within six (6) months after Closing, time being of the
essence, and an action or proceeding with respect to such claim is commenced no
later than nine (9) months after the Closing Date, time being of the essence, if
the claim is not theretofore resolved. Contributor agrees to indemnify and
defend Cali and CRLP, and to hold Cali and CRLP harmless, from and against any
and all claims, liabilities, losses, deficiencies and damages (excluding
consequential and punitive damages) as well as reasonable expenses (including
attorney's, consulting and engineering fees), and interest and penalties related
thereto, incurred by Cali and CRLP, by reason of or resulting from any breach,
inaccuracy or incompleteness of the representations and warranties of
Contributor contained in this Agreement, provided,
<PAGE>
however, that Contributor's monetary liability for all claims under this Section
5.4 shall be limited to $250,000.00 in the aggregate inclusive of reasonable
expenses, interest and penalties incurred by Cali and CRLP as aforesaid.
5.5 All of the representations and warranties made by Contributor
herein are made to the actual knowledge of Gough Thompson and Winn Thompson.
Knowledge of employees, contractors or agents of Contributor shall not be
imputed to the undersigned. All references to notice shall mean written notice
unless otherwise expressly provided. The representations and warranties shall be
deemed to have been made at the date of this Agreement and shall not be
construed as continuing. If any representation or warranty of Contributor needs
to be modified due to changes since the date of this Agreement, Contributor
shall deliver to CRLP a certificate, dated as of the date of the Closing,
identifying any representation or warranty which is not, or no longer is, true
and correct and explaining the state of facts giving rise to the change. In no
event shall Contributor be liable to CRLP for, or be deemed to be in default
hereunder by reason of, any representation or warranty which has become untrue
or incorrect by reason of any change that occurs between the date of this
Agreement and the date of the Closing; provided, however, the occurrence of a
change which renders a representation or warranty untrue or incomplete, if
materially adverse to CRLP, shall constitute the non-fulfillment of a condition
precedent under Section 12.2; if, despite changes or other matters described in
such certificate, the Closing occurs, Contributor's representations or
warranties set forth in this Agreement shall be deemed to have been modified by
all statements made in such certificate.
5.6 Contributor hereby acknowledges that each Certificate representing
the Contributor Units shall bear the following legend:
"THE UNITS REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT MAY NOT BE TRANSFERRED,
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH
TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES
WITH THE PROVISIONS OF THE PARTNERSHIP AGREEMENT DATED AS OF AUGUST 31, 1994 AS
AMENDED AS OF JANUARY 16, 1997 (A COPY OF WHICH IS ON FILE WITH THE OPERATING
PARTNERSHIP) AND THAT CERTAIN CONTRIBUTION AND EXCHANGE AGREEMENT AMONG
PRINCETON OVERLOOK, L.L.C., THE OPERATING PARTNERSHIP AND CALI REALTY
CORPORATION DATED AS OF JANUARY 16, 1997 (A COPY OF WHICH IS ON FILE WITH THE
OPERATING PARTNERSHIP; THE "EXCHANGE AGREEMENT"). EXCEPT AS OTHERWISE PROVIDED
IN SUCH AGREEMENTS, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR
OTHER DISPOSITION OF THE UNITS REPRESENTED BY THIS CERTIFICATE MAY BE
<PAGE>
MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR (B) IF THE OPERATING
PARTNERSHIP HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR THE
HOLDER THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT AND THE RULES
AND REGULATIONS IN EFFECT THEREUNDER. IN ADDITION, THE UNITS ARE SUBJECT TO THE
PROVISIONS OF SECTION 17 OF THE EXCHANGE AGREEMENT."
5.7 Except as expressly set forth in this Agreement,
Contributor does not make, has not made and specifically disclaims, any
representation or warranty, express or implied, regarding Contaminants or the
Property's or Contributor's compliance with Environmental Laws. CRLP waives and
releases any claim, other than claims based upon an express representation or
warranty in this Agreement ("Excluded Claims"), against Contributor, any parent,
subsidiary or affiliate of any of them, and any officers, directors,
shareholders, members, agents or attorneys of them (collectively, the
"Contributor Entities"), related to, arising out of or in any manner connected
with Contaminants or the Property's or Contributor's compliance with
Environmental Laws, which waiver and release shall survive the Closing.
6. REPRESENTATIONS AND WARRANTIES OF CALI AND CRLP.
6.1 In order to induce Contributor to perform as required hereunder,
Cali and CRLP hereby jointly and severally warrant and represent the following:
(a) (i) CRLP is a duly organized and validly existing limited
partnership organized and in good standing under the laws of the State of
Delaware, has all requisite power and authority to execute and deliver this
Agreement and all other documents and instruments to be executed and delivered
by it hereunder, and to perform its obligations hereunder and under such other
documents and instruments in order to acquire the Property in accordance with
the terms and conditions hereof. All necessary actions of the partners of CRLP
to confer such power and authority upon the persons executing this Agreement and
all documents which are contemplated by this Agreement on its behalf have been
taken.
(ii) Cali is a duly organized and validly existing corporation
organized and in good standing under the laws of the State of Maryland, has all
requisite power and authority to execute and deliver this Agreement and all
other documents and instruments to be executed and delivered by it hereunder,
and to
<PAGE>
perform its obligations hereunder and under such other documents and instruments
in order to permit CRLP to acquire the Property in accordance with the terms and
conditions hereof. All necessary actions of the board of directors of Cali to
confer such power and authority upon the persons executing this Agreement and
all documents which are contemplated by this Agreement on its behalf have been
taken.
(b) This Agreement and the agreements and other documents to be
executed and delivered by each of Cali and CRLP hereunder, when duly executed
and delivered, will be the legal, valid and binding obligation of each of Cali
and CRLP, enforceable in accordance with the terms of this Agreement. The
performance by each of Cali and CRLP of each of its duties and obligations under
this Agreement and the documents and instruments to be executed and delivered by
each of them hereunder will not conflict with, or result in a breach of, or
default under, any provision of any of the organizational documents of each of
Cali and CRLP or any agreements, instruments, decrees, judgments, injunctions,
orders, writs, laws, rules or regulations, or any determination or award of any
court or arbitrator, to which each of Cali and CRLP is a party or by which each
of its assets are or may be bound.
(c) The Contributor Units to be issued to Contributor and/or the Unit
Holders are duly authorized and, when issued by CRLP, will be fully paid and
non-assessable, free and clear of any mortgage, pledge, lien, encumbrance,
security interest, claim or right of interest of any third party of any nature
whatsoever. The shares of Common Stock to be issued by Cali upon redemption of
the Contributor Units and will be reserved for future listing with the New York
Stock Exchange prior to the date upon which any of the same become exercisable
or redeemable for Common Stock, and, upon such issuance, will be fully paid and
non-assessable, free and clear of any mortgage, pledge, lien, encumbrance,
security interest, claim or rights of interest of any third party of any nature
whatsoever.
(d) CRLP has furnished to Contributor a true and complete copy of the
OP Agreement, as amended to date.
(e) The SEC Documents have been and will be prepared and filed in
compliance with the rules and regulations promulgated by the SEC, and do not and
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein in order to make the statements
contained therein, in light of the circumstances under which they were made or
will be made, not misleading.
<PAGE>
(f) The execution and delivery of this Agreement and the performance by
each of Cali and CRLP of its respective obligations hereunder do not and will
not conflict with or violate any law, rule, judgment, regulation, order, writ,
injunction or decree of any court or governmental or quasi-governmental entity
with jurisdiction over Cali or CRLP including, without limitation, the United
States of America, the State of New Jersey or any political subdivision of any
of the foregoing, or any decision or ruling of any arbitrator to which Cali or
CRLP is a party or by which Cali or CRLP is bound or affected.
(g) Cali (i) intends to file its federal income tax return for the tax
year that will end on December 31, 1997 as a real estate investment trust within
the meaning of Sections 856 and 857 of the Code ("REIT"), (ii) has complied with
all applicable provisions of the Code relating to a REIT for 1995 and 1996,
(iii) has operated, and intends to continue to operate, in such a manner as to
qualify as a REIT for 1997 and (iv) has not taken or omitted to take any action
which would reasonably be expected to result in a challenge to its status as a
REIT, and no such challenge is pending or, to Cali's knowledge, threatened.
(h) Cali is not in default under, or in violation of, any provision of
its organizational documents.
(i) All of Cali's real property and other material assets are owned by
Cali indirectly through its ownership of CRLP and CRLP's subsidiaries and
certain subsidiaries of Cali.
(j) Neither Cali nor CRLP has made a general assignment for the benefit
of creditors, filed any voluntary petition in bankruptcy or suffered the filing
of any involuntary petition by either of Cali's or CRLP's creditors, suffered
the appointment of a receiver to take possession of all, or substantially all,
of Cali's or CRLP's assets, suffered the attachment or other judicial seizure of
all, or substantially all, of Cali's or CRLP's assets, admitted in writing its
inability to pay its debts as they come due or made an offer of settlement,
extension or composition to its creditors generally.
6.2 Each of Cali and CRLP acknowledges that it is not in a
significantly disparate bargaining position with respect to Contributor in
connection with the transaction contemplated by this Agreement, and that Cali
and CRLP were represented by legal counsel in connection with this transaction.
6.3 All representations and warranties made by Cali and CRLP
<PAGE>
in this Agreement shall survive the Closing Date for a period of six (6) months,
and shall not be merged in the delivery of the Deed. Any claim for a breach of
any representation or warranty shall be waived unless a claim in writing (which
includes, in reasonable detail, a description of the nature of the claim) to
CRLP or Cali is made within six (6) months after Closing, time being of the
essence, and an action or proceeding with respect to such claim is commenced no
later than nine (9) months after Closing, time being of the essence, if the
claim is not theretofore resolved. Cali and CRLP agree to indemnify and defend
Contributor, and to hold Contributor harmless, from and against any and all
claims, liabilities, losses, deficiencies and damages (excluding consequential
and punitive damages) as well as reasonable expenses (including attorney's,
consulting and engineering fees), and interest and penalties related thereto,
incurred by Contributor, by reason of or resulting from any breach, inaccuracy,
incompleteness or nonfulfillment of the representations, warranties, covenants
and agreements of Cali and CRLP contained in this Agreement, provided, however,
that the aggregate monetary liability of CRLP and Cali for all claims under this
Section 6.3 shall be limited to $250,000.00 in the aggregate inclusive of
reasonable expenses, interests and penalties incurred by Contributor as
aforesaid.
6.4 CRLP has examined the property and agrees that, except as otherwise
expressly provided in this agreement, neither contributor nor any employee,
agent, affiliate or attorney representing or purporting to represent contributor
has made, and CRLP has not relied on, any representation or warranty to CRLP,
whether express or implied, in particular, CRLP agrees that no such
representation or warranty to CRLP whether express or implied, has been made
with respect to the physical condition or operation of the property, the
revenues and expenses of the property, the zoning and other laws, regulations
and rules applicable to the property and the compliance of the property
therewith. CRLP agrees to accept the property "As-Is", "Where-Is", in its
present condition and further agrees that contributor shall not be liable for
any latent or patent defects in the property or bound in any manner by
guarantees, promises, projections, operating statements, set-ups, or other
information pertaining to the property made, furnished or claimed to have been
made or furnished by contributor or any other person or entity, including any
warranties of marketability, merchantability, fitness for particular purpose,
habitability, design, workmanship or otherwise given by contributor to CRLP in
connection with this transaction, except as otherwise expressly provided in this
agreement. CRLP acknowledges having received a $150,000.00 reduction in the
Consideration as a result of certain matters uncovered during CRLP's
investigation of the Property prior to the
<PAGE>
date of this Agreement including, without limitation, the development approvals
relating to the portion of the Property that has not yet been developed, the TID
and COAH, the condition of the elevators in the existing building on the
Property and the Pending Condemnation.
II. COVENANTS OF CONTRIBUTOR.
7.1 Contributor covenants and agrees that between the date hereof and
the Closing Date it shall perform or observe the following with respect to the
Property:
(a) Contributor will operate and maintain the Real Property in the
ordinary course of business and use reasonable efforts to reasonably preserve
for CRLP the relationships of Contributor and Contributor's Tenants, suppliers,
managers, employees and others having on-going relationships with the Real
Property. Contributor will complete any capital expenditure program currently in
process or anticipated to be completed at or prior to Closing. Contributor will
not defer taking any actions or spending any of its funds, or otherwise manage
the Real Property differently, due to the transaction contemplated by this
Agreement.
(b) Contributor, as landlord, will not enter into any new leases with
respect to the Real Property, or renew or modify any Lease, without CRLP's prior
written consent, which will not be unreasonably withheld or delayed;
(c) If, prior to Closing Date, Contributor shall have received from (i)
any insurance company which issued a policy with respect to the Real 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 or alteration work to be done on the Real Property, Contributor shall
provide prompt notice thereof to CRLP but will have no obligation to CRLP to
effectuate said repairs or obligations provided, however, that if Contributor
elects not to effectuate said repairs or alterations, then upon notice to CRLP,
at CRLP's election, CRLP may either (x) elect to close title to the Property
subject to the condition and assuming the obligation to pay any fines or
penalties imposed with respect to same without any reduction in the
Consideration, or (y) elect to terminate this Agreement, whereby the parties
shall have no further liability to each other, except for those matter which
shall expressly survive a termination of this Agreement.
<PAGE>
(d) Contributor shall not:
(i) enter into any agreement requiring Contributor to do work for any
Tenant after the Closing Date without first obtaining the prior written consent
of CRLP, which will not be unreasonably withheld or delayed;
(ii) accept the surrender of any Service Contract or Lease, or grant
any concession, rebate, allowance or free rent;
(iii) apply any Security Deposits with respect to any Tenant in
occupancy on the Closing Date;
(iv) renew, extend or modify any of the Service Contracts;
(v) remove any Personal 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 CRLP;
(e) For a period of one (1) year after Closing, Contributor shall, upon
request of CRLP at any time after the date hereof, assist CRLP in its
preparation of audited financial statements, statements of income and expense,
and such other documentation as CRLP may reasonably request, covering the period
of Contributor's ownership of the Real Property at no cost or expense to
Contributor;
(f) Contributor shall make all required payments under any mortgage
affecting the Real Property within any applicable grace period, but without
reimbursement by CRLP therefor. Contributor shall also comply with all other
material terms covenants, and conditions of any mortgage on the Real Property;
(g) Contributor shall not cause or permit the Property, or any interest
therein, to be alienated, mortgaged, licensed, encumbered or otherwise be
transferred (subject to Section 16.2).
(h) Contributor agrees to maintain and keep in full force and effect
the hazard, liability and casualty insurance policies it is currently
maintaining.
(i) Contributor shall serve notice of cancellation, at it sole cost and
expense, of those Service Contracts which CRLP elects not to take subject to by
notice given not less than five (5) days prior to Closing, excluding any Service
Contracts which are, by
<PAGE>
their terms, cancelable without payment or penalty upon thirty (30) days' prior
notice.
(j) Contributor shall permit CRLP and its authorized representatives to
inspect the Books and Records of its operations at all reasonable times upon
reasonable notice. All Books and Records not conveyed to CRLP hereunder shall be
maintained for CRLP's inspection at Contributor's address as set forth above.
(k) If, prior to Closing, Contributor shall become aware of any
violations of statutes, ordinances, rules, regulations, orders, codes,
directives or requirements affecting the Real Property, whether or not such
violations are noted in the records of or have been issued by any Governmental
Authorities, Contributor shall provide prompt notice thereof to CRLP but will
have no obligation to cure the same prior to Closing provided, however, that if
Contributor elects not to cure the same, then upon notice to CRLP, at CRLP's
election, CRLP may either (i) close title to the Property subject to such
violations and assuming the obligation to pay any fines or penalties imposed
with respect to same without reduction in the Consideration, or (ii) terminate
this Agreement, whereby the parties shall have no further liability to each
other, except as expressly stated herein.
(l) Contributor shall:
(i) promptly notify CRLP of, and promptly deliver to CRLP, a certified
true and complete copy of any Notice Contributor may receive, on or before the
Closing Date, from any Governmental Authority, concerning a violation of
Environmental Laws or Discharge of Contaminants; and
(ii) In the event any Environmental Documents come into the possession
or under the control of Contributor or its representatives between the signing
of this Agreement and the Closing, then the Contributor shall promptly deliver
or cause to be delivered to CRLP a certified true and complete copy of all such
Environmental Documents.
(m) Contributor, at its sole cost and expense, shall complete all work
under construction by Contributor, its agent(s) or contractor(s) at the Property
in accordance with the obligation giving rise to such work having to be
performed, and shall obtain and deliver to CRLP, as soon as practical, all final
certificates of completion and occupancy, or other documentation reasonably
satisfactory to CRLP, evidencing the acceptance of said work by all
<PAGE>
appropriate Governmental Authorities having jurisdiction thereover and the party
for whom the work is being so performed; said obligations shall survive Closing.
7.2 To the extent that any of the Promotional Materials are not in the
possession of Contributor, Contributor shall use reasonable efforts to cause the
holders or owners of same to deliver such Promotional Materials to CRLP, without
cost or expense, which obligation shall survive the Closing.
7.3 Contributor covenants and agrees that it shall timely provide CRLP
with drafts of any pertinent documentation in connection with leasing matters,
Service Contracts and agreements for work to be done on behalf of tenants and
shall keep CRLP informed of all substantive negotiations and discussions with
respect to the foregoing matters on an on-going basis.
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 as well as any extension and
renewal terms which are presently in effect (but not renewals or extensions of
such Leases which are exercised after the Closing Date) shall be paid by
Contributor. All leasing commissions on account of extensions or renewals of
Leases made after the Closing Date shall be paid by CRLP. All tenant
improvements obligations in connection with original Lease terms or extensions
and renewals now in effect shall be satisfied by Contributor prior to the
Closing Date. The provisions of this Section shall survive the Closing.
9. ESTOPPEL CERTIFICATES.
9.1 On or prior to the date hereof, Contributor 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. Contributor agrees to use its reasonable efforts to obtain from all
Tenants the estoppel certificates in such form. Contributor agrees to deliver to
CRLP, upon receipt, copies of all estoppel letters received by Tenants. The
estoppel certificates required to be obtained pursuant to this Section 9.1 are
collectively referred to as the "Estoppel Certificates".
<PAGE>
9.2 As a condition to Closing, Contributor shall deliver (a) an
Estoppel Certificate from each Tenant that leases space at the Real Property in
excess of 10,000 square feet or more in the aggregate, and (b) Estoppel
Certificates from the remaining Tenants leasing, in the aggregate, at least
seventy-five (75%) percent of the square footage of the Real Property.
10. CLOSING.
10.1 The consummation of the transactions contemplated hereunder (the
"Closing") shall take place at the offices of Pryor, Cashman, Sherman & Flynn,
410 Park Avenue, New York, New York 10022 on or about the date which is twenty
(20) days following the date of this Agreement (the "Closing Date"). Upon notice
to Contributor, CRLP shall have the right to accelerate the Closing Date to a
date that is not less than three (3) days after the date of CRLP's notice.
10.2 On the Closing Date, Contributor, at its sole cost and expense,
will deliver or cause to be delivered to CRLP the following documents:
(a) Bargain and sale deed (the "Deed") with covenants against grantor's
acts in proper statutory form for recording so as to convey to CRLP 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 Real Property
conveyed by the Deed. No portion of the Consideration is attributable to the
Personal Property.
(b) All original Leases and all other documents pertaining thereto, and
certified copies of such Leases or other documents where Contributor, using its
best efforts, is unable to deliver originals of same.
(c) All other original documents or instruments referred to herein,
including, without limitation, the Service Contracts, Permits and Licenses, and
Books and Records, and certified copies of same where Contributor, using its
best efforts, is unable to deliver originals.
(d) A letter to Tenants advising the Tenants of the transaction
hereunder and directing that rent and other payments thereafter be sent to CRLP
or its designee, as CRLP shall so direct.
<PAGE>
(e) Duly executed and acknowledged assignment and assumption of all
Leases, Rents, Security Deposits, Tradename, Permits and Licenses 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 CRLP elects not to take subject to.
(g) The Letter of Non-Applicability.
(h) The title affidavit required by Section 4.3.
(i) Affidavits and other instruments including, but not limited to, all
organizational documents of Contributor including operating agreements, filed
copies of limited liability certificates, articles of organization, and good
standing certificates, reasonably requested by CRLP and the Title Company
evidencing the power and authority of Contributor to enter into this Agreement
and any documents to be delivered hereunder, and the enforceability of same.
(j) The original Estoppel Certificates.
(k) A list of all cash Security Deposits and all non-cash Security
Deposits (including letters of credit) delivered by Tenants under the Leases,
together with other instruments of assignment, transfer or consent as may be
necessary to permit CRLP to realize upon same.
(l) A certificate indicating that the representations and warranties of
Contributor made in this Agreement are true and correct in all material respects
as of the Closing Date, or if there have been any changes, a description
thereof.
(m) A Rent Roll for the Real Property current as of the Closing Date,
certified by Contributor as being true and correct in all material respects.
(n) Subject to Section 16 below, all proper instruments as shall be
reasonably required for the conveyance to CRLP of all right, title and interest,
if any, of Contributor 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
<PAGE>
the Land or 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.
(o) In order to avoid the imposition of the withholding tax payment
pursuant to Section 1445 of the Code, a certificate signed by an officer of
Contributor to the effect that Contributor is not a "foreign person" as that
term is defined in Section 1445(f)(3) of the Code.
(p) Any transfer and other tax declarations and returns and information
returns, duly executed and sworn to by Contributor as may be required of
Contributor by law in connection with the conveyance of the Property to CRLP.
(q) A statement setting forth all adjustments and prorations shown
thereon.
(r) Letter of direction regarding the issuance of the Contributor Units
to the Unit Holders from the legal and beneficial owners of the Property. The
signatories of said letter are also to acknowledge that they are the legal and
beneficial owners of same.
(s) An assignment to CRLP (by agreement reasonably satisfactory to the
parties) of the Sewer Line Rights and Payments which assignment shall include,
without limitation, any right to payment which arose prior to the Closing Date.
Any payments received by Contributor prior to the Closing Date shall be paid to
CRLP on that date.
(t) Duly executed and acknowledged assignment of all rights, titles and
interests of Contributor in and to the Pending Condemnation and all proceeds and
awards paid or payable with respect to same (subject, however, to retention of
Contributor's right to be paid the Contributor's Share) in the form of Exhibit
10.2(t) annexed hereto.
(u) Such other documents as may be reasonably required or appropriate
to effectuate the consummation of the transactions contemplated by this
Agreement.
10.3 On the Closing Date, Cali and CRLP, at their sole cost and
expense, will deliver or cause to be delivered to Contributor the following
documents:
III. The Cash Payment, net of adjustments and prorations.
<PAGE>
(b) The Certificates representing the Contributor
Units.
(c) Duly executed and acknowledged assignment and assumption of all
Leases, Rents, Security Deposits, Tradenames, Permits and Licenses and
Intangible Property substantially in the form of
Exhibit 10.2(e) annexed hereto.
(d) Duly executed and acknowledged assignment and
assumption of Service Contracts in the form of Exhibit 10.2(f) annexed hereto
(to the extent CRLP has agreed to take subject to the same).
(e) A certificate indicating that the representations and warranties of
Cali and CRLP made in this Agreement are true and correct as of the Closing
Date, or if there have been any changes, a description thereof.
(f) A Registration Rights Agreement substantially
in the form of Exhibit 10.3(f).
(g) Amendment to OP Agreement substantially in the
form of Exhibit 10.3(g) reflecting admission of Contributor as
limited partner.
(h) Such other documents as may be reasonably required or appro priate to
effectuate the consummation of the transactions contemplated by this Agreement.
10.4 Contributor shall pay all state or county documentary stamps or
transfer taxes on the Deed, including, but not limited to the New Jersey Realty
Transfer Fee. CRLP shall pay all title insurance premiums and title examination
fees. 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.
10.5 The Closing shall be consummated without compliance with bulk
sales laws. If by reason of any applicable bulk sales law, any claims are
asserted by creditors of Contributor related to periods prior to the Closing,
such claims shall be the responsibility of Contributor, and Contributor shall
jointly and severally indemnify, defend and hold harmless CRLP and Cali (and
their respective directors, officers, employees, affiliates, successors and
assigns) from and against all losses or liabilities, if any, based upon, arising
out of or otherwise in respect of the failure to comply with such bulk sales
laws.
<PAGE>
IV. ADJUSTMENTS.
11.1 The following items with respect to the Real Property are to be
apportioned as of midnight on the date preceding the Closing:
(a) Rents, escalation charges and percentage rents payable by Tenants
as and when collected. Unpaid rents, escalation charges and percentage rents for
the month in which Closing takes place and for prior months are hereafter
referred to as Arrearages. CRLP shall make a good faith effort to collect
Arrearages but shall not be obligated to bring any action therefor. Contributor
may attempt to collect Arrearages Contributors but shall not, without CRLP's
consent, which shall not be unreasonably withheld, institute any lawsuit or
collection procedures. In no event and under no circumstances may Contributor
seek to evict any tenant. All payment made for the month in which the Closing
takes place or after Closing by tenants who owe Arrearages shall be applied
first to current rents, escalation charges and percentage rents and then to
Arrearages, if any, in the inverse order of maturity. Notwithstanding the
foregoing, any payment received by either party within ninety (90) days after
the Closing Date from either Novo Nordisk, Xerox Corporation, IDS Financial
Services, Withum, Smith and Brown or Hannoch, Weisman on account of escalation
charges under each of their respective Leases shall be applied first to the
escalation charges for the period prior to the Closing Date with respect to such
Lease. A party which receives a payment to be applied on account of Arrearages
will remit any Arrearages it collects, minus out-of-pocket expenses incurred in
collection such Arrearages, in accordance with the provisions hereafter set
forth. If any Arrearages are received, the recipient shall promptly notify the
other party, identifying the tenant and amount paid. Any Arrearages received by
a party and owned to the other party in accordance with this Section shall be
deemed to be received and held in trust and shall be paid to the party to whom
such Arrearages are owed (as provided herein) promptly after they are received.
(b) Upon sufficient advance notice, a cashier's or certified check or
wire transfer to the order of CRLP in the amount of all cash Security Deposits
and any prepaid rents, together with interest required to be paid thereon. At
the election of CRLP, such amount may be allotted to CRLP as a credit against
the Cash Payment.
(c) Utility charges payable by Contributor including, without
<PAGE>
limitation, electricity, water charges and sewer charges. If there are meters on
the Real Property, Contributor will cause readings of all said meters to be
performed not more than five (5) days prior to the Closing Date.
(d) Amounts payable under the Service Contracts other than those
Service Contracts which CRLP has elected not to assume.
(e) Real estate taxes due and payable for the calendar year or fiscal
year, as applicable. If the Closing Date shall occur before the tax rate is
fixed, the apportionment of real estate taxes shall be upon the basis of the tax
rate for the preceding year applied to the latest assessed valuation. If
subsequent to the Closing Date, real estate taxes (by reason of change in either
assessment or rate or for any other reason) for the Real Property should be
determined to be higher or lower than those that are apportioned, a new
computation shall be made, and Contributor agrees to pay CRLP any increase shown
by such recomputation and vice versa.
(f) The value of fuel stored at any of the Real Property, at
Contributor's most recent cost, including taxes, on the basis of a reading made
within ten (10) days prior to the Closing by Contributor's supplier.
11.2 At the Closing, Contributor shall deliver to CRLP a list of
additional rent, however characterized, under a Lease including without
limitation, real estate taxes, electrical charges, utility costs and operating
expenses (collectively, "Additional Rents") billed to Tenants for the calendar
year 1997 (both on a monthly basis and in the aggregate), the basis for which
the monthly amounts are being billed and the amounts incurred by Contributor on
account of the components of Additional Rent for calendar year 1997. Upon the
reconciliation by CRLP of the Additional Rents billed to Tenants, and the
amounts actually incurred for the calendar year 1997, Contributor and CRLP shall
be entitled to receive payments from Tenants, as the case may be, on a pro rata
basis based upon each party's period of ownership during calendar year 1997.
11.3 Except as otherwise provided in this Agreement, the adjustments
shall be made in accordance with the customs in respect to title closings in the
State of New Jersey. Any and all errors in the adjustments will be corrected on
the Closing Date and the provisions of this Section 11 shall survive the Closing
Date.
<PAGE>
12. CONDITIONS PRECEDENT TO CLOSING.
12.1 The obligations of Contributor to deliver title to the Property
and to perform the other covenants and obligations to be performed by
Contributor 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 Contributor):
(a) The representations and warranties made by CRLP and Cali herein
shall be true and correct in all material respects with the same force and
effect as though such representations and warranties had been made on and as of
the Closing Date;
(b) CRLP and Cali shall have executed and delivered to Contributor all
of the documents provided herein for said delivery; and
(c) Contributor shall have received the Cash Payment.
12.2 The obligations of Cali and CRLP to accept title to the Property
and Cali and CRLP's obligation to perform the other covenants and obligations to
be performed by Cali and CRLP on the Closing Date shall be subject to the
following conditions (all or any of which may be waived, in whole or in part, by
Cali or CRLP):
(a) The representations and warranties made by Contributor herein shall
be true and correct in all material respects with the same force and effect as
though such representations and warranties had been made on and as of the
Closing Date;
(b) Contributor shall have performed all material covenants and
material obligations undertaken by Contributor herein in all respects and
complied with all material conditions required by this Agreement to be performed
or complied with by it on or before the Closing Date;
(c) The Title Company is unconditionally prepared to issue to CRLP a
Title Policy meeting the requirements set forth in Section 4 hereof for an
"insurable title"; and
(d) Contributor shall have executed and delivered to CRLP all of the
documents provided for herein for said delivery.
13. ASSIGNMENT.
13.1 This Agreement may not be assigned by Cali or CRLP except
<PAGE>
upon notice not less than five (5) business days prior to Closing to a directly
or indirectly wholly-owned subsidiary or subsidiaries of Cali or CRLP, or to a
partnership in which any such wholly-owned subsidiary or subsidiaries owns,
either directly or indirectly, at least seventy-five (75%) percent of the
profits, losses and cash flow thereof and controls the management of the affairs
of such partnership (any such entity, a "Permitted Assignee") and any other
assignment or attempted assignment by Cali or CRLP shall be deemed null and void
and of no force and effect. In addition, at Closing, CRLP shall have the right
to cause Contribution to direct the Deed and other closing instruments to such
party as (who shall be deemed to be a Permitted Assignee and bound by the terms
of this Agreement) CRLP shall direct. No such assignment shall relieve Cali and
CRLP from their obligations under this Agreement, and they shall be jointly and
severally liable with permitted assignee for such obligations.
14. BROKER.
14.1 Cali, CRLP and Contributor represent that they have not dealt with
any brokers, finders or salesmen in connection with this transaction other than
The Garibaldi Group, Ltd. ("Broker"), whose commission shall be paid by
Contributor pursuant to a separate agreement. Cali, CRLP and Contributor agree
to indemnify, defend and hold each other harmless from and against any and all
loss, cost, damage, liability or expense, including reasonable attorneys' fees,
which they may sustain, incur or be exposed to by reason of any claim for fees
or commissions made through the other party. The provisions of this Section
shall survive the Closing or other termination of this Agreement.
15. CASUALTY LOSS.
15.1 Contributor shall continue to maintain the fire and extended
coverage insurance policies, annexed hereto as Schedule 15.1, with respect to
the Property (the "Insurance Policies") which are currently in effect through
the Closing.
15.2 If at any time prior to the Closing Date any portion of the Real
Property is destroyed or damaged as a result of fire or any other casualty (a
"Casualty"), Contributor shall promptly give written notice ("Casualty Notice")
thereof to CRLP along with Contributor's estimate, given in good faith, of the
cost to repair
<PAGE>
as a result of the Casualty (the "Repair Cost"). If the Repair Cost is in excess
of $1,000,000.00 then within ten (10) days after the receipt of the Casualty
Notice, CRLP shall have the right, at its sole option, of terminating this
Agreement by written notice to Contributor given within ten (10) days after
receipt of the Casualty Notice. If CRLP does not terminate this Agreement, the
proceeds of any insurance with respect to the Real Property paid between the
date of this Agreement and the Closing Date plus the amount of Contributor's
deductible under the policy insuring the Casualty shall be paid to CRLP at
Closing, and all unpaid claims and rights in connection with losses to the
Property shall be assigned to CRLP at Closing without in any manner affecting
the Consideration.
15.3 Contributor shall cause all temporary repairs to be made to the
Real Property as shall be required to prevent further deterioration and damage
to the Real Property prior to the Closing Date provided, however, that any such
repairs shall first be approved by CRLP, except if there is an emergency.
Contributor shall have the right to be reimbursed from the proceeds of any
insurance with respect to the Real Property paid between the date of this
Agreement and the Closing Date for the cost of all such repairs.
16. CONDEMNATION.
16.1 In the event, that prior to Closing, Contributor receives notice
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 Real Property, Contributor shall give notice (a
"Condemnation Notice") to CRLP promptly thereafter. Within fifteen (15) days
following receipt of the Condemnation Notice, CRLP shall have the right and
option to terminate this Agreement by giving Contributor written notice thereof.
Any damage to or destruction of the Real 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 CRLP's architect, shall exceed $250,000.00. Should CRLP so
terminate this Agreement in accordance with this Section, neither party shall
have any further liability or obligations to the other. In the event CRLP shall
not elect to cancel this Agreement, Contributor shall assign all proceeds of
such taking to CRLP, same shall be CRLP's sole property, and CRLP shall have the
sole right to settle any claim in connection with the Property, and there shall
be no reduction in the Consideration.
<PAGE>
16.2 Notwithstanding anything to the contrary contained in Section 16.1
above, the parties acknowledge that a portion of the Real Property is the
subject of a condemnation action pending in the Superior Court of New Jersey Law
Division, Mercer County, Docket No. MER-I-003039-96 and related litigation (the
"Pending Condemnation"). Contributor and CRLP agree that the proceeds of the
Pending Condemnation, whether such proceeds are obtained from judgment,
settlement or by other means, and whether the same are paid prior to or after
the Closing, shall be paid as follows:
(a) to Contributor, to the extent of $428,000.00
("Contributor's
Share"), then
(b) to CRLP, to the extent there are proceeds in excess of $428,000.00.
Contributor shall defend and/or prosecute, as applicable, the Pending
Condemnation, keep CRLP apprised as to the status of such matter, and deliver
copies of all decisions, correspondence or other comunications concerning the
Pending Condemnation to CRLP. Contributor and CRLP shall cooperate with one
another in connection with the Pending Condemnation, and prior to Closing
neither party shall have the right to settle, terminate or make any other
decisions or take any other action respecting the same without the other party's
written consent provided, however, that notwithstanding anything to the contrary
herein contained, Contributor shall have the right to obtain payment of the
Contributor's Share plus any interest thereon payable by the condemning
authority (to the extent such interest relates to the period prior to
Contributor's receipt of Contributor's Share), and CRLP will cooperate with
Contributor in all reasonable respects (at no cost or expense to CRLP) to obtain
such payment immediately after request therefor from Contributor. The provisions
of this Section 16.2 shall survive the Closing Date.
17. TRANSFER RESTRICTIONS; RIGHT OF FIRST REFUSAL.
17.1 Contributor agrees that the Contributor Units may not be sold,
assigned, transferred, pledged, encumbered or in any manner disposed of
(collectively, "Transferred") or redeemed for shares of Common Stock until the
first anniversary of the Closing Date. Thereafter, the Contributor Units and/or
the shares of Common Stock underlying the Contributor Units (the "Underlying
Shares") may only be Transferred (i) privately in accordance with the terms of
the OP Agreement and this Section 17, or (ii) in the form of Underlying
<PAGE>
Shares only, publicly (subject to the restrictions of the Act and the rules and
regulations promulgated thereunder) in trading blocks of 300,000 shares of
Common Stock or less. Notwithstanding anything herein to the contrary, the
provisions of this Section 17 shall not apply to, and, in addition to any rights
under the OP Agreement, Contributor and the Unit Holders shall have the right to
make the following Transfers: (i) pledges or encumbrances of all or a portion of
the Contributor Units to an institutional lender and/or (ii) Transfers of all or
any portion of the Contributor Units to Permitted Transferees in accordance with
the OP Agreement. "Permitted Transferees" means (i) any entity or individual
comprising Contributor or the Unit Holders; (ii) any direct or indirect equity
owner of Contributor or the Unit Holders; and (iii) members of the Immediate
Family (as defined in the OP Agreement) of Contributor or the Unit Holders (or
any direct or indirect equity owner thereof) and trusts for the benefit of one
or more members of the Immediate Family of Contributor or the Unit Holders (or
any direct or indirect equity owner thereof) created for estate and/or gift tax
purposes. Any holder of Contributor Units pursuant to (i) or (ii) of the
preceding sentence, shall be subject to the applicable terms and conditions of
the OP Agreement and shall sign a counterpart of the OP Agreement to such
effect.
17.2 If Contributor, the Unit Holders, or any of their Permitted
Transferees (each a "Contributor Party") receives a bona fide written offer to
purchase part or all of its Contributor Units or Underlying Shares in a
privately negotiated transaction which it desires to accept, such Contributor
Party shall not sell, transfer, or otherwise dispose of (the "Proposed
Disposition") such Units or Underlying Shares (the "Disposition Securities") to
a third party (the "Purchaser"), unless, prior to such Proposed Disposition,
such Contributor Party shall have promptly reduced the terms and conditions, if
any, of the Proposed Disposition to a reasonably detailed writing and shall have
delivered written notice (the "Disposition Notice") of such Proposed Disposition
to CRLP. All offers to purchase Contributor Units or Underlying Shares must be
for cash. The Disposition Notice shall contain an irrevocable offer to sell all,
but not less than all, the Disposition Securities to CRLP upon the same terms
(including price) and subject to the same conditions, if any, as those
contemplated by the Proposed Disposition, and shall be accompanied by a true and
correct copy of the agreement embodying the terms and conditions, if any, of the
Proposed Disposition (which shall identify the Purchaser, the Disposition
Securities, the consideration and method of payment contemplated by the Proposed
Disposition and all other terms and conditions, if any, of the Proposed
Disposition).
<PAGE>
17.3 CRLP shall have the irrevocable right and option (the "Purchase
Option"), within five (5) business days after receipt of the Disposition Notice
(the "Notice Period"), to accept such irrevocable offer to purchase the
Disposition Securities which are subject to the Proposed Disposition. If CRLP
determines to exercise such Purchase Option, it shall deliver to the Contributor
Party written notice of the exercise of its Purchase Option with respect to the
Disposition Securities (an "Exercise Notice") prior to the expiration of the
Notice Period.
17.4 If CRLP shall have timely delivered its Exercise Notice with
respect to the Disposition Securities, all certificates for the Disposition
Securities shall be delivered to CRLP at a closing to be held on the later of
the date on which the Proposed Disposition, if accepted, would close or five (5)
business days after such Exercise Notice is given, at the offices of Pryor,
Cashman, Sherman & Flynn located at 410 Park Avenue, New York, New York 10022.
At such closing, CRLP shall deliver to the Contributor Party in immediately
available funds the amount of the purchase price set forth in the Disposition
Notice due against the simultaneous delivery of certificates representing the
Disposition Securities so disposed of, duly endorsed in blank or accompanied by
a stock power or powers duly endorsed in blank, and in proper form for transfer,
together with any necessary stock-transfer stamps, and such Disposition
Securities shall be delivered free and clear of all liens, security interests
and encumbrances whatsoever.
17.5 If CRLP (i) notifies the Contributor Party that it is not
exercising its Purchase Option or (ii) does not deliver an Exercise Notice prior
to the expiration of the Notice Period, CRLP shall be deemed to have waived its
Purchase Option in which event Contributor Party may sell the Disposition
Securities to the Purchaser for a period of thirty (30) days after the
expiration of the Notice Period in which event the transferee shall take free
and clear of the restrictions set forth in this Section 17; provided, however,
that such Disposition Securities are sold to the Purchaser at a price not less
than that contained in the Disposition Notice and on terms and conditions, if
any, not more favorable to the Purchaser than those contained in the Disposition
Notice. If Contributor Party wishes to sell all or any part of the Disposition
Securities on terms more favorable to the Purchaser than those set forth in the
Disposition Notice or does not sell such Disposition Securities on the terms and
conditions contained in the Disposition Notice within the aforementioned thirty
(30) day period, it shall again be obligated to make new offers to CRLP, in
accordance with this Section 17, before it shall be permitted to consummate a
Proposed Disposition of the Disposition Securities, or any part
<PAGE>
thereof, in a privately negotiated transaction.
18. TAX MATTERS.
18.1 Contributor will pay or provide for payment of all Taxes due and
payable on or after the Closing and will file all returns and reports required
to be filed on or after the Closing with respect to Taxes imposed in connection
with the ownership and operation of the Property for all taxable periods (or
portions thereof) ending on or prior to the Closing, for which CRLP could be
held liable on a claim made against CRLP.
18.2 Contributor shall pay any and all Taxes including, without
limitation, Taxes imposed with respect to the ownership or operation of the
Property for all taxable periods (or portions thereof) ending on or prior to the
Closing, imposed upon CRLP based, in whole or in part, upon the failure to
comply with the bulk sales laws.
18.3 The provisions of this Section shall survive the Closing Date.
19. MANAGEMENT OF THE PROPERTY POST CLOSING.
19.1 Contributor or its designee shall continue to manage the on-site
day-to-day operations of the Real Property for a period of six (6) months
following the Closing provided, however, that (a) CRLP shall have the right to
terminate Contributor's obligation to operate and manage the Real Property at
any time with cause (including, without limitation, if Winn Thompson is no
longer active in the day-to-day management of the Property) without penalty by
giving written notice of such termination to Contributor, (b) Contributor's
obligations shall include all obligations typically performed by an on-site
manager of real property similar to the Real Property in the location where the
Real Property is located, (c) Contributor shall in all cases act in accordance
with the direction of CRLP, and (d) Contributor or its designee shall enter into
a management agreement substantially in the form annexed hereto as Schedule 19.1
(the "Management Agreement"). During the period Contributor shall act as
manager, Contributor and CRLP shall work together to effect a smooth transition
to management of the Real Property by CRLP or its designee. Notwithstanding the
foregoing provisions of this Section, it is understood and agreed that CRLP
shall assume all billing and accounting responsibilities for the Real Property
as of
<PAGE>
the Closing Date. The provisions of this Section shall survive the Closing.
Notwithstanding anything to the contrary, Contributor covenants that Winn
Thompson shall at al times remain active in the day-to-day management of the
Property pursuant to the Management Agreement.
20. PUBLICATION; CONFIDENTIALITY.
20.1 CRLP shall have the right to make such public announcements or
filings with respect to the exchange as CRLP may deem reasonably prudent. CRLP
shall not, however, issue any such announcement without the prior reasonable
written approval of Contributor as to the text of the announcement.
Notwithstanding the foregoing, CRLP and Contributor shall be entitled to make
such filings or announcements upon advice of counsel as may be necessary or
required by law.
20.2. Without the prior written consent of the other party, until CRLP
shall make a public announcement as provided in Section 20.1, neither CRLP nor
Contributor shall disclose, and Contributor and CRLP will direct their
respective representatives, employees, agents and consultants not to disclose,
to any person or entity the fact that CRLP and Contributor 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
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 20.2,
either party shall be entitled to all of its rights and remedies at law or in
equity.
20.3 Contributor shall not disclose to any third party any information
that is not public information concerning Cali, CRLP or any transaction or
potential transaction Contributor may become aware of involving Cali or CRLP
without CRLP's prior written consent.
21. REMEDIES.
<PAGE>
21.1 In the event CRLP or Cali fail to perform their respective
obligations on the Closing Date, CRLP's sole liability, and Contributor's sole
recourse, shall be limited to the amount of the Deposit. Contributor agrees that
retention of the Deposit constitutes fixed and liquidated damages resulting from
CRLP's or Cali's default, and Contributor waives any other claim, at law or in
equity, either against CRLP, Cali or against any person, known or unknown,
disclosed or undisclosed.
21.2 In the event of any default on the part of Contributor or
Contributor's failure to comply with any representation, warranty or agreement
in any material respect, CRLP shall be entitled to either (i) terminate this
Agreement upon notice to Contributor, in which event neither party shall
thereafter have any further obligations under this Agreement; or (ii) to
commence an action against Contributor seeking specific performance of
Contributor's obligations under this Agreement, in which case the prevailing
party in such action shall be reimbursed for all costs incurred by it
(including, without limitation, reasonable attorney's fees) in connection with
such action. In no event shall Contributor otherwise be liable for any damages
not specifically provided for under this Agreement (including, by way of example
and not limitation, under Section 5.4).
21.3 The provisions of this Section 21 shall survive the Closing or
earlier termination of this Agreement.
22. NOTICE.
All notices, demands, requests, or other writings in this Agreement
provided to be given or made or sent, or which may be given or made or sent, by
either party hereto to the other, shall be in writing and shall be delivered by
depositing the same with any nationally recognized overnight delivery service,
or by telecopy or fax machine, in either event with all transmittal fees
prepaid, properly addressed, and sent to the following addresses:
If to Cali or CRLP: c/o Cali Realty Corporation
11 Commerce Drive
Cranford, New Jersey 07016
Attn: Roger W. Thomas, Esq.
(908) 272-8000 (tele.)
(908) 272-6755 (fax)
with a copy to: Pryor, Cashman, Sherman & Flynn
410 Park Avenue
<PAGE>
New York, New York 10022
Attn: Wayne B. Heicklen, Esq.
(212) 326-0425 (tele.)
(212) 326-0806 (fax)
If Contributor: Princeton Overlook Limited Liability Company
Suite 103
100 Overlook Center
Princeton, New Jersey 08540
(609) 452-0800 (tele.)
(609) 452-0266(fax)
with a copy to: Crummy, Del Deo, Dolan, Griffinger & Vecchione
One Riverfront Plaza
Newark, New Jersey 071902
Attn: Russell Bershad, Esq.
(201) 596-4500 (tele.)
(201) 596-0545 (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
upon actual receipt provided a delivery receipt is obtained 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.
23. ESCROW AGREEMENT.
23.1 The Deposit shall be held by the Escrow Agent in escrow and disposed of
only in accordance with the provisions of this Section. The Deposit shall be
invested in an interest-bearing certificate of deposit, money market fund,
treasury bill or other similar security designated by CRLP, utilizing CRLP's
taxpayer identification number and all interest accruing thereon shall be paid
to CRLP, except as otherwise provided herein.
23.2 The Escrow Agent will deliver the Deposit to Contributor or to CRLP, as the
case may be, under the following conditions:
<PAGE>
(a) To Contributor on the Closing Date;
(b) To Contributor, together with all interest accruing on the deposit, upon
receipt of written demand therefor, such demand stating that CRLP has defaulted
in the performance of this Agreement and specifically setting forth the facts
and circumstances underlying such default. The Escrow Agent shall not honor such
demand until more than five (5) days have elapsed after the Escrow Agent has
mailed a copy of such demand to Contributor or CRLP, as the case may be, nor
thereafter if the Escrow Agent shall have received written notice of objection
from CRLP in accordance with the provisions of Section 23.3; or
(c) To CRLP upon receipt of written demand therefor, such demand stating that
this Agreement has been terminated in accordance with the provisions hereof, or
Contributor has defaulted in the performance of this Agreement, and specifically
setting forth the facts and circumstances underlying the same. The Escrow Agent
shall not honor such demand until more than five (5) days have elapsed after the
Escrow Agent has mailed a copy of such demand to Contributor or CRLP, as the
case may be, nor thereafter, if the Escrow Agent shall have received written
notice of objection from the other party in accordance with the provisions of
Section 23.3.
23.3 Upon the filing of a written demand for the Deposit by CRLP or Contributor,
the Escrow Agent shall promptly mail a copy thereof to the other party. The
other party shall have the right to object to the delivery of the Deposit by
filing written notice of such objection with the Escrow Agent at any time within
five (5) days after the mailing of such copy to it, but not thereafter. Such
notice shall set forth the basis for objecting to the delivery of the Deposit.
Upon receipt of such notice, the Escrow Agent shall promptly mail a copy thereof
to the party who filed the written demand.
23.4 In the event the Escrow Agent shall have received the notice of objection
provided for in Section 23.2 and within the time therein prescribed, the Escrow
Agent shall continue to hold the Deposit until (a) the Escrow Agent receives
written notice from Contributor and CRLP directing the disbursement of said
Deposit, in which case, the Escrow Agent shall then disburse said Deposit in
accordance with said direction, or (b) in the event of litigation between
Contributor and CRLP, the Escrow Agent shall deliver the Deposit to the Clerk of
the Court in which said litigation is pending, or (c) the Escrow Agent takes
such affirmative steps as the Escrow Agent may, in the Escrow Agent's reasonable
opinion, elect in order to terminate the Escrow Agent's duties including,
<PAGE>
but not limited to, depositing the Deposit with the Court and bringing an action
for interpleader, the costs thereof to be borne by whichever of Contributor or
CRLP is the losing party.
23.5 The Escrow Agent may act upon any instrument or other writing believed by
it in good faith to be genuine and to be signed and presented by the proper
person and it shall not be liable in connection with the performance of any
duties imposed upon the Escrow Agent by the provisions of this Agreement, except
for damage caused by the Escrow Agent's own negligence or willful default. The
Escrow Agent shall have no duties or responsibilities except those set forth
herein. The Escrow Agent shall not be bound by any modification of this
Agreement, unless the same is in writing and signed by CRLP and Contributor,
and, if the Escrow Agent's duties hereunder are affected, unless the Escrow
Agent shall have given prior written consent thereto. In the event that the
Escrow Agent shall be uncertain as to the Escrow Agent's duties or rights
hereunder, or shall receive instructions from CRLP or Contributor which, in the
Escrow Agent's opinion, are in conflict with any of the provisions hereof, the
Escrow Agent shall be entitled to hold the Deposit and may decline to take any
other action.
24. MISCELLANEOUS.
24.1 This Agreement constitutes the entire agreement between the parties and
incorporates and supersedes all prior negotiations and discussions between the
parties. This Agreement shall be binding upon and inure solely to the benefit of
each party hereto and their successors and assigns, and nothing in the Agreement
express or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
24.2 This Agreement cannot be amended, waived or terminated orally, but only by
an agreement in writing signed by the party to be charged.
24.3 This Agreement shall be interpreted and governed by the laws of the State
of New Jersey and shall be binding upon the parties hereto and their respective
successors and assigns.
24.4 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.
24.5 If any term, covenant or condition of this Agreement is held to be invalid,
illegal or unenforceable in any respect, this
<PAGE>
Agreement shall be construed without such provision.
24.6 Prior to and after the Closing, each party shall, from time to time,
execute, acknowledge and deliver such further instruments, in recordable form,
if necessary, and perform such additional acts, as the other party may
reasonably request in order to effectuate the intent of this Agreement, within
thirty (30) days of the request. Nothing contained in this Agreement shall be
deemed to create any rights or obligations of partnership, joint venture or
similar association between Contributor and CRLP. This Agreement shall be given
a fair and reasonable construction in accordance with the intentions of the
parties hereto, and without regard to or aid of canons requiring construction
against Contributor, CRLP or the party whose counsel drafted this Agreement. The
provisions of this Section shall survive the Closing.
24.7 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.
24.8 All references herein to any Section or Exhibit shall be to the Sections of
this Agreement and to the Exhibits annexed hereto unless the context clearly
dictates otherwise. All of the Exhibits annexed hereto are, by this reference,
incorporated herein.
24.9 In the event of any litigation or alternative dispute resolution between
CRLP and Contributor in connection with this Agreement or the transaction
contemplated herein, the non-prevailing party in such litigation or alternative
dispute resolution shall be responsible for payment of all expenses and
reasonable attorneys' fees incurred by the prevailing party. The provisions of
this Section shall survive the Closing.
24.10 Whenever used herein, the singular number shall include
the plural, the plural shall include the singular, and the use of any gender
shall be applicable to all genders.
25. MEMORANDUM OF AGREEMENT.
25.1 Contributor and CRLP shall, upon the execution of this
Agreement, execute and acknowledge a memorandum or short form of this Agreement
which CRLP shall have the right to record. In addition, the parties shall
execute and acknowledge a discharge or
<PAGE>
release of such memorandum or short form of this Agreement, which shall be
deposited with the Escrow Agent. Escrow Agent shall hold such discharge or
release in escrow and deliver the same (a) to CRLP at the Closing, or (b) to
Contributor ten (10) days after notice to CRLP that this Agreement has expired
or been terminated.
26. RESTRUCTURE.
26.1 Contributor, CRLP and Cali agree to consider, in good
faith, a restructuring of this transaction and an amendment to this Agreement
which provides, essentially (a) for the dissolution of the assets and
liabilities of the Contributor (including, without limitation, the Property) to
the members of Contributor, and (b) the conveyance by each member of their
respective interests in the Property to CRLP and Cali for the Consideration and
upon the other terms and conditions set forth in this Agreement, except that one
member would receive the portion of the Consideration to which it is entitled in
cash, and the other member would receive the portion of the Consideration to
which it is entitled part in cash and part in exchange for OP Units (the
"Restructure"). CRLP and Cali agree that if a Restructure occurs; (i) the Real
Property will not be sold for a period of three years after the Closing Date
and, (ii) they will endeavor to provide the member of the Contributor who
received OP units with the right to guaranty some mutually agreed upon amount of
debt of CRLP or of Cali. Notwithstanding the foregoing, the terms and conditions
of such a restructuring and amendment shall be subject to each parties consent
(at their absolute discretion), and none of the parties to this Agreement are
bound to enter into any such restructuring or amendment.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
CALI REALTY, L.P.
By: Cali Realty Corporation
By:
Roger Thomas, Vice President
CALI REALTY CORPORATION
By:
Roger Thomas, Vice President
PRINCETON OVERLOOK LIMITED LIABILITY
COMPANY
By:
The undersigned joins in the execution of the Agreement solely for the
purpose of acknowledging the receipt of the Deposit and its agreement to hold
the Deposit in escrow in accordance with the terms hereof.
ESCROW AGENT
STEWART TITLE INSURANCE COMPANY
By:
Name:
Title:
EXHIBIT NO. 127
FIRST AMENDMENT TO CONTRIBUTION
AND EXCHANGE AGREEMENT
THIS AGREEMENT (the "Agreement") is made this 18th day of December, 1997 among
PRINCETON OVERLOOK LIMITED LIABILITY COMPANY ("Contributor"), a limited
liability company organized under the laws of the State of New Jersey having an
address at c/o Bessemer Trust Company, N.A., 630 Fifth Avenue, New York, New
York 10111, CD OVERLOOK L.P. (the "Thompson Group"), a limited partnership
organized under the laws of the State of New Jersey having an address c/o
Cavendish Development, Inc., #205, 301 North Harrison Street, Princeton, New
Jersey 08540, PRINCETON OVERLOOK ASSOCIATES LIMITED PARTNERSHIP (the "POALP
Group", and together with Contributor and the Thompson Group, collectively, the
"Contributor Group"), a limited partnership organized under the laws of the
State of New Jersey having an address c/o John Daltner, Gilbert, Whitney &
Johns, Jefferson Plaza, 110 South Jefferson Road, Whippany, New Jersey 07891,
and CALI REALTY, L.P. (N/K/A MACK-CALI REALTY, L.P.) ("CRLP"), a Delaware
limited partnership and CALI REALTY CORPORATION (N/K/A/ MACK-CALI REALTY
CORPORATION) ("Cali", and together with CRLP, collectively, the "Cali Group"), a
Maryland corporation, each having an address at 11 Commerce Drive, Cranford, New
Jersey 07016.
RECITALS
A. Contributor, CRLP and Cali are parties to that certain Contribution and
Exchange Agreement dated as of the date of this Agreement (the "CEA"). The
Thompson Group and the POALP Group are the sole members of Contributor.
B. Section 26 of the CEA provides, inter alia, that the parties thereto
would consider, in good faith, a Restructure (as such term is defined therein),
and the parties hereto desire to set forth the terms and conditions of the
Restructure and otherwise amend the Agreement upon, and subject to, the terms,
covenants and conditions herein contained.
C. All capitalized terms used herein shall have the respective meanings
ascribed to them in the CEA unless otherwise indicated.
<PAGE>
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and for Ten Dollars ($10.00) and other good and valuable consideration,
the mutual receipt and legal sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, do hereby agree to amend
the CEA as follows:
1. RESTRUCTURE.
1.1 The Thompson Group and the POALP Group shall, prior to Closing,
cause Contributor to be dissolved and its assets (including, without limitation,
the Property) and liabilities (including, without limitation, the liabilities
under the CEA) to be distributed in accordance with the terms of a separate
agreement. At the Closing, the Thompson Group and the POALP Group shall each
cause their respective interests in the Property to be sold, assigned,
transferred and conveyed to CRLP in accordance with the terms, covenants and
conditions of the CEA as amended hereby. The Thompson Group and the POALP Group
are jointly and severally bound by all of the terms, covenants and conditions
set forth in the CEA, and they jointly and severally assume the obligations and
liabilities of Contributor set forth in the CEA as amended hereby, as though the
Thompson Group and the POALP Group were parties to the CEA instead of
Contributor.
1.2 Notwithstanding the provisions of Section 2.1 of the CEA to the
contrary, CRLP shall cause (i) the $21,581,500.00 Cash Payment (subject to
adjustment as provided for under the CEA) to be paid at Closing as follows: (a)
$_________________ to the Thompson Group, and (b) $_________________ to the
POALP Group, by wire transfer of federal funds to an account designated by each
party, and (ii) the Contributor Units to be issued to Unitholders designated by
the POALP Group as set forth on Schedule 1.2 attached hereto.
2. REPRESENTATIONS AND WARRANTIES.
2.1 The Thompson Group and the POALP Group each hereby warrant and
represent the following:
(a) The Thompson Group and the POALP Group are each duly organized and
validly existing limited partnerships organized under the laws of the State of
New Jersey and duly authorized to transact business in the State of New Jersey,
have all requisite power and authority to execute and deliver this Agreement and
all other documents and instruments to be executed and delivered hereunder, and
to perform their respective obligations hereunder and under
<PAGE>
such other documents and instruments in order to sell the Property in accordance
with the terms and conditions hereof. All necessary actions of the partners of
the Thompson Group and the POALP Group to confer such power and authority upon
the persons executing this Agreement and all documents which are contemplated by
this Agreement on their behalf have been taken.
(b) This Agreement, when duly executed and delivered, will be the
legal, valid and binding obligation of the Thompson Group and the POALP Group,
enforceable in accordance with the terms of this Agreement. The performance by
the Thompson Group and the POALP Group of their respective duties and
obligations under this Agreement and the documents and instruments to be
executed and delivered by them hereunder will not conflict with, or result in a
breach of, or default under, any provision of any of the respective
organizational documents of either the Thompson Group or the POALP Group 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 either party is a party or by which its assets are or may be bound.
(c) Neither the Thompson Group nor the POALP Group have made a general
assignment for the benefit of creditors, filed any voluntary petition in
bankruptcy or suffered the filing of any involuntary petition by its creditors,
suffered the appointment of a receiver to take possession of all, or
substantially all, of its assets, suffered the attachment or other judicial
seizure of all, or substantially all, of its 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.
The provisions of Section 5.4 of the CEA shall apply to the representations and
warranties of the Thompson Group and the POALP Group set forth in this Section
2.1, and the Thompson Group and the POALP Group shall each be individually
liable for the obligation to indemnify, defend and hold Cali and CRLP harmless
from any breach, inaccuracy or incompleteness by such party of a representation
or warranty made by such party contained in this Section 2.1 to the extent
provided for in Section 5.4 of the CEA. Notwithstanding the foregoing, however,
except as provided in Section 2.2 of this Agreement, the Thompson Group and the
POALP Group shall each be jointly and severally liable for the obligation to
indemnify, defend and hold Cali and CRLP harmless from any breach, inaccuracy or
incompleteness of the representations and warranties of the Contributor
contained in the CEA, and the aggregate liability of the Thompson Group and the
POALP Group under Section 5.4 of the CEA shall be $250,000.00 as provided
therein.
<PAGE>
2.2 The representations and warranties set forth in Section 5.2 of the
CEA shall be deemed to be made by and on behalf of the POALP Group and the
Unitholders, and the Thompson Group shall have no liability to Cali or CRLP for
any breach, inaccuracy or incompleteness thereof. Notwithstanding anything to
the contrary contained in Section 5.4 of the CEA, the representations and
warranties of POALP and the Unitholders contained in Section 5.2 shall survive
the Closing Date indefinitely and shall not be subject to the $250,000.00
limitation of monetary liability provided for in Section 5.4 of the CEA.
2.3 The Thompson Group shall maintain its existence for a period of six
(6) months after the Closing Date or, if a claim is made by Cali or CRLP
pursuant to the terms of Section 5.4 of the CEA (as amended hereby), the
Thompson Group shall maintain its existence for such longer period of time as
may be necessary for Cali or CRLP to prosecute its claim to completion and, if
it is successful in such proceeding, to obtain and collect the value of its
claim. The provisions of this Section 2.3 shall survive the Closing.
3. LIMITED GUARANTY OF THE POALP GROUP.
3.1 In order to assist the Unitholders in deferring the recognition of gain for
Federal income tax purposes resulting from the contribution of the Real Property
to CRLP, at Closing, or at any time subsequent thereto in accordance with the
terms hereof, CRLP and its subsidiaries and affiliates will permit the Unit
Holders to guarantee or indemnify CRLP or Cali for a portion of any debt
incurred by CRLP or Cali or their affiliates and/or their subsidiaries
(collectively the "Cali Debt") in the aggregate amount of up to $2,000,000.00
(the "POALP Debt Amount"). CRLP, Cali and their subsidiaries and affiliates
agree to use commercially reasonable efforts, to the extent possible, to
maintain a sufficient amount of liabilities to permit the Unitholders to
guarantee or indemnify, as the case may be, the POALP Debt Amount in order to
allow the Unitholders to continue to defer recognition of gain for Federal
income tax purposes. CRLP and Cali agree to take any and all reasonable actions
necessary for the execution of each guarantee, indemnity, security or pledge
agreement by the Unitholders to result in basis for the Unitholders for Federal
income tax purposes.
3.2 Notwithstanding the foregoing provisions of Section 3.1, it is
expressly understood and agreed that CRLP, Cali and their subsidiaries and
affiliates have prior and present commitments to maintain a certain amount of
liabilities (approximately
<PAGE>
$530,000,000.00) and that they may in the future, from time to time, make
additional commitments for the same in connection with the issuance of
additional Units in exchange for other properties to unrelated third parties in
tax deferred transactions (collectively, the "Other Groups") and, if so, the
aggregate amount of debt for such Other Groups is referred to herein as the
"Other Debt Amounts." CRLP and Cali will use their commercially reasonable
efforts to maintain, to the extent possible, an amount of liabilities in excess
of the Other Debt Amounts to enable the Unitholders to continue to guarantee or
indemnify a portion of the Cali Debt up to the POALP Debt Amount in order to
maintain for their tax position deferring gain present that results from the
contribution of property to CRLP, provided that CRLP or Cali is not adversely
affected. In this regard, the Unitholders agree to readjust the amounts of their
guarantees and indemnities, and CRLP, Cali and their subsidiaries and affiliates
agree to use commercially reasonable efforts to structure its financing, in such
a way to permit the Unitholders to restructure their respective guarantees or
indemnities so that the re-computed POALP Debt Amounts maintain the deferral of
Federal income taxes.
4. RESTRICTIONS ON SALE OF THE PROPERTY
4.1 From the period (the "Restricted Period") that commences on the Closing Date
and ends upon the earlier of the date upon which the original Unitholders
"Intended Transferee's" (as defined below) have transferred, sold or otherwise
disposed of ninety-eight (98%) percent or more of their Units in a taxable
transaction or any other transaction which results in a basis step-up to the
Unitholders in the Units to their current fair market value, to other than
Permitted Designees, or (c) the third (3rd) anniversary of the Closing, CRLP,
Cali and their subsidiaries and affiliates may not dispose of or distribute the
Real Property at any time except (i) in a tax-free like-kind exchange which
satisfies the requirements of Code Section 1031 and the Treasury Regulations
promulgated thereunder, (ii) if a sale or disposition of the Real Property would
not result in recognition of Built-in Gain by the Unitholders, (iii) otherwise
in compliance with the provisions of this Section 4, or (iv) if CRLP pays to the
Unitholders an amount equal to the sum of (A) the federal, state, and local
income taxes payable by the Unitholders resulting from the recognition of the
Built-in Gain triggered by such sale, and (B) an additional payment in an amount
equal to the amount such that after payment by the Unitholders of all taxes
(including interest or penalties) on amounts received under Section 4.1 (iv)(A)
and this Section 4.1 (iv)(B), the Unitholders retain an amount equal to the
amount described in Section 4.1(iv)(A). After the Restricted Period, the
<PAGE>
restrictions contemplated by this Section 4 shall terminate in their entirety.
"Permitted Designees" shall include any inter vivos transfer to (i) spouses of
the Intended Transferees, or (ii) any trusts or other entities in which they own
an interest unless any such transfers trigger Built-in Gain or result in a basis
step-up to the Unitholders. For purposes of this Section 4.1, unless CRLP is
furnished with an opinion of counsel to the contrary, any transfer of the Units
to any person or entity other than a Permitted Designee is presumed to be a
taxable transaction. The Unitholders agree to cooperate with CRLP and Cali
regarding the calculation of the amount of actual Built-in Gain attributable to
the Real Property recognized upon any transfer. For purposes of this Agreement,
the term "Built-in Gain" for the Real Property shall mean the excess, if any, of
the fair market value of the Real Property on the Closing Date over the Real
Property's basis for Federal income tax purposes on such date. The provisions of
this Section 4.1 shall survive the Closing. The "Intended Transferee's" shall
mean the beneficial owners of the Unitholders, John Daltner, Estate of Edward R.
Purcell and Troast Overlook Associates.
4.2 Notwithstanding Section 4.1 above, during the Restricted Period, CRLP, Cali
and their subsidiaries and affiliates may dispose of the Real Property at any
time in connection with (i) the sale of all or substantially all of the
properties owned by CRLP under such terms and conditions which the Board of
Directors of Cali (the "Board"), in its sole judgment, determines to be in the
best interests of Cali and its public stockholders, or (ii) a sale (including
without limitation a transfer to a secured lender in lieu of foreclosure) which
the Board, in its sole judgment, determines is reasonably necessary (1) to
satisfy any material unsecured debt, judgment or liability of CRLP or Cali when
they become due (at maturity or otherwise) or (2) to cure any default under any
material mortgage, debt or liability with respect to the Real Property provided,
however, that no such sales will be made under clause (ii) unless CRLP is unable
to settle or refinance any such debts, judgments or liabilities or cure any such
defaults after making commercially reasonable efforts to do so under then
prevailing market conditions. If the Board, in its sole judgment, determines
that it is necessary to dispose of properties to satisfy a material unsecured
debt, judgment or liability of CRLP when it becomes due (at maturity or
otherwise), CRLP covenants and agrees that it shall use commercially reasonable
efforts to sell properties other than the Real Property to satisfy such material
debt, judgment or liability. If, after the Cali has made commercially reasonable
efforts to sell only properties other than the Real Property, an unsatisfied
portion of such debt, judgment or liability remains, CRLP may sell the Real
Property as necessary to
<PAGE>
satisfy fully the remaining unpaid portion. In the case of any disposition of
the Real Property pursuant to this Section 4.2, the Unitholders may attempt to
obtain title to the Real Property so long as any equity in the Real Property
which CRLP may otherwise be seeking to preserve is not lost or jeopardized.
Moreover, in the event of a transfer of the Real Property to a secured lender in
lieu of foreclosure, CRLP shall use commercially reasonable efforts to provide
the Unitholders the right to (a) cure the default, (b) acquire the Real Property
from the lender subject to the debt or liability, or (c) permit the Unitholders
to exercise CRLP's right of redemption with respect to the Real Property.
4.3 After the expiration of the Restricted Period, CRLP, Cali or their
subsidiaries or affiliates may dispose of the Real Property at any time
provided, however, that CRLP, Cali and their subsidiaries and affiliates shall
use commercially reasonable efforts (without cost, liability or expense to CRLP,
Cali or their subsidiaries or affiliates) to prevent any such sale, transfer or
other disposition of the Real Property from resulting in the recognition of
Built-in-Gain by Unitholders.
4.4 In the event CRLP desires to sell or otherwise desires to dispose
of, or receives an offer to purchase, the Real Property pursuant to Section 4.2
or 4.3 above, CRLP shall give notice (the "Offering Notice") thereof to the
Unitholders. The Offering Notice shall specify the nature of the sale, and the
consideration and other material terms upon which it intends to undertake such
sale. Within ten (10) days thereafter, the Unitholders may elect, by notice to
CRLP, to purchase the Real Property. If the Unitholders elect to so purchase,
then such purchase shall be consummated on the terms and conditions set forth in
the Offering Notice. Unitholders may use their Units as currency, in whole or in
part, in connection with the purchase of any of the Real Property from CRLP
pursuant to this Section 4.4. If within the ten (10) day period during which the
Unitholders have the right to elect to purchase the Real Property for sale under
the Offering Notice, Unitholders do not make the election or fail to respond to
the Offering Notice, then CRLP may undertake to sell the Real Property on such
terms and conditions as it shall elect.
5. CEA REMAINS BINDING. Except as and to the extent modified hereby, the CEA
shall remain in full force and effect and binding upon the parties in accordance
with its terms.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
MACK-CALI REALTY, L.P.
By: Mack-Cali Realty Corporation
By:
Roger Thomas, Executive Vice President
MACK-CALI REALTY CORPORATION
By:
Roger Thomas, Executive Vice President
PRINCETON OVERLOOK LIMITED
LIABILITY COMPANY
By: CD OVERLOOK, L.P., its Managing
Member
By: Cavendish Development Company, Inc.,
its General Partner
By:
CD OVERLOOK, L.P.
By: Cavendish Development Company, Inc.,
its General Partner
By:
PRINCETON OVERLOOK ASSOCIATES LIMITED
PARTNERSHIP
By: Troast Overlook Associates,
its General Partner
By: Troast Properties Partnership,
General Partner
By:
John G. Troast
General Partner
By:
John G. Troast, Jr.
General Partner
EXHIBIT NO. 10.128
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
THE CONCORD PLAZA JOINT VENTURE, AS SELLER,
AND
CALI REALTY ACQUISITION CORP., AS BUYER
This Purchase and Sale Agreement (this "Agreement") is entered into as
of the Effective Date (hereinafter defined), by and between THE NEW CONCORD
PLAZA JOINT VENTURE (dba The Concord Plaza Joint Venture), a Texas joint venture
of which The New Plaza Corporation, a Delaware corporation, is Managing
Venturer, as Seller (herein "Seller"), and CALI REALTY ACQUISITION CORP., a
Delaware corporation, as Buyer (herein "Buyer").
In consideration of the mutual covenants and representations herein
contained, and other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Seller and Buyer agree as follows:
1. Sale and Purchase of Property. Seller hereby agrees to sell to Buyer, and
Buyer hereby agrees to purchase from Seller, upon the terms and conditions
herein set out, the following described real and personal property in San
Antonio, Bexar County, Texas (herein collectively the "Property"):
1.1. The following real property:
1.1.1.Lot 2, Block 1, New City Block 16743, CENTRAL BUSINESS PARK,
UNIT 2, City of San Antonio, Bexar County, Texas, according to
plat recorded in Volume 9509, Page 42, Deed and Plat Records,
Bexar County, Texas;
1.1.2.Together with all right, title and interest of Seller in and to
(a) all streets, roads, alleys, easements, rights-of-way,
licenses, rights of ingress and egress, vehicle parking rights
and public places, existing or proposed, abutting, adjacent, used
in connection with or pertaining to the real property or the
Improvements (as hereinafter defined); (b) any strips or gores
between the Real Property and abutting or adjacent properties;
and (c) all water and water rights, timber, crops and mineral
interests pertaining to such real property (such real property
and other rights, titles and interests being hereinafter
sometimes called the "Real Property");
1.2. All buildings, structures and other improvements, including an eleven
(11) story office building commonly known as the Harte Hanks Tower in
Concord Plaza (such buildings, structures and other improvements being
hereinafter sometimes called the
<PAGE>
"Improvements") now or hereafter situated on the Real Property;
1.3. All fixtures, equipment, systems, machinery, furniture, furnishings,
inventory, goods, building and construction materials, supplies, of
every kind and character, now owned or hereafter acquired by Seller,
which are now or hereafter attached to or situated in, on or about the
Real Property or the Improvements, which are used in or necessary to
the complete and proper planning, development, use, occupancy or
operation thereof, or acquired (whether delivered to the Real Property
or stored elsewhere) for use or installation in or on the Real
Property or the Improvements, and all renewals and replacements of,
substitutions for and additions to the foregoing, including, but
without limiting the foregoing, any and all fixtures, equipment,
machinery, systems, facilities and apparatus for heating, ventilating,
air conditioning, refrigerating, plumbing, sewer, lighting,
generating, cleaning, storage, incinerating, waste disposal,
sprinkler, fire extinguishing, communications, elevators, security
alarm, gas, electrical, water, all tanks, pipes, wiring, conduits,
ducts, doors, partitions, fans, motors, engines and boilers; but
specifically excluding any office furniture, office supplies or office
computers or office equipment of Seller, whether or not used in the
operation of the Property, but which are not required for the
operation of the Property, or any files or records of Seller which are
unrelated to the operation or maintenance of the Improvements (all of
which, other than the immediately above specifically excluded items,
are herein sometimes referred to together, as the "Accessories");
1.4. All (a) plans and specifications, change orders, shop drawings,
manuals and other construction documents for the Improvements,
prepared by Seller's architect and/or civil engineer, and any other
engineering studies, which in each case, to the current actual
knowledge of Seller, are in the possession of or available to Seller
at no additional expense to Seller (but nothing herein creates any
obligation on the part of Seller to cause any such plans or studies to
be prepared) (the "Project Plans"), (b) engineering reports, soils
reports and environmental reports which in each case, to the current
actual knowledge of Seller, are in the possession of or available to
Seller at no additional expense to Seller (but nothing herein creates
any obligation on the part of Seller to cause any such plans or
studies to be prepared) (the "Project Studies"), (c) deposits for
utility service and accounts, contract rights, instruments, documents,
commitments (the "Contract Deposits"), (d) all right, title and
interest of Seller in any permits, licenses, franchises, certificates,
approvals and other rights and privileges obtained in connection with
the Real Property, the Improvements or the Accessories or any part
thereof (the "Permits") (but nothing herein creates any obligation on
the part of Seller to cause any such permits to be obtained), and (e)
Seller's rights in any service, maintenance, union, employment, or
other contracts, equipment leases or other material agreements
pertaining to the operations of the Property (the "Contracts"), if
assigned and assumed by Buyer at the Closing pursuant to the terms of
this Agreement;
1.5. Trademarks, Tradename, symbols and other marks and trade or business
names relating to
<PAGE>
the ownership, use and/or management of the Property, to the extent of
Seller's interest therein, including the right to the use of the name
"Concord" only as "Concord Plaza" with respect to the Property or any
future expansion thereof, but not otherwise (the "General
Intangibles"), but such right to the use of the name "Concord Plaza"
is not exclusive and is also available for use with respect to the
development of the properties contiguous to the north and south
boundaries of the Property;
1.6. All right, title and interest of Seller in and to all lease and
occupancy agreements, written or oral, for any leased Property (the
"Leases" or "Lease Agreements"; tenants under any Leases are herein
"Tenant" or "Tenants");
1.7. All deposits from any Tenant, which deposits are currently held in
escrow at The Frost National Bank in San Antonio, Texas (the "Security
Deposit Escrow");
1.8. Any other personal property used in the operations of the Improvements
[but specifically not including any vehicles, cash or marketable
securities or funded reserve accounts of Seller, or any tax,
maintenance or improvement or other escrow of Seller other than the
Security Deposit Escrow] (the "Personal Property"); and
1.9. Any other properties, rights, titles and interests, if any, specified
in any Section or by any Article of this Agreement as being part of
the Property.
2. Effective Date. The Effective Date of this Agreement will be the date on
which a fully executed copy of this Agreement is delivered to the Title
Company.
3. Title Company. The Title Company shall be CHICAGO TITLE INSURANCE COMPANY,
9311 San Pedro Avenue, Suite 111, San Antonio, Texas 78216, Attention: Mr.
Michael Guerra, in association with and assisted by Marathon Title Company.
4. Earnest Money.
4.1. Within three (3) business days after the Effective Date, the Buyer
will pay directly to Seller, in cash by wire transfer of immediately
available good funds, the amount of ONE HUNDRED THOUSAND AND NO/100
DOLLARS ($100,000.00), as Earnest Money hereunder, which shall be
non-refundable and shall be deemed fully earned by Seller when
received by Seller, except as otherwise set forth herein (the "Initial
Earnest Money Payment").
4.2. Prior to the expiration of Buyer's Examination Period (as provided in
Section 12, below), if Buyer fails to terminate this Agreement as
therein provided, Buyer will cause to be deposited with the Title
Company, in cash by wire transfer in immediately good funds, the
amount of TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
<PAGE>
($250,000.00), to secure Buyer's performance pursuant to the terms and
conditions of this Agreement (the "Earnest Money Deposit"). The
Initial Earnest Money Payment and the Earnest Money Deposit will be
held in interest bearing accounts at The Frost National Bank in San
Antonio, Texas, and the interest earned thereon will accrue to the
benefit of Buyer, and will be added to the Initial Earnest Money
Payment and the Earnest Money Deposit as earned. The Earnest Money
Deposit will be disbursed in accordance with the applicable provisions
of this Agreement.
5. Purchase Price.
5.1. The Purchase Price shall be THIRTY-FOUR MILLION AND NO/100 DOLLARS
($34,000,000.00).
5.2. The Purchase Price shall be paid to Seller all cash at Closing, by
wire transfer of immediately available good funds.
5.3. At the Closing, the amount of the Initial Earnest Money Payment will
be credited to the Purchase Price and the Earnest Money Deposit will
be applied to the Purchase Price.
6. Survey.
6.1. Within five (5) business days after the Effective Date hereof, Seller,
at its expense, will deliver to Buyer a current ALTA/ASCM survey of
the Property (dated within six (6) months of the Effective Date), in
such form and content as to permit the deletion of the "survey
exception" for all matters other than the area of the land from the
Owner's Title Policy (herein the "Survey").
6.2. The Survey shall be a new or recertified "as-built" survey, and will
be prepared and certified by Vickrey & Associates, Inc. (herein the
"Civil Engineer"), who is registered in the State of Texas.
6.3. The cost of the deletion of the "survey exception" from the Owner's
Title Policy (that is, other than the cost of the Survey itself), if
requested by Buyer, shall be at Buyer's expense.
6.4. The Survey shall indicate: (a) a legend specifying the dates of any
and all revisions to the Survey, and the designations as necessary to
include all easements, and other like encumbrances of record, that
will be exceptions to title; (b) a sketch or map of the general
vicinity of the Property; (c) field notes; (d) a note explaining the
basis of the bearings used; (e) the "true point of beginning"; (f) (1)
the size, location and type of all buildings, and other visible
structures, other improvements and items on the subject Property; (2)
the distance from each such structure to the Property line, and (3)
the location and dimensions of all alleys, streets, roads,
rights-of-way, easements, curb cuts, driveways, walkways, and other
points of ingress and egress, and other matters of record affecting
the subject Property
<PAGE>
according to the legal description and such easements and other
matters (with instrument book and page number indicated); (g) the
total number of parking spaces and number of handicap parking spaces
on the Property; (h) all visible manholes, catch basins, valve vaults
or other surface indications of substructures, pipelines, including
abandoned lines, roadways, footpaths, and other features that may
indicate usage by parties; (i) all wires and cables and all wire
bearing or guy poles on or within ten (10) feet of the Property; (j)
any setback lines of record; (k) visible intrusions or encroachments
on to the Property by building, structures, or other improvements on
adjoining premises; (l) visible intrusions or encroachments on any
easement, building setback line or other restricted area of record by
any buildings, structures or other improvements on the subject
Property; (m) the distance from the nearest intersecting street or
road; (n) the location and dimensions of, and the recording
information for, all easements and rights-of-way of record; (o) access
to all dedicated public streets or roads; (p) any portion of the
Property which is located within a Special Flood Hazard Area, Zone A,
as defined by the Flood Insurance Rate Map of the City of San Antonio,
Bexar County, Texas, on Community Panel No. 480045 0020 C, Revised:
August 2, 1990, and Flood Insurance Rate Map for Bexar County, Texas,
on Community Panel No. 480035 0350 B, Effective Date: October 16,
1984, as prepared by the Federal Emergency Management Agency; (q) the
Survey shall be made on the ground as per the field notes shown
thereon and correctly show the boundary lines and dimensions and area
of the land indicated thereon and each individual parcel thereof
indicated thereon; (r) the right-of-way with, center line and name of
all streets abutting the Property and whether each street is a public
or private way; and (s) monuments placed at all major corners of the
boundary of the Property, unless already marked.
6.5. The Survey shall contain a certificate specifically addressed to both
Buyer and the Title Company and, if requested by Buyer, any lender of
Buyer in conjunction with the sale contemplated herein, verifying (a)
this survey was made on the ground as per the field notes shown hereon
and correctly shows the boundary lines and dimensions and area of the
land indicated hereon and each individual parcel thereof indicated
hereon; (b) all monuments shown hereon actually exist, and the
location, size and type of such monuments are correctly shown; (c)
this survey correctly shows the size, location and type of all
buildings, and other visible structures, other improvements and items
on the subject Property; (d) this survey correctly shows the location
and dimensions of all alleys, streets, roads, rights-of-way,
easements, building setback lines and other matters of record
referenced in Commitment No. 44-905-80-974526, with an effective date
of October 31, 1997, of the Title Company or of which the Civil
Engineer has been advised or has current actual knowledge, affecting
the subject Property according to the legal description and such
easements and other matters (with instrument book and page number
indicated); (e) except as shown, there are no (1) visible
improvements, visible easements, rights-of-way, party walls, drainage
ditches, streams, uses, discrepancies or conflicts, (2) visible
intrusions or encroachments from the subject Property onto adjoining
premises, streets, or alleys by any of said buildings, structures, or
other improvements, (3) visible intrusions or encroachments onto the
subject
<PAGE>
Property by building, structures, or other improvements on adjoining
premises, or (4) visible intrusions or encroachments on any easement,
building setback line or other restricted area of record by any
buildings, structures or other improvements on the subject Property;
(f) the distance from the nearest intersection street or road is as
shown hereon; (g) the subject Property was observed to have access to
a dedicated public street or road as shown hereon, accepted for
maintenance by the entity to which such street or road was dedicated;
(h) no portion of the subject Property is located within a Special
Flood Hazard Area, Zone A, 100 Year Flood Plain, as defined by the
Flood Insurance Rate Map for the City of San Antonio, Bexar County,
Texas, on Community Panel No. 480045 0020 C, Revised; August 2, 1990,
and Flood Insurance Rate Map for Bexar County, Texas on Community
Panel No. 480035 0350 B, Effective Date: October 16, 1984, as prepared
by the Federal Emergency Management Agency; (i) except as shown, all
utilities serving the Property enter through adjoining public streets
and/or easements of record; (j) the acreage of the Real Property; (k)
the total number or parking spaces and the number of handicap parking
spaces in the Property; and (l) that the Improvements are in
compliance with applicable FAA height restrictions
7. Title Commitment. Within five (5) business days after the Effective Date
hereof, Seller, at Seller's sole cost and expense, will cause the Title
Company to provide to Buyer a commitment for Title Insurance (the
"Commitment"). The Commitment will have attached legible copies of any and
all documents reflected therein affecting the Property (the "Title
Documents"). The Commitment shall guarantee to furnish Buyer at the Closing
a fully paid TLTA Owner's Title Insurance Policy covering the Property in
the aggregate face amount of the total Purchase Price, with no exceptions
other than the Permitted Exceptions (as defined below), (the "Title
Policy"). The Title Policy shall be at Seller's expense; but any additional
premium for deletion of the "survey exception", if requested by Buyer,
shall be at Buyer's expense.
8.
<PAGE>
Title and Survey Objections.
8.1. Buyer shall have until 5:00 p.m. CST on the tenth (10th) business day
after delivery to Buyer of the Survey and Commitment, within which to
approve or disapprove all items, including the information reflected
therein, in the Commitment and the Survey (any such objections being
the "Title and Survey Objections"), such approvals or disapprovals to
be within Buyer's sole discretion (the "Title and Survey Objection
Period"). If Buyer fails to disapprove any such item by specific
written notice to Seller and the Title Company within the Title and
Survey Objection Period, Buyer shall be deemed to have approved such
item. Buyer is deemed to object to all matters listed on Schedule C of
the Commitment.
8.2. If and to the extent that the Commitment is updated for any reason,
then notwithstanding anything to the contrary contained in this
Section 8 (but subject to Section 8.5 with respect to any change after
expiration of Buyer's Examination Period), Buyer shall have three (3)
business days from its receipt of any update or continuation of the
Commitment and/or Survey to notify Seller of any objections to any
items not previously reflected in the Commitment or Survey, as the
case may be, and such item shall not be deemed to be a Permitted
Exception unless Buyer shall fail to disapprove of any such matter by
written notice to Seller and the Title Company within such three (3)
business day period.
8.3. Subject to Section 8.5 with respect to any change after expiration of
Buyer's Examination Period, any exceptions in the Commitment which are
not objected to by Buyer by the expiration of the Buyer's Examination
Period, or with respect to any updated Commitment, within three (3)
business days after Buyer's receipt of same, will be deemed to be
approved by Buyer and shall constitute the "Permitted Exceptions".
8.4. If Buyer provides Title and Survey Objections, Seller will use its
good faith and best efforts to expeditiously cure such Title and
Survey Objections by the Closing Date; provided, however, Seller shall
be obligated (a) to cause to be released, on or before the date of
Closing, any monetary liens or security interests created by, under or
through Seller (including without limitation, the mortgage payable to
The Frost National Bank), and ad valorem taxes due on the Property,
and (b) to cause to be released, on or before the date of Closing,
liens and security interests created by, under or through third
parties, but in no event will Seller be obligated to expend or incur
any expense or liability for such cure for liens or security interests
created by, through or under third parties in excess of a maximum
outlay in costs and expenditures of One Hundred Thousand and no/100
Dollars ($100,000.00). If Seller is otherwise unable to cure any one
or more of such Title and Survey Objections, such failure shall not be
an event of default by Seller, but in such event Seller shall notify
Buyer in writing of such Title and Survey Objections (the "First
Election Notice"), and request that Buyer waive Buyer's right to
terminate this Agreement due to such objection(s). Buyer shall
thereafter have five (5) business days after receipt of the First
Election Notice within which to waive its termination right or to
terminate this Agreement.
<PAGE>
In the event Buyer fails to respond within such five (5) business day
period, Seller shall deliver a second notice (the "Second Election
Notice") specifying the Title and Survey Objection and stating that
Buyer failed to respond to the First Election Notice, and, Buyer will
be deemed to have waived and accepted the uncured and unsatisfied
Title and Survey Objections, which shall then become Permitted
Exceptions (hereinabove defined). If Buyer terminates this Agreement
under this Section 8, the Initial Earnest Money Payment, less One
Hundred Dollars ($100.00) to be retained by Seller as consideration
for this Agreement, and the Earnest Money Deposit will be refunded to
Buyer and the parties shall have no further obligations under this
Agreement except as to obligations which specifically are provided in
this Agreement to survive termination of this Agreement.
8.5. If and to the extent that there is any change in the Commitment or
Survey after expiration of Buyer's Examination Period, then in such
event only, Buyer will have until Closing to notify Seller of any
objections to any items not previously reflected in the Commitment or
Survey, as the case may be (the Supplemental Title and Survey
Objections"), and such item shall not be deemed to be a Permitted
Exception and Seller shall be obligated to cure such Supplemental
Title and Survey Objections or item in accordance with Section 8.4,
above. If Seller fails to cure or satisfy such Supplemental Title and
Survey Objections prior to Closing (other than as required by Seller
in Section 8.4, above), Buyer shall be entitled only to either (a)
waive such objections, in which event Buyer shall be deemed to have
accepted such uncured and unsatisfied objections (which shall become
Permitted Exceptions), or (b) terminate this Agreement by written
notice accordingly from Buyer to Seller at or prior to the Closing
Date, in which case the Initial Earnest Money Payment, less One
Hundred Dollars ($100.00) to be retained by Seller as consideration
for this Agreement, and the Earnest Money Deposit will be refunded to
Buyer and the parties shall have no further obligations under this
Agreement except as to obligations which specifically are provided in
this Agreement to survive termination of this Agreement.
9. Inspection Items. Seller, at its sole cost and expense, shall from and
after the Effective Date hereof deliver to Buyer, or otherwise make
available to Buyer, for its inspection and copying at Suite 303, 200
Concord Plaza, in San Antonio, Texas, at Buyer's expense, the following
(the "Inspection Items"), to the extent the same are in the possession of
Seller, and Seller makes no representations or warranties, written or oral,
express or implied, with respect to any Inspection Items, including, but
not limited to, the accuracy, adequacy or completeness of any such items,
except as specifically set out in Section 13, below:
9.1. Copies of all of the Project Plans (as defined in Section 1.4, above);
9.2. Copies of all Project Studies (as defined in Section 1.4, above);
9.3. Copies of all certificates of occupancy for the Property;
9.4. Copies of all certificates and/or other evidence of insurance insuring
the Improvements, and
<PAGE>
furniture, fixtures and equipment therein, and Seller's operations on
the Property, and any written notice received by Seller as to any
insurance currently in force with respect to the Property, or any part
thereof, which notice indicates that such coverage is not or, with the
passage of time, may not be in full force and effect in any material
manner or amount (but not to include any insurance of any Tenant
insuring such Tenant's leasehold improvements unless a copy of such
insurance policy is in possession of Seller; or if such insurance is
otherwise available to Seller under any applicable lease, then upon
written request by Buyer to Seller, Seller will request the same from
any such tenant);
9.5. A current rent roll for the Property (the "Project Rent Roll"),
current as of September 30, 1997 (and updated as of October 31, 1997,
as soon as such information is available to Seller), which shall
contain the following information; provided, however, during Buyer's
Examination Period, Seller by written notice to Buyer may modify
and/or supplement the information provided in the Project Rent Roll or
attached thereto. Seller does hereby specifically certify, as being
true and correct in all material manner and amount, taken as a whole,
the following information provided in the Project Rent Roll: (1) Name
of Tenant; (2) Suite number; (3) Current Monthly Rent Rate; (4) Base
Year Operating Expense Provision; (5) Net Rentable Square Feet per the
Lease Agreement; (6) Commencement Date of Current Term of Lease
Agreement; (7) Expiration Date of Current Term of Lease Agreement; (8)
the existence of any option to extend in any Lease Agreement; (9) the
existence of any option to expand under any Lease Agreement; and (10)
options to terminate prior to expiration of the current term under any
Lease Agreement. Seller also certifies that, to the current actual
knowledge of Seller, all other information provided in the Project
Rent Roll is true and correct in all material manner and amount, taken
as a whole, but for such purposes only, all information contained in
any Lease, a copy of which is provided as an exhibit to the Project
Rent Roll, shall be deemed incorporated by reference into the Project
Rent Roll, and to the extent any such terms are inconsistent, the
terms of the Leases will control.
9.5.1. Tenant:
9.5.1.1. Name of Tenant; and
9.5.1.2. Whether such party is a party related to Seller; and
9.5.1.3.Whether such Tenant is indebted to Seller or to the
current actual knowledge of Seller, indebted to any
Affiliate of Seller (as that term is defined in Section
34, below); and
9.5.1.4.Identity of any individual or entity other than Tenant
who occupies any of the leased premises by sublease,
license, or otherwise.
9.5.2. Suite number;
<PAGE>
9.5.3. Net Rentable Square Feet per the Lease Agreement;
9.5.4. Date of Lease Agreement:
9.5.4.1. The date of the Original Lease Agreement; and
9.5.4.2. The date of any amendments, or side letter or other
agreement amending any terms and provisions of any
such Lease Agreement;
9.5.5. Commencement Date of Current Term;
9.5.6. Current Term;
9.5.7. Expiration Date of Current Term;
9.5.8. Renewal Rights;
9.5.9. Purchase Options;
9.5.10. Rights of First Refusal;
9.5.11. Rights of Expansion;
9.5.12. Cancellation Option;
9.5.13. Current Monthly Rent (exclusive of any adjustments
for Basic Costs);
9.5.14. Base Year operating expense provision;
9.5.15. Security Deposit:
9.5.15.1. Amount; and
9.5.15.2. Amount thereof, if any, applied by Seller to
obligations of Tenant;
9.5.16. Past due rent more than 30 days past due;
9.5.17. Prepaid Rent;
9.5.18. Rent Reduction;
9.5.19. Rent Abatement;
9.5.20. Unfunded obligation for Leasehold Improvements;
<PAGE>
9.5.21. Unfunded obligation for leasing commission; and
9.5.22. Separate Lease Guaranty (hereinafter defined);
9.5.23. Any specific written objection from Tenant to Seller of any
tax, operating cost or other escalation payments or occupancy
charges, or any other amounts payable under its Lease;
9.5.24. Entitlement to electricity or other utilities, either without
charge or on a rent-inclusion basis (that is, other than on a
basis generally available to all tenants in the Property);
9.5.25. Rights to membership in any facilities in the Property,
including without limitation, the Concord Athletic Club; and
9.5.26. Parking obligations and/or commitments to Tenant or any other
party.
9.6. Copies of all current lease agreements, including amendments thereto,
or subleases or assignments thereof, pertaining to any of the
Property, which shall accompany the Project Rent Roll (herein the
"Leases").
9.7. All current files pertaining to leasing the Property, located in the
possession and control of Seller (herein the "Tenant Files").
9.8. Copies of all real and personal property tax bills for the current and
past three years pertaining to the Property.
9.9. Copies of any and all licenses, permits, governmental or
quasi-governmental approvals, including all building permits and
certificates of occupancy, in Seller's files.
9.10.Copies of any construction warranties and guarantees still in effect,
if any, and all warranties and guarantees pertaining to building
systems, building components and/or personal property, in Seller's
files.
9.11.All service, maintenance, employment and management contracts, and
leasing commission agreements pertaining to the Property.
9.12.Copies of all documents related to any pending or threatened
litigation affecting the Property or Seller.
9.13.Copies of all notices from and responses to any governmental or
quasi-governmental authority relating to (i) any pending or threatened
condemnation of the Property or any part thereof, (ii) any release,
threatened release, storage, disposal or use of Hazardous Substances
(as hereinafter defined) at or around the Property, or (iii) any
written notice from any
<PAGE>
governmental authority notifying Seller of a specific violation in the
Property of the Federal Americans with Disabilities Act, the Texas
Architectural Barriers Act, or any other material violations of any
zoning or building codes of the City of San Antonio or Bexar County .
9.14.All current files in the possession of Seller pertaining to the
maintenance and operation of the Property from January 1, 1993 to the
Effective Date hereof.
9.15.Copies of Seller's unaudited and internally prepared year end
financial statements for the Property for 1995 and 1996, and interim
financial statements for the nine (9) months ending September 30,1997.
10. Property Inspection.
10.1.During the Buyer's Examination Period, as defined below, but subject
to the rights of Tenants under the Leases, Buyer and its agents shall
have the right, at reasonable times and upon notice to Seller as
required in this Section 10.1, during normal business hours (and while
strictly adhering to the confidentiality and nondisclosure provisions
herein), to enter upon the Property and to conduct soil,
environmental, structural, mechanical and/or other studies or tests or
reviews, which Buyer deems advisable, at the expense of Buyer (the
"Property Inspection"). Buyer (i) shall not permit the Property
Inspection to be conducted in any manner that creates any materially
unsafe or hazardous condition on the Property, and (ii) shall not
permit the Property Inspection to be conducted in any manner that
unreasonably disturbs, interrupts, or interferes with any persons,
including, without limitation, Tenants or other occupants of the
Property, or their employees, customers or invitees. Buyer shall give
Seller written notice not less than two (2) business days prior to
conducting any test or inspection that physically affects the
Property, such as soil borings or internal examination of equipment or
components of improvements, if any. Buyer shall timely pay all fees
charged by Buyer's experts and shall not permit any claims to be made
against Seller or permit any liens to be created against the Property
by Buyer's experts. The entry upon the Property by Buyer, Buyer's
personnel and Buyer's experts shall be at their respective risks;
provided, however, nothing herein shall be deemed to release Seller
from any liability for its own negligence or willful misconduct. Buyer
shall have the right, upon not less than two (2) business days prior
written notice from Buyer to Seller specifically identifying the party
to be contacted and the information to be obtained, to contact third
parties regarding the Property, including without limitation, tenants,
contractors, property managers, parties to Contracts, and municipal,
local or other governmental officials and representatives.
10.2.Buyer shall not perform any test or inspection which will permanently
alter or damage the Property, and at the end of the Buyer's
Examination Period, Buyer shall at Buyer's sole cost and expense
restore and replace any part of the Property altered or damaged as a
result of the Property Inspection, to substantially the condition of
the Property prior to such studies. Any destructive or invasive
testing of the Property by Buyer or its
<PAGE>
agents will be subject to the prior written approval of Seller, and
Seller will not unreasonably withhold or delay its consent to any such
testing if there is a reasonable basis to believe that such testing
may disclose a violation or possible violation of an applicable
Environmental Law (as hereinafter defined). If Seller withholds its
consent for any reason, Buyer may terminate this Agreement and in such
event receive a refund of the Initial Earnest Money Payment less
$100.00 as independent consideration to Seller, and the Earnest Money
Deposit and neither Seller nor Buyer will have any further liability
to or responsibility to the other hereunder other than as provided in
this Agreement to specifically survive termination of this Agreement.
10.3.During Buyer's Examination Period, Buyer will review all of the
Contracts provided by Seller to Buyer, and Buyer will determine to its
satisfaction whether and with what prior notice each such Contract is
terminable. Buyer will be responsible at Closing to provide any notice
of termination, and will otherwise be responsible to assume all
Contracts from and after Closing until terminated (1) which are
terminable upon thirty (30) days or less written notice or (2) with
The City Public Service Board of San Antonio or (3) with BFI. Buyer's
obligation to close this transaction is subject to the condition that,
as of the Closing, the Contracts to be assigned to Buyer shall be in
full force and effect, unmodified, and free from any default in any
material manner or amount. Buyer will not be obligated to assume any
Contract if Buyer did not receive a copy of that Contract during the
Buyer's Examination Period. In any event: (1) any property management
and leasing agreement must be terminated at Closing; and (2) Buyer
will not assume any of the agreements pertaining the Athletic Club
Renovations provided for in Section 21.8, below, and Seller shall
retain and perform those agreements. Seller will be responsible for,
and does indemnify Buyer against, any Contract which is not terminable
in 30 days or less, other than contracts with The City Public Service
Board of San Antonio and BFI. The provisions of this Section 10.3
shall survive the Closing.
10.4.SELLER SHALL NOT BE LIABLE TO BUYER, OR ANY OF BUYER'S PERSONNEL,
AGENTS OR EXPERTS FOR, AND BUYER AGREES TO RELEASE, INDEMNIFY, DEFEND
AND HOLD SELLER (AND ITS OFFICERS AND JOINT VENTURE PARTNERS, AND
THEIR RESPECTIVE OFFICERS, DIRECTORS AND SHAREHOLDERS) HARMLESS FROM
AND AGAINST ANY CLAIMS BY ANY PERSON FOR INJURY, DAMAGES OR LOSS TO
PERSONAL PROPERTY RESULTING FROM, INCIDENT TO, OR ARISING OUT OF THE
CONDUCT OF THE PROPERTY INSPECTION OR THE ENTRY UPON THE PROPERTY BY
BUYER, BUYER'S PERSONNEL, AGENTS OR EXPERTS, AND FROM ALL
OUT-OF-POCKET COSTS INCURRED BY SELLER TO DEFEND AGAINST ANY SUCH
CLAIMS, INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEY'S FEES;
PROVIDED HOWEVER, THIS INDEMNITY SHALL NOT APPLY IF AND TO THE EXTENT
THAT SELLER'S NEGLIGENCE OR WILLFUL MISCONDUCT IS A CAUSE THEREOF.
<PAGE>
10.5.BUYER IS ENCOURAGED TO CONDUCT AN INDEPENDENT INVESTIGATION AND
INSPECTION OF THE PROPERTY, UTILIZING SUCH EXPERTS AS BUYER DEEMS TO
BE NECESSARY FOR AN INDEPENDENT ASSESSMENT OF THE STRUCTURAL AND
OPERATIONAL INTEGRITY OF THE IMPROVEMENTS AND EQUIPMENT USED IN THE
OPERATION OF THE PROPERTY, AND COMPLIANCE OF THE PROPERTY (INCLUDING
SPECIFICALLY THE IMPROVEMENTS) WITH APPLICABLE LAWS, INCLUDING THE
FEDERAL AMERICANS WITH DISABILITIES ACT, THE TEXAS ARCHITECTURAL
BARRIERS ACT, AND/OR APPLICABLE ENVIRONMENTAL LAWS (AS HEREINAFTER
DEFINED).
10.6.For purposes of this Agreement, the term "Property Information"
means: the results and products of the Property Inspection, including,
without limitation all civil engineering, soil, environmental,
operational and feasibility inspections, tests and reports thereof of
the Property and all other information regarding the Property obtained
by Buyer, including but not limited to the Inspection Items, which
shall be deemed to be proprietary information belonging to Seller and
shall be confidential unless and until Buyer acquires the Property
hereunder, even if such information is obtained at Buyer's expense.
Prior to Closing, or if Closing shall not occur, then for twenty-four
(24) months after the Effective Date, Buyer shall not disclose,
without the prior written consent of the Seller, in its sole
discretion, any of the Property Information to any person other than
(i) Buyer's personnel, (ii) Buyer's experts, attorneys, accountants,
consultants, lenders and equity investors (who in each case shall also
be advised of this confidentiality covenant), (iii) any governmental
agency to which Buyer has an obligation to disclose such Property
Information, and if any governmental agency requires or requests
disclosure of such Property Information, then only if Buyer provides
to Seller written notice prior to such disclosure, (iv) other persons
who Buyer reasonably believes needs to know such information for one
or more of the purposes stated in the Agreement, and who, in each
case, shall be informed by Buyer about the confidential nature of the
Property Information, (v) by valid court order with prior written
notice to Seller of any such disclosure, or (vi) as may be required by
law or any stock exchange. In the event this Agreement does not close
for any reason, then, on or before twenty (20) days after the
termination of this Agreement, Buyer shall destroy and provide a
specific written representation to Seller of such destruction, or
deliver to Seller, all copies of any part of the Property Information
specifically provided to Buyer in writing by Seller or its agents and
Inspection Items in the possession of or under the control of any of
Buyer's personnel or Buyer's experts, and all reports and results of
all tests, inspections and studies, and all civil engineering plans
prepared by or at the instance of Buyer in connection with this
Agreement or relating to the Property, to the extent that they are in
the possession of Buyer or its agents.
10.7.Prior to the Effective Date hereof, Buyer's agent executed a Concord
Plaza Confidentiality Agreement. The terms of such agreement are
incorporated herein by
<PAGE>
reference into this Section 10, and to the extent that the terms of
this Section 10 conflict with the terms of such agreement, the terms
of this Section 10 shall control.
10.8. The obligations under this Section 10 shall survive termination of
this Agreement.
11. Tenant Estoppel Certificates.
11.1.Promptly after the Effective Date, Seller shall request, in writing,
from each Tenant, and each any guarantor under any Lease Guaranty, an
Estoppel Certificate in a form reasonably requested by Buyer, which
shall be addressed to Buyer and shall be currently dated (collectively
the "Estoppel Certificates").
11.2.The current standard form of Lease provides the following with
respect to the obligation of a Tenant to, upon request, provide an
Estoppel Certificate:
"Tenant will, at any time and from time to time, within ten
(10) business days of its receipt of written request by
Landlord, at no cost or expense to Landlord, execute,
acknowledge, and deliver to Landlord an Estoppel Certificate
in such form as may be reasonably required by Landlord, such
Certificate to be executed by Tenant certifying: (i) that this
Lease is unmodified and in full effect if such is the case
(or, if there have been modifications, that this Lease is in
full effect as modified, and setting forth such modification),
(ii) the Commencement Date of the Lease, (iii) the Expiration
Date of the Lease, (iv) the dates to which the Rent has been
paid, and (v) either stating that to the knowledge of Tenant
no default exists hereunder or specifying each such default of
which Tenant may have knowledge and such other matters as may
be reasonably requested by Landlord; it being intended that
any such statement by Tenant may be relied upon by any
prospective purchaser or current or prospective mortgagee of
the Project (or the portion thereof which includes the
Premises)."
11.3.To the current actual knowledge of Seller, the Estoppel provision set
out in Section 11.2, above, is contained in all Leases without
material modifications.
11.4.During Buyer's Examination Period (defined below), Seller will use
its best efforts to secure from each Tenant a Tenant Estoppel
Certificate in form reasonably requested by Buyer; provided, however,
if and to the extent that the "Required Estoppels" (as hereinafter
defined) are not provided to Buyer by Closing, then Buyer shall be
entitled only to either (a) waive such requirement for the Required
Estoppels and proceed to Close, or (b) terminate this Agreement by
written notice accordingly from Buyer to Seller at or prior to the
Closing Date, in which case the Initial Earnest Money Payment, less
One Hundred Dollars ($100.00) to be retained by Seller as
consideration for this Agreement, and the Earnest Money Deposit will
be refunded to Buyer and the parties shall have no further obligations
under this Agreement except as to obligations which specifically are
provided
<PAGE>
in this Agreement to survive termination of this Agreement.
11.4.1. For purposes of this Section 11.4, "Required Estoppels" shall
mean the delivery to Buyer of Estoppel Certificates which do not
disclose any facts objectionable to Buyer in its reasonable
opinion, which Certificates shall be in form reasonably required
by Buyer, from:
11.4.1.1. Major Tenants (as defined below); plus
11.4.1.2. Tenants, including Major Tenants, under Leases which,
collectively, apply to at least eighty percent (80%) of
the net rentable area in the Property.
11.4.2. For purposes of this Section 11.4, "Major Tenants" are:
11.4.2.1. PaineWebber Incorporated;
11.4.2.2. Merrill Lynch, Pierce, Fenner and Smith, Inc.;
11.4.2.3. Davis, Adami & Cedillo, Inc.;
11.4.2.4. Colorado Sports Club Venture, LLC;
11.4.2.5. Intercontinental National Bank;
11.4.2.6. Intercontinental Premises Holding Corporation;
11.4.2.7. Hearst-Argyle Television, Inc.;
11.4.2.8. Baptist Memorial Health Care System;
11.4.2.9. Harte-Hanks Communications, Inc.;
11.4.2.10. Clear Channel Communications, Inc.; and
11.4.2.11. R. David, Inc. (Ruth's Chris Steak House).
12. Buyer's Examination Period.
12.1.Notwithstanding anything herein to the contrary, Buyer shall have
until 5:00 p.m. CDT on Tuesday, December 2, 1997 (the "Buyer's
Examination Period") in which to review the Commitment, Title
Documents, Inspection Items, the general condition of the Property,
and any other matters Buyer deems appropriate, and in which to
determine, in the Buyer's sole and absolute discretion, if the Buyer
shall elect to purchase the Property pursuant to this Agreement.
<PAGE>
12.2.If Buyer notifies Seller and the Title Company in writing, prior to
the expiration of the Buyer's Examination Period, that Buyer elects to
terminate this Agreement for any reason whatsoever, then the Title
Company shall, without the necessity of securing Seller's consent,
immediately return to Buyer the Earnest Money Deposit, but there will
be no obligations to return the Initial Earnest Money Payments or the
interest earned thereon (except as otherwise specifically provided for
herein), and neither party hereto shall have any further liability to
the other hereunder except as otherwise provided in this Agreement to
specifically survive termination of this Agreement. If Buyer fails to
so advise Seller and the Title Company within the Buyer's Examination
Period that Buyer elects to terminate this Agreement, it is
conclusively presumed that Buyer elects to purchase the Property
pursuant to this Agreement, and the Earnest Money Deposit will become
non-refundable to Buyer except as otherwise specifically provided in
this Agreement.
13. Seller's Representations and Warranties. THE PROPERTY IS TO BE CONVEYED TO
BUYER "AS IS" IN ALL RESPECTS, WITHOUT ANY REPRESENTATIONS OR WARRANTIES BY
SELLER, WRITTEN OR ORAL, EXPRESS OR IMPLIED, PERTAINING TO THE CONDITION,
OPERATION, USE OF THE PROPERTY, OR OTHERWISE, EXCEPT FOR THE LIMITED
REPRESENTATIONS AND WARRANTIES PROVIDED IN THIS SECTION 13 AND EXCEPT FOR
THE SPECIFIC WARRANTIES OF TITLE AS ARE OTHERWISE PROVIDED IN THIS
AGREEMENT, WHICH REPRESENTATIONS AND WARRANTIES ARE PROVIDED AS OF THE
EFFECTIVE DATE HEREOF AND WHICH REPRESENTATIONS AND WARRANTIES WILL BE
DEEMED REPEATED ON AND AS OF THE CLOSING DATE:
13.1.Organization. Seller is a joint venture duly created and validly
existing pursuant to and in good standing under the laws of the State
of Texas, and each venture partner of Seller is an entity duly
organized and validly existing pursuant to and in good standing under
the laws of the State of Texas or the State of Delaware.
13.2.Authority. Seller has full power and authority to sell and convey the
Property and to enter into and perform (a) this Agreement and (b) all
documents and instruments to be executed by Seller pursuant to this
Agreement (collectively, "Seller's Ancillary Documents"). Prior to
Closing, Seller shall have taken all partnership and corporate actions
required for the consummation of the transactions contemplated by this
Agreement. This Agreement has been, and Seller's Ancillary Documents
will be, duly authorized, executed and delivered by a duly authorized
representative of Seller. This Agreement constitutes, and the Seller's
Ancillary Documents upon delivery will constitute, valid and legally
binding obligations of Seller, enforceable against Seller in
accordance with their terms (except to the extent that enforcement may
be affected by laws relating to bankruptcy, reorganization, insolvency
and creditors' rights and by the availability of injunctive relief,
specific performance and other equitable remedies). The person signing
and delivering this Agreement on behalf of Seller has been duly
authorized to do so. Neither the execution and
<PAGE>
delivery of this Agreement and Seller's Ancillary Documents by Seller,
nor the consummation by Seller of the transaction herein and therein
contemplated, will conflict with or result in a breach of any of the
terms, conditions or provisions of Seller's Joint Venture Agreement
or, to the current actual knowledge of Seller, of any statute or
administrative regulation, or of any order, writ, injunction, judgment
or decree of any court or any governmental authority or of any
arbitration award. Seller owns legal and beneficial fee simple title
to the Property, which is to the current actual knowledge free and
clear of all liens and encumbrances except the Permitted Exceptions.
13.3.Required Consents. No consent, authorization, order or approval of,
or filing or registration with, any governmental authority or other
person is required for the execution and delivery by Seller of this
Agreement and Seller's Ancillary Documents and the consummation by
Seller of the transaction contemplated by this Agreement and Seller's
Ancillary Documents.
13.4.Litigation. No litigation proceedings or actions are pending with
respect to the Property or to which the Seller is a party (other than
a suit by Seller against the prior tenant in the restaurant for
eviction and attorneys fees which resulted in judgment [as yet
uncollected] in favor of Seller), and to the current actual knowledge
of Seller, no litigation claims, actions or proceeds are pending or
threatened against the Property or against Seller.
13.5.Use. Seller's current use of the Property is in accordance with
applicable zoning regulations, and the current use and occupancy of
the Property are in all material respects in accordance with
applicable deed restrictions, and other covenants and restrictions
affecting the Property.
13.6.
<PAGE>
Condition of the Property.
13.6.1. To the current actual knowledge of Seller, there are no defects
in the Improvements and/or furniture, fixtures and equipment used
by Seller in the operation of the Property, which taken as a
whole would have a material adverse effect on the operations or
value of the Property (during Buyer's Examination Period, Seller
will disclose to Buyer, in writing, certain matters pertaining to
the Improvements and equipment which Seller does not consider
material; but when disclosed Buyer should make its own
determination as to whether it considers any such matter
material, in which case Buyer's remedy will be to terminate this
Agreement under Section 12.2, hereof); and
13.6.2. All water, storm, sanitary sewer, gas, electricity, telephone
and other utilities serving the Property are supplied directly to
the Property by facilities of public utilities through lands as
to which public or private easements exist that will inure to the
benefit of Buyer, and to the current actual knowledge of Seller
are adequate to service the current normal operations of the
Improvements, and the cost of installation of such utilities has
been fully paid.
13.7.Compliance with Applicable Laws. For purposes of this Agreement: (a)
"Applicable Law" means all laws, rules, regulations (other than
Environmental Laws, which are covered separately below) statutes,
treaties, codes, ordinances, permits, certificates, orders and
licenses of and interpretations by, any Governmental Authority in
effect as of the Effective Date hereof, and applicable judgments,
decrees, injunctions, writs, orders or like action of any court,
arbitrator or other administrative, judicial or quasi-judicial
tribunal or agency of competent jurisdiction (including those
pertaining to health, safety or the Environment (including, without
limitation, wetlands) in effect as of the Effective Date hereof, and
those pertaining to the construction, use or occupancy of the Property
in effect as of the date hereof, and any restrictive covenant or deed
restriction or easement of record as of the Effective Date hereof
affecting the Property; and (b) "Governmental Authority" means any
federal, state, county, municipal or other governmental or regulatory
authority, agency, board, body, commission, instrumentality, court or
quasi-Governmental Authority. To the current actual knowledge of
Seller, the use and operation of the Property are not in violation in
any material respect of any Applicable Laws; excepting only that
Seller makes no representation or warranties with respect to the
applicability of or compliance with the federal Americans with
Disabilities Act or the Texas Architectural Barriers Act and it will
be the responsibility of Buyer to satisfy itself with respect to the
compliance of the Property with respect to such laws.
13.8.Inspection Items. (i) Copies of any Inspection Items provided to or
made available to Buyer are true and correct copies of the originals
of each such instrument, and (ii) copies of the real property tax
bills for the Property that have been furnished by Seller to Buyer are
true and correct copies of all such tax bills.
<PAGE>
13.9. Leases.
13.9.1. The Project Rent Roll and the Leases and the Lease Guaranties,
copies of which are attached thereto, when taken together,
represent all of the written and oral obligations of Seller, and
to the current actual knowledge of Seller, of any other party,
with respect to any leasing of any premises in the Property, and
there are no other agreements (written or oral) in the nature of
space leases, licenses, permits, franchises, concession or
occupancy agreements affecting the Property to which Seller is a
party (or to the current actual knowledge of Seller, with respect
to which Seller is not a party) affecting the Property in any
material manner or amount, and the Leases and the Lease
Guaranties are in full force and effect and binding in accordance
with their terms (except to the extent that enforcement may be
affected by laws relating to bankruptcy, reorganization,
insolvency and creditors' rights and by the availability of
injunctive relief, specific performance and other equitable
remedies).
13.9.2. Seller is not in default in any material manner or amount under
any Lease, and no event has occurred that, with the giving of
notice or passage of time or both would constitute a default in
any material manner or amount, and to the current actual
knowledge of Seller, no other party thereto is in default in any
material manner or amount under any Lease or Lease Guarantee, and
no event has occurred that, with the giving of notice or passage
of time or both would constitute a default in any material manner
or amount .
13.9.3. There are no pending claims asserted by Tenants or any
guarantor under any Lease Guaranty for offsets against rent or
any other claims (whether monetary or otherwise) made against
Seller, as Landlord, under any Lease or Lease Guaranty.
13.9.4. There are no fees or commissions payable (or will, with the
passage of time or occurrences of an event or both, be payable)
to any person or entity in regard to the leases by Seller except
as specifically set out in the Leases or Project Rent Roll or as
may be disclosed to Buyer in writing during Buyer's Examination
Period, and all such commissions due and payable to date have
been paid.
13.9.5. True and correct copies of all Leases and Lease Guaranties have
been delivered to Buyer as an exhibit to the Project Rent Roll,
and there are no other agreements, amendments, guaranties, side
letters or other documents, written or oral, which vary those
documents in any manner or amount which, taken as a whole, would
have a material adverse effect on the operation or value of the
Property.
13.9.6. Seller has no obligation, whether under any Lease or otherwise,
to contribute money or services to a tenants' association or
merchants' association, or to provide advice thereto.
<PAGE>
13.10. Tenant Files. To the current actual knowledge of Seller, the Tenant
Files are all files of Seller pertaining to any current Lease.
13.11. Project Plans. Seller makes no representations or warranties as to
the accuracy or adequacy or completeness of the Project Plans,
excepting only that, to the current actual knowledge of Seller, the
Improvements, as built, do not differ from the Project Plans in any
material manner.
13.12. Project Studies. Seller makes no representations or warranties as to
the accuracy or adequacy or completeness of any Project Studies.
13.13. Ad Valorem Taxes. The property is not now, and will not as a result
of the conveyance of the Property from Seller to Buyer be, subject to
an agriculture use or open space exemption or roll back for ad valorem
taxes. There are no pending or, to the current actual knowledge of
Seller threatened, actions, suits, proceedings or claims involving the
Property. There are no challenges or appeals pending regarding the
amount of the taxes on, or the assessed valuation of, the Property,
and no arrangements or agreements exist with any governmental
authority with respect thereto. There is no assessment for ad valorem
taxes due (in addition to the normal annual general real estate tax
assessment) which is pending or, to the current actual knowledge of
Seller, threatened, with respect to any portion of the Property.
13.14. Non-Foreign Seller. Seller is not a foreign person as defined in
Section 1445 of the Internal Revenue Code.
13.15. Condemnation. There are no condemnation proceedings pending or, to
the current actual knowledge of Seller threatened, with respect to any
portion of the Property.
13.16. Contracts. Each of the Contracts is in full force and effect in all
material respects (except to the extent enforcement may be affected by
laws relating to bankruptcy, reorganization, insolvency and creditors'
rights and by the availability of injunctive relief, specific
performance and other equitable remedies); and Seller is not in
default thereunder in any manner or amount which, taken as a whole,
will have a material adverse effect on the operations or value of the
Property, and to the current actual knowledge of Seller, no other
party is in default in any manner or amount which, taken as a whole,
will have a material adverse effect on the operation or value of the
Property.
13.17. Employees. There are no employees of Seller, at the Property or
otherwise, who by reason of Federal, state, county, municipal or other
law, ordinance, order, requirement or regulation, or by reason of any
union or other employment contract, written or otherwise, or any other
reason whatsoever, would become employees of Buyer as a result of the
purchase of the Property by Buyer. None of the employees of Seller
located on the Property are covered by or employed under any union
contract.
<PAGE>
13.18. Project Rent Roll. The information contained in the Project Rent
Roll, certified as provided in Section 9.5, above.
13.19. Permits. To the current actual knowledge of Seller:
13.19.1. All certificates of occupancy, licenses, certificates and
permits issued by any governmental or quasi-governmental agency
or authority or any board of fire underwriters or real estate
board or similar organization or institution, which are material
to the ownership and operations of the Property, have been
secured by Seller; and
13.19.2. The current use and occupation of any portion of the Property
does not violate any such certificates or permits or amendments
thereto required for the current use and operation of the
Property in any material manner; and
13.19.3. All such certificates and permits are in full force and
effect.
13.20. Insurance. To the current actual knowledge of Seller, all insurance
policies held by Seller relating to or affecting the Property are in
full force and effect and will be in full force and effect to the
Closing Date.
13.21. Liens. To the current actual knowledge of Seller, the only monetary
encumbrance against the Property is a mortgage in favor of The Frost
National Bank, which will be paid off at Closing, and no services,
material or work have been supplied to the Property for which payment
has not been made in full. If, subsequent to the Closing Date, any
mechanic's or other lien, charge or order for the payment of money
shall be filed against the Property or any portion thereof or against
Seller or Seller's assigns, based upon any act or omission, or alleged
act or omission before or after the Closing Date, of Seller, its
agents, servants or employees, or any contractor, subcontractor or
materialmen connected with the construction of improvements at the
Property, or repairs made to the Property under the direction or
authorization of Seller (that is, not individual Tenants) (whether or
not such lien, charge or order shall be valid or enforceable as such),
within ten (10) days after notice to Seller of the filing thereof,
Seller shall take such action, ), by bonding, deposit, payment or
otherwise, as will remove or satisfy such lien of record against the
Property.
13.22. Environmental Matters.
13.22.1. For purposes of this Agreement, the following terms shall have
the meanings set forth below:
13.22.1.1. "CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System database.
<PAGE>
13.22.1.2. "Environment" means all air, surface water,
watercourse, body of water, or any land thereunder,
groundwater or land, including land surface or subsurface,
and including all persons, fish, wildlife, biota and all
other natural resources.
13.22.1.3. "Environmental Claims" means any and all litigation,
administrative or judicial actions, suits, orders, claims,
liens, notices, notices of violations, investigations,
complaints, requests for information, proceedings, or
other communication (written or oral), whether criminal or
civil (collectively, "Claims"), including without
limitation, administrative or judicial claims, pursuant to
or relating to any applicable Environmental Law or
Hazardous Materials by any entity or person (including but
not limited to any Governmental Authority or citizens'
group) based upon, alleging, asserting, or claiming any
actual or potential (a) violation of or liability under
any Environmental Law, (b) violation of any Environmental
Permit, or (c) liability for investigatory costs, cleanup
costs, removal costs, remedial costs, response costs,
natural resource damages, property damage, personal
injury, fines, or penalties or loss of the use of property
or diminution in value of property, arising out of, based
on, resulting from, or related to the presence, or Release
into the Environment, of any Hazardous Materials at the
Property or at any off-site location to which Hazardous
Materials or materials containing Hazardous Materials
originating from the Property were sent for handling,
storage, treatment or disposal.
13.22.1.4. "Environmental Cleanup Site" means any location which
is listed or proposed for listing on the National
Priorities List, on CERCLIS, or on any similar federal,
state or local list of sites requiring investigation or
cleanup, or which is the subject of any pending or
threatened action, suit, proceeding, or investigation
related to or arising from any alleged violation of any
Environmental Law or the presence of a Hazardous Material.
13.22.1.5. "Environmental Condition" means the presence or Release
of a Hazardous Material at, in, on, under, about, or
emanating from or migrating to or from the Property which
has or may result in or form the basis of an Environmental
Claim.
13.22.1.6. "Environmental Law" means any and all federal, state,
county, local, and foreign laws, statutes, ordinances,
orders, codes, rules, regulations, policies, guidance
documents, judgments, decrees, injunctions, or agreements
with any Governmental Authority, in effect as of the
Effective Date hereof and the Closing Date, as the case
may be, relating to the protection of health and the
Environment and/or governing the handling, use,
generation, treatment, storage, transportation, disposal,
manufacture, distribution, formulation, packaging,
labeling, or any Release of Hazardous Materials, including
but not limited to: the Clean Air Act, 42 U.S.C. ss.7401,
et seq.; the Comprehensive Environmental Response,
<PAGE>
Compensation and Liability Act of 1980 ("CERCLA"), as
amended, 42 U.S.C. ss.9601 et seq.; the Federal Water
Pollution Control Act, 33 U.S.C. ss.1251 et seq.; the
Hazardous Material Transportation Act, 49 U.S.C. ss.1801
et seq.; the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. ss.136 et seq.; the Resource
Conservation and Recovery Act of 1976 ("RCRA"), as
amended, 42 U.S.C. ss.6901 et seq.; the Toxic Substances
Control Act, 15 U.S.C. ss.2601 et seq., the Occupational
Safety and Health Act of 1970, 29 U.S.C. ss.651 et seq.;
the Oil Pollution Act of 1990, 33 U.S.C. ss.2701 et seq.;
and the state laws applicable thereto in effect as of the
Effective Date hereof, and the Closing Date, as the case
may be, together with all administrative regulations
promulgated under any of the foregoing, in effect as of
the Effective Date hereof, and the Closing Date, as the
case may be; and any common law doctrine, including but
not limited to, negligence, nuisance, trespass, personal
injury, or property damage related to or arising out of
the presence, Release, or exposure to a Hazardous
Material, in effect as of the Effective Date hereof, and
the Closing Date, as the case may be.
13.22.1.7. "Environmental Permit" means any federal, state,
county, or local license, certificate, permit or
authorization issued under or in connection with any
Environmental Law.
13.22.1.8. "Hazardous Material" means petroleum and petroleum
products and derivatives, petroleum by-products,
radioactive materials, asbestos, gasoline, diesel fuel,
radon, urea formaldehyde, lead-containing materials,
polychlorinated biphenyls, and any other material, gas or
substance known or suspected to be toxic or hazardous
which could cause a detriment to, or impair the beneficial
use of, the Property, or constitute a health, safety or
environmental risk to any occupancy of the Property, and
any other materials or substances defined as or included
in the definition of "hazardous substances," "hazardous
materials," "hazardous wastes," "contaminants" or
"pollutants" under any applicable Environmental Law, but
in no event to include any such materials used in the
Property in not significant quantities in the ordinary
course of business consistent with all Applicable Law in
all material respects.
13.22.1.9. "Release" means any releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging,
treating, injecting, escaping, leaching, dumping or
disposing of a Hazardous Material into the Environment on,
at, into, onto or migrating from or into the Property,
regardless of whether the result of any intentional or
unintentional action or omission .
13.22.1.10. "Remediation Work" means the remediation (including
without limitation, investigation and removal) work required
to remediate the Hazardous Materials in compliance with
Environmental Laws.
<PAGE>
13.22.1.11. "Environmental Documents" shall mean all environmental
documentation in the possession or under the control of
Seller concerning the Property, or its environs, including
without limitation, all sampling plans, cleanup plans,
preliminary assessment plans and reports, site
investigation plans and reports, remedial investigation
plans and reports, remedial action plans and reports, or
the equivalent, sampling results, sampling result reports,
data, diagrams, charts, maps, analysis, conclusions,
quality assurance/quality control documentation,
correspondence to or from any Governmental Authority,
submissions to any Governmental Authority and directives,
orders, approvals and disapprovals issued by any
Governmental Authority.
13.22.1.12. "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.
13.22.1.13. "Notice" shall mean, any written communication of any
nature, whether in the form of correspondence, memoranda,
order, directive or otherwise.
13.22.2. Seller represents and warrants to Buyer, the following:
13.22.2.1. With respect to the Property, to the current actual
knowledge of Seller, both Seller and the Property are in
compliance with all applicable Environmental Laws and
Environmental Permits, and no circumstances exist that
would prevent or interfere with such compliance by Buyer
following Closing, other than the necessity to install a
water refiltering tank and related drainage improvements
for the car wash, and the cost to complete the same will
be borne by Seller and, to the extent that has not been
completed by Closing, the cost to complete the same will
be escrowed by Seller at Closing.
13.22.2.2. To the current actual knowledge of Seller, Seller has
obtained all Environmental Permits required for the
ownership, occupancy and use of the Property, if any.
13.22.2.3. With respect to the Property, there are no past,
pending, or to the current actual knowledge of Seller
threatened, Environmental Claims against Seller, or
involving the Property, and Seller has no current actual
knowledge of any facts or circumstances which could
reasonably be expected to form the basis for any
Environmental Claim against Seller involving the Property.
13.22.2.4. To the current actual knowledge of Seller, no Hazardous
Materials are present, and no Releases of Hazardous
Materials have occurred at, from, in, on, under or to the
Property or any real property adjacent thereto by Seller
or any affiliates or by any other person, other than the
use of Hazardous Materials in
<PAGE>
insignificant quantities in the operations of the Property
or by any Tenant in its operations within the Property in
compliance with Environmental Law.
13.22.2.5. To the current actual knowledge of Seller, neither the
Property nor any real estate adjacent thereto is an
Environmental Cleanup Site.
13.22.2.6. To the current actual knowledge of Seller, there are no
liens arising under or pursuant to any Environmental Law
on the Property and there are no facts, circumstances or
conditions that could reasonably be expected to result in
the imposition of such a lien.
13.22.2.7. There are no above-ground or, to the current actual
knowledge of Seller, under-ground storage tanks at the
Property or any real property adjacent thereto, other than
a restaurant grease trap, the water re-filtering tank for
the car wash to be installed, and other than a service
station located across the intersection from the Property.
13.22.2.8. To the current actual knowledge of Seller, the Property
has not been used as a transfer station, incinerator,
resource recovery facility, landfill (although portions of
the property may have been filled for development) or
other similar facility for receiving or treating, storing
or disposing of waste, garbage, refuse and other discarded
materials resulting from, without limitation, industrial,
commercial, agricultural, domestic and community
activities, including without limitation, sanitary,
hazardous, medical, special or other waste.
13.22.2.9. To the current actual knowledge of Seller, Seller has
provided to Buyer copies of, or access for inspection of,
all Environmental Documents relating to the physical
condition of the Property, in its possession or under its
control, and will in good faith use its best efforts to do
so after the execution of this Agreement until Closing,
promptly upon its receipt of the same.
13.23. Seller covenants to Buyer that, from the Effective Date hereof until
Closing, Seller shall promptly upon becoming aware of or receiving
Notice of any of the following conditions or occurrences, provide
Buyer with written notice thereof, including the details surrounding
the occurrence or condition and any action taken or proposed to be
taken by Seller in connection therewith: (a) any actual, pending or
threatened Environmental Claim against Seller, its general partners or
any affiliates or any other person or entity with respect to the
Property; (b) any Environmental Condition at the Property; (c) any
violation of Environmental Laws; or (d) any Release of Hazardous
Materials.
13.24. In the event that prior to Closing either Buyer or Seller discovers
the presence of any Hazardous Materials, at, in, on, under, about,
emanating from or affecting the Property, other than use of Hazardous
Materials used in insignificant quantities in the operations of
<PAGE>
the Property or by any Tenant in its operations within the Property in
compliance with Environmental Law, the discovering party shall give
prompt written notice of such discovery, together with such additional
relevant information as is within the possession of the discovering
party, to the other party. If, prior to Closing, any such Hazardous
Materials are discovered at, in, on, under, about, emanating from or
affecting the Property or any violation of any Environmental Law is
discovered with respect to the Property, provided Seller has not
knowingly permitted or caused such Hazardous Materials at, in, on,
under, about, emanating from or affecting the Property, Seller shall
have no obligation to commence any Remediation Work, and Buyer's sole
remedy shall be termination of this Agreement, and return of the
Initial Earnest Money Payment, less One Hundred Dollars ($100.00) to
be retained by Seller as consideration for this Agreement, and the
Earnest Money Deposit and the parties shall have no further
obligations under this Agreement other than as provided in this
Agreement to specifically survive termination of this Agreement. If
Seller has knowingly caused or permitted Hazardous Materials at, in,
on, under, about, emanating from or affecting the Property or if
Seller elects to perform Remediation Work pursuant to this Section,
Seller shall, at its own expense, be responsible for the Remediation
Work in a manner reasonably satisfactory to Buyer.
13.25. Independent Unit. Other than recorded easements, the Property is an
independent unit which does not now rely on any facilities (other than
facilities covered by easements appurtenant to the Property or
facilities or municipalities or public utilities) located on any
property that is not part of the Property to fulfill any municipal or
other governmental requirement, or for the furnishing to the Property
of any essential building systems or utilities (including drainage
facilities, catch basins, and retention ponds). Other than record
easements, no other building or other property that is not part of the
Property relies upon any part of the Property to fulfill any municipal
or other governmental requirement, or to provide any essential
building systems or utilities.
13.26. ERISA. Seller is not and is not acting on behalf of an "employee
benefit plan" within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended, a "plan" within
the meaning of Section 4975 of the Internal Revenue Code of 1986, as
amended, or an entity deemed to hold "plan assets" within the meaning
of 29 C.F.R. ss.2510.3-101 of any such employee benefit plan or plans.
13.27. At the Closing, Seller will again provide the representations set
out in this Section 13, or Seller will indicate the extent to which
any such representations are no longer true and correct
13.28. If because of circumstances which occur after the Effective Date,
any representations provided in this Section 13 are in any material
respect different than the representations set out in this Section 13,
above, Seller will take such action, at a cost not to exceed One
Hundred Thousand and no/100 Dollars ($100,000.00), as will be required
to make such
<PAGE>
representation true and correct.
13.29. If at the Closing the representations provided in this Section 13
are in any material respect different than the representations
provided in this Section 13 because of change of circumstances, and if
such change of circumstances are not a result of a knowing and
material breach of any representation of Seller under this Section 13,
then Buyer (as its only remedies) may either (a) waive any such change
in circumstances and such representations and warranties of Seller
shall be amended accordingly, or (b) elect to terminate this Agreement
and receive the return of the Initial Earnest Money Payment, less One
Hundred Dollars ($100.00) to be retained by Seller as consideration
for this Agreement, and the Earnest Money Deposit and neither Seller
nor Buyer will have any further liability or responsibility to the
other hereunder (other than as provided in this Agreement to
specifically survive termination of this Agreement).
13.30. If, at the Closing, any representation contained in this Section 13
is not accurate in any material respect for any reason other than
changed circumstances which are not a result of a knowing and material
breach of any representation of Seller (that is, other than as covered
by Section 13.29, above), Buyer will have the following options only:
(a) to waive such requirement and proceed with Closing in which case
Seller will be liable to reimburse Buyer for up to One Hundred
Thousand and no/100 Dollars ($100,000.00) (that is, including but not
in addition to the $100,000 provided above in this Section 13.28) or
(b) terminate this Agreement and receive the return of the Initial
Earnest Money Payment and the Earnest Money Deposit, together with all
other sums, if any, paid on account of this Agreement by Buyer to
unrelated third-parties, including, without limitation, all amounts
paid or incurred by Buyer, whether before or after the date of this
Agreement, in connection with its due diligence investigation of the
Property, and neither Seller nor Buyer will have any further liability
to or responsibility to the other hereunder other than as provided in
this Agreement to specifically survive termination of this Agreement;
but in no event will Seller be liable to Buyer for any other damages
(actual, consequential, speculative, punitive, or otherwise).
13.31. If at or before expiration of Buyer's Examination Period, Buyer
discovers any matter that would be a breach of a representation
contained in this Section 13, but for the fact that the representation
is limited to Seller's knowledge (excluding by reason of changed
circumstances which is not a result of a knowing and material breach
of any representation of Seller under this Section 13), then Buyer
will have the following options only: (a) to waive such requirement
and proceed with Closing or (b) terminate this Agreement and receive
the return of the Initial Earnest Money Payment and the Earnest Money
Deposit and neither Seller nor Buyer will have any further liability
to or responsibility to the other hereunder other than as provided in
this Agreement to specifically survive termination of this Agreement.
13.32. Seller does hereby agree to indemnify and hold Buyer harmless from
any liability to
<PAGE>
or claims by unrelated third-parties arising out of the existence of
any Hazardous Substances on the Property prior to Closing; and Buyer
does hereby agree to indemnify and hold Seller harmless from any
liability to or claims by any unrelated third-parties arising out of
the existence of any Hazardous Substances on the Property from and
after Closing which did not exist on the Property prior to Closing.
13.33. For purposes of any claim made against Seller by Buyer after Closing
for breach of Seller's representations and warranties, the
representations and warranties of Seller in this Section 13 are
qualified by any information with respect to which Buyer has current
actual knowledge at the Closing.
13.34. Notwithstanding anything in this Agreement to the contrary, the
representations and warranties under this Section 13 shall survive
Closing, but not beyond 12:00 p.m. (noon) CST on the 31st day of
December, 1998 (the "Claim Period"), and any such claim shall be
asserted by specific written notice from Buyer to Seller, setting out
the specific nature of such claim, which notice must be delivered to
Seller prior to the expiration of the Claim Period. Any claim for any
breach of any representation or warranty under this Section 13 shall
be limited to a claim for actual out-of-pocket damages incurred by
Buyer, and not for punitive, speculative, consequential or other
damages.
14. Buyer's Representations. Buyer represents and warrants to Seller that:
14.1.Organization and Existence. Buyer is a corporation, duly organized,
validly existing and in good standing under the laws of state of its
formation and prior to Closing will be properly qualified to do
business in the State of Texas and has all requisite power to enter
into and perform under the terms of this Agreement without any
qualification whatsoever.
14.2.Authority. The execution, delivery and performance by Buyer of this
Agreement has been duly authorized by directors or partners, as the
case may be, and no further action is necessary on the part of Buyer
to make this Agreement valid, binding and enforceable. Neither the
execution, delivery nor performance by Buyer of this Agreement will
conflict with or result in a violation of breach of any term or
provision of nor constitute a default under any of the organizational
or trust documents of Buyer.
14.3.Experienced Investor. Buyer has, to its satisfaction, examined the
general real property and market conditions in San Antonio, Bexar
County, Texas. Buyer is able to evaluate an investment in property in
San Antonio, Texas.
14.4.Litigation. There are no material claims, actions, suits, proceedings
or investigations pending, or to the current actual knowledge of
officers and directors or Buyer, threatened against Buyer which could
reasonably be expected to materially impair the ability of Buyer to
fulfill and perform its obligations under this Agreement.
<PAGE>
14.5.Buyer's Examination Period. Buyer agrees and represents to Seller
that Buyer will conduct the Property Inspection and that the Buyer's
Examination Period is adequate for Buyer to conduct the Property
Inspection. Buyer represent and warrants that in making Buyer's
decision to purchase the Property, Buyer has relied solely upon and
shall rely solely upon the opinion and judgment of Buyer and Buyer's
experts; and that Buyer has not relied, and is not relying upon any
representations of Seller or any of Seller's agents or employees as to
the quality, nature, adequacy or condition of the Property for Buyer's
intended use or any other use, except as to those representations and
warranties of Seller provided in Section 13 of this Agreement and the
limited representations as to title provided by Seller in this
Agreement.
14.6.The representations and warranties provided by Buyer in this Section
14 shall survive Closing. Notwithstanding anything in this Agreement
to the contrary, the representations and warranties under Section
14.1, 14.2 and 14.4 shall survive Closing, but not beyond 12:00 p.m.
(noon) CST on the 31st day of December, 1998 (the "Claim Period"), and
any such claim shall be asserted by specific written notice from
Seller to Buyer, setting out the specific nature of such claim, which
notice must be delivered to Buyer prior to the expiration of the Claim
Period. Any claim for any breach of any representation or warranty
under this Section 14 shall be limited to a claim for actual
out-of-pocket damages incurred by Seller, and not for punitive,
speculative, consequential or other damages.
15. Closing. The purchase and sale of the property herein described shall be
closed on Wednesday, December 17, 1997, in the offices of Davis, Adami &
Cedillo, Inc., 200 Concord Plaza, Suite 400, San Antonio, Texas, attorneys
for Seller (the "Closing" or "Closing Date"). Upon Closing, Seller, at
Seller's expense, shall deliver to Buyer or the Title Company, as the case
may be:
15.1.A Special Warranty Deed conveying good and indefeasible title in fee
simple to the Property, free and clear of any and all liens,
encumbrances, easements, assessments, restrictions, and other
conditions except for the following:
15.1.1. Taxes for the year of Closing and subsequent years not yet due
and payable.
15.1.2. The Permitted Exceptions.
15.1.3. The Deed shall contain the following provision: "By the
acceptance of this Deed, Grantee does hereby acknowledge that:
except for the warranties of title provided in this Special
Warranty Deed and except for the representations and warranties
of Grantor provided in Section 13 of that one certain Purchase
and Sale Agreement with an Effective Date of [DATE] wherein
Grantor is Seller and Grantee is Buyer for the Property (which
representations and warranties expire December 31, 1998), Grantee
takes the property in "AS IS" condition; Grantor has not made and
does not make any representations as to the physical condition,
layout, footage, expenses, zoning,
<PAGE>
operation or any other matter affecting or related to the
Property; and Grantor makes no other warranties, express or
implied, of merchantability, marketability, fitness or
suitability for a particular purpose or otherwise except as set
forth and limited herein. Any implied warranties are expressly
disclaimed and excluded."
15.2.Title Policy. A form TLTA Owner's Title Policy of Insurance issued in
the face amount of the Purchase Price insuring legal, equitable and
indefeasible fee simple title to the Property, free and clear of all
restrictions, encumbrances, easements, and other matters of record,
except for the Permitted Exceptions, and all taxes for the year of
Closing and subsequent years.
15.3.Leases. Executed original counterparts of the Leases and Lease
Guaranties, as well as an assignment and assumption of each lease, in
form to be agreed upon by Seller and Buyer prior to expiration of
Buyer's Examination Period (the "Assignment and Assumption of
Leases").
15.4.Bill of Sale and Assignment. A Bill of Sale and Assignment in the
form to be agreed upon by Seller and Buyer prior to expiration of
Buyer's Examination Period, conveying the Accessories, the Project
Plans, the Permits, Contracts (which Buyer agrees to assume in
accordance with this Agreement), the Contract Deposits, the Security
Deposit Escrow, General Intangibles and the Personal Property, and all
other personal property transferred hereunder and, except for the
representations otherwise provided herein, in an "As Is" condition
duly executed by and without recourse to Seller together with an
indemnity by Seller in favor of Buyer from and against any and all
claims, liabilities, damages and expenses (including reasonable
attorneys' fees) arising from any misapplication of the Security
Deposits prior to the Closing.
15.5.Non-Foreign Affidavit. An Affidavit of Seller certifying that Seller
is not a "foreign person" as defined in the Federal Foreign Investment
and Real Property Tax Act of 1980, and the 1984 Tax Reform Act, as
amended.
15.6.Warranties. The originals of all warranties from third parties
regarding the Property in the possession of Seller, without recourse
to Seller.
15.7.Evidence of Authority. (i) Copy of Seller's resolutions, certified as
true and complete as of the Closing date, authorizing Seller's selling
the Property pursuant to this Agreement, and evidencing the authority
of the person signing this Agreement and any documents to be executed
by Seller at Closing, (ii) Incumbency Certificate for each joint
venture partner of Seller, and (iii) good standing certificate for
each joint venture partner of Seller, issued by the State of Texas
dated within thirty (30) days of the Closing Date..
15.8.Estoppel Certificate. Estoppel Certificates as specified in Section
11.4 dated no earlier than forty-five (45) days prior to Closing which
have been executed by the respective
<PAGE>
Tenant, to the extent Seller is able to obtain the same.
15.9. Plans and Specification. Complete sets of "to be built" plans and
specifications for the Improvements, if available.
15.10. Certification of Representations and Warranties. A certificate of
the Seller dated as of the Closing Date certifying that all of
Seller's representations and warranties set forth in this Agreement
remain true as of the Closing Date, or if not, specifying the respect
in which any such representation or warranty is no longer true, dated
as of the Closing Date and represented and certified by the Seller to
be true and correct in all material respects.
15.11. Tenant Notice. Notices to Tenant in the form to be provided by Buyer
and incorporated herein by reference, advising Tenants of the sale of
the Property to Buyer and directing that rents and other payments
thereafter be sent to Buyer or as Buyer may direct.
15.12. Contracts. A letter from Seller to the other party under each of the
Contracts assumed by Buyer, in form and substance reasonably
satisfactory to Buyer, notifying such other party of the change in
ownership of the Property and the assignment by Seller to Buyer of
such Contract; and evidence that Seller has terminated any management
agreement covering the Property and provided notice of termination or
otherwise terminated all Contracts that Buyer has not specifically
agreed to assume.
15.13. Project Rent Roll. A schedule showing any variations, as of the
Closing Date, in the Project Rent Roll, certified by Seller as
provided in Section 9.5, above.
15.14. UCC Search. A UCC search dated within five (5) days business days of
Closing, showing no security interests with respect to any of the
Property, other than as reflected in the Permitted Exceptions.
15.15. Other Documents. Such other documents and instruments as are
reasonably required by the Title Company in connection with the
issuance of its title insurance policy to Buyer or deemed necessary or
desirable by Buyer or its attorneys in order to effectuate the
transactions set forth in this Agreement, so long as any such document
or instrument will not, of itself, increase the cost to or liability
of Seller with respect to this Agreement and its performance
hereunder..
16. Buyer's Obligations at Closing. At the Closing, Buyer shall deliver to the
Title Company or to Seller, as the case may be, the following:
16.1. Purchase Price. The Purchase Price, adjusted by prorations as
provided for herein, by wire transfer of immediately available funds.
16.2. Evidence of Authority. Copy of Buyer's resolutions, certified as true
and complete
<PAGE>
as of the Closing date, authorizing Buyer's acquisition of the
Property pursuant to this Agreement, and evidencing the authority of
the person signing this Agreement and any documents to be executed by
Buyer at Closing.
16.3. Assignment and Assumption of Leases. The Assignment and Assumption of
Leases evidencing the assumption of the obligation of Landlord under
the Leases.
16.4. Other Documents. Such other documents and instruments as are
reasonably required by the Title Company in connection with the
issuance of its title insurance policy to Buyer.
17. Proration.
17.1.The following shall be apportioned between Seller and Buyer at the
Closing as of midnight of the day preceding the Closing Date:
17.1.1. Prepaid rents and Additional Rents and other amounts payable by
Tenants, if, as and when received.
17.1.2. Real estate taxes, water charges, sewer rents and vault
charges, if any, on the basis of the fiscal years, respectively,
for which same have been assessed.
17.1.3. Charges and payments under transferable Contracts or permitted
renewals or replacements thereof, if assigned and assumed by
Buyer at the Closing.
17.1.4. Utilities, including, without limitation, water, steam,
electricity and gas, on the basis of (1) an actual reading done
on or immediately prior to the Closing Date or (2) the most
recent bills therefor. Notwithstanding the foregoing, the parties
shall endeavor to have the account name on each of the foregoing
utilities changed from Seller to Buyer as of the Closing Date, it
being understood that under no circumstances shall Buyer have any
liability for any such utility charges relating to any period
prior to the Closing Date, nor shall Seller have any liability
for any such utility charges from and after the Closing Date.
Buyer shall have no obligation or liability whatsoever with
regard to any security deposit of Seller maintained by any
utility company with regard to the Property.
17.2.If the Closing shall occur before a new real estate tax rate is
fixed, the apportionment of real estate taxes at the Closing shall be
upon the basis of the old tax rate for the preceding fiscal year
applied to the latest assessed valuation. Promptly after the new tax
rate is fixed, the apportionment of real estate taxes shall be
recomputed and any discrepancy resulting from such recomputation and
any errors or omissions in computing apportionments at Closing shall
be promptly corrected and the proper party reimbursed.
17.3. If, on the Closing Date, any Tenant is in arrears in the payment of
rent or has not paid
<PAGE>
the rent payable by it for the month in which the Closing occurs
(whether or not it is in arrears for such month on the Closing Date),
any rents received by Buyer or Seller from such tenant after the
Closing shall be applied to amounts due and payable by such Tenant
during the following periods in the following order of priority: (A)
first to any month or months following the month in which the Closing
occurred, (B) second, to the month in which the Closing occurred, and
(C) third, to any month or months preceding the month in which the
Closing occurred. If rents or any portion thereof received by Seller
or Buyer after the Closing are due and payable to the other party by
reason of this allocation, the appropriate sum, less a proportionate
share of any reasonable attorneys' fees and costs and expenses
expended in connection with the collection thereof, shall be promptly
paid to the other party. After Closing, Seller will have no right to
sue any Tenant for delinquent rent for any Lease.
17.4.If any Tenants are required to pay percentage rent, escalation
charges for real estate taxes, parking charges, operating expenses and
maintenance escalation rents or charges, cost-of-living increases or
other charges of a similar nature ("Additional Rents") and any
Additional Rents are collected by Buyer, it shall promptly pay to
Seller it's proportionate share thereof, if and when the tenant paying
the same has made all payments of rent and Additional Rents then due
to Buyer pursuant to the tenant's Lease. If Seller has collected
estimates of Additional Rents in excess of a Tenant's proportionate
share allocable to the period prior to Closing, Buyer shall receive a
credit against the Purchase Price at Closing for any such excess.
17.5.Seller shall cooperate with Buyer in all respects in connection with
the collection of rents and Additional Rents, so long as Seller shall
incur no liability or significant expenses in doing so. In particular,
Seller shall for a period to not exceed thirty (30) days after
Closing, cooperate with Buyer in calculating Additional Rents and
billings therefor.
17.6. The provisions of this Section 17.2 through 17.5 shall survive the
Closing.
17.7.If any of the items subject to apportionment under the foregoing
provisions of this Section 17 cannot be apportioned at the Closing
because of the unavailability of the information necessary to compute
such apportionment, or if any errors or omissions in computing
apportionments at the Closing are discovered subsequent to the
Closing, then such item shall be reapportioned and such errors and
omissions corrected as soon as practicable after the Closing Date and
the proper party reimbursed, which obligation shall survive the
Closing for a period of one hundred eighty (180) days after the
Closing Date as hereinafter provided. Neither party hereto shall have
the right to require a recomputation of a Closing apportionment or a
correction of an error or omission in a Closing apportionment unless
within the aforestated one hundred eighty (180) day period one of the
parties hereto (i) has obtained the previously unavailable information
or has discovered the error or omission, (ii) has given notice thereof
to the other party, together with a copy of its
<PAGE>
good faith recomputation of the apportionment and copies of all
substantiating information used in such recomputation and (iii) such
recomputation or correction involves amounts which in the aggregate
exceed Five Thousand Dollars ($5,000). The failure of a party to
obtain any previously unavailable information or discover an error or
omission with respect to an item subject to apportionment hereunder
and to give notice thereof as provided above within one hundred eighty
(180) days after the Closing Date shall be deemed a waiver of its
right to cause a recomputation or a correction of an error or omission
with respect to such item after the Closing Date.
17.8.Buyer shall receive a credit on the Closing Date equal to all leasing
commissions due to leasing or other agents for the current remaining
term of each Lease (determined without regard to any unexercised
termination or cancellation right), discounted to present value using
reasonable discount rates. Buyer shall assume, in writing, the
obligation to pay any such leasing commissions due thereunder after
the Closing Date up to the amount of such credit (without discount).
Buyer shall promptly return to Seller any such commission (without
discount) that, due to later events, does not become due and payable.
At Closing, Buyer shall assume leasing commissions for renewals or
expansions under any Lease expressly identified in the Project Rent
Roll as a result of the exercise of such right after the Effective
Date of this Agreement. If by Closing Seller has not completed and
paid in full all tenant improvement expenses, tenant allowances,
moving expenses and other out-of-pocket costs which are the obligation
of Landlord under Leases ("TI Obligations"), other than for the
Athletic Club Tenant for which the provisions of Section 21.8 shall
apply, then such costs as reasonably agreed by Buyer and Seller shall
be withheld from the Purchase Price at Closing, placed in escrow with
the Title Company, and Buyer shall be responsible for completing and
paying such TI Obligations. Any funds held in the escrow shall be
released to Buyer without any requirement for the consent of Seller
and shall be used by Buyer to pay the Landlord's share of such tenant
improvement and allowances. If there are any funds remaining in escrow
after payment of such TI Obligations, such excess shall be paid to
Seller; but if the amount in escrow is insufficient for the purpose,
Seller shall reimburse Buyer for such deficiency on demand.
Notwithstanding the above, Buyer will be responsible for Commission
(not to exceed $11,616.00) and Leasehold Allowances (but not to exceed
$14,040.00) on the Fireman's Fund Lease Agreement.
18. Assessments. If, on the Closing Date, the Property or any part thereof
shall be affected by any assessment or assessments which are or may become
payable in installments, of which the first installment is now or at
Closing will be 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 on or after the Closing
Date shall be deemed to be due and payable and be liens upon the Property
and the payment thereof shall be paid and discharged by Seller upon the
Closing.
19. Closing Costs. Notwithstanding anything to the contrary contained herein,
the Closing Costs
<PAGE>
shall be paid as follows:
19.1. By Seller:
(a) Title insurance examination and premium; (b) Preparation of Special
Warranty Deed; (c) Revenue stamps or transfer tax, if any; (d) One-half
(1/2) the escrow fee, if any; (e) Brokerage fee as outlined in Section
26 herein; (f) The Survey; Seller's attorneys' fees; and Recording fees
with regard to releases of liens.
19.2. By Buyer:
(a) Preparation of Mortgage, Deed of Trust or other applicable
financing instruments; (b) Recording fees (except as provided in
Section 19.1(h), above); (c) One-half (1/2) the escrow fee, if any; (d)
Any additional engineering reports, environmental reports, appraisals,
or other
reports or studies required by Buyer;
(e) The survey deletion fee for Title Insurance purposes; and
(f) Buyer's attorneys' fees.
20. Default.
20.1.Default of Seller. In the event Seller is in default of its
obligations under this Agreement, Buyer, as its exclusive remedies,
shall be entitled to either (a) a refund of the full amount of the
Initial Earnest Money Payment and the Earnest Money Deposit together
with all other sums, if any, paid on account of this Agreement by
Buyer to unrelated third-parties, including, without limitation, all
amounts paid or incurred by Buyer, whether before or after the date of
this Agreement, in connection with its due diligence investigation of
the Property, or (b) enforce specific performance of this Agreement;
provided, however, that any such action for specific performance shall
be initiated by Buyer, if at all, within sixty (60) days after that
date on which the sale of the Property was scheduled to close
hereunder and, if such action is not initiated within such 60-day
period, then Buyer shall be deemed conclusively to have elected to
waive the right to initiate such action for specific performance, in
which event, Buyer's sole remedy shall be to terminate this Agreement
and receive a refund of the Initial Earnest Money Payment and the
Earnest Money Deposit together with all other sums, if any, paid on
account of this Agreement by Buyer to unrelated third-parties,
including, without limitation, all amounts paid or incurred by Buyer,
whether before or after the date of this Agreement, in connection with
its due diligence investigation of the Property; and provided,
further, Seller shall not be in default hereunder
<PAGE>
unless and until Buyer shall provide written notice to Seller of the
basis for any such default and Seller has failed to cure such matter
within ten (10) days of its receipt of such notice; provided, further,
Buyer may not enforce specific performance against Seller if Seller is
unable to deliver the Property subject only to the Permitted
Exceptions (e.g., a third party places a cloud on title to the
Property which Seller cannot remove prior to Closing). In no event
shall Seller be liable to Buyer for any other actual, punitive,
speculative, consequential or other damages, excepting only in the
case of the inability of Seller to deliver the Property subject only
to the Permitted Exceptions is due to a willful and bad faith overt
act of Seller. No delay or omission in the exercise of any right or
remedy accruing to Buyer upon any default of Seller under this
Agreement shall impair any such right or remedy or be construed as
waiver of such default or any default theretofore or thereafter
occurring. The waiver by Buyer of any condition or event of default
shall not be deemed to be a waiver of any other condition or of any
prior or subsequent event of default.
20.2.Default of Buyer. Except as provided below, in the event of a default
hereunder by Buyer or if Buyer shall otherwise fail to perform any of
Buyer's obligations hereunder Seller may terminate this Agreement by
notice to Buyer and may retain the Initial Earnest Money Payment and
the Earnest Money Deposit as liquidated damages and this shall be
Seller's sole remedy for the Buyer's breach of this Agreement and
neither party shall have any further rights, obligations or
liabilities hereunder, except as otherwise provided herein; however,
Buyer shall not be in default hereunder unless and until Seller shall
provide written notice to Buyer of the basis for any such default and
Buyer has failed to cure such matter within ten (10) days of its
receipt of such notice. Seller and Buyer agree that it is difficult to
determine, with any degree of certainty, the loss which Seller would
incur in the event of Buyer's failure to close the purchase of the
Property, and the parties have agreed that the amount of the Earnest
Money Deposit represents a reasonable estimate of such loss and is
intended as a liquidated damages provision. No delay or omission in
the exercise of any right or remedy accruing to Seller upon any
default of Buyer under this Agreement shall impair such right or
remedy or be construed as a waiver of such default or any default
theretofore or thereafter occurring. The waiver by Seller of any
condition or event of default shall not be deemed to be a waiver of
any other condition or of any prior or subsequent event of default.
21. Future Operations. From the date of this Agreement until the Closing or
earlier termination of this Agreement, Seller will:
21.1.Maintenance and Operation of Property. Keep, operate and maintain the
Property in substantially the same condition and manner as the
Property is now maintained and operated by Seller and perform all
obligations on the part of landlord to be performed under the Lease.
21.2. Litigation and Claims. Promptly advise Buyer of any actual or
threatened litigation,
<PAGE>
arbitration, administrative hearing or claim (of any material matter
or amount) concerning the Property for which Seller has current actual
knowledge, or if Seller determines that any representation or warranty
made by Seller in Section 13 hereof is incorrect in any material
manner or amount.
21.3. Insurance. Maintain (or cause the maintenance of) all liability,
property and casualty or other insurance which Seller currently has in
force with respect to the Property.
21.4.No Change in Title. Not enter into or acquiesce in the filing of any
easement, license, plat (or replat) or zoning charge affecting the
Property, except as provided in Section 21.9, below, without the prior
written consent of Buyer in its sole discretion.
21.5. No Encumbrance. Not transfer or encumber or permit any lien to be
placed against all or any portion of the Property.
21.6.No Sale. Neither Seller nor any of its affiliates shall negotiate,
discuss or enter into any agreement with any third party regarding the
transfer, sale or conveyance of all or any portion of the Property.
21.7.Leasing. (i) Not modify any existing Lease or enter into any new
Lease in any manner without the prior written consent of Buyer, and
Buyer will not unreasonably withhold or delay its consent for any
modification to any existing lease or for Seller to enter into any new
Lease which is with an individual or entity unrelated (directly or
indirectly) to Seller and/or its joint venture partners and which is
in the ordinary course of business of the Property consistent with
past business practices in the operation of the Property, and any such
consent will be deemed given if specific written objection is not
provided by Buyer to Seller within five (5) business days after Buyer
receives written notice of such amendment or new lease, with the
proposed lease amendment or new agreement attached to such notice; and
(ii) promptly deliver to Buyer a copy of any notice (including,
without limitation, a notice of default under any Lease, and promptly
cure any such default; provided, however, from and after expiration of
Buyer's Examination Period, Buyer may withhold its consent in its sole
discretion.
21.8.Athletic Club Renovations. Pursuant to the Lease for the Athletic
Club, the Athletic Club Tenant and Seller have entered into certain
agreements for refurbishment/renovations which are being made to the
Athletic Club, the cost of which are to be borne equally by Seller, as
Landlord, and such Tenant. At Closing, Seller will escrow with the
Title Company, under escrow instructions to be agreed upon between
Seller and Buyer during Buyer's Examination Period, any then remaining
obligation of Seller and Tenant for the costs of such improvements
plus any additional sums reasonably projected to complete such
refurbishment/renovations; however if the escrowed amount is
insufficient to complete such refurbishment/renovations, Seller will
remain liable for any deficiency. Seller will, until completion,
continue such improvements pursuant to such agreements with such
changes
<PAGE>
as Seller in its discretion shall deem appropriate, but Seller will
notify Buyer in writing of any material change in such planned
improvements, and any such material change after expiration of the
Buyer's Examination Period will require the prior written consent of
Buyer, which consent Buyer will not unreasonably withhold or delay,
and such consent will be deemed provided if written objection is not
provided by Buyer to Seller within five (5) business days after Seller
notifies Buyer in writing of the specific nature of the change
requested.
21.9.Described Easements. Seller is in the process of negotiating (i) an
easement to provide the owner of the tract contiguous to and south of
the Property (who is an affiliate of Seller) access to the utility
easements located within the entry drive of Concord Plaza so long as
any such access is at the sole cost of such owner and has no material
adverse effect on the capacity of any utilities provided to the
Property and (ii) acquisition of the parking area on the north side of
the Property, which is currently owned by an affiliate of Seller and
provided to Seller by easement. Both such transactions will be
completed at or before Closing at the expense of Seller. If the
transaction described in clause (ii) has not been completed at or
before Closing, Buyer may terminate this Agreement and receive a
return of the Initial Earnest Money Payment and the Earnest Money
Deposit, and neither party shall have any further liability to the
other hereunder other than the obligations which specifically survive
termination as provided in this Agreement.
21.10. Claims. Promptly deliver notice to Buyer of, and, if the same may
adversely affect the Buyer or the Property, defend at the Seller's
expense, all actions, suits, claims and other proceedings affecting
the Property, or the use, possession or occupancy thereof;
21.11. Condemnation. Promptly deliver notice to Buyer of any actual or
threatened condemnation of the Property or any portion thereof;
21.12. Permits. Maintain all Permits in full force and effect and promptly
deliver notice to Buyer of any intention of the Seller to seek any new
Permit;
21.13. Contracts. Maintain all Contracts in full force and effect, timely
make all payments and observe and perform all obligations to be paid,
observed or performed by the Seller thereunder, and promptly notify
the Buyer of any receipt or delivery of any notice (including any
notice of default) thereunder, and not modify, amend, renew, extend,
terminate or otherwise alter any Contracts nor enter into any new
maintenance service contracts or any other agreements affecting the
Property without the prior written consent of Buyer in each instance,
which consent will not be unreasonably withheld or delayed; provided,
however, Buyer may withhold its consent in its sole discretion for any
such Contract which cannot be terminable on thirty (30) days notice or
less.
21.14. Repairs. Provide all services, repairs and other work required to be
provided by the landlord under the Leases;
<PAGE>
21.15. Personal Property. Seller will not remove from the Property any
Personal Property (as defined in Section 1.8, above) of any material
value or which is material to the operations of the Property unless it
is replaced with a comparable item of equal quality and quantity as
existed as of the time of such removal; and
21.16. Security Deposits. Not apply any of the Security Deposits, whether
to a default of a Tenant or otherwise without the prior written
consent of Buyer which consent shall not be unreasonably withheld or
delayed.
22. Casualty. The risk of loss or damage to the Property by fire or other
casualty shall, until Closing, be borne by Seller. After Closing, the risk
of any loss or damage to the Property by fire or other casualty shall be
borne by Buyer. Seller shall promptly give Buyer written notice if all or
any portion of the Property is damaged or destroyed by fire or other
casualty and the extent thereof. For purposes of this Section 22, "Material
Casualty" shall be any casualty resulting in damage to the Property of
Twenty-Five Thousand and No/100 Dollars ($25,000.00) or more or any
casualty which can be the basis for any Tenant to terminate any Lease or
Leases which, individually or in the aggregate, is for more than five
thousand (5,000) square feet of net rentable area in each case as
reasonably estimated by Buyer. In the event of a Material Casualty, Buyer
may, by written notice to Seller within ten (10) days after receipt of
notice of the occurrence of such Material Casualty, elect to cancel this
Agreement. In the event either party shall so elect, the Initial Earnest
Money Payment and Earnest Money Deposit shall be returned to Buyer and,
upon such return of the Initial Earnest Money Payment and the Earnest Money
Deposit, both parties shall be relieved and released of and from any
further liability hereunder, except as otherwise provided in this
Agreement. In the event of a Material Casualty, if this Agreement is not so
cancelled by Buyer, or if there is a non-material casualty, this Agreement
shall not be affected, but Seller shall assign to Buyer all of Seller's
right, title and interest in any insurance proceeds and claims, and the
Purchase Price shall be reduced by the amount of any applicable insurance
policy deductible.
23. Disclaimer Regarding Representations and Warranties of Seller. EXCEPT FOR
THE WARRANTIES OF TITLE CONTAINED IN THE DEED AND THE LIMITED EXPRESS
WRITTEN REPRESENTATIONS AND WARRANTIES OF SELLER CONTAINED IN SECTION 13
HEREOF, BUYER ACCEPTS THE PROPERTY "AS IS" AND "WHERE IS", WITH ALL FAULTS,
AND BUYER AGREES THAT, EXCEPT AS EXPRESSLY PROVIDED HEREIN, NEITHER SELLER
NOR ANY OF SELLER'S EMPLOYEES, OFFICERS, DIRECTORS, REPRESENTATIVES OR
AGENTS (COLLECTIVELY THE "SELLER RELATED PARTIES") HAVE MADE OR GIVEN ANY
WARRANTIES, GUARANTEES, OR REPRESENTATIONS OF ANY KIND WHATSOEVER,
REGARDING ANY MATTER RELATING TO THIS AGREEMENT OR THE PROPERTY, WHETHER
ORAL OR WRITTEN, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, BUYER
AGREES THAT THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF HABITABILITY,
MERCHANTABILITY, SUITABILITY, OR FITNESS FOR A
<PAGE>
PARTICULAR PURPOSE AND THAT THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OR
REPRESENTATIONS REGARDING THE PRESENT OR FUTURE VALUE, PROFITABILITY,
PERFORMANCE OR PRODUCTIVITY OF THE PROPERTY, OR REGARDING THE PAST OR
PRESENT COMPLIANCE BY SELLER OF ENVIRONMENTAL LAWS.
24. Condemnation. If, prior to Closing, all or any portion of the Property is
condemned or taken by eminent domain by any authority (a "Condemnation"),
Seller shall promptly notify Buyer thereof, and Buyer may terminate this
Agreement by giving written notice thereof to Seller prior to the Closing
Date, in which event the Initial Earnest Money Payment and the Earnest
Money Deposit shall be returned to Buyer and, upon the return of such
Initial Earnest Money Payment and the Earnest Money Deposit, both parties
shall be relieved and released of and from any further liability hereunder,
except as otherwise provided in this Agreement. If Buyer does not elect to
terminate this Agreement as a result of a Condemnation, Seller shall pay to
Buyer, at Closing, all awards or other proceeds for such Condemnation
collected by Seller and assign and transfer to Buyer all of Seller's right,
title and interest in and to any claims for uncollected awards and other
proceeds for such Condemnation which Seller may be entitled to receive. At
Buyer's request, from and after the Closing, Seller shall cooperate with
Buyer in the settlement of any condemnation claims pursued by Buyer.
25. Notices. All notices and other communications required or permitted to be
given hereunder shall be in writing and shall be sent by either confirmed
receipt by facsimiles or mailed by certified and/or registered mail, return
receipt requested, postage prepaid, or personally delivered, or delivered
by a national overnight carrier, addressed or faxed as follows:
SELLER: The New Concord Plaza Joint Venture
Attn: Mr. William T. Ellis
200 Concord Plaza, Suite 303
San Antonio, Texas 78216
Phone: (210) 822-8600
Fax: (210) 822-1143
With Copy To: Mr. J. Russell Davis
Davis, Adami & Cedillo, Inc.
200 Concord Plaza, Suite 400
San Antonio, Texas 78216
Phone: (210) 822-6666
Fax: (210) 822-1151
<PAGE>
BUYER: Patriot American Acquisition Corp.
3030 LBJ Freeway, Suite 1500
Dallas, Texas 75234
Attn: Mr. Darryl E. Freling
Vice President-Acquisitions
Phone: (972) 888-8000
Fax: (972) 888-8029
With copy to: Mr. Roger Thomas
Cali Realty Corp.
11 Commerce Drive
Cranford, New Jersey 07016
Phone: (908) 272-8000
Fax: (908) 272-6755
With copy to: Jones, Day, Reavis & Pogue
2300 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201-2958
Attn: David J. Lowery, Esq.
Phone: (214) 220-3939
Fax: (214) 969-5100
or to such changed address or facsimile number as a party hereto shall
designate to the other party hereto from time to time in writing. Notices
shall be deemed delivered (i) if personally delivered or delivered by
overnight carrier, on the date of delivery or first business day thereafter
if delivered other than on a business day or after 5:00 p.m. CST to said
offices; (ii) if sent by certified mail, return receipt requested, on the
date shown on the receipt unless delivery is refused or delayed by the
addressee in which event they shall be deemed delivered on the date of
deposit in the U.S. Mail; or (iii) if sent by means of a facsimile
transmittal machine, at the time and on the date of receipt with receipt
thereof confirmed by telephonic acknowledgement or first business day
thereafter if receipt other than on a business day or after 5:00 p.m. CST.
26. Real Estate Commission. If, as and when this transaction closes, and the
full Purchase Price has been paid to Seller, then Seller will pay a
commission to Corporate Realty, Inc. arising out of the transaction
contemplated by this Agreement per a separate agreement between Seller and
Corporate Realty, Inc. (the "Broker"). Seller hereby indemnifies and holds
Buyer harmless from any and all real estate commissions, claims for such
commissions or similar fees on this transaction arising in any manner out
of any commitment or promise or agreement made by Seller. Buyer hereby
indemnifies and holds Seller harmless from any and all real estate
commissions, claims for such commissions or similar fees on this
transaction arising in any manner out of any commitment or promise or
agreement made by
<PAGE>
Buyer. In accordance with the terms of the Real Estate License Act of
Texas, Buyer is hereby advised by the Broker that Buyer should have the
abstract covering the Property examined by an attorney of Buyer's
selection, or be furnished with or obtain a policy of title insurance.
27. Information and Audit Cooperation. At Buyer's request, at any time before
Closing, and within one (1) year after Closing, Seller will provide to
Buyer's designated independent auditor access to those books and records of
the Property which are in Seller's possession and not provided to Buyer at
Closing, and Seller shall provide to such auditor a representation letter
regarding the books and records of the Property, in substantially the form
of Exhibit "A", attached hereto and incorporated herein by reference, in
connection with the normal course of auditing the Property in accordance
with generally accepted auditing standards.
28. Further Assurances. In addition to the acts and deeds recited herein and
contemplated to be performed, executed and/or delivered by either party at
Closing, each party agrees to perform, execute and deliver, on or after
Closing, any further actions or documents, and will obtain such consents,
as may reasonably necessary or as may be reasonably requested to fully
effectuate the purposes, terms and conditions of this Agreement, or to
further perfect the conveyance, transfer and assignments of the Property to
Buyer, so long as this will not in any material manner or amount increase
the cost to such party to perform hereunder or the financial obligations of
such party hereunder.
29. Assignment. At or prior to Closing, Buyer may assign its rights as buyer
hereunder to (i) any Affiliate of Buyer, or (ii) upon the prior written
consent of Seller in its sole discretion. Any assignee will be deemed to
have been provided all of the information provided to Buyer under this
Agreement.
30. Control of Adjacent Properties. Seller has advised Buyer that an Affiliate
of one of the joint venture partners of Seller owns the tracts immediately
to the north and south of the Project (herein the "Adjacent Properties").
Except as otherwise provided in Section 21.9, this Agreement shall not in
any manner be subject to any agreements which may or may not be made
between Buyer and the Owners of the Adjacent Properties and this Agreement
shall not result in any restrictions, directly or indirectly, with respect
to any other properties which may be owned by any joint venture partner of
Seller or their respective Affiliates.
31. Entire Agreement. This written Agreement constitutes the entire and
complete agreement between the parties hereto with respect to the Property.
It is expressly understood that there are no verbal understandings or
agreements which may change the terms, covenants and conditions herein set
forth, and that no modification of this Agreement and no waiver of any of
the terms and conditions shall be effective unless made in writing and duly
executed by the parties hereto.
<PAGE>
32. Binding Effect. All covenants, agreements, warranties and provisions of
this Agreement shall be binding upon and inure to the parties hereto
and their respective successors and assigns.
33. Current Actual Knowledge. Any representation or warranty limited herein
to "current actual knowledge" shall be deemed to mean the actual
knowledge of Seller, its joint venturers, their respective employees,
the property manager of the Property, and its employees, with no duty
for any independent inquiry with respect to the matters which are the
subject of such representation or warranty.
34. Affiliate. For purposes of this Agreement, an "Affiliate" is any person
which, directly or indirectly, controls, is controlled by, or is under
common control with, such person.
35. Indemnified Claim. Upon the occurrence of any expense or liability or
third-party claim for which indemnification is provided pursuant to this
Agreement (the "Indemnified Claim"), when the party to be indemnified (the
"Indemnified Party") has actual knowledge of such claim or facts reasonably
expected to lead to any such claim, it shall provide written notice (the
"Notice of Claim") to the party required to provide such indemnification
(the "Indemnifying Party"), setting out the nature of the Indemnified
Claim, including the facts which gave rise or are expected to give rise to
such claim. The Indemnifying Party shall have the right to control the
defense of such Claim, which it shall do at its expense with counsel
subject to the approval of the Indemnified Party, which approval will not
be unreasonably withheld or delayed; but the Indemnified Party shall have
the right to participate in the defense thereof and be represented, at its
own expense, by advisory counsel selected by it, and in such case the
counsel selected by the Indemnifying Party and responsible for the defense
of such claim shall consult with and cooperate with such advisory counsel
of the Indemnified Party. The Indemnifying Party shall provide to the
Indemnified Party, or its advisory counsel, if any, copies of all
third-party correspondence and pleadings pertaining to the resolution of
such claim, and will provide prior written notice to the Indemnified Party
of any resolution or settlement of any such claim, and the Indemnified
Party shall have the right to approve any such resolution or settlement
only if such resolution or settlement is likely to have a material adverse
effect upon the Indemnified Party (e.g., potential further liability to the
Indemnified Party which may not be covered by the Indemnifying Party), in
which case such approval is required but may not be unreasonably withheld
or delayed.
36. Attorneys' Fees. In the event of any litigation arising out of this
Agreement, the prevailing party shall be entitled to reasonable attorney's
fees and costs.
37. Controlling Law. This Agreement has been made and entered into under the
laws of the State of Texas, and said laws shall control the interpretation
thereof.
38. Counterparts. This Agreement may be executed in as many counterparts as may
be
<PAGE>
required and it shall be sufficient that the signature of each party appear
on one or more such counterparts. All counterparts shall collectively
constitute a singular agreement.
39. Seller's Escrow. At Closing, Seller will place in escrow Five Hundred
Thousand and No/100 Dollars ($500,000.00), with such escrow agent and on
such terms, as shall be agreed upon by Buyer and Seller during Buyer's
Examination Period, to secure Seller's obligations hereunder, which Escrow
shall terminate on the expiration of the Claim Period (as defined in
Section 13.34) unless a claim has been asserted by Buyer hereunder prior to
expiration of such Claim Period.
40. Bravo's Restaurant Lease. During Buyer's Examination Period, the lease for
Bravo's Restaurant will be renegotiated on terms acceptable to Seller,
Buyer and the Tenant hereunder, in each of their respective sole
discretion, or it will be terminated at Closing.
41. Management Office. During Buyer's Examination Period, Seller and Buyer will
endeavor to enter into a lease agreement for the Management Office at a
location and on terms and provision acceptable to Seller and Buyer, in each
of their sole discretion.
EXECUTED by Seller this 3rd day of November, 1997, in multiple
counterparts, each of which shall have the force and effect of an original.
EXECUTED by Buyer this 3rd day of November, 1997, in multiple
counterparts, each of which shall have the force and effect of an original.
SELLER:
THE NEW CONCORD PLAZA JOINT VENTURE
By: THE NEW PLAZA CORPORATION,
Managing Venturer
By:_______________________________________
William T. Ellis, Vice President
<PAGE>
BUYER:
CALI REALTY ACQUISITION CORP.
By:_____________________________________________
Its:_______________________________________
Receipt of this Purchase and Sale Agreement is acknowledged the _____
day of _________________, 1997.
CHICAGO TITLE INSURANCE COMPANY
By:_____________________________________________
Its:_______________________________________
Receipt of the Initial Earnest Money Payment in the amount of
$100,000.00 is hereby acknowledged this _____ day of _________________, 1997.
SELLER:
THE NEW CONCORD PLAZA JOINT VENTURE
By: THE NEW PLAZA CORPORATION,
Managing Venturer
By:_______________________________________
James H. Eddy, Jr., President
Receipt of the Earnest Money Deposit in the amount of $250,000.00 is
hereby acknowledged this _____ day of _________________, 1997.
CHICAGO TITLE INSURANCE COMPANY
By:_____________________________________________
Its:_______________________________________
<PAGE>
NOTICE TO TITLE COMPANY: Upon receipt, please deliver one fully
executed counterpart of this Agreement to each of J. Russell Davis, Davis, Adami
& Cedillo, Inc., 200 Concord Plaza, Suite 400, San Antonio, Texas 72816 with a
copy to David J. Lowery, Jones, Day, Reavis & Pogue, 2300 Trammell Crow Center,
2001 Ross Avenue, Dallas, Texas 75201-2958.
EXHIBIT NO. 10.129
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement") made this 23rd day
of January, 1998 between RMC Development Company, LLC, a limited liability
company organized under the laws of the State of New York, having an address c/o
Robert Martin Company, 100 Clearbrook Road, Elmsford, New York 10523 ("Seller")
and CALI STAMFORD REALTY ASSOCIATES L.P., a limited partnership organized under
the laws of the State of Connecticut, having an address c/o Mack-Cali Realty
Corporation, 11 Commerce Drive, Cranford, New Jersey 07016 ("Purchaser).
RECITALS
A. Seller is the owner of certain property more particularly described
below and located in Stamford, Connecticut.
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 City of Stamford, County of Fairfield, and State
of Connecticut, and being more particularly described on Schedule 1.1(a) (the
"Land"), and the improvements, if any, located on the Land (the "Improvements");
(b) all rights, privileges, grants and easements
appurtenant to Seller's interest in the Land and Improvements,
<PAGE>
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 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 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, if any, 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; and
(d) any approvals, permits and agreements,
including but not limited to environmental permits, subdivision approvals,
development agreements, site plans and approvals, relating to the development of
the Real Property (collectively, the "Intangible Property"); and
(e) 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.
The Real Property, the Leases, the Intangible Property and all
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 One
Million Three Hundred Thirteen Thousand ($1,313,000) Dollars (the "Purchase
Price"), payable on the Closing Date (as defined in Section 10) by the wiring of
federal funds to Seller, subject to adjustment as provided herein. At the
request of Seller given the business day prior to the Closing Date, Purchaser
agrees to provide to Seller bank or certified checks up to the amount due under
this Section 2.1 on account of sums due in order for Seller to perform its
obligations hereunder.
<PAGE>
3. Deleted prior to execution.
4. TITLE MATTERS TO WHICH THIS SALE IS SUBJECT.
4.1 The Property is to be contributed to Purchaser subject to
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 and more
particularly described in Schedule 4.1(c) annexed hereto and by this reference
made a part hereof;
(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, a groundwater classification exception area or well restriction
area affecting the Property; and
(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 does not
render title uninsurable at standard rates.
4.2 Purchaser shall cause any title company licensed to do
business in the State of Connecticut (the "Title Company") to prepare a title
insurance search and commitment for an owner's title insurance policy for the
Real Property (the "Title Commitments") 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 and other
<PAGE>
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
three (3%) percent of the Purchase Price in the aggregate. Seller, in its
discretion, may adjourn the Closing for up to sixty (60) days in order to
eliminate unacceptable defects, objections or exceptions. 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 such adjourned date for the Closing, Purchaser shall elect either
(w) to terminate this Agreement by notice given to the Seller, in which event
the provisions of Section 4.7 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 of the first issuance of the
Title Commitment for said Property.
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, with such ALTA endorsements as may be
available and as required by Purchaser, free and clear of all liens,
encumbrances and other matters, other than the Permitted Encumbrances (the
"Title Policy"). The Title Company shall provide affirmative insurance that any
(i) Permitted Encumbrances have not been violated, and that any future violation
thereof will not result in a forfeiture or reversion of title; (ii) Purchaser's
contemplated use of the Property will not violate the Permitted Encumbrances;
and (iii) the exception for taxes shall apply only to the current taxes not yet
due and payable. 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 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, and standard printed
policy and survey exceptions.
4.4 Any unpaid taxes, water charges, sewer rents and
assessments, together with the interest and penalties thereon to a date not less
than seven (7) business days following the Closing Date (in each case subject to
any applicable apportionment), and any mortgages and other liens created by
<PAGE>
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,
instruments in recordable form sufficient to discharge any such mortgages or
other liens which Seller is obligated to pay and discharge pursuant to the terms
of this Agreement.
4.5 If the Title Commitments disclose judgments, bankruptcies
or other returns against other persons having names the same as or similar to
that of 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.
4.6 Deleted prior to execution.
4.7 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.
4.8 Purchaser acknowledges that the property described as
Easement Area "2" on that certain map (filed November 29, 1983, SLR 11136)
described in the second recital of the Conservation Easement dated November 9,
1983 among Nabisco, Inc., the City of Stamford and the Environmental Protection
Board of the City of Stamford and recorded at Volume 2320, page 174 is being
conveyed to Purchaser, to be held by Purchaser as a nominee on behalf of Seller,
which nominee relationship is more particularly set forth in an agreement (the
"Nominee Agreement") to be executed by Seller and Purchaser at Closing, in a
form substantially in accordance with Section 26 of the Contribution and
Exchange Agreement between Robert Martin Company, LLC, Robert Martin-Eastview
North Company, L.P. and Cali Realty, L.P. and
<PAGE>
Cali Realty Corporation dated January 24, 1997.
5. REPRESENTATIONS AND WARRANTIES OF SELLER.
5.1 In order to induce Purchaser to perform as required
hereunder, Seller hereby warrants and represents the following:
(a) Seller is a duly organized and validly existing
limited liability company organized under the laws of the State of New York, is
duly authorized to transact business and is in good standing in the State of
Connecticut, has all requisite power and authority to execute and deliver this
Agreement and all other documents and instruments to be executed and delivered
by it hereunder, and to perform its obligations hereunder and under such other
documents and instruments in order to sell the Property in accordance with the
terms and conditions hereof. All necessary actions of the members of 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
taken.
(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.
(c) Annexed hereto as Schedule 5.1 (c) is a true,
complete and correct schedule of the only Lease for the Land. The Lease is a
valid and bona fide obligation of the landlord and to Seller's knowledge tenant
thereunder and is in full force and effect. No defaults exist thereunder and to
Seller's knowledge no condition exists which, with the passage of time or the
giving of notice or both, will become a default. The Lease constitutes the only
lease, tenancy or occupancy affecting the Real Property on the date hereof and
there are no agreements which confer upon
<PAGE>
any Tenant or any other person or entity any rights with respect to the
Property.
(d) There are no service contracts, union contracts,
employment agreements or other agreements affecting the Property or the
operation thereof.
(e) 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.
(f) 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 two (2) business days after receipt.
(g) Seller has provided Purchaser with all reports,
including without limitation, the Environmental Documents, in Seller's
possession or under its control related to the physical condition of the
Property.
(h) Seller has no knowledge of any notices, suits,
investigations or judgments relating to any violations of any laws, ordinances
or regulations (including without limitation, Environmental Laws [as defined in
Section 5.2(a)(ix)(D)] 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 to Seller's knowledge there
are no outstanding orders, judgments, injunctions, decrees, directives or writs
of any Governmental Authorities against or
<PAGE>
involving Seller or the Property.
(i) There are no employees working at or in
connection with the Property. There are no union agreements affecting the
Property as of the date hereof, nor shall any such agreements affect the
Property as of the Closing Date.
(j) The only obligation of Seller in the nature of a
leasing commission due with respect to the Lease is an undated agreement between
Colliers ABR, Inc. and Seller.
(k) 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.
(l) There are to Seller's knowledge no engineering or
institutional controls at the Real Property, designed to address the Discharge
of Contaminants or required by Environmental Laws or Governmental Authorities at
the Real Property, including without limitation any deed notice, declaration of
environmental restriction, groundwater classification exception area, well
restriction area or other notice or use limitations pursuant to Environmental
Laws.
(m) Seller has no knowledge that any part of the Real
Property has been designated as wetlands under the Federal Water Pollution
Control Act, 33 U.S.C. ss.1251 et seq., the Inland Wetlands and Watercourses
Act, Conn. Gen. Stat. Ann. ss.ss.22a-36 et seq. and the Tidal Wetlands Act,
Conn. Gen. Stat. Ann. ss.ss.22A-28 et. seq., or any applicable local law or
regulation promulgated pursuant to any of the foregoing.
(n) There are no aboveground or underground storage
tanks or vessels which contain any Contaminants at the Real Property regardless
of whether such tanks or vessels are regulated tanks or vessels or not.
(o) Seller does not own or operate any property which
any Governmental Authority has demanded in writing, addressed to and received by
Seller or any of its affiliates, counsel or agents, be cleaned up and which has
not been cleaned up.
<PAGE>
(p) 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, in order to make the
statements herein or therein not misleading or necessary in order to fully and
fairly provide the information required to be provided in any such document,
certificate, Schedule or Exhibit.
5.2 In addition to the provisions of Section 5.1, Seller
hereby warrants and represents the following with respect to environmental
matters:
Except as disclosed on Schedule 5.2(a):
(i) To Seller's knowledge, no Contaminants
have been Discharged which relate to the Real Property that would allow a
Governmental Authority to demand that a cleanup be undertaken.
(ii) To Seller's knowledge, no ss.104(e)
informational request has been received by Seller issued pursuant to CERCLA,
with respect to the Real Property.
(iii) To Seller's knowledge, all
pre-existing aboveground and underground storage tanks and vessels, if any, at
the Real Property have been removed and their contents disposed of in accordance
with and pursuant to all applicable Environmental Laws.
(iv) To Seller's knowledge, there is no
asbestos or asbestos containing material requiring remediation under
Environmental Laws on the Real Property.
(v) The transfer of the Property by Seller
to Purchaser is not subject to the Transfer Act.
(vi) To Seller's knowledge, Seller has all
material certificates, licenses and permits (the "Permits"), including, without
limitation, any environmental permits, required to operate the Real Property. To
Seller's knowledge, there is no violation of any Environmental Laws with respect
to any Permits, all Permits are in full force and effect, are transferable with
the Real Property without additional payment by Purchaser, and shall upon
Closing, be transferred to Purchaser by Seller.
(vii) The Real Property has not been used
during the period of Seller's ownership or, to the knowledge of Seller, been
previously used, as a solid waste facility or a solid waste disposal area,
including without limitation, a sanitary landfill facility, as defined in the
Connecticut Solid Waste Management Act, Conn. Gen. Stat. Ann. ss.22a-446d et
seq.
<PAGE>
(viii) Seller has not, and shall not
knowingly permit any person or entity to engage in any activity on the Real
Property in violation of Environmental Laws.
(ix) For purposes of this Agreement, the
following words shall have the respective meaning set forth below:
(A) "Contaminants" shall include,
without limitation, any regulated substance, toxic substance, hazardous
substance, hazardous waste, pollution, pollutant or contaminant, as defined or
referred to in the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
ss.6901 et seq.; the Comprehensive Environmental Response, Compensation and
Liability Act, as amended, 42 U.S.C. ss.9601 et seq. ("CERCLA"); the Water
Pollution and Control Act, 33 U.S.C. ss.1251 et seq.; together with any
amendments thereto, regulations promulgated thereunder and all substitutions
thereof, as well as words of similar purport or meaning referred to in any other
applicable federal, state, county or municipal environmental statute, ordinance,
rule or regulation, including, without limitation, asbestos, polychlorinated
biphenyls, urea formaldehyde and petroleum products and petroleum based
derivatives.
(B) "Discharge" shall mean the
releasing, spilling, leaking, leaching, disposing, pumping, pouring, emitting,
emptying, treating or dumping of Contaminants at, into, onto or from the
Property, regardless of whether the result of an intentional or unintentional
action or omission.
(C) "Environmental Documents" shall
mean all environmental documentation in the possession or under the control of
Seller concerning the Property, or its environs, including, without limitation,
all sampling plans, cleanup plans, preliminary assessment plans and reports,
site investigation plans and reports, remedial investigation plans and reports,
remedial action plans and reports, or the equivalent, sampling results, sampling
result reports, data, diagrams, charts, maps, analysis, conclusions, quality
assurance/quality control documentation, correspondence to or from any
Governmental Authority, submissions to any Governmental Authority and
directives, orders, approvals and disapprovals issued by any Governmental
Authority.
(D) "Environmental Laws" means each
and every applicable federal, state, county or municipal statute, ordinance,
rule, regulation, order, code, directive or requirement of any Governmental
Authority in any way related to Contaminants.
(E) "Transfer Act" shall mean the
Connecticut Transfer Act, Conn. Gen. Stat. Ann. ss. 22a-134 et seq., the
Regulations promulgated thereunder and any amending and successor legislation.
5.3 All representations and warranties made by Seller in this
Agreement shall
<PAGE>
survive the Closing Date for a period of one (1) year, and shall not be merged
in the delivery of the Deed. 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 breach, inaccuracy, incompleteness or nonfulfillment of the representations,
warranties, covenants and agreements of Seller contained in this Agreement. In
no event shall Seller's liability on account of a failure of a representation or
warranty exceed $250,000 in the aggregate, unless same is as a result of the
gross negligence or willful misconduct of Seller. In addition, Purchaser shall
not be entitled to make a claim against Seller from and after the closing if any
senior executive officer of Purchaser or its affiliates (other than Tim Jones or
Brad Berger) had actual knowledge of the matter which is the subject of the
failure of such representation or warranty.
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 in connection
with the transaction contemplated by this Agreement and that Purchaser was
represented by legal counsel in connection with this transaction.
6. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
6.1 In order to induce Seller 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
Connecticut, has all requisite power and authority to execute and deliver this
Agreement and all other documents and instruments to be executed and delivered
by it hereunder, and to perform its obligations hereunder and under such other
documents and instruments in order to purchase 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
<PAGE>
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 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 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, will not enter into any new leases with
respect to the Property, or renew or modify any Lease, or enter into any
agreement of any nature whatsoever with respect to the Property, without
Purchaser's prior written consent.
(c) 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; or
(ii) Cause or permit the Property, or any
interest therein, to be alienated, mortgaged, licensed, encumbered or otherwise
be transferred.
(d) 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.
(e) Up to and including the Closing Date, Seller
agrees to maintain
<PAGE>
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.
(f) 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 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. Notwithstanding
the foregoing, Seller shall not be obligated to cure any violations caused by
the actions of Purchaser, its employees and agents, and the employees and agents
of its affiliated companies.
(g) Seller shall:
(i) promptly notify Purchaser of, and
promptly deliver to Purchaser , a certified 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) contemporaneously with the signing 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.
7.3 Seller represents that there are no proceedings now
pending for a reduction in the assessed valuation of the Property and none shall
be commenced by Seller.
8. LEASING COMMISSIONS AND
TENANT IMPROVEMENT OBLIGATIONS.
8.1 The leasing commissions of $212,303.39 due on account of
the execution of the Lease as required under the leasing commission agreement
described in Section 5.1(j) shall be paid by Seller. The further leasing
commissions due on account of Tenant's option to lease Additional Premises (as
defined in the Lease) as required under such leasing commission agreement shall
be paid by Purchaser. The provisions of this Section shall survive the Closing,
and shall not be subject to any limitation on liabilities or obligations.
9. Deleted prior to execution
10. CLOSING.
<PAGE>
10.1 The consummation of the transactions contemplated
hereunder (the "Closing") shall take place at the offices of Pryor, Cashman,
Sherman & Flynn, 410 Park Avenue, New York, New York 10022 on or about January
16, 1998 (the "Closing Date").
10.2 On the Closing Date, Seller, at its sole cost and
expense, will deliver or cause to be delivered to Purchaser the following
documents:
(a) Bargain and sale deed (the "Deed") with covenants
in proper statutory form for recording so as to convey to Purchaser good and
marketable title to the Land, free and clear of all liens and encumbrances,
except the Permitted Encumbrances.
(b) The original Lease and all other documents
pertaining thereto.
(c) A letter notifying the Tenant 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) An executed and acknowledged Assignment and
Assumption of the Lease, in the form of Exhibit 10.2(e) annexed hereto.
(f) An executed and acknowledged Assignment of the
Intangible Property, if any.
(g) An affidavit, and such other document or
instruments required by the Title Company, executed by Seller certifying (i)
against any work done or supplies delivered to the Property which might be
grounds for a materialman's or mechanic's lien under or pursuant to the laws of
the State in which the Real Property is located, in form sufficient to enable
the Title Company to affirmatively insure Purchaser against any such lien, and
(ii) that the signatures on the Deed are sufficient to bind Seller and convey
the Property to Purchaser.
(h) Affidavits and other instruments, including but
not limited to all organizational documents of Seller 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.
(i) Deleted prior to execution
(j) A certificate indicating that the representations
and warranties of Seller made in this Agreement are true and correct in all
material respects as of the Closing Date, or if there have been any changes, a
description thereof.
<PAGE>
(k) 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 or
Improvements or any part thereof by reason of change of grade or closing of any
such street, road, highway or avenue, and (iii) for any taking in condemnation
or eminent domain of any part of the Land or Improvements.
(l) A certificate signed by an officer, manager or
member 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.
(m) All such transfer and other tax 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.
(n) A statement setting forth the Purchase Price with
all adjustments and prorations shown thereon.
(o) Evidence of compliance with the Transfer Act or
the affidavit described in Section 12.2(e).
(p) Such other documents as may be reasonably
required or appropriate to effectuate the consummation of the transactions
contemplated by this Agreement.
10.3 On the Closing Date, Purchaser, at its sole cost and
expense, will deliver or cause to be delivered to Seller the following
documents:
The balance of the Purchase Price, net of adjustments
and prorations.
(b) An executed and acknowledged Assignment and
Assumption of the Lease in the form of Exhibit 10.2 (e) annexed hereto.
(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.
<PAGE>
10.4 Seller shall pay all state or county documentary stamps
or transfer taxes and 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. Purchaser shall pay 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.
10.5 The Closing shall be consummated without compliance with
bulk sales laws. If by reason of any applicable bulk sales law, any claims are
asserted by creditors of Seller related to periods prior to the Closing, such
claims shall be the responsibility of Seller, and Seller shall indemnify, defend
and hold harmless Purchaser (and their respective directors, officers,
employees, affiliates, successors and assigns) from and against all losses or
liabilities, if any, based upon, arising out of or otherwise in respect of the
failure to comply with such bulk sales laws.
ADJUSTMENTS.
11.1 The following items with respect to the Property are to
be apportioned as of midnight on the date preceding the Closing:
(i) Real estate taxes due and payable for the
calendar 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.
11.2 Except as otherwise provided in this Agreement, the
adjustments shall be made in accordance with the customs in respect to title
closings in the State of New York.
11.3 Any errors in calculations or adjustments shall be
corrected or adjusted as soon as practicable after the Closing.
11.4 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 material 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 material 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 Real Property shall be in compliance with the
Transfer Act. Seller shall, at Seller's sole cost and expense, make all
submissions to, provide all information to and comply with all requirements of
the Connecticut Department of Environmental Protection or its successor. In the
event that the Real Property is not an establishment subject to the Transfer
Act, prior to the Closing, Seller shall, at its sole cost and expense, provide
to Purchaser an affidavit of an officer, member or manager of Seller stating
that the Real Property is not an establishment which is subject to the
provisions of the Transfer Act.
(f) There shall not be any sewer moratorium affecting
the Property.
13. ASSIGNMENT.
13.1 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. No assignment or direction of the closing instruments shall
relieve Purchaser from Purchaser's obligations under this Agreement.
14. BROKER.
14.1 Purchaser and Seller represent that they have not dealt
with any brokers, finders or salesmen, 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 through the other party. The provisions of
this Section shall survive the Closing or other termination of this Agreement.
15. Deleted prior to execution.
16. CONDEMNATION.
16.1 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, 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.
17.1 Purchaser shall have the right to make such public
announcements or filings with respect to the acquisition 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
<PAGE>
shall be entitled to make 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 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
18.1 In the event Purchaser fails to perform on the Closing
Date, Purchaser's sole liability and Seller's sole recourse shall be limited to
the amount of the Deposit. Seller agrees that retention of the Deposit
constitutes fixed and liquidated damages resulting from Purchaser's default, and
Seller waives any other claim, 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 4.7, 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 to terminate this Agreement
upon notice to Seller, in which event neither party shall thereafter have any
further obligations under this Agreement; to commence an action against Seller
seeking specific performance of Seller's obligations under this Agreement; to
pursue all of its remedies at law or in equity; or 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
<PAGE>
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.
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 with all transmittal fees prepaid,
properly addressed, and sent to the following addresses:
If to Purchaser: Cali Stamford Realty Associates L.P.
c/o Mack-Cali Realty Corporation
11 Commerce Drive
Cranford, New Jersey 07016
Attn: Roger W. Thomas, Esq.
(908) 272-8000 (tele.)
(908) 272-6755 (fax)
with a copy to: Andrew S. Levine, Esq.
Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
(212) 326-0414 (tele.)
(212) 326-0806 (fax)
If to Seller: RMC Development Company LLC
c/o Robert Martin Company
100 Clearbrook Road
Elmsford, New York 10523
Attn.: Martin S. Berger
(914) 592-4800 (tele.)
(914) 592-4836 (fax)
with a copy to: RMC Development Company LLC
c/o Robert Martin Company
100 Clearbrook Road
Elmsford, New York 10523
Attn.: Lloyd Roos, Esq.
(914) 592-4800 (tele.)
<PAGE>
(914) 592-4836 (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 overnight
delivery service as aforesaid shall be deemed received and effective on the
first business day following such dispatch. 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
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 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 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 State of New York 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.
<PAGE>
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.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
Seller:
RMC DEVELOPMENT COMPANY, LLC
By:
Name:
Title:
Purchaser:
CALI STAMFORD REALTY ASSOCIATES L.P.
BY: CALI SUB XII
By:
Name:
Title:
Exhibits
Exhibit 10.2(e) Assignment and Assumption of the Lease
<PAGE>
Schedules
Schedule 1.1(a) The Land
Schedule 4.1(c) Permitted Encumbrances
Schedule 5.1(c) Lease for the Land
Schedule 5.2(a) Exceptions to Environmental Representations
<PAGE>
Exhibit 10.2(e)
650 West Avenue
Stamford, CT
ASSIGNMENT AND ASSUMPTION OF THE LEASE
THIS ASSIGNMENT AND ASSUMPTION OF THE LEASE (this "Agreement")
is made as of January ___, 1998, by and between RMC DEVELOPMENT COMPANY, LLC
("Assignor"), a limited liability company organized under the laws of the State
of New York, having an address at 100 Clearbrook Road, Elmsford, New York 10523,
and CALI STAMFORD REALTY ASSOCIATES L.P., a limited partnership organized under
the laws of the State of Connecticut, its successors and assigns ("Assignee")
having an address at c/o Mack-Cali Realty Corporation, 11 Commerce Drive,
Cranford, New Jersey 07016.
W I T N E S S E T H:
WHEREAS, Assignor entered into that certain lease dated as of July 21,
1997, with Davidoff of Geneva (Ct), Inc. (the "Lease") affecting the property
commonly known as 650 West Avenue, Stamford, Connecticut (the "Property"),
further described in Exhibit A attached hereto;
WHEREAS, Assignor and Assignee entered into that certain Purchase and
Sale Agreement, dated January ___, 1998 (the "Sale Agreement");
WHEREAS, pursuant to the Sale Agreement, Assignor has agreed to assign
to Assignee all of the Assignor's right, title and interest in and to the Lease;
and
WHEREAS, Assignor desires to assign all of Assignor's right, title and
interest in and to the Lease to Assignee and Assignee desires to accept the
assignment of such right, title and interest in and to the Lease and assume all
of Assignor's rights thereunder.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein contained and for other good and valuable consideration the parties
hereto mutually agree as follows:
Assignor hereby assigns, transfers, sets over and conveys to Assignee,
its successors and assigns, all of Assignor's right, title and interest in and
to (i) the Lease and (ii) any and all guarantees, security deposits, letters of
credit, notes, instruments, and other tenant impounds
<PAGE>
relating thereto (collectively defined as the "Lease Security Deposits").
Assignee hereby accepts the Assignment and agrees to assume, fulfill, perform
and discharge all the various commitments, obligations and liabilities of
Assignor under and by virtue of the Lease, accruing or obligated to be performed
from and after the date hereof, including the return of security deposits,
letters of credit and other Tenant impounds in accordance with the terms of the
Lease.
Assignee hereby indemnifies and agrees to hold harmless Assignor from
and against any and all claims, liabilities, losses, damages, causes of action,
costs and expenses (including without limitation, court costs through all
appeals and reasonable attorneys' fees and disbursements) incurred in connection
with or arising under (i) the obligations of the landlord under the Lease from
and after the date hereof and (ii) the failure of Assignee to properly maintain
any of the Lease Security Deposits in accordance with terms of the Lease.
Assignor hereby indemnifies and agrees to hold harmless Assignee from
and against any and all claims, liabilities, losses, damages, causes of action,
costs and expenses (including, without limitation, court costs through all
appeals and reasonable attorneys' fees and disbursements incurred in connection
with claims arising with respect to (i) the obligations of the landlord under
the Lease which accrued prior to the date hereof; and (ii) the failure of
Assignor to deliver to Assignee the Lease Security Deposits.
This Agreement is made without representation, warranty (express or
implied) or recourse of any kind, except as provided herein or as set forth in
the Sale Agreement.
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. This Agreement shall
be governed by, and construed under, the laws of the State of New York.
IN WITNESS WHEREOF, Assignor and Assignee do hereby execute and deliver
this Agreement as of the date and year first above written.
ASSIGNOR:
RMC DEVELOPMENT COMPANY, LLC,
a New York limited liability company
By:
Name:
Title:
<PAGE>
ASSIGNEE:
CALI STAMFORD REALTY
ASSOCIATES L.P.,
a Connecticut limited partnership
By: Cali Sub XII, Inc.,
its general partner
By:
Name:
Title:
EXHIBIT NO. 10.130
AGREEMENT OF SALE
AGREEMENT made this day of January, 1998, by and between the persons
and entities named and having offices at the addresses set forth on Schedule "A"
attached hereto and made a part hereof (hereinafter individually called "Seller"
and collectively "Sellers"), and MACK-CALI REALTY, L.P. ("Cali Realty"), a
Delaware limited partnership and BURLINGTON COMMERCE REALTY ASSOCIATES L.P.
("Cali Sub"), a New Jersey limited partnership, both having an office at 11
Commerce Drive, Cranford, New Jersey 07016 (hereinafter collectively called
"Purchaser" or "Purchasers").
W I T N E S S E T H:
FOR AND IN CONSIDERATION of the mutual covenants hereinafter contained:
1. AGREEMENT TO SELL AND PURCHASE.
(a) Sellers hereby agree to sell and convey, and Purchaser
hereby agrees to purchase, subject to the conditions set forth herein, those
certain plots, pieces or parcels of land ("Lands"), together with all buildings
and improvements located thereon, and any appurtenances or hereditaments
appertaining thereto ("Improvements"), including 21 buildings containing
946,500+/- rentable square feet, located in the Townships of Burlington and
Moorestown, County of Burlington and the Township
<PAGE>
of West Deptford, County of Gloucester, State of New Jersey (hereinafter
referred to collectively as the "Premises"). The Lands and Improvements are
known and designated by address and by Block and Lot on the Townships' Tax Maps,
as set forth on Schedule "B", attached hereto and made a part hereof, and are
more particularly described on Schedule "C", attached hereto and made a part
hereof. Title to a particular Property (as hereinafter defined) shall be
conveyed to Cali Realty and/or Cali Sub, at Purchaser's election.
(b) This sale includes, for no additional consideration, all
of the right, title and interest, if any, of Sellers in and to the following:
(i) All fixtures, equipment and articles of
personal property owned by each Seller, attached to or used in the operation of
each Premises to the extent that they are located on the Premises on the date
hereof, which property is set forth on Schedule "D" attached hereto and made a
part hereof, and any replacements or substitutions therefor and additions
thereto ("Personal Property"), all trade names and fictitious names used by any
Seller(s) in connection with any Premises ("Names"), and all documents, records
and books of account relating to the construction, ownership, leasing,
operation, management, maintenance and/or financing of any Premises, which are
in the possession or control of any Seller ("Records"). All of said Personal
Property, Names and Records shall be included in the deeds of conveyance, Bills
of Sale and/or assignments to be
<PAGE>
delivered at Closing (as hereinafter defined), as Purchaser may
request;
(ii) Any land lying in the bed of any street, or
road open or proposed in front of, adjacent to, or adjoining any Premises, to
the center lines thereof, and any future award, if any, for damages to said
Premises by reason of change of grade of any street and all rights of way
appurtenances thereto ("Appurtenant Property"); and each applicable Seller shall
execute and deliver to Purchaser, at Closing or thereafter, on demand, all
proper instruments for the conveyance of such title and for the assignment and
collection of any such award;
(iii) Each Premises and its related Personal
Property, Records, Names and Appurtenant Property at times are referred to
herein as the "Property" and collectively as the "Properties".
2. PURCHASE PRICE.
(a) The aggregate purchase price to be paid by Purchaser to
all Sellers for the Properties is Fifty-Eight Million, Two Hundred Fifty
Thousand ($58,250,000.00) Dollars (herein called the "Purchase Price"), subject
to adjustments and prorations described herein. The cash portion of the Purchase
Price shall be payable by immediately available funds in accordance with wiring
instructions of Sellers.
(b) The Purchase Price shall be payable as follows:
(i) At Closing, the sum of Forty-One Million
Eighty-Eight Thousand Six Hundred and Two and 06/100
<PAGE>
($41,088,602.06) Dollars;
(ii) Title to the Properties shall be taken
subject to the lien of existing mortgages described in Schedule "F" ("Existing
Mortgage(s)") on which the current aggregate outstanding principal balance is
Seventeen Million, One Hundred Sixty-One Thousand Three Hundred Ninety-Seven and
94/100 ($17,161,397.94) Dollars; and
(iii) If on the Closing Date (as hereinafter
defined), the outstanding aggregate principal balances of the Existing Mortgages
shall be less than Seventeen Million, One Hundred Sixty-One Thousand Three
Hundred Ninety-Seven and 94/100 ($17,161,397.94) Dollars, the cash portion of
the Purchase Price shall be increased accordingly and Purchaser shall pay any
additional cash at Closing.
(c) The Purchase Price shall be allocated among the various
Properties in accordance with Schedule "E" attached hereto and made a part
hereof.
3. DEPOSIT.
(a) Upon the execution and delivery of this Agreement,
Purchaser shall deliver to Escrow Agent (as hereinafter defined in Paragraph
3.(b) hereof) an irrevocable letter of credit in substantially the form of the
letter of credit annexed hereto as Schedule "V" in the sum of Two Million
($2,000,000.00) Dollars (the "Letter of Credit").
(b) The Letter of Credit shall be deposited with Archer &
Greiner, Esqs., attorneys for Sellers ("Escrow Agent"),
<PAGE>
and shall be held by Escrow Agent in accordance with the provisions of Paragraph
26 hereof, subject to the following terms:
(i) At Closing, the Letter of Credit shall be
delivered to Purchaser;
(ii) If this Agreement is terminated by Purchaser
pursuant to the terms of Paragraphs 4(b), 5 or 13, the Letter of Credit shall be
delivered immediately to Purchaser, without application of Paragraph 26 hereof;
(iii) If this Agreement is terminated by
Purchaser for any other reason, including due to Seller's default, the Letter of
Credit shall be delivered to Purchaser, subject to the terms of Paragraph 26
hereof;
(iv) If this Agreement is terminated due to
Purchaser's default, the Letter of Credit shall be delivered to Seller as
liquidated damages pursuant to Paragraph 18 hereof, subject to the terms of
Paragraph 26 hereof.
4. MORTGAGE CONTINGENCY.
(a) This Agreement and all of Purchaser's obligations
hereunder are strictly contingent upon Sellers obtaining the written consent of
all mortgage holders ("Mortgagee(s)") of the Existing Mortgages and Purchaser
taking title to the Properties subject to the Existing Mortgages and without
recourse (except the Property encumbered by the mortgage held by First Union
National Bank ("First Union"), which, absent an agreement between Purchaser and
First Union to the contrary, shall be taken subject
<PAGE>
to recourse). A schedule setting forth each Existing Mortgage, the
identification of each Property encumbered thereby ("Mortgaged Premises"), the
name and address of each Mortgagee, the face amount, outstanding principal
balance, term, maturity date, interest rate and amount and frequency of periodic
payment and the date to which payment has been made of each Existing Mortgage is
attached hereto and made a part hereof as Schedule "F".
(b) In the event the aforesaid conditions shall not be
satisfied on or before Closing, Purchaser shall have the right to declare this
Agreement terminated and of no further force and effect, whereupon Escrow Agent
shall deliver to Purchaser the Letter of Credit. Notwithstanding the foregoing:
(i) if one or more Mortgagees do not consent to Purchaser taking title to a
Property or Properties subject to such Mortgagees' Existing Mortgages, and if
the portion of the Purchase Price allocated to the Properties encumbered by such
Existing Mortgages as set forth on Schedule "E" is less than ten (10%) percent
of the Purchase Price, then this Agreement shall be null and void with respect
to such Property or Properties, the Purchase Price shall be reduced accordingly
and the parties shall proceed to Closing hereunder with respect to all remaining
Properties; and (ii) if one or more Mortgagees do not consent to Purchaser
taking title to a Property or Properties subject to such Mortgagees' Existing
Mortgages, and if the portion of the Purchase Price allocated to the Properties
encumbered by such Existing Mortgages as set forth on Schedule
<PAGE>
"E" is ten (10%) percent or more of the Purchase Price, then Purchaser, in
addition to its rights set forth in clause (i) above, also shall have the right,
by notice to Seller, to terminate this Agreement. Notwithstanding the foregoing,
Seller shall have the right, by notice to Purchaser delivered within five (5)
days after the date Purchaser has elected to terminate this Agreement, to negate
Purchaser's termination by agreeing to pay all Existing Mortgages (including,
all premiums, penalties and fees) at the Closing.
(c) Sellers shall utilize their best efforts to obtain the
written consent of each Mortgagee to the following:
(i) The transfer of title of the Mortgaged
Premises to Purchaser, subject to the Existing Mortgage, without recourse
(except for the Existing Mortgage held by First Union), and the amount of all
fees and costs (including reasonable legal fees) to be paid to each Mortgagee
(including, brokers) in connection therewith ("Transfer Fees"); and
(ii) The pre-payment at or following Closing of
the balance of the Existing Mortgage, including the amount of all pre-payment
fees and penalties, if any, in connection therewith ("Pre-Payment Fees").
(d) Purchaser shall pay the first One Hundred Fifty Thousand
($150,000.00) Dollars on account of all Transfer Fees and Pre-Payment Fees;
Sellers shall pay all Transfer Fees and Pre-Payment Fees in excess of One
Hundred Fifty Thousand ($150,000.00) Dollars up to and including Two Hundred
Thousand
<PAGE>
($200,000.00) Dollars; and Purchaser shall pay all Transfer Fees and Pre-Payment
Fees in excess of Two Hundred Thousand ($200,000.00) Dollars.
(e) Purchaser shall have the sole and absolute right to
determine which Existing Mortgages shall be pre-paid at or following Closing and
shall pay all Pre-Payment Fees in connection therewith.
(f) To the extent that Purchaser elects to pre-pay any
Existing Mortgage at Closing, the Purchase Price shall not change and Purchaser
shall be required to increase the cash portion of the Purchase Price by an
amount equal to the then outstanding principal balance of such Existing Mortgage
(excluding, any prepayment premiums, penalties and fees), which additional cash
portion shall be paid to the applicable Mortgagee and shall not increase the
portion of the Purchase Price to be paid to Sellers.
(g) At Closing, each applicable Seller shall deliver to
Purchaser an estoppel certificate from its Mortgagee, dated not more than thirty
(30) days prior to Closing, in substantially the form attached hereto and made a
part hereof as Schedule "G" ("Mortgagee Certificate(s)"), which shall include as
to each Existing Mortgage, the following:
(i) the face amount of the mortgage;
(ii) the amount of the outstanding principal
balance;
(iii) the maturity date;
(iv) the interest rate;
<PAGE>
(v) the amount and frequency of periodic
payments;
(vi) the date to which payments have been made; (vii)
the existence of any event of default by
either mortgagor or Mortgagee and/or of any circumstance which with the passage
of time and/or which with the giving of notice would constitute an event of
default by either mortgagor or Mortgagee, if not cured;
(viii) the amount of any escrows held by
Mortgagee;
(ix) copies of any notices of default sent by
Mortgagee to the applicable Seller or received from the
applicable Seller; and
(x) copies of any notices sent by Mortgagee to
any tenant of the Mortgaged Premises or received from any such
tenant.
5. TITLE.
(a) Each Seller shall convey title to each Property which it
owns and Purchaser shall accept Marketable Title (as hereinafter defined),
subject only to the encumbrances set forth on Schedule "H" ("Permitted
Encumbrances"). Marketable Title shall mean that fee title to each of the
Properties is vested in the applicable Seller and shall be insured as such by a
title company selected by Purchaser (herein referred to as the "Title Company")
at standard rates, that all of the Improvements shall remain in their present
location; and that Purchaser shall not
<PAGE>
incur any damage, cost or expense resulting from any encroachment or overlap
affecting any of the Properties. Title Company shall certify that the applicable
Seller has the right, authority and power to enter into and to perform its
obligations hereunder. The legal description in the Binders (as hereinafter
defined) and in the Deeds (as hereinafter defined) shall be in accordance with
current surveys or existing surveys with accompanying survey affidavits from the
applicable Seller, satisfactory to Title Company and Purchaser.
(b) Purchaser, at its cost and expense, shall order title
insurance binders and current surveys for each Property (herein referred to as
the "Binders" and "Surveys" respectively) and prior to the expiration of the Due
Diligence Period shall deliver to Sellers' attorney notice of any objections to
title and/or the Surveys which are not Permitted Encumbrances. After the
execution hereof, no further liens, encumbrances, easements or restrictions
shall be created or filed ("Subsequent Encumbrances") on or with respect to any
of the Properties. Each Survey shall include the information set forth on
Schedule "I" attached hereto and made a part hereof and each Binder, at the
request of Purchaser, shall contain the following endorsements so that at
Closing, Title Company will issue Owner's Policies of Title Insurance (American
Land Title Association Owner's Policy - 1992, or equivalent, in Purchaser's sole
judgment), in the full amount of the allocated Purchase Price for each Property
(the "Title Policy" or "Title Policies"):
<PAGE>
(i) a zoning endorsement certifying that the
insured Property is not subject to any ordinance, regulation or restriction
which in any way would prohibit or restrict the construction, maintenance and/or
use of the insured Property for its present use;
(ii) an endorsement insuring contiguity between or
among all of the tracts or parcels of land comprising the insured
Property;
(iii) an endorsement deleting any coverage
exclusions with respect to creditor's rights; and
(iv) an endorsement affirmatively insuring access
to public streets, highway and roadways.
If any Binder discloses any exceptions, liens, encumbrances, defects or
objections other than the Permitted Encumbrances or if, after execution hereof,
a Subsequent Encumbrance shall be placed against any of the insured Property
(herein collectively called the "Title Defect(s)"), then Purchaser shall have
the right to: (i) require Sellers to use best efforts to cure any such Title
Defects provided that the cost to cure such Title Defects together with the
Costs of Compliance (as hereinafter defined) do not exceed the Environmental
Threshold (as hereinafter defined) (except that Sellers shall be obligated to
cure any Title Defects which can be removed solely by the payment of a sum of
money); (ii) attempt to cure any such Title Defect; (iii) accept such title as
Sellers shall be able to convey and proceed to Closing without reduction in the
Purchase Price; (iv)
<PAGE>
cause a title report and title insurance policy to be issued by another title
company without such Title Defect; (v) elect not to purchase such insured
Property and to proceed to purchase the remaining Properties, in which event,
the Purchase Price shall be reduced by an amount based on the allocation of the
Purchase Price set forth on Schedule "E", provided, however, if Seller gives
notice to Purchaser within five (5) days after Purchaser's election under this
subparagraph (v) that Seller intends to cure such Title Defects and thereafter
cures such Title Defects in accordance with the terms of this Agreement within
thirty (30) days after receipt of notice from Purchaser of its election under
this subparagraph (v), then such Property shall be included in the sale pursuant
to the terms of this Agreement; and/or (vi) if the portion of the Purchase Price
allocated to the Properties affected by Title Defects is ten (10%) percent or
more of the Purchase Price, declare this Agreement null and void, whereupon
Purchaser shall be entitled to the return of the Letter of Credit; provided,
however, if Seller gives notice to Purchaser within five (5) days after
Purchaser's election under this subparagraph (vi) that Seller intends to cure
such Title Defects and thereafter cures such Title Defects in accordance with
the terms of this Agreement within thirty (30) days after receipt of notice from
Purchaser of its election under this subparagraph (vi), then Purchaser's notice
of termination shall be deemed rescinded. The right of Purchaser to terminate
this Agreement may be exercised following the exercise of its other rights
<PAGE>
hereunder. The time of Closing shall be extended for a period of up to sixty
(60) days, if necessary, to permit Purchaser to pursue the exercise of its
rights hereunder.
(c) If at Closing there are liens or encumbrances against any
of the Properties other than Permitted Encumbrances, Sellers may use any portion
of the cash Purchase Price to satisfy same, provided Sellers, at Closing, either
shall: (1) deliver to Purchaser instruments in recordable form sufficient to
satisfy such liens or encumbrances of record, together with the cost of
recording or filing said instruments; or (2) deposit with Title Company
sufficient monies acceptable to Title Company to insure obtaining and recording
of such satisfactions and the issuance of a Title Policy for such Property to
Purchaser free and clear of any such liens or encumbrances, but only to the
extent that such liens or encumbrances are in favor of and held by institutional
lenders. The existence of any such liens or encumbrances shall not be deemed
objections or exceptions to title if Sellers shall comply with the foregoing
requirements.
(d) If a search of title discloses judgments, bankruptcies or
other returns against other persons or entities having names the same as or
similar to that of any Seller or any predecessor in title, such Seller, on
request, shall deliver to Title Company, an affidavit showing that such
judgments, bankruptcies or other returns are not against such Seller or such
predecessors in interest of such Seller.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS.
<PAGE>
(a) Sellers acknowledge that all representations and
warranties set forth in this Agreement presently are true and accurate and shall
remain true and accurate as of the Closing Date, it being acknowledged that
Purchaser is relying on all of said representations and warranties, and that
each of the representations and warranties set forth in this Agreement is of the
essence hereof, notwithstanding any investigation, review, examination or other
acts or conduct of Purchaser, its agents or representatives relating to or in
connection with, any representation or warranty contained in this Agreement. In
addition to any other representations, warranties and/or covenants contained in
this Agreement, Sellers make the following additional representations,
warranties and/or covenants:
(A) Schedule "A" sets forth the correct and full
name, address, form of entity and state of formation (if applicable) of each
Seller and each Seller is fee owner of the Premises set forth opposite its name,
subject only to the Permitted Encumbrances;
(B) Sellers have delivered to Purchaser true,
correct and complete copies of any applicable certificate of incorporation,
certificate of formation, certificate of limited partnership, trade name
certificate, Shareholders' Agreement, Operating Agreement, Limited Partnership
Agreement, Partnership Agreement, Trust Agreement, By-Laws and all other
governing documents of each Seller entity and each participant of each Seller
entity or participant (as applicable) (referred to herein
<PAGE>
singularly and collectively as "Organizational Document(s)");
(C) Each Seller is duly organized, validly
existing and in good standing in its state of formation and is in good standing
in New Jersey, has the right and authority to execute this Agreement and to
consummate this transaction in accordance with the provisions hereof and all
persons executing this Agreement and all other applicable documents on behalf of
each Seller have the right, power and authority to do so. Sellers shall provide
Purchaser true copies of their authority and appropriate resolutions ("Sellers'
Resolutions") ratifying Sellers' entering into this Agreement, and authorizing
Sellers' sale of the Properties to Purchaser in accordance with the terms of
this Agreement;
(D) Each Seller owns and shall convey to
Purchaser its fixtures, Personal Property, Names and Records, free and clear of
all liens and encumbrances, except for the Permitted Encumbrances;
(E) Schedule "F" sets forth the correct name and
address of each Mortgagee and all of the information set forth in Schedule "F"
is true, complete and accurate. No party to any Existing Mortgage is in breach
or default thereunder, and nothing has occurred which with the passage of time
and/or with the giving of notice could constitute a breach or default
thereunder. Sellers previously have delivered to Purchaser, or within ten (10)
days from the date hereof shall deliver to Purchaser, true and complete copies
of all Existing Mortgages, all notes or other
<PAGE>
evidence of indebtedness secured by each Existing Mortgage, all other collateral
delivered to each Mortgagee and all other documentation in connection therewith
("Loan Documents"). No Seller shall extend or modify any Loan Document(s) nor
request any Mortgagee to waive any of the terms thereof, without in each
instance, the prior consent of Purchaser;
(F) Sellers have no knowledge of and have not
received any notice(s) of, any violations of law, code, ordinances, rule,
regulation or requirements noted in or issued by any governmental department
having authority with respect to any of the Properties, except as otherwise
provided herein. Sellers shall deliver to Purchaser true copies of any such
notice(s) received after the date hereof, forthwith on receipt thereof, and each
such notice shall be complied with by Sellers, at their sole cost and expense,
prior to Closing, or as otherwise agreed upon between the parties;
(G) Schedule "J" annexed hereto and made a part
hereof contains a complete and accurate statement of all tenants who are
occupying space at each Property as of the date of this Agreement ("Tenant(s)"),
each of whom is in occupancy pursuant to a written lease agreement (referred to
herein collectively as "Leases" and individually as a "Lease"). As to each
Property, Schedule "J" contains: (i) the complete and accurate name of each
Tenant; (ii) the commencement date of each Lease; (iii) the termination date of
each Lease; (iv) the renewal, extension or other rights or options, if any, for
existing, additional and/or
<PAGE>
other space granted by each Lease, and whether said rights or options have been
exercised; (v) the current base rent being paid by each Tenant; (vi) the current
additional rent being paid by each Tenant (itemized); (vii) the date the last
base and additional rent were paid by each Tenant and the period covered by said
payment; (viii) the amount of the security deposit being held by the applicable
Seller, if any, for each Tenant and the amount of interest accrued thereon, if
interest is required to be paid to any Tenant; (ix) any future concession,
rebate, allowance, free rent period or other considerations; (x) any right of
each Tenant to purchase or acquire an ownership interest in all or any portion
of the Property; and (xi) any breach or default by landlord or Tenant in
accordance with the provisions of subparagraph (I) below. There are no tenants,
licensees, concessionaires or other occupants of any of the Properties except
for Tenants set forth on Schedule "J". At the Closing, Sellers will provide
Purchaser with an updated Schedule "J" and the terms "Tenant(s)" and "Lease(s)"
shall include those created after the date hereof, as applicable. At the
Closing, each Seller will assign to Purchaser, and Purchaser will assume from
each Seller, all of the applicable Seller's interest in the Leases and the
security deposits, by execution and delivery of the assignment and assumption of
leases ("Assignment and Assumption of Leases") in the form annexed hereto and
made a part hereof as Schedule "K". At the Closing, the parties agree to execute
letters notifying all Tenants of the sale of the
<PAGE>
Properties to Purchaser ("Tenant Notice") in the form annexed hereto and made a
part hereof as Schedule "L";
(H) True and complete copies of the Leases and
all amendments or modifications thereto have been given to
Purchaser for each Tenant listed on Schedule "J". There are no
amendments or modifications to the Leases which have not been
provided to Purchaser;
(I) The Leases are in full force and effect.
Neither the applicable Seller nor, except as set forth on Schedule "J", any
Tenant is in breach or default of its Lease obligations, and to the best of
Seller's knowledge, nothing has occurred which, with the passage of time and/or
with the giving of notice, might result in the applicable Seller or any Tenant
being in breach or default of its Lease obligations;
(J) All obligations of the applicable Seller
pursuant to the Leases with respect to performance of work or
installation of equipment in all respects have been completed;
(K) No Tenant is entitled to receive or has been
offered or given any free rent, rent concessions, rebates, allowances or other
considerations which would be effective for any period after the date of this
Agreement, except as set forth in the Leases listed on Schedule "J", and no
Tenant has made a claim for any of the foregoing, except as otherwise herein
provided;
(L) To the best of Seller's knowledge, there are
no claims, offsets or charges asserted by any Tenant against
<PAGE>
rent, security deposit or any other payment to be made by such
Tenant;
(M) No person or entity, other than the aforesaid
Tenants or any future tenant pursuant to a lease entered into in the ordinary
course of business in accordance herewith, has or shall have any right to use,
utilize or occupy any Property or any part thereof, either as a tenant or
otherwise;
(N) Sellers shall obtain and deliver to
Purchaser, on or before the Closing, a duly executed estoppel certificate
("Estoppel Certificate") in the form annexed hereto as Schedule "M" dated not
more than fifteen (15) days prior to Closing, from each Tenant occupying more
than six thousand (6,000) square feet of space within any Property and from
seventy-five (75%) percent of the remaining Tenants of each Property;
(O) From and after the date of this Agreement,
without Purchaser's prior consent, which consent shall not be unreasonably
withheld or delayed, no Seller shall: (i) accept prepayment of rent more than
one month in advance from any Tenant; (ii) grant any free rent, rent concession,
rebate, allowance or other consideration; (iii) modify or amend any Leases; (iv)
accept the surrender of any Leases (except for such Leases as may terminate
pursuant to their present terms); or (v) enter into any new leases or other
occupancy, license or concession arrangements with Tenants or any other person
or entity for the use of any portion of the Property;
<PAGE>
(P) Except as otherwise provided herein in
Schedule "N" annexed hereto, there are no brokerage commissions or other fees
due in connection with the rental of any space at any of the Properties, there
will be no obligation for such commissions or fees due at the Closing, and there
will be no obligations for such commissions or fees due after the Closing,
including, without limitation, any obligation to pay commissions or fees in
connection with the renewal or extension of the term of any Leases. All
brokerage commissions in connection with the leasing of any space in any of the
Properties, whether due prior to Closing or thereafter, on account of the
continued occupancy by any Tenant for the lease term in effect at Closing, shall
be paid by Sellers at Closing or allowed as a credit against the Purchase Price
by Sellers at Closing. All brokerage commissions in connection with the leasing
of any space in any of the Properties on account of any unexercised renewal,
extension or taking of other space at the time of Closing shall be paid by
Purchaser. Each party shall indemnify, defend and hold the other harmless from
and against any and all costs and liabilities incurred by such party as a result
of the falsity of the aforesaid representation or the breach of the aforesaid
obligation;
(Q) Schedule "X" annexed hereto and made a part
hereof sets forth a list of all Certificates of Occupancy
relating to the Properties which are in the possession or control
of Sellers. All such Certificates of Occupancy have been
<PAGE>
delivered to Purchaser or shall be delivered to Purchaser within ten (10) days
from the date hereof. At Closing, each Seller shall deliver to Purchaser an
assignment (to the extent lawfully assignable) of all of its right, title and
interest in: (i) any existing Certificate of the Board of Fire Underwriters
covering each Property; (ii) any permits or licenses it may have pertaining to
each Property; (iii) all available site and building plans and specifications
relating to each Property; and (iv) all available Certificates of Occupancy;
(R) All existing guarantees and warranties which
each Seller has received from contractors, subcontractors, manufacturers,
materialmen, distributors, sellers or others, regarding all or any portion of
the Property ("Guarantees") are set forth on Schedule "O" attached hereto and
made a part hereof. At Closing, each Seller shall assign to Purchaser all of its
right, title and interest in and to all Guarantees;
(S) All service, maintenance, vending,
concession, license, agency or other agreements affecting the Property or the
operation thereof ("Contract(s)") will be in force at the Closing and a true and
complete list of all Contracts are set forth on Schedule "P" annexed hereto and
made a part hereof. True copies of all Contracts have been delivered to
Purchaser or shall be delivered to Purchaser within ten (10) days of the date
hereof. Any or all such Contracts, upon Purchaser's request, shall be assigned
by the applicable Seller to Purchaser at Closing and all Contracts are
cancelable on not more than
<PAGE>
thirty (30) days' notice. On request of Purchaser, Sellers shall cancel any or
all of such Contracts as of the Closing Date. Between the date hereof and the
Closing, no Seller shall renew, extend, modify or terminate any of said
Contracts or enter into any other contract and/or agreement affecting the
Property or the operation thereof without the consent of Purchaser in each
instance first being obtained. No party to any Contract is in breach or default
thereunder, and to Seller's knowledge, nothing has occurred which with the
passage of time and/or with the giving of notice could constitute a breach or
default thereunder;
(T) There are no, and at the time of Closing
there shall not be any, employment, collective bargaining or union agreements
affecting the Properties or the operation thereof or any deferred income or
retirement plans in effect;
(U) There are no actions, suits, labor disputes,
litigation or proceedings ("Action(s)") pending or, to the knowledge of Sellers,
threatened against or affecting any Seller or any of the Properties, the
environmental condition thereof or the operation thereof at law or in equity or
before any federal, state, municipal or governmental department, commission,
board, bureau, agency or instrumentality, nor do Sellers have knowledge of any
basis for any such Action, which, if determined adversely to any Seller, in any
way would affect the Property or the operation thereof other than as set forth
on Schedule "R" annexed hereto and made a part hereof. None of the Actions
listed on Schedule "R" nor any subsequent Actions will be settled, either
<PAGE>
prior to or after Closing, without Purchaser's consent, nor will any Seller take
any material actions in connection therewith without first notifying Purchaser;
(V) None of Sellers has nor prior to Closing
shall: make a general assignment for the benefit of creditors; file a voluntary
petition in bankruptcy; be by any court adjudicated a bankrupt; take the benefit
of any insolvency act; be dissolved or liquidated, voluntarily or involuntarily;
or have a receiver or trustee appointed in any proceedings;
(W) Sellers have no knowledge and have received
no notice of any application for any zoning change or pending
zoning ordinance or amendment, which would affect any of the
Properties;
(X) The execution, delivery and performance of
this Agreement in accordance with its terms does not violate any contract,
agreement, commitment, order, judgment, decree, law, regulation or ordinance to
which any Seller is a party or by which any Seller is bound or as to which any
of its assets is subject;
(Y) No Seller has entered into any commitment or
any agreement or understanding with any municipality, county, state or federal
government agency or authority which would require the installation of any
improvements or the incurring of any cost or expense affecting any of the
Properties or otherwise;
(Z) Each Seller presently maintains and shall
continue to maintain until Closing policies of insurance in
<PAGE>
accordance with Schedule "S" attached hereto and made a part
hereof;
(AA) No Seller has any knowledge of any Federal,
State or local plans to change the highway or road system in the vicinity of any
of the Properties or to restrict or change access from any such highway or road
to any of the Properties or of any pending or threatened condemnation of any of
the Properties or any part thereof or of any plans for improvements which might
result in a special assessment against any of the Properties;
(BB) No services, material or work have been
supplied by any Seller's contractors, subcontractors or materialmen with respect
to any of the Properties for which payment has not been made in full. If,
subsequent to the Closing Date, any mechanic's or other lien, charge or order
for the payment of money shall be filed against any of the Properties or against
Purchaser or Purchaser's assigns, based upon any act or omission, or alleged act
or omission before or after the Closing Date, of any Seller, its agents,
servants or employees, or any contractor, subcontractor or materialmen connected
with the construction and completion by any Seller of improvements at any of the
Properties, or repairs made to any of the Properties by or on behalf of any
Seller (whether or not such lien, charge or order shall be valid or enforceable
as such), within ten (10) days after notice to Sellers of the filing thereof,
Sellers shall take such action, by bonding, deposit, payment or otherwise, as
will remove or satisfy such lien of record against such Property;
<PAGE>
(CC) Each Seller has provided Purchaser with all
reports and documents set forth on Schedule "Q", which are all of the
Environmental Documents (as defined in Paragraph 14.(g)(iv) hereof) in its
possession or under its control related to the physical condition of its
respective Property. In addition, each Seller has provided Purchaser with all
books and records necessary for Purchaser to conduct its due diligence of such
Property;
(DD) No Seller has knowledge of any notices,
suits, investigations or judgments relating to any violations of any laws,
ordinances or regulations affecting the Property, (including, without
limitation, Environmental Laws [as defined in Paragraph 14.(g)(v) hereof]), or
any violations or conditions that may give rise thereto, and has no reason to
believe that any "Governmental Authority" (as defined in Paragraph 14.(g)(vi)
hereof) contemplates the issuance thereof, and there are no outstanding orders,
judgments, injunctions, decrees, directives or writ of any Governmental
Authority against or involving any Seller or any of the Property;
(EE) Except as disclosed on Schedule "T" attached
hereto and made a part hereof:
(1) and except as disclosed in the
environmental reports set forth on Schedule "Q", to the best of Seller's
knowledge, there are no Contaminants (as defined in Paragraph 14.(g)(i) hereof)
on, under, at, emanating from or affecting any of the Properties, except those
in compliance with
<PAGE>
all applicable Environmental Laws;
(2) and except as disclosed in the
environmental reports set forth on Schedule "Q", no Seller, nor to any Seller's
knowledge, any current occupant, any prior owner or occupant, of any Property
has received any Notice (as defined in Paragraph 14.(g)(ix) hereof) or advice
from any Governmental Authority or any other third party with respect to
Contaminants on, under, at, emanating from or affecting any of the Property and,
to each Seller's knowledge, no Contaminants have been Discharged (as defined in
Paragraph 14.(g)(ii) hereof) which would allow a Governmental Authority to
demand that a cleanup be undertaken;
(3) no portion of any Property has ever been
used by any Seller or, to any Seller's knowledge, any former owner or current or
former occupant to generate, manufacture, refine, produce, treat, store, handle,
dispose of, transfer or process Contaminants, whether or not any of those
parties has received Notice or advice from any Governmental Authority or any
other third party with respect thereto in violation of Environmental Laws;
(4) no portion of any Property now is or, to
any Seller's knowledge, ever has been used as a Major Facility (as defined in
Paragraph 14.(g)(vii) hereof) and no Seller shall use, nor permit use of any
portion of the Property for that purpose;
(5) no Seller has transported any
<PAGE>
Contaminants, nor to any Seller's knowledge has any current or former occupant
or former owner transported Contaminants from any Property to another location
which was not done in compliance with all applicable Environmental Laws;
(6) no ss. 104(e) informational request has
been received by Seller issued pursuant to CERCLA (as defined in
Paragraph 14.(g)(i) hereof);
(7) to the best of Seller's knowledge, there
is no asbestos or asbestos containing material in any friable
state or otherwise in violation of Environmental Laws on any of
the Properties;
(8) to the best of Seller's knowledge, all
transformers and capacitators containing polychlorinated
biphenyls ("PCBs"), and all "PCB Items", as defined in 40 C.F.R.
ss. 761.3, located on or affecting any Property are identified in
Schedule "AA" and are in compliance with all Environmental Laws;
(9) to the best of Seller's knowledge, there
are no above ground storage tanks or Underground Storage Tanks (as defined in
Paragraph 14.(g)(xi) hereof) at any of the Properties, regardless of whether
such tanks are regulated tanks or not;
(10) to the best of Seller's knowledge, all
pre-existing above ground storage tanks and Underground Storage Tanks at all of
the Properties have been removed and their contents disposed of in accordance
with and pursuant to Environmental Laws;
<PAGE>
(11) to the best of Seller's knowledge, none
of the Properties has been used as a sanitary landfill facility
as defined in the Solid Waste Management Act, N.J.S.A. 13:1E-1 et
seq.;
(12) each Seller and, to the best of
Seller's knowledge, each occupant of each Property have all environmental
certificates, licenses and permits ("Permit") required to operate the Property
and there is no violation of any 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;
(13) None of the Improvements located on the
Properties have been constructed or installed in violation of any wetlands
regulations administered by the United States of America, Army Corps of
Engineers, the Environmental Protection Agency or NJDEP (as defined in Paragraph
14.(g)(viii) hereof);
(14) there are no federal or state liens as
referred to under CERCLA or the Spill Act (as defined in
Paragraph 14.(g)(i) hereof) that have attached to any of the
Properties;
(15) no Seller in the past has and does not
now own, operate or control any Major Facility;
(16) no Seller has nor to the best of
Seller's knowledge has any Seller permitted any occupant to
engage in any activity on the Property in violation of
Environmental Laws;
<PAGE>
(17) to the best of Seller's knowledge, all
of the Properties are in material compliance with Environmental
Laws;
(18) to the best of Seller's knowledge,
there are no engineering or institutional controls at any of the Properties,
including without limitation, any deed notice, declaration of environmental
restriction, groundwater classification exception area or well restriction area
pursuant to N.J.S.A. ss. 13:1E-56 or N.J.S.A. 58:10B-13; and
(19) to the best of Seller's knowledge, the
Freshwater Wetlands Exemption Letter (the "Letter") attached hereto and made a
part hereof as Schedule "U", dated June 13, 1990, with respect to the Properties
referred to therein, is in full force and effect; all of the terms of the Letter
have been complied with in full; and NJDEP has no right to void the Letter on
the basis that the terms have not been complied with in full. Notwithstanding
any contrary provision in this Agreement concerning the survival of
representations and warranties, this representation and warranty shall survive
the Closing without limitation.
(b) Purchaser hereby represents, warrants and covenants the
following:
(A) Burlington Commerce Realty Associates, L.P.
is a limited partnership of the State of New Jersey and Mack-Cali
Realty, L.P. is a limited partnership of the State of Delaware,
and each is in good standing, has the right and authority to
<PAGE>
execute this Agreement and to consummate this transaction in accordance with the
provisions hereof and all persons executing this Agreement and all other
applicable documents on behalf of Purchasers, have the right, power and
authority to do so;
(B) The execution, delivery and performance of
this Agreement in accordance with its terms does not violate any contract,
agreement, commitment, order, judgment, decree, law, regulation or ordinance to
which Purchaser is a party or by which it is bound or as to which any of its
assets is subject; and
(C) Purchaser shall provide Sellers true copies
of authorization ("Purchaser's Authorization") authorizing or ratifying
Purchaser's entering into this Agreement and authorizing Purchaser's purchase of
all of the Properties from Sellers in accordance with the terms of this
Agreement.
(c) In the event that either party knows or learns that any of
the representations contained in this Agreement are false or no longer are true
and accurate, such party forthwith shall deliver notice of such fact to the
other party, and the other party shall proceed diligently to cure or remedy such
misrepresentations. In the event that such misrepresentations cannot or shall
not be cured within thirty (30) days following delivery of notice thereof, then
the notifying party shall have the right either (i) to elect, nevertheless, to
close title to the Properties in accordance with the provisions of this
Agreement, (ii) to elect not to purchase the Property or Properties affected by
the misrepresentation and proceed with the
<PAGE>
purchase of the remaining Properties, in which event, the Purchase Price shall
be reduced by an amount based on the allocation of the Purchase Price set forth
on Schedule "E", or (iii) to declare this Agreement null and void, by notice
delivered to the non-curing party. The termination of this Agreement pursuant to
this Paragraph 6 shall not release the misrepresenting party from any liability
it may otherwise have to the other party by reason thereof.
(d) Whenever in this Paragraph 6, a representation and/or
warranty is made to the knowledge of any Seller, knowledge of such Seller shall
mean the actual knowledge of William G. Price Jr. and/or John S. McGarvey,
without any independent investigation other than reviewing the applicable
representation and/or warranty.
(e) The representations and warranties made by Sellers in
Paragraphs 6(D), (G), (H), (J), (M), (P), (X), (Y), (AC), (AD), and (AE) shall
survive the Closing for the applicable statute of limitations. The
representations and warranties made by Sellers in Paragraphs 6(A), (B), (C),
(E), (F), (I), (K), (L), (N), (O), (Q), (R), (S), (T), (U), (V), (W), (Z), (AA),
and (AB) shall survive the Closing for a period of one (1) year; provided,
however, that no claims for indemnification under Paragraphs 6(A), (B), (C),
(E), (F), (I), (K), (L), (N), (O), (Q), (R), (S), (T), (U), (V), (W), (Z), (AA)
and (AB) with respect to a breach of any representation or warranty referred to
above in this sentence may be maintained by Purchaser unless Purchaser shall
<PAGE>
have delivered notice to Sellers specifying the nature of such claim, which
notice shall be delivered on or before the date which is one (1) year after the
Closing Date (the "Survival Date"). Upon the giving of such notice as aforesaid,
Purchaser shall have the right to commence legal proceedings prior or subsequent
to the Survival Date for the enforcement of its rights under this Agreement. The
representations and warranties made by Purchaser in Paragraph 6 shall not
survive the Closing. Sellers shall not be liable to Purchaser for the first Ten
Thousand ($10,000.00) Dollars of damages suffered by Purchaser in the aggregate
with respect to the Properties on account of breaches of any representations or
warranties by Sellers hereunder, including reasonable professional fees and
costs incurred as a result thereof, nor for any damages in excess of One Million
One Hundred Sixty-Five Thousand ($1,165,000.00) Dollars; provided, however, that
the limitations set forth in this sentence shall not apply to damages suffered
by Purchaser on account of breaches of the representations or warranties set
forth in Paragraphs 6(P), 6(AC), 6(AD), 6(AE), 14 and 17. Purchaser shall not be
liable to Sellers for the first Ten Thousand ($10,000.00) Dollars of damages
suffered by Sellers in the aggregate on account of breaches of any
representations or warranties made by Purchaser hereunder, including reasonable
professional fees and costs incurred as a result thereof, nor for any damages in
excess of One Million One Hundred Sixty-Five Thousand ($1,165,000.00) Dollars.
<PAGE>
7. LEASES AND TENANCIES.
(a) If any claim is made against Purchaser by any Tenant
asserting an offset against rent or otherwise, including any rent over-charges
or failure to provide services, with respect to any matter which arose prior to
Closing, Sellers shall indemnify and hold Purchaser harmless for all losses,
damages and expenses (including, without limitation, reasonable attorneys' fees
and costs) incurred by Purchaser in connection thereof. After Purchaser shall
receive notice of a claim that may give rise to an indemnity hereunder,
Purchaser shall notify Seller; provided, however, the failure to give any notice
shall not relieve Sellers from any liability hereunder unless such failure
impairs the right to defend such action. In the event any claim is brought
against Purchaser with respect to which Sellers may have liability under the
indemnity agreement contained in this Paragraph 7.(a), the claim may, upon
written agreement of Sellers that they are obligated to indemnify against the
particular claim under the indemnity agreement contained herein, be settled by
Sellers with the prior written consent of Purchaser, which shall not be
unreasonably withheld.
(b) Purchaser shall assume the Leases following the Closing
and shall indemnify and hold Sellers harmless for all losses, damages and
expenses (including, without limitation, reasonable attorneys' fees and costs)
incurred by the applicable Seller arising from any claim by a Tenant in respect
to any obligation to Tenant assumed by Purchaser or any advance rental
<PAGE>
credited to Purchaser. After Sellers shall receive notice of a claim that may
give rise to an indemnity hereunder, Sellers shall notify Purchaser; provided,
however, the failure to give any notice shall not relieve Purchaser from any
liability hereunder unless such failure impairs the right to defend such action.
In the event any claim is brought against Sellers with respect to which
Purchaser may have liability under the indemnity agreement contained in this
Paragraph 7.(b), the claim may, upon written agreement of Purchaser that it is
obligated to indemnify against the particular claim under the indemnity
contained herein, be settled by Purchaser with the prior written consent of
Sellers, which shall not be unreasonably withheld.
(c) Sellers agree not to apply or return any security deposit
in whole or in part between the date hereof and Closing, except for a Tenant who
has vacated the Property or for Leases expiring prior to Closing. At the
Closing, each Seller shall turn over to Purchaser all Tenant security deposits
plus any interest earned thereon for the benefit of Tenant together with an
updated Schedule "J". Sellers shall indemnify Purchaser for any claims made,
suits commenced or judgments entered in connection with the security deposits
for the period through the Closing Date and Purchaser shall indemnify the
applicable Seller for any claims made, suits commenced or judgments entered into
in connection with all security deposits for the period subsequent to the
Closing Date.
(d) After the date hereof, Seller shall be permitted
<PAGE>
to lease the Properties subject to and in accordance with the
following:
(i) Seller shall interview prospective tenants,
make credit and reference checks of prospective tenants and
furnish such information to Purchaser;
(ii) the proposed tenant shall be a reputable
entity with sufficient financial means to perform all of its
obligations under the proposed lease;
(iii) all leases shall be written and be in
substantially the form of lease approved by Purchaser;
(iv) all leases shall be the result of arms'-
length negotiations, shall provide for "market" rental rates and other market
terms (and shall not contain any terms which would adversely affect Purchaser's
REIT qualification); and
(v) Seller shall obtain Purchaser's prior written
consent to each lease before executing same.
8. CLOSING.
(a) Closing shall occur at 10:00 a.m. at the offices of Archer
& Greiner, One Centennial Square, Haddonfield, New Jersey on January 28, 1998,
or at such other date, time and/or place as the parties may agree upon;
provided, however, that if such date shall be a Saturday, Sunday or legal
holiday, then Closing shall take place on the first business date thereafter
(herein referred to as the "Closing" and the "Closing Date" respectively).
(b) At Closing, the following shall be executed and/or
<PAGE>
delivered:
(i) By Sellers:
(A) The Deeds [as hereinafter described in
subparagraph (c)];
(B) Each Seller's certification that the
representations and warranties set forth in this Agreement are
true and accurate as of the Closing;
(C) Each Seller's affidavit of title, the
form and substance of which shall be subject to the reasonable
approval of Title Company and Purchaser's attorneys;
(D) Sellers' Resolutions;
(E) Bill(s) of Sale and/or assignments if so
requested by Purchaser;
(F) The Assignment and Assumption of Leases
together with schedules of security deposits paid by Tenants and any
applications thereof made by each Seller. At Closing, Sellers shall pay to
Purchaser by separate certified check or allow as a credit against the Purchase
Price, the aggregate amount of all security deposits held under Leases;
(G) The original Leases and all amendments,
modifications and guarantees thereto, and all brokerage
commission agreements;
(H) The Tenant Notice to Tenants;
(I) Survey affidavit(s), if so requested by
Purchaser;
(J) Certifications of non-foreign status in
<PAGE>
accordance with Internal Revenue Code Section 1445, as amended;
(K) Keys to all doors to, and equipment and
utility rooms located in all of the Properties, which keys shall
be properly tagged for identification;
(L) An endorsement to all transferable
insurance policies, if any, approved by Purchaser, naming Purchaser as the party
insured, together with the original of each such policy;
(M) A complete set of as-built plans and
specifications and permanent certificates of occupancy for each building and
improvement comprising a part of the Property, which are in the possession or
control of Sellers;
(N) All original licenses and permits
pertaining to all of the Properties and required for the use or
occupancy thereof, together with a duly executed assignment
thereof to Purchaser;
(O) True and complete Records;
(P) All Guarantees and Contracts, together
with a duly executed assignment thereof to Purchaser;
(Q) ISRA Approval (as hereinafter defined in
Paragraph 14.(a) hereof);
(R) Mortgagee Certificates;
(S) Mutually satisfactory closing statement;
(T) The Estoppel Certificates;
(U) An estoppel certificate from the
Developer or Developer's successor under that certain Declaration
<PAGE>
of Protective Covenants, Easements and Restrictions for Bromley at Burlington,
recorded in the Burlington County Clerk's Office in Book 3317 at Page 145, as
amended by Amendment recorded in Book 4098 at Page 133 (the "Declaration"),
which estoppel certificate shall include the following: (1) such party is the
Developer under the Declaration; (2) that the Premises known as 3 Terri Lane and
5 Terri Lane, Burlington, New Jersey, and all improvements constructed thereon
have received all requisite approvals required under the Declaration and fully
comply with the Declaration; (3) the pro-rata share of Assessments attributable
to each Premises; (4) that all Assessments levied against the Premises have been
paid; and (5) the Repurchase Option set forth in Section 10.09 of the
Declaration has expired and is no longer exercisable against either Premises;
(V) An easement in and over Terri Lane, for
the passage of pedestrian and vehicular traffic to and from 3 and 5 Terri Lane
and publicly dedicated roadways, for the benefit of such Property;
(W) An amendment to the Declaration, duly
executed by each of the persons and entities owning property within Bromley at
Burlington, in recordable form, deleting all references to the Successor
Corporation (as defined in the Declaration) or to any association of which
owners are members and otherwise in form satisfactory to Purchaser;
(X) Releases in favor of Purchaser from
<PAGE>
Jackson Cross for any and all claims whatsoever for commissions or other fees
for the transactions contemplated by this Agreement, the T & N Agreement (as
hereinafter defined) and the Agreement of Sale (as hereinafter defined) in form
reasonable acceptable to Purchaser to the extent Seller, after using its best
efforts, is able to obtain;
(Y) The Westampton Memorandum (as
hereinafter defined);
(Z) Such other items to be provided to
Purchaser pursuant to this Agreement; and
(AA) Such other instruments as reasonably
may be required by Purchaser's counsel or the Title Company to
effectuate this transaction.
(ii) By Purchaser:
(A) The Purchase Price;
(B) The Assignment and Assumption of Leases;
(C) Tenant Notices to Tenants;
(D) Mutually satisfactory closing statement;
(E) Such other items to be provided to
Sellers pursuant to this Agreement; and
(F) Such other instruments as reasonably may
be required by Sellers' counsel to effectuate this transaction.
(c) The deeds ("Deeds") to be delivered at Closing
shall be Bargain and Sale Deeds with covenants against grantors' acts, in proper
form for recording so as to convey to Purchaser good, marketable and insurable
fee simple title to the Property
<PAGE>
in accordance herewith.
(d) The words "Closing", "title closing", "Closing of title",
"delivery of deed" and words of similar import are used interchangeably in this
Agreement, as the sense of text indicates, to mean the event of consummation of
this sale in accordance with the terms of this Agreement.
9. CLOSING ADJUSTMENTS.
(a) The following are to be apportioned as of the
Closing Date:
(i) real property taxes;
(ii) water rates and charges;
(iii) sewer taxes and rents;
(iv) all base rent payments;
(v) common area and other additional rent
charges, if any;
(vi) fuel oil on hand, determined at Sellers'
cost;
(vii) insurance premiums on transferable
policies, if any, approved by Purchaser;
(viii) annual license, permit and inspection
fees, if any, provided that the applicable Seller's rights
thereunder (or with respect thereto) are transferable to
Purchaser; and
(ix) charges and/or association fees or other
costs under any declaration, easement agreement or other instrument encumbering
or binding upon the Property.
<PAGE>
(b) (i) Apportionment of real property taxes, water rates and
charges and sewer taxes and rents shall be made on the basis of the fiscal year
for which assessed solely to the extent actually received by Sellers from
Tenants or actually paid or payable by Sellers. If the Closing Date shall occur
before any or all of the foregoing are fixed, the apportionment of real property
taxes shall be made on the basis of the tax rate for the preceding year applied
to the latest assessed valuation. After the final real property taxes, water
rates and charges and sewer taxes and rents are fixed, Sellers and Purchaser
shall make a recalculation of the apportionment of same, and Sellers or
Purchaser, as the case may be, shall make an appropriate payment to the other
based on such recalculation.
(ii) If at the time for the delivery of the Deeds,
any of the Premises or any part of any of them shall be or shall have been
affected by an assessment or assessments (including special and/or added) which
are or may become payable in annual installments of which the first installment
is then due 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 delivery of the applicable Deed for the affected
Premises, shall be deemed to be due and payable and to be liens upon such
Premises affected thereby and shall be paid and discharged by Seller upon the
delivery of the Deed for the Premises. If any assessment with respect to any
Premises is unconfirmed at the time of Closing, or if subsequent to Closing
<PAGE>
any assessment, including special or added, is determined to be incorrect, then,
immediately after the amount of the assessment has been established, or the
confirmed assessment corrected as a result of a prior error, Seller shall make
an appropriate payment to Purchaser within ten (10) days of the tax assessor's
calculation of the assessment. Notwithstanding the foregoing , if Tenants of any
Premises are obligated under a written lease for the payment of the entire
assessment (confirmed and/or unconfirmed), then with respect to such assessment,
Purchaser shall seek payment from the Tenants, and any assessment not otherwise
the obligation of the Tenants shall be the obligation of Seller. Seller shall
indemnify and hold Purchaser harmless from and against all costs and expenses,
including reasonable attorneys fees, incurred by Purchaser in connection with
Seller's failure to perform Seller's obligation under this Paragraph 9(b)(ii).
(c) If there shall be any water meters on any of the
Properties (other than meters measuring water consumption costs which are the
obligation of Tenants to pay), Sellers shall furnish readings to a date not more
than ten (10) days prior to the Closing Date, and the unfixed water rates and
charges and sewer taxes and rents, if any, based thereon for the intervening
time, shall be apportioned on the basis of such last readings.
(d) The amount of unpaid taxes, assessments, water charges and
sewer rents which Sellers are obligated to pay and discharge, with interest and
penalties thereon to the fifth (5th)
<PAGE>
day after the Closing Date, at the option of Sellers, may be allowed to
Purchaser out of the cash portion of the Purchase Price, provided that official
bills therefor with interest and penalties thereon are furnished by Sellers at
the Closing.
(e) If any refund of real property taxes, water rates and
charges or sewer taxes and rents is made after the Closing Date for a period
prior to the Closing Date, the same shall be applied first to the costs incurred
in obtaining same and second to the refunds due to Tenants by reason of the
provisions of their respective Leases. The balance, if any, of such refund shall
be paid to Sellers (for the period prior to the Closing Date) and Purchaser (for
the period commencing with the Closing Date).
(f) To the extent that any Seller receives rent payments after
the Closing Date for any period from and after the Closing Date, the same shall
be held in trust and immediately paid to Purchaser.
(g) All rent payments received by Sellers or Purchaser after
Closing shall be applied firstly against rents due and owing by such Tenant for
the periods from and after Closing and thereafter against rents due and owing
prior to Closing in inverse order of due date; provided, however, with respect
to the Tenant's listed on Schedule "J-1" ("Late Tenants"), if at Closing there
are past-due rents owed by Late Tenants for a period not to exceed the two (2)
months prior to the Closing Date (the "Arrearages"), then the rent payments
received by Sellers or
<PAGE>
Purchaser with respect to such Late Tenants on account of Arrearages after
Closing shall be applied first against out-of-pocket costs of collection, then
to such Arrearages and thereafter against rents due and owing after the Closing
Date.
(h) Nothing contained in Section (g) above shall prohibit any
Seller prior to Closing, at its own expense, from obtaining a promissory note
from any Tenant for any rental delinquencies due such Seller for a period prior
to Closing and instituting an action in its own name to collect such promissory
note; provided, however, that in no event shall any Seller be entitled to bring
suit under any Lease or seek to evict any Tenant or to recover possession of its
space.
(i) All realty transfer fees and charges (other than recording
fees for the Deeds) shall be borne by Seller.
10. RISK OF LOSS.
(a) Sellers assume the risk of loss or damage to all of the
Properties beyond ordinary wear and tear until delivery of the Deeds to
Purchaser and shall notify Purchaser forthwith upon the occurrence of any such
casualty ("Casualty Notice"). In the event of any casualty in which the Casualty
Threshold (as hereinafter defined) is not established, or in the event of a
casualty in which the Casualty Threshold is established and if Purchaser elects
to complete the purchase of the Properties hereunder, the parties shall proceed
to Closing without any repairs required of Sellers, subject however to their
obligations pursuant to Existing Mortgages and/or Leases, and without any
<PAGE>
change in the Purchase Price, except as otherwise provided in subparagraph (b)
below, in which event the applicable Seller, subject to the rights of mortgage
holders, and the cost of necessary repairs incurred by such Seller, shall assign
its full right, title and interest in and to the entire insurance proceeds with
respect thereto (including the right to receive proceeds) arising from such
occurrence to Purchaser at Closing and Purchaser shall receive a credit against
the cash portion of the Purchase Price of an amount equal to any self-insurance
obligations of Sellers, including the deductible amount of the insurance policy
maintained by the applicable Seller covering such occurrence. Sellers shall
cooperate in all respects with Purchaser in connection with the collection of
such insurance proceeds, to the extent not collected by the time of Closing,
including the endorsing of any checks or the payment of any proceeds received by
Sellers on account of said insurance policies, and to the extent any insurance
proceeds shall have been received by Sellers prior to Closing, shall remit to
Purchaser the full amount thereof so collected, less any amounts applied to
repair or restoration of the applicable Property or Properties in accordance
with the Existing Mortgages and/or Leases.
(b) If, prior to the Closing Date, any Property or Properties
shall be damaged by fire or other casualty and the estimated cost of repair
and/or restoration shall exceed twenty-five (25%) percent of the portion of the
Purchase Price allocated
<PAGE>
to such damaged Property herein or ten (10%) percent of the total Purchase
Price, or reasonably shall be estimated to require more than one hundred eighty
(180) days to repair or restore (collectively, "Casualty Threshold"), Purchaser
may, by notice to Sellers, elect either (i) not to purchase such Property, in
which event the Purchase Price shall be reduced accordingly based on the
valuation set forth on Schedule "E", or (ii) to terminate this Agreement. If
this Agreement is so terminated the Letter of Credit forthwith shall be returned
to Purchaser. Purchaser shall notify Sellers of its decision within sixty (60)
days of receipt of the Casualty Notice, which shall include the amount of
insurance coverage, the amount of insurance received, if any, the reasonably
estimated cost of repair, the amount incurred by the applicable Seller for such
repairs and the reasonably estimated time in which to complete said repairs, and
the Closing shall be postponed accordingly.
(c) Notwithstanding the foregoing, any proceeds of loss of
rent insurance for a casualty occurring prior to the Closing Date, whether
received prior to or following the Closing, shall be apportioned as of the
Closing Date.
11. CONDEMNATION. In the event that, prior to Closing, all or any
portion of any or all of the Properties shall be condemned or taken as the
result of the exercise of the power of eminent domain, or by deed in lieu
thereof (collectively, a "Taking"), or if such proceedings shall have commenced
or shall be threatened, Sellers promptly shall notify Purchaser ("Taking
Notice").
<PAGE>
Purchaser, in its sole judgment, shall notify Sellers within sixty (60) days
following receipt of the Taking Notice, that: (1) the remaining portion of a
specific Property is not suitable or economically viable for its intended use of
the affected Property, in which event Purchaser may terminate this Agreement
with respect to such Property; or (2) the remaining portion of the affected
Property is suitable and economically viable for its intended use, in which
event Closing shall proceed and Purchaser and the applicable Seller shall have
the right to participate jointly in the condemnation proceedings and the
proceeds thereof shall belong to the applicable Seller, subject to the rights of
mortgage holders, but Purchaser shall be entitled to a credit against the
Purchase Price in an amount equal to said proceeds, unless such condemnation
proceedings shall be pending on the Closing Date, in which event there shall not
be any credit and at Closing, the applicable Seller shall assign all its right,
title and interest in and to said proceedings and award to Purchaser.
Notwithstanding anything to the contrary contained herein, if there is a Taking
of two or more Properties, Purchaser may, upon notice to Sellers, terminate this
Agreement without further liability hereunder on the part of either party,
except that the Letter of Credit forthwith shall be returned to Purchaser.
12. APPROVALS FOR TRANSFER. In the event that any Governmental
Authority shall have an ordinance, law, rule, regulation or other requirement
requiring a new Certificate of Occupancy or other governmental authorization to
be issued in
<PAGE>
connection with the transfer of title to any of the Properties, or in the event
that on the Closing Date there is any such requirement, then and in any of such
events, Sellers shall use their best efforts, at their sole cost and expense, to
obtain and deliver to Purchaser, the Certificate of Occupancy or other
governmental authorization.
13. DUE DILIGENCE PERIOD.
(a) Through the period ending on the date of this Agreement
(the "Due Diligence Period"), Purchaser may perform, or cause to be performed,
tests, investigations and studies of or related to any or all of the Properties,
including, but not limited to, soil tests and borings, ground water tests and
investigations, percolation tests, surveys, architectural, engineering,
subdivision, environmental, access, financial, market analysis, development and
economic feasibility studies and such other tests, investigations or studies as
Purchaser, in its sole discretion, determines is necessary or desirable in
connection with the Properties and may inspect the physical (including
environmental) and financial condition of any or all of the Properties,
including but not limited to the Leases, Contracts, engineering and
environmental reports, development approval agreements, permits and approvals.
Purchaser shall conduct or cause to be conducted any tests and studies in a
manner which does not unreasonably impede the day-to-day operations of any of
the Properties, and shall repair and restore any portion of the surface of any
of the Properties disturbed by
<PAGE>
Purchaser, its agents, representatives 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 Sellers which might, or should, have been disclosed by
such inspection.
(b) During the Due Diligence Period, Purchaser, its agents,
representatives and contractors, shall have unlimited access to all of the
Properties and other information pertaining thereto in the possession or within
the control of any of the Sellers for the purpose of performing such
studies,tests, borings, investigations and inspections for the purposes
described in this Paragraph. Sellers shall cooperate with Purchaser in
facilitating its due diligence inquiry and shall obtain, and use their best
reasonable efforts to obtain, any consents that may be necessary in order for
Purchaser to perform same. In addition, Sellers will deliver to Purchaser
promptly after request, true and complete copies of all test borings,
Environmental Documents, surveys, title materials and engineering and
architectural data and the like relating to any of the Properties that are in
any Seller's possession or under its control. In the event any additional
materials or information comes within any Seller's possession or control after
the date of this Agreement, such Seller promptly shall submit true and complete
copies of the same to Purchaser. Sellers shall notify
<PAGE>
Purchaser of any dangerous conditions on any of the Properties, 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,
representatives or contractors.
(c) Purchaser shall obtain, or cause its contractors, agents
and representatives to obtain, liability insurance in an amount equal to One
Million ($1,000,000.00) Dollars on a per occurrence and aggregate basis on
account of personal injury to one or more persons and property damage with
respect to Purchaser's activities and entry onto the Properties. Upon request of
Sellers, the policy shall name Sellers as additional insureds. In addition,
Purchaser agrees to indemnify and hold Sellers harmless from any damage or
injury to persons or property arising out of or in connection with Purchaser or
its contractors, agents or representatives entering upon the Properties.
(d) Purchaser may terminate this Agreement for any reason or
for no reason by notice to Sellers given within the Due Diligence Period. In the
event Purchaser terminates this Agreement during the Due Diligence Period, this
Agreement shall be null and void, the Letter of Credit forthwith shall be
returned to Purchaser and copies of any reports or studies prepared by third
parties as part of Purchaser's investigations during the Due Diligence Period
(if expressly permitted by such
<PAGE>
third party), shall be delivered to Sellers (except, if this Agreement is
terminated as a result of Sellers breach hereof). In the event Purchaser does
not terminate this Agreement by the end of the Due Diligence Period, Purchaser
shall be deemed to have elected not to terminate this Agreement pursuant to this
Section.
14. ENVIRONMENTAL PROVISIONS.
(a) Notwithstanding anything to the contrary contained in this
Agreement, the obligation of Purchaser to pay the Purchase Price and otherwise
proceed to Closing shall be subject to the condition as to each Property, that
Sellers shall promptly apply for and obtain from the Element (as hereinafter
defined in Paragraph 14.(g)(iii) hereof) pursuant to ISRA (as hereinafter
defined in Paragraph 14.(g)(i) hereof), and deliver to Purchaser, at least five
(5) days prior to Closing (the "ISRA Compliance Date"), together with all
submissions upon which any one or more of the following is based, either:
(i) a Letter of Non-Applicability;
(ii) a de minimis quantity exemption;
(iii) an unconditional approval of the applicable
Seller's Negative Declaration; or
(iv) an unconditional No Further Action Letter;
(collectively the "ISRA Approval"). In no event shall an ISRA Approval involve
any engineering or institutional controls, including without limitation,
capping, deed notice, declaration of environmental restriction or other
institutional control
<PAGE>
notice pursuant to P.L. 1993 c. 139, a groundwater classification exception area
or a well restriction area. If the requirements of this Paragraph 14.(a) are not
satisfied on or before the ISRA Compliance Date, Purchaser thereafter shall have
the right, by notice to Sellers, to: (A) extend the ISRA Compliance Date for a
period not to exceed ninety (90) days; (B) elect not to purchase any such
Property or Properties for which ISRA Approval has not been obtained, as more
particularly set forth in subparagraph (b) below, and purchase the balance of
the Properties; or (C) to terminate this Agreement if the allocated portion of
the Purchase Price for the Properties for which ISRA Approval has not been
obtained exceeds ten (10%) percent of the Purchase Price in the aggregate, in
which latter event this Agreement shall be rendered null and void and of no
further force or effect, the Letter of Credit forthwith shall be returned to
Purchaser and neither party shall have further liability or obligation to the
other under or by virtue of this Agreement. Notwithstanding any contrary
provision set forth above, if Purchaser fails to elect to extend the ISRA
Compliance Date for a period of ninety (90) days pursuant to Paragraph
14(a)(iv)(A) above, Seller shall nevertheless have the right to do so, on notice
to Purchaser. If Seller elects to extend the ISRA Compliance Date for a period
of ninety (90) days, then Purchaser shall not have the rights set forth in
Paragraphs 14(a)(iv)(B) and (C) above until the expiration of the ninety (90)
day period.
(b) If Sellers shall be unable to satisfy the
<PAGE>
requirements of Paragraph 14(a) by the ISRA Compliance Date (as that date may be
extended by Seller or Purchaser pursuant to the provisions of Paragraph 14(a)),
and Purchaser does not elect to terminate this Agreement pursuant to the
provisions of Paragraph 14(a), then Purchaser shall have the right to
immediately purchase those Properties for which ISRA Approval has been obtained,
for the allocated portion of the Purchase Price for such Properties set forth on
Schedule "E", and upon the terms and conditions set forth in this Agreement. In
addition, notwithstanding any contrary provisions contained in this Agreement,
Purchaser shall continue to have the right, for a period of one (1) year from
the Closing Date, to purchase the balance of the Properties, as and when Sellers
shall obtain ISRA Approval for each such Property, for the allocated portion of
the Purchase Price for such Properties set forth on Schedule "E", and upon the
terms and conditions set forth in this Agreement.
If Sellers shall fail to obtain ISRA Approval for all of the Properties
within one (1) year from the Closing Date, then Purchaser shall have the right
to either: (A) terminate this Agreement with respect to the balance of the
Properties for which ISRA Approval has not yet been obtained, in which event
this Agreement shall be rendered null and void and of no further force or effect
with respect to such Properties and neither party shall have any further
liability or obligation to the other under or by virtue of this Agreement with
respect to such Properties; or (B) to extend the ISRA Compliance Date with
respect to such
<PAGE>
Properties for such period of time as Purchaser shall elect, in Purchaser's sole
and absolute discretion.
Notwithstanding any contrary provisions contained in this Agreement, if
the Closing on any of the Properties takes place on any date which is after the
first anniversary of the Closing Date, then the Closing shall take place in
accordance with the terms and conditions of this Agreement, with the exception
that the Purchase Price for such Property or Properties shall be determined
pursuant to Schedule "BB" attached hereto and made a part hereof.
If Sellers fail to obtain ISRA Approval for any Property within three
(3) years of the Closing Date, then either party shall have the right to
terminate this Agreement with respect to such Property or Properties, on notice
to the other, in which event this Agreement shall be rendered null and void and
of no further force or effect with respect to such Property or Properties and
neither party shall have any further liability or obligation to the other under
or by virtue of this Agreement with respect to such Property or Properties.
(i) After the Closing, Sellers shall cause
Sellers which are the owners of the Properties for which ISRA Approval has not
yet been obtained (the "Applicable Sellers") at Sellers' own cost and expense,
to promptly obtain or cause to be obtained, ISRA Approval for those Properties
not purchased by Purchaser at the Closing (the "Remaining Properties"). In no
event shall any of the foregoing result in engineering or
<PAGE>
institutional controls, including without limitation a deed notice or
declaration of environmental restrictions, or a groundwater classification
exception area or a well restriction area;
(ii) In order to obtain ISRA Approval for the
Remaining Properties, Sellers shall cause the Applicable Sellers, at Sellers'
own cost and expense, and in accordance with all currently existing or hereafter
enacted or promulgated Environmental Laws, to promptly undertake all action
(including without limitation, undertaking all Remedial Action, (as that term is
defined in subparagraph (iv) below) at the Remaining Properties or any real
property which is adjacent or contiguous thereto, or both, as the case may be)
required pursuant to ISRA, all of which shall be performed to the reasonable
satisfaction of Purchaser;
(iii) Sellers shall cause the Applicable
Sellers to notify Purchaser in advance of all meetings scheduled between the
Applicable Sellers or its representatives and the NJDEP, and Purchaser and their
representatives shall have the right, without the obligation, to attend and
participate in all such meetings. In addition, Sellers shall cause the
Applicable Sellers to deliver to Purchaser a copy of all submissions to be made
to the NJDEP, prior to submission to the NJDEP, and Purchaser shall have the
right, without the obligation, to comment upon each such submission, which
comments Sellers shall cause the Applicable Sellers to adopt;
<PAGE>
(iv) The term "Remedial Action" as used in this
subparagraph (b) shall mean all actions taken to cleanup, remove, remediate,
contain, treat, monitor, assess, evaluate or in any other way address
Contaminants in the indoor or outdoor environment; to prevent or minimize a
Discharge or threatened Discharge of Contaminants so they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment; to perform pre-remedial studies and investigations and
post-remedial operation and maintenance activities; or any other actions
authorized or required by Environmental Laws. In no event shall Remedial Action
involve any engineering or institutional controls, including, without
limitation, a deed notice or declaration of environmental restrictions, or the
creation of a groundwater classification exception area or well restriction
area; and
(v) The provisions of this subparagraph (b) shall
survive the Closing.
(c) Subject to the provisions of subparagraph (b) above, if
Sellers shall determine prior to the Closing, with respect to the Properties or
after the Closing with respect to the Remaining Properties, that the reasonably
estimated costs of compliance (the "Costs of Compliance") with the provisions of
Paragraph 14(a) with respect to all of the Properties (as evidenced by a cost
estimate prepared by Sellers' environmental consultant, itemized with
specificity as to the Property or Properties involved, the tasks to be
performed, the costs of
<PAGE>
performing each task, and the basis for such determination) shall exceed the sum
of One Million One Hundred Sixty-Five Thousand ($1,165,000.00) Dollars
("Environmental Threshold"), then Sellers shall immediately notify Purchaser
("Environmental Notice") and simultaneously provide Purchaser with a copy of
such cost estimate. If Purchaser shall disagree with the cost estimate of
Sellers' environmental consultant, it shall so notify Sellers within ten (10)
days of its receipt of such Environmental Notice, in which event the Costs of
Compliance shall be determined by an independent environmental consultant or
engineer, practicing in New Jersey, with at least ten (10) years' experience in
performing environmental services for property similar to the Properties in New
Jersey, mutually selected by the parties within ten (10) days of Purchaser's
notice of disagreement with the cost estimate. The selected environmental
consultant shall make an independent written estimate of the Costs of
Compliance, with the same specificity as set forth above, and provide Sellers
and Purchaser with a copy of such cost estimate within twenty (20) days of
selection. This costs estimate shall be binding on the parties for purposes of
Paragraph 14(a). If the parties are unable to agree upon the selection of an
independent environmental consultant within the time frame set forth above, or
if such selected environmental consultant shall fail to provide the estimate of
the Costs of Compliance as required, then either party, on notice to the other,
may apply to a Court of competent jurisdiction of the State of New Jersey to
make the
<PAGE>
appointment and the other party shall be bound by the Court's jurisdiction and
determination without any right of appeal. The estimate of the Costs of
Compliance determined by any environmental consultant selected by the Court
shall be made within twenty (20) days of such consultant's appointment and
pursuant to the provisions set forth in this subparagraph 14(c). All costs and
fees charged by the independent consultant in determining the Costs of
Compliance hereunder, shall be shared equally between the parties. If the Costs
of Compliance as estimated by the independent environmental consultant shall
exceed the Environmental Threshold, then Purchaser, within twenty (20) days from
receipt of the Costs of Compliance, shall have the right, in Purchaser's sole
discretion, to elect to: (i) purchase all Properties or all Remaining
Properties, as the case may be, in accordance with the provisions hereof in
which event, Sellers shall proceed to comply with the provisions of Paragraph
14(a) and Purchaser shall reimburse Sellers for all reasonable costs in excess
of the Environmental Threshold within thirty (30) days of receipt of copies of
all paid bills therefor; (ii) terminate this Agreement with respect to all of
the Properties or of the Remaining Properties for which the Costs of Compliance
shall exceed the Environmental Threshold, as the case may be, in which event the
Purchase Price shall be reduced accordingly based on the allocations set forth
on Schedule "E" and the parties shall proceed to Closing hereunder with respect
to the balance of the Properties in accordance herewith, and with the provisions
of
<PAGE>
Paragraph 14(b) and with the obligations of Sellers to comply with the
provisions of Paragraphs 14(a) and (c) and the obligation of Purchaser to pay
all Costs of Compliance in excess of the Environmental Threshold, if any, for
such Properties as Purchaser shall, in its sole discretion, purchase hereunder;
or (iii) terminate this Agreement, in which event Escrow Agent shall deliver to
Purchaser the Letter(s) of Credit and neither party shall have any further
rights or obligations to the other hereunder. If Purchaser fails to deliver
notice of its election to Sellers within the aforesaid twenty (20) day period,
then Purchaser shall be deemed conclusively to have elected to terminate this
Agreement pursuant to subparagraph (ii) as to the Properties or the Remaining
Properties for which the Costs of Compliance shall exceed the Environmental
Threshold, as the case may be, without regard to the Costs of Compliance, in
which event the Purchase Price shall be reduced accordingly based on the
allocations set forth on Schedule "E" and the parties shall proceed to Closing
hereunder with respect to the balance of the Properties.
(d) Seller has previously delivered to Purchaser, and
subsequently promptly upon receipt by any Seller or its representatives, each
Seller shall deliver to Purchaser as to the Property which it owns or controls:
(i) all Environmental Documents concerning such Property generated by or on
behalf of predecessors in title or former occupants of such Property to the
extent in such Seller's possession or control; (ii) all
<PAGE>
Environmental Documents concerning such Property generated by or on behalf of
such Seller, whether currently or hereafter existing; (iii) all Environmental
Documents concerning such Property generated by or on behalf of current or
future occupants of such Property to the extent in such 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 such Seller's possession
or control designating the location of past and present operations at such
Property and past and present storage of Contaminants above or below ground, on,
under, at, emanating from or affecting any of the Property or its environs.
(e) Each Seller shall notify Purchaser in advance of all
meetings scheduled between such Seller or its representatives and NJDEP, and
Purchaser and/or its representatives shall have the right, without obligation,
to attend and participate in all such meetings.
(f) Sellers, jointly and severally, shall indemnify, defend
and hold harmless Purchaser from and against any and all claims, liabilities,
losses, deficiencies, damages, interest, penalties and costs, foreseen or
unforeseen including, without limitation, reasonable counsel, engineering and
other professional or expert fees, which Purchaser may incur, by reason of or
resulting directly or indirectly, wholly or partly, from any breach, inaccuracy,
incompleteness or nonfulfillment of any
<PAGE>
representation, warranty, covenant or agreement herein by Sellers or any of
them, or by reason of any Sellers actions or non-action with regard to any of
Sellers obligations pursuant to this Paragraph 14. Notwithstanding the
foregoing, if Purchaser shall have a claim against Sellers for indemnity under
this Agreement, arising out of or in connection with Sellers breach of any
environmental representation, warranty, covenant or agreement in this Agreement,
Purchaser shall so notify Sellers of its claim for indemnity by the delivery of
a notice to Sellers specifying the nature of such claim, which notice shall be
delivered as soon as Purchaser determines shall be reasonably practicable.
If the claim for indemnity is one for which Purchaser shall be entitled
to a defense, then within five (5) days of receipt of Purchaser's notice,
Sellers shall immediately undertake defense of the claim, with counsel
reasonably acceptable to Purchaser. If the claim is one that requires any action
be undertaken at any of the Properties due to a violation of any currently
existing or hereafter enacted or promulgated Environmental Law or that requires
any Remedial Action at any of the Properties or any property adjacent thereto,
then Sellers shall cure such violation of Environmental Law or undertake such
Remedial Action, at Sellers sole cost and expense, but only upon the terms and
conditions set forth herein:
(i) Sellers shall proceed in a prompt and
diligent fashion to cure any violation of Environmental Laws or
undertake such Remedial Action as may be required by any
<PAGE>
Governmental Authority, as the case may be;
(ii) Sellers shall deliver to Purchaser proof of
their cure of any violation of Environmental Law, in form reasonably acceptable
to Purchaser, and if Remedial Action shall be required, Sellers shall also
deliver to Purchaser an unconditional No Further Action Letter, or substantially
similar document, issued by the NJDEP;
(iii) In no event shall any of the foregoing
activities of Sellers result in engineering or institutional controls, including
without limitation a deed notice or declaration of environmental restrictions,
or a groundwater classification exception area or a well restriction area being
placed on any of the Properties;
(iv) Sellers shall notify Purchaser in advance of
all meetings scheduled between any Seller or its representatives and any
Governmental Authority, including without limitation, the NJDEP, and Purchaser
and its representatives shall have the right, without the obligation, to attend
and participate in all such meetings. In addition, Sellers shall deliver to
Purchaser a certified, true and complete copy of all Environmental Documents
generated with respect to any violation of any Environmental Law or Remedial
Action, promptly upon receipt. Further, Sellers shall deliver to Purchaser a
copy of all submissions to the NJDEP or any other Governmental Authority,
including without limitation any proposals, reports or sampling results, prior
to submission, and Purchaser shall have the right, without the obligation, to
<PAGE>
comment upon each submission, which comments Sellers shall adopt. Sellers shall
reimburse Purchaser for the reasonable costs Purchaser incurs in connection with
its review of or comments to any such submission, within five (5) days of
Purchaser's demand;
(v) All Remedial Action or other action required
pursuant to Environmental Laws shall be performed without interfering with the
ownership of, or operations at the Properties in question, and in compliance
with all Environmental Laws and any other applicable federal, state, county or
municipal statutes, laws, ordinances, rules or regulations and pursuant to a
right of access agreement reasonably acceptable to Purchaser, which shall
include, without limitation a broad indemnification of Purchaser with respect to
any work to be performed on any Property by Sellers; and
(vi) Notwithstanding any contrary provisions
contained herein, in no event shall Sellers rights pursuant to this Paragraph
14(f) in any way diminish Purchaser's indemnification rights pursuant to this
Paragraph 14(f).
(g) The following terms shall have the following meanings when
used in this Agreement:
(i) "Contaminants" shall include, without
limitation, any regulated substance, toxic substance, hazardous
substance, hazardous waste, pollution, pollutant or contaminant,
as defined or referred to in the New Jersey Environmental Rights
Act, N.J.S.A. 2A:35A-1 et seq.; the New Jersey Spill Compensation
and Control Act, N.J.S.A. 58:10-23.11 et seq. (the "Spill Act");
<PAGE>
the New Jersey Air Pollution Control Act, N.J.S.A. 26:2C-1 et
seq.; the Hazardous Substances Discharge: Reports and Notices
Act, N.J.S.A. 13:1K-15 et seq.; the Industrial Site Recovery Act,
N.J.S.A. 13:1K-6 et seq. ("ISRA"); the "Tanks Laws" as
hereinafter defined in Paragraph 14.(g)(x) hereof; the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. ss.6901 et
seq. ("RCRA"); the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. ss.9601 et
seq. ("CERCLA"); the Water Pollution and Control Act, 33 U.S.C.
ss.1251 et seq.; together with any amendments thereto, regulations
promulgated thereunder and all substitutions thereof, as well as
words of similar purport or meaning referred to in any other
applicable federal, state, county or municipal environmental
statute, ordinance, 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 any
of the Properties, regardless of whether the result of an intentional or
unintentional action or omission.
(iii) "Element" shall mean the Industrial Site
<PAGE>
Evaluation Element or its successor of the NJDEP.
(iv) "Environmental Documents" shall mean all
environmental documentation in the possession or under the control of any
Seller(s) concerning any of the Properties, or its environs, including without
limitation, all sampling plans, cleanup plans, preliminary assessment plans and
reports, site investigation plans and reports, remedial investigation plans and
reports, remedial action plans and reports, or the equivalent, sampling results,
sampling result reports, data, diagrams, charts, maps, analysis, conclusions,
quality assurance/quality control documentation, correspondence to or from any
Governmental Authority, submissions to any Governmental Authority and
directives, orders, approvals and disapprovals issued by any Governmental
Authority.
(v) "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.
(vi) "Governmental Authority" shall mean the
federal, state, county or municipal government, or any department, agency,
bureau, board, commission, office or other body obtaining authority therefrom,
or created pursuant to any law.
(vii) "Major Facility" is as defined in the Spill
<PAGE>
Act.
(viii) "NJDEP" shall mean the New Jersey
Department of Environmental Protection or its successor.
(ix) "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.
(x) "Tank Laws" shall mean the New Jersey
Underground Storage of Hazardous Substances Act, N.J.S.A. 58:10A-
21 et seq., and the federal underground storage tank law
(Subtitle I) of RCRA, together with any amendments thereto,
regulations promulgated thereunder, and all substitutions
thereof, and any successor legislation and regulations.
(xi) "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 in the Tank Laws.
(h) Sellers covenant and agree that between the date hereof
and the Closing Date they shall perform or observe the following:
(i) Promptly notify Purchaser of, and promptly
deliver to Purchaser, a certified true and complete copy of any Notice any
Seller may receive, on or before the Closing Date, from any Governmental
Authority, concerning a violation of
<PAGE>
Environmental Laws or Discharge of Contaminants;
(ii) At their own cost and expense, be
responsible for the remediation of all Contaminants existing on, under, at
emanating from or affecting any of the Properties as of the date of Closing, in
violation of Environmental Laws, regardless of the date of discovery,
notwithstanding anything to the contrary set forth herein. In no event shall any
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 pursuant to
P.L. 1993, c. 139, or a groundwater classification exception area or well
restriction area. Any such remediation and associated activities shall be
undertaken pursuant to a right of access agreement reasonably acceptable to
Purchaser;
(iii) Seller has previously delivered to
Purchaser and subsequently, promptly upon receipt by any Seller or its
representatives, deliver to Purchaser a certified true and complete copy of all
Environmental Documents.
15. MAINTENANCE OF PROPERTY.
(a) Until Closing, Sellers shall: (i) use reasonable efforts
to lease space within the Properties in its ordinary course of business in
accordance with the terms of paragraph 7(d), including rights and options of
existing tenants; (ii) pay and otherwise perform all obligations pursuant to the
Leases, Existing Mortgages, Contracts, and all other agreements affecting
<PAGE>
the Property or Sellers' ability to complete the transactions contemplated
hereunder; (iii) pay all trade debts and accounts payable in the usual course of
business, incur no obligations except in the usual course of business; (iv)
maintain and repair each of the Properties in such manner so that it shall be
delivered in the same condition as of the date hereof, ordinary wear and tear
excepted; (v) if pursuant to the terms of any Lease existing as of the date of
this Agreement, any decorating, repairs or alterations are required to be made
or any equipment is required to be furnished to any tenant, or if Landlord has
any obligation to perform for any tenant, same will be done, supplied or
performed, as the case may be, by Sellers, at their sole cost and expense prior
to Closing; and (vi) use reasonable efforts to preserve for Purchaser, each
Seller's relationships with its Tenants, suppliers, real estate brokers,
governmental authorities and officials, managers, employees and other persons
and entities with which it has relationships with regard to each of the
Properties.
(b) The applicable Seller(s) shall complete any capital
expenditure programs related to any of the Properties which have commenced on or
prior to the date hereof and shall not defer taking any action or incurring any
costs or expenses, whether or not of a capital nature, with regard to any
Property, from and after date hereof, provided Purchaser shall have the right to
require Sellers to proceed to Closing prior to completion of all such capital
programs.
<PAGE>
(c) (i) The parties acknowledge that certain HVAC equipment
located at 101 Commerce Drive requires repair and/or replacement pursuant to an
inspection by Purchaser, a copy of which has been delivered to Seller (the
"Deferred Maintenance"). Upon request of Purchaser, Seller shall cause McGarvey
Construction Co., Inc. to perform all Deferred Maintenance for the one (1) year
period following Closing. Attached hereto as Schedule "CC" is an estimate (the
"Estimate") of the cost of the Deferred Maintenance. All work shall be done in a
first class, good and workmanlike manner using new equipment and materials at
least equal in quality to the equipment being replaced, and in compliance with
all applicable laws, orders and regulations of federal, state, county and
municipal authorities having jurisdiction. Seller shall obtain all necessary
permits, licenses and other governmental approvals which may be required to
perform the Deferred Maintenance. Seller shall furnish to Purchaser evidence of
performance of the Deferred Maintenance, and within thirty (30) days of receipt
thereof, Purchaser shall reimburse Seller for fifty (50%) percent of the cost of
the Deferred Maintenance pursuant to the Estimate; provided that Purchaser shall
not be obligated to make such reimbursement more than once per calendar month.
Upon completion of the Deferred Maintenance, Seller shall assign all guaranties
and warranties relating thereto to Purchaser.
(ii) If Seller shall default in the performance of
its obligations under this Paragraph 15(c), in addition to all
<PAGE>
other remedies Purchaser may have under this Agreement or at law or in equity,
Purchaser shall have the right to off-set any amounts incurred by Purchaser to
perform the Deferred Maintenance and/or due contractors against the purchase
price of any Development Property and/or any property to be sold pursuant to the
T&N Agreement.
16. NOTICES.
(a) Any notice, request, consent, approval or demand
("notice") which, pursuant to the provisions of this Agreement or otherwise,
must or may be given or made by either party hereto to the other, shall be in
writing and shall be given by such party or its attorney and shall be delivered
by personal delivery, by mailing same via certified mail, return receipt
requested, postage prepaid, in a United States Post Office depository, by
delivery to a postal or private expedited form of delivery service, or
telecopied to the intended recipient at the telecopy number set forth therefor
below (with hard copy to follow), addressed to Purchaser at its address set
forth in the heading to this Agreement, Attention: Roger Thomas, Esq., (fax
908-272- 6755), with a copy given in the aforesaid manner to Cole, Schotz,
Meisel, Forman & Leonard, P.A., Court Plaza North, 25 Main Street, P.O. Box 800,
Hackensack, New Jersey 07602-0800, Attention: Richard W. Abramson, Esq., (fax
201-489-1536), and to Sellers to William Price (fax 609-235-3043) ("Sellers'
Notice Agent") at the address set forth in the heading to this Agreement with a
copy given in the aforesaid manner to Archer & Greiner,
<PAGE>
One Centennial Square, Haddonfield, New Jersey 08033, Attention: Gary L. Green,
Esq., (fax 609-795-0574). It is acknowledged that notice delivered to Sellers'
Notice Agent shall be conclusively deemed to constitute notice to each and every
Seller.
(b) Notice shall be deemed delivered on the day of personal
delivery, on the day telecopied, on the first business day following deposit
with the overnight carrier or on the second business day following deposit in
the Post Office depository, as the case may be.
(c) Either party may designate a different person or address
by notice to the other party given in accordance herewith.
17. BROKER. Each party represents and warrants to the other party that
it dealt with no broker or other person entitled to claim fees for such services
in connection with the negotiation, execution and delivery of this Agreement,
other than Jackson Cross (hereinafter referred to as the "Broker") and Rubin
Organization ("Rubin). Sellers agree to pay Broker pursuant to a separate
agreement with Broker, which agreement shall provide, inter alia, that Broker
shall not have any claim whatsoever for commissions or other fees in connection
with the purchase of property by Purchaser or a related entity referred to in
Paragraphs 22 and 27 of this Agreement or against Purchaser whether or not
Closing shall occur, including failure to close due to the default of Purchaser
hereunder. Purchaser agrees to pay Rubin pursuant to a separate agreement with
Rubin; provided,
<PAGE>
however, Seller shall pay Purchaser the sum of Twenty-Four Thousand ($24,000.00)
Dollars on account of any payments due Rubin. Based upon the aforesaid
representations, warranties and covenants, each party agrees to defend,
indemnify and hold the other party harmless from and against any and all claims
for finders' fees or brokerage or other commission which at any time may be
asserted against the indemnified party, including any claim by Broker against
Purchaser, founded upon a claim that the substance of the aforesaid
representations of the indemnifying party is untrue. Such indemnification shall
include, but not be limited to, all commission claims, as well as all costs,
expenditures, legal fees and expert fees reasonably incurred in defending any
claim of any third party. In the event that by settlement or otherwise, any
monies or other consideration is awarded to or turned over to any third party as
a result of a commission claim, it is the intention of the parties hereto that
the indemnifying party shall be solely responsible therefor.
18. DEFAULT.
(a) If Purchaser shall default in the payment of the Purchase
Price or otherwise shall default in the performance of any of its other
obligations pursuant to this Agreement, Sellers, as their sole and exclusive
remedy, shall be entitled to receive, as liquidated damages and not as a
penalty, the Letter(s) of Credit and the right to convert same to cash, it being
acknowledged that the actual damages which may be suffered by Sellers in the
event of any default by Purchaser shall be
<PAGE>
difficult to ascertain, plus the costs and expenses set forth in (c) below. If
the Letter(s) of Credit are converted to cash, Sellers shall be entitled to
receive any interest earned on such cash.
(b) If Sellers shall default in any of their obligations
hereunder, Purchaser shall have the right to (i) terminate this Agreement by
notice to Sellers, in which event the Letter(s) of Credit shall be returned to
Purchaser and Sellers shall pay to Purchaser and Purchaser shall be entitled to
receive, the sum of Two Million ($2,000,000.00) Dollars, as liquidated damages
and not as a penalty, it being acknowledged that the actual damages which may be
suffered by Purchaser in the event of any default by Sellers shall be difficult
to ascertain, plus the costs and expenses set forth in (c) below, or (ii) seek
specific performance by Sellers of Sellers' obligations hereunder, and if
Purchaser is successful, in addition obtain from Sellers the costs and expenses
set forth in (c) below, together with damages suffered by Purchaser limited to
Two Million ($2,000,000.00) Dollars.
(c) In the event of litigation arising out of this Agreement,
the prevailing party shall be entitled to recover from the losing party, costs
and expenses incurred by the prevailing party, including reasonable legal fees
and disbursements.
19. SURVIVAL. It is agreed that all of the terms, agreements,
covenants, promises, provisions, indemnifications, representations and
warranties set forth herein shall, except as
<PAGE>
otherwise specifically set forth in this Agreement, survive
Closing and delivery of the Deeds.
20. INDEMNITY.
(a) Each Seller agrees jointly and severally to indemnify,
defend and save harmless Purchaser and its respective representatives,
employees, agents, constituent members, successors and assigns from and against
all claims, actions, demands, suits, liabilities and damages (i) subject to the
limitations set forth in Paragraph 6.(e), resulting from the breach or default
of any covenant, provision, representation or warranty of such Seller including
all reasonable costs and expenses incurred by Purchaser in the enforcement of
this Paragraph, or (ii) imposed upon or incurred by Purchaser, or allegedly due
by Purchaser, arising out of or relating to the ownership, operation, leasing,
repair or improvement of or otherwise dealing with, any Property, or by reason
of any event or occurrence on, or relating to, such Property which occurred,
accrued or related to an event occurring at any time prior to the Closing Date.
(b) Purchaser agrees to indemnify, defend and save harmless
Sellers and their respective representatives, employees, agents, constituent
members, successors and assigns from and against all claims, actions, demands,
suits, liabilities and damages (i) subject to the limitations set forth in
Paragraphs 6(e) and 18, resulting from the breach or default of any covenant,
provision, representation or warranty of Purchaser or
<PAGE>
(ii) imposed upon or incurred by Sellers, or allegedly due by Sellers, arising
out of or relating to the ownership, operation, leasing, repair or improvement
of or otherwise dealing with, any Property, or by reason of any event or
occurrence on, or relating to, such Property which occurred, accrued or related
to an event occurring at any time after the Closing Date.
21. ASSIGNMENT. This Agreement may not be assigned by Purchaser,
without the consent of Sellers (which consent shall not be unreasonably
withheld, delayed or conditioned), except that no such consent shall be required
with respect to an assignment to any affiliate of Purchaser. Upon such
assignment, Purchaser named herein shall be relieved of any further liability
for any of the terms, promises and conditions of this Agreement on its part to
be performed hereunder.
22. CROSS DEFAULT. Simultaneously with the execution and delivery of
this Agreement, Purchaser and/or an affiliate of Purchaser has entered into (i)
a certain Agreement of Sale with Seller and/or an affiliate of Seller (the
"Agreement of Sale") relating to certain property located in Moorestown
Township, New Jersey, as more particularly described in the Agreement of Sale
(the "Development Property"), and (ii) a certain agreement with Seller and/or an
affiliate of Seller (the "T & N Agreement") relating to certain property leased
to T & N Services, Inc. (the "T & N Property"), all as more particularly
described in the T & N Agreement. This Agreement and the obligations of the
parties hereunder are subject to performance by the respective
<PAGE>
parties to the Agreement of Sale and/or the T & N Agreement of their respective
obligations which are required to be performed prior to the Closing Date in
accordance with the terms thereof. If Sellers or their related entities default
in their obligations under the Agreement of Sale and/or the T & N Agreement,
Purchaser shall have the right to proceed with the purchase of the Properties
hereunder, to declare a default hereunder, or to terminate this Agreement, as
the case may be. If Purchaser shall default in its obligations under the
Agreement of Sale and/or the T & N Agreement, Seller shall have the right to
declare a default hereunder.
23. POST CLOSING EXPENSES.
(a) Sellers and Purchaser have established certain tenant
improvement allowances for the Costs of Tenant Work (as hereinafter defined) to
be performed on the Properties for the first two (2) years following Closing, as
more particularly set forth on Schedule "Z" annexed hereto and made a part
hereof (hereafter referred to as the "T.I. Allowances"). During each of the
first two (2) years following Closing, Purchaser shall be responsible for all
costs and expenses: (i) relating to tenant improvement work required to be
performed at all of the Properties for new tenants and for extensions, renewals
or the taking of new or additional spaces by existing Tenants; and (ii) for all
brokerage commissions incurred in connection with the leasing to new tenants or
with any extensions, renewals or the taking of new or additional spaces by
existing Tenants (provided
<PAGE>
that for purposes of this subsection (ii), each new lease, and each renewal,
expansion or extension shall be deemed to be no longer than five (5) years, it
being the intent of Purchaser and Sellers to include brokerage commissions for a
period of 5 years notwithstanding that a new lease, or an extension, renewal or
expansion is for a term in excess of five (5) years) (collectively, the "Costs
of Tenant Work"); up to the maximum sum of Six Hundred Thousand ($600,000.00)
Dollars per year (the "Tenant Work Threshold"). The costs and expenses relating
to tenant improvement work required to be performed at any of the Properties
following the vacation of such Property after a default by the then existing
Tenant shall be allocated as follows:
(i) The first seventy five thousand ($75,000)
Dollars of such costs incurred by Purchaser in each of the first two years
following Closing shall not be included in the calculation of Costs of Tenant
Work for such year;
(ii) The next seventy five thousand ($75,000)
Dollars of such costs incurred by Purchaser in each of the first two (2) years
following Closing shall be included in the calculation of Costs of Tenant Work
for such particular year; and
(iii) Any costs incurred by Purchaser in excess
of one hundred and fifty thousand ($150,000) Dollars in each of the first two
years following Closing shall not be included in the calculation of Costs of
Tenant Work for such particular year.
In addition, if Purchaser and a Tenant agree to terminate
<PAGE>
the existing lease between them for reasons other than a default of Tenant
thereunder, then the costs of tenant improvement work incurred by Purchaser for
such space shall not be included in the Costs of Tenant Work.
(b) During the first two (2) years following Closing, Sellers
shall be responsible for the aggregate Costs of Tenant Work at any or all of the
Properties in excess of One Million Two Hundred Thousand ($1,200,000.00)
Dollars; provided, however, that the cumulative costs of tenant improvement work
exceeding the product of (i) the aggregate square footage for applicable tenants
for a particular year for the specific category as set forth on Schedule "Z" and
(ii) the applicable T.I. Allowances shall not be included in the calculation of
the Tenant Work Threshold for such particular year.
(c) If, at the end of the first year following Closing, the
Costs of Tenant Work shall exceed the Tenant Work Threshold, but be less than
Six Hundred Ninety Thousand ($690,000.00) Dollars, such excess shall be
accumulated and deducted from the Tenant Work Threshold for the second year
following Closing (i.e. resulting in a lower Tenant Work Threshold for the
second year). If the Costs of Tenant Work shall exceed Six Hundred Ninety
Thousand ($690,000.00) Dollars at the end of the first year following Closing,
then within thirty (30) days after delivery of the Notice of Cost (as
hereinafter defined), Sellers shall deliver to Purchaser the Tenant Work Letter
of Credit (as hereinafter defined) in an amount equal to
<PAGE>
all Costs of Tenant Work in excess of the Tenant Work Threshold, as security for
the payment of all obligations of Sellers under this Paragraph 23. The Tenant
Work Letter of Credit shall be a clean, irrevocable, non-documentary and
unconditional letter of credit (the "Tenant Work Letter of Credit") issued by
and drawable upon any commercial bank or national banking association with
offices for banking purposes in Northern New Jersey, which shall have
outstanding unsecured, uninsured and unguaranteed indebtedness, or shall have
issued a letter of credit or other credit facility that constitutes the primary
security for any outstanding indebtedness (which is otherwise uninsured and
unguaranteed), that is then rated, without regard to qualification of such
rating by symbols such as "+" or "-" or numerical notation, "Aa" or better by
Moody's Investors Service and "AA" or better by Standard & Poor's Corporation,
and has combined capital, surplus and undivided profits of not less than Five
Hundred Million ($500,000,000.00) Dollars. Said Tenant Work Letter of Credit
shall name Purchaser as beneficiary, have a term of not less than thirteen (13)
months, permit multiple drawings, be fully transferable by Purchaser without the
payment of any fees or charges by Purchaser or any transferee, and otherwise be
substantially in the form attached as Schedule "V". Purchaser shall have the
right to draw the full amount of the Tenant Work Letter of Credit, by sight
draft, if the Tenant Work Letter of Credit is not renewed or replaced within
thirty (30) days prior to its expiration date or if Sellers fail to pay
Purchaser all
<PAGE>
sums due under this Paragraph 23 within thirty (30) days after delivery of the
Notice of Cost, whichever shall be the earlier to occur. If Sellers shall pay
all sums due Purchaser hereunder or if no sums are due Purchaser hereunder, the
Tenant Work Letter of Credit shall be returned to Sellers. Notwithstanding the
foregoing, if the Costs of Tenant Work in the first year following Closing shall
exceed Nine Hundred Thousand ($900,000.00) Dollars, Sellers, in addition to
posting such Tenant Work Letter of Credit, shall pay Purchaser, or, at
Purchaser's election, to subcontractors, materialmen and/or brokers in
immediately available funds, within thirty (30) days after delivery of the
Notice of Cost, all amounts exceeding Nine Hundred Thousand ($900,000.00)
Dollars. If the aggregate Costs of Tenant Work at the end of the second year
following Closing shall exceed One Million Two Hundred Thousand ($1,200,000.00)
Dollars, then Sellers shall pay all sums in excess of the Tenant Work Threshold
(less any sums previously paid by Sellers hereunder) to Purchaser or, at
Purchaser's election, to subcontractors, materialmen and/or brokers within
thirty (30) days following delivery of Notice of Costs. Following each of the
first two (2) years after Closing, Purchaser shall notify Sellers, in writing in
reasonable detail, the Costs of Tenant Work incurred by Purchaser during such
year and the amount required to be paid by Sellers ("Notice of Costs"). If the
aggregate Costs of Tenant Work during the first two (2) years following Closing
shall not exceed One Million Two Hundred
<PAGE>
Thousand ($1,200,000.00) Dollars, then Purchaser shall not owe any sums to
Sellers pursuant to this Paragraph 23, and an amount equal to all monies
previously paid by Sellers on account of this Paragraph 23, together with the
Tenant Work Letter of Credit shall be paid or delivered to Sellers, as the case
may be, within thirty (30) days after the end of the second year following
Closing.
(d) During the two (2) year period following Closing, McGarvey
Development Company ("McGarvey"), an affiliate of Sellers, shall be permitted to
bid upon any tenant improvement work. If McGarvey is awarded the bid, it shall
utilize employees and subcontractors who shall not cause labor conflicts. If
McGarvey is not awarded the bid, Purchaser shall select the lowest responsible
bidder to perform tenant improvement work.
(e) If Sellers shall default in their obligations under this
Paragraph 23, in addition to all other remedies Purchaser may have under this
Agreement or at law or in equity, Purchaser shall have the right to off-set such
amounts against the purchase price of any Development Property and/or any
property to be sold pursuant to the T&N Agreement.
(f) In the event of a dispute as to the propriety of any Costs
of Tenant Work, Sellers shall have the right to deliver a dispute notice (the
"Dispute Notice") to Purchaser within ten (10) days following receipt of the
applicable Notice of Costs. The Dispute Notice, to be valid, shall be
accompanied by a detailed statement as to the basis for the dispute and shall be
<PAGE>
accompanied by the tender of performance or payment of that portion of the sum
due as to which Seller does not take issue, limiting the dispute to only the net
amount actually disputed. Such dispute may be litigated under the provisions of
any simplified procedure for court determination of dispute applicable under the
laws of the State of New Jersey, or, with the mutual agreement of the parties,
may be submitted to arbitration, in either of which events, all parties will
join in request for expedition in the disposition of any proceeding brought to
resolve the dispute. In such circumstances, Sellers obligation to make such
reimbursement as to any matter in which a bona fide dispute has been raised will
be postponed to a date which is ten (10) days following the final determination
of the arbitrators, court or other forum or, in the event that the dispute is
resolved before any such final determination, within ten (10) days of the
judgment, settlement, or other resolution of the dispute. The prevailing party
in the dispute shall be reimbursed for any court charges related to the
resolution of the dispute and the attorney's fees in a reasonable amount.
24. POST CLOSING MANAGEMENT.
(a) For a period of three (3) months following Closing
("Interim Management Period"), an entity designated by Sellers and acceptable to
Purchaser shall be retained to perform the non-administrative aspects of the
management of all of the Properties ("Interim Manager"), such as the repair and
maintenance of all of the Properties and the day-to-day dealing with all the
Tenants of
<PAGE>
the Properties. Interim Manager shall not be responsible for the leasing,
accounting, bookkeeping or financial aspects of the management of any of the
Properties, such as the calculation, billing and collection of rent and common
area charges, and the payment of costs and expenses incurred in the operation of
the Properties.
(b) It is acknowledged that Sellers presently receive an
annual aggregate fee equal to two (2%) percent of the gross rentals (due or
collected, as the case may be) which fee is billed to Tenants as part of common
area maintenance charges. During the Interim Management Period, Purchaser shall
pay Interim Manager an amount equal to one (1%) percent of the monthly gross
rentals (due or collected, as the case may be) for each full month of the
Interim Management Period, which fee shall be prorated on a daily basis for any
partial month.
(c) Interim Manager shall bill Purchaser for its time and
material costs and expenses expended in the performance of its management
duties. Purchaser shall have the right to bill either specific Tenants for whom
such work was performed or all applicable Tenants as part of common area
maintenance charges if such work was not performed for specific Tenants, and in
either of such events, such payments of Tenants shall be made to and retained by
Purchaser.
(d) Purchaser reserves the right to require Interim Manager to
enter into an interim management agreement to reflect the provisions of this
Paragraph 24 in substantially the form
<PAGE>
annexed hereto as Schedule "W" and made a part hereof.
(e) Following the Interim Management Period, Purchaser shall
assume responsibility for all operations and management of all of the Properties
and shall have the right, but not the obligation, to hire the following
employees of Interim Manager or related entities:
4 Management construction employees;
1 property manager employee; and
1 receptionist.
25. POST CLOSING RESTRICTIONS.
(a) Except as otherwise set forth herein, for a period of
three (3) years commencing on the Closing Date, neither John S. McGarvey nor
William G. Price, Jr. ("Principals"), each of whom is a shareholder, officer,
director, partner, manager and/or employee of some or all of Sellers, existing
managing entities, Interim Manager or related entities, either directly or
indirectly, to or for the benefit of any person, firm, partnership, corporation
or other entity, shall: call upon, solicit, divert, accept any business or
patronage from, or attempt to call upon, solicit or divert any of the tenants of
the Property or any potential tenants of the Property of which either has
knowledge, for the leasing and/or purchasing of industrial, warehouse and/or
office real property, or engage or become interested, either as a principal,
partner, agent, employee, shareholder or director of any corporation,
association or other entity, or in any other manner or capacity whatsoever, in
the
<PAGE>
business of developing, managing, leasing or selling industrial, warehouse
and/or office real property at any location situated within the State of New
Jersey and within fifteen (15) miles from any portion of the Property.
(b) The provisions of Subparagraph (a) shall not apply to the
Development Property, as to which the applicable provisions of the Agreement of
Sale shall govern and control nor to the property located in the Township of
Westampton, County of Burlington and known as Block 202, Lots 1, 2, and 4 on the
tax map of Westampton Township (the "Westampton Property"), nor to the
Additional Property (as hereinafter defined).
(c) It is acknowledged that each of the covenants, obligations
and restrictions ("restrictions") set forth in this Paragraph 25 is separate and
distinct from each and every other restriction, so that in the event all or any
portion of any restriction is deemed invalid or unreasonable, each of the
remaining restrictions shall be deemed divisible and independent therefrom,
shall remain in full force and effect and each Principal consents to such
modifications of any such restrictions as a court may deem reasonable.
(d) It is acknowledged that each of the above restrictions is
fair, reasonable and constitutes a material inducement to Purchaser to purchase
the Property, shall be construed and enforced independently of any other
agreement herein and the existence of any claim by Sellers and/or Principals
against Purchaser shall not constitute a defense to
<PAGE>
the enforcement by Purchaser of the restrictions set forth above.
(e) If this Agreement is terminated as a result of
Purchaser's default under this Agreement, the T&N Agreement, the 2 Commerce
Agreement or the Agreement of Sale, the restrictions set forth in this Paragraph
25 shall be deemed terminated and of no further force and effect. If this
Agreement is terminated by Purchaser with respect to a particular Property (not
as a result of Seller's default under this Agreement), then the restrictions set
forth in this Paragraph 25 with respect to such Property only shall be
terminated and of no further force and effect.
(f) In the event Principals shall, at any time during the term
of the restrictions set forth in this Paragraph 25, receive a bona fide offer or
solicitation (the "Solicitation"), to engage or to become interested, either as
a principal, partner, agent, employee, shareholder or director of any
corporation, association or other entity, or in any other manner or capacity
whatsoever, in a business which would be violative of the restrictions set forth
in this Paragraph 25, which Solicitation Principals wish to accept, Principal
shall deliver a notice (hereinafter referred to as the "Solicitation Notice") to
Cali Realty setting forth all of the terms of said Solicitation together with a
true copy of the Solicitation (which must be in writing). Cali Realty shall
thereafter have the right, exercisable by notice to Principals, within thirty
(30) days after the date of receipt of the Solicitation Notice, to elect to
pursue such Solicitation either individually, or, at Cali
<PAGE>
Realty's election, by joint venturing same with Principals. In the event Cali
Realty shall elect to pursue such Solicitation individually, Principals shall
assign to Cali Realty all of their right, title and interest in and to such
Solicitation and the right to negotiate the terms and conditions of the
transactions contemplated in the Solicitation Notice in which event the
restrictions set forth in this Paragraph 25 shall continue to be effective and
shall remain in full force and effect. If Purchaser does not elect to pursue
such Solicitation, then Principals may, with respect to the transactions set
forth in the Solicitation Notice, pursue such transactions, notwithstanding the
restrictions set forth in this Paragraph 25. Nothing contained herein shall be
deemed a waiver or a release of Principals from the restrictions set forth in
this Paragraph 25 with respect to any other activities not encompassed within
the particular Solicitation Notice.
26. ESCROW AGENT.
(a) The Letter of Credit shall be held in escrow by Escrow
Agent and released on the terms hereinafter set forth.
(b) If Escrow Agent receives notice from Purchaser or
Purchaser's attorney that Purchaser has terminated this Agreement pursuant to
Paragraphs 4, 5, or 13 hereof, then Escrow Agent shall immediately return the
Letter of Credit to Purchaser without the applicability of Paragraphs 26(e), (g)
and (h).
(c) At the Closing, Escrow Agent shall deliver the Letter of
Credit to Purchaser.
<PAGE>
(d) Any notice(s) to and from Escrow Agent shall be given in
accordance with Paragraph 16 hereof.
(e) If Escrow Agent receives a notice signed by Sellers or
Sellers attorney stating that Purchaser has defaulted in the performance of its
obligations pursuant to this Agreement, Escrow Agent shall deliver a copy of
such notice to Purchaser. If Escrow Agent shall not have received notice of
objection from Purchaser within ten (10) days after Escrow Agent has delivered
such notice, Escrow Agent shall deliver the Letter of Credit to Sellers. If
Escrow Agent shall receive a timely notice of objection from Purchaser as
aforesaid, Escrow Agent promptly shall forward a copy thereof to Sellers.
(f) If Escrow Agent receives a notice signed by Purchaser or
Purchaser's attorney stating that this Agreement has been canceled or terminated
and that Purchaser is entitled to the Letter of Credit, or that Sellers have
defaulted in the performance of their obligations pursuant to this Agreement,
Escrow Agent shall deliver a copy of such notice to Sellers. If Escrow Agent
shall not have received notice of objection from Sellers within ten (10) days
after Escrow Agent has delivered such notice, Escrow Agent shall deliver the
Letter of Credit to Purchaser. If Escrow Agent shall receive a timely notice of
objection from Sellers as aforesaid, Escrow Agent promptly shall forward a copy
thereof to Purchaser.
(g) If Escrow Agent receives notice from either party
authorizing delivery of the Letter of Credit to the other party,
<PAGE>
Escrow Agent shall deliver the Letter of Credit in accordance with such
instructions.
(h) If Escrow Agent receives a notice of objection as
aforesaid, Escrow Agent shall convert the Letter of Credit to cash and hold such
proceeds in an interest bearing FDIC insured bank in New Jersey until Escrow
Agent receives either: (i) a notice signed by both Sellers and Purchaser stating
who is entitled to the Letter of Credit; or (ii) a final order of a court of
competent jurisdiction directing disbursement in a specific manner, in either of
which events Escrow Agent shall deliver the Letter of Credit in accordance
herewith or in accordance with such notice or order. Escrow Agent shall not be
or become liable in any way or to any person for its refusal to comply with any
requests or demands until and unless it has received a direction of the nature
described in (i) or (ii) above.
(i) Notwithstanding the foregoing provisions of Subparagraph
(g) above, if Escrow Agent shall have received a notice of objection as
aforesaid, or shall have received at any time before actual delivery of the
Letter of Credit, a notice signed by either Sellers or Purchaser advising that
litigation between Sellers and Purchaser over entitlement to the Letter of
Credit has been commenced, Escrow Agent shall have the right, upon notice to
both Sellers and Purchaser to deposit the Letter of Credit with the Clerk of the
Court in which any litigation is pending, whereupon Escrow Agent shall be
released of and from all
<PAGE>
liability hereunder except for any previous gross negligence or
willful default.
(j) Escrow Agent shall not be liable for any error or judgment
or for any act done or omitted by it in good faith, or for any mistake of fact
or law, and is released and exculpated from all liability hereunder except for
willful misconduct or gross negligence.
(k) Escrow Agent's obligations hereunder shall be as a
depositary only, and Escrow Agent shall not be responsible or liable in any
manner whatever for the sufficiency, correctness, genuineness or validity of any
notice, instructions or other instrument furnished to it or deposited with it,
or for the form of execution of any thereof, or for the identity or authority of
any person depositing or furnishing same.
(l) Escrow Agent shall not have any duties or responsibilities
except those set forth in this Agreement and shall not incur any liability in
acting upon any signature, notice, request, waiver, consent, receipt or other
paper or document believed by it to be genuine, and Escrow Agent may assume that
any person purporting to give any notice or advice on behalf of any party in
accordance with the provisions hereof has been duly authorized to do so.
(m) Escrow Agent shall be entitled to consult with counsel in
connection with its duties hereunder, including attorneys at its firm. The
parties shall reimburse Escrow Agent, jointly and severally, for all costs and
expenses incurred by
<PAGE>
Escrow Agent in performing its duties as Escrow Agent including, but not limited
to, reasonable attorneys' fees (either paid to retained attorneys or amounts
representing the fair value of services rendered to itself).
(n) The terms and provisions of this Paragraph shall create no
right in any person, firm or corporation other than the parties hereto and their
respective successors or assigns, and no third party shall have the right to
enforce or benefit from the terms hereof.
(o) In the event of any dispute, disagreement or suit between
Sellers and Purchaser, whether pertaining to the Letter of Credit, this
Agreement or otherwise, Escrow Agent shall have the right to represent or
otherwise serve as attorneys for Sellers.
(p) Escrow Agent is designated the "real estate reporting
person" for purposes of Section 6045 of Title 26 of the United States Code and
Treasury Regulation 1.6045-4 and any instructions or settlement statement
prepared by Escrow Agent shall so provide. Upon the consummation of the
transaction contemplated by this Agreement, Escrow Agent shall file Form 1099
information return and send the statement to Sellers as required under the
aforementioned statute and regulation.
27. RIGHT OF FIRST REFUSAL. In the event Sellers, or any affiliate of
Sellers which owns the Westampton Property and/or the property described on
Schedule "Y" (the "Additional Property") ("Owner") shall receive a bona fide
offer (the
<PAGE>
"Offer") to purchase the Westampton Property and/or the Additional Property, or
any portion thereof, which Offer such Owner wishes to accept, Owner shall
deliver a notice (hereinafter referred to as the "Offer Notice") to Purchaser
setting forth all of the terms of said Offer together with a true copy of the
Offer (which must be in writing). Purchaser shall thereafter have the right,
exercisable by notice to Owner, within thirty (30) days after the date of
receipt of the Offer Notice, to elect to purchase the Westampton Property and/or
the Additional Property, or any portion thereof, as the case may be, upon the
same terms and conditions set forth in the Offer and, if Purchaser so elects,
within ninety (90) days after the date of receipt of such Offer Notice,
Purchaser and Owner shall enter into a purchase agreement in substantially the
form of this Agreement (including the provisions of Paragraph 14 hereof)
reflecting the applicable terms of the Offer for the purchase of the Westampton
Property and/or the Additional Property, or any portion thereof, as the case may
be. At Closing, Purchaser shall pay the purchase price set forth in the Offer
Notice thereof (less any amount which would have been attributable to brokerage
commissions) by wire transfer of United States funds to the account designated
by Owner. Owner and Purchaser agree to execute a Memorandum of this Agreement
(the "Westampton Memorandum"), in recordable form, setting forth the rights set
forth in this Paragraph 27, which Purchaser may record against the Westampton
Property and the Additional Property.
<PAGE>
28. ROLLBACK TAXES. Any "rollback taxes" assessed or to be assessed
against any Premises identified on Schedule "B" pursuant to the Farmland
Assessment Act of 1964, N.J.S.A. 54:4-23.1, et seq., shall be paid by Seller. If
rollback taxes will be due with respect to any Premises but are not assessed at
the Closing Date, a good-faith estimate of the amount of same shall be obtained
by the parties from the tax assessor of the applicable Township, at least
twenty-four (24) hours prior to Closing, and Seller shall pay one hundred
twenty-five (125%) percent of the amount of said estimate from the proceeds at
Closing into escrow to be held by the Title Company until such time as the
rollback tax assessment against the respective Premises is made. Upon Title
Company's receipt of notice from Purchaser that said rollback taxes have been
assessed against the Premises, Title Company shall, within three (3) business
days thereof, pay said taxes to the appropriate Township. In the event the
amount of the monies being held in escrow by Title Company are not sufficient to
cover payment of said rollback taxes, then Seller shall promptly pay to
Purchaser any additional monies that are due and payable by Seller in accordance
with the terms and provisions of this Paragraph; and in the event the amount of
the escrow monies are in excess of the amount of said rollback taxes, then Title
Company shall disburse the remaining balance of the escrow funds to Seller after
the amount of the escrow monies due to Purchaser have been disbursed to the
appropriate Township, in accordance with the terms and provisions of the
immediately
<PAGE>
proceeding sentence. Seller shall indemnify and hold Purchaser harmless from and
against all costs and expenses, including reasonable attorneys fees, incurred by
Purchaser in connection with Seller's failure to perform Seller's obligations
under this Paragraph 28.
29. MISCELLANEOUS.
(a) This Agreement shall inure to the benefit of and shall be
binding upon the parties and their respective heirs, successors, legal
representatives and assigns.
(b) This Agreement may be executed in one or more
counterparts, each of which when so executed and delivered by each party to the
other shall be deemed an original, but all of which when taken together shall
constitute but one and the same instrument.
(c) At any time or from time to time, upon written request of
the other party, each party shall execute and deliver all such further documents
and do all such other acts and things as reasonably may be required to confirm
or consummate the within transaction.
(d) The captions preceding the paragraphs of this Agreement
are intended only as a matter of convenience and for reference and in no way
define, limit or describe the scope of this Agreement or the intent of any
provision hereof.
(e) This Agreement constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof. No variations or
modifications of or amendments to the
<PAGE>
terms of this Agreement shall be binding unless in writing and signed by the
parties hereto. The respective attorneys for each party are authorized to modify
any dates or time periods set forth herein.
(f) The terms, conditions, covenants and provisions of this
Agreement shall be deemed to be severable. If any clause or provision herein
contained shall be adjudged to be invalid or unenforceable by a court of
competent jurisdiction or by operation of any applicable law, the same shall be
deemed to be severable and shall not affect the validity of any other clause or
provision herein, but such other clauses or provisions shall remain in full
force and effect.
(g) The obligations of each party to complete the transactions
contemplated hereby is subject to the satisfaction, as of Closing, of all of the
terms, conditions and obligations to be met and/or performed by the other party
or which otherwise are for the benefit of such party, any of which conditions
and/or obligations may be waived in whole or in part by the party which is the
beneficiary of such condition or obligation.
(h) Each party, at its sole cost and expense, shall have the
right to record a short form memorandum of this Agreement, which memorandum
shall not set forth the Purchase Price or terms of payment, and each party
agrees to execute any such short form memorandum upon the request of the other
party.
(i) As used in this Agreement, the masculine gender shall
include the feminine or neuter genders and the neuter
<PAGE>
gender shall include the masculine or feminine genders, the singular shall
include the plural and the plural shall include the singular, wherever
appropriate to the context.
(j) This Agreement shall be governed by and enforced in
accordance with the substantive laws of the State of New Jersey.
30. SELLER'S RIGHT TO EXCHANGE PROPERTY.
(a) (i) Seller shall have the right, exercisable at least five
(5) days prior to Closing, to elect to exchange the Property for other property
of like kind ("Exchange Property") pursuant to Section 1031 of the Internal
Revenue Code of 1986, as amended.
(ii) If Seller elects to effect any exchange, it
shall notify Purchaser as to all details thereof, and Purchaser shall execute a
contract to purchase the Exchange Property in a form satisfactory to Seller
(hereinafter called the "Exchange Contract"), and immediately thereafter shall
assign all of its right, title and interest in and to the Exchange Contract to
the Exchange Escrow Agent, as hereinafter defined. The funds required to pay the
deposit under the Exchange Contract shall be provided to Purchaser by Seller or
Exchange Escrow Agent. The Exchange Contract shall provide for the right of
assignment by Purchaser to Exchange Escrow Agent and/or Seller without recourse,
and that the seller of the Exchange Property shall look only to the deposit
monies thereunder as liquidated damages, there being no liability on the part of
Purchaser to said seller.
<PAGE>
Purchaser shall not be obligated to execute an Exchange Contract which would
require Purchaser to be personally liable on any indebtedness or to incur any
cost or expense which would increase Purchaser's liability beyond that liability
incurred by Purchaser hereunder.
(iii) In no event, however, shall the closing of
title to the Property be delayed due to the inability of Seller to select an
Exchange Property or close title thereto.
(b) (i) If Seller shall elect to exchange the Property
pursuant to this Paragraph, whether or not an Exchange Property has been
designated, as herein set forth, the Purchase Price, exclusive of the
satisfaction of liens, payment of closing costs and other permitted expenses,
shall be deposited with the Exchange Escrow Agent ("Escrow Account"), subject to
the Exchange Escrow Agent executing an agreement reasonably satisfactory to
Purchaser whereby Exchange Escrow Agent agrees to be bound by the terms and
conditions of this Paragraph 30, and shall not be paid to Seller at Closing. The
Escrow Account shall be held by Exchange Escrow Agent in an interest bearing
account, pursuant to the terms hereof. The interest earned upon the Escrow
Account while being held by Exchange Escrow Agent shall be added to the Escrow
Account and shall be paid to Seller at the closing of the Exchange Property.
(ii) Purchaser appoints its title insurance
company or such other title insurance company or other entity as
Purchaser reasonably may designate, its agent, in order to
<PAGE>
effectuate the Exchange (the "Exchange Escrow Agent"). Purchaser and Seller
shall cooperate with each other and Exchange Escrow Agent and promptly shall
sign and deliver to Exchange Escrow Agent all documents reasonably deemed
necessary by Seller in order to qualify this transaction pursuant to Internal
Revenue Code Section 1031.
(iii) Seller shall pay all fees relating to the
Escrow Account, and all reasonable attorneys' fees and expenses of Purchaser, if
any, relating to the exchange transaction and in no event shall Purchaser be
required to assume any liability thereunder.
(iv) During the period that the Escrow Account is
in existence, Seller shall not have any control, directly or indirectly, over
the funds placed in the Escrow Account, except as may be expressly provided
herein.
(v) If, at the time of Closing, Seller shall not
have designated the Exchange Property, then if within forty-five (45) days
following Closing, Seller shall deliver to Purchaser and to Exchange Escrow
Agent a designation of an Exchange Property which Seller desires to acquire by
way of exchange for the Property transferred to Purchaser at Closing
("Designation"), the parties shall proceed as provided for herein. If there is
no timely Designation, then Exchange Escrow Agent, on the forty-sixth (46th) day
after Closing (or, if such day is a Saturday, Sunday or legal holiday, on the
first business day thereafter) shall disburse to Seller the Escrow Account and
all
<PAGE>
interest earned thereon shall be paid to Purchaser.
(vi) Any Designation of an Exchange Property shall
include an Exchange Contract, or thereafter Seller shall provide Purchaser with
an Exchange Contract, which Exchange Contract shall comply with the terms set
forth in Subparagraph 30.(a). The parties acknowledge that there may be multiple
Exchange Properties and that multiple Designations may be delivered, provided
that each meets the conditions set forth herein and the requirements of the
Internal Revenue Code Section 1031 and regulations thereunder.
(vii) Upon receipt by Purchaser of an Exchange
Contract, it shall execute and deliver the Exchange Contract to the seller of
the Exchange Property ("Exchange Seller"), Seller and Exchange Escrow Agent.
Thereafter, Purchaser shall assign its interest in the Exchange Contract to
Exchange Escrow Agent, it being agreed that Purchaser shall not take title to
any Exchange Property.
(viii) Upon Purchaser executing any Exchange
Contract, and in accordance therewith, Exchange Escrow Agent shall pay from the
Escrow Account to Exchange Seller, or such other party as is provided for in the
Exchange Contract, the amount of the deposit and all other monies required under
the Exchange Contract or otherwise related to the transaction.
(ix) Exchange Escrow Agent shall not be liable to
either Seller or Purchaser in connection with its performance as
Exchange Escrow Agent, except in the event of intentional
<PAGE>
wrongdoing or negligence. Exchange Escrow Agent is authorized only to do those
acts necessary and proper to effect the purpose of this Agreement.
(x) The Exchange Escrow Agent shall use the
Escrow Account, for payment of the deposit and all other payments due under the
Exchange Contract to purchase the Exchange Property, plus closing costs, and for
no other purpose.
(xi) If the payment for the Exchange Property
shall exceed the amount of the Escrow Account, Seller either shall: (i) deposit
an amount equal to such excess with Exchange Escrow Agent no later than the day
of the Exchange Property Closing; or (ii) cause or direct that the funds
necessary to effectuate the Exchange Property Closing be paid directly to
Exchange Seller at the Exchange Property Closing.
(xii) At the Exchange Property Closing, the
following shall be deposited or caused to be deposited with Exchange Escrow
Agent: (i) a deed for the Exchange Property from Exchange Seller as grantor to
Seller, as grantee; and (ii) any other documents or agreements necessary or
incidental to the acquisition or conveyance of the Exchange Property.
(xiii) When all documents and funds called for
herein have been deposited with Exchange Escrow Agent and when a title policy
can be issued on the Exchange Property to Seller, subject only to title
exceptions approved by Seller, Exchange Escrow Agent shall record the deed,
disburse the funds and deliver all other documents to Seller. All expenses,
<PAGE>
reimbursements and prorations in connection with the Exchange Property shall be
governed by the provisions of the Exchange Contract, except as expressly set
forth herein.
(xiv) Purchaser makes no warranty with respect to
the Exchange Property and Seller assumes all responsibility for title to the
Exchange Property being good and marketable. Seller agrees to indemnify
Purchaser and hold Purchaser harmless from any damages, liability, costs,
expenses, claims, losses or demands (including reasonable attorneys' fees and
costs of litigation including those for enforcing this indemnity), arising out
of or in any way related to the acquisition of the Exchange Property. If the
Exchange Property is subject to any mortgage, deed of trust or lease, Purchaser
shall assume no liability or obligation with respect to said mortgage, deed of
trust or lease. Purchaser makes no representations as to the tax consequences of
any aspect of this transaction.
(xv) If the Exchange Property as may be designated
by Seller is not conveyed to Seller within the earlier of: (i) one hundred
eighty (180) days after Closing; or (ii) the due date (determined with regard to
extensions) of Seller's federal income tax return for the taxable year in which
the transfer of the Property occurs or if no Exchange Property is designated
within forty-five (45) days following Closing, then the Escrow Account shall be
released to Seller, free of the escrow, and the obligations of Purchaser and
Exchange Escrow Agent shall end. Notwithstanding failure of the Exchange
Property to be conveyed
<PAGE>
to Seller as hereinabove set forth, the transfer of the Property to Purchaser
shall not be subject to recession or revocation by Seller or Purchaser for any
reason whatsoever.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
or caused these presents to be signed and sealed by duly authorized persons the
day and year first above written.
SELLERS:
WITNESSES:
______________________________ _____________________________
JOHN S. McGARVEY
______________________________ _____________________________
JOANNE H. McGARVEY
WITNESS: THE MOORESTOWN WEST
PARTNERSHIP
______________________________ By:__________________________
Name:________________________
Title:_______________________
WITNESS: FOSTER FLEX ASSOCIATES, L.L.C.
______________________________ By:__________________________
Name:________________________
Title:_______________________
WITNESS: LANCER ASSOCIATES, L.L.C.
______________________________ By:__________________________
Name:________________________
Title:_______________________
WITNESS: LENOLA FLEX, L.L.C.
______________________________ By:__________________________
Name:________________________
Title:_______________________
WITNESS: THE MCGARVEY PARTNERSHIP
______________________________ By:__________________________
John S. McGarvey
WITNESS: BROMLEY COMMONS ASSOCIATES
______________________________
By:__________________________
Name:________________________
Title:_______________________
WITNESS: CAMBRIDGE MANAGEMENT
ASSOCIATES
______________________________ By:__________________________
Name:________________________
Title:_______________________
WITNESS: TWOSOME FLEX ASSOCIATES,
L.L.C.
______________________________ By:__________________________
Name:________________________
Title:_______________________
PURCHASER:
<PAGE>
ATTEST: MACK-CALI REALTY, L.P.,
By: Mack-Cali Realty
Corporation, its General
Partner
______________________________ By:__________________________
Name:________________________
Title:_______________________
ATTEST: BURLINGTON COMMERCE REALTY
ASSOCIATES L.P.
By: Mack-Cali Sub XVI, Inc.,
its general partner
______________________________ By:__________________________
Name:________________________
Title:_______________________
<PAGE>
AS TO PARAGRAPH 23:
WITNESS:
______________________________ _____________________________
JOHN S. McGARVEY, d/b/a
McGARVEY DEVELOPMENT COMPANY
AS TO PARAGRAPH 25:
WITNESSES:
______________________________ _____________________________
WILLIAM G. PRICE, JR.
______________________________ _____________________________
JOHN S. McGARVEY
AS TO PARAGRAPH 26:
WITNESS: ARCHER & GREINER (Escrow
Agent)
______________________________ By:__________________________
AS TO PARAGRAPH 27:
WITNESS: LANCER ASSOCIATES, L.L.C.
______________________________ By:__________________________
Name:________________________
Title:_______________________
WITNESS: THE MOORESTOWN TWOSOME
______________________________ By:__________________________
Name:________________________
Title:_______________________
<PAGE>
AS TO PARAGRAPH 27:
WITNESS: WESTVIEW LAND, L.L.C.
______________________________ By:__________________________
Name:________________________
Title:_______________________
WITNESS:
______________________________ _____________________________
JOHN H. McGARVEY
WITNESS:
______________________________ _____________________________
JOANNE S. McGARVEY
EXHIBIT NO. 10.131
AGREEMENT OF SALE
AGREEMENT made this day of January, 1998, by and between Lancer
Associates, L.L.C. and The Moorestown Twosome, both having an office at 840
North Lenola Road, Moorestown, New Jersey 08507 (hereinafter collectively called
"Seller") and MACK-CALI REALTY, L.P., a Delaware limited partnership, having an
office at 11 Commerce Drive, Cranford, New Jersey 07016 (hereinafter called
"Purchaser").
W I T N E S S E T H:
FOR AND IN CONSIDERATION of the mutual covenants hereinafter contained:
31. AGREEMENT TO SELL AND PURCHASE.
(a) Seller hereby agrees to sell and convey, and Purchaser
hereby agrees to purchase, subject to the conditions set forth herein, those
certain plots, pieces or parcels of land ("Lands"), together with all buildings
and improvements located thereon or to be constructed thereon, and any
appurtenances or hereditaments appertaining thereto ("Improvements"), located in
the Township of Moorestown, County of Burlington, State of New Jersey
(hereinafter referred to collectively as the "Premises"). The Lands and
Improvements are known and designated by address and by Block and Lot on the
Township's Tax Map, as set forth on Schedule "A", attached hereto and made a
part hereof, and are
<PAGE>
more particularly described on Schedule "B", attached hereto and made a part
hereof.
(b) This sale includes, for no additional consideration, all
of the right, title and interest, if any, of Seller in and to the following:
(i) All fixtures, equipment and articles of
personal property necessary or appropriate for the operation or use of each
Premises, and any replacements or substitutions therefor and additions thereto
("Personal Property"), all trade names and fictitious names used by Seller in
connection with any Premises ("Names"), and all documents, records and books of
account relating to the construction, ownership, leasing, operation, management,
maintenance and/or financing of any Premises, which are in the possession or
control of Seller ("Records"). All of said Personal Property, Names and Records
shall be included in the deeds of conveyance, Bills of Sale and/or assignments
to be delivered at Closing (as hereinafter defined), as Purchaser may request;
(ii) Any land lying in the bed of any street, or
road open or proposed in front of, adjacent to, or adjoining any Premises, to
the center lines thereof, and any future award, if any, for damages to said
Premises by reason of change of grade of any street and all rights of way
appurtenant thereto ("Appurtenant Property"); and Seller shall execute and
deliver to Purchaser, at Closing or thereafter, on demand, all proper
instruments for the conveyance of such title and for the
<PAGE>
assignment and collection of any such award.
The Premises, Personal Property, Names, Records and Appurtenant
Property are referred to herein singularly or collectively as the "Property" or
"Properties".
32. PURCHASE PRICE.
(a) The Closing for each Property will be conducted in phases
as each Property is improved with Improvements in accordance with the terms of
this Agreement. The purchase price for each Property (the "Purchase Price")
shall be an amount equal to the Capitalized Value (as hereinafter defined) for
such Property, subject to the closing adjustments and prorations described in
Paragraph 9.
(b) (i) The term "Capitalized Value" means, with respect to a
Property, an amount determined after Leasing Stabilization (as hereinafter
defined) for such Property having been achieved, by dividing (a) projected Net
Operating Income (as hereinafter defined) for each Property for the twelve (12)
month period succeeding the proposed Closing Date (as hereinafter defined) for
the applicable Property, by (b) the Applicable Cap Rate (as hereinafter
defined).
(ii) The term "Net Operating Income" means, with
respect to a Property, the sum of (a) Gross Cash Receipts (as hereinafter
defined) for such Property, less (b) the Operating Expenses (as hereinafter
defined) for such Property.
(iii) The term "Gross Cash Receipts" means all
projected revenues derived from Leases (as hereinafter defined)
<PAGE>
for such Property determined on an accrual basis for the twelve (12) month
period succeeding the proposed Closing Date for such Property, including from
(1) rental of space at such Property, (2) parking facilities at such Property,
(3) concessions, (4) other miscellaneous operating sources, and (5) rental
interruption insurance, if any, and shall not include deposits until the same
are forfeited by the person making such deposits or advance rentals until such
time as they are earned by Seller. Gross Cash Receipts shall not include
insurance loss proceeds (except for any proceeds from rental interruption
insurance) or any award or payment made by any governmental authority in
connection with the exercise of any right of eminent domain or any proceeds from
financing, sale, exchange or other disposition of such Property.
(iv) The term "Operating Expenses" means, any and
all projected costs and expenses of operation and management of such Property
determined on an accrual basis for the twelve (12) month period succeeding the
proposed Closing Date for such Property, excluding any costs incurred as a
result of environmental testing and/or remediation, depreciation and other
non-cash expenditures, and including real estate taxes, insurance,
administrative and other management fees paid to third parties, maintenance and
repairs, incurred in connection with such Property and any and all other
expenses which under generally accepted accounting principles are regarded as
expenses of the Property as set forth in the Approved Project Pro-Forma
<PAGE>
(as hereinafter defined).
(v) The "Applicable Cap Rate" shall be determined
by first establishing the Cost Cap (as hereinafter defined) and then selecting
the corresponding Applicable Cap Rate based on the following schedule:
Cost Cap: Applicable Cap Rate:
10.6% and below 10.1%
greater than 10.6% to 11% 10.2%
greater than 11% to 11.5% 10.3%
greater than 11.5% 10.4%
(vi) The "Cost Cap" with respect to a Property
shall be determined once Leasing Stabilization has been achieved for such
Property by dividing (a) the projected Net Operating Income for such Property
for the twelve (12) month period succeeding the proposed Closing Date, by (b)
the Project Costs (as hereinafter defined) for such Property.
(vii) The term "Project Costs" means an amount
equal to the sum of, without duplication, (1) all Hard Costs (as hereinafter
defined), (2) all Soft Costs (as hereinafter defined) and (3) an amount equal to
the product of (a) Land Value (as hereinafter defined) and (b) the number of
acres contained in the Property upon which the particular Improvements are being
constructed.
(viii) The term "Soft Costs" means all costs
incurred in connection with the construction of Improvements and initial leasing
of a particular Property which are not properly categorized as Hard Costs or
Operating Expenses as more particularly set forth in the Approved Project
Pro-Forma (as
<PAGE>
hereinafter defined) and shall include, (1) construction period interest, (2)
lease brokerage commissions, (3) commitment fees for construction financing, (4)
title insurance, (5) surveys (including the "as-built" survey required by the
terms of Paragraph 4(f)) and plans, (6) appraisals, (7) permits, licenses and
temporary and permanent certificates of occupancy, (8) professional fees,
including architects, engineers, accountants and attorneys, (9) insurance,
including fire, extended coverage and all risk, (10) real estate taxes and
assessments, water rates, sewer charges and utility charges and (11) a
developer's fee in the amount of seven (7%) percent of the Hard Costs and Soft
Costs for such Property. Soft Costs shall not include any costs incurred as a
result of environmental testing and/or remediation.
(ix) The term "Hard Costs" means the costs and
expenses in respect of supplying goods, services, materials, labor (including
fringe benefits), equipment and fixtures for and in connection with the
construction of Improvements on a particular Property, including overhead equal
to the Applicable Overhead Percentage (as hereinafter defined) of Hard Costs and
profit equal to the Applicable Profit Percentage (as hereinafter defined) of
Hard Costs. The "Applicable Overhead Percentage" and "Applicable Profit
Percentage" shall be determined by first establishing the Hard Costs incurred
directly by McGarvey Construction Co., Inc. and the Hard Costs incurred by all
subcontractors for a particular Property and converting same to a
<PAGE>
percentage based upon the following fraction:
McGarvey Construction Co., Inc. Hard Costs = the Percentage
McGarvey Construction Co., Inc. Hard Costs
plus all third party Subcontractor costs
and then selecting the corresponding Applicable Overhead Percentage and
Applicable Profit Percentage based on the following schedule:
Applicable Applicable
Overhead Profit
Percentage Percentage Percentage
40% or greater 10.0% 10.0%
greater than 30% but
less than 40% 7.5% 7.5%
30% or less 5.0% 5.0%
(x) The term "Land Value" shall initially mean an
amount equal to Eighty-Five Thousand ($85,000.00) Dollars per acre. On the first
anniversary of the date of this Agreement and on each anniversary thereafter,
the Land Value shall be the greater of (A) Eighty-Five Thousand ($85,000.00)
Dollars per acre, or (B) a sum equal to Eighty-Five Thousand ($85,000.00)
Dollars per acre and that percentage of said amount as is equal to the percent
of increase, if any, in the Consumer Price Index for All Urban Consumers
(revised CPI-U) New York - Northeastern New Jersey, All Items revised 1982-1984
equals 100 published by the Bureau of Labor Statistics, U.S. Department of Labor
<PAGE>
(hereinafter called the "Index"), as of the date of this Agreement over the said
Index as of the anniversary of the date of this Agreement immediately preceding
the date of receipt of the Approved Project Pro-Forma for a particular Property;
provided, however, that in no event shall the Land Value be greater than Ninety
Thousand ($90,000.00) Dollars per acre (the "Land Value Limit"). Notwithstanding
the foregoing, the Land Value Limit shall not be applicable to Block 3500, Lot
49, Moorestown, New Jersey. In the event the Index hereinabove referred to
ceases to incorporate a significant number of the items set forth therein as of
the date hereof, or if a substantial change occurred in the manner of computing
such Index, then the Index shall be deemed to be the figure that would have
resulted had no change occurred in the manner of computing such Index. In the
event the Index (or a successor or substitute index) becomes unavailable, a
reliable governmental or other nonpartisan publication evaluating the
information theretofore used in determining the Index shall be used in lieu of
such Index. In the event of any dispute between the parties as to the manner of
computing any adjustment in the Land Value, or as to the Index to be used, or as
to any other matter arising under this Paragraph 2, such dispute shall be
resolved by arbitration as provided in Subparagraph (c) below. Purchaser shall
have the right to audit Seller's books and records to verify Seller's
calculation of Project Costs. Upon Purchaser's request, Seller shall promptly
deliver to Purchaser copies of relevant backup
<PAGE>
materials (including, but not limited to, contracts, correspondence and paid
invoices) reasonably required by Purchaser.
(c) Either party may at any time request arbitration for
determining the Hard Costs, Soft Costs, Applicable Overhead Percentage,
Applicable Profit Percentage, the Land Value, Index to be used and/or the
Applicable Cap Rate for a particular Property. The party requesting arbitration
shall do so by giving notice to that effect to the other party, specifying in
said notice the nature of the dispute, and said dispute shall be determined in
Trenton, New Jersey, by a panel of three arbitrators, in accordance with the
rules when obtaining of the American Arbitration Association (or any
organization which is the successor thereto) (the "AAA"). Each party shall,
within ten (10) days after the request for arbitration, each choose one
arbitrator and the two (2) arbitrators shall, within ten (10) days after
appointment, choose a third arbitrator. If the two (2) arbitrators chosen by
Seller and Purchaser do not agree upon a third (3rd) arbitrator within the time
provided, the third (3rd) arbitrator shall be appointed by the AAA. The award in
such arbitration may be enforced on the application of either party by the order
of judgment of a court of competent jurisdiction. The fees and expenses of any
arbitration shall be borne by the parties equally, but each party shall bear the
expense of its own attorneys and experts and the additional expenses of
presenting its own proof.
<PAGE>
(d) The Purchase Price for a Property shall be payable at the
Closing of each Property by immediately available funds in accordance with
wiring instructions of Seller.
(e) Notwithstanding anything to the contrary contained in this
Agreement, the Applicable Cap Rate for 41 Twosome Drive (Flex XX) and 915 North
Lenola Road (Flex XXVI) shall be 9.8%.
33. DEPOSIT.
(a) Upon achieving Leasing Stabilization for a particular
Property, Purchaser shall deliver to Escrow Agent (as hereinafter defined in
Paragraph 3.(b) hereof) an irrevocable letter of credit in substantially the
form of the letter of credit annexed hereto as Schedule "E" (the "Letter of
Credit") in the sum of five (5%) percent of the projected Purchase Price for
such Property.
(b) The Letter of Credit shall be deposited with Archer &
Greiner, Esqs., attorneys for Seller ("Escrow Agent"), and shall be held by
Escrow Agent in accordance with the provisions of Paragraph 24 hereof (unless
otherwise stated), subject to the following terms:
(i) At Closing of the particular Property
hereunder, the Letter of Credit shall be delivered to Purchaser;
(ii) If this Agreement is terminated pursuant to
its terms except for Purchaser's default, the Letter of Credit shall be
delivered immediately to Purchaser without application of Paragraphs 24(d)-(h);
(iii) If this Agreement is terminated due to
<PAGE>
Purchaser's default, the Letter of Credit shall be delivered immediately to
Seller as liquidated damages pursuant to Paragraph 18 hereof; and
(iv) If this Agreement is terminated by Purchaser
for any other reason, including due to Seller's default, the Letter of Credit
shall be delivered to Purchaser.
34. CONSTRUCTION OF IMPROVEMENTS.
(a) Simultaneously with the execution and delivery of this
Agreement, Purchaser has entered into a certain Agreement of Sale with Seller
and certain affiliates of Seller (the "Agreement of Sale") relating to certain
property in the vicinity of a portion of the Properties (the "Adjacent
Properties"), more particularly described on Schedule "F" annexed hereto and
made a part hereof. As an inducement for Purchaser to execute and deliver this
Agreement, Seller covenants and agrees, that from and after the date hereof, at
anytime when the Adjacent Properties Leasing Threshold (as hereinafter defined)
is not satisfied, Seller shall not commence construction of any Improvements on
the Properties or any portion thereof provided, however, that Seller shall have
the right to complete any construction commenced in accordance herewith. Upon
breach of the aforesaid covenant by Seller, Purchaser shall have all remedies
given to it at law and in equity, including, the right to obtain injunctive
relief and/or to commence and prosecute an action for damages. "Adjacent
Properties Leasing Threshold" means, with respect to the Adjacent Properties,
leases for ninety
<PAGE>
(90%) percent of the aggregate Floor Area (as hereinafter defined) therein have
been executed and are in full force and effect (without landlord having declared
a default pursuant to such leases), the tenants thereof shall have accepted
delivery of possession of their respective premises and the security deposit, if
any, and at least one (1) months rent has been paid by each such tenant. "Floor
Area" means the floor area stated in square feet bounded by the exterior faces
of the exterior walls of a particular building. Any reference to Floor Area of a
building shall mean the floor areas of all levels or stories of such building,
excluding any roof, any interior basement level, any mechanical room, enclosed
or interior truck dock, interior common areas and areas used by the landlord for
storage, for housing meters and/or other equipment or for other purposes.
(b) At such times as the Adjacent Properties Leasing Threshold
is satisfied and Seller shall desire to construct Improvements on a Property, it
shall so notify Purchaser or its successors and/or assigns (the "Project
Commencement Notice"). In such event, Seller shall prepare a project pro-forma
budget for development of the particular Property (the "Project Pro-Forma")
generally in the form annexed hereto as Schedule "D" and made a part hereof and
deliver same to Purchaser or its successors and/or assigns within thirty (30)
days of the Project Commencement Notice. The Project Pro-Forma shall set forth
the estimate of all Project Costs of developing and constructing Improvements on
the particular Property, including, all Hard
<PAGE>
Costs; all Soft Costs; the Land Value; the time for commencement, completion and
rent-up; all details of the financing and equity funds required for the project;
the cost of tenant improvements; the percentage of office Floor Area and
warehouse Floor Area within all proposed tenant spaces; and anticipated lease
terms. Upon receipt of the Project Pro-Forma for a particular Property,
Purchaser shall have ten (10) days to approve or disapprove the Project
Pro-Forma. If Purchaser disapproves the Project Pro-Forma, it shall so notify
Seller, which notice shall specify the items to which Purchaser does not
approve. Seller shall revise the Project Pro-Forma in accordance with any
reasonable requirements of Purchaser and resubmit same to Purchaser for
Purchaser's approval within ten (10) days after receipt of Purchaser's notice of
disapproval. The revisions and resubmissions shall continue until Purchaser
shall have approved the Project Pro-Forma (the "Approved Project Pro-Forma").
(c) Within sixty (60) days after Purchaser approves the
Project Pro-Forma, Seller shall prepare and furnish to Purchaser complete
architectural drawings and specifications (the "Plans and Specifications") for
the construction of Improvements on the Property. The Plans and Specifications
shall be prepared by a licensed architect or engineer retained by Seller.
Purchaser agrees to review the Plans and Specifications and in each case to
approve same or to state what changes, if any, Purchaser requires therein within
thirty (30) days after receipt thereof. If Purchaser requires any changes,
Seller shall cause
<PAGE>
the Plans and Specifications to be revised in accordance with any reasonable
requirements of Purchaser and to resubmit same to Purchaser for Purchaser's
review within fifteen (15) days after receipt of Purchaser's changes. The
revisions and resubmissions shall continue until Purchaser shall have approved
the Plans and Specifications (said approved Plans and Specifications being
hereinafter called the "Approved Plans and Specifications"). Purchaser's
approval of the Plans and Specifications shall not constitute an opinion or
agreement by Purchaser that the Improvements are structurally sufficient or that
the Approved Plans and Specifications are in compliance with law (it being
agreed that such sufficiency and compliance are solely Seller's responsibility).
Seller shall provide Purchaser with two (2) sets of the Approved Plans and
Specifications and Seller and Purchaser shall execute counterparts thereof. The
Approved Plans and Specifications shall be final and shall not be changed by
Seller without the prior consent of Purchaser.
(d) Seller covenants and agrees that upon approval of the
Plans and Specifications, it shall, commence promptly and with due diligence
proceed to construct the Improvements on the Property in accordance with the
Approved Plans and Specifications, including, without limitation, utility lines,
drainage, lighting facilities, grading and paving, landscaping, approaches,
entrances, exits, ramps, sidewalks, roadways, curb cuts, loading areas,
platforms, service roads and all buildings required to be constructed pursuant
to the Approved Plans and
<PAGE>
Specifications. The construction work shall be done in a first class, good and
workmanlike manner and in compliance with all applicable laws, orders and
regulations of federal, state, county and municipal authorities having
jurisdiction. Seller, at its sole cost and expense, shall obtain or cause to be
obtained all building permits, licenses, temporary and permanent certificates of
occupancy and other governmental approvals which may be required to permit the
construction of the Improvements in accordance with the Approved Plans and
Specifications and the use or occupancy thereof.
(e) Purchaser may, on reasonable prior notice to Seller, visit
the job site to inspect the progress and performance of the work and the
materials being incorporated into the Improvements.
(f) Within ten (10) days prior to Closing but not later than
thirty (30) days after Substantial Completion of construction of the
Improvements on a Property, Seller shall, at its sole cost, deliver to Purchaser
an accurate "as built" survey of the Improvements certified to Purchaser and its
designees by a duly licensed surveyor including the information set forth on
Schedule "G", together with three (3) sets of "as built" plans of the
Improvements, including, without limitation, architectural and mechanical plans.
(g) Seller shall, at its own expense, maintain or cause to be
maintained in force a policy or policies of insurance written by one or more
responsible insurance carriers acceptably
<PAGE>
rated by national rating organizations insuring against liability for bodily
injury, death and property damage of any person or persons in connection with
construction work to be performed pursuant to this Agreement, with minimum
limits as set forth below:
(A) Worker's Compensation: Statutory
Limits.
(B) Employer's Liability: $100,000.00.
(C) Comprehensive General Liability
covering the following:
(1) Bodily injury, death and
property damage having a
combined single limit of
liability of not less than
Two Million ($2,000,000.00)
Dollars;
(2) Owner's Protective Liability:
$1,000,000.00 per occurrence;
(3) Products Completed Operations
Coverage: (to be kept in
effect for two (2) years after
completion);
(4) "XCU" Hazard Endorsement, if
applicable;
(5) "Broad Form" Property Damage
Endorsement;
(6) "Personal Injury" Endorsement;
(7) Contractual Liability
Endorsement. Such policy or policies shall provide, among other things, that the
insurer(s) specifically recognize and insure the obligations undertaken by
Seller pursuant to this Agreement and shall name Purchaser as an additional
insured. Prior to commencement of any construction, Seller shall deliver a
certificate of insurance
<PAGE>
evidencing the existence in force of such policy or policies of insurance. Such
certificate shall provide that such insurance will not be canceled or materially
amended unless twenty (20) days prior written notice is given to Purchaser.
(h) Seller covenants and agrees, at its sole cost and expense,
to promptly make, or cause to be made, all repairs and replacements to the
applicable work arising from defective labor and/or materials during the period
commencing on the later of (1) final completion of such Improvements and (2) the
Closing Date of a particular Property, and terminating on the date which is one
(1) year therefrom.
(i) Seller shall give Purchaser at least sixty (60) days prior
notice of the date of Substantial Completion (the "Substantial Completion
Notice") for a particular Property.
(j) Seller has advised Purchaser that it has commenced
construction of 2 buildings on a portion of the Property known as 41 Twosome
Drive and 915 North Lenola Road. Within thirty (30) days from the date of this
Agreement, Seller shall furnish Purchaser with the Project Pro-Forma and the
Plans and Specifications for such Properties. Upon receipt of such Project
Pro-Forma and Plans and Specifications, Purchaser shall have ten (10) days to
approve or disapprove. If Purchaser disapproves, it shall so notify Seller,
which notice shall specify the items to which Purchaser does not approve. Seller
shall use its best efforts to revise the Project Pro-Forma and/or Plans and
Specifications, as the case may be, in accordance with any
<PAGE>
reasonable requirements of Purchaser and resubmit same to Purchaser for
Purchaser's approval within ten (10) days after receipt of Purchaser's notice of
disapproval. The revisions and resubmissions shall continue until Purchaser
shall have approved the Project Pro-Forma and Plans and Specifications for such
Properties. Notwithstanding the foregoing, Purchaser agrees not to unreasonably
withhold or delay its approval if the Plans and Specifications for such
Properties are the same or substantially similar to the properties commonly
known as 30 Twosome Drive, 40 Twosome Drive and 50 Twosome Drive. In addition,
Purchaser shall not unreasonably withhold or delay its consent to the Project
Pro-Forma for such Properties, if same is generally consistent with the project
pro-forma for 30 Twosome Drive, 40 Twosome Drive and 50 Twosome Drive and in the
form annexed hereto as Schedule "D".
35. TITLE.
(a) Seller shall convey title to each Property which it owns
and Purchaser shall accept Marketable Title (as hereinafter defined), subject
only to the encumbrances set forth on Schedule "H" ("Permitted Encumbrances").
Marketable Title shall mean that fee title to each of the Properties is vested
in Seller and shall be insured as such by a title company selected by Purchaser
(herein referred to as the "Title Company") at standard rates; and that
Purchaser shall not incur any damage, cost or expense resulting from any
encroachment or overlap affecting any of the Properties. Title Company shall
certify
<PAGE>
that Seller has the right, authority and power to enter into and to perform its
obligations hereunder. The legal description in the Binder (as hereinafter
defined) and in the Deed (as hereinafter defined) shall be in accordance with
current surveys showing the completed Improvements on a particular Property
satisfactory to Title Company and Purchaser.
(b) Upon receipt of the Approved Project Pro-Forma, Purchaser,
at its cost and expense, shall order a title insurance binder for the applicable
Property (herein referred to as the "Binder") and prior to the expiration of the
Due Diligence Period (as hereinafter defined) shall deliver to Seller's attorney
notice of any objections to title which are not Permitted Encumbrances. After
the execution hereof, without Purchaser's prior consent, which consent shall not
be unreasonably withheld or delayed, no further liens, encumbrances, easements
or restrictions shall be created or filed ("Subsequent Encumbrances") on or with
respect to any of the Properties except for construction mortgages the proceeds
of which are used for construction of Improvements on a particular Property.
Each Binder, at the request of Purchaser, shall contain the following
endorsements so that at Closing, Title Company will issue an Owner's Policy of
Title Insurance (American Land Title Association Owner's Policy - 1992 or
equivalent, in Purchaser's sole judgment), in the full amount of the Purchase
Price for such Property (the "Title Policy" or "Title Policies"):
(i) a zoning endorsement certifying that the
<PAGE>
insured Property is not subject to any ordinance, regulation or restriction
which in any way would prohibit or restrict the construction, maintenance and/or
use of the insured Property for its present use;
(ii) an endorsement insuring contiguity between or
among all of the tracts or parcels of land comprising the insured
Property;
(iii) an endorsement deleting any coverage
exclusions with respect to creditor's rights; and
(iv) an endorsement affirmatively insuring access
to public streets, highway and roadways.
If any Binder discloses any exceptions, liens, encumbrances, defects or
objections other than the Permitted Encumbrances or if, after execution hereof,
a Subsequent Encumbrance shall be placed against any of the insured Property
(herein collectively called the "Title Defect(s)"), then Purchaser shall have
the right to: (i) require Seller to use best efforts to cure any such Title
Defects (except that Seller shall be obligated to cure any Title Defects which
can be removed solely by the payment of a sum of money); (ii) attempt to cure
any such Title Defect; (iii) accept such title as Seller shall be able to convey
and proceed to Closing without reduction in the Purchase Price; (iv) cause a
title report and title insurance policy to be issued by another title company
without such Title Defect; (v) elect not to purchase such insured Property and
to proceed to purchase the remaining Properties, provided, however, if Seller
gives notice
<PAGE>
to Purchaser within five (5) days after Purchaser's election under this
subparagraph (v), that Seller intends to cure such Title Defects and thereafter
cures such Title Defects in accordance with the terms of this Agreement within
thirty (30) days after receipt of notice from Purchaser of its election under
this subparagraph (v), then such Property shall be included in the sale pursuant
to the terms of this Agreement; and/or (vi) declare this Agreement null and
void, whereupon Purchaser shall be entitled to the return of the Letter of
Credit. The right of Purchaser to terminate this Agreement may be exercised
following the exercise of its other rights hereunder. The time of Closing shall
be extended for a period of up to sixty (60) days, if necessary, to permit
Purchaser to pursue the exercise of its rights hereunder.
(c) If at Closing there are liens or encumbrances against any
of the Properties other than Permitted Encumbrances, Seller may use any portion
of the Purchase Price for such Property to satisfy same, provided Seller, at
Closing, either shall: (1) deliver to Purchaser instruments in recordable form
sufficient to satisfy such liens or encumbrances of record, together with the
cost of recording or filing said instruments; or (2) deposit with Title Company
sufficient monies acceptable to Title Company to insure obtaining and recording
of such satisfactions and the issuance of a Title Policy for such Property to
Purchaser free and clear of any such liens or encumbrances, but only to the
extent that such liens or
<PAGE>
encumbrances are in favor of and held by institutional lenders. The existence of
any such liens or encumbrances shall not be deemed objections or exceptions to
title if Seller shall comply with the foregoing requirements.
(d) If a search of title discloses judgments, bankruptcies or
other returns against other persons or entities having names the same as or
similar to that of Seller or any predecessor in title, Seller, on request, shall
deliver to Title Company, an affidavit showing that such judgments, bankruptcies
or other returns are not against Seller or such predecessors in interest of
Seller.
36. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Seller acknowledges that all representations and
warranties set forth in this Agreement presently are true and accurate and shall
remain true and accurate as of each Closing Date, it being acknowledged that
Purchaser is relying on all of said representations and warranties, and that
each of the representations and warranties set forth in this Agreement is of the
essence hereof, notwithstanding any investigation, review, examination or other
acts or conduct of Purchaser, its agents or representatives relating to or in
connection with, any representation or warranty contained in this Agreement. In
addition to any other representations, warranties and/or covenants contained in
this Agreement, Seller makes the following additional representations,
warranties and/or covenants:
(A) Schedule "A" sets forth the correct and
<PAGE>
full name, form of entity and state of formation (if applicable) of Seller and
Seller is fee owner of the Properties, subject only to the Permitted
Encumbrances;
(B) Seller has delivered to Purchaser true,
correct and complete copies of any applicable certificate of incorporation,
certificate of formation, certificate of limited partnership, trade name
certificate, Shareholders' Agreement, Operating Agreement, Limited Partnership
Agreement, Partnership Agreement, Trust Agreement, By-Laws and all other
governing documents of Seller and each participant of Seller entity or
participant (as applicable) (referred to herein singularly and collectively as
"Organizational Document(s)");
(C) Seller is duly organized, validly existing
and in good standing in its state of formation and is in good standing in New
Jersey, has the right and authority to execute this Agreement and to consummate
this transaction in accordance with the provisions hereof and all persons
executing this Agreement and all other applicable documents on behalf of Seller
have the right, power and authority to do so. Seller shall provide Purchaser
true copies of its authority and appropriate resolutions ("Seller's
Resolutions") ratifying Seller's entering into this Agreement, and authorizing
Seller's sale of the Properties to Purchaser in accordance with the terms of
this Agreement;
(D) Seller owns and shall convey to Purchaser its
fixtures, Personal Property, Names and Records, free and clear of
<PAGE>
all liens and encumbrances, except for the Permitted
Encumbrances;
(E) Seller has no knowledge of and has not
received any notice(s) of, any violations of law, code, ordinances, rule,
regulation or requirements noted in or issued by any governmental department
having authority with respect to any of the Properties, except as otherwise
provided herein. Seller shall deliver to Purchaser true copies of any such
notice(s) received after the date hereof, forthwith on receipt thereof, and each
such notice shall be complied with by Seller, at its sole cost and expense,
prior to Closing, or as otherwise agreed upon between the parties;
(F) Schedule "J" annexed hereto and made a part
hereof contains a complete and accurate statement of all tenants who have
entered into Leases, whether or not they are occupying space at each Property as
of the date of this Agreement ("Tenant(s)"), each of whom has entered into
and/or will be in occupancy pursuant to a written lease agreement (referred to
herein collectively as "Leases" and individually as a "Lease"). As to each
Property, Schedule "J" contains: (i) the complete and accurate name of each
Tenant; (ii) the commencement date of each Lease or the basis for determining
same; (iii) the termination date of each Lease or the basis for determining
same; (iv) the renewal, extension or other rights or options, if any, for
existing, additional and/or other space granted by each Lease, and whether said
rights or options have been exercised; (v) the
<PAGE>
initial base rent being paid or to be paid by each Tenant; (vi) the initial
additional rent being paid or to be paid by each Tenant (itemized); (vii) the
date the last base and additional rent were paid by each Tenant, if any, and the
period covered by said payment; (viii) the amount of the security deposit being
held or to be held by Seller, if any, for each Tenant and the amount of interest
accrued thereon, if interest is required to be paid to any Tenant; (ix) any
future concession, rebate, allowance, free rent period or other considerations;
(x) any right of each Tenant to purchase or acquire an ownership interest in all
or any portion of the Property; and (xi) any breach or default by landlord or
Tenant in accordance with the provisions of subparagraph (I) below. There are no
tenants, licensees, concessionaires or other occupants or persons with the right
of occupancy of any of the Properties except for Tenants set forth on Schedule
"J". At the Closing, Seller will provide Purchaser with an updated Schedule "J"
and the terms "Tenant(s)" and "Lease(s)" shall include those created after the
date hereof, as applicable. At the Closing, Seller will assign to Purchaser, and
Purchaser will assume from Seller, all of Seller's interest in the Leases and
the security deposits, by execution and delivery of the assignment and
assumption of leases ("Assignment and Assumption of Leases") in the form annexed
hereto and made a part hereof as Schedule "K". At the Closing of a Property, the
parties agree to execute letters notifying all Tenants of the sale of such
Property to Purchaser ("Tenant Notice") in the form
<PAGE>
annexed hereto and made a part hereof as Schedule "L";
(G) True and complete copies of the Leases and
all amendments or modifications thereto have been given to
Purchaser for each Tenant listed on Schedule "J". There are no
amendments or modifications to the Leases which have not been
provided to Purchaser;
(H) The Leases are in full force and effect.
Neither Seller nor, except as set forth on Schedule "J", any Tenant is in breach
or default of its Lease obligations, and to the best of Seller's knowledge,
nothing has occurred which, with the passage of time and/or with the giving of
notice, might result in Seller or any Tenant being in breach or default of its
Lease obligations;
(I) At Closing, all obligations of Seller
pursuant to the Leases with respect to performance of work or installation of
equipment in all respects have been completed, subject to the terms of this
Agreement;
(J) No Tenant is entitled to receive or has been
offered or given any free rent, rent concessions, rebates, allowances or other
considerations which would be effective for any period after the date of this
Agreement, except as set forth in the Leases listed on Schedule "J", and no
Tenant has made a claim for any of the foregoing, except as otherwise herein
provided;
(K) To the best of Seller's knowledge, there are
no claims, offsets or charges asserted by any Tenant against
<PAGE>
rent, security deposit or any other payment to be made by such
Tenant;
(L) No person or entity, other than the aforesaid
Tenants or any future tenant pursuant to a lease entered into in the ordinary
course of business in accordance herewith, has or shall have any right to use,
utilize or occupy any Property or any part thereof, either as a tenant or
otherwise;
(M) Seller shall obtain and deliver to Purchaser,
on or before the Closing, a duly executed estoppel certificate ("Estoppel
Certificate") in the form annexed hereto as Schedule "M" dated not more than
fifteen (15) days prior to Closing, from Tenants of each Property;
(N) Except as otherwise provided herein in
Schedule "N" annexed hereto, there are no brokerage commissions or other fees
due in connection with the rental of any space at any of the Properties. All
brokerage commissions in connection with the leasing of any space in any of the
Properties, whether due prior to Closing or thereafter, on account of the
continued occupancy by any Tenant for the lease term in effect at Closing, shall
be paid by Seller at Closing or allowed as a credit against the Purchase Price
by Seller at Closing (in which event Purchaser shall pay such commissions in
accordance with the provisions of the applicable brokerage agreements). All
brokerage commissions in connection with the leasing of any space in any of the
Properties on account of any unexercised renewal, extension or taking of other
space at the time of Closing shall be paid by
<PAGE>
Purchaser. Each party shall indemnify, defend and hold the other
harmless from and against any and all costs and liabilities
incurred by such party as a result of the falsity of the
aforesaid representation or the breach of the aforesaid
obligation;
(O) At Closing, Seller shall deliver to Purchaser
an assignment (to the extent lawfully assignable) of all of its right, title and
interest in: (i) any existing Certificate of the Board of Fire Underwriters
covering each Property; (ii) any permits or licenses it may have pertaining to
each Property; (iii) all site and building plans and specifications relating to
each Property; and (iv) all Certificates of Occupancy;
(P) All existing guarantees and warranties which
Seller has received from contractors, subcontractors, manufacturers,
materialmen, distributors, seller or others, regarding all or any portion of the
Property are set forth on Schedule "O" attached hereto and made a part hereof
(together with any additional guarantees and warranties relating to the Property
received after the date hereof, being collectively referred to herein as
"Guarantees"). At Closing, each Seller shall assign to Purchaser (to the extent
the Guarantees are assignable) all of its right, title and interest in and to
all Guarantees;
(Q) All service, maintenance, vending,
concession, license, agency or other agreements affecting the
Property or the operation thereof ("Contract(s)") will be in
<PAGE>
force at the Closing and a true and complete list of all Contracts are set forth
on Schedule "P" annexed hereto and made a part hereof. True copies of all
Contracts have been delivered to Purchaser or shall be delivered to Purchaser
within ten (10) days of the date hereof. Any or all such Contracts, upon
Purchaser's request, shall be assigned by Seller to Purchaser at Closing and all
Contracts are cancelable on not more than thirty (30) days' notice. On request
of Purchaser, Seller shall cancel any or all of such Contracts as of the Closing
Date. Between the date hereof and the Closing, Seller shall not renew, extend,
modify or terminate any of said Contracts or enter into any other contract
and/or agreement affecting the Property or the operation thereof without the
consent of Purchaser in each instance first being obtained. No party to any
Contract is in breach or default thereunder, and to Seller's knowledge, nothing
has occurred which with the passage of time and/or with the giving of notice
could constitute a breach or default thereunder;
(R) At the time of Closing there shall not be
any, employment, collective bargaining or union agreements affecting the
Properties or the operation thereof or any deferred income or retirement plans
in effect;
(S) There are no actions, suits, labor disputes,
litigation or proceedings ("Action(s)") pending or, to the knowledge of Seller,
threatened against or affecting Seller or any of the Properties, the
environmental condition thereof or the operation thereof at law or in equity or
before any federal,
<PAGE>
state, municipal or governmental department, commission, board, bureau, agency
or instrumentality, nor does Seller have knowledge of any basis for any such
Action, which, if determined adversely to Seller, in any way would affect the
Property or the operation thereof other than as set forth on Schedule "Q"
annexed hereto and made a part hereof. None of the Actions listed on Schedule
"Q" nor any subsequent Actions will be settled, either prior to or after
Closing, without Purchaser's consent, nor will Seller take any material actions
in connection therewith without first notifying Purchaser;
(T) Seller has not nor prior to Closing shall:
make a general assignment for the benefit of creditors; file a voluntary
petition in bankruptcy; be by any court adjudicated a bankrupt; take the benefit
of any insolvency act; be dissolved or liquidated, voluntarily or involuntarily;
or have a receiver or trustee appointed in any proceedings;
(U) Seller has no knowledge and has received no
notice of any application for any zoning change or pending zoning
ordinance or amendment, which would affect any of the Properties;
(V) The execution, delivery and performance of
this Agreement in accordance with its terms does not violate any contract,
agreement, commitment, order, judgment, decree, law, regulation or ordinance to
which Seller is a party or by which Seller is bound or as to which any of its
assets is subject;
(W) Seller has not entered into any commitment or
any agreement or understanding with any municipality, county,
<PAGE>
state or federal government agency or authority which would require the
installation of any improvements or the incurring of any cost or expense
affecting any of the Properties or otherwise;
(X) Seller has no knowledge of any Federal, State
or local plans to change the highway or road system in the vicinity of any of
the Properties or to restrict or change access from any such highway or road to
any of the Properties or of any pending or threatened condemnation of any of the
Properties or any part thereof or of any plans for improvements which might
result in a special assessment against any of the Properties;
(Y) At Closing, no services, material or work
have been supplied by Seller's contractors, subcontractors or materialmen with
respect to any of the Properties for which payment has not been made in full.
If, subsequent to the Closing Date, any mechanic's or other lien, charge or
order for the payment of money shall be filed against any of the Properties or
against Purchaser or Purchaser's assigns, based upon any act or omission, or
alleged act or omission before or after the Closing Date, of Seller, its agents,
servants or employees, or any contractor, subcontractor or materialmen connected
with the construction and completion by Seller of improvements at any of the
Properties, or repairs made to any of the Properties by or on behalf of Seller
(whether or not such lien, charge or order shall be valid or enforceable as
such), within ten (10) days after notice to Seller of the filing thereof, Seller
shall take such action, by bonding, deposit, payment or otherwise, as will
remove
<PAGE>
or satisfy such lien of record against such Property;
(Z) Seller has provided Purchaser with all
reports and documents set forth on Schedule "R", which are all of the
Environmental Documents (as defined in Paragraph 14.(e)(iv) hereof) in its
possession or under its control related to the physical condition of its
respective Properties. In addition, Seller has provided Purchaser with all books
and records necessary for Purchaser to conduct its due diligence of such
Property;
(AA) Seller has no knowledge of any notices,
suits, investigations or judgments relating to any violations of any laws,
ordinances or regulations affecting any of the Properties, (including, without
limitation, Environmental Laws [as defined in Paragraph 14.(e)(v) hereof]), or
any violations or conditions that may give rise thereto, and has no reason to
believe that any "Governmental Authority" (as defined in Paragraph 14.(e)(vi)
hereof) contemplates the issuance thereof, and there are no outstanding orders,
judgments, injunctions, decrees, directives or writ of any Governmental
Authority against or involving Seller or any of the Properties;
(BB) Except as disclosed on Schedule "S" attached
hereto and made a part hereof:
(1) to the best of Seller's knowledge, there
are no Contaminants (as defined in Paragraph 14.(e)(i) hereof) on, under, at,
emanating from or affecting any of the Properties, except those in compliance
with all applicable Environmental
<PAGE>
Laws;
(2) Seller has not nor to Seller's
knowledge, has any current occupant or any prior owner or occupant, of any
Property received any Notice (as defined in Paragraph 14.(e)(ix) hereof) or
advice from any Governmental Authority or any other third party with respect to
Contaminants on, under, at, emanating from or affecting any of the Properties
and, to Seller's knowledge, no Contaminants have been Discharged (as defined in
Paragraph 14.(e)(ii) hereof) which would allow a Governmental Authority to
demand that a cleanup be undertaken;
(3) no portion of any Property has ever been
used by Seller or, to Seller's knowledge, any former owner or current or former
occupant to generate, manufacture, refine, produce, treat, store, handle,
dispose of, transfer or process Contaminants, whether or not any of those
parties has received Notice or advice from any Governmental Authority or any
other third party with respect thereto in violation of Environmental Laws;
(4) no portion of any Property now is or, to
Seller's knowledge, ever has been used as a Major Facility (as defined in
Paragraph 14.(e)(vii) hereof) and Seller shall not use, nor permit use of any
portion of the Property for that purpose;
(5) Seller has not transported any
Contaminants, nor to Seller's knowledge has any current or former
occupant or former owner transported Contaminants from any
<PAGE>
Property to another location which was not done in compliance
with all applicable Environmental Laws;
(6) no ss. 104(e) informational request has
been received by Seller issued pursuant to CERCLA (as defined in
Paragraph 14.(e)(i) hereof);
(7) to the best of Seller's knowledge, there
is no asbestos or asbestos containing material in any friable
state or otherwise in violation of Environmental Laws on any of
the Properties;
(8) to the best of Seller's knowledge, all
transformers and capacitators containing polychlorinated
biphenyls ("PCBs"), and all "PCB Items", as defined in 40 C.F.R.
ss. 761.3, located on or affecting any Property are identified in
Schedule "T" and are in compliance with all Environmental Laws;
(9) to the best of Seller's knowledge, there
are no above ground storage tanks or Underground Storage Tanks (as defined in
Paragraph 14.(e)(xi) hereof) at any of the Properties, regardless of whether
such tanks are regulated tanks or not;
(10) to the best of Seller's knowledge, all
pre-existing above ground storage tanks and Underground Storage Tanks at all of
the Properties have been removed and their contents disposed of in accordance
with and pursuant to Environmental Laws;
(11) to the best of Seller's knowledge, none
of the Properties has been used as a sanitary landfill facility
<PAGE>
as defined in the Solid Waste Management Act, N.J.S.A. 13:1E-1 et
seq.;
(12) Seller and, to the best of Seller's
knowledge, each occupant of each Property have all environmental certificates,
licenses and permits ("Permit") required to operate the Property and there is no
violation of any 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;
(13) to the best of Seller's knowledge, none
of the Properties are subject to any wetlands regulations, administered by the
United States of America, Army Corps of Engineers, the Environmental Protection
Agency or NJDEP (as defined in Paragraph 14.(e)(viii) hereof);
(14) there are no federal or state liens as
referred to under CERCLA or the Spill Act (as defined in
Paragraph 14.(e)(i) hereof) that have attached to any of the
Properties;
(15) Seller in the past has and does not now
own, operate or control any Major Facility;
(16) Seller has not, nor to the best of
Seller's knowledge has Seller permitted any occupant to engage in
any activity on the Property in violation of Environmental Laws;
(17) all of the Properties are in material
compliance with Environmental Laws; and
(18) to the best of Seller's knowledge,
<PAGE>
thereare no engineering or institutional controls at any of the Properties,
including without limitation, any deed notice, declaration of environmental
restriction, groundwater classification exception area or well restriction area
pursuant to N.J.S.A. ss. 13:1E-56 or N.J.S.A. 58:10B-13.
(b) Purchaser hereby represents, warrants and
covenants the following:
(A) Purchaser is a limited partnership of the
State of Delaware, in good standing, has the right and authority to execute this
Agreement and to consummate this transaction in accordance with the provisions
hereof and all persons executing this Agreement and all other applicable
documents on behalf of Purchaser, has the right, power and authority to do so;
(B) The execution, delivery and performance of
this Agreement in accordance with its terms does not violate any contract,
agreement, commitment, order, judgment, decree, law, regulation or ordinance to
which Purchaser is a party or by which it is bound or as to which any of its
assets is subject; and
(C) Purchaser shall provide Seller true copies of
authorization ("Purchaser's Authorization") authorizing or ratifying Purchaser's
entering into this Agreement and authorizing Purchaser's purchase of all of the
Properties from Seller in accordance with the terms of this Agreement.
(c) In the event that either party knows or learns that any of
the representations contained in this Agreement are false or no longer are true
and accurate, such party forthwith
<PAGE>
shall deliver notice of such fact to the other party, and the other party shall
proceed diligently to cure or remedy such misrepresentations. In the event that
such misrepresentations cannot or shall not be cured within thirty (30) days
following delivery of notice thereof, then the notifying party shall have the
right either (i) to elect, nevertheless, to close title to the Properties in
accordance with the provisions of this Agreement, or (ii) to declare this
Agreement null and void, by notice delivered to the non-curing party, or (iii)
to elect not to purchase the Property affected by such misrepresentation and
proceed with the purchase of the remaining Properties in accordance with the
terms of this Agreement. The termination of this Agreement pursuant to this
Paragraph 6 shall not release the misrepresenting party from any liability it
may otherwise have to the other party by reason thereof.
(d) Whenever in this Paragraph 6, a representation and/or
warranty is made to the knowledge of Seller, knowledge of Seller shall mean the
actual knowledge of William G. Price, Jr. and/or John S. McGarvey, without any
independent investigation other than reviewing the applicable representation
and/or warranty.
(e) The representations and warranties made by Seller in
Paragraphs 6(C), (E), (F), (H), (K), (N), (V), (W), (AA), (AB) and (AC) shall
survive the applicable Closing for the applicable statute of limitations. The
representations and warranties made by Seller in Paragraphs 6(A), (B), (D), (G),
(I), (J), (L), (M),
<PAGE>
(O), (P), (Q), (R), (S), (T), (U), (X), (Y) and (Z) shall survive the applicable
Closing for a period of one (1) year; provided, however, that no claims for
indemnification under Paragraphs 6(A), (B), (D), (G), (I), (J), (L), (M), (O),
(P), (Q), (R), (S), (T), (U), (X), (Y) and (Z) with respect to a breach of any
representation or warranty referred to above in this sentence may be maintained
by Purchaser unless Purchaser shall have delivered notice to Seller specifying
the nature of such claim, which notice shall be delivered on or before the date
which is one (1) year after the applicable Closing Date (the "Survival Date").
Upon the giving of such notice as aforesaid, Purchaser shall have the right to
commence legal proceedings prior or subsequent to the Survival Date for the
enforcement of its rights under this Agreement. The representations and
warranties made by Purchaser in Paragraph 6 shall not survive the applicable
Closing.
37. LEASES AND TENANCIES.
(a) Seller shall be permitted to lease the Properties subject
to and in accordance with the following:
(i) Seller shall interview prospective tenants,
make credit and reference checks of prospective tenants for proposed leases of
five thousand (5,000) square feet or more (and upon request of Purchaser, for
proposed leases of less than five thousand (5,000) square feet) and furnish such
information to Purchaser;
(ii) the proposed tenant shall be a reputable
entity with sufficient financial means in Seller's reasonable
<PAGE>
judgment to perform all of its obligations under the proposed
lease;
(iii) the proposed tenant shall not be a
person or entity (or affiliate of a person or entity) which is a tenant in the
Adjacent Properties, or with whom Purchaser gives notice to Seller that
Purchaser or Purchaser's agent is then, or has been within the prior six (6)
months, negotiating in connection with the rental of space in the Adjacent
Properties, without Purchaser's prior consent, which consent shall not be
unreasonably withheld or delayed;
(iv) all leases shall be written and be in
substantially the form of lease approved by Purchaser;
(v) all leases shall be the result of arms'-
length negotiations, shall provide for "market" rental rates and other market
terms (and shall not contain any terms which would adversely affect Purchaser's
REIT qualification); and
(vi) Seller shall obtain Purchaser's prior written
consent to each lease before executing same.
(b) At Seller's discretion, it may from time to time propose
for Purchaser's approval (which shall not be unreasonably withheld or delayed)
leasing guidelines, which shall state a proposed effective period (not in excess
of one (1) year) for such guidelines (the "Leasing Guidelines") relating to the
leasing of five thousand (5,000) square feet or less of Floor Area in the
Property. Any lease affecting five thousand (5,000) square feet or less of Floor
Area that conforms in all material
<PAGE>
respects with the approved Leasing Guidelines and with the provisions of
Paragraphs 7(a), (i), (ii), (iii), (iv) and (v) will not be subject to
Purchaser's prior written consent. Any Lease submitted to Purchaser for
Purchaser's approval, which shall be accompanied by (x) an officer's certificate
on behalf of Seller stating that said Lease (and proposed Tenant) complies in
all respects with the requirements of Paragraph 7(a) of this Agreement and (y) a
summary of the material terms of such Lease (including the economic terms and
any options) shall be deemed approved if Purchaser shall have not notified
Seller in writing of its disapproval within three (3) business days after Seller
has given Purchaser written notice and complied with the provisions of this
Paragraph 7.
(c) If any claim is made against Purchaser by any Tenant
asserting an offset against rent or otherwise, including any rent over-charges
or failure in construction or to provide services, with respect to any matter
which arose prior to Closing, Seller shall indemnify and hold Purchaser harmless
for all losses, damages and expenses (including, without limitation, reasonable
attorneys' fees and costs) incurred by Purchaser in connection thereof. After
Purchaser shall receive notice of a claim that may give rise to an indemnity
hereunder, Purchaser shall notify Seller; provided, however, the failure to give
any notice shall not relieve Seller from any liability hereunder unless such
failure impairs the right to defend such action. In the event any claim is
brought against Purchaser with respect to
<PAGE>
which Seller may have liability under the indemnity agreement contained in this
Paragraph 7.(c) the claim may, upon written agreement of Seller that they are
obligated to indemnify against the particular claim under the indemnity
agreement contained herein, be settled by Seller with the prior written consent
of Purchaser, which shall not be unreasonably withheld.
(d) Purchaser shall assume the Leases following the applicable
Closing and shall indemnify and hold Seller harmless for all losses, damages and
expenses (including, without limitation, reasonable attorneys' fees and costs)
incurred by Seller arising from any claim by a Tenant in respect to any
obligation to Tenant assumed by Purchaser or any advance rental credited to
Purchaser. After Seller shall receive notice of a claim that may give rise to an
indemnity hereunder, Seller shall notify Purchaser; provided, however, the
failure to give any notice shall not relieve Purchaser from any liability
hereunder unless such failure impairs the right to defend such action. In the
event any claim is brought against Seller with respect to which Purchaser may
have liability under the indemnity agreement contained in this Paragraph 7.(d),
the claim may, upon written agreement of Purchaser that it is obligated to
indemnify against the particular claim under the indemnity contained herein, be
settled by Purchaser with the prior written consent of Seller, which shall not
be unreasonably withheld.
(e) Seller agrees not to apply or return any security deposit
in whole or in part. At the Closing, Seller shall turn
<PAGE>
over to Purchaser all Tenant security deposits plus any interest earned thereon
for the benefit of Tenant together with an updated Schedule "J". Seller shall
indemnify Purchaser for any claims made, suits commenced or judgments entered in
connection with the security deposits for the period through the Closing Date
and Purchaser shall indemnify Seller for any claims made, suits commenced or
judgments entered into in connection with all security deposits for the period
subsequent to the Closing Date.
38. CLOSING.
(a) Each Closing shall occur at 10:00 a.m. at the offices of
Cole, Schotz, Meisel, Forman & Leonard, P.A., Court Plaza North, 25 Main Street,
Hackensack, New Jersey, on the date which is fifteen (15) days after
satisfaction or waiver of all conditions and contingencies set forth herein with
regard to such Property, or at such other date, time and/or place as the parties
may agree upon; provided, however, that if such date shall be a Saturday, Sunday
or legal holiday, then Closing shall take place on the first business date
thereafter (herein referred to as the "Closing" and the "Closing Date"
respectively). Notwithstanding the foregoing, if despite achieving Leasing
Stabilization with respect to a particular Property, such Property is not
Substantially Leased (as hereinafter defined) on or before the date Seller shall
give Purchaser the Substantial Completion Notice, then Seller may, at its
option, by notice to Purchaser given with the Substantial Completion Notice,
elect to extend the date for Closing to a date on or before the date which is
one (1)
<PAGE>
year from the date of achieving Leasing Stabilization (the "Extended Closing
Date"). If Seller provides notice of the Extended Closing Date, then provided
all of the conditions precedent are satisfied, Closing for the particular
Property shall occur on the date which is thirty (30) days after Seller notifies
Purchaser of the proposed Closing Date, but in no event later than one (1) year
from the date of achieving Leasing Stabilization. If Seller fails to give such
notice of the proposed Closing Date, the Closing Date shall be the date which is
one (1) year from the date of achieving Leasing Stabilization. If Seller fails
to give Purchaser notice of the Extended Closing Date in accordance with the
terms of this Paragraph 8(a), then Seller shall be deemed to have waived the
right to extend the Closing. The term "Substantially Leased" shall mean, with
respect to each Property which has been developed with Improvements, (a) leases
complying with the terms and conditions set forth in Paragraph 7 for
substantially all of the Floor Area therein have been executed and are in full
force in effect, and (b) no default by either party to such leases has occurred
and is continuing, or no event has occurred and is continuing which, with the
giving of notice or the passage of time or both, would constitute a default
under such leases.
(b) At Closing, the following shall be executed and/or
delivered:
(i) By Seller:
(A) The Deed [as hereinafter described in
<PAGE>
subparagraph (c)];
(B) Seller's certification that the
representations and warranties set forth in this Agreement are
true and accurate as of the Closing;
(C) Seller's affidavit of title, the form
and substance of which shall be subject to the reasonable
approval of Title Company and Purchaser's attorneys;
(D) Seller's Resolutions;
(E) Bill(s) of Sale and/or assignments if so
requested by Purchaser;
(F) The Assignment and Assumption of Leases
together with schedules of security deposits paid by Tenants and any
applications thereof made by Seller. At Closing, Seller shall pay to Purchaser
by separate certified check or allow as a credit against the Purchase Price, the
aggregate amount of all security deposits held under Leases;
(G) The original Leases and all amendments,
modifications and guarantees thereto, and all brokerage
commission agreements;
(H) The Tenant Notice to Tenants;
(I) The Estoppel Certificates;
(J) Certifications of non-foreign status in
accordance with Internal Revenue Code Section 1445, as amended;
(K) Keys to all doors to, and equipment and
utility rooms located in all of the Properties, which keys shall
be properly tagged for identification;
<PAGE>
(L) An endorsement to all transferable
insurance policies,if any, approved by Purchaser, naming Purchaser as the party
insured, together with the original of each such policy;
(M) As-built plans and specifications in
accordance with the provisions of Paragraph 4 and permanent certificates of
occupancy for each building and improvement comprising a part of the Property;
(N) All original licenses and permits
pertaining to such Property and required for the use or occupancy
thereof together with a duly executed assignment thereof to
Purchaser;
(O) True and complete Records;
(P) All Guarantees and Contracts, together
with a duly executed assignment thereof to Purchaser;
(Q) The Guaranty annexed hereto as Schedule
"U" and made a part hereof;
(R) ISRA Approval (as hereinafter defined in
Paragraph 14.(a) hereof);
(S) Mutually satisfactory closing statement;
(T) Such other items to be provided to
Purchaser pursuant to this Agreement; and
(U) Such other instruments as reasonably may
be required by Purchaser's counsel or the Title Company to
effectuate this transaction.
(ii) By Purchaser:
<PAGE>
(A) The Purchase Price;
(B) The Assignment and Assumption of Leases;
(C) Tenant Notices to Tenants;
(D) Mutually satisfactory closing statement;
(E) Such other items to be provided to
Seller pursuant to this Agreement; and
(F) Such other instruments as reasonably may
be required by Seller's counsel to effectuate this transaction.
(c) Each deed ("Deed") to be delivered at a Closing
shall be a Bargain and Sale Deed with covenants against grantors' acts, in
proper form for recording so as to convey to Purchaser good, marketable and
insurable fee simple title to a particular Property in accordance herewith.
(d) The words "Closing", "title closing", "Closing of title",
"delivery of deed" and words of similar import are used interchangeably in this
Agreement, as the sense of text indicates, to mean the Closing of title for each
Property, whether singly or concurrently with the closing of title of any other
Properties hereunder.
39. CLOSING ADJUSTMENTS.
(a) The following are to be apportioned as of the
Closing Date of each Property:
(i) real property taxes;
(ii) water rates and charges;
(iii) sewer taxes and rents;
(iv) all base rent payments;
<PAGE>
(v) common area and other additional rent
charges, if any;
(vi) fuel oil on hand, determined at Seller's
cost;
(vii) insurance premiums on transferable
policies, if any, approved by Purchaser; and
(viii) annual license, permit and inspection
fees, if any, provided that Seller's rights thereunder (or with respect thereto)
are transferable to Purchaser.
(b) (i) Apportionment of real property taxes, water rates and
charges and sewer taxes and rents shall be made on the basis of the fiscal year
for which assessed solely to the extent actually received by Seller from Tenants
or actually paid or payable by Seller. If the Closing Date shall occur before
any or all of the foregoing are fixed, the apportionment of real property taxes
shall be made on the basis of the tax rate for the preceding year applied to the
latest assessed valuation. After the final real property taxes, water rates and
charges and sewer taxes and rents are fixed, Seller and Purchaser shall make a
recalculation of the apportionment of same, and Seller or Purchaser, as the case
may be, shall make an appropriate payment to the other based on such
recalculation.
(ii) If at the time for the delivery of the Deeds,
any of the Premises or any part of any of them shall be or shall have been
affected by an assessment or assessments (including special and/or added) which
are or may become payable in annual
<PAGE>
installments of which the first installment is then due 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
delivery of the applicable Deed for the affected Premises, shall be deemed to be
due and payable and to be liens upon such Premises affected thereby and shall be
paid and discharged by Seller upon the delivery of the Deed for the Premises. If
any assessment with respect to any Premises is unconfirmed at the time of
Closing, or if subsequent to Closing any assessment, including special or added,
is determined to be incorrect, then, immediately after the amount of the
assessment has been established, or the confirmed assessment corrected as a
result of a prior error, Seller shall make an appropriate payment to Purchaser
within ten (10) days of the tax assessor's calculation of the assessment.
Notwithstanding the foregoing, if Tenants of any Premises are obligated under a
written lease for the payment of the entire assessment (confirmed and/or
unconfirmed), then with respect to such assessment, Purchaser shall seek payment
from the Tenants, and any assessment not otherwise the obligation of the Tenants
shall be the obligation of Seller. Seller shall indemnify and hold Purchaser
harmless from and against all costs and expenses, including reasonable attorneys
fees, incurred by Purchaser in connection with Seller's failure to perform
Seller's obligation under this Paragraph 9(b)(ii).
(c) If there shall be any water meters on any of the
<PAGE>
Properties (other than meters measuring water consumption costs which are the
obligation of Tenants to pay), Seller shall furnish readings to a date not more
than ten (10) days prior to the Closing Date, and the unfixed water rates and
charges and sewer taxes and rents, if any, based thereon for the intervening
time, shall be apportioned on the basis of such last readings.
(d) The amount of unpaid taxes, assessments, water charges and
sewer rents which Seller is obligated to pay and discharge, with interest and
penalties thereon to the fifth (5th) day after the Closing Date, at the option
of Seller, may be allowed to Purchaser out of the Purchase Price, provided that
official bills therefor with interest and penalties thereon are furnished by
Seller at the Closing.
(e) If any refund of real property taxes, water rates and
charges or sewer taxes and rents is made after the Closing Date for a period
prior to the Closing Date, the same shall be applied first to the costs incurred
in obtaining same and second to the refunds due to Tenants by reason of the
provisions of their respective Leases. The balance, if any, of such refund shall
be paid to Seller (for the period prior to the Closing Date) and Purchaser (for
the period commencing with the Closing Date).
(f) To the extent that Seller receives rent payments after the
Closing Date for any period from and after the Closing Date, the same shall be
held in trust and immediately paid to Purchaser.
<PAGE>
(g) All rent payments received by Seller or Purchaser after
Closing shall be applied firstly against out-of-pocket costs of collection, then
to rents due and owing by such Tenant for the periods from and after Closing and
thereafter against rents due and owing prior to Closing in inverse order of due
date.
(h) To the extent that rent payments are received by Purchaser
after the Closing Date with respect to a period prior to the Closing Date, the
amount of such rents for the period ending on the date preceding the Closing
Date, shall be paid to Seller by Purchaser as and if received after the Closing
Date, but not more often than once a month.
(i) All realty transfer fees and charges (other than recording
fees for the Deeds) shall be paid by Seller at Closing.
40. RISK OF LOSS.
(a) Seller assumes the risk of loss or damage to all of the
Properties beyond ordinary wear and tear until delivery of a Deed for the
applicable Property to Purchaser and shall notify Purchaser forthwith upon the
occurrence of any such casualty ("Casualty Notice"). In the event of any
casualty in which the Casualty Threshold (as hereinafter defined) is not
established, or in the event of a casualty in which the Casualty Threshold is
established and if Purchaser elects to complete the purchase of the particular
Property hereunder, Seller shall restore and repair the damaged Property to its
condition immediately preceding such casualty and in accordance with its
obligations
<PAGE>
pursuant to Leases, and without a change in the Purchase Price
for the particular Property.
(b) If, prior to the Closing Date, any Property or Properties
shall be damaged by fire or other casualty and the estimated cost of repair
and/or restoration shall exceed twenty-five (25%) percent of the Purchase Price
of such damaged Property herein or reasonably shall be estimated to require more
than one hundred eighty (180) days to repair or restore (collectively, "Casualty
Threshold"), Purchaser may, by notice to Seller, elect either (i) not to
purchase such Property, or (ii) to terminate this Agreement. If this Agreement
is so terminated the Letter of Credit forthwith shall be returned to Purchaser.
Purchaser shall notify Seller of its decision within forty-five (45) days of
receipt of the Casualty Notice, which shall include the amount of insurance
coverage, the amount of insurance received, if any, the reasonably estimated
cost of repairs and the reasonably estimated time in which to complete said
repairs, and the applicable Closing shall be postponed accordingly.
(c) Notwithstanding the foregoing, any proceeds of loss of
rent insurance for a casualty occurring prior to the Closing Date, whether
received prior to or following the Closing, shall be apportioned as of the
Closing Date.
41. CONDEMNATION. In the event that, prior to Closing, all or any
portion of any or all of the Properties shall be condemned or taken as the
result of the exercise of the power of eminent domain, or by deed in lieu
thereof (collectively, a "Taking"), or
<PAGE>
if such proceedings shall have commenced or shall be threatened, Seller promptly
shall notify Purchaser ("Taking Notice"). Purchaser, in its sole judgment, shall
notify Seller within sixty (60) days following receipt of the Taking Notice,
that: (1) the remaining portion of a specific Property is not suitable or
economically viable for its intended use of the affected Property, in which
event Purchaser may terminate this Agreement with respect to such Property; or
(2) the remaining portion of the affected Property is suitable and economically
viable for its intended use, in which event Closing shall proceed and Purchaser
and Seller shall have the right to participate jointly in the condemnation
proceedings and the proceeds thereof shall belong to Seller, subject to the
rights of mortgage holders, but Purchaser shall be entitled to a credit against
the Purchase Price in an amount equal to said proceeds, unless such condemnation
proceedings shall be pending on the Closing Date, in which event there shall not
be any credit and at Closing, Seller shall assign all its right, title and
interest in and to said proceedings and award to Purchaser. Notwithstanding
anything to the contrary contained herein, if there is a Taking of two (2) or
more Properties, Purchaser may, upon notice to Seller, terminate this Agreement
without further liability hereunder on the part of either party, except that the
Letter of Credit forthwith shall be returned to Purchaser.
42. APPROVALS FOR TRANSFER. In the event that any
Governmental Authority shall have an ordinance, law, rule,
<PAGE>
regulation or other requirement requiring a new Certificate of Occupancy or
other governmental authorization to be issued in connection with the transfer of
title to any of the Properties, or in the event that on the Closing Date there
is any such requirement, then and in any of such events, Seller shall use its
best efforts, at its sole cost and expense, to obtain and deliver to Purchaser,
the Certificate of Occupancy or other governmental authorization.
43. DUE DILIGENCE PERIOD.
(a) Commencing on the date of approval of the Approved Project
Pro-Forma for a particular Property through the period ending forty-five (45)
days thereafter (the "Due Diligence Period"), Purchaser may perform, or cause to
be performed, tests, investigations and studies of or related to any or all of
the Properties which are the subject of the Approved Project Pro-Forma,
including, but not limited to, soil tests and borings, ground water tests and
investigations, percolation tests, surveys, architectural, engineering,
subdivision, environmental, access, development studies and such other tests,
investigations or studies as Purchaser, in its sole discretion, determines is
necessary or desirable in connection with such Properties and may inspect the
physical (including environmental) and financial condition of any or all of the
Properties which are the subject of the Approved Project Pro-Forma, including
but not limited to the Leases, Contracts, engineering and environmental reports,
development approval agreements, permits and approvals.
<PAGE>
Purchaser shall repair and restore any portion of the surface of any of the
Properties disturbed by Purchaser, its agents, representatives 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.
(b) During the Due Diligence Period, Purchaser, its agents,
representatives and contractors, shall have unlimited access to all of the
Properties which are the subject of the Approved Project Pro-Forma 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 this Paragraph. 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. In addition, Seller will deliver to
Purchaser promptly after request, true and complete copies of all test borings,
Environmental Documents, surveys, title materials and engineering and
architectural data and the like relating to any such Properties that are in
Seller's possession or under its control. In the event any additional materials
or information comes within Seller's possession or
<PAGE>
control after the date of this Agreement, Seller promptly shall submit true and
complete copies of the same to Purchaser. Seller shall notify Purchaser of any
dangerous conditions on any of the Properties, 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, representatives or
contractors.
(c) Purchaser shall obtain, or cause its contractors, agents
and representatives to obtain, liability insurance in an amount equal to One
Million ($1,000,000.00) Dollars on a per occurrence and aggregate basis on
account of personal injury to one or more persons and property damage with
respect to Purchaser's activities and entry onto the Properties. The policy
shall name Seller as additional insureds. In addition, Purchaser agrees to
indemnify and hold Seller harmless from any damage or injury to persons or
property arising out of or in connection with Purchaser or its contractors,
agents or representatives entering upon the Properties.
(d) Purchaser may terminate this Agreement with respect to a
Property set forth in the Approved Project Pro-Forma for any reason or for no
reason by notice to Seller given within the Due Diligence Period. In the event
Purchaser terminates this Agreement with respect to such Property during the Due
Diligence Period, this Agreement shall be null and void with respect to such
Property, copies of any reports or studies prepared by third
<PAGE>
parties as part of Purchaser's investigations during the Due Diligence Period
with respect to such Property (if expressly permitted by such third party),
shall be delivered to Seller (except, if this Agreement is terminated as a
result of Seller's breach hereof). In the event Purchaser does not terminate
this Agreement by the end of the Due Diligence Period, Purchaser shall be deemed
to have elected not to terminate this Agreement with respect to such Property.
44. ENVIRONMENTAL PROVISIONS.
(a) Notwithstanding anything to the contrary contained in this
Agreement, the obligation of Purchaser to pay the Purchase Price and otherwise
proceed to a particular Closing shall be subject to the condition as to each
Property, that Seller obtain from the Element, (as hereinafter defined in
Paragraph 14.(e)(iii) hereof) pursuant to ISRA (as hereinafter defined in
Paragraph 14.(e)(i) hereof), and deliver to Purchaser, at least five (5) days
prior to Closing (the "ISRA Compliance Date"), together with all submissions
upon which any one or more of the following is based, either:
(i) a Letter of Non-Applicability;
(ii) a de minimis quantity exemption;
(iii) an unconditional approval of the applicable
Seller's Negative Declaration; or
(iv) an unconditional No Further Action Letter;
(collectively the "ISRA Approval") for which the applicable
Seller shall apply promptly. In no event shall an ISRA Approval
<PAGE>
involve any engineering or institutional controls, including without limitation,
capping, deed notice, declaration of environmental restriction or other
institutional control notice pursuant to P.L. 1993 c. 139, a groundwater
classification exception area or a well restriction area. If the requirements of
this Paragraph 14.(a) are not satisfied on or before the ISRA Compliance Date,
Purchaser thereafter shall have the right, by notice to Seller, to extend the
ISRA Compliance Date, to elect not to purchase such Property or to terminate
this Agreement, in which latter event this Agreement shall be rendered null and
void and of no further force or effect, the Letter of Credit forthwith shall be
returned to Purchaser and neither party shall have further liability or
obligation to the other under or by virtue of this Agreement.
(b) Contemporaneously with the execution of this Agreement,
and subsequently promptly upon receipt by Seller or its 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 such Property to the extent in Seller's possession or control; (ii) all
Environmental Documents concerning such Property generated by or on behalf of
Seller, whether currently or hereafter existing; (iii) all Environmental
Documents concerning such Property generated by or on behalf of current or
future occupants of such Property to the extent in Seller's possession or
control, whether currently or hereafter existing; and (iv) a description of all
<PAGE>
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 such Property
and past and present storage of Contaminants above or below ground, on, under,
at, emanating from or affecting any of the Property or its environs.
(c) Seller shall notify Purchaser in advance of all meetings
scheduled between Seller or its representatives and NJDEP, and Purchaser and/or
its 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 any and all claims, liabilities, losses, deficiencies, damages,
interest, penalties and costs, foreseen or unforeseen including, without
limitation, reasonable counsel, engineering and other professional or expert
fees, which Purchaser may incur, by reason of or resulting directly or
indirectly, wholly or partly, from any breach, inaccuracy, incompleteness or
nonfulfillment of any representation, warranty, covenant or agreement herein by
Seller, or by reason of Seller's actions or non-action with regard to Seller's
obligations pursuant to this Paragraph 14.
(e) The following terms shall have the following meanings when
used in this Agreement:
(i) "Contaminants" shall include, without
limitation, any regulated substance, toxic substance, hazardous
<PAGE>
substance, hazardous waste, pollution, pollutant or contaminant,
as defined or referred to in the New Jersey Environmental Rights
Act, N.J.S.A. 2A:35A-1 et seq.; the New Jersey Spill Compensation
and Control Act, N.J.S.A. 58:10-23.11 et seq. (the "Spill Act");
the New Jersey Air Pollution Control Act, N.J.S.A. 26:2C-1 et
seq.; the Hazardous Substances Discharge: Reports and Notices
Act, N.J.S.A. 13:1K-15 et seq.; the Industrial Site Recovery Act,
N.J.S.A. 13:1K-6 et seq. ("ISRA"); the "Tanks Laws" as
hereinafter defined in Paragraph 14.(e)(x) hereof; the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. ss.6901 et
seq. ("RCRA"); the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. ss.9601 et
seq. ("CERCLA"); the Water Pollution and Control Act, 33 U.S.C.
ss.1251 et seq.; together with any amendments thereto, regulations
promulgated thereunder and all substitutions thereof, as well as
words of similar purport or meaning referred to in any other
applicable federal, state, county or municipal environmental
statute, ordinance, 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,
<PAGE>
onto or migrating from or onto any of the Properties, regardless of whether the
result of an intentional or unintentional action or omission.
(iii) "Element" shall mean the Industrial Site
Evaluation Element or its successor of the NJDEP.
(iv) "Environmental Documents" shall mean all
environmental documentation in the possession or under the control of any
Seller(s) concerning any of the Properties, or its environs, including without
limitation, all sampling plans, cleanup plans, preliminary assessment plans and
reports, site investigation plans and reports, remedial investigation plans and
reports, remedial action plans and reports, or the equivalent, sampling results,
sampling result reports, data, diagrams, charts, maps, analysis, conclusions,
quality assurance/quality control documentation, correspondence to or from any
Governmental Authority, submissions to any Governmental Authority and
directives, orders, approvals and disapprovals issued by any Governmental
Authority.
(v) "Environmental Laws" shall mean 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.
(vi) "Governmental Authority" shall mean the
federal, state, county or municipal government, or any
<PAGE>
department, agency, bureau, board, commission, office or other body obtaining
authority therefrom, or created pursuant to any law.
(vii) "Major Facility" is as defined in the Spill
Act.
(viii) "NJDEP" shall mean the New Jersey
Department of Environmental Protection or its successor.
(ix) "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.
(x) "Tank Laws" shall mean the New Jersey
Underground Storage of Hazardous Substances Act, N.J.S.A. 58:10A-
21 et seq., and the federal underground storage tank law
(Subtitle I) of RCRA, together with any amendments thereto,
regulations promulgated thereunder, and all substitutions
thereof, and any successor legislation and regulations.
(xi) "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 in the Tank Laws.
(f) Seller covenants and agrees that between the date hereof
and the Closing Date it shall perform or observe the following:
<PAGE>
(i) Promptly notify Purchaser of, and promptly
deliver to Purchaser, a certified 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 existing on, under, at emanating from or
affecting any of the Properties as of the date of Closing, in violation of
Environmental Laws, regardless of the date of discovery, notwithstanding
anything to the contrary set forth herein. 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 pursuant to P.L. 1993, c.
139, or a groundwater classification exception area or well restriction area.
Any such remediation and associated activities shall be undertaken pursuant to a
right of access agreement reasonably acceptable to Purchaser;
(iii) Contemporaneously with the signing 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.
45. CONDITIONS TO CLOSING.
(a) In addition to other conditions set forth in this
Agreement, Purchaser's obligation to close title to a particular Property is
expressly conditioned upon and subject to the
<PAGE>
occurrence of all of the following:
(i) Seller shall have completed subdivision of
the Land in the configuration set forth in Schedule "A-1", all requisite
governmental approvals shall have been obtained, and all conditions to
subdivision shall have been satisfied including, without limitation, the filing
in the public records of the subdivision plat;
(ii) Leasing Stabilization (as hereinafter
defined) for such Property having been achieved and in effect;
(iii) Substantial Completion of all work set forth
in the Approved Plans and Specifications (as the same may be modified, from time
to time, to include additional tenant improvement work, with the consent of
Purchaser), including, all tenant improvement work required under all Leases
(including, change orders);
(iv) All Tenants have accepted delivery of
possession of their premises pursuant to the terms and conditions
of their Leases;
(v) A final, unconditional Certificate of
Occupancy permitting occupancy of the Property and all premises for Tenant's use
has been issued by all Governmental Authorities having jurisdiction;
(vi) All Tenants have delivered their security
deposits and have commenced the payment of rent required to be
paid pursuant to the terms and conditions of the Leases;
(vii) All Tenants have delivered the Estoppel
<PAGE>
Certificates;
(viii) Written certification of McGarvey
Construction Co., Inc. that the work has been fully completed in accordance with
the Approved Plans and Specifications (or in accordance with the Approved Plans
and Specifications as amended after the date hereof, provided any such
amendments have been approved in writing by Purchaser), the provisions hereof
and all legal requirements, and that all necessary certificates and approvals
required to be obtained from any Governmental Authority having jurisdiction over
the Property have been obtained;
(ix) Receipt of an absolute unconditional waiver
of liens from all contractors and subcontractors for all work
performed at the Property;
(x) All contractors and subcontractors have been
paid in full for performance of work at the Property; and
(xi) All roads necessary for the full utilization
of the Improvements for their intended purposes have been completed (other than
completion of the top coat) and the necessary rights-of-way therefor have been
acquired by the appropriate Governmental Authority or have been dedicated to
public use by such Governmental Authority.
(b) The term "Leasing Stabilization" means, with respect to
each Property which has been developed with Improvements, (a) leases complying
with the terms and conditions set forth in Paragraph 7 for ninety (90%) percent
of the Floor Area therein have been executed and are in full force and effect,
<PAGE>
and (b) no default by either party to such leases has occurred and is
continuing, or no event has occurred and is continuing which, with the giving of
notice or the passage of time or both, would constitute a default under such
leases. Seller shall, within ten (10) days after achieving Leasing Stabilization
with respect to a particular Property, notify Purchaser of the date of achieving
Leasing Stabilization.
(c) The term "Substantial Completion" as used herein shall
mean that only so-called "punch list" items of work which shall be limited to
such unfinished minor items which, when considered as a whole, do not materially
adversely affect any Tenant's occupancy of its premises, and otherwise are
permitted pursuant to the terms of the Leases. Seller covenants and agrees to
fully complete any punch list items not later than the date which is twenty (20)
days after Seller receive notification thereof or within the time period set
forth in the applicable Lease.
46. NOTICES.
(a) Any notice, request, consent, approval or demand
("notice") which, pursuant to the provisions of this Agreement or otherwise,
must or may be given or made by any party hereto to any other party, shall be in
writing and shall be given by such party or its attorney and shall be delivered
by personal delivery, by mailing same via certified mail, return receipt
requested, postage prepaid, in a United States Post Office depository, by
delivery to a postal or private expedited form of
<PAGE>
delivery service, or telecopied to the intended recipient at the telecopy number
set forth therefor below (with hard copy to follow), addressed to Purchaser at
its address set forth in the heading to this Agreement, Attention: Roger Thomas,
Esq., (fax 908-272-6755), with a copy given in the aforesaid manner to Cole,
Schotz, Meisel, Forman & Leonard, P.A., Court Plaza North, 25 Main Street, P.O.
Box 800, Hackensack, New Jersey 07602-0800, Attention: Richard W. Abramson,
Esq., (fax 201-489-1536), and to Seller to William Price (fax 609-235-3043) at
the address set forth in the heading to this Agreement with a copy given in the
aforesaid manner to Archer & Greiner, One Centennial Square, Haddonfield, New
Jersey 08033, Attention: Gary L. Green, Esq., (fax 609-795-0574) addressed to
Guarantors at 840 North Lenola Road, Moorestown, New Jersey 08057.
(b) Notice shall be deemed delivered on the day of personal
delivery, on the day telecopied, on the first business day following deposit
with the overnight carrier or on the second business day following deposit in
the Post Office depository, as the case may be.
(c) Either party may designate a different person or address
by notice to the other party given in accordance herewith.
47. BROKER. Each party represents and warrants to the
other party that it dealt with no broker or other person entitled
to claim fees for such services in connection with the
negotiation, execution and delivery of this Agreement. Based
<PAGE>
upon the aforesaid representations, warranties and covenants each party agrees
to defend, indemnify and hold the other party harmless from and against any and
all claims for finders' fees or brokerage or other commission which at any time
may be asserted against the indemnified party, including any claim by Broker
against Purchaser, founded upon a claim that the substance of the aforesaid
representations of the indemnifying party is untrue. Such indemnification shall
include, but not be limited to, all commission claims, as well as all costs,
expenditures, legal fees and expert fees reasonably incurred in defending any
claim of any third party. In the event that by settlement or otherwise, any
monies or other consideration is awarded to or turned over to any third party as
a result of a commission claim, it is the intention of the parties hereto that
the indemnifying party shall be solely responsible therefor.
48. DEFAULT.
(a) If Purchaser shall default in the payment of the Purchase
Price or otherwise shall default in the performance of any of its other
obligations pursuant to this Agreement, Seller, as their sole and exclusive
remedy, shall be entitled to receive, as liquidated damages and not as a
penalty, the Letter of Credit and the right to convert same to cash, it being
acknowledged that the actual damages which may be suffered by Seller in the
event of any default by Purchaser shall be difficult to ascertain, plus the
costs and expenses set forth in subparagraph (c) below. If the Letter of Credit
is converted to cash, Seller shall be
<PAGE>
entitled to receive any interest earned on such cash.
(b) If Seller shall default in any of its obligations
hereunder, Purchaser shall have the right to (i) terminate this Agreement by
notice to Seller, in which event the Letter of Credit shall be returned to
Purchaser and obtain from Seller damages suffered by Purchaser, plus the costs
and expenses set forth in subparagraph (c) below, or (ii) seek specific
performance by Seller of Seller's obligations hereunder, and if Purchaser is
successful, in addition obtain from Seller the costs and expenses set forth in
(c) below, together with damages suffered by Purchaser.
(c) In the event of litigation arising out of this Agreement,
the prevailing party shall be entitled to recover from the losing party, costs
and expenses incurred by the prevailing party, including reasonable legal fees
and disbursements.
49. SURVIVAL. It is agreed that all of the terms, agreements,
covenants, promises, provisions, indemnifications, representations and
warranties set forth herein shall, except as otherwise specifically set forth in
this Agreement, survive Closing and delivery of the Deed.
50. INDEMNITY.
(a) Seller agrees to indemnify, defend and save harmless
Purchaser and its respective representatives, employees, agents, constituent
members, successors and assigns from and against all claims, actions, demands,
suits, liabilities and damages (i) subject to the limitations set forth in
Paragraph
<PAGE>
6.(e), resulting from the breach or default of any covenant, provision,
representation or warranty of Seller including all reasonable costs and expenses
incurred by Purchaser in the enforcement of this Paragraph, or (ii) imposed upon
or incurred by Purchaser, or allegedly due by Purchaser, arising out of or
relating to the ownership, operation, leasing, repair or improvement of or
otherwise dealing with, any Property, or by reason of any event or occurrence
on, or relating to, such Property which occurred, accrued or related to an event
occurring at any time prior to the Closing Date.
(b) Purchaser agrees to indemnify, defend and save harmless
Seller and its representatives, employees, agents, constituent members,
successors and assigns from and against all claims, actions, demands, suits,
liabilities and damages (i) subject to the limitations set forth in Paragraphs
6.(e) and 18, resulting from the breach or default of any covenant, provision,
representation or warranty of Purchaser or (ii) imposed upon or incurred by
Seller, or allegedly due by Seller, arising out of or relating to the ownership,
operation, leasing, repair or improvement of or otherwise dealing with, any
Property, or by reason of any event or occurrence on, or relating to, such
Property which occurred, accrued or related to an event occurring at any time
after the Closing Date.
51. ASSIGNMENT. This Agreement may not be assigned by Purchaser,
without the consent of Seller (which consent shall not be unreasonably withheld,
delayed or conditioned), except that no
<PAGE>
such consent shall be required with respect to an assignment to any affiliate of
Purchaser. Upon such assignment, Purchaser named herein shall be relieved of any
further liability for any of the terms, promises and conditions of this
Agreement on its part to be performed hereunder.
52. CROSS DEFAULT. Simultaneously with the execution and delivery of
this Agreement, Purchaser has entered into (i) a certain Agreement of Sale with
Seller and certain affiliates of Seller (the "Agreement of Sale") relating to
certain property more particularly described on Schedule "F"; and (ii) a certain
agreement with Seller (the "T&N Agreement") relating to certain property located
in Moorestown, New Jersey and leased to T&N Van Service, Inc. as more
particularly described in the T & N Agreement. This Agreement and the
obligations of the parties hereunder are subject to performance by the
respective parties to the T&N Agreement and/or the Agreement of Sale of their
respective obligations which are required to be performed prior to the Closing
Date in accordance with the terms thereof. If Seller or its related entities
default in their obligations under the Agreement of Sale and/or the T&N
Agreement, Purchaser shall have the right to proceed with the purchase of the
Property, to declare a default hereunder, and/or to terminate this Agreement. If
Purchaser shall default in its obligations under the Agreement of Sale and/or
the T & N Agreement, Seller shall have the right to declare a default hereunder.
<PAGE>
53. POST CLOSING RESTRICTIONS.
(a) Except as otherwise set forth herein, for a period of
three (3) years commencing on the closing date under the Agreement of Sale,
neither John S. McGarvey nor William G. Price, Jr. ("Principals" or, when used
in Paragraph 26, "Guarantors"), each of whom is a shareholder, officer,
director, partner, manager and/or employee of Seller, existing managing
entities, or related entities, either directly or indirectly, to or for the
benefit of any person, firm, partnership, corporation or other entity, shall:
call upon, solicit, divert, accept any business or patronage from, or attempt to
call upon, solicit or divert any of the tenants of the Adjacent Properties or
any potential tenants of the Adjacent Properties of which either has knowledge,
for the leasing and/or purchasing of industrial, warehouse and/or office real
property, or engage or become interested, either as a principal, partner, agent,
employee, shareholder or director of any corporation, association or other
entity, or in any other manner or capacity whatsoever, in the business of
developing, managing, leasing or selling industrial, warehouse and/or office
real property at any location situated within the State of New Jersey and within
fifteen (15) miles from any portion of the Property.
(b) It is acknowledged that each of the covenants, obligations
and restrictions ("restrictions") set forth in this Paragraph 23 is separate and
distinct from each and every other restriction, so that in the event all or any
portion of any
<PAGE>
restriction is deemed invalid or unreasonable, each of the remaining
restrictions shall be deemed divisible and independent therefrom, shall remain
in full force and effect and each Principal consents to such modifications of
any such restrictions as a court may deem reasonable.
(c) It is acknowledged that each of the above restrictions is
fair, reasonable and constitutes a material inducement to Purchaser to purchase
the Property, shall be construed and enforced independently of any other
agreement herein and the existence of any claim by Seller and/or Principals
against Purchaser shall not constitute a defense to the enforcement by Purchaser
of the restrictions set forth above.
(d) If this Agreement is terminated as a result of Purchaser's
default under this Agreement or the Agreement of Sale, the restrictions set
forth in this Paragraph 23 shall be deemed terminated and of no further force
and effect. If this Agreement is terminated by Purchaser with respect to a
particularly Property (not as a result of Seller's default under this
Agreement), then the restrictions set forth in this Paragraph 23 with respect to
such Property only shall be terminated and of no further force and effect.
(e) In the event Principals shall, at any time during the term
of the restrictions set forth in this Paragraph 23, receive a bona fide offer or
solicitation (the "Solicitation"), to engage or to become interested, either as
a principal, partner, agent, employee, shareholder or director of any
<PAGE>
corporation, association or other entity, or in any other manner or capacity
whatsoever, in a business which would be violative of the restrictions set forth
in this Paragraph 23, which Solicitation Principals wish to accept, Principal
shall deliver a notice (hereinafter referred to as the "Solicitation Notice") to
Purchaser setting forth all of the terms of said Solicitation together with a
true copy of the Solicitation (which must be in writing). Purchaser shall
thereafter have the right, exercisable by notice to Principals, within thirty
(30) days after the date of receipt of the Solicitation Notice, to elect to
pursue such Solicitation either individually, or, at Purchaser's election, by
joint venturing same with Principals. In the event Cali Realty shall elect to
pursue such Solicitation individually, Principals shall assign to Purchaser all
of their right, title and interest in and to such Solicitation and the right to
negotiate the terms and conditions of the transactions contemplated in the
Solicitation Notice in which event the restrictions set forth in this Paragraph
23 shall continue to be effective and shall remain in full force and effect. If
Purchaser does not elect to pursue such Solicitation, then Principals may, with
respect to the transactions set forth in the Solicitation Notice, pursue such
transactions, notwithstanding the restrictions set forth in this Paragraph 23.
Nothing contained herein shall be deemed a waiver or a release of Principals
from the restrictions set forth in this Paragraph 23 with respect to any other
activities not encompassed within the particular Solicitation Notice.
<PAGE>
54. ESCROW AGENT.
(a) The Letter of Credit shall be held in escrow by Escrow
Agent and released on the terms hereinafter set forth.
(b) At the Closing, Escrow Agent shall deliver the Letter of
Credit to Purchaser.
(c) Any notice(s) to and from Escrow Agent shall be given in
accordance with Paragraph 16 hereof.
(d) If Escrow Agent receives a notice signed by Seller stating
that Purchaser has defaulted in the performance of its obligations pursuant to
this Agreement, Escrow Agent shall deliver a copy of such notice to Purchaser.
If Escrow Agent shall not have received notice of objection from Purchaser
within ten (10) days after Escrow Agent has delivered such notice, Escrow Agent
shall deliver the Letter of Credit to Seller. If Escrow Agent shall receive a
timely notice of objection from Purchaser as aforesaid, Escrow Agent promptly
shall forward a copy thereof to Seller.
(e) If Escrow Agent receives a notice signed by Purchaser
stating that this Agreement has been canceled or terminated and that Purchaser
is entitled to the Letter of Credit, or that Seller has defaulted in the
performance of its obligations pursuant to this Agreement, Escrow Agent shall
deliver a copy of such notice to Seller. If Escrow Agent shall not have received
notice of objection from Seller within ten (10) days after Escrow Agent has
delivered such notice, Escrow Agent shall deliver the Letter of Credit to
Purchaser. If Escrow Agent
<PAGE>
shall receive a timely notice of objection from Seller as aforesaid, Escrow
Agent promptly shall forward a copy thereof to Purchaser.
(f) If Escrow Agent receives notice from either party
authorizing delivery of the Letter of Credit to the other party, Escrow Agent
shall deliver the Letter of Credit in accordance with such instructions.
(g) If Escrow Agent receives a notice of objection as
aforesaid, Escrow Agent shall convert the Letter of Credit to cash and hold such
proceeds in an interest bearing FDIC insured bank in New Jersey until Escrow
Agent receives either: (i) a notice signed by both Seller and Purchaser stating
who is entitled to the Letter of Credit; or (ii) a final order of a court of
competent jurisdiction directing disbursement in a specific manner, in either of
which events Escrow Agent shall deliver the Letter of Credit in accordance
herewith or in accordance with such notice or order. Escrow Agent shall not be
or become liable in any way or to any person for its refusal to comply with any
requests or demands until and unless it has received a direction of the nature
described in (i) or (ii) above.
(h) Notwithstanding the foregoing provisions of Subparagraph
(g) above, if Escrow Agent shall have received a notice of objection as
aforesaid, or shall have received at any time before actual delivery of the
Letter of Credit, a notice signed by either Seller or Purchaser advising that
litigation
<PAGE>
between Seller and Purchaser over entitlement to the Letter of Credit has been
commenced, Escrow Agent shall have the right, upon notice to both Seller and
Purchaser to deposit the Letter of Credit with the Clerk of the Court in which
any litigation is pending, whereupon Escrow Agent shall be released of and from
all liability hereunder except for any previous gross negligence or willful
default.
(i) Escrow Agent shall not be liable for any error or judgment
or for any act done or omitted by it in good faith, or for any mistake of fact
or law, and is released and exculpated from all liability hereunder except for
willful misconduct or gross negligence.
(j) Escrow Agent's obligations hereunder shall be as a
depositary only, and Escrow Agent shall not be responsible or liable in any
manner whatever for the sufficiency, correctness, genuineness or validity of any
notice, instructions or other instrument furnished to it or deposited with it,
or for the form of execution of any thereof, or for the identity or authority of
any person depositing or furnishing same.
(k) Escrow Agent shall not have any duties or responsibilities
except those set forth in this Agreement and shall not incur any liability in
acting upon any signature, notice, request, waiver, consent, receipt or other
paper or document believed by it to be genuine, and Escrow Agent may assume that
any person purporting to give any notice or advice on behalf of any party in
accordance with the provisions hereof has
<PAGE>
been duly authorized to do so.
(l) Escrow Agent shall be entitled to consult with counsel in
connection with its duties hereunder, including attorneys at its firm. The
parties shall reimburse Escrow Agent, jointly and severally, for all costs and
expenses incurred by Escrow Agent in performing its duties as Escrow Agent
including, but not limited to, reasonable attorneys' fees (either paid to
retained attorneys or amounts representing the fair value of services rendered
to itself).
(m) The terms and provisions of this Paragraph shall create no
right in any person, firm or corporation other than the parties hereto and their
respective successors or assigns, and no third party shall have the right to
enforce or benefit from the terms hereof.
(n) In the event of any dispute, disagreement or suit between
Seller and Purchaser, whether pertaining to the Letter of Credit, this Agreement
or otherwise, Escrow Agent shall have the right to represent or otherwise serve
as attorneys for Seller.
(o) Escrow Agent is designated the "real estate reporting
person" for purposes of Section 6045 of Title 26 of the United States Code and
Treasury Regulation 1.6045-4 and any instructions or settlement statement
prepared by Escrow Agent shall so provide. Upon the consummation of the
transaction contemplated by this Agreement, Escrow Agent shall file Form 1099
information return and send the statement to Seller as required under the
aforementioned statute and regulation.
<PAGE>
(p) The applicable provisions of this Paragraph shall survive
the Closing or termination of this Agreement.
55. MISCELLANEOUS.
(a) This Agreement shall inure to the benefit of and shall be
binding upon the parties and their respective heirs, successors, legal
representatives and assigns.
(b) This Agreement may be executed in one or more
counterparts, each of which when so executed and delivered by each party to the
other shall be deemed an original, but all of which when taken together shall
constitute but one and the same instrument.
(c) At any time or from time to time, upon written request of
the other party, each party shall execute and deliver all such further documents
and do all such other acts and things as reasonably may be required to confirm
or consummate the within transaction.
(d) The captions preceding the Paragraphs of this Agreement
are intended only as a matter of convenience and for reference and in no way
define, limit or describe the scope of this Agreement or the intent of any
provision hereof.
(e) This Agreement constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof. No variations or
modifications of or amendments to the terms of this Agreement shall be binding
unless in writing and signed by the parties hereto. The respective attorneys for
each party are authorized to modify any dates or time periods set
<PAGE>
forth herein.
(f) The terms, conditions, covenants and provisions of this
Agreement shall be deemed to be severable except with respect to any provisions
relating to the Purchase Price. If any clause or provision herein contained
shall be adjudged to be invalid or unenforceable by a court of competent
jurisdiction or by operation of any applicable law, the same shall be deemed to
be severable and shall not affect the validity of any other clause or provision
herein, but such other clauses or provisions shall remain in full force and
effect.
(g) The obligations of each party to complete the transactions
contemplated hereby is subject to the satisfaction, as of Closing, of all of the
terms, conditions and obligations to be met and/or performed by the other party
or which otherwise are for the benefit of such party, any of which conditions
and/or obligations may be waived in whole or in part by the party which is the
beneficiary of such condition or obligation.
(h) Each party, at its sole cost and expense, shall have the
right to record a short form memorandum of this Agreement, which memorandum
shall not set forth the Purchase Price or terms of payment, and each party
agrees to execute any such short form memorandum upon the request of the other
party.
(i) As used in this Agreement, the masculine gender shall
include the feminine or neuter genders and the neuter gender shall include the
masculine or feminine genders, the singular shall include the plural and the
plural shall include
<PAGE>
the singular, wherever appropriate to the context.
(j) This Agreement shall be governed by and enforced in
accordance with the substantive laws of the State of New Jersey.
56. GUARANTY.
(a) Guarantors hereby, jointly and severally, guarantee to
Purchaser, its successors and assigns the full, due and timely completion of
construction of all Improvements in the manner required by the Approved Plans
and Specifications from time to time and in accordance with the provisions of
this Agreement including any modifications or amendments hereto, without any
further writing, and the costs for enforcing this Guaranty (collectively, the
"Obligations").
(b) This is a guaranty of payment and performance and not of
collection. The obligations of Guarantors hereunder are independent of the
obligations of Seller, and a separate action or actions may be brought and
prosecuted against Guarantors, regardless whether action is brought against
Seller or whether Seller are joined in any such action or actions.
(c) Guarantors agree that the obligations of Guarantors under
this Paragraph 26 are primary, absolute and unconditional, irrespective of the
value, genuineness, validity, regularity or enforceability of any of the
Agreement or any instrument referred to herein, or any substitution, release or
exchange of any other guaranty of or security for the Obligations, and, to the
fullest extent permitted by applicable
<PAGE>
law, irrespective of any other circumstance whatsoever (including, without
limitation, personal defenses of Seller) which might otherwise constitute a
legal or equitable discharge or defense of a surety, guarantor or co-obligor, it
being the intent of this Paragraph 26 that the obligations of Guarantors
hereunder shall be primary, absolute and unconditional under any and all
circumstances. Without limiting the generality of the foregoing, it is agreed
that the occurrence of any one or more the following shall not alter or impair
the liability of Guarantors hereunder:
(i) at any time or from time to time, without
notice to or consent of Guarantors, the time for any performance of or
compliance with the Obligations shall be extended, or such performance or
compliance shall be waived;
(ii) any modification of or amendment to the
Agreement;
(iii) the existence of any claim, set-off or
other right which Guarantors may have at any time against Purchaser, Seller or
any other person or entity, whether in connection herewith or with any unrelated
transaction;
(iv) any of the acts required or contemplated in
any of the provisions of the Agreement or other instruments
referred herein shall be done or omitted;
(v) the maturity of any of the Obligations shall
be accelerated or extended, or any of the Obligations shall be
modified, supplemented or amended in any respect or any right
<PAGE>
under the Agreement or other instruments referred to herein shall be waived or
extended or any other guaranty of the Obligations or any security therefor shall
be released or exchanged in whole or in part or otherwise dealt with;
(vi) Purchaser releases or substitutes any one or
more of any Seller, endorses or guarantors of the Obligations;
(vii) any of the Obligations shall be
determined to be void or voidable or shall be subordinated to the
claims of any person; or
(viii) there shall be occur any insolvency,
bankruptcy, reorganization or dissolution of Seller(s) or other
Guarantor.
With respect to their obligations hereunder, Guarantors hereby
expressly waive diligence, presentment, demand of payment, protest and all
notices whatsoever and any requirement that Purchaser exhaust any right, power
or remedy or proceed against any person under the Agreement or other instruments
referred to herein, or against any collateral or other person under any other
guaranty of, or security for, or obligation relating to, any of the Obligations.
(d) The obligations of Guarantors under this Paragraph 26
shall be automatically reinstated if and to the extent that for any reason any
payment or performance by or on behalf of any persons in respect of the
Obligations is rescinded or must be otherwise restored by Purchaser or any other
holder or recipient of payment or performance of the Obligations, whether as a
result
<PAGE>
of any proceedings in bankruptcy or reorganization or otherwise, and Guarantors
agree that they will pay to Purchaser on demand all reasonable out-of-pocket
costs and expenses (including, without limitation, fees of counsel) incurred by
Purchaser in connection with such rescission or restoration, including any such
costs and expenses incurred in defending against any claim alleging that such
payment constituted a preference, fraudulent transfer or similar payment under
any bankruptcy, insolvency or similar law.
(e) Without limiting the generality of the provisions of this
Paragraph 26, Guarantors hereby specifically waive: (a) promptness, diligence,
notice of acceptance and any other notice with respect to the Obligations; (b)
any requirement that Purchaser protect, secure or insure any lien or any
property subject thereto or exhaust any right or take any action against Seller
or any collateral or undertake any marshalling of assets; (c) the right to
direct the order of enforcement or remedies, (d) any defense arising by reason
of any claim or defense based upon an election of remedies by Purchaser which in
any manner impairs, reduces, releases or otherwise adversely affects its
subrogating, contribution or reimbursement rights or other rights to proceed
against Seller or any collateral; (e) any duty on the part of Purchaser to
disclose to Guarantors any matter, fact or thing relating to the business,
operation or condition of the Properties or Seller and their assets now known or
hereafter known by Purchaser; and (f) all presentments, demands for
<PAGE>
performance, notices of nonperformance, protests, notices of protest, notices of
dishonor, and notices of acceptance of the guaranty provided for in this
Paragraph 26 and the existence, creation or incurrence of new or additional
indebtedness.
57. ROLLBACK TAXES. Any "rollback taxes" assessed or to be assessed
against any Premises identified on Schedule "A" pursuant to the Farmland
Assessment Act of 1964, N.J.S.A. 54:4-23.1, et seq., shall be paid by Seller. If
rollback taxes will be due with respect to any Premises but are not assessed
against a Property at a Closing, a good-faith estimate of the amount of same
shall be obtained by the parties from the tax assessor of the Township of
Moorestown, at least twenty-four (24) hours prior to Closing, and Seller shall
pay one hundred twenty-five (125%) percent of the amount of said estimate from
the proceeds at Closing into escrow to be held by Title Company until such time
as the rollback tax assessment against the respective Premises is made. Upon
Title Company's receipt of notice from Purchaser that said rollback taxes have
been assessed against the Premises, Title Company shall, within three (3)
business days thereof, pay said taxes to the Township of Moorestown. In the
event the amount of the monies being held in escrow by Title Company are not
sufficient to cover payment of said rollback taxes, then Seller shall promptly
pay to Purchaser any additional monies that are due and payable by Seller in
accordance with the terms and provisions of this Paragraph; and in the event the
amount of the escrow monies are in excess of the amount of said rollback taxes,
<PAGE>
then Title Company shall disburse the remaining balance of the escrow funds to
Seller after the amount of the escrow monies due to Purchaser have been
disbursed to the Township of Moorestown, in accordance with the terms and
provisions of the immediately proceeding sentence. Seller shall indemnify and
hold Purchaser harmless from and against all costs and expenses, including
reasonable attorneys fees, incurred by Purchaser in connection with Seller's
failure to perform Seller's obligations under this Paragraph 27.
58. SELLER'S RIGHT TO EXCHANGE PROPERTY.
(a) (i) Seller shall have the right, exercisable at least
thirty (30) days prior to Closing, to elect to exchange the Property for other
property of like kind ("Exchange Property") pursuant to Section 1031 of the
Internal Revenue Code of 1986, as amended.
(ii) If Seller elects to effect any exchange, it
shall notify Purchaser as to all details thereof, and Purchaser shall execute a
contract to purchase the Exchange Property in a form satisfactory to Seller
(hereinafter called the "Exchange Contract"), and immediately thereafter shall
assign all of its right, title and interest in and to the Exchange Contract to
the Exchange Escrow Agent, as hereinafter defined. The funds required to pay the
deposit under the Exchange Contract shall be provided to Purchaser by Seller or
Exchange Escrow Agent. The Exchange Contract shall provide for the right of
assignment by Purchaser to Exchange Escrow Agent and/or Seller without
<PAGE>
recourse, and that the seller of the Exchange Property shall look only to the
deposit monies thereunder as liquidated damages, there being no liability on the
part of Purchaser to said seller. Purchaser shall not be obligated to execute an
Exchange Contract which would require Purchaser to be personally liable on any
indebtedness or to incur any cost or expense which would increase Purchaser's
liability beyond that liability incurred by Purchaser hereunder.
(iii) In no event, however, shall the closing of
title to the Property be delayed due to the inability of Seller to select an
Exchange Property or close title thereto.
(b) (i) If Seller shall elect to exchange the Property
pursuant to this Paragraph, whether or not an Exchange Property has been
designated, as herein set forth, the Purchase Price, exclusive of the
satisfaction of liens, payment of closing costs and other permitted expenses,
shall be deposited with the Exchange Escrow Agent ("Escrow Account"), subject to
the Exchange Escrow Agent executing an agreement reasonably satisfactory to
Purchaser whereby Exchange Escrow Agent agrees to be bound by the terms and
conditions of this Paragraph 28, and shall not be paid to Seller at Closing. The
Escrow Account shall be held by Exchange Escrow Agent in an interest bearing
account, pursuant to the terms hereof. The interest earned upon the Escrow
Account while being held by Exchange Escrow Agent shall be added to the Escrow
Account and shall be paid to Seller at the closing of the Exchange Property.
<PAGE>
(ii) Purchaser appoints its title insurance
company or such other title insurance company or other entity as Purchaser
reasonably may designate, its agent, in order to effectuate the Exchange (the
"Exchange Escrow Agent"). Purchaser and Seller shall cooperate with each other
and Exchange Escrow Agent and promptly shall sign and deliver to Exchange Escrow
Agent all documents reasonably deemed necessary by Seller in order to qualify
this transaction pursuant to Internal Revenue Code Section 1031.
(iii) Seller shall pay all fees relating to the
Escrow Account, and all reasonable attorneys' fees and expenses of Purchaser, if
any, relating to the exchange transaction and in no event shall Purchaser be
required to assume any liability thereunder.
(iv) During the period that the Escrow Account is
in existence, Seller shall not have any control, directly or indirectly, over
the funds placed in the Escrow Account, except as may be expressly provided
herein.
(v) If, at the time of Closing, Seller shall not
have designated the Exchange Property, then if within forty-five (45) days
following Closing, Seller shall deliver to Purchaser and to Exchange Escrow
Agent a designation of an Exchange Property which Seller desires to acquire by
way of exchange for the Property transferred to Purchaser at Closing
("Designation"), the parties shall proceed as provided for herein. If there is
no timely Designation, then Exchange Escrow Agent, on the
<PAGE>
forty-sixth (46th) day after Closing (or, if such day is a Saturday, Sunday or
legal holiday, on the first business day thereafter) shall disburse to Seller
the Escrow Account and all interest earned thereon shall be paid to Purchaser.
(vi) Any Designation of an Exchange Property shall
include an Exchange Contract, or thereafter Seller shall provide Purchaser with
an Exchange Contract, which Exchange Contract shall comply with the terms set
forth in Subparagraph 28.(a). The parties acknowledge that there may be multiple
Exchange Properties and that multiple Designations may be delivered, provided
that each meets the conditions set forth herein and the requirements of the
Internal Revenue Code Section 1031 and regulations thereunder.
(vii) Upon receipt by Purchaser of an Exchange
Contract, it shall execute and deliver the Exchange Contract to the seller of
the Exchange Property ("Exchange Seller"), Seller and Exchange Escrow Agent.
Thereafter, Purchaser shall assign its interest in the Exchange Contract to
Exchange Escrow Agent, it being agreed that Purchaser shall not take title to
any Exchange Property.
(viii) Upon Purchaser executing any Exchange
Contract, and in accordance therewith, Exchange Escrow Agent shall pay from the
Escrow Account to Exchange Seller, or such other party as is provided for in the
Exchange Contract, the amount of the deposit and all other monies required under
the Exchange Contract or otherwise related to the transaction.
<PAGE>
(ix) Exchange Escrow Agent shall not be liable to
either Seller or Purchaser in connection with its performance as Exchange Escrow
Agent, except in the event of intentional wrongdoing or negligence. Exchange
Escrow Agent is authorized only to do those acts necessary and proper to effect
the purpose of this Agreement.
(x) The Exchange Escrow Agent shall use the
Escrow Account, for payment of the deposit and all other payments due under the
Exchange Contract to purchase the Exchange Property, plus closing costs, and for
no other purpose.
(xi) If the payment for the Exchange Property
shall exceed the amount of the Escrow Account, Seller either shall: (i) deposit
an amount equal to such excess with Exchange Escrow Agent no later than the day
of the Exchange Property Closing; or (ii) cause or direct that the funds
necessary to effectuate the Exchange Property Closing be paid directly to
Exchange Seller at the Exchange Property Closing.
(xii) At the Exchange Property Closing, the
following shall be deposited or caused to be deposited with Exchange Escrow
Agent: (i) a deed for the Exchange Property from Exchange Seller as grantor to
Seller, as grantee; and (ii) any other documents or agreements necessary or
incidental to the acquisition or conveyance of the Exchange Property.
(xiii) When all documents and funds called for
herein have been deposited with Exchange Escrow Agent and when a title policy
can be issued on the Exchange Property to Seller,
<PAGE>
subject only to title exceptions approved by Seller, Exchange Escrow Agent shall
record the deed, disburse the funds and deliver all other documents to Seller.
All expenses, reimbursements and prorations in connection with the Exchange
Property shall be governed by the provisions of the Exchange Contract, except as
expressly set forth herein.
(xiv) Purchaser makes no warranty with respect to
the Exchange Property and Seller assumes all responsibility for title to the
Exchange Property being good and marketable. Seller agrees to indemnify
Purchaser and hold Purchaser harmless from any damages, liability, costs,
expenses, claims, losses or demands (including reasonable attorneys' fees and
costs of litigation including those for enforcing this indemnity), arising out
of or in any way related to the acquisition of the Exchange Property. If the
Exchange Property is subject to any mortgage, deed of trust or lease, Purchaser
shall assume no liability or obligation with respect to said mortgage, deed of
trust or lease. Purchaser makes no representations as to the tax consequences of
any aspect of this transaction.
(xv) If the Exchange Property as may be designated
by Seller is not conveyed to Seller within the earlier of: (i) one hundred
eighty (180) days after Closing; or (ii) the due date (determined with regard to
extensions) of Seller's federal income tax return for the taxable year in which
the transfer of the Property occurs or if no Exchange Property is designated
within forty-five (45) days following Closing, then the Escrow Account
<PAGE>
shall be released to Seller, free of the escrow, and the obligations of
Purchaser and Exchange Escrow Agent shall end. Notwithstanding failure of the
Exchange Property to be conveyed to Seller as hereinabove set forth, the
transfer of the Property to Purchaser shall not be subject to recession or
revocation by Seller or Purchaser for any reason whatsoever.
[REST OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
or caused these presents to be signed and sealed by duly authorized persons the
day and year first above written.
SELLER:
WITNESSES: LANCER ASSOCIATES, L.L.C.
______________________________ By:__________________________
Name:________________________
Title:_______________________
WITNESS: THE MOORESTOWN TWOSOME
______________________________ By:__________________________
Name:________________________
Title:_______________________
PURCHASER:
ATTEST: MACK-CALI REALTY, L.P.,
By: Mack-Cali Realty
Corporation, its General
Partner
_______________________________ By:__________________________
Name:________________________
Title:_______________________
AS TO PARAGRAPHS 23 AND 26:
WITNESS:
_______________________________ ______________________________
JOHN S. McGARVEY
_______________________________ ______________________________
WILLIAM G. PRICE, JR.
EXHIBIT NO. 10.132
AGREEMENT OF SALE
AGREEMENT made this day of January, 1998, by and between LANCER
ASSOCIATES, L.L.C., a New Jersey limited liability company, having an office at
840 N. Lenola Road, Moorestown, New Jersey 08057 (hereinafter called "Seller"),
and MACK-CALI REALTY, L.P., a Delaware limited partnership, having an office at
11 Commerce Drive, Cranford, New Jersey 07016 (hereinafter called "Purchaser").
W I T N E S S E T H:
FOR AND IN CONSIDERATION of the mutual covenants hereinafter contained:
59. AGREEMENT TO SELL AND PURCHASE.
(a) Seller hereby agrees to sell and convey, and Purchaser
hereby agrees to purchase, subject to the conditions set forth herein, those
certain plots, pieces or parcels of land ("Land"), together with all buildings
and improvements located thereon or to be constructed thereon, and any
appurtenances or hereditaments appertaining thereto ("Improvements"), located in
the Township of Moorestown, County of Burlington, State of New Jersey
(hereinafter referred to as the "Premises"). The Land and Improvements
constitute a portion of Lots 1, 2, 3 and 4, Block 300 on the current Township's
Tax Map, and are more particularly described on Schedule "A" attached hereto and
made a part hereof and cross-hatched on Schedule "A-1" attached hereto and made
a
<PAGE>
part hereof.
(b) This sale includes, for no additional consideration, all
of the right, title and interest, if any, of Seller in and to the following:
(i) All fixtures, equipment and articles of
personal property necessary or appropriate for the operation or use of the
Premises, and any replacements or substitutions therefor and additions thereto
("Personal Property"), all trade names and fictitious names used by Seller in
connection with the Premises ("Names"), and all documents, records and books of
account relating to the construction, ownership, leasing, operation, management,
maintenance and/or financing of the Premises, which are in the possession or
control of Seller ("Records"). All of said Personal Property, Names and Records
shall be included in the deed of conveyance, Bill of Sale and/or assignments to
be delivered at Closing (as hereinafter defined), as Purchaser may request;
(ii) Any land lying in the bed of any street, or
road open or proposed in front of, adjacent to, or adjoining the Premises, to
the center lines thereof, and any future award, if any, for damages to said
Premises by reason of change of grade of any street and all rights of way
appurtenant thereto ("Appurtenant Property"); and Seller shall execute and
deliver to Purchaser, at Closing or thereafter, on demand, all proper
instruments for the conveyance of such title and for the assignment and
collection of any such award.
<PAGE>
The Premises, together with the Personal Property, Names, Records and
Appurtenant Property are referred to herein collectively as the "Property".
60. PURCHASE PRICE.
The purchase price to be paid by Purchaser to Seller is Three
Million Six Hundred Fifty Thousand ($3,650,000.00) Dollars (herein called the
"Purchase Price"), subject to adjustments and prorations described herein. The
Purchase Price shall be payable by immediately available funds in accordance
with wiring instructions of Seller. The Purchase Price shall be payable in full
at Closing.
61. DEPOSIT.
(a) Upon the execution and delivery of this Agreement,
Purchaser shall deliver to Escrow Agent (as hereinafter defined in Paragraph
3.(b) hereof) an irrevocable letter of credit in substantially the form of the
letter of credit annexed hereto as Schedule "C" in the sum of One Hundred
Thousand ($100,000.00) Dollars (the "Letter of Credit").
(b) The Letter of Credit shall be deposited with Archer &
Greiner, Esqs., attorneys for Seller ("Escrow Agent"), and shall be held by
Escrow Agent in accordance with the provisions of Paragraph 23 hereof, subject
to the following terms:
(i) At Closing, the Letter of Credit shall be
delivered to Purchaser;
(ii) If this Agreement is terminated pursuant to
<PAGE>
its terms, or if this transaction otherwise does not close for any reason except
for Purchaser's or Seller's default, the Letter of Credit shall be delivered
immediately to Purchaser without application of Paragraph 23(f), (h) and (I)
hereof;
(iii) If this Agreement is terminated due to
Purchaser's default, the Letter of Credit shall be delivered immediately to
Seller as liquidated damages pursuant to Paragraph 18 hereof subject to the
terms of Paragraph 23 hereof; and
(iv) If this Agreement is terminated due to
Seller's default, the Letter of Credit shall be delivered to Purchaser, subject
to the terms of Paragraph 23 hereof.
62. CONSTRUCTION OF IMPROVEMENTS.
(a) Attached hereto and made a part hereof as Schedule "B" is
a list of complete architectural drawings and specifications (the "Plans and
Specifications") for the construction of Improvements on the Property. The Plans
and Specifications shall be final and shall not be changed by Seller without the
prior consent of Purchaser.
(b) Seller has advised Purchaser that it has commenced
construction of the Improvements and covenants and agrees that it shall,
promptly and with due diligence continue to construct the Improvements on the
Property in accordance with the Plans and Specifications, including, without
limitation, utility lines, drainage, lighting facilities, grading and paving,
landscaping, approaches, entrances, exits, ramps, sidewalks, roadways, curb
cuts, loading areas, platforms, service roads and all buildings
<PAGE>
required to be constructed pursuant to the Plans and Specifications. The
construction work shall be done in a first class, good and workmanlike manner
and in compliance with all applicable laws, orders and regulations of federal,
state, county and municipal authorities having jurisdiction. Seller, at its sole
cost and expense, shall obtain or cause to be obtained all building permits,
licenses, temporary and permanent certificates of occupancy and other
governmental approvals which may be required to permit the construction of the
Improvements in accordance with the Plans and Specifications and the use or
occupancy thereof.
(c) Purchaser may, on reasonable prior notice to Seller, visit
the job site to inspect the progress and performance of the work and the
materials being incorporated into the Improvements.
(d) At least ten (10) days prior to Closing (as hereinafter
defined) but not later than thirty (30) days after Substantial Completion (as
hereinafter defined) of construction of the Improvements on the Property, Seller
shall, at its sole cost, deliver to Purchaser an accurate "as built" survey of
the Improvements certified to Purchaser and its designees by a duly licensed
surveyor including the information set forth on Schedule "E", together with
three (3) sets of "as built" plans of the Improvements, including, without
limitation, architectural and mechanical plans.
(e) Seller shall, at its own expense, maintain or
<PAGE>
cause to be maintained in force a policy or policies of insurance written by one
or more responsible insurance carriers acceptably rated by national rating
organizations insuring against liability for bodily injury, death and property
damage of any person or persons in connection with construction work to be
performed pursuant to this Agreement, with minimum limits as set forth below:
(A) Worker's Compensation: Statutory
Limits.
(B) Employer's Liability: $100,000.00.
(C) Comprehensive General Liability
covering the following:
(1) Bodily injury, death and
property damage having a
combined single limit of
liability of not less than
Two Million ($2,000,000.00)
Dollars;
(2) Owner's Protective Liability:
$1,000,000.00 per occurrence;
(3) Products Completed Operations
Coverage: (to be kept in effect
for two (2) years after
completion);
(4) "XCU" Hazard Endorsement, if
applicable;
(5) "Broad Form" Property Damage
Endorsement;
(6) "Personal Injury" Endorsement;
(7) Contractual Liability
Endorsement. Such policy or policies shall provide, among other things, that the
insurer(s) specifically recognize and insure the obligations undertaken by
Seller pursuant to this Agreement and shall name
<PAGE>
Purchaser as an additional insured. Seller shall deliver a certificate of
insurance evidencing the existence in force of such policy or policies of
insurance. Such certificate shall provide that such insurance will not be
canceled or materially amended unless twenty (20) days prior written notice is
given to Purchaser.
(f) Seller covenants and agrees, at its sole cost and expense,
to promptly make, or cause to be made, all repairs and replacements to the
applicable work arising from defective labor and/or materials during the period
commencing on final completion of such Improvements and terminating on the date
which is one (1) year therefrom.
(g) Seller shall give Purchaser at least sixty (60) days prior
notice of the date of Substantial Completion (the "Substantial Completion
Notice").
63. TITLE.
(a) Seller shall convey title to the Property and Purchaser
shall accept Marketable Title (as hereinafter defined), subject only to the
encumbrances set forth on Schedule "D" ("Permitted Encumbrances"). Marketable
Title shall mean that fee title to the Property is vested in Seller and shall be
insured as such by a title company selected by Purchaser (herein referred to as
the "Title Company") at standard rates; and that Purchaser shall not incur any
damage, cost or expense resulting from any encroachment or overlap affecting the
Property. Title Company shall certify that Seller has the right, authority and
power to
<PAGE>
enter into and to perform its obligations hereunder. The legal description in
the Binder (as hereinafter defined) and in the Deed (as hereinafter defined)
shall be in accordance with a current survey showing the completed Improvements
satisfactory to Title Company and Purchaser.
(b) Purchaser has received a title insurance binder (herein
referred to as the "Binder"), a copy of which has been delivered to Seller.
Prior to the expiration of the Due Diligence Period (as hereinafter defined),
Purchaser shall deliver to Seller's attorney notice of any objections to title
which are not Permitted Encumbrances. After the execution hereof, no further
liens, encumbrances, easements or restrictions shall be created or filed
("Subsequent Encumbrances") on or with respect to the Property. The Binder, at
the request of Purchaser, shall contain the following endorsements so that at
Closing, Title Company will issue an Owner's Policy of Title Insurance (American
Land Title Association Owner's Policy - 1992, or equivalent, in Purchaser's sole
judgment), in the full amount of the Purchase Price (the "Title Policy"):
(i) a zoning endorsement certifying that the
Property is not subject to any ordinance, regulation or restriction which in any
way would prohibit or restrict the construction, maintenance and/or use of the
insured Property for its present use;
(ii) an endorsement insuring contiguity between or
among all of the tracts or parcels of land comprising the
<PAGE>
Property;
(iii) an endorsement deleting any coverage
exclusions with respect to creditor's rights; and
(iv) an endorsement affirmatively insuring access
to public streets, highway and roadways.
If the Binder discloses any exceptions, liens, encumbrances, defects or
objections other than the Permitted Encumbrances or if, after execution hereof,
a Subsequent Encumbrance shall be placed against the Property or if the Title
Company is unable to issue the endorsements (herein collectively called the
"Title Defect(s)"), then Purchaser shall have the right to: (i) require Seller
to use best efforts to cure any such Title Defects (except that Seller shall be
obligated to cure any Title Defects which can be removed solely by the payment
of a sum of money); (ii) attempt to cure any such Title Defect; (iii) accept
such title as Seller shall be able to convey and proceed to Closing without
reduction in the Purchase Price; (iv) cause a title report and title insurance
policy to be issued by another title company without such Title Defect; (v)
elect not to purchase the Property and declare this Agreement null and void,
whereupon Purchaser shall be entitled to the return of the Letter of Credit;
provided, however, if Seller gives notice to Purchaser within five (5) days
after Purchaser's election under this subparagraph (v), that Seller intends to
cure such Title Defects and thereafter cures such Title Defects in accordance
with the terms of this Agreement within thirty (30) days after receipt of notice
<PAGE>
from Purchaser of its election under this subparagraph (v), then Purchaser's
notice of termination shall be deemed negated and the transaction contemplated
by this Agreement shall proceed pursuant to the terms of this Agreement. The
right of Purchaser to terminate this Agreement may be exercised following the
exercise of its other rights hereunder.
(c) If at Closing there are liens or encumbrances against the
Property other than Permitted Encumbrances, Seller may use any portion of the
Purchase Price to satisfy same, provided Seller, at Closing, either shall: (1)
deliver to Purchaser instruments in recordable form sufficient to satisfy such
liens or encumbrances of record, together with the cost of recording or filing
said instruments; or (2) deposit with Title Company sufficient monies acceptable
to Title Company to insure obtaining and recording of such satisfactions and the
issuance of a Title Policy for the Property to Purchaser free and clear of any
such liens or encumbrances, but only to the extent that such liens or
encumbrances are in favor of and held by institutional lenders. The existence of
any such liens or encumbrances shall not be deemed objections or exceptions to
title if Seller shall comply with the foregoing requirements.
(d) If a search of title discloses judgments, bankruptcies or
other returns against other persons or entities having names the same as or
similar to that of Seller or any predecessor in title, Seller, on request, shall
deliver to Title Company, an affidavit showing that such judgments, bankruptcies
<PAGE>
or other returns are not against Seller or such predecessors in
interest of Seller.
64. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Seller acknowledges that all representations and
warranties set forth in this Agreement presently are true and accurate and shall
remain true and accurate as of the Closing Date, it being acknowledged that
Purchaser is relying on all of said representations and warranties, and that
each of the representations and warranties set forth in this Agreement is of the
essence hereof, notwithstanding any investigation, review, examination or other
acts or conduct of Purchaser, its agents or representatives relating to or in
connection with, any representation or warranty contained in this Agreement. In
addition to any other representations, warranties and/or covenants contained in
this Agreement, Seller makes the following additional representations,
warranties and/or covenants:
(A) Seller has delivered to Purchaser true,
correct and complete copies of any applicable certificate of incorporation,
certificate of formation, certificate of limited partnership, trade name
certificate, Shareholders' Agreement, Operating Agreement, Limited Partnership
Agreement, Partnership Agreement, Trust Agreement, By-Laws and all other
governing documents of Seller and each participant of Seller (referred to herein
singularly and collectively as "Organizational Document(s)");
(B) Seller is duly organized, validly existing
<PAGE>
and in good standing in its state of formation and is in good standing in New
Jersey, has the right and authority to execute this Agreement and to consummate
this transaction in accordance with the provisions hereof and all persons
executing this Agreement and all other applicable documents on behalf of Seller
have the right, power and authority to do so. Seller shall provide Purchaser
true copies of its authority and appropriate resolutions ("Seller Resolutions")
ratifying Seller's entering into this Agreement, and authorizing Seller's sale
of the Property to Purchaser in accordance with the terms of this Agreement;
(C) Seller owns and shall convey to Purchaser the
Premises and the fixtures, Personal Property, Names and Records, free and clear
of all liens and encumbrances, except for the Permitted Encumbrances;
(D) Seller has no knowledge of and has not
received any notice(s) of, any violations of law, code, ordinances, rule,
regulation or requirements noted in or issued by any governmental department
having authority with respect to the Property, except as otherwise provided
herein. Seller shall deliver to Purchaser true copies of any such notice(s)
received after the date hereof, forthwith on receipt thereof, and each such
notice shall be complied with by Seller, at its sole cost and expense, prior to
Closing, or as otherwise agreed upon between the parties;
(E) Schedule "F" annexed hereto and made a part
<PAGE>
hereof contains a complete and accurate statement of all tenants who have
entered Leases, whether or not they are occupying space at the Property as of
the date of this Agreement ("Tenant(s)"), each of whom has entered into and/or
will be in occupancy pursuant to a written lease agreement (referred to herein
collectively as "Leases" and individually as a "Lease"). Schedule "F" contains:
(i) the complete and accurate name of each Tenant; (ii) the commencement date of
each Lease or the basis for determining same; (iii) the termination date of each
Lease or the basis for determining same; (iv) the renewal, extension or other
rights or options, if any, for existing, additional and/or other space granted
by each Lease, and whether said rights or options have been exercised; (v) the
initial base rent being paid or to be paid by each Tenant; (vi) the initial
additional rent being paid or to be paid by each Tenant (itemized); (vii) the
date the last base and additional rent were paid by each Tenant, if any, and the
period covered by said payment; (viii) the amount of the security deposit being
held or to be held by Seller, if any, for each Tenant and the amount of interest
accrued thereon, if interest is required to be paid to any Tenant; (ix) any
future concession, rebate, allowance, free rent period or other considerations;
(x) any right of each Tenant to purchase or acquire an ownership interest in all
or any portion of the Property; and (xi) any breach or default by landlord or
Tenant in accordance with the provisions of subparagraph (G) below. There are no
tenants, licensees,
<PAGE>
concessionaires or other occupants or persons with the right of occupancy of any
portion of the Property except for Tenants set forth on Schedule "F". At the
Closing, Seller will assign to Purchaser, and Purchaser will assume from Seller,
all of Seller's interest in the Leases and the security deposits, by execution
and delivery of the assignment and assumption of leases ("Assignment and
Assumption of Leases") in the form annexed hereto and made a part hereof as
Schedule "G". At the Closing, the parties agree to execute letters notifying all
Tenants of the sale of the Property to Purchaser ("Tenant Notice") in the form
annexed hereto and made a part hereof as Schedule "H";
(F) True and complete copies of the Leases and
all amendments or modifications thereto have been given to
Purchaser for each Tenant listed on Schedule "F". There are no
amendments or modifications to the Leases which have not been
provided to Purchaser;
(G) The Leases are in full force and effect.
Neither Seller nor, except as set forth on Schedule "F", any Tenant is in breach
or default of its Lease obligations, and to the best of Seller's knowledge,
nothing has occurred which, with the passage of time and/or with the giving of
notice, might result in Seller or any Tenant being in breach or default of its
Lease obligations;
(H) At the time of Closing, all obligations of
Seller pursuant to the Leases with respect to performance of work or
installation of equipment in all respects shall have been
<PAGE>
completed, subject to the terms of this Agreement;
(I) No Tenant is entitled to receive or has been
offered or given any free rent, rent concessions, rebates, allowances or other
considerations which would be effective for any period after the date of this
Agreement, except as set forth in the Leases listed on Schedule "F," and no
Tenant has made a claim for any of the foregoing, except as otherwise herein
provided;
(J) To the best of Seller's knowledge, there are
no claims, offsets or charges asserted by any Tenant against rent, security
deposit or any other payment to be made by such Tenant;
(K) No person or entity, other than the aforesaid
Tenants, has or shall have any right to use, utilize or occupy the Property or
any part thereof, either as a tenant or otherwise;
(L) Seller shall obtain and deliver to Purchaser,
on or before the Closing, a duly executed estoppel certificate ("Estoppel
Certificate") in the form annexed hereto as Schedule "I" dated not more than
fifteen (15) days prior to Closing, from each Tenant;
(M) From and after the date of this Agreement,
without Purchaser's prior consent, Seller shall not: (i) accept prepayment of
rent more than one month in advance from any Tenant; (ii) grant any free rent,
rent concession, rebate, allowance or other consideration; (iii) modify or amend
any
<PAGE>
Leases; (iv) accept the surrender of any Leases; or (v) enter into any new
leases or other occupancy, license or concession arrangements with Tenants or
any other person or entity for the use of any portion of the Property;
(N) Except as otherwise provided herein in
Schedule "J" annexed hereto, there are no brokerage commissions or other fees
due in connection with the rental of any space at the Property, there will be no
obligation for such commissions or fees due at the Closing, and there will be no
obligations for such commissions or fees due after the Closing, including,
without limitation, any obligation to pay commissions or fees in connection with
the renewal or extension of the term of any Leases. All brokerage commissions in
connection with the leasing of any space in the Property, whether due prior to
Closing or thereafter, on account of the continued occupancy by any Tenant for
the lease term in effect at Closing, shall be paid by Seller at Closing or
allowed as a credit against the Purchase Price by Seller at Closing (in which
event Purchaser shall pay such commissions in accordance with the provisions of
the applicable brokerage agreements). All brokerage commissions in connection
with the leasing of any space in the Property on account of any unexercised
renewal, extension or taking of other space at the time of Closing shall be paid
by Purchaser. Each party shall indemnify, defend and hold the other harmless
from and against any and all costs and liabilities incurred by such party as a
result of the falsity of the aforesaid representation or the
<PAGE>
breach of the aforesaid obligation;
(O) At Closing, Seller shall deliver to Purchaser
an assignment (to the extent lawfully assignable) of all of its right, title and
interest in: (i) any existing Certificate of the Board of Fire Underwriters
covering the Property; (ii) any permits or licenses it may have pertaining to
the Property; (iii) all available site and building plans and specifications
relating to the Property; and (iv) all available Certificates of Occupancy;
(P) All existing guarantees and warranties which
Seller has received or will receive from contractors, subcontractors,
manufacturers, materialmen, distributors, sellers or others, regarding all or
any portion of the Property are set forth on Schedule "L" attached hereto and
made a part hereof (together with any additional guarantees and warranties
relating to the Property received after the date hereof, being collectively
referred to herein as "Guarantees"). At Closing, Seller shall assign to
Purchaser (to the extent the Guarantees are assignable) all of its right, title
and interest in and to all Guarantees;
(Q) All service, maintenance, vending,
concession, license, agency or other agreements affecting the Property or the
operation thereof ("Contract(s)") will be in force at the Closing and a true and
complete list of all Contracts are set forth on Schedule "M" annexed hereto and
made a part hereof. True copies of all Contracts have been delivered to
<PAGE>
Purchaser or shall be delivered to Purchaser within ten (10) days of the date
hereof. Any or all such Contracts, upon Purchaser's request, shall be assigned
by Seller to Purchaser at Closing and all Contracts are cancelable on not more
than thirty (30) days' notice. On request of Purchaser, Seller shall cancel any
or all of such Contracts as of the Closing Date. Between the date hereof and the
Closing, Seller shall not renew, extend, modify or terminate any of said
Contracts or enter into any other contract and/or agreement affecting the
Property or the operation thereof without the consent of Purchaser in each
instance first being obtained. No party to any Contract is in breach or default
thereunder, and to Seller's knowledge, nothing has occurred which with the
passage of time and/or with the giving of notice could constitute a breach or
default thereunder;
(R) At the time of Closing there shall not be
any, employment, collective bargaining or union agreements affecting the
Property or the operation thereof or any deferred income or retirement plans in
effect;
(S) There are no actions, suits, labor disputes,
litigation or proceedings ("Action(s)") pending or, to the knowledge of Seller,
threatened against or affecting Seller or the Property, the environmental
condition thereof or the operation thereof at law or in equity or before any
federal, state, municipal or governmental department, commission, board, bureau,
agency or instrumentality, nor does Seller have knowledge of any basis for any
such Action, which, if determined adversely
<PAGE>
to Seller, in any way would affect the Property or the operation thereof other
than as set forth on Schedule "N" annexed hereto and made a part hereof. None of
the Actions listed on Schedule "N" nor any subsequent Actions will be settled,
either prior to or after Closing, without Purchaser's consent, nor will Seller
take any material actions in connection therewith without first notifying
Purchaser;
(T) Seller has not, nor prior to Closing shall:
make a general assignment for the benefit of creditors; file a voluntary
petition in bankruptcy; be by any court adjudicated a bankrupt; take the benefit
of any insolvency act; be dissolved or liquidated, voluntarily or involuntarily;
or have a receiver or trustee appointed in any proceedings;
(U) Seller has no knowledge and has received no
notice of any application for any zoning change or pending zoning
ordinance or amendment, which would affect the Property;
(V) The execution, delivery and performance of
this Agreement in accordance with its terms does not violate any contract,
agreement, commitment, order, judgment, decree, law, regulation or ordinance to
which Seller is a party or by which Seller is bound or as to which any of its
assets is subject;
(W) Seller has not entered into any commitment or
any agreement or understanding with any municipality, county, state or federal
government agency or authority which would require the installation of any
improvements or the incurring of any cost or expense affecting the Property or
otherwise;
<PAGE>
(X) Seller presently maintains and shall continue
to maintain until Closing policies of insurance in accordance with Schedule "O"
attached hereto and made a part hereof;
(Y) Seller has no knowledge of any Federal, State
or local plans to change the highway or road system in the vicinity of the
Property or to restrict or change access from any such highway or road to the
Property or of any pending or threatened condemnation of the Property or any
part thereof or of any plans for improvements which might result in a special
assessment against the Property;
(Z) At Closing, no services, material or work
have been supplied by Seller's contractors, subcontractors or materialmen with
respect to the Property for which payment has not been made in full. If,
subsequent to the Closing Date, any mechanic's or other lien, charge or order
for the payment of money shall be filed against the Property or against
Purchaser or Purchaser's assigns, based upon any act or omission, or alleged act
or omission before or after the Closing Date, of Seller, its agents, servants or
employees, or any contractor, subcontractor or materialmen connected with the
construction and completion by Seller of improvements at the Property, or
repairs made to the Property by or on behalf of Seller (whether or not such
lien, charge or order shall be valid or enforceable as such), within ten (10)
days after notice to Seller of the filing thereof, Seller shall take such
action, by bonding, deposit, payment or otherwise, as will remove or satisfy
such lien of record against
<PAGE>
the Property;
(AA) Seller has provided Purchaser with all
reports and documents set forth on Schedule "P", which are all of the
Environmental Documents (as defined in Paragraph 14.(e)(iv) hereof) in its
possession or under its control related to the physical condition of the
Property. In addition, Seller has provided Purchaser with all books and records
necessary for Purchaser to conduct its due diligence of the Property;
(BB) Seller has no knowledge of any notices,
suits, investigations or judgments relating to any violations of any laws,
ordinances or regulations affecting the Property, (including, without
limitation, Environmental Laws [as defined in Paragraph 14.(e)(v) hereof]), or
any violations or conditions that may give rise thereto, and has no reason to
believe that any "Governmental Authority" (as defined in Paragraph 14.(e)(vi)
hereof) contemplates the issuance thereof, and there are no outstanding orders,
judgments, injunctions, decrees, directives or writ of any Governmental
Authority against or involving Seller or the Property; and
(CC) Except as disclosed on Schedule "Q" attached
hereto and made a part hereof:
(1) to the best of Seller's knowledge, there
are no Contaminants (as defined in Paragraph 14.(e)(i) hereof) on, under, at,
emanating from or affecting the Property, except those in compliance with all
applicable Environmental Laws;
(2) Seller has not, nor to Seller's
<PAGE>
knowledge, has any current occupant and any prior owner or occupant, of the
Property received any Notice (as defined in Paragraph 14.(e)(ix) hereof) or
advice from any Governmental Authority 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
Paragraph 14.(e)(ii) hereof) which would allow a Governmental Authority to
demand that a cleanup be undertaken;
(3) 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, produce, treat, store, handle,
dispose of, transfer or process Contaminants, whether or not any of those
parties has received Notice or advice from any Governmental Authority or any
other third party with respect thereto in violation of Environmental Laws;
(4) no portion of the Property now is or, to
Seller's knowledge, ever has been used as a Major Facility (as defined in
Paragraph 14.(e)(vii) hereof) and Seller shall not use, nor permit use of any
portion of the Property for that purpose;
(5) Seller has not transported any
Contaminants, nor to Seller's knowledge has any current or former occupant or
former owner transported Contaminants from the Property to another location
which was not done in compliance with all applicable Environmental Laws;
<PAGE>
(6) no ss. 104(e) informational request has
been received by Seller issued pursuant to CERCLA (as defined in
Paragraph 14.(e)(i) hereof);
(7) to the best of Seller's knowledge, there
is no asbestos or asbestos containing material in any friable
state or otherwise in violation of Environmental Laws on the
Property;
(8) to the best of Seller's knowledge, all
transformers and capacitators containing polychlorinated
biphenyls ("PCBs"), and all "PCB Items", as defined in 40 C.F.R.
ss. 761.3, located on or affecting the Property are identified in
Schedule "S" and are in compliance with all Environmental Laws;
(9) to the best of Seller's knowledge, there
are no above ground storage tanks or Underground Storage Tanks (as defined in
Paragraph 14.(e)(xi) hereof) at the Property, regardless of whether such tanks
are regulated tanks or not;
(10) to the best of Seller's knowledge, 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;
(11) to the best of Seller's knowledge, the
Property has not been used as a sanitary landfill facility as
defined in the Solid Waste Management Act, N.J.S.A. 13:1E-1 et
seq.;
(12) Seller and, to the best of Seller's
<PAGE>
knowledge, 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 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;
(13) to the best of Seller's knowledge, the
Property is not subject to any wetlands regulations, administered by the United
States of America, Army Corps of Engineers, the Environmental Protection Agency
or NJDEP (as defined in Paragraph 14.(e)(viii) hereof);
(14) there are no federal or state liens as
referred to under CERCLA or the Spill Act (as defined in
Paragraph 14.(e)(i) hereof) that have attached to the Property;
(15) Seller in the past has not and does not
now own, operate or control any Major Facility;
(16) Seller has not nor to the best of
Seller's knowledge has Seller permitted any occupant to engage in
any activity on the Property in violation of Environmental Laws;
(17) the Property is in material compliance
with Environmental Laws; and
(18) to the best of Seller's knowledge,
there are no engineering or institutional controls at the Property, including
without limitation, any deed notice, declaration of environmental restriction,
groundwater classification exception area or well restriction area pursuant to
N.J.S.A. ss. 13:1E-56 or
<PAGE>
N.J.S.A. 58:10B-13.
(b) Purchaser hereby represents, warrants and
covenants the following:
(A) Purchaser is a limited partnership of the
State of Delaware, in good standing, has the right and authority to execute this
Agreement and to consummate this transaction in accordance with the provisions
hereof and all persons executing this Agreement and all other applicable
documents on behalf of Purchaser, have the right, power and authority to do so;
(B) The execution, delivery and performance of
this Agreement in accordance with its terms does not violate any contract,
agreement, commitment, order, judgment, decree, law, regulation or ordinance to
which Purchaser is a party or by which it is bound or as to which any of its
assets is subject; and
(C) Purchaser shall provide Seller true copies of
authorization ("Purchaser's Authorization") authorizing or ratifying Purchaser's
entering into this Agreement and authorizing Purchaser's purchase of the
Property from Seller in accordance with the terms of this Agreement.
(c) In the event that either party knows or learns that any of
the representations contained in this Agreement are false or no longer are true
and accurate, such party forthwith shall deliver notice of such fact to the
other party, and the other party shall proceed diligently to cure or remedy such
misrepresentations. In the event that such misrepresentations cannot or shall
not be cured within thirty (30) days following
<PAGE>
delivery of notice thereof, then the notifying party shall have the right either
(i) to elect, nevertheless, to close title to the Property in accordance with
the provisions of this Agreement, or (ii) to declare this Agreement null and
void, by notice delivered to the non-curing party. The termination of this
Agreement pursuant to this Paragraph 6 shall not release the misrepresenting
party from any liability it may otherwise have to the other party by reason
thereof.
(d) Whenever in this Paragraph 6, a representation and/or
warranty is made to the knowledge of Seller, knowledge of Seller shall mean the
actual knowledge of William G. Price, Jr. and/or John S. McGarvey, without any
independent investigation other than reviewing the applicable representation
and/or warranty.
(e) The representations and warranties made by Seller in
Paragraphs 6(C), (E), (F), (H), (K), (N), (V), (W), (AA), (AB) and (AC) shall
survive the Closing for the applicable statute of limitations. The
representations and warranties made by Seller in Paragraphs 6(A), (B), (D), (G),
(I), (J), (L), (M), (O), (P), (Q), (R), (S), (T), (U), (X), (Y) and (Z) shall
survive the Closing for a period of one (1) year; provided, however, that no
claims for indemnification under Paragraphs 6(A), (B), (D), (G), (I), (J), (L),
(M), (O), (P), (Q), (R), (S), (X), (Y), and (Z), with respect to a breach of any
representation or warranty referred to above in this sentence may be maintained
by Purchaser unless Purchaser shall have delivered notice to Seller specifying
<PAGE>
the nature of such claim, which notice shall be delivered on or before the date
which is one (1) year after the Closing Date (the "Survival Date"). Upon the
giving of such notice as aforesaid, Purchaser shall have the right to commence
legal proceedings prior or subsequent to the Survival Date for the enforcement
of its rights under this Agreement. The representations and warranties made by
Purchaser in Paragraph 6 shall not survive the Closing.
65. LEASES AND TENANCIES.
(a) If any claim is made against Purchaser by any Tenant
asserting an offset against rent or otherwise, including any rent over-charges
or failure in construction or to provide services, with respect to any matter
which arose prior to Closing, Seller shall indemnify and hold Purchaser harmless
for all losses, damages and expenses (including, without limitation, reasonable
attorneys' fees and costs) incurred by Purchaser in connection thereof. After
Purchaser shall receive notice of a claim that may give rise to an indemnity
hereunder, Purchaser shall notify Seller; provided, however, the failure to give
any notice shall not relieve Seller from any liability hereunder unless such
failure impairs the right to defend such action. In the event any claim is
brought against Purchaser with respect to which Seller may have liability under
the indemnity agreement contained in this Paragraph 7.(a), the claim may, upon
written agreement of Seller that it is obligated to indemnify against the
particular claim under the indemnity agreement contained herein,
<PAGE>
be settled by Seller with the prior written consent of Purchaser, which shall
not be unreasonably withheld.
(b) Purchaser shall assume the Leases following the Closing
and shall indemnify and hold Seller harmless for all losses, damages and
expenses (including, without limitation, reasonable attorneys' fees and costs)
incurred by Seller arising from any claim by a Tenant in respect to any
obligation to Tenant assumed by Purchaser or any advance rental credited to
Purchaser. After Seller shall receive notice of a claim that may give rise to an
indemnity hereunder, Seller shall notify Purchaser; provided, however, the
failure to give any notice shall not relieve Purchaser from any liability
hereunder unless such failure impairs the right to defend such action. In the
event any claim is brought against Seller with respect to which Purchaser may
have liability under the indemnity agreement contained in this Paragraph 7.(b),
the claim may, upon written agreement of Purchaser that it is obligated to
indemnify against the particular claim under the indemnity contained herein, be
settled by Purchaser with the prior written consent of Seller, which shall not
be unreasonably withheld.
(c) Seller agrees not to apply or return any security deposit
in whole or in part. At the Closing, Seller shall turn over to Purchaser all
Tenant security deposits plus any interest earned thereon for the benefit of
Tenant together with an updated Schedule "F". Seller shall indemnify Purchaser
for any claims made, suits commenced or judgments entered in connection with the
<PAGE>
security deposits for the period through the Closing Date and Purchaser shall
indemnify Seller for any claims made, suits commenced or judgments entered into
in connection with all security deposits for the period subsequent to the
Closing Date.
66. CLOSING.
(a) Closing shall occur at 10:00 a.m. at the offices of Cole,
Schotz, Meisel, Forman & Leonard, P.A., Court Plaza North, 25 Main Street,
Hackensack, New Jersey, on the date which is fifteen (15) days after
satisfaction or waiver of all conditions and contingencies set forth herein, or
at such other date, time and/or place as the parties may agree upon; provided,
however, that if such date shall be a Saturday, Sunday or legal holiday, then
Closing shall take place on the first business date thereafter (herein referred
to as the "Closing" and the "Closing Date" respectively).
(b) At Closing, the following shall be executed and/or
delivered:
(i) By Seller:
(A) The Deed [as hereinafter described in
subparagraph (c)];
(B) Seller's certification that the
representations and warranties set forth in this Agreement are
true and accurate as of the Closing;
(C) Seller's affidavit of title, the form
and substance of which shall be subject to the reasonable
approval of Title Company and Purchaser's attorneys;
<PAGE>
(D) Seller's Resolutions;
(E) Bill of Sale and/or assignments if so
requested by Purchaser;
(F) The Assignment and Assumption of Leases
together with schedules of security deposits paid by Tenants and any
applications thereof made by Seller. At Closing, Seller shall pay to Purchaser
by separate certified check or allow as a credit against the Purchase Price, the
aggregate amount of all security deposits held under Leases;
(G) The original Leases and all amendments,
modifications and guarantees thereto, and all brokerage
commission agreements;
(H) The Tenant Notice(s) to Tenants;
(I) The Estoppel Certificates;
(J) Certification of non-foreign status in
accordance with Internal Revenue Code Section 1445, as amended;
(K) Keys to all doors to, and equipment and
utility rooms located in the Property, which keys shall be
properly tagged for identification;
(L) An endorsement to all transferable
insurance policies,if any, approved by Purchaser, naming Purchaser as the party
insured, together with the original of each such policy;
(M) As-built plans and specifications in
accordance with the provisions of Paragraph 4 and permanent
certificates of occupancy for each building and improvement
<PAGE>
comprising a part of the Property;
(N) All original licenses and permits
pertaining to the Property and required for the use or occupancy
thereof together with a duly executed assignment thereof to
Purchaser;
(O) True and complete Records;
(P) All Guarantees and Contracts, together
with a duly executed assignment thereof to Purchaser;
(Q) ISRA Approval (as hereinafter defined in
Paragraph 14.(a) hereof);
(R) Mutually satisfactory closing statement;
(S) The Guaranty in the form of Schedule "R"
annexed hereto and made a part hereof;
(T) Such other items to be provided to
Purchaser pursuant to this Agreement; and
(U) Such other instruments as reasonably may
be required by Purchaser's counsel or the Title Company to
effectuate this transaction.
(ii) By Purchaser:
(A) The Purchase Price;
(B) The Assignment and Assumption of Leases;
(C) Tenant Notices to Tenants;
(D) Mutually satisfactory closing statement;
(E) Such other items to be provided to
Seller pursuant to this Agreement; and
(F) Such other instruments as reasonably may
<PAGE>
be required by Seller's counsel to effectuate this transaction.
(c) The deed ("Deed") to be delivered at Closing shall
be a Bargain and Sale Deed with covenants against grantors' acts, in proper form
for recording so as to convey to Purchaser good, marketable and insurable fee
simple title to the Property in accordance herewith.
(d) The words "Closing", "title closing", "Closing of title",
"delivery of deed" and words of similar import are used interchangeably in this
Agreement, as the sense of text indicates, to mean the event of consummation of
this sale in accordance with the terms of this Agreement.
67. CLOSING ADJUSTMENTS.
(a) The following are to be apportioned as of the
Closing Date:
(i) real property taxes;
(ii) water rates and charges;
(iii) sewer taxes and rents;
(iv) all base rent payments;
(v) common area and other additional rent
charges, if any;
(vi) fuel oil on hand, determined at Seller's
cost;
(vii) insurance premiums on transferable
policies, if any, approved by Purchaser; and
(viii) annual license, permit and inspection
fees, if any, provided that Seller's rights thereunder (or with
<PAGE>
respect thereto) are transferable to Purchaser.
(b) (i) Apportionment of real property taxes, water rates and
charges and sewer taxes and rents shall be made on the basis of the fiscal year
for which assessed solely to the extent actually received by Seller from Tenants
or actually paid or payable by Seller. If the Closing Date shall occur before
any or all of the foregoing are fixed, the apportionment of real property taxes
shall be made on the basis of the tax rate for the preceding year applied to the
latest assessed valuation. After the final real property taxes, water rates and
charges and sewer taxes and rents are fixed, Seller and Purchaser shall make a
recalculation of the apportionment of same, and Seller or Purchaser, as the case
may be, shall make an appropriate payment to the other based on such
recalculation.
(ii) If at the time for the delivery of the Deed,
the Premises shall be or shall have been affected by an assessment or
assessments (including special and/or added) which are or may become payable in
annual installments of which the first installment is then due 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
delivery of the Deed for the Premises, shall be deemed to be due and payable and
to be liens upon such Premises affected thereby and shall be paid and discharged
by Seller upon the delivery of the Deed for the Premises. If any assessment with
respect to the Premises is unconfirmed at the time of
<PAGE>
Closing, or if subsequent to Closing any assessment, including special or added,
is determined to be incorrect, then, immediately after the amount of the
assessment has been established, or the confirmed assessment corrected as a
result of a prior error, Seller shall make an appropriate payment to Purchaser
within ten (10) days of the tax assessor's calculation of the assessment.
Notwithstanding the foregoing, if the tenant(s) of the Premises are obligated
under a written lease for the payment of the entire assessment (confirmed and/or
unconfirmed), then with respect to such assessment Purchaser shall seek payment
from the Tenant(s), and any assessment not otherwise the obligation of the
Tenant(s) shall be the obligation of Seller. Seller shall indemnify and hold
Purchaser harmless from and against all costs and expenses, including reasonable
attorneys fees, incurred by Purchaser in connection with Seller's failure to
perform Seller's obligation under this Paragraph 9(b)(ii).
(c) If there shall be any water meters on the Property (other
than meters measuring water consumption costs which are the obligation of
Tenants to pay), Seller shall furnish readings to a date not more than ten (10)
days prior to the Closing Date, and the unfixed water rates and charges and
sewer taxes and rents, if any, based thereon for the intervening time, shall be
apportioned on the basis of such last readings.
(d) The amount of unpaid taxes, assessments, water charges and
sewer rents which Seller is obligated to pay and
<PAGE>
discharge, with interest and penalties thereon to the fifth (5th) day after the
Closing Date, at the option of Seller, may be allowed to Purchaser out of the
Purchase Price, provided that official bills therefor with interest and
penalties thereon are furnished by Seller at the Closing.
(e) If any refund of real property taxes, water rates and
charges or sewer taxes and rents is made after the Closing Date for a period
prior to the Closing Date, the same shall be applied first to the costs incurred
in obtaining same and second to the refunds due to Tenants by reason of the
provisions of their respective Leases. The balance, if any, of such refund shall
be paid to Seller (for the period prior to the Closing Date) and Purchaser (for
the period commencing with the Closing Date).
(f) To the extent that Seller receives rent payments after the
Closing Date for any period from and after the Closing Date, the same shall be
held in trust and immediately paid to Purchaser.
(g) All rent payments received by Seller or Purchaser after
Closing shall be applied firstly against out-of-pocket costs of collection, then
to rents due and owing by such Tenant for the periods from and after Closing and
thereafter against rents due and owing prior to Closing in inverse order of due
date.
(h) All realty transfer fees and charges (other than recording
fees for the Deed) shall be paid by Seller at Closing.
<PAGE>
68. RISK OF LOSS.
(a) Seller assumes the risk of loss or damage to the Property
beyond ordinary wear and tear until delivery of the Deed to Purchaser and shall
notify Purchaser forthwith upon the occurrence of any such casualty ("Casualty
Notice"). In the event of any casualty in which the Casualty Threshold (as
hereinafter defined) is not established, or in the event of a casualty in which
the Casualty Threshold is established and if Purchaser elects to complete the
purchase of the Property hereunder, Seller shall restore and repair the damaged
Property to its condition immediately preceding such casualty and in accordance
with its obligations pursuant to Leases, and without a change in the Purchase
Price.
(b) If, prior to the Closing Date, the Property shall
be damaged by fire or other casualty and the estimated cost of
repair and/or restoration shall exceed twenty-five (25%) percent
of the Purchase Price or reasonably shall be estimated to require
more than one hundred eighty (180) days to repair or restore
(collectively, "Casualty Threshold"), Purchaser may, by notice to
Seller, elect to terminate this Agreement. If this Agreement is
so terminated, the Letter of Credit forthwith shall be returned
to Purchaser. Purchaser shall notify Seller of its decision
within sixty (60) days of receipt of the Casualty Notice, which
shall include the amount of insurance coverage, the amount of
insurance received, if any, the reasonably estimated cost of
repairs and the reasonably estimated time in which to complete
<PAGE>
said repairs, and the Closing shall be postponed accordingly.
(c) Notwithstanding the foregoing, any proceeds of
loss of rent insurance for a casualty occurring prior to the Closing Date,
whether received prior to or following the Closing, shall be apportioned as of
the Closing Date.
69. CONDEMNATION. In the event that, prior to Closing, all or any
portion of the Property shall be condemned or taken as the result of the
exercise of the power of eminent domain, or by deed in lieu thereof
(collectively, a "Taking"), or if such proceedings shall have commenced or shall
be threatened, Seller promptly shall notify Purchaser ("Taking Notice").
Purchaser, in its sole judgment, shall notify Seller within sixty (60) days
following receipt of the Taking Notice, that: (1) the remaining portion of the
Property is not suitable or economically viable for its intended use of the
Property, in which event Purchaser may terminate this Agreement; or (2) the
remaining portion of the Property is suitable and economically viable for its
intended use, in which event Closing shall proceed and Purchaser and Seller
shall have the right to participate jointly in the condemnation proceedings and
the proceeds thereof shall belong to Seller, but Purchaser shall be entitled to
a credit against the Purchase Price in an amount equal to said proceeds, unless
such condemnation proceedings shall be pending on the Closing Date, in which
event there shall not be any credit and at Closing, Seller shall assign all its
right, title and interest in and to said proceedings and award to Purchaser.
<PAGE>
70. APPROVALS FOR TRANSFER. In the event that any Governmental
Authority shall have an ordinance, law, rule, regulation or other requirement
requiring a new Certificate of Occupancy or other governmental authorization to
be issued in connection with the transfer of title to the Property, or in the
event that on the Closing Date there is any such requirement, then and in any of
such events, Seller shall use its best efforts, at its sole cost and expense, to
obtain and deliver to Purchaser, the Certificate of Occupancy or other
governmental authorization.
71. DUE DILIGENCE PERIOD.
(a) Through the period ending on the date which is forty-five
(45) days from the date of this Agreement (the "Due Diligence 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, environmental, access, development
studies and such 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, Contracts,
engineering and environmental reports, development approval agreements, permits
and approvals. Purchaser shall repair and restore any portion of the surface of
<PAGE>
the Property disturbed by Purchaser, its agents, representatives 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.
(b) During the Due Diligence Period, Purchaser, its agents,
representatives and contractors, shall have unlimited access to the Property 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 this Paragraph. 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. In addition, Seller will
deliver to Purchaser promptly after request, true and complete copies of all
test borings, Environmental Documents, 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 comes within Seller's possession or control after the date of
this Agreement, Seller promptly shall submit true and complete copies of the
same to Purchaser. Seller shall notify Purchaser of any dangerous conditions on
the Property, including, without limitation,
<PAGE>
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, representatives or
contractors.
(c) Purchaser shall obtain, or cause its contractors, agents
and representatives to obtain, liability insurance in an amount equal to One
Million ($1,000,000.00) Dollars on a per occurrence and aggregate basis on
account of personal injury to one or more persons and property damage with
respect to Purchaser's activities and entry onto the Property. Upon request of
Seller, the policy shall name Seller as an additional insured. In addition,
Purchaser agrees to indemnify and hold Seller harmless from any damage or injury
to persons or property arising out of or in connection with Purchaser or its
contractors, agents or representatives entering upon the Property.
(d) Purchaser may terminate this Agreement for any reason or
for no reason by notice to Seller given within the Due Diligence Period. In the
event Purchaser terminates this Agreement during the Due Diligence Period, this
Agreement shall be null and void, the Letter of Credit forthwith shall be
returned to Purchaser, copies of any reports or studies prepared by third
parties as part of Purchaser's investigations during the Due Diligence Period
(if expressly permitted by such third party), shall be delivered to Seller
(except, if this Agreement is terminated as a result of Seller's breach hereof).
In the event Purchaser does not terminate this Agreement by the end of
<PAGE>
the Due Diligence Period, Purchaser shall be deemed to have elected not to
terminate this Agreement.
72. ENVIRONMENTAL PROVISIONS.
(a) Notwithstanding anything to the contrary contained in this
Agreement, the obligation of Purchaser to pay the Purchase Price and otherwise
proceed to Closing shall be subject to the condition, that Seller obtain from
the Element, (as hereinafter defined in Paragraph 14.(e)(iii) hereof) pursuant
to ISRA (as hereinafter defined in Paragraph 14.(e)(i) hereof), and deliver to
Purchaser, at least five (5) days prior to Closing (the "ISRA Compliance Date"),
together with all submissions upon which any one or more of the following is
based, either:
(i) a Letter of Non-Applicability;
(ii) a de minimis quantity exemption;
(iii) an unconditional approval of a Negative
Declaration; or
(iv) an unconditional No Further Action Letter;
(collectively the "ISRA Approval") for which Seller shall apply promptly. In no
event shall an ISRA Approval involve any engineering or institutional controls,
including without limitation, capping, deed notice, declaration of environmental
restriction or other institutional control notice pursuant to P.L. 1993 c. 139,
a groundwater classification exception area or a well restriction area. If the
requirements of this Paragraph 14.(a) are not satisfied on or before the ISRA
Compliance Date, Purchaser thereafter shall have the right, by notice to Seller,
<PAGE>
to extend the ISRA Compliance Date or to terminate this Agreement, in which
latter event this Agreement shall be rendered null and void and of no further
force or effect, Seller shall refund to Purchaser all charges made for title
examination, municipal searches and survey fees, the Letter of Credit forthwith
shall be returned to Purchaser and neither party shall have further liability or
obligation to the other under or by virtue of this Agreement.
(b) Contemporaneously with the execution of this Agreement,
and subsequently promptly upon receipt by Seller or its 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.
<PAGE>
(c) Seller shall notify Purchaser in advance of all meetings
scheduled between Seller or its representatives and NJDEP, and Purchaser and/or
its 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 any and all claims, liabilities, losses, deficiencies, damages,
interest, penalties and costs, foreseen or unforeseen including, without
limitation, reasonable counsel, engineering and other professional or expert
fees, which Purchaser may incur, by reason of or resulting directly or
indirectly, wholly or partly, from any breach, inaccuracy, incompleteness or
nonfulfillment of any representation, warranty, covenant or agreement herein by
Seller, or by reason of Seller's actions or non-action with regard to any of
Seller's obligations pursuant to this Paragraph 14.
(e) The following terms shall have the following meanings when
used in this Agreement:
(i) "Contaminants" shall include, without
limitation, any regulated substance, toxic substance, hazardous
substance, hazardous waste, pollution, pollutant or contaminant,
as defined or referred to in the New Jersey Environmental Rights
Act, N.J.S.A. 2A:35A-1 et seq.; the New Jersey Spill Compensation
and Control Act, N.J.S.A. 58:10-23.11 et seq. (the "Spill Act");
the New Jersey Air Pollution Control Act, N.J.S.A. 26:2C-1 et
seq.; the Hazardous Substances Discharge: Reports and Notices
<PAGE>
Act, N.J.S.A. 13:1K-15 et seq.; the Industrial Site Recovery Act, N.J.S.A.
13:1K-6 et seq. ("ISRA"); the "Tanks Laws" as hereinafter defined in Paragraph
14.(e)(x) hereof; the Resource Conservation and Recovery Act, as amended, 42
U.S.C. ss.6901 et seq. ("RCRA"); the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. ss.9601 et seq.
("CERCLA"); the Water Pollution and Control Act, 33 U.S.C. ss.1251 et seq.;
together with any amendments thereto, regulations promulgated thereunder and all
substitutions thereof, as well as words of similar purport or meaning referred
to in any other applicable federal, state, county or municipal environmental
statute, ordinance, 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) "Element" shall mean the Industrial Site
Evaluation Element or its successor of the NJDEP.
(iv) "Environmental Documents" shall mean all
<PAGE>
environmental documentation in the possession or under the control of Seller
concerning the Property, or its environs, including without limitation, all
sampling plans, cleanup plans, preliminary assessment plans and reports, site
investigation plans and reports, remedial investigation plans and reports,
remedial action plans and reports, or the equivalent, sampling results, sampling
result reports, data, diagrams, charts, maps, analysis, conclusions, quality
assurance/quality control documentation, correspondence to or from any
Governmental Authority, submissions to any Governmental Authority and
directives, orders, approvals and disapprovals issued by any Governmental
Authority.
(v) "Environmental Laws" shall mean 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.
(vi) "Governmental Authority" shall mean the
federal, state, county or municipal government, or any department, agency,
bureau, board, commission, office or other body obtaining authority therefrom,
or created pursuant to any law.
(vii) "Major Facility" is as defined in the Spill
Act.
(viii) "NJDEP" shall mean the New Jersey
<PAGE>
Department of Environmental Protection or its successor.
(ix) "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.
(x) "Tank Laws" shall mean the New Jersey
Underground Storage of Hazardous Substances Act, N.J.S.A. 58:10A-
21 et seq., and the federal underground storage tank law
(Subtitle I) of RCRA, together with any amendments thereto,
regulations promulgated thereunder, and all substitutions
thereof, and any successor legislation and regulations.
(xi) "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 in the Tank Laws.
(f) Seller covenants and agrees that between the date hereof
and the Closing Date it shall perform or observe the following:
(i) Promptly notify Purchaser of, and promptly
deliver to Purchaser, a certified 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
<PAGE>
for the remediation of all Contaminants existing on, under, at emanating from or
affecting the Property as of the date of Closing, in violation of Environmental
Laws, regardless of the date of discovery, notwithstanding anything to the
contrary set forth herein. 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 pursuant to P.L. 1993, c. 139, or a groundwater classification
exception area or well restriction area. Any such remediation and associated
activities shall be undertaken pursuant to a right of access agreement
reasonably acceptable to Purchaser;
(iii) Contemporaneously with the signing 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.
73. CONDITIONS TO CLOSING. In addition to other conditions set forth in
this Agreement, Purchaser's obligation to close title to the Property is
expressly conditioned upon and subject to the occurrence of all of the
following:
(a) Seller shall have completed subdivision of the Land in the
configuration set forth on Schedule "A-1", all requisite governmental approvals
shall have been obtained, and all conditions to subdivision shall have been
satisfied including, without limitation, the filing in the public records of the
subdivision plat;
<PAGE>
(b) Substantial Completion (as hereinafter defined) of all
work set forth in the Plans and Specifications, including all tenant improvement
work required under the Lease (including change orders);
(c) Tenant has accepted delivery of possession of the Property
pursuant to the terms and conditions of the Lease;
(d) A final, unconditional Certificate of Occupancy permitting
occupancy of the Property for Tenant's use has been issued by all Governmental
Authorities having jurisdiction;
(e) Tenant has delivered the security deposit and has
commenced the payment of rent required to be paid pursuant to the terms and
conditions of the Lease;
(f) Tenant shall have delivered the Estoppel
Certificate;
(g) Written certification of McGarvey Construction Co., Inc.
that the work has been fully completed in accordance with the Plans and
Specifications (or in accordance with the Plans and Specifications as amended
after the date hereof provided any such amendments have been approved in writing
by Purchaser), the provisions hereof and all legal requirements, and that all
necessary certificates and approvals required to be obtained from any
Governmental Authority having jurisdiction over the Property have been obtained;
(h) Receipt of an absolute unconditional waiver of liens from
all contractors and subcontractors for all work performed at the Property; and
<PAGE>
(i) All contractors and subcontractors have been paid in full
for performance of work at the Property.
The term "Substantial Completion" as used herein shall mean that only
so-called "punch list" items of work which shall be limited to such unfinished
minor items which, when considered as a whole, do not materially adversely
affect Tenant's occupancy of the Property, and otherwise are permitted pursuant
to the terms of the Lease. Seller covenants and agrees to fully complete any
punch list items not later than the date which is twenty (20) days after Seller
receives notification thereof or within the time period set forth in the Lease.
74. NOTICES.
(a) Any notice, request, consent, approval or demand
("notice") which, pursuant to the provisions of this Agreement or otherwise,
must or may be given or made by either party hereto to the other, shall be in
writing and shall be given by such party or its attorney and shall be delivered
by personal delivery, by mailing same via certified mail, return receipt
requested, postage prepaid, in a United States Post Office depository, by
delivery to a postal or private expedited form of delivery service, or
telecopied to the intended recipient at the telecopy number set forth therefor
below (with hard copy to follow), addressed to Purchaser at its address set
forth in the heading to this Agreement, Attention: Roger Thomas, Esq., (fax
908-272- 6755), with a copy given in the aforesaid manner to Cole, Schotz,
Meisel, Forman & Leonard, P.A., Court Plaza North, 25 Main
<PAGE>
Street, P.O. Box 800, Hackensack, New Jersey 07602-0800, Attention: Richard W.
Abramson, Esq., (fax 201-489-1536), and to Seller to William Price (fax
609-235-3043) at the address set forth in the heading to this Agreement with a
copy given in the aforesaid manner to Archer & Greiner, One Centennial Square,
Haddonfield, New Jersey 08033, Attention: Gary L. Green, Esq., (fax
609-795-0574).
(b) Notice shall be deemed delivered on the day of personal
delivery, on the day telecopied, on the first business day following deposit
with the overnight carrier or on the second business day following deposit in
the Post Office depository, as the case may be.
(c) Either party may designate a different person or address
by notice to the other party given in accordance herewith.
75. BROKER. Each party represents and warrants to the other party that
it dealt with no broker or other person entitled to claim fees for such services
in connection with the negotiation, execution and delivery of this Agreement,
other than Jackson Cross (hereinafter referred to as the "Broker"). Seller agree
to pay Broker pursuant to a separate agreement with Broker, which agreement
shall provide, inter alia, that Broker shall not have any claim whatsoever for
commissions or other fees against Purchaser whether or not Closing shall occur,
including failure to close due to the default of Purchaser hereunder. Based upon
the aforesaid representations, warranties and covenants, each
<PAGE>
party agrees to defend, indemnify and hold the other party harmless from and
against any and all claims for finders' fees or brokerage or other commission
which at any time may be asserted against the indemnified party, including any
claim by Broker against Purchaser, founded upon a claim that the substance of
the aforesaid representations of the indemnifying party is untrue. Such
indemnification shall include, but not be limited to, all commission claims, as
well as all costs, expenditures, legal fees and expert fees reasonably incurred
in defending any claim of any third party. In the event that by settlement or
otherwise, any monies or other consideration is awarded to or turned over to any
third party as a result of a commission claim, it is the intention of the
parties hereto that the indemnifying party shall be solely responsible therefor.
76. DEFAULT.
(a) If Purchaser shall default in the payment of the Purchase
Price or otherwise shall default in the performance of any of its other
obligations pursuant to this Agreement, Seller, as its sole and exclusive
remedy, shall be entitled to receive, as liquidated damages and not as a
penalty, the Letter of Credit and the right to convert same to cash, it being
acknowledged that the actual damages which may be suffered by Seller in the
event of any default by Purchaser shall be difficult to ascertain, plus the
costs and expenses set forth in subparagraph (c) below. If the Letter of Credit
is converted to cash, Seller shall be entitled to receive any interest earned on
such cash.
<PAGE>
(b) If Seller shall default in any of its obligations
hereunder, Purchaser shall have the right to (i) terminate this Agreement by
notice to Seller, in which event the Letter of Credit shall be returned to
Purchaser, and obtain from Seller damages suffered by Purchaser plus the costs
and expenses set forth in subparagraph (c) below, or (ii) seek specific
performance by Seller of Seller's obligations hereunder, and if Purchaser is
successful, in addition obtain from Seller the costs and expenses set forth in
(c) below together with damages suffered by Purchaser.
(c) In the event of litigation arising out of this Agreement,
the prevailing party shall be entitled to recover from the losing party, costs
and expenses incurred by the prevailing party, including reasonable legal fees
and disbursements.
77. SURVIVAL. It is agreed that all of the terms, agreements,
covenants, promises, provisions, indemnifications, representations and
warranties set forth herein shall, except as otherwise specifically set forth in
this Agreement, survive Closing and delivery of the Deed.
78. INDEMNITY.
(a) Seller agrees to indemnify, defend and save harmless
Purchaser and its respective representatives, employees, agents, constituent
members, successors and assigns from and against all claims, actions, demands,
suits, liabilities and damages (i) subject to the limitations set forth in
Paragraph 6.(e), resulting from the breach or default of any covenant,
<PAGE>
provision, representation or warranty of Seller including all reasonable costs
and expenses incurred by Purchaser in the enforcement of this Paragraph, or (ii)
imposed upon or incurred by Purchaser, or allegedly due by Purchaser, arising
out of or relating to the ownership, operation, leasing, repair or improvement
of or otherwise dealing with, the Property, or by reason of any event or
occurrence on, or relating to, the Property which occurred, accrued or related
to an event occurring at any time prior to the Closing Date.
(b) Purchaser agrees to indemnify, defend and save harmless
Seller and its representatives, employees, agents, constituent members,
successors and assigns from and against all claims, actions, demands, suits,
liabilities and damages (i) subject to the limitations set forth in Paragraphs
6.(e) and 18, resulting from the breach or default of any covenant, provision,
representation or warranty of Purchaser or (ii) imposed upon or incurred by
Seller, or allegedly due by Seller, arising out of or relating to the ownership,
operation, leasing, repair or improvement of or otherwise dealing with, the
Property, or by reason of any event or occurrence on, or relating to, the
Property which occurred, accrued or related to an event occurring at any time
after the Closing Date.
79. ASSIGNMENT. This Agreement may not be assigned by Purchaser,
without the consent of Seller (which consent shall not be unreasonably withheld,
delayed or conditioned), except that no such consent shall be required with
respect to an assignment to
<PAGE>
any affiliate of Purchaser. Upon such assignment, Purchaser named herein shall
be relieved of any further liability for any of the terms, promises and
conditions of this Agreement on its part to be performed hereunder.
80. CROSS DEFAULT. Simultaneously with the execution and delivery of
this Agreement, Purchaser has entered into a certain Agreement of Sale with
Seller and certain affiliates of Seller (the "Agreement of Sale") relating to
certain property more particularly described on Schedule "T"; and a certain
agreement with an affiliate of Seller (the "Development Agreement") relating to
certain property located in Moorestown, New Jersey as more particularly
described in the Development Agreement. This Agreement and the obligations of
the parties hereunder are subject to performance by the respective parties to
the Development Agreement and/or the Agreement of Sale of their respective
obligations which are required to be performed prior to the Closing Date in
accordance with the terms thereof. If Seller or its related entities default in
their obligations under the Agreement of Sale and/or the Development Agreement,
Purchaser shall have the right to proceed with the purchase of the Property, to
declare a default hereunder, and/or to terminate this Agreement. If Purchaser
shall default in its obligations under the Development Agreement and/or the
Agreement of Sale, Seller shall have the right to declare a default hereunder.
<PAGE>
81. ESCROW AGENT.
(a) The Letter of Credit shall be held in escrow by Escrow
Agent and released on the terms hereinafter set forth.
(b) If Escrow Agent receives notice from Purchaser or
Purchaser's attorney that Purchaser has terminated this Agreement pursuant to
Paragraph 5 or 13 hereof, Escrow Agent shall immediately return the Letter of
Credit to Purchaser without application of Paragraph 23(f), (h) and (i);
(c) At the Closing, Escrow Agent shall deliver the Letter of
Credit to Purchaser.
(d) Any notice(s) to and from Escrow Agent shall be given in
accordance with Paragraph 16 hereof.
(e) If Escrow Agent receives a notice signed by Seller or
Seller's attorney stating that Purchaser has defaulted in the performance of its
obligations pursuant to this Agreement, Escrow Agent shall deliver a copy of
such notice to Purchaser. If Escrow Agent shall not have received notice of
objection from Purchaser within ten (10) days after Escrow Agent has delivered
such notice, Escrow Agent shall deliver the Letter of Credit to Seller. If
Escrow Agent shall receive a timely notice of objection from Purchaser as
aforesaid, Escrow Agent promptly shall forward a copy thereof to Seller.
(f) If Escrow Agent receives a notice signed by Purchaser or
Purchaser's attorney stating that this Agreement has been canceled or terminated
and that Purchaser is entitled to the Letter of Credit, or that Seller has
defaulted in the performance
<PAGE>
of its obligations pursuant to this Agreement, Escrow Agent shall deliver a copy
of such notice to Seller. If Escrow Agent shall not have received notice of
objection from Seller within ten (10) days after Escrow Agent has delivered such
notice, Escrow Agent shall deliver the Letter of Credit to Purchaser. If Escrow
Agent shall receive a timely notice of objection from Seller as aforesaid,
Escrow Agent promptly shall forward a copy thereof to Purchaser.
(g) If Escrow Agent receives notice from either party
authorizing delivery of the Letter of Credit to the other party, Escrow Agent
shall deliver the Letter of Credit in accordance with such instructions.
(h) If Escrow Agent receives a notice of objection as
aforesaid, Escrow Agent shall convert the Letter of Credit to cash and hold such
proceeds in an interest bearing FDIC insured bank in New Jersey until Escrow
Agent receives either: (i) a notice signed by both Seller and Purchaser stating
who is entitled to the Letter of Credit; or (ii) a final order of a court of
competent jurisdiction directing disbursement in a specific manner, in either of
which events Escrow Agent shall deliver the Letter of Credit in accordance
herewith or in accordance with such notice or order. Escrow Agent shall not be
or become liable in any way or to any person for its refusal to comply with any
requests or demands until and unless it has received a direction of the nature
described in (i) or (ii) above.
<PAGE>
(i) Notwithstanding the foregoing provisions of Subparagraph
(g) above, if Escrow Agent shall have received a notice of objection as
aforesaid, or shall have received at any time before actual delivery of the
Letter of Credit, a notice signed by either Seller or Purchaser advising that
litigation between Seller and Purchaser over entitlement to the Letter of Credit
has been commenced, Escrow Agent shall have the right, upon notice to both
Seller and Purchaser to deposit the Letter of Credit with the Clerk of the Court
in which any litigation is pending, whereupon Escrow Agent shall be released of
and from all liability hereunder except for any previous gross negligence or
willful default.
(j) Escrow Agent shall not be liable for any error or judgment
or for any act done or omitted by it in good faith, or for any mistake of fact
or law, and is released and exculpated from all liability hereunder except for
willful misconduct or gross negligence.
(k) Escrow Agent's obligations hereunder shall be as a
depositary only, and Escrow Agent shall not be responsible or liable in any
manner whatever for the sufficiency, correctness, genuineness or validity of any
notice, instructions or other instrument furnished to it or deposited with it,
or for the form of execution of any thereof, or for the identity or authority of
any person depositing or furnishing same.
(l) Escrow Agent shall not have any duties or responsibilities
except those set forth in this Agreement and
<PAGE>
shall not incur any liability in acting upon any signature, notice, request,
waiver, consent, receipt or other paper or document believed by it to be
genuine, and Escrow Agent may assume that any person purporting to give any
notice or advice on behalf of any party in accordance with the provisions hereof
has been duly authorized to do so.
(m) Escrow Agent shall be entitled to consult with counsel in
connection with its duties hereunder, including attorneys at its firm. The
parties shall reimburse Escrow Agent, jointly and severally, for all costs and
expenses incurred by Escrow Agent in performing its duties as Escrow Agent
including, but not limited to, reasonable attorneys' fees (either paid to
retained attorneys or amounts representing the fair value of services rendered
to itself).
(n) The terms and provisions of this Paragraph shall create no
right in any person, firm or corporation other than the parties hereto and their
respective successors or assigns, and no third party shall have the right to
enforce or benefit from the terms hereof.
(o) In the event of any dispute, disagreement or suit between
Seller and Purchaser, whether pertaining to the Letter of Credit, this Agreement
or otherwise, Escrow Agent shall have the right to represent or otherwise serve
as attorneys for Seller.
(p) Escrow Agent is designated the "real estate reporting
person" for purposes of Section 6045 of Title 26 of the United States Code and
Treasury Regulation 1.6045-4 and any
<PAGE>
instructions or settlement statement prepared by Escrow Agent shall so provide.
Upon the consummation of the transaction contemplated by this Agreement, Escrow
Agent shall file Form 1099 information return and send the statement to Seller
as required under the aforementioned statute and regulation.
(q) The applicable provisions of this Paragraph shall survive
the Closing or termination of this Agreement.
82. MISCELLANEOUS.
(a) This Agreement shall inure to the benefit of and shall be
binding upon the parties and their respective heirs, successors, legal
representatives and assigns.
(b) This Agreement may be executed in one or more
counterparts, each of which when so executed and delivered by each party to the
other shall be deemed an original, but all of which when taken together shall
constitute but one and the same instrument.
(c) At any time or from time to time, upon written request of
the other party, each party shall execute and deliver all such further documents
and do all such other acts and things as reasonably may be required to confirm
or consummate the within transaction.
(d) The captions preceding the paragraphs of this Agreement
are intended only as a matter of convenience and for reference and in no way
define, limit or describe the scope of this Agreement or the intent of any
provision hereof.
(e) This Agreement constitutes the entire agreement
<PAGE>
between the parties hereto with respect to the subject matter hereof. No
variations or modifications of or amendments to the terms of this Agreement
shall be binding unless in writing and signed by the parties hereto. The
respective attorneys for each party are authorized to modify any dates or time
periods set forth herein.
(f) The terms, conditions, covenants and provisions of this
Agreement shall be deemed to be severable except with respect to any provision
relating to the Purchase Price. If any clause or provision herein contained
shall be adjudged to be invalid or unenforceable by a court of competent
jurisdiction or by operation of any applicable law, the same shall be deemed to
be severable and shall not affect the validity of any other clause or provision
herein, but such other clauses or provisions shall remain in full force and
effect.
(g) The obligations of each party to complete the transaction
contemplated hereby is subject to the satisfaction, as of Closing, of all of the
terms, conditions and obligations to be met and/or performed by the other party
or which otherwise are for the benefit of such party, any of which conditions
and/or obligations may be waived in whole or in part by the party which is the
beneficiary of such condition or obligation.
(h) Each party, at its sole cost and expense, shall have the
right to record a short form memorandum of this Agreement, which memorandum
shall not set forth the Purchase Price or terms of payment, and each party
agrees to execute any
<PAGE>
such short form memorandum upon the request of the other party.
(i) As used in this Agreement, the masculine gender
shall include the feminine or neuter genders and the neuter gender shall include
the masculine or feminine genders, the singular shall include the plural and the
plural shall include the singular, wherever appropriate to the context.
(j) This Agreement shall be governed by and enforced in
accordance with the substantive laws of the State of New Jersey.
83. GUARANTY.
(a) William G. Price, Jr. and John S. McGarvey (collectively,
"Guarantors") hereby, jointly and severally, guarantee to Purchaser, its
successors and assigns, the full, due and timely completion of construction of
all Improvements in the manner required by the Plans and Specifications and in
accordance with the provisions of this Agreement, including any modifications or
amendments hereto, without any further writing, and the costs for enforcing this
Guaranty (collectively, the "Obligations").
(b) This is a guaranty of payment and performance and not of
collection. The obligations of Guarantors hereunder are independent of the
obligations of Seller, and a separate action or actions may be brought and
prosecuted against Guarantors, regardless whether action is brought against
Seller or whether Seller is joined in any such action or actions.
(c) Guarantors agree that the obligations of
<PAGE>
Guarantors under this Paragraph 25 are primary, absolute and unconditional,
irrespective of the value, genuineness, validity, regularity or enforceability
of any of the Agreement or any instrument referred to herein, or any
substitution, release or exchange of any other guaranty of or security for the
Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever (including, without
limitation, personal defenses of Seller) which might otherwise constitute a
legal or equitable discharge or defense of a surety, guarantor or co-obligor, it
being the intent of this Paragraph 25 that the obligations of Guarantors
hereunder shall be primary, absolute and unconditional under any and all
circumstances. Without limiting the generality of the foregoing, it is agreed
that the occurrence of any one or more the following shall not alter or impair
the liability of Guarantors hereunder:
(i) at any time or from time to time, without
notice to or consent of Guarantors, the time for any performance of or
compliance with the Obligations shall be extended, or such performance or
compliance shall be waived;
(ii) any modification of or amendment to the
Agreement;
(iii) the existence of any claim, set-off or
other right which Guarantors may have at any time against Purchaser, Seller or
any other person or entity, whether in connection herewith or with any unrelated
transaction;
<PAGE>
(iv) any of the acts required or contemplated in
any of the provisions of the Agreement or other instruments
referred herein shall be done or omitted;
(v) the maturity of any of the Obligations shall
be accelerated or extended, or any of the Obligations shall be modified,
supplemented or amended in any respect or any right under the Agreement or other
instruments referred to herein shall be waived or extended or any other guaranty
of the Obligations or any security therefor shall be released or exchanged in
whole or in part or otherwise dealt with;
(vi) Purchaser releases or substitutes any one or
more of any Seller, endorses or guarantors of the Obligations;
(vii) any of the Obligations shall be
determined to be void or voidable or shall be subordinated to the
claims of any person; or
(viii) there shall be occur any insolvency,
bankruptcy, reorganization or dissolution of Seller or other
guarantor.
With respect to their obligations hereunder, Guarantors hereby
expressly waive diligence, presentment, demand of payment, protest and all
notices whatsoever and any requirement that Purchaser exhaust any right, power
or remedy or proceed against any person under the Agreement or other instruments
referred to herein, or against any collateral or other person under any other
guaranty of, or security for, or obligation relating to, any of the Obligations.
<PAGE>
(d) The obligations of Guarantors under this Paragraph 25
shall be automatically reinstated if and to the extent that for any reason any
payment or performance by or on behalf of any persons in respect of the
Obligations is rescinded or must be otherwise restored by Purchaser or any other
holder or recipient of payment or performance of the Obligations, whether as a
result of any proceedings in bankruptcy or reorganization or otherwise, and
Guarantors agree that they will pay to Purchaser on demand all reasonable
out-of-pocket costs and expenses (including, without limitation, fees of
counsel) incurred by Purchaser in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.
(e) Without limiting the generality of the provisions of this
Paragraph 25, Guarantors hereby specifically waive: (a) promptness, diligence,
notice of acceptance and any other notice with respect to the Obligations; (b)
any requirement that Purchaser protect, secure or insure any lien or any
property subject thereto or exhaust any right or take any action against Seller
or any collateral or undertake any marshalling of assets; (c) the right to
direct the order of enforcement or remedies, (d) any defense arising by reason
of any claim or defense based upon an election of remedies by Purchaser which in
any manner impairs, reduces, releases or otherwise adversely affects its
subrogating,
<PAGE>
contribution or reimbursement rights or other rights to proceed against Sellers
or any collateral; (e) any duty on the part of Purchaser to disclose to
Guarantors any matter, fact or thing relating to the business, operation or
condition of the Property or Seller and its assets now known or hereafter known
by Purchaser; and (f) all presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, and notices
of acceptance of the guaranty provided for in this Paragraph 25 and the
existence, creation or incurrence of new or additional indebtedness.
84. ROLLBACK TAXES. Any "rollback taxes" assessed or to be assessed
against the Premises pursuant to the Farmland Assessment Act of 1964, N.J.S.A.
54:4-23.1, et seq., shall be paid by Seller. If rollback taxes will be due with
respect to the Premises but are not assessed at the Closing Date, a good-faith
estimate of the amount of same shall be obtained by the parties from the tax
assessor of the Township of Moorestown, at least twenty-four (24) hours prior to
Closing, and Seller shall pay one hundred twenty-five (125%) percent of the
amount of said estimate from the proceeds at Closing into escrow to be held by
the Title Company until such time as the rollback tax assessment against the
Premises is made. Upon Title Company's receipt of notice from Purchaser that
said rollback taxes have been assessed against the Premises, Title Company
shall, within three (3) business days thereof, pay said taxes to the Township of
Moorestown. In the event the amount of the monies being held in
<PAGE>
escrow by Title Company are not sufficient to cover payment of said rollback
taxes, then Seller shall promptly pay to Purchaser any additional monies that
are due and payable by Seller in accordance with the terms and provisions of
this Paragraph; and in the event the amount of the escrow monies are in excess
of the amount of said rollback taxes, then Title Company shall disburse the
remaining balance of the escrow funds to Seller after the amount of the escrow
monies due to Purchaser have been disbursed to the Township of Moorestown, in
accordance with the terms and provisions of the immediately proceeding sentence.
Seller shall indemnify and hold Purchaser harmless from and against all costs
and expenses, including reasonable attorneys fees, incurred by Purchaser in
connection with Seller's failure to perform Seller's obligations under this
Paragraph 26.
85. SELLER'S RIGHT TO EXCHANGE PROPERTY.
(a) (i) Seller shall have the right, exercisable at least five
(5) days prior to Closing, to elect to exchange the Property for other property
of like kind ("Exchange Property") pursuant to Section 1031 of the Internal
Revenue Code of 1986, as amended.
(ii) If Seller elects to effect any exchange, it
shall notify Purchaser as to all details thereof, and Purchaser shall execute a
contract to purchase the Exchange Property in a form satisfactory to Seller
(hereinafter called the "Exchange Contract"), and immediately thereafter shall
assign all of its right, title and interest in and to the Exchange Contract to
the
<PAGE>
Exchange Escrow Agent, as hereinafter defined. The funds required to pay the
deposit under the Exchange Contract shall be provided to Purchaser by Seller or
Exchange Escrow Agent. The Exchange Contract shall provide for the right of
assignment by Purchaser to Exchange Escrow Agent and/or Seller without recourse,
and that the seller of the Exchange Property shall look only to the deposit
monies thereunder as liquidated damages, there being no liability on the part of
Purchaser to said seller. Purchaser shall not be obligated to execute an
Exchange Contract which would require Purchaser to be personally liable on any
indebtedness or to incur any cost or expense which would increase Purchaser's
liability beyond that liability incurred by Purchaser hereunder.
(iii) In no event, however, shall the closing of
title to the Property be delayed due to the inability of Seller to select an
Exchange Property or close title thereto.
(b) (i) If Seller shall elect to exchange the Property
pursuant to this Paragraph, whether or not an Exchange Property has been
designated, as herein set forth, the Purchase Price, exclusive of the
satisfaction of liens, payment of closing costs and other permitted expenses,
shall be deposited with the Exchange Escrow Agent ("Escrow Account"), subject to
the Exchange Escrow Agent executing an agreement reasonably satisfactory to
Purchaser whereby Exchange Escrow Agent agrees to be bound by the terms and
conditions of this Paragraph 27, and shall not be paid to Seller at Closing. The
Escrow Account shall be held by
<PAGE>
Exchange Escrow Agent in an interest bearing account, pursuant to the terms
hereof. The interest earned upon the Escrow Account while being held by Exchange
Escrow Agent shall be added to the Escrow Account and shall be paid to Seller at
the closing of the Exchange Property.
(ii) Purchaser appoints its title insurance
company or such other title insurance company or other entity as Purchaser
reasonably may designate, its agent, in order to effectuate the Exchange (the
"Exchange Escrow Agent"). Purchaser and Seller shall cooperate with each other
and Exchange Escrow Agent and promptly shall sign and deliver to Exchange Escrow
Agent all documents reasonably deemed necessary by Seller in order to qualify
this transaction pursuant to Internal Revenue Code Section 1031.
(iii) Seller shall pay all fees relating to the
Escrow Account, and all reasonable attorneys' fees and expenses of Purchaser, if
any, relating to the exchange transaction and in no event shall Purchaser be
required to assume any liability thereunder.
(iv) During the period that the Escrow Account is
in existence, Seller shall not have any control, directly or indirectly, over
the funds placed in the Escrow Account, except as may be expressly provided
herein.
(v) If, at the time of Closing, Seller shall not
have designated the Exchange Property, then if within forty-five (45) days
following Closing, Seller shall deliver to Purchaser
<PAGE>
and to Exchange Escrow Agent a designation of an Exchange Property which Seller
desires to acquire by way of exchange for the Property transferred to Purchaser
at Closing ("Designation"), the parties shall proceed as provided for herein. If
there is no timely Designation, then Exchange Escrow Agent, on the forty-sixth
(46th) day after Closing (or, if such day is a Saturday, Sunday or legal
holiday, on the first business day thereafter) shall disburse to Seller the
Escrow Account and all interest earned thereon shall be paid to Purchaser.
(vi) Any Designation of an Exchange Property shall
include an Exchange Contract, or thereafter Seller shall provide Purchaser with
an Exchange Contract, which Exchange Contract comply with the terms set forth in
Subparagraph 27.(a). The parties acknowledge that there may be multiple Exchange
Properties and that multiple Designations may be delivered, provided that each
meets the conditions set forth herein and the requirements of the Internal
Revenue Code Section 1031 and regulations thereunder.
(vii) Upon receipt by Purchaser of an Exchange
Contract, it shall execute and deliver the Exchange Contract to the seller of
the Exchange Property ("Exchange Seller"), Seller and Exchange Escrow Agent.
Thereafter, Purchaser shall assign its interest in the Exchange Contract to
Exchange Escrow Agent, it being agreed that Purchaser shall not take title to
any Exchange Property.
(viii) Upon Purchaser executing any Exchange
<PAGE>
Contract, and in accordance therewith, Exchange Escrow Agent shall pay from the
Escrow Account to Exchange Seller, or such other party as is provided for in the
Exchange Contract, the amount of the deposit and all other monies required under
the Exchange Contract or otherwise related to the transaction.
(ix) Exchange Escrow Agent shall not be liable to
either Seller or Purchaser in connection with its performance as Exchange Escrow
Agent, except in the event of intentional wrongdoing or negligence. Exchange
Escrow Agent is authorized only to do those acts necessary and proper to effect
the purpose of this Agreement.
(x) The Exchange Escrow Agent shall use the
Escrow Account, for payment of the deposit and all other payments due under the
Exchange Contract to purchase the Exchange Property, plus closing costs, and for
no other purpose.
(xi) If the payment for the Exchange Property
shall exceed the amount of the Escrow Account, Seller either shall: (i) deposit
an amount equal to such excess with Exchange Escrow Agent no later than the day
of the Exchange Property Closing; or (ii) cause or direct that the funds
necessary to effectuate the Exchange Property Closing be paid directly to
Exchange Seller at the Exchange Property Closing.
(xii) At the Exchange Property Closing, the
following shall be deposited or caused to be deposited with
Exchange Escrow Agent: (i) a deed for the Exchange Property from
Exchange Seller as grantor to Seller, as grantee; and (ii) any
<PAGE>
other documents or agreements necessary or incidental to the
acquisition or conveyance of the Exchange Property.
(xiii) When all documents and funds called for
herein have been deposited with Exchange Escrow Agent and when a title policy
can be issued on the Exchange Property to Seller, subject only to title
exceptions approved by Seller, Exchange Escrow Agent shall record the deed,
disburse the funds and deliver all other documents to Seller. All expenses,
reimbursements and prorations in connection with the Exchange Property shall be
governed by the provisions of the Exchange Contract, except as expressly set
forth herein.
(xiv) Purchaser makes no warranty with respect to
the Exchange Property and Seller assumes all responsibility for title to the
Exchange Property being good and marketable. Seller agrees to indemnify
Purchaser and hold Purchaser harmless from any damages, liability, costs,
expenses, claims, losses or demands (including reasonable attorneys' fees and
costs of litigation including those for enforcing this indemnity), arising out
of or in any way related to the acquisition of the Exchange Property. If the
Exchange Property is subject to any mortgage, deed of trust or lease, Purchaser
shall assume no liability or obligation with respect to said mortgage, deed of
trust or lease. Purchaser makes no representations as to the tax consequences of
any aspect of this transaction.
(xv) If the Exchange Property as may be designated
by Seller is not conveyed to Seller within the earlier of: (i)
<PAGE>
one hundred eighty (180) days after Closing; or (ii) the due date (determined
with regard to extensions) of Seller's federal income tax return for the taxable
year in which the transfer of the Property occurs or if no Exchange Property is
designated within forty-five (45) days following Closing, then the Escrow
Account shall be released to Seller, free of the escrow, and the obligations of
Purchaser and Exchange Escrow Agent shall end. Notwithstanding failure of the
Exchange Property to be conveyed to Seller as hereinabove set forth, the
transfer of the Property to Purchaser shall not be subject to recession or
revocation by Seller or Purchaser for any reason whatsoever.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
or caused these presents to be signed and sealed by duly authorized persons the
day and year first above written.
SELLER:
WITNESS: LANCER ASSOCIATES, L.L.C.
______________________________ By:__________________________
Name:________________________
Title:_______________________
PURCHASER:
ATTEST: MACK-CALI REALTY, L.P.
By: MACK-CALI REALTY
CORPORATION, its general
partner
______________________________ By:__________________________
Name:________________________
Title:_______________________
AS TO PARAGRAPH 23:
WITNESS or ATTEST: ARCHER & GREINER (Escrow
Agent)
______________________________ By:__________________________
AS TO PARAGRAPH 25:
WITNESSES:
______________________________ ______________________________
WILLIAM G. PRICE, JR.
<PAGE>
______________________________ ______________________________
JOHN S. MCGARVEY
EXHIBIT NO. 10.133
LOAN MODIFICATION AND ASSUMPTION AGREEMENT
This Loan Modification and Assumption Agreement is made this 30th day
of January, 1998 by and among JOHN S. MCGARVEY and JOANNE H. MCGARVEY
(collectively, "McGarveys"), MACK-CALI REALTY, L.P., a Delaware limited
partnership ("MCR"), and SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.), a Delaware
corporation ("Lender").
Background
Lender is the holder of a Mortgage Note dated September 1, 1993
("Note") in the original principal amount of $1,241,477.04
("Loan") made by the McGarveys. The Note is secured by, inter alia, a Mortgage
and Security Agreement dated September 1, 1993 and recorded in the Office of the
County Clerk of Burlington County Records on September 8, 1993 in Mortgage Book
5189 page 164 ("Mortgage"), encumbering a certain parcel of real property and
the improvements thereon located at 201 Commerce Drive, Moorestown, Burlington
County, New Jersey, as more particu larly described on Exhibit A ("Mortgaged
Property"), and by an Assignment of Leases and Agreement dated September 1, 1993
and recorded in the Office of the County Clerk of Burlington County Records on
September 8, 1993 in Deed Book 4605 page 237 ("Assignment of Leases") (the Note,
the Mortgage, the Assignment of Leases and the other documents listed on Exhibit
B attached hereto which were executed by McGarveys and delivered to Lender in
connection with the Loan are hereinafter referred to collectively as the "Loan
Documents").
The Mortgaged Property is being acquired by MCR from the McGarveys on
the date hereof. Lender and MCR have now agreed to modify certain provisions of
the Loan Documents and that MCR will assume the obligations of the McGarveys
under the Loan Documents as modified hereby.
Now, Therefore, in consideration of the mutual covenants and
undertakings herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and intending to
be legally bound hereby, the parties hereto covenant and agree as follows:
1. Modification of Loan Documents.
(a) The Note is hereby modified to insert the following at
the end of Section 13:
"Notwithstanding the foregoing, Maker's obligations hereunder shall be
limited as set forth in Section 37 of the Mortgage."
(b) The Note is hereby modified to delete the last sentence of
Section 6.
<PAGE>
(c) The Mortgage is hereby modified to insert the following at
the end of Section 28:
"Notwithstanding the foregoing, Mortgagor's recourse liability under
this Section 28 shall not exceed $3,585,000.00 ("Liability Cap")."
(d) The Mortgage is hereby modified to insert the following at
the end of Section 7:
"Notwithstanding the foregoing, (i) transfers of interests in Mack-Cali
Realty, L.P. and its general partner shall not require the consent of
Mortgagee (provided that no such transfers shall limit in any way
Mortgagor's obligations hereunder), and (ii) with advance written
notice to Mortgagee (but without requiring Mortgagee's consent), the
Mortgaged Property may be conveyed to an affiliate of Mortgagor or
following a merger or consolidation of Mortgagor (provided that no such
transfers shall limit in any way Mortgagor's obligations hereunder)."
(e) The Mortgage is hereby modified to delete the phrase "and
certified by John McGarvey" in Section 12.
(f) The Mortgage is hereby modified to add the phrase "except
as expressly permitted by the Assignment of Leases" at the end of Section
18(a)(iii).
(g) The Mortgage is hereby modified to delete Section 14(f).
(h) The Assignment of Leases is hereby modified to add the
following at the end of Section 1(a):
"Notwithstanding the foregoing, no consent from Mortgagee shall be
required for Leases if such Leases require a net rental of at least
$4.50 per square foot."
2. Assumption of Loan Documents; Representations and Warranties.
(a) MCR hereby assumes the obligations of the McGarveys under
the Note and the Mortgage (as modified herein) and the other Loan Documents as
if each and every Loan Document had been originally executed by MCR, provided
that MCR is not assuming any obligations under the Guaranty. MCR shall fully
comply with each and every covenant and condition of the Loan Documents and
shall be fully bound thereby.
(b) Lender hereby approves the transfer of the Mortgaged
Property by the McGarveys to MCR.
(c) MCR acknowledges and agrees that the unpaid principal
balance of the Note as of the date hereof is $1,117,507.40. MCR represents and
warrants to Lender that MCR presently possesses an unencumbered fee simple title
to the Mortgaged Property, except for those title objections not removed from
Title Commitments No. TS-11344 issued to Lender by Title Services of New Jersey,
Inc. as policy issuing agent for First American Title
<PAGE>
Insurance Company, and that the Mortgage is a valid and enforceable first lien
on the Mortgaged Property, subject only to the aforesaid title objections.
(d) MCR represents and warrants to Lender as follows: (i) MCR
is a limited partnership duly formed and validly existing in the State of
Delaware; (ii) MCR has supplied Lender with true, correct and complete copies of
MCR's Limited Partnership Agreement and Limited Partnership Certificate, and all
amendments thereto, none of which has been further amended, modified or revised,
together with a current Good Standing Certificate from the State of Delaware;
and (iii) MCR has full power and authority to engage in business and own
property in the State of New Jersey and to enter into and undertake and perform
its obligations under the Note, the Mortgage and the other Loan Documents.
3. Confirmation of Loan Documents. MCR covenants and confirms that,
except as specifically modified by this Agreement, all of the terms and
conditions of the Note, the Mortgage and the other Loan Documents shall be
unmodified and remain in full force and effect and are hereby ratified and
confirmed by MCR. MCR acknowledges and agrees that it has no defense, set-off,
recoupment or claim against Lender of any kind whatsoever as of the date hereof.
Lender acknowledges that all principal, accrued interest and other charges for
the Loan have been paid through the installment payment due on January 1, 1998.
Lender has not declared an Event of Default under the Note, the Mortgage or any
of the other Loan Documents and has no knowledge of any state of facts which,
but for the passage of time or the giving of notice, would constitute an Event
of Default under the Note, the Mortgage or the other Loan Documents.
4. No Novation. The parties to this Agreement acknowledge and confirm
that this Agreement shall not be construed as a novation of the Note, the
Mortgage or the other Loan Documents, and shall not prejudice any present or
future rights, remedies, benefits or powers belonging to or accruing to Lender
under the terms of the Note, the Mortgage or the other Loan Documents. It is the
intent of the parties hereto that this Agreement shall in no way adversely
affect or impair the lien priority of the Mortgage. In the event this Agreement
or any part hereof, or any instrument executed in connection herewith, shall be
construed or shall operate to affect the lien priority of the Mortgage, then to
the extent such instrument creates a charge upon the Mortgaged Property, and to
the extent third parties acquiring an interest or lien upon the Mortgaged
Property between the time the Mortgage was recorded and the time this Agreement
is executed are prejudiced thereby, this Agreement shall be void and of no
further force or effect. Notwithstanding the foregoing, the parties hereto, as
between themselves, shall be bound by all the terms and conditions of this
Agreement until the Loan and all interest thereon has been paid in full.
5. No Further Commitment. Nothing in this Agreement shall be construed
to commit Lender to any further modification or amendments of the Note, the
Mortgage or the other Loan Documents, nor as a waiver by Lender of any rights or
remedies to which Lender may be entitled under the Loan Documents.
6. Releases.
(a) MCR, its partners, employees and agents, for themselves,
their respective heirs, personal representatives, successors and assigns, hereby
release Lender, its shareholders,
<PAGE>
officers, directors, employees, agents and attorneys and each of their
respective heirs, personal representatives, successors and assigns and
affiliates, of and from any and all actions, causes of action, proceedings,
claims, demands, damages, costs, liabilities, losses, agreements and obligations
as of the date hereof, of any nature whatsoever, whether contingent or matured,
known or unknown, at law or in equity arising out of, or in any way related to,
the Loan, the Note, the Mortgage, the other Loan Documents or the Mortgaged
Property. MCR and its partners acknowledge and agree that Lender is relying on
the foregoing representations and covenants as a material inducement to Lender
to execute this Agreement.
(b) Lender, its shareholders, officers, directors, employees,
agents and attorneys and each of their respective heirs, personal
representatives, successors, assigns and affiliates, hereby release McGarveys,
Guarantors, and their respective partners, employees, agents and attorneys and
each of their respective heirs, personal representatives, successors and
assigns, of and from any and all actions, causes of action, proceedings, claims,
demands, damages, costs, liabilities, losses, agreements and obligations, of any
nature whatsoever, whether contingent or material, known or unknown, at law or
in equity arising from any act, thing, omission or failure to act occurring
after the date hereof and arising out of, or in any way related to, the Loan,
the Mortgage, the Guaranty, the other Loan Documents or the Mortgaged Property,
including, without limitation, any failure of MCR to perform any of its
obligation under the Loan Documents. Lender acknowledges and agrees that
McGarveys and Guarantors relied on the foregoing representations and covenants
as a material inducement to McGarveys and Guarantors to execute this Assumption
Agreement.
7. Notices. Section 25 of the Mortgage is hereby amended to provide
that all notices, requests and demands upon the respective parties hereto shall
be effective when hand delivered to such party at the address set forth below,
or if sent by overnight delivery service, on the next business day, or if sent
by United States mail, postage prepaid, certified mail, on the third business
day after the day on which mailed or sent, addressed to such party as follows:
To Lender: Sun Life Assurance Company
of Canada (U.S.)
One Sun Life Executive Park
Wellesley Hills, MA 02181
Attention: Ms. Kerrianne Lappin
With copies to: William O'Connor, Vice President
GMAC Mortgage Corporation
650 Dresher Road
P.O. Box 1015
Horsham, PA 19044
Gregory Kleiber, Esquire
Fox, Rothschild, O'Brien & Frankel
2000 Market Street
Philadelphia, PA 19103
<PAGE>
To MCR: Mack-Cali Realty, L.P.
11 Commerce Drive
Cranford, NJ 07016
Attention: Roger Thomas, Esq., Vice President and General
Counsel
With a copy to: Richard Abramson, Esq.
Cole, Schotz, Meisel, Forman &
Leonard
25 Main Street
P.O. Box 800
Hackensack, New Jersey 07602-0800
or to such other address as may be furnished in writing for such purpose.
8. Lender's Costs. MCR agrees to pay on demand all costs and expenses
of Lender in connection with the preparation, execution and delivery of this
Agreement (including the fees and out of pocket costs of counsel with respect
thereto). The agreement set forth in this Section shall survive payment of the
Note.
9. Subordination, Non-Disturbance and Attornment Agreements. Subject to
the conditions set forth below, Lender shall execute Subordination,
Non-Disturbance and Attornment Agreements ("SNDA") with new tenants of the
Mortgaged Property from time to time upon written request from MCR. Each such
request shall be accompanied by a written certification from MCR confirming that
the SNDA as presented is in the form attached hereto as Exhibit C with no
changes or alterations other than completions of blanks. Lender shall use its
best efforts to execute and return an SNDA within thirty (30) days after receipt
of the completed SNDA and the certification, each of which must conform to the
requirements of the previous sentence. Lender shall have no obligation to review
or execute any SNDAs that do not conform to such requirements or are not so
certified.
10. General. This Agreement shall be governed by and construed under
the laws of the State of New Jersey. This Agreement represents the entire
agreement between the parties hereto respecting the subject matter hereof, and
neither party shall be bound by any prior discussions, proposals or oral
agreements. The parties agree that this Agreement may be amended only in a
writing signed and approved by both parties. The parties agree that each and
every provision of this Agreement has been mutually negotiated, prepared and
drafted, and each party has been represented by counsel, so that in connection
with the construction of any provision hereof, no consideration shall be given
to the issue of which party actually prepared, drafted, requested or negotiated
any provision or deletion. The headings of each Section hereof form no part of
the content hereof.
In Witness Whereof, the parties hereto have executed this Agreement on
the day and year first set forth above.
LENDER:
SUN LIFE ASSURANCE COMPANY OF CANADA
(U.S.)
By:
MCGARVEYS:
--------------------------------
John S. McGarvey
--------------------------------
Joanne H. McGarvey
MCR:
Mack-Cali Realty, L.P.
By: Mack-Cali Realty Corporation
By: ________________________________
EXHIBIT NO. 10.134
NOTE AND MORTGAGE MODIFICATION AND ASSUMPTION AGREEMENT
THIS NOTE AND MORTGAGE MODIFICATION AND ASSUMPTION AGREEMENT
("Agreement") is made this 30th day of January, 1998, by and between MACK-CALI
REALTY, L.P., a Delaware limited partnership, having a mailing address of 11
Commerce Drive, Cranford, New Jersey 07016 (hereinafter called "BORROWER") and
FIRST UNION NATIONAL BANK, a national banking association organized and existing
under the laws of the United States of America, successor by merger to FIRST
FIDELITY BANK, NATIONAL ASSOCIATION, with offices at One First Union Center,
DC-6, Charlotte, North Carolina 28288 (hereinafter called "BANK"); and BROMLEY
COMMON ASSOCIATES, a New Jersey general partnership, 201 Commerce Drive, having
a mailing address of Moorestown, New Jersey 08057 (the "Original Borrower",
hereinafter "Bromley")
BACKGROUND
On or about September 15, 1995, Bromley borrowed from Bank the
principal sum of Six Million Seven Hundred Thousand Dollars ($6,700,000.00) (the
"Loan") and made, executed and delivered to Bank its Promissory Note (the
"Note") payable with interest per annum at the fixed rate of seven and
one-quarter percent (7.25%) in consecutive monthly payments of principal and
interest, based upon a hypothetical fifteen (15) year term, with all unpaid
principal and interest accrued thereon due and payable in full on October 31,
2000. Bromley was afforded the option to extend the maturity date for an
additional term of sixty (60) months.
As collateral security for the obligations of Bromley to Bank, Bromley
on September 15, 1995, executed and delivered to Bank, together with other
documents (the "Loan Documents") (including a certain loan agreement dated
September 15, 1995, the "Loan Agreement"), a Mortgage and Security Agreement
(the "Mortgage") on the premises owned by Bromley and located in the Township of
Burlington, County of Burlington, State of New Jersey, known and designated as
Block 120.03, Lots 1 and 2 on the official tax map, commonly known as #3 and #5
Terri Lane, Bromley Corporate Center (the "Mortgaged Premises"), said property
being more fully described in Exhibit "A" attached hereto and made a part
hereof, said Mortgage having been recorded on September 25, 1995 in the Office
of the Clerk of Burlington County in Book 6091 of Mortgages Page 232.
Bromley has requested that the Bank permit the Borrower to assume the
Loan to Bromley and modify the Loan. Borrower has agreed to repay to Bank all
amounts which are due under the terms of the Note, as modified hereby, and Bank
has agreed to modify the Note and Mortgage and to memorialize same, hence this
Agreement.
NOW, THEREFORE, in consideration of the mutual promises herein and in
the Loan Documents contained and intending to be legally bound hereby, the
parties agree as follows:
<PAGE>
1. Incorporation of Recitals
The recitals set forth above in the Background section of this
Agreement are hereby incorporated by reference into this Agreement as if same
had been fully set forth at length herein.
2. Assumption of Mortgage
As consideration of the transfer of title of the Mortgaged
Premises from Bromley to Borrower, Borrower hereby assumes the obligations of
Bromley to the Bank under the Note, Mortgage and other Loan Documents set forth
therein with the same force and legal effect as if Borrower was the original
party thereto. Bromley, Borrower and Bank acknowledge that the amount of the
obligation to be assumed is as set forth below in paragraph 3. Bromley hereby
agrees to convey to Borrower by Bargain and Sale Deed with Covenants Against
Guarantor's Acts all their right, title and interest in the Mortgaged Premises.
3. Affirmation of Amount Due
Bank and Borrower hereby acknowledge and agree that as of the
date of this Agreement, there is due and owing to Bank on its Note and Mortgage
the sum of Six Million One Hundred Fourteen Thousand Seven Hundred Forty Two and
34/100 Dollars
($6,114,742.34).
4. Terms of Modification of Obligation
Bank agrees to the modification of the Note and the Mortgage
upon the following revised terms:
(a) The Bank hereby agrees to the assumption of the Loan to
Bromley by the Borrower and the Borrower shall now be obligated to pay all
principal and interest when due and shall be obligated to comply with the terms
and conditions of the Note, Mortgage, Loan Documents and this Agreement. In
consideration of the assumption of the Loan by Borrower, Borrower on or before
the date hereof shall pay to Bank an assignment fee in the amount of $22,000.00.
(b) On or before the date hereof, Borrower shall reduce the
principal outstanding balance of the Loan set forth in Paragraph 3 above to Four
Million Four Hundred Thousand Dollars ($4,400,000.00), without premium or
penalty.
(c) The date upon which all unpaid principal and interest and
other charges owing pursuant to the Note and Mortgage is due and payable by
Borrower to Bank is October 31, 2000 (the "Maturity Date") with no option to
extend the Maturity Date.
(d) Interest only shall be payable in monthly installments of
$26,583.33 beginning on the first day of March, 1998 and continuing on the first
day of each consecutive month thereafter until October 31, 2000, on which date
all unpaid principal and interest
<PAGE>
accrued and unpaid thereon shall be due and payable. During the term hereof, the
interest rate hereon ("Interest Rate") (computed on the basis of the actual
number of days elapsed and a year of 360 days) shall continue to be at the fixed
rate of seven and one-quarter percent (7.25%) per annum Bank.
(e) Upon execution of this Agreement and payment by the
Borrower of the monies set forth in Paragraphs 4(a) and (b), the obligation of
Bromley pursuant to the Note and Mortgage and other Loan Documents shall be
terminated and of no further force and effect; and (ii) the liability of William
G. Price, Jr., Carol Ann Price, John S. McGarvey and Joanne H. McGarvey, as
original guarantors for the full, prompt and unconditional performance of the
terms and conditions of the Note, Mortgage, Guaranty and other Loan Documents
shall be hereby terminated.
(f) Paragraph 5.1 of the Loan Agreement shall be amended by
the addition of the following language:
Notwithstanding the foregoing: (i) transfers of
interests in Mack-Cali Realty, L.P. and its general
partner shall not require the consent of Mortgagee
and (ii) with advance written notice to Mortgagee
(but without requiring Mortgagee's consent), the
Mortgaged Premises may be conveyed to an affiliate of
Mortgagor or following a merger or consolidation of
Mortgagor (provided that no such transfers shall
limit in any way Mortgagor's obligations hereunder.
(g) Paragraph 5.4.1 of the Loan Agreement shall be amended to
read as follows:
Borrower shall furnish to Bank the following
financial information: (i) not later than ninety (90)
days after the end of each fiscal year a copy of the
audited financial statements prepared by the Borrower
and filed with the Securities and Exchange
Commission; and (ii) not later than July 30 and
January 30 of each year, semi-annual, management
prepared financial statements in form reasonably
satisfactory to Bank relating to the operation of the
Mortgaged Premises including, without limitation, a
statement of cash flows, certified rent roll, summary
of leases, a statement of profits and losses and any
other information requested by Bank.
(h) The Borrower and the Bank acknowledge that the Debt
Service Coverage Ratio required by Paragraph 5.7.1 of the Loan Agreement shall
be maintained by the Borrower during the balance of the term of the Loan. For
purposes of calculating the Debt Service Coverage Ratio, the aggregate principal
and interest utilized in the formula shall be Four Hundred Eighty One Thousand
Nine Hundred Ninety Two Dollars ($481,992.00).
(i) Paragraphs 5.7.2, 5.7.4 through and including 5.7.9 and
6.1.6 are hereby deleted from the Loan Agreement and shall have no further force
and effect.
<PAGE>
(j) Paragraph 4.4 of the Mortgage and paragraph 7 of the Loan
Agreement shall be amended to read as follows:
Notwithstanding anything contained herein or in the
Loan Documents, all proposed leases for the Mortgaged
Premises or any part thereof consisting more than
fifty percent (50%) of the leased area of the
Mortgaged Premises shall be submitted to Bank for its
review and approval prior to the execution of such
leases. Bank shall have five (5) business day after
receipt of such leases to review and approve the
leases. If Bank has not approved such leases within
such period, the leases shall be deemed approved. All
leases must be in writing on Borrower's standard
lease form, at market rates with no concessions, and
must be subordinate to the lien of the Mortgage. Bank
shall have no obligation to grant rights or
nondisturbance to any tenant.
5. Intention to Renew
It is the intention of the parties that the Note being
modified hereby is a renewal of the existing obligations of Bromley as evidenced
by the Note and is not intended by the parties to be an accord and satisfaction
or a novation of the Loan evidenced by the Note.
6. Affirmation by the Borrower of Collateral
The Borrower hereby represents, warrants and affirms to the
Bank that it is the intention of the parties to this Agreement that all existing
collateral security held by the Bank shall continue to serve as collateral for
the Note and any other liabilities due the Bank by the Bromley pursuant to the
Note, and until the Loan is paid in full, the security interests and Mortgage
held by the Bank shall otherwise continue in full force and legal effect. As an
additional inducement for the Bank's extension, the following security interests
are hereby confirmed and granted by the Borrower to the Bank:
A. To secure the payment and performance of all liabilities of the
Borrower to the Bank, the note, the guaranty and any other loan documents or
obligations of the Borrower to the Bank, the Borrower hereby grants to the Bank
a security interest in the following property owned by the Borrower (hereinafter
the "Collateral"):
(i) Any and all buildings and improvements now or hereafter
erected on, under or over the Mortgaged Premises;
(ii) Any and all fixtures, machinery, equipment and other
articles of real, personal or mixed property, belonging to Borrower, at any time
now or hereafter installed in, attached to or situated in or upon the Mortgaged
Premises, or the buildings and improvements now or hereafter erected thereon, or
used or intended to be used in connection with the Mortgaged Premises, or in the
operation of the buildings and improvements, plant, business or dwelling situate
thereon, whether or not such real, personal or mixed property is or shall be
affixed thereto, and all replacements, substitutions and proceeds of the
foregoing, including
<PAGE>
without limitation: (i) all appliances, furniture and furnishings; all articles
of interior decoration, floor, wall and window coverings; all office,
restaurant, bar, kitchen and laundry fixtures, utensils, appliances and
equipment; all supplies, tools and accessories; all storm and screen windows,
shutters, doors, decorations, awnings, shades, blinds, signs, trees, shrubbery
and other plantings; (ii) all building service fixtures, machinery and equipment
and any kind whatsoever; all lighting, heating, ventilating, air conditioning,
refrigerating, sprinkling, plumbing, security, irrigating, cleaning,
incinerating, waste disposal, communications, alarm, fire prevention and
extinguishing systems, fixtures, apparatus, machinery and equipment; all
elevators, escalators, lifts, cranes, hoists and platforms; all pipes, conduits,
pumps, boilers, tanks, motors, engines, furnaces and compressors; all dynamos,
transformers and generators; (iii) all building materials, building machinery
and building equipment delivered on site to the Mortgaged Premises during the
course of, or in connection with any construction or repair or renovation of the
buildings and improvements; (iv) all parts, fittings, accessories, accessions,
substitutions and replacements therefor and thereof; and (v) all files, books,
ledgers, reports and records relating to any of the foregoing.
(iii) Any and all leases, subleases, tenancies, licenses,
occupancy agreements or agreements to lease all or any portion of the Mortgaged
Premises and all extension, renewals, amendments, modifications and replacements
thereof, any options, rights of first refusal or guarantees relating thereto
(collectively, the "Leases"); all rents, income, receipts, revenues, security
deposits, escrow accounts, reserves, issues, profits, awards and payments of any
kind payable under the Leases or otherwise arising from the Mortgaged Premises
including, without limitation, minimum rents, additional rents, percentage
rents, parking, maintenance and deficiency rents (collectively, the "Rents");
all accounts, general intangibles and contract rights (including any right to
payment thereunder, whether or not earned by performance) of any nature relating
to the Mortgaged Premises or the use, occupancy, maintenance, construction,
repair or operation thereof; all management agreements, franchise agreements,
utility agreements and deposits, building service contracts, maintenance
contracts, construction contracts and architect's agreements; all maps, plans,
surveys and specifications; all warranties and guaranties; all permits, licenses
and approvals; and all insurance policies, books of account and other documents,
of whatever kind or character, relating to the use, construction upon,
occupancy, leasing, sale or operation of the Mortgaged Premises;
(iv) Any and all estates, rights, tenements, hereditaments,
privileges, easements, reversions, remainders and appurtenances of any kind
benefitting the Mortgaged Premises; all means of access to and from the
Mortgaged Premises, whether public or private; all streets, alleys, passages,
ways, water courses, water and mineral rights; all rights of Borrower as
declarant or unit owner under any declaration of condominium or association
applicable to the Mortgaged Premises; and all other claims or demands of
Borrower, either at law or in equity, in possession or expectancy of, in, or to
the Mortgaged Premises; and
(v) Any and all "proceeds" of any of the above-described
Mortgaged Premises, which term shall have the meaning given to it in the New
Jersey Uniform Commercial Code and shall additionally include whatever is
received upon the use, lease, sale, exchange, transfer, collection or other
utilization or any disposition or conversion of any of the Mortgaged Premises,
voluntary or involuntary, whether cash or non-cash, including proceeds
<PAGE>
of insurance and condemnation awards, rental or lease payments, accounts,
chattel paper, instruments, documents, contract rights, general intangibles,
equipment and inventory.
7. Representations and Warranties Continuing
Bromley and Borrower hereby represents and warrants to the
Bank as follows:
(a) All representations and warranties contained in the Loan
Documents are true and correct as of the date hereof except as otherwise
specified to the Bank in writing prior hereto;
(b) All real property taxes and water and sewer rents which
are due are paid, and all insurances remain in full force and effect.
(d) Other than the liens and mortgages as set forth in the
Title Commitment No. TS-11358 and TS-11359 issued by Title Services of New
Jersey, Inc., agent for First American Title Insurance Company, there have not
been granted to any other person or entity, mortgages on or security interests
in any of the real or personal property pledged by the Borrower as security for
the Loan due Bank and that the Mortgage is a first mortgage.
8. Enforceability
(a) The validity, priority and security of the Mortgage
modified hereby, the Note and any other documents or instruments executed and
delivered by Borrower to Bank, shall not be impaired by anything contained in
this Agreement and all references to such Mortgage and such documents shall be
deemed to refer to the instrument and Mortgage as modified by this Agreement.
(b) In the event Borrower fails to strictly comply with the
terms hereof and with the terms of the Note, and defaults in said terms hereof
and thereof, Bank shall be entitled to enforce the provisions of this Agreement,
of the Note and any other Loan Documents executed and delivered to Bank by
Borrower by foreclosure or otherwise.
9. Limitation of Liability
Notwithstanding anything to the contrary herein or in any Loan
Documents, Borrower, the General Partners of Borrower, and any officer,
director, partners, member or stockholder of either shall have no personal
liability whatsoever to Bank except as herein provided; and the liability of
Borrower, the General Partners of Borrower, and any officer, director, partner,
member or stockholder of either, under the Loan Documents shall be limited to
and satisfied from the Mortgaged Premises and the proceeds thereof, and the
rents and all other income arising therefrom, the Bank waiving any right of that
Bank may have to claim a deficiency judgment or other judgment for money damages
against Borrower, its General Partners and any officer, director, partner,
member or stockholder of either, under any Loan Document; provided, however,
that nothing in this Paragraph shall (i) preclude Bank from foreclosing the lien
of the Mortgage or from enforcing any of its rights or remedies in law or
<PAGE>
in equity against Borrower except to the extent set forth in this Paragraph,
(ii) limit the right of Bank to make Borrower as a party defendant in any action
brought under this Note, the Mortgage or any Loan Document so long as execution
or any judgment is limited to the Mortgaged Premises, or (iii) limit the
personal liability of Borrower to Bank (A) for fraud or willful
misrepresentation, (B) under any environmental indemnity of Borrower, or (C)
following an event of default, the misapplication of any proceeds received by
reason of damage, loss or destruction of any portion of the Mortgaged Premises
under any insurance policies or awards resulting from condemnation or the
exercise of the power of eminent domain.
10. Representations of Borrower by Counsel; No Representations by Bank
(a) The Borrower represents to the Bank that it has, at all
times pertinent to this Agreement, been represented by advisors of its own
selection including but not limited to attorneys at law and certified public
accountants; that it has not relied upon any representation, warranty, agreement
or information provided by the Bank, its employees, agents or attorneys; that it
acknowledges that it has been and is informed of its rights, duties and
obligations with respect to the Loan due the Bank under all applicable laws;
that its has no set-offs, defenses or claims against the Bank with respect to
the Loan due the Bank by the Borrower; and that it is indebted to the Bank in
the amounts recited in this Agreement.
(b) The Borrower has previously delivered to the Bank its
financial statements for the calendar year ended 1996. In order to induce the
execution of this Agreement by the Bank, the Borrower represents and warrants to
the Bank that said financial statements are true and correct and present fairly
the financial condition of the Borrower as of the date of the financial
statements.
(c) The Borrower acknowledges and agrees that the Bank has
made no representations, warranties, agreements or provided information to them
in order to induce the execution of this Agreement, except as set forth in the
Non-Disturbance Agreement and Estoppel Certificate attached hereto as Exhibits
"B" and "C". The Borrower further acknowledges and agrees that all agreements of
the parties are set forth in this Agreement and/or in the written documentation
evidencing the Loan, including but not limited to the Note and Mortgage, signed
by them prior to the date of this Agreement.
11. Bankruptcy or Insolvency
(a) The Borrower agrees not to permit to be filed, an
involuntary petition in bankruptcy pursuant to the United States Bankruptcy Code
or an insolvency proceeding pursuant to any state insolvency law, or to the
extent that anyone challenges the granting of any security interest, mortgage or
other collateral security to the Bank, or if said security interest, mortgage or
other interest or payment to the Bank is held to be a preference under the
United States Bankruptcy Code or any applicable insolvency law, such event shall
be deemed to be an event to default hereunder and the parties to this Agreement,
with respect to any property deemed to be a preference, shall be restored to
their status quo ante which existed prior to the signing of this Agreement and
the Bank shall be entitled to exercise all of its rights
<PAGE>
and remedies which existed under the Note and the Mortgage in effect immediately
prior to the date of the signing of this Agreement.
(b) In the event Borrower shall (i) file with any bankruptcy
court of competent jurisdiction or be the subject of any petition under Title 11
of the U.S. Code, as amended, (ii) be the subject of any order for relief issued
under such Title 11 of the U.S. Code, as amended (iii) file or be the subject of
any petition seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under any present or future Federal
or state act or law relating to bankruptcy, insolvency, or other relief for
debtors, (iv) have sought or consented to or acquiesced in the appointment of
any trustee, receiver, conservator, or liquidator, (v) be the subject of any
other judgment or decree entered by any court of competent jurisdiction
approving a petition filed against such party for any reorganization,
arrangement, composition, readjustment, liquidation, dissolution, or similar
relief under any present or future Federal or state act or law relating to
bankruptcy, insolvency, or relief for debtors, Bank shall thereupon be entitled
to relief from any automatic stay imposed by Section 362 of Title 11 of the U.S.
Code, as amended or otherwise, on or against the exercise of the rights and
remedies otherwise available to Bank as provided in any and all documents
evidencing the Loan referred to herein, as hereby amended, and as otherwise
provided by law.
12. Conflicts of Laws
This Agreement shall be governed by the laws of the State of
New Jersey
13. Binding Effect; Ratification of Loan Documents
(a) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their heirs, executors, administrators,
successors and assigns. The Borrower hereby acknowledges receipt of a true copy
of this Agreement.
(b) All of the terms, conditions or provisions of the Note and
the Mortgage and any other Loan Documents executed and delivered by Borrower to
Bank not expressly revised or modified hereby, shall otherwise remain in full
force and legal effect.
14. WAIVER OF JURY TRIAL
THE BORROWER AND THE BANK UPON ADVICE OF THEIR RESPECTIVE
ATTORNEYS, HEREBY KNOWINGLY, INTENTIONALLY, VOLUNTARILY, EXPRESSLY AND MUTUALLY
WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
(i) ARISING UNDER THIS AGREEMENT OR ANY OTHER DOCUMENTS EVIDENCING THE LOAN, OR
(ii) IN ANY WAY CONNECTED WITH OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR ANY OF THE OTHER
DOCUMENTS EVIDENCING THE LOAN, OR THE TRANSACTIONS RELATED HERETO OR THERETO, OR
(iii) IN ANY
<PAGE>
LITIGATION BETWEEN THE PARTIES, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE, AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE THIS ORIGINAL AGREEMENT OR A COPY THEREOF WITH ANY COURT
AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO A TRIAL BY JURY.
THIS AGREEMENT IS SUBJECT TO MODIFICATION AS DEFINED BY N.J.S.A.
46:9-8.1 ET SEQ.
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto executed this Agreement
the day and year first above written.
MACK-CALI REALTY, L.P., a Delaware
limited partnership
By: MACK-CALI REALTY CORPORATION,
Attest: a Maryland corporation, General Partner
_________________________ By:_____________________________
, Secretary , President
(Corporate Seal)
BROMLEY COMMON ASSOCIATES, a New
Witness: Jersey general partnership
_________________________ By:_____________________________
, General Partner , General Partner
FIRST UNION NATIONAL BANK
By:_____________________________
David B. Satterfield,
Vice President
<PAGE>
STATE OF NEW JERSEY )
:SS
COUNTY OF CAMDEN )
BE IT REMEMBERED that on this ____ day of January, 1998,
before me, a Notary Public, personally appeared _____________________________
who acknowledged himself to be the President of Mack-Cali Realty Corporation,
General Partner of Mack-Cali Realty, L.P., the Delaware limited partnership
named in the foregoing instrument, and that he as such general partner, being
authorized to do so in accordance with the terms of the Partnership Agreement
executed and delivered the foregoing document.
IN WITNESS WHEREOF, I have hereunto set my hand and official
seal.
--------------------------------
Notary Public
STATE OF NEW JERSEY )
:SS
COUNTY OF CAMDEN )
BE IT REMEMBERED that on this ______ day of January, 1998,
before me, a Notary Public, personally appeared
_________________________________, who acknowledged himself to be the General
Partner of Bromley Common Associates, the New Jersey general partnership named
in the foregoing instrument, and that he as such general partner, being
authorized to do so in accordance with the terms of the Partnership Agreement
executed and delivered the foregoing document.
IN WITNESS WHEREOF, I have hereunto set my hand and official
seal.
--------------------------------
Notary Public
<PAGE>
COMMONWEALTH OF PENNSYLVANIA )
: SS
COUNTY OF PHILADELPHIA )
On this the ___ day of January, 1998, before me, a Notary
Public, personally appeared David B. Satterfield, who acknowledged himself to be
a Vice President of First Union National Bank, the corporation named in the
foregoing instrument, and that he as such officer, being authorized to do so by
a proper resolution of the Board of Directors, executed the foregoing instrument
for the purposes therein contained by signing the name of the corporation by
himself as a Vice President.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
--------------------------------
Notary Public
<PAGE>
RECORD AND RETURN TO:
DILWORTH PAXSON LLP
LibertyView - Suite 700
457 Haddonfield Road
Cherry Hill, NJ 08002
Attention: Frank A. Lauletta III, Esquire
EXHIBIT NO. 10.135
LOAN MODIFICATION AND ASSUMPTION AGREEMENT
This Loan Modification and Assumption Agreement is made this 30th day
of January, 1998 by and among MOORESTOWN WEST PARTNERSHIP, a New Jersey general
partnership ("Partnership"), MACK-CALI REALTY, L.P., a Delaware limited
partnership ("MCR"), and SUN LIFE ASSURANCE COMPANY OF CANADA, a Canadian
corporation ("Lender").
Background
Lender is the holder of a Mortgage Note dated May 18, 1994 ("Note") in
the original principal amount of $2,950,000 ("Loan") made by the Partnership.
The Note is secured by, inter alia, a Mortgage and Security Agreement dated May
18, 1994 and recorded in the Office of the County Clerk of Burlington County
Records on July 14, 1994 in Mortgage Book 5632 page 001 ("Mortgage"),
encumbering two certain parcels of real property and the improvements thereon
located at 101 Executive Drive and 225 Executive Drive, Moorestown, Burlington
County, New Jersey, as more particularly described on Exhibit A ("Mortgaged
Property"), and by an Assignment of Leases and Agreement dated May 18, 1994 and
recorded in the Office of the County Clerk of Burlington County Records on July
14, 1994 in Deed Book 4769 page 088 ("Assignment of Leases"), and by an
Unconditional Guaranty and Suretyship Agreement dated May 18, 1994 ("Guaranty")
executed by John S. McGarvey, Joanne H. McGarvey and William G. Price, Jr.
(collectively, "Guarantors") (the Note, the Mortgage, the Assignment of Leases
and the other documents listed on Exhibit B attached hereto which were executed
by Partnership and delivered to Lender in connection with the Loan are
hereinafter referred to collectively as the "Loan Documents").
The Mortgaged Property is being acquired by MCR from the Partnership on
the date hereof. Lender and MCR have now agreed to modify certain provisions of
the Loan Documents and that MCR will assume the obligations of the Partnership
under the Loan Documents as modified hereby.
Now, Therefore, in consideration of the mutual covenants and
undertakings herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and intending to
be legally bound hereby, the parties hereto covenant and agree as follows:
1. Modification of Loan Documents.
(a) The Note is hereby modified to insert the following
paragraph as a new Section 20:
"20. Notwithstanding anything to the contrary herein contained, the
liability of Maker hereunder shall be limited to and enforceable only
out of the Mortgaged Property and the rents, issues and profits
therefrom, and the lien of any judgment shall be restricted thereto and
shall not extend to Maker, Holder waiving any right Holder may have to
claim a
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deficiency judgment against Maker; provided, however, that Maker shall
not be exonerated or exculpated for any deficiency, loss or damage
suffered by Holder as a result of any security deposits received or
held by Maker, any rent received or held by Maker after an Event of
Default, or any rent prepaid more than one month in advance; or from
failure by Maker to properly account to Holder as mortgagee for any
proceeds of insurance or condemnation proceeds as required by the
Mortgage; or from repairs required by the Mortgaged Property following
a casualty for which insurance proceeds are not available due to a
violation of Section 10 of the Mortgage; or from fraud, material
misrepresentation or bad faith by Maker; or from waste of the Mortgaged
Property; or from delinquent taxes or assessments; or from Maker's
interference with Holder's rights under the Assignment of Leases after
an Event of Default; or from Maker's failure, following an Event of
Default, to apply proceeds of rents and other income of the Mortgaged
Property toward the cost of claims, insurance premiums, debt service
and other indebtedness to the extent that the Mortgage, the Assignment
of Leases or any of the other Loan Documents require such rents and
income to be so applied; or the presence on the Mortgaged Property of
any hazardous substances, hazardous waste, residual waste, solid waste
or any other substance identified or described in Section 4(b) of the
Mortgage, any violation by Maker or the Mortgaged Property of any
environmental law, ordinance or regulation, or Maker's violation of, or
failure to perform its obligations under, Section 4 or Section 20 of
the Mortgage; or any noncompliance of the Mortgaged Property with the
Americans with Disabilities Act. Notwithstanding the foregoing, Maker's
obligations hereunder shall be limited as set forth in Section 37 of
the Mortgage. Nothing in this paragraph, however, shall limit Holder's
right against any tenants under leases assigned to Holder as additional
security, or against any other collateral securing Maker's obligations
hereunder, now or hereafter mortgaged, pledged or assigned by Maker or
anyone else to Holder."
(b) The Note is hereby modified to delete the phrase "of
partnership interests" in the first sentence of Section 6 and to delete the last
sentence of Section 6.
(c) The Mortgage is hereby modified to insert the following
paragraph as a new Section 37:
"37. LIMITATION OF LIABILITY. (i) Notwithstanding anything to the
contrary herein contained, the liability of Mortgagor hereunder shall
be limited to and enforceable only out of the Mortgaged Property and
the rents, issues and profits therefrom, and the lien of any judgment
shall be restricted thereto and shall not extend to Mortgagor,
Mortgagee waiving any right Mortgagee may have to claim a deficiency
judgment against Mortgagor; provided, however, that Mortgagor shall not
be exonerated or exculpated for any deficiency, loss or damage suffered
by Mortgagee as a result of any security deposits received or held by
Mortgagor, any rent received or held by Mortgagor after an Event of
Default, or any rent prepaid more than one month in advance; or from
failure by Mortgagor to properly account to Mortgagee as mortgagee for
any proceeds of insurance or condemnation proceeds as required by the
Mortgage; or from repairs required by the Mortgaged Property following
a casualty for which insurance proceeds are not available due to a
violation of Section 10 of the Mortgage; or from fraud, material
misrepresentation or bad faith by Mortgagor; or from waste of the
Mortgaged Property; or
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from delinquent taxes or assessments; or from Mortgagor's interference
with Mortgagee's rights under the Assignment of Leases after an Event
of Default; or from Mortgagor's failure, following an Event of Default,
to apply proceeds of rents and other income of the Mortgaged Property
toward the cost of claims, insurance premiums, debt service and other
indebtedness to the extent that the Mortgage, the Assignment of Leases
or any of the other Loan Documents require such rents and income to be
so applied; or the presence on the Mortgaged Property of any hazardous
substances, hazardous waste, residual waste, solid waste or any other
substance identified or described in Section 4(b) of the Mortgage, any
violation by Maker or the Mortgaged Property of any environmental law,
ordinance or regulation, or Maker's violation of, or failure to perform
its obligations under, Section 4 or Section 20 of the Mortgage; or any
noncompliance of the Mortgaged Property with the Americans with
Disabilities Act. Nothing in this paragraph, however, shall limit
Mortgagee's right against any tenants under leases assigned to
Mortgagee as additional security, or against any other collateral
securing Mortgagor's obligations hereunder, now or hereafter mortgaged,
pledged or assigned by Mortgagor or anyone else to Mortgagee.
(ii) Notwithstanding the provisions of Section 37(i) above,
Mortgagor's recourse liability under Section 37 (i) shall not exceed
$2,410,000.00 (as to 101 Executive Drive) and $2,695,000.00 (as to 225
Executive Drive) (collectively, "Liability Cap")."
(d) The Mortgage is hereby modified to delete the last
sentence of Section 7, and to insert in place thereof the following:
"Notwithstanding the foregoing, (i) transfers of interests in Mack-Cali
Realty, L.P. and its general partner shall not require the consent of
Mortgagee (provided that no such transfers shall limit in any way
Mortgagor's obligations hereunder), and (ii) with advance written
notice to Mortgagee (but without requiring Mortgagee's consent), the
Mortgaged Property may be conveyed to an affiliate of Mortgagor or
following a merger or consolidation of Mortgagor (provided that no such
transfers shall limit in any way Mortgagor's obligations hereunder)."
(e) The Mortgage is hereby modified to delete the phrase
"certified by John McGarvey" in Section 12.
(f) The Mortgage is hereby modified to add the phrase "except
as expressly permitted by the Assignment of Leases" at the end of Section
18(a)(iii).
(g) The Mortgage is hereby modified to delete Section 14(f).
(h) The Assignment of Leases is hereby modified to add the
following at the end of Section 1(a):
"Notwithstanding the foregoing, no consent from Mortgagee shall be
required for (i) Leases for space in 101 Executive Drive if such Leases
require a net rental of at least $7.00 per square foot, and (ii) Leases
for space in 225 Executive Drive if such Leases require a net rental of
at least $4.75 per square foot."
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(i) The Loan Documents are all hereby modified to delete any
reference to the Guaranty.
2. Assumption of Loan Documents; Representations and Warranties.
(a) MCR hereby assumes the obligations of the Partnership
under the Note and the Mortgage (as modified herein) and the other Loan
Documents as if each and every Loan Document had been originally executed by
MCR, provided that MCR is not assuming any obligations under the Guaranty. MCR
shall fully comply with each and every covenant and condition of the Loan
Documents and shall be fully bound thereby.
(b) Lender hereby approves the transfer of the Mortgaged
Property by the Partnership to MCR.
(c) MCR acknowledges and agrees that the unpaid principal
balance of the Note as of the date hereof is $2,575,703.93. MCR represents and
warrants to Lender that MCR presently possesses an unencumbered fee simple title
to the Mortgaged Property, except for those title objections not removed from
Title Commitments No. TS-11347 and TS-11349 issued to Lender by Title Services
of New Jersey, Inc. as policy issuing agent for First American Title Insurance
Company, and that the Mortgage is a valid and enforceable first lien on the
Mortgaged Property, subject only to the aforesaid title objections.
(d) MCR represents and warrants to Lender as follows: (i) MCR
is a limited partnership duly formed and validly existing in the State of
Delaware; (ii) MCR has supplied Lender with true, correct and complete copies of
MCR's Limited Partnership Agreement and Limited Partnership Certificate, and all
amendments thereto, none of which has been further amended, modified or revised,
together with a current Good Standing Certificate from the State of Delaware;
and (iii) MCR has full power and authority to engage in business and own
property in the State of New Jersey and to enter into and undertake and perform
its obligations under the Note, the Mortgage and the other Loan Documents.
3. Confirmation of Loan Documents. MCR covenants and confirms that,
except as specifically modified by this Agreement, all of the terms and
conditions of the Note, the Mortgage and the other Loan Documents shall be
unmodified and remain in full force and effect and are hereby ratified and
confirmed by MCR. MCR acknowledges and agrees that it has no defense, set-off,
recoupment or claim against Lender of any kind whatsoever as of the date hereof.
Lender acknowledges that all principal, accrued interest and other charges for
the Loan have been paid through the installment payment due on January 1, 1998.
Lender has not declared an Event of Default under the Note, the Mortgage or any
of the other Loan Documents and has no knowledge of any state of facts which,
but for the passage of time or the giving of notice, would constitute an Event
of Default under the Note, the Mortgage or the other Loan Documents.
4. No Novation. The parties to this Agreement acknowledge and confirm
that this Agreement shall not be construed as a novation of the Note, the
Mortgage or the other Loan Documents, and shall not prejudice any present or
future rights, remedies, benefits or powers belonging to or accruing to Lender
under the terms of the Note, the Mortgage or the other Loan Documents. It is the
intent of the parties hereto that this Agreement shall in no way adversely
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affect or impair the lien priority of the Mortgage. In the event this Agreement
or any part hereof, or any instrument executed in connection herewith, shall be
construed or shall operate to affect the lien priority of the Mortgage, then to
the extent such instrument creates a charge upon the Mortgaged Property, and to
the extent third parties acquiring an interest or lien upon the Mortgaged
Property between the time the Mortgage was recorded and the time this Agreement
is executed are prejudiced thereby, this Agreement shall be void and of no
further force or effect. Notwithstanding the foregoing, the parties hereto, as
between themselves, shall be bound by all the terms and conditions of this
Agreement until the Loan and all interest thereon has been paid in full.
5. No Further Commitment. Nothing in this Agreement shall be construed
to commit Lender to any further modification or amendments of the Note, the
Mortgage or the other Loan Documents, nor as a waiver by Lender of any rights or
remedies to which Lender may be entitled under the Loan Documents.
6. Releases.
(a) MCR, its partners, employees and agents, for themselves,
their respective heirs, personal representatives, successors and assigns, hereby
release Lender, its shareholders, officers, directors, employees, agents and
attorneys and each of their respective heirs, personal representatives,
successors and assigns and affiliates, of and from any and all actions, causes
of action, proceedings, claims, demands, damages, costs, liabilities, losses,
agreements and obligations as of the date hereof, of any nature whatsoever,
whether contingent or matured, known or unknown, at law or in equity arising out
of, or in any way related to, the Loan, the Note, the Mortgage, the other Loan
Documents or the Mortgaged Property. MCR and its partners acknowledge and agree
that Lender is relying on the foregoing representations and covenants as a
material inducement to Lender to execute this Agreement.
(b) Lender, its shareholders, officers, directors, employees,
agents and attorneys and each of their respective heirs, personal
representatives, successors, assigns and affiliates, hereby release Partnership,
Guarantors, and their respective partners, employees, agents and attorneys and
each of their respective heirs, personal representatives, successors and
assigns, of and from any and all actions, causes of action, proceedings, claims,
demands, damages, costs, liabilities, losses, agreements and obligations, of any
nature whatsoever, whether contingent or material, known or unknown, at law or
in equity arising from any act, thing, omission or failure to act occurring
after the date hereof and arising out of, or in any way related to, the Loan,
the Mortgage, the Guaranty, the other Loan Documents or the Mortgaged Property,
including, without limitation, any failure of MCR to perform any of its
obligation under the Loan Documents. Lender acknowledges and agrees that
Partnership and Guarantors relied on the foregoing representations and covenants
as a material inducement to Partnership and Guarantors to execute this
Assumption Agreement.
7. Notices. Section 25 of the Mortgage is hereby amended to provide
that all notices, requests and demands upon the respective parties hereto shall
be effective when hand delivered to such party at the address set forth below,
or if sent by overnight delivery service, on the next business day, or if sent
by United States mail, postage prepaid, certified mail, on the third business
day after the day on which mailed or sent, addressed to such party as follows:
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To Lender: Sun Life Assurance Company
of Canada
One Sun Life Executive Park
Wellesley Hills, MA 02181
Attention: Ms. Kerrianne Lappin
With copies to: William O'Connor, Vice President
GMAC Mortgage Corporation
650 Dresher Road
P.O. Box 1015
Horsham, PA 19044
Gregory Kleiber, Esquire
Fox, Rothschild, O'Brien & Frankel
2000 Market Street
Philadelphia, PA 19103
To MCR: Mack-Cali Realty, L.P.
11 Commerce Drive
Cranford, NJ 07016
Attention: Roger Thomas, Esq., Vice President and General
Counsel
With a copy to: Richard Abramson, Esq.
Cole, Schotz, Meisel, Forman &
Leonard
25 Main Street
P.O. Box 800
Hackensack, New Jersey 07602-0800
or to such other address as may be furnished in writing for such purpose.
8. Lender's Costs. MCR agrees to pay on demand all costs and expenses
of Lender in connection with the preparation, execution and delivery of this
Agreement (including the fees and out of pocket costs of counsel with respect
thereto). The agreement set forth in this Section shall survive payment of the
Note.
9. Subordination, Non-Disturbance and Attornment Agreements. Subject to
the conditions set forth below, Lender shall execute Subordination,
Non-Disturbance and Attornment Agreements ("SNDA") with new tenants of the
Mortgaged Property from time to time upon written request from MCR. Each such
request shall be accompanied by a written certification from MCR confirming that
the SNDA as presented is in the form attached hereto as Exhibit C with no
changes or alterations other than completions of blanks. Lender shall use its
best efforts to execute and return an SNDA within thirty (30) days after receipt
of the completed SNDA and the certification, each of which must conform to the
requirements of the previous sentence. Lender shall have no obligation to review
or execute any SNDAs that do not conform to such requirements or are not so
certified.
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10. General. This Agreement shall be governed by and construed under
the laws of the State of New Jersey. This Agreement represents the entire
agreement between the parties hereto respecting the subject matter hereof, and
neither party shall be bound by any prior discussions, proposals or oral
agreements. The parties agree that this Agreement may be amended only in a
writing signed and approved by both parties. The parties agree that each and
every provision of this Agreement has been mutually negotiated, prepared and
drafted, and each party has been represented by counsel, so that in connection
with the construction of any provision hereof, no consideration shall be given
to the issue of which party actually prepared, drafted, requested or negotiated
any provision or deletion. The headings of each Section hereof form no part of
the content hereof.
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In Witness Whereof, the parties hereto have executed this Agreement on
the day and year first set forth above.
LENDER:
SUN LIFE ASSURANCE COMPANY OF CANADA
By:
By:
PARTNERSHIP:
MOORESTOWN WEST PARTNERSHIP
By: ________________________________
John S. McGarvey, general partner
By: ________________________________
Joanne H. McGarvey, general partner
By: ________________________________
William G. Price, Jr., general partner
MCR:
Mack-Cali Realty, L.P.
By: Mack-Cali Realty Corporation
By: ________________________________
EXHIBIT NO. 10.136
AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT, made as of the 2nd day of February, 1998 (the
"Effective Date"), by and between BREL ASSOCIATES XIV, L.P., a New York limited
partnership, having an office at c/o Banque Nationale de Paris, 499 Park Avenue,
New York, New York 10022 (hereinafter referred to as "Seller"), and MACK-CALI
REALTY, L.P., 11 Commerce Drive, Cranford, New Jersey 07016 (hereinafter
referred to as "Purchaser").
W I T N E S S E T H :
WHEREAS, Seller is the owner of certain land(s), building(s) and
improvements (hereinafter collectively referred to as the "Property") situated
in the Borough of Fort Lee, County of Bergen, New Jersey, being commonly known
as 2115 Linwood Avenue, as more particularly described in Exhibit "A" annexed
hereto and made a part hereof; and
WHEREAS, Seller desires to sell the Property and Purchaser desires to
purchase the Property on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises herein made, it
is agreed as follows:
1. SALE AND PURCHASE. Seller agrees to sell and Purchaser agrees to
purchase the Property, including any and all easements, rights of way,
privileges, appurtenances and rights belonging to or inuring to the benefit of
said Property and any fixtures and personal property presently located at the
Property used in connection with the current operation of the Property, for the
Purchase Price (as hereinafter defined) and upon the terms and conditions
hereinafter provided. Seller reserves the right to remove from the Property
prior to the Closing (hereinafter defined) all wall partitions not installed in
the Property and all furniture and any other personal property located at the
Property not belonging to any tenants or occupants thereof.
2. PURCHASE PRICE. The purchase price of the Property shall be
$5,000,000 Dollars (the "Purchase Price") payable by Purchaser as follows:
A. Upon execution and delivery of this Agreement, by
depositing with Wolff & Samson, P.A., Seller's Attorney (the "Escrow Agent"), a
sum equal to $500,000 Dollars by a good, unendorsed certified or official bank
check drawn on an account of Purchaser, subject to collection, payable to the
order of the Escrow Agent or, at Purchaser's election, by a bank wire transfer
of immediately available funds to an account or accounts designated by Escrow
Agent (the "Deposit"), which Deposit shall be maintained by Escrow Agent
pursuant to the provisions of Paragraph 29 of this Agreement.
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B. (i) At the closing of title, by paying to Seller the
balance of the Purchase Price by a wire transfer of immediately available funds
of Purchaser at a federal or state chartered bank or reputable, domestic lending
institution, subject to the adjustments and prorations described in Paragraph 16
of this Agreement.
(ii) If Purchaser shall fail to deliver the Deposit
in accordance with (A) above, or if Escrow Agent shall be unable immediately to
collect on such Deposit, such failure or inability shall constitute a default by
Purchaser, and this Agreement shall terminate and neither party shall have any
further obligation or liability to the other except as may otherwise be provided
for herein.
3. CLOSING DOCUMENTS.
A. At the Closing, Seller shall execute and deliver to
Purchaser (i) a Bargain and Sale deed; (ii) an affidavit of title, the form and
substance of which shall be subject to the reasonable approval of Purchaser's
title insurance company; (iii) an assignment and assumption of Seller's interest
in the property management agreement or service contracts referred to in
Paragraph 8 hereof ("Assignment and Assumption of Contracts") in form
satisfactory to the parties; (iv) an affidavit by Seller that Seller is not a
"foreign person" within the meaning of Section 1445 of the United States
Internal Revenue Code of 1986, as amended, and the regulations issued
thereunder; (v) a letter of non-applicability from the New Jersey Department of
Environmental Protection to the effect that the Property is exempt from the
application of the Industrial Site Recovery Act, N.J.S.A. 13:1k-6 et seq.; and
(vi) such documents and/or instruments as may be reasonably required by
Purchaser's attorney or Purchaser's title insurance company to effectuate the
within transaction. The deed and any other documents which are intended to be
recorded shall be executed and acknowledged in a manner property for
recordation.
B. At the Closing, the Purchaser shall execute and deliver to
Seller (i) the balance of the Purchase Price; (ii) the Assignment and Assumption
of Contracts; and (iii) such documents and/or instruments as may reasonably be
required by Seller's attorney or Purchaser's title insurance company to
effectuate the within transaction.
4. TITLE.
A. Purchaser, at its expense, shall obtain a title insurance
binder from a title insurance company doing business in the State of New Jersey
insuring marketable title (as hereinafter defined) to the Property. For the
purposes of this Agreement, "marketable title" shall be deemed to be such title
as any title insurance company doing business in the State of New Jersey shall
insure at standard rates and subject only to the usual printed exceptions and to
the Permitted Encumbrances set forth on Exhibit "B" annexed hereto (the
"Permitted Encumbrances"). Purchaser shall, by no later than ten (10) days after
the Effective Date, forward to Seller a copy of its title insurance binder and
specify in writing any alleged defects
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set forth in said binder ("Title Obligations"), failing which Purchaser shall be
deemed to have waived all Title Objections, TIME BEING OF THE ESSENCE as to
Purchaser's obligation to so notify Seller. Within two (2) business days
following Seller's receipt of said binder and notice of any Title Objections,
Seller shall have the right (without being obligated or required to commence
litigation or to incur any expenditure of monies), (i) to agree to cause any
Title Objection to be removed as a title exception prior to Closing, (ii) to
cause another title company to insure marketable title in accordance herewith;
or (iii) to take no action with respect to any Title Objections. If Seller
causes marketable title to be insured for the Property, Purchaser shall be
required to complete the purchase of the Property as herein provided. Seller
may, if it so elects, postpone the Closing for a period not to exceed sixty (60)
calendar days in order to cure a Title Obligation. If Seller is unable or
unwilling to cause marketable title to be insured for the Property, then
Purchaser shall have the right, at its sole option, either to (i) waive the
Title Objections and accept such title as Seller is able to convey without any
diminution in the Purchase Price, or (ii) terminate this Agreement.
B. Purchaser shall make its election to accept such title as
Seller shall be able to convey or to terminate this Agreement by no later than
the end of the Due Diligence Period. If Purchaser shall fail to so notify
Seller, then Purchaser shall be deemed to have elected to waive the Title
Objections and accept title without any abatement or reduction in the Purchase
Price.
C. Except for any liens affecting the Property in an amount
not to exceed $150,000.00 which were caused by the direct acts of Seller, Seller
shall have no obligation to expend any amounts due to any lienholder of the
Property which are necessary to obtain a release or discharge of such lien in
order to cure a Title Objection. To the extent Seller agrees to pay any such
sum(s) of money for such purpose, then, at the option of Seller, such sum(s) may
be paid at the Closing from the Purchase Price. In the event any liens affecting
the Property become of record after delivery of the Title Objections which
Seller is not required to discharge as provided for above, then Purchaser's sole
remedy is to either (i) accept such title as Seller is able to convey without
diminution of the Purchase Price or (ii) terminate this Agreement, in which
event Seller shall reimburse Purchaser for its actual costs for title searches,
survey and legal fees, but not to exceed $5,000.00 in the aggregate.
D. It is understood and agreed that Seller acquired the
Property at a foreclosure sale and acquired title thereto by way of a Sheriff's
Deed executed and delivered by the Bergen County Sheriff, a copy of which is
annexed hereto as Exhibit C. It is further understood and agreed that the Deed
conveying title to the Property shall convey the same quality of title as that
conveyed to Seller by such Sheriff's Deed.
5. POSSESSION; TENANCIES.
A. Seller shall deliver to Purchaser, and Purchaser shall
accept from Seller, vacant possession of the Property at the Closing, free of
all tenants or occupants.
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B. (i) Purchaser acknowledges that the civil action, Borough
of Fort Lee vs. Fort Lee Headquarters Limited Partnership, Red Rock Holdings,
Ltd., Banque National de Paris and DBR Management, Inc. has been adjudicated in
the Superior Court of New Jersey, Chancery Division, Bergen County, Docket No.
BER-C-325-95E (the "Borough Litigation"), pursuant to which the Court terminated
any alleged occupancy rights by the Borough and the Borough has vacated the
Property. Notwithstanding the foregoing, Seller reserves the right, and shall
have the right, without interference from Purchaser, to continue to pursue its
action for monetary relief or damages against the Borough and no such portion of
the Borough Litigation will be assigned to Purchaser. This provision shall
survive the Closing.
(ii) Seller represents that there are no tenants or
occupants of the Property as of the Effective Date and Seller covenants not to
grant any leases after the Effective Date.
6. RISK OF LOSS AND CONDEMNATION.
A. Seller assumes the risk of any material loss or damage to
the Property beyond ordinary wear and tear until delivery of the deed to
Purchaser at Closing. If, after the Effective Date, any material portion of the
Property is destroyed or damaged as a result of fire or other casualty (meaning
a casualty the cost of which to repair exceeds $500,000.00), and such repair
shall not have been completed prior to Closing, Seller or Purchaser shall have
the right to terminate this Agreement by delivery of written notice to the other
party within ten (10) calendar days of such casualty, in which event the Escrow
Agent shall return the Deposit to Purchaser and, except as provided for herein,
all rights obligations and liabilities of the parties hereto shall thereupon
terminate. If Purchaser does not have a right to terminate this Agreement or,
having a right to terminate this Agreement, elects not to terminate this
Agreement, then at Closing, Seller shall pay over or assign to Purchaser all
insurance proceeds recovered by Seller and not theretofore used to repair or
restore the Property, less any expenses incurred by Seller in seeking recovery
of such insurance proceeds; provided, however, Purchaser shall be entitled to a
credit against the Purchase Price in an amount equal to the amount of any
deductible maintained by Seller.
B. If prior to Closing all or substantially all of the
Property shall be condemned or taken as the result of the exercise of the power
of eminent domain, then this Agreement shall be null and void and of no further
force and effect, in which event Escrow Agent shall return the Deposit to
Purchaser. If prior to the Closing, less than all or substantially all of the
Property shall be condemned or taken as the result of the exercise of the power
of eminent domain, and Purchaser in its reasonable judgment shall determine that
(i) the remaining portion of the Property is not suitable for the continued use
of the Property as an office building, then Purchaser may terminate this
Agreement within five (5) calendar days after receipt of notice thereof or at
the Closing, whichever is earlier, in which event Escrow Agent shall return the
Deposit to Purchaser without further liability hereunder on the part of either
party except as provided for herein, or (ii) the remaining portion of the
Property is suitable for the continued use of the Property, then Seller shall be
entitled to any award
<PAGE>
resulting from any condemnation proceeding, but Purchaser shall be entitled to a
credit against the Purchase Price in an amount equal to said proceeds up to the
amount of the Purchase Price unless such condemnation proceedings shall be
pending on the day of Closing, in which event there shall be no such credit and,
at Closing, Seller shall assign all of its rights and interest in said
proceedings to Purchaser.
7. REPRESENTATIONS.
A. The acceptance of the deed to the Property by Purchaser
shall be deemed an acknowledgment by Purchaser that Seller has fully complied
with, or that Purchaser has waived its right to demand compliance with, all of
Seller's obligations hereunder, and that Seller shall have no further liability
with respect to any of its representations, warranties, covenants or agreements
under this Agreement. All representations made by Seller hereunder or elsewhere
in this Agreement are true and correct to the best of Seller's knowledge and
belief. No representation, warranty, covenant or agreement of Seller shall
survive the Closing.
B. Seller's Representations. In order to induce Purchaser to
enter into this Agreement, Seller represents that:
(i) Seller and the person executing this Agreement on
behalf of Seller have the right, power and authority to enter into this
Agreement and to fulfill its terms; and
(ii) The execution, delivery and performance of this
Agreement in accordance with its terms does not violate any contract, agreement,
commitment, order, judgment, decree, law, regulation or ordinance to which
Seller is a party or by which it is bound and constitutes a legal valid and
binding obligation of Seller.
(iii) Seller shall continue to maintain liability and
casualty insurance on the Property until the Closing and shall provide evidence
thereof to Purchaser.
C. Purchaser's Representations. In order to induce Seller to
enter into this Agreement, Purchaser warrants and represents that:
(i) Purchaser and the person executing this Agreement
on behalf of Purchaser have the right, power and authority to enter into this
Agreement and to fulfill its terms; and
(ii) The execution, delivery and performance of this
Agreement in accordance with its terms does not violate any contract, agreement,
commitment, order, judgment, decree, law, regulation or ordinance to which
Purchaser is a party or by which it is bound and constitutes a legal, valid and
binding obligation of Purchaser.
(iii) Purchaser represents that Purchaser is a
sophisticated and
<PAGE>
experienced purchaser of properties, such as the Property, and has been duly
represented by counsel in connection with the negotiation of this Agreement and
the purchase of the Property.
8. CONDITION OF THE PROPERTY; OPERATION OF THE PROPERTY.
A. Purchaser acknowledges and agrees (i) that Purchaser has
examined and/or subject to Paragraph 9 hereof, shall have the right to examine,
the Property and is familiar with the condition thereof including any mechanical
or structural defects at the Property; (ii) that except as expressly set forth
in this Agreement, neither Seller, nor the employees, agents or attorneys of
Seller have made any verbal or written representations or warranties whatsoever
to Purchaser, either express or implied; and (iii) that Purchaser has not relied
on any representations or warranties except those expressly set forth in this
Agreement. Specifically, without limitation, no representations or warranties
have been made to Purchaser with respect to: (i) the physical condition of the
Property; (ii) the environmental condition of the Property; (iii) the
applicability to the Property of any particular statues, laws, codes,
ordinances, regulations or rules, or the compliance of the Property therewith,
including, without limitation, zoning, building and health codes, regulations
and ordinances; and (iv) the expenses of or in respect of the Property.
Purchaser agrees to accept the Property "AS-IS, WHERE-IS and WITH ALL FAULTS" at
the Closing, including any latent or patent defects in or affecting the
Property. Purchaser and any person or entity claiming by or under Purchaser,
shall at the Closing be deemed to have released Seller and its affiliates,
employees, officers, directors, representatives and agents from any and all
claims, costs, losses, liabilities, damages, expenses, demands or causes of
action now or hereafter arising from or related to any matter of any kind or
nature relating to the Property.
B. From and after the Effective Date until the Closing, Seller
shall maintain the Property in its present condition, subject to ordinary wear
and tear, except as provided for herein. Seller represents that the day to day
operation and maintenance of the Property is presently in the care, custody and
control of Quinlan Properties, L.P. ("Quinlan") pursuant to a written property
management agreement dated May 20, 1996, a copy of which has been delivered to
Purchaser. Purchaser may, at its election, assume Seller's obligations under
said management agreement or request that Seller cancel such management
agreement at the Closing. Seller shall be responsible for any cancellation
penalty incurred as a result of such cancellation. To the best of Seller's
knowledge, there are no service contracts presently in effect which are not
terminable, without penalty, on thirty (30) calendar days' written notice.
Purchaser may, at its election, assume Seller's obligations under said service
contracts or request that Seller cancel such service contracts at the Closing. A
list of all such service contracts is annexed hereto and made a part hereof as
Exhibit D.
C. From and after the Effective Date until the Closing, Seller
shall not, without the prior written consent of Purchaser, which consent
Purchaser agrees it shall not unreasonably withhold or delay, enter into any new
service contract unless the same shall not be binding on Purchaser after the
Closing or shall be cancelable, without penalty, upon not more than thirty (30)
calendar days' written notice (unless Purchaser, in its sole discretion,
<PAGE>
elects to accept the same).
9. DUE DILIGENCE REVIEW.
A. From and after the Effective Date until 5:00 P.M. (New York
time) on the first business day which is fifteen (15) days after the Effective
Date or sooner if Seller and Purchaser mutually agree (such period being
hereinafter referred to as the "Due Diligence Period"), Purchaser and
Purchaser's agents, at Purchaser's sole cost and expense, shall have the right
to enter upon the Property in order to make such physical inspection of the
Property as Purchaser deems reasonably necessary and appropriate. If any
inspections are performed on the Property, Purchaser shall keep the Property in,
or restore the Property to, its physical condition as of the Effective Date.
Prior to such entry or inspection, Purchaser, or its designated representatives
or agents who will perform such inspections, (i) shall obtain liability
insurance in form, substance, coverage and amounts reasonably acceptable to
Seller and (ii) shall deliver certificates of such insurance to Seller. Such
insurance shall continue until the Closing. Notwithstanding anything to the
contrary set forth in the foregoing, in exercising its rights under this
Paragraph, Purchaser shall not interfere otherwise with the normal operation,
use, occupancy, management or maintenance of the Property.
B. Purchaser agrees to indemnify and hold Seller harmless from
and against any claim, suit or damage arising out of Purchaser's entry and/or
inspections on or about the Property. Such indemnity shall survive any
termination of this Agreement.
C. In the event that any such examinations, reviews and/or
inspections cause Purchaser, in its sole discretion, to believe that the
Property is not suitable for Purchaser's purposes, then Purchaser may, at any
time during the Due Diligence Period, terminate this Agreement by giving written
notice of such termination to Seller, whereupon the parties hereto shall be
released from any and all liability and obligation hereunder, except as
expressly provided herein, and the Deposit shall be returned to Purchaser
forthwith.
D. In the event Purchaser does not terminate this Agreement on
or prior to the last day of the Due Diligence Period as provided herein, as to
which date TIME IS OF THE ESSENCE, Purchaser shall no longer have the right to
terminate this Agreement but shall have the continued right until Closing to
inspect, survey and make other examinations of the Property, subject in all
cases to Purchaser's indemnification and restoration obligations set forth in
this Paragraph 9.
E. In the event Purchaser does not cancel this Agreement at
the end of the Due Diligence Period, Purchaser shall be deemed to have (i)
represented and warranted that it has inspected all of the Property and the
Property Documents and that in such inspection Purchaser has not discovered any
material matter which would form the basis for a claim by Purchaser that the
Property is not in the condition agreed to or that Seller has breached any
representation, warranty, covenant or agreement of Seller made in this Agreement
relating to the Property or the Property Documents and that Purchaser has no
actual knowledge of any
<PAGE>
such matter and (ii) waived any claim that Purchaser may have against Seller and
released Seller from any such claim now or hereafter arising from or related to
any matter of any kind or nature relating to the Property.
F. Upon termination of this Agreement, neither party shall
have liability to the other, except that (i) Purchaser's indemnification and
restoration obligations set forth herein shall survive as set forth in such
provisions, (ii) Purchaser shall be obligated to deliver to Seller any reports
that were performed by or on behalf of Purchaser with respect to the Property,
and (iii) Purchaser shall return all copies of all confidential information
furnished to Purchaser or Purchaser's agents by Seller.
G. Upon the execution and delivery of this Agreement by Seller
and Purchaser, or as soon thereafter as reasonably possible, in addition to
those materials heretofore provided to Purchaser by Seller or the Broker (as
hereinafter defined), Seller shall make available, or cause Quinlan to make
available, to Purchaser for its inspection during normal business hours at
Quinlan's offices those documents in Seller's possession affecting the ownership
and operation of the Property (the "Property Documents"). Purchaser, at its sole
cost and expense, may make copies of the Property Documents but may not remove
the originals from Quinlan's offices. Contemporaneously with the delivery of
copies of the Property Documents, Purchaser shall sign an inventory list of the
copies of the Property Documents so delivered to Purchaser for Purchaser's
inspection and/or copying, acknowledging receipt of such Property Documents.
H. Purchaser acknowledges that all information in respect of
the Property furnished, or to be furnished, to Purchaser has been and will be so
furnished on the condition that Purchaser maintain the confidentiality thereof.
Accordingly, Purchaser shall, and shall cause its directors, officers and other
employees and representatives to hold in strict confidence, and not disclose to
any other party without the prior written consent of Seller until the Closing
shall have been consummated, any of the information in respect of the Property
delivered to Purchaser by Seller or any of its agents, representatives or
employees. In the event the Closing does not occur and this Agreement is
terminated, Purchaser shall promptly return to Seller all originals and copies
of all such information without retaining any copy thereof or extract therefrom.
Notwithstanding anything to the contrary hereinabove set forth, Purchaser may
disclose such information (i) on a need-to-know basis to its employees or
members of professional firms serving it in connection with this transaction,
(ii) as is requested by a reputable institutional lender in connection with any
financing of the purchase of the Property, and (iii) as any governmental agency
may require in order to comply with applicable laws or regulations; provided,
however, that all such individuals and/or entities shall agree in writing to be
bound by the confidentiality provisions of this Agreement and that Purchaser
shall indemnify Seller with respect to any breach of such agreement by any such
person and/or entity. The provisions of this Section shall survive the Closing
or earlier termination of this Contract.
10. MUNICIPAL INSPECTION. Purchaser, at its sole expense, shall be
<PAGE>
responsible to obtain a Certificate of Occupancy and/or all other municipal
certificates or approvals that may be required to convey the Property, to occupy
the Property, or to maintain business operations thereon.
11. NO FINANCING CONTINGENCY. Purchaser represents and warrants that
the consummation of this transaction by Purchaser is not contingent or
conditioned upon Purchaser's obtaining any financing and that Purchaser has, or
will have at the time of Closing, sufficient cash to complete the purchase.
12. ASSESSMENTS. If at the Closing the Property or any part thereof
shall be or shall have been affected by any assessments which are or may become
payable in annual installments of which the first installment is then due 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 delivery of the deed, shall be assumed by Purchaser. The cost of all
other assessments for work commenced after the date of this Agreement will be
borne by Purchaser.
13. CLOSING OF TITLE. The closing of title (the "Closing") shall take
place on the first business day which is thirty (30) days after the expiration
of the Due Diligence Period (the "Closing Date"), at 11:00 A.M. at the offices
of Wolff & Samson, 5 Becker Farm Road, Roseland, New Jersey 07068, or at such
other location reasonably acceptable to the parties.
14. ASSIGNMENT. This Agreement may not be assigned by Purchaser without
the prior written consent of Seller.
15. BROKERAGE. Each party represents and warrants to the other that it
dealt with no broker or other person entitled to claim fees for such services in
connection with the negotiation, execution and delivery of this Agreement other
than CB Commercial Real Estate Group, Inc. and Plawker Real Estate, Inc.
(collectively, the "Broker"). Seller agrees to pay Broker a commission pursuant
to a separate agreement with Broker. Based upon the aforesaid warranty and
representation, each party agrees to defend, indemnify and hold the other party
harmless from and against any and all claims for finders' fees or brokerage or
other commissions which may at any time be asserted against the indemnified
party founded upon a claim that the substance of the aforesaid representation of
the indemnifying party is untrue, together with any and all losses, damages,
costs and expenses, including reasonable attorneys' fees and disbursements,
relating to such claims or arising therefrom or incurred by the indemnified
party in connection with this indemnification provision. The provisions of this
Paragraph 15 shall survive the Closing.
<PAGE>
16. CLOSING ADJUSTMENTS AND COSTS.
A. The following shall be apportioned and adjusted as of 11:59
p.m. of the day before the Closing and the net amount thereof shall be added to
or deducted from, as the case may be, the Purchase Price to be paid at Closing:
All items of income and expense, real estate taxes
and sewer rents, if any, fuel, electricity, gas, water, service contracts and
other similar expenses.
B. All recording fees for the Deed, the realty transfer fee
and all title insurance search fees and premiums shall be paid by Purchaser.
Each party shall pay the fees of its respective counsel.
17. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto. No variations or modifications of or amendments to
the terms of this Agreement shall be binding unless reduced to writing and
signed by the parties hereto.
18. COUNTERPARTS. This Agreement may be signed in counterparts, all of
which when taken together shall constitute a single agreement.
19. BINDING EFFECT. This Agreement shall be binding upon and shall
inure to the benefit of Seller and Purchaser and their respective successors and
assigns, except as otherwise provided herein.
20. CONSTRUCTION. The interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of New Jersey. Seller
and Purchaser agree that each party and its counsel have reviewed this Agreement
and that the normal rule of construction to the effect that any ambiguities are
to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement or any amendments to exhibits thereto.
21. FURTHER ASSURANCES. Each party agrees that at any time or from time
to time upon written request of the other party, it will execute and deliver all
such further documents and do all such other acts and things as may be
reasonably required to confirm or consummate the within transaction.
22. CAPTIONS. The captions preceding the paragraphs of this Agreement
are intended only as a matter of convenience and for reference and in no way
define, limit or describe the scope of this Agreement or the intent of any
provision hereof.
23. NOTICES. All notices required to be given pursuant to this
Agreement shall be sent by certified mail, return receipt requested or by same
day delivery service, or by a national overnight delivery service, or by
facsimile transmission to the parties at the following addresses:
<PAGE>
A. If to Seller, at its address set forth in the heading to
this Agreement, to the attention of Mr. Curtis Deane, Telecopy Number:
212-418-8242, with a copy to: Wolff & Samson, P.A., 5 Becker Farm Road,
Roseland, New Jersey 07068, Attention: Dennis Brodkin, Esq., Telecopy Number:
973-740-1407.
B. If to Purchaser, at its address set forth in the heading to
this Agreement, to the attention of
C. If to Escrow Agent, to Wolff & Samson, P.A., 5 Becker Farm
Road, Roseland, New Jersey 07068, Attention: Dennis Brodkin, Esq., Telecopy
Number: 973-740- 1407.
Any party may designate a different address by written notice
to the other party.
Notices shall be deemed received (i) on the day of receipt if
sent by same day delivery service, (ii) on the second business day after
mailing, if sent by certified mail, (iii) on the next business day after mailing
if sent by overnight delivery, and (iv) on receipt of facsimile confirmation if
sent by facsimile transmission.
24. REMEDIES.
A. If Purchaser shall default in its obligations hereunder,
Seller's sole remedy shall be to retain the Deposit as liquidated damages, and
not as a penalty, it being agreed that Seller's damages might be impossible to
determine, and that the Deposit constitutes a fair and reasonable amount of
damages under the circumstances.
B. If Seller shall default in its obligations hereunder,
Purchaser's sole remedy shall be to either (i) terminate this Agreement,
whereupon the Deposit shall be returned to Purchaser or (ii) sue for specific
performance.
25. WAIVER OF CONDITIONS. Purchaser and Seller each shall have the
right, in the sole and absolute exercise of its discretion, to waive any of the
terms or conditions of this Agreement which are strictly for its benefit and to
complete the Closing in accordance with the terms and conditions of this
Agreement which have not been so waived.
26. NO RECORDING. Purchaser shall not record this Agreement or any
memorandum or short form hereof in any place or office of public record and any
action in violation of this provision shall be deemed a default and shall
terminate this Agreement by notice delivered to Purchaser.
27. SEVERABILITY. The terms, conditions, covenants and provisions of
this Agreement shall be deemed to be severable. If any clause or provision
herein contained shall be adjudged to be invalid or unenforceable by a court of
competent jurisdiction or by operation of applicable law, the same shall be
deemed to be severable and shall not affect the validity of
<PAGE>
any other clause or provision herein, but such other clauses or provisions shall
remain in full force and effect, unless such provisions shall relate to the
Purchase Price or other monies to be paid hereunder. In such event, Seller, on
notice to Purchaser, shall have the right to terminate this Agreement on the
date specified in such notice, whereupon neither party shall have any further
obligation to the other.
28. GENDER. As used in this Agreement, the masculine gender shall
include the feminine or neuter genders and the neuter gender shall include the
masculine or feminine genders, the singular shall include the plural and the
plural shall include the singular, wherever appropriate to the context.
29. ESCROW PROVISIONS.
A. The Deposit shall be held in escrow by the Escrow Agent in
one or more interest-bearing FDIC insured bank accounts selected by Escrow Agent
on the terms hereinafter set forth. All interest earned thereon shall be deemed
part of the Deposit.
B. When the Closing has occurred, Escrow Agent shall deliver
the Deposit to Seller in which event the Deposit, and the interest included
therein, shall be applied in reduction of the Purchase Price.
C. If Escrow Agent receives a written request for the Deposit
signed by Seller stating that Purchaser has defaulted in the performance of its
obligations under this Agreement, Escrow Agent shall deliver a copy or copies of
such request to Purchaser in accordance with the provisions of Paragraph 23
hereof, and no earlier than the third business day after the receipt of such
notice by Purchaser, Escrow Agent shall deliver the Deposit to Seller.
D. If Escrow Agent receives a written request signed by
Purchaser stating that this Agreement has been canceled or terminated and that
Purchaser is entitled to the Deposit, Escrow Agent shall deliver a copy of such
request to Seller in accordance with the provisions of Paragraph 23 hereof, and
no earlier than the third business day after the receipt of such notice by
Seller, Escrow Agent shall deliver the Deposit to Purchaser.
E. All mailings and notices from Escrow Agent to Seller and/or
Purchaser, or from Purchaser and/or Seller to Escrow Agent, provided for in this
Escrow Agreement shall be given in the manner set forth in Paragraph 23 above.
All notices from Purchaser and Seller must be given by a person having proper
authority to act by and on behalf of such party and shall be duly notarized.
F. If Escrow Agent receives written instructions signed by
Seller instructing Escrow Agent to pay the Deposit to Purchaser, or if Escrow
Agent receives written instructions signed by Purchaser instructing Escrow Agent
to pay the Deposit to Seller, Escrow Agent shall deliver the Deposit in
accordance with such instructions.
<PAGE>
G. Notwithstanding the foregoing provisions of (C) and (D)
above, if Escrow Agent shall have received a written notice of objection from
Seller or Purchaser, or shall have received at any time before actual
disbursement of the Deposit a written notice signed by either Seller or
Purchaser advising that litigation between Seller and Purchaser over entitlement
to the Deposit has been commenced, or shall otherwise believe in good faith at
any time that a disagreement or dispute has arisen between the parties hereto
over entitlement to the Deposit (whether or not litigation has been instituted),
Escrow Agent shall have the right, upon written notice to both Seller and
Purchaser, (i) to deposit the Deposit with the Clerk of the Court in which any
litigation is pending, and/or (ii) to take such affirmative steps as it may, at
its option, elect in order to terminate its duties as Escrow Agent, without
limitation, the depositing of the Deposit with a court of competent jurisdiction
and the commencement of an action for interpleader, the costs thereof to be
borne by whichever of Seller or Purchaser is the losing party, and thereupon
Escrow Agent shall be released of and from all liability hereunder except for
any previous gross negligence or willful default.
H. Escrow Agent shall have no duty to invest all or any
portion of the Deposit during any period of time Escrow Agent may hold the same
prior to disbursement thereof except in one or more interest-bearing accounts as
aforesaid, and any disbursements or deliveries of the Deposit required herein to
be made by Escrow Agent shall be with such interest, if any, as shall have been
earned thereon.
I. Purchaser acknowledges that Escrow Agent is also counsel to
Seller and shall have the right to represent Seller in any dispute between
Seller and Purchaser regarding the disposition of the Deposit or otherwise.
J. Escrow Agent shall be under no obligation to deliver any
instrument or documents to a court or take any other legal action in connection
with this Agreement or towards its enforcement, or to appear in, prosecute or
defend any action or legal proceeding which, in Escrow Agent's opinion, would or
might involve it in any cost, expense, loss or liability unless, as often as
Escrow Agent may require, Escrow Agent shall be furnished with security and
indemnity satisfactory to it against all such costs, expenses, losses or
liabilities.
K. Escrow Agent shall not be liable for any error in judgment
or for any act done or omitted by it in good faith, or for any mistake of fact
or law, and is released and exculpated from all liability hereunder except for
willful misconduct or gross negligence.
L. Escrow Agent's obligations hereunder shall be as a
depositary only, and Escrow Agent shall not be responsible or liable in any
manner whatever for the sufficiency, correctness, genuineness or validity of any
notice, written instructions or other instrument furnished to it or deposited
with it, or for the form of execution of any thereof, or for the identity or
authority of any person depositing or furnishing same.
M. Escrow Agent shall not have any duties or responsibilities
except those set forth in this Paragraph 29, and shall not incur any liability
in acting upon any signature,
<PAGE>
notice, request, waiver, consent, receipt or other paper or document believed by
it to be genuine, and Escrow Agent may assume that any person purporting to give
any notice or advice on behalf of any party in accordance with the provisions
hereof has been duly authorized to do so. Seller and Purchaser hereby jointly
and severally indemnify and agree to hold and save Escrow Agent harmless from
and against any and all loss, damage, cost or expense Escrow Agent may suffer or
incur as Escrow Agent hereunder unless caused by its gross negligence or willful
default.
N. Escrow Agent shall be entitled to consult with counsel in
connection with its duties hereunder. Seller and Purchaser agree to reimburse
Escrow Agent for all costs and expenses incurred by Escrow Agent in performing
its duties as Escrow Agent including, but not limited to, attorneys' fees
(either paid to retained attorneys or amounts representing the fair value of
legal services rendered to itself).
O. The terms and provisions of this Paragraph 29 shall create
no right in any person, firm or corporation other than the parties hereto and
their respective successors and permitted assigns, and no third party shall have
the right to enforce or benefit from the terms hereof.
30. NO OFFER. The submission of this Agreement for examination does not
constitute a reservation of, or an offer for, this Property, and this Agreement
shall become effective only upon the full execution by both Seller and
Purchaser.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement the day and year first above written.
SIGNED, SEALED AND DELIVERED SELLER:
IN THE PRESENCE OF:
BREL ASSOCIATES XIV, L.P.
By: Real French Fourteen,
Ltd., its
general partner
- -----------------------------
By:_______________________________
Name:
Title:
- -----------------------------
By:_______________________________
Name:
Title:
<PAGE>
PURCHASER:
- -----------------------------
- ----------------------------------
Name: John R. Cali
Title: Executive Vice
Pres.
ESCROW AGENT:
WOLFF & SAMSON, P.A.
- -----------------------------
By:_______________________________
Name: Dennis Brodkin
Title: Partner
EXHIBIT NO. 10.137
AGREEMENT dated this day of December, 1997, by and between 500 WEST
PUTNAM ASSOCIATES , a Connecticut partnership with offices at 50 Holly Hill
Lane, Greenwich, Connecticut 06830 ("Seller"); Cecio Properties Limited
Partnership, a Connecticut limited partnership with offices at 50 Holly Hill
Line, Greenwich, Connecticut 06830 ("CPLP"), and CALI REALTY ACQUISITION
CORPORATION, a Delaware corporation with offices at 11 Commerce Drive, Cranford,
New Jersey 07016 ("Purchaser").
Seller and Purchaser hereby covenant and agree as follows:
Section 1
Sale of Premises
1.01 Seller shall sell, assign and convey to Purchaser, and Purchaser
shall purchase from Seller, at the price and upon the terms and conditions set
forth in this Agreement: (a) all right, title and interest of Seller as Tenant
pursuant to the terms, conditions and provisions of a certain lease a
description of which is annexed hereto as Schedule A attached hereto
("Leasehold") of a parcel of land (the "Land") described in Schedule A-1
attached hereto; (b) all buildings and improvements (the "Building" or
"Improvements") situated on the Land; (c) all the estate and rights of Seller,
if any, in and to the Land and Building, 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 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 and any
unpaid award for any taking by condemnation or any damage to the Land or
Improvements by reason of a change of grade of any street or highway; and (d)
all right, title and interest of Seller, if any, in and to the fixtures,
equipment and other personal property attached or appurtenant to the Building
(collectively, "Premises"). The Premises are located at or known as 500 West
Putnam Avenue, Greenwich, Connecticut.
1.02 The sale to Purchaser includes the following:
(a) all personal property (other than cash, cash equivalents,
receivables and other intangible assets, except for the Tradenames), fixtures,
equipment, inventory and fixtures owned by Seller and located on or at the
Premises, or used in connection with the Premises (the "Personal Property").
<PAGE>
(b) all leases and other agreements with respect to the use and
occupancy of the Premises, 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 becoming due following Closing 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;
(c) all trademarks and tradenames used or useful in connection with the
Premises, including without limitation the name 500 West Putnam Avenue and any
other name by which the Premises 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");
(d) all permits, licenses, guaranties, approvals, certificates and
warranties relating to the Premises 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 Premises ("Service Contracts") and telephone numbers in use by Seller at any
of the Premises (together with the Permits and Licenses and the Service
Contracts, the "Intangible Property");
(e) all promotional material, marketing materials,
brochures, photographs (collectively,"Promotional Materials"), books, records,
tenant data, leasing material and forms, past and current rent rolls for the
past three years, files, statements, tax returns for the past three years,
market studies, keys, plans, specifications, reports, tests and other materials
of any kind owned by or in the possession of Seller which are or may be used by
Seller in the use and operation of the Premises or Personal Property
(collectively, and together with the Promotional Materials, the "Books and
Records"); and
(f) 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.
The Premises, 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". Notwithstanding the conveyance by Seller to Purchaser of the Books
and Records, Purchaser, following closing hereunder shall permit Seller to
inspect and copy all or portions of such Books
<PAGE>
and Records in connection with the audit or examination by any
taxing authority of any of Seller's tax returns.
1.03 Seller shall convey and Purchaser shall accept the Property in
accordance with the terms of this contract, subject only to the matters set
forth in Schedule B attached hereto, inclusive of the NYL Mortgage (as
hereinafter defined), (collectively, "Permitted Exceptions").
1.04 Simultaneously with the Closing hereunder, Cecio Properties
Limited Partnership ("CPLP") shall convey to Purchaser fee simple title to the
Land in accordance with the terms and conditions of this agreement provided,
nevertheless, that Seller and CPLP shall, simultaneously upon closing hereunder,
terminate the Leasehold and upon such termination, the Premises shall be
conveyed by CPLP to Purchaser in accordance with the provisions of this
Agreement and CPLP shall thereupon be deemed the "Seller" for all purposes of
this Agreement. Notwithstanding the termination, both Seller and CPLP shall
proceed in accordance with the terms of this Agreement to effectuate its intent.
Section 2
Purchase Price, Acceptable Funds,
Existing Mortgages, and Escrow of Downpayment
2.01 The purchase price ("Purchase Price") to be paid by Purchaser to
Seller and CPLP (to be allocated between them pursuant to a separate agreement)
for the Premises is $18,025,000.00. The Purchase Price shall be paid as follows:
a) Upon the signing of this Agreement, by the delivery,
subject to collection, of the sum of $250,000.00 payable to
Pryor, Cashman, Sherman & Flynn ("Escrowee"), the receipt of
which is hereby acknowledged by Escrowee (such sum and all
interest accrued on all such sums shall become a part of and
referred
to as the "Deposit"); and
b) Upon closing of title in accordance with the terms hereof,
the balance of the Purchase Price shall be paid by Purchaser
to Seller as follows: (i) by Purchaser accepting all other
rights of Seller in and to the Premises, subject to a certain
mortgage (the "NYL
<PAGE>
Mortgage") dated September 21, 1990, recorded in Book 2070 at
Page 142 of the Greenwich Land Records and (ii) by payment to
Seller, by unendorsed certified or official bank check payable
to Seller or, at Seller's option, by wire transfer to an
account designated by Seller, in an amount equal to the
difference between the unpaid balance of the Purchase Price
and the unpaid principal balance of the NYL Mortgage due at
the time of Closing; plus or minus prorations as provided
herein and any unpaid amounts due or owing under the NYL
Mortgage, other than the principal balance, both as of the
Closing Date.
2.02 (a) The sum payable pursuant to Section 2.01(a) hereof shall be paid to
Escrowee, to be held in escrow in a special bank account until the Closing or
sooner termination of this Agreement, and Escrowee shall pay over or apply such
proceeds in accordance with the terms of this section. Escrowee shall hold such
sums in an interest-bearing account and all such interest shall be paid to
Purchaser, unless the Deposit is to be paid to Seller as provided herein on
account of Purchaser's default, in which event the interest shall be paid to
Seller. The party receiving such interest shall pay any income taxes thereon. At
the Closing, such sums shall be paid by Escrowee to Seller. If for any reason
the Closing does not occur and either party makes a written demand upon Escrowee
for payment of such amount, Escrowee shall give written notice to the other
party of such demand. If Escrowee does not receive a written objection from the
other party to the proposed payment within ten (10) business days after the
giving of such notice, Escrowee is hereby authorized to make such payment. If
Escrowee does receive such written objection within such ten (10) day period,
Escrowee shall continue to hold such amount until otherwise directed by written
instructions from the parties to this Agreement or a final judgment of a court.
However, Escrowee shall have the right at any time to deposit the escrowed sums
and interest thereon, if any, with the clerk of the highest court of original
jurisdiction of the county in which the Land is located. Escrowee shall give
written notice of such deposit to Seller and Purchaser. Upon such deposit,
Escrowee shall be relieved and discharged of all further obligations and
responsibilities hereunder. In no event shall the firm of Pryor, Cashman,
Sherman & Flynn be disqualified from continuing to act as
<PAGE>
Purchaser's attorney by virtue of having acted as Escrowee hereunder.
(b) The parties acknowledge that Escrowee is acting solely as
a stakeholder at their request and for their convenience, that Escrowee shall
not be deemed to be the agent of either of the parties, and that Escrowee shall
not be liable to either of the parties for any act or omission on its part
unless taken or suffered in bad faith, or involving gross negligence. Seller and
Purchaser shall jointly and severally indemnify and hold Escrowee harmless from
and against all costs, claims and expenses, including reasonable attorneys' fees
incurred in connection with the performance of Escrowee's duties hereunder,
except with respect to actions or omissions taken or suffered by Escrowee in bad
faith, or involving gross negligence on the part of Escrowee.
(c) Escrowee has acknowledged its agreement to these
provisions, and does in addition agree to submit itself to the jurisdiction of
the Superior Court of the State of Connecticut in any controversy relating to
the Deposit, by signing in the place indicated on the signature page of this
Agreement.
(d) In the event Purchaser fails to perform on the Closing
Date, Purchaser's sole liability and Seller's sole recourse shall be limited to
the amount of the Deposit. Seller agrees that retention of the Deposit
constitutes fixed and liquidated damages resulting from Purchaser's default, and
Seller waives any other claim, at law or in equity, either against Purchaser or
against any person, known or unknown, disclosed or undisclosed.
(e) (i) If, after complying with the terms of this Agreement,
Seller is unable to convey title in accordance with the terms of this Agreement,
Purchaser shall have the right to terminate this Agreement. In such event,
neither party shall have any further rights or obligations hereunder other than
those which are expressly stated herein to survive any such termination, the
Deposit shall be returned to Purchaser and Seller shall refund to Purchaser all
charges made for (a) examining the title to all of the Real Property, (b) any
appropriate additional municipal searches made in accordance with this
Agreement, and (c) survey and survey inspection charges, which refund obligation
shall survive said termination.
(ii) In the event of any default on the part
of the Seller, Purchaser shall have the right to terminate
this Agreement or commence an action seeking specific
<PAGE>
performance.
(iii) In the event of a wilful default on the
part of the Seller, Purchaser shall be entitled to any and all
of its rights and remedies at law or in equity.
Section 3
The Closing
3.01 Except as otherwise provided in this Agreement, the closing of title
pursuant to this Agreement ("Closing") shall take place on the fifteenth (15th)
day next following the expiration of the Inspection Contingency Period (as
defined in Section 4.01), but in no event any later than January 30, 1998, at
10:00 A.M. (the actual date of the Closing being herein referred to as "Closing
Date") at the offices of Seller's attorney, Fogarty Cohen Selby & Nemiroff LLC,
88 Field Point Road, Greenwich, CT 06830.
Section 4
Contingencies
4.01 Purchaser's obligations hereunder are contingent upon satisfaction of
the following condition not later than forty-five (45) days next following the
date of this Agreement (said forty-five (45) day period being referred to herein
as the "Inspection Contingency Period"): Satisfaction of Purchaser, in
Purchaser's sole discretion of the results of Purchaser's inspection and
assessment of the Premises, including without limitation, environmental, soil
tests and borings, groundwater tests and investigations, physical, structural,
sub-surface soil, zoning, regulatory and financial aspects of the Premises and
its present or proposed use and occupancy, and such other tests, investigations
or studies as Purchaser, in its sole discretion, determines is necessary. All
such inspections and assessments shall be conducted at Purchaser's sole cost and
expense. Seller, at no cost to Seller, shall cooperate with Purchaser in such
inspection of the Premises and shall permit Purchaser access to the Premises and
to Sellers' books and records relating to the Premises including, without
limitation environmental reports and studies. In addition, Seller will deliver
to Purchaser, promptly after request, true and complete copies of all test
borings, Environmental Documents (as defined in Section 5.23(d)), surveys, title
materials and engineering and architectural data and the like relating to the
Premises that are in Seller's possession or under its control. In the event
<PAGE>
any additional similar 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. All such rights of access shall be
exercised at reasonable times and upon reasonable prior notice to Seller and
shall be exercised in a manner which will not cause damage to the Premises nor
interfere in any material respect with the operation of any Building tenant, and
Purchaser shall repair and restore any portion of the surface of the Premises
disturbed by Purchaser, its agents or contractors during the conduct of any test
or study to substantially the same condition as existed prior to such
disturbance. Such right of access shall include, without limitation, the right
to perform studies, tests, borings, investigations and inspections for the
purposes described in Section 4. Provided that Purchaser shall first deliver to
Seller a detailed workplan showing the location of all borings studies,
investigations and testing to be performed by or on behalf of Purchaser, Seller
shall notify Purchaser of any dangerous conditions on the Premises, 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. 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.
4.02 Purchaser shall, prior to the expiration of the Inspection Contingency
Period, give written notice to Seller if Purchaser, decides to terminate this
Agreement for any reason. This Agreement shall be terminated if Purchaser shall
fail to give written notice ("Continuation Notice") to Seller not later than
5:00 p.m. of the last day of the Inspection Contingency Period, to Seller and to
Escrowee that Purchaser elects to continue the effectiveness of this Agreement,
and in the absence of such written notice, the Deposit shall be returned to
Purchaser and thereupon no party hereto shall have any further rights or
obligations hereunder but shall be released therefrom. In the event that
Purchaser shall so give to Seller such Continuation Notice, this Agreement shall
remain in full force and effect, and Purchaser shall have no further right to
terminate this Agreement pursuant to this Section 4. However, Purchaser shall
continue to have the rights of access and inspection set forth in this Section
4.
<PAGE>
Section 5
Representations and Warranties of Seller
Seller makes the following representations and warranties, to Seller's best
knowledge and information, none of which shall survive Closing, except to the
extent provided in Section 5.24:
5.01 Seller is the sole owner of the Leasehold and, CPLP is the sole owner
of the Land, and subject only to the consent of the mortgagee under the NYL
Mortgage, each has full right, power and authority to enter into, and consummate
the transactions contemplated by this Agreement.
5.02 The information concerning the Leases and Tenants set forth in Schedule
C attached hereto ("Lease Abstracts") is accurate as of the date set forth
therein or, if no date is set forth therein, as of the date hereof, and there
are no Leases or Tenancies or subleases or subtenants of any space in the
Premises other than those set forth therein. Except as otherwise set forth in
the Lease Abstracts or elsewhere in this Agreement:
(a) all of the Leases are in full force and effect and none of
them has been modified, amended or extended;
(b) no renewal or extension options have been granted to
tenants except as provided for in the Leases;
(c) no tenant has an option to purchase the
Premises;
(d) the rents referred to in the Lease Abstracts are being
collected on a current basis and there are no arrearages in excess of one month;
(e) except as set forth in the Lease Abstracts, no tenant is
entitled to rental concessions, offsets, allowances or abatements for any period
subsequent to the scheduled Closing Date;
(f) Seller has not sent written notice to any tenant claiming
that such tenant is in default, which default remains uncured;
(g) no action or proceeding instituted against Seller by any
tenant of the Premises is presently pending in any court, except with respect to
claims involving personal
<PAGE>
injury or property damage which are covered by insurance;
(h) there are no security deposits other than those set forth
in the Lease Abstracts;
(i) Schedule F sets forth all real estate brokerage
commissions which may be due and payable with respect to any renewal or
extension options in connection with the Tenancies ("Renewal Commissions") or
any tenant improvement work, credits, payments or allowances which are currently
due and owing upon a renewal or extension of a Lease;
(j) True, correct and complete copies of the Leases, and all subleases in
Seller's possession, have been provided to Purchaser. The Leases constitute all
of the Leases, tenancies or occupancies affecting the Premises on the date
hereof, and there are no agreements which confer upon any Tenant or any other
person or entity, any rights with respect to the Property; and
(k) No Tenant has sent a written notice of default to Seller, as Landlord,
which default remains uncured..
5.03 Schedule D annexed hereto and made a part hereof lists all insurance
policies presently affording coverage with respect to the Premises, and the
information contained therein is accurate as of the date hereof.
5.04 Schedule E annexed hereto and made a part hereof lists all service,
maintenance, supply and management contracts ("Service Contracts") and such
schedule lists all of such contracts affecting the Premises, and the information
set forth therein is accurate as of the date hereof.
5.05 There are no leased fixtures on the Premises unless otherwise indicated
in this Agreement.
5.06 Seller has performed all of the obligations and observed all of the
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. 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
<PAGE>
applicable authorities. All bills and claims for labor performed and materials
furnished to or for the benefit of the Premises will be paid in full on the
Closing Date.
5.07 There are no contracts or agreements affecting the Premises or the
operation thereof, except the Service Contracts, the Leases and a management
contract with Cecio Management Company. 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 Closing Date be unmodified 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 on not more than thirty (30) days notice
without the payment of any fee or penalty, except for the HVAC Maintenance
Contract (annual) and Fire System Contract (annual). The Management agreement
with Cecio Management Company will be terminated as a condition of Closing.
5.08 The Permits and Licenses include all certificates, licenses, permits
and authorizations, issued to Seller, including without limitation any Permits
and Licenses relating to any environmental matters, necessary to operate and
occupy the Building or legally required in operating and occupying buildings
similar to the Building, all of which Permits and Licenses are listed on
Schedule 5.08, 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, are transferable with the Premises, as the case may
be, without additional payment by Purchaser, and shall, upon closing, be
transferred to Purchaser by Seller.
5.09 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 Premises, the environmental condition
thereof, or the operation thereof, nor does Seller know of any basis for any
such action.
5.10 Except as referred to in Schedule 5.10, there are no outstanding
requirements or recommendations by (i) the insurance company(s) currently
insuring the Premises; (ii) any
<PAGE>
board of fire underwriters or other body exercising similar functions, or (iii)
the holder of any mortgage encumbering any of the Premises, which require or
recommend any repairs or work to be done on the Premises, nor is there any
capital expenditure program currently in process or anticipated to be completed.
5.11 Except as referred to in Schedule 5.11, 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 Premises, or any part thereof, (ii) any proposed or pending
proceeding to change or redefine the zoning classification of all or any part of
the Premises, (iii) any proposed or pending special assessments affecting the
Premises or any portion thereof, (iv) any penalties or interest due with respect
to real estate taxes assessed against the Premises 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 Premises. Seller agrees to furnish Purchaser with a
copy of any such notice received within two (2) days after receipt.
5.12 Seller has provided Purchaser with all reports, including without
limitation, the Environmental Documents, in their possession or under their
control related to the physical condition of the Premises and upon request, will
make available to Purchaser for inspection and copying, all Books and Records
necessary for Purchaser to conduct its due diligence of the Premises.
5.13 Seller has no knowledge of any notices, suits, investigations or
judgments relating to any violations of any laws, ordinances or regulations
affecting the Premises, (including, without limitation, Environmental Laws [as
defined in Section 5.23(d)]) or any violations or conditions that may give rise
thereto, and has no reason to believe that any Governmental Authority (as
defined in Section 5.23(d)) 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 Premises.
5.14 There are no employees of Seller working at or in connection with the
Premises. There are not any union agreements executed by Seller affecting the
Premises as of the date hereof, nor shall any such agreements affect the
Premises as of the Closing Date.
<PAGE>
5.15 Annexed hereto as Schedule F is a schedule of all leasing commission
obligations affecting the Premises. The respective obligations of Seller and
Purchaser with respect to said commissions are set forth in Section 7.03.
5.16 Seller has not made a general assignment for the benefit of creditors,
filed any voluntary petition in bankruptcy nor suffered the filing of any
involuntary petition by its creditors, suffered the appointment of a receiver to
take possession of all, or substantially all, of its assets, nor suffered the
attachment or other judicial seizure of all, or substantially all, of such
assets, nor admitted in writing its inability to pay its debts as they come due
nor made an offer of settlement, extension or composition to its creditors
generally.
5.17 The Personal Property is now owned and will on the Closing Date be
owned 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.
5.18 No portion of the Premises is located in a flood
plain.
5.19 Seller has delivered true, correct and complete copies of the NYL
Mortgage loan documents to Purchaser and is not in default thereunder. Any and
all payments due under the NYL Mortgage have been paid and are current.
5.20 Seller is a duly organized and validly existing general partnership
organized under the laws of the State of Connecticut, is duly authorized to
transact business in the State of Connecticut, CPLP is a duly organized and
validly existing limited partnership organized under the laws of the State of
Connecticut, and each has, subject to the provisions in Section 5.01, 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 Premises in accordance with the terms and
conditions hereof. All necessary actions of the partners of Seller and CPLP 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.
5.21 This Agreement, when duly executed and delivered, will be the legal,
valid and binding obligation of Seller and CPLP enforceable in accordance with
the terms of this
<PAGE>
Agreement. The performance by Seller and CPLP of their respective duties and
obligations under this Agreement and the documents and instruments to be
executed and delivered by them 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 CPLP 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 or CPLP is a party or by which
their respective assets are or may be bound. In the event that NYL does not give
such consent, either party, upon notice to the other prior to the Closing Date,
shall have the right to terminate this Agreement. Purchaser, nevertheless, has
the right to negate any such termination by Seller and proceed to Closing
hereunder, provided that Purchaser indemnifies and holds Seller, CPLP and their
respective partners, harmless from any and all loss or damage, including
reasonable attorney's fees, pursuant to the NYL Mortgage.
5.22 No representation or warranty made by Seller or CPLP 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, in order to make the statements herein or therein not misleading
or necessary in order to fully and fairly provide the information required to be
provided in any such document, certificate, Schedule or Exhibit.
5.23 In addition to the foregoing, Seller hereby warrants and represents the
following with respect to environmental matters:
(a) Except as disclosed in any Environmental Document
delivered by Seller to Purchaser:
(i) there are no Contaminants (as defined in Section 5.23(d))
on, under, at, emanating from or affecting the Premises, except those in
compliance with all applicable Environmental Laws (as defined in Section
5.23(d));
(ii) neither Seller, or to its knowledge, any current or prior
occupant, nor, to its knowledge, any current or prior owner of the Premises has
received any Notice (as defined in Section 5.23(d)) or advice from any
Governmental Authority (as defined in Section 5.23(d)) or any other third
<PAGE>
party with respect to Contaminants on, under, at, emanating from or affecting
the Premises, and, to Seller's knowledge, no Contaminants have been Discharged
(as defined in Section 5.23(d)) which would allow a Governmental Authority to
demand that a cleanup be undertaken;
(iii) no portion of the Premises has ever been used by Seller,
or to its knowledge, any current or former owner or current or former occupant
to generate, manufacture, refine, produce, treat, store, handle, dispose of,
transfer or process Contaminants, whether or not any of those parties has
received Notice or advice from any Governmental Authority or any other third
party with respect thereto;
(iv) Seller has not transported any Contaminants, nor to its
knowledge has any current or former occupant or current or former owner
transported Contaminants from the Premises to another location which was not
done in compliance with all applicable Environmental Laws;
(v) no ss.104(e) informational request has been received by
Seller issued pursuant to CERCLA (as defined in Section 5.23(e));
(vi) there is no asbestos or asbestos containing material in
any friable state or otherwise in violation of Environmental Laws on the
Premises;
(vii) all transformers and capacitators containing
polychlorinated biphenyls ("PCBs"), and all "PCB Items", as defined in 40 C.F.R.
ss.761.3, located on or affecting the Premises, are in compliance with all
Environmental Laws;
(viii) there are no above ground storage tanks or Underground
Storage Tanks (as defined in Section 5.23(e)) at the Premises, regardless of
whether such tanks are regulated tanks or not;
(ix) all pre-existing above ground storage tanks and
Underground Storage Tanks at the Premises have been removed and their contents
disposed of in accordance with and pursuant to Environmental Laws;
(x) the Premises has not been used as a solid waste facility
or a solid waste disposal area, including, without limitation, a sanitary
landfill facility, as defined in the Connecticut Solid Waste Management Act,
Conn. Gen. Stat. Ann.
ss.22a-446d et seq.;
<PAGE>
(xi) Seller, and, to Seller's knowledge, each occupant of the
Premises have all environmental certificates, licenses and permits ("Permit")
required to operate the Premises and there is no violation of any 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) there are no federal or state liens as
referred to under CERCLA or Conn. Gen. Stat. Ann. ss.22a-452a,
as amended, Pub. L. No. 97-218 or any other Environmental Laws
that have attached to the Premises;
(xiii) to Seller's knowledge, all current and prior owners of
the Premises have complied with the Transfer Act (as defined in Section
5.23(e));
(xiv) Seller has not, to its knowledge, engaged in any
activity on the Premises in violation of Environmental Laws;
(xv) the transfer of the Premises by Seller to Purchaser is
not subject to the Connecticut Transfer Act;
(xvi) there are no engineering or institutional controls at
the Premises, including without limitation, any deed notice, declaration of
environmental land use restriction, groundwater classification exception area,
well restriction area or other notice or use limitation pursuant to
Environmental Laws; and
(xviii) the Premises is not subject to any wetlands
regulations, administered by the United States of America, Army Corps of
Engineers, the Environmental Protection, the DEP or any other federal, state,
county or local Governmental
Authority (as defined in Action 5.23(d)).
(b) Contemporaneously with the execution of this Agreement,
and subsequently promptly upon receipt by Seller, or its representatives, Seller
shall deliver to Purchaser: (i) all Environmental Documents concerning the
Premises generated by or on behalf of predecessors in title or former occupants
of the Premises to the extent in Seller's possession or control; (ii) all
Environmental Documents concerning the Premises generated by or on behalf of
Seller, whether currently or hereafter existing; and (iii) all Environmental
Documents concerning the Premises generated by or on behalf of
<PAGE>
current or future occupants of the Premises to the extent in Seller's possession
or control, whether currently or hereafter existing.
(c) Seller shall notify Purchaser in advance of all meetings
scheduled between Seller or Seller's representatives and DEP, and Purchaser, and
Purchaser's representatives shall have the right, without obligation, to attend
and participate in all such meetings.
(d) The following terms shall have the following meanings when
used in this Agreement:
(i) "Contaminants" shall include, without limitation, any
regulated substance (excepting therefrom small quantities of office cleaning
substances and office supplies), toxic substance, hazardous substance, hazardous
waste, pollution, pollutant or contaminant, as defined or referred to in the
"Tanks Laws" as defined below; the "Transfer Act" as defined below; the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. ss.6901 et seq.; the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 U.S.C. ss.9601 et seq. ("CERCLA"); the Water Pollution and Control
Act, 33 U.S.C. ss.1251 et seq.; together with any amendments thereto,
regulations promulgated thereunder and all substitutions thereof, as well as
words of similar purport or meaning referred to in any other applicable federal,
state, county or municipal environmental statute, ordinance, 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 Premises,
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
Premises, or its environs, including without limitation, all sampling plans,
cleanup plans, preliminary assessment plans and reports, site investigation
plans and reports, remedial investigation plans
<PAGE>
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.
(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 Connecticut 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 Connecticut
Underground Petroleum Storage Act, Conn. Gen. Stat. Ann. ss.22a-
449a et seq., and the federal underground storage tank law
(Subtitle I) of the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. ss.6901 et seq., together with any amendments
thereto, regulations promulgated thereunder, and all
substitutions thereof, and any successor legislation and
regulations.
(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.
(x) "Transfer Act" shall mean the Connecticut
Transfer Act, Conn. Gen. Stat. Ann. ss.22a-134 et seq., the
regulations promulgated thereunder and any amending and
successor legislation and regulations now or hereafter
<PAGE>
existing.
5.24 All representations, warranties, covenants and agreements made by
Seller and CPLP in this Agreement shall survive the Closing Date for a period of
six (6) months, and, for such six month period, shall not be merged in the
delivery of the Deed. Seller and CPLP agree 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 Seller, by reason of or resulting from
any breach, inaccuracy, incompleteness or nonfulfillment of the representations,
warranties, covenants and agreements of Seller and CPLP contained in this
Agreement. Notwithstanding any contrary or consistent provision of this
Agreement, in no event shall the aggregate liability of Seller and CPLP arising
by virtue of any breach, inaccuracy, incompleteness or nonfulfillment of (a) the
representations, warranties, covenants and agreements contained in all portions
of this Agreement, except those set forth in Sections 5.23 and 8.16 exceed
$500,000.00 and (b) the representations, warranties, covenants and agreements
contained in Section 5.23 and 8.16 exceed $500,000.00; and in no event shall
Seller or CPLP have any liability of any nature whatsoever for any breach of
representation or warranty asserted by Purchaser if, prior to Closing, Purchaser
had actual knowledge of the matter giving rise to Purchaser's claims. For the
purposes of the preceding sentence, "actual knowledge" shall refer to the actual
knowledge of Purchaser's principal representative in this transaction, who
Purchaser represents to be Andrew Greenspan, and shall include but not be
limited to all information contained herein and in documents and materials
provided by Seller to such principal representative.
Section 6
Acknowledgments of Purchaser
Purchaser acknowledges that, subject to Purchaser's satisfaction of the
inspection contingency referred to in Section 4, and except as provided in this
Agreement, Purchaser shall accept the Premises "as is" and in their present
condition, subject to reasonable use, wear and tear, and, subject to the
provisions of Section 18, casualty loss occurring between the date of this
Agreement and the Closing Date. In entering into this Agreement, Purchaser has
not been induced by and has not relied on any representation or
<PAGE>
statement, express or implied, made by Seller or any person representing or
purporting to represent Seller, except as specifically set forth in this
Agreement.
Section 7
Seller's Obligations as to Leases
7.01 Between the date of this Agreement and the Closing, Seller shall not,
without Purchaser's prior written consent: (a) amend, renew or extend any Lease
or Tenancy in any respect, unless required by law; or (b) terminate any Lease or
Tenancy except by reason of a default by the tenant thereunder.
7.02 Unless otherwise provided in a schedule attached to this Agreement,
between the date of this Agreement and the Closing, Seller shall not permit
occupancy of, or enter into any new lease for, space in the Building which is
presently vacant or which may hereafter become vacant. Seller shall not grant
any concessions, offsets, allowances or rent abatements for any period following
the Closing without Purchaser's prior written consent.
7.03 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 and Seller shall hold
Purchaser harmless with respect thereto. All leasing commissions on account of
extensions or renewals of Leases made after the Closing Date shall be paid by
Purchaser and Purchaser shall hold Seller harmless with respect thereto. All
tenant improvement obligations arising in respect to any lease terms currently
in effect shall be satisfied prior to the Closing Date. The provisions of this
Section shall survive the Closing.
Section 8
Covenants of Seller
Seller covenants that between the date of this Agreement and the Closing:
8.01 Seller shall not modify or amend any Service Contract or enter into any
new service contract unless the same is terminable without penalty by Seller or
its successor upon not more than 30 days' notice. Simultaneously upon Closing,
Seller will terminate any Service Contracts of which Purchaser advises
<PAGE>
Seller to so terminate, and which are so terminable, in accordance with Section
5.01, at Seller's sole cost and expense. Seller shall terminate any management
agreements and/or contracts affecting the Premises.
8.02 Seller shall maintain in full force and effect until the Closing the
insurance policies described on Schedule D annexed hereto.
8.03 No fixtures, equipment or personal property included in this sale shall
be removed from the Premises.
8.04 Seller shall not withdraw, settle or otherwise compromise any protest
or reduction proceeding affecting real estate taxes assessed against the
Premises for any fiscal period in which the Closing is to occur or any
subsequent fiscal period or any prior period in which a settlement would affect
any future period, without the prior written consent of Purchaser, which consent
shall not be unreasonably withheld. Seller represents that there are no such
protests or proceedings currently pending. Real estate tax refunds and credits
received after the Closing Date which are attributable to the fiscal tax year
during which the Closing Date occurs shall be apportioned between Seller and
Purchaser, after deducting the reasonable expenses of collection thereof, which
obligation shall survive the Closing.
8.05 Seller shall allow Purchaser or Purchaser's representatives access to
the Premises, the Leases, Service Contracts, Books and Records and other
documents required to be delivered under this Agreement upon reasonable prior
notice at reasonable times, provided that all such rights of access shall be
exercised in a manner which will not cause damage to the Premises nor interfere
in a material manner with the operations of any Building tenant.
8.06 Seller will not defer taking any action or spending any of its funds or
otherwise manage the Premises differently due to the pending sale of the
Premises. Seller shall operate and maintain the Premises in the ordinary course
of business and shall use reasonable efforts to reasonably preserve for
Purchaser the relationships between Seller and Seller's tenants, suppliers,
managers, employees and others having a business relationship with Seller with
respect to the Premises.
8.07 Seller shall not 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.
8.08 Seller shall not cause or permit the Premises, or any
<PAGE>
interest therein, to be alienated, mortgaged, licensed,
encumbered or otherwise be transferred.
8.09 Seller will make all required payments under any the NYL Mortgage
within any applicable grace period, but without reimbursement by Purchaser
therefor except as provided in Section 12. Seller shall also comply with all
other terms, covenants, and conditions of any mortgage on the Premises.
8.10 Seller shall not apply any security deposits with respect to any Tenant
in occupancy on the Closing Date.
8.11 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.
8.12 Upon request of Purchaser at any time after the date hereof, Seller, at
no cost to 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 Leasehold. If, to facilitate such audit or at
Purchaser's request, Seller requires the services of its independent accountant,
Purchaser shall be responsible for the costs thereof.
8.13 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 to the Property, Seller will do the same expeditiously and diligently
at its own cost and expense prior to the Closing Date.
8.14 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 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.
8.15 Seller shall cause CPLP to convey to Purchaser, fee simple title to the
Land simultaneously with Seller's delivery of the Property to Purchaser in
accordance with the terms herein as set forth in Section 1.04, or, at
Purchaser's option, the Leasehold between CPLP and Seller shall be terminated in
<PAGE>
accordance with Section 1.04.
8.16 Seller shall:
(i) Promptly notify Purchaser of, and promptly deliver to Purchaser, a
certified 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 existing on, under, at, emanating from or affecting the Property,
as of the date of Closing, in violation of Environmental Laws, regardless of the
date of discovery, notwithstanding anything to the contrary set forth herein. 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. Any such
remediation and associated activities shall be undertaken pursuant to a right of
access agreement reasonably acceptable to Purchaser
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.
8.17 Notwithstanding any contrary or inconsistent provision contained in
this Agreement, if the aggregate cost of completing the work required pursuant
to Sections 8.13, 8.14 and 8.16 shall exceed $50,000.00 Seller, at its option
may elect to terminate this Agreement upon notice to Purchaser and Escrowee,
whereupon Escrowee shall immediately return to Purchaser the Deposit and all
interest accrued thereon and thereupon no party shall any further rights or
obligations hereunder. Upon receipt of Seller's notice, Purchaser shall have the
option, upon notice to Seller, to negate Seller's termination and, in such
event, at the Closing, Purchaser (a) shall accept the Property with no
requirement on Seller's part to perform or complete such work, and (b) shall
receive a credit against the Purchase Price in the amount of $50,000.
<PAGE>
Section 9
Conditions to Closing
9.01 It shall be a condition to Purchaser's obligations pursuant to this
Agreement that New York Life Insurance Company shall consent to the sale by
Seller to Purchaser of the Premises subject to the NYL Mortgage and to the
entering into of an assumption agreement in form and substance annexed hereto as
Schedule 9.01.
9.02 Promptly upon the execution and exchange of this Agreement, Seller
shall notify The New York Life Insurance Company of the proposed conveyance to
Purchaser, and request the consent of The New York Life Insurance Company to
such conveyance, in accordance with the requirements of The NYL Mortgage. Seller
and Purchaser shall furnish The New York Life Insurance Company with such
information as may reasonably be required in connection with such request and
shall otherwise cooperate with The New York Life Insurance Company and with each
other in an effort expeditiously to procure such consent. If The New York Life
Insurance Company shall fail or refuse to grant such consent in writing before
the expiration of the Inspection Contingency Period, or shall require as a
condition of the granting of such consent (i) that additional consideration be
paid to The New York Life Insurance Company and neither Seller nor Purchaser is
willing to pay such additional consideration, (ii) that the terms of the NYL
Mortgage be changed and Purchaser is unwilling to accept such change, or (iii)
execution of an assumption agreement incorporating provisions which are not
consistent with those annexed hereto as Schedule 9.01, then Purchaser may
terminate this Agreement by giving written notice of such election to terminate
within five (5) business days next following the termination of the Inspection
Contingency Period.
9.03 Seller shall, at Seller's sole cost and expense, comply with the
Transfer Act with respect to the Premises prior to Closing.
9.04 The obligations of Purchaser to accept title to the Premises 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.
<PAGE>
(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 13 hereof
for an "insurable title".
(d) Seller shall have delivered to Purchaser all of the
documents provided herein for said delivery.
(e) The Premises shall be in compliance with all Environmental
Laws.
9.05 (a) On or following the date hereof, Seller agrees to deliver to each
Tenant an estoppel certificate in the form annexed hereto as Schedule 9.05 for
Tenant's execution, completed to reflect the Tenant's particular Lease status.
Seller agrees to use reasonable efforts to obtain from all Tenants the estoppel
certificates in such form; provided, however, that if any Tenant shall refuse to
execute an estoppel letter in such form, 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. The estoppel certificates required to be obtained pursuant
to this Section 9.05 are collectively referred to as the "Estoppel
Certificates".
(b) As a condition to Closing, Seller shall deliver (a) an Estoppel
Certificate from each Tenant which leases space at the Building 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 Building.
(c) 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.
<PAGE>
Section 10
Seller's Closing Obligations
At the Closing, Seller shall deliver the following to Purchaser:
10.01 (a) Evidence establishing to Purchaser's satisfaction that the
Leasehold has been terminated in accordance with Section 1.04, and (b) a Special
Warranty Deed, in recordable form executed by CPLP, and in proper form to assign
and convey to Purchaser all other right, title and interest of Seller in and to
the Premises, as required by this Agreement, together with checks for all
conveyance taxes payable in connection therewith.
10.02 All original Leases and a duly executed and acknowledged assignment to
Purchaser of said Leases, Security Deposits, and Intangible Property without
recourse or warranty, other than as set forth herein.
10.03 A schedule updating the Lease Abstracts and setting forth all arrears
in rents and all prepayments of rents and indicating that there has been no
adverse change in the income or expenses of the Premises between the execution
of this Agreement and the Closing.
10.04 A schedule of all cash security deposits and a check or credit to
Purchaser in the amount of such security deposits, including any interest
thereon which accrues to the benefit of tenants, held by Seller on the Closing
Date under the Lease together with other instruments of assignment, transfer and
consent as may be necessary to permit Purchaser to realize upon same.
10.05 All Service Contracts in Seller's possession which are in effect on
the Closing Date and which are assignable by Seller.
10.06 A duly executed and acknowledged assignment to Purchaser, without
recourse or warranty, other than as set forth herein of all of the interest of
Seller in those Service Contracts, and other documents to be delivered to
Purchaser at the Closing which are then in effect and are assignable by Seller.
10.07 To the extent they are then in Seller's possession and not posted at
the Premises, certificates, licenses, permits, authorizations and approvals
issued for or with respect to the Premises by governmental and
quasi-governmental authorities having jurisdiction.
<PAGE>
10.08 Possession of the Premises in the condition required by this
Agreement, and keys therefor.
10.09 Any other documents expressly required by this Agreement to be
delivered by Seller or as may be reasonably required or appropriate to
effectuate the consummation of the transactions contemplated by this Agreement.
10.10 The Original Estoppel Certificates.
10.11 A letter 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.
10.12 A certificate indicating that the representations and warranties of
Seller made in this Agreement are true and correct as of the Closing Date, or if
there have been any changes, a description thereof.
10.13 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 partnership agreements 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.
10.14 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 or Improvements or
any part thereof by reason of change of grade or closing of any such street,
road, highway or avenue, and (iii) for any taking in condemnation or eminent
domain of any part of the Land or Improvements.
10.15 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.
10.16 All such transfer and other tax declarations and
returns and information returns, duly executed and sworn to by
<PAGE>
Seller as may be required of Seller by law in connection with the conveyance of
the Premises to Purchaser, including but not limited to, Internal Revenue
Service forms.
10.17 A statement setting forth the Purchase Price with all adjustments and
proration shown thereon.
10.18 Any instruments reasonably required by Purchaser evidencing the
assignment of the Tradenames.
10.19 A computer diskette containing this Agreement and any closing or other
documents executed in connection with this transaction and prepared by Seller or
its counsel, in WordPerfect or Microsoft Word format.
10.20 An agreement in form annexed hereto as Schedule F-2 pursuant to which
Seller shall agree to and be responsible for all Renewal Commissions, the right
to which accrued prior to Closing.
Section 11
Purchaser's Closing Obligations
At the Closing, Purchaser shall:
11.01 Deliver to Seller funds in payment of the portion of the Purchase
Price payable at the Closing, in accordance with Section 2.01 and as adjusted
for apportionments under Section 12.
11.02 Execute and deliver to New York Life Insurance Company all documents
required by the New York Life Insurance Company in connection with its consents
of the conveyance of the Premises to Purchaser in accordance with the
requirements of the NYL Mortgage, provided such documents are in substantial
conformity with those which shall be fully negotiated and agreed to by and
between Purchaser and NYL during the Inspection Contingency Period.
11.03 Execute and deliver to Seller an agreement, in form annexed hereto as
Schedule F-1, pursuant to which Purchaser shall agree and be responsible for all
Renewal Commissions, the right to which shall accrue following Closing.
11.04 Execute and deliver to Seller an agreement, indemnifying and agreeing
to defend Seller against any claims made by tenants with respect to tenant's
security deposits to the extent paid or credited to Purchaser pursuant to
Section 10.04.
<PAGE>
11.05 Execute and deliver to Seller any other documents expressly required
by this Agreement to be delivered by Purchaser.
Section 12
Apportionments
12.01 The following apportionments shall be made between the parties at the
Closing as of the close of business on the day prior to the Closing Date: (a)
real estate taxes on the basis of the fiscal period for which assessed; (b)
prepaid rents and Additional Rents (as defined in Section 12.03); (c) interest
on the NYL Mortgage; (d) value of fuel stored on the Premises, at the price then
charged by Seller's supplier, including any taxes with respect thereto on the
basis of a reading made within ten (10) days prior to the Closing by Seller's
supplier; (e) utility charges payable by Seller, including, without limitation,
electricity, water charges and sewer charges, on the basis of a meter reading
made within five (5) days prior to the Closing; and (f) prepaid charges under
transferrable Service Contracts.
12.02 If any tenant is in arrears in the payment of rent on the Closing
Date, rents received from such tenant after the Closing shall be applied in the
following order of priority: (a) first to the month in which the Closing
occurred; (b) then to any month or months following the month in which the
Closing occurred; and (c) then to the period prior to the month preceding the
month in which the Closing occurred. If rents or any portion thereof received by
Seller or Purchaser after the Closing are payable to the other party by reason
of this allocation, the appropriate sum, less a proportionate share of any
reasonable attorneys' fees, costs and expenses of collection thereof, shall be
promptly paid to the other party, which obligation shall survive the Closing.
12.03. At the Closing, Seller shall deliver to Purchaser a list 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,
<PAGE>
as the case may be, on a pro-rata basis based upon each party's period of
ownership during such calendar year.
12.04 Any errors in calculations or adjustments shall be corrected or
adjusted as soon as practicable after the Closing.
12.05 The provisions of this Section 12 shall survive the Closing Date.
Section 13
Objections to Title, Failure of Seller
or Purchaser to Perform and Vendee's Lien
13.01 Purchaser has ordered an examination of title and shall cause a copy
of the title report to be forwarded to Seller's attorney upon receipt.
13.02 If, upon the date for the delivery of the deed as hereinafter
provided, the Seller shall be unable to deliver or cause to be delivered good
and marketable title to said premises, subject only to the Permitted Exceptions,
then the Seller shall be allowed a reasonable postponement of closing not to
exceed thirty (30) days, within which to perfect title. If at the end of said
time the Seller is still unable to deliver or cause to be delivered a deed or
deeds conveying a good and marketable title to said Premises, subject only to
the Permitted Exceptions, then the Purchaser may elect to accept such title as
the Seller can convey, without modification of the Purchase Price, or may reject
such title, whereupon all sums paid on account hereof, together with any
expenses actually incurred by the Purchaser for survey costs and title insurance
costs shall be paid to the Purchaser without interest thereon. Upon such
payment, this Agreement shall terminate and the parties hereto shall be released
and discharged from all further claims and obligations.
13.03 If title to the Premises is subject to any lien or charge other than
the Permitted Encumbrances, Seller agrees to use good faith efforts to cause the
Premises to be subject only to the Permitted Encumbrances and in any event to
cure, at its expense, (i) judgments against Seller, (ii) mortgages (other than
the NYL Mortgage) 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 one (1%) percent of the Purchase Price in the
aggregate. Seller agrees and covenants that it shall not voluntarily place any
defects, objections or exceptions to title to any of the Premises
<PAGE>
from and after the date of the first issuance of the title
commitment for said Premises.
13.04 It shall be a condition to Closing that Seller convey, and that the
Title Company insure, title to the Premises 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, by a standard 1992 ALTA Owners Policy,
with ALTA endorsements Form 3.1, Form 8.1, Form 9 and any other endorsements as
required by Purchaser attached, free and clear of all liens, encumbrances and
other matters, other than the Permitted Encumbrances (the "Title Policy"). The
Title Company shall provide affirmative insurance that any (i) Permitted
Encumbrances have not been violated, and that any future violation thereof will
not result in a forfeiture or reversion of title; (ii) Purchaser's contemplated
use of the Premises will not violate the Permitted Encumbrances; and (iii) the
exception for taxes shall apply only to the current taxes not yet due and
payable. Seller shall provide such affidavits, including title affidavits and
survey affidavits of no change, and undertakings as the Title Company insuring
title to the Premises 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, provided that any
additional premium payable with respect to the aforesaid affirmative insurance
shall be Purchaser's obligation.
13.05 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, instruments in
recordable form sufficient to discharge any such mortgages or other liens which
Seller is obligated to pay and discharge pursuant to the terms of this
Agreement.
13.06 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
<PAGE>
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.
13.07 If, on the Closing Date, the Premises or any part thereof shall be or
shall have been affected by an assessment or assessments which are or may become
payable in annual install ments, 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 Premises and shall be paid and discharged by Seller on
the Closing Date.
Section 14
Broker
14.01 Purchaser represents and warrants to Seller that it has dealt with no
real estate broker other than Gladstone Properties in connection with this
Agreement and no other broker brought this transaction to Purchaser's attention.
Seller shall be responsible for all commissions payable to said broker, pursuant
to a separate agreement. Seller represents to Purchaser that no other broker has
an exclusive listing or brokerage agreement with respect to the sale to
Purchaser of the Leasehold, the Premises or the Land. Seller and Purchaser shall
indemnify and defend each other against any costs, claims or expenses, including
attorneys' fees, arising out of the breach, as judicially determined, on their
respective parts of any of their respective representations, warranties or
agreements contained in this paragraph. The representations and obligations
under this paragraph shall survive the Closing or, if the Closing does not
occur, the termination of this Agreement.
Section 15
Notices
All notices under this Agreement shall be in writing and shall be delivered
personally or shall be sent by prepaid registered or certified mail, addressed
as set forth on the first page of this Agreement, or as Seller or Purchaser
shall otherwise have given notice.
<PAGE>
Section 16
Miscellaneous Provisions
16.01 This Agreement and the Schedules annexed hereto embodies and
constitutes the entire understanding between the parties with respect to the
transaction contemplated herein, and all prior agreements, understandings,
representations and statements, oral or written, are merged into this Agreement.
Neither this Agreement nor any provision hereof may be waived, modified,
amended, discharged or terminated except by an instrument signed by the party
against whom the enforcement of such waiver, modification, amendment, discharge
or termination is sought, and then only to the extent set forth in such
instrument.
16.02 This contract shall be governed by, and construed in accordance with,
the law of the State of Connecticut.
16.03 The captions in this Agreement are inserted for convenience of
reference only and in no way define, describe or limit the scope or intent of
this Agreement or any of the provisions hereof.
16.04 This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns, subject
nevertheless to the provisions of Section 17.
16.05 This Agreement shall not be binding or effective until properly
executed and delivered by both Seller and Purchaser.
16.06 As used in this Agreement, the masculine shall include the feminine
and neuter, the singular shall include the plural and the plural shall include
the singular, as the context may require.
16.07 Purchaser shall not record this Agreement, or any notice hereof. If
Purchaser shall record or attempt to record this Agreement or any notice hereof,
this Agreement shall immediately thereupon terminate and be of no further force
or effect, and Seller shall retain the Downpayment as and for liquidated damages
arising from Purchaser's said default.
16.08 This Agreement may be executed by the parties hereto in counterparts,
all of which together shall constitute a single Agreement.
16.09 Each party shall, from time to time, execute,
<PAGE>
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.
16.10 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.
16.11 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.
Section 17
Assignment
In the event of any assignment by Purchaser of this Agreement or Purchaser's
rights hereunder, (a) Purchaser shall, immediately upon such assignment, deliver
to Seller an executed counterpart of the instrument of assignment which shall
include the name and address of the assignee; and (b) Purchaser shall be and
remain jointly and severally liable with such assignee for the performance of
Purchaser's obligations hereunder.
Purchaser shall have the absolute right to assign this Agreement to an
affiliate of Purchaser.
Section 18
Casualty Loss
18.01 If any time prior to the Closing Date any portion of the Property is
destroyed or damaged as a result of fire or any 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
<PAGE>
is in excess of $50,000.00, then within ten (10) days after the receipt of the
Casualty Notice, Purchaser shall have the right, at its sole option, of
terminating this Agreement by written notice to Seller given within ten (10)
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 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 and Purchaser shall accept the Property with no requirement
on Seller's part to repair or replace any such casualty loss.
18.2 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. 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 repairs.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
Seller:
500 WEST PUTNAM ASSOCIATES
By:
A General Partner
By:
A Managing Partner
<PAGE>
CECIO PROPERTIES LIMITED PARTNERSHIP
By:
A General Partner
By:
A General Partner
By:
A General Partner
By:
A General Partner
By:
A General Partner
By:
A General Partner
Purchaser:
CALI REALTY ACQUISITION CORPORATION
By:
President
Agreement by Escrowee
The undersigned hereby agrees to act as Escrowee pursuant to the provisions of
Section 2 of the foregoing Agreement.
PRYOR, CASHMAN, SHERMAN &
FLYNN
By:
EXHIBIT NO. 10.138
PURCHASE AGREEMENT FOR REAL PROPERTY
AND ESCROW INSTRUCTIONS
This Purchase Agreement for Real Property and Escrow
Instructions ("Agreement") is between IB Brell, L.P. ("Seller"),
and Mack-Cali Realty, L.P. a Delaware Limited Partnership
("Buyer").
1. PURCHASE OF PROPERTY. Seller agrees to sell to Buyer and Buyer agrees to
purchase from Seller, the Property (as described in Paragraph 2.1), in
consideration for the payment of the Purchase Price (as described in Paragraph
2.2), together with the respective promises of the parties set forth in this
Agreement.
2. BASIC TERMS AND DEFINITIONS.
2.1 PROPERTY. The term "Property" shall mean: (i) the land
("Land") together with all improvements and buildings located on the Land,
including the buildings ("Buildings") commonly referred to as 10 Mountainview
Road, Upper Saddle River, Bergen County, New Jersey, as more particularly
described on the attached Exhibit "A", (ii) Seller's leasehold rights in the
leases with the tenants described on the attached Exhibit "B" ("Leases"), (iii)
whatever rights Seller has in any easements, rights of way, and real property
rights appurtenant to the Land, to the extent they are assignable (collectively,
"Real Property Rights"), whatever rights Seller has in the Contracts, Warranties
and Guaranties (as defined in Paragraph 13.1); (v) whatever rights Seller has in
all personal property, fixtures, equipment and inventory owned by Seller and
located on or at the Property, or used in connection with the Property (the
"Personal Property"), specifically excluding any and all Property owned by
tenant's in the Buildings and/or owned by the Buildings property management
company, and (vi) whatever rights Seller has in any names to which the Property
is commonly known, and any other intangible rights appurtenant to the Property.
(Notwithstanding anything to the contrary contained in this Agreement, Seller is
not transferring any rights or interests in: (1) the name or portion of the
names "IB Brell," "K/B," "Koll," or "Bren", nor shall Buyer have any rights to
use of the names or portions of the names "IB Brell," "K/B," "Koll," or "Bren"
with regard to the Property or otherwise, (2) any Rents (as defined in Paragraph
7.4(a)) or other amounts payable by tenants under the Leases for periods prior
to the Closing, (3) any Rents or other amounts
<PAGE>
payable by any former tenants of the Property, and (4) any judgements,
stipulations, orders, or settlements with any tenants under the Leases or former
tenants of the Property for periods prior to closing ((1) through (4)
collectively, the "Excluded Property").
2.2 PURCHASE PRICE. Twenty Four Million Five Hundred
Thousand Dollars ($24,500,000.00) ("Purchase Price").
2.3 TERMS OF PURCHASE.
(a) The Deposit. Upon the full execution of
this Agreement, a cashier's or certified check in the amount of Five Hundred
Thousand Dollars ($500,000.00) (the "Deposit") shall be delivered to Escrow
Holder by Buyer as a condition to the "Opening of Escrow" as provided in
Paragraph 7.2. Escrow Holder shall place the Deposit in an interest-bearing
account and all earned interest shall accrue to the Buyer's benefit, unless
Seller is entitled to the Deposit as liquidated damages under Paragraph 6.5, in
which event the interest shall accrue to Seller's benefit. For purposes of this
Agreement, any accrued interest shall be deemed part of the "Deposit". Upon
expiration of the Feasibility Period, if Buyer has not previously terminated
this Agreement by its terms then the Deposit shall be disbursed as provided in
Paragraph 6 or Paragraph 7.7 as applicable.
(b) Buyer's Cash at Closing. The balance of
the Purchase Price less the amount of the Deposit, plus any other amounts to be
paid by Buyer under this Agreement, shall be delivered to Escrow Holder by Buyer
as provided in Paragraph 5.3.
2.4 EFFECTIVE DATE. The effective date of this
Agreement is February 9, 1998 ("Effective Date").
2.5 OUTSIDE DATE. The last day that Closing may
occur shall be February 12, 1998 at 5:00 p.m. ("Outside Date").
2.6 TITLE APPROVAL PERIOD. The "Title Approval
Period" shall end on February 10, 1998 at 5:00 p.m.
2.7 FEASIBILITY PERIOD. The "Feasibility Period"
shall end on February 10,1998 at 5:00 p.m.
2.8 ESCROW HOLDER. The escrow holder is Chicago
Title Company ("Escrow Holder"), whose address is 16969 Von
Karman, Irvine, California 92606, Escrow Officer: Joy Eaton;
Telephone: (714) 263-0123; Telecopier: (714) 263-0356.
2.9 TITLE COMPANY. The title company is Chicago
<PAGE>
Title Company ("Title Company") whose address is 16969 Von
Karman, Irvine, California 92606, Title Coordinator: John Premac;
Telephone: (714) 263-0123; Telecopier: (714) 263-0356.
3. CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE. Buyer's obligation to
purchase the Property is subject to the satisfac tion or waiver of all the
conditions set forth below (which are for Buyer's benefit) within the time
periods specified and if no time period is specified by the Outside Date.
3.1 TITLE CONDITION.
3.1.1 Seller has requested from the Title Company
a current ALTA coverage preliminary report for the Property (the "Preliminary
Report"), together with copies of all documents available to the Title Company
referenced as recorded exceptions in the Preliminary Report.
3.1.2 Buyer shall have until the last day of the
Title Approval Period to secure from the Title Company a commitment for title
insurance coverage in a form and with exceptions and endorsements acceptable to
Buyer in its sole and absolute discretion (the "Title Policy"). By the end of
the Title Approval Period, Buyer shall provide written notice to Seller and
Escrow Holder as to whether Buyer has received from the Title Company a
commitment for the Title Policy acceptable to Buyer in its sole and absolute
discretion (either "Title Approval Notice" or "Title Rejection Notice"). In
order to be effective, the Title Approval Notice, if given, shall also contain a
copy of the Title Policy which will be required for purposes of satisfying
Buyer's Paragraph 3.8 condition precedent to its performance. If Seller and
Escrow Holder receive a Title Approval Notice from Buyer by the end of the Title
Approval Period, this title condition shall be conclusively deemed satisfied in
all respects. If Seller and Escrow Holder do not receive either form of written
notice, or receive the Title Rejection Notice by the end of the Title Approval
Period, Escrow and this Agreement shall terminate and the Deposit shall be
returned to Buyer, as provided in Paragraph 6.3.
3.1.3 Upon the Close of Escrow, Buyer shall be
deemed to have purchased the Property subject to the following:
(a) Any and all exceptions to title shown
in the Title Policy;
(b) All matters which could be revealed
or disclosed by physical inspection and an accurate survey of the Property;
<PAGE>
(c) General, special and supplemental
real property taxes and assessments not yet due and payable; and
(d) Any and all Leases, rights of vendors
and holders of security interests on personal property installed upon the
Property by tenants, and the rights of tenants to remove personal property
and/or fixtures at the expiration of the term of such Leases.
3.1.4 Nothing in this Paragraph 3.1 shall
obligate Buyer or Seller to expend any funds to cure any title defects unless
the parties have expressly committed to do so in writing. However, if after the
effective date of the Preliminary Report and the endorsements thereto (the last
of which dated December 22, 1997, the Title Company supplements the Preliminary
Report such that new monetary liens are shown as exceptions to the Title Policy,
and such new monetary lien exceptions arose from written contracts executed by
Seller, Seller shall cause such monetary lien exceptions to be removed from the
Title Policy.
3.2 FEASIBILITY CONDITION.
3.2.1 Buyer shall have until 5:00 p.m. on the
last day of the Feasibility Period to confirm, in Buyer's sole and absolute
discretion, and at Buyer's sole expense, whether Buyer may feasibly acquire and
use the Property for Buyer's intended purpose. During the Feasibility Period,
Buyer shall, in addition to all other matters regarding the Property, have
reviewed (or shall have assumed the risk of not reviewing) all of the following:
(a)
the physical condition of the Property;
(b)
the availability of all necessary utilities and gravity sewers
and storm drains for the Property;
(c)
the Leases;
(d)
building inspection reports, roof inspection reports, building plans, HVAC
inspection reports, soils reports, and engineering reports to the extent
available;
(e)
income and expense statements to the extent available;
(f)
all permits and all applicable local, state and federal zoning ordinances,
land use controls and regulations, and other rules, regulations and laws;
(g)
service contracts, tax bills and other written agreements or
notices which affect the Property to the extent available;
(h)
the existing soil and environmental condition, both with regard to
improvements, the Buildings, surface and subsurface, including the existence of
toxic waste and hazardous substances;
(i)
the economic feasibility of Buyer's intended use of the
Property;
(j)
the ability of Buyer to secure funds sufficient to purchase the
Property; and
(k)
any other matters which are or may be relevant to Buyer's
decision whether or not to purchase the Property.
3.2.2 By the end of the Feasibility Period, Buyer
shall provide written notice to Seller and Escrow Holder as to whether Buyer
approves (in its sole and absolute discretion) the feasibility of acquiring the
Property (either "Feasibility Notice" or "Non-Feasibility Notice"). If Seller
and Escrow Holder receive a Feasibility Notice from Buyer by the end of the
Feasibility Period, this feasibility condition shall be conclusively deemed
satisfied in all respects including Buyer's approval of each of the items set
out in Paragraph 3.2.1. If Seller and Escrow Holder do not receive either form
of written notice, or receive the Non-Feasibility Notice, by the end of the
Feasibility Period, Escrow and this Agreement shall terminate, and the Deposit
shall be returned to Buyer, as provided in Paragraph 6.3.
3.2.3 Prior to the Close of Escrow, or in the
event the Close of Escrow never occurs, Buyer hereby agrees that any information
(whether written or verbal), reports, materials, studies or other work product,
which it now has or may obtain pursuant to the provisions of this Agreement,
shall remain strictly confidential. Prior to the Close of Escrow, or in the
<PAGE>
event the Close of Escrow never occurs, Buyer shall use reasonable efforts not
to reveal the existence or contents of any such items to any of its employees,
agents, representatives, or affiliates (except as reasonably required in
connection with Buyer's evaluation of the Property) or to governmental or
quasi-governmental agencies or bodies. Buyer and Seller, for themselves and
their affiliates, subsidiaries, agents, and employees and retained
professionals, agree to keep this Agreement and all of its terms confidential
both prior to Close of Escrow and to not make any public announcements or public
disclosures or communicate with any media with respect to the subject matter
hereof without the prior written consent of the other party (in their sole and
absolute discretion), provided, however, that each party shall have the right to
make such disclosures as are required by law, including but not limited to
required disclosures to the Securities and Exchange Commission, the New York
Stock Exchange (which disclosure of this entire Agreement shall be made in
printed or electronic fashion), or needed for the transaction to occur (e.g.,
consultants, capital sources, affiliates, officers, directors, shareholders and
employees) which disclosures shall not include, unless specifically required by
law, the identity of the Seller or the Purchase Price.
3.2.4 BUYER ACKNOWLEDGES THAT (1) BUYER HAS
RECEIVED COPIES OF THE ENVIRONMENTAL REPORTS LISTED ON EXHIBIT J ATTACHED HERETO
(2) IF SELLER DELIVERS ANY ADDITIONAL ENVIRONMENTAL REPORTS TO BUYER, BUYER WILL
ACKNOWLEDGE IN WRITING THAT IT HAS RECEIVED SUCH REPORTS PROMPTLY UPON RECEIPT
THEREOF, AND (3) ANY ENVIRONMENTAL REPORTS DELIVERED OR TO BE DELIVERED BY
SELLER OR ITS AGENTS OR CONSULTANTS TO BUYER ARE BEING MADE AVAILABLE SOLELY AS
AN ACCOMMODATION TO BUYER AND MAY NOT BE RELIED UPON BY BUYER IN CONNECTION WITH
THE PURCHASE OF THE PROPERTY. BUYER AGREES THAT SELLER SHALL HAVE NO LIABILITY
OR OBLIGATION WHATSOEVER FOR ANY INACCURACY IN OR OMISSION (EXCEPT FOR THE
PARAGRAPH 9.1(C) REPRESENTATION AND WARRANTY) FROM ANY ENVIRONMENTAL REPORT.
BUYER HAS CONDUCTED, OR WILL CONDUCT PRIOR TO THE EXPIRATION OF THE INSPECTION
PERIOD, ITS OWN INVESTIGATION OF THE ENVIRONMENTAL CONDITION OF THE PROPERTY TO
THE EXTENT BUYER DEEMS SUCH AN INVESTIGATION TO BE NECESSARY OR APPROPRIATE.
3.3 REPRESENTATIONS AND WARRANTIES. All of Seller's
Representations and Warranties shall be true as of Closing or
qualified as provided in Paragraph 9.1
3.4 DELIVERY OF DOCUMENTS. Seller shall have signed,
acknowledged and timely delivered all documents and instruments
<PAGE>
to Escrow Holder as required by Paragraph 5.3 below.
3.5 PERFORMANCE OF COVENANTS. Seller shall have
timely performed all of its covenants and terms under this
Agreement.
3.6 ESTOPPEL CERTIFICATES. For Leases covering seventy-five
percent (75%) of the leased square footage of the Property, excluding Leases
with ITT Fluid Technology and Professional Detailing, Inc. and the square
footage attributable to those leases from the said calculation, Buyer shall have
received from the tenants under such Leases a signed tenant estoppel certificate
in the form attached as Exhibit "C" ("Tenant Estoppel Certificate"). Buyer shall
have also received a signed Tenant Estoppel Certificate from both Corning Life
Sciences, Inc. and Thompson Minwax Company, Innapharma, Inc. and Neuromedical
Systems, Inc. The leased square footage of the Property of these four tenants
and the receipt of their Tenant Estoppel Certificates for such square footage
shall be included for purposes of calculation of the seventy-five percent (75%)
threshold described in the immediately preceding sentence. For Leases with ITT
Fluid Technology and Professional Detailing, Inc. Buyer shall have received
written confirmation that such Leases are if effect and that to the best
knowledge of the tenant no default exists on the part of the Seller thereunder.
3.7 INTENTIONALLY OMITTED.
3.8 TITLE POLICY. The Title Company shall have committed and
is prepared to issue at Closing the Title Policy designated by Buyer on or
before expiration of the Feasibility Period in its Title Approval Notice.
4. CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE. Seller's obligation to sell
the Property is subject to the satisfaction (or waiver) of all conditions set
forth below (which are for Seller's benefit) within the time periods specified
and if no time period is specified by the Outside Date.
4.1 PERFORMANCE OF COVENANTS. Buyer shall have
timely performed all of its covenants and terms under this
Agreement.
4.2 REPRESENTATIONS AND WARRANTIES. All of Buyer's
Representations and Warranties provided in Paragraph 9.2 of this
Agreement shall be true as of Closing.
4.3 DELIVERY OF DOCUMENTS AND FUNDS. Buyer shall
have signed, acknowledged and timely delivered all documents,
monies, and instruments to Escrow Holder as required by
<PAGE>
Paragraphs 2.3 and 5.2.
4.4 OPENING OF ESCROW. Escrow shall have opened (as
provided in Paragraph 7.2) by no later than February 9, 1998.
5. CLOSING.
5.1 THE CLOSING.
(a) The Closing shall occur by no later than
5:00 p.m. on the Outside Date.
(b) The terms "Close of Escrow" and/or
"Closing" are used in this Agreement to mean the time the Deed is filed of
record by the Escrow Holder in the Office of the County Clerk of Bergen County,
New Jersey. The term "Closing Date" is used in this Agreement to mean the day
the Deed is so filed of record.
(c) The occurrence of the Closing shall
constitute Buyer's agreement that all of its conditions precedent to its
obligation to perform have been satisfied.
5.2 SELLER'S CLOSING OBLIGATIONS. On or before 12:00 noon on
the last business day immediately before the Outside Date, Seller shall deliver
to Escrow Holder:
(a) A Deed in the form attached as Exhibit "D"
("Deed"), signed by Seller and acknowledged, covering the Land;
(b) An Assignment of Leases in the form
attached as Exhibit "E" ("Assignment of Lease") signed by Seller;
(c) A General Assignment in the form attached
as Exhibit "F" ("General Assignment"), signed by Seller;
(d) A certificate of non-foreign status in the
form attached as Exhibit "G" ("Seller's FIRPTA Certificate"),
signed by Seller;
(e) An Owner's Affidavit of Title for the
benefit of the Title Company in the form attached as Exhibit "I"
("Owner's Affidavit of Title"), signed by Seller; and
(f) Any additional instruments (signed by
Seller and acknowledged, if appropriate) as may be necessary to comply with this
Agreement.
(g) To the extent the same are in Seller's
<PAGE>
possession, all original Leases and other documents pertaining thereto and
copies of such Leases or other documents where Seller, using its best reasonable
efforts, is unable to deliver originals of the same.
(h) To the extent the same are in Seller's
possession, all other documents or instruments necessary and/or available with
respect to the operating, leasing and maintenance of the Property, including,
without limitation, tenant files, Contracts, Warranties and Guaranties, and
manuals.
(i) A letter to Tenants advising the Tenants of
the sale hereunder and directing that rent and other payments thereafter be sent
to Buyer or its desingee, as Buyer shall so direct.
(j) A computer diskette with this Agreement and
such other related conveyancing documents prepared by Seller's counsel as
requested by Buyer, in Wordperfect or Microsoft Word format.
5.3 BUYER'S CLOSING OBLIGATIONS. On or before 12:00 noon on
the last business day immediately before the Outside Date, Buyer shall deliver
to Escrow Holder:
(a) Cash equal to the amount provided for in
Paragraph 2.3(b). The cash must be by direct deposit or by wire transfer of
funds actually made in Escrow Holder's depository bank account by 12:00 noon on
the last business day immediately before the Outside Date;
(b) The Assignment of Leases (or counterpart),
signed by Buyer;
(c) The General Assignment (or counterpart),
signed by Buyer;
(d) Any additional funds and/or instruments
(signed by Buyer and acknowledged, if appropriate) as may be
necessary to comply with this Agreement.
<PAGE>
6. TERMINATION OF THIS AGREEMENT.
6.1 FAILURE TO CLOSE BY OUTSIDE DATE. If Escrow fails to close
as of 5:00 p.m. on the Outside Date, this Agreement and Escrow shall
automatically terminate and cancel without further action by Escrow Holder or
any party and notwithstanding any provision contained in Escrow Holder's general
provisions.
6.2 FAILURE OF A CONDITION. Except in those instances where
this Agreement and Escrow automatically terminate under the terms of this
Agreement, if any condition is not satisfied or waived within the time period
and in the manner set forth in this Agreement, then the party for whose benefit
the condition exists (as provided in Paragraphs 3 and 4 of this Agreement) may
terminate this Agreement by delivering written notice to the other party and to
Escrow Holder by no later than the earliest of (i) the third (3rd) business day
following the expiration of such applicable time period, (ii) the Closing Date,
or (iii) the Outside Date.
6.3 CONSEQUENCES. If this Agreement terminates (or is properly
terminated by either party) as specifically provided by its terms, then each of
the following shall occur: (i) Escrow shall be deemed automatically canceled
regardless of whether cancellation instructions are signed; (ii) neither party
shall have any further obligation to the other under this Agreement (except for
breach of this Agreement as those remedies may be limited hereunder; and as
provided under Paragraphs 10.2 and 15.2 which shall survive termination of this
Agreement); (iii) all rights granted to Buyer under this Agreement and in the
Property shall terminate; and, (iv) except as provided to the contrary in
Paragraph 6.5 (concerning Seller's right to retain the Deposit as liquidated
damages), Escrow Holder shall return all funds and documents then held in Escrow
to the party depositing the same, including, without limitation, the Deposit to
Buyer.
6.4 ESCROW CANCELLATION CHARGES. If Escrow fails to close
because of either party's default, the defaulting party shall be liable for all
Escrow cancellation and Title Company charges. If Escrow fails to close for any
other reason, Buyer and Seller shall each pay one-half of any Escrow
cancellation and Title Company charges.
6.5 LIQUIDATED DAMAGES. IF ESCROW FAILS TO CLOSE DUE
TO BUYER'S BREACH OF THIS AGREEMENT, SELLER SHALL BE RELEASED
FROM ALL OF ITS OBLIGATIONS UNDER THIS AGREEMENT, AND ESCROW
HOLDER SHALL IMMEDIATELY DELIVER THE DEPOSIT TO SELLER, AND
<PAGE>
SELLER SHALL BE ENTITLED TO RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES. SELLER AND
BUYER SHALL INDEMNIFY ESCROW HOLDER FOR ANY LIABILITY, COSTS AND EXPENSES BY
REASON OF ESCROW HOLDER'S GOOD FAITH COMPLIANCE WITH THIS PARAGRAPH. THE PARTIES
EXPRESSLY AGREE THAT THE AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF THE
EXTENT TO WHICH SELLER WOULD BE DAMAGED BY BUYER'S BREACH OF THIS AGREEMENT, IN
LIGHT OF THE DIFFICULTY THE PARTIES WOULD HAVE IN DETERMINING SELLER'S ACTUAL
DAMAGES AS A RESULT OF SUCH BREACH BY BUYER. SELLER'S RETENTION OF THE DEPOSIT
AS LIQUIDATED DAMAGES SHALL BE SELLER'S EXCLUSIVE REMEDY FOR DAMAGES BY REASON
OF BUYER'S BREACH OF THIS AGREEMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN
THIS PARAGRAPH 6.5, THE DEPOSIT SHALL NOT LIMIT THE SELLER'S RIGHT TO RECOVERY
UNDER PARAGRAPHS 10.2 AND 15.2. OTHER THAN A RELEASE BY ESCROW AGENT OF DEPOSIT
TO SELLER AS PART OF THE CLOSING OR TO BUYER IF THIS AGREEMENT IS TERMINATED AT
END OF THE DUE DILIGENCE, ESCROW HOLDER SHALL HOLD AND DISBURSE THE DEPOSIT
PURSUANT TO THIS AGREEMENT OR SUBSEQUENT WRITTEN AGREEMENT OF THE PARTIES, IN
ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS AGREEMENT OR ANY SUCH
SUBSEQUENT AGREEMENT. IN THE EVENT OF DOUBT AS TO ITS DUTIES OR LIABILITIES
UNDER THE PROVISIONS OF THIS AGREEMENT, ESCROW HOLDER MAY IN ITS SOLE DISCRETION
CONTINUE TO HOLD THE DEPOSIT UNTIL THE PARTIES MUTUALLY AGREE TO DISBURSEMENT
THEREOF, OR UNTIL A COURT OF COMPETENT JURISDICTION SHALL DETERMINE THE RIGHTS
OF THE PARTIES THERETO.
------------------
-----------------
SELLER'S INITIALS
BUYER'S INITIALS
7. GENERAL ESCROW PROVISIONS.
7.1 ESCROW INSTRUCTIONS. This Agreement when signed by Buyer
and Seller shall also constitute Escrow Instructions to Escrow Holder.
7.2 OPENING OF ESCROW. When both (i) this Agreement, fully
signed or in signed counterparts, and (ii) Buyer's Deposit are delivered to
Escrow Holder, Escrow shall be deemed open, and Escrow Holder shall immediately
notify Buyer and Seller by telephone and in writing of the date of Opening of
Escrow.
7.3 GENERAL PROVISIONS. Notwithstanding anything to the
contrary in this Agreement, the General Provisions of Escrow Holder, if any,
which are later signed by the parties, are incorporated by reference to the
extent they are not inconsistent with the provisions of this Agreement. If there
is any inconsistency between the provisions of those General Provisions
<PAGE>
and any of the provisions of this Agreement, the provisions of this Agreement
shall control. If any requirements relating to the duties or obligations of the
Escrow Holder are unacceptable to the Escrow Holder, or if the Escrow Holder
requires additional instructions, the parties agree to make any deletions,
substi tutions and additions as counsel for Buyer and Seller shall mutually
approve and which do not materially alter the terms of this Agreement. Any
supplemental instructions shall be signed only as an accommodation to Escrow
Holder and shall not be deemed to modify or amend the rights of Buyer and
Seller, as between Buyer and Seller, unless the supplemental instructions
expressly so provide.
7.4 PRORATIONS. It is the intent of the parties that Seller
shall bear all expenses of ownership and operation of the Property and shall
receive all income therefrom applicable or relating to the period ending at
11:59 p.m. on the day preceding the Close of Escrow, and Buyer shall bear all
such expenses and receive all such income applicable or relating to the period
beginning thereafter (such income and expenses being those defined as such by
generally accepted accounting principals, consistently applied). Rentals,
revenues, and other income from the Property, and taxes, assessments,
improvement bonds and any and all other expenses affecting the Property shall be
prorated as of 11:59 p.m. on the day preceding the Close of Escrow. For purposes
of calculating prorations, Buyer shall be deemed to be in title of the Property,
and therefore entitled to the income and responsible for the expenses, for the
entire day upon which the Close of Escrow occurs. Buyer shall be responsible for
obtaining a new policy of casualty and/or liability insurance as of the Close of
Escrow. All prorations shall be made in accordance with customary practice in
the county in which the Property is located, except as expressly provided
herein. Such prorations, if and to the extent known and agreed upon as of the
Close of Escrow, shall be paid through Escrow by Buyer to Seller (if the
prorations result in a net credit to the Seller) or by Seller to Buyer (if the
prorations result in a net credit to the Buyer). Any items of income or expense
or other prorations not determined or not agreed upon or later shown to have
been incorrect as of the Close of Escrow shall be paid by Buyer to Seller, or by
Seller to Buyer, as the case may be, in cash, as soon as practicable following
the determination of such amounts provided, that no adjustment will be required
after the expiration of fifteen (15) months after the Close of Escrow, except
for any tax refunds (including, without limitation, any tax refunds resulting
from any Tax Protest Proceedings (defined beow)) with respect to which the
foregoing obligations of Buyer and Seller shall continue to apply. Without
limiting the generality of the foregoing:
<PAGE>
(a) Rent. All rents, fees and charges,
including, without limitation, payments of minimum or base rents, fixed monthly
rents, additional rents, retroactive rents, operating cost pass-through, rent
escalations, percentage rents, sign revenues, other receipts, operating expenses
of the Property, tenant expenses, taxes, assessments, electricity and other
utilities, common area maintenance and services, other escalation charges and
other amounts due Seller pursuant to the Leases or due Seller with respect to
the Property generally or otherwise payable under the Leases (all of the
foregoing may hereinafter be collectively referred to as "Rents") shall be
prorated as of the Close of Escrow. Subject to the provisions below, Rents
delinquent at the Close of Escrow shall be prorated to the Close of Escrow when
collected. Rents collected within twelve (12) months after the Close of Escrow
shall be deemed to apply (after deduction of costs for collections) first to
Rents currently or past due and payable to Buyer for the period after Close of
Escrow from tenants making such payments, and second to Rents which are due and
payable to Seller for the period prior to Close of Escrow from tenants making
such payments. Buyer shall at all times for twelve (12) months after the Close
of Escrow, continue to invoice tenants for all Rents which are delinquent or
unpaid as of the Close of Escrow or which otherwise belong to Seller pursuant to
this Agreement. Rents collected by Buyer after the Close of Escrow, to which
Seller is entitled under this Paragraph, shall be promptly paid over, in cash,
to Seller after deduction of any reasonably incurred collection costs but
otherwise without offset or deduction. Seller reserves the rights to all
delinquent or past due Rents owing to Seller for periods prior to the Close of
Escrow and Buyer acknowledges that such Rents are the property of Seller and are
hereby specifically reserved by Seller. Such reservation by Seller and the
foregoing rights of Seller shall survive the Close of Escrow, the recordation of
the Deed and the execution, delivery and recordation of the Lease Assignment
(defined below) and shall supersede any provision herein or in the Lease
Assignment tothe contrary. Seller may proceed to institute any and all legal
proceedings to which it is legally entitled to recover such amounts from such
tenants, except that Seller shall not be permitted to institute legal
proceedings for unlawful detainer against such tenants or to seek to terminate
their Leases.
(b) Omitted.
<PAGE>
(c) Expenses. Subject to Paragraph 7.4(d) and
7.4(g) hereof, all operating expenses of the Property shall be prorated as of
the Close of Escrow. As used in this Agreement, the term "operating expenses of
the Property" shall include, without limitation, any and all: (i) utility
charges and deposits as shown on the last ascertainable bills (if current bills
are not available) if and to the extent the utility meters are not read as of
the Close of Escrow; (ii) charges and deposits under any Contracts; (iii)
operating cost pass-through, elevator maintenance costs and expenses, common
area maintenance costs and expenses, non-common area maintenance costs and
expenses, taxes (including, without limitation, real estate taxes and rental
taxes), (iv) other expenses incurred in operating the Property that a property
owner customarily pays ; and (v) any other costs incurred in the ordinary course
of the 0 operation of the Property. Buyer shall pay all such expenses accruing
on the Close of Escrow and thereafter. To the extent practicable, Seller and
Buyer shall obtain billings and meter readings as of the Close of Escrow to aid
in such prorations. Buyer shall not be responsible for any management fees
attributable to the Property which expenses accrued and were payable prior to
the Closing Date, nor shall Buyer by responsible for any cancellation or
termination fees contained in any management agreement of Seller affecting the
Property unless expressly assumed in writing by Buyer.
(d) Estimated Payments. To the extent that any
additional rent (including, without limitation, estimated payments for operating
expenses and/or real estate taxes) (collectively, "Expenses") is paid by tenants
under the Leases based on an estimated payment basis (monthly, quarterly, or
otherwise) for which a future reconciliation of actual Expenses to estimated
payments is required to be performed at the end of a reconciliation period,
Buyer and Seller shall make an adjustment at the Close of Escrow for the
applicable reconciliation period (or periods, if the Leases do not have a common
reconciliation period) based on a comparison of the actual Expenses to the
estimated payments (to the extent such estimated payments were actually received
by Seller) at the Close of Escrow. If, as of the Close of Escrow, Seller has
received rent payments for Expenses in excess of the amount that tenants will be
required to pay, based on the actual Expenses as of the Close of Escrow, Buyer
shall receive a credit at Closing in the amount of such excess. If, as of the
Close of Escrow, Seller has received rent payments for Expenses that are less
than the amount that tenants will be required to pay based on the actual
Expenses as of the Close of Escrow, Buyer shall include such deficient amount in
its billings to such tenants for reconciliation of the estimated
<PAGE>
payments for such Expenses and so long as Buyer, as landlord, is current in
payments from such tenants, shall pay such deficient amount to Seller promptly
following Buyer's receipt of such amount from such tenants.
(e) Leasing Costs. Subject to the terms of
Paragraph 12 with regard to Approved New Lease Transactions, in the event that
any Lease requires, at any time after the Close of Escrow, the construction of
tenant fixtures or improvements or the payment of leasing or brokerage
commissions at the expense of landlord, or requires any other expenditure of
money or the incurring of any other obligation or the performance of any
covenant by the landlord under such Lease, Buyer, by electing to cause the Close
of Escrow to occur, hereby agrees to assume any and all such obligations.
(f) Security Deposits. Buyer shall receive a
credit at Closing for each of the security deposits listed on the
attached Exhibit "K".
(g) Owner Deposits. Seller shall receive a
credit at Closing for all bonds, deposits, letters of credit, set aside letters
or other similar items, if any, that are outstanding with respect to the
Property that have been provided by Seller or any of its affiliates to any
governmental agency, public utility, or similar entity (collectively, "Owner
Deposits") to the extent assigned and assignable to Buyer. Otherwise, Buyer
shall replace all Owner Deposits based upon reasonable proof as to the amount of
the deposit. To the extent that any funds are released as result of the
termination or replacement of the Owner Deposits for which Seller did not get a
credit, such funds shall be delivered to Seller immediately upon their receipt.
Buyer shall reasonably cooperate with Seller in any efforts to obtain the
release of Seller's Owner Deposits (provided that Seller shall reimburse Buyer
for any costs incurred for such cooperation other than the amount of the Owner
Deposits to be replaced).
(h) Tax Protests. If Seller has engaged
consultants for the purpose of protesting the amount of taxes or the assessed
valuation for certain tax periods for the Property ("Protest Proceedings") any
refunds or proceeds will be apportioned as described below. Any refunds or
proceeds (including interest thereon) on account of a favorable determination,
after deduction of costs and expenses incurred for such Protest Proceedings and
payment of any reimbursements owing to tenants, shall be: (i) the property of
Seller to the extent such refunds or proceeds were for taxes applicable to a
period prior to the Closing Date, (ii) prorated between Buyer and Seller
<PAGE>
for taxes paid for a period during which the Closing Date occurred, and (iii)
the Property of Buyer for taxes paid by Buyer for a period after the Closing
Date. Seller shall have the obligation to refund to any tenants pursuant to the
Leases, any portion of such refund paid to it which may be owing to such
tenants, which payment shall be paid to Buyer within fifteen (15) days of
delivery to Seller by Buyer of written confirmation of such tenants' entitlement
to such refunds. Buyer shall have the obligation to refund to tenants such
refund, any portion of such refund paid to it which may be owing to such
tenants. Seller and Buyer agree to notify the other in writing of any receipt of
a tax refund within ten (10) business days of receipt of such refund. To the
extent either party obtains a refund, a portion of which is owed to the other
party, the receiving party shall deliver the refund to the other party within
fifteen (15) days of its receipt. No Protest Proceedings are currently in
process.
(i) All prorations shall be made on the basis
of actual days in the month and a three hundred sixty-five (365) day year. The
obligations of Buyer and Seller under this Paragraph 7.4 shall survive the Close
of Escrow and the delivery and recordation of the Deed and the consummation of
the transactions contemplated herein.
(j) Post-Closing Access. After the Closing,
Seller, or any representative of Seller, shall for a period of one (1) year
after the Closing have the right to inspect the books and records of the
Property to verify that Buyer is remitting to Seller all amounts to be remitted
to Seller according to the terms of this Agreement and for any other purpose
related to Seller's prior ownership of the Property.
7.5 PAYMENT OF COSTS. Seller shall pay: (i) one-half of the
Escrow Fee, (ii) the base premium charges for a standard owner's title policy
which total fee is $57,000.00 ("Standard Premium") and (iii) the cost of
preparing the Deed. Buyer shall pay: (i) all title and title insurance costs and
premiums in excess of the Standard Premium (including, without limitation, the
cost of ALTA or any other extended coverage, any endorsements, and any survey
costs), (ii) one-half of the Escrow costs and fees; (iii) all costs relating to
financing the transaction; (iv) all recording fees for the Deed, deeds of trust
and other financing documentation; (v) all city, county, and state transfer,
documentary and excise fees and taxes; (vi) all costs arising from its due
diligence efforts, including, without limitation, any cost to update existing or
obtain new environmental studies, engineering reports or surveys; and (vii) all
other costs arising from the transfer of the Property to Buyer (other than
Seller's income taxes).
<PAGE>
7.6 ESCROW HOLDER AUTHORIZED TO COMPLETE BLANKS. If necessary,
Escrow Holder is authorized to insert in all date blanks in the Closing
documents, the date of recordation of the Deed.
7.7 RECORDATION AND DELIVERY OF FUNDS AND DOCUMENTS. When
Buyer and Seller have satisfied their respective Closing obligations under
Paragraphs 5.2 and 5.3 and each of the conditions under Paragraphs 3 and 4 have
either been satisfied or waived, Escrow Holder shall promptly undertake all of
the following in the manner indicated:
(a) Prorations. Prorate and allocate all
matters as described in Paragraphs 7.4 and 7.5.
(b) Recording. Cause the Deed and any other
documents which the parties hereto may mutually direct to be recorded in the
Official Records of Bergen County, New Jersey, in the order set forth in the
parties' Escrow instructions.
(c) Funds. Disburse funds deposited by Buyer
with Escrow Holder towards payment of all items chargeable to the account of
Buyer pursuant hereto in payment of such costs including, without limitation,
the payment of the Purchase Price to Seller.
(d) Document Delivery. Deliver originals and
conformed copies of all documents to Seller and Buyer, as
appropriate.
(e) Title Policy. Direct the Title Company to
issue the Title Policy to Buyer.
8. NO BROKERAGE COMMISSIONS. Cushman & Wakefield is the broker for this
transaction ("Broker"). Only if Close of Escrow occurs pursuant to the terms of
this Agreement, Seller shall pay Broker a commission pursuant to its written
commission agreement with Broker upon such Close of Escrow. Seller shall
indemnify, defend, and hold Buyer harmless from and against all claims,
liabilities, costs, damages and expenses (including, without limitation,
attorney's fees and costs) resulting from or arising out of any claims for
finder's fees or commissions claimed by Broker for the Close of Escrow of the
transaction which is the subject of this Agreement. Except for Broker, neither
Seller nor Buyer has engaged a broker or finder in connection with this
transaction. Each party shall indemnify, defend and hold the other harmless from
and against all claims, liabilities, costs, damages and expenses (including,
without limitation, attorney's fees and costs) resulting from or arising out of
any claims for
<PAGE>
finder's fees or commissions arising out of any contract or commitments made by
or through the indemnifying party with any broker or finder other than the
Broker.
<PAGE>
9. REPRESENTATIONS AND WARRANTIES, "AS IS" SALE.
9.1 SELLER'S REPRESENTATIONS AND WARRANTIES. In consideration
of Buyer entering into this Agreement and as an inducement to Buyer to buy the
Property from Seller, Seller makes the following representations and warranties,
each of which is material and is being relied upon by Buyer (the continued truth
and accuracy of which shall constitute a condition precedent to Buyer's
obligations hereunder):
(a) Authority. Seller is validly existing
under the laws of the State of Delaware , with full power and authority to enter
into and comply with the terms of this Agreement.
(b) Power. Seller has the legal right, power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby, and the execution, delivery and performance of this
Agreement have been duly authorized and no other action by Seller is requisite
to the valid and binding execution, delivery and performance of this Agreement.
(c) Notices Of Cancellation Of Permits. To
Seller's Actual Knowledge, except as disclosed in the Property Documents, Seller
has not received any written notice that any permits and licenses currently
necessary to operate the Property have been cancelled or will be cancelled.
(d) Violation. To Seller's Actual Knowledge,
except as disclosed by the Property Documents, Seller has not received any
written notices from any federal, state, or local governing agency notifying
Seller of any currently uncured violation of law relating to the use or
operation of the Property which could materially or adversely affect the
Property or use thereof.
(e) Condemnation. To Seller's Actual
Knowledge, except as disclosed by the Property Documents, Seller has not
received any written notices of any condemnation proceedings affecting the
Property.
(f) Governmental Work Orders. To Seller's
Actual Knowledge, except as disclosed by the Property Documents, Seller has not
received any written notices from any federal, state or local governing agencies
notifying Seller of any currently uncured violation of outstanding work orders
from such governmental agencies.
<PAGE>
(g) Leasing Commissions. To Seller's Actual
Knowledge, except as disclosed by Exhibit "L", and/or the Leases, there are not
any written leasing commission agreements entered into by Seller or Expressly
assumed in writing by Seller, for which Buyer could have liability after the
Closing for the leasing of space at the Property.
(h) To Seller's Actual Knowledge (i) the
information set forth on Exhibit "B" includes all the currently effective Lease
and Occupancy Agreements for the Property; (ii) Exclusive of any matter related
to title to the Property and/or matters of public record, the information set
forth on Exhibit 1 to the General Assignment (attached hereto as Exhibit "F")
includes all the written agreements entered into by Seller or Expressly assumed
in writing by Seller pertaining to the Property pursuant to which Buyer could
become obligated subsequent to the Closing Date; and (iii) the information set
forth on Exhibit "M" includes all filed and served litigation currently
affecting the Property.
(i) To Seller's Actual Knowledge there are no
security deposits under the Lease for which Buyer could become obligated after
the closing date except as set forth on Exhibit K.
For purposes of this Paragraph, the term "To Seller's Actual Knowledge" shall
mean the actual (and not implied, imputed, or constructive) knowledge of Jim
Patterson (whom the Seller represents is its Asset Manager for the Property),
without any inquiry or investigation of any other parties, including, without
limitation, tenants and property managers of the Property.
The representations and warranties made by Seller in this Agreement shall
survive the recordation of the Deed for a period of one (1) year and any action
for a breach of Seller's representations or warranties must be made and filed
within said one (1) year period. If, after the Effective Date, but before the
Close of Escrow, Seller becomes aware of any facts or changes in circumstances
that would cause any of its representations and warranties in this Agreement to
be untrue at Close of Escrow, Seller shall promptly notify Buyer in writing of
such fact. In such case, or in the event Buyer obtains information which would
cause any of Seller's representations and warranties to be untrue at Close of
Escrow, Buyer, as its sole and exclusive remedy, shall have the right to either
(i) terminate this Agreement, in which case the Deposit shall be immediately
returned to Buyer and neither party shall have any rights or obligations under
this Agreement (except for Paragraphs 10.2 and 15.2 which survive termination of
this Agreement); or (ii) accept a qualification to
<PAGE>
Seller's representations and warranties as of the Close of Escrow and complete
the purchase and sale of the Property without any rights to recovery for breach
of the unqualified representation and warranty. Other than as set forth in the
immediately preceding sentence, if Buyer proceeds with the Closing, Buyer shall
be deemed to have expressly waived any and all remedies for the breach of any
representation or warranty discovered by John Kropke prior to the Close of
Escrow.
9.2 BUYER'S REPRESENTATIONS AND WARRANTIES. In
consideration of Seller entering into this Agreement and as an
inducement to Seller to sell the Property to Buyer, Buyer makes
the following representations and warranties, each of which shall
be true and accurate as of the Effective Date and Close of Escrow
(and shall survive the Close of Escrow), and each of which is
material and is being relied upon by Seller (the continued truth
and accuracy of which shall constitute a condition precedent to
Seller's obligations hereunder):
(a) Authority. Buyer is validly existing under
the laws of the state of its incorporation, with the full power and authority to
enter into and comply with the terms of this Agreement and is qualified to do
business in the State of New Jersey. Buyer has the legal right, power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby, and the execution, delivery and performance of this
Agreement have been duly authorized and no other action by Buyer is requisite to
the valid and binding execution, delivery and performance of this Agreement.
(b) Expertise. Buyer is experienced and expert
in the acquisition and ownership of real property. Buyer has conducted a full
feasibility study of the Property and is relying thereon in connection with
Buyer's acquisition of the Property and not on any statement or document made by
or delivered by Seller.
9.3 "AS IS".
(a) NO OTHER REPRESENTATIONS AND WARRANTIES.
EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY PROVIDED IN THIS
AGREEMENT, BUYER AGREES (i) THAT IT IS PURCHASING THE PROPERTY ON AN "AS IS"
BASIS AND BASED ON ITS OWN INVESTIGATION OF THE PROPERTY, (ii) THAT NEITHER
SELLER NOR SELLER'S EMPLOYEES, AGENTS, BROKERS, REPRESENTATIVES, MANAGERS,
PROPERTY MANAGERS, ASSET MANAGERS, OFFICERS, PRINCIPALS, ATTORNEYS OR
CONTRACTORS (COLLECTIVELY, "SELLER'S REPRESENTATIVES") HAVE MADE ANY WARRANTY,
REPRESENTATION OR GUARANTEE, EXPRESSED, IMPLIED OR STATUTORY, WRITTEN OR ORAL,
INCLUDING, WITHOUT LIMITATION, ANY
<PAGE>
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY USE OR PURPOSE OR OF
REASONABLE WORKMANSHIP, CONCERNING THE PROPERTY OR ANY OF THE PRODUCTS OR
IMPROVEMENTS LOCATED THEREON OR THEREIN (INCLUDING, WITHOUT LIMITATION, THE
BUILDINGS AND ANY OTHER IMPROVEMENTS), (iii) THAT NEITHER SELLER NOR SELLER'S
REPRESENTATIVES HAVE MADE ANY WARRANTY, REPRESENTATION, OR GUARANTEE, EXPRESSED,
IMPLIED OR STATUTORY, WRITTEN OR ORAL, PERTAINING TO THE PROPERTY'S COMPLIANCE
WITH ANY LAWS, ORDINANCES, RULES OR REGULATIONS, FEDERAL, STATE OR LOCAL, AND
(iv) THAT NEITHER SELLER NOR SELLER'S REPRESENTATIVES HAVE MADE ANY WARRANTY,
REPRESENTATION OR GUARANTEE, EXPRESSED, IMPLIED OR STATUTORY, WRITTEN OR ORAL,
AS TO ANY GOVERNMENT LIMITATION OR RESTRICTION, OR ABSENCE THEREOF, PERTAINING
TO THE PROPERTY, OR AS TO THE PRESENCE OR ABSENCE OF ANY LATENT DEFECT,
SUBSURFACE SOIL CONDITION, ENVIRONMENTAL CONDITION, HAZARDOUS SUBSTANCE, TOXIC
WASTE OR ANY OTHER MATTER PERTAINING TO THE PHYSICAL CONDITION (TITLE, MAPPING,
GRADING, CONSTRUCTION, OR OTHERWISE) OF THE PROPERTY. Buyer is or as of the
Close of Escrow will be familiar with the Property and its suitability for
Buyer's intended use. Except for the representations and warranties expressly
provided in Paragraph 9.1 above, all of Seller's and Seller's Representatives'
statements, whenever made, are made only as an accommodation to Buyer and are
not intended to be relied or acted upon in any manner by Buyer. Except for the
reprsentations and warranties expressly set forth in Paragraph 9.1, all
documents, records, agreements, writings, statistical and financial information
and all other information (collectively, "Documents") which have been given to
Buyer by Seller, or Seller's Representatives, have been delivered as an
accommodation to Buyer and without any representation or warranty as to the
sufficiency, accuracy, completeness, validity, truthfulness, enforceability, or
assignability of any of the Documents, all of which Buyer relies on at its own
risk. Buyer acknowledges that any information, oral or written, provided to
Buyer by any asset or property managers is also merely as an accommodation to
Buyer. While such information will not affect any representation of Seller
specifically set forth in this agreement, none of the information provided to
Buyer by any asset or property managers may be attributed to Seller. Except for
the representations and warranties expressly set forth in Paragraph 9.1, Seller
and Seller's Representatives shall not have any liability whatsoever to Buyer in
the event that any documents or information provided to Buyer are inaccurate.
Except for the representations and warranties expressly set forth in Paragraph
9.1, Buyer acknowledges that neither Seller nor Seller's Representatives have
made any representation regarding the availability of, or amount of, any fee,
assessment, or cost relating to the development, construction, mapping, access,
occupancy or ownership of the Property. Buyer acknowledges and
<PAGE>
agrees that Buyer's only recourse for any defect in title, subject to Buyer's
rights set forth in Paragraph 3.1.4 of this Agreement, shall be against the
Title Company and not Seller.
(b) Seller's Responsibility. Buyer represents
and covenants that Seller and Seller's Representatives shall not have any
liability, obligation or responsibility (except to the extent arising from
Seller's breach of its Paragraph 9.1 Representations and Warranties) of any kind
with respect to the following:
(i)
The content or accuracy of any report, opinion or conclusion of any soils or
environmental experts (including, without limitation, those contained in any
environmental reports) or other engineer or other person or entity who has
examined the Property;
(ii)
The content or accuracy of any information released to Buyer by an engineer
or planner in connection with the development of the Property;
(iii)
Any of the items delivered to Buyer in connection with Buyer's
review of the condition of the Property; and
(iv)
The content or accuracy of any other cost, projection, financial or other
analysis or other information given to Buyer by Seller or Seller's
Representatives or reviewed by Buyer with respect to the Property.
The terms of Paragraphs 9.2 and 9.3 set forth in this Agreement shall be true on
and as of the Close of Escrow and shall survive the Close of Escrow and
recordation of the Deed.
10. ENTRY ON PROPERTY.
10.1 LICENSE TO ENTER FOR INVESTIGATION. Until Escrow closes
or this Agreement is terminated, Buyer and Buyer's employees and agents shall
have a limited license to enter upon the Property, during usual business hours,
after receipt by Seller of two (2) business days advance notice of its intention
to enter the Property (the "License") for purposes of visual inspections only
and subject to any rights of tenants under the Leases. Buyer shall not contact
or communicate with tenants. Before beginning any tests or investigations which
contemplate the drilling or disturbance of the surface of the Property, Buyer
<PAGE>
shall submit to Seller for its approval in its sole and absolute discretion,
Buyer's operational plan for conducting the tests or investigations. Buyer has
completed all of its environmental investigations of the Property and shall not
conduct any further environmental investigations for the Property. Seller may
have a representative present during any tests or investigations and Buyer shall
provide Seller with prior notice of any tests or investigations. After any
entry, Buyer shall immediately restore the Property to the Property's condition
before Buyer entered on the Property. Buyer shall not allow any dangerous or
hazardous condition to be created on or arise from Buyer's entry on the
Property. Buyer shall comply with all applicable laws and governmental
regulations applicable to its entry to the Property. Buyer shall keep the
Property free and clear of all mechanics' liens and materialmen's liens arising
out of any of Buyer's activities. The License may be revoked by Seller at any
time, and shall in any event be deemed revoked upon termination of this
Agreement.
10.2 INDEMNIFICATION ON ENTRIES. Buyer shall indemnify, defend
(with counsel selected by Seller), and hold harmless Seller and Seller's
officers, directors, shareholders, employees, agents, managers, property
managers (including, without limitation, Koll Management Services, Inc.), asset
managers (including without limitation, Koll Investment Management, Inc.),
attorneys, representatives, subsidiary and parent corporations, affiliated
entities, and the above parties' predecessors, successors and assigns (all of
the above parties including Seller are collectively referred to as "Seller
Parties") and the Property, from and against all claims, losses, liens,
liabilities, damages, expenses and costs (including, without limitation,
attorneys' fees and costs) arising from or relating to the entry of Buyer or its
representatives, agents and contractors on the Property but not as to any
preexisting environmental condition which is not exacerbated by such entry on
the Property. To Seller's Acutal Knowledge Seller has received no written
notices of any claim of condition, nor to Seller's Actual Knowledge does any
condition exist on the Property which would initiate the indemnification of
Buyer hereunder independent of any act or omission of Buyer. Buyer's obligations
under this paragraph shall survive the Close of Escrow and the termination of
this Agreement and shall not be limited by any insurance required under
Paragraph 10.3.
10.3 INSURANCE ON ENTRIES. Buyer shall maintain or cause to be
maintained either Comprehensive General Liability insurance or Commercial
General Liability insurance to cover Buyer's activities on the Property. At
least five (5) days before entering on the Property, Buyer shall deliver to
Seller a
<PAGE>
Certificate of Insurance evidencing compliance with the terms of this paragraph.
The liability insurance policy shall have a combined single limit per occurrence
liability limit of at least $2,000,000.00 for premises liability, bodily injury,
personal injury and property damage, shall be primary and noncontributing with
any insurance which may be carried by Seller, and shall name the Seller Parties
as additional insured, and shall be written by companies rated A+XII or better
in "Best's Insurance Guide" and authorized to do business in the State of New
Jersey. The insurance policy shall be maintained and kept in effect by Buyer (or
Buyer's agent), at Buyer's (or Buyer's agent's) sole expense, at all times
during the term of this Agreement. The insurance policy shall provide that it
may not be canceled or modified without at least thirty (30) days prior written
notice to Seller, or until this License is terminated.
11. CONDEMNATION OR CASUALTY.
11.1 CONDEMNATION. If, before the Closing, all or enough of
the Property is taken by eminent domain or condemnation proceedings so that the
balance of the Property (assuming necessary repairs) is not sufficient for
Buyer's intended use for the Property (collectively, a "Taking"), Seller shall
notify Buyer of the event after actual knowledge of the Taking and, in that
event, Buyer shall have the option to either (i) terminate this Agreement as of
the date of the Taking, or (ii) continue with this transaction in accordance
with the terms of this Agreement and without any adjustment in the Purchase
Price, by delivery of written notice of Buyer's election to Seller within ten
(10) days after receipt of Seller's notice. If Seller and Escrow Holder receive
Buyer's election to terminate this Agreement or have not received any notice
from Buyer within the 10-day period, then this Agreement shall terminate, and
the Deposit shall be returned to Buyer, as provided in Paragraph 6.3. If Buyer
elects to continue with this transaction, as provided above, then the
condemnation proceeds shall become the property of Buyer upon Close of Escrow.
11.2 CASUALTY. If, before the Closing, all or any
portion of the Property is damaged by a casualty, the repair of
which are required by such damage shall cost in excess of
$100,000.00 (a "Casualty"), Seller shall notify Buyer of this
event after actual knowledge of the Casualty, and, in this event,
Buyer shall have the option to either (i) terminate this
Agreement as of the date of the Casualty, or (ii) continue with
this transaction in accordance with the terms of this Agreement
and without any adjustment in the Purchase Price, by delivery of
written notice of Buyer's election to Seller and Escrow Holder
within ten (10) days after receipt of Seller's notice. If Seller
<PAGE>
and Escrow Holder receive Buyer's election to terminate this Agreement or have
not received any notice from Buyer within the 10-day period, then this Agreement
shall terminate, and the Deposit shall be returned to Buyer, as provided in
Paragraph 6.3. If Buyer elects to continue with this transaction, as provided
above, then the Casualty proceeds shall become the property of Buyer upon Close
of Escrow.
12. LEASING AND MANAGEMENT.
12.1 EXISTING APPROVED NEW LEASE TRANSACTIONS. The new and
pending Lease transactions reflected on the attached Exhibit "H" shall be deemed
approved by Buyer for purposes of this Agreement and Buyer agrees to be
responsible and to pay all New Leasing costs attributable thereto.
12.2 OMITTED.
12.3 LEASING. Seller shall not enter into any new lease or
lease modifications, renewals or extensions ("Lease Transaction(s)"), the terms
of which shall be assumed by Buyer at Closing, without Buyer's consent (not to
be unreasonably withheld) which if given, will cause each such Lease
Transactions to be deemed an "Approved New Lease Transaction" for purposes of
this Agreement. Notwithstanding the terms of this Paragraph 12, Seller shall be
permitted to enter into Lease Transactions with ITT Fluid Technology,
Professional Detailing, Inc., and/or Ocean Garden Products, Inc. without Buyer's
consent subject to Buyer's rights contained in this Agreement.
12.4 BUYER'S CONSENT. Buyer shall approve or disapprove any
Lease Transaction for which consent has been requested, within two (2) business
days of receipt of a summary of the business terms of the Lease Transaction or
the lease for such Lease Transaction itself. Buyer's failure to provide written
notice of its approval or disapproval to Seller within such two (2) business day
period shall be deemed approval, and the subject Lease Transaction shall be
deemed an "Approved New Lease Transaction" for purposes of this Agreement.
12.5 PAYMENT OF NEW LEASING COSTS. All lease commissions,
legal fees for negotiating the documents involved in a Lease Transaction, tenant
improvement costs and other costs incurred or to be incurred, either before or
after the Closing, in connection with an Approved New Lease Transaction ("New
Leasing Costs") shall be the responsibility of and satisfied by the Buyer.
Notwithstanding the foregoing, Seller shall pay the New Leasing Costs accrued
and payable as of the closing date for ITT Fluid Technology, Ocean Garden
Products, and for the initial
<PAGE>
lease with Professional Detailing, Inc., but not the additional 5,000 square
feet leased by Professional Detailing, Inc. which shall be the responsibility of
Buyer. Buyer shall pay Seller at Closing an amount equal to all Leasing Costs
which are Buyer's responsibility which were actually paid by Seller prior to the
Closing. Also, Buyer shall assume (and if requested by Seller have added to the
General Assignment) all agreements, contracts and commitments, including,
without limitation, brokerage agreements and tenant improvement contracts
relating to the Approved New Lease Transactions. The terms of this Paragraph 12
are not intended to affect Buyer's obligation to assume Leasing Costs arising
from the existing Leases.
12.6 MANAGEMENT. From and after the date of this Agreement and
until the date of Closing hereunder Seller shall operate and maintain the
Property in the same manner as Seller shall have operated the same immediately
prior to the execution of this Agreement except that Seller shall not be
required to make any capital expenditures in connection with the Property.
13. CONTRACTS, WARRANTIES AND GUARANTEES. In connection with the purchase,
Seller shall assign to Buyer, and Buyer shall assume, "AS IS" at Close of
Escrow, without representation or warranty, all of Seller's rights, liabilities
and obligations, if any, to the contracts listed on Exhibit "2" to the General
Assignment ("Contracts") and all warranties and guarantees to the extent they
relate to the Property ("Warranties and Guarantees"). Such assignment shall be
in the form of the General Assignment attached as Exhibit "F" to this Agreement.
14. LIMITATION ON REMEDIES AGAINST SELLER AND
INDEMNIFICATION.
14.1 BREACH OF THIS AGREEMENT. IF CLOSE OF ESCROW AND THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT DO NOT OCCUR BY
REASON OF ANY DEFAULT OR BREACH BY SELLER IN ITS OBLIGATION TO TRANSFER THE
PROPERTY TO BUYER, BUYER SHALL BE ENTITLED TO EITHER ONE OF THE FOLLOWING AS ITS
SOLE AND EXCLUSIVE REMEDY FOR SUCH DEFAULT OR BREACH BY SELLER: (A) SPECIFIC
PERFORMANCE OF SELLER'S OBLIGATIONS UNDER THIS AGREEMENT (EXCLUDING ANY RIGHT TO
MONETARY DAMAGES) AND LEGAL FEES IN CONNECTION THEREWITH OR (B) THE RETURN OF
THE DEPOSIT AND ANY INTEREST ACTUALLY ACCRUED THEREON. THE ABOVE DESCRIBED
REMEDIES SHALL BE BUYER'S SOLE AND EXCLUSIVE REMEDIES FOR SUCH BREACH OR
DEFAULT, AND BUYER SHALL NOT BE ENTITLED OR HAVE ANY RIGHT TO RECEIVE ANY OTHER
TYPE OF RELIEF, LEGAL OR EQUITABLE. IF BUYER FAILS TO FILE AN ACTION FOR
SPECIFIC PERFORMANCE WITHIN THIRTY (30) DAYS OF THE OUTSIDE DATE, BUYER SHALL BE
DEEMED TO HAVE IRREVOCABLY ELECTED REMEDY (B) ABOVE AND BE DEEMED TO HAVE
<PAGE>
IRREVOCABLY WAIVED ALL RIGHTS TO SPECIFIC PERFORMANCE.
------------------
-----------------
SELLER'S INITIALS
BUYER'S INITIALS
14.2 RELEASE. BUYER ON BEHALF OF ITSELF AND ALL OF ITS
OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, REPRESENTATIVES AND AFFILIATED
ENTITIES (COLLECTIVELY, "RELEASORS") HEREBY IRREVOCABLY AND FOREVER RELEASE,
DISCHARGE AND ACQUIT THE SELLER PARTIES OF AND FROM ANY AND ALL CLAIMS,
LIABILITIES, SUITS, DEMANDS, OBLIGATIONS, DUTIES, ACTS, OMISSIONS, CAUSES OF
ACTION, DAMAGES, LOSSES AND INDEMNIFICATION OBLIGATIONS OF EVERY TYPE, KIND,
NATURE, DESCRIPTION OR CHARACTER WHATSOEVER, AND IRRESPECTIVE OF HOW, WHY, OR BY
WHAT REASON OR FACTS, NOW EXISTING OR HEREAFTER ARISING, OR WHICH COULD, MIGHT,
OR MAY BE CLAIMED TO EXIST, WHETHER KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED,
WHICH IN ANY WAY ARISE OUT OF, ARE CONNECTED WITH, PERTAIN TO OR RELATE TO,
EITHER DIRECTLY OR INDIRECTLY: (1) THE PROPERTY, INCLUDING WITHOUT LIMITATION,
THE PHYSICAL, ENVIRONMENTAL, TITLE, LEASING, AND FINANCIAL CONDITION OF THE
PROPERTY AND PROPERTY OPERATIONS, (2) THE PAST, PRESENT OR FUTURE PRESENCE OR
EXISTENCE OF ANY HAZARDOUS OR TOXIC WASTE, SUBSTANCES OR MATERIALS OF ANY KIND
OR NATURE ("HAZARDOUS MATERIALS") ON, UNDER OR ABOUT THE PROPERTY (INCLUDING,
WITHOUT LIMITATION, THE BUILDINGS) OR SURROUNDING LAND, (3) THE PAST, PRESENT OR
FUTURE VIOLATIONS OF ANY RULES, REGULATIONS OR LAWS, NOW OR HEREAFTER ENACTED,
REGULATING OR GOVERNING THE USE, HANDLING, STORAGE OR DISPOSAL OF HAZARDOUS
MATERIALS (COLLECTIVELY, "ENVIRONMENTAL LAWS"), INCLUDING, WITHOUT LIMITATION,
ANY AND ALL RIGHTS BUYER MAY NOW OR HEREAFTER HAVE TO SEEK CONTRIBUTIONS FROM
THE SELLER PARTIES UNDER SECTION 113(F)(I) OF THE COMPREHENSIVE ENVIRONMENTAL
RESPONSE COMPENSATION AND LIABILITY ACT OF 1980 ("CERCLA"), AS AMENDED BY THE
SUPERFUND AMENDMENTS AND REAUTHORIZATION ACT OF 1986 ("SARA") (42 U.S.C.
ss.9613), AS THE SAME MAY BE FURTHER AMENDED OR REPLACED BY ANY SIMILAR LAW,
RULE OR REGULATION; AND (4) ANY AND ALL LIABILITY WHETHER KNOWN OR UNKNOWN NOW
OR HEREAFTER EXISTING WITH RESPECT TO THE PROPERTY UNDER SECTION 107 OF CERCLA
(42 U.S.C. ss.9607). THE FOREGOING WAIVER AND RELEASE SHALL NOT EXTEND OR APPLY
TO THE FOLLOWING: (A) ANY BREACH BY SELLER OF SELLER'S REPRESENTATIONS AND
WARRANTIES SET FORTH IN PARAGRAPH 9.1, (B) ANY CLAIMS BROUGHT AGAINST BUYER BY
THIRD PARTIES (UNAFFILIATED TO BUYER) FOR PERSONAL INJURY, WHICH CLAIMS ACCRUED
OR AROSE PRIOR TO THE CLOSING, AND (C) ANY CLAIMS BROUGHT AGAINST BUYER BY THIRD
PARTIES (UNAFFILIATED TO BUYER) ARISING FROM SELLER'S BREACH OF CONTRACT OR
SELLER'S CONDUCT NOT INVOLVING THE PHYSICAL OR ENVIRONMENTAL CONDITION OF THE
PROPERTY.
<PAGE>
------------------
-----------------
SELLER'S INITIALS
BUYER'S INITIALS
THE TERMS OF PARAGRAPH 14.1 AND 14.2 SHALL SURVIVE THE CLOSE OF ESCROW AND
RECORDATION OF THE DEED.
14.3 NOTICE OF POTENTIAL CLAIM. To the extent that Jim
Patterson, as Asset Manager for Seller, receives written notice of an actual
claim regarding the Property for which Buyer is alleged to have liability,
Seller shall forward a copy of such written notice to Buyer. The obligations set
forth in this Paragraph 14.3 shall survive the Closing for one (1) year.
15. GENERAL PROVISIONS.
15.1 ASSIGNMENT.
(a) This Agreement shall be binding upon and
shall inure to the benefit of Buyer and Seller and their respective successors
and permitted assigns.
(b) Except for an assignment to an affiliate of
Buyer, a majority of interest in which is owned or controlled by Buyer, Buyer
may only assign this Agreement and any interest or
<PAGE>
right under this Agreement or under the Escrow after obtaining Seller's prior
written consent, in Seller's sole and absolute discretion. Any assignment shall
not relieve Buyer of its obligations under this Agreement.
15.2 ATTORNEYS' FEES AND/OR COSTS. In any action or proceeding
between the parties to enforce or interpret any of the terms or provisions of
this Agreement, the prevailing party in the action or proceeding shall be
entitled to recover from the non-prevailing party, in addition to damages,
injunctive relief or other relief, its reasonable costs and expenses, including,
without limitation, costs and reasonable attorneys' fees, both at trial and on
appeal.
15.3 NOTICES AND APPROVALS. All notices, approvals or other
communications (collectively, "Notices") required or permitted under this
Agreement shall be in writing, and shall be sent by one or more of the
following: (i) personally delivered, (ii) sent by overnight mail (Federal
Express or the like), (iii) sent by registered or certified mail, postage
prepaid, return receipt requested, or (iv) sent by facsimile (provided that a
follow-up hard copy of the facsimile is sent the same day by one of the other
above methods). Notices shall be deemed received upon the earlier of (i) if
personally delivered, the day of delivery, to the address of the person to
receive such Notice, (ii) if sent by overnight mail, the first business day
following its deposit in such overnight facility, (iii) if mailed, two (2)
business days after the date of posting by the United State Post Office, or (iv)
if by facsimile, the date of transmission. If multiple methods of providing
notice have been used, the earlier date of deemed notice shall govern. In order
to be effective, all Notices must be directed to the appropriate parties as
follows.
To Seller:
IB Brell, L.P.
c/o Koll Bren Realty Advisors, Inc.
125 Summer Street, Suite 1640
Boston, Massachusetts 02110
Attention: James H. Patterson, II, Vice President
Telephone: (617) 345-0600
Facsimile: (617) 345-9200
With copies to:
James Chiboucas, Esq.
4343 Von Karman Avenue
Newport Beach, California 92660
Telephone: (714) 833-3030, ext. 398
Facsimile: (714) 852-9472
and
Scarinci & Hollenbeck
500 Plaza Drive, P.O. Box 3189
Secaucus, New Jersey 07096-3189
Attention: Victor E. Kinon, Esq.
Telephone: (201) 392-8900
Facsimile: (201) 348-3877
To Buyer:
Mack-Cali Realty, L.P. a Delaware Limited Partnership
11 Commerce Drive
Cranford, New Jersey 07016
Attention: Timothy M. Jones, EVP
Telephone: (908) 272-8000
Facsimile: (908) 272-6755
<PAGE>
and
Mack-Cali Realty Acquisition Corporation
11 Commerce Drive
Cranford, New Jersey 07016
Attention: Roger W. Thomas, Executive Vice President
Telephone: (908) 272-8000
Facsimile: (908) 272-6755
With a copy to:
Andrew Levine, Esq.
Pryor Cashman Sherman & Flynn
410 Park Avenue
New York, New York 10023
Telephone: (212) 326-0414
Telecopier: (212) 326-0806
To Escrow Holder:
Chicago Title Company
16969 Von Karman Avenue
Irvine, California 92606
Attention: Joy Eaton
Telephone: (714) 263-0123
Facsimile: (714) 263-0356
15.4 CONTROLLING LAW. This Agreement shall be deemed to be
entered into within Hudson County and shall be construed under the laws of the
State of New Jersey in effect at the time of the signing of this Agreement.
15.5 TITLES AND CAPTION. Titles and captions are for
<PAGE>
convenience only and shall not constitute a portion of this Agreement.
References to Paragraph numbers are to Paragraphs in this Agreement, unless
expressly stated otherwise.
15.6 INTERPRETATION. As used in this Agreement, mas culine,
feminine or neuter gender and the singular or plural number shall each be deemed
to include the others where and when the context so dictates. The word
"including" shall be construed as if followed by the words "without limitation."
If a dispute arises over the interpretation or construction of any provision,
term or word contained in this Agreement, this document shall be interpreted and
construed neutrally, and not against either Buyer or Seller.
15.7 NO WAIVER. A waiver by either party of a breach of any of
the covenants, conditions or obligations under this Agreement to be performed by
the other party shall not be con strued as a waiver of any succeeding breach of
the same or other covenants, conditions or obligations of this Agreement.
15.8 MODIFICATIONS. Any alteration, change or modifi cation of
or to this Agreement, in order to become effective, shall be made in writing and
in each instance signed on behalf of each party.
15.9 SEVERABILITY. If any term or provision of this Agreement,
or its application to any party or set of circum stances, shall be held, to any
extent, invalid or unenforceable, the remainder of this Agreement, or the
application of the term or provision to persons or circumstances other than
those as to whom or which it is held invalid or unenforceable, shall not be
affected, and each shall be valid and enforceable to the fullest extent
permitted by law.
15.10 INTEGRATION OF PRIOR AGREEMENTS AND UNDERSTANDINGS. This
Agreement contains the entire understanding between the parties relating to the
transaction contemplated by this Agreement. All prior or contemporaneous
agreements, understandings, representations, warranties and statements, whether
oral or written, expressed or implied, are superseded in their entirety by this
Agreement, and are of no force or effect, in whole or in part.
15.11 NOT AN OFFER. Seller's delivery of unsigned copies of
this Agreement is solely for the purposes of review by Buyer, and neither the
delivery nor any prior communications between Buyer and Seller, whether oral or
written, shall in any way be construed as an offer by Seller, nor in any way
imply that
<PAGE>
Seller is under any obligation to enter the transaction which is the subject of
this Agreement. The signing of this Agreement by Buyer constitutes an offer
which shall not be deemed accepted by Seller unless and until Seller has signed
this Agreement and delivered a duplicate original to Buyer.
15.12 TIME OF ESSENCE. Time is expressly made of the
essence as to the performance of each and every obligation and
condition of this Agreement.
15.13 POSSESSION OF PROPERTY. Buyer shall be entitled
to possession of the Property only after the Closing and not
before.
15.14 COUNTERPARTS. This Agreement may be signed in multiple
counterparts which shall, when signed by all parties constitute a binding
agreement.
15.15 EXHIBITS INCORPORATED BY REFERENCE. All exhibits
attached to this Agreement are incorporated in this Agreement by
this reference.
15.16 COMPUTATION OF TIME. The time in which any act is to be
done under this Agreement is computed by excluding the first day (such as the
Effective Date), and including the last day, unless the last day is a holiday or
Saturday or Sunday, and then that day is also excluded. All references to time
shall be deemed to refer to Eastern Standard Time.
15.17 JOINT AND SEVERAL LIABILITY. If Buyer is composed of
more than one individual or entity, all obligations and liabilities of Buyer
under this Agreement shall be joint and several as to each of those individuals
or entities who compose Buyer.
15.18 BUYER'S WORK PRODUCT CONCERNING THE PROPERTY. If
for any reason Buyer fails to purchase the Property, and as a
condition to the return of the Deposit to Buyer (if Buyer is so
entitled), Buyer shall promptly deliver to Seller, at no cost or
expense to Seller, all test results, studies, plans, or other
materials prepared by Buyer, or its agents, employees or
contractors, relating to the physical, environmental,
engineering, or survey condition of the Property ("Work
Product"), except to the extent protected by the attorney-client
or attorney work product privileges. Also, Buyer will not be
required to deliver any Work Product to Seller, the delivery of
which would result in Buyer's violation of any terms of its
written agreement with the preparer of the Work Product provided,
<PAGE>
that Buyer shall use all reasonable efforts to enter into agreements with
preparers of Work Product which do not prohibit the delivery of the Work Product
to Seller. Following delivery, Seller may use this Work Product for any purpose.
However, the delivery of any Work Product to Seller will be without any
representation or warranty by Buyer as to the accuracy and validity of the
content, information, or conclusions contained in the Work Product.
15.19 NO OBLIGATIONS TO THIRD PARTIES. The execution and
delivery of this Agreement shall not be deemed to confer any rights upon, nor
obligate any of the parties to this Agreement to, any person or entity other
than Seller and Buyer. There are not any third party beneficiaries to this
Agreement, including, without limitation, the Broker.
15.20 SURVIVAL OF COVENANTS. Except as otherwise limited
pursuant to the terms of the Agreement, the covenants, agreements, indemnitees,
representations and warranties of Buyer and Seller shall survive the Close of
Escrow and shall not merge into the Deed.
"SELLER"
IB Brell, L.P., a Delaware limited partnership
By: KB Investors V, a California general
partnership, general partner
By: KE Holdings, L.P., a Washington limited
partnership, general partner
By: Koll Investment Management, Inc.,
a California corporation, general partner
By: ____________________
Charles J. Schreiber, Jr.,
Executive Vice President
<PAGE>
"BUYER"
Mack-Cali Realty, L.P. a Delaware Limited Partnership
By: Mack-Cali Realty Corporation
a Maryland Corporation
By:
Name:
Title:
EXHIBIT NO. 10.139
FIRST AMENDMENT TO PURCHASE AGREEMENT FOR REAL PROPERTY
THIS FIRST AMENDMENT TO PURCHASE AGREEMENT FOR REAL PROPERTY
entered into the 23rd day of February, 1998 by and between IB
BRELL, L.P. ("Seller") and MACK-CALI REALTY, L.P. ("Buyer").
WITNESSETH THAT:
WHEREAS, Seller and Buyer have entered in that certain Purchase Agreement
for Real Property dated February 4, 1998 ("the Agreement") for the sale by
Seller and acquisition by Buyer of certain real property and improvements
located at 10 Mountainview
Road, Upper Saddle River, New Jersey; and
WHEREAS, Seller and Buyer desire to amend the said Agreement as herein
specifically set forth.
NOW THEREFORE, Seller and Buyer hereby agree to amend the Agreement as
follows:
1. Section 2.4 through 2.7 are hereby deleted and the following is hereby
inserted in lieu thereof:
"2.4 EFFECTIVE DATE. The effective date of this
Agreement is February 23, 1998. ("Effective Date").
2.5 OUTSIDE DATE. The last day that Closing may
occur shall be February 25, 1998 at 5:00 p.m.
2.6 TITLE APPROVAL PERIOD. The "Title Approval
<PAGE>
Period" shall end on February 24, 1998 at 5:00 p.m.
2.7 FEASIBILITY PERIOD. The "Feasibility Period"
shall end on February 24, 1998 at 5:00 p.m."
2. The date "February 9, 1998" appearing in the second line of Section 4.4
is hereby deleted and the date "February 24, 1998" is hereby inserted in lieu
thereof.
3. The following language is added at the end of subsection 3.23 on page 4.
"Notwithstanding the foregoing, either Seller or Buyer shall have the right
at such time as the within transaction shall close to make a public announcement
or set forth on Exhibit "N" attached hereto.
4. Exhibit "N" as attached hereto is hereby added to the Lease.
5. Notwithstanding the language of Section 7.5 Seller shall pay the realty
transfer fee for the Property and Buyer shall pay all charges for the title
insurance, commitments, and premiums (Standard Premiums, extended endorsements
and coverages).
6. Except as herein specifically modified, all of the provisions of the
original Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to
Purchase Agreement for Real Property the date and
<PAGE>
year first above written.
"BUYER"
Mack-Cali Realty, L.P. a Delaware Limited Partnership
By: Mack-Cali Realty, Corporation
a Maryland Corporation
By: _______________________________________
---------------------------------------
(Print Name)
(Title)
EXHIBIT NO. 10.140
FIRST AMENDMENT TO AGREEMENT OF PURCHASE AND SALE
CIELO CENTER, AUSTIN, TEXAS
This FIRST AMENDMENT TO AGREEMENT OF PURCHASE AND SALE (this "Amendment") is
entered into as of March 12, 1998, by and between JMB Group Trust III, an
Illinois common law group trust ("Seller"), and Mack-Cali Realty Acquisition
Corp., a Delaware
corporation ("Purchaser").
RECITALS
E. Seller and Purchaser entered into that certain Agreement of Purchase and
Sale dated January 29, 1998 (the "Purchase Agreement") with respect to certain
real property commonly known as Cielo Center.
F. The Purchase Agreement was terminated February 26, 1998.
G. Seller and Purchaser desire to amend the Purchase Agreement to (i)
reinstate the Purchase Agreement, (ii) reflect changes desired as a result of
the delayed delivery of the Updated Survey, (iii) allocate responsibility for
certain outstanding tenant improvement obligations and (iv) address such other
matters as are set forth in this Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller and Purchaser hereby agree as follows:
1. Definitions. All capitalized terms used in this
Amendment but not defined herein shall have the meanings assigned
to them in the Purchase Agreement.
2. Reinstatement of Purchase Agreement. Notwithstanding the termination of
the Purchase Agreement on February 26, 1998, by Purchaser, Purchaser and Seller
hereby agree that the Purchase Agreement is reinstated and is in full force and
effect, as amended by this Amendment.
3. Purchase Price. The Purchase Price shall be Thirty-Seven Million and
no/100 Dollars ($37,000,000.00).
4. Closing Date.
(a) The Closing Date shall be March 12, 1998, unless it is
extended in accordance with this Section 4.
(b) If the Updated Survey has not been received by Purchaser
by 5:00 p.m. C.S.T. on March 9, 1998, the Closing Date shall be extended one
business day for each business day of delay of such receipt beyond March 9,
1998; provided, however, that if Purchaser makes any objections to the
Updated Survey in accordance with the Purchase Agreement and Section 5 of
this Amendment, the Closing Date shall be further extended until such
objections have been cured unless Seller elects not to cure such objections.
If Seller elects not to cure such objections, Purchaser shall have the
remedies set forth in Section 5 of this Amendment.
(c) Nothing in this Section 4 shall limit Purchaser's rights
as set forth in Section 5 below.
5. Updated Survey.
(a) The Due Diligence Period is hereby extended to 5:00 p.m.
C.S.T. on the date that is three business days after the receipt by
Purchaser of the Updated Survey. During the extension period granted
hereunder, Purchaser's right to conduct Due Diligence shall be limited to
reviewing and making objections to the Updated Survey in accordance with the
Purchase Agreement and this Section 5; provided, however, that nothing in
this Amendment shall limit Purchaser's rights and remedies under Section 3.3
of the Purchase Agreement with respect to Seller's obligation to provide an
updated Title Commitment that satisfies all of the objections made to the
Title Commitment during the Title Review Period.
(b) If Purchaser has not received the Updated Survey by 5:00
p.m. C.S.T. on March 31, 1998, Purchaser may elect to terminate the Purchase
Agreement, in which event neither party shall have any further obligations
to the other party except for the Surviving Obligations.
(c) If Purchaser makes any objections to the Updated Survey
(with respect to matters not shown on the Existing Survey) during the Due
Diligence Period, as extended by this Amendment, and the objections have not
been cured by Seller on or before the Closing Date, Purchaser may waive such
objections
<PAGE>
and consummate the transaction contemplated by the Purchase Agreement, as
amended hereby, or may terminate the Purchase Agreement, in which event
neither party shall have any further obligations to the other party except
for the Surviving Obligations.
(d) Exhibit C to the Purchase Agreement shall be deleted in
its entirety and replaced with the following:
The Updated Survey shall be a Category 1A, Condition II, Texas
Land Title Survey as defined by the Manual of Practice for
Land Surveying in the State of Texas published by the Texas
Society of Professional Surveyors and shall additionally
include a vicinity map, the flood zone designation,
identification of setback and height restrictions of record or
disclosed by applicable zoning ordinance, the exterior
dimensions of all buildings at ground level, the number of all
parking spaces (both regular and handicapped) and the striping
of all parking spaces in the surface parking lot, and the
location of all visible utilities serving the Property.
(e) Exhibit D to the Purchase Agreement shall be deleted in
its entirety and replaced with the following:
The Updated Survey shall have (i) the original signature and
original seal of the surveyor and (ii) a certification, in a
form reasonably satisfactory to Purchaser, to Mack-Cali Realty
Acquisition Corp. and its successors and assigns, Mack-Cali
Texas Property L.P., JMB Group Trust III, Near North National
Title Corporation, and First American Title Insurance Company.
6. Tenant Improvement Obligations.
(a) The IT Corporation TI Obligation (as defined below) shall
be withheld from the Purchase Price at Closing unless Seller provides
evidence satisfactory to Purchaser that the IT Corporation TI Obligation has
been paid prior to Closing. If the IT Corporation TI Obligation is withheld
from the Purchase Price at Closing, Purchaser shall assume the obligation
for payment of the IT Corporation TI Obligation. For purposes of this
Amendment, "IT Corporation TI Obligation" means the obligation of the
landlord under the Office Lease between IT Corporation and JMB Group Trust
III, dated March 8,
<PAGE>
1991, as amended, to pay IT Corporation $35,945.58 for recarpetting and
repainting, less the $4,112.00 expended by Seller, for the benefit of IT
Corporation, on work done to comply with the Americans with Disabilities
Act.
(b) The Tejas Securities TI Obligation (as defined below)
shall not be paid by Seller prior to Closing or withheld from the Purchase
Price at Closing but shall become the obligation of Purchaser upon Closing.
For purposes of this Amendment, "Tejas Securities TI Obligation" means the
obligation of the landlord under the Office Lease between Tejas Securities
Group, Inc. ("Tejas") and JMB Group Trust III, dated April 24, 1995, as
amended, to pay Tejas $12,996.00 for tenant improvements.
7. Assignment. The last sentence of Section 16 of the
Purchase Agreement shall be deleted in its entirety and replaced
with the following:
Seller's consent to any such assignment shall be conditioned
upon Seller's receipt of the following not less than one (1)
business day prior to the Closing Date: (i) a duly executed
express assumption of all of the duties and obligations of
Purchaser by the proposed assignee in the form of Exhibit B-1
attached hereto, and (ii) an ERISA certificate, in the form
attached hereto as Exhibit B and the content of which is
satisfactory to Seller.
8. Counterparts. This Amendment may be executed in any number of
counterparts, all of which taken together will constitute one and the same
Amendment, and the signature page of any counterpart may be removed therefrom
and attached to any other counterpart. This Amendment shall be legally binding
upon receipt by each party of the facsimile or the original signature of the
other party.
9. No Further Amendment. Except as amended by this
Amendment, all terms of the Purchase Agreement remain in full
force and effect.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
<PAGE>
IN WITNESS WHEREOF, Seller and Purchaser have caused this Amendment to be
duly executed as of the date first set forth above.
JMB GROUP TRUST III, an Illinois
common law group trust
By:
Heitman Capital Management
Corporation, its attorney-in-fact
By:
Name:
Title:
MACK-CALI REALTY ACQUISITION CORP., a
Delaware corporation
By:
Name:
Title:
EXHIBIT NO. 10.141
AGREEMENT OF PURCHASE AND SALE
CIELO CENTER, AUSTIN, TEXAS
THIS AGREEMENT OF PURCHASE AND SALE is made and entered into this 27th
day of January, 1998 by and between JMB Group Trust III, an Illinois common law
group trust ("Seller"), having an address of c/o Heitman Capital Management
Corporation, 180 North LaSalle Street, Suite 3600, Chicago, Illinois 60601-6789,
Attention: Howard J. Edelman; facsimile number (312) 541-6738, and Mack-Cali
Realty Acquisition Corp., a Delaware corporation ("Purchaser"), having an
address of 3030 LBJ Freeway, Suite 1500, Dallas, Texas 75234, Attention: Darryl
Freling; facsimile number (972) 888-8029.
RECITALS
Seller is the owner of a parcel of real estate in Austin, Texas,
legally described on Exhibit A attached hereto and all buildings thereon (the
"Real Property", which together with any and all appurtenances thereto and
Seller's right, title and interest in and to (a) all streets, roads, alleys,
easements, rights of way, rights of ingress and egress, and vehicle parking
rights abutting, adjacent, used in connection with or pertaining to the Real
Property or improvements thereon, (b) strips or gores between the Real Property
and abutting or adjacent properties, (c) all water and water rights, and mineral
interests pertaining to the Real Property, (d) any personal property to be
conveyed pursuant hereto and (e) the following to the extent the following
pertain to the Real Property and are assignable: (i) all plans, specifications
and drawings, (ii) existing environmental and engineering reports, (iii) all
permits, licenses and certificates, (iv) all Service Contracts and Leases to be
assigned to Purchaser, and (v) all trade names and trademarks, including the
right to use the name Cielo Center, are collectively referred to as the
"Property"), commonly known as the Cielo Center. The Property includes three six
story office buildings.
Subject to and on the terms and provisions of and for the
considerations set forth in this Agreement, Seller has agreed to sell, and
Purchaser has agreed to buy, the Property.
NOW, THEREFORE, the parties hereto hereby agree as follows:
<PAGE>
H. Definitions. As used in this Agreement, the following terms have the
following meanings:
Closing Date. As agreed in writing between Seller and
Purchaser but no later than ten days after the expiration of
the Due Diligence Period.
Due Diligence Period. The period commencing on December 16,
1997 and ending at 5:00 p.m. (C.S.T.) on February 26, 1998.
Escrow Company. Near North National Title Corporation.
Title Company. Near North National Title Corporation, as
agent for First American Title Insurance Company or Ticor
Title Insurance Company.
I. Sale; Purchase Price.
1. Subject to the terms and provisions hereof, Seller agrees to sell
and convey to Purchaser, and Purchaser agrees to purchase from Seller the
Property.
2. The total purchase price (hereinafter called the "Purchase Price")
to be paid by Purchaser to Seller for the Property shall be Thirty-Nine Million
Five Hundred Thousand and no/100 Dollars ($39,500,000.00). The Purchase Price
shall be
payable in the following manner:
(a) Earnest Money. Purchaser shall, within two
(2) business days after the execution and delivery of this Agreement by
Purchaser and Seller, deposit with the Escrow Company, as escrow agent, the
amount of One Million and 00/100 Dollars ($1,000,000.00) (hereinafter called the
"Earnest Money") which Earnest Money shall be in the form of a wire transfer (in
accordance with Wiring Instructions attached to Exhibit B) of immediately
available United States of America funds. The Earnest Money shall become
nonrefundable at 5:00 p.m. (C.S.T.) on the last day of the Due Diligence Period
unless this Agreement is terminated prior to the expiration of the Due Diligence
Period. The Earnest Money shall be held and disbursed by the Escrow Company
acting as escrow agent pursuant to the Earnest Money Escrow Agreement in the
form of Exhibit B attached hereto which the parties have executed simultaneously
with this Agreement. The Earnest Money shall be invested in a federally issued
or insured interest bearing instrument with any interest accruing thereon being
deemed part of the Earnest Money and shall be paid to the party to which the
Earnest Money is paid pursuant to the provisions hereof. If the sale hereunder
is consummated in
<PAGE>
accordance with the terms hereof, the Earnest Money and any interest thereon
shall be applied to the Purchase Price to be paid by Purchaser at the Closing.
In the event of a default hereunder by Purchaser or Seller, the Earnest Money
shall be applied as provided herein.
(b) Cash Balance. Purchaser shall pay the balance
of the Purchase Price, subject to the prorations described in Section 5 below,
in cash (the "Cash Balance") by wire transfer of immediately available United
States of America funds to the Title Company for payment to Seller, in
accordance with the terms and conditions of this Agreement no later than 11:00
am C.S.T. on the Closing Date.
J. Conditions Precedent. In the event any of the conditions set forth in
Sections 3.2(b), 3.3, 3.4 or 4.2 below shall not have been fulfilled, accepted
or deemed accepted or waived as provided herein on or before the applicable
dates specified herein, Purchaser shall have the right to terminate this
Agreement by giving written notice thereof to Seller on or before the respective
dates specified herein, and thereupon all Earnest Money less One Hundred Dollars
($100.00) to be retained by Seller as consideration for this Agreement ("Seller
Retention") shall be refunded to Purchaser and neither party shall have any
further rights or obligations hereunder, except for the Surviving Obligations
(as hereinafter defined).
1. Seller's Deliveries. Seller has delivered or made
available to Purchaser true and complete copies of the following
items relating to the Property which are in Seller's possession:
(a) all leases, occupancy agreements and
amendments thereto which are listed on Schedule 1, and referenced
in Section 6.6 (the "Leases");
(b) all service contracts, equipment leases and
other agreements which are listed on Schedule 2 ("Service
Contracts");
(c) copies of the real estate tax bills for the
current year and two prior years, if available;
(d) all existing environmental reports and other
environmental documentation, including any Phase I or Phase II environmental
report, any sampling plans, cleanup plans, preliminary assessment plans and
reports, site investigation plans and reports, remedial investigation plans and
reports and any correspondence to or from any governmental authority, and any
<PAGE>
existing structural, soils, engineering or other reports.
(e) the existing owner's title policy;
(f) the existing survey dated September, 1985 (the
"Existing Survey");
(g) annual operating statements for the Property
for the last three calendar years and monthly operating
statements for the months in the current year;
(h) existing plans and specifications;
(i) copies of all Lease Proposals (as defined in
Section 15(b)) presently outstanding;
(j) all operating permits, licenses, certificates
of occupancy and other approvals;
(k) copies of Seller's certificates of insurance
insuring the Property;
(l) the most recent rent roll prepared by Seller
in the ordinary course of its business;
(m) all files pertaining to leasing at the
Property;
(n) copies of any warranties and guaranties still
in effect relating to construction of the Property or pertaining
to building systems, building components and/or personal
property; and
(o) all current files pertaining to maintenance
and operation of the Property since January 1, 1995.
Seller shall provide to Purchaser any documents described in this
Section 3.1 and first coming into Seller's possession or produced by Seller
after the initial delivery and continue to provide the same during the pendency
of this Agreement.
In the event this Agreement terminates for any reason, Purchaser shall
immediately return to Seller all written information delivered by Seller or
Seller's agent(s) to Purchaser or Purchaser's agent(s). The foregoing provision
shall survive termination of this Agreement.
2. Due Diligence. Purchaser and its representatives
<PAGE>
shall be permitted to enter upon the Property at any reasonable time and from
time to time before the Closing Date to examine, inspect and investigate the
Property as well as all records and other documentation provided by Seller or
located at the Property (collectively, "Due Diligence"). The Due Diligence shall
be subject to the terms, conditions and limitations set forth in this Section
3.2.
(a) Purchaser shall have a right to enter upon the
Property for the purpose of conducting its Due Diligence provided that in each
such instance (i) Purchaser notifies Seller of its intent to enter the Property
to conduct its Due Diligence not less than 48 hours prior to such entry; (ii)
the date and approximate time period are scheduled with Seller; and (iii)
Purchaser is in full compliance with the insurance requirements set forth in
Section 3.2(f) hereof. At Seller's election, a representative of Seller shall be
present during any entry by Purchaser or its representatives upon the Property
for conducting its Due Diligence. Purchaser shall take all necessary actions to
insure that neither it nor any of its representatives interfere with the tenants
or ongoing operations occurring at the Property. Purchaser shall not cause or
permit any mechanic liens, materialmen's liens or other liens to be filed
against the Property as a result of its Due Diligence. Subject to the provisions
of Section 6.18, such right of inspection and the exercise of such right shall
not constitute a waiver by Purchaser of any representation, warranty, covenant
or agreement of Seller which might, or should have been disclosed by such
inspection. In addition, Seller shall cooperate with Purchaser in facilitating
its Due Diligence inquiry.
(b) Purchaser shall have through the last day of
the Due Diligence Period in which to conduct its Due Diligence and, in
Purchaser's sole discretion, to determine whether the Property is acceptable to
Purchaser. If during the Due Diligence Period, Purchaser becomes aware of any
problem or defect in the Property or any other aspect of the Property which
Purchaser determines makes the Property unsuitable to Purchaser or if Purchaser
otherwise determines for any reason not to acquire the Property, Purchaser may
terminate this Agreement by giving written notice of termination to Seller on or
before 5:00 p.m. (C.S.T.) on the last day of the Due Diligence Period. If
Purchaser does not timely give notice of termination as aforesaid, Purchaser
shall be deemed to have accepted the Property and this Agreement shall continue
in full force and effect. In the event of such termination, the Earnest Money
less Seller Retention shall be returned to Purchaser and neither party shall
have any further obligations to the other party hereunder,
<PAGE>
except for the Surviving Obligations.
(c) Purchaser shall, at least thirty-one (31) days
prior to the Closing Date, notify Seller in writing requesting termination of
any or all of the Service Contracts, which are noted on Schedule 2 as being
terminable upon thirty (30) days notice, that Purchaser does not elect to
assume. If Purchaser does not timely give notice requesting termination of a
Service Contract, Purchaser shall be deemed to have accepted the assumption of
such Service Contract. Purchaser shall assume all other Service Contracts.
Seller shall terminate effective as of the Closing Date at its sole cost all
Service Contracts which Purchaser elects not to assume in accordance with the
terms hereof.
(d) Purchaser shall have the right to conduct, at
its sole cost and expense, any inspections, studies or tests including, without
limitation, environmental inspections, studies and tests, that Purchaser deems
appropriate in determining the condition of the Property, provided, however,
Purchaser is not permitted to perform any intrusive testing, including, without
limitation, a Phase II environmental assessment or boring, without (i)
submitting to Seller the scope and inspections for such testing; and (ii)
obtaining the prior written consent of Seller which consent shall not be
unreasonably withheld except that Seller may withhold consent to borings into
the ground water in its sole and absolute discretion.
(e) Purchaser agrees and covenants with Seller not
to disclose to any third party (other than lenders, accountants, attorneys and
other professionals and consultants in connection with the transaction
contemplated herein) without Seller's prior written consent, unless Purchaser is
obligated by law, or rule of any stock exchange to make such disclosure, any of
the reports or any other documentation or information obtained by Purchaser
which relates to the Property or Seller in any way, all of which shall be used
by Purchaser and its agents solely in connection with the transaction
contemplated hereby. In the event that this Agreement is terminated, Purchaser
agrees that all such information will be held in strict confidence.
(f) Purchaser agrees to indemnify, defend and hold
Seller and its partners, trustees, beneficiaries, shareholders, members,
managers, advisors and other agents and their respective partners, trustees,
beneficiaries, employees, officers, directors and shareholders (the "Indemnified
Parties") harmless from and against any and all claims, losses, damages, costs
and expenses (including, without limitation, reasonable attorneys' fees and
<PAGE>
court costs) suffered or incurred by any of the Indemnified Parties as a result
of or in connection with any activities of Purchaser (including activities of
any of Purchaser's employees, consultants, contractors or other agents) relating
to the Property, including, without limitation, mechanics' liens, damage to the
Property, injury to persons or property resulting from such activities in
connection therewith, and in the event that the Property is disturbed or altered
in any way as a result of such activities. Purchaser shall promptly restore the
Property to substantially its condition existing prior to the commencement of
such activities which disturb or alter the Property. Notwithstanding any
contrary provision in this Section 3.2(f), in no event shall Purchaser have any
obligation under this Section 3.2(f) if it discovers any environmental
contamination at the Property in connection with its Due Diligence Activities.
Furthermore, Purchaser agrees to maintain and cause any of its representatives
or agents conducting any Due Diligence to maintain and have in effect commercial
general liability insurance with (i) all occurrence coverage, (ii) waiver of
subrogation, and (iii) limits of not less than One Million and 00/100 Dollars
($1,000,000.00) for personal injury, including bodily injury and death, and
property damage. Such insurance shall name the Seller, Heitman Capital
Management Corporation ("HCMC") and Heitman Properties of Texas Ltd. and their
respective partners, trustees, beneficiaries, shareholders, members, employees,
officers and directors as additional insured parties. Purchaser shall deliver to
Seller a copy of the certificate of insurance effectuating the insurance
required hereunder prior to the commencement of such activities which
certificate shall provide that such insurance shall not be terminated or
modified without at least thirty (30) days' prior written notice to Seller.
(g) Purchaser acknowledges and agrees that it
shall have no right to review or inspect any of the following: (i) internal
memoranda, correspondence, analyses, documents or reports prepared by or for
Seller or an affiliate of Seller in connection with (A) this Agreement, (B) the
transaction contemplated by this Agreement, (C) the acquisition of the Property
by Seller (other than environmental, engineering, soils and similar reports) or
(D) any prior or current contemplated reorganization of Seller and certain
affiliated funds, (ii) communications between Seller and HCMC or any of its
affiliates, and (iii) appraisals, assessments or other valuations of the
Property in the possession of Seller or HCMC.
(h) Section 3.2(e) shall survive termination of
this Agreement, but not Closing, and Section 3.2(f) and such
<PAGE>
other designated provisions in this Agreement shall survive Closing or any
termination of this Agreement as specified herein (collectively, the "Surviving
Obligations").
3. Title and Survey. Seller shall, at Seller's sole cost and expense,
obtain and deliver to Purchaser for Purchaser's review a commitment for a
standard Texas owner's policy of title insurance along with a copy of each
instrument listed as an exception thereon (the "Title Commitment") on the Real
Property issued by the Title Company and the Existing Survey. During the Due
Diligence Period, Purchaser shall have the right to request, at its sole cost
and expense, any desired endorsements to the final title policy which are
available, if any, as well as deletion of the survey exception. Purchaser may
elect to receive an update to the Existing Survey (the "Updated Survey") by
notifying Seller of such election in writing within five (5) days after
Purchaser's receipt of the Existing Survey. If Purchaser so elects, Seller
shall, at Purchaser's sole cost and expense, obtain and deliver to Purchaser for
Purchaser's review the Updated Survey. The Updated Survey shall: (i) be made in
accordance with the specifications listed on Exhibit C attached hereto, and (ii)
contain a certification in the form set forth on Exhibit D attached hereto.
Purchaser shall have until the date which is fifteen (15) days after receipt of
the Title Commitment and Existing Survey (such date being referred to as the
"Title Review Date") for examination of Title Commitment and Existing Survey and
the making of any objections thereto, said objections to be made in writing and
delivered to Seller on or before 5:00 p.m. (C.S.T.) on the Title Review Date. If
Purchaser shall fail to make any objections on or before the Title Review Date,
Purchaser shall be deemed to have accepted all exceptions to the Title
Commitment and the form and substance of the Existing Survey and all matters
shown thereon; all such exceptions and matters and any exceptions or matters
caused by or through Purchaser shall be included in the term "Permitted
Exceptions" as used herein. In the event Purchaser elects to receive the Updated
Survey, then Purchaser shall have until the expiration of the Due Diligence
Period for examination of the Updated Survey and the making of objections only
to matters shown thereon that were not shown on the Existing Survey, such
objections to be made in writing and delivered to Seller on or before the
expiration of the Due Diligence Period. If Purchaser shall fail to make any such
objections to the Updated Survey on or before the expiration of the Due
Diligence Period, Purchaser shall be deemed to have accepted the form and
substance of the Updated Survey and all matters shown thereon; all such
exceptions and matters and any exceptions or matters caused by or through the
Purchaser shall be included as Permitted Exceptions. If any objections to (i)
the
<PAGE>
Title Commitment or Existing Survey are made within the Title Review Period, or
(ii) the Updated Survey with respect to matters not shown on the Existing Survey
are made before the expiration of the Due Diligence Period, then Seller shall
have the right, but not the obligation, to cure (by removal, endorsement or
otherwise) such objections on or before the Closing Date; provided, however,
Seller shall be obligated (a) to cause to be released on or before the Closing
Date any monetary liens or security interests created by, through or under
Seller and any ad valorem taxes due and payable on the Property, and (b) to
cause to be released, on or before Closing Date, liens created by, through or
under third parties but in no event will Seller be obligated to expend or incur
any expense or liability for such cure for liens or security interests created
by, through or under third parties in excess of an aggregate of Two Hundred
Thousand Dollars ($200,000), and failure to do so shall be a default for which
the provisions of Section 17(a) shall apply. If the objections which the Seller
has the right but not the obligation to cure are not cured by Seller by the
scheduled Closing Date, then Purchaser may as its only option, elect to either:
(i) waive such objection and consummate the transaction contemplated by this
Agreement; or (ii) terminate this Agreement, in which event the Earnest Money
less Seller Retention shall be returned to Purchaser and neither party shall
have any further obligations to the other party except for the Surviving
Obligations.
4. Tenant Estoppels. Seller shall deliver to Purchaser, no later than
five (5) days prior to the Closing Date, estoppel certificates, in the form of
Exhibit E attached hereto or in the form of estoppel required under such
tenant's lease, from tenants leasing at least ninety percent (90%) of the square
footage of the Property currently leased, which shall include all tenants
leasing 4,000 square feet or more of the Property, and such estoppels shall not
disclose any facts objectionable to Purchaser in its reasonable opinion.
K. Closing; Conditions; Deliveries.
1. Time, Place and Manner of Closing. The Closing shall be held on the
Closing Date in the offices of the Title Company or at any location mutually
acceptable to the parties.
2. Condition to Parties' Obligation to Close. In addition to all other
conditions set forth herein, the obligation of Seller, on the one hand, and
Purchaser, on the other hand, to consummate the transaction contemplated
hereunder shall be contingent upon the following:
<PAGE>
(a) The other party's representations and
warranties contained herein shall be true and correct in all
material respects as of the date of this Agreement and the
Closing Date;
(b) As of the Closing Date, the other party shall
have performed its obligations hereunder in all material respects
and all deliveries to be made at Closing have been tendered;
(c) As of the Closing Date, no material litigation
(other than litigation listed on the original Schedule 3 hereto) shall be
pending affecting the Property, and there shall exist no pending action, suit or
proceeding with respect to the other party before or by any court or
administrative agency which seeks to restrain or prohibit, or to obtain damages
or a discovery order with respect to, this Agreement or the consummation of the
transactions contemplated hereby;
(d) Simultaneously with execution of this
Agreement, Purchaser shall have delivered to Seller a fully executed original
ERISA certificate in the form of Exhibit F attached hereto; and
(e) Seller shall promptly notify Purchaser of, and
promptly deliver to Purchaser, a certified true and complete copy of any written
notice Seller may receive, on or before the Closing Date, from any governmental
authority, concerning a violation of Environmental Laws or a release, discharge,
spill, emission or leak of Hazardous Materials on, under, at, emanating from or
affecting the Property.
3. Deliveries. At Closing each party shall execute and
deliver to the other and/or the Title Company the following
documents:
(a) Seller shall deliver to Purchaser and/or the
Title Company:
(i) a special warranty deed (the "Deed") to the
Property in recordable form, duly executed by Seller and acknowledged and in
substantially the same form as set forth in Exhibit G attached hereto, conveying
to Purchaser title to the Real Property, subject to the Permitted Exceptions;
(ii) a bill of sale duly executed by Seller and
in substantially the same form as set forth in Exhibit H attached hereto,
conveying to Purchaser title to all personal property owned by Seller and
located at or used in connection with the
<PAGE>
operation of the Real Property, if any;
(iii) an assignment to Purchaser of the
Leases duly executed by Seller and in substantially the same form as set forth
in Exhibit I attached hereto;
(iv) an assignment to Purchaser of the Service
Contracts being assumed hereunder, and all licenses, permits, plans,
specifications, trademarks and trade names affecting the Property (to the extent
the foregoing are freely assignable) duly executed by Seller and in
substantially the same form as set forth in Exhibit J attached hereto;
(v) a non-foreign transferor certification
pursuant to Section 1445 of the Internal Revenue Code and any similar provisions
of applicable state law, in substantially the same form as set forth on Exhibit
K attached hereto (the "Affidavit");
(vi) a certified resolution of Seller certifying
that Seller has the legal power, right and authority to
consummate the sale of the Property;
(vii) a Uniform Commercial Code search dated
within seven (7) business days of Closing showing no liens; and
(viii) originals of Leases and Service
Contracts being assumed hereunder.
(b) Purchaser shall deliver to Seller or the Title
Company:
(i) the Cash Balance, by wire transfer, as
provided in Section 2.2 hereof;
(ii) an assumption duly executed by the Purchaser
of the assignments described in Sections 4.3(a)(iii) and (iv);
and
(iii) a certified resolution of Purchaser
certifying that Purchaser has the legal power, right and authority to consummate
the purchase of the Property.
(c) Seller and Purchaser shall jointly deliver to the Title
Company:
(i) A closing statement;
<PAGE>
(ii) All transfer declarations or similar
documentation required by law;
(iii) Letters to the tenants of the Property
in the form of Exhibit L attached hereto; and
(iv) Notices in substantially the form attached
hereto as Exhibit M attached hereto to the other party to each Service Contract
assumed by Purchaser pursuant to Section 3.2(c) of this Agreement.
(d) The Title Company shall deliver to Purchaser an initialed
mark-up of the Title Commitment, extending the effective date to the Closing
Date, insuring Purchaser as owner of the Real Property, and removing all
exceptions other than Permitted Exceptions.
4. Permitted Termination. So long as a party is not in default
hereunder, if any condition to such party's obligation to proceed with the
Closing hereunder has not been satisfied or waived as of the Closing Date or
such earlier date as provided herein, such party may, in its sole discretion,
terminate this Agreement by delivering written notice to the other party before
the Closing Date (in which event the Earnest Money, less Seller Retention, shall
be returned to Purchaser), or elect to close, notwithstanding the
non-satisfaction of such condition, in which event such party shall be deemed to
have waived any such condition.
L. Prorations. All items of income and expense shall be paid,
prorated or adjusted as of the close of business on the day prior
to the Closing Date (the "Proration Date") in the manner
hereinafter set forth:
1. Purchaser shall be credited with (i) the amount of (A) all rents and
(B) all expense contributions, real estate tax contributions, and other
reimbursements from tenants ("Tenant Contributions") received by Seller and
attributable to any month commencing after the Closing Date and (ii) all
unapplied cash security deposits held by Seller and which were made by tenants
under all leases of the Real Property in effect as of the Closing Date.
2. All rents and Tenant Contributions for the month of Closing shall be
prorated between Purchaser and Seller based upon their respective days of
ownership for such month in which the Closing occurs. Neither Purchaser nor
Seller shall receive credit at Closing for any payments of rental obligations
due but
<PAGE>
not paid as of the Proration Date. At the time of each of the final calculations
and collections from tenants of Tenant Contributions for 1998, whether in the
nature of a reconciliation payment or full payment, in arrears, there shall be a
reproration between Purchaser and Seller as to the Tenant Contributions. Such
reproration shall not be made on the basis of a per diem method of allocation,
but shall instead be apportioned between Seller and Purchaser on the basis of
the relative share of actual expenses in question incurred by Seller and
Purchaser during the lease year in question. Seller covenants to provide
Purchaser with any information necessary to finalize such calculation. Purchaser
covenants to bill tenants for amounts due from tenants attributable to periods
prior to Closing (including, without limitation, 1997 Tenant Contributions due
from Tenants based on reconciliation calculations furnished to Purchaser by
Seller) and diligently pursue collections from tenants and, as collected, to
timely deliver to Seller amounts due Seller, provided, however, Purchaser shall
not be required to sue any tenant for amounts due from such tenant.
3. Intentionally Omitted.
4. Any amounts received from tenants after Closing shall be applied on
a tenant by tenant basis in the following order: (i) first on account of any
amount due Purchaser from such tenant(s); (ii) next, on account of any amount
due Seller from such tenant(s) for the period up to and including the Proration
Date and (iii) finally, any balance then remaining to Purchaser. Seller retains
the right to pursue its remedies against tenants after Closing for any
delinquent payments or other amounts owed to Seller, except for actions or
proceedings affecting possession or landlord liens. However, Seller will not
exercise any such rights or remedies unless such delinquent rents have not been
collected by Purchaser and paid to Seller within three (3) months after the
Closing Date. Any money due to Seller shall be remitted to Seller, less a
proportionate share of any reasonable attorneys' fees and third party costs and
expenses in connection with collection thereof, within five days after the end
of the month in which it was received by Purchaser.
5. Operating expenses, including, without limitation, payments under
Service Contracts to be assigned to Purchaser, permits, licenses, membership
dues, and any other prepaid expenses, shall be prorated between Purchaser and
Seller based upon the actual days of their respective ownership of the Property
utilizing the actual expenses or reasonable estimates.
6. Real estate taxes shall be prorated between Seller and
<PAGE>
Purchaser based upon the actual days of ownership of the parties for the year in
which Closing occurs utilizing the most recent ascertainable tax bill(s). Seller
and Purchaser agree to reprorate said real estate taxes upon Purchaser's receipt
of the actual tax bill for the tax year in question, if any. Seller reserves the
right (a) to meet with governmental officials and to contest any reassessment
governing or affecting Seller's obligations under this Section, and (b) to
contest any assessment of the Property or any portion thereof and to attempt to
obtain a refund for any taxes previously paid. Seller shall retain all rights
with respect to any refund of taxes applicable to any period prior to the
Closing Date.
7. Except for utilities billed directly to Tenants, utilities shall be
prorated as of the Proration Date based upon either meter readings on the
Proration Date or the prior month's actual invoices. Seller shall be credited
with any unapplied utility deposit in effect as of the Closing Date to the
extent such deposit is assignable.
8. Purchaser shall be responsible for and pay for both: (a) the cost of
all tenant improvements, concessions, inducements and abatements, and (b) all
leasing commissions due and payable as a result of leases made pursuant to (i)
Proposals listed on Schedule 4 attached hereto, (ii) any lease entered into
after the date hereof through the date which is five (5) days prior to the
expiration of the Due Diligence Period, and (iii) any Proposal which Purchaser
approved, or is deemed to have approved as provided in Section 15. Purchaser
shall receive a credit on the Closing Date equal to all leasing commissions due
to leasing or other agents for the current remaining term of each Lease listed
or required to be listed on Schedule 1 (determined without regard to any
unexercised termination or cancellation right), discounted to present value
using reasonable discount rates; provided, however, Seller shall have no
liability for any deferred commission due to the Emerson Groups for the lease to
Globeset, Inc. in the aggregate amount of $31,040.36. Purchaser shall assume, in
writing, the obligation to pay any such leasing commissions due thereunder after
the Closing Date up to the amount of such credit (without discount). Purchaser
shall promptly return to Seller any such commission (without discount) that, due
to later events, does not become due and payable. At Closing, Purchaser shall
assume leasing commissions for renewals or expansions under any Lease identified
in Schedule 1 as a result of the exercise of such right after the effective date
of this Agreement. If by Closing Seller has not completed and paid in full for
all tenant improvement expenses, tenant allowances, concessions, inducements and
abatements which are the obligation
<PAGE>
of landlord under the Leases listed or required to be listed on Schedule 1 but
excluding obligations on which Seller has not commenced work and which are not
required to be completed prior to Closing ("TI Obligations"), then such costs as
reasonably agreed by Purchaser and Seller shall be withheld from the Purchase
Price at Closing and Purchaser shall be responsible for completing and paying
such TI Obligations. Anything in the prior sentence to the contrary
notwithstanding, the obligations for work or allowance under the New York Life
Insurance Company lease shall be a TI Obligation. Any funds withheld shall be
used by Purchaser to pay the landlord's share of such tenant improvement and
allowances. If there are any funds remaining after payment of such TI
Obligations, such excess shall be paid by Purchaser to Seller; but if the amount
withheld is insufficient for the purpose, Seller shall reimburse Purchaser for
such deficiency on demand.
9. All insurance policies and property management agreements shall be
terminated as of the Closing Date and there shall be no proration with respect
to these items.
All other items which are customarily prorated in transactions similar to the
transaction contemplated hereby and which were not heretofore dealt with, will
be prorated as of the Proration Date. In the event any prorations or
computations made under this Section are based on estimates or prove to be
incorrect, then either party shall be entitled to an adjustment to correct the
same, provided that it makes written demand on the party from whom it is
entitled to such adjustment within one hundred and twenty days after the end of
the current calendar year. Purchaser shall indemnify and hold Seller harmless
from and against any and all claims for which Purchaser received credits
pursuant to this Section 5. The indemnity set forth in the immediately preceding
sentence and the covenants contained in this Section 5 shall survive Closing and
constitute Surviving Obligations.
M. Seller's Representations, Warranties and Covenants. Seller
hereby represents, warrants and covenants to Purchaser as
follows:
1. Power. Seller has the legal power, right and authority
to enter into this Agreement and the instruments referenced
herein and to consummate the transactions contemplated hereby.
2. Requisite Action. All requisite action (corporate, trust,
partnership or otherwise) has been taken by Seller in connection with entering
into this Agreement and the instruments
<PAGE>
referenced herein and the consummation of the transactions contemplated hereby.
No consent of any partner, shareholder, member, creditor, investor, judicial or
administrative body, authority or other party is required which has not been
obtained to permit Seller to enter into this Agreement and consummate the
transaction contemplated hereby.
3. Authority. The individuals executing this Agreement and the
instruments referenced herein on behalf of Seller have the legal power, right
and actual authority to bind Seller to the terms and conditions hereof and
thereof.
4. Validity. This Agreement and all documents required hereby to be
executed by Seller are and shall be valid, legally binding obligations of and
enforceable against Seller in accordance with their terms.
5. Conflicts. None of the execution and delivery of this Agreement and
documents referenced herein, the incurrence of the obligations set forth herein,
the consummation of the transactions herein contemplated or referenced herein
conflicts with or results in the material breach of any terms, conditions or
provisions of or constitutes a default under, any bond, note, or other evidence
of indebtedness or any contract, lease or other agreements or instruments to
which Seller is a party.
6. Leases. Attached hereto as Schedule 1 is a complete and accurate
list of the leases, occupancy agreements and amendments thereto relating to the
Property, which shall be updated by Seller prior to Closing, if necessary, by
adding thereto leases executed after the date hereof through Closing and all
Proposals which are approved or deemed approved by Purchaser as provided under
Section 15.
7. Service Contracts. Attached hereto as Schedule 2 is a complete and
accurate list of the service contracts, equipment leases and other agreements
(other than Leases) relating to the Property, which shall be updated by Seller
prior to Closing, if necessary for all such contracts and agreements entered
into or terminated in accordance with this Agreement.
8. Notices. Seller has not received any written notice that the
Property, and all present uses and operations thereof, are in violation of any
applicable deed restrictions or any covenants and restrictions affecting the
Property or any zoning, land-use, building, fire, health or safety laws.
9. Litigation. Except as set forth on Schedule 3 no
<PAGE>
litigation has been served upon Seller, nor to the best of the Seller's
knowledge has been filed, or threatened in writing, affecting the Property.
Schedule 3 shall be updated by Seller prior to Closing, if necessary.
10. Environmental Condition. Seller has no knowledge of or notice of
any violation of Environmental Laws or Environmental Permits (as hereinafter
defined) related to the Property or the presence or release (other than as
permitted by law) of Hazardous Materials on, under, at, or emanating from the
Property except as disclosed in the environmental reports delivered by Seller to
Purchaser or made available by Seller for Purchaser's review, which are listed
on Schedule 5. Schedule 5 shall be updated by Seller prior to Closing, if
necessary. There are no above-ground or to Seller's knowledge underground tanks
at the Property. The term "Environmental Laws" includes, without limitation, the
Resource Conservation and Recovery Act and the Comprehensive Environmental
Response Compensation and Liability Act ("CERCLA") and other federal laws
governing the environment as in effect on the date of this Agreement together
with their implementing regulations and guidelines as of the date of this
Agreement, and all state, regional, county, municipal and other local laws,
regulations and ordinances that are equivalent or similar to the federal laws
recited above or that purport to regulate or are in any way related to Hazardous
Materials in effect as of the date of this Agreement. "Hazardous Materials"
means any substance which is (i) designated, defined, classified or regulated as
a hazardous substance, toxic substance, hazardous material, hazardous waste,
pollutant or contaminant under any Environmental Law, as currently in effect as
of the date of this Agreement, (ii) petroleum hydrocarbon, including crude oil
or any fraction thereof and all petroleum products and derivatives, (iii) PCBs,
(iv) lead, (v) friable asbestos, (vi) flammable explosives, (vii) infectious
materials, (viii) radioactive materials or (ix) ureaformaldehyde. "Environmental
Permits" means any federal, state, county or local license, certificate, permit
or authorization issued under or in connection with any Environmental Laws.
11. Inspection Items. Copies of all items provided to or made available
to Purchaser under Section 3.1 are true and complete copies of the originals of
each such instrument.
12. Leases. The Leases represent all of the written and oral
obligations of Seller with respect to space in the Property.
13. Condemnation. There are no condemnation proceedings
pending or to Seller's knowledge threatened with respect to any
<PAGE>
portion of the Property.
14. ERISA Plans. Attachment B to the ERISA certificate attached hereto
as Exhibit F sets forth a complete list of each employee benefit plan (within
the meaning of Section 3(3) of ERISA) which owns an interest in Seller.
15. Disposal Facilities. The Property has not been used during Seller's
period of ownership as a transfer station, incinerator, resource recovery
facility, landfill or other similar facility for receiving or treating, storing
or disposing of waste, garbage, refuse and other discarded materials resulting
from, without limitation, industrial, commercial, agricultural, domestic and
community activities including without limitation, sanitary, hazardous, medical,
special or other waste.
16. Environmental Documentation. Seller has provided Purchaser with all
environmental documentation relating to the Property in its possession or in the
possession of HCMC, Heitman Properties of Texas Ltd., Heitman Financial Ltd. or
any of its subsidiaries, 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, correspondence to or from any governmental
authority, submissions to any governmental authority and directives, orders,
approvals and disapprovals issued by any governmental authority and shall
continue to do so after the execution of this Agreement promptly upon their
receipt.
17. Use of Property. No portion of the Property has ever been used by
Seller to generate, manufacture, refine, produce, treat, store, handle, dispose
of, transfer or process Hazardous Materials.
18. Indemnity. Seller shall indemnify, defend and hold Purchaser
harmless from and against any and all claims, actions, judgments, liabilities,
liens, damages, penalties, fines, costs and reasonable attorneys' fees, foreseen
or unforeseen, asserted against, imposed on or suffered or incurred by Purchaser
(or the Property) directly or indirectly arising out of or in connection with
any breach of the warranties, representations and covenants set forth in this
Section 6. The warranties and representations set forth in this Section 6 shall
be deemed remade as of Closing, and said warranties and representations as so
remade, and the indemnity obligation set forth in herein shall survive Closing
and constitute Surviving Obligations, provided that any claim by Purchaser based
upon a misrepresentation or breach of any
<PAGE>
warranty or representation or indemnity obligation under this Section 6 shall be
deemed waived unless Purchaser has given Seller notice of such claim prior to
the date which is twelve (12) months after the Closing Date.
As used in this Section 6, the terms "to Seller's knowledge," "actual knowledge"
or "best of Sellers knowledge" (i) shall mean and apply to the actual knowledge
of David Perisho (the asset manager), Tom Rogers and Howard Edelman and not to
any other parties, (ii) shall mean the actual knowledge of such individuals,
without any investigation or inquiry of any kind, and (iii) shall not mean such
individuals are charged with knowledge of the acts, omissions and/or knowledge
of Seller's agents or employees.
Notwithstanding anything contained in this Agreement to the contrary,
Seller shall have no liability for breaches of any representations, warranties
and certifications (the "Representations") which are made by Seller herein or in
any of the documents or instruments required to be delivered by Seller hereunder
if Purchaser, its officers, employees, shareholders, members, partners, or
agents had actual knowledge of such breach by Seller at or prior to Closing and
with such knowledge Purchaser elects to close in accordance with this Agreement,
and in such case Purchaser shall not have the right to bring any lawsuit or
other legal action against Seller, nor pursue any other remedies against Seller,
as a result of the breach of such Representation caused thereby.
N. Purchase As-Is. EXCEPT FOR THE REPRESENTATIONS OF SELLER EXPRESSLY SET FORTH
IN SECTION 6 OF THIS AGREEMENT AND IN THE CLOSING DOCUMENTS, PURCHASER WARRANTS
AND ACKNOWLEDGES TO AND AGREES WITH SELLER THAT PURCHASER IS PURCHASING THE
PROPERTY IN ITS "AS-IS, WHERE IS" CONDITION "WITH ALL FAULTS" AS OF THE CLOSING
DATE AND SPECIFICALLY AND EXPRESSLY WITHOUT ANY WARRANTIES, REPRESENTATIONS OR
GUARANTEES, EITHER EXPRESS OR IMPLIED, AS TO ITS CONDITION, FITNESS FOR ANY
PARTICULAR PURPOSE, MERCHANTABILITY, OR ANY OTHER WARRANTY OF ANY KIND, NATURE,
OR TYPE WHATSOEVER FROM OR ON BEHALF OF SELLER. EXCEPT FOR THE REPRESENTATIONS
OF SELLER EXPRESSLY SET FORTH IN SECTION 6 OF THIS AGREEMENT AND IN THE CLOSING
DOCUMENTS, SELLER SPECIFICALLY DISCLAIMS ANY WARRANTY, GUARANTY OR
REPRESENTATION, ORAL OR WRITTEN, PAST OR PRESENT, EXPRESS OR IMPLIED, CONCERNING
(A) THE VALUE, NATURE, QUALITY OR CONDITION OF THE PROPERTY, INCLUDING, WITHOUT
LIMITATION, THE WATER, STRUCTURAL INTEGRITY, SOIL AND GEOLOGY; (B) THE INCOME TO
BE DERIVED FROM THE PROPERTY; (C) THE SUITABILITY OF THE PROPERTY FOR ANY AND
ALL ACTIVITIES AND USES WHICH PURCHASER MAY CONDUCT THEREON, INCLUDING THE
POSSIBILITIES
<PAGE>
FOR FUTURE DEVELOPMENT OF THE PROPERTY; (D) THE COMPLIANCE OF OR BY THE PROPERTY
OR ITS OPERATION WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY
APPLICABLE GOVERNMENTAL AUTHORITY OR BODY; (E) THE HABITABILITY,
MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OF THE PROPERTY; (F) THE MANNER OR QUALITY OF THE CONSTRUCTION OR
MATERIALS, IF ANY, INCORPORATED INTO THE PROPERTY; (G) THE MANNER, QUALITY,
STATE OF REPAIR OR LACK OF REPAIR OF THE PROPERTY; (H) THE PRESENCE OR ABSENCE
OF HAZARDOUS MATERIALS AT, ON, UNDER, OR ADJACENT TO THE PROPERTY OR ANY OTHER
ENVIRONMENTAL MATTER OR CONDITION OF THE PROPERTY; OR (I) ANY OTHER MATTER WITH
RESPECT TO THE PROPERTY. PURCHASER ACKNOWLEDGES AND AGREES THAT, EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES OF SELLER CONTAINED IN SECTION 6 OF THIS
AGREEMENT AND IN THE CLOSING DOCUMENTS, ANY INFORMATION PROVIDED BY OR ON BEHALF
OF SELLER WITH RESPECT TO THE PROPERTY WAS OBTAINED FROM A VARIETY OF SOURCES
AND THAT SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF
SUCH INFORMATION AND MAKES NO REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS
OF SUCH INFORMATION. SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR
WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY,
OR THE OPERATION THEREOF, FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE,
SERVANT OR OTHER PERSON EXCEPT FOR THE EXPRESS REPRESENTATIONS SET FORTH IN
SECTION 6 OF THIS AGREEMENT AND IN THE CLOSING DOCUMENTS. PURCHASER FURTHER
ACKNOWLEDGES AND AGREES THAT PURCHASER IS A SOPHISTICATED AND EXPERIENCED
PURCHASER OF PROPERTIES SUCH AS THE PROPERTY AND HAS BEEN DULY REPRESENTED BY
COUNSEL IN CONNECTION WITH THE NEGOTIATION OF THIS AGREEMENT. EXCEPT AS MAY
OTHERWISE BE PROVIDED HEREIN, SELLER HAS MADE NO AGREEMENT TO ALTER, REPAIR OR
IMPROVE ANY OF THE PROPERTY.
O. Purchaser's Representations, Warranties and Covenants.
Purchaser hereby represents, warrants and covenants to Seller as
follows:
1. Power. Purchaser has the legal power, right and
authority to enter into this Agreement and the instruments
referenced herein and to consummate the transactions contemplated
hereby.
2. Requisite Action. All requisite action (corporate, trust,
partnership or otherwise) has been taken by Purchaser in connection with
entering into this Agreement and the instruments referenced herein and the
consummation of the transactions contemplated hereby. No consent of any partner,
shareholder, member, creditor, investor, judicial or administrative body,
authority or other party is required which has not been obtained to permit
Purchaser to enter into this Agreement and consummate
<PAGE>
the transaction contemplated hereby.
3. Authority. The individuals executing this Agreement and the
instruments referenced herein on behalf of Purchaser have the legal power, right
and actual authority to bind Purchaser to the terms and conditions hereof and
thereof.
4. Validity. This Agreement and all documents required hereby to be
executed by Purchaser are and shall be valid, legally binding obligations of and
enforceable against Purchaser in accordance with their terms.
5. Conflicts. Neither the execution and delivery of this Agreement and
documents referenced herein, nor the incurrence of the obligations set forth
herein, nor the consummation of the transactions herein contemplated, nor
referenced herein conflict with or result in the material breach of any terms,
conditions or provisions of or constitute a default under, any bond, note, or
other evidence of indebtedness or any contract, lease or other agreements or
instruments to which Purchaser is a party.
6. Litigation. There is no action, suit or proceeding pending or
threatened against Purchaser in any court or by or before any other governmental
agency or instrumentality which would materially and adversely affect the
ability of Purchaser to carry out the transactions contemplated by this
Agreement.
7. Indemnity. Purchaser shall indemnify, defend and hold the
Indemnified Parties harmless from and against any and all claims, actions,
judgments, liabilities, liens, damages, penalties, fines, costs and reasonable
attorneys' fees, foreseen or unforeseen, asserted against, imposed on or
suffered or incurred by Seller directly or indirectly arising out of or in
connection with any breach of the warranties, representations and covenants set
forth in this Section 8 or the inaccuracy of any representation made by
Purchaser in the ERISA certificate. The warranties, representations and
indemnities set forth in this Section 8 shall be deemed remade as of Closing and
shall survive Closing and constitute a Surviving Obligation, and said warranties
and representations as so remade, and the indemnity obligation set forth in
herein shall be deemed waived unless Seller has given Purchaser written notice
of any such claim prior to the date which is twelve (12) months from the Closing
Date.
P. Closing Costs. Seller shall pay the following expenses: (i) the costs to
obtain a standard Texas owner's title policy; (ii) the costs to obtain the
Existing Survey; (iii) one-half of all closing escrow fees, including "New York
Style" closing fees
<PAGE>
and fee for recording the Deed; (iv) all costs and expenses incurred in
connection with the transfer of any transferable permits, warranties or licenses
in connection with the ownership or operation of the Property; and (v) Seller's
legal fees and expenses. Purchaser shall pay the following expenses: (a) the
costs for any endorsements to the title policy, and deletion of the survey
exception; (b) the costs to obtain the Updated Survey; (c) one-half of all
closing escrow fees, including "New York Style" closing fees; (d) one-half of
the fee for the recording of the Deed; (e) all costs and expenses associated
with Purchaser's financing, if any; and (f) Purchaser's legal fees and expenses.
The provisions of this Section 9 shall survive Closing or any termination of
this Agreement and constitute a Surviving Obligation.
Q. Commissions. Seller shall be solely responsible for the payment of the
commission to CB Commercial Real Estate Group, Inc. Seller and Purchaser each
warrant and represent to the other that (other than CB Commercial Real Estate
Group, Inc.) neither has had any dealings with any broker, agent, or finder
relating to the sale of the Property or the transactions contemplated hereby,
and each agrees to indemnify and hold the other and their respective advisors
(including HCMC) harmless against any claim for brokerage commissions,
compensation or fees by any broker, agent, or finder in connection the sale of
the Property or the transactions contemplated hereby resulting from the acts of
the indemnifying party. The provisions of this Section 10 shall survive Closing
and constitute a Surviving Obligation.
R. New York Style Closing. It is contemplated that the transaction shall be
closed by means of a so-called New York Style Closing, with the concurrent
delivery of the documents of title, transfer of interest, delivery of the
marked-up title commitment described in Section 4.3(d) and the payment of the
Purchase Price. Seller and Purchaser shall each provide any undertaking to the
Title Company reasonably necessary to accommodate the New York Style Closing.
S. Attorneys' Fees and Costs. In the event suit or action is instituted to
interpret or enforce the terms of this Agreement, or in connection with any
arbitration or mediation of any dispute, the prevailing party shall be entitled
to recover from the other party such sum as the court, arbitrator or mediator
may adjudge reasonable as such party's costs and attorney's fees, including such
costs and fees as are incurred in any trial, on any appeal, in any bankruptcy
proceeding (including the adjudication of issues peculiar to bankruptcy law) and
in any
<PAGE>
petition for review. Each party shall also have the right to recover its
reasonable costs and attorney's fees incurred in collecting any sum or debt owed
to it by the other party, with or without litigation, if such sum or debt is not
paid within fifteen (15) days following written demand therefor. The provisions
of this Section 12 shall survive Closing and constitute Surviving Obligations.
T. Notice. All notices, demands, deliveries and communications (a "Notice")
under this Agreement shall be delivered or sent by: (i) first class, registered
or certified mail, postage prepaid, return receipt requested, (ii) nationally
recognized overnight carrier, or (iii) facsimile with original Notice sent via
overnight delivery addressed to the address of the party in question set forth
in the first paragraph of this Agreement and copies to the parties designated
below or to such other address as either party may designate by Notice pursuant
to this Section 13. Notices shall be deemed given (x) three business days after
being mailed as provided in clause (i) above, (y) one business day after
delivery to the overnight carrier as provided in clause (ii) above, or (z) on
the day of the transmission of the facsimile so long as it is received in its
entirety by 5:00 pm (New York City, New York Time) on such day and the original
of such Notice is received the next business day via overnight mail as provided
in clause (iii) above.
Notices to Seller copy to: Altheimer & Gray
10 South Wacker Drive - 4000
Chicago, Illinois 60606
Attn: Melvin K. Lippe
Fax: (312) 715-4800
Notices to Purchaser copy to: Mr. Roger Thomas
Mack-Cali Realty Corp.
11 Commerce Drive
Cranford, New Jersey 07016
Phone: (908) 272-8000
Fax: (908) 272-6755
and a copy to: David J. Lowery
Jones, Day, Reavis & Pogue
Suite 2300
2001 Ross Avenue
Dallas, Texas 75201-2958
Phone: (214) 220-3939
Fax: (214) 969-5100
<PAGE>
U. Fire or Other Casualty; Condemnation.
1. If the Property or any part thereof is damaged by fire or other
casualty prior to the Closing Date which would cost in excess of $500,000.00 to
repair (as determined by an insurance adjuster selected by the insurance
carriers), or which can be the basis for any tenant to terminate any Leases
which, individually or in the aggregate, is for more than 20,000 square feet of
net rentable area, Purchaser may terminate this Agreement by written notice to
Seller given on or before the earlier of (i) twenty (20) days following receipt
of notice from Seller of such casualty or (ii) the Closing Date. In the event of
such termination, this Agreement shall be of no further force and effect and,
except for the Surviving Obligations, neither party shall thereafter have any
further obligation under this Agreement, and Seller shall direct the Title
Company to promptly return all Earnest Money to Purchaser. If Purchaser does not
have the right to or does not elect to terminate this Agreement, then the
Closing shall take place as herein provided without abatement of the Purchase
Price, and Seller shall assign and transfer to Purchaser on the Closing Date,
without warranty or recourse, all of Seller's right, title and interest to the
balance of insurance proceeds paid or payable to Seller on account of such fire
or casualty remaining after reimbursement to Seller for the total amount of all
costs and expenses incurred by Seller in connection therewith including but not
limited to making emergency repairs, securing the Property and complying with
applicable governmental requirements. Seller shall pay to Purchaser the amount
of the deductible of any of Seller's applicable insurance policies.
2. If any material portion of the Property is taken in eminent domain
proceedings prior to Closing, Purchaser may terminate this Agreement by notice
to Seller given on or before the earlier of (i) twenty (20) days after such
taking or (ii) the Closing Date, and, in the event of such termination, this
Agreement shall be of no further force and effect and, except for the Surviving
Obligations, neither party shall thereafter have any further obligation under
this Agreement, and Seller shall direct the Title Company to promptly return all
Earnest Money to Purchaser. If Purchaser does not so elect to terminate or if
the taking is not material, then the Closing shall take place as herein provided
without abatement of the Purchase Price, and Seller shall deliver or assign to
Purchaser on the Closing Date, without warranty or recourse, all of Seller's
right, title and interest in and to all condemnation awards paid or payable to
Seller. As used in this Section 14.2, "material portion" means a part of the
Property which if taken in eminent domain proceedings
<PAGE>
would have an adverse effect on Purchaser's use or occupancy of
the Property.
V. Operations After Date of This Agreement. Seller covenants
and agrees with Purchaser that:
(a) after the date hereof through the Closing, Seller will (except as
specifically provided to the contrary herein):
(i) Refrain from transferring any of the Property or creating
on the Property any easements, liens, mortgages, encumbrances, or other
interests which will survive Closing or permitting any changes to the
zoning classification of the Land;
(ii) Refrain from entering into or amending any contracts, or
other agreements (excluding leases) regarding the Property (other than
contracts in the ordinary and usual course of business and which are
cancelable by the owner of the Property without penalty within thirty
(30) days after giving notice thereof);
(iii) Continue to operate, maintain, and repair the Property
in a manner consistent with Seller's current practices;
(iv) Fully comply with the terms of the Leases;
(v) Refrain from offering the Property for sale or marketing
the same or negotiating with respect to or entering into any other
agreement for the sale of the Property;
(vi) Cancel any Lease without Purchaser's prior written
consent (which shall not be unreasonably withheld);
(vii) Refrain from applying tenant security deposits without
Purchaser's approval (which shall not be unreasonably withheld);
(viii) Maintain existing insurance coverage relating to the
Property; and
(ix) Deliver to Purchaser not less than five (5) days prior to
the expiration of the Due Diligence Period copies of all leases entered
into after the date hereof through the date which is five (5) days
prior to the expiration of the Due Diligence Period and copies of all
Proposals (as defined
<PAGE>
in Section 15(b) below) with respect to which no lease has been
executed and which has not expired or been withdrawn, except as
provided otherwise in Section 15(b) below.
(b) after the date which is five (5) days prior to the expiration of
the Due Diligence Period through the Closing, Seller will (except as
specifically provided to the contrary herein) refrain from (i) amending any
Leases of any portion of the Property, or (ii) executing any new leases without
the prior written consent of Purchaser (which consent shall not be unreasonably
withheld). As used herein, "Proposal" shall mean a description of the economic
terms of any proposed lease or amendment along with any financial information on
the tenant in Seller's possession. Purchaser shall be deemed to have approved:
(x) all Proposals listed on Schedule 4 attached hereto; and (y) any Proposals
delivered to Purchaser after the date hereof through the date which is five (5)
days prior to the expiration of the Due Diligence Period. Seller shall have the
right to execute lease documents evidencing a Proposal approved or deemed
approved by Purchaser.
W. Assignment. Purchaser shall not assign this Agreement without Seller's prior
written consent which consent may be withheld for any reason or no reason;
provided, however, Purchaser may assign this Agreement to an affiliate of
Mack-Cali Realty Acquisition Corp., without the consent of Seller so long as
such Assignee complies with the requirements of the last sentence of this
Section 16. Subject to the previous sentence, this Agreement shall apply to,
inure to the benefit of and be binding upon and enforceable against the parties
hereto and their respective successors and assigns. Seller's consent to any such
assignment shall be conditioned upon Seller's receipt of the following not less
than five (5) business days prior to the Closing Date: (i) a duly executed
express assumption of all of the duties and obligations of Purchaser by the
proposed assignee in a form acceptable to Seller, and (ii) an ERISA certificate,
in the form attached hereto as Exhibit B and the content of which is
satisfactory to Seller.
X. Remedies.
(a) IN THE EVENT THAT SELLER SHALL FAIL TO CONSUMMATE THIS AGREEMENT
AND SUCH FAILURE IS NOT A RESULT OF PURCHASER'S DEFAULT OR A TERMINATION OF THIS
AGREEMENT BY PURCHASER OR SELLER PURSUANT TO A RIGHT TO DO SO UNDER THE
PROVISIONS HEREOF, PURCHASER, SHALL ONLY BE ENTITLED TO SEEK AT ITS ELECTION,
EITHER: (i) THE REMEDY OF SPECIFIC PERFORMANCE, OR (ii) DAMAGES IN AN AMOUNT NOT
TO EXCEED $1,000,000.00 IN THE AGGREGATE FOR ALL
<PAGE>
RECOURSE OF PURCHASER UNDER THE PURCHASE DOCUMENTS (AS DEFINED IN SECTION 19
HEREOF) EXCEPT ARISING OUT OF SELLER'S OBLIGATIONS FOR REPRORATIONS AND UNDER
SECTION 15. IN NO EVENT SHALL SELLER BE LIABLE TO PURCHASER FOR ANY PUNITIVE,
SPECULATIVE OR CONSEQUENTIAL DAMAGES; PROVIDED, HOWEVER, IN THE CASE WHERE SUCH
FAILURE IS BASED UPON AN ACT WHICH IS NOT WITHIN SELLER'S CONTROL, PURCHASER, AS
ITS SOLE AND EXCLUSIVE REMEDY, MAY TERMINATE THIS AGREEMENT AND RECEIVE A REFUND
OF THE EARNEST MONEY LESS SELLER RETENTION. IN NO EVENT SHALL PURCHASER BE
ENTITLED TO RECORD A LIS PENDENS OR NOTICE OF PENDENCY OF ACTION AGAINST THE
PROPERTY FOR ANY REASON WHATSOEVER EXCEPT IF PURCHASER ELECTS THE REMEDY OF
SPECIFIC PERFORMANCE.
(b) IN THE EVENT THAT PURCHASER SHOULD FAIL TO CONSUMMATE THIS
AGREEMENT FOR ANY REASON, EXCEPT SELLER'S DEFAULT OR THE TERMINATION OF THIS
AGREEMENT BY PURCHASER PURSUANT TO A RIGHT TO DO SO UNDER THE TERMS AND
PROVISIONS HEREOF, THEN SELLER, AS ITS SOLE AND EXCLUSIVE REMEDY MAY TERMINATE
THIS AGREEMENT BY NOTIFYING PURCHASER THEREOF AND RECEIVE OR RETAIN THE EARNEST
MONEY AS LIQUIDATED DAMAGES, PROVIDED THAT THIS PROVISION SHALL NOT LIMIT
SELLER'S RIGHTS TO RECEIVE REIMBURSEMENT FOR ATTORNEYS' FEES AND TO PURSUE AND
RECOVER ON A CLAIM WITH RESPECT TO ANY SURVIVING OBLIGATIONS. THE PARTIES AGREE
THAT SELLER WILL SUFFER DAMAGES IN THE EVENT OF PURCHASER'S DEFAULT ON ITS
OBLIGATIONS. ALTHOUGH THE AMOUNT OF SUCH DAMAGES IS DIFFICULT OR IMPOSSIBLE TO
DETERMINE, THE PARTIES AGREE THAT THE AMOUNT OF THE EARNEST MONEY IS A
REASONABLE ESTIMATE OF SELLER'S LOSS IN THE EVENT OF PURCHASER'S DEFAULT. THUS,
SELLER SHALL ACCEPT AND RETAIN THE EARNEST MONEY AS LIQUIDATED DAMAGES BUT NOT
AS A PENALTY. EXCEPT AS OTHERWISE SET FORTH IN THIS SECTION 17(b), SUCH
LIQUIDATED DAMAGES SHALL CONSTITUTE SELLER'S SOLE AND EXCLUSIVE REMEDY. IN THE
EVENT SELLER IS ENTITLED TO THE EARNEST MONEY AS LIQUIDATED DAMAGES AND TO THE
EXTENT SELLER HAS NOT ALREADY RECEIVED THE EARNEST MONEY, THE EARNEST MONEY
SHALL BE IMMEDIATELY PAID TO SELLER BY THE TITLE COMPANY UPON RECEIPT OF WRITTEN
NOTICE FROM SELLER THAT PURCHASER HAS DEFAULTED UNDER THIS AGREEMENT, AND
PURCHASER AGREES TO TAKE ALL SUCH ACTIONS AND EXECUTE AND DELIVER ALL SUCH
DOCUMENTS NECESSARY OR APPROPRIATE TO EFFECT SUCH PAYMENT.
SELLER AND PURCHASER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE
PROVISIONS OF THE FOREGOING LIQUIDATED DAMAGES PROVISION AND BY THEIR SIGNATURES
IMMEDIATELY BELOW AGREE TO BE BOUND BY ITS TERMS.
<PAGE>
SELLER: PURCHASER:
JMB Group Trust III
By: Heitman Capital Management Mack-Cali Realty
Acquisition Corp.,
Corporation, its attorney in fact a Delaware
corporation
By: By:
Name: Howard J. Edelman Name:
Its: Executive Vice President Its:
Y. Miscellaneous.
1. Entire Agreement. This Agreement, together with the exhibits
attached hereto, constitute the entire agreement of the parties hereto regarding
the purchase and sale of the Property, and all prior agreements, understandings,
representations and statements, oral or written, are hereby merged herein. In
the event of a conflict between the terms of this Agreement and any prior
written agreements, the terms of this Agreement shall prevail. This Agreement
may only be amended or modified by an instrument in writing, signed by the party
intended to be bound thereby.
2. Time. All parties hereto agree that time is of the essence in this
transaction. If the time for performance of any obligation hereunder shall fall
on a Saturday, Sunday or holiday (national, in the State of Illinois or in the
State of Texas) such that the transaction contemplated hereby can not be
performed, the time for performance shall be extended to the next such
succeeding day where performance is possible.
3. Counterpart Execution. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an
original.
4. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF TEXAS AND FOR ALL
PURPOSES SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS.
5. Publicity. Seller and Purchaser hereby covenant and agree that, at
all times after the date of execution hereof and continuing after the Closing,
unless consented to in writing by the other party or unless required to be made
by law or rule of
<PAGE>
any stock exchange, no press release or other public disclosure concerning this
transaction shall be made, and each party agrees to use best efforts to prevent
disclosure of this transaction. The provisions of this Section 18.5 shall
constitute Surviving Obligations.
6. Recordation. Purchaser shall not record this Agreement or a
memorandum or other notice thereof in any public office without the express
written consent of Seller. A breach by Purchaser of this covenant shall
constitute a material default by Purchaser under this Agreement.
7. Benefit. This Agreement is for the benefit of Purchaser and Seller,
and except as provided in the indemnity granted by Purchaser under Paragraphs
3.2 and 8.7 with respect to the Indemnified Parties listed therein, no other
person or entity will be entitled to rely on this Agreement, receive any benefit
from it or enforce any provisions of it against Purchaser or Seller.
8. Section Headings. The Section headings contained in this Agreement
are for convenience only and shall in no way enlarge or limit the scope or
meaning of the various and several Sections hereof.
9. Further Assurances. Purchaser and Seller agree to execute all
documents and instruments reasonably required in order to consummate the
purchase and sale herein contemplated.
10. Severability. If any portion of this Agreement is held to be
unenforceable by a court of competent jurisdiction, the remainder of this
Agreement shall remain in full force and effect.
11. Waiver of Trial by Jury. Seller and Purchaser, to the extent they
may legally do so, hereby expressly waive any right to trial by jury of any
claim, demand, action, cause of action, or proceeding arising under or with
respect to this Agreement, or in any way connected with, or related to, or
incidental to, the dealings of the parties hereto with respect to this Agreement
or the transactions related hereto or thereto, in each case whether now existing
or hereafter arising, and irrespective of whether sounding in contract, tort, or
otherwise. To the extent they may legally do so, Seller and Purchaser hereby
agree that any such claim, demand, action, cause of action, or proceeding shall
be decided by a court trial without a jury and that any party hereto may file an
original counterpart or a copy of this Section with any court as written
evidence of the consent of the other party
<PAGE>
or parties hereto to waiver of its or their right to trial by
jury.
12. Independent Counsel. Purchaser and Seller each acknowledge that:
(a) they have been represented by independent counsel in connection with this
Agreement; (b) they have executed this Agreement with the advice of such
counsel; and (c) this Agreement is the result of negotiations between the
parties hereto and the advice and assistance of their respective counsel. The
fact that this Agreement was prepared by Seller's counsel as a matter of
convenience shall have no import or significance. Any uncertainty or ambiguity
in this Agreement shall not be construed against Seller because Seller's counsel
prepared this Agreement in its final form.
13. Governmental Approvals. Nothing contained in this Agreement shall
be construed as authorizing Purchaser to apply for a zoning change, variance,
subdivision maps, lot line adjustment, or other discretionary governmental act,
approval or permit with respect to the Property prior to the Closing, and
Purchaser agrees not to do so. Purchaser agrees not to submit any reports,
studies or other documents, including, without limitation, plans and
specifications, impact statements for water, sewage, drainage or traffic,
environmental review forms, or energy conservation checklists to any
governmental agency, or any amendment or modification to any such instruments or
documents prior to the Closing. Purchaser's obligation to purchase the Property
shall not be subject to or conditioned upon Purchaser's obtaining any variances,
zoning amendments, subdivision maps, lot line adjustment or other discretionary
governmental act, approval or permit.
14. No Waiver. No covenant, term or condition of this Agreement other
than as expressly set forth herein shall be deemed to have been waived by Seller
or Purchaser unless such waiver is in writing and executed by Seller or
Purchaser, as the case may be.
15. Discharge and Survival. The delivery of the Deed by Seller, and the
acceptance thereof by Purchaser shall be deemed to be the full performance and
discharge of every covenant and obligation on the part of Seller to be performed
hereunder except the Surviving Obligations. No action shall be commenced after
the Closing on any covenant or obligation except the Surviving Obligations.
Anything in this Section 18.15 to the contrary notwithstanding, if Seller
breached the obligations of Seller under Section 15, the action against Seller
for such breach shall survive Closing and be a Surviving Obligation.
<PAGE>
Z. Exculpation of Seller and Related Parties. Notwithstanding anything to the
contrary contained in this Agreement or in any exhibits attached hereto or in
any documents executed in connection herewith (collectively, including this
Agreement, said exhibits and any such document, the "Purchase Documents"), it is
expressly understood and agreed by and between the parties hereto that: (i) the
recourse of Purchaser or its successors or assigns against Seller with respect
to the alleged breach by or on the part of Seller of any representation,
warranty, covenant, undertaking, indemnity or agreement contained in any of the
Purchase Documents other than Seller's obligations hereunder for reprorations
and under Section 15 (collectively, "Seller's Undertakings") shall be limited to
an amount not to exceed $1,000,000.00 in the aggregate; and (ii) except as
provided in (i) above with respect to Seller, no personal liability or personal
responsibility of any sort with respect to any of Seller's Undertakings or any
alleged breach thereof is assumed by, or shall at any time be asserted or
enforceable against, Seller or HCMC, or against any of their respective
shareholders, directors, officers, employees, agents, constituent partners,
members, beneficiaries, trustees or representatives.
AA. Information and Audit Cooperation. At Purchaser's request, at any time
before Closing, and within one (1) year after Closing, Seller will provide to
Purchaser's designated independent auditor access to those books and records of
the Property which are in Seller's possession and not provided to Buyer at
Closing, and Seller shall provide to such auditor a representation letter
regarding the books and records of the Property, in substantially the form of
Exhibit "N", attached hereto and incorporated herein by reference, in connection
with the normal course of auditing the Property in accordance with generally
accepted auditing standards; provided, however, that Purchaser shall indemnify
and hold Seller harmless from any liability, damages, costs, expenses (including
reasonable attorneys' fees and expenses) incurred by Seller as a result of the
execution and delivery of any letter to Purchaser's auditor.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
made as of the day and year first above stated.
SELLER:
JMB GROUP TRUST III
an Illinois common law group
trust
By: Heitman Capital
Management Corporation,
<PAGE>
its attorney in fact
By:
Name: Howard J. Edelman
Its: Executive Vice-President
PURCHASER:
MACK-CALI REALTY
ACQUISITION CORP.,
a Delaware Corporation
By:
Name:
Its:
<PAGE>
Exhibit A - Legal Description
Exhibit B - Form of Earnest Money Escrow Agreement
Exhibit C - Survey Specifications
Exhibit D - Survey Certification
Exhibit E - Form of Tenant Estoppel Certificate
Exhibit F - Form of ERISA Certificate
Exhibit G - Form of Special Warranty Deed
Exhibit H - Form of Bill of Sale
Exhibit I - Form of Assignment and Assumption of Leases
Exhibit J - Form of Assignment and Assumption of Contracts,
Licenses and Permits
Exhibit K - Form of Non-Foreign Affidavit
Exhibit L - Form of Tenant Notification Letter
Exhibit M - Form of Vendor Notification Letter
Exhibit N - Form of Auditor Letter
Schedule 1 - List of Leases
Schedule 2 - List of Service Contracts
Schedule 3 - List of Litigation
Schedule 4 - List of Proposals
Schedule 5 - List of Environmental Reports
CALI REALTY CORPORATION
UNDERWRITING AGREEMENT
October 9, 1997
To the Representatives named in Schedule 1 hereto of the
several Underwriters named in Schedule 2 hereto
Ladies and Gentlemen:
Cali Realty Corporation, a Maryland corporation qualified as a real
estate investment trust (the "Company"), hereby confirms its agreement with the
several underwriters named in Schedule 2 hereto (the "Underwriters"), for whom
you have been duly authorized to act as representatives (in such capacities, the
"Representatives"), as set forth below. If you are the only Underwriters, all
references herein to the Representatives shall be deemed to be to the
Underwriters.
1. Securities. Subject to the terms and conditions herein contained,
the Company proposes to issue and sell to the several Underwriters certain
securities of the Company identified in Schedule 1 hereto (the "Firm
Securities"). The Company also proposes to issue and sell to the several
Underwriters the additional securities identified in Schedule 1 if requested by
the Representatives as provided in Section 3 of this Agreement. Any and all
shares of such additional securities to be purchased by the several Underwriters
pursuant to such option are referred to herein as the "Option Securities," and
the Firm Securities and any Option Securities are collectively referred to
herein as the "Securities."
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the several Underwriters
that:
(a) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Act"). A registration
statement (the file number of which is set forth in Schedule 1 hereto) on such
Form with respect to the Securities, including a basic prospectus, has been
filed by the Company with the Securities and Exchange Commission
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<PAGE>
(the "Commission") under the Act, and one or more amendments to such
registration statement may also have been so filed. Such registration statement,
as so amended, has been declared by the Commission to be effective under the
Act. Such registration statement, as amended at the date of this Agreement as
specified in Schedule 1 hereto, meets the requirements set forth in Rule
415(a)(1)(x) under the Act and complies in all other material respects with said
Rule. The Company will next file with the Commission either (A) if the Company
relies on Rule 434 under the Act, a Term Sheet (as hereinafter defined) relating
to the Securities, that shall identify the Preliminary Prospectus (as
hereinafter defined) that it supplements and, if required to be filed pursuant
to Rules 434(c)(2) and 424(b), an Integrated Prospectus (as hereinafter
defined), in either case, containing such information as is required or
permitted by Rules 434, 430A, and 424(b) under the Act or (B) if the Company
does not rely on Rule 434 under the Act, pursuant to Rule 424(b) under the Act a
final prospectus supplement to the basic prospectus included in such
registration statement, as so amended, describing the Securities and the
offering thereof, in such form as has been provided to, or discussed with, and
approved by the Representatives as provided in section 4(a) of this Agreement.
As used in this Agreement, the term "Registration Statement" means such
registration statement, as amended at the time when it was declared effective,
including (i) all financial schedules and exhibits thereto, (ii) all documents
incorporated by reference or deemed to be incorporated by reference therein and
(iii) any information omitted therefrom pursuant to Rule 430A under the Act and
included in the Prospectus (as hereinafter defined) or, if required to be filed
pursuant to Rules 434(c)(2) and 424(b), in the Integrated Prospectus; the term
"Basic Prospectus" means the prospectus included in the Registration Statement;
the term "Preliminary Prospectus" means any preliminary form of the Prospectus
(as defined herein) specifically relating to the Securities, in the form first
filed with, or transmitted for filing to, the Commission pursuant to Rule 424 of
the Rules and Regulations; the term "Prospectus Supplement" means any prospectus
supplement specifically relating to the Securities, in the form first filed
with, or transmitted for filing to, the Commission pursuant to Rule 424 under
the Securities Act; the term "Prospectus" means: (A) if the Company relies on
Rule 434 under the Act, the Term Sheet relating to the Securities that is first
filed pursuant to Rule 424(b)(7) under the Act, together with the Preliminary
Prospectus identified therein that such Term Sheet supplements; (B) if the
Company does not rely on Rule 434 under the Act, the Preliminary Prospectus; or
(C) if the Company does not rely on Rule 434 under the Act and if no prospectus
is required to be filed pursuant to Rule 424 under the Act, the Basic
Prospectus, including, in each case, the Prospectus Supplement; "Basic
Prospectus," "Prospectus," "Preliminary Prospectus" and "Prospectus Supplement"
shall include in each case the documents, if any, filed by the Company with the
Commission pursuant to the United States Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and incorporated by reference therein; the term
"Integrated Prospectus" means a prospectus first filed with the Commission
pursuant to Rules 434(c)(2) and 424(b) under the Act; and the term "Term Sheet"
means any abbreviated term sheet that satisfies the requirements of Rule 434
under the Act. Any reference in this Agreement
2
<PAGE>
to an "amendment" or "supplement" to any Preliminary Prospectus, the Prospectus,
or any Integrated Prospectus or an "amendment" to any registration statement
(including the Registration Statement) shall be deemed to include any document
incorporated by reference therein that is filed with the Commission under the
Exchange Act after the date of such Preliminary Prospectus, Prospectus,
Integrated Prospectus or registration statement, as the case may be. For
purposes of the preceding sentence, any reference to the "effective date" of an
amendment to a registration statement shall, if such amendment is effected by
means of the filing with the Commission under the Exchange Act of a document
incorporated by reference in such registration statement, be deemed to refer to
the date on which such document was so filed with the Commission; any reference
herein to the "date" of a Prospectus that includes a Term Sheet shall mean the
date of such Term Sheet.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus. When any Preliminary
Prospectus was filed with the Commission it (i) contained all statements
required to be stated therein in accordance with, and complied in all material
respects with the requirements of, the Act, the Exchange Act and the respective
rules and regulations of the Commission thereunder and (ii) did not include any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. When the Registration Statement or any
amendment thereto was or is declared effective, it (i) contained or will contain
all statements required to be stated therein in accordance with, and complied or
will comply in all material respects with the requirements of, the Act, the
Exchange Act and the respective rules and regulations of the Commission
thereunder and (ii) did not or will not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading. When the Prospectus or any Term Sheet that is
a part thereof or any Integrated Prospectus or any amendment or supplement to
the Prospectus is filed with the Commission pursuant to Rule 424(b), on the date
when the Prospectus is otherwise amended or supplemented and on the Firm Closing
Date and any Option Closing Date (both as hereinafter defined), each of the
Prospectus and, if required to be filed pursuant to Rules 434(c)(2) and 424(b)
under the Act, the Integrated Prospectus, as amended or supplemented at any such
time, (i) contained or will contain all statements required to be stated therein
in accordance with, and complied or will comply in all material respects with
the requirements of, the Act and the Exchange Act and the respective rules and
regulations of the Commission thereunder and (ii) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The foregoing
provisions of this paragraph (b) do not apply to statements or omissions made in
any Preliminary Prospectus or any amendment or supplement thereto, the
Registration Statement or any amendment thereto, the Prospectus or, if required
to be filed pursuant to Rules 434(c)(2) and 424(b) under the Act, the Integrated
Prospectus or any
3
<PAGE>
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein.
(c) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Maryland and is duly qualified to transact business and is in good standing
under the laws of all other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such qualification, except
where the failure to be so qualified does not amount to a material liability or
disability to the Company and its subsidiaries, taken as a whole.
(d) Each of the subsidiaries of the Company (the
"Subsidiaries") has been duly organized and is validly existing as a general or
limited partnership or corporation in good standing under the laws of the
jurisdiction of its organization, and is duly qualified to transact business and
is in good standing under the laws of all other jurisdictions where the
ownership or leasing of its properties or the conduct of its business requires
such qualification, except where the failure to be so qualified does not amount
to a material liability or disability to the Company and its subsidiaries, taken
as a whole. The issued shares of capital stock of each of the Subsidiaries that
is a corporation are duly authorized, validly issued, fully paid and
nonassessable, and all of the partnership interests in each Subsidiary that is a
partnership are validly issued and fully paid. Except as described in the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus), all of such shares and interests in the Subsidiaries owned by the
Company are owned beneficially by the Company or another Subsidiary free and
clear of any security interests, mortgages, pledges, grants, liens,
encumbrances, equities or claims.
(e) There are no outstanding (A) securities or obligations of
the Company or any of the Subsidiaries convertible into or exchangeable for any
capital stock of the Company or any Subsidiary, (B) warrants, rights or options
to subscribe for or purchase from the Company or any Subsidiary any such capital
stock or any such convertible or exchangeable securities or obligations, or (C)
obligations of the Company or any such Subsidiary to issue any shares of capital
stock, any such convertible or exchangeable securities or obligations, or any
such warrants, rights or options, except as described in the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus).
(f) The Company and each of the Subsidiaries has full power,
corporate or other, to own or lease their respective properties and conduct
their respective businesses as described in the Registration Statement, the
Prospectus and any Integrated Prospectus (or, if the
4
<PAGE>
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus); and the Company has full power, corporate or
other, to enter into this Agreement and any other agreement pursuant to which
the Securities are issued as specified in Schedule 1 to this Agreement (the
"Securities Documents") and to carry out all the terms and provisions hereof and
thereof to be carried out by it.
(g) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus and any Integrated Prospectus (or,
if the Prospectus and any required Integrated Prospectus are not in existence,
the most recent Preliminary Prospectus). All of the capital stock of the Company
has been duly authorized and the capital stock of the Company outstanding is
validly issued, fully paid and nonassessable.
(h) The Securities have been duly authorized, and, when such
securities are issued and delivered as contemplated by the terms of this
Agreement and the applicable Securities Document such securities will be validly
issued, fully paid and non-assessable.
(i) The execution and delivery of the Securities have been
duly authorized by all necessary corporate action, and, at the Firm Closing Date
or the related Option Closing Date (as the case may be), the Securities will
have been duly executed and delivered by the Company, and if applicable,
assuming due authorization, execution and delivery of the Securities by parties
other than the Company, will be the legal, valid, binding and enforceable
obligations of the Company, subject to the effect of bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization and similar laws relating to
creditors' rights generally and to the application of equitable principles in
any proceeding, whether at law or in equity.
(j) The securities of the Company issuable in exchange for or
upon conversion of the Securities as specified in Schedule 1 to this Agreement
(the "Underlying Securities") have been duly authorized and reserved, and, when
such securities are issued and delivered as contemplated by the terms of the
applicable Securities Document, such securities will be validly issued, fully
paid and non-assessable.
(g) The execution and delivery of the Securities Documents has
been duly authorized by all necessary corporate action of the Company, and, at
the Firm Closing Date or the related Option Closing Date (as the case may be),
such agreements will have been duly executed and delivered by the Company, and
assuming due authorization, execution and delivery of the Securities Documents
by parties other than the Company as specified in the applicable Securities
Documents, and, if required, such Securities Documents have been filed with the
Secretary of State of the State of Maryland or any other applicable
jurisdiction, and such agreements will constitute valid and binding instruments
of the Company enforceable against the
5
<PAGE>
Company in accordance with their respective terms, subject to the effect of
bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and
similar laws relating to creditors' rights generally and to the application of
equitable principles in any proceeding, whether at law or in equity.
(k) No holders of outstanding shares of capital stock of the
Company are entitled as such to any preemptive or other rights to subscribe for
any of the Securities or Underlying Securities, and no holder of securities of
the Company or any Subsidiary has any right which has not been waived to require
the Company to register the offer or sale of any securities owned by such holder
under the Act in the public offering contemplated by this Agreement.
(l) The Securities and Underlying Securities conform to their
description contained in the Prospectus and any Integrated Prospectus (or, if
the Prospectus and any required Integrated Prospectus are not in existence, the
most recent Preliminary Prospectus).
(m) The combined financial statements and schedules of the
Company and the Cali Group (as defined in the Registration Statement) and the
consolidated financial statements and schedules of the Company and its
consolidated subsidiaries included in or incorporated by reference in the
Registration Statement, the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus) fairly present the combined financial position of
the Company and the Cali Group and fairly present the consolidated financial
position of the Company and its consolidated subsidiaries, as the case may be,
and the results of operations and changes in financial condition as of the dates
and periods therein specified. Such combined and consolidated financial
statements and schedules have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved (except as otherwise noted therein).
(n) The selected financial data set forth under the caption
"Selected Financial Data" in the Prospectus and any Integrated Prospectus (or,
if the Prospectus and any required Integrated Prospectus are not in existence,
the most recent Preliminary Prospectus) fairly present, on the basis stated in
the Prospectus and any Integrated Prospectus (or such Preliminary Prospectus)
and such Annual Report, the information included therein. The pro forma
financial statements and other pro forma financial information included in or
incorporated therein in the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus) comply in all material respects with the
applicable requirements of Rule 11-02 of Regulation S-X of the Commission and
the pro forma adjustments have been properly applied to the historical amounts
in the compilation
6
<PAGE>
of such statements and the assumptions used in the preparation thereof are, in
the opinion of the Company, reasonable.
(o) Price Waterhouse LLP, which has certified certain
financial statements of the Company and its consolidated subsidiaries and of the
Cali Group and delivered its reports with respect to the audited consolidated
financial statements and schedules, and any other accounting firm that has
certified financial statements and delivered its reports with respect thereto,
included or incorporated by reference in the Registration Statement, the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus), are independent public accountants as required by the Act, the
Exchange Act and the respective rules and regulations thereunder.
(p) The execution and delivery of this Agreement has been duly
authorized by the Company and this Agreement has been duly executed and
delivered by the Company, and is the valid and binding agreement of the Company
enforceable against the Company in accordance with the terms hereof, subject to
the effect of bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws relating to creditors' rights generally and to
the application of equitable principles in any proceeding, whether at law or in
equity and except as rights to indemnity and contribution hereunder may be
limited by federal or state securities laws or principles of public policy.
(q) No legal or governmental proceedings are pending to which
the Company or any of the Subsidiaries or to which the property of the Company
or any of the Subsidiaries is subject, that are required to be described in the
Registration Statement, the Prospectus or any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus) and are not described therein, and no such
proceedings have been threatened against the Company or any of the Subsidiaries;
and no contract or other document is required to be described in the
Registration Statement, the Prospectus or any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus) or to be filed as an exhibit to the Registration
Statement that is not described therein or filed as required.
(r) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement and the Securities
Documents, the compliance by the Company with the other provisions of this
Agreement, the Securities and the Securities Documents and the consummation of
the other transactions herein and therein contemplated do not (i) require the
consent, approval, authorization, registration or qualification of or with any
governmental authority, except such as have been obtained, such as may be
required under state securities or blue sky laws and, if the registration
statement filed with respect to the Securities (as amended)
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is not effective under the Act as of the time of execution hereof, such as may
be required (and shall be obtained as provided in this Agreement) under the Act,
or (ii) conflict with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any of the properties or
assets of the Company or any of the Subsidiaries pursuant to any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which the Company or any of
the Subsidiaries or any other of their respective properties are bound, or the
Articles of Incorporation, By-laws or other organizational documents, as the
case may be, of the Company or any of the Subsidiaries, or any statute or any
judgment, decree, order, rule or regulation of any court or other governmental
authority or any arbitrator applicable to the Company or any of the Subsidiaries
or any of their properties.
(s) The Company has not, directly or indirectly, (i) taken any
action designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) since the filing of the Registration Statement (A) sold, bid
for, purchased, or paid anyone any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(t) Subsequent to the respective dates as of which information
is given in the Registration Statement, the Prospectus and any Integrated
Prospectus (or, if the Prospectus and any required Integrated Prospectus are not
in existence, the most recent Preliminary Prospectus), (1) neither the Company
nor any of the Subsidiaries has incurred any material liability or obligation,
direct or contingent, or entered into any material transaction, which is not in
the ordinary course of business; (2) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock; and (3) there has not been any
material change in the capital stock, short-term debt or long-term debt of the
Company or the Subsidiaries, except in each case as described in or contemplated
by the Prospectus and any Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus).
(u) The Company or the Subsidiaries have good and indefeasible
title in fee simple to all of the Properties (as defined in the Prospectus) and
marketable title to all other property owned by each of them, in each case free
and clear of any security interest, lien, mortgage, pledge, encumbrance, equity,
claim and other defect, except liens which do not materially and adversely
affect the value of such property and will not interfere with the use made or
proposed to be made of such property by the Company or such Subsidiary, and any
and all real property and buildings held under lease by the Company or any such
Subsidiary are held under
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valid, subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the use made or proposed to be made of such
property and buildings by the Company or such Subsidiary, in each case except as
described in the Prospectus and any Integrated Prospectus (or, if the Prospectus
and any required Integrated Prospectus are not in existence, the most recent
Preliminary Prospectus).
(v) No labor dispute with the employees of the Company or any
of the Subsidiaries exists or is threatened or imminent that could result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and the
Subsidiaries, taken as a whole, except as described in the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus).
(w) The Company and the Subsidiaries own or possess, or can
acquire on reasonable terms, all material patents, trademarks, service marks,
trade names, licenses, copyrights and proprietary and other confidential
information currently employed by them in connection with their respective
businesses, and neither the Company nor any of the Subsidiaries has received any
notice of infringement of or conflict with asserted rights of any third party
with respect to the foregoing which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a material
adverse change in the condition (financial or otherwise), business prospects,
net worth or results of operations of the Company and the Subsidiaries, taken as
a whole, except as described in the Prospectus and any Integrated Prospectus
(or, if the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus).
(x) The Company and each of the Subsidiaries is insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
will be engaged; neither the Company nor any of the Subsidiaries has been
refused any insurance coverage sought or applied for; and neither the Company
nor any of the Subsidiaries has any reason to believe that any of them will not
be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have material adverse effect
on the condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and the Subsidiaries, taken as a whole,
except as described in the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus).
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(y) None of the Subsidiaries is currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock or other equity interest, from
repaying to the Company any loans or advances to such Subsidiary from the
Company or from transferring any of such Subsidiary's property or assets to the
Company or any of the other Subsidiaries, except as described in the Prospectus
and any Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus).
(z) The Company and each of the Subsidiaries has complied with
all laws, regulations and orders applicable to it or its respective business and
properties except where the failure to so comply would not result in a material
adverse change in the condition (financial or otherwise), business prospects,
net worth or results of operations of the Company and the Subsidiaries, taken as
a whole; the Company and the Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state, municipal
or foreign regulatory authorities necessary to conduct their respective
businesses except where the failure to possess the same would not result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and the
Subsidiaries, taken as a whole; and neither the Company nor any of the
Subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a material adverse change in the condition (financial
or otherwise), business prospects, net worth or results of operations of the
Company and the Subsidiaries, taken as a whole, except as described in the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus).
(aa) The Company will conduct its operations in a manner that
will not subject it to registration as an investment company under the
Investment Company Act of 1940, as amended, and the transactions contemplated by
this Agreement will not cause the Company to become an investment company
subject to registration under such Act.
(bb) The Company and each of the Subsidiaries has filed all
foreign, federal, state and local tax returns that are required to be filed or
have requested extensions thereof (except in any case in which the failure so to
file would not have a material adverse effect on the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and the Subsidiaries, taken as a whole) and has paid all taxes required
to be paid by it and any other assessment, fine or penalty levied against it, to
the extent that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good faith or
as described in the Prospectus and any Integrated Prospectus (or,
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<PAGE>
if the Prospectus and any required Integrated Prospectus are not in existence,
the most recent Preliminary Prospectus).
(cc) The Company is organized in conformity with the
requirements for qualification as a real estate investment trust (a "REIT")
under the Internal Revenue Code of 1986, as amended (the "Code"), and the
present and contemplated method of operation of the Company and the Subsidiaries
does and will enable the Company to meet the requirements for taxation as a REIT
under the Code.
(dd) Neither the Company nor any of the Subsidiaries is in
violation of any federal or state law or regulation relating to occupational
safety and health and the Company and the Subsidiaries have received all
permits, licenses or other approvals required of them under applicable federal
and state occupational safety and health and environmental laws and regulations
to conduct their respective businesses, and the Company and each of the
Subsidiaries is in compliance with all terms and conditions of any such permit,
license or approval, except any such violation of law or regulation, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals which would not,
singly or in the aggregate result in a material adverse change in the condition
(financial or otherwise), business prospects, net worth or results of operations
of the Company and the Subsidiaries, taken as a whole, except as described in
the Prospectus and any Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus).
(ee) Except for the shares of capital stock of each of the
Subsidiaries owned by the Company or another Subsidiary, neither the Company nor
any of the Subsidiaries owns any shares of stock or any other equity securities
of any corporation or has any equity interest in any firm, partnership,
association or other entity, except as described in or contemplated by the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus).
(ff) The Company and the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or specific
authorizations; (2) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (3) access to assets is
permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
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(gg) Neither the Company nor any of the Subsidiaries is in
violation of any term or provision of its Articles of Incorporation, By-laws,
partnership agreements or other organizational documents, as the case may be; no
default exists, and no event has occurred which, with notice or lapse of time or
both, would constitute a default, and the consummation of the transactions by
this Agreement and under the Securities Documents will not result in any default
in the due performance and observance of any term, covenant or condition of any
indenture, mortgage, deed of trust, lease or other agreement or instrument to
which the Company or any Subsidiary is a party or by which the Company, the
Subsidiaries or the Properties or any of their respective other properties is
bound or may be affected except such as would not result in any material adverse
effect in the condition (financial or otherwise), business prospects, net worth
or results of operations of the Company and the Subsidiaries, taken as a whole.
(hh) If required as set forth in Schedule 1 hereto, the
Securities and any Underlying Securities have been approved for listing on the
New York Stock Exchange, subject to official notice of issuance.
(ii) (A) Neither the Company nor any Subsidiary knows of any
violation of any municipal, state or federal law, rule or regulation (including
those pertaining to environmental matters) concerning the Properties or any part
thereof which would have a material adverse effect in the condition (financial
or otherwise), business prospects, net worth or results of operations of the
Company and the Subsidiaries, taken as a whole; (B) each of the Properties
complies with all applicable zoning laws, ordinances, regulations and deed
restrictions or other covenants in all material respects and, if and to the
extent there is a failure to comply, such failure does not materially impair the
value of any of the Properties and will not result in a forfeiture or reversion
of title; (C) neither the Company nor any Subsidiary has received from any
governmental authority any written notice of any condemnation of or zoning
change affecting the Properties or any part thereof, and neither the Company nor
any Subsidiary knows of any such condemnation or zoning change which is
threatened and which if consummated would have a material adverse effect in the
condition (financial or otherwise), business prospects, net worth or results of
operations of the Company and the Subsidiaries, taken as a whole; (D) all liens,
charges, encumbrances, claims, or restrictions on or affecting the properties
and assets (including the Properties) of the Company or any of the Subsidiaries
that are required to be described in the Prospectus and any Integrated
Prospectus (or, if the Prospectus and any required Integrated Prospectus are not
in existence, the most recent Preliminary Prospectus) are disclosed therein; (E)
no lessee of any portion of any of the Properties is in default under any of the
leases governing such properties and there is no event which, but for the
passage of time or the giving of notice or both would constitute a default under
any of such leases, except such defaults that would not have a material adverse
effect in the condition (financial or otherwise), business prospects, net worth
or results of operations of the Company and the Subsidiaries, taken as a whole;
and (F) except as
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<PAGE>
provided by law no tenant under any lease pursuant to which the Company or any
of the Subsidiaries leases the Properties will have an option or right of first
refusal to purchase the premises leased thereunder or the building of which such
premises are a part.
(jj) Except as otherwise disclosed in the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus) or in
the Phase I Environmental Audits prepared by Environmental Waste Management
Associates, Inc. previously delivered to the Representatives (the "Audits"), (i)
neither the Company, any of the Subsidiaries nor, to the best knowledge of the
Company, any other owners of the property at any time or any other party has at
any time, handled, stored, treated, transported, manufactured, spilled, leaked,
or discharged, dumped, transferred or otherwise disposed of or dealt with,
Hazardous Materials (as hereinafter defined) on, to or from the Properties,
other than by any such action taken in compliance with all applicable
Environmental Statutes or by the Company, any of the Subsidiaries or any other
party in connection with the ordinary use of residential, retail or commercial
properties owned by the Company; (ii) the Company does not intend to use the
Properties or any subsequently acquired properties for the purpose of handling,
storing, treating, transporting, manufacturing, spilling, leaking, discharging,
dumping, transferring or otherwise disposing of or dealing with Hazardous
Materials other than by any such action taken in compliance with all applicable
Environmental Statues or by the Company, any of the Subsidiaries or any other
party in connection with the ordinary use of residential, retail or commercial
properties owned by the Company; (iii) neither the Company nor any of the
Subsidiaries knows of any seepage, leak, discharge, release, emission, spill, or
dumping of Hazardous Materials into waters on or adjacent to the Properties or
any other real property owned or occupied by any such party, or onto lands from
which Hazardous Materials might seep, flow or drain into such waters; (iv)
neither the Company nor any of the Subsidiaries has received any notice of, or
has any knowledge of any occurrence or circumstance which, with notice or
passage of time or both, would give rise to a claim under or pursuant to any
federal, state or local environmental statute or regulation or under common law,
pertaining to Hazardous Materials on or originating from any of the Properties
or any assets described in the Prospectus and any Integrated Prospectus (or, if
the Prospectus and any required Integrated Prospectus are not in existence, the
most recent Preliminary Prospectus) or any other real property owned or occupied
by any such party or arising out of the conduct of any such party, including
without limitation a claim under or pursuant to any Environmental Statute
(hereinafter defined); (v) neither the Properties nor any other land owned by
the Company or any of the Subsidiaries is included or, to the best of the
Company's knowledge, proposed for inclusion on the National Priorities List
issued pursuant to CERCLA (as hereinafter defined) by the United States
Environmental Protection Agency (the "EPA") or, to the best of the Company's
knowledge, proposed for inclusion on any similar list or inventory issued
pursuant to any other Environmental Statute or issued by any other Governmental
Authority (as hereinafter defined).
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As used herein, "Hazardous Material" shall include, without
limitation any flammable explosives, radioactive materials, hazardous materials,
hazardous wastes, toxic substances, or related materials, asbestos or any
hazardous material as defined by any federal, state or local environmental law,
ordinance, rule or regulation including without limitation the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. ss.ss. 9601-9675 ("CERCLA"), the Hazardous Materials Transportation Act,
as amended, 49 U.S.C. ss.ss. 1801-1819, the Resource Conservation and Recovery
Act, as amended, 42 U.S.C. ss.ss. 6901-6992K, the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. ss.ss. 11001-11050, the Toxic
Substances Control Act, 15 U.S.C. ss.ss. 2601-2671, the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C. ss.ss. 136-136y, the Clean Air Act, 42
U.S.C. ss.ss. 7401-7642, the Clean Water Act (Federal Water Pollution Control
Act), 33 U.S.C. ss.ss. 1251- 1387, the Safe Drinking Water Act, 42 U.S.C. ss.ss.
300f-300j-26, and the Occupational Safety and Health Act, 29 U.S.C. ss.ss.
651-678, as any of the above statutes may be amended from time to time, and in
the regulations promulgated pursuant to each of the foregoing (individually, an
"Environmental Statute") or by any federal, state or local governmental
authority having or claiming jurisdiction over the properties and assets
described in the Prospectus (a "Governmental Authority").
(kk) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters shall be deemed
to be a representation and warranty by the Company to each Underwriter as to the
matters covered thereby.
(ll) The Company has not distributed and, prior to the later
of (i) the Closing Date and (ii) the completion of the distribution of the
Securities, will not distribute any material in connection with the offering and
sale of the Securities other than the Registration Statement or any amendment
thereto, any Preliminary Prospectus, the Prospectus or any Integrated Prospectus
or any amendment or supplement thereto, or other materials, if any, permitted by
the Act.
3. Purchase, Sale and Delivery of the Securities.
(a) On the basis of the representations, warranties,
agreements and covenants herein contained and subject to the terms and
conditions herein set forth, the Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters, severally and not jointly, agrees to
purchase from the Company, at the purchase price specified in Schedule 1 hereto,
the number of Firm Securities set forth opposite the name of such Underwriter in
Schedule 2 hereto. One or more certificates in definitive form for the Firm
Securities that the several Underwriters have agreed to purchase hereunder, and
in such denomination or denominations and registered in such name or names as
the Representatives request upon notice to the Company at
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<PAGE>
least 48 hours prior to the Firm Closing Date, shall be delivered by or on
behalf of the Company to the Representatives for the respective accounts of the
Underwriters, against payment by or on behalf of the Underwriters of the
purchase price therefor to the Company in such funds as are specified in
Schedule 1 hereto. Such delivery of and payment for the Firm Securities shall be
made at the date, time and place identified in Schedule 1 hereto, or at such
other date, time or place as the Representatives and the Company may agree upon
or as the Representatives may determine pursuant to Section 8 hereof, such date
and time of delivery against payment being herein referred to as the "Firm
Closing Date". The Company will make such certificate or certificates for the
Firm Securities available for checking and packaging by the Representatives at
the offices in New York, New York of the Company's transfer agent or registrar
or warrant agent or of Prudential Securities Incorporated at least 24 hours
prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in
connection with the distribution and sale of the Firm Securities as contemplated
by the Prospectus and any Integrated Prospectus, the Company hereby grants to
the several Underwriters an option to purchase, severally and not jointly, the
Option Securities. The purchase price to be paid for any Option Securities shall
be the same price per share as the price per share for the Firm Securities set
forth in Schedule 1 to this Agreement, plus, if the purchase and sale of any
Option Securities takes place after the Firm Closing Date and after the Firm
Securities are trading "ex-dividend", an amount equal to the dividends payable
on such Option Securities. The option granted hereby may be exercised as to all
or any part of the Option Securities from time to time within thirty days after
the date of the Prospectus or any Integrated Prospectus (or, if such 30th day
shall be a Saturday or Sunday or a holiday, on the next business day thereafter
when the New York Stock Exchange is open for trading). The Underwriters shall
not be under any obligation to purchase any of the Option Securities prior to
the exercise of such option. The Representatives may from time to time exercise
the option granted hereby by giving notice in writing or by telephone (confirmed
in writing) to the Company setting forth the aggregate number of Option
Securities as to which the several Underwriters are then exercising the option
and the date and time for delivery of and payment for such Option Securities.
Any such date of delivery shall be determined by the Representatives but shall
not be earlier than two business days or later than five business days after
such exercise of the option and, in any event, shall not be earlier than the
Firm Closing Date. The time and date set forth in such notice, or such other
time on such other date as the Representatives and the Company may agree upon or
as the Representatives may determine pursuant to Section 9 hereof, is herein
called the "Option Closing Date" with respect to such Option Securities. Upon
exercise of the option as provided herein, the Company shall become obligated to
sell to each of the several Underwriters, and, subject to the terms and
conditions herein set forth, each of the Underwriters (severally and not
jointly) shall become obligated to purchase from the Company the same percentage
of the total number of the Option Securities as
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<PAGE>
to which the several Underwriters are then exercising the option as such
Underwriter is obligated to purchase of the aggregate number of Firm Securities,
as adjusted by the Representatives in such manner as they deem advisable to
avoid fractional shares. If the option is exercised as to all or any portion of
the Option Securities, one or more certificates in definitive form for such
Option Securities, and payment therefor, shall be delivered on the related
Option Closing Date in the manner, and upon the terms and conditions, set forth
in paragraph (a) of this Section 3 and Schedule 1 to this Agreement, except that
reference therein to the Firm Securities and the Firm Closing Date shall be
deemed, for purposes of this paragraph (b), to refer to such Option Securities
and Option Closing Date, respectively.
(c) It is understood that any of you, individually and not as
one of the Representatives, may (but shall not be obligated to) make payment on
behalf of any Underwriter or Underwriters for any of the Securities to be
purchased by such Underwriter or Underwriters. No such payment shall relieve
such Underwriter or Underwriters from any of its or their obligations hereunder.
4. Covenants of the Company. The Company covenants and agrees with
each of the Underwriters that:
(a) The Company will file the Prospectus or any Term Sheet
that constitutes a part thereof, any Integrated Prospectus or the Prospectus
Supplement, as the case may be, and any amendment or supplement thereto with the
Commission in the manner and within the time period required by Rules 434 and
424(b) under the Act. During any time when a prospectus relating to the
Securities is required to be delivered under the Act, the Company (i) will
comply with all requirements imposed upon it by the Act and the Exchange Act and
the respective rules and regulations of the Commission thereunder to the extent
necessary to permit the continuance of sales of or dealings in the Securities in
accordance with the provisions hereof and of the Prospectus and any Integrated
Prospectus, as then amended or supplemented, and (ii) will not file with the
Commission the Prospectus, Term Sheet, any Integrated Prospectus or any
amendment or supplement thereto or any amendment to the Registration Statement
of which the Representatives shall not previously have been advised and
furnished with a copy for a reasonable period of time prior to the proposed
filing and as to which filing the Representatives shall not have given their
consent. The Company will prepare and file with the Commission, in accordance
with the rules and regulations of the Commission, promptly upon request by the
Representatives or counsel for the Underwriters, any amendment to the
Registration Statement or amendment or supplement to the Prospectus and any
Integrated Prospectus that may be necessary or advisable in connection with the
distribution of the Securities by the several Underwriters, and will use its
best efforts to cause any such amendment to the Registration Statement to be
declared effective by the Commission as promptly as possible. The Company will
advise the Representatives,
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<PAGE>
promptly after receiving notice thereof, of the time when any amendment to the
Registration Statement has been filed or declared effective or the Prospectus,
any Integrated Prospectus or any amendment or supplement thereto has been filed
and will provide evidence satisfactory to the Representatives of each such
filing or effectiveness.
(b) The Company will advise the Representatives, promptly
after receiving notice or obtaining knowledge thereof, of (i) the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or any order
directed at any document incorporated by reference in the Registration
Statement, the Prospectus or any Integrated Prospectus or any amendment or
supplement thereto or any order preventing or suspending the use of any
Preliminary Prospectus, the Prospectus or any Integrated Prospectus or any
amendment or supplement thereto, (ii) the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, (iii) the institution,
threatening or contemplation of any proceeding for any such purpose or (iv) any
request made by the Commission for amending the Registration Statement, for
amending or supplementing any Preliminary Prospectus, the Prospectus or any
Integrated Prospectus or for additional information. The Company will use its
best efforts to prevent the issuance of any such stop order and, if any such
stop order is issued, to obtain the withdrawal thereof as promptly as possible.
(c) If required by applicable law, the Company will arrange
for the qualification of the Securities and any Underlying Securities for
offering and sale under the securities or blue sky laws of such jurisdictions as
the Representatives may designate and will continue such qualifications in
effect for as long as may be necessary to complete the distribution of the
Securities and any Underlying Securities; provided, however, that in connection
therewith the Company shall not be required to qualify as a foreign corporation
or to execute a general consent to service of process in any jurisdiction.
(d) If at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs as a
result of which the Prospectus or any Integrated Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or if for
any other reason it is necessary at any time to amend or supplement the
Prospectus or any Integrated Prospectus to comply with the Act or Exchange Act
or the respective rules or regulations of the Commission thereunder, the Company
will promptly notify the Representatives thereof and, subject to Section 4(a) of
this Agreement, will prepare and file with the Commission, at the Company's
expense, an amendment to the Registration Statement or an amendment or
supplement to the Prospectus and any Integrated Prospectus that corrects such
statement or omission or effects such compliance.
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(e) The Company will, without charge, provide (i) to the
Representatives and to counsel for the Underwriters, a conformed copy of the
registration statement originally filed with respect to the Securities and any
amendment thereto (in each case including exhibits thereto), (ii) to each other
Underwriter, a conformed copy of such registration statement and any amendment
thereto relating to the Securities (in each case without exhibits thereto) and
(iii) so long as a prospectus relating to the Securities is required to be
delivered under the Act, as many copies of each Preliminary Prospectus, the
Prospectus or any Integrated Prospectus or any amendment or supplement thereto
as the Representatives may reasonably request; without limiting the application
of clause (iii) of this sentence, the Company, not later than (A) 6:00 p.m., New
York city time, on the date of determination of the public offering price, if
such determination occurred at or prior to 10:00 AM, New York City time, on such
date or (B) 12:00 Noon, New York City time, on the business day following the
date of determination of the public offering price, if such determination
occurred after 10:00 AM, New York city time, on such date, will deliver to the
Representatives, without charge, as many copies of the Prospectus or any
Integrated Prospectus and any amendment or supplement thereto as the
Representatives may reasonably request for purposes of confirming orders that
are expected to settle on the Firm Closing Date.
(f) The Company, as soon as practicable, will make generally
available to its securityholders and to the Representatives a consolidated
earning statement of the Company and its subsidiaries that satisfies the
provisions of Section 11(a) of the Act and Rule 158 thereunder.
(g) The Company will apply the net proceeds from the sale of
the Securities as set forth under "Use of Proceeds" in the Prospectus and any
Integrated Prospectus.
(h) The Company will not, directly or indirectly, without the
prior written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of (i) any securities of the Company that are
substantially similar to the Securities or the Underlying Securities, (ii) any
securities convertible into, or exchangeable or exercisable for, the Securities
or Underlying Securities to any unaffiliated third party for a period commencing
on the date hereof and terminating 90 days after the date of the Prospectus or
any Integrated Prospectus, except pursuant to this agreement; provided, however,
that the Company may issue shares of Common Stock in exchange for Units existing
at the date of this Agreement. Prudential Securities Incorporated, at any time
and without notice, may release all or any portion of the securities subject to
such agreement.
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(i) If required as set forth in Schedule 1 hereto, the Company
will obtain the agreements described in Section 6(g) hereof prior to the Firm
Closing Date.
(j) The Company will not, directly or indirectly, (i) take any
action designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of the Securities or (B) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company.
(k) If at any time during the 25-day period after the
Registration Statement becomes effective or the period prior to the Option
Closing Date, any rumor, publication or event relating to or affecting the
Company shall occur as a result of which in your opinion the market price of the
Common Stock has been or is likely to be materially affected (regardless of
whether such rumor, publication or event necessitates a supplement to or
amendment of the Prospectus or any Integrated Prospectus), the Company will,
after written notice from you advising the Company to the effect set forth
above, forthwith prepare, consult with you concerning the substance of, and
disseminate a press release or other public statement, reasonably satisfactory
to you, responding to or commenting on such rumor, publication or event.
(l) If required as set forth in Schedule 1 hereto, the Company
will cause the Securities and any Underlying Securities to be duly authorized
for listing by the New York Stock Exchange.
(m) The Company will continue to use its best efforts to meet
the requirements to qualify as a REIT under the Code.
5. Expenses. The Company will pay all costs and expenses incident to
the performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 10 hereof, including all costs and expenses incident to (i)
the printing or other production of documents with respect to the transactions,
including any costs of printing the registration statement originally filed with
respect to the Securities and any amendment thereto, any Preliminary Prospectus,
the Prospectus and any Integrated Prospectus and any amendment or supplement
thereto, this Agreement, the Securities Documents and any blue sky memoranda,
(ii) all arrangements relating to the delivery to the Underwriters of copies of
the foregoing documents, (iii) the fees and disbursements of counsel,
accountants and any other experts or advisors retained by the Company, (iv)
preparation, issuance and delivery to the Underwriters of any certificates
evidencing the Securities, including the fees and expenses of the transfer
agent, exchange agent or registrar, (v) the qualification, if
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any, of the Securities and any Underlying Securities under state securities and
blue sky laws and real estate syndication laws, including filing fees and fees
and disbursements of counsel for the Underwriters relating thereto and relating
to the preparation of a blue sky memoranda, (vi) the filing fees of the
Commission relating to the Securities, (vii) any listing of the Securities and
Underlying Securities on the New York Stock Exchange, (viii) any meetings with
prospective investors in the Securities arranged by the Company (other than as
shall have been specifically approved by the Representatives to be paid for by
the Underwriters) and (ix) advertising relating to the offering of the
Securities requested by the Company (other than as shall have been specifically
approved by the Representatives to be paid for by the Underwriters). If the sale
of the Securities provided for herein is not consummated because any condition
to the obligations of the Underwriters set forth in Section 6 of this Agreement
is not satisfied, because this Agreement is terminated pursuant to Section 10 of
this Agreement or because of any failure, refusal or inability on the part of
the Company to perform all obligations and satisfy all conditions on its part to
be performed or satisfied hereunder other than by reason of a default by and of
the Underwriters, the Company will reimburse the Underwriters severally upon
demand for all out-of-pocket expenses (including counsel fees and disbursements)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Securities. The Company shall not in any event be liable to any
of the Underwriters for the loss of anticipated profits from the transactions
covered by this Agreement.
6. Conditions of the Underwriters' Obligations. The obligations of
the Underwriters to purchase and pay for the Firm Securities shall be subject,
in the Representatives' sole discretion, to the accuracy of the representations
and warranties of the Company contained herein as of the date of this Agreement
as specified in Schedule 1 hereto and as of the Firm Closing Date, as if made on
and as of the Firm Closing Date, to the accuracy of the statements of the
Company's officers made pursuant to the provisions hereof, to the performance by
the Company of its covenants and agreements hereunder and to the following
additional conditions:
(a) The Prospectus, any Integrated Prospectus or the
Prospectus Supplement, as the case may be, and any amendment or supplement
thereto shall have been filed with the Commission in the manner and within the
time period required by Rules 434 and 424(b) under the Act; no stop order
suspending the effectiveness of the Registration Statement or any post-effective
amendment thereto and no order directed at any document incorporated by
reference in the Registration Statement, the Prospectus or any Integrated
Prospectus or any amendment or supplement thereto shall have been issued, and no
proceedings for that purpose shall have been instituted or threatened or, to the
knowledge of the Company or the Representatives, shall be contemplated by the
Commission; and the Company shall have complied with any request of the
Commission for additional information (to be included in the Registration
Statement, the Prospectus or any Integrated Prospectus or otherwise).
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(b) The Representatives shall have received an opinion, dated
the Firm Closing Date, from Pryor, Cashman, Sherman & Flynn, counsel for the
Company, to the effect that:
(i) the Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Maryland and is duly qualified to transact business and is in good
standing under the laws of all other jurisdictions where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified does not amount
to a material liability or disability to the Company and the Subsidiaries,
taken as a whole. Each of the Subsidiaries has been duly organized and is
validly existing as a general or limited partnership or corporation in
good standing under the laws of the jurisdiction of its organization, and
is duly qualified to transact business and is in good standing under the
laws of all other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such qualification,
except where the failure to be so qualified does not amount to a material
liability or disability to the Company and the Subsidiaries, taken as a
whole;
(ii) the Company and each of the Subsidiaries have full
power, corporate or other, to own or lease their respective properties and
conduct their respective businesses as described in the Registration
Statement, the Prospectus and any Integrated Prospectus and each of the
Company and the Subsidiaries have full power, corporate or other, to enter
into this Agreement and the Securities Documents and to carry out all the
terms and provisions hereof and thereof to be carried out by it;
(iii) the issued shares of capital stock of each of the
Subsidiaries that is a corporation are duly authorized, validly issued,
fully paid and nonassessable, and all of the partnership interests in each
Subsidiary that is a partnership are validly issued and fully paid. Except
as described in the Registration Statement, the Prospectus and any
Integrated Prospectus, all of such shares and interests owned by the
Company or another Subsidiary are owned beneficially by the Company or
such Subsidiary free and clear of any security interest, mortgage, pledge,
lien, encumbrance, equity or claim;
(iv) the Company has an authorized, issued and
outstanding capitalization as set forth in the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus).
All of the capital stock of the Company has been duly authorized and the
capital stock of the Company outstanding is validly issued, fully paid and
nonassessable;
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<PAGE>
(v) the Securities have been duly authorized, and when
executed and delivered against payment therefor in accordance with the
Underwriting Agreement, will be validly issued, fully paid and
non-assessable, and the execution and delivery of the Securities (other
than any Contract Securities) have been duly authorized by all necessary
corporate action, and the Securities have been duly executed and delivered
by the Company, and assuming due authorization, execution and delivery of
the Securities by parties other than the Company, are, and any Contract
Securities, when executed and delivered in the manner provided in the
Securities Documents, will be, the legal, valid, binding and enforceable
obligations of the Company, subject to the effect of bankruptcy,
insolvency, moratorium, fraudulent conveyance, reorganization and similar
laws relating to creditors' rights generally and to the application of
equitable principles in any proceeding, whether at law or in equity;
(vi) the Underlying Securities have been duly authorized
and reserved, and, when such securities are issued and delivered as
contemplated by the terms of the applicable Securities Document such
securities will be validly issued, fully paid and non-assessable;
(vii) the execution and delivery of the Securities
Documents has been duly authorized by all necessary corporate action of
the Company, and have been duly executed and delivered by the Company, and
assuming due authorization, execution and delivery of the Securities
Documents by parties other than the Company as specified in the applicable
Securities Documents, such agreements are valid and binding instruments of
the Company enforceable against the Company in accordance with their
respective terms, subject to the effect of bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization and similar laws
relating to creditors' rights generally and to the application of
equitable principles in any proceeding, whether at law or in equity;
(viii)no holders of outstanding shares of capital stock
of the Company are entitled as such to any preemptive or other rights to
subscribe for any of the Securities or Underlying Securities, and no
holder of securities of the Company or any Subsidiary has any right which
has not been waived to require the Company to register the offer or sale
of any securities owned by such holder under the Act in the public
offering contemplated by this Agreement;
(ix) the statements set forth under the heading
"Description of Common Stock", "Description of Preferred Stock" and
"Description of Warrants" in the Prospectus and any Integrated Prospectus
insofar as such statements purport to summarize certain provisions of the
Securities of the Company, provide a fair summary of such
22
<PAGE>
provisions; and the statements set forth under the headings "Restrictions
on Ownership of Offered Securities" and "Certain United States Federal
Income Tax Considerations to the Company of its REIT Election" in the
Prospectus and "Risk Factors", "Certain United States Federal Income Tax
Considerations to Holders of Common Stock" and "Underwrit ing", in the
Prospectus Supplement, insofar as such statements constitute a summary of
the legal matters, documents or proceedings referred to therein, provide a
fair summary of such legal matters, documents and proceedings;
(x) the execution and delivery of this Agreement has
been duly authorized by all necessary corporate action of the Company and
this Agreement has been duly executed and delivered by the Company, and
are the valid and binding agreements of the Company, enforceable against
the Company in accordance with their respective terms, subject to the
effect of bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws relating to creditors' rights generally
and to the application of equitable principles in any proceeding, whether
at law or in equity and except as rights to indemnity and contribution
hereunder may be limited by federal or state securities laws or principles
of public policy;
(xi) (A) no legal or governmental proceedings are
pending to which the Company, any of the Subsidiaries, or any of their
respective directors or officers in their capacity as such, is a party or
to which the Properties or any other property of the Company or any of the
Subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not described therein,
and, to the best knowledge of such counsel, no such proceedings have been
threatened against the Company or any of the Subsidiaries or with respect
to the Properties or any of their respective other properties and (B) no
contract or other document is required to be described in the Registration
Statement, the Prospectus or any Integrated Prospectus or to be filed as
an exhibit to the Registration Statement that is not described therein or
filed as required;
(xii) the issuance, offering and sale of the Securities
to the Underwriters by the Company pursuant to this Agreement, the
compliance by the Company with the other provisions of this Agreement, any
Securities Documents and the consummation of the other transactions herein
contemplated do not (A) require the consent, approval, authorization,
registration or qualification of or with any governmental authority,
except such as have been obtained and such as may be required under state
securities or blue sky laws (as to which such counsel need not opine) or
(B) conflict with or result in a breach or violation of any of the terms
and provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance
23
<PAGE>
upon any of the Properties or any other properties or assets of the
Company or any of the Subsidiaries pursuant to any indenture, mortgage,
deed of trust, lease or other agreement or instrument to which the Company
or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries or the Properties or any other of their respective
properties are bound, or the Articles of Incorporation, By-laws or other
organizational documents, as the case may be, of the Company or any of the
Subsidiaries, or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or (to the best
knowledge of such counsel) any arbitrator applicable to the Company or any
of the Subsidiaries or any of the Properties;
(xiii) none of the Subsidiaries is currently
contractually prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on such
subsidiary's capital stock or other equity interests, from repaying to the
Company any loans or advances to such Subsidiary from the Company or from
transferring any of such Subsidiary's property or assets to the Company or
any of the other Subsidiaries, except as described in the Prospectus and
any Integrated Prospectus;
(xiv) to the best knowledge of such counsel, the Company
and the Subsidiaries possess all certificates, authorizations, licenses
and permits issued by the appropriate federal, state, municipal or foreign
regulatory authorities necessary to conduct their respective businesses
except for such certificates, authorizations, licenses and permits the
failure of which to possess would not be expected to result in a material
adverse change in the condition (financial or otherwise), business,
prospects, net worth or results of operations of the Company and the
Subsidiaries, taken as a whole, and neither the Company nor any of the
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization, license
or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material
adverse change in the condition (financial or otherwise), business,
prospects, net worth or results of operations of the Company and the
Subsidiar ies, taken as a whole, except as described in the Prospectus and
any Integrated Prospectus;
(xv) the Company is not subject to registration as an
investment company under the Investment Company Act of 1940, as amended,
and the transactions contemplated by this Agreement will not cause the
Company to become an investment company subject to registration under such
Act;
(xvi) neither the Company nor any of the Subsidiaries is
in violation of any term or provision of its articles of incorporation,
bylaws, partnership agreements
24
<PAGE>
or other organizational documents, as the case may be; no default exists,
and no event has occurred which, with notice or lapse of time or both,
would constitute a default, and the issuance, offering and sale of the
Securities to the Underwriters by the Company pursuant to this Agreement
and the Securities Documents the compliance by the Company with the other
provisions of this Agreement, the Securities and the Securities Documents
and the consummation of the other transactions herein and therein
contemplated will not result in any default, in the due performance and
observance of any term, covenant or condition of any indenture, mortgage
or deed of trust, or any material lease or other agreement or instrument
known to such counsel after due inquiry to which the Company or any of the
Subsidiaries is a party or by which the Company, any of the Subsidiaries,
any of the Properties or any of their respective other properties is bound
or may be affected except such as would not result in any material adverse
effect in the condition (financial or otherwise), business prospects, net
worth or results of operations of the Company and its subsidiaries, taken
as a whole;
(xvii) as set forth in Schedule 1 hereto, the Securities
and any Underlying Securities have been approved for listing on the New
York Stock Exchange, subject to official notice of issuance;
(xviii) the Registration Statement is effective under
the Act; the Prospectus or any Term Sheet that constitutes a part thereof
and any Integrated Prospectus or the Prospectus Supplement, as the case
may be, has been filed with the Commission in the manner and within the
time period required by Rules 434 and 424(b); and no stop order suspending
the effectiveness of the Registration Statement or any post-effective
amendment thereto and no order directed at any document incorporated by
reference in the Registration Statement, the Prospectus, any Integrated
Prospectus or any amendment or supplement thereto has been issued, and no
proceedings for that purpose have been instituted or, to the best
knowledge of such counsel, threatened by the Commission; and
(xix) the Registration Statement originally filed with
respect to the Securities and each amendment thereto, the Prospectus and
any Integrated Prospectus (in each case, including the documents
incorporated by reference therein but not including the financial
statements and other financial and statistical data contained therein, as
to which such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act and the
Exchange Act and the respective rules and regulations of the Commission
thereunder.
Such counsel shall also state that they have no reason to believe
that the Registration Statement, as of its effective date, contained any untrue
statement of a material fact
25
<PAGE>
or omitted to state any material fact required to be stated therein or necessary
to make the statements therein not misleading or that the Prospectus or any
Integrated Prospectus, as of the date of the Prospectus Supplement or any
required Integrated Prospectus and the date of such opinion, included or
includes any untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
In rendering any such opinion, such counsel may rely, as to matters
of fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials and, as to matters involving the
application of laws of any jurisdiction other than the States of New York, New
Jersey and Delaware or the United States, to the extent satisfactory in form and
scope to counsel for the Underwriters, upon the opinion of local counsel. The
foregoing opinion shall also state that the Underwriters are justified in
relying upon such opinion of local counsel, and copies of such opinion shall be
delivered to the Representatives and counsel for the Underwriters.
References to the Registration Statement, the Prospectus and any
Integrated Prospectus in this paragraph (b) shall include any amendment or
supplement thereto at the date of such opinion.
(c) The Representatives shall have received an opinion, dated
the Firm Closing Date, of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for
the Underwriters, with respect to the issuance and sale of the Securities, the
Registration Statement, the Prospectus, and any Integrated Prospectus and such
other related matters as the Representatives may reasonably require, and the
Company shall have furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to pass upon such matters.
(d) The Representatives shall have received from Price
Waterhouse LLP and each other accounting firm that has certified financial
statements, and delivered its report with respect thereto, included or
incorporated by reference in the Registration Statement, the Prospectus and any
Integrated Prospectus, a letter or letters dated, respectively, the date of this
Agreement as specified in Schedule 1 hereto and the Firm Closing Date, in form
and substance satisfactory to the Representatives, to the effect that:
(i) they are independent accountants with respect to the
Company and its subsidiaries within the meaning of the Act, the Exchange
Act and the applicable published rules and regulations thereunder;
26
<PAGE>
(ii) in their opinion, the financial statements audited
by them and incorporated by reference in the Registration Statement, the
Prospectus and any Integrated Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act, the
Exchange Act and the related published rules and regulations thereunder;
(iii) a reading of the minute books of the shareholders,
the board of directors and any committees thereof of the Company and each
of its consolidated subsidiaries, and inquiries of certain officials of
the Company and its consolidated subsidiaries who have responsibility for
financial and accounting matters, nothing came to their attention that
caused them to believe that:
(A) (i) any unaudited consolidated condensed financial
statements of the Company and its consolidated subsidiaries
included in the Registra tion Statement, the Prospectus and
any Integrated Prospectus do not comply as to form in all
material respects with the applicable accounting require ments
of the Act, the Exchange Act and the related published rules
and regulations thereunder, or (ii) any material modification
should be made to the unaudited consolidated condensed
financial statements for them to be in conformity with
generally accepted accounting principles;
(B) at a specific date not more than five business days
prior to the date of such letter, there were any changes in
the common stock or increase in mortgages and loans payable of
the Company and its consolidated subsidiaries, in each case
compared with amounts shown on the most recent consolidated
balance sheet included in the Registration Statement, the
Prospectus and any Integrated Prospectus, except for such
changes set forth in such letter;
(iv) they have carried out certain specified procedures,
not constituting an audit, with respect to certain amounts, percentages
and financial information that are derived from the general accounting
records of the Company and its consolidated subsidiaries and are included
in the Registration Statement, the Prospectus and any Integrated
Prospectus and in Exhibit 12 to the Registration Statement, including the
information included or incorporated in the Company's most recent Annual
Report on Form 10-K under the captions "Business" (Item 1), "Selected
Financial Data" (Item 6) and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" (Item 7) and the
information included or incorporated in the Company's Quarterly Reports on
Form 10-Q under the caption "Management's Discussion and
27
<PAGE>
Analysis of Financial Condition and Results of Operations,"and have
compared such amounts, percentages and financial information with such
records and with information derived from such records and have found them
to be in agreement, excluding any questions of legal interpretation; and
(v) on the basis of a reading of any unaudited pro forma
consolidated condensed financial statements included in the Registration
Statement, the Prospectus and any Integrated Prospectus, carrying out
certain specified procedures that would not necessarily reveal matters of
significance with respect to the comments set forth in this paragraph (v),
inquiries of certain officials of the Company, its consolidated
subsidiaries and any acquired company who have responsibility for
financial and accounting matters and proving the arithmetic accuracy of
the application of the pro forma adjustments to the historical amounts in
the unaudited pro forma consolidated condensed financial statements,
nothing came to their attention that caused them to believe that the
unaudited pro forma consolidated condensed financial statements do not
comply in form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X or that the pro forma
adjustments have not been properly applied to the historical amounts in
the compilation of such statements.
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied
by a written explanation of the Company as to the significance thereof,
unless the Representatives deem such explanation unnecessary, and (B) such
changes, decreases or increases do not, in the sole judgment of the
Representa tives, make it impractical or inadvisable to proceed with the
purchase and delivery of the Securities as contemplated by the
Registration Statement.
References to the Registration Statement, the Prospectus and any
Integrated Prospectus in this paragraph (d) with respect to either letter
referred to above shall include any amendment or supplement thereto at the
date of such letter.
(e) The Representatives shall have received a certificate,
dated the Firm Closing Date, of the chief executive officer and the chief
financial or accounting officer of the Company to the effect that:
(i) the representations and warranties of the Company in
this Agreement are true and correct as if made on and as of the Firm
Closing Date; the Registration Statement, as amended as of the Firm
Closing Date, does not include any untrue statement of a material fact or
omit to state any material fact necessary to make the
28
<PAGE>
statements therein not misleading, and the Prospectus or any Integrated
Prospectus, as amended or supplemented as of the Firm Closing Date, does
not include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and
the Company has performed all covenants and agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the
Firm Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto and no
order directed at any document incorporated by reference in the
Registration Statement, the Prospectus or any Integrated Prospectus or any
amendment or supplement thereto has been issued, and no proceedings for
that purpose have been instituted or threatened or, to the best of the
Company's knowledge, are contemplated by the Commission; and
(iii) subsequent to the respective dates as of which
information is given in the Registration Statement, the Prospectus and any
Integrated Prospectus, neither the Company nor any of its subsidiaries has
sustained any material loss or interference with their respective
businesses or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute
or any legal or governmental proceeding, and there has not been any
material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise),
management, business prospects, net worth or results of operations of the
Company or any of its subsidiaries, except in each case as described in or
contemplated by the Prospectus or any Integrated Prospectus (exclusive of
any amendment or supplement thereto).
(f) On or before the Firm Closing Date, the Representatives
and counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from the
Company.
(g) The Representatives shall have received from each person
who is a director or executive officer of the Company an agreement to the effect
that such person will not, directly or indirectly, without the prior written
consent of Prudential Securities Incorporated, on behalf of the Underwriters,
offer, sell, offer to sell, contract to sell, pledge, grant any option to
purchase or otherwise sell or dispose (or announce any offer, sale, offer of
sale, contract of sale, pledge, grant of an option to purchase or other sale or
disposition) of any shares of Securities or any securities convertible into, or
exchangeable or exercisable for, the Securities for a period of 90 days after
the date of this Agreement. Prudential Securities Incorporated, at any time and
without notice, may release all or any portion of the securities subject to such
agreements.
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(h) If applicable, prior to the commencement of the offering
of the Securities, the Securities and any Underlying Securities shall have been
approved for listing on the New York Stock Exchange, subject to official notice
of issuance.
All opinions, certificates, letters and documents delivered pursuant
to this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase
and pay for any Option Securities shall be subject, in their discretion, to each
of the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed to
refer to such Option Securities and the related Option Closing Date,
respectively.
7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter or such controlling person may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon:
(i) any untrue statement or alleged untrue statement
made by the Company in Section 2 of this Agreement,
(ii) any untrue statement or alleged untrue statement of
any material fact contained in (A) the Registration Statement or any
amendment thereto or any Preliminary Prospectus, the Prospectus or any
Integrated Prospectus or any amendment or supplement thereto or (B) any
application or other document, or any amendment or supplement thereto,
executed by the Company or based upon written information furnished by or
on behalf of the Company filed in any jurisdiction in order to qualify the
Securities under the securities or blue sky laws thereof or filed with the
Commission or any securities association or securities exchange (each an
"Application"),
(iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any Integrated Prospectus or any amendment
or supplement thereto, or any Application a
30
<PAGE>
material fact required to be stated therein or necessary to make the
statements therein not misleading or
(iv) any untrue statement or alleged untrue statement of
any material fact contained in any audio or visual materials used in
connection with the marketing of the Securities, including, without
limitation, slides, videos, films and tape recordings,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement or
any amendment thereto, any Preliminary Prospectus, the Prospectus or any
Integrated Prospectus or any amendment or supplement thereto, or any Application
in reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives specifically for use
therein. This indemnity agreement will be in addition to any liability which the
Company may otherwise have. The Company will not, without the prior written
consent of the Underwriter or Underwriters purchasing, in the aggregate, more
than 50% of the Firm Securities, settle or compromise or consent to the entry of
any judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not any
such Underwriter or any person who controls any such Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act is a party to
such claim, action, suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of all of the Underwriters and such
controlling persons from all liability arising out of such claim, action, suit
or proceeding.
(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement, as amended at the date of this
Agreement as specified in Schedule 1 hereto, and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act against any losses, claims, damages or liabilities to which
the Company or any such director, officer or controlling person may become
subject under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, as amended at the date of this Agreement as
specified in Schedule 1 hereto, any Preliminary Prospectus, the Prospectus or
any Integrated Prospectus or any amendment or supplement thereto, or any
Application or (ii) the omission or the alleged
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omission to state therein a material fact required to be stated in the
Registration Statement, as amended at the date of this Agreement as specified in
Schedule 1 hereto, any Preliminary Prospectus, the Prospectus or any Integrated
Prospectus or any amendment or supplement thereto, or any Application or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives specifically for use therein; and, subject to the
limitation set forth immediately preceding this clause, will reimburse, as
incurred, any legal or other expenses reasonably incurred by the Company or any
such director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or any action in respect
thereof. This indemnity agreement will be in addition to any liability which
such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 7. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party; provided, however, that if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 7 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Representatives in the case of
paragraph
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(a) of this Section 7, representing the indemnified parties under such paragraph
(a) who are parties to such action or actions) or (ii) the indemnifying party
does not promptly retain counsel satisfactory to the indemnified party or (iii)
the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. After such notice
from the indemnifying party to such indemnified party, the indemnifying party
will not be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the consent of the indemnifying
party.
(d) In circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 7 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect (i) the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party on the other from the offering of the Securities or
(ii) if the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total proceeds from the offering (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions received by
the Underwriters. The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters, the parties'
relative intents, knowledge, access to information and opportunity to correct or
prevent such statement or omission, and any other equitable consider ations
appropriate in the circumstances. The Company and the Underwriters agree that it
would not be equitable if the amount of such contribution were determined by pro
rata or per capita allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take
into account the equitable considerations referred to above in this paragraph
(d). Notwithstanding any other provision of this paragraph (d), no Underwriter
shall be obligated to make contributions hereunder that in the aggregate exceed
the total public offering price of the Securities purchased by such Underwriter
under this Agreement, less the aggregate amount of any damages that such
Underwriter has otherwise been required to pay in respect of the same or any
substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution
33
<PAGE>
from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute hereunder are several in proportion to
their respective underwriting obligations and not joint, and contributions among
Underwriters shall be governed by the provisions of the Prudential Securities
Incorporated Master Agreement Among Underwriters. For purposes of this paragraph
(d), each person, if any, who controls an Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act shall have the same
rights to contribution as such Underwriter, and each director of the Company,
each officer of the Company who signed the Registration Statement as amended at
the date of this Agreement as specified in Schedule 1 hereto and each person, if
any, who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, shall have the same rights to contribution as
the Company.
8. Default of Underwriters. If one or more Underwriters default in
their obligations to purchase Firm Securities or Option Securities hereunder and
the aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or Option
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase. If one or more Underwriters so default with respect to an aggregate
number of Securities that is more than ten percent of the aggregate number of
Firm Securities or Option Securities, as the case may be, to be purchased by all
of the Underwriters at such time hereunder, and if arrangements satisfactory to
the Representatives are not made within 36 hours after such default for the
purchase by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives) of the Securities with respect to
which such default occurs, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter or the Company other than as provided
in Section 9 hereof. In the event of any default by one or more Underwriters as
described in this Section 8, the Representatives shall have the right to
postpone the Firm Closing Date or the Option Closing Date, as the case may be,
established as provided in Section 3 of this Agreement for not more than seven
business days in order that any necessary changes may be made in the
arrangements or documents for the purchase and delivery of the Firm Securities
or Option Securities, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 8. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
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9. Survival. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, its officers and the
several Underwriters set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement shall remain in full force and
effect, regardless of (i) any investigation made by or on behalf of the Company,
any of its officers or directors, any Underwriter or any controlling person
referred to in Section 7 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 5 and 7 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
10. Termination. (a) This Agreement may be terminated with respect
to the Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company given prior to the Firm Closing Date or
the related Option Closing Date, respectively, in the event that the Company
shall have failed, refused or been unable to perform all obligations and satisfy
all conditions on its part to be performed or satisfied hereunder at or prior
thereto or, if at or prior to the Firm Closing Date or such Option Closing Date,
respectively,
(i) the Company or any of the Subsidiaries shall have,
in the sole judgment of the Representatives, sustained any material loss
or interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding or there shall have been any material adverse change, or any
development involving a prospective material adverse change (including
without limitation a change in management or control of the Company, which
includes the termination of the employment of John J. Cali or Thomas A.
Rizk), in the condition (financial or otherwise), business prospects, net
worth or results of operations of the Company and the Subsidiaries, except
in each case as described in or contemplated by the Prospectus (exclusive
of any amendment or supplement thereto);
(ii) trading in the Common Stock shall have been
suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been
suspended or minimum or maximum prices shall have been established on such
exchange;
(iii) there shall have been any downgrading in the
rating of any debt securities or preferred stock of the Company by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act), or any public announcement that
any such organization has under surveillance or review its rating of any
debt securities or preferred stock of the Company (other than an
announcement with
35
<PAGE>
positive implications of a possible upgrading, and no implication of a
possible downgrad ing, of such rating);
(iv) a banking moratorium shall have been declared by
New York or United States authorities; or
(v) there shall have been (A) an outbreak or escalation
of hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or
material adverse change in general economic, political or financial
conditions having an effect on the U.S. financial markets that, in the
sole judgment of the Representatives, makes it impractical or inadvisable
to proceed with the public offering or the delivery of the Securities as
contemplated by the Registration Statement, as amended at the date of this
Agreement as specified in Schedule 1 hereto
(b) Termination of this Agreement pursuant to this Section 10
shall be without liability of any party to any other party except as provided in
Section 9 hereof.
11. Information Supplied by Underwriters. The statements set forth
in the last paragraph on the front cover page of the Prospectus Supplement and
under the heading "Underwriting" in the Prospectus Supplement (to the extent
such statements relate to the Underwriters) constitute the only information
furnished by any Underwriter through the Representatives to the Company for the
purposes of Sections 2(b) and 7(b) hereof. The Underwriters confirm that such
statements (to such extent) are correct.
12. Notices. All communications hereunder shall be in writing and,
if sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, One New York Plaza, New York, New York 10292, Attention: Equity
Transactions Group; and if sent to the Company, shall be delivered or sent by
mail, telex or facsimile transmission and confirmed in writing to the Company at
11 Commerce Drive, Cranford, New Jersey, 07016, Attention: Thomas A. Rizk.
13. Successors. This Agreement shall inure to the benefit of and
shall be binding upon the several Underwriters, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company
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<PAGE>
contained in Section 7 of this Agreement shall also be for the benefit of any
person or persons who control any Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act and (ii) the indemnities of the
Underwriters contained in Section 7 of this Agreement shall also be for the
benefit of the directors of the Company, the officers of the Company who have
signed the Registration Statement as amended at the date of this Agreement as
specified in Schedule 1 hereto and any person or persons who control the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act.
No purchaser of Securities from any Underwriter shall be deemed a successor
because of such purchase.
14. Applicable Law. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.
15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
37
<PAGE>
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company and each
of the several Underwriters.
Very truly yours,
CALI REALTY CORPORATION
By: /s/ Thomas A. Rizk
---------------------------------
Name: Thomas A. Rizk
Title: President and CEO
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
MORGAN, STANLEY & CO. INCORPORATED
PAINEWEBBER INCORPORATED
SMITH BARNEY INC.
UBS SECURITIES LLC
WHEAT, FIRST SECURITIES, INC.
By: PRUDENTIAL SECURITIES INCORPORATED
By: /s/ Jean-Claude Canfin
-------------------------------------
Name: Jean-Claude Canfin
Title: Managing Director
For itself and on behalf of each of the several Underwriters.
<PAGE>
SCHEDULE 1
DESCRIPTION OF SECURITIES; TERMS OF OFFERING
1. Registration Statement:
File No. 333-19101
2. Date of Underwriting Agreement:
October 9, 1997
3. Underwriters:
Prudential Securities Incorporated
Bear, Stearns & Co. Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Morgan, Stanley & Co. Incorporated
PaineWebber Incorporated
Smith Barney Inc.
UBS Securities LLC
Wheat, First Securities, Inc.
4. Title of Securities:
Common Stock, par value $.01 per share
5. Aggregate Number of Firm Securities:
Common Stock, par value $.01 per share: 13,000,000 shares
6. Aggregate Number of Option Securities:
Common Stock, par value $.01 per share: 1,950,000 shares
7. Price to Public:
Common Stock, par value $.01 per share: $39.8125 per share
1
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2
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8. Purchase Price by Underwriters:
Common Stock, par value $.01 per share: $37.7725 per share
9. Specified Funds for Payment of Purchase Price:
Wire Transfer of Same Day Funds
10. Terms of Securities:
Preferred Stock: N/A
Warrants: N/A
Other Provisions: N/A
11. Lock-up Requirements:
As set forth in Sections 4(h) and 6(g) of this Agreement. Notwithstanding
Section 4(h) of this Agreement, in connection with the Transaction (as
defined in the Prospectus), the Company may issue 3,391,048 Common Units,
249,656 Preferred Units and 2,000,000 Warrants to purchase Common Units to
Mack or Mack's designees in connection with the contribution of the Mack
Properties to the Company.
12. Delivery of Securities:
Firm Securities:
Prudential Securities Incorporated, One New York Plaza, New York, New York
on or about October 15,1997
Option Securities:
Prudential Securities Incorporated, One New York Plaza, New York, New York
no later than November 14, 1997, if option exercised
13. Pre-Closing Location:
Pryor, Cashman, Sherman, & Flynn, 410 Park Avenue, New York, New York on
October 14, 1997
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14. Closing Location:
Pryor, Cashman, Sherman, & Flynn, 410 Park Avenue, New York, New York on
October 15, 1997
15. Miscellaneous:
4
<PAGE>
SCHEDULE 2
UNDERWRITERS
Number of
Firm Shares to
Underwriter be Purchased
----------- ------------
Prudential Securities Incorporated 1,852,500
Bear, Stearns & Co. Inc. 1,852,500
Donaldson, Lufkin & Jenrette Securities Corporatino 1,852,500
Morgan, Stanley & Co. Incorporated 1,852,500
PaineWebber Incorporated 1,852,500
Smith Barney Inc. 1,852,500
UBS Securities LLC 942,500
Wheat, First Securities, Inc. 942,500
Total 13,000,000
==========
5
MACK-CALI REALTY CORPORATION
UNDERWRITING AGREEMENT
February 19, 1998
To the Representatives named in Schedule 1 hereto of the
several Underwriters named in Schedule 2 hereto
Ladies and Gentlemen:
Mack-Cali Realty Corporation, a Maryland corporation qualified as a
real estate investment trust (the "Company"), hereby confirms its agreement with
the several underwriters named in Schedule 2 hereto (the "Underwriters"), for
whom you have been duly authorized to act as representatives (in such
capacities, the "Representatives"), as set forth below. If you are the only
Underwriters, all references herein to the Representatives shall be deemed to be
to the Underwriters.
1. Securities. Subject to the terms and conditions herein contained,
the Company proposes to issue and sell to the several Underwriters certain
securities of the Company identified in Schedule 1 hereto (the "Firm
Securities"). The Company also proposes to issue and sell to the several
Underwriters the additional securities identified in Schedule 1 if requested by
the Representatives as provided in Section 3 of this Agreement. Any and all
shares of such additional securities to be purchased by the several Underwriters
pursuant to such option are referred to herein as the "Option Securities," and
the Firm Securities and any Option Securities are collectively referred to
herein as the "Securities."
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the several Underwriters
that:
(a) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Act"). A registration
statement (the file number of which is set forth in Schedule 1 hereto) on such
Form with respect to the Securities, including a basic prospectus, has been
filed by the Company with the Securities and Exchange Commission
<PAGE>
(the "Commission") under the Act, and one or more amendments to such
registration statement may also have been so filed. Such registration statement,
as so amended, has been declared by the Commission to be effective under the
Act. Such registration statement, as amended at the date of this Agreement as
specified in Schedule 1 hereto, meets the requirements set forth in Rule
415(a)(1)(x) under the Act and complies in all other material respects with said
Rule. The Company will next file with the Commission either (A) if the Company
relies on Rule 434 under the Act, a Term Sheet (as hereinafter defined) relating
to the Securities, that shall identify the Preliminary Prospectus (as
hereinafter defined) that it supplements and, if required to be filed pursuant
to Rules 434(c)(2) and 424(b), an Integrated Prospectus (as hereinafter
defined), in either case, containing such information as is required or
permitted by Rules 434, 430A, and 424(b) under the Act or (B) if the Company
does not rely on Rule 434 under the Act, pursuant to Rule 424(b) under the Act a
final prospectus supplement to the basic prospectus included in such
registration statement, as so amended, describing the Securities and the
offering thereof, in such form as has been provided to, or discussed with, and
approved by the Representatives as provided in section 4(a) of this Agreement.
As used in this Agreement, the term "Registration Statement" means such
registration statement, as amended at the time when it was declared effective,
including (i) all financial schedules and exhibits thereto, (ii) all documents
incorporated by reference or deemed to be incorporated by reference therein and
(iii) any information omitted therefrom pursuant to Rule 430A under the Act and
included in the Prospectus (as hereinafter defined) or, if required to be filed
pursuant to Rules 434(c)(2) and 424(b), in the Integrated Prospectus; the term
"Basic Prospectus" means the prospectus included in the Registration Statement;
the term "Preliminary Prospectus" means any preliminary form of the Prospectus
(as defined herein) specifically relating to the Securities, in the form first
filed with, or transmitted for filing to, the Commission pursuant to Rule 424 of
the Rules and Regulations; the term "Prospectus Supplement" means any prospectus
supplement specifically relating to the Securities, in the form first filed
with, or transmitted for filing to, the Commission pursuant to Rule 424 under
the Securities Act; the term "Prospectus" means: (A) if the Company relies on
Rule 434 under the Act, the Term Sheet relating to the Securities that is first
filed pursuant to Rule 424(b)(7) under the Act, together with the Preliminary
Prospectus identified therein that such Term Sheet supplements; (B) if the
Company does not rely on Rule 434 under the Act, the Preliminary Prospectus; or
(C) if the Company does not rely on Rule 434 under the Act and if no prospectus
is required to be filed pursuant to Rule 424 under the Act, the Basic
Prospectus, including, in each case, the Prospectus Supplement; "Basic
Prospectus," "Prospectus," "Preliminary Prospectus" and "Prospectus Supplement"
shall include in each case the documents, if any, filed by the Company with the
Commission pursuant to the United States Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and incorporated by reference therein; the term
"Integrated Prospectus" means a prospectus first filed with the Commission
pursuant to Rules 434(c)(2) and 424(b) under the Act; and the term "Term Sheet"
means any abbreviated term sheet that satisfies the requirements of Rule 434
under the Act. Any reference in this Agreement
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<PAGE>
to an "amendment" or "supplement" to any Preliminary Prospectus, the Prospectus,
or any Integrated Prospectus or an "amendment" to any registration statement
(including the Registration Statement) shall be deemed to include any document
incorporated by reference therein that is filed with the Commission under the
Exchange Act after the date of such Preliminary Prospectus, Prospectus,
Integrated Prospectus or registration statement, as the case may be. For
purposes of the preceding sentence, any reference to the "effective date" of an
amendment to a registration statement shall, if such amendment is effected by
means of the filing with the Commission under the Exchange Act of a document
incorporated by reference in such registration statement, be deemed to refer to
the date on which such document was so filed with the Commission; any reference
herein to the "date" of a Prospectus that includes a Term Sheet shall mean the
date of such Term Sheet.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus. When any Preliminary
Prospectus was filed with the Commission it (i) contained all statements
required to be stated therein in accordance with, and complied in all material
respects with the requirements of, the Act, the Exchange Act and the respective
rules and regulations of the Commission thereunder and (ii) did not include any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. When the Registration Statement or any
amendment thereto was or is declared effective, it (i) contained or will contain
all statements required to be stated therein in accordance with, and complied or
will comply in all material respects with the requirements of, the Act, the
Exchange Act and the respective rules and regulations of the Commission
thereunder and (ii) did not or will not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading. When the Prospectus or any Term Sheet that is
a part thereof or any Integrated Prospectus or any amendment or supplement to
the Prospectus is filed with the Commission pursuant to Rule 424(b), on the date
when the Prospectus is otherwise amended or supplemented and on the Firm Closing
Date and any Option Closing Date (both as hereinafter defined), each of the
Prospectus and, if required to be filed pursuant to Rules 434(c)(2) and 424(b)
under the Act, the Integrated Prospectus, as amended or supplemented at any such
time, (i) contained or will contain all statements required to be stated therein
in accordance with, and complied or will comply in all material respects with
the requirements of, the Act and the Exchange Act and the respective rules and
regulations of the Commission thereunder and (ii) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The foregoing
provisions of this paragraph (b) do not apply to statements or omissions made in
any Preliminary Prospectus or any amendment or supplement thereto, the
Registration Statement or any amendment thereto, the Prospectus or, if required
to be filed pursuant to Rules 434(c)(2) and 424(b) under the Act, the Integrated
Prospectus or any
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<PAGE>
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein.
(c) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Maryland and is duly qualified to transact business and is in good standing
under the laws of all other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such qualification, except
where the failure to be so qualified does not amount to a material liability or
disability to the Company and its subsidiaries, taken as a whole.
(d) Each of the subsidiaries of the Company (the
"Subsidiaries") has been duly organized and is validly existing as a general or
limited partnership or corporation in good standing under the laws of the
jurisdiction of its organization, and is duly qualified to transact business and
is in good standing under the laws of all other jurisdictions where the
ownership or leasing of its properties or the conduct of its business requires
such qualification, except where the failure to be so qualified does not amount
to a material liability or disability to the Company and its subsidiaries, taken
as a whole. The issued shares of capital stock of each of the Subsidiaries that
is a corporation are duly authorized, validly issued, fully paid and
nonassessable, and all of the partnership interests in each Subsidiary that is a
partnership are validly issued and fully paid. Except as described in the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus), all of such shares and interests in the Subsidiaries owned by the
Company are owned beneficially by the Company or another Subsidiary free and
clear of any security interests, mortgages, pledges, grants, liens,
encumbrances, equities or claims.
(e) There are no outstanding (A) securities or obligations of
the Company or any of the Subsidiaries convertible into or exchangeable for any
capital stock of the Company or any Subsidiary, (B) warrants, rights or options
to subscribe for or purchase from the Company or any Subsidiary any such capital
stock or any such convertible or exchangeable securities or obligations, or (C)
obligations of the Company or any such Subsidiary to issue any shares of capital
stock, any such convertible or exchangeable securities or obligations, or any
such warrants, rights or options, except as described in the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus).
(f) The Company and each of the Subsidiaries has full power,
corporate or other, to own or lease their respective properties and conduct
their respective businesses as described in the Registration Statement, the
Prospectus and any Integrated Prospectus (or, if the
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Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus); and the Company has full power, corporate or
other, to enter into this Agreement and any other agreement pursuant to which
the Securities are issued as specified in Schedule 1 to this Agreement (the
"Securities Documents") and to carry out all the terms and provisions hereof and
thereof to be carried out by it.
(g) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus and any Integrated Prospectus (or,
if the Prospectus and any required Integrated Prospectus are not in existence,
the most recent Preliminary Prospectus). All of the capital stock of the Company
has been duly authorized and the capital stock of the Company outstanding is
validly issued, fully paid and nonassessable.
(h) The Securities have been duly authorized, and, when such
securities are issued and delivered as contemplated by the terms of this
Agreement and the applicable Securities Document such securities will be validly
issued, fully paid and non-assessable.
(i) The execution and delivery of the Securities have been
duly authorized by all necessary corporate action, and, at the Firm Closing Date
or the related Option Closing Date (as the case may be), the Securities will
have been duly executed and delivered by the Company, and if applicable,
assuming due authorization, execution and delivery of the Securities by parties
other than the Company, will be the legal, valid, binding and enforceable
obligations of the Company, subject to the effect of bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization and similar laws relating to
creditors' rights generally and to the application of equitable principles in
any proceeding, whether at law or in equity.
(j) The securities of the Company issuable in exchange for or
upon conversion of the Securities as specified in Schedule 1 to this Agreement
(the "Underlying Securities") have been duly authorized and reserved, and, when
such securities are issued and delivered as contemplated by the terms of the
applicable Securities Document, such securities will be validly issued, fully
paid and non-assessable.
(g) The execution and delivery of the Securities Documents has
been duly authorized by all necessary corporate action of the Company, and, at
the Firm Closing Date or the related Option Closing Date (as the case may be),
such agreements will have been duly executed and delivered by the Company, and
assuming due authorization, execution and delivery of the Securities Documents
by parties other than the Company as specified in the applicable Securities
Documents, and, if required, such Securities Documents have been filed with the
Secretary of State of the State of Maryland or any other applicable
jurisdiction, and such agreements will constitute valid and binding instruments
of the Company enforceable against the
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Company in accordance with their respective terms, subject to the effect of
bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and
similar laws relating to creditors' rights generally and to the application of
equitable principles in any proceeding, whether at law or in equity.
(k) No holders of outstanding shares of capital stock of the
Company are entitled as such to any preemptive or other rights to subscribe for
any of the Securities or Underlying Securities, and no holder of securities of
the Company or any Subsidiary has any right which has not been waived to require
the Company to register the offer or sale of any securities owned by such holder
under the Act in the public offering contemplated by this Agreement.
(l) The Securities and Underlying Securities conform to their
description contained in the Prospectus and any Integrated Prospectus (or, if
the Prospectus and any required Integrated Prospectus are not in existence, the
most recent Preliminary Prospectus).
(m) The combined financial statements and schedules of the
Company and the Cali Group (as defined in the Registration Statement) and the
consolidated financial statements and schedules of the Company and its
consolidated subsidiaries included in or incorporated by reference in the
Registration Statement, the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus) fairly present the combined financial position of
the Company and the Cali Group and fairly present the consolidated financial
position of the Company and its consolidated subsidiaries, as the case may be,
and the results of operations and changes in financial condition as of the dates
and periods therein specified. Such combined and consolidated financial
statements and schedules have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved (except as otherwise noted therein).
(n) The selected financial data set forth under the caption
"Selected Financial Data" in the Prospectus and any Integrated Prospectus (or,
if the Prospectus and any required Integrated Prospectus are not in existence,
the most recent Preliminary Prospectus) fairly present, on the basis stated in
the Prospectus and any Integrated Prospectus (or such Preliminary Prospectus)
and such Annual Report, the information included therein. The pro forma
financial statements and other pro forma financial information included in or
incorporated therein in the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus) comply in all material respects with the
applicable requirements of Rule 11-02 of Regulation S-X of the Commission and
the pro forma adjustments have been properly applied to the historical amounts
in the compilation
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of such statements and the assumptions used in the preparation thereof are, in
the opinion of the Company, reasonable.
(o) Price Waterhouse LLP, which has certified certain
financial statements of the Company and its consolidated subsidiaries and of the
Cali Group and delivered its reports with respect to the audited consolidated
financial statements and schedules, and any other accounting firm that has
certified financial statements and delivered its reports with respect thereto,
included or incorporated by reference in the Registration Statement, the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus), are independent public accountants as required by the Act, the
Exchange Act and the respective rules and regulations thereunder.
(p) The execution and delivery of this Agreement has been duly
authorized by the Company and this Agreement has been duly executed and
delivered by the Company, and is the valid and binding agreement of the Company
enforceable against the Company in accordance with the terms hereof, subject to
the effect of bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws relating to creditors' rights generally and to
the application of equitable principles in any proceeding, whether at law or in
equity and except as rights to indemnity and contribution hereunder may be
limited by federal or state securities laws or principles of public policy.
(q) No legal or governmental proceedings are pending to which
the Company or any of the Subsidiaries or to which the property of the Company
or any of the Subsidiaries is subject, that are required to be described in the
Registration Statement, the Prospectus or any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus) and are not described therein, and no such
proceedings have been threatened against the Company or any of the Subsidiaries;
and no contract or other document is required to be described in the
Registration Statement, the Prospectus or any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus) or to be filed as an exhibit to the Registration
Statement that is not described therein or filed as required.
(r) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement and the Securities
Documents, the compliance by the Company with the other provisions of this
Agreement, the Securities and the Securities Documents and the consummation of
the other transactions herein and therein contemplated do not (i) require the
consent, approval, authorization, registration or qualification of or with any
governmental authority, except such as have been obtained, such as may be
required under state securities or blue sky laws and, if the registration
statement filed with respect to the Securities (as amended)
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<PAGE>
is not effective under the Act as of the time of execution hereof, such as may
be required (and shall be obtained as provided in this Agreement) under the Act,
or (ii) conflict with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any of the properties or
assets of the Company or any of the Subsidiaries pursuant to any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which the Company or any of
the Subsidiaries or any other of their respective properties are bound, or the
Articles of Incorporation, By-laws or other organizational documents, as the
case may be, of the Company or any of the Subsidiaries, or any statute or any
judgment, decree, order, rule or regulation of any court or other governmental
authority or any arbitrator applicable to the Company or any of the Subsidiaries
or any of their properties.
(s) The Company has not, directly or indirectly, (i) taken any
action designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) since the filing of the Registration Statement (A) sold, bid
for, purchased, or paid anyone any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(t) Subsequent to the respective dates as of which information
is given in the Registration Statement, the Prospectus and any Integrated
Prospectus (or, if the Prospectus and any required Integrated Prospectus are not
in existence, the most recent Preliminary Prospectus), (1) neither the Company
nor any of the Subsidiaries has incurred any material liability or obligation,
direct or contingent, or entered into any material transaction, which is not in
the ordinary course of business; (2) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock; and (3) there has not been any
material change in the capital stock, short-term debt or long-term debt of the
Company or the Subsidiaries, except in each case as described in or contemplated
by the Prospectus and any Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus).
(u) The Company or the Subsidiaries have good and indefeasible
title in fee simple to all of the Properties (as defined in the Prospectus) and
marketable title to all other property owned by each of them, in each case free
and clear of any security interest, lien, mortgage, pledge, encumbrance, equity,
claim and other defect, except liens which do not materially and adversely
affect the value of such property and will not interfere with the use made or
proposed to be made of such property by the Company or such Subsidiary, and any
and all real property and buildings held under lease by the Company or any such
Subsidiary are held under
8
<PAGE>
valid, subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the use made or proposed to be made of such
property and buildings by the Company or such Subsidiary, in each case except as
described in the Prospectus and any Integrated Prospectus (or, if the Prospectus
and any required Integrated Prospectus are not in existence, the most recent
Preliminary Prospectus).
(v) No labor dispute with the employees of the Company or any
of the Subsidiaries exists or is threatened or imminent that could result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and the
Subsidiaries, taken as a whole, except as described in the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus).
(w) The Company and the Subsidiaries own or possess, or can
acquire on reasonable terms, all material patents, trademarks, service marks,
trade names, licenses, copyrights and proprietary and other confidential
information currently employed by them in connection with their respective
businesses, and neither the Company nor any of the Subsidiaries has received any
notice of infringement of or conflict with asserted rights of any third party
with respect to the foregoing which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a material
adverse change in the condition (financial or otherwise), business prospects,
net worth or results of operations of the Company and the Subsidiaries, taken as
a whole, except as described in the Prospectus and any Integrated Prospectus
(or, if the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus).
(x) The Company and each of the Subsidiaries is insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
will be engaged; neither the Company nor any of the Subsidiaries has been
refused any insurance coverage sought or applied for; and neither the Company
nor any of the Subsidiaries has any reason to believe that any of them will not
be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have material adverse effect
on the condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and the Subsidiaries, taken as a whole,
except as described in the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus).
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<PAGE>
(y) None of the Subsidiaries is currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock or other equity interest, from
repaying to the Company any loans or advances to such Subsidiary from the
Company or from transferring any of such Subsidiary's property or assets to the
Company or any of the other Subsidiaries, except as described in the Prospectus
and any Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus).
(z) The Company and each of the Subsidiaries has complied with
all laws, regulations and orders applicable to it or its respective business and
properties except where the failure to so comply would not result in a material
adverse change in the condition (financial or otherwise), business prospects,
net worth or results of operations of the Company and the Subsidiaries, taken as
a whole; the Company and the Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state, municipal
or foreign regulatory authorities necessary to conduct their respective
businesses except where the failure to possess the same would not result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and the
Subsidiaries, taken as a whole; and neither the Company nor any of the
Subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a material adverse change in the condition (financial
or otherwise), business prospects, net worth or results of operations of the
Company and the Subsidiaries, taken as a whole, except as described in the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus).
(aa) The Company will conduct its operations in a manner that
will not subject it to registration as an investment company under the
Investment Company Act of 1940, as amended, and the transactions contemplated by
this Agreement will not cause the Company to become an investment company
subject to registration under such Act.
(ab) The Company and each of the Subsidiaries has filed all
foreign, federal, state and local tax returns that are required to be filed or
have requested extensions thereof (except in any case in which the failure so to
file would not have a material adverse effect on the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and the Subsidiaries, taken as a whole) and has paid all taxes required
to be paid by it and any other assessment, fine or penalty levied against it, to
the extent that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good faith or
as described in the Prospectus and any Integrated Prospectus (or,
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<PAGE>
if the Prospectus and any required Integrated Prospectus are not in existence,
the most recent Preliminary Prospectus).
(ac) The Company is organized in conformity with the
requirements for qualification as a real estate investment trust (a "REIT")
under the Internal Revenue Code of 1986, as amended (the "Code"), and the
present and contemplated method of operation of the Company and the Subsidiaries
does and will enable the Company to meet the requirements for taxation as a REIT
under the Code.
(ad) Neither the Company nor any of the Subsidiaries is in
violation of any federal or state law or regulation relating to occupational
safety and health and the Company and the Subsidiaries have received all
permits, licenses or other approvals required of them under applicable federal
and state occupational safety and health and environmental laws and regulations
to conduct their respective businesses, and the Company and each of the
Subsidiaries is in compliance with all terms and conditions of any such permit,
license or approval, except any such violation of law or regulation, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals which would not,
singly or in the aggregate result in a material adverse change in the condition
(financial or otherwise), business prospects, net worth or results of operations
of the Company and the Subsidiaries, taken as a whole, except as described in
the Prospectus and any Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus).
(ae) Except for the shares of capital stock of each of the
Subsidiaries owned by the Company or another Subsidiary, neither the Company nor
any of the Subsidiaries owns any shares of stock or any other equity securities
of any corporation or has any equity interest in any firm, partnership,
association or other entity, except as described in or contemplated by the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus).
(af) The Company and the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or specific
authorizations; (2) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (3) access to assets is
permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
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(ag) Neither the Company nor any of the Subsidiaries is in
violation of any term or provision of its Articles of Incorporation, By-laws,
partnership agreements or other organizational documents, as the case may be; no
default exists, and no event has occurred which, with notice or lapse of time or
both, would constitute a default, and the consummation of the transactions by
this Agreement and under the Securities Documents will not result in any default
in the due performance and observance of any term, covenant or condition of any
indenture, mortgage, deed of trust, lease or other agreement or instrument to
which the Company or any Subsidiary is a party or by which the Company, the
Subsidiaries or the Properties or any of their respective other properties is
bound or may be affected except such as would not result in any material adverse
effect in the condition (financial or otherwise), business prospects, net worth
or results of operations of the Company and the Subsidiaries, taken as a whole.
(ah) If required as set forth in Schedule 1 hereto, the
Securities and any Underlying Securities have been approved for listing on the
New York Stock Exchange, subject to official notice of issuance.
(ai) (A) Neither the Company nor any Subsidiary knows of any
violation of any municipal, state or federal law, rule or regulation (including
those pertaining to environmental matters) concerning the Properties or any part
thereof which would have a material adverse effect in the condition (financial
or otherwise), business prospects, net worth or results of operations of the
Company and the Subsidiaries, taken as a whole; (B) each of the Properties
complies with all applicable zoning laws, ordinances, regulations and deed
restrictions or other covenants in all material respects and, if and to the
extent there is a failure to comply, such failure does not materially impair the
value of any of the Properties and will not result in a forfeiture or reversion
of title; (C) neither the Company nor any Subsidiary has received from any
governmental authority any written notice of any condemnation of or zoning
change affecting the Properties or any part thereof, and neither the Company nor
any Subsidiary knows of any such condemnation or zoning change which is
threatened and which if consummated would have a material adverse effect in the
condition (financial or otherwise), business prospects, net worth or results of
operations of the Company and the Subsidiaries, taken as a whole; (D) all liens,
charges, encumbrances, claims, or restrictions on or affecting the properties
and assets (including the Properties) of the Company or any of the Subsidiaries
that are required to be described in the Prospectus and any Integrated
Prospectus (or, if the Prospectus and any required Integrated Prospectus are not
in existence, the most recent Preliminary Prospectus) are disclosed therein; (E)
no lessee of any portion of any of the Properties is in default under any of the
leases governing such properties and there is no event which, but for the
passage of time or the giving of notice or both would constitute a default under
any of such leases, except such defaults that would not have a material adverse
effect in the condition (financial or otherwise), business prospects, net worth
or results of operations of the Company and the Subsidiaries, taken as a whole;
and (F) except as
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provided by law no tenant under any lease pursuant to which the Company or any
of the Subsidiaries leases the Properties will have an option or right of first
refusal to purchase the premises leased thereunder or the building of which such
premises are a part.
(aj) Except as otherwise disclosed in the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus) or in
the Phase I Environmental Audits prepared by Environmental Waste Management
Associates, Inc. previously delivered to the Representatives (the "Audits"), (i)
neither the Company, any of the Subsidiaries nor, to the best knowledge of the
Company, any other owners of the property at any time or any other party has at
any time, handled, stored, treated, transported, manufactured, spilled, leaked,
or discharged, dumped, transferred or otherwise disposed of or dealt with,
Hazardous Materials (as hereinafter defined) on, to or from the Properties,
other than by any such action taken in compliance with all applicable
Environmental Statutes or by the Company, any of the Subsidiaries or any other
party in connection with the ordinary use of residential, retail or commercial
properties owned by the Company; (ii) the Company does not intend to use the
Properties or any subsequently acquired properties for the purpose of handling,
storing, treating, transporting, manufacturing, spilling, leaking, discharging,
dumping, transferring or otherwise disposing of or dealing with Hazardous
Materials other than by any such action taken in compliance with all applicable
Environmental Statues or by the Company, any of the Subsidiaries or any other
party in connection with the ordinary use of residential, retail or commercial
properties owned by the Company; (iii) neither the Company nor any of the
Subsidiaries knows of any seepage, leak, discharge, release, emission, spill, or
dumping of Hazardous Materials into waters on or adjacent to the Properties or
any other real property owned or occupied by any such party, or onto lands from
which Hazardous Materials might seep, flow or drain into such waters; (iv)
neither the Company nor any of the Subsidiaries has received any notice of, or
has any knowledge of any occurrence or circumstance which, with notice or
passage of time or both, would give rise to a claim under or pursuant to any
federal, state or local environmental statute or regulation or under common law,
pertaining to Hazardous Materials on or originating from any of the Properties
or any assets described in the Prospectus and any Integrated Prospectus (or, if
the Prospectus and any required Integrated Prospectus are not in existence, the
most recent Preliminary Prospectus) or any other real property owned or occupied
by any such party or arising out of the conduct of any such party, including
without limitation a claim under or pursuant to any Environmental Statute
(hereinafter defined); (v) neither the Properties nor any other land owned by
the Company or any of the Subsidiaries is included or, to the best of the
Company's knowledge, proposed for inclusion on the National Priorities List
issued pursuant to CERCLA (as hereinafter defined) by the United States
Environmental Protection Agency (the "EPA") or, to the best of the Company's
knowledge, proposed for inclusion on any similar list or inventory issued
pursuant to any other Environmental Statute or issued by any other Governmental
Authority (as hereinafter defined).
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As used herein, "Hazardous Material" shall include, without
limitation any flammable explosives, radioactive materials, hazardous materials,
hazardous wastes, toxic substances, or related materials, asbestos or any
hazardous material as defined by any federal, state or local environmental law,
ordinance, rule or regulation including without limitation the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. ss.ss. 9601-9675 ("CERCLA"), the Hazardous Materials Transportation Act,
as amended, 49 U.S.C. ss.ss. 1801-1819, the Resource Conservation and Recovery
Act, as amended, 42 U.S.C. ss.ss. 6901-6992K, the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. ss.ss. 11001-11050, the Toxic
Substances Control Act, 15 U.S.C. ss.ss. 2601-2671, the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C. ss.ss. 136-136y, the Clean Air Act, 42
U.S.C. ss.ss. 7401-7642, the Clean Water Act (Federal Water Pollution Control
Act), 33 U.S.C. ss.ss. 1251- 1387, the Safe Drinking Water Act, 42 U.S.C. ss.ss.
300f-300j-26, and the Occupational Safety and Health Act, 29 U.S.C. ss.ss.
651-678, as any of the above statutes may be amended from time to time, and in
the regulations promulgated pursuant to each of the foregoing (individually, an
"Environmental Statute") or by any federal, state or local governmental
authority having or claiming jurisdiction over the properties and assets
described in the Prospectus (a "Governmental Authority").
(ak) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters shall be deemed
to be a representation and warranty by the Company to each Underwriter as to the
matters covered thereby.
(al) The Company has not distributed and, prior to the later
of (i) the Closing Date and (ii) the completion of the distribution of the
Securities, will not distribute any material in connection with the offering and
sale of the Securities other than the Registration Statement or any amendment
thereto, any Preliminary Prospectus, the Prospectus or any Integrated Prospectus
or any amendment or supplement thereto, or other materials, if any, permitted by
the Act.
3. Purchase, Sale and Delivery of the Securities.
(a) On the basis of the representations, warranties,
agreements and covenants herein contained and subject to the terms and
conditions herein set forth, the Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters, severally and not jointly, agrees to
purchase from the Company, at the purchase price specified in Schedule 1 hereto,
the number of Firm Securities set forth opposite the name of such Underwriter in
Schedule 2 hereto. One or more certificates in definitive form for the Firm
Securities that the several Underwriters have agreed to purchase hereunder, and
in such denomination or denominations and registered in such name or names as
the Representatives request upon notice to the Company at
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<PAGE>
least 48 hours prior to the Firm Closing Date, shall be delivered by or on
behalf of the Company to the Representatives for the respective accounts of the
Underwriters, against payment by or on behalf of the Underwriters of the
purchase price therefor to the Company in such funds as are specified in
Schedule 1 hereto. Such delivery of and payment for the Firm Securities shall be
made at the date, time and place identified in Schedule 1 hereto, or at such
other date, time or place as the Representatives and the Company may agree upon
or as the Representatives may determine pursuant to Section 8 hereof, such date
and time of delivery against payment being herein referred to as the "Firm
Closing Date". The Company will make such certificate or certificates for the
Firm Securities available for checking and packaging by the Representatives at
the offices in New York, New York of the Company's transfer agent or registrar
or warrant agent or of Prudential Securities Incorporated at least 24 hours
prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in
connection with the distribution and sale of the Firm Securities as contemplated
by the Prospectus and any Integrated Prospectus, the Company hereby grants to
the several Underwriters an option to purchase, severally and not jointly, the
Option Securities. The purchase price to be paid for any Option Securities shall
be the same price per share as the price per share for the Firm Securities set
forth in Schedule 1 to this Agreement, plus, if the purchase and sale of any
Option Securities takes place after the Firm Closing Date and after the Firm
Securities are trading "ex-dividend", an amount equal to the dividends payable
on such Option Securities. The option granted hereby may be exercised as to all
or any part of the Option Securities from time to time within thirty days after
the date of the Prospectus or any Integrated Prospectus (or, if such 30th day
shall be a Saturday or Sunday or a holiday, on the next business day thereafter
when the New York Stock Exchange is open for trading). The Underwriters shall
not be under any obligation to purchase any of the Option Securities prior to
the exercise of such option. The Representatives may from time to time exercise
the option granted hereby by giving notice in writing or by telephone (confirmed
in writing) to the Company setting forth the aggregate number of Option
Securities as to which the several Underwriters are then exercising the option
and the date and time for delivery of and payment for such Option Securities.
Any such date of delivery shall be determined by the Representatives but shall
not be earlier than two business days or later than five business days after
such exercise of the option and, in any event, shall not be earlier than the
Firm Closing Date. The time and date set forth in such notice, or such other
time on such other date as the Representatives and the Company may agree upon or
as the Representatives may determine pursuant to Section 9 hereof, is herein
called the "Option Closing Date" with respect to such Option Securities. Upon
exercise of the option as provided herein, the Company shall become obligated to
sell to each of the several Underwriters, and, subject to the terms and
conditions herein set forth, each of the Underwriters (severally and not
jointly) shall become obligated to purchase from the Company the same percentage
of the total number of the Option Securities as
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to which the several Underwriters are then exercising the option as such
Underwriter is obligated to purchase of the aggregate number of Firm Securities,
as adjusted by the Representatives in such manner as they deem advisable to
avoid fractional shares. If the option is exercised as to all or any portion of
the Option Securities, one or more certificates in definitive form for such
Option Securities, and payment therefor, shall be delivered on the related
Option Closing Date in the manner, and upon the terms and conditions, set forth
in paragraph (a) of this Section 3 and Schedule 1 to this Agreement, except that
reference therein to the Firm Securities and the Firm Closing Date shall be
deemed, for purposes of this paragraph (b), to refer to such Option Securities
and Option Closing Date, respectively.
(c) It is understood that any of you, individually and not as
one of the Representatives, may (but shall not be obligated to) make payment on
behalf of any Underwriter or Underwriters for any of the Securities to be
purchased by such Underwriter or Underwriters. No such payment shall relieve
such Underwriter or Underwriters from any of its or their obligations hereunder.
4. Covenants of the Company. The Company covenants and agrees with
each of the Underwriters that:
(a) The Company will file the Prospectus or any Term Sheet
that constitutes a part thereof, any Integrated Prospectus or the Prospectus
Supplement, as the case may be, and any amendment or supplement thereto with the
Commission in the manner and within the time period required by Rules 434 and
424(b) under the Act. During any time when a prospectus relating to the
Securities is required to be delivered under the Act, the Company (i) will
comply with all requirements imposed upon it by the Act and the Exchange Act and
the respective rules and regulations of the Commission thereunder to the extent
necessary to permit the continuance of sales of or dealings in the Securities in
accordance with the provisions hereof and of the Prospectus and any Integrated
Prospectus, as then amended or supplemented, and (ii) will not file with the
Commission the Prospectus, Term Sheet, any Integrated Prospectus or any
amendment or supplement thereto or any amendment to the Registration Statement
of which the Representatives shall not previously have been advised and
furnished with a copy for a reasonable period of time prior to the proposed
filing and as to which filing the Representatives shall not have given their
consent. The Company will prepare and file with the Commission, in accordance
with the rules and regulations of the Commission, promptly upon request by the
Representatives or counsel for the Underwriters, any amendment to the
Registration Statement or amendment or supplement to the Prospectus and any
Integrated Prospectus that may be necessary or advisable in connection with the
distribution of the Securities by the several Underwriters, and will use its
best efforts to cause any such amendment to the Registration Statement to be
declared effective by the Commission as promptly as possible. The Company will
advise the Representatives,
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promptly after receiving notice thereof, of the time when any amendment to the
Registration Statement has been filed or declared effective or the Prospectus,
any Integrated Prospectus or any amendment or supplement thereto has been filed
and will provide evidence satisfactory to the Representatives of each such
filing or effectiveness.
(b) The Company will advise the Representatives, promptly
after receiving notice or obtaining knowledge thereof, of (i) the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or any order
directed at any document incorporated by reference in the Registration
Statement, the Prospectus or any Integrated Prospectus or any amendment or
supplement thereto or any order preventing or suspending the use of any
Preliminary Prospectus, the Prospectus or any Integrated Prospectus or any
amendment or supplement thereto, (ii) the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, (iii) the institution,
threatening or contemplation of any proceeding for any such purpose or (iv) any
request made by the Commission for amending the Registration Statement, for
amending or supplementing any Preliminary Prospectus, the Prospectus or any
Integrated Prospectus or for additional information. The Company will use its
best efforts to prevent the issuance of any such stop order and, if any such
stop order is issued, to obtain the withdrawal thereof as promptly as possible.
(c) If required by applicable law, the Company will arrange
for the qualification of the Securities and any Underlying Securities for
offering and sale under the securities or blue sky laws of such jurisdictions as
the Representatives may designate and will continue such qualifications in
effect for as long as may be necessary to complete the distribution of the
Securities and any Underlying Securities; provided, however, that in connection
therewith the Company shall not be required to qualify as a foreign corporation
or to execute a general consent to service of process in any jurisdiction.
(d) If at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs as a
result of which the Prospectus or any Integrated Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or if for
any other reason it is necessary at any time to amend or supplement the
Prospectus or any Integrated Prospectus to comply with the Act or Exchange Act
or the respective rules or regulations of the Commission thereunder, the Company
will promptly notify the Representatives thereof and, subject to Section 4(a) of
this Agreement, will prepare and file with the Commission, at the Company's
expense, an amendment to the Registration Statement or an amendment or
supplement to the Prospectus and any Integrated Prospectus that corrects such
statement or omission or effects such compliance.
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(e) The Company will, without charge, provide (i) to the
Representatives and to counsel for the Underwriters, a conformed copy of the
registration statement originally filed with respect to the Securities and any
amendment thereto (in each case including exhibits thereto), (ii) to each other
Underwriter, a conformed copy of such registration statement and any amendment
thereto relating to the Securities (in each case without exhibits thereto) and
(iii) so long as a prospectus relating to the Securities is required to be
delivered under the Act, as many copies of each Preliminary Prospectus, the
Prospectus or any Integrated Prospectus or any amendment or supplement thereto
as the Representatives may reasonably request; without limiting the application
of clause (iii) of this sentence, the Company, not later than (A) 6:00 p.m., New
York city time, on the date of determination of the public offering price, if
such determination occurred at or prior to 10:00 AM, New York City time, on such
date or (B) 12:00 Noon, New York City time, on the business day following the
date of determination of the public offering price, if such determination
occurred after 10:00 AM, New York city time, on such date, will deliver to the
Representatives, without charge, as many copies of the Prospectus or any
Integrated Prospectus and any amendment or supplement thereto as the
Representatives may reasonably request for purposes of confirming orders that
are expected to settle on the Firm Closing Date.
(f) The Company, as soon as practicable, will make generally
available to its securityholders and to the Representatives a consolidated
earning statement of the Company and its subsidiaries that satisfies the
provisions of Section 11(a) of the Act and Rule 158 thereunder.
(g) The Company will apply the net proceeds from the sale of
the Securities as set forth under "Use of Proceeds" in the Prospectus and any
Integrated Prospectus.
(h) The Company will not, directly or indirectly, without the
prior written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of (i) any securities of the Company that are
substantially similar to the Securities or the Underlying Securities, (ii) any
securities convertible into, or exchangeable or exercisable for, the Securities
or Underlying Securities to any unaffiliated third party for a period commencing
on the date hereof and terminating 90 days after the date of the Prospectus or
any Integrated Prospectus, except pursuant to this agreement; provided, however,
that the Company may issue shares of Common Stock in exchange for Units existing
at the date of this Agreement. Prudential Securities Incorporated, at any time
and without notice, may release all or any portion of the securities subject to
such agreement.
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(i) If required as set forth in Schedule 1 hereto, the Company
will obtain the agreements described in Section 6(g) hereof prior to the Firm
Closing Date.
(j) The Company will not, directly or indirectly, (i) take any
action designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of the Securities or (B) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company.
(k) If at any time during the 25-day period after the
Registration Statement becomes effective or the period prior to the Option
Closing Date, any rumor, publication or event relating to or affecting the
Company shall occur as a result of which in your opinion the market price of the
Common Stock has been or is likely to be materially affected (regardless of
whether such rumor, publication or event necessitates a supplement to or
amendment of the Prospectus or any Integrated Prospectus), the Company will,
after written notice from you advising the Company to the effect set forth
above, forthwith prepare, consult with you concerning the substance of, and
disseminate a press release or other public statement, reasonably satisfactory
to you, responding to or commenting on such rumor, publication or event.
(l) If required as set forth in Schedule 1 hereto, the Company
will cause the Securities and any Underlying Securities to be duly authorized
for listing by the New York Stock Exchange.
(m) The Company will continue to use its best efforts to meet
the requirements to qualify as a REIT under the Code.
5. Expenses. The Company will pay all costs and expenses incident to
the performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 10 hereof, including all costs and expenses incident to (i)
the printing or other production of documents with respect to the transactions,
including any costs of printing the registration statement originally filed with
respect to the Securities and any amendment thereto, any Preliminary Prospectus,
the Prospectus and any Integrated Prospectus and any amendment or supplement
thereto, this Agreement, the Securities Documents and any blue sky memoranda,
(ii) all arrangements relating to the delivery to the Underwriters of copies of
the foregoing documents, (iii) the fees and disbursements of counsel,
accountants and any other experts or advisors retained by the Company, (iv)
preparation, issuance and delivery to the Underwriters of any certificates
evidencing the Securities, including the fees and expenses of the transfer
agent, exchange agent or registrar, (v) the qualification, if
19
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any, of the Securities and any Underlying Securities under state securities and
blue sky laws and real estate syndication laws, including filing fees and fees
and disbursements of counsel for the Underwriters relating thereto and relating
to the preparation of a blue sky memoranda, (vi) the filing fees of the
Commission relating to the Securities, (vii) any listing of the Securities and
Underlying Securities on the New York Stock Exchange, (viii) any meetings with
prospective investors in the Securities arranged by the Company (other than as
shall have been specifically approved by the Representatives to be paid for by
the Underwriters) and (ix) advertising relating to the offering of the
Securities requested by the Company (other than as shall have been specifically
approved by the Representatives to be paid for by the Underwriters). If the sale
of the Securities provided for herein is not consummated because any condition
to the obligations of the Underwriters set forth in Section 6 of this Agreement
is not satisfied, because this Agreement is terminated pursuant to Section 10 of
this Agreement or because of any failure, refusal or inability on the part of
the Company to perform all obligations and satisfy all conditions on its part to
be performed or satisfied hereunder other than by reason of a default by and of
the Underwriters, the Company will reimburse the Underwriters severally upon
demand for all out-of-pocket expenses (including counsel fees and disbursements)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Securities. The Company shall not in any event be liable to any
of the Underwriters for the loss of anticipated profits from the transactions
covered by this Agreement.
6. Conditions of the Underwriters' Obligations. The obligations of
the Underwriters to purchase and pay for the Firm Securities shall be subject,
in the Representatives' sole discretion, to the accuracy of the representations
and warranties of the Company contained herein as of the date of this Agreement
as specified in Schedule 1 hereto and as of the Firm Closing Date, as if made on
and as of the Firm Closing Date, to the accuracy of the statements of the
Company's officers made pursuant to the provisions hereof, to the performance by
the Company of its covenants and agreements hereunder and to the following
additional conditions:
(a) The Prospectus, any Integrated Prospectus or the
Prospectus Supplement, as the case may be, and any amendment or supplement
thereto shall have been filed with the Commission in the manner and within the
time period required by Rules 434 and 424(b) under the Act; no stop order
suspending the effectiveness of the Registration Statement or any post-effective
amendment thereto and no order directed at any document incorporated by
reference in the Registration Statement, the Prospectus or any Integrated
Prospectus or any amendment or supplement thereto shall have been issued, and no
proceedings for that purpose shall have been instituted or threatened or, to the
knowledge of the Company or the Representatives, shall be contemplated by the
Commission; and the Company shall have complied with any request of the
Commission for additional information (to be included in the Registration
Statement, the Prospectus or any Integrated Prospectus or otherwise).
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<PAGE>
(b) The Representatives shall have received an opinion, dated
the Firm Closing Date, from Pryor, Cashman, Sherman & Flynn, counsel for the
Company, to the effect that:
(i) the Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Maryland and is duly qualified to transact business and is in good
standing under the laws of all other jurisdictions where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified does not amount
to a material liability or disability to the Company and the Subsidiaries,
taken as a whole. Each of the Subsidiaries has been duly organized and is
validly existing as a general or limited partnership or corporation in
good standing under the laws of the jurisdiction of its organization, and
is duly qualified to transact business and is in good standing under the
laws of all other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such qualification,
except where the failure to be so qualified does not amount to a material
liability or disability to the Company and the Subsidiaries, taken as a
whole;
(ii) the Company and each of the Subsidiaries have full
power, corporate or other, to own or lease their respective properties and
conduct their respective businesses as described in the Registration
Statement, the Prospectus and any Integrated Prospectus and each of the
Company and the Subsidiaries have full power, corporate or other, to enter
into this Agreement and the Securities Documents and to carry out all the
terms and provisions hereof and thereof to be carried out by it;
(iii) the issued shares of capital stock of each of the
Subsidiaries that is a corporation are duly authorized, validly issued,
fully paid and nonassessable, and all of the partnership interests in each
Subsidiary that is a partnership are validly issued and fully paid. Except
as described in the Registration Statement, the Prospectus and any
Integrated Prospectus, all of such shares and interests owned by the
Company or another Subsidiary are owned beneficially by the Company or
such Subsidiary free and clear of any security interest, mortgage, pledge,
lien, encumbrance, equity or claim;
(iv) the Company has an authorized, issued and
outstanding capitalization as set forth in the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus).
All of the capital stock of the Company has been duly authorized and the
capital stock of the Company outstanding is validly issued, fully paid and
nonassessable;
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<PAGE>
(v) the Securities have been duly authorized, and when
executed and delivered against payment therefor in accordance with the
Underwriting Agreement, will be validly issued, fully paid and
non-assessable, and the execution and delivery of the Securities (other
than any Contract Securities) have been duly authorized by all necessary
corporate action, and the Securities have been duly executed and delivered
by the Company, and assuming due authorization, execution and delivery of
the Securities by parties other than the Company, are, and any Contract
Securities, when executed and delivered in the manner provided in the
Securities Documents, will be, the legal, valid, binding and enforceable
obligations of the Company, subject to the effect of bankruptcy,
insolvency, moratorium, fraudulent conveyance, reorganization and similar
laws relating to creditors' rights generally and to the application of
equitable principles in any proceeding, whether at law or in equity;
(vi) the Underlying Securities have been duly authorized
and reserved, and, when such securities are issued and delivered as
contemplated by the terms of the applicable Securities Document such
securities will be validly issued, fully paid and non-assessable;
(vii) the execution and delivery of the Securities
Documents has been duly authorized by all necessary corporate action of
the Company, and have been duly executed and delivered by the Company, and
assuming due authorization, execution and delivery of the Securities
Documents by parties other than the Company as specified in the applicable
Securities Documents, such agreements are valid and binding instruments of
the Company enforceable against the Company in accordance with their
respective terms, subject to the effect of bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization and similar laws
relating to creditors' rights generally and to the application of
equitable principles in any proceeding, whether at law or in equity;
(viii) no holders of outstanding shares of capital stock
of the Company are entitled as such to any preemptive or other rights to
subscribe for any of the Securities or Underlying Securities, and no
holder of securities of the Company or any Subsidiary has any right which
has not been waived to require the Company to register the offer or sale
of any securities owned by such holder under the Act in the public
offering contemplated by this Agreement;
(ix) the statements set forth under the heading
"Description of Common Stock", "Description of Preferred Stock" and
"Description of Warrants" in the Prospectus and any Integrated Prospectus
insofar as such statements purport to summarize certain provisions of the
Securities of the Company, provide a fair summary of such
22
<PAGE>
provisions; and the statements set forth under the headings "Restrictions
on Ownership of Offered Securities" and "Certain United States Federal
Income Tax Considerations to the Company of its REIT Election" in the
Prospectus and "Risk Factors", "Certain United States Federal Income Tax
Considerations to Holders of Common Stock" and "Underwrit ing", in the
Prospectus Supplement, insofar as such statements constitute a summary of
the legal matters, documents or proceedings referred to therein, provide a
fair summary of such legal matters, documents and proceedings;
(x) the execution and delivery of this Agreement has
been duly authorized by all necessary corporate action of the Company and
this Agreement has been duly executed and delivered by the Company, and
are the valid and binding agreements of the Company, enforceable against
the Company in accordance with their respective terms, subject to the
effect of bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws relating to creditors' rights generally
and to the application of equitable principles in any proceeding, whether
at law or in equity and except as rights to indemnity and contribution
hereunder may be limited by federal or state securities laws or principles
of public policy;
(xi) (A) no legal or governmental proceedings are
pending to which the Company, any of the Subsidiaries, or any of their
respective directors or officers in their capacity as such, is a party or
to which the Properties or any other property of the Company or any of the
Subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not described therein,
and, to the best knowledge of such counsel, no such proceedings have been
threatened against the Company or any of the Subsidiaries or with respect
to the Properties or any of their respective other properties and (B) no
contract or other document is required to be described in the Registration
Statement, the Prospectus or any Integrated Prospectus or to be filed as
an exhibit to the Registration Statement that is not described therein or
filed as required;
(xii) the issuance, offering and sale of the Securities
to the Underwriters by the Company pursuant to this Agreement, the
compliance by the Company with the other provisions of this Agreement, any
Securities Documents and the consummation of the other transactions herein
contemplated do not (A) require the consent, approval, authorization,
registration or qualification of or with any governmental authority,
except such as have been obtained and such as may be required under state
securities or blue sky laws (as to which such counsel need not opine) or
(B) conflict with or result in a breach or violation of any of the terms
and provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance
23
<PAGE>
upon any of the Properties or any other properties or assets of the
Company or any of the Subsidiaries pursuant to any indenture, mortgage,
deed of trust, lease or other agreement or instrument to which the Company
or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries or the Properties or any other of their respective
properties are bound, or the Articles of Incorporation, By-laws or other
organizational documents, as the case may be, of the Company or any of the
Subsidiaries, or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or (to the best
knowledge of such counsel) any arbitrator applicable to the Company or any
of the Subsidiaries or any of the Properties;
(xiii) none of the Subsidiaries is currently
contractually prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on such
subsidiary's capital stock or other equity interests, from repaying to the
Company any loans or advances to such Subsidiary from the Company or from
transferring any of such Subsidiary's property or assets to the Company or
any of the other Subsidiaries, except as described in the Prospectus and
any Integrated Prospectus;
(xiv) to the best knowledge of such counsel, the Company
and the Subsidiaries possess all certificates, authorizations, licenses
and permits issued by the appropriate federal, state, municipal or foreign
regulatory authorities necessary to conduct their respective businesses
except for such certificates, authorizations, licenses and permits the
failure of which to possess would not be expected to result in a material
adverse change in the condition (financial or otherwise), business,
prospects, net worth or results of operations of the Company and the
Subsidiaries, taken as a whole, and neither the Company nor any of the
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization, license
or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material
adverse change in the condition (financial or otherwise), business,
prospects, net worth or results of operations of the Company and the
Subsidiaries, taken as a whole, except as described in the Prospectus and
any Integrated Prospectus;
(xv) the Company is not subject to registration as an
investment company under the Investment Company Act of 1940, as amended,
and the transactions contemplated by this Agreement will not cause the
Company to become an investment company subject to registration under such
Act;
(xvi) neither the Company nor any of the Subsidiaries is
in violation of any term or provision of its articles of incorporation,
bylaws, partnership agreements
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<PAGE>
or other organizational documents, as the case may be; no default exists,
and no event has occurred which, with notice or lapse of time or both,
would constitute a default, and the issuance, offering and sale of the
Securities to the Underwriters by the Company pursuant to this Agreement
and the Securities Documents the compliance by the Company with the other
provisions of this Agreement, the Securities and the Securities Documents
and the consummation of the other transactions herein and therein
contemplated will not result in any default, in the due performance and
observance of any term, covenant or condition of any indenture, mortgage
or deed of trust, or any material lease or other agreement or instrument
known to such counsel after due inquiry to which the Company or any of the
Subsidiaries is a party or by which the Company, any of the Subsidiaries,
any of the Properties or any of their respective other properties is bound
or may be affected except such as would not result in any material adverse
effect in the condition (financial or otherwise), business prospects, net
worth or results of operations of the Company and its subsidiaries, taken
as a whole;
(xvii) as set forth in Schedule 1 hereto, the Securities
and any Underlying Securities have been approved for listing on the New
York Stock Exchange, subject to official notice of issuance;
(xviii) the Registration Statement is effective under
the Act; the Prospectus or any Term Sheet that constitutes a part thereof
and any Integrated Prospectus or the Prospectus Supplement, as the case
may be, has been filed with the Commission in the manner and within the
time period required by Rules 434 and 424(b); and no stop order suspending
the effectiveness of the Registration Statement or any post-effective
amendment thereto and no order directed at any document incorporated by
reference in the Registration Statement, the Prospectus, any Integrated
Prospectus or any amendment or supplement thereto has been issued, and no
proceedings for that purpose have been instituted or, to the best
knowledge of such counsel, threatened by the Commission; and
(xix) the Registration Statement originally filed with
respect to the Securities and each amendment thereto, the Prospectus and
any Integrated Prospectus (in each case, including the documents
incorporated by reference therein but not including the financial
statements and other financial and statistical data contained therein, as
to which such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act and the
Exchange Act and the respective rules and regulations of the Commission
thereunder.
Such counsel shall also state that they have no reason to believe
that the Registration Statement, as of its effective date, contained any untrue
statement of a material fact
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<PAGE>
or omitted to state any material fact required to be stated therein or necessary
to make the statements therein not misleading or that the Prospectus or any
Integrated Prospectus, as of the date of the Prospectus Supplement or any
required Integrated Prospectus and the date of such opinion, included or
includes any untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
In rendering any such opinion, such counsel may rely, as to matters
of fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials and, as to matters involving the
application of laws of any jurisdiction other than the States of New York, New
Jersey and Delaware or the United States, to the extent satisfactory in form and
scope to counsel for the Underwriters, upon the opinion of local counsel. The
foregoing opinion shall also state that the Underwriters are justified in
relying upon such opinion of local counsel, and copies of such opinion shall be
delivered to the Representatives and counsel for the Underwriters.
References to the Registration Statement, the Prospectus and any
Integrated Prospectus in this paragraph (b) shall include any amendment or
supplement thereto at the date of such opinion.
(c) The Representatives shall have received an opinion, dated
the Firm Closing Date, of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for
the Underwriters, with respect to the issuance and sale of the Securities, the
Registration Statement, the Prospectus, and any Integrated Prospectus and such
other related matters as the Representatives may reasonably require, and the
Company shall have furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to pass upon such matters.
(d) The Representatives shall have received from Price
Waterhouse LLP and each other accounting firm that has certified financial
statements, and delivered its report with respect thereto, included or
incorporated by reference in the Registration Statement, the Prospectus and any
Integrated Prospectus, a letter or letters dated, respectively, the date of this
Agreement as specified in Schedule 1 hereto and the Firm Closing Date, in form
and substance satisfactory to the Representatives, to the effect that:
(i) they are independent accountants with respect to the
Company and its subsidiaries within the meaning of the Act, the Exchange
Act and the applicable published rules and regulations thereunder;
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<PAGE>
(ii) in their opinion, the financial statements audited
by them and incorporated by reference in the Registration Statement, the
Prospectus and any Integrated Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act, the
Exchange Act and the related published rules and regulations thereunder;
(iii) a reading of the minute books of the shareholders,
the board of directors and any committees thereof of the Company and each
of its consolidated subsidiaries, and inquiries of certain officials of
the Company and its consolidated subsidiaries who have responsibility for
financial and accounting matters, nothing came to their attention that
caused them to believe that:
(A) (i) any unaudited consolidated condensed financial
statements of the Company and its consolidated subsidiaries
included in the Registration Statement, the Prospectus and
any Integrated Prospectus do not comply as to form in all
material respects with the applicable accounting requirements
of the Act, the Exchange Act and the related published rules
and regulations thereunder, or (ii) any material modification
should be made to the unaudited consolidated condensed
financial statements for them to be in conformity with
generally accepted accounting principles;
(B) at a specific date not more than five business days
prior to the date of such letter, there were any changes in
the common stock or increase in mortgages and loans payable of
the Company and its consoli dated subsidiaries, in each case
compared with amounts shown on the most recent consolidated
balance sheet included in the Registration Statement, the
Prospectus and any Integrated Prospectus, except for such
changes set forth in such letter;
(iv) they have carried out certain specified procedures,
not constituting an audit, with respect to certain amounts, percentages
and financial information that are derived from the general accounting
records of the Company and its consolidated subsidiaries and are included
in the Registration Statement, the Prospectus and any Integrated
Prospectus and in Exhibit 12 to the Registration Statement, including the
information included or incorporated in the Company's most recent Annual
Report on Form 10-K under the captions "Business" (Item 1), "Selected
Financial Data" (Item 6) and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" (Item 7) and the
information included or incorporated in the Company's Quarterly Reports on
Form 10-Q under the caption "Management's Discussion and
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<PAGE>
Analysis of Financial Condition and Results of Operations,"and have
compared such amounts, percentages and financial information with such
records and with information derived from such records and have found them
to be in agreement, excluding any questions of legal interpretation; and
(v) on the basis of a reading of any unaudited pro forma
consolidated condensed financial statements included in the Registration
Statement, the Prospectus and any Integrated Prospectus, carrying out
certain specified procedures that would not necessarily reveal matters of
significance with respect to the comments set forth in this paragraph (v),
inquiries of certain officials of the Company, its consolidated
subsidiaries and any acquired company who have responsibility for
financial and accounting matters and proving the arithmetic accuracy of
the application of the pro forma adjustments to the historical amounts in
the unaudited pro forma consolidated condensed financial statements,
nothing came to their attention that caused them to believe that the
unaudited pro forma consolidated condensed financial statements do not
comply in form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X or that the pro forma
adjustments have not been properly applied to the historical amounts in
the compilation of such statements.
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied
by a written explanation of the Company as to the significance thereof,
unless the Representatives deem such explanation unnecessary, and (B) such
changes, decreases or increases do not, in the sole judgment of the
Representa tives, make it impractical or inadvisable to proceed with the
purchase and delivery of the Securities as contemplated by the
Registration Statement.
References to the Registration Statement, the Prospectus and any
Integrated Prospectus in this paragraph (d) with respect to either letter
referred to above shall include any amendment or supplement thereto at the
date of such letter.
(e) The Representatives shall have received a certificate,
dated the Firm Closing Date, of the chief executive officer and the chief
financial or accounting officer of the Company to the effect that:
(i) the representations and warranties of the Company in
this Agreement are true and correct as if made on and as of the Firm
Closing Date; the Registration Statement, as amended as of the Firm
Closing Date, does not include any untrue statement of a material fact or
omit to state any material fact necessary to make the
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statements therein not misleading, and the Prospectus or any Integrated
Prospectus, as amended or supplemented as of the Firm Closing Date, does
not include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and
the Company has performed all covenants and agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the
Firm Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto and no
order directed at any document incorporated by reference in the
Registration Statement, the Prospectus or any Integrated Prospectus or any
amendment or supplement thereto has been issued, and no proceedings for
that purpose have been instituted or threatened or, to the best of the
Company's knowledge, are contemplated by the Commission; and
(iii) subsequent to the respective dates as of which
information is given in the Registration Statement, the Prospectus and any
Integrated Prospectus, neither the Company nor any of its subsidiaries has
sustained any material loss or interference with their respective
businesses or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute
or any legal or governmental proceeding, and there has not been any
material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise),
management, business prospects, net worth or results of operations of the
Company or any of its subsidiaries, except in each case as described in or
contemplated by the Prospectus or any Integrated Prospectus (exclusive of
any amendment or supplement thereto).
(f) On or before the Firm Closing Date, the Representatives
and counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from the
Company.
(g) The Representatives shall have received from each person
who is a director or executive officer of the Company an agreement to the effect
that such person will not, directly or indirectly, without the prior written
consent of Prudential Securities Incorporated, on behalf of the Underwriters,
offer, sell, offer to sell, contract to sell, pledge, grant any option to
purchase or otherwise sell or dispose (or announce any offer, sale, offer of
sale, contract of sale, pledge, grant of an option to purchase or other sale or
disposition) of any shares of Securities or any securities convertible into, or
exchangeable or exercisable for, the Securities for a period of 90 days after
the date of this Agreement. Prudential Securities Incorporated, at any time and
without notice, may release all or any portion of the securities subject to such
agreements.
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(h) If applicable, prior to the commencement of the offering
of the Securities, the Securities and any Underlying Securities shall have been
approved for listing on the New York Stock Exchange, subject to official notice
of issuance.
All opinions, certificates, letters and documents delivered pursuant
to this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase
and pay for any Option Securities shall be subject, in their discretion, to each
of the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed to
refer to such Option Securities and the related Option Closing Date,
respectively.
7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter or such controlling person may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon:
(i) any untrue statement or alleged untrue statement
made by the Company in Section 2 of this Agreement,
(ii) any untrue statement or alleged untrue statement of
any material fact contained in (A) the Registration Statement or any
amendment thereto or any Preliminary Prospectus, the Prospectus or any
Integrated Prospectus or any amendment or supplement thereto or (B) any
application or other document, or any amendment or supplement thereto,
executed by the Company or based upon written information furnished by or
on behalf of the Company filed in any jurisdiction in order to qualify the
Securities under the securities or blue sky laws thereof or filed with the
Commission or any securities association or securities exchange (each an
"Application"),
(iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any Integrated Prospectus or any amendment
or supplement thereto, or any Application a
30
<PAGE>
material fact required to be stated therein or necessary to make the
statements therein not misleading or
(iv) any untrue statement or alleged untrue statement of
any material fact contained in any audio or visual materials used in
connection with the marketing of the Securities, including, without
limitation, slides, videos, films and tape recordings,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement or
any amendment thereto, any Preliminary Prospectus, the Prospectus or any
Integrated Prospectus or any amendment or supplement thereto, or any Application
in reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives specifically for use
therein. This indemnity agreement will be in addition to any liability which the
Company may otherwise have. The Company will not, without the prior written
consent of the Underwriter or Underwriters purchasing, in the aggregate, more
than 50% of the Firm Securities, settle or compromise or consent to the entry of
any judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not any
such Underwriter or any person who controls any such Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act is a party to
such claim, action, suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of all of the Underwriters and such
controlling persons from all liability arising out of such claim, action, suit
or proceeding.
(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement, as amended at the date of this
Agreement as specified in Schedule 1 hereto, and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act against any losses, claims, damages or liabilities to which
the Company or any such director, officer or controlling person may become
subject under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, as amended at the date of this Agreement as
specified in Schedule 1 hereto, any Preliminary Prospectus, the Prospectus or
any Integrated Prospectus or any amendment or supplement thereto, or any
Application or (ii) the omission or the alleged
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<PAGE>
omission to state therein a material fact required to be stated in the
Registration Statement, as amended at the date of this Agreement as specified in
Schedule 1 hereto, any Preliminary Prospectus, the Prospectus or any Integrated
Prospectus or any amendment or supplement thereto, or any Application or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives specifically for use therein; and, subject to the
limitation set forth immediately preceding this clause, will reimburse, as
incurred, any legal or other expenses reasonably incurred by the Company or any
such director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or any action in respect
thereof. This indemnity agreement will be in addition to any liability which
such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 7. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party; provided, however, that if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 7 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Representatives in the case of
paragraph
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(a) of this Section 7, representing the indemnified parties under such paragraph
(a) who are parties to such action or actions) or (ii) the indemnifying party
does not promptly retain counsel satisfactory to the indemnified party or (iii)
the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. After such notice
from the indemnifying party to such indemnified party, the indemnifying party
will not be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the consent of the indemnifying
party.
(d) In circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 7 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect (i) the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party on the other from the offering of the Securities or
(ii) if the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total proceeds from the offering (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions received by
the Underwriters. The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters, the parties'
relative intents, knowledge, access to information and opportunity to correct or
prevent such statement or omission, and any other equitable considerations
appropriate in the circumstances. The Company and the Underwriters agree that it
would not be equitable if the amount of such contribution were determined by pro
rata or per capita allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take
into account the equitable considerations referred to above in this paragraph
(d). Notwithstanding any other provision of this paragraph (d), no Underwriter
shall be obligated to make contributions hereunder that in the aggregate exceed
the total public offering price of the Securities purchased by such Underwriter
under this Agreement, less the aggregate amount of any damages that such
Underwriter has otherwise been required to pay in respect of the same or any
substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution
33
<PAGE>
from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute hereunder are several in proportion to
their respective underwriting obligations and not joint, and contributions among
Underwriters shall be governed by the provisions of the Prudential Securities
Incorporated Master Agreement Among Underwriters. For purposes of this paragraph
(d), each person, if any, who controls an Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act shall have the same
rights to contribution as such Underwriter, and each director of the Company,
each officer of the Company who signed the Registration Statement as amended at
the date of this Agreement as specified in Schedule 1 hereto and each person, if
any, who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, shall have the same rights to contribution as
the Company.
8. Default of Underwriters. If one or more Underwriters default in
their obligations to purchase Firm Securities or Option Securities hereunder and
the aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or Option
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase. If one or more Underwriters so default with respect to an aggregate
number of Securities that is more than ten percent of the aggregate number of
Firm Securities or Option Securities, as the case may be, to be purchased by all
of the Underwriters at such time hereunder, and if arrangements satisfactory to
the Representatives are not made within 36 hours after such default for the
purchase by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives) of the Securities with respect to
which such default occurs, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter or the Company other than as provided
in Section 9 hereof. In the event of any default by one or more Underwriters as
described in this Section 8, the Representatives shall have the right to
postpone the Firm Closing Date or the Option Closing Date, as the case may be,
established as provided in Section 3 of this Agreement for not more than seven
business days in order that any necessary changes may be made in the
arrangements or documents for the purchase and delivery of the Firm Securities
or Option Securities, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 8. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
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<PAGE>
9. Survival. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, its officers and the
several Underwriters set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement shall remain in full force and
effect, regardless of (i) any investigation made by or on behalf of the Company,
any of its officers or directors, any Underwriter or any controlling person
referred to in Section 7 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 5 and 7 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
10. Termination. (a) This Agreement may be terminated with respect
to the Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company given prior to the Firm Closing Date or
the related Option Closing Date, respectively, in the event that the Company
shall have failed, refused or been unable to perform all obligations and satisfy
all conditions on its part to be performed or satisfied hereunder at or prior
thereto or, if at or prior to the Firm Closing Date or such Option Closing Date,
respectively,
(i) the Company or any of the Subsidiaries shall have,
in the sole judgment of the Representatives, sustained any material loss
or interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding or there shall have been any material adverse change, or any
development involving a prospective material adverse change (including
without limitation a change in management or control of the Company, which
includes the termination of the employment of Thomas A. Rizk), in the
condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and the Subsidiaries, except in each
case as described in or contemplated by the Prospectus (exclusive of any
amendment or supplement thereto);
(ii) trading in the Common Stock shall have been
suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been
suspended or minimum or maximum prices shall have been established on such
exchange;
(iii) there shall have been any downgrading in the
rating of any debt securities or preferred stock of the Company by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act), or any public announcement that
any such organization has under surveillance or review its rating of any
debt securities or preferred stock of the Company (other than an
announcement with
35
<PAGE>
positive implications of a possible upgrading, and no implication of a
possible downgrading, of such rating);
(iv) a banking moratorium shall have been declared by
New York or United States authorities; or
(v) there shall have been (A) an outbreak or escalation
of hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or
material adverse change in general economic, political or financial
conditions having an effect on the U.S. financial markets that, in the
sole judgment of the Representatives, makes it impractical or inadvisable
to proceed with the public offering or the delivery of the Securities as
contemplated by the Registration Statement, as amended at the date of this
Agreement as specified in Schedule 1 hereto
(b) Termination of this Agreement pursuant to this Section 10
shall be without liability of any party to any other party except as provided in
Section 9 hereof.
11. Information Supplied by Underwriters. The statements set forth
in the last paragraph on the front cover page of the Prospectus Supplement and
under the heading "Underwriting" in the Prospectus Supplement (to the extent
such statements relate to the Underwriters) constitute the only information
furnished by any Underwriter through the Representatives to the Company for the
purposes of Sections 2(b) and 7(b) hereof. The Underwriters confirm that such
statements (to such extent) are correct.
12. Notices. All communications hereunder shall be in writing and,
if sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, One New York Plaza, New York, New York 10292, Attention: Equity
Transactions Group; and if sent to the Company, shall be delivered or sent by
mail, telex or facsimile transmission and confirmed in writing to the Company at
11 Commerce Drive, Cranford, New Jersey, 07016, Attention: Thomas A. Rizk.
13. Successors. This Agreement shall inure to the benefit of and
shall be binding upon the several Underwriters, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company
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<PAGE>
contained in Section 7 of this Agreement shall also be for the benefit of any
person or persons who control any Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act and (ii) the indemnities of the
Underwriters contained in Section 7 of this Agreement shall also be for the
benefit of the directors of the Company, the officers of the Company who have
signed the Registration Statement as amended at the date of this Agreement as
specified in Schedule 1 hereto and any person or persons who control the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act.
No purchaser of Securities from any Underwriter shall be deemed a successor
because of such purchase.
14. Applicable Law. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.
15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company and each
of the several Underwriters.
Very truly yours,
MACK-CALI REALTY CORPORATION
By: /s/ Thomas A. Rizk
---------------------------------
Name: Thomas A. Rizk
Title: Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
By: PRUDENTIAL SECURITIES INCORPORATED
By: /s/ Jean-Claude Canfin
--------------------------------------
Name: Jean-Claude Canfin
Title: Managing Director
<PAGE>
SCHEDULE 1
DESCRIPTION OF SECURITIES; TERMS OF OFFERING
1. Registration Statement:
File No. 333-19101
2. Date of Underwriting Agreement:
February 19, 1998
3. Underwriters:
Prudential Securities Incorporated
4. Title of Securities:
Common Stock, par value $.01 per share
5. Aggregate Number of Firm Securities:
Common Stock, par value $.01 per share: 2,500,000 million shares
6. Aggregate Number of Option Securities:
Common Stock, par value $.01 per share: 375,000 shares
7. Price to Public:
Common Stock, par value $.01 per share: 38.50 per share
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8. Purchase Price by Underwriters:
Common Stock, par value $.01 per share: 36.96 per share
9. Specified Funds for Payment of Purchase Price:
Wire Transfer of Same Day Funds
10. Terms of Securities:
Preferred Stock: N/A
Warrants: N/A
Other Provisions: N/A
11. Lock-up Requirements:
As set forth in Sections 4(h) and 6(g) of this Agreement.
12. Delivery of Securities:
Firm Securities:
Prudential Securities Incorporated, One New York Plaza, New York, New York
on or about February 25, 1998
Option Securities:
Prudential Securities Incorporated, One New York Plaza, New York, New York
no later than March 27, 1998, if option exercised
13. Pre-Closing Location:
Pryor, Cashman, Sherman, & Flynn, 410 Park Avenue, New York, New York on
February 24, 1998
2
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14. Closing Location:
Pryor, Cashman, Sherman, & Flynn, 410 Park Avenue, New York, New York on
February 25, 1998
15. Miscellaneous:
3
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SCHEDULE 2
UNDERWRITERS
Number of
Firm Shares to
Underwriter be Purchased
- ----------- --------------
Prudential Securities Incorporated 2,500,000
Total 2,500,000
4
MACK-CALI REALTY CORPORATION
UNDERWRITING AGREEMENT
March 24, 1998
To the Representatives named in Schedule 1 hereto of the
several Underwriters named in Schedule 2 hereto
Ladies and Gentlemen:
Mack-Cali Realty Corporation, a Maryland corporation qualified as a
real estate investment trust (the "Company"), hereby confirms its agreement with
the several underwriters named in Schedule 2 hereto (the "Underwriters"), for
whom you have been duly authorized to act as representatives (in such
capacities, the "Representatives"), as set forth below. If you are the only
Underwriters, all references herein to the Representatives shall be deemed to be
to the Underwriters.
1. Securities. Subject to the terms and conditions herein contained,
the Company proposes to issue and sell to the several Underwriters certain
securities of the Company identified in Schedule 1 hereto (the "Firm
Securities"). The Company also proposes to issue and sell to the several
Underwriters the additional securities identified in Schedule 1 if requested by
the Representatives as provided in Section 3 of this Agreement. Any and all
shares of such additional securities to be purchased by the several Underwriters
pursuant to such option are referred to herein as the "Option Securities," and
the Firm Securities and any Option Securities are collectively referred to
herein as the "Securities."
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the several Underwriters
that:
(a) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Act"). A registration
statement (the file number of which is set forth in Schedule 1 hereto) on such
Form with respect to the Securities,
<PAGE>
including a basic prospectus, has been filed by the Company with the Securities
and Exchange Commission (the "Commission") under the Act, and one or more
amendments to such registration statement may also have been so filed. Such
registration statement, as so amended, has been declared by the Commission to be
effective under the Act. Such registration statement, as amended at the date of
this Agreement as specified in Schedule 1 hereto, meets the requirements set
forth in Rule 415(a)(1)(x) under the Act and complies in all other material
respects with said Rule. The Company will next file with the Commission either
(A) if the Company relies on Rule 434 under the Act, a Term Sheet (as
hereinafter defined) relating to the Securities, that shall identify the
Preliminary Prospectus (as hereinafter defined) that it supplements and, if
required to be filed pursuant to Rules 434(c)(2) and 424(b), an Integrated
Prospectus (as hereinafter defined), in either case, containing such information
as is required or permitted by Rules 434, 430A, and 424(b) under the Act or (B)
if the Company does not rely on Rule 434 under the Act, pursuant to Rule 424(b)
under the Act a final prospectus supplement to the basic prospectus included in
such registration statement, as so amended, describing the Securities and the
offering thereof, in such form as has been provided to, or discussed with, and
approved by the Representatives as provided in section 4(a) of this Agreement.
As used in this Agreement, the term "Registration Statement" means such
registration statement, as amended at the time when it was declared effective,
including (i) all financial schedules and exhibits thereto, (ii) all documents
incorporated by reference or deemed to be incorporated by reference therein and
(iii) any information omitted therefrom pursuant to Rule 430A under the Act and
included in the Prospectus (as hereinafter defined) or, if required to be filed
pursuant to Rules 434(c)(2) and 424(b), in the Integrated Prospectus; the term
"Basic Prospectus" means the prospectus included in the Registration Statement;
the term "Preliminary Prospectus" means any preliminary form of the Prospectus
(as defined herein) specifically relating to the Securities, in the form first
filed with, or transmitted for filing to, the Commission pursuant to Rule 424 of
the Rules and Regulations; the term "Prospectus Supplement" means any prospectus
supplement specifically relating to the Securities, in the form first filed
with, or transmitted for filing to, the Commission pursuant to Rule 424 under
the Securities Act; the term "Prospectus" means: (A) if the Company relies on
Rule 434 under the Act, the Term Sheet relating to the Securities that is first
filed pursuant to Rule 424(b)(7) under the Act, together with the Preliminary
Prospectus identified therein that such Term Sheet supplements; (B) if the
Company does not rely on Rule 434 under the Act, the Preliminary Prospectus; or
(C) if the Company does not rely on Rule 434 under the Act and if no prospectus
is required to be filed pursuant to Rule 424 under the Act, the Basic
Prospectus, including, in each case, the Prospectus Supplement; "Basic
Prospectus," "Prospectus," "Preliminary Prospectus" and "Prospectus Supplement"
shall include in each case the documents, if any, filed by the Company with the
Commission pursuant to the United States Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and incorporated by reference therein; the term
"Integrated Prospectus" means a prospectus first filed with the
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Commission pursuant to Rules 434(c)(2) and 424(b) under the Act; and the term
"Term Sheet" means any abbreviated term sheet that satisfies the requirements of
Rule 434 under the Act. Any reference in this Agreement to an "amendment" or
"supplement" to any Preliminary Prospectus, the Prospectus, or any Integrated
Prospectus or an "amendment" to any registration statement (including the
Registration Statement) shall be deemed to include any document incorporated by
reference therein that is filed with the Commission under the Exchange Act after
the date of such Preliminary Prospectus, Prospectus, Integrated Prospectus or
registration statement, as the case may be. For purposes of the preceding
sentence, any reference to the "effective date" of an amendment to a
registration statement shall, if such amendment is effected by means of the
filing with the Commission under the Exchange Act of a document incorporated by
reference in such registration statement, be deemed to refer to the date on
which such document was so filed with the Commission; any reference herein to
the "date" of a Prospectus that includes a Term Sheet shall mean the date of
such Term Sheet.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus. When any Preliminary
Prospectus was filed with the Commission it (i) contained all statements
required to be stated therein in accordance with, and complied in all material
respects with the requirements of, the Act, the Exchange Act and the respective
rules and regulations of the Commission thereunder and (ii) did not include any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. When the Registration Statement or any
amendment thereto was or is declared effective, it (i) contained or will contain
all statements required to be stated therein in accordance with, and complied or
will comply in all material respects with the requirements of, the Act, the
Exchange Act and the respective rules and regulations of the Commission
thereunder and (ii) did not or will not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading. When the Prospectus or any Term Sheet that is
a part thereof or any Integrated Prospectus or any amendment or supplement to
the Prospectus is filed with the Commission pursuant to Rule 424(b), on the date
when the Prospectus is otherwise amended or supplemented and on the Firm Closing
Date and any Option Closing Date (both as hereinafter defined), each of the
Prospectus and, if required to be filed pursuant to Rules 434(c)(2) and 424(b)
under the Act, the Integrated Prospectus, as amended or supplemented at any such
time, (i) contained or will contain all statements required to be stated therein
in accordance with, and complied or will comply in all material respects with
the requirements of, the Act and the Exchange Act and the respective rules and
regulations of the Commission thereunder and (ii) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The foregoing
provisions of this paragraph (b) do not apply to
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statements or omissions made in any Preliminary Prospectus or any amendment or
supplement thereto, the Registration Statement or any amendment thereto, the
Prospectus or, if required to be filed pursuant to Rules 434(c)(2) and 424(b)
under the Act, the Integrated Prospectus or any amendment or supplement thereto
in reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives specifically for use
therein.
(c) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Maryland and is duly qualified to transact business and is in good standing
under the laws of all other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such qualification, except
where the failure to be so qualified does not amount to a material liability or
disability to the Company and its subsidiaries, taken as a whole.
(d) Each of the subsidiaries of the Company (the
"Subsidiaries") has been duly organized and is validly existing as a general or
limited partnership or corporation in good standing under the laws of the
jurisdiction of its organization, and is duly qualified to transact business and
is in good standing under the laws of all other jurisdictions where the
ownership or leasing of its properties or the conduct of its business requires
such qualification, except where the failure to be so qualified does not amount
to a material liability or disability to the Company and its subsidiaries, taken
as a whole. The issued shares of capital stock of each of the Subsidiaries that
is a corporation are duly authorized, validly issued, fully paid and
nonassessable, and all of the partnership interests in each Subsidiary that is a
partnership are validly issued and fully paid. Except as described in the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus), all of such shares and interests in the Subsidiaries owned by the
Company are owned beneficially by the Company or another Subsidiary free and
clear of any security interests, mortgages, pledges, grants, liens,
encumbrances, equities or claims.
(e) There are no outstanding (A) securities or obligations of
the Company or any of the Subsidiaries convertible into or exchangeable for any
capital stock of the Company or any Subsidiary, (B) warrants, rights or options
to subscribe for or purchase from the Company or any Subsidiary any such capital
stock or any such convertible or exchangeable securities or obligations, or (C)
obligations of the Company or any such Subsidiary to issue any shares of capital
stock, any such convertible or exchangeable securities or obligations, or any
such warrants, rights or options, except as described in the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus).
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<PAGE>
(f) The Company and each of the Subsidiaries has full power,
corporate or other, to own or lease their respective properties and conduct
their respective businesses as described in the Registration Statement, the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus); and the Company has full power, corporate or other, to enter into
this Agreement and any other agreement pursuant to which the Securities are
issued as specified in Schedule 1 to this Agreement (the "Securities Documents")
and to carry out all the terms and provisions hereof and thereof to be carried
out by it.
(g) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus and any Integrated Prospectus (or,
if the Prospectus and any required Integrated Prospectus are not in existence,
the most recent Preliminary Prospectus). All of the capital stock of the Company
has been duly authorized and the capital stock of the Company outstanding is
validly issued, fully paid and nonassessable.
(h) The Securities have been duly authorized, and, when such
securities are issued and delivered as contemplated by the terms of this
Agreement and the applicable Securities Document such securities will be validly
issued, fully paid and non-assessable.
(i) The execution and delivery of the Securities have been
duly authorized by all necessary corporate action, and, at the Firm Closing Date
or the related Option Closing Date (as the case may be), the Securities will
have been duly executed and delivered by the Company, and if applicable,
assuming due authorization, execution and delivery of the Securities by parties
other than the Company, will be the legal, valid, binding and enforceable
obligations of the Company, subject to the effect of bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization and similar laws relating to
creditors' rights generally and to the application of equitable principles in
any proceeding, whether at law or in equity.
(j) The securities of the Company issuable in exchange for or
upon conversion of the Securities as specified in Schedule 1 to this Agreement
(the "Underlying Securities") have been duly authorized and reserved, and, when
such securities are issued and delivered as contemplated by the terms of the
applicable Securities Document, such securities will be validly issued, fully
paid and non-assessable.
(g) The execution and delivery of the Securities Documents has
been duly authorized by all necessary corporate action of the Company, and, at
the Firm Closing
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Date or the related Option Closing Date (as the case may be), such agreements
will have been duly executed and delivered by the Company, and assuming due
authorization, execution and delivery of the Securities Documents by parties
other than the Company as specified in the applicable Securities Documents, and,
if required, such Securities Documents have been filed with the Secretary of
State of the State of Maryland or any other applicable jurisdiction, and such
agreements will constitute valid and binding instruments of the Company
enforceable against the Company in accordance with their respective terms,
subject to the effect of bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and similar laws relating to creditors' rights
generally and to the application of equitable principles in any proceeding,
whether at law or in equity.
(k) No holders of outstanding shares of capital stock of the
Company are entitled as such to any preemptive or other rights to subscribe for
any of the Securities or Underlying Securities, and no holder of securities of
the Company or any Subsidiary has any right which has not been waived to require
the Company to register the offer or sale of any securities owned by such holder
under the Act in the public offering contemplated by this Agreement.
(l) The Securities and Underlying Securities conform to their
description contained in the Prospectus and any Integrated Prospectus (or, if
the Prospectus and any required Integrated Prospectus are not in existence, the
most recent Preliminary Prospectus).
(m) The combined financial statements and schedules of the
Company and the Cali Group (as defined in the Registration Statement) and the
consolidated financial statements and schedules of the Company and its
consolidated subsidiaries included in or incorporated by reference in the
Registration Statement, the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus) fairly present the combined financial position of
the Company and the Cali Group and fairly present the consolidated financial
position of the Company and its consolidated subsidiaries, as the case may be,
and the results of operations and changes in financial condition as of the dates
and periods therein specified. Such combined and consolidated financial
statements and schedules have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved (except as otherwise noted therein).
(n) The selected financial data set forth under the caption
"Selected Financial Data" in the Prospectus and any Integrated Prospectus (or,
if the Prospectus and any required Integrated Prospectus are not in existence,
the most recent Preliminary Prospectus)
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<PAGE>
fairly present, on the basis stated in the Prospectus and any Integrated
Prospectus (or such Preliminary Prospectus) and such Annual Report, the
information included therein. The pro forma financial statements and other pro
forma financial information included in or incorporated therein in the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus) comply in all material respects with the applicable requirements of
Rule 11-02 of Regulation S-X of the Commission and the pro forma adjustments
have been properly applied to the historical amounts in the compilation of such
statements and the assumptions used in the preparation thereof are, in the
opinion of the Company, reasonable.
(o) Price Waterhouse LLP, which has certified certain
financial statements of the Company and its consolidated subsidiaries and of the
Cali Group and delivered its reports with respect to the audited consolidated
financial statements and schedules, and any other accounting firm that has
certified financial statements and delivered its reports with respect thereto,
included or incorporated by reference in the Registration Statement, the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus), are independent public accountants as required by the Act, the
Exchange Act and the respective rules and regulations thereunder.
(p) The execution and delivery of this Agreement has been duly
authorized by the Company and this Agreement has been duly executed and
delivered by the Company, and is the valid and binding agreement of the Company
enforceable against the Company in accordance with the terms hereof, subject to
the effect of bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws relating to creditors' rights generally and to
the application of equitable principles in any proceeding, whether at law or in
equity and except as rights to indemnity and contribution hereunder may be
limited by federal or state securities laws or principles of public policy.
(q) No legal or governmental proceedings are pending to which
the Company or any of the Subsidiaries or to which the property of the Company
or any of the Subsidiaries is subject, that are required to be described in the
Registration Statement, the Prospectus or any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus) and are not described therein, and no such
proceedings have been threatened against the Company or any of the Subsidiaries;
and no contract or other document is required to be described in the
Registration Statement, the Prospectus or any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus) or to be filed as an exhibit to the Registration
Statement that is not described therein or filed as
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<PAGE>
required.
(r) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement and the Securities
Documents, the compliance by the Company with the other provisions of this
Agreement, the Securities and the Securities Documents and the consummation of
the other transactions herein and therein contemplated do not (i) require the
consent, approval, authorization, registration or qualification of or with any
governmental authority, except such as have been obtained, such as may be
required under state securities or blue sky laws and, if the registration
statement filed with respect to the Securities (as amended) is not effective
under the Act as of the time of execution hereof, such as may be required (and
shall be obtained as provided in this Agreement) under the Act, or (ii) conflict
with or result in a breach or violation of any of the terms and provisions of,
or constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any of the properties or assets of the Company
or any of the Subsidiaries pursuant to any indenture, mortgage, deed of trust,
lease or other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the Subsidiaries or
any other of their respective properties are bound, or the Articles of
Incorporation, By-laws or other organizational documents, as the case may be, of
the Company or any of the Subsidiaries, or any statute or any judgment, decree,
order, rule or regulation of any court or other governmental authority or any
arbitrator applicable to the Company or any of the Subsidiaries or any of their
properties.
(s) The Company has not, directly or indirectly, (i) taken any
action designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) since the filing of the Registration Statement (A) sold, bid
for, purchased, or paid anyone any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(t) Subsequent to the respective dates as of which information
is given in the Registration Statement, the Prospectus and any Integrated
Prospectus (or, if the Prospectus and any required Integrated Prospectus are not
in existence, the most recent Preliminary Prospectus), (1) neither the Company
nor any of the Subsidiaries has incurred any material liability or obligation,
direct or contingent, or entered into any material transaction, which is not in
the ordinary course of business; (2) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock; and (3) there has not been any
material change in the capital stock, short-term debt or long-term debt of the
Company or the Subsidiaries, except in each
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<PAGE>
case as described in or contemplated by the Prospectus and any Integrated
Prospectus (or, if the Prospectus and any required Integrated Prospectus are not
in existence, the most recent Preliminary Prospectus).
(u) The Company or the Subsidiaries have good and indefeasible
title in fee simple to all of the Properties (as defined in the Prospectus) and
marketable title to all other property owned by each of them, in each case free
and clear of any security interest, lien, mortgage, pledge, encumbrance, equity,
claim and other defect, except liens which do not materially and adversely
affect the value of such property and will not interfere with the use made or
proposed to be made of such property by the Company or such Subsidiary, and any
and all real property and buildings held under lease by the Company or any such
Subsidiary are held under valid, subsisting and enforceable leases, with such
exceptions as are not material and do not interfere with the use made or
proposed to be made of such property and buildings by the Company or such
Subsidiary, in each case except as described in the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus).
(v) No labor dispute with the employees of the Company or any
of the Subsidiaries exists or is threatened or imminent that could result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and the
Subsidiaries, taken as a whole, except as described in the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus).
(w) The Company and the Subsidiaries own or possess, or can
acquire on reasonable terms, all material patents, trademarks, service marks,
trade names, licenses, copyrights and proprietary and other confidential
information currently employed by them in connection with their respective
businesses, and neither the Company nor any of the Subsidiaries has received any
notice of infringement of or conflict with asserted rights of any third party
with respect to the foregoing which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a material
adverse change in the condition (financial or otherwise), business prospects,
net worth or results of operations of the Company and the Subsidiaries, taken as
a whole, except as described in the Prospectus and any Integrated Prospectus
(or, if the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus).
(x) The Company and each of the Subsidiaries is insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
will be engaged; neither the Company nor any of the Subsidiaries has been
refused any insurance coverage sought or applied for; and neither the Company
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nor any of the Subsidiaries has any reason to believe that any of them will not
be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have material adverse effect
on the condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and the Subsidiaries, taken as a whole,
except as described in the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus).
(y) None of the Subsidiaries is currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock or other equity interest, from
repaying to the Company any loans or advances to such Subsidiary from the
Company or from transferring any of such Subsidiary's property or assets to the
Company or any of the other Subsidiaries, except as described in the Prospectus
and any Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus).
(z) The Company and each of the Subsidiaries has complied with
all laws, regulations and orders applicable to it or its respective business and
properties except where the failure to so comply would not result in a material
adverse change in the condition (financial or otherwise), business prospects,
net worth or results of operations of the Company and the Subsidiaries, taken as
a whole; the Company and the Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state, municipal
or foreign regulatory authorities necessary to conduct their respective
businesses except where the failure to possess the same would not result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and the
Subsidiaries, taken as a whole; and neither the Company nor any of the
Subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a material adverse change in the condition (financial
or otherwise), business prospects, net worth or results of operations of the
Company and the Subsidiaries, taken as a whole, except as described in the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus).
(aa) The Company will conduct its operations in a manner that
will not subject it to registration as an investment company under the
Investment Company Act of 1940, as amended, and the transactions contemplated by
this Agreement will not cause the
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Company to become an investment company subject to registration under such Act.
(ab) The Company and each of the Subsidiaries has filed all
foreign, federal, state and local tax returns that are required to be filed or
have requested extensions thereof (except in any case in which the failure so to
file would not have a material adverse effect on the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and the Subsidiaries, taken as a whole) and has paid all taxes required
to be paid by it and any other assessment, fine or penalty levied against it, to
the extent that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good faith or
as described in the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus).
(ac) The Company is organized in conformity with the
requirements for qualification as a real estate investment trust (a "REIT")
under the Internal Revenue Code of 1986, as amended (the "Code"), and the
present and contemplated method of operation of the Company and the Subsidiaries
does and will enable the Company to meet the requirements for taxation as a REIT
under the Code.
(ad) Neither the Company nor any of the Subsidiaries is in
violation of any federal or state law or regulation relating to occupational
safety and health and the Company and the Subsidiaries have received all
permits, licenses or other approvals required of them under applicable federal
and state occupational safety and health and environmental laws and regulations
to conduct their respective businesses, and the Company and each of the
Subsidiaries is in compliance with all terms and conditions of any such permit,
license or approval, except any such violation of law or regulation, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals which would not,
singly or in the aggregate result in a material adverse change in the condition
(financial or otherwise), business prospects, net worth or results of operations
of the Company and the Subsidiaries, taken as a whole, except as described in
the Prospectus and any Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus).
(ae) Except for the shares of capital stock of each of the
Subsidiaries owned by the Company or another Subsidiary, neither the Company nor
any of the Subsidiaries owns any shares of stock or any other equity securities
of any corporation or has any equity interest in any firm, partnership,
association or other entity, except as described in or contemplated by the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus).
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(af) The Company and the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or specific
authorizations; (2) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (3) access to assets is
permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(ag) Neither the Company nor any of the Subsidiaries is in
violation of any term or provision of its Articles of Incorporation, By-laws,
partnership agreements or other organizational documents, as the case may be; no
default exists, and no event has occurred which, with notice or lapse of time or
both, would constitute a default, and the consummation of the transactions by
this Agreement and under the Securities Documents will not result in any default
in the due performance and observance of any term, covenant or condition of any
indenture, mortgage, deed of trust, lease or other agreement or instrument to
which the Company or any Subsidiary is a party or by which the Company, the
Subsidiaries or the Properties or any of their respective other properties is
bound or may be affected except such as would not result in any material adverse
effect in the condition (financial or otherwise), business prospects, net worth
or results of operations of the Company and the Subsidiaries, taken as a whole.
(ah) If required as set forth in Schedule 1 hereto, the
Securities and any Underlying Securities have been approved for listing on the
New York Stock Exchange, subject to official notice of issuance.
(ai) (A) Neither the Company nor any Subsidiary knows of any
violation of any municipal, state or federal law, rule or regulation (including
those pertaining to environmental matters) concerning the Properties or any part
thereof which would have a material adverse effect in the condition (financial
or otherwise), business prospects, net worth or results of operations of the
Company and the Subsidiaries, taken as a whole; (B) each of the Properties
complies with all applicable zoning laws, ordinances, regulations and deed
restrictions or other covenants in all material respects and, if and to the
extent there is a failure to comply, such failure does not materially impair the
value of any of the Properties and will not result in a forfeiture or reversion
of title; (C) neither the Company nor any Subsidiary has received from any
governmental authority any written notice of any condemnation of or zoning
change affecting the Properties or any part thereof, and neither the Company nor
any Subsidiary knows of any such condemnation or zoning change which is
threatened and which
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<PAGE>
if consummated would have a material adverse effect in the condition (financial
or otherwise), business prospects, net worth or results of operations of the
Company and the Subsidiaries, taken as a whole; (D) all liens, charges,
encumbrances, claims, or restrictions on or affecting the properties and assets
(including the Properties) of the Company or any of the Subsidiaries that are
required to be described in the Prospectus and any Integrated Prospectus (or, if
the Prospectus and any required Integrated Prospectus are not in existence, the
most recent Preliminary Prospectus) are disclosed therein; (E) no lessee of any
portion of any of the Properties is in default under any of the leases governing
such properties and there is no event which, but for the passage of time or the
giving of notice or both would constitute a default under any of such leases,
except such defaults that would not have a material adverse effect in the
condition (financial or otherwise), business prospects, net worth or results of
operations of the Company and the Subsidiaries, taken as a whole; and (F) except
as provided by law no tenant under any lease pursuant to which the Company or
any of the Subsidiaries leases the Properties will have an option or right of
first refusal to purchase the premises leased thereunder or the building of
which such premises are a part.
(aj) Except as otherwise disclosed in the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus) or in
the Phase I Environmental Audits prepared by Environmental Waste Management
Associates, Inc. previously delivered to the Representatives (the "Audits"), (i)
neither the Company, any of the Subsidiaries nor, to the best knowledge of the
Company, any other owners of the property at any time or any other party has at
any time, handled, stored, treated, transported, manufactured, spilled, leaked,
or discharged, dumped, transferred or otherwise disposed of or dealt with,
Hazardous Materials (as hereinafter defined) on, to or from the Properties,
other than by any such action taken in compliance with all applicable
Environmental Statutes or by the Company, any of the Subsidiaries or any other
party in connection with the ordinary use of residential, retail or commercial
properties owned by the Company; (ii) the Company does not intend to use the
Properties or any subsequently acquired properties for the purpose of handling,
storing, treating, transporting, manufacturing, spilling, leaking, discharging,
dumping, transferring or otherwise disposing of or dealing with Hazardous
Materials other than by any such action taken in compliance with all applicable
Environmental Statues or by the Company, any of the Subsidiaries or any other
party in connection with the ordinary use of residential, retail or commercial
properties owned by the Company; (iii) neither the Company nor any of the
Subsidiaries knows of any seepage, leak, discharge, release, emission, spill, or
dumping of Hazardous Materials into waters on or adjacent to the Properties or
any other real property owned or occupied by any such party, or onto lands from
which Hazardous Materials might seep, flow or drain into such waters; (iv)
neither the Company nor any of the Subsidiaries has received any notice of, or
has any knowledge of any occurrence or circumstance which, with notice or
passage of time or both,
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<PAGE>
would give rise to a claim under or pursuant to any federal, state or local
environmental statute or regulation or under common law, pertaining to Hazardous
Materials on or originating from any of the Properties or any assets described
in the Prospectus and any Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus) or any other real property owned or occupied by any such party or
arising out of the conduct of any such party, including without limitation a
claim under or pursuant to any Environmental Statute (hereinafter defined); (v)
neither the Properties nor any other land owned by the Company or any of the
Subsidiaries is included or, to the best of the Company's knowledge, proposed
for inclusion on the National Priorities List issued pursuant to CERCLA (as
hereinafter defined) by the United States Environmental Protection Agency (the
"EPA") or, to the best of the Company's knowledge, proposed for inclusion on any
similar list or inventory issued pursuant to any other Environmental Statute or
issued by any other Governmental Authority (as hereinafter defined).
As used herein, "Hazardous Material" shall include, without
limitation any flammable explosives, radioactive materials, hazardous materials,
hazardous wastes, toxic substances, or related materials, asbestos or any
hazardous material as defined by any federal, state or local environmental law,
ordinance, rule or regulation including without limitation the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. ss.ss. 9601-9675 ("CERCLA"), the Hazardous Materials Transportation Act,
as amended, 49 U.S.C. ss.ss. 1801-1819, the Resource Conservation and Recovery
Act, as amended, 42 U.S.C. ss.ss. 6901-6992K, the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. ss.ss. 11001-11050, the Toxic
Substances Control Act, 15 U.S.C. ss.ss. 2601-2671, the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C. ss.ss. 136-136y, the Clean Air Act, 42
U.S.C. ss.ss. 7401-7642, the Clean Water Act (Federal Water Pollution Control
Act), 33 U.S.C. ss.ss. 1251-1387, the Safe Drinking Water Act, 42 U.S.C. ss.ss.
300f-300j-26, and the Occupational Safety and Health Act, 29 U.S.C. ss.ss.
651-678, as any of the above statutes may be amended from time to time, and in
the regulations promulgated pursuant to each of the foregoing (individually, an
"Environmental Statute") or by any federal, state or local governmental
authority having or claiming jurisdiction over the properties and assets
described in the Prospectus (a "Governmental Authority").
(ak) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters shall be deemed
to be a representation and warranty by the Company to each Underwriter as to the
matters covered thereby.
(al) The Company has not distributed and, prior to the later
of (i) the Closing Date and (ii) the completion of the distribution of the
Securities, will not distribute any material in connection with the offering and
sale of the Securities other than the
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Registration Statement or any amendment thereto, any Preliminary Prospectus, the
Prospectus or any Integrated Prospectus or any amendment or supplement thereto,
or other materials, if any, permitted by the Act.
3. Purchase, Sale and Delivery of the Securities.
(a) On the basis of the representations, warranties,
agreements and covenants herein contained and subject to the terms and
conditions herein set forth, the Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters, severally and not jointly, agrees to
purchase from the Company, at the purchase price specified in Schedule 1 hereto,
the number of Firm Securities set forth opposite the name of such Underwriter in
Schedule 2 hereto. One or more certificates in definitive form for the Firm
Securities that the several Underwriters have agreed to purchase hereunder, and
in such denomination or denominations and registered in such name or names as
the Representatives request upon notice to the Company at least 48 hours prior
to the Firm Closing Date, shall be delivered by or on behalf of the Company to
the Representatives for the respective accounts of the Underwriters, against
payment by or on behalf of the Underwriters of the purchase price therefor to
the Company in such funds as are specified in Schedule 1 hereto. Such delivery
of and payment for the Firm Securities shall be made at the date, time and place
identified in Schedule 1 hereto, or at such other date, time or place as the
Representatives and the Company may agree upon or as the Representatives may
determine pursuant to Section 8 hereof, such date and time of delivery against
payment being herein referred to as the "Firm Closing Date". The Company will
make such certificate or certificates for the Firm Securities available for
checking and packaging by the Representatives at the offices in New York, New
York of the Company's transfer agent or registrar or warrant agent or of Wheat
First Securities, Inc. at least 24 hours prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in
connection with the distribution and sale of the Firm Securities as contemplated
by the Prospectus and any Integrated Prospectus, the Company hereby grants to
the several Underwriters an option to purchase, severally and not jointly, the
Option Securities. The purchase price to be paid for any Option Securities shall
be the same price per share as the price per share for the Firm Securities set
forth in Schedule 1 to this Agreement, plus, if the purchase and sale of any
Option Securities takes place after the Firm Closing Date and after the Firm
Securities are trading "ex-dividend", an amount equal to the dividends payable
on such Option Securities. The option granted hereby may be exercised as to all
or any part of the Option Securities from time to time within thirty days after
the date of the Prospectus or any Integrated Prospectus (or, if such 30th day
shall be a Saturday or Sunday or a holiday, on the next business day thereafter
when the New York Stock Exchange is open for trading). The Underwriters shall
15
<PAGE>
not be under any obligation to purchase any of the Option Securities prior to
the exercise of such option. The Representatives may from time to time exercise
the option granted hereby by giving notice in writing or by telephone (confirmed
in writing) to the Company setting forth the aggregate number of Option
Securities as to which the several Underwriters are then exercising the option
and the date and time for delivery of and payment for such Option Securities.
Any such date of delivery shall be determined by the Representatives but shall
not be earlier than two business days or later than five business days after
such exercise of the option and, in any event, shall not be earlier than the
Firm Closing Date. The time and date set forth in such notice, or such other
time on such other date as the Representatives and the Company may agree upon or
as the Representatives may determine pursuant to Section 9 hereof, is herein
called the "Option Closing Date" with respect to such Option Securities. Upon
exercise of the option as provided herein, the Company shall become obligated to
sell to each of the several Underwriters, and, subject to the terms and
conditions herein set forth, each of the Underwriters (severally and not
jointly) shall become obligated to purchase from the Company the same percentage
of the total number of the Option Securities as to which the several
Underwriters are then exercising the option as such Underwriter is obligated to
purchase of the aggregate number of Firm Securities, as adjusted by the
Representatives in such manner as they deem advisable to avoid fractional
shares. If the option is exercised as to all or any portion of the Option
Securities, one or more certificates in definitive form for such Option
Securities, and payment therefor, shall be delivered on the related Option
Closing Date in the manner, and upon the terms and conditions, set forth in
paragraph (a) of this Section 3 and Schedule 1 to this Agreement, except that
reference therein to the Firm Securities and the Firm Closing Date shall be
deemed, for purposes of this paragraph (b), to refer to such Option Securities
and Option Closing Date, respectively.
(c) It is understood that any of you, individually and not as
one of the Representatives, may (but shall not be obligated to) make payment on
behalf of any Underwriter or Underwriters for any of the Securities to be
purchased by such Underwriter or Underwriters. No such payment shall relieve
such Underwriter or Underwriters from any of its or their obligations hereunder.
4. Covenants of the Company. The Company covenants and agrees with
each of the Underwriters that:
(a) The Company will file the Prospectus or any Term Sheet
that constitutes a part thereof, any Integrated Prospectus or the Prospectus
Supplement, as the case may be, and any amendment or supplement thereto with the
Commission in the manner and within the time period required by Rules 434 and
424(b) under the Act. During any time when a prospectus relating to the
Securities is required to be delivered under the Act, the
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<PAGE>
Company (i) will comply with all requirements imposed upon it by the Act and the
Exchange Act and the respective rules and regulations of the Commission
thereunder to the extent necessary to permit the continuance of sales of or
dealings in the Securities in accordance with the provisions hereof and of the
Prospectus and any Integrated Prospectus, as then amended or supplemented, and
(ii) will not file with the Commission the Prospectus, Term Sheet, any
Integrated Prospectus or any amendment or supplement thereto or any amendment to
the Registration Statement of which the Representatives shall not previously
have been advised and furnished with a copy for a reasonable period of time
prior to the proposed filing and as to which filing the Representatives shall
not have given their consent. The Company will prepare and file with the
Commission, in accordance with the rules and regulations of the Commission,
promptly upon request by the Representatives or counsel for the Underwriters,
any amendment to the Registration Statement or amendment or supplement to the
Prospectus and any Integrated Prospectus that may be necessary or advisable in
connection with the distribution of the Securities by the several Underwriters,
and will use its best efforts to cause any such amendment to the Registration
Statement to be declared effective by the Commission as promptly as possible.
The Company will advise the Representatives, promptly after receiving notice
thereof, of the time when any amendment to the Registration Statement has been
filed or declared effective or the Prospectus, any Integrated Prospectus or any
amendment or supplement thereto has been filed and will provide evidence
satisfactory to the Representatives of each such filing or effectiveness.
(b) The Company will advise the Representatives, promptly
after receiving notice or obtaining knowledge thereof, of (i) the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or any order
directed at any document incorporated by reference in the Registration
Statement, the Prospectus or any Integrated Prospectus or any amendment or
supplement thereto or any order preventing or suspending the use of any
Preliminary Prospectus, the Prospectus or any Integrated Prospectus or any
amendment or supplement thereto, (ii) the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, (iii) the institution,
threatening or contemplation of any proceeding for any such purpose or (iv) any
request made by the Commission for amending the Registration Statement, for
amending or supplementing any Preliminary Prospectus, the Prospectus or any
Integrated Prospectus or for additional information. The Company will use its
best efforts to prevent the issuance of any such stop order and, if any such
stop order is issued, to obtain the withdrawal thereof as promptly as possible.
(c) If required by applicable law, the Company will arrange
for the qualification of the Securities and any Underlying Securities for
offering and sale under the securities or blue sky laws of such jurisdictions as
the Representatives may designate and will
17
<PAGE>
continue such qualifications in effect for as long as may be necessary to
complete the distribution of the Securities and any Underlying Securities;
provided, however, that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction.
(d) If at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs as a
result of which the Prospectus or any Integrated Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or if for
any other reason it is necessary at any time to amend or supplement the
Prospectus or any Integrated Prospectus to comply with the Act or Exchange Act
or the respective rules or regulations of the Commission thereunder, the Company
will promptly notify the Representatives thereof and, subject to Section 4(a) of
this Agreement, will prepare and file with the Commission, at the Company's
expense, an amendment to the Registration Statement or an amendment or
supplement to the Prospectus and any Integrated Prospectus that corrects such
statement or omission or effects such compliance.
(e) The Company will, without charge, provide (i) to the
Representatives and to counsel for the Underwriters, a conformed copy of the
registration statement originally filed with respect to the Securities and any
amendment thereto (in each case including exhibits thereto), (ii) to each other
Underwriter, a conformed copy of such registration statement and any amendment
thereto relating to the Securities (in each case without exhibits thereto) and
(iii) so long as a prospectus relating to the Securities is required to be
delivered under the Act, as many copies of each Preliminary Prospectus, the
Prospectus or any Integrated Prospectus or any amendment or supplement thereto
as the Representatives may reasonably request; without limiting the application
of clause (iii) of this sentence, the Company, not later than (A) 6:00 p.m., New
York City time, on the date of determination of the public offering price, if
such determination occurred at or prior to 10:00 AM, New York City time, on such
date or (B) 12:00 Noon, New York City time, on the business day following the
date of determination of the public offering price, if such determination
occurred after 10:00 AM, New York City time, on such date, will deliver to the
Representatives, without charge, as many copies of the Prospectus or any
Integrated Prospectus and any amendment or supplement thereto as the
Representatives may reasonably request for purposes of confirming orders that
are expected to settle on the Firm Closing Date.
(f) The Company, as soon as practicable, will make generally
available to its securityholders and to the Representatives a consolidated
earning statement of the Company and its subsidiaries that satisfies the
provisions of Section 11(a) of the Act and
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<PAGE>
Rule 158 thereunder.
(g) The Company will apply the net proceeds from the sale of
the Securities as set forth under "Use of Proceeds" in the Prospectus and any
Integrated Prospectus.
(h) Reserved.
(i) If required as set forth in Schedule 1 hereto, the Company
will obtain the agreements described in Section 6(g) hereof prior to the Firm
Closing Date.
(j) The Company will not, directly or indirectly, (i) take any
action designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of the Securities or (B) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company.
(k) If at any time during the 25-day period after the
Registration Statement becomes effective or the period prior to the Option
Closing Date, any rumor, publication or event relating to or affecting the
Company shall occur as a result of which in your opinion the market price of the
Common Stock has been or is likely to be materially affected (regardless of
whether such rumor, publication or event necessitates a supplement to or
amendment of the Prospectus or any Integrated Prospectus), the Company will,
after written notice from you advising the Company to the effect set forth
above, forthwith prepare, consult with you concerning the substance of, and
disseminate a press release or other public statement, reasonably satisfactory
to you, responding to or commenting on such rumor, publication or event.
(l) If required as set forth in Schedule 1 hereto, the Company
will cause the Securities and any Underlying Securities to be duly authorized
for listing by the New York Stock Exchange.
(m) The Company will continue to use its best efforts to meet
the requirements to qualify as a REIT under the Code.
5. Expenses. The Company will pay all costs and expenses incident to
the performance of its obligations under this Agreement, whether or not the
transactions
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<PAGE>
contemplated herein are consummated or this Agreement is terminated pursuant to
Section 10 hereof, including all costs and expenses incident to (i) the printing
or other production of documents with respect to the transactions, including any
costs of printing the registration statement originally filed with respect to
the Securities and any amendment thereto, any Preliminary Prospectus, the
Prospectus and any Integrated Prospectus and any amendment or supplement
thereto, this Agreement, the Securities Documents and any blue sky memoranda,
(ii) all arrangements relating to the delivery to the Underwriters of copies of
the foregoing documents, (iii) the fees and disbursements of counsel,
accountants and any other experts or advisors retained by the Company, (iv)
preparation, issuance and delivery to the Underwriters of any certificates
evidencing the Securities, including the fees and expenses of the transfer
agent, exchange agent or registrar, (v) the qualification, if any, of the
Securities and any Underlying Securities under state securities and blue sky
laws and real estate syndication laws, including filing fees and fees and
disbursements of counsel for the Underwriters relating thereto and relating to
the preparation of a blue sky memoranda, (vi) the filing fees of the Commission
relating to the Securities, (vii) any listing of the Securities and Underlying
Securities on the New York Stock Exchange, (viii) any meetings with prospective
investors in the Securities arranged by the Company (other than as shall have
been specifically approved by the Representatives to be paid for by the
Underwriters) and (ix) advertising relating to the offering of the Securities
requested by the Company (other than as shall have been specifically approved by
the Representatives to be paid for by the Underwriters). If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 of this Agreement is not
satisfied, because this Agreement is terminated pursuant to Section 10 of this
Agreement or because of any failure, refusal or inability on the part of the
Company to perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder other than by reason of a default by and of the
Underwriters, the Company will reimburse the Underwriters severally upon demand
for all out-of-pocket expenses (including counsel fees and disbursements) that
shall have been incurred by them in connection with the proposed purchase and
sale of the Securities. The Company shall not in any event be liable to any of
the Underwriters for the loss of anticipated profits from the transactions
covered by this Agreement.
6. Conditions of the Underwriters' Obligations. The obligations of
the Underwriters to purchase and pay for the Firm Securities shall be subject,
in the Representatives' sole discretion, to the accuracy of the representations
and warranties of the Company contained herein as of the date of this Agreement
as specified in Schedule 1 hereto and as of the Firm Closing Date, as if made on
and as of the Firm Closing Date, to the accuracy of the statements of the
Company's officers made pursuant to the provisions hereof, to the performance by
the Company of its covenants and agreements hereunder and to the following
additional conditions:
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<PAGE>
(a) The Prospectus, any Integrated Prospectus or the
Prospectus Supplement, as the case may be, and any amendment or supplement
thereto shall have been filed with the Commission in the manner and within the
time period required by Rules 434 and 424(b) under the Act; no stop order
suspending the effectiveness of the Registration Statement or any post-effective
amendment thereto and no order directed at any document incorporated by
reference in the Registration Statement, the Prospectus or any Integrated
Prospectus or any amendment or supplement thereto shall have been issued, and no
proceedings for that purpose shall have been instituted or threatened or, to the
knowledge of the Company or the Representatives, shall be contemplated by the
Commission; and the Company shall have complied with any request of the
Commission for additional information (to be included in the Registration
Statement, the Prospectus or any Integrated Prospectus or otherwise).
(b) The Representatives shall have received an opinion, dated
the Firm Closing Date, from Pryor, Cashman, Sherman & Flynn, counsel for the
Company, to the effect that:
(i) the Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Maryland and is duly qualified to transact business and is in good
standing under the laws of all other jurisdictions where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified does not amount
to a material liability or disability to the Company and the Subsidiaries,
taken as a whole. Each of the Subsidiaries has been duly organized and is
validly existing as a general or limited partnership or corporation in
good standing under the laws of the jurisdiction of its organization, and
is duly qualified to transact business and is in good standing under the
laws of all other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such qualification,
except where the failure to be so qualified does not amount to a material
liability or disability to the Company and the Subsidiaries, taken as a
whole;
(ii) the Company and each of the Subsidiaries have full
power, corporate or other, to own or lease their respective properties and
conduct their respective businesses as described in the Registration
Statement, the Prospectus and any Integrated Prospectus and each of the
Company and the Subsidiaries have full power, corporate or other, to enter
into this Agreement and the Securities Documents and to carry out all the
terms and provisions hereof and thereof to be carried out by it;
(iii) the issued shares of capital stock of each of the
Subsidiaries
21
<PAGE>
that is a corporation are duly authorized, validly issued, fully paid and
nonassessable, and all of the partnership interests in each Subsidiary
that is a partnership are validly issued and fully paid. Except as
described in the Registration Statement, the Prospectus and any Integrated
Prospectus, all of such shares and interests owned by the Company or
another Subsidiary are owned beneficially by the Company or such
Subsidiary free and clear of any security interest, mortgage, pledge,
lien, encumbrance, equity or claim;
(iv) the Company has an authorized, issued and
outstanding capitalization as set forth in the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus).
All of the capital stock of the Company has been duly authorized and the
capital stock of the Company outstanding is validly issued, fully paid and
nonassessable;
(v) the Securities have been duly authorized, and when
executed and delivered against payment therefor in accordance with the
Underwriting Agreement, will be validly issued, fully paid and
non-assessable, and the execution and delivery of the Securities (other
than any Contract Securities) have been duly authorized by all necessary
corporate action, and the Securities have been duly executed and delivered
by the Company, and assuming due authorization, execution and delivery of
the Securities by parties other than the Company, are, and any Contract
Securities, when executed and delivered in the manner provided in the
Securities Documents, will be, the legal, valid, binding and enforceable
obligations of the Company, subject to the effect of bankruptcy,
insolvency, moratorium, fraudulent conveyance, reorganization and similar
laws relating to creditors' rights generally and to the application of
equitable principles in any proceeding, whether at law or in equity;
(vi) the Underlying Securities have been duly authorized
and reserved, and, when such securities are issued and delivered as
contemplated by the terms of the applicable Securities Document such
securities will be validly issued, fully paid and non-assessable;
(vii) the execution and delivery of the Securities
Documents has been duly authorized by all necessary corporate action of
the Company, and have been duly executed and delivered by the Company, and
assuming due authorization, execution and delivery of the Securities
Documents by parties other than the Company as specified in the applicable
Securities Documents, such agreements are valid and
22
<PAGE>
binding instruments of the Company enforceable against the Company in
accordance with their respective terms, subject to the effect of
bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization
and similar laws relating to creditors' rights generally and to the
application of equitable principles in any proceeding, whether at law or
in equity;
(viii) no holders of outstanding shares of capital stock
of the Company are entitled as such to any preemptive or other rights to
subscribe for any of the Securities or Underlying Securities, and no
holder of securities of the Company or any Subsidiary has any right which
has not been waived to require the Company to register the offer or sale
of any securities owned by such holder under the Act in the public
offering contemplated by this Agreement;
(ix) the statements set forth under the heading
"Description of Common Stock", "Description of Preferred Stock" and
"Description of Warrants" in the Prospectus and any Integrated Prospectus
insofar as such statements purport to summarize certain provisions of the
Securities of the Company, provide a fair summary of such provisions; and
the statements set forth under the headings "Restrictions on Ownership of
Offered Securities" and "Certain United States Federal Income Tax
Considerations to the Company of its REIT Election" in the Prospectus and
"Risk Factors", "Certain United States Federal Income Tax Considerations
to Holders of Common Stock" and "Underwriting", in the Prospectus
Supplement, insofar as such statements constitute a summary of the legal
matters, documents or proceedings referred to therein, provide a fair
summary of such legal matters, documents and proceedings;
(x) the execution and delivery of this Agreement has
been duly authorized by all necessary corporate action of the Company and
this Agreement has been duly executed and delivered by the Company, and
are the valid and binding agreements of the Company, enforceable against
the Company in accordance with their respective terms, subject to the
effect of bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws relating to creditors' rights generally
and to the application of equitable principles in any proceeding, whether
at law or in equity and except as rights to indemnity and contribution
hereunder may be limited by federal or state securities laws or principles
of public policy;
(xi) (A) no legal or governmental proceedings are
pending to which the Company, any of the Subsidiaries, or any of their
respective directors or officers in their capacity as such, is a party or
to which the Properties or any other
23
<PAGE>
property of the Company or any of the Subsidiaries is subject that are
required to be described in the Registration Statement or the Prospectus
and are not described therein, and, to the best knowledge of such counsel,
no such proceedings have been threatened against the Company or any of the
Subsidiaries or with respect to the Properties or any of their respective
other properties and (B) no contract or other document is required to be
described in the Registration Statement, the Prospectus or any Integrated
Prospectus or to be filed as an exhibit to the Registration Statement that
is not described therein or filed as required;
(xii) the issuance, offering and sale of the Securities
to the Underwriters by the Company pursuant to this Agreement, the
compliance by the Company with the other provisions of this Agreement, any
Securities Documents and the consummation of the other transactions herein
contemplated do not (A) require the consent, approval, authorization,
registration or qualification of or with any governmental authority,
except such as have been obtained and such as may be required under state
securities or blue sky laws (as to which such counsel need not opine) or
(B) conflict with or result in a breach or violation of any of the terms
and provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any of the
Properties or any other properties or assets of the Company or any of the
Subsidiaries pursuant to any indenture, mortgage, deed of trust, lease or
other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries
or the Properties or any other of their respective properties are bound,
or the Articles of Incorporation, By-laws or other organizational
documents, as the case may be, of the Company or any of the Subsidiaries,
or any statute or any judgment, decree, order, rule or regulation of any
court or other governmental authority or (to the best knowledge of such
counsel) any arbitrator applicable to the Company or any of the
Subsidiaries or any of the Properties;
(xiii) none of the Subsidiaries is currently
contractually prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on such
subsidiary's capital stock or other equity interests, from repaying to the
Company any loans or advances to such Subsidiary from the Company or from
transferring any of such Subsidiary's property or assets to the Company or
any of the other Subsidiaries, except as described in the Prospectus and
any Integrated Prospectus;
(xiv) to the best knowledge of such counsel, the Company
and the Subsidiaries possess all certificates, authorizations, licenses
and permits issued by
24
<PAGE>
the appropriate federal, state, municipal or foreign regulatory
authorities necessary to conduct their respective businesses except for
such certificates, authorizations, licenses and permits the failure of
which to possess would not be expected to result in a material adverse
change in the condition (financial or otherwise), business, prospects, net
worth or results of operations of the Company and the Subsidiaries, taken
as a whole, and neither the Company nor any of the Subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization, license or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a material adverse change in
the condition (financial or otherwise), business, prospects, net worth or
results of operations of the Company and the Subsidiaries, taken as a
whole, except as described in the Prospectus and any Integrated
Prospectus;
(xv) the Company is not subject to registration as an
investment company under the Investment Company Act of 1940, as amended,
and the transactions contemplated by this Agreement will not cause the
Company to become an investment company subject to registration under such
Act;
(xvi) neither the Company nor any of the Subsidiaries is
in violation of any term or provision of its articles of incorporation,
bylaws, partnership agreements or other organizational documents, as the
case may be; no default exists, and no event has occurred which, with
notice or lapse of time or both, would constitute a default, and the
issuance, offering and sale of the Securities to the Underwriters by the
Company pursuant to this Agreement and the Securities Documents the
compliance by the Company with the other provisions of this Agreement, the
Securities and the Securities Documents and the consummation of the other
transactions herein and therein contemplated will not result in any
default, in the due performance and observance of any term, covenant or
condition of any indenture, mortgage or deed of trust, or any material
lease or other agreement or instrument known to such counsel after due
inquiry to which the Company or any of the Subsidiaries is a party or by
which the Company, any of the Subsidiaries, any of the Properties or any
of their respective other properties is bound or may be affected except
such as would not result in any material adverse effect in the condition
(financial or otherwise), business prospects, net worth or results of
operations of the Company and its subsidiaries, taken as a whole;
(xvii) as set forth in Schedule 1 hereto, the Securities
and any Underlying Securities have been approved for listing on the New
York Stock Exchange, subject to official notice of issuance;
25
<PAGE>
(xviii) the Registration Statement is effective under
the Act; the Prospectus or any Term Sheet that constitutes a part thereof
and any Integrated Prospectus or the Prospectus Supplement, as the case
may be, has been filed with the Commission in the manner and within the
time period required by Rules 434 and 424(b); and no stop order suspending
the effectiveness of the Registration Statement or any post-effective
amendment thereto and no order directed at any document incorporated by
reference in the Registration Statement, the Prospectus, any Integrated
Prospectus or any amendment or supplement thereto has been issued, and no
proceedings for that purpose have been instituted or, to the best
knowledge of such counsel, threatened by the Commission; and
(xix) the Registration Statement originally filed with
respect to the Securities and each amendment thereto, the Prospectus and
any Integrated Prospectus (in each case, including the documents
incorporated by reference therein but not including the financial
statements and other financial and statistical data contained therein, as
to which such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act and the
Exchange Act and the respective rules and regulations of the Commission
thereunder.
Such counsel shall also state that they have no reason to believe
that the Registration Statement, as of its effective date, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading or
that the Prospectus or any Integrated Prospectus, as of the date of the
Prospectus Supplement or any required Integrated Prospectus and the date of such
opinion, included or includes any untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
In rendering any such opinion, such counsel may rely, as to matters
of fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials and, as to matters involving the
application of laws of any jurisdiction other than the States of New York, New
Jersey and Delaware or the United States, to the extent satisfactory in form and
scope to counsel for the Underwriters, upon the opinion of local counsel. The
foregoing opinion shall also state that the Underwriters are justified in
relying upon such opinion of local counsel, and copies of such opinion shall be
delivered to the Representatives and counsel for the Underwriters.
References to the Registration Statement, the Prospectus and any
Integrated
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<PAGE>
Prospectus in this paragraph (b) shall include any amendment or supplement
thereto at the date of such opinion.
(c) The Representatives shall have received an opinion, dated
the Firm Closing Date, of Hunton & Williams, counsel for the Underwriters, with
respect to the issuance and sale of the Securities, the Registration Statement,
the Prospectus, and any Integrated Prospectus and such other related matters as
the Representatives may reasonably require, and the Company shall have furnished
to such counsel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
(d) The Representatives shall have received from Price
Waterhouse LLP and each other accounting firm that has certified financial
statements, and delivered its report with respect thereto, included or
incorporated by reference in the Registration Statement, the Prospectus and any
Integrated Prospectus, a letter or letters dated, respectively, the date of this
Agreement as specified in Schedule 1 hereto and the Firm Closing Date, in form
and substance satisfactory to the Representatives, to the effect that:
(i) they are independent accountants with respect to the
Company and its subsidiaries within the meaning of the Act, the Exchange
Act and the applicable published rules and regulations thereunder;
(ii) in their opinion, the financial statements audited
by them and incorporated by reference in the Registration Statement, the
Prospectus and any Integrated Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act, the
Exchange Act and the related published rules and regulations thereunder;
(iii) a reading of the minute books of the shareholders,
the board of directors and any committees thereof of the Company and each
of its consolidated subsidiaries, and inquiries of certain officials of
the Company and its consolidated subsidiaries who have responsibility for
financial and accounting matters, nothing came to their attention that
caused them to believe that:
(A) (i) any unaudited consolidated condensed financial
statements of the Company and its consolidated subsidiaries
included in the Registration Statement, the Prospectus and any
Integrated Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Act, the Exchange Act and the related published rules and
regulations thereunder, or (ii) any material
27
<PAGE>
modification should be made to the unaudited consolidated
condensed financial statements for them to be in conformity
with generally accepted accounting principles;
(B) at a specific date not more than five business days
prior to the date of such letter, there were any changes in
the common stock or increase in mortgages and loans payable of
the Company and its consolidated subsidiaries, in each case
compared with amounts shown on the most recent consolidated
balance sheet included in the Registration Statement, the
Prospectus and any Integrated Prospectus, except for such
changes set forth in such letter;
(iv) they have carried out certain specified procedures,
not constituting an audit, with respect to certain amounts, percentages
and financial information that are derived from the general accounting
records of the Company and its consolidated subsidiaries and are included
in the Registration Statement, the Prospectus and any Integrated
Prospectus and in Exhibit 12 to the Registration Statement, including the
information included or incorporated in the Company's most recent Annual
Report on Form 10-K under the captions "Business" (Item 1), "Selected
Financial Data" (Item 6) and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" (Item 7) and the
information included or incorporated in the Company's Quarterly Reports on
Form 10-Q under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations," and have compared such
amounts, percentages and financial information with such records and with
information derived from such records and have found them to be in
agreement, excluding any questions of legal interpretation; and
(v) on the basis of a reading of any unaudited pro forma
consolidated condensed financial statements included in the Registration
Statement, the Prospectus and any Integrated Prospectus, carrying out
certain specified procedures that would not necessarily reveal matters of
significance with respect to the comments set forth in this paragraph (v),
inquiries of certain officials of the Company, its consolidated
subsidiaries and any acquired company who have responsibility for
financial and accounting matters and proving the arithmetic accuracy of
the application of the pro forma adjustments to the historical amounts in
the unaudited pro forma consolidated condensed financial statements,
nothing came to their attention that caused them to believe that the
unaudited pro forma consolidated condensed financial statements do not
comply in form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X or that the pro forma
adjustments have
28
<PAGE>
not been properly applied to the historical amounts in the compilation of
such statements.
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied
by a written explanation of the Company as to the significance thereof,
unless the Representatives deem such explanation unnecessary, and (B) such
changes, decreases or increases do not, in the sole judgment of the
Representatives, make it impractical or inadvisable to proceed with the
purchase and delivery of the Securities as contemplated by the
Registration Statement.
References to the Registration Statement, the Prospectus and any
Integrated Prospectus in this paragraph (d) with respect to either letter
referred to above shall include any amendment or supplement thereto at the
date of such letter.
(e) The Representatives shall have received a certificate,
dated the Firm Closing Date, of the chief executive officer and the chief
financial or accounting officer of the Company to the effect that:
(i) the representations and warranties of the Company in
this Agreement are true and correct as if made on and as of the Firm
Closing Date; the Registration Statement, as amended as of the Firm
Closing Date, does not include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein
not misleading, and the Prospectus or any Integrated Prospectus, as
amended or supplemented as of the Firm Closing Date, does not include any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and the Company
has performed all covenants and agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to the Firm Closing
Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto and no
order directed at any document incorporated by reference in the
Registration Statement, the Prospectus or any Integrated Prospectus or any
amendment or supplement thereto has been issued, and no proceedings for
that purpose have been instituted or threatened or, to the best of the
Company's knowledge, are contemplated by the Commission; and
29
<PAGE>
(iii) subsequent to the respective dates as of which
information is given in the Registration Statement, the Prospectus and any
Integrated Prospectus, neither the Company nor any of its subsidiaries has
sustained any material loss or interference with their respective
businesses or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute
or any legal or governmental proceeding, and there has not been any
material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise),
management, business prospects, net worth or results of operations of the
Company or any of its subsidiaries, except in each case as described in or
contemplated by the Prospectus or any Integrated Prospectus (exclusive of
any amendment or supplement thereto).
(f) On or before the Firm Closing Date, the Representatives
and counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from the
Company.
(g) Reserved.
(h) If applicable, prior to the commencement of the offering
of the Securities, the Securities and any Underlying Securities shall have been
approved for listing on the New York Stock Exchange, subject to official notice
of issuance.
All opinions, certificates, letters and documents delivered pursuant
to this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase
and pay for any Option Securities shall be subject, in their discretion, to each
of the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed to
refer to such Option Securities and the related Option Closing Date,
respectively.
7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter
30
<PAGE>
or such controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement
made by the Company in Section 2 of this Agreement,
(ii) any untrue statement or alleged untrue statement of
any material fact contained in (A) the Registration Statement or any
amendment thereto or any Preliminary Prospectus, the Prospectus or any
Integrated Prospectus or any amendment or supplement thereto or (B) any
application or other document, or any amendment or supplement thereto,
executed by the Company or based upon written information furnished by or
on behalf of the Company filed in any jurisdiction in order to qualify the
Securities under the securities or blue sky laws thereof or filed with the
Commission or any securities association or securities exchange (each an
"Application"),
(iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any Integrated Prospectus or any amendment
or supplement thereto, or any Application a material fact required to be
stated therein or necessary to make the statements therein not misleading
or
(iv) any untrue statement or alleged untrue statement of
any material fact contained in any audio or visual materials used in
connection with the marketing of the Securities, including, without
limitation, slides, videos, films and tape recordings,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement or
any amendment thereto, any Preliminary Prospectus, the Prospectus or any
Integrated Prospectus or any amendment or supplement thereto, or any Application
in reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives specifically for use
therein. This indemnity agreement will be in addition to any liability
31
<PAGE>
which the Company may otherwise have. The Company will not, without the prior
written consent of the Underwriter or Underwriters purchasing, in the aggregate,
more than 50% of the Firm Securities, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not any such Underwriter or any person who controls any such Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act is
a party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of all of the
Underwriters and such controlling persons from all liability arising out of such
claim, action, suit or proceeding.
(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement, as amended at the date of this
Agreement as specified in Schedule 1 hereto, and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act against any losses, claims, damages or liabilities to which
the Company or any such director, officer or controlling person may become
subject under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, as amended at the date of this Agreement as
specified in Schedule 1 hereto, any Preliminary Prospectus, the Prospectus or
any Integrated Prospectus or any amendment or supplement thereto, or any
Application or (ii) the omission or the alleged omission to state therein a
material fact required to be stated in the Registration Statement, as amended at
the date of this Agreement as specified in Schedule 1 hereto, any Preliminary
Prospectus, the Prospectus or any Integrated Prospectus or any amendment or
supplement thereto, or any Application or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
specifically for use therein; and, subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any legal or
other expenses reasonably incurred by the Company or any such director, officer
or controlling person in connection with investigating or defending any such
loss, claim, damage, liability or any action in respect thereof. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party of the commencement thereof;
but the omission so to notify the
32
<PAGE>
indemnifying party will not relieve it from any liability which it may have to
any indemnified party otherwise than under this Section 7. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnifying party shall not have the right to
direct the defense of such action on behalf of such indemnified party or parties
and such indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or parties.
After notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and approval by such indemnified party
of counsel appointed to defend such action, the indemnifying party will not be
liable to such indemnified party under this Section 7 for any legal or other
expenses, other than reasonable costs of investigation, subsequently incurred by
such indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by the Representatives in the case of paragraph (a) of this Section
7, representing the indemnified parties under such paragraph (a) who are parties
to such action or actions) or (ii) the indemnifying party does not promptly
retain counsel satisfactory to the indemnified party or (iii) the indemnifying
party has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party. After such notice from the indemnifying party
to such indemnified party, the indemnifying party will not be liable for the
costs and expenses of any settlement of such action effected by such indemnified
party without the consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 7 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect (i) the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party on the other from the offering of
33
<PAGE>
the Securities or (ii) if the allocation provided by the foregoing clause (i) is
not permitted by applicable law, not only such relative benefits but also the
relative fault of the indemnifying party or parties on the one hand and the
indemnified party on the other in connection with the statements or omissions or
alleged statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the
Underwriters, the parties' relative intents, knowledge, access to information
and opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances. The Company and the
Underwriters agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation that does not take into account the equitable considerations
referred to above in this paragraph (d). Notwithstanding any other provision of
this paragraph (d), no Underwriter shall be obligated to make contributions
hereunder that in the aggregate exceed the total public offering price of the
Securities purchased by such Underwriter under this Agreement, less the
aggregate amount of any damages that such Underwriter has otherwise been
required to pay in respect of the same or any substantially similar claim, and
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute hereunder are several in proportion to their respective underwriting
obligations and not joint. For purposes of this paragraph (d), each person, if
any, who controls an Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act shall have the same rights to contribution as
such Underwriter, and each director of the Company, each officer of the Company
who signed the Registration Statement as amended at the date of this Agreement
as specified in Schedule 1 hereto and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, shall have the same rights to contribution as the Company.
8. Default of Underwriters. If one or more Underwriters default in
their obligations to purchase Firm Securities or Option Securities hereunder and
the aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other
34
<PAGE>
Underwriters may make arrangements satisfactory to the Representatives for the
purchase of such Securities by other persons (who may include one or more of the
non-defaulting Underwriters, including the Representatives), but if no such
arrangements are made by the Firm Closing Date or the related Option Closing
Date, as the case may be, the other Underwriters shall be obligated severally in
proportion to their respective commitments hereunder to purchase the Firm
Securities or Option Securities that such defaulting Underwriter or Underwriters
agreed but failed to purchase. If one or more Underwriters so default with
respect to an aggregate number of Securities that is more than ten percent of
the aggregate number of Firm Securities or Option Securities, as the case may
be, to be purchased by all of the Underwriters at such time hereunder, and if
arrangements satisfactory to the Representatives are not made within 36 hours
after such default for the purchase by other persons (who may include one or
more of the non-defaulting Underwriters, including the Representatives) of the
Securities with respect to which such default occurs, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company other than as provided in Section 9 hereof. In the event of any default
by one or more Underwriters as described in this Section 8, the Representatives
shall have the right to postpone the Firm Closing Date or the Option Closing
Date, as the case may be, established as provided in Section 3 of this Agreement
for not more than seven business days in order that any necessary changes may be
made in the arrangements or documents for the purchase and delivery of the Firm
Securities or Option Securities, as the case may be. As used in this Agreement,
the term "Underwriter" includes any person substituted for an Underwriter under
this Section 8. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
9. Survival. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, its officers and the
several Underwriters set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement shall remain in full force and
effect, regardless of (i) any investigation made by or on behalf of the Company,
any of its officers or directors, any Underwriter or any controlling person
referred to in Section 7 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 5 and 7 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
10. Termination. (a) This Agreement may be terminated with respect
to the Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company given prior to the Firm Closing Date or
the related Option Closing Date, respectively, in the event that the Company
shall have failed, refused or been unable to perform all obligations and satisfy
all conditions on its part to be performed or satisfied
35
<PAGE>
hereunder at or prior thereto or, if at or prior to the Firm Closing Date or
such Option Closing Date, respectively,
(i) the Company or any of the Subsidiaries shall have,
in the sole judgment of the Representatives, sustained any material loss
or interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding or there shall have been any material adverse change, or any
development involving a prospective material adverse change (including
without limitation a change in management or control of the Company, which
includes the termination of the employment of Thomas A. Rizk), in the
condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and the Subsidiaries, except in each
case as described in or contemplated by the Prospectus (exclusive of any
amendment or supplement thereto);
(ii) trading in the Common Stock shall have been
suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been
suspended or minimum or maximum prices shall have been established on such
exchange;
(iii) there shall have been any downgrading in the
rating of any debt securities or preferred stock of the Company by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act), or any public announcement that
any such organization has under surveillance or review its rating of any
debt securities or preferred stock of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating);
(iv) a banking moratorium shall have been declared by
New York or United States authorities; or
(v) there shall have been (A) an outbreak or escalation
of hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or
material adverse change in general economic, political or financial
conditions having an effect on the U.S. financial markets that, in the
sole judgment of the Representatives, makes it impractical or inadvisable
to proceed with the public offering or the delivery of the Securities as
contemplated by the Registration Statement, as amended at the date of this
Agreement as specified in Schedule 1 hereto
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<PAGE>
(b) Termination of this Agreement pursuant to this Section 10
shall be without liability of any party to any other party except as provided in
Section 9 hereof.
11. Information Supplied by Underwriters. The statements set forth
in the last paragraph on the front cover page of the Prospectus Supplement and
under the heading "Underwriting" in the Prospectus Supplement (to the extent
such statements relate to the Underwriters) constitute the only information
furnished by any Underwriter through the Representatives to the Company for the
purposes of Sections 2(b) and 7(b) hereof. The Underwriters confirm that such
statements (to such extent) are correct.
12. Notices. All communications hereunder shall be in writing and,
if sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Wheat First Securities, Inc.,
Riverfront Plaza, West Tower, 901 East Byrd Street, 4th Floor, Richmond,
Virginia 23219, Attention: Syndicate; and if sent to the Company, shall be
delivered or sent by mail, telex or facsimile transmission and confirmed in
writing to the Company at 11 Commerce Drive, Cranford, New Jersey, 07016,
Attention: Thomas A. Rizk.
13. Successors. This Agreement shall inure to the benefit of and
shall be binding upon the several Underwriters, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company contained in Section 7 of this Agreement shall
also be for the benefit of any person or persons who control any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
and (ii) the indemnities of the Underwriters contained in Section 7 of this
Agreement shall also be for the benefit of the directors of the Company, the
officers of the Company who have signed the Registration Statement as amended at
the date of this Agreement as specified in Schedule 1 hereto and any person or
persons who control the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act. No purchaser of Securities from any Underwriter
shall be deemed a successor because of such purchase.
14. Applicable Law. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS
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OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO
CONFLICTS OF LAWS.
15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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<PAGE>
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company and each
of the several Underwriters.
Very truly yours,
MACK-CALI REALTY CORPORATION
By:
---------------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
By: WHEAT FIRST SECURITIES, INC.
By:
---------------------------------
Name:
Title:
<PAGE>
SCHEDULE 1
DESCRIPTION OF SECURITIES; TERMS OF OFFERING
1. Registration Statement:
File No. 333-19101
2. Date of Underwriting Agreement:
March 24, 1998
3. Underwriters:
Wheat First Securities, Inc.
4. Title of Securities:
Common Stock, par value $.01 per share
5. Aggregate Number of Firm Securities:
650,407 shares of Common Stock, par value $.01 per share
6. Aggregate Number of Option Securities:
None
7. Price to Trust:
Common Stock, par value $.01 per share: $38.4375 per share
8. Purchase Price by Underwriters:
Common Stock, par value $.01 per share: $36.5156 per share
9. Specified Funds for Payment of Purchase Price:
Wire Transfer of Same Day Funds
10. Terms of Securities:
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Preferred Stock: N/A
Warrants: N/A
Other Provisions: N/A
11. Lock-up Requirements:
None
12. Delivery of Securities:
Firm Securities:
Wheat First Securities, Inc., Riverfront Plaza, West Tower, 901 East Byrd
Street, 4th Floor, Richmond, Virginia 23219, on or about March 27, 1998
Option Securities:
N/A
13. Pre-Closing Location:
N/A
14. Closing Location:
Hunton & Williams, Riverfront Plaza, East Tower, 951 East Byrd Street,
Richmond, Virginia 23219, on March 27, 1998
15. Miscellaneous:
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SCHEDULE 2
UNDERWRITERS
Number of
Firm Shares to
Underwriter be Purchased
- ----------- --------------
Wheat First Securities, Inc. 650,407
Total 650,407
==============
42
EXHIBIT 23
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Registration
Statements on Forms S-3 (Nos. 333-19101, 33-96542, 333-09081, 333-09875,
333-25475, 333-44433 and 333-44441) and the Registration Statements on Form S-8
(Nos. 333-18275, 33-91822, 33-19831, 333-32661 and 333-44443) of Mack-Cali
Realty Corporation of our report dated February 26, 1998, appearing in this Form
10-K.
/s/ Price Waterhouse LLP
- --------------------------
Price Waterhouse LLP
New York, New York
March 27, 1998
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