Exhibit 8
ENGAGEMENT AGREEMENT
INVESTMENT BANKER
PRUDENTIAL REALTY TRUST
This Agreement made March 16, 1995 by and between J.P. MORGAN
SECURITIES INC., (hereinafter referred to as "Agent") and
PRUDENTIAL REALTY TRUST, (hereinafter referred to as the "Trust").
IN CONSIDERATION of the mutual agreements contained
hereinafter the Trust has engaged Agent to act as the Trust's
investment banker and exclusive financial advisor with respect to
the sale, merger, consolidation, or any other business combination,
in one or a series of transactions, involving all or a substantial
amount of the stock, assets, properties, or business of the Trust,
or any other extraordinary dividend of cash, securities or other
assets to its stockholders (the "Transaction").
The assets of the Trust consist principally of certain real
property located variously in Indianapolis, Indiana (all of Park
100 except buildings 10 & 12), Melville, Long Island (Huntington
Business Campus), and Parsippany, New Jersey (Maple Plaza),
collectively referred to as the "Properties" and individually
referred to as a "Property" or by such property's common name.
Notwithstanding the foregoing, the Trust may elect to add Buildings
10 and 12 at the Park 100 complex to this Agreement pursuant to the
terms of paragraph 19 hereof.
THE TRUST AND AGENT AGREE:
(1) Term of Agreement. This Agreement shall commence as of
the date hereof and shall expire on December 15, 1995 unless sooner
terminated pursuant to the terms hereof.
(2) Scope of Services. During the term of this Agreement,
Agent shall diligently undertake certain services on the Trust's
behalf including, to the extent requested: (i) assisting the Trust
in preparing an offering memorandum (to be approved by the Trust)
describing the Trust, its operations, properties historical
performance, and future prospects, (ii) identifying and contracting
selected qualified acquirors acceptable to the Trust, (iii)
arranging for potential acquirors to conduct business
investigations, (iv) conducting an auction of the Trust and/or the
Properties, (v) assisting the Trust in negotiating the financial
aspects of any proposed Transaction, (vi) delivering an opinion to
the Board of Trustees, as to the fairness to the Trust's
stockholders from a financial point of view of the consideration to
be received by the Trust in any proposed Transaction (a "Fairness
Opinion"), (vii) assist in the closing of any Transaction, and
(viii) such other related or ancillary services as the Trust shall
reasonably request. Any financial advice rendered by Agent
pursuant to this Agreement may not be disclosed publicly in any
manner without Agent's prior written approval and will be treated
by the Trust as confidential; provided, Agent agrees that its
Fairness Opinion may be reproduced in full in any proxy or
information statement mailed to stockholders of the Trust and
agrees to provide its written approval for such use. In the
performance of such services, Agent shall devote to the execution
of the Agreement individuals with substantial and successful
experience in completing transactions of similar size and
complexity. Owner expects to receive the services of Jon Zehner,
David Gilbert, and Bob Sroka who shall assume primary
responsibility for provision of such services. Agent shall have
the right to substitute the services of another individual for any
one of those named above provided that such individual has at least
the same level of experience and qualifications as the individual
being replaced and Agent gives Trust written notice of such
substitution. The full resources of Agent's firm shall be made
available to ensure the successful completion of the Transaction.
(3) Compensation. If the Trust or its Properties are sold or
otherwise disposed of in a Transaction by Agent, by the Trust, or
by or through any other person during the term hereof, the Trust
shall pay to Agent, and Agent agrees to accept same as full
compensation for its services in connection with this engagement,
a contingent success fee ("Success Fee") equal to the specified
percentage rate set forth below multiplied by the "Transaction
Value" for Transactions which are "consummated" during the term
hereof or, if applicable, during the "Hold Over Period" (all terms
in quotes are defined, below). The applicable percentage rate
shall be one and one half percent (1.5%) of the Transaction Value
for Park One Hundred and Maple Plaza, and three quarters of one
percent (0.75%) of the Transaction Value for Huntington Business
Campus. In the event the disposition of Huntington Business
Campus is combined with one or more of the other properties, the
Transaction Value attributable to Huntington shall be deemed to be
a proportional amount of the total consideration, computed as the
ratio of the 1994 appraisal for Huntington as compared to the
aggregate 1994 appraised value for all of the Properties.
(a) Credits. The Success Fee otherwise due Agent hereunder
shall be reduced: (i) by one half (50%) of the amount of any
expenses reimbursable to Agent pursuant to paragraph (4)
hereof, and (ii) in the amount of Fifty Thousand Dollars
($50,000) representing a credit for the fee previously paid to
Agent for its Phase I services. No additional compensation
shall be due or payable to Agent in connection with any
Fairness Opinions issued in connection with any Transaction.
(b) Transaction Value. For the purposes of this Agreement,
"Transaction Value" means the aggregate amount of
consideration received by the Trust and/or its stockholders
(treating any shares issuable upon exercise of options,
warrants, or other rights of conversion as outstanding) in
any Transaction, plus the amount of any debt securities or
other liabilities assumed, redeemed, or remaining
outstanding or equity securities redeemed or remaining
outstanding in connection with any Transaction. In no
event, however, shall the Transaction Value include the
aggregate amount of the following items which Trust may
agree to pay or which are otherwise credited to the
acquiror: all income supports, income guarantees or master
lease payments; amounts for tenant improvements and other
leasing costs; extraordinary governmental impositions (such
as, but not limited to, impact or permit fees); amounts for
capital expenditures; amounts for hazardous waste removal or
correction and all other items of a similar nature.
Provided, however, credits to the acquiror arising from
proration of ordinary operating income and expense items and
ad valorem property taxes shall not be excluded from the
Transaction Value.
(c) When Consideration is Stock. If the consideration or
other value received in any Transaction is paid in whole or
in part in the form of securities, the value of such
securities, for purposes of calculating the Success Fee,
shall be the fair market value thereof, as the parties
hereto shall mutually agree, on the day prior to the
consummation of the Transaction; provided, however, that if
such securities consist of securities with an existing
public trading market, the value thereof shall be determined
by the last sales price for such securities on the last
trading day thereof prior to such consummation. If all or a
portion of the consideration is related to or contingent
upon the future earnings or operations of the Trust, the
portion of Agent's compensation relating thereto shall be
calculated and shall be paid at the time the Transaction is
consummated based upon the estimated net present value
thereof.
(d) Multiple Transactions. If more than one Transaction is
consummated, a Success Fee shall be payable with respect to
each such Transaction in cash upon "consummation" (as
defined below) thereof and the amount of the Success Fee
payable in respect of each Transaction after the first shall
be equal to the Success Fee that would have been payable for
a Transaction having a Transaction Value equal to the
aggregate Transaction Value of such Transaction plus all
Transactions previously consummated, less the aggregate
amount of all Success Fees previously paid.
(e) Consummation Deemed When. For purposes of this
Agreement, a Transaction shall be deemed to have been
"consummated" upon the earliest of any of the following
events to occur: (i) the acquisition by another person or
entity of at least 75% of each of the outstanding classes of
stock of the Trust; (ii) a merger or consolidation of the
Trust with another person or entity; (iii) closing (deemed
to be irrevocable delivery of a deed and payment of the
consideration) of the acquisition of title to one or more of
the Trust Properties; (iv) the receipt by stockholders or
the Trust of any cash, securities, or other assets of any
person or entity as payment for the Capital and/or Income
shares in the Trust as the case may be, or for the
acquisition of one or more of the Trust Properties; or (v)
at the next annual meeting of the Trust's shareholders, the
election of three independent Trustees who are: (x)
different from the current Trustees, and (y) not endorsed
by the current Advisor to the Trust.
(f) Trust's Right to Reject Offers. Agent's Success Fee
shall be deemed earned and payable only upon consummation of
a Transaction as defined above during the basic term hereof,
or, if the provisions are applicable, during the Hold Over
Term. Agent shall not be entitled to any compensation
whatsoever for offers which shall for any reason be rejected
by the Trust.
(g) Hold Over Period. Subject to the other provisions of
this Agreement, Agent shall be entitled to the payment of
its Success Fee on any Transaction which is consummated
after the expiration of the base term hereof (the "Hold Over
Period") provided each of the following conditions are
satisfied: (i) the acquiror of the stock, assets or Property
has been registered with the Trust as a prospect in
accordance with the procedures set forth below, (ii) a
binding acquisition agreement with such prospect has been
entered into not later than 120 days following the
expiration of the base term of this Agreement , and (iii)
consummation of a Transaction with such prospect has
occurred not later than 180 days following the expiration of
the base term hereof.
Agent shall submit to the Trust within thirty (30) days
after the expiration or termination of this Agreement a list
agreed to by the Trust and Agent containing the names of
those specific prospective acquirors who have met with and
received offering materials from Agent, who have physically
inspected one or more of the Properties and documents
related thereto, and from whom Agent or the Trust has
received a written proposal (binding or non-binding) to
enter into a Transaction. Failure to submit such a list
shall relieve the Trust of any and all obligations to Agent,
including without limitation the obligation to pay any
compensation with respect to a Transaction consummated after
the expiration or termination of this Agreement.
For any completed Transaction occurring after the expiration
of the basic term hereof, if one or more of the above
conditions are not satisfied, then the Trust shall be
relieved of any obligation to pay compensation to Agent and,
thereafter, the Trust shall be free to negotiate with any
such prospect on its own behalf or through another
investment banker, agent or broker.
(4) Agent's Expenses. Subject to a maximum cap of Seventy
Five Thousand Dollars ($75,000), the Trust agrees to reimburse
Agent promptly upon request from time to time for its reasonable,
documented, out-of-pocket expenses (including, without
limitation, travel, communication, and document production
expenses, and the reasonable fees and disbursements of counsel)
incurred by Agent in performing its engagement hereunder, whether
or not a Transaction is consummated; provided that for any
individual item in excess of Five Thousand Dollars ($5,000),
Agent must receive the prior written approval of the Trust.
Notwithstanding the foregoing, except for Agent's right to engage
counsel pursuant to the indemnification provisions of Schedule 1
hereof, Agent shall not engage independent counsel without the
prior written approval of the Trust. This expense reimbursement
obligation shall survive any termination or expiration of this
Agreement.
(5) Agent's Authority. Agent acknowledges that it has no
authority to make any representation of any kind whatsoever
concerning the Trust or its Properties or to enter into any
agreements with a prospective acquiror that would bind the Trust
or subject it to any obligations or liabilities. Agent shall not
represent that it has any such authority and shall not enter into
any agreement with a prospective acquiror that would bind the
Trust or subject it to any obligations or liabilities. No
agreement or terms negotiated by Agent shall be binding upon the
Trust unless and until incorporated into a definitive contract,
which has been approved by the Board of Trustees, executed by the
acquiror and the Trust and unconditionally delivered by Trust to
the acquiror, its counsel or agent.
(6) Rights Reserved By Trust. The Trust reserves the right
to conduct all negotiations with prospective acquirors. Further,
all matters regarding pricing, marketing strategies and terms of
sale shall be subject to the prior approval of the Trust in its
sole and unfettered discretion. Agent shall assume all risks
attendant to the Trust's policies and procedures, including the
Trust's making decisions relative to pricing, marketing
strategies and terms of a Transaction with which Agent does not
agree. The Trust may adjust the offering price for the
Properties upward or downward at any time during the term of this
Agreement and shall inform Agent of such adjustments. The Trust,
acting in good faith, may reject any proposed acquiror, sale
agreement, or Transaction even if such offer shall be at the
offering price previously approved by the Trust.
(7) Cooperation by Trust. The Trust agrees to provide
Agent all financial and other information requested by it for the
purpose of its assignment hereunder. In performing its services
hereunder, Agent shall be entitled to rely upon and assume,
without independent verification, the accuracy and completeness
of all information that is publicly available and of all
information that has been furnished to it by the Trust or
otherwise reviewed by the Trust, and Agent shall not assume any
responsibility nor have any liability therefore. Agent shall
have no obligation to conduct any valuation or appraisal of any
assets or liabilities. In order to coordinate efforts with
respect to possible Transactions, during the period of Agent's
engagement hereunder neither the Trust nor any representative
thereof (other than Agent) will initiate discussions regarding a
Transaction except through Agent. If the Trust or its management
receives an inquiry regarding a Transaction, it will promptly
advise Agent of such inquiry in order that Agent can evaluate the
person making such inquiry and its interest and assist the Trust
in any resulting negotiations.
(8) Marketing Strategies. Upon execution hereof, Agent
shall: (i) review with the Trust and obtain its approval of a
list of potential acquirors, including those with whom the Trust
may have already had discussions; and (ii) recommend to the Trust
a suitable offering price and structure for sale. Agent shall
obtain the Trust's written approval of the offering materials and
offering price and structure prior to circulation or discussion
with any party of the same.
(9) Communication With the Trust. During the term of this
Agreement, Agent shall promptly inform the Trust of all offers
for the Trust or its Properties. Upon initial circulation of the
offering materials, Agent shall submit a written report to the
Trust not less than twice monthly advising the Trust of the
status of its efforts to solicit bids for the Trust including at
list of prospective acquirors who have been contacted, a list of
those who have received offering materials, and a list of those
who have made visits to the Properties, and including, an updated
list of all prospective acquirors and all inquiries with the
name, address and phone number of the prospective acquiror's or
inquirer's representative and the status of their interest in
the Trust or its Properties.
(10) Books and Records. Agent shall keep adequate books and
records in connection with all matters contemplated by this
Agreement and shall allow the Trust, at any time during business
hours during the term hereof and for a period of one year after
expiration or termination of this Agreement, to examine the same
or any correspondence pertaining to transactions arising out of
this Agreement. During such period, Agent shall make available
to the Trust all such records or correspondence relative to
specific prospective acquirors as may be necessary or helpful in
enabling the Trust to carry to completion any Transaction which
may have been partially negotiated under the terms of this
Agreement.
(11) Cooperation - Other Brokers or Investment Bankers.
Agent agrees to cooperate with all investment bankers or licensed
real estate brokers who give evidence that they have procured and
are authorized to represent a prospective acquiror of the Trust
or one or more of its Properties. Further, Agent has been advised
that a local real estate brokerage firm will be engaged by the
Trust to assist in the marketing and sale of Huntington Business
Campus. The respective roles of Agent and such broker shall be as
set forth in the letter dated January 20, 1995 from David Gilbert
to Joseph Selzer a copy of which is attached hereto as Schedule 2
and incorporated by this reference, or as otherwise determined by
the Trust. Agent acknowledges that the engagement of such local
broker shall not infringe any grant of exclusivity otherwise
granted to Agent by this Agreement, and agrees to cooperate to
the fullest extent with such broker; provided Agent shall have
the right to approve in advance all materials which are
disseminated by such broker. Upon execution of a listing
agreement with such local broker, the parties agree to append a
copy of such agreement hereto as Schedule 3.
(12) Indemnification. The parties hereto acknowledge that
the only real estate broker which has presently been engaged to
be involved in any Transaction is the firm of Sutton & Edwards;
that such broker has been so involved pursuant to an arrangement
made by the Trust, and that the Trust is obligated to pay such
broker's commission. Except for Sutton & Edwards, each party
hereby agrees to indemnify, defend and hold harmless the other
party from and against any liability, cost or expense, including
reasonable attorneys' fees, as a result of any claim for a
commission, fee or other compensation made by any real estate
broker, finder or other person and asserted against the other
party by reason of an arrangement made or alleged to have been
made by the indemnifying party. Agent agrees to indemnify and
hold harmless the Trust (including its affiliates and agents) and
any of their officers, directors or employees from and against
any suits, losses, claims, demands, damages, judgements or
liabilities of any kind whatsoever arising out of or relating to
the inaccuracy or breach of any representation or obligation of
Agent's contained in Section 16 hereof. The Trust agrees to
indemnify Agent in accordance with the provisions of Schedule 1,
attached hereto and incorporated herein by this reference. The
indemnities in this Section shall survive consummation of any
Transaction or the termination of this Agreement.
(13) Advertising. Agent shall not issue advertising, press
releases, or information regarding the purchase price or terms of
the Transaction, without first obtaining the prior written
approval of the Trust.
(14) Notice. Notice to either party shall be made in
writing, an shall be served by registered, certified, or
overnight mail, return receipt requested, and if sent to the
Trust, to:
c/o Prudential Realty Advisors
751 Broad Street
4th Floor
Newark, New Jersey 07102-3777
Attention: Joseph Selzer
and if sent to Agent, to:
J.P. Morgan Securities Inc.
60 Wall Street
New York, NY 10260-0060
Attention: David Gilbert
Any such notice shall be deemed to have been given when mailed.
(15) Termination and Payment of Litigation Expenses. Either
party hereto may terminate this Agreement at any time by written
notice to the other. Termination shall be effective not less
than five (5) days after such notice nor more than thirty (30)
days after the date of such notice at the discretion of the party
giving such notice. Except as specifically provided below, no
such termination will affect any confidentiality obligations
hereunder or Agent's rights to receive reimbursement of expenses
to the date of termination or its Success Fees for any
Transactions consummated prior to the expiration of the Hold Over
Period; provided if Agent shall terminate this Agreement for any
reason, or if Trust shall terminate this Agreement due to the
material breach by Agent of an essential term hereof, then Agent
shall not be entitled to any Success Fee whatsoever and there
shall be no Hold Over Period during which Agent would be entitled
to receive a Success Fee from previous negotiations.
In the event of litigation between the parties with respect
to Agent's termination or entitlement to its Success Fee, the
losing party shall pay all costs and expenses incurred by the
prevailing party in connection with such litigation, including
reasonable attorneys' fees and costs.
(16) Consents, Etc. The Agent represents and warrants that
it has all necessary franchises, licenses, permits, certificates,
and other authorizations from the federal, state, and local
government or governmental agencies, departments, or bodies that
are required for the due execution, delivery and performance by
the Agent of this Agreement.
(17) Waiver of Default. The failure of either party to
insist in any one or more instances upon the strict performance
of any one or more of the obligations of this Agreement, or to
exercise any right herein contained, shall not be construed as a
waiver or relinquishment for the future of the performance of
such one or more obligations of this Agreement or of the right to
exercise such right, but the same shall continue and remain in
full force and effect with respect to any subsequent breach, act
or omission.
(18) Governing Law. This Agreement shall be governed and
construed by the laws of the State of New York.
(19) Addition of Certain Assets. Notwithstanding anything
contained herein to the contrary, upon written notice from the
Trust to Agent, the Park 100 properties known as Buildings 10 and
12, may be added to this Agreement and Agent shall offer such
buildings together with the rest of the Park 100 properties.
(20) Entire Agreement. Except for the Fifty Thousand Dollar
($50,000) credit from the prior consulting agreement which the
Trust is entitled to apply against Agent's Success Fee hereunder,
this Agreement supersedes and takes the place of any and all
previous agreements, if any, between the parties concerning
disposition of the Trust or its Properties, and each respectively
acknowledges there are no covenants, promises, agreements,
representations, inducements, conditions or understandings,
either oral or written, between the Trust and Agent, other than
are set forth herein.
IN WITNESS WHEREOF, the parties have hereunto set forth
their hands as of the date above first written.
Prudential Realty Trust
By: The Prudential Realty Advisors, Agent
By:/s/ Joseph M. Selzer
Vice President
J.P. Morgan Securities Inc.
By:/s/ David Gilbert
Vice President
SCHEDULE I
1. Basic Terms of Indemnification. Prudential Realty Trust
(the "Company"), the client referred to in the attached agreement
(the "Agreement"), agrees to indemnify and hold harmless J.P.
Morgan Securities Inc. ("J.P. Morgan") and its affiliates, and
the respective directors, officers, agents, and employees of J.P.
Morgan and its affiliates and each other entity or person, if
any, controlling J.P. Morgan or any of its affiliates (J.P.
Morgan and each such entity or person being referred to as an
"Indemnified Person") from and against any losses, claims,
demands, damages, judgements or liabilities (or actions or
proceedings in respect thereof) of any kind relating to or
arising out of activities performed or services furnished pursu-
ant to the Agreement, the transactions contemplated thereby or
J.P. Morgan's role in connection therewith. The Company will not,
however, be responsible for any such losses, claims, demands,
damages, liabilities, or expenses of any Indemnified Person that
are determined by final and nonappealable judgment of a court of
competent jurisdiction to have resulted primarily from actions
taken or omitted to be taken by such Indemnified Person in bad
faith or from such Indemnified Person's negligence or willful
misconduct. The Company also agrees that no Indemnified Person
shall have any liability (whether direct or indirect, in
contract, tort or otherwise) to the Company or any of its
security holders for or in connection with the Agreement, any
transactions contemplated thereby or J.P. Morgan's role in
connection therewith, except for any such liability for losses,
claims, demands, damages, liabilities or expenses incurred by the
Company that are determined by final and nonappealable judgment
of a court of competent jurisdiction to have resulted primarily
from actions taken or omitted to be taken by such Indemnified
Person in bad faith or from such Indemnified Person's negligence
or willful misconduct.
2. Prompt Notice of Claims. Upon receipt by an Indemnified
Person of written notice of a claim, action or proceeding against
such Indemnified Person in respect of which indemnity may be
sought hereunder, such Indemnified Person shall promptly notify
the Company with respect thereto. In addition, an Indemnified
Person shall promptly notify the Company after any action is
commenced (by way of service with a summons or other legal
process giving information as to the nature and basis of the
claim) against such Indemnified Person. The failure to notify
the Company shall not relieve the Company from any liability
which the Company may have on account of this indemnity or
otherwise, except to the extent the Company shall have been
adversely affected or prejudiced by such failure.
3. Conduct of the Defense. Upon notification of a claim
covered by this indemnity, the Company will assume the defense of
any litigation or proceeding using counsel and other resources
reasonably satisfactory to J.P. Morgan. In any such litigation
or proceeding the defense of which the Company shall have so
assumed, any Indemnified Person shall, subject to the control and
direction of the counsel selected by Company, have the right to
participate. Should an Indemnified Person elect to retain
independent counsel, such person and its counsel shall enter into
a Joint Defense Agreement with the Company and its counsel on
customary terms and conditions. The fees and expenses of such
independent counsel shall be solely at the expense of such
Indemnified Person unless (i) the Company and such Indemnified
Person shall have mutually agreed in writing to the retention of
such counsel, or (ii) there is a reasonable basis to believe that
the claim may ultimately not be covered by the indemnity and
counsel selected by the Indemnified Person but otherwise
reasonably acceptable to the Company has issued an opinion that
representation of both parties by the same counsel would be
inappropriate due to actual or potential conflicts of interest
between the Company and such Indemnified Person.
4. Settlements and Similar Decisions. The Company shall have
primary responsibility for all settlement discussions and
negotiations, and shall not be liable for any settlement of any
litigation or proceeding effected without its written consent.
However, the Company will not settle any claim, action or
proceeding in respect of which indemnity may be sought hereunder,
whether or not any Indemnified Person is an actual or potential
party to such claim, action or proceeding unless (i) the
settlement includes an unconditional release of all Indemnified
Persons, or (ii) J.P. Morgan has given it written consent to the
settlement, which consent shall not be unreasonably withheld or
delayed.
5. Survival of Indemnity and Miscellaneous Provisions. The
provisions contained in this Schedule I shall be in addition to
any liability which the Company may otherwise have to J.P.
Morgan, shall be governed by the laws of the State of New York,
and shall remain operative and in full force and effect
regardless of the expiration or any termination of the Agreement
or of J.P. Morgan's engagement thereunder.
2/25/95