EXHIBIT 10.2
ESCROW AGREEMENT
Date: September 21, 2000
File No.
Escrow Agent: CHICAGO TITLE INSURANCE COMPANY
Parties: Mack-Cali Realty Corporation, a Maryland corporation, Mack-Cali Realty,
L.P., a Delaware limited partnership (collectively, "Mack-Cali"), Prentiss
Properties Trust, a Maryland real estate trust and Prentiss Properties
Acquisition Partners, L.P., a Delaware limited partnership (collectively,
"Prentiss" and together with Mack-Cali, the "Parties")
In connection with the Termination and Release Agreement dated September 21,
2000 among the Parties, the Parties enter into this Escrow Agreement (the
"Agreement") and hereby authorize Escrow Agent to hold monies according to the
following terms and conditions:
1. The sum to be escrowed is $25,000,000.00 (the "Escrowed Funds").
2. The funds are to be held pending satisfaction of the following:
Upon delivery to the Escrow Agent and Mack-Cali by Prentiss of either (i)
a letter from Prentiss' independent accountants indicating the maximum
amount of money that can be paid at that time to Prentiss without causing
Prentiss to fail to meet the REIT Requirements (as hereinafter defined) or
(ii) a Fee Tax Opinion (as hereinafter defined), in either of such events,
the Escrow Agent shall deliver to Prentiss funds from the Escrow account,
in the case of 2(i) above, the lesser of the amount of funds remaining in
the escrow account and the maximum amount stated in the letter referred to
in 2(i) above, or in the case of 2(ii) above, the amount of funds
remaining in the escrow account. A "Fee Tax Opinion" shall mean a letter
from outside counsel of Prentiss indicating that Prentiss has received a
ruling from the Internal Revenue Service holding that the receipt by
Prentiss Properties Acquisition Partners, L.P. and/or Prentiss Properties
Trust of the funds held in escrow would not cause Prentiss to fail to meet
the REIT Requirements as hereinafter defined. "REIT Requirements" shall
mean compliance with Sections 856(c)(2) and (3) of the Internal Revenue
Code of 1986, as amended. Upon the Escrow Agent's receipt of the letter
referred to in 2(i) above or the Fee Tax Opinion defined and referred to
in 2(ii) above, the Escrow Agent shall release the Escrowed Funds or any
part thereof to Prentiss Properties Acquisition Partners, L.P., pursuant
to the written directions and instructions of Prentiss' independent
accountants and/or outside counsel directed to and received by the Escrow
Agent.
3. The funds are to be released ONLY upon written notification given by
Prentiss in accordance with Paragraph 2 above. If any funds remain in
Escrow subsequent to December 31, 2005, the Escrow Agent shall return such
funds to Mack-Cali.
4. In the event no written notification is received by Escrow Agent on or
before the date cited in Paragraph 3 above, Escrow Agent shall return all
remaining funds to Mack-Cali, without any recourse or liability to Escrow
Agent and without notice to Prentiss.
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5. In the event a controversy arises over said funds, Escrow Agent, at its
sole discretion, may tender the funds into court for settlement, after
deducting its attorney's fees, court costs, and escrow fees, if any, which
have accrued.
6. Prentiss agrees to save and hold Escrow Agent harmless from any liability
arising under and as a result of this Escrow Agreement, and the Parties
further agree that the Escrow Agent may, at its option, require the
receipt, release and authorization in writing of all Parties before paying
money or delivering or redelivering documents or property to any Party or
to third parties. Escrow Agent shall not be liable for any interest or
other charges on the money held by it. Notwithstanding the above, Escrow
Agent shall invest said funds in accordance with an agreement to be
executed between Prentiss and Escrow Agent and the terms and conditions of
said agreement shall become a part of this Escrow Agreement. All interest
earned with respect to said funds shall become part of the Escrowed Funds
and shall be distributed in accordance with paragraph 2 of this Agreement.
Except as set forth in Paragraph 7(c) below, Prentiss shall be solely
responsible for the fees of the Escrow Agent hereunder.
7. (a) Escrow Agent shall hold possession of and solely keep all of the
Escrowed Funds and closing documents subject to the terms and conditions
of this Agreement, and shall deliver and dispose of the same according to
the terms and conditions hereof, and shall deal with the parties hereto in
relation to the sums and documents so escrowed fairly and impartially
according to the intent of the parties as herein expressed, provided
however that Escrow Agent is to be considered as a depository only, shall
not be deemed to be a party to any document other than this Agreement, and
shall not responsible or liable in any manner whatsoever for the
sufficiency, manner of execution, or validity of any written instructions,
certificates or any other documents received by it, nor as to the
identity, authority or right of any persons executing the same.
(b) Escrow Agent shall not at any time be held liable for actions taken or
omitted to be taken in good faith and without gross negligence. The
Parties agree to save and hold Escrow Agent harmless from any loss and
from any claims or demands arising out of its actions hereunder and
Prentiss hereby agrees to indemnify Escrow Agent from any claims or
demands for losses arising out of its activities hereunder, except as set
forth in paragraph 7(c) below.
(c) It is further understood by the Parties that if, as the result of any
disagreement between them or adverse demands and claims being made by any
of them upon Escrow Agent, or if Escrow Agent otherwise shall become
involved in litigation with respect to this Agreement, such Parties agree
that they, jointly and severally, are and shall be liable to Escrow Agent
and shall reimburse Escrow Agent on demand for all costs, expenses and
counsel fees it shall incur or be compelled to pay by reason of such
litigation, including reasonable compensation to Escrow Agent for time
expended in connection with any such dispute or litigation. Prentiss and
Mack-Cali agree among themselves that each shall be responsible to advance
one-half of all amounts due Escrow Agent under this paragraph 7(c),
provided that any such advance by the Parties as the result of any dispute
or litigation between them shall be without prejudice to their right to
recover such amount as damages from the breaching party.
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(d) In taking or omitting to take any action whatsoever hereunder, Escrow
Agent shall be protected in relying upon any notice, paper, or other
document believed by it to be genuine, or upon evidence deemed by it to be
sufficient, and in no event shall Escrow Agent be liable hereunder for any
act performed or omitted to be performed by it hereunder in the absence of
gross negligence or bad faith. Escrow Agent may consult with counsel in
connection with its duties hereunder and shall be fully protected in any
act taken, suffered or permitted by it in good faith and without gross
negligence in accordance with the advice of such counsel.
8. The Parties hereby agree that the funds described above shall be vested in
Escrow Agent, and the Parties hereby grant, convey and deposit the funds
under the absolute control and possession of Escrow Agent until such time
as the funds are disbursed in accordance with the provisions of this
Escrow Agreement.
9. The foregoing terms, along with the Agreement for Purchase and Sale of
even date by and among Prentiss Properties Acquisition Partners, L.P. and
Mack-Cali Texas Property, L.P. and the Termination and Release Agreement
of even date by and between the Parties, constitute the entire agreement
between the Parties, and this Agreement shall not be modified, changed or
amended by any subsequent written or oral agreement unless agreed to in
writing by the Parties and the Escrow Agent.
10. NOTICES. All notices, demands, requests or other communication which may
or shall be given or served by any party to this Agreement upon any other
Party to this Agreement, shall be deemed to have been given or served
three (3) business days after the date the same is deposited in the United
States mail, registered or certified, return receipt requested, postage
prepaid and addressed to the following:
If to Seller: Mack-Cali Realty Corporation
11 Commerce Drive
Cranford, New Jersey 07016
Attention: Mitchell E. Hersh
Chief Executive Officer
and
Roger W. Thomas
Executive Vice President, General Counsel
and Secretary
With copies to: Pryor Cashman Sherman & Flynn LLP
410 Park Avenue
New York, New York 10022
Attention: Blake Hornick, Esq.
Fax No. (212) 326-0806
If to Purchaser: Prentiss Properties Trust
3890 W. Northwest Highway, Suite 400
Dallas, Texas 75220
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Attention: Thomas F. August
President and Chief Executive Officer
Fax No. (214) 350-2408
and
J. Kevan Dilbeck
Senior Vice President and General Counsel
Fax No. (214) 350-2409
With a copy to: Akin, Gump, Strauss, Hauer & Feld, L.L.P.
1700 Pacific Avenue, Suite 4100
Dallas, Texas 75201
Attention: Michael E. Dillard, P.C.
Fax No. (214) 969-4343
If to Escrow Agent: Chicago Title Insurance Company
Attention: Ellen Schwab
2001 Bryan Street, Suite 1700
Dallas, Texas 75201
All Parties shall have the right from time to time to designate by written
notice to all other Parties any other address or place where such notice,
demand, or request be addressed.
11. MISCELLANEOUS.
(a) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, executors, administrators,
representatives, successors and assigns.
(b) This Agreement shall be construed under and governed by the laws
of the State of Texas, and, in the event that any provision hereof shall
be deemed illegal or unenforceable, said provision shall be severed
herefrom and the remainder of this Agreement shall be enforced in
accordance with the intentions of the parties as herein expressed.
(c) This Agreement may be executed in counterparts, all of which
taken together shall constitute one agreement.
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PRENTISS: MACK-CALI:
Prentiss Properties Trust Mack-Cali Realty Corporation
a Maryland real estate a Maryland corporation
investment trust
By: /s/ J. Kevan Dilbeck By: /s/ James A. Clabby
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Name: J. Kevan Dilbeck Name: James A. Clabby
Title: Senior Vice President Title: Senior Vice President
Prentiss Properties Acquisition Mack-Cali Realty, L.P.
Partners, L.P. a Delaware limited partnership
a Delaware limited partnership By: Mack-Cali Realty Corporation
By: Prentiss Properties I, Inc. its managing general partner
a Delaware corporation
general partner
By: /s/ J. Kevan Dilbeck By: /s/ James A. Clabby
--------------------------- ---------------------------
Name: J. Kevan Dilbeck Name: James A. Clabby
Title: Senior Vice President Title: Senior Vice President
Escrow Agent acknowledges receipt of the money in the amount of $25,000,000.00
to be held in accordance with the terms of the foregoing agreement. Escrow Agent
does not assume and shall not be liable for the performance or nonperformance of
any Party to this agreement.
ESCROW AGENT:
CHICAGO TITLE INSURANCE COMPANY,
a Missouri corporation
By: /s/ Ellen Schwab
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Name: Ellen Schwab
Title: Escrow Officer
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