Exhibit 10.8

 

AGREEMENT OF SALE AND PURCHASE

 

THIS AGREEMENT OF SALE AND PURCHASE (“Agreement”) made this 24th day of
February, 2014 by and between Knightsbridge Realty L.L.C., a New Jersey limited
liability company, having an address c/o Mack-Cali Realty Corporation, 343
Thornall Street, Edison; New Jersey 08837-2206 (“Seller”) and H’Y2
Knightsbridge, LLC, a Delaware limited liability company, having an address at
c/o Keystone Property Group, One Presidential Boulevard, Suite 300, Bala Cynwyd,
Pennsylvania 19004 (“Purchaser”).

 

In consideration of the mutual promises, covenants, and agreements set forth
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Seller and Purchaser agree as follows:

 

ARTICLE I
DEFINITIONS

 

Section 1.1                                    Definitions.  For purposes of
this Agreement, the following capitalized terms have the meanings set forth in
this Section 1.1:

 

“Assignment” has the meaning ascribed to such term in Section 10.3(d) and shall
be in the form attached hereto as Exhibit A.

 

“Assignment of Leases” has the meaning ascribed to such term in
Section 10.3(c) and shall be in the form attached hereto as Exhibit B.

 

“Authorities” means the various federal, state and local governmental and
quasigovernmental bodies or agencies having jurisdiction over the Real Property
and Improvements, or any portion thereof.

 

“Bill of Sale” has the meaning ascribed to such term in Section 10.3(b) and
shall be in the form attached hereto as Exhibit C.

 

“Business Day” means any day other than a Saturday, Sunday or a day on which
national banking associations are authorized or required to close.

 

“Certificate as to Foreign Status” has the meaning ascribed to such term in
Section 10.3(g) and shall be in the form attached hereto as Exhibit I.

 

“Certifying Person” has the meaning ascribed to such term in Section 4.3(a).

 

“Closing” means the consummation of the purchase and sale of the Property
contemplated by this Agreement, as provided for in Article X.

 

“Closing Date” means the date on which the Closing of the transaction
contemplated hereby actually occurs.

 

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“Closing Statement” has the meaning ascribed to such term in Section 10.4(b).

 

“Closing Surviving Obligations” means the rights, liabilities and obligations
set forth in Sections 5.3, 5.4, 7.5, 8.1 8.2, 8.3, 10.4, 10.6, 11.1, 11.2, 12.1,
Article XIV, 16.1, 18.2 and 18.9, and any other provisions which pursuant to
their terms survives the Closing hereunder.  If Purchaser or Seller consists of
more than one entity, then the Closing Surviving Obligations of such Purchaser
or Seller set forth in this Agreement shall only apply to such Purchaser or
Seller as to the portion of the Property it sells or purchases.

 

“Code” has the meaning ascribed to such term in Section 4.3.

 

“Confidentiality Agreement” means that certain Confidentiality Agreement dated
December 3, 2013 and amended December 13, 2013, by and between KPG Investments,
LLC and Mack-Cali Realty Corporation.

 

“Deed” has the meaning ascribed to such term in Section 10.3(a).

 

“Delinquent Rental” has the meaning ascribed to such term in Section 10.4(c).

 

“Documents” has the meaning ascribed to such term in Section 5.2(a).

 

“Earnest Money Deposit” has the meaning ascribed to such term in Section 4.2.

 

“Effective Date” means the date of this Agreement first set forth above.

 

“Environmental Laws” means each and every federal, state, county and municipal
statute, ordinance, rule, regulation, code, order, requirement, directive,
binding written interpretation and binding written policy pertaining to
Hazardous Substances issued by any Authorities and in effect as of the date of
this Agreement with respect to or which otherwise pertains to or effects the
Real Property or the Improvements, or any portion thereof, the use, ownership,
occupancy or operation of the Real Property or the Improvements, or any portion
thereof, or Purchaser, and as same have been amended, modified or supplemented
from time to time prior to the Effective Date, including but not limited to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C. § 9601 et seq.), the Hazardous Substances Transportation Act (49 U.S.C. §
1802 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et
seq.), as amended by the Hazardous and Solid Wastes Amendments of 1984, the
Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Safe Drinking Water
Act (42 U.S.C. § 300f et seq.), the Clean Water Act (33 U.S.C. § 1321 et seq.),
the Clean Air Act (42 U.S.C. § 7401 et seq.), the Solid Waste Disposal Act (42
U.S.C. § 6901 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et
seq.), the Emergency Planning and Community Right-to-Know Act of 1986 (42 U.S.C.
§ 11001 et seq.), the Radon Gas and Indoor Air Quality Research Act of 1986 (42
U.S.C. § 7401 et seq.), the National Environmental Policy Act (42 U.S.C. § 4321
et seq.), the Superfund Amendment Reauthorization Act of 1986 (42 U.S.C. § 9601
et seq.), the Occupational Safety and Health Act (29 U.S.C. § 651 et seq.)
(collectively, the “Environmental Statutes”), and any and all rules and
regulations which have become effective prior to the date of this Agreement
under any and all of the Environmental Statutes.

 

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“Escrow Agent” means First American Title Insurance Company, having an address
c/o Executive Realty Transfer, Inc., 1431 Sandy Circle, Narberth, PA 19072.

 

“Existing Survey” means Seller’s existing survey of the Real Property, dated
September 17, 2003, prepared by Casey & Keller Inc., and certified to AT&T,
Chicago Title Insurance Company and Pitney, Hardin, Kipp & Szuch.

 

“Evaluation Period” has the meaning ascribed to such term in Section 5.1.

 

“Governmental Regulations” means all laws, statutes, ordinances, rules and
regulations of the Authorities applicable to Seller or the use or operation of
the Real Property or the Improvements or any portion thereof including but not
limited to the Environmental Laws.

 

“Hazardous Substances” means (a) asbestos, radon gas and urea formaldehyde foam
insulation, (b) any solid, liquid, gaseous or thermal contaminant, including
smoke vapor, soot, fumes, acids, alkalis, chemicals, petroleum products or
byproducts, polychlorinated biphenyls, phosphates, lead or other heavy metals
and chlorine, (c) any solid or liquid waste (including, without limitation,
hazardous waste), hazardous air pollutant, hazardous substance, hazardous
chemical substance and mixture, toxic substance, pollutant, pollution, regulated
substance and contaminant, and (d) any other chemical, material or substance,
the use or presence of which, or exposure to the use or presence of which, is
prohibited, limited or regulated by any Environmental Laws.

 

“Improvements” means all buildings, structures, fixtures, parking areas and
other improvements located on the Real Property.

 

“KPG Purchasers” has the meaning ascribed to such term in Section 2.3.

 

“Lease Schedule” has the meaning ascribed to such term in Section 5.2(a) and is
attached hereto as Exhibit F.

 

“Leases” means all of the leases and other agreements with Tenants with respect
to the use and occupancy of the Real Property, together with all renewals and
modifications thereof, if any, all guaranties thereof, if any, and any new
leases and lease guaranties entered into after the Effective Date.

 

“Licensee Parties” has the meaning ascribed to such term in Section 5.1.

 

“Licenses and Permits” means, collectively, all of Seller’s right, title and
interest, to the extent assignable, in and to licenses, permits, certificates of
occupancy, approvals, dedications, subdivision maps and entitlements now or
hereafter issued, approved or granted by the Authorities in connection with the
Real Property and the Improvements, together with all renewals and modifications
thereof.

 

“Major Tenant” means any Tenant leasing in excess of 10,000 square feet of space
at the Real Property, in the aggregate, as listed on Exhibit J attached hereto.

 

“M-C Sellers” has the meaning ascribed thereto in Section 2.3.

 

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“New Tenant Costs” has the meaning ascribed to such term in Section 10.4(f).

 

“Operating Expenses” has the meaning ascribed to such term in Section 10.4(d).

 

“Other P&S Agreements” has the meaning ascribed thereto in Section 2.3.

 

“Other Properties” has the meaning ascribed thereto in Section 2.3.

 

“Permitted Exceptions” has the meaning ascribed to such term in Section 6.2(a).

 

“Permitted Outside Parties” has the meaning ascribed to such term in
Section 5.2(b).

 

“Personal Property” means all of Seller’s right, title and interest in and to
all equipment, appliances, tools, supplies, machinery, artwork, furnishings and
other tangible personal property attached to, appurtenant to, located in and
used exclusively in connection with the ownership or operation of the
Improvements and situated at the Real Property at the time of Closing, but
specifically excluding all personal property leased by Seller or owned by
tenants or others.

 

“Property” has the meaning ascribed to such term in Section 2.1.

 

“Proration Items” has the meaning ascribed to such term in Section 10.4(a).

 

“Purchase Price” has the meaning ascribed to such term in Section 3.1.

 

“Purchaser’s Affiliates” means any past, present or future: (i) shareholder,
partner, member, manager or owner of Purchaser; (ii) entity that, directly or
indirectly, controls, is controlled by or is under common control with Purchaser
and (iii) the heirs, executors, administrators, personal or legal
representatives, successors and assigns of any or all of the foregoing.

 

“Purchaser’s Information” has the meaning ascribed to such term in
Section 5.3(c).

 

“REA Party” means any entity that is a party to a reciprocal easement agreement,
cost sharing agreement, association agreement, declaration or other similar
agreement affecting the Property.

 

“Real Property” means that certain parcel of land located at 30 Knightsbridge
Road, Township of Piscataway, New Jersey, as is more particularly described on
the legal description attached hereto as Exhibit D, together with all of
Seller’s right, title and interest, if any, in and to the appurtenances
pertaining thereto, including but not limited to Seller’s right, title and
interest in and to the adjacent streets, alleys and right-of-ways, and any
easement rights, air rights, subsurface development rights and water rights.

 

“Rental” has the meaning ascribed to such term in Section 10.4(c).

 

“Scheduled Closing Date” means thirty (30) days after the expiration of the
Evaluation Period, subject to Seller’s and Purchaser’s right to adjourn the
Scheduled Closing Date for up to

 

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ten (10) days in accordance with the terms and conditions set forth in
Section 10.1 below, or such earlier or later date to which Purchaser and Seller
may hereafter agree in writing.

 

“Security Deposits” means all Tenant security deposits in the form of cash and
letters of credit, if any, held by Seller, as landlord (together with any
interest which has accrued thereon, but only to the extent such interest has
accrued for the account of the Tenant).

 

“Service Contracts” means all of Seller’s right, title and interest, to the
extent assignable, in all service agreements, maintenance contracts, equipment
leasing agreements, warranties, guarantees, bonds, open purchase orders and
other contracts for the provision of labor, services, materials or supplies
relating solely to the Real Property, Improvements or Personal Property and
under which Seller is currently paying for services rendered in connection with
the Property, as listed and described on Exhibit E  attached hereto, together
with all renewals, supplements, amendments and modifications thereof, and any
new such agreements entered into after the Effective Date, to the extent
permitted by Section 7.1.

 

“Seller’s Affiliates” means any past, present or future: (i) shareholder,
partner, member, manager or owner of Seller; (ii) entity in which Seller or any
past, present or future shareholder, partner, member, manager or owner of Seller
has or had an interest; (iii) entity that, directly or indirectly, controls, is
controlled by or is under common control with Seller and (iv) the heirs,
executors, administrators, personal or legal representatives, successors and
assigns of any or all of the foregoing.

 

“Significant Portion” means, for purposes of the casualty provisions set forth
in Article XI hereof, damage by fire or other casualty to the Real Property and
the Improvements or a portion thereof, the cost of which to repair would exceed
ten percent (10%) of the Purchase Price.

 

“SNDA” has the meaning ascribed to such term in Section 7.3.

 

“Survey Objection” has the meaning ascribed to such term in Section 6.1.

 

“Tenants” means the tenants or users of the Real Property and Improvements who
are parties to the Leases.

 

“Tenant Notice Letters” has the meaning ascribed to such term in
Section 10.2(e), and are to be delivered by Purchaser to Tenants pursuant to
Section 10.6.

 

“Termination Surviving Obligations” means the rights, liabilities and
obligations set forth in Sections 5.2, 5.3, 5.4, 12.1, Articles XIII and XIV,
16.1, 18.2 and 18.8, and any other provisions which pursuant to their terms
survive any termination of this Agreement.

 

“Title Commitment” has the meaning ascribed to such term in Section 6.2(a).

 

“Title Company” means First American Title Insurance Company, through its agent,
Executive Realty Transfer, Inc.

 

“Title Objections” has the meaning ascribed to such term in Section 6.2(a).

 

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“To Seller’s Knowledge” or “Seller’s Knowledge” means the present actual (as
opposed to constructive or imputed) knowledge solely of Diane Chayes, Senior
Vice President, Leasing, and Anthony DeCaro, First Vice President and regional
property manager for this Property, without any independent investigation or
inquiry whatsoever.

 

“Updated Survey” has the meaning ascribed to such term in Section 6.1.

 

Section 1.2                                    References; Exhibits and
Schedules.  Except as otherwise specifically indicated, all references in this
Agreement to Articles or Sections refer to Articles or Sections of this
Agreement, and all references to Exhibits or Schedules refer to Exhibits or
Schedules attached hereto, all of which Exhibits and Schedules are incorporated
into, and made a part of, this Agreement by reference. The words “herein,”
“hereof,” “hereinafter” and words and phrases of similar import refer to this
Agreement as a whole and not to any particular Section or Article.

 

ARTICLE II
AGREEMENT OF PURCHASE AND SALE

 

Section 2.1                                    Agreement.  Seller hereby agrees
to sell, convey and assign to Purchaser, and Purchaser hereby agrees to purchase
and accept from Seller, on the Closing Date and subject to the terms and
conditions of this Agreement, all of the following (collectively, the
“Property”):

 

(a)                                 the Real Property;

 

(b)                                 the Improvements;

 

(c)                                  the Personal Property;

 

(d)                                 all of Seller’s right, title and interest as
lessor in and to the Leases and, subject to the terms of the respective
applicable Leases, the Security Deposits;

 

(e)                                  to the extent assignable, the Service
Contracts and the Licenses and Permits; and

 

(f)                                   all of Seller’s right, title and interest,
to the extent assignable or transferable, in and to all other intangible rights,
titles, interests, privileges and appurtenances owned by Seller and related to
or used exclusively in connection with the ownership, use or operation of the
Real Property or the Improvements.

 

Section 2.2                                    Conversion.  Seller and Purchaser
recognize that they may each benefit from converting this Agreement into an
agreement of sale of the partnership or membership interests in the Seller. 
During the Evaluation Period, Seller and Purchaser shall analyze whether such
conversion is feasible and benefits both parties and, if both parties agree,
Seller and Purchaser shall terminate this Agreement as to the Property and enter
into an agreement of sale of partnership or membership interests of Seller with
respect to the Property.

 

Section 2.3                                    Other P&S Agreements.  Certain
affiliates of Seller listed on Schedule 2.3 (collectively, the “M-C Sellers”),
and certain affiliates of Purchaser listed on Schedule 2.3

 

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(collectively, the “KPG Purchasers”) have entered into various agreements of
sale and purchase, dated of even date herewith (the “Other P&S Agreements”),
with respect to the sale and purchase of certain land and the improvements
thereon listed on Schedule 2.3 (the “Other Properties”), which land and
improvements are more fully described in the applicable Other P&S Agreements. 
Notwithstanding anything to the contrary set forth in this Agreement, and except
in the event of a ROFO Election (as defined in Section 7.4), Purchaser has no
right or obligation to purchase, and Seller has no obligation to sell, the
Property unless there is a simultaneous sale and purchase of each and all of the
Other Properties pursuant to the Other P&S Agreements, it being the express
agreement and understanding of Purchaser and Seller that, as a material
inducement to Seller and Purchaser to enter into this Agreement, the M-C Sellers
and the KPG Purchasers have entered into the Other P&S Agreements pursuant to
which the KPG Purchasers have agreed to purchase, and the M-C Sellers have
agreed to sell, the Other Properties, subject to and in accordance with the
terms and conditions of the Other P&S Agreements.  Any termination of any Other
P&S Agreement, unless due to a ROFO Election, shall constitute a termination of
this Agreement.  Any breach of, or default under, any Other P&S Agreement shall
constitute a breach of, or default under, this Agreement.  Notwithstanding the
foregoing, if any Other P&S Agreement is terminated as a result of a ROFO
Election, then this Agreement shall continue to remain in full force and effect.

 

ARTICLE III
CONSIDERATION

 

Section 3.1                                    Purchase Price.  The purchase
price for the Property (the “Purchase Price”) shall be Fifty Five Million Four
Hundred Five Thousand Two Hundred Eighty Dollars and NO/100 Cents
($55,405,280.00) in lawful currency of the United States of America.  No portion
of the Purchase Price shall be allocated to the Personal Property.

 

Section 3.2                                    Method of Payment of Purchase
Price.  No later than 3:00 p.m. Eastern Time on the Closing Date, subject to the
adjustments set forth in Section 10.4, Purchaser shall pay the Purchase Price
(less the Earnest Money Deposit), together with all other costs and amounts to
be paid by Purchaser at the Closing pursuant to the terms of this Agreement
(“Purchaser’s Costs”), by Federal Reserve wire transfer of immediately available
funds to the account of Escrow Agent. Escrow Agent, following authorization by
the parties prior to 4:00 p.m. Eastern Time on the Closing Date, shall (i) pay
to Seller by Federal Reserve wire transfer of immediately available funds to an
account designated by Seller, the Purchase Price less any costs or other amounts
to be paid by Seller at Closing pursuant to the terms of this Agreement,
(ii) pay to the appropriate payees out of the proceeds of Closing payable to
Seller all costs and amounts to be paid by Seller at Closing pursuant to the
terms of this Agreement, and (iii) pay Purchaser’s Costs to the appropriate
payees at Closing pursuant to the terms of this Agreement.

 

ARTICLE IV
EARNEST MONEY DEPOSIT
AND ESCROW INSTRUCTIONS

 

Section 4.1                                    The Initial Earnest Money
Deposit. Within two (2) Business Days after the Effective Date, Purchaser shall
deposit with the Escrow Agent, by Federal Reserve wire transfer of immediately
available funds, the sum of Four Hundred Eighty Thousand Two

 

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Hundred Dollars and no/100 Cents ($480,200.00) as the initial earnest money
deposit on account of the Purchase Price (the “Initial Earnest Money Deposit”).
TIME IS OF THE ESSENCE with respect to the deposit of the Initial Earnest Money
Deposit.

 

Section 4.2                                    Escrow Instructions and
Additional Deposit. The Initial Earnest Money Deposit, the Additional Deposit
(as defined below in this Section 4.2), and the Evaluation Period Extension
Deposit (as hereinafter defined in Section 5.1(b)) shall be held in escrow by
the Escrow Agent in an interest-bearing account, in accordance with the
provisions of Article XVII. (The Initial Earnest Money Deposit, Additional
Deposit and Evaluation Period Extension Deposit are hereinafter collectively and
individually referred to as the “Earnest Money Deposit”.) In the event this
Agreement is not terminated by Purchaser pursuant to the terms hereof by the end
of the Evaluation Period in accordance with the provisions of
Section 5.3(c) herein, then, (i) prior to the expiration of the Evaluation
Period, Purchaser shall deposit with the Escrow Agent, by Federal Reserve wire
transfer of immediately available funds, the additional sum of One Million
Nine-Hundred Twenty Thousand Eight Hundred Dollars and no/100 Cents
($1,920,800.00) as an additional earnest money deposit on account of the
Purchase Price (the “Additional Deposit”), and (ii) the Earnest Money Deposit
and the interest earned thereon shall become non-refundable to Purchaser except
in accordance with Sections 6.3, 9.1, 11.1, 11.2 and 13.1 below. TIME IS OF THE
ESSENCE with respect to the payment of the Additional Deposit. In the event this
Agreement is terminated by Purchaser prior to the expiration of the Evaluation
Period, then the Initial Earnest Money Deposit, together with all interest
earned thereon, shall be refunded to Purchaser.

 

Section 4.3                                    Designation of Certifying Person.
In order to assure compliance with the requirements of Section 6045 of the
Internal Revenue Code of 1986, as amended (the “Code”), and any related
reporting requirements of the Code, the parties hereto agree as follows:

 

(a)                                 Provided the Escrow Agent shall execute a
statement in writing (in form and substance reasonably acceptable to the parties
hereunder) pursuant to which it agrees to assume all responsibilities for
information reporting required under Section 6045(e) of the Code, Seller and
Purchaser shall designate the Escrow Agent as the person to be responsible for
all information reporting under Section 6045(e) of the Code (the “Certifying
Person”). If the Escrow Agent refuses to execute a statement pursuant to which
it agrees to be the Certifying Person, Seller and Purchaser shall agree to
appoint another third party as the Certifying Person.

 

(b)                                 Seller and Purchaser each hereby agree:

 

(i)                                     to provide to the Certifying Person all
information and certifications regarding such party, as reasonably requested by
the Certifying Person or otherwise required to be provided by a party to the
transaction described herein under Section 6045 of the Code; and

 

(ii)                                  to provide to the Certifying Person such
party’s taxpayer identification number and a statement (on Internal Revenue
Service Form W-9 or an acceptable substitute form, or on any other form the
applicable current or future Code sections and regulations might require and/or
any form requested by

 

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the Certifying Person), signed under penalties of perjury, stating that the
taxpayer identification number supplied by such party to the Certifying Person
is correct.

 

ARTICLE V
INSPECTION OF PROPERTY

 

Section 5.1                                    Evaluation Period.

 

(a)                                 For a period ending at 5:00 p.m. Eastern
Time on March 31, 2014 (as may be extended as provided in 5.1(b) below, the
“Evaluation Period”), Purchaser and its authorized agents and representatives
(for purposes of this Article V, the “Licensee Parties”) shall have the right,
subject to the right of any Tenants, to enter upon the Real Property and
Improvements at all reasonable times during normal business hours to perform an
inspection, including but not limited to a Phase I environmental assessment of
the Property. At least 24 hours prior to such intended entry, Purchaser will
provide e-mail notice to Seller, at the e-mail addresses set forth in
Article XIV below, of the intention of Purchaser or the other Licensee Parties
to enter the Real Property and Improvements, and such notice shall specify the
intended purpose therefor and the inspections and examinations contemplated to
be made and with whom any Licensee Party will communicate. At Seller’s option,
Seller may be present for any such entry and inspection. Purchaser shall not
communicate with or contact any of the Tenants without notifying Seller and
giving Seller the opportunity to have a representative present. Purchaser shall
not communicate with or contact any of the Authorities; provided, however, that
Purchaser may communicate with the township in which the Real Property is
located for the sole purpose of (i) confirming whether there are any existing
municipal zoning or building code violations filed against the Property,
(ii) without identifying the Property, to discuss real estate tax issues
affecting the township generally, and (iii) to obtain copies of previously
issued certificates of occupancy.  Notwithstanding the foregoing, Purchaser
shall not take any action that would cause a municipal inspection to be made of
the Property. During the Evaluation Period, Seller shall instruct its tax appeal
counsel to answer any questions that Purchaser may have regarding the real
estate taxes and the real estate tax appeals with respect to the Property. No
physical testing or sampling shall be conducted during any entry by Purchaser or
any Licensee Party upon the Real Property without Seller’s specific prior
written consent, which consent shall not be unreasonably withheld, conditioned
or delayed. TIME IS OF THE ESSENCE with respect to the provisions of this
Section 5.1.

 

(b)                                 Only for the purpose of obtaining financing
for the purchase of the Property, Purchaser shall have the option to extend the
Evaluation Period for two (2) consecutive  thirty-day periods by (i) providing
notice to Seller at least one (1) Business Day prior to the expiration of the
original Evaluation Period and any extended Evaluation Period that Purchaser is
exercising such option; and (ii) prior to the expiration of the original
Evaluation Period and prior to the expiration of the first extended Evaluation
Period, delivering to Escrow Agent, via Federal Reserve wire transfer of
immediately available funds, the sum of Sixty Thousand Twenty-Five Dollars and
no/100 Cents ($60,025.00) as an additional earnest money deposit on account of
the Purchase Price (each, an “Evaluation Period Extension Deposit”).  The
Evaluation Period Extension Deposit shall be non-refundable to Purchaser except
in accordance with Sections 6.3, 9.1, 11.1, 11.2 and 13.1 below but applicable
to Purchase Price.  TIME IS OF THE ESSENCE with respect to the exercise of the
option to extend the Evaluation Period and the payment of the

 

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Evaluation Period Extension Deposit.  Purchaser agrees and acknowledges that if
it elects to exercise its option to extend the Evaluation Period as provided
above, Purchaser shall have elected to proceed with the transaction as set forth
in this Agreement, subject only to Purchaser obtaining unconditional acquisition
financing on terms and conditions acceptable to Purchaser in its reasonable
discretion for the Property and all of the Other Properties and that
notwithstanding anything to the contrary set forth in Subsection 5.3(c) below,
Purchaser shall not have the further right to terminate this Agreement under
Subsection 5.3(c) for any reason other than its inability to obtain such
unconditional acquisition financing for the Property and all of the Other
Properties on terms and conditions acceptable to Purchaser in its reasonable
discretion.

 

Section 5.2                                    Document Review.

 

(a)                                 During the Evaluation Period, Purchaser and
the Licensee Parties shall have the right to review and inspect, at Purchaser’s
sole cost and expense, all of the following which, to Seller’s Knowledge, are in
Seller’s possession or control (collectively, the “Documents”): all existing
environmental reports and studies of the Real Property, real estate tax bills,
together with assessments (special or otherwise), ad valorem and personal
property tax bills, covering the period of Seller’s ownership of the Property;
Seller’s most current lease schedule in the form attached hereto as Exhibit F
(the “Lease Schedule”); current operating statements; historical financial
reports; the Leases, lease files, Service Contracts, and Licenses and Permits.
Such inspections shall occur at a location selected by Seller, which may be at
the office of Seller, Seller’s counsel, Seller’s property manager, at the Real
Property, in an electronic “war room” or any of the above. Purchaser shall not
have the right to review or inspect materials not directly related to the
leasing, maintenance and/or management of the Property, including, without
limitation, Seller’s internal e-mails and memoranda, financial projections,
budgets, appraisals, proposals for work not actually undertaken, income tax
records and similar proprietary, elective or confidential information, and
engineering reports and studies.

 

(b)                                 Purchaser acknowledges that any and all of
the Documents may be proprietary and confidential in nature and have been
provided to Purchaser solely to assist Purchaser in determining the desirability
of purchasing the Property. Subject only to the provisions of Article XII,
Purchaser agrees not to disclose the contents of the Documents or any of the
provisions, terms or conditions contained therein to any party outside of
Purchaser’s organization other than its attorneys, partners, accountants,
agents, consultants, lenders or investors (collectively, for purposes of this
Section 5.2(b), the “Permitted Outside Parties”). Purchaser further agrees that
within its organization, or as to the Permitted Outside Parties, the Documents
will be disclosed and exhibited only to those persons within Purchaser’s
organization or to those Permitted Outside Parties who are responsible for
determining the desirability of Purchaser’s acquisition of the Property.
Purchaser further acknowledges that the Documents and other information relating
to the leasing arrangements between Seller and Tenants are proprietary and
confidential in nature. Purchaser agrees not to divulge the contents of such
Documents and other information except in strict accordance with the
confidentiality standards set forth in this Section 5.2 and Article XII. In
permitting Purchaser and the Permitted Outside Parties to review the Documents
and other information to assist Purchaser, Seller has not waived any privilege
or claim of confidentiality with respect thereto, and no third party benefits or
relationships of any kind, either express or implied, have been offered,
intended or created by Seller, and any such claims are expressly rejected by
Seller and waived by Purchaser and the Permitted Outside

 

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Parties, for whom, by its execution of this Agreement, Purchaser is acting as an
agent with regard to such waiver.

 

(c)                                  Purchaser acknowledges that some of the
Documents may have been prepared by third parties and may have been prepared
prior to Seller’s ownership of the Property. PURCHASER HEREBY ACKNOWLEDGES THAT,
EXCEPT AS EXPRESSLY SET FORTH IN SECTION 8.1 BELOW, SELLER HAS NOT MADE AND DOES
NOT MAKE ANY REPRESENTATION OR WARRANTY REGARDING THE TRUTH, ACCURACY OR
COMPLETENESS OF THE DOCUMENTS OR THE SOURCES THEREOF. SELLER HAS NOT UNDERTAKEN
ANY INDEPENDENT INVESTIGATION AS TO THE TRUTH, ACCURACY OR COMPLETENESS OF THE
DOCUMENTS AND IS PROVIDING THE DOCUMENTS SOLELY AS AN ACCOMMODATION TO
PURCHASER.

 

Section 5.3                                    Entry and Inspection Obligations
Termination of Agreement.

 

(a)                                 Purchaser agrees that in entering upon and
inspecting or examining the Property, Purchaser and the other Licensee Parties
will not disturb the Tenants or interfere with the use of the Property pursuant
to the Leases; interfere with the operation and maintenance of the Real Property
or Improvements; damage any part of the Property or any personal property owned
or held by Tenants or any other person or entity; injure or otherwise cause
bodily harm to Seller or any Tenant, or to any of their respective agents,
guests, invitees, contractors and employees, or to any other person or entity;
permit any liens to attach to the Real Property by reason of the exercise of
Purchaser’s rights under this Article V; or reveal or disclose any information
obtained concerning the Property and the Documents to anyone outside Purchaser’s
organization, except in accordance with the confidentiality standards set forth
in Section 5.4(b)) and Article XII. Purchaser will (i) maintain comprehensive
general liability (occurrence) insurance on terms and in amounts reasonably
satisfactory to Seller, and Workers’ Compensation insurance in statutory limits,
and, if Purchaser or any Licensee Party performs any physical inspection or
sampling at the Real Property in accordance with Section 5.1, then Purchaser or
such Licensee Party shall maintain errors and omissions insurance and
contractor’s pollution liability insurance on terms and in amounts reasonably
acceptable to Seller, and insuring Seller, Mack-Cali Realty, L.P., Mack-Cali
Realty Corporation, Purchaser and such other parties as Seller shall request,
covering any accident or event arising in connection with the presence of
Purchaser or the other Licensee Parties on the Real Property or Improvements,
and deliver evidence of insurance verifying such coverage to Seller prior to
entry upon the Real Property or Improvements; (ii) promptly pay when due the
costs of all entry and inspections and examinations done with regard to the
Property; (iii) cause any inspection to be conducted in accordance with
standards customarily employed in the industry and in compliance with all
Governmental Regulations; (iv) at Seller’s request, furnish to Seller any
studies, reports or test results received by Purchaser regarding the Property,
promptly after such receipt, in connection with such inspection; and (v) restore
the Real Property and Improvements to the condition in which the same were found
before any such entry upon the Real Property and inspection or examination was
undertaken.

 

(b)                                 Purchaser hereby indemnifies, defends and
holds Seller and its partners, members, agents, directors, officers, employees,
successors and assigns harmless from and against any and all liens, claims,
causes of action, damages, liabilities, demands, suits, and

 

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obligations to third parties, together with all losses, penalties, costs and
expenses relating to any of the foregoing (including but not limited to court
costs and reasonable attorneys’ fees and expenses), arising out of any
inspections, investigations, examinations, sampling or tests conducted by
Purchaser or any of the Licensee Parties, whether prior to or after the
Effective Date, with respect to the Property or any violation of the provisions
of this Article V.

 

(c)                                  In the event that Purchaser determines,
after its inspection of the Documents and Real Property and Improvements, that
it wants to proceed with the transaction as set forth in this Agreement,
Purchaser shall provide written notice to Seller that it elects to proceed with
the transaction prior to the expiration of the Evaluation Period, WITH TIME
BEING OF THE ESSENCE WITH RESPECT THERETO. In the event Purchaser does not
provide such written notice or if Purchaser provides written notice of its
election to terminate this Agreement, this Agreement shall automatically
terminate. If this Agreement terminates under this Section 5.3(c), or under any
other right of termination as set forth herein, Purchaser shall have the right
to receive a refund of the Earnest Money Deposit, together with all interest
which has accrued thereon, and except with respect to the Termination Surviving
Obligations, this Agreement shall be null and void and the parties shall have no
further obligation to each other hereunder. In the event this Agreement is
terminated, Purchaser shall return to Seller all copies Purchaser has made of
the Documents and all copies of any studies, reports or test results regarding
any part of the Property obtained by Purchaser, before or after the execution of
this Agreement, in connection with Purchaser’s inspection of the Property
(collectively, “Purchaser’s Information”) promptly following the termination of
this Agreement for any reason.

 

Section 5.4                                    Sale “As Is”. THE TRANSACTION
CONTEMPLATED BY THIS AGREEMENT HAS BEEN NEGOTIATED BETWEEN SELLER AND PURCHASER,
THIS AGREEMENT REFLECTS THE MUTUAL AGREEMENT OF SELLER AND PURCHASER, AND
PURCHASER HAS THE RIGHT TO CONDUCT ITS OWN INDEPENDENT EXAMINATION OF THE
PROPERTY PURSUANT TO THIS ARTICLE V. OTHER THAN THE MATTERS REPRESENTED IN
SECTION 8.1 AND 16.1 HEREOF, BY WHICH ALL OF THE FOLLOWING PROVISIONS OF THIS
SECTION 5.4 ARE LIMITED, PURCHASER HAS NOT RELIED UPON AND WILL NOT RELY UPON,
EITHER DIRECTLY OR INDIRECTLY, ANY REPRESENTATION OR WARRANTY OF SELLER OR ANY
OF SELLER’S AGENTS OR REPRESENTATIVES, AND PURCHASER HEREBY ACKNOWLEDGES THAT NO
SUCH REPRESENTATIONS OR WARRANTIES HAVE BEEN MADE.

 

SELLER SPECIFICALLY DISCLAIMS, AND NEITHER SELLER NOR ANY OF SELLER’S AFFILIATES
NOR ANY OTHER PERSON IS MAKING, ANY REPRESENTATION, WARRANTY OR ASSURANCE
WHATSOEVER TO PURCHASER, AND NO WARRANTIES OR REPRESENTATIONS OF ANY KIND OR
CHARACTER, EITHER EXPRESS OR IMPLIED, ARE MADE BY SELLER OR RELIED UPON BY
PURCHASER WITH RESPECT TO THE STATUS OF TITLE TO OR THE MAINTENANCE, REPAIR,
CONDITION, DESIGN OR MARKETABILITY OF THE PROPERTY, OR ANY PORTION
THEREOF, INCLUDING BUT NOT LIMITED TO (a) ANY IMPLIED OR EXPRESS WARRANTY OF
MERCHANTABILITY, (b) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE, (c) ANY IMPLIED OR

 

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EXPRESS WARRANTY OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS, (d) ANY RIGHTS
OF PURCHASER UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION,
(e) ANY CLAIM BY PURCHASER FOR DAMAGES BECAUSE OF DEFECTS, WHETHER KNOWN OR
UNKNOWN, WITH RESPECT TO THE IMPROVEMENTS OR THE PERSONAL PROPERTY, (f) THE
FINANCIAL CONDITION OR PROSPECTS OF THE PROPERTY AND (g) THE COMPLIANCE OR LACK
THEREOF OF THE REAL PROPERTY OR THE IMPROVEMENTS WITH GOVERNMENTAL
REGULATIONS, INCLUDING WITHOUT LIMITATION ENVIRONMENTAL LAWS, NOW EXISTING OR
HEREAFTER ENACTED OR PROMULGATED, IT BEING THE EXPRESS INTENTION OF SELLER AND
PURCHASER THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE PROPERTY
WILL BE CONVEYED AND TRANSFERRED TO PURCHASER IN ITS PRESENT CONDITION AND STATE
OF REPAIR, “AS IS” AND “WHERE IS,” WITH ALL FAULTS. PURCHASER REPRESENTS THAT IT
IS A KNOWLEDGEABLE, EXPERIENCED AND SOPHISTICATED PURCHASER OF REAL ESTATE, AND
THAT IT IS RELYING SOLELY ON ITS OWN EXPERTISE AND THAT OF PURCHASER’S
CONSULTANTS IN PURCHASING THE PROPERTY. PURCHASER HAS BEEN GIVEN A SUFFICIENT
OPPORTUNITY HEREIN TO CONDUCT AND HAS CONDUCTED OR WILL CONDUCT SUCH
INSPECTIONS, INVESTIGATIONS AND OTHER INDEPENDENT EXAMINATIONS OF THE PROPERTY
AND RELATED MATTERS AS PURCHASER DEEMS NECESSARY, INCLUDING BUT NOT LIMITED TO
THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AND WILL RELY UPON SAME AND
NOT UPON ANY STATEMENTS OF SELLER (EXCLUDING THE LIMITED MATTERS REPRESENTED BY
SELLER IN SECTION 8.1 HEREOF) NOR OF ANY OFFICER, DIRECTOR, EMPLOYEE, AGENT OR
ATTORNEY OF SELLER. PURCHASER ACKNOWLEDGES THAT ALL INFORMATION OBTAINED BY
PURCHASER WAS OBTAINED FROM A VARIETY OF SOURCES, AND SELLER WILL NOT BE DEEMED
TO HAVE REPRESENTED OR WARRANTED THE COMPLETENESS, TRUTH OR ACCURACY OF ANY OF
THE DOCUMENTS OR OTHER SUCH INFORMATION HERETOFORE OR HEREAFTER FURNISHED TO
PURCHASER. UPON CLOSING, PURCHASER WILL ASSUME THE RISK THAT ADVERSE
MATTERS, INCLUDING, BUT NOT LIMITED TO, ADVERSE PHYSICAL AND ENVIRONMENTAL
CONDITIONS, MAY NOT HAVE BEEN REVEALED BY PURCHASER’S INSPECTIONS AND
INVESTIGATIONS. PURCHASER ACKNOWLEDGES AND AGREES THAT, UPON CLOSING, SELLER
WILL SELL AND CONVEY TO PURCHASER, AND PURCHASER WILL ACCEPT THE PROPERTY, “AS
IS, WHERE IS,” WITH ALL FAULTS. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT
THERE ARE NO ORAL AGREEMENTS, WARRANTIES OR REPRESENTATIONS COLLATERAL TO OR
AFFECTING THE PROPERTY BY SELLER, ANY AGENT OF SELLER OR ANY THIRD PARTY. SELLER
IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR WRITTEN STATEMENTS,
REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY FURNISHED BY ANY REAL
ESTATE BROKER, AGENT, EMPLOYEE OR OTHER PERSON, UNLESS THE SAME ARE SPECIFICALLY
SET FORTH OR REFERRED TO HEREIN. PURCHASER ACKNOWLEDGES THAT THE PURCHASE PRICE
REFLECTS THE “AS IS, WHERE IS” NATURE OF THIS SALE AND ANY FAULTS, LIABILITIES,
DEFECTS OR OTHER ADVERSE MATTERS THAT MAY BE ASSOCIATED WITH THE PROPERTY.
PURCHASER, WITH PURCHASER’S COUNSEL,

 

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HAS FULLY REVIEWED THE DISCLAIMERS AND WAIVERS SET FORTH IN THIS AGREEMENT AND
UNDERSTANDS THEIR SIGNIFICANCE AND AGREES THAT THE DISCLAIMERS AND OTHER
AGREEMENTS SET FORTH HEREIN ARE AN INTEGRAL  PART OF THIS AGREEMENT, AND THAT
SELLER WOULD NOT HAVE AGREED TO SELL THE PROPERTY TO PURCHASER FOR THE PURCHASE
PRICE WITHOUT THE DISCLAIMERS AND OTHER AGREEMENTS SET FORTH IN THIS AGREEMENT.

 

SUBJECT TO PURCHASER’S RIGHT TO BRING AN ACTION AGAINST SELLER PURSUANT TO
SECTION 8.3 BELOW IN THE EVENT OF ANY BREACH BY SELLER OF THE REPRESENTATION AND
WARRANTY PERTAINING TO ENVIRONMENTAL MATTERS SET FORTH IN SECTION 8.1 BELOW,
PURCHASER AND PURCHASER’S AFFILIATES FURTHER COVENANT AND AGREE NOT TO SUE
SELLER AND SELLER’S AFFILIATES AND HEREBY RELEASE SELLER AND SELLER’S AFFILIATES
OF AND FROM AND WAIVE ANY CLAIM OR CAUSE OF ACTION, INCLUDING WITHOUT LIMITATION
ANY STRICT LIABILITY CLAIM OR CAUSE OF ACTION, THAT PURCHASER OR PURCHASER’S
AFFILIATES MAY HAVE AGAINST SELLER OR SELLER’S AFFILIATES UNDER ANY
ENVIRONMENTAL LAW, NOW EXISTING OR HEREAFTER ENACTED OR PROMULGATED, RELATING TO
ENVIRONMENTAL MATTERS OR ENVIRONMENTAL CONDITIONS IN, ON, UNDER, ABOUT OR
MIGRATING FROM OR ONTO THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE
COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT, OR BY
VIRTUE OF ANY COMMON LAW RIGHT, NOW EXISTING OR HEREAFTER CREATED, RELATED TO
ENVIRONMENTAL CONDITIONS OR ENVIRONMENTAL MATTERS IN, ON, UNDER, ABOUT OR
MIGRATING FROM OR ONTO THE PROPERTY. THE TERMS AND CONDITIONS OF THIS
SECTION 5.4 WILL EXPRESSLY SURVIVE THE TERMINATION OF THIS AGREEMENT OR THE
CLOSING, AS THE CASE MAY BE, AND WILL NOT MERGE WITH THE PROVISIONS OF ANY
CLOSING DOCUMENTS AND ARE HEREBY DEEMED INCORPORATED INTO THE DEED AS FULLY AS
IF SET FORTH AT LENGTH THEREIN.

 

ARTICLE VI
TITLE AND SURVEY MATTERS

 

Section 6.1                                    Survey. Purchaser acknowledges
receipt of the Existing Survey. Any modification, update or recertification of
the Existing Survey shall be at Purchaser’s election and sole cost and expense.
Any updated survey that Purchaser has elected to obtain, if any, is herein
referred to as the “Updated Survey.” Purchaser shall have until March 24, 2014
to obtain an Updated Survey and to deliver a copy of same to Seller. Any gores,
strips, overlaps or potential boundary line disputes and other survey defects,
including but not limited to encroachments, legal description issues, easement
locations that impede or interfere with use or occupancy and similar defects
shall constitute a “Survey Objection” under this Agreement.

 

Section 6.2                                    Title Commitment.

 

(a)                                 Purchaser has ordered a title insurance
commitment with respect to the Real Property issued, by the Title Company (the
“Title Commitment”).  On or before March 12, 2014, Purchaser shall provide to
Seller the Title Commitment, together with legible copies of the

 

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title exceptions listed thereon. On or before March 28, 2014 (the “Title
Objection Date”), Purchaser shall notify Seller in writing, if there are (i) any
monetary liens or other title exceptions that Purchaser objects to (“Title
Objections”) or (ii) any Survey Objection. In the event Seller does not receive
written notice of any Title Objections or Survey Objection by the Title
Objection Date, TIME BEING OF THE ESSENCE, then Purchaser will be deemed to have
accepted or waived such exceptions to title set forth on the Title Commitment as
permitted exceptions (as accepted or waived by Purchaser, the “Permitted
Exceptions”) and shall be deemed to have waived its right to object to any
Survey Objection.

 

(b)                                 After the Title Objection Date, if the Title
Company raises any new exception to title to the Real Property, Purchaser’s
counsel shall have five (5) Business Days after he or she receives notice of
such exception (the “New Objection Date”) (or as promptly as possible prior to
the Closing if such notice is received with less than five (5) Business Days
prior to the Closing), to provide Seller with written notice if such exception
constitutes a Title Objection. In the event Seller does not receive notice of
such Title Objection by the New Objection Date, Purchaser will be deemed to have
accepted the exceptions to title set forth on any updates to the Title
Commitment as Permitted Exceptions.

 

(c)                                  All taxes, water rates or charges, sewer
rents and assessments, plus interest and penalties thereon, which on the Closing
Date are liens against the Real Property and which Seller is obligated to pay
and discharge will be credited against the Purchase Price (subject to the
provision for apportionment of taxes, water rates and sewer rents herein
contained) and shall not be deemed a Title Objection. If on the Closing Date
there shall be security interests filed against the Real Property, such items
shall not be Title Objections if (i) the personal property covered by such
security interests are no longer in or on the Real Property, or (ii) such
personal property is the property of a Tenant, and Seller executes and delivers
an affidavit to such effect, or the security interest was filed more than five
(5) year prior to the Closing Date and was not renewed.

 

(d)                                 If on the Closing Date the Real Property
shall be affected by any lien  which, pursuant to the provisions of this
Agreement, is required to be discharged or satisfied by Seller, Seller shall not
be required to discharge or satisfy the same of record provided the money
necessary to satisfy the lien is retained by the Title Company at Closing, and
the Title Company either omits the lien as an exception from the title insurance
commitment or insures against collection thereof from out of the Real Property,
and a credit is given to Purchaser for the recording charges for a satisfaction
or discharge of such lien.

 

(e)                                  No franchise, transfer, inheritance,
income, corporate or other tax open, levied or imposed against Seller or any
former owner of the Property, that may be a lien against the Property on the
Closing Date, shall be an objection to title if the Title Company insures
against collection thereof from or out of the Real Property and/or the
Improvements, and provided further that Seller deposits with the Title Company a
sum of money or a parental guaranty reasonably acceptable to the Title Company
and sufficient to secure a release of the Property from the lien thereof. If a
search of title discloses judgments, bankruptcies, or other returns against
other persons having names the same as or similar to that of Seller, Seller will
deliver to Purchaser an affidavit stating that such judgments, bankruptcies or
other returns do not apply to Seller, and such search results shall not be
deemed Title Objections.

 

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Section 6.3                                    Title Defect.

 

(a)                                 In the event Seller receives notice of any
Survey Objection or Title Objection (collectively and individually a “Title
Defect”) within the time periods required under Sections 6.1 and 6.2 above,
Seller may elect (but shall not be obligated) to attempt to remove, or cause to
be removed at its expense, any such Title Defect, and shall provide Purchaser
with notice within five (5) days of its receipt of any such objection, of its
intention to attempt to cure such any such Title Defect. If Seller elects to
attempt to cure any Title Defect, the Scheduled Closing Date shall be extended
for a period of twenty (20) days for the purpose of such removal.  In the event
that (i) Seller elects not to attempt to cure any such Title Defect, or
(ii) Seller is unable to cure any such Title Defect within such twenty (20) days
from the Scheduled Closing Date, Seller shall so notify Purchaser and Purchaser
shall have the right to terminate this Agreement pursuant to this
Section 6.3(a) and receive a refund of the Earnest Money Deposit, together with
all interest which has accrued thereon, or to waive such Title Defect and
proceed to the Closing. Purchaser shall make such election by written notice to
Seller within three (3) days after receipt of Seller’s notice. If Seller has
elected to cure a Title Defect and thereafter fails to timely cure such Title
Defect, and Purchaser elects to terminate this Agreement, then (i) Seller shall
reimburse Purchaser for its reasonable out-of-pocket costs and expenses payable
to third parties in connection with this transaction incurred after the date on
which Seller informed Purchaser of its election to cure the Title Defect, not to
exceed the Reimbursement Cap, and (ii) Purchaser shall promptly return
Purchaser’s Information to Seller, after which neither party shall have any
further obligation to the other under this Agreement except for the Termination
Surviving Obligations. If Purchaser elects to proceed to the Closing, any Title
Defects waived by Purchaser shall be deemed to constitute Permitted Exceptions,
and there shall be no reduction in the Purchase Price. If, within the three-day
period, Purchaser fails to notify Seller of Purchaser’s election to terminate,
then Purchaser shall be deemed to have waived the Title Defect and to have
elected to proceed to the Closing.

 

(b)                                 Notwithstanding any provision of this
Article VI to the contrary, Seller shall be obligated to cure exceptions to
title to the Property, in the manner described above, relating to liens and
security interests securing any financings to Seller, any judgment liens, which
are in existence on the Effective Date, or which come into existence after the
Effective Date, and any mechanic’s liens resulting from work at the Property
commissioned by Seller; provided, however, that any such mechanic’s lien may be
cured by bonding in accordance with New Jersey law. In addition, Seller shall be
obligated to pay off any outstanding real estate taxes that were due and payable
prior to the Closing (but subject to adjustment in accordance with Section 10.4
below).

 

ARTICLE VII
INTERIM OPERATING COVENANTS AND ESTOPPELS

 

Section 7.1                                    Interim Operating Covenants.
Seller covenants to Purchaser that Seller will:

 

(a)                                 Operations and Leasing. From the Effective
Date until Closing, continue to operate, manage and maintain the Property in the
ordinary course of Seller’s business and substantially in accordance with
Seller’s present practice, subject to ordinary wear and tear, and

 

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further subject to Article XI of this Agreement. From the Effective Date through
the expiration of the Evaluation Period, Seller will notify Purchaser of any new
Leases or amendments to existing Leases and provide copies thereof to Purchaser,
along with notice of the anticipated expenditures in connection therewith to the
extent known to Seller at such time, if such expenditures are not set forth in
the amendment or new Lease, and will notify Purchaser of  any real estate tax
appeals initiated or settled during such period, but Purchaser shall have no
right to approve any new Leases or Lease amendments or the initiation or
settlement of any real estate tax appeals during such period (for the avoidance
of doubt, Seller shall not be obligated to provide notice of tenant inducements
that are set forth in a Lease amendment or new Lease, such as notice of the
landlord’s tenant improvement or moving expense, obligations, even if the
amendment or Lease does not set forth a specific dollar amount or maximum
expenditure in connection with such inducement, unless Seller has already
obtained a cost estimate for such item). Nothing herein shall require Seller to
obtain written cost estimates for tenant improvements, but if Seller has them,
it will deliver them to Purchaser along with the other new lease or lease
amendment documents. After the expiration of the Evaluation Period and
Purchaser’s posting of the Additional Deposit with the Escrow Agent, Seller
shall not amend any existing Lease or enter into any new Lease, or initiate or
settle any tax appeal, without Purchaser’s prior written consent, which shall
not be unreasonably withheld, conditioned or delayed.  It shall be reasonable
for Purchaser to reject a proposed lease due to (i) rent amounts or free rent,
(ii) tenant improvement allowances, (iii) term, (iv) creditworthiness of tenant,
(v) landlord obligations such as requiring Purchaser to construct additional
parking spaces at the Property and (vi) other reasonable underwriting criteria.
From the expiration of the Evaluation Period and continuing through and after
the Closing, Seller expressly reserves the right to prosecute and settle,
subject to Purchaser’s prior written consent, which will not be unreasonably
withheld, conditioned, or delayed, any tax appeals that pertain to tax years
prior to the tax year in which the Closing occurs.

 

(b)                                 Compliance with Governmental Regulations.
From the Effective Date until Closing, not knowingly take any action that Seller
knows would result in a failure to comply in any material respects with any
Governmental Regulations applicable to the Property, it being understood and
agreed that prior to Closing, Seller will have the right to contest any such
Governmental Regulations so long as there is no penalty or fine as a result
thereof.

 

(c)                                  Service Contracts. From the expiration of
the Evaluation Period until Closing, not enter into any service contract other
than in the ordinary course of business, unless such service contract is
terminable on thirty (30) days notice without penalty or unless Purchaser
consents thereto in writing, which approval will not be unreasonably withheld,
conditioned or delayed.

 

(d)                                 Notices. To the extent received by Seller,
from the Effective Date until Closing, promptly deliver to Purchaser copies of
written default notices, notices of lawsuits and notices of violations affecting
the Property.

 

(e)                                  Representations and Warranties. Three
(3) Business Days prior to the expiration of the Evaluation Period, Seller shall
notify Purchaser in writing of any changes in the representations and warranties
of Seller set forth in Section 8.1 below.

 

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(f)                                   No New Liens and Encumbrances. After the
Evaluation. Period, Seller shall not encumber the Property with any new lien or
encumbrance.

 

Section 7.2                                    Estoppels. It will be a condition
to Closing that Seller obtain from each Major Tenant an executed estoppel
certificate in the form, or limited to the substance, prescribed by each Major
Tenant’s Lease. Notwithstanding the foregoing, Seller agrees to request that
each Major Tenant and other Tenants in the buildings and any REA Party execute
an estoppel certificate in the form reasonably requested by Purchaser and
annexed hereto as Exhibit G or such form as reasonably required by Purchaser’s
lenders if such form is provided to Seller at least five (5) days prior to the
end of the Evaluation Period. No later than five (5) Business Days after the end
of the Evaluation Period, Seller will request each Major Tenant and other
Tenants in the buildings and any REA Party to execute an estoppel certificate in
the form of Exhibit G or such form as reasonably required by Purchaser’s lenders
if such form is provided to Seller at least five (5) days prior to the end of
the Evaluation Period and use good faith efforts to obtain same. Seller shall
not be in default of its obligations hereunder if any Major Tenant or other
Tenant or REA Party fails to deliver an estoppel certificate, or delivers an
estoppel certificate which is not in accordance with this Agreement.

 

Section 7.3                                    SNDAs.  Upon Purchaser’s request,
Seller shall deliver to each Major Tenant a subordination, non-disturbance and
attornment agreement (“SNDA”) in the form, or limited to the substance,
prescribed by each Major Tenant’s Lease, or if no form is required or substance
prescribed, then in a commercially reasonable form required by Purchaser’s
lender, provided such form is provided to Seller at least five (5) days prior to
the expiration of the Evaluation Period.  Seller shall not be in default of its
obligations hereunder if any Major Tenant fails to deliver an SNDA, or delivers
a SNDA which is not in accordance with this Agreement and the delivery of any
SNDA shall not be a condition precedent to Purchaser’s obligations to complete
Closing.

 

Section 7.4                                    Rights of First Offer.  Seller
has informed Purchaser that the third parties listed on Schedule 7.4 (each a
“ROFO Party” and collectively, the “ROFO Parties”) possess rights of first offer
to purchase the Property (collectively, the “ROFO Rights”).  Seller has further
informed Purchaser that notice of the transaction contemplated hereunder has
been given to each of the ROFO Parties in accordance with the ROFO Rights (the
“ROFO Notice”).  Seller shall promptly provide notice to Purchaser of its
receipt of any notice or other communication, written or oral, from any ROFO
Party to exercise, or to decline to exercise, such ROFO Right, and, in the case
of a written communication, copies thereof.  If any ROFO Party exercises its
ROFO Rights (each, a “ROFO Election”), this Agreement shall automatically
terminate.  If this Agreement is terminated pursuant to this Section 7.4, the
Earnest Money Deposit shall be promptly returned to Purchaser, together with all
interest which has accrued thereon and Purchaser shall be entitled to a
reimbursement of its reasonable out of pocket costs and expenses payable to
third parties in connection with this transaction, provided that the
reimbursement by Seller to Purchaser under this Agreement shall not exceed the
Reimbursement Cap (as hereinafter defined) and except with respect to the
Termination Surviving Obligations, this Agreement shall be null and void and the
parties shall have no further obligation to each other hereunder.

 

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ARTICLE VIII
REPRESENTATIONS AND WARRANTIES

 

Section 8.1                                    Seller’s Representations and
Warranties. The following constitute the sole representations and warranties of
Seller, which representations and warranties shall be true in all material
respects as of the Effective Date and the Closing Date (but subject to
modifications as permitted by this Agreement). Subject to the limitations set
forth in Section 8.3 of this Agreement, Seller represents and warrants to
Purchaser the following:

 

(a)                                 Status. Seller is a limited liability
company duly organized and validly existing under the laws of the State of New
Jersey.

 

(b)                                 Authority. Subject to the ROFO Rights as
provided in Section 7.4 above, the execution and delivery of this Agreement and
the performance of Seller’s obligations hereunder have been or will be duly
authorized by all necessary action on the part of Seller, and this Agreement
constitutes the legal, valid and binding obligation of Seller.

 

(c)                                  Non-Contravention. The execution and
delivery of this Agreement by Seller and the consummation by Seller of the
transactions contemplated hereby will not violate any judgment, order,
injunction, decree, regulation or ruling of any court or Authority or conflict
with, result in a breach of, or constitute a default under the organizational
documents of Seller, any note or other evidence of indebtedness, any mortgage,
deed of trust or indenture, or any lease or, subject to the ROFO Rights, other
material agreement or instrument to which Seller is a party or by which it is
bound.

 

(d)                                 Suits and Proceedings. To Seller’s
Knowledge, except as listed in Exhibit H, there are no legal actions, suits or
similar proceedings pending and served, or threatened in writing against Seller
or the Property which (i) are not adequately covered by existing insurance and
(ii) if adversely determined, would materially and adversely affect the value of
the Property, the continued operations thereof, or Seller’s ability to
consummate the transactions contemplated hereby.

 

(e)                                  Non-Foreign Entity. Seller is not a
“foreign person” or “foreign corporation” as those terms are defined in the
Internal Revenue Code of 1986, as amended, and the regulations promulgated
thereunder.

 

(f)                                   Tenants and Leases. As of the Effective
Date, to Seller’s Knowledge, the only tenants of the Property are the Tenants
set forth in the Lease Schedule on Exhibit F. To Seller’s Knowledge, the
Documents made available to Purchaser pursuant to Section 5.2 hereof include
true and correct copies of all of the Leases listed on Exhibit F. To Seller’s
Knowledge, as of the Effective Date, no Tenant is in material non-monetary
default, or in monetary default, under its Lease except as set forth on the
arrearage schedule annexed hereto and made a part hereof as Exhibit K (the
“Arrearage Schedule”). To Seller’s Knowledge, as of the Effective Date:
(i) Seller has not received written notice in accordance with requirements of
the applicable Lease from any Tenant that such Tenant is terminating its Lease,
vacating its premises, or filing for bankruptcy, other than as listed on
Schedule 8.1(f)(i); and (ii) Seller has paid all Tenant allowances and
commissions for the current lease terms and demised premises under all Leases,

 

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other than as listed on Schedule 8.1(f)(ii). For the avoidance of doubt, Seller
makes no representation or warranty with respect to any Tenant allowances or
commissions that may be due and owing upon an extension, renewal or expansion of
an existing Lease as stated in such Lease or in any extension, renewal or
expansion amendment to such Lease.

 

(g)                                  Service Contracts. To Seller’s Knowledge,
none of the service providers listed on Exhibit E is in default under any
Service Contract. To Seller’s Knowledge, the Documents made available to
Purchaser pursuant to Section 5.2 hereof include copies of all Service Contracts
listed on Exhibit E under which Seller is currently paying for services rendered
in connection with the Property.

 

(h)                                 Environmental Matters. To Seller’s
Knowledge, (i) copies of all environmental assessments, reports and studies in
Seller’s possession have been made available to Purchaser for Purchaser’s
review, and (ii) Seller has not received written notice that the Property is
currently in violation of any Environmental Laws.

 

(i)                                     Condemnation. To Seller’s Knowledge,
there are no condemnation or eminent domain actions pending, or threatened in
writing, against Seller or any part of the Property.

 

(j)                                    Bankruptcy. Seller is not insolvent or
bankrupt within the meaning of  United States federal law or State of New Jersey
law.

 

(k)                                 Anti-Terrorism. Neither Seller, nor any
officer, director, shareholder, partner, investor or member of Seller is named
by any Executive Order of the United States Treasury Department as a terrorist,
a “Specially Designated National and Blocked Person;” or any other banned or
blocked person, entity, nation or transaction pursuant to the law, order,
rule or regulation that is enforced or administered by the Office of Foreign
Assets Control (collectively, an “Identified Terrorist”). Seller is not engaging
in this transaction on the behalf of, either directly or indirectly, any
Identified Terrorist.

 

(l)                                     There are no rights of first refusal,
rights of first offer or other rights, options or other agreements to purchase
the Property binding on Seller other than the ROFO Rights, and true and correct
copies of certain relevant provisions of the agreement in which such ROFO Rights
are created have been provided to Purchaser and are attached hereto as Schedule
8.1(l).

 

(m)                             Seller has no knowledge of any other person or
entity having any rights or claims in or to the ROFO Rights other than the ROFO
Parties.

 

(n)                                 Seller has given the ROFO Notice to the ROFO
Parties in accordance and in compliance with the notice requirements relating to
the ROFO Rights.

 

Section 8.2                                    Purchaser’s Representations and
Warranties.  Purchaser represents and warrants to Seller the following:

 

(a)                                 Status. Purchaser is a duly organized and
validly existing limited liability company under the laws of the State of
Delaware.

 

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(b)           Authority. The execution and delivery of this Agreement and the
performance of Purchaser’s obligations hereunder have been duly authorized by
all necessary action on the part of Purchaser, and this Agreement constitutes
the legal, valid and binding obligation of Purchaser.

 

(c)           Non-Contravention. The execution and delivery of this Agreement by
Purchaser and the consummation by Purchaser of the transactions contemplated
hereby will not violate any judgment, order, injunction, decree, regulation or
ruling of any court or Authority or conflict with, result in a breach of or
constitute a default under the organizational documents of Purchaser, any note
or other evidence of indebtedness, any mortgage, deed of trust or indenture, or
any lease or other material agreement or instrument to which Purchaser is a
party or by which it is bound.

 

(d)           Consents. No consent, waiver, approval or authorization is
required from any person or entity (that has not already been obtained) in
connection with the execution and delivery of this Agreement by Purchaser or the
performance by Purchaser of the transactions contemplated hereby.

 

(e)           Anti-Terrorism. Neither Purchaser, nor any officer, director,
shareholder, partner, investor or member of Purchaser is named by any Executive
Order of the United States Treasury Department as Identified Terrorist.
Purchaser is not engaging in this transaction on the behalf of, either directly
or indirectly, any Identified Terrorist.

 

Section 8.3            Survival of Representations, Warranties and Covenants.
The representations and warranties of Seller set forth in Subsections
8.1(a) through (g), (i), (j), and (k) will survive the Closing for a period of
six (6) months, after which time they will merge into the Deed. The
representations and warranties of Seller set forth in Subsection 8.1 (h), (l),
(m), and (n) will survive the Closing for a period of one (1) year, after which
time they will merge into the Deed. Purchaser will not have any right to bring
any action against Seller as a result of any untruth or inaccuracy of such
representations, warranties or certifications, unless and until the aggregate
amount of all liability and losses arising out of any such untruth or inaccuracy
when combined with the aggregate amount of all liability and losses  with
respect to the representations and warranties made by the M-C Sellers pursuant
to the Other P&S Agreements, exceeds Two Hundred Fifty Thousand Dollars
($250,000.00); and then only to the extent of such excess.  In addition, in no
event will the Seller’s and the M-C Sellers’ collective liability for all such
breaches exceed, in the aggregate, the sum of Four Million Dollars
($4,000,000.00).  Seller shall have no liability with respect to any of Seller’s
representations, warranties or certifications herein if, prior to the Closing,
Purchaser obtains knowledge (from whatever source, including, without
limitation, any tenant estoppel certificates, as a result of Purchaser’s due
diligence tests, investigations and inspections of the Property, or written
disclosure by Seller or Seller’s agents and employees) that contradicts any of
Seller’s representations, warranties or certifications, and Purchaser
nevertheless consummates the transaction contemplated by this Agreement. In
addition, with respect to any claim asserted or damage suffered by it with
respect to any ROFO Rights, Purchaser shall first look to the issuer of its
title insurance policy.  To that end, Purchaser will not have any right to
pursue any action against Seller (other than the filing of notice required to
preserve its claim) as a result of any untruth or inaccuracy of any of the
representations or warranties made by Seller in Subsections 8.1(l), (m) or
(n) until Purchaser has pursued and

 

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exhausted all actions and claims for coverage available to it under the title
insurance policy issued to Purchaser in connection with Purchaser’s acquisition
of the Property with respect to any claims or damages resulting or arising from
any ROFO Rights.  The Closing Surviving Obligations and the Termination
Surviving Obligations will survive Closing without limitation unless a specified
period is otherwise provided in this Agreement.  All other representations,
warranties, covenants and agreements made or undertaken by Seller under this
Agreement, unless otherwise specifically provided herein, will not survive the
Closing but will be merged into the Deed and other Closing documents delivered
at the Closing.  Purchaser’s knowledge shall mean the present actual knowledge
of William Glazer and Thomas Hartley.

 

ARTICLE IX
CONDITIONS PRECEDENT TO CLOSING

 

Section 9.1            Conditions Precedent to Obligation of Purchaser. The
obligation of Purchaser to consummate the transaction hereunder shall be subject
to the fulfillment on or before the Closing Date of all of the following
conditions, any or all of which may be waived by Purchaser in its sole
discretion:

 

(a)           Seller shall have delivered to Purchaser all of the items required
to be delivered to Purchaser pursuant to the terms of this Agreement, including
but not limited to the tenant estoppel certificates required under Section 7.2
and the documents and other items provided for in Section 10.3.

 

(b)           All of the representations and warranties of Seller contained in
this Agreement shall be true and correct in all material respects as of the
Closing Date (with appropriate modifications permitted under this Agreement).
For the avoidance of doubt, the representations and warranties contained in
Subsections 8.1 (f) and (g) may be modified at Closing to reflect changes in the
identity of the Tenants and the Leases (that are not in violation of the
operating covenants set forth in Section 7.1 above), notices received from any
Tenant that it is terminating its Lease, vacating its premises, or filing for
bankruptcy, any Tenant defaults between the date hereof and Closing, and any
changes in the Service Contracts (in accordance with the operating covenants set
forth in Section 7.1 above), and any defaults by the service providers
thereunder.

 

(c)           Seller shall have performed and observed, in all material
respects, all covenants and agreements of this Agreement to be performed and
observed by Seller as of the Closing Date.

 

(d)           At or prior to Closing, the Title Company shall be prepared, or
First American Title Insurance Company’s National Office shall be prepared if
the Title Company is not so prepared, to irrevocably commit to issue to
Purchaser a standard New Jersey basic owner’s title insurance policy (without
regard to any endorsements required by Purchaser or its lender) in the amount of
the Purchase Price with respect to the Property pursuant to a marked-up title
commitment or a pro-forma policy effective as of the Closing Date, subject only
to Permitted Exceptions and the standard printed exceptions on such policy, upon
the fulfillment by Seller and Purchaser of the Schedule B, Section I
requirements, and the payment by Purchaser of

 

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the requisite premium.  Seller shall have the right to arrange for First
American Title Insurance Company’s National Office to become involved in such
title decisions.

 

(e)           Closing shall simultaneously take place between KPG Purchasers and
M-C Sellers under all of the Other P&S Agreements, unless such failure to close
thereunder is due to the bad faith and intentional acts of Purchaser or any KPG
Purchaser intended to impede Closing or a breach of any material covenant of
Purchaser under this Agreement or any KPG Purchaser under the other P&S
Agreements of which it is a party.

 

(f)            Purchaser and Seller shall have complied with the New Jersey Bulk
Sale Law, N.J.S.A. 54:50-38, and shall have received from the State of New
Jersey, Department of the Treasury, Division of Taxation, either an Escrow
Letter (stating the amount of money to be held in escrow at Closing) or a
Clearance Letter (stating that the bulk sale case has been closed, no money is
to remain in escrow, and the Purchaser is absolved from liability under the Bulk
Sale Law).

 

If the conditions precedent to Closing under this Section 9.1 are not satisfied
or waived by Purchaser on or before Closing, Purchaser shall have the right to
terminate this Agreement and receive a refund of the Earnest Money Deposit and
interest earned thereon and except with respect to the Termination Surviving
Obligations, this Agreement shall be null and void and the parties shall have no
further obligations to each other hereunder.

 

Section 9.2            Conditions Precedent to Obligation to Seller. The
obligation of Seller to consummate the transaction hereunder shall be subject to
the fulfillment on or before the Closing Date (or as otherwise provided) of all
of the following conditions, any or all of which may be waived by Seller in it
sole discretion:

 

(a)           Seller shall have received the Purchase Price as adjusted pursuant
to, and payable in the manner provided for, in this Agreement.

 

(b)           Purchaser shall have delivered to Seller all of the items required
to be delivered to Seller pursuant to the terms of this Agreement, including but
not limited to, those provided for in Section 10.2.

 

(c)           All of the representations and warranties of Purchaser contained
in this Agreement shall be true and correct in all material respects as of the
Closing Date.

 

(d)           Purchaser shall have performed and observed, in all material
respects, all covenants and agreements of this Agreement to be performed and
observed by Purchaser as of the Closing Date.

 

(e)           Seller shall have timely received evidence from Keystone Property
Group of its offer of employment to all M-C Employees, as defined in, and the
notices and certificates required under, that certain letter agreement dated of
even date with this Agreement by and between Mack-Cali Realty Corporation and
Keystone Property Group.

 

(f)            Closing shall simultaneously take place between KPG Purchasers
and the M-C Sellers under all of the Other P&S Agreements, unless such failure
to close thereunder is

 

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due to the bad faith and intentional acts of Seller or any M-C Sellers intended
to impede Closing or a breach of any material covenant of Seller under this
Agreement or any M-C Seller under the other P&S Agreements of which it is a
party or a ROFO Election.

 

(g)           Purchaser and Seller shall have complied with the New Jersey Bulk
Sale Law, N.J.S.A. 54:50-38, and Purchaser shall have received from the State of
New Jersey, Department of the Treasury, Division of Taxation, either an Escrow
Letter (stating the amount of money to be held in escrow at Closing), or a
Clearance Letter (stating that the bulk sale case has been closed, no money is
to remain in escrow and the Purchaser is absolved from liability under the Bulk
Sale Law).

 

ARTICLE X
CLOSING

 

Section 10.1          Closing.

 

(a)           The consummation of the transaction contemplated by this Agreement
by delivery of documents and payments of money shall take place and be completed
on or before 4:00 p.m. Eastern Time on the Scheduled Closing Date at the offices
of the Escrow Agent.  Either of Purchaser and Seller may elect, one (1) time, to
adjourn the Closing to a date no later than ten (10) days after the Scheduled
Closing Date, or the next Business Day thereafter if such date is not a Business
Day, by delivery of notice to the other, given at least one (1) day  prior to
the Scheduled Closing Date, TIME BEING OF THE ESSENCE with respect to each
party’s respective obligation to close on such adjourned date.  Such adjourned
date, if any, shall be the Closing Date.

 

(b)           At Closing, the events set forth in this Article X will occur, it
being understood that the performance or tender of performance of all matters
set forth in this Article X are mutually concurrent conditions which may be
waived by the party for whose benefit they are intended. The acceptance of the
Deed by Purchaser shall be deemed to be full performance and discharge of each
and every agreement and obligation on the part of Seller to be performed
hereunder unless otherwise specifically provided herein.

 

(c)           Within at least ten (10) days after the end of the Evaluation
Period, Purchaser shall fully complete and deliver to the New Jersey Division of
Taxation a Form C-9600 and a copy of this Agreement pursuant to the New Jersey
Bulk Sale Law and shall simultaneously transmit a copy of same to Seller. 
Seller shall cooperate with Purchaser with respect to the preparation of the
Form C-9600.

 

Section 10.2          Purchaser’s Closing Obligations. On the Closing Date,
Purchaser, at its sole cost and expense, will deliver to Seller the following
items:

 

(a)           The Purchase Price, after all adjustments are made as herein
provided, by Federal Reserve wire transfer of immediately available funds, in
accordance with the timing and other requirements of Section 3.2;

 

(b)           A counterpart original of each Assignment of Leases, duly executed
by Purchaser;

 

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(c)           A counterpart original of each Assignment, duly executed by
Purchaser;

 

(d)           Evidence reasonably satisfactory to Seller that the person
executing the Assignment of Leases, the Assignment, and the Tenant Notice
Letters on behalf of Purchaser has full right, power and authority to do so;

 

(e)           Form of written notice executed by Purchaser and to be addressed
and delivered to the Tenants by Purchaser in accordance with Section 10.6
herein, (i) acknowledging the sale of the Property to Purchaser,
(ii) acknowledging that Purchaser has received and that Purchaser is responsible
for the Security Deposit (specifying the exact amount of the Security Deposit)
and (iii) indicating that rent should thereafter be paid to Purchaser and giving
instructions therefor (the “Tenant Notice Letters”);

 

(f)            A counterpart original of the Closing Statement, duly executed by
Purchaser;

 

(g)           A certificate, dated as of the Closing Date, stating that the
representations and warranties of Purchaser contained in Section 8.2 are true
and correct in all material respects as of the Closing Date;

 

(h)           A counterpart original of the Operating Agreement (as defined in
Section 10.3(k) below), duly executed by Purchaser;

 

(i)            Such other documents as, may be reasonably necessary or
appropriate to effect the consummation of the transaction which is the subject
of this Agreement; and

 

(j)            A properly completed and executed New Jersey Affidavit of
Consideration for Use by Buyer Form RTF-1EE  to be filed with the Deed.

 

Section 10.3          Seller’s Closing Obligations. On the Closing Date, Seller,
at its sole cost and expense, will deliver to Purchaser the following items:

 

(a)           A bargain and sale deed with covenant against grantor’s acts (the
“Deed”), duly executed and acknowledged by Seller, conveying to Purchaser the
Real Property and the Improvements, subject only to the Permitted Exceptions;

 

(b)           A bill of sale in the form attached hereto as Exhibit C (the “Bill
of Sale”), duly executed by Seller, assigning and conveying to Purchaser,
without representation or warranty, title to the Personal Property;

 

(c)           A counterpart original of an assignment and assumption of Seller’s
interest, as lessor, in the Leases and Security Deposits in the form attached
hereto as Exhibit B (the “Assignment of Leases”), duly executed by Seller,
conveying and assigning to Purchaser all of Seller’s right, title and interest,
as lessor, in the Leases and Security Deposits;

 

(d)           A counterpart original of an assignment and assumption of Seller’s
interest in the Service Contracts (other than any Service Contracts as to which
Purchaser has notified Seller prior to the expiration of the Evaluation Period
that Purchaser elects not to assume at

 

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Closing) and the Licenses and Permits in the form attached hereto as Exhibit A
(the “Assignment”), duly executed by Seller, conveying and assigning to
Purchaser all of Seller’s right, title, and interest, if any, in such Service
Contracts and the Licenses and Permits;

 

(e)           The Tenant Notice Letters, duly executed by Seller, with respect
to the Tenants;

 

(f)            Evidence reasonably satisfactory to Purchaser and the Title
Company that the person executing the documents delivered by Seller pursuant to
this Section 10.3 on behalf of Seller has full right, power, and authority to do
so;

 

(g)           A certificate in the form attached hereto as Exhibit I
(“Certificate as to Foreign Status”) certifying that Seller is not a “foreign
person” as defined in Section 1445 of the Internal Revenue Code of 1986, as
amended;

 

(h)           All original Leases, to the extent in Seller’s possession, the
original Major Tenant Estoppels and any other estoppels as described in
Section 7.2, SNDAs as described in Section 7.3 and all original Licenses and
Permits and Service Contracts in Seller’s possession bearing on the Property;

 

(i)            A certificate, dated as of the Closing Date, stating that the
representations and warranties of Seller contained in Section 8.1 are true and
correct in all material respects as of the Closing Date (with appropriate
modifications to reflect any changes therein that are not prohibited by this
Agreement, including but not limited to updates to the Lease Schedule, Schedule
of Service Contracts and Arrearage Schedule as set forth in Section 9.1(b));

 

(j)            An Affidavit of Title in form and substance reasonably
satisfactory to the Title Company;

 

(k)           A counterpart original of an operating agreement in the form of
Exhibit L attached to this Agreement, duly executed by Seller or an affiliate of
Seller (the “Operating Agreement”); and

 

(l)            An properly completed and executed (i) New Jersey Affidavit of
Consideration for Use by Seller Form RTF-1 to be filed with the Deed; and
(ii) to the extent applicable, a Residency Certificate/Exemption
Form (Form GIT-REP 3) or Nonresident Seller’s Tax Declaration.

 

Section 10.4          Prorations and Adjustments.

 

(a)           Seller and Purchaser agree to prorate and/or adjust, as of
11:59 p.m. on the day preceding the Closing Date (the “Proration Time”), the
following (collectively, the “Proration Items”):

 

(i)            Rents, in accordance with Section 10.4(c) below.

 

(ii)           Cash Security Deposits and any prepaid rents, together with any
interest required to be paid thereon.

 

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(iii)          Utility charges payable by Seller, including, without limitation,
electricity, water charges and sewer charges. If there are meters on the Real
Property, final readings and final billings for utilities will be made if
possible on the day before the Closing Date, in which event no proration will be
made at the Closing with respect to utility bills. If meter readings on the day
before the Closing Date are not possible, then Seller will cause readings of all
said meters to be performed not more than five (5) days prior to the Closing
Date, and a per diem adjustment shall be made for the days between the meter
reading date and the Closing Date based on the most recent meter reading. Seller
will be entitled to all deposits presently in effect with the utility providers,
and Purchaser will be obligated to make its own arrangements for any deposits
with the utility providers.  Seller has informed the Township of Piscataway of
over-billing errors made in connection with sanitary sewer service provided to
the Property during the period beginning in July, 2010 and continuing.  Seller
is pursuing a claim for a refund from the Township with respect to such
over-billing.  With respect to such claim Seller shall be entitle to continue to
pursue a refund and shall be entitled to recover and retain such refunds that
relate to any period prior to the Closing.  This provision shall survive
Closing.

 

(iv)          Amounts payable under the Service Contracts other than those
Service Contracts which Purchaser has elected not to assume by written notice to
Seller prior to the expiration of the Evaluation Period.

 

(v)           Real estate taxes due and payable for the calendar year. If the
Closing Date shall occur before the tax rate is fixed, the apportionment of real
estate taxes shall be upon the basis of the tax rate for the preceding year
applied to the latest assessed valuation. If, subsequent to the Closing Date,
real estate taxes (by reason of change in either assessment or rate or for any
other reason other than as a result of the final determination or settlement of
any tax appeal) for the Real Property should be determined to be higher or lower
than those that are apportioned, a new computation shall be made, and Seller
agrees to pay Purchaser any increase shown by such recomputation and vice versa;
provided, however, that if any increase in the assessed value of the Property
results from improvements made to the Property by Purchaser, then Purchaser
shall be solely responsible for any increase in taxes attributable thereto. With
respect to tax appeals, any tax refunds or credits attributable to tax years
prior to the tax year in which the Closing occurs shall belong solely to Seller,
regardless of whether such refunds are paid or credits are given before or after
Closing. Any tax refunds or credits attributable to the tax year in which the
Closing occurs shall be apportioned between Seller and Purchaser based on their
respective periods of ownership in such tax year. The expenses of any tax
appeals shall be apportioned between the parties in the same manner as the
refunds and/or credits. The provisions of this Section 10.4(a)(v) shall survive
the Closing.

 

(vi)          The value of fuel stored at the Real Property, at Seller’s most
recent cost, including taxes, on the basis of a reading made within ten
(10) days prior to the Closing by Seller’s supplier.

 

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(b)           Seller will be charged and credited for the amounts of all of the
Proration Items relating to the period up to and including the Proration Time,
and Purchaser will be charged and credited for all of the Proration Items
relating to the period after the Proration Time. The estimated Closing
prorations shall be set forth on a preliminary closing statement to be prepared
by Seller and submitted to Purchaser prior to the Closing Date (the “Closing
Statement”). The Closing Statement, once agreed upon, shall be signed by
Purchaser and Seller. The proration shall be paid at Closing by Purchaser to
Seller (if the prorations result in a net credit to Seller) or by Seller to
Purchaser (if the prorations result in a net credit to Purchaser) by increasing
or reducing the cash to be delivered by Purchaser in payment of the Purchase
Price at the Closing. If the actual amounts of the Proration Items are not known
as of the Closing Date, the prorations will be made at Closing on the basis of
the best evidence then available; thereafter, when actual figures are received,
re-prorations will be made on the basis of the actual figures, and a final cash
settlement will be made between Seller and Purchaser. No prorations will be made
in relation to insurance premiums, and Seller’s insurance policies will not be
assigned to Purchaser. The provisions of this Section 10.4(b) will survive the
Closing for twelve (12) months.

 

(c)           Purchaser will receive a credit on the Closing Statement for the
prorated amount (as of the Proration Time) of all Rental previously paid to or
collected by Seller and attributable to any period following the Proration Time.
After the Closing, Seller will cause to be paid or turned over to Purchaser all
Rental, if any, received by Seller after Closing and attributable to any period
following the Proration Time. “Rental” as used herein includes fixed monthly
rentals, additional rentals, percentage rentals, escalation rentals (which
include each Tenant’s proration share of building operation and maintenance
costs and expenses as provided for under the Lease, to the extent the same
exceeds any expense stop specified in such Lease), retroactive rentals, all
administrative charges, utility charges, tenant or real property association
dues, storage rentals, special event proceeds, temporary rents, telephone
receipts, locker rentals, vending machine receipts and other sums and charges
payable by Tenants under the Leases or from other occupants or users of the
Property. Rental is “Delinquent” when it was due prior to the Closing Date, and
payment thereof has not been made on or before the Proration Time. Delinquent
Rental will not be prorated. Purchaser agrees to use good faith collection
procedures with respect to the collection of any Delinquent Rental. All sums
collected by Purchaser in the month of Closing shall be applied to the month of
Closing. All sums collected by Purchaser thereafter from each Tenant (excluding
tenant specific billings for tenant work orders and other specific services as
described in and governed by Section 10.4(e) below) will be applied first to
current amounts owed by such Tenant to Purchaser, and then delinquencies owed by
such Tenant to Seller. Any sums due Seller will be promptly remitted to Seller. 
Purchaser shall not modify, amend or terminate any existing agreements with
Tenants relating to past rent due.

 

(d)           At the Closing, Seller shall deliver to Purchaser a list of
additional rent, however characterized, under each Lease, including without
limitation, real estate taxes, electrical charges, utility costs, easement
charges and operating expenses (collectively, “Operating Expenses”) billed to
Tenants for the calendar year in which the Closing occurs (both on a monthly
basis and in the aggregate), the basis on which the monthly amounts are being
billed and the amounts actually incurred by Seller on account of the components
of Operating Expenses for such calendar year. Upon the reconciliation by
Purchaser of the estimated Operating Expenses billed to Tenants, and the amounts
actually incurred for such

 

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calendar year, Seller and Purchaser shall be liable to Tenants for the refund of
any overpayments of Operating Expenses, and shall be entitled to payments from
Tenants in the event of underpayments, as the case may be, on a prorata basis
based upon each party’s period of ownership during such calendar year.

 

(e)           With respect to specific tenant billings for work orders, special
items performed or provided at the request of a Tenant or other specific
services, which are collected by Purchaser after the Closing Date but relate to
the foregoing specific services rendered by Seller prior to the Proration Time,
then notwithstanding anything to the contrary contained herein, Purchaser shall
cause the first amounts collected from such Tenant to be paid to Seller on
account thereof.

 

(f)            Notwithstanding any provision of this Section 10.4 to the
contrary, Purchaser will be solely responsible for any leasing commissions,
tenant improvement costs or other expenditures due with respect to any Lease
amendments, renewals and/or expansions entered into or, if pursuant to options,
exercised after the Effective Date.  Purchaser further agrees to be solely
responsible for all leasing commissions, tenant improvement costs and other
expenditures (for purposes of this Section 10.4(f), “New Tenant Costs”) incurred
or to be incurred in connection with any new lease executed on or after the
Effective Date in accordance with Section 7.1 above, and Purchaser will pay to
Seller at Closing as an addition to the Purchase Price an amount equal to any
New Tenant Costs paid by Seller.

 

Section 10.5          Costs of Title Company and Closing Costs. Costs of the
Title Company and other Closing costs incurred in connection with the Closing
will be allocated as follows:

 

(a)           Seller shall pay (i) Seller’s attorney’s fees; (ii) one-half (1/2)
of escrow fees, if any; (iii) the cost of recording any discharges or
satisfactions of liens that are the Seller’s responsibility to cure at Closing;
and (iv) the realty transfer tax.

 

(b)           Purchaser shall pay (i) the costs of recording the Deed to the
Property and all other documents; (ii) the premium for an owner’s title
insurance policy, the cost of customary title searches, the cost of any
additional coverage under the title insurance policy or endorsements; (iii) all
premiums and other costs for any mortgagee policy of title insurance, including
but not limited to any additional coverage or endorsements required by the
mortgage lender; (iv) Purchaser’s attorney’s fees; (v) one-half (1/2) of escrow
fees, if any; (vi) the costs of the Updated Survey, as provided for in
Section 6.1; and (vii) the New Jersey “Mansion Tax” to the extent required
pursuant to N.J.S.A. 46:15-7-2.

 

(c)           Any other costs and expenses of Closing not provided for in this
Section 10.5 shall be allocated between Purchaser and Seller in accordance with
the custom in the area in which the Property is located.

 

Section 10.6          Post-Closing Delivery of Tenant Notice Letters.
Immediately following Closing, Purchaser will deliver to each Tenant a Tenant
Notice Letter, as described in Section 10.2(e).

 

Section 10.7          Like-Kind Exchange. Purchaser hereby acknowledges that
Seller may now or hereafter desire to enter into a partially or completely
nontaxable exchange (a “Section

 

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1031 Exchange”) involving the Property (and/or any one or more of the properties
comprising the Property) under Section 1031 of the Internal Revenue Code of
1986, as amended, and the Treasury Regulations promulgated thereunder. In
connection therewith, and notwithstanding anything herein to the contrary,
Purchaser shall cooperate with Seller and shall take, and consent to Seller
taking, any action in furtherance of effectuating a Section 1031 Exchange
(including, without limitation, any action undertaken pursuant to Revenue
Procedure 2000-37, 2000-40. IRB, as may hereafter be amended or revised (the
“Revenue Procedure”)), including, without limitation, (a) permitting Seller or
an “exchange accommodation titleholder” (within the meaning of the Revenue
Procedure) (“EAT”) to assign, or cause the assignment of, this Agreement and all
of Seller’s rights hereunder with respect to any or all of the Property to a
“qualified intermediary” (as defined in Treasury Regulations
Section 1.1031(k)-1(g)(4)(iii)) (a “QI”); (b) permitting Seller to assign this
Agreement and all of Seller’s rights and obligations hereunder with respect to
any or all of the Property and/or to convey, transfer or sell any or all of the
Property, to (i) an EAT; (ii) any one or more limited liability companies
(“LLCs”) that are wholly-owned by an EAT; or (iii) any one or more LLCs that are
wholly-owned by Seller and/or any affiliate of Seller and to thereafter permit
Seller to assign its interest in such one or more LLCs to an EAT; and
(c) pursuant to the terms of this Agreement, having any or all of the Property
conveyed by an EAT or any one or more of the LLCs referred to in (b)(ii) or
(b)(iii) above, and allowing for the consideration therefor to be paid by an
EAT, any such LLC or a QI; provided, however, that Purchaser shall not be
required to delay the Closing; and provided further that Seller shall provide
whatever safeguards are reasonably requested by Purchaser, and not inconsistent
with Seller’s desire to effectuate a Section 1031 Exchange involving any of the
Property, to ensure that all of Seller’s obligations under this Agreement shall
be satisfied in accordance with the terms thereof.

 

ARTICLE XI
CONDEMNATION AND CASUALTY

 

Section 11.1          Casualty. If, prior to the Closing Date, all or a
Significant Portion of the Property is destroyed or damaged by fire or other
casualty, Seller will notify Purchaser of such casualty. Purchaser will have the
option to terminate this Agreement upon notice to Seller given not later than
fifteen (15) days after receipt of Seller’s notice. If this Agreement is
terminated, the Earnest Money Deposit and all interest accrued thereon will be
returned to Purchaser and thereafter neither Seller nor Purchaser will have any
further rights or obligations to the other hereunder except with respect to the
Termination Surviving Obligations. If Purchaser does not elect to terminate this
Agreement or less than a Significant Portion of the Property is destroyed or
damaged as aforesaid, Seller will not be obligated to repair such damage or
destruction but (a) Seller will assign and turn over to Purchaser the insurance
proceeds net of reasonable collection costs (or if such have not been awarded,
all of its right, title and interest therein) payable with respect to such fire
or other casualty up to the amount of the Purchase Price and (b) the parties
will proceed to Closing pursuant to the terms hereof without abatement of the
Purchase Price, except that Purchaser will receive a credit for any insurance
deductible amount. In the event Seller elects to perform any repairs as a result
of a casualty, Seller will be entitled to deduct its costs and expenses from any
amount to which Purchaser is entitled under this Section 11.1, which right shall
survive the Closing; provided, however, that if the casualty occurs after the
expiration of the Evaluation Period, then Seller’s right to make such repairs
shall be subject to

 

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the prior written approval of Purchaser, which will not be unreasonably
withheld, conditioned or delayed.

 

Section 11.2          Condemnation of Property. In the event of (a) any
condemnation or sale in lieu of condemnation of all of the Property; or (b) any
condemnation or sale in lieu of condemnation of greater than ten percent (10%)
of the fair market value of the Property prior to the Closing, Purchaser will
have the option, to be exercised within fifteen (15) days after receipt of
notice of such condemnation or sale, of terminating Purchaser’s obligations
under this Agreement, or electing to have this Agreement remain in full force
and effect. In the event that either (i) any condemnation or sale in lieu of
condemnation of the Property is for less than ten percent (10%) of the fair
market value of the Property, or (ii) Purchaser does not terminate this
Agreement pursuant to the preceding sentence, Seller will assign to Purchaser
any and all claims for the proceeds of such condemnation or sale to the extent
the same are applicable to the Property, and Purchaser will take title to the
Property with the assignment of such proceeds and subject to such condemnation
and without reduction of the Purchase Price. Should Purchaser elect to terminate
Purchaser’s obligations under this Agreement under the provisions of this
Section 11.2, the Earnest Money Deposit and any interest thereon will be
returned to Purchaser and neither Seller nor Purchaser will have any further
obligation under this Agreement, except for the Termination Surviving
Obligations. Notwithstanding anything to the contrary herein, if any eminent
domain or condemnation proceeding is instituted (or notice of same is given)
solely for the taking of any subsurface rights for utility easements or for any
right-of-way easement, and the surface may, after such taking, be used in
substantially the same manner as though such rights have not been taken,
Purchaser will not be entitled to terminate this Agreement as to any part of the
Property, but any award resulting therefrom will be assigned to Purchaser at
Closing and will be the exclusive property of Purchaser upon Closing.

 

ARTICLE XII
CONFIDENTIALITY

 

Section 12.1          Confidentiality. Seller and Purchaser each expressly
acknowledge and agree that the transactions contemplated by this Agreement and
the terms, conditions, and negotiations concerning the same will be held in the
strictest confidence by each of them and will not be disclosed by either of them
except to their respective legal counsel, accountants, consultants, officers,
partners, directors, and shareholders, and except and only to the extent that
such disclosure may be necessary for their respective performances hereunder.
Purchaser further acknowledges and agrees that, unless and until the Closing
occurs, all information obtained by Purchaser in connection with the Property
will not be disclosed by Purchaser to any third persons without the prior
written consent of Seller. Nothing contained in this Article XII will preclude
or limit either party to this Agreement from disclosing or accessing any
information otherwise deemed confidential under this Article XII in response to
lawful process or subpoena or other valid or enforceable order of a court of
competent jurisdiction or any filings with governmental authorities or stock
exchange required by reason of the transactions provided for herein pursuant to
advice of counsel. Nothing in this Article XII will negate, supersede or
otherwise affect the obligations of the parties under the Confidentiality
Agreement.  In addition, prior to, at or after the Closing, any release to the
public of information with respect to the sale contemplated herein or any
matters set forth in this Agreement will be made only in a form approved by
Purchaser and Seller and their respective counsel, which approval shall not be
unreasonably withheld,

 

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conditioned or delayed. The provisions of this Article XII will survive the
Closing or any termination of this Agreement.

 

ARTICLE XIII
REMEDIES

 

Section 13.1          Default by Seller. In the event the Closing and the
transactions contemplated hereby do not occur as herein provided by reason of
any default of Seller, Purchaser may, as Purchaser’s sole and exclusive remedy,
elect by notice to Seller within ten (10) Business Days following the Scheduled
Closing Date, either of the following: (a) terminate this Agreement, in which
event Purchaser will receive from the Escrow Agent the Earnest Money Deposit,
together with all interest accrued thereon, and reimbursement from Seller of
Purchaser’s reasonable out of pocket costs and expenses payable to third parties
in connection with this transaction; provided, however, that the reimbursement
by Seller to Purchaser under this Agreement shall not exceed One Hundred Eighty
Thousand Thirty-Nine Dollars and no/100 Cents ($180,039.00) and the aggregate
reimbursement by Seller to Purchaser under this Agreement and the Other P&S
Agreements shall not exceed  Seven Hundred Fifty Thousand Dollars ($750,000.00)
(the “Reimbursement Cap”); whereupon Seller and Purchaser will have no further
rights or obligations under this Agreement, except with respect to the
Termination Surviving Obligations; or (b) seek to enforce specific performance
of Seller’s obligation to execute the documents required to convey the Property
to Purchaser, it being understood and agreed that the remedy of specific
performance shall not be available to enforce any other obligation of Seller
hereunder. Purchaser expressly waives its rights to seek damages in the event of
Seller’s default hereunder. Purchaser shall be deemed to have elected to
terminate this Agreement and receive back the Earnest Money Deposit if Purchaser
fails to file suit for specific performance against Seller in a court having
jurisdiction in the county and state in which the Property is located on or
before thirty (30) days following the Scheduled Closing Date. Notwithstanding
the foregoing, nothing contained in this Section 13.1 will limit Purchaser’s
remedies at law, in equity or as herein provided in pursuing remedies of a
breach by Seller of any of the Termination Surviving Obligations.

 

Section 13.2          Default by Purchaser. In the event the Closing and the
consummation of the transactions contemplated herein do not occur as provided
herein, and if the Closing does not occur by reason of any default of Purchaser,
Purchaser and Seller agree it would be impractical and extremely difficult to
fix the damages which Seller may suffer. Purchaser and Seller hereby agree that
(a) an amount equal to the Earnest Money Deposit, together with all interest
accrued thereon, is a reasonable estimate of the total net detriment Seller
would suffer in the event Purchaser defaults and fails to complete the purchase
of the Property, and (b) such amount will be the full, agreed and liquidated
damages for Purchaser’s default and failure to complete the purchase of the
Property, and will be Seller’s sole and exclusive remedy (whether at law or in
equity) for any default by Purchaser resulting in the failure of consummation of
the Closing, whereupon this Agreement will terminate and Seller and Purchaser
will have no further rights or obligations hereunder, except with respect to the
Termination Surviving Obligations. The  payment of such amount as liquidated
damages is not intended as a forfeiture or penalty but is intended to constitute
liquidated damages to Seller. Notwithstanding the foregoing, nothing contained
herein will limit Seller’s remedies at law, in equity or as herein provided in
the event of a breach by Purchaser of any of the Termination Surviving
Obligations.

 

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ARTICLE XIV
NOTICES

 

Section 14.1          Notices.

 

(a)           All notices or other communications required or permitted
hereunder shall be in writing, and shall be given by any nationally recognized
overnight delivery service with proof of delivery, or by electronic mail
(provided that such electronic mail is confirmed by the sender by expedited
delivery service in the manner previously described), sent to the intended
addressee at the address set forth below, or to such other address or to the
attention of such other person as the addressee will have designated by written
notice sent in accordance herewith. Unless changed in accordance with the
preceding sentence, the addresses for notices given pursuant to this Agreement
will be as follows:

 

If to Purchaser:

 

c/o Keystone Property Group

 

 

One Presidential Boulevard, Suite 300

 

 

Bala Cynwyd, Pennsylvania 19004

 

 

Attn.: William Glazer

 

 

(610) 980-7000 (tele.)

 

 

bglazer@keystonepropertygroup.com (email)

 

 

 

with a copy to:

 

Bradley A. Krouse, Esq.

 

 

Klehr Harrison Harvey Branzburg LLP

 

 

1835 Market Street

 

 

Philadelphia, PA 19103

 

 

(215) 568-6060 (tele.)

 

 

bkrouse@klehr.com (email)

 

 

 

If to Seller:

 

c/o Mack-Cali Realty Corporation

 

 

343 Thornall Street

 

 

Edison, New Jersey 08837-2206

 

 

 

with separate notices

 

 

to the attention of:

 

Mr. Mitchell E. Hersh

 

 

(732) 590-1040 (tele.)

 

 

mhersh@mack-cali.com (email)

 

 

 

 

 

and

 

 

 

 

 

Roger W. Thomas, Esq.

 

 

(732) 590-1010 (tele.)

 

 

rthomas@mack-cali.com (email)

 

 

 

 

 

and

 

 

 

 

 

Stephan K. Pahides

 

 

McCausland Keen & Buckman

 

 

Suite 160, Radnor Court

 

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259 N. Radnor-Chester Road

 

 

Radnor, PA 19087

 

 

(610) 341-1075 (tele.)

 

 

spahides@mkbattorneys.com (email)

 

 

 

If to Escrow Agent:

 

c/o Executive Realty Transfer, Inc.

 

 

1431 Sandy Circle

 

 

Narberth, PA 19072

 

 

(610) 668-9301 (tele.)

 

 

(610) 668-9302 (fax)

 

 

beth@ert-title.com (email)

 

(b)           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) electronic mail as aforesaid shall be deemed given at the time
and on the date of machine transmittal provided same is sent and confirmation of
receipt is received by the sender prior to 4:00 p.m. (EST) on a Business Day (if
sent later, then notice shall be deemed given on the next Business Day). 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.

 

ARTICLE XV
ASSIGNMENT

 

Section 15.1          Assignment: Binding Effect. Purchaser shall not have the
right to assign this Agreement except with the prior written consent of Seller,
which such consent may be withheld in Seller’s sole discretion.  In the event
that Seller consents to any such assignment, Purchaser shall be solely
responsible and shall pay any transfer tax levied or due in connection with such
assignment and shall indemnify Seller from any such transfer tax liability and
Purchaser shall remain liable under this Agreement.  The provisions of this
Section 15.1 shall survive Closing.

 

ARTICLE XVI
BROKERAGE.

 

Section 16.1          Brokers. Purchaser and Seller represent that they have not
dealt with any brokers, finders or salesmen, in connection with this
transaction. Purchaser and Seller agree to indemnify, defend and hold each other
harmless from and against any and all loss, cost, damage, liability or expense,
including reasonable attorneys’ fees, which either party may sustain, incur or
be exposed to by reason of any claim for fees or commissions made through the
other party. The provisions of this Article XVI will survive any Closing or
termination of this Agreement.

 

ARTICLE XVII
ESCROW AGENT

 

Section 17.1          Escrow.

 

(a)           Escrow Agent will hold the Earnest Money Deposit in escrow in an
interest-bearing account of the type generally used by Escrow Agent for the
holding of escrow

 

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funds until the earlier of (i) the Closing, or (ii) the termination of this
Agreement in accordance with any right hereunder. In the event Purchaser has not
terminated this Agreement by the end of the Evaluation Period, the Earnest Money
Deposit shall be non-refundable to Purchaser, but shall be credited against the
Purchase Price at the Closing. All interest earned on the Earnest Money Deposit
shall be paid to the party entitled to the Earnest Money Deposit. In the event
this Agreement is terminated prior to the expiration of the Evaluation Period,
the Earnest Money Deposit and all interest accrued thereon will be returned by
the Escrow Agent to Purchaser. In the event the Closing occurs, the Earnest
Money Deposit and all interest accrued thereon will be released to Seller, and
Purchaser shall receive a credit against the Purchase Price in the amount of the
Earnest Money Deposit, without the interest. In all other instances, Escrow
Agent shall not release the Earnest Money Deposit to either party until Escrow
Agent has been requested by Seller or Purchaser to release the Earnest Money
Deposit and has given the other party five (5) Business Days to object to the
release of the Earnest Money Deposit by giving written notice of such objection
to the requesting party and Escrow Agent. Purchaser represents that its tax
identification number, for purposes of reporting the interest earnings, is
46-4848086. Seller represents that its tax identification number, for purposes
of reporting the interest earnings, is 86-1105189.

 

(b)           Escrow Agent shall not be liable to any party for any act or
omission,  except for bad faith, gross negligence or willful misconduct, and the
parties agree to indemnify Escrow Agent and hold Escrow Agent harmless from any
and all claims, damages, losses or expenses arising in connection herewith. The
parties acknowledge that Escrow Agent is acting solely as stakeholder for their
mutual convenience. In the event Escrow Agent receives written notice of a
dispute between the parties with respect to the Earnest Money Deposit and the
interest earned thereon (the “Escrowed Funds”), Escrow Agent shall not be bound
to release and deliver the Escrowed Funds to either party but may either
(i) continue to hold the Escrowed Funds until otherwise directed in a writing
signed by all parties hereto or (ii) deposit the Escrowed Funds with the clerk
of any court of competent jurisdiction. Upon such deposit, Escrow Agent will be
released from all duties and responsibilities hereunder. Escrow Agent shall have
the right to consult with separate counsel of its own choosing (if it deems such
consultation advisable) and shall not be liable for any action taken, suffered
or omitted by it in accordance with the advice of such counsel.

 

(c)           Escrow Agent shall not be required to defend any legal proceeding
which may be instituted against it with respect to the Escrowed Funds, the
Property or the subject matter of this Agreement unless requested to do so by
Purchaser or Seller, and Escrow Agent is indemnified to its satisfaction against
the cost and expense of such defense. Escrow Agent shall not be required to
institute legal proceedings of any kind and shall have no responsibility for the
genuineness or validity of any document or other item deposited with it or the
collectability of any check delivered in connection with this Agreement. Escrow
Agent shall be fully protected in acting in accordance with any written
instructions given to it hereunder and believed by it to have been signed by the
proper parties.

 

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ARTICLE XVIII
MISCELLANEOUS

 

Section 18.1          Waivers. No waiver of any breach of any covenant or
provisions contained herein will be deemed a waiver of any preceding or
succeeding breach thereof, or of any other covenant or provision contained
herein. No extension of time for performance of any obligation or act will be
deemed an extension of the time for performance of any other obligation or act.

 

Section 18.2          Recovery of Certain Fees. In the event a party hereto
files any action or suit against another party hereto alleging any breach of any
of the covenants, agreements or provisions contained in this Agreement, then in
that event the prevailing party will be entitled to have and recover certain
fees from the other party including all reasonable attorneys’ fees and costs
resulting therefrom. For purposes of this Agreement, the term “attorneys’ fees”
or “attorneys’ fees and costs” shall mean the fees and expenses of counsel to
the parties hereto, which may include printing, photocopying, duplicating and
other expenses, air freight charges, and fees billed for law clerks, paralegals
and other persons not admitted to the bar but performing services under the
supervision of an attorney, and the costs and fees incurred in connection with
the enforcement or collection of any judgment obtained in any such proceeding.
The provisions of this Section 18.2 shall survive the entry of any judgment, and
shall not merge, or be deemed to have merged, into any judgment.

 

Section 18.3          Construction. Headings at the beginning of each
Article and Section of this Agreement are solely for the convenience of the
parties and are not a part of this Agreement. Whenever required by the context
of this Agreement, the singular will include the plural and the masculine will
include the feminine and vice versa. This Agreement will not be construed as if
it had been prepared by one of the parties, but rather as if both parties had
prepared the same. All exhibits and schedules referred to in this Agreement are
attached and incorporated by this reference, and any capitalized term used in
any exhibit or schedule which is not defined in such exhibit or schedule will
have the meaning attributable to such term in the body of this Agreement. In the
event the date on which Purchaser or Seller is required to take any action under
the terms of this Agreement is not a Business Day, the action will be taken on
the next succeeding Business Day.

 

Section 18.4          Counterparts. This Agreement may be executed in multiple
counterparts, each of which, when assembled to include a signature for each
party contemplated to sign this Agreement, will constitute a complete and fully
executed contract. All such fully executed counterparts will collectively
constitute a single agreement. The delivery of a signed counterpart of this
Agreement via e-mail or other electronic means by a party to this Agreement or
legal counsel for such party shall be legally binding on such party, as fully as
the delivery of a counterpart bearing an original signature of such party.

 

Section 18.5          Severability. If any term or other provision of this
Agreement is invalid, illegal, or incapable of being enforced by any rule of law
or public policy, all of the other conditions and provisions of this Agreement
will nevertheless remain in full force and effect, so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
adverse manner to either party. Upon such determination that any term or other
provision is invalid, illegal, or incapable of being enforced, the parties
hereto will negotiate in good faith to modify this Agreement so as to reflect
the original intent of the parties as closely as possible in

 

36

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an acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.

 

Section 18.6          Entire Agreement. This Agreement is the final expression
of, and contains the entire agreement between, the parties with respect to the
subject matter hereof, and supersedes all prior understandings with respect
thereto. This Agreement may not be modified, changed, supplemented or
terminated, nor may any obligations hereunder be waived, except by written
instrument, signed by the party to be charged or by its agent duly authorized in
writing, or as otherwise expressly permitted herein.

 

Section 18.7          Governing Law. THIS AGREEMENT WILL BE CONSTRUED, PERFORMED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY. SELLER AND
PURCHASER HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY STATE OR FEDERAL
COURT SITTING IN THE STATE OF NEW JERSEY IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT AND HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING SHALL BE HEARD AND DETERMINED IN A STATE OR
FEDERAL COURT SITTING IN THE STATE OF NEW JERSEY.

 

Section 18.8          No Recording. The parties hereto agree that neither this
Agreement nor any affidavit or memorandum concerning it will be recorded, and
any recording of this Agreement or any such affidavit or memorandum by Purchaser
will be deemed a default by Purchaser hereunder.  Notwithstanding the foregoing,
Purchaser may file a statutory notice of settlement in the land records of the
county in which the Real Property is located.

 

Section 18.9          Further Actions. The parties agree to execute such
instructions to the Title Company and such other instruments and to do such
further acts as may be reasonably necessary to carry out the provisions of this
Agreement.

 

Section 18.10       Exhibits and Schedules. The following sets forth a list of
Exhibits and Schedules to the Agreement:

 

Exhibit A -

 

Assignment

Exhibit B -

 

Assignment of Leases

Exhibit C -

 

Bill of Sale

Exhibit D -

 

Legal Description of Real Property

Exhibit E -

 

Service Contracts

Exhibit F -

 

Lease Schedule

Exhibit G -

 

Tenant Estoppel

Exhibit H -

 

Suits and Proceedings

Exhibit I -

 

Certificate as to Foreign Status

Exhibit J -

 

Major Tenants

Exhibit K -

 

Arrearage Schedule

Exhibit L -

 

Operating Agreement

Schedule 2.3 -

Purchasers, Sellers and Properties

Schedule 7.4 -

ROFO Parties

 

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Schedule 8.1(f)(i) -

 

Termination Notices

Schedule 8.1(f)(ii) -

 

Tenant Allowances and Leasing Commissions

Schedule 8.1(l) - ROFO Rights

 

Section 18.11       No Partnership. Notwithstanding anything to the contrary
contained herein, this Agreement shall not be deemed or construed to make the
parties hereto partners or joint venturers, it being the intention of the
parties to merely create the relationship of Seller and Purchaser with respect
to the Property to be conveyed as contemplated hereby.

 

Section 18.12       Limitations on Benefits. It is the explicit intention of
Purchaser and Seller that no person or entity other than Purchaser, Seller and
Seller’s Affiliates and their permitted successors and assigns is or shall be
entitled to bring any action to enforce any provision of this Agreement against
any of the parties hereto, and the covenants, undertakings and agreements set
forth in this Agreement shall be solely for the benefit of, and shall be
enforceable only by, Purchaser, Seller and Seller’s Affiliates or their
respective successors and assigns as permitted hereunder. Except as set forth in
this Section 18.12, nothing contained in this Agreement shall under any
circumstances whatsoever be deemed or construed, or be interpreted, as making
any third party (including, without limitation, Broker) a beneficiary of any
term or provision of this Agreement or any instrument or document delivered
pursuant hereto, and Purchaser and Seller expressly reject any such intent,
construction or interpretation of this Agreement.

 

Section 18.13       Discharge of Obligations. The acceptance of the Deed by
Purchaser shall be deemed to be a full performance and discharge of every
representation and warranty made by Seller herein and every agreement and
obligation on the part of Seller to be performed pursuant to the provisions of
this Agreement, except those which are herein specifically stated to survive the
Closing.

 

Section 18.14       Waiver of Formal Requirements. The parties waive the formal
requirements for tender of payment and deed.

 

38

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, Seller and Purchaser have respectively executed this
Agreement as of the Effective Date.

 

 

PURCHASER:

 

 

 

H’Y2 Knightsbridge, LLC

 

 

 

By:

/s/ William H. Glazer

 

 

William H. Glazer,

 

 

President

 

 

 

SELLER:

 

 

 

Knightsbridge Realty L.L.C.

 

 

 

By:

Mack-Cali Realty, L.P., sole member

 

 

 

 

By:

Mack-Cali Realty Corporation, general partner

 

 

 

By:

/s/ Mitchell E. Hersh

 

 

Mitchell E. Hersh,

 

 

President and Chief Executive Officer

 

 

 

 

 

As to Article XVII only:

 

 

 

ESCROW AGENT:

 

 

 

First American Title Insurance Company,

 

through its agent, Executive Realty Transfer, Inc.

 

 

 

By:

/s/ Beth H. Krouse

 

Name:

Beth H. Krouse

 

Title:

President

 

39

--------------------------------------------------------------------------------

 

EXHIBIT A

 

ASSIGNMENT AND ASSUMPTION OF SERVICE CONTRACTS,

LICENSES AND PERMITS

 

THIS ASSIGNMENT AND ASSUMPTION (this “Assignment”) is made as of
                     20         by and between
[                                                          ] under the laws of
the [                                                          ], having an
office located at c/o Mack-Cali Realty Corporation, 343 Thornall Street, Edison,
New Jersey 08837 (“Assignor”), and                                           , a
                                                      , having an office located
at                                                           (“Assignee”).

 

W I T N E S S E T H:

 

WHEREAS, Assignor is the owner of real property commonly known as
[                                                          ], more particularly
described in Exhibit A attached hereto and made a part hereof (the “Property”),
which Property is affected by certain service agreements, maintenance contracts,
equipment leasing agreements, warranties, guarantees, bonds, open purchase
orders and other contracts for the provision of labor, services, materials or
supplies relating solely to the Property, together with all renewals,
supplements, amendments and modifications thereof, which are set forth on
Exhibit B attached hereto and made a part hereof (hereinafter collectively
referred to as the “Contracts”);

 

WHEREAS, Assignor has entered into that certain     Agreement of Sale and
Purchase (the “Sale Agreement”), dated                   , 20        , with
Assignee, wherein Assignor has agreed to convey to Assignee all of Assignor’s
right, title and interest in and to the Property;

 

WHEREAS, Assignor desires to assign to Assignee, to the extent assignable, all
of Assignor’s right, title and interest in and to: (i) the Contracts and
(ii) all licenses, permits, certificates of occupancy, approvals, dedications,
subdivision maps and entitlements in connection with the Property now or
hereafter issued, approved or granted by any governmental or quasi-governmental
bodies or agencies having jurisdiction over the Property or any portion thereof,
together with all renewals and modifications thereof (collectively, the
“Licenses and Permits”), and Assignee desires to accept the assignment of such
right, title and interest in and to the Contracts and Licenses and Permits and
to assume all of Assignor’s rights and obligations thereunder.

 

NOW, THEREFORE, in consideration of the mutual covenants and conditions herein
contained and for other good and valuable consideration, the parties, intending
to be legally bound, do hereby agree as follows:

 

1.             Assignor hereby assigns, sells, transfers, and sets over to
Assignee, its successors and assigns, to the extent assignable, all of
Assignor’s right, title and interest in and to (i) the Contracts and (ii) the
Licenses and Permits.

 

2.             Assignee hereby accepts the foregoing assignment and transfer and
agrees to assume, fulfill, perform and discharge all the various commitments,
obligations and liabilities of

 

EXHIBIT A

 

--------------------------------------------------------------------------------

 

Assignor under and by virtue of the Contracts and Licenses and Permits accruing
or obligated to be performed from and after the date hereof.

 

3.             Assignor hereby agrees to indemnify, defend and hold harmless
Assignee from and against any and all obligations, claims, liabilities, losses,
damages, causes of action, costs and expenses (including, without limitation,
court costs through all appeals and reasonable attorneys’ fees and
disbursements) incurred in connection with claims arising with respect to the
Contracts and/or Licenses and Permits before the date hereof.

 

4.             Assignee hereby agrees to indemnify, defend and hold harmless
Assignor from and against any and all obligations, claims, liabilities, losses,
damages, causes of action, costs and expenses (including, without limitation,
court costs through all appeals and reasonable attorneys’ fees and
disbursements) incurred in connection with claims arising with respect to the
Contracts and/or Licenses and Permits on and after the date hereof.

 

5.             This Assignment is made without representation, warranty (express
or implied) or recourse of any kind, except as may be expressly provided herein
or in the Sale Agreement.

 

6.             This Assignment shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns.  This Agreement
shall be governed by, and construed under, the laws of the State of New Jersey.

 

7.             This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original Assignment, but all of which shall
constitute but one and the same Assignment.

 

IN WITNESS WHEREOF, Assignor and Assignee do hereby execute and deliver this
Assignment as of the date and year first above written.

 

 

ASSIGNOR:

 

 

 

[                                                                        ]

 

 

 

By:   [                                                                     ]

 

 

 

 

 

By[                                                                              ]

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

ASSIGNEE:

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

EXHIBIT A

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

Legal Description

 

EXHIBIT A

 

--------------------------------------------------------------------------------

 

EXHIBIT B

 

Contracts

 

EXHIBIT A

 

--------------------------------------------------------------------------------

 

EXHIBIT B

 

ASSIGNMENT AND ASSUMPTION OF LEASES

 

THIS ASSIGNMENT AND ASSUMPTION (this “Assignment”) is made as of
                     20       by and between
[                                                          ] organized under the
laws of the [                                                          ], having
an office located at c/o Mack-Cali Realty Corporation, 343 Thornall Street,
Edison, New Jersey 08837 (“Assignor”), and
                                          , a
                                                      , having an office located
at                                                           (“Assignee”).

 

W I T N E S S E T H:

 

WHEREAS, the property commonly known as
[                                                          ], further described
in Exhibit A attached hereto (the “Property”) is affected by certain leases and
other agreements with respect to the use and occupancy of the Property, which
leases and other agreements are listed on Exhibit B annexed hereto and made a
part hereof (the “Leases”);

 

WHEREAS, Assignor has entered into that certain Agreement of Sale and Purchase
(“Agreement”) dated                                 , 20       with Assignee,
wherein Assignor has agreed to assign and transfer to Assignee all of Assignor’s
right, title and interest in and to the Leases and all security deposits paid to
Assignor, as landlord (together with any interest which has accrued thereon, but
only to the extent such interest has accrued for the benefit of a tenant), to
the extent such security deposits have not yet been applied toward the
obligations of any tenant under the Leases (“Security Deposits”);

 

WHEREAS, Assignor desires to assign to Assignee all of Assignor’s right, title
and interest in and to the Leases and Security Deposits, and Assignee desires to
accept the assignment of such right, title and interest in and to the Leases and
Security Deposits and to assume all of Assignor’s rights and obligations under
the Leases and with respect to the Security Deposits.

 

NOW, THEREFORE, in consideration of the mutual covenants and conditions herein
contained, and for other good and valuable consideration, the parties, intending
to be legally bound, do hereby agree as follows:

 

1.             Assignor hereby assigns, sells, transfers, sets over and conveys
to Assignee, its successors and assigns, all of Assignor’s right, title and
interest in and to (i) the Leases and (ii) Security Deposits.  Assignee hereby
accepts this assignment and transfer and agrees to assume, fulfill, perform and
discharge all the various commitments, obligations and liabilities of Assignor
under and by virtue of the Leases, accruing or obligated to be performed from
and after the date hereof, including the return of Security Deposits in
accordance with the terms of the Leases.

 

2.             Assignor hereby agrees to indemnify, defend and hold harmless
Assignee from and against any and all obligations, claims, liabilities, losses,
damages, causes of action, costs and expenses (including, without limitation,
court costs through all appeals and reasonable

 

EXHIBIT B

 

--------------------------------------------------------------------------------

 

attorneys’ fees and disbursements) incurred in connection with claims arising
with respect to (i) the obligations of the landlord under the Leases required to
be performed prior to the date hereof; and (ii) the failure of Assignor to
deliver or credit to Assignee the Security Deposits.

 

3.             Assignee hereby agrees to indemnify, defend and hold harmless
Assignor from and against any and all obligations, claims, liabilities, losses,
damages, causes of action, costs and expenses (including, without limitation,
court costs through all appeals and reasonable attorneys’ fees and
disbursements) incurred in connection with claims arising with respect to
(i) the obligations of the landlord under the Leases from and after the date
hereof and (ii) the failure of Assignee to properly maintain, apply and return
any of the Security Deposits in accordance with terms of the Leases.

 

4.             This Assignment is made without representation, warranty (express
or implied) or recourse of any kind, except as may be expressly provided herein
or in the Agreement.

 

5.             This Assignment shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns.  This Assignment
shall be governed by, and construed under, the laws of the State of New Jersey.

 

6.             This Assignment may be executed in one or more counterparts, each
of which shall be deemed to be an original Assignment, but all of which shall
constitute but one and the same Assignment.

 

IN WITNESS WHEREOF, Assignor and Assignee do hereby execute and deliver this
Assignment as of the date and year first above written.

 

 

ASSIGNOR:

 

 

 

[                                                                        ]

 

 

 

By:   [                                                                     ]

 

 

 

 

 

By[                                                                              ]

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

ASSIGNEE:

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

EXHIBIT B

 

--------------------------------------------------------------------------------

 

Exhibit A

 

Legal Description

 

EXHIBIT B

 

--------------------------------------------------------------------------------

 

Exhibit B

 

Description of Leases

 

EXHIBIT B

 

--------------------------------------------------------------------------------

 

EXHIBIT C

 

BILL OF SALE

 

[                                                          ] organized under the
laws of the [                                                          ]
(“Seller”), for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, hereby grants, bargains, sells, transfers and
delivers to                                                           , a
                                                     (“Buyer”), all of Seller’s
right, title and interest in and to all equipment, appliances, tools, supplies,
machinery, artwork, furnishings and other tangible personal property attached
to, appurtenant to, located in and used exclusively in connection with the
ownership or operation of the real property commonly known as
[                                                          ] (more fully
described on Exhibit A annexed hereto and made a part hereof; the “Real
Property”) and situated at the Real Property on the date hereof, but
specifically excluding all personal property leased by Seller or owned by
tenants or others, if any (the “Personal Property”), to have and to hold the
Personal Property unto Buyer, its successors and assigns, forever.

 

Seller makes no representation or warranty to Buyer, express or implied, in
connection with this Bill of Sale or the sale, transfer and conveyance made
hereby.

 

EXECUTED under seal this            day of                 , 20      .

 

 

[                                                                          ]

 

 

 

 

By:

[                                                                             ]

 

 

 

 

 

By

[                                                                            ]

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

EXHIBIT C

 

--------------------------------------------------------------------------------

 

EXHIBIT D

 

LEGAL DESCRIPTION

 

All that certain Lot, piece or parcel of land, with the buildings and
improvements thereon erected, situate, lying and being in the Township of
Piscataway, County of Middlesex State of New Jersey,

 

Beginning at a point in the southerly side of Knightsbridge Road, therein
distant southeasterly 1094.23 feet from the intersection of the same with the
southeasterly side of Cenntennial Avenue, if the same were produced to meet at
an intersection and running; thence

 

1.       Along said side of Knightsbridge Road, South 64 degrees 09 minutes 20
seconds East, 349.95 feet to an angle in the same; thence

 

2.       Still along the same, South 73 degrees 49 minutes 50 seconds East,
419.86 feet to a point of curve in the same; thence

 

3.       Still along the same, easterly on the arc of a curve, curving to the
left with a radius of 656.91 feet, for a distance of 308.36 feet to a point of
reverse curve; thence

 

4.       Southeasterly on the arc of a curve, curving to the right with a radius
of 30.00 feet, for a distance of 42.46 feet to a point of tangency; thence

 

5.       South 19 degrees 37 minutes 40 seconds East, 278.70 feet to a point of
curve; thence

 

6.       Southerly on the arc of a curve, curving to the right with a radius of
525.75 feet for a distance of 173.66 feet to a point of tangency; thence

 

7.       South 0 degrees 42 minutes 10 seconds East, 984.92 feet; thence

 

8.       South 70 degrees 37 minutes 52 seconds West, 464.43 feet; thence

 

9.       South 65 degrees 46 minutes 50 seconds West, 97.25 feet; thence

 

10.      North 41 degrees 40 minutes 40 seconds West, 926.50 feet; thence

 

11.      North 41 degrees 45 minutes 10 seconds West, 817.16 feet to a point in
the southeasterly terminus of Plainfield Avenue North; thence

 

12.      Along said terminus and in continuation of the same, North 53 degrees
08 minutes 50 seconds East, 297.64 feet to a point of curve; thence

 

EXHIBIT D

 

--------------------------------------------------------------------------------

 

·      North 43 degrees 51’ 21” East 4.16 feet; and North 29 degrees 57’ 21”
East 683.20 feet to the point and place of BEGINNING.

 

Policy insures ingress and egress to and from the subject premises to and from
the nearest public highway.

 

EXHIBIT D

 

--------------------------------------------------------------------------------

 

EXHIBIT E

 

SERVICE CONTRACTS

 

Building 5 Only

 

Elevator Maintenance

 

Agreement between Liberty Elevator Corp., Contractor, and Knightsbridge Realty
L.L.C., Owner, dated January 9, 2013.

 

Elevator Phone Monitoring

 

Agreement between BH Security, Contractor, and Knightsbridge Realty L.L.C.,
Owner, dated March 13, 2013.

 

Buildings 5 and 6 Only

 

Interior Plant Maintenance

 

Agreement between Julius Roehrs Co., Contractor, and Knightsbridge Realty
L.L.C., Owner, dated October 7, 2013.

 

Janitorial Services

 

Agreement between ISS Facility Services, Contractor, and Knightsbridge Realty
L.L.C., Owner, dated December 23, 2013.

 

Day Porter

 

Agreement between ISS Facility Services, Contractor, and Knightsbridge Realty
L.L.C., Owner, dated December 23, 2013.

 

Pest Control

 

Agreement between Cooper Pest Solutions, Contractor, and Knightsbridge Realty
L.L.C., Owner, dated January 8, 2013. [Renewal, dated January 10, 2014 has
already been executed]

 

Water Treatment

 

Agreement between Ashland Hercules Water Technologies, Contractor, and
Knightsbridge Realty L.L.C., Owner, dated February 17, 2012.

 

Window Cleaning

 

Agreement between Champion Building Services, Contractor, and Knightsbridge
Realty L.L.C., Owner, dated January 31, 2013.

 

Buildings 3&4, 5, and 6

 

Canada Goose Control

 

Agreement between Geese Be Gone, Contractor, and Knightsbridge Realty L.L.C.,
Owner, dated October 9, 2013.

 

EXHIBIT E

 

--------------------------------------------------------------------------------

 

Card Access Systen (DSX)

 

Agreement between BH Security, Contractor, and Knightsbridge Realty L.L.C.,
Owner, dated March 13, 2013.

 

Exterior Landscape

 

Agreement between Corvelli Brothers, Inc., Contractor, and Knightsbridge Realty
L.L.C., Owner, dated October 9, 2013.

 

Gym Equipment Maintenance

 

Agreement between Fitness Lifestyles, Contractor, and Knightsbridge Realty
L.L.C., Owner, dated June 24, 2013.

 

Guard Service

 

Agreement between U.S. Security Associates, Inc., Contractor, and Knightsbridge
Realty L.L.C., Owner, dated January 9, 2013.

 

Preventative Maintenance - Gym (HVAC)

 

Agreement between Benmar Air Conditioning, Contractor, and Knightsbridge Realty
L.L.C., Owner, dated October 7, 2013.

 

Scavenger

 

Agreement between J Pyskaty Disposable Inc., Contractor, and Knightsbridge
Realty L.L.C., Owner, dated December 2, 2013.

 

Snow Removal

 

Agreement between Artic Management LLC, Contractor, and Knightsbridge Realty
L.L.C., Owner, dated October 24, 2013.

 

Electric Supply Contract

 

Base Agreement for the Purchase and Sale of Electricity between Mack-Cali
Affiliates and Entities as Named as Owner on Schedule 1 [Missing], Customer, and
Hess Corporation, Seller,, dated March 23, 2009.

 

·                  Amendment to Base Agreement for the Purchase and Sale of
Electricity, dated March 23, 2009, between Mack-Cali Affiliates and Entities as
Named as Owner on Schedule 1 [Missing], Customer, and Hess Corporation, Seller,
dated March 25, 2009.

·                  Letter from Hess Corporation Regarding Base Agreement for the
Purchase and Sale of Electricity, dated March 23, 2009, between Mack-Cali
Affiliates and Entities as Named as Owner on Schedule 1 [Missing], Customer, and
Hess Corporation, Seller, dated July 1, 2009.

·                  Letter Agreement between Mack-Cali Realty Corporation and
Hess Corporation regarding Base Agreement for the Purchase and Sale of
Electricity, dated March 23, 2009, between Mack-Cali Affiliates and Entities as
Named as Owner on Schedule 1 [Missing], Customer, and Hess Corporation, Seller,
dated July 10, 2009.

·                  Second Amendment to Base Agreement for the Purchase and Sale
of Electricity, dated March 23, 2009, between Mack-Cali Affiliates and Entities
as Named as Owner on Schedule 1 [Missing], Customer, and Hess Corporation,
Seller, dated January 24, 2011.

 

EXHIBIT E

 

--------------------------------------------------------------------------------

 

·                  Electricity Transaction Confirmation between Mack-Cali
Affiliates and Entities Named as Owner as Set Forth in Schedule 1, Customer, and
Hess Corporation, Seller, dated April 3, 2013.

 

EXHIBIT E

 

--------------------------------------------------------------------------------

 

EXHIBIT F

 

LEASE SCHEDULE

 

Aecom Technology Corporation

 

Lease between Knightsbridge Realty L.L.C., Lessor and DMJM+Harris, Inc., Lessee
dated May 29, 2008.

 

·                  First Amendment to Lease between Knightsbridge Realty L.L.C.,
Lessor and DMJM+Harris, Inc., Lessee dated October 21, 2008.

·                  Certificate of Amendment of Certification of Incorporation
dated October 20, 2008.

·                  Second Amendment to Lease between Knightsbridge Realty
L.L.C., Lessor and Aecom Technology Corporation, successor in interest to
DMJM+Harris, Inc., Lessee dated December 5, 2012.

 

AT&T Corp.

 

Lease Agreement between Knightsbridge Realty L.L.C., Landlord and AT&T Corp.,
Tenant dated June 1, 2004.

 

·                  Notice to extend from AT&T Corp., Tenant to Knightsbridge
Realty, L.L.C., Landlord dated August 19, 2004.

·                  License Agreement between Knightsbridge Realty L.L.C.,
Licensor and MCI Metro Access Transmission Services L.L.C., Licensee dated
October 30, 2006.

·                  First Amendment to Lease between Knightsbridge Realty L.L.C.,
Landlord and AT&T Corp., Tenant, dated June 23, 2010

·                  Second Amendment to Lease between Knightsbridge Realty
L.L.C., Landlord and AT&T Corp., Tenant dated February 15, 2011.

·                  Third Amendment to Lease between Knightsbridge Realty L.L.C.,
Landlord and AT&T Corp., Tenant dated August 22, 2013.

 

Bistro to Go, LLC

 

License Agreement between Knightsbridge Realty L.L.C., Licensor and Bistro to
Go, LLC, Licensee dated March 28, 2012.

 

Cablevision Lightpath, Inc.

 

Telecom License Agreement between Knightsbridge Realty L.L.C., Owner and
Cablevision Lightpath, Inc., Provider executed January 4, 2005.

 

·                  Notice from Cablevision Lightpath, Inc., Provider to
Knightsbridge Realty L.L.C., Owner of exercise of renewal option dated
January 5, 2010.

 

CSC TKR, LLC

 

Lease between Knightsbridge Realty L.L.C., Lessor and CSC TKR, Inc., Lessee
dated June 20, 2007.

 

·                  Commencement Date Agreement dated December 10, 2008.

·                  Certificate of Conversion of a Corporation to a Limited
Liability Company dated June 24, 2009.

 

EXHIBIT F

 

--------------------------------------------------------------------------------

 

Federal Express Corporation

 

FedEx Placement Agreement between Federal Express Corporation and Knightsbridge
Realty L.L.C. dated January 24, 2008.

 

Level 3 Communications, LLC

 

Telecom License Agreement between Knightsbridge Realty L.L.C., Owner and TelCove
Investment, LLC, Provider dated April 24, 2006.

 

·                  First Amendment to Telecom License Agreement between
Knightsbridge Realty L.L.C., Owner and Level 3 Communications, LLC, successor in
interest to TelCove Investments, Inc., Provider dated February 28, 2011.

 

Office Media Network, Inc.

 

Property Service Agreement between Knightsbridge Realty L.L.C., Subscriber and
Office Media Network, Inc., Service Provider dated September 5, 2007.

 

Paychex North America, Inc.

 

Standard Office Lease between Knightsbridge Realty L.L.C., Landlord and Paychex
North America, Inc., Tenant dated December 12, 2005.

 

·                  First Amendment to Lease between Knightsbridge Realty L.L.C.,
Landlord and Paychex North America, Inc., Tenant dated September 20, 2006.

·                  Second Amendment to Lease between Knightsbridge Realty
L.L.C., Landlord and Paychex North America, Inc., Tenant dated February 13,
2013.

 

Qualcare Alliance Networks, Inc.

 

Lease between Knightsbridge Realty L.L.C., Lessor and Qualcare Alliance
Networks, Inc., Lessee dated September 29, 2005.

 

·                  First Amendment to Lease between Knightsbridge Realty L.L.C.,
Lessor and Qualcare Alliance Networks, Inc., Lessee dated December 29, 2005.

·                  Second Amendment to Lease between Knightsbridge Realty
L.L.C., Lessor and Qualcare Alliance Networks, Inc., Lessee dated December 12,
2006.

·                  Lessor’s Subordination between Knightsbridge Realty L.L.C.,
Lessor, Qualcare Alliance Networks, Inc., Borrower and TD Bank, N.A., Secured
Party dated January 26, 2009.

·                  Third Amendment to Lease between Knightsbridge Realty L.L.C.,
Lessor and Qualcare Alliance Networks, Inc., Lessee dated October 26, 2009.

·                  Landlord’s Subordination between Knightsbridge Realty L.L.C.,
Lessor, Qualcare Alliance Networks, Inc., Borrower and TD Equipment
Finance, Inc. dated March 23, 2010.

·                  Fourth Amendment to Lease between Knightsbridge Realty
L.L.C., Lessor and Qualcare Alliance Networks, Inc., Lessee dated November 10,
2011.

·                  Fifth Amendment to Lease between Knightsbridge Realty L.L.C.,
Lessor and Qualcare Alliance Networks, Inc., Lessee dated December 16, 2011.

·                  Sixth Amendment to Lease between Knightsbridge Realty L.L.C.,
Lessor and Qualcare Alliance Networks, Inc., Lessee dated April 25, 2012.

·                  Standard Form of License Agreement between Knightsbridge
Realty L.L.C., Licensor and Qualcare Alliance Networks, Inc., Licensee dated
December 12, 2013.

 

EXHIBIT F

 

--------------------------------------------------------------------------------

 

RGN-Piscataway I, LLC

 

Lease between Knightsbridge Realty L.L.C., Lessor and RGN-Piscataway I, LLC,
Lessee dated September 28, 2012

 

·                  Guaranty of Lease (undated) from HQ Global Workplaces, LLC,
Guarantor, in favor of Knightsbridge Realty L.L.C., Lessor.

·                  Commencement Date Agreement between Knightsbridge Realty
L.L.C., Lessor and RGN-Piscataway I, LLC, Lessee dated May 8, 2013.

 

Supermedia Sales, Inc.

 

Lease between Knightsbridge Realty L.L.C., Lessor and Verizon Information
Services, Inc., Lessee dated June 30, 2005.

 

·                  Amendment to the Amended and Restated Statement of
Partnership for Verizon Directories Sales — East Co. dated October 18, 2006.

·                  Amendment to the Amended and Restated Statement of
Partnership for Idearc Media Sales-East Co. dated January 4, 2010.

·                  First Amendment to Lease between Knightsbridge Realty L.L.C.,
Lessor and Supermedia Sales — East Co. (f/k/a Idearc Media Sales-East Co.)
successor in interest to Verizon Information Services, Inc., Lessee dated
December 30, 2010.

·                  Certificate of Merger dated December 14, 2010.

 

Tollgrade Communications Inc.

 

Lease between Knightsbridge Realty L.L.C., Lessor and Tollgrade Communications
Inc., Lessee dated November 27, 2006.

 

·                  First Amendment to Lease between Knightsbridge Realty L.L.C.,
Lessor and Tollgrade Communications Inc., Lessee dated March 8, 2007.

·                  Second Amendment to Lease between Knightsbridge Realty
L.L.C., Lessor and Tollgrade Communications Inc., Lessee dated March 30, 2007.

·                  Third Amendment to Lease between Knightsbridge Realty L.L.C.,
Lessor and Tollgrade Communications Inc., Lessee dated December 8, 2011.

·                  Amended and Restated Third Amendment to Lease between
Knightsbridge Realty L.L.C., Lessor and Tollgrade Communications Inc., Lessee
dated January 31, 2012.

 

United Parcel Service, Inc.

 

UPS Drop Box Agreement between Knightsbridge Realty L.L.C., Owner and United
Parcel Service, Inc. dated November 1, 2007.

 

EXHIBIT F

 

--------------------------------------------------------------------------------

 

EXHIBIT G

 

TENANT ESTOPPEL CERTIFICATE

 

FORM

 

[Letterhead of Tenant]

 

[Date]

 

To:          [Purchaser name and address]

 

[Lender name and address]

 

Re:          Lease dated
                                                                  , with
amendments dated                                            ( together with all
amendments and modifications thereto, the “Lease”), between
                                                        , as landlord, and
                                                                                              
(“Tenant”) (the landlord thereunder from time to time being referred to herein
as “Landlord”), covering  approximately                                square
feet of space (the “Leased Premises”) in a building located at
                                                          , and commonly known
as

 

The undersigned Tenant hereby ratifies the Lease and agrees and certifies as
follows:

 

1.             That attached hereto as “Exhibit A” is a true, correct and
complete copy of the Lease, together with all amendments thereto, which Lease is
in full force and effect and has not been modified, supplemented or amended in
any way except as set forth in “Exhibit A.”  The Leased Premises have not been
sublet in whole or in part, except
                                                  , and the Lease has not been
assigned or encumbered in whole or in part, whether conditionally, collaterally
or otherwise, except                                                 .

 

2.             Tenant has accepted possession of the Leased Premises and is
presently in occupancy of the Leased Premises.  The initial term of the Lease
commenced on                               , and the current term of the Lease
will expire on                                                           .  The
Lease provides     [  ] additional successive extensions for a period of
        [  ] year[s ] each.  The extension options for the following period[s]
has/have been exercised:                       .

 

3.             Tenant began paying rent on
                                          .  Tenant is obligated to pay fixed or
base rent under the Lease in the annual amount of
$                                , payable in monthly installments of
$                          .  No rent under the Lease has been paid more than
one month in advance, and no other sums have been deposited with Landlord other
than $                                 deposited as security under the Lease. 
Tenant is entitled to no rent concessions or free rent.

 

EXHIBIT G

 

--------------------------------------------------------------------------------

 

4.             Tenant is currently paying estimated payments of additional rent
of $                     on account of real estate taxes, insurance and common
area maintenance expenses. [Select correct alternative A Tenant pays its full
proportionate share of real estate taxes, insurance and common area maintenance
expenses OR B Tenant pays Tenant’s proportionate share of the increase in real
estate taxes, common maintenance expenses and insurance over the [base year/base
amount] OR [                                              .]

 

5.             All conditions and obligations under the Lease to be satisfied or
performed, or to have been satisfied or performed, by Landlord as of the date
hereof have been fully satisfied or performed, including any and all conditions
and obligations of Landlord relating to completion of tenant improvements and
making the Leased Premises ready for occupancy by Tenant.

 

6.             There exist no defenses to enforcement of the Lease by Landlord,
nor any rights or claims to offset with respect to rent payable under the terms
of the Lease except as may be set forth in “Exhibit A”.  To the best of Tenant’s
knowledge, neither Landlord nor Tenant is in default under the Lease or in
breach of its obligations thereunder, and no event has occurred or situation
exists which would with the passage of time and/or the giving of notice,
constitute a default or an event of default by the Tenant under the Lease.

 

7.             Tenant has no purchase options under the Lease or any other right
or option to purchase the real property and/or improvements, or a part thereof,
on which the demised premises are located.

 

8.             That as of this date there are no actions, whether voluntary or
otherwise, pending against the Tenant or any guarantor of the Lease under the
bankruptcy or insolvency laws of the United States or any state thereof.

 

9.             That to the best of the Tenant’s knowledge, no hazardous wastes
have been generated, treated, stored or disposed of, by or on behalf of the
Tenant or anyone else on the Leased Premises except for those that are customary
in connection with typical office uses, and any such generation, treatment,
storage and/or disposal has been in accordance with all applicable environmental
laws.

 

The agreements and certifications set forth herein are made with the knowledge
and intent that Purchaser and Lender will rely on them, and shall be binding
upon the successors and assigns of Tenant.

 

 

[TENANT]

 

 

 

By

 

 

Name:

 

Title:

 

EXHIBIT G

 

--------------------------------------------------------------------------------

 

 

EXHIBIT H

 

SUITS & PROCEEDINGS

 

NONE

 

EXHIBIT H

 

--------------------------------------------------------------------------------

 

EXHIBIT I

 

CERTIFICATE OF NON-FOREIGN STATUS

 

Section 1445 of the Internal Revenue Code of 1986, as amended (the “Code”),
provides that under specified circumstances, a transferee of a United States
real property interest must withhold tax if the transferor is a foreign person. 
For United States tax purposes (including Section 1445), the owner of a
disregarded entity (which has legal title to a United States real property
interest under local law) will be the transferor of the real property interest
and not the disregarded entity.  To inform                            (the
“Transferee”), that withholding of tax is not required upon the disposition of a
United States real property interest by                            (the
“Transferor”), the undersigned hereby certifies the following:

 

1.             The Transferor is not a foreign corporation, foreign partnership,
foreign trust or foreign estate (as those terms are defined in the Code and
Income Tax Regulations).

 

2.             The Transferor is not a disregarded entity as defined in
Section 1.1445-2(b)(2)(iii) of the United States Treasury Regulations.

 

3.             The Transferor’s United States taxpayer identification number is
                                        .

 

4.             The Transferor’s office address is
                                                                            .

 

The Transferor understands that this certification may be disclosed to the
Internal Revenue Service by the Transferee and that any false statement
contained herein could be punished by fine, imprisonment or both.

 

Under penalties of perjury, I declare that I have examined this certification
and, to the best of my knowledge and belief, it is true, correct and complete,
and I further declare that I have authority to sign this document on behalf of
the Transferor.

 

 

Date:                                         , 2014

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

EXHIBIT I

 

--------------------------------------------------------------------------------

 

EXHIBIT J

 

MAJOR TENANTS

 

Aecom Technology Corporation

 

AT&T Corp.

 

CSC TKR, LLC

 

Paychex North America, Inc.

 

Qualcare Alliance Networks, Inc.

 

RGN-Piscataway I, LLC

 

Supermedia Sales, Inc.

 

EXHIBIT J

 

--------------------------------------------------------------------------------

 

EXHIBIT K

 

ARREARAGE SCHEDULE

 

MACK - CALI  REALTY  CORPORATION

 

OPENAR  -  OPEN  A/R  LIST  -  RUN  ON:  02/20/14  -  AGING  BY:  DUE  DATE  -  AS  OF:  02/20/14  -  CONSIDERING:  DATE  IN

 

PROPERTY:  K3      -  30  KNIGHTSBRIDGE  BUILDING  3&4

 

 

 

CHARGE CODE

 

TOTAL OPEN

 

0-30 DAYS

 

31-60 DAYS

 

61-90 DAYS

 

OVER 90 DAYS

 

TENANT: K3 /ATT - AT&T CORP.

 

 

 

 

 

 

 

 

 

 

 

 

 

LEASE:

 

06/01/04-12/31/14

 

 

 

 

 

 

 

 

 

 

 

 

 

TEL:

 

(908) 234-3688

 

 

 

 

 

 

 

 

 

 

 

 

 

RENT:

 

344,791.67

 

 

 

 

 

 

 

 

 

 

 

 

 

SEC:

 

0.00

 

 

 

 

 

 

 

 

 

 

 

 

 

FLAGS:

 

NONE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RR-RENT

 

27.39

 

29.16

 

0.00

 

0.00

 

-1.77

 

 

 

NG-NONESCAL GENBLD

 

1,445.12

 

0.00

 

0.00

 

0.00

 

1,445.12

 

 

 

EM-ELEC SUB METER

 

284,028.95

 

0.00

 

284,028.95

 

0.00

 

0.00

 

TENANT TOTALS:

 

 

 

285,501.46

 

29.16

 

284,028.95

 

0.00

 

1,443.35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PROPERTY TOTALS:

 

 

 

285,501.46

 

29.16

 

284,028.95

 

0.00

 

1,443.35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PROPERTY CHARGE CODE SUMMARY

 

 

EM-ELEC SUB METER

 

284,028.95

 

0.00

 

284,028.95

 

0.00

 

0.00

 

 

 

NG-NONESCAL GENBLD

 

1,445.12

 

0.00

 

0.00

 

0.00

 

1,445.12

 

 

 

RR-RENT

 

27.39

 

29.16

 

0.00

 

0.00

 

-1.77

 

PROPERTY TOTALS:

 

 

 

285,501.46

 

29.16

 

284,028.95

 

0.00

 

1,443.35

 

 

EXHIBIT K

--------------------------------------------------------------------------------

 

MACK - CAL  REALTY  CORPORATION

 

OPENAR  -  OPEN  A/R  LIST  -  RUN  ON:  02/20/14  -  AGING  BY:  DUE  DATE  - 
AS  OF:  02/20/14  -CONSIDERING:  DATE  IN

 

PROPERTY:  KF      -  30  KNIGHTSBRIDGE  BUILDING  5

 

 

 

CHARGE CODE

 

TOTAL OPEN

 

0-30 DAYS

 

31-60 DAYS

 

61-90 DAYS

 

OVER 90 DAYS

 

TENANT: KF /CSC - CSC TKR LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

LEASE:

09/27/07-09/30/18

 

 

 

 

 

 

 

 

 

 

 

 

 

TEL:

(516) 803-1728

 

 

 

 

 

 

 

 

 

 

 

 

 

RENT:

106,875.00

 

 

 

 

 

 

 

 

 

 

 

 

 

SEC:

0.00

 

 

 

 

 

 

 

 

 

 

 

 

 

FLAGS:

NONE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EM-ELEC SUB METER

 

20,356.19

 

10,440.01

 

0.00

 

0.00

 

9,916.18

 

 

 

SE-ELECTRIC SURVEY

 

60.00

 

30.00

 

0.00

 

0.00

 

30.00

 

 

 

RR-RENT

 

-5,547.80

 

-5,547.80

 

0.00

 

0.00

 

0.00

 

TENANT TOTALS:

 

 

 

14,868.39

 

4,922.21

 

0.00

 

0.00

 

9,946.18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TENANT: KF /DMJ - AECOM TECHNOLOGY CORPORATION

 

 

 

 

 

 

 

 

 

 

 

 

 

LEASE:

09/01/08-08/31/18

 

 

 

 

 

 

 

 

 

 

 

 

 

TEL:

(732) 564-3235

 

 

 

 

 

 

 

 

 

 

 

 

 

RENT:

111,847.50

 

 

 

 

 

 

 

 

 

 

 

 

 

SEC:

0.00

 

 

 

 

 

 

 

 

 

 

 

 

 

FLAGS:

NONE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RR-RENT

 

-5,600.06

 

0.00

 

0.00

 

0.00

 

-5,600.06

 

 

 

EM-ELEC SUB METER

 

10,316.07

 

10,316.07

 

0.00

 

0.00

 

0.00

 

 

 

SE-ELECTRIC SURVEY

 

270.00

 

270.00

 

0.00

 

0.00

 

0.00

 

TENANT TOTALS:

 

 

 

4,986.01

 

10,586.07

 

0.00

 

0.00

 

-5,600.06

 

TENANT: KF /DMJ1 - AECOM TECHNOLOGY CORPORATION 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LEASE:

11/01/13-08/31/23

 

 

 

 

 

 

 

 

 

 

 

 

 

TEL:

(732) 564-3235

 

 

 

 

 

 

 

 

 

 

 

 

 

RENT:

17,390.00

 

 

 

 

 

 

 

 

 

 

 

 

 

SEC:

0.00

 

 

 

 

 

 

 

 

 

 

 

 

 

FLAGS:

LS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NB-NONESCAL BULBS

 

129.50

 

0.00

 

129.50

 

0.00

 

0.00

 

TENANT TOTALS:

 

 

 

129.50

 

0.00

 

129.50

 

0.00

 

0.00

 

TENANT: KF /QUA2 - QUALCARE ALLIANCE NETWORKS 

 

 

 

 

 

 

 

 

 

 

 

 

 

LEASE:

06/01/06-05/31/21

 

 

 

 

 

 

 

 

 

 

 

 

 

TEL:

(732) 562-7849

 

 

 

 

 

 

 

 

 

 

 

 

 

RENT:

137,176.00

 

 

 

 

 

 

 

 

 

 

 

 

 

SEC:

1,440,000.00

 

 

 

 

 

 

 

 

 

 

 

 

 

FLAGS:

NONE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AS-ACCESS CARD/KEY

 

504.85

 

0.00

 

504.85

 

0.00

 

0.00

 

 

 

NO-NONESCAL OTHER

 

975.84

 

0.00

 

975.84

 

0.00

 

0.00

 

 

 

OT-OVERTIME HVAC

 

712.50

 

450.00

 

262.50

 

0.00

 

0.00

 

 

 

RR-RENT

 

-363.05

 

-363.05

 

0.00

 

0.00

 

0.00

 

 

 

NB-NONESCAL BULBS

 

105.00

 

105.00

 

0.00

 

0.00

 

0.00

 

 

 

NX-NONESCAL EXTERM

 

300.80

 

300.80

 

0.00

 

0.00

 

0.00

 

 

 

EM-ELEC SUB METER

 

10,047.47

 

10,047.47

 

0.00

 

0.00

 

0.00

 

 

 

SE-ELECTRIC SURVEY

 

240.00

 

240.00

 

0.00

 

0.00

 

0.00

 

TENANT TOTALS:

 

 

 

12,523.41

 

10,780.22

 

1,743.19

 

0.00

 

0.00

 

 

EXHIBIT K

 

--------------------------------------------------------------------------------

 

TENANT: KF /RGN - RGN-PISCATAWAY I LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

LEASE:

04/26/13-10/31/24

 

 

 

 

 

 

 

 

 

 

 

 

 

TEL:

NONE

 

 

 

 

 

 

 

 

 

 

 

 

 

RENT:

13,573.00

 

 

 

 

 

 

 

 

 

 

 

 

 

SEC:

48,862.00

 

 

 

 

 

 

 

 

 

 

 

 

 

FLAGS:

NONE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EM-ELEC SUB METER

 

920.56

 

476.84

 

0.00

 

0.00

 

443.72

 

 

 

SE-ELECTRIC SURVEY

 

360.00

 

120.00

 

0.00

 

0.00

 

240.00

 

 

 

NB-NONESCAL BULBS

 

34.00

 

0.00

 

34.00

 

0.00

 

0.00

 

TENANT TOTALS:

 

 

 

1,314.56

 

596.84

 

34.00

 

0.00

 

683.72

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TENANT: KF /VIS1 - SUPERMEDIA SALES INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

LEASE:

06/01/11-05/31/14

 

 

 

 

 

 

 

 

 

 

 

 

 

TEL:

(866) 847-1300

 

 

 

 

 

 

 

 

 

 

 

 

 

RENT:

22,452.50

 

 

 

 

 

 

 

 

 

 

 

 

 

SEC:

0.00

 

 

 

 

 

 

 

 

 

 

 

 

 

FLAGS:

NONE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AS-ACCESS CARD/KEY

 

15.00

 

0.00

 

0.00

 

0.00

 

15.00

 

 

 

E -ELECTRIC

 

1,089.72

 

0.00

 

1,089.72

 

0.00

 

0.00

 

 

 

IB-INSURANCE REIMB

 

51.34

 

0.00

 

51.34

 

0.00

 

0.00

 

 

 

OM-MONTHLY OPERATE

 

160.48

 

0.00

 

160.48

 

0.00

 

0.00

 

 

 

T -TAXES

 

236.18

 

0.00

 

236.18

 

0.00

 

0.00

 

 

 

UM-MONTHLY UTILITY

 

225.83

 

0.00

 

225.83

 

0.00

 

0.00

 

 

 

RR-RENT

 

-1,632.83

 

-481.98

 

-1,150.85

 

0.00

 

0.00

 

TENANT TOTALS:

 

 

 

145.72

 

-481.98

 

612.70

 

0.00

 

15.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PROPERTY TOTALS:

 

 

 

33,967.59

 

26,403.36

 

2,519.39

 

0.00

 

5,044.84

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PROPERTY CHARGE CODE SUMMARY

 

 

AS-ACCESS CARD/KEY

 

519.85

 

0.00

 

504.85

 

0.00

 

15.00

 

 

 

E -ELECTRIC

 

1,089.72

 

0.00

 

1,089.72

 

0.00

 

0.00

 

 

 

EM-ELEC SUB METER

 

41,640.29

 

31,280.39

 

0.00

 

0.00

 

10,359.90

 

 

 

IB-INSURANCE REIMB

 

51.34

 

0.00

 

51.34

 

0.00

 

0.00

 

 

 

NB-NONESCAL BULBS

 

268.50

 

105.00

 

163.50

 

0.00

 

0.00

 

 

 

NO-NONESCAL OTHER

 

975.84

 

0.00

 

975.84

 

0.00

 

0.00

 

 

 

NX-NONESCAL EXTERM

 

300.80

 

300.80

 

0.00

 

0.00

 

0.00

 

 

 

OM-MONTHLY OPERATE

 

160.48

 

0.00

 

160.48

 

0.00

 

0.00

 

 

 

OT-OVERTIME HVAC

 

712.50

 

450.00

 

262.50

 

0.00

 

0.00

 

 

 

RR-RENT

 

-13,143.74

 

-6,392.83

 

-1,150.85

 

0.00

 

-5,600.06

 

 

 

SE-ELECTRIC SURVEY

 

930.00

 

660.00

 

0.00

 

0.00

 

270.00

 

 

 

T -TAXES

 

236.18

 

0.00

 

236.18

 

0.00

 

0.00

 

 

 

UM-MONTHLY UTILITY

 

225.83

 

0.00

 

225.83

 

0.00

 

0.00

 

PROPERTY TOTALS:

 

 

 

33,967.59

 

26,403.36

 

2,519.39

 

0.00

 

5,044.84

 

 

EXHIBIT K

--------------------------------------------------------------------------------

 

MACK - CALI  REALTY  CORPORATION

 

OPENAR  -  OPEN  A/R  LIST  -  RUN  ON:  02/20/14  -  AGING  BY:  DUE  DATE  -  AS  OF:  02/20/14  -  CONSIDERING:  DATE  IN

 

PROPERTY:  KS      -  30  KNIGHTSBRIDGE  BUILDING  6

 

 

 

CHARGE CODE

 

TOTAL OPEN

 

0-30 DAYS

 

31-60 DAYS

 

61-90 DAYS

 

OVER 90 DAYS

 

TENANT: KS /BIS - BISTRO TO GO LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

LEASE:

 

04/01/12-03/31/14

 

 

 

 

 

 

 

 

 

 

 

 

 

TEL:

 

(732) 321-0694

 

 

 

 

 

 

 

 

 

 

 

 

 

RENT:

 

0.00

 

 

 

 

 

 

 

 

 

 

 

 

 

SEC:

 

0.00

 

 

 

 

 

 

 

 

 

 

 

 

 

FLAGS:

 

NONE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NO-NONESCAL OTHER

 

1,868.98

 

331.70

 

0.00

 

0.00

 

1,537.28

 

 

 

E -ELECTRIC

 

10,720.00

 

0.00

 

0.00

 

0.00

 

10,720.00

 

TENANT TOTALS:

 

 

 

12,588.98

 

331.70

 

0.00

 

0.00

 

12,257.28

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TENANT: KS /QUA - QUALCARE ALLIANCE NETWORKS 

 

 

 

 

 

 

 

 

 

 

 

 

 

LEASE:

 

03/30/12-05/31/21

 

 

 

 

 

 

 

 

 

 

 

 

 

TEL:

 

(732) 562-7849

 

 

 

 

 

 

 

 

 

 

 

 

 

RENT:

 

9,621.63

 

 

 

 

 

 

 

 

 

 

 

 

 

SEC:

 

0.00

 

 

 

 

 

 

 

 

 

 

 

 

 

FLAGS:

 

NONE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RR-RENT

 

-3.00

 

0.00

 

0.00

 

0.00

 

-3.00

 

 

 

SE-ELECTRIC SURVEY

 

90.00

 

30.00

 

0.00

 

30.00

 

30.00

 

 

 

EM-ELEC SUB METER

 

887.74

 

322.19

 

0.00

 

309.58

 

255.97

 

 

 

UM-MONTHLY UTILITY

 

-1,715.70

 

-1,715.70

 

0.00

 

0.00

 

0.00

 

TENANT TOTALS:

 

 

 

-740.96

 

-1,363.51

 

0.00

 

339.58

 

282.97

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TENANT: KS /TOL2 - TOLLGRADE COMMUNICATIONS INC. 

 

 

 

 

 

 

 

 

 

 

 

 

 

LEASE:

 

05/01/12-04/30/18

 

 

 

 

 

 

 

 

 

 

 

 

 

TEL:

 

(724) 720-1330

 

 

 

 

 

 

 

 

 

 

 

 

 

RENT:

 

10,323.33

 

 

 

 

 

 

 

 

 

 

 

 

 

SEC:

 

33,448.88

 

 

 

 

 

 

 

 

 

 

 

 

 

FLAGS:

 

LS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RR-RENT

 

-3,049.57

 

0.00

 

0.00

 

0.00

 

-3,049.57

 

 

 

OM-MONTHLY OPERATE

 

777.16

 

281.75

 

281.75

 

106.83

 

106.83

 

 

 

UM-MONTHLY UTILITY

 

184.70

 

154.94

 

0.00

 

14.88

 

14.88

 

 

 

IB-INSURANCE REIMB

 

51.54

 

25.77

 

25.77

 

0.00

 

0.00

 

 

 

T -TAXES

 

128.80

 

64.40

 

64.40

 

0.00

 

0.00

 

TENANT TOTALS:

 

 

 

-1,907.37

 

526.86

 

371.92

 

121.71

 

-2,927.86

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PROPERTY TOTALS:

 

 

 

9,940.65

 

-504.95

 

371.92

 

461.29

 

9,612.39

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PROPERTY CHARGE CODE SUMMARY

 

 

E -ELECTRIC

 

10,720.00

 

0.00

 

0.00

 

0.00

 

10,720.00

 

 

 

EM-ELEC SUB METER

 

887.74

 

322.19

 

0.00

 

309.58

 

255.97

 

 

 

IB-INSURANCE REIMB

 

51.54

 

25.77

 

25.77

 

0.00

 

0.00

 

 

 

NO-NONESCAL OTHER

 

1,868.98

 

331.70

 

0.00

 

0.00

 

1,537.28

 

 

 

OM-MONTHLY OPERATE

 

777.16

 

281.75

 

281.75

 

106.83

 

106.83

 

 

 

RR-RENT

 

-3,052.57

 

0.00

 

0.00

 

0.00

 

-3,052.57

 

 

 

SE-ELECTRIC SURVEY

 

90.00

 

30.00

 

0.00

 

30.00

 

30.00

 

 

 

T -TAXES

 

128.80

 

64.40

 

64.40

 

0.00

 

0.00

 

 

 

UM-MONTHLY UTILITY

 

-1,531.00

 

-1,560.76

 

0.00

 

14.88

 

14.88

 

PROPERTY TOTALS:

 

 

 

9,940.65

 

-504.95

 

371.92

 

461.29

 

9,612.39

 

 

EXHIBIT K

 

--------------------------------------------------------------------------------

 

EXHIBIT L

 

OPERATING AGREEMENT

 

OPERATING AGREEMENT

 

OF

[JOINT VENTURE]

 

 

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAVE THEY
BEEN REGISTERED WITH THE SECURITIES COMMISSION OF ANY STATE.  THESE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE OFFERED FOR SALE,
PLEDGED, HYPOTHECATED, SOLD OR TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS
AND CONDITIONS OF THIS AGREEMENT AND IN A TRANSACTION WHICH IS EITHER EXEMPT
FROM REGISTRATION UNDER SUCH ACTS OR PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACTS.

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

 

Page

 

 

SECTION 1                               CERTAIN DEFINITIONS

1

 

 

SECTION 2                               NAME; TERM

8

2.1.

 

Name

8

2.2.

 

Term

8

 

 

 

 

SECTION 3                               ORGANIZATION AND LOCATION

8

3.1.

 

Formation

8

3.2.

 

Principal Office

9

3.3.

 

Registered Office and Registered Agent

9

 

 

 

 

SECTION 4                               PURPOSE

9

 

 

SECTION 5                               MEMBER INFORMATION

9

5.1.

 

Generally

9

5.2.

 

No Fiduciary Obligations of Members

9

 

 

 

 

SECTION 6                               CONTRIBUTION TO CAPITAL AND STATUS OF
MEMBERS

9

6.1.

 

Initial Capital Contributions

9

6.2.

 

Additional Capital Contributions

9

6.3.

 

Limited Liability of a Member

10

6.4.

 

Capital Accounts

10

6.5.

 

Withdrawal and Return of Capital

11

6.6.

 

Interest on Capital

11

 

 

 

 

SECTION 7                               DISTRIBUTIONS TO MEMBERS

11

7.1.

 

Distributions

11

7.2.

 

Timing of Distributions

12

7.3.

 

Taxes Withheld

12

7.4.

 

Offset for MCG Liabilities Under the Purchase Agreement

13

 

 

 

 

SECTION 8                               ALLOCATION OF PROFITS AND LOSSES

13

8.1.

 

Net Profits and Net Losses

13

8.2.

 

Special Allocations

15

8.3.

 

Built-In Gain or Loss/Code Section 704(c) Tax Allocations

16

8.4.

 

Tax Allocations

17

 

 

 

 

SECTION 9                               MANAGEMENT OF THE COMPANY

17

9.1.

 

Powers and Duties of the Manager

17

9.2.

 

Other Activities

21

9.3.

 

Indemnification

21

9.4.

 

Agreements with, and Fees to, the Manager or its Affiliates

22

9.5.

 

REIT Provisions

22

9.6.

 

Loan Documents

24

 

i

--------------------------------------------------------------------------------

 

SECTION 10                        TRANSFERABILITY OF MEMBERSHIP INTERESTS

25

10.1.

 

Transfers

25

10.2.

 

Substitution of Assignees

25

10.3.

 

Compliance with Securities Laws

26

10.4.

 

Buy/Sell

26

10.5.

 

Listing Procedures

29

10.6.

 

Payments / Distributions in Connection with the Buy/Sell and Listing Procedures

29

 

 

 

 

SECTION 11                        TERMINATION OF THE COMPANY

30

11.1.

 

Dissolution

30

11.2.

 

Liquidation

31

 

 

 

 

SECTION 12                        COMPANY PROPERTY

32

12.1.

 

Bank Accounts

32

12.2.

 

Title to Company Property

32

 

 

 

 

SECTION 13                        BOOKS AND RECORDS: REPORTS

32

13.1.

 

Books and Records

32

13.2.

 

Accounting Method

32

13.3.

 

Reports

32

13.4.

 

Controversies with Internal Revenue Service

33

 

 

 

 

SECTION 14                        WAIVER OF PARTITION

33

 

 

SECTION 15                        GENERAL PROVISIONS

33

15.1.

 

Amendments

33

15.2.

 

Notices

33

15.3.

 

Governing Law

34

15.4.

 

Binding Nature of Agreement

34

15.5.

 

Validity

34

15.6.

 

Entire Agreement

34

15.7.

 

Indulgences, Etc

34

15.8.

 

Execution in Counterparts

35

15.9.

 

Interpretation

35

15.10.

 

Access; Confidentiality

35

15.11.

 

Equitable Relief

35

15.12.

 

Representations and Covenants by the Members

36

15.13.

 

No Third Party Beneficiaries

38

15.14.

 

Waiver of Trial by Jury

38

15.15.

 

Taxation as Partnership

38

 

 

 

 

Exhibit A — Schedule of Members

 

Exhibit B — Operating and Capital Budgets

 

Exhibit C — Purchase Agreement

 

 

ii

--------------------------------------------------------------------------------

 

OPERATING AGREEMENT

OF

[JOINT VENTURE]

 

THIS OPERATING AGREEMENT (this “Agreement”) is made and entered into as of
                                              , 2014, by and among [MACK-CALI
INVESTOR], a [STATE] [ENTITY], (“MCG”), [KEYSTONE INVESTOR], a Pennsylvania
limited liability company (the “Keystone Investor”), and [KEYSTONE MANAGER], a
Pennsylvania limited liability company (the “Manager”), and each other party
listed on Exhibit A as a member and such other persons as shall hereinafter
become members as hereinafter provided (each a “Member” and, collectively, the
“Members”).

 

BACKGROUND STATEMENT

 

WHEREAS, [JOINT VENTURE] (the “Company”) was formed by the Manager on [      ],
2014, by the filing of its Certificate of Organization with the Secretary of
State of the State of Delaware; and

 

WHEREAS, MCG has been admitted as a Member on the date hereof; and

 

WHEREAS, pursuant to this Agreement, the Members desire to set forth their
respective rights, duties and responsibilities with respect to the Company as
provided in this Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the undersigned hereby agree as follows:

 

ARTICLE XIX
CERTAIN DEFINITIONS

 

Capitalized terms used in this Agreement and not defined elsewhere herein shall
have the following meanings:

 

“Acceptable Terms” shall have the meaning set forth in Section 10.5.

 

“Act” means the Delaware Limited Liability Company Act (6 Del. C,
Section 18-101, et seq.), as amended from time to time (or any corresponding
provision of succeeding law).

 

“Adjusted Capital Account” means, with respect to any Member, the balance in
such Member’s Capital Account as of the end of the relevant Fiscal Year or other
period, after giving effect to the following adjustments:

 

(a)                                 credit to such Capital Account any amounts
which such Member is obligated to restore pursuant to Treasury Regulation
§1.704-1(b)(2)(iii)(c) or is deemed to be obligated to restore pursuant to the
penultimate sentences of Treasury Regulations §§1.704-2(g)(1) and 1.704-2(i)(5);
and

 

(b)                                 debit to such Capital Account the items
described in Treasury Regulations §§1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6).

 

The foregoing definition of Adjusted Capital Account is intended to comply with
the provisions of Treasury Regulations §1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.

 

“Affiliate” or “affiliate” of a Person means (i) any Person, directly or
indirectly controlling, controlled by or under common control with the specified
Person; (ii) any Person owning or

 

--------------------------------------------------------------------------------

 

controlling ten percent (10%) or more of the outstanding voting securities of
such specified Person; (iii) any officer, director, Member or trustee of such
specified Person; and (iv) if any Person who is an Affiliate is an officer,
director, Member or trustee of another Person, such other Person.  For purposes
of this definition, the term “controlling,” “controlled by,” or “under common
control with” shall mean the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract, or otherwise.

 

“Agreement” means this Operating Agreement as the same may be amended from time
to time.

 

“Approved Accountants” means either (i) the Company’s accountants that have been
approved or deemed approved in accordance with Section 9.1(d) as a Major
Decision or (ii), if the accountants referenced in clause (i) are unwilling or
unable to act as Approved Accountants, other accountants, which are independent
of both MCG and Keystone Property Group and their respective Affiliates, and
which are consented to by MCG and the Manager, such consent not to be
unreasonably withheld.

 

“Available Cash” means, for any period, the total annual cash gross receipts of
the Company during such period derived from all sources (including rent or
business interruption insurance and the net proceeds of any secured or unsecured
debt incurred by the Company), as reasonably determined by the Manager, during
such period, together with any amounts included in reserves or working capital
from prior periods which the Manager determines should be distributed, less
(i) the operating expenses of the Company paid during such period, (ii) any
increases in reserves (reasonably established by the Manager) during such
period; and (ii) repayment of all secured and unsecured Company debts.

 

“Book Value” or “book value” means, with respect to any asset, the adjusted
basis of that asset for federal income tax purposes, except as follows:

 

(a)                                 The initial Book Value of any asset
contributed by a Member to the Company will be the fair market value of the
asset on the date of the contribution, as reasonably determined by the Manager.

 

(b)                                 The Book Values of all assets will be
adjusted to equal the respective fair market values of the assets, as reasonably
determined by the Manager, as of (1) the acquisition of an additional interest
in the Company by any new or existing Member in exchange for more than a de
minimis capital contribution, (2) the distribution by the Company to a Member of
more than a de minimis amount of Company property as consideration for an
interest in the Company if an adjustment is necessary or appropriate to reflect
the relative economic interests of the Members in the Company, (3) the
liquidation of the Company within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g), and (4) the grant of an interest in the Company
(other than a de minimis interest) as consideration for the provision of
services to or for the benefit of the Company.

 

(c)                                  The Book Value of any asset distributed to
any Member will be the gross fair market value of the asset on the date of
distribution as reasonably determined by the Manager.

 

(d)                                 The Book Values of assets will be increased
or decreased to reflect any adjustment to the adjusted basis of the assets under
Code Section 734(b) or 743(b), but only to the extent that the adjustment is
taken into account in determining Capital Accounts under Regulations
Section 1.704-1(b)(2)(iv)(m), provided, that Book Values will not be adjusted
under this paragraph (d) to the extent that the Manager determines that an
adjustment under paragraph (b) above is

 

2

--------------------------------------------------------------------------------

 

necessary or appropriate in connection with a transaction that would otherwise
result in an adjustment under this paragraph (d).

 

(e)                                  After the Book Value of any asset has been
determined or adjusted under paragraph (a), (b) or (d) above, Book Value will be
adjusted by the depreciation, amortization or other cost recovery deductions
taken into account with respect to the asset for purposes of computing Net
Profits or Net Losses.

 

“Business Day” or “business day” means each day which is not a Saturday, Sunday
or legally recognized national public holiday or a legally recognized public
holiday in the Commonwealth of Pennsylvania or the State of [Connecticut / New
Jersey / New York].

 

“Buy/Sell Notice” shall have the meaning set forth in Section 10.4(b).

 

“Capital Account” shall have the meaning set forth in Section 6.4.

 

“Capital Contribution” means the amount of cash or the fair market value of
property actually contributed to the Company by a Member.  Capital Contributions
include, but may not be limited to, Class 1 Capital Contributions, Supplemental
Capital Contributions and MCG Class 2 Capital Contributions.

 

“Capital Contribution Account” means any or all of the Class 1 Capital
Contribution Account, the Supplemental Capital Contribution Account and/or the
MCG Class 2 Capital Contribution Account, as the context requires.

 

“Capital Event” means a refinancing, sale or other disposition of substantially
all of the assets of the Company, or any event resulting in the dissolution and
termination of the Company in accordance with Section 11.

 

“Certificate of Organization” means the Certificate of Organization of the
Company, as filed with the Secretary of State of the State of Delaware, as the
same may be amended from time to time.

 

“Class 1 Capital Contribution” shall mean the Capital Contribution made by a
Member to the Company pursuant to Section 6.1 on the date of this Agreement that
is designated as a “Class 1 Capital Contribution” on the Schedule of Members.(1)

 

“Class 1 Capital Contribution Account” means an account maintained for each
Member equal to (i) the Class 1 Capital Contribution actually made to the
Company by such Member pursuant to Section 6.1, less (ii) the aggregate
distributions to such Member pursuant to Section 7.1[(d)].(1)

 

“Class 1 Preferred Return” means a fifteen percent (15%) Internal Rate of Return
on a Member’s Class 1 Capital Contribution Account, calculated from the date
hereof.

 

“Class 1 Preferred Return Account” means an account maintained for each Member
equal to the Class 1 Preferred Return accrued for such Member less the aggregate
amount of distributions made to each Member pursuant to Section 7.1[(c)].

 

--------------------------------------------------------------------------------

(1)                                 NB: For the Taxter Projects, MCG will have
both a Class 1 Capital Contribution Account and an MCG Class 2 Capital
Contribution Account as follows: (i) Taxter Corporate Park — I , 555/565 Taxter
Road, Elmsford, NY - $5,900,000 Class 1 Capital Contribution and a $5,060,757
MCG Class 2 Capital Contribution; and (ii) Taxter Corporate Park — II, 570
Taxter Road, Elmsford, NY - $995,000 Class 1 Capital Contribution and a $44,243
MCG Class 2 Capital Contribution.

 

3

--------------------------------------------------------------------------------

 

“Code” means the Internal Revenue Code of 1986, as amended (and as may be
amended from time to time).

 

“Company” shall have the meaning set forth in the recitals.

 

“Company Minimum Gain” has the meaning set forth in Section 1.704-2(d) of the
Regulations for partnership minimum gain.  Subject to the foregoing, Company
Minimum Gain shall equal the amount of gain, if any, which would be recognized
by the Company with respect to each nonrecourse liability of the Company if the
Company were to transfer the Company’s property which is subject to such
nonrecourse liability in full satisfaction thereof.

 

“Damaged Party” shall have the meaning set forth in Section 7.4.

 

“Damages” shall have the meaning set forth in Section 7.4.

 

“Deposit” shall have the meaning set forth in Section 10.4(c).

 

“Election Notice” shall have the meaning set forth in Section 10.4(c).

 

“Fiscal Year” shall have the meaning set forth in Section 13.2.

 

“Initial Financing” means amounts borrowed by the Company or its subsidiary on
the date hereof and/or to be borrowed to finance the acquisition and, if
applicable, rehabilitation of the Project by the Company’s subsidiary that owns
the Project.

 

“Internal Rate of Return” or “IRR” will be calculated using the “XIRR”
spreadsheet function in Microsoft Excel, where values is an array of values with
contributions being negative values and distributions made to the Members
pursuant to Section 7 as positive values and the corresponding dates in the
array are the actual dates that contributions are made to the Company and
distributions are made from the Company, taking into account the amount and
timing.

 

“Listing Period” shall have the meaning set forth in Section 10.5.

 

“Major Decision” shall have the meaning set forth in Section 9.1(d).

 

“Manager” shall initially have the meaning set forth in the preamble of this
Agreement or any Person that replaces the Manager in accordance with this
Agreement.

 

“M-C Corp.” means Mack-Cali Realty Corporation, a Maryland corporation, which is
an affiliate of MCG.

 

“M-C LP” means Mack-Cali Realty, L.P., a Delaware limited partnership which is
an affiliate of MCG.

 

[THESE DEFINITIONS ARE FOR ASSETS WITH SUBORDINATED EQUITY]

 

[“MCG Class 2 Capital Contribution” shall mean the Capital Contribution made by
MCG to the Company pursuant to Section 6.1 on the date of this Agreement.(1)]

 

[“MCG Class 2 Capital Contribution Account” means an account maintained for MCG
equal to (i) the MCG Class 2 Capital Contribution actually made to the Company
by MCG pursuant to Section 6.1 less (ii) the aggregate distributions to MCG
pursuant to Section 7.1[(f)].(1)]

 

[“MCG Preferred Return” means a ten percent (10%) Internal Rate of Return on the
MCG Class 2 Capital Contribution Account, calculated from the date hereof.]

 

4

--------------------------------------------------------------------------------

 

[“MCG Preferred Return Account” means an account maintained for MCG equal to the
MCG Preferred Return accrued for MCG less the aggregate amount of distributions
made to MCG pursuant to Section 7.1[(e)].]

 

“Member Minimum Gain” means an amount, with respect to each Member Nonrecourse
Debt, equal to the Company Minimum Gain that would result if such Member
Nonrecourse Debt were treated as a Nonrecourse Liability.

 

“Member Nonrecourse Debt” has the meaning set forth in Section 1.704-2(b)(4) of
the Regulations for “partner nonrecourse debt”.

 

“Member Nonrecourse Deductions” has the meaning set forth in
Section 1.704-2(i) of the Regulations for “partner nonrecourse deductions”. 
Subject to the foregoing, the amount of Member Nonrecourse Deductions with
respect to a Member Nonrecourse Debt for a Company Fiscal Year equals the
excess, if any, of the net increase, if any, in the amount of Member Minimum
Gain attributable to such Member Nonrecourse Debt during that Fiscal Year over
the aggregate amount of any distribution during that Fiscal Year to the Member
that bears the economic risk of loss for such Member Nonrecourse Debt to the
extent such distributions are from the proceeds of such Member Nonrecourse Debt
and are allocable to an increase in Member Minimum Gain attributable to such
Member Nonrecourse Debt, determined in accordance with Section 1.704-2(i) of the
Regulations.

 

“Members” mean each party listed on Exhibit A as a Member and any other Person
admitted to the Company as a member pursuant to the terms of this Agreement.

 

“Membership Interest” means a Member’s entire interest in the Company including
such Member’s right to receive allocations and distributions pursuant to this
Agreement and the right to participate in the management of the business and
affairs of the Company in accordance with this Agreement, including the right to
vote on, consent to, or otherwise participate in any decision or action of or by
the Members granted pursuant to this Agreement.

 

“Net Profits” and “Net Losses” means, for each Fiscal Year or other period, an
amount equal to the Company’s net taxable loss or income, respectively, for such
year or period, determined in accordance with Section 703(a) of the Code, but
not including any gains or losses resulting from a Capital Event (and for this
purpose, all items of income, gain, loss, or reduction required to be stated
separately pursuant to Section 703(a)(1) of the Code shall be included in
taxable income or loss), with the following adjustments:

 

(a)           Any income of the Company that is exempt from federal income tax
and not otherwise taken into account in computing Net Profits or Net Losses
shall be added to such taxable income or loss;

 

(b)           Any expenditures of the Company described in
Section 705(a)(2)(B) of the Code or treated as 705(a)(2)(B) expenditures
pursuant to Regulation Section 1.704-1(b)(2)(iv)(i), and not otherwise taken
into account in computing Net Profits or Net Losses shall be subtracted from
such taxable income or loss;

 

(c)           In the event the book value of any Company asset is adjusted in
accordance with item (b) or (d) of the definition of “Book Value”, the amount of
such adjustment shall be taken into account as gain or loss from the disposition
of such asset for purposes of computing Net Profits or Net Losses;

 

5

--------------------------------------------------------------------------------

 

(d)           Gain or loss resulting from any disposition of Company property
with respect to which gain or loss is recognized for federal income tax purposes
shall be computed by reference to the book value of the property disposed of
notwithstanding that the adjusted tax basis of such property differs from its
book value;

 

(e)           In lieu of the depreciation, amortization, and other cost recovery
deductions taken into account in computing such taxable income or loss, whenever
the book value of an asset differs from its adjusted basis for federal income
tax purposes at the beginning of a Fiscal Year, depreciation, amortization or
other cost recovery deductions allowable with respect to an asset shall be an
amount which bears the same ratio to such beginning book value as the federal
income tax depreciation, amortization or other cost recovery deduction for such
year bears to such beginning adjusted tax basis; provided, however, that if the
adjusted basis for federal income taxes of an asset at the beginning of a year
is zero, depreciation, amortization or other cost recovery deductions shall be
determined by reference to the beginning book value of such asset using any
reasonable method selected by the Manager; and

 

(f)            Any items which are specially allocated pursuant to Section 8.2
shall not be taken into account in computing Net Profits or Net Losses.

 

“Nonrecourse Deductions” has the meaning set forth in Sections 1.704-2(b)(1) and
1.704-2(c) of the Regulations.  Subject to the preceding sentence, the amount of
Nonrecourse Deductions for a Company Fiscal Year equals the excess, if any, of
the net increase, if any, in the amount of Company Minimum Gain during that
Fiscal Year (determined under Section 1.704-2(d) of the Regulations) over the
aggregate amount of any distributions during that Fiscal Year of proceeds of a
Nonrecourse Liability that are allocable to an increase in Company Minimum Gain
( determined under Section 1.704-2(h) of the Regulations).

 

“Nonrecourse Liability” has the meaning set forth in Section 1.704-2(b)(3) of
the Regulations.

 

“Notifying Member” shall have the meaning set forth in Section 10.4(b).

 

“Percentage Interest” with respect to any Member as of any date, means the
aggregate Capital Contributions made to the Company by such Member divided by
the sum of the aggregate Capital Contributions made to the Company by all the
Members, expressed as a percentage.  The initial Percentage Interests of the
Members are as set forth on Exhibit A attached hereto.  The Percentage Interests
of the Members shall be adjusted from time to time as necessary, to reflect
Capital Contributions made by them.

 

“Person” means a natural person, or a corporation, association, limited
liability company, partnership, joint stock company, trust or unincorporated
organization or other entity that has independent legal status.

 

“Preferred Return” means either or both of the Class 1 Preferred Return, the MCG
Preferred Return and/or the Supplemental Preferred Return, as the context
requires.

 

“Prime Rate” means the “prime rate” as published in The Wall Street Journal
(Eastern Edition) under its “Money Rates” column and specified as “[t]he base
rate on corporate loans at large U.S. commercial banks.”  If The Wall Street
Journal (Eastern Edition) publishes more than one “Prime Rate” under its “Money
Rates” column, then the Prime Rate shall be the average of such rates.  If The
Wall Street Journal (Eastern Edition) is not published on a date when Prime Rate
is to be determined, then Prime Rate shall be the Prime Rate published on the
date which first precedes the date on which Prime Rate is to be determined.

 

6

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“Pro Rata” means, for a Member, (x) an amount equal to such Member’s unreturned
Capital Contributions plus the accrued and undistributed Preferred Return
thereon, divided by (y) the aggregate unreturned Capital Contributions plus the
aggregate accrued and undistributed Preferred Return thereon, of all Members.

 

“Project” means the operation, managing, renting, maintaining and development of
and, if applicable, selling or otherwise disposing of, the real property located
at:

 

[TO BE INCLUDED IN EACH JOINT VENTURE AGREEMENT AS APPLICABLE:

 

(a)           Taxter Corporate Park, 555/565 Taxter Road, Elmsford, NY;

 

(b)           Taxter Corporate Park 570 Taxter Road, Elmsford, NY;

 

(c)           Talleyrand Office Park, 200/220 White Plains Road, Tarrytown, NY;

 

(d)           17-17 Route 208 North, Fair Lawn, NJ;

 

(e)           30 Knightbridge Road, Piscataway, NJ;

 

(f)            412 Mt. Kemble Avenue, Morris Township, NJ;

 

(g)           470 Chestnut Ridge Road, Woodcliff Lake, NJ;

 

(h)           400 Chestnut Ridge Road, Woodcliff Lake, NJ;

 

(i)            530 Chestnut Ridge Road, Woodcliff Lake, NJ; and

 

(j)            Soundview Plaza, 1266 East Main Street, Stamford, CT]

 

including undertaking such activities through any subsidiary of the Company that
owns and/or manages the Project.

 

“Purchase Agreement” means the Agreement of Sale and Purchase, dated as of
February [    ], 2014, by and between the “Seller” named therein, which is an
Affiliate of Mack-Cali Realty Corporation, and the “Purchaser” named therein,
which is an Affiliates of Keystone Property Group.  A copy of the Purchase
Agreement is attached hereto as Exhibit C.

 

“Receiving Member” shall have the meaning set forth in Section 10.4(b).

 

“Regulations” means the Federal Income Tax Regulations, including Temporary
Regulations, promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).

 

“Regulatory Allocations” shall have the meaning set forth in Section 8.2(g).

 

“REIT” shall have the meaning set forth in Section 9.5(a).

 

“REIT Requirements” shall have the meaning set forth in Section 9.5(a).

 

“Reserves” means funds set aside or amounts allocated to reserves which shall be
maintained, in amounts reasonably determined by the Manager, to be appropriate
for (i) working capital and to pay taxes, insurance, debt service or other costs
or expenses incident to the ownership of the

 

7

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Company’s assets or operation of the Company’s business, including under any
financing, or (ii) capital expenses which have been approved by the Manager.

 

“Specified Valuation Amount” shall have the meaning set forth in
Section 10.4(b).

 

“Successor” shall have the meaning set forth in Section 11.1(c).

 

“Supplemental Capital Contribution(s)” shall mean the Capital Contributions made
by the Members to the Company pursuant to Section 6.2.

 

“Supplemental Capital Contribution Account” means an account maintained for each
Member equal to (i) the Supplemental Capital Contributions actually made to the
Company by such Member pursuant to Section 6.2, less (ii) the aggregate
distributions to such Member pursuant to Section 7.1[(b)].

 

“Supplemental Preferred Return” means a twelve percent (12%) Internal Rate of
Return on such Member’s Supplemental Capital Contribution Account, calculated
from the date hereof.

 

“Supplemental Preferred Return Account” means an account maintained for each
Member equal to the Supplemental Preferred Return accrued for such Member less
the aggregate amount of distributions made to each Member pursuant to
Section 7.1[(a)].

 

“Tax Payment Loan” shall have the meaning set forth in Section 7.3.

 

“30 Day Period” shall have the meaning set forth in Section 10.4(c).

 

“Transfer” shall mean, with respect to a Membership Interest, to sell, assign,
give, hypothecate, pledge, encumber or otherwise transfer such Membership
Interest.

 

“TRS” shall have the meaning set forth in Section 9.5(c).

 

“Withdrawal” shall have the meaning set forth in Section 11.1(a)(i).

 

“Withholding Tax Act” shall have the meaning set forth in Section 7.3.

 

ARTICLE XX
NAME; TERM

 

Section 20.1          Name.  The Members shall conduct the business of the
Company under the name “[JOINT VENTURE].”

 

Section 20.2          Term.  The term of the Company commenced on the date the
Certificate of Organization was filed with the Secretary of State of the State
of Delaware and shall continue in existence perpetually unless the Company is
dissolved and its affairs wound up in accordance with the Act or this Agreement.

 

ARTICLE XXI
ORGANIZATION AND LOCATION

 

Section 21.1          Formation; Foreign Qualification.  Pursuant to the
provisions of the Act, the Company was formed by filing the Certificate of
Organization with the Secretary of State of the State of Delaware on [      ],
2014.  The Manager shall register the Company and/or its subsidiaries to do
business in such other jurisdictions as is necessary to qualify the Company
and/or its subsidiaries to conduct their respective businesses in such other
jurisdictions.

 

8

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Section 21.2          Principal Office.  The principal office of the Company
shall be at [ADDRESS OF EACH PROPERTY], or such other location as the Manager
may determine with notice to the Members.

 

Section 21.3          Registered Office and Registered Agent.  The Company’s
registered agent and office in the State of Delaware shall be National
Registered Agents, Inc., 160 Greentree Drive, Suite 101, in the City of Dover,
County of Kent, Delaware 19904.  The registered office and registered agent may
be changed by the Manager from time to time in accordance with the Act and with
notice to the Members.

 

ARTICLE XXII
PURPOSE

 

The business of the Company shall be the operation, managing, renting,
maintaining and development of and, if applicable, selling or otherwise
disposing of, the Project, and engaging in all activities necessary, incidental,
or appropriate in connection therewith.

 

ARTICLE XXIII
MEMBER INFORMATION

 

Section 23.1          Generally.  The name, address, Capital Contributions and
Percentage Interest of each Member is as set forth on Exhibit A.

 

Section 23.2          No Fiduciary Obligations of Members. The Members expressly
agree that, with respect to decisions made or actions taken by a Member, such
Member shall not have any fiduciary duty whatsoever (to the extent permitted by
law) to the other Members or to any other Person and such Member may take
actions, grant consents or refuse to grant consents under this Agreement for the
sole benefit of the Member, as determined in its sole discretion.

 

ARTICLE XXIV
CONTRIBUTION TO CAPITAL AND STATUS OF MEMBERS

 

Section 24.1          Initial Capital Contributions.  The initial Class 1
Capital Contribution or MCG Class 2 Capital Contribution (as applicable) of each
Member, as of the date of this Agreement, is set forth on Exhibit A.

 

Section 24.2          Additional Capital Contributions.  If the Manager
determines that funds, in addition to those contributed pursuant to Section 6.1,
are necessary or appropriate in order to operate the business of the Company,
the Manager shall present such request to MCG as a Major Decision pursuant to
Section 9.1(d).  If the Manager’s request is approved as a Major Decision, then
the Manager may request that the Keystone Investor and/or MCG fund such amount
pursuant to this Section 6.2, in such amounts and in such percentages for each
Member as are determined pursuant to Section 9.1(d).  The approved amount shall
be funded within ten (10) days of written notice from the Manager (after the
amount is approved as a Major Decision) and shall be treated as a Supplemental
Capital Contribution for each funding Member for all purposes under this
Agreement.  For the purpose of clarity, no Member shall be obligated to make any
Supplemental Capital Contributions without its consent.

 

9

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Section 24.3          Limited Liability of a Member.  The Members, in their
capacity as such, shall not be liable for the debts, liabilities, contracts or
any other obligations of the Company.  Furthermore: (i) except as otherwise
provided for herein, the Members shall not be obligated to make additional
Capital Contributions to the capital of the Company; and (ii) no Member shall be
required to pay to any other Member or the Company any deficit or negative
balance which may exist from time to time in such Member’s Capital Account
(including upon and after dissolution of the Company).  The failure of the
Company to observe any formalities or requirements relating to the exercise of
its powers or management of its business or affairs under this Agreement or the
Act shall not be grounds for imposing personal liability on the Members for
liabilities of the Company.

 

Section 24.4          Capital Accounts.

 

(a)           A separate “Capital Account” shall be established and maintained
for each Member in accordance with the rules set forth in Section 1.704-l(b) of
the Regulations.  Subject to the foregoing, generally the Capital Account of
each Member shall be credited with the sum of (i) all cash and the Book Value of
any property (net of liabilities assumed by the Company and liabilities to which
such property is subject) contributed to the Company by such Member as provided
in this Agreement, (ii) all Net Profits of the Company allocated to such Member
pursuant to Section 8, (iii) all items of income and gain specially allocated to
such Member pursuant to Section 8.2 and (iv) all items of gain resulting from a
Capital Event, and shall be debited with the sum of (u) all Net Losses of the
Company allocated to such Member pursuant to Section 8, (v) such Member’s
distributive share of expenditures of the Company described in
Section 705(a)(2)(B) of the Code, (w) all items of expense and losses specially
allocated to such Member pursuant to Section 8.2, (x) all items of loss
resulting from a Capital Event and (y) all cash and the Book Value of any
property (net of liabilities assumed by such Member and the liabilities to which
such property is subject) distributed by the Company to such Member pursuant to
Section 7.  Any references in any Section or subsection of this Agreement to the
Capital Account of a Member shall be deemed to refer to such Capital Account as
the same may be credited or debited from time to time as set forth above.

 

(b)           The following additional rules shall apply in maintaining Capital
Accounts:

 

(i)            Amounts described in Section 709 of the Code (other than amounts
with respect to which an election is in effect under Section 709(b) of the Code)
shall be treated as described in Section 705(a)(2)(B) of the Code.

 

(ii)           In the case of a contribution to the Company of a promissory note
(other than a note that is readily tradable on an established securities
market), the Capital Account of the Member contributing such note shall not be
increased until (a) the Company makes a taxable disposition of such note, or
(b) principal payments are made on such note.

 

(iii)          If property is contributed to the Company, Capital Accounts shall
be adjusted in accordance with Treasury Regulation
Section 1.704-l(b)(2)(iv)(d) and 1.704-l(b)(2)(iv)(g).

 

10

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(iv)          If, in any Fiscal Year of the Company, the Company has in effect
an election under Section 754 of the Code, Capital Accounts shall be adjusted in
accordance with Treasury Regulation Section 1.704-l(b)(2)(iv)(m).

 

(c)           It is the intention of the Members to satisfy the Capital Account
maintenance requirements of Regulation Section 1.704-l(b)(2)(iv), and the
foregoing provisions defining Capital Accounts are intended to comply with such
provisions.  If the Manager determines that adjustments to Capital Accounts are
necessary to comply with such Regulations, then the adjustments shall be made,
provided it does not materially impact upon the manner in which property is
distributed to the Members in liquidation of the Company.

 

(d)           Except as may otherwise be provided in this Agreement, whenever it
is necessary to determine the Capital Account of a Member, the Capital Account
of such Member shall be determined after giving effect to all allocations and
distributions for transactions effected prior to the time as of which such
determination is to be made.  Any Member, including any substituted Member, who
shall acquire a Membership Interest or whose interest shall be increased by
means of a Transfer to him of all or part of the interest of another Member,
shall have a Capital Account which reflects such Transfer.

 

Section 24.5          Withdrawal and Return of Capital.  Although the Company
may make distributions to the Members from time to time in return of their
Capital Contributions, the Members shall not have the right to withdraw or
demand a return of any of their Capital Contributions or Capital Account without
the consent of all Members except upon dissolution or liquidation of the
Company.

 

Section 24.6          Interest on Capital.  Except as otherwise specifically
provided in this Agreement, no interest shall be payable on any Capital
Contributions made to the Company.

 

ARTICLE XXV
DISTRIBUTIONS TO MEMBERS

 

Section 25.1          Distributions.  Available Cash shall be paid or
distributed as follows:

 

[DISTRIBUTION WATERFALL FOR 30 KNIGHTBRIDGE ROAD AND 412 MT. KEMBLE PROPERTIES:]

 

(a)           First, to the Members, in proportion to their respective
Supplemental Preferred Return Account balances, until their Supplemental
Preferred Return Account balances are reduced to zero;

 

(b)           Second, to the Members, in proportion to their respective
Supplemental Capital Contribution Account balances, until their respective
Supplemental Capital Contribution Account balances are reduced to zero;

 

(c)           Third, to each Member until its Class 1 Preferred Return Account
balance has been reduced to zero;

 

11

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(d)           Fourth, to each Member until its Class 1 Capital Contribution
Account balance has been reduced to zero; and

 

(e)           Thereafter, (x) fifty percent (50%) to the Keystone Investor and
(y) fifty percent (50%) to MCG.

 

[DISTRIBUTION WATERFALL FOR ALL PROPERTIES OTHER THAN 30 KNIGHTBRIDGE ROAD AND
412 MT. KEMBLE:(1)]

 

First, to the Members, in proportion to their respective Supplemental Preferred
Return Account balances, until their Supplemental Preferred Return Account
balances are reduced to zero;

 

(f)            Second, to the Members, in proportion to their respective
Supplemental Capital Contribution Account balances, until their respective
Supplemental Capital Contribution Account balances are reduced to zero;

 

(g)           Third, to each Member until its Class 1 Preferred Return Account
balance has been reduced to zero;

 

(h)           Fourth, to each Member until its Class 1 Capital Contribution
Account balance has been reduced to zero;

 

(i)            Fifth, to MCG until its MCG Preferred Return Account balance has
been reduced to zero;

 

(j)            Sixth, to MCG until its MCG Class 2 Capital Contribution Account
balance has been reduced to zero; and

 

(k)           Thereafter, (x) fifty percent (50%) to the Keystone Investor and
(y) fifty percent (50%) to MCG.

 

Section 25.2          Timing of Distributions.  Distributions of Available Cash
shall be at such times and in such amounts as the Manager shall reasonably
determine; provided, that the Manager shall distribute Available Cash at least
once per calendar quarter unless the applicable credit agreement or loan
document to which the Company or its subsidiaries are a party prohibits such
distribution, in which case the Manager shall immediately distribute all amounts
that were not distributed on account of such prohibition as soon as permissible
under the applicable credit agreement or loan document.

 

Section 25.3          Taxes Withheld.  Unless treated as a Tax Payment Loan (as
hereinafter defined), any amount paid by the Company for or with respect to any
Member on account of any withholding tax or other tax payable with respect to
the income, profits or distributions of the Company pursuant to the Code, the
Regulations, or any state or local statute, regulation or ordinance requiring
such payment (a “Withholding Tax Act”) shall be treated as a distribution to
such Member for all purposes of this Agreement, consistent with the character or
source of the income, profits or cash which gave rise to the payment or
withholding obligation.  To the extent that the amount required to be remitted
by the Company under the Withholding Tax Act exceeds

 

12

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the amount then otherwise distributable to such Member, the excess shall
constitute a loan from the Company to such Member (a “Tax Payment Loan”) which
shall be payable upon demand and shall bear interest, from the date that the
Company makes the payment to the relevant taxing authority, at the Prime Rate
plus one percent (1.00%), compounded monthly.  The Manager shall give prompt
written notice to such Member of such loan.  So long as any Tax Payment Loan or
the interest thereon remains unpaid, the Company shall make future distributions
due to such Member under this Agreement by applying the amount of any such
distribution first to the payment of any unpaid interest on all Tax Payment
Loans of such Member and then to the repayment of the principal of all Tax
Payment Loans of such Member.  The Manager shall have the authority to take all
actions necessary to enable the Company to comply with the provisions of any
Withholding Tax Act applicable to the Company and to carry out the provisions of
this Section.  Nothing in this Section shall create any obligation on the
Manager to advance funds to the Company or to borrow funds from third parties in
order to make any payments on account of any liability of the Company under a
Withholding Tax Act.

 

Section 25.4          Offset for MCG Liabilities Under the Purchase Agreement. 
To the extent that the Keystone Investor or its Affiliates (each, a “Damaged
Party”) receive a decision by a court of competent jurisdiction, in a final
adjudication,  which  has determined that the Damaged Party has incurred any
claim, demand, controversy, dispute, cost, loss, damage, expense, judgment, or
loss (collectively, “Damages”), for which such Persons are entitled to
indemnification from MCG pursuant to the provisions of the Purchase Agreement,
the Manager may, in its sole discretion, withhold distributions from MCG and
instead pay them to the Damaged Party for application against the unpaid balance
remaining of such Damages.

 

ARTICLE XXVI
ALLOCATION OF PROFITS AND LOSSES

 

Section 26.1          Net Profits and Net Losses.

 

(a)           In General.  Net Profits and Net Losses of the Company shall be
determined and allocated with respect to each Fiscal Year or other period of the
Company as of the end of such year or other period.  An allocation to a Member
of a share of Net Profits and Net Losses shall be treated as an allocation of
the same share of each item of income, gain, loss and deduction that is taken
into account in computing Net Profits and Net Losses.  For purposes of applying
Section 8.1[(d) / (e)], after making the Special Allocations in Section 8.2 for
the Fiscal Year or other period, if any, a Member’s Capital Account balance
shall be deemed to be increased by such Member’s share of Company Minimum Gain
and Member Minimum Gain determined as of the end of such Fiscal Year or other
period, and such other amount a Member is deemed to be obligated to restore
under Treasury Regulation §1.704-1(b)(2)(iii)(c).

 

(b)           Allocations.  Net Profits or Net Losses for any Fiscal Year or
other period shall be allocated to the Members as follows:

 

(i)            Net Profits shall first be allocated to the Members in an amount
sufficient to reverse, on a cumulative basis, the cumulative amount of any Net
Losses (exclusive of any amounts previously offset against Net Profits)
allocated to the Members in the current and

 

13

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all prior Fiscal Years pursuant to Section 8.1(b)(iii), allocated to each Member
in the reverse order and in proportion to the allocation of such Net Losses to
such Member;

 

(ii)           Then, Net Profits shall be allocated to the Members in proportion
to the amounts actually received by each Member pursuant to
Section 7.1(a)-[(d) / (f)] for each Fiscal Year with respect to such Fiscal Year
until such time as distributions are made pursuant to Section 7.1[(e) / (g)] and
at that time fifty percent (50%) to the Keystone Investor and fifty percent
(50%) to MCG; provided, that, in the event that no amounts are actually
distributed pursuant to Section 7.1 in any Fiscal Year, Net Profits for such
Fiscal Year shall be allocated to the Members in the manner that such Net
Profits would have been allocated had an amount of cash equal to the Net Profits
for such Fiscal Year been distributed pursuant to Section 7.1 in such Fiscal
Year.

 

(iii)          Net Losses shall be allocated to the Members in reverse order in
which Net Profits were previously allocated pursuant to Section 8.1(b)(ii), and
thereafter, fifty percent (50%) to the Keystone Investor and fifty percent (50%)
to MCG.

 

(c)           Net Losses allocated to a Member pursuant to Section 8.1(b) shall
not exceed the maximum amount of Net Losses which can be so allocated without
causing any Member to have a deficit in his or her Adjusted Capital Account at
the end of any Fiscal Year or other period.  The portion of Net Losses that
would be allocated to a Member but for the limitation of the prior sentence
shall be allocated among the other Members having positive balances in their
Adjusted Capital Accounts in proportion to and to the extent of such positive
balances and, thereafter, in accordance with the Members’ respective economic
risk of loss with respect to any indebtedness to which the remaining Net Losses
(or an item thereof), if any, is attributable.

 

(d)           Gain and loss from a Capital Event shall be allocated (other than
a Capital Event that is a sale pursuant to Section 10.5):

 

(i)            first to those Members with Adjusted Capital Account deficits,
until all such Adjusted Capital Account balances are equal to zero;

 

(ii)           then, among all Members in the amount necessary for the Adjusted
Capital Account balances of each Member (as determined after a hypothetical
distribution of all cash proceeds in accordance with Section 7.1) to equal zero,
and

 

(iii)          thereafter, fifty percent (50%) to the Keystone Investor and
fifty percent (50%) to MCG;

 

provided, that, to the extent necessary to bring the Adjusted Capital Account
balances of the Members to equal zero in Section 8.1(d)(i) and
Section 8.1(d)(ii) of this Agreement, if there are insufficient gains from the
Capital Event, items of gross income shall be allocated as necessary to so
adjust the Adjusted Capital Account balances.

 

(e)           Gain and loss from a sale pursuant to Section 10.5 shall be
allocated:

 

14

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(i)            first to those Members with Adjusted Capital Account deficits,
until all such Adjusted Capital Account balances are equal to zero;

 

(ii)           then, among all Members in the amount necessary for the Adjusted
Capital Account balances of each Member (as determined after a hypothetical
distribution of all cash proceeds in accordance with Section 10.6) to equal
zero, and

 

(iii)          thereafter, on a Pro Rata basis to the Keystone Investor and to
MCG;

 

provided, that, to the extent necessary to bring the Adjusted Capital Account
balances of the Members to equal zero in Section 8.1(e)(i) and
Section 8.1(e)(ii) of this Agreement, if there are insufficient gains from the
Capital Event, items of gross income shall be allocated as necessary to so
adjust the Adjusted Capital Account balances.

 

Section 26.2          Special Allocations.  The following special allocations
shall be made in the following order:

 

(a)           Minimum Gain Chargeback.  Except as otherwise provided in
Section 1.704-2(f) of the Regulations, in the event there is a net decrease in
Company Minimum Gain during a Company taxable year, each Member shall be
allocated (before any other allocation is made pursuant to this Section 8) items
of income and gain for such year (and, if necessary, for subsequent years) equal
to that Member’s share of the net decrease in Company Minimum Gain.

 

(i)            The determination of a Member’s share of the net decrease in
Company Minimum Gain shall be determined in accordance with Regulation
Section 1.704-2(g).

 

(ii)           The items to be specially allocated to the Members in accordance
with this Section 8.2(a) shall be determined in accordance with Regulation
Section 1.704-2(f)(6).

 

(iii)          This Section 8.2(a) is intended to comply with the Minimum Gain
chargeback requirement set forth in Section 1.704-2(f) of the Regulations and
shall be interpreted consistently therewith.

 

(b)           Member Minimum Gain Chargeback:  Except as otherwise provided in
Section 1.704-2(i)(4), in the event there is a net decrease in Member Minimum
Gain during a Company taxable year, each Member who has a share of that Member
Minimum Gain as of the beginning of the year, to the extent required by
Regulation Section 1.704-2(i)(4) shall be specially allocated items of Company
income and gain for such year (and, if necessary, subsequent years) equal to
that Member’s share of the net decrease in Member Minimum Gain.  Allocations
pursuant to this subparagraph (b) shall be made in accordance with Regulation
Section 1.704-2(i)(4).  This Section 8.2(b) is intended to comply with the
requirement set forth in Regulation Section 1.704-2(i)(4) and shall be
interpreted consistently therewith.

 

(c)           Qualified Income Offset Allocation.  In the event any Member
unexpectedly receives any adjustments, allocations or distributions described in
Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5),
or 1.704-1(b)(2)(ii)(d)(6) which would cause the negative balance in such
Member’s Capital Account to exceed the sum of

 

15

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(i) his obligation to restore a Capital Account deficit upon liquidation of the
Company, plus (ii) his share of Company Minimum Gain determined pursuant to
Regulation Section 1.704-2(g)(1), plus (iii) such Member’s share of Member
Minimum Gain determined pursuant to Regulation Section 1.704-2(i)(5), items of
Company income and gain shall be specially allocated to such Member in an amount
and manner sufficient to eliminate such excess negative balance in his Capital
Account as quickly as possible.  This Section 8.2(c) is intended to comply with
the alternative test for economic effect set forth in Regulation
Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

 

(d)           Gross Income Allocation.  In the event any Member has a deficit
Capital Account at the end of any Company Fiscal Year which is in excess of the
sum of (i) any amounts such Member is obligated to restore pursuant to this
Agreement, plus (ii) such Member’s distributive share of Company Minimum Gain as
of such date determined pursuant to Regulations Section 1.704-2(g)(1), plus
(iii) such Member’s share of Member Minimum Gain determined pursuant to
Regulations Section 1.704-2(i)(5), each such Member shall be specially allocated
items of Company income and gain in the amount of such excess as quickly as
possible, provided that an allocation pursuant to this Section 8.2(d) shall be
made only if and to the extent that such Member would have a deficit Capital
Account in excess of such sum after all other allocations provided for in this
Section 8 have been made, except assuming that Section 8.2(c) and this
Section 8.2(d) were not contained in this Agreement.

 

(e)           Allocation of Nonrecourse Deductions.  Nonrecourse Deductions
shall be allocated to the Members in accordance with their respective Percentage
Interests.

 

(f)            Allocation of Member Nonrecourse Deductions.  Member Nonrecourse
Deductions  specially allocated to the Member who bears the economic risk of
loss with respect to the Member Nonrecourse Debt to which such Member
Nonrecourse Deductions are attributable in accordance with
Section 1.704-2(i)(1) of the Regulations.

 

(g)           Curative Allocations.  The allocations set forth in Sections
8.2(a)-(f) and Section 8.1(c) (also “Regulatory Allocations”) are intended to
comply with certain requirements of Regulations Sections 1.704-1(b) and
1.704-2.  Notwithstanding any other provisions of this Section 8 (other than the
Regulatory Allocations), the Regulatory Allocations shall be taken into account
in allocating subsequent Net Profits, Net Losses and items of income, gain, loss
and deduction among the Members so that, to the extent possible, the net amount
of such allocations of subsequent Net Profits, Net Losses and other items and
the Regulatory Allocations to each Member shall be equal to the net amount that
would have been allocated to each such Member pursuant to the provisions of this
Section 8 if the Regulatory Allocations had not occurred.  For purposes of
applying the foregoing sentence, allocations pursuant to this
Section 8.2(g) shall be made:  (i) by taking into account Regulatory Allocations
which, although not made yet, are likely to be made in the future; and (ii) only
to the extent the Manager reasonably determines that such curative allocations
are appropriate in order to realize the intended economic agreement among the
Members.

 

Section 26.3          Built-In Gain or Loss/Code Section 704(c) Tax
Allocations.  In the event that the Capital Accounts of the Members are credited
with or adjusted to reflect the fair market value of the Company’s property and
assets, the Members’ distributive shares of depreciation,

 

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depletion, amortization, and gain or loss, as computed for tax purposes, with
respect to such property, shall be determined pursuant to Section 704(c) of the
Code and the Regulations thereunder, so as to take account of the variation
between the adjusted tax basis and book value of such property.  Any deductions,
income, gain or loss specially allocated pursuant to this Section 8.3 shall not
be taken into account for purposes of determining Net Profits or Net Losses or
for purposes of adjusting a Member’s Capital Account.

 

Section 26.4          Tax Allocations.  Except as otherwise provided in
Section 8.3, items of income, gain, loss and deduction of the Company to be
allocated for income tax purposes shall be allocated among the Members on the
same basis as the corresponding book items were allocated under Sections 8.1
through 8.2.

 

ARTICLE XXVII
MANAGEMENT OF THE COMPANY

 

Section 27.1          Powers and Duties of the Manager.

 

(a)           The Manager shall have the exclusive right and power to manage,
and be responsible for the operation of, the Company’s and Project’s business,
and shall have the authority under the Act and this Agreement to do all things,
that they determine, in their sole discretion to be in furtherance of the
purposes of the Company and shall have all rights, powers and privileges
available to a “Manager” under the Act.  Without limiting the foregoing, the
Manager shall have the power and authority:

 

(i)            To purchase and sell Company assets including, without
limitation, selling or otherwise disposing of the Project.

 

(ii)           To enter into any kind of activity and to perform and carry out
contracts of any kind necessary to, or in connection with, or incidental to the
accomplishment of the purposes of the Company, including, without limitation,
construction, leasing, management and similar agreements.

 

(iii)          To borrow money and issue evidences of indebtedness to pledge the
Company’s assets, or to confess judgment on behalf of the Company, in connection
with the operation of the Company and to secure the same by deed of trust,
mortgage, security interest, pledge or other lien or encumbrance on the assets
of the Company.

 

(iv)          To repay in whole or in part, negotiate, refinance, recast,
increase, renew, modify or extend any secured or other indebtedness affecting
the assets of the Company and in connection therewith to execute any extensions,
renewals or modifications of any evidences of indebtedness secured by deeds of
trust, mortgages, security interests, pledges or other encumbrances covering the
Project.

 

(v)           To employ agents, attorneys, brokers, managing agents, architects,
contractors, subcontractors and accountants on behalf of the Company.

 

(vi)          To bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Company.

 

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(vii)         To enter into any kind of activity and to perform and carry out
contracts of any kind necessary to, or in connection with, or incidental to the
accomplishment of the stated purposes of the Company, so long as said activities
and contracts may be lawfully carried on or performed by a limited Company under
applicable laws and regulations.

 

(viii)        To form subsidiaries to hold and/or manage the Project; provided,
that the Manager may not undertake any activity with respect to such
subsidiaries that the Manager would not be permitted to undertake under the
terms and conditions of this Agreement as if the Project was directly owned by
the Company.

 

(b)           The Manager shall have the right to enter into and execute all
contracts, documents and other agreements on behalf of the Company and shall
thereby fully bind the Company.  Persons dealing with the Company are entitled
to rely conclusively on the power and authority of the Manager as set forth in
this Agreement.

 

(c)           Except as provided in this Agreement, no Member who is not the
Manager, in its capacity as such, shall take any part in the control of the
affairs of the Company, undertake any transactions on behalf of the Company or
have any power to sign for or to bind the Company.

 

(d)           Notwithstanding anything contained in this Section 9.1 to the
contrary, the Manager shall not, without the prior consent of MCG, make any
Major Decision (hereinafter defined) with respect to the Company, a Project or
other Company business.  Each time the consent of MCG is required under this
Section 9.1(d), the Manager shall notify MCG in writing (which may be by
e-mail).  The notice shall include reasonably sufficient detail to permit MCG to
make a decision on the matter.  MCG shall respond within seven (7) Business Days
after the date it is notified of the need for such consent or action; provided,
that, if the Manager reasonably determines that the matter is an emergency or
otherwise must be decided within a shorter time period, the Manager may indicate
in the notice the need for an expedited decision and MCG shall have three
(3) Business Days to respond to the request for consent or action.  If MCG does
not respond within such seven (7) or three (3) Business Day period, then such
matter or action requested shall be deemed approved by MCG.  A “Major Decision”
as used in this Agreement means any decision (or action) with respect to the
following matters:

 

(i)            (x) Purchasing additional Company assets outside of the ordinary
course of business or any additional real property, or (y) selling the Project;

 

(ii)           Changing the purpose of the Company or entering into businesses
that are not consistent with the Company’s purpose, and establishing or making a
material amendment to the business plan for the Project;

 

(iii)          The Initial Financing, and any refinancing of the Initial
Financing (other than extensions of the Initial Financing in accordance with its
terms), or entering into additional financings, mortgage financing or other
credit facilities in addition to the Initial Financing;

 

(iv)          Making capital calls for Supplemental Capital Contributions (or
any Capital Contributions other than those contributed pursuant to
Section 6.1).  Requests for

 

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additional Capital Contributions shall be subject to the following procedures:
The Manager shall request Supplemental Capital Contributions only for
significant capital projects, tenant improvements and other legitimate business
purposes that the Manager reasonably believes cannot reasonably be funded from
Project revenue.  In approving the Major Decision, MCG and the Keystone Investor
shall indicate the portion of such Supplemental Capital Contribution that each
shall fund (provided, that each shall have the right to fund fifty percent (50%)
of such Supplemental Capital Contribution and if one of them does not desire to
fund its pro rata share of the Supplemental Capital Contribution, the other may
fund the remainder).  When the Manager and Members have reached a decision on
whether to approve the funding of the Supplemental Capital Contribution and the
percentage that each Member would fund, the Manager shall issue a capital call
for such amount in accordance with Section 6.2.

 

(v)           Settling or compromising any claims or causes of action against
the Company, or agreeing on behalf of the Company to pay any disputed claims or
causes of action, if payments by the Company pursuant to such settlements,
compromises, or agreements would exceed Two Hundred Fifty Thousand Dollars
($250,000);

 

(vi)          Forming Company subsidiaries other than as contemplated by this
Agreement, the Company’s business plan or financing agreements approved by MCG;

 

(vii)         Electing to restore or reconstruct the Project after a
condemnation or casualty, or reinvesting insurance or condemnation proceeds
after such an event;

 

(viii)        Engaging in any of the following actions in a manner that is a
material deviation from the business plan for the Project: exchanging or
subdividing, or granting options with respect to, all or any portion of the
Project; acquiring any option with respect to the purchase of any real
property;  granting or relocating of easements benefiting or burdening the
Project; adjusting the boundary lines of the Project; granting road and other
right-of-ways and similar dispositions of interests in the Project; or changing
the zoning or any restrictive covenants applicable to the Project;

 

(ix)          Selecting the Company’s auditors; provided, that Mayer Hoffman
McCann P.C. shall be deemed acceptable auditors by the Members;

 

(x)           (x) Making tax elections, (y) establishing tax or accounting
policies, including policies for the depreciation of Company property, or
resolving accounting matters that affect M-C Corp’s compliance with any rules or
regulations promulgated by the Securities Exchange Commission, or (z) settling
disputes with tax authorities, in each case in a manner that would affect M-C
Corp.’s REIT status or ability to comply with REIT Requirements;

 

(xi)          Establishing leasing guidelines for the Project, or entering into
a lease with tenants at the Project that does not comply with the leasing
guidelines; provided, that MCG shall not have the right to approve such leases
or amendments to the leasing guidelines if a lender to the Company or its
subsidiaries approves such leases or amendments to leasing guidelines in
accordance with its loan documents;

 

(xii)         Commingling Company funds with the funds of any other Person;

 

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(xiii)        Admitting, including by assignment of economic rights or
permitting encumbrances of interests, any Member other than a Transfer permitted
pursuant to Section 10;

 

(xiv)        Merging or consolidating the Company with or into another entity,
invest in or acquire an interest in any other entity, reorganize the Company, or
make a binding commitment to do any of the foregoing;

 

(xv)         Filing any voluntary petition for the Company under Title 11 of the
United States Code, the Bankruptcy Act, seek the protection of any other federal
or state bankruptcy or insolvency law, fail to contest a bankruptcy proceeding;
or seek or permit a receivership or make an assignment for the benefit of its
creditors;

 

(xvi)        Voluntarily dissolving or liquidating the Company;

 

(xvii)       Entering into, amending, modifying (including making price
adjustments), replacing, waiving the provisions of, or granting consents under,
any of the terms and conditions of any agreement or other arrangement with the
Manager or its Affiliates or paying fees or other compensation to the Manager or
its Affiliates (except for the agreements with, and payments of fees to, the
Manager and its Affiliates specifically provided for in this Agreement), or
terminating any such agreement (but the foregoing shall not imply that any such
agreement can be amended or modified without the written consent of all parties
to such agreement); and

 

(xviii)      Causing the Company to loan Company funds to any Person.

 

(e)           If the Manager and MCG disagree with respect to a Major Decision,
they shall attempt to resolve such disagreement in good faith for ten
(10) Business Days following MCG’s notice to Manager of such disagreement.  If
such disagreement is not resolved within ten (10) Business Days, then either
MCG, on the one hand, or the Manager and the Keystone Investor (acting
together), on the other hand, may initiate the buy-sell procedures under
Section 10.4.

 

(f)            Budget Approval.

 

(i)            The initial operating and capital budgets of the Company (each,
an  “Initial Budget”) are attached to this Agreement as Exhibit B, which budgets
have been approved by the Manager and MCG.  At least sixty (60) days prior to
the commencement of each Fiscal Year of the Company (beginning for the Fiscal
Year 2015), the Manager shall cause to be prepared and shall submit to MCG a
budget in reasonable detail for such Fiscal Year.  At the request of MCG, the
Manager will meet with MCG, at a time and place reasonably agreed to by the
parties, to discuss each proposed budget.  At such meetings, the Manager shall
provide to MCG back-up materials that MCG may reasonably request regarding each
proposed budget.  MCG shall consider such budget and shall, at least thirty (30)
days prior to the commencement of the upcoming Fiscal Year, approve or reject
such budget.  If MCG rejects a budget, the Manager and MCG shall use diligent
efforts to revise the proposed budget in form and substance satisfactory to both
the Manager and MCG in their reasonable judgment.  Each budget approved by MCG
pursuant to this Section 9.1(f), including the Initial Budget, is hereafter
called the

 

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“Approved Budget.”  If the Manager and MCG cannot agree on an Approved Budget
for a Fiscal Year prior to January 31 of such Fiscal Year, then either MCG, on
the one hand, or the Manager and the Keystone Investor (acting together), on the
other hand, may initiate the buy-sell procedures under Section 10.4.

 

(ii)           The Manager may make the expenditures provided for in and
otherwise implement the Approved Budget, and may expend amounts in excess of the
Approved Budget, provided that overall expenditures for a Fiscal Year do  not
exceed the Approved Budget by more than ten percent (10%).  For the purpose of
clarity, the ten percent (10%) limitation in the prior sentence shall apply to
operating Approved Budgets and capital Approved Budgets separately (e.g., the
Manager may not expend an additional 10% of the capital Approved Budget on
operational expenses).  If the Manager desires to expend amounts in excess of
such amount, then it shall be a “Major Decision” subject to the procedures of
Section 9.1(d).

 

(iii)          Until final approval of an Approved Budget by MCG, the Manager
shall be authorized to operate the Project on the basis of the previous Fiscal
Year’s Approved Budget, together with an increase in such Approved Budget equal
to the actual increase in expenses associated with real estate taxes and
assessments, insurance premiums, debt service and utilities relating to the
Project.  Any and all projections contained in any Approved Budget or prior
version provided by the Manager are simply estimates and assessments and do not
constitute any guaranty of performance whatsoever.

 

(iv)          Notwithstanding the approval rights of MCG in this Section 9.1(f),
a budget shall be deemed to be an “Approved Budget,” and MCG shall not have the
right to approve it, if a lender to the Company or its subsidiaries approves
such budget in accordance with its loan documents.  In addition, any expenditure
that MCG would have the right to approve under Section 9.1(f)(ii) shall be
deemed approved if a lender to the Company or its subsidiaries approves such
expenditure in accordance with its loan documents.

 

Section 27.2          Other Activities.   Any Member (including the Manager) and
Affiliates of any of them may act as general, limited or managing members for
other companies or managers or members of other limited liability companies
engaged in businesses similar to those conducted hereunder, even if competitive
with the business of the Company.  Nothing herein shall limit any Member, or
Affiliates of any of them, from engaging in any other business activities, and
the Members and their Affiliates shall not incur any obligation, fiduciary or
otherwise, to disclose, grant or offer any interest in such activities to any
party hereto.

 

Section 27.3          Indemnification.  Each Member (including the Manager), its
members, managers, agents, employees and representatives shall be indemnified by
the Company to the fullest extent permitted by law, against any losses,
judgments, liabilities, expenses and amounts paid in settlement of any claims
sustained by it or any of them in connection with the Company, provided that
such liability or loss was not the result of fraud or willful misconduct on the
part of such Member or such person.  Without limiting the foregoing, the Company
shall indemnify MCG and M-C Corp., M-C LP, and their Affiliates to the fullest
extent permitted by law, against any losses, judgments, liabilities, expenses
(including reasonable attorneys’ fees) and amounts paid in settlement of any
claims sustained by it or any of them in connection with the Initial Financing
and any other funds borrowed by the Company, provided that such liability or
loss

 

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was not the result of fraud, willful misconduct or gross negligence on the part
of such indemnified Persons.  All rights to indemnification permitted herein and
payment of associated expenses shall not be affected by the dissolution or other
cessation of the existence of the Member, or the withdrawal, adjudication of
bankruptcy or insolvency of the Member.  Expenses incurred in defending a
threatened or pending civil, administrative or criminal action, suit or
proceeding against any Person who may be entitled to indemnification pursuant to
this Section 9.3 may be paid by the Company in advance of the final disposition
of such action, suit or proceeding, if such Person undertakes to repay the
advanced funds to the Company in cases in which it is not entitled to
indemnification under this Section 9.3.

 

Section 27.4          Agreements with, and Fees to, the Members and their
Affiliates.

 

(a)           The Manager or its Affiliates may enter into any contract or
agreement with the Company (or the subsidiary of the Company that owns the
Project) for the provision of services to the Company or the Project, including,
without limitation, providing property management, development, brokerage,
construction, financing and accounting services for the Project, if such
contract or agreement is necessary or desirable for the Company’s or Project’s
business.  Without the consent of MCG, (i) such contracts shall be on customary
terms and may provide for the payment of fees by the Project, the Company or its
Affiliates at rates that do not exceed market rates and (ii) salaries and other
costs of the Manager’s or its Affiliates’ employees who perform property-level
services may be paid by the Project at rates that do not exceed market rates, in
each case as determined by the Manager in its reasonable discretion; provided,
that, any fees paid pursuant to property management agreements will be paid as
follows: (x) eighty percent (80%) to the Manager or its designated Affiliate;
and (y) twenty percent (20%) to MCG or its designated Affiliate.

 

(b)           In addition, the Company (or its subsidiary that owns the Project)
shall enter into a leasing agency agreement with MCG or its designated Affiliate
on customary terms and conditions, with fees that do not exceed market rates. 
Such agreement may not be terminated by the Manager without MCG’s consent
(unless the agreement is terminated by the Manager for “cause” as defined in
such agreement).  Any fees paid pursuant to such agreements that exceed MCG’s
costs (including costs of in-house legal services provided by MCG or its
Affiliates in connection with the leasing of the Project) in providing leasing
services (i.e., fee profits) will be paid as follows: (x) eighty percent (80%)
to MCG or its designated Affiliate; and (y) twenty percent (20%) to the Manager
or its designated Affiliate.

 

Section 27.5          REIT Provisions.

 

(a)           Notwithstanding anything herein to the contrary, the Members
hereby acknowledge the status of M-C Corp. as a real estate investment trust (a
“REIT”). The Members further agree that the Company (and any subsidiaries) and
the Project shall be managed in a manner so that:  (a) the Company’s gross
income meets the tests provided in Section 856(c)(2) and (3) of the Code as if
the Company were a REIT; (b) the Company’s assets meet the tests provided in
Section 856(c)(4) of the Code as if the Company were a REIT; and (c) the Company
minimizes federal, state and local income and excise taxes that may be incurred
by M-C Corp or any of its affiliates, including taxes under Code Sections
857(b), 860(c) or 4981 (collectively and together with other REIT provisions of
the Code or Regulations, the “REIT Requirements”)

 

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provided that such minimization does not unreasonably increase taxes or costs
for the other Members.  The Members hereby acknowledge, agree and accept that,
pursuant to this Section 9.5(a), the Company (or any of its subsidiaries) may be
precluded from taking, or may be required to take, an action which it would not
have otherwise taken, even though the taking or not taking of such action might
otherwise be advantageous to the Company (or any of its subsidiaries) and/or to
one or more of the Members (or one or more of their subsidiaries or affiliates).

 

(b)           Notwithstanding any other provision of this Agreement to the
contrary, neither the Manager nor any Member will require the Company to take
any material action which may, in the reasonable opinion of MCG’s tax advisors
or legal counsel, result in the loss of M-C Corp.’s status as a REIT. 
Furthermore, the Manager shall take reasonable steps to structure the Company’s
(or any subsidiary’s) transactions to eliminate any prohibited transactions tax
or other taxes that may be applicable to MCG and/or M-C Corp to the extent such
actions do not impose an unreasonable cost or tax on other Members.

 

(c)           If MCG’s counsel reasonably determines that a taxable REIT
subsidiary (as described in Section 856(l) of the Code) (a “TRS”) should be
established to hold MCG’s Membership Interest, or to provide services at the
Project, then M-C Corp., MCG or the Members (or any of their affiliates), as
applicable, may form, or cause to be formed, such TRS only if it (i) provides at
least five (5) days prior written notice thereof to the Members and
(ii) prepares forms for election under Section 856(l)(l)(B) of the Code (in
accordance with guidance issued by the Internal Revenue Service) for M-C Corp.
and causes the TRS to execute such election form and forwards it to the Company,
and each Member for execution and filing by M-C Corp. if it so chooses.  Each
Member shall reasonably cooperate with the formation of any TRS and execute any
documents deemed reasonably necessary by M-C Corp. or MCG in connection
therewith.  The Members shall reasonably cooperate in structuring ownership in
the TRS favorably for all Members.

 

(d)           Without limiting the provisions of this Section 9.5, the Manager
shall:

 

(i)            distribute sufficient cash to allow M-C Corp. to make all
distributions attributable to its investment in the Company that are required
due to its REIT status; provided, that, no cash shall be required to be
distributed pursuant to this Section 9.5(d)(i) to the extent that: (y) the
amounts required to be distributed by M-C Corp. are due solely to allocations of
Net Profits or gain made to MCG pursuant to Section 8.1(b)(i),
Section 8.1(d) (provided, that all proceeds resulting from the Capital Event
that are available for distribution are distributed pursuant to Section 7.1
within 5 Business Days of the Capital Event) or Section 8.1(e) (provided, that
all proceeds resulting from the sale pursuant to Section 10.5 that are available
for distribution are distributed pursuant to Section 10.6 within 5 Business Days
of the sale); or (z) such distribution is prohibited under an applicable credit
agreement or loan document to which the Company or its subsidiaries are a party,
provided that all amounts that were not distributed due to this
Section 9.5(d)(i)(z) are immediately distributed as soon as permissible under
the applicable credit agreement or loan document;

 

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(ii)           promptly deliver to MCG, following any request made by MCG from
time to time, financial information demonstrating that the Company is in
compliance with the REIT Requirements;

 

(iii)          deliver no later than twenty (20) days after the end of each
fiscal quarter of each Fiscal Year, except for the fourth fiscal quarter, and
thirty (30) days after the end of the fourth fiscal quarter of each Fiscal Year,
certification that the Company is in compliance with the REIT Requirements;

 

(iv)          permit MCG to review any new leases and material modifications to
existing leases (including renewals) for 2 Business Days prior to Company
signing such new leases, provided that if MCG raises no issues with the lease,
Company may enter into it, and MCG shall only request changes to the lease to
the extent that a lease is reasonably likely to cause the Company to not comply
with the requirements of Sections 9.5(a) and/or (b) of this Agreement;

 

(v)           request MCG’s permission prior to purchasing any interest in
another entity or real property, provided that such permission may only be
withheld by MCG if such investment would cause the Company to violate the
requirements of Section 9.5(a) and/or (b) of this Agreement;

 

(vi)          request MCG’s permission before beginning to offer any new
services at the Project, provided that such permission may only be withheld by
MCG if offering such services was reasonably likely to cause the Company to
violate the requirements of Section 9.5(a) and/or (b) of this Agreement.  In the
event that providing such service would cause problems in complying with the
REIT Requirements, Manager and an MCG will work together to structure offering
such services under 9.5(c);

 

(vii)         request MCG’s permission before depositing or investing cash in
any manner other than in US dollars in a checking or money market account at a
bank, or a money market fund, in the United States, provided that such
permission may only be withheld by MCG if such investment of cash would cause
the Company to violate the requirements of Section 9.5(a) and/or (b) of this
Agreement;

 

(viii)        request MCG’s permission prior to selling or beginning to market
the Project for sale or any assets thereof prior to 2 years after the
acquisition of the Project provided that such permission may only be withheld by
MCG if the marketing or sale of the Project or any assets thereof was reasonably
likely to cause the Company to violate the requirements of Section 9.5(a) and/or
(b) of this Agreement; and

 

(ix)          restructure the offering of services at the Project in accordance
with MCG’s advice, if such advice is to prevent the Company from violating the
requirements of Section 9.5(a), (b) and/or (c) of this Agreement.

 

Section 27.6          Loan Documents.  Notwithstanding anything to the contrary
contained in this Section 9 or the other provisions of this Agreement, the
Members agree not to do anything, or cause, permit or suffer anything to be done
which is prohibited by, or contrary to, the terms of

 

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the loan documents for the Initial Financing or any other loan documents entered
into by the Company or its subsidiaries in connection with the financing of the
Project.

 

ARTICLE XXVIII
TRANSFERABILITY OF MEMBERSHIP INTERESTS

 

Section 28.1          Transfers.

 

(a)           A Member (other than the Manager) may not withdraw or Transfer all
or any part of its Membership Interest without the prior written consent of all
Members; provided, that (i) any Member may Transfer its Membership Interest, in
whole but not in part, to an Affiliate without the consent of the other Members
(provided, that, in the case of the Keystone Investor, such Affiliate must be
controlled by William Glazer or jointly by William Glazer and Marc Rash.  In
addition, a merger involving M-C Corp. or M-C LP, or the sale of all or
substantially all of the assets of M-C Corp. or M-C LP shall not be deemed a
Transfer by MCG.

 

(b)           The Manager may not Transfer all or any part of its Membership
Interest without the consent of all of the Members; provided, that the Manager
may Transfer its Membership Interest, in whole but not in part, to an Affiliate
that is controlled by William Glazer without the consent of the Members.

 

(c)           Notwithstanding the other provisions of this Section 10.1, no
Transfer may occur without the consent of all Members if such Transfer would
(i) result in the Company being treated as a “publicly traded partnership”
within the meaning of Section 7704 of the Code, (ii) violate any securities or
other laws or (iii) materially increase the regulatory compliance burden on the
Company or any of its Members or the Manager.

 

Section 28.2          Substitution of Assignees.

 

(a)           No assignee of the Membership Interest of any Member shall have
the right to be admitted to the Company as a Member unless all of the following
conditions are satisfied:

 

(i)            the fully executed and acknowledged written instrument of
assignment which has been filed with the Manager and sets forth the intention of
the assignor that the assignee become a Member in its place;

 

(ii)           the assignor and assignee execute and acknowledge such other
instruments as the Manager and, in the case of transfers by the Manager to
non-Affiliates, the other Members, may deem necessary or desirable to effect
such admission, including the written acceptance and adoption by the assignee of
the provisions of this Agreement and the assumption by the assignee of all
obligations of the assignor under this Agreement arising from and after the date
of such transfer;

 

(iii)          if requested by the Manager, counsel satisfactory to the Manager
shall have provided advice (which need not be an opinion, but which must be
reasonably satisfactory to the requesting party) that (A) such transaction may
be effected without registration under the Securities Act of 1933, as amended,
or violation of applicable state

 

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securities laws, (B) the Company will not be required to register under the
Investment Company Act of 1940, as in effect at the time of rendering such
opinion as a result of such transfer and (C) will not change the tax status of
the Company, including, but not limited to, causing the Company to be a
“publicly traded partnership” within the meaning of Section 7704 of the Code or
(D) otherwise subject the Company or its Members to increased regulatory burden;
and

 

(iv)          the assignee has paid all reasonable expenses incurred by the
Company (including its legal fees) as a result of such transfer, the cost of the
preparation, filing and publishing of any amendment to the Company’s Certificate
of Organization or any amendments of filings under fictitious name registration
statutes.

 

(b)           Once the above conditions have been satisfied, the assignee shall
become a Member on the first day of the next following calendar month.  The
Company shall, upon substitution, thereafter make all further distributions on
account of the Membership Interests so assigned to the assignee for such time as
the Membership Interests are transferred on its books in accordance with the
above provisions.  Any person so admitted to the Company as a Member shall be
subject to all provisions of this Agreement as if originally a party hereto.

 

Section 28.3          Compliance with Securities Laws.  The Members acknowledge
and confirm that their respective Membership Interests constitute a security
which has not been registered under any federal or state securities laws by
virtue of exemptions from the registration provisions thereof and consequently
cannot be sold except pursuant to appropriate registration or exemption from
registration as applicable.  No Transfer or assignment of all or any part of a
Membership Interest (except a Transfer upon the death, incapacity or bankruptcy
of a Member to his personal representative and beneficiaries), including,
without limitation, any Transfer of a right to distributions, profits and/or
losses to a Person who does not become a Member, may be made unless, if
requested pursuant to Section 10.2(a)(iii), the Company is provided with
satisfactory advice of counsel to the effect that such Transfer or assignment
(a) may be effected without registration under the Securities Act of 1933, as
amended, or the Investment Company Act of 1940, as amended, (b) does not violate
any applicable federal or state securities laws (including any investment
suitability standards) applicable to the Company or the Members, (c) does not
materially increase the regulatory burdens applicable to the Company or the
Members, and (d) does not alter the Company’s status as a partnership for
taxation purposes.

 

Section 28.4          Buy/Sell.

 

(a)           Either MCG, on the one hand, or the Manager and the Keystone
Investor (acting together), on the other hand, shall have the right and the
option to implement the buy/sell procedure as set forth in this Section 10.4 if
permitted to do so under Section 9.1(e).  For the purposes of this Section 10.4,
the Manager and Keystone Investor shall be considered one Member.

 

(b)           Any Member which intends to exercise its buy/sell option hereunder
(the “Notifying Member”) shall first give notice of its intent to the other
Member (the “Buy/Sell Notice”) which Buy/Sell Notice shall (1) contain a
statement of irrevocable intent to utilize this Section 10.4, (2) contain a
statement of the aggregate dollar amount which the Notifying Member is willing
to pay in cash for all of the assets of the Company, free and clear of all

 

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liabilities and obligations relating thereto (the “Specified Valuation Amount”)
as of the date of the Buy/Sell Notice, (3) disclose all material liabilities and
potential material liabilities of the Company actually known to the Notifying
Member and (4) disclose the terms and details of any discussion, offer,
contract, similar agreement or documents that the Notifying Member has
negotiated or discussed during the 180 days preceding the delivery of the
Buy/Sell Notice with any potential purchaser or equity provider (but not debt
financier) of or with respect to the Project (or any portion thereof).  The
other Member, after receiving the Buy/Sell Notice (“Receiving Member”), shall
have the option to either:  (A) sell its entire Membership Interest to the
Notifying Member for an amount equal to the amount the Receiving Member would be
entitled to receive if the Company sold all of its assets for the Specified
Valuation Amount on the date of the Buy/Sell Notice and immediately thereafter
the Company paid all liabilities and obligations of the Company (whether or not
such liabilities and/or obligations were listed in the Buy/Sell Notice), and
deducted customary closing costs (excluding brokerage fees and commissions) that
would be associated with a third party sale, and, subject to Section 10.6,
distributed the net proceeds and any other Company assets to each Member in
liquidation of the Company pursuant to Section 11 (any disputes regarding such
amounts shall be resolved by the Approved Accountants); (B) purchase the entire
Membership Interest of the Notifying Member for an amount equal to the amount
the Notifying Member would be entitled to receive if the Company sold all of its
assets for the Specified Valuation Amount on the date of the Buy/Sell Notice and
immediately thereafter the Company paid all liabilities and obligations of the
Company (whether or not such liabilities and/or obligations were listed in the
Buy/Sell Notice), and deducted customary closing costs that would be associated
with a third party sale, and, subject to Section 10.6, distributed the net
proceeds and any other Company assets to each Member in liquidation of the
Company pursuant to Section 11 (any disputes regarding such amounts shall be
resolved by the Approved Accountants); or (C) implement the listing procedures
described in Section 10.5, in which case the additional buy/sell procedures
described in the remaining provisions of this Section 10.4 shall no longer apply
unless and until the buy/sell procedures are re-initiated in accordance with
Sections 10.4 and 10.5.  If the Receiving Member disputes the Notifying Member’s
statement of the amount payable to each Member based on the Specified Valuation
Amount (there shall be no right to challenge the Specified Valuation Amount
itself), it shall promptly provide notice of such dispute to the Notifying
Member and to the Approved Accountants, which dispute the Approved Accountants
shall resolve within thirty (30) days of the Buy/Sell Notice (which resolution
shall include a written report delivered to all Members specifying the
calculations and assumptions underlying such resolution, and shall be binding). 
Any such dispute shall stay the time periods set forth in this
Section 10.4(b) from the date on which notice of such dispute is given to the
Notifying Member through and including the date on which the Approved
Accountants provide a written report of the resolution of such dispute.

 

(c)           The Receiving Member shall give written notice (the “Election
Notice”) to the Notifying Member of its election under Section 10.4(b) within
thirty (30) days after receiving such Buy/Sell Notice (the “30 Day Period”).  If
the Receiving Member does not send its Election Notice within such 30 Day
Period, such Receiving Member(s) shall be deemed conclusively to have elected to
sell its entire Membership Interest.  The Member obligated to purchase under
this Section 10.4(c) shall fix a closing date not later than sixty (60) days
following the earlier of the date of the delivery of the Election Notice and the
expiration of such 30 Day Period (which period may be extended if lender
approval, if required, has not been obtained by such date) and

 

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shall deposit five percent (5%) of the purchase price (the “Deposit”) in the
escrow established for the closing of the sale.  At such closing, the selling
Member shall Transfer to the buying Member (or the buying Member’s nominee(s))
its entire Membership Interest free and clear of all liens and competing claims
and shall deliver to the buying Member (or the buying Member’s nominee(s)) such
instruments of transfer and such evidence of due authorization, execution, and
delivery, and of the absence of any such liens or competing claims, as the
buying Member (or the buying Member’s nominee(s)) shall reasonably request.  If
the Membership Interest of any Member is purchased pursuant to this
Section 10.4(c), then, effective as of the closing for such purchase, the
selling Member shall withdraw as a Member and, if applicable, Manager, of the
Company.  In connection with any such withdrawal of the selling Member, the
buying Member may cause any nominee designated in the sole and absolute
discretion of the buying Member to be admitted as a substituted Member of the
Company.  In addition, it shall be a condition of such sale that the purchasing
Member either (i) cause the selling Member to be released from any guarantees or
indemnities entered into by the selling Member in connection with the Project or
other Company business pursuant to releases reasonably acceptable to the selling
Member or (ii) cause a creditworthy affiliate of the purchasing Member (in the
selling Member’s reasonable judgment) to indemnify and hold harmless the selling
Member from and against any and all liabilities under such guarantees and
indemnities occurring on or after the date of the sale pursuant to an
indemnification agreement reasonably acceptable to the selling Member.  Each
Member shall pay its own legal, accounting and other consultant fees and
expenses in connection with consummating a transaction under this
Section 10.4(c), and all other closing costs shall be allocated equally between
the Members. Each Member shall pay its own legal, accounting and other
consultant fees and expenses in connection with consummating a transaction under
this Section 10.4(c), and all other closing costs shall be allocated 50% to the
selling Member and 50% to the purchasing Member.

 

(d)           The selling Member hereby irrevocably constitutes and appoints the
purchasing Member as its attorney-in-fact to execute, acknowledge and deliver
such instruments as may be necessary or appropriate to carry out and enforce the
provisions of this Section 10.4 following the failure of the selling Member to
execute, acknowledge and deliver such instruments as and when required herein,
after written request to do so.  If the purchasing Member defaults in the
performance of its obligations under this Section 10.4, the selling Member may,
as its exclusive remedy (except for the purchasing Member’s loss of rights
described below), either (i) retain the Deposit as liquidated damages or
(ii) acquire the purchasing Member’s Membership Interest at a ten percent (10%)
discount to the price that would otherwise have been applicable to an
acquisition of such Member’s Membership Interest under this Section 10.4 and
with an extra sixty (60) days (from the time of default) to make such decision,
and an extra sixty (60) days (from the time of such election) to close, but
otherwise on the terms described in this Section 10.4.  If the selling Member
defaults, the purchasing Member may enforce its rights by specific performance
(and damages incidental to a specific performance action which are allowed as
part of such action as well as a dollar amount equal to the Deposit), as its
exclusive remedy.

 

(e)           Notwithstanding anything to the contrary in this Section 10.4, the
amount to be paid for the selling Member’s Membership Interest in the Company
shall be adjusted as follows:  There shall be determined, as of the date of the
closing: (i) the aggregate amount of all Capital Contributions made by the
selling Member between the date of the Buy/Sell Notice and

 

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the date of the Closing, and (ii) the aggregate amount of all distributions of
capital made to the selling Member during such period pursuant to Section 7.  If
(A) the amount determined under (i) exceeds the amount determined under (ii),
then the amount to be received by the selling Member shall be increased by the
amount of such excess, and (B) if the amount determined under (ii) exceeds the
amount determined under (i), then the amount to be received by the selling
Member shall be decreased by the amount of such excess.

 

Section 28.5          Listing Procedures.  If Receiving Member in response to a
Buy/Sell Notice elects to implement the listing procedures described in this
Section 10.5, then promptly after the Receiving Member delivers its Election
Notice (and in any event within 10 days thereafter), the Receiving Member shall
provide the other Member with the names of three (3) real estate brokers that
the Receiving Member would like to engage for the purpose of listing the Project
for sale and the other Member shall, within seven (7) days of receiving the
proposed real estate brokers, select one of the three (3) brokers to act as the
listing agent for the Project.  Thereafter, the Members and the listing agent
shall cooperate diligently and in good faith to effectively market the Project
for sale for an aggregate purchase price no less than 103% of the Specified
Valuation Amount set forth in the Buy/Sell Notice that led to the implementation
of these listing procedures and otherwise on customary and reasonable terms for
property sales similar to a sale of the Project (such terms to include, without
limitation, customary representations and warranties, a customary survival
period for representation and warranties, customary liability limits for
breaches of representations and warranties, customary proration provisions and
customary cost allocations) (collectively, the “Acceptable Terms”).  If, in the
course of marketing the Project, the Company receives multiple purchase offers,
then, except as set forth below and, otherwise, absent clear differences in the
ability of the purchaser to close or in the potential post-closing liability of
the Company as seller, the Company shall accept the offer that would result in
the highest cash purchase price to the Company and shall thereafter diligently
proceed to a closing of the sale of the Project.  Subject to the requirement to
maximize the aggregate cash purchase price to the Company in accordance with the
preceding terms of this Section 10.5, the Company shall not reject (and the
Members are hereby conclusively deemed to have approved) any offer to purchase
the Project for 103% of the Specified Valuation Amount if such offer is
otherwise on Acceptable Terms.  If the Company, despite its good faith efforts,
is unable, during the six (6) months following the Election Notice that
triggered these listing procedures (the “Listing Period”), to enter into a
purchase and sale agreement on Acceptable Terms providing for the sale of the
Project for a purchase price of at least 103% of the Specified Valuation Amount,
then the Members may attempt to agree upon a reduced Specified Valuation Amount
for purposes of these listing procedures, or, alternatively, any Member may
re-initiate the buy/sell procedures described in Section 10.4.  Under no
circumstance shall a Member, or their respective Affiliates, be permitted to
purchase the Project pursuant to this Section 10.5 without the prior written
consent of the other Member.

 

Section 28.6          Payments / Distributions in Connection with the Buy/Sell
and Listing Procedures. Notwithstanding any other provision of Section 10.4 or
Section 10.5, if (i) the sale of a Member’s Membership Interest is undertaken
pursuant to Section 10.4, or if the Project is sold and the proceeds of such
sale are distributed pursuant to Section 10.5, and the Specified Valuation
Amount would result in a Member, as selling Member (under Section 10.4), or both
Members (under Section 10.5), not receiving an amount equal to at least such
Member’s

 

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unreturned Capital Contributions, plus the accrued and undistributed Preferred
Return thereon, then, (i) in the case of Section 10.4, the sale price will be
determined as if the Specified Valuation Amount was distributed Pro Rata or,
(ii) in the case of Section 10.5, distributions will be made Pro Rata.  In
addition, to the extent the Company or its subsidiary must pay a  prepayment
penalty or other fee or penalty as a result of the exercise of the buy/sell
provisions of Section 10.4 or the listing procedures provisions of Section 10.5,
the Notifying Member will be solely responsible for paying such fee or penalty.

 

ARTICLE XXIX
TERMINATION OF THE COMPANY

 

Section 29.1          Dissolution.

 

(a)           The Company shall be dissolved upon the happening of any of the
following events:

 

(i)            the bankruptcy, insolvency, dissolution, death, resignation,
withdrawal, retirement, insanity or adjudication of incompetency (collectively
“Withdrawal”) of the Manager, unless the Keystone Investor elects to continue
the Company and designate a substitute Manager to continue the business of the
Company and such substitute Manager agrees in writing to accept such election;

 

(ii)           the sale or other disposition of all or substantially all of the
assets of the Company (except under circumstances where: (x) all or a portion of
the purchase price is payable after the closing of the sale or other
disposition; (y) the Company retains a material economic or ownership interest
in the entity to which all or substantially all of its assets are transferred;
or (z) the Members decide to continue the Company); or

 

(iii)          subject to Section 9.1(d), a determination by the Manager, in its
reasonable discretion, that the Company should be dissolved.

 

In the event of the Manager’s Withdrawal under Section 11.1(a)(i) above or
otherwise, the Manager shall be converted to a special Member which shall have
the same financial interests in the Company as it had as Manager but shall have
no consent rights and no right to participate in management of the Company.

 

(b)           Dissolution of the Company shall be effective on the day on which
the event occurs giving rise to the dissolution, but the Company shall not
terminate until the Company’s Certificate of Organization shall have been
canceled and the assets of the Company shall have been distributed as provided
below.  Notwithstanding the dissolution of the Company prior to the termination
of the Company, as aforesaid, the business of the Company and the affairs of the
Members, as such, shall continue to be governed by this Agreement.

 

(c)           The bankruptcy, death, dissolution, liquidation, termination or
adjudication of incompetency of a Member shall not cause the termination or
dissolution of the Company and the business of the Company shall continue.  Upon
any such occurrence, the trustee, receiver, executor, administrator, committee,
guardian or conservator of such Member (such Member’s “Successor”) shall have
all the rights of such Member for the purpose of settling

 

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or managing its estate or property, subject to satisfying conditions precedent
to the admission of such assignee as a substitute Member. The Transfer by such
trustee, receiver, executor, administrator, committee, guardian or conservator
of any Membership Interest shall be subject to all of the restrictions,
hereunder to which such Transfer would have been subject if such Transfer had
been made by such bankrupt, deceased, dissolved, liquidated, terminated or
incompetent Member.  In the event of any other withdrawal of a Member, such
Member shall only be entitled to Company distributions distributable to him but
not actually paid to him prior to such withdrawal and shall not have any right
to have his Membership Interest purchased or paid for.

 

Section 29.2          Liquidation.

 

(a)           Except as otherwise provided in Section 11.1 above, upon
dissolution of the Company, the Manager shall liquidate the assets of the
Company, apply and distribute the proceeds thereof as contemplated by this
Agreement and cause the cancellation of the Company’s Certificate of
Organization.  As soon as possible after the dissolution of the Company, a full
account of the assets and liabilities of the Company shall be taken, and a
statement shall be prepared by the independent accountants then acting for the
Company setting forth the assets and liabilities of the Company.  A copy of such
statement shall be furnished to each of the Members within ninety (90) days
after such dissolution.  Thereafter, the assets shall be liquidated as promptly
as possible and the proceeds thereof shall be applied in the following order:

 

(i)            the expenses of liquidation and the debts of the Company, other
than the debts owing to the Members, shall be paid;

 

(ii)           any reserves shall be established or continued by the Manager
necessary for any contingent or unforeseen liabilities or obligations of the
Company or its liquidation.  Such reserves shall be held by the Company for the
payment of any of the aforementioned contingencies, and at the expiration of
such period as the Manager shall deem advisable, the Company shall distribute
the balance to pay debts owing to the Members, with any remaining balance being
distributed pursuant to clause (iii); and

 

(iii)          the balance shall be distributed in accordance with the
priorities set forth in Section 7.1; provided, that, after the Capital
Contributions of the other Members have been returned,  the Capital Contribution
of the Manager shall be returned to the extent it was not previously returned to
the Manager.

 

(b)           Upon dissolution of the Company, the Members shall look solely to
the assets of the Company for the return of its investment, and if the Company’s
assets remaining after payment and discharge of debts and liabilities of the
Company, including any debts and liabilities owed to any one or more of the
Members, are not sufficient to satisfy the rights of the a Member, it shall have
no recourse or further right or claim against any of the other Members.

 

(c)           If any assets of the Company are to be distributed in kind (which
shall require approval of (i) the Manager and (ii) all of the Members), such
assets shall be distributed on the basis of the Book Value thereof and any
Member entitled to any interest in such assets shall receive such interest
therein as a tenant-in-common with all other Members so entitled.

 

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The Book Value of such assets shall be determined by an independent appraiser to
be selected by the Company’s accountants and approved by (i) the Manager and
(ii) all of the Members.

 

ARTICLE XXX
COMPANY PROPERTY

 

Section 30.1          Bank Accounts.  All receipts, funds and income of the
Company and subsidiaries shall be deposited in the name of the Company or
subsidiary (as applicable) in such nationally-recognized banks or other
financial institutions as are determined or approved by the Manager.

 

Section 30.2          Title to Company Property.  All property owned by the
Company shall be owned by the Company as an entity and, insofar as permitted by
applicable law, no Member shall have any ownership interest in any Company
property in its individual name or right, and each Member’s interest in the
Company shall be personal property for all purposes.

 

ARTICLE XXXI
BOOKS AND RECORDS: REPORTS

 

Section 31.1          Books and Records.  The Company shall keep adequate books
and records at the principal place of business of the Company and on the
premises of the Project, setting forth a true and accurate account of all
business transactions arising out of and in connection with the conduct of the
Company.  Such books and records shall be open to the inspection and examination
of all Members or their duly authorized representatives at any reasonable time.

 

Section 31.2          Accounting Method.  The accounting basis on which the
books of the Company are kept shall be the generally accepted accounting
principles (GAAP) as applied in the United States method.  The “Fiscal Year” of
the Company shall be the calendar year.

 

Section 31.3          Reports.

 

(a)           The Manager shall cause the Company to prepare and deliver to all
Members annual audited financial statements no later than sixty (60) days after
the end of each Fiscal Year.  In addition, the Manager shall provide the Members
with unaudited quarterly financial statements no later than twenty (20) days
after the end of each fiscal quarter other than the fourth fiscal quarter, and
thirty (30) days after the end of the fourth fiscal quarter, of each Fiscal
Year.  Such financial statements shall be prepared in accordance with generally
accepted accounting principles (GAAP), consistently applied, and include an
income statement, a cash flow statement, a statement of equity and a balance
sheet for the Company, for the stipulated period and as of the end of such
fiscal period.  The Company shall pay for the audit.

 

(b)           As early as practicable, but in no event later than ninety (90)
days after the end of each Fiscal Year, the Company shall deliver to each Member
of the Company at any time during such Fiscal Year a Schedule K-1 and such other
information with respect to the Company as may be necessary for the preparation
of (i) such Member’s U.S. federal income tax returns, including a statement
showing each Member’s share of income, loss, deductions, gain and credits for
such Fiscal Year for U.S. federal income tax purposes, and (ii) such state and
local income

 

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tax returns as are required to be filed by such Member as a result of the
Company’s activities in such jurisdiction.

 

Section 31.4          Controversies with Internal Revenue Service.  The Manager
is hereby designated as the “tax matters partner” of the Company pursuant to
Section 6231(a)(7) of the Code.  In the event of any controversy with the
Internal Revenue Service or any other taxing authority involving the Company or
any Member, the outcome of which may adversely affect the Company, directly or
indirectly, or the amount of allocation of profits, gains, credits or losses of
the Company to an individual Member, the Manager may incur expenses it deems
necessary or advisable in the interest of, the Company in connection with any
such controversy, including, without limitation, attorneys and accountants’
fees.

 

ARTICLE XXXII
WAIVER OF PARTITION

 

The Members hereby waive any right of partition or any right to take any other
action which otherwise might be available to them for the purpose of severing
their relationship with the Company or their interest in assets held by the
Company from the interest of the other Members.

 

ARTICLE XXXIII
GENERAL PROVISIONS

 

Section 33.1          Amendments.  No alteration, modification or amendment of
this Agreement shall be made unless in writing and signed (in counterpart or
otherwise) by the Manager and all Members.

 

Section 33.2          Notices.  All notices, demands, approvals, reports and
other communications provided for in this Agreement shall be in writing, shall
be given by a method prescribed below in this Section 15.2 and shall be given to
the party to whom it is addressed at the address set forth below, or at such
other address(es) as such party hereto may hereafter specify by at least fifteen
(15) days prior written notice to the Company.

 

To the Manager or

 

 

the Keystone Investor:

 

c/o Keystone Property Group, L.P.

 

 

One Presidential Blvd., Suite 300

 

 

Bala Cynwyd, PA 19004

 

 

Attn: William Glazer

 

 

 

With a copy to:

 

Klehr Harrison Harvey Branzburg LLP

 

 

1835 Market Street, Suite 1400

 

 

Philadelphia, PA 19103

 

 

Facsimile: (215) 568-6603

 

 

Attn: Bradley A. Krouse, Esq.

 

 

 

To MCG :

 

c/o Mack-Cali Realty Corporation

 

 

343 Thornall Street

 

 

Edison, New Jersey 08837

 

 

Facsimile: (732) 205-9040

 

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Attn.: Mitchell E. Hersh,

 

 

President and Chief Executive Officer

 

 

 

With a copy to:

 

Mack-Cali Realty Corporation

 

 

343 Thornall Street

 

 

Edison, New Jersey 08837

 

 

Facsimile: (732) 205-9015

 

 

Attn.: Roger W. Thomas,

 

 

General Counsel and Executive Vice President

 

Any such notice demand, approval, report or other communication may be delivered
by hand, mailed by United States certified mail, return receipt requested,
postage prepaid, deposited in a United States Post Office or a depository for
the receipt of mail regularly maintained by the United States Post Office, or
delivered by local or nationally recognized overnight courier which maintains
evidence of receipt.  Any notices, demands, approvals or other communications
shall be deemed given and effective when received at the address for which such
party has given notice in accordance with the provisions hereof. 
Notwithstanding the foregoing, no notice or other communication shall be deemed
ineffective because of refusal of delivery to the address specified for the
giving of such notice in accordance herewith.  Any notice delivered by facsimile
transmission shall be as a courtesy copy only and shall not constitute notice
hereunder unless agreed in writing by the receiving party.  Any notice which is
intended to initiate a response period set forth in this Agreement shall be
effective to do so only if it specifically references such response period and
the Section of this Agreement containing such response period.  Any Member may
change the address to which notices will be sent by giving notice of such change
to the Company, and to other Members, in conformity with the provisions of this
Section 15.2 for the giving of notice.  A notice to a party designated to
receive a “copy” shall not in and of itself constitute notice to the primary
notice party.

 

Section 33.3          Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the laws, of the State of Delaware,
notwithstanding any conflict-of-law doctrines of such state or other
jurisdiction to the contrary.

 

Section 33.4          Binding Nature of Agreement.  Except as otherwise
provided, this Agreement shall be binding upon and inure to the benefit of the
Members and their personal representatives, successors and assigns.

 

Section 33.5          Validity.  In the event that all or any portion of any
provision of this Agreement shall be held to be invalid, the same shall not
affect in any respect whatsoever the validity of the remainder of this
Agreement.

 

Section 33.6          Entire Agreement.  This Agreement, together with all the
exhibits, documents, instruments and materials defined herein or which are
referred to herein, constitutes the entire understanding and agreement among the
parties hereto with respect to the subject matter hereof, and supersedes all
prior and contemporaneous agreements and understanding, inducements or
conditions, express or implied, oral or written, except as herein contained.

 

Section 33.7          Indulgences, Etc.  Neither the failure nor any delay on
the part of any party hereto to exercise any right, remedy, power or privilege
under this Agreement shall operate

 

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as a waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege preclude any other or further exercise of the same or
any other right, remedy, power or privilege; nor shall any waiver of any right,
remedy, power or privilege with respect to any occurrence be construed as a
waiver of such right, remedy, power or privilege with respect to any other
occurrence.  No waiver shall be effective unless it is in writing and signed by
the party asserted to have granted such waiver.

 

Section 33.8          Execution in Counterparts.  This Agreement may be executed
in any number of counterparts, all of which together shall constitute a single
contract, and each of such counterparts shall for all purposes be deemed to be
an original.  This Agreement may be executed and delivered by facsimile; any
original signatures that are initially delivered by fax shall be physically
delivered with reasonable promptness thereafter.  This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.

 

Section 33.9          Interpretation.  No provision of this Agreement is to be
interpreted for or against either party because that party or that party’s legal
representative drafted such provision

 

Section 33.10       Access; Confidentiality.  By executing this Agreement, each
Member expressly agrees, at all times during the term of the Company and
thereafter and whether or not at the time a Member of the Company (a) not to
issue any press release or advertisement or take any similar action concerning
the Company’s business or affairs without first obtaining consent of the
Manager, which consent shall not be unreasonably withheld, conditioned or
delayed, (b) not to publicize detailed financial information concerning the
Company and (c) not to disclose the Company’s affairs generally; provided that
the foregoing shall not restrict any Member from disclosing information
concerning such Member’s investment in the Company to its officers, directors,
employees, agents, legal counsel, accountants, other professional advisors,
limited partners, members and Affiliates, or to prospective or existing
investors of such Member or its Affiliates or to prospective or existing lenders
to such Member or its Affiliates.  Nothing herein shall restrict any Member from
disclosing information that: (i) is in the public domain (except where such
information entered the public domain in violation of this Section 15.10);
(ii) was made available or becomes available to a Member on a non-confidential
basis prior to its disclosure by the Company; (iii) was available or becomes
available to a Member on a non-confidential basis from a Person other than the
Company who is not otherwise bound by a confidentiality agreement with the
Company or its representatives, or is not otherwise prohibited from transmitting
the information to the Member; (iv) is developed independently by the Member;
(v) is required to be disclosed by applicable law, rule or regulation (provided
that prior to any such required disclosure, the disclosing party shall, to the
extent possible, consult with the other Members and use best efforts to
incorporate any reasonable comments of the other Members prior to such
disclosure) or is necessary to be disclosed in connection with customary or
required financial reporting of any Member or its Affiliates; or (vi) is
expressly approved in writing by the Members.  The provisions of this
Section shall survive the termination of the Company.

 

Section 33.11       Equitable Relief.  The Members hereby confirm that damages
at law may be an inadequate remedy for a breach or threatened breach of this
Agreement and agree that, in the event of a breach or threatened breach of any
provision hereof, the respective rights and

 

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--------------------------------------------------------------------------------

 

obligations hereunder shall be enforceable by specific performance, injunction
or other equitable remedy, but, nothing herein contained is intended to, nor
shall it, limit or affect any right or rights at law or by statute or otherwise
of a Member aggrieved as against the other for a breach or threatened breach of
any provision hereof, it being the intention by this Section 15.11 to make clear
the agreement of the Members that the respective rights and obligations of the
Members hereunder shall be enforceable in equity as well as at law or otherwise
and that the mention herein of any particular remedy shall not preclude a Member
from any other remedy it or he might have, either in law or in equity.

 

Section 33.12       Representations and Covenants by the Members.

 

(a)           Each Member represents, warrants, covenants, acknowledges and
agrees that:

 

(i)            It is a corporation, limited liability company or partnership, as
applicable, duly organized or formed and validly existing and in good standing
under the laws of the state of its organization or formation; it has all
requisite power and authority to enter into this Agreement, to acquire and hold
its Membership Interest and to perform its obligations hereunder; and the
execution, delivery and performance of this Agreement has been duly authorized.

 

(ii)           This Agreement and all agreements, instruments and documents
herein provided to be executed or caused to be executed by it are duly
authorized, executed and delivered by and are and will be binding and
enforceable against it.

 

(iii)          Its execution and delivery of this Agreement and the performance
of its obligations hereunder will not conflict with, result in a breach of or
constitute a default (or any event that, with notice or lapse of time, or both,
would constitute a default) or result in the acceleration of any obligation
under any of the terms, conditions or provisions of any other agreement or
instrument to which it is a party or by which it is bound or to which any of its
property or assets are subject, conflict with or violate any of the provisions
of its organizational documents, or violate any statute or any order, rule or
regulation of any governmental authority, that would materially and adversely
affect the performance of its duties hereunder; such Member has obtained any
consent, approval, authorization or order of any governmental authority required
for the execution, delivery and performance by such Member of its obligations
hereunder.

 

(iv)          There is no action, suit or proceeding pending or, to its
knowledge, threatened against it in any court or by or before any other
governmental authority that would prohibit its entry into or performance of this
Agreement.

 

(v)           This Agreement is a binding agreement on the part of such Member
enforceable in accordance with its terms against such Member.

 

(vi)          It has been advised to engage, and has engaged, its own counsel
(whether in-house or external) and any other advisors it deems necessary and
appropriate.  By reason of its business or financial experience, or by reason of
the business or financial experience of its own attorneys, accountants and
financial advisors (which advisors, attorneys and accountants are not Affiliates
of the Company or any other Member), it is capable of evaluating

 

36

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the risks and merits of an investment in the Membership Interest and of
protecting its own interests in connection with this investment.  Nothing in
this Agreement should or may be construed to allow any Member to rely upon the
advice of counsel acting for another Member or to create an attorney-client
relationship between a Member and counsel for another Member.

 

(vii)         It is acquiring the Membership Interest for investment purposes
for its own account only and not with a view to, or for sale in connection with,
any distribution of all or a part of the Membership Interest.

 

(viii)        It is familiar with the definition of “accredited investor” in
Rule 501(a) of Regulation D of the Securities Act of 1933, as amended, and it
represents that it is an “accredited investor” within the meaning of that rule.

 

(ix)          It is not required to register as an “investment company” within
the meaning ascribed to such term by the Investment Company Act of 1940, as
amended, and covenants that it shall at no time while it is a Member of the
Company conduct its business in a manner that requires it to register as an
“investment company”.

 

(x)           (i) each Person owning a ten percent (10%) or greater interest in
such Member (A) is not currently identified on the “Specially Designated
Nationals and Blocked Persons List” maintained by the Office of Foreign Assets
Control, Department of the Treasury (or any other similar list maintained by the
Office of Foreign Assets Control pursuant to any authorizing statute, executive
order or regulation) and (B) is not a Person with whom a citizen of the United
States is prohibited to engage in transactions by any trade embargo, economic
sanction, or other prohibition of U.S. law, regulation, or executive order of
the President of the United States, and (ii) such Member has implemented
procedures, and will consistently apply those procedures, to ensure the
foregoing representations and warranties remain true and correct at all times. 
This Section 15.12(a)(x) shall not apply to any Person to the extent that such
Person’s interest in the Member is through either (x) a Person (other than an
individual) whose securities are listed on a national securities exchange, or
quoted on an automated quotation system, in the United States, or a wholly-owned
subsidiary of such a Person or (y) an “employee pension benefit plan” or
“pension plan” as defined in Section 3(2) of the U.S. Employee Retirement Income
Security Act of 1974, as amended.

 

(xi)          It shall comply with all requirements of law relating to money
laundering, anti-terrorism, trade embargos and economic sanctions, now or
hereafter in effect and shall immediately notify the other Members in writing if
it becomes aware that any of the foregoing representations, warranties or
covenants are no longer true or have been breached or if the Member has a
reasonable basis to believe that they may no longer be true or have been
breached.

 

(xii)         No Member or its Affiliates, has dealt with any broker or finder
in connection with its entering into this Agreement and shall indemnify the
other Members for all costs, damages and expenses (including reasonable
attorneys’ fees) which may arise out of a breach of the aforesaid representation
and warranty.

 

37

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(xiii)        No broker or finder has been engaged by it in connection with any
of the transactions contemplated by this Agreement or to its knowledge is in any
way connected with any of such transactions.  In the event of a claim for a
broker’s or finder’s fee or commission in connection herewith, then each Member
shall, to the fullest extent permitted by applicable law, indemnify, protect,
defend and hold the other Member, the Company, each subsidiary, and their
respective assets harmless from and against the same if it shall be based upon
any statement or agreement alleged to have been made by it or its Affiliates.

 

(b)           The Manager represents and warrants to MCG that the Company was
formed solely for the purpose of entering into the transactions contemplated by
the Purchase Agreement and Section 4, and has incurred no costs or expenses or
liability or obligations prior to the date of this Agreement and, (i) except as
provided in this Agreement or another agreement between the Manager or its
affiliates and MCG or its affiliates, MCG shall not be liable for any cost,
expense, liability or obligation of the Company incurred prior to the date of
this Agreement and (ii) the Manager and the Keystone Investor, jointly and
severally, shall indemnify, defend and hold MCG harmless from and against any
loss or liability incurred by MCG arising from a breach by the Manager of its
representations and warranties made in this Section 15.12(b).

 

Section 33.13       No Third Party Beneficiaries.  Notwithstanding anything to
the contrary contained herein, no provision of this Agreement is intended to
benefit any party other than the Members hereto and their successors and assigns
in the Company and no provision hereof shall be enforceable by any other
Person.  Without limiting the foregoing, no creditor of, or other Person doing
business with, the Company or the Project shall be a beneficiary of, or have the
right to enforce, any of the provisions of this Agreement.

 

Section 33.14       Waiver of Trial by Jury.  With respect to any dispute
arising under or in connection with this Agreement or any related agreement,
each Member hereby irrevocably waives all rights it may have to demand a jury
trial. This waiver is knowingly, intentionally and voluntarily made by the
members and each Member acknowledges that none of the other Members nor any
person acting on behalf of the other parties has made any  representation of
fact to induce this waiver of trial by jury or in any way to modify or nullify
its effect. Each Member further acknowledges that it has been represented (or
has had the opportunity to be represented) in the signing of this agreement and
in the making of this waiver by independent legal counsel, selected of its own
free will, and that it has had the opportunity to discuss this waiver with
counsel.  Each of the Members further acknowledges that it has read and
understands the meaning and significations of this waiver provision.

 

Section 33.15       Taxation as Partnership.  The Members intend and agree that
the Company will be treated as a partnership for United States federal, state
and local income tax purposes.  Each Member and the Company agrees that it will
not cause or permit the Company to: (i) be excluded from the provisions of
Subchapter K of the Code, under Code Section 761, or otherwise, (ii) file the
election under Regulations Section 301.7701-3 (or any successor provision) which
would result in the Company being treated as an entity taxable as a corporation
for federal, state or local tax purposes or (iii) do anything that would result
in the Company not being treated as a “partnership” for United States federal
and, as applicable, foreign, state and local income tax purposes.  Each Member
and the Company shall file all tax returns and shall

 

38

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otherwise take all tax and financial reporting positions in a manner consistent
with such treatment.

 

 

[Remainder of page intentionally left blank]

 

 

39

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the undersigned have set their hands as of the date first
above written.

 

 

[KEYSTONE MANAGER]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

[MACK-CALI INVESTOR]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

[KEYSTONE INVESTOR]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

Schedule of Members

 

(as of [DATE], 2014)

 

Name

 

Capital Contributions

 

Percentage Interest

 

[KEYSTONE MANAGER]
c/o Keystone Property Group, L.P.
One Presidential Blvd., Suite 300
Bala Cynwyd, PA 19004
Attn: William Glazer

 

$

500.00

 

0.0000

%

 

 

 

 

 

 

[MACK-CALI INVESTOR]
c/o Mack-Cali Realty Corporation
343 Thornall Street
Edison, New Jersey 08837
Attn.: Mitchell E. Hersh,
President and Chief Executive Officer

 

$[AMOUNT]* [MCG]
Class [1/2] Capital
Contribution

$[AMOUNT] Supplemental
Capital Contribution

 

[    ]

%

 

 

 

 

 

 

[KEYSTONE INVESTOR]
c/o Keystone Property Group, L.P.
One Presidential Blvd., Suite 300
Bala Cynwyd, PA 19004 Attn:
William Glazer

 

$[AMOUNT] Class 1
Capital Contribution

$[AMOUNT] Supplemental
Capital Contribution

 

[    ]

%

 

 

 

 

 

 

TOTAL:

 

$[AMOUNT]

 

100.0000

%

 

--------------------------------------------------------------------------------

*  The MCG Capital Contribution for each joint venture will be:

 

Taxter Corporate Park, 555/565 Taxter Road, Elmsford, NY - $5,900,000 Class 1
Capital Contribution and a $5,060,757 MCG Class 2 Capital Contribution

 

Taxter Corporate Park, 570 Taxter Road, Elmsford, NY - $995,000 Class 1 Capital
Contribution and a $44,243 MCG Class 2 Capital Contribution

 

Talleyrand Office Park, 200/220 White Plains Road, Tarrytown, NY - $5,200,000.00
MCG Class 2 Capital Contribution

 

17-17 Route 208 North, Fair Lawn, NJ - $461,000.00 MCG Class 2 Capital
Contribution

 

30 Knightbridge Road, Piscataway, NJ - None

 

412 Mt. Kemble Avenue, Morris Township, NJ - None

 

470 Chestnut Ridge Road, Woodcliff Lake, NJ - $900,000.00 MCG Class 2 Capital
Contribution

 

--------------------------------------------------------------------------------

 

400 Chestnut Ridge Road, Woodcliff Lake, NJ - $1,000,000.00 MCG Class 2 Capital
Contribution

 

530 Chestnut Ridge Road, Woodcliff Lake, NJ - $1,500,000.00 MCG Class 2 Capital
Contribution

 

Soundview Plaza, 1266 East Main Street, Stamford, CT - $8,054,569.00 MCG Class 2
Capital Contribution

 

--------------------------------------------------------------------------------

 

EXHIBIT B

 

Operating and Capital Budgets

 

[Attached]

 

--------------------------------------------------------------------------------

 

EXHIBIT C

 

Purchase Agreement

 

[Attached]

 

EXHIBIT L

 

--------------------------------------------------------------------------------

 

SCHEDULE 2.3

 

PURCHASERS, SELLERS AND PROPERTIES

 

Property

 

Seller

 

Purchaser

Soundview Plaza
1266 E. Main Street
Stamford, CT

 

1266 Soundview Realty L.L.C.

 

H’Y2 Stamford, LLC

 

 

 

 

 

400 Chestnut Ridge Road
Woodcliff Lake, NJ

 

400 Chestnut Realty L.L.C.

 

H’Y2 400 Chestnut Ridge, LLC

 

 

 

 

 

470 Chestnut Ridge Road
Woodcliff Lake, NJ

 

470 Chestnut Realty L.L.C.

 

H’Y2 470 Chestnut Ridge, LLC

 

 

 

 

 

530 Chestnut Ridge Road
Woodcliff Lake, NJ

 

530 Chestnut Realty L.L.C.

 

H’Y2 530 Chestnut Ridge, LLC

 

 

 

 

 

412 Mt. Kemble Avenue
Morris Township, NJ

 

Kemble Plaza II Realty L.L.C.

 

H’Y2 Mt Kemble, LLC

 

SCHEDULE 2.3

 

--------------------------------------------------------------------------------

 

SCHEDULE 7.4

 

ROFO PARTIES

 

William L. Mack

David Mack

Earle I. Mack

The William and Phyllis Mack Foundation, Inc.

The David and Sondra Mack Foundation, Inc.

Mr. Fredric Mack

Mr. Richard Mack

Mr. Stephen Mack

Mitchell E. Hersh

Harvey Caplan

Robert Caplan

James Clabby

James J. Cusack

Frank DiMaria

Edmund Dollinger

Rona Dollinger Ten Year Annuity Trust

Susan Dollinger

Eric A. Schwartz Living Trust dated 8/27/81

William Finger

Elizabeth Finger

Sigrid S. Franzblau

Joanne Guerrini

Goldberg & Associates

Ralph Henig

Jeffrey Kennemer

Charles Liggio

Michael L. Schwartz Living Trust dated 7/19/99

Estate of Kathleen T. Pitney

Professional Investment Associates

Jeffrey Schotz

Robert Stehr

Trust f/b/o Tilda Costello

Shackelford Farrior Investments

Mary Molina

Arthur P. Troast

Arthur L. Troast

Anne Troast Hansen

The Andrew Mack 4/30/97 Trust

The Beatrice Mack 4/30/97 Trust

 

SCHEDULE 7.4

 

--------------------------------------------------------------------------------

 

SCHEDULE 8.1(f)(i)

 

TERMINATION NOTICES

 

NONE

 

SCHEDULE 8.1(f)(i)

 

--------------------------------------------------------------------------------

 

SCHEDULE 8.1(f)(ii)

 

TENANT ALLOWANCES AND LEASING COMMISSIONS

 

Tenant Improvements

 

Building

 

Tenant

 

Amount

 

30 Knightsbridge

 

Qualcare

 

Turn-Key

 

30 Knightsbridge

 

Paycheck North America

 

$

121,552

 

 

Leasing Commissions

 

Building

 

Tenant

 

Broker

 

Amount

 

30 Knightsbridge

 

AT&T

 

C&W of NJ

 

$

205,000.00

 

30 Knightsbridge

 

AT&T

 

C&W of NJ

 

$

 60,375.00

 

30 Knightsbridge

 

RGN-Piscataway LLC

 

 

 

$

 45,333.82

 

 

SCHEDULE 8.1(f)(ii)

 

--------------------------------------------------------------------------------

 

SCHEDULE 8.1(l)

 

ROFO RIGHTS

 

CONTRIBUTION AND EXCHANGE AGREEMENT

 

THIS CONTRIBUTION AND EXCHANGE AGREEMENT (the “Agreement”) made this 18th day of
September, 1997 by and among the parties set forth on Exhibit A annexed hereto
and made a part hereof (collectively, the “MK Contributors”), the parties set
forth on Exhibit A-l annexed hereto and made a part hereof (collectively, the
“MK Entities”), each having an address at 370 West Passaic Street, Rochelle
Park, New Jersey 07662, the parties set forth on Exhibit A-2 annexed hereto and
made a part hereof (collectively, the “Patriot Contributors”), the parties set
forth on Exhibit A-3 annexed hereto and made a part hereof (collectively, the
“Patriot Entities”), and Patriot American Management and Leasing Corporation
(“PAM”), each having an address at 3030 LBJ Freeway, Suite 1500, Dallas, Texas
75234; (the MK Contributors and the Patriot Contributors shall collectively be
referred to as the “Mack Contributors” and each individually a “Mack
Contributor”); (the MK Entities and the Patriot Entities shall collectively be
referred to as the “Mack Entities” and each individually a “Mack Entity”); (the
Mack Contributors and the Mack Entities shall collectively be referred to as
“MACK”) and CALI REALTY, L.P., a Delaware limited partnership (“CRLP”) and CALI
REALTY CORPORATION, a Maryland corporation (“Cali”), each having an address at
11 Commerce Drive, Cranford, New Jersey 07016.

 

RECITALS

 

A.                             The Mack Contributors and their respective
partners are, collectively, the owners of one-hundred (100%) percent of their
respective partnership, limited liability company and/or other ownership
interests in and to the Mack Entities (to the extent any of the Mack Entities
are contributed to CRLP by assignment of partnership interest as is contemplated
by Section 1.2 hereof, such Mack Entities are hereinafter referred to as the
“Contributed Entities”). The Mack Entities own one-hundred (100%) percent of the
respective properties and one-hundred (100%) percent of the respective ground
lessees’ interests in the ground leases set forth in Schedules l.l(a)(i) and
l.l(a)(ii), respectively.

 

B.                             MACK owns, develops and manages various
commercial properties located throughout New Jersey, New York, Texas, Arizona,
Florida, Pennsylvania, Nebraska, Iowa and California. Cali, through CRLP and
certain affiliated entities of CRLP, similarly owns, develops and manages
various commercial properties located throughout New Jersey, New York,
Pennsylvania and Connecticut.

 

C.                             MACK, CRLP and Cali have determined that it is in
the best interests of the parties’ long term strategic growth to combine their
respective properties and related assets. In order to effectuate this
combination, MACK has agreed (i) to contribute certain properties, ground leases
and/or one-hundred (100%) percent of its partnership, limited liability company
and/or other ownership interests in and to certain Mack Entities to CRLP or, at
CRLP’s direction,

 

SCHEDULE 8.1(l)

 

1

--------------------------------------------------------------------------------

 

(g)                                         all books, records, promotional
material, tenant data, leasing material and forms, past and current rent rolls,
files, statements, tax returns, market studies, keys, plans, specifications,
reports, tests and other materials of any kind owned by or in the possession of
MACK which are or may be used in the operation of the Real Property or Personal
Property (collectively, the “Books and Records”); and

 

(h)                                        all other rights, privileges and
appurtenances owned by MACK, 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 Security Deposits, the
Tradenames, the Intangible Property, the Books and Records, the property rights
set forth in subparagraph (h) above and all other property interests being
conveyed hereunder are hereinafter collectively referred to as the “Property”.

 

1.2                           With respect to the Property to be contributed by
assignment of partnership interest, the Mack Contributors shall contribute and
shall cause their respective partners to contribute to CRLP or, at CRLP’s
direction, to its Subsidiary Partnerships, the Contributed Entities to be
designated by the Mack Contributors by assignment of one-hundred (100%) percent
of their rights, title and interests, in all of their ownership rights and
interests in and to the Contributed Entities free and clear of any and all Hens,
mortgages, encumbrances or security interests (the “Contributed Interests”).

 

1.3                           In the event the Mack Contributors determine, in
their sole discretion, not to contribute or are otherwise unable to contribute a
Mack Entity by the assignment of Contributed Interest pursuant to Section 1.2,
the Mack Entities owning all remaining Property shall, subject to Section 3.4,
contribute the Property owned by such Mack Entities to CRLP or, at CRLP’s
direction, to its Subsidiary Partnerships, by deed transfer or assignment of
Ground Lease at Closing.

 

The Property conveyed by deed transfer or assignment of Ground Lease pursuant to
Section 1.3 and/or the Property contributed by assignment of the Contributed
Interests pursuant to Section 1.2 and all other property interests being
contributed and conveyed hereunder shall hereinafter collectively be referred to
as the “Exchange Property”.

 

SCHEDULE 8.1(l)

 

--------------------------------------------------------------------------------

 

2.                                      PAYMENT TERMS.

 

24.                               NOTICE.

 

All notices, demands, requests, or other writings in this Agreement provided to
be given or made or sent, or which may be given or made or sent, by either party
hereto to the other, shall be in writing and shall be delivered by depositing
the same with any nationally recognized overnight delivery service, Or by
telecopy or fax machine, in either event with alt transmittal fees prepaid,
properly addressed, and sent to the following addresses:

 

If to Cali or CRLP:

c/o Cali Realty Corporation

 

11 Commerce Drive

 

Cranford, New Jersey 07016

 

Attn: Roger W. Thomas, Esq.

 

(908) 272-8000 (tele.)

 

(908) 272-6755 (fax)

 

 

with a copy to:

Pryor, Cashman, Sherman & Flynn

 

410 Park Avenue

 

New York, New York 10022

 

Attn: Jonathan A. Bernstein, Esq.

 

(212) 326-0425 (tele.)

 

(212) 326-0806 (fax)

 

SCHEDULE 8.1(l)

 

68

--------------------------------------------------------------------------------

 

If to MACK:

The Mack Companies

 

370 West Passaic Street

 

Rochelle Park, New Jersey 07662

 

Attn: Mr. Mitchell Hersh

 

(201) 368-0900 (tele.)

 

(201) 368-0349 (fax)

 

 

 

and

 

 

If to PAM:

Patriot American Management and Leasing Corporation

 

3030 LBJ Freeway

 

Suite 1500

 

Dallas, Texas 75634

 

Attn: John Bohlmann

 

(972) 888-8000 (tele.)

 

(972) 888-8029 (fax)

 

 

with a copy to:

Battle Fowler LLP

 

75 East 55th Street

 

New York, New York 10022

 

Attn: Martin L. Edelman, Esq.

 

(212) 856-7000 (tele.)

 

(212) 856-7808 (fax)

 

or to such other address as either party may from time to time designate by
written notice to the other or to the Escrow Agent Notices given by
(i) overnight delivery service as aforesaid shall be deemed received and
effective on the first business day following such dispatch and (ii) telecopy or
fax machine shall be deemed given at the time and on the date of machine
transmittal provided same is sent prior to 4:00 p.m. on a business day (if sent
later, then notice shall be deemed given on the next business day) and if the
sending party receives a written send (1) confirmation on its machine and
forwards a copy thereo f 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.

 

SCHEDULE 8.1(l)

 

--------------------------------------------------------------------------------

 

received under Section 27.1 (iv)(A) and this Section (iv)(B) the holders of the
Units retain an amount equal to the amount described in Section 27.1(iv)(A). For
purposes of calculating the amounts payable pursuant to clause (iv) of the
preceding sentence, the amount of taxes payable by a holder of Units shall be
calculated by assuming a tax rate equal to the highest combined marginal rate of
federal, state and local tax applicable to an individual in the jurisdiction in
which such holder of Units is a taxpayer (and if such taxpayer, either directly
or indirectly, is subject to tax in more than one state or local jurisdiction,
the state or local tax rate to be used in the foregoing combined marginal rate
shall be the highest rate of tax in such jurisdiction) and by assuming that such
individual has no tax attributes that would otherwise reduce such tax payments.
For purposes of this Agreement, the term “Built-in Gain” for any Exchange
Property shall mean the excess, if any, of the fair market value of such
Exchange Property on the Closing Date over such Exchange Property’s adjusted tax
basis for federal income tax purposes on such date. MACK agrees to cooperate
with Cali and CRLP regarding the calculation of the amount of actual Built-in
Gain attributable to any Exchange Property recognized upon any transfer. In the
event an Exchange Property is sold with the consent of William Mack (or, if he
shall not be alive, his successor) prior to the Restricted Period set forth on
Schedule 27.1 for such Exchange Property, then the Restricted Period for other
Exchange Property (set forth in Schedule 27.1 and designated by William Mack)
having an Allocated Property Value approximately equal to the Allocated Property
Value of the first Exchange Property being sold shall be extended for a time
period equal to the period from the date on which the sale of such Exchange
Property closes to the end of the Restricted Period for such Exchange Property.
The provisions of this Section 27.1 shall survive the Closing.

 

27.2                          During the Restricted Period, CRLP, Call and their
Subsidiaries (including, without limitation, any Permitted Assignee), may
dispose of any of the Exchange Property at any time in connection with (i) the
sale of all or substantially all of the properties owned by CRLP under such
terms and conditions which the Board, in its sole judgment, determines to be in
the best interests of Cali and its public stockholders, or (ii) a sale
(including without limitation a transfer to a secured lender in lieu of
foreclosure) which the Board, in its sole judgment, determines is reasonably
necessary (1) to satisfy any material monetary default on any unsecured debt,
judgment or liability of CRLP, Cali or any Subsidiary Partnership when they
become due (at maturity or otherwise) or (2) to cure or satisfy any material
monetary default on any mortgage, secured by the Exchange Property; provided,
however, that no such sales will be made under clause (ii) unless CRLP is unable
to settle or refinance any such debts, judgments or liabilities, or cure or
satisfy any such defaults, after making commercially reasonable efforts to do so
under then prevailing market conditions. In the event the Board, after CRLP has
made the commercially reasonable efforts described in the preceding sentence, in
its sole judgment, determines that it is reasonably necessary to dispose of any
of the Exchange Property to satisfy a material monetary default on any unsecured
debt, judgment or liability of CRLP when it becomes due (at maturity or
otherwise), CRLP covenants and agrees that it shall treat all of its properties
proportionately, including the Exchange Property, in its determination of what
properties to dispose of to satisfy such material debt, judgment or liability
and shall use commercially reasonable efforts to minimize any adverse tax
consequences to holders of me Units and all

 

SCHEDULE 8.1(l)

 

73

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members of the Cali Group or the MACK Group. Such proportionate treatment shall
mean that the ratio of the unencumbered fair market value of the Exchange
Property that is sold over the unencumbered fair market value of the total
amount of property that is sold shall be no greater than the ratio of the
unencumbered fair market value of the total Exchange Property over the
unencumbered fair market value of the total CRLP/Cali portfolio. In the case of
any disposition of any of the Exchange Property pursuant to this Section 27.2,
holders of the Units may attempt to obtain title to the Exchange Property in
question so long as any equity in the Exchange Property which CRLP may otherwise
be seeking to preserve is not lost or jeopardized. Moreover, in the event of an
anticipated transfer of any of the Exchange Property to a secured lender in lieu
of foreclosure or foreclosure, CRLP shall use commercially reasonable efforts to
provide holders of the Units the right to (a) cure the default including the
right to loan CRLP the funds necessary to cure the default on an unsecured
basis, as well as the right to limit such funds to CRLP and to receive security
for any such loan from CRLP (or its appropriate affiliate) in the form of a
second mortgage secured solely by such Exchange Property (but only if the lender
or lenders holding any prior mortgage or mortgages on the relevant Exchange
Property expressly consent in writing to the grant of the second mortgage,
provided that neither such loan, whether secured or unsecured by the holders of
the Units nor the granting of any such second mortgage to such holders violates
any covenant in any loan agreement of CRLP or any of its affiliates);
(b) acquire, for one Unit (if the value of a Unit at the time of such
acquisition is not more than one-thousand ($1,000.00) dollars or, if so, then
for a fraction of a Unit, such fraction’s value being equal to one-thousand
($1,000) dollars), such Exchange Property from CRLP subject to the debt or
liability; or (c) permit holders of the Units to exercise CRLP’s right of
redemption with respect to such Exchange Property; provided, however, that CRLP
shall not have any obligation to grant holders of the Units the rights described
in clauses (a) and/or (b) of this sentence until holders of the Units (whose
financial position and resources as determined by CRLP using commercially
reasonable standards to be satisfactory for the purpose of acting as indemnitors
pursuant to this proviso) have agreed with CRLP in writing to indemnify and hold
harmless CRLP, Cali and their affiliates from and against all costs (including
reasonable attorneys fees), expenses, taxes (including without limitation any
deed, mortgage or real estate transfer taxes), claims, judgments, liabilities or
damages incurred or arising from or in connection with or attributable to or
resulting from the grant or exercise of such rights, or the acquisition of such
»·’ Exchange Property by holders of the Units, but only to the extent such costs
would not have been incurred otherwise.

 

27.3                         After the expiration of the Restricted Period,
CRLP, Cali may dispose of any of the Exchange Property at any time;
provided however, that, CRLP, Cali and their Subsidiaries shall use commercially
reasonable efforts to prevent any such sale, transfer or other disposition of
the Exchange Property, or any distribution of the Exchange Property which is
treated as a taxable disposition, from resulting in the recognition of
Built-in-Gain by holders of the Units, and provided further that holders of the
Units shall have a right of first offer as set forth in Section 27.4 below.

 

SCHEDULE 8.1(l)

 

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27.4                          In the event CRLP desires to sell or otherwise
desires to dispose of, or receives an offer to purchase any of, the Exchange
Property pursuant to Section 27.2 or 27.3 above, CRLP shall give notice (the
“Offering Notice”) thereof to holders of the Units. The Offering Notice shall
specify the nature of the sale, and the consideration and other terms upon which
it intends to undertake such sale. Within thirty (30) days thereafter, holders
of the Units may elect, by notice to CRLP, to purchase the Exchange Property
which is the subject of the Offering Notice. If holders of the Units elect to so
purchase, then such purchase shall be consummated on the terms and conditions
set forth in the Offering Notice; provided, however, to the extent that the
Exchange Property in question is then subject to separately allocated debt and
the lender thereof consents to holders of the Units assuming such debt, or
acquiring such Exchange Property subject to such debt, at no cost, expense or
liability to CRLP (or if there is any such cost, liability or expense, holders
of the Units shall have reimbursed CRLP for all such cost, liabilities or
expenses and agreed in writing with CRLP to indemnify and hold harmless CRLP
from and against any additional costs, liabilities or expenses arising from or
in connection with or attributable to (i) such assumption, (ii) the acquisition
of the Exchange Property subject to such debt or (iii) the payment of any such
costs, liabilities or expenses, but only to the extent such costs would not have
been incurred otherwise), CRLP will convey the Exchange Property subject to such
debt Holders of the Units may use their Units as currency, in whole or in part,
in connection with the purchase of any of the Exchange Property from CRLP
pursuant to this Section 27.4. In addition, as part of a transfer of any
Exchange Property pursuant to Section 27.2(H) (I) or (2), if holders of the
Units can cause the third party which is otherwise to obtain title to any
Exchange Property to accept Units, in whole or in part, in lieu of obtaining
title to such Exchange Property, holders of the Units shall have the right to do
so provided that such third party agrees to be bound by all of the terms and
conditions of the OP Agreement and performs in accordance therewith, including,
without limitation, performing the requirements pertaining to a transfer of
Units (other than the need to obtain the consent of the general partner of CRLP,
which consent is deemed to be given pursuant to the terms of Section 27.4); in
such event, title to the Exchange Property which would otherwise have been
transferred to such third party shall be transferred to holders of the Units. If
within the thirty (30) day period during which holders of the Units have the
right to elect to purchase the Exchange Property for sale under the Offering
Notice, holders of the Units do not make the election or fail to respond to the
Offering Notice, then CRLP may undertake to sell such Exchange Property on such
terms and conditions as it shall elect; provided, however, that the sale of any
of the Exchange Property to which this Section 27.4 applies shall not be
consummated at less than 95% of the price as specified in the Offering Notice
unless CRLP again offers the Exchange Property to holders of the Units upon such
more favorable terms and conditions (in which case the thirty (30) day period
described above shall be reduced to ten (10)). If holders of the Units notify
CRLP of their intention not to purchase the Exchange Property as set forth in
the revised Offering Notice, then CRLP may consummate the sale at any time
thereafter, provided that such sale shall not be consummated at less than 95% of
the price specified in the revised Offering Notice unless CRLP again complies
with the provisions of this Section 27.4.

 

SCHEDULE 8.1(l)

 

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