UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended March 31, 1998
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ______________________ to _______________________
Commission file number 1-13274
Mack-Cali Realty Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 22-3305147
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
11 Commerce Drive, Cranford, New Jersey 07016-3501
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(Address of principal executive office)
(Zip Code)
(908) 272-8000
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(Registrant's telephone number, including area code)
Not Applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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 twelve (12) months (or such shorter period that the
Registrant was required to file such report) YES |X| NO |_| and (2) has been
subject to such filing requirements for the past ninety (90) days YES |X| NO |_|
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of April 30, 1998, there were 56,977,190 shares of $0.01 par value common
stock outstanding.
Page 1 of 28
<PAGE>
MACK-CALI REALTY CORPORATION
Form 10-Q
INDEX
Part I Financial Information Page #
------
Item 1. Financial Statements:
Consolidated Balance Sheets as of March 31, 1998
and December 31, 1997 ...................................4
Consolidated Statements of Operations for the three months
ended March 31, 1998 and 1997 ...........................5
Consolidated Statement of Stockholders' Equity for the
three months ended March 31, 1998 .......................6
Consolidated Statements of Cash Flows for the three months
ended March 31, 1998 and 1997 ...........................7
Notes to Consolidated Financial Statements .................8 - 21
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations ..................................22 - 25
Item 3. Quantitative and Qualitative
Disclosures about Market Risk...............................25
Part II Other Information and Signatures
Item 1. Legal Proceedings ..........................................25
Item 2. Changes in Securities and Use of Proceeds ..................25
Item 6. Exhibits....................................................26 - 27
Signatures .................................................28
Page 2 of 28
<PAGE>
MACK-CALI REALTY CORPORATION
Part I - Financial Information
Item I: Financial Statements
The accompanying unaudited consolidated balance sheets, statements
of operations, of stockholders' equity, and of cash flows and
related notes, have been prepared in accordance with generally
accepted accounting principles ("GAAP") for interim financial
information and in conjunction with the rules and regulations of the
Securities and Exchange Commission ("SEC"). Accordingly, they do not
include all of the disclosures required by GAAP for complete
financial statements. The financial statements reflect all
adjustments consisting only of normal, recurring adjustments, which
are, in the opinion of management, necessary for a fair presentation
for the interim periods.
The aforementioned financial statements should be read in
conjunction with the notes to the aforementioned financial
statements and Management's Discussion and Analysis of Financial
Condition and Results of Operations and the financial statements and
notes thereto included in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1997.
The results of operations for the three month period ended March 31,
1998 are not necessarily indicative of the results to be expected
for the entire fiscal year or any other period.
Page 3 of 28
<PAGE>
MACK-CALI REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts)
================================================================================
March 31, December 31,
ASSETS 1998 1997
- ------------------------------------------------------------------------------
Rental property
Land $ 461,368 $ 374,242
Buildings and improvements 2,567,225 2,206,462
Tenant improvements 50,708 44,596
Furniture, fixtures and equipment 4,650 4,316
- ------------------------------------------------------------------------------
3,083,951 2,629,616
Less - accumulated depreciation and amortization (118,567) (103,133)
- ------------------------------------------------------------------------------
Total rental property 2,965,384 2,526,483
Cash and cash equivalents 11,717 2,704
Investment in partially-owned entity 18,034 --
Unbilled rents receivable 30,641 27,438
Deferred charges and other assets, net 21,672 18,989
Restricted cash 6,791 6,844
Accounts receivable, net of allowance for
doubtful accounts of $493 and $327 3,826 3,736
Mortgage notes receivable 27,250 7,250
- ------------------------------------------------------------------------------
Total assets $3,085,315 $2,593,444
==============================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------------------------------------------------
Mortgages and loans payable $1,207,592 $ 972,650
Dividends and distributions payable 35,139 28,089
Accounts payable and accrued expenses 31,510 31,136
Rents received in advance and security deposits 29,651 21,395
Accrued interest payable 1,935 3,489
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Total liabilities 1,305,827 1,056,759
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Minority interest of unitholders in Operating
Partnership 404,830 379,245
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Commitments and contingencies
Stockholders' equity:
Preferred stock, 5,000,000 shares authorized,
none issued
Common stock, $0.01 par value,
190,000,000 shares authorized, 55,835,686
and 49,856,289 shares outstanding 558 499
Additional paid-in capital 1,463,460 1,244,883
Dividends in excess of net earnings (89,360) (87,942)
- ------------------------------------------------------------------------------
Total stockholders' equity 1,374,658 1,157,440
- ------------------------------------------------------------------------------
Total liabilities and stockholders' equity $3,085,315 $2,593,444
==============================================================================
The accompanying notes are an integral part of these consolidated financial
statements.
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MACK-CALI REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts)
================================================================================
Three Months Ended March 31,
REVENUES 1998 1997
- --------------------------------------------------------------------------------
Base rents $ 92,916 $42,791
Escalations and recoveries from tenants 10,357 6,612
Parking and other 2,006 1,544
Interest income 544 1,208
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Total revenues 105,823 52,155
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EXPENSES
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Real estate taxes 10,073 5,433
Utilities 8,301 3,725
Operating services 12,693 6,416
General and administrative 6,196 3,173
Depreciation and amortization 16,231 7,493
Interest expense 18,480 7,820
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Total expenses 71,974 34,060
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Income before minority interest 33,849 18,095
Minority interest 7,306 1,636
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Net income $ 26,543 $ 16,459
================================================================================
Basic earnings per share $ 0.52 $ 0.45
Diluted earnings per share $ 0.51 $ 0.44
- --------------------------------------------------------------------------------
Dividends declared per common share $ 0.50 $ 0.45
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Basic weighted average shares outstanding 51,363 36,461
Diluted weighted average shares outstanding 58,682 40,817
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The accompanying notes are an integral part of these consolidated financial
statements.
Page 5 of 28
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MACK-CALI REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (in thousands)
================================================================================
<TABLE>
<CAPTION>
Retained
Earnings
Additional (Dividends in Total
Common Stock Paid-In Excess of Stockholders'
Shares Par Value Capital Net Earnings) Equity
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1998 49,856 $499 $1,244,883 $(87,942) $1,157,440
Net income -- -- -- 26,543 26,543
Dividends -- -- -- (27,961) (27,961)
Net proceeds from common stock
offerings 5,856 58 215,726 -- 215,784
Conversion of Units to shares
of common stock 22 -- 848 -- 848
Proceeds from stock options
exercised 102 1 2,003 -- 2,004
- -------------------------------------------------------------------------------------------------
Balance at March 31, 1998 55,836 $558 $1,463,460 $(89,360) $1,374,658
=================================================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
Page 6 of 28
<PAGE>
MACK-CALI REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
================================================================================
<TABLE>
<CAPTION>
Three Months Ended March 31,
CASH FLOWS FROM OPERATING ACTIVITIES 1998 1997
- -----------------------------------------------------------------------------------
<S> <C> <C>
Net income $ 26,543 $ 16,459
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 16,231 7,493
Amortization of deferred financing costs 254 271
Minority interest 7,306 1,636
Changes in operating assets and liabilities:
Increase in unbilled rents receivable (3,203) (1,606)
Increase in deferred charges and other assets, net (3,790) (1,665)
Increase in accounts receivable, net (34) (1,508)
Increase in accounts payable and
accrued expenses 374 6,585
Increase in rents received in advance and
security deposits 8,256 4,827
Decrease in accrued interest payable (1,554) (954)
- -----------------------------------------------------------------------------------
Net cash provided by operating activities $ 50,383 $ 31,538
===================================================================================
CASH FLOWS FROM INVESTING ACTIVITIES
- -----------------------------------------------------------------------------------
Additions to rental property $(406,659) $(230,429)
Issuance of mortgage note receivable (20,000) (11,600)
Investment in partially-owned entity (18,034) --
Decrease (increase) in restricted cash 53 (170)
- -----------------------------------------------------------------------------------
Net cash used in investing activities $(444,640) $(242,199)
- -----------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
- -----------------------------------------------------------------------------------
Proceeds from mortgages and loans payable $ 419,851 $ 47,195
Repayments of mortgages and loans payable (205,514) (19,299)
Repurchase of common units (766) --
Net proceeds from common stock offerings 215,784 --
Proceeds from stock options exercised 2,004 2,297
Payment of dividends and distributions (28,089) (17,554)
- -----------------------------------------------------------------------------------
Net cash provided by financing activities $ 403,270 $ 12,639
===================================================================================
Net increase (decrease) in cash and cash equivalents $ 9,013 $(198,022)
Cash and cash equivalents, beginning of period 2,704 204,807
- -----------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 11,717 $ 6,785
===================================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
Page 7 of 28
<PAGE>
MACK-CALI REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
================================================================================
1. ORGANIZATION AND BASIS OF PRESENTATION
Organization
Mack-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
March 31, 1998, the Company owned and operated 227 properties and had a
significant equity interest in another property (the "Properties"). The
Properties aggregate approximately 25.2 million square feet, and are comprised
of 216 office and office/flex buildings totaling approximately 24.8 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
11 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"). See Investment in
Partially-owned Entity in Note 2 for the Company's treatment of unconsolidated
partnership interests. 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.
Page 8 of 28
<PAGE>
Investment in
Partially-owned
Entity The Company acquired a 50 percent interest in an office property
in March 1998. The Company accounts for its investment in a
partially-owned entity under the equity method of accounting as
the Company exercises significant influence. This investment is
recorded initially at cost, as Investment in Partially-Owned
Entity, and subsequently adjusted for net equity in income
(loss) and cash contributions and distributions.
Cash and Cash
Equivalents All highly liquid investments with a maturity of three months or
less when purchased are considered to be cash equivalents.
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 $254 and $271 for the three months ended March
31, 1998 and 1997, 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 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 three months
ended March 31, 1998 and 1997, such fees, which are capitalized
and amortized, approximated $577 and $206, 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 residential property
under operating leases having terms generally of one year or
less is recognized when earned.
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 11).
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.
Page 9 of 28
<PAGE>
Earnings
Per Share In accordance with the 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.
Dividends and
Distributions
Payable The dividends and distributions payable at March 31, 1998
represents dividends payable to shareholders of record on April
3, 1998 (55,922,025 shares), distributions payable to minority
interest common unitholders (6,789,352 common units) on that
same date and preferred distributions to preferred unitholders
(232,401 preferred units) for the first quarter 1998. The first
quarter 1998 dividends and common unit distributions of $0.50
per share and per common unit, as well as the first quarter
preferred unit distribution of $16.875 per preferred unit, were
approved by the Board of Directors on March 18, 1998 and were
paid on April 21, 1998.
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 12.
Reclassifi-
cations Certain reclassifications have been made to prior period
balances in order to conform with current period presentation.
3. ACQUISITIONS/TRANSACTIONS
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.
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. The Company
holds a $7,250 mortgage loan ("RM Note Receivable") secured by the remaining
Option Property (see Note 6).
Page 10 of 28
<PAGE>
On December 11, 1997, the Company acquired 54 office properties, aggregating
approximately 9.2 million square feet, (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 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) the 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 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.
On account of the achievement of certain of the performance goals during the
three months ended March 31, 1998, certain of the Contingent Units were redeemed
for a specified amount of common and preferred units (see Note 8).
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.
Additionally in 1997, the Company acquired 13 office and office/flex properties,
aggregating 1,495,950 square feet, in nine separate transactions with separate
sellers, for an aggregate cost of approximately $204,446. Such acquisitions were
funded primarily with drawings on the Company's revolving 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 $1,338, 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.
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 $47,452. 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 fair value of $8,354 (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 $5,164, 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 ("500 West
Putnam"), 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 fair 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
("Mountainview"), a 192,000 square-foot office property, located in Upper Saddle
River, Bergen County, New Jersey. The property was acquired for approximately
$24,725, which was made available from proceeds received from the Company's
February 1998 offering of common stock.
Page 11 of 28
<PAGE>
On March 12, 1998, the Company acquired 1250 Capital of Texas Highway South, a
270,703 square foot Class A office building in Austin, Travis County, Texas. The
property was acquired for a total cost of approximately $37,062, which was made
available from drawing on one of the Company's credit facilities.
On March 27, 1998, the Company acquired four office buildings, a daycare center,
plus land parcels, and a 50 percent interest in another office building, all of
such properties aggregating 875,000 square feet and located in the Prudential
Business Campus office complex in Parsippany and East Hanover, Morris County,
New Jersey. The properties were acquired for a total cost of approximately
$175,856 million, which funds were made available from the Company's cash
reserves (provided in part from the proceeds received in the sale of 2,705,628
shares of the Company's 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) and from drawing on one of the
Company's credit facilities.
Also, on March 27, 1998, the Company acquired ten office properties (the
"Pacifica I Acquisition"), located in suburban Denver and Colorado Springs,
Colorado, and 2.5 acres of vacant land, located in the Denver Tech Center, from
Pacifica Holding Company ("Pacifica"), a private real estate owner and operator
in Denver, Colorado, for a total cost of approximately $74,712. Such funds were
made available from drawing on one of the Company's credit facilities and the
issuance of common units (see Note 8). The Pacifica I Acquisition was comprised
of approximately 620,156 square feet of Pacifica's entire 1.4 million
square-foot office portfolio, which consists of 19 office buildings and related
operations. The Company currently is a party to a letter of intent to acquire
the remaining nine office buildings, encompassing 742,973 square feet, from
Pacifica for an aggregate purchase price of approximately $113,000.
On March 30, 1998, the Company acquired two office buildings, aggregating
308,215 square feet, in the Morris County Financial Center located in
Parsippany, Morris County, New Jersey. The properties were acquired for a total
cost of approximately $52,753, which was made available from drawing on one of
the Company's credit facilities.
4. DEFERRED CHARGES AND OTHER ASSETS
March 31, December 31,
1998 1997
---- ----
Deferred leasing costs $ 22,662 $ 20,297
Deferred financing costs 3,669 3,640
- ------------------------------------------------------------------------------
26,331 23,937
Accumulated amortization (10,428) (9,535)
- ------------------------------------------------------------------------------
Deferred charges, net 15,903 14,402
Prepaid expenses and other assets 5,769 4,587
- ------------------------------------------------------------------------------
Total deferred charges and other assets,
net $ 21,672 $ 18,989
==============================================================================
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:
March 31, December 31,
1998 1997
---- ----
Escrow and other reserve funds $ 1,552 $ 1,278
Security deposits 5,239 5,566
- ------------------------------------------------------------------------------
Total restricted cash $6,791 $ 6,844
==============================================================================
6. MORTGAGE NOTES RECEIVABLE
In connection with the RM Transaction on January 31, 1997, the Company provided
a $11,600 non-recourse mortgage loan (the "RM Note Receivable") to entities
controlled by the RM principals, bearing interest at an annual rate of 450 basis
points over the one-month LIBOR. The RM Note Receivable, which is secured by the
Option Properties and
Page 12 of 28
<PAGE>
guaranteed by certain of the RM principals, matures on February 1, 2000. In
conjunction with the acquisition of one of the Option Properties on August 15,
1997, the sellers of the property, certain RM principals, prepaid $4,350 of the
RM Note Receivable, leaving a remaining principal balance of $7,250 secured by
the remaining Option Property.
On March 6, 1998, prior to the completion of the Pacifica I Acquisition, the
Company provided a $20,000 mortgage loan to an entity controlled by certain
principals of Pacifica. Such mortgage loan is secured by an office property in
California. The mortgage note receivable bears interest at an annual rate of
9.25 percent and has a two-year term.
7. MORTGAGES AND LOANS PAYABLE
March 31, December 31,
1998 1997
- -------------------------------------------------------------------------------
TIAA Mortgage $ 185,283 $ 185,283
Harborside Mortgages 150,000 150,000
CIGNA Mortgages 75,910 86,650
Mitsubishi Mortgages 72,204 72,204
Prudential Mortgages 61,669 62,205
Other Mortgages 99,937 88,474
Prudential Term Loan 200,000 200,000
Revolving Credit Facilities 356,751 122,100
Contingent Obligation 5,838 5,734
- ------------------------------------------------------------------------------
Total mortgages and loans payable $1,207,592 $ 972,650
==============================================================================
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"). 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.
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 $104,059 as of March 31, 1998,
bears interest at a fixed rate of 7.32 percent for a term of approximately nine
years. The seller-provided financing, with a principal balance of $45,941 as of
March 31, 1998, also has a term of approximately nine years and initially bears
interest at a rate of 6.99 percent. 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.
CIGNA MORTGAGES
In connection with the Mack Transaction, the Company assumed non-recourse
mortgage debt (the "CIGNA Mortgages") aggregating $75,910 in principal as of
March 31, 1998, with Connecticut General Life Insurance Company (CIGNA). Such
mortgages, which are secured by five of the Mack Properties, bear interest at a
weighted average fixed rate of 7.68 percent and require monthly payments of
interest and principal on various term amortization schedules. The various
mortgages mature between October 1998 and October 2003.
In April 1998, simultaneous with the Company obtaining the $150,000 Prudential
Mortgage Loan, as described below, the Company retired one of the CIGNA
Mortgages with a principal balance of $27,835.
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
at a variable rate of 65 basis points over LIBOR (5.6875 percent at March 31,
1998) and mature between January 2008 and January 2009.
Page 13 of 28
<PAGE>
PRUDENTIAL MORTGAGES
The Company has mortgage debt (the "Prudential Mortgages") aggregating $61,669
in principal as of March 31, 1998 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 fixed
rate of 8.43 percent, all of which require monthly payments of interest. Certain
of the Prudential Mortgages 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 $99,937 in
principal as of March 31, 1998 with eight different lenders, which were assumed
in the Mack Transaction and the 1998 acquisitions of the McGarvey Properties and
500 West Putnam, and are secured by 14 individual properties. The Other
Mortgages are comprised of: (i) fixed rate debt aggregating $80,723, which bears
interest at a weighted average effective rate of 6.89 percent, and require
monthly payments of principal and interest on various term amortization
schedules, and (ii) variable rate debt aggregating $19,214, which bears interest
at 115 basis points over LIBOR. The Other Mortgages mature between February 1999
and October 2010.
In April 1998, simultaneous with the Company obtaining the $150,000 Prudential
Mortgage Loan, as described below, the Company retired $20,338 of the Other
Mortgages.
PRUDENTIAL TERM LOAN
On December 10, 1997, the Company obtained a $200,000 term loan from Prudential
Securities Corp. ("PSC") the "Prudential Term Loan." 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. The Prudential Term Loan was subsequently retired in April 1998,
simultaneous with the Company obtaining the $150,000 Prudential Mortgage Loan,
as described below.
REVOLVING CREDIT FACILITIES
Prudential Facility
The Company has a revolving credit facility (the "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 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 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 March 31, 1998 and December 31,
1997 under the Prudential Facility.
Original Unsecured Facility
On August 6, 1997, the Company obtained an unsecured revolving credit
facility (the "Original Unsecured Facility") in the amount of $400,000 from a
group of 13 lender banks. The facility carries a three-year term and bears
interest at 125 basis points over one-month LIBOR.
The terms of the Original Unsecured Facility included certain restrictions
and covenants which limit, among other things, dividend payments and
additional indebtedness and which required compliance with specified
financial ratios and other financial measurements. The facility also required
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 Company had outstanding borrowings of $356,751 and $122,100 at March 31,
1998 and December 31, 1997, respectively, under the Original Unsecured
Facility. The Original Unsecured Facility was subsequently repaid and retired
in connection with the Company obtaining the 1998 Unsecured Facility in April
1998, as described below.
1998 Unsecured Facility
On April 17, 1998, the Company repaid in full and terminated the Original
Unsecured Facility and obtained a new unsecured revolving credit facility
(the "1998 Unsecured Facility") in the amount of $870,000 from a group of 25
lender banks, led by The Chase Manhattan Bank and Fleet National Bank. The
1998 Unsecured Facility has a three-year term and currently bears interest at
110 basis points over LIBOR, a reduction of 15 basis points from the retired
Page 14 of 28
<PAGE>
Original Unsecured Facility. 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 1998 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 1998 Unsecured Facility also requires a
17.5 basis point fee on the unused balance payable quarterly in arrears.
The lending group for the 1998 Unsecured Facility consists of: The Chase
Manhattan Bank, as administrative agent; Fleet National Bank, as syndication
agent; PNC Bank, N.A., as documentation agent; Bankers Trust, Commerzbank,
AG, The First National Bank of Chicago, First Union National Bank and
NationsBank, as managing agents; Creditanstalt Corporate Finance, Inc.,
Dresdner Bank, AG, European American Bank (EAB), Hypo Bank, Societe Generale
and Summit Bank, as co-agents; and Kredietbank, N.V., Key Bank, Mellon Bank,
N.A., The Bank of New York, Citizens Bank, Crestar, DG Bank, Tokai Bank, US
Trust, Bayerische Landesbank and Erste Bank.
$150,000 PRUDENTIAL MORTGAGE LOAN
On April 30, 1998, the Company obtained a $150,000, interest-only mortgage loan
from The Prudential Insurance Company of America with a seven-year term. The
mortgage loan, which is secured by 12 of the Company's Properties, has an
effective annual interest rate of 7.1 percent, and includes a conversion feature
whereby the Company, upon receiving an investment-grade credit rating, will have
the option to convert the loan into senior unsecured debt.
The proceeds of the new loan were used, along with funds drawn from one of the
Company's credit facilities, to retire the Prudential Term Loan, as well as
approximately $48,200 of the Mack Mortgages.
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 quarter ended March 31, 1998, interest was imputed
on the Contingent Obligation, thereby increasing the balance of the Contingent
Obligation to $5,838 as of March 31, 1998.
INTEREST RATE CONTRACTS
On May 24, 1995, the Company entered into an interest rate swap agreement with a
commercial bank. The swap agreement fixes the Company's one-month LIBOR base to
a fixed 6.285 percent per annum on a notional amount of $24,000 through August
1999.
On January 23, 1996, the Company entered into 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.
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.
CASH PAID FOR INTEREST & INTEREST CAPITALIZED
Cash paid for interest for the three ended month ended March 31, 1998 and 1997
was $20,302 and $8,503, respectively. Interest capitalized by the Company for
the three month ended March 31, 1998 and 1997 was $201 and none, 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 issued in the Mack Transaction, held by parties other than the Company.
Preferred and common units issued in 1997 and the three months ended March 31,
1998 are described in Note 3.
Page 15 of 28
<PAGE>
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 (representing 6.75 percent of
the Preferred Unit stated value of $1,000 on an annualized basis) is an amount
equal to the greater of (i) $16.875 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 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 Units, issued in the Mack Transaction, are convertible into Common
Units at $34.65 per common unit, which is an amount less than the $39.0625
closing stock price on the date of closing of the Mack Transaction. Accordingly,
the Company recorded, on December 11, 1997, the financial value ascribed to the
beneficial conversion feature inherent in the Preferred Units upon issuance,
which 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.
During the three months ended March 31, 1998, the Company issued 1,839
additional Preferred Units (1,111 of Series A and 728 of Series B), valued at
approximately $1,886, in connection with the achievement of certain performance
goals at the Mack Properties in the redemption of an equivalent number of
Contingent Units. Such Preferred Units carry the identical terms as those issued
in the Mack Transaction.
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.
During the three months ended March 31, 1998, a common unitholder in the
operating partnership redeemed 20,000 common units and received $766 in cash
from the Company. Additionally, certain other common unitholders redeemed an
aggregate of 22,300 common units for an equivalent number of shares of common
stock in the Company.
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 a 1997 single-property acquisition.
On March 26, 1998, in connection with the Pacifica I Acquisition, the Company
issued 100,175 common units, valued at approximately $3,779.
During the three months ended March 31, 1998, the Company also issued 634,000
common units, valued at approximately $21,405, in connection with the
achievement of certain performance goals at the Mack Properties in redemption of
an equivalent number of contingent common Units.
Contingent Common & 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 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
Page 16 of 28
<PAGE>
Units shall occur upon the achievement of certain performance goals relating to
certain of the Mack Properties, specifically the achievement of certain leasing
activity. On account of certain of the performance goals having been achieved
during the three months ended March 31, 1998, the Company redeemed 634,000
contingent common units and 1,839 contingent Preferred Units and issued an
equivalent number of common and Preferred Units, as indicated above.
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.
Minority Ownership
As of March 31, 1998 and December 31, 1997, the minority interest common
unitholders owned 10.8 percent (19.5 percent, including the effect of the
conversion of Preferred Units into common units) and 10.9 percent (20.4 percent
including the effect of the conversion of Preferred Units into common units) of
the Operating Partnership, respectively (excluding any effect for the 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. 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 the Harborside property 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.
Ground Lease Agreements
Future minimum rental payments under the terms of all non-cancelable ground
leases, under which the Company is the lessee, as of March 31, 1998 are as
follows:
Period Amount
- ------------------------------------------------------------------------------
April 1, 1998 to December 31, 1998 $ 240
1999 320
2000 320
2001 320
2002 320
Thereafter 17,851
- ------------------------------------------------------------------------------
Total $19,371
==============================================================================
Page 17 of 28
<PAGE>
Other Contingencies
On December 10, 1997, a Shareholder's Derivative Action was filed in Maryland
Court on behalf of a 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 was factually and legally baseless, the
Company on May 4, 1998 agreed to a settlement pursuant to which it incurred a
cost of $554, and agreed to certain changes to employment agreements of certain
of its executive officers. The Company expects to incur an additional $196 in
costs associated with defending this action. The Company provided for $750 at
December 31, 1997 for this matter.
The Company is a defendant in other certain 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.
11. 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.
12. 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 at any time during the last half of any taxable year
of the Company, other than its initial taxable year (defined to include certain
entities), 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 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 Original Unsecured Facility and the remainder of the proceeds
to fund a portion of the purchase price of the Mack Transaction, for other
potential 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 and used the net proceeds, which
totaled approximately $92,194 (after offering costs) to pay down a portion of
its outstanding borrowings under the Company's credit facilities and fund the
acquisition of Moutainview (see Note 3).
On March 18, 1998, in connection with the acquisition of Prudential Business
Campus, the Company completed an offer and sale of 2,705,628 shares of its
common stock using the net proceeds of approximately $99,899 (after offering
costs) in the funding of such acquisition. (see Note 3).
On March 27, 1998, the Company completed an underwritten public offer and sale
of 650,407 shares of its common stock and used the net proceeds, which totaled
approximately $23,690 (after offering costs) to pay down a portion of its
outstanding borrowings under the Company's credit facilities.
Finally, on April 29, 1998, the Company completed an underwritten offer and sale
of 994,228 shares of its common stock and used the net proceeds, which totaled
approximately $34,650 (after offering costs) primarily to pay down a portion of
its outstanding borrowings under the Company's credit facilities.
Page 18 of 28
<PAGE>
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.
Information regarding the Company's stock option plans is summarized below:
Weighted
Shares Average
Under Exercise
Options Price
------------------------------------------------------------------------
Outstanding at January 1, 1995 625,000 $17.23
Granted 230,200 17.69
Exercised -- --
Lapsed or canceled 3,588 17.25
------------------------------------------------------------------------
Outstanding at December 31, 1995 851,612 17.36
Granted 809,700 23.97
Exercised 126,041 17.25
Lapsed or canceled 7,164 19.52
------------------------------------------------------------------------
Outstanding at December 31, 1996 1,528,107 20.86
Granted 2,126,538 37.35
Exercised 337,282 21.33
Lapsed or canceled 30,073 22.62
------------------------------------------------------------------------
Outstanding at December 31, 1997 3,287,290 31.47
Granted 901,150 37.31
Exercised 101,062 19.81
Lapsed or canceled 344 30.40
------------------------------------------------------------------------
Outstanding at March 31, 1998 4,087,034 $33.04
========================================================================
Options exercisable at
December 31, 1997 1,432,027 $25.22
Options exercisable at
March 31, 1998 1,340,965 $25.68
------------------------------------------------------------------------
Available for grant at
December 31, 1997 1,629,575
Available for grant at
March 31, 1998 728,769
------------------------------------------------------------------------
Stock 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 ("Stock Warrants") 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.
On December 12, 1997, in conjunction with the completion of the Mack
Transaction, the Company granted a total of 491,756 Stock 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 the Patriot American Office Group. Such warrants vest equally over
a five-year period and have a term of ten years.
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
Page 19 of 28
<PAGE>
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 related tax obligation payments were made.
Earnings Per Share
FASB No. 128 requires a dual presentation of basic and diluted earnings per
share ("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.
The following information presents the Company's results for the three months
ended March 31, 1998, and 1997 in accordance with FASB No. 128.
For the Three Months Ended March 31,
1998 1997
---- ----
Basic EPS Diluted EPS Basic EPS Diluted EPS
--------- ----------- --------- -----------
Net income $26,543 $26,543 $16,459 $16,459
Add: Net income attributable
to potentially dilutive
securities -- 3,395 -- 1,636
- --------------------------------------------------------------------------------
Adjusted net income $26,543 $29,938 $16,459 $18,095
================================================================================
Weighted average shares 51,363 58,682 36,461 40,817
- --------------------------------------------------------------------------------
Per Share $ 0.52 $ 0.51 $ 0.45 $ 0.44
================================================================================
The following schedule reconciles the shares used in the basic EPS calculation
to the shares used in the diluted EPS calculation.
1998 1997
---- ----
Basic EPS Shares: 51,363 36,461
Add: Stock Options 612 533
Restricted Stock Awards -- 199
Stock Warrants 137 --
Operating Partnership Units 6,570 3,624
- -----------------------------------------------------------------------------
Diluted EPS Shares: 58,682 40,817
=============================================================================
13. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS
In June 1997, the 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 there are no 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
Page 20 of 28
<PAGE>
statement is effective for financial statements for annual periods beginning
after December 15, 1997 and interim periods a year later, and requires that
comparative information from earlier years be restated to conform to the
requirements of this standard.
14. PRO FORMA FINANCIAL INFORMATION (unaudited)
The following proforma financial information for the three month periods ended
March 31, 1998 and 1997 are presented as if the RM Transaction, the Mack
Transaction and all other acquisitions and common stock offerings completed in
1997, and all acquisitions and common stock offerings completed during the three
months ended March 31, 1998 had all occurred on January 1, 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, 1997, nor do they represent the
results of operations of future periods.
Three Months Ended
March 31,
1998 1997
---- ----
Total revenues $ 116,530 $ 116,554
Operating and other expenses (34,470) (35,779)
General and administrative (6,600) (6,070)
Depreciation and amortization (17,982) (16,910)
Interest expense (22,753) (24,469)
- --------------------------------------------------------------------------------
Income before minority interest and extraordinary item 34,725 33,326
Minority interest (7,181) (6,847)
- --------------------------------------------------------------------------------
Income before extraordinary item $ 27,544 $ 26,479
================================================================================
Basic earnings per common share $ 0.49 $ 0.48
- --------------------------------------------------------------------------------
Page 21 of 28
<PAGE>
MACK-CALI REALTY CORPORATION AND SUBSIDIARIES
Item 2:
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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 three months ended March 31, 1998 ("1998"), as
compared to the three months ended March 31, 1997 ("1997") make reference to the
following: (i) the effect of the "Same-Store Properties," which represents all
properties owned by the Company at December 31, 1996, (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, and (iv) the effect of
the "Acquired Properties," which represents all properties acquired by the
Company from January 1, 1997 through March 31, 1998, excluding RM and Mack.
Three Months Ended March 31, 1998 Compared to Three Months Ended March 31, 1997
Total revenues increased $53.7 million, or 102.9 percent, for 1998 over 1997.
Base rents increased $50.1 million, or 117.1 percent, of which an increase of
$8.5 million, or 19.9 percent, was attributable to the Acquired Properties, an
increase of $5.5 million, or 12.8 percent, due to the RM Properties, an increase
of $35.7 million, or 83.3 percent, due to the Mack Properties and an increase of
$0.4 million, or 1.1 percent, due to occupancy and rental rate changes at the
Same-Store Properties. Escalations and recoveries increased $3.8 million, or
56.6 percent, of which an increase of $1.1 million, or 16.5 percent, was
attributable to the Acquired Properties, an increase of $0.5 million, or 6.5
percent, due to the RM Properties, and an increase of $2.3 million, or 34.9
percent, due to the Mack Properties, offset by a decrease of $0.1 million, or
1.3 percent, due to occupancy changes at the Same-Store Properties. Parking and
other income increased $0.5 million, or 29.9 percent, of which $0.1 million, or
7.1 percent, was attributable to the RM Properties, $0.4 million, or 21.4
percent, due to the Mack Properties, and $0.1 million, or 8.7 percent, was
attributable to the Acquired Properties, offset by a decrease of $0.1 million,
or 7.3 percent, due to the Same-Store Properties. Interest income decreased $0.7
million, or 55.0 percent, due primarily to the use of the funds previously
invested to fund the RM Transaction.
Total expenses for 1998 increased $37.9 million, or 111.3 percent, as compared
to 1997. Real estate taxes increased $4.6 million, or 85.4 percent, for 1998
over 1997, of which an increase of $0.8 million, or 14.8 percent, was
attributable to the Acquired Properties, an increase of $0.8 million, or 14.7
percent, due to the RM Properties, an increase of $2.9 million, or 53.2 percent,
due to the Mack Properties, and an increase of $0.1 million, or 2.7 percent,
attributable to the Same-Store Properties. Additionally, operating services
increased $6.3 million, or 97.8 percent, and utilities increased $4.6 million,
or 122.8 percent, for 1998 over 1997. The aggregate increase in operating
services and utilities of $10.9 million, or 107.0 percent, consists of $1.8
million, or 17.6 percent, attributable to the Acquired Properties, an increase
of $1.1 million, or 10.9 percent, due to the RM Properties, and an increase of
$8.4 million, or 82.1 percent, due to the Mack Properties, offset by a decrease
of $0.4 million, or 3.6 percent, attributable to the Same-Store Properties.
General and administrative expense increased $3.0 million, or 95.3 percent, of
which $2.0 million, or 64.3 percent, is due primarily to an increase in payroll
and related costs as a result of the Company's expansion, $0.8 million, or 23.8
percent, due to additional costs related to the Mack Properties, and $0.2
million, or 7.2 percent, attributable to additional costs related to the RM
Properties. Depreciation and amortization increased $8.7 million, or 116.6
percent, for 1998 over 1997, of which $1.5 million, or 20.8 percent, relates to
depreciation on the Acquired Properties, an increase of $1.1 million, or 15.0
percent, attributable to the RM Properties, an increase of $5.6 million, or 74.5
percent, due to the Mack Properties, and an increase of $0.5 million, or 6.3
percent, due to the Same-Store Properties. Interest expense increased $10.7
million, or 136.3 percent, for 1998 over 1997, of which $1.1 million, or 14.2
percent, was attributable to the TIAA Mortgage, $0.2 million, or 2.6 percent,
due to assumed mortgages on Acquired Properties, an increase of $5.3 million, or
67.5 percent, due to assumed mortgages from the Mack Properties, and an increase
of $4.1 million, or 52.0 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.
Income before minority interest increased to $33.9 million in 1998 from $18.1
million in 1997. The increase of $15.8 million was due to the factors discussed
above.
Net income increased $10.0 million for 1998, from $16.5 million in 1997 to $26.5
million in 1998. This increase was a result of an increase in income before
minority interest of $15.8 million, offset by an increase of $5.7 million in
minority interest, primarily attributable to distributions on preferred units in
1998.
Page 22 of 28
<PAGE>
Liquidity and Capital Resources
Statement of Cash Flows
During the three months ended March 31, 1998, the Company generated $50.4
million in cash flows from operating activities, and together with $419.9
million in borrowings from the Company's credit facilities, $215.8 million in
net proceeds from the Company's common stock offerings during the period, $2.7
million from the Company's cash reserves, and $2.0 million in proceeds from
stock options exercised, used an aggregate of $690.8 million to acquire 39
properties and pay for other tenant improvements and building improvements for
$406.7 million, repay outstanding borrowings on its credit facilities and other
mortgage debt of $205.5 million, pay quarterly dividends and distributions of
$28.1 million, provide $20.0 million for a mortgage note receivable, invest
$18.0 million in a partially-owned entity, invest $11.7 of cash reserves in
overnight investments, and repurchase 20,000 common units for $0.8 million.
Capitalization
On February 25, 1998, the Company completed an underwritten public offer and
sale of 2,500,000 shares of its common stock and used the net proceeds, which
totaled approximately $92.2 million (after offering costs) to pay down a portion
of its outstanding borrowings under the Company's credit facilities and fund the
acquisition of Moutainview (see Note 3 to the Financial Statements).
On March 18, 1998, in connection with the acquisition of Prudential Business
Campus, the Company completed an offer and sale of 2,705,628 shares of its
common stock using the net proceeds of approximately $99.9 million (after
offering costs) in the funding of such acquisition (see Note 3 to the Financial
Statements).
On March 26, 1998, in connection with the acquisition of certain properties from
the Pacifica Holding Company, the Company issued 100,175 common units, valued at
approximately $3.8 million.
On March 27, 1998, the Company completed an underwritten public offer and sale
of 650,407 shares of its common stock and used the net proceeds, which totaled
approximately $23.7 million (after offering costs) to pay down a portion of its
outstanding borrowings under the Company's credit facilities.
During the three months ended March 31, 1998, the Company also issued 634,000
common units and 1,839 preferred units, valued at approximately $23.3 million,
in connection with the achievement of certain performance goals at the Mack
Properties, with an equivalent number of contingent common units being redeemed.
On April 29, 1998, the Company completed an underwritten offer and sale of
994,228 shares of its common stock and used the net proceeds, which totaled
approximately $34.7 million (after offering costs) primarily to pay down a
portion of its outstanding borrowings under the Company's credit facilities.
On April 17, 1998, the Company repaid in full and terminated its $400 million
unsecured revolving credit facility, led by Fleet National Bank, and obtained a
new unsecured revolving credit facility (the "1998 Unsecured Facility") in the
amount of $870.0 million from a group of 25 lender banks, led by The Chase
Manhattan Bank and Fleet National Bank. The 1998 Unsecured Facility has a
three-year term and currently bears interest at 110 basis points over one-month
LIBOR, a reduction of 15 basis points from the retired Original Unsecured
Facility. 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 1998 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 1998 Unsecured Facility also requires a 17.5
basis point fee on the unused balance payable quarterly in arrears.
The lending group for the 1998 Unsecured Facility consists of: The Chase
Manhattan Bank, as administrative agent; Fleet National Bank, as syndication
agent; PNC Bank, N.A., as documentation agent; Bankers Trust, Commerzbank, AG,
The First National Bank of Chicago, First Union National Bank and NationsBank,
as managing agents; Creditanstalt Corporate Finance, Inc., Dresdner Bank, AG,
European American Bank (EAB), Hypo Bank, Societe Generale and Summit Bank, as
co-agents; and Kredietbank, N.V., Key Bank, Mellon Bank, N.A., The Bank of New
York, Citizens Bank, Crestar, DG Bank, Tokai Bank, US Trust, Bayerische
Landesbank and Erste Bank.
The new unsecured facility, together with the Company's previously-existing
$100.0 million revolving credit facility with Prudential Securities Corp.,
provides the Company with a total credit line borrowing capacity of $970.0
million.
Page 23 of 28
<PAGE>
On April 30, 1998, the Company obtained a $150.0 million, interest-only mortgage
loan from The Prudential Insurance Company of America with a seven-year term.
The mortgage loan, which is secured by 12 of the Company's Properties, has an
effective annual interest rate of 7.1 percent, and includes a conversion feature
whereby the Company, upon receiving an investment-grade credit rating, will have
the option to convert the loan into senior unsecured debt.
The proceeds of the new loan were used, along with funds drawn from one of the
Company's credit facilities, to pay off and retire a $200.0 million term loan
with Prudential, as well as approximately $48.2 million in property mortgage
loans assumed in the December 1997 Mack/Patriot transaction.
Following the completion of the $150.0 million secured loan with Prudential, the
Company has 151 unencumbered properties, totaling 14.8 million square feet,
representing 59.0 percent of the Company's total portfolio on a square footage
basis.
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 Prudential facility and the new unsecured credit facility, led by Chase
and Fleet Bank. The Company is frequently examining potential property
acquisitions and, at any one 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, $150,000 Prudential mortgage loan, its various
other property 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
distributions 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 distributions to its stockholders which, based upon current
policy, in the aggregate would equal approximately $114.0 million on an
annualized basis. However, any such 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), 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.
NAREIT's definition of FFO indicates that the calculation should be made before
any extraordinary item (determined in accordance with GAAP), and before any
deduction of significant non-recurring events that materially distort the
comparative measurement of the Company's performance.
Page 24 of 28
<PAGE>
Funds from operations for the three months ended March 31, 1998 and 1997 as
calculated in accordance with the National Association of Real Estate Investment
Trusts' definition published in March 1995, are summarized in the following
table (in thousands):
Three Months
Ended March 31,
1998 1997
---- ----
Income before distribution to preferred unitholders
and minority interest $ 33,849 $ 18,095
Add: Real estate-related depreciation and
amortization 16,120 7,479
Deduct: Rental income adjustment for
straight-lining of rents (3,203) (1,607)
- --------------------------------------------------------------------------------
Funds from operations after adjustment
for straight-lining of rents,
before distributions to preferred unitholders $ 46,766 $ 23,967
Deduct: Distribution to preferred unitholders (3,911) --
- --------------------------------------------------------------------------------
Funds from operations after
adjustment for straight-lining of rents $ 42,855 $ 23,967
================================================================================
Fully-converted weighted average shares outstanding (1) 64,621 40,085
- --------------------------------------------------------------------------------
Weighted average shares outstanding (2) 57,932 40,085
- --------------------------------------------------------------------------------
(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 outstanding 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.
Year 2000
Many computer systems experience problems handling dates beyond the year 1999.
Therefore, some computer hardware and software will need to be modified prior to
the year 2000 in order to remain functional. The Company is assessing both the
internal readiness of its systems as well as the compliance of its vendors for
the handling of the year 2000. The Company expects to implement successfully the
systems and programming changes necessary to address year 2000 issues, and does
not believe that the cost of such actions will have a material effect on the
Company's results of operations or financial condition. There can be no
assurance, however, that there will not be a delay in, or increased costs
associated with, the implementation of such changes, and the Company's inability
to implement such changes could have an adverse effect on future results of
operations.
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.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not Appplicable.
PART II - Other Information
Item 1. Legal Proceedings
Reference is made to Other Contingencies in Footnote 10 (Commitments and
Contingencies) to the consolidated financial Statements which is specifically
incorporated by reference herein.
Item 2. Changes in Securities and Use of Proceeds
(c) Reference is made to the first and last paragraphs under
Preferred Units, and the fourth, fifth and sixth paragraphs
under Common Units in Footnote 8 (Minority Interest) to the
Consolidated Financial Statements which are specifically
incorporated by reference herein. Also specifically
incorporated by reference herein are the first, fourth, fifth
and sixth paragraphs in Footnote 3 (Acquisitions/Transactions)
to the Consolidated Financial Statements.
Page 25 of 28
<PAGE>
MACK-CALI REALTY CORPORATION
Part II -- Other Information (continued)
Item 6 - Exhibits
The following exhibits are filed herewith:
Exhibit No. Exhibit Title
- ----------- -------------
10.145 Purchase and Sale Agreement by and between Sylvan Way L.L.C., as
Seller, and Mack-Cali Realty Acquisition Corp., as Purchaser, dated
February 4, 1998
10.146 Purchase and Sale Agreement by and between PRUBETA-3, as Seller, and
Mack-Cali Realty Acquisition Corp., as Buyer, dated February 18,
1998
10.147 Second Amendment to Purchase and Sale Agreement by and between
PRUBETA-3, as Seller, and Mack-Cali Realty Acquisition Corp.,
Parsippany Campus Realty Associates, L.P., and Mack-Cali Realty,
L.P., as Buyers, dated March 27, 1998
10.148 Assignment and Assumption Agreement, dated March 27, 1998, by Equity
Parsippany Venture, as Assignor, to Mack-Cali Realty Acquisition
Corp., as Assignee
10.149 Asset Purchase Agreement, dated as of March 25, 1998, between
Mack-Cali Realty, L.P., as Acquiror, and Pacifica Holding Company
LLC, as Contributor
10.150 Contribution and Exchange Agreement, dated March 25, 1998, by and
between Pacifica Progress/Union Limited Liability Company, as
Contributor, and Mack-Cali Realty, L.P. and Mack-Cali Realty
Corporation
10.151 Contribution and Exchange Agreement, dated March 26, 1998, by and
among parties setforth herein, as Contributor, and Mack-Cali Realty,
L.P. and Mack-Cali Realty Corporation [Pacifica Development
Properties II]
10.152 Contribution and Exchange Agreement, dated March 25, 1998, by and
among parties setforth herein, as Contributors, and Mack-Cali
Realty, L.P. and Mack-Cali Realty Corporation [Centennial Valley -
Park One]
10.153 Contribution and Exchange Agreement, dated March 25, 1998, by and
among parties setforth herein, as Contributors, and Mack-Cali
Realty, L.P. and Mack-Cali Realty Corporation [67 Inverness]
10.154 Contribution and Exchange Agreement, dated March 25, 1998, by and
between Apollo/Pacifica Pyramid, LLC, as Contributor, and Mack-Cali
Realty, L.P. and Mack-Cali Realty Corporation
10.155 Contribution and Exchange Agreement, dated March 25, 1998, by and
between Pacifica 384 Inverness Partnership, as Contributor, and
Mack-Cali Realty, L.P. and Mack-Cali Realty Corporation
10.156 Contribution and Exchange Agreement, dated March 25, 1998, by and
between Pacifica Development Properties LLC, as Contributor, and
Mack-Cali Realty, L.P. and Mack-Cali Realty Corporation
10.157 Indemnification Agreement, dated March 25, 1998, among Mack-Cali
Realty Corporation, Mack-Cali Realty, L.P., Apollo Real Estate
Investment Fund II, L.P., Pacifica Holding Company, L.L.C. and
Pacifica Holding Company
Page 26 of 28
<PAGE>
10.158 Indemnification Agreement, dated March 25, 1998, among Mack-Cali
Realty Corporation, Mack-Cali Realty, L.P., Pacifica Holding
Company, L.L.C. and Pacifica Holding Company.
10.159 Notice of Settlement of Derivative Action and Hearing on Proposed
Settlement, dated April 2, 1998.
10.160 Revolving Credit Agreement among Mack-Cali Realty, L.P. and The
Chase Manhattan Bank, Fleet National Bank and Other Lenders Which
May Become Parties to This Agreement, dated April 16, 1998
10.161 Underwriting Agreement, dated April 23, 1998, between Mack-Cali
Realty Corporation and Merrill Lynch, Pierce, Fenner and Smith
Incorporated.
Page 27 of 28
<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: May 15, 1998 /s/ Thomas A. Rizk
----------------------------
Thomas A. Rizk
Chief Executive Officer
/s/ Barry Lefkowitz
----------------------------
Date: May 15, 1998 Barry Lefkowitz
Executive Vice President &
Chief Financial Officer
Page 28 of 28
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement") is made as of the 4th day
of February, 1998 (the "Effective Date"), by and between SYLVAN WAY L.L.C., a
Virginia limited liability company, ("Seller"), and MACK - CALI REALTY
ACQUISITION CORP., a Delaware corporation ("Purchaser").
WITNESSETH:
In consideration of the mutual covenants and agreements set forth herein the
parties hereto do hereby agree as follows:
ARTICLE 1- SALE OF PROPERTY
Seller agrees to sell, transfer and assign and Buyer agrees to purchase, accept
and assume, subject to the terms and conditions stated herein, all of Seller's
right, title and interest in and to the following (herein collectively called
the "Property"):
1.1 Real Property. That certain parcel of real estate consisting of #'s
1 and 5 Sylvan Way, and a branch bank building, located in Morris
County Financial Center, Parsippany, New Jersey, and legally
described in Exhibit A attached hereto and incorporated herein by
this reference, together with all buildings, improvements and
fixtures located thereon and all rights, privileges and
appurtenances pertaining thereto including all of Seller's right,
title and interest in and to all rights-of-way, open or proposed
streets, alleys, easements, strips or gores of land adjacent thereto
(herein collectively called the "Real Property"); and
1.2 Personal Property. All tangible personal property owned by Seller
(excluding any computer or computer equipment and software owned by
Seller or Seller's property manager), located on the Real Property,
and used in the ownership, operation and maintenance of the Real
Property as shown on Exhibit Q hereto, and all nonconfidential
books, records and files (excluding appraisals, budgets, Seller's
strategic plans for the Property, internal analyses, marketing
information, submissions relating to Seller's obtaining of corporate
authorization, attorney and accountant work product, or other
information in the possession or control of Seller or Seller's
property manager which Seller deems proprietary) relating to the
Real Property (herein collectively called the "Personal Property");
and
1.3 Other Property Rights. (a) Seller's interest as landlord in all
leases encumbering the Real Property on the Closing Date (as defined
in Section 6.1); (b) if and to the extent assignable by Seller, (i)
all service, supply, maintenance, utility and
<PAGE>
commission agreements, all equipment leases, and all contracts,
subcontracts and agreements relating to the construction of any
unfinished tenant improvements, to the extent described in Exhibit B
attached hereto and incorporated herein by this reference, and (ii)
all licenses, permits and other written authorizations necessary for
the use, operation or ownership of the Real Property or Personal
Property and in Seller's possession or control and (c) all rights of
Seller (if any) to the names "One Sylvan Way," "Five Sylvan Way" and
"Morris County Financial Center", to the extent such rights are
assignable without expense to Seller (it being acknowledged by Buyer
that Seller does not have exclusive rights to use such name and that
Seller has not registered the same in any manner) (the rights and
interests of Seller described in clauses (b) and (c) hereinabove
being herein collectively called the "Other Property"). All of the
Other Property and Personal Property, if any, to the extent that
such items exist and are in the possession of Seller, shall be
conveyed to Buyer by quitclaim bill of sale, without any warranty of
title whatsoever. All of the foregoing items purchased under this
Agreement shall be hereinafter sometimes referred to collectively as
the "Property." The Property is being sold in an "AS IS" condition
and "WITH ALL FAULTS" as of the date of this Agreement and of
Closing (as defined herein).
ARTICLE 2 - PURCHASE PRICE
The total purchase price to be paid by Buyer for the purchase of the Property is
the sum of FIFTY TWO MILLION EIGHT HUNDRED THOUSAND AND NO/100 DOLLARS
($52,800,000 ) in immediately available funds (the "Purchase Price"). Buyer
understands that Chase Manhattan may possess a right of first refusal to acquire
the branch banking facility and ingress and egress rights (the "Bank Property")
and that Seller intends to give Chase Manhattan notice and an opportunity to
exercise those rights. Buyer and Seller agree that the value of the Bank
Property is $1,250,000 and that if Chase Manhattan elects to acquire the Bank
Property, the Property shall automatically be diminished by the subtraction of
the Bank Property from the whole and the Purchase Price of the so-diminished
Property shall be reduced by $1,250,000. If Chase Manhattan elects to acquire
the Bank Property the Buyer agrees that it will nevertheless Close on the
remainder of the Property for the reduced Purchase Price as aforesaid, subject
of course to Buyer's other rights to terminate this Agreement and not Close.
The Purchase Price shall be paid in the following manner:
2.1 Deposit Money. Upon execution and delivery of this Agreement and as
a condition precedent to the effectiveness of this Agreement, Buyer
shall also deliver a certified or cashier's check in the amount of
ONE MILLION AND NO/100 DOLLARS ($1,000,000.00) payable to the Title
Company identified in paragraph 3.1 hereof, as a deposit (the
"Deposit") whose street address is 81 Main Street, White Plains,
NY,10601, Attention: Anthony Ruggeri, Vice President, as
2
<PAGE>
escrow agent ("Escrow Agent"). Concurrently with countersigning this
Agreement, Seller shall forward the check to the Title Company. The
Deposit shall be held and delivered by Escrow Agent in accordance
with the provisions of Article 12. Any interest earned on the
Deposit shall be considered a part of the Deposit. Except as
otherwise set forth herein, the Deposit shall be applied against the
Purchase Price on the Closing Date. Escrow Agent is to deposit the
Deposit in a federally-insured bank. The parties acknowledge that
only $100,000 of the Deposit will be federally insured. (Note: Upon
the Buyer selecting the Title Company described in Section 3.1
hereof, Escrow Agent will transfer the Deposit to the Title Company
provided that the Title Company will concurrently execute a writing
similar to the signature block for Escrow Agent undertaking to hold
the Deposit in accordance with the provisions of this Agreement and
to comply with the provision of Article 12 and Section 14.2.)
2.2 Cash at Closing. On the Closing Date, Buyer shall pay to Seller an
amount equal to the difference between (a) the Purchase Price, and
(b) the amount of the Deposit as of the Closing Date (the
"Balance"), subject to the prorations and adjustments set forth in
Article 5 or as otherwise provided under this Agreement, plus any
other amounts required to be paid by Buyer at Closing, in
immediately available funds by wire transfer as more particularly
set forth in Section 6.2.
ARTICLE 3 - TITLE MATTERS
3.1 Title to Real Property. Buyer shall, when it executes and returns
this Agreement to Seller, identify in writing a title insurance
company to act as Escrow Agent pursuant to the provisions of
paragraph 2.1 hereof, post the Deposit as required in said paragraph
and order at its sole cost and expense within three (3) days of the
Execution Date (a) a commitment from First American Title Insurance
Co. of New York (the "Title Company") to issue an Owner's Policy of
Title Insurance with respect to the Property (the "Title Report"),
(b) copies of all recorded documents referred to on Schedule B of
the Title Report as exceptions to coverage (the "Title Documents"),
and (c) a certified boundary survey of the Property (the "Survey").
Except as provided in Section 3.2, Seller shall convey and Buyer
shall accept title to the Property, subject to (i) applicable zoning
and building ordinances and land use regulations, now and hereafter
in effect, to the extent adopted by any municipal or governmental
authority and applicable to all or any portion of the Property; (ii)
(Intentionally deleted), (iii) such state of facts as disclosed in
the Survey, (iv) such state of facts as would be disclosed by a
physical inspection of the Property, (v) the lien of taxes not yet
due and payable, (vi) any exceptions caused by Buyer, its agents,
representatives or employees, (vii) such other exceptions as the
Title Company shall commit to insure over, without any additional
cost to Buyer, whether such insurance is made available in
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consideration of payment, bonding, indemnity of Seller or otherwise,
and (viii) the rights of tenants in possession as set forth in
Subsection 6.3(c)], (ix) the exceptions set forth in Chicago Title
Insurance Company Policy number 31-901-60-04654, dated 4/13/95; and
(x) such facts as are shown on the as-built survey which was
prepared by Henderson and Bodwell, drawing number J310-1010, dated
4/6/95at the time of the 1995 acquisition of the Property by Seller,
(the foregoing exceptions described in clauses (i) through (x) being
herein collectively called the "Permitted Exceptions").
3.2 Title Defects.
3.2.1 Certain Exceptions to Title. Buyer shall have the right to
object in writing to any title matters that are not Permitted
Exceptions and that materially adversely affect Buyer's title
to the Real Property which may appear on supplemental title
reports or updates to the Title Report issued at the request
of Buyer after the date hereof (herein collectively called the
"Other Liens") within five (5) days after the receipt thereof
by Buyer. Unless Buyer shall timely object to such Other
Liens, all such Other Liens and any matters which do not
materially adversely affect Buyer's title to the Real Property
which are set forth in any such supplemental reports or
updates shall be deemed to constitute additional Permitted
Exceptions. Any exceptions which are timely objected to by
Buyer shall be herein collectively called the "Title
Objections." Seller may elect (but shall not be obligated) to
remove, or cause to be removed at its expense, any Title
Objections, and shall be entitled to a reasonable adjournment
of the Closing (not to exceed ninety (90) days) for the
purpose of such removal, which removal will be deemed effected
by the issuance of title insurance eliminating or insuring
against the effect of the Title Objections. Seller shall
notify Buyer in writing within five (5) days after receipt of
Buyer's notice of Title Objections whether Seller elects to
remove the same. If Seller is unable to remove or endorse over
any Title Objections prior to the Closing, or if Seller elects
not to remove one or more Title Objections, Buyer may elect to
either (a) terminate this Agreement, in which event the
Deposit shall be paid to Buyer and, thereafter, the parties
shall have no further rights or obligations hereunder except
for obligations which expressly survive the termination of
this Agreement, or (b) waive such Title Objections, in which
event such Title Objections shall be deemed "Permitted
Exceptions" and the Closing shall occur as herein provided
without any reduction of or credit against the Purchase Price.
Unless Buyer elects to terminate within two business days
after receipt of Seller's election to cure a Title Objection
or not, as the case may be, Buyer shall be deemed to have
elected (b) above and to have waived its objections. The
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aforementioned elections shall be evidenced by notice to the
other party pursuant to the notice provisions in this
Agreement.
3.2.2 Discharge of Title Objections. If on the Closing Date there
are any Title Objections which Seller has elected to pay and
discharge, Seller may use any portion of the Balance to
satisfy the same, provided Seller shall deliver to Buyer at
the Closing instruments in recordable form and sufficient to
satisfy such Title Objections of record, together with the
cost of recording or filing such instruments, or provided that
Seller shall cause the Title Company to insure over the same,
without any additional cost to Buyer, whether such insurance
is made available in consideration of payment, bonding,
indemnity of Seller or otherwise.
3.3 Title Insurance. At Closing, the Title Company shall issue to Buyer,
at Buyer's sole cost and expense, an ALTA Owner's Form of title
insurance policy in the form of the Title Report (the "Owner's Title
Policy"), in the amount of the Purchase Price, insuring that fee
simple title to the Real Property is vested in Buyer subject only to
the Permitted Exceptions. Buyer shall be entitled to request that
the Title Company provide, at Buyer's sole cost and expense, such
endorsements (or amendments) to the Owner's Title Policy as Buyer
may reasonably require, provided that (a) such endorsements (or
amendments) shall be at no cost or additional liability to Seller,
(b) Buyer's obligations under this Agreement shall not be
conditioned upon Buyer's ability to obtain such endorsements and, if
Buyer is unable to obtain such endorsements, Buyer shall
nevertheless be obligated to proceed to close the transaction
contemplated by this Agreement (the "Transaction") without reduction
of or set off against the Purchase Price, and (c) the Closing shall
not be delayed as a result of Buyer's request.
ARTICLE 4 - BUYER'S DUE DILIGENCE/CONDITION OF THE PROPERTY
Buyer acknowledges that commencing prior to the execution of this Agreement and
continuing for a period which will expire at 5:00 PM then-prevailing Eastern
Time on the tenth (10th) business day following the "Effective Date", which for
the purposes of this Agreement is the date upon which the second of Purchaser
and Seller shall execute this Agreement, (the "Due Diligence Period"), Buyer may
continue to conduct, its financial due diligence of and review of title to the
Property. Buyer acknowledges that it has been afforded the opportunity to
conduct examinations, inspections, testing, studies and/or investigations
(herein collectively called the "Due Diligence") of the Property and information
regarding the Property prior to the Execution Date and has completed same, but
for financial due diligence and title review. If Buyer is not satisfied with the
results of its Due Diligence, Buyer may terminate this Agreement by written
notice to Seller given in accordance with the provisions of Section 14.9 hereof
on or before the
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last day of the Due Diligence Period, and, in the event of such termination,
neither Seller nor Buyer shall have any liability hereunder except for those
obligations which expressly survive the termination of this Agreement and Buyer
shall be entitled to the return of the Deposit. In the event Buyer fails to
terminate this Agreement on or before the last day of the Due Diligence Period,
Buyer shall be deemed to have waived its rights to terminate this Agreement in
accordance with this Article 4. Buyer and Seller each acknowledge and agree that
Buyer shall have no additional period after the expiration of the Due Diligence
Period to conduct further physical Due Diligence regarding the Property. At
Closing and as a material inducement for Seller to consummate the Transaction,
Buyer will deliver a certification in the form of Exhibit F attached hereto and
incorporated herein by this reference.
ARTICLE 5 - ADJUSTMENTS AND PRORATIONS
The following adjustments and prorations shall be made at Closing:
5.1 Lease Rentals and Expenses.
5.1.1 Rents. All collected rents and other payments from tenants
under the Leases shall be prorated between Seller and Buyer as
of the Closing Date. Seller shall be entitled to all rents
(including any percentage rent, additional rent and any
accrued tax and operating expense reimbursements and
escalations), charges, and other revenue of any kind
attributable to any period under the Leases to but not
including the Closing Date. Buyer shall be entitled to all
rents (including any percentage rent, additional rent and any
accrued tax and operating expense reimbursements and
escalations), charges and other revenue of any kind
attributable to any period under the Leases on and after the
Closing Date. Rents and expense escalations or other
reimbursements due Landlord under the Leases not collected as
of the Closing Date shall not be prorated at the time of
Closing, but Buyer shall make a good faith effort to collect
the same on Seller's behalf and to tender the same to Seller
upon receipt (which obligation of Buyer shall survive the
Closing and not be merged therein); provided, however, that
all rents, escalations and other reimbursements due landlord
under the Leases collected by Buyer on or after the Closing
Date shall first be applied to all amounts due under the
Leases at the time of collection (i.e., current rents and sums
due Buyer as the current owner and landlord) with the balance
(if any) payable to Seller, but only to the extent of amounts
delinquent and actually due Seller. Buyer shall not have an
exclusive right to collect the sums due Seller under the
Leases and Seller hereby retains its rights to pursue any
tenant under the Leases for sums due Seller for periods
attributable to Seller's ownership of the Property.
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Seller's rights under the immediately preceding sentence shall
survive the Closing and not be merged therein. Buyer shall
receive a credit against the Purchase Price for prepaid
rentals held by Seller covering the period post-Closing.
5.1.2 Lease Expenses. At Closing, Buyer shall reimburse Seller for
the Lease Expenses (as defined in Section 13.2) to the extent
required by the terms of Section 13.2. All Lease Expenses
arising out of or attributable to the initial term of Leases
executed prior to the Effective Date or renewals or expansions
of existing Leases executed prior to the Effective Date shall,
notwithstanding any language to the contrary in Article 5 or
Article 13, be borne and payable by Seller, including, without
limitation, all Lease Expenses due on account of leases,
renewals, extensions or expansions of (i) Diagnostic Retrieval
Services, (ii) Integrated Communications, (iii) Fujitsu, (iv)
Kelley Drye & Warren and (v) Coopers & Lybrand.
5.2 Real Estate and Personal Property Taxes. Real estate and personal
property taxes shall be prorated on a cash basis for the calendar
year in which the Closing occurs, regardless of the year for which
such taxes are assessed. Such proration shall be calculated based
upon the actual number of days in such calendar year, with Seller
being responsible for that portion of such calendar year occurring
prior to midnight of the day prior to the Closing Date and Buyer
being responsible for that portion of such calendar year occurring
after 12:01 a.m. of the Closing Date. If the real estate and/or
personal property tax rate and assessments have not been set for the
calendar year in which the Closing occurs, then the proration of
such taxes shall be based upon the rate and assessments for the
preceding calendar year, and such proration shall be adjusted
post-closing between Seller and Buyer upon presentation of written
evidence that the actual taxes paid for the calendar year in which
the Closing occurs differ from the amounts used at Closing and in
accordance with the provisions of Section 5.7. This obligation shall
survive Closing and shall not be merged into the Deed.
Seller shall pay all installments of special assessments due and
payable prior to the Closing Date and Buyer shall pay all
installments of special assessments due and payable on and after the
Closing Date; provided, however, that Seller shall not be
responsible for any installments of special assessments which have
not been confirmed or which relate to projects that have not been
completed on the date hereof. Notwithstanding the foregoing terms of
this Section, Seller shall have no obligation to pay (and Buyer
shall not receive a credit at Closing for) any real estate or
personal property taxes or special assessments to the extent that
Buyer is entitled after Closing to reimbursement of taxes and
assessments, or the recovery of any increase in taxes and
assessments, from the tenants under the Leases,
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regardless of whether Buyer actually collects such reimbursement or
increased taxes and assessments from such tenants, it being
understood and agreed by Buyer and Seller that the burden of
collecting such reimbursements shall be solely on Buyer.
5.3 Other Property Operating Expenses. Operating expenses for the
Property shall be prorated as of midnight of the day prior to the
Closing Date. Seller shall pay all utility charges and other
operating expenses attributable to the Property to, but not
including the Closing Date (except for those utility charges and
operating expenses payable by tenants in accordance with the Leases)
and Buyer shall pay all utility charges and other operating expenses
attributable to the Property on or after the Closing Date. To the
extent that the amount of actual consumption of any utility services
is not determined prior to the Closing Date, a proration shall be
made at Closing based on the last available reading and post-closing
adjustments between Buyer and Seller shall be made within twenty
(20) days of the date that actual consumption for such pre-closing
period is determined, which obligation shall survive the Closing and
shall not be merged therein. Seller shall not assign to Buyer any
deposits which Seller has with any of the utility services or
companies servicing the Property. Buyer shall arrange with such
services and companies to have accounts opened in Buyer's name
beginning at 12:01 a.m. on the Closing Date. Notwithstanding the
foregoing terms of this Section, Seller shall have no obligation to
pay (and Buyer shall not receive a credit at Closing for) any
operating expenses to the extent that Buyer is entitled after
Closing to reimbursement of operating expenses, or the recovery of
any increase in operating expenses, from the tenants under the
Leases, regardless of whether Buyer actually collects such
reimbursement or increased operating expenses from such tenants, it
being understood and agreed by Buyer and Seller that the burden of
collecting such reimbursements shall be solely on Buyer.
5.4 Closing Costs. Buyer shall pay all premiums and charges of the Title
Company for the Owner's Title Policy (including endorsements) to be
issued pursuant to the Title Report, the cost of any survey obtained
by Buyer, all recording and filing charges in connection with the
instrument by which Seller conveys the Property, one-half (1/2) of
all escrow or closing charges, if any, all costs of Buyer's Due
Diligence and any other costs customarily paid by the Buyer pursuant
to local practice. Seller shall pay one-half (1/2) of all escrow or
closing charges and all transfer taxes and similar charges, if any,
applicable to the transfer of the Property to Buyer and any other
costs customarily paid by the Seller pursuant to local practice.
Except as otherwise agreed by the parties, each party shall pay its
own attorneys. The obligations of the parties to pay applicable
escrow or closing charges shall survive the termination of this
Agreement.
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5.5 Cash Security Deposits. At Closing, Seller shall give Buyer a credit
against the Balance in the aggregate amount of $43,284.11, the
unapplied cash security deposits held by Seller under the Leases as
of the Effective Date(but not including any interest thereon) less
any applications of such deposits which shall have been approved by
Buyer and any normal and customary administrative or similar charges
to which Seller may be entitled under applicable law.
5.6 Apportionment Credit. In the event the apportionments to be made at
the Closing result in a credit balance (i) to Buyer, such sum shall
be paid at the Closing by giving Buyer a credit against the Balance
in the amount of such credit balance, or (ii) to Seller, Buyer shall
pay the amount thereof to Seller at the Closing by wire transfer of
immediately available funds to the account or accounts to be
designated by Seller for the payment of the Balance.
5.7 Delayed Adjustment. If at any time following the Closing Date, the
amount of an item listed in any section of this Article 5 shall
prove to be incorrect (whether as a result of an error in
calculation or a lack of complete and accurate information as of the
Closing), the party in whose favor the error was made shall promptly
pay to the other party the sum necessary to correct such error upon
receipt of proof of such error, provided that such proof is
delivered to the party from whom payment is requested on or before
one hundred twenty (120) days after Closing, or in accordance with
Section 9.3.3 as to the matters discussed in 9.3.3.. The provisions
of this Section 5.7 shall survive the Closing and not be merged
therein.
ARTICLE 6 - CLOSING
Buyer and Seller hereby agree that the Transaction shall be consummated as
follows:
6.1 Closing Date. This Transaction shall close ("Closing") on the date
(the "Closing Date") which is fifteen (15) business days following
the expiration of the Due Diligence Period. Closing may, at Seller's
election, be either by a so-called "New York style" closing or
through an escrow with the Title Company. The Closing shall take
place at 10:00 a.m. then-prevailing Eastern Time in the offices of
Seller's attorneys or, at Seller's election, at the Title Company,
and Buyer and Seller shall conduct a "pre-closing" on the last
business day prior to the Closing Date with title transfer and
payment of the Purchase Price to be completed on the Closing Date as
set forth in Section 6.2. Time is of the essence with respect to
payment of the Purchase Price and to the Closing Date.
6.2 Title Transfer and Payment of Purchase Price. Provided all
conditions precedent to Seller's obligations hereunder have been
satisfied, Seller agrees to convey title to the Real Property to
Buyer by Bargain & Sale Deed with Covenant Against
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Grantor's Acts upon confirmation of receipt of the Purchase Price by
the Escrow Agent as set forth below. Provided all conditions
precedent to Buyer's obligations hereunder have been satisfied,
Buyer agrees to deliver the payment specified in Section 2.2 by
timely delivering the same to the Escrow Agent no later than 11:00
a.m. then-prevailing Eastern Time on the Closing Date and
unconditionally directing the Escrow Agent to deposit the same in
Seller's designated account by 1:00 p.m. Eastern Time on the Closing
Date. For each full or partial day after the Closing Date that
Seller has not received in its account the payment specified in
Section 2.2, Buyer shall pay to Seller one (1) day's interest on the
unpaid funds at the rate per annum equal to the "prime" lending rate
of interest then in effect as listed by The Wall Street Journal.
6.3 Seller's Closing Deliveries. At the Closing, Seller shall
deliver or cause to be delivered to the Escrow Agent the following:
(a) Deed. A deed in the form specified in paragraph 6.2, and
Exhibit G attached hereto and incorporated herein by this
reference, conveying to Buyer all of Seller's right, title and
interest in and to the Real Property, subject only to the
Permitted Exceptions ("Deed").
(b) Bill of Sale. A quitclaim bill of sale in the form of Exhibit
H attached hereto and incorporated herein by this reference
conveying all of Seller's right, title and interest in and to
the Personal Property.
(c) Assignment of Tenant Leases. An assignment and assumption of
tenant leases, in the form of Exhibit I attached hereto and
incorporated herein by this reference ("Assignment of Leases")
transferring all of Seller's interest in the tenant space
leases for the tenants identified on Exhibit J attached hereto
and incorporated herein by this reference (as updated at
Closing)and any amendments, guarantees and other documents
relating thereto (herein collectively called the "Leases"),
together with all assignable non-cash security deposits
deposited by the tenants thereunder and not applied by Seller
in accordance with the terms of the Leases.
(d) Assignment of Equipment Leases, Commission Agreements and
Service Contracts. An assignment and assumption of the
equipment leases, commission agreements, service contracts,
and other contracts and agreements described on Exhibit B,
warranties and guaranties and the Other Property (to the
extent the same are not transferred by the Deed, Bill of Sale
or Assignment of Leases) in the form of Exhibit K attached
hereto and incorporated herein by this reference ("Assignment
of Contracts"), transferring, to the extent assignable,
without liability or
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expense to Seller, all of Seller's interest in the equipment
leases and any lease commission agreements in effect at the
Property on the Closing Date, all uncanceled service contracts
encumbering the Property on the Closing Date, all warranties
and guaranties which remain in effect on the Closing Date and
any Other Property Rights not otherwise transferred to Buyer
(all of the foregoing being herein collectively called the
"Contracts"). Seller shall not assign any existing management
agreement or any contracts or policies of insurance for the
Property.
(e) Estoppel Letters. Executed estoppel letters from (a) each of
those tenants identified on Exhibit L-1 attached hereto and
incorporated herein by this reference as "Major Tenants" (the
"Major Tenants"), and (b) other tenants collectively occupying
no less than sixty percent (60 %) of the area leased under the
Leases (excluding the area leased under the Leases with the
Major Tenants) and which are obligated under their respective
Leases to deliver such letters to the landlord (the "Other
Tenants").All of such estoppel letters shall be substantially
in the form which such Major Tenant or Other Tenant is
required to provide pursuant to the terms of such Major
Tenant's or Other Tenant's Lease or, if no form is specified
in any of the Leases, in the form of Exhibit L-2 attached
hereto and incorporated herein by this reference. In the event
Seller cannot for any reason obtain a tenant estoppel letter
from any of the Other Tenants, Seller, at its option, may
deliver to Buyer a Seller's (landlord) estoppel letter in the
form specified in the preceding sentence. If Seller shall
obtain an estoppel certificate from any such tenant after
delivery of such Seller's estoppel letter with respect to such
tenant, Seller's (landlord) estoppel letter shall, as of the
date of such tenant's estoppel letter, be without further
force or effect. Seller shall have no liability or
responsibility for the information set forth in the Tenant
Estoppel Letters delivered by the Tenants.
(f) Notice to Tenants. A single form letter in the form of Exhibit
M attached hereto and incorporated herein by this reference to
each tenant under the Leases, duplicate copies of which would
be sent notifying it of the sale of the Property to Buyer and
advising it that all future payments of rent and other
payments due under the Leases, are to be made to Buyer at an
address designated by Buyer.
(g) Non-Foreign Status Affidavit. A non-foreign status affidavit
in the form of Exhibit N attached hereto and incorporated
herein by this reference, as required by Section 1445 of the
Internal Revenue Code.
(h) Evidence of Authority. Evidence of the approval of the Manager
of Seller
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with respect to the authority to act on behalf of Seller.
(i) Seller's Certificate. The certificate of Seller certifying to
the matters set forth in Section 8.2.
(j) Property Documents. (i) To the extent in the possession of
Seller or the current manager of the Property, (A) the
original (or, if unavailable, a copy) of the existing
certificate or certificates of occupancy for the Property, and
(B) all original (or, if unavailable, copies of) certificates,
licenses, permits, authorizations and approvals issued for or
with respect to the Property by governmental and
quasi-governmental authorities having jurisdiction; and (ii)
all non-proprietary books and records located at the Property
or at the off ice of Seller's building manager relating to the
Property and the ownership and operation thereof (the items
described in clauses (i) and (ii) being herein collectively
called the "Property Documents").
(k) Other Documents. Such other documents as may be reasonably
required by the Title Company or as may be agreed upon by
Seller and Buyer to consummate the Transaction.
(1) Letters of Credit as Tenant Security Deposits. With respect to
any security deposits which are letters of credit, Seller
shall, if the same are assignable, (i) deliver to Buyer at the
Closing such letters of credit,(ii) execute and deliver such
other instruments as the issuers of such letters of credit
shall reasonably require, and (iii) cooperate with Buyer to
change the named beneficiary under such letters of credit to
Buyer so long as Seller does not incur any additional
liability or expense in connection therewith. Notwithstanding
the foregoing to the contrary, Seller can complete after
Closing the requirements of this Section 6.3(1) not completed
thereby, at which point the obligations under this Section
6.3(1) shall survive Closing and not merge into the Deed. If
letters of credit are not assignable, Seller shall undertake
the obligation to obtain a new letter of credit from such
tenant for the benefit of Buyer.
(m) Keys and Original Documents. Keys to all locks on the Real
Property (in Seller's or Seller's building manager's
possession) and originals or, if originals are not available,
copies, of the Leases and Contracts (unless canceled as set
forth herein) encumbering the Property on the Closing Date.
(n) Transfer Taxes. If applicable, duly completed and signed real
estate
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transfer tax returns.
(o) ISRA. Seller agrees to cooperate (but at no cost or expense to
it) with Buyer in Buyer's applications for a New Jersey ISRA
letter of non-applicability, which application shall be
prepared and diligently prosecuted by Buyer at its sole cost.
(p) Assignment of Rights (as defined in Section 8.3.2) in the form
set forth on Exhibit C.
6.4 Buyer Closing Deliveries. At the Closing, Buyer shall deliver or
cause to be delivered to the Escrow Agent the following:
(a) Balance. The Balance, as adjusted for apportionments and other
adjustments required under this Agreement, plus any other
amounts required to be paid by Buyer at Closing.
(b) Assignment of Leases. The Assignment of Leases executed and
acknowledged by Buyer.
(c) Assignment of Equipment Leases, Commission Agreements and
Service Contracts. The Assignment of Contracts executed and
acknowledged by Buyer.
(d) Buyer's Certificates. The certificate of Buyer required under
Article 4 hereof and a certificate of Buyer certifying as to
the matters set forth in Section 8.1.
(e) Buyer's ERISA Certificate. The certificate of Buyer
substantially in the form of Exhibit O attached hereto and
incorporated herein by this reference and any other
certificate or other information reasonably required by Seller
to satisfy Seller that the Transaction does not constitute a
non-exempt prohibited transaction under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")
and that the Transaction complies with ERISA in all respects.
(f) Evidence of Authority. Documentation to establish to Seller's
reasonable satisfaction the due authorization of Buyer's
acquisition of the Property and Buyer's delivery of the
documents required to be delivered by Buyer pursuant to this
Agreement, including, but not limited to, the organizational
documents of Buyer, as they may have been amended from time to
time, resolutions of Buyer and incumbency certificates of
Buyer.
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(g) Other Documents. Such other documents as may be reasonably
required by the Title Company or may be agreed upon by Seller
and Buyer to consummate the Transaction.
(h) Transfer Taxes. If applicable, duly completed and signed real
estate transfer tax returns.
6.5 Delivery of Deed. Effective upon delivery of the Deed, actual and
exclusive possession (subject only to the Permitted Exceptions) and
risk of loss to the Property shall pass from Seller to Buyer.
ARTICLE 7 - CONDITIONS TO CLOSING
7.1 Seller's Obligations. Seller's obligation to close the Transaction
is conditioned on all of the following, any or all of which may be
waived by Seller by an express written waiver, at its sole option:
(a) Approval. (Intentionally Deleted);
(b) Representations True. Subject to the provisions of Section 8.3
hereof, all representations and warranties made by Buyer in
this Agreement shall be true and correct in all material
respects on and as of the Closing Date, as if made on and as
of such date except to the extent they expressly relate to an
earlier date;
(c) Buyer's Financial Condition. (Intentionally Omitted); and
(d) Buyer's Deliveries Complete. Buyer shall have delivered the
funds required hereunder and all of the documents to be
executed by Buyer set forth in Section 6.4 and shall have
performed all other covenants, undertakings and obligations,
and complied with all conditions required by this Agreement,
to be performed or complied with by Buyer at or prior to the
Closing.
(e) Rights of First Refusal or First Negotiation. Notwithstanding
any other provision of this Agreement to the contrary, Seller
shall not be obligated to Close hereunder unless, by the
Closing Date, it shall either (x) have obtained satisfactory
releases, waivers or declinations, as the case may be, from
two parties, namely, Coopers & Lybrand and Dun & Bradstreet
(or their successors) which may possess rights of first
negotiation or rights of first refusal, as the case may be, to
purchase the Property or part of the
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Property, or (y) have concluded that no such rights currently
exist or if they do exist have been waived, released or
terminated by estoppel. (See Section 2.1 for a discussion of
certain rights of first refusal held by Chase Manhattan as to
the Bank Property.)
(f) Litigation. No litigation shall be pending or threatened
against Seller which, if decided adversely to Seller, could
delay, threaten or stop the transactions contemplated by this
Agreement from being effected.
7.2 Buyer's Obligations. Buyer's obligation to close the Transaction is
conditioned on all of the following, any or all of which may be
expressly waived by Buyer in writing, at its sole option:
(a) Representations True. Subject to the provisions of Section
8.3, all representations and warranties made by Seller in this
Agreement, as the same may be amended as provided in Section
8.3, shall be true and correct in all material respects on and
as of the Closing Date, as if made on and as of such date
except to the extent that they expressly relate to an earlier
date;
(b) Title Conditions Satisfied. At the time of the Closing, title
to the Property shall be as provided in Article 3 of this
Agreement; and
(c) Seller's Deliveries Complete. Seller shall have delivered all
of the documents and other items required pursuant to Section
6.3 and shall have performed all other covenants, undertakings
and obligations, and complied with all conditions required by
this Agreement, to be performed or complied with by Seller at
or prior to the Closing.
(d) Rights of First Refusal or First Negotiation. Buyer shall not
be obligated to Close hereunder unless, by the Closing date,
in the case of Dun & Bradstreet and Coopers & Lybrand, Buyer
shall have concurred with Seller's conclusion that such rights
of first refusal or first negotiation which they or either or
them may have had have been terminated or waived or terminated
by estoppel, as the case may be. (See Section 2.1 as to
certain rights of first refusal held by Chase Manhattan as to
the Bank Property.)
7.3 Waiver of Failure of Conditions Precedent. At any time or times on
or before the date specified for the satisfaction of any condition,
Buyer or Seller may elect in writing to waive the benefit of any
such condition set forth in Section 7.1 or Section 7.2,
respectively. By closing the Transaction, Buyer shall be
conclusively
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deemed to have waived the benefit of any remaining unfulfilled
conditions set forth in Section 7.2. In the event any of the
conditions set forth in Sections 7.1 or 7.2 are neither waived nor
fulfilled, Buyer or Seller (as appropriate) may terminate their
obligations to perform at the Closing and otherwise under this
Agreement in accordance with the provisions of Article 10.
ARTICLE 8 - REPRESENTATIONS AND WARRANTIES
8.1 Buyer's Representations. Buyer represents and warrants to, and
covenants with, Seller as follows:
8.1.1 Buyer's Authorization. Buyer is duly organized (or formed),
validly existing and in good standing under the laws of its
State of organization and the State in which the Property is
located, and is authorized to consummate the Transaction and
fulfill all of its obligations hereunder and under all
documents contemplated hereunder to be executed by Buyer and
has all necessary power and capacity to execute and deliver
this Agreement and all documents contemplated hereunder to be
executed by Buyer, and to perform all of its obligations
hereunder and thereunder. This Agreement and all documents
contemplated hereunder to be executed by Buyer, have been duly
authorized by all requisite partnership or corporate action on
the part of Buyer and are the valid and legally binding
obligation of Buyer, enforceable in accordance with their
respective terms. Neither the execution and delivery of this
Agreement and all documents contemplated hereunder to be
executed by Buyer, nor the performance of the obligations of
Buyer hereunder or thereunder will result in the violation of
any law or any provision of the agreement of partnership or
articles of incorporation and by-laws of Buyer or will
conflict with any order or decree of any court or governmental
instrumentality of any nature by which Buyer is bound.
8.1.2 Buyer's Financial Condition. Buyer's financial condition is as
is represented to Seller on any financial statements
previously submitted to Seller by Buyer.
8.2 Seller's Representations. Seller represents and warrants to Buyer as
follows:
8.2.1 Seller's Authorization. Seller is (a) duly organized, validly
existing and in good standing under the laws of its State of
organization and the State in which the Property is located,
(b) subject to obtaining the approvals or waivers, as the case
may be, described in Subsection 7.1(a) and (e), is
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authorized to consummate the Transaction and fulfill all of
its obligations hereunder and under all documents contemplated
hereunder to be executed by Seller, and (c) has all necessary
power to execute and deliver this Agreement and all documents
contemplated hereunder to be executed by Seller and to perform
its obligations hereunder and thereunder. Subject to obtaining
the approvals described in Subsection 7.1(a), this Agreement
and all documents contemplated hereunder to be executed by
Seller have been duly authorized by all requisite action on
the part of Seller and are the valid and legally binding
obligation of Seller enforceable in accordance with their
respective terms. To the best of Seller's knowledge, neither
the execution and delivery of this Agreement and all documents
contemplated hereunder to be executed by Seller nor the
performance of the obligations of Seller hereunder or
thereunder will result in the violation of any law or any
provision of the operating agreement of Seller or will
conflict with any order or decree of any court or governmental
instrumentality of any nature by which Seller is bound.
8.2.2 Other Seller's Representations. To the best of Seller's
knowledge (as such term is hereinafter defined):
(a) Except as set forth in the Title Report and, to the
extent reviewed by or otherwise available to Buyer, the
documents, investigations or notices delivered to or
otherwise received by Buyer, and as listed in Exhibit P
attached hereto and incorporated herein by this
reference, Seller has not received any written notice of
pending litigation against Seller which, if determined
adversely to Seller, would adversely affect the
Property.
(b) As of the date of this Agreement, Seller has not entered
into any commission agreements, equipment leases,
service, supply, maintenance, union or utility contracts
affecting the Property which will be binding upon Buyer
after the Closing other than the Contracts listed in
Exhibit B attached hereto, provided, however, Exhibit B
may change prior to Closing as new Contracts are
executed by Seller, as set forth in Section 9.2.1
herein.
(c) Seller has not received any written notice of default
under the terms of any of the Contracts except as listed
in Exhibit P attached hereto.
(d) As of the date of this Agreement, the only tenants of
the Property are the tenants listed in Exhibit J
attached hereto and incorporated
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herein by this reference. Exhibit J may change prior to
Closing, however, should permitted new leases be
executed, as provided in Article 13 of this Agreement,
prior to Closing.
(e) Except as listed in Exhibit P attached hereto or
disclosed in any report or writing delivered to Buyer
from Seller, Seller has not received any written notice
from any governmental authority of any violation of any
zoning, building, fire, or health code, statute,
ordinance, rule or regulation applicable to the
Property. Buyer understands and Seller acknowledges that
Buyer will investigate and satisfy itself with regard to
the environmental condition of the Property and the
presence or absence of Hazardous Materials during its
Due Diligence Period. Seller agrees that it shall
provide Buyer with true copies of any notices it may
receive from and after the Effective Date through and
until the Closing Date of any notices it receives
relating to the environmental condition of the Property
or Hazardous Materials in, at, under or about the
Property.
(f) Seller is not a "foreign person", "foreign partnership",
nor a "foreign corporation" as those terms are defined
in Section 7701 of the Internal Revenue Code of 1986, as
amended.
(g) To the best of Seller's knowledge, no condemnation
proceedings relating to the Real Property are pending or
threatened with regard to the Property.
(h) To the best of Seller's knowledge, Seller has not
received any notice from any insurance company or board
of fire underwriters of any defects or inadequacies in,
on, or about the Property, or any part of component
thereof which would adversely affect the insurability of
the Property or cause an increase in the premiums for
the Property which have not been cured or resolved.
(i) To the best of Seller's knowledge, during the period
between April, 1995, and October, 1997, no spill or
discharge of Hazardous Materials occurred in, on, under
of about the Property. And since October, 1997. no spill
of discharge of Hazardous Materials has occurred in, on,
under or about the Property.
(j) Seller has delivered to Purchaser true, complete and
correct copies of all (1) Leases set forth on Exhibit J;
(2) Contracts set forth on
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Exhibit B; (3) other documents referred to on Exhibits
to this Agreement.
(k) Seller has not delivered or received a notice of default
pursuant to any of the Leases.
8.3 General Provisions.
8.3.1 No Representation As to Leases. Seller does not represent or
warrant that any particular Lease or Leases will be in force
or effect on the Closing Date or that the tenants will have
performed their obligations thereunder.
8.3.2 Definition of "Seller's Knowledge". All references in this
Agreement to "Seller's knowledge" or words of similar import
shall refer only to the actual knowledge of William N.
Cinnamond, and James Rosasco (together, the "Designated
Employee"). Mr. Rosasco was a Vice President of J. P. Morgan
Investment Management Inc.("Morgan"), Seller's investment
manager for the Property. Mr. Rosasco had primary
responsibility for managing and overseeing the Property from
the time it was acquired by Seller until his retirement from
Morgan in June, 1997. Mr. Cinnamond is a Vice President of
Morgan who succeeded to the position formerly held by Mr.
Rosasco. Neither of them reported or reports to any other
person at Morgan with respect to operations of the Property.
Seller's knowledge shall not be construed to refer to the
knowledge of any other officer, agent or employee of Seller,
Morgan or any affiliate thereof or to impose or have imposed
upon the Designated Employee any duty to investigate the
matters to which such knowledge, or the absence thereof,
pertains, including, but not limited to, the contents of the
files, documents and materials made available to or disclosed
to Buyer or the contents of files maintained by the Designated
Employee. There shall be no personal liability on the part of
the Designated Employee arising out of any representations or
warranties made herein. Furthermore, at Closing, Seller shall
quitclaim and assign to Buyer, to the extent same are
assignable, any rights and choses in action which Seller may
have against Gale & Wentworth, Inc. ("Assignment of Rights")
arising out of Gale & Wentworth's failure to disclose to
Seller happenings, conditions, facts or events on or about the
Property which, had the disclosures been made to Seller or the
Designated Employee, would have caused Seller to make
representations and warranties different from those made
herein.
8.3.3 Seller's Representations Deemed Modified. To the extent that
Buyer knows or by virtue of information contained in the
materials delivered to
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Buyer by Seller, or otherwise, is deemed to know prior to the
expiration of the Due Diligence Period that Seller's
representations and warranties are inaccurate, untrue or
incorrect in any way, such representations and warranties
shall be deemed modified to reflect Buyer's knowledge or
deemed knowledge, as the case may be. For purposes of this
Agreement, Buyer shall be "deemed to know" that a
representation or warranty was untrue, inaccurate or incorrect
to the extent that David Parisier or John R. Cali have or had
actual knowledge of the untruth, inaccuracy or incorrectness
of such representation(s) and/or warranty(s) contained in this
Agreement or in the documents delivered by Seller, any
estoppel certificate executed by any tenant of the Property
and delivered to Buyer, or any studies, tests, reports, or
analyses prepared by or for Buyer or any of its employees,
agents, representatives or attorneys engaged in effecting the
purchase contemplated by this Agreement (all of the foregoing
being herein collectively called the "Buyer's
Representatives") or otherwise obtained by Buyer or Buyer's
Representatives contains information which is materially
inconsistent with any such representation or warranty.
8.3.4 Notice of Breach; Seller's Right to Cure. If after the
Effective Date, but prior to the Closing, Buyer or any Buyer's
Representative obtains actual knowledge that any of the
representations or warranties made herein by Seller are
untrue, inaccurate or incorrect in any material respect, Buyer
shall give Seller written notice thereof within five (5)
business days of obtaining such knowledge (but, in any event,
prior to the Closing). If at or prior to the Closing, Seller
obtains knowledge that any of the representations or
warranties made herein by Seller are untrue, inaccurate or
incorrect in any material respect, Seller shall give Buyer
written notice thereof within five (5) business days of
obtaining such knowledge (but, in any event, prior to the
Closing). In either such event, Seller shall have the right,
but not the obligation, to cure such misrepresentation or
breach and shall be entitled to a reasonable adjournment of
the Closing, not to exceed ninety (90) days) for the purpose
of such cure. If Seller is unable or unwilling to so cure any
misrepresentation or breach, then Buyer, as its sole remedy
for any and all such materially untrue, inaccurate or
incorrect material representations or warranties, shall elect
either (a) to waive such misrepresentations or breaches of
warranties and consummate the Transaction without any
reduction of or credit against the Purchase Price, or (b) to
terminate this Agreement by written notice given to Seller on
the Closing Date, in which event this Agreement shall be
terminated, the Deposit shall be returned to Buyer and,
thereafter, neither party shall have any further rights or
obligations hereunder except as provided in any section hereof
that by its terms expressly provides that it survives any
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termination of this Agreement. If any such representation or
warranty is untrue, inaccurate or incorrect but is not untrue,
inaccurate or incorrect in any material respect, Buyer shall
be deemed to waive such misrepresentation or breach of
warranty, and Buyer shall be required to consummate the
Transaction without any reuction of or credit against the
Purchase Price, or any right to receive reimbursement from
Seller on account of the misrepresentation or breached
warranty, as the case may be. The untruth, inaccuracy or
incorrectness of a representation or warranty shall be deemed
material only if Buyer's aggregate damages resulting from the
untruth, inaccuracy or incorrectness of any of the
representations or warranties are reasonably estimated by
Buyer to exceed $250,000.00.
8.3.5 Survival; Limitation on Seller's Liability. The
representations and warranties made by Seller in Section 8.2
shall survive the Closing and not be merged therein for a
period of one hundred twenty (120) days and Seller shall only
be liable to Buyer hereunder for a breach of a representation
and warranty made herein or in any of the documents executed
by Seller at the Closing with respect to which a claim is made
by Buyer against Seller on or before the one hundred twentieth
(120th) day after the date of the Closing. Anything in this
Agreement to the contrary notwithstanding, the maximum
aggregate liability of Seller for Seller's breaches of
representations and warranties herein or in any documents
executed by Seller at Closing shall be limited to the lesser
of (i) the amount awarded for actual damages (not
consequential or treble) directly attributable to a material
breach of a representation or warranty by Seller or (ii) the
Maximum Amount (as defined in Section 14.16 hereof).
Notwithstanding the foregoing, however, if the Closing occurs,
Buyer hereby expressly waives, relinquishes and releases any
right or remedy available to it at law, in equity or under
this Agreement to make a claim against Seller for damages that
Buyer may incur, or to rescind this Agreement and the
Transaction, as the result of any of Seller's representations
or warranties being untrue, inaccurate or incorrect if (a)
Buyer knew or is deemed to know that such representation or
warranty was untrue, in-accurate or incorrect at the time of
the Closing, or (b) Buyer's damages as a result of such
representations or warranties being untrue, inaccurate or
incorrect are reasonably estimated to aggregate less than
$250,000.00 (inclusive of damages for pre-Closing beaches of
representations or warranties).
ARTICLE 9 - COVENANTS
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9.1 Buyer's Covenants. Buyer hereby covenants as follows:
9.1.1 Confidentiality. Buyer acknowledges that any information
furnished to Buyer with respect to the Property is and has
been so furnished on the condition that Buyer maintain the
confidentiality thereof. Accordingly, Buyer shall hold, and
shall cause its directors, officers and other personnel and
representatives to hold, in strict confidence, and not
disclose to any other person 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 or
for the benefit of Buyer whether by agents, consultants,
employees or representatives of Buyer or by Seller or any of
its agents, representatives or employees, including, but not
limited to, any information obtained by Buyer or any of
Buyer's Representatives in connection with any studies,
inspections, tests or analyses conducted by Buyer as part of
its Due Diligence. In the event the Closing does not occur and
this Agreement is terminated, Buyer shall promptly return to
Seller all copies of documents containing any of such
information without retaining any copy thereof or extract
therefrom. Notwithstanding anything to the contrary
hereinabove set forth, Buyer may disclose such information (i)
on a need-to-know basis to its employees or members of
professional firms serving it, and (ii) as any governmental
agency may require in order to comply with applicable laws or
regulations. The provisions of this Subsection 9.1.1 shall
survive the Closing (and not be merged therein) or earlier
termination of this Agreement.
9.1.2 Approvals not a Condition to Buyer's Performance. Buyer
acknowledges and agrees that its obligation to perform under
this Agreement is not contingent upon Buyer's ability to
obtain any (a) governmental or quasi-governmental approval of
changes or modifications in use or zoning, or (b) modification
of any existing land use restriction, or (c) consents to
assignments of any service contracts, management agreements or
other agreements which Buyer requests, or (d) endorsements to
the Title Policy.
9.1.3 Buyer's Indemnity; Delivery of Reports. Buyer hereby agrees to
indemnify, defend, and hold Seller and its officers,
directors, employees, agents, attorneys, counsel, broker,
investment manager, or any other party related in any way to
any of the foregoing (collectively, the "Seller Parties"),
each of the other Seller Parties and the Property free and
harmless from and against any and all costs, loss, damages and
expenses, of any kind or nature whatsoever (including
attorneys fees and costs), arising out of or resulting from
the entry and/or the conduct of activities
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upon the Property by Buyer, its agents, contractors and/or
subcontractors in connection with the inspections,
examinations, tests and investigations of the Property
conducted at any time prior to the Closing, which indemnity
shall survive the Closing (and not be merged therein) or any
earlier termination of this Agreement. Buyer shall deliver
promptly to Seller copies of all third party reports
commissioned by Buyer evidencing the results of tests, studies
or inspections of the Property.
9.1.4 Limit on Government Contacts. Notwithstanding any provision in
this Agreement to the contrary, except in connection with the
preparation of a so-called "Phase I" environmental report with
respect to the Property, Buyer shall not contact any
governmental official or representative regarding Hazardous
Materials on or the environmental condition of the Property
without Seller's prior written consent thereto, which consent
shall not be unreasonably withheld. In addition, if Seller's
consent is obtained by Buyer, Seller shall be entitled to
receive at least five (5) days prior written notice of the
intended contact and to have a representative present when
Buyer has any such contact with any governmental official or
representative.
9.2 Seller's Covenants. Seller hereby covenants as follows:
9.2.1 Service Contracts. Without Buyer's prior consent, which
consent shall not be unreasonably withheld, between the date
hereof and the Closing Date Seller shall not extend, renew,
replace or modify any Contract unless such contract (as so
extended, renewed, replaced or modified) can be terminated by
the owner of the Property without penalty on not more than
thirty (30) days' notice.
9.2.2 Maintenance of Property. Except to the extent Seller is
relieved of such Obligations by Article 11 hereof, between the
date hereof and the Closing Date Seller shall maintain and
keep the Property in a manner consistent with Seller's past
practices with respect to the Property; provided, however,
that Buyer hereby agrees that it shall accept the Property
subject to, and Seller shall have no obligation to cure, (i)
all violations of law or municipal ordinances, orders or
requirements and (ii) all physical conditions which would give
rise to violations existing, which, with respect to both
clauses (i) and (ii), exist on the last day of the Due
Diligence Period or which arise between the last day of the
Due Diligence Period and the Closing Date. Between the date
hereof and the Closing Date, Seller will advise Buyer of any
written notice Seller receives after the date hereof from any
governmental authority relating to the violation
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of any law or ordinance regulating the condition or use of the
Property.
9.2.3 Access to Property. Between the date hereof and the expiration
of the Due Diligence Period Seller shall allow Buyer or
Buyer's representatives access to the Property upon reasonable
prior notice at reasonable times provided (a) such access does
not interfere with the operation of the Property or the rights
of tenants; (b) Buyer shall not contact any tenant without
Seller's prior written consent; (c) after the expiration of
the Due Diligence Period Buyer shall not be permitted to
perform any further testing or other physical evaluation of
the Property prior to Closing; (d) Seller or its designated
representative shall have the right to pre-approve and be
present during any physical testing of the Property; and (e)
Buyer shall return the Property to the condition existing
prior to such tests and inspections. Prior to such time as
Buyer or any of Buyer's Representatives enter the Property,
Buyer shall (i) obtain policies of general liability insurance
which name Seller as an additional insured and which are with
such insurance companies, provide such coverages and carry
such limits as Seller shall reasonably require and (ii)
provide Seller with certificates of insurance evidencing that
Buyer has obtained the aforementioned policies of insurance.
9.2.4 Other Covenants. At any time after the Closing for up to one
year thereafter, upon request by Buyer, Seller shall assist
(but at no cost to Seller) Buyer in its preparation of audited
financial statements, statements of income and expense and
such other related financial documentation as Buyer may
reasonably request, covering the period of Seller's ownership
of the Property.
9.2.5 Termination of Management Agreement. Seller agrees that it
will terminate the Management and Leasing Agreement, dated as
of May 1, 1995, between it and Gale & Wentworth, Inc., and
such termination shall be effective as of the Closing.
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9.3 Mutual Covenants.
9.3.1 Publicity. Seller and Buyer each hereby covenant that (a)
prior to the Closing neither Seller nor Buyer shall issue any
press release or public statement (a "Release") with respect
to the Transaction without the prior consent of the other,
except to the extent required by law. If either Seller or
Buyer is required by law to issue a Release, such party shall,
at least two (2) business days prior to the issuance of the
same, deliver a copy of the proposed Release to the other
party for its review. Notwithstanding the foregoing, Buyer
acknowledges that Seller and Seller's sole shareholder, the
Virginia Retirement System, are bound by the provisions of the
Virginia Freedom of Information Act and may, therefore, be
obligated to disclose the contents of this Agreement.
9.3.2 Broker. Seller and Buyer expressly acknowledge that Eastdil
Realty Company, L.L.C. ("Broker") has acted as the exclusive
broker with respect to the Transaction and with respect to
this Agreement, and that Seller shall pay any brokerage
commission due to Broker in accordance with the separate
agreement between Seller and Broker. Seller and Buyer each
represents and warrants to the other that it has not dealt
with any other broker in the Transaction and each agrees to
hold harmless the other and indemnify the other from and
against any and all damages, costs or expenses (including, but
not limited to reasonable attorneys' fees and disbursements)
suffered by the indemnified party as a result of acts of the
indemnifying party that would constitute a breach of its
representation and warranty in this section.
9.3.3 Tax Refunds and Credits. All real estate and personal property
tax refunds and credits with respect to the Property shall be
apportioned between Buyer and Seller as follows:
(a) with respect to any refunds or credits attributable to
real estate and personal property taxes due and payable
in the calendar year in which the Closing occurs
(regardless of the year for which such taxes are
assessed), such refunds and credits shall be apportioned
between Buyer and Seller in proportion to the number of
days in such calendar year that each party owned the
Property (with title to the Property being deemed to
have passed as of 12:01 a.m. on the Closing Date);
(b) with respect to any refunds or credits attributable to
real estate and personal property taxes due and payable
during any period prior to
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the calendar year in which the Closing occurs
(regardless of the year for which such taxes are
assessed), Seller shall be entitled to the entire
refunds and credits;
(c) with respect to any refunds or credits attributable to
real estate and personal property taxes due and payable
during any period after the calendar year in which the
Closing occurs (regardless of the year for which such
taxes are assessed), Buyer shall be entitled to the
entire refunds and credits; and
(d) with respect to all of the above debits and credits, as
well as the prorations made as of Closing, the parties
agree to conduct a retrospective reconciliation of same
by the end of the fourth month following Closing, to
take into account the differences, if any, between
estimates and what in fact turned out to be the precise
dollar amounts of same and to settle with one another
accordingly.
9.3.4 Survival. The provisions of this Section 9.3 shall survive the
Closing (and not be merged therein) or earlier termination of
this Agreement.
ARTICLE 10 - FAILURE OF CONDITIONS
10.1 Seller's Obligations and Remedies. If, on or before the Closing
Date, (i) Buyer is in default of any of its obligations hereunder,
or (ii) any of Buyer's material representations or warranties are
untrue in any material respect, or (iii) the Closing otherwise fails
to occur by reason of Buyer's failure or refusal to perform its
obligations hereunder in a prompt and timely manner, then Seller's
sole remedy shall be to terminate this Agreement by written notice
to Buyer and to retain the Deposit as liquidated damages, and may
request the Escrow Agent, pursuant to a written notice, executed
solely by Seller, without the joinder, consent or approval of Buyer,
to deliver the Deposit, plus all accrued interest thereon, to
Seller. Seller and Buyer acknowledge and agree that delivery of the
Deposit, including all accrued interest thereon, shall be deemed
liquidated damages for Buyer's breach of this Agreement, it being
further agreed that the actual damages to Seller in the event of
such breach or other event are impractical to ascertain and the
amount of the Deposit, plus accrued interest thereon, is a
reasonable estimate thereof. There-after, neither party to this
Agreement shall have any further rights or obligations hereunder
other than any arising under any section herein which expressly
provides that it survives the termination of this Agreement.
10.2 Buyer's Obligations and Remedies. If, prior to the Closing, (i)
Seller is in default
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of any of its material obligations hereunder and, after having
received written notice of such default from Buyer, Seller has
nevertheless failed to cure such default within a reasonable period
of time, or (ii) any of Seller's material representations or
warranties are untrue in any material respect and, after having
received written notice of such misrepresentation from Buyer, Seller
has nevertheless failed to cure same within a reasonable period of
time, or (iii) the Closing otherwise fails to occur by reason of
Seller's willful failure or refusal to perform its obligations
hereunder in a prompt and timely manner ("Seller's Closing
Default"), Buyer shall have the right, to elect, as its sole and
exclusive remedy, to (a) terminate this Agreement by written notice
to Seller, promptly after which the Deposit shall be returned to
Buyer and Buyer's actual Due Diligence and other transactional
expenses, such as, by way of example, title insurance premiums,
reasonable legal fees, etc. up to a maximum of $250,000.00 in the
aggregate and shall be reimbursed by Seller, or (b) waive the
condition(s) and proceed to close the Transaction, or (c) if Seller
has wrongfully declined to close, to seek specific enforcement of
this Agreement. Except as specifically set forth herein, Buyer shall
have no right to sue for or seek, whether at law, in equity or
otherwise, any monetary award or judgment and/or any consequential,
punitive, treble, actual, out-of-pocket, incidental or other damages
against Seller and its officer, directors, employees, investment
manager or agents, or against employees, officers, members, or
Trustees of the Seller's or its corporate member or the shareholder
of such corporate member, or any of their respective successors and
assigns all of which are hereby knowingly, voluntarily and
intentionally waived, released and discharged by Buyer.
ARTICLE 11- CONDEMNATION/CASUALTY
11.1 Condemnation.
11.1.1 Right to Terminate. If, prior to the Closing Date, all or any
significant portion (as hereinafter defined) of the Property
is taken by eminent domain (or is the subject of a pending
taking which has not yet been consummated), Seller shall
notify Buyer in writing of such fact promptly after obtaining
knowledge thereof, Buyer shall have the right to terminate
this Agreement by giving written notice to the other no later
than ten (10) days after the giving of Seller's notice, and
the Closing Date shall be extended, if necessary, to provide
sufficient time for Buyer or Seller to make such election. The
failure by Buyer to so elect in writing to terminate this
Agreement within such ten (10) day period shall be deemed an
election not to terminate this Agreement. For purposes hereof,
a "significant portion" of the Property shall mean such a
portion as shall have a value, as reasonably determined by
Seller, in excess of One Million
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Dollars ($1,000,000.00). If either party elects to terminate
this Agreement as aforesaid, the provisions of Section 11.4
shall apply.
11.1.2 Assignment of Proceeds. If (a) Buyer elects not to terminate
this Agreement as aforesaid if all or any significant portion
of the Property is taken, or if (b) a portion of the Property
not constituting a significant portion of the Property is
taken or becomes subject to a pending taking, by eminent
domain, there shall be no abatement of the Purchase Price;
provided, however, that, at the Closing, Seller shall pay to
Buyer the amount of any award for or other proceeds on account
of such taking which have been actually paid to Seller prior
to the Closing Date as a result of such taking (less all
reasonable costs and expenses, including attorneys' fees and
costs, incurred by Seller as of the Closing Date in obtaining
payment of such award or proceeds) and, to the extent such
award or proceeds have not been paid, Seller shall assign to
Buyer at the Closing (without recourse to Seller) the rights
of Seller to, and Buyer shall be entitled to receive and
retain, all awards for the taking of the Property or such
portion thereof.
11.2 Destruction or Damage. In the event any of the Property is damaged
or destroyed prior to the Closing Date, Seller shall notify Buyer in
writing of such fact promptly after obtaining knowledge thereof. If
any such damage or destruction (a) is an insured casualty and (b)
would cost less than Five Million Dollars ($5,000,000.00 ) to repair
or restore, then this Agreement shall remain in full force and
effect and Buyer shall acquire the Property upon the terms and
conditions set forth herein. In such event, Buyer shall receive a
credit against the Purchase Price equal to the deductible amount
applicable under Seller's casualty policy (less all costs and
expenses, including attorneys' fees and costs, incurred by Seller as
of the Closing Date in connection with the negotiation and/or
settlement of the casualty claim with the insurer (the "Realization
Costs")), and Seller shall assign to Buyer all of Seller's right,
title and interest in and to all proceeds of insurance on account of
such damage or destruction. In the event the Property is damaged or
destroyed prior to the Closing Date and the cost of repair would
equal or exceed Five Million Dollars ($5,000,000.00) or the casualty
is an uninsured casualty, then, notwithstanding anything to the
contrary set forth above in this section, Buyer shall have the
right, at its respective election, to terminate this Agreement.
Buyer shall have ten (10) days after Seller notifies Buyer that a
casualty has occurred to make such election by delivery to the other
of a written election notice (the "Election Notice") and the Closing
Date shall be extended, if necessary, to provide sufficient time for
Buyer to make such election. The failure by Buyer to deliver the
Election Notice within such ten (10) day period shall be deemed an
election not to terminate this Agreement. In the event neither party
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elects to terminate this Agreement as set forth above, this
Agreement shall remain in full force and effect, Seller shall assign
to Buyer all of Seller's right, title and interest in and to any and
all proceeds of insurance on account of such damage or destruction,
if any, and, if the casualty was an insured casualty, Buyer shall
receive a credit against the Purchase Price equal to the deductible
amount (less the Realization Costs) under Seller's casualty
insurance policy.
11.3 Insurance. Seller shall maintain the property insurance coverage
currently in effect for the Property until Closing.
11.4 Effect of Termination. If this Agreement is terminated pursuant to
Section 11.1 or Section 11.2, Seller shall promptly direct that the
Deposit be refunded to Buyer. Upon such refund, this Agreement shall
terminate and neither party to this Agreement shall have any further
rights or obligations hereunder other than any arising under any
section herein which expressly provides that it shall survive the
termination of this Agreement.
11.5 Waiver. The provisions of this Article 11 supersede the provisions
of any applicable statutory or decisional law with respect to the
subject matter of this Article 11.
ARTICLE 12 - ESCROW
The Deposit and any other sums which the parties agree shall be held in escrow
(herein collectively called the "Escrow Deposits"), together with all interest
earned thereon, shall be held by the Escrow Agent, in trust, and disposed of
only in accordance with the following provisions:
(a) The Escrow Agent shall invest the Escrow Deposits in government
insured interest-bearing instruments satisfactory to both Buyer and
Seller, shall not co-mingle the Escrow Deposits with any funds of
the Escrow Agent or others, and shall promptly provide Buyer and
Seller with confirmation of the investments made. The parties
acknowledge that only $100,000 will be federally insured.
(b) If the Closing occurs, the Escrow Agent shall deliver the Escrow
Deposits to, or upon the instructions of, Seller on the Closing
Date.
(c) If for any reason the Closing does not occur, the Escrow Agent shall
deliver the Escrow Deposits and all interest earned thereon to
Seller or Buyer only upon receipt of a written demand therefor from
such party, subject to the following provisions of this Subsection
12.1(c). If for any reason the Closing does not occur and either
party makes a written demand upon the Escrow Agent for payment of
the Escrow Deposits and the interest earned thereon, the Escrow
Agent shall give
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written notice to the other party of such demand. If the Escrow
Agent does not receive a written objection from the other party to
the proposed payment within ten (10) days after the giving of such
notice, the Escrow Agent is hereby authorized to make such payment.
If the Escrow Agent does receive such written objection within such
period, the Escrow Agent shall continue to hold such amount until
otherwise directed by written instructions signed by Seller and
Buyer or a final judgment of a court.
(d) The parties acknowledge that the Escrow Agent is acting solely as a
stakeholder at their request and for their convenience, that the
Escrow Agent shall not be deemed to be the agent of either of the
parties, and that the Escrow Agent shall not be liable to either of
the parties for any action or omission on its part taken or made in
good faith, and not in disregard of this Agreement, but shall be
liable for its negligent acts and for any loss, cost or expense
incurred by Seller or Buyer resulting from the Escrow Agent's
mistake of law respecting the Escrow Agent's scope or nature of its
duties. Buyer shall indemnify and hold the Escrow Agent harmless
from and against and Seller shall reimburse Escrow Agent for all
costs, claims and expenses, including reasonable attorneys' fees,
incurred in connection with the performance of the Escrow Agent's
duties hereunder, except with respect to actions or omissions taken
or made by the Escrow Agent in bad faith, in disregard of this
Agreement or involving negligence on the part of the Escrow Agent.
(e) Buyer shall be paid the interest earned on the Deposit and shall pay
any income taxes on any interest earned on the Deposit. Buyer
represents and warrants to the Escrow Agent that its taxpayer
identification number is set forth next to its signature below.
(f) The Escrow Agent has executed this Agreement in the place indicated
on the signature page hereof in order to confirm that the Escrow
Agent has received and shall hold the Escrow Deposits and the
interest earned thereon, in escrow, and shall disburse the Escrow
Deposits, and the interest earned thereon, pursuant to the
provisions of this Article 12.
(g) The escrow fee, if any, charged by the Title Company in its capacity
as Escrow Agent shall be shared equally by Seller and Buyer.
ARTICLE 13 - LEASING MATTERS
13.1 New Leases. From and after the Effective Date, Seller shall not,
without Buyer's prior written consent in each instance, which
consent shall not be unreasonably withheld or delayed and shall be
given or denied, with the reasons for such denial
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specified in reasonable detail, within three (3) business days after
receipt by Buyer of the information referred to in the next
sentence, enter into a new lease for space in the Property or renew
or extend any Lease (except pursuant to the exercise by a tenant of
a renewal, extension or expansion option contained in such tenant's
Lease). Seller shall furnish Buyer with all information regarding
any proposed new leases, renewals and extensions reasonably
necessary to enable Buyer to make informed decisions with respect to
the advisability of the proposed action. If Buyer fails to object in
writing to any such proposed new lease, renewal or extension, as the
case may be, within three (3) business days after receipt of the
aforementioned information, Buyer shall be deemed to have approved
the proposed new lease, renewal or extension, as the case may be. If
Buyer rejects the proposed action, Seller nevertheless retains full
right, power and authority to execute such documents as are
necessary to effect such action, and Seller shall promptly advise
Buyer of the same. The foregoing notwithstanding, in the event Buyer
has rejected the proposed action but Seller nonetheless proceeds to
effect it, Buyer shall have the right, within three (3) business
days after receipt of Seller's notice that Seller has taken such
action, to elect to terminate this Agreement by the delivery to
Seller of a written notice of termination, in which case the Deposit
shall be paid to Buyer and, thereafter, the parties shall have no
further rights or obligations hereunder other than any arising under
any section herein which expressly provides that it shall survive
the termination of this Agreement. If Buyer fails to notify Seller
within such time period, Buyer shall be deemed to have fully waived
any rights to terinate this Agreement pursuant to this Section 13.1.
Seller shall deliver to Buyer a true and complete copy of each such
new lease, renewal and extension agreement, if any, Promptly after
the execution and delivery thereof.
13.2 Lease Expenses. At Closing, Buyer shall reimburse Seller for any and
all fees paid by Seller prior to Closing or costs and expenses
incurred by Seller prior to Closing (such fees, costs and expenses
being herein collectively called the "Lease Expenses"), arising out
of or in connection with:
(a) any extensions, renewals or expansions under the Leases
exerciseable and exercised by any tenant between the Effective
Date and the Closing Date; and
(b) any lease for space at the Property entered into between the
Effective Date and the Closing Date, or any extension, renewal
or expansion of a Lease where such Lease does not provide for
its extension, renewal or expansion, entered into on or after
the Effective Date which have been entered into in accordance
with Section 13.1 (a "New Lease"). Lease Expenses shall
include, without limitation, (i) brokerage commissions and
fees to effect
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any such leasing transaction, (ii) expenses incurred for space
planning and design, repairs, improvements, equipment,
painting, decorating, partitioning and other items to satisfy
the tenant's requirements with regard to such leasing
transaction, (iii) legal fees for services in connection with
the preparation of documents and other services rendered in
connection with the effectuation of the leasing transaction,
(iv) if there are any rent concessions covering any period
that the tenant has the right to be in possession of the
demised space, the rents that would have accrued during the
period of such concession prior to the Closing Date as if such
concession were amortized over (A) with respect to any
extension or renewal, the term of such extension or renewal,
(B) with respect to any expansion, that portion of the term
remaining under the subject Lease after the date of any
expansion, or (C) with respect to any New Lease, the entire
initial term of any New Lease, and (v) expenses incurred for
the purpose of satisfying or terminating the obligations of a
tenant under a New Lease to the landlord under another lease
(whether or not such other lease covers space in the
Property). At the Closing, Buyer shall assume Seller's
obligations to pay, when due (whether on a stated due date or
accelerated) any Lease Expenses unpaid as of the Closing, and
Buyer hereby agrees to indemnify and hold Seller harmless from
and against any and all claims for such Lease Expenses which
remain unpaid for any reason at the time of Closing, which
obligations of Buyer shall survive the Closing and shall no be
merged therein. Each party shall make available to the other
all records, bills, vouchers and other data in such party's
control verifying Lease Expenses and the payment thereof.
13.3 Other Lease Activity. Except as provided in this Section 13.3,
without the prior consent of Buyer, which shall not be unreasonably
withheld (a) no Lease shall be modified or amended except as
provided in Section 13.1 with respect to extensions, renewals or
expansions of Leases and the execution of New Leases, (b) Seller
shall not consent to any assignment or sublease in connection with
any Lease or New Lease and (c) Seller shall not remove any tenant
under any Lease or New Lease, whether by summary proceedings or
otherwise, except by reason of a material default of the tenant
under the Lease or New Lease. In furtherance of the fore-going,
Seller shall deliver to Buyer a written notice of each proposed
action of the type described in clauses (a) through (c) above which
Seller has been asked or proposes to take, stating, if applicable,
whether Buyer is willing to consent to such action and setting forth
the relevant information therefor. Buyer shall notify Seller in
writing whether or not it approves such action within three (3)
business days after delivery to Buyer of Seller's notice containing
the aforementioned information. If Buyer notifies Seller that it
disapproves such action, Buyer's notice shall state with specificity
the reasons for such disapproval. If Buyer shall not
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give written notice of its disapproval of such action within such
three (3) business day period, Buyer shall be deemed to have
approved such action. If any Lease requires that the landlord's
consent be given under the applicable circumstances (or not be
unreasonably withheld), then Buyer shall be deemed ipso facto to
have approved such action. Subject to its reimbursement rights
pursuant to Section 13.2, Seller shall perform all of the
obligations of the landlord under the Leases and New Leases which
under the terms of such Leases and New Leases are required to be
performed by the landlord prior to the Closing Date.
13.4 Lease Enforcement. Subject to the provisions of Section 13.3 above,
prior to the Closing Date, Seller shall have the right, but not the
obligation (except to the extent that Seller's failure to act shall
constitute a waiver of such rights or remedies), to enforce the
rights and remedies of the landlord under any Lease or New Lease, by
summary proceedings or otherwise, and to apply all or any portion of
any security deposits then held by Seller toward any loss or damage
incurred by Seller by reason of any defaults by tenants.
13.5 Lease Termination Prior to Closing. The termination of any Lease or
New Lease or the removal of any tenant by reason of a default by
such tenant (by summary proceedings or otherwise) prior to the
Closing shall not affect the obligations of Buyer under this
Agreement in any manner or entitle Buyer to a reduction in, or
credit or allowance against, the Purchase Price or give rise to any
other claim on the part of Buyer, unless such termination is of a
Major Tenant, in which event the Buyer shall have the election (if
exercised in writing within three (3) business days after written
notice of any such termination is provided to Buyer by Seller) to
terminate this Agreement and receive the Deposit.
ARTICLE 14 - MISCELLANEOUS
14.1 Buyer's Assignment. Buyer shall not assign this Agreement or its
rights hereunder to any individual or entity without the prior
written consent of Seller, which consent Seller may grant or
withhold in its sole discretion, and any such assignment shall be
null and void. To the extent that Buyer assigns this Agreement,
Buyer shall not be released of any of its obligations hereunder and
Buyer shall continue to remain fully liable hereunder. Buyer shall
be permitted, however, to assign this Agreement to Mack-Cali Realty,
L.P., which is organized as a limited partnership under the laws of
the State of Delaware or any entity under common control of the
Buyer. Nevertheless, under no circumstances shall Buyer have the
right to assign this Agreement to any entity owned or controlled by
an employee benefit plan if Seller's sale of the Property to such
entity would, in the reasonable opinion of Seller's ERISA advisor,
create or otherwise cause a "prohibited transaction" under the
Employee Retirement Income Security Act of
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1974, as amended ("ERISA"). In the event Buyer assigns this
Agreement to any entity with the actual intent to create a
"prohibited transaction" under ERISA so as to necessitate the
termination of this Agreement, then Seller shall have the right to
pursue the rights and remedies set forth in this Agreement. This
Agreement and all rights hereunder shall inure to and be binding
upon the respective heirs, executors, successors and permitted
assigns of Seller and Buyer. Buyer shall not have the right to
assign this Agreement in part.
14.2 Designation Agreement. Section 6045(e) of the United States Internal
Revenue Code and the regulations promulgated thereunder (herein
collectively called the "Reporting Requirements") require an
information return to be made to the United States Internal Revenue
Service, and a statement to be furnished to Seller, in connection
with the Transaction. "Escrow Agent" is either (i) the person
responsible for closing the Transaction (as described in the
Reporting Requirements) or (ii) the disbursing title or escrow
company that is most significant in terms of gross proceeds
disbursed in connection with the Transaction (as described in the
Reporting Requirements). Accordingly:
(a) Escrow Agent is hereby designated as the "Reporting Person"
(as defined in the Reporting Requirements) for the
Transaction. Agent shall perform all duties that are required
by the Reporting Requirements to be performed by the Reporting
Person for the Transaction.
(b) Seller and Buyer shall furnish to Escrow Agent, in a timely
manner, any information requested by Escrow Agent and
necessary for Escrow Agent to perform its duties as Reporting
Person for the Transaction.
(c) Escrow Agent hereby requests Seller to furnish to it Seller's
correct taxpayer identification number. Seller acknowledges
that any failure by Seller to provide Escrow Agent with
Seller's correct taxpayer identification number may subject
Seller to civil or criminal penalties imposed by law.
Accordingly, Seller hereby certifies to Escrow Agent, under
penalties of perjury, that Seller's correct taxpayer
identification number is 52-1926380.
(d) Each of the parties hereto shall retain this Agreement for a
period of four(4) years following the calendar year during
which Closing occurs.
14.3 Survival/Merger. Except for the provisions of this Agreement which
are explicitly stated to survive the Closing or those which by their
terms cannot be fulfilled until after Closing, (a) none of the terms
of this Agreement shall survive the Closing, and (b) the delivery of
the Deed and any other documents and
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instruments by Seller and the acceptance thereof by Buyer shall
effect a merger, and be deemed the full performance and discharge of
even obligation on the part of Buyer and Seller to be performed
hereunder.
14.4 Integration; Waiver. This Agreement, together with the Schedules and
Exhibits hereto, embodies and constitutes the entire understanding
between the parties with respect to the Transaction and any 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. No waiver by either party
hereto of any failure or refusal by the other party to comply with
its obligations hereunder shall be deemed a waiver of any other or
subsequent failure or refusal to so comply.
14.5 Governing Law. This Agreement shall be construed and interpreted
under the laws of the Commonwealth of Virginia except that the
obligations set forth in Articles 3, regarding Title Matters, and
Article 6, regarding Closing, of this Agreement shall be construed
and interpreted under the laws of the state of New Jersey.
14.6 Captions Not Binding; Schedules and Exhibits. The captions in this
Agreement are inserted for reference only and in no way define,
describe or limit the scope or intent of this Agreement or of any of
the provisions hereof. All Schedules and Exhibits attached hereto
shall be incorporated by reference as if set out herein in full.
14.7 Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors
and permitted assigns.
14.8 Severability. If any term or provision of this Agreement or the
application thereof to any persons or circumstances shall, to any
extent, be invalid or unenforceable, the remainder of this Agreement
or the application of such term or provision to persons or
circumstances other than those as to which it is held invalid or
unenforceable shall not be affected thereby, and each term and
provision of this Agreement shall be valid and enforced to the
fullest extent permitted by law.
14.9 Notices. Any notice, request, demand, consent, approval and other
communications under this Agreement shall be in writing, and shall
be deemed duly given or made at the time and on the date when
personally delivered as shown on a receipt therefor (which shall
include delivery by a nationally
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recognized overnight delivery service) or three (3) business days
after being mailed by prepaid registered or certified mail, return
receipt requested, to the address for each party set forth below.
Any party, by written notice to the other in the manner herein
provided, may designate an address different from that set forth
below.
IF TO BUYER:
Mack-Cali Realty Acquisition Corp.
11 Commerce Drive
Cranford, NJ 07016
Attention: Thomas A. Rizk, CEO and
Roger W. Thomas, Exec. V.P.
Fax: (908) 272-6755
COPY TO:
Pryor, Cashman Sherman & Flynn
410 Park Avenue
New York, NY 10022
Attention: Andrew S. Levine, Esquire
Fax: (212) 326-0806
IF TO SELLER:
Sylvan Way L.L.C.
c/o J. P. Morgan Investment Management Inc.
522 Fifth Avenue
New York, NY 10036
Attention: William N. Cinnamond, Vice President
Fax:(212) 837-2602
COPY TO:
Hirschler, Fleischer, Weinberg, Cox
& Allen, P.C.
The Federal Reserve Bank Building
701 East Byrd Street
Richmond, Virginia 23219
Attention: L. Charles Long, Jr.
Telephone:(804) 771-9524
Fax:(804) 644-0957
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14.10 Counterparts. This Agreement may be executed in counterparts, each
of which shall be an original and all of which counterparts taken
together shall constitute one and the same agreement.
14.11 No Recordation. Seller and Buyer each agrees that neither this
Agreement nor any memorandum or notice hereof shall be recorded,
unless required by law, and Buyer agrees (a) not to file any notice
of pendency or other instrument (other than a judgment) against the
Property or any portion thereof in connection herewith unless Seller
has willfully failed or refused to close hereunder and (b) to
indemnify Seller against all costs, expenses and damages, including,
without limitation, reasonable attorneys' fees and disbursements,
incurred by Seller by reason of any unpermitted filing by Buyer of
such notice of pendency or other instrument.
14.12 Additional Agreements; Further Assurances. Subject to the terms and
conditions herein provided, each of the parties hereto shall execute
and deliver such documents as the other party shall reasonably
request in order to consummate and make effective the Transaction;
provided, however, that the execution and delivery of such documents
by such party shall not result in any additional liability or cost
to such party.
14.13 Construction. The parties acknowledge that each party and its
counsel have reviewed and revised 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 amendment, Schedule or
Exhibit hereto.
14.14 ERISA. To satisfy compliance with ERISA, Buyer represents and
warrants to Seller that:
(a) Neither Buyer nor any of its affiliates (within the meaning of
Part V(c) of Prohibited Transaction Exemption 84-14 granted by
the U.S. Department of Labor ("PTE 84-14") has, or during the
immediately preceding year has exercised, the authority to
appoint or terminate Seller as investment manager of any
assets of the employee benefit plans whose assets are held by
Seller or to negotiate the terms of any management agreement
with Seller on behalf of any such plan;
(b) The Transaction is not specifically excluded by Part I(b) of
PTE 84-14;
(c) Buyer is not a related party of Seller (as defined in Part
V(h) of PTE 84)-14); and
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(d) The terms of the Transaction have been negotiated and
determined at arm's length, as such terms would be negotiated
and determined by unrelated parties.
Buyer hereby agrees to execute such documents or provide such
information as Seller may require in connection with the
Transaction or to otherwise assure Seller that: (i) this is
not a prohibited Transaction under ERISA, (ii) that the
Transaction is otherwise in full compliance with ERISA and
(iii) that Seller is not in violation of ERISA by compliance
with this Agreement and by closing the Transaction. Seller
shall not be obligated to consummate the Transaction unless
and until the Transaction complies with ERISA and Seller is
satisfied that the Transaction complies in all respects with
ERISA. The obligations of Buyer under this section shall
survive the Closing and shall not be merged therein.
14.15 Business Day. As used herein, the term "business day" shall mean any
day other than a Saturday, Sunday, or any Federal or Commonwealth of
Virginia or State of New Jersey holiday.
14.16 Seller's Maximum Aggregate Liability. Notwithstanding any provision
to the contrary contained in this Agreement or any documents
executed by Seller pursuant hereto or in connection herewith, the
maximum aggregate liability of Seller, and the maximum aggregate
amount which may be awarded to and collected by Buyer, under this
Agreement (including, without limitation, the breach of any
covenants, representations and warranties contained herein) and any
and all documents executed pursuant hereto or in connection herewith
(including, without limitation, any Seller's estoppel letter
provided in accordance with the terms of Section 6.3(e) hereof), for
which a claim is timely made by Buyer shall not exceed One Million
Dollars ($1,000,000.00 ) (the "Maximum Amount"). The provisions of
this section shall survive the Closing and shall not be merged
therein. The provisions of this paragraph shall not, however, relate
to Buyer's remedies in the event of Seller's Closing Default and
Closing does not occur; such remedies are prescribed in paragraph
10.2, which prescribes Buyer's sole remedies in such event.
14.17 Facsimile Signatures. The parties hereto agree that facsimile
signatures by any party shall be fully binding upon and enforceable
against such party provided a hard copy of the originals are sent
the same day via a reputable, national overnight courier service.
14.18 Seller Approval. The transactions described in and contemplated by
this
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Agreement are subject to the approval of the Board of Directors of
System Realty Nineteen, Inc., one of the Members of Sylvan Way LLC.
Seller agrees to submit these transactions for such approval
promptly after execution of the Agreement. If Seller fails to secure
such approval on or before 5:00 p.m. then prevailing Eastern time on
the fifth (5th) business day after the Effective Date, then this
Agreement shall automatically terminate and the Deposit will be
returned by the Escrow Agent to Buyer; provided, however, Buyer may
extend such approval period as it deems necessary.
14.19 Time of Essence. Time is of the essence to both Seller and Buyer in
the performance of this Agreement by the other party, and they have
agreed that strict compliance by both of them is required as to any
date and/or time set out herein. If the final day of any period of
time set out in any provision of this Agreement falls upon a
Saturday, Sunday or a holiday observed by federally insured banks in
the Commonwealth of Virginia or by the United States Postal Service,
then and in such event, the time of such period shall be extended to
the next day which is not a Saturday, Sunday or holiday. Unless
otherwise specified, in computing any period of time described in
this Agreement, the day of the act or event after which the
designated period of time begins to run is not to be included and
the last day of the period so computed is to be included unless such
last day is a Saturday, Sunday or holiday in which event the period
shall run until the end of the next day which is neither a Saturday,
Sunday or holiday.
WITNESS WHEREOF, each party hereto has caused this Agreement to be duly
executed on its behalf on the day and year first above written.
SELLER: SYLVAN WAY L.L.C., a Virginia
limited liability company, by its
Managers
Execution Date: February __, 1998
SYSTEM REALTY NINETEEN,
INC., a Virginia corporation
By:___________________________
Name: ________________________
Title: _________________________
and
VIRGINIA RETIREMENT
SYSTEM, a body corporate of the
Commonwealth of Virginia
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By:___________________________
Name: ________________________
Title: _________________________
BUYER: Mack-Cali Realty Acquisition Corp.
Execution Date: February __, 1998 a Delaware corporation
By:___________________________
Name: Roger W. Thomas
Title: Executive Vice President
BUYER'S FEDERAL TAX IDENTIFICATION NUMBER: 22-3305147
EXECUTION BY ESCROW AGENT:
The undersigned has executed this Agreement solely to confirm its agreement to
(i) hold the Escrow Deposits in escrow in accordance with the provisions hereof
and (ii) comply with the provisions of Article 12 and Section 14.2.
FIRST AMERICAN TITLE
INSURANCE CO. OF NEW YORK
Escrow Agent
Execution Date: February ___, 1998 By:___________________________
Name: ________________________
Title: _________________________
40
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement") is made as of this 18 day of
February, 1998, by and between (i) PRUBETA-3, a New Jersey general partnership
("Seller"), and (ii) Mack-Cali Realty Acquisition Corp., a New Jersey
corporation ("Buyer").
W I T N E S S E T H:
In consideration of the mutual covenants and agreements set forth herein the
parties hereto do hereby agree as follows:
ARTICLE 1. - SALE OF PROPERTY
Seller agrees to sell, transfer and assign and Buyer agrees to purchase, accept
and assume, subject to the terms and conditions stated herein, all of Seller's
right, title and interest in and to the following (herein collectively called
the "Property"):
a. Real Property. Those certain parcels of real estate
located in Parsippany, New Jersey, and Hanover, New
Jersey, and legally described in Exhibit A attached
hereto and incorporated herein by this reference,
together with all buildings, improvements and fixtures
located thereon and all rights, privileges and
appurtenances pertaining thereto including all of
Seller's right, title and interest in and to all
rights-of-way, open or proposed streets, alleys,
easements, strips or gores of land adjacent thereto
(herein collectively called the "Real Property"); and
b. Personal Property. All tangible personal property
described in Exhibit A to the Bill of Sale attached
hereto as Exhibit F relating to the Real Property
(herein collectively called the "Personal Property"),
which intentionally excludes (i) all appraisals,
budgets, Seller's strategic plans for the Property,
internal analyses, marketing information, computer
software, submissions relating to Seller's obtaining of
corporate authorization, attorney and accountant work
product, or other similar items or information in the
possession or control of Seller or Seller's property
manager which Seller deems proprietary, (ii) all artwork
located on the Real Property and owned by Seller or by
Prudential, and (iii) computers, furniture and other
equipment and items of personal property located in the
Property's management office, except for certain limited
items of office furniture and equipment which Seller
shall leave at the
<PAGE>
management office on the Closing Date; and
c. Other Property Rights. (a) Seller's interest as landlord
in all leases encumbering the Real Property on the
Closing Date (as defined in Section 6.1), and Seller's
interest under the documents described under the heading
"PruBeta-3 Sublease at Short Hills" in Exhibit M hereto;
and (b) if and to the extent assignable by Seller, (i)
except to the extent terminated by Seller effective on
or prior to the Closing Date as provided herein, all
service, supply, maintenance, utility and commission
agreements, all equipment leases, and all contracts,
subcontracts and agreements relating to the construction
of any unfinished tenant improvements described in
Exhibit B attached hereto and incorporated herein by
this reference, and (ii) all licenses, permits, zoning
approvals, development rights and entitlements, and
other written authorizations necessary for or utilized
in connection with the use, operation or ownership of
the Real Property or Personal Property and in Seller's
possession or control (the rights and interests of
Seller described in clauses (a) through (b) hereinabove
being herein collectively called the "Other Property
Rights").
ARTICLE 2. - PURCHASE PRICE
The total purchase price to be paid by Buyer for the purchase of the Property is
the sum of ONE HUNDRED FIFTY-SEVEN MILLION THIRTY-TWO THOUSAND AND NO/100
DOLLARS ($157,032,000.00) in immediately available funds (the "Purchase Price").
The Purchase Price shall be paid in the following manner:
a. Deposit Money. Upon the full and final execution of this
Agreement and as a condition precedent to the
effectiveness of this Agreement, Buyer shall deposit the
sum of Three Million Two Hundred Forty Thousand and
no/100 Dollars ($3,240,000.00) in immediately available
funds as a deposit (the "Deposit") with First American
Title Insurance Company whose mailing address is 30
North LaSalle Street, Suite 310, Chicago, Illinois
60602, Attention: Mary Lou Kennedy, as escrow agent
("Escrow Agent"). The Deposit shall be non-refundable
except as provided in this Agreement. The Deposit shall
be held and delivered by Escrow Agent in accordance with
the provisions of the escrow agreement of even date
herewith among Buyer, Seller and Escrow Agent. Any
interest earned on the Deposit shall be added to and
considered a part of the Deposit. Except as expressly
otherwise set forth herein, the Deposit shall be applied
against the Purchase Price on the Closing Date.
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b. Cash at Closing. On the Closing Date, Buyer shall pay to
Seller an amount equal to the difference between (a) the
Purchase Price, and (b) the amount of the Deposit as of
the Closing Date (the "Balance"), subject to the
prorations and adjustments set forth in Article 5 or as
otherwise provided under this Agreement, plus any other
amounts required to be paid by Buyer at Closing, in
immediately available funds by wire transfer as more
particularly set forth in Section 6.2.
c. Allocation of Purchase Price. Seller and Buyer hereby
agree that the Purchase Price shall be allocated One
Hundred Thirty Million Five Hundred Thirty-Two Thousand
and no/100 Dollars ($130,532,000.00) (the "Developed
Property Purchase Price") to the four (4) improved
portions of the Property, that is (i) 2 Hilton Court,
(ii) 7 Campus Drive, (iii) 8 Campus Drive/7 Sylvan Way,
and (iv) 2 Dryden Way, also known as 11 Dryden Way
(collectively, the "Developed Property"), and Twenty-Six
Million Five Hundred Thousand Dollars ($26,500,000) (the
"Vacant Property Purchase Price") to the ten (10)
portions of the Property which are vacant parcels of
land, that is (a) 1400 Route 10, Block 3401, Lots 1 and
2, (b) Sylvan Way, Block 202, Lot 6.01, (c) Sylvan Way,
Block 202, Lot 7.01, (d) Sylvan Way, Block 202, Lot
8.01, (d) Ridgedale Avenue, Block 3301, Lot 1, (f)
Dryden Way, Block 202, Lot 6.04, (g) Route 287, Block
3201, Lot 1, and (h) Eastmans Road, Block 3002, Lot 6,
and (i) Block 202, Lot 10, and Block 3201, Lot 2
(collectively, the "Vacant Property").
ARTICLE 3. - TITLE MATTERS
a. Title to Real Property. Seller has previously delivered
to Buyer (a) First American Title Insurance Company's
(such company, or such other title insurance company
selected by Buyer which has the ability to perform the
obligations of Title Company hereunder without delay,
the "Title Company") commitments to issue Owner's
Policies of Title Insurance with respect to the Property
(collectively, the "Title Report") identified as Title
Insurance Commitment File Nos. (i) 97-44590), (ii)
97-44591, (iii) 97- 44592, (iv) 97-44594, (v) 97-44625,
(vi) 97-44597, (vi) 97- 44626, (viii) 97-44593, (ix)
97-44595, (x) 97-44596, (xi) 97- 44934, (xii) 97-4624,
and (xiii) 98-46054 (regarding Block 202, Lot 10, and
Block 3201, Lot 2), (b) copies of all recorded documents
referred to on Schedule B of the Title Report as
exceptions to coverage (the "Title Documents"), and (c)
the
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certified boundary surveys of the Property prepared by
De Muro Associates which accompany the Title Report
(collectively, the "Survey"). Buyer hereby confirms its
approval of the Title Report and Survey. Except as
provided in Section 3.2, Seller shall convey and Buyer
shall accept title to the Property, subject to (i)
applicable zoning and building ordinances and land use
regulations, (ii) such exceptions to title as are listed
on Schedule B of the Title Report, including the Title
Company's standard printed exceptions, (iii) such state
of facts as disclosed in the Survey, (iv) such state of
facts as would be disclosed by a physical inspection of
the Property, (v) the lien of taxes not yet due and
payable, (vi) any exceptions caused by Buyer, its
agents, representatives or employees, (vii) such other
exceptions as the Title Company may raise for judgments
against Prudential, which the Title Company shall commit
to insure over, without any additional cost to Buyer,
whether such insurance is made available in
consideration of payment, bonding, indemnity of Seller
or otherwise, and (viii) the rights of only those
tenants and other occupants of the Developed Property
who occupy space therein pursuant to the Leases (as
defined in Subsection 6.3(c)) (the foregoing exceptions
described in clauses (i) through (viii) being herein
collectively called the "Permitted Exceptions").
b. Title Defects.
i. Certain Exceptions to Title. Buyer shall have the right
to object in writing to any title matters that are not
Permitted Exceptions which may appear on supplemental
title reports or updates to the Title Report issued at
the request of Buyer after the date hereof (herein
collectively called the "Other Liens") within five (5)
days after the receipt thereof by Buyer. Unless Buyer
shall timely object to such Other Liens, all such Other
Liens which are set forth in any such supplemental
reports or updates shall be deemed to constitute
additional Permitted Exceptions. Any mortgage liens and
other consensual liens granted by Seller and listed in
the Title Report, and any exceptions which are timely
objected to by Buyer shall be herein collectively called
the "Title Objections." Seller may elect (but shall not
be obligated) to remove, or cause to be removed at its
expense, any Title Objections, and shall be entitled to
a reasonable adjournment of the Closing (not to exceed
ninety (90) days) for the purpose of such removal.
Seller shall notify Buyer in writing within five (5)
days after receipt of Buyer's notice of Title Objections
whether Seller elects to remove the same.
Notwithstanding the foregoing, Seller shall be obligated
to remove any Title Objections which result from
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mortgage liens granted by Seller and any other title
exceptions intentionally caused by Seller. If Seller is
unable to remove or endorse over any Title Objections
prior to the Closing, or if Seller elects not to remove
one or more Title Objections, Buyer may elect to either
(a) terminate this Agreement, in which event the Deposit
shall be paid to Buyer, and thereafter, the parties
shall have no further rights or obligations hereunder
except for obligations which expressly survive the
termination of this Agreement, or (b) waive such Title
Objections, in which event such Title Objections shall
be deemed "Permitted Exceptions" and the Closing shall
occur as herein provided without any reduction of or
credit against the Purchase Price.
ii. Discharge of Title Objections. If on the Closing Date
there are any Title Objections which Seller has elected
to pay and discharge, Seller may use any portion of the
Balance to satisfy the same, provided Seller shall
deliver to Buyer at the Closing instruments in
recordable form and sufficient to satisfy such Title
Objections of record, together with the cost of
recording or filing such instruments, or with respect to
judgment liens only, provided that Seller shall cause
the Title Company to insure over the same, without any
additional cost to Buyer, whether such insurance is made
available in consideration of payment, bonding,
indemnity of Seller or otherwise.
c. Title Insurance; Survey. At Closing, the Title Company shall
issue to Buyer, at Buyer's sole cost and expense, one or more
ALTA Owner's Form of title insurance policies in the form of
the Title Report (collectively, the "Owner's Title Policy"),
in the amount of the Purchase Price, insuring that fee simple
title to the Real Property is vested in Buyer subject only to
the Permitted Exceptions. Buyer shall be entitled to request
that the Title Company provide, at Buyer's sole cost and
expense, such endorsements (or amendments) to the Owner's
Title Policy as Buyer may reasonably require, provided that
(a) such endorsements (or amendments) shall be at no cost or
additional liability to Seller, (b) Buyer's obligations under
this Agreement shall not be conditioned upon Buyer's ability
to obtain such endorsements and, if Buyer is unable to obtain
such endorsements, Buyer shall nevertheless be obligated to
proceed to close the transaction contemplated by this
Agreement (the "Transaction") without reduction of or set off
against the Purchase Price, and (c) the Closing shall not be
delayed as a result of Buyer's request. Seller shall pay all
costs incurred in connection with the preparation of the
initial Survey delivered by Seller, and Buyer shall be
required to pay all costs incurred in connection with any
update or modification thereof requested by Buyer.
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ARTICLE 4. - BUYER'S DUE DILIGENCE/CONDITION OF THE PROPERTY
a. Due Diligence Periods. Buyer acknowledges that commencing
prior to the execution of this Agreement and continuing for a
period which will expire on February 28, 1998 (the "Due
Diligence Period"), Buyer has conducted, and shall continue to
conduct, its examinations, inspections, testing, studies
and/or investigations (herein collectively called the "Due
Diligence") of the Property and information regarding the
Property. Seller has made, and shall continue to make, the
Property files (other than confidential and privileged
materials) relating to the Property available to Buyer for
Buyer's review during the Due Diligence Period. In addition,
Seller applied to the Industrial Site Evaluation Element of
the New Jersey Department of Environmental Protection,
pursuant to the New Jersey Industrial Site Recovery Act, for a
Letter of Non-Applicability, and delivered or shall deliver
the Department's response thereto to Buyer for Buyer's review.
Notwithstanding anything to the contrary contained in this
Agreement, if Buyer in its sole discretion is not satisfied
with the results of its Due Diligence with respect to the
Property, Buyer may elect not to Purchase the Property by
written notice to Seller given in accordance with the
provisions of Section 14.9 hereof before 5:00 p.m. (Eastern
Time) on the last day of the Due Diligence Period, and, in the
event of such election not to purchase the Property, Buyer
shall be entitled to the return of the Deposit. In the event
Buyer fails to elect not to purchase the Property on or before
the last day of the Due Diligence Period, Buyer shall be
deemed to have waived its right to elect not to purchase the
Property. Buyer and Seller each acknowledge and agree that (a)
Buyer shall be permitted to conduct further inspections and
examinations regarding the Property after the expiration of
the Due Diligence Period, but Buyer shall have no additional
time to terminate this Agreement as a result thereof. At
Closing and as a material inducement for Seller to consummate
the Transaction, Buyer will deliver a certification in the
form of Exhibit D attached hereto and incorporated herein by
this reference.
b. Buyer's Acknowledgements. Buyer hereby irrevocably
acknowledges the following matters as of the date hereof, and
agrees that, subject to the provisions of Section 4.1, Buyer
shall not terminate this Agreement or directly or indirectly
request or demand (i) any reduction in the Purchase Price,
(ii) any representations or warranties of Seller other than as
expressly set forth herein, (iii) any modification of the
documents to be
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delivered to Buyer pursuant to this Agreement, or (iv) any
other concessions or agreements from Seller, any tenant or any
other party as a result of or in connection with any such
matters:
i. Location and Market Conditions. Buyer has reviewed and
approved the location of the Property and market
conditions, including, without limitation, market lease
rates, market operating expenses, market property taxes,
market future revenue and expense growth rates, market
capitalization rates, and market discount rates.
ii. Vacant Property. Except as expressly provided in Section
7.2(d), Buyer has reviewed and approved all matters in
any way relating to the Vacant Property, including,
without limitation, zoning, entitlements, approvals,
licenses, permits, access, easements, permits, impact
fees, traffic issues, environmental matters, flood plain
issues, and wetlands issues (collectively, the "Land
Development Requirements"), including, without
limitation, (i) State of New Jersey Agreement #2585,
dated November 14, 1978, including all exhibits,
amendments and addenda thereto, (ii) Developer's
Agreement between Seller and The Township of
Parsippany-Troy Hills, dated September 1, 1992,
including all exhibits, amendments and addenda thereto,
and (iii) Agreement between Seller and The Township of
Hanover, dated [blank], 1994, including all exhibits,
amendments and addenda thereto. Buyer shall assume at
Closing all of Seller's and Prudential's obligations
under the documents and instruments evidencing the Land
Development Requirements, and at Closing Buyer shall
replace all guaranties, bonds, letters of credit, and
cash deposits provided by or on behalf of Seller or
Prudential with respect to the Vacant Property, with
substitute security in accordance with the requirements
of the applicable authority (or if the applicable
authority does not allow such a substitution, at Closing
Buyer shall execute and deliver an indemnity agreement,
in form and substance reasonably satisfactory to Seller,
pursuant to which Buyer indemnifies Seller or
Prudential, as the case may be, for any and all costs,
loss, damages and expenses, of any kind or nature
whatsoever, including reasonable attorneys' fees and
costs, arising out of or resulting from Buyer's failure
to satisfy the Land Development Requirements).
iii. Lintel Condition. Buyer has reviewed and approved the
condition of the lintels at 7 Campus Drive (the "Lintel
Issue"), and shall accept all risk and responsibility of
making any repairs
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or replacements on account thereof after Closing as may
be required by the tenants or otherwise.
c. Rejected Contracts. Prior to the expiration of the Due
Diligence Period, Buyer shall notify Seller in writing of
those Existing Contracts that Buyer elects not to assume
("Rejected Contracts"). To the extent such Rejected Contracts
are terminable without cost under the terms thereof, Seller
shall terminate all Rejected Contracts, effective as of the
Closing Date, or if a termination notice period is required
and is not waived by the contractor, then effective on such
later date as may be required under the terms of such Existing
Contract.
ARTICLE 5. - ADJUSTMENTS AND PRORATIONS
The following adjustments and prorations shall be made at Closing:
a. Lease Rentals and Expenses.
i. Rents. All collected rents and other payments from
tenants under the leases shall be prorated between
Seller and Buyer as of the day prior to the Closing
Date. Seller shall be entitled to all rents (including
any percentage rent, additional rent and any accrued tax
and operating expense reimbursements and escalations),
charges, and other revenue of any kind attributable to
any period under the Leases prior to but not including
the Closing Date. Buyer shall be entitled to all rents
(including any percentage rent, additional rent and any
accrued tax and operating expense reimbursements and
escalations), charges and other revenue of any kind
attributable to any period under the Leases on and after
the Closing Date. Rents and expense escalations or other
reimbursements due landlord under the Leases not
collected as of the Closing Date shall not be prorated
at the time of Closing, but Buyer shall make a good
faith effort to collect the same on Seller's behalf and
to tender the same to Seller upon receipt (which
obligation of Buyer shall survive the Closing and not be
merged therein); provided, however, that all rents,
escalations and other reimbursements due landlord under
the Leases collected by Buyer on or after the Closing
Date shall first be applied to all amounts due under the
Leases at the time of collection for post- Closing
periods (i.e., current rents and sums due Buyer as the
current owner and landlord) with the balance (if any)
payable to Seller, but only to the extent of amounts
delinquent and actually
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due Seller. Buyer shall not have an exclusive right to
collect the sums due Seller under the Leases and Seller
hereby retains its rights to pursue any tenant under the
Leases for sums due Seller for periods attributable to
Seller's ownership of the Property ; provided, however,
that Seller shall not be permitted to commence or pursue
any legal proceedings against any tenant seeking
eviction of such tenant or the termination of the
underlying lease. Seller's rights under the immediately
preceding sentence shall survive the Closing and not be
merged therein. Buyer shall receive a credit against the
Purchase Price for pre-paid rentals held by Seller
covering the period post-Closing.
ii. Lease Expenses. At Closing, Buyer shall reimburse Seller
for the Lease Expenses (as defined in Section 13.2) to
the extent required by the terms of Section 13.2.
b. Real Estate and Personal Property Taxes. Real estate and
personal property taxes shall be prorated on a cash
basis for the calendar year in which the Closing occurs,
regardless of the year for which such taxes are
assessed. Such proration shall be calculated based upon
the actual number of days in such calendar year, with
Seller being responsible for that portion of such
calendar year occurring prior to midnight of the day
prior to the Closing Date and Buyer being responsible
for that portion of such calendar year occurring after
midnight of the day prior to the Closing Date. If the
real estate and/or personal property tax rate and
assessments have not been set for the calendar year in
which the Closing occurs, then the proration of such
taxes shall be based upon the rate and assessments for
the preceding calendar year, and such proration shall be
adjusted between Seller and Buyer upon presentation of
written evidence that the actual taxes paid for the
calendar year in which the Closing occurs differ from
the amounts used at Closing and in accordance with the
provisions of Section 5.8. Seller shall pay all
installments of special assessments due and payable
prior to the Closing Date and Buyer shall pay all
installments of special assessments due and payable on
and after the Closing Date; provided, however, that
Seller shall not be responsible for any installments of
special assessments which have not been confirmed or
which relate to projects that have not been completed on
the date hereof. In the event the Property has been
assessed for property tax purposes at such rates as
would result in reassessment (i.e., "escape assessment"
or "roll-back taxes") based upon the change in land
usage or ownership of the Property, Buyer hereby agrees
to pay all such taxes and to indemnify and save Seller
harmless from and
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against all claims and liability for such taxes. Such
indemnity shall survive the Closing and not be merged
therein.
c. Other Property Operating Expenses. Operating expenses
for the Property shall be prorated as of midnight of the
day prior to the Closing Date. Seller shall pay all
utility charges and other operating expenses
attributable to the Property prior to, but not including
the Closing Date (except for those utility charges and
operating expenses payable by tenants in accordance with
the Leases) and Buyer shall pay all utility charges and
other operating expenses attributable to the Property on
or after the Closing Date. To the extent that the amount
of actual consumption of any utility services is not
determined prior to the Closing Date, a proration shall
be made at Closing based on the last available reading
and post-closing adjustments between Buyer and Seller
shall be made within twenty (20) days of the date that
actual consumption for such pre-closing period is
determined, which obligation shall survive the Closing
and not be merged therein. Seller shall not assign to
Buyer any deposits which Seller has with any of the
utility services or companies servicing the Property.
Buyer shall arrange with such services and companies to
have accounts opened in Buyer's name beginning at 12:01
a.m. on the Closing Date.
d. Closing Costs. Buyer shall pay all premiums and charges
of the Title Company for the Owner's Title Policy
(including endorsements) to be issued pursuant to the
Title Report, the cost of any updates or modifications
to the Survey obtained by Buyer, one-half (1/2) of all
escrow or closing charges, all costs of Buyer's Due
Diligence and any other costs customarily paid by the
buyer pursuant to local practice. Seller shall pay all
recording and filing charges in connection with the
instruments by which Seller conveys the Property, all
transfer taxes applicable to the transfer of the
Property to Buyer, including the New Jersey Realty
Transfer Tax, one-half (1/2) of all escrow or closing
charges and, except as otherwise provided herein, any
other costs customarily paid by the seller pursuant to
local practice. Except as otherwise agreed by the
parties, each party shall pay its own attorneys. The
obligations of the parties to pay applicable escrow or
closing charges shall survive the termination of this
Agreement.
e. Cash Security Deposits. At Closing, Seller shall give
Buyer a credit against the Balance in the aggregate
amount of the
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unapplied cash security deposits then held by Seller
under the Leases and any interest thereon less, any
administrative or similar charges to which Seller may be
entitled under applicable law.
f. Apportionment Credit. In the event the apportionments to
be made at the Closing result in a credit balance (i) to
Buyer, such sum shall be paid at the Closing by giving
Buyer a credit against the Balance in the amount of such
credit balance, or (ii) to Seller, Buyer shall pay the
amount thereof to Seller at the Closing by wire transfer
of immediately available funds to the account or
accounts to be designated by Seller for the payment of
the Balance.
g. Closing Statement. Seller shall cause its accounting
staff ("Seller's Accountants"), in cooperation with
Buyer's accounting staff ("Buyer's Accountants"), to
make such examinations and audits of the Property, and
of the books and records pertaining to the Property, as
may be necessary to make the adjustments and prorations
required under this Article 5, or under any other
provisions of this Agreement. All such adjustments and
prorations shall be made in accordance with the
provisions of this Agreement and otherwise on a cash
basis in accordance with sound accounting practices.
Based upon the results thereof, Seller's Accountants and
Buyer's Accountants will prepare and deliver to Buyer
and Seller no later than two (2) business days prior to
the Closing a closing statement (the "Closing
Statement"), which shall contain the parties' best
estimate of the amounts of the items requiring the
prorations and adjustments in accordance with this
Agreement. The amounts set forth on the Closing
Statement shall be the basis upon which the prorations
and adjustments provided for herein shall be made at the
Closing. The Closing Statement shall be binding and
conclusive on all parties hereto to the extent of the
items covered by the Closing Statement, except where
this Agreement expressly provides for further adjustment
of such amounts after Closing, and except as otherwise
provided in Section 5.8 below.
h. Delayed Adjustment. If at any time following the Closing
Date, the amount of an item listed in any section of
this Article 5 shall prove to be incorrect (whether as a
result in an error in calculation or a lack of complete
and accurate information as of the Closing), the party
in whose favor the error was made shall promptly pay to
the other party the sum necessary to correct such error
upon receipt of proof of such error, provided that such
proof is delivered to the party from whom payment is
requested
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on or before one (1) year after Closing. The provisions
of this Section 5.8 shall survive the Closing and not be
merged therein.
ARTICLE 6. - CLOSING
Buyer and Seller hereby agree that the Transaction shall be consummated as
follows:
a. Closing Date. Subject to Seller's right to extend the
Closing as provided in this Agreement, the Transaction
shall close ("Closing") on March 16, 1998 (the "Closing
Date"). Closing shall be by a so-called "New York style"
closing. The Closing shall take place at 10:00 a.m.
Eastern Time in the offices of Seller's or Buyer's
attorneys in New York City, and Buyer and Seller shall
conduct a "pre-closing" on the last business day prior
to the Closing Date with title transfer and payment of
the Purchase Price to be completed on the Closing Date
as set forth in Section 6.2. Time is of the essence with
respect to the Closing Date.
b. Title Transfer and Payment of Purchase Price. Provided
all conditions precedent to Seller's obligations
hereunder have been satisfied, Seller agrees to convey
title to the Real Property to Buyer by a deed from
Seller, upon confirmation of receipt of the Purchase
Price by the Escrow Agent as set forth below. Provided
all conditions precedent to Buyer's obligations
hereunder have been satisfied, Buyer agrees to deliver
the payment specified in Section 2.2 by timely
delivering the same to the Escrow Agent no later than
1:00 p.m. Eastern Time on the Closing Date.
c. Seller's Closing Deliveries. At the Closing, Seller
shall deliver or cause to be delivered to the Escrow
Agent the following:
(1) Deed. A deed in the form of Exhibit E attached
hereto and incorporated herein by this reference,
conveying to Buyer all of Seller's right, title
and interest in and to the Real Property owned by
Seller, subject only to the applicable Permitted
Exceptions (the "Seller Deed"), and a deed in the
form of Exhibit E hereto from The Prudential
Insurance Company of America ("Prudential"),
conveying to Buyer all of Prudential's right,
title and interest in and to the Real Property
owned by Prudential, subject only to the
applicable Permitted Exceptions (the "Prudential
Deed", and collectively, together with the Seller
Deed, the "Deed"). By its signature below
Prudential agrees,
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subject to all of the terms and conditions set
forth in this Agreement, to execute and deliver
the Prudential Deed to Buyer at Closing.
(2) Bill of Sale. A bill of sale from Seller, in the
form of Exhibit F attached hereto and incorporated
herein by this reference conveying all of Seller's
right, title and interest in and to the Personal
Property.
(3) Assignment of Tenant Leases. An assignment and
assumption of tenant leases from Seller, in the
form of Exhibit G attached hereto and incorporated
herein by this reference ("Assignment of Leases")
transferring all of Seller's interest in the
tenant space leases encumbering the Property on
the Closing Date and any amendments, guarantees
and other material documents relating thereto
(herein collectively called the "Leases"),
together with all assignable non-cash security
deposits deposited by the tenants thereunder and
not applied by Seller in accordance with the terms
of the Leases.
(4) Assignment of Equipment Leases, Commission
Agreements and Service Contracts. An assignment
and assumption of equipment leases, commission
agreements, service contracts, warranties and
guaranties and the Other Property Rights (to the
extent the same are not transferred by the Deed,
Bill of Sale or Assignment of Leases) from Seller,
in the form of Exhibit H attached hereto and
incorporated herein by this reference ("Assignment
of Contracts"), transferring, to the extent
assignable, without liability or expense to
Seller, all of Seller's interest in the equipment
leases and any lease commission agreements in
effect at the Property on the Closing Date, all
uncanceled service contracts encumbering the
Property on the Closing Date, all warranties and
guaranties which remain in effect on the Closing
Date and any Other Property Rights not otherwise
transferred to Buyer, excluding all Rejected
Contracts which are terminated effective on or
before the Closing Date (all of the foregoing
being herein collectively called the "Contracts").
Seller shall not assign any existing management
agreement or any contracts or policies of
insurance for the Property.
(5) Estoppel Letters. In sufficient time for Buyer's
review prior to Closing, executed estoppel letters
from tenants
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collectively occupying no less than seventy
percent (70%) of the area leased under the Leases,
including from each tenant which occupies 50,000
square feet or more of space in the Developed
Property (such 50,000 square foot or more tenants,
the "Major Tenants"). All of such estoppel letters
shall be dated no earlier than January 1, 1998 and
shall be substantially in the form which such
tenant is required to provide pursuant to the
terms of such tenant's Lease or, if no form is
specified in any of the Leases, substantially in
the form of Exhibit I-1 attached hereto and
incorporated herein by this reference.
Notwithstanding the foregoing, if any Major
Tenants fail to deliver estoppel letters which
contain all of the certifications set forth on
Exhibit C attached hereto and made a part hereof
(the "Required Certifications"), and Seller elects
to deliver a landlord estoppel letter as provided
below with respect to such a Major Tenant, then,
even if such missing certifications are not
required under the terms of such Major Tenants's
Lease, the landlord estoppel letter for that Major
Tenant shall include all of the certifications set
forth on Exhibit C hereto which such Major Tenant
failed to include in its tenant estoppel
certificate. Buyer shall have the right to reject
a tenant estoppel letter if the tenant certifies
that there is a material default under the lease
or raises a material matter which is inconsistent
with its Lease or the applicable information set
forth on Exhibit M attached hereto.
Notwithstanding anything to the contrary set forth
herein, in no event shall a tenant estoppel letter
be rejected, or necessitate a landlord estoppel
letter, on the basis of (i) the tenant inserting a
"best knowledge" limitation therein, or (ii) the
tenant complaining about, asserting a default on
account of, or in any way raising, matters
relating to the Lintel Issue. In the event Seller
cannot for any reason obtain a tenant estoppel
letter which satisfies the foregoing requirements
from a tenant from whom an estoppel letter is
required, Seller, at its option, may deliver to
Buyer a landlord estoppel letter from Seller, in
the form of Exhibit I-2 attached hereto and
incorporated herein by this reference, and, if
applicable with respect to a Major Tenant,
including such of the Required Certifications as
may be required pursuant to the foregoing
provisions of this Section 6.3(e). The liability
of Seller under each landlord estoppel letter
shall expire and be of no further force or effect
on the one hundred eightieth (180th) day
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following the Closing Date; provided, however,
that if Seller shall obtain an estoppel letter,
which satisfies the foregoing requirements, from
any such tenant after delivery of such landlord
estoppel letter with respect to such tenant, such
landlord estoppel letter shall, as of the date of
such tenant's estoppel letter, be without further
force or effect.
(6) Notice to Tenants. A single form letter from
Seller, in the form of Exhibit J attached hereto
and incorporated herein by this reference to each
tenant under the Leases, duplicate copies of which
would be sent (i) notifying it of the sale of the
Property to Buyer, (ii) advising it that all
future payments of rent and other payments due
under the Leases are to be made to Buyer at an
address designated by Buyer, and (iii) instructing
it to obtain new certificates of insurance naming
Buyer as landlord.
(7) Non-Foreign Status Affidavit. A non-foreign status
affidavit in the form of Exhibit K attached hereto
and incorporated herein by this reference, as
required by Section 1445 of the Internal Revenue
Code, from Seller.
(8) Evidence of Authority. A certificate of an
Assistant Secretary of Prudential, and a
certificate of an authorized officer of Equity
Parsippany Venture ("EPV"), which are the sole
partners in Seller, with respect to the authority
to act on behalf of such entity of the individual
executing on behalf of such entity all documents
to be executed by it pursuant to this Agreement,
and any other evidence of authority, or
partnership or corporate consents required by the
Title Company.
(9) Seller's Certificates. The certificate of Seller
certifying to the truth and accuracy in all
material respects as of the Closing Date of the
matters set forth in Section 8.2.
(10) Property Documents. (i) To the extent in the
possession of Seller or the current manager of the
Property, (A) the original (or, if unavailable, a
copy) of the existing certificate or certificates
of occupancy for the Property, and (B) all
original (or, if unavailable, copies of)
certificates, licenses, permits, authorizations
and approvals issued for or with respect to the
Property by governmental and quasi-governmental
authorities having
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jurisdiction; and (ii) all non-proprietary books
and records located at the Property or at the
office of Seller's building manager relating to
the Property and the ownership and operation
thereof (the items described in clauses (i) and
(ii) being herein collectively called the
"Property Documents"); it being expressly agreed
that Seller shall have the right to retain copies
of the Property Documents.
(11) Other Documents. Such other documents as may be
reasonably required by the Title Company
(including a seller's affidavit of title in the
form previously agreed upon between Seller and
First American Title Insurance Company) or as may
be agreed upon by Seller and Buyer to consummate
the Transaction, which shall be sufficient to
remove (i) Schedule B-Section I Requirements (b),
(d), (g), (h), and (i), and (ii) Schedule
(B)-Section II, Exceptions (1), (2), (3), (4) and
(6).
(12) Letters of Credit as Tenant Security Deposits.
With respect to any security deposits which are
letters of credit, Seller shall (i) deliver to
Buyer at the Closing such letters of credit, (ii)
execute and deliver such other instruments as the
issuers of such letters of credit shall reasonably
require, and (iii) cooperate with Buyer to change
the named beneficiary under such letters of credit
to Buyer so long as Seller does not incur any
additional liability or expense in connection
therewith.
(13) Keys and Original Documents. Keys to all locks on
the Real Property (in Seller's or Seller's
building manager's possession) and originals or,
if originals are not available, copies, of the
Leases and Contracts (unless canceled as set forth
herein) encumbering the Property on the Closing
Date.
(14) Transfer Taxes. If applicable, duly completed and
signed real estate transfer tax returns.
(15) Assignment of Casualty and/or Condemnation Awards.
If applicable pursuant to Article 11 or Article 12
below, assignments to Buyer of condemnation awards
or casualty insurance proceeds.
(16) Closing Statement. The Closing Statement.
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d. Buyer Closing Deliveries. At the Closing, Buyer shall
deliver or cause to be delivered to Seller the
following:
(1) Balance. The Balance, as adjusted for
apportionments and other adjustments required
under this Agreement, plus any other amounts
required to be paid by Buyer at Closing.
(2) Assignment of Leases. The Assignment of Leases
executed and acknowledged by Buyer.
(3) Assignment of Equipment Leases, Commission
Agreements and Service Contracts. The Assignment
of Contracts executed and acknowledged by Buyer.
(4) Buyer's Certificates. The certificate of Buyer
required under Article 4 hereof and a certificate
of Buyer certifying as to the truth and accuracy
in all material respects as of the Closing Date of
the matters set forth in Section 8.1.
(5) Evidence of Authority. Documentation to establish
to Seller's reasonable satisfaction the due
authorization of Buyer's acquisition of the
Property and Buyer's delivery of the documents
required to be delivered by Buyer pursuant to this
Agreement (including, but not limited to, the
organizational documents of Buyer, as they may
have been amended from time to time, resolutions
of Buyer and incumbency certificates of Buyer).
(6) Other Documents. Such other documents as may be
reasonably required by the Title Company or may be
agreed upon by Seller and Buyer to consummate the
Transaction.
(7) Transfer Taxes. If applicable, duly completed and
signed real estate transfer tax returns.
(8) Closing Statement. The Closing Statement.
e. Delivery of Deed. Effective upon delivery of the Deed,
actual and exclusive possession (subject only to the
Permitted Exceptions) and risk of loss to the Property
shall pass from Seller to Buyer.
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ARTICLE 7. - CONDITIONS TO CLOSING
a. Seller's Obligations. Seller's obligation to close the
Transaction is conditioned on all of the following, any
or all of which may be waived by Seller by an express
written waiver, at its sole option:
(1) Corporate Approval. The unconditional approval of
the Transaction by (i) the Executive Committee of
Seller, (ii) both Prudential's corporate officers
and its Law Department and, if necessary, by the
Finance Committee of Prudential's Board of
Directors, each in their sole discretion (it being
acknowledged by Buyer that if the appropriate
corporate officers do not so approve the
Transaction, then no review will be made by the
Finance Committee, and (iii) EPV's partners and
legal counsel;
(2) Representations True. All representations and
warranties made by Buyer in this Agreement shall
be true and correct in all material respects on
and as of the Closing Date, as if made on and as
of such date except to the extent they expressly
relate to an earlier date;
(3) Buyer's Deliveries Complete. Buyer shall have
delivered the funds required hereunder and all of
the documents to be executed by Buyer set forth in
Section 6.4 and shall have performed all other
covenants, undertakings and obligations, and
complied with all conditions required by this
Agreement, to be performed or complied with by
Buyer at or prior to the Closing; and
(4) Resolution of Clean Water Act Issues. Buyer and
Seller shall have entered into a mutually
satisfactory written agreement in which they
resolve all issues between them relating to Permit
#14741, authorized under Section 404 of the Clean
Water Act, and its impact upon development of the
Vacant Property.
(5) Resolution of GAB Indemnification Issues. On or
before the expiration of the Due Diligence Period,
Buyer and Seller shall have entered into a
mutually satisfactory written agreement in which
they set forth the terms and conditions of
Seller's indemnity of Buyer for matters arising
from GAB Robins North America, Inc. v. PruBeta-3
et al., Docket No. MRS-L-187-98, and the partners
in Seller shall have agreed upon a mutually
18
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satisfactory allocation of their respective
responsibilities therefor.
b. Buyer's Obligations. Buyer's obligation to close the
Transaction is conditioned on all of the following, any
or all of which may be expressly waived by Buyer in
writing, at its sole option:
(1) Representations True. Subject to the provisions of
Section 8.3, all representations and warranties
made by Seller in this Agreement, as the same may
be amended as provided in Section 8.3, shall be
true and correct in all material respects on and
as of the Closing Date, as if made on and as of
such date except to the extent that they expressly
relate to an earlier date;
(2) Title Conditions Satisfied. At the time of the
Closing, title to the Property shall be as
provided in Article 3 of this Agreement;
(3) Seller's Deliveries Complete. Seller shall have
obtained the approvals described in Section
7.1(a), shall have delivered all of the documents
and other items required pursuant to Section 6.3,
and shall have performed all other covenants,
undertakings and obligations, and complied with
all conditions required by this Agreement, to be
performed or complied with by Seller at or prior
to the Closing; and
(4) Resolution of Clean Water Act Issues. Buyer and
Seller shall have entered into a mutually
satisfactory written agreement in which they
resolve all issues between them relating to Permit
#14741, authorized under Section 404 of the Clean
Water Act, and its impact upon development of the
Vacant Property.
(5) Resolution of GAB Indemnification Issues. On or
before the expiration of the Due Diligence Period,
Buyer and Seller shall have entered into a
mutually satisfactory written agreement in which
they set forth the terms and conditions of
Seller's indemnity of Buyer for matters arising
from GAB Robins North America, Inc. v. PruBeta-3
et al., Docket No. MRS-L-187-98, and the partners
in Seller shall have agreed upon a mutually
satisfactory allocation of their respective
responsibilities therefor.
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c. Waiver of Failure of Conditions Precedent. At any time
or times on or before the date specified for the
satisfaction of any condition, Buyer or Seller may elect
in writing to waive the benefit of any such condition
set forth in Section 7.1 or Section 7.2, respectively.
By closing the Transaction, Seller and Buyer shall be
conclusively deemed to have waived the benefit of any
remaining unfulfilled conditions set forth in Section
7.1 and Section 7.2, respectively. In the event any of
the conditions set forth in Sections 7.1 or 7.2 are
neither waived nor fulfilled, Buyer or Seller (as
appropriate) may terminate their obligations to perform
at the Closing and otherwise under this Agreement in
accordance with the provisions of Article 10.
ARTICLE 8. - REPRESENTATIONS AND WARRANTIES
a. Buyer's Representations. Buyer represents and warrants
to, and covenants with, Seller as follows:
i. Buyer's Authorization. Buyer is duly organized, validly
existing and in good standing under the laws of its
State of organization and the State of New Jersey, and
is authorized to consummate the Transaction and fulfill
all of its obligations hereunder and under all documents
contemplated hereunder to be executed by Buyer, and has
all necessary power to execute and deliver this
Agreement and all documents contemplated hereunder to be
executed by Buyer, and to perform all of its obligations
hereunder and thereunder. This Agreement and all
documents contemplated hereunder to be executed by
Buyer, have been duly authorized by all requisite
partnership or corporate action on the part of Buyer and
are the valid and legally binding obligation of Buyer,
enforceable in accordance with their respective terms.
Neither the execution and delivery of this Agreement and
all documents contemplated hereunder to be executed by
Buyer, nor the performance of the obligations of Buyer
hereunder or thereunder will result in the violation of
any law or any provision of the articles of
incorporation and by-laws of Buyer or will conflict with
any order or decree of any court or governmental
instrumentality of any nature by which Buyer is bound.
b. Seller's Representations. Seller represents and warrants
to Buyer as follows:
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<PAGE>
i. Seller's Authorization. The sole constituent partners of
Seller are Prudential and EPV. Seller (a) is duly
organized (or formed) and validly existing under the
laws of the State of New Jersey, (b) subject to
obtaining the approvals described in Subsection 7.1(a),
is authorized to consummate the Transaction and fulfill
all of its obligations hereunder and under all documents
contemplated hereunder to be executed by Seller, and (c)
has all necessary power to execute and deliver this
Agreement and all documents contemplated hereunder to be
executed by Seller and to perform its obligations
hereunder and thereunder. Subject to obtaining the
approvals described in Subsection 7.1(a), this Agreement
and all documents contemplated hereunder to be executed
by Seller have been duly authorized by all requisite
corporate action on the part of Seller and are the valid
and legally binding obligation of Seller enforceable in
accordance with their respective terms. Neither the
execution and delivery of this Agreement and all
documents contemplated hereunder to be executed by
Seller nor the performance of the obligations of Seller
hereunder or thereunder will result in the violation of
any law or any provision of the governing agreements of
Seller or will conflict with any order or decree of any
court or governmental instrumentality of any nature by
which Seller is bound.
ii. Seller's Representations Regarding the Property. To
Seller's knowledge (as such term is hereinafter
defined):
(1) Except as listed in Exhibit L attached hereto and
incorporated herein by this reference, Seller has
not received any written notice of pending
litigation, actions, suits, labor disputes, or
other legal proceedings against Seller or the
Property which would, if determined adversely to
Seller, adversely affect the Property.
(2) Seller has not entered into any service, supply,
maintenance, labor or utility contracts affecting
the Property which will be binding upon Buyer
after the Closing other than the Contracts listed
in Exhibit B attached hereto.
(3) Seller has not received any written notice of
default under the terms of any of the Contracts
except as listed in Exhibit L attached hereto.
(4) As of the date of this Agreement, the only tenants
of the
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Property are the tenants listed in Exhibit M
attached hereto and incorporated herein by this
reference. Exhibit M correctly sets forth a
description of all of the Leases. The Property
Documents made available to Buyer include true and
correct copies of all the Leases.
(5) Except as listed in Exhibit L attached hereto,
Seller has not received any written notice from
any governmental authority of any pending or
threatened annexation or condemnation proceedings,
or any violation of any zoning, building, fire, or
health code, statute, ordinance, rule or
regulation applicable to the Property.
iii. No Other Agreements. Seller has not entered into any
currently effective agreement to sell or dispose of all
of its interest in and to the Property (except for this
Agreement).
c. General Provisions.
i. Definition of "Seller's Knowledge". All references in
this Agreement to "Seller's knowledge" or words of
similar import shall refer only to the actual knowledge
of John Gregorits of Prudential, Leigh Rae of Prudential
and Stewart Loewenstein of EPV's partner, U S West Real
Estate, Inc. (collectively, the "Designated Employees")
and shall not be construed to refer to the knowledge of
any other officer, agent or employee of Seller, its
partners or any affiliate thereof or to impose or have
imposed upon the Designated Employees any duty to
investigate the matters to which such knowledge, or the
absence thereof, pertains, including, but not limited
to, the contents of the files, documents and materials
made available to or disclosed to Buyer or the contents
of files maintained by the Designated Employees. There
shall be no personal liability on the part of the
Designated Employees arising out of any representations
or warranties made herein.
ii. Seller's Representations Deemed Modified. To the extent
that Buyer knows or is deemed to know prior to the
expiration of the Due Diligence Period that Seller's
representations and warranties are inaccurate, untrue or
incorrect in any way, such representations and
warranties shall be deemed modified to reflect Buyer's
knowledge or deemed knowledge, as the case may be. For
purposes of this Agreement, Buyer shall be "deemed to
know" that a representation or warranty was untrue,
inaccurate or
22
<PAGE>
incorrect to the extent that this Agreement, the
Documents, any estoppel certificate executed by any
tenant of the Property and delivered to Buyer, or any
studies, tests, reports, or analyses prepared by or for
Buyer or Timothy Jones, Roger Thomas, John Kropke, or
any of its attorneys (all of the foregoing being herein
collectively called the "Buyer's Representatives") or
otherwise obtained by Buyer or Buyer's Representatives
contains information which is inconsistent with such
representation or warranty.
iii. Notice of Breach; Seller's Right to Cure. If prior to
the Closing, Buyer or any Buyer's Representative obtains
actual knowledge that any of the representations or
warranties made herein by Seller are untrue, inaccurate
or incorrect in any material respect, Buyer shall give
Seller written notice thereof within five (5) business
days of obtaining such knowledge (but, in any event,
prior to the Closing). If at or prior to the Closing,
Seller obtains knowledge that any of the representations
or warranties made herein by Seller are untrue,
inaccurate or incorrect in any material respect, Seller
shall give Buyer written notice thereof within five (5)
business days of obtaining such knowledge (but, in any
event, prior to the Closing). In either such event,
Seller shall have the right to cure, and if the cost to
cure is greater than One Hundred Thousand Dollars
($100,000) but less than Two Hundred Fifty Thousand
Dollars ($250,000) Seller shall have the obligation to
attempt to cure, such misrepresentation or breach and
shall be entitled to a reasonable adjournment of the
Closing (not to exceed ninety (90) days) for the purpose
of such cure. If Seller is unable to so cure any
misrepresentation or breach, then Buyer, as its sole
remedy for any and all such materially untrue,
inaccurate or incorrect material representations or
warranties, shall elect either (a) to waive such
misrepresentations or breaches of warranties and
consummate the Transaction without any reduction of or
credit against the Purchase Price, or (b) to terminate
this Agreement by written notice given to Seller on the
Closing Date, in which event this Agreement shall be
terminated, the Deposit shall be returned to Buyer and,
thereafter, neither party shall have any further rights
or obligations hereunder except as provided in any
section hereof that by its terms expressly provides that
it survives any termination of this Agreement. If any
such representation or warranty is untrue, inaccurate or
incorrect but is not untrue, inaccurate or incorrect in
any material respect, Buyer shall be deemed to waive
such misrepresentation or breach of warranty, and Buyer
shall be required to consummate the Transaction without
any reduction of or credit
23
<PAGE>
against the Purchase Price. The untruth, inaccuracy or
incorrectness of a representation or warranty shall be
deemed material only if Buyer's aggregate damages
resulting from the untruth, inaccuracy or incorrectness
of any of the representations or warranties are
reasonably estimated by Buyer to exceed One Hundred
Thousand Dollars ($100,000).
iv. Survival; Limitation on Seller's Liability. The
representations and warranties made by Seller in Section
8.2 shall survive the Closing and not be merged therein
for a period of one (1) year and Seller shall only be
liable to Buyer hereunder for a breach of a
representation and warranty made herein or in any of the
documents executed by Seller at the Closing with respect
to which a claim is made by Buyer against Seller on or
before the one (1) year anniversary of the Closing Date.
Anything in this Agreement to the contrary
notwithstanding, the maximum aggregate liability of
Seller for Seller's breaches of representations and
warranties herein or in any documents executed by Seller
at Closing (including, but not limited to, any Seller
estoppel letters delivered pursuant to Section 6.3(e))
shall be limited as set forth in Section 14.16 hereof.
Notwithstanding the foregoing, however, if the Closing
occurs, Buyer hereby expressly waives, relinquishes and
releases any right or remedy available to it at law, in
equity or under this Agreement to make a claim against
Seller for damages that Buyer may incur, or to rescind
this Agreement and the Transaction, as the result of any
of Seller's representations or warranties being untrue,
inaccurate or incorrect if (a) Buyer knew or is deemed
to know that such representation or warranty was untrue,
inaccurate or incorrect at the time of the Closing, or
(b) Buyer's damages as a result of such representations
or warranties being untrue, inaccurate or incorrect are
reasonably estimated to aggregate less than One Hundred
Thousand Dollars ($100,000).
ARTICLE 9. - COVENANTS
a. Buyer's Covenants. Buyer hereby covenants as follows:
i. Confidentiality. Buyer acknowledges that any information
furnished to Buyer with respect to the Property is and
has been so furnished on the condition that Buyer
maintain the confidentiality thereof. Accordingly, Buyer
shall hold, and shall cause its directors, officers and
other personnel and the other Buyer's Representatives to
hold, in strict confidence, and not disclose to
24
<PAGE>
any other person 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 or for the benefit of Buyer whether by
agents, consultants, employees or representatives of
Buyer or by Seller or any of its agents, representatives
or employees, including, but not limited to, any
information obtained by Buyer or any of Buyer's
Representatives in connection with any studies,
inspections, testings or analyses conducted by Buyer as
part of its Due Diligence. In the event the Closing does
not occur and this Agreement is terminated, Buyer shall
promptly return to Seller all copies of documents
containing any of such information without retaining any
copy thereof or extract therefrom. Notwithstanding
anything to the contrary hereinabove set forth, Buyer
may disclose such information (i) on a need-to-know
basis to any institutional lenders providing financing
to it, (ii) on a need-to-know basis to its employees,
officers, directors and shareholders, and to members of
professional firms serving it, (iii) to comply with
applicable securities or other laws, and (iv) as any
governmental agency may require in order to comply with
applicable laws or regulations. The provisions of this
Subsection 9.1.1 shall survive the Closing (and not be
merged therein) or earlier termination of this
Agreement.
ii. Approvals not a Condition to Buyer's Performance. Buyer
acknowledges and agrees that subject to Buyer's right to
terminate this Agreement prior to the expiration of the
Due Diligence Period on and subject to the terms and
conditions set forth in this Agreement, its obligation
to perform under this Agreement is not contingent upon
Buyer's ability to obtain any (a) governmental or
quasi-governmental approval of changes or modifications
in use or zoning, or (b) modification of any existing
land use restriction, or (c) consents to assignments of
any service contracts, management agreements or other
agreements which Buyer requests, or (d) endorsements to
the Title Policy.
iii. Buyer's Indemnity; Delivery of Reports. Buyer hereby
agrees to indemnify, defend, and hold Seller, its
counsel, Broker (as defined below), Broker's sales
agents, and all partners, officers, directors,
employees, agents and attorneys of Seller, its counsel,
Broker, and Broker's sales agents, and any other party
related in any way to any of the foregoing (all of which
parties are herein collectively called the "Seller
Parties"), and the Property free and harmless from and
against any and all costs, loss, damages and expenses,
of any kind or nature whatsoever (including attorneys
25
<PAGE>
fees and costs), to the extent arising out of or
resulting from the entry and/or the conduct of
activities upon the Property by Buyer, its agents,
contractors, subcontractors and/or other Buyer's
Representatives in connection with the inspections,
examinations, testings and investigations of the
Property conducted at any time prior to the Closing,
which indemnity shall survive the Closing (and not be
merged therein) or any earlier termination of this
Agreement. If the Closing fails to take place, Buyer
shall deliver promptly to Seller, without recourse,
representation or warranty, copies of all third party
reports commissioned by Buyer evidencing the results of
tests, studies or inspections of the Property, provided
that such documents shall be in Buyer's possession or
subject to its control, and provided further that Buyer
shall have the right to deliver such reports.
iv. Limit on Government Contacts. Notwithstanding any
provision in this Agreement to the contrary, except in
connection with the preparation of a so-called "Phase I"
environmental report with respect to the Property, Buyer
shall not contact any governmental official or
representative regarding Hazardous Materials (as defined
below) on or the environmental condition of the Property
without Seller's prior written consent thereto, which
consent shall not be unreasonably withheld. In addition,
if Seller's consent is obtained by Buyer, Seller shall
be entitled to receive at least five (5) days prior
written notice of the intended contact and to have a
representative present when Buyer has any such contact
with any governmental official or representative. For
purposes of this Agreement, the term "Hazardous
Material" shall mean any substance, chemical, waste or
material that is or becomes regulated by any federal,
state or local governmental authority because of its
toxicity, infectiousness, radioactivity, explosiveness,
ignitability, corrosiveness or reactivity, including,
without limitation, asbestos or any substance containing
more than 0.1 percent asbestos, the group of compounds
known as polychlorinated biphenyls, flammable
explosives, oil, petroleum or any refined petroleum
product.
v. Assumption of CBA Obligations. In the event that Seller
or Seller's managing agent employs any employees at the
Property who are subject to any collective bargaining
agreement (any such employees and collective bargaining
agreements being listed on Exhibit N attached hereto and
incorporated herein by this reference), Buyer shall, on
or before the Closing Date, become, or retain a managing
agent for the Property who is, a member of any required
union or other association and shall assume, or
26
<PAGE>
cause such managing agent to assume, all of the
obligations of Seller or its managing agent in
accordance with such collective bargaining agreements
with respect to such employees or any replacements of
such employees.
vi. Use of the Name Prudential Business Campus. Buyer shall
have the nonexclusive, nontransferable right, license,
and privilege (but not any obligation) to use the name
"Prudential Business Campus" (the "Name") for the
Property for a period of twenty four (24) months
commencing on the Closing Date. Buyer shall not use the
Name directly or indirectly on or in connection with, or
in relation to, any property other than the Property,
and shall not otherwise use the name Prudential or any
variant thereof, the "Prudential Rock" logo or any
variant thereof, or any other trademark, logo, name,
likeness, term, phrase or design which is likely to be
confusingly similar to, or a colorable imitation of, a
trademark or other trademark owned by Seller or
Prudential in any manner whatsoever, including but not
limited to any use as part of a company name, property
name or trade name, as a service mark, in its
advertising or on Buyer's stationery, business cards or
the like, except as provided herein. No right or license
is granted hereby by implication or otherwise under any
mark, trademark, service mark or trade name of Seller or
Prudential except as specifically provided herein. No
right to assign, transfer or sublicense is granted or
permitted hereunder; any direct or indirect attempt to
assign, transfer or sublicense any of the rights granted
hereunder in any way shall render null and void Buyer's
right to use the Name.
b. Seller's Covenants. Seller hereby covenants as follows:
i. Service Contracts. Without Buyer's prior consent, which
consent during the Due Diligence Period, shall not be
unreasonably withheld, between the date hereof and the
Closing Date Seller shall not extend, renew, replace or
modify any Contract unless such contract (as so
extended, renewed, replaced or modified) can be
terminated by the owner of the Property without penalty
on not more than thirty (30) days' notice.
ii. Maintenance of Property. Except to the extent Seller is
relieved of such obligations by Article 12 hereof,
between the date hereof and the Closing Date Seller
shall maintain and keep the Property in a manner
consistent with Seller's past practices with respect to
the Property; provided, however, that Buyer hereby
agrees that it shall accept the Property subject to, and
Seller shall have no
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<PAGE>
obligation to cure, (i) all violations of law or
municipal ordinances, orders or requirements and (ii)
all physical conditions which would give rise to
violations existing (collectively, Violations"), which,
with respect to both clauses (i) and (ii), exist on the
last day of the Due Diligence Period. With respect to
Violations which arise after the Due Diligence Period
and prior to the Closing Date, and
(a) if in Seller's reasonable opinion the cost to cure
such Violation would be less than Two Hundred Fifty
Thousand Dollars ($250,000), Buyer shall be required to
close the Transaction on the Closing Date, and at
Seller's election Seller shall either (x) cure the
Violation prior to Closing, or (y) give Buyer a credit
at Closing in the amount of Seller's reasonable estimate
of the cost to cure the Violation, or
(b) if in Seller's reasonable opinion the cost to cure
such Violation would be Two Hundred Fifty Thousand
Dollars ($250,000) or more, at Seller's election Seller
shall either (x) cure the Violation not later than
ninety (90) days after the scheduled Closing Date,
whereupon Buyer shall be required to close the
Transaction within ten (10) days after Seller has
effected a cure of the Violation, or (y) terminate this
Agreement, in which event the Deposit shall be paid to
Buyer and, thereafter, the parties shall have no further
rights or obligations hereunder except for obligations
which expressly survive the termination of this
Agreement.
Between the date hereof and the Closing Date, Seller (a) will
advise Buyer of any written notice Seller receives after the
date hereof from any governmental authority relating to the
violation of any law or ordinance regulating the condition or
use of the Property, and (b) will promptly notify Buyer of any
material change affecting the Property of which Seller has
knowledge.
iii. Access to Property. Between the date hereof and the
Closing Date Seller shall allow Buyer or Buyer's
Representatives access to the Property upon reasonable
prior notice at reasonable times provided (a) such
access does not interfere with the operation of the
Property or the rights of tenants; (b) unless
accompanied by a representative of Seller, Buyer shall
not contact any tenant without Seller's prior written
consent; (c) Seller or its designated representative
shall have the right to pre-approve and be present
during any physical testing of the Property; and (d)
Buyer shall return the Property to the condition
existing prior to such tests
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and inspections. Prior to such time as Buyer or any of
Buyer's Representatives enter the Property, Buyer shall
obtain policies of general liability insurance which
name Seller as an additional insured and which are with
such insurance companies, provide such coverages and
carry such limits as Seller shall reasonably require.
Promptly after Seller's request therefor, Buyer shall
provide Seller with certificates of insurance evidencing
that Buyer has obtained the aforementioned policies of
insurance.
iv. Information and Audit Cooperation. At Buyer's written
request, at any time within ninety (90) days after the
Closing, Seller agrees to provide or cause its property
manager to provide, to Buyer's designated independent
auditor, access to the books and records of the Property
and all related information regarding the three-year
period for which Buyer is required to have the Property
audited under the regulations of the Securities and
Exchange Commission, and a letter regarding the books
and records of the Property in substantially the same
form as Exhibit O attached hereto and made a part
hereof, or such other form as Seller may submit subject
to the approval of Buyer's independent auditor, which
approval shall not be unreasonably withheld, in
connection with the normal course of auditing the
Property in accordance with generally accepted auditing
standards. At Seller's election, the letter may be
signed by Seller or on behalf of Seller by its property
manager of the Property. Buyer agrees to indemnify and
hold harmless Seller, its property manager, and the
person signing such letter from any claim, damage, loss
or liability to which Seller, the property manager or
such person is at any time subjected by a person who is
not a party to this Agreement as a result of its
compliance with this paragraph, unless due to the
intentional misrepresentation or fraud of such person.
The obligations of Buyer and Seller under this Section
9.2.4 shall survive the Closing and not be merged
therein.
c. Mutual Covenants.
i. Publicity. Seller and Buyer each hereby covenant that
(a) prior to the Closing neither Seller nor Buyer shall
issue any press release or public statement (a
"Release") with respect to the Transaction without the
prior consent of the other, except to the extent
required by law (including any securities laws), and (b)
after the Closing, any Release issued by either Seller
or Buyer shall be subject to the review and approval of
both parties (which approval shall not be unreasonably
withheld). If either Seller or
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Buyer is required by law to issue a Release, such party
shall, at least two (2) business days prior to the
issuance of the same, deliver a copy of the proposed
Release to the other party for its review.
ii. Broker. Seller and Buyer expressly acknowledge that
Eastdil Realty Company, L.L.C. ("Broker") has acted as
the exclusive broker with respect to the Transaction and
with respect to this Agreement, and that Seller shall
pay any brokerage commission due to Broker in accordance
with the separate agreement between Seller and Broker.
Seller and Buyer each represents and warrants to the
other that it has not dealt with any other broker,
finder or similar person or entity in connection with
the Transaction and each agrees to hold harmless the
other and indemnify the other from and against any and
all damages, costs or expenses (including, but not
limited to, reasonable attorneys' fees and
disbursements) suffered by the indemnified party as a
result of acts of the indemnifying party that would
constitute a breach of its representation and warranty
in this section.
iii. Tax Contests; Tax Refunds and Credits. Seller shall have
the right to continue and control the progress of and to
make all decisions with respect to any contest of the
real estate taxes for the Property due and payable for
the calendar year in which the Closing occurs and all
prior calendar years. Buyer shall have the right to
control the progress of and to make all decisions with
respect to any contest of the real estate taxes for the
Property due and payable for any calendar year
subsequent to the calendar year in which the Closing
occurs. All real estate and personal property tax
refunds and credits received after Closing with respect
to the Property shall be applied in the following order
of priority: first, to pay the costs and expenses
(including reasonable attorneys' fees and expenses)
incurred in connection with obtaining such tax refund or
credit; second, to pay any amounts due to any tenant of
the Property as a result of such tax refund or credit to
the extent required pursuant to the terms of the Leases;
and third, to be apportioned between Buyer and Seller as
follows:
(1) with respect to any refunds or credits
attributable to real estate and personal property
taxes due and payable in the fiscal year in which
the Closing occurs (regardless of the year for
which such taxes are assessed), such refunds and
credits shall be apportioned between Buyer and
Seller in proportion to the number of days in such
fiscal year that
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each party owned the Property (with title to the
Property being deemed to have passed as of 12:01
a.m. on the Closing Date);
(2) with respect to any refunds or credits
attributable to real estate and personal property
taxes due and payable during any period prior to
the fiscal year in which the Closing occurs
(regardless of the year for which such taxes are
assessed), Seller shall be entitled to the entire
refunds and credits; and
(3) with respect to any refunds or credits
attributable to real estate and personal property
taxes due and payable during any period after the
fiscal year in which the Closing occurs
(regardless of the year for which such taxes are
assessed), Buyer shall be entitled to the entire
refunds and credits.
iv. Survival. The provisions of this Section 9.3 shall
survive the Closing (and not be merged therein) or
earlier termination of this Agreement.
ARTICLE 10. - FAILURE OF CONDITIONS
a. To Seller's Obligations. If, on or before the Closing
Date, (i) Buyer is in default of any of its obligations
hereunder, or (ii) any of Buyer's representations or
warranties are untrue in any material respect, or (iii)
the Closing otherwise fails to occur by reason of
Buyer's failure or refusal to perform its obligations
hereunder in a prompt and timely manner, then Seller may
elect to (a) terminate this Agreement by written notice
to Buyer, and Seller hereby expressly waives all other
rights and remedies at law, in equity or otherwise
including, without limitation, damages or specific
performance; or (b) waive the condition and proceed to
close the Transaction. If this Agreement is so
terminated, then Seller shall be entitled to the Deposit
as liquidated damages, and thereafter neither party to
this Agreement shall have any further rights or
obligations hereunder other than any arising under any
section herein which expressly provides that it survives
the termination of this Agreement.
b. To Buyer's Obligations. If, at the Closing, (i) Seller
is in default of any of its obligations hereunder, or
(ii) any of Seller's representations or warranties are
untrue in any material respect,
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or (iii) the Closing otherwise fails to occur by reason
of Seller's failure or refusal to perform its
obligations hereunder in a prompt and timely manner,
Buyer shall have the right, to elect, as its sole and
exclusive remedy, to (a) terminate this Agreement by
written notice to Seller, promptly after which the
Deposit shall be returned to Buyer, or (b) waive the
condition and proceed to close the Transaction, or (c)
seek specific performance of this Agreement by Seller.
ARTICLE 11. - CONDEMNATION
a. Condemnation.
i. Right to Terminate. If, prior to the Closing Date, all
or any significant portion (as hereinafter defined) of
the Property is taken by eminent domain (or is the
subject of a pending taking which has not yet been
consummated), Seller shall notify Buyer in writing of
such fact promptly after obtaining knowledge thereof,
and Buyer shall have the right to terminate this
Agreement by giving written notice to Seller no later
than ten (10) days after the giving of Seller's notice,
and the Closing Date shall be extended, if necessary, to
provide sufficient time for Buyer to make such election.
The failure by Buyer to so elect in writing to terminate
this Agreement within such ten (10) day period shall be
deemed an election not to terminate this Agreement. For
purposes hereof, a "significant portion" of the Property
shall mean such a portion as shall have a value, as
reasonably determined by Seller, and approved by Buyer,
which approval shall not be unreasonably withheld, in
excess of One Million Dollars ($1,000,000). If Buyer
elects to terminate this Agreement as aforesaid, the
provisions of Section 12.3 shall apply.
ii. Assignment of Proceeds. If (a) Buyer does not elect to
terminate this Agreement as aforesaid if all or any
significant portion of the Property is taken, or if (b)
a portion of the Property not constituting a significant
portion of the Property is taken or becomes subject to a
pending taking, by eminent domain, there shall be no
abatement of the Purchase Price; provided, however,
that, at the Closing, Seller shall pay to Buyer the
amount of any award for or other proceeds on account of
such taking which have been actually paid to Seller
prior to the Closing Date as a result of such taking
(less all reasonable, out-of-pocket costs and expenses,
including attorneys' fees and costs, incurred by Seller
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as of the Closing Date in obtaining payment of such
award or proceeds) and, to the extent such award or
proceeds have not been paid, Seller shall assign to
Buyer at the Closing (without recourse to Seller) the
rights of Seller to, and Buyer shall be entitled to
receive and retain, all awards for the taking of the
Property or such portion thereof.
ARTICLE 12. - DESTRUCTION OR DAMAGE
a. Destruction or Damage. In the event any of the Property
is damaged or destroyed prior to the Closing Date,
Seller shall notify Buyer in writing of such fact
promptly after obtaining knowledge thereof. If any such
damage or destruction (a) is an insured casualty and (b)
would cost less than One Million Dollars ($1,000,000) to
repair or restore, then this Agreement shall remain in
full force and effect and Buyer shall acquire the
Property upon the terms and conditions set forth herein.
In such event, Buyer shall receive a credit against the
Purchase Price equal to the deductible amount applicable
under Seller's casualty policy (less all reasonable,
out-of-pocket costs and expenses, including attorneys'
fees and costs, incurred by Seller as of the Closing
Date in connection with the negotiation and/or
settlement of the casualty claim with the insurer (the
"Realization Costs")), and Seller shall assign to Buyer
all of Seller's right, title and interest in and to all
proceeds of insurance on account of such damage or
destruction. In the event the Property is damaged or
destroyed prior to the Closing Date and the cost of
repair would equal or exceed One Million Dollars
($1,000,000), or the casualty is an uninsured casualty,
then, notwithstanding anything to the contrary set forth
above in this section, Buyer shall have the right, at
its election, to terminate this Agreement. Buyer shall
have thirty (30) days after Seller notifies Buyer that a
casualty has occurred to make such election by delivery
to Seller of a written election notice (the "Election
Notice") and the Closing Date shall be extended, if
necessary, to provide sufficient time for Buyer to make
such election. The failure by Buyer to deliver the
Election Notice within such thirty (30) day period shall
be deemed an election not to terminate this Agreement.
In the event Buyer does not elect to terminate this
Agreement as set forth above, this Agreement shall
remain in full force and effect, Seller shall assign to
Buyer all of Seller's right, title and interest in and
to any and all proceeds of insurance on account of such
damage or destruction, if any, and, if the casualty was
an insured casualty, Buyer shall receive a credit
against the Purchase Price equal to
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the deductible amount (less the Realization Costs) under
Seller's casualty insurance policy.
b. Insurance. Seller shall maintain the property insurance
coverage currently in effect for the Property through
the Closing Date.
c. Effect of Termination. If this Agreement is terminated
pursuant to Section 11.1 or Section 12.1, Seller
promptly shall direct that the Deposit be refunded to
Buyer. Upon such refund, this Agreement shall terminate
and neither party to this Agreement shall have any
further rights or obligations hereunder other than any
arising under any section herein which expressly
provides that it shall survive the termination of this
Agreement.
d. Waiver. The provisions of Article 11 and this Article 12
supersede the provisions of any applicable statutory or
decisional law with respect to the subject matter of
this Article 11.
ARTICLE 13. - LEASING MATTERS
a. New Leases. After the date hereof, Seller shall not,
without Buyer's prior written consent in each instance,
which consent shall be at Buyer's absolute discretion
after the expiration of the Due Diligence Period, but
which consent shall not be unreasonably withheld during
the Due Diligence Period, and in all events shall be
given or denied with the reasons for such denial
specified in reasonable detail, within five (5) business
days after receipt by Buyer of the information referred
to in the next sentence, enter into a new lease for
space in the Property or renew or extend any Lease;
except that during the Due Diligence Period Seller may
renew, extend or expand existing Leases pursuant to the
exercise by a tenant of a renewal, extension or
expansion option contained in such tenant's Lease.
Seller shall furnish Buyer with all information
regarding any proposed new leases, renewals and
extensions which are subject to Buyer's approval,
reasonably necessary to enable Buyer to make informed
decisions with respect to the advisability of the
proposed action. If Buyer fails to object in writing to
any such proposed new lease, renewal or extension, as
the case may be, within five (5) business days after
receipt of the aforementioned information, Buyer shall
be deemed to have approved the proposed new lease,
renewal or extension, as the case may be. Seller shall
deliver to Buyer a true and complete copy of each such
new lease, renewal and extension
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agreement, if any, promptly after the execution and
delivery thereof.
b. Lease Expenses. At Closing, Buyer shall reimburse Seller
for any and all fees paid by Seller prior to Closing or
costs and expenses incurred by Seller prior to Closing
(such fees, costs and expenses being herein collectively
called the "Lease Expenses"), arising out of or in
connection with:
(1) any extensions, renewals or expansions under the
Leases exercisable and exercised by any tenant
between the date hereof and the Closing Date; and
(2) provided the same has been approved by Buyer as
provided above, any lease for space at the
Property entered into between the date hereof and
the Closing Date, or any extension, renewal or
expansion of a Lease where such Lease does not
provide for its extension, renewal or expansion,
entered into on or after the date hereof (a "New
Lease").
Lease Expenses shall include, without limitation, (i) brokerage
commissions and fees to effect any such leasing transaction, (ii)
expenses incurred for repairs, improvements, equipment, painting,
decorating, partitioning and other items to satisfy the tenant's
requirements with regard to such leasing transaction, (iii) legal
fees for services in connection with the preparation of documents
and other services rendered in connection with the effectuation of
the leasing transaction, (iv) if there are any rent concessions
covering any period that the tenant has the right to be in
possession of the demised space, the rents that would have accrued
during the period of such concession prior to the Closing Date as if
such concession were amortized over (A) with respect to any
extension or renewal, the term of such extension or renewal, (B)
with respect to any expansion, that portion of the term remaining
under the subject Lease after the date of any expansion, or (C) with
respect to any New Lease, the entire initial term of any New Lease,
and (v) expenses incurred for the purpose of satisfying or
terminating the obligations of a tenant under a New Lease to the
landlord under another lease (whether or not such other lease covers
space in the Property). At the Closing, Buyer shall assume Seller's
obligations to pay, when due (whether on a stated due date or
accelerated) any Lease Expenses unpaid as of the Closing, and Buyer
hereby agrees to indemnify and hold Seller harmless from and against
any and all claims for such Lease Expenses which remain unpaid for
any reason at the time of Closing, which obligations of Buyer shall
survive the Closing and shall not be merged therein. Each party
shall make available to the other all records, bills, vouchers and
other data in such party's control verifying Lease Expenses and the
payment thereof.
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c. Other Lease Activity. Except as provided in this Section
13.3, without the prior consent of Buyer, which, during
the Due Diligence Period, shall not be unreasonably
withheld (a) no Lease shall be modified or amended in
any material and adverse manner, (b) Seller shall not
consent to any assignment or sublease in connection with
any Lease or New Lease, and (c) Seller shall not remove
any tenant under any Lease or New Lease, whether by
summary proceedings or otherwise, except by reason of a
default of the tenant under the Lease or New Lease. In
furtherance of the foregoing, Seller shall deliver to
Buyer a written notice of each proposed action of the
type described in clauses (a) through (c) above which
require Buyer's consent and which Seller has been asked
or proposes to take, stating, if applicable, whether
Seller is willing to consent to such action and setting
forth the relevant information therefor. Buyer shall
notify Seller in writing whether or not it approves such
action within five (5) business days after delivery to
Buyer of Seller's notice containing the aforementioned
information. If Buyer notifies Seller that it
disapproves such action, Buyer's notice shall state with
specificity the reasons for such disapproval. If Buyer
shall not give written notice of its disapproval of such
action within such five (5) business day period, Buyer
shall be deemed to have approved such action. If any
Lease requires that the landlord's consent be given
under the applicable circumstances (or not be
unreasonably withheld), then Buyer shall be deemed ipso
facto to have approved such action. Subject to its
reimbursement rights pursuant to Section 13.2, Seller
shall perform all of the obligations of the landlord
under the Leases and New Leases which under the terms of
such Leases and New Leases are required to be performed
by the landlord prior to the Closing Date.
d. Lease Enforcement. Subject to the provisions of Section
13.3 above, prior to the Closing Date, Seller shall have
the right, but not the obligation (except to the extent
that Seller's failure to act shall constitute a waiver
of such rights or remedies), to enforce the rights and
remedies of the landlord under any Lease or New Lease,
by summary proceedings or otherwise, and to apply all or
any portion of any security deposits then held by Seller
toward any loss or damage incurred by Seller by reason
of any defaults by tenants.
e. Leasing Commissions on Existing Leases. Seller shall be
responsible for the payment of all brokerage commissions
and
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fees incurred in effecting all Leases (other than New
Leases), and with respect to any extensions, expansions
or renewals thereof which have been exercised by the
tenants prior to the date hereof. Buyer shall be
responsible for all other brokerage commissions and fees
which may become payable with respect to such Leases.
ARTICLE 14. - MISCELLANEOUS
a. Buyer's Assignment. Buyer shall not assign this
Agreement or its rights hereunder to any individual or
entity without the prior written consent of Seller,
which consent Seller may grant or withhold in its sole
discretion, and any such assignment shall be null and
void. Notwithstanding the foregoing Buyer may, without
Seller's consent, make an assignment prior to Closing to
Mack-Cali Realty, L.P. ("MCR") or to any entity directly
or indirectly owned or controlled by MCR, in which event
Buyer shall remain liable to Seller to the extent it has
any liability under this Agreement.
b. Designation Agreement. Section 6045(e) of the United
States Internal Revenue Code and the regulations
promulgated thereunder (herein collectively called the
"Reporting Requirements") require an information return
to be made to the United States Internal Revenue
Service, and a statement to be furnished to Seller, in
connection with the Transaction. Title Company ("Agent")
is either (i) the person responsible for closing the
Transaction (as described in the Reporting Requirements)
or (ii) the disbursing title or escrow company that is
most significant in terms of gross proceeds disbursed in
connection with the Transaction (as described in the
Reporting Requirements). Accordingly:
(1) Agent is hereby designated as the "Reporting
Person" (as defined in the Reporting Requirements)
for the Transaction. Agent shall perform all
duties that are required by the Reporting
Requirements to be performed by the Reporting
Person for the Transaction.
(2) Seller and Buyer shall furnish to Agent, in a
timely manner, any information requested by Agent
and necessary for Agent to perform its duties as
Reporting Person for the Transaction.
(3) Agent hereby requests Seller to furnish to Agent
Seller's
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correct taxpayer identification number. Seller
acknowledges that any failure by Seller to provide
Agent with Seller's correct taxpayer
identification number may subject Seller to civil
or criminal penalties imposed by law. Accordingly,
Seller hereby certifies to Agent, under penalties
of perjury, that Seller's correct taxpayer
identification number is 22-1211670.
(4) Each of the parties hereto shall retain this
Agreement for a period of four (4) years following
the calendar year during which Closing occurs.
c. Survival/Merger. Except for the provisions of this
Agreement which are explicitly stated to survive the
Closing, (a) none of the terms of this Agreement shall
survive the Closing, and (b) the delivery of the Deed
and any other documents and instruments by Seller and
the acceptance thereof by Buyer shall effect a merger,
and be deemed the full performance and discharge of
every obligation on the part of Buyer and Seller to be
performed hereunder.
d. Integration; Waiver. This Agreement, together with the
Schedules and Exhibits hereto, embodies and constitutes
the entire understanding between the parties with
respect to the Transaction 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. No waiver by either
party hereto of any failure or refusal by the other
party to comply with its obligations hereunder shall be
deemed a waiver of any other or subsequent failure or
refusal to so comply.
e. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of
New Jersey except to the extent its conflict of law
principles would direct the application of the law of a
different state or forum.
f. Captions Not Binding; Schedules and Exhibits. The
captions in this Agreement are inserted for reference
only and in no way define, describe or limit the scope
or intent of this Agreement or of any of the provisions
hereof. All Schedules and Exhibits
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attached hereto shall be incorporated by reference as if
set out herein in full.
g. Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
h. Severability. If any term or provision of this Agreement
or the application thereof to any persons or
circumstances shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement or the
application of such term or provision to persons or
circumstances other than those as to which it is held
invalid or unenforceable shall not be affected thereby,
and each term and provision of this Agreement shall be
valid and enforced to the fullest extent permitted by
law.
i. Notices. Any notice, request, demand, consent, approval
and other communications under this Agreement shall be
in writing, and shall be deemed duly given or made at
the time and on the date when personally delivered as
shown on a receipt therefor (which shall include
delivery by a nationally recognized overnight delivery
service) or three (3) business days after being mailed
by prepaid registered or certified mail, return receipt
requested, to the address for each party set forth
below. Any party, by written notice to the other in the
manner herein provided, may designate an address
different from that set forth below.
IF TO BUYER:
Cali Realty Corporation
11 Commerce Drive
Cranford, NJ 07016
Attention: Mr. Timothy Jones and Roger W. Thomas, Esq.
COPY TO:
Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, NY 10022-4441
Attention: Wayne B. Heicklen, Esq.
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IF TO SELLER:
The Prudential Insurance Company of America
8 Campus Drive, 4th Floor
Arbor Circle South
Parsippany, NJ 07054-4493
Attention: Ms. Leigh Rae
COPY TO:
The Prudential Insurance Company of America
8 Campus Drive, 4th Floor
Arbor Circle South
Parsippany, NJ 07054-4493
Attention: John Kelly, Esq.
AND COPY TO:
BetaWest Properties, Inc.
1999 Broadway, Suite 2000
Denver, Colorado 80202
Attention: Vice President, General Counsel
AND COPY TO:
U S West, Inc.
188 Inverness Drive West
Eighth Floor
Englewood, CO 80112
Attention: Vice President
AND COPY TO:
U S West, Inc.
7800 E. Orchard
Englewood, Colorado 80111
Attention: Legal
AND COPY TO:
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, Illinois 60606
Attention: David A. Lapins, Esq.
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j. Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original and all
of which counterparts taken together shall constitute
one and the same agreement.
k. No Recordation. Seller and Buyer each agrees that
neither this Agreement nor any memorandum or notice
hereof shall be recorded and Buyer agrees to indemnify
Seller against all costs, expenses and damages,
including, without limitation, reasonable attorneys'
fees and disbursements, incurred by Seller by reason of
the filing by Buyer of this Agreement or memorandum or
notice. Notwithstanding the foregoing, a notice of
settlement may be recorded.
l. Additional Agreements; Further Assurances. Subject to
the terms and conditions herein provided, each of the
parties hereto shall execute and deliver such documents
as the other party shall reasonably request in order to
consummate and make effective the Transaction; provided,
however, that the execution and delivery of such
documents by such party shall not result in any
additional liability or cost to such party.
m. Construction. The parties acknowledge that each party
and its counsel have reviewed and revised 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 amendment,
Schedule or Exhibit hereto. Whenever Buyer agrees, in
this Agreement or in any document executed and delivered
by Buyer in connection with the Transaction, to defend,
indemnify and/or hold Seller harmless, Prudential and
EPV jointly, and each of Prudential and EPV, separately,
shall have the right to enforce such obligation against
Buyer.
n. ERISA. To satisfy compliance with ERISA, Buyer
represents and warrants to Seller that, as of the date
hereof and as of the Closing Date:
(a) Buyer's rights under this Agreement do not, and upon its acquisition
by Buyer the Property shall not, constitute "plan assets" within the
meaning of 29 C.F.R. Section 2510.3-101, because one or more of the
following circumstances is true:
(i) Equity interests in Buyer are publicly offered securities,
within the meaning of 29 C.F.R. Section 2510.3-101(b)(2); or
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(ii) Less than twenty-five (25%) percent of all equity interests in
Buyer are held by "benefit plan investors" within the meaning
of 29 C.F.R. Section 2510.3-101(f)(2); or
(iii) Buyer qualifies as an "operating company", "venture capital
operating company", or a "real estate operating company"
within the meaning of 29 C.F.R. Section 2510.3-101(c), (d) or
(e).
(b) Buyer is not a "governmental plan" within the meaning of Section
3(32) of ERISA and the execution of this Agreement and the purchase
of the Property by Buyer is not subject to state statutes regulating
investments of and fiduciary obligations with respect to
governmental plans.
The representations and warranties of Buyer under this section
shall survive the Closing and shall not be merged therein.
o. Business Day. As used herein, the term "business day"
shall mean any day other than a Saturday, Sunday, or any
Federal, or State of New Jersey holiday. If any period
should expire on a non-Business Day, then the period
shall be extended to the next Business Day.
p. Seller's Maximum Aggregate Liability. Notwithstanding
any provision to the contrary contained in this
Agreement or any documents executed by Seller pursuant
hereto or in connection herewith, the maximum aggregate
liability of Seller, and the maximum aggregate amount
which may be awarded to and collected by Buyer, under
this Agreement (including, without limitation, the
breach of any representations and warranties contained
herein) and any and all documents executed pursuant
hereto or in connection herewith (including, without
limitation, any landlord estoppel letter provided by
Seller in accordance with the terms of Section 6.3(e)
hereof), for which a claim is timely made by Buyer shall
not exceed Four Million Fifty Thousand and No/100
Dollars ($4,050,000). The provisions of this section
shall survive the Closing and shall not be merged
therein.
q. Like-Kind Exchange. Buyer agrees to cooperate reasonably
with Seller in effecting an exchange transaction which
includes the Property, pursuant to Section 1031 of the
United States Internal Revenue Code, provided that any
such exchange transaction, and the related
documentation, shall: (a) be at the sole cost and
expense of Seller, (b) not require Buyer to execute any
contract, make any commitment, or incur any obligations,
contingent or otherwise, to third parties, (c) not cause
Buyer to be liable or
42
<PAGE>
potentially liable for any environmental conditions
affecting property other than the Property, (d) not
delay the closing of the Transaction, (e) not include
Buyer's acquiring title to any property other than the
Property or otherwise becoming involved in a transaction
with a third party, and (f) not otherwise be contrary to
or inconsistent with the terms of this Agreement.
Notwithstanding anything to the contrary contained
herein, Buyer is not to incur any, and Seller shall
reimburse, indemnify and hold Buyer harmless from, any
and all costs, expenses and liabilities incurred solely
from Buyer's accommodation of such tax deferred
exchange, including, without limitation, reasonable
attorneys' fees, and any title or escrow fees or
expenses. The obligations of Buyer under this section
shall survive the Closing and shall not be merged
therein.
43
<PAGE>
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be duly
executed on its behalf on the day and year first above written.
PRUBETA-3, a New Jersey general partnership
By: The Prudential Insurance Company of America, as
General Partner of PruBeta-3
By:___________________________________
Name:_________________________________
Its Vice President
By: Equity Parsippany Venture, a Colorado general
partnership, as General Partner of PruBeta-3
By: U S West Real Estate, Inc., a Colorado
corporation, as Managing Partner
By: BetaWest, Inc., a Colorado
corporation formerly known as
BW Acquisition, Inc., as authorized
agent
By:___________________________________
Name:_________________________________
Its:__________________________________
Mack-Cali Realty Acquisition Corp., a New Jersey
corporation
By:_____________________________________________________
Name:___________________________________________________
Its:____________________________________________________
44
SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT (this "Amendment") is
made and entered into as of this 27th day of March, 1998 by and between (i)
PRUBETA-3, a New Jersey general partnership ("Seller") and (ii) Mack-Cali Realty
Acquisition Corp., a New Jersey corporation ("Acquisition"), Parsippany Campus
Realty Associates, L.P. ("PCRA") Mack-Cali Realty, L.P. ("LP", and together with
PCRA, "Buyer").
RECITALS
A. Seller and Acquisition are parties to that certain Purchase and Sale
Agreement dated as of February 18, 1998, as amended by letter agreement dated
February 27, 1998 (as so amended, the "Contract"), pursuant to which Seller
agreed to sell and Acquisition agreed to purchase the portion of The Prudential
Business Campus described therein, located in Parsippany, New Jersey and
Hanover, New Jersey, upon the terms and conditions set forth in the Contract.
Acquisition has assigned all of its right, title and interest to and under the
Contract to LP, and LP has requested that Seller convey the Vacant Property to
PCRA.
B. Seller and Buyer now desire to amend the Contract upon the terms and
conditions hereinafter set forth.
AGREEMENTS
NOW THEREFORE, for and in consideration of the Recitals set forth above,
the mutual covenants contained herein and other good and valuable consideration,
the receipt, adequacy, and sufficiency of which hereby are acknowledged, Seller
and Buyer hereby agree as follows:
1. Recitals Incorporated; Certain Defined Terms. Capitalized terms that
are not otherwise defined in this Amendment shall have the same meanings herein
as are ascribed to such terms in the Contract.
2. Permit Resolution. The following provision is hereby added to the
Contract as Section 9.4:
A. Seller and Purchaser acknowledge that (i) Permit #14741, authorized under
Section 404 of the Clean Water Act (the "Permit"), expired on February 25, 1998,
(ii) that the applicable governmental authorities have not extended or renewed
the Permit, and (iii) as a result, the "sickle-shaped" portion of the Vacant
Property specifically identified on Exhibit P hereto (the "Identified Parcel")
might be identified as "wetlands" and if so, could not be developed without
further action. At Closing, Buyer shall receive a reduction in the Purchase
Price in the amount of
<PAGE>
Five Million Dollars ($5,000,000), and until the fifth (5th) anniversary of the
Closing Date, Seller shall have the right to earn all or a portion of such Five
Million Dollars ($5,000,000) as provided herein.
B. From and after the Closing Date, Seller shall lead the efforts, and Seller
and Buyer shall use their respective good faith, reasonable efforts to work
together, and with the applicable governmental and quasi-governmental
authorities having jurisdiction over the Vacant Property, (i) to renew the
Permit, which results in Buyer being in substantially the same position
regarding the developability of the Identified Parcel as if the Permit had not
expired, (ii) to obtain a new Clean Water Act Section 404 or comparable permit
which results in Buyer being in substantially the same position regarding the
developability of the Identified Parcel as if the Permit had not expired, or
(iii) by some other means obtaining a resolution, including, without limitation,
obtaining a classification of the Identified Parcel by the applicable
governmental authorities as non-wetlands, which results in Buyer being in
substantially the same position regarding the developability of the Identified
Parcel as if the Permit had not expired (any of the foregoing, a "Resolution").
To the extent necessary to achieve the Resolution, Buyer shall allow Seller, its
agents and contractors, at Seller's cost and expense, access to the Identified
Parcel, for any legitimate purpose related to Seller's rights and
responsibilities hereunder; provided there is no unreasonable interference with
the operation and/or development of the balance of the Vacant Property and
Seller obtains Buyer's prior approval before any entry (which approval shall not
be unreasonably conditioned, withheld or delayed). Seller hereby agrees to
indemnify, defend and hold Buyer, and Buyer's partners, officers, directors,
employees, agents and attorneys, harmless from and against any and all claims,
costs, losses, liabilities, damages and expenses of any kind or nature
whatsoever (including reasonable attorneys' fees and costs) to the extent
arising out of or resulting from personal injury or damage to tangible property
caused by the entry and/or the conduct of activities upon the Vacant Property by
Seller, its agents, contractors, subcontractors after the Closing Date.
C. Seller shall coordinate its efforts to achieve the Resolution with respect to
the Identified Parcel with Buyer's efforts to develop the balance of the Vacant
Property, and otherwise consult with and keep Buyer apprised as to the status of
Seller's efforts to achieve the Resolution. Seller shall not file any material
application (other than an application previously filed by Seller) or otherwise
take any material action relating to the achievement of the Resolution without
Buyer's prior consent, which shall not be unreasonably conditioned, withheld or
delayed. Buyer shall cooperate with Seller in all reasonable respects in
connection with Seller's efforts to achieve the Resolution, provided, however,
under no circumstance shall Buyer be required to change its development plan for
the portion of the Vacant Property shown on the Tax Map of the Township of
Parsippany as Block 202, Lot 7.01 (the "Development Parcel") if such change
would in any material adverse respect affect Buyer's ability to achieve the
maximum development potential of the Development Parcel, or cause Buyer to incur
any material additional cost or expense in connection with such development.
Nothing herein shall be construed to require Buyer to pursue its development of
the Development Parcel at any time if in Buyer's sole judgment such pursuit is
not appropriate at such time. If Buyer elects to pursue such development, Buyer
shall consult with Seller prior to taking any actions relating to wetlands
issues affecting the Vacant Property,
47
<PAGE>
and shall coordinate such efforts with Seller so as not to unreasonably impair
or delay the achievement of the Resolution.
D. If the Resolution is achieved on or before the fifth (5th) anniversary of the
Closing Date, then within ten (10) business days after the date upon which the
Resolution is achieved, Buyer shall pay to Seller the sum of Five Million
Dollars ($5,000,000), and from and after such date Seller shall have no further
rights, obligations, liabilities or duties relating in any way to the
Resolution, the Identified Parcel, the Development Parcel, or the development or
non-development thereof, and Buyer shall have no further obligations,
liabilities or duties to pay Seller any additional consideration pursuant to
this Section 9.4.
E. If the Resolution is not achieved on or before the fifth (5th) anniversary of
the Closing Date, but on or before the fifth (5th) anniversary of the Closing
Date Buyer nevertheless has obtained governmental approval (whether or not such
approval is subject to the satisfaction of conditions, including, without
limitation, obtaining building permits, but excluding any conditions relating to
the developability of the Identified Parcel alone) to develop upon the
Development Parcel an office project which includes in excess of Three Hundred
Thousand (300,000) square feet of gross building area, without incurring
additional material development costs which are necessary because of the
expiration of the Permit, such as but not limited to the additional expense of
constructing decked parking (the "Development Approval"), then within ten (10)
business days after receiving the Development Approval, Buyer shall pay to
Seller an amount determined by multiplying Five Million Dollars ($5,000,000)
times a fraction, the numerator of which is the excess gross building area over
Three Hundred Thousand (300,000) square feet for which Buyer shall have obtained
the Development Approval, and the denominator of which is Two Hundred Thousand
(200,000) (the "Formula"). If at any time or times thereafter, on or before the
fifth (5th) anniversary of the Closing Date, Buyer obtains new or modified
Development Approval for additional square footage, then within ten (10)
business days after receiving any such additional Development Approval, Buyer
shall pay to Seller an additional amount, calculated by applying the Formula to
the additional square footage achieved in such subsequent Development Approval.
At such time, if any, as Seller shall have earned Five Million Dollars
($5,000,000) pursuant to the Formula, Seller shall have no further rights,
obligations, liabilities or duties relating in any way to the Resolution, the
Identified Parcel, the Development Parcel, or the development or non-development
thereof, and Buyer shall have no further obligations, liabilities or duties to
pay Seller any additional consideration pursuant to this Section 9.4.
F. If on or before the third (3rd) anniversary of the Closing Date, Buyer shall
sell the Development Parcel or any direct or indirect interest therein (except
for any sale, transfer, issuance or redemption of the corporate shares or
partnership interests of Mack-Cali Realty Corporation or Mack-Cali Realty, L.P.,
their respective successors or assigns, any mergers or consolidations concerning
such parties, or any similar transactions) to an unrelated third party for a
bona fide gross sale price or value (grossed up to 100%, if applicable, with
respect to a sale or transfer of less than a 100% direct or indirect interest in
the Property) of more than the applicable Base Price (as defined below), and
Seller shall have received less than Five Million Dollars
48
<PAGE>
($5,000,000) pursuant to Section D or Section E above, then not later than ten
(10) business days after the closing date of such sale or transfer, Buyer shall
pay to Seller an amount equal to the excess, if any, of such gross sale price or
value over the Base Price, up to a maximum payment to Seller of Five Million
Dollars ($5,000,000), minus any amount previously received by Seller under
Section E above. Buyer shall give Seller written notice upon Buyer reaching
agreement upon a price or value for the Development Parcel, and shall provide
Seller with any documentation reasonably requested by Seller which may bear upon
the price to be paid for, or allocated to, the Development Parcel in connection
with any such sale or other transfer. As used herein, "Base Price" shall mean
(i) Eight Million Two Hundred Fifty Thousand Dollars ($8,250,000) if the Closing
of the transfer occurs before the first (1st) anniversary of the Closing Date,
(ii) Eight Million Six Hundred Sixty-Two Thousand Five Hundred Dollars
($8,662,500) if the Closing of the transfer occurs from and after the first
(1st) anniversary of the Closing Date and before the second (2nd) anniversary of
the Closing Date, and (iii) Nine Million Ninety-Five Thousand Six Hundred
Twenty-Five Dollars ($9,095,625) if the Closing of the transfer occurs from and
after the second (2nd) anniversary of the Closing Date and before the third
(3rd) anniversary of the Closing Date. Buyer shall have no obligation to Seller
with respect to the payment of all or any portion of the $5,000,000 pursuant to
this Section E if the Closing of any sale of the Development Parcel or any
direct or indirect interest therein shall occur after the third (3rd)
anniversary of the Closing Date.
G. If neither the Resolution nor the Development Approval is achieved on or
before the fifth (5th) anniversary of the Closing Date, and the Development
Parcel shall not have been sold or transferred on or before the third (3rd)
anniversary of the Closing Date as described above for more than the applicable
Base Price, Buyer shall retain all or the applicable portion of the Five Million
Dollars ($5,000,000) Purchase Price reduction provided for above, and from and
after such date Seller shall have no further rights, obligations, liabilities or
duties relating in any way to the Resolution, the Identified Parcel, the
Development Parcel, or the development or non-development thereof, and Buyer
shall have no further obligations, liabilities or duties to pay Seller any
additional consideration pursuant to this Section 9.4.
H. Seller and Buyer agree to continue their respective efforts described above
in Section (B) until the earlier of (i) the date upon which the Resolution is
achieved, or (ii) the fifth (5th) anniversary of the Closing Date or (iii) the
payment to Seller of $5,000,000 in the aggregate pursuant to this Section 9.4
(such earlier date, the "Sunset Date"). Until the Sunset Date, (a) Buyer agrees
to expend such reasonable resources, including assigning personnel, retaining
legal counsel and environmental experts and paying their respective fees and
expenses, attending meetings, and spending money, as may be prudent or necessary
to assist Seller in achieving the Resolution as provided in Section (B),
including, without limitation, attending meetings, executing applications and
other documents reasonably satisfactory to Buyer, and (b) Seller agrees to
expend such reasonable resources, including assigning personnel and attending
meetings, and retaining legal counsel and environmental experts and paying their
respective fees and expenses, and, only if required by the applicable
governmental and quasi-governmental authorities as a condition precedent to
allowing the Resolution, paying the cost of filling the
49
<PAGE>
Identified Parcel, performing site work, or taking any other physical action
reasonably necessary to achieve the Resolution (but Seller shall not otherwise
be obligated to expend money), as may be prudent or necessary to achieve the
Resolution. Seller shall have no obligation with respect to any development,
non-development or wetland issues relating to any portion of the Property other
than the Identified Parcel.
I. The provisions of this Section 9.4 shall survive the Closing Date.
3. Indemnity. The following is hereby added to the Contract as Section
9.5:
A. Prudential and EPV, the sole partners of Seller as of the date hereof, hereby
jointly and severally agree to indemnify, defend, and hold Mack-Cali Realty
Acquisition Corp., Mack-Cali Realty Corporation, Mack-Cali Realty, L.P.,
Parsippany Campus Realty Associates, L.P., and their respective successors and
assigns (collectively, "MC") free and harmless, from and against any and all
out-of-pocket damages, costs and expenses (including reasonable attorneys' fees
and costs) incurred by MC, to the extent arising out of or resulting from any
and all claims, suits, actions, proceedings or judgments (collectively, "GAB
Claims") made by or in favor of GAB Business Services, Inc. and/or GAB Robins
North America, Inc. (collectively "GAB") or their respective predecessors,
successors or assigns or any other person or entity having an interest in GAB
(collectively, the "GAB Entities") that the sale of the Property by Seller to
Buyer violates or interferes with GAB's right of first refusal contained in that
certain Lease to GAB Business Services, Inc. dated April 4, 1983 and that
certain Lease to GAB Business Services, Inc. dated November 30, 1983
(collectively, the Lease"), including, without limitation, any injunction or
other court order or judgment after the date hereof requiring Buyer and Seller
to rescind the sale of the Property or any portion thereof, specifically
excluding, however, (i) any lost profits or lost increases in value, which MC
may allege that MC incurred as a result of any such rescission or other order or
judgment but including any out-of-pocket losses incurred by MC as a result of
any court order or judgment requiring MC to disgorge any amounts earned by MC
from the Property during MC's period of ownership thereof, and (ii) any and all
damages which may be assessed against MC as a result of actions MC takes after
the date hereof to the extent such actions are taken without, or are
inconsistent with, express written directions to MC from Prudential's counsel.
B. MC shall cooperate with PruBeta-3 and Prudential in all reasonable respects
(and Prudential and EPV jointly and severally agree to reimburse MC for the
out-of-pocket costs incurred by MC in connection with such cooperation) in
connection with GAB Robins North America, Inc. v. PruBeta-3 et al., Docket No.
MRS-L-187-98 and any other suits, actions or proceedings relating to or arising
from the GAB Claims (collectively "Litigation"), and take such actions and
execute such filings and other documents as may be reasonably necessary to
comply with the strategies and directions selected by PruBeta-3 and Prudential
and their counsel in connection with the Litigation. Seller shall direct its
counsel to keep MC apprised as to the status of the GAB Claims and the
Litigation and any new filings and promptly furnish MC with copies of all papers
proposed to be issued by Seller and issued by GAB or the Court, to the extent
not directly served upon MC by GAB or the Court. Prudential shall have the right
to
50
<PAGE>
select and direct MC's counsel in connection with the Litigation, which shall
not be the same counsel as Prudential's or PruBeta-3's counsel. Prudential
hereby appoints, and MC accepts, Peter Bray as the attorney to initially
represent MC in connection with the Litigation. If MC determines, in its
reasonable judgment, that changing the counsel representing MC is warranted,
then MC shall so notify Prudential, Prudential shall select new counsel for MC,
and such new counsel shall be subject to MC's consent, not to be unreasonably
withheld, conditioned or delayed. MC shall not assert that Prudential's and
PruBeta-3's counsel should be disqualified to represent Prudential and/or
PruBeta-3 in connection with the Litigation or any other matters as a result of
any conflict of interest unless such conflict of interest results from
Prudential's counsel undertaking representation of MC after the date hereof.
Prudential shall have the right to settle any such claim for which Prudential
and EPV have agreed to indemnify MC under this Section 9.5, provided Prudential
and/or EPV duly perform the obligation to so indemnify MC in accordance with
this Section 9.5. This indemnity contained in this Section 9.5 shall not be
subject to the $4,050,000 limitation on maximum liability set forth in Section
14.16.
C. The provisions of this Section 9.5 shall survive the Closing Date.
5. Allocation of Purchase Price. To correct an error, Section 2.3 of the
Contract is hereby amended so that the "Developed Property Purchase Price" is
One Hundred Twenty-Nine Million Five Hundred Thirty-Two Thousand and no/100
Dollars ($129,532,000), and the "Vacant Property Purchase Price" is Twenty-Seven
Million Five Hundred Thousand Dollars ($27,500,000) and no/100.
5. Effect of Amendment. This Amendment modifies and amends the Contract.
The terms and provisions hereof shall supersede any contrary terms and
provisions contained in the Contract. The Contract, as hereby amended and
modified, remains in full force and effect.
51
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first set forth above.
PRUBETA-3, a New Jersey general partnership
By: The Prudential Insurance Company of America, as General
Partner of PruBeta-3
By:
---------------------------------------------
Name:
-------------------------------------------
Its Vice President
By: Equity Parsippany Venture, a Colorado general partnership,
as General Partner of PruBeta-3
By: U S West Real Estate, Inc., a Colorado corporation,
as Managing Partner
By:
---------------------------------------------
Name: Stewart A. Loewenstein
Its Vice President
MACK-CALI REALTY ACQUISITION CORP.
By:
---------------------------------------------
Name:
-------------------------------------------
Its:
--------------------------------------------
con't on next page
52
<PAGE>
MACK-CALI REALTY, L.P., a Delaware limited partnership
By:
---------------------------------------------------
By:
---------------------------------------------
Name:
-------------------------------------------
Its:
--------------------------------------------
PARSIPPANY CAMPUS REALTY ASSOCIATES, L.P.
By: Mack-Cali Sub XII, Inc.
By:
---------------------------------------------
Name:
-------------------------------------------
Its:
--------------------------------------------
The undersigned have executed this Amendment for the purpose of
acknowledging their joint and several liability for their respective obligations
set forth in Section 3 of this Amendment which are expressly denominated as
being joint and several.
THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA, as General Partner of PruBeta-3
By:
---------------------------------------------
Name:
-------------------------------------------
53
<PAGE>
Its Vice President
EQUITY PARSIPPANY VENTURE, a Colorado general
partnership, as General Partner of PruBeta-3
By: U S West Real Estate, Inc., a Colorado corporation,
as Managing Partner
By:
---------------------------------------------
Name: Stewart A. Loewenstein
Its Vice President
con't on next page
54
<PAGE>
The undersigned, U S WEST FINANCIAL SERVICES, INC., a Colorado corporation
("USWFS"), hereby unconditionally and primarily guarantees the payment and
performance by EPV of all of its obligations under Section 3 this Amendment
without requiring Buyer or MC to pursue any other party before pursuing USWFS.
USWFS hereby acknowledges that Buyer is relying on this guaranty in entering
into this Amendment and in closing the transactions contemplated in hereunder;
and that this guaranty is a material inducement to each of the foregoing. USWFS
hereby acknowledges that it is an affiliate of the managing partner in EPV and
is thereby receiving benefit from entering into this guaranty.
DATED: As of March ___, 1998.
U S WEST FINANCIAL SERVICES, INC.,
a Colorado corporation
By:
----------------------------------------------------
Stewart A. Loewenstein
Vice President
55
<PAGE>
February 27, 1998
326-0852
VIA FACSIMILE
William N. Cinnamond, Jr.
J.P. Morgan Investment Management, Inc.
522 Fifth Avenue
New York, NY 10036
Re: Morris County (One & Five Sylvan Way)
Dear Mr. Cinammond:
This letter confirms that Mack-Cali Realty Acquisition Corp. ("MC") has
completed its due diligence pursuant Article 4 of that certain Purchase and Sale
Agreement dated February 4, 1998 (the "Agreement") between Sylvan Way L.L.C.
("Sylvan") and MC and elects to proceed with the transaction.
The parties to the Agreement hereby agree that the Purchase Price (as
defined in Article 2 of the Agreement) is hereby reduced by $300,000.00.
Please confirm Sylvan's agreement to said reduction of the Purchase Price
by countersigning this letter and returning it to me by facsimile prior to 5:00
p.m. today. Thank you for your prompt attention to this matter.
Very truly yours,
John J. Ginley, III
AGREED AND ACCEPTED:
SYLVAN WAY L.L.C., a Virginia
limited liability company
By: System Realty Nineteen, Inc., a Virginia corporation
By:
-------------------------------------
Name: William N. Cinnamond, Jr.
Title: President
<PAGE>
ADOPTION OF PARTNERSHIP AGREEMENT
The undersigned hereby agrees: (I) to assume all of the rights and
obligations of a Limited Partner (as defined in the Partnership Agreement
referred to below); (ii) to be bound by the terms of the Second Amended and
Restated Agreement of Limited Partnership of Mack-Cali Realty, L.P., dated as of
December 11, 1997 (as amended from time to time, the "Partnership Agreement");
and (iii) that notices under the Partnership Agreement may be addressed to the
undersigned at the address set forth below.
THE REMAINDER OF THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK
SIGNATURES ARE ON THE FOLLOWING PAGE
Please date and sign the next page
and provide an address to which notices pursuant to the Partnership
Agreement should be sent.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Adoption of
Partnership Agreement as of this _____ day of ______________, 1998.
- -------------------------------------
By:
-------------------------
Title:
-------------------------
Address:
------------------------
------------------------
------------------------
------------------------
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Agreement") is made and
delivered this 25th day of March, 1998 by Equity Parsippany Venture, a general
partnership organized under the laws of the State of Colorado (hereinafter
referred to as "ASSIGNOR"), to Mack-Cali Realty Acquisition Corp., a New Jersey
corporation (hereinafter referred to as "ASSIGNEE"), pursuant to the Purchase
and Sale Agreement dated as of March 25, 1998 (the "Purchase Agreement") between
ASSIGNOR and ASSIGNEE, providing for, among other things, the sale by ASSIGNOR
to ASSIGNEE of its entire interest (the "Partnership Interest") in PRUBETA-3, a
general partnership organized under the laws of the State of New Jersey (the
"Partnership").
WITNESSETH
Whereas, ASSIGNEE and the Partnership have entered into a Purchase and
Sale Agreement dated February 18, 1998 as amended by a letter agreement dated
_________, 1998 and a second amendment dated the date hereof (the "Second
Amendment") (the "Business Campus Contract") pursuant to which ASSIGNEE
purchased the property commonly known as "The Prudential Business Campus" and
more particularly described in the Business Campus Contract, the closing of
which occurred immediately prior to the execution of this Agreement; and
Whereas, the Partnership presently owns the property known as 9 Campus
Drive, Parsippany, New Jersey, and ASSIGNOR, concurrently with execution of this
Agreement, is entering into the Purchase Agreement with the ASSIGNOR for the
ASSIGNOR's Partnership Interest; and
Whereas, the ASSIGNOR acknowledges that as a condition for the ASSIGNEE
entering into both the Business Campus Contract and the Purchase Agreement,
ASSIGNOR and ASSIGNEE must enter into this Agreement pursuant to which, among
other things, (i) ASSIGNOR assigns all of its right, title and interest in the
Partnership Interest and (ii) ASSIGNEE assumes the obligations of the
Partnership Interest from and after the date hereof; provided, however, that the
ASSIGNEE is not assuming any liabilities or obligations of the Partnership or
the Partnership Interest arising out of, resulting from or relating to the
Business Campus Contract and/or the Purchase Agreement, including, without
limitation, that certain indemnity made, jointly and severally, by ASSIGNOR and
the Prudential Insurance Company of America ("Prudential") pursuant to Section
9.5 of the Business Campus Contract (the "GAB Indemnity").
Now, Therefore, in consideration of the premises and mutual covenants of
the parties hereto, the parties hereby agree as follows:
1.0 Representations. ASSIGNOR represents that ASSIGNOR is the sole owner
of all right, title and interest in and to said Partnership Interest, and that
title to said Partnership Interest
<PAGE>
is free and clear of any and all liens, mortgages, encumbrances or security
interests thereon.
2.0 Assignment of Interest. Simultaneously herewith, in consideration of
$1.00, the receipt of which is hereby acknowledged, ASSIGNOR assigns, transfers
and conveys to ASSIGNEE all of ASSIGNOR's right, title and interest in and to
the Partnership Interest subject to the limitations set forth below.
3.0 Acceptance and Assumption by ASSIGNEE. ASSIGNEE (i) accepts and agrees
to be bound by all the terms and provisions of the Joint Venture Agreement for
PruBeta-3 dated January 24, 1989 from and after the date hereof and (ii) hereby
assumes all obligations with respect to the Partnership Interest conveyed hereby
that arise or accrue from and after the date hereof; provided, however, that
ASSIGNEE does not assume, and ASSIGNOR retains, all liabilities and obligations
of Assignor arising out of, resulting from or relating to the Purchase Agreement
and/or the Business Campus Contract, including, without limitation, the GAB
Indemnity and shall be liable for all Damages (as defined below) arising out of,
resulting from or relating thereto.
4.0 Indemnifications.
4.1 Indemnification by ASSIGNOR. ASSIGNOR hereby indemnifies and
agrees to hold harmless ASSIGNEE from and against any and all claims,
liabilities, losses, deficiencies and damages, as well as reasonable expenses
(including attorneys' fees and disbursements) and interest and penalties related
thereto, (collectively, "Damages"), incurred by ASSIGNEE, by reason of or
resulting from, either directly or indirectly, the obligations of the ASSIGNOR,
its agents, nominees, or employees related to the Partnership Interest conveyed
hereby which accrued prior to the date hereof or, with respect to Damages which
may arise out of, result from or relate to the Business Campus Contract, the
Purchase Agreement and GAB Indemnity, which may accrue on or after the date
hereof; provided, however, that, the foregoing indemnity of ASSIGNOR shall not
apply to any Damages arising out of or relating to (a) the liabilities waived by
ASSIGNEE pursuant to the provisions of Section 3.3 of the Purchase Agreement and
(b) any fact, circumstance or condition for which ASSIGNOR would not otherwise
have liability as a result of ASSIGNEE's acknowledgments and agreements
contained in Article 3 of the Purchase Agreement and (c) any fact, circumstance
or condition covered by the representations and warranties of ASSIGNOR given
pursuant to Article 6 of the Purchase Agreement (It being understood and agreed
that ASSIGNEE's only rights and remedies for any Damages arising out of any such
fact, circumstance or condition shall be as and to the extent available to
ASSIGNEE as a result of a breach of the applicable representation and warranty
contained in said Article 6) and (d) any obligations, debts or liabilities set
forth in the Property Financials (except for the line item in the 1997 Financial
Statement described as "Other Liabilities" in the approximate amount of $322,000
which shall be included within the Damages and the responsibility of ASSIGNOR),
(as defined in the Purchase Agreement) and (e) any obligations, debts or
liabilities, if any, which ASSIGNEE has expressly and specifically agreed to in
writing accept pursuant to the terms of the Purchase Agreement or at the closing
of the transaction contemplated thereby.
4.2 Indemnification by ASSIGNEE. ASSIGNEE hereby indemnifies and agrees to
hold harmless ASSIGNOR from and against any and all Damages, incurred by
ASSIGNOR, by
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reason of or resulting from, either directly or indirectly, the obligations of
the ASSIGNEE, its agents, nominees, or employees, related to the Partnership
Interest conveyed hereby which accrued before, on and after the date hereof;
provided, however, that the indemnification provided in this Section 4.2 shall
exclude (i) any and all Damages arising out of or relating to the Business
Campus Contract, the Purchase Agreement or the GAB Indemnity which accrued
before, on, or after the date hereof and (ii) obligations, debts or liabilities,
if any, which ASSIGNEE has expressly and specifically agreed to in writing
accept pursuant to the terms of the Purchase Agreement or at the closing of the
transaction contemplated thereby.
5.0 Binding Effect. The agreements, terms, covenants and conditions herein
shall bind, and inure to the benefit of, the parties hereto and their respective
heirs, administrators, successors and assigns.
[Signature page follows; Remainder of page is intentionally blank]
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IN WITNESS WHEREOF, and intending to be legally bound hereby, each of
ASSIGNOR and ASSIGNEE has caused this Assignment and Assumption Agreement to be
executed and delivered by its duly authorized representative as of the day and
year first above written.
ASSIGNOR
EQUITY PARSIPPANY VENTURE,
a Colorado general partnership
By: US West Real Estate, Inc.,
a Colorado Corporation,
as Managing Partner
By:
------------------------------
Stewart A. Loewestein
Vice President
Accepted:
ASSIGNEE
MACK-CALI REALTY ACQUISITION CORP.
By:
-----------------------------
Roger W. Thomas
Executive Vice President
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The undersigned, US WEST FINANCIAL SERVICES, INC., a Colorado corporation
("USWFS"), hereby unconditionally and primarily guarantees the payment and
performance by ASSIGNOR of all of its obligations under this Agreement without
requiring Mack-Cali to pursue any other party before pursuing USWFS. USWFS
hereby acknowledges that Mack-Cali is relying on this guaranty in entering into
this Assignment and Assumption Agreement and in closing the transactions
contemplated in the Business Campus Contract and the Purchase Agreement and
approving the sale of the Partnership Interest; and that this guaranty is a
material inducement to each of the foregoing. USWFS hereby acknowledges that it
is an affiliate of the managing partner in ASSIGNOR and is thereby receiving
benefit from entering into this guaranty and from the Business Campus Contract
and the Purchase Agreement and the sale of ASSIGNOR's Partnership Interest.
DATED: As of March ___, 1998.
US WEST FINANCIAL SERVICES, INC.,
a Colorado corporation
By:
----------------------------------
Stewart A. Loewenstein
Vice President
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Mack-Cali Realty Acquisition Corp.
c/o Mack-Cali Realty Corporation
11 Commerce Drive
Cranford, New Jersey 07016
March 26, 1998
The Prudential Insurance Company
of North America
The Prudential Realty Group
Three Gateway Center
Newark, New Jersey 07102
Ladies and Gentlemen:
Reference is hereby made to that certain Joint Venture Agreement of
PRUBETA-3 (the "Partnership") between The Prudential Insurance Company of
America ("Prudential") and Equity Parsippany Venture, dated January 24, 1989
(the "Partnership Agreement"). Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Partnership Agreement.
In connection with the purchase by Mack-Cali Acquisition Corp. ("Mack-Cali") of
the Partnership Interest owned by Equity Parsippany Venture pursuant to that
certain Purchase and Sale Agreement between Mack-Cali and Equity Parsippany
Venture dated the date hereof (the "Purchase Agreement"), that certain
Assignment and Assumption Agreement between Mack-Cali and Equity Parsippany
Venture dated the date hereof (the "Assignment and Assumption Agreement") and
the subsequent assignment of Mack-Cali's entire interest in the Purchase
Agreement and Assignment and Assumption Agreement to Mack-Cali Realty, L.P., and
as a condition thereof, Prudential, Mack-Cali and Mack-Cali Realty, L.P.,
intending to be legally bound hereby, hereby agree as follows:
I. To amend the Partnership Agreement to incorporate the following terms
and conditions, which amendment shall be executed by Mack-Cali and Prudential as
soon as practicable but in no event later than thirty (30) days after the date
hereof:
New recitals shall be drafted to explain the reasons for the amendments
and the current state of the Partnership.
All references to BetaWest shall be changed to Mack-Cali.
Prudential shall acknowledge that (i) all construction and development
projects contemplated in the Partnership Agreement, including but
not limited to Phase II, Phase III, Hilton Court East, and the
Infrastructure Subphase have been completed, (ii) no further Capital
Contributions pursuant to Section 4.4 of the Partnership Agreement
and no further Additional Contributions pursuant to Section 4.9 of
the Partnership Agreement are or will be required to be made by
either Mack-Cali or Prudential, (iii) no Project Budgets shall be
adopted, and no Project Reserves shall be funded, pursuant to
Section 4.12 of the Partnership Agreement, (iv) no financing will be
obtained pursuant to Section 4.13 of the
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Partnership Agreement, (v) all Development Management Agreements
entered into pursuant to Section 6.6 of the Partnership Agreement
have been terminated with no further obligations of the Partnership
and no new Development Management Contracts or similar agreements or
arrangements will be entered into, and (vi) all Construction
Contracts entered into pursuant to Section 6.7 of the Partnership
Agreement have been terminated with no further obligations of the
Partnership and no new Construction Contracts or similar agreements
or arrangements will be entered into without the mutual consent of
Mack-Cali and Prudential.
Prudential shall acknowledge that the BetaWest Notes and Purchase Money
Mortgage Notes have been paid in full and are no longer obligations
of the Partnership.
Section 6.7 shall be amended whereby the Asset Management Fee payable by
the Partnership to Prudential shall be deleted and replaced by an
Asset Management Fee payable by the Partnership to Mack-Cali in
consideration for the supervising and operation of the property
known as 9 Campus Drive. Such Asset Management Fee shall be
comprised as follows: (i) 3% of the gross collected rents of the
Partnership less any third-party property management fees payable by
the Partnership; and (ii) if Mack-Cali is the procuring broker a
commission on leases entered into after the date hereof (a "New
Lease"), calculated as follows: (A) 5% of the base rent for each
year of the initial term of such lease up to ten years; (B) 2 1/2%
of the base rent for such lease for each year of the initial term
thereafter up to a maximum of an additional five years; (C) for a
lease of additional space by a tenant under a New Lease, 5% of the
base rent for the first ten years and 2 1/2% of the base rent for
each year thereafter up to an additional five years; and (D) for a
renewal or extension of a lease term by a tenant under a New Lease,
2 1/2% of the base rent payable for each renewal or extension year
for a maximum period of fifteen years from the lease commencement;
and (iii) a 2% override on commissions for New Leases where
Mack-Cali is not the procuring broker.
Section 7.5 shall be amended to designate Mack-Cali as the Tax Matters
Partner, subject to the reasonable approval of Prudential's internal
tax law department. If Mack-Cali is not designated Tax Matters
Partner, the Partnership Agreement shall be amended to provide for
the approval of Mack-Cali of certain decisions made by the Tax
Matters Partner.
Section 7.6 shall be amended to reflect the actual capital accounts to the
Partnership made by Prudential and Mack-Cali.
Mack-Cali shall acknowledge that if the Partnership earns any portion of
the $5 million which may be earned by the Partnership pursuant to
Paragraph 2 of the Second Amendment to the Business Campus Contract,
Mack-Cali shall have no right to such $5 million and Mack-Cali shall
consent to the immediate distribution of the
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entire $5 million as Prudential and Equity Parsippany Venture may
direct.
Corresponding changes shall be made to Section 1.1.
The following outstanding landlord obligations shall be paid for by an
equal capital contribution to the Partnership by both Prudential and
Mack-Cali, provided that Mack-Cali receives an adjustment for an
amount equal to its capital contribution from Equity Parsippany
Venture at the closing of the transaction contemplated by the
Purchase Agreement:
(a) Cushman & Wakefield of New Jersey, Inc., 9 Campus Drive:
$22,107.69, the Construction Allowance, due upon presentation of
receipted bills; and
(b) PSCRC, 9 Campus Drive: $86,530.00, the Landlord Work Allowance.
In addition to the foregoing, the parties hereto hereby agree as follows:
1. Mack-Cali, or its successors or assigns, and Prubeta-3 shall, within
thirty (30) days hereof, enter into a reciprocal easement agreement to provide
the tenants and occupants of 9 Campus Drive and their customers, employees and
invitees, the right to use a limited number of parking spots located at the
property commonly known as 2 Hilton Court.
2. Simultaneous with the consummation of the transactions contemplated
under the Purchase Agreement, each of Mack-Cali and Prudential will transfer
$25,792.15 will be transferred to a newly established bank account in the name
of the Partnership which amount represents security deposits held in the name of
the Partnership for the benefit of tenants of 9 Campus Drive.
3. Mack-Cali shall have no liability, and Prudential shall have no right
of contribution or subrogation against Mack-Cali for any of the Partnership's
obligations under the Business Campus Contract (as such term is defined in the
Purchase Agreement), including without limitation, the indemnification provided
for in Paragraph 3 of the Second Amendment to the Business Campus Contract.
4. Prudential consents to the entering into of the Purchase Agreement and
the transactions contemplated thereby, including without limitation the sale of
the Partnership Interest by Equity Parsippany Venture, the purchase of the
Partnership Interest by Mack-Cali and the execution of the Assignment and
Assumption Agreement. Further, Prudential acknowledges that all provisions of
the Partnership Agreement relating to any right of first refusal or right of
first offer have been satisfied by Equity Parsippany Venture and agrees to and
accepts Mack-Cali as a partner and party to the Partnership Agreement, with all
rights and privileges of a 50% Venturer pursuant to the Partnership Agreement.
5. It is understood and agreed that no failure to execute the amendment
referred to in Section I hereof by the parties hereto shall operate as a waiver
by either of them to require that such
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amendment be executed in accordance herewith.
6. It is further understood and agreed that money damages would not be a
sufficient remedy for any breach of this Agreement by Prudential, Mack-Cali or
any of their representatives and that Prudential and Mack-Cali shall be entitled
to equitable relief, including injunction and specific performance, as a remedy
for any such breach. Such remedies shall not be deemed to be the exclusive
remedies for a breach by Prudential or Mack-Cali of this Agreement but shall be
in addition to all other remedies available at law or equity to Prudential and
Mack-Cali.
[Signature page follows; Remainder of page is intentionally blank]
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Please indicate your acceptance of the foregoing by signing this letter
agreement as indicated below.
MACK-CALI REALTY ACQUISITION CORP.
Mack-Cali Realty, L.P.
By:
---------------------------------
Roger W. Thomas, Esq.
Executive Vice President
Accepted and Agreed to
as of the date first written above:
THE PRUDENTIAL INSURANCE COMPANY
OF NORTH AMERICA
By:
------------------------------------------
Name:
Title:
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT dated as of March 25, 1998, between
MACK-CALI REALTY, L.P. a Delaware limited partnership ("Acquiror"), and PACIFICA
HOLDING COMPANY LLC, a Colorado limited liability corporation ("Contributor").
Section 15. Defined Terms
15.1 Definitions. For purposes of this Agreement, the following
terms shall have the respective meanings set forth below:
"Acquiror Indemnified Parties" has the meaning set forth in Section
6.1.
"Acquiror Transaction Documents" mean this Agreement and the
Assignment and Assumption Agreement.
"Affiliate" means any of Mack-Cali Realty Corporation, a Maryland
corporation ("Mack-Cali Realty Corporation") or any corporate or partnership
entity affiliated with, or related to, Acquiror or Mack-Cali Realty Corporation.
"Agreement" means this Agreement and includes all of the schedules
and exhibits annexed hereto.
"Assumed Liabilities" means all liabilities arising after the
Closing under the Management Contracts.
"Assignment and Assumption Agreement" means an assignment and
assumption agreement with respect to the Assumed Liabilities in the form of
Exhibit A hereto.
"Bill of Sale" means a bill of sale in the form of Exhibit B hereto.
"Business Day" means any day that is not a Saturday, Sunday or
statutory holiday in the State of Colorado.
"Closing" means the closing of the purchase and sale of the
Transferred Assets and the other transactions contemplated by this Agreement.
"Closing Date" means March 25, 1998 or such other date as
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is mutually acceptable to Acquiror and Contributor.
"Consents" shall mean those consents set forth on Schedule 3.3
hereto.
"Contribution Agreements" means the Contribution Agreements of even
date herewith between Contributor, Acquiror and the other parties signatory
thereto.
"Contributor Indemnified Parties" has the meaning set forth in
Section 6.1.
"Contributor Transaction Documents" means, collectively, this
Agreement, the Assignment and Assumption Agreement and the Bill of Sale.
"Encumbrance" means any lien, pledge, option, charge, easement,
security interest, right-of-way or similar restriction or encumbrance.
"Excluded Assets" means any assets of Contributor exclusively
relating to any business unrelated to the Management Contracts other than the
Transferred Assets.
"Excluded Liabilities" means all liabilities or obligations of
Contributor of whatever nature, whether known or unknown, absolute or contingent
or otherwise other than the Assumed Liabilities, including but not limited to
the liabilities set forth on Schedule 1.1(a).
"Losses" means any and all loss, claim, damage, suit, action, cause
of action, liability, penalty, judgment, decree, cost and expense (including,
without limitation, reasonable attorneys' fees and costs).
"Management Contracts" shall mean the Pacifica Management Contracts
and the Third Party Management Contracts.
"Pacifica Management Contracts" means the contracts identified as
such on Schedule 1.1(b).
"Permitted Encumbrances" has the meaning set forth in Section 3.5.
"Purchase Price" has the meaning set forth in Section 2.2.
"Third Party Management Contracts" means the contracts identified as
such on Schedule 1.1(b).
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"Transferred Assets" means all of Contributor's right, title and
interest in and to (i) all rights under the Management Contracts existing after
the Closing Date, (ii) all machinery, equipment, furniture, fixtures, supplies
and other assets set forth on Schedule 1.1(c) hereto (collectively, the
"Equipment"); (iii) all books and records (other than minute books and original
documents and records relating to the corporate existence of Contributor and
federal and state tax returns and supporting documents) relating to the
Management Contracts and the Equipment (provided that Contributor may retain
copies thereof and original records which Contributor is required to maintain as
a matter of law (which Acquiror shall have unrestricted access to for a period
of time equivalent to the statutory retention period of such records)); and (iv)
all goodwill associated with the foregoing.
Capitalized terms used herein and not otherwise defined have the
meanings set forth for such terms in the Contribution Agreements.
Section 16. Purchase and Sale of Assets; Tax Matters
16.1 Transferred Assets. Subject to the terms and conditions set
forth in this Agreement, Contributor shall sell, transfer, convey, assign and
deliver to Acquiror, and Acquiror shall purchase and acquire from Contributor,
on the Closing Date, all of the Transferred Assets, free and clear of all
Encumbrances other than Permitted Encumbrances.
16.2 Purchase Price. Subject to Section 2.3, the purchase price for
the Transferred Assets (the "Purchase Price") shall consist of (i) a cash
payment equal to $10,000 to Contributor by wire transfer of immediately
available federal funds to an account specified by Contributor in writing and
(ii) the assumption by Acquiror of the Assumed Liabilities.
16.3 Purchase Price Adjustment. All revenues and expenses with
respect to the Transferred Assets, and applicable to the period of time before
and after Closing, determined in accordance with sound accounting principles
consistently applied, shall be allocated between Contributor and Acquiror as
provided herein. Contributor shall be entitled to all revenue and shall be
responsible for all expenses accruing during the period of time up to and
including the Closing Date, and Acquiror shall be entitled to all revenue and
shall be responsible for all expenses accruing during the period of time from
and after the Closing Date. Acquiror shall pay all use taxes in connection with
the sale of the Transferred Assets.
16.4 The Closing. The Closing shall take place on the Closing Date
at a location to be mutually and reasonably agreed upon by Acquiror and
Contributor. At the Closing, the parties hereto shall make the deliveries
described below, provided that the obligation of each to do so shall depend upon
the performance by the other party of its obligations hereunder:
(a) Contributor shall deliver to Acquiror the following
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(which shall be in form and substance reasonably
satisfactory to Acquiror):
(i) the Assignment and Assumption Agreement;
(ii) a Bill of Sale and such other instruments of
transfer and conveyance as shall be effective to
vest in Acquiror good and marketable title to the
tangible personal property included in the
Transferred Assets held by Contributor free and
clear of all Encumbrances other than Permitted
Encumbrances;
(iii) the Consents;
(iv) such other documents as may be reasonably
necessary to consummate the transactions
contemplated hereby.
(b) Acquiror shall deliver to Contributor the following:
(i) the Assignment and Assumption Agreement;
(ii) a wire transfer of immediately available funds in
the amount set forth in Section 2.2; and
(iii) such other documents as may be reasonably
necessary to consummate the transactions
contemplated hereby.
16.5 Allocation of Purchase Price. Contributor and Acquiror agree to
allocate the Purchase Price among the Transferred Assets as set forth on
Schedule 2.5. Contributor and Acquiror shall report for tax and other relevant
purposes (and shall defend in any tax audit or contest) the sale of the
Transferred Assets in a manner consistent with such allocation. Contributor and
Acquiror agree to execute an Internal Revenue Service Form 8594 reflecting such
allocation.
16.6 Further Assurances. From time to time after the Closing,
Contributor will execute and deliver to Acquiror such instruments of sale,
transfer, conveyance, assignment and delivery, and such consents, assurances,
powers of attorney and other instruments as may be reasonably requested by
Acquiror or its counsel in order to vest in Acquiror all right, title and
interest of Contributor in and to the Transferred Assets and otherwise in order
to carry out the purpose and intent of this Agreement.
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Section 17. Representations And Warranties of Contributor
Contributor represents and warrants to Acquiror as follows:
17.1 Organization and Authorization. Contributor is a limited
liability company duly organized, validly existing in good standing under the
laws of the State of Colorado. Contributor has all requisite corporate power and
authority to enter into the Contributor Transaction Documents and to perform
fully its obligations hereunder and thereunder. The execution and delivery of
the Contributor Transaction Documents and the performance by Contributor of its
obligations hereunder have been duly and validly authorized by all necessary
limited liability action. This Agreement is, and when executed and delivered in
accordance with this Agreement, each other Contributor Transaction Document will
be, a legal, valid and binding obligation of Contributor enforceable in
accordance with its terms.
17.2 Consents and Approvals. No filings with, notices to, or
approvals of any governmental or regulatory body are required to be obtained or
made by Contributor in connection with the consummation of the transactions
contemplated hereby.
17.3 No Violations. The execution and delivery of the Contributor
Transaction Documents and the performance by Contributor of its obligations
thereunder do not and will not conflict with or violate any provision of the
Articles of Organization or Operating Agreement of Contributor. The execution
and delivery of the Contributor Transaction Documents and the performance by
Contributor of its obligations thereunder do not and will not (a) conflict with
or result in a breach of the terms, conditions or provisions of, (b) constitute
a default under, (c) result in the creation of any Encumbrance upon the
Transferred Assets pursuant to, (d) give any third party the right to modify,
terminate or accelerate any obligation under, (e) result in a violation of, or
(f) require any authorization, consent (other than the Consents, which are set
forth on Schedule 3.3 hereto), approval, exemption or other action by or notice
to any court or administrative or governmental body or other third party
pursuant to, in each case, any law, statute, rule or regulation to which
Contributor is or the Transferred Assets are subject, or any agreement,
instrument, order, judgment or decree to which Contributor is or the Acquired
Assets are subject.
17.4 Financial Information. All of Contributor's books and records
relating to the Transferred Assets are complete and correct in all material
respects and present accurately the material financial information related to
the Transferred Assets.
17.5 Transferred Assets; Title to Assets. All material assets used
in connection with Contributor's performance under the Management Contracts are
set forth on Schedule 1.1(c). Except as set forth on Schedule 3.5 ("Permitted
Encumbrances"), Contributor has good and marketable title to the Transferred
Assets held by it free and clear of all Encumbrances, and after the Closing Date
the Transferred Assets will be free and clear of all Encumbrances other than
Permitted Encumbrances.
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17.6 Compliance with Laws. Contributor's business has been operated
in compliance in all material respects with all applicable laws and regulations
of governmental authorities.
17.7 Litigation. Except as set forth on Schedule 3.7, there are no
material claims, actions, suits, approvals, investigations, complaints or
proceedings pending or, to Contributor's knowledge, threatened before any court,
arbitrator or administrative, governmental or regulatory authority or body with
respect to the business of Contributor relating to the Transferred Assets nor
are the Transferred Assets subject to any material order, judgment, writ,
injunction or decree.
17.8 Management Contracts. True and correct copies of each
Management Contract have been provided to Acquiror or will be provided to
Acquiror prior to Closing, and the information set forth on Schedule 1.1(b) is
true and correct. Neither Contributor nor, to the knowledge of Contributor, any
other party to any Management Contract, agreement or instrument, is in default
of the terms thereof.
17.9 Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Contributor for which Acquiror shall have any responsibility.
Section 18. Representations and Warranties of Acquiror
Acquiror represents and warrants to Contributor as follows:
18.1 Organization and Authorization. Acquiror is a limited
partnership duly organized and existing in good standing under the laws of the
State of Delaware. Acquiror has all requisite power and authority to enter into
the Acquiror Transaction Documents and to assume and perform fully its
obligations hereunder and thereunder. The execution and delivery of the Acquiror
Transaction Documents and the performance by Acquiror of its obligations
thereunder have been duly and validly authorized by all necessary partnership
action. This Agreement is, and when executed and delivered in accordance with
the terms hereof the other Acquiror Transaction Documents will be, a valid and
binding obligation of Acquiror enforceable in accordance with its terms.
18.2 No Violations. The execution and delivery of the performance of
the Acquiror Transaction Documents by Acquiror of its obligations thereunder do
not and will not conflict with or violate any provision of the Second Amended
and Restated Agreement of Limited Partnership of the Acquiror. Except for such
of the following as, individually or in the aggregate, will not have a material
adverse effect on Acquiror's ability to consummate the transactions contemplated
hereby, the execution and delivery of the Acquiror Transaction Documents and the
performance by Acquiror of its obligations thereunder do not and
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will not (a) conflict with or result in a breach of the terms, conditions or
provisions of, (b) constitute a default under, (c) result in the creation of any
lien, security interest, charge or encumbrance upon its assets pursuant to, (d)
give any third party the right to modify, terminate or accelerate any obligation
under, (e) result in a violation of, or (f) require any authorization, consent,
approval, exemption or other action by or notice to any court or administrative
or governmental body or any third party pursuant to, in each case, any law,
statute, rule or regulation or any agreement, instrument, order, judgment or
decree to which Acquiror is subject.
18.3 Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Acquiror for which Contributor shall have any responsibility.
Section 19. Conditions to Closing
19.1 Obligation of Acquiror to Close. The obligation of Acquiror to
close the transactions contemplated hereby shall be subject to the fulfillment
and satisfaction, prior to or at the Closing, of the following conditions, or
the written waiver thereof by Acquiror:
(a) No Injunction. No injunction or restraining order shall
be in effect which forbids or enjoins the consummation
of the transactions contemplated by this Agreement, no
proceedings for such purpose shall be pending, and no
federal, state, local or foreign statute, rule or
regulation shall have been enacted which prohibits,
restricts or delays the consummation of the transactions
contemplated hereby.
(b) Approvals. All governmental and third party approvals,
consents, permits or waivers necessary for consummation
of the transactions contemplated by this Agreement or
the financing thereof, and all Governmental Permits
required for the use by Acquiror of the Transferred
Assets, shall have been obtained in form and substance
reasonably satisfactory to Acquiror.
(c) Material Adverse Change. No material adverse change in
the Transferred Assets shall have occurred.
(d) Contribution Agreement Closing. The Closing
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under the Contribution Agreements shall have occurred or
be occurring simultaneously with the Closing.
(e) Encumbrances. Acquiror shall be satisfied that the
Transferred Assets are free and clear of all
Encumbrances as of the Closing Date.
(f) Management Contracts. Acquiror shall be satisfied, in
its sole discretion, that there are no defects in the
assignability, enforceability, evidence or existence of
any of the Management Contracts.
19.2 Obligation of Contributor to Close. The obligation of
Contributor to close the transactions contemplated hereby shall be subject to
the fulfillment and satisfaction, prior to or at the Closing, of the following
conditions, or the written waiver thereof by Contributor:
(a) No Injunction. No injunction or restraining order shall
be in effect which forbids or enjoins the consummation
of the transactions contemplated by this Agreement and
no federal, state, local or foreign statute, rule or
regulation shall have been enacted which prohibits,
restricts or delays such consummation.
(b) Contribution Agreement Closing. The Closing under the
contribution Agreements shall have occurred or be
occurring simultaneously with the Closing.
Section 20. Miscellaneous
20.1 Indemnification.
(a) Acquiror shall indemnify, defend and hold harmless
Contributor, and each of its directors, officers, members,
affiliates, agents, attorneys, accountants and employees, and each
of their respective successors and assigns (all collectively, the
"Contributor Indemnified Parties"), of, from and against, any and
all loss, claim, damage, suit, action, cause of action, liability,
penalty, judgment, decree, cost and expense (including, without
limitation, reasonable attorneys' fees and costs), which may at any
time be asserted or recovered against or incurred by
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any such Contributor Indemnified Parties, or any of them, arising
from, in connection with, on account of, or relating to any and all
debts, liabilities and obligations of Acquiror to any third party or
the government, whether fixed or contingent, known or unknown,
choate or inchoate, liquidated or unliquidated, secured or unsecured
or otherwise, arising after the Closing Date with respect to the
Assumed Liabilities.
(b) Contributor shall indemnify, defend and hold harmless
Acquiror, and each of its directors, officers, partners, affiliates,
agents, attorneys, accountants and employees, and each of their
respective successors and assigns (all collectively, the "Acquiror
Indemnified Parties"), of, from and against, any and all loss,
claim, damage, suit, action, cause of action, liability, penalty,
judgment, decree, cost and expense (including, without limitation,
reasonable attorneys' fees and costs), which may at any time be
asserted or recovered against or incurred by any such Acquiror
Indemnified Parties, or any of them, arising from, in connection
with, on account of, or relating to any and all debts, liabilities
and obligations of Contributor to any third party or the government,
whether fixed or contingent, known or unknown, choate or inchoate,
liquidated or unliquidated, secured or unsecured or otherwise,
existing on the Closing Date or, except with respect to Assumed
Liabilities, arising thereafter.
20.2 Indemnification Limitation. Notwithstanding Section 6.1 of this
Agreement, (i) no claim for indemnification shall be asserted against either
Contributor or Acquiror with respect to any single Loss in an amount less than
$10,000 (it being understood that all Losses arising from the same operative
facts and circumstances shall be deemed a single aggregate Loss); (ii) no
amounts shall be payable by Acquiror or Contributor under this Section 6 unless
and until the aggregate amount otherwise payable by such Acquiror or Contributor
in the absence of this clause exceeds $50,000, in which event all amounts in
excess of such amount (but only such amounts in excess) shall be due; and (iii)
no claim for indemnification under this Section 6 shall first be asserted after
the first anniversary of the Closing Date.
20.3 Publicity. No press release or other public announcement
concerning this Agreement or the transactions contemplated hereby shall be made
without advance approval thereof by Contributor and Acquiror, except as required
by law.
20.4 Notices. Any and all notices or other communications or
deliveries required or permitted to be given or made pursuant to any of the
provisions of this Agreement shall be deemed to have been duly given or made for
all purposes if (i) hand delivered, (ii) sent by a nationally recognized
overnight courier for next business day
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delivery or (iii) sent by confirmed facsimile transmission as follows:
If to Acquiror, at:
c/o Mack-Cali Realty Corporation
11 Commerce Drive
Cranford, new Jersey 07016
Attention: Roger W. Thomas, Esq.
Tel: (908) 272-8000
Fax: (908) 272-6755
with a copy to:
Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attention: Wayne B. Heicklen, Esq.
Tel: (212) 326-0425
Fax: (212) 326-0806
If to Contributor, at:
Pacifica Holding Company LLC
5975 South Quebec Street
Suite 100
Englewood, CO 80111
Attention: Steve Leonard
Tel: (303) 721-7600
Fax: (303) 721-1122
With a copy to:
Brownstein Hyatt Farber & Strickland, P.C.
410 Seventeenth Street, Suite 2200
Denver, Colorado 80202
Attention: Edward Barad
Tel: (303) 534-6335
Fax: (303) 623-1956
Notices shall be deemed properly delivered and received when and if either (i)
personally delivered; (ii) on the first business day after deposit with Federal
Express or other commercial overnight courier for delivery on the next business
day, or (iii) facsimile transmission, receipt confirmed. Any party may change
its address for deliver of notices by properly notifying the
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others pursuant to this Section 6.4.
20.5 Governing Law; Severability. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of Colorado
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Colorado or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Colorado. Should any clause, section or part of this Agreement be held or
declared to be void or illegal for any reason, all other clauses, sections or
parts of this Agreement shall nevertheless continue in full force and effect.
20.6 Successors and Assigns. The terms, conditions and covenants of
this Agreement shall be binding upon and shall inure to the benefit of the
parties and their respective nominees, successors, beneficiaries and assigns;
provided, however, no direct or indirect conveyance, assignment or transfer of
any interest whatsoever of, in or to any or all of the Management Contracts
shall be made by Contributor during the term of this Agreement. Acquiror may
assign all or any of its right, title and interest under this Agreement to an
Affiliate. No such assignee shall accrue any obligations or liabilities
hereunder until the effective date of such assignment. In addition to its right
of assignment, Acquiror shall also have the right, exercisable prior to Closing,
to designate any Affiliate, as the grantee or transferee of any or all of the
conveyances, transfers and assignments to be made by Contributor at Closing
hereunder, independent of, or in addition to, any assignment of this Agreement.
In the event of an assignment of this Agreement by Acquiror (but not in the
event of the designation of any Affiliate), its assignee shall be deemed to be
the Acquiror hereunder for purposes hereof, and shall have all rights of
Acquiror hereunder (including but not limited to, the right of further
assignment), and the assignor shall be released from all liability hereunder. In
the event that an Affiliate shall be designated as a transferee hereunder, that
transferee shall have the benefit of all of the representations and rights
which, by the terms of this Agreement, are incorporated in or relate to the
conveyance in question.
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* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed on the date and year first above written.
MACK-CALI REALTY, L.P., a Delaware PACIFICA HOLDING COMPANY LLC, a
limited partnership limited liability company
By: Mack-Cali Realty Corporation, a
Delaware corporation and its sole general
partner
By:
-------------------------------
By: Steve Leonard
--------------------------------------- Manager
Name: Roger W. Thomas
Title: Executive Vice President
21
CONTRIBUTION AND EXCHANGE AGREEMENT
THIS CONTRIBUTION AND EXCHANGE AGREEMENT (the "Agreement") made this 25th
day of March, 1998, by and between PACIFICA PROGRESS/UNION LIMITED LIABILITY
COMPANY ("Contributor"), a Colorado limited liability company with an address
c/o Pacifica Holding Company, 5975 South Quebec Street, Suite 100, Englewood,
Colorado 80111, MACK-CALI REALTY, L.P., a Delaware limited partnership ("MCRLP")
and MACK-CALI REALTY CORPORATION, a Maryland corporation ("Mack-Cali"), each
having an address at 11 Commerce Drive, Cranford, New Jersey 07016.
RECITALS
A. Contributor owns various commercial properties located throughout the
Denver, Colorado metropolitan area. Mack-Cali, through MCRLP and certain
affiliated entities of MCRLP, similarly owns various commercial properties
located throughout New Jersey, New York, Pennsylvania, Nebraska, Iowa,
California, Florida, Arizona, Connecticut and Texas.
B. Contributor, MCRLP and Mack-Cali have determined that the transactions
contemplated hereby are in the respective parties' best interests.
NOW, THEREFORE, in consideration of ten dollars ($10.00), the mutual
promises hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, do hereby agree as follows:
1. SUBJECT OF CONVEYANCE.
In accordance with the terms and conditions of this Agreement, on the
Closing Date (as defined herein), Contributor agrees to contribute, convey or
otherwise transfer to certain designees of MCRLP all of Contributor's right,
title and interest in and to the assets set forth in paragraphs (a) through (h)
of this Section 1:
(a) that certain real property situate, lying and being in the State of
Colorado and being more particularly described on Schedule 1(a) (the "Land"),
which Schedule 1(a) sets forth the name, state of organization and type of
entity of Contributor of a parcel of Land and all of the improvements located on
the Land (individually, a "Building" and collectively, the "Improvements");
(b) all rights, privileges, grants and easements appurtenant to
Contributor's interests in the Land and Improvements, if any, including without
limitation, 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
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the Land and Improvements (the Land and Improvements and all such rights,
privileges, easements, grants and appurtenances are sometimes collectively
referred to herein as the "Real Property");
(c) except as set forth on Schedule 1(c) all personal property, artwork,
fixtures, equipment, inventory and computer programming and software owned by
Contributor and located on any of the Real Property or used at any of the
management and corporate offices of Contributor (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
(each a "Lease" and collectively, the "Leases") and any guaranties provided
thereunder, and rents, additional rents, reimbursements, profits, income,
receipts and the amount deposited (the "Security Deposit") under any Lease in
the nature of security for the performance of the Tenant's (as defined herein)
obligations thereunder;
(e) Intentionally Deleted.
(f) all permits, licenses, guaranties, approvals, certificates and
warranties relating to the Real Property and the Personal Property
(collectively, the "Permits and Licenses"), all of Contributor's rights, titles
and interests in and to those contracts and agreements for the servicing,
maintenance and operation of the Real Property ("Service Contracts") and
telephone numbers in use at any of the Real Property or the management offices
and corporate headquarters of Contributor (together with the Permits and
Licenses and the Service Contracts, the "Intangible Property");
(g) all books, records, promotional material, tenant data, leasing
material and forms, past and current rent rolls, files, statements, 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
(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.
The Real Property, the Personal Property, the Leases, the Intangible
Property, the Books and Records and the other property interests being conveyed
hereunder are hereinafter collectively referred to as the "Property".
For all purposes herein, unless the context clearly dictates otherwise,
any reference herein to "Contributor" shall be deemed to be a reference to the
entity which is to convey any assets hereunder to MCRLP or its designees.
2. PAYMENT TERMS.
2.1 Total Exchange Consideration. The aggregate consideration for
the Property (the "Exchange Consideration") is Eleven Million Two Hundred
Seventy Eight Thousand and xx/100 ($11,278,000.00) Dollars, to be paid by MCRLP
in accordance with Section 2.2. The
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Exchange Consideration shall be allocated among the Property as set forth on
Schedule 2.1 (the "Allocated Property Values" and each an "Allocated Property
Value").
2.2 The Property(a) At the Closing (as defined herein), and upon
satisfaction of the terms and conditions provided herein, Contributor agrees to
contribute the Property to MCRLP or its Permitted Assignees (hereinafter
defined), and MCRLP (and Mack-Cali where applicable) agrees, subject to
adjustment as set forth herein, (i) to pay to Contributor or its designees, in
cash, the amount of Seven Million Seven Hundred Seventy-Five Thousand Four
Hundred Sixty Three and 51/100 ($7,775,463.51) Dollars (the "Cash Payment"),
allocated as set forth in Schedule 2.2(a)(i); (ii) to issue the Contributor
Units (hereinafter defined) in an amount set forth on Schedule 2.2(a)(ii) to
such persons as Contributor shall direct in writing (as set forth in Section
10.2(aa)) as soon as practicable following the date hereof (the "Unit Holders");
and (iii) to take title to certain Property subject to certain mortgages set
forth in Schedule 2.2(a)(iii) (collectively, the "Mortgages"). Notwithstanding
the foregoing, Mack-Cali shall have the right, in its sole discretion, to cause
any or all of the Mortgages to be satisfied at the Closing and pay for any
pre-payment fees or charges payable under such Mortgages.
(b) Simultaneous with MCRLP accepting the Property, MCRLP
shall issue, subject to adjustments as set forth herein, ___________ common
units of limited partnership interests in MCRLP (the "Contributor Units")
convertible into Mack-Cali Common Stock ("Common Stock"); provided, however,
that the Unit Holders shall be issued and shall hold the Contributor Units in
accordance with the provisions of Section 19.
(c) At the Closing, MCRLP shall issue to Contributor and/or
the Unit Holders or their designees certificates representing in the aggregate
________ Contributor Units (the "Permanent Certificates"), which Permanent
Certificates shall contain the legend set forth on Exhibit 10.2(ee).
(d) All rights and benefits incidental to the ownership of the
Contributor Units received in exchange for the Property, 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, shall accrue for the
benefit of the Unit Holders commencing on the Closing Date (as defined herein).
(e) With respect to the first Partnership Record Date (as
defined in the OP Agreement (as defined below)) on or after the Closing, the
Unit Holders 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 Unit Holders held
Contributor Units.
2.3 Intentionally Deleted.
2.4 Intentionally Deleted.
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3. INSPECTION PERIOD; MCRLP'S RIGHT OF TERMINATION
AND REJECTION PRIOR TO CLOSING.
3.1 Prior to the Closing (the "Inspection Period"), time being of
the essence as to each such date, MCRLP, at its sole cost and expense, 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, financial,
market analysis, development and economic feasibility studies and other tests,
investigations or studies as MCRLP, 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 Leases, Service Contracts, copies of Contributor's
Tax Returns and the Property Financials (as hereinafter defined) as of and for
the years ending December 31, 1995, 1996 and 1997, engineering and environmental
reports, development approval agreements, permits and approvals, which
inspection shall be satisfactory to MCRLP in its sole discretion. Contributor
agrees to cooperate with MCRLP in such review and inspection and, to the extent
not yet delivered, shall deliver said documents and information to MCRLP within
ten (10) days from the date hereof. MCRLP may terminate this Agreement for any
reason, by written notice given to Contributor, prior to the expiration of the
Inspection Period. In the event MCRLP terminates this Agreement during the
Inspection Period, this Agreement shall be null and void and the parties hereto
shall be relieved of all further obligations hereunder except as otherwise
provided herein. In the event MCRLP does not terminate this Agreement by the end
of the Inspection Period, then MCRLP shall be deemed to have elected not to
terminate this Agreement.
3.2 During the Inspection Period, MCRLP, its agents and contractors
shall have unlimited access to the Property and other information pertaining
thereto in the possession or within the control of Contributor, during normal
business hours, for the purpose of performing such studies, tests, borings,
investigations and inspections for the purposes described in Section 3.1 above.
Such right of inspection and the exercise of such right shall not constitute a
waiver by MCRLP of the breach of any representation or warranty of Contributor
which might, or should, have been disclosed by such inspection. Contributor
shall cooperate with MCRLP in facilitating its due diligence inquiry and shall
obtain, and use commercially reasonable efforts to obtain, any consents that may
be necessary in order for MCRLP to perform the same.
3.3 To assist MCRLP in its due diligence investigation of the
Property, Contributor shall deliver to MCRLP, by the execution and delivery of
this Agreement, true and correct copies of all existing Phase I environmental
studies (the "Phase I Reports") in the possession or control of Contributor with
respect to the Real Property, which Phase I Reports are set forth on Schedule
3.3 annexed hereto. In the event that MCRLP determines that it requires any new
Phase I Reports or updates thereof, the cost of such reports or updates shall be
borne by MCRLP. If MCRLP reasonably requires that further environmental
investigations be undertaken beyond any new Phase I or updated Phase I Report,
all engineering costs and expenses relating to said further environmental
investigations shall be borne by Mack-Cali.
3.4 Intentionally Deleted.
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3.5 During the Inspection Period, Mack-Cali and MCRLP shall provide
to Contributor and its agents and advisors reasonable access to Mack-Cali's and
MCRLP's books and records, and Mack-Cali and MCRLP shall provide Contributor
such other reasonable information including, without limitation, all Securities
and Exchange Commission filings of MCRLP and Mack-Cali and federal, state, and
local income, excise, franchise, and all other tax filings, in order to permit
Contributor, at its sole cost and expense, to perform reasonable due diligence
on such parties. Nothing arising from Contributor's inspection or due diligence
as permitted by this Section shall give rise to a right of Contributor to
terminate this Agreement.
3.6 Mack-Cali shall have the right, without the obligation, to
terminate this Agreement if (i) at any time prior to the Closing Date, Mack-Cali
determines in its sole discretion, that any of the Property is subject to
materially adverse environmental conditions, including, without limitation, any
environmental condition that has a material adverse affect on the property value
of any Real Property, on the current use of any Real Property, on groundwater
at, on, under, about or emanating from any Real Property or on the ability of
Mack-Cali or MCRLP to finance any Real Property; or (ii) Contributor is unable
to obtain the approval of any third-party partner of the Contributors to the
terms of this Agreement; or (iii) Mack-Cali determines that certain of the
indebtedness encumbering the Property cannot be satisfactorily satisfied or
restructured.
4. TITLE; MATTERS TO WHICH THIS SALE IS SUBJECT.
4.1 As of the Closing Date, title to the Property shall be 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 the same are not yet due and payable,
but subject to adjustment as provided herein;
(b) the rights of those parties occupying space at any of the
Improvements (collectively, "Tenants") as tenants only;
(c) those restrictions, covenants, agreements, easements,
matters and things affecting title to the Real Property as of the date hereof
and more particularly described in Schedule 4.1(c) annexed hereto and by this
reference made a part hereof and such other easements, covenants and
restrictions which are entered into with the consent of MCRLP after the date
hereof, such consent not to be unreasonably withheld, delayed or conditioned;
(d) any and all laws, statutes, ordinances, codes, rules,
regulations, requirements, or executive mandates affecting the Real Property
including, without limitation, those related to zoning and land use, as of the
date hereof;
(e) the state of facts shown on the surveys described on
Schedule 4.1(e) for each of the individual properties comprising the Real
Property and the Earnout Properties;
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(f) the Service Contracts;
(g) any utility company rights, easements and franchises to
maintain poles, lines, wires, cables, pipes, boxes and other fixtures and
facilities in, over, under or upon the Real Property, provided the same do not
impair, in other than a de minimis manner, the present use of the Real Property;
(h) such matters as the Title Company (as hereinafter defined)
shall be willing, without special premium, to omit as exceptions to coverage;
(i) the lien of the Mortgages (but on the terms and conditions
of this Agreement).
4.2 Prior to the date hereof, Contributor shall have directed Land
Title Guarantee Company (the "Title Company"), as agent for Chicago Title
Insurance Company, to prepare a title insurance search and commitment for
owner's title insurance policy for the Real Property (the "Title Commitment").
MCRLP shall cause the Title Company to promptly deliver a copy of the same to
Contributor and its counsel. If any defects, objections or exceptions in the
title to the Real Property appear in the Title Commitment (other than the
Permitted Encumbrances) which MCRLP is not required to accept under the terms of
this Agreement, Contributor may, at its election, undertake to eliminate such
unacceptable defects, objections or exceptions, it being agreed that except as
provided below, Contributor shall have no obligation to incur any expense in
connection with curing such defects, objections or exceptions, other than (i)
judgments against Contributor; (ii) mortgages or other liens which can be
satisfied by payment of a liquidated amount, other than the Mortgages; and (iii)
defects, objections or exceptions which can be removed by payments not to exceed
$100,000.00 per Building in the aggregate. Contributor, 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, 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, MCRLP shall elect either (i) to
terminate this Agreement by notice given to Contributor, in which event the
provisions of Section 23.2(a) shall apply, or (ii) to accept title subject to
such unacceptable defects, objections or exceptions and receive no credit
against or reduction of the consideration to be given hereunder for the
Property. Contributor agrees and covenants that it shall not voluntarily place
any encumbrances or restrictions on title to the Real Property from and after
the date of the first issuance of the Title Commitment for said Property, except
for the right to reserve easements for utilities and ingress and egress
encumbering the Real Property (post-closing) for the benefit of adjacent
properties owned by Contributor (or any affiliate thereof) upon the written
consent of MCRLP, which consent shall not be unreasonably withheld or delayed;
and so long as the mortgagees of the Mortgages shall consent to the reservation
of the same. Mack-Cali and MCRLP covenant and agree that they shall consult with
Contributor prior to causing any other person or entity to request any
inspection of the Real Property by any governmental entity. Contributor
recognizes that Mack-Cali's and MCRLP's due diligence necessitates said
inspection. Mack-Cali and MCRLP agree that they shall conduct any due diligence
with such governmental entity with a view toward maintaining the confidentiality
of the transaction contemplated by this Agreement.
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4.3 It shall be a condition to Closing that Contributor conveys, and
that the Title Company insures, title to the Real Property in the amount of the
Allocated Property Value thereof (at a standard rate for such insurance) in the
name of MCRLP or its designees, after delivery of the Deed (as hereinafter
defined) by a standard 1992 ALTA Owner's Policy, with ALTA endorsements, to the
extent that the premium for such endorsements is paid by MCRLP, for the Real
Property as required by MCRLP 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 (i)
the exception for taxes shall apply only to the current taxes not yet due and
payable; and (ii) to the extent that the premium for such endorsements is paid
by MCRLP, (a) any Permitted Encumbrances have not been violated, and that any
future violation thereof will not result in a forfeiture or reversion of title;
and (b) MCRLP's contemplated use of the Real Property will not violate the
Permitted Encumbrances. Contributor shall provide such affidavits and
undertakings as the Title Company insuring title to the Real Property may
require and shall cure all other defects and exceptions other than the Permitted
Encumbrances and as required pursuant to Section 4.2. The words "insurable
title" and "insurable" as used in this Agreement are hereby defined to mean
title which is insurable at standard rates (without special premium) by the
Title Company without exception other than the Permitted Encumbrances, and
standard printed policy and survey exceptions.
4.4 Contributor shall cause one or more surveyors acceptable to
MCRLP to deliver to MCRLP a survey or surveys of the Real Property acceptable to
MCRLP in all respects and in conformity with ALTA standards. MCRLP shall, at
MCRLP's sole cost and expense and with Contributor's cooperation and assistance,
cause the surveyor to update the survey no more than thirty (30) days prior to
the Closing Date and shall have the general survey exception removed from the
Title Policy and the survey affirmatively insured, to the extent that the
premium for such endorsement is paid by MCRLP, to MCRLP.
4.5 Any unpaid taxes, water charges, sewer rents and assessments,
together with the interest and penalties thereon to a date not less than seven
(7) business days following the Closing Date (in each case subject to any
applicable apportionment), and any mortgages or other liens created by
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, shall be paid
at the Closing by Contributor. Contributor shall deliver to MCRLP, 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.
4.6 If the Title Commitment discloses judgments, bankruptcies or
other returns against other persons or entities having names the same as or
similar to that of Contributor, Contributor shall, upon request, deliver to the
Title Company affidavits showing that such judgments, bankruptcies or other
returns are not against Contributor, or any of its affiliates. Upon request by
MCRLP, Contributor shall deliver any affidavits and documentary evidence as are
reasonably required by the Title Company to eliminate the standard exceptions on
the ALTA Owner's Policy.
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5. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTOR.
5.1 In order to induce MCRLP and Mack-Cali to perform as required
hereunder, Contributor hereby warrants and represents to MCRLP and Mack-Cali the
following with respect to the Property:
(a) Contributor is a duly organized and validly existing
entity, organized and in good standing under the laws of the state of its
formation, as more particularly set forth in Exhibit A hereto, is duly
authorized to transact business in the State of Colorado, 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 partners, members, shareholders and/or
principals 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.
(b) Intentionally Deleted.
(c) 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.
(d) Annexed hereto as Schedule 5.1 (d) is a true, complete and
correct schedule of all of the Leases. The Leases are valid and bona fide
obligations of the landlord and Tenants thereunder and are in full force and
effect. To the best of Contributor's knowledge, no defaults exist thereunder and
no condition exists which, with the passage of time or the giving of notice or
both, will become a default; the Leases constitute all of the leases, tenancies
or occupancies affecting the Real Property on the date hereof; all Tenants have
commenced occupancy; there are no agreements (other than the Leases) which
confer upon any Tenant or any other person or entity any rights with respect to
the Property, nor is any Tenant entitled now or in the future to any concession,
rebate, offset, allowance or free rent for any period, nor has any such claim
been asserted by any Tenant.
(e) Annexed hereto as Schedule 5.1(e) (the "Rent Roll") is a
listing of the following, which is true, complete and correct in all respects
for each Building: (i) the name of each Tenant; (ii) the fixed rent actually
being collected; (iii) the expiration date or status of each Lease (including
all rights or options to renew); (iv) the Security Deposit, if any; (v) whether
there is any guaranty of a Tenant's obligations from a third party, and if so
the nature of said guaranty; (vi) any written notices given by any Tenant of an
intention to vacate space in the future; (vii) the base
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year(s) and base year amounts for all items of rent or additional rent billed to
each Tenant on that basis; and (viii) any arrearages of any Tenant beyond thirty
(30) days.
(f) To the knowledge of Contributor, Contributor has performed
all of the obligations and observed all of the covenants required of it as
landlord under the terms of the Leases. Except as set forth on Schedule 5.1(f)
annexed hereto, all work, alterations, improvements or installations required to
be made for or on behalf of all Tenants under the Leases have in all respects
been carried out, performed and complied with, and there is no agreement with
any Tenant for the performance of any work to be done in the future. To the
knowledge of Contributor, except as set forth on Schedule 5.1(f), no work has
been performed at any Building which would require an amendment to the
certificate of occupancy for such Building for which an amendment has not been
obtained, and any and all work performed at the Real Property to the date hereof
and to the Closing Date has been and will be in accordance with the rules, laws
and regulations of all applicable authorities. All bills and claims for labor
performed and materials furnished to or for the benefit of the Property arising
prior to the Closing Date will be paid in full by Contributor within customary
time periods, not to exceed forty-five (45) days from the receipt of an invoice
by Contributor. The tenant improvement credit in the amount of $190,000, due to
Arbitration Forums under its lease at 141 Union has been paid by Contributors
prior to Closing.
(g) There are no service contracts, union contracts,
employment agreements or other agreements affecting the Property or the
operation thereof, except the Service Contracts and other contracts and
agreements set forth on Schedule 5.1(g) annexed hereto. All of the Service
Contracts are and will on the Closing Date be unmodified and in full force and
effect without any material default or claim of material default by any of the
parties thereto. All sums presently due and payable by Contributor under the
Service Contracts have been fully paid and all sums which become due and payable
between the date hereof and the Closing Date shall be fully paid by Contributor
within customary time periods, not to exceed forty-five (45) days from the
receipt of an invoice by Contributor. All of the Service Contracts may be
terminated on not more than sixty (60) days notice without the payment of any
fee or penalty, and the representation contained in this sentence is not subject
to being modified by the limitations of Section 5.5. There are no employees of
Contributor, or an affiliate of Contributor, working at or in connection with
the Real Property pursuant to any of the Service Contracts, other contracts and
employment agreements, except as set forth on Schedule 5.1(g).
(h) Except as set forth on Schedule 5.1(h) annexed hereto,
there are no actions, suits, labor disputes, litigation or proceedings currently
pending or, to the knowledge of Contributor, threatened against Contributor
(with respect to the Property being sold) or all or any part of the Property,
the environmental condition thereof, or the operation thereof.
(i) Except as set forth on Schedule 5.1(i) annexed hereto,
Contributor has received no written notice and has no knowledge of (i) any
pending or contemplated annexation or condemnation proceedings, or private
purchase in lieu thereof, affecting or which may affect the Real Property or any
part thereof, (ii) any proposed or pending proceeding to change or redefine the
zoning classification of all or any part of the Real Property, (iii) any
proposed or pending special assessments affecting the Real Property or any
portion thereof, (iv) any penalties or interest due with
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respect to real estate taxes assessed against the Real Property, or (v) any
proposed changes in any road or grades with respect to the roads providing a
means of ingress and egress to the Real Property. Contributor agrees to furnish
MCRLP with a copy of any such notice received within two (2) business days after
receipt.
(j) Contributor has provided MCRLP with all reports in
Contributor's possession or under its control related to the physical condition
of the Real Property.
(k) Except as set forth on Schedule 5.1(k) annexed hereto,
Contributor has no knowledge of any notices, suits, or judgments relating to any
violations (including environmental) of any laws, ordinances or regulations
affecting the Real Property, or any violations or conditions that may give rise
thereto, and has no reason to believe that any agency, board, bureau,
commission, department or body of any municipal, county, state or federal
governmental unit, or any subdivision thereof, having, asserting or acquiring
jurisdiction over all or any part of the Real Property or the management,
operation, use or improvement thereof (collectively, the "Governmental
Authorities" or "Governmental Authority" as the context requires) contemplates
the issuance thereof, and there are no outstanding orders, judgments,
injunctions, decrees or writ of any Governmental Authorities against or
involving Contributor or the Real Property. For purposes of this Agreement, the
term "Governmental Authority" shall also include the Internal Revenue Service
and any other federal, state, local or foreign taxing authority.
(l) There are no employees of Contributor or any affiliates of
Contributor working at or in connection with the Real Property except as set
forth on Schedule 5.1(l).
(m) Annexed hereto as Schedule 5.1(m) is a schedule of all
leasing commission obligations affecting the Property. The respective
obligations of Contributor and MCRLP with respect to said commissions are set
forth in Section 14.
(n) 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
Contributor's assets, suffered the attachment or other judicial seizure of all,
or substantially all, of 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.
(o) Except for the Mortgages and otherwise as set forth on
Schedule 5.1(o), the Personal Property is now owned and will on each of the
Closing Date be owned by Contributor free and clear of any conditional bills of
sale, chattel mortgages, security agreements or financing statements or other
security interests of any kind.
(p) To Contributor's knowledge, Contributor is not in default
under the Mortgages. True, correct and complete copies of the Loan Documents
have been delivered to MCRLP. The Loan Documents will not be amended or modified
except as required by Mack-Cali prior to the Closing Date.
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(q) Intentionally Deleted.
(r) Intentionally Deleted.
(s) Contributor has no knowledge that any part of the Real
Property has been designated as wetlands or any other word of similar purport or
meaning under the Federal Water Pollution Control Act, 33 U.S.C. ss.1251 et
seq.; the Colorado Water Quality Control Act, Colo. Rev. Stat. Section 25-8-101
et seq; or any other applicable federal, state, county or municipal statute,
ordinance, rule, regulation, order or code.
(t) To the best of Contributor's knowledge, there are no
aboveground or underground storage tanks or vessels at the Real Property,
regardless of whether or not such tanks or vessels are regulated tanks or
vessels, except as set forth on Schedule 5.1(t).
(u) Contributor has no knowledge of outstanding requirements
or recommendations by (i) any insurance company currently insuring the Property;
(ii) any board of fire underwriters or other body exercising similar functions;
or (iii) the holder of any mortgage encumbering any of the Property, which
require or recommend any repairs or work of a material nature to be done on the
Property.
(v) The financial statements, including the income and expense
statements and the balance sheets of Contributor and its affiliates, excluding
only those assets, liabilities and operations not contemplated to be contributed
pursuant to this Agreement, relating to Contributor's ownership and operation of
the Property and the related statement of income, partners' capital and cash
flows, including the footnotes thereto (the "Property Financials") as of and for
the years ending December 31, 1995, 1996 and 1997, fairly present the financial
position of Contributor relating to the Property as of such dates and the
results of operations and cash flows of Contributor relating to the ownership
and operation of the Property for such respective periods. The Property
Financials from January 1, 1998, through the most recent month ending prior to
the Closing Date, fairly present the financial position of the Property relating
to the ownership and operation of the Property as of such date (subject to the
normal year-end adjustments described in Schedule 5.1(v)) and with all interim
financial statements of the Property heretofore delivered to MCRLP on behalf of
Contributor.
(w) Except as set forth in Schedule 5.1(w), Contributor does
not maintain any 401(k) savings plans, pension plans, multi-employer plans (as
defined in Section 3(37) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), employee benefit plans (as defined in ERISA) or employee
welfare plans providing for benefits to Contributor's employees (each, a
"Contributor Plan"). From and after the date hereof, Contributor shall not adopt
a Contributor Plan. Mack-Cali shall have no liability to any current or former
employees of Contributor or any affiliate thereof, including, without
limitation, any liabilities which may arise as a result of the consummation of
the transactions contemplated by this Agreement, under any plans or programs
listed on Schedule 5.1(w), or arising under applicable federal or state law,
including, without limitation, under the Worker Adjustment and Retraining
Nonfiction Act (WARN) and Consolidated Omnibus Budget Reconciliation Act of 1985
(COBRA).
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(x) Intentionally Deleted.
(y) Except as disclosed in the Phase I Reports or otherwise
set forth in Schedule 5.1(y):
(i) To the best of Contributor's knowledge, no
Governmental Authority has demanded in writing, addressed to Contributor or any
of its affiliates, counsel or agents, that any Contaminants (as defined herein)
be cleaned up or environmentally remediated at any Real Property, which has not
been cleaned up or environmentally remediated.
(ii) To the best of Contributor's knowledge, no
Contaminants have been Discharged (as hereinafter defined) which would allow a
Governmental Authority to demand that a cleanup be undertaken.
(iii) To the best of Contributor's knowledge, no
ss.104(e) informational request, issued pursuant to CERCLA (as hereinafter
defined) with respect to the Real Property has been received by Contributor.
(iv) To the best of Contributor'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.
(v) To the best of Contributor's knowledge, there is no
asbestos or asbestos containing material requiring remediation under
Environmental Laws (as hereinafter defined) on the Real Property, except as set
forth on Schedule 5.1(y).
(vi) To the best of Contributor's knowledge, all
transformers and capacitors containing polychlorinated biphenyls ("PCBs") , and
all "PCB Items", as defined in 40 CFR, ss.761.3, located on or affecting the
Real Property, are identified in Schedule 5.1(y) and are in compliance with all
Environmental Laws.
(vii) To the best of Contributor's knowledge, Pacifica
has all material certificates, licenses and permits (the "Permits"), including
without limitation, environmental Permits, required to operate the Real
Property. To the best of Contributor'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, as the case may be, without
additional payment by MCRLP, and shall, upon closing, be transferred to MCRLP by
Contributor.
(viii) To the best of Contributor's knowledge, the Real
Property has not been used during the period of Contributor's ownership as solid
wastes disposal sites and facilities as defined in the Colorado Solid Wastes
Disposal Sites and Facilities Law, Colo. Rev. Stat. Section 30-20-100.5 et seq.
and the regulations promulgated thereunder.
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(ix) To the best of Contributor's knowledge, there are
no engineering or institutional controls 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 Colo. Rev. Stat. Section 25-15-208 et seq. and
the regulations promulgated thereunder.
(x) Contributor has not transported any Contaminants
from the Real Property to another location in violation of Environmental Laws.
(xi) To the best of Contributor's knowledge, there are
no federal or state liens, as referenced under CERCLA and the regulations
promulgated thereunder, or under any other applicable Environmental Law that
have attached to the Real Property.
(xii) Contributor has provided MCRLP with all
environmental site assessments, investigations, and documents and all other
Environmental Documents (as that term is defined below) in its possession or
under its control and shall continue to do so after execution of this Agreement
promptly upon its receipt.
(xiii) 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
Contributor 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
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Governmental Authority and directives, orders, approvals and disapprovals issued
by any Governmental Authority.
(D) "Environmental Laws" means each and every
applicable federal, state, county or municipal statute, ordinance, rule,
regulation, order, code, directive or requirement of any Governmental Authority
in any way related to Contaminants.
(z) Contributor and its affiliated entities shall have timely
paid all Taxes (as defined herein) due and payable on or prior to the Closing
Date in connection with the ownership and/or operation of the Property (by them
or any predecessor entities) or their businesses for which MCRLP (or any of its
direct or indirect partners) could be held directly or indirectly liable or a
claim could be made against the Property. Contributor and its affiliated
entities shall have timely filed all Tax Returns (as defined herein) required to
be filed on or prior to the Closing Date in connection with the ownership and/or
operation of the Property (by them or any predecessor entities) or their
businesses, and the non-timely filing (or non-filing) of which could result in
direct or indirect liability to MCRLP (or any of its direct or indirect
partners) or a claim against the Property. Each such Tax Return is complete and
accurate in all respects. Contributor and its affiliated entities shall have
timely paid or will timely pay, or shall have provided for or will provide for a
cash reserve for the payment of, all Taxes due and payable on or after the
Closing Date for all taxable periods (or portions thereof) ending on or prior to
the Closing Date (a "Pre-Closing Tax Period" or "Pre-Closing Tax Periods"), and
in connection with the ownership and/or operation of the Property (by them or
any predecessor entities) or their businesses for which MCRLP (or any of its
direct or indirect partners) could be held directly or indirectly liable or a
claim could be made against the Property. Contributor and its affiliated
entities shall timely file all Tax Returns which relate to all Pre-Closing Tax
Periods but which are required to be filed after the Closing Date in connection
with the ownership and/or operation of the Property (by them or any predecessor
entities) or their businesses, the non-timely filing (or non-filing) of which
could result in direct or indirect liability to MCRLP (or any of its direct or
indirect partners) or a claim against the Property. Each such Tax Return will be
complete and accurate in all respects. True and complete copies of all Tax
Returns filed by Contributor for taxable periods beginning on or after January
1, 1994, and all written communications relating thereto, have been, or will be
upon request, delivered to Mack-Cali. Contributor has also provided, or will
also provide upon request, to Mack-Cali copies of: (i) any letter ruling,
determination letter or similar document issued to Contributor by any
Governmental Authority, and (ii) any closing or other agreement entered into by
Contributor with any Government Authority. Except as set forth on Schedule
5.1(z), there are no ongoing Audits or Audits pending or, to the knowledge of
Contributor and each of its affiliated entities, threatened with respect to the
ownership and/or operation of the Property (by Contributor, its affiliated
entities or any of their predecessor entities) or the businesses of Contributor
or any of its affiliated entities, which could result in direct or indirect
liability to MCRLP (or any of its direct or indirect partners) or a claim
against the Property. There are no agreements or waivers extending the statutory
period of limitations with respect to any such Tax Returns or for the assessment
or collection of any such Taxes. No claim has ever been made by a Governmental
Authority in a jurisdiction where Contributor does not file Tax Returns that it
is or may be subject to taxation by that jurisdiction.
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(aa) Annexed hereto as Schedule 5.1(aa) is a listing, for
federal income tax purposes, of the following information, which is true,
complete and correct in all aspects for each item of Property: (i) its adjusted
basis as of the first day of Contributor's taxable year which includes the
Closing Date; (ii) the date placed in service; (iii) the depreciation method;
and (iv) the remaining useful life.
(bb) Subject to the provisions of Section 5.5, no
representation or warranty made by Contributor contained in 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.
(cc) As used throughout this Agreement, the phrases "to
Contributor's knowledge," "to the knowledge of Contributor," "to the best of
Contributor's knowledge" or any similar derivation thereof, shall mean the
actual (not constructive) knowledge of Terrence Claassen, David Goldberg,
Chetter Latcham, Steve Leonard, Rich Majors, Adel Nassif, Chuck Peck and Della
Wegman, without having undertaken any independent investigation of facts or
legal issues, without any duty to do so, and without imputing to the
aforementioned persons the knowledge of any employee, agent, representative or
affiliate of Contributor or of any other person or entity.
5.2 Intentionally Deleted.
5.3 All representations and warranties made hereunder by Contributor
and in this Agreement shall survive the Closing Date for a period of one (1)
year, except that the representations and warranties set forth in clauses (a),
(c), (w) and (z) of Section 5.1 shall survive such Closing Date for the
applicable period of the statute of limitations (unless otherwise specified
herein), and shall not be merged in the delivery of the Deed. Notwithstanding
the foregoing, to the extent that a Tenant shall certify in its Estoppel
Certificate (as defined below) as to any of the matters which are contained in
the representations and warranties made by Contributor in Section 5.1(f) of this
Agreement, then Contributor's representations and warranties as to such matters
shall be of no force or effect to the extent of any conflict. Pacifica Holding
Company, a Colorado corporation; and Pacifica Holding Company, a Colorado
limited liability company (collectively, "Guarantor"); and Contributor, jointly
and severally, shall, pursuant to a separate indemnity agreement (the "Indemnity
Agreement") in the form attached hereto as Schedule 5.3, indemnify and defend
Mack-Cali and MCRLP, and to hold Mack-Cali and MCRLP 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 Mack-Cali or MCRLP by reason
of or resulting from any breach, inaccuracy, incompleteness or non-fulfillment
of the representations, warranties, covenants and agreements of Contributor
contained in this Agreement to the full extent that Contributor would otherwise
have been liable therefor under the provisions of this Agreement. The foregoing
indemnity shall be deemed to be material to MCRLP and Mack-Cali's obligation to
perform hereunder and shall survive the Closing. Notwithstanding the foregoing,
the members of Contributor shall have no liability for any loss resulting from
any breach of the foregoing representations and warranties. In addition, except
as set
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forth in Section 28, MCRLP shall not have a right to bring a claim against
Contributor by virtue of any of the representations or warranties being false or
misleading unless and until the aggregate damages to MCRLP and/or Mack-Cali are
reasonably expected to exceed $100,000.00, but thereafter MCRLP and/or Mack-Cali
may bring a claim against Contributor for the entire amount of its aggregate
damages.
5.4 Contributor acknowledges that it is not in a significantly
disparate bargaining position with respect to MCRLP or Mack-Cali in connection
with the transaction contemplated by this Agreement and that Contributor was
represented by legal counsel in connection with this transaction.
5.5 Mack-Cali and MCRLP each acknowledges that it has had, or will
have had, as of the Closing, sufficient time to review all materials and
information set forth in Schedule 5.5, and sufficient time and access to review
and investigate the Property. Notwithstanding any other provision of this
Agreement, except as set forth in Subsections 5.1(d), (e) and (f), as they
relate to the Leases, the Estoppels and the Rent Rolls, the representations and
warranties of Contributor as set forth herein or in Contributor's Closing
Certificate are hereby modified to be made true to the extent that, as of the
date hereof with respect to the representations and warranties made herein, and
as of the Closing Date with respect to the representations and warranties made
by Contributor as of the Closing Date, (i) information contained in the records
made available as set forth in Schedule 5.5 no longer makes the subject
representation or warranty not true, whether or not either Mack-Cali or MCRLP
has actual knowledge of such information, or (ii) either Mack-Cali or MCRLP has
knowledge that the subject representation or warranty is untrue, or (iii)
Contributor has delivered or made available to any of the individuals described
in Section 6.1(l) other written information disclosing that the subject
representation or warranty is not true, whether or not either Mack-Cali or MCRLP
has actual knowledge of such information.
6. REPRESENTATIONS AND WARRANTIES OF MACK-CALI AND MCRLP.
6.1 In order to induce Contributor to perform as required hereunder,
Mack-Cali and MCRLP hereby jointly and severally warrant and represent the
following:
(a) (i) MCRLP 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 MCRLP
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) Mack-Cali is a duly organized and validly existing
corporation organized and in good standing under the laws of the State of
Maryland, has all requisite power and authority to execute and deliver this
Agreement and all other documents and instruments to be executed and delivered
by it hereunder, and to perform its obligations hereunder and under such
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other documents and instruments in order to permit MCRLP to acquire the Property
in accordance with the terms and conditions hereof. All necessary actions of the
board of directors of Mack-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 Mack-Cali and MCRLP hereunder, when duly
executed and delivered, will be the legal, valid and binding obligation of each
of Mack-Cali and MCRLP, enforceable in accordance with the terms of this
Agreement. The performance by each of Mack-Cali and MCRLP 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 Mack-Cali and MCRLP 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 Mack-Cali and MCRLP 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 Contributor Unit Holders are duly authorized and, when issued by MCRLP, will
be fully paid and non-assessable, free and clear of any mortgage, pledge, lien,
encumbrance, security interest, claim or rights of interest of any third party
of any nature whatsoever. The shares of Common Stock to be issued by Mack-Cali
upon redemption of the Contributor Units will be reserved for future listing
with the New York Stock Exchange prior to the date upon which any of the same
will be 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) MCRLP has furnished to Contributor a true and complete
copy of the OP Agreement, as amended to date.
(e) Mack-Cali has caused to be delivered to Contributor copies
of the OP Agreement. The SEC Documents were, and those additional documents
filed between the date hereof and the Closing will be, prepared and filed in
compliance with the rules and regulations promulgated by the SEC, and do not and
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein in order to make the statements
contained therein, in light of the circumstances under which they were made or
will be made, not misleading.
(f) The consolidated financial statements included in the SEC
Documents have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the period involved (except as
may be indicated in the notes thereto or, in the case of the unaudited
statements, as permitted by Form 10-Q) and present fairly (subject, in the case
of the unaudited statements, to normal, recurring year-end audit adjustments)
the consolidated financial position of Mack-Cali and its Subsidiaries at the
dates thereof and the consolidated results of operations and cash flows for the
periods then ended. For purposes of this Agreement, "Subsidiaries" shall mean
(i) any entity of which Mack-Cali (or other specified entity) shall own directly
or indirectly through a subsidiary, a nominee arrangement or otherwise (x) at
least a majority
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of the outstanding capital stock (or other shares of beneficial interest), or
(y) at least a majority of the partnership, joint venture or similar interests;
and (ii) any entity in which Mack-Cali (or other specified entity) is a general
partner or joint partner, including without limitation MCRLP. "Subsidiaries"
shall specifically exclude Mack-Cali Services, Inc. and The Grove Street Urban
Renewal Corp., which are the only non-qualified REIT subsidiaries of Mack-Cali
as of the date hereof.
(g) No action, suit, claim, investigation or proceeding,
whether legal or administrative or in mediation or arbitration, is pending or,
to the best of each of Mack-Cali's and MCRLP's knowledge, threatened, at law or
in equity, against either of Mack-Cali or MCRLP before or by any court or
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality which would prevent either of Mack-Cali or
MCRLP from performing its respective obligations pursuant to this Agreement.
(h) The execution and delivery of this Agreement and the
performance by each of Mack-Cali and MCRLP 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 Mack-Cali or MCRLP, including
without limitation, the United States of America, the States of New York and New
Jersey or any political subdivision of any of the foregoing, or any decision or
ruling of any arbitrator to which Mack-Cali or MCRLP is a party or by which
Mack-Cali or MCRLP is bound or affected.
(i) (1) Mack-Cali (A) 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 ("REIT") within the meaning of Section 856 of the Internal
Revenue Code of 1986, as amended (the "Code"), (B) has complied with all
applicable provisions of the Code which would have enabled it to qualify as a
REIT for 1995 and 1996, (C) has operated, and intends to continue to operate, in
such a manner so as to enable it to qualify as a REIT for 1998 and subsequent
years, and (D) has not taken or omitted to take any action which would
reasonably be expected to cause its disqualification as a REIT, and no challenge
to its REIT status is pending or, to Mack-Cali's knowledge, threatened.
(2) Mack-Cali has timely filed with the appropriate
Governmental Authority all Tax Returns required to be filed by it or has timely
requested extensions and any such request has been granted and has not expired.
Each such Tax Return is true and correct in all material respects. All Taxes
shown as owed by Mack-Cali or any of its Subsidiaries on any Tax Return have
been paid or accrued, except for Taxes being contested in good faith and for
which adequate reserves have been established. None of Mack-Cali or any of its
Subsidiaries has executed or filed with the Internal Revenue Service or any
other taxing authority any agreement now in effect extending the period for
assessment or collection of any Tax.
(3) To its knowledge, as of the date hereof, Mack-Cali
is a "domestically-controlled" REIT within the meaning of Section 897(h)(4)(B)
of the Code.
(j) All of Mack-Cali's real property and other material assets
are owned by Mack-Cali indirectly through its ownership of MCRLP and MCRLP's
Subsidiaries.
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(k) Neither Mack-Cali nor MCRLP 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 Mack-Cali's or
MCRLP's creditors, suffered the appointment of a receiver to take possession of
all, or substantially all, of Mack-Cali's or MCRLP's assets, suffered the
attachment or other judicial seizure of all, or substantially all, of
Mack-Cali's or MCRLP'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) As used throughout this Agreement, the phrases "to
Mack-Cali's knowledge," "to the knowledge of Mack-Cali", "to the best of
Mack-Cali's knowledge", to MCRLP's knowledge," "to the knowledge of MCRLP", "to
the best of MCRLP's knowledge" or any similar derivations thereof, shall mean
the actual (not constructive) knowledge of Tim Jones, John DeBari, Daniel
Wagner, Andrew Greenspan, Roger W. Thomas and Terry Noyes, without having
undertaken any independent investigation of facts or legal issues, without
having any duty to do so, and without imputing to the aforementioned persons the
knowledge of any employee, agent, representative or affiliate of Mack-Cali,
MCRLP or of any other person or entity.
6.2 Each of Mack-Cali and MCRLP 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
Mack-Cali and MCRLP were represented by legal counsel in connection with this
transaction.
6.3 All representations and warranties made by Mack-Cali and MCRLP
in this Agreement shall survive the Closing Date for a period of eighteen (18)
months, except that the representations and warranties set forth in clauses (a)
and (b) of Section 6.1 shall survive such Closing Date for the applicable period
of the statute of limitations (unless otherwise specified herein), and shall not
be merged in the delivery of the Deed. Mack-Cali and MCRLP agree to indemnify
and defend Contributor, and to hold Contributor 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 Contributor by reason of or
resulting from any breach, inaccuracy, incompleteness or non-fulfillment of the
representations, warranties, covenants and agreements of Mack-Cali and MCRLP
contained in this Agreement. Notwithstanding the foregoing, the partners of
MCRLP and the shareholders of Mack-Cali shall have no liability for any loss
resulting from any breach of the foregoing representations and warranties. In
addition, Contributor shall not have a right to bring a claim against Mack-Cali
or MCRLP by virtue of any of the representations or warranties being false or
misleading unless and until the aggregate damages to Contributor is reasonably
expected to exceed $100,000.00, but thereafter Contributor may bring a claim
against Mack-Cali or MCRLP for the entire amount of its aggregate damages.
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INTERIM OPERATING COVENANTS OF CONTRIBUTOR.
7.1 Contributor covenants and agrees that between the date hereof
and the Closing Date (the "Interim Period"), it shall perform or observe the
following with respect to the Real Property:
(a) Contributor will complete any capital expenditure program
currently in process or anticipated to be completed. 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 Property, or renew or modify any Lease, without
MCRLP's prior written consent; provided, however that Contributor shall be
permitted to enter into new leases, renewals or modifications upon prior notice
to, but without the prior written consent of MCRLP, so long as such lease,
renewal or modification is on market terms and conditions with bona fide third
parties and is the type of transaction which Contributor currently enters into
in the ordinary course of its business.
(c) Contributor shall comply with and/or remedy all violations
of statutes, ordinances, rules, regulations, orders, codes, directives or
requirements affecting the Real Property, whether or not such violations are now
noted in the records of or have been issued by any Governmental Authorities
prior to the Closing, and the Real Property shall be conveyed free of any such
violations, including, without limitation, violations of Environmental Laws.
(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 MCRLP, unless such agreement is on market terms and
conditions with bona fide third parties and is the type of agreement which
Contributor currently enters into in the ordinary course of its business, in
which case no consent of MCRLP will be required; or
(ii) Accept the surrender of any Service Contract or
Lease, or grant any concession, rebate, allowance or free rent, except in its
ordinary course of business on market terms, with bona fide third parties and
upon prior written notice to MCRLP.
(iii) Intentionally Deleted.
(e) Contributor shall not, between the date hereof and the
Closing Date, apply any Security Deposits with respect to any Tenant in
occupancy on the Closing Date, except in its ordinary course of business.
Contributor shall provide MCRLP with an updated schedule of Security Deposits at
the Closing or the Earnout Closing.
(f) Between the date hereof and the Closing Date, Contributor
will not renew, extend or modify any of the Service Contracts without the prior
written consent of MCRLP
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unless such is done by Contributor in the ordinary course of its business and
such Service Contracts contain a right to terminate on thirty (30) days' notice
with no material cost to exercise such right, in which case no consent of MCRLP
will be required.
(g) Contributor shall not remove or permit the removal of any
Personal Property located in or on the Property, except as may be required for
repair and replacement. All replacements shall be free and clear of liens and
encumbrances except to the extent the original Personal Property was so
encumbered and shall be of quality at least equal to the replaced items and
shall be deemed included in this sale, without cost or expense to MCRLP, other
than expressly provided herein.
(h) Contributor shall, upon request of MCRLP at any time after
the date hereof, assist MCRLP in its preparation of audited financial
statements, statements of income and expense, and such other documentation as
MCRLP may reasonably request, covering the period of Contributor's ownership of
the Real Property.
(i) Between the date hereof and the Closing Date, Contributor
will make all required payments under any mortgage affecting the Real Property
within any applicable grace period, but without reimbursement by MCRLP therefor.
Contributor shall also comply with all other material terms covenants and
conditions of any mortgage on the Real Property.
(j) Contributor shall not cause or permit the Real Property,
or any interest therein, to be alienated, mortgaged, licensed, encumbered or
otherwise be transferred.
(k) Contributor agrees to maintain and keep in full force and
effect the hazard, liability and casualty insurance policies it is currently
maintaining, which policies Contributor represents are sufficient 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.
(l) Contributor shall permit MCRLP 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
MCRLP hereunder shall be maintained for MCRLP's inspection at Contributor's
address as set forth in Exhibit A hereto.
(m) Contributor shall:
(i) promptly notify MCRLP of, and promptly deliver to
MCRLP, 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;
(ii) contemporaneously with the signing and delivery of
this Agreement, and subsequently promptly upon receipt by Contributor or its
representatives, deliver to MCRLP a certified true and complete copy of all
Environmental Documents; and
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(iii) timely provide MCRLP 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 MCRLP
informed of all substantive negotiations and discussions with respect to the
foregoing matters on an on-going basis.
7.2 Prior to the Closing, Contributor shall deliver to MCRLP
reviewed Property Financials as set forth in Section 5.1(v). Within thirty (30)
days after the Closing Date, Contributor shall deliver to MCRLP Property
Financials, as set forth in Section 5.1(v), through the Closing Date.
The provisions of this Section 7.2 shall survive the Closing Date.
7.3 Intentionally Deleted.
7.4 Intentionally Deleted.
7.5 Contributor and its affiliated entities will timely pay all
Taxes due and payable during the Interim Period in connection with the ownership
and/or operation of the Property (by them or any predecessor entities) or their
businesses, for which MCRLP (or any of its direct or indirect partners) could be
held directly or indirectly liable or a claim could be made against the
Property. Contributor and its affiliated entities will timely file all Tax
Returns required to be filed during the Interim Period in connection with the
ownership and/or operation of the Property (by them or any predecessor entities)
or their businesses, the non-timely filing (or non-filing) of which could result
in direct or indirect liability to MCRLP (or any of its direct or indirect
partners) or a claim against the Property. Each such Tax Return will be complete
and accurate in all respects and will be filed on a basis consistent with past
practice. A copy of all such Tax Returns shall be delivered to Mack-Cali at
least three (3) days prior to such Tax Returns being filed. The obligations set
forth in this Section 7.5 shall survive the expiration or earlier termination of
this Agreement and/or shall survive the Closing Date for the applicable period
of the statute of limitations.
8. INTENTIONALLY DELETED.
9. ESTOPPEL CERTIFICATES.
9.1 Contributor agrees to deliver to each Tenant, no later than the
date hereof, an estoppel certificate in the form annexed hereto as Exhibit 9.1
for Tenant's execution, completed to reflect Tenant's particular Lease status.
Contributor agrees to use commercially reasonable efforts to obtain from all
Tenants the estoppel certificates in such form; provided, however, that if any
Tenant shall refuse to execute an estoppel letter in such form, Contributor
shall nevertheless use commercially reasonable efforts to obtain estoppel
certificates in the form in which each Tenant is obligated to deliver the same
as provided in its Lease. Contributor agrees to deliver to MCRLP copies of all
estoppel letters received by Tenants, in the form received by Contributor. The
estoppel certificates required to be obtained pursuant to this Section 9.1 are
collectively referred to as the "Estoppel Certificates".
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9.2 As a condition to the Closing, Contributor shall deliver (a) an
Estoppel Certificate from all Tenants which lease 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 at least seventy-five (75%)
percent of the square footage of the Real Property including the Tenants set
forth in Clause 9.2(a) above.
9.3 For an Estoppel Certificate to be deemed delivered for purposes
of this Agreement, it must certify that 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.
10. CLOSINGS.
10.1 (a) Closing. The consummation of the transactions contemplated
hereunder with respect to the Property (the "Closing") shall take place at the
offices of Brownstein, Hyatt, Farber & Strickland, P.C., 410 Seventeenth Street,
22nd Floor, Denver, Colorado, 80202-4437, on or about March 25, 1998 (the
"Closing Date"). Upon notice to Contributor, MCRLP may elect to accelerate the
Closing Date to a date not less than five (5) days after the date of MCRLP's
notice.
(b) Intentionally Deleted.
(c) Intentionally Deleted.
(d) Intentionally Deleted.
10.2 On the Closing Date, except as otherwise set forth in
Subsections 10.2(z) and 10.2(aa), Contributor, at its sole cost and expense,
will deliver or cause to be delivered to MCRLP the following documents, fully
executed by all parties thereto other than MCRLP or parties claiming by, through
or under MCRLP:
(a) Special Warranty Deeds (the "Deeds") with covenants in
proper statutory form for recording so as to convey to MCRLP good and marketable
title to the Land being conveyed, free and clear of all liens and encumbrances,
except the Permitted Encumbrances. The delivery of the Deeds shall also be
deemed to constitute a transfer of the Personal Property associated with the
Land conveyed by the Deeds; the delivery of all of the Deeds shall be deemed to
constitute a transfer of the balance of the Personal Property to MCRLP.
(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 the same.
(c) All other original documents or instruments referred to
herein, including without limitation the Service Contracts, Licenses and Permits
and Books and Records, and certified copies of the same where Contributor, using
its best efforts, is unable to deliver originals of the same.
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(d) A letter to Tenants advising the Tenants of the sale
hereunder and directing that rent and other payments thereafter be sent to MCRLP
or its designee, as MCRLP shall so direct.
(e) Intentionally Deleted.
(f) Duly executed and acknowledged omnibus assignment in the
form of Exhibit 10.2(f) annexed hereto ("Omnibus Assignment").
(g) Duly executed Asset Purchase Agreement in the form of
Exhibit 10.2(g) annexed hereto.
(h) An affidavit, and such other document or instruments
required by the Title Company, executed by Contributor certifying (i) against
any work done or supplies delivered to the Real Property which might be grounds
for a materialman's or mechanic's lien under or pursuant to Colorado Lien Law,
in form sufficient to enable the Title Company to affirmatively insure MCRLP
against any such lien, (ii) that the signatures on the Deeds are sufficient to
bind Contributor and convey the Property to MCRLP, and (iii) the Rent Roll.
(i) Affidavits and other instruments, including but not
limited to all organizational documents of Contributor and Contributor's general
partners, as applicable, including operating agreements, filed copies of limited
liability certificates, articles of organization, and good standing
certificates, reasonably requested by MCRLP 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 the 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 MCRLP to realize upon the same.
(l) A certificate indicating that the representations and
warranties of Contributor made in this Agreement are true and correct as of the
Closing Date or if there have been any changes, a description thereof.
(m) A Rent Roll for each Real Property, current as of the
Closing Date, certified by Contributor as being true and correct in all material
respects.
(n) All proper instruments as shall be reasonably required for
the conveyance to MCRLP 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 the Land, or Improvements or
any part thereof by reason of change of grade or closing of any such street,
road,
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highway or avenue, and (iii) for any taking in condemnation or eminent domain of
any part of the Land and Improvements.
(o) In order to avoid the imposition of the withholding tax
payment pursuant to Section 1445 of the Code, a certificate which is in a form
acceptable to Mack-Cali and which is signed by the appropriate 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) All such 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 MCRLP, including but not limited to, Internal Revenue Service forms and the
declaration required to be filed pursuant to Title 39, Article 14 of the
Colorado Revised Statutes.
(q) A statement setting forth all adjustments and prorations
shown thereon.
(r) Tradenames Assignment Agreement substantially in the form
of Exhibit 10.2(r) attached hereto.
(s) Estoppel certificate addressed to MCRLP from the
mortgagees of the Mortgages in form and substance reasonably acceptable to
MCRLP.
(t) An opinion of counsel from Brownstein, Hyatt, Farber &
Strickland, P.C., substantially in the form of Exhibit 10.2(t) regarding the due
execution, delivery and enforceability of this Agreement and the foregoing
documents.
(u) Intentionally Deleted.
(v) Duly executed and acknowledged Indemnity Agreement from
Guarantor and Contributor as set forth in Section 5.3.
(w) Intentionally Deleted.
(x) Intentionally Deleted.
(y) Such other documents as may be reasonably required by
MCRLP or as may be appropriate to effectuate the consummation of the
transactions contemplated by this Agreement.
(z) At least fifteen (15) days prior to the Closing Date, a
schedule setting forth, with respect to each item of the Property for which
Contributor Units will be received as part of the consideration: (i) those
Contributors of such item of the Property that are allocated Contributor Units
and the amount of Contributor Units so allocated to any such Contributor; (ii)
the gross fair market value of such item of the Property for purposes of
determining the gain or loss that will be
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recognized for federal income tax purposes as a result of the contribution;
(iii) the adjusted basis of such item of the Property immediately prior to the
contribution; (iv) the amount of cash and Contributor Units allocated to the
item of the Property; and (v) the amount of any liability relating to such item
of the Property that MCRLP will either assume or to which such item will be
subject and which does not constitute a "qualified liability" within the meaning
of Treasury Regulations Section 1.707-5(a)(6).
(aa) At least fifteen (15) days prior to the Closing Date, a
schedule setting forth: (i) any Contributor named for purposes of Section
10.2(z)(i) which is to receive less than the full amount of Contributor Units
indicated for purposes of Section 10.2(z)(i); and (ii) the names of those
persons who are to receive Contributor Units that each such Contributor would
otherwise be entitled to receive and the amount of units that any such persons
are to receive. At least fifteen (15) days prior to the Closing Date, each
Contributor to which this Section 10.2(aa) is relevant shall issue "direction
letters" to MCRLP (in the form acceptable to MCRLP), to the effect that each
such Contributor authorizes the issuance by MCRLP of Contributor Units directly
to such persons (and in such amounts) which are set forth for purposes of
Section 10.2(aa)(ii).
(bb) A letter from each applicable municipal department or
agency having jurisdiction that the Property is in compliance with the laws,
codes, rules, regulations and ordinances regarding (i) zoning, (ii) building,
(iii) health and (iv) fire, life and safety.
(cc) A computer diskette containing any closing or other
documents executed in connection with this transaction and prepared by
Contributor or its counsel, in WordPerfect or Microsoft Word format.
(dd) All original organizational documents relating to the
Contributor, and all statements of accounts, books and records and insurance
policies.
(ee) a certificate executed by each Contributor Unit Holder
and each Contributor receiving Contributor Units, substantially in the form of
Exhibit 10.2(ee).
10.3 On the Closing Date, Mack-Cali and MCRLP, at their sole cost
and expense, will deliver or cause to be delivered to Contributor the following
documents, fully executed by all parties thereto other than Contributor or
parties claiming by, through or under Contributor:
(a) The Cash Payment, net of adjustments and prorations.
(b) The Permanent Certificates representing, in the aggregate,
the Contributor Units.
(c) Intentionally Deleted.
(d) Duly executed and acknowledged Omnibus Assignment in the
form of Exhibit 10.2(f) annexed hereto.
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(e) A certificate indicating that the representations and
warranties of Mack-Cali and MCRLP made in this Agreement are true and correct as
of the Closing Date or if there have been any changes, a description thereof.
(f) Affidavits and other instruments, including but not
limited to all organizational documents of Mack-Cali and MCRLP including limited
partnership agreements, filed copies of limited partnership certificates,
articles of organization, and good standing certificates, reasonably requested
by Contributor evidencing the power and authority of Mack-Cali and MCRLP to
enter into this Agreement and any documents to be delivered hereunder, and the
enforceability of the same.
(g) A Registration Rights Agreement substantially in the form
of Exhibit 10.3(g).
(h) Amendment to OP Agreement substantially in the form of
Exhibit 10.3(h) reflecting admission of the Contributor Unit Holders as limited
partners.
(i) Tradenames Assignment Agreement substantially in the form
of Exhibit 10.2(r).
(j) Intentionally Deleted.
(k) Such other documents as may be reasonably required or
appropriate to effectuate the consummation of the transactions contemplated by
this Agreement.
10.4 Contributor shall pay for the premium charges and costs for
title insurance policies (but not any endorsements to such policies required by
Mack-Cali); all survey costs; all costs incurred to repay or satisfy any and all
liens; all administrative and legal costs associated with the assumption by
MCRLP of the mortgages to which this transaction is subject (other than the fees
or charges payable in connection with the mortgages being paid-off by Mack-Cali
as herein provided); all leasing commissions due to Tenants in connection with
the initial terms of their respective Leases; all costs of tenant improvement
concessions due to Tenants in connection with the initial terms of their
respective Leases; and all customary prorations and apportionments. Mack-Cali
shall pay for the costs of all customary documentary and recording fees;
(including, without limitation, the "documentary fee" imposed by Article 13 of
the Colorado Revised Statutes); the cost of any endorsements to its title
insurance policies; all due diligence investigations costs (including, without
limitation, the cost of all Phase I Reports for the Property, which
environmental assessment reports shall be dated no more than thirty (30) days
prior to the Closing Date); any fees or charges payable in connection with the
mortgages being paid-off by Mack-Cali as herein provided and all customary
prorations and apportionments. Each party shall be responsible for its own
attorney's fees. The provisions of this Section 10.4 shall survive the Closing.
10.5 The Closing shall be consummated without compliance with bulk
sales laws. If by reason of any applicable bulk sales law, any claims are
asserted by creditors of Contributor
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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 MCRLP (and its respective directors, officers, employees,
affiliates, successors and assigns) from and against all losses or liabilities,
if any, based upon, arising out of or otherwise in respect of the failure to
comply with such bulk sales laws.
10.6 Mack-Cali and MCRLP acknowledge and agree that, except as set
forth in this Agreement, MCRLP is acquiring the Property in its "as is"
condition "subject to all faults" and specifically and expressly without any
warranties, representations or guarantees, either express or implied, of any
kind, nature, or type whatsoever from or on behalf of Contributor. Mack-Cali and
MCRLP acknowledge that, except as set forth in this Agreement, and except for
documents, reports and information related to the environmental integrity of the
Real Property, neither Mack-Cali nor MCRLP has relied and is not relying on any
information, document, reports, sales brochure or other literature, maps or
sketches, financial information, projections, pro formas or statements, that may
have been given by or made by or on behalf of Contributor with respect to the
Property. MCRLP and Mack-Cali further acknowledge that all materials relating to
the Property which have been provided by Contributor, including but not limited
to, the Phase I Reports, have been provided without any warranty or
representation, expressed or implied as to their content, suitability for any
purpose, accuracy, truthfulness or completeness and, except as expressly
provided herein, neither MCRLP nor Mack-Cali shall have any recourse against
Contributor or its counsel, advisors, agents, officers, directors or employees
for any information in the event of any errors therein or omissions therefrom.
Contributor does not warrant or make any representation, express or
implied, as to the merchantability, quantity, quality, condition, suitability or
fitness of the Property for any purpose whatsoever, including, without
limitation, its compliance with applicable building codes and ordinances, zoning
laws, environmental laws including, without limitation, the Clean Air Act,
CERCLA and the Super Fund Amendments and Reauthorization Act (SARA), the
Americans with Disabilities Act, and any other federal, state or local statutes,
codes or ordinances. MCRLP also acknowledges and agrees that (i) the
Contributor's representations and warranties set forth in Section 5 and (ii) the
provisions in this Agreement for delivery of existing Phase I Reports and
inspection and investigation of the Property are adequate to enable MCRLP to
make MCRLP's own determination with respect to the suitability or fitness of the
Property, including, without limitation, its compliance with applicable building
codes and ordinances, zoning laws, environmental laws including, without
limitation, the Clean Air Act, CERCLA and the SARA, the Americans with
Disabilities Act, and any other federal, state or local statutes, codes or
ordinances.
Except to the extent (a) caused by a breach of any of Contributors'
representations hereunder; (b) related to claims by or liabilities to third
parties unrelated to Mack-Cali or MCRLP; or (c) as otherwise expressly set forth
herein, including, without limitation, as indemnified pursuant to the Indemnity
Agreement, MCRLP and Mack-Cali, for themselves and their successors and assigns,
hereby release each of the Contributors, and their agents, employees, partners,
officers, directors, members, managers, contractors, consultants and
representatives from, and waive any and all causes of action or claims against
any of such persons for (i) any and all liability attributable to any physical
condition of or at the Property, including, without limitation, the presence on,
under
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or about the Property of any materials the release or storage of which is
regulated by law; (ii) any and all liability resulting from the failure of the
Property to comply with any applicable laws; and (iii) any liabilities, damages
or injury arising from, connected with or otherwise caused by statements,
opinions or information obtained from any of such persons with respect to the
Property.
ADJUSTMENTS.
11.1 The following items under (a) through (g) 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. All moneys received from Tenants from and after
the Closing shall belong to MCRLP and shall be applied by MCRLP to current rents
and other charges under the Leases. After application of such moneys to current
rents and charges, MCRLP agrees to remit to Contributor any excess amounts paid
by a Tenant to the extent that such Tenant was in arrears in the payment of rent
prior to the Closing.
(b) A cashier's or certified check or wire transfer to the
order of MCRLP in the amount of all cash Security Deposits and any prepaid
rents, together with interest required to be paid thereon. At the election of
MCRLP, such amount may be allotted to MCRLP as a credit against the Cash
Payment.
(c) Utility charges payable by Contributor, including without
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 ten (10) days prior to the Closing Date.
(d) Amounts payable under the Service Contracts other than
those Service Contracts which MCRLP has elected not to assume.
(e) 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.
(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 fifteen (15) days prior to the Closing by Contributor's supplier.
(g) Intentionally Deleted.
11.2 Intentionally Deleted.
11.3 At the Closing, Contributor shall deliver to MCRLP a list of
additional rent, however characterized, under all Leases, including without
limitation, real estate taxes, electrical
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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 MCRLP of the Additional Rents
billed to Tenants, and the amounts actually incurred for calendar year 1997,
Contributor and MCRLP shall be liable for overpayments of Additional Rents, and
shall be entitled to 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.
Notwithstanding the foregoing, the calculation of real estate taxes and the
collection of Additional Rents from Tenants attributable to such real estate
taxes, as reflected on the closing statement related hereto, shall be final as
of the Closing Date.
11.4 All amounts due and owing under the Mortgages other than the
outstanding principal balance thereof, including by way of example accrued and
unpaid interest, deferred interest, late charges, default interest, prepayment
fees or penalties, and other fees and charges, shall be paid by Contributor on
or before the Closing.
11.5 If, on the Closing Date, the Property or any part thereof shall
be or shall have been affected by an assessment or assessments which are or may
become payable in annual installments, all the unpaid installments of any such
assessment due and payable on or prior to the Closing Date shall be paid and
discharged by Contributor on the Closing Date.
11.6 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 Colorado.
11.7 Any errors in calculations or adjustments shall be corrected or
adjusted as soon as practicable after the Closing.
11.8 The provisions of this Section 11 shall survive the Closing
Date.
12. CONDITIONS PRECEDENT TO CLOSING.
12.1 The obligations of Contributor to deliver title to the Real
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 MCRLP and
Mack-Cali herein shall be true and correct in all material respects with the
same force and effect as though such representations and warranties had been
made on and as of the Closing Date; provided, however, that a failure of any
representations or warranties to be true and correct in all material respects
shall not give rise to a claim by Contributor hereunder so long as such matters
do not have a material adverse effect on the transactions contemplated herein.
(b) MCRLP and Mack-Cali shall have executed and delivered to
Contributor all of the documents provided herein for said delivery.
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(c) Intentionally Deleted.
(d) Mack-Cali and MCRLP shall have performed all covenants and
obligations undertaken by Mack-Cali and MCRLP herein in all material respects
and complied with all material conditions required by this Agreement to be
performed or complied with by them on or before the Closing Date.
12.2 The obligations of Mack-Cali and MCRLP to accept title to the
Property and Mack-Cali's and MCRLP's obligation to perform the other covenants
and obligations to be performed by Mack-Cali and MCRLP 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 Mack-Cali or MCRLP):
(a) Subject to Section 5.5(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. For the purposes of the
Closing condition described in this Section 12.2(a), any limitation to the
knowledge, best knowledge, or actual knowledge in any representation, warranty,
covenant or agreement made by Contributor herein shall be inapplicable.
(b) Contributor shall have performed all covenants and
obligations undertaken by Contributor 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
MCRLP a Title Policy meeting the requirements set forth in Section 4 hereof for
an "insurable title".
(d) The Real Property shall be in compliance with all
Environmental Laws.
13. INTENTIONALLY DELETED.
LEASING COMMISSIONS AND TENANT IMPROVEMENT
OBLIGATIONS.
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 Contributor. MCRLP shall be
credited at Closing as set forth on Schedules 5.1(f) and 5.1(m) respectively
with respect to certain tenant improvement and leasing commission obligations,
but Contributors shall remain liable for any amounts due and owing in excess of
such credits. All leasing commissions on account of extensions or renewals of
Leases made after the Closing Date shall be paid by MCRLP. All tenant
improvements obligations shall be satisfied prior to the Closing Date. The
provisions of this Section shall survive the Closing.
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15. ASSIGNMENT.
This Agreement may not be assigned by Mack-Cali or MCRLP except to a
directly or indirectly wholly-owned subsidiary or subsidiaries of Mack-Cali or
MCRLP, 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 Mack-Cali or MCRLP shall be
deemed null and void and of no force and effect. Notwithstanding anything to the
contrary contained herein, Mack-Cali or MCRLP may assign the right to purchase
individual portions of the Property to various entities, provided that each of
such entities is a Permitted Assignee. A copy of any assignment permitted
hereunder, together with an agreement of the assignee assuming all of the terms
and conditions of this Agreement to be performed by Mack-Cali or MCRLP with
respect to the portion of the Real Property, in form reasonably satisfactory to
counsel for Contributor, shall be delivered to the attorneys for Contributor
prior to the Closing, and in any event, no such assignment shall relieve
Mack-Cali and MCRLP from their obligations under this Agreement.
16. BROKER.
Mack-Cali, MCRLP, and Contributor represent that, with the exception
of Sonnenblick Goldman Ltd. and Pacifica Holding Company LLC (collectively,
"Brokers") 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 they may sustain, incur or
be exposed to by reason of any breach of the foregoing representation and
warranty. Notwithstanding the foregoing, Contributor shall pay in full any
commission, fee or other compensation due the Brokers pursuant to separate
agreements, and Guarantor and Contributor agree to indemnify, defend and hold
MCRLP and Mack-Cali harmless from and against any and all loss, cost, damage,
liability, or expense, including reasonable attorneys' fees, which MCRLP or
Mack-Cali may sustain, incur or be exposed to by reason of Contributor's failure
to pay in full the Brokers pursuant to such separate agreements. The provisions
of this Section shall survive the Closing and/or other termination of this
Agreement.
17. CASUALTY LOSS.
17.1 Contributor shall continue to maintain, in all material
respects, the fire and extended coverage insurance policies with respect to the
Property (the "Insurance Policies") which are currently in effect, through the
date that said coverage currently expires, which obligation shall survive the
Closing.
17.2 If at any time prior to the Closing Date, all or any portion of
the Property is destroyed or damaged as a result of fire or any other casualty
(a "Casualty"), Contributor shall
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promptly give written notice ("Casualty Notice") thereof to MCRLP. Within ten
(10) days after the receipt of the Casualty Notice, MCRLP and Mack-Cali shall
have the right, at its sole option, to terminate this Agreement with respect to
said Property by written notice to Contributor. Notwithstanding the foregoing,
MCRLP and Mack-Cali shall not have the right to terminate this Agreement if (a)
Contributor's insurance fully covers the damage resulting from the Casualty; and
(b) the proceeds of any insurance, together with a credit equal to Contributor's
deductible under the Insurance Policies, shall be paid to MCRLP and Mack-Cali at
the time of the Closing; and (c) all unpaid claims and rights in connection with
losses to the Property shall be assigned to MCRLP and Mack-Cali at the Closing
without in any manner affecting the Exchange Consideration hereunder.
17.3 If the Property is the subject of a Casualty but MCRLP or
Mack-Cali does not terminate this Agreement pursuant to the provisions of this
Section, then Contributor shall, prior to the Closing Date, cause all temporary
repairs to be made to the Property as shall be required to prevent further
deterioration and damage to the Property and to protect public health and
safety; provided, however, that any such repairs shall first be approved by
MCRLP or Mack-Cali. Contributor shall have the right to be reimbursed from the
proceeds of any insurance with respect to the Property for the cost of such
temporary repairs.
18. CONDEMNATION.
In the event of a material taking (as defined in this Section 18),
MCRLP and Mack-Cali shall have the right, at its sole option, to either (a)
terminate this Agreement by giving Contributor written notice to such effect at
any time after its receipt of written notification of any such occurrence, or
(b) accept title to the remainder of the Property without reduction of any
consideration given hereunder. Should MCRLP or Mack-Cali so terminate this
Agreement in accordance with this Section, neither party shall have any further
liability or obligations to the other. In the event MCRLP or Mack-Cali shall not
elect to cancel this Agreement, Contributor shall, subject to the rights of the
holder of any existing mortgage, assign all proceeds of such taking to MCRLP or
Mack-Cali, and the same shall be MCRLP's or Mack-Cali's sole property, and MCRLP
or Mack-Cali shall have the sole right to settle any claim in connection with
the Property. The term "material taking" shall be defined to mean the
institution of any proceedings, judicial, administrative or otherwise which
involve (a) the taking of a portion of Real Property such that ingress and
egress to such Real Property is impaired, (b) the taking of a portion of the
parking spaces of a Real Property such that after such taking the Real Property
will not be in compliance with local zoning regulations regarding adequate
parking, or (c) the taking of any part of a Building.
19. TRANSFER RESTRICTIONS.
19.1 Contributor hereby 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
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Contributor Units (the "Underlying Shares") may only be transferred (i)
privately in accordance with the terms of the OP Agreement and this Section 19,
or (ii) publicly (subject to the restrictions of the Act and the rules and
regulations promulgated thereunder) in trading blocks of 150,000 Common Stock
shares in any single day. Notwithstanding anything herein to the contrary, the
provisions of this Section 19 shall not apply to (i) pledges or encumbrances of
all or a portion of the Contributor Units to an institutional lender, or (ii)
Transfers of all or any portion of the Contributor Units to permitted
transferees as set forth in the OP Agreement (the "Permitted Transferees"). Any
holder of Contributor Units pursuant to (i) or (ii) of the preceding sentence
shall be subject to the terms and conditions of the OP Agreement.
19.2 If any of the Contributor Unit Holders, or any of their
Permitted Transferees (each a "Seller") 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 Seller shall
not sell, transfer, or otherwise dispose of (the "Proposed Disposition") such
Units or Underlying Shares (the "Disposition Securities") to a third party (the
"Purchaser"), unless prior to such Proposed Disposition, such Seller shall have
promptly reduced the terms and conditions, if any, of the Proposed Disposition
to a reasonably detailed writing and shall have delivered written notice (the
"Disposition Notice") of such Proposed Disposition to MCRLP. The Disposition
Notice 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.
19.3 Mack-Cali shall not sell the Property within four (4) years
from the date of the Closing (the "Restricted Period") without the prior written
consent of Contributor, other than (1) in connection with a transaction which
does not result in recognition of gain by Pacifica; (2) a sale of any of the
Property set forth in Schedule 19.3 hereto; (3) as determined by the Board of
Directors of Mack-Cali (the "Board") as necessary to satisfy any material
monetary default on any mortgage secured by the Property; (4) as determined by
the Board as necessary to satisfy any material, unsecured debt, judgment or
liability of Mack-Cali when the same becomes due (at maturity or otherwise); (5)
in connection with the sale of all or substantially all of the properties owned
by Mack-Cali under such terms and conditions which the Board, in its sole
judgment, determines to be in the best interests of Mack-Cali and its public
stockholders; and/or (6) sales of the Property which do not result in material
and adverse tax consequences for Pacifica. Mack-Cali may dispose of any or all
of the Property in its sole discretion, and without the consent of Contributor,
upon the expiration of the Restricted Period. Notwithstanding any of the
foregoing language to the contrary, Mack-Cali shall not distribute the Property
for a period of seven (7) years if the distribution of such Property would
result in the recognition of income by Contributor pursuant to Sections
704(c)(1)(B) or 737 of the Code, except as otherwise permitted in clauses (1)
through (7) above.
20. INTENTIONALLY DELETED.
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21. TAX MATTERS.
21.1 (a) Contributor will timely pay or provide for the payment of
all Taxes which are attributable to all Pre-Closing Tax Periods, but which are
not due and payable until after the Closing Date in connection with the
ownership and/or operation of the Property (by them or any predecessor entities)
or their businesses for which either MCRLP (or any of its direct or indirect
partners) could be held directly or indirectly liable or a claim could be made
against the Property. To the extent allowed by law, Contributor will timely file
all Tax Returns which are required to be filed in connection with the ownership
and/or operation of the Property (by them or any predecessor entities) or their
businesses for all Pre-Closing Tax Periods but which are not required to be
filed until after the Closing Date and the non-timely filing (or non-filing) of
which could result in direct or indirect liability to MCRLP (or any of its
direct or indirect partners) or a claim against the Property. Each such Tax
Return will be complete and accurate. Contributor will provide Mack-Cali with a
copy of all such Tax Returns promptly after such Tax Returns are filed. All
Taxes imposed in connection with the ownership and/or operation of the Property
during any taxable periods which begin on or before the Closing Date and end
after the Closing Date ("Straddle Periods" or "Straddle Period") shall be
allocated between Contributor and MCRLP in accordance with their respective
periods of ownership of the Property. Contributor will timely pay all Taxes with
respect to their businesses for any Straddle Period (and any other taxable
period) for which either MCRLP (or any of its direct to indirect partners) could
be held directly or indirectly liable or a claim could be made against the
Property.
(b) Contributor shall provide Mack-Cali with a copy of its
Federal income tax returns which reflect (in whole or in part) any of the
transactions contemplated hereunder and which reflect (in whole or in part) any
of the gain or loss recognized in respect of such transactions.
21.2 Contributor shall pay any and all Taxes including without
limitation, Taxes imposed with respect to the operation of its business and the
ownership or operation of the Property for all taxable periods (or portions
thereof) ending on or prior to the Closing imposed upon MCRLP based, in whole or
in part, upon the failure to comply with the sales laws.
21.3 Contributor is hereby authorized to continue the proceeding or
proceedings now pending for the reduction of the assessed valuation of the
Property as set forth on Schedule 21.3 and to litigate or settle the same in
Contributor's discretion. MCRLP is hereby authorized by Contributor, in MCRLP's
sole discretion, to file any applicable proceeding for the 1997 fiscal year for
the reduction of the assessed valuation of the Property. The net refund of
taxes, if any, for any tax year for which Contributor or MCRLP shall be entitled
to share in the refund shall be divided between Contributor and MCRLP in
accordance with the apportionment of taxes pursuant to the provisions hereof.
All expenses in connection therewith, including counsel fees, shall be borne by
Contributor and MCRLP in proportion to their ownership period of the asset in
question.
21.4 For purposes of this Agreement:
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(a) "Taxes" or "Tax" 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.
(b) "Tax Returns" or "Tax Return" means all original and
amended Federal, state, local and foreign tax returns, declarations, statements,
reports, schedules, forms, information returns and other filings relating to
Taxes.
(c) "Audits" or "Audit" means any audit, assessment of Taxes,
any other examination or claim by any Governmental Authority, judicial,
administrative or other proceeding or litigation (including any appeal of any
such judicial, administrative or other proceeding or litigation) relating to
Taxes and/or Tax Returns.
21.5 The provisions of this Section shall survive the Closing Date.
22. PUBLICATION.
22.1 MCRLP shall have the exclusive right to make such public
announcements or filings with respect to the exchange as MCRLP may deem
reasonably prudent and, upon advice of counsel, as may be necessary or required
by law.
23. REMEDIES.
23.1 If the conditions set forth in Section 12.2 with respect to the
Closing have been satisfied (unless the failure or inability to be so satisfied
is due to Mack-Cali or MCRLP) and if MCRLP is not ready, willing and able to
perform its obligations hereunder on the Closing Date, or in the event of a
material default of MCRLP or Mack-Cali or MCRLP's or Mack-Cali's material
failure to comply with any material representation, warranty, covenant or
agreement set forth herein with respect to the Closing, then Contributor shall
have the right as its sole and exclusive remedy to either (i) terminate this
Agreement upon written notice to MCRLP, in which event neither party shall
thereafter have any further obligations under this Agreement, except those which
expressly survive the termination hereof; or (ii) maintain an action for either
(A) specific performance, or (B) monetary damages.
23.2 If the conditions set forth in Section 12.1 have been satisfied
(unless the failure or inability to be so satisfied is due to Contributor), and
if Contributor is not ready, willing
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and able to perform its obligations hereunder on the Closing Date, or in the
event of any material default on the part of Contributor, or Contributor's
failure to comply with any material representation, warranty, covenant or
agreement set forth herein, MCRLP shall be entitled to either (i) terminate this
Agreement upon notice to Contributor following which neither party shall
thereafter have any further obligations under this Agreement, except those which
expressly survive the termination hereof; or (ii) commence an action against
Contributor seeking either (A) monetary damages, or (B) specific performance of
Contributor's obligations under this Agreement.
23.3 The acceptance of the Deed by MCRLP shall be deemed a full
performance and discharge of every agreement and obligation of Contributor to be
performed under this Agreement, except those, if any, which are specifically
stated in this Agreement to survive the Closing.
24. INTENTIONALLY DELETED.
25. 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 Mack-Cali: c/o Mack-Cali Realty Corporation
or MCRLP 11 Commerce Drive
Cranford, New Jersey 07016
Attn: Roger W. Thomas, Esq.
(908) 272-8000 (tele.)
(908) 272-6755 (fax)
with a copy to: Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attn: Wayne B. Heicklen, Esq.
(212) 326-0425 (tele.)
(212) 326-0806 (fax)
If to Contributor: Pacifica Holding Company, LLC
5975 South Quebec Street, Suite 100
Englewood, Colorado 80111
Attn: Mr. Steven Leonard
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(303) 220-5565 (tele.)
(303) 220-5585 (fax)
with a copy to: Brownstein, Hyatt, et al.
410 17th Street, 22nd Floor
Denver, Colorado 80202
Attn: Edward Barad, Esq.
(303) 534-6335 (tele.)
(303) 623-1956 (fax)
or to such other address as either party may from time to time designate by
written notice to the other or to the Escrow Agent. Notices given by (i)
overnight delivery service as aforesaid shall be deemed received and effective
on the first business day following such dispatch, and (ii) telecopy or fax
machine shall be deemed given at the time and on the date of machine transmittal
provided the same is sent prior to 4:00 p.m. Eastern Time 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.
26. DEPRECIATION METHOD.
Mack-Cali, as the general partner of MCRLP, covenants and agrees
that MCRLP and its affiliates will use the "traditional method with curative
allocations" (as defined in Treasury Regulations Section 1.704-3(c)) of
allocating income, gain, loss and deduction to account for the variation between
the fair market value and adjusted basis of the Property for federal income tax
purposes with respect to (i) the contribution of the Property, and (ii) any
revaluation of the Property in accordance with the provisions of Treasury
Regulations Sections 1.704-1(b)(2)(iv)(f), 1.704- 1(b)(2)(iv)(g) and
1.704-3(a)(6).
27. MISCELLANEOUS.
27.1 Intentionally Deleted.
27.2 This Agreement constitutes the entire agreement between the
parties and incorporates and supersedes all prior negotiations and discussions
between the parties. This Agreement shall be binding upon and inure solely to
the benefit of each party hereto and their successors and assigns, and nothing
in the Agreement express or implied, is intended to confer upon any other person
any rights or remedies of any nature whatsoever under or by reason of this
Agreement.
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27.3 This Agreement cannot be amended, waived or terminated orally,
but only by an agreement in writing signed by the party to be charged.
27.4 This Agreement shall be interpreted and governed by the laws of
the State of Colorado, without regard to conflicts of laws principles, and shall
be binding upon the parties hereto and their respective successors and assigns.
27.5 The caption headings in this Agreement are for convenience only
and are not intended to be part of this Agreement and shall not be construed to
modify, explain or alter any of the terms, covenants or conditions herein
contained. The, feminine or masculine gender, when used herein, shall each
include the other gender and the use of the singular shall include the plural.
27.6 If any term, covenant or condition of this Agreement is held to
be invalid, illegal or unenforceable in any respect, this Agreement shall be
construed without such provision.
27.7 Each party shall, from time to time, execute, acknowledge and
deliver to the other party 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 Contributor and MCRLP or Mack-Cali. 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, MCRLP, Mack-Cali or the party whose counsel
drafted this Agreement.
27.8 This Agreement shall not be effective or binding until such
time as it has been executed and delivered by all parties hereto. This Agreement
may be executed by the parties hereto in counterparts, all of which together
shall constitute a single Agreement.
27.9 All references herein to any Section, Exhibit, or Schedule
shall be to the Sections of this Agreement and to the Exhibits and Schedules
annexed hereto unless the context clearly dictates otherwise. All of the
Exhibits and Schedules annexed hereto are, by this reference, incorporated
herein.
27.10 In the event that Contributor and MCRLP or Mack-Cali enter
into litigation or alternative dispute resolution in connection with this
Agreement or the transaction contemplated herein, the non-prevailing party in
such litigation or alternative dispute resolution shall be responsible for the
payment of all expenses and reasonable attorneys' fees incurred by the
prevailing party.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE.]
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CONTRIBUTION AND EXCHANGE AGREEMENT
THIS CONTRIBUTION AND EXCHANGE AGREEMENT (the "Agreement") made this
26th day of March, 1998, by and among the parties set forth on Exhibit A annexed
hereto and made a part hereof (jointly and severally, "Contributors", and each
individually, a "Contributor"), each having an address c/o Pacifica Holding
Company, 5975 South Quebec Street, Suite 100, Englewood, Colorado, MACK-CALI
REALTY, L.P., a Delaware limited partnership ("MCRLP") and MACK-CALI REALTY
CORPORATION, a Maryland corporation ("Mack-Cali"), each having an address at 11
Commerce Drive, Cranford, New Jersey 07016.
RECITALS
1. Contributors are, collectively, the owners of all the membership
and/or other ownership interests in and to Pacifica Development Properties II
Limited Liability Company, a Colorado limited liability company ("PDPII"). Each
Contributor owns the respective membership and/or ownership interest in PDPII
set forth on Exhibit B annexed hereto and made a part hereof.
2. PDPII owns various commercial properties located throughout the
Denver, Colorado metropolitan area. Mack-Cali, through MCRLP and certain
affiliated entities of MCRLP, similarly own various commercial properties
located throughout New Jersey, New York, Pennsylvania, Nebraska, Iowa,
California, Florida, Arizona, Connecticut and Texas.
3. In order to effectuate their contribution and exchange of assets
as herein provided, each Contributor hereby agrees to contribute all of its
membership and/or ownership interests in and to PDPII and certain other assets
to MCRLP and Mack-Cali, and MCRLP and Mack-Cali hereby agree to accept the
contribution of the Contributors' Interest and certain other assets on, and
subject to, the terms, covenants and conditions set forth herein.
4. Contributors, MCRLP and Mack-Cali have determined that the
transactions contemplated hereby are in the respective parties' best interests.
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 agree
as follows:
a. SUBJECT OF CONTRIBUTION.
i. Upon, and subject to the terms, covenants and conditions of
this Agreement, on the Closing Date (as hereinafter defined), each of the
Contributors shall contribute, convey or otherwise transfer to certain designees
of MCRLP 100% of said Contributor's
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right, title and interest (collectively, "Contributors' Interests, each
individually, a "Contributor's Interest") in and to PDPII.
ii. From and after the Closing, PDPII shall be the sole and
exclusive owner of the following:
(1) that certain real property situate, lying and being
in the State of Colorado and being more particularly described on Schedule 1(a)
(the "Land") and all of the improvements located on the Land (individually, a
"Building" and collectively, the "Improvements");
(2) all rights, privileges, grants and easements
appurtenant to PDPII's interest in the Land and Improvements, if any, including
without limitation, all of Contributor's and/or PDPII's rights, title 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
collectively referred to herein as the "Real Property");
(3) except as set forth on Schedule 1(c) all personal
property, artwork, fixtures, equipment, inventory and computer programming and
software owned by PDPII and located on any of the Real Property or used at any
of the management and corporate offices of PDPII or Contributor (the "Personal
Property");
(4) all leases and other agreements with respect to the
use and occupancy of the Real Property, together with all amendments and
modifications thereto (the "Leases") and any guaranties provided thereunder, and
rents, additional rents, reimbursements, profits, income, receipts and the
amount deposited (the "Security Deposit") under any Lease in the nature of
security for the performance of the Tenant's (as defined herein) obligations
thereunder;
(5) Intentionally Deleted.
(6) all assignable permits, licenses, guaranties,
approvals, certificates and warranties relating to the Real Property and the
Personal Property (collectively, the "Permits and Licenses"), all of PDPII's
right, title and interest in and to those contracts and agreements for the
servicing, maintenance and operation of the Real Property ("Service Contracts")
and telephone numbers in use at any of the Real Property or the management
offices and corporate headquarters of PDPII (together with the Permits and
Licenses and the Service Contracts, the "Intangible Property");
(7) all books, records, promotional material, tenant
data, leasing material and forms, past and current rent rolls, files,
statements, market studies, keys, plans,
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specifications, reports, tests and other materials of any kind owned by or in
the possession of PDPII which are or may be used in the use and operation of the
Real Property or Personal Property (collectively, the "Books and Records"); and
(8) all other rights, privileges and appurtenances owned
by PDPII, if any, and in any way related to the rights and interests described
above in this Section 1.
The Real Property, the Personal Property, the Leases, the
Intangible Property, the Books and Records and the other property interests are
hereinafter collectively referred to as the "Property".
b. CONSIDERATION.
i. Total Exchange Consideration. The aggregate consideration
for the Contributor's Interests (the "Exchange Consideration") is Eight Million
Seven Hundred Twelve Thousand Five Hundred Five and xx/100 ($8,712,505.00)
Dollars, to be paid by MCRLP in accordance with Section 2.2. The Exchange
Consideration shall be allocated as follows: (1) Land: $2,612,505 and (2)
Building and Improvements: $6,100,000.
ii. The Property. (a) At the Closing (as hereinafter defined),
and upon satisfaction of the terms and conditions herein (i) Contributors shall
contribute, convey or otherwise transfer to MCRLP or its Permitted Assignees (as
hereinafter defined), all of Contributors' Interests and (ii) MCRLP (and
Mack-Cali where applicable) shall, subject to adjustment as set forth herein,
pay to Contributors or their designees, in cash, the amount of Eight Million
Seven Hundred Twelve Thousand Five Hundred Five and xx/100 ($8,712,505.00)
Dollars (the "Cash Payment"), allocated as set forth in Schedule 2.2(a)(i); and
(iii) MCRLP (and Mack-Cali where applicable) shall issue the Contributor Units
(as hereinafter defined) in an amount set forth on Schedule 2.2(a)(ii) to such
persons as Contributor shall direct in writing (as set forth in Section
10.2(aa)) as soon as practicable following the date hereof (the "Unit Holders").
(2) Simultaneous with MCRLP accepting the Contributors'
Interests, MCRLP shall issue, subject to adjustments as set forth herein, common
units of limited partnership interests in MCRLP (the "Contributor Units"),
convertible into Mack-Cali common stock ("Common Stock"); provided, however,
that the Unit Holders shall be issued and shall hold the Contributor Units in
accordance with the provisions of Section 19.
(3) At the Closing, MCRLP shall issue to Contributors
and/or the Unit Holders or their designees certificates representing the
Contributor Units (the "Permanent Certificates"), which Permanent Certificates
shall contain the legend set forth on Exhibit 10.2(ee).
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(4) All rights and benefits incidental to the ownership
of the Contributor Units received in exchange for the Property, 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, shall accrue for
the benefit of the Unit Holders commencing on the Closing Date (as defined
herein).
(5) With respect to the first Partnership Record Date
(as defined in the OP Agreement (as defined below)) on or after the Closing, the
Unit Holders 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 Unit Holders held
Contributor Units.
iii. Intentionally Deleted.
iv. Intentionally Deleted.
c. INSPECTION PERIOD; MCRLP'S RIGHT OF TERMINATION AND REJECTION
PRIOR TO CLOSING.
i. Prior to the Closing (the "Inspection Period"), MCRLP, at
its sole cost and expense, may perform, or cause to be performed, tests,
investigations and studies of or related to the Property, the Contributors
and/or PDPII, 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 other tests, investigations or
studies as MCRLP, in its sole discretion, determines is necessary or desirable
in connection with the Property, the Contributors and/or PDPII and may inspect
the physical (including environmental) and financial condition of the Property,
the Contributors and/or PDPII, including but not limited to Leases, Service
Contracts, contracts pursuant to which third party management fees are payable,
copies of the Contributors' and PDPII's Tax Returns and the Property Financials
(as hereinafter defined) as of and for the years ending December 31, 1995, 1996
and 1997, engineering and environmental reports, development approval
agreements, permits and approvals, which inspection shall be satisfactory to
MCRLP in its sole discretion. Contributors agree to cooperate and shall cause
PDPII to cooperate with MCRLP in such review and inspection and, to the extent
not yet delivered, shall deliver said documents and information to MCRLP within
ten (10) days from the date hereof. MCRLP may terminate this Agreement for any
reason, by written notice given to Contributor, prior to the expiration of the
Inspection Period. In the event MCRLP terminates this Agreement during the
Inspection Period, this Agreement shall be null and void and the parties hereto
shall be relieved of all further obligations hereunder except as otherwise
provided herein. In the event MCRLP does not terminate this Agreement by the end
of the Inspection Period, then MCRLP shall be deemed to have elected not to
terminate this Agreement.
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ii. During the Inspection Period, MCRLP, its agents and
contractors shall have unlimited access to the Property the Contributors and/or
PDPII and other information pertaining thereto in the possession or within the
control of Contributors, during normal business hours, for the purpose of
performing such studies, tests, borings, investigations and inspections for the
purposes described in Section 3.1 above. Such right of inspection and the
exercise of such right shall not constitute a waiver by MCRLP of the breach of
any representation or warranty of PDPII or Contributors which might, or should,
have been disclosed by such inspection. Contributors shall cooperate and cause
PDPII to cooperate with MCRLP in facilitating its due diligence inquiry and
shall obtain, and use commercially reasonable efforts to obtain, any consents
that may be necessary in order for MCRLP to perform the same.
iii. To assist MCRLP in its due diligence investigation of the
Property and PDPII, Contributors shall deliver to MCRLP, by the execution and
delivery of this Agreement, true and correct copies of all existing Phase I
environmental studies (the "Phase I Reports") in the possession or control of
Contributors, PDPII, its counsel or consultants, with respect to the Real
Property, which Phase I Reports are set forth on Schedule 3.3 annexed hereto. In
the event that MCRLP determines that it requires any new Phase I Reports or
updates thereof, the cost of such reports or updates shall be borne by MCRLP. If
MCRLP reasonably requires that further environmental investigations be
undertaken beyond any new Phase I or updated Phase I Report, all engineering
costs and expenses relating to said further environmental investigations shall
be borne by Mack-Cali.
iv. Intentionally Deleted.
v. During the Inspection Period, Mack-Cali and MCRLP shall
provide to Contributors and their agents and advisors reasonable access to
Mack-Cali's and MCRLP's books and records, and Mack-Cali and MCRLP shall provide
Contributors such other reasonable information including, without limitation,
all Securities and Exchange Commission filings of MCRLP and Mack-Cali and
federal, state, and local income, excise, franchise, and all other tax filings,
in order to permit Contributors, at their sole cost and expense, to perform
reasonable due diligence on such parties. Nothing arising from PDPII's or
Contributors' inspection or due diligence as permitted by this Section shall
give rise to a right of Contributors to terminate this Agreement.
vi. Mack-Cali shall have the right, without the obligation, to
terminate this Agreement if (i) at any time prior to the Closing Date, Mack-Cali
determines in its sole discretion, that any of the Property is subject to
materially adverse environmental conditions, including, without limitation, any
environmental condition that has a material adverse affect on the property value
of any Real Property, on the current use of any Real Property, on groundwater
at, on, under, about or emanating from any Real Property or on the ability of
Mack-Cali or MCRLP to finance any Real Property; or (ii) Contributor is unable
to obtain the approval of any member of the Contributors to the terms of this
Agreement; or (iii) Mack-Cali determines that certain of the indebtedness
encumbering the Property or PDPII cannot be satisfied.
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d. TITLE; MATTERS TO WHICH THIS SALE IS SUBJECT.
i. As of the Closing Date, title to the Property shall be
subject only to the following (collectively, the "Permitted Encumbrances"):
(1) The liens of real estate taxes, personal property
taxes, water charges, and sewer charges provided the same are not yet due and
payable, but subject to adjustment as provided herein;
(2) the rights of those parties occupying space at any
of the Improvements (collectively, "Tenants") as tenants only;
(3) those restrictions, covenants, agreements,
easements, matters and things affecting title to the Real Property as of the
date hereof and more particularly described in Schedule 4.1(c) annexed hereto
and by this reference made a part hereof and such other easements, covenants and
restrictions which are entered into with the consent of MCRLP after the date
hereof, such consent not to be unreasonably withheld, delayed or conditioned;
(4) any and all laws, statutes, ordinances, codes,
rules, regulations, requirements, or executive mandates affecting the Real
Property including, without limitation, those related to zoning and land use, as
of the date hereof;
(5) the state of facts shown on the surveys described on
Schedule 4.1(e) for the property comprising the Real Property;
(6) the Service Contracts, excluding, however, any
Service Contract MCRLP advises Contributor to terminate prior to Closing (as
hereinafter defined);
(7) any utility company rights, easements and franchises
to maintain poles, lines, wires, cables, pipes, boxes and other fixtures and
facilities in, over, under or upon the Real Property, provided the same do not
impair, in other than a de minimis manner, the present use of the Real Property;
(8) such matters as the Title Company (as hereinafter
defined) shall be willing, without special premium, to omit as exceptions to
coverage; and
(9) Intentionally Deleted.
ii. Prior to the date hereof, Contributors shall have directed
Land Title Guarantee Company (the "Title Company"), as agent for Chicago Title
Insurance Company, to prepare a title insurance search and commitment for
owner's title insurance policy for the Real Property (the "Title Commitment").
MCRLP shall cause the Title Company to promptly deliver
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a copy of the same to Contributors and their counsel. If any defects, objections
or exceptions in the title to the Real Property appear in the Title Commitment
(other than the Permitted Encumbrances) which MCRLP is not required to accept
under the terms of this Agreement, Contributors may, at their election,
undertake to eliminate such unacceptable defects, objections or exceptions, it
being agreed that except as provided below, Contributors shall have no
obligation to incur any expense in connection with curing such defects,
objections or exceptions, other than (i) judgments against any Contributor or
PDPII; (ii) mortgages or other liens which can be satisfied by payment of a
liquidated amount; and (iii) defects, objections or exceptions which can be
removed by payments not to exceed $100,000.00 in the aggregate. Contributors, in
their 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, Contributors are 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, MCRLP shall
elect either (i) to terminate this Agreement by notice given to Contributors, in
which event the provisions of Section 23.2(a) shall apply, or (ii) to accept
title subject to such unacceptable defects, objections or exceptions and receive
no credit against or reduction of the consideration to be given hereunder for
the Property. Contributors and PDPII agree and covenant that they shall not
voluntarily place any encumbrances or restrictions on title to the Real Property
from and after the date of the first issuance of the Title Commitment for said
Property, except for the right to reserve easements for utilities and ingress
and egress encumbering the Real Property (post-closing) for the benefit of
adjacent properties owned by PDPII (or any affiliate thereof) upon the written
consent of MCRLP, which consent shall not be unreasonably withheld or delayed.
Mack-Cali and MCRLP covenant and agree that they shall consult with Contributors
prior to causing any other person or entity to request any inspection of the
Real Property by any governmental entity. Contributors recognize that
Mack-Cali's and MCRLP's due diligence necessitates said inspection. Mack-Cali
and MCRLP agree that they shall conduct any due diligence with such governmental
entity with a view toward maintaining the confidentiality of the transaction
contemplated by this Agreement.
iii. It shall be a condition to Closing that Contributors
contribute and convey, and that the Title Company insures, title to the Real
Property in the amount of the Exchange Consideration (at a standard rate for
such insurance) in the name of MCRLP or its designees, by a standard 1992 ALTA
Owner's Policy, with ALTA endorsements Form 3.1, Form 8.1, a comprehensive
owner's endorsement and non-imputation endorsement, to the extent that the
premium for such endorsements, with the exception of the non-imputation
endorsements, is paid by MCRLP, for the Real Property and any other endorsements
as reasonably required by MCRLP, 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 (i) the exception for
taxes shall apply only to the current taxes not yet due and payable; and (ii) to
the extent that the premium for such endorsements, with the exception of the
non-imputation endorsements, is paid by MCRLP, (a) any Permitted Encumbrances
have not been violated, and that any future violation thereof will not result in
a forfeiture or reversion of title; and (b) MCRLP's contemplated use of the Real
Property will not violate the Permitted Encumbrances. PDPII and Contributor
shall provide
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such affidavits, undertakings and indemnities as the Title Company insuring
title to the Real Property may require, including without limitation indemnities
relating to each non-imputation endorsement, and shall cure all other defects
and exceptions other than the Permitted Encumbrances and as required pursuant to
Section 4.2. The words "insurable title" and "insurable" as used in this
Agreement are hereby defined to mean title which is insurable at standard rates
(without special premium) by the Title Company without exception other than the
Permitted Encumbrances, and standard printed policy and survey exceptions.
iv. Contributors shall cause one or more surveyors acceptable
to MCRLP to deliver to MCRLP a survey or surveys of the Real Property acceptable
to MCRLP in all respects and in conformity with ALTA standards. MCRLP shall, at
MCRLP's sole cost and expense and with Contributors' cooperation and assistance,
cause the surveyor to update the survey no more than thirty (30) days prior to
the Closing Date and shall have the general survey exception removed from the
Title Policy and the survey affirmatively insured, to the extent that the
premium for such endorsement is paid by MCRLP, to MCRLP.
v. 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
Contributors or PDPII, 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 Contributors. PDPII or Contributors shall deliver to MCRLP, on
the Closing Date, instruments in recordable form sufficient to discharge any
such mortgages or other liens which any of the Contributors or PDPII is
obligated to pay and discharge pursuant to the terms of this Agreement.
vi. If the Title Commitment discloses judgments, bankruptcies
or other returns against other persons or entities having names the same as or
similar to that of PDPII or any of the Contributors, Contributors shall, upon
request, deliver to the Title Company affidavits showing that such judgments,
bankruptcies or other returns are not against PDPII or any of the Contributors,
or any of their affiliates. Upon request by MCRLP, Contributors shall deliver
any affidavits and documentary evidence as are reasonably required by the Title
Company to eliminate the standard exceptions on the ALTA Owner's Policy.
e. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTORS.
i. In order to induce MCRLP and Mack-Cali to perform as
required hereunder, Contributors hereby warrant and represent jointly and
severally to MCRLP and Mack-Cali, the following with respect to the Property and
Contributors' Interests:
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(1) PDPII is a duly organized and validly existing
entity, organized and in good standing under the laws of the state of its
formation, as more particularly set forth in Exhibit A hereto, is duly
authorized to transact business in the State of Colorado, has all requisite
power and authority to consent to the execution and delivery of 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 cause the contribution and conveyance of
Contributors' Interests in accordance with the terms and conditions hereof. All
necessary actions of PDPII and Contributors, and the members of each, 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.
(2) PDPII has the power and authority to own the
Property and to conduct and transact its limited liability company business.
(3) This Agreement, when duly executed and delivered,
will be the legal, valid and binding obligation of each Contributor, enforceable
in accordance with the terms of this Agreement. The performance by each
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 such Contributors or PDPII 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
such Contributors or PDPII is a party or by which its assets are or may be
bound.
(4) Annexed hereto as Schedule 5.1 (d) is a true,
complete and correct schedule of all of the Leases. The Leases are valid and
bona fide obligations of the landlord and Tenants thereunder and are in full
force and effect. To the best of Contributors' knowledge, no defaults exist
thereunder and no condition exists which, with the passage of time or the giving
of notice or both, will become a default; the Leases constitute all of the
leases, tenancies or occupancies affecting the Real Property on the date hereof;
all Tenants have commenced occupancy; there are no agreements (other than the
Leases) which confer upon any Tenant or any other person or entity any rights
with respect to the Property, nor is any Tenant entitled now or in the future to
any concession, rebate, offset, allowance or free rent for any period, nor has
any such claim been asserted by any Tenant.
(5) Annexed hereto as Schedule 5.1(e) (the "Rent Roll")
is a listing of the following, which is true, complete and correct in all
respects for the Building: (i) the name of each Tenant; (ii) the fixed rent
actually being collected; (iii) the expiration date or status of each Lease
(including all rights or options to renew); (iv) the Security Deposit, if any;
(v) whether there is any guaranty of a Tenant's obligations from a third party,
and if so the nature of said guaranty; (vi) any written notices given by any
Tenant of an intention to vacate space in the future;
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(vii) the base year(s) and base year amounts for all items of rent or additional
rent billed to each Tenant on that basis; and (viii) any arrearages of any
Tenant beyond thirty (30) days.
(6) To the knowledge of Contributors, PDPII has
performed all of the obligations and observed all of the covenants required of
it as landlord under the terms of the Leases. Except as set forth on Schedule
5.1(f) annexed hereto, all work, alterations, improvements or installations
required to be made for or on behalf of all Tenants under the Leases have in all
respects been carried out, performed and complied with, and there is no
agreement with any Tenant for the performance of any work to be done in the
future, and no continuing obligations or liabilities by PDPII, as landlord under
the Leases. To the knowledge of PDPII and Contributors, except as set forth on
Schedule 5.1(f), no work has been performed at any Building which would require
an amendment to the certificate of occupancy for such Building for which an
amendment has not been obtained, and any and all work performed at the Real
Property to the date hereof and to the Closing Date has been and will be in
accordance with the rules, laws and regulations of all applicable authorities.
All bills and claims for labor performed and materials furnished to or for the
benefit of the Property arising prior to the Closing Date will be paid in full
by PDPII within customary time periods, not to exceed forty-five (45) days from
the receipt of an invoice by PDPII.
(7) There are no service contracts, union contracts,
employment agreements or other agreements affecting the Property or the
operation thereof, except the Service Contracts and other contracts and
agreements set forth on Schedule 5.1(g) annexed hereto. All of the Service
Contracts are and will on the Closing Date be unmodified and in full force and
effect without any material default or claim of material default by any of the
parties thereto. All sums presently due and payable by PDPII under the Service
Contracts have been fully paid and all sums which become due and payable between
the date hereof and the Closing Date shall be fully paid by PDPII within
customary time periods, not to exceed forty-five (45) days from the receipt of
an invoice by PDPII. All of the Service Contracts may be terminated on not more
than sixty (60) days notice without the payment of any fee or penalty, and the
representation contained in this sentence is not subject to being modified by
the limitations of Section 5.5. There are no employees of PDPII, or any
affiliate thereof, working at or in connection with the Real Property pursuant
to any of the Service Contracts, other contracts and/or employment agreements
except as set forth on Schedule 5.1(g).
(8) Except as set forth on Schedule 5.1(h) annexed
hereto, there are no actions, suits, labor disputes, litigation or proceedings
currently pending or, to the knowledge of PDPII or Contributors, threatened
against or related to PDPII or any of the any of the Contributors or all or any
part of the Property or PDPII, the environmental condition thereof, or the
operation thereof.
(9) Except as set forth on Schedule 5.1(i) annexed
hereto, neither PDPII nor any of the Contributors has received written notice of
and neither has any knowledge of (i) any pending or contemplated annexation or
condemnation proceedings, or private
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purchase in lieu thereof, affecting or which may affect the Real Property or any
part thereof, (ii) any proposed or pending proceeding to change or redefine the
zoning classification of all or any part of the Real Property, (iii) any
proposed or pending special assessments affecting the Real Property or any
portion thereof, (iv) any penalties or interest due with respect to real estate
taxes assessed against the Real Property, or (v) any proposed changes in any
road or grades with respect to the roads providing a means of ingress and egress
to the Real Property. Contributors agree to furnish MCRLP with a copy of any
such notice received within two (2) business days after receipt.
(10) Contributors have provided MCRLP with all reports
in the possession of PDPII, Contributors, its counsel or consultants, or under
their control, related to the physical condition of the Real Property.
(11) Except as set forth on Schedule 5.1(k) annexed
hereto, Contributors have no knowledge of any notices, suits, or judgments
relating to any violations (including environmental) of any laws, ordinances or
regulations affecting the Real Property, or any violations or conditions that
may give rise thereto, and have no reason to believe that any agency, board,
bureau, commission, department or body of any municipal, county, state or
federal governmental unit, or any subdivision thereof, having, asserting or
acquiring jurisdiction over all or any part of the Real Property or the
management, operation, use or improvement thereof (collectively, the
"Governmental Authorities" or "Governmental Authority" as the context requires)
contemplates the issuance thereof, and there are no outstanding orders,
judgments, injunctions, decrees or writ of any Governmental Authorities against
or involving PDPII, any of the Contributors or the Real Property. For purposes
of this Agreement, the term "Governmental Authority" shall also include the
Internal Revenue Service and any other federal, state, local or foreign taxing
authority.
(12) There are no employees of PDPII or the Contributors
or any affiliates thereof working at or in connection with the Real Property
except as set forth on Schedule 5.1(l).
(13) Annexed hereto as Schedule 5.1(m) is a schedule of
all leasing commission obligations affecting the Property. The respective
obligations of PDPII, Contributors and MCRLP with respect to said commissions
are set forth in Section 13.
(14) Neither PDPII nor any of the Contributors 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 PDPII's or
Contributor's creditors, suffered the appointment of a receiver to take
possession of all, or substantially all, of PDPII's or Contributor's assets,
suffered the attachment or other judicial seizure of all, or substantially all,
of PDPII's or 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.
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(15) Except as set forth on Schedule 5.1(o), the
Personal Property is now owned and will on each of the Closing Date be owned by
PDPII or the Contributors free and clear of any conditional bills of sale,
chattel mortgages, security agreements or financing statements or other security
interests of any kind.
(16) Intentionally Deleted.
(17) Intentionally Deleted.
(18) Intentionally Deleted.
(19) Contributors have no knowledge that any part of the
Real Property has been designated as wetlands or any other word of similar
purport or meaning under the Federal Water Pollution Control Act, 33 U.S.C.
ss.1251 et seq.; the Colorado Water Quality Control Act, Colo. Rev. Stat.
Section 25-8-101 et seq; or any other applicable federal, state, county or
municipal statute, ordinance, rule, regulation, order or code.
(20) To the best of Contributors' knowledge, there are
no active or inactive aboveground or underground storage tanks or vessels or
associated piping at the Real Property, regardless of whether or not such tanks
or vessels are regulated tanks or vessels, except as set forth on Schedule
5.1(t).
(21) Contributors have no knowledge of outstanding
requirements or recommendations by (i) any insurance company currently insuring
the Property; (ii) any board of fire underwriters or other body exercising
similar functions; or (iii) the holder of any mortgage encumbering any of the
Property, which require or recommend any repairs or work of a material nature to
be done on the Property.
(22) The financial statements, including the income and
expense statements and the balance sheets of PDPII, the Contributors and their
affiliates, excluding only those assets, liabilities and operations not
contemplated to be contributed pursuant to this Agreement, relating to PDPII's
ownership and operation of the Property and the related statement of income,
member's capital and cash flows, including the footnotes thereto (the "Property
Financials") as of and for the years ending December 31, 1995, 1996 and 1997,
fairly present the combined financial position of PDPII and Contributors
relating to the Property as of such dates and the results of operations and cash
flows of PDPII and the Contributors relating to the ownership and operation of
the Property for such respective periods. The Property Financials from January
1, 1998, through the most recent month ending prior to the Closing Date, fairly
present the combined financial position of the Property relating to the
ownership and operation of the Property as of such date (subject to the normal
year-end adjustments described in Schedule 5.1(v)) and with all interim
financial statements of the Property heretofore delivered to MCRLP on behalf of
PDPII and the Contributors. Except as set forth on the Property Financials,
there are no other direct or indirect
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indebtedness, liability, claim or loss that accrued prior to Closing, whether
known or unknown, fixed or unfixed, choate or inchoate, liquidated or
unliquidated, secured or unsecured, accrued, absolute, contingent or otherwise,
whether or not of a kind required by GAAP to be set forth on the Property
Financials or the notes thereto, including, without limitation, indebtedness for
borrowed money (collectively, "Liabilities").
(23) Except as set forth in Schedule 5.1(w), PDPII does
not maintain any 401(k) savings plans, pension plans, multi-employer plans (as
defined in Section 3(37) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), employee benefit plans (as defined in ERISA) or employee
welfare plans providing for benefits to PDPII employees (each, an "Employer
Plan"). From and after the date hereof, the Contributors shall not cause or
permit PDPII to adopt an Employer Plan. Mack-Cali shall have no liability to any
current or former employees of Contributor or any affiliate thereof, including,
without limitation, any liabilities which may arise as a result of the
consummation of the transactions contemplated by this Agreement, under any plans
or programs listed on Schedule 5.1(w), or arising under applicable Federal or
state law, including, without limitation, under the Worker Adjustment and
Retraining Nonfiction Act (WARN) and Consolidated Omnibus Budget Reconciliation
Act of 1985 (COBRA).
(24) Intentionally Deleted.
(25) Except as disclosed in the Phase I Reports or
otherwise set forth in Schedule 5.1(y):
(a) To the best of Contributors' knowledge, no
Governmental Authority has demanded in writing, addressed to PDPII, Contributors
or any of its affiliates, counsel or agents, that any Contaminants (as defined
herein) be cleaned up or environmentally remediated at any Real Property, which
has not been cleaned up or environmentally remediated.
(b) To the best of Contributors' knowledge, no
Contaminants have been Discharged (as hereinafter defined) which would allow a
Governmental Authority to demand that a cleanup be undertaken.
(c) To the best of Contributors' knowledge, no
ss.104(e) informational request, issued pursuant to CERCLA (as hereinafter
defined) with respect to the Real Property has been received by Contributors or
PDPII.
(d) To the best of Contributors' 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.
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(e) To the best of Contributors' knowledge, there
is no asbestos or asbestos containing material requiring remediation under
Environmental Laws (as hereinafter defined) on the Real Property, except as set
forth on Schedule 5.1(y).
(f) To the best of Contributor's knowledge, all
transformers and capacitors containing polychlorinated biphenyls ("PCBs") , and
all "PCB Items", as defined in 40 CFR, ss.761.3, located on or affecting the
Real Property, are identified in Schedule 5.1(y) and are in compliance with all
Environmental Laws.
(g) To the best of Contributors' knowledge, PDPII
and the Contributors have all material certificates, licenses and permits (the
"Permits"), including without limitation, environmental Permits, required to
operate the Real Property. To the best of Contributors' 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, as the case
may be, without additional payment by MCRLP, and shall, upon Closing, be
transferred to MCRLP by Contributors and PDPII.
(h) To the best of Contributors' knowledge, the
Real Property has not been used during the period of PDPII's ownership as solid
wastes disposal sites and facilities as defined in the Colorado Solid Wastes
Disposal Sites and Facilities Law, Colo. Rev. Stat. Section 30-20-100.5 et seq.
and the regulations promulgated thereunder.
(i) To the best of Contributors' knowledge, there
are no engineering or institutional controls 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 Colo. Rev. Stat. Section 25-15-208 et seq. and
the regulations promulgated thereunder.
(j) Neither PDPII nor any of the Contributors have
transported any Contaminants from the Real Property to another location in
violation of Environmental Laws.
(k) To the best of Contributors' knowledge, there
are no federal or state liens, as referenced under CERCLA and the regulations
promulgated thereunder, or under any other applicable Environmental Law that
have attached to the Real Property.
(l) Contributors and PDPII have provided MCRLP
with all environmental site assessments, investigations, and documents and all
other Environmental Documents (as that term is defined below) in their
possession or under their control and shall continue to do so after execution of
this Agreement promptly upon its receipt.
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(m) For purposes of this Agreement, the following
words shall have the respective meaning set forth below:
(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 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.
(ii) "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.
(iii) "Environmental Documents" shall mean
all environmental documentation in the possession or under the control of PDPII
or the Contributors 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.
(iv) "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.
(26) PDPII and each Contributor shall have timely paid
all Taxes (as defined herein) due and payable on or prior to the Closing Date.
PDPII and each Contributor shall have timely filed all Tax Returns (as defined
herein) required to be filed on or prior to the Closing Date. Each such Tax
Return is complete and accurate in all respects. PDPII and each Contributor
shall have timely paid or will timely pay, or shall have provided for or will
provide for a cash reserve for the payment of, all Taxes due and payable on or
after the Closing Date for all taxable periods (or portions thereof) ending on
or prior to the Closing Date (a "Pre-Closing Tax Period" or "Pre-Closing Tax
Periods"). PDPII and each Contributor shall timely file all Tax Returns which
relate to all Pre-Closing Tax Periods but which are required to be filed after
the
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Closing Date. Each such Tax Return will be complete and accurate in all
respects. True and complete copies of all Tax Returns filed by PDPII and each
Contributor for taxable periods beginning on or after January 1, 1994, and all
written communications relating thereto, have been, or will be upon request,
delivered to Mack-Cali. PDPII has also provided, or will also provide upon
request, to Mack-Cali copies of: (i) any letter ruling, determination letter or
similar document issued to PDPII by any Governmental Authority, and (ii) any
closing or other agreement entered into by PDPII with any Government Authority.
Except as set forth on Schedule 5.1(z), there are no ongoing Audits or Audits
pending or, to the knowledge of PDPII or any Contributors against the Property,
any Contributors or PDPII. There are no agreements or waivers extending the
statutory period of limitations with respect to any such Tax Returns or for the
assessment or collection of any such Taxes. No claim has ever been made by a
Governmental Authority in a jurisdiction where PDPII or any Contributor does not
file Tax Returns that it is or may be subject to taxation by that jurisdiction.
(27) Annexed hereto as Schedule 5.1(aa) is a listing,
for federal income tax purposes, of the following information, which is true,
complete and correct in all aspects for each item of Property contributed
through each Contributor's Interest: (i) its adjusted basis as of the first day
of PDPII's taxable year which includes the Closing Date; (ii) the date placed in
service; (iii) the depreciation method; and (iv) the remaining useful life.
(28) Subject to the provisions of Section 5.5, no
representation or warranty made by PDPII or any Contributor contained in this
Agreement contains any untrue statement of a material fact or omits to state any
material fact necessary, in light of the circumstances under which it was made,
in order to make the statements herein 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.
(29) As used throughout this Agreement, the phrases "to
Contributor's knowledge," "to the knowledge of Contributor," "to the best of
Contributor's knowledge" "to PDPII's knowledge," "to the knowledge of PDPII,"
"to the best of PDPII's knowledge" or any similar derivation thereof, shall mean
the actual (not constructive) knowledge of Terrence Claassen, David Goldberg,
Chetter Latcham, Steve Leonard, Rich Majors, Adel Nassif, Chuck Peck and Della
Wegman, without having undertaken any independent investigation of facts or
legal issues without having any duty to do so, and without imputing to the
aforementioned persons the knowledge of any employee, agent, representative or
affiliate of Contributors or of any other person or entity.
(30) Annexed hereto as Schedule 5.1(dd)(i) is a true,
complete and correct copy of PDPII's operating agreement, as amended to date,
and same shall be unchanged and in effect on the Closing Date. Annexed hereto as
Schedule 5.1(dd)(ii) is a filed copy of the articles of organization of PDPII.
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(31) Contributors have good and marketable title to one-
hundred (100%) percent of PDPII and 100% of Contributors' Interests, free of all
liens and encumbrances whatsoever.
(32) Contributors have the power and authority to own
their respective Contributors' Interests and to conduct and transact their own
business and the business of PDPII.
(33) The contribution of Contributors' Interests
pursuant to this Agreement is authorized and within the power of each
Contributor and is legal and will not conflict with, result in any breach of any
of the provisions of, or constitute a default under the provisions of PDPII's
operating agreement or other instrument to which any Contributor is a party or
by which any Contributor may be bound.
(34) Neither MCRLP, nor Mack-Cali shall be responsible,
as a consequence of the contribution intended hereby, for any obligation
(including any Taxes) of PDPII or Contributor or for any liability, debt or
obligation (including any Taxes) of PDPII or Contributor to any third party
including, without limitation, any employees of PDPII or Contributor or any
Employer Plan accruing during the period prior to Closing (and Contributor
hereby agrees to indemnify, defend and hold MCRLP and Mack-Cali harmless from
and against any such liability, debt or obligation, including any Taxes and
reasonable attorney's fees), except for any obligations or liabilities of PDPII
or Contributor subject to which MCRLP or Mack-Cali has expressly agreed to
accept the assignment of Contributor's Interests and accruing during the period
following Closing. The representations and the indemnity set forth herein shall
be deemed to be material to MCRLP and Mack-Cali's obligation to perform
hereunder and shall survive the Closing.
(35) After the Closing, Contributors shall not be
entitled to receive from PDPII any distribution or payment of indebtedness or
for any other reason whatsoever, except for cash and receivables with respect to
rent under the Leases for the period occurring prior to Closing to the extent
Contributor is entitled to same under Article 11, as of the date of Closing,
which shall be paid to Contributors.
ii. Intentionally Deleted.
iii. All representations and warranties made in this Agreement
by PDPII and the Contributors and those representations and warranties made by
the Contributors and the Contributor Unit Holders in the certificate executed by
each and delivered pursuant to Exhibit 10.2(ee) shall survive the Closing Date
for a period of one (1) year, except that the representations and warranties set
forth in clauses (a), (c), (w), (z) and (dd) through (hh) of Section 5.1 shall
survive such Closing Date for the applicable period of the statute of
limitations (unless otherwise specified herein), and shall not be merged in the
Interest Assignments. Notwithstanding the foregoing, to the extent that a Tenant
shall certify in its Estoppel Certificate (as defined below) as to any of the
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matters which are contained in the representations and warranties made by PDPII
and/or Contributors in Section 5.1(f) of this Agreement, then such
representations and warranties as to such matters shall be of no further force
or effect to the extent of any conflict. Apollo Real Estate Investment Fund II,
L.P., a Delaware limited partnership; Pacifica Holding Company, a Colorado
corporation; and Pacifica Holding Company, a Colorado limited liability company
(collectively, "Guarantor"), and Contributors, jointly and severally, shall,
pursuant to a separate indemnity agreement (the "Indemnity Agreement") in the
form attached hereto as Exhibit 5.3, indemnify and defend MCRLP and Mack-Cali,
and to hold MCRLP and Mack-Cali 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 MCRLP by reason of or resulting from any
breach, inaccuracy, incompleteness or non-fulfillment of the representations,
warranties, covenants and agreements of PDPII and Contributors contained in this
Agreement to the full extent PDPII or the Contributors would be liable therefor
under the terms of this Agreement. The foregoing indemnity shall be deemed to be
material to MCRLP and Mack-Cali's obligation to perform hereunder and shall
survive the Closing. Notwithstanding the foregoing, Steven C. Leonard IRA,
Cynthia O. Leonard IRA, Steven Ohren IRA and the members of Contributors shall
have no liability for any loss resulting from any breach of the foregoing
representations and warranties. In addition, except as set forth in Section 28,
MCRLP and Mack-Cali shall not have a right to bring a claim against Contributors
by virtue of any of the representations or warranties being false or misleading
unless and until the aggregate damages to MCRLP and/or Mack-Cali are reasonably
expected to exceed $100,000.00, but thereafter MCRLP and/or Mack-Cali may bring
a claim against Contributors for the entire amount of its aggregate damages.
iv. Each Contributor acknowledges that it is not in a
significantly disparate bargaining position with respect to MCRLP or Mack-Cali
in connection with the transaction contemplated by this Agreement and that such
Contributor was represented by legal counsel in connection with this
transaction.
v. Mack-Cali and MCRLP each acknowledges that it has had, or
will have had, as of the Closing, sufficient time to review all materials and
information set forth in Schedule 5.5, and sufficient time and access to review
and investigate the Property. Notwithstanding any other provision of this
Agreement, except as set forth in Subsections 5.1(d), (e) and (f) as they relate
to the Leases, the Estoppels and the Rent Rolls, the representations and
warranties of PDPII and Contributors as set forth herein or in each
Contributor's Closing Certificate are hereby modified to be made true to the
extent that, as of the date hereof with respect to the representations and
warranties made herein, and as of the Closing Date with respect to the
representations and warranties made by PDPII and each Contributor as of the
Closing Date, (i) information contained in the records made available as set
forth Schedule 5.5 no longer makes the subject representation or warranty not
true, whether or not either Mack-Cali or MCRLP has actual knowledge of such
information, or (ii) either Mack-Cali or MCRLP has knowledge that the subject
representation or warranty is untrue, or (iii) Contributors have delivered or
made available to any
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of the individuals described in Section 6.1(l) other written information
disclosing that the subject representation or warranty is not true, whether or
not either Mack-Cali or MCRLP has actual knowledge of such information.
f. REPRESENTATIONS AND WARRANTIES OF MACK-CALI AND MCRLP.
i. In order to induce Contributors to perform as required
hereunder, Mack-Cali and MCRLP hereby jointly and severally warrant and
represent the following:
(1) (i) MCRLP 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 MCRLP
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) Mack-Cali is a duly organized and validly existing
corporation organized and in good standing under the laws of the State of
Maryland, has all requisite power and authority to execute and deliver this
Agreement and all other documents and instruments to be executed and delivered
by it hereunder, and to perform its obligations hereunder and under such other
documents and instruments in order to permit MCRLP to acquire the Property in
accordance with the terms and conditions hereof. All necessary actions of the
board of directors of Mack-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.
(2) This Agreement and the agreements and other
documents to be executed and delivered by each of Mack-Cali and MCRLP hereunder,
when duly executed and delivered, will be the legal, valid and binding
obligation of each of Mack-Cali and MCRLP, enforceable in accordance with the
terms of this Agreement. The performance by each of Mack-Cali and MCRLP 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 Mack-Cali and MCRLP 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 Mack-Cali and MCRLP is a party or by which each of its assets
are or may be bound.
(3) The Contributor Units to be issued to Contributors
and/or the Unit Holders are duly authorized and, when issued by MCRLP, will be
fully paid and non-assessable, free and clear of any mortgage, pledge, lien,
encumbrance, security interest, claim
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or rights of interest of any third party of any nature whatsoever. The shares of
Common Stock to be issued by Mack-Cali upon redemption of the Contributor Units
will be reserved for future listing with the New York Stock Exchange prior to
the date upon which any of the same will be 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.
(4) MCRLP has furnished to Contributors a true and
complete copy of the OP Agreement, as amended to date.
(5) Mack-Cali has caused to be delivered to Contributors
copies of the OP Agreement. The SEC Documents were, and those additional
documents filed between the date hereof and the Closing will be, prepared and
filed in compliance with the rules and regulations promulgated by the SEC, and
do not and will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein in order to make the
statements contained therein, in light of the circumstances under which they
were made or will be made, not misleading.
(6) The consolidated financial statements included in
the SEC Documents have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the period involved
(except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Form 10-Q) and present fairly (subject, in
the case of the unaudited statements, to normal, recurring year-end audit
adjustments) the consolidated financial position of Mack-Cali and its
Subsidiaries at the dates thereof and the consolidated results of operations and
cash flows for the periods then ended. For purposes of this Agreement,
"Subsidiaries" shall mean (i) any entity of which Mack-Cali (or other specified
entity) shall own directly or indirectly through a subsidiary, a nominee
arrangement or otherwise (x) at least a majority of the outstanding capital
stock (or other shares of beneficial interest), or (y) at least a majority of
the partnership, joint venture or similar interests; and (ii) any entity in
which Mack-Cali (or other specified entity) is a general partner or joint
partner, including without limitation MCRLP. "Subsidiaries" shall specifically
exclude Mack-Cali Services, Inc. and The Grove Street Urban Renewal Corp., which
are the only non-qualified REIT subsidiaries of Mack-Cali as of the date hereof.
(7) No action, suit, claim, investigation or proceeding,
whether legal or administrative or in mediation or arbitration, is pending or,
to the best of each of Mack-Cali's and MCRLP's knowledge, threatened, at law or
in equity, against either of Mack-Cali or MCRLP before or by any court or
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality which would prevent either of Mack-Cali or
MCRLP from performing its respective obligations pursuant to this Agreement.
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(8) The execution and delivery of this Agreement and the
performance by each of Mack-Cali and MCRLP 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 Mack-Cali or MCRLP, including
without limitation, the United States of America, the States of New York and New
Jersey or any political subdivision of any of the foregoing, or any decision or
ruling of any arbitrator to which Mack-Cali or MCRLP is a party or by which
Mack-Cali or MCRLP is bound or affected.
(9) (1) Mack-Cali (A) 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 ("REIT") within the meaning of Section 856 of the Internal
Revenue Code of 1986, as amended (the "Code"), (B) has complied with all
applicable provisions of the Code which would have enabled it to qualify as a
REIT for 1995 and 1996, (C) has operated, and intends to continue to operate, in
such a manner so as to enable it to qualify as a REIT for 1998 and subsequent
years, and (D) has not taken or omitted to take any action which would
reasonably be expected to cause its disqualification as a REIT, and no challenge
to its REIT status is pending or, to Mack-Cali's knowledge, threatened.
(2) Mack-Cali has timely filed with the
appropriate Governmental Authority all Tax Returns required to be filed by it or
has timely requested extensions and any such request has been granted and has
not expired. Each such Tax Return is true and correct in all material respects.
All Taxes shown as owed by Mack-Cali or any of its Subsidiaries on any Tax
Return have been paid or accrued, except for Taxes being contested in good faith
and for which adequate reserves have been established. None of Mack-Cali or any
of its Subsidiaries has executed or filed with the Internal Revenue Service or
any other taxing authority any agreement now in effect extending the period for
assessment or collection of any Tax.
(3) To its knowledge, as of the date hereof, Mack-
Cali is a "domestically-controlled" REIT within the meaning of Section
897(h)(4)(B) of the Code.
(10) All of Mack-Cali's real property and other material
assets are owned by Mack-Cali indirectly through its ownership of MCRLP and
MCRLP's Subsidiaries.
(11) Neither Mack-Cali nor MCRLP 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
Mack-Cali's or MCRLP's creditors, suffered the appointment of a receiver to take
possession of all, or substantially all, of Mack-Cali's or MCRLP's assets,
suffered the attachment or other judicial seizure of all, or substantially all,
of Mack-Cali's or MCRLP'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.
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(12) As used throughout this Agreement, the phrases "to
Mack-Cali's knowledge," "to the knowledge of Mack-Cali," "to the best of
Mack-Cali's knowledge" "to MCRLP's knowledge," "to the knowledge of MCRLP," "to
the best of MCRLP's knowledge" or any similar derivation thereof, shall mean the
actual (not constructive) knowledge Tim Jones, John DeBari, Daniel Wagner,
Andrew Greenspan, Roger W. Thomas, and Terry Noyes, without having undertaken
any independent investigation of facts or legal issues without having any duty
to do so, and without imputing to the aforementioned persons the knowledge of
any employee, agent, representative or affiliate of Mack-Cali, MCRLP or of any
other person or entity.
ii. Each of Mack-Cali and MCRLP 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
Mack-Cali and MCRLP were represented by legal counsel in connection with this
transaction.
iii. All representations and warranties made by Mack-Cali and
MCRLP in this Agreement shall survive the Closing Date for a period of eighteen
(18) months, except that the representations and warranties set forth in clauses
(a) and (b) of Section 6.1 shall survive the Closing Date for the applicable
period of the statute of limitations (unless otherwise specified herein), and
shall not be merged in the Assignment of Contributor's Interest. Mack-Cali and
MCRLP agree to indemnify and defend Contributors, and to hold Contributors
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
Contributors by reason of or resulting from any breach, inaccuracy,
incompleteness or non-fulfillment of the representations, warranties, covenants
and agreements of Mack-Cali and MCRLP contained in this Agreement.
Notwithstanding the foregoing, the partners and/or shareholders of MCRLP and
Mack-Cali shall have no liability for any loss resulting from any breach of the
foregoing representations and warranties. In addition, Contributors shall not
have a right to bring a claim against Mack-Cali or MCRLP by virtue of any of the
representations or warranties being false or misleading unless and until (a)
such false or misleading representation or warranty has a material adverse
affect on the transactions contemplated herein; and (b) the aggregate damages to
Contributors is reasonably expected to exceed $100,000.00, but thereafter
Contributors may bring a claim against Mack-Cali or MCRLP for the entire amount
of their aggregate damages.
g. INTERIM OPERATING COVENANTS OF CONTRIBUTORS.
i. Contributors covenant and agree that between the date
hereof and the Closing Date (the "Interim Period"), they shall perform or
observe or cause PDPII to perform or observe the following with respect to the
Real Property:
(1) PDPII will complete any capital expenditure program
currently in process or anticipated to be completed. PDPII and Contributors will
not defer taking
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any actions or spending any of its funds, or otherwise manage the Real Property
differently, due to the transaction contemplated by this Agreement.
(2) PDPII, as landlord, will not enter into any new
leases with respect to the Property, or renew or modify any Lease, without
MCRLP's prior written consent; provided, however that PDPII shall be permitted
to enter into new leases, renewals or modifications upon prior notice to, but
without the prior written consent of MCRLP, so long as such lease, renewal or
modification is on market terms and conditions with bona fide third parties and
is the type of transaction which PDPII currently enters into in the ordinary
course of its business.
(3) PDPII shall comply with and/or remedy all violations
of statutes, ordinances, rules, regulations, orders, codes, directives or
requirements affecting the Real Property, whether or not such violations are now
noted in the records of or have been issued by any Governmental Authorities
prior to the Closing, and the Real Property shall be conveyed free of any such
violations, including, without limitation, violations of Environmental Laws.
(4) Neither PDPII nor any Contributors shall:
(a) Enter into any agreement requiring PDPII to do
work for any Tenant after the Closing Date without first obtaining the prior
written consent of MCRLP, unless such agreement is on market terms and
conditions with bona fide third parties and is the type of agreement which PDPII
currently enters into in the ordinary course of its business, in which case no
consent of MCRLP will be required; or
(b) Accept the surrender of any Service Contract
or Lease, or grant any concession, rebate, allowance or free rent, except in its
ordinary course of business on market terms, with bona fide third parties and
upon prior written notice to MCRLP.
(c) Intentionally Deleted.
(5) PDPII shall not, between the date hereof and the
Closing Date, apply any Security Deposits with respect to any Tenant in
occupancy on the Closing Date, except in its ordinary course of business. PDPII
and Contributors shall provide MCRLP with an updated schedule of Security
Deposits at the Closing.
(6) Between the date hereof and the Closing Date, PDPII
will not renew, extend or modify any of the Service Contracts without the prior
written consent of MCRLP unless such is done by PDPII in the ordinary course of
its business and such Service Contracts contain a right to terminate on thirty
(30) days' notice with no material cost to exercise such right, in which case no
consent of MCRLP will be required.
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(7) PDPII and Contributors shall not remove or permit
the removal of any Personal Property located in or on the Property, except as
may be required for repair and replacement. All replacements shall be free and
clear of liens and encumbrances except to the extent the original Personal
Property was so encumbered and shall be of quality at least equal to the
replaced items and shall be deemed included in this sale, without cost or
expense to MCRLP, other than expressly provided herein.
(8) PDPII and Contributors shall, upon request of MCRLP
at any time after the date hereof, assist MCRLP in its preparation of audited
financial statements, statements of income and expense, and such other
documentation as MCRLP may reasonably request, covering the period of PDPII's
ownership of the Real Property.
(9) Between the date hereof and the Closing Date, PDPII
will make all required payments under any mortgage affecting the Real Property
within any applicable grace period, but without reimbursement by MCRLP therefor.
PDPII shall also comply with all other material terms covenants and conditions
of any mortgage on the Real Property.
(10) PDPII shall not cause or permit the Real Property
or any interest therein (including without limitation the Improvements or the
Contributors' Interests), to be alienated, mortgaged, licensed, encumbered or
otherwise be transferred.
(11) PDPII agrees to maintain and keep in full force and
effect the hazard, liability and casualty insurance policies it is currently
maintaining, which policies Contributors represent are sufficient 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.
(12) PDPII and Contributors shall permit MCRLP and its
authorized representatives to inspect the Books and Records of their operations
at all reasonable times upon reasonable notice. All Books and Records not
conveyed to MCRLP hereunder shall be maintained for MCRLP's inspection at each
Contributor's address as set forth in Exhibit A hereto.
(13) PDPII and Contributors shall:
(a) promptly notify MCRLP of, and promptly deliver
to MCRLP, a certified true and complete copy of any notice PDPII or Contributors
may receive, on or before the Closing Date from any Governmental Authority
concerning a violation of Environmental Laws or Discharge of Contaminants;
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(b) contemporaneously with the signing and
delivery of this Agreement, and subsequently promptly upon receipt by PDPII or
its representatives, deliver to MCRLP a certified true and complete copy of all
Environmental Documents; and
(c) timely provide MCRLP 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 MCRLP
informed of all substantive negotiations and discussions with respect to the
foregoing matters on an on-going basis.
ii. Prior to the Closing, Contributors shall deliver to
MCRLP reviewed Property Financials as set forth in Section 5.1(v). Within thirty
(30) days after the Closing Date, Contributors shall deliver to MCRLP Property
Financials, as set forth in Section 5.1(v), through the Closing Date. The
provisions of this Section 7.2 shall survive the Closing Date.
iii. Intentionally Deleted.
iv. Intentionally Deleted.
v. PDPII and Contributors will timely pay all Taxes due
and payable by each of them during the Interim Period. PDPII and Contributors
will timely file all Tax Returns required to be filed by them during the Interim
Period. Each such Tax Return will be complete and accurate in all respects and
will be filed on a basis consistent with past practice. A copy of all such Tax
Returns shall be delivered to Mack-Cali at least three (3) days prior to such
Tax Returns being filed. The obligations set forth in this Section 7.5 shall
survive the expiration or earlier termination of this Agreement and/or shall
survive the Closing Date for the applicable period of the statute of
limitations.
h. INTENTIONALLY DELETED.
i. ESTOPPEL CERTIFICATES.
i. Contributors agree to deliver to each Tenant, no later than
the date hereof, an estoppel certificate in the form annexed hereto as Exhibit
9.1 for Tenant's execution, completed to reflect Tenant's particular Lease
status. Contributors agree to use commercially reasonable efforts to obtain from
all Tenants the estoppel certificates in such form; provided, however, that if
any Tenant shall refuse to execute an estoppel letter in such form, Contributors
shall nevertheless use commercially reasonable efforts to obtain estoppel
certificates in the form in which each Tenant is obligated to deliver the same
as provided in its Lease. Contributors agree to deliver to MCRLP copies of all
estoppel letters received by Tenants, in the form received by PDPII or
Contributors. The estoppel certificates required to be obtained pursuant to this
Section 9.1 are collectively referred to as the "Estoppel Certificates".
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ii. As a condition to the Closing, Contributors shall deliver
(a) an Estoppel Certificate from all Tenants which lease 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
including the Tenants set forth in Clause 9.2(a) above.
iii. For an Estoppel Certificate to be deemed delivered for
purposes of this Agreement, it must certify that 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.
j. CLOSINGS.
i. (a) Closing. The consummation of the transactions
contemplated hereunder with respect to the Property (the "Closing") shall take
place at the offices of Brownstein, Hyatt, Farber & Strickland, P.C., 410
Seventeenth Street, 22nd Floor, Denver, Colorado, 80202-4437, on or about March
25, 1998 (the "Closing Date"). Upon notice to Contributors, MCRLP may elect to
accelerate the Closing Date to a date not less than five (5) days after the date
of MCRLP's notice.
(2) Intentionally Deleted.
(3) Intentionally Deleted.
(4) Intentionally Deleted.
ii. On the Closing Date, except as otherwise set forth in
subsections 10.2(z) and 10.2(aa), Contributor, at its sole cost and expense,
will deliver or cause to be delivered to MCRLP the following documents, fully
executed by all parties thereto other than MCRLP or parties claiming by, through
or under MCRLP:
(1) Duly executed and acknowledged assignments from each
Contributor of such Contributor's Interest (the "Interest Assignments"), in the
form annexed hereto as Exhibit 10.2(a), to MCRLP or its designee, as assignee,
together with all applicable and requisite consents, mortgagee consents and
resolutions authorizing the assignment and transaction.
(2) All original Leases and all other documents
pertaining thereto, and certified copies of such Leases or other documents where
Contributors, using their best efforts, are unable to deliver originals of the
same.
(3) All other original documents or instruments referred
to herein, including without limitation the Service Contracts, Licenses and
Permits and Books and
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Records, and certified copies of the same where Contributors, using their best
efforts, are unable to deliver originals of the same.
(4) Intentionally Deleted.
(5) Intentionally Deleted.
(6) Duly executed and acknowledged Omnibus Assignment in
the form of Exhibit 10.2(f).
(7) Intentionally Deleted.
(8) Affidavits and indemnities required by the Title
Company in connection with non-imputation title insurance endorsements and such
other documents and instruments required by the Title Company, executed by
Contributors certifying (i) against any work done or supplies delivered to the
Real Property which might be grounds for a materialman's or mechanic's lien
under or pursuant to Colorado Lien Law, in form sufficient to enable the Title
Company to affirmatively insure MCRLP against any such lien, (ii) that the
signatures on the Interest Assignments are sufficient to bind Contributors and
convey the Contributors' Interest to MCRLP, (iii) the Rent Roll, and (iv) that
Contributors shall indemnify the Title Company against any loss resulting from
the imputation of knowledge to MCRLP, or Mack-Cali through Contributors.
(9) Affidavits and other instruments, including but not
limited to all organizational documents of PDPII and PDPII's members, as
applicable, including PDPII's operating agreements, filed copies of the articles
of organization and good standing certificates (or its equivalent), reasonably
requested by MCRLP and the Title Company evidencing the power and authority of
PDPII and Contributors to enter into this Agreement and any documents to be
delivered hereunder, and the enforceability of the same.
(10) The original Estoppel Certificates.
(11) 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 MCRLP to realize upon the same and as may
be required by the issuing banks of any cash and non-cash security deposits to
reflect a change in the beneficial interest of the PDPII and changes in
signatories to the bank accounts holding the cash and non-cash security
deposits.
(12) A certificate indicating that the representations
and warranties of PDPII and Contributors made in this Agreement are true and
correct as of the Closing Date or if there have been any changes, a description
thereof.
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(13) A Rent Roll for the Property, current as of the
Closing Date, certified by PDPII and Contributors as being true and correct in
all material respects.
(14) All proper instruments as shall be reasonably
required for the conveyance to MCRLP of all right, title and interest, if any,
of PDPII and Contributors 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 and Improvements.
(15) In order to avoid the imposition of the withholding
tax payment pursuant to Section 1445 of the Code, a certificate which is in a
form acceptable to Mack-Cali and which is signed by each Contributor (or an
appropriate officer of each Contributor that is an entity) to the effect that
such Contributor is not a "foreign person" as that term is defined in Section
1445(f)(3) of the Code.
(16) All such transfer and other tax declarations and
returns and information returns, duly executed and sworn to by Contributors as
may be required of Contributors by law in connection with the transfer of
Contributors' Interests to MCRLP, including but not limited to, Internal Revenue
Service forms and the declaration required to be filed pursuant to Title 39,
Article 14 of the Colorado Revised Statutes.
(17) A statement setting forth all adjustments and
prorations shown thereon.
(18) A Tradenames Assignment Agreement substantially in
the form of Exhibit 10.2(r).
(19) Estoppel certificates addressed to MCRLP from the
mortgagees of the mortgages, if any, in form and substance reasonably acceptable
to MCRLP.
(20) An opinion of counsel from Brownstein, Hyatt,
Farber & Strickland, P.C., substantially in the form of Exhibit 10.2(t)
regarding the due execution, delivery, and enforceability of this Agreement, the
foregoing documents and the contribution by each Contributor of its
Contributor's Interest to MCRLP.
(21) Duly executed and acknowledged Indemnity Agreement
substantially in the form of Exhibit 5.3.
(22) Intentionally Deleted.
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(23) A Registration Rights Agreement substantially in
the form of Exhibit 10.3(g).
(24) Intentionally Deleted.
(25) Such other documents as may be reasonably required
by MCRLP or as may be appropriate to effectuate the consummation of the
transactions contemplated by this Agreement.
(26) At least fifteen (15) days prior to the Closing
Date, a schedule setting forth, with respect to each Contributor that will
receive Contributor Units as part of the consideration: (i) the identity of such
Contributors and the amount of Contributor Units so allocated to any such
Contributor; (ii) the gross fair market value of the interest that such
Contributor is transferring to MCRLP for purposes of determining the gain or
loss that will be recognized for federal income tax purposes as a result of the
transfer; (iii) the adjusted basis of such interest immediately prior to the
contribution; (iv) the amount of cash and Contributor Units allocated to such
interest; and (v) the amount of any liability relating to such interest that
MCRLP will either assume or to which such interest will be subject and which
does not constitute a "qualified liability" within the meaning of Treasury
Regulations Section 1.707-5(a)(6).
(27) At least fifteen (15) days prior to the Closing
Date, a schedule setting forth: (i) any Contributor named for purposes of
Section 10.2(z)(i) which is to receive less than the full amount of Contributor
Units indicated for purposes of Section 10.2(z)(i); and (ii) the names of those
persons who are to receive Contributor Units that each such Contributor would
otherwise be entitled to receive and the amount of units that any such persons
are to receive. At least fifteen (15) days prior to the Closing Date, each
Contributor to which this Section 10.2(aa) is relevant shall issue "direction
letters" to MCRLP (in the form acceptable to MCRLP), to the effect that each
such Contributor authorizes the issuance by MCRLP of Contributor Units directly
to such persons (and in such amounts) which are set forth for purposes of
Section 10.2(aa)(ii).
(28) A letter from each applicable municipal department
or agency having jurisdiction that the Property is in compliance with the laws,
codes, rules, regulations and ordinances regarding (i) zoning, (ii) building,
(iii) health and (iv) fire, life and safety.
(29) A computer diskette containing any closing or other
documents executed in connection with this transaction and prepared by PDPII,
Contributors or their counsel, in WordPerfect or Microsoft Word format.
(30) All original organizational documents relating to
PDPII and the Contributors, and all statements of accounts, books and records
and insurance policies.
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(31) A certificate executed by each Contributor Unit
Holder and each Contributor receiving Contributor Units, substantially in the
form of Schedule 10.2(ee).
(32) A counterpart to the OP Agreement substantially in
the form of Exhibit 10.2(ff), executed by each Contributor Unit Holder and each
Contributor receiving Contributor Units.
iii. On the Closing Date, Mack-Cali and MCRLP, at their sole
cost and expense, will deliver or cause to be delivered to Contributors the
following documents, fully executed by all parties thereto other than
Contributors or parties claiming by, through or under Contributors:
(1) The Cash Payment, net of adjustments and prorations.
(2) The Permanent Certificates representing, in the
aggregate, the Contributor Units.
(3) Intentionally Deleted.
(4) Duly executed and acknowledged Omnibus Assignment in
the form of Exhibit 10.2(f) annexed hereto.
(5) A certificate indicating that the representations
and warranties of Mack-Cali and MCRLP made in this Agreement are true and
correct as of the Closing Date or if there have been any changes, a description
thereof.
(6) Affidavits and other instruments, including but not
limited to all organizational documents of Mack-Cali and MCRLP including limited
partnership agreements, filed copies of limited partnership certificates,
articles of organization, and good standing certificates, reasonably requested
by Contributors evidencing the power and authority of Mack-Cali and MCRLP to
enter into this Agreement and any documents to be delivered hereunder, and the
enforceability of the same.
(7) A Registration Rights Agreement substantially in the
form of Exhibit 10.3(g).
(8) Intentionally Deleted.
(9) A Tradenames Assignment Agreement substantially in
the form of Exhibit 10.2(r).
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(10) Intentionally Deleted.
(11) Duly executed and acknowledged Interest Assignments
in the form of Exhibit 10.2(a).
(12) Such other documents as may be reasonably required
or appropriate to effectuate the consummation of the transactions contemplated
by this Agreement.
iv. Contributor shall pay for the premium charges and costs
for title insurance policies (but not any endorsements to such policies required
by Mack-Cali); all survey costs; all costs incurred to repay or satisfy any and
all liens; all costs incurred with respect to non-imputation endorsements to
title insurance policies obtained by MCRLP; all leasing commissions due to
Tenants in connection with the initial and/or current terms of their respective
Leases; all costs of tenant improvement concessions due to Tenants in connection
with the initial and/or current terms of their respective Leases; and all
customary prorations and apportionments. Mack-Cali shall pay for the costs of
all customary documentary and recording fees, if any; the cost of any
endorsements to its title insurance policies (with the exception of any
non-imputation endorsements); all due diligence investigations costs (including,
without limitation, the cost of all Phase I Reports for the Property, which
environmental assessment reports shall be dated no more than thirty (30) days
prior to the Closing Date); and all customary prorations and apportionments.
Each party shall be responsible for its own attorney's fees. The provisions of
this Section 10.4 shall survive the Closing.
v. 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 Contributors related to periods prior to the Closing,
such claims shall be the responsibility of Contributors, and Contributors shall
jointly and severally indemnify, defend and hold harmless MCRLP (and its
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.
vi. Mack-Cali and MCRLP acknowledge and agree that, except as
set forth in this Agreement, MCRLP is acquiring the Property in its "as is"
condition "subject to all faults" and specifically and expressly without any
warranties, representations or guarantees, either express or implied, of any
kind, nature, or type whatsoever from or on behalf of Contributors. Mack-Cali
and MCRLP acknowledge that except for documents, reports and information related
to the environmental integrity of the Real Property, neither Mack-Cali nor MCRLP
has relied and is not relying on any information, document, reports, sales
brochure or other literature, maps or sketches, financial information,
projections, pro formas or statements, that may have been given by or made by or
on behalf of Contributors with respect to the Property. MCRLP and Mack-Cali
further acknowledge that all materials relating to the Property which have been
provided by Contributors, including but not limited to, the Phase I Reports,
have been provided without any warranty or
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representation, expressed or implied as to their content, suitability for any
purpose, accuracy, truthfulness or completeness and neither MCRLP nor Mack-Cali
shall have any recourse against Contributors or its counsel, advisors, agents,
officers, directors or employees for any information in the event of any errors
therein or omissions therefrom.
Contributors do not warrant or make any representation,
express or implied, as to the merchantability, quantity, quality, condition,
suitability or fitness of the Property for any purpose whatsoever, including,
without limitation, its compliance with applicable building codes and
ordinances, zoning laws, environmental laws including, without limitation, the
Clean Air Act, CERCLA and the Super Fund Amendments and Reauthorization Act
("SARA"), the Americans with Disabilities Act, and any other federal, state or
local statutes, codes or ordinances. MCRLP also acknowledges and agrees that (i)
the representations and warranties of Contributors in Section 5 of this
Agreement and (ii) provisions in this Agreement for delivery of existing Phase I
Reports and inspection and investigation of the Property are adequate to enable
MCRLP to make MCRLP's own determination with respect to the suitability or
fitness of the Property, including, without limitation, its compliance with
applicable building codes and ordinances, zoning laws, environmental laws
including, without limitation, the Clean Air Act, CERCLA and SARA, the Americans
with Disabilities Act, and any other federal, state or local statutes, codes or
ordinances.
Except to the extent (a) caused by a breach of any of
Contributors' representations hereunder; (b) related to claims by or liabilities
to third parties unrelated to Mack-Cali or MCRLP; or (c) as otherwise expressly
set forth herein, including, without limitation, as indemnified under the
Indemnity Agreement, MCRLP and Mack-Cali, for themselves and their successors
and assigns, hereby release each of the Contributors, and their agents,
employees, partners, officers, directors, members, managers, contractors,
consultants and representatives from, and waive any and all causes of action or
claims against any of such persons for (i) any and all liability attributable to
any physical condition of or at the Property, including, without limitation, the
presence on, under or about the Property of any materials the release or storage
of which is regulated by law; (ii) any and all liability resulting from the
failure of the Property to comply with any applicable laws; and (iii) any
liabilities, damages or injury arising from, connected with or otherwise caused
by statements, opinions or information obtained from any of such persons with
respect to the Property.
k. ADJUSTMENTS.
i. The following items under (a) through (g) with respect to
the Real Property are to be apportioned as of midnight on the date preceding the
Closing:
(1) Rents, escalation charges and percentage rents
payable by Tenants as and when collected. All moneys received from Tenants from
and after the Closing shall belong to MCRLP and shall be applied by MCRLP to
current rents and other charges under the
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Leases. After application of such moneys to current rents and charges, MCRLP
agrees to remit to Contributors any excess amounts paid by a Tenant to the
extent that such Tenant was in arrears in the payment of rent prior to the
Closing.
(2) A cashier's or certified check or wire transfer to
the order of MCRLP in the amount of all cash Security Deposits and any prepaid
rents, together with interest required to be paid thereon. At the election of
MCRLP, such amount may be allotted to MCRLP as a credit against the Cash
Payment.
(3) Utility charges payable by PDPII, including without
limitation, electricity, water charges and sewer charges. If there are meters on
the Real Property, Contributors will cause readings of all said meters to be
performed not more than ten (10) days prior to the Closing Date.
(4) Amounts payable under the Service Contracts other
than those Service Contracts which MCRLP has elected not to assume.
(5) 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.
(6) The value of fuel stored at any of the Real
Property, at PDPII's most recent cost, including taxes, on the basis of a
reading made within fifteen (15) days prior to the Closing by PDPII's supplier.
(7) Intentionally Deleted.
ii. Intentionally Deleted.
iii. At the Closing, Contributors shall deliver to MCRLP a
list of additional rent, however characterized, under all Leases, including
without limitation, real estate taxes, electrical charges, utility costs and
operating expenses (collectively, "Additional Rents") billed to Tenants for the
calendar year 1998 (both on a monthly basis and in the aggregate), the basis for
which the monthly amounts are being billed and the amounts incurred by PDPII on
account of the components of Additional Rent for calendar year 1998. Upon the
reconciliation by MCRLP of the Additional Rents billed to Tenants, and the
amounts actually incurred for calendar year 1998, Contributors and MCRLP shall
be liable for overpayments of Additional Rents, and shall be entitled to
payments from Tenants, as the case may be, on a pro rata basis based upon each
party's period of ownership during calendar year 1998. Notwithstanding the
foregoing, the calculation of real estate taxes, and the collection of
Additional Rents from Tenants attributable to such real estate taxes, as
reflected on the closing statement related hereto, shall be final as of the
Closing Date.
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iv. Intentionally Deleted.
v. If, on the Closing Date, the Property or any part thereof
shall be or shall have been affected by an assessment or assessments which are
or may become payable in annual installments, all the unpaid installments of any
such assessment due and payable on or prior to the Closing Date shall be paid
and discharged by Contributors on the Closing Date.
vi. 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 Colorado.
vii. Any errors in calculations or adjustments shall be
corrected or adjusted as soon as practicable after the Closing.
viii. The provisions of this Section 11 shall survive the
Closing Date.
l. CONDITIONS PRECEDENT TO CLOSING.
i. The obligations of Contributors to deliver the
Contributors' Interests and to perform the other covenants and obligations to be
performed by Contributors 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):
(1) The representations and warranties made by MCRLP and
Mack-Cali herein shall be true and correct in all material respects with the
same force and effect as though such representations and warranties had been
made on and as of the Closing Date; provided, however, that a failure of any
representations or warranties to be true and correct in all material respects
shall not give rise to a claim by Contributors hereunder so long as such matters
do not have a material adverse effect on the transactions contemplated herein.
(2) MCRLP and Mack-Cali shall have executed and
delivered to Contributors all of the documents provided herein for said
delivery.
(3) Intentionally Deleted.
(4) Mack-Cali and MCRLP shall have performed all
covenants and obligations undertaken by Mack-Cali and MCRLP herein in all
material respects and complied with all material conditions required by this
Agreement to be performed or complied with by them on or before the Closing
Date.
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ii. The obligations of Mack-Cali and MCRLP to deliver the
Permanent Certificates to Contributor Unit Holders and to accept the
Contributors' Interests and Mack-Cali's and MCRLP's obligation to perform the
other covenants and obligations to be performed by Mack-Cali and MCRLP 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 Mack-Cali or MCRLP):
(1) Subject to Section 5.5(a) the representations and
warranties made by PDPII and Contributors 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. For
the purposes of the Closing condition described in this Section 12.2(a), any
limitation to the knowledge, best knowledge, or actual knowledge in any
representation, warranty, covenant or agreement made by PDPII and Contributors
herein shall be inapplicable.
(2) Contributors shall have performed all covenants and
obligations undertaken by Contributors 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.
(3) The Title Company is unconditionally prepared to
issue to MCRLP a Title Policy meeting the requirements set forth in Section 4
hereof for an "insurable title".
(4) The Real Property shall be in compliance with all
Environmental Laws.
(5) Contributors shall have executed and delivered to
MCRLP all of the documents or other requisite documents provided for herein for
said delivery.
m. INTENTIONALLY DELETED.
n. LEASING COMMISSIONS AND TENANT IMPROVEMENT OBLIGATIONS.
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 Contributor. MCRLP
shall be credited at Closing as set forth on Schedules 5.1(f) and 5.1(m)
respectively with respect to certain tenant improvement and leasing commission
obligations, but Contributors shall remain liable for any amounts due and owing
in excess of such credits. All leasing commissions on account of extensions or
renewals of Leases made after the Closing Date shall be paid by MCRLP. All
tenant improvements obligations shall be satisfied prior to the Closing Date.
The provisions of this Section shall survive the Closing.
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o. ASSIGNMENT.
This Agreement may not be assigned by Mack-Cali or MCRLP
except to a directly or indirectly wholly-owned subsidiary or subsidiaries of
Mack-Cali or MCRLP, 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
Mack-Cali or MCRLP shall be deemed null and void and of no force and effect.
Notwithstanding anything to the contrary contained herein, Mack-Cali or MCRLP
may assign the Contributors' Interests to various entities, provided that each
of such entities is a Permitted Assignee. A copy of any assignment permitted
hereunder, together with an agreement of the assignee assuming all of the terms
and conditions of this Agreement to be performed by Mack-Cali or MCRLP with
respect to the portion of the Real Property, in form reasonably satisfactory to
counsel for Contributors, shall be delivered to the attorneys for Contributors
prior to the Closing, and in any event, no such assignment shall relieve
Mack-Cali and MCRLP from their obligations under this Agreement.
p. BROKER.
Mack-Cali, MCRLP, and Contributors represent that, with the
exception of Sonnenblick Goldman Ltd. , Conning Asset Management, Inc. and
Pacifica Holding Company LLC (collectively, "Brokers") 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 they may sustain, incur or be exposed to by reason of any breach of the
foregoing representation and warranty. Notwithstanding the foregoing,
Contributors shall pay in full any commission, fee or other compensation due the
Brokers pursuant to separate agreements, and Guarantor and Contributors agree to
indemnify, defend and hold MCRLP and Mack-Cali harmless from and against any and
all loss, cost, damage, liability, or expense, including reasonable attorneys'
fees, which MCRLP or Mack-Cali may sustain, incur or be exposed to by reason of
Contributor's failure to pay in full the Brokers pursuant to such separate
agreements. The provisions of this Section shall survive the Closing and/or
other termination of this Agreement.
q. CASUALTY LOSS.
i. Subject to Section 7.1(h), PDPII and Contributors shall
continue to maintain, or cause any Tenant to maintain, in all material respects,
the fire and extended coverage insurance policies with respect to the Property
(the "Insurance Policies") which are currently in effect, through the date that
said coverage currently expires, which obligation shall survive the Closing.
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ii. If at any time prior to the Closing Date, all or any
portion of the Property is destroyed or damaged as a result of fire or any other
casualty (a "Casualty"), Contributors shall promptly give written notice
("Casualty Notice") thereof to MCRLP. Within ten (10) days after the receipt of
the Casualty Notice, MCRLP and Mack-Cali shall have the right, at their sole
option, to terminate this Agreement with respect to said Property by written
notice to Contributors. Notwithstanding the foregoing, MCRLP and Mack-Cali shall
not have the right to terminate this Agreement, if (a) Contributors' insurance
fully covers the damage resulting from the Casualty; (b) the proceeds of any
insurance, together with a credit equal to Contributors' deductible under the
Insurance Policies, shall be paid to MCRLP at the time of the Closing; and (c)
all unpaid claims and rights in connection with losses to the Property shall be
assigned to MCRLP at the Closing without in any manner affecting the Exchange
Consideration hereunder. Contributor represents that the insurance maintained by
it is customary and prudent for the assets owned by it.
iii. If the Property is the subject of a Casualty but MCRLP
does not terminate this Agreement pursuant to the provisions of this Section,
then Contributors shall, prior to the Closing Date, cause all temporary repairs
to be made to the Property as shall be required to prevent further deterioration
and damage to the Property and to protect public health and safety; provided,
however, that any such repairs shall first be approved by MCRLP. Contributors
shall have the right to be reimbursed from the proceeds of any insurance with
respect to the Property for the cost of such temporary repairs.
r. CONDEMNATION.
In the event of a material taking (as defined in this Section
18), MCRLP and Mack-Cali shall have the right, at their sole option, to either
(a) terminate this Agreement by giving Contributors written notice to such
effect at any time after its receipt of written notification of any such
occurrence, or (b) accept title to the remainder of the Property without
reduction of any consideration given hereunder. Should MCRLP or Mack-Cali so
terminate this Agreement in accordance with this Section, neither party shall
have any further liability or obligations to the other. In the event MCRLP and
Mack-Cali shall not elect to cancel this Agreement, Contributors shall, subject
to the rights of the holder of any existing mortgage, assign all proceeds of
such taking to MCRLP, and the same shall be MCRLP's sole property, and MCRLP
shall have the sole right to settle any claim in connection with the Property.
The term "material taking" shall be defined to mean the institution of any
proceedings, judicial, administrative or otherwise which involve (a) the taking
of a portion of Real Property such that ingress and egress to such Real Property
is impaired, (b) the taking of a portion of the parking spaces of a Real
Property such that after such taking the Real Property will not be in compliance
with local zoning regulations regarding adequate parking, or (c) the taking of
any part of a Building.
s. TRANSFER RESTRICTIONS.
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i. Contributors hereby agree 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 19, or (ii) publicly (subject to
the restrictions of the Act and the rules and regulations promulgated
thereunder) in trading blocks of 150,000 shares of Common Stock or less, in any
single day. Notwithstanding anything herein to the contrary, the provisions of
this Section 19 shall not apply to (i) pledges or encumbrances of all or a
portion of the Contributor Units to an institutional lender, or (ii) Transfers
of all or any portion of the Contributor Units to permitted transferees as set
forth in the OP Agreement (the "Permitted Transferees"). Any holder of
Contributor Units pursuant to (i) or (ii) of the preceding sentence shall be
subject to the terms and conditions of the OP Agreement.
ii. If any of the Unit Holders, or any of their Permitted
Transferees (each a "Seller") receives a bona fide written offer to purchase
part or all of its Contributor Units or Underlying Shares in a privately
negotiated transaction which it desires to accept, such Seller shall not sell,
transfer, or otherwise dispose of (the "Proposed Disposition") such Units or
Underlying Shares (the "Disposition Securities") to a third party (the
"Purchaser"), unless prior to such Proposed Disposition, such Seller shall have
promptly reduced the terms and conditions, if any, of the Proposed Disposition
to a reasonably detailed writing and shall have delivered written notice (the
"Disposition Notice") of such Proposed Disposition to MCRLP. The Disposition
Notice 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.
iii. Mack-Cali shall not sell the Property within four (4)
years from the date of the Closing (the "Restricted Period") without the prior
written consent of Contributors, other than (1) in connection with a transaction
which does not result in recognition of gain by the Contributors; (2) a sale of
any of the Property set forth in Schedule 19.3 hereto; (3) as determined by the
Board of Directors of Mack-Cali (the "Board") as necessary to satisfy any
material monetary default on any mortgage secured by the Property; (4) as
determined by the Board as necessary to satisfy any material, unsecured debt,
judgment or liability of Mack-Cali when the same becomes due (at maturity or
otherwise); (5) in connection with the sale of all or substantially all of the
properties owned by Mack-Cali under such terms and conditions which the Board,
in its sole judgment, determines to be in the best interests of Mack-Cali and
its public stockholders; and/or (6) sales of the Property which do not result in
material and adverse tax consequences for the Contributors. Mack-Cali may
dispose of any or all of the Property in its sole discretion, and without the
consent of Contributors, upon the expiration of the Restricted Period.
Notwithstanding any of the foregoing language to the contrary, Mack-Cali shall
not distribute the Property for a period of seven (7) years if the distribution
of such Property would result in the recognition of income by Contributor
pursuant
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to Sections 704(c)(1)(B) or 737 of the Code, except as otherwise permitted in
clauses (1) through (7) above.
t. INTENTIONALLY DELETED.
u. TAX MATTERS.
i. (a) Contributors will timely pay or provide for the payment
of all Taxes which are attributable to all Pre-Closing Tax Periods, but which
are not due and payable until after the Closing Date in connection with the
ownership and/or operation of the Property (by them or any predecessor entities)
or their businesses for which either MCRLP (or any of its direct or indirect
partners) could be held directly or indirectly liable or a claim could be made
against the Property. To the extent allowed by law, Contributors will timely
file all Tax Returns which are required to be filed in connection with the
ownership and/or operation of the Property (by them or any predecessor entities)
or their businesses for all Pre-Closing Tax Periods but which are not required
to be filed until after the Closing Date and the non-timely filing (or
non-filing) of which could result in direct or indirect liability to MCRLP (or
any of its direct or indirect partners) or a claim against the Property. Each
such Tax Return will be complete and accurate. Contributors will provide
Mack-Cali with a copy of all such Tax Returns promptly after such Tax Returns
are filed. All Taxes imposed in connection with the ownership and/or operation
of the Property during any taxable periods which begin on or before the Closing
Date and end after the Closing Date ("Straddle Periods" or "Straddle Period")
shall be allocated between Contributors and MCRLP in accordance with their
respective periods of ownership of the Property. Contributors will timely pay
all Taxes with respect to their businesses for any Straddle Period (and any
other taxable period) for which either MCRLP (or any of its direct to indirect
partners) could be held directly or indirectly liable or a claim could be made
against the Property.
(2) Contributors shall cause PDPII to provide Mack-Cali
with a copy of its Federal income tax returns which reflect (in whole or in
part) any of the transactions contemplated hereunder and which reflect (in whole
or in part) any of the gain or loss recognized in respect of such transactions.
ii. PDPII and Contributors shall pay any and all Taxes
including without limitation, Taxes imposed with respect to the operation of its
business and the ownership or operation of the Property or PDPII for all taxable
periods (or portions thereof) ending on or prior to the Closing imposed upon
MCRLP based, in whole or in part, upon the failure to comply with the bulk sales
laws.
iii. Contributors are hereby authorized to continue the
proceeding or proceedings now pending for the reduction of the assessed
valuation of the Property as set forth on Schedule 21.3 and to litigate or
settle the same in Contributors' discretion. MCRLP is hereby
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authorized by Contributors, in MCRLP's sole discretion, to file any applicable
proceeding for the 1997 and/or 1998 fiscal year for the reduction of the
assessed valuation of the Property. The net refund of taxes, if any, for any tax
year for which Contributors or MCRLP shall be entitled to share in the refund
shall be divided between Contributors and MCRLP in accordance with the
apportionment of taxes pursuant to the provisions hereof. All expenses in
connection therewith, including counsel fees, shall be borne by Contributors and
MCRLP in proportion to their ownership period of the asset in question.
iv. For purposes of this Agreement:
(1) "Taxes" or "Tax" 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.
(2) "Tax Returns" or "Tax Return" means all original and
amended Federal, state, local and foreign tax returns, declarations, statements,
reports, schedules, forms, information returns and other filings relating to
Taxes.
(3) "Audits" or "Audit" means any audit, assessment of
Taxes, any other examination or claim by any Governmental Authority, judicial,
administrative or other proceeding or litigation (including any appeal of any
such judicial, administrative or other proceeding or litigation) relating to
Taxes and/or Tax Returns.
v. The provisions of this Section shall survive the Closing
Date.
v. PUBLICATION.
i. MCRLP shall have the exclusive right to make such public
announcements or filings with respect to the exchange as MCRLP may deem
reasonably prudent and, upon advice of counsel, as may be necessary or required
by law.
w. REMEDIES.
i. If the conditions set forth in Section 12.2 with respect to
the Closing have been satisfied (unless the failure or inability to be so
satisfied is due to Mack-Cali or
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MCRLP) and if MCRLP or Mack-Cali is not ready, willing and able to perform its
obligations hereunder on the Closing Date, or in the event of a material default
of MCRLP or Mack-Cali or MCRLP's or Mack-Cali's material failure to comply with
any material representation, warranty, covenant or agreement set forth herein
with respect to the Closing, then Contributors, subject to the limitations set
forth in this Agreement, including, without limitation, those set forth in
Section 6.3, shall have the right as their sole and exclusive remedy to either
(i) terminate this Agreement upon written notice to MCRLP, in which event
neither party shall thereafter have any further obligations under this
Agreement, except those which expressly survive the termination hereof; or (ii)
maintain an action for either (A) specific performance, or (B) monetary damages.
ii. If the conditions set forth in Section 12.1 have been
satisfied (unless the failure or inability to be so satisfied is due to PDPII or
any Contributor), and if Contributors are not ready, willing and able to perform
their obligations hereunder on the Closing Date, or in the event of any material
default on the part of any of the Contributors, or PDPII or any Contributors'
failure to comply with any material representation, warranty, covenant or
agreement set forth herein, MCRLP shall be entitled to either (i) terminate this
Agreement upon notice to Contributors following which neither party shall
thereafter have any further obligations under this Agreement, except those which
expressly survive the termination hereof; or (ii) commence an action against
Contributors seeking either (A) monetary damages, or (B) specific performance of
Contributors' obligations under this Agreement.
iii. The acceptance of the Assignment of Interest by MCRLP
shall be deemed a full performance and discharge of every agreement and
obligation of Contributors to be performed under this Agreement, except those,
if any, which are specifically stated in this Agreement to survive the Closing.
x. INTENTIONALLY DELETED.
y. 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 Mack-Cali: c/o Mack-Cali Realty Corporation
or MCRLP 11 Commerce Drive
Cranford, New Jersey 07016
Attn: Roger W. Thomas, Esq.
(908) 272-8000 (tele.)
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(908) 272-6755 (fax)
with a copy to: Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attn: Wayne B. Heicklen, Esq.
(212) 326-0425 (tele.)
(212) 326-0806 (fax)
If to PDPII: c/o Pacifica Holding Company, LLC
or Contributors 5975 South Quebec Street, Suite 100
Englewood, Colorado 80111
Attn: Mr. Steven Leonard
(303) 220-5565 (tele.)
(303) 220-5585 (fax)
with a copy to: Brownstein, Hyatt, et al.
410 17th Street, 22nd Floor
Denver, Colorado 80202
Attn: Edward N. Barad, Esq.
(303) 534-6335 (tele.)
(303) 623-1956 (fax)
and a copy to: Apollo Real Estate Advisors
1301 Avenue of the Americas, 38th
Floor
New York, NY 10019
Attn: Mr. Richard Mack
(212) 261-4065 (tele.)
(212) 261-4060 (fax)
or to such other address as either party may from time to time designate
by written notice to the other. Notices given by (i) overnight delivery service
as aforesaid shall be deemed received and effective on the first business day
following such dispatch, and (ii) telecopy or fax machine shall be deemed given
at the time and on the date of machine transmittal provided the same is sent
prior to 4:00 p.m. Eastern Time 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.
z. DEPRECIATION METHOD.
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Mack-Cali, as the general partner of MCRLP, covenants and
agrees that MCRLP and its affiliates will use the "traditional method with
curative allocations" (as defined in Treasury Regulations Section 1.704-3(c)) of
allocating income, gain, loss and deduction to account for the variation between
the fair market value and adjusted basis of the Property for federal income tax
purposes with respect to (i) the contribution of the Property, and (ii) any
revaluation of the Property in accordance with the provisions of Treasury
Regulations Sections 1.704-1(b)(2)(iv)(f), 1.704-1(b)(2)(iv)(g) and
1.704-3(a)(6).
aa. MISCELLANEOUS.
i. Intentionally Deleted.
ii. 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.
iii. This Agreement cannot be amended, waived or terminated
orally, but only by an agreement in writing signed by the party to be charged.
iv. This Agreement shall be interpreted and governed by the
laws of the State of Colorado, without regard to conflicts of laws principles,
and shall be binding upon the parties hereto and their respective successors and
assigns.
v. 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. The, feminine or masculine gender, when used herein, shall
include the other gender and the use of the singular shall include the plural.
vi. 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.
vii. Each party shall, from time to time, execute, acknowledge
and deliver to the other party 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 Contributors and MCRLP or Mack-Cali. This
Agreement shall be
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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 Contributors, MCRLP or Mack-Cali or the party whose counsel
drafted this Agreement.
viii. 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.
ix. All references herein to any Section, Exhibit, or Schedule
shall be to the Sections of this Agreement and to the Exhibits and Schedules
annexed hereto unless the context clearly dictates otherwise. All of the
Exhibits and Schedules annexed hereto are, by this reference, incorporated
herein.
x. In the event that PDPII or Contributors, and MCRLP or Mack-
Cali enter into litigation or alternative dispute resolution in connection with
this Agreement or the transaction contemplated herein, the non-prevailing party
in such litigation or alternative dispute resolution shall be responsible for
the payment of all expenses and reasonable attorneys' fees incurred by the
prevailing party.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE.]
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CONTRIBUTION AND EXCHANGE AGREEMENT
THIS CONTRIBUTION AND EXCHANGE AGREEMENT (the "Agreement") made this
25th day of March, 1998, by and among the parties set forth on Exhibit A annexed
hereto and made a part hereof (jointly and severally, "Contributors", and each
individually, a "Contributor"), each having an address c/o Pacifica Holding
Company, 5975 South Quebec Street, Suite 100, Englewood, Colorado, MACK-CALI
REALTY, L.P., a Delaware limited partnership ("MCRLP") and MACK-CALI REALTY
CORPORATION, a Maryland corporation ("Mack-Cali"), each having an address at 11
Commerce Drive, Cranford, New Jersey 07016.
RECITALS
5. Contributors are, collectively, the owners of all the membership
and/or other ownership interests in and to Centennial Valley Business Park One,
Ltd., a Colorado limited partnership ("Owner"). Each Contributor owns the
respective membership and/or ownership interest in Owner set forth on Exhibit B
annexed hereto and made a part hereof.
6. Owner owns various commercial properties located throughout the
Denver, Colorado metropolitan area. Mack-Cali, through MCRLP and certain
affiliated entities of MCRLP, similarly own various commercial properties
located throughout New Jersey, New York, Pennsylvania, Nebraska, Iowa,
California, Florida, Arizona, Connecticut and Texas.
7. In order to effectuate their contribution and exchange of assets
as herein provided, each Contributor hereby agrees to contribute all of its
membership and/or ownership interests in and to Owner and certain other assets
to MCRLP and Mack-Cali, and MCRLP and Mack-Cali hereby agree to accept the
contribution of the Contributors' Interest and certain other assets on, and
subject to, the terms, covenants and conditions set forth herein.
8. Contributors, MCRLP and Mack-Cali have determined that the
transactions contemplated hereby are in the respective parties' best interests.
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 agree
as follows:
a. SUBJECT OF CONTRIBUTION.
i. Upon, and subject to the terms, covenants and conditions of
this Agreement, on the Closing Date (as hereinafter defined), each of the
Contributors shall contribute, convey or otherwise transfer to certain designees
of MCRLP 100% of said Contributor's
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right, title and interest (collectively, "Contributors' Interests, each
individually, a "Contributor's Interest") in and to Owner.
ii. From and after the Closing, Owner shall be the sole and
exclusive owner of the following:
(1) that certain real property situate, lying and being
in the State of Colorado and being more particularly described on Schedule 1(a)
(the "Land") and all of the improvements located on the Land (individually, a
"Building" and collectively, the "Improvements");
(2) all rights, privileges, grants and easements
appurtenant to Owner's interest in the Land and Improvements, if any, including
without limitation, all of Contributor's and/or Owner's rights, title 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
collectively referred to herein as the "Real Property");
(3) except as set forth on Schedule 1(c) all personal
property, artwork, fixtures, equipment, inventory and computer programming and
software owned by Owner and located on any of the Real Property or used at any
of the management and corporate offices of Owner or Contributor (the "Personal
Property");
(4) all leases and other agreements with respect to the
use and occupancy of the Real Property, together with all amendments and
modifications thereto (the "Leases") and any guaranties provided thereunder, and
rents, additional rents, reimbursements, profits, income, receipts and the
amount deposited (the "Security Deposit") under any Lease in the nature of
security for the performance of the Tenant's (as defined herein) obligations
thereunder;
(5) Intentionally Deleted.
(6) all assignable permits, licenses, guaranties,
approvals, certificates and warranties relating to the Real Property and the
Personal Property (collectively, the "Permits and Licenses"), all of Owner's
right, title and interest in and to those contracts and agreements for the
servicing, maintenance and operation of the Real Property ("Service Contracts")
and telephone numbers in use at any of the Real Property or the management
offices and corporate headquarters of Owner (together with the Permits and
Licenses and the Service Contracts, the "Intangible Property");
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(7) all books, records, promotional material, tenant
data, leasing material and forms, past and current rent rolls, files,
statements, market studies, keys, plans, specifications, reports, tests and
other materials of any kind owned by or in the possession of Owner which are or
may be used in the use and operation of the Real Property or Personal Property
(collectively, the "Books and Records"); and
(8) all other rights, privileges and appurtenances owned
by Owner, if any, and in any way related to the rights and interests described
above in this Section 1.
The Real Property, the Personal Property, the Leases, the
Intangible Property, the Books and Records and the other property interests are
hereinafter collectively referred to as the "Property".
b. CONSIDERATION.
i. Total Exchange Consideration. The aggregate consideration
for the Contributor's Interests (the "Exchange Consideration") is Eleven Million
Six Hundred Fifty Thousand One Hundred Seventy-Nine and xx/100 ($11,650,179.00)
Dollars, to be paid by MCRLP in accordance with Section 2.2.
ii. The Property. (a) At the Closing (as hereinafter defined),
and upon satisfaction of the terms and conditions herein (i) Contributors shall
contribute, convey or otherwise transfer to MCRLP or its Permitted Assignees (as
hereinafter defined), all of Contributors' Interests and (ii) MCRLP (and
Mack-Cali where applicable) shall, subject to adjustment as set forth herein,
pay to Contributors or their designees, in cash, the amount of Eleven Million
Six Hundred Fifty Thousand One Hundred Seventy-Nine and xx/100 ($11,650,179.00)
Dollars (the "Cash Payment"), allocated as set forth in Schedule 2.2(a)(i); and
(iii) MCRLP (and Mack-Cali where applicable) shall issue the Contributor Units
(as hereinafter defined) in an amount set forth on Schedule 2.2(a)(ii) to such
persons as Contributor shall direct in writing (as set forth in Section
10.2(aa)) as soon as practicable following the date hereof (the "Unit Holders").
(2) Simultaneous with MCRLP accepting the Contributors'
Interests, MCRLP shall issue, subject to adjustments as set forth herein, common
units of limited partnership interests in MCRLP (the "Contributor Units"),
convertible into Mack-Cali common stock ("Common Stock"); provided, however,
that the Unit Holders shall be issued and shall hold the Contributor Units in
accordance with the provisions of Section 19.
(3) At the Closing, MCRLP shall issue to Contributors
and/or the Unit Holders or their designees certificates representing the
Contributor Units (the "Permanent Certificates"), which Permanent Certificates
shall contain the legend set forth on Exhibit 10.2(ee).
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(4) All rights and benefits incidental to the ownership
of the Contributor Units received in exchange for the Property, 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, shall accrue for
the benefit of the Unit Holders commencing on the Closing Date (as defined
herein).
(5) With respect to the first Partnership Record Date
(as defined in the OP Agreement (as defined below)) on or after the Closing, the
Unit Holders 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 Unit Holders held
Contributor Units.
iii. Intentionally Deleted.
iv. Intentionally Deleted.
c. INSPECTION PERIOD; MCRLP'S RIGHT OF TERMINATION AND REJECTION
PRIOR TO CLOSING.
i. Prior to the Closing (the "Inspection Period"), MCRLP, at
its sole cost and expense, may perform, or cause to be performed, tests,
investigations and studies of or related to the Property, the Contributors
and/or Owner, 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 other tests, investigations or
studies as MCRLP, in its sole discretion, determines is necessary or desirable
in connection with the Property, the Contributors and/or Owner and may inspect
the physical (including environmental) and financial condition of the Property,
the Contributors and/or Owner, including but not limited to Leases, Service
Contracts, contracts pursuant to which third party management fees are payable,
copies of the Contributors' and Owner's Tax Returns and the Property Financials
(as hereinafter defined) as of and for the years ending December 31, 1995, 1996
and 1997, engineering and environmental reports, development approval
agreements, permits and approvals, which inspection shall be satisfactory to
MCRLP in its sole discretion. Contributors agree to cooperate and shall cause
Owner to cooperate with MCRLP in such review and inspection and, to the extent
not yet delivered, shall deliver said documents and information to MCRLP within
ten (10) days from the date hereof. MCRLP may terminate this Agreement for any
reason, by written notice given to Contributor, prior to the expiration of the
Inspection Period. In the event MCRLP terminates this Agreement during the
Inspection Period, this Agreement shall be null and void and the parties hereto
shall be relieved of all further obligations hereunder except as otherwise
provided herein. In the event MCRLP does not terminate
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this Agreement by the end of the Inspection Period, then MCRLP shall be deemed
to have elected not to terminate this Agreement.
ii. During the Inspection Period, MCRLP, its agents and
contractors shall have unlimited access to the Property the Contributors and/or
Owner and other information pertaining thereto in the possession or within the
control of Contributors, during normal business hours, for the purpose of
performing such studies, tests, borings, investigations and inspections for the
purposes described in Section 3.1 above. Such right of inspection and the
exercise of such right shall not constitute a waiver by MCRLP of the breach of
any representation or warranty of Owner or Contributors which might, or should,
have been disclosed by such inspection. Contributors shall cooperate and cause
Owner to cooperate with MCRLP in facilitating its due diligence inquiry and
shall obtain, and use commercially reasonable efforts to obtain, any consents
that may be necessary in order for MCRLP to perform the same.
iii. To assist MCRLP in its due diligence investigation of the
Property and Owner, Contributors shall deliver to MCRLP, by the execution and
delivery of this Agreement, true and correct copies of all existing Phase I
environmental studies (the "Phase I Reports") in the possession or control of
Contributors, Owner, its counsel or consultants, with respect to the Real
Property, which Phase I Reports are set forth on Schedule 3.3 annexed hereto. In
the event that MCRLP determines that it requires any new Phase I Reports or
updates thereof, the cost of such reports or updates shall be borne by MCRLP. If
MCRLP reasonably requires that further environmental investigations be
undertaken beyond any new Phase I or updated Phase I Report, all engineering
costs and expenses relating to said further environmental investigations shall
be borne by Mack-Cali.
iv. Intentionally Deleted.
v. During the Inspection Period, Mack-Cali and MCRLP shall
provide to Contributors and their agents and advisors reasonable access to
Mack-Cali's and MCRLP's books and records, and Mack-Cali and MCRLP shall provide
Contributors such other reasonable information including, without limitation,
all Securities and Exchange Commission filings of MCRLP and Mack-Cali and
federal, state, and local income, excise, franchise, and all other tax filings,
in order to permit Contributors, at their sole cost and expense, to perform
reasonable due diligence on such parties. Nothing arising from Owner's or
Contributors' inspection or due diligence as permitted by this Section shall
give rise to a right of Contributors to terminate this Agreement.
vi. Mack-Cali shall have the right, without the obligation, to
terminate this Agreement if (i) at any time prior to the Closing Date, Mack-Cali
determines in its sole discretion, that any of the Property is subject to
materially adverse environmental conditions, including, without limitation, any
environmental condition that has a material adverse affect on the
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property value of any Real Property, on the current use of any Real Property, on
groundwater at, on, under, about or emanating from any Real Property or on the
ability of Mack-Cali or MCRLP to finance any Real Property; or (ii) Contributor
is unable to obtain the approval of any member of the Contributors to the terms
of this Agreement; or (iii) Mack-Cali determines that certain of the
indebtedness encumbering the Property or Owner cannot be satisfied.
d. TITLE; MATTERS TO WHICH THIS SALE IS SUBJECT.
i. As of the Closing Date, title to the Property shall be
subject only to the following (collectively, the "Permitted Encumbrances"):
(1) The liens of real estate taxes, personal property
taxes, water charges, and sewer charges provided the same are not yet due and
payable, but subject to adjustment as provided herein;
(2) the rights of those parties occupying space at any
of the Improvements (collectively, "Tenants") as tenants only;
(3) those restrictions, covenants, agreements,
easements, matters and things affecting title to the Real Property as of the
date hereof and more particularly described in Schedule 4.1(c) annexed hereto
and by this reference made a part hereof and such other easements, covenants and
restrictions which are entered into with the consent of MCRLP after the date
hereof, such consent not to be unreasonably withheld, delayed or conditioned;
(4) any and all laws, statutes, ordinances, codes,
rules, regulations, requirements, or executive mandates affecting the Real
Property including, without limitation, those related to zoning and land use, as
of the date hereof;
(5) the state of facts shown on the surveys described on
Schedule 4.1(e) for the property comprising the Real Property;
(6) the Service Contracts, excluding, however, any
Service Contract MCRLP advises Contributor to terminate prior to Closing (as
hereinafter defined);
(7) any utility company rights, easements and franchises
to maintain poles, lines, wires, cables, pipes, boxes and other fixtures and
facilities in, over, under or upon the Real Property, provided the same do not
impair, in other than a de minimis manner, the present use of the Real Property;
(8) such matters as the Title Company (as hereinafter
defined) shall be willing, without special premium, to omit as exceptions to
coverage; and
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(9) Intentionally Deleted.
ii. Prior to the date hereof, Contributors shall have directed Land
Title Guarantee Company (the "Title Company"), as agent for Chicago Title
Insurance Company, to prepare a title insurance search and commitment for
owner's title insurance policy for the Real Property (the "Title Commitment").
MCRLP shall cause the Title Company to promptly deliver a copy of the same to
Contributors and their counsel. If any defects, objections or exceptions in the
title to the Real Property appear in the Title Commitment (other than the
Permitted Encumbrances) which MCRLP is not required to accept under the terms of
this Agreement, Contributors may, at their election, undertake to eliminate such
unacceptable defects, objections or exceptions, it being agreed that except as
provided below, Contributors shall have no obligation to incur any expense in
connection with curing such defects, objections or exceptions, other than (i)
judgments against any Contributor or Owner; (ii) mortgages or other liens which
can be satisfied by payment of a liquidated amount; and (iii) defects,
objections or exceptions which can be removed by payments not to exceed
$100,000.00 in the aggregate. Contributors, in their 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,
Contributors are 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, MCRLP shall elect either (i) to terminate this
Agreement by notice given to Contributors, in which event the provisions of
Section 23.2(a) shall apply, or (ii) to accept title subject to such
unacceptable defects, objections or exceptions and receive no credit against or
reduction of the consideration to be given hereunder for the Property.
Contributors and Owner agree and covenant that they shall not voluntarily place
any encumbrances or restrictions on title to the Real Property from and after
the date of the first issuance of the Title Commitment for said Property, except
for the right to reserve easements for utilities and ingress and egress
encumbering the Real Property (post-closing) for the benefit of adjacent
properties owned by Owner (or any affiliate thereof) upon the written consent of
MCRLP, which consent shall not be unreasonably withheld or delayed. Mack-Cali
and MCRLP covenant and agree that they shall consult with Contributors prior to
causing any other person or entity to request any inspection of the Real
Property by any governmental entity. Contributors recognize that Mack-Cali's and
MCRLP's due diligence necessitates said inspection. Mack-Cali and MCRLP agree
that they shall conduct any due diligence with such governmental entity with a
view toward maintaining the confidentiality of the transaction contemplated by
this Agreement.
iii. It shall be a condition to Closing that Contributors contribute
and convey, and that the Title Company insures, title to the Real Property in
the amount of the Exchange Consideration (at a standard rate for such insurance)
in the name of MCRLP or its designees, by a standard 1992 ALTA Owner's Policy,
with ALTA endorsements Form 3.1, Form 8.1, a comprehensive owner's endorsement
and non-imputation endorsement, to the extent that the premium for such
endorsements, with the exception of the non-imputation endorsements, is paid by
MCRLP, for the Real Property and any other endorsements as reasonably required
by MCRLP, free
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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 (i) the exception for taxes shall apply only to the current taxes
not yet due and payable; and (ii) to the extent that the premium for such
endorsements, with the exception of the non-imputation endorsements, is paid by
MCRLP, (a) any Permitted Encumbrances have not been violated, and that any
future violation thereof will not result in a forfeiture or reversion of title;
and (b) MCRLP's contemplated use of the Real Property will not violate the
Permitted Encumbrances. Owner and Contributor shall provide such affidavits,
undertakings and indemnities as the Title Company insuring title to the Real
Property may require, including without limitation indemnities relating to each
non-imputation endorsement, and shall cure all other defects and exceptions
other than the Permitted Encumbrances and as required pursuant to Section 4.2.
The words "insurable title" and "insurable" as used in this Agreement are hereby
defined to mean title which is insurable at standard rates (without special
premium) by the Title Company without exception other than the Permitted
Encumbrances, and standard printed policy and survey exceptions.
iv. Contributors shall cause one or more surveyors acceptable
to MCRLP to deliver to MCRLP a survey or surveys of the Real Property acceptable
to MCRLP in all respects and in conformity with ALTA standards. MCRLP shall, at
MCRLP's sole cost and expense and with Contributors' cooperation and assistance,
cause the surveyor to update the survey no more than thirty (30) days prior to
the Closing Date and shall have the general survey exception removed from the
Title Policy and the survey affirmatively insured, to the extent that the
premium for such endorsement is paid by MCRLP, to MCRLP.
v. 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
Contributors or Owner, 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 Contributors. Owner or Contributors shall deliver to MCRLP, on
the Closing Date, instruments in recordable form sufficient to discharge any
such mortgages or other liens which any of the Contributors or Owner is
obligated to pay and discharge pursuant to the terms of this Agreement.
vi. If the Title Commitment discloses judgments, bankruptcies
or other returns against other persons or entities having names the same as or
similar to that of Owner or any of the Contributors, Contributors shall, upon
request, deliver to the Title Company affidavits showing that such judgments,
bankruptcies or other returns are not against Owner or any of the Contributors,
or any of their affiliates. Upon request by MCRLP, Contributors shall deliver
any affidavits and documentary evidence as are reasonably required by the Title
Company to eliminate the standard exceptions on the ALTA Owner's Policy.
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e. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTORS.
i. In order to induce MCRLP and Mack-Cali to perform as
required hereunder, Contributors hereby warrant and represent jointly and
severally to MCRLP and Mack-Cali, the following with respect to the Property and
Contributors' Interests:
(1) Owner is a duly organized and validly existing
entity, organized and in good standing under the laws of the state of its
formation, as more particularly set forth in Exhibit A hereto, is duly
authorized to transact business in the State of Colorado, has all requisite
power and authority to consent to the execution and delivery of 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 cause the contribution and conveyance of
Contributors' Interests in accordance with the terms and conditions hereof. All
necessary actions of Owner and Contributors, and the members of each, 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.
(2) Owner has the power and authority to own the
Property and to conduct and transact its limited liability company business.
(3) This Agreement, when duly executed and delivered,
will be the legal, valid and binding obligation of each Contributor, enforceable
in accordance with the terms of this Agreement. The performance by each
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 such Contributors or Owner 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
such Contributors or Owner is a party or by which its assets are or may be
bound.
(4) Annexed hereto as Schedule 5.1 (d) is a true,
complete and correct schedule of all of the Leases. The Leases are valid and
bona fide obligations of the landlord and Tenants thereunder and are in full
force and effect. To the best of Contributors' knowledge, no defaults exist
thereunder and no condition exists which, with the passage of time or the giving
of notice or both, will become a default; the Leases constitute all of the
leases, tenancies or occupancies affecting the Real Property on the date hereof;
all Tenants have commenced occupancy; there are no agreements (other than the
Leases) which confer upon any Tenant or any other person or entity any rights
with respect to the Property, nor is any Tenant entitled now or in the future to
any concession, rebate, offset, allowance or free rent for any period, nor has
any such
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claim been asserted by any Tenant. Contributors shall, at their sole cost and
expense, obtain a certificate of occupancy for RxKinetix promptly after the
Closing.
(5) Annexed hereto as Schedule 5.1(e) (the "Rent Roll")
is a listing of the following, which is true, complete and correct in all
respects for the Building: (i) the name of each Tenant; (ii) the fixed rent
actually being collected; (iii) the expiration date or status of each Lease
(including all rights or options to renew); (iv) the Security Deposit, if any;
(v) whether there is any guaranty of a Tenant's obligations from a third party,
and if so the nature of said guaranty; (vi) any written notices given by any
Tenant of an intention to vacate space in the future; (vii) the base year(s) and
base year amounts for all items of rent or additional rent billed to each Tenant
on that basis; and (viii) any arrearages of any Tenant beyond thirty (30) days.
(6) To the knowledge of Contributors, Owner has
performed all of the obligations and observed all of the covenants required of
it as landlord under the terms of the Leases. Except as set forth on Schedule
5.1(f) annexed hereto, all work, alterations, improvements or installations
required to be made for or on behalf of all Tenants under the Leases have in all
respects been carried out, performed and complied with, and there is no
agreement with any Tenant for the performance of any work to be done in the
future, and no continuing obligations or liabilities by Owner, as landlord under
the Leases. To the knowledge of Owner and Contributors, except as set forth on
Schedule 5.1(f), no work has been performed at any Building which would require
an amendment to the certificate of occupancy for such Building for which an
amendment has not been obtained, and any and all work performed at the Real
Property to the date hereof and to the Closing Date has been and will be in
accordance with the rules, laws and regulations of all applicable authorities.
All bills and claims for labor performed and materials furnished to or for the
benefit of the Property arising prior to the Closing Date will be paid in full
by Owner within customary time periods, not to exceed forty-five (45) days from
the receipt of an invoice by Owner.
(7) There are no service contracts, union contracts,
employment agreements or other agreements affecting the Property or the
operation thereof, except the Service Contracts and other contracts and
agreements set forth on Schedule 5.1(g) annexed hereto. All of the Service
Contracts are and will on the Closing Date be unmodified and in full force and
effect without any material default or claim of material default by any of the
parties thereto. All sums presently due and payable by Owner under the Service
Contracts have been fully paid and all sums which become due and payable between
the date hereof and the Closing Date shall be fully paid by Owner within
customary time periods, not to exceed forty-five (45) days from the receipt of
an invoice by Owner. All of the Service Contracts may be terminated on not more
than sixty (60) days notice without the payment of any fee or penalty, and the
representation contained in this sentence is not subject to being modified by
the limitations of Section 5.5. There are no employees of Owner, or any
affiliate thereof, working at or in connection with the Real Property pursuant
to any of the Service Contracts, other contracts and/or employment agreements
except as set forth on Schedule 5.1(g).
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(8) Except as set forth on Schedule 5.1(h) annexed
hereto, there are no actions, suits, labor disputes, litigation or proceedings
currently pending or, to the knowledge of Owner or Contributors, threatened
against or related to Owner or any of the any of the Contributors or all or any
part of the Property or Owner, the environmental condition thereof, or the
operation thereof.
(9) Except as set forth on Schedule 5.1(i) annexed
hereto, neither Owner nor any of the Contributors has received written notice of
and neither has any knowledge of (i) any pending or contemplated annexation or
condemnation proceedings, or private purchase in lieu thereof, affecting or
which may affect the Real Property or any part thereof, (ii) any proposed or
pending proceeding to change or redefine the zoning classification of all or any
part of the Real Property, (iii) any proposed or pending special assessments
affecting the Real Property or any portion thereof, (iv) any penalties or
interest due with respect to real estate taxes assessed against the Real
Property, or (v) any proposed changes in any road or grades with respect to the
roads providing a means of ingress and egress to the Real Property. Contributors
agree to furnish MCRLP with a copy of any such notice received within two (2)
business days after receipt.
(10) Contributors have provided MCRLP with all reports
in the possession of Owner, Contributors, its counsel or consultants, or under
their control, related to the physical condition of the Real Property.
(11) Except as set forth on Schedule 5.1(k) annexed
hereto, Contributors have no knowledge of any notices, suits, or judgments
relating to any violations (including environmental) of any laws, ordinances or
regulations affecting the Real Property, or any violations or conditions that
may give rise thereto, and have no reason to believe that any agency, board,
bureau, commission, department or body of any municipal, county, state or
federal governmental unit, or any subdivision thereof, having, asserting or
acquiring jurisdiction over all or any part of the Real Property or the
management, operation, use or improvement thereof (collectively, the
"Governmental Authorities" or "Governmental Authority" as the context requires)
contemplates the issuance thereof, and there are no outstanding orders,
judgments, injunctions, decrees or writ of any Governmental Authorities against
or involving Owner, any of the Contributors or the Real Property. For purposes
of this Agreement, the term "Governmental Authority" shall also include the
Internal Revenue Service and any other federal, state, local or foreign taxing
authority.
(12) There are no employees of Owner or the Contributors
or any affiliates thereof working at or in connection with the Real Property
except as set forth on Schedule 5.1(l).
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(13) Annexed hereto as Schedule 5.1(m) is a schedule of
all leasing commission obligations affecting the Property. The respective
obligations of Owner, Contributors and MCRLP with respect to said commissions
are set forth in Section 13.
(14) Neither Owner nor any of the Contributors 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 Owner's or
Contributor's creditors, suffered the appointment of a receiver to take
possession of all, or substantially all, of Owner's or Contributor's assets,
suffered the attachment or other judicial seizure of all, or substantially all,
of Owner's or 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.
(15) Except as set forth on Schedule 5.1(o), the
Personal Property is now owned and will on each of the Closing Date be owned by
Owner or the Contributors free and clear of any conditional bills of sale,
chattel mortgages, security agreements or financing statements or other security
interests of any kind.
(16) Intentionally Deleted.
(17) Intentionally Deleted.
(18) Intentionally Deleted.
(19) Contributors have no knowledge that any part of the
Real Property has been designated as wetlands or any other word of similar
purport or meaning under the Federal Water Pollution Control Act, 33 U.S.C.
ss.1251 et seq.; the Colorado Water Quality Control Act, Colo. Rev. Stat.
Section 25-8-101 et seq; or any other applicable federal, state, county or
municipal statute, ordinance, rule, regulation, order or code.
(20) To the best of Contributors' knowledge, there are
no active or inactive aboveground or underground storage tanks or vessels or
associated piping at the Real Property, regardless of whether or not such tanks
or vessels are regulated tanks or vessels, except as set forth on Schedule
5.1(t).
(21) Contributors have no knowledge of outstanding
requirements or recommendations by (i) any insurance company currently insuring
the Property; (ii) any board of fire underwriters or other body exercising
similar functions; or (iii) the holder of any mortgage encumbering any of the
Property, which require or recommend any repairs or work of a material nature to
be done on the Property.
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(22) The financial statements, including the income and
expense statements and the balance sheets of Owner, the Contributors and their
affiliates, excluding only those assets, liabilities and operations not
contemplated to be contributed pursuant to this Agreement, relating to Owner's
ownership and operation of the Property and the related statement of income,
member's capital and cash flows, including the footnotes thereto (the "Property
Financials") as of and for the years ending December 31, 1995, 1996 and 1997,
fairly present the combined financial position of Owner and Contributors
relating to the Property as of such dates and the results of operations and cash
flows of Owner and the Contributors relating to the ownership and operation of
the Property for such respective periods. The Property Financials from January
1, 1998, through the most recent month ending prior to the Closing Date, fairly
present the combined financial position of the Property relating to the
ownership and operation of the Property as of such date (subject to the normal
year-end adjustments described in Schedule 5.1(v)) and with all interim
financial statements of the Property heretofore delivered to MCRLP on behalf of
Owner and the Contributors. Except as set forth on the Property Financials,
there are no other direct or indirect indebtedness, liability, claim or loss
that accrued prior to Closing, whether known or unknown, fixed or unfixed,
choate or inchoate, liquidated or unliquidated, secured or unsecured, accrued,
absolute, contingent or otherwise, whether or not of a kind required by GAAP to
be set forth on the Property Financials or the notes thereto, including, without
limitation, indebtedness for borrowed money (collectively, "Liabilities").
(23) Except as set forth in Schedule 5.1(w), Owner does
not maintain any 401(k) savings plans, pension plans, multi-employer plans (as
defined in Section 3(37) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), employee benefit plans (as defined in ERISA) or employee
welfare plans providing for benefits to Owner employees (each, an "Employer
Plan"). From and after the date hereof, the Contributors shall not cause or
permit Owner to adopt an Employer Plan. Mack-Cali shall have no liability to any
current or former employees of Contributor or any affiliate thereof, including,
without limitation, any liabilities which may arise as a result of the
consummation of the transactions contemplated by this Agreement, under any plans
or programs listed on Schedule 5.1(w), or arising under applicable Federal or
state law, including, without limitation, under the Worker Adjustment and
Retraining Nonfiction Act (WARN) and Consolidated Omnibus Budget Reconciliation
Act of 1985 (COBRA).
(24) Intentionally Deleted.
(25) Except as disclosed in the Phase I Reports or
otherwise set forth in Schedule 5.1(y):
(a) To the best of Contributors' knowledge, no
Governmental Authority has demanded in writing, addressed to Owner, Contributors
or any of its affiliates, counsel or agents, that any Contaminants (as defined
herein) be cleaned up or
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environmentally remediated at any Real Property, which has not been cleaned up
or environmentally remediated.
(b) To the best of Contributors' knowledge, no
Contaminants have been Discharged (as hereinafter defined) which would allow a
Governmental Authority to demand that a cleanup be undertaken.
(c) To the best of Contributors' knowledge, no
ss.104(e) informational request, issued pursuant to CERCLA (as hereinafter
defined) with respect to the Real Property has been received by Contributors or
Owner.
(d) To the best of Contributors' 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.
(e) To the best of Contributors' knowledge, there
is no asbestos or asbestos containing material requiring remediation under
Environmental Laws (as hereinafter defined) on the Real Property, except as set
forth on Schedule 5.1(y).
(f) To the best of Contributor's knowledge, all
transformers and capacitors containing polychlorinated biphenyls ("PCBs") , and
all "PCB Items", as defined in 40 CFR, ss.761.3, located on or affecting the
Real Property, are identified in Schedule 5.1(y) and are in compliance with all
Environmental Laws.
(g) To the best of Contributors' knowledge, Owner
and the Contributors have all material certificates, licenses and permits (the
"Permits"), including without limitation, environmental Permits, required to
operate the Real Property. To the best of Contributors' 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, as the case
may be, without additional payment by MCRLP, and shall, upon Closing, be
transferred to MCRLP by Contributors and Owner.
(h) To the best of Contributors' knowledge, the
Real Property has not been used during the period of Owner's ownership as solid
wastes disposal sites and facilities as defined in the Colorado Solid Wastes
Disposal Sites and Facilities Law, Colo. Rev. Stat. Section 30-20-100.5 et seq.
and the regulations promulgated thereunder.
(i) To the best of Contributors' knowledge, there
are no engineering or institutional controls at the Real Property, including
without limitation, any deed notice, declaration of environmental restriction,
groundwater classification exception area, well
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restriction area or other notice or use limitations pursuant to Colo. Rev. Stat.
Section 25-15-208 et seq. and the regulations promulgated thereunder.
(j) Neither Owner nor any of the Contributors have
transported any Contaminants from the Real Property to another location in
violation of Environmental Laws.
(k) To the best of Contributors' knowledge, there
are no federal or state liens, as referenced under CERCLA and the regulations
promulgated thereunder, or under any other applicable Environmental Law that
have attached to the Real Property.
(l) Contributors and Owner have provided MCRLP
with all environmental site assessments, investigations, and documents and all
other Environmental Documents (as that term is defined below) in their
possession or under their control and shall continue to do so after execution of
this Agreement promptly upon its receipt.
(m) For purposes of this Agreement, the following
words shall have the respective meaning set forth below:
(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 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.
(ii) "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.
(iii) "Environmental Documents" shall mean
all environmental documentation in the possession or under the control of Owner
or the Contributors 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,
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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" 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.
(26) Owner and each Contributor shall have timely paid
all Taxes (as defined herein) due and payable on or prior to the Closing Date.
Owner and each Contributor shall have timely filed all Tax Returns (as defined
herein) required to be filed on or prior to the Closing Date. Each such Tax
Return is complete and accurate in all respects. Owner and each Contributor
shall have timely paid or will timely pay, or shall have provided for or will
provide for a cash reserve for the payment of, all Taxes due and payable on or
after the Closing Date for all taxable periods (or portions thereof) ending on
or prior to the Closing Date (a "Pre-Closing Tax Period" or "Pre-Closing Tax
Periods"). Owner and each Contributor shall timely file all Tax Returns which
relate to all Pre-Closing Tax Periods but which are required to be filed after
the Closing Date. Each such Tax Return will be complete and accurate in all
respects. True and complete copies of all Tax Returns filed by Owner and each
Contributor for taxable periods beginning on or after January 1, 1994, and all
written communications relating thereto, have been, or will be upon request,
delivered to Mack-Cali. Owner has also provided, or will also provide upon
request, to Mack-Cali copies of: (i) any letter ruling, determination letter or
similar document issued to Owner by any Governmental Authority, and (ii) any
closing or other agreement entered into by Owner with any Government Authority.
Except as set forth on Schedule 5.1(z), there are no ongoing Audits or Audits
pending or, to the knowledge of Owner or any Contributors against the Property,
any Contributors or Owner. There are no agreements or waivers extending the
statutory period of limitations with respect to any such Tax Returns or for the
assessment or collection of any such Taxes. No claim has ever been made by a
Governmental Authority in a jurisdiction where Owner or any Contributor does not
file Tax Returns that it is or may be subject to taxation by that jurisdiction.
(27) Annexed hereto as Schedule 5.1(aa) is a listing,
for federal income tax purposes, of the following information, which is true,
complete and correct in all aspects for each item of Property contributed
through each Contributor's Interest: (i) its adjusted basis as of the first day
of Owner's taxable year which includes the Closing Date; (ii) the date placed in
service; (iii) the depreciation method; and (iv) the remaining useful life.
(28) Subject to the provisions of Section 5.5, no
representation or warranty made by Owner or any Contributor contained in this
Agreement contains any untrue statement of a material fact or omits to state any
material fact necessary, in light of the
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circumstances under which it was made, in order to make the statements herein
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.
(29) As used throughout this Agreement, the phrases "to
Contributor's knowledge," "to the knowledge of Contributor," "to the best of
Contributor's knowledge" "to Owner's knowledge," "to the knowledge of Owner,"
"to the best of Owner's knowledge" or any similar derivation thereof, shall mean
the actual (not constructive) knowledge of Terrence Claassen, David Goldberg,
Chetter Latcham, Steve Leonard, Rich Majors, Adel Nassif, Chuck Peck and Della
Wegman, without having undertaken any independent investigation of facts or
legal issues without having any duty to do so, and without imputing to the
aforementioned persons the knowledge of any employee, agent, representative or
affiliate of Contributors or of any other person or entity.
(30) Annexed hereto as Schedule 5.1(dd)(i) is a true,
complete and correct copy of Owner's operating agreement, as amended to date,
and same shall be unchanged and in effect on the Closing Date. Annexed hereto as
Schedule 5.1(dd)(ii) is a filed copy of the articles of organization of Owner.
(31) Contributors have good and marketable title to one-
hundred (100%) percent of Owner and 100% of Contributors' Interests, free of all
liens and encumbrances whatsoever.
(32) Contributors have the power and authority to own
their respective Contributors' Interests and to conduct and transact their own
business and the business of Owner.
(33) The contribution of Contributors' Interests
pursuant to this Agreement is authorized and within the power of each
Contributor and is legal and will not conflict with, result in any breach of any
of the provisions of, or constitute a default under the provisions of Owner's
operating agreement or other instrument to which any Contributor is a party or
by which any Contributor may be bound.
(34) Neither MCRLP, nor Mack-Cali shall be responsible,
as a consequence of the contribution intended hereby, for any obligation
(including any Taxes) of Owner or Contributor or for any liability, debt or
obligation (including any Taxes) of Owner or Contributor to any third party
including, without limitation, any employees of Owner or Contributor or any
Employer Plan accruing during the period prior to Closing (and Contributor
hereby agrees to indemnify, defend and hold MCRLP and Mack-Cali harmless from
and against any such liability, debt or obligation, including any Taxes and
reasonable attorney's fees), except for any obligations or liabilities of Owner
or Contributor subject to which MCRLP or Mack-Cali has expressly agreed
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to accept the assignment of Contributor's Interests and accruing during the
period following Closing. The representations and the indemnity set forth herein
shall be deemed to be material to MCRLP and Mack-Cali's obligation to perform
hereunder and shall survive the Closing.
(35) After the Closing, Contributors shall not be
entitled to receive from Owner any distribution or payment of indebtedness or
for any other reason whatsoever, except for cash and receivables with respect to
rent under the Leases for the period occurring prior to Closing to the extent
Contributor is entitled to same under Article 11, as of the date of Closing,
which shall be paid to Contributors.
ii. Intentionally Deleted.
iii. All representations and warranties made in this Agreement
by Owner and the Contributors and those representations and warranties made by
the Contributors and the Contributor Unit Holders in the certificate executed by
each and delivered pursuant to Exhibit 10.2(ee) shall survive the Closing Date
for a period of one (1) year, except that the representations and warranties set
forth in clauses (a), (c), (w), (z) and (dd) through (hh) of Section 5.1 shall
survive such Closing Date for the applicable period of the statute of
limitations (unless otherwise specified herein), and shall not be merged in the
Interest Assignments. Notwithstanding the foregoing, to the extent that a Tenant
shall certify in its Estoppel Certificate (as defined below) as to any of the
matters which are contained in the representations and warranties made by Owner
and/or Contributors in Section 5.1(f) of this Agreement, then such
representations and warranties as to such matters shall be of no further force
or effect to the extent of any conflict. Apollo Real Estate Investment Fund II,
L.P., a Delaware limited partnership; Pacifica Holding Company, a Colorado
corporation; and Pacifica Holding Company, a Colorado limited liability company
(collectively, "Guarantor"), and Contributors, jointly and severally, shall,
pursuant to a separate indemnity agreement (the "Indemnity Agreement") in the
form attached hereto as Exhibit 5.3, indemnify and defend MCRLP and Mack-Cali,
and to hold MCRLP and Mack-Cali 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 MCRLP by reason of or resulting from any
breach, inaccuracy, incompleteness or non-fulfillment of the representations,
warranties, covenants and agreements of Owner and Contributors contained in this
Agreement to the full extent Owner or the Contributors would be liable therefor
under the terms of this Agreement. The foregoing indemnity shall be deemed to be
material to MCRLP and Mack-Cali's obligation to perform hereunder and shall
survive the Closing. Notwithstanding the foregoing, Steven C. Leonard IRA,
Cynthia O. Leonard IRA, Steven Ohren IRA and the members of Contributors shall
have no liability for any loss resulting from any breach of the foregoing
representations and warranties. In addition, except as set forth in Section 28,
MCRLP and Mack-Cali shall not have a right to bring a claim against Contributors
by virtue of any of the representations or warranties being false or misleading
unless and until the aggregate damages to MCRLP and/or Mack-Cali are reasonably
expected to exceed $100,000.00, but thereafter MCRLP
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and/or Mack-Cali may bring a claim against Contributors for the entire amount of
its aggregate damages.
iv. Each Contributor acknowledges that it is not in a
significantly disparate bargaining position with respect to MCRLP or Mack-Cali
in connection with the transaction contemplated by this Agreement and that such
Contributor was represented by legal counsel in connection with this
transaction.
v. Mack-Cali and MCRLP each acknowledges that it has had, or
will have had, as of the Closing, sufficient time to review all materials and
information set forth in Schedule 5.5, and sufficient time and access to review
and investigate the Property. Notwithstanding any other provision of this
Agreement, except as set forth in Subsections 5.1(d), (e) and (f) as they relate
to the Leases, the Estoppels and the Rent Rolls, the representations and
warranties of Owner and Contributors as set forth herein or in each
Contributor's Closing Certificate are hereby modified to be made true to the
extent that, as of the date hereof with respect to the representations and
warranties made herein, and as of the Closing Date with respect to the
representations and warranties made by Owner and each Contributor as of the
Closing Date, (i) information contained in the records made available as set
forth Schedule 5.5 no longer makes the subject representation or warranty not
true, whether or not either Mack-Cali or MCRLP has actual knowledge of such
information, or (ii) either Mack-Cali or MCRLP has knowledge that the subject
representation or warranty is untrue, or (iii) Contributors have delivered or
made available to any of the individuals described in Section 6.1(l) other
written information disclosing that the subject representation or warranty is
not true, whether or not either Mack-Cali or MCRLP has actual knowledge of such
information.
f. REPRESENTATIONS AND WARRANTIES OF MACK-CALI AND MCRLP.
i. In order to induce Contributors to perform as required
hereunder, Mack-Cali and MCRLP hereby jointly and severally warrant and
represent the following:
(1) (i) MCRLP 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 MCRLP
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.
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(b) Mack-Cali is a duly organized and validly
existing corporation organized and in good standing under the laws of the State
of Maryland, has all requisite power and authority to execute and deliver this
Agreement and all other documents and instruments to be executed and delivered
by it hereunder, and to perform its obligations hereunder and under such other
documents and instruments in order to permit MCRLP to acquire the Property in
accordance with the terms and conditions hereof. All necessary actions of the
board of directors of Mack-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.
(2) This Agreement and the agreements and other
documents to be executed and delivered by each of Mack-Cali and MCRLP hereunder,
when duly executed and delivered, will be the legal, valid and binding
obligation of each of Mack-Cali and MCRLP, enforceable in accordance with the
terms of this Agreement. The performance by each of Mack-Cali and MCRLP 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 Mack-Cali and MCRLP 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 Mack-Cali and MCRLP is a party or by which each of its assets
are or may be bound.
(3) The Contributor Units to be issued to Contributors
and/or the Unit Holders are duly authorized and, when issued by MCRLP, will be
fully paid and non-assessable, free and clear of any mortgage, pledge, lien,
encumbrance, security interest, claim or rights of interest of any third party
of any nature whatsoever. The shares of Common Stock to be issued by Mack-Cali
upon redemption of the Contributor Units will be reserved for future listing
with the New York Stock Exchange prior to the date upon which any of the same
will be 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.
(4) MCRLP has furnished to Contributors a true and
complete copy of the OP Agreement, as amended to date.
(5) Mack-Cali has caused to be delivered to Contributors
copies of the OP Agreement. The SEC Documents were, and those additional
documents filed between the date hereof and the Closing will be, prepared and
filed in compliance with the rules and regulations promulgated by the SEC, and
do not and will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein in order to make the
statements contained therein, in light of the circumstances under which they
were made or will be made, not misleading.
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(6) The consolidated financial statements included in
the SEC Documents have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the period involved
(except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Form 10-Q) and present fairly (subject, in
the case of the unaudited statements, to normal, recurring year-end audit
adjustments) the consolidated financial position of Mack-Cali and its
Subsidiaries at the dates thereof and the consolidated results of operations and
cash flows for the periods then ended. For purposes of this Agreement,
"Subsidiaries" shall mean (i) any entity of which Mack-Cali (or other specified
entity) shall own directly or indirectly through a subsidiary, a nominee
arrangement or otherwise (x) at least a majority of the outstanding capital
stock (or other shares of beneficial interest), or (y) at least a majority of
the partnership, joint venture or similar interests; and (ii) any entity in
which Mack-Cali (or other specified entity) is a general partner or joint
partner, including without limitation MCRLP. "Subsidiaries" shall specifically
exclude Mack-Cali Services, Inc. and The Grove Street Urban Renewal Corp., which
are the only non-qualified REIT subsidiaries of Mack-Cali as of the date hereof.
(7) No action, suit, claim, investigation or proceeding,
whether legal or administrative or in mediation or arbitration, is pending or,
to the best of each of Mack-Cali's and MCRLP's knowledge, threatened, at law or
in equity, against either of Mack-Cali or MCRLP before or by any court or
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality which would prevent either of Mack-Cali or
MCRLP from performing its respective obligations pursuant to this Agreement.
(8) The execution and delivery of this Agreement and the
performance by each of Mack-Cali and MCRLP 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 Mack-Cali or MCRLP, including
without limitation, the United States of America, the States of New York and New
Jersey or any political subdivision of any of the foregoing, or any decision or
ruling of any arbitrator to which Mack-Cali or MCRLP is a party or by which
Mack-Cali or MCRLP is bound or affected.
(9) (1) Mack-Cali (A) 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 ("REIT") within the meaning of Section 856 of the Internal
Revenue Code of 1986, as amended (the "Code"), (B) has complied with all
applicable provisions of the Code which would have enabled it to qualify as a
REIT for 1995 and 1996, (C) has operated, and intends to continue to operate, in
such a manner so as to enable it to qualify as a REIT for 1998 and subsequent
years, and (D) has not taken or omitted to take any action which would
reasonably be expected to cause its disqualification as a REIT, and no challenge
to its REIT status is pending or, to Mack-Cali's knowledge, threatened.
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(2) Mack-Cali has timely filed with the
appropriate Governmental Authority all Tax Returns required to be filed by it or
has timely requested extensions and any such request has been granted and has
not expired. Each such Tax Return is true and correct in all material respects.
All Taxes shown as owed by Mack-Cali or any of its Subsidiaries on any Tax
Return have been paid or accrued, except for Taxes being contested in good faith
and for which adequate reserves have been established. None of Mack-Cali or any
of its Subsidiaries has executed or filed with the Internal Revenue Service or
any other taxing authority any agreement now in effect extending the period for
assessment or collection of any Tax.
(3) To its knowledge, as of the date hereof, Mack-
Cali is a "domestically-controlled" REIT within the meaning of Section
897(h)(4)(B) of the Code.
(10) All of Mack-Cali's real property and other material
assets are owned by Mack-Cali indirectly through its ownership of MCRLP and
MCRLP's Subsidiaries.
(11) Neither Mack-Cali nor MCRLP 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
Mack-Cali's or MCRLP's creditors, suffered the appointment of a receiver to take
possession of all, or substantially all, of Mack-Cali's or MCRLP's assets,
suffered the attachment or other judicial seizure of all, or substantially all,
of Mack-Cali's or MCRLP'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.
(12) As used throughout this Agreement, the phrases "to
Mack-Cali's knowledge," "to the knowledge of Mack-Cali," "to the best of
Mack-Cali's knowledge" "to MCRLP's knowledge," "to the knowledge of MCRLP," "to
the best of MCRLP's knowledge" or any similar derivation thereof, shall mean the
actual (not constructive) knowledge Tim Jones, John DeBari, Daniel Wagner,
Andrew Greenspan, Roger W. Thomas, and Terry Noyes, without having undertaken
any independent investigation of facts or legal issues without having any duty
to do so, and without imputing to the aforementioned persons the knowledge of
any employee, agent, representative or affiliate of Mack-Cali, MCRLP or of any
other person or entity.
ii. Each of Mack-Cali and MCRLP 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
Mack-Cali and MCRLP were represented by legal counsel in connection with this
transaction.
iii. All representations and warranties made by Mack-Cali and
MCRLP in this Agreement shall survive the Closing Date for a period of eighteen
(18) months, except that the representations and warranties set forth in clauses
(a) and (b) of Section 6.1 shall
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survive the Closing Date for the applicable period of the statute of limitations
(unless otherwise specified herein), and shall not be merged in the Assignment
of Contributor's Interest. Mack-Cali and MCRLP agree to indemnify and defend
Contributors, and to hold Contributors 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 Contributors by reason of or
resulting from any breach, inaccuracy, incompleteness or non-fulfillment of the
representations, warranties, covenants and agreements of Mack-Cali and MCRLP
contained in this Agreement. Notwithstanding the foregoing, the partners and/or
shareholders of MCRLP and Mack-Cali shall have no liability for any loss
resulting from any breach of the foregoing representations and warranties. In
addition, Contributors shall not have a right to bring a claim against Mack-Cali
or MCRLP by virtue of any of the representations or warranties being false or
misleading unless and until (a) such false or misleading representation or
warranty has a material adverse affect on the transactions contemplated herein;
and (b) the aggregate damages to Contributors is reasonably expected to exceed
$100,000.00, but thereafter Contributors may bring a claim against Mack-Cali or
MCRLP for the entire amount of their aggregate damages.
g. INTERIM OPERATING COVENANTS OF CONTRIBUTORS.
i. Contributors covenant and agree that between the date
hereof and the Closing Date (the "Interim Period"), they shall perform or
observe or cause Owner to perform or observe the following with respect to the
Real Property:
(1) Owner will complete any capital expenditure program
currently in process or anticipated to be completed. Owner and Contributors 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.
(2) Owner, as landlord, will not enter into any new
leases with respect to the Property, or renew or modify any Lease, without
MCRLP's prior written consent; provided, however that Owner shall be permitted
to enter into new leases, renewals or modifications upon prior notice to, but
without the prior written consent of MCRLP, so long as such lease, renewal or
modification is on market terms and conditions with bona fide third parties and
is the type of transaction which Owner currently enters into in the ordinary
course of its business.
(3) Owner shall comply with and/or remedy all violations
of statutes, ordinances, rules, regulations, orders, codes, directives or
requirements affecting the Real Property, whether or not such violations are now
noted in the records of or have been issued by any Governmental Authorities
prior to the Closing, and the Real Property shall be conveyed free of any such
violations, including, without limitation, violations of Environmental Laws.
(4) Neither Owner nor any Contributors shall:
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(a) Enter into any agreement requiring Owner to do
work for any Tenant after the Closing Date without first obtaining the prior
written consent of MCRLP, unless such agreement is on market terms and
conditions with bona fide third parties and is the type of agreement which Owner
currently enters into in the ordinary course of its business, in which case no
consent of MCRLP will be required; or
(b) Accept the surrender of any Service Contract
or Lease, or grant any concession, rebate, allowance or free rent, except in its
ordinary course of business on market terms, with bona fide third parties and
upon prior written notice to MCRLP.
(c) Intentionally Deleted.
(5) Owner shall not, between the date hereof and the
Closing Date, apply any Security Deposits with respect to any Tenant in
occupancy on the Closing Date, except in its ordinary course of business. Owner
and Contributors shall provide MCRLP with an updated schedule of Security
Deposits at the Closing.
(6) Between the date hereof and the Closing Date, Owner
will not renew, extend or modify any of the Service Contracts without the prior
written consent of MCRLP unless such is done by Owner in the ordinary course of
its business and such Service Contracts contain a right to terminate on thirty
(30) days' notice with no material cost to exercise such right, in which case no
consent of MCRLP will be required.
(7) Owner and Contributors shall not remove or permit
the removal of any Personal Property located in or on the Property, except as
may be required for repair and replacement. All replacements shall be free and
clear of liens and encumbrances except to the extent the original Personal
Property was so encumbered and shall be of quality at least equal to the
replaced items and shall be deemed included in this sale, without cost or
expense to MCRLP, other than expressly provided herein.
(8) Owner and Contributors shall, upon request of MCRLP
at any time after the date hereof, assist MCRLP in its preparation of audited
financial statements, statements of income and expense, and such other
documentation as MCRLP may reasonably request, covering the period of Owner's
ownership of the Real Property.
(9) Between the date hereof and the Closing Date, Owner
will make all required payments under any mortgage affecting the Real Property
within any applicable grace period, but without reimbursement by MCRLP therefor.
Owner shall also comply with all other material terms covenants and conditions
of any mortgage on the Real Property.
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(10) Owner shall not cause or permit the Real Property
or any interest therein (including without limitation the Improvements or the
Contributors' Interests), to be alienated, mortgaged, licensed, encumbered or
otherwise be transferred.
(11) Owner agrees to maintain and keep in full force and
effect the hazard, liability and casualty insurance policies it is currently
maintaining, which policies Contributors represent are sufficient 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.
(12) Owner and Contributors shall permit MCRLP and its
authorized representatives to inspect the Books and Records of their operations
at all reasonable times upon reasonable notice. All Books and Records not
conveyed to MCRLP hereunder shall be maintained for MCRLP's inspection at each
Contributor's address as set forth in Exhibit A hereto.
(13) Owner and Contributors shall:
(a) promptly notify MCRLP of, and promptly deliver
to MCRLP, a certified true and complete copy of any notice Owner or Contributors
may receive, on or before the Closing Date from any Governmental Authority
concerning a violation of Environmental Laws or Discharge of Contaminants;
(b) contemporaneously with the signing and
delivery of this Agreement, and subsequently promptly upon receipt by Owner or
its representatives, deliver to MCRLP a certified true and complete copy of all
Environmental Documents; and
(c) timely provide MCRLP 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 MCRLP
informed of all substantive negotiations and discussions with respect to the
foregoing matters on an on-going basis.
ii. Prior to the Closing, Contributors shall deliver to MCRLP
reviewed Property Financials as set forth in Section 5.1(v). Within thirty (30)
days after the Closing Date, Contributors shall deliver to MCRLP Property
Financials, as set forth in Section 5.1(v), through the Closing Date. The
provisions of this Section 7.2 shall survive the Closing Date.
iii. Intentionally Deleted.
iv. Intentionally Deleted.
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v. Owner and Contributors will timely pay all Taxes due and
payable by each of them during the Interim Period. Owner and Contributors will
timely file all Tax Returns required to be filed by them during the Interim
Period. Each such Tax Return will be complete and accurate in all respects and
will be filed on a basis consistent with past practice. A copy of all such Tax
Returns shall be delivered to Mack-Cali at least three (3) days prior to such
Tax Returns being filed. The obligations set forth in this Section 7.5 shall
survive the expiration or earlier termination of this Agreement and/or shall
survive the Closing Date for the applicable period of the statute of
limitations.
h. INTENTIONALLY DELETED.
i. ESTOPPEL CERTIFICATES.
i. Contributors agree to deliver to each Tenant, no later than
the date hereof, an estoppel certificate in the form annexed hereto as Exhibit
9.1 for Tenant's execution, completed to reflect Tenant's particular Lease
status. Contributors agree to use commercially reasonable efforts to obtain from
all Tenants the estoppel certificates in such form; provided, however, that if
any Tenant shall refuse to execute an estoppel letter in such form, Contributors
shall nevertheless use commercially reasonable efforts to obtain estoppel
certificates in the form in which each Tenant is obligated to deliver the same
as provided in its Lease. Contributors agree to deliver to MCRLP copies of all
estoppel letters received by Tenants, in the form received by Owner or
Contributors. The estoppel certificates required to be obtained pursuant to this
Section 9.1 are collectively referred to as the "Estoppel Certificates".
ii. As a condition to the Closing, Contributors shall deliver
(a) an Estoppel Certificate from all Tenants which lease 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
including the Tenants set forth in Clause 9.2(a) above.
iii. For an Estoppel Certificate to be deemed delivered for
purposes of this Agreement, it must certify that 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.
j. CLOSINGS.
i. (a) Closing. The consummation of the transactions
contemplated hereunder with respect to the Property (the "Closing") shall take
place at the offices of Brownstein, Hyatt, Farber & Strickland, P.C., 410
Seventeenth Street, 22nd Floor, Denver, Colorado, 80202-4437, on or about March
25, 1998 (the "Closing Date"). Upon notice to
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Contributors, MCRLP may elect to accelerate the Closing Date to a date not less
than five (5) days after the date of MCRLP's notice.
(2) Intentionally Deleted.
(3) Intentionally Deleted.
(4) Intentionally Deleted.
ii. On the Closing Date, except as otherwise set forth in
subsections 10.2(z) and 10.2(aa), Contributor, at its sole cost and expense,
will deliver or cause to be delivered to MCRLP the following documents, fully
executed by all parties thereto other than MCRLP or parties claiming by, through
or under MCRLP:
(1) Duly executed and acknowledged assignments from each
Contributor of such Contributor's Interest (the "Interest Assignments"), in the
form annexed hereto as Exhibit 10.2(a), to MCRLP or its designee, as assignee,
together with all applicable and requisite consents, mortgagee consents and
resolutions authorizing the assignment and transaction.
(2) All original Leases and all other documents
pertaining thereto, and certified copies of such Leases or other documents where
Contributors, using their best efforts, are unable to deliver originals of the
same.
(3) All other original documents or instruments referred
to herein, including without limitation the Service Contracts, Licenses and
Permits and Books and Records, and certified copies of the same where
Contributors, using their best efforts, are unable to deliver originals of the
same.
(4) Intentionally Deleted.
(5) Intentionally Deleted.
(6) Duly executed and acknowledged Omnibus Assignment in
the form of Exhibit 10.2(f).
(7) Intentionally Deleted.
(8) Affidavits and indemnities required by the Title
Company in connection with non-imputation title insurance endorsements and such
other documents and instruments required by the Title Company, executed by
Contributors certifying (i) against any work done or supplies delivered to the
Real Property which might be grounds for a materialman's
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or mechanic's lien under or pursuant to Colorado Lien Law, in form sufficient to
enable the Title Company to affirmatively insure MCRLP against any such lien,
(ii) that the signatures on the Interest Assignments are sufficient to bind
Contributors and convey the Contributors' Interest to MCRLP, (iii) the Rent
Roll, and (iv) that Contributors shall indemnify the Title Company against any
loss resulting from the imputation of knowledge to MCRLP, or Mack-Cali through
Contributors.
(9) Affidavits and other instruments, including but not
limited to all organizational documents of Owner and Owner's members, as
applicable, including Owner's operating agreements, filed copies of the articles
of organization and good standing certificates (or its equivalent), reasonably
requested by MCRLP and the Title Company evidencing the power and authority of
Owner and Contributors to enter into this Agreement and any documents to be
delivered hereunder, and the enforceability of the same.
(10) The original Estoppel Certificates.
(11) 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 MCRLP to realize upon the same and as may
be required by the issuing banks of any cash and non-cash security deposits to
reflect a change in the beneficial interest of the Owner and changes in
signatories to the bank accounts holding the cash and non-cash security
deposits.
(12) A certificate indicating that the representations
and warranties of Owner and Contributors made in this Agreement are true and
correct as of the Closing Date or if there have been any changes, a description
thereof.
(13) A Rent Roll for the Property, current as of the
Closing Date, certified by Owner and Contributors as being true and correct in
all material respects.
(14) All proper instruments as shall be reasonably
required for the conveyance to MCRLP of all right, title and interest, if any,
of Owner and Contributors 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 and Improvements.
(15) In order to avoid the imposition of the withholding
tax payment pursuant to Section 1445 of the Code, a certificate which is in a
form acceptable to Mack-Cali and which is signed by each Contributor (or an
appropriate officer of each Contributor that is
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an entity) to the effect that such Contributor is not a "foreign person" as that
term is defined in Section 1445(f)(3) of the Code.
(16) All such transfer and other tax declarations and
returns and information returns, duly executed and sworn to by Contributors as
may be required of Contributors by law in connection with the transfer of
Contributors' Interests to MCRLP, including but not limited to, Internal Revenue
Service forms and the declaration required to be filed pursuant to Title 39,
Article 14 of the Colorado Revised Statutes.
(17) A statement setting forth all adjustments and
prorations shown thereon.
(18) A Tradenames Assignment Agreement substantially in
the form of Exhibit 10.2(r).
(19) Estoppel certificates addressed to MCRLP from the
mortgagees of the mortgages, if any, in form and substance reasonably acceptable
to MCRLP.
(20) An opinion of counsel from Brownstein, Hyatt,
Farber & Strickland, P.C., substantially in the form of Exhibit 10.2(t)
regarding the due execution, delivery, and enforceability of this Agreement, the
foregoing documents and the contribution by each Contributor of its
Contributor's Interest to MCRLP.
(21) Duly executed and acknowledged Indemnity Agreement
substantially in the form of Exhibit 5.3.
(22) Intentionally Deleted.
(23) A Registration Rights Agreement substantially in
the form of Exhibit 10.3(g).
(24) Intentionally Deleted.
(25) Such other documents as may be reasonably required
by MCRLP or as may be appropriate to effectuate the consummation of the
transactions contemplated by this Agreement.
(26) At least fifteen (15) days prior to the Closing
Date, a schedule setting forth, with respect to each Contributor that will
receive Contributor Units as part of the consideration: (i) the identity of such
Contributors and the amount of Contributor Units so allocated to any such
Contributor; (ii) the gross fair market value of the interest that such
Contributor
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is transferring to MCRLP for purposes of determining the gain or loss that will
be recognized for federal income tax purposes as a result of the transfer; (iii)
the adjusted basis of such interest immediately prior to the contribution; (iv)
the amount of cash and Contributor Units allocated to such interest; and (v) the
amount of any liability relating to such interest that MCRLP will either assume
or to which such interest will be subject and which does not constitute a
"qualified liability" within the meaning of Treasury Regulations Section
1.707-5(a)(6).
(27) At least fifteen (15) days prior to the Closing
Date, a schedule setting forth: (i) any Contributor named for purposes of
Section 10.2(z)(i) which is to receive less than the full amount of Contributor
Units indicated for purposes of Section 10.2(z)(i); and (ii) the names of those
persons who are to receive Contributor Units that each such Contributor would
otherwise be entitled to receive and the amount of units that any such persons
are to receive. At least fifteen (15) days prior to the Closing Date, each
Contributor to which this Section 10.2(aa) is relevant shall issue "direction
letters" to MCRLP (in the form acceptable to MCRLP), to the effect that each
such Contributor authorizes the issuance by MCRLP of Contributor Units directly
to such persons (and in such amounts) which are set forth for purposes of
Section 10.2(aa)(ii).
(28) A letter from each applicable municipal department
or agency having jurisdiction that the Property is in compliance with the laws,
codes, rules, regulations and ordinances regarding (i) zoning, (ii) building,
(iii) health and (iv) fire, life and safety.
(29) A computer diskette containing any closing or other
documents executed in connection with this transaction and prepared by Owner,
Contributors or their counsel, in WordPerfect or Microsoft Word format.
(30) All original organizational documents relating to
Owner and the Contributors, and all statements of accounts, books and records
and insurance policies.
(31) A certificate executed by each Contributor Unit
Holder and each Contributor receiving Contributor Units, substantially in the
form of Schedule 10.2(ee).
(32) A counterpart to the OP Agreement substantially in
the form of Exhibit 10.2(ff), executed by each Contributor Unit Holder and each
Contributor receiving Contributor Units.
iii. On the Closing Date, Mack-Cali and MCRLP, at their sole
cost and expense, will deliver or cause to be delivered to Contributors the
following documents, fully executed by all parties thereto other than
Contributors or parties claiming by, through or under Contributors:
(1) The Cash Payment, net of adjustments and prorations.
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(2) The Permanent Certificates representing, in the
aggregate, the Contributor Units.
(3) Intentionally Deleted.
(4) Duly executed and acknowledged Omnibus Assignment in
the form of Exhibit 10.2(f) annexed hereto.
(5) A certificate indicating that the representations
and warranties of Mack-Cali and MCRLP made in this Agreement are true and
correct as of the Closing Date or if there have been any changes, a description
thereof.
(6) Affidavits and other instruments, including but not
limited to all organizational documents of Mack-Cali and MCRLP including limited
partnership agreements, filed copies of limited partnership certificates,
articles of organization, and good standing certificates, reasonably requested
by Contributors evidencing the power and authority of Mack-Cali and MCRLP to
enter into this Agreement and any documents to be delivered hereunder, and the
enforceability of the same.
(7) A Registration Rights Agreement substantially in the
form of Exhibit 10.3(g).
(8) Intentionally Deleted.
(9) A Tradenames Assignment Agreement substantially in
the form of Exhibit 10.2(r).
(10) Intentionally Deleted.
(11) Duly executed and acknowledged Interest Assignments
in the form of Exhibit 10.2(a).
(12) Such other documents as may be reasonably required
or appropriate to effectuate the consummation of the transactions contemplated
by this Agreement.
iv. Contributor shall pay for the premium charges and costs for
title insurance policies (but not any endorsements to such policies required by
Mack-Cali); all survey costs; all costs incurred to repay or satisfy any and all
liens; all costs incurred with respect to non-imputation endorsements to title
insurance policies obtained by MCRLP; all leasing commissions due to Tenants in
connection with the initial and/or current terms of their respective Leases; all
costs of tenant improvement concessions due to Tenants in connection with the
initial and/or current terms
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of their respective Leases; and all customary prorations and apportionments.
Mack-Cali shall pay for the costs of all customary documentary and recording
fees, if any; the cost of any endorsements to its title insurance policies (with
the exception of any non-imputation endorsements); all due diligence
investigations costs (including, without limitation, the cost of all Phase I
Reports for the Property, which environmental assessment reports shall be dated
no more than thirty (30) days prior to the Closing Date); and all customary
prorations and apportionments. Each party shall be responsible for its own
attorney's fees. The provisions of this Section 10.4 shall survive the Closing.
v. 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 Contributors related to periods prior to the Closing,
such claims shall be the responsibility of Contributors, and Contributors shall
jointly and severally indemnify, defend and hold harmless MCRLP (and its
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.
vi. Mack-Cali and MCRLP acknowledge and agree that, except as
set forth in this Agreement, MCRLP is acquiring the Property in its "as is"
condition "subject to all faults" and specifically and expressly without any
warranties, representations or guarantees, either express or implied, of any
kind, nature, or type whatsoever from or on behalf of Contributors. Mack-Cali
and MCRLP acknowledge that except for documents, reports and information related
to the environmental integrity of the Real Property, neither Mack-Cali nor MCRLP
has relied and is not relying on any information, document, reports, sales
brochure or other literature, maps or sketches, financial information,
projections, pro formas or statements, that may have been given by or made by or
on behalf of Contributors with respect to the Property. MCRLP and Mack-Cali
further acknowledge that all materials relating to the Property which have been
provided by Contributors, including but not limited to, the Phase I Reports,
have been provided without any warranty or representation, expressed or implied
as to their content, suitability for any purpose, accuracy, truthfulness or
completeness and neither MCRLP nor Mack-Cali shall have any recourse against
Contributors or its counsel, advisors, agents, officers, directors or employees
for any information in the event of any errors therein or omissions therefrom.
Contributors do not warrant or make any representation,
express or implied, as to the merchantability, quantity, quality, condition,
suitability or fitness of the Property for any purpose whatsoever, including,
without limitation, its compliance with applicable building codes and
ordinances, zoning laws, environmental laws including, without limitation, the
Clean Air Act, CERCLA and the Super Fund Amendments and Reauthorization Act
("SARA"), the Americans with Disabilities Act, and any other federal, state or
local statutes, codes or ordinances. MCRLP also acknowledges and agrees that (i)
the representations and warranties of Contributors in Section 5 of this
Agreement and (ii) provisions in this Agreement for delivery of existing Phase I
Reports and inspection and investigation of the Property are adequate to enable
MCRLP to make MCRLP's own
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determination with respect to the suitability or fitness of the Property,
including, without limitation, its compliance with applicable building codes and
ordinances, zoning laws, environmental laws including, without limitation, the
Clean Air Act, CERCLA and SARA, the Americans with Disabilities Act, and any
other federal, state or local statutes, codes or ordinances.
Except to the extent (a) caused by a breach of any of
Contributors' representations hereunder; (b) related to claims by or liabilities
to third parties unrelated to Mack-Cali or MCRLP; or (c) as otherwise expressly
set forth herein, including, without limitation, as indemnified under the
Indemnity Agreement, MCRLP and Mack-Cali, for themselves and their successors
and assigns, hereby release each of the Contributors, and their agents,
employees, partners, officers, directors, members, managers, contractors,
consultants and representatives from, and waive any and all causes of action or
claims against any of such persons for (i) any and all liability attributable to
any physical condition of or at the Property, including, without limitation, the
presence on, under or about the Property of any materials the release or storage
of which is regulated by law; (ii) any and all liability resulting from the
failure of the Property to comply with any applicable laws; and (iii) any
liabilities, damages or injury arising from, connected with or otherwise caused
by statements, opinions or information obtained from any of such persons with
respect to the Property.
k. ADJUSTMENTS.
i. The following items under (a) through (g) with respect to
the Real Property are to be apportioned as of midnight on the date preceding the
Closing:
(1) Rents, escalation charges and percentage rents
payable by Tenants as and when collected. All moneys received from Tenants from
and after the Closing shall belong to MCRLP and shall be applied by MCRLP to
current rents and other charges under the Leases. After application of such
moneys to current rents and charges, MCRLP agrees to remit to Contributors any
excess amounts paid by a Tenant to the extent that such Tenant was in arrears in
the payment of rent prior to the Closing.
(2) A cashier's or certified check or wire transfer to
the order of MCRLP in the amount of all cash Security Deposits and any prepaid
rents, together with interest required to be paid thereon. At the election of
MCRLP, such amount may be allotted to MCRLP as a credit against the Cash
Payment.
(3) Utility charges payable by Owner, including without
limitation, electricity, water charges and sewer charges. If there are meters on
the Real Property, Contributors will cause readings of all said meters to be
performed not more than ten (10) days prior to the Closing Date.
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(4) Amounts payable under the Service Contracts other
than those Service Contracts which MCRLP has elected not to assume.
(5) 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.
(6) The value of fuel stored at any of the Real
Property, at Owner's most recent cost, including taxes, on the basis of a
reading made within fifteen (15) days prior to the Closing by Owner's supplier.
(7) Intentionally Deleted.
ii. Intentionally Deleted.
iii. At the Closing, Contributors shall deliver to MCRLP a
list of additional rent, however characterized, under all Leases, including
without limitation, real estate taxes, electrical charges, utility costs and
operating expenses (collectively, "Additional Rents") billed to Tenants for the
calendar year 1998 (both on a monthly basis and in the aggregate), the basis for
which the monthly amounts are being billed and the amounts incurred by Owner on
account of the components of Additional Rent for calendar year 1998. Upon the
reconciliation by MCRLP of the Additional Rents billed to Tenants, and the
amounts actually incurred for calendar year 1998, Contributors and MCRLP shall
be liable for overpayments of Additional Rents, and shall be entitled to
payments from Tenants, as the case may be, on a pro rata basis based upon each
party's period of ownership during calendar year 1998. Notwithstanding the
foregoing, the calculation of real estate taxes, and the collection of
Additional Rents from Tenants attributable to such real estate taxes, as
reflected on the closing statement related hereto, shall be final as of the
Closing Date.
iv. Intentionally Deleted.
v. If, on the Closing Date, the Property or any part thereof
shall be or shall have been affected by an assessment or assessments which are
or may become payable in annual installments, all the unpaid installments of any
such assessment due and payable on or prior to the Closing Date shall be paid
and discharged by Contributors on the Closing Date.
vi. 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 Colorado.
vii. Any errors in calculations or adjustments shall be
corrected or adjusted as soon as practicable after the Closing.
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viii. The provisions of this Section 11 shall survive the
Closing Date.
l. CONDITIONS PRECEDENT TO CLOSING.
i. The obligations of Contributors to deliver the
Contributors' Interests and to perform the other covenants and obligations to be
performed by Contributors 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):
(1) The representations and warranties made by MCRLP and
Mack-Cali herein shall be true and correct in all material respects with the
same force and effect as though such representations and warranties had been
made on and as of the Closing Date; provided, however, that a failure of any
representations or warranties to be true and correct in all material respects
shall not give rise to a claim by Contributors hereunder so long as such matters
do not have a material adverse effect on the transactions contemplated herein.
(2) MCRLP and Mack-Cali shall have executed and
delivered to Contributors all of the documents provided herein for said
delivery.
(3) Intentionally Deleted.
(4) Mack-Cali and MCRLP shall have performed all
covenants and obligations undertaken by Mack-Cali and MCRLP herein in all
material respects and complied with all material conditions required by this
Agreement to be performed or complied with by them on or before the Closing
Date.
ii. The obligations of Mack-Cali and MCRLP to deliver the
Permanent Certificates to Contributor Unit Holders and to accept the
Contributors' Interests and Mack-Cali's and MCRLP's obligation to perform the
other covenants and obligations to be performed by Mack-Cali and MCRLP 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 Mack-Cali or MCRLP):
(1) Subject to Section 5.5(a) the representations and
warranties made by Owner and Contributors 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. For
the purposes of the Closing condition described in this Section 12.2(a), any
limitation to the knowledge, best knowledge, or actual knowledge in any
representation, warranty, covenant or agreement made by Owner and Contributors
herein shall be inapplicable.
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(2) Contributors shall have performed all covenants and
obligations undertaken by Contributors 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.
(3) The Title Company is unconditionally prepared to
issue to MCRLP a Title Policy meeting the requirements set forth in Section 4
hereof for an "insurable title".
(4) The Real Property shall be in compliance with all
Environmental Laws.
(5) Contributors shall have executed and delivered to
MCRLP all of the documents or other requisite documents provided for herein for
said delivery.
m. INTENTIONALLY DELETED.
n. LEASING COMMISSIONS AND TENANT IMPROVEMENT OBLIGATIONS.
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 Contributor. MCRLP
shall be credited at Closing as set forth on Schedules 5.1(f) and 5.1(m)
respectively with respect to certain tenant improvement and leasing commission
obligations, but Contributors shall remain liable for any amounts due and owing
in excess of such credits. All leasing commissions on account of extensions or
renewals of Leases made after the Closing Date shall be paid by MCRLP. All
tenant improvements obligations shall be satisfied prior to the Closing Date.
The provisions of this Section shall survive the Closing.
o. ASSIGNMENT.
This Agreement may not be assigned by Mack-Cali or MCRLP
except to a directly or indirectly wholly-owned subsidiary or subsidiaries of
Mack-Cali or MCRLP, 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
Mack-Cali or MCRLP shall be deemed null and void and of no force and effect.
Notwithstanding anything to the contrary contained herein, Mack-Cali or MCRLP
may assign the Contributors' Interests to various entities, provided that each
of such entities is a Permitted Assignee. A copy of any assignment permitted
hereunder, together with an agreement of the assignee assuming all of the terms
and conditions of this
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Agreement to be performed by Mack-Cali or MCRLP with respect to the portion of
the Real Property, in form reasonably satisfactory to counsel for Contributors,
shall be delivered to the attorneys for Contributors prior to the Closing, and
in any event, no such assignment shall relieve Mack-Cali and MCRLP from their
obligations under this Agreement.
p. BROKER.
Mack-Cali, MCRLP, and Contributors represent that, with the
exception of Sonnenblick Goldman Ltd. , Conning Asset Management, Inc. and
Pacifica Holding Company LLC (collectively, "Brokers") 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 they may sustain, incur or be exposed to by reason of any breach of the
foregoing representation and warranty. Notwithstanding the foregoing,
Contributors shall pay in full any commission, fee or other compensation due the
Brokers pursuant to separate agreements, and Guarantor and Contributors agree to
indemnify, defend and hold MCRLP and Mack-Cali harmless from and against any and
all loss, cost, damage, liability, or expense, including reasonable attorneys'
fees, which MCRLP or Mack-Cali may sustain, incur or be exposed to by reason of
Contributor's failure to pay in full the Brokers pursuant to such separate
agreements. The provisions of this Section shall survive the Closing and/or
other termination of this Agreement.
q. CASUALTY LOSS.
i. Subject to Section 7.1(h), Owner and Contributors shall
continue to maintain, or cause any Tenant to maintain, in all material respects,
the fire and extended coverage insurance policies with respect to the Property
(the "Insurance Policies") which are currently in effect, through the date that
said coverage currently expires, which obligation shall survive the Closing.
ii. If at any time prior to the Closing Date, all or any
portion of the Property is destroyed or damaged as a result of fire or any other
casualty (a "Casualty"), Contributors shall promptly give written notice
("Casualty Notice") thereof to MCRLP. Within ten (10) days after the receipt of
the Casualty Notice, MCRLP and Mack-Cali shall have the right, at their sole
option, to terminate this Agreement with respect to said Property by written
notice to Contributors. Notwithstanding the foregoing, MCRLP and Mack-Cali shall
not have the right to terminate this Agreement, if (a) Contributors' insurance
fully covers the damage resulting from the Casualty; (b) the proceeds of any
insurance, together with a credit equal to Contributors' deductible under the
Insurance Policies, shall be paid to MCRLP at the time of the Closing; and (c)
all unpaid claims and rights in connection with losses to the Property shall be
assigned to MCRLP at the Closing without in any manner affecting the Exchange
Consideration hereunder. Contributor represents that the insurance maintained by
it is customary and prudent for the assets owned by it.
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iii. If the Property is the subject of a Casualty but MCRLP
does not terminate this Agreement pursuant to the provisions of this Section,
then Contributors shall, prior to the Closing Date, cause all temporary repairs
to be made to the Property as shall be required to prevent further deterioration
and damage to the Property and to protect public health and safety; provided,
however, that any such repairs shall first be approved by MCRLP. Contributors
shall have the right to be reimbursed from the proceeds of any insurance with
respect to the Property for the cost of such temporary repairs.
r. CONDEMNATION.
In the event of a material taking (as defined in this Section
18), MCRLP and Mack-Cali shall have the right, at their sole option, to either
(a) terminate this Agreement by giving Contributors written notice to such
effect at any time after its receipt of written notification of any such
occurrence, or (b) accept title to the remainder of the Property without
reduction of any consideration given hereunder. Should MCRLP or Mack-Cali so
terminate this Agreement in accordance with this Section, neither party shall
have any further liability or obligations to the other. In the event MCRLP and
Mack-Cali shall not elect to cancel this Agreement, Contributors shall, subject
to the rights of the holder of any existing mortgage, assign all proceeds of
such taking to MCRLP, and the same shall be MCRLP's sole property, and MCRLP
shall have the sole right to settle any claim in connection with the Property.
The term "material taking" shall be defined to mean the institution of any
proceedings, judicial, administrative or otherwise which involve (a) the taking
of a portion of Real Property such that ingress and egress to such Real Property
is impaired, (b) the taking of a portion of the parking spaces of a Real
Property such that after such taking the Real Property will not be in compliance
with local zoning regulations regarding adequate parking, or (c) the taking of
any part of a Building.
s. TRANSFER RESTRICTIONS.
i. Contributors hereby agree 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 19, or (ii) publicly (subject to
the restrictions of the Act and the rules and regulations promulgated
thereunder) in trading blocks of 150,000 shares of Common Stock or less, in any
single day. Notwithstanding anything herein to the contrary, the provisions of
this Section 19 shall not apply to (i) pledges or encumbrances of all or a
portion of the Contributor Units to an institutional lender, or (ii) Transfers
of all or any portion of the Contributor Units to permitted transferees as set
forth in the OP Agreement (the "Permitted Transferees"). Any holder of
Contributor Units pursuant to (i) or (ii) of the preceding sentence shall be
subject to the terms and conditions of the OP Agreement.
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ii. If any of the Unit Holders, or any of their Permitted
Transferees (each a "Seller") receives a bona fide written offer to purchase
part or all of its Contributor Units or Underlying Shares in a privately
negotiated transaction which it desires to accept, such Seller shall not sell,
transfer, or otherwise dispose of (the "Proposed Disposition") such Units or
Underlying Shares (the "Disposition Securities") to a third party (the
"Purchaser"), unless prior to such Proposed Disposition, such Seller shall have
promptly reduced the terms and conditions, if any, of the Proposed Disposition
to a reasonably detailed writing and shall have delivered written notice (the
"Disposition Notice") of such Proposed Disposition to MCRLP. The Disposition
Notice 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.
iii. Mack-Cali shall not sell the Property within four (4)
years from the date of the Closing (the "Restricted Period") without the prior
written consent of Contributors, other than (1) in connection with a transaction
which does not result in recognition of gain by the Contributors; (2) a sale of
any of the Property set forth in Schedule 19.3 hereto; (3) as determined by the
Board of Directors of Mack-Cali (the "Board") as necessary to satisfy any
material monetary default on any mortgage secured by the Property; (4) as
determined by the Board as necessary to satisfy any material, unsecured debt,
judgment or liability of Mack-Cali when the same becomes due (at maturity or
otherwise); (5) in connection with the sale of all or substantially all of the
properties owned by Mack-Cali under such terms and conditions which the Board,
in its sole judgment, determines to be in the best interests of Mack-Cali and
its public stockholders; and/or (6) sales of the Property which do not result in
material and adverse tax consequences for the Contributors. Mack-Cali may
dispose of any or all of the Property in its sole discretion, and without the
consent of Contributors, upon the expiration of the Restricted Period.
Notwithstanding any of the foregoing language to the contrary, Mack-Cali shall
not distribute the Property for a period of seven (7) years if the distribution
of such Property would result in the recognition of income by Contributor
pursuant to Sections 704(c)(1)(B) or 737 of the Code, except as otherwise
permitted in clauses (1) through (7) above.
t. INTENTIONALLY DELETED.
u. TAX MATTERS.
i. (a) Contributors will timely pay or provide for the payment
of all Taxes which are attributable to all Pre-Closing Tax Periods, but which
are not due and payable until after the Closing Date in connection with the
ownership and/or operation of the Property (by them or any predecessor entities)
or their businesses for which either MCRLP (or any of its direct or indirect
partners) could be held directly or indirectly liable or a claim could be made
against the Property. To the extent allowed by law, Contributors will timely
file all Tax Returns which are required to be filed in connection with the
ownership and/or operation of the Property (by them or
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any predecessor entities) or their businesses for all Pre-Closing Tax Periods
but which are not required to be filed until after the Closing Date and the
non-timely filing (or non-filing) of which could result in direct or indirect
liability to MCRLP (or any of its direct or indirect partners) or a claim
against the Property. Each such Tax Return will be complete and accurate.
Contributors will provide Mack-Cali with a copy of all such Tax Returns promptly
after such Tax Returns are filed. All Taxes imposed in connection with the
ownership and/or operation of the Property during any taxable periods which
begin on or before the Closing Date and end after the Closing Date ("Straddle
Periods" or "Straddle Period") shall be allocated between Contributors and MCRLP
in accordance with their respective periods of ownership of the Property.
Contributors will timely pay all Taxes with respect to their businesses for any
Straddle Period (and any other taxable period) for which either MCRLP (or any of
its direct to indirect partners) could be held directly or indirectly liable or
a claim could be made against the Property.
(2) Contributors shall cause Owner to provide Mack-Cali
with a copy of its Federal income tax returns which reflect (in whole or in
part) any of the transactions contemplated hereunder and which reflect (in whole
or in part) any of the gain or loss recognized in respect of such transactions.
ii. Owner and Contributors shall pay any and all Taxes
including without limitation, Taxes imposed with respect to the operation of its
business and the ownership or operation of the Property or Owner for all taxable
periods (or portions thereof) ending on or prior to the Closing imposed upon
MCRLP based, in whole or in part, upon the failure to comply with the bulk sales
laws.
iii. Contributors are hereby authorized to continue the
proceeding or proceedings now pending for the reduction of the assessed
valuation of the Property as set forth on Schedule 21.3 and to litigate or
settle the same in Contributors' discretion. MCRLP is hereby authorized by
Contributors, in MCRLP's sole discretion, to file any applicable proceeding for
the 1997 and/or 1998 fiscal year for the reduction of the assessed valuation of
the Property. The net refund of taxes, if any, for any tax year for which
Contributors or MCRLP shall be entitled to share in the refund shall be divided
between Contributors and MCRLP in accordance with the apportionment of taxes
pursuant to the provisions hereof. All expenses in connection therewith,
including counsel fees, shall be borne by Contributors and MCRLP in proportion
to their ownership period of the asset in question.
iv. For purposes of this Agreement:
(1) "Taxes" or "Tax" 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,
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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.
(2) "Tax Returns" or "Tax Return" means all original and
amended Federal, state, local and foreign tax returns, declarations, statements,
reports, schedules, forms, information returns and other filings relating to
Taxes.
(3) "Audits" or "Audit" means any audit, assessment of
Taxes, any other examination or claim by any Governmental Authority, judicial,
administrative or other proceeding or litigation (including any appeal of any
such judicial, administrative or other proceeding or litigation) relating to
Taxes and/or Tax Returns.
v. The provisions of this Section shall survive the Closing
Date.
v. PUBLICATION.
i. MCRLP shall have the exclusive right to make such public
announcements or filings with respect to the exchange as MCRLP may deem
reasonably prudent and, upon advice of counsel, as may be necessary or required
by law.
w. REMEDIES.
i. If the conditions set forth in Section 12.2 with respect to
the Closing have been satisfied (unless the failure or inability to be so
satisfied is due to Mack-Cali or MCRLP) and if MCRLP or Mack-Cali is not ready,
willing and able to perform its obligations hereunder on the Closing Date, or in
the event of a material default of MCRLP or Mack-Cali or MCRLP's or Mack-Cali's
material failure to comply with any material representation, warranty, covenant
or agreement set forth herein with respect to the Closing, then Contributors,
subject to the limitations set forth in this Agreement, including, without
limitation, those set forth in Section 6.3, shall have the right as their sole
and exclusive remedy to either (i) terminate this Agreement upon written notice
to MCRLP, in which event neither party shall thereafter have any further
obligations under this Agreement, except those which expressly survive the
termination hereof; or (ii) maintain an action for either (A) specific
performance, or (B) monetary damages.
ii. If the conditions set forth in Section 12.1 have been
satisfied (unless the failure or inability to be so satisfied is due to Owner or
any Contributor), and if Contributors are not ready, willing and able to perform
their obligations hereunder on the Closing Date, or in the event of any material
default on the part of any of the Contributors, or Owner or any
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Contributors' failure to comply with any material representation, warranty,
covenant or agreement set forth herein, MCRLP shall be entitled to either (i)
terminate this Agreement upon notice to Contributors following which neither
party shall thereafter have any further obligations under this Agreement, except
those which expressly survive the termination hereof; or (ii) commence an action
against Contributors seeking either (A) monetary damages, or (B) specific
performance of Contributors' obligations under this Agreement.
iii. The acceptance of the Assignment of Interest by MCRLP
shall be deemed a full performance and discharge of every agreement and
obligation of Contributors to be performed under this Agreement, except those,
if any, which are specifically stated in this Agreement to survive the Closing.
x. INTENTIONALLY DELETED.
y. 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 Mack-Cali: c/o Mack-Cali Realty Corporation
or MCRLP 11 Commerce Drive
Cranford, New Jersey 07016
Attn: Roger W. Thomas, Esq.
(908) 272-8000 (tele.)
(908) 272-6755 (fax)
with a copy to: Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attn: Wayne B. Heicklen, Esq.
(212) 326-0425 (tele.)
(212) 326-0806 (fax)
If to Owner: c/o Pacifica Holding Company, LLC
or Contributors 5975 South Quebec Street, Suite 100
Englewood, Colorado 80111
Attn: Mr. Steven Leonard
(303) 220-5565 (tele.)
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(303) 220-5585 (fax)
with a copy to: Brownstein, Hyatt, et al.
410 17th Street, 22nd Floor
Denver, Colorado 80202
Attn: Edward N. Barad, Esq.
(303) 534-6335 (tele.)
(303) 623-1956 (fax)
and a copy to: Apollo Real Estate Advisors
1301 Avenue of the Americas, 38th Floor
New York, NY 10019
Attn: Mr. Richard Mack
(212) 261-4065 (tele.)
(212) 261-4060 (fax)
or to such other address as either party may from time to time designate
by written notice to the other. Notices given by (i) overnight delivery service
as aforesaid shall be deemed received and effective on the first business day
following such dispatch, and (ii) telecopy or fax machine shall be deemed given
at the time and on the date of machine transmittal provided the same is sent
prior to 4:00 p.m. Eastern Time 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.
z. DEPRECIATION METHOD.
Mack-Cali, as the general partner of MCRLP, covenants and
agrees that MCRLP and its affiliates will use the "traditional method with
curative allocations" (as defined in Treasury Regulations Section 1.704-3(c)) of
allocating income, gain, loss and deduction to account for the variation between
the fair market value and adjusted basis of the Property for federal income tax
purposes with respect to (i) the contribution of the Property, and (ii) any
revaluation of the Property in accordance with the provisions of Treasury
Regulations Sections 1.704-1(b)(2)(iv)(f), 1.704-1(b)(2)(iv)(g) and
1.704-3(a)(6).
aa. MISCELLANEOUS.
i. Intentionally Deleted.
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ii. 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.
iii. This Agreement cannot be amended, waived or terminated
orally, but only by an agreement in writing signed by the party to be charged.
iv. This Agreement shall be interpreted and governed by the
laws of the State of Colorado, without regard to conflicts of laws principles,
and shall be binding upon the parties hereto and their respective successors and
assigns.
v. 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. The, feminine or masculine gender, when used herein, shall
include the other gender and the use of the singular shall include the plural.
vi. 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.
vii. Each party shall, from time to time, execute, acknowledge
and deliver to the other party 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 Contributors and MCRLP or Mack-Cali. 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 Contributors, MCRLP or Mack-Cali or the party
whose counsel drafted this Agreement.
viii. 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.
ix. All references herein to any Section, Exhibit, or Schedule
shall be to the Sections of this Agreement and to the Exhibits and Schedules
annexed hereto unless the context clearly dictates otherwise. All of the
Exhibits and Schedules annexed hereto are, by this reference, incorporated
herein.
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x. In the event that Owner or Contributors, and MCRLP or Mack-
Cali enter into litigation or alternative dispute resolution in connection with
this Agreement or the transaction contemplated herein, the non-prevailing party
in such litigation or alternative dispute resolution shall be responsible for
the payment of all expenses and reasonable attorneys' fees incurred by the
prevailing party.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE.]
149
CONTRIBUTION AND EXCHANGE AGREEMENT
THIS CONTRIBUTION AND EXCHANGE AGREEMENT (the
"Agreement") made this 25th day of March, 1998, by and among the parties set
forth on Exhibit A annexed hereto and made a part hereof (jointly and severally,
"Contributors", and each individually, a "Contributor"), each having an address
c/o Pacifica Holding Company, 5975 South Quebec Street, Suite 100, Englewood,
Colorado, MACK-CALI REALTY, L.P., a Delaware limited partnership ("MCRLP") and
MACK-CALI REALTY CORPORATION, a Maryland corporation ("Mack-Cali"), each having
an address at 11 Commerce Drive, Cranford, New Jersey 07016.
RECITALS
9. Contributors are, collectively, the owners of all the
membership and/or other ownership interests in and to 67 Inverness, LLC, a
Colorado limited liability company ("Owner"). Each Contributor owns the
respective membership and/or ownership interest in Owner set forth on Exhibit B
annexed hereto and made a part hereof.
10. Owner owns various commercial properties located
throughout the Denver, Colorado metropolitan area. Mack-Cali, through MCRLP and
certain affiliated entities of MCRLP, similarly own various commercial
properties located throughout New Jersey, New York, Pennsylvania, Nebraska,
Iowa, California, Florida, Arizona, Connecticut and Texas.
11. In order to effectuate their contribution and exchange of
assets as herein provided, each Contributor hereby agrees to contribute all of
its membership and/or ownership interests in and to Owner and certain other
assets to MCRLP and Mack-Cali, and MCRLP and Mack-Cali hereby agree to accept
the contribution of the Contributors' Interest and certain other assets on, and
subject to, the terms, covenants and conditions set forth herein.
12. Contributors, MCRLP and Mack-Cali have determined that the
transactions contemplated hereby are in the respective parties' best interests.
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 agree
as follows:
a. SUBJECT OF CONTRIBUTION.
i. Upon, and subject to the terms, covenants and
conditions of this Agreement, on the Closing Date (as hereinafter defined), each
of the Contributors shall contribute, convey or otherwise transfer to certain
designees of MCRLP 100% of said Contributor's
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right, title and interest (collectively, "Contributors' Interests, each
individually, a "Contributor's Interest") in and to Owner.
ii. From and after the Closing, Owner shall be the sole
and exclusive owner of the following:
(1) that certain real property situate, lying and
being in the State of Colorado and being more particularly described on Schedule
1(a) (the "Land") and all of the improvements located on the Land (individually,
a "Building" and collectively, the "Improvements");
(2) all rights, privileges, grants and easements
appurtenant to Owner's interest in the Land and Improvements, if any, including
without limitation, all of Contributor's and/or Owner's rights, title 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
collectively referred to herein as the "Real Property");
(3) except as set forth on Schedule 1(c) all
personal property, artwork, fixtures, equipment, inventory and computer
programming and software owned by Owner and located on any of the Real Property
or used at any of the management and corporate offices of Owner or Contributor
(the "Personal Property");
(4) all leases and other agreements with respect
to the use and occupancy of the Real Property, together with all amendments and
modifications thereto (the "Leases") and any guaranties provided thereunder, and
rents, additional rents, reimbursements, profits, income, receipts and the
amount deposited (the "Security Deposit") under any Lease in the nature of
security for the performance of the Tenant's (as defined herein) obligations
thereunder;
(5) Intentionally Deleted.
(6) all assignable permits, licenses, guaranties,
approvals, certificates and warranties relating to the Real Property and the
Personal Property (collectively, the "Permits and Licenses"), all of Owner's
right, title and interest in and to those contracts and agreements for the
servicing, maintenance and operation of the Real Property ("Service Contracts")
and telephone numbers in use at any of the Real Property or the management
offices and corporate headquarters of Owner (together with the Permits and
Licenses and the Service Contracts, the "Intangible Property");
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(7) all books, records, promotional material,
tenant data, leasing material and forms, past and current rent rolls, files,
statements, market studies, keys, plans, specifications, reports, tests and
other materials of any kind owned by or in the possession of Owner which are or
may be used in the use and operation of the Real Property or Personal Property
(collectively, the "Books and Records"); and
(8) all other rights, privileges and appurtenances
owned by Owner, if any, and in any way related to the rights and interests
described above in this Section 1.
The Real Property, the Personal Property, the Leases,
the Intangible Property, the Books and Records and the other property interests
are hereinafter collectively referred to as the "Property".
b. CONSIDERATION.
i. Total Exchange Consideration. The aggregate
consideration for the Contributor's Interests (the "Exchange Consideration") is
Six Million Two Hundred Twenty Thousand Seven Hundred Twenty-Seven and xx/100
($6,220,727.00) Dollars, to be paid by MCRLP in accordance with Section 2.2.
ii. The Property. (a) At the Closing (as hereinafter
defined), and upon satisfaction of the terms and conditions herein (i)
Contributors shall contribute, convey or otherwise transfer to MCRLP or its
Permitted Assignees (as hereinafter defined), all of Contributors' Interests and
(ii) MCRLP (and Mack-Cali where applicable) shall, subject to adjustment as set
forth herein, pay to Contributors or their designees, in cash, the amount of Six
Million Two Hundred Twenty Thousand Seven Hundred Twenty-Seven and xx/100
($6,220,727.00) Dollars (the "Cash Payment"), allocated as set forth in Schedule
2.2(a)(i); and (iii) MCRLP (and Mack-Cali where applicable) shall issue the
Contributor Units (as hereinafter defined) in an amount set forth on Schedule
2.2(a)(ii) to such persons as Contributor shall direct in writing (as set forth
in Section 10.2(aa)) as soon as practicable following the date hereof (the "Unit
Holders").
(2) Simultaneous with MCRLP accepting the
Contributors' Interests, MCRLP shall issue, subject to adjustments as set forth
herein, common units of limited partnership interests in MCRLP (the "Contributor
Units"), convertible into Mack-Cali common stock ("Common Stock"); provided,
however, that the Unit Holders shall be issued and shall hold the Contributor
Units in accordance with the provisions of Section 19.
(3) At the Closing, MCRLP shall issue to
Contributors and/or the Unit Holders or their designees certificates
representing the Contributor Units (the "Permanent Certificates"), which
Permanent Certificates shall contain the legend set forth on Exhibit 10.2(ee).
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(4) All rights and benefits incidental to the
ownership of the Contributor Units received in exchange for the Property,
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,
shall accrue for the benefit of the Unit Holders commencing on the Closing Date
(as defined herein).
(5) With respect to the first Partnership Record
Date (as defined in the OP Agreement (as defined below)) on or after the
Closing, the Unit Holders 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 Unit
Holders held Contributor Units.
iii. Intentionally Deleted.
iv. Intentionally Deleted.
c. INSPECTION PERIOD; MCRLP'S RIGHT OF TERMINATION AND
REJECTION PRIOR TO CLOSING.
i. Prior to the Closing (the "Inspection Period"),
MCRLP, at its sole cost and expense, may perform, or cause to be performed,
tests, investigations and studies of or related to the Property, the
Contributors and/or Owner, 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 other tests,
investigations or studies as MCRLP, in its sole discretion, determines is
necessary or desirable in connection with the Property, the Contributors and/or
Owner and may inspect the physical (including environmental) and financial
condition of the Property, the Contributors and/or Owner, including but not
limited to Leases, Service Contracts, contracts pursuant to which third party
management fees are payable, copies of the Contributors' and Owner's Tax Returns
and the Property Financials (as hereinafter defined) as of and for the years
ending December 31, 1995, 1996 and 1997, engineering and environmental reports,
development approval agreements, permits and approvals, which inspection shall
be satisfactory to MCRLP in its sole discretion. Contributors agree to cooperate
and shall cause Owner to cooperate with MCRLP in such review and inspection and,
to the extent not yet delivered, shall deliver said documents and information to
MCRLP within ten (10) days from the date hereof. MCRLP may terminate this
Agreement for any reason, by written notice given to Contributor, prior to the
expiration of the Inspection Period. In the event MCRLP terminates this
Agreement during the Inspection Period, this Agreement shall be null and void
and the parties hereto shall be relieved of all further obligations hereunder
except as otherwise provided herein. In the event MCRLP does not terminate
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this Agreement by the end of the Inspection Period, then MCRLP shall be deemed
to have elected not to terminate this Agreement.
ii. During the Inspection Period, MCRLP, its agents and
contractors shall have unlimited access to the Property the Contributors and/or
Owner and other information pertaining thereto in the possession or within the
control of Contributors, during normal business hours, for the purpose of
performing such studies, tests, borings, investigations and inspections for the
purposes described in Section 3.1 above. Such right of inspection and the
exercise of such right shall not constitute a waiver by MCRLP of the breach of
any representation or warranty of Owner or Contributors which might, or should,
have been disclosed by such inspection. Contributors shall cooperate and cause
Owner to cooperate with MCRLP in facilitating its due diligence inquiry and
shall obtain, and use commercially reasonable efforts to obtain, any consents
that may be necessary in order for MCRLP to perform the same.
iii. To assist MCRLP in its due diligence investigation
of the Property and Owner, Contributors shall deliver to MCRLP, by the execution
and delivery of this Agreement, true and correct copies of all existing Phase I
environmental studies (the "Phase I Reports") in the possession or control of
Contributors, Owner, its counsel or consultants, with respect to the Real
Property, which Phase I Reports are set forth on Schedule 3.3 annexed hereto. In
the event that MCRLP determines that it requires any new Phase I Reports or
updates thereof, the cost of such reports or updates shall be borne by MCRLP. If
MCRLP reasonably requires that further environmental investigations be
undertaken beyond any new Phase I or updated Phase I Report, all engineering
costs and expenses relating to said further environmental investigations shall
be borne by Mack-Cali.
iv. Intentionally Deleted.
v. During the Inspection Period, Mack-Cali and MCRLP
shall provide to Contributors and their agents and advisors reasonable access to
Mack-Cali's and MCRLP's books and records, and Mack-Cali and MCRLP shall provide
Contributors such other reasonable information including, without limitation,
all Securities and Exchange Commission filings of MCRLP and Mack-Cali and
federal, state, and local income, excise, franchise, and all other tax filings,
in order to permit Contributors, at their sole cost and expense, to perform
reasonable due diligence on such parties. Nothing arising from Owner's or
Contributors' inspection or due diligence as permitted by this Section shall
give rise to a right of Contributors to terminate this Agreement.
vi. Mack-Cali shall have the right, without the
obligation, to terminate this Agreement if (i) at any time prior to the Closing
Date, Mack-Cali determines in its sole discretion, that any of the Property is
subject to materially adverse environmental conditions, including, without
limitation, any environmental condition that has a material adverse affect on
the
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property value of any Real Property, on the current use of any Real Property, on
groundwater at, on, under, about or emanating from any Real Property or on the
ability of Mack-Cali or MCRLP to finance any Real Property; or (ii) Contributor
is unable to obtain the approval of any member of the Contributors to the terms
of this Agreement; or (iii) Mack-Cali determines that certain of the
indebtedness encumbering the Property or Owner cannot be satisfied.
d. TITLE; MATTERS TO WHICH THIS SALE IS SUBJECT.
i. As of the Closing Date, title to the Property shall
be subject only to the following (collectively, the "Permitted Encumbrances"):
(1) The liens of real estate taxes, personal
property taxes, water charges, and sewer charges provided the same are not yet
due and payable, but subject to adjustment as provided herein;
(2) the rights of those parties occupying space at
any of the Improvements (collectively, "Tenants") as tenants only;
(3) those restrictions, covenants, agreements,
easements, matters and things affecting title to the Real Property as of the
date hereof and more particularly described in Schedule 4.1(c) annexed hereto
and by this reference made a part hereof and such other easements, covenants and
restrictions which are entered into with the consent of MCRLP after the date
hereof, such consent not to be unreasonably withheld, delayed or conditioned;
(4) any and all laws, statutes, ordinances, codes,
rules, regulations, requirements, or executive mandates affecting the Real
Property including, without limitation, those related to zoning and land use, as
of the date hereof;
(5) the state of facts shown on the surveys
described on Schedule 4.1(e) for the property comprising the Real Property;
(6) the Service Contracts, excluding, however, any
Service Contract MCRLP advises Contributor to terminate prior to Closing (as
hereinafter defined);
(7) any utility company rights, easements and
franchises to maintain poles, lines, wires, cables, pipes, boxes and other
fixtures and facilities in, over, under or upon the Real Property, provided the
same do not impair, in other than a de minimis manner, the present use of the
Real Property;
(8) such matters as the Title Company (as
hereinafter defined) shall be willing, without special premium, to omit as
exceptions to coverage; and
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(9) Intentionally Deleted.
ii. Prior to the date hereof, Contributors shall have
directed Land Title Guarantee Company (the "Title Company"), as agent for
Chicago Title Insurance Company, to prepare a title insurance search and
commitment for owner's title insurance policy for the Real Property (the "Title
Commitment"). MCRLP shall cause the Title Company to promptly deliver a copy of
the same to Contributors and their counsel. If any defects, objections or
exceptions in the title to the Real Property appear in the Title Commitment
(other than the Permitted Encumbrances) which MCRLP is not required to accept
under the terms of this Agreement, Contributors may, at their election,
undertake to eliminate such unacceptable defects, objections or exceptions, it
being agreed that except as provided below, Contributors shall have no
obligation to incur any expense in connection with curing such defects,
objections or exceptions, other than (i) judgments against any Contributor or
Owner; (ii) mortgages or other liens which can be satisfied by payment of a
liquidated amount; and (iii) defects, objections or exceptions which can be
removed by payments not to exceed $100,000.00 in the aggregate. Contributors, in
their 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, Contributors are 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, MCRLP shall
elect either (i) to terminate this Agreement by notice given to Contributors, in
which event the provisions of Section 23.2(a) shall apply, or (ii) to accept
title subject to such unacceptable defects, objections or exceptions and receive
no credit against or reduction of the consideration to be given hereunder for
the Property. Contributors and Owner agree and covenant that they shall not
voluntarily place any encumbrances or restrictions on title to the Real Property
from and after the date of the first issuance of the Title Commitment for said
Property, except for the right to reserve easements for utilities and ingress
and egress encumbering the Real Property (post-closing) for the benefit of
adjacent properties owned by Owner (or any affiliate thereof) upon the written
consent of MCRLP, which consent shall not be unreasonably withheld or delayed.
Mack-Cali and MCRLP covenant and agree that they shall consult with Contributors
prior to causing any other person or entity to request any inspection of the
Real Property by any governmental entity. Contributors recognize that
Mack-Cali's and MCRLP's due diligence necessitates said inspection. Mack-Cali
and MCRLP agree that they shall conduct any due diligence with such governmental
entity with a view toward maintaining the confidentiality of the transaction
contemplated by this Agreement.
iii. It shall be a condition to Closing that
Contributors contribute and convey, and that the Title Company insures, title to
the Real Property in the amount of the Exchange Consideration (at a standard
rate for such insurance) in the name of MCRLP or its designees, by a standard
1992 ALTA Owner's Policy, with ALTA endorsements Form 3.1, Form 8.1, a
comprehensive owner's endorsement and non-imputation endorsement, to the extent
that the premium for such endorsements, with the exception of the non-imputation
endorsements, is paid by MCRLP, for the Real Property and any other endorsements
as reasonably required by MCRLP, free
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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 (i) the exception for taxes shall apply only to the current taxes
not yet due and payable; and (ii) to the extent that the premium for such
endorsements, with the exception of the non-imputation endorsements, is paid by
MCRLP, (a) any Permitted Encumbrances have not been violated, and that any
future violation thereof will not result in a forfeiture or reversion of title;
and (b) MCRLP's contemplated use of the Real Property will not violate the
Permitted Encumbrances. Owner and Contributor shall provide such affidavits,
undertakings and indemnities as the Title Company insuring title to the Real
Property may require, including without limitation indemnities relating to each
non-imputation endorsement, and shall cure all other defects and exceptions
other than the Permitted Encumbrances and as required pursuant to Section 4.2.
The words "insurable title" and "insurable" as used in this Agreement are hereby
defined to mean title which is insurable at standard rates (without special
premium) by the Title Company without exception other than the Permitted
Encumbrances, and standard printed policy and survey exceptions.
iv. Contributors shall cause one or more surveyors
acceptable to MCRLP to deliver to MCRLP a survey or surveys of the Real Property
acceptable to MCRLP in all respects and in conformity with ALTA standards. MCRLP
shall, at MCRLP's sole cost and expense and with Contributors' cooperation and
assistance, cause the surveyor to update the survey no more than thirty (30)
days prior to the Closing Date and shall have the general survey exception
removed from the Title Policy and the survey affirmatively insured, to the
extent that the premium for such endorsement is paid by MCRLP, to MCRLP.
v. 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
Contributors or Owner, 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 Contributors. Owner or Contributors shall deliver to MCRLP, on
the Closing Date, instruments in recordable form sufficient to discharge any
such mortgages or other liens which any of the Contributors or Owner is
obligated to pay and discharge pursuant to the terms of this Agreement.
vi. If the Title Commitment discloses judgments,
bankruptcies or other returns against other persons or entities having names the
same as or similar to that of Owner or any of the Contributors, Contributors
shall, upon request, deliver to the Title Company affidavits showing that such
judgments, bankruptcies or other returns are not against Owner or any of the
Contributors, or any of their affiliates. Upon request by MCRLP, Contributors
shall deliver any affidavits and documentary evidence as are reasonably required
by the Title Company to eliminate the standard exceptions on the ALTA Owner's
Policy.
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e. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTORS.
i. In order to induce MCRLP and Mack-Cali to perform as
required hereunder, Contributors hereby warrant and represent jointly and
severally to MCRLP and Mack-Cali, the following with respect to the Property and
Contributors' Interests:
(1) Owner is a duly organized and validly existing
entity, organized and in good standing under the laws of the state of its
formation, as more particularly set forth in Exhibit A hereto, is duly
authorized to transact business in the State of Colorado, has all requisite
power and authority to consent to the execution and delivery of 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 cause the contribution and conveyance of
Contributors' Interests in accordance with the terms and conditions hereof. All
necessary actions of Owner and Contributors, and the members of each, 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.
(2) Owner has the power and authority to own the
Property and to conduct and transact its limited liability company business.
(3) This Agreement, when duly executed and
delivered, will be the legal, valid and binding obligation of each Contributor,
enforceable in accordance with the terms of this Agreement. The performance by
each 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 such Contributors or Owner 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
such Contributors or Owner is a party or by which its assets are or may be
bound.
(4) Annexed hereto as Schedule 5.1 (d) is a true,
complete and correct schedule of all of the Leases. The Leases are valid and
bona fide obligations of the landlord and Tenants thereunder and are in full
force and effect. To the best of Contributors' knowledge, no defaults exist
thereunder and no condition exists which, with the passage of time or the giving
of notice or both, will become a default; the Leases constitute all of the
leases, tenancies or occupancies affecting the Real Property on the date hereof;
all Tenants have commenced occupancy; there are no agreements (other than the
Leases) which confer upon any Tenant or any other person or entity any rights
with respect to the Property, nor is any Tenant entitled now or in the future to
any concession, rebate, offset, allowance or free rent for any period, nor has
any such claim been asserted by any Tenant.
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(5) Annexed hereto as Schedule 5.1(e) (the "Rent
Roll") is a listing of the following, which is true, complete and correct in all
respects for the Building: (i) the name of each Tenant; (ii) the fixed rent
actually being collected; (iii) the expiration date or status of each Lease
(including all rights or options to renew); (iv) the Security Deposit, if any;
(v) whether there is any guaranty of a Tenant's obligations from a third party,
and if so the nature of said guaranty; (vi) any written notices given by any
Tenant of an intention to vacate space in the future; (vii) the base year(s) and
base year amounts for all items of rent or additional rent billed to each Tenant
on that basis; and (viii) any arrearages of any Tenant beyond thirty (30) days.
(6) To the knowledge of Contributors, Owner has
performed all of the obligations and observed all of the covenants required of
it as landlord under the terms of the Leases. Except as set forth on Schedule
5.1(f) annexed hereto, all work, alterations, improvements or installations
required to be made for or on behalf of all Tenants under the Leases have in all
respects been carried out, performed and complied with, and there is no
agreement with any Tenant for the performance of any work to be done in the
future, and no continuing obligations or liabilities by Owner, as landlord under
the Leases. To the knowledge of Owner and Contributors, except as set forth on
Schedule 5.1(f), no work has been performed at any Building which would require
an amendment to the certificate of occupancy for such Building for which an
amendment has not been obtained, and any and all work performed at the Real
Property to the date hereof and to the Closing Date has been and will be in
accordance with the rules, laws and regulations of all applicable authorities.
All bills and claims for labor performed and materials furnished to or for the
benefit of the Property arising prior to the Closing Date will be paid in full
by Owner within customary time periods, not to exceed forty-five (45) days from
the receipt of an invoice by Owner.
(7) There are no service contracts, union
contracts, employment agreements or other agreements affecting the Property or
the operation thereof, except the Service Contracts and other contracts and
agreements set forth on Schedule 5.1(g) annexed hereto. All of the Service
Contracts are and will on the Closing Date be unmodified and in full force and
effect without any material default or claim of material default by any of the
parties thereto. All sums presently due and payable by Owner under the Service
Contracts have been fully paid and all sums which become due and payable between
the date hereof and the Closing Date shall be fully paid by Owner within
customary time periods, not to exceed forty-five (45) days from the receipt of
an invoice by Owner. All of the Service Contracts may be terminated on not more
than sixty (60) days notice without the payment of any fee or penalty, and the
representation contained in this sentence is not subject to being modified by
the limitations of Section 5.5. There are no employees of Owner, or any
affiliate thereof, working at or in connection with the Real Property pursuant
to any of the Service Contracts, other contracts and/or employment agreements
except as set forth on Schedule 5.1(g).
(8) Except as set forth on Schedule 5.1(h) annexed
hereto, there are no actions, suits, labor disputes, litigation or proceedings
currently pending or, to the
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knowledge of Owner or Contributors, threatened against or related to Owner or
any of the any of the Contributors or all or any part of the Property or Owner,
the environmental condition thereof, or the operation thereof.
(9) Except as set forth on Schedule 5.1(i) annexed
hereto, neither Owner nor any of the Contributors has received written notice of
and neither has any knowledge of (i) any pending or contemplated annexation or
condemnation proceedings, or private purchase in lieu thereof, affecting or
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which may affect the Real Property or any part thereof, (ii) any
proposed or pending proceeding to change or redefine the zoning classification
of all or any part of the Real Property, (iii) any proposed or pending special
assessments affecting the Real Property or any portion thereof, (iv) any
penalties or interest due with respect to real estate taxes assessed against the
Real Property, or (v) any proposed changes in any road or grades with respect to
the roads providing a means of ingress and egress to the Real Property.
Contributors agree to furnish MCRLP with a copy of any such notice received
within two (2) business days after receipt.
(10) Contributors have provided MCRLP with all
reports in the possession of Owner, Contributors, its counsel or consultants, or
under their control, related to the physical condition of the Real Property.
(11) Except as set forth on Schedule 5.1(k)
annexed hereto, Contributors have no knowledge of any notices, suits, or
judgments relating to any violations (including environmental) of any laws,
ordinances or regulations affecting the Real Property, or any violations or
conditions that may give rise thereto, and have no reason to believe that any
agency, board, bureau, commission, department or body of any municipal, county,
state or federal governmental unit, or any subdivision thereof, having,
asserting or acquiring jurisdiction over all or any part of the Real Property or
the management, operation, use or improvement thereof (collectively, the
"Governmental Authorities" or "Governmental Authority" as the context requires)
contemplates the issuance thereof, and there are no outstanding orders,
judgments, injunctions, decrees or writ of any Governmental Authorities against
or involving Owner, any of the Contributors or the Real Property. For purposes
of this Agreement, the term "Governmental Authority" shall also include the
Internal Revenue Service and any other federal, state, local or foreign taxing
authority.
(12) There are no employees of Owner or the
Contributors or any affiliates thereof working at or in connection with the Real
Property except as set forth on Schedule 5.1(l).
(13) Annexed hereto as Schedule 5.1(m) is a
schedule of all leasing commission obligations affecting the Property. The
respective obligations of Owner, Contributors and MCRLP with respect to said
commissions are set forth in Section 13.
(14) Neither Owner nor any of the Contributors 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
Owner's or Contributor's creditors, suffered the appointment of a receiver to
take possession of all, or substantially all, of Owner's or Contributor's
assets, suffered the attachment or other judicial seizure of all, or
substantially all, of Owner's or 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.
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(15) Except as set forth on Schedule 5.1(o), the
Personal Property is now owned and will on each of the Closing Date be owned by
Owner or the Contributors free and clear of any conditional bills of sale,
chattel mortgages, security agreements or financing statements or other security
interests of any kind.
(16) Intentionally Deleted.
(17) Intentionally Deleted.
(18) Intentionally Deleted.
(19) Contributors have no knowledge that any part
of the Real Property has been designated as wetlands or any other word of
similar purport or meaning under the Federal Water Pollution Control Act, 33
U.S.C. ss.1251 et seq.; the Colorado Water Quality Control Act, Colo. Rev. Stat.
Section 25-8-101 et seq; or any other applicable federal, state, county or
municipal statute, ordinance, rule, regulation, order or code.
(20) To the best of Contributors' knowledge, there
are no active or inactive aboveground or underground storage tanks or vessels or
associated piping at the Real Property, regardless of whether or not such tanks
or vessels are regulated tanks or vessels, except as set forth on Schedule
5.1(t).
(21) Contributors have no knowledge of outstanding
requirements or recommendations by (i) any insurance company currently insuring
the Property; (ii) any board of fire underwriters or other body exercising
similar functions; or (iii) the holder of any mortgage encumbering any of the
Property, which require or recommend any repairs or work of a material nature to
be done on the Property.
(22) The financial statements, including the
income and expense statements and the balance sheets of Owner, the Contributors
and their affiliates, excluding only those assets, liabilities and operations
not contemplated to be contributed pursuant to this Agreement, relating to
Owner's ownership and operation of the Property and the related statement of
income, member's capital and cash flows, including the footnotes thereto (the
"Property Financials") as of and for the years ending December 31, 1995, 1996
and 1997, fairly present the combined financial position of Owner and
Contributors relating to the Property as of such dates and the results of
operations and cash flows of Owner and the Contributors relating to the
ownership and operation of the Property for such respective periods. The
Property Financials from January 1, 1998, through the most recent month ending
prior to the Closing Date, fairly present the combined financial position of the
Property relating to the ownership and operation of the Property as of such date
(subject to the normal year-end adjustments described in Schedule 5.1(v)) and
with all interim financial statements of the Property heretofore delivered to
MCRLP on behalf of Owner and the
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Contributors. Except as set forth on the Property Financials, there are no other
direct or indirect indebtedness, liability, claim or loss that accrued prior to
Closing, whether known or unknown, fixed or unfixed, choate or inchoate,
liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent
or otherwise, whether or not of a kind required by GAAP to be set forth on the
Property Financials or the notes thereto, including, without limitation,
indebtedness for borrowed money (collectively, "Liabilities").
(23) Except as set forth in Schedule 5.1(w), Owner
does not maintain any 401(k) savings plans, pension plans, multi-employer plans
(as defined in Section 3(37) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")), employee benefit plans (as defined in ERISA) or
employee welfare plans providing for benefits to Owner employees (each, an
"Employer Plan"). From and after the date hereof, the Contributors shall not
cause or permit Owner to adopt an Employer Plan. Mack-Cali shall have no
liability to any current or former employees of Contributor or any affiliate
thereof, including, without limitation, any liabilities which may arise as a
result of the consummation of the transactions contemplated by this Agreement,
under any plans or programs listed on Schedule 5.1(w), or arising under
applicable Federal or state law, including, without limitation, under the Worker
Adjustment and Retraining Nonfiction Act (WARN) and Consolidated Omnibus Budget
Reconciliation Act of 1985 (COBRA).
(24) Intentionally Deleted.
(25) Except as disclosed in the Phase I Reports or
otherwise set forth in Schedule 5.1(y):
(a) To the best of Contributors' knowledge,
no Governmental Authority has demanded in writing, addressed to Owner,
Contributors or any of its affiliates, counsel or agents, that any Contaminants
(as defined herein) be cleaned up or environmentally remediated at any Real
Property, which has not been cleaned up or environmentally remediated.
(b) To the best of Contributors' knowledge,
no Contaminants have been Discharged (as hereinafter defined) which would allow
a Governmental Authority to demand that a cleanup be undertaken.
(c) To the best of Contributors' knowledge,
no ss.104(e) informational request, issued pursuant to CERCLA (as hereinafter
defined) with respect to the Real Property has been received by Contributors or
Owner.
(d) To the best of Contributors' knowledge,
all pre-existing aboveground and underground storage tanks and vessels, if any,
at the Real Property have
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been removed and their contents disposed of in accordance with and pursuant to
all applicable Environmental Laws.
(e) To the best of Contributors' knowledge,
there is no asbestos or asbestos containing material requiring remediation under
Environmental Laws (as hereinafter defined) on the Real Property, except as set
forth on Schedule 5.1(y).
(f) To the best of Contributor's knowledge,
all transformers and capacitors containing polychlorinated biphenyls ("PCBs") ,
and all "PCB Items", as defined in 40 CFR, ss.761.3, located on or affecting the
Real Property, are identified in Schedule 5.1(y) and are in compliance with all
Environmental Laws.
(g) To the best of Contributors' knowledge,
Owner and the Contributors have all material certificates, licenses and permits
(the "Permits"), including without limitation, environmental Permits, required
to operate the Real Property. To the best of Contributors' 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, as the
case may be, without additional payment by MCRLP, and shall, upon Closing, be
transferred to MCRLP by Contributors and Owner.
(h) To the best of Contributors' knowledge,
the Real Property has not been used during the period of Owner's ownership as
solid wastes disposal sites and facilities as defined in the Colorado Solid
Wastes Disposal Sites and Facilities Law, Colo. Rev. Stat. Section 30-20-100.5
et seq. and the regulations promulgated thereunder.
(i) To the best of Contributors' knowledge,
there are no engineering or institutional controls 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 Colo. Rev. Stat. Section 25-15-208
et seq. and the regulations promulgated thereunder.
(j) Neither Owner nor any of the
Contributors have transported any Contaminants from the Real Property to another
location in violation of Environmental Laws.
(k) To the best of Contributors' knowledge,
there are no federal or state liens, as referenced under CERCLA and the
regulations promulgated thereunder, or under any other applicable Environmental
Law that have attached to the Real Property.
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(l) Contributors and Owner have provided
MCRLP with all environmental site assessments, investigations, and documents and
all other Environmental Documents (as that term is defined below) in their
possession or under their control and shall continue to do so after execution of
this Agreement promptly upon its receipt.
(m) For purposes of this Agreement, the
following words shall have the respective meaning set forth below:
(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 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.
(ii) "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.
(iii) "Environmental Documents" shall
mean all environmental documentation in the possession or under the control of
Owner or the Contributors 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.
(iv) "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.
(26) Owner and each Contributor shall have timely
paid all Taxes (as defined herein) due and payable on or prior to the Closing
Date. Owner and each Contributor shall have timely filed all Tax Returns (as
defined herein) required to be filed on or prior
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to the Closing Date. Each such Tax Return is complete and accurate in all
respects. Owner and each Contributor shall have timely paid or will timely pay,
or shall have provided for or will provide for a cash reserve for the payment
of, all Taxes due and payable on or after the Closing Date for all taxable
periods (or portions thereof) ending on or prior to the Closing Date (a
"Pre-Closing Tax Period" or "Pre-Closing Tax Periods"). Owner and each
Contributor shall timely file all Tax Returns which relate to all Pre-Closing
Tax Periods but which are required to be filed after the Closing Date. Each such
Tax Return will be complete and accurate in all respects. True and complete
copies of all Tax Returns filed by Owner and each Contributor for taxable
periods beginning on or after January 1, 1994, and all written communications
relating thereto, have been, or will be upon request, delivered to Mack-Cali.
Owner has also provided, or will also provide upon request, to Mack-Cali copies
of: (i) any letter ruling, determination letter or similar document issued to
Owner by any Governmental Authority, and (ii) any closing or other agreement
entered into by Owner with any Government Authority. Except as set forth on
Schedule 5.1(z), there are no ongoing Audits or Audits pending or, to the
knowledge of Owner or any Contributors against the Property, any Contributors or
Owner. There are no agreements or waivers extending the statutory period of
limitations with respect to any such Tax Returns or for the assessment or
collection of any such Taxes. No claim has ever been made by a Governmental
Authority in a jurisdiction where Owner or any Contributor does not file Tax
Returns that it is or may be subject to taxation by that jurisdiction.
(27) Annexed hereto as Schedule 5.1(aa) is a
listing, for federal income tax purposes, of the following information, which is
true, complete and correct in all aspects for each item of Property contributed
through each Contributor's Interest: (i) its adjusted basis as of the first day
of Owner's taxable year which includes the Closing Date; (ii) the date placed in
service; (iii) the depreciation method; and (iv) the remaining useful life.
(28) Subject to the provisions of Section 5.5, no
representation or warranty made by Owner or any Contributor contained in this
Agreement contains any untrue statement of a material fact or omits to state any
material fact necessary, in light of the circumstances under which it was made,
in order to make the statements herein 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.
(29) As used throughout this Agreement, the
phrases "to Contributor's knowledge," "to the knowledge of Contributor," "to the
best of Contributor's knowledge" "to Owner's knowledge," "to the knowledge of
Owner," "to the best of Owner's knowledge" or any similar derivation thereof,
shall mean the actual (not constructive) knowledge of Terrence Claassen, David
Goldberg, Chetter Latcham, Steve Leonard, Rich Majors, Adel Nassif, Chuck Peck
and Della Wegman, without having undertaken any independent investigation of
facts or legal issues without having any duty to do so, and without imputing to
the aforementioned persons
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the knowledge of any employee, agent, representative or affiliate of
Contributors or of any other person or entity.
(30) Annexed hereto as Schedule 5.1(dd)(i) is a
true, complete and correct copy of Owner's operating agreement, as amended to
date, and same shall be unchanged and in effect on the Closing Date. Annexed
hereto as Schedule 5.1(dd)(ii) is a filed copy of the articles of organization
of Owner.
(31) Contributors have good and marketable title
to one-hundred (100%) percent of Owner and 100% of Contributors' Interests,
free of all liens and encumbrances whatsoever.
(32) Contributors have the power and authority to
own their respective Contributors' Interests and to conduct and transact their
own business and the business of Owner.
(33) The contribution of Contributors' Interests
pursuant to this Agreement is authorized and within the power of each
Contributor and is legal and will not conflict with, result in any breach of any
of the provisions of, or constitute a default under the provisions of Owner's
operating agreement or other instrument to which any Contributor is a party or
by which any Contributor may be bound.
(34) Neither MCRLP, nor Mack-Cali shall be
responsible, as a consequence of the contribution intended hereby, for any
obligation (including any Taxes) of Owner or Contributor or for any liability,
debt or obligation (including any Taxes) of Owner or Contributor to any third
party including, without limitation, any employees of Owner or Contributor or
any Employer Plan accruing during the period prior to Closing (and Contributor
hereby agrees to indemnify, defend and hold MCRLP and Mack-Cali harmless from
and against any such liability, debt or obligation, including any Taxes and
reasonable attorney's fees), except for any obligations or liabilities of Owner
or Contributor subject to which MCRLP or Mack-Cali has expressly agreed to
accept the assignment of Contributor's Interests and accruing during the period
following Closing. The representations and the indemnity set forth herein shall
be deemed to be material to MCRLP and Mack-Cali's obligation to perform
hereunder and shall survive the Closing.
(35) After the Closing, Contributors shall not be
entitled to receive from Owner any distribution or payment of indebtedness or
for any other reason whatsoever, except for cash and receivables with respect to
rent under the Leases for the period occurring prior to Closing to the extent
Contributor is entitled to same under Article 11, as of the date of Closing,
which shall be paid to Contributors.
ii. Intentionally Deleted.
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iii. All representations and warranties made in this
Agreement by Owner and the Contributors and those representations and warranties
made by the Contributors and the Contributor Unit Holders in the certificate
executed by each and delivered pursuant to Exhibit 10.2(ee) shall survive the
Closing Date for a period of one (1) year, except that the representations and
warranties set forth in clauses (a), (c), (w), (z) and (dd) through (hh) of
Section 5.1 shall survive such Closing Date for the applicable period of the
statute of limitations (unless otherwise specified herein), and shall not be
merged in the Interest Assignments. Notwithstanding the foregoing, to the extent
that a Tenant shall certify in its Estoppel Certificate (as defined below) as to
any of the matters which are contained in the representations and warranties
made by Owner and/or Contributors in Section 5.1(f) of this Agreement, then such
representations and warranties as to such matters shall be of no further force
or effect to the extent of any conflict. Apollo Real Estate Investment Fund II,
L.P., a Delaware limited partnership; Pacifica Holding Company, a Colorado
corporation; and Pacifica Holding Company, a Colorado limited liability company
(collectively, "Guarantor"), and Contributors, jointly and severally, shall,
pursuant to a separate indemnity agreement (the "Indemnity Agreement") in the
form attached hereto as Exhibit 5.3, indemnify and defend MCRLP and Mack-Cali,
and to hold MCRLP and Mack-Cali 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 MCRLP by reason of or resulting from any
breach, inaccuracy, incompleteness or non-fulfillment of the representations,
warranties, covenants and agreements of Owner and Contributors contained in this
Agreement to the full extent Owner or the Contributors would be liable therefor
under the terms of this Agreement. The foregoing indemnity shall be deemed to be
material to MCRLP and Mack-Cali's obligation to perform hereunder and shall
survive the Closing. Notwithstanding the foregoing, Steven C. Leonard IRA,
Cynthia O. Leonard IRA, Steven Ohren IRA and the members of Contributors shall
have no liability for any loss resulting from any breach of the foregoing
representations and warranties. In addition, except as set forth in Section 28,
MCRLP and Mack-Cali shall not have a right to bring a claim against Contributors
by virtue of any of the representations or warranties being false or misleading
unless and until the aggregate damages to MCRLP and/or Mack-Cali are reasonably
expected to exceed $100,000.00, but thereafter MCRLP and/or Mack-Cali may bring
a claim against Contributors for the entire amount of its aggregate damages.
iv. Each Contributor acknowledges that it is not in a
significantly disparate bargaining position with respect to MCRLP or Mack-Cali
in connection with the transaction contemplated by this Agreement and that such
Contributor was represented by legal counsel in connection with this
transaction.
v. Mack-Cali and MCRLP each acknowledges that it has
had, or will have had, as of the Closing, sufficient time to review all
materials and information set forth in Schedule 5.5, and sufficient time and
access to review and investigate the Property. Notwithstanding any other
provision of this Agreement, except as set forth in Subsections 5.1(d),
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(e) and (f) as they relate to the Leases, the Estoppels and the Rent Rolls, the
representations and warranties of Owner and Contributors as set forth herein or
in each Contributor's Closing Certificate are hereby modified to be made true to
the extent that, as of the date hereof with respect to the representations and
warranties made herein, and as of the Closing Date with respect to the
representations and warranties made by Owner and each Contributor as of the
Closing Date, (i) information contained in the records made available as set
forth Schedule 5.5 no longer makes the subject representation or warranty not
true, whether or not either Mack-Cali or MCRLP has actual knowledge of such
information, or (ii) either Mack-Cali or MCRLP has knowledge that the subject
representation or warranty is untrue, or (iii) Contributors have delivered or
made available to any of the individuals described in Section 6.1(l) other
written information disclosing that the subject representation or warranty is
not true, whether or not either Mack-Cali or MCRLP has actual knowledge of such
information.
f. REPRESENTATIONS AND WARRANTIES OF MACK-CALI AND MCRLP.
i. In order to induce Contributors to perform as
required hereunder, Mack-Cali and MCRLP hereby jointly and severally warrant and
represent the following:
(1) (i) MCRLP 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 MCRLP 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) Mack-Cali is a duly organized and
validly existing corporation organized and in good standing under the laws of
the State of Maryland, has all requisite power and authority to execute and
deliver this Agreement and all other documents and instruments to be executed
and delivered by it hereunder, and to perform its obligations hereunder and
under such other documents and instruments in order to permit MCRLP to acquire
the Property in accordance with the terms and conditions hereof. All necessary
actions of the board of directors of Mack-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.
(2) This Agreement and the agreements and other
documents to be executed and delivered by each of Mack-Cali and MCRLP hereunder,
when duly executed and delivered, will be the legal, valid and binding
obligation of each of Mack-Cali and MCRLP, enforceable in accordance with the
terms of this Agreement. The performance by each of
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Mack-Cali and MCRLP 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 Mack-Cali and
MCRLP 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 Mack-Cali and MCRLP is a party or by which each of
its assets are or may be bound.
(3) The Contributor Units to be issued to
Contributors and/or the Unit Holders are duly authorized and, when issued by
MCRLP, will be fully paid and non-assessable, free and clear of any mortgage,
pledge, lien, encumbrance, security interest, claim or rights of interest of any
third party of any nature whatsoever. The shares of Common Stock to be issued by
Mack-Cali upon redemption of the Contributor Units will be reserved for future
listing with the New York Stock Exchange prior to the date upon which any of the
same will be 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.
(4) MCRLP has furnished to Contributors a true and
complete copy of the OP Agreement, as amended to date.
(5) Mack-Cali has caused to be delivered to
Contributors copies of the OP Agreement. The SEC Documents were, and those
additional documents filed between the date hereof and the Closing will be,
prepared and filed in compliance with the rules and regulations promulgated by
the SEC, and do not and will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein in order to
make the statements contained therein, in light of the circumstances under which
they were made or will be made, not misleading.
(6) The consolidated financial statements included
in the SEC Documents have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the period involved
(except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Form 10-Q) and present fairly (subject, in
the case of the unaudited statements, to normal, recurring year-end audit
adjustments) the consolidated financial position of Mack-Cali and its
Subsidiaries at the dates thereof and the consolidated results of operations and
cash flows for the periods then ended. For purposes of this Agreement,
"Subsidiaries" shall mean (i) any entity of which Mack-Cali (or other specified
entity) shall own directly or indirectly through a subsidiary, a nominee
arrangement or otherwise (x) at least a majority of the outstanding capital
stock (or other shares of beneficial interest), or (y) at least a majority of
the partnership, joint venture or similar interests; and (ii) any entity in
which Mack-Cali (or other specified entity) is a general partner or joint
partner, including without limitation MCRLP. "Subsidiaries" shall specifically
exclude Mack-Cali Services, Inc. and The Grove Street Urban
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Renewal Corp., which are the only non-qualified REIT subsidiaries of Mack-Cali
as of the date hereof.
(7) No action, suit, claim, investigation or
proceeding, whether legal or administrative or in mediation or arbitration, is
pending or, to the best of each of Mack-Cali's and MCRLP's knowledge,
threatened, at law or in equity, against either of Mack-Cali or MCRLP before or
by any court or federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality which would prevent either
of Mack-Cali or MCRLP from performing its respective obligations pursuant to
this Agreement.
(8) The execution and delivery of this Agreement
and the performance by each of Mack-Cali and MCRLP 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 Mack-Cali or MCRLP, including
without limitation, the United States of America, the States of New York and New
Jersey or any political subdivision of any of the foregoing, or any decision or
ruling of any arbitrator to which Mack-Cali or MCRLP is a party or by which
Mack-Cali or MCRLP is bound or affected.
(9) (1) Mack-Cali (A) 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 ("REIT") within the meaning of Section 856 of the
Internal Revenue Code of 1986, as amended (the "Code"), (B) has complied with
all applicable provisions of the Code which would have enabled it to qualify as
a REIT for 1995 and 1996, (C) has operated, and intends to continue to operate,
in such a manner so as to enable it to qualify as a REIT for 1998 and subsequent
years, and (D) has not taken or omitted to take any action which would
reasonably be expected to cause its disqualification as a REIT, and no challenge
to its REIT status is pending or, to Mack-Cali's knowledge, threatened.
(2) Mack-Cali has timely filed with the
appropriate Governmental Authority all Tax Returns required to be filed by it or
has timely requested extensions and any such request has been granted and has
not expired. Each such Tax Return is true and correct in all material respects.
All Taxes shown as owed by Mack-Cali or any of its Subsidiaries on any Tax
Return have been paid or accrued, except for Taxes being contested in good faith
and for which adequate reserves have been established. None of Mack-Cali or any
of its Subsidiaries has executed or filed with the Internal Revenue Service or
any other taxing authority any agreement now in effect extending the period for
assessment or collection of any Tax.
(3) To its knowledge, as of the date hereof,
Mack-Cali is a "domestically-controlled" REIT within the meaning of Section
897(h)(4)(B) of the Code.
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(10) All of Mack-Cali's real property and other
material assets are owned by Mack-Cali indirectly through its ownership of MCRLP
and MCRLP's Subsidiaries.
(11) Neither Mack-Cali nor MCRLP 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
Mack-Cali's or MCRLP's creditors, suffered the appointment of a receiver to take
possession of all, or substantially all, of Mack-Cali's or MCRLP's assets,
suffered the attachment or other judicial seizure of all, or substantially all,
of Mack-Cali's or MCRLP'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.
(12) As used throughout this Agreement, the
phrases "to Mack-Cali's knowledge," "to the knowledge of Mack-Cali," "to the
best of Mack-Cali's knowledge" "to MCRLP's knowledge," "to the knowledge of
MCRLP," "to the best of MCRLP's knowledge" or any similar derivation thereof,
shall mean the actual (not constructive) knowledge Tim Jones, John DeBari,
Daniel Wagner, Andrew Greenspan, Roger W. Thomas, and Terry Noyes, without
having undertaken any independent investigation of facts or legal issues without
having any duty to do so, and without imputing to the aforementioned persons the
knowledge of any employee, agent, representative or affiliate of Mack-Cali,
MCRLP or of any other person or entity.
ii. Each of Mack-Cali and MCRLP 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
Mack-Cali and MCRLP were represented by legal counsel in connection with this
transaction.
iii. All representations and warranties made by
Mack-Cali and MCRLP in this Agreement shall survive the Closing Date for a
period of eighteen (18) months, except that the representations and warranties
set forth in clauses (a) and (b) of Section 6.1 shall survive the Closing Date
for the applicable period of the statute of limitations (unless otherwise
specified herein), and shall not be merged in the Assignment of Contributor's
Interest. Mack-Cali and MCRLP agree to indemnify and defend Contributors, and to
hold Contributors 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 Contributors by reason of or resulting from any breach,
inaccuracy, incompleteness or non-fulfillment of the representations,
warranties, covenants and agreements of Mack-Cali and MCRLP contained in this
Agreement. Notwithstanding the foregoing, the partners and/or shareholders of
MCRLP and Mack-Cali shall have no liability for any loss resulting from any
breach of the foregoing representations and warranties. In addition,
Contributors shall not have a right to bring a claim against Mack-Cali or MCRLP
by virtue of any of the representations or warranties being false or misleading
unless and until (a) such false or misleading representation or
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warranty has a material adverse affect on the transactions contemplated herein;
and (b) the aggregate damages to Contributors is reasonably expected to exceed
$100,000.00, but thereafter Contributors may bring a claim against Mack-Cali or
MCRLP for the entire amount of their aggregate damages.
g. INTERIM OPERATING COVENANTS OF CONTRIBUTORS.
i. Contributors covenant and agree that between the date
hereof and the Closing Date (the "Interim Period"), they shall perform or
observe or cause Owner to perform or observe the following with respect to the
Real Property:
(1) Owner will complete any capital expenditure
program currently in process or anticipated to be completed. Owner and
Contributors 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.
(2) Owner, as landlord, will not enter into any
new leases with respect to the Property, or renew or modify any Lease, without
MCRLP's prior written consent; provided, however that Owner shall be permitted
to enter into new leases, renewals or modifications upon prior notice to, but
without the prior written consent of MCRLP, so long as such lease, renewal or
modification is on market terms and conditions with bona fide third parties and
is the type of transaction which Owner currently enters into in the ordinary
course of its business.
(3) Owner shall comply with and/or remedy all
violations of statutes, ordinances, rules, regulations, orders, codes,
directives or requirements affecting the Real Property, whether or not such
violations are now noted in the records of or have been issued by any
Governmental Authorities prior to the Closing, and the Real Property shall be
conveyed free of any such violations, including, without limitation, violations
of Environmental Laws.
(4) Neither Owner nor any Contributors shall:
(a) Enter into any agreement requiring Owner
to do work for any Tenant after the Closing Date without first obtaining the
prior written consent of MCRLP, unless such agreement is on market terms and
conditions with bona fide third parties and is the type of agreement which Owner
currently enters into in the ordinary course of its business, in which case no
consent of MCRLP will be required; or
(b) Accept the surrender of any Service
Contract or Lease, or grant any concession, rebate, allowance or free rent,
except in its ordinary course of business on market terms, with bona fide third
parties and upon prior written notice to MCRLP.
(c) Intentionally Deleted.
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(5) Owner shall not, between the date hereof and
the Closing Date, apply any Security Deposits with respect to any Tenant in
occupancy on the Closing Date, except in its ordinary course of business. Owner
and Contributors shall provide MCRLP with an updated schedule of Security
Deposits at the Closing.
(6) Between the date hereof and the Closing Date,
Owner will not renew, extend or modify any of the Service Contracts without the
prior written consent of MCRLP unless such is done by Owner in the ordinary
course of its business and such Service Contracts contain a right to terminate
on thirty (30) days' notice with no material cost to exercise such right, in
which case no consent of MCRLP will be required.
(7) Owner and Contributors shall not remove or
permit the removal of any Personal Property located in or on the Property,
except as may be required for repair and replacement. All replacements shall be
free and clear of liens and encumbrances except to the extent the original
Personal Property was so encumbered and shall be of quality at least equal to
the replaced items and shall be deemed included in this sale, without cost or
expense to MCRLP, other than expressly provided herein.
(8) Owner and Contributors shall, upon request of
MCRLP at any time after the date hereof, assist MCRLP in its preparation of
audited financial statements, statements of income and expense, and such other
documentation as MCRLP may reasonably request, covering the period of Owner's
ownership of the Real Property.
(9) Between the date hereof and the Closing Date,
Owner will make all required payments under any mortgage affecting the Real
Property within any applicable grace period, but without reimbursement by MCRLP
therefor. Owner shall also comply with all other material terms covenants and
conditions of any mortgage on the Real Property.
(10) Owner shall not cause or permit the Real
Property or any interest therein (including without limitation the Improvements
or the Contributors' Interests), to be alienated, mortgaged, licensed,
encumbered or otherwise be transferred.
(11) Owner agrees to maintain and keep in full
force and effect the hazard, liability and casualty insurance policies it is
currently maintaining, which policies Contributors represent are sufficient 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.
(12) Owner and Contributors shall permit MCRLP and
its authorized representatives to inspect the Books and Records of their
operations at all reasonable
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times upon reasonable notice. All Books and Records not conveyed to MCRLP
hereunder shall be maintained for MCRLP's inspection at each Contributor's
address as set forth in Exhibit A hereto.
(13) Owner and Contributors shall:
(a) promptly notify MCRLP of, and promptly
deliver to MCRLP, a certified true and complete copy of any notice Owner or
Contributors may receive, on or before the Closing Date from any Governmental
Authority concerning a violation of Environmental Laws or Discharge of
Contaminants;
(b) contemporaneously with the signing and
delivery of this Agreement, and subsequently promptly upon receipt by Owner or
its representatives, deliver to MCRLP a certified true and complete copy of all
Environmental Documents; and
(c) timely provide MCRLP 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 MCRLP
informed of all substantive negotiations and discussions with respect to the
foregoing matters on an on-going basis.
ii. Prior to the Closing, Contributors shall deliver to
MCRLP reviewed Property Financials as set forth in Section 5.1(v). Within thirty
(30) days after the Closing Date, Contributors shall deliver to MCRLP Property
Financials, as set forth in Section 5.1(v), through the Closing Date. The
provisions of this Section 7.2 shall survive the Closing Date.
iii. Intentionally Deleted.
iv. Intentionally Deleted.
v. Owner and Contributors will timely pay all Taxes due
and payable by each of them during the Interim Period. Owner and Contributors
will timely file all Tax Returns required to be filed by them during the Interim
Period. Each such Tax Return will be complete and accurate in all respects and
will be filed on a basis consistent with past practice. A copy of all such Tax
Returns shall be delivered to Mack-Cali at least three (3) days prior to such
Tax Returns being filed. The obligations set forth in this Section 7.5 shall
survive the expiration or earlier termination of this Agreement and/or shall
survive the Closing Date for the applicable period of the statute of
limitations.
h. INTENTIONALLY DELETED.
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i. ESTOPPEL CERTIFICATES.
i. Contributors agree to deliver to each Tenant, no
later than the date hereof, an estoppel certificate in the form annexed hereto
as Exhibit 9.1 for Tenant's execution, completed to reflect Tenant's particular
Lease status. Contributors agree to use commercially reasonable efforts to
obtain from all Tenants the estoppel certificates in such form; provided,
however, that if any Tenant shall refuse to execute an estoppel letter in such
form, Contributors shall nevertheless use commercially reasonable efforts to
obtain estoppel certificates in the form in which each Tenant is obligated to
deliver the same as provided in its Lease. Contributors agree to deliver to
MCRLP copies of all estoppel letters received by Tenants, in the form received
by Owner or Contributors. The estoppel certificates required to be obtained
pursuant to this Section 9.1 are collectively referred to as the "Estoppel
Certificates".
ii. As a condition to the Closing, Contributors shall
deliver (a) an Estoppel Certificate from all Tenants which lease 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
including the Tenants set forth in Clause 9.2(a) above.
iii. For an Estoppel Certificate to be deemed delivered
for purposes of this Agreement, it must certify that 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.
j. CLOSINGS.
i. (a) Closing. The consummation of the transactions
contemplated hereunder with respect to the Property (the "Closing") shall take
place at the offices of Brownstein, Hyatt, Farber & Strickland, P.C., 410
Seventeenth Street, 22nd Floor, Denver, Colorado, 80202-4437, on or about March
25, 1998 (the "Closing Date"). Upon notice to Contributors, MCRLP may elect to
accelerate the Closing Date to a date not less than five (5) days after the date
of MCRLP's notice.
(2) Intentionally Deleted.
(3) Intentionally Deleted.
(4) Intentionally Deleted.
ii. On the Closing Date, except as otherwise set forth
in subsections 10.2(z) and 10.2(aa), Contributor, at its sole cost and expense,
will deliver or cause to
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be delivered to MCRLP the following documents, fully executed by all parties
thereto other than MCRLP or parties claiming by, through or under MCRLP:
(1) Duly executed and acknowledged assignments
from each Contributor of such Contributor's Interest (the "Interest
Assignments"), in the form annexed hereto as Exhibit 10.2(a), to MCRLP or its
designee, as assignee, together with all applicable and requisite consents,
mortgagee consents and resolutions authorizing the assignment and transaction.
(2) All original Leases and all other documents
pertaining thereto, and certified copies of such Leases or other documents where
Contributors, using their best efforts, are unable to deliver originals of the
same.
(3) All other original documents or instruments
referred to herein, including without limitation the Service Contracts, Licenses
and Permits and Books and Records, and certified copies of the same where
Contributors, using their best efforts, are unable to deliver originals of the
same.
(4) Intentionally Deleted.
(5) Intentionally Deleted.
(6) Duly executed and acknowledged Omnibus
Assignment in the form of Exhibit 10.2(f).
(7) Intentionally Deleted.
(8) Affidavits and indemnities required by the
Title Company in connection with non-imputation title insurance endorsements and
such other documents and instruments required by the Title Company, executed by
Contributors certifying (i) against any work done or supplies delivered to the
Real Property which might be grounds for a materialman's or mechanic's lien
under or pursuant to Colorado Lien Law, in form sufficient to enable the Title
Company to affirmatively insure MCRLP against any such lien, (ii) that the
signatures on the Interest Assignments are sufficient to bind Contributors and
convey the Contributors' Interest to MCRLP, (iii) the Rent Roll, and (iv) that
Contributors shall indemnify the Title Company against any loss resulting from
the imputation of knowledge to MCRLP, or Mack-Cali through Contributors.
(9) Affidavits and other instruments, including
but not limited to all organizational documents of Owner and Owner's members, as
applicable, including Owner's operating agreements, filed copies of the articles
of organization and good standing certificates (or its equivalent), reasonably
requested by MCRLP and the Title Company evidencing
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the power and authority of Owner and Contributors to enter into this Agreement
and any documents to be delivered hereunder, and the enforceability of the same.
(10) The original Estoppel Certificates.
(11) 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 MCRLP to realize upon the same and as may
be required by the issuing banks of any cash and non-cash security deposits to
reflect a change in the beneficial interest of the Owner and changes in
signatories to the bank accounts holding the cash and non-cash security
deposits.
(12) A certificate indicating that the
representations and warranties of Owner and Contributors made in this Agreement
are true and correct as of the Closing Date or if there have been any changes, a
description thereof.
(13) A Rent Roll for the Property, current as of
the Closing Date, certified by Owner and Contributors as being true and correct
in all material respects.
(14) All proper instruments as shall be reasonably
required for the conveyance to MCRLP of all right, title and interest, if any,
of Owner and Contributors 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 and Improvements.
(15) In order to avoid the imposition of the
withholding tax payment pursuant to Section 1445 of the Code, a certificate
which is in a form acceptable to Mack-Cali and which is signed by each
Contributor (or an appropriate officer of each Contributor that is an entity) to
the effect that such Contributor is not a "foreign person" as that term is
defined in Section 1445(f)(3) of the Code.
(16) All such transfer and other tax declarations
and returns and information returns, duly executed and sworn to by Contributors
as may be required of Contributors by law in connection with the transfer of
Contributors' Interests to MCRLP, including but not limited to, Internal Revenue
Service forms and the declaration required to be filed pursuant to Title 39,
Article 14 of the Colorado Revised Statutes.
(17) A statement setting forth all adjustments and
prorations shown thereon.
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(18) A Tradenames Assignment Agreement
substantially in the form of Exhibit 10.2(r).
(19) Estoppel certificates addressed to MCRLP from
the mortgagees of the mortgages, if any, in form and substance reasonably
acceptable to MCRLP.
(20) An opinion of counsel from Brownstein, Hyatt,
Farber & Strickland, P.C., substantially in the form of Exhibit 10.2(t)
regarding the due execution, delivery, and enforceability of this Agreement, the
foregoing documents and the contribution by each Contributor of its
Contributor's Interest to MCRLP.
(21) Duly executed and acknowledged Indemnity
Agreement substantially in the form of Exhibit 5.3.
(22) Intentionally Deleted.
(23) A Registration Rights Agreement substantially
in the form of Exhibit 10.3(g).
(24) Intentionally Deleted.
(25) Such other documents as may be reasonably
required by MCRLP or as may be appropriate to effectuate the consummation of the
transactions contemplated by this Agreement.
(26) At least fifteen (15) days prior to the
Closing Date, a schedule setting forth, with respect to each Contributor that
will receive Contributor Units as part of the consideration: (i) the identity of
such Contributors and the amount of Contributor Units so allocated to any such
Contributor; (ii) the gross fair market value of the interest that such
Contributor is transferring to MCRLP for purposes of determining the gain or
loss that will be recognized for federal income tax purposes as a result of the
transfer; (iii) the adjusted basis of such interest immediately prior to the
contribution; (iv) the amount of cash and Contributor Units allocated to such
interest; and (v) the amount of any liability relating to such interest that
MCRLP will either assume or to which such interest will be subject and which
does not constitute a "qualified liability" within the meaning of Treasury
Regulations Section 1.707-5(a)(6).
(27) At least fifteen (15) days prior to the
Closing Date, a schedule setting forth: (i) any Contributor named for purposes
of Section 10.2(z)(i) which is to receive less than the full amount of
Contributor Units indicated for purposes of Section 10.2(z)(i); and (ii) the
names of those persons who are to receive Contributor Units that each such
Contributor would otherwise be entitled to receive and the amount of units that
any such persons are to receive.
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At least fifteen (15) days prior to the Closing Date, each Contributor to which
this Section 10.2(aa) is relevant shall issue "direction letters" to MCRLP (in
the form acceptable to MCRLP), to the effect that each such Contributor
authorizes the issuance by MCRLP of Contributor Units directly to such persons
(and in such amounts) which are set forth for purposes of Section 10.2(aa)(ii).
(28) A letter from each applicable municipal
department or agency having jurisdiction that the Property is in compliance with
the laws, codes, rules, regulations and ordinances regarding (i) zoning, (ii)
building, (iii) health and (iv) fire, life and safety.
(29) A computer diskette containing any closing or
other documents executed in connection with this transaction and prepared by
Owner, Contributors or their counsel, in WordPerfect or Microsoft Word format.
(30) All original organizational documents
relating to Owner and the Contributors, and all statements of accounts, books
and records and insurance policies.
(31) A certificate executed by each Contributor
Unit Holder and each Contributor receiving Contributor Units, substantially in
the form of Schedule 10.2(ee).
(32) A counterpart to the OP Agreement
substantially in the form of Exhibit 10.2(ff), executed by each Contributor Unit
Holder and each Contributor receiving Contributor Units.
iii. On the Closing Date, Mack-Cali and MCRLP, at their
sole cost and expense, will deliver or cause to be delivered to Contributors the
following documents, fully executed by all parties thereto other than
Contributors or parties claiming by, through or under Contributors:
(1) The Cash Payment, net of adjustments and
prorations.
(2) The Permanent Certificates representing, in
the aggregate, the Contributor Units.
(3) Intentionally Deleted.
(4) Duly executed and acknowledged Omnibus
Assignment in the form of Exhibit 10.2(f) annexed hereto.
(5) A certificate indicating that the
representations and warranties of Mack-Cali and MCRLP made in this Agreement are
true and correct as of the Closing Date or if there have been any changes, a
description thereof.
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(6) Affidavits and other instruments, including
but not limited to all organizational documents of Mack-Cali and MCRLP including
limited partnership agreements, filed copies of limited partnership
certificates, articles of organization, and good standing certificates,
reasonably requested by Contributors evidencing the power and authority of
Mack-Cali and MCRLP to enter into this Agreement and any documents to be
delivered hereunder, and the enforceability of the same.
(7) A Registration Rights Agreement substantially
in the form of Exhibit 10.3(g).
(8) Intentionally Deleted.
(9) A Tradenames Assignment Agreement
substantially in the form of Exhibit 10.2(r).
(10) Intentionally Deleted.
(11) Duly executed and acknowledged Interest
Assignments in the form of Exhibit 10.2(a).
(12) Such other documents as may be reasonably
required or appropriate to effectuate the consummation of the transactions
contemplated by this Agreement.
iv. Contributor shall pay for the premium charges and
costs for title insurance policies (but not any endorsements to such policies
required by Mack-Cali); all survey costs; all costs incurred to repay or satisfy
any and all liens; all costs incurred with respect to non-imputation
endorsements to title insurance policies obtained by MCRLP; all leasing
commissions due to Tenants in connection with the initial and/or current terms
of their respective Leases; all costs of tenant improvement concessions due to
Tenants in connection with the initial and/or current terms of their respective
Leases; and all customary prorations and apportionments. Mack-Cali shall pay for
the costs of all customary documentary and recording fees, if any; the cost of
any endorsements to its title insurance policies (with the exception of any
non-imputation endorsements); all due diligence investigations costs (including,
without limitation, the cost of all Phase I Reports for the Property, which
environmental assessment reports shall be dated no more than thirty (30) days
prior to the Closing Date); and all customary prorations and apportionments.
Each party shall be responsible for its own attorney's fees. The provisions of
this Section 10.4 shall survive the Closing.
v. 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 Contributors related to periods prior to the
Closing, such claims shall be the responsibility of Contributors, and
Contributors shall jointly and severally indemnify, defend and hold harmless
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MCRLP (and its 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.
vi. Mack-Cali and MCRLP acknowledge and agree that,
except as set forth in this Agreement, MCRLP is acquiring the Property in its
"as is" condition "subject to all faults" and specifically and expressly without
any warranties, representations or guarantees, either express or implied, of any
kind, nature, or type whatsoever from or on behalf of Contributors. Mack-Cali
and MCRLP acknowledge that except for documents, reports and information related
to the environmental integrity of the Real Property, neither Mack-Cali nor MCRLP
has relied and is not relying on any information, document, reports, sales
brochure or other literature, maps or sketches, financial information,
projections, pro formas or statements, that may have been given by or made by or
on behalf of Contributors with respect to the Property. MCRLP and Mack-Cali
further acknowledge that all materials relating to the Property which have been
provided by Contributors, including but not limited to, the Phase I Reports,
have been provided without any warranty or representation, expressed or implied
as to their content, suitability for any purpose, accuracy, truthfulness or
completeness and neither MCRLP nor Mack-Cali shall have any recourse against
Contributors or its counsel, advisors, agents, officers, directors or employees
for any information in the event of any errors therein or omissions therefrom.
Contributors do not warrant or make any representation,
express or implied, as to the merchantability, quantity, quality, condition,
suitability or fitness of the Property for any purpose whatsoever, including,
without limitation, its compliance with applicable building codes and
ordinances, zoning laws, environmental laws including, without limitation, the
Clean Air Act, CERCLA and the Super Fund Amendments and Reauthorization Act
("SARA"), the Americans with Disabilities Act, and any other federal, state or
local statutes, codes or ordinances. MCRLP also acknowledges and agrees that (i)
the representations and warranties of Contributors in Section 5 of this
Agreement and (ii) provisions in this Agreement for delivery of existing Phase I
Reports and inspection and investigation of the Property are adequate to enable
MCRLP to make MCRLP's own determination with respect to the suitability or
fitness of the Property, including, without limitation, its compliance with
applicable building codes and ordinances, zoning laws, environmental laws
including, without limitation, the Clean Air Act, CERCLA and SARA, the Americans
with Disabilities Act, and any other federal, state or local statutes, codes or
ordinances.
Except to the extent (a) caused by a breach of any of
Contributors' representations hereunder; (b) related to claims by or liabilities
to third parties unrelated to Mack-Cali or MCRLP; or (c) as otherwise expressly
set forth herein, including, without limitation, as indemnified under the
Indemnity Agreement, MCRLP and Mack-Cali, for themselves and their successors
and assigns, hereby release each of the Contributors, and their agents,
employees, partners, officers, directors, members, managers, contractors,
consultants and representatives from, and waive any and all causes of action or
claims against any of such persons for (i) any and all
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liability attributable to any physical condition of or at the Property,
including, without limitation, the presence on, under or about the Property of
any materials the release or storage of which is regulated by law; (ii) any and
all liability resulting from the failure of the Property to comply with any
applicable laws; and (iii) any liabilities, damages or injury arising from,
connected with or otherwise caused by statements, opinions or information
obtained from any of such persons with respect to the Property.
k. ADJUSTMENTS.
i. The following items under (a) through (g) with
respect to the Real Property are to be apportioned as of midnight on the date
preceding the Closing:
(1) Rents, escalation charges and percentage rents
payable by Tenants as and when collected. All moneys received from Tenants from
and after the Closing shall belong to MCRLP and shall be applied by MCRLP to
current rents and other charges under the Leases. After application of such
moneys to current rents and charges, MCRLP agrees to remit to Contributors any
excess amounts paid by a Tenant to the extent that such Tenant was in arrears in
the payment of rent prior to the Closing.
(2) A cashier's or certified check or wire
transfer to the order of MCRLP in the amount of all cash Security Deposits and
any prepaid rents, together with interest required to be paid thereon. At the
election of MCRLP, such amount may be allotted to MCRLP as a credit against the
Cash Payment.
(3) Utility charges payable by Owner, including
without limitation, electricity, water charges and sewer charges. If there are
meters on the Real Property, Contributors will cause readings of all said meters
to be performed not more than ten (10) days prior to the Closing Date.
(4) Amounts payable under the Service Contracts
other than those Service Contracts which MCRLP has elected not to assume.
(5) 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.
(6) The value of fuel stored at any of the Real
Property, at Owner's most recent cost, including taxes, on the basis of a
reading made within fifteen (15) days prior to the Closing by Owner's supplier.
(7) Intentionally Deleted.
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ii. Intentionally Deleted.
iii. At the Closing, Contributors shall deliver to MCRLP
a list of additional rent, however characterized, under all Leases, including
without limitation, real estate taxes, electrical charges, utility costs and
operating expenses (collectively, "Additional Rents") billed to Tenants for the
calendar year 1998 (both on a monthly basis and in the aggregate), the basis for
which the monthly amounts are being billed and the amounts incurred by Owner on
account of the components of Additional Rent for calendar year 1998. Upon the
reconciliation by MCRLP of the Additional Rents billed to Tenants, and the
amounts actually incurred for calendar year 1998, Contributors and MCRLP shall
be liable for overpayments of Additional Rents, and shall be entitled to
payments from Tenants, as the case may be, on a pro rata basis based upon each
party's period of ownership during calendar year 1998. Notwithstanding the
foregoing, the calculation of real estate taxes, and the collection of
Additional Rents from Tenants attributable to such real estate taxes, as
reflected on the closing statement related hereto, shall be final as of the
Closing Date.
iv. Intentionally Deleted.
v. If, on the Closing Date, the Property or any part
thereof shall be or shall have been affected by an assessment or assessments
which are or may become payable in annual installments, all the unpaid
installments of any such assessment due and payable on or prior to the Closing
Date shall be paid and discharged by Contributors on the Closing Date.
vi. 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 Colorado.
vii. Any errors in calculations or adjustments shall be
corrected or adjusted as soon as practicable after the Closing.
viii. The provisions of this Section 11 shall survive
the Closing Date.
l. CONDITIONS PRECEDENT TO CLOSING.
i. The obligations of Contributors to deliver the
Contributors' Interests and to perform the other covenants and obligations to be
performed by Contributors 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):
(1) The representations and warranties made by
MCRLP and Mack-Cali herein shall be true and correct in all material respects
with the same force and effect
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as though such representations and warranties had been made on and as of the
Closing Date; provided, however, that a failure of any representations or
warranties to be true and correct in all material respects shall not give rise
to a claim by Contributors hereunder so long as such matters do not have a
material adverse effect on the transactions contemplated herein.
(2) MCRLP and Mack-Cali shall have executed and
delivered to Contributors all of the documents provided herein for said
delivery.
(3) Intentionally Deleted.
(4) Mack-Cali and MCRLP shall have performed all
covenants and obligations undertaken by Mack-Cali and MCRLP herein in all
material respects and complied with all material conditions required by this
Agreement to be performed or complied with by them on or before the Closing
Date.
ii. The obligations of Mack-Cali and MCRLP to deliver
the Permanent Certificates to Contributor Unit Holders and to accept the
Contributors' Interests and Mack-Cali's and MCRLP's obligation to perform the
other covenants and obligations to be performed by Mack-Cali and MCRLP 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 Mack-Cali or MCRLP):
(1) Subject to Section 5.5(a) the representations
and warranties made by Owner and Contributors 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. For
the purposes of the Closing condition described in this Section 12.2(a), any
limitation to the knowledge, best knowledge, or actual knowledge in any
representation, warranty, covenant or agreement made by Owner and Contributors
herein shall be inapplicable.
(2) Contributors shall have performed all
covenants and obligations undertaken by Contributors 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.
(3) The Title Company is unconditionally prepared
to issue to MCRLP a Title Policy meeting the requirements set forth in Section 4
hereof for an "insurable title".
(4) The Real Property shall be in compliance with
all Environmental Laws.
(5) Contributors shall have executed and delivered
to MCRLP all of the documents or other requisite documents provided for herein
for said delivery.
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m. INTENTIONALLY DELETED.
n. LEASING COMMISSIONS AND TENANT IMPROVEMENT OBLIGATIONS.
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 Contributor.
MCRLP shall be credited at Closing as set forth on Schedules 5.1(f) and 5.1(m)
respectively with respect to certain tenant improvement and leasing commission
obligations, but Contributors shall remain liable for any amounts due and owing
in excess of such credits. All leasing commissions on account of extensions or
renewals of Leases made after the Closing Date shall be paid by MCRLP. All
tenant improvements obligations shall be satisfied prior to the Closing Date.
The provisions of this Section shall survive the Closing.
o. ASSIGNMENT.
This Agreement may not be assigned by Mack-Cali or MCRLP
except to a directly or indirectly wholly-owned subsidiary or subsidiaries of
Mack-Cali or MCRLP, 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
Mack-Cali or MCRLP shall be deemed null and void and of no force and effect.
Notwithstanding anything to the contrary contained herein, Mack-Cali or MCRLP
may assign the Contributors' Interests to various entities, provided that each
of such entities is a Permitted Assignee. A copy of any assignment permitted
hereunder, together with an agreement of the assignee assuming all of the terms
and conditions of this Agreement to be performed by Mack-Cali or MCRLP with
respect to the portion of the Real Property, in form reasonably satisfactory to
counsel for Contributors, shall be delivered to the attorneys for Contributors
prior to the Closing, and in any event, no such assignment shall relieve
Mack-Cali and MCRLP from their obligations under this Agreement.
p. BROKER.
Mack-Cali, MCRLP, and Contributors represent that, with
the exception of Sonnenblick Goldman Ltd. , Conning Asset Management, Inc. and
Pacifica Holding Company LLC (collectively, "Brokers") 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 they may sustain, incur or be exposed to by reason of any breach of the
foregoing representation and warranty. Notwithstanding the foregoing,
Contributors shall pay in full any
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commission, fee or other compensation due the Brokers pursuant to separate
agreements, and Guarantor and Contributors agree to indemnify, defend and hold
MCRLP and Mack-Cali harmless from and against any and all loss, cost, damage,
liability, or expense, including reasonable attorneys' fees, which MCRLP or
Mack-Cali may sustain, incur or be exposed to by reason of Contributor's failure
to pay in full the Brokers pursuant to such separate agreements. The provisions
of this Section shall survive the Closing and/or other termination of this
Agreement.
q. CASUALTY LOSS.
i. Subject to Section 7.1(h), Owner and Contributors
shall continue to maintain, or cause any Tenant to maintain, in all material
respects, the fire and extended coverage insurance policies with respect to the
Property (the "Insurance Policies") which are currently in effect, through the
date that said coverage currently expires, which obligation shall survive the
Closing.
ii. If at any time prior to the Closing Date, all or any
portion of the Property is destroyed or damaged as a result of fire or any other
casualty (a "Casualty"), Contributors shall promptly give written notice
("Casualty Notice") thereof to MCRLP. Within ten (10) days after the receipt of
the Casualty Notice, MCRLP and Mack-Cali shall have the right, at their sole
option, to terminate this Agreement with respect to said Property by written
notice to Contributors. Notwithstanding the foregoing, MCRLP and Mack-Cali shall
not have the right to terminate this Agreement, if (a) Contributors' insurance
fully covers the damage resulting from the Casualty; (b) the proceeds of any
insurance, together with a credit equal to Contributors' deductible under the
Insurance Policies, shall be paid to MCRLP at the time of the Closing; and (c)
all unpaid claims and rights in connection with losses to the Property shall be
assigned to MCRLP at the Closing without in any manner affecting the Exchange
Consideration hereunder. Contributor represents that the insurance maintained by
it is customary and prudent for the assets owned by it.
iii. If the Property is the subject of a Casualty but
MCRLP does not terminate this Agreement pursuant to the provisions of this
Section, then Contributors shall, prior to the Closing Date, cause all temporary
repairs to be made to the Property as shall be required to prevent further
deterioration and damage to the Property and to protect public health and
safety; provided, however, that any such repairs shall first be approved by
MCRLP. Contributors shall have the right to be reimbursed from the proceeds of
any insurance with respect to the Property for the cost of such temporary
repairs.
r. CONDEMNATION.
In the event of a material taking (as defined in this
Section 18), MCRLP and Mack-Cali shall have the right, at their sole option, to
either (a) terminate this Agreement by giving Contributors written notice to
such effect at any time after its receipt of written
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notification of any such occurrence, or (b) accept title to the remainder of the
Property without reduction of any consideration given hereunder. Should MCRLP or
Mack-Cali so terminate this Agreement in accordance with this Section, neither
party shall have any further liability or obligations to the other. In the event
MCRLP and Mack-Cali shall not elect to cancel this Agreement, Contributors
shall, subject to the rights of the holder of any existing mortgage, assign all
proceeds of such taking to MCRLP, and the same shall be MCRLP's sole property,
and MCRLP shall have the sole right to settle any claim in connection with the
Property. The term "material taking" shall be defined to mean the institution of
any proceedings, judicial, administrative or otherwise which involve (a) the
taking of a portion of Real Property such that ingress and egress to such Real
Property is impaired, (b) the taking of a portion of the parking spaces of a
Real Property such that after such taking the Real Property will not be in
compliance with local zoning regulations regarding adequate parking, or (c) the
taking of any part of a Building.
s. TRANSFER RESTRICTIONS.
i. Contributors hereby agree 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 19, or (ii) publicly (subject to
the restrictions of the Act and the rules and regulations promulgated
thereunder) in trading blocks of 150,000 shares of Common Stock or less, in any
single day. Notwithstanding anything herein to the contrary, the provisions of
this Section 19 shall not apply to (i) pledges or encumbrances of all or a
portion of the Contributor Units to an institutional lender, or (ii) Transfers
of all or any portion of the Contributor Units to permitted transferees as set
forth in the OP Agreement (the "Permitted Transferees"). Any holder of
Contributor Units pursuant to (i) or (ii) of the preceding sentence shall be
subject to the terms and conditions of the OP Agreement.
ii. If any of the Unit Holders, or any of their
Permitted Transferees (each a "Seller") receives a bona fide written offer to
purchase part or all of its Contributor Units or Underlying Shares in a
privately negotiated transaction which it desires to accept, such Seller shall
not sell, transfer, or otherwise dispose of (the "Proposed Disposition") such
Units or Underlying Shares (the "Disposition Securities") to a third party (the
"Purchaser"), unless prior to such Proposed Disposition, such Seller shall have
promptly reduced the terms and conditions, if any, of the Proposed Disposition
to a reasonably detailed writing and shall have delivered written notice (the
"Disposition Notice") of such Proposed Disposition to MCRLP. The Disposition
Notice 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.
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iii. Mack-Cali shall not sell the Property within four
(4) years from the date of the Closing (the "Restricted Period") without the
prior written consent of Contributors, other than (1) in connection with a
transaction which does not result in recognition of gain by the Contributors;
(2) a sale of any of the Property set forth in Schedule 19.3 hereto; (3) as
determined by the Board of Directors of Mack-Cali (the "Board") as necessary to
satisfy any material monetary default on any mortgage secured by the Property;
(4) as determined by the Board as necessary to satisfy any material, unsecured
debt, judgment or liability of Mack-Cali when the same becomes due (at maturity
or otherwise); (5) in connection with the sale of all or substantially all of
the properties owned by Mack-Cali under such terms and conditions which the
Board, in its sole judgment, determines to be in the best interests of Mack-Cali
and its public stockholders; and/or (6) sales of the Property which do not
result in material and adverse tax consequences for the Contributors. Mack-Cali
may dispose of any or all of the Property in its sole discretion, and without
the consent of Contributors, upon the expiration of the Restricted Period.
Notwithstanding any of the foregoing language to the contrary, Mack-Cali shall
not distribute the Property for a period of seven (7) years if the distribution
of such Property would result in the recognition of income by Contributor
pursuant to Sections 704(c)(1)(B) or 737 of the Code, except as otherwise
permitted in clauses (1) through (7) above.
t. INTENTIONALLY DELETED.
u. TAX MATTERS.
i. (a) Contributors will timely pay or provide for the
payment of all Taxes which are attributable to all Pre-Closing Tax Periods, but
which are not due and payable until after the Closing Date in connection with
the ownership and/or operation of the Property (by them or any predecessor
entities) or their businesses for which either MCRLP (or any of its direct or
indirect partners) could be held directly or indirectly liable or a claim could
be made against the Property. To the extent allowed by law, Contributors will
timely file all Tax Returns which are required to be filed in connection with
the ownership and/or operation of the Property (by them or any predecessor
entities) or their businesses for all Pre-Closing Tax Periods but which are not
required to be filed until after the Closing Date and the non-timely filing (or
non-filing) of which could result in direct or indirect liability to MCRLP (or
any of its direct or indirect partners) or a claim against the Property. Each
such Tax Return will be complete and accurate. Contributors will provide
Mack-Cali with a copy of all such Tax Returns promptly after such Tax Returns
are filed. All Taxes imposed in connection with the ownership and/or operation
of the Property during any taxable periods which begin on or before the Closing
Date and end after the Closing Date ("Straddle Periods" or "Straddle Period")
shall be allocated between Contributors and MCRLP in accordance with their
respective periods of ownership of the Property. Contributors will timely pay
all Taxes with respect to their businesses for any Straddle Period (and any
other taxable period) for which either MCRLP (or any of its direct to indirect
partners) could be held directly or indirectly liable or a claim could be made
against the Property.
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(2) Contributors shall cause Owner to provide
Mack-Cali with a copy of its Federal income tax returns which reflect (in whole
or in part) any of the transactions contemplated hereunder and which reflect (in
whole or in part) any of the gain or loss recognized in respect of such
transactions.
ii. Owner and Contributors shall pay any and all Taxes
including without limitation, Taxes imposed with respect to the operation of its
business and the ownership or operation of the Property or Owner for all taxable
periods (or portions thereof) ending on or prior to the Closing imposed upon
MCRLP based, in whole or in part, upon the failure to comply with the bulk sales
laws.
iii. Contributors are hereby authorized to continue the
proceeding or proceedings now pending for the reduction of the assessed
valuation of the Property as set forth on Schedule 21.3 and to litigate or
settle the same in Contributors' discretion. MCRLP is hereby authorized by
Contributors, in MCRLP's sole discretion, to file any applicable proceeding for
the 1997 and/or 1998 fiscal year for the reduction of the assessed valuation of
the Property. The net refund of taxes, if any, for any tax year for which
Contributors or MCRLP shall be entitled to share in the refund shall be divided
between Contributors and MCRLP in accordance with the apportionment of taxes
pursuant to the provisions hereof. All expenses in connection therewith,
including counsel fees, shall be borne by Contributors and MCRLP in proportion
to their ownership period of the asset in question.
iv. For purposes of this Agreement:
(1) "Taxes" or "Tax" 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.
(2) "Tax Returns" or "Tax Return" means all
original and amended Federal, state, local and foreign tax returns,
declarations, statements, reports, schedules, forms, information returns and
other filings relating to Taxes.
(3) "Audits" or "Audit" means any audit,
assessment of Taxes, any other examination or claim by any Governmental
Authority, judicial, administrative or
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other proceeding or litigation (including any appeal of any such judicial,
administrative or other proceeding or litigation) relating to Taxes and/or Tax
Returns.
v. The provisions of this Section shall survive the
Closing Date.
v. PUBLICATION.
i. MCRLP shall have the exclusive right to make such
public announcements or filings with respect to the exchange as MCRLP may deem
reasonably prudent and, upon advice of counsel, as may be necessary or required
by law.
w. REMEDIES.
i. If the conditions set forth in Section 12.2 with
respect to the Closing have been satisfied (unless the failure or inability to
be so satisfied is due to Mack-Cali or MCRLP) and if MCRLP or Mack-Cali is not
ready, willing and able to perform its obligations hereunder on the Closing
Date, or in the event of a material default of MCRLP or Mack-Cali or MCRLP's or
Mack-Cali's material failure to comply with any material representation,
warranty, covenant or agreement set forth herein with respect to the Closing,
then Contributors, subject to the limitations set forth in this Agreement,
including, without limitation, those set forth in Section 6.3, shall have the
right as their sole and exclusive remedy to either (i) terminate this Agreement
upon written notice to MCRLP, in which event neither party shall thereafter have
any further obligations under this Agreement, except those which expressly
survive the termination hereof; or (ii) maintain an action for either (A)
specific performance, or (B) monetary damages.
ii. If the conditions set forth in Section 12.1 have
been satisfied (unless the failure or inability to be so satisfied is due to
Owner or any Contributor), and if Contributors are not ready, willing and able
to perform their obligations hereunder on the Closing Date, or in the event of
any material default on the part of any of the Contributors, or Owner or any
Contributors' failure to comply with any material representation, warranty,
covenant or agreement set forth herein, MCRLP shall be entitled to either (i)
terminate this Agreement upon notice to Contributors following which neither
party shall thereafter have any further obligations under this Agreement, except
those which expressly survive the termination hereof; or (ii) commence an action
against Contributors seeking either (A) monetary damages, or (B) specific
performance of Contributors' obligations under this Agreement.
iii. The acceptance of the Assignment of Interest by
MCRLP shall be deemed a full performance and discharge of every agreement and
obligation of Contributors to be performed under this Agreement, except those,
if any, which are specifically stated in this Agreement to survive the Closing.
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x. INTENTIONALLY DELETED.
y. 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 Mack-Cali: c/o Mack-Cali Realty Corporation
or MCRLP 11 Commerce Drive
Cranford, New Jersey 07016
Attn: Roger W. Thomas, Esq.
(908) 272-8000 (tele.)
(908) 272-6755 (fax)
with a copy to: Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attn: Wayne B. Heicklen, Esq.
(212) 326-0425 (tele.)
(212) 326-0806 (fax)
If to Owner: c/o Pacifica Holding Company, LLC
or Contributors 5975 South Quebec Street, Suite 100
Englewood, Colorado 80111
Attn: Mr. Steven Leonard
(303) 220-5565 (tele.)
(303) 220-5585 (fax)
with a copy to: Brownstein, Hyatt, et al.
410 17th Street, 22nd Floor
Denver, Colorado 80202
Attn: Edward N. Barad, Esq.
(303) 534-6335 (tele.)
(303) 623-1956 (fax)
and a copy to: Apollo Real Estate Advisors
1301 Avenue of the Americas, 38th Floor
New York, NY 10019
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Attn: Mr. Richard Mack
(212) 261-4065 (tele.)
(212) 261-4060 (fax)
or to such other address as either party may from time to time
designate by written notice to the other. Notices given by (i) overnight
delivery service as aforesaid shall be deemed received and effective on the
first business day following such dispatch, and (ii) telecopy or fax machine
shall be deemed given at the time and on the date of machine transmittal
provided the same is sent prior to 4:00 p.m. Eastern Time 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.
z. DEPRECIATION METHOD.
Mack-Cali, as the general partner of MCRLP, covenants
and agrees that MCRLP and its affiliates will use the "traditional method with
curative allocations" (as defined in Treasury Regulations Section 1.704-3(c)) of
allocating income, gain, loss and deduction to account for the variation between
the fair market value and adjusted basis of the Property for federal income tax
purposes with respect to (i) the contribution of the Property, and (ii) any
revaluation of the Property in accordance with the provisions of Treasury
Regulations Sections 1.704-1(b)(2)(iv)(f), 1.704-1(b)(2)(iv)(g) and
1.704-3(a)(6).
aa. MISCELLANEOUS.
i. Intentionally Deleted.
ii. 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.
iii. This Agreement cannot be amended, waived or
terminated orally, but only by an agreement in writing signed by the party to be
charged.
iv. This Agreement shall be interpreted and governed by
the laws of the State of Colorado, without regard to conflicts of laws
principles, and shall be binding upon the parties hereto and their respective
successors and assigns.
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v. 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. The, feminine or masculine gender, when used
herein, shall include the other gender and the use of the singular shall include
the plural.
vi. 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.
vii. Each party shall, from time to time, execute,
acknowledge and deliver to the other party 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 Contributors and MCRLP or Mack-Cali. 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 Contributors, MCRLP or Mack-Cali or the party
whose counsel drafted this Agreement.
viii. 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.
ix. All references herein to any Section, Exhibit, or
Schedule shall be to the Sections of this Agreement and to the Exhibits and
Schedules annexed hereto unless the context clearly dictates otherwise. All of
the Exhibits and Schedules annexed hereto are, by this reference, incorporated
herein.
x. In the event that Owner or Contributors, and MCRLP or
Mack-Cali enter into litigation or alternative dispute resolution in connection
with this Agreement or the transaction contemplated herein, the non-prevailing
party in such litigation or alternative dispute resolution shall be responsible
for the payment of all expenses and reasonable attorneys' fees incurred by the
prevailing party.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE.]
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CONTRIBUTION AND EXCHANGE AGREEMENT
THIS CONTRIBUTION AND EXCHANGE AGREEMENT (the "Agreement") made this 25th
day of March, 1998, by and between APOLLO/PACIFICA PYRAMID, LLC ("Contributor"),
a Delaware limited liability company with an address c/o Pacifica Holding
Company, 5975 South Quebec Street, Suite 100, Englewood, Colorado 80111,
MACK-CALI REALTY, L.P., a Delaware limited partnership ("MCRLP") and MACK-CALI
REALTY CORPORATION, a Maryland corporation ("Mack-Cali"), each having an address
at 11 Commerce Drive, Cranford, New Jersey 07016.
RECITALS
A. Contributor owns various commercial properties located throughout the
Denver, Colorado metropolitan area. Mack-Cali, through MCRLP and certain
affiliated entities of MCRLP, similarly owns various commercial properties
located throughout New Jersey, New York, Pennsylvania, Nebraska, Iowa,
California, Florida, Arizona, Connecticut and Texas.
B. Contributor, MCRLP and Mack-Cali have determined that the transactions
contemplated hereby are in the respective parties' best interests.
NOW, THEREFORE, in consideration of ten dollars ($10.00), the mutual
promises hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, do hereby agree as follows:
1. SUBJECT OF CONVEYANCE.
In accordance with the terms and conditions of this Agreement, on the
Closing Date (as defined herein), Contributor agrees to contribute, convey or
otherwise transfer to certain designees of MCRLP all of Contributor's right,
title and interest in and to the assets set forth in paragraphs (a) through (h)
of this Section 1:
(a) that certain real property situate, lying and being in the State of
Colorado and being more particularly described on Schedule 1(a) (the "Land"),
which Schedule 1(a) sets forth the name, state of organization and type of
entity of Contributor of a parcel of Land and all of the improvements located on
the Land (individually, a "Building" and collectively, the "Improvements");
(b) all rights, privileges, grants and easements appurtenant to
Contributor's interests in the Land and Improvements, if any, including without
limitation, all land lying in the bed of any public street, road or alley, all
mineral and water rights and all easements, licenses, covenants and
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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
collectively referred to herein as the "Real Property");
(c) except as set forth on Schedule 1(c) all personal property, artwork,
fixtures, equipment, inventory and computer programming and software owned by
Contributor and located on any of the Real Property or used at any of the
management and corporate offices of Contributor (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
(each a "Lease" and collectively, the "Leases") and any guaranties provided
thereunder, and rents, additional rents, reimbursements, profits, income,
receipts and the amount deposited (the "Security Deposit") under any Lease in
the nature of security for the performance of the Tenant's (as defined herein)
obligations thereunder;
(e) Intentionally Deleted.
(f) all permits, licenses, guaranties, approvals, certificates and
warranties relating to the Real Property and the Personal Property
(collectively, the "Permits and Licenses"), all of Contributor's rights, titles
and interests in and to those contracts and agreements for the servicing,
maintenance and operation of the Real Property ("Service Contracts") and
telephone numbers in use at any of the Real Property or the management offices
and corporate headquarters of Contributor (together with the Permits and
Licenses and the Service Contracts, the "Intangible Property");
(g) all books, records, promotional material, tenant data, leasing
material and forms, past and current rent rolls, files, statements, 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
(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.
The Real Property, the Personal Property, the Leases, the Intangible
Property, the Books and Records and the other property interests being conveyed
hereunder are hereinafter collectively referred to as the "Property".
For all purposes herein, unless the context clearly dictates otherwise,
any reference herein to "Contributor" shall be deemed to be a reference to the
entity which is to convey any assets hereunder to MCRLP or its designees.
2. PAYMENT TERMS.
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2.1 Total Exchange Consideration. The aggregate consideration for
the Property (the "Exchange Consideration") is Thirteen Million Seven Hundred
Fifty Thousand and xx/100 ($13,750,000.00) Dollars, to be paid by MCRLP in
accordance with Section 2.2.
2.2 The Property. (a) At the Closing (as defined herein), and upon
satisfaction of the terms and conditions provided herein, Contributor agrees to
contribute the Property to MCRLP or its Permitted Assignees (hereinafter
defined), and MCRLP (and Mack-Cali where applicable) agrees, subject to
adjustment as set forth herein, (i) to pay to Contributor or its designees, in
cash, the amount of Thirteen Million Seven Hundred Fifty Thousand and xx/100
($13,750,000.00) Dollars (the "Cash Payment") and (ii) to issue the Contributor
Units (hereinafter defined) in an amount set forth in Subsection 2.2(b) to such
persons as Contributor shall direct in writing (as set forth in Section
10.2(aa)) as soon as practicable following the date hereof (the "Unit Holders").
(b) Simultaneous with MCRLP accepting the Property, MCRLP
shall issue, subject to adjustments as set forth herein, ___________ common
units of limited partnership interests in MCRLP (the "Contributor Units")
convertible into Mack-Cali Common Stock ("Common Stock"); provided, however,
that the Unit Holders shall be issued and shall hold the Contributor Units in
accordance with the provisions of Section 19.
(c) At the Closing, MCRLP shall issue to Contributor and/or
the Unit Holders or their designees certificates representing in the aggregate
________ Contributor Units (the "Permanent Certificates"), which Permanent
Certificates shall contain the legend set forth on Exhibit 10.2(ee).
(d) All rights and benefits incidental to the ownership of the
Contributor Units received in exchange for the Property, 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, shall accrue for the
benefit of the Unit Holders commencing on the Closing Date (as defined herein).
(e) With respect to the first Partnership Record Date (as
defined in the OP Agreement (as defined below)) on or after the Closing, the
Unit Holders 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 Unit Holders held
Contributor Units.
2.3 Intentionally Deleted.
2.4 Intentionally Deleted.
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3. INSPECTION PERIOD; MCRLP'S RIGHT OF TERMINATION
AND REJECTION PRIOR TO CLOSING.
3.1 Prior to the Closing (the "Inspection Period"), time being of
the essence as to each such date, MCRLP, at its sole cost and expense, 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, financial,
market analysis, development and economic feasibility studies and other tests,
investigations or studies as MCRLP, 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 Leases, Service Contracts, copies of Contributor's
Tax Returns and the Property Financials (as hereinafter defined) as of and for
the years ending December 31, 1995, 1996 and 1997, engineering and environmental
reports, development approval agreements, permits and approvals, which
inspection shall be satisfactory to MCRLP in its sole discretion. Contributor
agrees to cooperate with MCRLP in such review and inspection and, to the extent
not yet delivered, shall deliver said documents and information to MCRLP within
ten (10) days from the date hereof. MCRLP may terminate this Agreement for any
reason, by written notice given to Contributor, prior to the expiration of the
Inspection Period. In the event MCRLP terminates this Agreement during the
Inspection Period, this Agreement shall be null and void and the parties hereto
shall be relieved of all further obligations hereunder except as otherwise
provided herein. In the event MCRLP does not terminate this Agreement by the end
of the Inspection Period, then MCRLP shall be deemed to have elected not to
terminate this Agreement.
3.2 During the Inspection Period, MCRLP, its agents and contractors
shall have unlimited access to the Property and other information pertaining
thereto in the possession or within the control of Contributor, during normal
business hours, for the purpose of performing such studies, tests, borings,
investigations and inspections for the purposes described in Section 3.1 above.
Such right of inspection and the exercise of such right shall not constitute a
waiver by MCRLP of the breach of any representation or warranty of Contributor
which might, or should, have been disclosed by such inspection. Contributor
shall cooperate with MCRLP in facilitating its due diligence inquiry and shall
obtain, and use commercially reasonable efforts to obtain, any consents that may
be necessary in order for MCRLP to perform the same.
3.3 To assist MCRLP in its due diligence investigation of the
Property, Contributor shall deliver to MCRLP, by the execution and delivery of
this Agreement, true and correct copies of all existing Phase I environmental
studies (the "Phase I Reports") in the possession or control of Contributor with
respect to the Real Property, which Phase I Reports are set forth on Schedule
3.3 annexed hereto. In the event that MCRLP determines that it requires any new
Phase I Reports or updates thereof, the cost of such reports or updates shall be
borne by MCRLP. If MCRLP reasonably requires that further environmental
investigations be undertaken beyond any new Phase I or updated Phase I Report,
all engineering costs and expenses relating to said further environmental
investigations shall be borne by Mack-Cali.
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3.4 Intentionally Deleted.
3.5 During the Inspection Period, Mack-Cali and MCRLP shall provide
to Contributor and its agents and advisors reasonable access to Mack-Cali's and
MCRLP's books and records, and Mack-Cali and MCRLP shall provide Contributor
such other reasonable information including, without limitation, all Securities
and Exchange Commission filings of MCRLP and Mack-Cali and federal, state, and
local income, excise, franchise, and all other tax filings, in order to permit
Contributor, at its sole cost and expense, to perform reasonable due diligence
on such parties. Nothing arising from Contributor's inspection or due diligence
as permitted by this Section shall give rise to a right of Contributor to
terminate this Agreement.
3.6 Mack-Cali shall have the right, without the obligation, to
terminate this Agreement if (i) at any time prior to the Closing Date, Mack-Cali
determines in its sole discretion, that any of the Property is subject to
materially adverse environmental conditions, including, without limitation, any
environmental condition that has a material adverse affect on the property value
of any Real Property, on the current use of any Real Property, on groundwater
at, on, under, about or emanating from any Real Property or on the ability of
Mack-Cali or MCRLP to finance any Real Property; or (ii) Contributor is unable
to obtain the approval of any third-party partner of the Contributors to the
terms of this Agreement; or (iii) Mack-Cali determines that certain of the
indebtedness encumbering the Property cannot be satisfactorily satisfied or
restructured.
4. TITLE; MATTERS TO WHICH THIS SALE IS SUBJECT.
4.1 As of the Closing Date, title to the Property shall be 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 the same are not yet due and payable,
but subject to adjustment as provided herein;
(b) the rights of those parties occupying space at any of the
Improvements (collectively, "Tenants") as tenants only;
(c) those restrictions, covenants, agreements, easements,
matters and things affecting title to the Real Property as of the date hereof
and more particularly described in Schedule 4.1(c) annexed hereto and by this
reference made a part hereof and such other easements, covenants and
restrictions which are entered into with the consent of MCRLP after the date
hereof, such consent not to be unreasonably withheld, delayed or conditioned;
(d) any and all laws, statutes, ordinances, codes, rules,
regulations, requirements, or executive mandates affecting the Real Property
including, without limitation, those related to zoning and land use, as of the
date hereof;
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(e) the state of facts shown on the surveys described on
Schedule 4.1(e) for each of the individual properties comprising the Real
Property and the Earnout Properties;
(f) the Service Contracts;
(g) any utility company rights, easements and franchises to
maintain poles, lines, wires, cables, pipes, boxes and other fixtures and
facilities in, over, under or upon the Real Property, provided the same do not
impair, in other than a de minimis manner, the present use of the Real Property;
(h) such matters as the Title Company (as hereinafter defined)
shall be willing, without special premium, to omit as exceptions to coverage;
(i) the lien of the Mortgages (but on the terms and conditions
of this Agreement).
4.2 Prior to the date hereof, Contributor shall have directed Land
Title Guarantee Company (the "Title Company"), as agent for Chicago Title
Insurance Company, to prepare a title insurance search and commitment for
owner's title insurance policy for the Real Property (the "Title Commitment").
MCRLP shall cause the Title Company to promptly deliver a copy of the same to
Contributor and its counsel. If any defects, objections or exceptions in the
title to the Real Property appear in the Title Commitment (other than the
Permitted Encumbrances) which MCRLP is not required to accept under the terms of
this Agreement, Contributor may, at its election, undertake to eliminate such
unacceptable defects, objections or exceptions, it being agreed that except as
provided below, Contributor shall have no obligation to incur any expense in
connection with curing such defects, objections or exceptions, other than (i)
judgments against Contributor; (ii) mortgages or other liens which can be
satisfied by payment of a liquidated amount, other than the Mortgages; and (iii)
defects, objections or exceptions which can be removed by payments not to exceed
$100,000.00 per Building in the aggregate. Contributor, 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, 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, MCRLP shall elect either (i) to
terminate this Agreement by notice given to Contributor, in which event the
provisions of Section 23.2(a) shall apply, or (ii) to accept title subject to
such unacceptable defects, objections or exceptions and receive no credit
against or reduction of the consideration to be given hereunder for the
Property. Contributor agrees and covenants that it shall not voluntarily place
any encumbrances or restrictions on title to the Real Property from and after
the date of the first issuance of the Title Commitment for said Property, except
for the right to reserve easements for utilities and ingress and egress
encumbering the Real Property (post-closing) for the benefit of adjacent
properties owned by Contributor (or any affiliate thereof) upon the written
consent of MCRLP, which consent shall not
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be unreasonably withheld or delayed; and so long as the mortgagees of the
Mortgages shall consent to the reservation of the same. Mack-Cali and MCRLP
covenant and agree that they shall consult with Contributor prior to causing any
other person or entity to request any inspection of the Real Property by any
governmental entity. Contributor recognizes that Mack-Cali's and MCRLP's due
diligence necessitates said inspection. Mack-Cali and MCRLP agree that they
shall conduct any due diligence with such governmental entity with a view toward
maintaining the confidentiality of the transaction contemplated by this
Agreement.
4.3 It shall be a condition to Closing that Contributor conveys, and
that the Title Company insures, title to the Real Property in the amount of the
Allocated Property Value thereof (at a standard rate for such insurance) in the
name of MCRLP or its designees, after delivery of the Deed (as hereinafter
defined) by a standard 1992 ALTA Owner's Policy, with ALTA endorsements, to the
extent that the premium for such endorsements is paid by MCRLP, for the Real
Property as required by MCRLP 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 (i)
the exception for taxes shall apply only to the current taxes not yet due and
payable; and (ii) to the extent that the premium for such endorsements is paid
by MCRLP, (a) any Permitted Encumbrances have not been violated, and that any
future violation thereof will not result in a forfeiture or reversion of title;
and (b) MCRLP's contemplated use of the Real Property will not violate the
Permitted Encumbrances. Contributor shall provide such affidavits and
undertakings as the Title Company insuring title to the Real Property may
require and shall cure all other defects and exceptions other than the Permitted
Encumbrances and as required pursuant to Section 4.2. The words "insurable
title" and "insurable" as used in this Agreement are hereby defined to mean
title which is insurable at standard rates (without special premium) by the
Title Company without exception other than the Permitted Encumbrances, and
standard printed policy and survey exceptions.
4.4 Contributor shall cause one or more surveyors acceptable to
MCRLP to deliver to MCRLP a survey or surveys of the Real Property acceptable to
MCRLP in all respects and in conformity with ALTA standards. MCRLP shall, at
MCRLP's sole cost and expense and with Contributor's cooperation and assistance,
cause the surveyor to update the survey no more than thirty (30) days prior to
the Closing Date and shall have the general survey exception removed from the
Title Policy and the survey affirmatively insured, to the extent that the
premium for such endorsement is paid by MCRLP, to MCRLP.
4.5 Any unpaid taxes, water charges, sewer rents and assessments,
together with the interest and penalties thereon to a date not less than seven
(7) business days following the Closing Date (in each case subject to any
applicable apportionment), and any mortgages or other liens created by
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, shall be paid
at the Closing by Contributor. Contributor shall deliver to MCRLP, on the
Closing Date, instruments in recordable form sufficient
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to discharge any such mortgages or other liens which Contributor is obligated to
pay and discharge pursuant to the terms of this Agreement.
4.6 If the Title Commitment discloses judgments, bankruptcies or
other returns against other persons or entities having names the same as or
similar to that of Contributor, Contributor shall, upon request, deliver to the
Title Company affidavits showing that such judgments, bankruptcies or other
returns are not against Contributor, or any of its affiliates. Upon request by
MCRLP, Contributor shall deliver any affidavits and documentary evidence as are
reasonably required by the Title Company to eliminate the standard exceptions on
the ALTA Owner's Policy.
5. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTOR.
5.1 In order to induce MCRLP and Mack-Cali to perform as required
hereunder, Contributor hereby warrants and represents to MCRLP and Mack-Cali the
following with respect to the Property:
(a) Contributor is a duly organized and validly existing
entity, organized and in good standing under the laws of the state of its
formation, as more particularly set forth in Exhibit A hereto, is duly
authorized to transact business in the State of Colorado, 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 partners, members, shareholders and/or
principals 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.
(b) Intentionally Deleted.
(c) 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.
(d) Annexed hereto as Schedule 5.1 (d) is a true, complete and
correct schedule of all of the Leases. The Leases are valid and bona fide
obligations of the landlord and Tenants thereunder and are in full force and
effect. To the best of Contributor's knowledge, no defaults exist thereunder and
no condition exists which, with the passage of time or the giving of
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notice or both, will become a default; the Leases constitute all of the leases,
tenancies or occupancies affecting the Real Property on the date hereof; all
Tenants have commenced occupancy; there are no agreements (other than the
Leases) which confer upon any Tenant or any other person or entity any rights
with respect to the Property, nor is any Tenant entitled now or in the future to
any concession, rebate, offset, allowance or free rent for any period, nor has
any such claim been asserted by any Tenant.
(e) Annexed hereto as Schedule 5.1(e) (the "Rent Roll") is a
listing of the following, which is true, complete and correct in all respects
for each Building: (i) the name of each Tenant; (ii) the fixed rent actually
being collected; (iii) the expiration date or status of each Lease (including
all rights or options to renew); (iv) the Security Deposit, if any; (v) whether
there is any guaranty of a Tenant's obligations from a third party, and if so
the nature of said guaranty; (vi) any written notices given by any Tenant of an
intention to vacate space in the future; (vii) the base year(s) and base year
amounts for all items of rent or additional rent billed to each Tenant on that
basis; and (viii) any arrearages of any Tenant beyond thirty (30) days.
(f) To the knowledge of Contributor, Contributor has performed
all of the obligations and observed all of the covenants required of it as
landlord under the terms of the Leases. Except as set forth on Schedule 5.1(f)
annexed hereto, all work, alterations, improvements or installations required to
be made for or on behalf of all Tenants under the Leases have in all respects
been carried out, performed and complied with, and there is no agreement with
any Tenant for the performance of any work to be done in the future. To the
knowledge of Contributor, except as set forth on Schedule 5.1(f), no work has
been performed at any Building which would require an amendment to the
certificate of occupancy for such Building for which an amendment has not been
obtained, and any and all work performed at the Real Property to the date hereof
and to the Closing Date has been and will be in accordance with the rules, laws
and regulations of all applicable authorities. All bills and claims for labor
performed and materials furnished to or for the benefit of the Property arising
prior to the Closing Date will be paid in full by Contributor within customary
time periods, not to exceed forty-five (45) days from the receipt of an invoice
by Contributor.
(g) There are no service contracts, union contracts,
employment agreements or other agreements affecting the Property or the
operation thereof, except the Service Contracts and other contracts and
agreements set forth on Schedule 5.1(g) annexed hereto. All of the Service
Contracts are and will on the Closing Date be unmodified and in full force and
effect without any material default or claim of material default by any of the
parties thereto. All sums presently due and payable by Contributor under the
Service Contracts have been fully paid and all sums which become due and payable
between the date hereof and the Closing Date shall be fully paid by Contributor
within customary time periods, not to exceed forty-five (45) days from the
receipt of an invoice by Contributor. All of the Service Contracts may be
terminated on not more than sixty (60) days notice without the payment of any
fee or penalty, and the representation contained in this sentence is not subject
to being modified by the limitations of Section 5.5. There are no employees of
Contributor, or an affiliate of Contributor, working at or in connection with
the
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Real Property pursuant to any of the Service Contracts, other contracts and
employment agreements, except as set forth on Schedule 5.1(g).
(h) Except as set forth on Schedule 5.1(h) annexed hereto,
there are no actions, suits, labor disputes, litigation or proceedings currently
pending or, to the knowledge of Contributor, threatened against Contributor
(with respect to the Property being sold) or all or any part of the Property,
the environmental condition thereof, or the operation thereof.
(i) Except as set forth on Schedule 5.1(i) annexed hereto,
Contributor has received no written notice and has no knowledge of (i) any
pending or contemplated annexation or condemnation proceedings, or private
purchase in lieu thereof, affecting or which may affect the Real Property or any
part thereof, (ii) any proposed or pending proceeding to change or redefine the
zoning classification of all or any part of the Real Property, (iii) any
proposed or pending special assessments affecting the Real Property or any
portion thereof, (iv) any penalties or interest due with respect to real estate
taxes assessed against the Real Property, or (v) any proposed changes in any
road or grades with respect to the roads providing a means of ingress and egress
to the Real Property. Contributor agrees to furnish MCRLP with a copy of any
such notice received within two (2) business days after receipt.
(j) Contributor has provided MCRLP with all reports in
Contributor's possession or under its control related to the physical condition
of the Real Property.
(k) Except as set forth on Schedule 5.1(k) annexed hereto,
Contributor has no knowledge of any notices, suits, or judgments relating to any
violations (including environmental) of any laws, ordinances or regulations
affecting the Real Property, or any violations or conditions that may give rise
thereto, and has no reason to believe that any agency, board, bureau,
commission, department or body of any municipal, county, state or federal
governmental unit, or any subdivision thereof, having, asserting or acquiring
jurisdiction over all or any part of the Real Property or the management,
operation, use or improvement thereof (collectively, the "Governmental
Authorities" or "Governmental Authority" as the context requires) contemplates
the issuance thereof, and there are no outstanding orders, judgments,
injunctions, decrees or writ of any Governmental Authorities against or
involving Contributor or the Real Property. For purposes of this Agreement, the
term "Governmental Authority" shall also include the Internal Revenue Service
and any other federal, state, local or foreign taxing authority.
(l) There are no employees of Contributor or any affiliates of
Contributor working at or in connection with the Real Property except as set
forth on Schedule 5.1(l).
(m) Annexed hereto as Schedule 5.1(m) is a schedule of all
leasing commission obligations affecting the Property. The respective
obligations of Contributor and MCRLP with respect to said commissions are set
forth in Section 14.
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(n) 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
Contributor's assets, suffered the attachment or other judicial seizure of all,
or substantially all, of 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.
(o) Except for the Mortgages and otherwise as set forth on
Schedule 5.1(o), the Personal Property is now owned and will on each of the
Closing Date be owned by Contributor free and clear of any conditional bills of
sale, chattel mortgages, security agreements or financing statements or other
security interests of any kind.
(p) To Contributor's knowledge, Contributor is not in default
under the Mortgages. True, correct and complete copies of the Loan Documents
have been delivered to MCRLP. The Loan Documents will not be amended or modified
except as required by Mack-Cali prior to the Closing Date.
(q) Intentionally Deleted.
(r) Intentionally Deleted.
(s) Contributor has no knowledge that any part of the Real
Property has been designated as wetlands or any other word of similar purport or
meaning under the Federal Water Pollution Control Act, 33 U.S.C. ss.1251 et
seq.; the Colorado Water Quality Control Act, Colo. Rev. Stat. Section 25-8-101
et seq; or any other applicable federal, state, county or municipal statute,
ordinance, rule, regulation, order or code.
(t) To the best of Contributor's knowledge, there are no
aboveground or underground storage tanks or vessels at the Real Property,
regardless of whether or not such tanks or vessels are regulated tanks or
vessels, except as set forth on Schedule 5.1(t).
(u) Contributor has no knowledge of outstanding requirements
or recommendations by (i) any insurance company currently insuring the Property;
(ii) any board of fire underwriters or other body exercising similar functions;
or (iii) the holder of any mortgage encumbering any of the Property, which
require or recommend any repairs or work of a material nature to be done on the
Property.
(v) The financial statements, including the income and expense
statements and the balance sheets of Contributor and its affiliates, excluding
only those assets, liabilities and operations not contemplated to be contributed
pursuant to this Agreement, relating to Contributor's ownership and operation of
the Property and the related statement of income, partners' capital and cash
flows, including the footnotes thereto (the "Property Financials") as of and for
the years ending December 31, 1995, 1996 and 1997, fairly present the financial
position of Contributor
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relating to the Property as of such dates and the results of operations and cash
flows of Contributor relating to the ownership and operation of the Property for
such respective periods. The Property Financials from January 1, 1998, through
the most recent month ending prior to the Closing Date, fairly present the
financial position of the Property relating to the ownership and operation of
the Property as of such date (subject to the normal year-end adjustments
described in Schedule 5.1(v)) and with all interim financial statements of the
Property heretofore delivered to MCRLP on behalf of Contributor.
(w) Except as set forth in Schedule 5.1(w), Contributor does
not maintain any 401(k) savings plans, pension plans, multi-employer plans (as
defined in Section 3(37) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), employee benefit plans (as defined in ERISA) or employee
welfare plans providing for benefits to Contributor's employees (each, a
"Contributor Plan"). From and after the date hereof, Contributor shall not adopt
a Contributor Plan. Mack-Cali shall have no liability to any current or former
employees of Contributor or any affiliate thereof, including, without
limitation, any liabilities which may arise as a result of the consummation of
the transactions contemplated by this Agreement, under any plans or programs
listed on Schedule 5.1(w), or arising under applicable federal or state law,
including, without limitation, under the Worker Adjustment and Retraining
Nonfiction Act (WARN) and Consolidated Omnibus Budget Reconciliation Act of 1985
(COBRA).
(x) Intentionally Deleted.
(y) Except as disclosed in the Phase I Reports or otherwise
set forth in Schedule 5.1(y):
(i) To the best of Contributor's knowledge, no
Governmental Authority has demanded in writing, addressed to Contributor or any
of its affiliates, counsel or agents, that any Contaminants (as defined herein)
be cleaned up or environmentally remediated at any Real Property, which has not
been cleaned up or environmentally remediated.
(ii) To the best of Contributor's knowledge, no
Contaminants have been Discharged (as hereinafter defined) which would allow a
Governmental Authority to demand that a cleanup be undertaken.
(iii) To the best of Contributor's knowledge, no
ss.104(e) informational request, issued pursuant to CERCLA (as hereinafter
defined) with respect to the Real Property has been received by Contributor.
(iv) To the best of Contributor'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.
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(v) To the best of Contributor's knowledge, there is no
asbestos or asbestos containing material requiring remediation under
Environmental Laws (as hereinafter defined) on the Real Property, except as set
forth on Schedule 5.1(y).
(vi) To the best of Contributor's knowledge, all
transformers and capacitors containing polychlorinated biphenyls ("PCBs") , and
all "PCB Items", as defined in 40 CFR, ss.761.3, located on or affecting the
Real Property, are identified in Schedule 5.1(y) and are in compliance with all
Environmental Laws.
(vii) To the best of Contributor's knowledge, Pacifica
has all material certificates, licenses and permits (the "Permits"), including
without limitation, environmental Permits, required to operate the Real
Property. To the best of Contributor'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, as the case may be, without
additional payment by MCRLP, and shall, upon closing, be transferred to MCRLP by
Contributor.
(viii) To the best of Contributor's knowledge, the Real
Property has not been used during the period of Contributor's ownership as solid
wastes disposal sites and facilities as defined in the Colorado Solid Wastes
Disposal Sites and Facilities Law, Colo. Rev. Stat. Section 30-20-100.5 et seq.
and the regulations promulgated thereunder.
(ix) To the best of Contributor's knowledge, there are
no engineering or institutional controls 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 Colo. Rev. Stat. Section 25-15-208 et seq. and
the regulations promulgated thereunder.
(x) Contributor has not transported any Contaminants
from the Real Property to another location in violation of Environmental Laws.
(xi) To the best of Contributor's knowledge, there are
no federal or state liens, as referenced under CERCLA and the regulations
promulgated thereunder, or under any other applicable Environmental Law that
have attached to the Real Property.
(xii) Contributor has provided MCRLP with all
environmental site assessments, investigations, and documents and all other
Environmental Documents (as that term is defined below) in its possession or
under its control and shall continue to do so after execution of this Agreement
promptly upon its receipt.
(xiii) For purposes of this Agreement, the following
words shall have the respective meaning set forth below:
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(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
Contributor 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.
(z) Contributor and its affiliated entities shall have timely
paid all Taxes (as defined herein) due and payable on or prior to the Closing
Date in connection with the ownership and/or operation of the Property (by them
or any predecessor entities) or their businesses for which MCRLP (or any of its
direct or indirect partners) could be held directly or indirectly liable or a
claim could be made against the Property. Contributor and its affiliated
entities shall have timely filed all Tax Returns (as defined herein) required to
be filed on or prior to the Closing Date in connection with the ownership and/or
operation of the Property (by them or any predecessor entities) or their
businesses, and the non-timely filing (or non-filing) of which could result in
direct or indirect liability to MCRLP (or any of its direct or indirect
partners) or a claim against the Property. Each such Tax Return is complete and
accurate in all respects. Contributor and its affiliated entities shall have
timely paid or will timely pay, or shall have provided for or will provide for a
cash reserve for
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the payment of, all Taxes due and payable on or after the Closing Date for all
taxable periods (or portions thereof) ending on or prior to the Closing Date (a
"Pre-Closing Tax Period" or "Pre-Closing Tax Periods"), and in connection with
the ownership and/or operation of the Property (by them or any predecessor
entities) or their businesses for which MCRLP (or any of its direct or indirect
partners) could be held directly or indirectly liable or a claim could be made
against the Property. Contributor and its affiliated entities shall timely file
all Tax Returns which relate to all Pre-Closing Tax Periods but which are
required to be filed after the Closing Date in connection with the ownership
and/or operation of the Property (by them or any predecessor entities) or their
businesses, the non-timely filing (or non-filing) of which could result in
direct or indirect liability to MCRLP (or any of its direct or indirect
partners) or a claim against the Property. Each such Tax Return will be complete
and accurate in all respects. True and complete copies of all Tax Returns filed
by Contributor for taxable periods beginning on or after January 1, 1994, and
all written communications relating thereto, have been, or will be upon request,
delivered to Mack-Cali. Contributor has also provided, or will also provide upon
request, to Mack-Cali copies of: (i) any letter ruling, determination letter or
similar document issued to Contributor by any Governmental Authority, and (ii)
any closing or other agreement entered into by Contributor with any Government
Authority. Except as set forth on Schedule 5.1(z), there are no ongoing Audits
or Audits pending or, to the knowledge of Contributor and each of its affiliated
entities, threatened with respect to the ownership and/or operation of the
Property (by Contributor, its affiliated entities or any of their predecessor
entities) or the businesses of Contributor or any of its affiliated entities,
which could result in direct or indirect liability to MCRLP (or any of its
direct or indirect partners) or a claim against the Property. There are no
agreements or waivers extending the statutory period of limitations with respect
to any such Tax Returns or for the assessment or collection of any such Taxes.
No claim has ever been made by a Governmental Authority in a jurisdiction where
Contributor does not file Tax Returns that it is or may be subject to taxation
by that jurisdiction.
(aa) Annexed hereto as Schedule 5.1(aa) is a listing, for
federal income tax purposes, of the following information, which is true,
complete and correct in all aspects for each item of Property: (i) its adjusted
basis as of the first day of Contributor's taxable year which includes the
Closing Date; (ii) the date placed in service; (iii) the depreciation method;
and (iv) the remaining useful life.
(bb) Subject to the provisions of Section 5.5, no
representation or warranty made by Contributor contained in 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.
(cc) As used throughout this Agreement, the phrases "to
Contributor's knowledge," "to the knowledge of Contributor," "to the best of
Contributor's knowledge" or any similar derivation thereof, shall mean the
actual (not constructive) knowledge of Terrence Claassen,
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David Goldberg, Chetter Latcham, Steve Leonard, Rich Majors, Adel Nassif, Chuck
Peck and Della Wegman, without having undertaken any independent investigation
of facts or legal issues, without any duty to do so, and without imputing to the
aforementioned persons the knowledge of any employee, agent, representative or
affiliate of Contributor or of any other person or entity.
5.2 Intentionally Deleted.
5.3 All representations and warranties made hereunder by Contributor
and in this Agreement shall survive the Closing Date for a period of one (1)
year, except that the representations and warranties set forth in clauses (a),
(c), (w) and (z) of Section 5.1 shall survive such Closing Date for the
applicable period of the statute of limitations (unless otherwise specified
herein), and shall not be merged in the delivery of the Deed. Notwithstanding
the foregoing, to the extent that a Tenant shall certify in its Estoppel
Certificate (as defined below) as to any of the matters which are contained in
the representations and warranties made by Contributor in Section 5.1(f) of this
Agreement, then Contributor's representations and warranties as to such matters
shall be of no force or effect to the extent of any conflict. Pacifica Holding
Company, a Colorado corporation; and Pacifica Holding Company, a Colorado
limited liability company (collectively, "Guarantor"); and Contributor, jointly
and severally, shall, pursuant to a separate indemnity agreement (the "Indemnity
Agreement") in the form attached hereto as Schedule 5.3, indemnify and defend
Mack-Cali and MCRLP, and to hold Mack-Cali and MCRLP 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 Mack-Cali or MCRLP by reason
of or resulting from any breach, inaccuracy, incompleteness or non-fulfillment
of the representations, warranties, covenants and agreements of Contributor
contained in this Agreement to the full extent that Contributor would otherwise
have been liable therefor under the provisions of this Agreement. The foregoing
indemnity shall be deemed to be material to MCRLP and Mack-Cali's obligation to
perform hereunder and shall survive the Closing. Notwithstanding the foregoing,
the members of Contributor shall have no liability for any loss resulting from
any breach of the foregoing representations and warranties. In addition, except
as set forth in Section 28, MCRLP shall not have a right to bring a claim
against Contributor by virtue of any of the representations or warranties being
false or misleading unless and until the aggregate damages to MCRLP and/or
Mack-Cali are reasonably expected to exceed $100,000.00, but thereafter MCRLP
and/or Mack-Cali may bring a claim against Contributor for the entire amount of
its aggregate damages.
5.4 Contributor acknowledges that it is not in a significantly
disparate bargaining position with respect to MCRLP or Mack-Cali in connection
with the transaction contemplated by this Agreement and that Contributor was
represented by legal counsel in connection with this transaction.
5.5 Mack-Cali and MCRLP each acknowledges that it has had, or will
have had, as of the Closing, sufficient time to review all materials and
information set forth in Schedule 5.5,
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and sufficient time and access to review and investigate the Property.
Notwithstanding any other provision of this Agreement, except as set forth in
Subsections 5.1(d), (e) and (f), as they relate to the Leases, the Estoppels and
the Rent Rolls, the representations and warranties of Contributor as set forth
herein or in Contributor's Closing Certificate are hereby modified to be made
true to the extent that, as of the date hereof with respect to the
representations and warranties made herein, and as of the Closing Date with
respect to the representations and warranties made by Contributor as of the
Closing Date, (i) information contained in the records made available as set
forth Schedule 5.5 no longer makes the subject representation or warranty not
true, whether or not either Mack-Cali or MCRLP has actual knowledge of such
information, or (ii) either Mack-Cali or MCRLP has knowledge that the subject
representation or warranty is untrue, or (iii) Contributor has delivered or made
available to any of the individuals described in Section 6.1(l) other written
information disclosing that the subject representation or warranty is not true,
whether or not either Mack-Cali or MCRLP has actual knowledge of such
information.
6. REPRESENTATIONS AND WARRANTIES OF MACK-CALI AND MCRLP.
6.1 In order to induce Contributor to perform as required hereunder,
Mack-Cali and MCRLP hereby jointly and severally warrant and represent the
following:
(a) (i) MCRLP 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 MCRLP
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) Mack-Cali is a duly organized and validly existing
corporation organized and in good standing under the laws of the State of
Maryland, has all requisite power and authority to execute and deliver this
Agreement and all other documents and instruments to be executed and delivered
by it hereunder, and to perform its obligations hereunder and under such other
documents and instruments in order to permit MCRLP to acquire the Property in
accordance with the terms and conditions hereof. All necessary actions of the
board of directors of Mack-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 Mack-Cali and MCRLP hereunder, when duly
executed and delivered, will be the legal, valid and binding obligation of each
of Mack-Cali and MCRLP, enforceable in accordance with the terms of this
Agreement. The performance by each of Mack-Cali and MCRLP of each of its duties
and obligations under this Agreement and the documents and
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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 Mack-Cali and MCRLP 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 Mack-Cali and MCRLP 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 Contributor Unit Holders are duly authorized and, when issued by MCRLP, will
be fully paid and non-assessable, free and clear of any mortgage, pledge, lien,
encumbrance, security interest, claim or rights of interest of any third party
of any nature whatsoever. The shares of Common Stock to be issued by Mack-Cali
upon redemption of the Contributor Units will be reserved for future listing
with the New York Stock Exchange prior to the date upon which any of the same
will be 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) MCRLP has furnished to Contributor a true and complete
copy of the OP Agreement, as amended to date.
(e) Mack-Cali has caused to be delivered to Contributor copies
of the OP Agreement. The SEC Documents were, and those additional documents
filed between the date hereof and the Closing will be, prepared and filed in
compliance with the rules and regulations promulgated by the SEC, and do not and
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein in order to make the statements
contained therein, in light of the circumstances under which they were made or
will be made, not misleading.
(f) The consolidated financial statements included in the SEC
Documents have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the period involved (except as
may be indicated in the notes thereto or, in the case of the unaudited
statements, as permitted by Form 10-Q) and present fairly (subject, in the case
of the unaudited statements, to normal, recurring year-end audit adjustments)
the consolidated financial position of Mack-Cali and its Subsidiaries at the
dates thereof and the consolidated results of operations and cash flows for the
periods then ended. For purposes of this Agreement, "Subsidiaries" shall mean
(i) any entity of which Mack-Cali (or other specified entity) shall own directly
or indirectly through a subsidiary, a nominee arrangement or otherwise (x) at
least a majority of the outstanding capital stock (or other shares of beneficial
interest), or (y) at least a majority of the partnership, joint venture or
similar interests; and (ii) any entity in which Mack-Cali (or other specified
entity) is a general partner or joint partner, including without limitation
MCRLP. "Subsidiaries" shall specifically exclude Mack-Cali Services, Inc. and
The Grove Street Urban Renewal Corp., which are the only non-qualified REIT
subsidiaries of Mack-Cali as of the date hereof.
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(g) No action, suit, claim, investigation or proceeding,
whether legal or administrative or in mediation or arbitration, is pending or,
to the best of each of Mack-Cali's and MCRLP's knowledge, threatened, at law or
in equity, against either of Mack-Cali or MCRLP before or by any court or
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality which would prevent either of Mack-Cali or
MCRLP from performing its respective obligations pursuant to this Agreement.
(h) The execution and delivery of this Agreement and the
performance by each of Mack-Cali and MCRLP 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 Mack-Cali or MCRLP, including
without limitation, the United States of America, the States of New York and New
Jersey or any political subdivision of any of the foregoing, or any decision or
ruling of any arbitrator to which Mack-Cali or MCRLP is a party or by which
Mack-Cali or MCRLP is bound or affected.
(i) (1) Mack-Cali (A) 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 ("REIT") within the meaning of Section 856 of the Internal
Revenue Code of 1986, as amended (the "Code"), (B) has complied with all
applicable provisions of the Code which would have enabled it to qualify as a
REIT for 1995 and 1996, (C) has operated, and intends to continue to operate, in
such a manner so as to enable it to qualify as a REIT for 1998 and subsequent
years, and (D) has not taken or omitted to take any action which would
reasonably be expected to cause its disqualification as a REIT, and no challenge
to its REIT status is pending or, to Mack-Cali's knowledge, threatened.
(2) Mack-Cali has timely filed with the appropriate
Governmental Authority all Tax Returns required to be filed by it or has timely
requested extensions and any such request has been granted and has not expired.
Each such Tax Return is true and correct in all material respects. All Taxes
shown as owed by Mack-Cali or any of its Subsidiaries on any Tax Return have
been paid or accrued, except for Taxes being contested in good faith and for
which adequate reserves have been established. None of Mack-Cali or any of its
Subsidiaries has executed or filed with the Internal Revenue Service or any
other taxing authority any agreement now in effect extending the period for
assessment or collection of any Tax.
(3) To its knowledge, as of the date hereof, Mack-Cali
is a "domestically-controlled" REIT within the meaning of Section 897(h)(4)(B)
of the Code.
(j) All of Mack-Cali's real property and other material assets
are owned by Mack-Cali indirectly through its ownership of MCRLP and MCRLP's
Subsidiaries.
(k) Neither Mack-Cali nor MCRLP 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 Mack-Cali's or
MCRLP's creditors, suffered the appointment of a
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receiver to take possession of all, or substantially all, of Mack-Cali's or
MCRLP's assets, suffered the attachment or other judicial seizure of all, or
substantially all, of Mack-Cali's or MCRLP'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) As used throughout this Agreement, the phrases "to
Mack-Cali's knowledge," "to the knowledge of Mack-Cali", "to the best of
Mack-Cali's knowledge", to MCRLP's knowledge," "to the knowledge of MCRLP", "to
the best of MCRLP's knowledge" or any similar derivations thereof, shall mean
the actual (not constructive) knowledge of Tim Jones, John DeBari, Daniel
Wagner, Andrew Greenspan, Roger W. Thomas and Terry Noyes, without having
undertaken any independent investigation of facts or legal issues, without
having any duty to do so, and without imputing to the aforementioned persons the
knowledge of any employee, agent, representative or affiliate of Mack-Cali,
MCRLP or of any other person or entity.
6.2 Each of Mack-Cali and MCRLP 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
Mack-Cali and MCRLP were represented by legal counsel in connection with this
transaction.
6.3 All representations and warranties made by Mack-Cali and MCRLP
in this Agreement shall survive the Closing Date for a period of eighteen (18)
months, except that the representations and warranties set forth in clauses (a)
and (b) of Section 6.1 shall survive such Closing Date for the applicable period
of the statute of limitations (unless otherwise specified herein), and shall not
be merged in the delivery of the Deed. Mack-Cali and MCRLP agree to indemnify
and defend Contributor, and to hold Contributor 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 Contributor by reason of or
resulting from any breach, inaccuracy, incompleteness or non-fulfillment of the
representations, warranties, covenants and agreements of Mack-Cali and MCRLP
contained in this Agreement. Notwithstanding the foregoing, the partners of
MCRLP and the shareholders of Mack-Cali shall have no liability for any loss
resulting from any breach of the foregoing representations and warranties. In
addition, Contributor shall not have a right to bring a claim against Mack-Cali
or MCRLP by virtue of any of the representations or warranties being false or
misleading unless and until the aggregate damages to Contributor is reasonably
expected to exceed $100,000.00, but thereafter Contributor may bring a claim
against Mack-Cali or MCRLP for the entire amount of its aggregate damages.
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INTERIM OPERATING COVENANTS OF CONTRIBUTOR.
7.1 Contributor covenants and agrees that between the date hereof
and the Closing Date (the "Interim Period"), it shall perform or observe the
following with respect to the Real Property:
(a) Contributor will complete any capital expenditure program
currently in process or anticipated to be completed. 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 Property, or renew or modify any Lease, without
MCRLP's prior written consent; provided, however that Contributor shall be
permitted to enter into new leases, renewals or modifications upon prior notice
to, but without the prior written consent of MCRLP, so long as such lease,
renewal or modification is on market terms and conditions with bona fide third
parties and is the type of transaction which Contributor currently enters into
in the ordinary course of its business.
(c) Contributor shall comply with and/or remedy all violations
of statutes, ordinances, rules, regulations, orders, codes, directives or
requirements affecting the Real Property, whether or not such violations are now
noted in the records of or have been issued by any Governmental Authorities
prior to the Closing, and the Real Property shall be conveyed free of any such
violations, including, without limitation, violations of Environmental Laws.
(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 MCRLP, unless such agreement is on market terms and
conditions with bona fide third parties and is the type of agreement which
Contributor currently enters into in the ordinary course of its business, in
which case no consent of MCRLP will be required; or
(ii) Accept the surrender of any Service Contract or
Lease, or grant any concession, rebate, allowance or free rent, except in its
ordinary course of business on market terms, with bona fide third parties and
upon prior written notice to MCRLP.
(iii) Intentionally Deleted.
(e) Contributor shall not, between the date hereof and the
Closing Date, apply any Security Deposits with respect to any Tenant in
occupancy on the Closing Date, except in its ordinary course of business.
Contributor shall provide MCRLP with an updated schedule of Security Deposits at
the Closing or the Earnout Closing.
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(f) Between the date hereof and the Closing Date, Contributor
will not renew, extend or modify any of the Service Contracts without the prior
written consent of MCRLP unless such is done by Contributor in the ordinary
course of its business and such Service Contracts contain a right to terminate
on thirty (30) days' notice with no material cost to exercise such right, in
which case no consent of MCRLP will be required.
(g) Contributor shall not remove or permit the removal of any
Personal Property located in or on the Property, except as may be required for
repair and replacement. All replacements shall be free and clear of liens and
encumbrances except to the extent the original Personal Property was so
encumbered and shall be of quality at least equal to the replaced items and
shall be deemed included in this sale, without cost or expense to MCRLP, other
than expressly provided herein.
(h) Contributor shall, upon request of MCRLP at any time after
the date hereof, assist MCRLP in its preparation of audited financial
statements, statements of income and expense, and such other documentation as
MCRLP may reasonably request, covering the period of Contributor's ownership of
the Real Property.
(i) Between the date hereof and the Closing Date, Contributor
will make all required payments under any mortgage affecting the Real Property
within any applicable grace period, but without reimbursement by MCRLP therefor.
Contributor shall also comply with all other material terms covenants and
conditions of any mortgage on the Real Property.
(j) Contributor shall not cause or permit the Real Property,
or any interest therein, to be alienated, mortgaged, licensed, encumbered or
otherwise be transferred.
(k) Contributor agrees to maintain and keep in full force and
effect the hazard, liability and casualty insurance policies it is currently
maintaining, which policies Contributor represents are sufficient 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.
(l) Contributor shall permit MCRLP 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
MCRLP hereunder shall be maintained for MCRLP's inspection at Contributor's
address as set forth in Exhibit A hereto.
(m) Contributor shall:
(i) promptly notify MCRLP of, and promptly deliver to
MCRLP, a certified true and complete copy of any notice Contributor may receive,
on or before the Closing
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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 Contributor or its
representatives, deliver to MCRLP a certified true and complete copy of all
Environmental Documents; and
(iii) timely provide MCRLP 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 MCRLP
informed of all substantive negotiations and discussions with respect to the
foregoing matters on an on-going basis.
7.2 Prior to the Closing, Contributor shall deliver to MCRLP
reviewed Property Financials as set forth in Section 5.1(v). Within thirty (30)
days after the Closing Date, Contributor shall deliver to MCRLP Property
Financials, as set forth in Section 5.1(v), through the Closing Date. The
provisions of this Section 7.2 shall survive the Closing Date.
7.3 Intentionally Deleted.
7.4 Intentionally Deleted.
7.5 Contributor and its affiliated entities will timely pay all
Taxes due and payable during the Interim Period in connection with the ownership
and/or operation of the Property (by them or any predecessor entities) or their
businesses, for which MCRLP (or any of its direct or indirect partners) could be
held directly or indirectly liable or a claim could be made against the
Property. Contributor and its affiliated entities will timely file all Tax
Returns required to be filed during the Interim Period in connection with the
ownership and/or operation of the Property (by them or any predecessor entities)
or their businesses, the non-timely filing (or non-filing) of which could result
in direct or indirect liability to MCRLP (or any of its direct or indirect
partners) or a claim against the Property. Each such Tax Return will be complete
and accurate in all respects and will be filed on a basis consistent with past
practice. A copy of all such Tax Returns shall be delivered to Mack-Cali at
least three (3) days prior to such Tax Returns being filed. The obligations set
forth in this Section 7.5 shall survive the expiration or earlier termination of
this Agreement and/or shall survive the Closing Date for the applicable period
of the statute of limitations.
8. INTENTIONALLY DELETED.
9. ESTOPPEL CERTIFICATES.
9.1 Contributor agrees to deliver to each Tenant, no later than the
date hereof, an estoppel certificate in the form annexed hereto as Exhibit 9.1
for Tenant's execution, completed to reflect Tenant's particular Lease status.
Contributor agrees to use commercially reasonable efforts
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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, Contributor shall nevertheless use commercially reasonable efforts to
obtain estoppel certificates in the form in which each Tenant is obligated to
deliver the same as provided in its Lease. Contributor agrees to deliver to
MCRLP copies of all estoppel letters received by Tenants, in the form received
by Contributor. The estoppel certificates required to be obtained pursuant to
this Section 9.1 are collectively referred to as the "Estoppel Certificates".
9.2 As a condition to the Closing, Contributor shall deliver (a) an
Estoppel Certificate from all Tenants which lease 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 at least seventy-five (75%)
percent of the square footage of the Real Property including the Tenants set
forth in Clause 9.2(a) above.
9.3 For an Estoppel Certificate to be deemed delivered for purposes
of this Agreement, it must certify that 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.
10. CLOSINGS.
10.1 (a) Closing. The consummation of the transactions contemplated
hereunder with respect to the Property (the "Closing") shall take place at the
offices of Brownstein, Hyatt, Farber & Strickland, P.C., 410 Seventeenth Street,
22nd Floor, Denver, Colorado, 80202-4437, on or about March 25, 1998 (the
"Closing Date"). Upon notice to Contributor, MCRLP may elect to accelerate the
Closing Date to a date not less than five (5) days after the date of MCRLP's
notice.
(b) Intentionally Deleted.
(c) Intentionally Deleted.
(d) Intentionally Deleted.
10.2 On the Closing Date, except as otherwise set forth in
Subsections 10.2(z) and 10.2(aa), Contributor, at its sole cost and expense,
will deliver or cause to be delivered to MCRLP the following documents, fully
executed by all parties thereto other than MCRLP or parties claiming by, through
or under MCRLP:
(a) Special Warranty Deeds (the "Deeds") with covenants in
proper statutory form for recording so as to convey to MCRLP good and marketable
title to the Land being conveyed, free and clear of all liens and encumbrances,
except the Permitted Encumbrances. The delivery of the Deeds shall also be
deemed to constitute a transfer of the Personal Property
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associated with the Land conveyed by the Deeds; the delivery of all of the Deeds
shall be deemed to constitute a transfer of the balance of the Personal Property
to MCRLP.
(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 the same.
(c) All other original documents or instruments referred to
herein, including without limitation the Service Contracts, Licenses and Permits
and Books and Records, and certified copies of the same where Contributor, using
its best efforts, is unable to deliver originals of the same.
(d) A letter to Tenants advising the Tenants of the sale
hereunder and directing that rent and other payments thereafter be sent to MCRLP
or its designee, as MCRLP shall so direct.
(e) Intentionally Deleted.
(f) Duly executed and acknowledged omnibus assignment in the
form of Exhibit 10.2(f) annexed hereto ("Omnibus Assignment").
(g) Duly executed Asset Purchase Agreement in the form of
Exhibit 10.2(g) annexed hereto.
(h) An affidavit, and such other document or instruments
required by the Title Company, executed by Contributor certifying (i) against
any work done or supplies delivered to the Real Property which might be grounds
for a materialman's or mechanic's lien under or pursuant to Colorado Lien Law,
in form sufficient to enable the Title Company to affirmatively insure MCRLP
against any such lien, (ii) that the signatures on the Deeds are sufficient to
bind Contributor and convey the Property to MCRLP, and (iii) the Rent Roll.
(i) Affidavits and other instruments, including but not
limited to all organizational documents of Contributor and Contributor's general
partners, as applicable, including operating agreements, filed copies of limited
liability certificates, articles of organization, and good standing
certificates, reasonably requested by MCRLP 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 the same.
(j) The original Estoppel Certificates.
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(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 MCRLP to realize upon the same.
(l) A certificate indicating that the representations and
warranties of Contributor made in this Agreement are true and correct as of the
Closing Date or if there have been any changes, a description thereof.
(m) A Rent Roll for each Real Property, current as of the
Closing Date, certified by Contributor as being true and correct in all material
respects.
(n) All proper instruments as shall be reasonably required for
the conveyance to MCRLP 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 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 and Improvements.
(o) In order to avoid the imposition of the withholding tax
payment pursuant to Section 1445 of the Code, a certificate which is in a form
acceptable to Mack-Cali and which is signed by the appropriate 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) All such 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 MCRLP, including but not limited to, Internal Revenue Service forms and the
declaration required to be filed pursuant to Title 39, Article 14 of the
Colorado Revised Statutes.
(q) A statement setting forth all adjustments and prorations
shown thereon.
(r) Tradenames Assignment Agreement substantially in the form
of Exhibit 10.2(r) attached hereto.
(s) Estoppel certificate addressed to MCRLP from the
mortgagees of the Mortgages in form and substance reasonably acceptable to
MCRLP.
(t) An opinion of counsel from Brownstein, Hyatt, Farber &
Strickland, P.C., substantially in the form of Exhibit 10.2(t) regarding the due
execution, delivery and enforceability of this Agreement and the foregoing
documents.
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(u) Intentionally Deleted.
(v) Duly executed and acknowledged Indemnity Agreement from
Guarantor and Contributor as set forth in Section 5.3.
(w) Intentionally Deleted.
(x) Intentionally Deleted.
(y) Such other documents as may be reasonably required by
MCRLP or as may be appropriate to effectuate the consummation of the
transactions contemplated by this Agreement.
(z) At least fifteen (15) days prior to the Closing Date, a
schedule setting forth, with respect to each item of the Property for which
Contributor Units will be received as part of the consideration: (i) those
Contributors of such item of the Property that are allocated Contributor Units
and the amount of Contributor Units so allocated to any such Contributor; (ii)
the gross fair market value of such item of the Property for purposes of
determining the gain or loss that will be recognized for federal income tax
purposes as a result of the contribution; (iii) the adjusted basis of such item
of the Property immediately prior to the contribution; (iv) the amount of cash
and Contributor Units allocated to the item of the Property; and (v) the amount
of any liability relating to such item of the Property that MCRLP will either
assume or to which such item will be subject and which does not constitute a
"qualified liability" within the meaning of Treasury Regulations Section
1.707-5(a)(6).
(aa) At least fifteen (15) days prior to the Closing Date, a
schedule setting forth: (i) any Contributor named for purposes of Section
10.2(z)(i) which is to receive less than the full amount of Contributor Units
indicated for purposes of Section 10.2(z)(i); and (ii) the names of those
persons who are to receive Contributor Units that each such Contributor would
otherwise be entitled to receive and the amount of units that any such persons
are to receive. At least fifteen (15) days prior to the Closing Date, each
Contributor to which this Section 10.2(aa) is relevant shall issue "direction
letters" to MCRLP (in the form acceptable to MCRLP), to the effect that each
such Contributor authorizes the issuance by MCRLP of Contributor Units directly
to such persons (and in such amounts) which are set forth for purposes of
Section 10.2(aa)(ii).
(bb) A letter from each applicable municipal department or
agency having jurisdiction that the Property is in compliance with the laws,
codes, rules, regulations and ordinances regarding (i) zoning, (ii) building,
(iii) health and (iv) fire, life and safety.
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(cc) A computer diskette containing any closing or other
documents executed in connection with this transaction and prepared by
Contributor or its counsel, in WordPerfect or Microsoft Word format.
(dd) All original organizational documents relating to the
Contributor, and all statements of accounts, books and records and insurance
policies.
(ee) a certificate executed by each Contributor Unit Holder
and each Contributor receiving Contributor Units, substantially in the form of
Exhibit 10.2(ee).
10.3 On the Closing Date, Mack-Cali and MCRLP, at their sole cost
and expense, will deliver or cause to be delivered to Contributor the following
documents, fully executed by all parties thereto other than Contributor or
parties claiming by, through or under Contributor:
(a) The Cash Payment, net of adjustments and prorations.
(b) The Permanent Certificates representing, in the aggregate,
the Contributor Units.
(c) Intentionally Deleted.
(d) Duly executed and acknowledged Omnibus Assignment in the
form of Exhibit 10.2(f) annexed hereto.
(e) A certificate indicating that the representations and
warranties of Mack-Cali and MCRLP made in this Agreement are true and correct as
of the Closing Date or if there have been any changes, a description thereof.
(f) Affidavits and other instruments, including but not
limited to all organizational documents of Mack-Cali and MCRLP including limited
partnership agreements, filed copies of limited partnership certificates,
articles of organization, and good standing certificates, reasonably requested
by Contributor evidencing the power and authority of Mack-Cali and MCRLP to
enter into this Agreement and any documents to be delivered hereunder, and the
enforceability of the same.
(g) A Registration Rights Agreement substantially in the form
of Exhibit 10.3(g).
(h) Amendment to OP Agreement substantially in the form of
Exhibit 10.3(h) reflecting admission of the Contributor Unit Holders as limited
partners.
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(i) Tradenames Assignment Agreement substantially in the form
of Exhibit 10.2(r).
(j) Intentionally Deleted.
(k) Such other documents as may be reasonably required or
appropriate to effectuate the consummation of the transactions contemplated by
this Agreement.
10.4 Contributor shall pay for the premium charges and costs for
title insurance policies (but not any endorsements to such policies required by
Mack-Cali); all survey costs; all costs incurred to repay or satisfy any and all
liens; all administrative and legal costs associated with the assumption by
MCRLP of the mortgages to which this transaction is subject (other than the fees
or charges payable in connection with the mortgages being paid-off by Mack-Cali
as herein provided); all leasing commissions due to Tenants in connection with
the initial terms of their respective Leases; all costs of tenant improvement
concessions due to Tenants in connection with the initial terms of their
respective Leases; and all customary prorations and apportionments. Mack-Cali
shall pay for the costs of all customary documentary and recording fees;
(including, without limitation, the "documentary fee" imposed by Article 13 of
the Colorado Revised Statutes); the cost of any endorsements to its title
insurance policies; all due diligence investigations costs (including, without
limitation, the cost of all Phase I Reports for the Property, which
environmental assessment reports shall be dated no more than thirty (30) days
prior to the Closing Date); any fees or charges payable in connection with the
mortgages being paid-off by Mack-Cali as herein provided and all customary
prorations and apportionments. Each party shall be responsible for its own
attorney's fees. The provisions of this Section 10.4 shall survive the Closing.
10.5 The Closing shall be consummated without compliance with bulk
sales laws. If by reason of any applicable bulk sales law, any claims are
asserted by creditors of 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 MCRLP (and its
respective directors, officers, employees, affiliates, successors and assigns)
from and against all losses or liabilities, if any, based upon, arising out of
or otherwise in respect of the failure to comply with such bulk sales laws.
10.6 Mack-Cali and MCRLP acknowledge and agree that, except as set
forth in this Agreement, MCRLP is acquiring the Property in its "as is"
condition "subject to all faults" and specifically and expressly without any
warranties, representations or guarantees, either express or implied, of any
kind, nature, or type whatsoever from or on behalf of Contributor. Mack-Cali and
MCRLP acknowledge that, except as set forth in this Agreement, and except for
documents, reports and information related to the environmental integrity of the
Real Property, neither Mack-Cali nor MCRLP has relied and is not relying on any
information, document, reports, sales brochure or other literature, maps or
sketches, financial information, projections, pro formas or statements, that may
have been given by or made by or on behalf of Contributor with respect to the
Property. MCRLP
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and Mack-Cali further acknowledge that all materials relating to the Property
which have been provided by Contributor, including but not limited to, the Phase
I Reports, have been provided without any warranty or representation, expressed
or implied as to their content, suitability for any purpose, accuracy,
truthfulness or completeness and, except as expressly provided herein, neither
MCRLP nor Mack-Cali shall have any recourse against Contributor or its counsel,
advisors, agents, officers, directors or employees for any information in the
event of any errors therein or omissions therefrom.
Contributor does not warrant or make any representation, express or
implied, as to the merchantability, quantity, quality, condition, suitability or
fitness of the Property for any purpose whatsoever, including, without
limitation, its compliance with applicable building codes and ordinances, zoning
laws, environmental laws including, without limitation, the Clean Air Act,
CERCLA and the Super Fund Amendments and Reauthorization Act (SARA), the
Americans with Disabilities Act, and any other federal, state or local statutes,
codes or ordinances. MCRLP also acknowledges and agrees that (i) the
Contributor's representations and warranties set forth in Section 5 and (ii) the
provisions in this Agreement for delivery of existing Phase I Reports and
inspection and investigation of the Property are adequate to enable MCRLP to
make MCRLP's own determination with respect to the suitability or fitness of the
Property, including, without limitation, its compliance with applicable building
codes and ordinances, zoning laws, environmental laws including, without
limitation, the Clean Air Act, CERCLA and the SARA, the Americans with
Disabilities Act, and any other federal, state or local statutes, codes or
ordinances.
Except to the extent (a) caused by a breach of any of Contributors'
representations hereunder; (b) related to claims by or liabilities to third
parties unrelated to Mack-Cali or MCRLP; or (c) as otherwise expressly set forth
herein, including, without limitation, as indemnified pursuant to the Indemnity
Agreement, MCRLP and Mack-Cali, for themselves and their successors and assigns,
hereby release each of the Contributors, and their agents, employees, partners,
officers, directors, members, managers, contractors, consultants and
representatives from, and waive any and all causes of action or claims against
any of such persons for (i) any and all liability attributable to any physical
condition of or at the Property, including, without limitation, the presence on,
under or about the Property of any materials the release or storage of which is
regulated by law; (ii) any and all liability resulting from the failure of the
Property to comply with any applicable laws; and (iii) any liabilities, damages
or injury arising from, connected with or otherwise caused by statements,
opinions or information obtained from any of such persons with respect to the
Property.
ADJUSTMENTS.
11.1 The following items under (a) through (g) with respect to the
Real Property are to be apportioned as of midnight on the date preceding the
Closing:
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(a) Rents, escalation charges and percentage rents payable by
Tenants as and when collected. All moneys received from Tenants from and after
the Closing shall belong to MCRLP and shall be applied by MCRLP to current rents
and other charges under the Leases. After application of such moneys to current
rents and charges, MCRLP agrees to remit to Contributor any excess amounts paid
by a Tenant to the extent that such Tenant was in arrears in the payment of rent
prior to the Closing.
(b) A cashier's or certified check or wire transfer to the
order of MCRLP in the amount of all cash Security Deposits and any prepaid
rents, together with interest required to be paid thereon. At the election of
MCRLP, such amount may be allotted to MCRLP as a credit against the Cash
Payment.
(c) Utility charges payable by Contributor, including without
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 ten (10) days prior to the Closing Date.
(d) Amounts payable under the Service Contracts other than
those Service Contracts which MCRLP has elected not to assume.
(e) 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.
(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 fifteen (15) days prior to the Closing by Contributor's supplier.
(g) Intentionally Deleted.
11.2 Intentionally Deleted.
11.3 At the Closing, Contributor shall deliver to MCRLP a list of
additional rent, however characterized, under all Leases, 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 MCRLP of the Additional Rents billed to Tenants, and the
amounts actually incurred for calendar year 1997, Contributor and MCRLP shall be
liable for overpayments of Additional Rents, and shall be entitled to 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. Notwithstanding the foregoing,
the calculation of real estate
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taxes and the collection of Additional Rents from Tenants attributable to such
real estate taxes, as reflected on the closing statement related hereto, shall
be final as of the Closing Date.
11.4 All amounts due and owing under the Mortgages other than the
outstanding principal balance thereof, including by way of example accrued and
unpaid interest, deferred interest, late charges, default interest, prepayment
fees or penalties, and other fees and charges, shall be paid by Contributor on
or before the Closing. Notwithstanding any language to the contrary in this
Agreement, from and after the Closing, MCRLP shall be entitled to any payment by
Evolving Systems, Inc. of any or all of the Allowance Repayment (as defined in
the Lease).
11.5 If, on the Closing Date, the Property or any part thereof shall
be or shall have been affected by an assessment or assessments which are or may
become payable in annual installments, all the unpaid installments of any such
assessment due and payable on or prior to the Closing Date shall be paid and
discharged by Contributor on the Closing Date.
11.6 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 Colorado.
11.7 Any errors in calculations or adjustments shall be corrected or
adjusted as soon as practicable after the Closing.
11.8 The provisions of this Section 11 shall survive the Closing
Date.
12. CONDITIONS PRECEDENT TO CLOSING.
12.1 The obligations of Contributor to deliver title to the Real
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 MCRLP and
Mack-Cali herein shall be true and correct in all material respects with the
same force and effect as though such representations and warranties had been
made on and as of the Closing Date; provided, however, that a failure of any
representations or warranties to be true and correct in all material respects
shall not give rise to a claim by Contributor hereunder so long as such matters
do not have a material adverse effect on the transactions contemplated herein.
(b) MCRLP and Mack-Cali shall have executed and delivered to
Contributor all of the documents provided herein for said delivery.
(c) Intentionally Deleted.
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(d) Mack-Cali and MCRLP shall have performed all covenants and
obligations undertaken by Mack-Cali and MCRLP herein in all material respects
and complied with all material conditions required by this Agreement to be
performed or complied with by them on or before the Closing Date.
12.2 The obligations of Mack-Cali and MCRLP to accept title to the
Property and Mack-Cali's and MCRLP's obligation to perform the other covenants
and obligations to be performed by Mack-Cali and MCRLP 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 Mack-Cali or MCRLP):
(a) Subject to Section 5.5(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. For the purposes of the
Closing condition described in this Section 12.2(a), any limitation to the
knowledge, best knowledge, or actual knowledge in any representation, warranty,
covenant or agreement made by Contributor herein shall be inapplicable.
(b) Contributor shall have performed all covenants and
obligations undertaken by Contributor 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
MCRLP a Title Policy meeting the requirements set forth in Section 4 hereof for
an "insurable title".
(d) The Real Property shall be in compliance with all
Environmental Laws.
13. INTENTIONALLY DELETED.
LEASING COMMISSIONS AND TENANT IMPROVEMENT OBLIGATIONS.
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 Contributor. MCRLP shall be
credited at Closing as set forth on Schedules 5.1(f) and 5.1(m) respectively
with respect to certain tenant improvement and leasing commission obligations,
but Contributors shall remain liable for any amounts due and owing in excess of
such credits. All leasing commissions on account of extensions or renewals of
Leases made after the Closing Date shall be paid by MCRLP. All tenant
improvements obligations shall be satisfied prior to the Closing Date. The
provisions of this Section shall survive the Closing.
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15. ASSIGNMENT.
This Agreement may not be assigned by Mack-Cali or MCRLP except to a
directly or indirectly wholly-owned subsidiary or subsidiaries of Mack-Cali or
MCRLP, 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 Mack-Cali or MCRLP shall be
deemed null and void and of no force and effect. Notwithstanding anything to the
contrary contained herein, Mack-Cali or MCRLP may assign the right to purchase
individual portions of the Property to various entities, provided that each of
such entities is a Permitted Assignee. A copy of any assignment permitted
hereunder, together with an agreement of the assignee assuming all of the terms
and conditions of this Agreement to be performed by Mack-Cali or MCRLP with
respect to the portion of the Real Property, in form reasonably satisfactory to
counsel for Contributor, shall be delivered to the attorneys for Contributor
prior to the Closing, and in any event, no such assignment shall relieve
Mack-Cali and MCRLP from their obligations under this Agreement.
16. BROKER.
Mack-Cali, MCRLP, and Contributor represent that, with the exception
of Sonnenblick Goldman Ltd. and Pacifica Holding Company LLC (collectively,
"Brokers") 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 they may sustain, incur or
be exposed to by reason of any breach of the foregoing representation and
warranty. Notwithstanding the foregoing, Contributor shall pay in full any
commission, fee or other compensation due the Brokers pursuant to separate
agreements, and Guarantor and Contributor agree to indemnify, defend and hold
MCRLP and Mack-Cali harmless from and against any and all loss, cost, damage,
liability, or expense, including reasonable attorneys' fees, which MCRLP or
Mack-Cali may sustain, incur or be exposed to by reason of Contributor's failure
to pay in full the Brokers pursuant to such separate agreements. The provisions
of this Section shall survive the Closing and/or other termination of this
Agreement.
17. CASUALTY LOSS.
17.1 Contributor shall continue to maintain, in all material
respects, the fire and extended coverage insurance policies with respect to the
Property (the "Insurance Policies") which are currently in effect, through the
date that said coverage currently expires, which obligation shall survive the
Closing.
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17.2 If at any time prior to the Closing Date, all or any portion of
the Property is destroyed or damaged as a result of fire or any other casualty
(a "Casualty"), Contributor shall promptly give written notice ("Casualty
Notice") thereof to MCRLP. Within ten (10) days after the receipt of the
Casualty Notice, MCRLP and Mack-Cali shall have the right, at its sole option,
to terminate this Agreement with respect to said Property by written notice to
Contributor. Notwithstanding the foregoing, MCRLP and Mack-Cali shall not have
the right to terminate this Agreement if (a) Contributor's insurance fully
covers the damage resulting from the Casualty; and (b) the proceeds of any
insurance, together with a credit equal to Contributor's deductible under the
Insurance Policies, shall be paid to MCRLP and Mack-Cali at the time of the
Closing; and (c) all unpaid claims and rights in connection with losses to the
Property shall be assigned to MCRLP and Mack-Cali at the Closing without in any
manner affecting the Exchange Consideration hereunder.
17.3 If the Property is the subject of a Casualty but MCRLP or
Mack-Cali does not terminate this Agreement pursuant to the provisions of this
Section, then Contributor shall, prior to the Closing Date, cause all temporary
repairs to be made to the Property as shall be required to prevent further
deterioration and damage to the Property and to protect public health and
safety; provided, however, that any such repairs shall first be approved by
MCRLP or Mack-Cali. Contributor shall have the right to be reimbursed from the
proceeds of any insurance with respect to the Property for the cost of such
temporary repairs.
18. CONDEMNATION.
In the event of a material taking (as defined in this Section 18),
MCRLP and Mack-Cali shall have the right, at its sole option, to either (a)
terminate this Agreement by giving Contributor written notice to such effect at
any time after its receipt of written notification of any such occurrence, or
(b) accept title to the remainder of the Property without reduction of any
consideration given hereunder. Should MCRLP or Mack-Cali so terminate this
Agreement in accordance with this Section, neither party shall have any further
liability or obligations to the other. In the event MCRLP or Mack-Cali shall not
elect to cancel this Agreement, Contributor shall, subject to the rights of the
holder of any existing mortgage, assign all proceeds of such taking to MCRLP or
Mack-Cali, and the same shall be MCRLP's or Mack-Cali's sole property, and MCRLP
or Mack-Cali shall have the sole right to settle any claim in connection with
the Property. The term "material taking" shall be defined to mean the
institution of any proceedings, judicial, administrative or otherwise which
involve (a) the taking of a portion of Real Property such that ingress and
egress to such Real Property is impaired, (b) the taking of a portion of the
parking spaces of a Real Property such that after such taking the Real Property
will not be in compliance with local zoning regulations regarding adequate
parking, or (c) the taking of any part of a Building.
19. TRANSFER RESTRICTIONS.
19.1 Contributor hereby agrees that the Contributor Units may not be
sold, assigned, transferred, pledged, encumbered or in any manner disposed of
(collectively,
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"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 19, or (ii) publicly (subject to the
restrictions of the Act and the rules and regulations promulgated thereunder) in
trading blocks of 150,000 Common Stock shares in any single day. Notwithstanding
anything herein to the contrary, the provisions of this Section 19 shall not
apply to (i) pledges or encumbrances of all or a portion of the Contributor
Units to an institutional lender, or (ii) Transfers of all or any portion of the
Contributor Units to permitted transferees as set forth in the OP Agreement (the
"Permitted Transferees"). Any holder of Contributor Units pursuant to (i) or
(ii) of the preceding sentence shall be subject to the terms and conditions of
the OP Agreement.
19.2 If any of the Contributor Unit Holders, or any of their
Permitted Transferees (each a "Seller") 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 Seller shall
not sell, transfer, or otherwise dispose of (the "Proposed Disposition") such
Units or Underlying Shares (the "Disposition Securities") to a third party (the
"Purchaser"), unless prior to such Proposed Disposition, such Seller shall have
promptly reduced the terms and conditions, if any, of the Proposed Disposition
to a reasonably detailed writing and shall have delivered written notice (the
"Disposition Notice") of such Proposed Disposition to MCRLP. The Disposition
Notice 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.
19.3 Mack-Cali shall not sell the Property within four (4) years
from the date of the Closing (the "Restricted Period") without the prior written
consent of Contributor, other than (1) in connection with a transaction which
does not result in recognition of gain by Pacifica; (2) a sale of any of the
Property set forth in Schedule 19.3 hereto; (3) as determined by the Board of
Directors of Mack-Cali (the "Board") as necessary to satisfy any material
monetary default on any mortgage secured by the Property; (4) as determined by
the Board as necessary to satisfy any material, unsecured debt, judgment or
liability of Mack-Cali when the same becomes due (at maturity or otherwise); (5)
in connection with the sale of all or substantially all of the properties owned
by Mack-Cali under such terms and conditions which the Board, in its sole
judgment, determines to be in the best interests of Mack-Cali and its public
stockholders; and/or (6) sales of the Property which do not result in material
and adverse tax consequences for Pacifica. Mack-Cali may dispose of any or all
of the Property in its sole discretion, and without the consent of Contributor,
upon the expiration of the Restricted Period. Notwithstanding any of the
foregoing language to the contrary, Mack-Cali shall not distribute the Property
for a period of seven (7) years if the distribution of such Property would
result in the recognition of income by Contributor pursuant to Sections
704(c)(1)(B) or 737 of the Code, except as otherwise permitted in clauses (1)
through (7) above.
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20. INTENTIONALLY DELETED.
21. TAX MATTERS.
21.1 (a) Contributor will timely pay or provide for the payment of
all Taxes which are attributable to all Pre-Closing Tax Periods, but which are
not due and payable until after the Closing Date in connection with the
ownership and/or operation of the Property (by them or any predecessor entities)
or their businesses for which either MCRLP (or any of its direct or indirect
partners) could be held directly or indirectly liable or a claim could be made
against the Property. To the extent allowed by law, Contributor will timely file
all Tax Returns which are required to be filed in connection with the ownership
and/or operation of the Property (by them or any predecessor entities) or their
businesses for all Pre-Closing Tax Periods but which are not required to be
filed until after the Closing Date and the non-timely filing (or non-filing) of
which could result in direct or indirect liability to MCRLP (or any of its
direct or indirect partners) or a claim against the Property. Each such Tax
Return will be complete and accurate. Contributor will provide Mack-Cali with a
copy of all such Tax Returns promptly after such Tax Returns are filed. All
Taxes imposed in connection with the ownership and/or operation of the Property
during any taxable periods which begin on or before the Closing Date and end
after the Closing Date ("Straddle Periods" or "Straddle Period") shall be
allocated between Contributor and MCRLP in accordance with their respective
periods of ownership of the Property. Contributor will timely pay all Taxes with
respect to their businesses for any Straddle Period (and any other taxable
period) for which either MCRLP (or any of its direct to indirect partners) could
be held directly or indirectly liable or a claim could be made against the
Property.
(b) Contributor shall provide Mack-Cali with a copy of its
Federal income tax returns which reflect (in whole or in part) any of the
transactions contemplated hereunder and which reflect (in whole or in part) any
of the gain or loss recognized in respect of such transactions.
21.2 Contributor shall pay any and all Taxes including without
limitation, Taxes imposed with respect to the operation of its business and the
ownership or operation of the Property for all taxable periods (or portions
thereof) ending on or prior to the Closing imposed upon MCRLP based, in whole or
in part, upon the failure to comply with the sales laws.
21.3 Contributor is hereby authorized to continue the proceeding or
proceedings now pending for the reduction of the assessed valuation of the
Property as set forth on Schedule 21.3 and to litigate or settle the same in
Contributor's discretion. MCRLP is hereby authorized by Contributor, in MCRLP's
sole discretion, to file any applicable proceeding for the 1997 fiscal year for
the reduction of the assessed valuation of the Property. The net refund of
taxes, if any, for any tax year for which Contributor or MCRLP shall be entitled
to share in the refund shall be divided between Contributor and MCRLP in
accordance with the apportionment of taxes pursuant to the provisions hereof.
All expenses in connection therewith, including counsel fees, shall be borne by
Contributor and MCRLP in proportion to their ownership period of the asset in
question.
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21.4 For purposes of this Agreement:
(a) "Taxes" or "Tax" 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.
(b) "Tax Returns" or "Tax Return" means all original and
amended Federal, state, local and foreign tax returns, declarations, statements,
reports, schedules, forms, information returns and other filings relating to
Taxes.
(c) "Audits" or "Audit" means any audit, assessment of Taxes,
any other examination or claim by any Governmental Authority, judicial,
administrative or other proceeding or litigation (including any appeal of any
such judicial, administrative or other proceeding or litigation) relating to
Taxes and/or Tax Returns.
21.5 The provisions of this Section shall survive the Closing Date.
22. PUBLICATION.
22.1 MCRLP shall have the exclusive right to make such public
announcements or filings with respect to the exchange as MCRLP may deem
reasonably prudent and, upon advice of counsel, as may be necessary or required
by law.
23. REMEDIES.
23.1 If the conditions set forth in Section 12.2 with respect to the
Closing have been satisfied (unless the failure or inability to be so satisfied
is due to Mack-Cali or MCRLP) and if MCRLP is not ready, willing and able to
perform its obligations hereunder on the Closing Date, or in the event of a
material default of MCRLP or Mack-Cali or MCRLP's or Mack-Cali's material
failure to comply with any material representation, warranty, covenant or
agreement set forth herein with respect to the Closing, then Contributor shall
have the right as its sole and exclusive remedy to either (i) terminate this
Agreement upon written notice to MCRLP, in which event neither party shall
thereafter have any further obligations under this Agreement, except those which
expressly survive the termination hereof; or (ii) maintain an action for either
(A) specific performance, or (B) monetary damages.
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23.2 If the conditions set forth in Section 12.1 have been satisfied
(unless the failure or inability to be so satisfied is due to Contributor), and
if Contributor is not ready, willing and able to perform its obligations
hereunder on the Closing Date, or in the event of any material default on the
part of Contributor, or Contributor's failure to comply with any material
representation, warranty, covenant or agreement set forth herein, MCRLP shall be
entitled to either (i) terminate this Agreement upon notice to Contributor
following which neither party shall thereafter have any further obligations
under this Agreement, except those which expressly survive the termination
hereof; or (ii) commence an action against Contributor seeking either (A)
monetary damages, or (B) specific performance of Contributor's obligations under
this Agreement.
23.3 The acceptance of the Deed by MCRLP shall be deemed a full
performance and discharge of every agreement and obligation of Contributor to be
performed under this Agreement, except those, if any, which are specifically
stated in this Agreement to survive the Closing.
24. INTENTIONALLY DELETED.
25. 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 Mack-Cali: c/o Mack-Cali Realty Corporation
or MCRLP 11 Commerce Drive
Cranford, New Jersey 07016
Attn: Roger W. Thomas, Esq.
(908) 272-8000 (tele.)
(908) 272-6755 (fax)
with a copy to: Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attn: Wayne B. Heicklen, Esq.
(212) 326-0425 (tele.)
(212) 326-0806 (fax)
If to Contributor: Pacifica Holding Company, LLC
5975 South Quebec Street, Suite 100
Englewood, Colorado 80111
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Attn: Mr. Steven Leonard
(303) 220-5565 (tele.)
(303) 220-5585 (fax)
with a copy to: Brownstein, Hyatt, et al.
410 17th Street, 22nd Floor
Denver, Colorado 80202
Attn: Edward Barad, Esq.
(303) 534-6335 (tele.)
(303) 623-1956 (fax)
or to such other address as either party may from time to time designate by
written notice to the other or to the Escrow Agent. Notices given by (i)
overnight delivery service as aforesaid shall be deemed received and effective
on the first business day following such dispatch, and (ii) telecopy or fax
machine shall be deemed given at the time and on the date of machine transmittal
provided the same is sent prior to 4:00 p.m. Eastern Time 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.
26. DEPRECIATION METHOD.
Mack-Cali, as the general partner of MCRLP, covenants and agrees
that MCRLP and its affiliates will use the "traditional method with curative
allocations" (as defined in Treasury Regulations Section 1.704-3(c)) of
allocating income, gain, loss and deduction to account for the variation between
the fair market value and adjusted basis of the Property for federal income tax
purposes with respect to (i) the contribution of the Property, and (ii) any
revaluation of the Property in accordance with the provisions of Treasury
Regulations Sections 1.704-1(b)(2)(iv)(f), 1.704-1(b)(2)(iv)(g) and
1.704-3(a)(6).
27. MISCELLANEOUS.
27.1 Intentionally Deleted.
27.2 This Agreement constitutes the entire agreement between the
parties and incorporates and supersedes all prior negotiations and discussions
between the parties. This Agreement shall be binding upon and inure solely to
the benefit of each party hereto and their successors and assigns, and nothing
in the Agreement express or implied, is intended to confer upon any other person
any rights or remedies of any nature whatsoever under or by reason of this
Agreement.
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27.3 This Agreement cannot be amended, waived or terminated orally,
but only by an agreement in writing signed by the party to be charged.
27.4 This Agreement shall be interpreted and governed by the laws of
the State of Colorado, without regard to conflicts of laws principles, and shall
be binding upon the parties hereto and their respective successors and assigns.
27.5 The caption headings in this Agreement are for convenience only
and are not intended to be part of this Agreement and shall not be construed to
modify, explain or alter any of the terms, covenants or conditions herein
contained. The, feminine or masculine gender, when used herein, shall each
include the other gender and the use of the singular shall include the plural.
27.6 If any term, covenant or condition of this Agreement is held to
be invalid, illegal or unenforceable in any respect, this Agreement shall be
construed without such provision.
27.7 Each party shall, from time to time, execute, acknowledge and
deliver to the other party 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 Contributor and MCRLP or Mack-Cali. 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, MCRLP, Mack-Cali or the party whose counsel
drafted this Agreement.
27.8 This Agreement shall not be effective or binding until such
time as it has been executed and delivered by all parties hereto. This Agreement
may be executed by the parties hereto in counterparts, all of which together
shall constitute a single Agreement.
27.9 All references herein to any Section, Exhibit, or Schedule
shall be to the Sections of this Agreement and to the Exhibits and Schedules
annexed hereto unless the context clearly dictates otherwise. All of the
Exhibits and Schedules annexed hereto are, by this reference, incorporated
herein.
27.10 In the event that Contributor and MCRLP or Mack-Cali enter
into litigation or alternative dispute resolution in connection with this
Agreement or the transaction contemplated herein, the non-prevailing party in
such litigation or alternative dispute resolution shall be responsible for the
payment of all expenses and reasonable attorneys' fees incurred by the
prevailing party.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE.]
237
Exhib. No. 10.155
CONTRIBUTION AND EXCHANGE AGREEMENT
THIS CONTRIBUTION AND EXCHANGE AGREEMENT (the "Agreement") made this 25th
day of March, 1998, by and between PACIFICA 384 INVERNESS PARTNERSHIP
("Contributor"), a Colorado general partnership with an address c/o Pacifica
Holding Company, 5975 South Quebec Street, Suite 100, Englewood, Colorado 80111,
MACK-CALI REALTY, L.P., a Delaware limited partnership ("MCRLP") and MACK-CALI
REALTY CORPORATION, a Maryland corporation ("Mack-Cali"), each having an address
at 11 Commerce Drive, Cranford, New Jersey 07016.
RECITALS
A. Contributor owns various commercial properties located throughout the
Denver, Colorado metropolitan area. Mack-Cali, through MCRLP and certain
affiliated entities of MCRLP, similarly owns various commercial properties
located throughout New Jersey, New York, Pennsylvania, Nebraska, Iowa,
California, Florida, Arizona, Connecticut and Texas.
B. Contributor, MCRLP and Mack-Cali have determined that the transactions
contemplated hereby are in the respective parties' best interests.
NOW, THEREFORE, in consideration of ten dollars ($10.00), the mutual
promises hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, do hereby agree as follows:
1. SUBJECT OF CONVEYANCE.
In accordance with the terms and conditions of this Agreement, on the
Closing Date (as defined herein), Contributor agrees to contribute, convey or
otherwise transfer to certain designees of MCRLP all of Contributor's right,
title and interest in and to the assets set forth in paragraphs (a) through (h)
of this Section 1:
(a) that certain real property situate, lying and being in the State of
Colorado and being more particularly described on Schedule 1(a) (the "Land"),
which Schedule 1(a) sets forth the name, state of organization and type of
entity of Contributor of a parcel of Land and all of the improvements located on
the Land (individually, a "Building" and collectively, the "Improvements");
(b) all rights, privileges, grants and easements appurtenant to
Contributor's interests in the Land and Improvements, if any, including without
limitation, 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
collectively referred to herein as the "Real Property");
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(c) except as set forth on Schedule 1(c) all personal property, artwork,
fixtures, equipment, inventory and computer programming and software owned by
Contributor and located on any of the Real Property or used at any of the
management and corporate offices of Contributor (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
(each a "Lease" and collectively, the "Leases") and any guaranties provided
thereunder, and rents, additional rents, reimbursements, profits, income,
receipts and the amount deposited (the "Security Deposit") under any Lease in
the nature of security for the performance of the Tenant's (as defined herein)
obligations thereunder;
(e) Intentionally Deleted.
(f) all permits, licenses, guaranties, approvals, certificates and
warranties relating to the Real Property and the Personal Property
(collectively, the "Permits and Licenses"), all of Contributor's rights, titles
and interests in and to those contracts and agreements for the servicing,
maintenance and operation of the Real Property ("Service Contracts") and
telephone numbers in use at any of the Real Property or the management offices
and corporate headquarters of Contributor (together with the Permits and
Licenses and the Service Contracts, the "Intangible Property");
(g) all books, records, promotional material, tenant data, leasing
material and forms, past and current rent rolls, files, statements, 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
(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.
The Real Property, the Personal Property, the Leases, the Intangible
Property, the Books and Records and the other property interests being conveyed
hereunder are hereinafter collectively referred to as the "Property".
For all purposes herein, unless the context clearly dictates otherwise,
any reference herein to "Contributor" shall be deemed to be a reference to the
entity which is to convey any assets hereunder to MCRLP or its designees.
2. PAYMENT TERMS.
2.1 Total Exchange Consideration. The aggregate consideration for
the Property (the "Exchange Consideration") is Four Million Four Hundred Ten
Thousand and xx/100 ($4,410,000.00) Dollars, to be paid by MCRLP in accordance
with Section 2.2.
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2.2 The Property. (a) At the Closing (as defined herein), and upon
satisfaction of the terms and conditions provided herein, Contributor agrees to
contribute the Property to MCRLP or its Permitted Assignees (hereinafter
defined), and MCRLP (and Mack-Cali where applicable) agrees, subject to
adjustment as set forth herein, (i) to pay to Contributor or its designees, in
cash, the amount of Four Million Four Hundred Ten Thousand and xx/100
($4,410,000.00) Dollars (the "Cash Payment") and (ii) to issue the Contributor
Units (hereinafter defined) in an amount set forth in Subsection 2.2(b) to such
persons as Contributor shall direct in writing (as set forth in Section
10.2(aa)) as soon as practicable following the date hereof (the "Unit Holders").
(b) Simultaneous with MCRLP accepting the Property, MCRLP
shall issue, subject to adjustments as set forth herein, ___________ common
units of limited partnership interests in MCRLP (the "Contributor Units")
convertible into Mack-Cali Common Stock ("Common Stock"); provided, however,
that the Unit Holders shall be issued and shall hold the Contributor Units in
accordance with the provisions of Section 19.
(c) At the Closing, MCRLP shall issue to Contributor and/or
the Unit Holders or their designees certificates representing in the aggregate
________ Contributor Units (the "Permanent Certificates"), which Permanent
Certificates shall contain the legend set forth on Exhibit 10.2(ee).
(d) All rights and benefits incidental to the ownership of the
Contributor Units received in exchange for the Property, 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, shall accrue for the
benefit of the Unit Holders commencing on the Closing Date (as defined herein).
(e) With respect to the first Partnership Record Date (as
defined in the OP Agreement (as defined below)) on or after the Closing, the
Unit Holders 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 Unit Holders held
Contributor Units.
2.3 Intentionally Deleted.
2.4 Intentionally Deleted.
3. INSPECTION PERIOD; MCRLP'S RIGHT OF TERMINATION AND REJECTION PRIOR
TO CLOSING.
3.1 Prior to the Closing (the "Inspection Period"), time being of
the essence as to each such date, MCRLP, at its sole cost and expense, 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, financial,
market analysis, development and economic feasibility studies and other tests,
investigations or studies as MCRLP, in its sole
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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 Leases, Service Contracts, copies
of Contributor's Tax Returns and the Property Financials (as hereinafter
defined) as of and for the years ending December 31, 1995, 1996 and 1997,
engineering and environmental reports, development approval agreements, permits
and approvals, which inspection shall be satisfactory to MCRLP in its sole
discretion. Contributor agrees to cooperate with MCRLP in such review and
inspection and, to the extent not yet delivered, shall deliver said documents
and information to MCRLP within ten (10) days from the date hereof. MCRLP may
terminate this Agreement for any reason, by written notice given to Contributor,
prior to the expiration of the Inspection Period. In the event MCRLP terminates
this Agreement during the Inspection Period, this Agreement shall be null and
void and the parties hereto shall be relieved of all further obligations
hereunder except as otherwise provided herein. In the event MCRLP does not
terminate this Agreement by the end of the Inspection Period, then MCRLP shall
be deemed to have elected not to terminate this Agreement.
3.2 During the Inspection Period, MCRLP, its agents and contractors
shall have unlimited access to the Property and other information pertaining
thereto in the possession or within the control of Contributor, during normal
business hours, for the purpose of performing such studies, tests, borings,
investigations and inspections for the purposes described in Section 3.1 above.
Such right of inspection and the exercise of such right shall not constitute a
waiver by MCRLP of the breach of any representation or warranty of Contributor
which might, or should, have been disclosed by such inspection. Contributor
shall cooperate with MCRLP in facilitating its due diligence inquiry and shall
obtain, and use commercially reasonable efforts to obtain, any consents that may
be necessary in order for MCRLP to perform the same.
3.3 To assist MCRLP in its due diligence investigation of the
Property, Contributor shall deliver to MCRLP, by the execution and delivery of
this Agreement, true and correct copies of all existing Phase I environmental
studies (the "Phase I Reports") in the possession or control of Contributor with
respect to the Real Property, which Phase I Reports are set forth on Schedule
3.3 annexed hereto. In the event that MCRLP determines that it requires any new
Phase I Reports or updates thereof, the cost of such reports or updates shall be
borne by MCRLP. If MCRLP reasonably requires that further environmental
investigations be undertaken beyond any new Phase I or updated Phase I Report,
all engineering costs and expenses relating to said further environmental
investigations shall be borne by Mack-Cali.
3.4 Intentionally Deleted.
3.5 During the Inspection Period, Mack-Cali and MCRLP shall provide
to Contributor and its agents and advisors reasonable access to Mack-Cali's and
MCRLP's books and records, and Mack-Cali and MCRLP shall provide Contributor
such other reasonable information including, without limitation, all Securities
and Exchange Commission filings of MCRLP and Mack- Cali and federal, state, and
local income, excise, franchise, and all other tax filings, in order to permit
Contributor, at its sole cost and expense, to perform reasonable due diligence
on such parties. Nothing arising from Contributor's inspection or due diligence
as permitted by this Section shall give rise to a right of Contributor to
terminate this Agreement.
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3.6 Mack-Cali shall have the right, without the obligation, to
terminate this Agreement if (i) at any time prior to the Closing Date, Mack-Cali
determines in its sole discretion, that any of the Property is subject to
materially adverse environmental conditions, including, without limitation, any
environmental condition that has a material adverse affect on the property value
of any Real Property, on the current use of any Real Property, on groundwater
at, on, under, about or emanating from any Real Property or on the ability of
Mack-Cali or MCRLP to finance any Real Property; or (ii) Contributor is unable
to obtain the approval of any third-party partner of the Contributors to the
terms of this Agreement; or (iii) Mack-Cali determines that certain of the
indebtedness encumbering the Property cannot be satisfactorily satisfied or
restructured.
4. TITLE; MATTERS TO WHICH THIS SALE IS SUBJECT.
4.1 As of the Closing Date, title to the Property shall be 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 the same are not yet due and payable,
but subject to adjustment as provided herein;
(b) the rights of those parties occupying space at any of the
Improvements (collectively, "Tenants") as tenants only;
(c) those restrictions, covenants, agreements, easements,
matters and things affecting title to the Real Property as of the date hereof
and more particularly described in Schedule 4.1(c) annexed hereto and by this
reference made a part hereof and such other easements, covenants and
restrictions which are entered into with the consent of MCRLP after the date
hereof, such consent not to be unreasonably withheld, delayed or conditioned;
(d) any and all laws, statutes, ordinances, codes, rules,
regulations, requirements, or executive mandates affecting the Real Property
including, without limitation, those related to zoning and land use, as of the
date hereof;
(e) the state of facts shown on the surveys described on
Schedule 4.1(e) for each of the individual properties comprising the Real
Property and the Earnout Properties;
(f) the Service Contracts;
(g) any utility company rights, easements and franchises to
maintain poles, lines, wires, cables, pipes, boxes and other fixtures and
facilities in, over, under or upon the Real Property, provided the same do not
impair, in other than a de minimis manner, the present use of the Real Property;
(h) such matters as the Title Company (as hereinafter defined)
shall be willing, without special premium, to omit as exceptions to coverage;
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(i) the lien of the Mortgages (but on the terms and conditions
of this Agreement).
4.2 Prior to the date hereof, Contributor shall have directed Land
Title Guarantee Company (the "Title Company"), as agent for Chicago Title
Insurance Company, to prepare a title insurance search and commitment for
owner's title insurance policy for the Real Property (the "Title Commitment").
MCRLP shall cause the Title Company to promptly deliver a copy of the same to
Contributor and its counsel. If any defects, objections or exceptions in the
title to the Real Property appear in the Title Commitment (other than the
Permitted Encumbrances) which MCRLP is not required to accept under the terms of
this Agreement, Contributor may, at its election, undertake to eliminate such
unacceptable defects, objections or exceptions, it being agreed that except as
provided below, Contributor shall have no obligation to incur any expense in
connection with curing such defects, objections or exceptions, other than (i)
judgments against Contributor; (ii) mortgages or other liens which can be
satisfied by payment of a liquidated amount, other than the Mortgages; and (iii)
defects, objections or exceptions which can be removed by payments not to exceed
$100,000.00 per Building in the aggregate. Contributor, 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, 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, MCRLP shall elect either (i) to
terminate this Agreement by notice given to Contributor, in which event the
provisions of Section 23.2(a) shall apply, or (ii) to accept title subject to
such unacceptable defects, objections or exceptions and receive no credit
against or reduction of the consideration to be given hereunder for the
Property. Contributor agrees and covenants that it shall not voluntarily place
any encumbrances or restrictions on title to the Real Property from and after
the date of the first issuance of the Title Commitment for said Property, except
for the right to reserve easements for utilities and ingress and egress
encumbering the Real Property (post-closing) for the benefit of adjacent
properties owned by Contributor (or any affiliate thereof) upon the written
consent of MCRLP, which consent shall not be unreasonably withheld or delayed;
and so long as the mortgagees of the Mortgages shall consent to the reservation
of the same. Mack-Cali and MCRLP covenant and agree that they shall consult with
Contributor prior to causing any other person or entity to request any
inspection of the Real Property by any governmental entity. Contributor
recognizes that Mack-Cali's and MCRLP's due diligence necessitates said
inspection. Mack-Cali and MCRLP agree that they shall conduct any due diligence
with such governmental entity with a view toward maintaining the confidentiality
of the transaction contemplated by this Agreement.
4.3 It shall be a condition to Closing that Contributor conveys, and
that the Title Company insures, title to the Real Property in the amount of the
Allocated Property Value thereof (at a standard rate for such insurance) in the
name of MCRLP or its designees, after delivery of the Deed (as hereinafter
defined) by a standard 1992 ALTA Owner's Policy, with ALTA endorsements, to the
extent that the premium for such endorsements is paid by MCRLP, for the Real
Property as required by MCRLP 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 (i)
the exception for taxes shall apply only to the current taxes not yet due and
payable; and (ii) to the extent that the premium for such endorsements is paid
by MCRLP, (a) any
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Permitted Encumbrances have not been violated, and that any future violation
thereof will not result in a forfeiture or reversion of title; and (b) MCRLP's
contemplated use of the Real Property will not violate the Permitted
Encumbrances. Contributor shall provide such affidavits and undertakings as the
Title Company insuring title to the Real Property may require and shall cure all
other defects and exceptions other than the Permitted Encumbrances and as
required pursuant to Section 4.2. The words "insurable title" and "insurable" as
used in this Agreement are hereby defined to mean title which is insurable at
standard rates (without special premium) by the Title Company without exception
other than the Permitted Encumbrances, and standard printed policy and survey
exceptions.
4.4 Contributor shall cause one or more surveyors acceptable to
MCRLP to deliver to MCRLP a survey or surveys of the Real Property acceptable to
MCRLP in all respects and in conformity with ALTA standards. MCRLP shall, at
MCRLP's sole cost and expense and with Contributor's cooperation and assistance,
cause the surveyor to update the survey no more than thirty (30) days prior to
the Closing Date and shall have the general survey exception removed from the
Title Policy and the survey affirmatively insured, to the extent that the
premium for such endorsement is paid by MCRLP, to MCRLP.
4.5 Any unpaid taxes, water charges, sewer rents and assessments,
together with the interest and penalties thereon to a date not less than seven
(7) business days following the Closing Date (in each case subject to any
applicable apportionment), and any mortgages or other liens created by
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, shall be paid
at the Closing by Contributor. Contributor shall deliver to MCRLP, 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.
4.6 If the Title Commitment discloses judgments, bankruptcies or
other returns against other persons or entities having names the same as or
similar to that of Contributor, Contributor shall, upon request, deliver to the
Title Company affidavits showing that such judgments, bankruptcies or other
returns are not against Contributor, or any of its affiliates. Upon request by
MCRLP, Contributor shall deliver any affidavits and documentary evidence as are
reasonably required by the Title Company to eliminate the standard exceptions on
the ALTA Owner's Policy.
5. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTOR.
5.1 In order to induce MCRLP and Mack-Cali to perform as required
hereunder, Contributor hereby warrants and represents to MCRLP and Mack-Cali the
following with respect to the Property:
(a) Contributor is a duly organized and validly existing
entity, organized and in good standing under the laws of the state of its
formation, as more particularly set forth in Exhibit A hereto, is duly
authorized to transact business in the State of Colorado, has all requisite
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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 partners, members, shareholders and/or
principals 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.
(b) Intentionally Deleted.
(c) 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.
(d) Annexed hereto as Schedule 5.1 (d) is a true, complete and
correct schedule of all of the Leases. The Leases are valid and bona fide
obligations of the landlord and Tenants thereunder and are in full force and
effect. To the best of Contributor's knowledge, no defaults exist thereunder and
no condition exists which, with the passage of time or the giving of notice or
both, will become a default; the Leases constitute all of the leases, tenancies
or occupancies affecting the Real Property on the date hereof; all Tenants have
commenced occupancy; there are no agreements (other than the Leases) which
confer upon any Tenant or any other person or entity any rights with respect to
the Property, nor is any Tenant entitled now or in the future to any concession,
rebate, offset, allowance or free rent for any period, nor has any such claim
been asserted by any Tenant.
(e) Annexed hereto as Schedule 5.1(e) (the "Rent Roll") is a
listing of the following, which is true, complete and correct in all respects
for each Building: (i) the name of each Tenant; (ii) the fixed rent actually
being collected; (iii) the expiration date or status of each Lease (including
all rights or options to renew); (iv) the Security Deposit, if any; (v) whether
there is any guaranty of a Tenant's obligations from a third party, and if so
the nature of said guaranty; (vi) any written notices given by any Tenant of an
intention to vacate space in the future; (vii) the base year(s) and base year
amounts for all items of rent or additional rent billed to each Tenant on that
basis; and (viii) any arrearages of any Tenant beyond thirty (30) days.
(f) To the knowledge of Contributor, Contributor has performed
all of the obligations and observed all of the covenants required of it as
landlord under the terms of the Leases. Except as set forth on Schedule 5.1(f)
annexed hereto, all work, alterations, improvements or installations required to
be made for or on behalf of all Tenants under the Leases have in all respects
been carried out, performed and complied with, and there is no agreement with
any Tenant for the performance of any work to be done in the future. To the
knowledge of Contributor, except as set forth on Schedule 5.1(f), no work has
been performed at any Building which would require an
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amendment to the certificate of occupancy for such Building for which an
amendment has not been obtained, and any and all work performed at the Real
Property to the date hereof and to the Closing Date has been and will be in
accordance with the rules, laws and regulations of all applicable authorities.
All bills and claims for labor performed and materials furnished to or for the
benefit of the Property arising prior to the Closing Date will be paid in full
by Contributor within customary time periods, not to exceed forty-five (45) days
from the receipt of an invoice by Contributor.
(g) There are no service contracts, union contracts,
employment agreements or other agreements affecting the Property or the
operation thereof, except the Service Contracts and other contracts and
agreements set forth on Schedule 5.1(g) annexed hereto. All of the Service
Contracts are and will on the Closing Date be unmodified and in full force and
effect without any material default or claim of material default by any of the
parties thereto. All sums presently due and payable by Contributor under the
Service Contracts have been fully paid and all sums which become due and payable
between the date hereof and the Closing Date shall be fully paid by Contributor
within customary time periods, not to exceed forty-five (45) days from the
receipt of an invoice by Contributor. All of the Service Contracts may be
terminated on not more than sixty (60) days notice without the payment of any
fee or penalty, and the representation contained in this sentence is not subject
to being modified by the limitations of Section 5.5. There are no employees of
Contributor, or an affiliate of Contributor, working at or in connection with
the Real Property pursuant to any of the Service Contracts, other contracts and
employment agreements, except as set forth on Schedule 5.1(g).
(h) Except as set forth on Schedule 5.1(h) annexed hereto,
there are no actions, suits, labor disputes, litigation or proceedings currently
pending or, to the knowledge of Contributor, threatened against Contributor
(with respect to the Property being sold) or all or any part of the Property,
the environmental condition thereof, or the operation thereof.
(i) Except as set forth on Schedule 5.1(i) annexed hereto,
Contributor has received no written notice and has no knowledge of (i) any
pending or contemplated annexation or condemnation proceedings, or private
purchase in lieu thereof, affecting or which may affect the Real Property or any
part thereof, (ii) any proposed or pending proceeding to change or redefine the
zoning classification of all or any part of the Real Property, (iii) any
proposed or pending special assessments affecting the Real Property or any
portion thereof, (iv) any penalties or interest due with respect to real estate
taxes assessed against the Real Property, or (v) any proposed changes in any
road or grades with respect to the roads providing a means of ingress and egress
to the Real Property. Contributor agrees to furnish MCRLP with a copy of any
such notice received within two (2) business days after receipt.
(j) Contributor has provided MCRLP with all reports in
Contributor's possession or under its control related to the physical condition
of the Real Property.
(k) Except as set forth on Schedule 5.1(k) annexed hereto,
Contributor has no knowledge of any notices, suits, or judgments relating to any
violations (including environmental) of any laws, ordinances or regulations
affecting the Real Property, or any violations or conditions that may give rise
thereto, and has no reason to believe that any agency, board, bureau,
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commission, department or body of any municipal, county, state or federal
governmental unit, or any subdivision thereof, having, asserting or acquiring
jurisdiction over all or any part of the Real Property or the management,
operation, use or improvement thereof (collectively, the "Governmental
Authorities" or "Governmental Authority" as the context requires) contemplates
the issuance thereof, and there are no outstanding orders, judgments,
injunctions, decrees or writ of any Governmental Authorities against or
involving Contributor or the Real Property. For purposes of this Agreement, the
term "Governmental Authority" shall also include the Internal Revenue Service
and any other federal, state, local or foreign taxing authority.
(l) There are no employees of Contributor or any affiliates of
Contributor working at or in connection with the Real Property except as set
forth on Schedule 5.1(l).
(m) Annexed hereto as Schedule 5.1(m) is a schedule of all
leasing commission obligations affecting the Property. The respective
obligations of Contributor and MCRLP with respect to said commissions are set
forth in Section 14.
(n) 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
Contributor's assets, suffered the attachment or other judicial seizure of all,
or substantially all, of 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.
(o) Except for the Mortgages and otherwise as set forth on
Schedule 5.1(o), the Personal Property is now owned and will on each of the
Closing Date be owned by Contributor free and clear of any conditional bills of
sale, chattel mortgages, security agreements or financing statements or other
security interests of any kind.
(p) To Contributor's knowledge, Contributor is not in default
under the Mortgages. True, correct and complete copies of the Loan Documents
have been delivered to MCRLP. The Loan Documents will not be amended or modified
except as required by Mack-Cali prior to the Closing Date.
(q) Intentionally Deleted.
(r) Intentionally Deleted.
(s) Contributor has no knowledge that any part of the Real
Property has been designated as wetlands or any other word of similar purport or
meaning under the Federal Water Pollution Control Act, 33 U.S.C. ss.1251 et
seq.; the Colorado Water Quality Control Act, Colo. Rev. Stat. Section 25-8-101
et seq; or any other applicable federal, state, county or municipal statute,
ordinance, rule, regulation, order or code.
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(t) To the best of Contributor's knowledge, there are no
aboveground or underground storage tanks or vessels at the Real Property,
regardless of whether or not such tanks or vessels are regulated tanks or
vessels, except as set forth on Schedule 5.1(t).
(u) Contributor has no knowledge of outstanding requirements
or recommendations by (i) any insurance company currently insuring the Property;
(ii) any board of fire underwriters or other body exercising similar functions;
or (iii) the holder of any mortgage encumbering any of the Property, which
require or recommend any repairs or work of a material nature to be done on the
Property.
(v) The financial statements, including the income and expense
statements and the balance sheets of Contributor and its affiliates, excluding
only those assets, liabilities and operations not contemplated to be contributed
pursuant to this Agreement, relating to Contributor's ownership and operation of
the Property and the related statement of income, partners' capital and cash
flows, including the footnotes thereto (the "Property Financials") as of and for
the years ending December 31, 1995, 1996 and 1997, fairly present the financial
position of Contributor relating to the Property as of such dates and the
results of operations and cash flows of Contributor relating to the ownership
and operation of the Property for such respective periods. The Property
Financials from January 1, 1998, through the most recent month ending prior to
the Closing Date, fairly present the financial position of the Property relating
to the ownership and operation of the Property as of such date (subject to the
normal year-end adjustments described in Schedule 5.1(v)) and with all interim
financial statements of the Property heretofore delivered to MCRLP on behalf of
Contributor.
(w) Except as set forth in Schedule 5.1(w), Contributor does
not maintain any 401(k) savings plans, pension plans, multi-employer plans (as
defined in Section 3(37) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), employee benefit plans (as defined in ERISA) or employee
welfare plans providing for benefits to Contributor's employees (each, a
"Contributor Plan"). From and after the date hereof, Contributor shall not adopt
a Contributor Plan. Mack-Cali shall have no liability to any current or former
employees of Contributor or any affiliate thereof, including, without
limitation, any liabilities which may arise as a result of the consummation of
the transactions contemplated by this Agreement, under any plans or programs
listed on Schedule 5.1(w), or arising under applicable federal or state law,
including, without limitation, under the Worker Adjustment and Retraining
Nonfiction Act (WARN) and Consolidated Omnibus Budget Reconciliation Act of 1985
(COBRA).
(x) Intentionally Deleted.
(y) Except as disclosed in the Phase I Reports or otherwise
set forth in Schedule 5.1(y):
(i) To the best of Contributor's knowledge, no
Governmental Authority has demanded in writing, addressed to Contributor or any
of its affiliates, counsel or agents, that any Contaminants (as defined herein)
be cleaned up or environmentally remediated at any Real Property, which has not
been cleaned up or environmentally remediated.
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(ii) To the best of Contributor's knowledge, no
Contaminants have been Discharged (as hereinafter defined) which would allow a
Governmental Authority to demand that a cleanup be undertaken.
(iii) To the best of Contributor's knowledge, no
ss.104(e) informational request, issued pursuant to CERCLA (as hereinafter
defined) with respect to the Real Property has been received by Contributor.
(iv) To the best of Contributor'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.
(v) To the best of Contributor's knowledge, there is no
asbestos or asbestos containing material requiring remediation under
Environmental Laws (as hereinafter defined) on the Real Property, except as set
forth on Schedule 5.1(y).
(vi) To the best of Contributor's knowledge, all
transformers and capacitors containing polychlorinated biphenyls ("PCBs") , and
all "PCB Items", as defined in 40 CFR, ss.761.3, located on or affecting the
Real Property, are identified in Schedule 5.1(y) and are in compliance with all
Environmental Laws.
(vii) To the best of Contributor's knowledge, Pacifica
has all material certificates, licenses and permits (the "Permits"), including
without limitation, environmental Permits, required to operate the Real
Property. To the best of Contributor'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, as the case may be, without
additional payment by MCRLP, and shall, upon closing, be transferred to MCRLP by
Contributor.
(viii) To the best of Contributor's knowledge, the Real
Property has not been used during the period of Contributor's ownership as solid
wastes disposal sites and facilities as defined in the Colorado Solid Wastes
Disposal Sites and Facilities Law, Colo. Rev. Stat. Section 30-20-100.5 et seq.
and the regulations promulgated thereunder.
(ix) To the best of Contributor's knowledge, there are
no engineering or institutional controls 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 Colo. Rev. Stat. Section 25-15-208 et seq. and
the regulations promulgated thereunder.
(x) Contributor has not transported any Contaminants
from the Real Property to another location in violation of Environmental Laws.
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(xi) To the best of Contributor's knowledge, there are
no federal or state liens, as referenced under CERCLA and the regulations
promulgated thereunder, or under any other applicable Environmental Law that
have attached to the Real Property.
(xii) Contributor has provided MCRLP with all
environmental site assessments, investigations, and documents and all other
Environmental Documents (as that term is defined below) in its possession or
under its control and shall continue to do so after execution of this Agreement
promptly upon its receipt.
(xiii) 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
Contributor 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.
(z) Contributor and its affiliated entities shall have timely
paid all Taxes (as defined herein) due and payable on or prior to the Closing
Date in connection with the ownership and/or operation of the Property (by them
or any predecessor entities) or their businesses for which
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MCRLP (or any of its direct or indirect partners) could be held directly or
indirectly liable or a claim could be made against the Property. Contributor and
its affiliated entities shall have timely filed all Tax Returns (as defined
herein) required to be filed on or prior to the Closing Date in connection with
the ownership and/or operation of the Property (by them or any predecessor
entities) or their businesses, and the non-timely filing (or non-filing) of
which could result in direct or indirect liability to MCRLP (or any of its
direct or indirect partners) or a claim against the Property. Each such Tax
Return is complete and accurate in all respects. Contributor and its affiliated
entities shall have timely paid or will timely pay, or shall have provided for
or will provide for a cash reserve for the payment of, all Taxes due and payable
on or after the Closing Date for all taxable periods (or portions thereof)
ending on or prior to the Closing Date (a "Pre-Closing Tax Period" or "Pre-
Closing Tax Periods"), and in connection with the ownership and/or operation of
the Property (by them or any predecessor entities) or their businesses for which
MCRLP (or any of its direct or indirect partners) could be held directly or
indirectly liable or a claim could be made against the Property. Contributor and
its affiliated entities shall timely file all Tax Returns which relate to all
Pre-Closing Tax Periods but which are required to be filed after the Closing
Date in connection with the ownership and/or operation of the Property (by them
or any predecessor entities) or their businesses, the non-timely filing (or
non-filing) of which could result in direct or indirect liability to MCRLP (or
any of its direct or indirect partners) or a claim against the Property. Each
such Tax Return will be complete and accurate in all respects. True and complete
copies of all Tax Returns filed by Contributor for taxable periods beginning on
or after January 1, 1994, and all written communications relating thereto, have
been, or will be upon request, delivered to Mack-Cali. Contributor has also
provided, or will also provide upon request, to Mack-Cali copies of: (i) any
letter ruling, determination letter or similar document issued to Contributor by
any Governmental Authority, and (ii) any closing or other agreement entered into
by Contributor with any Government Authority. Except as set forth on Schedule
5.1(z), there are no ongoing Audits or Audits pending or, to the knowledge of
Contributor and each of its affiliated entities, threatened with respect to the
ownership and/or operation of the Property (by Contributor, its affiliated
entities or any of their predecessor entities) or the businesses of Contributor
or any of its affiliated entities, which could result in direct or indirect
liability to MCRLP (or any of its direct or indirect partners) or a claim
against the Property. There are no agreements or waivers extending the statutory
period of limitations with respect to any such Tax Returns or for the assessment
or collection of any such Taxes. No claim has ever been made by a Governmental
Authority in a jurisdiction where Contributor does not file Tax Returns that it
is or may be subject to taxation by that jurisdiction.
(aa) Annexed hereto as Schedule 5.1(aa) is a listing, for
federal income tax purposes, of the following information, which is true,
complete and correct in all aspects for each item of Property: (i) its adjusted
basis as of the first day of Contributor's taxable year which includes the
Closing Date; (ii) the date placed in service; (iii) the depreciation method;
and (iv) the remaining useful life.
(bb) Subject to the provisions of Section 5.5, no
representation or warranty made by Contributor contained in 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
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or necessary in order to fully and fairly provide the information required to be
provided in any such document, certificate, Schedule or Exhibit.
(cc) As used throughout this Agreement, the phrases "to
Contributor's knowledge," "to the knowledge of Contributor," "to the best of
Contributor's knowledge" or any similar derivation thereof, shall mean the
actual (not constructive) knowledge of Terrence Claassen, David Goldberg,
Chetter Latcham, Steve Leonard, Rich Majors, Adel Nassif, Chuck Peck and Della
Wegman, without having undertaken any independent investigation of facts or
legal issues, without any duty to do so, and without imputing to the
aforementioned persons the knowledge of any employee, agent, representative or
affiliate of Contributor or of any other person or entity.
5.2 Intentionally Deleted.
5.3 All representations and warranties made hereunder by Contributor
and in this Agreement shall survive the Closing Date for a period of one (1)
year, except that the representations and warranties set forth in clauses (a),
(c), (w) and (z) of Section 5.1 shall survive such Closing Date for the
applicable period of the statute of limitations (unless otherwise specified
herein), and shall not be merged in the delivery of the Deed. Notwithstanding
the foregoing, to the extent that a Tenant shall certify in its Estoppel
Certificate (as defined below) as to any of the matters which are contained in
the representations and warranties made by Contributor in Section 5.1(f) of this
Agreement, then Contributor's representations and warranties as to such matters
shall be of no force or effect to the extent of any conflict. Pacifica Holding
Company, a Colorado corporation; and Pacifica Holding Company, a Colorado
limited liability company (collectively, "Guarantor"); and Contributor, jointly
and severally, shall, pursuant to a separate indemnity agreement (the "Indemnity
Agreement") in the form attached hereto as Schedule 5.3, indemnify and defend
Mack- Cali and MCRLP, and to hold Mack-Cali and MCRLP 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 Mack-Cali or MCRLP by reason
of or resulting from any breach, inaccuracy, incompleteness or non- fulfillment
of the representations, warranties, covenants and agreements of Contributor
contained in this Agreement to the full extent that Contributor would otherwise
have been liable therefor under the provisions of this Agreement. The foregoing
indemnity shall be deemed to be material to MCRLP and Mack-Cali's obligation to
perform hereunder and shall survive the Closing. Notwithstanding the foregoing,
the members of Contributor shall have no liability for any loss resulting from
any breach of the foregoing representations and warranties. In addition, except
as set forth in Section 28, MCRLP shall not have a right to bring a claim
against Contributor by virtue of any of the representations or warranties being
false or misleading unless and until the aggregate damages to MCRLP and/or
Mack-Cali are reasonably expected to exceed $100,000.00, but thereafter MCRLP
and/or Mack-Cali may bring a claim against Contributor for the entire amount of
its aggregate damages.
5.4 Contributor acknowledges that it is not in a significantly
disparate bargaining position with respect to MCRLP or Mack-Cali in connection
with the transaction contemplated by this Agreement and that Contributor was
represented by legal counsel in connection with this transaction.
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5.5 Mack-Cali and MCRLP each acknowledges that it has had, or will
have had, as of the Closing, sufficient time to review all materials and
information set forth in Schedule 5.5, and sufficient time and access to review
and investigate the Property. Notwithstanding any other provision of this
Agreement, except as set forth in Subsections 5.1(d), (e) and (f), as they
relate to the Leases, the Estoppels and the Rent Rolls, the representations and
warranties of Contributor as set forth herein or in Contributor's Closing
Certificate are hereby modified to be made true to the extent that, as of the
date hereof with respect to the representations and warranties made herein, and
as of the Closing Date with respect to the representations and warranties made
by Contributor as of the Closing Date, (i) information contained in the records
made available as set forth in Schedule 5.5 no longer makes the subject
representation or warranty not true, whether or not either Mack-Cali or MCRLP
has actual knowledge of such information, or (ii) either Mack-Cali or MCRLP has
knowledge that the subject representation or warranty is untrue, or (iii)
Contributor has delivered or made available to any of the individuals described
in Section 6.1(l) other written information disclosing that the subject
representation or warranty is not true, whether or not either Mack-Cali or MCRLP
has actual knowledge of such information.
6. REPRESENTATIONS AND WARRANTIES OF MACK-CALI AND MCRLP.
6.1 In order to induce Contributor to perform as required hereunder,
Mack-Cali and MCRLP hereby jointly and severally warrant and represent the
following:
(a) (i) MCRLP 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 MCRLP
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) Mack-Cali is a duly organized and validly existing
corporation organized and in good standing under the laws of the State of
Maryland, has all requisite power and authority to execute and deliver this
Agreement and all other documents and instruments to be executed and delivered
by it hereunder, and to perform its obligations hereunder and under such other
documents and instruments in order to permit MCRLP to acquire the Property in
accordance with the terms and conditions hereof. All necessary actions of the
board of directors of Mack-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 Mack-Cali and MCRLP hereunder, when duly
executed and delivered, will be the legal, valid and binding obligation of each
of Mack-Cali and MCRLP, enforceable in accordance with the terms of this
Agreement. The performance by each of Mack-Cali and MCRLP 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
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in a breach of, or default under, any provision of any of the organizational
documents of each of Mack-Cali and MCRLP 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
Mack-Cali and MCRLP 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 Contributor Unit Holders are duly authorized and, when issued by MCRLP, will
be fully paid and non-assessable, free and clear of any mortgage, pledge, lien,
encumbrance, security interest, claim or rights of interest of any third party
of any nature whatsoever. The shares of Common Stock to be issued by Mack-Cali
upon redemption of the Contributor Units will be reserved for future listing
with the New York Stock Exchange prior to the date upon which any of the same
will be 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) MCRLP has furnished to Contributor a true and complete
copy of the OP Agreement, as amended to date.
(e) Mack-Cali has caused to be delivered to Contributor copies
of the OP Agreement. The SEC Documents were, and those additional documents
filed between the date hereof and the Closing will be, prepared and filed in
compliance with the rules and regulations promulgated by the SEC, and do not and
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein in order to make the statements
contained therein, in light of the circumstances under which they were made or
will be made, not misleading.
(f) The consolidated financial statements included in the SEC
Documents have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the period involved (except as
may be indicated in the notes thereto or, in the case of the unaudited
statements, as permitted by Form 10-Q) and present fairly (subject, in the case
of the unaudited statements, to normal, recurring year-end audit adjustments)
the consolidated financial position of Mack-Cali and its Subsidiaries at the
dates thereof and the consolidated results of operations and cash flows for the
periods then ended. For purposes of this Agreement, "Subsidiaries" shall mean
(i) any entity of which Mack-Cali (or other specified entity) shall own directly
or indirectly through a subsidiary, a nominee arrangement or otherwise (x) at
least a majority of the outstanding capital stock (or other shares of beneficial
interest), or (y) at least a majority of the partnership, joint venture or
similar interests; and (ii) any entity in which Mack-Cali (or other specified
entity) is a general partner or joint partner, including without limitation
MCRLP. "Subsidiaries" shall specifically exclude Mack-Cali Services, Inc. and
The Grove Street Urban Renewal Corp., which are the only non-qualified REIT
subsidiaries of Mack-Cali as of the date hereof.
(g) No action, suit, claim, investigation or proceeding,
whether legal or administrative or in mediation or arbitration, is pending or,
to the best of each of Mack-Cali's and MCRLP's knowledge, threatened, at law or
in equity, against either of Mack-Cali or MCRLP before or by any court or
federal, state, municipal or other governmental department, commission, board,
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bureau, agency or instrumentality which would prevent either of Mack-Cali or
MCRLP from performing its respective obligations pursuant to this Agreement.
(h) The execution and delivery of this Agreement and the
performance by each of Mack-Cali and MCRLP 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 Mack-Cali or MCRLP, including
without limitation, the United States of America, the States of New York and New
Jersey or any political subdivision of any of the foregoing, or any decision or
ruling of any arbitrator to which Mack-Cali or MCRLP is a party or by which
Mack-Cali or MCRLP is bound or affected.
(i) (1) Mack-Cali (A) 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 ("REIT") within the meaning of Section 856 of the Internal
Revenue Code of 1986, as amended (the "Code"), (B) has complied with all
applicable provisions of the Code which would have enabled it to qualify as a
REIT for 1995 and 1996, (C) has operated, and intends to continue to operate, in
such a manner so as to enable it to qualify as a REIT for 1998 and subsequent
years, and (D) has not taken or omitted to take any action which would
reasonably be expected to cause its disqualification as a REIT, and no challenge
to its REIT status is pending or, to Mack-Cali's knowledge, threatened.
(2) Mack-Cali has timely filed with the appropriate
Governmental Authority all Tax Returns required to be filed by it or has timely
requested extensions and any such request has been granted and has not expired.
Each such Tax Return is true and correct in all material respects. All Taxes
shown as owed by Mack-Cali or any of its Subsidiaries on any Tax Return have
been paid or accrued, except for Taxes being contested in good faith and for
which adequate reserves have been established. None of Mack-Cali or any of its
Subsidiaries has executed or filed with the Internal Revenue Service or any
other taxing authority any agreement now in effect extending the period for
assessment or collection of any Tax.
(3) To its knowledge, as of the date hereof, Mack-Cali
is a "domestically-controlled" REIT within the meaning of Section 897(h)(4)(B)
of the Code.
(j) All of Mack-Cali's real property and other material assets
are owned by Mack-Cali indirectly through its ownership of MCRLP and MCRLP's
Subsidiaries.
(k) Neither Mack-Cali nor MCRLP 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 Mack-Cali's or
MCRLP's creditors, suffered the appointment of a receiver to take possession of
all, or substantially all, of Mack-Cali's or MCRLP's assets, suffered the
attachment or other judicial seizure of all, or substantially all, of
Mack-Cali's or MCRLP'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) As used throughout this Agreement, the phrases "to
Mack-Cali's knowledge," "to the knowledge of Mack-Cali", "to the best of
Mack-Cali's knowledge", to
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MCRLP's knowledge," "to the knowledge of MCRLP", "to the best of MCRLP's
knowledge" or any similar derivations thereof, shall mean the actual (not
constructive) knowledge of Tim Jones, John DeBari, Daniel Wagner, Andrew
Greenspan, Roger W. Thomas and Terry Noyes, without having undertaken any
independent investigation of facts or legal issues, without having any duty to
do so, and without imputing to the aforementioned persons the knowledge of any
employee, agent, representative or affiliate of Mack-Cali, MCRLP or of any other
person or entity.
6.2 Each of Mack-Cali and MCRLP 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
Mack-Cali and MCRLP were represented by legal counsel in connection with this
transaction.
6.3 All representations and warranties made by Mack-Cali and MCRLP
in this Agreement shall survive the Closing Date for a period of eighteen (18)
months, except that the representations and warranties set forth in clauses (a)
and (b) of Section 6.1 shall survive such Closing Date for the applicable period
of the statute of limitations (unless otherwise specified herein), and shall not
be merged in the delivery of the Deed. Mack-Cali and MCRLP agree to indemnify
and defend Contributor, and to hold Contributor 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 Contributor by reason of or
resulting from any breach, inaccuracy, incompleteness or non-fulfillment of the
representations, warranties, covenants and agreements of Mack-Cali and MCRLP
contained in this Agreement. Notwithstanding the foregoing, the partners of
MCRLP and the shareholders of Mack-Cali shall have no liability for any loss
resulting from any breach of the foregoing representations and warranties. In
addition, Contributor shall not have a right to bring a claim against Mack-Cali
or MCRLP by virtue of any of the representations or warranties being false or
misleading unless and until the aggregate damages to Contributor is reasonably
expected to exceed $100,000.00, but thereafter Contributor may bring a claim
against Mack-Cali or MCRLP for the entire amount of its aggregate damages.
7. INTERIM OPERATING COVENANTS OF CONTRIBUTOR.
7.1 Contributor covenants and agrees that between the date hereof
and the Closing Date (the "Interim Period"), it shall perform or observe the
following with respect to the Real Property:
(a) Contributor will complete any capital expenditure program
currently in process or anticipated to be completed. 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 Property, or renew or modify any Lease, without
MCRLP's prior written consent; provided, however that Contributor shall be
permitted to enter into new leases, renewals or modifications upon prior notice
to, but without the prior written consent of MCRLP, so long as such
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lease, renewal or modification is on market terms and conditions with bona fide
third parties and is the type of transaction which Contributor currently enters
into in the ordinary course of its business.
(c) Contributor shall comply with and/or remedy all violations
of statutes, ordinances, rules, regulations, orders, codes, directives or
requirements affecting the Real Property, whether or not such violations are now
noted in the records of or have been issued by any Governmental Authorities
prior to the Closing, and the Real Property shall be conveyed free of any such
violations, including, without limitation, violations of Environmental Laws.
(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 MCRLP, unless such agreement is on market terms and
conditions with bona fide third parties and is the type of agreement which
Contributor currently enters into in the ordinary course of its business, in
which case no consent of MCRLP will be required; or
(ii) Accept the surrender of any Service Contract or
Lease, or grant any concession, rebate, allowance or free rent, except in its
ordinary course of business on market terms, with bona fide third parties and
upon prior written notice to MCRLP.
(iii) Intentionally Deleted.
(e) Contributor shall not, between the date hereof and the
Closing Date, apply any Security Deposits with respect to any Tenant in
occupancy on the Closing Date, except in its ordinary course of business.
Contributor shall provide MCRLP with an updated schedule of Security Deposits at
the Closing or the Earnout Closing.
(f) Between the date hereof and the Closing Date, Contributor
will not renew, extend or modify any of the Service Contracts without the prior
written consent of MCRLP unless such is done by Contributor in the ordinary
course of its business and such Service Contracts contain a right to terminate
on thirty (30) days' notice with no material cost to exercise such right, in
which case no consent of MCRLP will be required.
(g) Contributor shall not remove or permit the removal of any
Personal Property located in or on the Property, except as may be required for
repair and replacement. All replacements shall be free and clear of liens and
encumbrances except to the extent the original Personal Property was so
encumbered and shall be of quality at least equal to the replaced items and
shall be deemed included in this sale, without cost or expense to MCRLP, other
than expressly provided herein.
(h) Contributor shall, upon request of MCRLP at any time after
the date hereof, assist MCRLP in its preparation of audited financial
statements, statements of income and expense, and such other documentation as
MCRLP may reasonably request, covering the period of Contributor's ownership of
the Real Property.
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(i) Between the date hereof and the Closing Date, Contributor
will make all required payments under any mortgage affecting the Real Property
within any applicable grace period, but without reimbursement by MCRLP therefor.
Contributor shall also comply with all other material terms covenants and
conditions of any mortgage on the Real Property.
(j) Contributor shall not cause or permit the Real Property,
or any interest therein, to be alienated, mortgaged, licensed, encumbered or
otherwise be transferred.
(k) Contributor agrees to maintain and keep in full force and
effect the hazard, liability and casualty insurance policies it is currently
maintaining, which policies Contributor represents are sufficient 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.
(l) Contributor shall permit MCRLP 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
MCRLP hereunder shall be maintained for MCRLP's inspection at Contributor's
address as set forth in Exhibit A hereto.
(m) Contributor shall:
(i) promptly notify MCRLP of, and promptly deliver to
MCRLP, 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;
(ii) contemporaneously with the signing and delivery of
this Agreement, and subsequently promptly upon receipt by Contributor or its
representatives, deliver to MCRLP a certified true and complete copy of all
Environmental Documents; and
(iii) timely provide MCRLP 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 MCRLP
informed of all substantive negotiations and discussions with respect to the
foregoing matters on an on-going basis.
7.2 Prior to the Closing, Contributor shall deliver to MCRLP
reviewed Property Financials as set forth in Section 5.1(v). Within thirty (30)
days after the Closing Date, Contributor shall deliver to MCRLP Property
Financials, as set forth in Section 5.1(v), through the Closing Date. The
provisions of this Section 7.2 shall survive the Closing Date.
7.3 Intentionally Deleted.
7.4 Intentionally Deleted.
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7.5 Contributor and its affiliated entities will timely pay all
Taxes due and payable during the Interim Period in connection with the ownership
and/or operation of the Property (by them or any predecessor entities) or their
businesses, for which MCRLP (or any of its direct or indirect partners) could be
held directly or indirectly liable or a claim could be made against the
Property. Contributor and its affiliated entities will timely file all Tax
Returns required to be filed during the Interim Period in connection with the
ownership and/or operation of the Property (by them or any predecessor entities)
or their businesses, the non-timely filing (or non-filing) of which could result
in direct or indirect liability to MCRLP (or any of its direct or indirect
partners) or a claim against the Property. Each such Tax Return will be complete
and accurate in all respects and will be filed on a basis consistent with past
practice. A copy of all such Tax Returns shall be delivered to Mack-Cali at
least three (3) days prior to such Tax Returns being filed. The obligations set
forth in this Section 7.5 shall survive the expiration or earlier termination of
this Agreement and/or shall survive the Closing Date for the applicable period
of the statute of limitations.
8. INTENTIONALLY DELETED.
9. ESTOPPEL CERTIFICATES.
9.1 Contributor agrees to deliver to each Tenant, no later than the
date hereof, an estoppel certificate in the form annexed hereto as Exhibit 9.1
for Tenant's execution, completed to reflect Tenant's particular Lease status.
Contributor agrees to use commercially reasonable efforts to obtain from all
Tenants the estoppel certificates in such form; provided, however, that if any
Tenant shall refuse to execute an estoppel letter in such form, Contributor
shall nevertheless use commercially reasonable efforts to obtain estoppel
certificates in the form in which each Tenant is obligated to deliver the same
as provided in its Lease. Contributor agrees to deliver to MCRLP copies of all
estoppel letters received by Tenants, in the form received by Contributor. The
estoppel certificates required to be obtained pursuant to this Section 9.1 are
collectively referred to as the "Estoppel Certificates".
9.2 As a condition to the Closing, Contributor shall deliver (a) an
Estoppel Certificate from all Tenants which lease 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 at least seventy-five (75%)
percent of the square footage of the Real Property including the Tenants set
forth in Clause 9.2(a) above.
9.3 For an Estoppel Certificate to be deemed delivered for purposes
of this Agreement, it must certify that 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.
10. CLOSINGS.
10.1 (a) Closing. The consummation of the transactions contemplated
hereunder with respect to the Property (the "Closing") shall take place at the
offices of Brownstein, Hyatt, Farber & Strickland, P.C., 410 Seventeenth Street,
22nd Floor, Denver, Colorado, 80202-4437,
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on or about March 25, 1998 (the "Closing Date"). Upon notice to Contributor,
MCRLP may elect to accelerate the Closing Date to a date not less than five (5)
days after the date of MCRLP's notice.
(b) Intentionally Deleted.
(c) Intentionally Deleted.
(d) Intentionally Deleted.
10.2 On the Closing Date, except as otherwise set forth in
Subsections 10.2(z) and 10.2(aa), Contributor, at its sole cost and expense,
will deliver or cause to be delivered to MCRLP the following documents, fully
executed by all parties thereto other than MCRLP or parties claiming by, through
or under MCRLP:
(a) Special Warranty Deeds (the "Deeds") with covenants in
proper statutory form for recording so as to convey to MCRLP good and marketable
title to the Land being conveyed, free and clear of all liens and encumbrances,
except the Permitted Encumbrances. The delivery of the Deeds shall also be
deemed to constitute a transfer of the Personal Property associated with the
Land conveyed by the Deeds; the delivery of all of the Deeds shall be deemed to
constitute a transfer of the balance of the Personal Property to MCRLP.
(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 the same.
(c) All other original documents or instruments referred to
herein, including without limitation the Service Contracts, Licenses and Permits
and Books and Records, and certified copies of the same where Contributor, using
its best efforts, is unable to deliver originals of the same.
(d) A letter to Tenants advising the Tenants of the sale
hereunder and directing that rent and other payments thereafter be sent to MCRLP
or its designee, as MCRLP shall so direct.
(e) Intentionally Deleted.
(f) Duly executed and acknowledged omnibus assignment in the
form of Exhibit 10.2(f) annexed hereto ("Omnibus Assignment").
(g) Duly executed Asset Purchase Agreement in the form of
Exhibit 10.2(g) annexed hereto.
(h) An affidavit, and such other document or instruments
required by the Title Company, executed by Contributor certifying (i) against
any work done or supplies delivered
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to the Real Property which might be grounds for a materialman's or mechanic's
lien under or pursuant to Colorado Lien Law, in form sufficient to enable the
Title Company to affirmatively insure MCRLP against any such lien, (ii) that the
signatures on the Deeds are sufficient to bind Contributor and convey the
Property to MCRLP, and (iii) the Rent Roll.
(i) Affidavits and other instruments, including but not
limited to all organizational documents of Contributor and Contributor's general
partners, as applicable, including operating agreements, filed copies of limited
liability certificates, articles of organization, and good standing
certificates, reasonably requested by MCRLP 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 the 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 MCRLP to realize upon the same.
(l) A certificate indicating that the representations and
warranties of Contributor made in this Agreement are true and correct as of the
Closing Date or if there have been any changes, a description thereof.
(m) A Rent Roll for each Real Property, current as of the
Closing Date, certified by Contributor as being true and correct in all material
respects.
(n) All proper instruments as shall be reasonably required for
the conveyance to MCRLP 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 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 and Improvements.
(o) In order to avoid the imposition of the withholding tax
payment pursuant to Section 1445 of the Code, a certificate which is in a form
acceptable to Mack-Cali and which is signed by the appropriate 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) All such 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 MCRLP, including but not limited to, Internal Revenue Service forms and the
declaration required to be filed pursuant to Title 39, Article 14 of the
Colorado Revised Statutes.
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(q) A statement setting forth all adjustments and prorations
shown thereon.
(r) Tradenames Assignment Agreement substantially in the form
of Exhibit 10.2(r) attached hereto.
(s) Estoppel certificate addressed to MCRLP from the
mortgagees of the Mortgages in form and substance reasonably acceptable to
MCRLP.
(t) An opinion of counsel from Brownstein, Hyatt, Farber &
Strickland, P.C., substantially in the form of Exhibit 10.2(t) regarding the due
execution, delivery and enforceability of this Agreement and the foregoing
documents.
(u) Intentionally Deleted.
(v) Duly executed and acknowledged Indemnity Agreement from
Guarantor and Contributor as set forth in Section 5.3.
(w) Intentionally Deleted.
(x) Intentionally Deleted.
(y) Such other documents as may be reasonably required by
MCRLP or as may be appropriate to effectuate the consummation of the
transactions contemplated by this Agreement.
(z) At least fifteen (15) days prior to the Closing Date, a
schedule setting forth, with respect to each item of the Property for which
Contributor Units will be received as part of the consideration: (i) those
Contributors of such item of the Property that are allocated Contributor Units
and the amount of Contributor Units so allocated to any such Contributor; (ii)
the gross fair market value of such item of the Property for purposes of
determining the gain or loss that will be recognized for federal income tax
purposes as a result of the contribution; (iii) the adjusted basis of such item
of the Property immediately prior to the contribution; (iv) the amount of cash
and Contributor Units allocated to the item of the Property; and (v) the amount
of any liability relating to such item of the Property that MCRLP will either
assume or to which such item will be subject and which does not constitute a
"qualified liability" within the meaning of Treasury Regulations Section
1.707-5(a)(6).
(aa) At least fifteen (15) days prior to the Closing Date, a
schedule setting forth: (i) any Contributor named for purposes of Section
10.2(z)(i) which is to receive less than the full amount of Contributor Units
indicated for purposes of Section 10.2(z)(i); and (ii) the names of those
persons who are to receive Contributor Units that each such Contributor would
otherwise be entitled to receive and the amount of units that any such persons
are to receive. At least fifteen (15) days prior to the Closing Date, each
Contributor to which this Section 10.2(aa) is relevant shall issue "direction
letters" to MCRLP (in the form acceptable to MCRLP), to the effect that each
such
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Contributor authorizes the issuance by MCRLP of Contributor Units directly to
such persons (and in such amounts) which are set forth for purposes of Section
10.2(aa)(ii).
(bb) A letter from each applicable municipal department or
agency having jurisdiction that the Property is in compliance with the laws,
codes, rules, regulations and ordinances regarding (i) zoning, (ii) building,
(iii) health and (iv) fire, life and safety.
(cc) A computer diskette containing any closing or other
documents executed in connection with this transaction and prepared by
Contributor or its counsel, in WordPerfect or Microsoft Word format.
(dd) All original organizational documents relating to the
Contributor, and all statements of accounts, books and records and insurance
policies.
(ee) a certificate executed by each Contributor Unit Holder
and each Contributor receiving Contributor Units, substantially in the form of
Exhibit 10.2(ee).
10.3 On the Closing Date, Mack-Cali and MCRLP, at their sole cost
and expense, will deliver or cause to be delivered to Contributor the following
documents, fully executed by all parties thereto other than Contributor or
parties claiming by, through or under Contributor:
(a) The Cash Payment, net of adjustments and prorations.
(b) The Permanent Certificates representing, in the aggregate,
the Contributor Units.
(c) Intentionally Deleted.
(d) Duly executed and acknowledged Omnibus Assignment in the
form of Exhibit 10.2(f) annexed hereto.
(e) A certificate indicating that the representations and
warranties of Mack-Cali and MCRLP made in this Agreement are true and correct as
of the Closing Date or if there have been any changes, a description thereof.
(f) Affidavits and other instruments, including but not
limited to all organizational documents of Mack-Cali and MCRLP including limited
partnership agreements, filed copies of limited partnership certificates,
articles of organization, and good standing certificates, reasonably requested
by Contributor evidencing the power and authority of Mack-Cali and MCRLP to
enter into this Agreement and any documents to be delivered hereunder, and the
enforceability of the same.
(g) A Registration Rights Agreement substantially in the form
of Exhibit 10.3(g).
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(h) Amendment to OP Agreement substantially in the form of
Exhibit 10.3(h) reflecting admission of the Contributor Unit Holders as limited
partners.
(i) Tradenames Assignment Agreement substantially in the form
of Exhibit 10.2(r).
(j) Intentionally Deleted.
(k) Such other documents as may be reasonably required or
appropriate to effectuate the consummation of the transactions contemplated by
this Agreement.
10.4 Contributor shall pay for the premium charges and costs for
title insurance policies (but not any endorsements to such policies required by
Mack-Cali); all survey costs; all costs incurred to repay or satisfy any and all
liens; all administrative and legal costs associated with the assumption by
MCRLP of the mortgages to which this transaction is subject (other than the fees
or charges payable in connection with the mortgages being paid-off by Mack-Cali
as herein provided); all leasing commissions due to Tenants in connection with
the initial terms of their respective Leases; all costs of tenant improvement
concessions due to Tenants in connection with the initial terms of their
respective Leases; and all customary prorations and apportionments. Mack- Cali
shall pay for the costs of all customary documentary and recording fees;
(including, without limitation, the "documentary fee" imposed by Article 13 of
the Colorado Revised Statutes); the cost of any endorsements to its title
insurance policies; all due diligence investigations costs (including, without
limitation, the cost of all Phase I Reports for the Property, which
environmental assessment reports shall be dated no more than thirty (30) days
prior to the Closing Date); any fees or charges payable in connection with the
mortgages being paid-off by Mack-Cali as herein provided and all customary
prorations and apportionments. Each party shall be responsible for its own
attorney's fees. The provisions of this Section 10.4 shall survive the Closing.
10.5 The Closing shall be consummated without compliance with bulk
sales laws. If by reason of any applicable bulk sales law, any claims are
asserted by creditors of 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 MCRLP (and its
respective directors, officers, employees, affiliates, successors and assigns)
from and against all losses or liabilities, if any, based upon, arising out of
or otherwise in respect of the failure to comply with such bulk sales laws.
10.6 Mack-Cali and MCRLP acknowledge and agree that, except as set
forth in this Agreement, MCRLP is acquiring the Property in its "as is"
condition "subject to all faults" and specifically and expressly without any
warranties, representations or guarantees, either express or implied, of any
kind, nature, or type whatsoever from or on behalf of Contributor. Mack-Cali and
MCRLP acknowledge that, except as set forth in this Agreement, and except for
documents, reports and information related to the environmental integrity of the
Real Property, neither Mack-Cali nor MCRLP has relied and is not relying on any
information, document, reports, sales brochure or other literature, maps or
sketches, financial information, projections, pro formas or statements, that may
have been given by or made by or on behalf of Contributor with respect to the
Property. MCRLP
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and Mack-Cali further acknowledge that all materials relating to the Property
which have been provided by Contributor, including but not limited to, the Phase
I Reports, have been provided without any warranty or representation, expressed
or implied as to their content, suitability for any purpose, accuracy,
truthfulness or completeness and, except as expressly provided herein, neither
MCRLP nor Mack-Cali shall have any recourse against Contributor or its counsel,
advisors, agents, officers, directors or employees for any information in the
event of any errors therein or omissions therefrom.
Contributor does not warrant or make any representation, express or
implied, as to the merchantability, quantity, quality, condition, suitability or
fitness of the Property for any purpose whatsoever, including, without
limitation, its compliance with applicable building codes and ordinances, zoning
laws, environmental laws including, without limitation, the Clean Air Act,
CERCLA and the Super Fund Amendments and Reauthorization Act (SARA), the
Americans with Disabilities Act, and any other federal, state or local statutes,
codes or ordinances. MCRLP also acknowledges and agrees that (i) the
Contributor's representations and warranties set forth in Section 5 and (ii) the
provisions in this Agreement for delivery of existing Phase I Reports and
inspection and investigation of the Property are adequate to enable MCRLP to
make MCRLP's own determination with respect to the suitability or fitness of the
Property, including, without limitation, its compliance with applicable building
codes and ordinances, zoning laws, environmental laws including, without
limitation, the Clean Air Act, CERCLA and the SARA, the Americans with
Disabilities Act, and any other federal, state or local statutes, codes or
ordinances.
Except to the extent (a) caused by a breach of any of Contributors'
representations hereunder; (b) related to claims by or liabilities to third
parties unrelated to Mack-Cali or MCRLP; or (c) as otherwise expressly set forth
herein, including, without limitation, as indemnified pursuant to the Indemnity
Agreement, MCRLP and Mack-Cali, for themselves and their successors and assigns,
hereby release each of the Contributors, and their agents, employees, partners,
officers, directors, members, managers, contractors, consultants and
representatives from, and waive any and all causes of action or claims against
any of such persons for (i) any and all liability attributable to any physical
condition of or at the Property, including, without limitation, the presence on,
under or about the Property of any materials the release or storage of which is
regulated by law; (ii) any and all liability resulting from the failure of the
Property to comply with any applicable laws; and (iii) any liabilities, damages
or injury arising from, connected with or otherwise caused by statements,
opinions or information obtained from any of such persons with respect to the
Property.
11. ADJUSTMENTS.
11.1 The following items under (a) through (g) 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. All moneys received from Tenants from and after
the Closing shall belong to MCRLP and shall be applied by MCRLP to current rents
and other charges under the Leases. After
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application of such moneys to current rents and charges, MCRLP agrees to remit
to Contributor any excess amounts paid by a Tenant to the extent that such
Tenant was in arrears in the payment of rent prior to the Closing.
(b) A cashier's or certified check or wire transfer to the
order of MCRLP in the amount of all cash Security Deposits and any prepaid
rents, together with interest required to be paid thereon. At the election of
MCRLP, such amount may be allotted to MCRLP as a credit against the Cash
Payment.
(c) Utility charges payable by Contributor, including without
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 ten (10) days prior to the Closing Date.
(d) Amounts payable under the Service Contracts other than
those Service Contracts which MCRLP has elected not to assume.
(e) 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.
(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 fifteen (15) days prior to the Closing by Contributor's supplier.
(g) Intentionally Deleted.
11.2 Intentionally Deleted.
11.3 At the Closing, Contributor shall deliver to MCRLP a list of
additional rent, however characterized, under all Leases, 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 MCRLP of the Additional Rents billed to Tenants, and the
amounts actually incurred for calendar year 1997, Contributor and MCRLP shall be
liable for overpayments of Additional Rents, and shall be entitled to 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. Notwithstanding the foregoing,
the calculation of real estate taxes and the collection of Additional Rents from
Tenants attributable to such real estate taxes, as reflected on the closing
statement related hereto, shall be final as of the Closing Date.
11.4 All amounts due and owing under the Mortgages other than the
outstanding principal balance thereof, including by way of example accrued and
unpaid interest, deferred interest,
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late charges, default interest, prepayment fees or penalties, and other fees and
charges, shall be paid by Contributor on or before the Closing.
11.5 If, on the Closing Date, the Property or any part thereof shall
be or shall have been affected by an assessment or assessments which are or may
become payable in annual installments, all the unpaid installments of any such
assessment due and payable on or prior to the Closing Date shall be paid and
discharged by Contributor on the Closing Date.
11.6 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 Colorado.
11.7 Any errors in calculations or adjustments shall be corrected or
adjusted as soon as practicable after the Closing.
11.8 The provisions of this Section 11 shall survive the Closing
Date.
12. CONDITIONS PRECEDENT TO CLOSING.
12.1 The obligations of Contributor to deliver title to the Real
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 MCRLP and
Mack-Cali herein shall be true and correct in all material respects with the
same force and effect as though such representations and warranties had been
made on and as of the Closing Date; provided, however, that a failure of any
representations or warranties to be true and correct in all material respects
shall not give rise to a claim by Contributor hereunder so long as such matters
do not have a material adverse effect on the transactions contemplated herein.
(b) MCRLP and Mack-Cali shall have executed and delivered to
Contributor all of the documents provided herein for said delivery.
(c) Intentionally Deleted.
(d) Mack-Cali and MCRLP shall have performed all covenants and
obligations undertaken by Mack-Cali and MCRLP herein in all material respects
and complied with all material conditions required by this Agreement to be
performed or complied with by them on or before the Closing Date.
12.2 The obligations of Mack-Cali and MCRLP to accept title to the
Property and Mack-Cali's and MCRLP's obligation to perform the other covenants
and obligations to be performed by Mack-Cali and MCRLP 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 Mack-Cali or MCRLP):
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(a) Subject to Section 5.5(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. For the purposes of the
Closing condition described in this Section 12.2(a), any limitation to the
knowledge, best knowledge, or actual knowledge in any representation, warranty,
covenant or agreement made by Contributor herein shall be inapplicable.
(b) Contributor shall have performed all covenants and
obligations undertaken by Contributor 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
MCRLP a Title Policy meeting the requirements set forth in Section 4 hereof for
an "insurable title".
(d) The Real Property shall be in compliance with all
Environmental Laws.
13. INTENTIONALLY DELETED.
14. LEASING COMMISSIONS AND TENANT IMPROVEMENT OBLIGATIONS.
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 Contributor. MCRLP shall be
credited at Closing as set forth on Schedules 5.1(f) and 5.1(m) respectively
with respect to certain tenant improvement and leasing commission obligations,
but Contributors shall remain liable for any amounts due and owing in excess of
such credits. All leasing commissions on account of extensions or renewals of
Leases made after the Closing Date shall be paid by MCRLP. All tenant
improvements obligations shall be satisfied prior to the Closing Date. The
provisions of this Section shall survive the Closing.
15. ASSIGNMENT.
This Agreement may not be assigned by Mack-Cali or MCRLP except to a
directly or indirectly wholly-owned subsidiary or subsidiaries of Mack-Cali or
MCRLP, 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 Mack-Cali or MCRLP shall be
deemed null and void and of no force and effect. Notwithstanding anything to the
contrary contained herein, Mack-Cali or MCRLP may assign the right to purchase
individual portions of the Property to various entities, provided that each of
such entities is a Permitted Assignee. A copy of any assignment permitted
hereunder, together with an agreement of the assignee assuming all of the terms
and conditions of this Agreement to be performed by Mack-Cali or MCRLP with
respect to the portion of the Real
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Property, in form reasonably satisfactory to counsel for Contributor, shall be
delivered to the attorneys for Contributor prior to the Closing, and in any
event, no such assignment shall relieve Mack-Cali and MCRLP from their
obligations under this Agreement.
16. BROKER.
Mack-Cali, MCRLP, and Contributor represent that, with the exception
of Sonnenblick Goldman Ltd. and Pacifica Holding Company LLC (collectively,
"Brokers") 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 they may sustain, incur or
be exposed to by reason of any breach of the foregoing representation and
warranty. Notwithstanding the foregoing, Contributor shall pay in full any
commission, fee or other compensation due the Brokers pursuant to separate
agreements, and Guarantor and Contributor agree to indemnify, defend and hold
MCRLP and Mack-Cali harmless from and against any and all loss, cost, damage,
liability, or expense, including reasonable attorneys' fees, which MCRLP or
Mack-Cali may sustain, incur or be exposed to by reason of Contributor's failure
to pay in full the Brokers pursuant to such separate agreements. The provisions
of this Section shall survive the Closing and/or other termination of this
Agreement.
17. CASUALTY LOSS.
17.1 Contributor shall continue to maintain, in all material
respects, the fire and extended coverage insurance policies with respect to the
Property (the "Insurance Policies") which are currently in effect, through the
date that said coverage currently expires, which obligation shall survive the
Closing.
17.2 If at any time prior to the Closing Date, all or any portion of
the Property is destroyed or damaged as a result of fire or any other casualty
(a "Casualty"), Contributor shall promptly give written notice ("Casualty
Notice") thereof to MCRLP. Within ten (10) days after the receipt of the
Casualty Notice, MCRLP and Mack-Cali shall have the right, at its sole option,
to terminate this Agreement with respect to said Property by written notice to
Contributor. Notwithstanding the foregoing, MCRLP and Mack-Cali shall not have
the right to terminate this Agreement if (a) Contributor's insurance fully
covers the damage resulting from the Casualty; and (b) the proceeds of any
insurance, together with a credit equal to Contributor's deductible under the
Insurance Policies, shall be paid to MCRLP and Mack-Cali at the time of the
Closing; and (c) all unpaid claims and rights in connection with losses to the
Property shall be assigned to MCRLP and Mack-Cali at the Closing without in any
manner affecting the Exchange Consideration hereunder.
17.3 If the Property is the subject of a Casualty but MCRLP or
Mack-Cali does not terminate this Agreement pursuant to the provisions of this
Section, then Contributor shall, prior to the Closing Date, cause all temporary
repairs to be made to the Property as shall be required to prevent further
deterioration and damage to the Property and to protect public health and
safety; provided, however, that any such repairs shall first be approved by
MCRLP or Mack-Cali.
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Contributor shall have the right to be reimbursed from the proceeds of any
insurance with respect to the Property for the cost of such temporary repairs.
18. CONDEMNATION.
In the event of a material taking (as defined in this Section 18),
MCRLP and Mack-Cali shall have the right, at its sole option, to either (a)
terminate this Agreement by giving Contributor written notice to such effect at
any time after its receipt of written notification of any such occurrence, or
(b) accept title to the remainder of the Property without reduction of any
consideration given hereunder. Should MCRLP or Mack-Cali so terminate this
Agreement in accordance with this Section, neither party shall have any further
liability or obligations to the other. In the event MCRLP or Mack-Cali shall not
elect to cancel this Agreement, Contributor shall, subject to the rights of the
holder of any existing mortgage, assign all proceeds of such taking to MCRLP or
Mack-Cali, and the same shall be MCRLP's or Mack-Cali's sole property, and MCRLP
or Mack-Cali shall have the sole right to settle any claim in connection with
the Property. The term "material taking" shall be defined to mean the
institution of any proceedings, judicial, administrative or otherwise which
involve (a) the taking of a portion of Real Property such that ingress and
egress to such Real Property is impaired, (b) the taking of a portion of the
parking spaces of a Real Property such that after such taking the Real Property
will not be in compliance with local zoning regulations regarding adequate
parking, or (c) the taking of any part of a Building.
19. TRANSFER RESTRICTIONS.
19.1 Contributor hereby 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 19, or (ii) publicly (subject to the
restrictions of the Act and the rules and regulations promulgated thereunder) in
trading blocks of 150,000 Common Stock shares in any single day. Notwithstanding
anything herein to the contrary, the provisions of this Section 19 shall not
apply to (i) pledges or encumbrances of all or a portion of the Contributor
Units to an institutional lender, or (ii) Transfers of all or any portion of the
Contributor Units to permitted transferees as set forth in the OP Agreement (the
"Permitted Transferees"). Any holder of Contributor Units pursuant to (i) or
(ii) of the preceding sentence shall be subject to the terms and conditions of
the OP Agreement.
19.2 If any of the Contributor Unit Holders, or any of their
Permitted Transferees (each a "Seller") 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 Seller shall
not sell, transfer, or otherwise dispose of (the "Proposed Disposition") such
Units or Underlying Shares (the "Disposition Securities") to a third party (the
"Purchaser"), unless prior to such Proposed Disposition, such Seller shall have
promptly reduced the terms and conditions, if any, of the Proposed Disposition
to a reasonably detailed writing and shall have delivered written notice (the
"Disposition Notice") of such Proposed Disposition to MCRLP. The Disposition
Notice
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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.
19.3 Mack-Cali shall not sell the Property within four (4) years
from the date of the Closing (the "Restricted Period") without the prior written
consent of Contributor, other than (1) in connection with a transaction which
does not result in recognition of gain by Pacifica; (2) a sale of any of the
Property set forth in Schedule 19.3 hereto; (3) as determined by the Board of
Directors of Mack-Cali (the "Board") as necessary to satisfy any material
monetary default on any mortgage secured by the Property; (4) as determined by
the Board as necessary to satisfy any material, unsecured debt, judgment or
liability of Mack-Cali when the same becomes due (at maturity or otherwise); (5)
in connection with the sale of all or substantially all of the properties owned
by Mack-Cali under such terms and conditions which the Board, in its sole
judgment, determines to be in the best interests of Mack-Cali and its public
stockholders; and/or (6) sales of the Property which do not result in material
and adverse tax consequences for Pacifica. Mack-Cali may dispose of any or all
of the Property in its sole discretion, and without the consent of Contributor,
upon the expiration of the Restricted Period. Notwithstanding any of the
foregoing language to the contrary, Mack-Cali shall not distribute the Property
for a period of seven (7) years if the distribution of such Property would
result in the recognition of income by Contributor pursuant to Sections
704(c)(1)(B) or 737 of the Code, except as otherwise permitted in clauses (1)
through (7) above.
20. INTENTIONALLY DELETED.
21. TAX MATTERS.
21.1 (a) Contributor will timely pay or provide for the payment of
all Taxes which are attributable to all Pre-Closing Tax Periods, but which are
not due and payable until after the Closing Date in connection with the
ownership and/or operation of the Property (by them or any predecessor entities)
or their businesses for which either MCRLP (or any of its direct or indirect
partners) could be held directly or indirectly liable or a claim could be made
against the Property. To the extent allowed by law, Contributor will timely file
all Tax Returns which are required to be filed in connection with the ownership
and/or operation of the Property (by them or any predecessor entities) or their
businesses for all Pre-Closing Tax Periods but which are not required to be
filed until after the Closing Date and the non-timely filing (or non-filing) of
which could result in direct or indirect liability to MCRLP (or any of its
direct or indirect partners) or a claim against the Property. Each such Tax
Return will be complete and accurate. Contributor will provide Mack-Cali with a
copy of all such Tax Returns promptly after such Tax Returns are filed. All
Taxes imposed in connection with the ownership and/or operation of the Property
during any taxable periods which begin on or before the Closing Date and end
after the Closing Date ("Straddle Periods" or "Straddle Period") shall be
allocated between Contributor and MCRLP in accordance with their respective
periods of ownership of the Property. Contributor will timely pay all Taxes with
respect to their businesses for any Straddle Period (and any other taxable
period) for which either MCRLP (or any of its direct to indirect partners) could
be held directly or indirectly liable or a claim could be made against the
Property.
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(b) Contributor shall provide Mack-Cali with a copy of its
Federal income tax returns which reflect (in whole or in part) any of the
transactions contemplated hereunder and which reflect (in whole or in part) any
of the gain or loss recognized in respect of such transactions.
21.2 Contributor shall pay any and all Taxes including without
limitation, Taxes imposed with respect to the operation of its business and the
ownership or operation of the Property for all taxable periods (or portions
thereof) ending on or prior to the Closing imposed upon MCRLP based, in whole or
in part, upon the failure to comply with the sales laws.
21.3 Contributor is hereby authorized to continue the proceeding or
proceedings now pending for the reduction of the assessed valuation of the
Property as set forth on Schedule 21.3 and to litigate or settle the same in
Contributor's discretion. MCRLP is hereby authorized by Contributor, in MCRLP's
sole discretion, to file any applicable proceeding for the 1997 fiscal year for
the reduction of the assessed valuation of the Property. The net refund of
taxes, if any, for any tax year for which Contributor or MCRLP shall be entitled
to share in the refund shall be divided between Contributor and MCRLP in
accordance with the apportionment of taxes pursuant to the provisions hereof.
All expenses in connection therewith, including counsel fees, shall be borne by
Contributor and MCRLP in proportion to their ownership period of the asset in
question.
21.4 For purposes of this Agreement:
(a) "Taxes" or "Tax" 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.
(b) "Tax Returns" or "Tax Return" means all original and
amended Federal, state, local and foreign tax returns, declarations, statements,
reports, schedules, forms, information returns and other filings relating to
Taxes.
(c) "Audits" or "Audit" means any audit, assessment of Taxes,
any other examination or claim by any Governmental Authority, judicial,
administrative or other proceeding or litigation (including any appeal of any
such judicial, administrative or other proceeding or litigation) relating to
Taxes and/or Tax Returns.
21.5 The provisions of this Section shall survive the Closing Date.
22. PUBLICATION.
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22.1 MCRLP shall have the exclusive right to make such public
announcements or filings with respect to the exchange as MCRLP may deem
reasonably prudent and, upon advice of counsel, as may be necessary or required
by law.
23. REMEDIES.
23.1 If the conditions set forth in Section 12.2 with respect to the
Closing have been satisfied (unless the failure or inability to be so satisfied
is due to Mack-Cali or MCRLP) and if MCRLP is not ready, willing and able to
perform its obligations hereunder on the Closing Date, or in the event of a
material default of MCRLP or Mack-Cali or MCRLP's or Mack-Cali's material
failure to comply with any material representation, warranty, covenant or
agreement set forth herein with respect to the Closing, then Contributor shall
have the right as its sole and exclusive remedy to either (i) terminate this
Agreement upon written notice to MCRLP, in which event neither party shall
thereafter have any further obligations under this Agreement, except those which
expressly survive the termination hereof; or (ii) maintain an action for either
(A) specific performance, or (B) monetary damages.
23.2 If the conditions set forth in Section 12.1 have been satisfied
(unless the failure or inability to be so satisfied is due to Contributor), and
if Contributor is not ready, willing and able to perform its obligations
hereunder on the Closing Date, or in the event of any material default on the
part of Contributor, or Contributor's failure to comply with any material
representation, warranty, covenant or agreement set forth herein, MCRLP shall be
entitled to either (i) terminate this Agreement upon notice to Contributor
following which neither party shall thereafter have any further obligations
under this Agreement, except those which expressly survive the termination
hereof; or (ii) commence an action against Contributor seeking either (A)
monetary damages, or (B) specific performance of Contributor's obligations under
this Agreement.
23.3 The acceptance of the Deed by MCRLP shall be deemed a full
performance and discharge of every agreement and obligation of Contributor to be
performed under this Agreement, except those, if any, which are specifically
stated in this Agreement to survive the Closing.
24. INTENTIONALLY DELETED.
25. 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 Mack-Cali: c/o Mack-Cali Realty Corporation
or MCRLP 11 Commerce Drive
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Cranford, New Jersey 07016
Attn: Roger W. Thomas, Esq.
(908) 272-8000 (tele.)
(908) 272-6755 (fax)
with a copy to: Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attn: Wayne B. Heicklen, Esq.
(212) 326-0425 (tele.)
(212) 326-0806 (fax)
If to Contributor: Pacifica Holding Company, LLC
5975 South Quebec Street, Suite 100
Englewood, Colorado 80111
Attn: Mr. Steven Leonard
(303) 220-5565 (tele.)
(303) 220-5585 (fax)
with a copy to: Brownstein, Hyatt, et al.
410 17th Street, 22nd Floor
Denver, Colorado 80202
Attn: Edward Barad, Esq.
(303) 534-6335 (tele.)
(303) 623-1956 (fax)
or to such other address as either party may from time to time designate by
written notice to the other or to the Escrow Agent. Notices given by (i)
overnight delivery service as aforesaid shall be deemed received and effective
on the first business day following such dispatch, and (ii) telecopy or fax
machine shall be deemed given at the time and on the date of machine transmittal
provided the same is sent prior to 4:00 p.m. Eastern Time 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.
26. DEPRECIATION METHOD.
Mack-Cali, as the general partner of MCRLP, covenants and agrees
that MCRLP and its affiliates will use the "traditional method with curative
allocations" (as defined in Treasury Regulations Section 1.704-3(c)) of
allocating income, gain, loss and deduction to account for the variation between
the fair market value and adjusted basis of the Property for federal income tax
purposes with respect to (i) the contribution of the Property, and (ii) any
revaluation of the Property
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in accordance with the provisions of Treasury Regulations Sections
1.704-1(b)(2)(iv)(f), 1.704- 1(b)(2)(iv)(g) and 1.704-3(a)(6).
27. MISCELLANEOUS.
27.1 Intentionally Deleted.
27.2 This Agreement constitutes the entire agreement between the
parties and incorporates and supersedes all prior negotiations and discussions
between the parties. This Agreement shall be binding upon and inure solely to
the benefit of each party hereto and their successors and assigns, and nothing
in the Agreement express or implied, is intended to confer upon any other person
any rights or remedies of any nature whatsoever under or by reason of this
Agreement.
27.3 This Agreement cannot be amended, waived or terminated orally,
but only by an agreement in writing signed by the party to be charged.
27.4 This Agreement shall be interpreted and governed by the laws of
the State of Colorado, without regard to conflicts of laws principles, and shall
be binding upon the parties hereto and their respective successors and assigns.
27.5 The caption headings in this Agreement are for convenience only
and are not intended to be part of this Agreement and shall not be construed to
modify, explain or alter any of the terms, covenants or conditions herein
contained. The, feminine or masculine gender, when used herein, shall each
include the other gender and the use of the singular shall include the plural.
27.6 If any term, covenant or condition of this Agreement is held to
be invalid, illegal or unenforceable in any respect, this Agreement shall be
construed without such provision.
27.7 Each party shall, from time to time, execute, acknowledge and
deliver to the other party 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 Contributor and MCRLP or Mack-Cali. 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, MCRLP, Mack-Cali or the party whose counsel
drafted this Agreement.
27.8 This Agreement shall not be effective or binding until such
time as it has been executed and delivered by all parties hereto. This Agreement
may be executed by the parties hereto in counterparts, all of which together
shall constitute a single Agreement.
27.9 All references herein to any Section, Exhibit, or Schedule
shall be to the Sections of this Agreement and to the Exhibits and Schedules
annexed hereto unless the context
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clearly dictates otherwise. All of the Exhibits and Schedules annexed hereto
are, by this reference, incorporated herein.
27.10 In the event that Contributor and MCRLP or Mack-Cali enter
into litigation or alternative dispute resolution in connection with this
Agreement or the transaction contemplated herein, the non-prevailing party in
such litigation or alternative dispute resolution shall be responsible for the
payment of all expenses and reasonable attorneys' fees incurred by the
prevailing party.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE.]
39
CONTRIBUTION AND EXCHANGE AGREEMENT
THIS CONTRIBUTION AND EXCHANGE AGREEMENT (the "Agreement") made this 25th
day of March, 1998, by and between APOLLO/PACIFICA PYRAMID, LLC ("Contributor"),
a Delaware limited liability company with an address c/o Pacifica Holding
Company, 5975 South Quebec Street, Suite 100, Englewood, Colorado 80111,
MACK-CALI REALTY, L.P., a Delaware limited partnership ("MCRLP") and MACK-CALI
REALTY CORPORATION, a Maryland corporation ("Mack-Cali"), each having an address
at 11 Commerce Drive, Cranford, New Jersey 07016.
RECITALS
A. Contributor owns various commercial properties located throughout the
Denver, Colorado metropolitan area. Mack-Cali, through MCRLP and certain
affiliated entities of MCRLP, similarly owns various commercial properties
located throughout New Jersey, New York, Pennsylvania, Nebraska, Iowa,
California, Florida, Arizona, Connecticut and Texas.
B. Contributor, MCRLP and Mack-Cali have determined that the transactions
contemplated hereby are in the respective parties' best interests.
NOW, THEREFORE, in consideration of ten dollars ($10.00), the mutual
promises hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, do hereby agree as follows:
1. SUBJECT OF CONVEYANCE.
In accordance with the terms and conditions of this Agreement, on the
Closing Date (as defined herein), Contributor agrees to contribute, convey or
otherwise transfer to certain designees of MCRLP all of Contributor's right,
title and interest in and to the assets set forth in paragraphs (a) through (h)
of this Section 1:
(a) that certain real property situate, lying and being in the State of
Colorado and being more particularly described on Schedule 1(a) (the "Land"),
which Schedule 1(a) sets forth the name, state of organization and type of
entity of Contributor of a parcel of Land and all of the improvements located on
the Land (individually, a "Building" and collectively, the "Improvements");
(b) all rights, privileges, grants and easements appurtenant to
Contributor's interests in the Land and Improvements, if any, including without
limitation, all land lying in the bed of any public street, road or alley, all
mineral and water rights and all easements, licenses, covenants and
<PAGE>
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
collectively referred to herein as the "Real Property");
(c) except as set forth on Schedule 1(c) all personal property, artwork,
fixtures, equipment, inventory and computer programming and software owned by
Contributor and located on any of the Real Property or used at any of the
management and corporate offices of Contributor (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
(each a "Lease" and collectively, the "Leases") and any guaranties provided
thereunder, and rents, additional rents, reimbursements, profits, income,
receipts and the amount deposited (the "Security Deposit") under any Lease in
the nature of security for the performance of the Tenant's (as defined herein)
obligations thereunder;
(e) Intentionally Deleted.
(f) all permits, licenses, guaranties, approvals, certificates and
warranties relating to the Real Property and the Personal Property
(collectively, the "Permits and Licenses"), all of Contributor's rights, titles
and interests in and to those contracts and agreements for the servicing,
maintenance and operation of the Real Property ("Service Contracts") and
telephone numbers in use at any of the Real Property or the management offices
and corporate headquarters of Contributor (together with the Permits and
Licenses and the Service Contracts, the "Intangible Property");
(g) all books, records, promotional material, tenant data, leasing
material and forms, past and current rent rolls, files, statements, 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
(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.
The Real Property, the Personal Property, the Leases, the Intangible
Property, the Books and Records and the other property interests being conveyed
hereunder are hereinafter collectively referred to as the "Property".
For all purposes herein, unless the context clearly dictates otherwise,
any reference herein to "Contributor" shall be deemed to be a reference to the
entity which is to convey any assets hereunder to MCRLP or its designees.
2. PAYMENT TERMS.
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2.1 Total Exchange Consideration. The aggregate consideration for
the Property (the "Exchange Consideration") is Thirteen Million Seven Hundred
Fifty Thousand and xx/100 ($13,750,000.00) Dollars, to be paid by MCRLP in
accordance with Section 2.2.
2.2 The Property. (a) At the Closing (as defined herein), and upon
satisfaction of the terms and conditions provided herein, Contributor agrees to
contribute the Property to MCRLP or its Permitted Assignees (hereinafter
defined), and MCRLP (and Mack-Cali where applicable) agrees, subject to
adjustment as set forth herein, (i) to pay to Contributor or its designees, in
cash, the amount of Thirteen Million Seven Hundred Fifty Thousand and xx/100
($13,750,000.00) Dollars (the "Cash Payment") and (ii) to issue the Contributor
Units (hereinafter defined) in an amount set forth in Subsection 2.2(b) to such
persons as Contributor shall direct in writing (as set forth in Section
10.2(aa)) as soon as practicable following the date hereof (the "Unit Holders").
(b) Simultaneous with MCRLP accepting the Property, MCRLP
shall issue, subject to adjustments as set forth herein, ___________ common
units of limited partnership interests in MCRLP (the "Contributor Units")
convertible into Mack-Cali Common Stock ("Common Stock"); provided, however,
that the Unit Holders shall be issued and shall hold the Contributor Units in
accordance with the provisions of Section 19.
(c) At the Closing, MCRLP shall issue to Contributor and/or
the Unit Holders or their designees certificates representing in the aggregate
________ Contributor Units (the "Permanent Certificates"), which Permanent
Certificates shall contain the legend set forth on Exhibit 10.2(ee).
(d) All rights and benefits incidental to the ownership of the
Contributor Units received in exchange for the Property, 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, shall accrue for the
benefit of the Unit Holders commencing on the Closing Date (as defined herein).
(e) With respect to the first Partnership Record Date (as
defined in the OP Agreement (as defined below)) on or after the Closing, the
Unit Holders 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 Unit Holders held
Contributor Units.
2.3 Intentionally Deleted.
2.4 Intentionally Deleted.
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3. INSPECTION PERIOD; MCRLP'S RIGHT OF TERMINATION AND REJECTION PRIOR
TO CLOSING.
3.1 Prior to the Closing (the "Inspection Period"), time being of
the essence as to each such date, MCRLP, at its sole cost and expense, 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, financial,
market analysis, development and economic feasibility studies and other tests,
investigations or studies as MCRLP, 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 Leases, Service Contracts, copies of Contributor's
Tax Returns and the Property Financials (as hereinafter defined) as of and for
the years ending December 31, 1995, 1996 and 1997, engineering and environmental
reports, development approval agreements, permits and approvals, which
inspection shall be satisfactory to MCRLP in its sole discretion. Contributor
agrees to cooperate with MCRLP in such review and inspection and, to the extent
not yet delivered, shall deliver said documents and information to MCRLP within
ten (10) days from the date hereof. MCRLP may terminate this Agreement for any
reason, by written notice given to Contributor, prior to the expiration of the
Inspection Period. In the event MCRLP terminates this Agreement during the
Inspection Period, this Agreement shall be null and void and the parties hereto
shall be relieved of all further obligations hereunder except as otherwise
provided herein. In the event MCRLP does not terminate this Agreement by the end
of the Inspection Period, then MCRLP shall be deemed to have elected not to
terminate this Agreement.
3.2 During the Inspection Period, MCRLP, its agents and contractors
shall have unlimited access to the Property and other information pertaining
thereto in the possession or within the control of Contributor, during normal
business hours, for the purpose of performing such studies, tests, borings,
investigations and inspections for the purposes described in Section 3.1 above.
Such right of inspection and the exercise of such right shall not constitute a
waiver by MCRLP of the breach of any representation or warranty of Contributor
which might, or should, have been disclosed by such inspection. Contributor
shall cooperate with MCRLP in facilitating its due diligence inquiry and shall
obtain, and use commercially reasonable efforts to obtain, any consents that may
be necessary in order for MCRLP to perform the same.
3.3 To assist MCRLP in its due diligence investigation of the
Property, Contributor shall deliver to MCRLP, by the execution and delivery of
this Agreement, true and correct copies of all existing Phase I environmental
studies (the "Phase I Reports") in the possession or control of Contributor with
respect to the Real Property, which Phase I Reports are set forth on Schedule
3.3 annexed hereto. In the event that MCRLP determines that it requires any new
Phase I Reports or updates thereof, the cost of such reports or updates shall be
borne by MCRLP. If MCRLP reasonably requires that further environmental
investigations be undertaken beyond any new Phase I or updated Phase I Report,
all engineering costs and expenses relating to said further environmental
investigations shall be borne by Mack-Cali.
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3.4 Intentionally Deleted.
3.5 During the Inspection Period, Mack-Cali and MCRLP shall provide
to Contributor and its agents and advisors reasonable access to Mack-Cali's and
MCRLP's books and records, and Mack-Cali and MCRLP shall provide Contributor
such other reasonable information including, without limitation, all Securities
and Exchange Commission filings of MCRLP and Mack- Cali and federal, state, and
local income, excise, franchise, and all other tax filings, in order to permit
Contributor, at its sole cost and expense, to perform reasonable due diligence
on such parties. Nothing arising from Contributor's inspection or due diligence
as permitted by this Section shall give rise to a right of Contributor to
terminate this Agreement.
3.6 Mack-Cali shall have the right, without the obligation, to
terminate this Agreement if (i) at any time prior to the Closing Date, Mack-Cali
determines in its sole discretion, that any of the Property is subject to
materially adverse environmental conditions, including, without limitation, any
environmental condition that has a material adverse affect on the property value
of any Real Property, on the current use of any Real Property, on groundwater
at, on, under, about or emanating from any Real Property or on the ability of
Mack-Cali or MCRLP to finance any Real Property; or (ii) Contributor is unable
to obtain the approval of any third-party partner of the Contributors to the
terms of this Agreement; or (iii) Mack-Cali determines that certain of the
indebtedness encumbering the Property cannot be satisfactorily satisfied or
restructured.
4. TITLE; MATTERS TO WHICH THIS SALE IS SUBJECT.
4.1 As of the Closing Date, title to the Property shall be 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 the same are not yet due and payable,
but subject to adjustment as provided herein;
(b) the rights of those parties occupying space at any of the
Improvements (collectively, "Tenants") as tenants only;
(c) those restrictions, covenants, agreements, easements,
matters and things affecting title to the Real Property as of the date hereof
and more particularly described in Schedule 4.1(c) annexed hereto and by this
reference made a part hereof and such other easements, covenants and
restrictions which are entered into with the consent of MCRLP after the date
hereof, such consent not to be unreasonably withheld, delayed or conditioned;
(d) any and all laws, statutes, ordinances, codes, rules,
regulations, requirements, or executive mandates affecting the Real Property
including, without limitation, those related to zoning and land use, as of the
date hereof;
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(e) the state of facts shown on the surveys described on
Schedule 4.1(e) for each of the individual properties comprising the Real
Property and the Earnout Properties;
(f) the Service Contracts;
(g) any utility company rights, easements and franchises to
maintain poles, lines, wires, cables, pipes, boxes and other fixtures and
facilities in, over, under or upon the Real Property, provided the same do not
impair, in other than a de minimis manner, the present use of the Real Property;
(h) such matters as the Title Company (as hereinafter defined)
shall be willing, without special premium, to omit as exceptions to coverage;
(i) the lien of the Mortgages (but on the terms and conditions
of this Agreement).
4.2 Prior to the date hereof, Contributor shall have directed Land
Title Guarantee Company (the "Title Company"), as agent for Chicago Title
Insurance Company, to prepare a title insurance search and commitment for
owner's title insurance policy for the Real Property (the "Title Commitment").
MCRLP shall cause the Title Company to promptly deliver a copy of the same to
Contributor and its counsel. If any defects, objections or exceptions in the
title to the Real Property appear in the Title Commitment (other than the
Permitted Encumbrances) which MCRLP is not required to accept under the terms of
this Agreement, Contributor may, at its election, undertake to eliminate such
unacceptable defects, objections or exceptions, it being agreed that except as
provided below, Contributor shall have no obligation to incur any expense in
connection with curing such defects, objections or exceptions, other than (i)
judgments against Contributor; (ii) mortgages or other liens which can be
satisfied by payment of a liquidated amount, other than the Mortgages; and (iii)
defects, objections or exceptions which can be removed by payments not to exceed
$100,000.00 per Building in the aggregate. Contributor, 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, 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, MCRLP shall elect either (i) to
terminate this Agreement by notice given to Contributor, in which event the
provisions of Section 23.2(a) shall apply, or (ii) to accept title subject to
such unacceptable defects, objections or exceptions and receive no credit
against or reduction of the consideration to be given hereunder for the
Property. Contributor agrees and covenants that it shall not voluntarily place
any encumbrances or restrictions on title to the Real Property from and after
the date of the first issuance of the Title Commitment for said Property, except
for the right to reserve easements for utilities and ingress and egress
encumbering the Real Property (post-closing) for the benefit of adjacent
properties owned by Contributor (or any affiliate thereof) upon the written
consent of MCRLP, which consent shall not
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be unreasonably withheld or delayed; and so long as the mortgagees of the
Mortgages shall consent to the reservation of the same. Mack-Cali and MCRLP
covenant and agree that they shall consult with Contributor prior to causing any
other person or entity to request any inspection of the Real Property by any
governmental entity. Contributor recognizes that Mack-Cali's and MCRLP's due
diligence necessitates said inspection. Mack-Cali and MCRLP agree that they
shall conduct any due diligence with such governmental entity with a view toward
maintaining the confidentiality of the transaction contemplated by this
Agreement.
4.3 It shall be a condition to Closing that Contributor conveys, and
that the Title Company insures, title to the Real Property in the amount of the
Allocated Property Value thereof (at a standard rate for such insurance) in the
name of MCRLP or its designees, after delivery of the Deed (as hereinafter
defined) by a standard 1992 ALTA Owner's Policy, with ALTA endorsements, to the
extent that the premium for such endorsements is paid by MCRLP, for the Real
Property as required by MCRLP 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 (i)
the exception for taxes shall apply only to the current taxes not yet due and
payable; and (ii) to the extent that the premium for such endorsements is paid
by MCRLP, (a) any Permitted Encumbrances have not been violated, and that any
future violation thereof will not result in a forfeiture or reversion of title;
and (b) MCRLP's contemplated use of the Real Property will not violate the
Permitted Encumbrances. Contributor shall provide such affidavits and
undertakings as the Title Company insuring title to the Real Property may
require and shall cure all other defects and exceptions other than the Permitted
Encumbrances and as required pursuant to Section 4.2. The words "insurable
title" and "insurable" as used in this Agreement are hereby defined to mean
title which is insurable at standard rates (without special premium) by the
Title Company without exception other than the Permitted Encumbrances, and
standard printed policy and survey exceptions.
4.4 Contributor shall cause one or more surveyors acceptable to
MCRLP to deliver to MCRLP a survey or surveys of the Real Property acceptable to
MCRLP in all respects and in conformity with ALTA standards. MCRLP shall, at
MCRLP's sole cost and expense and with Contributor's cooperation and assistance,
cause the surveyor to update the survey no more than thirty (30) days prior to
the Closing Date and shall have the general survey exception removed from the
Title Policy and the survey affirmatively insured, to the extent that the
premium for such endorsement is paid by MCRLP, to MCRLP.
4.5 Any unpaid taxes, water charges, sewer rents and assessments,
together with the interest and penalties thereon to a date not less than seven
(7) business days following the Closing Date (in each case subject to any
applicable apportionment), and any mortgages or other liens created by
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, shall be paid
at the Closing by Contributor. Contributor shall deliver to MCRLP, on the
Closing Date, instruments in recordable form sufficient
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to discharge any such mortgages or other liens which Contributor is obligated to
pay and discharge pursuant to the terms of this Agreement.
4.6 If the Title Commitment discloses judgments, bankruptcies or
other returns against other persons or entities having names the same as or
similar to that of Contributor, Contributor shall, upon request, deliver to the
Title Company affidavits showing that such judgments, bankruptcies or other
returns are not against Contributor, or any of its affiliates. Upon request by
MCRLP, Contributor shall deliver any affidavits and documentary evidence as are
reasonably required by the Title Company to eliminate the standard exceptions on
the ALTA Owner's Policy.
5. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTOR.
5.1 In order to induce MCRLP and Mack-Cali to perform as required
hereunder, Contributor hereby warrants and represents to MCRLP and Mack-Cali the
following with respect to the Property:
(a) Contributor is a duly organized and validly existing
entity, organized and in good standing under the laws of the state of its
formation, as more particularly set forth in Exhibit A hereto, is duly
authorized to transact business in the State of Colorado, 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 partners, members, shareholders and/or
principals 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.
(b) Intentionally Deleted.
(c) 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.
(d) Annexed hereto as Schedule 5.1 (d) is a true, complete and
correct schedule of all of the Leases. The Leases are valid and bona fide
obligations of the landlord and Tenants thereunder and are in full force and
effect. To the best of Contributor's knowledge, no defaults exist thereunder and
no condition exists which, with the passage of time or the giving of
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notice or both, will become a default; the Leases constitute all of the leases,
tenancies or occupancies affecting the Real Property on the date hereof; all
Tenants have commenced occupancy; there are no agreements (other than the
Leases) which confer upon any Tenant or any other person or entity any rights
with respect to the Property, nor is any Tenant entitled now or in the future to
any concession, rebate, offset, allowance or free rent for any period, nor has
any such claim been asserted by any Tenant.
(e) Annexed hereto as Schedule 5.1(e) (the "Rent Roll") is a
listing of the following, which is true, complete and correct in all respects
for each Building: (i) the name of each Tenant; (ii) the fixed rent actually
being collected; (iii) the expiration date or status of each Lease (including
all rights or options to renew); (iv) the Security Deposit, if any; (v) whether
there is any guaranty of a Tenant's obligations from a third party, and if so
the nature of said guaranty; (vi) any written notices given by any Tenant of an
intention to vacate space in the future; (vii) the base year(s) and base year
amounts for all items of rent or additional rent billed to each Tenant on that
basis; and (viii) any arrearages of any Tenant beyond thirty (30) days.
(f) To the knowledge of Contributor, Contributor has performed
all of the obligations and observed all of the covenants required of it as
landlord under the terms of the Leases. Except as set forth on Schedule 5.1(f)
annexed hereto, all work, alterations, improvements or installations required to
be made for or on behalf of all Tenants under the Leases have in all respects
been carried out, performed and complied with, and there is no agreement with
any Tenant for the performance of any work to be done in the future. To the
knowledge of Contributor, except as set forth on Schedule 5.1(f), no work has
been performed at any Building which would require an amendment to the
certificate of occupancy for such Building for which an amendment has not been
obtained, and any and all work performed at the Real Property to the date hereof
and to the Closing Date has been and will be in accordance with the rules, laws
and regulations of all applicable authorities. All bills and claims for labor
performed and materials furnished to or for the benefit of the Property arising
prior to the Closing Date will be paid in full by Contributor within customary
time periods, not to exceed forty-five (45) days from the receipt of an invoice
by Contributor.
(g) There are no service contracts, union contracts,
employment agreements or other agreements affecting the Property or the
operation thereof, except the Service Contracts and other contracts and
agreements set forth on Schedule 5.1(g) annexed hereto. All of the Service
Contracts are and will on the Closing Date be unmodified and in full force and
effect without any material default or claim of material default by any of the
parties thereto. All sums presently due and payable by Contributor under the
Service Contracts have been fully paid and all sums which become due and payable
between the date hereof and the Closing Date shall be fully paid by Contributor
within customary time periods, not to exceed forty-five (45) days from the
receipt of an invoice by Contributor. All of the Service Contracts may be
terminated on not more than sixty (60) days notice without the payment of any
fee or penalty, and the representation contained in this sentence is not subject
to being modified by the limitations of Section 5.5. There are no employees of
Contributor, or an affiliate of Contributor, working at or in connection with
the
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Real Property pursuant to any of the Service Contracts, other contracts and
employment agreements, except as set forth on Schedule 5.1(g).
(h) Except as set forth on Schedule 5.1(h) annexed hereto,
there are no actions, suits, labor disputes, litigation or proceedings currently
pending or, to the knowledge of Contributor, threatened against Contributor
(with respect to the Property being sold) or all or any part of the Property,
the environmental condition thereof, or the operation thereof.
(i) Except as set forth on Schedule 5.1(i) annexed hereto,
Contributor has received no written notice and has no knowledge of (i) any
pending or contemplated annexation or condemnation proceedings, or private
purchase in lieu thereof, affecting or which may affect the Real Property or any
part thereof, (ii) any proposed or pending proceeding to change or redefine the
zoning classification of all or any part of the Real Property, (iii) any
proposed or pending special assessments affecting the Real Property or any
portion thereof, (iv) any penalties or interest due with respect to real estate
taxes assessed against the Real Property, or (v) any proposed changes in any
road or grades with respect to the roads providing a means of ingress and egress
to the Real Property. Contributor agrees to furnish MCRLP with a copy of any
such notice received within two (2) business days after receipt.
(j) Contributor has provided MCRLP with all reports in
Contributor's possession or under its control related to the physical condition
of the Real Property.
(k) Except as set forth on Schedule 5.1(k) annexed hereto,
Contributor has no knowledge of any notices, suits, or judgments relating to any
violations (including environmental) of any laws, ordinances or regulations
affecting the Real Property, or any violations or conditions that may give rise
thereto, and has no reason to believe that any agency, board, bureau,
commission, department or body of any municipal, county, state or federal
governmental unit, or any subdivision thereof, having, asserting or acquiring
jurisdiction over all or any part of the Real Property or the management,
operation, use or improvement thereof (collectively, the "Governmental
Authorities" or "Governmental Authority" as the context requires) contemplates
the issuance thereof, and there are no outstanding orders, judgments,
injunctions, decrees or writ of any Governmental Authorities against or
involving Contributor or the Real Property. For purposes of this Agreement, the
term "Governmental Authority" shall also include the Internal Revenue Service
and any other federal, state, local or foreign taxing authority.
(l) There are no employees of Contributor or any affiliates of
Contributor working at or in connection with the Real Property except as set
forth on Schedule 5.1(l).
(m) Annexed hereto as Schedule 5.1(m) is a schedule of all
leasing commission obligations affecting the Property. The respective
obligations of Contributor and MCRLP with respect to said commissions are set
forth in Section 14.
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(n) 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
Contributor's assets, suffered the attachment or other judicial seizure of all,
or substantially all, of 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.
(o) Except for the Mortgages and otherwise as set forth on
Schedule 5.1(o), the Personal Property is now owned and will on each of the
Closing Date be owned by Contributor free and clear of any conditional bills of
sale, chattel mortgages, security agreements or financing statements or other
security interests of any kind.
(p) To Contributor's knowledge, Contributor is not in default
under the Mortgages. True, correct and complete copies of the Loan Documents
have been delivered to MCRLP. The Loan Documents will not be amended or modified
except as required by Mack-Cali prior to the Closing Date.
(q) Intentionally Deleted.
(r) Intentionally Deleted.
(s) Contributor has no knowledge that any part of the Real
Property has been designated as wetlands or any other word of similar purport or
meaning under the Federal Water Pollution Control Act, 33 U.S.C. ss.1251 et
seq.; the Colorado Water Quality Control Act, Colo. Rev. Stat. Section 25-8-101
et seq; or any other applicable federal, state, county or municipal statute,
ordinance, rule, regulation, order or code.
(t) To the best of Contributor's knowledge, there are no
aboveground or underground storage tanks or vessels at the Real Property,
regardless of whether or not such tanks or vessels are regulated tanks or
vessels, except as set forth on Schedule 5.1(t).
(u) Contributor has no knowledge of outstanding requirements
or recommendations by (i) any insurance company currently insuring the Property;
(ii) any board of fire underwriters or other body exercising similar functions;
or (iii) the holder of any mortgage encumbering any of the Property, which
require or recommend any repairs or work of a material nature to be done on the
Property.
(v) The financial statements, including the income and expense
statements and the balance sheets of Contributor and its affiliates, excluding
only those assets, liabilities and operations not contemplated to be contributed
pursuant to this Agreement, relating to Contributor's ownership and operation of
the Property and the related statement of income, partners' capital and cash
flows, including the footnotes thereto (the "Property Financials") as of and for
the years ending December 31, 1995, 1996 and 1997, fairly present the financial
position of Contributor
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relating to the Property as of such dates and the results of operations and cash
flows of Contributor relating to the ownership and operation of the Property for
such respective periods. The Property Financials from January 1, 1998, through
the most recent month ending prior to the Closing Date, fairly present the
financial position of the Property relating to the ownership and operation of
the Property as of such date (subject to the normal year-end adjustments
described in Schedule 5.1(v)) and with all interim financial statements of the
Property heretofore delivered to MCRLP on behalf of Contributor.
(w) Except as set forth in Schedule 5.1(w), Contributor does
not maintain any 401(k) savings plans, pension plans, multi-employer plans (as
defined in Section 3(37) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), employee benefit plans (as defined in ERISA) or employee
welfare plans providing for benefits to Contributor's employees (each, a
"Contributor Plan"). From and after the date hereof, Contributor shall not adopt
a Contributor Plan. Mack-Cali shall have no liability to any current or former
employees of Contributor or any affiliate thereof, including, without
limitation, any liabilities which may arise as a result of the consummation of
the transactions contemplated by this Agreement, under any plans or programs
listed on Schedule 5.1(w), or arising under applicable federal or state law,
including, without limitation, under the Worker Adjustment and Retraining
Nonfiction Act (WARN) and Consolidated Omnibus Budget Reconciliation Act of 1985
(COBRA).
(x) Intentionally Deleted.
(y) Except as disclosed in the Phase I Reports or otherwise
set forth in Schedule 5.1(y):
(i) To the best of Contributor's knowledge, no
Governmental Authority has demanded in writing, addressed to Contributor or any
of its affiliates, counsel or agents, that any Contaminants (as defined herein)
be cleaned up or environmentally remediated at any Real Property, which has not
been cleaned up or environmentally remediated.
(ii) To the best of Contributor's knowledge, no
Contaminants have been Discharged (as hereinafter defined) which would allow a
Governmental Authority to demand that a cleanup be undertaken.
(iii) To the best of Contributor's knowledge, no
ss.104(e) informational request, issued pursuant to CERCLA (as hereinafter
defined) with respect to the Real Property has been received by Contributor.
(iv) To the best of Contributor'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.
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(v) To the best of Contributor's knowledge, there is no
asbestos or asbestos containing material requiring remediation under
Environmental Laws (as hereinafter defined) on the Real Property, except as set
forth on Schedule 5.1(y).
(vi) To the best of Contributor's knowledge, all
transformers and capacitors containing polychlorinated biphenyls ("PCBs") , and
all "PCB Items", as defined in 40 CFR, ss.761.3, located on or affecting the
Real Property, are identified in Schedule 5.1(y) and are in compliance with all
Environmental Laws.
(vii) To the best of Contributor's knowledge, Pacifica
has all material certificates, licenses and permits (the "Permits"), including
without limitation, environmental Permits, required to operate the Real
Property. To the best of Contributor'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, as the case may be, without
additional payment by MCRLP, and shall, upon closing, be transferred to MCRLP by
Contributor.
(viii) To the best of Contributor's knowledge, the Real
Property has not been used during the period of Contributor's ownership as solid
wastes disposal sites and facilities as defined in the Colorado Solid Wastes
Disposal Sites and Facilities Law, Colo. Rev. Stat. Section 30-20-100.5 et seq.
and the regulations promulgated thereunder.
(ix) To the best of Contributor's knowledge, there are
no engineering or institutional controls 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 Colo. Rev. Stat. Section 25-15-208 et seq. and
the regulations promulgated thereunder.
(x) Contributor has not transported any Contaminants
from the Real Property to another location in violation of Environmental Laws.
(xi) To the best of Contributor's knowledge, there are
no federal or state liens, as referenced under CERCLA and the regulations
promulgated thereunder, or under any other applicable Environmental Law that
have attached to the Real Property.
(xii) Contributor has provided MCRLP with all
environmental site assessments, investigations, and documents and all other
Environmental Documents (as that term is defined below) in its possession or
under its control and shall continue to do so after execution of this Agreement
promptly upon its receipt.
(xiii) For purposes of this Agreement, the following
words shall have the respective meaning set forth below:
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(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
Contributor 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.
(z) Contributor and its affiliated entities shall have timely
paid all Taxes (as defined herein) due and payable on or prior to the Closing
Date in connection with the ownership and/or operation of the Property (by them
or any predecessor entities) or their businesses for which MCRLP (or any of its
direct or indirect partners) could be held directly or indirectly liable or a
claim could be made against the Property. Contributor and its affiliated
entities shall have timely filed all Tax Returns (as defined herein) required to
be filed on or prior to the Closing Date in connection with the ownership and/or
operation of the Property (by them or any predecessor entities) or their
businesses, and the non-timely filing (or non-filing) of which could result in
direct or indirect liability to MCRLP (or any of its direct or indirect
partners) or a claim against the Property. Each such Tax Return is complete and
accurate in all respects. Contributor and its affiliated entities shall have
timely paid or will timely pay, or shall have provided for or will provide for a
cash reserve for
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the payment of, all Taxes due and payable on or after the Closing Date for all
taxable periods (or portions thereof) ending on or prior to the Closing Date (a
"Pre-Closing Tax Period" or "Pre- Closing Tax Periods"), and in connection with
the ownership and/or operation of the Property (by them or any predecessor
entities) or their businesses for which MCRLP (or any of its direct or indirect
partners) could be held directly or indirectly liable or a claim could be made
against the Property. Contributor and its affiliated entities shall timely file
all Tax Returns which relate to all Pre-Closing Tax Periods but which are
required to be filed after the Closing Date in connection with the ownership
and/or operation of the Property (by them or any predecessor entities) or their
businesses, the non-timely filing (or non-filing) of which could result in
direct or indirect liability to MCRLP (or any of its direct or indirect
partners) or a claim against the Property. Each such Tax Return will be complete
and accurate in all respects. True and complete copies of all Tax Returns filed
by Contributor for taxable periods beginning on or after January 1, 1994, and
all written communications relating thereto, have been, or will be upon request,
delivered to Mack-Cali. Contributor has also provided, or will also provide upon
request, to Mack-Cali copies of: (i) any letter ruling, determination letter or
similar document issued to Contributor by any Governmental Authority, and (ii)
any closing or other agreement entered into by Contributor with any Government
Authority. Except as set forth on Schedule 5.1(z), there are no ongoing Audits
or Audits pending or, to the knowledge of Contributor and each of its affiliated
entities, threatened with respect to the ownership and/or operation of the
Property (by Contributor, its affiliated entities or any of their predecessor
entities) or the businesses of Contributor or any of its affiliated entities,
which could result in direct or indirect liability to MCRLP (or any of its
direct or indirect partners) or a claim against the Property. There are no
agreements or waivers extending the statutory period of limitations with respect
to any such Tax Returns or for the assessment or collection of any such Taxes.
No claim has ever been made by a Governmental Authority in a jurisdiction where
Contributor does not file Tax Returns that it is or may be subject to taxation
by that jurisdiction.
(aa) Annexed hereto as Schedule 5.1(aa) is a listing, for
federal income tax purposes, of the following information, which is true,
complete and correct in all aspects for each item of Property: (i) its adjusted
basis as of the first day of Contributor's taxable year which includes the
Closing Date; (ii) the date placed in service; (iii) the depreciation method;
and (iv) the remaining useful life.
(bb) Subject to the provisions of Section 5.5, no
representation or warranty made by Contributor contained in 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.
(cc) As used throughout this Agreement, the phrases "to
Contributor's knowledge," "to the knowledge of Contributor," "to the best of
Contributor's knowledge" or any similar derivation thereof, shall mean the
actual (not constructive) knowledge of Terrence Claassen,
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David Goldberg, Chetter Latcham, Steve Leonard, Rich Majors, Adel Nassif, Chuck
Peck and Della Wegman, without having undertaken any independent investigation
of facts or legal issues, without any duty to do so, and without imputing to the
aforementioned persons the knowledge of any employee, agent, representative or
affiliate of Contributor or of any other person or entity.
5.2 Intentionally Deleted.
5.3 All representations and warranties made hereunder by Contributor
and in this Agreement shall survive the Closing Date for a period of one (1)
year, except that the representations and warranties set forth in clauses (a),
(c), (w) and (z) of Section 5.1 shall survive such Closing Date for the
applicable period of the statute of limitations (unless otherwise specified
herein), and shall not be merged in the delivery of the Deed. Notwithstanding
the foregoing, to the extent that a Tenant shall certify in its Estoppel
Certificate (as defined below) as to any of the matters which are contained in
the representations and warranties made by Contributor in Section 5.1(f) of this
Agreement, then Contributor's representations and warranties as to such matters
shall be of no force or effect to the extent of any conflict. Pacifica Holding
Company, a Colorado corporation; and Pacifica Holding Company, a Colorado
limited liability company (collectively, "Guarantor"); and Contributor, jointly
and severally, shall, pursuant to a separate indemnity agreement (the "Indemnity
Agreement") in the form attached hereto as Schedule 5.3, indemnify and defend
Mack- Cali and MCRLP, and to hold Mack-Cali and MCRLP 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 Mack-Cali or MCRLP by reason
of or resulting from any breach, inaccuracy, incompleteness or non- fulfillment
of the representations, warranties, covenants and agreements of Contributor
contained in this Agreement to the full extent that Contributor would otherwise
have been liable therefor under the provisions of this Agreement. The foregoing
indemnity shall be deemed to be material to MCRLP and Mack-Cali's obligation to
perform hereunder and shall survive the Closing. Notwithstanding the foregoing,
the members of Contributor shall have no liability for any loss resulting from
any breach of the foregoing representations and warranties. In addition, except
as set forth in Section 28, MCRLP shall not have a right to bring a claim
against Contributor by virtue of any of the representations or warranties being
false or misleading unless and until the aggregate damages to MCRLP and/or
Mack-Cali are reasonably expected to exceed $100,000.00, but thereafter MCRLP
and/or Mack-Cali may bring a claim against Contributor for the entire amount of
its aggregate damages.
5.4 Contributor acknowledges that it is not in a significantly
disparate bargaining position with respect to MCRLP or Mack-Cali in connection
with the transaction contemplated by this Agreement and that Contributor was
represented by legal counsel in connection with this transaction.
5.5 Mack-Cali and MCRLP each acknowledges that it has had, or will
have had, as of the Closing, sufficient time to review all materials and
information set forth in Schedule 5.5,
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and sufficient time and access to review and investigate the Property.
Notwithstanding any other provision of this Agreement, except as set forth in
Subsections 5.1(d), (e) and (f), as they relate to the Leases, the Estoppels and
the Rent Rolls, the representations and warranties of Contributor as set forth
herein or in Contributor's Closing Certificate are hereby modified to be made
true to the extent that, as of the date hereof with respect to the
representations and warranties made herein, and as of the Closing Date with
respect to the representations and warranties made by Contributor as of the
Closing Date, (i) information contained in the records made available as set
forth Schedule 5.5 no longer makes the subject representation or warranty not
true, whether or not either Mack-Cali or MCRLP has actual knowledge of such
information, or (ii) either Mack-Cali or MCRLP has knowledge that the subject
representation or warranty is untrue, or (iii) Contributor has delivered or made
available to any of the individuals described in Section 6.1(l) other written
information disclosing that the subject representation or warranty is not true,
whether or not either Mack-Cali or MCRLP has actual knowledge of such
information.
6. REPRESENTATIONS AND WARRANTIES OF MACK-CALI AND MCRLP.
6.1 In order to induce Contributor to perform as required hereunder,
Mack-Cali and MCRLP hereby jointly and severally warrant and represent the
following:
(a) (i) MCRLP 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 MCRLP
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) Mack-Cali is a duly organized and validly existing
corporation organized and in good standing under the laws of the State of
Maryland, has all requisite power and authority to execute and deliver this
Agreement and all other documents and instruments to be executed and delivered
by it hereunder, and to perform its obligations hereunder and under such other
documents and instruments in order to permit MCRLP to acquire the Property in
accordance with the terms and conditions hereof. All necessary actions of the
board of directors of Mack-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 Mack-Cali and MCRLP hereunder, when duly
executed and delivered, will be the legal, valid and binding obligation of each
of Mack-Cali and MCRLP, enforceable in accordance with the terms of this
Agreement. The performance by each of Mack-Cali and MCRLP of each of its duties
and obligations under this Agreement and the documents and
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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 Mack-Cali and MCRLP 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 Mack-Cali and MCRLP 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 Contributor Unit Holders are duly authorized and, when issued by MCRLP, will
be fully paid and non-assessable, free and clear of any mortgage, pledge, lien,
encumbrance, security interest, claim or rights of interest of any third party
of any nature whatsoever. The shares of Common Stock to be issued by Mack-Cali
upon redemption of the Contributor Units will be reserved for future listing
with the New York Stock Exchange prior to the date upon which any of the same
will be 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) MCRLP has furnished to Contributor a true and complete
copy of the OP Agreement, as amended to date.
(e) Mack-Cali has caused to be delivered to Contributor copies
of the OP Agreement. The SEC Documents were, and those additional documents
filed between the date hereof and the Closing will be, prepared and filed in
compliance with the rules and regulations promulgated by the SEC, and do not and
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein in order to make the statements
contained therein, in light of the circumstances under which they were made or
will be made, not misleading.
(f) The consolidated financial statements included in the SEC
Documents have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the period involved (except as
may be indicated in the notes thereto or, in the case of the unaudited
statements, as permitted by Form 10-Q) and present fairly (subject, in the case
of the unaudited statements, to normal, recurring year-end audit adjustments)
the consolidated financial position of Mack-Cali and its Subsidiaries at the
dates thereof and the consolidated results of operations and cash flows for the
periods then ended. For purposes of this Agreement, "Subsidiaries" shall mean
(i) any entity of which Mack-Cali (or other specified entity) shall own directly
or indirectly through a subsidiary, a nominee arrangement or otherwise (x) at
least a majority of the outstanding capital stock (or other shares of beneficial
interest), or (y) at least a majority of the partnership, joint venture or
similar interests; and (ii) any entity in which Mack-Cali (or other specified
entity) is a general partner or joint partner, including without limitation
MCRLP. "Subsidiaries" shall specifically exclude Mack-Cali Services, Inc. and
The Grove Street Urban Renewal Corp., which are the only non-qualified REIT
subsidiaries of Mack-Cali as of the date hereof.
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(g) No action, suit, claim, investigation or proceeding,
whether legal or administrative or in mediation or arbitration, is pending or,
to the best of each of Mack-Cali's and MCRLP's knowledge, threatened, at law or
in equity, against either of Mack-Cali or MCRLP before or by any court or
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality which would prevent either of Mack-Cali or
MCRLP from performing its respective obligations pursuant to this Agreement.
(h) The execution and delivery of this Agreement and the
performance by each of Mack-Cali and MCRLP 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 Mack-Cali or MCRLP, including
without limitation, the United States of America, the States of New York and New
Jersey or any political subdivision of any of the foregoing, or any decision or
ruling of any arbitrator to which Mack-Cali or MCRLP is a party or by which
Mack-Cali or MCRLP is bound or affected.
(i) (1) Mack-Cali (A) 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 ("REIT") within the meaning of Section 856 of the Internal
Revenue Code of 1986, as amended (the "Code"), (B) has complied with all
applicable provisions of the Code which would have enabled it to qualify as a
REIT for 1995 and 1996, (C) has operated, and intends to continue to operate, in
such a manner so as to enable it to qualify as a REIT for 1998 and subsequent
years, and (D) has not taken or omitted to take any action which would
reasonably be expected to cause its disqualification as a REIT, and no challenge
to its REIT status is pending or, to Mack-Cali's knowledge, threatened.
(2) Mack-Cali has timely filed with the appropriate
Governmental Authority all Tax Returns required to be filed by it or has timely
requested extensions and any such request has been granted and has not expired.
Each such Tax Return is true and correct in all material respects. All Taxes
shown as owed by Mack-Cali or any of its Subsidiaries on any Tax Return have
been paid or accrued, except for Taxes being contested in good faith and for
which adequate reserves have been established. None of Mack-Cali or any of its
Subsidiaries has executed or filed with the Internal Revenue Service or any
other taxing authority any agreement now in effect extending the period for
assessment or collection of any Tax.
(3) To its knowledge, as of the date hereof, Mack-Cali
is a "domestically-controlled" REIT within the meaning of Section 897(h)(4)(B)
of the Code.
(j) All of Mack-Cali's real property and other material assets
are owned by Mack-Cali indirectly through its ownership of MCRLP and MCRLP's
Subsidiaries.
(k) Neither Mack-Cali nor MCRLP 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 Mack-Cali's or
MCRLP's creditors, suffered the appointment of a
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receiver to take possession of all, or substantially all, of Mack-Cali's or
MCRLP's assets, suffered the attachment or other judicial seizure of all, or
substantially all, of Mack-Cali's or MCRLP'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) As used throughout this Agreement, the phrases "to
Mack-Cali's knowledge," "to the knowledge of Mack-Cali", "to the best of
Mack-Cali's knowledge", to MCRLP's knowledge," "to the knowledge of MCRLP", "to
the best of MCRLP's knowledge" or any similar derivations thereof, shall mean
the actual (not constructive) knowledge of Tim Jones, John DeBari, Daniel
Wagner, Andrew Greenspan, Roger W. Thomas and Terry Noyes, without having
undertaken any independent investigation of facts or legal issues, without
having any duty to do so, and without imputing to the aforementioned persons the
knowledge of any employee, agent, representative or affiliate of Mack-Cali,
MCRLP or of any other person or entity.
6.2 Each of Mack-Cali and MCRLP 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
Mack-Cali and MCRLP were represented by legal counsel in connection with this
transaction.
6.3 All representations and warranties made by Mack-Cali and MCRLP
in this Agreement shall survive the Closing Date for a period of eighteen (18)
months, except that the representations and warranties set forth in clauses (a)
and (b) of Section 6.1 shall survive such Closing Date for the applicable period
of the statute of limitations (unless otherwise specified herein), and shall not
be merged in the delivery of the Deed. Mack-Cali and MCRLP agree to indemnify
and defend Contributor, and to hold Contributor 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 Contributor by reason of or
resulting from any breach, inaccuracy, incompleteness or non-fulfillment of the
representations, warranties, covenants and agreements of Mack-Cali and MCRLP
contained in this Agreement. Notwithstanding the foregoing, the partners of
MCRLP and the shareholders of Mack-Cali shall have no liability for any loss
resulting from any breach of the foregoing representations and warranties. In
addition, Contributor shall not have a right to bring a claim against Mack-Cali
or MCRLP by virtue of any of the representations or warranties being false or
misleading unless and until the aggregate damages to Contributor is reasonably
expected to exceed $100,000.00, but thereafter Contributor may bring a claim
against Mack-Cali or MCRLP for the entire amount of its aggregate damages.
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INTERIM OPERATING COVENANTS OF CONTRIBUTOR.
7.1 Contributor covenants and agrees that between the date hereof
and the Closing Date (the "Interim Period"), it shall perform or observe the
following with respect to the Real Property:
(a) Contributor will complete any capital expenditure program
currently in process or anticipated to be completed. 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 Property, or renew or modify any Lease, without
MCRLP's prior written consent; provided, however that Contributor shall be
permitted to enter into new leases, renewals or modifications upon prior notice
to, but without the prior written consent of MCRLP, so long as such lease,
renewal or modification is on market terms and conditions with bona fide third
parties and is the type of transaction which Contributor currently enters into
in the ordinary course of its business.
(c) Contributor shall comply with and/or remedy all violations
of statutes, ordinances, rules, regulations, orders, codes, directives or
requirements affecting the Real Property, whether or not such violations are now
noted in the records of or have been issued by any Governmental Authorities
prior to the Closing, and the Real Property shall be conveyed free of any such
violations, including, without limitation, violations of Environmental Laws.
(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 MCRLP, unless such agreement is on market terms and
conditions with bona fide third parties and is the type of agreement which
Contributor currently enters into in the ordinary course of its business, in
which case no consent of MCRLP will be required; or
(ii) Accept the surrender of any Service Contract or
Lease, or grant any concession, rebate, allowance or free rent, except in its
ordinary course of business on market terms, with bona fide third parties and
upon prior written notice to MCRLP.
(iii) Intentionally Deleted.
(e) Contributor shall not, between the date hereof and the
Closing Date, apply any Security Deposits with respect to any Tenant in
occupancy on the Closing Date, except in its ordinary course of business.
Contributor shall provide MCRLP with an updated schedule of Security Deposits at
the Closing or the Earnout Closing.
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(f) Between the date hereof and the Closing Date, Contributor
will not renew, extend or modify any of the Service Contracts without the prior
written consent of MCRLP unless such is done by Contributor in the ordinary
course of its business and such Service Contracts contain a right to terminate
on thirty (30) days' notice with no material cost to exercise such right, in
which case no consent of MCRLP will be required.
(g) Contributor shall not remove or permit the removal of any
Personal Property located in or on the Property, except as may be required for
repair and replacement. All replacements shall be free and clear of liens and
encumbrances except to the extent the original Personal Property was so
encumbered and shall be of quality at least equal to the replaced items and
shall be deemed included in this sale, without cost or expense to MCRLP, other
than expressly provided herein.
(h) Contributor shall, upon request of MCRLP at any time after
the date hereof, assist MCRLP in its preparation of audited financial
statements, statements of income and expense, and such other documentation as
MCRLP may reasonably request, covering the period of Contributor's ownership of
the Real Property.
(i) Between the date hereof and the Closing Date, Contributor
will make all required payments under any mortgage affecting the Real Property
within any applicable grace period, but without reimbursement by MCRLP therefor.
Contributor shall also comply with all other material terms covenants and
conditions of any mortgage on the Real Property.
(j) Contributor shall not cause or permit the Real Property,
or any interest therein, to be alienated, mortgaged, licensed, encumbered or
otherwise be transferred.
(k) Contributor agrees to maintain and keep in full force and
effect the hazard, liability and casualty insurance policies it is currently
maintaining, which policies Contributor represents are sufficient 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.
(l) Contributor shall permit MCRLP 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
MCRLP hereunder shall be maintained for MCRLP's inspection at Contributor's
address as set forth in Exhibit A hereto.
(m) Contributor shall:
(i) promptly notify MCRLP of, and promptly deliver to
MCRLP, a certified true and complete copy of any notice Contributor may receive,
on or before the Closing
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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 Contributor or its
representatives, deliver to MCRLP a certified true and complete copy of all
Environmental Documents; and
(iii) timely provide MCRLP 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 MCRLP
informed of all substantive negotiations and discussions with respect to the
foregoing matters on an on-going basis.
7.2 Prior to the Closing, Contributor shall deliver to MCRLP
reviewed Property Financials as set forth in Section 5.1(v). Within thirty (30)
days after the Closing Date, Contributor shall deliver to MCRLP Property
Financials, as set forth in Section 5.1(v), through the Closing Date. The
provisions of this Section 7.2 shall survive the Closing Date.
7.3 Intentionally Deleted.
7.4 Intentionally Deleted.
7.5 Contributor and its affiliated entities will timely pay all
Taxes due and payable during the Interim Period in connection with the ownership
and/or operation of the Property (by them or any predecessor entities) or their
businesses, for which MCRLP (or any of its direct or indirect partners) could be
held directly or indirectly liable or a claim could be made against the
Property. Contributor and its affiliated entities will timely file all Tax
Returns required to be filed during the Interim Period in connection with the
ownership and/or operation of the Property (by them or any predecessor entities)
or their businesses, the non-timely filing (or non-filing) of which could result
in direct or indirect liability to MCRLP (or any of its direct or indirect
partners) or a claim against the Property. Each such Tax Return will be complete
and accurate in all respects and will be filed on a basis consistent with past
practice. A copy of all such Tax Returns shall be delivered to Mack-Cali at
least three (3) days prior to such Tax Returns being filed. The obligations set
forth in this Section 7.5 shall survive the expiration or earlier termination of
this Agreement and/or shall survive the Closing Date for the applicable period
of the statute of limitations.
8. INTENTIONALLY DELETED.
9. ESTOPPEL CERTIFICATES.
9.1 Contributor agrees to deliver to each Tenant, no later than the
date hereof, an estoppel certificate in the form annexed hereto as Exhibit 9.1
for Tenant's execution, completed to reflect Tenant's particular Lease status.
Contributor agrees to use commercially reasonable efforts
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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, Contributor shall nevertheless use commercially reasonable efforts to
obtain estoppel certificates in the form in which each Tenant is obligated to
deliver the same as provided in its Lease. Contributor agrees to deliver to
MCRLP copies of all estoppel letters received by Tenants, in the form received
by Contributor. The estoppel certificates required to be obtained pursuant to
this Section 9.1 are collectively referred to as the "Estoppel Certificates".
9.2 As a condition to the Closing, Contributor shall deliver (a) an
Estoppel Certificate from all Tenants which lease 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 at least seventy-five (75%)
percent of the square footage of the Real Property including the Tenants set
forth in Clause 9.2(a) above.
9.3 For an Estoppel Certificate to be deemed delivered for purposes
of this Agreement, it must certify that 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.
10. CLOSINGS.
10.1 (a) Closing. The consummation of the transactions contemplated
hereunder with respect to the Property (the "Closing") shall take place at the
offices of Brownstein, Hyatt, Farber & Strickland, P.C., 410 Seventeenth Street,
22nd Floor, Denver, Colorado, 80202-4437, on or about March 25, 1998 (the
"Closing Date"). Upon notice to Contributor, MCRLP may elect to accelerate the
Closing Date to a date not less than five (5) days after the date of MCRLP's
notice.
(b) Intentionally Deleted.
(c) Intentionally Deleted.
(d) Intentionally Deleted.
10.2 On the Closing Date, except as otherwise set forth in
Subsections 10.2(z) and 10.2(aa), Contributor, at its sole cost and expense,
will deliver or cause to be delivered to MCRLP the following documents, fully
executed by all parties thereto other than MCRLP or parties claiming by, through
or under MCRLP:
(a) Special Warranty Deeds (the "Deeds") with covenants in
proper statutory form for recording so as to convey to MCRLP good and marketable
title to the Land being conveyed, free and clear of all liens and encumbrances,
except the Permitted Encumbrances. The delivery of the Deeds shall also be
deemed to constitute a transfer of the Personal Property
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associated with the Land conveyed by the Deeds; the delivery of all of the Deeds
shall be deemed to constitute a transfer of the balance of the Personal Property
to MCRLP.
(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 the same.
(c) All other original documents or instruments referred to
herein, including without limitation the Service Contracts, Licenses and Permits
and Books and Records, and certified copies of the same where Contributor, using
its best efforts, is unable to deliver originals of the same.
(d) A letter to Tenants advising the Tenants of the sale
hereunder and directing that rent and other payments thereafter be sent to MCRLP
or its designee, as MCRLP shall so direct.
(e) Intentionally Deleted.
(f) Duly executed and acknowledged omnibus assignment in the
form of Exhibit 10.2(f) annexed hereto ("Omnibus Assignment").
(g) Duly executed Asset Purchase Agreement in the form of
Exhibit 10.2(g) annexed hereto.
(h) An affidavit, and such other document or instruments
required by the Title Company, executed by Contributor certifying (i) against
any work done or supplies delivered to the Real Property which might be grounds
for a materialman's or mechanic's lien under or pursuant to Colorado Lien Law,
in form sufficient to enable the Title Company to affirmatively insure MCRLP
against any such lien, (ii) that the signatures on the Deeds are sufficient to
bind Contributor and convey the Property to MCRLP, and (iii) the Rent Roll.
(i) Affidavits and other instruments, including but not
limited to all organizational documents of Contributor and Contributor's general
partners, as applicable, including operating agreements, filed copies of limited
liability certificates, articles of organization, and good standing
certificates, reasonably requested by MCRLP 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 the same.
(j) The original Estoppel Certificates.
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(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 MCRLP to realize upon the same.
(l) A certificate indicating that the representations and
warranties of Contributor made in this Agreement are true and correct as of the
Closing Date or if there have been any changes, a description thereof.
(m) A Rent Roll for each Real Property, current as of the
Closing Date, certified by Contributor as being true and correct in all material
respects.
(n) All proper instruments as shall be reasonably required for
the conveyance to MCRLP 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 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 and Improvements.
(o) In order to avoid the imposition of the withholding tax
payment pursuant to Section 1445 of the Code, a certificate which is in a form
acceptable to Mack-Cali and which is signed by the appropriate 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) All such 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 MCRLP, including but not limited to, Internal Revenue Service forms and the
declaration required to be filed pursuant to Title 39, Article 14 of the
Colorado Revised Statutes.
(q) A statement setting forth all adjustments and prorations
shown thereon.
(r) Tradenames Assignment Agreement substantially in the form
of Exhibit 10.2(r) attached hereto.
(s) Estoppel certificate addressed to MCRLP from the
mortgagees of the Mortgages in form and substance reasonably acceptable to
MCRLP.
(t) An opinion of counsel from Brownstein, Hyatt, Farber &
Strickland, P.C., substantially in the form of Exhibit 10.2(t) regarding the due
execution, delivery and enforceability of this Agreement and the foregoing
documents.
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(u) Intentionally Deleted.
(v) Duly executed and acknowledged Indemnity Agreement from
Guarantor and Contributor as set forth in Section 5.3.
(w) Intentionally Deleted.
(x) Intentionally Deleted.
(y) Such other documents as may be reasonably required by
MCRLP or as may be appropriate to effectuate the consummation of the
transactions contemplated by this Agreement.
(z) At least fifteen (15) days prior to the Closing Date, a
schedule setting forth, with respect to each item of the Property for which
Contributor Units will be received as part of the consideration: (i) those
Contributors of such item of the Property that are allocated Contributor Units
and the amount of Contributor Units so allocated to any such Contributor; (ii)
the gross fair market value of such item of the Property for purposes of
determining the gain or loss that will be recognized for federal income tax
purposes as a result of the contribution; (iii) the adjusted basis of such item
of the Property immediately prior to the contribution; (iv) the amount of cash
and Contributor Units allocated to the item of the Property; and (v) the amount
of any liability relating to such item of the Property that MCRLP will either
assume or to which such item will be subject and which does not constitute a
"qualified liability" within the meaning of Treasury Regulations Section
1.707-5(a)(6).
(aa) At least fifteen (15) days prior to the Closing Date, a
schedule setting forth: (i) any Contributor named for purposes of Section
10.2(z)(i) which is to receive less than the full amount of Contributor Units
indicated for purposes of Section 10.2(z)(i); and (ii) the names of those
persons who are to receive Contributor Units that each such Contributor would
otherwise be entitled to receive and the amount of units that any such persons
are to receive. At least fifteen (15) days prior to the Closing Date, each
Contributor to which this Section 10.2(aa) is relevant shall issue "direction
letters" to MCRLP (in the form acceptable to MCRLP), to the effect that each
such Contributor authorizes the issuance by MCRLP of Contributor Units directly
to such persons (and in such amounts) which are set forth for purposes of
Section 10.2(aa)(ii).
(bb) A letter from each applicable municipal department or
agency having jurisdiction that the Property is in compliance with the laws,
codes, rules, regulations and ordinances regarding (i) zoning, (ii) building,
(iii) health and (iv) fire, life and safety.
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(cc) A computer diskette containing any closing or other
documents executed in connection with this transaction and prepared by
Contributor or its counsel, in WordPerfect or Microsoft Word format.
(dd) All original organizational documents relating to the
Contributor, and all statements of accounts, books and records and insurance
policies.
(ee) a certificate executed by each Contributor Unit Holder
and each Contributor receiving Contributor Units, substantially in the form of
Exhibit 10.2(ee).
10.3 On the Closing Date, Mack-Cali and MCRLP, at their sole cost
and expense, will deliver or cause to be delivered to Contributor the following
documents, fully executed by all parties thereto other than Contributor or
parties claiming by, through or under Contributor:
(a) The Cash Payment, net of adjustments and prorations.
(b) The Permanent Certificates representing, in the aggregate,
the Contributor Units.
(c) Intentionally Deleted.
(d) Duly executed and acknowledged Omnibus Assignment in the
form of Exhibit 10.2(f) annexed hereto.
(e) A certificate indicating that the representations and
warranties of Mack-Cali and MCRLP made in this Agreement are true and correct as
of the Closing Date or if there have been any changes, a description thereof.
(f) Affidavits and other instruments, including but not
limited to all organizational documents of Mack-Cali and MCRLP including limited
partnership agreements, filed copies of limited partnership certificates,
articles of organization, and good standing certificates, reasonably requested
by Contributor evidencing the power and authority of Mack-Cali and MCRLP to
enter into this Agreement and any documents to be delivered hereunder, and the
enforceability of the same.
(g) A Registration Rights Agreement substantially in the form
of Exhibit 10.3(g).
(h) Amendment to OP Agreement substantially in the form of
Exhibit 10.3(h) reflecting admission of the Contributor Unit Holders as limited
partners.
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(i) Tradenames Assignment Agreement substantially in the form
of Exhibit 10.2(r).
(j) Intentionally Deleted.
(k) Such other documents as may be reasonably required or
appropriate to effectuate the consummation of the transactions contemplated by
this Agreement.
10.4 Contributor shall pay for the premium charges and costs for
title insurance policies (but not any endorsements to such policies required by
Mack-Cali); all survey costs; all costs incurred to repay or satisfy any and all
liens; all administrative and legal costs associated with the assumption by
MCRLP of the mortgages to which this transaction is subject (other than the fees
or charges payable in connection with the mortgages being paid-off by Mack-Cali
as herein provided); all leasing commissions due to Tenants in connection with
the initial terms of their respective Leases; all costs of tenant improvement
concessions due to Tenants in connection with the initial terms of their
respective Leases; and all customary prorations and apportionments. Mack- Cali
shall pay for the costs of all customary documentary and recording fees;
(including, without limitation, the "documentary fee" imposed by Article 13 of
the Colorado Revised Statutes); the cost of any endorsements to its title
insurance policies; all due diligence investigations costs (including, without
limitation, the cost of all Phase I Reports for the Property, which
environmental assessment reports shall be dated no more than thirty (30) days
prior to the Closing Date); any fees or charges payable in connection with the
mortgages being paid-off by Mack-Cali as herein provided and all customary
prorations and apportionments. Each party shall be responsible for its own
attorney's fees. The provisions of this Section 10.4 shall survive the Closing.
10.5 The Closing shall be consummated without compliance with bulk
sales laws. If by reason of any applicable bulk sales law, any claims are
asserted by creditors of 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 MCRLP (and its
respective directors, officers, employees, affiliates, successors and assigns)
from and against all losses or liabilities, if any, based upon, arising out of
or otherwise in respect of the failure to comply with such bulk sales laws.
10.6 Mack-Cali and MCRLP acknowledge and agree that, except as set
forth in this Agreement, MCRLP is acquiring the Property in its "as is"
condition "subject to all faults" and specifically and expressly without any
warranties, representations or guarantees, either express or implied, of any
kind, nature, or type whatsoever from or on behalf of Contributor. Mack-Cali and
MCRLP acknowledge that, except as set forth in this Agreement, and except for
documents, reports and information related to the environmental integrity of the
Real Property, neither Mack-Cali nor MCRLP has relied and is not relying on any
information, document, reports, sales brochure or other literature, maps or
sketches, financial information, projections, pro formas or statements, that may
have been given by or made by or on behalf of Contributor with respect to the
Property. MCRLP
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and Mack-Cali further acknowledge that all materials relating to the Property
which have been provided by Contributor, including but not limited to, the Phase
I Reports, have been provided without any warranty or representation, expressed
or implied as to their content, suitability for any purpose, accuracy,
truthfulness or completeness and, except as expressly provided herein, neither
MCRLP nor Mack-Cali shall have any recourse against Contributor or its counsel,
advisors, agents, officers, directors or employees for any information in the
event of any errors therein or omissions therefrom.
Contributor does not warrant or make any representation, express or
implied, as to the merchantability, quantity, quality, condition, suitability or
fitness of the Property for any purpose whatsoever, including, without
limitation, its compliance with applicable building codes and ordinances, zoning
laws, environmental laws including, without limitation, the Clean Air Act,
CERCLA and the Super Fund Amendments and Reauthorization Act (SARA), the
Americans with Disabilities Act, and any other federal, state or local statutes,
codes or ordinances. MCRLP also acknowledges and agrees that (i) the
Contributor's representations and warranties set forth in Section 5 and (ii) the
provisions in this Agreement for delivery of existing Phase I Reports and
inspection and investigation of the Property are adequate to enable MCRLP to
make MCRLP's own determination with respect to the suitability or fitness of the
Property, including, without limitation, its compliance with applicable building
codes and ordinances, zoning laws, environmental laws including, without
limitation, the Clean Air Act, CERCLA and the SARA, the Americans with
Disabilities Act, and any other federal, state or local statutes, codes or
ordinances.
Except to the extent (a) caused by a breach of any of Contributors'
representations hereunder; (b) related to claims by or liabilities to third
parties unrelated to Mack-Cali or MCRLP; or (c) as otherwise expressly set forth
herein, including, without limitation, as indemnified pursuant to the Indemnity
Agreement, MCRLP and Mack-Cali, for themselves and their successors and assigns,
hereby release each of the Contributors, and their agents, employees, partners,
officers, directors, members, managers, contractors, consultants and
representatives from, and waive any and all causes of action or claims against
any of such persons for (i) any and all liability attributable to any physical
condition of or at the Property, including, without limitation, the presence on,
under or about the Property of any materials the release or storage of which is
regulated by law; (ii) any and all liability resulting from the failure of the
Property to comply with any applicable laws; and (iii) any liabilities, damages
or injury arising from, connected with or otherwise caused by statements,
opinions or information obtained from any of such persons with respect to the
Property.
ADJUSTMENTS.
11.1 The following items under (a) through (g) with respect to the
Real Property are to be apportioned as of midnight on the date preceding the
Closing:
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(a) Rents, escalation charges and percentage rents payable by
Tenants as and when collected. All moneys received from Tenants from and after
the Closing shall belong to MCRLP and shall be applied by MCRLP to current rents
and other charges under the Leases. After application of such moneys to current
rents and charges, MCRLP agrees to remit to Contributor any excess amounts paid
by a Tenant to the extent that such Tenant was in arrears in the payment of rent
prior to the Closing.
(b) A cashier's or certified check or wire transfer to the
order of MCRLP in the amount of all cash Security Deposits and any prepaid
rents, together with interest required to be paid thereon. At the election of
MCRLP, such amount may be allotted to MCRLP as a credit against the Cash
Payment.
(c) Utility charges payable by Contributor, including without
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 ten (10) days prior to the Closing Date.
(d) Amounts payable under the Service Contracts other than
those Service Contracts which MCRLP has elected not to assume.
(e) 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.
(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 fifteen (15) days prior to the Closing by Contributor's supplier.
(g) Intentionally Deleted.
11.2 Intentionally Deleted.
11.3 At the Closing, Contributor shall deliver to MCRLP a list of
additional rent, however characterized, under all Leases, 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 MCRLP of the Additional Rents billed to Tenants, and the
amounts actually incurred for calendar year 1997, Contributor and MCRLP shall be
liable for overpayments of Additional Rents, and shall be entitled to 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. Notwithstanding the foregoing,
the calculation of real estate
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taxes and the collection of Additional Rents from Tenants attributable to such
real estate taxes, as reflected on the closing statement related hereto, shall
be final as of the Closing Date.
11.4 All amounts due and owing under the Mortgages other than the
outstanding principal balance thereof, including by way of example accrued and
unpaid interest, deferred interest, late charges, default interest, prepayment
fees or penalties, and other fees and charges, shall be paid by Contributor on
or before the Closing. Notwithstanding any language to the contrary in this
Agreement, from and after the Closing, MCRLP shall be entitled to any payment by
Evolving Systems, Inc. of any or all of the Allowance Repayment (as defined in
the Lease).
11.5 If, on the Closing Date, the Property or any part thereof shall
be or shall have been affected by an assessment or assessments which are or may
become payable in annual installments, all the unpaid installments of any such
assessment due and payable on or prior to the Closing Date shall be paid and
discharged by Contributor on the Closing Date.
11.6 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 Colorado.
11.7 Any errors in calculations or adjustments shall be corrected or
adjusted as soon as practicable after the Closing.
11.8 The provisions of this Section 11 shall survive the Closing
Date.
12. CONDITIONS PRECEDENT TO CLOSING.
12.1 The obligations of Contributor to deliver title to the Real
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 MCRLP and
Mack-Cali herein shall be true and correct in all material respects with the
same force and effect as though such representations and warranties had been
made on and as of the Closing Date; provided, however, that a failure of any
representations or warranties to be true and correct in all material respects
shall not give rise to a claim by Contributor hereunder so long as such matters
do not have a material adverse effect on the transactions contemplated herein.
(b) MCRLP and Mack-Cali shall have executed and delivered to
Contributor all of the documents provided herein for said delivery.
(c) Intentionally Deleted.
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(d) Mack-Cali and MCRLP shall have performed all covenants and
obligations undertaken by Mack-Cali and MCRLP herein in all material respects
and complied with all material conditions required by this Agreement to be
performed or complied with by them on or before the Closing Date.
12.2 The obligations of Mack-Cali and MCRLP to accept title to the
Property and Mack-Cali's and MCRLP's obligation to perform the other covenants
and obligations to be performed by Mack-Cali and MCRLP 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 Mack-Cali or MCRLP):
(a) Subject to Section 5.5(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. For the purposes of the
Closing condition described in this Section 12.2(a), any limitation to the
knowledge, best knowledge, or actual knowledge in any representation, warranty,
covenant or agreement made by Contributor herein shall be inapplicable.
(b) Contributor shall have performed all covenants and
obligations undertaken by Contributor 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
MCRLP a Title Policy meeting the requirements set forth in Section 4 hereof for
an "insurable title".
(d) The Real Property shall be in compliance with all
Environmental Laws.
13. INTENTIONALLY DELETED.
LEASING COMMISSIONS AND TENANT IMPROVEMENT OBLIGATIONS.
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 Contributor. MCRLP shall be
credited at Closing as set forth on Schedules 5.1(f) and 5.1(m) respectively
with respect to certain tenant improvement and leasing commission obligations,
but Contributors shall remain liable for any amounts due and owing in excess of
such credits. All leasing commissions on account of extensions or renewals of
Leases made after the Closing Date shall be paid by MCRLP. All tenant
improvements obligations shall be satisfied prior to the Closing Date. The
provisions of this Section shall survive the Closing.
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15. ASSIGNMENT.
This Agreement may not be assigned by Mack-Cali or MCRLP except to a
directly or indirectly wholly-owned subsidiary or subsidiaries of Mack-Cali or
MCRLP, 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 Mack-Cali or MCRLP shall be
deemed null and void and of no force and effect. Notwithstanding anything to the
contrary contained herein, Mack-Cali or MCRLP may assign the right to purchase
individual portions of the Property to various entities, provided that each of
such entities is a Permitted Assignee. A copy of any assignment permitted
hereunder, together with an agreement of the assignee assuming all of the terms
and conditions of this Agreement to be performed by Mack-Cali or MCRLP with
respect to the portion of the Real Property, in form reasonably satisfactory to
counsel for Contributor, shall be delivered to the attorneys for Contributor
prior to the Closing, and in any event, no such assignment shall relieve
Mack-Cali and MCRLP from their obligations under this Agreement.
16. BROKER.
Mack-Cali, MCRLP, and Contributor represent that, with the exception
of Sonnenblick Goldman Ltd. and Pacifica Holding Company LLC (collectively,
"Brokers") 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 they may sustain, incur or
be exposed to by reason of any breach of the foregoing representation and
warranty. Notwithstanding the foregoing, Contributor shall pay in full any
commission, fee or other compensation due the Brokers pursuant to separate
agreements, and Guarantor and Contributor agree to indemnify, defend and hold
MCRLP and Mack-Cali harmless from and against any and all loss, cost, damage,
liability, or expense, including reasonable attorneys' fees, which MCRLP or
Mack-Cali may sustain, incur or be exposed to by reason of Contributor's failure
to pay in full the Brokers pursuant to such separate agreements. The provisions
of this Section shall survive the Closing and/or other termination of this
Agreement.
17. CASUALTY LOSS.
17.1 Contributor shall continue to maintain, in all material
respects, the fire and extended coverage insurance policies with respect to the
Property (the "Insurance Policies") which are currently in effect, through the
date that said coverage currently expires, which obligation shall survive the
Closing.
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17.2 If at any time prior to the Closing Date, all or any portion of
the Property is destroyed or damaged as a result of fire or any other casualty
(a "Casualty"), Contributor shall promptly give written notice ("Casualty
Notice") thereof to MCRLP. Within ten (10) days after the receipt of the
Casualty Notice, MCRLP and Mack-Cali shall have the right, at its sole option,
to terminate this Agreement with respect to said Property by written notice to
Contributor. Notwithstanding the foregoing, MCRLP and Mack-Cali shall not have
the right to terminate this Agreement if (a) Contributor's insurance fully
covers the damage resulting from the Casualty; and (b) the proceeds of any
insurance, together with a credit equal to Contributor's deductible under the
Insurance Policies, shall be paid to MCRLP and Mack-Cali at the time of the
Closing; and (c) all unpaid claims and rights in connection with losses to the
Property shall be assigned to MCRLP and Mack-Cali at the Closing without in any
manner affecting the Exchange Consideration hereunder.
17.3 If the Property is the subject of a Casualty but MCRLP or
Mack-Cali does not terminate this Agreement pursuant to the provisions of this
Section, then Contributor shall, prior to the Closing Date, cause all temporary
repairs to be made to the Property as shall be required to prevent further
deterioration and damage to the Property and to protect public health and
safety; provided, however, that any such repairs shall first be approved by
MCRLP or Mack-Cali. Contributor shall have the right to be reimbursed from the
proceeds of any insurance with respect to the Property for the cost of such
temporary repairs.
18. CONDEMNATION.
In the event of a material taking (as defined in this Section 18),
MCRLP and Mack- Cali shall have the right, at its sole option, to either (a)
terminate this Agreement by giving Contributor written notice to such effect at
any time after its receipt of written notification of any such occurrence, or
(b) accept title to the remainder of the Property without reduction of any
consideration given hereunder. Should MCRLP or Mack-Cali so terminate this
Agreement in accordance with this Section, neither party shall have any further
liability or obligations to the other. In the event MCRLP or Mack-Cali shall not
elect to cancel this Agreement, Contributor shall, subject to the rights of the
holder of any existing mortgage, assign all proceeds of such taking to MCRLP or
Mack-Cali, and the same shall be MCRLP's or Mack-Cali's sole property, and MCRLP
or Mack-Cali shall have the sole right to settle any claim in connection with
the Property. The term "material taking" shall be defined to mean the
institution of any proceedings, judicial, administrative or otherwise which
involve (a) the taking of a portion of Real Property such that ingress and
egress to such Real Property is impaired, (b) the taking of a portion of the
parking spaces of a Real Property such that after such taking the Real Property
will not be in compliance with local zoning regulations regarding adequate
parking, or (c) the taking of any part of a Building.
19. TRANSFER RESTRICTIONS.
19.1 Contributor hereby agrees that the Contributor Units may not be
sold, assigned, transferred, pledged, encumbered or in any manner disposed of
(collectively,
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"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 19, or (ii) publicly (subject to the
restrictions of the Act and the rules and regulations promulgated thereunder) in
trading blocks of 150,000 Common Stock shares in any single day. Notwithstanding
anything herein to the contrary, the provisions of this Section 19 shall not
apply to (i) pledges or encumbrances of all or a portion of the Contributor
Units to an institutional lender, or (ii) Transfers of all or any portion of the
Contributor Units to permitted transferees as set forth in the OP Agreement (the
"Permitted Transferees"). Any holder of Contributor Units pursuant to (i) or
(ii) of the preceding sentence shall be subject to the terms and conditions of
the OP Agreement.
19.2 If any of the Contributor Unit Holders, or any of their
Permitted Transferees (each a "Seller") 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 Seller shall
not sell, transfer, or otherwise dispose of (the "Proposed Disposition") such
Units or Underlying Shares (the "Disposition Securities") to a third party (the
"Purchaser"), unless prior to such Proposed Disposition, such Seller shall have
promptly reduced the terms and conditions, if any, of the Proposed Disposition
to a reasonably detailed writing and shall have delivered written notice (the
"Disposition Notice") of such Proposed Disposition to MCRLP. The Disposition
Notice 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.
19.3 Mack-Cali shall not sell the Property within four (4) years
from the date of the Closing (the "Restricted Period") without the prior written
consent of Contributor, other than (1) in connection with a transaction which
does not result in recognition of gain by Pacifica; (2) a sale of any of the
Property set forth in Schedule 19.3 hereto; (3) as determined by the Board of
Directors of Mack-Cali (the "Board") as necessary to satisfy any material
monetary default on any mortgage secured by the Property; (4) as determined by
the Board as necessary to satisfy any material, unsecured debt, judgment or
liability of Mack-Cali when the same becomes due (at maturity or otherwise); (5)
in connection with the sale of all or substantially all of the properties owned
by Mack-Cali under such terms and conditions which the Board, in its sole
judgment, determines to be in the best interests of Mack-Cali and its public
stockholders; and/or (6) sales of the Property which do not result in material
and adverse tax consequences for Pacifica. Mack-Cali may dispose of any or all
of the Property in its sole discretion, and without the consent of Contributor,
upon the expiration of the Restricted Period. Notwithstanding any of the
foregoing language to the contrary, Mack-Cali shall not distribute the Property
for a period of seven (7) years if the distribution of such Property would
result in the recognition of income by Contributor pursuant to Sections
704(c)(1)(B) or 737 of the Code, except as otherwise permitted in clauses (1)
through (7) above.
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20. INTENTIONALLY DELETED.
21. TAX MATTERS.
21.1 (a) Contributor will timely pay or provide for the payment of
all Taxes which are attributable to all Pre-Closing Tax Periods, but which are
not due and payable until after the Closing Date in connection with the
ownership and/or operation of the Property (by them or any predecessor entities)
or their businesses for which either MCRLP (or any of its direct or indirect
partners) could be held directly or indirectly liable or a claim could be made
against the Property. To the extent allowed by law, Contributor will timely file
all Tax Returns which are required to be filed in connection with the ownership
and/or operation of the Property (by them or any predecessor entities) or their
businesses for all Pre-Closing Tax Periods but which are not required to be
filed until after the Closing Date and the non-timely filing (or non-filing) of
which could result in direct or indirect liability to MCRLP (or any of its
direct or indirect partners) or a claim against the Property. Each such Tax
Return will be complete and accurate. Contributor will provide Mack-Cali with a
copy of all such Tax Returns promptly after such Tax Returns are filed. All
Taxes imposed in connection with the ownership and/or operation of the Property
during any taxable periods which begin on or before the Closing Date and end
after the Closing Date ("Straddle Periods" or "Straddle Period") shall be
allocated between Contributor and MCRLP in accordance with their respective
periods of ownership of the Property. Contributor will timely pay all Taxes with
respect to their businesses for any Straddle Period (and any other taxable
period) for which either MCRLP (or any of its direct to indirect partners) could
be held directly or indirectly liable or a claim could be made against the
Property.
(b) Contributor shall provide Mack-Cali with a copy of its
Federal income tax returns which reflect (in whole or in part) any of the
transactions contemplated hereunder and which reflect (in whole or in part) any
of the gain or loss recognized in respect of such transactions.
21.2 Contributor shall pay any and all Taxes including without
limitation, Taxes imposed with respect to the operation of its business and the
ownership or operation of the Property for all taxable periods (or portions
thereof) ending on or prior to the Closing imposed upon MCRLP based, in whole or
in part, upon the failure to comply with the sales laws.
21.3 Contributor is hereby authorized to continue the proceeding or
proceedings now pending for the reduction of the assessed valuation of the
Property as set forth on Schedule 21.3 and to litigate or settle the same in
Contributor's discretion. MCRLP is hereby authorized by Contributor, in MCRLP's
sole discretion, to file any applicable proceeding for the 1997 fiscal year for
the reduction of the assessed valuation of the Property. The net refund of
taxes, if any, for any tax year for which Contributor or MCRLP shall be entitled
to share in the refund shall be divided between Contributor and MCRLP in
accordance with the apportionment of taxes pursuant to the provisions hereof.
All expenses in connection therewith, including counsel fees, shall be borne by
Contributor and MCRLP in proportion to their ownership period of the asset in
question.
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21.4 For purposes of this Agreement:
(a) "Taxes" or "Tax" 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.
(b) "Tax Returns" or "Tax Return" means all original and
amended Federal, state, local and foreign tax returns, declarations, statements,
reports, schedules, forms, information returns and other filings relating to
Taxes.
(c) "Audits" or "Audit" means any audit, assessment of Taxes,
any other examination or claim by any Governmental Authority, judicial,
administrative or other proceeding or litigation (including any appeal of any
such judicial, administrative or other proceeding or litigation) relating to
Taxes and/or Tax Returns.
21.5 The provisions of this Section shall survive the Closing Date.
22. PUBLICATION.
22.1 MCRLP shall have the exclusive right to make such public
announcements or filings with respect to the exchange as MCRLP may deem
reasonably prudent and, upon advice of counsel, as may be necessary or required
by law.
23. REMEDIES.
23.1 If the conditions set forth in Section 12.2 with respect to the
Closing have been satisfied (unless the failure or inability to be so satisfied
is due to Mack-Cali or MCRLP) and if MCRLP is not ready, willing and able to
perform its obligations hereunder on the Closing Date, or in the event of a
material default of MCRLP or Mack-Cali or MCRLP's or Mack-Cali's material
failure to comply with any material representation, warranty, covenant or
agreement set forth herein with respect to the Closing, then Contributor shall
have the right as its sole and exclusive remedy to either (i) terminate this
Agreement upon written notice to MCRLP, in which event neither party shall
thereafter have any further obligations under this Agreement, except those which
expressly survive the termination hereof; or (ii) maintain an action for either
(A) specific performance, or (B) monetary damages.
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23.2 If the conditions set forth in Section 12.1 have been satisfied
(unless the failure or inability to be so satisfied is due to Contributor), and
if Contributor is not ready, willing and able to perform its obligations
hereunder on the Closing Date, or in the event of any material default on the
part of Contributor, or Contributor's failure to comply with any material
representation, warranty, covenant or agreement set forth herein, MCRLP shall be
entitled to either (i) terminate this Agreement upon notice to Contributor
following which neither party shall thereafter have any further obligations
under this Agreement, except those which expressly survive the termination
hereof; or (ii) commence an action against Contributor seeking either (A)
monetary damages, or (B) specific performance of Contributor's obligations under
this Agreement.
23.3 The acceptance of the Deed by MCRLP shall be deemed a full
performance and discharge of every agreement and obligation of Contributor to be
performed under this Agreement, except those, if any, which are specifically
stated in this Agreement to survive the Closing.
24. INTENTIONALLY DELETED.
25. 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 Mack-Cali: c/o Mack-Cali Realty Corporation
or MCRLP 11 Commerce Drive
Cranford, New Jersey 07016
Attn: Roger W. Thomas, Esq.
(908) 272-8000 (tele.)
(908) 272-6755 (fax)
with a copy to: Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attn: Wayne B. Heicklen, Esq.
(212) 326-0425 (tele.)
(212) 326-0806 (fax)
If to Contributor: Pacifica Holding Company, LLC
5975 South Quebec Street, Suite 100
Englewood, Colorado 80111
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Attn: Mr. Steven Leonard
(303) 220-5565 (tele.)
(303) 220-5585 (fax)
with a copy to: Brownstein, Hyatt, et al.
410 17th Street, 22nd Floor
Denver, Colorado 80202
Attn: Edward Barad, Esq.
(303) 534-6335 (tele.)
(303) 623-1956 (fax)
or to such other address as either party may from time to time designate by
written notice to the other or to the Escrow Agent. Notices given by (i)
overnight delivery service as aforesaid shall be deemed received and effective
on the first business day following such dispatch, and (ii) telecopy or fax
machine shall be deemed given at the time and on the date of machine transmittal
provided the same is sent prior to 4:00 p.m. Eastern Time 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.
26. DEPRECIATION METHOD.
Mack-Cali, as the general partner of MCRLP, covenants and agrees
that MCRLP and its affiliates will use the "traditional method with curative
allocations" (as defined in Treasury Regulations Section 1.704-3(c)) of
allocating income, gain, loss and deduction to account for the variation between
the fair market value and adjusted basis of the Property for federal income tax
purposes with respect to (i) the contribution of the Property, and (ii) any
revaluation of the Property in accordance with the provisions of Treasury
Regulations Sections 1.704-1(b)(2)(iv)(f), 1.704- 1(b)(2)(iv)(g) and
1.704-3(a)(6).
27. MISCELLANEOUS.
27.1 Intentionally Deleted.
27.2 This Agreement constitutes the entire agreement between the
parties and incorporates and supersedes all prior negotiations and discussions
between the parties. This Agreement shall be binding upon and inure solely to
the benefit of each party hereto and their successors and assigns, and nothing
in the Agreement express or implied, is intended to confer upon any other person
any rights or remedies of any nature whatsoever under or by reason of this
Agreement.
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27.3 This Agreement cannot be amended, waived or terminated orally,
but only by an agreement in writing signed by the party to be charged.
27.4 This Agreement shall be interpreted and governed by the laws of
the State of Colorado, without regard to conflicts of laws principles, and shall
be binding upon the parties hereto and their respective successors and assigns.
27.5 The caption headings in this Agreement are for convenience only
and are not intended to be part of this Agreement and shall not be construed to
modify, explain or alter any of the terms, covenants or conditions herein
contained. The, feminine or masculine gender, when used herein, shall each
include the other gender and the use of the singular shall include the plural.
27.6 If any term, covenant or condition of this Agreement is held to
be invalid, illegal or unenforceable in any respect, this Agreement shall be
construed without such provision.
27.7 Each party shall, from time to time, execute, acknowledge and
deliver to the other party 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 Contributor and MCRLP or Mack-Cali. 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, MCRLP, Mack-Cali or the party whose counsel
drafted this Agreement.
27.8 This Agreement shall not be effective or binding until such
time as it has been executed and delivered by all parties hereto. This Agreement
may be executed by the parties hereto in counterparts, all of which together
shall constitute a single Agreement.
27.9 All references herein to any Section, Exhibit, or Schedule
shall be to the Sections of this Agreement and to the Exhibits and Schedules
annexed hereto unless the context clearly dictates otherwise. All of the
Exhibits and Schedules annexed hereto are, by this reference, incorporated
herein.
27.10 In the event that Contributor and MCRLP or Mack-Cali enter
into litigation or alternative dispute resolution in connection with this
Agreement or the transaction contemplated herein, the non-prevailing party in
such litigation or alternative dispute resolution shall be responsible for the
payment of all expenses and reasonable attorneys' fees incurred by the
prevailing party.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE.]
278
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement"), dated this 25th day of
March, 1998, among Mack-Cali Realty Corporation, a Maryland corporation,
Mack-Cali Realty, L.P., a Delaware limited partnership (collectively,
"Mack-Cali"), Apollo Real Estate Investment Fund II, L.P., a Delaware limited
partnership ("Apollo"), Pacifica Holding Company, a Colorado limited liability
company ("Pacifica LLC") and Pacifica Holding Company, a Colorado corporation
("Pacifica"; and, together with Apollo and Pacifica LLC, collectively, the
"Indemnitors"). Unless otherwise defined herein, capitalized terms contained
herein shall have the meanings set forth in the Contribution and Exchange
Agreements (as defined below).
W I T N E S S E T H:
WHEREAS, as set forth on Schedule I hereof, Mack-Cali, the Indemnitors,
et. al., have entered into the Contribution and Exchange Agreements set forth on
Schedule I hereof, dated as of March 25, 1998 and the other documents and
instruments executed and delivered in connection therewith including, without
limitation, the Assignment and Assumption of Leases, the Omnibus Assignment of
Interests, and the Asset Purchase Agreement (such Contribution and Exchange
Agreements, together with such other documents and instruments, are hereinafter
collectively called the "Contribution and Exchange Agreements") pursuant to
which, among other things, Mack-Cali, the Indemnitors and the other Contributors
listed therein agreed to contribute and exchange certain entity interests
("Contributed Interests") and real property identified therein (the
"Transaction");
WHEREAS, pursuant to Section 5.3 of the Contribution and Exchange
Agreements, the Indemnitors have agreed to indemnify Mack-Cali with respect to
certain claims that may arise as a result of the Transaction;
NOW, THEREFORE, for ten dollars ($10.00) the premises contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby conclusively acknowledged, the parties hereto, intending to be legally
bound, mutually agree as follows:
1. Agreement to Indemnify. From and after the Closing, and subject to the
terms and conditions of this Agreement, the Indemnitors jointly and severally
covenant and agree to indemnify, defend and hold harmless Mack-Cali, and any
other Person controlling, controlled by or under common control with Mack-Cali,
including any officer, director, stockholder, partner, member, employee, agent
or representative of any of them (a "Mack-Cali Affiliate"), from and against all
claims, judgments, assessments, losses, damages, liabilities, costs and
expenses, including without limitation interest, penalties and reasonable fees
and expenses of legal counsel chosen by Mack-Cali or a Mack-Cali Affiliate
(collectively, "Damages"), imposed upon or incurred by Mack- Cali, or any
Mack-Cali Affiliate arising out of or in connection with or resulting from any
and all
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claims or threatened claims (collectively, "Claims") relating to the following:
(i) the fairness, appropriateness, authority and legal sufficiency of the
allocation of the Exchange Consideration and the Units amongst the Contributors
and their partners under the Contribution and Exchange Agreements, which
allocation has been determined by the Indemnitors and the Contributors in their
sole discretion immediately preceding the Closing; (ii) the distribution or
allocation of any of the Units, and/or cash received by any Contributor at the
Closing or to such entity's partners, shareholders, members, beneficiaries or
other individuals or entities having a legal or beneficial ownership interest in
such entity and/or the appropriateness or legal sufficiency of any such
distribution or allocation; (iii) with regard to any Property conveyed to
Mack-Cali by assignment of Contributed Interests, any failure to convey to
Mack-Cali one hundred percent (100%) of the Contributed entities comprised of
such Contributed Interests; (iv) with regard to any Property conveyed to
Mack-Cali, any failure to obtain any necessary partner or member consent to such
transfer and/or assignment; (v) any breach of the representations and warranties
of the Contributors, Apollo and other Property owners set forth in the
Contribution and Exchange Agreements to the extent they would be liable for such
breach under said agreements; and/or (vi) with respect to the Contributed
Interests and/or the Property, any direct or indirect indebtedness, liability,
claim or loss that accrued prior to Closing, to the extent Contributors would be
liable for the same under the Contribution and Exchange Agreements, whether
known or unknown, fixed or unfixed, choate or inchoate, liquidated or
unliquidated, secured or unsecured, accrued, absolute, contingent or otherwise,
whether or not of a kind required by GAAP to be set forth on the Property
Financials or in the notes thereto, including, without limitation, indebtedness
for borrowed money (collectively, "Liabilities"), unless such Liabilities were
fully and accurately reflected on a schedule to the Contribution and Exchange
Agreements and/or the Property Financials and expressly approved by Mack-Cali.
2. Survival. Notwithstanding anything to the contrary contained in the
Contribution and Exchange Agreements, the provisions of this Agreement shall
survive until such time as any applicable statute of limitation for any such
Claims have expired. This Agreement shall be independent of, and in addition to,
the provisions relating to indemnification contained in the Contribution and
Exchange Agreements. The indemnification obligations set forth in this Agreement
shall be absolute and unconditional.
The liability of the Indemnitors hereunder shall in no way be affected by
(a) the release or discharge of the Indemnitors in any creditors' receivership,
bankruptcy or other similar proceedings, or (b) the impairment or modification
of the liability of any of the Indemnitors or their respective estates in
bankruptcy from the operation of any present or future provision of Title 11 of
the United States Code or any other statute or from the action of any court
having jurisdiction over any of the Indemnitors or their respective estates.
Each of the Indemnitors waives any right or claim of right to cause a
marshaling of the respective assets of Indemnitors before Mack-Cali may proceed
against any of the Indemnitors or to cause Mack-Cali to proceed in any
particular order against the Indemnitors.
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3. General Procedures. The provisions of Section 1 are expressly subject
to the following: Mack-Cali shall give notice to the Indemnitors with reasonable
promptness upon becoming aware of the Claims or other facts upon which a claim
for indemnification will be based (provided, however, no delay by Mack-Cali in
exercising any of its rights or remedies under this Agreement shall operate as a
waiver of any such right, power or privilege, except to the extent such delay
materially prejudices the Contributor's ability to successfully defend the
matter giving rise to the indemnification Claims); the notice shall set forth
such information with respect thereto as is then reasonably available to
Mack-Cali. The Indemnitors shall have the right to undertake the defense of any
such Claims asserted by a third party with counsel reasonably satisfactory to
Mack-Cali and Mack-Cali shall cooperate at the Indemnitors' reasonable expense
in such defense and make available all records and materials reasonably
requested by the Indemnitors in connection therewith. In any event, Mack-Cali
shall be entitled to participate in such defense, but shall not be entitled to
indemnification with respect to the costs and expenses of such defense if the
Indemnitors shall have diligently assumed the defense of the Claims; provided,
that, if in the opinion of counsel to Mack- Cali, the use of the same counsel to
represent the Indemnitors and Mack-Cali would present a conflict of interest,
Mack-Cali may employ its own counsel at the Indemnitors' expense. In the event
the Indemnitors decide not to or do not promptly undertake the defense of any
such Claims, Mack- Cali shall be entitled to indemnification with respect to all
reasonable costs and expenses of such defense (including reasonable attorneys'
fees, costs and expenses). Any Claims to which the Indemnitors have undertaken
to defend under this Section 3 shall not, without the written consent of
Mack-Cali, be settled or compromised nor shall any consent to entry of money
judgment be agreed to; provided, however, and notwithstanding anything to the
contrary contained in this Agreement, the Indemnitors may settle any Claims
without the consent of Mack-Cali, but only if such settlement (a) requires only
the payment of monetary damages that are paid in full by the Indemnitors, and
(b) includes as an unconditional term thereof, the release by the claimant or
the plaintiff of Mack-Cali from all liability arising from the events which
allegedly gave rise to such Claims. The Indemnitors shall not be liable for any
Claims settled by Mack-Cali without their written consent (for purposes of this
Agreement, the consent of any of the Indemnitors shall be deemed to be the
consent of all of the Indemnitors).
4. Remedies Cumulative. Except as otherwise provided herein, the remedies
provided herein shall be cumulative and shall not preclude the assertion by any
party hereto of any other rights or the seeking of any other remedies against
any other party hereto.
1. Notices: 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 Mack-Cali: c/o Mack-Cali Realty Corporation
11 Commerce Drive
363
<PAGE>
Cranford, New Jersey 07016
Attn: Roger W. Thomas, Esq.
(908) 272-8000 (tele.)
(908) 272-6755 (fax)
with a copy to: Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attn: Wayne B. Heicklen, Esq.
(212) 326-0425 (tele.)
(212) 326-0806 (fax)
If to the Indemnitors: Pacifica Holding Company, LLC
5975 S. Quebec Street, Suite 100
Englewood, Colorado 80111
Attn: Mr. Steve Leonard
(303) 721-7600 (tele.)
(303) 721-1122 (fax)
Apollo Real Estate Advisors, L.P.
1301 Avenue of the Americas, 38th Floor
New York, New York 10019
Attn: Mr. Richard Mack
Mr. Leigh Neibart
(212) 261-4045 (tele.)
(212) 261-4060 (fax)
Pacifica Holding Company, a Colorado
corporation
5975 S. Quebec Street, Suite 100
Englewood, Colorado 80111
Attn: Mr. Steve Leonard
(303) 721-7600 (tele.)
(303) 721-1122 (fax)
with a copy to: Brownstein, Hyatt, et al.
410 17th Street, 22nd Floor
Denver, Colorado 80202
Attn: Edward Barad, Esq.
(303) 534-6335 (tele.)
(303) 623-1956 (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
364
<PAGE>
received and effective on the first business day following such dispatch and
(ii) telecopy or fax machine shall be deemed given at the time and on the date
of machine transmittal provided same is sent prior to 4:00 p.m. on a business
day (if sent later, then notice shall be deemed given on the next business day)
and if the sending party receives a written send confirmation on its machine and
forwards a copy thereof by regular mail accompanied by such notice or
communication. Notices may be given by counsel for the parties described above,
and such Notices shall be deemed given by said party, for all purposes
hereunder.
6. Binding Effect. This Agreement shall be binding upon, inure to the
benefit of, and be enforceable by the parties hereto and their respective
successors and assigns.
7. Governing Law. This Agreement shall be deemed a contract made under the
laws of the State of Colorado and together with the rights and obligations of
the parties hereunder, shall be construed and enforced in accordance with and
governed by the laws of such state (but not including the choice-of-law rules
thereof). Each party hereto submits itself to the jurisdiction of any court
sitting in the County of Denver of the State of Colorado for the purpose of
adjudicating the rights of the parties hereunder.
8. Counterparts. This Agreement may be executed simultaneously in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9. Captions. Any captions are solely for convenience of reference and
shall not be used in construing or interpreting this Agreement.
10. Entire Agreement. This Agreement contains the entire agreement among
the parties with respect to the subject matter hereof and supersedes all prior
or oral agreements or understanding with respect thereto.
11. Amendment. This Agreement may not be waived, changed, discharged or
terminated orally, but only by an agreement in writing, signed by the party or
parties against whom enforcement of any waiver, change, modification, discharge
or termination is sought.
365
<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:
--------------------------------------
Name: Roger W. Thomas
Title: Executive Vice President
MACK-CALI REALTY CORPORATION
BY:
--------------------------------------
Name: Roger W. Thomas
Title: Executive Vice President
APOLLO REAL ESTATE INVESTMENT FUND
II, L.P.
BY:
--------------------------------------
By:
-----------------------------
Name:
Title:
PACIFICA HOLDING COMPANY, LLC
BY:
--------------------------------------
Name:
Title:
PACIFICA HOLDING COMPANY, a Colorado
corporation
366
<PAGE>
BY:
--------------------------------------
Name:
Title:
367
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement"), dated this 25th day of
March, 1998, among Mack-Cali Realty Corporation, a Maryland corporation,
Mack-Cali Realty, L.P., a Delaware limited partnership (collectively,
"Mack-Cali"), Pacifica Holding Company, a Colorado limited liability company
("Pacifica LLC") and Pacifica Holding Company, a Colorado corporation
("Pacifica"; and, together with Pacifica LLC, collectively, the "Indemnitors").
Unless otherwise defined herein, capitalized terms contained herein shall have
the meanings set forth in the Contribution and Exchange Agreements (as defined
below).
W I T N E S S E T H:
WHEREAS, as set forth on Schedule I hereof, Mack-Cali, the Indemnitors,
et. al., have entered into the Contribution and Exchange Agreements set forth on
Schedule I hereof, dated as of March 25, 1998 and the other documents and
instruments exted and delivered in connection therewith including, without
limitation, the Assignment and Assumption of Leases, the Omnibus Assignment of
Interests, and the Asset Purchase Agreement (such Contribution and Exchange
Agreements, together with such other documents and instruments, are hereinafter
collectively called the "Contribution and Exchange Agreements") pursuant to
which, among other things, Mack-Cali, the Indemnitors and the other Contributors
listed therein agreed to contribute and exchange certain entity interests
("Contributed Interests") and real property identified therein (the
"Transaction");
WHEREAS, pursuant to Section 5.3 of the Contribution and Exchange
Agreements, the Indemnitors have agreed to indemnify Mack-Cali with respect to
certain claims that may arise as a result of the Transaction;
NOW, THEREFORE, for ten dollars ($10.00) the premises contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby conclusively acknowledged, the parties hereto, intending to be legally
bound, mutually agree as follows:
1. Agreement to Indemnify. From and after the Closing, and subject to the
terms and conditions of this Agreement, the Indemnitors jointly and severally
covenant and agree to indemnify, defend and hold harmless Mack-Cali, and any
other Person controlling, controlled by or under common control with Mack-Cali,
including any officer, director, stockholder, partner, member, employee, agent
or representative of any of them (a "Mack-Cali Affiliate"), from and against all
claims, judgments, assessments, losses, damages, liabilities, costs and
expenses, including without limitation interest, penalties and reasonable fees
and expenses of legal counsel chosen by Mack-Cali or a Mack-Cali Affiliate
(collectively, "Damages"), imposed upon or incurred by Mack- Cali, or any
Mack-Cali Affiliate arising out of or in connection with or resulting from any
and all claims or threatened claims (collectively, "Claims") relating to the
following: (i) the fairness, appropriateness, authority and legal sufficiency of
the allocation of the Exchange Consideration and the Units amongst the
Contributors and their partners under the Contribution and Exchange
368
<PAGE>
Agreements, which allocation has been determined by the Indemnitors and the
Contributors in their sole discretion immediately preceding the Closing; (ii)
the distribution or allocation of any of the Units, and/or cash received by any
Contributor at the Closing or to such entity's partners, shareholders, members,
beneficiaries or other individuals or entities having a legal or beneficial
ownership interest in such entity and/or the appropriateness or legal
sufficiency of any such distribution or allocation; (iii) with regard to any
Property conveyed to Mack-Cali by assignment of Contributed Interests, any
failure to convey to Mack-Cali one hundred percent (100%) of the Contributed
entities comprised of such Contributed Interests; (iv) with regard to any
Property conveyed to Mack-Cali, any failure to obtain any necessary partner or
member consent to such transfer and/or assignment; (v) any breach of the
representations and warranties of the Contributors and other Property owners set
forth in the Contribution and Exchange Agreements to the extent they would be
liable for such breach under said agreements; and/or (vi) with respect to the
Contributed Interests and/or the Property, any direct or indirect indebtedness,
liability, claim or loss that accrued prior to Closing, to the extent
Contributors would be liable for the same under the Contribution and Exchange
Agreements, whether known or unknown, fixed or unfixed, choate or inchoate,
liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent
or otherwise, whether or not of a kind required by GAAP to be set forth on the
Property Financials or in the notes thereto, including, without limitation,
indebtedness for borrowed money (collectively, "Liabilities"), unless such
Liabilities were fully and accurately reflected on a schedule to the
Contribution and Exchange Agreements and/or the Property Financials and
expressly approved by Mack-Cali.
2. Survival. Notwithstanding anything to the contrary contained in the
Contribution and Exchange Agreements, the provisions of this Agreement shall
survive until such time as any applicable statute of limitation for any such
Claims have expired. This Agreement shall be independent of, and in addition to,
the provisions relating to indemnification contained in the Contribution and
Exchange Agreements. The indemnification obligations set forth in this Agreement
shall be absolute and unconditional.
The liability of the Indemnitors hereunder shall in no way be affected by
(a) the release or discharge of the Indemnitors in any creditors' receivership,
bankruptcy or other similar proceedings, or (b) the impairment or modification
of the liability of any of the Indemnitors or their respective estates in
bankruptcy from the operation of any present or future provision of Title 11 of
the United States Code or any other statute or from the action of any court
having jurisdiction over any of the Indemnitors or their respective estates.
Each of the Indemnitors waives any right or claim of right to cause a
marshaling of the respective assets of Indemnitors before Mack-Cali may proceed
against any of the Indemnitors or to cause Mack-Cali to proceed in any
particular order against the Indemnitors.
3. General Procedures. The provisions of Section 1 are expressly subject
to the following: Mack-Cali shall give notice to the Indemnitors with reasonable
promptness upon becoming aware of the Claims or other facts upon which a claim
for indemnification will be based (provided, however, no delay by Mack-Cali in
exercising any of its rights or remedies under this Agreement shall operate as a
waiver of any such right, power or privilege, except to the extent such
369
<PAGE>
delay materially prejudices the Contributor's ability to successfully defend the
matter giving rise to the indemnification Claims); the notice shall set forth
such information with respect thereto as is then reasonably available to
Mack-Cali. The Indemnitors shall have the right to undertake the defense of any
such Claims asserted by a third party with counsel reasonably satisfactory to
Mack-Cali and Mack-Cali shall cooperate at the Indemnitors' reasonable expense
in such defense and make available all records and materials reasonably
requested by the Indemnitors in connection therewith. In any event, Mack-Cali
shall be entitled to participate in such defense, but shall not be entitled to
indemnification with respect to the costs and expenses of such defense if the
Indemnitors shall have diligently assumed the defense of the Claims; provided,
that, if in the opinion of counsel to Mack- Cali, the use of the same counsel to
represent the Indemnitors and Mack-Cali would present a conflict of interest,
Mack-Cali may employ its own counsel at the Indemnitors' expense. In the event
the Indemnitors decide not to or do not promptly undertake the defense of any
such Claims, Mack- Cali shall be entitled to indemnification with respect to all
reasonable costs and expenses of such defense (including reasonable attorneys'
fees, costs and expenses). Any Claims to which the Indemnitors have undertaken
to defend under this Section 3 shall not, without the written consent of
Mack-Cali, be settled or compromised nor shall any consent to entry of money
judgment be agreed to; provided, however, and notwithstanding anything to the
contrary contained in this Agreement, the Indemnitors may settle any Claims
without the consent of Mack-Cali, but only if such settlement (a) requires only
the payment of monetary damages that are paid in full by the Indemnitors, and
(b) includes as an unconditional term thereof, the release by the claimant or
the plaintiff of Mack-Cali from all liability arising from the events which
allegedly gave rise to such Claims. The Indemnitors shall not be liable for any
Claims settled by Mack-Cali without their written consent (for purposes of this
Agreement, the consent of any of the Indemnitors shall be deemed to be the
consent of all of the Indemnitors).
4. Remedies Cumulative. Except as otherwise provided herein, the remedies
provided herein shall be cumulative and shall not preclude the assertion by any
party hereto of any other rights or the seeking of any other remedies against
any other party hereto.
2. Notices: 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 Mack-Cali: 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: Pryor, Cashman, Sherman & Flynn
410 Park Avenue
370
<PAGE>
New York, New York 10022
Attn: Wayne B. Heicklen, Esq.
(212) 326-0425 (tele.)
(212) 326-0806 (fax)
If to the Indemnitors: Pacifica Holding Company, LLC
5975 S. Quebec Street, Suite 100
Englewood, Colorado 80111
Attn: Mr. Steve Leonard
(303) 721-7600 (tele.)
(303) 721-1122 (fax)
Pacifica Holding Company, a Colorado
corporation
5975 S. Quebec Street, Suite 100
Englewood, Colorado 80111
Attn: Mr. Steve Leonard
(303) 721-7600 (tele.)
(303) 721-1122 (fax)
with a copy to: Brownstein, Hyatt, et al.
410 17th Street, 22nd Floor
Denver, Colorado 80202
Attn: Edward Barad, Esq.
(303) 534-6335 (tele.)
(303) 623-1956 (fax)
or to such other address as either party may from time to time designate
by written notice to the other or to the Escrow Agent. Notices given by
(i) overnight delivery service as aforesaid shall be deemed received and
effective on the first business day following such dispatch and (ii)
telecopy or fax machine shall be deemed given at the time and on the date
of machine transmittal provided same is sent prior to 4:00 p.m. on a
business day (if sent later, then notice shall be deemed given on the next
business day) and if the sending party receives a written send
confirmation on its machine and forwards a copy thereof by regular mail
accompanied by such notice or communication. Notices may be given by
counsel for the parties described above, and such Notices shall be deemed
given by said party, for all purposes hereunder.
6. Binding Effect. This Agreement shall be binding upon, inure to the
benefit of, and be enforceable by the parties hereto and their respective
successors and assigns.
7. Governing Law. This Agreement shall be deemed a contract made under the
laws of the State of Colorado and together with the rights and obligations of
the parties hereunder, shall be construed and enforced in accordance with and
governed by the laws of such state (but not including the choice-of-law rules
thereof). Each party hereto submits itself to the jurisdiction of any court
sitting in the County of Denver of the State of Colorado for the purpose of
adjudicating the
371
<PAGE>
rights of the parties hereunder.
8. Counterparts. This Agreement may be executed simultaneously in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9. Captions. Any captions are solely for convenience of reference and
shall not be used in construing or interpreting this Agreement.
10. Entire Agreement. This Agreement contains the entire agreement among
the parties with respect to the subject matter hereof and supersedes all prior
or oral agreements or understanding with respect thereto.
11. Amendment. This Agreement may not be waived, changed, discharged or
terminated orally, but only by an agreement in writing, signed by the party or
parties against whom enforcement of any waiver, change, modification, discharge
or termination is sought.
372
<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:
-------------------------------
Name: Roger W. Thomas
Title: Executive Vice President
MACK-CALI REALTY CORPORATION
By:
-------------------------------
Name: Roger W. Thomas
Title: Executive Vice President
PACIFICA HOLDING COMPANY, LLC
By:
-------------------------------
Name:
Title:
PACIFICA HOLDING COMPANY, a Colorado
corporation
By:
-------------------------------
Name:
Title:
373
NOTICE OF SETTLEMENT OF DERIVATIVE
ACTION AND HEARING ON PROPOSED SETTLEMENT
IN THE CIRCUIT COURT
FOR BALTIMORE CITY
SYBIL MEISEL, et al., and derivatively on
behalf of CALI REALTY CORPORATION,
a Maryland corporation,
Plaintiff,
v.
JOHN J. CALI, et al.,
CIVIL ACTION NO. 97344041
Defendants,
-and-
CALI REALTY CORPORATION,
Nominal Defendant.
TO: ALL OWNERS OF THE COMMON STOCK OF MACK-CALI REALTY CORPORATION AS OF MARCH
26, 1998
PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. THIS NOTICE IS SENT
FOR THE PURPOSE OF INFORMING YOU OF THE PENDENCY OF THIS ACTION AND THE PROPOSED
SETTLEMENT OF THE ACTION. YOUR RIGHTS WILL BE AFFECTED BY LEGAL PROCEEDINGS IN
THIS LITIGATION.
This Notice is given pursuant to Rule 2-231 of the Maryland Rules and an
Order (the "Scheduling Order") of the Circuit Court for Baltimore City (the
"Court") entered in the above-captioned derivative action (the "Action") to
notify you of the proposed settlement of the Action (the "Settlement") and to
give you notice of the hearing (the "Settlement Hearing") and of your rights,
among others, to participate in that hearing to be held by the Court on May 4,
1998 to determine whether the proposed Settlement should be approved by the
Court as fair, reasonable and adequate, and final judgment entered thereon, and
to consider the application by derivative plaintiffs' counsel for an award of
attorneys' fees and the reimbursement of expenses.
THE SETTLEMENT HEARING
This Notice is given to persons who owned stock of Mack-Cali Realty
Corporation ("Mack-Cali", "Cali", or the "Company") as of March 26, 1998, and
pursuant to the Scheduling Order.
You are hereby notified that the Court will hold the Settlement Hearing on
May 4, 1998 at 10:00 a.m. in Room 234, Courthouse East, 111 North Calvert
Street, Baltimore, Maryland 21202 (a) to determine whether the Settlement on the
terms and conditions set forth in the Stipulation of Settlement, which is
described below under the caption "SUMMARY OF SETTLEMENT", taken as a whole, is
fair, reasonable and adequate and should be approved by the Court; (b) to
determine whether a Final Order and Judgment should be entered thereon; and (c)
to rule on such other matters as the Court may deem appropriate, including the
application of plaintiffs for an award of attorneys' fees and the reimbursement
of expenses.
BACKGROUND AND DESCRIPTION OF THE ACTION
<PAGE>
On December 10, 1997, plaintiffs, shareholders of Cali Realty Corporation,
a Maryland corporation, commenced the Action in the Court derivatively on behalf
of Cali. The Complaint asserts claims against the following directors of Cali:
John J. Cali, Thomas A. Rizk ("Rizk"), Angelo Cali, Brad W. Berger ("Berger"),
Edward Leshowitz, Irvin D. Reid, Brendan T. Byrne, Robert F. Weinberg, James W.
Hughes, Kenneth A. DeGhetto, Alan Turtletaub, and Alan G. Philibosian
(collectively the "Defendants"). The Complaint charges the Defendants with
breaching their fiduciary duties in connection with certain payments and other
benefits granted to certain of the Defendants and other senior officers of Cali
following the combination of Cali and The Mack Company and Patriot American
Office Group consummated on or about December 11, 1997 (the "Mack-Cali
Combination"). The Company is named as a nominal defendant.
On January 21, 1997 and January 31, 1997, Cali entered into amended or new
employment agreements for a term of five years (the "Employment Agreements")
with Rizk, President and CEO; John R. Cali, Chief Administrative Officer; Brant
Cali, Chief Operating Officer; Roger W. Thomas, General Counsel; Barry
Lefkowitz, Chief Financial Officer; James Nugent, Vice President-Leasing; Albert
Spring, Vice President-Operations; Berger, Executive Vice President; and Timothy
M. Jones, Executive Vice President (the "Officers"). The Employment Agreements
contained "change of control" and other provisions which, if triggered, would
entitle the officers to an acceleration of benefits under the agreements. The
terms and conditions of the acceleration of benefits under the Employment
Agreements are referred to as the "Change of Control Provisions."
The Board of Directors of Cali, after considering the recommendation of
the Cali's Compensation Committee (consisting of defendants Brendan T. Byrne,
Irvin D. Reid, and Alan G. Philibosian), determined that the Change of Control
Provisions would be triggered upon consummation of the Mack-Cali Combination. By
their Complaint, plaintiffs contend that Defendants breached their fiduciary
duties to Cali in making those determinations, which required Cali to honor the
Change of Control Provisions in the Employment Agreements.
Plaintiffs' counsel have fully apprised themselves of the applicable law
and facts relating to Plaintiffs' claims and Defendants' potential defenses.
They have analyzed the applicable law on whether the Court would require
Plaintiffs to make a pre-suit demand on the Board of Directors; reviewed the
documents considered by the Compensation Committee and the Board of Directors in
making the aforementioned determinations; and conducted an extensive interview
with a member of the Compensation Committee concerning its independence and the
factors it considered in recommending the payments to the Officers. Furthermore,
counsel for the parties have had numerous frank discussions concerning the
factual and legal issues involved in the claims and the defenses that would be
litigated in this Action in the course of their settlement negotiations.
The Defendants have denied and continue to deny all claims of wrongdoing
made in the Complaint. Nonetheless, the Defendants consider it desirable that
the Action and the claims alleged therein be settled in the manner and on the
terms and conditions hereinafter set forth, thereby putting to rest all claims
that have been asserted in the Action or which could have been asserted by the
Company or a shareholder derivatively on behalf of the Company or Mack-Cali in
the Action relating to any payments in cash, stock, options, debt forgiveness,
or otherwise, made to or received by Rizk, John R. Cali, Brant Cali, Roger W.
Thomas, Barry Lefkowitz, Timothy M. Jones, James Nugent, Albert Spring, and
Berger as a result of, or in connection with, the Mack-Cali Combination,
including entering into the new employment agreements or amended and restated
employment agreements with Rizk, John R. Cali, Brant Cali, Roger W. Thomas,
Barry Lefkowitz, and Timothy M. Jones in December 1997 (the "Settled Claims"),
in order to avoid the expense, inconvenience and distraction of further
litigation.
SUMMARY OF SETTLEMENT
The Terms of the Settlement
<PAGE>
Based upon the foregoing, the parties have agreed to the following
Settlement of the Action:
1. The amounts Mack-Cali would be obligated to pay Rizk, John R. Cali,
Brant Cali, Roger W. Thomas, Barry Lefkowitz, and Timothy M. Jones (the
"Affected Executives") pursuant to the formula set forth in their new employment
agreements or their amended and restated employment agreements with Mack-Cali,
which were executed in December 1997, solely in the event of early termination
of any such person's employment by the Company without cause or by any such
person for good reason (the "Early Termination Provisions"), shall be reduced by
an aggregate amount of $11 million that would otherwise be payable by Mack-Cali
to all such persons if the Early Termination Provisions are triggered with
respect to all such persons during calendar year 1998. Alternatively, in the
event that the Early Termination Provisions are triggered in calendar year 1999
with respect to all such persons, the amounts Mack-Cali would be obligated to
pay such persons will be reduced by an aggregate amount of $6.5 million that
would otherwise be payable by Mack-Cali to all such persons if the Early
Termination Provisions are triggered by all such persons during calendar year
1999.
2. The aggregate reductions set forth in paragraph 1 above shall apply to
each of the Affected Executives on an individual basis, so that in the event the
Early Termination Provisions are triggered with respect to one or more of the
Affected Executives in 1998 or alternatively in 1999, the corresponding amount
of the individual reduction applicable to an Affected Executive with respect to
whom the Early Termination Provisions have been triggered shall be as follows:
<TABLE>
<CAPTION>
Affected Executive For 1998 Year For 1999 Year
- ------------------ ------------- -------------
(Reduced Amounts)
Reductions
----------
<S> <C> <C>
Thomas A. Rizk.............................................. $(4,290,000) $(2,535,000)
John R. Cali................................................ (1,375,000) (812,500)
Brant Cali.................................................. (1,375,000) (812,500)
Roger W. Thomas............................................. (1,292,500) (763,750)
Barry Lefkowitz............................................. (1,292,500) (763,750)
Timothy M. Jones............................................ (1,375,000) (812,500)
Total Reductions........................................ $(11,000,000) $(6,500,000)
</TABLE>
3. Mack-Cali will pay the costs of providing notice of the Settlement to
the current shareholders of Mack-Cali.
<PAGE>
The Releases
1. As of the date the Judgment approving the Settlement of this Action
becomes Final (which shall be the later of (i) the date when, by lapse of time,
the Judgment is longer subject to judicial review or appeal; or (ii) if an
appeal or review is sought from the Judgment, the day after such Judgment is
affirmed or the appeal or review is dismissed or denied and such Judgment is no
longer subject to further judicial review or appeal), Plaintiffs, Cali and
Mack-Cali shall be deemed to have and, by operation of the Judgment entered in
this action, shall have fully, finally and forever released, relinquished and
discharged the Defendants, their counsel, and John R. Cali, Brant Cali, Roger W.
Thomas, Barry Lefkowitz, Timothy M. Jones, James Nugent and Albert Spring
(collectively the "Released Parties") from the Settled Claims. As of the date
the Judgment approving the Settlement of this Action becomes Final, the Released
Parties shall be deemed to have, and by operation of the Judgment entered in
this Action, shall have fully, finally and forever released, relinquished and
discharged Plaintiffs and their counsel from any claims relating to the
institution, prosecution, assertion or resolution of this Action.
Reasons for Settlement
1. Plaintiffs and their counsel believe that the Settlement provided for
herein will provide substantial benefits to Mack-Cali which, when weighed
against the attendant risks of continued litigation, warrant settlement of the
claims on the terms described herein. The Early Termination Provisions contained
in the current employment agreements entered into between Rizk, John R. Cali,
Brant Cali, Roger W. Thomas, Timothy M. Jones and Barry Lefkowitz and Mack-Cali
after the Mack-Cali Combination, if triggered in calendar years 1998 or 1999,
could provide these officers with significant severance benefits in addition to
the significant severance benefits already obtained by them by operation of the
Change of Control Provisions contained in their previous Employment Agreements
with Cali. Plaintiffs' counsel have determined, and Mack-Cali has concurred,
that the reduction of the benefits available to these officers provided for by
the proposed Settlement will provide a substantial savings to Mack-Cali if the
Early Termination Provisions in their current employment agreements are
triggered in calendar years 1998 or 1999.
2. In addition to the substantial benefits provided by the Settlement to
Mack-Cali, Plaintiffs and their counsel have taken into account the expense and
length of time necessary to prosecute the Action through trial; the fact that
the defenses asserted by and available to defendants are both factually and
legally substantial; the uncertainties of the outcome of the Action,
particularly given that defendants' potential liability is subject to and
dependent on the resolution of sharply disputed issues of both fact and law; and
the fact that resolution of the Action, even if the Court were to find in
Plaintiff's favor, would likely be submitted for appellate review, as a
consequence of which it could be many years until there is a final adjudication
of the Action. Among these issues is whether the Court would determine that the
interpretation of the Change of Control Provisions made by the Compensation
Committee, and approved by the Board, would be protected by the business
judgment rule. That rule creates a presumption that in making a business
decision, the directors of a corporation acted on an informed basis, in good
faith and in the honest belief that the action taken was in the best interests
of the Company. In addition, Plaintiffs have considered the impact of the
continuation of the litigation on the ability of the officers of the Company to
attend to the Company's business. In light of these considerations, Plaintiffs,
through their counsel, have engaged in extensive arm's-length negotiations with
counsel for Defendants to achieve the certainty of a positive outcome in the
Action, and have determined that it is in the best interests of Mack-Cali and
all shareholders thereof to settle the Action on the terms set forth herein.
APPLICATION FOR ATTORNEYS' FEES AND EXPENSES
At the Settlement Hearing described above, Plaintiff's counsel will make
an application for an award by the Court of attorneys' fees in the amount of
$550,000, and reimbursement of expenses in an amount not to exceed $5,000.
Subject to approval by the Court, Mack-Cali has agreed to pay such amounts to
Plaintiffs' counsel in recognition of
<PAGE>
the substantial benefits provided to the Company by virtue of the Settlement.
RIGHT TO APPEAR
Any current shareholder may appear and show cause if he or she has any
reason why the proposed Settlement should not be approved as fair, reasonable
and adequate, or to present any opposition to the application of Plaintiffs'
counsel for attorneys' fees and expenses; provided, however, that no current
shareholder shall be heard unless, on or before April 20, 1998, his or her
objection or opposition is made in writing and is filed, together with copies of
all other papers and briefs to be submitted by him or her to the Court at the
hearing, and that person has served by hand or by first class mail the written
objections and copies of any papers and briefs upon:
Jeffrey A. Klafter, Esquire Donald S. Zakarin, Esquire
Bernstein Litowitz Berger & Grossmann LLP Pryor Cashman Sherman & Flynn LLP
1285 Avenue of the Americas 410 Park Avenue
New York, NY 10019 New York, NY 10022
Counsel for Plaintiffs Counsel for Defendants
Any person who fails to object in the manner and within the time
prescribed above shall be deemed to have waived the right to object (including
the right to appeal) and shall be forever barred, in this proceeding or in any
other proceeding, from raising all objections to the fairness, reasonableness
and adequacy of the proposed Settlement or to the request of Plaintiffs' counsel
for fees and expenses.
NOTICE TO PERSONS OR ENTITIES HOLDING
RECORD OWNERSHIP ON BEHALF OF OTHERS
Brokerage firms, banks, and other persons or entities who hold Mack-Cali
common stock as record owners but not as beneficial owners are directed promptly
to send to the beneficial owners the Notice. If additional copies of the Notice
are needed for forwarding to the beneficial owners of Mack-Cali common stock,
request for such additional copies should be made to Donald S. Zakarin, Esq.,
Pryor Cashman Sherman & Flynn LLP, counsel for Defendants, at the address shown
above.
SCOPE OF THIS NOTICE
This Notice is not all-inclusive. For a more detailed statement of the
matters involved in the Action, reference is made to the pleadings, to the
Stipulation of Settlement and to other papers filed in the Action, which may be
inspected, during regular business hours of each business day, at the Office of
the Clerk of the Circuit Court for Baltimore City, Civil Division, 111 North
Calvert Street, Courthouse East, Baltimore, Maryland 21202. Questions or
communication concerning the proposed Settlement may be directed to Jeffrey A.
Klafter, Esq., Bernstein Litowitz Berger & Grossmann LLP, 1285 Avenue of the
Americas, New York, New York 10019. DO NOT WRITE OR TELEPHONE THE COURT.
DATED: April 2, 1998
BY ORDER OF THIS COURT
Court Clerk
Circuit Court for Baltimore City
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT (this "Agreement") is made as of the 16th
day of April, 1998, by and among MACK-CALI REALTY, L.P., a Delaware limited
partnership ("MCRLP" or the "Borrower"), having its principal place of business
at 11 Commerce Drive, Cranford, New Jersey 07016, THE CHASE MANHATTAN BANK
("Chase"), having its principal place of business at 270 Park Avenue, New York,
New York 10017, FLEET NATIONAL BANK ("Fleet"), a national banking association
having its principal place of business at 111 Westminster Street, Providence,
Rhode Island 02903, and the other lending institutions party hereto or which may
become parties hereto pursuant to ss.18 (individually, a "Lender" and
collectively, the "Lenders") and THE CHASE MANHATTAN BANK, as the administrative
agent for itself and each other Lender, and FLEET NATIONAL BANK, as the
syndication agent.
RECITALS
A. The Borrower and its Subsidiaries are primarily engaged in the business
of owning, purchasing, developing, constructing, renovating and operating
office, office/flex, industrial/warehouse and multifamily residential properties
in the United States.
B. Mack-Cali Realty Corporation, a Maryland corporation ("MCRC"), is the
sole general partner of MCRLP, holds in excess of 89% of the partnership
interests in MCRLP, is qualified to elect REIT status for income tax purposes,
and has agreed to guaranty the obligations of the Borrower hereunder.
C. Those Subsidiaries of the Borrower which are the owners of Unencumbered
Property have also agreed to guaranty the obligations of the Borrower hereunder.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ss.1. DEFINITIONS AND RULES OF INTERPRETATION.
ss.1.1. Definitions. The following terms shall have the meanings set forth
in this ss.1 or elsewhere in the provisions of this Agreement referred to below:
Absolute Competitive Bid Loan. See ss.2A.3(a).
Accountants. In each case, nationally-recognized, independent certified
public accountants reasonably acceptable to the Administrative Agent. The
Lenders hereby acknowledge that Price Waterhouse LLP and the other major
national accounting firms are acceptable accountants.
374
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Adjusted Unencumbered Property NOI. With respect to any fiscal period for
any Unencumbered Property, the net income of such Unencumbered Property during
such period, as determined in accordance with GAAP, before deduction of (a)
gains (or losses) from debt restructurings or other extraordinary items relating
to such Unencumbered Property (b) minority interests, not inconsistent with the
wholly-owned Subsidiary requirements for Unencumbered Properties and (c) income
taxes; plus (x) interest expense relating to such Unencumbered Property and (y)
depreciation and amortization relating to such Unencumbered Property and (z) the
noncash portion of executive stock award rights and stock purchase rights
relating to the Unencumbered Property in question included in written executive
employment agreements, written employee plans or other written non-monetary
employment compensation provisions to the extent excluded from net income, as
determined in accordance with GAAP; minus a recurring capital expense reserve
equal to four percent (4%) of total revenue of such Unencumbered Property for
such period, after adjustments to eliminate the effect of the straight-lining of
rents affecting such Unencumbered Property.
Administrative Agent. The Chase Manhattan Bank acting as administrative
agent for the Lenders, or any successor administrative agent, as permitted by
ss.14.
Administrative Agent's Head Office. The Administrative Agent's head office
located at 270 Park Avenue, New York, New York 10017, or at such other location
as the Administrative Agent may designate from time to time pursuant to ss.19
hereof, or the office of any successor Administrative Agent permitted under
ss.14 hereof.
Affiliate. With reference to any Person, (i) any director or executive
officer of that Person, (ii) any other Person controlling, controlled by or
under direct or indirect common control of that Person, (iii) any other Person
directly or indirectly holding 10% or more of any class of the capital stock or
other equity interests (including options, warrants, convertible securities and
similar rights) of that Person (other than a mutual fund which owns 10% or more
of the common stock of MCRC) and (iv) any other Person 10% or more of any class
of whose capital stock or other equity interests (including options, warrants,
convertible securities and similar rights) is held directly or indirectly by
that Person.
Agreement. This Revolving Credit Agreement, including the schedules and
exhibits hereto, as the same may be from time to time amended and in effect.
Alternate Base Rate. The higher of (a) the annual rate of interest
announced from time to time by Chase at its head office in New York, New York as
its "prime rate" or (b) one half of one percent (1/2%) above the overnight
federal funds effective rate as published by the Board of Governors of the
Federal Reserve System, as in effect from time to time. Any change in the
Alternate Base Rate during an Interest Period shall result in a corresponding
change on the same day in the rate of interest accruing from and after such day
on the unpaid balance of principal of the Alternate Base Rate Loans, if any,
applicable to such Interest Period, effective on the day of such change in the
Alternate Base Rate.
375
<PAGE>
Alternate Base Rate Loans. Those Revolving Credit Loans bearing interest
calculated by reference to the Alternate Base Rate.
Applicable L/C Percentage. As of any date of determination, a per annum
percentage equal to the Applicable Margin for Revolving Credit LIBOR Rate Loans
then in effect.
Applicable Margin. The applicable margin (if any) over the then Alternate
Base Rate or LIBOR Rate, as applicable to the Revolving Credit Loan(s) in
question, as set forth below, which is used in calculating the interest rate
applicable to Revolving Credit Loans and which shall vary from time to time in
accordance with MCRLP's debt ratings, if any. The Applicable Margin to be used
in calculating the interest rate applicable to Alternate Base Rate Loans or
Revolving Credit LIBOR Rate Loans shall vary from time to time in accordance
with MCRLP's then applicable (if any) (x) Moody's debt rating, (y) S&P's debt
rating and (z) any Third Debt Rating, as set forth below in this definition, and
the Applicable Margin shall be adjusted effective on the next Business Day
following any change in MCRLP's Moody's debt rating or S&P's debt rating or
Third Debt Rating, as the case may be. MCRLP shall notify the Administrative
Agent in writing promptly after becoming aware of any change in any of its debt
ratings. In order to qualify for an Applicable Margin based upon a debt rating,
MCRLP shall obtain and maintain debt ratings from at least two (2) nationally
recognized rating agencies reasonably acceptable to the Administrative Agent,
one of which must be Moody's or S&P so long as such Persons are in the business
of providing debt ratings for the REIT industry; provided that until such time
as MCRLP obtains two debt ratings or if MCRLP fails to maintain at least two
debt ratings, the Applicable Margin shall be based upon an S&P rating of less
than BBB- in the table below. In addition, MCRLP may, at its option, obtain and
maintain three debt ratings (of which one must be from Moody's or S&P except as
set forth in the previous sentence). If at any time of determination of the
Applicable Margin, (a) MCRLP has then current debt ratings from two (2) rating
agencies, then the Applicable Margin shall be based on the lower of such
ratings, or (b) MCRLP has then current debt ratings from three (3) rating
agencies, then the Applicable Margin shall be based on the lower of the two
highest ratings.
Prior to the Borrower's satisfying the requirements for requesting
Competitive Bid Loans pursuant to ss.2A.1 hereof, the applicable debt ratings
and the Applicable Margins are set forth in the following table:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Applicable Applicable
Margin Margin
for Revolving Credit for Alternate Base
S&P Rating Moody's Rating Third Rating LIBOR Rate Loans Rate Loans
========================================================================================================
<S> <C> <C> <C> <C>
No rating or less than
No rating or less No rating or less BBB-/Baa3 equivalent 1.10% 0%
than BBB- than Baa3
- --------------------------------------------------------------------------------------------------------
BBB- Baa3 BBB-/Baa3 equivalent 1.00% 0%
- --------------------------------------------------------------------------------------------------------
BBB Baa2 BBB/Baa2 equivalent 0.90% 0%
- --------------------------------------------------------------------------------------------------------
BBB+ Baa1 BBB+/Baa1 equivalent 0.80% 0%
- --------------------------------------------------------------------------------------------------------
</TABLE>
376
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
A-/A3 equivalent
A- or higher A3 or higher or higher 0.65% 0%
- --------------------------------------------------------------------------------------------------------
</TABLE>
Upon the Borrower's satisfying and continuing to satisfy the
requirements for requesting Competitive Bid Loans pursuant to ss. 2A.1 hereof,
the applicable debt ratings and the Applicable Margin shall be as set forth in
the following table:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Applicable Applicable
Margin Margin
for Revolving Credit for Alternate Base
S&P Rating Moody's Rating Third Rating LIBOR Rate Loans Rate Loans
========================================================================================================
<S> <C> <C> <C> <C>
BBB- Baa3 BBB-/Baa3 equivalent 0.95% 0%
BBB Baa2 BBB/Baa2 equivalent 0.85% 0%
BBB+ Baa1 BBB+/Baa1 equivalent 0.75% 0%
A- or higher A3 or higher A-/A3 equivalent 0.60% 0%
or higher
- ---------------------------------------------------------------------------------------- ---------------
</TABLE>
Arrangers. Fleet and Chase Securities Inc.
Assignment and Assumption. See ss.18.1.
Borrower. As defined in the preamble hereto.
Budgeted Project Costs. With respect to Construction-In-Process, the
budgeted project cost of such Construction-In-Process shown on schedules
submitted to the Administrative Agent from time to time; provided that for
Construction-In-Process owned by any Partially-Owned Entity, the Budgeted
Project Cost of such Construction-In-Process shall be the Borrower's or its
subsidiaries' pro-rata share of the budgeted project cost of such
Construction-In-Process (based on the greater of (x) the Borrower's or its
subsidiaries' percentage equity interest in such Partially-Owned Entity or (y)
the Borrower's or its subsidiaries' obligation to provide or liability for
providing funds to such Partially-Owned Entity).
Building. Individually and collectively, the buildings, structures and
improvements now or hereafter located on the Real Estate.
Business Day. Any day on which banking institutions in New York, New York
are open for the transaction of banking business and, in the case of LIBOR Rate
Loans, also a day which is a LIBOR Business Day.
Capitalized Leases. Leases under which the Borrower or any of its
Subsidiaries or any Partially-Owned Entity is the lessee or obligor, the
discounted future rental payment obligations under which are required to be
capitalized on the balance sheet of the lessee or obligor in accordance with
GAAP.
377
<PAGE>
Capitalized Unencumbered Property NOI. As of any date of determination
with respect to an Unencumbered Property, an amount equal to the Revised
Adjusted Unencumbered Property NOI for such Unencumbered Property for the most
recent two (2) complete fiscal quarters multiplied by two (2), with the product
being divided by 9.25%.
CERCLA. See ss.6.18.
Closing Date. April __, 1998, which is the date on which all of the
conditions set forth in ss.10 have been satisfied.
Code. The Internal Revenue Code of 1986, as amended and in effect from
time to time.
Commitment. With respect to each Lender, the amount set forth from time to
time on Schedule 1.2 hereto as the amount of such Lender's Commitment to make
Revolving Credit Loans to, and to participate in the issuance, extension and
renewal of Letters of Credit for the account of, the Borrower.
Commitment Fee. See ss.2.4(e).
Commitment Percentage. With respect to each Lender, the percentage set
forth on Schedule 1.2 hereto as such Lender's percentage of the Total Commitment
and any changes thereto from time to time.
Competitive Bid Loan Accounts. See ss.2A.2(a).
Competitive Bid Loans Election. The election by the Borrower in writing
delivered to the Administrative Agent at any one time, on or after the date
MCRLP has received an Investment Grade Credit Rating from two nationally
recognized rating agencies reasonably acceptable to the Administrative Agent
(one of which must be Moody's or S&P so long as such Persons are in the business
of providing debt ratings to the REIT industry), to access the Competitive Bid
Loans pursuant to ss. 2A of this Agreement.
Competitive Bid Loans. A borrowing hereunder consisting of one or more
loans made by any of the participating Lenders whose offer to make a Competitive
Bid Loan as part of such borrowing has been accepted by the Borrower under the
auction bidding procedure described in ss.2A hereof.
Competitive Bid Margin. See ss.2A.5(b)(iv).
Competitive Bid Notes. See ss.2A.2(b).
Competitive Bid Quote. An offer by a Lender to make a Competitive Bid Loan
in accordance with ss.2A.5 hereof.
378
<PAGE>
Competitive Bid Quote Request. See ss.2A.3.
Competitive Bid Rate. See ss.2A.5(b)(v).
Completed Revolving Credit Loan Request. A loan request accompanied by all
information required to be supplied under the applicable provisions of ss.2.5.
Consolidated or consolidated. With reference to any term defined herein,
shall mean that term as applied to the accounts of MCRC and its subsidiaries
(including the Borrower and the Subsidiary Guarantors) or MCRLP and its
subsidiaries, as the case may be, consolidated in accordance with GAAP.
Consolidated Adjusted Net Income. For any period, an amount equal to the
consolidated net income of MCRC, the Borrower and their respective Subsidiaries
for such period, as determined in accordance with GAAP, before (a) gains (or
losses) from the sale of real property or interests therein, debt restructurings
and other extraordinary items, (b) minority interest of said Persons in other
Persons and (c) income taxes; plus (w) interest expense, (x) depreciation and
amortization, (y) the noncash portion of executive stock award rights and stock
purchase rights included in written executive employment agreements, written
employee plans or other written non-monetary employment compensation provisions,
and (z) certain non-recurring cash payments made pursuant to certain written
employment agreements, written employee plans or other written employment
compensation provisions with key management individuals existing as of the date
hereof and described on Schedule EMPL hereto (as such agreements, plans and
provisions, but not the key management individuals, may be amended from time to
time) in an amount not to exceed $20,000,000 in the aggregate during any fiscal
year; minus a recurring capital expense reserve in an amount equal to four
percent (4%) of consolidated total revenue of MCRC, the Borrower and their
respective Subsidiaries; all after adjustments to eliminate the effect of the
straight-lining of rents; and all after adjustments for unconsolidated
partnerships, joint ventures and other entities.
Consolidated Capitalized NOI. As of any date of determination, an amount
equal to Revised Consolidated Adjusted Net Income for the most recent two (2)
completed fiscal quarters multiplied by two (2), with the product being divided
by 9.25%.
Consolidated Fixed Charges. For any fiscal period, the sum of Consolidated
Total Debt Service plus the aggregate of all Distributions payable on the
preferred stock of or other preferred beneficial interests in the Borrower, MCRC
or any of their respective Subsidiaries.
Consolidated Secured Indebtedness. As of any date of determination, the
aggregate principal amount of all Indebtedness of MCRC, the Borrower and their
respective Subsidiaries outstanding at such date secured by a Lien on the Real
Estate of such Person, without regard to Recourse.
Consolidated Tangible Net Worth. As of any date of determination, the
Consolidated Capitalized NOI minus Consolidated Total Liabilities.
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Consolidated Total Capitalization. As of any date of determination, with
respect to MCRC, the Borrower and their respective Subsidiaries determined on a
consolidated basis in accordance with GAAP; the sum of (a) Consolidated
Capitalized NOI plus (b) the value of Unrestricted Cash and Cash Equivalents
(excluding until forfeited or otherwise entitled to be retained by the Borrower,
and its Subsidiaries, tenant security and other restricted deposits), plus (c)
the aggregate costs incurred and paid to date by the Borrower and its
Subsidiaries with respect to Construction-In-Process plus (d) the value of
Indebtedness of third parties to the Borrower and its Subsidiaries for borrowed
money which is secured by mortgage liens in real estate (valued in accordance
with GAAP at the book value of such Indebtedness) plus (e) the actual net cash
investment by the Borrower and its Subsidiaries in any Opportunity Funds plus
(f) the book value of Unimproved Non-Income Producing Land; provided that the
value of all permitted investments included within Consolidated Total
Capitalization shall not exceed the limitations set forth in ss.9.8 hereof.
Consolidated Total Debt Service. For any fiscal period, without
double-counting, (a) Consolidated Total Interest Expense for such period plus
(b) the aggregate amount of scheduled principal payments of Indebtedness
(excluding (x) optional prepayments and (y) balloon payments at maturity)
required to be made during such period by MCRC, the Borrower and any of their
respective Subsidiaries plus (c) the aggregate amount of capitalized interest
required in accordance with GAAP to be paid or accrued by MCRC, the Borrower and
their respective Subsidiaries during such quarter.
Consolidated Total Interest Expense. For any fiscal period, the aggregate
amount of interest required in accordance with GAAP to be paid or accrued,
without double-counting, by MCRC, the Borrower and their respective Subsidiaries
during such period on all Indebtedness of MCRC, the Borrower and their
respective Subsidiaries outstanding during all or any portion of such period,
whether such interest was or is required to be reflected as an item of expense
or capitalized, including payments consisting of interest expenses in respect of
any "synthetic lease" referred to in the definition of "Indebtedness."
Consolidated Total Liabilities. As of any date of determination, without
double-counting, all liabilities of MCRC, the Borrower and their respective
Subsidiaries determined on a consolidated basis in accordance with GAAP and
classified as such on the consolidated balance sheet of MCRC, the Borrower and
their respective Subsidiaries, and all Indebtedness of MCRC, the Borrower and
their respective Subsidiaries, whether or not so classified (excluding, to the
extent otherwise included in Consolidated Total Liabilities, restricted cash
held on account of tenant security and other restricted deposits).
Consolidated Total Unsecured Debt Service. For any fiscal period,
Consolidated Total Debt Service with respect to Consolidated Unsecured
Indebtedness only for such period.
Consolidated Unsecured Indebtedness. As of any date of determination, the
aggregate principal amount of all Unsecured Indebtedness of MCRC, the Borrower
and their respective Subsidiaries outstanding at such date, including without
limitation the aggregate principal amount
380
<PAGE>
of all the Obligations under this Agreement as of such date, determined on a
consolidated basis in accordance with GAAP, without regard to Recourse.
Construction-In-Process. Any Real Estate for which the Borrower, any
Guarantor, any of the Borrower's Subsidiaries or any Partially-Owned Entity is
actively pursuing construction, renovation, or expansion of Buildings and,
except for purposes of the covenant set forth in ss.9.8(c) hereof, for which
construction is proceeding to completion without undue delay from Permit denial,
construction delays or otherwise, all pursuant to such Person's ordinary course
of business. Notwithstanding the foregoing, tenant improvements to previously
constructed and/or leased Real Estate shall not be considered
Construction-In-Process.
Conversion Request. A notice given by the Borrower to the Administrative
Agent of its election to convert or continue a Revolving Credit Loan in
accordance with ss.2.6.
Credit Parties. Collectively, the Borrower, the Operating Subsidiaries,
MCRC, the Subsidiary Guarantors and any other wholly-owned Subsidiary for which
the Borrower or MCRC has legal liability for such wholly-owned Subsidiary's
obligations and liabilities, directly or indirectly.
Daily Unused Commitment. The daily difference between (a) the Total
Commitment and (b) the sum of the principal amount of Revolving Credit Loans
outstanding plus the Maximum Drawing Amount for each such day hereunder.
debt ratings. Long-term, unsecured, non-credit enhanced debt ratings.
Default. As of the relevant time of determination, an event or occurrence
which solely with the giving of notice or the lapse of time, or both, would
constitute an Event of Default.
Disqualifying Environmental Event. Any Release or threatened Release of
Hazardous Substances, any violation of Environmental Laws or any other similar
environmental event with respect to any Real Estate (x) that causes either the
occupancy or rent of such Real Estate to be adversely affected by greater than
ten percent (10%), as compared to what otherwise would have been the occupancy
or rent of such Real Estate in the absence of such environmental event or (y)
for which the remaining costs of remediation in order to bring such Real Estate
into compliance with Environmental Laws exceeds the greater of $1,000,000 or
1.5% of the Capitalized Unencumbered Property NOI of the Real Estate that is the
particular Unencumbered Property in issue ("Remediation"); provided that (1) any
Real Estate that qualifies under (x) and (y) which requires Remediation shall
only be eligible to be an Unencumbered Property if such Remediation is ongoing
in accordance with prudent environmental practice and (2) the number of
Unencumbered Properties subject to Remediation shall not exceed the greater of
(i) five (5) Buildings (and related land) or (ii) the number of Buildings (and
related land) that are two and one-half percent (2.5%) of the total number of
Buildings constituting all of the Buildings in Unencumbered Properties at any
time.
381
<PAGE>
Distribution.
(i) with respect to the Borrower or its Subsidiaries, any
distribution of cash or other cash equivalent, directly or indirectly, to
the partners or other equity interest holders of the Borrower or its
Subsidiaries in respect of such partnership or other equity interest or
interests so characterizable; or any other distribution on or in respect
of any partnership interests of the Borrower or its Subsidiaries;
(ii) with respect to MCRC, the declaration or payment of any
dividend on or in respect of any shares of any class of capital stock of
MCRC, other than dividends payable solely in shares of common stock by
MCRC; the purchase, redemption, or other retirement of any shares of any
class of capital stock of MCRC, directly or indirectly through a
Subsidiary of MCRC or otherwise; the return of capital by MCRC to its
shareholders as such; or any other distribution on or in respect of any
shares of any class of capital stock of MCRC; and
(iii) any transfer in the ordinary course of business of cash and
cash equivalent among the Borrower, the Guarantors and their respective
Subsidiaries.
Dollars or $. Dollars in lawful currency of the United States of America.
Drawdown Date. The date on which any Revolving Credit Loan is made or is
to be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with ss.2.6.
Duff & Phelps. Duff & Phelps, and its successors.
Eligible Assignee. Any of (a) a commercial bank organized under the laws
of the United States, or any State thereof or the District of Columbia, and
having total assets in excess of $1,000,000,000; (b) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof or the District of Columbia, and having total assets in excess
of $1,000,000,000, calculated in accordance with GAAP; (c) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having total assets in excess of
$1,000,000,000, provided that such bank is acting at all times with respect to
this Agreement through a branch or agency located in the United States of
America and (d) a financial institution reasonably acceptable to the
Administrative Agent which is regularly engaged in making, purchasing or
investing in loans and having total assets in excess of $300,000,000.
Eligible Ground Lease. A ground lease that (a) has a minimum remaining
term of thirty (30) years, including tenant controlled options, as of any date
of determination, (b) has customary notice rights, default cure rights,
bankruptcy new lease rights and other customary provisions for the benefit of a
leasehold mortgagee, and (c) is otherwise acceptable for non-Recourse leasehold
mortgage
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financing under customary prudent lending requirements. The Eligible Ground
Leases as of the date of this Agreement are listed on Schedule EG.
Employee Benefit Plan. Any employee benefit plan within the meaning of
ss.3(3) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.
Environmental Laws. See ss.6.18(a).
ERISA. The Employee Retirement Income Security Act of 1974, as amended and
in effect from time to time.
ERISA Affiliate. Any Person which is treated as a single employer with the
Borrower under ss.414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of ss.4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Eurocurrency Reserve Rate. For any day with respect to a LIBOR Rate Loan,
the weighted average of the rates (expressed as a decimal) at which all of the
Lenders subject thereto would be required to maintain reserves under Regulation
D of the Board of Governors of the Federal Reserve System (or any successor or
similar regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
Event of Default. See ss.12.1.
Fee Letter. See ss.2.4(d).
Financial Statement Date. With respect to the Borrower, MCRC and their
respective subsidiaries, December 31, 1997.
Fitch. Fitch IBCA, Inc., and its successors.
Fronting Bank. With respect to any letters of credit issued under this
Agreement on or after the date hereof, Chase, or with the consent of the
Administrative Agent and the Borrower, another Lender. Notwithstanding anything
to the contrary contained herein, any letters of credit issued by Fleet to the
Borrower under the Revolving Credit Agreement dated as of August 6, 1997 among
Fleet, the Borrower and the other parties thereto, which are outstanding on the
date hereof, shall become Letters of Credit hereunder and Fleet shall be the
Fronting Bank with respect thereto.
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Funds from Operations. As defined in accordance with resolutions adopted
by the Board of Governors of the National Association of Real Estate Investment
Trusts as in effect from time to time, but in any event excluding Distributions
to holders of preferred stock or other preferred equity interests.
GAAP. Generally accepted accounting principles in effect from time to time
in the United States, consistently applied, provided that a certified public
accountant would, insofar as the use of such accounting principles is pertinent,
be in position to deliver an unqualified opinion as to financial statements in
which such principles have been properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of ss.3(2) of ERISA maintained or contributed to by the Borrower or any
Guarantor, as the case may be, or any ERISA Affiliate of any of them the
benefits of which are guaranteed on termination in full or in part by the PBGC
pursuant to Title IV of ERISA, other than a Multiemployer Plan.
Guaranties. Collectively, the MCRC Guaranty, the Subsidiary Guaranties,
and any other guaranty of the Obligations made by an Affiliate of the Borrower
in favor of the Administrative Agent and the Lenders.
Guarantors. Collectively, MCRC, the Subsidiary Guarantors and any other
Affiliate of the Borrower executing a Guaranty; provided, however, when the
context so requires, Guarantor shall refer to MCRC or such Affiliate, as
appropriate. Any Guarantor that is the owner or ground lessee of an Unencumbered
Property shall be a wholly-owned Subsidiary. Provided further, however, from and
after the release of the Guaranty of any Subsidiary Guarantor pursuant to ss.5
below, such Subsidiary Guarantor shall no longer be considered a "Guarantor" for
purposes of this Agreement.
Harborside Assumed Debt. (i) The Indebtedness to be owed by one or more of
MCRLP and certain of its Subsidiaries to Northwestern Mutual Insurance Company
and Principal Mutual Life Insurance Company in the original principal amount of
$110,000,000, and (ii) the Indebtedness to be owed by one or more of MCRC, MCRLP
and certain of its Subsidiaries to US West Pension Trust, Investment Management
Company in the original principal amount of $42,087,513.
Harborside Debt. The Indebtedness incurred by MCRLP pursuant to the
Revolving Credit Facility Agreement dated as of November 1, 1996, among MCRLP,
the several lenders from time to time parties thereto, and PSC, as
administrative agent for such lenders, as the same may be amended, supplemented
or otherwise modified from time to time.
Harborside Pledge Agreements. Collectively, (i) the pledge agreement
between MCRC and PSC, as the administrative agent, and (ii) the pledge agreement
between MCRLP and PSC, as the administrative agent, in each case (a) securing
the Harborside Debt in connection with the Harborside Transaction, and (b) as
the same may be amended, supplemented or otherwise modified from time to time.
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Harborside Pledged Interests. Collectively, (i) the 99% limited
partnership interest owned by MCRLP in each of Cali Harborside (Fee) Associates
L.P., a New Jersey limited partnership, Cal- Harbor II & II Urban Renewal
Associates L.P., a New Jersey limited partnership, Cal-Harbor IV Urban Renewal
Associates L.P., a New Jersey limited partnership, Cal-Harbor V Urban Renewal
Associates L.P., a New Jersey limited partnership, Cal-Harbor VI Urban Renewal
Associates L.P., a New Jersey limited partnership, Cal-Harbor So. Pier Urban
Renewal Associates L.P., a New Jersey limited partnership, Cal-Harbor No. Pier
Urban Renewal Associates L.P., a New Jersey limited partnership, and Cal-Harbor
VII Urban Renewal Associates L.P., a New Jersey limited partnership; and (ii)
100% of the issued and outstanding capital stock owned by MCRC of each of Cali
Sub X, Inc., a Delaware corporation, and Cali Sub XI, Inc., a Delaware
corporation, in each case pledged to PSC, as the administrative agent, pursuant
to the Harborside Pledge Agreements.
Harborside Transaction. (i) The acquisition by MCRLP and certain of its
Subsidiaries of the real property, buildings and other improvements thereon
commonly known as the Harborside Financial Center, Jersey City, New Jersey, (ii)
the incurrence of the Harborside Debt, and (iii) the incurrence of the
Harborside Assumed Debt.
Hazardous Substances. See ss.6.18(b).
Indebtedness. All obligations, contingent and otherwise, that in
accordance with GAAP should be classified upon the obligor's balance sheet as
liabilities, including, without limitation, (a) all obligations for borrowed
money and similar monetary obligations, whether direct or indirect; (b) all
liabilities secured by any mortgage, pledge, negative pledge, security interest,
lien, charge, or other encumbrance existing on property owned or acquired
subject thereto, whether or not the liability secured thereby shall have been
assumed; (c) all obligations under any Capitalized Lease (determined in
accordance with ss.9.9) or any lease (a "synthetic lease") which is treated as
an operating lease under GAAP and as a loan or financing for U.S. income tax
purposes; (d) all guarantees for borrowed money, endorsements and other
contingent obligations, whether direct or indirect, (without double counting and
in accordance with ss.9.0) in respect of indebtedness or obligations of others,
including any obligation to supply funds (including partnership obligations and
capital requirements) to or in any manner to invest in, directly or indirectly,
the debtor, to purchase indebtedness, or to assure the owner of indebtedness
against loss, through an agreement to purchase goods, supplies, or services for
the purpose of enabling the debtor to make payment of the indebtedness held by
such owner or otherwise, and the obligations to reimburse the issuer in respect
of any letters of credit; and (e) to the extent not otherwise included,
obligations of the Borrower under so-called forward equity purchase contracts to
the extent that such obligations are not payable solely in equity interests in
MCRC.
Interest Payment Date. (i) As to any Alternate Base Rate Loan, the last
day of the calendar month which includes the Drawdown Date thereof; and (ii) as
to any Revolving Credit LIBOR Rate Loan in respect of which the Interest Period
is (A) three (3) months or less, the last day of such Interest Period and (B)
more than three (3) months, the date that is three (3) months from the first
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day of such Interest Period, each date that is three (3) months thereafter, and,
in addition, the last day of such Interest Period.
Interest Period. With respect to each Loan, (a) initially, the period
commencing on the Drawdown Date of such Loan and ending on the last day of one
of the following periods (as selected by the Borrower in a Completed Revolving
Credit Loan Request or as otherwise in accordance with the terms of this
Agreement): (i) for any Alternate Base Rate Loan, the last day of the calendar
month, (ii) for any Revolving Credit LIBOR Rate Loan, 1, 2, 3, 6, 9 or 12 months
(provided that (x) the Interest Period for Revolving Credit LIBOR Rate Loans may
be shorter than one (1) month in order to consolidate two (2) or more Revolving
Credit LIBOR Rate Loans and (y) the Interest Period for all Revolving Credit
LIBOR Rate Loans shall be one (1) month until the earlier of ninety (90) days
after the Closing Date or the date on which the Arrangers complete the
syndication of the Total Commitment, as evidenced by written notice from the
Arrangers to the Borrower as to such completion), (iii) for any Absolute
Competitive Bid Loan, a market period not to extend beyond the Maturity Date,
and (iv) for any LIBOR Competitive Bid Loan, 1, 2, 3, 6, 9 or 12 months; and (b)
thereafter, each period commencing at the end of the last day of the immediately
preceding Interest Period applicable to such Loan and ending on the last day of
the applicable period set forth in (a) above as selected by the Borrower in a
Conversion Request or as otherwise in accordance with this Agreement; provided
that all of the foregoing provisions relating to Interest Periods are subject to
the following:
(A) if any Interest Period with respect to a Alternate Base
Rate Loan would end on a day that is not a Business Day, that
Interest Period shall end on the next succeeding Business Day;
(B) if any Interest Period with respect to a LIBOR Rate Loan
would otherwise end on a day that is not a Business Day, that
Interest Period shall be extended to the next succeeding Business
Day unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding Business Day;
(C) if the Borrower shall fail to give a Conversion Request as
provided in ss.2.6, the Borrower shall be deemed to have requested a
continuation of the affected Revolving Credit LIBOR Rate Loan as a
Revolving Credit LIBOR Rate Loan with an Interest Period of one (1)
month on the last day of the then current Interest Period with
respect thereto, other than during the continuance of a Default or
an Event of Default;
(D) any Interest Period relating to any LIBOR Rate Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall, subject to
subparagraph (E) below, end on the last Business Day of a calendar
month; and
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(E) any Interest Period that would otherwise extend beyond the
Maturity Date shall end on the Maturity Date.
Investment Grade Credit Rating. A long-term unsecured, non-credit enhanced
debt rating (a) from Moody's of Baa3 or higher, (b) from S&P of BBB- or higher,
or (c) from a Third Rating Agency of the Baa3/BBB- equivalent or higher.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise, but without double-counting): (i) for the
acquisition of stock, partnership or other equity interests or Indebtedness of,
or for loans, advances, capital contributions or transfers of property to, any
Person; and (ii) for the acquisition of any other obligations of any Person. In
determining the aggregate amount of Investments outstanding at any particular
time: (a) there shall be included as an Investment all interest accrued with
respect to Indebtedness constituting an Investment unless and until such
interest is paid; (b) there shall be deducted in respect of each such Investment
any amount received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution); (c)
there shall not be deducted in respect of any Investment any amounts received as
earnings on such Investment, whether as dividends, interest or otherwise, except
that accrued interest included as provided in the foregoing clause (a) may be
deducted when paid; and (d) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
Leases. Leases, licenses and agreements, whether written or oral, relating
to the use or occupation of space in or on the Buildings or on the Real Estate
by persons other than the Borrower, its Subsidiaries or any Partially-Owned
Entity provided that "Leases" shall include any such lease, license or other
such agreement with a Partially-Owned Entity if such lease, license or other
agreement is at a market level rent and related tenant charges, which are
required to be paid monthly or, in the case of non-rent tenant charges, when
usually and customarily required to be paid by other tenants of the same Real
Estate (and at least annually).
Lenders. Collectively, the Administrative Agent, any other lenders which
may provide additional commitments and become parties to this Agreement, and any
other Person who becomes an assignee of any rights of a Lender pursuant to ss.18
or a Person who acquires all or substantially all of the stock or assets of a
Lender.
Letter of Credit. See ss.3.1.1.
Letter of Credit Application. See ss.3.1.1.
Letter of Credit Fee. See ss.3.6.
Letter of Credit Participation. See ss.3.1.4.
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LIBOR Breakage Costs. With respect to any LIBOR Rate Loan to be prepaid or
not drawn after elected, a prepayment "breakage" fee in an amount determined by
the Administrative Agent in the following manner:
(i) First, the Administrative Agent shall determine the amount by
which (a) the total amount of interest which would have otherwise accrued
hereunder on each installment of principal prepaid or not so drawn, during
the period beginning on the date of such prepayment or failure to draw and
ending on the last day of the applicable LIBOR Rate Loan Interest Period
(the "Reemployment Period"), exceeds (b) the total amount of interest
which would accrue, during the Reemployment Period, on any readily
marketable bond or other obligation of the United States of America
designated by the Administrative Agent in its sole discretion at or about
the time of such payment, such bond or other obligation of the United
States of America to be in an amount equal (as nearly as may be) to the
amount of principal so paid or not drawn after elected and to have
maturity at the end of the Reemployment Period, and the interest to accrue
thereon to take account of amortization of any discount from par or
accretion of premium above par at which the same is selling at the time of
designation. Each such amount is hereinafter referred to as an
"Installment Amount".
(ii) Second, each Installment Amount shall be treated as payable on
the last day of the LIBOR Rate Loan Interest Period which would have been
applicable had such principal installment not been prepaid or not
borrowed.
(iii) Third, the amount to be paid on each such breakage date shall
be the present value of the Installment Amount determined by discounting
the amount thereof from the date on which such Installment Amount is to be
treated as payable, at the same yield to maturity as that payable upon the
bond or other obligation of the United States of America designated as
aforesaid by the Administrative Agent.
If by reason of an Event of Default the Administrative Agent elects to
declare a LIBOR Rate Loan to be immediately due and payable, then any breakage
fee with respect to such LIBOR Rate Loan shall become due and payable in the
same manner as though the Borrower had exercised such right of prepayment.
LIBOR Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London.
LIBOR Competitive Bid Loan(s). See ss.2A.3(a).
LIBOR Rate. For any Interest Period with respect to a LIBOR Rate Loan, the
rate of interest per annum (rounded upward, if necessary, to the nearest 1/16 of
one percent) as determined on the basis of the offered rates for deposits in
Dollars for a period of time comparable to such Interest Period which appears on
the Telerate page 3750 (or such other page as may replace that page on the
Telerate service) as of 11:00 a.m. London time on the date that is two (2) LIBOR
Business Days
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prior to the beginning of such Interest Period; provided, however, if the rate
described above does not appear on the Telerate System on any applicable
interest determination date, the LIBOR Rate shall be the rate (rounded upwards
as described above, if necessary) for deposits in Dollars for a period of time
substantially equal to the Interest Period which appears on the Reuters Page
"LIBO" (or such other page as may replace the LIBO Page on that service for the
purpose of displaying such rates), as of 11:00 a.m. London time on the date that
is two (2) LIBOR Business Days prior to the beginning of such Interest Period.
If both the Telerate and Reuters systems are unavailable, then the rate
for that date will be determined on the basis of the offered rates for deposits
in Dollars for a period of time comparable to the Interest Period which are
offered by four major banks in the London interbank market at approximately
11:00 a.m. London time on the date that is two (2) LIBOR Business Days prior to
the beginning of such Interest Period. The principal London office of each of
the four major London banks will be requested to provide a quotation of its
Dollar deposit offered rate. If at least two such quotations are provided, the
rate for that date will be the arithmetic mean of the quotations. If fewer than
two quotations are provided as requested, the rate for that date will be
determined on the basis of the rates quoted for loans in Dollars to leading
European banks for a period of time comparable to the Interest Period by major
banks in New York City at approximately 11:00 a.m. New York City time on the
date that is two (2) LIBOR Business Days prior to the beginning of such Interest
Period. In the event that the Administrative Agent is unable to obtain any
quotation as provided above, it will be deemed that the LIBOR Rate cannot be
determined.
In the event that the Board of Governors of the Federal Reserve System
shall impose a reserve requirement with respect to LIBOR deposits of the
Lenders, then for any period during which such reserve requirement shall apply,
the LIBOR Rate shall be equal to the amount determined above divided by an
amount equal to one (1.00) minus the Eurocurrency Reserve Rate.
LIBOR Rate Loan(s). Loans bearing interest calculated by reference to the
LIBOR Rate.
Lien. See ss.8.2.
Loan Documents. Collectively, this Agreement, the Letter of Credit
Applications, the Letters of Credit, the Notes, the Guaranties, and any and all
other agreements, instruments or documents now or hereafter identified thereon
as a "Loan Document" under this Agreement, and all schedules, exhibits and
annexes hereto or thereto, as the same may from time to time be amended and in
effect.
Loans. The Revolving Credit Loans and the Competitive Bid Loans.
Majority Lenders. As of any date, the Lenders whose aggregate Commitments
constitute at least fifty-one percent (51%) of the Total Commitment, but in no
event fewer than two Lenders if there are three or more Lenders; provided that
if the Total Commitment has been terminated by the Lenders and no Revolving
Credit Loans or Letters of Credit are outstanding, the Majority Lenders
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shall be the Lenders holding fifty-one percent (51%) of the outstanding
principal amount of Competitive Bid Loans on such date.
Material Adverse Effect. Any event or occurrence of whatever nature which:
(a) has a material adverse effect on the business, properties, operations or
financial condition of (i) the Borrower or (ii) any Guarantor or (iii) the
Borrower, the Guarantors and their respective Subsidiaries, taken as a whole,
(b) has a material adverse effect on the ability of the Borrower or any
Guarantor to perform its payment and other material obligations under any of the
Loan Documents, or (c) causes a material impairment of the validity or
enforceability of any of the Loan Documents or any material impairment of the
rights, remedies and benefits available to the Administrative Agent and the
Lenders under any of the Loan Documents.
Maturity Date. April __, 2001, or such earlier date on which the Loans
shall become due and payable pursuant to the terms thereof. The Borrower may, by
notice to the Administrative Agent given at least one hundred twenty (120) days
prior to the Maturity Date, request a one-year extension of the Maturity Date,
the approval of which shall require Unanimous Lender Approval. Any such
extension, if given by Unanimous Lender Approval, shall require that no Default
or Event of Default shall have occurred and be continuing and that the Borrower
pay an aggregate extension fee equal to 0.075% of the then existing Total
Commitment.
Maximum Drawing Amount. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit, as such
maximum aggregate amount may be reduced from time to time pursuant to the terms
of the Letters of Credit.
MCRC Guaranty. The Guaranty dated as of the date hereof made by MCRC in
favor of the Administrative Agent and the Lenders pursuant to which MCRC
guarantees to the Administrative Agent and the Lenders the unconditional payment
and performance of the Obligations.
Moody's. Moody's Investors Service, Inc., and its successors.
Multiemployer Plan. Any multiemployer plan within the meaning of ss.3(37)
of ERISA maintained or contributed to by the Borrower or any Guarantor as the
case may be or any ERISA Affiliate.
Non-Material Breach. A (i) breach of a representation or warranty or
covenant contained in ss.6 or ss.7 (other than ss.7.1), (ii) a breach of any
other representation or warranty or covenant as to which such term "Non-Material
Breach" is specifically applied, or (iii) a Permitted Event; but only to the
extent any such breach under (i) or (ii) or an event under (iii) (other than
ss.7.1), neither (A) singularly or in conjunction with any other existing
breaches or (iii) events, materially adversely affect the business, properties
or financial condition of (x) MCRC; (y) MCRLP; or (z) the Borrower, the
Guarantors and their Subsidiaries, taken as whole nor (B) singularly or in
conjunction with any other existing breaches or (iii) events, materially
adversely affect the ability of (x) MCRC; (y) MCRLP; or the (z) the Borrower,
the Guarantors and their Subsidiaries, taken as a whole, to fulfill
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the obligations to the Lenders under the Loans (including, without limitation,
the repayment of all amounts outstanding under the Loans, together with interest
and charges thereon, when first due) nor (C) has been identified in this
Agreement specifically as a matter that does not constitute a Non- Material
Breach. During the continuance of any Permitted Event, the Real Estate
(including Unencumbered Property) and other assets of any affected Guarantor
shall be excluded from asset (but not liability) and income (but not loss)
calculation under ss.9 which exclusions shall be evidenced in all compliance
certificates provided as required by this Agreement.
A breach or event which may constitute a Non-Material Breach shall be
identified when first known to the Borrower, any Guarantor or Subsidiary on the
next delivered compliance certificate required to be delivered to the Lenders
pursuant to the terms of this Agreement; provided that the identification of
such breach or event as a Non-Material Breach by the Borrower, any Guarantor or
any Subsidiary shall not be binding on the Lenders.
Notes. The Revolving Credit Notes and the Competitive Bid Notes.
Obligations. All indebtedness, obligations and liabilities of the Borrower
and its Subsidiaries to any of the Lenders and the Administrative Agent,
individually or collectively, under this Agreement or any of the other Loan
Documents or in respect of any of the Loans or the Notes or Reimbursement
Obligations incurred or the Letter of Credit Applications or the Letters of
Credit or other instruments at any time evidencing any thereof, whether existing
on the date of this Agreement or arising or incurred hereafter, direct or
indirect, joint or several, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured, arising by contract, operation
of law or otherwise.
Operating Subsidiaries. Those Subsidiaries of the Borrower that, at any
time of reference, provide management, construction, design or other services
(excluding any such Subsidiary which may provide any such services which are
only incidental to that Subsidiary's ownership of one or more Real Estate), and
any successors or assigns of their respective businesses and/or assets which are
Subsidiaries of the Borrower or the Guarantors.
Opportunity Fund. An investment made after the date hereof by the
Borrower, any Guarantor or any Subsidiary which is designated at the time of
investment by the Borrower from time to time as an "Opportunity Fund" (including
an investment company); provided that (a) such investment would not jeopardize
MCRC's status as a REIT, (b) such investment is Without Recourse to the Person
making such investment and the liability of the Person making such investment is
limited solely (including in any insolvency proceeding affecting such Person) to
the amount so invested, (c) if the Person making such investment exercises any
management or control responsibilities, such management and/or control shall be
exercised through a so-called "bankruptcy-remote entity" and (d) such investment
complies with the requirements of ss.9.8(b) hereof.
Partially-Owned Entity(ies). Any of the partnerships, joint ventures and
other entities owning real estate assets (other than an Opportunity Fund) in
which MCRLP and/or MCRC
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collectively, directly or indirectly through its full or partial ownership of
another entity, own less than 100% of the equity interests, whether or not such
entity is required in accordance with GAAP to be consolidated with MCRLP for
financial reporting purposes.
PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of ERISA
and any successor entity or entities having similar responsibilities.
Permits. All governmental permits, licenses, and approvals necessary for
the lawful operation and maintenance of the Real Estate.
Permitted Event. The exclusion of a Guarantor (other than MCRC) or any
other Subsidiary or Operating Subsidiary as a Credit Party by the Borrower
solely for the purposes of the proceedings of a bankruptcy filed by or against
such Person and involving for all creditors of such bankruptcy a total
Indebtedness which is in an amount permitted within ss.12.1(f)(i) cumulatively
with any other then pending Permitted Event or other matter affecting
ss.12.1(f)(i). For purposes of a Permitted Event, the term "bankruptcy" shall
include all actions or proceedings described in ss.12.1(g) or ss.12.1(h). The
Borrower may exercise the provisions of ss.12.1 (last paragraph) for Permitted
Event(s) provided such exercise shall not allow for a breach of the limitation
on Permitted Events relating to ss.12.1(f)(i) or otherwise cause a Default or
Event of Default.
Permitted Liens. Liens, security interests and other encumbrances
permitted by ss.8.2.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government (or any
governmental agency or political subdivision thereof).
PSC. Prudential Securities Credit Corporation, and its successors and
assigns.
RCRA. See ss.6.18.
Real Estate. The fixed and tangible properties consisting of land,
buildings and/or other improvements owned or ground-leased as a lessee by the
Borrower, by any Guarantor or by any other entity in which the Borrower is the
holder of an equity interest at the relevant time of reference thereto,
including, without limitation, (i) the Unencumbered Properties at such time of
reference, and (ii) the real estate assets owned or ground-leased as a lessee by
each of the Partially-Owned Entities at such time of reference.
Record. The grid attached to any Note, or the continuation of such grid,
or any other similar record, including computer records, maintained by any
Lender with respect to any Loan.
Recourse. With reference to any obligation or liability, any liability or
obligation that is not Without Recourse to the obligor thereunder, directly or
indirectly. For purposes hereof, a Person shall not be deemed to be "indirectly"
liable for the liabilities or obligations of an obligor solely by
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reason of the fact that such Person has an ownership interest in such obligor,
provided that such Person is not otherwise legally liable, directly or
indirectly, for such obligor's liabilities or obligations (e.g., by reason of a
guaranty or contribution obligation, by operation of law or by reason of such
Person's being a general partner of such obligor).
Reimbursement Obligation. The Borrower's obligation to reimburse the
Lenders and the Administrative Agent and the Fronting Bank on account of any
drawing under any Letter of Credit as provided in ss.3.2. Notwithstanding the
foregoing, unless the Borrower shall notify the Administrative Agent of its
intent to repay the Reimbursement Obligation on the date of the related drawing
under any Letter of Credit as provided in ss.3.2, such Reimbursement Obligation
shall simultaneously with such drawing be converted to and become a Alternate
Base Rate Loan as set forth in ss.3.3.
REIT. A "real estate investment trust", as such term is defined in Section
856 of the Code.
Release. See ss.6.18(c)(iii).
Required Lenders. As of any date, the Lenders whose aggregate Commitments
constitute at least sixty-six and two-thirds percent (66-2/3%) of the Total
Commitment; provided that if the Total Commitment has been terminated by the
Lenders and no Revolving Credit Loans or Letters of Credit are outstanding, the
Required Lenders shall be the Lenders holding sixty-six and two-thirds percent
(66-2/3%) of the outstanding principal amount of the Competitive Bid Loans on
such date.
Revised Adjusted Unencumbered Property NOI. With respect to any fiscal
period for any Unencumbered Property, Adjusted Unencumbered Property NOI for
such Unencumbered Property for such period; minus (a) interest income relating
to such Unencumbered Property and (b) a management fee reserve in an amount
equal to three percent (3%) of total revenue (after deduction of interest income
of such Unencumbered Property for such period); plus (i) actual general and
administrative expenses to the extent included in Adjusted Unencumbered Property
NOI relating to such Unencumbered Property for such period and (ii) actual
management fees relating to such Unencumbered Property for such period.
Revised Consolidated Adjusted Net Income. For any period, Consolidated
Adjusted Net Income for such period; minus (a) interest income and (b) a
management fee reserve in an amount equal to three percent (3%) of consolidated
total revenue (after deduction of interest income of MCRC, the Borrower and
their respective Subsidiaries for such period), plus (i) actual general and
administrative expenses for such period to the extent included in Consolidated
Adjusted Net Income and (ii) actual management fees relating to Real Estate for
such period.
Revolving Credit LIBOR Rate Loan. A Revolving Credit Loan which is a LIBOR
Rate Loan.
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Revolving Credit Loan(s). Each and every revolving credit loan made or to
be made by the Lenders to the Borrower pursuant to ss.2.
Revolving Credit Notes. Collectively, the separate promissory notes of the
Borrower in favor of each Lender in substantially the form of Exhibit A hereto,
in the aggregate principal amount of the Total Commitment, dated as of the date
hereof or as of such later date as any Person becomes a Lender under this
Agreement, and completed with appropriate insertions, as each of such notes may
be amended and/or restated from time to time.
Revolving Credit Note Record. A Record with respect to the Revolving
Credit Notes.
S&P. Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc., and
its successors.
SARA. See ss.6.18.
SEC Filings. Collectively, (a) the MCRC's Annual Report on Form 10-K for
the year ended December 31, 1997, filed with the Securities and Exchange
Commission (the "SEC") pursuant to the Securities and Exchange Act of 1934, as
amended (the "Exchange Act"), (b) MCRC's Current Report on Form 8-K, dated
January 31, 1998, filed with the SEC pursuant to the Exchange Act, including all
amendments thereto and (c) MCRC's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1997 filed with the SEC pursuant to the Exchange
Act.
subsidiary. Any entity required to be consolidated with its direct or
indirect parent in accordance with GAAP.
Subsidiary. Any corporation, association, partnership, trust, or other
business entity of which the designated parent shall at any time own directly,
or indirectly through a Subsidiary or Subsidiaries, at least a majority (by
number of votes or controlling interests) of the outstanding voting interests or
at least a majority of the economic interests (including, in any case, the
Operating Subsidiaries and any entity required to be consolidated with its
designated parent in accordance with GAAP).
Subsidiary Guarantor. Any Guarantor other than MCRC. The Subsidiary
Guarantors on the Closing Date are listed on Schedule SG hereto.
Subsidiary Guaranty. Each Guaranty made from time to time by a Subsidiary
Guarantor in favor of the Administrative Agent and the Lenders in substantially
the form of Exhibit B hereto, pursuant to which such Subsidiary Guarantor
guarantees the unconditional payment and performance of the Obligations.
Syndication Agent. Fleet National Bank.
Third Debt Rating. MCRLP's long term unsecured debt rating from a Third
Rating Agency.
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Third Rating Agency. Duff & Phelps, Fitch's or another
nationally-recognized rating agency (other than S&P or Moody's) reasonably
satisfactory to the Administrative Agent.
Title Policies. For each Unencumbered Property, an ALTA standard form
title policy (or, if such form is not available, an equivalent form of title
insurance policy) of a reasonably current date or endorsed down to a reasonably
current date issued by a nationally-recognized title insurance company, insuring
that the Borrower or a Subsidiary Guarantor holds good and clear marketable fee
simple or leasehold title to such Unencumbered Property, subject only to
Permitted Liens.
Total Commitment. As of any date, the sum of the then-current Commitments
of the Lenders, which shall not at any time exceed $870,000,000, as such amount
may be increased pursuant to ss.2.2 hereof.
Type. As to any Revolving Credit Loan, its nature as a Alternate Base Rate
Loan or a LIBOR Rate Loan.
Unanimous Lender Approval. The written consent of each Lender that is a
party to this Agreement at the time of reference.
Unencumbered Property. Any Real Estate located in the United States that
on any date of determination: (a) is not subject to any Liens (including any
such Lien imposed by the organizational documents of the owner of such asset,
but excluding Permitted Liens), (b) is not the subject of a Disqualifying
Environmental Event, (c) has been improved with a Building or Buildings which
(1) have been issued a certificate of occupancy (where available) or is
otherwise lawfully occupied for its intended use, and (2) are fully operational,
including in each case, an Unencumbered Property that is being renovated and
such renovation is proceeding to completion without undue delay from Permit
denial, construction delays or otherwise, (d) is not in violation of the
covenant set forth in ss.7.9 hereof, and (e) is wholly owned or ground-leased
under an Eligible Ground Lease by the Borrower or a Guarantor that is a
wholly-owned Subsidiary.
Uniform Customs. With respect to any Letter of Credit, the Uniform Customs
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500, or any successor version thereof adopted by the
Administrative Agent in the ordinary course of its business as a letter of
credit issuer and in effect at the time of issuance of such Letter of Credit.
Unimproved Non-Income Producing Land. Any Real Estate consisting of raw
land which is unimproved by Buildings and does not generate any rental income or
other income for MCRC or the Borrower or any of their respective Subsidiaries.
Unrestricted Cash and Cash Equivalents. As of any date of determination,
the sum of (a) the aggregate amount of unrestricted cash then held by the
Borrower or any of its Subsidiaries and (b) the aggregate amount of unrestricted
cash equivalents (valued at fair market value) then held by the Borrower or any
of its Subsidiaries. As used in this definition, (i) "unrestricted" means the
specified
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asset is not subject to any Liens in favor of any Person and (ii) "cash
equivalents" includes overnight deposits and also means that such asset has a
liquid, par value in cash and is convertible to cash within 3 months.
Notwithstanding anything contained herein to the contrary, the term Unrestricted
Cash and Cash Equivalents shall not include the Commitments of the Lenders to
make Loans under this Agreement or any other commitments from which the access
to such cash or cash equivalents would create Indebtedness.
Unsecured Indebtedness. All Indebtedness of any Person that is not secured
by a Lien on any asset of such Person.
wholly-owned Subsidiary. Any Subsidiary (a) of which MCRLP and/or MCRC
shall at any time own directly or indirectly through a Subsidiary or
Subsidiaries at least a controlling majority (by number of votes or controlling
interests) of the outstanding voting interests and one hundred percent (100%) of
the economic interests, of which at least ninety-five percent (95%) of the
economic interests shall be owned by MCRLP and (b) of which MCRC directly or
indirectly (through wholly-owned Subsidiaries) acts as sole general partner or
managing member; provided that the Subsidiary Guarantors shall be wholly-owned
Subsidiaries.
"Without Recourse" or "without recourse". With reference to any obligation
or liability, any obligation or liability for which the obligor thereunder is
not liable or obligated other than as to its interest in a designated Real
Estate or other specifically identified asset only, subject to such limited
exceptions to the non-recourse nature of such obligation or liability, such as
fraud, misappropriation, misapplication and environmental indemnities, as are
usual and customary in like transactions involving institutional lenders at the
time of the incurrence of such obligation or liability.
ss.1.2. Rules of Interpretation.
(i) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to
time in accordance with its terms (and so amended, modified or
supplemented in accordance with this Agreement) or the terms of this
Agreement.
(ii) The singular includes the plural and the plural includes the
singular.
(iii) A reference to any law includes any amendment or modification
to such law.
(iv) A reference to any Person includes its permitted successors and
permitted assigns.
(v) Accounting terms (a) not otherwise defined herein have the
meanings assigned to them by GAAP applied on a consistent basis by the
accounting entity to which they refer and (b) shall not provide for double
counting of items included within such term.
(vi) The words "include", "includes" and "including" are not
limiting.
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(vii) All terms not specifically defined herein or by GAAP, which
terms are defined in the Uniform Commercial Code as in effect in New York,
have the meanings assigned to them therein.
(viii) Reference to a particular "ss." refers to that section of
this Agreement unless otherwise indicated.
(ix) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Agreement as a whole and not to any particular
section or subdivision of this Agreement.
(x) Any provision granting any right to the Borrower or any
Guarantor during the continuance of (a) an Event of Default shall not
modify, limit, waive or estopp the rights of the Lenders during the
continuance of such Event of Default, including the rights of the Lenders
to accelerate the Loans under ss.12.1 and the rights of the Lenders under
ss.ss.12.2 or 12.3, or (b) a Default, shall not extend the time for curing
same or modify any otherwise applicable notice regarding same.
(xi) As applied to Real Estate, the word "owns" includes the
ownership of the fee interest in such Real Estate or the tenant's interest
in a ground lease of such Real Estate.
ss.2. THE REVOLVING CREDIT FACILITY.
ss.2.1. Commitment to Lend. Subject to the provisions of ss.2.5 and the
other terms and conditions set forth in this Agreement, each of the Lenders
severally agrees to lend to the Borrower and the Borrower may borrow, repay, and
reborrow from each Lender from time to time from the Closing Date up to but not
including the Maturity Date upon notice by the Borrower to the Administrative
Agent given in accordance with ss.2.5 hereof, such sums as are requested by the
Borrower up to a maximum aggregate principal amount outstanding (after giving
effect to all amounts requested) at any one time equal to such Lender's
Commitment minus such Lender's Commitment Percentage of the Maximum Drawing
Amount; provided that the sum of the outstanding amount of the Revolving Credit
Loans (after giving effect to all amounts requested) and the Competitive Bid
Loans plus the Maximum Drawing Amount shall not at any time exceed the Total
Commitment in effect at such time.
The Revolving Credit Loans shall be made pro rata in accordance with each
Lender's Commitment Percentage. Each request for a Revolving Credit Loan made
pursuant to ss.2.5 hereof shall constitute a representation and warranty by the
Borrower that the conditions set forth in ss.10 have been satisfied as of the
Closing Date and that the conditions set forth in ss.11 have been satisfied on
the date of such request and will be satisfied on the proposed Drawdown Date of
the requested Revolving Credit Loan, provided that the making of such
representation and warranty by the Borrower shall not limit the right of any
Lender not to lend if such conditions have not been met. No Revolving Credit
Loan shall be required to be made by any Lender unless all of the conditions
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contained in ss.10 have been satisfied as of the Closing Date and all of the
conditions set forth in ss.11 have been met at the time of any request for a
Revolving Credit Loan. Notwithstanding the foregoing, the Borrower shall be able
to borrow under this Agreement during the occurrence of a Default or an Event of
Default arising solely from the Borrower's failure to comply with the provisions
of ss.7.22 if such borrowing is to cure, and will cure, such Default or Event of
Default without causing any other Default or Event of Default.
ss.2.2. Increase of Total Commitment. Unless a Default or an Event of
Default has occurred and is continuing, the Borrower, by written notice to the
Administrative Agent, may request on one occasion during the term of this
Agreement that the Total Commitment be increased by an amount not to exceed
$130,000,000 (to an amount not to exceed $1,000,000,000); provided that (a) any
Lender which is a party to this Agreement prior to such request for increase, at
its sole discretion, may elect to increase its Commitment but shall not have any
obligation to so increase its Commitment, and (b) in the event that each Lender
does not elect to increase its Commitment, the Arrangers shall use commercially
reasonable efforts to locate additional lenders willing to hold commitments for
the requested increase, and the Borrower may also identify additional lenders
willing to hold commitments for the requested increase, provided that the
Administrative Agent shall have the right to approve any such additional lender,
which approval will not be unreasonably withheld or delayed. In the event that
lenders commit to such increase the Total Commitment and the Commitments of the
Lenders shall be increased, the Commitment Percentages of the Lenders shall be
adjusted, new Notes shall be issued, and other changes shall be made to the Loan
Documents as may be necessary to reflect the aggregate amount, if any, by which
Lenders have agreed to increase their respective Commitments or make new
Commitments in response to the Borrower's request for an increase in the Total
Commitment pursuant to this ss.2.2. The fees payable by the Borrower upon any
such increase in the Total Commitment shall be agreed upon by the Arrangers and
the Borrower at the time of such increase.
Notwithstanding the foregoing, nothing in this ss.2.2 shall constitute or
be deemed to constitute an agreement by any Lender to increase its Commitment
hereunder.
ss.2.3. The Revolving Credit Notes. The Revolving Credit Loans shall be
evidenced by the Revolving Credit Notes. A Revolving Credit Note shall be
payable to the order of each Lender in an aggregate principal amount equal to
such Lender's Commitment. The Borrower irrevocably authorizes each Lender to
make or cause to be made, at or about the time of the Drawdown Date of any
Revolving Credit Loan or at the time of receipt of any payment of principal on
such Lender's Revolving Credit Notes, an appropriate notation on such Lender's
Revolving Credit Note Record reflecting the making of such Revolving Credit Loan
or (as the case may be) the receipt of such payment. The outstanding amount of
the Revolving Credit Loans set forth on such Lender's Revolving Credit Note
Record shall be prima facie evidence of the principal amount thereof owing and
unpaid to such Lender, but the failure to record, or any error in so recording,
any such amount on such Lender's Revolving Credit Note Record shall not limit or
otherwise affect the obligations of the Borrower hereunder or under any
Revolving Credit Note to make payments of principal of or interest on any
Revolving Credit Note when due. The Administrative Agent hereby agrees to
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provide the Borrower with a statement concerning the outstanding amount of the
Revolving Credit Loans, in reasonable detail, on a monthly basis. Although each
Revolving Credit Note shall be dated the Closing Date, interest in respect
thereof shall be payable only for the periods during which the Revolving Credit
Loans evidenced thereby to the Borrower are outstanding, and although the stated
amount of such Revolving Credit Notes shall be equal to the Total Commitment as
of the date hereof, such Revolving Credit Notes shall be enforceable, with
respect to obligations of the Borrower to pay the principal amount thereof, only
to the extent of the unpaid principal amount of the Revolving Credit Loans to
them as of any date of determination.
ss.2.4. Interest on Revolving Credit Loans; Fees.
(a) Interest on Alternate Base Rate Loans. Except as otherwise
provided in ss.4.9, each Alternate Base Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto (unless earlier paid in accordance with
ss.2.9) at a rate equal to the Alternate Base Rate plus the Applicable Margin
for Alternate Base Rate Loans, if any.
(b) Interest on Revolving Credit LIBOR Rate Loans. Except as
otherwise provided in ss.4.9, each Revolving Credit LIBOR Rate Loan shall bear
interest for the period commencing with the Drawdown Date thereof and ending on
the last day of the Interest Period with respect thereto (unless earlier paid in
accordance with ss.2.9) at a rate equal to the LIBOR Rate determined for such
Interest Period plus the Applicable Margin for Revolving Credit LIBOR Rate
Loans.
(c) Interest Payments. The Borrower unconditionally promises to pay
interest on each Revolving Credit Loan in arrears on each Interest Payment Date
with respect thereto.
(d) Certain Fees. The Borrower agrees to pay to the Administrative
Agent, the Syndication Agent and the Arrangers those certain fees as set forth
in that certain letter agreement dated as of March 10, 1998 between the
Borrower, the Administrative Agent and the Arrangers (the "Fee Letter").
(e) Commitment Fee. From and after the date hereof until the
earliest of (i) the Maturity Date, (ii) the date on which the Commitments
terminate, or (iii) the Borrower successfully makes and continues to qualify for
the Competitive Bid Loans Election, the Borrower agrees to pay to the
Administrative Agent, for the accounts of the Lenders in accordance with their
respective Commitment Percentages, a commitment fee in an amount equal to 0.175%
per annum of the Daily Unused Commitment, calculated during each calendar
quarter or portion thereof for the first calendar quarter of the term of this
Agreement and the last calendar quarter of the term of this Agreement, if either
of same is not a full calendar quarter from the date hereof to the Maturity Date
(the "Commitment Fee"). The Commitment Fee shall be payable quarterly in arrears
on the fifteenth (15th) day of each January, April, July and October quarter for
the immediately preceding calendar quarter commencing on the first such date
following the Closing Date, with a final payment on the
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earliest of (i) Maturity Date, (ii) any earlier date on which the Commitments
shall terminate or (iii) any earlier date on which the Borrower successfully
makes, and during the continued qualification for, the Competitive Bid Loans
Election.
(f) Facility Fee. From and after the date on which the Borrower
successfully makes and continues to qualify for the Competitive Bid Loans
Election, the Borrower agrees to pay to the Administrative Agent, for the
account of the Lenders based on their respective Commitment Percentages, a fee
(the "Facility Fee"), accruing at a per annum rate equal to 0.175% per annum of
the Total Commitment, such fee being payable quarterly, in arrears, on the
fifteenth (15th) day of each January, April, July, and October, commencing on
the first such day of the calendar quarter next succeeding the date on which the
Borrower successfully makes the Competitive Bid Loans Election. Upon the
Borrower's having successfully made, and during the continuance of its
qualification for, the Competitive Bid Loans Election, the Facility Fee shall be
in lieu of the Commitment Fee for the remaining term of this Agreement.
(g) Administrative Agent's Fee. The Borrower shall pay to the
Administrative Agent an Administrative Agent's fee as set forth in the Fee
Letter.
ss.2.5. Requests for Revolving Credit Loans.
The following provisions shall apply to each request by the Borrower for a
Revolving Credit Loan:
(i) The Borrower shall submit a Completed Revolving Credit Loan
Request to the Administrative Agent as provided in this ss.2.5. Except as
otherwise provided herein, each Completed Revolving Credit Loan Request
shall be in a minimum amount of $2,000,000 or an integral multiple of
$500,000 in excess thereof. Each Completed Revolving Credit Loan Request
shall be irrevocable and binding on the Borrower and shall obligate the
Borrower to accept the Revolving Credit Loans requested from the Lenders
on the proposed Drawdown Date, unless such Completed Revolving Credit Loan
Request is withdrawn (x) in the case of a request for a Revolving Credit
LIBOR Rate Loan, at least three (3) Business Days prior to the proposed
Drawdown Date for such Revolving Credit Loan, and (y) in the case of a
request for a Alternate Base Rate Loan, at least one (1) Business Day
prior to the proposed Drawdown Date for such Revolving Credit Loan.
(ii) Each Completed Revolving Credit Loan Request may be delivered
by the Borrower to the Administrative Agent by 12:00 p.m. noon (New York
City time) on any Business Day, and at least one (1) Business Day prior to
the proposed Drawdown Date of any Alternate Base Rate Loan, and at least
three (3) Business Days prior to the proposed Drawdown Date of any
Revolving Credit LIBOR Rate Loan.
(iii) Each Completed Revolving Credit Loan Request shall include a
completed writing in the form of Exhibit C hereto specifying: (1) the
principal amount of the Revolving
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Credit Loan requested, (2) the proposed Drawdown Date of such Revolving
Credit Loan, (3) the Interest Period applicable to such Revolving Credit
Loan, and (4) the Type of such Revolving Credit Loan being requested.
(iv) No Lender shall be obligated to fund any Revolving Credit Loan
unless:
(a) a Completed Revolving Credit Loan Request has been timely
received by the Administrative Agent as provided in subsection (i)
above; and
(b) both before and after giving effect to the Revolving
Credit Loan to be made pursuant to the Completed Revolving Credit
Loan Request, all of the conditions contained in ss.10 shall have
been satisfied as of the Closing Date and all of the conditions set
forth in ss.11 shall have been met, including, without limitation,
the condition under ss.11.1 that there be no Default or Event of
Default under this Agreement (provided that notwithstanding the
foregoing, the Borrower shall be able to borrow under this Agreement
during the occurrence of a Default or an Event of Default arising
solely from the Borrower's failure to comply with the provisions of
ss.7.22 if such borrowing is to cure, and will cure, such Default or
Event of Default without causing any other Default or Event of
Default); and
(c) the Administrative Agent shall have received a certificate
in the form of Exhibit D hereto signed by the chief financial
officer or treasurer or vice president of finance or other thereon
designated officer of the Borrower setting forth computations
evidencing compliance with the covenants contained in ss.ss.9.1 and
9.6 on a pro forma basis after giving effect to such requested
Revolving Credit Loan (including, to the extent necessary to
evidence compliance thereunder, the estimated results for all Real
Estate to be acquired with the proceeds of such requested Revolving
Credit Loan), and, certifying that, both before and after giving
effect to such requested Revolving Credit Loan, no Default or Event
of Default exists or will exist under this Agreement or any other
Loan Document (other than a Default or Event of Default arising
solely from the Borrower's failure to comply with ss.7.22 as
permitted in the proviso at the end of clause (b) above), and that
after taking into account such requested Revolving Credit Loan, no
Default or Event of Default will exist as of the Drawdown Date or
thereafter.
(v) The Administrative Agent will cause the Completed Revolving
Credit Loan Request (and the Certificate in the form of Exhibit D) to be
delivered to each Lender in accordance with ss.14.12 and in any event on
the same day or the Business Day following the day a Completed Revolving
Credit Loan Request is received by the Administrative Agent.
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ss.2.6. Conversion Options.
(a) The Borrower may elect from time to time by delivering a
Conversion Request in the form of Exhibit L to convert any outstanding Revolving
Credit Loan to a Revolving Credit Loan of another Type, provided that (i) with
respect to any such conversion of a Revolving Credit LIBOR Rate Loan to a
Alternate Base Rate Loan, the Borrower shall give the Administrative Agent at
least three (3) Business Days prior written notice of such election; (ii) with
respect to any such conversion of a Alternate Base Rate Loan to a Revolving
Credit LIBOR Rate Loan, the Borrower shall give the Administrative Agent at
least three (3) LIBOR Business Days prior written notice of such election; (iii)
with respect to any such conversion of a Revolving Credit LIBOR Rate Loan into a
Alternate Base Rate Loan, such conversion shall only be made on the last day of
the Interest Period with respect thereto unless the Borrower pays the related
LIBOR Breakage Costs at the time of such conversion and (iv) no Revolving Credit
Loan may be converted into a Revolving Credit LIBOR Rate Loan when any Default
or Event of Default has occurred and is continuing. All or any part of
outstanding Revolving Credit Loans of any Type may be converted into a Revolving
Credit Loan of another Type as provided herein, provided that any partial
conversion shall be in an aggregate principal amount of $2,000,000 or a integral
multiple of $500,000 in excess thereof. Each Conversion Request relating to the
conversion of a Alternate Base Rate Loan to a Revolving Credit LIBOR Rate Loan
shall be irrevocable by the Borrower.
(b) Any Revolving Credit Loan of any Type may be continued as such
upon the expiration of the Interest Period with respect thereto (i) in the case
of Alternate Base Rate Loans, automatically and (ii) in the case of Revolving
Credit LIBOR Rate Loans by compliance by the Borrower with the notice provisions
contained in ss.2.6(a) or (c); provided that no Revolving Credit LIBOR Rate Loan
may be continued as such when any Default or Event of Default has occurred and
is continuing but shall be automatically converted to a Alternate Base Rate Loan
on the last day of the first Interest Period relating thereto ending during the
continuance of any Default or Event of Default. The Administrative Agent shall
notify the Lenders promptly when any such automatic conversion contemplated by
this ss.2.6(b) is scheduled to occur.
(c) In the event that the Borrower does not notify the
Administrative Agent of its election hereunder with respect to the continuation
of any Revolving Credit LIBOR Rate Loan as such, the affected Revolving Credit
LIBOR Rate Loan shall automatically be continued as a Revolving Credit LIBOR
Rate Loan with an Interest Period of one (1) month at the end of the applicable
Interest Period other than during the continuance of a Default or Event of
Default, in which case it will be continued as a Alternate Base Rate Loan at the
end of the applicable Interest Period. In such event, the Borrower shall be
deemed to have requested a Revolving Credit LIBOR Rate Loan hereunder and shall
be subject to all provisions of this Agreement relating to LIBOR Rate Loans,
including, without limitation, those set forth in ss.ss.4.5, 4.6, and 4.8
hereof.
(d) The Borrower may not request or elect a Revolving Credit LIBOR
Rate Loan pursuant to ss.2.5, elect to convert a Alternate Base Rate Loan to a
Revolving Credit LIBOR Rate Loan pursuant to ss.2.6(a), elect to continue a
Revolving Credit LIBOR Rate Loan pursuant to ss.2.6(b)
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or have continued a Revolving Credit LIBOR Rate Loan pursuant to ss.2.6(c) if,
after giving effect thereto, there would be greater than twelve (12) Revolving
Credit LIBOR Rate Loans then outstanding. Any Loan Request for a Revolving
Credit LIBOR Rate Loan that would create greater than twelve (12) Revolving
Credit LIBOR Rate Loans outstanding shall be deemed to be a Loan Request for a
Alternate Base Rate Loan.
ss.2.7. Funds for Revolving Credit Loans.
(a) Subject to the other provisions of this ss.2, not later than
12:00 p.m. (New York City time) on the proposed Drawdown Date of any Revolving
Credit Loan, each of the Lenders will make available to the Administrative
Agent, at the Administrative Agent's Head Office, in immediately available
funds, the amount of such Lender's Commitment Percentage of the amount of the
requested Revolving Credit Loan; provided that each Lender shall provide notice
to the Administrative Agent of its intent not to make available its Commitment
Percentage of any requested Revolving Credit Loan as soon as possible after
receipt of any Completed Revolving Credit Loan Request, and in any event not
later than 4:00 p.m. (New York City time) on (x) the Business Day prior to the
Drawdown Date of any requested Alternate Base Rate Loan and (y) the third
Business Day prior to the Drawdown Date of any requested Revolving Credit LIBOR
Rate Loan. Upon receipt from each Lender of such amount, the Administrative
Agent will make available to the Borrower, in the Borrower's account with the
Administrative Agent or as otherwise directed to the Administrative Agent by the
Borrower, the aggregate amount of such Revolving Credit Loan made available to
the Administrative Agent by the Lenders; all such funds received by the
Administrative Agent by 12:00 p.m. (New York City time) on any Business Day will
be made available to the Borrower not later than 2:00 p.m. on the same Business
Day. Funds received after such time will be made available by not later than
12:00 p.m. on the next Business Day. The Administrative Agent hereby agrees to
promptly provide the Borrower with a statement confirming the particulars of
each Revolving Credit LIBOR Rate Loan, in reasonable detail, when each such Loan
is made. The failure or refusal of any Lender to make available to the
Administrative Agent at the aforesaid time and place on any Drawdown Date the
amount of its Commitment Percentage of the requested Revolving Credit Loan shall
not relieve any other Lender from its several obligation hereunder to make
available to the Administrative Agent the amount of its Commitment Percentage of
any requested Revolving Credit Loan but in no event shall the Administrative
Agent (in its capacity as Administrative Agent) have any obligation to make any
funding or shall any Lender be obligated to fund more than its Commitment
Percentage of the requested Revolving Credit Loan or to increae its Commitment
Percentage on account of such failure or otherwise.
(b) The Administrative Agent may, unless notified to the contrary by
any Lender prior to a Drawdown Date, assume that such Lender has made available
to the Administrative Agent on such Drawdown Date the amount of such Lender's
Commitment Percentage of the Revolving Credit Loan to be made on such Drawdown
Date, and the Administrative Agent may (but it shall not be required to), in
reliance upon such assumption, make available to the Borrower a corresponding
amount. If any Lender makes available to the Administrative Agent such amount on
a date after such Drawdown Date, such Lender shall pay to the Administrative
Agent on demand an amount
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equal to the product of (i) the average, computed for the period referred to in
clause (iii) below, of the weighted average interest rate paid by the
Administrative Agent for federal funds acquired by the Administrative Agent
during each day included in such period, multiplied by (ii) the amount of such
Lender's Commitment Percentage of such Revolving Credit Loan, multiplied by
(iii) a fraction, the numerator of which is the number of days that elapsed from
and including such Drawdown Date to the date on which the amount of such
Lender's Commitment Percentage of such Revolving Credit Loan shall become
immediately available to the Administrative Agent, and the denominator of which
is 360. A statement of the Administrative Agent submitted to such Lender with
respect to any amounts owing under this paragraph shall be prima facie evidence
of the amount due and owing to the Administrative Agent by such Lender. If the
amount of such Lender's Commitment Percentage of such Revolving Credit Loans is
not made available to the Administrative Agent by such Lender within three (3)
Business Days following such Drawdown Date, the Administrative Agent shall be
entitled to recover such amount from the Borrower on demand, with interest
thereon at the rate per annum applicable to the Revolving Credit Loans made on
such Drawdown Date.
ss.2.8. Repayment of the Revolving Credit Loans at Maturity. The Borrower
promises to pay on the Maturity Date, and there shall become absolutely due and
payable on the Maturity Date, all unpaid principal of the Revolving Credit Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon, the unpaid balance of the Commitment Fee or Facility Fee accrued
through such date, and any and all other unpaid amounts due under this
Agreement, the Revolving Credit Notes or any other of the Loan Documents.
ss.2.9. Optional Repayments of Revolving Credit Loans. The Borrower shall
have the right, at its election, to prepay the outstanding amount of the
Revolving Credit Loans, in whole or in part, at any time without penalty or
premium; provided that the outstanding amount of any Revolving Credit LIBOR Rate
Loans may not be prepaid unless the Borrower pays any LIBOR Breakage Costs for
each Revolving Credit LIBOR Rate Loan so prepaid at the time of such prepayment.
The Borrower shall give the Administrative Agent, no later than 11:00 a.m., New
York City time, at least one (1) Business Day's prior written notice of any
prepayment pursuant to this ss.2.9 of any Alternate Base Rate Loans, and at
least three (3) LIBOR Business Days' notice of any proposed prepayment pursuant
to this ss.2.9 of Revolving Credit LIBOR Rate Loans, specifying the proposed
date of prepayment of Revolving Credit Loans and the principal amount to be
prepaid. Each such partial prepayment shall be in an amount of $2,000,000 or
integral multiple of $500,000 in excess thereof or, if less, the outstanding
balance of the Revolving Credit Loans then being repaid, shall be accompanied by
the payment of all charges outstanding on all Revolving Credit Loans so prepaid
and of all accrued interest on the principal prepaid to the date of payment, and
shall be applied, in the absence of instruction by the Borrower, first to the
principal of Alternate Base Rate Loans and then to the principal of Revolving
Credit LIBOR Rate Loans, at the Administrative Agent's option.
ss.2A. COMPETITIVE BID LOANS.
ss.2A.1. The Competitive Bid Options. In addition to the Revolving Credit
Loans made pursuant to ss.2 hereof, and provided that the Borrower has made the
Competitive Bid Loans Election
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and that at the time of such request no Default or Event of Default has occurred
and is continuing and MCRLP maintains an Investment Grade Credit Rating from two
nationally-recognized rating agencies reasonably acceptable to the
Administrative Agent (one of which must be Moody's or S&P so long as such
Persons are in the business of providing debt ratings for the REIT industry),
the Borrower may request Competitive Bid Loans pursuant to the terms of this
ss.2A. The Lenders may, but shall have no obligation to, make such offers and
the Borrower may, but shall have no obligation to, accept such offers in the
manner set forth in this ss.2A. Notwithstanding any other provision herein to
the contrary, at no time shall the aggregate principal amount of Competitive Bid
Loans outstanding at any time exceed the lesser of (a) the Total Commitment
minus the sum of (i) the aggregate outstanding principal amount of Revolving
Credit Loans, plus (ii) the Maximum Drawing Amount of Letters of Credit
outstanding at such time, or (b) $350,000,000.
ss.2A.2. Competitive Bid Loan Accounts: Competitive Bid Notes.
(a) The obligation of the Borrower to repay the outstanding
principal amount of any and all Competitive Bid Loans, plus interest at the
applicable Competitive Bid Rate or the sum of the Competitive Bid Margin plus
the applicable LIBOR Rate (as the case may be) accrued thereon, shall be
evidenced by this Credit Agreement and by individual loan accounts (the
"Competitive Bid Loan Accounts" and individually, a "Competitive Bid Loan
Account") maintained by the Administrative Agent on its books for each of the
Lenders, it being the intention of the parties hereto that, except as provided
for in paragraph (b) of this ss.2A.2, the Borrower's obligations with respect to
Competitive Bid Loans are to be evidenced only as stated herein and not by
separate promissory notes and shall hereby constitute an absolute promise to pay
when due, without notice, demand, presentment or setoff.
(b) Any Lender may at any time, and from time to time, request that
any Competitive Bid Loans outstanding to such Lender be evidenced by a
promissory note of the Borrower in substantially the form of Exhibit G hereto
(each, a "Competitive Bid Note"), dated as of the Closing Date and completed
with appropriate insertions. One Competitive Bid Note shall be payable to the
order of each Lender in an amount equal to the principal amount of the
Competitive Bid Loan made by such Lender to the Borrower, and representing the
obligation of the Borrower to pay such Lender such principal amount or, if less,
the outstanding principal amount of any and all Competitive Bid Loans made by
such Lender, plus interest at the applicable Competitive Bid Rate or the sum of
the Competitive Bid Margin plus the applicable LIBOR Rate accrued thereon, as
set forth herein. Upon execution and delivery by the Borrower of a Competitive
Bid Note, the Borrower's obligation to repay any and all Competitive Bid Loans
made to them by such Lender and all interest thereon shall thereafter be
evidenced by such Competitive Bid Note.
(c) The Borrower irrevocably authorizes (i) each Lender to make or
cause to be made, in connection with a Drawdown Date of any Competitive Bid Loan
or at the time of receipt of any payment of principal on such Lender's
Competitive Bid Note in the case of a Competitive Bid Note, and (ii) the
Administrative Agent to make or cause to be made, in connection with a Drawdown
Date of any Competitive Bid Loan or at the time of receipt of any payment of
principal
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on such Lender's Competitive Bid Loan Account in the case of a Competitive Bid
Loan Account, an appropriate notation on such Lender's records or on the
schedule attached to such Lender's Competitive Bid Note or a continuation of
such schedule attached thereto, or the Administrative Agent's records, as
applicable, reflecting the making of the Competitive Bid Loan or the receipt of
such payment (as the case may be) and may, prior to any transfer of a
Competitive Bid Note, endorse on the reverse side thereof the outstanding
principal amount of Competitive Bid Loans evidenced thereby. The outstanding
amount of the Competitive Bid Loans set forth on such Lender's record or the
Administrative Agent's records, as applicable, shall be prima facie evidence of
the principal amount thereof owing and unpaid to such Lender, but the failure to
record, or any error in so recording, any such amount shall not limit or
otherwise affect the obligations of the Borrower hereunder to make payments of
principal of or interest on any Competitive Bid Loan when due.
ss.2A.3. Competitive Bid Quote Request; Invitation for Competitive Bid
Quotes.
(a) When the Borrower wishes to request offers to make Competitive
Bid Loans under this ss.2A, it shall transmit to the Administrative Agent by
telex or facsimile a Competitive Bid Quote Request substantially in the form of
Exhibit H hereto (a "Competitive Bid Quote Request") so as to be received no
later than 11:00 a.m. (New York City time) (i) five (5) Business Days prior to
the requested Drawdown Date in the case of a Competitive Bid Loan bearing
interest calculated by reference to the LIBOR Rate (a "LIBOR Competitive Bid
Loan") or (ii) one (1) Business Day prior to the requested Drawdown Date in the
case of an Competitive Bid Loan bearing interest calculated by reference to a
fixed rate of interest (an "Absolute Competitive Bid Loan"), specifying:
(A) the requested Drawdown Date (which must be a Business
Day);
(B) the aggregate amount of such Competitive Bid Loans, which
shall be $5,000,000 or larger multiple of $1,000,000;
(C) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period; and
(D) whether the Competitive Bid Quotes requested are for LIBOR
Competitive Bid Loans or Absolute Competitive Bid Loans.
The Borrower may request offers to make Competitive Bid Loans for more than one
Interest Period in a single Competitive Bid Quote Request. No new Competitive
Bid Quote Request shall be given until the Borrower has notified the
Administrative Agent of its acceptance or non-acceptance of the Competitive Bid
Quotes relating to any outstanding Competitive Bid Quote Request.
(b) Promptly upon receipt of a Competitive Bid Quote Request, the
Administrative Agent shall send to the Lenders by telecopy or facsimile
transmission an Invitation for Competitive Bid Quotes substantially in the form
of Exhibit I hereto, which shall constitute an
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invitation by the Borrower to each Lender to submit Competitive Bid Quotes in
accordance with this ss.2A.
ss.2A.4. Alternative Manner of Procedure. If, after receipt by the
Administrative Agent and each of the Lenders of a Competitive Bid Quote Request
from the Borrower in accordance with ss.2A.3, the Administrative Agent or any
Lender shall be unable to complete any procedure of the auction process
described in ss.ss.2A.5 through 2A.6 (inclusive) due to the inability of such
Person to transmit or receive communications through the means specified
therein, such Person may rely on telephonic notice for the transmission or
receipt of such communications. In any case where such Person shall rely on
telephone transmission or receipt, any communication made by telephone shall, as
soon as possible thereafter, be followed by written confirmation thereof.
ss.2A.5. Submission and Contents of Competitive Bid Quotes.
(a) Each Lender may, but shall be under no obligation to, submit a
Competitive Bid Quote containing an offer or offers to make Competitive Bid
Loans in response to any Competitive Bid Quote Request. Each Competitive Bid
Quote must comply with the requirements of this ss.2A.5 and must be submitted to
the Administrative Agent by telex or facsimile transmission at its offices as
specified in or pursuant to ss.19 not later than (i) 2:00 p.m. (New York City
time) on the fourth LIBOR Business Day prior to the proposed Drawdown Date, in
the case of a LIBOR Competitive Bid Loan or (ii) 10:00 a.m. (New York City time)
on the proposed Drawdown Date, in the case of an Absolute Competitive Bid Loan,
provided that Competitive Bid Quotes may be submitted by the Administrative
Agent in its capacity as a Lender only if it submits its Competitive Bid Quote
to the Borrower not later than (x) one hour prior to the deadline for the other
Lenders, in the case of a LIBOR Competitive Bid Loan or (y) 15 minutes prior to
the deadline for the other Lenders, in the case of an Absolute Competitive Bid
Loan. Subject to the provisions of ss.ss.10 and 11 hereof, any Competitive Bid
Quote so made shall be irrevocable except with the written consent of the
Administrative Agent given on the instructions of the Borrower.
(b) Each Competitive Bid Quote shall be in substantially the form of
Exhibit J hereto and shall in any case specify:
(i) the proposed Drawdown Date;
(ii) the principal amount of the Competitive Bid Loan for
which each proposal is being made, which principal amount (w) may be greater
than or less than the Commitment of the quoting Lender, (x) must be $1,000,000
or a larger multiple of $500,000, (y) may not exceed the aggregate principal
amount of Competitive Bid Loans for which offers were requested and (z) may be
subject to an aggregate limitation as to the principal amount of Competitive Bid
Loans for which offers being made by such quoting Lender may be accepted;
(iii) the Interest Periods for which Competitive Bid Quotes
are being submitted;
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(iv) in the case of a LIBOR Competitive Bid Loan, the margin
above or below the applicable LIBOR Rate (the "Competitive Bid Margin") offered
for each such Competitive Bid Loan, expressed as a percentage (specified to the
nearest 1/10,000th of 1%) to be added to or subtracted from such LIBOR Rate;
(v) in the case of an Absolute Competitive Bid Loan, the rate
of interest per annum (specified to the nearest 1/10,000th of 1%) (the
"Competitive Bid Rate") offered for each such Absolute Competitive Bid Loan; and
(vi) the identity of the quoting Lender.
A Competitive Bid Quote may include up to five (5) separate offers by the
quoting Lender with respect to each Interest Period specified in the related
Invitation for Competitive Bid Quotes.
(c) Any Competitive Bid Quote shall be disregarded if it:
(i) is not substantially in the form of Exhibit J hereto;
(ii) contains qualifying, conditional or similar language;
(iii) proposes terms other than or in addition to those set
forth in the applicable Invitation for Competitive Bid Quotes; or
(iv) arrives after the time set forth in ss.2A.5(a) hereof.
ss.2A.6. Notice to Borrower. The Administrative Agent shall promptly
notify the Borrower of the terms (a) of any Competitive Bid Quote submitted by a
Lender that is in accordance with ss.2A.5 and (b) of any Competitive Bid Quote
that amends, modifies or is otherwise inconsistent with a previous Competitive
Bid Quote submitted by such Lender with respect to the same Competitive Bid
Quote Request. Any such subsequent Competitive Bid Quote shall be disregarded by
the Administrative Agent unless such subsequent Competitive Bid Quote is
submitted solely to correct a manifest error in such former Competitive Bid
Quote and was received by the Administrative Agent within the time period
required in ss.2A.5(a) for receipt of Competitive Bid Quotes. The Administrative
Agent's notice to the Borrower shall specify (i) the aggregate principal amount
of Competitive Bid Loans for which offers have been received for each Interest
Period specified in the related Competitive Bid Quote Request, (ii) the
respective principal amounts and Competitive Bid Margins or Competitive Bid
Rates, as the case may be, so offered, and the identity of the respective
Lenders submitting such offers, and (iii) if applicable, limitations on the
aggregate principal amount of Competitive Bid Loans for which offers in any
single Competitive Bid Quote may be accepted.
ss.2A.7. Acceptance and Notice by Borrower and Administrative Agent. Not
later than 11:00 a.m. (New York City time) on (a) the third Business Day prior
to the proposed Drawdown Date, in the case of a LIBOR Competitive Bid Loan or
(b) the proposed Drawdown
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Date, in the case of an Absolute Competitive Bid Loan, the Borrower shall notify
the Administrative Agent of its acceptance or non-acceptance of each Competitive
Bid Quote in substantially the form of Exhibit K hereto. The Borrower may accept
any Competitive Bid Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Competitive Bid
Loan may not exceed the applicable amount set forth in the related Competitive
Bid Quote Request;
(ii) acceptance of offers may only be made on the basis of
ascending Competitive Bid Margins or Competitive Bid Rates, as the case may be,
and
(iii) the Borrower may not accept any offer that is described
in subsection 2A.5(c) or that otherwise fails to comply with the requirements of
this Agreement.
The Administrative Agent shall promptly notify each Lender which submitted a
Competitive Bid Quote of the Borrower's acceptance or non-acceptance thereof. At
the request of any Lender which submitted a Competitive Bid Quote and with the
consent of the Borrower, the Administrative Agent will promptly notify all
Lenders which submitted Competitive Bid Quotes of (a) the aggregate principal
amount of, and (b) the range of Competitive Bid Rates or Competitive Bid Margins
of, the accepted Competitive Bid Loans for each requested Interest Period.
ss.2A.8. Allocation by Administrative Agent. If offers are made by two (2)
or more Lenders with the same Competitive Bid Margin or Competitive Bid Rate, as
the case may be, for a greater aggregate principal amount than the amount in
respect of which offers are accepted for the related Interest Period, the
principal amount of Competitive Bid Loans in respect of which such offers are
accepted shall be allocated by the Administrative Agent among such Lenders as
nearly as possible (in such multiples, not less than $1,000,000, as the
Administrative Agent may deem appropriate) in proportion to the aggregate
principal amounts of such offers. Determination by the Administrative Agent of
the amounts of Competitive Bid Loans shall be conclusive in the absence of
manifest error.
ss.2A.9. Funding of Competitive Bid Loans. If, on or prior to the Drawdown
Date of any Competitive Bid Loan, the Total Commitment has not terminated in
full and if, on such Drawdown Date, the applicable conditions of ss.ss.10 and 11
hereof are satisfied, and the Administrative Agent shall have received a
certificate in the form of Exhibit D hereto, the Lender or Lenders whose offers
the Borrower has accepted will fund each Competitive Bid Loan so accepted.
Notwithstanding the foregoing, the Borrower shall be able to borrow under this
Agreement during the occurrence of a Default or an Event of Default arising
solely from the Borrower's failure to comply with the provisions of ss.7.22 if
such borrowing is to cure, and will cure, such Default or Event of Default
without causing any other Default or Event of Default. Such Lender or Lenders
will make such Competitive Bid Loans by crediting the Administrative Agent for
further credit to the Borrower's specified account with the
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Administrative Agent, in immediately available funds not later than 1:00 p.m.
(New York City time) on such Drawdown Date.
ss.2A.10. Funding Losses. If, after acceptance of any Competitive Bid
Quote pursuant to ss.2A, the Borrower (a) fails to borrow any Competitive Bid
Loan so accepted on the date specified therefor, or (b) repays the outstanding
amount of the Competitive Bid Loan on or prior to the last day of the Interest
Period relating thereto, the Borrower shall indemnify the Lender making such
Competitive Bid Quote or funding such Competitive Bid Loan against any loss or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund or maintain such unborrowed Loans,
including, without limitation compensation as provided in ss.4.8.
ss.2A.11. Repayment of Competitive Bid Loans; Interest. The principal of
each Competitive Bid Loan shall become absolutely due and payable by the
Borrower on the last day of the Interest Period relating thereto, and the
Borrower hereby absolutely and unconditionally promises to pay to the
Administrative Agent for the account of the relevant Lenders at or before 1:00
p.m. (New York City time) on the last day of the Interest Periods relating
thereto the principal amount of all such Competitive Bid Loans, plus interest
thereon at the applicable Competitive Bid Rates or the sum of the Competitive
Bid Margin plus the applicable LIBOR Rate (as the case may be). The Competitive
Bid Loans shall bear interest at the rate per annum specified in the applicable
Competitive Bid Quotes. Interest on the Competitive Bid Loans shall be payable
(a) on the last day of the applicable Interest Periods, and if any such Interest
Period is longer than three months, also on the last day of the third month
following the commencement of such Interest Period, and (b) on the Maturity Date
for all Loans. Subject to the terms of this Credit Agreement, the Borrower may
make Competitive Bid Quote Requests with respect to new borrowings of any
amounts so repaid prior to the Maturity Date. The provisions of ss.2.6 shall not
apply to Competitive Bid Loans.
ss.2A.12. Optional Repayment of Competitive Bid Loans. The Borrower shall
have the right, at its election, to repay the outstanding amount of any of the
Competitive Bid Loans, as a whole or in part, at any time without penalty or
premium, provided that any full or partial prepayment of the outstanding amount
of any Competitive Bid Loan pursuant to this ss.2A.12 may be made only on the
last day of the Interest Period relating thereto, or, if made prior to such
date, shall be made subject to the provisions of ss.2A.10 hereof. The Borrower
shall give the Administrative Agent no less than three (3) Business Days notice
of any proposed prepayment pursuant to this ss.2A.12, specifying the proposed
date of prepayment of the Competitive Bid Loan and the principal amount to be
prepaid. Each such partial prepayment of any Competitive Bid Loan shall be in an
integral multiple of $500,000, and shall be accompanied by the payment of
accrued interest on the principal prepaid to the date of prepayment.
ss.3. LETTERS OF CREDIT.
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ss.3.1. Letter of Credit Commitments.
ss.3.1.1. Commitment to Issue Letters of Credit. Subject to the
terms and conditions hereof and the execution and delivery by the Borrower of a
letter of credit application on the Fronting Bank's customary form as part of a
Completed Revolving Credit Loan Request (a "Letter of Credit Application"), the
Fronting Bank on behalf of the Lenders and in reliance upon the agreement of the
Lenders set forth in ss.3.1.4 and upon the representations and warranties of the
Borrower contained herein, agrees, in its individual capacity, to issue, extend
and renew for the account of the Borrower one or more standby or documentary
letters of credit (individually, a "Letter of Credit"), in such form as may be
requested from time to time by the Borrower and reasonably agreed to by the
Fronting Bank; provided, however, that, after giving effect to such Completed
Revolving Credit Loan Request, (a) the Maximum Drawing Amount shall not exceed
$100,000,000 at any one time, (b) the sum of (i) the Maximum Drawing Amount on
all Letters of Credit and (ii) the amount of all Revolving Credit Loans and
Competitive Bid Loans outstanding shall not exceed the Total Commitment in
effect at such time, and (c) the total number of Letters of Credit outstanding
shall not exceed twenty (20).
ss.3.1.2. Letter of Credit Applications. Each Letter of Credit
Application shall be completed to the reasonable satisfaction of the
Administrative Agent and the Fronting Bank. In the event that any provision of
any Letter of Credit Application shall be inconsistent with any provision of
this Agreement (including provisions applicable to a Completed Revolving Credit
Loan Request), then the provisions of this Agreement shall, to the extent of any
such inconsistency, govern.
ss.3.1.3. Terms of Letters of Credit. Each Letter of Credit issued,
extended or renewed hereunder shall, among other things, (i) provide for the
payment of sight drafts for honor thereunder when presented in accordance with
the terms thereof and when accompanied by the documents described therein, and
(ii) have an expiry date no later than the earlier of (x) one year from the date
of issuance or (y) the date which is thirty (30) days prior to the Maturity
Date. Each Letter of Credit so issued, extended or renewed shall be subject to
the Uniform Customs.
ss.3.1.4. Reimbursement Obligations of Lenders. Each Lender
severally agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other condition precedent
whatsoever, to the extent of such Lender's Commitment Percentage, to reimburse
the Fronting Bank on demand pursuant to ss.3.3 for the amount of each draft paid
by the Fronting Bank under each Letter of Credit to the extent that such amount
is not reimbursed by the Borrower pursuant to ss.3.2 (such agreement for a
Lender being called herein the "Letter of Credit Participation" of such Lender).
ss.3.2. Reimbursement Obligation of the Borrower. In order to induce the
Fronting Bank to issue, extend and renew each Letter of Credit and the Lenders
to participate therein,
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the Borrower hereby agrees, except as contemplated in ss.3.3 below, to reimburse
or pay to the Fronting Bank, for the account of the Fronting Bank or (as the
case may be) the Lenders, with respect to each Letter of Credit issued, extended
or renewed by the Fronting Bank hereunder,
(a) except as otherwise expressly provided in ss.3.2(b) or ss.3.3,
on each date that any draft presented under such Letter of Credit is honored in
accordance with its terms by the Fronting Bank, or the Fronting Bank otherwise
makes a payment with respect thereto in accordance with applicable law, (i) the
amount paid by the Fronting Bank under or with respect to such Letter of Credit,
and (ii) any amounts payable pursuant to ss.4.5 hereof under, or with respect
to, such Letter of Credit, and
(b) upon the termination of the Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all Letters of
Credit in accordance with ss.12, an amount equal to the then Maximum Drawing
Amount on all Letters of Credit, which amount shall be held by the
Administrative Agent as cash collateral for the benefit of the Fronting Bank,
the Lenders and the Administrative Agent for all Reimbursement Obligations.
Each such payment shall be made to the Administrative Agent at the
Administrative Agent's Head Office in immediately available funds. Interest on
any and all amounts not converted to a Revolving Credit Loan pursuant to ss.3.3
and remaining unpaid by the Borrower under this ss.3.2 at any time from the date
such amounts become due and payable (whether as stated in this ss.3.2, by
acceleration or otherwise) until payment in full (whether before or after
judgment) shall be payable to the Administrative Agent for the benefit of the
Lenders on demand at the rate specified in ss.4.9 for overdue principal on the
Revolving Credit Loans.
ss.3.3. Letter of Credit Payments; Funding of a Loan. If any draft shall
be presented or other demand for payment shall be made under any Letter of
Credit, the Fronting Bank shall notify the Borrower and the Lenders of the date
and amount of the draft presented or demand for payment and of the date and time
when it expects to pay such draft or honor such demand for payment, and, except
as provided in this ss.3.3, the Borrower shall reimburse Administrative Agent,
as set forth in ss.3.2 above. Notwithstanding anything contained in ss.3.2 above
or this ss.3.3 to the contrary, however, unless the Borrower shall have notified
the Administrative Agent and the Fronting Bank prior to 11:00 a.m. (New York
time) on the Business Day immediately prior to the date of such drawing that the
Borrower intends to reimburse the Fronting Bank for the amount of such drawing
with funds other than the proceeds of the Loans, the Borrower shall be deemed to
have timely given a Completed Revolving Credit Loan Request pursuant to ss.2.5
to the Administrative Agent, requesting a Alternate Base Rate Loan on the date
on which such drawing is honored and in an amount equal to the amount of such
drawing. The Borrower may thereafter convert any such Alternate Base Rate Loan
to a Revolving Credit Loan of another Type in accordance with ss.2.6. Each
Lender shall, in accordance with ss.2.7, make available such Lender's Commitment
Percentage of such Revolving Credit Loan to the Administrative Agent, the
proceeds of which shall be applied directly by the Administrative Agent to
reimburse the Fronting Bank for the
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amount of such draw. In the event that any Lender fails to make available to the
Administrative Agent the amount of such Lender's Commitment Percentage of such
Revolving Credit Loan on the date of the drawing, the Administrative Agent shall
be entitled to recover such amount on demand from such Lender plus any
additional amounts payable under ss.2.7(b) in the event of a late funding by a
Lender. The Fronting Bank is irrevocably authorized by the Borrower and each of
the Lenders to honor draws on each Letter of Credit by the beneficiary thereof
in accordance with the terms of the Letter of Credit. The responsibility of the
Fronting Bank to the Borrower and the Lenders shall be only to determine that
the documents (including each draft) delivered under each Letter of Credit in
connection with such presentment shall be in conformity in all material respects
with such Letter of Credit.
ss.3.4. Obligations Absolute. The Borrower's obligations under this ss.3
shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Administrative Agent, the
Fronting Bank, any Lender or any beneficiary of a Letter of Credit. The Borrower
further agrees with the Administrative Agent, the Fronting Bank and the Lenders
that the Administrative Agent, the Fronting Bank and the Lenders shall not be
responsible for, and the Borrower's Reimbursement Obligations under ss.3.2 shall
not be affected by, among other things, the validity or genuineness of documents
or of any endorsements thereon (so long as the documents delivered under each
Letter of Credit in connection with such presentment shall be in the form
required by, and in conformity in all material respects with, such Letter of
Credit), even if such documents should in fact prove to be in any or all
respects invalid, fraudulent or forged, or any dispute between or among any of
the Borrower, the beneficiary of any Letter of Credit or any financing
institution or other party to whom any Letter of Credit may be transferred, or
any claims or defenses whatsoever of the Borrower against the beneficiary of any
Letter of Credit or any such transferee. If done in good faith and absent gross
negligence, the Administrative Agent, the Fronting Bank and the Lenders shall
not be liable for any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with any Letter of Credit. The Borrower agrees that any action taken
or omitted by the Administrative Agent, the Fronting Bank or any Lender under or
in connection with each Letter of Credit and the related drafts and documents,
if done in good faith and absent gross negligence, shall be binding upon the
Borrower and shall not result in any liability on the part of the Administrative
Agent, the Fronting Bank or any Lender to the Borrower.
ss.3.5. Reliance by Issuer. To the extent not inconsistent with ss.3.4,
the Administrative Agent and the Fronting Bank shall be entitled to rely, and
shall be fully protected in relying upon, any Letter of Credit, draft, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons and upon advice and statements of legal
counsel, independent accountants and other experts selected by the
Administrative Agent or the Fronting Bank.
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The Administrative Agent and the Fronting Bank shall in all cases be fully
protected by the Lenders in acting, or in refraining from acting, under this
ss.3 in accordance with a request of the Majority Lenders, and such request and
any action taken or failure to act pursuant thereto shall be binding upon the
Lenders and all future holders of the Notes or of a Letter of Credit
Participation.
ss.3.6. Letter of Credit Fee. The Borrower shall pay to the Administrative
Agent a fee (in each case, a "Letter of Credit Fee") in an amount equal to the
Applicable L/C Percentage of the face amount of each outstanding Letter of
Credit, which fee (a) shall be payable quarterly in arrears on the first day of
each calendar quarter for the immediately preceding calendar quarter, with a
final payment on the Maturity Date or any earlier date on which the Commitments
shall terminate (which Letter of Credit Fee shall be pro-rated for any calendar
quarter in which such Letter of Credit is issued, drawn upon or otherwise
reduced or terminated) and (b) shall be for the accounts of the Lenders as
follows: (i) an amount equal to 0.125% per annum of the face amount of the
Letter of Credit shall be for the account of the Fronting Bank and (ii) the
remainder of the Letter of Credit Fee shall be for the accounts of the Lenders
(including the Fronting Bank) pro rata in accordance with their respective
Commitment Percentages. In respect of each Letter of Credit, the Borrower shall
also pay to the Fronting Bank for the Fronting Bank's own account, at such other
time or times as such charges are customarily made by the Fronting Bank, the
Fronting Bank's customary issuance, amendment, negotiation or document
examination and other administrative fees as in effect from time to time.
ss.3.7. Existing Letters of Credit. Those Letters of Credit issued to the
Borrower by Fleet under the Revolving Credit Agreement dated as of August 6,
1997 and identified on Schedule 3.7 hereto (the "Existing Letters of Credit")
shall for all purposes be deemed to be Letters of Credit issued under this
Agreement.
ss.4. CERTAIN GENERAL PROVISIONS.
ss.4.1. Funds for Payments.
(a) All payments of principal, interest, fees, and any other amounts
due hereunder or under any of the other Loan Documents shall be made to the
Administrative Agent, for the respective accounts of the Lenders or (as the case
may be) the Administrative Agent, at the Administrative Agent's Head Office, in
each case in Dollars and in immediately available funds.
(b) All payments by the Borrower hereunder and under any of the
other Loan Documents shall be made without setoff or counterclaim and free and
clear of and without deduction for any taxes, levies, imposts, duties, charges,
fees, deductions, withholdings, compulsory liens, restrictions or conditions of
any nature now or hereafter imposed or levied by any jurisdiction or any
political subdivision thereof or taxing or other authority therein
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unless the Borrower is compelled by law to make such deduction or withholding.
If any such obligation is imposed upon the Borrower with respect to any amount
payable by it hereunder or under any of the other Loan Documents, the Borrower
shall pay to the Administrative Agent, for the account of the Lenders or (as the
case may be) the Administrative Agent, on the date on which such amount is due
and payable hereunder or under such other Loan Document, such additional amount
in Dollars as shall be necessary to enable the Lenders to receive the same net
amount which the Lenders would have received on such due date had no such
obligation been imposed upon the Borrower. The Borrower will deliver promptly to
the Administrative Agent certificates or other valid vouchers for all taxes or
other charges deducted from or paid with respect to payments made by the
Borrower hereunder or under such other Loan Document.
ss.4.2. Computations. All computations of interest on the Loans and of
other fees to the extent applicable shall be based on a 360-day year and paid
for the actual number of days elapsed. Except as otherwise provided in the
definition of the term "Interest Period" with respect to LIBOR Rate Loans,
whenever a payment hereunder or under any of the other Loan Documents becomes
due on a day that is not a Business Day, the due date for such payment shall be
extended to the next succeeding Business Day, and interest shall accrue during
such extension. The outstanding amount of the Loans as reflected on the Note
Records from time to time shall constitute prima facie evidence of the principal
amount thereof.
ss.4.3. Inability to Determine LIBOR Rate. In the event, prior to the
commencement of any Interest Period relating to any LIBOR Rate Loan, the
Administrative Agent shall reasonably determine that adequate and reasonable
methods do not exist for ascertaining the LIBOR Rate that would otherwise
determine the rate of interest to be applicable to any LIBOR Rate Loan during
any Interest Period, the Administrative Agent shall forthwith give notice of
such determination (which shall be conclusive and binding on the Borrower) to
the Borrower and the Lenders. In such event (a) any Loan Request or Competitive
Bid Request with respect to LIBOR Rate Loans shall be automatically withdrawn
and shall be deemed a request for Alternate Base Rate Loans (in the case of
Revolving Credit Loans) or Absolute Competitive Bid Loans (in the case of
Competitive Bid Loans), (b) each Revolving Credit LIBOR Rate Loan will
automatically, on the last day of the then current Interest Period thereof,
become a Alternate Base Rate Loan, and (c) the obligations of the Lenders to
make LIBOR Rate Loans shall be suspended until the Administrative Agent
reasonably determines that the circumstances giving rise to such suspension no
longer exist, whereupon the Administrative Agent shall so notify the Borrower
and the Lenders.
ss.4.4. Illegality. Subject to ss.ss.4.11 and 4.12 hereof, but
notwithstanding any other provisions herein, if any present or future law,
regulation, treaty or directive or in the interpretation or application thereof
shall make it unlawful for any Lender to make or maintain LIBOR Rate Loans, such
Lender shall forthwith give notice of such circumstances to the Borrower and the
other Lenders and thereupon (a) the commitment of such Lender to make LIBOR Rate
Loans or convert Alternate Base Rate Loans to LIBOR Rate Loans shall
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forthwith be suspended and (b) such Lender's Commitment Percentage of Revolving
Credit LIBOR Rate Loans then outstanding shall be converted automatically to
Alternate Base Rate Loans on the last day of each Interest Period applicable to
such LIBOR Rate Loans or within such earlier period as may be required by law,
all until such time as it is no longer unlawful for such Lender to make or
maintain LIBOR Rate Loans. Subject to ss.ss.4.11 and 4.12 hereof, the Borrower
hereby agrees to promptly pay the Administrative Agent for the account of such
Lender, upon demand, any additional amounts necessary to compensate such Lender
for any costs incurred by such Lender in making any conversion required by this
ss.4.4 prior to the last day of an Interest Period with respect to a LIBOR Rate
Loan, including any interest or fees payable by such Lender to lenders of funds
obtained by it in order to make or maintain its LIBOR Rate Loans hereunder.
ss.4.5. Additional Costs, Etc. Subject to ss.ss.4.11 and 4.12 hereof, if
any present or future applicable law, which expression, as used herein, includes
statutes, rules and regulations thereunder and interpretations thereof by any
competent court or by any governmental or other regulatory body or official
charged with the administration or the interpretation thereof and requests,
directives, instructions and notices at any time or from time to time hereafter
made upon or otherwise issued to any Lender or the Administrative Agent by any
central bank or other fiscal, monetary or other authority (whether or not having
the force of law), shall:
(a) subject any Lender or the Administrative Agent to any tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature with respect
to this Agreement, the other Loan Documents, any Letters of Credit, such
Lender's Commitment or the Loans (other than taxes based upon or measured by the
income or profits of such Lender or the Administrative Agent), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Lender of the principal of or the
interest on any Loans or any other amounts payable to the Administrative Agent
or any Lender under this Agreement or the other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held by, or
deposits in or for the account of, or loans by, or letters of credit issued by,
or commitments of an office of any Lender, or
(d) impose on any Lender or the Administrative Agent any other
conditions or requirements with respect to this Agreement, the other Loan
Documents, any Letters of Credit, the Loans, such Lender's Commitment, or any
class of loans, letters of credit or commitments of which any of the Loans or
such Lender's Commitment forms a part;
and the result of any of the foregoing is
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(i) to increase the cost to any Lender of making, funding,
issuing, renewing, extending or maintaining any of the Loans or such
Lender's Commitment or any Letter of Credit, or
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such Lender or
the Administrative Agent hereunder on account of such Lender's
Commitment, any Letter of Credit or any of the Loans, or
(iii) to require such Lender or the Administrative Agent to
make any payment or to forego any interest or Reimbursement
Obligation or other sum payable hereunder, the amount of which
payment or foregone interest or Reimbursement Obligation or other
sum is calculated by reference to the gross amount of any sum
receivable or deemed received by such Lender or the Administrative
Agent from the Borrower hereunder,
then; and in each such case arising or occurring in the immediately preceding
365 days from such demand, the Borrower will, within thirty (30) days after
demand made by such Lender or (as the case may be) the Administrative Agent at
any time and from time to time and as often as the occasion therefor may arise,
within the shorter of such maximum allowable period as permitted by law or such
Lender's internal policies (but no longer than one year or the occurrence of the
Maturity Date, if sooner) pay to such Lender such additional amounts as such
Lender shall determine in good faith to be sufficient to compensate such Lender
for such additional cost, reduction, payment or foregone interest or other sum,
provided that such Lender is generally imposing similar charges on its other
similarly situated borrowers.
ss.4.6. Capital Adequacy. Subject to ss.ss.4.11 and 4.12 hereof, if after
the date hereof any Lender or the Administrative Agent determines in good faith
that (i) the adoption of or change in any law, governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law)
regarding capital requirements for banks or bank holding companies or any change
in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (ii) compliance by such Lender or
the Administrative Agent or any Person controlling such Lender or the
Administrative Agent with any law, governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law) of any such
Person regarding capital adequacy, has the effect of reducing the return on such
Lender's or the Administrative Agent's Commitment with respect to any Loans to a
level below that which such Lender or the Administrative Agent could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or the Administrative Agent's then existing policies with respect
to capital adequacy and assuming full utilization of such entity's capital) by
any amount deemed by such Lender or (as the case may be) the Administrative
Agent to be material, then such Lender or the Administrative Agent may notify
the Borrower
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of such fact. To the extent that the amount of such reduction in the return on
capital is not reflected in the Alternate Base Rate, the Borrower agrees to pay
such Lender or (as the case may be) the Administrative Agent the amount of such
reduction in the return on capital as and when such reduction is determined,
within thirty (30) days after presentation by such Lender or (as the case may
be) the Administrative Agent of a certificate in accordance with ss.4.7 hereof
which certificate shall be presented within the shorter of such maximum
allowable period as permitted by law or such Lender's internal policies (but no
longer than one year or the occurrence of the Maturity Date, if sooner). Each
Lender shall allocate such cost increases among its customers in good faith and
on an equitable basis.
ss.4.7. Certificate. A certificate setting forth any additional amounts
payable pursuant to ss.ss.4.5 or 4.6 and a brief explanation of such amounts
which are due, submitted by any Lender or the Administrative Agent to the
Borrower shall be prima facie evidence that such amounts are due and owing.
ss.4.8. Indemnity. In addition to the other provisions of this Agreement
regarding such matters, the Borrower agrees to indemnify the Administrative
Agent and each Lender and to hold the Administrative Agent and each Lender
harmless from and against any loss, cost or expense (including LIBOR Breakage
Costs, but excluding any loss of Applicable Margin on the relevant Loans) that
the Administrative Agent or such Lender may sustain or incur as a consequence of
(a) the failure by the Borrower to pay any principal amount of or any interest
on any LIBOR Rate Loans as and when due and payable, including any such loss or
expense arising from interest or fees payable by the Administrative Agent or
such Lender to lenders of funds obtained by it in order to maintain its LIBOR
Rate Loans, (b) the failure by the Borrower to make a borrowing or conversion
after the Borrower has given or is deemed pursuant to ss.2.6(c) to have given a
Completed Revolving Credit Loan Request or Competitive Bid Request for a LIBOR
Rate Loan or a Conversion Request to convert a Alternate Base Rate Loan into a
LIBOR Rate Loan, and (c) the making of any payment of a LIBOR Rate Loan or the
making of any conversion of any such Loan to a Alternate Base Rate Loan on a day
that is not the last day of the applicable Interest Period with respect thereto,
including interest or fees payable by the Administrative Agent or a Lender to
lenders of funds obtained by it in order to maintain any such LIBOR Rate Loans.
ss.4.9. Interest During Event of Default. During the continuance of an
Event of Default, outstanding principal and (to the extent permitted by
applicable law) interest on the Loans and all other amounts payable hereunder or
under any of the other Loan Documents shall bear interest at a rate per annum
equal to four percent (4%) above the rate otherwise then in effect until such
amount shall be paid in full (after as well as before judgment). In addition,
the Borrower shall pay on demand a late charge equal to five percent (5%) of any
amount of principal (other than principal due on the Maturity Date) and/or
interest charges on the Loans which is not paid within ten (10) days of the date
when due.
ss.4.10. [Intentionally Omitted]
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ss.4.11. Reasonable Efforts to Mitigate. Each Lender agrees that as
promptly as practicable after it becomes aware of the occurrence of an event or
the existence of a condition that would cause it to be affected under ss.ss.4.4,
4.5 or 4.6, such Lender will give notice thereof to the Borrower, with a copy to
the Administrative Agent and, to the extent so requested by the Borrower and not
inconsistent with regulatory policies applicable to such Lender, such Lender
shall use reasonable efforts and take such actions as are reasonably appropriate
(including the changing of its lending office or branch) if as a result thereof
the additional moneys which would otherwise be required to be paid to such
Lender pursuant to such sections would be reduced other than for de minimus
amounts, or the illegality or other adverse circumstances which would otherwise
require a conversion of such Loans or result in the inability to make such Loans
pursuant to such sections would cease to exist, and in each case if, as
determined by such Lender in its sole discretion, the taking such actions would
not adversely affect such Loans.
ss.4.12. Replacement of Lenders. If any Lender (an "Affected Lender") (i)
makes demand upon the Borrower for (or if the Borrower is otherwise required to
pay) amounts pursuant to ss.ss.4.4, 4.5 or 4.6, or (ii) is unable to make or
maintain LIBOR Rate Loans as a result of a condition described in ss.4.4, the
Borrower may, within 90 days of receipt of such demand, notice (or the
occurrence of such other event causing the Borrower to be required to pay such
compensation or causing ss.4.4 to be applicable) as the case may be, by notice
(a "Replacement Notice") in writing to the Administrative Agent and such
Affected Lender (A) request the Affected Lender to cooperate with the Borrower
in obtaining a replacement lender satisfactory to the Administrative Agent and
the Borrower (the "Replacement Lender"); (B) request the non-Affected Lenders to
acquire and assume all of the Affected Lender's Loans and Commitment, and/or
participate in Letters of Credit, as provided herein, but none of such Lenders
shall be under an obligation to do so; or (C) designate a Replacement Lender
which is an Eligible Assignee and is reasonably satisfactory to the
Administrative Agent other than when an Event of Default has occurred and is
continuing and absolutely satisfactory to the Administrative Agent when an Event
of Default has occurred and is continuing. If any satisfactory Replacement
Lender shall be obtained, and/or any of the non-Affected Lenders shall agree to
acquire and assume all of the Affected Lender's Loans and Commitment, and/or
participate in Letters of Credit, then such Affected Lender shall assign, in
accordance with ss.18, all of its Commitment, Loans, Notes and other rights and
obligations under this Agreement and all other Loan Documents to such
Replacement Lender or non-Affected Lenders, as the case may be, in exchange for
payment of the principal amount so assigned and all interest and fees accrued on
the amount so assigned, plus all other Obligations then due and payable to the
Affected Lender; provided, however, that (x) such assignment shall be in
accordance with the provisions of ss.18, shall be without recourse,
representation or warranty and shall be on terms and conditions reasonably
satisfactory to such Affected Lender and such Replacement Lender and/or
non-Affected Lenders, as the case may be, and (y) prior to any such assignment,
the Borrower shall have paid to such Affected Lender all amounts properly
demanded and unreimbursed under ss.ss.4.4, 4.5 and 4.8.
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ss.5. GUARANTIES.
ss.5.1. Guaranties. Each of the Guarantors will jointly and severally
guaranty all of the Obligations pursuant to its Guaranty. The Obligations are
full recourse obligations of the Borrower and each Guarantor, and all of the
respective assets and properties of the Borrower and each such Guarantor shall
be available for the payment in full in cash and performance of the Obligations
(subject to Permitted Liens and senior claims enforceable as senior in
accordance with applicable law, without the Lenders hereby agreeing to any such
senior claim that is otherwise prohibited by this Agreement). Other than during
the continuance of a Default or Event of Default, at the request of the
Borrower, the Guaranty of any Subsidiary Guarantor shall be released by the
Administrative Agent if and when all of the Real Estate owned or ground-leased
by such Subsidiary Guarantor shall cease (not thereby creating a Default or
Event of Default) to be owned by such Subsidiary Guarantor or by any other
Borrower, Guarantor, Subsidiary or other Affiliate of any of same, provided the
foregoing shall never permit the release of MCRC.
ss.5.2. [Intentionally Omitted]
ss.6. REPRESENTATIONS AND WARRANTIES. The Borrower for itself and for each
Guarantor insofar as any such statements relate to such Guarantor represents and
warrants to the Administrative Agent and the Lenders all of the statements
contained in this ss.6.
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ss.6.1. Authority; Etc.
(a) Organization; Good Standing.
(i) MCRLP is a limited partnership duly
organized, validly existing and in good standing under the
laws of the State of Delaware; each Subsidiary of MCRLP that
owns Real Estate is duly organized or formed, validly existing
and in good standing as a corporation or a partnership or
other entity, as the case may be, under the laws of the state
of its organization or formation; the Borrower and each of the
Borrower's Subsidiaries that owns Real Estate has all
requisite partnership or corporate or other entity, as the
case may be, power to own its respective properties and
conduct its respective business as now conducted and as
presently contemplated; and the Borrower and each of the
Borrower's Subsidiaries that owns Real Estate is in good
standing as a foreign entity and is duly authorized to do
business in the jurisdictions where the Unencumbered
Properties or other Real Estate owned or ground-leased by it
are located and in each other jurisdiction where such
qualification is necessary except where a failure to be so
qualified in such other jurisdiction would not have a
materially adverse effect on any of their respective
businesses, assets or financial conditions.
(ii) MCRC is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Maryland; each Subsidiary of MCRC that owns Real
Estate is duly organized or formed, validly existing and in
good standing as a corporation or partnership or other entity,
as the case may be, under the laws of the state of its
organization or formation; MCRC and each of its Subsidiaries
that owns Real Estate has all requisite corporate or
partnership or other entity, as the case may be, power to own
its respective properties and conduct its respective business
as now conducted and as presently contemplated; and MCRC and
each of its Subsidiaries that owns Real Estate is in good
standing as a foreign entity and is duly authorized to do
business in the jurisdictions where such qualification is
necessary (including, as to MCRC, in the State of New Jersey)
except where a failure to be so qualified in such other
jurisdiction would not have a materially adverse effect on the
business, assets or financial condition of MCRC or such
Subsidiary.
(iii) As to each subsequent Guarantor, a
provision similar, as applicable, to (a) (i) or (ii) above
shall be included in each such subsequent Guarantor's
Subsidiary Guaranty, and the Borrower
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shall be deemed to make for itself and on behalf of each such
subsequent Guarantor a representation and warranty as to such
provision regarding such subsequent Guarantor.
(b) Capitalization.
(i) The outstanding equity of MCRLP is comprised
of a general partner interest and limited partner interests,
all of which have been duly issued and are outstanding and
fully paid and non-assessable as set forth in Schedule 6.1(b)
hereto. All of the issued and outstanding general partner
interests of MCRLP are owned and held of record by MCRC.
Except as disclosed in Schedule 6.1(b) hereto, as of the
Closing Date there are no outstanding securities or agreements
exchangeable for or convertible into or carrying any rights to
acquire any general partnership interests in MCRLP. Except as
disclosed in Schedule 6.1(b), there are no outstanding
commitments, options, warrants, calls or other agreements
(whether written or oral) binding on MCRLP or MCRC which
require or could require MCRLP or MCRC to sell, grant,
transfer, assign, mortgage, pledge or otherwise dispose of any
general partnership interests of MCRLP. Except as set forth in
the Agreement of Limited Partnership of MCRLP, no general
partnership interests of MCRLP are subject to any restrictions
on transfer or any partner agreements, voting agreements,
trust deeds, irrevocable proxies, or any other similar
agreements or interests (whether written or oral).
(ii) As of the Closing Date, the authorized
capital stock of, or any other equity interests in, each of
MCRC's Subsidiaries are as set forth in Schedule 6.1(b), and
the issued and outstanding voting and non-voting shares of the
common stock of each of MCRC's Subsidiaries, and all of the
other equity interests in such Subsidiaries, all of which have
been duly issued and are outstanding and fully paid and
non-assessable, are owned and held of record as set forth in
Schedule 6.1(b). Except as disclosed in Schedule 6.1(b), as of
the Closing Date there are no outstanding securities or
agreements exchangeable for or convertible into or carrying
any rights to acquire any equity interests in any of MCRC's
Subsidiaries, and there are no outstanding options, warrants,
or other similar rights to acquire any shares of any class in
the capital of or any other equity interests in any of MCRC's
Subsidiaries. Except as disclosed in Schedule 6.1(b), as of
the Closing Date there are no outstanding commitments,
options, warrants, calls or other agreements or obligations
(whether written or oral) binding on any of MCRC's
Subsidiaries to issue, sell, grant, transfer, assign,
mortgage, pledge or otherwise dispose of any shares of any
class in the capital of or other
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equity interests in any of MCRC's Subsidiaries. Except as
disclosed in Schedule 6.1(b), no shares of, or equity
interests in, any of MCRC's Subsidiaries held by MCRC are
subject to any restrictions on transfer pursuant to any of
MCRC's Subsidiaries' applicable partnership, charter, by-laws
or any shareholder agreements, voting agreements, voting
trusts, trust agreements, trust deeds, irrevocable proxies or
any other similar agreements or instruments (whether written
or oral).
(c) Due Authorization. The execution, delivery and performance
of this Agreement and the other Loan Documents to which the Borrower or any of
the Guarantors is a party and the transactions contemplated hereby and thereby
(i) are within the authority of the Borrower and such Guarantor, (ii) have been
duly authorized by all necessary proceedings on the part of the Borrower or such
Guarantor and any general partner or other controlling Person thereof, (iii) do
not conflict with or result in any breach or contravention of any provision of
law, statute, rule or regulation to which the Borrower or such Guarantor is
subject or any judgment, order, writ, injunction, license or permit applicable
to the Borrower or such Guarantor, (iv) do not conflict with any provision of
the agreement of limited partnership, any certificate of limited partnership,
the charter documents or by-laws of the Borrower or such Guarantor or any
general partner or other controlling Person thereof, and (v) do not contravene
any provisions of, or constitute a default, Default or Event of Default
hereunder or a failure to comply with any term, condition or provision of, any
other agreement, instrument, judgment, order, decree, permit, license or
undertaking binding upon or applicable to the Borrower or such Guarantor or any
of the Borrower's or such Guarantor's properties (except for any such failure to
comply under any such other agreement, instrument, judgment, order, decree,
permit, license, or undertaking as would not materially and adversely affect the
condition (financial or otherwise), properties, business or results of
operations of the Borrower, the Operating Subsidiaries or any Guarantor) or
result in the creation of any mortgage, pledge, security interest, lien,
encumbrance or charge upon any of the properties or assets of the Borrower, the
Operating Subsidiaries or any Guarantor.
(d) Enforceability. Each of the Loan Documents to which the
Borrower or any of the Guarantors is a party has been duly executed and
delivered and constitutes the legal, valid and binding obligations of the
Borrower and each such Guarantor, as the case may be, subject only to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other laws relating to or affecting generally the enforcement of creditors'
rights and to the fact that the availability of the remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding therefor may be brought.
ss.6.2. Governmental Approvals. The execution, delivery and performance by
the Borrower of this Agreement and by the Borrower and each Guarantor of the
other Loan Documents to which the Borrower or such Guarantor is a party and the
transactions contemplated hereby and thereby do not require (i) the approval or
consent of any governmental agency or authority other than those already
obtained, or (ii) filing with any
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governmental agency or authority, other than filings which will be made with the
SEC when and as required by law.
ss.6.3. Title to Properties; Leases.
The Borrower, the Guarantors and their respective Subsidiaries that own
Real Estate each has good title to all of its respective Real Estate purported
to be owned by it, including, without limitation, that:
(a) As of the Closing Date (with respect to Unencumbered Properties
designated as such on the Closing Date) or the date of designation as an
Unencumbered Property (with respect to Unencumbered Properties acquired and/or
designated as such after the Closing Date), and in each case to its knowledge
thereafter, the Borrower or (if after the Closing Date) a Guarantor holds good
and clear record and marketable fee simple or leasehold title to the
Unencumbered Properties, subject to no rights of others, including any
mortgages, conditional sales agreements, title retention agreements, liens or
encumbrances, except for Permitted Liens and, in the case of any ground-leased
Unencumbered Property, the terms of such ground lease (which shall be an
Eligible Ground Lease), as the same may then or thereafter be amended from time
to time in a manner consistent with the requirements for an Eligible Ground
Lease.
(b) The Borrower and each of the then Guarantors will, as of the
Closing Date, own all of the assets as reflected in the financial statements of
the Borrower and MCRC described in ss.6.4 or acquired in fee title (or, if Real
Estate, permitted leasehold title) since the date of such financial statements
(except property and assets sold or otherwise disposed of in the ordinary course
of business since that date).
(c) As of the Closing Date, each of the direct or indirect interests
of MCRC, the Borrower or MCRC's other Subsidiaries in any Partially-Owned Entity
that owns Real Estate is set forth on Schedule 6.3 hereto, including the type of
entity in which the interest is held, the percentage interest owned by MCRC, the
Borrower or such Subsidiary in such entity, the capacity in which MCRC, the
Borrower or such Subsidiary holds the interest, and MCRC's, the Borrower's or
such Subsidiary's ownership interest therein. Schedule 6.3 will be updated
quarterly at the time of delivery of the financial statements pursuant to
ss.7.4(b).
ss.6.4. Financial Statements. The following financial statements have been
furnished to each of the Lenders:
(a) The audited consolidated balance sheet of MCRC and its
Subsidiaries (including, without limitation, MCRLP and its Subsidiaries) as of
December 31, 1997 and their related consolidated income statements for the
fiscal year ended December 31, 1997. Such balance sheet and income statements
have been prepared in accordance with GAAP and fairly present the financial
condition of MCRC and its Subsidiaries as of the close of business on the
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date thereof and the results of operations for the fiscal year then ended. There
are no contingent liabilities of MCRC as of such dates involving material
amounts, known to the officers of the Borrower or of MCRC, not disclosed in said
financial statements and the related notes thereto.
(b) The SEC Filings.
ss.6.5 Fiscal Year. MCRC, the Borrower and its Subsidiaries each has a
fiscal year which is the twelve months ending on December 31 of each calendar
year, unless changed in accordance with ss.8.9 hereof.
ss.6.6. Franchises, Patents, Copyrights, Etc. The Borrower, each Guarantor
and each of their respective Subsidiaries that owns Real Estate possesses all
franchises, patents, copyrights, trademarks, trade names, licenses and permits,
and rights in respect of the foregoing, adequate for the conduct of their
respective businesses substantially as now conducted without known material
conflict with any rights of others, including all Permits.
ss.6.7. Litigation. Except as stated on Schedule 6.7, as updated at the
time of each compliance certificate, there are no actions, suits, proceedings or
investigations of any kind pending or, to the knowledge of the Borrower and the
Guarantors, threatened against the Borrower, any Guarantor or any of their
respective Subsidiaries before any court, tribunal or administrative agency or
board that, if adversely determined, could reasonably be expected, either
individually or in the aggregate, to have a Material Adverse Effect or
materially impair the rights of the Borrower or such Guarantor to carry on their
respective businesses substantially as now conducted by them, or result in any
substantial liability not adequately covered by insurance, or for which adequate
reserves are not maintained, as reflected in the applicable financial statements
of MCRLP and MCRC, or which question the validity of this Agreement or any of
the other Loan Documents, or any action taken or to be taken pursuant hereto or
thereto.
ss.6.8. No Materially Adverse Contracts, Etc. None of the Borrower, any
Guarantor or any of their respective Subsidiaries is subject to any charter,
corporate, partnership or other legal restriction, or any judgment, decree,
order, rule or regulation that has or is reasonably expected to have a Material
Adverse Effect. None of the Borrower, any Guarantor or any of their respective
Subsidiaries that owns Real Estate is a party to any contract or agreement that
has or is reasonably expected, in the judgment of their respective officers, to
have a Material Adverse Effect.
ss.6.9. Compliance With Other Instruments, Laws, Etc. None of the
Borrower, any Guarantor or any of their respective Subsidiaries that owns Real
Estate is in violation of any provision of its partnership agreement, charter
documents, bylaws or other organizational documents, as the case may be, or any
respective agreement or instrument to which it is subject or by which it or any
of its properties (including, in the case of MCRC and MCRLP,
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any of their respective Subsidiaries) are bound or any decree, order, judgment,
statute, license, rule or regulation, in any of the foregoing cases in a manner
that could reasonably be expected to result, individually or in the aggregate,
in the imposition of substantial penalties or have a Material Adverse Effect.
ss.6.10. Tax Status.
(a) (i) Each of the Borrower, the Guarantors and their respective
Subsidiaries (A) has timely made or filed all federal, state and local income
and all other tax returns, reports and declarations required by any jurisdiction
to which it is subject, (B) has paid all taxes and other governmental
assessments and charges shown or determined to be due on such returns, reports
and declarations, except those being contested in good faith and by appropriate
proceedings, and except those which would not be in violation of ss.8.1(b)
hereof and (C) has set aside on its books provisions reasonably adequate for the
payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply, and (ii) there are no unpaid taxes in
any amount in violation of ss.8.1(b) hereof claimed to be due by the taxing
authority of any jurisdiction, and the respective officers of the Borrower and
the Guarantors and their respective Subsidiaries know of no basis for any such
claim.
(b) To the Borrower's knowledge, each Partially-Owned Entity (i) has
timely made or filed all federal, state and local income and all other tax
returns, reports and declarations required by any jurisdiction to which it is
subject, (ii) has paid all taxes and other governmental assessments and charges
shown or determined to be due on such returns, reports and declarations, except
those being contested in good faith and by appropriate proceedings and except
those which would not be in violation of ss.8.1(b) hereof, and (iii) has set
aside on its books provisions reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply. To the best of the Borrower's knowledge, except as otherwise
disclosed in writing to the Administrative Agent, there are no unpaid taxes in
any amount in violation of ss.8.1(b) hereof claimed to be due by the taxing
authority of any jurisdiction from any Partially-Owned Entity, and the officers
of the Borrower know of no basis for any such claim.
ss.6.11. No Event of Default; No Materially Adverse Changes. No Default or
Event of Default has occurred and is continuing. Since December 31, 1997 there
has occurred no materially adverse change in the financial condition or business
of MCRC and its Subsidiaries or MCRLP and its Subsidiaries as shown on or
reflected in the SEC Filings or the consolidated balance sheet of MCRC and its
Subsidiaries as at December 31, 1997, or the consolidated statement of income
for the fiscal quarter then ended, other than changes in the ordinary course of
business that have not had a Material Adverse Effect on the Borrower, Guarantors
and their respective Subsidiaries, taken as a whole.
ss.6.12. Investment Company Acts. None of the Borrower, any Guarantor or
any of their respective Subsidiaries is an "investment company", or an
"affiliated company" or a
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"principal underwriter" of an "investment company", as such terms are defined in
the Investment Company Act of 1940.
ss.6.13. Absence of UCC Financing Statements, Etc. Except for Permitted
Liens, as of the Closing Date there will be no financing statement, security
agreement, chattel mortgage, real estate mortgage, equipment lease, financing
lease, option, encumbrance or other document filed or recorded with any filing
records, registry, or other public office, that purports to cover, affect or
give notice of any present or possible future lien or encumbrance on, or
security interest in, any Unencumbered Property. Neither the Borrower nor any
Guarantor has pledged or granted any lien on or security interest in or
otherwise encumbered or transferred any of their respective interests in any
Subsidiary (including in the case of MCRC, its interests in MCRLP, and in the
case of the Borrower, its interests in the Operating Subsidiaries) or in any
Partially-Owned Entity, except for the Harborside Pledged Interests pledged to
PSC in connection with the Harborside Transaction.
ss.6.14. Absence of Liens The Borrower or a Guarantor is the owner of or
the holder of a ground leasehold interest under an Eligible Ground Lease in the
Unencumbered Properties free from any lien, security interest, encumbrance and
any other claim or demand, except for Permitted Liens.
ss.6.15. Certain Transactions. Except as set forth on Schedule 6.15 or for
transactions that have been determined by the Board of Directors of the relevant
Borrower, Guarantor or Subsidiary (or its respective general partner) to be on
terms as favorable to such Person as in an arms-length transaction with a third
party, none of the officers, partners, directors, or employees of the Borrower
or any Guarantor or any of their respective Subsidiaries is presently a party to
any transaction with the Borrower, any Guarantor or any of their respective
Subsidiaries (other than for or in connection with services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, partner, director or such employee or, to the knowledge of the
Borrower, any corporation, partnership, trust or other entity in which any
officer, partner, director, or any such employee or natural Person related to
such officer, partner, director or employee or other Person in which such
officer, partner, director or employee has a direct or indirect beneficial
interest has a substantial interest or is an officer, director, trustee or
partner.
ss.6.16. Employee Benefit Plans.
ss.6.16.1 In General.
Each Employee Benefit Plan and each Guaranteed Pension Plan has been
maintained and operated in compliance in all material respects with the
provisions of ERISA and, to the extent applicable, the Code, including but
not limited to the
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provisions thereunder respecting prohibited transactions and the bonding
of fiduciaries and other persons handling plan funds as required by ss.412
of ERISA. The Borrower has heretofore delivered to the Administrative
Agent the most recently completed annual report, Form 5500, with all
required attachments, and actuarial statement required to be submitted
under ss.103(d) of ERISA, with respect to each Guaranteed Pension Plan.
ss.6.16.2 Terminability of Welfare Plans.
No Employee Benefit Plan, which is an employee welfare benefit plan within
the meaning of ss.3(1) or ss.3(2)(B) of ERISA, provides benefit coverage
subsequent to termination of employment, except as required by Title I,
Part 6 of ERISA or the applicable state insurance laws. The Borrower may
terminate each such Plan at any time (or at any time subsequent to the
expiration of any applicable bargaining agreement) in the discretion of
the Borrower without material liability to any Person other than for
claims arising prior to termination.
ss.6.16.3 Guaranteed Pension Plans.
Each contribution required to be made to a Guaranteed Pension Plan,
whether required to be made to avoid the incurrence of an accumulated
funding deficiency, the notice or lien provisions of ss.302(f) of ERISA,
or otherwise, has been timely made. No waiver of an accumulated funding
deficiency or extension of amortization periods has been received with
respect to any Guaranteed Pension Plan, and neither the Borrower nor any
Guarantor nor any ERISA Affiliate is obligated to or has posted security
in connection with an amendment to a Guaranteed Pension Plan pursuant to
ss.307 of ERISA or ss.401(a)(29) of the Code. No liability to the PBGC
(other than required insurance premiums, all of which have been paid) has
been incurred by the Borrower nor any Guarantor nor any ERISA Affiliate
with respect to any Guaranteed Pension Plan and there has not been any
ERISA Reportable Event (other than an ERISA Reportable Event as to which
the requirement of 30 days notice has been waived), or any other event or
condition which presents a material risk of termination of any Guaranteed
Pension Plan by the PBGC. Based on the latest valuation of each Guaranteed
Pension Plan (which in each case occurred within twelve months of the date
of this representation), and on the actuarial methods and assumptions
employed for that valuation, the aggregate benefit liabilities of all such
Guaranteed Pension Plans within the meaning of ss.4001 of ERISA did not
exceed the aggregate value of the assets of all such Guaranteed Pension
Plans, disregarding for this purpose the benefit liabilities and assets of
any Guaranteed Pension Plan with assets in excess of benefit liabilities,
by more than $500,000.
ss.6.16.4 Multiemployer Plans.
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Neither the Borrower nor any Guarantor nor any ERISA Affiliate has
incurred any material liability (including secondary liability) to any
Multiemployer Plan as a result of a complete or partial withdrawal from
such Multiemployer Plan under ss.4201 of ERISA or as a result of a sale of
assets described in ss.4204 of ERISA. Neither the Borrower nor any ERISA
Affiliate has been notified that any Multiemployer Plan is in
reorganization or insolvent under and within the meaning of ss.4241 or
ss.4245 of ERISA or is at material risk of entering reorganization or
becoming insolvent, or that any Multiemployer Plan intends to terminate or
has been terminated under ss.4041A of ERISA.
ss.6.17. Regulations U and X. The proceeds of the Loans shall be used for
the purposes described in ss.7.12. No portion of any Loan is to be used, and no
portion of any Letter of Credit is to be obtained, for the purpose of purchasing
or carrying any "margin security" or "margin stock" as such terms are used in
Regulations U and X of the Board of Governors of the Federal Reserve System, 12
C.F.R. Parts 221 and 224.
ss.6.18. Environmental Compliance. The Borrower has caused environmental
assessments to be conducted and/or taken other steps to investigate the past and
present environmental condition and usage of the Real Estate and the operations
conducted thereon. Except as disclosed in the environmental assessments provided
to the Administrative Agent pursuant to ss.10.7 and based upon such assessments
and/or investigation, to the Borrower's knowledge, the Borrower has determined
that:
(a) None of the Borrower, any Guarantor, any of their respective
Subsidiaries or any operator of the Real Estate or any portion thereof, or any
operations thereon is in violation, or alleged violation (in writing), of any
judgment, order, law, license, rule or regulation pertaining to environmental
matters, including without limitation, those arising under the Resource
Conservation and Recovery Act ("RCRA"), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986 ("SARA"), the Federal Clean
Water Act, the Federal Clean Air Act, the Toxic Substances Control Act, or any
state or local statute, regulation, ordinance or order relating to health,
safety or the environment (hereinafter "Environmental Laws"), which violation or
alleged violation (in writing) has, or its remediation would have, by itself or
when aggregated with all such other violations or alleged violations, a Material
Adverse Effect or constitutes a Disqualifying Environmental Event.
(b) None of the Borrower, any Guarantor or any of their respective
Subsidiaries has received notice from any third party, including, without
limitation, any federal, state or local governmental authority, (i) that it has
been identified by the United States Environmental Protection Agency ("EPA") as
a potentially responsible party under CERCLA with respect to a site listed on
the National Priorities List, 40 C.F.R. Part 300 Appendix B (1986), (ii) that
any hazardous waste, as defined by 42 U.S.C. ss.6903(5), any
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hazardous substances as defined by 42 U.S.C. ss. 9601(14), any pollutant or
contaminant as defined by 42 U.S.C. ss.9601(33) or any toxic substances, oil or
hazardous materials or other chemicals or substances regulated by any
Environmental Laws ("Hazardous Substances") which it has generated, transported
or disposed of has been found at any site at which a federal, state or local
agency or other third party has conducted or has ordered that the Borrower, any
Guarantor or any of their respective Subsidiaries conduct a remedial
investigation, removal or other response action pursuant to any Environmental
Law, or (iii) that it is or shall be a named party to any claim, action, cause
of action, complaint, or legal or administrative proceeding (in each case,
contingent or otherwise) arising out of any third party's incurrence of costs,
expenses, losses or damages of any kind whatsoever in connection with the
release of Hazardous Substances; which event described in any such notice would
have a Material Adverse Effect or constitutes a Disqualifying Environmental
Event.
(c) (i) No portion of the Real Estate has been used for the
handling, processing, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws; and no underground tank or other
underground storage receptacle for Hazardous Substances is located on any
portion of any Real Estate except in accordance with applicable Environmental
Laws, (ii) in the course of any activities conducted by the Borrower, the
Guarantors, their respective Subsidiaries or to the knowledge of the Borrower,
without any independent inquiry other than as set forth in the environmental
assessments, the operators of the Real Estate, or any ground or space tenants on
any Real Estate, no Hazardous Substances have been generated or are being used
on such Real Estate except in accordance with applicable Environmental Laws,
(iii) there has been no present or past releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, disposing or
dumping (a "Release") or threatened Release of Hazardous Substances on, upon,
into or from the Real Estate, (iv) to the knowledge of the Borrower without any
independent inquiry other than as set forth in the environmental assessments,
there have been no Releases on, upon, from or into any real property in the
vicinity of any of the Real Estate which, through soil or groundwater
contamination, may have come to be located on such Real Estate, and (v) any
Hazardous Substances that have been generated by the Borrower or a Guarantor or
any of their respective Subsidiaries at any of the Real Estate have been
transported off-site only by carriers having an identification number issued by
the EPA, treated or disposed of only by treatment or disposal facilities
maintaining valid permits as required under applicable Environmental Laws; any
of which events described in clauses (i) through (v) above would have a Material
Adverse Effect, or constitutes a Disqualifying Environmental Event.
(d) By virtue of the use of the Loans proceeds contemplated hereby,
or as a condition to the effectiveness of any of the Loan Documents, none of the
Borrower, any Guarantor or any of the Real Estate is subject to any applicable
Environmental Law requiring the performance of Hazardous Substances site
assessments, or the removal or remediation of Hazardous Substances, or the
giving of notice to any governmental agency or the recording or delivery to
other Persons of an environmental disclosure document or statement.
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ss.6.19. Subsidiaries. As of the Closing Date, Schedule 6.19 sets forth
all of the respective Subsidiaries of MCRC or MCRLP and any other Guarantor, and
Schedule 6.19 will be updated annually at the time of delivery of the financial
statements pursuant to ss.7.4(a) to reflect any changes, including subsequent
Guarantor and its Subsidiaries, if any.
ss.6.20. Loan Documents. All of the representations and warranties of the
Borrower and the Guarantors made in this Agreement and in the other Loan
Documents or any document or instrument delivered to the Administrative Agent or
the Lenders pursuant to or in connection with any of such Loan Documents are
true and correct in all material respects and do not include any untrue
statement of a material fact or omit to state a material fact required to be
stated or necessary to make such representations and warranties not materially
misleading.
ss.6.21. REIT Status. MCRC has not taken any action that would prevent it
from maintaining its qualification as a REIT for its tax year ended December 31,
1997 or from maintaining such qualification at all times during the term of the
Loans.
ss.6.22. Subsequent Guarantors. The foregoing representations and
warranties in ss.6.3 through ss.6.20, as the same are true, correct and
applicable to Guarantors existing on the Closing Date, shall be true, correct
and applicable to each subsequent Guarantor in all material respects as of the
date it becomes a Guarantor.
ss.6.23. Year 2000. The Borrower shall use all commercially reasonable
efforts to diligently complete in good faith substantially all reprogramming
required to permit the proper functioning, in and following the year 2000, of
(i) the Borrower's and the Guarantors' computer systems and (ii) equipment
containing embedded microchips (including systems and equipment supplied by
others or with which Borrower's or the Guarantors' systems interface) and the
testing of all such systems and equipment, as so reprogrammed. Such
reprogramming and testing, and the reasonably foreseeable consequences of year
2000 to the Borrower and the Guarantors will not result in an Event of Default
or have a Material Adverse Effect on the Borrower, the Guarantors and their
Subsidiaries taken as a whole. Except for such of the reprogramming referred to
in the preceding sentence as may be necessary, the computer and management
information systems of each of the Borrower, the Guarantors and their
Subsidiaries are and, with ordinary course upgrading and maintenance, will
continue for the term of this Agreement to be, sufficient to permit the Borrower
and the Guarantors to conduct their respective businesses without any Material
Adverse Effect on the Borrower, the Guarantors and their Subsidiaries taken as a
whole.
ss.7. AFFIRMATIVE COVENANTS OF THE BORROWER AND THE GUARANTORS. The
Borrower for itself and on behalf of each of the Guarantors (if and to the
extent expressly included in Subsections contained in this Section) covenants
and agrees that, so long as any Loan, Letter of Credit or Note is outstanding or
the Lenders have any
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obligation to make any Loans or any Lender has any obligation to issue, extend
or renew any Letters of Credit:
ss.7.1. Punctual Payment. The Borrower will duly and punctually pay or
cause to be paid the principal and interest on the Loans and all interest, fees,
charges and other amounts provided for in this Agreement and the other Loan
Documents, all in accordance with the terms of this Agreement and the Notes, and
the other Loan Documents.
ss.7.2. Maintenance of Office. The Borrower and each of the Guarantors
will maintain its chief executive office in Cranford, New Jersey, or at such
other place in the United States of America as each of them shall designate upon
written notice to the Administrative Agent to be delivered within five (5) days
of such change, where notices, presentations and demands to or upon the Borrower
and the Guarantors, as the case may be, in respect of the Loan Documents may be
given or made.
ss.7.3. Records and Accounts. The Borrower and each of the Guarantors will
(a) keep true and accurate records and books of account in which full, true and
correct entries will be made in accordance with GAAP in all material respects,
and will cause each of its Subsidiaries that owns Real Estate to keep true and
accurate records and books of account in which full, true and correct entries
will be made in accordance with GAAP in all material respects, (b) maintain
adequate accounts and reserves for all taxes (including income taxes),
contingencies, depreciation and amortization of its properties and the
properties of its Subsidiaries and (c) at all times engage Price Waterhouse LLP
or other Accountants as the independent certified public accountants of MCRC,
MCRLP and their respective Subsidiaries and will not permit more than thirty
(30) days to elapse between the cessation of such firm's (or any successor
firm's) engagement as the independent certified public accountants of MCRC,
MCRLP and their respective Subsidiaries and the appointment in such capacity of
a successor firm as Accountants.
ss.7.4. Financial Statements, Certificates and Information. The Borrower
will deliver and will cause MCRC to deliver to the Administrative Agent:
(a) as soon as practicable, but in any event not later than ninety
(90) days after the end of each of its fiscal years:
(i) in the case of MCRLP, if prepared, the audited
consolidated balance sheet of MCRLP and its subsidiaries at the end of
such year, the related audited consolidated statements of operations,
owner's equity (deficit) and cash flows for the year then ended, in each
case (except for statements of cash flow and owner's equity) with
supplemental consolidating schedules provided by MCRLP; and
(ii) in the case of MCRC, the audited consolidated balance
sheet of MCRC and its subsidiaries (including, without limitation, MCRLP
and its subsidiaries)
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at the end of such year, the related audited consolidated statements of
operations, stockholders' equity (deficit) and cash flows for the year
then ended, in each case with supplemental consolidating schedules (except
for statements of cash flow and stockholders' equity) provided by MCRC;
each setting forth in comparative form the figures for the previous fiscal year
and all such statements to be in reasonable detail, prepared in accordance with
GAAP, and, in each case, accompanied by an auditor's report prepared without
qualification by the Accountants;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of its fiscal quarters:
(i) in the case of MCRLP, if prepared, copies of the unaudited
consolidated balance sheet of MCRLP and its subsidiaries as at the end of
such quarter, the related unaudited consolidated statements of operations,
owner's equity (deficit) and cash flows for the portion of MCRLP's fiscal
year then elapsed, with supplemental consolidating schedules (except with
respect to statements of cash flow and owner's equity) provided by MCRLP;
and
(ii) in the case of MCRC, copies of the unaudited consolidated
balance sheet of MCRC and its subsidiaries (including, without limitation,
MCRLP and its subsidiaries) as at the end of such quarter, the related
unaudited consolidated statements of operations, stockholders' equity
(deficit) and cash flows for the portion of MCRC's fiscal year then
elapsed, with supplemental consolidating schedules (except with respect to
statements of cash flow and stockholders' equity) provided by MCRC;
all in reasonable detail and prepared in accordance with GAAP on the same basis
as used in preparation of MCRC's Form 10-Q statements filed with the SEC,
together with a certification by the chief financial officer or vice president
of finance of MCRLP or MCRC, as applicable, that the information contained in
such financial statements fairly presents the financial position of MCRLP or
MCRC (as the case may be) and its subsidiaries on the date thereof (subject to
year-end adjustments);
(c) simultaneously with the delivery of the financial statements
referred to in subsections (a) (for the fourth fiscal quarter of each fiscal
year) above and (b) (for the first three fiscal quarters of each fiscal year), a
statement in the form of Exhibit D hereto signed by the chief financial officer
or vice president of finance of the MCRLP or MCRC, as applicable, and (if
applicable) reconciliations to reflect changes in GAAP since the applicable
Financial Statement Date, but only to the extent that such changes in GAAP
affect the financial covenants set forth in ss.9 hereof; and, in the case of
MCRLP, setting forth in reasonable detail computations evidencing compliance
with the covenants contained in ss.8.7 and ss.9 hereof;
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(d) promptly if requested by the Administrative Agent, a copy of
each report (including any so-called letters of reportable conditions or letters
of no material weakness) submitted to the Borrower, MCRC, or any other Guarantor
or any of their respective subsidiaries by the Accountants in connection with
each annual audit of the books of the Borrower, MCRC, or any other Guarantor or
such subsidiary by such Accountants or in connection with any interim audit
thereof pertaining to any phase of the business of the Borrower, MCRC or any
other Guarantor or any such subsidiary;
(e) contemporaneously with the filing or mailing thereof, copies of
all material of a financial nature sent to the holders of any Indebtedness of
the Borrower or any Guarantor (other than the Loans) for borrowed money, to the
extent that the information or disclosure contained in such material refers to
or could reasonably be expected to have a Material Adverse Effect;
(f) subject to subsection (g) below, contemporaneously with the
filing or mailing thereof, copies of all material of a financial nature filed
with the SEC or sent to the stockholders of MCRC;
(g) as soon as practicable, but in any event not later than ninety
(90) days after the end of each fiscal year of MCRC, copies of the Form 10-K
statement filed by MCRC with the SEC for such fiscal year, and as soon as
practicable, but in any event not later than forty-five (45) days after the end
of each fiscal quarter of MCRC, copies of the Form 10-Q statement filed by MCRC
with the SEC for such fiscal quarter, provided that, in either case, if MCRC has
filed an extension for the filing of such statements, MCRC shall deliver such
statements to the Administrative Agent within ten (10) days after the filing
thereof with the SEC which filing shall be within fifteen (15) days of MCRC's
filing for such extension or such sooner time as required to avert a Material
Adverse Effect on MCRC;
(h) from time to time, but not more frequently than once each
calendar quarter so long as no Default or Event of Default has occurred and is
continuing, such other financial data and information about the Borrower, MCRC,
the other Guarantors, their respective Subsidiaries, the Real Estate and the
Partially-Owned Entities as the Administrative Agent or any Lender acting
through the Administrative Agent may reasonably request, and which is prepared
by such Person in the normal course of its business or is required for
securities and tax law compliance, including without limitation, pro forma
financial statements described in ss.9.9(b)(ii) complete rent rolls for the
Unencumbered Properties and summary rent rolls for the other Real Estate,
existing environmental reports, and insurance certificates with respect to the
Real Estate (including the Unencumbered Properties) and tax returns (following
the occurrence of a Default or Event of Default or, in the case of MCRC, to
confirm MCRC's REIT status); and
(i) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, updates to Schedule 6.3 and
Schedule 6.19 hereto.
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ss.7.5. Notices.
(a) Defaults. The Borrower will, and will cause each Guarantor, as
applicable, to, promptly notify the Administrative Agent in writing of the
occurrence of any Default or Event of Default. If any Person shall give any
notice or take any other action in respect of (x) a claimed default (whether or
not constituting a Default or Event of Default under this Agreement) or (y) a
claimed default by the Borrower, any Guarantor or any of their respective
Subsidiaries, as applicable, under any note, evidence of Indebtedness, indenture
or other obligation for borrowed money to which or with respect to which any of
them is a party or obligor, whether as principal, guarantor or surety, and such
default would permit the holder of such note or obligation or other evidence of
Indebtedness to accelerate the maturity thereof or otherwise cause the entire
Indebtedness to become due, the Borrower, MCRC or such other Guarantor, as the
case may be, shall forthwith give written notice thereof to the Administrative
Agent, describing the notice or action and the nature of the claimed failure to
comply.
(b) Environmental Events. The Borrower will, and will cause each
Guarantor to, promptly give notice in writing to the Administrative Agent (i)
upon the Borrower's or such Guarantor's obtaining knowledge of any material
violation of any Environmental Law affecting any Real Estate or the Borrower's
or such Guarantor's operations or the operations of any of their Subsidiaries,
(ii) upon the Borrower's or such Guarantor's obtaining knowledge of any known
Release of any Hazardous Substance at, from, or into any Real Estate which it
reports in writing or is reportable by it in writing to any governmental
authority and which is material in amount or nature or which could materially
adversely affect the value of such Real Estate, (iii) upon the Borrower's or
such Guarantor's receipt of any notice of material violation of any
Environmental Laws or of any material Release of Hazardous Substances in
violation of any Environmental Laws or any matter that may be a Disqualifying
Environmental Event, including a notice or claim of liability or potential
responsibility from any third party (including without limitation any federal,
state or local governmental officials) and including notice of any formal
inquiry, proceeding, demand, investigation or other action with regard to (A)
the Borrower's or such Guarantor's or any other Person's operation of any Real
Estate, (B) contamination on, from or into any Real Estate, or (C) investigation
or remediation of off-site locations at which the Borrower or such Guarantor or
any of its predecessors are alleged to have directly or indirectly disposed of
Hazardous Substances, or (iv) upon the Borrower's or such Guarantor's obtaining
knowledge that any expense or loss has been incurred by such governmental
authority in connection with the assessment, containment, removal or remediation
of any Hazardous Substances with respect to which the Borrower or such Guarantor
or any Partially-Owned Entity may be liable or for which a lien may be imposed
on any Real Estate; any of which events described in clauses (i) through (iv)
above would have a Material Adverse Effect or constitute a Disqualifying
Environmental Event with respect to any Unencumbered Property.
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(c) Notification of Claims against Unencumbered Properties. The
Borrower will, and will cause each Guarantor to, promptly upon becoming aware
thereof, notify the Administrative Agent in writing of any setoff, claims,
withholdings or other defenses to which any of the Unencumbered Properties are
subject, which (i) would have a material adverse effect on the value of such
Unencumbered Property, (ii) would have a Material Adverse Effect, or (iii) with
respect to such Unencumbered Property, would constitute a Disqualifying
Environmental Event or a Lien which is not a Permitted Lien.
(d) Notice of Litigation and Judgments. The Borrower will, and will
cause each Guarantor and each Guarantor's Subsidiaries to, and the Borrower will
cause each of its respective Subsidiaries to, give notice to the Administrative
Agent in writing within ten (10) days of becoming aware of any litigation or
proceedings threatened in writing or any pending litigation and proceedings an
adverse determination in which could reasonably be expected to have a Material
Adverse Effect or materially adversely affect any Unencumbered Property, or to
which the Borrower, any Guarantor or any of their respective Subsidiaries is or
is to become a party involving an uninsured claim against the Borrower, any
Guarantor or any of their respective Subsidiaries that could reasonably be
expected to have a Materially Adverse Effect or materially adversely affect the
value or operation of the Unencumbered Properties and stating the nature and
status of such litigation or proceedings. The Borrower will, and will cause each
of the Guarantors and the Subsidiaries to, give notice to the Administrative
Agent, in writing, in form and detail reasonably satisfactory to the
Administrative Agent, within ten (10) days of any judgment not covered by
insurance, final or otherwise, against the Borrower, any Guarantor or any of
their Subsidiaries in an amount in excess of $1,000,000.
(e) Acquisition of Real Estate. The Borrower shall promptly provide
the Administrative Agent and the Lenders with any press releases relating to the
acquisition of any Real Estate by the Borrower, any Guarantor, any of their
respective Subsidiaries or any Partially-Owned Entity. In addition, to the
extent not otherwise provided to the Administrative Agent in its press release
and Form 10-Q filings with the SEC, the Borrower shall provide to the
Administrative Agent on a quarterly basis together with the financial statements
referred to in ss.7.4(b) the following information with respect to all Real
Estate acquired during the prior quarter: its address, a brief description, a
brief summary of the key business terms of such acquisition (including sources
and uses of funds for such acquisition), a brief summary of the principal terms
of any financing for such Real Estate, and a statement as to whether such Real
Estate qualifies as an Unencumbered Property.
ss.7.6. Existence of Borrower and Subsidiary Guarantors; Maintenance of
Properties. The Borrower for itself and for each Subsidiary Guarantor insofar as
any such statements relate to such Subsidiary Guarantor will do or cause to be
done all things necessary to, and shall, preserve and keep in full force and
effect its existence as a limited partnership or its existence as another
legally constituted entity, and will do or cause to be done all things necessary
to preserve and keep in full force all of its material rights and franchises and
those of its Subsidiaries. The Borrower (a) will cause all necessary repairs,
renewals, replacements,
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betterments and improvements to be made to all Real Estate owned or controlled
by it or by any of its Subsidiaries or any Subsidiary Guarantor, all as in the
judgment of the Borrower or such Subsidiary or such Subsidiary Guarantor may be
necessary so that the business carried on in connection therewith may be
properly conducted at all times, subject to the terms of the applicable Leases
and partnership agreements or other entity charter documents, (b) will cause all
of its other properties and those of its Subsidiaries and the Subsidiary
Guarantors used or useful in the conduct of its business or the business of its
Subsidiaries or such Subsidiary Guarantor to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment,
ordinary wear and tear excepted, and (c) will, and will cause each of its
Subsidiaries and each Subsidiary Guarantor to, continue to engage primarily in
the businesses now conducted by it and in related businesses consistent with the
requirements of the fourth sentence of ss.7.7 hereof; provided that nothing in
this ss.7.6 shall prevent the Borrower from discontinuing the operation and
maintenance of any of its properties or any of those of its Subsidiaries if such
discontinuance is, in the judgment of the Borrower, desirable in the conduct of
its or their business and such discontinuance does not cause a Default or an
Event of Default hereunder and does not in the aggregate have a Material Adverse
Effect on the Borrower, Guarantors and their respective Subsidiaries taken as a
whole.
ss.7.7. Existence of MCRC; Maintenance of REIT Status of MCRC; Maintenance
of Properties. The Borrower will cause MCRC to do or cause to be done all things
necessary to preserve and keep in full force and effect MCRC's existence as a
Maryland corporation. The Borrower will cause MCRC at all times to maintain its
status as a REIT and not to take any action which could lead to its
disqualification as a REIT. The Borrower shall cause MCRC at all times to
maintain its listing on the New York Stock Exchange. The Borrower will cause
MCRC to continue to operate as a fully-integrated, self-administered and
self-managed real estate investment trust which, together with its Subsidiaries
(including, without limitation MCRLP) owns and operates an improved property
portfolio comprised primarily (i.e., 85% or more by value) of office,
office/flex, warehouse and industrial/warehouse properties. The Borrower will
cause MCRC not to engage in any business other than the business of acting as a
REIT and serving as the general partner and limited partner of MCRLP, as a
member, partner or stockholder of other Persons and as a Guarantor. The Borrower
shall cause MCRC to conduct all or substantially all of its business operations
through MCRLP or through subsidiary partnerships or other entities in which (x)
MCRLP directly or indirectly owns at least 95% of the economic interests and (y)
MCRC directly or indirectly (through wholly-owned Subsidiaries) acts as sole
general partner or managing member. The Borrower shall cause MCRC not to own
real estate assets outside of its interests in MCRLP. The Borrower will cause
MCRC to do or cause to be done all things necessary to preserve and keep in full
force all of its rights and franchises and those of its Subsidiaries. The
Borrower will cause MCRC (a) to cause all of its properties and those of its
Subsidiaries used or useful in the conduct of its business or the business of
its Subsidiaries to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment, ordinary wear and tear
excepted, (b) to cause to be made all necessary repairs, renewals, replacements,
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betterments and improvements thereof, all as in the judgment of MCRC may be
necessary so that the business carried on in connection therewith may be
properly conducted at all times, and (c) to cause each of its Subsidiaries to
continue to engage primarily in the businesses now conducted by it and in
related businesses, consistent with the requirements of the fourth sentence of
this ss.7.7; provided that nothing in this ss.7.7 shall prevent MCRC from
discontinuing the operation and maintenance of any of its properties or any of
those of its Subsidiaries if such discontinuance is, in the judgment of MCRC,
desirable in the conduct of its or their business and such discontinuance does
not cause a Default or an Event of Default hereunder and does not in the
aggregate materially adversely affect the business of MCRC and its Subsidiaries
on a consolidated basis.
ss.7.8. Insurance. The Borrower will, and will cause each Guarantor to,
maintain with respect to its properties, and will cause each of its Subsidiaries
to maintain with financially sound and reputable insurers, insurance with
respect to such properties and its business against such casualties and
contingencies as shall be commercially reasonable and in accordance with the
customary and general practices of businesses having similar operations and real
estate portfolios in similar geographic areas and in amounts, containing such
terms, in such forms and for such periods as may be reasonable and prudent for
such businesses.
ss.7.9. Taxes. The Borrower will, and will cause each Guarantor to, pay or
cause to be paid real estate taxes, other taxes, assessments and other
governmental charges against the Real Estate before the same become delinquent
and will duly pay and discharge, or cause to be paid and discharged, before the
same shall become overdue, all taxes, assessments and other governmental charges
imposed upon its sales and activities, or any part thereof, or upon the income
or profits therefrom, as well as all claims for labor, materials, or supplies
that if unpaid might by law become a lien or charge upon any of the Real Estate;
provided that any such tax, assessment, charge, levy or claim need not be paid
if the validity or amount thereof shall currently be contested in good faith by
appropriate proceedings and if the Borrower or such Guarantor shall have set
aside on its books adequate reserves with respect thereto; and provided further
that the Borrower or such Guarantor will pay all such taxes, assessments,
charges, levies or claims forthwith upon the commencement of proceedings to
foreclose any lien that may have attached as security therefor. If requested by
the Agent, the Borrower will provide evidence of the payment of real estate
taxes, other taxes, assessments and other governmental charges against the Real
Estate in the form of receipted tax bills or other form reasonably acceptable to
the Agent. Notwithstanding the foregoing, a breach of the covenants set forth in
this ss.7.9 shall only constitute an Event of Default if such breach results in
a violation of the covenant set forth in ss.8.1(b) hereof.
ss.7.10. Inspection of Properties and Books. The Borrower will, and will
cause each Guarantor to, permit the Lenders, coordinated through the
Administrative Agent, (a) on an annual basis as a group, or more frequently if
required by law or by regulatory requirements of a Lender or if a Default or an
Event of Default shall have occurred and be continuing, to visit and inspect any
of the properties of the Borrower, any Guarantor or any of their
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respective Subsidiaries, and to examine the books of account of the Borrower,
the Guarantors and their respective Subsidiaries (and to make copies thereof and
extracts therefrom) and (b) to discuss the affairs, finances and accounts of the
Borrower, the Guarantors and their respective Subsidiaries with, and to be
advised as to the same by, its officers, all at such reasonable times and
intervals during normal business hours as the Administrative Agent may
reasonably request; provided that the Borrower shall only be responsible for the
costs and expenses incurred by the Administrative Agent in connection with such
inspections after the occurrence and during the continuance of an Event of
Default; and provided further that such Person has executed a confidentiality
agreement in substantially the form executed by the Administrative Agent as of
the date hereof. The Administrative Agent and each Lender agrees to treat any
non-public information delivered or made available by the Borrower to it in
accordance with the provisions of the confidentiality agreement executed by such
Person.
ss.7.11. Compliance with Laws, Contracts, Licenses, and Permits. The
Borrower will, and will cause each Guarantor to, comply with, and will cause
each of their respective Subsidiaries to comply with (a) all applicable laws and
regulations now or hereafter in effect wherever its business is conducted,
including, without limitation, all Environmental Laws and all applicable federal
and state securities laws, (b) the provisions of its partnership agreement and
certificate or corporate charter and other charter documents and by-laws, as
applicable, (c) all material agreements and instruments to which it is a party
or by which it or any of its properties may be bound (including the Real Estate
and the Leases) and (d) all applicable decrees, orders, and judgments; provided
that any such decree, order or judgment need not be complied with if the
validity or amount thereof shall currently be contested in good faith by
appropriate proceedings and if the Borrower or such Guarantor shall have set
aside on its books adequate reserves with respect thereto; and provided further
that the Borrower or such Guarantor will comply with any such decree, order or
judgment forthwith upon the commencement of proceedings to foreclose any Lien
that may have attached as security therefor.
ss.7.12. Use of Proceeds. Subject at all times to the other provisions of
this Agreement, the Borrower will use the proceeds of the Loans solely (a) to
finance the acquisition, renovation and development of office, office/flex,
industrial/warehouse and multifamily residential properties, (b) to finance the
repayment or prepayment of Indebtedness, (c) for general working capital needs
(including letters of credit), (d) to finance investments in Opportunity Funds,
and (e) to finance the acquisition of mortgage receivables.
ss.7.13. Acquisition of Unencumbered Properties. The Borrower shall
promptly, but in any event within thirty (30) days of the acquisition of an
Unencumbered Property or the qualification of any Real Estate as an Unencumbered
Property, deliver to the Administrative Agent a copy of the Title Policy or
commitment for a Title Policy and the final environmental site assessment for
such Unencumbered Property.
ss.7.14. Additional Guarantors; Solvency of Guarantors.
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(a) If, after the Closing Date, a Subsidiary, that is not a
Guarantor, acquires any Real Estate that then or thereafter qualifies under
(a)-(d) of the definition of Unencumbered Property and is wholly-owned or ground
leased under an Eligible Ground Lease, the Borrower shall cause such Person
(which Person must be or become a wholly-owned Subsidiary) to execute and
deliver a Guaranty to the Administrative Agent and the Lenders in substantially
the form of Exhibit B hereto. Such Guaranty shall evidence consideration and
equivalent value. The Borrower will not permit any Guarantor that owns or ground
leases any Unencumbered Properties to have any Subsidiaries unless such
Subsidiary's business, obligations and undertakings are exclusively related to
the business of such Guarantor in the ownership of the Unencumbered Properties.
(b) The Borrower, MCRC, and each Subsidiary Guarantor is solvent,
other than for Permitted Event(s) permitted by this Agreement which shall be the
only Non-Material Breaches under this ss.7.14(b). The Borrower and MCRC each
acknowledge that, subject to the indefeasible payment and performance in full of
the Obligations, the rights of contribution among each of the them and the
Subsidiary Guarantors are in accordance with applicable laws and in accordance
with each such Person's benefits under the Loans and this Agreement. The
Borrower further acknowledges that, subject to the indefeasible payment and
performance in full of the Obligations, the rights of subrogation of the
Subsidiary Guarantors as against the Borrower and MCRC are in accordance with
applicable laws.
ss.7.15. Further Assurances. The Borrower will, and will cause each
Guarantor to, cooperate with, and to cause each of its Subsidiaries to cooperate
with, the Administrative Agent and the Lenders and execute such further
instruments and documents as the Lenders or the Administrative Agent shall
reasonably request to carry out to their reasonable satisfaction the
transactions contemplated by this Agreement and the other Loan Documents.
ss.7.16. [Intentionally Omitted]
ss.7.17. Environmental Indemnification. The Borrower covenants and agrees
that it and its Subsidiaries will indemnify and hold the Administrative Agent
and each Lender, and each of their respective Affiliates, harmless from and
against any and all claims, expense, damage, loss or liability incurred by the
Administrative Agent or any Lender (including all reasonable costs of legal
representation incurred by the Administrative Agent or any Lender in connection
with any investigative, administrative or judicial proceeding, whether or not
the Administrative Agent or any Lender is party thereto, but excluding, as
applicable for the Administrative Agent or a Lender, any claim, expense, damage,
loss or liability as a result of the gross negligence or willful misconduct of
the Administrative Agent or such Lender or any of their respective Affiliates)
relating to (a) any Release or threatened Release of Hazardous Substances on any
Real Estate; (b) any violation of any Environmental Laws with respect to
conditions at any Real Estate or the operations conducted thereon; (c) the
investigation or remediation of off-site locations at which the Borrower, any
Guarantor or any of their respective Subsidiaries or their predecessors are
alleged to have directly or indirectly disposed
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of Hazardous Substances; or (d) any action, suit, proceeding or investigation
brought or threatened with respect to any Hazardous Substances relating to Real
Estate (including, but not limited to, claims with respect to wrongful death,
personal injury or damage to property). In litigation, or the preparation
therefor, the Lenders and the Administrative Agent shall be entitled to select
their own counsel and participate in the defense and investigation of such
claim, action or proceeding, and the Borrower shall bear the expense of such
separate counsel of the Administrative Agent and the Lenders if (i) in the
written opinion of counsel to the Administrative Agent and the Lenders, use of
counsel of the Borrower's choice could reasonably be expected to give rise to a
conflict of interest, (ii) the Borrower shall not have employed counsel
reasonably satisfactory to the Administrative Agent and the Lenders within a
reasonable time after notice of the institution of any such litigation or
proceeding, or (iii) the Borrower authorizes the Administrative Agent and the
Lenders to employ separate counsel at the Borrower's expense. It is expressly
acknowledged by the Borrower that this covenant of indemnification shall survive
the payment of the Loans and shall inure to the benefit of the Administrative
Agent and the Lenders and their respective Affiliates, their respective
successors, and their respective assigns under the Loan Documents permitted
under this Agreement.
ss.7.18. Response Actions. The Borrower covenants and agrees that if any
Release or disposal of Hazardous Substances shall occur or shall have occurred
on any Real Estate owned by it or any of its Subsidiaries, the Borrower will
cause the prompt containment and removal of such Hazardous Substances and
remediation of such Real Estate if necessary to comply with all Environmental
Laws.
ss.7.19. Environmental Assessments. If the Majority Lenders have
reasonable grounds to believe that a Disqualifying Environmental Event has
occurred with respect to any Unencumbered Property, after reasonable notice by
the Administrative Agent, whether or not a Default or an Event of Default shall
have occurred, the Majority Lenders may determine that the affected Real Estate
no longer qualifies as an Unencumbered Property; provided that prior to making
such determination, the Administrative Agent shall give the Borrower reasonable
notice and the opportunity to obtain one or more environmental assessments or
audits of such Unencumbered Property prepared by a hydrogeologist, an
independent engineer or other qualified consultant or expert approved by the
Administrative Agent, which approval will not be unreasonably withheld, to
evaluate or confirm (i) whether any Release of Hazardous Substances has occurred
in the soil or water at such Unencumbered Property and (ii) whether the use and
operation of such Unencumbered Property materially complies with all
Environmental Laws (including not being subject to a matter that is a
Disqualifying Environmental Event). Such assessment will then be used by the
Administrative Agent to determine whether a Disqualifying Environmental Event
has in fact occurred with respect to such Unencumbered Property. All such
environmental assessments shall be at the sole cost and expense of the Borrower.
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ss.7.20. Employee Benefit Plans.
(a) In General. Each Employee Benefit Plan maintained by the
Borrower, any Guarantor or any of their respective ERISA Affiliates will be
operated in compliance in all material respects with the provisions of ERISA
and, to the extent applicable, the Code, including but not limited to the
provisions thereunder respecting prohibited transactions.
(b) Terminability of Welfare Plans. With respect to each Employee
Benefit Plan maintained by the Borrower, any Guarantor or any of their
respective ERISA Affiliates which is an employee welfare benefit plan within the
meaning of ss.3(1) or ss.3(2)(B) of ERISA, the Borrower, such Guarantor, or any
of their respective ERISA Affiliates, as the case may be, has the right to
terminate each such plan at any time (or at any time subsequent to the
expiration of any applicable bargaining agreement) without material liability
other than liability to pay claims incurred prior to the date of termination.
(c) Unfunded or Underfunded Liabilities. The Borrower will not, and
will not permit any Guarantor to, at any time, have accruing or accrued unfunded
or underfunded liabilities with respect to any Employee Benefit Plan, Guaranteed
Pension Plan or Multiemployer Plan, or permit any condition to exist under any
Multiemployer Plan that would create a withdrawal liability.
ss.7.21. No Amendments to Certain Documents. The Borrower will not, and
will not permit any Guarantor to, at any time cause or permit its certificate of
limited partnership, agreement of limited partnership, articles of
incorporation, by-laws or other charter documents, as the case may be, to be
modified, amended or supplemented in any respect whatever, without (in each
case) the express prior written consent or approval of the Administrative Agent,
if such changes would adversely affect MCRC's REIT status or otherwise
materially adversely affect the rights of the Administrative Agent and the
Lenders hereunder or under any other Loan Document.
ss.7.22. Primary Credit Facility. The Borrower will at all times use this
Agreement as the Borrower's primary revolving credit agreement and will not at
any time during the term of this Agreement permit that ratio of (a) the sum of
the outstanding principal balance of the Loans plus the Maximum Drawing Amount
to (b) the Total Commitment (the "Outstanding Ratio") to be less than the
corresponding ratio under any other revolving credit agreement maintained by the
Borrower or any Guarantor, including MCRC, except that the corresponding ratio
under the $100,000,000 credit facility with PSC (as amended, modified, restated
or refinanced so long as the amount of such facility does not exceed
$100,000,000) may exceed the Outstanding Ratio from time to time.
ss.7.23. Management. Except by reason of death or incapacity, at least
three (3) of the Key Management Individuals (as hereinafter defined) shall
remain active in the executive and/or operational management, in their current
(or comparable) positions, of MCRC (which
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is and shall remain the sole general partner and management of MCRLP); provided,
however, if at least three (3) of the Key Management Individuals are not so
active in such positions (except by reason of death or incapacity as aforesaid),
then within ninety (90) days of the occurrence of such event, MCRC shall propose
and appoint such individual(s) of comparable experience, reputation and
otherwise reasonably acceptable to the Majority Lenders to such position(s) such
that, after such appointment, such acceptable replacement individuals, together
with the Key Management Individuals remaining so active in such positions with
MCRC, if any, total at least three (3). For purposes hereof, "Key Management
Individuals" shall mean and include Thomas A. Rizk, Mitchell E. Hersh, John R.
Cali, Brant B. Cali, Barry Lefkowitz, Roger W. Thomas and Timothy M. Jones.
ss.7.24. Distributions in the Ordinary Course. In the ordinary course of
business MCRLP causes all of its and MCRC's Subsidiaries to make net
Distributions, as described in clause (iii) of the definition thereof, upstream
to MCRLP and MCRC, and shall continue to follow such ordinary course of
business.
ss.8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER AND THE GUARANTORS. The
Borrower for itself and on behalf of the Guarantors covenants and agrees that,
so long as any Loan, Letter of Credit or Note is outstanding or any of the
Lenders has any obligation to make any Loans or any Lender has any obligation to
issue, extend or renew any Letters of Credit:
ss.8.1. Restrictions on Indebtedness.
The Borrower and the Guarantors may, and may permit their respective
Subsidiaries to, create, incur, assume, guarantee or be or remain liable for,
contingently or otherwise, any Indebtedness other than the specific Indebtedness
which is prohibited under this ss.8.1 and with respect to which each of the
Borrower and the Guarantors will not, and will not permit any Subsidiary to,
create, incur, assume, guarantee or be or remain liable for, contingently or
otherwise, singularly or in the aggregate as follows:
(a) Indebtedness which would result in a Default or Event of Default
under ss.9 hereof or under any other provision of this Agreement;
(b) An aggregate amount in excess of $10,000,000 at any one time in
respect of (i) taxes, assessments, governmental charges or levies and claims for
labor, materials and supplies for which payment therefor is required to be made
in accordance with the provisions of ss.7.9 and has not been timely made, (ii)
uninsured judgments or awards, with respect to which the applicable periods for
taking appeals have expired, or with respect to which final and unappealable
judgments or awards have been rendered, and (iii) current unsecured liabilities
incurred in the ordinary course of business, which (A) are overdue for more than
sixty (60) days, and (B) are not being contested in good faith; and
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(c) Guarantees of the Indebtedness of any Opportunity Fund.
The terms and provisions of this ss.8.1 are in addition to, and not in
limitation of, the covenants set forth in ss.9 of this Agreement.
ss.8.2. Restrictions on Liens, Etc. None of the Borrower, any Guarantor,
any Operating Subsidiary and any wholly-owned Subsidiary will: (a) create or
incur or suffer to be created or incurred or to exist any lien, encumbrance,
mortgage, pledge, negative pledge, charge, restriction or other security
interest of any kind upon any of its property or assets of any character whether
now owned or hereafter acquired, or upon the income or profits therefrom; (b)
transfer any of such property or assets or the income or profits therefrom for
the purpose of subjecting the same to the payment of Indebtedness or performance
of any other obligation in priority to payment of its general creditors; (c)
acquire, or agree or have an option to acquire, any property or assets upon
conditional sale or other title retention or purchase money security agreement,
device or arrangement; (d) suffer to exist for a period of more than thirty (30)
days after the same shall have been incurred any Indebtedness or claim or demand
against it that if unpaid might by law or upon bankruptcy or insolvency, or
otherwise, be given any priority whatsoever over its general creditors; or (e)
sell, assign, pledge or otherwise transfer any accounts, contract rights,
general intangibles, chattel paper or instruments, with or without recourse (the
foregoing items (a) through (e) being sometimes referred to in this ss.8.2
collectively as "Liens"), provided that the Borrower, the Guarantors and any
Subsidiary may create or incur or suffer to be created or incurred or to exist:
(i) Liens securing taxes, assessments, governmental charges
(including, without limitation, water, sewer and similar charges) or levies or
claims for labor, material and supplies, the Indebtedness with respect to which
is not prohibited by ss.8.1(b);
(ii) deposits or pledges made in connection with, or to secure
payment of, worker's compensation, unemployment insurance, old age pensions or
other social security obligations; and deposits with utility companies and other
similar deposits made in the ordinary course of business;
(iii) Liens (other than affecting the Unencumbered Properties) in
respect of judgments or awards, the Indebtedness with respect to which is not
prohibited by ss.8.1(b);
(iv) encumbrances on properties consisting of easements, rights of
way, covenants, notice of use limitations under Environmental Laws, restrictions
on the use of real property and defects and irregularities in the title thereto;
landlord's or lessor's Liens under Leases to which the Borrower, any Guarantor,
or any Subsidiary is a party or bound; purchase options granted at a price not
less than the market value of such property; and other similar Liens or
encumbrances on properties, none of which interferes materially and adversely
with the use of the property affected in the ordinary conduct of the business of
the owner thereof, and which matters neither (x) individually or in the
aggregate have a Material
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Adverse Effect nor (xx) make title to such property unmarketable by the
conveyancing standards in effect where such property is located;
(v) any Leases (excluding "synthetic leases") entered into good
faith with Persons that are not Affiliates; provided that Leases with Affiliates
on market terms and with monthly market rent payments required to be paid are
Permitted Liens;
(vi) Liens and other encumbrances or rights of others which exist on
the date of this Agreement and which do not otherwise constitute a breach of
this Agreement;
(vii) as to Real Estate which are acquired after the date of this
Agreement, Liens and other encumbrances or rights of others which exist on the
date of acquisition and which do not otherwise constitute a breach of this
Agreement;
(viii) Liens affecting the Unencumbered Properties in respect of
judgments or awards that have been in force for less than the applicable period
for taking an appeal, so long as execution is not levied thereunder or in
respect of which, at the time, a good faith appeal or proceeding for review is
being prosecuted, and in respect of which a stay of execution shall have been
obtained pending such appeal or review; provided that the Borrower shall have
obtained a bond or insurance with respect thereto to the Administrative Agent's
reasonable satisfaction;
(ix) Liens securing Indebtedness for the purchase price of capital
assets (other than Real Estate but including Indebtedness in respect of
Capitalized Leases for equipment and other equipment leases) to the extent not
otherwise prohibited by ss.8.1;
(x) other Liens (other than affecting the Unencumbered Properties)
in connection with any Indebtedness not prohibited under ss.8.1 which do not
otherwise result in a Default or Event of Default under this Agreement; and
(xi) Liens granted in accordance with ss.8.4(b) hereof.
Notwithstanding the foregoing provisions of this ss.8.2, the failure of
any Unencumbered Property to comply with the covenants set forth in this ss.8.2
shall result in such Unencumbered Property's no longer qualifying as
Unencumbered Property under this Agreement, but such disqualification shall not
by itself constitute a Default or Event of Default, unless the cause of such
non-qualification otherwise constitutes a Default or an Event of Default.
ss.8.3. Restrictions on Investments. None of the Borrower, any Guarantor,
or any Subsidiary will make or permit to exist or to remain outstanding any
Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United States
of America that mature within one (1) year from the date of purchase;
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(b) demand deposits, certificates of deposit, bankers acceptances
and time deposits of United States banks having total assets in excess of
$1,000,000,000 provided that any such deposits may be moved to a qualifying bank
within thirty (30) days after the Borrower, Guarantor or Subsidiary has
knowledge that any depository bank no longer has total assets in excess of such
amounts;
(c) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any state thereof, or in both cases any governmental subdivision,
that at the time of purchase have been rated and the ratings for which are not
less than "P 1" if rated by Moody's, and not less than "A 1" if rated by S&P;
(d) Investments existing on the Closing Date and listed on Schedule
8.3(d) hereto;
(e) So long as no Event of Default enumerated in ss.8.7(a)(ii) has
occurred and is continuing or would occur after giving effect thereto,
acquisitions of Real Estate consistent with the requirements of the fourth
sentence of ss.7.7 hereof and the equity of Persons, provided (i) that within
thirty (30) days after any such Investment the total assets of MCRLP, MCRC and
their Subsidiaries, taken as a whole, shall be comprised of assets of which
eighty-five percent (85%) or more comply with the parameters of the fourth
sentence of ss.7.7 hereof and (ii) that the Borrower shall not permit any of its
Subsidiaries which is not a Guarantor, or which does not become a Guarantor, to
acquire any Unencumbered Property, and in all cases such Guarantor shall be a
wholly-owned Subsidiary of MCRLP;
(f) any Investments now or hereafter made in the Borrower, any
Guarantor or other Subsidiary, as identified or which will be identified from
time to time in Schedule 8.3(f) hereto, which Schedule 8.3(f) shall be updated
annually at the time of the delivery of the financial statements referred to in
ss. 7.4(a) hereof;
(g) Investments in respect of (1) equipment, inventory and other
tangible personal property acquired in the ordinary course of business, (2)
current trade and customer accounts receivable for services rendered in the
ordinary course of business and payable in accordance with customary trade
terms, (3) advances to employees for travel expenses, drawing accounts and
similar expenditures, and (4) prepaid expenses made in the ordinary course of
business;
(h) any other Investments made in the ordinary course of business
and consistent with past business practices;
(i) interest rate hedges in connection with Indebtedness;
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(j) shares of so-called "money market funds" registered with the SEC
under the Investment Company Act of 1940 which maintain a level per-share value,
invest principally in marketable direct or guaranteed obligations of the United
States of America and agencies and instrumentalities thereof, and have total
assets in excess of $50,000,000 provided that any such shares are moved to a
qualifying money market fund within thirty (30) days after the Borrower, any
Guarantor or any Subsidiary has knowledge that any money market fund no longer
has total assets in excess of that amount; and
(k) Investments permitted under ss.9.8 hereof.
ss.8.4. Merger, Consolidation and Disposition of Assets.
None of the Borrower, any Guarantor, any Operating Subsidiary or any
wholly-owned Subsidiary will:
(a) Become a party to any merger, consolidation or reorganization
without the prior Unanimous Lender Approval, except that so long as no Default
or Event of Default has occurred and is continuing, or would occur after giving
effect thereto, the merger, consolidation or reorganization of one or more
Persons with and into the Borrower, any Guarantor, or any wholly-owned
Subsidiary, shall be permitted if (i) such action is not hostile, (ii) the
Borrower, any Guarantor, or any wholly-owned Subsidiary, as the case may be, is
the surviving entity and (iii) such merger, consolidation or reorganization does
not cause a breach of ss.7.23 hereof or a Default or Event of Default under
ss.12.1(m) hereof; provided, that for any such merger, consolidation or
reorganization (other than (w) the merger or consolidation of one or more
Subsidiaries of MCRLP with and into MCRLP, (x) the merger or consolidation of
two or more Subsidiaries of MCRLP, (y) the merger or consolidation of one or
more Subsidiaries of MCRC with and into MCRC, or (z) the merger or consolidation
of two or more Subsidiaries of MCRC), the Borrower shall provide to the
Administrative Agent a statement in the form of Exhibit D hereto signed by the
chief financial officer or treasurer or vice president of finance or other
thereon designated officer of the Borrower and setting forth in reasonable
detail computations evidencing compliance with the covenants contained in ss.9
hereof and certifying that no Default or Event of Default has occurred and is
continuing, or would occur and be continuing after giving effect to such merger,
consolidation or reorganization and all liabilities, fixed or contingent,
pursuant thereto;
(b) Sell, transfer or otherwise dispose of (collectively and
individually, "Sell" or a "Sale") or grant a Lien to secure Indebtedness (an
"Indebtedness Lien") on any of its now owned, ground leased or hereafter
acquired assets without obtaining the prior written consent of the Required
Lenders, except after written notice to the Administrative Agent for:
(i) the Sale of or granting of an Indebtedness Lien on any
Unencumbered Property or other Real Estate so long as no Default or Event
of Default has then occurred and is continuing, or would occur and be
continuing after giving effect to such
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Sale or Indebtedness Lien; provided, that prior to any Sale of any
Unencumbered Property or other Real Estate or the granting of an
Indebtedness Lien under this clause (i), the Borrower shall provide to the
Administrative Agent a statement in the form of Exhibit D hereto signed by
the chief financial officer or treasurer or vice president of finance or
other thereon designated officer of the Borrower and setting forth in
reasonable detail computations evidencing compliance with the covenants
contained in ss.9 hereof and certifying that no Default or Event of
Default has occurred and is continuing, or would occur and be continuing
after giving effect to such proposed Sale or Indebtedness Lien and all
liabilities, fixed or contingent, pursuant thereto;
(ii) the Sale of or the granting of an Indebtedness Lien on any
Unencumbered Property while a Default or Event of Default (other than a
Default or an Event of Default under ss.12.1(a) (including, without
limitation, any such failure to pay resulting from acceleration of the
Loans), ss.12.1(b), ss.12.1(c) (resulting from a failure to comply with
ss.7.7 (as to the legal existence and REIT status of MCRC) or ss.9),
ss.12.1(g), ss.12.1(h), or ss.12.1(j)) has then occurred and is continuing
or would occur and be continuing after giving effect to such Sale or
Indebtedness Lien; provided, that the Borrower shall (A) apply the net
proceeds of each such permitted Sale or Indebtedness Lien to the repayment
of the Loans or (B) segregate the net proceeds of such permitted Sale or
Indebtedness Lien in an escrow account with the Administrative Agent or
with a financial institution reasonably acceptable to the Administrative
Agent and apply such net proceeds solely to a qualified, deferred exchange
under ss. 1031 of the Code or to another use with the prior written
approval of the Required Lenders or (C) complete an exchange of such
Unencumbered Property for other real property of equivalent value under
ss. 1031 of the Code so long as such other real property becomes an
Unencumbered Property upon acquisition, and, in any event, the Borrower
shall provide to the Administrative Agent a statement in the form of
Exhibit D hereto signed by the chief financial officer, or treasurer or
vice president of finance or other thereon designated officer and setting
forth in reasonable detail computations evidencing compliance with the
covenant in ss.9 hereof and certifying the use of the proceeds of such
Sale or Indebtedness Lien and certifying that no Default or Event of
Default above enumerated has occurred and is continuing or would occur and
be continuing after giving effect to such Sale or Indebtedness Lien, and
all liabilities fixed or contingent pursuant thereto;
(iii) the Sale of or the granting of an Indebtedness Lien on any
Real Estate (other than an Unencumbered Property) while a Default or Event
of Default has then occurred and is continuing or would occur and be
continuing after giving effect to such Sale or Indebtedness Lien;
provided, that the Borrower shall (A) apply the net proceeds of each such
Sale or Indebtedness Lien to the repayment of the Loans or (B) segregate
the net proceeds of such Sale or Indebtedness Lien in an escrow account
with the Administrative Agent or with a financial institution reasonably
acceptable to the Administrative Agent and apply such net proceeds solely
to a qualified, deferred
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exchange under ss. 1031 of the Code or to another use with the prior
written approval of the Required Lenders or (C) complete an exchange of
such Real Estate for other real property of equivalent value under ss.
1031 of the Code;
(iv) the Sale or granting of an Indebtedness Lien on any
Unencumbered Property while any Default or Event of Default has then
occurred and is continuing provided (A) the Borrower shall provide to the
Administrative Agent a statement in the form of Exhibit D hereto signed by
the chief financial officer or treasurer or vice president of finance or
other thereon designated officer of the Borrower and setting forth in
reasonable detail computations evidencing the status of compliance with
the covenants contained in ss.9 hereof and certifying that the continuing
Default or Event of Default will be cured by such proposed Sale or
Indebtedness Lien and no other Default or Event of Default would occur and
be continuing after giving effect to such proposed Sale or Indebtedness
Lien and all liabilities fixed or contingent, pursuant thereto and (B) the
Sale or granting of an Indebtedness Lien pursuant to this ss.8.4(b) (iv)
shall not (x) occur more than four times during the period that any
Commitment is outstanding, (y) involve a Sale or Indebtedness Lien for
greater than $200,000,000 in the aggregate in the combined four permitted
occasions (which shall be the maximum member of permitted occasions) under
(x), or (z) involve a Sale at less than fair market value or an
Indebtedness Lien on terms more onerous or expensive than fair market
terms from institutional lenders; and
(v) the Sale of or the granting of an Indebtedness Lien on any of
its now owned or hereafter acquired assets (other than Real Estate) in one
or more transactions.
ss.8.5. Negative Pledge. From and after the date hereof, neither the
Borrower nor any Guarantor will, and will not permit any Subsidiary to, enter
into any agreement containing any provision prohibiting the creation or
assumption of any Lien upon its properties (other than prohibitions on liens for
particular assets (other than an Unencumbered Property) set forth in a security
instrument in connection with Secured Indebtedness for such assets and the
granting or effect of such liens does not otherwise constitute a Default or
Event of Default), revenues or assets, whether now owned or hereafter acquired,
or restricting the ability of the Borrower or the Guarantors to amend or modify
this Agreement or any other Loan Document. The Borrower shall be permitted a
period of (i) thirty (30) days to cure any Non-Material Breach affecting other
than MCRC or MCRLP and (ii) ten (10) days to cure any Non-Material Breach
affecting MCRC or MCRLP under this ss.8.5 before the same shall be an Event of
Default under ss.12.1(c).
ss.8.6. Compliance with Environmental Laws. None of the Borrower, any
Guarantor, or any Subsidiary will do any of the following: (a) use any of the
Real Estate or any portion thereof as a facility for the handling, processing,
storage or disposal of Hazardous Substances except for quantities of Hazardous
Substances used in the ordinary course of business and in
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compliance with all applicable Environmental Laws, (b) cause or permit to be
located on any of the Real Estate any underground tank or other underground
storage receptacle for Hazardous Substances except in compliance with
Environmental Laws, (c) generate any Hazardous Substances on any of the Real
Estate except in compliance with Environmental Laws, or (d) conduct any activity
at any Real Estate or use any Real Estate in any manner so as to cause a Release
causing a violation of Environmental Laws or a Material Adverse Effect or a
violation of any Environmental Law; provided that a breach of this covenant
shall result in the affected Real Estate no longer being an Unencumbered
Property, but shall only constitute an Event of Default under ss.12.1(d) if such
breach is not a Non-Material Breach.
ss.8.7. Distributions. (a) The Borrower (i) will not in any period of four
(4) consecutive completed fiscal quarters make Distributions with respect to
common stock or other common equity interests (other than pursuant to clause
(iii) in the definition of Distribution) in such period in an aggregate amount
in excess of 90% of Funds From Operations for such period or (ii) will not make
any Distributions (other than pursuant to clause (iii) in the definition of
Distribution) during any period when any Event of Default under ss.12.1(a)
(including, without limitation, any failure to pay resulting from acceleration
of the Loans) ss.12.1(b), ss.12.1(c) resulting from a failure to comply with
ss.7.7 (as to the legal existence and REIT status of MCRC), ss.9, ss.12(g),
ss.12.1(h), or ss.12.1(j) has occurred and is continuing or (iii) will not make
any Distributions to any Guarantor or its Subsidiaries when such Person is the
subject of a Permitted Event except as required by order of the tribunal in
which such Permitted Event is occurring; and except that such Person may make
Distributions to a Guarantor or Subsidiary while such distributing Person is the
subject of a Permitted Event; provided, however, that the Borrower may at all
times make Distributions (after taking into account all available funds of MCRC
from all other sources) in the minimum aggregate amount required in order to
enable MCRC to continue to qualify as a REIT. In the event that MCRC or MCRLP
raises equity during the term of this Agreement, the permitted percentage of
Distributions will be adjusted based on the total declared distribution per
share and partnership units over the most recent four (4) quarters to Funds From
Operations per weighted average share and partnership unit based on the most
recent four (4) quarters.
(b) MCRC will not, during any period when any Event of Default has
occurred and is continuing, make any Distributions in excess of the
Distributions required to be made by MCRC in order to maintain its status as a
REIT.
ss.8.8. Employee Benefit Plans. None of the Borrower, any Guarantor or any
ERISA Affiliate will
(a) engage in any "prohibited transaction" within the meaning of ss.406 of
ERISA or ss.4975 of the Code which could result in a material liability for the
Borrower, any Guarantor or any of their respective Subsidiaries; or
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(b) permit any Guaranteed Pension Plan to incur an "accumulated funding
deficiency", as such term is defined in ss.302 of ERISA, whether or not such
deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an extent which,
or terminate any Guaranteed Pension Plan in a manner which, could result in the
imposition of a lien or encumbrance on the assets of the Borrower, any Guarantor
or any of their respective Subsidiaries pursuant to ss.302(f) or ss.4068 of
ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances requiring the
posting of security pursuant to ss.307 of ERISA or ss.401(a)(29) of the Code; or
(e) permit or take any action which would result in the aggregate benefit
liabilities (with the meaning of ss.4001 of ERISA) of all Guaranteed Pension
Plans exceeding the value of the aggregate assets of such Plans, disregarding
for this purpose the benefit liabilities and assets of any such Plan with assets
in excess of benefit liabilities; provided that none of (a) - (e) shall be an
Event of Default under ss.12.1(c) if the prohibited matters occurring are in the
aggregate within the Dollar limits permitted within ss.12.1(l) and are otherwise
the subject of the matters that are covered by the Events of Default in
ss.12.1(l)
ss.8.9. Fiscal Year. The Borrower will not, and will not permit the
Guarantors or any of their respective Subsidiaries to, change the date of the
end of its fiscal year from that set forth in ss.6.5; provided that such persons
may change their respective fiscal years if they give the Administrative Agent
thirty (30) days prior written notice of such change and the parties make
appropriate adjustments satisfactory to the Borrower and the Lenders to the
provisions of this Agreement (including without limitation those set forth in
ss.9) to reflect such change in fiscal year.
ss.9. FINANCIAL COVENANTS OF THE BORROWER. The Borrower covenants and
agrees that, so long as any Loan, Letter of Credit or Note is outstanding or any
Lender has any obligation to make any Loan or any Lender has any obligation to
issue, extend or renew any Letters of Credit:
ss.9.1. Leverage Ratio. As at the end of any fiscal quarter or other date
of measurement, the Borrower shall not permit Consolidated Total Liabilities to
exceed 55% of Consolidated Total Capitalization.
ss.9.2. Secured Indebtedness. As at the end of any fiscal quarter or other
date of measurement, the Borrower shall not permit Consolidated Secured
Indebtedness to exceed 40% of Consolidated Capitalized NOI.
ss.9.3. Tangible Net Worth. As at the end of any fiscal quarter or any
other date of measurement, the Borrower shall not permit Consolidated Tangible
Net Worth to be less than
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the sum of (a) $1,250,000,000 plus (b) 75% of the sum of (i) the aggregate
proceeds received by MCRC (net of fees and expenses customarily incurred in
transactions of such type) in connection with any offering of stock in MCRC and
(ii) the aggregate value of operating units issued by MCRLP in connection with
asset or stock acquisitions (valued at the time of issuance by reference to the
terms of the agreement pursuant to which such units are issued), in each case
after the Closing Date and on or prior to the date such determination of
Consolidated Tangible Net Worth is made.
ss.9.4. Debt Service Coverage. As at the end of any fiscal quarter or
other date of measurement, the Borrower shall not permit Consolidated Adjusted
Net Income to be less than two (2) times Consolidated Total Debt Service, based
on the results of the most recent two (2) complete fiscal quarters. For purposes
of this ss.9.4, the Consolidated Total Debt Service of the Borrower shall
include, on a net basis, positive amortization and negative amortization of each
of the Harborside Assumed Debt.
ss.9.5. Fixed Charge Coverage. As at the end of any fiscal quarter or
other date of measurement, the Borrower shall not permit Consolidated Adjusted
Net Income to be less than one and three-quarters (1.75) times Consolidated
Fixed Charges, based on the results of the most recent two (2) complete fiscal
quarters.
ss.9.6. Unsecured Indebtedness. As at the end of any fiscal quarter or
other date of measurement, the Borrower shall not permit Consolidated Unsecured
Indebtedness to exceed 60% of aggregate Capitalized Unencumbered Property NOI
for all Unencumbered Properties.
ss.9.7. Unencumbered Property Debt Service Coverage. As at the end of any
fiscal quarter or other date of measurement, the Borrower shall not permit the
aggregate Adjusted Unencumbered Property NOI for all Unencumbered Properties to
be less than two (2) times Consolidated Total Unsecured Debt Service, based on
the results of the most recent two (2) complete fiscal quarters.
ss.9.8. Investment Limitation. None of the Borrower, any Guarantor, or any
Subsidiary will make or permit to exist or to remain outstanding any Investment
in violation of the following restrictions and limitations:
(a) As at the end of any fiscal quarter or other date of
measurement, the book value of Unimproved Non-Income Producing Land shall not
exceed ten (10%) of Consolidated Capitalized NOI.
(b) Investments in Opportunity Funds shall be Without Recourse to
the Borrower, the Guarantors and their Subsidiaries as required in the
definition of Opportunity Fund, shall otherwise comply with the requirements of
the definition of Opportunity Fund, and shall not exceed the lesser of 7.5% of
Consolidated Capitalized NOI or $150,000,000.
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(c) As at the end of any fiscal quarter or other date of
measurement, the aggregate Budgeted Project Costs of all Construction-in-Process
shall not exceed fifteen (15%) percent of Consolidated Capitalized NOI. For
purposes of this ss.9.8(c), Construction-in- Process shall not include so-called
"build to suit" properties which are (i) seventy-five (75%) percent pre-leased
(by rentable square foot) to tenants which have a minimum credit rating of
BBB-from S&P or Baa3 from Moody's, as the case may be, or which have a financial
condition reasonably acceptable to the Majority Lenders (provided that the
Borrower shall submit any such request for the Lender's acceptance of a tenant's
financial condition to the Administrative Agent in writing, and the
Administrative Agent shall, in turn, promptly forward such request to each
Lender; each Lender shall then have five (5) Business Days from its deemed
receipt of such request to approve or disapprove of such tenant's financial
condition, with any Lender's failure to send notice of disapproval to the
Administrative Agent within five (5) Business Days being deemed to be its
approval) and (ii) in substantial compliance, with respect to both time and
cost, with the original construction budget and construction schedule, as
amended by change orders or otherwise updated.
(d) As at the end of any fiscal quarter or other date of
measurement, the value of Indebtedness of third parties to the Borrower, the
Guarantors, or their Subsidiaries for borrowed money which is unsecured or is
secured by mortgage liens (valued at the book value of such Indebtedness) shall
not exceed fifteen (15%) percent of Consolidated Capitalized NOI.
(e) The Investments set forth in clauses (a) through (d) above,
taken in the aggregate, shall not exceed thirty (30%) percent of Consolidated
Capitalized NOI.
(f) Investments in Real Estate other than office, office flex, and
industrial/warehouse properties, taken in the aggregate, shall not exceed
fifteen (15%) of Consolidated Capitalized NOI.
ss.9.9. Covenant Calculations.
(a) For purposes of the calculations to be made pursuant to
ss.ss.9.1-9.8 (and the defined terms relevant thereto, including, without
limitation, those relating to "debt service"), references to Indebtedness or
liabilities of the Borrower shall mean Indebtedness or liabilities (including,
without limitation, Consolidated Total Liabilities) of the Borrower, plus (but
without double-counting):
(i) all Indebtedness or liabilities of the Operating
Subsidiaries, the Guarantors and any other wholly-owned Subsidiary
(excluding any such Indebtedness or liabilities owed to the Borrower or
any Guarantor; provided that, as to MCRC, MCRC has a corresponding
Indebtedness or liability to the Borrower),
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(ii) all Indebtedness or liabilities of each Partially-Owned
Entity (including for Capitalized Leases), but only to the extent, if any,
that said Indebtedness or liability is Recourse to the Borrower, the
Guarantors or their respective Subsidiaries or any of their respective
assets (other than their respective interests in such Partially- Owned
Entity); provided that Recourse Indebtedness arising from such Person's
acting as general partner or guarantor of collection only (and not of
payment or performance) of a Partially-Owned Entity shall be limited to
the amount by which the Indebtedness exceeds the liquidation value of the
Real Estate and other assets owned by such Partially-Owned Entity if the
creditor owed such Indebtedness is required by law or by contract to seek
repayment of such Indebtedness from such Real Estate and other assets
before seeking repayment from such Person, and
(iii) Indebtedness or liabilities of each Partially-Owned
Entity to the extent of the pro-rata share of such Indebtedness or
liability allocable to the Borrower, the Guarantors or their respective
Subsidiaries without double counting.
(b) For purposes of ss.ss.9.1-9.8 hereof, Consolidated Adjusted Net
Income, Revised Consolidated Adjusted Net Income, Adjusted Unencumbered Property
NOI and Revised Adjusted Unencumbered Property NOI (and all defined terms and
calculations using such terms) shall be adjusted (i) to deduct the actual
results of any Real Estate disposed of by the Borrower, a Guarantor or any of
their respective Subsidiaries during the relevant fiscal period (for Revised
Consolidated Adjusted Net Income and Revised Adjusted Unencumbered Property NOI
only), (ii) to include the pro forma results of any Real Estate acquired by the
Borrower, a Guarantor or any of their respective Subsidiaries during the
relevant fiscal period, with such pro forma results being calculated by (x)
using the Borrower's pro forma projections for such acquired property, subject
to the Administrative Agent's reasonable approval, if such property has been
owned by the Borrower, a Guarantor or any of their respective Subsidiaries for
less than one complete fiscal quarter or (y) using the actual results for such
acquired property and adjusting such results for the appropriate period of time
required by the applicable financial covenant, if such property has been owned
by the Borrower, a Guarantor or any of their respective Subsidiaries for at
least one complete fiscal quarter (for Revised Consolidated Adjusted Net Income
and Revised Adjusted Unencumbered Property NOI only) and (iii) to the extent
applicable, to include the pro rata share of results attributable to the
Borrower from unconsolidated Subsidiaries of MCRC, the Borrower and their
respective Subsidiaries and from unconsolidated Partially-Owned Entities;
provided that income shall not be included until received without restriction in
cash by the Borrower.
(c) For purposes ofss.ss.9.1 - 9.8 hereof, if any change in GAAP
after the Financial Statement Date results in a material change in the
calculation to be performed in any such section, solely as a result of such
change in GAAP, the Lenders and the Borrower shall negotiate in good faith a
modification of any such covenant(s) so that the economic effect of the
calculation of such covenant(s) using GAAP as so changed is as close as feasible
to what the
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economic effect of the calculation of such covenant(s) would have been using
GAAP in effect as of the Financial Statement Date.
ss.10. CONDITIONS TO THE CLOSING DATE. The obligations of the Lenders to
make the initial Revolving Credit Loans and of the Fronting Bank to issue any
initial Letters of Credit shall be subject to the satisfaction of the following
conditions precedent on or prior to April ___, 1998:
ss.10.1. Loan Documents. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto and shall be in full
force and effect.
ss.10.2. Certified Copies of Organization Documents. The Administrative
Agent shall have received (i) from the Borrower and each of the Subsidiary
Guarantors a copy, certified as of the Closing Date by a duly authorized officer
of such Person (or its general partner, if such Person is a partnership, or its
managing member, if such Person is a limited liability company), to be true and
complete, of each of its certificate of limited partnership, agreement of
limited partnership, incorporation documents, by-laws, and/or other
organizational documents as in effect on the Closing Date, and (ii) from MCRC a
copy, certified as of a date within thirty (30) days prior to the Closing Date
by the appropriate officer of the State of Maryland to be true and correct, of
the corporate charter of MCRC, in each case along with any other organization
documents of the Borrower and each Subsidiary Guarantor (and its general
partner, if such Person is a partnership, or its managing member, if such Person
is a limited liability company) or MCRC, as the case may be, and each as in
effect on the date of such certification.
ss.10.3. By-laws; Resolutions. All action on the part of the Borrower, the
Subsidiary Guarantors and MCRC necessary for the valid execution, delivery and
performance by the Borrower, the Subsidiary Guarantors and MCRC of this
Agreement and the other Loan Documents to which any of them is or is to become a
party as of the Closing Date shall have been duly and effectively taken, and
evidence thereof satisfactory to the Lenders shall have been provided to the
Administrative Agent. Without limiting the foregoing, the Administrative Agent
shall have received from MCRC true copies of its by-laws and the resolutions
adopted by its board of directors authorizing the transactions described herein
and evidencing the due authorization, execution and delivery of the Loan
Documents to which MCRC and the Borrower and Subsidiary Guarantors of which MCRC
is a controlling Person are a party, each certified by the secretary as of a
recent date to be true and complete.
ss.10.4. Incumbency Certificate; Authorized Signers. The Administrative
Agent shall have received from each of the Borrower, MCRC and the Subsidiary
Guarantors an incumbency certificate, dated as of the Closing Date, signed by a
duly authorized officer such Person and giving the name of each individual who
shall be authorized: (a) to sign, in the name and on behalf of such Person, each
of the Loan Documents to which such Person is or is to become a party as of the
Closing Date; (b) in the case of the Borrower, to make Loan Requests,
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Conversion Requests and Competitive Bid Requests and to apply for Letters of
Credit on behalf of the Borrower; and (c) in the case of the Borrower, to give
notices and to take other action on behalf of the Borrower and the Guarantors
under the Loan Documents.
ss.10.5. Title Policies. The Administrative Agent (on behalf of the
Lenders) shall have received copies of the Title Policies for all Real Estate
which are Unencumbered Properties as of the Closing Date.
ss.10.6. Certificates of Insurance. The Administrative Agent shall have
received (a) current certificates of insurance as to all of the insurance
maintained by the Borrower and its Subsidiaries on the Real Estate (including
flood insurance if necessary) from the insurer or an independent insurance
broker, identifying insurers, types of insurance, insurance limits, and policy
terms; and (b) such further information and certificates from the Borrower, its
insurers and insurance brokers as the Administrative Agent may reasonably
request.
ss.10.7. Environmental Site Assessments. The Administrative Agent shall
have received environmental site assessments from a hydrogeologist,
environmental engineer, qualified consultant or other expert and in form and
substance reasonably satisfactory to the Administrative Agent, covering all Real
Estate and all other real property in respect of which the Borrower or any of
its Subsidiaries may have material liability, whether contingent or otherwise,
for dumping or disposal of Hazardous Substances and which are in the possession
of the Borrower.
ss.10.8. Opinion of Counsel Concerning Organization and Loan Documents.
Each of the Lenders and the Administrative Agent shall have received favorable
opinions addressed to the Lenders and the Administrative Agent in form and
substance reasonably satisfactory to the Lenders and the Administrative Agent
from (a) Pryor, Cashman, Sherman & Flynn, as counsel to the Borrower, and the
Subsidiary Guarantors MCRC and their respective Subsidiaries with respect to New
York and New Jersey law and certain matters of Delaware law, (b) Ballard, Spahr,
Andrews and Ingersoll, as counsel to MCRC, with respect to Maryland law, (c)
Cohn & Birnbaum, as counsel to the Borrower and the Subsidiary Guarantors with
respect to Connecticut law, (d) Eckell Sparks Levy Auerbach Monte & Emper, as
counsel to the Borrower and the Subsidiary Guarantors with respect to
Pennsylvania law, (e) Jones, Day, Reavis & Pogue, as counsel to the Borrower and
the Subsidiary Guarantors with respect to Texas law, (f) Gunster, Yoakley,
Valdes-Fauli & Stewart P.A., as counsel to the Borrower and the Subsidiary
Guarantors with respect to Florida law, and (g) Battle Fowler LLP as counsel to
the Borrower and the Subsidiary Guarantors with respect to California law.
ss.10.9. Tax and Securities Law Compliance. Each of the Lenders and the
Administrative Agent shall also have received from Pryor, Cashman, Sherman &
Flynn, as counsel to the Borrower and MCRC, a favorable opinion addressed to the
Lenders and the Administrative Agent, in form and substance satisfactory to each
of the Lenders and the
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Administrative Agent, with respect to the qualification of MCRC as a REIT and
certain other tax and securities laws matters.
ss.10.10. Guaranties. Each of the Guaranties to be executed and delivered
on the Closing Date shall have been duly executed and delivered by the Guarantor
thereunder.
ss.10.11. Certifications from Government Officials; UCC-11 Reports. The
Administrative Agent shall have received (i) long-form certifications from
government officials evidencing the legal existence, good standing and foreign
qualification of the Borrower and each Guarantor, along with a certified copy of
the certificate of limited partnership or certificate of incorporation of the
Borrower and each Guarantor, all as of the most recent practicable date; and
(ii) UCC-11 search results from the appropriate jurisdictions for the Borrower
and each Guarantor with respect to the Unencumbered Properties.
ss.10.12. Proceedings and Documents. All proceedings in connection with
the transactions contemplated by this Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in form and substance
to each of the Lenders', the Borrower's, the Guarantors' and the Administrative
Agent's counsel, and the Administrative Agent, each of the Lenders and such
counsel shall have received all information and such counterpart originals or
certified or other copies of such documents as the Administrative Agent may
reasonably request.
ss.10.13. Fees. The Borrower shall have paid to the Administrative Agent,
for the accounts of the Lenders, the Syndication Agent, the Arrangers or for its
own account, as applicable, all of the fees and expenses that are due and
payable as of the Closing Date in accordance with this Agreement and the Fee
Letter.
ss.10.14. Closing Certificate; Compliance Certificate. The Borrower shall
have delivered a Closing Certificate to the Administrative Agent, the form of
which is attached hereto as Exhibit E. The Borrower shall have delivered a
compliance certificate in the form of Exhibit D hereto evidencing compliance
with the covenants set forth in ss.9 hereof, the absence of any Default or Event
of Default, and the accuracy of all representations and warranties in all
material respects.
ss.10.15. Subsequent Guarantors. As a condition to the effectiveness of
any subsequent Guaranty, each subsequent Guarantor shall deliver such documents,
agreements, instruments and opinions as the Administrative Agent shall
reasonably require as to such Guarantor and the Unencumbered Property owned or
ground-leased by such Guarantor that are analogous to the deliveries made by the
Guarantors as of the Closing Date pursuant to ss.10.2 through ss.10.8, ss.10.10
and ss.10.11.
ss.10.16. Existing Credit Facility. The existing Indebtedness of the
Borrower to the lenders party to the Revolving Credit Agreement dated as of
August 6, 1997 among the
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Borrower, such lenders, Fleet, as agent for such lenders and the other parties
thereto, shall have been satisfied in full, or will be satisfied in full with
the proceeds of the initial Revolving Credit Loan hereunder, and such Revolving
Credit Agreement shall have been (or will be) terminated; provided that the
Existing Letters of Credit (as defined in ss.3.7 hereof) shall remain
outstanding and become Letters of Credit under this Agreement.
ss.11. CONDITIONS TO ALL BORROWINGS. The obligations of the Lenders to
make any Loan and of any Lender to issue, extend or renew any Letter of Credit,
in each case, whether on or after the Closing Date, shall also be subject to the
satisfaction of the following conditions precedent:
ss.11.1. Representations True; No Event of Default; Compliance
Certificate. Each of the representations and warranties of the Borrower and the
Guarantors contained in this Agreement, the other Loan Documents or in any
document or instrument delivered pursuant to or in connection with this
Agreement shall be true as of the date as of which they were made and shall also
be true at and as of the time of the making of each Loan or the issuance,
extension or renewal of each Letter of Credit, with the same effect as if made
at and as of that time (except to the extent (i) of changes resulting from
transactions contemplated or not prohibited by this Agreement or the other Loan
Documents (ii) of changes occurring in the ordinary course of business, (iii)
that such representations and warranties relate expressly to an earlier date and
(iv) that such untruth is disclosed when first known to the Borrower or a
Guarantor in the next delivered compliance certificate, and is a Non-Material
Breach); and no Default or Event of Default under this Agreement shall have
occurred and be continuing on the date of any Loan Request or Competitive Bid
Request or on the Drawdown Date of any Loan (other than a Default or Event of
Default arising solely from the Borrower's failure to comply with the provision
of ss. 7.22 and such borrowing is to cure, and will cure, such Default or Event
of Default without causing any other Default or Event of Default). Each of the
Lenders shall have received a certificate of the Borrower as provided in
ss.2.5(iv)(c) or ss.2A.9.
ss.11.2. No Legal Impediment. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of the Administrative Agent or any Lender would make it illegal for any Lender
to make such Loan or to participate in the issuance, extension or renewal of
such Letter of Credit or, in the reasonable opinion of the Administrative Agent,
would make it illegal to issue, extend or renew such Letter of Credit.
ss.11.3. Governmental Regulation. Each Lender shall have received such
statements in substance and form reasonably satisfactory to such Lender as such
Lender shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of Governors of the
Federal Reserve System.
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ss.12. EVENTS OF DEFAULT; ACCELERATION; ETC.
ss.12.1. Events of Default and Acceleration. If any of the following
events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of the Loans when
the same shall become due and payable, whether at the stated date of maturity or
any accelerated date of maturity or at any other date fixed for payment; none of
the foregoing is a Non-Material Breach.
(b) the Borrower shall fail to pay any interest on the Loans, the
Commitment Fee, the Facility Fee, any Letter of Credit Fee or any other sums due
hereunder or under any of the other Loan Documents (including, without
limitation, amounts due under ss.7.17) when the same shall become due and
payable, whether at the stated date of maturity or any accelerated date of
maturity or at any other date fixed for payment, and such failure continues for
five (5) days; none of the foregoing is a Non-Material Breach.
(c) the Borrower or any Guarantor or any of their respective
Subsidiaries shall fail to comply with any of their respective covenants
contained in: ss.7.1 within ten (10) days of any such amount being due (except
with respect to interest, fees and other sums covered by clause (b) above or
principal covered by clause (a) above); ss.7.6 (as to the legal existence of
MCRLP for which no period to cure is granted); ss.7.7 (as to the legal existence
and REIT status of MCRC for which no period to cure is granted); ss.7.12;
ss.7.21 within ten (10) days of the occurrence of same; ss.7.22 within thirty
(30) days of any non-compliance; ss.8 (except with respect to ss.8.1(b), ss.8.5
for Non-Material Breaches only, or ss.8.6); or ss.9; none of the foregoing is a
Non-Material Breach.
(d) the Borrower or any Guarantor or any of their respective
Subsidiaries shall fail to perform any other term, covenant or agreement
contained herein or in any other Loan Document (other than those specified
elsewhere in this ss.12) and such failure continues for thirty (30) days (other
than a Non-Material Breach (excluding ss.8.5 for which the Non- Material Breach
must be cured within the thirty or ten days, as applicable, provided therein)
and such cure period shall not extend any specific cure period set forth in any
term, covenant or agreement covered by this ss.12.1(d)).
(e) any representation or warranty of the Borrower or any Guarantor
or any of their respective Subsidiaries in this Agreement or any of the other
Loan Documents or in any other document or instrument delivered pursuant to or
in connection with this Agreement shall prove to have been false in any material
respect upon the date when made or deemed to have been made or repeated (other
than a Non-Material Breach).
(f) the Borrower or any Guarantor or any of their respective
Subsidiaries shall (i) fail to pay at maturity, or within any applicable period
of grace or cure, any obligation
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for borrowed money or credit received (other than current obligations in the
ordinary course of business) or in respect of any Capitalized Leases (x) in
respect of any Recourse obligations or credit in an aggregate amount in excess
of $5,000,000 (determined in accordance with ss. 9.9 hereof) or (y) in respect
of any Without Recourse obligations or credit in an aggregate amount in excess
of $50,000,000 (determined in accordance with ss. 9.9 hereof), or (ii) fail to
observe or perform any material term, covenant or agreement contained in any
agreement by which it is bound, evidencing or securing borrowed money or credit
received (other than current obligations in the ordinary course of business) or
in respect of any Capitalized Leases (x) in respect of any Recourse obligations
or credit in an aggregate amount in excess of $5,000,000 (determined in
accordance with ss. 9.9 hereof) for such period of time (after the giving of
appropriate notice if required) as would permit the holder or holders thereof or
of any obligations issued thereunder to accelerate the maturity thereof or (y)
in respect of any Without Recourse obligations or credit in an aggregate amount
in excess of $50,000,000 (determined in accordance with ss. 9.9 hereof), and the
holder or holders thereof shall have accelerated the maturity thereof; none of
the foregoing is a Non-Material Breach.
(g) any Credit Party (other than for a Permitted Event) shall make
an assignment for the benefit of creditors, or admit in writing its inability to
pay or generally fail to pay its debts as they mature or become due, or shall
petition or apply for the appointment of a trustee or other custodian,
liquidator or receiver of any Credit Party or of any substantial part of the
properties or assets of any Credit Party (other than for a Permitted Event) or
shall commence any case or other proceeding relating to any Credit Party (other
than for a Permitted Event) under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar law of
any jurisdiction, now or hereafter in effect, or shall take any action to
authorize or in furtherance of any of the foregoing, or if any such petition or
application shall be filed or any such case or other proceeding shall be
commenced against any Credit Party (other than for a Permitted Event) and (i)
any Credit Party (other than for a Permitted Event) shall indicate its approval
thereof, consent thereto or acquiescence therein or (ii) any such petition,
application, case or other proceeding shall continue undismissed, or unstayed
and in effect, for a period of seventy-five (75) days.
(h) a decree or order is entered appointing any trustee, custodian,
liquidator or receiver or adjudicating any Credit Party (other than for a
Permitted Event) bankrupt or insolvent, or approving a petition in any such case
or other proceeding, or a decree or order for relief is entered in respect of
any Credit Party (other than for a Permitted Event) in an involuntary case under
federal bankruptcy laws as now or hereafter constituted, and such proceeding,
decree or order shall continue undismissed, or unstayed and in effect, for a
period of seventy-five (75) days.
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for a period of more than thirty (30) days, any uninsured final
judgment against the Borrower, any Guarantor or any of their respective
Subsidiaries that, with other outstanding uninsured
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final judgments, undischarged, unsatisfied and unstayed, against the Borrower,
any Guarantor or any of their respective Subsidiaries exceeds in the aggregate
$10,000,000 (other than for a Permitted Event).
(j) any of the Loan Documents or any material provision of any Loan
Documents shall be canceled, terminated, revoked or rescinded otherwise than in
accordance with the terms thereof or with the express prior written agreement,
consent or approval of the Administrative Agent, or any Guaranty shall be
canceled, terminated, revoked or rescinded at any time or for any reason
whatsoever, or any action at law, suit or in equity or other legal proceeding to
make unenforceable, cancel, revoke or rescind any of the Loan Documents shall be
commenced by or on behalf of the Borrower or any of its Subsidiaries or any
Guarantor or any of its Subsidiaries, or any court or any other governmental or
regulatory authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to the effect
that, any one or more of the Loan Documents is illegal, invalid or unenforceable
as to any material terms thereof, other than as any of the same may occur from a
Permitted Event permitted by this Agreement.
(k) any "Event of Default" or default (after notice and expiration
of any period of grace, to the extent provided, and if none is specifically
provided or denied, then for a period of thirty (30) days after notice), as
defined or provided in any of the other Loan Documents, shall occur and be
continuing.
(l) the Borrower or any ERISA Affiliate incurs any liability to the
PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA in an aggregate
amount exceeding $5,000,000, or the Borrower or any ERISA Affiliate is assessed
withdrawal liability pursuant to Title IV of ERISA by a Multiemployer Plan
requiring aggregate annual payments exceeding $5,000,000, or any of the
following occurs with respect to a Guaranteed Pension Plan: (i) an ERISA
Reportable Event, or a failure to make a required installment or other payment
(within the meaning of ss.302(f)(1) of ERISA), provided that the Administrative
Agent determines in its reasonable discretion that such event (A) could be
expected to result in liability of the Borrower or any of its Subsidiaries to
the PBGC or such Guaranteed Pension Plan in an aggregate amount exceeding
$5,000,000 and (B) could constitute grounds for the termination of such
Guaranteed Pension Plan by the PBGC, for the appointment by the appropriate
United States District Court of a trustee to administer such Guaranteed Pension
Plan or for the imposition of a lien in favor of such Guaranteed Pension Plan;
or (ii) the appointment by a United States District Court of a trustee to
administer such Guaranteed Pension Plan; or (iii) the institution by the PBGC of
proceedings to terminate such Guaranteed Pension Plan; to the extent that any
breach of ss.6.16 or ss.7.20 is a matter that constitutes a specific breach of a
provision of this ss.12.1(l), the breach of ss.6.16 or ss.7.20 shall not be a
Non-Material Breach.
(m) Notwithstanding the provisions of ss.8.4(a), any person or group
of persons (within the meaning of Section 13 or 14 of the Securities Exchange
Act of 1934, as amended) shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 promulgated by
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the Securities and Exchange Commission under said Act) of 40% or more of the
outstanding shares of common stock of MCRC in a transaction or a series of
related transactions and, if at any time within one (1) year following such
acquisition (i) fewer than 5 of the 7 Key Management Individuals (as defined in
ss.7.23) remain active in the executive and/or operational management in their
current (or comparable) positions with MCRC or (ii) individuals who were
directors of MCRC on the date of such acquisition shall cease to constitute a
majority of the voting members of the board of directors of MCRC.
then, and in any such event, so long as the same may be continuing, the
Administrative Agent may, and upon the request of the Required Lenders shall, by
notice in writing to the Borrower, declare all amounts owing with respect to
this Agreement, the Notes and the other Loan Documents and all Reimbursement
Obligations to be, and they shall thereupon forthwith become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower and each Guarantor;
provided that in the event of any Event of Default specified in ss.12.1(g) or
ss.12.1(h), all such amounts shall become immediately due and payable
automatically and without any requirement of notice from any of the Lenders or
the any of Administrative Agent or action by the Lenders or the Administrative
Agent.
A Non-Material Breach shall require that the Borrower commence and
continue to exercise reasonable diligent efforts to cure such breach (which
shall occur within any specific time period for curing a Non-Material Breach
elsewhere set forth in this Agreement if any). Such efforts may include (and for
a Permitted Event shall include) the release of the affected Person(s) (other
than MCRC) as the Guarantor pursuant to ss.5 so long as such release (i) cures
such Non-Material Breach (ii) does not otherwise cause a Default or Event of
Default, and (iii) does not have a Material Adverse Effect on the Borrower, the
remaining Guarantors, and their respective Subsidiaries, taken as a whole.
Continuing failure of the Borrower to comply with the requirements to commence
and continue to exercise reasonable diligent efforts to cure such Non-Material
Breach shall constitute a material breach after notice from the Administrative
Agent.
ss.12.2. Termination of Commitments. If any one or more Events of Default
specified in ss.12.1(g) or ss.12.1(h) shall occur, any unused portion of the
Commitments hereunder shall forthwith terminate and the Lenders shall be
relieved of all obligations to make Loans to the Borrower and the Administrative
Agent and any Fronting Bank shall be relieved of all further obligations to
issue, extend or renew Letters of Credit. If any other Event of Default shall
have occurred and be continuing, whether or not the Lenders shall have
accelerated the maturity of the Loans pursuant to ss.12.1, the Administrative
Agent may, and upon the request of the Required Lenders shall, by notice to the
Borrower, terminate the unused portion of the credit hereunder, and upon such
notice being given such unused portion of the credit hereunder shall terminate
immediately and each of the Lenders shall be relieved of all further obligations
to make Loans, the Administrative Agent and any Fronting Bank shall be relieved
of all further obligations to issue, extend or renew Letters of Credit. No such
termination of the credit
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hereunder shall relieve the Borrower or any Guarantor of any of the Obligations
or any of its existing obligations to the Lenders arising under other agreements
or instruments.
ss.12.3. Remedies. In the event that one or more Events of Default shall
have occurred and be continuing, whether or not the Lenders shall have
accelerated the maturity of the Loans pursuant to ss.12.1, the Required Lenders
may direct the Administrative Agent to proceed to protect and enforce the rights
and remedies of the Administrative Agent and the Lenders under this Agreement,
the Notes, any or all of the other Loan Documents or under applicable law by
suit in equity, action at law or other appropriate proceeding (including for the
specific performance of any covenant or agreement contained in this Agreement or
the other Loan Documents or any instrument pursuant to which the Obligations are
evidenced and, to the full extent permitted by applicable law, the obtaining of
the ex parte appointment of a receiver), and, if any amount shall have become
due, by declaration or otherwise, proceed to enforce the payment thereof or any
other legal or equitable right or remedy of the Administrative Agent and the
Lenders under the Loan Documents or applicable law. No remedy herein conferred
upon the Lenders or the Administrative Agent or the holder of any Note or
purchaser of any Letter of Credit Participation is intended to be exclusive of
any other remedy and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or under any of the other Loan
Documents or now or hereafter existing at law or in equity or by statute or any
other provision of law.
ss.13. SETOFF. Without demand or notice, during the continuance of any
Event of Default, any deposits (general or specific, time or demand, provisional
or final, regardless of currency, maturity, or the branch at which such deposits
are held, but specifically excluding tenant security deposits, other fiduciary
accounts and other segregated escrow accounts required to be maintained by the
Borrower for the benefit of any third party) or other sums credited by or due
from any of the Lenders to the Borrower or its Subsidiaries or any other
property of the Borrower or its Subsidiaries in the possession of the
Administrative Agent or a Lender may be applied to or set off against the
payment of the Obligations. Each of the Lenders agrees with each other Lender
that (a) if pursuant to any agreement between such Lender and the Borrower
(other than this Agreement or any other Loan Document), an amount to be set off
is to be applied to Indebtedness of the Borrower to such Lender, other than with
respect to the Obligations, such amount shall be applied ratably to such other
Indebtedness and to the Obligations, and (b) if such Lender shall receive from
the Borrower or its Subsidiaries, whether by voluntary payment, exercise of the
right of setoff, counterclaim, cross action, enforcement of the Obligations by
proceedings against the Borrower or its Subsidiaries at law or in equity or by
proof thereof in bankruptcy, reorganization, liquidation, receivership or
similar proceedings, or otherwise, and shall retain and apply to the payment of
the Note or Notes held by, or Reimbursement Obligations owed to, such Lender any
amount in excess of its ratable portion of the payments received by all of the
Lenders with respect to the Notes held by, and Reimbursement Obligations owed
to, all of the Lenders, such Lender will make such disposition and arrangements
with the other Lenders with respect to such excess, either by way of
distribution, pro tanto assignment of claims, subrogation or otherwise,
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as shall result in each Lender receiving in respect of the Notes held by it or
Reimbursement Obligations owed it, its proportionate payment as contemplated by
this Agreement; provided that if all or any part of such excess payment is
thereafter recovered from such Lender, such disposition and arrangements shall
be rescinded and the amount restored to the extent of such recovery, but without
interest. Notwithstanding the foregoing, no Lender shall exercise a right of
setoff if such exercise would limit or prevent the exercise of any other remedy
or other recourse against the Borrower or its Subsidiaries; and provided
further, if a Lender receives any amount in connection with the enforcement by
such Lender against any particular assets held as collateral for Secured
Indebtedness existing on the date hereof and unrelated to the Obligations which
is owing to such Lender by the Borrower, such Lender shall not be required to
ratably apply such amount to the Obligations.
ss.14. THE ADMINISTRATIVE AGENT.
ss.14.1. Authorization. (a) The Administrative Agent is authorized to take
such action on behalf of each of the Lenders and to exercise all such powers as
are hereunder and under any of the other Loan Documents and any related
documents delegated to the Administrative Agent, together with such powers as
are reasonably incident thereto, provided that no duties or responsibilities not
expressly assumed herein or therein shall be implied to have been assumed by the
Administrative Agent. The relationship between the Administrative Agent and the
Lenders is and shall be that of agent and principal only, and nothing contained
in this Agreement or any of the other Loan Documents shall be construed to
constitute the Administrative Agent as a trustee or fiduciary for any Lender.
Subject to the terms and conditions hereof, the Administrative Agent shall
discharge its functions as "Administrative Agent" with the same degree of care
as it performs administrative services for loans in which it is the sole lender.
The Administrative Agent and the Fronting Bank shall be fully justified in
failing or refusing to take any action under ss.3 hereof unless it shall first
have received such advice or concurrence of the Majority Lenders as it
reasonably deems appropriate or it shall first be indemnified to its reasonable
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
(b) The Borrower, without further inquiry or investigation, shall,
and is hereby authorized by the Lenders to, assume that all actions taken by the
Administrative Agent hereunder and in connection with or under the Loan
Documents are duly authorized by the Lenders. The Lenders shall notify the
Borrower of any successor to Administrative Agent by a writing signed by
Required Lenders, which successor shall be reasonably acceptable to the Borrower
so long as no Default or Event of Default has occurred and is continuing.
ss.14.2. Employees and Agents. The Administrative Agent may exercise its
powers and execute its duties by or through employees or agents and shall be
entitled to take, and to rely
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on, advice of counsel concerning all matters pertaining to its rights and duties
under this Agreement and the other Loan Documents. The Administrative Agent may
utilize the services of such Persons as the Administrative Agent in its sole
discretion may reasonably determine, and all reasonable fees and expenses of any
such Persons shall be paid by the Borrower.
ss.14.3. No Liability. Neither the Administrative Agent, nor any of its
shareholders, directors, officers or employees nor any other Person assisting
them in their duties nor any agent or employee thereof, shall be liable for any
waiver, consent or approval given or any action taken, or omitted to be taken,
in good faith by it or them hereunder or under any of the other Loan Documents,
or in connection herewith or therewith, or be responsible for the consequences
of any oversight or error of judgment whatsoever, except that the Administrative
Agent may be liable for losses due to its willful misconduct or gross
negligence.
ss.14.4. No Representations. Neither the Administrative Agent nor the
Syndication Agent shall be responsible for the execution or validity or
enforceability of this Agreement, the Notes, the Letters of Credit, or any of
the other Loan Documents or for the validity, enforceability or collectibility
of any such amounts owing with respect to the Notes, or for any recitals or
statements, warranties or representations made herein or in any of the other
Loan Documents or in any certificate or instrument hereafter furnished to it by
or on behalf of any Guarantor or the Borrower or any of their respective
Subsidiaries, or be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements in this
Agreement or the other Loan Documents. Neither the Administrative Agent nor the
Syndication Agent shall be bound to ascertain whether any notice, consent,
waiver or request delivered to it by the Borrower or any Guarantor or any holder
of any of the Notes shall have been duly authorized or is true, accurate and
complete. Neither the Administrative Agent nor the Syndication Agent has made
nor does it now make any representations or warranties, express or implied, nor
does it assume any liability to the Lenders, with respect to the credit
worthiness or financial condition of the Borrower or any of its Subsidiaries or
any Guarantor or any of the Subsidiaries or any tenant under a Lease or any
other entity. Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent, the Syndication Agent or any other
Lender, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement.
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ss.14.5. Payments.
(a) A payment by the Borrower to the Administrative Agent hereunder
or any of the other Loan Documents for the account of any Lender shall
constitute a payment to such Lender. The Administrative Agent agrees to
distribute to each Lender such Lender's pro rata share of payments received by
the Administrative Agent for the account of the Lenders, as provided herein or
in any of the other Loan Documents. All such payments shall be made on the date
received, if before 1:00 p.m., and if after 1:00 p.m., on the next Business Day.
If payment is not made on the day received, interest thereon at the overnight
federal funds effective rate shall be paid pro rata to the Lenders.
(b) If in the reasonable opinion of the Administrative Agent the
distribution of any amount received by it in such capacity hereunder, under the
Notes or under any of the other Loan Documents might involve it in material
liability, it may refrain from making distribution until its right to make
distribution shall have been adjudicated by a court of competent jurisdiction,
provided that interest thereon at the overnight federal funds effective rate
shall be paid pro rata to the Lenders. If a court of competent jurisdiction
shall adjudge that any amount received and distributed by the Administrative
Agent is to be repaid, each Person to whom any such distribution shall have been
made shall either repay to the Administrative Agent its proportionate share of
the amount so adjudged to be repaid or shall pay over the same in such manner
and to such Persons as shall be determined by such court.
(c) Notwithstanding anything to the contrary contained in this
Agreement or any of the other Loan Documents, any Lender that fails (i) to make
available to the Administrative Agent its pro rata share of any Loan or to
purchase any Letter of Credit Participation or (ii) to comply with the
provisions of ss.13 with respect to making dispositions and arrangements with
the other Lenders, where such Lender's share of any payment received, whether by
setoff or otherwise, is in excess of its pro rata share of such payments due and
payable to all of the Lenders, in each case as, when and to the full extent
required by the provisions of this Agreement, or to adjust promptly such
Lender's outstanding principal and its pro rata Commitment Percentage as
provided in ss.2.1, shall be deemed delinquent (a "Delinquent Lender") and shall
be deemed a Delinquent Lender until such time as such delinquency is satisfied.
A Delinquent Lender shall be deemed to have assigned any and all payments due to
it from the Borrower, whether on account of outstanding Loans, interest, fees or
otherwise, to the remaining nondelinquent Lenders for application to, and
reduction of, their respective pro rata shares of all outstanding Loans. The
Delinquent Lender hereby authorizes the Administrative Agent to distribute such
payments to the nondelinquent Lenders in proportion to their respective pro rata
shares of all outstanding Loans. If not previously satisfied directly by the
Delinquent Lender, a Delinquent Lender shall be deemed to have satisfied in full
a delinquency when and if, as a result of application of the assigned payments
to all outstanding Loans of the nondelinquent Lenders, the Lenders' respective
pro rata shares of all outstanding Loans have returned to those in effect
immediately prior to such delinquency and without giving effect to the
nonpayment causing such delinquency.
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ss.14.6. Holders of Notes. The Administrative Agent may deem and treat the
payee of any Notes or the purchaser of any Letter of Credit Participation as the
absolute owner or purchaser thereof for all purposes hereof until it shall have
been furnished in writing with a different name by such payee or by a subsequent
holder, assignee or transferee.
ss.14.7. Indemnity. The Lenders ratably and severally agree hereby to
indemnify and hold harmless the Administrative Agent (in its capacity as such
and not in its capacity as a Lender) and its Affiliates from and against any and
all claims, actions and suits (whether groundless or otherwise), losses,
damages, costs, expenses (including any expenses for which the Administrative
Agent has not been reimbursed by the Borrower as required by ss.15), and
liabilities of every nature and character arising out of or related to this
Agreement, the Notes, or any of the other Loan Documents or the transactions
contemplated or evidenced hereby or thereby, or the Administrative Agent's
actions taken hereunder or thereunder, except to the extent that any of the same
shall be directly caused by the Administrative Agent's willful misconduct or
gross negligence.
ss.14.8. Administrative Agent as Lender. In its individual capacity as a
Lender, Chase shall have the same obligations and the same rights, powers and
privileges in respect to its Commitment and the Loans made by it, and as the
holder of any of the Notes and as the purchaser of any Letter of Credit
Participations, as it would have were it not also the Administrative Agent.
ss.14.9. Notification of Defaults and Events of Default. Each Lender
hereby agrees that, upon learning of the existence of a default, Default or an
Event of Default, it shall (to the extent notice has not previously been
provided) promptly notify the Administrative Agent thereof. The Administrative
Agent hereby agrees that upon receipt of any notice under this ss.14.9 it shall
promptly notify the other Lenders of the existence of such default, Default or
Event of Default.
ss.14.10. Duties in the Case of Enforcement. In case one or more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Administrative Agent shall, if (a)
so requested by the Required Lenders and (b) the Lenders have provided to the
Administrative Agent such additional indemnities and assurances against expenses
and liabilities as the Administrative Agent may reasonably request, proceed to
enforce the provisions of this Agreement and exercise all or any such other
legal and equitable and other rights or remedies as it may have in respect of
enforcement of the Lenders' rights against the Borrower and the Guarantors under
this Agreement and the other Loan Documents. The Required Lenders may direct the
Administrative Agent in writing as to the method and the extent (other than when
such direction as to extent requires Unanimous Lender Approval under ss.25) of
any such enforcement, the Lenders (including any Lender which is not one of the
Required Lenders) hereby agreeing to ratably and severally indemnify and hold
the Administrative Agent harmless from all liabilities incurred in respect of
all actions taken or omitted in accordance with such directions other than
actions taken in
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gross negligence or willful misconduct, provided that the Administrative Agent
need not comply with any such direction to the extent that the Administrative
Agent reasonably believes the Administrative Agent's compliance with such
direction to be unlawful or commercially unreasonable in any applicable
jurisdiction.
ss.14.11. Successor Administrative Agent. Chase, or any successor
Administrative Agent, may resign as Administrative Agent at any time by giving
written notice thereof to the Lenders and to the Borrower. In addition, the
Required Lenders may remove the Administrative Agent in the event of the
Administrative Agent's gross negligence or willful misconduct or in the event
that the Administrative Agent ceases to hold a Commitment of at least
$20,000,000 or a Commitment Percentage of at least five percent (5%) under this
Agreement. Any such resignation or removal shall be effective upon appointment
and acceptance of a successor Administrative Agent, as hereinafter provided.
Upon any such resignation or removal, the Required Lenders shall have the right
to appoint a successor Administrative Agent, which is a Lender under this
Agreement, provided that so long as no Default or Event of Default has occurred
and is continuing the Borrower shall have the right to approve any successor
Administrative Agent, which approval shall not be unreasonably withheld. Upon
the resignation of Chase as the Administrative Agent, the Borrower may elect the
Syndication Agent to become the successor Administrative Agent for all purposes
under this Agreement and the other Loan Documents. If, in the case of a
resignation by the Administrative Agent, no successor Administrative Agent shall
have been so appointed by the Required Lenders and approved by the Borrower, and
shall have accepted such appointment, within thirty (30) days after the retiring
Administrative Agent's giving of notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint any one of the other
Lenders as a successor Administrative Agent; provided that the Administrative
Agent shall have first submitted the names of two (2) Lenders to the Borrower
and, within ten (10) Business Days of such submission the Borrower shall not
have selected one of such Lenders as the successor Administrative Agent. Upon
the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Administrative Agent, and the retiring or
removed Administrative Agent shall be discharged from all further duties and
obligations as Administrative Agent under this Agreement. After any
Administrative Agent's resignation or removal hereunder as Administrative Agent,
the provisions of this ss.14 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent under this
Agreement.
ss.14.12. Notices. Any notices or other information required hereunder to
be provided to the Administrative Agent and any formal statement or notice given
by the Administrative Agent to the Borrower or any Lender shall be promptly
forwarded by the Administrative Agent to each of the other Lenders.
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ss.15. EXPENSES. The Borrower agrees to pay (a) the reasonable costs of
incurred by Chase and Fleet and the Arrangers in producing this Agreement, the
other Loan Documents and the other agreements and instruments mentioned herein,
(b) the reasonable fees, expenses and disbursements of one outside counsel to
both the Administrative Agent and the Syndication Agent, one local counsel to
the Administrative Agent and the Syndication Agent incurred in connection with
the preparation, administration or interpretation of the Loan Documents and
other instruments mentioned herein, each closing hereunder, and amendments,
modifications, approvals, consents or waivers hereto or hereunder, (c) the
reasonable fees, expenses and disbursements of the Administrative Agent and the
Syndication Agent incurred by the Administrative Agent and the Syndication Agent
in connection with the preparation, administration or interpretation of the Loan
Documents (including those relating to the Competitive Bid Loans) and other
instruments mentioned herein, each closing hereunder, any amendments,
modifications, approvals, consents or waivers hereto or hereunder, or the
cancellation of any Loan Document upon payment in full in cash of all of the
Obligations or pursuant to any terms of such Loan Document for providing for
such cancellation, including, without limitation, the reasonable fees and
disbursements (including, without limitation, reasonable photocopying costs) of
one counsel to the Administrative Agent and the Syndication Agent in preparing
the documentation, (d) the reasonable fees, costs, expenses and disbursements of
the Arrangers and their Affiliates incurred in connection with the syndication
and/or participations of the Loans, including, without limitation, costs of
preparing syndication materials and photocopying costs, subject to the
limitations set forth in the Fee Letter (e) all reasonable expenses (including
reasonable attorneys' fees and costs, which attorneys may be employees of any
Lender or the Administrative Agent or the Syndication Agnt, and the fees and
costs of appraisers, engineers, investment bankers, surveyors or other experts
retained by any Lender or the Administrative Agent or the Syndication Agent in
connection with any such enforcement, preservation proceedings or dispute)
incurred by any Lender or the Administrative Agent or the Syndication Agent in
connection with (i) the enforcement of or preservation of rights under any of
the Loan Documents against the Borrower or any of its Subsidiaries or any
Guarantor or the administration thereof after the occurrence and during the
continuance of a Default or Event of Default (including, without limitation,
expenses incurred in any restructuring and/or "workout" of the Loans), and (ii)
any litigation, proceeding or dispute whether arising hereunder or otherwise, in
any way related to any Lender's or the Administrative Agent's relationship with
the Borrower, any Guarantor or any of their Subsidiaries, (f) all reasonable
fees, expenses and disbursements of the Administrative Agent incurred in
connection with UCC searches and (g) all costs incurred by the Administrative
Agent in the future in connection with its inspection of the Unencumbered
Properties after the occurrence and during the continuance of an Event of
Default. The covenants of this ss.15 shall survive payment or satisfaction of
payment of amounts owing with respect to the Notes.
ss.16. INDEMNIFICATION. The Borrower agrees to indemnify and hold harmless
the Administrative Agent, the Syndication Agent, the Arrangers and each of the
Lenders and the shareholders, directors, agents, officers, subsidiaries and
affiliates of the Administrative
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Agent, the Syndication Agent, the Arrangers and each of the Lenders from and
against any and all claims, actions and suits sought or brought by a third
party, whether groundless or otherwise, and from and against any and all
liabilities, losses, settlement payments, obligations, damages and expenses of
every nature and character, including reasonable legal fees and expenses,
arising out of or resulting in any way from this Agreement or any of the other
Loan Documents or the transactions contemplated hereby or thereby or which
otherwise arise in connection with the financing, including, without limitation,
(a) any actual or proposed use by the Borrower or any of its Subsidiaries of the
proceeds of any of the Loans, (b) the Borrower or any of its Subsidiaries or any
Guarantor entering into or performing this Agreement or any of the other Loan
Documents, or (c) pursuant to ss.7.17 hereof, in each case including, without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any investigative, administrative or judicial proceeding
(whether or not such indemnified Person is a party thereto), provided, however,
that the Borrower shall not be obligated under this ss.16 to indemnify any
Person for liabilities arising from such Person's own gross negligence or
willful misconduct. In litigation, or the preparation therefor, the Borrower
shall be entitled to select counsel reasonably acceptable to the Required
Lenders, and the Lenders (as approved by the Required Lenders) shall be entitled
to select their own supervisory counsel and, in addition to the foregoing
indemnity, the Borrower agrees to pay promptly the reasonable fees and expenses
of each such counsel if (i) in the written opinion of counsel to the
Administrative Agent, the Syndication Agent, the Arrangers or the Lenders, as
the case may be, use of counsel of the Borrower's choice could reasonably be
expected to give rise to a conflict of interest, (ii) the Borrower shall not
have employed counsel reasonably satisfactory to the Administrative Agent, the
Syndication Agent, the Arrangers or the Lenders, as the case may be, within a
reasonable time after notice of the institution of any such litigation or
proceeding or (iii) the Borrower authorizes the Administrative Agent, the
Syndication Agent, the Arrangers or the Lenders, as the case may be, to employ
separate counsel at the Borrower's expense. If and to the extent that the
obligations of the Borrower under this ss.16 are unenforceable for any reason,
the Borrower hereby agrees to make the maximum contribution to the payment in
satisfaction of such obligations which is permissible under applicable law. The
provisions of this ss.16 shall survive the repayment of the Loans and the
termination of the obligations of the Lenders hereunder and shall continue in
full force and effect as long as the possibility of any such claim, action,
cause of action or suit exists.
ss.17. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein, in the Notes, in any of the other
Loan Documents shall be deemed to have been relied upon by the Lenders, the
Administrative Agent and the Syndication Agent, notwithstanding any
investigation heretofore or hereafter made by any of them, and shall survive the
making by the Lenders of any of the Loans and the issuance, extension or renewal
of any Letters of Credit, as herein contemplated, and shall continue in full
force and effect so long as any Letter of Credit or any amount due under this
Agreement or the Notes or any of the other Loan Documents remains outstanding or
any Lender has any obligation to make any Loans or the Administrative Agent or
any Fronting Bank has any obligation to issue, extend or renew any Letter of
Credit. The indemnification obligations of
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the Borrower provided herein and in the other Loan Documents shall survive the
full repayment of amounts due and the termination of the obligations of the
Lenders hereunder and thereunder to the extent provided herein and therein. All
statements contained in any certificate delivered to any Lender or the
Administrative Agent or the Syndication Agent at any time by or on behalf of the
Borrower or any of its Subsidiaries or any Guarantor pursuant hereto or in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Borrower or such Subsidiary or such
Guarantor hereunder.
ss.18. ASSIGNMENT; PARTICIPATIONS; ETC.
ss.18.1. Conditions to Assignment by Lenders. Except as provided herein,
each Lender may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment Percentage and Commitment and the same portion of the
Loans at the time owing to it, the Notes held by it, the Competitive Bid Loan
Accounts maintained by it and its participating interest in the risk relating to
any Letters of Credit); provided that (a) the Administrative Agent and, unless
an Event of Default shall have occurred and be continuing, the Borrower each
shall have the right to approve any Eligible Assignee, which approval shall not
be unreasonably withheld or delayed, (b) each such assignment shall be of a
constant, and not a varying, percentage of all the assigning Lender's rights and
obligations under this Agreement as to such interests, rights and obligations
under this Agreement so assigned, (c) each such assignment shall be in a minimum
amount of $15,000,000 or an integral multiple of $1,000,000 in excess thereof,
(d) unless the assigning Lender shall have assigned its entire Commitment, each
Lender shall have at all times an amount of its Commitment of not less than
$15,000,000 and (e) the parties to such assignment shall execute and deliver to
the Administrative Agent, for recording in the Register (as hereinafter
defined), an assignment and assumption, substantially in the form of Exhibit F
hereto (an "Assignment and Assumption"), together with any Notes subject to such
assignment. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Assumption, which
effective date shall be at least five (5) Business Days after the execution
thereof, (i) the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Assumption, have the rights and obligations of a
Lender hereunder and thereunder, and (ii) the assigning Lender shall, to the
extent provided in such assignment and upon payment to the Administrative Agent
of the registration fee referred to in ss.18.3, be released from its obligations
under this Agreement.
ss.18.2. Certain Representations and Warranties; Limitations; Covenants.
By executing and delivering an Assignment and Assumption, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows: (a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the assigning Lender makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the execution,
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legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto; (b) the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or any of its Subsidiaries or any Guarantor or any other Person
primarily or secondarily liable in respect of any of the Obligations, or the
performance or observance by the Borrower or any of its Subsidiaries or any
Guarantor or any other Person primarily or secondarily liable in respect of any
of the Obligations of any of their obligations under this Agreement or any of
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; (c) such assignee confirms that it has received a copy of
this Agreement, together with copies of the most recent financial statements
referred to in ss.6.4 and ss.7.4 and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Assumption; (d) such assignee will, independently and
without reliance upon the assigning Lender, the Administrative Agent or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (e) such assignee represents and
warrants that it is an Eligible Assignee; (f) such assignee appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement and the other Loan Documents as
are delegated to the Administrative Agent by the terms hereof or thereof,
together with such powers as are reasonably incidental thereto; (g) such
assignee agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be performed by
it as a Lender; (h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Assumption; and (i) such assignee
acknowledges that it has made arrangements with the assigning Lender
satisfactory to such assignee with respect to its pro rata share of Letter of
Credit Fees in respect of outstanding Letters of Credit.
ss.18.3. Register. The Administrative Agent shall maintain a copy of each
Assignment and Assumption delivered to it and a register or similar list (the
"Register") for the recordation of the names and addresses of the Lenders and
the Commitment Percentages of, and principal amount of the Loans owing to, the
Lenders from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower and the Lenders at any reasonable time
and from time to time upon reasonable prior notice. Upon each such recordation
other than assignments pursuant to ss.4.12, the assigning Lender agrees to pay
to the Administrative Agent a registration fee in the sum of $2,500.
ss.18.4. New Revolving Credit Notes. Upon its receipt of an Assignment and
Assumption executed by the parties to such assignment, together with each Note
subject to such assignment, the Administrative Agent shall (a) record the
information contained therein in the Register, and (b) give prompt written
notice thereof to the Borrower and the Lenders (other
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than the assigning Lender). Within five (5) Business Days after receipt of such
notice, the Borrower, at its own expense, (i) shall execute and deliver to the
Administrative Agent, in exchange for each surrendered Note, a new Note to the
order of such Eligible Assignee in an amount equal to the amount assumed by such
Eligible Assignee pursuant to such Assignment and Assumption and, if the
assigning Lender has retained some portion of its obligations hereunder, a new
Note to the order of the assigning Lender in an amount equal to the amount
retained by it hereunder and (ii) shall deliver an opinion from counsel to the
Borrower in substantially the form delivered on the Closing Date pursuant to
ss.10.8 as to such new Notes. Such new Notes shall provide that they are
replacements for the surrendered Notes, shall be in an aggregate principal
amount equal to the aggregate principal amount of the surrendered Notes, shall
be dated the effective date of such Assignment and Assumption and shall
otherwise be in substantially the form of the assigned Notes. The surrendered
Notes shall be canceled and returned to the Borrower.
ss.18.5. Participations. Each Lender may sell participations to one or
more banks or other entities in all or a portion of such Lender's rights and
obligations under this Agreement and the other Loan Documents; provided that (a)
each such participation shall be in an amount of not less than $15,000,000, (b)
any such sale or participation shall not affect the rights and duties of the
selling Lender hereunder to the Borrower and the Administrative Agent and the
Lender shall continue to exercise all approvals, disapprovals and other
functions of a Lender, (c) the only rights granted to the participant pursuant
to such participation arrangements with respect to waivers, amendments or
modifications of, or approvals under, the Loan Documents shall be the rights to
approve waivers, amendments or modifications that would reduce the principal of
or the interest rate on any Loans, extend the term (other than any extension
contemplated by the definition of "Maturity Date") or increase the amount of the
Commitment of such Lender as it relates to such participant, reduce the amount
of any fees to which such participant is entitled or extend any regularly
scheduled payment date for principal or interest, and (d) no participant shall
have the right to grant further participations or assign its rights, obligations
or interests under such participation to other Persons without the prior written
consent of the Administrative Agent.
ss.18.6. Pledge by Lender. Notwithstanding any other provision of this
Agreement, any Lender at no cost to the Borrower may at any time pledge all or
any portion of its interest and rights under this Agreement (including all or
any portion of its Notes) to any of the twelve Federal Reserve Banks organized
under ss.4 of the Federal Reserve Act, 12 U.S.C. ss.341. No such pledge or the
enforcement thereof shall release the pledgor Lender from its obligations
hereunder or under any of the other Loan Documents.
ss.18.7. No Assignment by Borrower. The Borrower shall not assign or
transfer any of its rights or obligations under any of the Loan Documents
without prior Unanimous Lender Approval.
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ss.18.8. Disclosure. The Borrower agrees that, in addition to disclosures
made in accordance with standard banking practices, any Lender may disclose
information obtained by such Lender pursuant to this Agreement to assignees or
participants and potential assignees or participants hereunder. Any such
disclosed information shall be treated by any assignee or participant with the
same standard of confidentiality set forth in ss.7.10 hereof.
ss.18.9. Syndication. The Borrower acknowledges that the Administrative
Agent and the Syndication Agent intend, and shall have the right, by themselves
or through their Affiliates, to syndicate or enter into co-lending arrangements
with respect to the Loans and the Total Commitment pursuant to this ss.18, and
the Borrower agrees to reasonably cooperate with the Administrative Agent's, the
Syndication Agent's and their Affiliates' syndication and/or co-lending efforts,
such cooperation to include, without limitation, the provision of information
reasonably requested by potential syndicate members.
ss.19. NOTICES, ETC. Except as otherwise expressly provided in this
Agreement, all notices and other communications made or required to be given
pursuant to this Agreement or the Notes or any Letter of Credit Applications
shall be in writing and shall be delivered in hand, or mailed by United States
registered or certified first class mail, return receipt requested, postage
prepaid; or sent by overnight courier; or sent by facsimile and confirmed by
delivery via overnight courier or postal service; addressed as follows:
(a) if to the Borrower or any Guarantor, to the Borrower at
Mack-Cali Realty Corporation, 11 Commerce Drive, Cranford, New Jersey 07016,
Attention: Mr. Roger W. Thomas, Executive Vice President and General Counsel and
Mr. Barry Lefkowitz, Executive Vice President and Chief Financial Officer, with
a copy to Andrew S. Levine, Esq., Pryor, Cashman, Sherman & Flynn, 410 Park
Avenue, New York, New York 10222, or to such other address for notice as the
Borrower or any Guarantor shall have last furnished in writing to the
Administrative Agent;
(b) if to the Administrative Agent, at The Chase Manhattan Bank, 270
Park Avenue, New York, New York 10017, Attention: Marc E. Costantino, Vice
President, or such other address for notice as the Administrative Agent shall
have last furnished in writing to the Borrower, with a copy to Paul M. Vaughn,
Esq., Bingham Dana LLP, 150 Federal Street, Boston, Massachusetts 02110, or at
such other address for notice as the Administrative Agent shall last have
furnished in writing to the Person giving the notice; and
(c) if to any Lender, at the address set forth on Schedule 1.2
hereto, or such other address for notice as such Lender shall have last
furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile to the party to which it is directed, at the time of the receipt
thereof by such party or the sending of such
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facsimile and (ii) if sent by registered or certified first-class mail, postage
prepaid, return receipt requested on the fifth Business Day following the
mailing thereof.
ss.20. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE. THIS AGREEMENT
AND EACH OF THE OTHER LOAN DOCUMENTS, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, ARE CONTRACTS UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL FOR ALL
PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH
OF THE BORROWER AND THE GUARANTORS AND THE ADMINISTRATIVE AGENT AND THE LENDERS
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN
NEW YORK, NEW YORK OR ANY FEDERAL COURT SITTING IN NEW YORK, NEW YORK AND
CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS AND THE SERVICE OF
PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER OR THE GUARANTORS OR THE
ADMINISTRATIVE AGENT OR THE LENDERS BY MAIL AT THE ADDRESS SPECIFIED INss.19.
EACH OF THE BORROWER AND THE GUARANTORS AND THE ADMINISTRATIVE AGENT AND THE
LENDERS HEREBY WAIVES ANY OBJECTION THAT EITHER OF THEM MAY NOW OR HEREAFTER
HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS
BROUGHT IN AN INCONVENIENT COURT.
ss.21. HEADINGS. The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.
ss.22. COUNTERPARTS. This Agreement and any amendment hereof may be
executed in several counterparts and by each party on a separate counterpart,
each of which when so executed and delivered shall be an original, and all of
which together shall constitute one instrument. In proving this Agreement it
shall not be necessary to produce or account for more than one such counterpart
signed by the party against whom enforcement is sought.
ss.23. ENTIRE AGREEMENT, ETC. The Loan Documents and any other documents
executed in connection herewith or therewith express the entire understanding of
the parties with respect to the transactions contemplated hereby. Neither this
Agreement nor any term hereof may be changed, waived, discharged or terminated,
except as provided in ss.25.
ss.24. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS. EXCEPT TO THE
EXTENT EXPRESSLY PROHIBITED BY LAW, EACH OF THE BORROWER AND THE GUARANTORS AND
THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY WAIVES ITS RESPECTIVE RIGHTS TO
A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, THE REVOLVING CREDIT NOTES OR ANY OF THE OTHER
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LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT TO THE EXTENT EXPRESSLY
PROHIBITED BY LAW, THE BORROWER AND EACH OF THE GUARANTORS HEREBY WAIVES ANY
RIGHT ANY OF THEM MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN
THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES
OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH OF THE
BORROWER AND THE GUARANTORS (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY LENDER OR THE ADMINISTRATIVE AGENT HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH LENDER OR THE ADMINISTRATIVE AGENT WOULD NOT, IN THE EVENT
OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGE THAT
THE ADMINISTRATIVE AGENT AND THE LENDERS HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES BY, AMONG OTHER
THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
ss.25. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as otherwise expressly
provided in this Agreement, any acceptance, consent, approval or other
authorization required or permitted by this Agreement may be given, and any term
of this Agreement or of any of the other Loan Documents may be amended, and the
performance or observance by the Borrower or any Guarantor of any terms of this
Agreement or the other Loan Documents or the continuance of any default, Default
or Event of Default may be waived (either generally or in a particular instance
and either retroactively or prospectively) with, but only with, the written
consent of the Required Lenders.
Notwithstanding the foregoing, Unanimous Lender Approval shall be required
for any amendment, modification or waiver of this Agreement that:
(i) reduces or forgives any principal of any unpaid Loan or
any interest thereon (including any interest "breakage" costs) or
any fees due any Lender hereunder, or permits any prepayment not
otherwise permitted hereunder; or
(ii) changes the unpaid principal amount of, or the rate of
interest on, any Loan; or
(iii) changes the date fixed for any payment of principal of
or interest on any Loan (including, without limitation, any
extension of the Maturity Date) or any fees payable hereunder; or
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(iv) changes the amount of any Lender's Commitment (other than
pursuant to an assignment permitted under ss.18.1 hereof) or
increases the amount of the Total Commitment, except as provided in
ss.2.2; or
(v) amends any of the covenants contained inss.ss.9.1, 9.3,
9.4, 9.6 or 9.7 hereof; or
(vi) releases or reduces the liability of any Guarantor
pursuant to its Guaranty other than as provided in ss.5; or
(vii) modifies this ss.25 or any other provision herein or in
any other Loan Document which by the terms thereof expressly
requires Unanimous Lender Approval; or
(viii) amends any of the provisions governing funding
contained in ss.2 hereof; or
(ix) changes the rights, duties or obligations of the
Administrative Agent specified in ss.14 hereof (provided that no
amendment or modification to such ss.14 or to the fee payable to the
Arrangers or the Administrative Agent under this Agreement may be
made without the prior written consent of the Arrangers or the
Administrative Agent affected thereby); or
(x) changes the definitions of Required Lenders, Majority
Lenders or Unanimous Lender Approval.
No waiver shall extend to or affect any obligation not expressly waived or
impair any right consequent thereon. No course of dealing or delay or omission
on the part of the Administrative Agent or the Lenders or any Lender in
exercising any right shall operate as a waiver thereof or otherwise be
prejudicial to such right or any other rights of the Administrative Agent or the
Lenders. No notice to or demand upon the Borrower shall entitle the Borrower to
other or further notice or demand in similar or other circumstances.
ss.26. SEVERABILITY. The provisions of this Agreement are severable, and if any
one clause or provision hereof shall be held invalid or unenforceable in whole
or in part in any jurisdiction, then such invalidity or unenforceability shall
affect only such clause or provision, or part thereof, in such jurisdiction, and
shall not in any manner affect such clause or provision in any other
jurisdiction, or any other clause or provision of this Agreement in any
jurisdiction.
477
<PAGE>
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as a
sealed instrument as of the date first set forth above.
MACK-CALI REALTY, L.P.
By: Mack-Cali Realty Corporation, its general
partner
By:
------------------------------------------
Name: Barry Lefkowitz
Title: Executive Vice President and Chief
Financial Officer
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<PAGE>
THE CHASE MANHATTAN BANK, individually and as
Administrative Agent
By:
------------------------------------------
Name: Marc E. Costantino
Title: Vice President
479
<PAGE>
FLEET NATIONAL BANK, individually and as
Syndication Agent
By:
------------------------------------------
Name: Mark E. Dalton
Title: Senior Vice President
480
<PAGE>
BANKERS TRUST
By:
------------------------------------------
Name:
Title:
481
<PAGE>
BANK OF MONTREAL
By:
------------------------------------------
Name:
Title:
482
<PAGE>
BANK OF NEW YORK
By:
------------------------------------------
Name:
Title:
483
<PAGE>
BAYERISCHE LANDESBANK GIROZANTRALE
By:
------------------------------------------
Name:
Title:
By:
------------------------------------------
Name:
Title:
484
<PAGE>
CITIZENS BANK
By:
------------------------------------------
Name:
Title:
485
<PAGE>
COMERICA BANK
By:
------------------------------------------
Name:
Title:
486
<PAGE>
COMMERZBANK AKTIENGESELLSCHAFT, NEW
YORK BRANCH
By:
------------------------------------------
Name:
Title:
By:
------------------------------------------
Name:
Title:
487
<PAGE>
CREDITANSTALT CORPORATE FINANCE, INC.
By:
------------------------------------------
Name:
Title:
By:
------------------------------------------
Name:
Title:
488
<PAGE>
CRESTAR BANK
By:
------------------------------------------
Name:
Title:
489
<PAGE>
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK,
NEW YORK BRANCH
By:
------------------------------------------
Name:
Title:
490
<PAGE>
DRESDNER BANK AG, NEW YORK BRANCH AND
GRAND CAYMAN BRANCH
By:
------------------------------------------
Name:
Title:
By:
------------------------------------------
Name:
Title:
491
<PAGE>
EUROPEAN AMERICAN BANK
By:
------------------------------------------
Name:
Title:
492
<PAGE>
ERSTE BANK
By:
------------------------------------------
Name:
Title:
493
<PAGE>
FIRST NATIONAL BANK OF CHICAGO
By:
------------------------------------------
Name:
Title:
494
<PAGE>
FIRST UNION NATIONAL BANK
By:
------------------------------------------
Name:
Title:
495
<PAGE>
HYPOBANK
By:
------------------------------------------
Name:
Title:
496
<PAGE>
KEY BANK
By:
------------------------------------------
Name:
Title:
497
<PAGE>
KREDIETBANK, N.V.
By:
------------------------------------------
Name:
Title:
498
<PAGE>
MELLON BANK, N.A.
By:
------------------------------------------
Name:
Title:
499
<PAGE>
NATIONSBANK
By:
------------------------------------------
Name:
Title:
500
<PAGE>
PNC BANK, NATIONAL ASSOCIATION
By:
------------------------------------------
Name:
Title:
501
<PAGE>
SOCIETE GENERALE
By:
------------------------------------------
Name:
Title:
502
<PAGE>
SUMMIT BANK
By:
------------------------------------------
Name:
Title:
503
<PAGE>
THE TOKAI BANK LIMITED
By:
------------------------------------------
Name:
Title:
504
<PAGE>
US TRUST
By:
------------------------------------------
Name:
Title:
505
MACK-CALI REALTY CORPORATION
UNDERWRITING AGREEMENT
April 23, 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 Underwriter, all
references herein to the Representatives and the Underwriters shall be deemed to
be to the Underwriter.
The Underwriter intends to deposit the Shares with the trustee of the
Equity Investor Fund Cohen & Steers Realty Majors Portfolio (A Unit Investment
Trust) (the "Trust"), a registered unit investment trust under the Investment
Company Act of 1940, as amended, for which Merrill Lynch, Pierce, Fenner & Smith
Incorporated acts as sponsor and depositor, in exchange for units in the Trust.
3. 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 "Securities").
4. Representations and Warranties of the Company. The Company and
Mack-Cali Realty L.P., jointly and severally, represent and warrant to, and
agree 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
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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 and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that purpose
have been instituted or are pending or, to the knowledge of the Company, are
contemplated by the Commission, and any request on the part of the Commission
for additional information has been complied with. 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
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<PAGE>
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 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 Closing
Date, 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
508
<PAGE>
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 Closing Date 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
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<PAGE>
Company, and, at the Closing Date 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,
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<PAGE>
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) present fairly and 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
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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) 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
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<PAGE>
entered into any material transaction, which is not in the ordinary course of
business; (2) Except for regular quarterly distribution payments, 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;
(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; and (4) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, 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 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
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<PAGE>
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).
(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
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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, 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
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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.
(ag) 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 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
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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) no tenant under any lease pursuant to which the Company or any of the
Subsidiaries leases the Properties has an option or right of first refusal to
purchase the premises leased thereunder or the building of which such premises
are a part, except as such options or rights of first refusal which, if
exercised, 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 except as provided by law.
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(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.
5. 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
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Securities set forth opposite the name of such Underwriter in Schedule 2 hereto.
One or more certificates in definitive form for the 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 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 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
"Closing Date". The Company will make such certificate or certificates for the
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 Closing Date.
6. 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
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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 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
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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 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) Intentionally omitted.
(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 Closing
Date.
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(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, 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.
7. 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,
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(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.
8. Conditions of the Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the 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 Closing Date, as if made on and as
of the 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
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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
Closing Date, from Pryor Cashman Sherman & Flynn LLP 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
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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) As of April 15, 1998, the Company had an authorized
capitalization consisting of (A) 5,000,000 preferred shares of beneficial
interest, of which 0 shares were issued and outstanding, and (B)
190,000,000 Common Shares, of which 55,930,295 shares were issued and
outstanding (excluding 18,173,403 Common Shares reserved for issuance (x)
upon the exercise of outstanding options and (y) upon the conversion of
13,433,572 outstanding units in the Operating Partnership. 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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(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
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<PAGE>
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 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
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<PAGE>
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 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
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<PAGE>
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
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<PAGE>
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,
532
<PAGE>
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
533
<PAGE>
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
534
<PAGE>
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 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
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.
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<PAGE>
(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 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
536
<PAGE>
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 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
537
<PAGE>
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
538
<PAGE>
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
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
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 Closing Date;
the Registration Statement, as amended as of the 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
539
<PAGE>
the 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 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
540
<PAGE>
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 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) Intentionally omitted.
(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.
(i) No stop order suspending the effectiveness of the Equity
Investor Fund Cohen & Steers Realty Majors Portfolio Unit Investment Trust
registration statement (the file number of which is set forth in Schedule 1
hereto) (the "UIT Registration Statement") or any post-effective amendment
thereto and no order directed at any document incorporated by reference in the
UIT Registration Statement shall have been issued, and no proceedings for that
purpose shall have been instituted or threatened or, to the knowledge of the
Representatives, shall be contemplated by the Commission.
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.
9. 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
541
<PAGE>
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,
542
<PAGE>
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 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 (i) includes
an unconditional release of all of the Underwriters and such controlling
persons from all liability arising out of such claim, action, suit,
investigation, or proceeding and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf
of any indemnified party.
(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
543
<PAGE>
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 (a) of this Section 7, representing the indemnified parties under such
paragraph (a) who are parties to such
544
<PAGE>
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
545
<PAGE>
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, 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.
(e) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 7(a) herein effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 7(e)
effected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent it considers
such request to be reasonable and (ii) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable in each case
prior to the date of such settlement.
10. Default of Underwriters. Intentionally omitted
11. 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
546
<PAGE>
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.
12. Termination. (a) This Agreement may be terminated with respect to the
Securities in the sole discretion of the Representatives by notice to the
Company given prior to the Closing Date 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 Closing Date
(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;
547
<PAGE>
(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 (x) commence or continue with the offering of the units of the Trust to
the Public, or (y) enforce Contracts for the sale of the Units of the
Trust.
(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.
13. Information Supplied by Underwriters. The statements set forth in the
last paragraph on the front cover page of the
548
<PAGE>
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.
14. 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 Merrill Lynch & Co. at North
Tower, World Financial Center, New York, New York 10281-1201, Attention: Richard
Saltzman; 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.
15. 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.
16. 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.
549
<PAGE>
17. 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.
550
<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: /s/ Roger W. Thomas
---------------------------------
Name: Roger W. Thomas
Title: Executive Vice President & General
Counsel
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
By: /s/ John C. Brady
------------------------------
Authorized Signatory
551
<PAGE>
SCHEDULE 1
DESCRIPTION OF SECURITIES; TERMS OF OFFERING
1. Registration Statement:
File No. 333-19101
2. Date of Underwriting Agreement:
April 23, 1998
3. Underwriters:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
4. Title of Securities:
Common Stock, par value $.01 per share
5. Aggregate Number of Securities:
Common Stock, par value $.01 per share: 994,228 shares
6. Price to Public:
Common Stock, par value $.01 per share: $36.8125 per share
7. Purchase Price by Underwriters:
Common Stock, par value $.01 per share: $34.8798 per share
8. Specified Funds for Payment of Purchase Price:
Wire Transfer of Same Day Funds
9. Terms of Securities:
Preferred Stock: N/A
Warrants: N/A
1
<PAGE>
Other Provisions: N/A
10. Lock-up Requirements:
None
11. Delivery of Securities:
Merrill Lynch, Pierce, Fenner & Smith Incorporated, North Tower, World
Financial Center, New York, New York on or about April 29, 1998
12. Pre-Closing Location:
Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third Avenue, New York, New
York on April 28, 1998
13. Closing Location:
Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third Avenue, New York, New
York on April 29, 1998
15. Stock Exchange Listing
The Securities shall be approved for listing on the New York Stock
Exchange, subject to official notice of issuance, at or prior to the date
hereof.
16. UIT Registration Statement
File No. 333-45433
17. Miscellaneous:
The Company is advised by you that the Underwriter proposes to deposit the
Shares with the trustee of the Trust, a registered unit investment trust under
the Investment Company Act of 1940, as amended, for which Merrill Lynch, Pierce,
Fenner & Smith Incorporated acts as sponsor and depositor, in exchange for units
in the Trust as soon after the execution and delivery hereof as in the judgment
of the Underwriter is advisable.
2
<PAGE>
SCHEDULE 2
UNDERWRITERS
Number of
Shares to
Underwriter be Purchased
- ----------- ------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 994,228
-------
Total 994,228
=======
3
<PAGE>
4
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 18,508
<SECURITIES> 0
<RECEIVABLES> 4,319
<ALLOWANCES> 493
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 3,083,951
<DEPRECIATION> 118,567
<TOTAL-ASSETS> 3,085,315
<CURRENT-LIABILITIES> 0
<BONDS> 1,207,592
0
0
<COMMON> 558
<OTHER-SE> 1,374,100
<TOTAL-LIABILITY-AND-EQUITY> 3,085,315
<SALES> 0
<TOTAL-REVENUES> 105,823
<CGS> 0
<TOTAL-COSTS> 47,298
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,480
<INCOME-PRETAX> 33,849
<INCOME-TAX> 0
<INCOME-CONTINUING> 26,543
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 26,543
<EPS-PRIMARY> 0.52
<EPS-DILUTED> 0.51
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