Exhibit 10.2

EXECUTION COPY

NON-PORTFOLIO PROPERTY INTEREST CONTRIBUTION AGREEMENT

____________________

By and Among

MR. STANLEY C. GALE,

MR. MARK YEAGER,

GCF II INVESTOR LLC,

THE GALE INVESTMENTS COMPANY, LLC,

GALE & WENTWORTH VREELAND, LLC,

GALE URBAN SOLUTIONS LLC,

MSGW-ONE CAMPUS INVESTORS, LLC,

MACK-CALI REALTY ACQUISITION CORP.,

AND

MACK-CALI REALTY L.P.

_______________________

Dated as of May 9, 2006

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TABLE OF CONTENTS

 

 

 

Page

 

Article I DEFINITIONS

 

3

 

Section 1.01.

 

Certain Defined Terms

 

3

 

Section 1.02.

 

Definitions

 

8

 

Section 1.03.

 

Interpretation and Rules of Construction

 

9

 

 

 

 

 

 

 

Article II CONTRIBUTIONS

 

10

 

Section 2.01.

 

Formation of the JV LLC’s

 

10

 

Section 2.02.

 

Contribution of Non-Portfolio Property Interests

 

10

 

Section 2.03.

 

Contribution of Funds

 

11

 

Section 2.04.

 

Option to Contribute the Optional Non-Portfolio Property Interests

 

12

 

Section 2.05.

 

Contribution of Additional Funds

 

13

 

Section 2.06.

 

Conditions Precedent to the Obligations of MCRAC

 

13

 

Section 2.07.

 

One Newark Center Interest

 

15

 

 

 

 

 

 

 

Article III ISSUANCE OF MEMBERSHIP INTERESTS

 

16

 

Section 3.01.

 

Issuance of Membership Interests to Sellers

 

16

 

Section 3.02.

 

Issuance of Membership Interests to MCRAC

 

16

 

 

 

 

 

 

 

Article IV CLOSING

 

16

 

Section 4.01.

 

Closing Date

 

16

 

Section 4.02.

 

Closing Deliveries

 

16

 

Section 4.03.

 

Special Distributions of the JV LLC’s

 

17

 

 

 

 

 

 

 

Article V REPRESENTATIONS AND WARRANTIES OF THE SELLERS

 

17

 

Section 5.01.

 

Organization, Authority and Qualification of the Sellers

 

17

 

Section 5.02.

 

Ownership of the Membership Interests; Real Property

 

18

 

Section 5.03.

 

No Conflict

 

19

 

Section 5.04.

 

Litigation

 

19

 

Section 5.05.

 

Consents

 

19

 

Section 5.06.

 

Entity Status

 

19

 

Section 5.07.

 

Documents

 

20

 

Section 5.08.

 

Right To Transfer

 

20

 

Section 5.09.

 

Capital Contribution

 

20

 

Section 5.10.

 

Liabilities

 

20

 

Section 5.11.

 

Compliance

 

20

 

Section 5.12.

 

Brokerage Agreement

 

21

 

Section 5.13.

 

Leasing Commissions; Tenant Improvements

 

21

 

Section 5.14.

 

Environmental

 

21

 

Section 5.15.

 

Zoning

 

21

 

Section 5.16.

 

Tax Certiorari Proceedings

 

21

 

Section 5.17.

 

Surveys

 

21

 

Section 5.18.

 

Private Letter Rulings

 

21

 

 

i

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Section 5.19.

 

Foreign Person

 

22

 

Section 5.20.

 

Due Diligence Information

 

22

 

 

 

 

 

 

 

Article VI REPRESENTATIONS AND WARRANTIES OF MCRAC AND MCRLP

 

22

 

Section 6.01.

 

Organization and Authority of MCRAC and MCRLP

 

22

 

Section 6.02.

 

No Conflict

 

22

 

Section 6.03.

 

Litigation

 

22

 

Section 6.04.

 

Independent Investigation; Representations

 

23

 

 

 

 

 

 

 

Article VII ADDITIONAL AGREEMENTS

 

23

 

Section 7.01.

 

Notification of Certain Matters

 

23

 

Section 7.02.

 

Further Action

 

23

 

Section 7.03.

 

Third-Party Consents; Additional Closings; Buy-Sell

 

24

 

Section 7.04.

 

Assignment of Economic Interests

 

25

 

Section 7.05.

 

Effect of Termination

 

25

 

Section 7.06.

 

Development of Jefferson Real Property

 

25

 

Section 7.07.

 

Reimbursement for MCRAC Employee Assistance

 

26

 

 

 

 

 

 

 

Article VIII INDEMNIFICATION

 

26

 

Section 8.01.

 

Survival of Representations and Warranties

 

26

 

Section 8.02.

 

Indemnification by the Sellers

 

26

 

Section 8.03.

 

Indemnification by MCRAC

 

26

 

Section 8.04.

 

Limits on Indemnification

 

26

 

Section 8.05.

 

Notice of Loss; Third Party Claims

 

27

 

Section 8.06.

 

Remedies

 

28

 

 

 

 

 

 

 

Article IX GENERAL PROVISIONS

 

28

 

Section 9.01.

 

Expenses

 

28

 

Section 9.02.

 

Notices

 

29

 

Section 9.03.

 

Public Announcements; Confidentiality

 

30

 

Section 9.04.

 

Severability

 

30

 

Section 9.05.

 

Entire Agreement

 

31

 

Section 9.06.

 

Assignment

 

31

 

Section 9.07.

 

Waiver

 

31

 

Section 9.08.

 

No Third Party Beneficiaries

 

31

 

Section 9.09.

 

Currency

 

31

 

Section 9.10.

 

Governing Law

 

31

 

Section 9.11.

 

Waiver of Jury Trial

 

32

 

Section 9.12.

 

Counterparts

 

32

 

Section 9.13.

 

Cooperation

 

32

 

Section 9.14.

 

Specific Performance

 

32

 

 

 

 

 

 

 

ii

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EXHIBITS AND SCHEDULES

Exhibit A

 

55 Corporate LLC Operating Agreement

Exhibit B

 

Bedminster LLC Operating Agreement

Exhibit C

 

Belmar LLC Operating Agreement

Exhibit D

 

Campus LLC Operating Agreement

Exhibit E

 

Jefferson LLC Operating Agreement

Exhibit F

 

Kimball LLC Operating Agreement

Exhibit G

 

Newark LLC Operating Agreement

Exhibit H

 

Rock LLC Operating Agreement

Exhibit I

 

Transit LLC Operating Agreement

Exhibit J

 

Vreeland LLC Operating Agreement

Exhibit K

 

Model Economic Benefits and Burdens LLC Operating Agreement

 

 

 

Schedule 5.04

 

Litigation

Schedule 5.05

 

Non-Portfolio Consent

Schedule 5.07

 

Organizational Documents of Seller

Schedule 5.10

 

Liabilities

Schedule 5.13

 

Leasing Commissions; Tenant Improvements

Schedule 5.16

 

Tax Certiorari Proceedings

Schedule 5.17

 

Surveys

 

iii

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NON-PORTFOLIO PROPERTY INTEREST CONTRIBUTION AGREEMENT (this “Agreement”), dated
as of May 9, 2006, by and among GCF II Investor LLC, a Delaware limited
liability company (“GCF II”), Gale & Wentworth Vreeland, LLC, a New Jersey
limited liability company (“GWV”), MSGW-One Campus Investors, LLC, a Delaware
limited liability company (“MSGW”), Mr. Stanley C. Gale (“SG”), Mr. Mark Yeager
(“MY”), The Gale Investments Company, LLC, a Delaware limited liability company
(“Gale Investments”), Gale Urban Solutions LLC, a New Jersey limited liability
company (“Gale Urban,” and collectively with GW, GCF II, GWV, MSGW, SG, MY and
Gale Investments, the “Sellers”), Mack-Cali Realty Acquisition Corp., a Delaware
corporation, or its designee (“MCRAC”), and Mack-Cali Realty, L.P., a Delaware
limited partnership, or its designee (“MCRLP”).

WHEREAS, MSGW owns 100% of the issued and outstanding membership interests in
One Campus Associates LLC, a Delaware limited liability company (the “3 Campus
Drive Interest”);

WHEREAS, GCF II owns 33.33% of the issued and outstanding membership interests
in Gale Kimball, L.L.C., a Delaware limited liability company (the “100 Kimball
Drive Interest”);

WHEREAS, GCF II will, as of the applicable Closing (as defined herein), own an
equity interest in a limited liability company which will own (directly or
indirectly) an interest in the Jefferson Real Property (as defined herein) (the
“One Jefferson Road Interest”);

WHEREAS, GWV owns 50% of the issued and outstanding membership interests in 12
Vreeland Associates LLC, a New Jersey limited liability company (the “12
Vreeland Interest”);

WHEREAS, SG and MY collectively own 51.25% of the issued and outstanding
membership interests in GW Bedminster LLC, a New Jersey limited liability
company (the “GW Bedminster Interest”);

WHEREAS, SG owns 3.56% of the issued and outstanding membership interests in
Pluckemin Holdings LLC, a Delaware limited liability company (the “Pluckemin
Interest,” and collectively with the GW Bedminster Interest, the “Bedminster
Interest”);

WHEREAS, Gale Investments owns 100% of the issued and outstanding membership
interests in Gale Belmar, L.L.C., a Delaware limited liability company (the
“Belmar Interest”);

WHEREAS, Gale Investments owns 100% of the issued and outstanding membership
interests in Gale ONC Associates, L.L.C., a Delaware limited liability company
(the “One Newark Center Interest”);

WHEREAS, Gale Investments owns 50% of the issued and outstanding membership
interests in Rock-GW LLC, a Delaware limited liability company (the “Rock GW
Interest”);

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WHEREAS, GCF II will (indirectly through one of its wholly owned subsidiaries),
as of the applicable Closing, own 50% of the issued and outstanding membership
interests in Gale 55 Corporate Associates II LLC, a Delaware limited liability
company, or such entity as shall own the 55 Corporate Real Property (the “55
Corporate Interest”);

WHEREAS, Gale Urban owns 100% of the issued and outstanding membership interests
in Gale Broad Street, LLC, a New Jersey limited liability company (the “Newark
Transit Village Interest,” and collectively with the 3 Campus Drive Interest,
the 100 Kimball Drive Interest, the One Jefferson Road Interest, the 12 Vreeland
Interest, the Belmar Interest, the 55 Corporate Interest, the Bedminster
Interest, the Rock GW Office Interest (as defined herein) and the One Newark
Center Interest, the “Non-Portfolio Property Interests”);

WHEREAS, upon the terms and subject to the conditions of this Agreement, the
Sellers desire to contribute certain of the Non-Portfolio Property Interests to
certain of the JV LLC’s (as defined herein), and desire to grant an option to
MCRAC to cause the contribution of the Optional Non-Portfolio Property Interests
(as defined herein) to certain of the other JV LLC’s, in exchange for membership
interests in the applicable JV LLC’s as specified in each of the applicable
Limited Liability Company Operating Agreements (as defined herein);

WHEREAS, upon the terms and subject to the conditions of this Agreement, MCRAC
desires to, and MCRLP desire to cause MCRAC to, contribute to certain of the
applicable JV LLC’s the funds specified herein (the “Funds”) in exchange for the
applicable membership interests in each of the applicable JV LLC’s as specified
in each of the applicable Limited Liability Company Operating Agreements;

WHEREAS, upon the terms and subject to the conditions of this Agreement, MCRAC
may exercise its option with respect to the Optional Non-Portfolio Property
Interests (as defined herein) and, upon such exercise, may, and MCRLP may cause
MCRAC to, contribute to the JV LLC’s associated with the Optional Non-Portfolio
Property Interests certain additional funds as specified herein (the “Additional
Funds”) in exchange for the applicable membership interests in each of such
applicable JV LLC’s as specified in each of the applicable Limited Liability
Company Operating Agreements; and

WHEREAS, upon consummation of the contributions by the Sellers and MCRAC and
MCRLP to the applicable JV LLC’s contemplated hereby, the parties desire to have
each of the applicable JV LLC’s make a special distribution to each of the
applicable Sellers in an aggregate amount equal to the applicable portion of the
Funds and Additional Funds.

NOW, THEREFORE, in consideration of the promises and the mutual agreements and
covenants hereinafter set forth, and intending to be legally bound, the parties
hereby agree as follows:

2

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Article I

DEFINITIONS

Section 1.01           Certain Defined Terms. For purposes of this Agreement:

“55 Corporate LLC” means M-C 55 Corporate, LLC, a Delaware limited liability
company to be formed in accordance with the provisions of this Agreement.

“55 Corporate LLC Operating Agreement” means that certain limited liability
company operating agreement of 55 Corporate LLC, in the form attached hereto as
Exhibit A to this Agreement.

“55 Corporate Real Property” means the Declarant’s Rights and Obligations Under
Master Deed Creating 55 Corporate Drive Condominium, by and between Gale 55
Corporate Associates II LLC  and Gale 55 Corporate Associates LLC, to develop
that certain real property commonly known as and by the name Building IV at the
street number 55 Corporate Drive, Bridgewater, New Jersey.

“Action” means any claim, action, suit, arbitration, inquiry, proceeding or
investigation by or before any Governmental Authority.

“Affiliate” means, with respect to any specified Person, any other Person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified Person.

“Bedminster LLC” means M-C Bedminster, LLC, a Delaware limited liability company
to be formed in accordance with the provisions of this Agreement.

“Bedminster LLC Operating Agreement” means that certain limited liability
company operating agreement of Bedminster LLC, in the form attached hereto as
Exhibit B to this Agreement.

“Bedminster Real Property” means the real property known as and by the name The
Offices at Bedminster, suite numbers 500 & 550 located at Route 206, Bedminster,
NJ 07921.

“Belmar LLC” means M-C Belmar, LLC, a Delaware limited liability company to be
formed in accordance with the provisions of this Agreement.

“Belmar LLC Operating Agreement” means that certain limited liability company
operating agreement of Belmar LLC, in the form attached hereto as Exhibit C to
this Agreement.

“Belmar Real Property” means the real property known as and by the name The
Redevelopment Zone located in the Borough of Belmar, Block 66, lots 1,2-5,7,8-10
and 15; Block 86.01, lot 1 and the portion of East Railroad Avenue adjoining
said block and lot.

“Business Day” means any day that is not a Saturday, a Sunday or other day on
which banks are required or authorized by Law to be closed in The City of New
York.

3

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“Campus LLC” means M-C Campus, LLC, a Delaware limited liability company to be
formed in accordance with the provisions of this Agreement.

“Campus LLC Operating Agreement” means that certain limited liability company
operating agreement of Campus LLC, in the form attached hereto as Exhibit D to
this Agreement.

“Campus Real Property” means the real property known as and by the street number
3 Campus Drive, Parsippany NJ, 07054.

“Cash Contribution” means, as applicable, a Bedminster Cash Contribution, a
Belmar Cash Contribution, Campus Cash Contribution, Jefferson Cash Contribution,
Kimball Cash Contribution, Newark Cash Contribution, Rock Cash Contribution, 55
Corporate Cash Contribution, Transit Cash Contribution or Vreeland Cash
Contribution.

“Control” (including the terms “controlled by” and “under common control with”),
with respect to the relationship between or among two or more Persons, means the
possession, directly or indirectly or as trustee, personal representative or
executor, of the power to direct or cause the direction of the affairs or
management of a Person, whether through the ownership of voting securities, as
trustee, personal representative or executor, by contract, credit arrangement or
otherwise.

“Economic Benefits and Burdens” means, with respect to any Non-Portfolio
Property Interest, (i) the economic benefit of owning such Non-Portfolio
Property Interest as if the applicable JV LLC owned such interest directly,
including the benefit of any and all rights of the applicable Seller against any
other party to the related limited liability company operating agreement, the
right to receive an allocation of all profits which would otherwise be allocated
to the applicable Seller and the right to receive all distributions received by
the applicable Seller with respect to such Non-Portfolio Property Interest, and
(ii) the economic burden of owning such Non-Portfolio Property Interest as if
the applicable JV LLC owned such interest directly, including the obligation to
make any capital contributions required by such limited liability company
operating agreement and the allocation of all losses which would otherwise be
allocated to the applicable Seller with respect to such Non-Portfolio Property
Interest.

“Encumbrance” means any security interest, pledge, charge, option, right,
hypothecation, mortgage, lien, claim or other encumbrance.

“Environmental Law” means any applicable federal, state, county or municipal
statute, ordinance, rule, regulation, order, code, directive or requirement,
together with all successor statutes, ordinances, rules, regulations, orders,
codes, directives or requirements, of any Governmental Authority in any way
related to Hazardous Materials.

 “Governmental Authority” means any foreign, federal, national, supranational,
state, provincial, local or other government, governmental, regulatory or
administrative authority, agency, board, bureau, agency, instrumentality or
commission or any court, tribunal, or judicial or arbitral body.

4

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“Governmental Order” means any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority.

“Hazardous Materials” means (A) those substances included with the definitions
of any or more of the terms “hazardous substances,” “toxic pollutants”,
“hazardous materials”, “toxic substances”, and “hazardous waste” in the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
§ 9601 et seq. (as amended), the Hazardous Materials Transportation Act, as
amended, 49 U.S.C. Sections 1801 et seq., the Resource Conservation and Recovery
Act of 1976 as amended, 42 U.S.C. Section 6901 et seq., Section 311 of the Clean
Water Act, the New Jersey Environmental Rights Act, N.J.S.A. 2A:35A-1 et seq.,
the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11 et seq.,
the Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et seq., the New Jersey
Underground Storage of Hazardous Substances Act, N.J.S.A. 58:10A-21 et seq., and
any similar state or federal laws or any regulations issued under any such laws
and (B) petroleum, radon gas, lead based paint, asbestos or asbestos containing
material and polychlorinated biphenyls.

“Indemnified Party” means a MCRAC Indemnified Party or a Seller Indemnified
Party, as the case may be.

“Indemnifying Party” means the Sellers pursuant to Section 8.02 and MCRLP and
MCRAC pursuant to Section 8.03, as the case may be.

“Jefferson LLC” means M-C Jefferson, LLC, a Delaware limited liability company
to be formed in accordance with the provisions of this Agreement.

“Jefferson LLC Operating Agreement” means that certain limited liability company
operating agreement of Jefferson LLC, in the form attached hereto as Exhibit E
to this Agreement.

“Jefferson Real Property” means the real property known as and by the street
number One Jefferson Road, Parsippany, NJ 07054.

“JV LLC’s” means Campus LLC, Kimball LLC, Jefferson LLC, Vreeland LLC,
Bedminster LLC, Belmar LLC, Rock LLC, 55 Corporate LLC, Newark LLC and Transit
LLC.

“Kimball LLC” means M-C Kimball, LLC, a Delaware limited liability company to be
formed in accordance with the provisions of this Agreement.

“Kimball LLC Operating Agreement” means that certain limited liability company
operating agreement of Kimball LLC, in the form attached hereto as Exhibit F to
this Agreement.

“Kimball Real Property” means the real property known as and by the street
number 100 Kimball Drive, Parsippany, NJ 07054.

“Law” means any foreign, federal, national, supranational, state, provincial,
local or similar statute, law, ordinance, regulation, rule, code, order,
requirement or rule of law (including common law) in effect as of the date
hereof.

5

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“Liabilities” means any and all debts, liabilities and obligations, whether
accrued or fixed, absolute or contingent, matured or unmatured or determined or
determinable, including those arising under any Law, action or Governmental
Order and those arising under any contract, agreement, arrangement, commitment
or other undertaking. Liabilities include, with respect to any Non-Portfolio
Property Interest, economic obligations, including the obligation to make any
capital contributions required by such limited liability company operating
agreement and the allocation of all losses which would otherwise be allocated to
the applicable Seller.

“Limited Liability Company Operating Agreements” means the Bedminster LLC
Operating Agreement, the Belmar LLC Operating Agreement, the Campus LLC
Operating Agreement, the Jefferson LLC Operating Agreement, the Kimball LLC
Operating Agreement, the Newark LLC Operating Agreement, the Rock LLC Operating
Agreement, the 55 Corporate LLC, the Transit LLC Operating Agreement and the
Vreeland LLC Operating Agreement.

“Morgan Stanley Interests” means, collectively, the following entities and their
respective membership interests in MSGW: (a) Morgan Stanley Real Estate Fund
III, LP — 14.940004%; (b) MSP Real Estate Fund, LP — 11.962302%; (c) Morgan
Stanley Real Estate Investors III, LP — 0.69255%; (d) MSREF III Special Fund, LP
— 14.548803%; and (e) MSP Co-Investment Partnership, LP — 7.189701%.

“Newark LLC” means M-C Newark, LLC, a Delaware limited liability company to be
formed in accordance with the provisions of this Agreement.

“Newark LLC Operating Agreement” means that certain limited liability company
operating agreement of Newark LLC, in the form attached hereto as Exhibit G to
this Agreement.

“Newark Real Property” means the real property known as and by the name One
Newark Center, street number 1085 Raymond Blvd, Newark NJ, 07102.

“Non-Portfolio Real Properties” means, collectively, the Bedminster Real
Property, Belmar Real Property, Campus Real Property, Jefferson Real Property,
Kimball Real Property, Newark Real Property, Rock GW Development Property, 55
Corporate Real Property, Transit Real Property and Vreeland Real Property.

“Optional Non-Portfolio Property Interests” means the Bedminster LLC Interest
and the One Jefferson Road Interest.

 “Permitted Encumbrances” means statutory liens for current Taxes not yet due or
delinquent (or which may be paid without interest or penalties) or the validity
or amount of which is being contested in good faith by appropriate proceedings.

“Person” means any individual, partnership, firm, corporation, limited liability
company, joint venture, limited public company, limited liability partnership,
association, trust, unincorporated organization or other entity, as well as any
syndicate or group that would be deemed to be a person under Section 13(d)(3) of
the Securities Exchange Act.

“Praedium” means The Preadium Group LLC and its Affiliates.

6

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“Purchase Agreement” means that certain Membership Interest Purchase and
Contribution Agreement dated as of March 7, 2006, as amended, by and among SG,
SCG Holding Corp., a Delaware corporation, MCRLP and MCRAC.

“Rock-GW Development Property” means that certain development property located
in the Borough of Florham Park, New Jersey (Block 1401, Lot 1 and Block 1402,
Lot 1) that Rock GW LLC is currently in contract to acquire.

“Rock GW Office Interest” means a portion of the Rock GW Interest representing
approximately 600,000 square feet of office space to be developed at the Rock-GW
Development Property.

“Rock LLC” means M-C Rock, LLC, a Delaware limited liability company to be
formed in accordance with the provisions of this Agreement.

“Rock LLC Operating Agreement” means that certain limited liability company
operating agreement of Rock LLC, in the form attached hereto as Exhibit H to
this Agreement.

“Securities Act” means the Securities Act of 1933, as amended.

“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Tax” or “Taxes” mean all federal, state, county, local, foreign and other taxes
of any kind whatsoever (including, without limitation, income, profits, premium,
estimated, excise, sales, use, occupancy, gross receipts, franchise, ad valorem,
severance, capital levy, production, transfer, license, stamp, environmental,
withholding, employment, unemployment compensation, payroll related and property
taxes, import duties and other governmental charges or assessments), whether or
not measured in whole or in part by net income, and including deficiencies,
interest, additions to tax or interest, and penalties with respect thereto, and
including expenses associated with contesting any proposed adjustment related to
any of the foregoing.

“Transit LLC” means M-C Transit, LLC, a Delaware limited liability company to be
formed in accordance with the provisions of this Agreement.

“Transit LLC Operating Agreement” means that certain limited liability company
operating agreement of Transit LLC, in the form attached hereto as Exhibit I to
this Agreement.

“Transit Real Property” means the real property located at Newark Transit
Village, Westinghouse Building, Newark NJ (Block 47, Lot 40).

“Vreeland LLC” means M-C Vreeland, LLC, a Delaware limited liability company to
be formed in accordance with the provisions of this Agreement.

“Vreeland LLC Operating Agreement” means that certain limited liability company
operating agreement of Vreeland LLC, in the form attached hereto as Exhibit J to
this Agreement.

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“Vreeland Real Property” means the real property known as and by the street
number 12 Vreeland Road, Florham Park, NJ, 07932

Section 1.02.          Definitions. The following terms have the meanings set
forth in the Sections set forth below:

 

Definition

 

Location

“3 Campus Drive Interest”

 

Recitals

“12 Vreeland Interest”

 

Recitals

“55 Corporate Cash Contribution”

 

2.03(g)

“55 Corporate Interest”

 

Recitals

“100 Kimball Drive Interest”

 

Recitals

“Agreement”

 

Preamble

“Additional Funds”

 

Recitals

“Belmar Cash Contribution”

 

2.03(d)

“Belmar Interest”

 

Recitals

“Bedminster Cash Contribution”

 

2.05(a)

“Bedminster Interest”

 

Recitals

“Bedminster Option Period”

 

2.04(d)(iii)

“Binding Expert”

 

2.06(b)

“Campus Cash Contribution”

 

2.03(a)

“Closing”

 

4.01

“Closing Date”

 

4.01

“Funds”

 

Recitals

“Gale Expert”

 

2.06(b)

“Gale Investments”

 

Preamble

“Gale Urban”

 

Preamble

“GCF II”

 

Preamble

“GW Bedminster Interest”

 

Recitals

“Hills Drive”

 

2.04(d)(iii)

“Indemnification Threshold”

 

8.04(b)

“Jefferson Cash Contribution”

 

2.05(b)

“Kimball Cash Contribution”

 

2.03(b)

“Loss” or “Losses”

 

8.02

“MCRAC”

 

Preamble

“MCRAC Expert”

 

2.06(b)

“MCRAC Indemnified Party”

 

8.02

“MCRLP”

 

Preamble

“MSGW”

 

Preamble

“MY”

 

Preamble

“Newark Cash Contribution”

 

2.07(a)(ii)

“Newark Transit Village Interest”

 

Recitals

“Non-Portfolio Consents”

 

2.06(a)

“One Jefferson Option Period”

 

2.04(c)(ii)

“One Jefferson Road Interest”

 

Recitals

“One Newark Center Interest”

 

Recitals

 

8

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Definition

 

Location

“Option Period”

 

2.04

“Organizational Documents”

 

5.07

“Non-Portfolio Property Interests”

 

Recitals

“Pluckemin Interest”

 

Recitals

“Remediation”

 

2.06(b)

“Rock Cash Contribution”

 

2.03(g)

“Rock GW Interest”

 

Preamble

“SG”

 

Preamble

“Seller” or “Sellers”

 

Preamble

“Seller Indemnified Party”

 

8.03

“Third Party Claim”

 

8.05(b)

“Transit Cash Contribution”

 

2.03(e)

“TW”

 

Preamble

“Vreeland Cash Contribution”

 

2.03(c)

 

Section 1.03.          Interpretation and Rules of Construction. In this
Agreement, except to the extent otherwise provided or that the context otherwise
requires:

(a)           when a reference is made in this Agreement to an Article, Section,
Exhibit or Schedule, such reference is to an Article or Section of, or an
Exhibit or Schedule to, this Agreement unless otherwise indicated;

(b)           the table of contents and headings for this Agreement are for
reference purposes only and do not affect in any way the meaning or
interpretation of this Agreement;

(c)           whenever the words “include,” “includes” or “including” are used
in this Agreement, they are deemed to be followed by the words “without
limitation” whether or not they are in fact followed by such word or words of
similar import;

(d)           the words “hereof,” “herein” and “hereunder” and words of similar
import, when used in this Agreement, refer to this Agreement as a whole and not
to any particular provision of this Agreement;

(e)           all terms defined in this Agreement have the defined meanings when
used in any certificate or other document made or delivered pursuant hereto,
unless otherwise defined therein;

(f)            the definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms;

(g)           references to a Person are also to its successors and permitted
assigns;

(h)           the use of “or” is not intended to be exclusive unless expressly
indicated otherwise;

 

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(i)            references to “day” or “days” are to calendar days;

(j)            whenever used herein, the singular number shall include the
plural, the plural shall include the singular, and the use of any gender shall
be applicable to all genders; and

(k)           any reference in this Agreement to “writing” or comparable
expressions includes a reference to facsimile transmission or comparable
electronic (including e-mail) means of communication.

Article II
CONTRIBUTIONS

 

Section 2.01.          Formation of the JV LLC’s. Immediately prior to each
contribution set forth in Sections 2.02, 2.03, 2.04, 2.05 and 2.07 hereof, the
parties hereto shall (i) cause to be formed the applicable JV LLC by filing a
certificate of formation with the Secretary of State of Delaware for such JV
LLC, (ii) cause each such JV LLC to be duly qualified to do business in the
State of New Jersey and (iii) execute and deliver the applicable Limited
Liability Company Operating Agreement in the form of the applicable
Exhibit attached hereto.

Section 2.02.          Contribution of Non-Portfolio Property Interests. Upon
the terms and subject to the conditions of this Agreement, at the applicable
Closing, each of the Sellers shall contribute, convey, assign, transfer and
deliver to each of the JV LLC’s as a capital contribution, and the parties shall
cause each of the JV LLC’s to accept and to assume, from and after the
applicable Closing with respect to such Non-Portfolio Property Interest, the
applicable Non-Portfolio Property Interests as follows:

(a)           MSGW shall contribute, convey, assign, transfer and deliver to
Campus LLC as a capital contribution, and upon such contribution, conveyance,
assignment, transfer and delivery, the parties hereto shall cause Campus LLC to
accept and assume, the 3 Campus Drive Interest;

(b)           GCF II shall contribute, convey, assign, transfer and deliver to
Kimball LLC as a capital contribution, and upon such contribution, conveyance,
assignment, transfer and delivery, the parties hereto shall cause Kimball LLC to
accept and assume, the 100 Kimball Drive Interest;

(c)           GWV shall contribute, convey, assign, transfer and deliver to
Vreeland LLC as a capital contribution, and upon such contribution, conveyance,
assignment, transfer and delivery, the parties hereto shall cause Vreeland LLC
to accept and assume, the 12 Vreeland Interest;

(d)           Gale Investments shall contribute, convey, assign, transfer and
deliver to Belmar LLC as a capital contribution, and upon such contribution,
conveyance, assignment, transfer and delivery, the parties hereto shall cause
Belmar LLC to accept and assume, the Belmar Interest;

(e)           Gale Urban shall contribute, convey, assign, transfer and deliver
to  Transit LLC as a capital contribution, and upon such contribution,
conveyance, assignment,

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transfer and delivery, the parties hereto shall cause Transit LLC to accept and
assume, the Newark Transit Village Interest;

(f)            Gale Investments shall contribute, convey, assign, transfer and
deliver to Rock LLC as a capital contribution, and upon such contribution,
conveyance, assignment, transfer and delivery, the parties hereto shall cause
Rock LLC to accept and assume, the Rock GW Office Interest; and

(g)           GCF II shall cause the contribution, conveyance, assignment,
transfer and delivery to 55 Corporate LLC as a capital contribution, and upon
such contribution, conveyance, assignment, transfer and delivery, the parties
hereto shall cause 55 Corporate LLC to accept and assume, the 55 Corporate
Interest.

Section 2.03.          Contribution of Funds. Upon the terms and subject to the
conditions of this Agreement, at the applicable Closing, MCRAC shall contribute
and deliver to each of the applicable JV LLC’s, and each of the parties hereto
shall cause each of the applicable JV LLC’s to accept, the Funds as follows:

(a)           MCRAC shall contribute and deliver to Campus LLC as a capital
contribution, and the parties hereto shall cause Campus LLC to accept, the sum
of Four Million Three Hundred Four Thousand Seven Hundred Ninety Dollars
($4,304,790) in cash (the “Campus Cash Contribution”);

(b)           MCRAC shall contribute and deliver to Kimball LLC as a capital
contribution, and the parties hereto shall cause Kimball LLC to accept, the sum
of Nine Hundred Ninety One Thousand Six Hundred Fifty Four Dollars ($991,654) in
cash (the “Kimball Cash Contribution”);

(c)           MCRAC shall contribute and deliver to Vreeland LLC as a capital
contribution, and the parties hereto shall cause Vreeland LLC to accept, the sum
of Six Million Nine Hundred Twenty Thousand Nine Hundred Ninety Two Dollars
($6,920,992) in cash (the “Vreeland Cash Contribution”);

(d)           MCRAC shall contribute and deliver to Belmar LLC as a capital
contribution, and the parties hereto shall cause Belmar LLC to accept, the sum
of One Million Six Hundred Thirty Five Thousand One Hundred Thirty Three Dollars
and Sixty One Cents ($1,635,133.61) in cash (the “Belmar Cash Contribution”);

(e)           MCRAC shall contribute and deliver to Transit LLC as a capital
contribution, and the parties hereto shall cause Transit LLC to accept, the sum
of Five Hundred Fifty One Thousand Eight Hundred Sixty Four Dollars ($551,864)
in cash to Transit LLC (the “Transit Cash Contribution”);

(f)            MCRAC shall contribute and deliver to Rock LLC as a capital
contribution, and the parties hereto shall cause Rock LLC to accept, an amount
of cash as is equal to the product of $17.50 multiplied by the actual number of
square feet of rentable office space that Rock-GW LLC is approved to develop at
the Rock-GW Development Property (the “Rock Cash Contribution”). Notwithstanding
the foregoing, in the event that the resultant

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projected internal rate of return on the Rock Cash Contribution with respect to
the Rock GW Interest shall be less than 10%, the Rock Cash Contribution shall be
reduced to such amount as would cause the projected internal rate of return on
the Rock Cash Contribution with respect to the Rock GW Interest to equal 10%,
provided, however, if the Rock Cash Contribution shall be adjusted to an amount
which is lower than an amount of cash as is equal to the product of $12.50
multiplied by the actual number of square feet of rentable office space that
Rock-GW LLC is approved to develop at the Rock-GW Development Property, Gale
Investments shall have the right, exercisable in its sole discretion, to
terminate each of its and MCRAC’s obligations contained herein with respect to
the Rock-GW Interest and this Agreement shall automatically terminate with
respect to the Rock-GW Interest; and

(g)           MCRAC shall contribute and deliver to 55 Corporate LLC as a
capital contribution, and the parties hereto shall cause 55 Corporate LLC to
accept, the sum of Eight Million Five Hundred Thousand Dollars ($8,500,000) in
cash (the “55 Corporate Cash Contribution”); provided, however, if MCRAC, MCRLP
or any of their Affiliates enter into an agreement with SL Green Corp., or any
of its Affiliates the subject of which relates to the ownership, development
and/or operation of the development known as “Meadowlands Xanadu” located at the
Meadowlands Sports Complex in Secaucus, New Jersey on terms and conditions
satisfactory to MCRAC, MCRLP or such of their applicable Affiliates, in their
sole discretion (i) prior to the Closing of the 55 Corporate Interest, the 55
Corporate Cash Contribution shall be Ten Million Dollars ($10,000,000) in cash,
or (ii) after the Closing of the 55 Corporate Interest, MCRAC shall promptly pay
to GCF II, or its designee, the sum of One Million Five Hundred Thousand Dollars
($1,500,000) in cash.

Section 2.04.          Option to Contribute the Optional Non-Portfolio Property
Interests. Sellers hereby grant to MCRAC the right and option (exercisable
individually or in the aggregate) to cause each of the applicable Sellers to
contribute, convey, assign, transfer and deliver each of the Optional
Non-Portfolio Property Interests at a Closing as follows:

(a)           MCRAC may require SG and MY to contribute, convey, assign,
transfer and deliver to Bedminster LLC as a capital contribution, and upon such
contribution, conveyance, assignment, transfer and delivery, the parties hereto
shall cause Bedminster LLC to accept and assume, the Bedminster Interest; and

(b)           MCRAC may require GCF II to contribute, convey, assign, transfer
and deliver to Jefferson LLC as a capital contribution, and upon such
contribution, conveyance, assignment, transfer and delivery, the parties hereto
shall cause Jefferson LLC to accept and assume, the One Jefferson Road Interest.

(c)           MCRAC shall be entitled to exercise one or more of the options
specified in this Section 2.04 at any time and from time to time during the
below option periods as follows:

(i)            with respect to the One Jefferson Road Interest, ninety (90) days
following the execution of a limited liability company operating agreement
evidencing a joint venture by and between SG or one of his Affiliates and JP
Morgan and its Affiliates with respect to the development of the Jefferson Real
Property (the “One Jefferson Option Period”); and

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(ii)           with respect to the Bedminster Interest, fifteen (15) days
following receipt by Pluckemin Holdings LLC of notice given by 500 Hills Drive,
L.L.C. (“Hills Drive”) that Hills Drive intends to sell the Bedminster Real
Property (the “Bedminster Option Period”, and collectively with the One
Jefferson Option Period, the “Option Periods,” and each an “Option Period”).

MCRAC shall exercise each of the options specified in this Section 2.04 by
delivering written notice of such exercise to the Sellers during the applicable
Option Period. If MCRAC shall fail to exercise its option with respect to any
Optional Non-Portfolio Property Interest prior to the expiration of the
applicable Option Period, then, upon the expiration of such Option Period,
MCRAC’s option with respect to such Non-Portfolio Property Interest shall
terminate and no longer be exercisable and this Agreement shall automatically
terminate with respect to such Optional Non-Portfolio Property Interest.

Section 2.05.          Contribution of Additional Funds. If MCRAC exercises an
option with respect to an Optional Non-Portfolio Property Interest as specified
in Section 2.04 hereof, at the applicable Closing, MCRAC shall contribute and
deliver to each of the applicable JV LLC’s, and the parties hereto shall cause
each of the applicable JV LLC’s to accept the Additional Funds as follows:

(a)           MCRAC shall contribute and deliver to Bedminster LLC as a capital
contribution, and the parties hereto shall cause Bedminster LLC to accept, an
amount in cash equal to the aggregate amount of capital contributions made by SG
(and/or his Affiliates) and MY to the Bedminster Interest for the purchase by
the Bedminster Interest of the Bedminster Real Property from Hills Drive (the
“Bedminster Cash Contribution”); and

(b)           MCRAC shall contribute and deliver to Jefferson LLC as a capital
contribution, and the parties hereto shall cause Jefferson LLC to accept, an
amount in cash equal to the aggregate amount of capital contributions made by SG
and his Affiliates to the One Jefferson Road Interest (the “Jefferson Cash
Contribution”).

Section 2.06.          Conditions Precedent to the Obligations of MCRAC. The
obligations of MCRAC to consummate the transactions with respect to any
Non-Portfolio Property Interest (including any Optional Non-Portfolio Property
Interest) shall be subject to the fulfillment or written waiver by MCRAC, in its
sole and absolute discretion, at or prior to the applicable Closing, of the
following conditions:

(a)           the receipt of the third-party consents more fully set forth in
Schedule 5.05  hereto, which consents shall be necessary in order to contribute,
convey, assign, transfer and deliver such Non-Portfolio Property Interest in
accordance with the provisions of this Agreement (the “Non-Portfolio Consents”),
in each case, in form and substance reasonably satisfactory to MCRAC;

(b)           with respect to the Rock GW Office Interest, the receipt of
evidence reasonably satisfactory to MCRAC within twenty (20) days prior to
Closing, of each of (i) all (final and nonappealable) approvals from applicable
governmental or quasi-governmental authorities having jurisdiction over the
Rock-GW Development Property, necessary to develop

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and rezone the Rock-GW Development Property in accordance with the development
plans of Rock-GW LLC have been obtained, and (ii) confirmation that the
environmental conditions identified at the Rock-GW Development Property have
been remediated, or all necessary action to cause such remediation have been
taken (the “Remediation”), as attested by an independent recognized
environmental expert (“Gale Expert”) appointed by Gale Investments with the
consent of MCRAC, such consent not to be unreasonably delayed. If MCRAC does not
consent to the appointment of such Gale Expert, MCRAC shall promptly appoint an
independent recognized environmental expert (“MCRAC Expert”) to review the
Remediation. If the Gale Expert and the MCRAC Expert are unable to agree as to
the status of the Remediation, the Gale Expert and the MCRAC Expert shall
jointly appoint an independent recognized environmental expert (the “Binding
Expert”) which shall determine the status of the Remediation. The decision of
the Binding Expert shall be final, binding and conclusive on MCRAC and the
Sellers. The costs of each of the Gale Expert, the MCRAC Expert and the Binding
Expert shall be paid one half by each of MCRAC and Gale Investments;

(c)           with respect to the 3 Campus Drive Interest, the receipt of
evidence reasonably satisfactory to MCRAC that GW Real Estate Fund III LLC,
using $915,000 from the Campus Cash Contribution, has exercised its option
pursuant to that certain letter agreement, dated October 19, 2005, between
Mr. Stanley C. Gale, on behalf of The Gale Company L.L.C. and the various Gale
entities and affiliates, and John P. Buza, on behalf of Morgan Stanley Real
Estate Fund II & III and affiliates, to acquire the Morgan Stanley Interests for
a purchase price of $915,000.00 and has unconditionally acquired the Morgan
Stanley Interests, such that GW Real Estate Fund III LLC shall hold a  50.00001%
Percentage Interest in MSGW;

(d)           with respect to the 55 Corporate Interest:

(i)            Gale 55 Corporate Drive LLC or one if its Affiliates shall have
conveyed the equity interests in Gale SLG 55 Corporate Drive LLC to Gramercy
Capital Corp. or one of its Affiliates;

(ii)           the equity interests of Principal Enhanced Property Fund, L.P. in
55 Corporate REIT, LLC shall have been conveyed to Gale SLG Corporate Drive LLC;

(iii)          GCF II shall have been conveyed a 50% interest in Gale 55
Corporate Associates II LLC (or such entity as shall hold the 55 Corporate Real
Property);

(iv)          the outstanding membership interests in Gale 55 Corporate
Associates II LLC is not then held by any party other than GCF II, SL Green
Corp., Gramercy Capital Corp. or any of their respective Affiliates; and

(v)           MCRAC or its Affiliates shall have the right to develop the 55
Corporate Real Property.

(e)           the consummation of the transactions contemplated by the Purchase
Agreement (provided, that the condition specified in this clause (e) shall also
be a condition to the obligations of the Sellers).

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Section 2.07.          One Newark Center Interest.

(a)           If Praedium enters into a joint venture agreement with SG or his
Affiliates and pays MCRAC at least $500,000 in connection therewith, the subject
of which relates to the ownership, development and/or operation of the Newark
Real Property, then as promptly as practicable following the execution of such
agreement:

(i)            Gale Investments shall contribute, convey, assign, transfer and
deliver to Newark LLC as a capital contribution, and upon such contribution,
conveyance, assignment, transfer and delivery, the parties hereto shall cause
Newark LLC to accept and assume, the One Newark Center Interest;

(ii)           MCRAC shall contribute and deliver to Newark LLC as a capital
contribution, and the parties hereto shall cause Newark LLC to accept, an amount
in cash equal to the aggregate amount of capital contributions, up to
$1,000,000, made by SG and his Affiliates to the One Newark Center Interest (the
“Newark Cash Contribution”);

(iii)          the parties hereto shall cause Newark LLC to issue and deliver to
Gale Investments the membership interests contemplated to be delivered to Gale
Investments by the Newark LLC Operating Agreement;

(iv)          the parties hereto shall cause Newark LLC to issue and deliver to
MCRAC the membership interests contemplated to be delivered to MCRAC by the
Newark LLC Operating Agreement; and

(v)           MCRAC as Manager of Newark LLC shall cause Newark LLC to make a
special distribution to Gale Investments of an amount in cash equal to the
Newark Cash Contribution.

(b)           If Praedium enters into a joint venture agreement with MCRAC or
its Affiliates, the subject of which relates to the ownership, development
and/or operation of the Newark Real Property, then as promptly as practicable
following the execution of such agreement:

(i)            MCRAC shall contribute, convey, assign, transfer and deliver to
Newark LLC as a capital contribution, and upon such contribution, conveyance,
assignment, transfer and delivery, the parties hereto shall cause Newark LLC to
accept and assume, 100% of the equity interests in such entity that owns
(directly or indirectly) an interest in the Newark Real Property;

(ii)           the parties hereto shall cause Newark LLC to issue and deliver to
Gale Investments the membership interests contemplated to be delivered to Gale
Investments by the Newark LLC Operating Agreement; and

(iii)          the parties hereto shall cause Newark LLC to issue and deliver to
MCRAC the membership interests contemplated to be delivered to MCRAC by the
Newark LLC Operating Agreement.

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(c)           Each of MCRAC and MCRLP hereby acknowledge and agree that the
payment received by MCRAC (or any of its Affiliates) from Praedium in connection
with any joint venture agreement relating to the Newark Real Property shall be
included in the calculation of “Gross Income” of The Gale Services Company,
L.L.C., solely for the purposes of calculating any Earnout Payment contemplated
by Exhibit D of that certain Membership Interest Purchase and Contribution
Agreement, dated as of March 7, 2006, as amended, by and among SG, SCG Holding
Corp., MCRAC and MCRLP.

Article III
ISSUANCE OF MEMBERSHIP INTERESTS

Section 3.01.          Issuance of Membership Interests to Sellers. Upon the
terms of this Agreement, in exchange for the contribution by each of the Sellers
of the applicable Non-Portfolio Property Interests, at each Closing the parties
hereto shall cause each applicable JV LLC to issue and deliver to each of the
applicable Sellers (or their designee) the membership interests contemplated to
be delivered to each of the applicable Sellers by the applicable Limited
Liability Company Operating Agreement.

Section 3.02.          Issuance of Membership Interests to MCRAC. Upon the terms
of this Agreement, in exchange for the contribution by MCRAC of the applicable
portion of the Funds or the Additional Funds to the applicable JV LLC, at each
Closing the parties hereto shall cause each applicable JV LLC to issue and
deliver to MCRAC the membership interests contemplated to be delivered to MCRAC
by the applicable Limited Liability Company Operating Agreement.

Article IV
CLOSING

Section 4.01.          Closing Date. Upon the terms and subject to the
satisfaction or waiver of the conditions of this Agreement, each conveyance of a
Non-Portfolio Property Interest, contribution of Funds or Additional Funds and
issuance of a membership interest from a JV LLC in accordance with the
provisions of Articles II and III hereof shall take place at a closing (each, a
“Closing”) to be held at the offices of Greenberg Traurig, LLP, the MetLife
Building, 200 Park Avenue, New York, NY 10166 on the fifth (5th) Business Day
after the satisfaction or waiver of the conditions to the obligations of the
parties specified in Section 2.06 hereof or at such other date or location as is
mutually agreed to by the parties. Notwithstanding the foregoing, to the extent
practicable, the parties hereby agree to consummate each Closing simultaneously
with or as promptly as practicable after the closing of the Purchase Agreement,
subject to the receipt of the applicable Non-Portfolio Consents in accordance
with Section 2.06(a) hereof. The time and date on which each Closing is held is
referred to herein as a “Closing Date.”  Each Closing, and all transactions to
occur at such Closing, shall be deemed to have taken place at 12:01 a.m.,
Eastern time, on the Closing Date. The parties acknowledge that multiple
Closings may occur as contemplated by Sections 7.03 and 7.04 hereof.

Section 4.02.          Closing Deliveries. At each Closing, in addition to the
delivery of the applicable Non-Portfolio Property Interests and the applicable
Funds or Additional Funds, MCRAC and each of the Sellers shall deliver to each
other each  of the applicable Limited Liability Company Operating Agreements,
duly executed by MCRAC and each of the applicable

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Sellers. The Sellers shall also deliver the applicable Non-Portfolio Consents,
each in form and substance reasonably satisfactory to MCRAC at each Closing in
accordance with the terms of this Agreement.

Section 4.03.          Special Distributions of the JV LLC’s. At each Closing,
the applicable JV LLC shall, and MCRAC as Manager of each of the JV LLC’s shall
cause the applicable JV LLC to, make the following distributions as applicable:

(a)           Campus LLC shall distribute to MSGW an amount in cash equal to the
Campus Cash Contribution, and MSGW shall use $915,000 of such amount to exercise
the option specified in Section 2.06(c);

(b)           Kimball LLC shall distribute to GCF II an amount in cash equal to
the Kimball Cash Contribution;

(c)           Jefferson LLC shall distribute to GCF II an amount in cash equal
to the Jefferson Cash Contribution;

(d)           Vreeland LLC shall distribute to GWV an amount in cash equal to
the Vreeland Cash Contribution;

(e)           Bedminster LLC shall distribute to SG and MY an aggregate amount
in cash equal to the Bedminster Cash Contribution in such amounts as agreed to
by SG and MY;

(f)            Belmar LLC shall distribute to Gale Investments an amount in cash
equal to the Belmar Cash Contribution;

(g)           Transit LLC shall distribute to Gale Urban an amount in cash equal
to the Transit Cash Contribution;

(h)           55 Corporate LLC shall distribute to GCF II’s designee an amount
in cash equal to the 55 Corporate Cash Contribution; and

(i)            Rock LLC shall distribute to Gale Investments an amount in cash
equal to the Rock Cash Contribution.

Article V
REPRESENTATIONS AND WARRANTIES
OF THE SELLERS

Each of the Sellers hereby, severally and not jointly, represents and warrants
to MCRAC and MCRLP as of the date hereof and as of each Closing (except as
expressly provided otherwise in Section 5.02(b)(viii)), as follows:

Section 5.01.          Organization, Authority and Qualification of the Sellers.

(a)           Each of the Sellers that is a limited liability company (i) is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, (ii) has all

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necessary power and authority to enter into this Agreement and the applicable JV
LLC Agreements, to carry out its obligations hereunder and to consummate the
transactions contemplated hereby.

(b)           The execution and delivery of this Agreement and the applicable JV
LLC Agreements, by each of the Sellers that is a limited liability company, the
performance of its obligations hereunder and the consummation by it of the
transactions contemplated hereby, have been duly authorized by all requisite
action on the part of such Seller and no other action by such Seller is
necessary to authorize the transactions contemplated hereby or to consummate
such transactions.

(c)           This Agreement has been duly executed and delivered by each
Seller, and (assuming due authorization, execution and delivery by the other
parties thereto) this Agreement constitutes a legal, valid and binding
obligation of each Seller, enforceable against such Seller in accordance with
its respective terms.

Section 5.02.          Ownership of the Membership Interests; Real Property.

(a)           Each Seller has good and marketable title to, and is the lawful
record and beneficial owner of, the applicable Non-Portfolio Property Interest,
free and clear of all Encumbrances other than Permitted Encumbrances.

(b)           As of the date hereof:

(i)            Gale Investments is the sole owner of the Belmar Interest.

(ii)           Gale Broad Street, LLC, has a 50% Membership Rights in Broad
Street Redevelopment LLC. For purposes of this Section 5.02(b)(ii), the term
“Membership Rights” has the meaning ascribed to such term in the operating
agreement of Broad Street Redevelopment LLC.

(iii)          Gale Investments has a 50% Membership Interest in Rock-GW LLC.
For purposes of this Section 5.02(b)(iii), the term “Membership Interest” has
the meaning ascribed to such term in the operating agreement of Rock-GW LLC.

(iv)          GWV has a 50% Interest in 12 Vreeland Associates LLC. For purposes
of this Section 5.02(b)(iv), the term “Interest” has the meaning ascribed to
such term in the operating agreement of 12 Vreeland Associates LLC.

(v)           GCF II has a 33.33% LLC Interest in Gale Kimball LLC, and Gale
Kimball LLC has a 25% Percentage Interest in 100 Kimball Drive LLC. For purposes
of this Section 5.02(b)(v), the term “LLC Interest” has the meaning ascribed to
such term in the operating agreement of Gale Kimball LLC, and the term
“Percentage Interest” has the meaning ascribed to such term in the operating
agreement of 100 Kimball Drive LLC.

(vi)          GW Real Estate Fund III LLC has a .66665% Percentage Interest in
MSGW. By letter agreement executed October 20, 2005, The Gale Company L.L.C. and
its Affiliates were granted an option to acquire Morgan Stanley’s interest in
the 3 Campus project

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for $915,000, and upon such exercise, GW Real Estate Fund III LLC will hold a
50.00001% Percentage Interest in MSGW. For purposes of this Section 5.02(b)(vi),
the term “Percentage Interest” has the meaning ascribed to such term in the
operating agreement of MSGW.

(vii)         No limited liability company operating agreement exists for either
the One Jefferson Road Interest or the One Newark Center Interest.

(viii)        As of the date hereof, Gale 55 Corporate Associates II LLC is the
sole owner of the 55 Corporate Real Property.

(c)           To the actual knowledge of SG, as of the date hereof:

(i)            One Campus Associates LLC is the sole owner of the Campus Real
Property.

(ii)           100 Kimball Drive LLC is the sole owner of the Kimball Real
Property.

(iii)          Gale 55 Corporate Associates II LLC is the owner of the 55
Corporate Real Property.

Section 5.03.          No Conflict. The execution, delivery and performance of
this Agreement by each Seller does not and will not (a) violate, conflict with
or result in the breach of the certificate of formation or operating agreement
(or similar organizational documents) of such Seller, (b) conflict with or
violate, in any material respect, any Law or Governmental Order applicable to
such Seller or (c) except as would not adversely affect the ability of such
Seller to carry out its obligations under, and to consummate the transactions
contemplated by, this Agreement and assuming the Non-Portfolio Consents listed
in Schedule 5.05 hereto shall have been obtained, conflict with, violate or
breach any agreement to which such Seller is a party.

Section 5.04.          Litigation. No action by or against any Seller is pending
or, to the knowledge of such Seller, threatened, which could affect the
legality, validity or enforceability of this Agreement or the consummation of
the transactions contemplated hereby. Other than as set forth on Schedule 5.04,
to the actual knowledge of SG, there are no lawsuits or proceedings pending or
threatened in writing which would have a material adverse effect on the Belmar
Real Property, Campus Real Property, Kimball Real Property, 55 Corporate Real
Property, Rock GW Development Property or Transit Real Property, other than
claims fully covered by insurance.

Section 5.05.          Consents. Subject to obtaining the Non-Portfolio Consents
listed in Schedule 5.05 hereto, each Seller has the absolute right to transfer
to the JV LLC’s the Non-Portfolio Property Interests. No consent of any third
party other than those listed in Schedule 5.05 hereto is required to be obtained
in order for the Sellers to transfer the Non-Portfolio Property Interests to the
JV LLC’s, to transfer the JV LLC interests to MCRAC and MCRLP and to consummate
the transactions contemplated by this Agreement.

Section 5.06.          Entity Status. Each entity which holds a Non-Portfolio
Property Interest, has at all times been classified and treated as a partnership
or disregarded entity and not as an

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association taxable as a corporation for federal income tax purposes in each
state and local jurisdiction in which it files Tax Returns.

Section 5.07.          Documents. Other than as set forth on Schedule 5.07, each
Seller has delivered or made available to MCRAC and MCRLP true and complete
copies (in either paper or electronic form) of the organizational documents of
each such Seller that is an entity and the entities comprising the Non-Portfolio
Property Interests  (the “Organizational Documents”). The Organizational
Documents are true, complete and correct, in all material respects, and
constitute all of the material documents, agreements and instruments with
respect to the formation, governance, management and organization of each of the
Sellers and the entities owning, directly or indirectly, the Non-Portfolio
Property Interests.  The Organizational Documents have not been amended,
modified, supplemented, terminated or otherwise changed.

Section 5.08.          Right To Transfer. Subject to obtaining the Non-Portfolio
Consents listed in Schedule 5.05 hereto, each Seller has the right under the
applicable governing documents to transfer the applicable Economics Benefits and
Burdens of the applicable Non-Portfolio Property Interest without constituting a
default under any of the applicable governing documents.

Section 5.09.          Capital Contribution. MCRAC will not have any obligation
to make a capital contribution to any JV LLC attributable to leasing
commissions, tenant improvement costs and any other leasing costs for leases in
place at the applicable Closing in such JV LLC except that MCRAC may be required
to make such capital contributions to any JV LLC attributable to leasing
commissions, tenant improvement costs and any other leasing costs arising from
any extension or expansion of any premises owned by a JV LLC, and occurring
after any Closing.

Section 5.10.          Liabilities. There are no Liabilities of any Seller of
any nature which relate to the Non-Portfolio Property Interests other than the
Liabilities (a) expressly set forth in this Agreement and in the schedule
attached hereto as Schedule 5.10 or (b) otherwise permitted to be incurred under
this Agreement. Except as set forth in Schedule 5.10 hereto, there are no other
Liabilities relating to (x) any Non-Portfolio Property Interest, (y) any related
membership interest, or (z) to the actual knowledge of SG, the Non-Portfolio
Real Properties, other than trade liabilities which would not have a material
adverse effect on the applicable Non-Portfolio Real Properties. Each Seller
shall provide MCRAC and MCRLP with notice of any such Liabilities arising from
and after the date of this Agreement and not appearing on Schedule 5.10 hereto
other than those Liabilities arising in the normal course of owning and
operating the Non-Portfolio Real Properties. All such Liabilities shall be
subject to the prior written approval of MCRAC. From and after the Closing of a
Non-Portfolio Property Interest, the applicable Seller shall not be subject to
any Liabilities relating to such Non-Portfolio Property Interest other than
those assumed by JV LLC pursuant to the provisions of this Agreement.

Section 5.11.          Compliance. Except as would not adversely affect the
ability of such Seller to carry out its obligations under, and to consummate the
transactions contemplated by, this Agreement, each Seller is in compliance, in
all material respects, with all laws, regulations and agreements applicable to
such Seller, including any applicable agreement to which such Seller is a party
or is subject or which is binding upon it or its respective Non-Portfolio Real
Property.

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Section 5.12.          Brokerage Agreement. To the actual knowledge of SG, there
are no agreements with brokers or agents for the leasing of space at the Kimball
Real Property.

Section 5.13.          Leasing Commissions; Tenant Improvements. To the actual
knowledge of SG, other than as set forth on Schedule 5.13,  there are no
obligations for leasing commissions or tenant improvements affecting the Belmar
Real Property, Campus Real Property, Kimball Real Property, Rock GW Development
Property or Transit Real Property.

Section 5.14.          Environmental. To the actual knowledge of SG, the
applicable Sellers have not received written notice from a Governmental
Authority of a violation of any Environmental Law with respect to either the 55
Corporate Real Property, Kimball Real Property or the Campus Real Property that
has not been cured.

Section 5.15.          Zoning. To the actual knowledge of SG, none of the
applicable Sellers has received written notice from any Governmental Authority
of (i) any pending, threatened or contemplated annexation or condemnation
proceedings, or private purchase in lieu thereof, materially adversely affecting
or which may materially adversely affect any of the Belmar Real Property, Campus
Real Property, Kimball Real Property, 55 Corporate Real Property, Rock GW
Development Property or Transit Real Property, (ii) any proposed or pending
proceeding to materially adversely change or redefine the zoning classification
of all or any part of the Belmar Real Property, Campus Real Property, Kimball
Real Property, 55 Corporate Real Property, Rock GW Development Property or
Transit Real Property, (iii) any proposed or pending special assessments
affecting any of the Belmar Real Property, Campus Real Property, Kimball Real
Property, 55 Corporate Real Property, Rock GW Development Property or Transit
Real Property or any portion thereof, (iv) any penalties or interest due with
respect to real estate taxes assessed against any of the Belmar Real Property,
Campus Real Property, Kimball Real Property, 55 Corporate Real Property, Rock GW
Development Property or Transit Real Property, and (v) any proposed change(s) in
any road or grades with respect to the roads providing a means of ingress and
egress to any of the Belmar Real Property, Campus Real Property, Kimball Real
Property, 55 Corporate Real Property, Rock GW Development Property or Transit
Real Property.

Section 5.16.          Tax Certiorari Proceedings. To the actual knowledge of
SG, Schedule 5.16 sets forth all pending proceeds for tax certiorari with
respect to any of Belmar Real Property, Campus Real Property, Kimball Real
Property, 55 Corporate Real Property, Rock GW Development Property or Transit
Real Property.

Section 5.17.          Surveys. To the actual knowledge of SG, Schedule 5.17
sets forth all current surveys with respect to the Kimball Real Property that
are in the possession or control of GCF II. Complete copies of the surveys
listed on Schedule 5.17 have been provided or made available to MCRAC.

Section 5.18.          Private Letter Rulings. To the actual knowledge of SG,
none of the applicable Sellers are subject to any private letter ruling of the
Internal Revenue Service or comparable rulings of another taxing authority.

 

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Section 5.19.          Foreign Person. None of the Sellers is a foreign person
within the meaning of Section 1445 of the Internal Revenue Code of 1986, as
amended, or any other laws requiring withholding of amounts paid to foreign
persons.

Section 5.20.          Due Diligence Information. SG has no actual knowledge
that any information made available to MCRAC and MCRLP by SG or any Seller in
connection with the transactions contemplated by this Agreement is not the true,
accurate and complete understanding of SG, in all material respects, relating to
the Non-Portfolio Property Interests.

Article VI
REPRESENTATIONS AND WARRANTIES
OF MCRAC AND MCRLP

Each of MCRAC and MCRLP hereby, severally and not jointly, represents and
warrants to the Sellers as of the date hereof and as of each Closing, as
follows:

Section 6.01.          Organization and Authority of MCRAC and MCRLP.

(a)           MCRAC is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation. MCRLP is a
limited partnership, duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization. Each of MCRAC and MCRLP has all
necessary power and authority to enter into this Agreement, to carry out its
obligations hereunder and to consummate the transactions contemplated hereby.

(b)           The execution and delivery by each of MCRAC and MCRLP of this
Agreement, the performance of their obligations hereunder and the consummation
of the transactions contemplated hereby by MCRAC and MCRLP have been duly
authorized by all requisite corporate or partnership action on the part of MCRAC
and MCRLP, as applicable.

(c)           This Agreement has been duly executed and delivered by MCRAC and
MCRLP, and (assuming due authorization, execution and delivery by the other
parties thereto) this Agreement constitutes the legal, valid and binding
obligations of MCRAC and MCRLP, enforceable against each of them in accordance
with its terms.

Section 6.02.          No Conflict. The execution, delivery and performance of
this Agreement by each of MCRAC and MCRLP do not and will not (a) violate,
conflict with or result in the breach of the certificate of incorporation,
bylaws, certificate of organization, operating agreement, partnership agreement
(or similar organizational documents) of MCRAC or MCRLP, (b) conflict with or
violate, in any material respect, any Law or Governmental Order applicable to
MCRAC or MCRLP, (c) except as would not adversely affect the ability of each of
MCRAC and MCRLP to carry out its obligations under, and to consummate the
transactions contemplated by, this Agreement conflict with, violate or breach
any agreement to which either MCRAC or MCRLP is a party.

Section 6.03.          Litigation. No action by or against MCRLP or MCRAC is
pending or, to the knowledge of MCRLP or MCRAC, threatened, which could affect
the legality, validity or enforceability of this Agreement or the consummation
of the transactions contemplated hereby.

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Section 6.04.          Independent Investigation; Representations. Each of MCRLP
and MCRAC has conducted its own independent investigation, review and analysis
of the operations, results of operations, financial condition and prospects of
the Non-Portfolio Property Interests, which investigation, review and analysis
was done by each of MCRLP and MCRAC and its Affiliates and representatives. Each
of MCRLP and MCRAC acknowledges that it and its representatives have been
provided adequate access to the personnel, properties, premises and records of
the Sellers for such purpose. In entering into this Agreement, each of MCRLP and
MCRAC acknowledges that it has relied solely upon the aforementioned
investigation, review and analysis and not on any factual representations or
opinions of the Sellers or its representatives (except the specific
representations and warranties of the Sellers set forth in Article V). Each of
MCRAC and MCRLP hereby acknowledge and agree that (a) other than the
representations and warranties made in Article V, none of the Sellers, their
Affiliates, or any of their respective officers, directors, employees or
representatives make or have made any representation or warranty, express or
implied, at law or in equity, with respect to the Non-Portfolio Property
Interests, and (b) other than the indemnification obligations of the Sellers set
forth in Article VIII, none of the Sellers, their Affiliates, or any of their
respective officers, directors, employees or representatives will have or be
subject to any liability or indemnification obligation to MCRAC, MCRLP or to any
other Person resulting from the distribution to MCRLP or MCRAC, its Affiliates
or representatives of, or the their use of, any information relating to the
Non-Portfolio Property Interests, including any information, documents or
material made available to MCRLP or MCRAC, whether orally or in writing, in data
rooms, management presentations, break-out discussions, responses to questions
submitted on behalf of MCRLP or MCRAC or in any other form in expectation of the
transactions contemplated by this Agreement.

Article VII
ADDITIONAL AGREEMENTS

Section 7.01.          Notification of Certain Matters. Each party shall
promptly notify the other parties in writing of any action, suit or proceeding
that shall be instituted or threatened against such party to restrain, prohibit
or otherwise challenge the legality of any transaction contemplated by this
Agreement.

Section 7.02.          Further Action. The parties hereto shall use all
reasonable efforts to take, or cause to be taken, all appropriate action, to do
or cause to be done all things necessary, proper or advisable under applicable
Law, and to execute and deliver such documents and other papers, as may be
required to carry out the provisions of this Agreement and consummate and make
effective the transactions contemplated by this Agreement. The parties hereto
hereby agree that if the applicable Seller has management rights with respect to
a leased premises as contemplated by Section 5.09 hereof, MCRAC shall have the
right to advise and consult with such Seller prior to (i) any such lease
extension or expansion of leased premises, (ii) any capital contribution made by
such Seller, and (iii) major management decisions.

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Section 7.03.          Third-Party Consents; Additional Closings; Buy-Sell.

(a)           Each of the Sellers hereby agree to use their commercial best
efforts to obtain the Non-Portfolio Consents.

(b)           In the event that any Non-Portfolio Consent is not obtained at or
prior to the closing of the Purchase Agreement, the parties agree that
additional Closings shall occur to effect the consummation of the transactions
with respect to the applicable Non-Portfolio Property Interests (i) during the
ninety (90) day period following the closing of the Purchase Agreement, or
(ii) with respect to any Optional Non-Portfolio Property Interest, during the
applicable Option Period as provided for in Section 2.04, in each case, promptly
upon the receipt of the applicable Non-Portfolio Consents.

(c)           In the event that any Non-Portfolio Consent is not obtained within
ninety (90) days following the closing of the Purchase Agreement (or (i) with
respect to the Rock GW Office Interest, within thirty (30) days following the
satisfaction of the conditions set forth in Section 2.06(b), (ii) with respect
to the 55 Corporate Interest, within thirty (30) days following the satisfaction
of the conditions set forth in Section 2.06(d), and (iii) with respect to any
Optional Non-Portfolio Property Interest, within the applicable Option Period),
MCRAC shall have the right and the option to exercise any of the following:
(1) require the applicable Sellers to promptly thereafter implement any relevant
“buy-sell” provisions with respect to the corresponding Non-Portfolio Property
Interest, (2) cause the contribution of the Economic Benefits and Burdens of the
applicable Non-Portfolio Property Interests to the applicable JV LLC’s or
(3) agree to terminate its obligations to purchase the applicable Non-Portfolio
Property Interests and release the applicable Sellers from their obligations to
contribute such Non-Portfolio Property Interests, by delivering written notice
of such exercise to the applicable Sellers within two (2) Business Days
thereafter. If MCRAC shall fail to deliver a timely notice within said two
(2) Business Day period, then this Agreement shall automatically terminate with
respect to any Non-Portfolio Property Interest (including any Optional
Non-Portfolio Property Interest) for which a Closing shall not have occurred.
MCRAC shall, if requested by the applicable Sellers, promptly furnish such
Sellers with written evidence acknowledging such automatic termination.

(d)           In the event MCRAC shall require the applicable Sellers to
implement any relevant “buy-sell” provisions with respect to the corresponding
Non-Portfolio Property Interests, then such “buy-sell” shall be at a price not
less than the amount of the applicable Cash Contribution for such Non-Portfolio
Property Interest (provided, that if MCRAC shall specify a higher price, the
applicable Sellers shall implement such “buy-sell” provisions at such higher
price). If the other party to the “buy-sell” shall agree to acquire the
applicable Non-Portfolio Property Interest at the price offered by the
applicable Sellers, then the applicable Sellers shall sell such Non-Portfolio
Property Interest to such other party at the specified purchase price (and shall
turn over to MCRAC any portion of consideration received which is in excess of
such applicable Cash Contribution). If the other party to the “buy-sell” shall
require the applicable Sellers to acquire such other party’s interest, then
MCRAC shall, and MCRLP shall cause MCRAC to, acquire both such other party’s
interest (at the price specified by the applicable Sellers to the other party)
and the applicable Sellers’ interest (at the price equal to the applicable Cash
Contribution). In addition, MCRAC shall, and MCRLP shall cause MCRAC to,
reimburse

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the applicable Sellers for all reasonable costs and expenses incurred by the
applicable Sellers in implementing and consummating the “buy-sell” contemplated
hereby.

Section 7.04.          Assignment of Economic Interests. In the event MCRAC
shall elect to accept the Economic Benefits and Burdens of the applicable
Non-Portfolio Property Interest in accordance with the provisions of
Section 7.03(c) hereof, the parties hereto hereby acknowledge and agree that the
parties shall consummate the transactions as contemplated by this Agreement with
respect to such Non-Portfolio Property Interest, except that the applicable
Sellers shall contribute to the applicable JV LLC’s solely the Economic Benefits
and Burdens of each such Non-Portfolio Property Interests (and such additional
rights as may be granted pursuant to the applicable Limited Liability Company
Operating Agreement) and in no event shall the transactions contemplated by this
Agreement constitute a sale, assignment, transfer, pledge, hypothecation,
encumbrance, disposal, loan, gift, attachment, levy or other disposition with
respect to such Non-Portfolio Property Interests. In addition, the parties shall
enter into a Limited Liability Company Operating Agreement substantially in the
form of Exhibit K attached hereto for such Non-Portfolio Property Interests.

Section 7.05.          Effect of Termination. Notwithstanding anything contained
herein to the contrary, if MCRAC terminates its obligations to purchase a
Non-Portfolio Property Interest as specified in Section 7.03(c) or shall fail to
timely exercise its option with respect to any Optional Non-Portfolio Property
Interest as specified in Section 2.04, (i) nothing contained in this Agreement
or in the Purchase Agreement shall prohibit the applicable Sellers from owning
such Non-Portfolio Property Interest and operating the Non-Portfolio Real
Properties related to such Non-Portfolio Property Interest, and (ii) MCRAC shall
be released from any and all obligations  and restrictions (including without
limitation, any restriction on competition) relating to such Non-Portfolio
Property Interest or Optional Non-Portfolio Property Interest.

Section 7.06.          Development of Jefferson Real Property. Notwithstanding
anything contained herein to the contrary, each of MCRAC and MCRLP hereby agree
that, if MCRAC, MCRLP or any of their Affiliates shall enter into any agreement
or other arrangement with JP Morgan or any of its Affiliates the subject of
which relates to the development of the Jefferson Real Property, then:

(a)           MCRAC, MCRLP or their applicable Affiliate, shall contribute,
convey, assign, transfer and deliver to Jefferson LLC as a capital contribution,
and upon such contribution, conveyance, assignment, transfer and delivery, the
parties hereto shall cause Jefferson LLC to accept and assume, 100% of the
equity interests in such entity that owns (directly or indirectly) an interest
in the Jefferson Real Property;

(b)           the parties hereto shall cause Jefferson LLC to issue and deliver
to GCF II the membership interests contemplated to be delivered to GCF II by the
Jefferson LLC Operating Agreement; and

(c)           the parties hereto shall cause Jefferson LLC to issue and deliver
to MCRAC, MCRLP or their applicable Affiliate the membership interests
contemplated to be delivered to MCRAC, MCRLP or their applicable Affiliate by
the Jefferson LLC Operating Agreement.

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Section 7.07.          Reimbursement for MCRAC Employee Assistance. To the
extent any employee of MCRAC or its Affiliates assists the Sellers with the
procurement of any approvals related to the Rock-GW Development Property, SG
shall promptly reimburse MCRAC or its Affiliates the actual cost to MCRAC or its
Affiliates of such services.

Article VIII
INDEMNIFICATION

Section 8.01.          Survival of Representations and Warranties. The
representations and warranties of the parties hereto contained in this Agreement
shall survive the Closing for a period of nine (9) months after the Closing of
the applicable Non-Portfolio Property Interest; provided, that any claim made
with reasonable specificity by the party seeking to be indemnified within the
time periods set forth in this Section 8.01 shall survive until such claim is
finally and fully resolved. All covenants and agreements contained herein shall
remain in full force and effect for a period of nine (9) months following the
Closing of the applicable Non-Portfolio Property Interest; provided, however,
that any claim made with reasonable specificity by the party seeking to be
indemnified within the time periods set forth in this Section 8.01 shall survive
until such claim is finally and fully resolved. Notwithstanding the foregoing,
(i) the representations and warranties contained in Sections 5.05 and 5.08 shall
survive the Closing for a period of three (3) years after the Closing of the
applicable Non-Portfolio Property Interest, and (ii) the representations and
warranties contained in Sections 5.01, 5.02, 5.06 and 6.01 shall survive the
Closing indefinitely, subject only to any applicable statute of limitations.

Section 8.02.          Indemnification by the Sellers. Subject to Section 8.04,
MCRLP, MCRAC and their Affiliates, officers, directors, employees, agents,
successors and assigns (each, a “MCRAC Indemnified Party”) shall be indemnified
and held harmless by each Seller, severally and not jointly, for and against all
losses, damages, claims, costs and expenses, interest, awards, judgments and
penalties (including reasonable attorneys’ and consultants’ fees and expenses)
actually suffered or incurred by them (hereinafter, a “Loss” or, collectively
“Losses”), arising out of or resulting from:  (a) the breach of any
representation or warranty made by each Seller contained in this Agreement or
(b) the breach of any covenant or agreement by each Seller contained in this
Agreement.

Section 8.03.          Indemnification by MCRAC. Subject to Section 8.04, the
Sellers and their Affiliates, officers, directors, employees, agents, successors
and assigns (each, a “Seller Indemnified Party”) shall be indemnified and held
harmless by MCRLP and MCRAC, jointly and severally, for and against any and all
Losses, arising out of or resulting from:  (a) the breach of any representation
or warranty made by MCRAC or MCRLP contained in this Agreement, or (b) the
breach of any covenant or agreement by MCRAC or MCRLP contained in this
Agreement.

Section 8.04.          Limits on Indemnification.

(a)           No claim may be asserted nor may any Action be commenced against
either party for breach of any representation, warranty, covenant or agreement
contained herein, unless written notice of such claim or action is received by
such party describing in reasonable detail the facts and circumstances with
respect to the subject matter of such claim or Action on or

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prior to the date on which the representation, warranty, covenant or agreement
on which such claim or Action is based ceases to survive as set forth in
Section 8.01, irrespective of whether the subject matter of such claim or action
shall have occurred before or after such date.

(b)           Notwithstanding anything to the contrary contained in this
Agreement:  (i) an Indemnifying Party shall not be liable for any claim for
indemnification pursuant to Sections 8.02(a) (other than with respect to
breaches of the representations  and warranties set forth in Sections 5.01,
5.02, 5.05, 5.06, and 5.08) or 8.03(a) (other than with respect to breaches of
the representations  and warranties set forth in Section 6.01), unless and until
the aggregate amount of indemnifiable Losses which may be recovered from the
Indemnifying Party equals or exceeds an amount equal to .05% of the applicable
Cash Contribution attributable to such Non-Portfolio Property Interest that is
the subject of the right of indemnification (the “Indemnification Threshold”)
after which the Indemnifying Party shall fully indemnify the other party for the
total of such Losses; (ii) the maximum amount of indemnifiable Losses which may
be recovered from an Indemnifying Party arising out of or resulting from the
causes set forth in Section 8.02(a) (other than with respect to breaches of the
representations  and warranties set forth in Sections 5.01, 5.02, 5.05, 5.06,
and 5.08) or 8.03(a) (other than with respect to breaches of the
representations  and warranties set forth in Section 6.01) shall be an amount
equal to 10% of the Cash Contribution attributable to such Non-Portfolio
Property Interest that is the subject of the right of indemnification, and
(iii) neither party hereto shall have any liability under any provision of this
Agreement for any punitive damages.

(c)           For all purposes of this Article VIII, “Losses” shall be net of
any insurance or other recoveries actually received by the Indemnified Party or
its Affiliates in connection with the facts giving rise to the right of
indemnification.

Section 8.05.          Notice of Loss; Third Party Claims.

(a)           An Indemnified Party shall give the Indemnifying Party notice of
any matter which an Indemnified Party has determined has given or could give
rise to a right of indemnification under this Agreement, within sixty (60) days
of such determination, stating the amount of the Loss, if known, and method of
computation thereof, and containing a reference to the provisions of this
Agreement in respect of which such right of indemnification is claimed or
arises.

(b)           If an Indemnified Party shall receive written notice of any
Action, audit, claim, demand or assessment (each, a “Third Party Claim”) against
it which may give rise to a claim for Loss under this Article VIII, within
thirty (30) days of the receipt of such notice, the Indemnified Party shall give
the Indemnifying Party notice of such Third Party Claim; provided, however, that
the failure to provide such notice shall not release the Indemnifying Party from
any of its obligations under this Article VIII except to the extent that such
failure results in a detriment to the Indemnifying Party and shall not relieve
the Indemnifying Party from any other Liability that it may have to any
Indemnified Party other than under this Article VIII. The Indemnifying Party
shall be entitled to assume and control the defense of such Third Party Claim at
its expense and through counsel of its choice if it gives notice of its
intention to do so to the Indemnified Party within fifteen (15) days of the
receipt of such notice from the Indemnified Party. If the Indemnifying Party
elects to undertake any such defense against a Third Party

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Claim, the Indemnified Party may participate in such defense at its own expense.
The Indemnified Party shall fully cooperate with the Indemnifying Party in such
defense and make available to the Indemnifying Party, at the Indemnifying
Party’s expense, all witnesses, pertinent records, materials and information in
the Indemnified Party’s possession or under the Indemnified Party’s control
relating thereto as is reasonably required by the Indemnifying Party. If the
Indemnifying Party elects to direct the defense of any such claim or proceeding,
the Indemnified Party shall not pay, or permit to be paid, any part of such
Third Party Claim unless the Indemnifying Party consents in writing to such
payment or unless the Indemnifying Party withdraws from the defense of such
Third Party Claim liability or unless a final judgment from which no appeal may
be taken by or on behalf of the Indemnifying Party is entered against the
Indemnified Party for such Third Party Claim. If the Indemnifying Party assumes
the defense of any such claims or proceeding pursuant to this Section 8.05 and
proposes to settle such claims or proceeding prior to a final judgment thereon
or to forgo any appeal with respect thereto, then the Indemnifying Party shall
give the Indemnified Party prompt written notice thereof and the Indemnified
Party shall have the right to participate in the settlement or assume or
reassume the defense of such claims or proceeding. The Indemnifying Party shall
not enter into any settlement or compromise of any action, suit or proceeding or
consent to the entry of any judgment (i) which does not include as an
unconditional term thereof the delivery by the claimant or plaintiff to the
Indemnified Party of a written release from all liability in respect of such
action, suit or proceeding or (ii) for other than monetary damages to be borne
in full by the Indemnifying Party without the prior written consent of the
Indemnified Party, which consent shall not be unreasonably withheld, conditioned
or delayed.

Section 8.06.          Remedies. MCRLP, MCRAC and each of the Sellers
acknowledge and agree that (i) following each applicable Closing, the
indemnification provisions of Section 8.02 and Section 8.03 shall be the sole
and exclusive remedies of the parties for any breach by the other party of the
representations and warranties in this Agreement and for any failure by the
other party to perform and comply with any covenants and agreements contained in
this Agreement, except that if any of the provisions of this Agreement are not
performed in accordance with their terms or are otherwise breached, the parties
shall be entitled to specific performance of the terms thereof in addition to
any other remedy at Law or equity and (ii) anything herein to the contrary
notwithstanding, no breach of any representation, warranty, covenant or
agreement contained herein shall give rise to any right on the part of MCRLP,
MCRAC or the Sellers, after the consummation of the contribution of all of the
Economic Benefits and Burdens associated with the Non-Portfolio Property
Interests contemplated by this Agreement, to rescind this Agreement or any of
the transactions contemplated hereby. Each party hereto shall take all
reasonable steps to mitigate its Losses upon and after becoming aware of any
event which could reasonably be expected to give rise to any Losses.

Article IX
GENERAL PROVISIONS

Section 9.01.          Expenses. Except as otherwise specified in this
Agreement, all costs and expenses, including, fees and disbursements of counsel,
financial advisors and accountants, incurred in connection with this Agreement
and the transactions contemplated by this Agreement shall be borne by the party
incurring such costs and expenses.

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Section 9.02.          Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
person, by an internationally recognized overnight courier service, by e-mail
(read receipt requested), by facsimile or registered or certified mail (postage
prepaid, return receipt requested) to the respective parties hereto at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 9.02):

If to the Sellers:

c/o The Gale Company, Suite 200|
100 Campus Drive
Florham Park, New Jersey 07932
Telecopy:  (973) 245-3600
Telephone:  (973) 301-9500
E-Mail: SG@TheGaleCompany.com
Attention: Mr. Stanley C. Gale and Mr. Mark Yeager

with a copy (which shall not constitute notice) to:

Greenberg Traurig, LLP
200 Park Avenue
New York, NY  10166
Telecopy:  (212) 801-6400
Telephone: (212) 801-9200
E-Mail: Ivanhoer@gtlaw.com and Gerasimovichk@gtlaw.com   
Attention:  Robert Ivanhoe, Esq. and Kenneth A. Gerasimovich, Esq.

If to MCRLP or MCRAC:

c/o Mack-Cali Realty Corporation
11 Commerce Drive
Cranford, New Jersey  07016

with two (2)
separate copies
of the notice sent
to the attention of:

Telecopy:  (908) 272-0214
Telephone:  (908) 272-2009
Email:  mhersh@mack-cali.com
Attention:  Mitchell E. Hersh,
President and Chief Executive Officer

And

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Telecopy:  (908) 497-0485
Telephone:  (908) 272-2612
Email:  rthomas@mack-cali.com
Attention:  Roger W. Thomas,
Executive Vice President and General Counsel

with a copy (which shall not constitute notice) to:

Pryor Cashman Sherman & Flynn LLP
410 Park Avenue
New York, New York 10022
Telecopy:  (212) 798-6329
Telephone:  (212) 326-0133
Email:  bhornick@pryorcashman.com
Attention:  Blake Hornick

And

Seyfarth Shaw LLP
1270 Avenue of the Americas
25th Floor
New York, New York 10020
Telecopy:  (212) 218-5527
Telephone:  (212) 218-5620
Email:  jnapoli@seyfarth.com
Attention:  John P. Napoli

Section 9.03.          Public Announcements; Confidentiality. Upon the execution
of this Agreement, MCRAC and MCRLP shall have the right to make such public
announcements or filings as may be required by (i) the Securities Act, (ii) the
Securities Exchange Act, (iii) the rules and listing standards of the New York
Stock Exchange, Inc., (iv) any other law of a jurisdiction to which MCRLP is
subject, or (v) any oral questions, interrogatories, requests for information,
subpoena, civil investigative demand, or similar process required by applicable
rules, laws or regulations by any court, law or administrative authority to
which MCRAC and MCRLP are subject. MCRAC and MCRLP also shall have the right to
make such public announcements or filings as they may deem reasonably prudent,
and shall be entitled to make such filings or announcements upon advice of
counsel as may be otherwise be deemed necessary. The Sellers may make such
public disclosures as are required by Law. Each of the Sellers, MCRAC and MCRLP
hereby agree to provide the non-disclosing parties as much advance notice as
reasonably possible with respect to the nature of such disclosure, cooperate
fully as to the timing and contents of such disclosure and review in good faith
the suggestions of the other party with respect to the contents of such
disclosure.

Section 9.04.          Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any Law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect for so long as the economic or
legal substance of the transactions contemplated by this Agreement is not
affected in any

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manner materially adverse to either party hereto. Upon such determination that
any term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible in an
acceptable manner in order that the transactions contemplated by this Agreement
are consummated as originally contemplated to the greatest extent possible.

Section 9.05.          Entire Agreement. This Agreement (including the Exhibits)
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and undertakings, both
written and oral, between the Sellers, MCRLP and MCRAC with respect to the
subject matter hereof.

Section 9.06.          Assignment. This Agreement may not be assigned by
operation of Law or otherwise without the prior express written consent of the
Sellers, and MCRAC or MCRLP which consent may be granted, conditioned, delayed
or withheld in the sole discretion of the Sellers or MCRAC or MCRLP, as the case
may be. Notwithstanding the foregoing, MCRAC or MCRLP may assign any or all of
its interests in this transaction to one or more Affiliates.

Section 9.07.          Waiver. Any term or provision of this Agreement may be
waived, or the time for its performance may be extended, by the party or parties
entitled to the benefit thereof. Any such waiver shall be validly and
sufficiently authorized for the purposes of this Agreement if, as to any party,
it is authorized in writing by an authorized representative of such party. The
failure of any party hereto to enforce at any time any provision of this
Agreement shall not be construed to be a waiver of such provision, nor in any
way to affect the validity of this Agreement or any part hereof or the right of
any party thereafter to enforce each and every such provision. No waiver of any
breach of this Agreement shall be held to constitute a waiver of any other or
subsequent breach.

Section 9.08.          No Third Party Beneficiaries. This Agreement shall be
binding upon and inure solely to the benefit of the parties hereto and their
respective successors and permitted assigns and nothing herein, express or
implied (including the provisions of Article VIII relating to indemnified
parties), is intended to or shall confer upon any other Person any legal or
equitable right, benefit or remedy of any nature whatsoever, under or by reason
of this Agreement.

Section 9.09.          Currency. Unless otherwise specified in this Agreement,
all references to currency, monetary values and dollars set forth herein shall
mean United States (U.S.) dollars and all payments hereunder shall be made in
United States dollars.

Section 9.10.          Governing Law. This Agreement and all others arising out
of or relating to this Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware. All Actions arising out of
or relating to this Agreement shall be heard and determined exclusively in any
New York federal court sitting in the Borough of Manhattan of The City of New
York; provided, however, that if such federal court does not have jurisdiction
over such Action, such Action shall be heard and determined exclusively in any
New York state court sitting in the Borough of Manhattan of The City of New
York. Consistent with the preceding sentence, the parties hereto hereby
(a) submit to the exclusive jurisdiction of any federal or state court sitting
in the Borough of Manhattan of The City of New York for the

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purpose of any Action arising out of or relating to this Agreement brought by
any party hereto and (b) irrevocably waive, and agree not to assert by way of
motion, defense, or otherwise, in any such Action, any claim that it is not
subject personally to the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution, that the Action is
brought in an inconvenient forum, that the venue of the Action is improper, or
that this Agreement or the transactions contemplated by this Agreement may not
be enforced in or by any of the above-named courts.

Section 9.11.          Waiver of Jury Trial. The parties hereto hereby waive to 
the fullest extent permitted by applicable law any right it may have to a trial
by jury with respect to any litigation directly or indirectly arising out of,
under or in connection with this Agreement or the transactions contemplated by
this Agreement. Each of the parties hereto hereby (a) certifies that no
representative, agent or attorney of the other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce the foregoing waiver and (b) acknowledges that it has been induced to
enter into this Agreement and the transactions contemplated by this Agreement,
as applicable, by, among other things, the mutual waivers and certifications in
this Section 9.11.

Section 9.12.          Counterparts. This Agreement shall not be effective or
binding until such time as it has been executed and delivered by all parties
hereto. This Agreement may be executed and delivered (including by facsimile
transmission or portable document format (PDF)) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement.

Section 9.13.          Cooperation. This Agreement shall be given a fair and
reasonable construction in accordance with the intentions of the parties hereto,
and without regard to or aid of canons requiring construction against the
Sellers, MCRAC and MCRLP or the party whose counsel drafted this Agreement. The
provisions of this Section 9.13 shall survive the Closing.

Section 9.14.          Specific Performance. Each of the parties hereto
acknowledges and agrees that the other party would be irreparably damaged if any
of the provisions of this Agreement are not performed in accordance with their
specific terms and that any breach of this Agreement by the other party may not
be adequately compensated in all cases by monetary damages alone. Accordingly,
in addition to any other right or remedy to which each party may be entitled, at
law or in equity, each party shall be entitled to enforce the provisions of this
Agreement by a decree of specific performance and to temporary, preliminary and
permanent injunctive relief to prevent breaches or threatened breaches of any of
the provisions of this Agreement, without posting any bond or other undertaking.

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IN WITNESS WHEREOF, the parties hereto have executed, or have caused this
Agreement to be executed, as of the day and year first above written.

 

 

MACK-CALI REALTY ACQUISITION CORP.,
a Delaware corporation

 

 

 

 

 

 

 

 

 

By:

 

/s/ Mitchell E. Hersh

 

 

 

 

Name: Mitchell E. Hersh

 

 

 

 

Title: President and Chief Executive Officer

 

 

 

 

 

 

 

MACK-CALI REALTY L.P.,
a Delaware limited Partnership

 

 

 

 

 

 

 

 

 

By:

 

Mack-Cali Realty Corporation,

 

 

 

 

a Maryland corporation, its general partner

 

 

 

 

 

 

 

By:

 

/s/ Mitchell E. Hersh

 

 

 

 

Name: Mitchell E. Hersh

 

 

 

 

Title: President and Chief Executive Officer

 

 

 

 

 

 

 

STANLEY C. GALE

 

 

 

 

 

 

 

/s/ Stanley C. Gale

 

 

 

 

 

 

 

MARK YEAGER

 

 

 

 

 

 

 

/s/ Mark Yeager

 

 

 

 

 

 

 

MSGW-ONE CAMPUS INVESTORS, LLC

 

 

 

 

 

 

 

By:

 

Gale Global Facility Services, LLC, as successor in interest to Gale &
Wentworth, LLC, its Administrator

 

 

 

 

 

 

 

By:

 

/s/ Stanley C. Gale

 

 

 

 

Name: Stanley C. Gale

 

 

 

 

Title: Manager

 

 

 

 

 

 

 

THE GALE INVESTMENTS COMPANY, LLC

 

 

 

 

 

 

 

By:

 

/s/ Stanley C. Gale

 

 

 

 

Name: Stanley C. Gale

 

 

 

 

Title: Manager

 

 

 

 

 

 

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GCF II INVESTOR, LLC

 

 

 

 

By:

 

The Gale Investments Company, LLC, its Managing Member

 

 

 

 

 

 

 

By:

 

/s/ Stanley C. Gale

 

 

 

 

Name: Stanley C. Gale

 

 

 

 

Title: Manager

 

 

 

 

 

 

 

GALE & WENTWORTH VREELAND, LLC,

 

 

 

 

 

 

 

By:

 

/s/ Stanley C. Gale

 

 

 

 

Name: Stanley C. Gale

 

 

 

 

Title: Manager

 

 

 

 

 

 

 

GALE URBAN SOLUTIONS LLC

 

 

 

 

 

 

 

By:

 

The Gale Investments Company, LLC,

 

 

 

 

its sole member

 

 

 

 

 

 

 

By:

 

/s/ Stanley C. Gale

 

 

 

 

Name: Stanley C. Gale

 

 

 

 

Title: Manager

 

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