ex10128.htm


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

              

                  Exhibit
            10.128      
    

      

    


    EXECUTION
      COPY

     

    LETTER
      AGREEMENT

     

    Effective
      as of October 31, 2007

     

    


     

    Reference
      is made to (a) that certain
      Membership Interest Purchase and Contribution Agreement by and among Mr. Stanley
      C. Gale, SCG Holding Corp., Mack-Cali Realty Acquisition Corp. (“MCRAC”)
      and Mack-Cali Realty, L.P. (“MCRLP”) dated as of March 7, 2006 and as
      amended through the date hereof (the “Contribution Agreement”), and (b)
      that certain 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 Investments”), Gale & Wentworth
      Vreeland, LLC, Gale Urban Solutions LLC, MSGW-ONE Campus Investors, LLC, MCRAC
      and MCRLP dated as of May 9, 2006 (the “Non-Portfolio Property
      Agreement”).  Capitalized terms used herein and not defined shall
      have the meaning ascribed to such terms in the Contribution Agreement or the
      Non-Portfolio Property Agreement, as applicable.

    


    WHEREAS,
      the
      undersigned parties have entered into a series of transactions pursuant to
      the
      Contribution Agreement and the Non-Portfolio Property Agreement with respect
      to
      the development, management and ownership of the real property that is the
      subject of such agreements; and

    


    WHEREAS,
      the
      undersigned parties desire to enter into this Letter Agreement to memorialize
      the understanding of the parties with respect to certain elements of the subject
      transactions and to make certain revisions to such agreements.

    


    NOW,
      THEREFORE, for and in consideration of the amounts set forth
      herein below, the mutual promises herein contained and other valuable
      consideration, the receipt and sufficiency of which are hereby acknowledged
      by
      each party hereto, and intending to be legally bound hereby, the parties hereby
      agree as follows:

     

    


    
      	
              1.  

            	
              Assignment
                and Assumption of M-C Belmar, LLC Membership
                Interests.

            


    

    


    
      	
              a.  

            	
              Mack-Cali
                Belmar Realty, LLC (“Mack Belmar”), the owner of a 99.9% Percentage
                Interest in M-C Belmar, LLC, a Delaware limited liability company
                (“M-C
                Belmar”), without representation or warranty except as set forth
                herein, hereby sells, transfers, assigns, delivers and conveys to
                Gale
                Investments its successors and assigns, all rights, title and interests
                in
                and to a 49.8% Percentage Interest in M-C Belmar (the “Transferred
                Interests”), and Gale Investments hereby accepts the Transferred
                Interests from Mack Belmar, it being expressly understood and agreed
                that
                such transfer is without assumption of any rights, obligations and
                liabilities of Mack Belmar heretofore or hereafter accrued with respect
                to
                the Transferred Interests under or pursuant to that certain Limited
                Liability Company Operating Agreement of M-C Belmar dated as of June
                15,
                2006 (the “M-C Belmar Operating Agreement”) and as hereinafter
                amended to reflect the transaction set forth
                herein.

            


    

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      	
              b.  

            	
              For
                and in consideration of the Transferred Interests, each member of
                M-C
                Belmar hereby agrees to a restatement of its capital account balance
                and
                to modify the terms of the M-C Belmar Operating Agreement relating
                to the
                distribution of Net Cash Flows (as defined in the M-C Belmar Operating
                Agreement) as follows (collectively, the “Amended Belmar
                Interests”):

            


    

    


    
      	
              i.  

            	
              The
                capital account of Mack Belmar in M-C Belmar shall be debited
                $2,000,000;

            


    

    


    
      	
              ii.  

            	
              The
                capital account of Gale Investments in M-C Belmar shall be credited
                with a
                deemed contribution of $2,000,000 (the “Gale Contribution
                Amount”);

            


    

    


    
      	
              iii.  

            	
              Mack
                Belmar’s right to receive the CLI Investor Preferential Return shall be
                terminated;

            


    

    


    
      	
              iv.  

            	
              The
                distribution of Net Cash Flows shall be
                payable:

            


    

    


    
      	
              1.  

            	
              First,
                to Mack Belmar until it shall have received payments of Net Cash
                Flows
                equal to the aggregate amount of all funds invested by Mack Belmar
                in M-C
                Belmar less the Gale Contribution
                Amount;

            


    

    


    
      	
              2.  

            	
              Second,
                to Gale Investments until it shall have received payments of Net
                Cash
                Flows equal to the Gale Contribution Amount;
                and

            


    

    


    
      	
              3.  

            	
              Thereafter,
                to Mack Belmar and Gale Investments in accordance with their respective
                Payout Percentages (as defined in the M-C Belmar Operating
                Agreement).

            


    

    


    
      	
              c.  

            	
              The
                parties hereto shall negotiate in good faith to modify the M-C Belmar
                Operating Agreement so as to effect the intent of the parties as
                closely
                as possible in an acceptable manner in order that the transactions
                contemplated by this Agreement are consummated to the greatest extent
                possible, it being expressly understood that Mack Belmar shall remain
                the
                majority holder of the Percentage Interests in M-C Belmar and continue
                to
                exercise sole management control of M-C
                Belmar.

            


    

    


    
      	
              2.  

            	
              Acceleration
                of Earnout Payments.  Notwithstanding anything to the
                contrary in that certain Amendment No. 8 to the Contribution Agreement
                dated as of May 23, 2007, it is expressly understood and agreed by
                MCRLP
                and the Sellers that the aggregate $6,000,000 in payments due to
                the
                Sellers from MCRLP in two equal installments on May 9, 2008 and May
                9,
                2009 pursuant to Section 2.02(c) of the Contribution Agreement, as
                amended, shall be deemed to be paid in full on the date hereof and
                shall
                consist of the following:

            


    

     

     

    
      
        
        

      

      
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              a.  

            	
              $4,000,000
                in cash to be paid by MCRLP or its affiliate to the Sellers;
                and

            


    

    


    
      	
              b.  

            	
              The
                issuance of the Transferred Interests in consideration of the Amended
                Belmar Interests.

            


    

    


    it
      being
      expressly understood by the parties that these transactions shall be deemed
      accomplished by a wire transfer of immediately available funds of $4,000,000
      by
      MCRLP or its affiliate to Gale Investments or its designated affiliate pursuant
      to wire transfer instructions attached hereto as Exhibit A.

    


    
      	
              3.  

            	
              Excluded
                Assets.

            


    

    


    
      	
              a.  

            	
              It
                is mutually acknowledged and agreed by the parties to this Agreement
                that
                any commissions (the “Commissions”) payable to The Gale Real Estate
                Advisors Company, L.L.C. (“Gale Advisors”) in connection with that
                certain Expansion Option Agreement by and between Gale 55 Corporate
                Associates II, LLC (“Gale II”) and Aventis Inc. (the “Expansion
                Option Agreement”) and pursuant to that certain Management/Leasing
                Agreement by and between Gale 55 Corporate Associates, LLC, The Gale
                Services Company, L.L.C. and Gale Advisors (the “Management
                Agreement”) in the amount of $2,336,891 are an Excluded Asset
                described in Section 5.11(c) of the Contribution Agreement. Upon
                exercise
                of the expansion option specified in the Expansion Option
                Agreement:

            


    

    


    
      	
              i.  

            	
              If
                Gale II fails to pay all or any portion of the Commissions to Gale
                Investments, then MCRLP shall pay to Gale Investments or its designated
                successors or assigns up to one-half (1/2) of the amount of such
                unpaid
                portion of the Commissions (the “MCRLP Contribution”);
                provided, however, that the aggregate amount of MCRLP’s
                contributions for the payment of the Commissions, either directly
                through
                the payment of the MCRLP Contribution or indirectly through the funding
                of
                any capital call properly made for such purpose, shall not exceed
                $769,000.

            


    

    


    
      	
              ii.  

            	
              MCRLP
                shall not, directly or indirectly through its affiliates and subsidiaries
                as a partner in Gale II, object to or block the payment of any Commissions
                and will consent to and fund any capital call properly made for the
                same;
                provided, however, that the aggregate amount of MCRLP’s
                contributions for the payment of the Commissions, either directly
                in the
                form of the MCRLP Contribution or indirectly through the funding
                of any
                capital call properly made for such purpose, shall not exceed
                $769,000.

            


    

    


    
      	
              iii.  

            	
              If
                requested in writing by Gale Investments, MCRLP shall accept the
                payment
                of any Commissions on behalf of Gale Investments and distribute such
                Commissions in accordance with the written instructions of Gale
                Investments.

            


    

     

     

     

    
      
        
        

      

      
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              iv.  

            	
              MCRLP
                hereby undertakes to pay to Gale Investments or its designated successors
                or assigns any portion of the Commissions received by MCRLP or any
                of its
                subsidiaries or affiliates.

            


    

    


    
      	
              v.  

            	
              It
                is expressly understood and agreed by the parties to this Agreement
                that,
                except for the MCRLP Contribution, MCRLP shall have no obligation
                to take
                or cause to be taken any action to solicit the payment of the
                Commissions.

            


    

    


    
      	
              vi.  

            	
              In
                the event that Aventis Inc. does not exercise its expansion option
                and
                Gale II becomes entitled to the $7,000,000 penalty payable to such
                entity
                under the terms of the Expansion Option Agreement, any portion of
                such
                penalty payable to MCRLP or any of its subsidiaries or affiliates
                shall
                not be considered an Excluded Asset and MCRLP shall be entitled to
                retain
                such penalty.

            


    

    


    
      	
              4.  

            	
              Expense
                Reimbursements.

            


    

    


    
      	
              a.  

            	
              MCRLP
                hereby waives and forfeits all rights, title and interest to any
                reimbursement under Section 7.07 of the Non-Portfolio Property Agreement
                only for services performed by Mark Yeager, whether prior to or after
                the
                date hereof.

            


    

    


    
      	
              b.  

            	
              All
                other reimbursements under Section 7.07 of the Non-Portfolio Property
                Agreement for services performed by persons other than Mark Yeager,
                whether prior to or after the date hereof, shall continue in full
                force
                and effect in accordance with the terms thereof; provided,
                however, that such sum shall not be required to be paid currently,
                but shall accrue and include a carrying charge of 6% per annum, compounded
                monthly, commencing on the date hereof (the “Expense
                Accruals”).  The amount of the Expense Accruals shall be
                credited toward MCRAC’s Rock Cash Contribution under Section 2.03(f) of
                the Non-Portfolio Property Agreement in furtherance of MCRAC’s acquisition
                of the Rock GW Office Interests, subject to the satisfaction of all
                of the
                conditions of Section 2.06(b) of the Non-Portfolio Property
                Agreement.  If, as of May 9, 2009, the acquisition of the Rock
                GW Office Interests by MCRAC has not closed for any reason (other
                than a
                breach by MCRAC of its obligations under the Non-Portfolio Property
                Agreement), then:

            


    

    


    
      	
              i.  

            	
              The
                then outstanding balance of the Expense Accruals, with accrued carrying
                charges through and as of May 9, 2009 or until paid, plus an additional
                $1,000,000 in cash, shall be paid by Gale/Yeager Investments LLC
                to MCRLP
                within three (3) business days; and

            


    

     

     

     

    
      
        
        

      

      
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              ii.  

            	
              All
                other terms and conditions of the Non-Portfolio Property Agreement
                shall
                remain in full force and effect.

            


    

    


    
      	
              c.  

            	
              Gale/Yeager
                Investments LLC hereby pledges to MCRLP, and grants to MCRLP a security
                interest in, Gale/Yeager Investments LLC’s interests in the Rock GW Office
                Interests, and any related rights to payment, profits, distributions
                in
                connection therewith, as the case may be, and all proceeds therefrom,
                including any securities and moneys received, whether now existing
                or
                acquired, as security for the prompt and complete performance of
                Gale/Yeager Investments LLC’s obligations under paragraph (b) of Section 4
                of this Agreement.

            


    

    


    
      	
              5.  

            	
              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
                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.  If any term or other provision
                of this Agreement is inconsistent or in conflict with a term or provision
                of any other oral or written agreement or arrangement between the
                parties
                hereto, the terms of this Agreement shall supersede all such prior
                agreements or arrangements.

            


    

    


    
      	
              6.  

            	
              PFV
                Capital Call.  MCRLP hereby acknowledges and agrees that it
                will, either directly or indirectly through its affiliates and
                subsidiaries, consent to any capital call made under the operating
                agreements of The Gale PFV Investor Company, L.L.C., GMW Village
                Associates, LLC or GE/Gale Funding LLC relating to MCRLP’s interests in
                The Gale PFV Investor Company, L.L.C. for the purpose of paying accrued
                and unpaid management fees and expenses, regardless of when earned
                (collectively, the “PFV Accruals”).  MCRLP, either
                directly or indirectly through its affiliates and subsidiaries, will
                consent to and fund any capital call properly made for the purpose
                of
                paying the PFV Accruals, and in the event of such a capital call,
                MCRLP
                further undertakes to pay to Gale Investments or its designated successors
                or assigns Gale Investments’ portion of the PFV
                Accruals.

            


    

     

    
      	
              7.  

            	
              Governing
                Law.  This Agreement shall be governed by and construed in
                accordance with the internal laws of the State of Delaware without
                reference to its principles regarding conflicts of
                laws.

            


    

     

    
      	
              8.  

            	
              Waiver.  Any
                party to this Agreement may (a) extend the time for the performance
                of any
                of the obligations or other acts of the other party, (b) waive any
                inaccuracies in the representations and warranties of the other party
                contained herein or in any document delivered by the other party
                pursuant
                hereto, or (c) waive compliance with any of the agreements of the
                other
                party or conditions to such party’s obligations contained herein. Any such
                extension or waiver shall be valid only if set forth in an instrument
                in
                writing signed by the party to be bound thereby. Any waiver of any
                term or
                condition shall not be construed as a waiver of any subsequent breach
                or a
                subsequent waiver of the same term or condition, or a waiver of any
                other
                term or condition of this Agreement. The failure of either party
                hereto to
                assert any of its rights hereunder shall not constitute a waiver
                of any of
                such rights.

            


    

     

     

     

    
      
        
        

      

      
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              9.  

            	
              Binding
                Effect.  This Agreement shall be binding upon and shall
                inure to the benefit of the parties hereto and their respective heirs,
                executors, administrators, legal representatives, successors and
                assigns.

            


    

     

    
      	
              10.  

            	
              Counterparts.  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.

            


    

     

    
      	
              11.  

            	
              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, 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.

            


    

     

    


    


    [Signature
      Pages Follow]


    
      
                 

        
        

      

      
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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.

     

    


    GCF
      II INVESTOR LLC

    


    By:           /s/
      Stanley C. Gale

    Name:   Stanley
      C.
      Gale

    Title:     Managing
      Member

    


    


    THE
      GALE INVESTMENTS COMPANY,
      LLC

    


    By:           /s/
      Stanley C. Gale

    Name:   Stanley
      C.
      Gale

    Title:     Managing
      Member

    


    


    GALE
      & WENTWORTH VREELAND, LLC

    


    By:           /s/
      Stanley C. Gale

    Name:   Stanley
      C.
      Gale

    Title:     Managing
      Member

    


    


    GALE
      URBAN SOLUTIONS LLC

    


    By:           /s/
      Stanley C. Gale

    Name:   Stanley
      C.
      Gale

    Title:     Managing
      Member

    


    


    MSGW-ONE
      CAMPUS INVESTORS,
      LLC

    


    By:           /s/
      Stanley C. Gale

    Name:   Stanley
      C.
      Gale

    Title:     Managing
      Member

    


    


    SCG
      HOLDING CORP.

    


    By:           /s/
      Stanley C. Gale

    Stanley
      C. Gale

    Chief
      Executive Officer

    



    
      
          

        
        

      

      
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    STANLEY
      C. GALE

    


    /s/
      Stanley C.
      Gale

    


    


    MARK
      YEAGER

    


    /s/
      Mark Yeager

    


    


    MACK-CALI
      REALTY, L.P.

    


    By:           Mack-Cali
      Realty Corporation, its general partner

    


    By:           /s/
      Mitchell E.  Hersh 

    Mitchell
      E. Hersh

    President
      and Chief Executive
      Officer

    


    


    MACK-CALI
      REALTY ACQUISITION
      CORP.

    


    By:           /s/
      Mitchell E.  Hersh 

    Mitchell
      E. Hersh

    President
      and Chief Executive
      Officer

    


    


    MACK-CALI
      BELMAR REALTY,
      LLC

    


    By:           Mack-Cali
      Services, Inc., its sole member

    


    By:           /s/
      Mitchell E.  Hersh 

    Mitchell
      E. Hersh

    President
      and Chief Executive
      Officer

    


    


    M-C
      BELMAR, LLC

    


    By:           Mack-Cali
      Belmar Realty, LLC, its Manager

    


    By:           Mack-Cali
      Services, Inc., its sole member

    


    By:           /s/
      Mitchell E.  Hersh  

    Mitchell
      E. Hersh

    President
      and Chief Executive
      Officer


    
      
                

        
        

      

      
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    GALE/YEAGER
      INVESTMENTS LLC

    


    By:           /s/
      Mark Yeager

    Name:   Mark
      Yeager

    Title:     Member

    



    
      
                      

        
        

      

      
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