EXHIBIT NO. 127
FIRST AMENDMENT TO CONTRIBUTION
AND EXCHANGE AGREEMENT
THIS AGREEMENT (the "Agreement") is made this 18th day of December, 1997 among
PRINCETON OVERLOOK LIMITED LIABILITY COMPANY ("Contributor"), a limited
liability company organized under the laws of the State of New Jersey having an
address at c/o Bessemer Trust Company, N.A., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, CD OVERLOOK L.P. (the "Xxxxxxxx Group"), a limited partnership
organized under the laws of the State of New Jersey having an address x/x
Xxxxxxxxx Xxxxxxxxxxx, Xxx., #000, 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx
Xxxxxx 00000, PRINCETON OVERLOOK ASSOCIATES LIMITED PARTNERSHIP (the "POALP
Group", and together with Contributor and the Xxxxxxxx Group, collectively, the
"Contributor Group"), a limited partnership organized under the laws of the
State of New Jersey having an address c/o Xxxx Xxxxxxx, Xxxxxxx, Xxxxxxx &
Xxxxx, Xxxxxxxxx Plaza, 000 Xxxxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000,
and CALI REALTY, L.P. (N/K/A XXXX-XXXX REALTY, L.P.) ("CRLP"), a Delaware
limited partnership and CALI REALTY CORPORATION (N/K/A/ XXXX-XXXX REALTY
CORPORATION) ("Cali", and together with CRLP, collectively, the "Cali Group"), a
Maryland corporation, each having an address at 00 Xxxxxxxx Xxxxx, Xxxxxxxx, Xxx
Xxxxxx 00000.
RECITALS
A. Contributor, CRLP and Cali are parties to that certain Contribution and
Exchange Agreement dated as of the date of this Agreement (the "CEA"). The
Xxxxxxxx Group and the POALP Group are the sole members of Contributor.
B. Section 26 of the CEA provides, inter alia, that the parties thereto
would consider, in good faith, a Restructure (as such term is defined therein),
and the parties hereto desire to set forth the terms and conditions of the
Restructure and otherwise amend the Agreement upon, and subject to, the terms,
covenants and conditions herein contained.
C. All capitalized terms used herein shall have the respective meanings
ascribed to them in the CEA unless otherwise indicated.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and for Ten Dollars ($10.00) and other good and valuable consideration,
the mutual receipt and legal sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, do hereby agree to amend
the CEA as follows:
1. RESTRUCTURE.
1.1 The Xxxxxxxx Group and the POALP Group shall, prior to Closing,
cause Contributor to be dissolved and its assets (including, without limitation,
the Property) and liabilities (including, without limitation, the liabilities
under the CEA) to be distributed in accordance with the terms of a separate
agreement. At the Closing, the Xxxxxxxx Group and the POALP Group shall each
cause their respective interests in the Property to be sold, assigned,
transferred and conveyed to CRLP in accordance with the terms, covenants and
conditions of the CEA as amended hereby. The Xxxxxxxx Group and the POALP Group
are jointly and severally bound by all of the terms, covenants and conditions
set forth in the CEA, and they jointly and severally assume the obligations and
liabilities of Contributor set forth in the CEA as amended hereby, as though the
Xxxxxxxx Group and the POALP Group were parties to the CEA instead of
Contributor.
1.2 Notwithstanding the provisions of Section 2.1 of the CEA to the
contrary, CRLP shall cause (i) the $21,581,500.00 Cash Payment (subject to
adjustment as provided for under the CEA) to be paid at Closing as follows: (a)
$_________________ to the Xxxxxxxx Group, and (b) $_________________ to the
POALP Group, by wire transfer of federal funds to an account designated by each
party, and (ii) the Contributor Units to be issued to Unitholders designated by
the POALP Group as set forth on Schedule 1.2 attached hereto.
2. REPRESENTATIONS AND WARRANTIES.
2.1 The Xxxxxxxx Group and the POALP Group each hereby warrant and
represent the following:
(a) The Xxxxxxxx Group and the POALP Group are each duly organized and
validly existing limited partnerships organized under the laws of the State of
New Jersey and duly authorized to transact business in the State of New Jersey,
have all requisite power and authority to execute and deliver this Agreement and
all other documents and instruments to be executed and delivered hereunder, and
to perform their respective obligations hereunder and under
such other documents and instruments in order to sell the Property in accordance
with the terms and conditions hereof. All necessary actions of the partners of
the Xxxxxxxx Group and the POALP Group to confer such power and authority upon
the persons executing this Agreement and all documents which are contemplated by
this Agreement on their behalf have been taken.
(b) This Agreement, when duly executed and delivered, will be the
legal, valid and binding obligation of the Xxxxxxxx Group and the POALP Group,
enforceable in accordance with the terms of this Agreement. The performance by
the Xxxxxxxx Group and the POALP Group of their respective duties and
obligations under this Agreement and the documents and instruments to be
executed and delivered by them hereunder will not conflict with, or result in a
breach of, or default under, any provision of any of the respective
organizational documents of either the Xxxxxxxx Group or the POALP Group or any
agreements, instruments, decrees, judgments, injunctions, orders, writs, laws,
rules or regulations, or any determination or award of any court or arbitrator,
to which either party is a party or by which its assets are or may be bound.
(c) Neither the Xxxxxxxx Group nor the POALP Group have made a general
assignment for the benefit of creditors, filed any voluntary petition in
bankruptcy or suffered the filing of any involuntary petition by its creditors,
suffered the appointment of a receiver to take possession of all, or
substantially all, of its assets, suffered the attachment or other judicial
seizure of all, or substantially all, of its assets, admitted in writing its
inability to pay its debts as they come due or made an offer of settlement,
extension or composition to its creditors generally.
The provisions of Section 5.4 of the CEA shall apply to the representations and
warranties of the Xxxxxxxx Group and the POALP Group set forth in this Section
2.1, and the Xxxxxxxx Group and the POALP Group shall each be individually
liable for the obligation to indemnify, defend and hold Cali and CRLP harmless
from any breach, inaccuracy or incompleteness by such party of a representation
or warranty made by such party contained in this Section 2.1 to the extent
provided for in Section 5.4 of the CEA. Notwithstanding the foregoing, however,
except as provided in Section 2.2 of this Agreement, the Xxxxxxxx Group and the
POALP Group shall each be jointly and severally liable for the obligation to
indemnify, defend and hold Cali and CRLP harmless from any breach, inaccuracy or
incompleteness of the representations and warranties of the Contributor
contained in the CEA, and the aggregate liability of the Xxxxxxxx Group and the
POALP Group under Section 5.4 of the CEA shall be $250,000.00 as provided
therein.
2.2 The representations and warranties set forth in Section 5.2 of the
CEA shall be deemed to be made by and on behalf of the POALP Group and the
Unitholders, and the Xxxxxxxx Group shall have no liability to Cali or CRLP for
any breach, inaccuracy or incompleteness thereof. Notwithstanding anything to
the contrary contained in Section 5.4 of the CEA, the representations and
warranties of POALP and the Unitholders contained in Section 5.2 shall survive
the Closing Date indefinitely and shall not be subject to the $250,000.00
limitation of monetary liability provided for in Section 5.4 of the CEA.
2.3 The Xxxxxxxx Group shall maintain its existence for a period of six
(6) months after the Closing Date or, if a claim is made by Cali or CRLP
pursuant to the terms of Section 5.4 of the CEA (as amended hereby), the
Xxxxxxxx Group shall maintain its existence for such longer period of time as
may be necessary for Cali or CRLP to prosecute its claim to completion and, if
it is successful in such proceeding, to obtain and collect the value of its
claim. The provisions of this Section 2.3 shall survive the Closing.
3. LIMITED GUARANTY OF THE POALP GROUP.
3.1 In order to assist the Unitholders in deferring the recognition of gain for
Federal income tax purposes resulting from the contribution of the Real Property
to CRLP, at Closing, or at any time subsequent thereto in accordance with the
terms hereof, CRLP and its subsidiaries and affiliates will permit the Unit
Holders to guarantee or indemnify CRLP or Cali for a portion of any debt
incurred by CRLP or Cali or their affiliates and/or their subsidiaries
(collectively the "Cali Debt") in the aggregate amount of up to $2,000,000.00
(the "POALP Debt Amount"). CRLP, Cali and their subsidiaries and affiliates
agree to use commercially reasonable efforts, to the extent possible, to
maintain a sufficient amount of liabilities to permit the Unitholders to
guarantee or indemnify, as the case may be, the POALP Debt Amount in order to
allow the Unitholders to continue to defer recognition of gain for Federal
income tax purposes. CRLP and Cali agree to take any and all reasonable actions
necessary for the execution of each guarantee, indemnity, security or pledge
agreement by the Unitholders to result in basis for the Unitholders for Federal
income tax purposes.
3.2 Notwithstanding the foregoing provisions of Section 3.1, it is
expressly understood and agreed that CRLP, Cali and their subsidiaries and
affiliates have prior and present commitments to maintain a certain amount of
liabilities (approximately
$530,000,000.00) and that they may in the future, from time to time, make
additional commitments for the same in connection with the issuance of
additional Units in exchange for other properties to unrelated third parties in
tax deferred transactions (collectively, the "Other Groups") and, if so, the
aggregate amount of debt for such Other Groups is referred to herein as the
"Other Debt Amounts." CRLP and Cali will use their commercially reasonable
efforts to maintain, to the extent possible, an amount of liabilities in excess
of the Other Debt Amounts to enable the Unitholders to continue to guarantee or
indemnify a portion of the Cali Debt up to the POALP Debt Amount in order to
maintain for their tax position deferring gain present that results from the
contribution of property to CRLP, provided that CRLP or Cali is not adversely
affected. In this regard, the Unitholders agree to readjust the amounts of their
guarantees and indemnities, and CRLP, Cali and their subsidiaries and affiliates
agree to use commercially reasonable efforts to structure its financing, in such
a way to permit the Unitholders to restructure their respective guarantees or
indemnities so that the re-computed POALP Debt Amounts maintain the deferral of
Federal income taxes.
4. RESTRICTIONS ON SALE OF THE PROPERTY
4.1 From the period (the "Restricted Period") that commences on the Closing Date
and ends upon the earlier of the date upon which the original Unitholders
"Intended Transferee's" (as defined below) have transferred, sold or otherwise
disposed of ninety-eight (98%) percent or more of their Units in a taxable
transaction or any other transaction which results in a basis step-up to the
Unitholders in the Units to their current fair market value, to other than
Permitted Designees, or (c) the third (3rd) anniversary of the Closing, CRLP,
Cali and their subsidiaries and affiliates may not dispose of or distribute the
Real Property at any time except (i) in a tax-free like-kind exchange which
satisfies the requirements of Code Section 1031 and the Treasury Regulations
promulgated thereunder, (ii) if a sale or disposition of the Real Property would
not result in recognition of Built-in Gain by the Unitholders, (iii) otherwise
in compliance with the provisions of this Section 4, or (iv) if CRLP pays to the
Unitholders an amount equal to the sum of (A) the federal, state, and local
income taxes payable by the Unitholders resulting from the recognition of the
Built-in Gain triggered by such sale, and (B) an additional payment in an amount
equal to the amount such that after payment by the Unitholders of all taxes
(including interest or penalties) on amounts received under Section 4.1 (iv)(A)
and this Section 4.1 (iv)(B), the Unitholders retain an amount equal to the
amount described in Section 4.1(iv)(A). After the Restricted Period, the
restrictions contemplated by this Section 4 shall terminate in their entirety.
"Permitted Designees" shall include any inter vivos transfer to (i) spouses of
the Intended Transferees, or (ii) any trusts or other entities in which they own
an interest unless any such transfers trigger Built-in Gain or result in a basis
step-up to the Unitholders. For purposes of this Section 4.1, unless CRLP is
furnished with an opinion of counsel to the contrary, any transfer of the Units
to any person or entity other than a Permitted Designee is presumed to be a
taxable transaction. The Unitholders agree to cooperate with CRLP and Cali
regarding the calculation of the amount of actual Built-in Gain attributable to
the Real Property recognized upon any transfer. For purposes of this Agreement,
the term "Built-in Gain" for the Real Property shall mean the excess, if any, of
the fair market value of the Real Property on the Closing Date over the Real
Property's basis for Federal income tax purposes on such date. The provisions of
this Section 4.1 shall survive the Closing. The "Intended Transferee's" shall
mean the beneficial owners of the Unitholders, Xxxx Xxxxxxx, Estate of Xxxxxx X.
Xxxxxxx and Xxxxxx Overlook Associates.
4.2 Notwithstanding Section 4.1 above, during the Restricted Period, CRLP, Cali
and their subsidiaries and affiliates may dispose of the Real Property at any
time in connection with (i) the sale of all or substantially all of the
properties owned by CRLP under such terms and conditions which the Board of
Directors of Cali (the "Board"), in its sole judgment, determines to be in the
best interests of Cali and its public stockholders, or (ii) a sale (including
without limitation a transfer to a secured lender in lieu of foreclosure) which
the Board, in its sole judgment, determines is reasonably necessary (1) to
satisfy any material unsecured debt, judgment or liability of CRLP or Cali when
they become due (at maturity or otherwise) or (2) to cure any default under any
material mortgage, debt or liability with respect to the Real Property provided,
however, that no such sales will be made under clause (ii) unless CRLP is unable
to settle or refinance any such debts, judgments or liabilities or cure any such
defaults after making commercially reasonable efforts to do so under then
prevailing market conditions. If the Board, in its sole judgment, determines
that it is necessary to dispose of properties to satisfy a material unsecured
debt, judgment or liability of CRLP when it becomes due (at maturity or
otherwise), CRLP covenants and agrees that it shall use commercially reasonable
efforts to sell properties other than the Real Property to satisfy such material
debt, judgment or liability. If, after the Cali has made commercially reasonable
efforts to sell only properties other than the Real Property, an unsatisfied
portion of such debt, judgment or liability remains, CRLP may sell the Real
Property as necessary to
satisfy fully the remaining unpaid portion. In the case of any disposition of
the Real Property pursuant to this Section 4.2, the Unitholders may attempt to
obtain title to the Real Property so long as any equity in the Real Property
which CRLP may otherwise be seeking to preserve is not lost or jeopardized.
Moreover, in the event of a transfer of the Real Property to a secured lender in
lieu of foreclosure, CRLP shall use commercially reasonable efforts to provide
the Unitholders the right to (a) cure the default, (b) acquire the Real Property
from the lender subject to the debt or liability, or (c) permit the Unitholders
to exercise CRLP's right of redemption with respect to the Real Property.
4.3 After the expiration of the Restricted Period, CRLP, Cali or their
subsidiaries or affiliates may dispose of the Real Property at any time
provided, however, that CRLP, Cali and their subsidiaries and affiliates shall
use commercially reasonable efforts (without cost, liability or expense to CRLP,
Cali or their subsidiaries or affiliates) to prevent any such sale, transfer or
other disposition of the Real Property from resulting in the recognition of
Built-in-Gain by Unitholders.
4.4 In the event CRLP desires to sell or otherwise desires to dispose
of, or receives an offer to purchase, the Real Property pursuant to Section 4.2
or 4.3 above, CRLP shall give notice (the "Offering Notice") thereof to the
Unitholders. The Offering Notice shall specify the nature of the sale, and the
consideration and other material terms upon which it intends to undertake such
sale. Within ten (10) days thereafter, the Unitholders may elect, by notice to
CRLP, to purchase the Real Property. If the Unitholders elect to so purchase,
then such purchase shall be consummated on the terms and conditions set forth in
the Offering Notice. Unitholders may use their Units as currency, in whole or in
part, in connection with the purchase of any of the Real Property from CRLP
pursuant to this Section 4.4. If within the ten (10) day period during which the
Unitholders have the right to elect to purchase the Real Property for sale under
the Offering Notice, Unitholders do not make the election or fail to respond to
the Offering Notice, then CRLP may undertake to sell the Real Property on such
terms and conditions as it shall elect.
5. CEA REMAINS BINDING. Except as and to the extent modified hereby, the CEA
shall remain in full force and effect and binding upon the parties in accordance
with its terms.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
XXXX-XXXX REALTY, L.P.
By: Xxxx-Xxxx Realty Corporation
By:
Xxxxx Xxxxxx, Executive Vice President
XXXX-XXXX REALTY CORPORATION
By:
Xxxxx Xxxxxx, Executive Vice President
PRINCETON OVERLOOK LIMITED
LIABILITY COMPANY
By: CD OVERLOOK, L.P., its Managing
Member
By: Cavendish Development Company, Inc.,
its General Partner
By:
CD OVERLOOK, L.P.
By: Cavendish Development Company, Inc.,
its General Partner
By:
PRINCETON OVERLOOK ASSOCIATES LIMITED
PARTNERSHIP
By: Xxxxxx Overlook Associates,
its General Partner
By: Xxxxxx Properties Partnership,
General Partner
By:
Xxxx X. Xxxxxx
General Partner
By:
Xxxx X. Xxxxxx, Xx.
General Partner
