Document:

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

 

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

 

 

	
  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

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

 

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”);

 

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

 

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

 

 

“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

 

“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

 

“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

 

“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.

 7

 

“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

 

 

	
  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;

 

 9

 

(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, 

 10
 

 

 

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

 11
 

 

 

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

 12
 

 

 

(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 

 13
 

 

 

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).

 14
 

 

 

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.

 15
 

 

 

(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

 16
 

 

 

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 

 17
 

 

 

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 

 18
 

 

 

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

 19
 

 

 

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.

 20
 

 

 

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.

 

 21

 

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. 

 22
 

 

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. 

 23
 

 

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 

 24
 

 

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.

 25
 

 

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 

 26
 

 

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 

 27
 

 

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.

 28
 

 

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

 29
 

 

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 

 30
 

 

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 

 31
 

 

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.

[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 32
 

 

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 33
 

 

 

	
  

  	
   

  	
  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

  

 

 34Exhibit 10.3

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY

OPERATING AGREEMENT

OF

THE GALE
PFV INVESTOR COMPANY, L.L.C.

(a
Delaware Limited Liability Company)

 

May 9,
2006

 

 

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
  I.

  	
   

  	
  DEFINED TERMS

  	
   

  	
  1

  
	
   

  	
   

  	
  1.01.

  	
   

  	
  Defined Terms

  	
   

  	
  1

  
	
   

  	
   

  	
  1.02.

  	
   

  	
  Other Terms

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
   

  	
  ORGANIZATION

  	
   

  	
  7

  
	
   

  	
   

  	
  2.01.

  	
   

  	
  Formation.

  	
   

  	
  7

  
	
   

  	
   

  	
  2.02.

  	
   

  	
  Name and Principal Place of Business.

  	
   

  	
  7

  
	
   

  	
   

  	
  2.03.

  	
   

  	
  Term

  	
   

  	
  8

  
	
   

  	
   

  	
  2.04.

  	
   

  	
  Registered Agent, Registered Office and Foreign
  Qualification

  	
   

  	
  8

  
	
   

  	
   

  	
  2.05.

  	
   

  	
  Purpose

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
   

  	
  MEMBERS

  	
   

  	
  8

  
	
   

  	
   

  	
  3.01.

  	
   

  	
  Admission of Members

  	
   

  	
  8

  
	
   

  	
   

  	
  3.02.

  	
   

  	
  Limitation on Liability.

  	
   

  	
  8

  
	
   

  	
   

  	
  3.03.

  	
   

  	
  Third-Party Debt Liability

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
   

  	
  CAPITAL

  	
   

  	
  9

  
	
   

  	
   

  	
  4.01.

  	
   

  	
  Records

  	
   

  	
  9

  
	
   

  	
   

  	
  4.02.

  	
   

  	
  Capital Contributions

  	
   

  	
  9

  
	
   

  	
   

  	
  4.03.

  	
   

  	
  Capital Accounts

  	
   

  	
  9

  
	
   

  	
   

  	
  4.04.

  	
   

  	
  No Further Capital Contributions

  	
   

  	
  10

  
	
   

  	
   

  	
  4.05.

  	
   

  	
  Book Basis Adjustments

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
   

  	
  INTERESTS IN THE COMPANY

  	
   

  	
  11

  
	
   

  	
   

  	
  5.01.

  	
   

  	
  Percentage Interests

  	
   

  	
  11

  
	
   

  	
   

  	
  5.02.

  	
   

  	
  Return of Capital

  	
   

  	
  11

  
	
   

  	
   

  	
  5.03.

  	
   

  	
  Ownership

  	
   

  	
  11

  
	
   

  	
   

  	
  5.04.

  	
   

  	
  Waiver of Partition; Nature of Interests in the
  Company

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
   

  	
  ALLOCATIONS AND DISTRIBUTIONS

  	
   

  	
  11

  
	
   

  	
   

  	
  6.01.

  	
   

  	
  Allocations

  	
   

  	
  11

  
	
   

  	
   

  	
  6.02.

  	
   

  	
  Special Allocations and Compliance with
  Section 704(b)

  	
   

  	
  12

  
	
   

  	
   

  	
  6.03.

  	
   

  	
  Distributions

  	
   

  	
  13

  
	
   

  	
   

  	
  6.04.

  	
   

  	
  Distributions in Liquidation

  	
   

  	
  14

  
	
   

  	
   

  	
  6.05.

  	
   

  	
  Reinvestment of Cash Flow

  	
   

  	
  14

  
	
   

  	
   

  	
  6.06.

  	
   

  	
  Tax Matters

  	
   

  	
  14

  
	
   

  	
   

  	
  6.07.

  	
   

  	
  Tax Matters Partner

  	
   

  	
  14

  
	
   

  	
   

  	
  6.08.

  	
   

  	
  Section 704(c)

  	
   

  	
  15

  
	
   

  	
   

  	
  6.09.

  	
   

  	
  REIT Compliance

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VII.

  	
   

  	
  MANAGEMENT

  	
   

  	
  15

  
	
   

  	
   

  	
  7.01.

  	
   

  	
  Management

  	
   

  	
  15

  

 

 i
 

 

 

	
  

  	
   

  	
  7.02.

  	
   

  	
  Meetings of the Members.

  	
   

  	
  16

  
	
   

  	
   

  	
  7.03.

  	
   

  	
  Remuneration for Managing Member

  	
   

  	
  17

  
	
   

  	
   

  	
  7.04.

  	
   

  	
  Duties and Conflicts.

  	
   

  	
  17

  
	
   

  	
   

  	
  7.05.

  	
   

  	
  Company Expenses

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VIII.

  	
   

  	
  BOOKS AND RECORDS

  	
   

  	
  18

  
	
   

  	
   

  	
  8.01.

  	
   

  	
  Books and Records

  	
   

  	
  18

  
	
   

  	
   

  	
  8.02.

  	
   

  	
  Accounting and Fiscal Year

  	
   

  	
  18

  
	
   

  	
   

  	
  8.03.

  	
   

  	
  Reports.

  	
   

  	
  18

  
	
   

  	
   

  	
  8.04.

  	
   

  	
  The Company Accountant

  	
   

  	
  19

  
	
   

  	
   

  	
  8.05.

  	
   

  	
  Reserves

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IX.

  	
   

  	
  TRANSFER OF INTERESTS

  	
   

  	
  19

  
	
   

  	
   

  	
  9.01.

  	
   

  	
  No Transfer.

  	
   

  	
  19

  
	
   

  	
   

  	
  9.02.

  	
   

  	
  Permitted Transfers.

  	
   

  	
  19

  
	
   

  	
   

  	
  9.03.

  	
   

  	
  Transferees

  	
   

  	
  20

  
	
   

  	
   

  	
  9.04.

  	
   

  	
  Admission of Additional Members.

  	
   

  	
  20

  
	
   

  	
   

  	
  9.05.

  	
   

  	
  Drag-Along Rights.

  	
   

  	
  20

  
	
   

  	
   

  	
  9.06.

  	
   

  	
  Override on Permitted Transfers.

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  X.

  	
   

  	
  EXCULPATION AND INDEMNIFICATION

  	
   

  	
  22

  
	
   

  	
   

  	
  10.01.

  	
   

  	
  Exculpation

  	
   

  	
  22

  
	
   

  	
   

  	
  10.02.

  	
   

  	
  Indemnification.

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XI.

  	
   

  	
  DISSOLUTION AND TERMINATION

  	
   

  	
  24

  
	
   

  	
   

  	
  11.01.

  	
   

  	
  Dissolution

  	
   

  	
  24

  
	
   

  	
   

  	
  11.02.

  	
   

  	
  Termination

  	
   

  	
  25

  
	
   

  	
   

  	
  11.03.

  	
   

  	
  Liquidating Member

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XII.

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  26

  
	
   

  	
   

  	
  12.01.

  	
   

  	
  Covenants, Representations and Warranties of the
  Members.

  	
   

  	
  26

  
	
   

  	
   

  	
  12.02.

  	
   

  	
  Further Assurances

  	
   

  	
  28

  
	
   

  	
   

  	
  12.03.

  	
   

  	
  Notices

  	
   

  	
  28

  
	
   

  	
   

  	
  12.04.

  	
   

  	
  Governing Law

  	
   

  	
  29

  
	
   

  	
   

  	
  12.05.

  	
   

  	
  Captions

  	
   

  	
  29

  
	
   

  	
   

  	
  12.06.

  	
   

  	
  Pronouns

  	
   

  	
  29

  
	
   

  	
   

  	
  12.07.

  	
   

  	
  Successors and Assigns

  	
   

  	
  29

  
	
   

  	
   

  	
  12.08.

  	
   

  	
  Extension Not a Waiver

  	
   

  	
  29

  
	
   

  	
   

  	
  12.09.

  	
   

  	
  Creditors Not Benefited

  	
   

  	
  30

  
	
   

  	
   

  	
  12.10.

  	
   

  	
  Recalculation of Interest

  	
   

  	
  30

  
	
   

  	
   

  	
  12.11.

  	
   

  	
  Severability

  	
   

  	
  30

  
	
   

  	
   

  	
  12.12.

  	
   

  	
  Entire Agreement

  	
   

  	
  30

  
	
   

  	
   

  	
  12.13.

  	
   

  	
  Publicity

  	
   

  	
  30

  
	
   

  	
   

  	
  12.14.

  	
   

  	
  Counterparts

  	
   

  	
  31

  
	
   

  	
   

  	
  12.15.

  	
   

  	
  Confidentiality.

  	
   

  	
  31

  
	
   

  	
   

  	
  12.16.

  	
   

  	
  Venue

  	
   

  	
  32

  
	
   

  	
   

  	
  12.17.

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  32

  

 

 ii

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY

OPERATING AGREEMENT

OF

THE GALE PFV INVESTOR COMPANY, L.L.C.

This AMENDED AND RESTATED LIMITED LIABILITY COMPANY
OPERATING AGREEMENT of The Gale PFV Investor Company, L.L.C. (the “Company”)
is made and entered into and shall be effective as of May 9, 2006, by and
between The Gale Company, L.L.C., a New Jersey limited liability company (“Managing
Member”), and  Stanley C. Gale (“Gale”).

R E C
I T A L S:

WHEREAS, the Company exists as a limited liability
company pursuant to the provisions of the Delaware Limited Liability Company
Act (the “Delaware Act”) under the name “The Gale PFV Investor Company,
L.L.C.,” pursuant to a Certificate of Formation dated as of August 4, 2003
(the “Certificate of Formation”);

WHEREAS, Gale has been admitted as a Member of the
Company; and

WHEREAS, the parties wish to set forth the rights and
obligations of the Members of the Company.

NOW, THEREFORE,
the parties hereto hereby agree as follows:

I.              DEFINED TERMS

1.01.   Defined Terms.   As used in this Agreement, the
following terms have the meanings set forth below:

“Adjusted Capital Account Balance” means, with
respect to any Member for any period, the balance, if any, in such Member’s
Capital Account as of the end of such period, after giving effect to the
following adjustments:

(a)           Credit
to such Capital Account any amounts that such Member is obligated to restore or
is deemed obligated to restore as described in the penultimate sentence of
Treasury Regulation Section 1.704-2(g)(1) and in Treasury
Regulation Section 1.704-2(i)(5); and

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

“Adjusted Capital Account Deficit” means, with
respect to any Member for any taxable year of the Company, the deficit balance,
if any, in such Member’s Adjusted Capital Account Balance as of the end of such
taxable year.

“Affiliate” means, with respect to any Person,
any other Person directly or indirectly controlling, controlled by, or under
common control with such Person or owning or controlling, 

 1
 

 

directly or indirectly, 51% or more of the outstanding
voting interests of such Person. For purposes of this definition, the term “control”,
when used with respect to any Person means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person whether through the ownership of voting securities, by
contract or otherwise.

“Agreement” means this Amended and Restated
Limited Liability Company Operating Agreement, including any exhibits or
schedules attached hereto, as the same may be further amended or restated from
time to time pursuant to the terms of this Agreement.

“Book Basis” means, with respect to any asset
of the Company, the adjusted basis of such asset for federal income tax
purposes; provided, however, that (a) if any asset is
contributed to the Company, the initial Book Basis of such asset shall equal
its fair market value on the date of contribution (as agreed to by the
Members), and (b) if the Capital Accounts of the Members are adjusted
pursuant to Treasury Regulation Section 1.704-1(b) to reflect
the fair market value of any asset of the Company, the Book Basis of such asset
shall be adjusted to equal its respective fair market value as of the time of
such adjustment (as agreed to by the Members), in accordance with such Treasury
Regulation. The Book Basis of all assets of the Company shall be adjusted
thereafter by depreciation or amortization as provided in Treasury Regulation Section 1.704-1(b)(2)(iv)(g) and
any other adjustment to the basis of such assets other than depreciation or
amortization.

“Business Day” means any day that is not a
Saturday, Sunday or a day on which banks are required or permitted to be closed
in the State of New York.

“Capital Account” means the separate account
maintained for each Member under Section 4.03 hereof.

“Capital Contribution” means the contributions
made by the Members to the capital of the Company pursuant to Article IV
hereof.

“Cash Equivalents”
shall mean (a) debt instruments issued or guaranteed by the United States
or its agencies or instrumentalities and maturing within six months or less
from the date of acquisition; (b) commercial paper rated P-1 or A-1
on the date of acquisition and maturing within six months or less from the date
of acquisition; (c) overnight time deposits (whether or not insured); (d) interest
bearing deposits in domestic and foreign branches of United States commercial
banks having capital and surpluses of at least $250,000,000; (e) money
market mutual funds with assets of at least $750,000,000, substantially all of
which assets consist of obligations of the type described in the foregoing
clauses; and (f) similar quality short term investments.

“Certificate of Formation” has the meaning set
forth in the Recitals to this Agreement.

“CLI Shortfall” has
the meaning set forth in Section 9.05(a) hereof.

“Code” means the Internal Revenue Code of 1986,
as amended. Any reference herein to any specific section or sections of the
Code shall be deemed to include a reference to any corresponding provision of
future laws.

 

[Amended and Restated LLC Agreement of The Gale PFV
Investor Company, LLC]

 2
 

 

“Company” has the meaning set forth the
Preamble to this Agreement.

“Company
Accountant” has the meaning set forth in Section 8.04 hereof.

“Company Minimum Gain” means “partnership
minimum gain” as defined in Treasury Regulation Section 1.704-2(d).

“Confidential Information” has the meaning set
forth in Section 12.15(a) hereof.

“Delaware Act” has the meaning set forth in the
Recitals to this Agreement.

“Drag-Along Rights” has the meaning set forth
in Section 9.05(a) hereto.

“Drag-Along Response Period” has the meaning
set forth in Section 9.05(b) hereto.

“Electronic Participation” has the meaning set
forth in Section 7.02(c) hereof.

“Embargoed Person” has the meaning set forth in
Section 12.01(a)(x) hereof.

“Expenses” means, for any period, the sum of
the total gross cash expenditures of the Company during such period.

“GAAP” has
the meaning set forth in Section 8.02 hereof.

“Gale” has
the meaning set forth in the Preamble of this Agreement.

“Indemnified
Party” has the meaning set forth in Section 10.02 hereof.

“Interest” means, with respect to any Member at
any time, the interest of such Member in the Company at such time, including
the right of such Member to any and all of the benefits to which such Member
may be entitled as provided in this Agreement, together with the obligations of
such Member to comply with all of the terms and provisions of this Agreement.

“Liquidating Member” means the Member
designated as such by the Managing Member from time-to-time; provided, however,
that any Member that causes the dissolution of the Company under Section 11.01(c) hereof
shall not serve as the Liquidating Member.

“Loss” means, for each taxable year or other
period, an amount equal to the Company’s items of taxable deduction and loss
for such year or other period, determined in accordance with Section 703(a) of
the Code (including all items of loss or deduction required to be stated
separately under Section 703(a)(1) of the Code), with the following
adjustments:

(a)           Any
expenditures of the Company described in Section 705(a)(2)(B) of the
Code or treated as Section 705(a)(2)(B) expenditures under Treasury
Regulation Section 1.704-1(b)(2)(iv)(i), and not otherwise taken
into account in computing Loss, will be considered an item of Loss;

(b)           Loss
resulting from any disposition of any assets of the Company with respect to
which gain or loss is recognized for federal income tax purposes will be
computed by reference 

 3
 

 

 

to the Book Basis of such property, notwithstanding
that the adjusted tax basis of such property may differ from its Book Basis;

(c)           In
lieu of depreciation, amortization and other cost recovery deductions taken
into account in computing taxable income or loss, there will be taken into
account depreciation for the taxable year or other period as determined in
accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(g);

(d)           Any
items of deduction and loss specially allocated pursuant to Section 6.08
shall not be considered in determining Loss; and

(e)           Any
decrease to Capital Accounts as a result of any adjustment to the Book Basis of
Company assets pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(f) shall
constitute an item of Loss.

“Managing Member” has the meaning set forth the
Preamble to this Agreement.

“Managing Member Preferential Return” means,
with respect to the Managing Member, the distribution of Net Cash Flow to the
Managing Member equal to the aggregate amount of (i) the Purchase Amount
plus all of the Managing Member’s Capital Contributions pursuant to Sections
4.01 and 4.02 and (ii) an internal rate of return on the Purchase Amount
plus all of the Managing Member’s Capital Contributions made pursuant to
Sections 4.01 and 4.02 of 10% per annum, based on a 365 or 366-day year, as the case may be,
compounded on a quarterly basis in arrears commencing on the date hereof with
respect to the Purchase Amount and the date or dates that the Managing
Member’s Capital Contribution(s) is
(or are) received by the Company, taking into account the timing and amounts of
all such distributions of Net Cash Flow from the Company to the Managing
Member. Managing Member Preferential Return shall be computed by
assuming that such Capital Contribution(s) made by the Managing
Member, and all such distributions
received by the Managing Member,
occur on the day on which they are actually made or received.

“Material
Notices” has the meaning set forth in Section 12.03 hereof.

“MCRC” has
the meaning set forth in Section 6.09 hereof.

“Member” or “Members” means one or more
(as the case may be) of the Managing Member or Gale and any other Person who,
from time-to-time, is admitted as a member of the Company in accordance with
this Agreement and applicable law, so long as such Person continues as a member
of the Company.

“Member Minimum Gain” means the Company’s “partner
nonrecourse debt minimum gain” as defined in Treasury Regulation Section 1.704-2(i)(2).

“Member Nonrecourse Debt Minimum Gain” means an
amount, with respect to each Member Nonrecourse Debt, equal to the Company
Minimum Gain that would result if such Member Nonrecourse Debt were treated as
a nonrecourse liability of the Company, determined in accordance with Treasury
Regulations Sections 1.704-2(i)(2) and (3).

 

 4
 

 

“Member Nonrecourse Deductions” means “partner
nonrecourse deductions” as defined in Treasury Regulation Section 1.704-2(i)(2).

“Net Cash Flow” means, for any period, the
excess of (a) Revenues for such period over (b) Expenses for such
period.

“Net Loss” means, for any period, the excess of
items of Loss over items of Profit, if applicable, for such period determined
without regard to any items of Profit or Loss allocated pursuant to Section 6.02
hereof.

“Net Profit” means, for any period, the excess
of items of Profit over items of Loss, if applicable, for such period
determined without regard to any items of Profit or Loss allocated pursuant to Section 6.02
hereof.

“Nonrecourse Deductions” has the meaning set
forth in Treasury Regulation Section 1.704-2.

“Payout Percentages”
means, with respect to each Member, the percentages set forth below opposite
its name as follows:

	
  Member

  	
   

  	
  Payout Percentage

  	
   

  
	
  MANAGING MEMBER

  	
   

  	
  50

  	
  %

  
	
  GALE

  	
   

  	
  50

  	
  %

  

 

“Percentage Interests” means, with respect to
each Member, the percentage set forth below opposite its name (subject to
adjustment as provided in this Agreement):

	
  MANAGING MEMBER

  	
   

  	
  99.9

  	
  %

  
	
  GALE

  	
   

  	
  00.1

  	
  %

  

 

“Person” means any individual, partnership,
corporation, limited liability company, trust or other entity.

“Purchase Amount”
means One Million Seven Hundred Seventy Four Thousand Five Hundred
Dollars ($1,774,500).

“Purchaser” means any
third-party prospective purchaser or purchasers of all of the Interests of a
Member which is not a Related Person of such Member.

“Profit” means, for each taxable year or other
period, an amount equal to the Company’s taxable income and gain for such year
or other period, determined in accordance with Section 703(a) of the
Code (including all items of income and gain required to be stated separately
under Section 703(a)(1) of the Code), with the following adjustments:

(a)           Any
income of the Company that is exempt from federal income tax and not otherwise
taken into account in computing Profit or Loss will be added to taxable income;

 5
 

 

(b)           Gain
resulting from any disposition of any assets of the Company with respect to
which gain or loss is recognized for federal income tax purposes will be
computed by reference to the Book Basis of such property, notwithstanding that
the adjusted tax basis of such property may differ from its Book Basis;

(c)           Any
items specially allocated pursuant to Section 6.08 shall not be considered
in determining Profit; and

(d)           Any
increase to Capital Accounts as a result of any adjustment to the Book Basis of
Company assets pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(f) shall
constitute an item of Profit.

“Readily Marketable
Securities” means those securities that (a) are (i) debt or
equity securities of or other interests in any Person that are traded on a
national security exchange, reported on by the National Association of
Securities Dealers Automated Quotation System or otherwise actively traded over
the counter or (ii) debt securities of an issuer that has debt or equity
securities that are so traded or so reported on and that a nationally
recognized securities firm has agreed to make a market in and (b) are not
subject to restrictions on transfer as a result of any applicable contractual
provisions or the provisions of the Securities Act.

“Regulatory Allocations” has the meaning set
forth in Section 6.02(f) hereof.

“REIT”
means a real estate investment trust as defined under the Code.

“Related Persons” means, as to any Person, its
Affiliates, members, partners, directors, officers, shareholders and employees.

“Required
Capital Call” has the meaning set forth in Section 4.02 hereof.

“Reserve
Accounts” has the meaning set forth in Section 8.05 hereof.

“Revenues” means,
for any period, the sum of the total gross cash revenues received by the
Company during such period.

“Sale” has the meaning set forth in Section 9.05(a) hereof.

“Securities Act” has the meaning set forth in Section 12.01(a)(vi) hereof.

“Securities Laws” has the meaning set forth in Section 12.01(a)(vi) hereof.

“Tax Matters
Partner” has the meaning set forth in Section 6.07 hereof.

“Transfer”
has the meaning set forth in Section 9.01 hereof.

“Treasury Regulation” or “Regulation”
means, with respect to any referenced provision, such provision of the
regulations of the United States Department of the Treasury or any successor
provision.

 6
 

 

“U.S. Government
Blacklists” means, (a) the two (2) lists maintained by the United
States Department of Commerce (Denied Persons and Entities; the Denied
Persons), (b) the list maintained by the United States Department of
Treasury (Specially Designated Nationals and Blocked Persons), and (c) the
list by the United States Department of State (Terrorist Organizations and
Debarred Parties).

1.02.   Other Terms.   As used in this
Agreement, unless otherwise specified, (a) all references to Sections,
Articles or Exhibits are to Sections, Articles or Exhibits of this Agreement, (b) each
accounting term has the meaning assigned to it in accordance with GAAP, (c) all
Exhibits, Schedules, Addenda and other attachments to this Agreement are
specifically incorporated into and made a part of this Agreement by any
reference thereto in this Agreement, (d) the terms “include” and “including”
shall be construed as if followed by the phrase “without limitation”, and (e) all
terms used in this Agreement which are not defined in this Article I shall
have the meaning set forth elsewhere in this Agreement.

II.            ORGANIZATION

2.01.   Formation. (a)           The
Company was formed by the filing of the Certificate of Formation with the
Secretary of State of the State of Delaware. The Members agree that the Company
shall continue to be a limited liability company under and pursuant to the
Delaware Act, upon and subject to the terms and conditions set forth in this
Agreement. The Managing Member is hereby authorized to file and record any
amendments to the Certificate of Formation and such other documents as may be
required or appropriate under the Delaware Act or the laws of any other
jurisdiction in which the Company may conduct business or own property.

(b)           The Managing Member is the Company’s
designated “authorized person” and shall continue as the designated “authorized
person” within the meaning of the Delaware Act. The Managing Member shall
execute, deliver and file any other certificates (and any amendments and/or
restatements thereof) necessary for the Company to qualify to do business in
the State of New Jersey and in any other jurisdiction in which the Company may
wish to conduct business.

2.02.        Name and Principal Place of Business.

(a)           The name of the Company shall be The
Gale PFV Investor Company, L.L.C. The Managing Member may change the name of
the Company from time-to-time and may adopt one or more fictitious names for
use by the Company. All business of the Company shall be conducted under such
name, and title to all assets of the Company shall be held in such name.

(b)           The principal place of business and
office of the Company shall be located at the offices of the Managing Member,
100 Campus Drive, Suite 200, Florham Park, New Jersey 07932. The Managing
Member may from time-to-time change such principal office and place of business
or may change or establish such additional offices or places of business of the
Company as it may deem necessary or appropriate for the operation of the
Company’s business. The Managing Member may from time to time change its place
of business or may change or

 7
 

 

establish such substitute
or additional offices or places of business as it may deem necessary or
appropriate.

2.03.   Term.   The term of the Company
commenced on the date of the filing of the Certificate of Formation pursuant to
the Delaware Act and shall continue in full force and effect until the
dissolution and termination of the Company pursuant to Article XI or as otherwise
provided herein.

2.04.   Registered Agent, Registered Office and
Foreign Qualification.   The name of the Company’s registered agent for
service of process shall be Corporation Trust Center, and the address of the
Company’s registered agent and the address of the Company’s registered office
in the State of Delaware shall be 1209 Orange Street, City of Wilmington,
County of New Castle, Delaware 19801. Such agent and such office may be changed
from time-to-time by the Managing Member. The Managing Member, or any other
Person authorized by the Managing Member, is hereby authorized, for the purpose
of authorizing or qualifying the Company to do business in any state, territory
or dependency of the United States in which it is necessary or expedient for
the Company to transact business, to do any and all acts and things necessary
to obtain from such state, territory or dependency any such authorization or
qualification.

2.05.   Purpose.   The
purpose of the Company shall be transacting any and all lawful business for
which a limited liability company may be organized under the Delaware Act.

III.           MEMBERS

3.01.   Admission of Members.   Gale
and the Managing Member are the Members of the Company as of the date hereof.
Except as expressly permitted by this Agreement, no other Person shall be
admitted as a Member of the Company, and no additional Interests shall be
issued, without the prior written approval of the Managing Member.

3.02.        Limitation on Liability.

(a)           Except as otherwise expressly
provided in the Delaware Act, the debts, obligations and liabilities of the
Company, whether arising in contract, tort or otherwise, shall be solely the
debts, obligations and liabilities of the Company, and no Member shall be
obligated personally for any such debt, obligation or liability of the Company
solely by reason of being a member of the Company. Except as otherwise
expressly provided in the Delaware Act or as provided in Section 10.02(b) hereof,
but subject to the provisions of subparagraph (b) of this Section 3.02,
the liability of each Member shall be limited to the amount of Capital
Contributions made by such Member in accordance with the provisions of this
Agreement, but only when and to the extent the same shall become due and
payable pursuant to the provisions of this Agreement. Further, no Managing
Member, general or limited partner of any Member, shareholder, member or other
holder of any equity or other ownership or beneficial interest of any Member,
or any officer, director or employee of any of the foregoing or any of their
Related Persons shall be obligated personally for any debt, obligation or other
liability of the Company solely by reason of their being a Managing Member,
general or limited partner of any Member, shareholder or member or other holder
of any equity interest of any Member, or officer, director or employee of any
of the foregoing or any of their Related Persons. Further, failure of the 

 8
 

 

Company to observe any
corporate or other formalities or requirements relating to the exercise of its
powers or the management of its business or affairs under either this Agreement
or the Delaware Act shall not be grounds for the Managing Member, any Member,
general or limited partner of any Member, shareholder or member or other holder
of any equity interest of any Member, or any officer, director or employee of
any of the foregoing or any of their Related Persons to be held liable or
obligated for any debt, obligation or other liability of the Company.

(b)           Notwithstanding any other provision
of this Agreement to the contrary (including the provisions of Section 10.02(b) hereof)
(i) each Member’s liability under this Agreement is explicitly limited to
the assets of such Member, and (ii) neither the Company nor any Member
shall have any recourse against any assets of any Related Person of another
Member (unless such Related Person is itself a Member) or any past, present or
future officers, agents, shareholders, incorporators, directors, principals
(direct or indirect), affiliates, partners, members or representatives of
another Member (unless the same is itself a Member) or any of the assets or
property of any of the foregoing, for the payment or collection of any amount,
judgment, judicial process, arbitration award, fees or costs or for any other obligation
or claim arising out of or based upon this Agreement.

(c)           The provisions of this Section 3.02
shall survive the termination or expiration of this Agreement.

3.03.   Third-Party Debt Liability.   The
parties intend that no Member, or any of its Related Persons, shall have any
liability under or in connection with any third-party debt, including liability
with regard to any environmental matters, recourse carve-outs, fraud,
intentional misconduct, theft or other commonly called “bad-boy acts” or with
regard to any other matter, unless otherwise approved by all of the Members.

IV.           CAPITAL

4.01.   Records.   The Managing Member
shall be required to record in the books and records of the Company, from time
to time, as necessary, any Capital Contributions made in accordance with this Article IV
and any return of capital made in accordance with this Agreement.

4.02.   Capital Contributions.   The
Managing Member may in its sole and absolute discretion make Capital
Contributions to the Company from time to time.

4.03.   Capital Accounts.   A separate
Capital Account will be maintained for each Member in accordance with Treasury
Regulation Section 1.704-1(b)(2)(iv). Consistent therewith, the
Capital Account of each Member will be determined and adjusted as follows:

(a)           Each Member’s Capital Account will be
credited with:

(i)            Any contributions
of cash made by such Member to the capital of the Company and fair market value
of any property contributed by such Member to the capital of the Company (net
of any liabilities to which such property is subject or which are assumed by
the Company);

 

 9

(ii)           The Member’s
distributive share of Net Profit and items thereof; and

(iii)          Any other increases
required by Treasury Regulation Section 1.704-1(b)(2)(iv).

(b)           Each Member’s Capital Account will be
debited with:

(i)            Any distributions
of cash made from the Company to such Member (including all amounts paid or
distributed pursuant to the provisions of Section 6.03 hereof other than
distributions made pursuant to Section 6.03(b)(i)) plus the fair market
value of any property distributed in kind to such Member (net of any
liabilities to which such property is subject or which are assumed by such
Member);

(ii)           The Member’s
distributive share of Net Loss and items thereof; and

(iii)          Any other decreases
required by Treasury Regulation Section 1.704-1(b)(2)(iv).

The provisions of this Section 4.03 relating to the maintenance of
Capital Accounts have been included in this Agreement to comply with Section 704(b) of
the Code and the Treasury Regulations promulgated thereunder and will be
interpreted and applied in a manner consistent with those provisions. In the
event the Tax Matters Partner shall determine that it is prudent to modify the
manner in which the Capital Accounts or any debts or credits thereto
(including, without limitation, debits or credits relating to liabilities which
are secured by contributed or distributed property or which are assumed by the
Company or any Members) are computed in order to comply with such Regulations,
the Managing Member may make such modification, provided that it is not likely
to have a material effect on the amounts distributed to any Member pursuant to Section 6.04
hereof upon the dissolution of the Company.

4.04.        No
Further Capital Contributions. Except as expressly provided in this
Agreement or with the prior written consent of the Managing Member, no Member
shall be required or entitled to contribute any other or further capital to the
Company, nor shall any Member be required or entitled to loan any funds to the
Company (it being understood, however, that amounts properly incurred by a
Member which are reimbursable by the Company pursuant to and in accordance with
the terms of this Agreement shall not be deemed loans). No Member will have any
obligation to restore any negative or deficit balance in its Capital Account
upon liquidation or dissolution of the Company (and for purposes of this Section 4.04,
Capital Account shall be deemed to also include the capital account of any
Member for financial or book purposes or as set forth in the Delaware Act or
under common law). Notwithstanding any other provision of this Agreement to the
contrary, nothing contained herein will, or is intended or will be deemed to
benefit any creditor of the Company or any creditor of any Member, and no such
creditor shall have any rights, interests or claims hereunder, be entitled to
any benefits or be entitled to require the Company, the Managing Member or any
Member to demand, solicit or accept any loan, advance or additional Capital
Contribution for or to the Company or to enforce any rights which the Company
or any Member may have against any other Member or which any Member may have
against the Company, pursuant to this Agreement or otherwise.

 

 

4.05.        Book
Basis Adjustments. The Book Basis of all assets will be adjusted to equal
their respective fair market values, as agreed to by the Members, upon the
events set forth in Treasury Regulation § 1.704-1(b)(2)(iv)(f)(5).

V.            INTERESTS IN THE COMPANY

 

5.01.        Percentage
Interests. With regard to each Member separately, the Percentage Interest
and the Payout Percentages of each Member as of the date hereof shall be as set
forth in Section 1.01 hereof. The Percentage Interests and the Payout
Percentages of the Members may be adjusted only as set forth in this Agreement.

5.02.        Return
of Capital. No Member shall be liable for the return of the Capital
Contributions (or any portion thereof) of any other Member, it being expressly
understood and agreed that any such return shall be made solely from the assets
of the Company. No Member shall be entitled to withdraw or receive a return of
any part of its Capital Contributions or Capital Account, to receive interest
on its Capital Contributions or Capital Account or to receive any distributions
from the Company, except as expressly provided for in this Agreement or under
applicable law (and for purposes of this Section 5.02, Capital Account
shall be deemed to also include the Capital Account of any Member for financial
or book purposes or as set forth in the Delaware Act or under common law).

5.03.        Ownership.
All assets of the Company shall be owned by the Company, subject to the terms
and provisions of this Agreement.

5.04.        Waiver
of Partition; Nature of Interests in the Company. Except as otherwise
expressly provided for in this Agreement, each of the Members hereby
irrevocably waives any right or power that such Member might have:

(a)           To cause the Company or the assets of
the Company to be partitioned;

(b)           To cause the appointment of a
receiver for all or any portion of the assets of the Company;

(c)           To compel any sale of all or any
portion of the assets of the Company pursuant to any applicable law; or

(d)           To file a complaint or to institute
any proceeding at law or in equity, to cause the termination, dissolution or
liquidation of the Company.

Each of the Members has been induced to enter into this Agreement in
reliance upon the waivers set forth in this Section 5.04, and without such
waivers no Member would have entered into this Agreement. No Member shall have
any interest in any specific assets of the Company. The interests of all
Members in this Company are personal property.

VI.           ALLOCATIONS AND DISTRIBUTIONS

 

6.01.        Allocations.
After the application of Section 6.02, Net Profits and Net Losses for any
taxable year, or portion thereof, shall be allocated among the Members in a
manner such that 

 

the Capital Account of each Member, immediately after
making such allocation, and after taking into account actual distributions made
during such taxable year, or portion thereof, is, as nearly as possible, equal
(proportionately) to (i) the distributions that would be made to such
Member pursuant to Section 6.03 if the Company were dissolved, its affairs
wound up and its assets sold for cash equal to their Book Basis, all Company
liabilities, including the Company’s share of any liability of any entity
treated as a partnership for U.S. federal income tax purposes in which the
Company is a partner, were satisfied (limited with respect to each nonrecourse
liability to the Book Basis of the assets securing such liability) and the net
assets of the Company were distributed in accordance with Section 6.03 to
the Members immediately after making such allocation, minus (ii) such
Member’s share of Member Minimum Gain and Member Nonrecourse Debt Minimum Gain
determined pursuant to Treasury Regulations Sections 1.704-2(g)(1) and
1.704-2(i)(5), computed immediately prior to the hypothetical sale of
assets. Subject to the other provisions of this Article VI, an allocation
to a Member of a share of Net Profit or Net Loss shall be treated as an
allocation of the same share of each item of income, gain, loss or deduction
that is taken into account in computing Net Profit or Net Loss.

6.02.        Special
Allocations and Compliance with Section 704(b). The following special
allocations shall, except as otherwise expressly provided in this Agreement, be
made in the following order:

(a)           Minimum Gain Chargeback. If there is a net decrease in
Company Minimum Gain during a Fiscal Year, so that an allocation is required by
Treasury Regulations Section 1.704-2(f), each Member will be
allocated, before any other allocation under this Article VI, items of
income and gain for such Fiscal Year (and if necessary, subsequent years) in
proportion to and to the extent of an amount equal to such Member’s share of
the net decrease in Company Minimum Gain determined in accordance with Treasury
Regulations Section 1.704-2(g)(2). This Section 6.02(a) is
intended to comply with, and shall be interpreted consistently with, the “minimum
gain chargeback” provisions of Treasury Regulations Section 1.704-2(f).

(b)           Minimum Gain Attributable to
Member Nonrecourse Debt. If there is a net decrease in Member Nonrecourse
Debt Minimum Gain attributable to a Member Nonrecourse Debt during any Fiscal
Year, each Member who has a share of the Member Nonrecourse Debt Minimum Gain
attributable to such Member Nonrecourse Debt, determined in accordance with
Treasury Regulations 1.704-2(i)(5), shall be specially allocated items of
the Company’s income and gain for such year (and, if necessary, subsequent
years) in an amount equal to such Member’s share of the net decrease in Member
Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt,
determined in accordance with Treasury Regulations Section 1.704-2(i)(4).
Allocations pursuant to the previous sentence shall be made in proportion to
the respective amounts required to be allocated to each Member pursuant thereto.
The items to be so allocated shall be determined in accordance with Treasury
Regulations Section 1.704-2(i)(4). This Section 6.02(b) is
intended to comply with the “minimum gain chargeback” requirement of that Section of
the Regulations and shall be interpreted consistently therewith.

(c)           Qualified Income Offset. If
any Member unexpectedly receives any adjustments, allocation or distributions
described in clauses (4), (5) or (6) of Treasury Regulations Section 1.704-1(b)(2)(ii)(d),
items of the Company income shall be specially

 

allocated to such Member
in an amount and manner sufficient to eliminate the deficit balance in its
Adjusted Capital Account created by such adjustments, allocations or
distributions as quickly as possible; provided, however, that an
allocation pursuant to this Section 6.02(c) shall be made only if,
and to the extent that, such Member would have a an Adjusted Capital Account
Deficit after all other allocations provided for in Article VI tentatively
have been made as if this Section 6.02(c)  were not in this Agreement. This Section 6.02(c) is
intended to constitute a “qualified income offset” within the meaning of
Treasury Regulations Section 1.704-l(b)(2)(ii)(d)(3) and shall
be interpreted consistently therewith.

(d)           Nonrecourse Deductions; Member
Nonrecourse Deductions. Nonrecourse Deductions shall be allocated among the
Members in accordance with their Percentage Interests. Member Nonrecourse
Deductions shall be specially allocated to the Member who bears (or is deemed
to bear) the economic risk of loss with respect to the Member Nonrecourse Debt
to which such Member Nonrecourse Deductions are attributable in accordance with
Treasury Regulations Section 1.704-2(i)(2).

(e)           Limitation on Allocation of Losses.
To the extent that Net Losses or items of loss or deduction otherwise allocable
to a Member hereunder would cause such Member to have an Adjusted Capital
Account Deficit as of the end of the taxable year to which such Net Losses, or
items of loss or deduction, relate (after taking into account the allocation of
all items of income and gain for such taxable period), such Net Losses, or
items of loss or deduction, shall not be allocated to such Member and instead
shall be allocated to the Members in accordance with Section 6.01 as if
such Member were not a Member.

(f)            Regulatory Allocations. Any
allocations required to be made pursuant to Section 6.02(a) through Section 6.02(e) (the
“Regulatory Allocations”) (other than allocations, the effects of which
are likely to be offset in the future by other special allocations) shall be
taken into account, to the extent permitted by the Treasury Regulations, in
computing subsequent allocations of income, gain, loss or deduction pursuant to
Section 6.01 so that the net amount of any items so allocated and all
other items allocated to each Member shall, to the extent possible, be equal to
the amount that would have been allocated to each Member pursuant to Section 6.01
had such Regulatory Allocations under this Section 6.02 not occurred.

(g)           Liquidation. It is intended
that prior to a distribution of the proceeds from a liquidation of the Company,
the positive Capital Account balance of each Member shall be equal to the
amount that such Member is entitled to receive pursuant to Section 6.03. Accordingly,
notwithstanding anything to the contrary in this Article VI, to the extent
permissible under Sections 704(b) of the Code and the Treasury Regulations
promulgated thereunder, Net Profits and Net Losses and, if necessary, items of
gross income and gross deductions, of the Company for the year of liquidation
of the Company (or, if earlier, the year in which all or substantially all of
the Company’s assets are sold, transferred or disposed of) shall be allocated
among the Members so as to bring the positive Capital Account balance of each
Member as close as possible to the amount that such Member would receive if the
Company were liquidated and all the proceeds were distributed in accordance
with Section 6.03.

6.03.        Distributions.
From and after the date hereof, except as provided in Section 6.04, and
subject to Sections 6.05 and 6.09 hereof, the Company shall make distributions
or payments

 

of Net Cash Flow (to the extent and if available) to
the Members in the following manner and order of priority:

(a)           First, an amount of Net Cash Flow
shall be paid to the Managing Member until the Managing Member shall have
received payments of Net Cash Flow, pursuant to this Section 6.03(a), in
an aggregate amount (for the current period and all previous periods) equal to
the Managing Member Preferential Return; and

(b)           Thereafter, any remaining Net Cash
Flow shall be distributed to the Members in accordance with and in proportion
to their respective Payout Percentages, determined as of the moment each dollar
of such distribution is made.

6.04.        Distributions
in Liquidation. Upon the dissolution and winding-up of the Company,
the proceeds of sale and other assets of the Company distributable to the
Members under Section 11.02(c)(iii) shall be distributed, not later
than the latest time specified for such distributions pursuant to Treasury
Regulation Section 1.704-1(b)(2)(ii)(b)(2) to the Members in
accordance with Section 6.03. With the approval of the Managing Member, a
pro rata portion of the distributions that would otherwise be made to the
Members under the preceding sentence may be distributed to a trust established
(for the benefit of the Members) for the purposes of liquidating Company
assets, collecting amounts owed to the Company and paying any contingent or
unforeseen liabilities or obligations of the Company arising out of or in
connection with the Company. The assets of any trust established under this Section 6.04
will be distributed to the Members from time-to-time by the trustee of the
trust upon approval of the Managing Member in the same proportions as the
amount distributed to the trust by the Company would otherwise have been
distributed to the Members under this Agreement.

6.05.        Reinvestment
of Cash Flow. Notwithstanding the provisions of Section 6.03, at the
discretion of the Managing Member, the Company may retain Net Cash Flow of the
Company for any purpose.

6.06.        Tax
Matters. The Members intend for the Company to be treated as a partnership
under the Code. The Managing Member shall make all applicable elections,
determinations and other decisions under the Code, including, without
limitation, the deductibility of a particular item of expense and the positions
to be taken on the Company’s tax return, and shall approve the settlement or
compromise of all audit matters raised by the Internal Revenue Service
affecting the Members generally. The Members shall each take reporting
positions on their respective federal, state and local income tax returns
consistent with the positions determined for the Company by the Managing Member.
The Managing Member shall cause all federal, state and local income and other
tax returns to be timely filed by the Company.

6.07.        Tax
Matters Partner. The Managing Member shall be the tax matters partner
within the meaning of Section 6231(a)(7) of the Code (“Tax Matters
Partner”) and, subject to Section 6.06, shall exercise all rights,
obligations and duties of a tax matters partner under the Code. The Managing
Member, in its capacity as Tax Matters Partner, shall oversee the Company tax
affairs in the overall best interests of the Company and shall comply with the
requirements of Sections 6221 through 6232 of the Code and regulations
promulgated thereunder, and the Members further agree as follows:

 

(a)           The Tax Matters Partner shall have a
continuing obligation to provide the Internal Revenue Service with sufficient
information so that proper notice can be mailed to all Members as provided in Section 6223
of the Code.

(b)           The Tax Matters Partner shall keep
the Members informed of all administrative and/or judicial proceedings for the
adjustment of partnership items (as defined in Section 6231(a)(3) of
the Code and regulations promulgated thereunder).

(c)           The Tax Matters Partner may from time
to time request that a Member provide such documents and information necessary
for the Tax Matters Partner to perform its duties and obligations as Tax
Matters Partner. Each Member shall reasonably cooperate with any such request
by the Tax Matters Partner with respect to any such document or other
information that may be in such Member’s possession.

6.08.        Section 704(c).
In accordance with Section 704(c) of the Code and the applicable
Treasury Regulations thereunder, income, gain, loss, deduction and tax
depreciation with respect to any property contributed to the capital of the
Company, or with respect to any property which has a Book Basis different than
its adjusted tax basis, shall, solely for federal income tax purposes, be
allocated among the Members so as to take into account any variation between
the adjusted tax basis of such property to the Company and the Book Basis of
such property. The Company shall use the “traditional method” without curative
allocations.

6.09.        REIT
Compliance. The Members hereby acknowledge the status of Mack-Cali Realty
Corporation (“MCRC”) (an Affiliate of the Managing Member) as a REIT. Notwithstanding
any other provision of this Agreement to the contrary, neither Member will
require or cause the Company to take any action which may, in the opinion of
MCRC’s independent auditors or legal counsel, result in the loss of MCRC’s
status as a REIT. The Members further agree that, to the extent possible, the
Company shall be managed in a manner so that: 
(a) the Company’s gross income meets the tests provided in Section 856(c)(2) and
(3) of the Code as if the Company were a REIT; (b) the Company’s
assets meet the tests provided in Section 856(c)(4) of the Code as if
the Company were a REIT; and (c) the Company minimizes federal, state and
local income and excise taxes that may be incurred by MCRC, or any of their
Affiliates, including taxes under Section 857(b), 860(c) or 4981 of
the Code.  Furthermore, the Members shall
use reasonable efforts to structure the Company’s transactions to minimize any
prohibited transaction tax or other taxes applicable to any Member and MCRC. The
Members hereby further acknowledge, agree and accept that, pursuant to this Section 6.09,
the Company may be precluded from taking, or may be required to take, an action
which it would not have otherwise taken, even though the taking or the not
taking of such action might otherwise be advantageous to the Company and/or to
one or more of the Members (or one or more of their Affiliates).

VII.          MANAGEMENT

 

7.01.        Management.
(a) Except as otherwise expressly provided in this Agreement, the business
and affairs of the Company shall be controlled by the Managing Member. The Managing
Member shall have responsibility for supervising, directing and overseeing the
activities of the Company, establishing the policies and operating procedures
of the Company, 

 

managing the business and affairs of the Company and
making all decisions as to all matters which the Company has authority to
perform. All decisions made with respect to the management and control of the
Company and approved by the Managing Member shall be binding on the Company and
all Members.

(b)           Subject to the terms and limitations
of this Agreement and the limitations imposed by law, the Managing Member shall
have all of the same powers as a general partner of a general partnership under
the laws of the State of Delaware, including without limitation, the power and
authority to: (i) authorize other persons to execute and deliver such
documents on behalf of the Company as the Managing Member may deem necessary or
desirable for the Company’s business; (ii) perform, or cause to be
performed, all of the Company’s obligations under any agreement to which the
Company is a party; (iii) enter into contracts on behalf of the Company
and make expenditures as are required to operate and manage the Company; and (iv) do
any act which is necessary or desirable to carry out any of the purposes of the
Company.

(c)           The Managing Member may, on behalf of
the Company, employ, engage or retain any Persons (including any Related
Persons of any Member) to act in such capacities as the Managing Member may
determine are necessary or desirable in connection with the Company’s business.

(d)           No Member, other than the Managing
Member, shall have any right or power to participate in or have any control
over the Company’s business, affairs or operations or to act for or to bind the
Company in any matter whatsoever and no Member other than the Managing Member
shall be required or permitted to consent to, acquiesce in, vote on or approve
any action or act taken or decision made by the Managing Member, except as
otherwise expressly provided in this Agreement or as expressly provided in the
Delaware Act.

7.02.        Meetings of the Members.

 

(a)           The Members shall meet at such times
as may be requested by the Managing Member to review the affairs of the Company
or for such other reason as may be determined by the Managing Member, but not
less than once per year. The place of such meetings shall be at the offices of
the Company unless otherwise agreed to by all of the Members.

(b)           Any action required to be taken at a
meeting of the Members or any other action which may be taken at a meeting of
the Members may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by all of the Members unless
otherwise provided by the Delaware Act. Any such consent signed by the Members
as indicated above in the immediately preceding sentence shall be a valid and
proper act of the Members.

(c)           The Members may participate in and
act at meetings of the Members through the use of a conference telephone or
other communications equipment or system by means of which all persons
participating in the meeting can hear each other (“Electronic Participation”).
Participation in such meeting shall constitute attendance in person at the
meeting of the person or persons so participating.

 

(d)           Notice
of any meeting of the Members shall be given no fewer than five (5) Business
Days and no more than twenty (20) Business Days prior to the date of the
meeting (unless such notice is waived in writing). Notice of any meeting of the
Members shall specify the date, time and place of the proposed meeting and the
agenda for the meeting. Notice shall be delivered in the manner set forth in Section 12.03
hereof. The attendance (whether in person or by Electronic Participation) of a
Member at a meeting of the Members (as reflected in the minutes of the meeting)
shall constitute a waiver of notice of such meeting, except where a Member
attends a meeting for the express purpose of objecting to the transaction of
any business because the meeting is not properly called or convened.

(e)           A written record of all meetings of
the Members and all decisions made by the Members shall be made by the Managing
Member, as Secretary, or such other Person as may be appointed by the Managing
Member, and kept in the records of the Company.

7.03.        Remuneration
for Managing Member. Except as otherwise agreed to by all of the Members,
the Managing Member shall not be entitled to receive any salary or other
remuneration or expense reimbursement from the Company for its services as
Managing Member.

7.04.        Duties and Conflicts.

 

(a)           The Managing Member shall devote such
time to the business of the Company as it deems to be necessary or desirable in
connection with its duties and responsibilities hereunder. Except as otherwise
expressly provided in this Agreement or as otherwise approved by the Managing
Member, no Member nor any member, partner, shareholder, officer, director,
employee, agent or representative of any Member shall receive any salary or
other remuneration for its services rendered pursuant to this Agreement.

(b)           Each of the Members recognizes that
the other Member and its members, partners, shareholders, officers, directors,
employees, agents, representatives and Related Persons, has or may in the
future have other business interests, activities and investments, some of which
may be in conflict or competition with the business of the Company, and that
the other Member and its members, partners, shareholders, officers, directors,
employees, agents, representatives and Related Persons, are entitled to carry
on such other business interests, activities and investments. Nothing contained
in this Agreement shall preclude any of the Members from engaging in or
possessing an interest in other business ventures of any nature and
description, independently or with others, including, but not limited to, the
ownership, financing, acquiring, leasing, promoting, improving, operation,
management, syndication, brokerage and/or development of real property,
including, but not limited to, property in the State of New Jersey, on its own
behalf or on behalf of other entities with which any of the Members is
affiliated or otherwise, and nothing contained in this Agreement shall preclude
any of the Members from engaging in any such activities, whether or not
competitive with the Company, without any obligation to offer any interest in
such activities to the Company or to the other Member. Neither the Company nor
the other Member shall have any right, by virtue of this Agreement in or to
such activities, or the income or profits derived therefrom, and the pursuit of
such activities, even if competitive with the business of the Company, shall
not be deemed wrongful or improper.

 

7.05.        Company
Expenses. Except as otherwise expressly provided in this Agreement, and
except for any costs to be borne by any third party under any agreement with
the Company, the Company shall be responsible for paying, and shall pay, all
direct costs and expenses related to the business of the Company. In the event
any such costs and expenses are or have been paid by any Member, such Member
shall be entitled to be reimbursed for such payment so long as such payment is
reasonably necessary for Company business or operations and has been approved
by the Managing Member. Notwithstanding the foregoing, in no event shall the
Company have any obligation to pay or reimburse any Member for (a) any
direct or indirect general overhead expense of such Member, (b) the costs
and expenses, including legal costs, relating to any employees, staff or other
personnel necessary to conduct the day-to-day operations of the Company or to
provide the financial reporting of the Company (other than those required by
the express terms of this Agreement, or any other agreement, to be provided by
third parties, including year-end audited financial statements and tax returns
and reports prepared by third parties), or (c) any travel expenses, unless
in each such case the same have been approved by the Managing Member.

VIII.        BOOKS AND RECORDS

 

8.01.        Books
and Records. The Managing Member shall maintain, or cause to be maintained,
at the expense of the Company, in a manner customary and consistent with good
accounting principles, practices and procedures, a comprehensive system of
office records, books and accounts (which records, books and accounts shall be
and remain the property of the Company) in which shall be entered fully and
accurately each and every financial transaction with respect to the operations
of the Company. Bills, receipts and vouchers shall be maintained on file by the
Managing Member. The Managing Member shall maintain said books and accounts in
a safe manner and separate from any records not having to do directly with the
Company. The Managing Member shall cause audits to be performed and audited
statements and income tax returns to be prepared as required by Section 8.03
hereof. Such books and records of account shall be prepared and maintained by
the Managing Member at the principal place of business of the Company or such
other place or places as may from time-to-time be determined by the Managing
Member.

8.02.        Accounting
and Fiscal Year. The books of the Company shall be kept on the accrual
basis in accordance with United States generally accepted accounting principles
(“GAAP”), and the Company shall report its operations for tax purposes
on the accrual method. The taxable year of the Company shall end on December 31
of each year, unless a different taxable year shall be required by the Code.

8.03.        Reports.

 

(a)           The Managing Member shall prepare or
cause to be prepared at the Company’s expense the financial reports and other
information that the Managing Member may determine are appropriate. Promptly
after the end of each fiscal year and at the expense of the Company, the
Managing Member will cause the Company Accountant to prepare and deliver to
each Member a report setting forth in sufficient detail all such information
and data with respect to business transactions effected by or involving the
Company during such fiscal year as will enable the Company and each Member to
timely prepare its federal, state and local income tax

 

returns in accordance
with the laws, rules and regulations then prevailing. The Managing Member
will also cause the Company Accountant to prepare federal, state and local tax
returns required of the Company, submit those returns to the Managing Member
for its approval as early as practicable but in no event later than ninety (90)
calendar days following the end of the preceding fiscal year and will file or
cause to be filed the tax returns after they have been approved by the Managing
Member. The Managing Member shall prepare and distribute or cause to be
prepared and distributed the reports and statements described in this Section 8.03.

(b)           All decisions as to accounting
principles shall be made by the Managing Member, subject to the provisions of
this Agreement.

8.04.        The
Company Accountant. The Company shall retain as the regular accountant and
auditor for the Company (the “Company Accountant”) a nationally-recognized
accounting firm or any other accounting firm approved and designated by the
Managing Member. The fees and expenses of the Company Accountant shall be a
Company expense. The Company Accountant shall be Price Waterhouse Coopers,
until such time as the Managing Member shall elect to change such Company
Accountant.

8.05.        Reserves.
The Managing Member may, in its discretion, subject to such conditions as it
shall determine, establish cash reserves for the purposes and requirements as
it may deem appropriate (the “Reserve Accounts”). Such Reserve Accounts
will be increased by any deposits thereto from time-to-time of amounts of the
revenues of the Company from operations, the net proceeds from capital
transactions, and contributions and other sources, before any distributions of
such amounts to the Members, as determined reasonably necessary by the Managing
Member. Once established, such Reserve Accounts may be charged by the Managing
Member with any expenditure for the operation of the Company, whether such
items are treated as current expense deductions or as capital expenditures
under GAAP.

IX.           TRANSFER OF INTERESTS

 

9.01.        No Transfer.

 

(a)           Except as expressly permitted or
contemplated by this Agreement, no Member may, directly or indirectly, sell,
assign, give, hypothecate, pledge, encumber or otherwise transfer (“Transfer”)
all or any portion of its Interest without the prior written consent of the
Managing Member (which may be withheld or granted in the sole discretion of the
Managing Member).

(b)           Any Transfer in contravention of this
Article IX shall be null and void. No Member, without the prior written
consent of the Managing Member, may resign from the Company, except as a result
of such Member’s involuntary dissolution or final adjudication as bankrupt or
in connection with a permitted Transfer.

9.02.        Permitted Transfers. 

 

(a)           Subject to the provisions of Section 9.06
hereof, the Managing Member may, from time-to-time and in its sole discretion,
without the consent of the Managing Member, transfer some or all of its
Interest to any Purchaser, without the prior written consent of the

 

Managing Member, provided
such transferee agrees to be bound by all of the terms, conditions and
provisions of this Agreement (including the provisions of this Article IX).

(b)           Subject
to the provisions of Section 9.06 hereof, Gale may, from time-to-time and
in its sole discretion, without the consent of the Managing Member, transfer
all of his Interest to any Person which is wholly owned by Gale, provided such
transferee agrees to be bound by all of the terms, conditions and provisions of
this Agreement (including the provisions of this Article IX), and such
transferee shall remain wholly owned by Gale.

9.03.        Transferees.
No transferee of all or any portion of any Interest shall be admitted as a
substitute Member unless (a) such Interest is transferred in compliance
with the applicable provisions of this Agreement and (b) such transferee
shall have executed and delivered to the Company such instruments as the
Managing Member reasonably deem necessary or desirable to effectuate the
admission of such transferee as a Member and to confirm the agreement of such
transferee to be bound by all the terms, conditions and provisions of this
Agreement with respect to such Interest. At the request of the Managing Member,
each such transferee shall also cause to be delivered to the Company at the
transferee’s sole cost and expense, a favorable opinion of legal counsel
reasonably acceptable to the Managing Member, to the effect that (i) such
transferee has the legal right, power and capacity to own the Interest proposed
to be Transferred, (ii) such Transfer does not violate any provision of
any loan commitment or agreement or any mortgage, deed of trust or other
security instrument encumbering all or any portion of any asset of the Company,
and (iii) such Transfer does not violate any federal or state security
laws and will not cause the Company to become subject to the Investment Company
Act of 1940, as amended. As promptly as practicable after the admission of any
Person as a Member, the books and records of the Company shall be changed to
reflect such admission. All reasonable costs and expenses incurred by the
Company in connection with any Transfer of any Interest and, if applicable, the
admission of any transferee as a Member shall be paid by such transferee.

9.04.        Admission of Additional Members.

 

(a)           No person may be admitted as an
additional Member of the Company (in contrast with admission as a substitute
Member in connection with a permitted Transfer) without the consent of the
Managing Member (which may be withheld or granted in the sole discretion of the
Managing Member).

(b)           Any additional or substitute Member
admitted to the Company shall execute and deliver documentation in form
satisfactory to the Managing Member accepting and agreeing to be bound by this
Agreement, and such other documentation as the Managing Member shall reasonably
require in order to effect such Person’s admission as an additional Member. The
admission of any Person as an additional Member shall become effective on the
date upon which the name of such person is recorded on the books and records of
the Company following the consent of all of the Members to such admission.

9.05.        Drag-Along Rights.

 

(a)           Subject
to the other provisions of this Article IX, if the Managing Member
proposes to sell, exchange or otherwise dispose of (a “Sale”) all of its
Interest in the Company

for cash, Cash
Equivalents or Readily Marketable Securities or any combination thereof to any
Purchaser, the Managing Member may, in its discretion, elect to require Gale to
sell, exchange or otherwise dispose of all of Gale’s Interest in the Company
pursuant to such Sale for the same proportionate consideration and otherwise on
the same terms and conditions upon which the Managing Member proposes to sell,
exchange or otherwise dispose of its Interest (the “Drag-Along Rights”).
The net consideration received in connection with such sale (which shall be the
consideration received in connection with such sale minus an amount
equal to (x) the Managing Member Preferential Return of 10% per annum,
compounded quarterly, on the Managing Member’s Capital Contributions plus the
Purchase Amount reduced by (y) the aggregate distributions to the Managing
Member pursuant to Section 6.03(a) of this Agreement (such amount,
the “CLI Shortfall”) shall be allocated between the Managing Member and
Gale on the basis and in proportion to each Member’s Payout Percentages. The
CLI Shortfall shall be retained by the Managing Member as additional
consideration for the sale of its Interest.

(b)           Not less than thirty (30) days prior
to the consummation of such Sale (the “Drag-Along Response Period”), the
Managing Member shall provide Gale with written notice of its election to
exercise its Drag-Along Rights, which notice shall include the name of the
Purchaser, and the aggregate consideration to be received by Gale for its
Interest and a copy of all Sale documents (which documents shall be on terms
that are identical to the terms of the Managing Member’s Transfer, except that
Gale shall not be required to make any representations, warranties, covenants
or agreements other than its authority to sign such documents, its title to its
Interests being sold and its obligation to Transfer its Interests). Gale must
execute and deliver to the Managing Member the documents previously furnished
to Gale for execution in connection with the Sale within the Drag-Along
Response Period. Gale does hereby irrevocably constitute and appoint the
Managing Member with full power of substitution, the true and lawful
attorney-in-fact and agent of Gale, to execute and deliver in Gale’s name,
place and stead, all instruments, documents and certificates previously
furnished to Gale for execution in connection with the Sale, provided, (i) Gale
has not otherwise executed such documents within twenty-five (25) days
following Gale’s receipt of the Managing Member’s written notice of its
election to exercise its Drag-Along Rights, and (ii) such documents are in
conformity, in all respects, with the provisions of this Section 9.05.

(c)           In connection with any such Sale
pursuant to which Gale shall be required to participate in accordance with the
Drag-Along Rights as set forth above, the Managing Member shall, promptly after
consummation of such Sale, notify Gale to that effect, and shall promptly (and
in any event within fifteen (15) Business Days following the consummation of
such Sale) cause to be remitted to Gale the proceeds attributable to the sale
of Gale’s Interest.

(d)           Notwithstanding anything in this Section 9.05 to
the contrary, there shall be no liability on the part of Gale to the Managing
Member if any sale of Interest pursuant to this Section 9.05 is not
consummated for whatever reason other than a failure to comply with the
foregoing provisions. It is understood that the Managing Member , in its sole
discretion, shall determine whether to effect a Sale to any third party
pursuant to this Section 9.05.

 

 

9.06.        Override on Permitted Transfers.

 

(a)           It
is expressly understood and agreed that any Transfer permitted pursuant to this
Article IX shall in all instances be prohibited (and, if consummated,
shall be void ab initio) if such Transfer does not comply with all applicable
laws, rules and regulations and other requirements of governmental
authorities, including, without limitation, Executive Order 13224 (September 23,
2001), the rules and regulations of the Office of Foreign Assets Control,
Department of Treasury, and any enabling legislation or other Executive Orders
in respect thereof.

(b)           Each
admitted Member shall be required to make the representations and warranties
set forth in Section 12.01(a) of this Agreement to the other Member(s) and
the Company as of the date of such Member’s admission into the Company. Each
Member shall be deemed to make the representations and warranties set forth in Section 12.01(a)(ix)-(xii)
of this Agreement to the Members and the Company on behalf of any Person that
acquires a beneficial ownership interest in such Member as of the date of such
acquisition.

(c)           Notwithstanding
anything to the contrary contained in this Agreement, no Transfer of all or any
part of any Interest shall be made except in compliance with all applicable
securities laws.

X.            EXCULPATION AND INDEMNIFICATION

 

10.01.      Exculpation.
Notwithstanding any contrary provision of the Delaware Act, no Member (and no
general or limited partner of any Member, shareholder, member or other holder
of an equity interest in such Member or officer, director or employee of any of
the foregoing or any of their Affiliates) shall be liable to the Company or to
any other Member for monetary damages for any losses, claims, damages or liabilities
arising from any act or omission performed or omitted by it arising out of or
in connection with this Agreement or the Company’s business or affairs;
provided, however, such act or omission was taken in good faith, was reasonably
believed to be in the best interests of the Company and was within the scope of
authority granted to such Person and was not attributable in whole or in part
to (a) a breach of this Agreement which has a material adverse effect upon
the value of, or causes material damage to, the Company, (b) a knowing
violation of law which has a material adverse effect upon the value of, or
causes material damage to, the Company, (c) a transaction for which such
Member received a personal benefit in violation or breach of the provisions of
this Agreement, or (d) such Member’s or Person’s fraud, bad faith, willful
misconduct or gross negligence.

10.02.      Indemnification.

 

(a)           The Company shall, to the fullest
extent permitted by applicable law, indemnify, defend and hold harmless each
Member, and each general or limited partner of any Member, each shareholder,
member or other holder of any equity interest in such Member or any officer,
director or employee of any of the foregoing (each an “Indemnified Party”),
against any losses, claims, damages or liabilities to which such Indemnified
Party may become subject in connection with any matter arising out of or
incidental to any act performed or omitted to be performed by any such
Indemnified Party in connection with this Agreement or the Company’s

 

business or affairs,
including any action or omission constituting a breach of any fiduciary duties;
provided, however, that such act or omission (i) was taken
in good faith, was reasonably believed by the applicable Indemnified Party to
be in the best interest of the Company and was within the scope of authority
granted to such Member or applicable Indemnified Party, (ii) was not a
transaction for which the Indemnified Party received a personal benefit in
violation or breach of the provisions of this Agreement, (iii) was not
attributable in whole or in part to such Indemnified Party’s breach of this
Agreement or a knowing violation of law, in either case which has a material
adverse effect upon the value of, or causes material damage to, the Company, or
(iv) in the case of a Member or related Indemnified Party, was not
attributable in whole or in part to such Indemnified Party’s fraud, bad faith,
willful misconduct or gross negligence. If an Indemnified Party becomes
involved in any capacity in any action, proceeding or investigation in
connection with any matter arising out of or in connection with this Agreement
or the Company’s business or affairs, the Company shall reimburse such
Indemnified Party for its reasonable legal and other reasonable out-of-pocket
expenses (including the cost of any investigation and defense preparation) as
they are incurred in connection therewith, provided that such Indemnified Party
shall promptly repay to the Company the amount of any such reimbursed expenses
paid to it if it shall ultimately be determined that such Indemnified Party was
not entitled to be indemnified by the Company in connection with such action,
proceeding or investigation. If for any reason (other than the fraud or gross
negligence, intentional misconduct, breach of this Agreement or a knowing
violation of law by such Indemnified Party or a transaction for which such
Indemnified Party received a personal benefit in violation or breach of the
provisions of this Agreement) the foregoing indemnification is unavailable to
such Indemnified Party, or insufficient to hold it harmless, then the Company
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such loss, claim, damage, liability or expense in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and such Indemnified Party on the other hand or, if such allocation is
not permitted by applicable law, to reflect not only the relative benefits
referred to above but also any other relevant equitable considerations. Any
indemnity under this Section 10.02(a) shall be paid solely out of and
to the extent of Company assets and shall not be a personal obligation of any
Member and in no event will any Member be required or permitted, without the
consent of the other Members, to contribute additional capital under Article IV
to enable the Company to satisfy any obligation under this Section 10.02.

(b)           Notwithstanding the provisions of Section 3.02(a) hereof,
each Member shall indemnify and hold harmless the Company and the other Member
from and against any and all claims, demands, liabilities, costs, damages,
expenses and causes of action of any nature whatsoever arising out of or
incidental to (i) any act performed by or on behalf of any such Member
(including acts performed as the Managing Member) which is not performed in
good faith or is not reasonably believed by such Member to be in the best
interests of the Company and within the scope of authority conferred upon such
Member under this Agreement, (ii) the fraud, bad faith, intentional or
willful misconduct or gross negligence of such Member, (iii) a breach of
this Agreement or a knowing violation of law by such Member, in either case
which has a material adverse effect upon the value of, or causes material
damage to, the Company or its assets or (iv) any transaction for which
such Member received a personal benefit in violation or breach of the
provisions of this Agreement.

 

(c)           The
provisions of this Section 10.02 shall survive for a period of four (4) years
from the date of dissolution of the Company, provided that if at the end of
such period there are any actions, proceedings or investigations then pending,
an Indemnified Party may so notify the Company and the Members at such time
(which notice shall include a brief description of each such action, proceeding
or investigation and the liabilities asserted therein) and the provisions of
this Section 10.02 shall survive with respect to each such action,
proceeding or investigation set forth in such notice (or any related action,
proceeding or investigation based upon the same or similar claim) until such
date that such action, proceeding or investigation is finally resolved, and the
obligations of the Company under this Section 10.02 shall be satisfied
solely out of Company assets.

(d)           Notwithstanding any other provision
of this Agreement to the contrary, the obligations of the Company or any Member
under this Section 10.02 shall be in addition to any liability which the
Company or such Member may otherwise have and inure to the benefit of such
Member, its Related Persons and their respective members, directors, officers,
employees, agents and Affiliates and any successors, assigns, heirs and
personal representatives of such Persons.

XI.           DISSOLUTION AND TERMINATION

 

11.01       Dissolution. The Company shall be
dissolved and its business wound up upon the earliest to occur of any of the
following events:

(a)           The sale or other disposition of all
the assets of the Company and the receipt of all consideration therefor;

(b)           The determination of the Managing
Member to dissolve the Company in its sole and complete discretion; or

(c)           The resignation, expulsion,
bankruptcy or dissolution of any Member or the occurrence of any other event
that terminates the continued membership of any Member in the Company, unless,
within ninety (90) calendar days after such event, the Managing Member elects
in writing (i) to continue the business of the Company, and (ii) if
any such time there exists only one (1) remaining Member, effective as of
the date of such event, to admit at least one (1) additional Member to the
Company and (iii) if applicable, to appoint a new Managing Member.

Without limiting, but subject to, the other provisions hereof, the
assignment of all or any part of a Member’s Interest permitted hereunder will
not result in the dissolution of the Company. Except as otherwise expressly
provided in this Agreement, each Member agrees that, without the consent of the
Managing Member, no Member may withdraw from or cause a voluntary dissolution
of the Company. In the event any Member withdraws from or causes a voluntary
dissolution of the Company in contravention of this Agreement, such withdrawal
or the causing of a voluntary dissolution shall not affect such Member’s
liability for obligations of the Company.

 

11.02.      Termination. In all cases of
dissolution of the Company, the business of the Company shall be wound up and
the Company terminated as promptly as practicable thereafter, and each of the
following shall be accomplished:

(a)           The Liquidating Member shall cause to
be prepared a statement setting forth the assets and liabilities of the Company
as of the date of dissolution, a copy of which statement shall be furnished to
all of the Members.

(b)           The interests and all other assets of
the Company shall be liquidated by the Liquidating Member as promptly as
possible, but in an orderly and businesslike and commercially reasonable manner
and to the extent applicable, subject to the provisions of a liquidating plan
approved by the Managing Member. The Liquidating Member may distribute the
assets of the Company in kind only with the consent of the all the Members.

(c)           The proceeds of sale and all other
assets of the Company shall be applied and distributed as follows and in the
following order of priority:

(i)            To the payment of (A) the
debts and liabilities of the Company and (B) the expenses of liquidation.

(ii)           To the setting up
of any reserves which the Liquidating Member and the Managing Member shall
determine to be reasonably necessary for contingent, unliquidated or unforeseen
liabilities or obligations of the Company or any Member arising out of or in
connection with the Company. Such reserves may, in the discretion of the
Liquidating Member, be paid over to a national bank or national title company
selected by it and authorized to conduct business as an escrowee to be held by
such bank or title company as escrowee for the purposes of disbursing such
reserves to satisfy the liabilities and obligations described above, and at the
expiration of such period as the Liquidating Member may reasonably deem
advisable, distributing any remaining balance as provided in Section 12.02(c)(iii) hereof;
provided, however, that, to the extent that it shall have been
necessary, by reason of applicable law or regulation, to create any reserves
prior to any and all distributions which would otherwise have been made under Section 11.02(c)(i) above
and, by reason thereof, a distribution under Section 11.02(c)(i) has
not been made, then any balance remaining shall first be distributed pursuant
to Section 11.02(c)(i) above.

(iii)          The balance, if
any, to the Members in accordance with Section 6.04 hereof.

11.03       Liquidating
Member. The Liquidating Member is hereby irrevocably appointed as the true
and lawful attorney in the name, place and stead of each of the Members, such
appointment being coupled with an interest, to make, execute, sign, acknowledge
and file with respect to the Company all papers which shall be necessary or
desirable to effect the dissolution and termination of the Company in
accordance with the provisions of this Article XI. Notwithstanding the
foregoing, each Member, upon the request of the Liquidating Member, shall
promptly execute, acknowledge and deliver all such documents, certificates and
other instruments as the Liquidating Member shall reasonably request to
effectuate the proper 

 

dissolution and termination of the Company, including
the winding up of the business of the Company.

XII.         MISCELLANEOUS

 

12.01.      Covenants, Representations and
Warranties of the Members.

 

(a)           Each Member represents and warrants
to the other Member as follows:

(i)            It is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of formation with all requisite power and authority to enter into
this Agreement and to conduct the business of the Company.

(ii)           This Agreement
constitutes the legal, valid and binding obligation of the Member enforceable
in accordance with its terms, subject to the application of principles of
equity and laws governing insolvency and creditors’ rights generally.

(iii)          No consents or
approvals (which have not been obtained) are required from any governmental
authority for the Member to enter into this Agreement and be admitted to the Company.
All limited liability company, corporate or partnership action on the part of
the Member (and its direct or indirect equity owners) necessary for the
authorization, execution and delivery of this Agreement, and the consummation
of the transactions contemplated hereby, have been duly taken.

(iv)          The execution and
delivery of this Agreement by the Member, and the consummation of the
transactions contemplated hereby, do not conflict with or contravene the
provisions of such Member’s organic documents or any agreement or instrument by
which it or its properties are bound or any law, rule, regulation, order or
decree to which it or its properties are subject.

(v)           The Member has not
retained any broker, finder or other commission or fee agent, and no such
person has acted on its behalf in connection with the acquisition and
assumption of its Interest in the Company or the execution and delivery of this
Agreement.

(vi)          Each Member is
acquiring its Interest in the Company for investment, solely for its own account,
with the intention of holding such Interest for investment and not with a view
to, or for resale in connection with, any distribution or public offering or
resale of any portion of such interest within the meaning of the Securities Act
of 1933 as amended from time to time (the “Securities Act”) or any other
applicable federal or state securities law, rule or regulation (“Securities
Laws”).

(vii)         Each Member
acknowledges that it is aware that its interest in the Company has not been
registered under the Securities Act or under any Securities Laws, or other
Federal or state securities law in reliance upon exemptions contained therein. Each
Member understands and acknowledges that its representations and warranties
contained herein are being relied upon by the Company, the other Member and the
constituent owners of such other Member as the basis for exemption of the
issuance of

 

interest in the
Company from registration requirements of the Securities Act and other
Securities Laws. Each Member acknowledges that the Company will not and has no
obligation to register any Interest in the Company under the Securities Act or
other Securities Laws.

(viii)        Each Member
acknowledges that prior to its execution of this Agreement, it received a copy
of this Agreement and that it examined this document or caused this document to
be examined by its representative or attorney. Each Member does hereby further
acknowledge that it or its representative or attorney is familiar with this
Agreement, and with the business and affairs of the Company, and that except as
otherwise expressly provided in this Agreement, it does not desire any further
information or data relating to the Company or the other Member. Each Member
does hereby acknowledge that it understands that the acquisition of its
Interest in the Company is a speculative investment involving a high degree of
risk and does hereby represent that it has a net worth sufficient to bear the
economic risk of its investment in the Company and to justify its investing in
a highly speculative venture of this type.

(ix)           The Member is in
compliance with Executive Order 13224 (September 23, 2001), the rules and
regulations of the Office of Foreign Assets Control, Department of Treasury,
and any enabling legislation or other Executive Orders in respect thereof.

(x)            At all times,
including after giving effect to any Transfers permitted pursuant to this
Agreement, (a) none of the funds or other assets of the Member constitutes
property of, or are beneficially owned, directly or indirectly, by any Person,
entity or government subject to trade restrictions under U.S. law (including,
but not limited to, the International Emergency Economic Powers Act, 50 U.S.C.
§§ 1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and
any Executive Orders or regulations promulgated thereunder) (any such Person,
entity or government, an “Embargoed Person”) with the result that the
investment in the Member (whether directly or indirectly), is prohibited by any
applicable law, rule, regulation, order or decree is in violation thereof; (b) no
Embargoed Person has any interest of any nature whatsoever in the Member with
the result that the investment in the Member (whether directly or indirectly),
is prohibited by any applicable law, rule, regulation, order or decree is in
violation thereof; and (c) none of the funds of the Member have been
derived from any unlawful activity with the result that the investment in the
Member (whether directly or indirectly), is prohibited by any applicable law, rule,
regulation, order or decree is in violation thereof.

(xi)           If applicable to
such Member, the Member has implemented a corporate anti-money laundering plan
that is reasonably designed to ensure compliance with applicable foreign and
U.S. anti-money laundering law.

(xii)          The Member is
familiar with the U.S. Government Blacklists maintained by applicable U.S.
Federal agencies and none of its investors, officers or directors are on the
U.S. Government Blacklists.

 

(b)           Subject to the
provisions of Section 3.02(b) hereof, each Member agrees to indemnify
and hold harmless the Company and the other Member and their officers,
directors, shareholders, partners, members, employees, successors and assigns
from and against any and all loss, damage, liability or expense (including
reasonable costs and reasonable attorneys fees) which they may incur by reason
of, or in connection with, any material breach of the foregoing representations
and warranties by such Member and all such representations and warranties shall
survive the execution and delivery of this Agreement and the termination and
dissolution of either of the Members and/or the Company.

12.02.      Further
Assurances. Each Member agrees to execute, acknowledge, deliver, file,
record and publish such further instruments and documents, and do all such
other acts and things as may be required by law, or as may be required to carry
out the intent and purposes of this Agreement.

12.03.      Notices.
All notices of default, demands, requests for or grants of consents or approvals,
which any of the parties to this Agreement may desire or be required to give
hereunder (collectively, “Material Notices”) shall be in writing and
shall be given by (a) personal delivery, (b) facsimile transmission
with proof of receipt and provided such notice is also delivered by method (a) or
(c) or (c) a nationally recognized overnight courier service, fees
prepaid, addressed as follows:

	
  If to the Managing Member,
  to:

  	
  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: 

  Mitchell E. Hersh

  Telecopy: (908) 272-0214

  Telephone: (908) 272-2009

  And

  Roger W. Thomas, Esq. 

  Telecopy: (908) 497-0485

  Telephone: (908) 272-2612

  
	
   

  	
   

  
	
  With a copy (which
  shall not

  constitute notice) to:

  	
  Seyfarth Shaw LLP

  1270 Avenue of the Americas

  25th Floor

  New York, New York 10020

  Telecopy: (212) 218-5527

  Telephone: (212) 218-5620

  Attention: John P. Napoli, Esq.

  

 

 

 

	
  If to Gale, to:

  	
  c/o Gale International, L.L.C.

  100 Campus Drive, Suite 200

  Florham Park, New Jersey 07932

  Telecopy: (973) 245-3600

  Telephone: (973) 301-9500

  Attention: Mr. Stanley C. Gale

  
	
   

  	
   

  
	
  With a copy (which
  shall not

  constitute notice) to:

  	
  Greenberg Traurig, LLP

  200 Park Avenue

  New York, New York 10166

  Attn: Robert J. Ivanhoe, Esq. 

  Telephone: 212-801-9200

  Facsimile No.: 212-801-6400

  

 

Any Member may designate another addressee (and/or change its address)
for Material Notices hereunder by a notice given pursuant to this Section 12.03.
A Notice sent in compliance with the provisions of this Section 12.03
shall be deemed given on the date of receipt if delivered by method (a) or
(b) and on the next Business Day after deposit with the courier if
delivered by method (c). Other than with regard to Material Notices,
communications under this Agreement shall be delivered and exchanged among the
Members in such mutually acceptable form as shall be conducive to the use and
implementation of the materials in question (e.g.,
by electronic mail or telecopier with regard to the exchange of periodic
financial information). Any mutually acceptable method of communication must
provide for confirmation of delivery or refusal thereof.

12.04.      Governing
Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware applicable to agreements made and to be
performed wholly within that state.

12.05.      Captions.
All titles or captions contained in this Agreement are inserted only as a
matter of convenience and for reference and in no way define, limit, extend, or
describe the scope of this Agreement or the intent of any provision in this
Agreement.

12.06.      Pronouns.
All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, and neuter, singular and plural, as the identity of the
party or parties may require.

12.07.      Successors
and Assigns. This Agreement shall be binding upon the parties hereto and
their respective executors, administrators, legal representatives, heirs,
successors and permitted assigns, and shall inure to the benefit of the parties
hereto and, except as otherwise expressly provided herein, their respective
executors, administrators, legal representatives, heirs, successors and
permitted assigns.

12.08.      Extension
Not a Waiver. No delay or omission in the exercise of any power, remedy or
right herein provided or otherwise available to a Member or the Company shall
impair or affect the right of such Member or the Company thereafter to exercise
the same. Any extension of time or other indulgence granted to a Member
hereunder shall not otherwise alter or

 

affect any power, remedy or right of any other Member
or of the Company, or the obligations of the Member to whom such extension or
indulgence is granted.

12.09.      Creditors
Not Benefited. Nothing contained in this Agreement is intended or shall be
deemed to benefit any creditor of the Company or any Member, and no creditor of
the Company or any Member shall be entitled to require the Company to solicit
or the Members to make any Capital Contribution to the Company or to enforce
any right which the Company or any Member may have against any Member under
this Agreement or otherwise.

12.10.      Recalculation
of Interest. If any applicable law is ever judicially interpreted so as to
deem any distribution, contribution, payment or other amount received by any
Member or the Company under this Agreement as interest and so as to render any
such amount in excess of the maximum rate or amount of interest permitted by
applicable law, then it is the express intent of the Members and the Company
that all amounts in excess of the highest lawful rate or amount theretofore
collected be credited against any other distributions, contributions, payments
or other amounts to be paid by the recipient of the excess amount or refunded
to the appropriate Person, and the provisions of this Agreement immediately be
deemed reformed, without the necessity of the execution of any new document, so
as to comply with the applicable law, but so as to permit the payment of the
fullest amount otherwise required hereunder. All sums paid or agreed to be paid
that are judicially determined to be interest shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the term
of such obligation so that the rate or amount of interest on account of such
obligation does not exceed the maximum rate or amount of interest permitted
under applicable law.

12.11.      Severability.
In case any one or more of the provisions contained in this Agreement or any
application thereof shall be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and other application thereof shall not in any way be affected or impaired
thereby.

12.12       Entire
Agreement. This Agreement contains the entire understanding between the
parties relating to the subject matter contained herein, and supersedes all
other prior representations, warranties, agreements, understandings or letters
of intent between or among the parties hereto, including, without limitation,
the Limited Liability Operating Company Agreement of The Gale PFV Investor
Company, L.L.C. dated “August       , 2003.”  Amendments, variations, modifications or
changes herein may be made effective and binding upon the Members only by the
setting forth of same in a document duly executed by each Member, and any
alleged amendment, variation, modification or change herein which is not so
documented shall not be effective as to any Member.

12.13.      Publicity.
The parties agree that no Member or any of its advisors shall issue any press
release or otherwise publicize or disclose the terms of this Agreement without
the consent of the Managing Member, except as such disclosure may be made in
the course of normal reporting practices by any Member or Related Persons to
its Members, shareholders or partners or as otherwise required by law or rule of
any stock exchange (and prior to any such disclosure the disclosing Member will
notify the other Member and provide it with a copy of the proposed disclosure
and an opportunity to comment thereon before the disclosure is made).

 

12.14.      Counterparts.
This Agreement may be executed in multiple counterparts (and by facsimile or
portable document format (PDF) transmission), each of which shall be an
original but all of which together shall constitute but one and the same
agreement.

12.15.      Confidentiality.

 

(a)           Subject to Section 12.13, the
terms of this Agreement and all other business, financial or other information
relating directly to the conduct of the business and affairs of the Company or
the relative or absolute rights or interests of any of the Members that has not
been publicly disclosed pursuant to authorization of the Members (collectively,
the “Confidential Information”) is confidential and proprietary
information of the Company, the disclosure of which would cause irreparable
harm to the Company and the Members. Accordingly, each Member represents that
it has not and agrees that it will not and will direct its members,
shareholders, partners, directors, officers, agents, advisors and Related
Persons not to, disclose to any Person other than its attorneys, accountants,
consultants, advisors and other agents who have a need to know such information
any Confidential Information or confirm any statement made by third Persons
regarding Confidential Information until the Company has publicly disclosed the
Confidential Information pursuant to authorization by the Members and has
notified each Member that it has done so; provided, however, that
any Member (or its Related Persons) may disclose such Confidential Information (i) if
required by law or rule of any stock exchange (it being specifically
understood and agreed that anything set forth in a registration statement or
any other document filed pursuant to law will be deemed required by law, and
provided that before making any disclosure of Confidential Information required
by law or rule of any stock exchange, the disclosing Member will notify
the other Member and provide it with a copy of the proposed disclosure and an
opportunity to comment thereon before the disclosure is made), (ii) in
connection with an actual or proposed Transfer of Interests permitted
hereunder, (iii) reasonably necessary in connection with any transaction
authorized pursuant to the terms of this Agreement, or (iv) if necessary
for it to perform any of its duties or obligations hereunder.

(b)           Subject to the provisions of Section 12.15(a),
each Member agrees not to disclose any Confidential Information to any Person
(other than a Person agreeing in writing to maintain all Confidential
Information in strict confidence or a judge, magistrate or referee in any
action, suit or proceeding relating to or arising out of this Agreement or otherwise),
and to keep confidential all documents (including, without limitation,
responses to discovery requests) containing any Confidential Information. Each
Member hereby consents in advance to any motion for any protective order
brought by any other Member represented as being intended by the movant to
implement the purposes of this Section 12.15 provided that, if a Member
receives a request to disclose any Confidential Information under the terms of
a valid and effective order issued by a court or governmental agency and the
order was not sought by or on behalf of or consented to by such Member, then
such Member may disclose the Confidential Information to the extent required if
the Member as promptly as practicable notifies the other Member of the existence,
terms and circumstances of the order, consults in good faith with the other
Member on the advisability of taking legally available steps to resist or to
narrow the order, and if disclosure of the Confidential Information is
required, exercises its best efforts to obtain a protective order or other
reliable assurance that confidential treatment will be accorded to the portion
of the disclosed Confidential Information that the other Member may designate. The
cost (including, without limitation, reasonable attorneys’ fees and expenses)
of obtaining a protective order 

 

covering Confidential
Information designated by such other Member will be borne by the Company.

(c)           The covenants contained in this Section 12.15
will survive the Transfer of the Interest of any Member and the dissolution of
the Company.

(d)           Notwithstanding anything contained in
this Section 12.15 to the contrary, nothing contained in this Agreement
shall be deemed to prevent any Member from making such disclosures as are
required by applicable law, including, without limitation, federal or state
Securities Laws.

12.16.      Venue.
Any suit, action or proceeding seeking to enforce any provision of, or based on
any matter arising out of or in connection with this Agreement or the
transactions contemplated hereby or thereby may be brought in any state or
federal court in The City of New York, Borough of Manhattan, and each Member
hereby consents to the exclusive jurisdiction of any court in the State of New
York (and of the appropriate appellate courts therefrom) in any suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding which is brought in any such court has been brought in an
inconvenient forum. Each Member hereby waives the right to commence an action,
suit or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with this Agreement or the transactions
contemplated hereby or thereby in any court outside of The City of New York,
Borough of Manhattan. Process in any suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 12.03 shall be
deemed effective service of process on such party.

12.17.      Waiver
of Jury Trial. EACH OF THE MEMBERS HEREBY WAIVES TRIAL BY JURY IN ANY
ACTION ARISING OUT OF MATTERS RELATED TO THIS AGREEMENT, WHICH WAIVER IS
INFORMED AND VOLUNTARY.

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IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date set forth in the introductory paragraph hereof.

	
  

  	
   

  	
  THE GALE COMPANY, L.L.C.:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mitchell E. Hersh

  
	
   

  	
   

  	
  Name:

  	
  Mitchell E. Hersh

  
	
   

  	
   

  	
  Title:

  	
  Chairman & Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  STANLEY C. GALE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Stanley C. Gale

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