Mack-Cali Realty (CLI)

10.                   RELATED PARTY TRANSACTIONS

The Company, which does not employ any personnel, designated The Gale Management Company, L.L.C. (a subsidiary of Mack-Cali Realty, L.P.) and/or its affiliates (“Gale”) to be the administrator of the Company pursuant to a one-year Management Agreement (the “Management Agreement”) which is automatically renewable for successive one year periods.  Under the Management Agreement, Gale provides the Company’s property management, construction, leasing, accounting and other services as needed.

The Company incurred $8,712, $8,515 and $5,476 for management fees, leasing fees, tenant improvements, other operating costs and direct expenses relating to building operations, and improvements made to the properties for the years ended December 31, 2008, 2007 and the period from May 9, 2006 (commencement of operations) through December 31, 2006, respectively.  Included in accounts payable and accrued expenses in the accompanying consolidated balance sheets, are amounts due to Gale at December 31, 2008 and 2007 aggregating $520 and $523, respectively, attributable to the above-referenced costs.

Included in accounts payable and accrued expenses at December 31, 2008 and 2007 is $2,318 and $2,939, respectively, due to the members.  This amount does not bear interest and is expected to be repaid in the normal course of business.

The Company paid interest expense of $5,308, $7,377 and $4,309 to Gramercy Warehouse Funding I LLC, an affiliate of SL Green Realty Corp, Inc., a related party, and $61, $216 and $0 to Mack-Cali Realty, L.P., a related party, for the years ended December 31, 2008, 2007 and the period from May 9, 2006 (commencement of operations) through December 31, 2006, respectively (see Note 8).

10.                   RELATED PARTY
TRANSACTIONS

The Company, which does not employ any
personnel, designated The Gale Management Company, L.L.C. (a subsidiary of
Mack-Cali Realty, L.P.) and/or its affiliates (“Gale”) to be the administrator
of the Company pursuant to a one-year Management Agreement (the “Management
Agreement”) which is automatically renewable for successive one year
periods.  Under the Management Agreement,
Gale provides the Company’s property management, construction, leasing,
accounting and other services as needed.

The Company incurred $8,712, $8,515 and $5,476 for management fees,
leasing fees, tenant improvements, other operating costs and direct expenses
relating to building operations, and improvements made to the properties for
the years ended December 31, 2008, 2007 and the period from May 9,
2006 (commencement of operations) through December 31, 2006,
respectively.  Included in accounts
payable and accrued expenses in the accompanying consolidated balance sheets,
are amounts due to Gale at December 31, 2008 and 2007 aggregating $520 and
$523, respectively, attributable to the above-referenced costs.

Included in accounts payable and accrued expenses at December 31,
2008 and 2007 is $2,318 and $2,939, respectively, due to the members.  This amount does not bear interest and is
expected to be repaid in the normal course of business.

The Company paid interest expense of $5,308,
$7,377 and $4,309 to Gramercy Warehouse Funding I LLC, an affiliate of SL Green
Realty Corp, Inc., a related party, and $61, $216 and $0 to Mack-Cali
Realty, L.P., a related party, for the years ended December 31, 2008, 2007
and the period from May 9, 2006 (commencement of operations) through December 31,
2006, respectively (see Note 8).

17. RELATED PARTY TRANSACTIONS

        William L. Mack, Chairman of the Board of Directors of the Company ("W. Mack"), David S. Mack, a director of the Company, and Earle I. Mack, a former director of the Company ("E. Mack"), are the executive officers, directors and stockholders of a corporation that leases approximately 7,801 square feet at one of the Company's office properties, which is scheduled to expire in November 2011. The Company has recognized $258,000, $233,000 and $228,000 in revenue under this lease for the years ended December 31, 2008, 2007 and 2006, respectively, and had no accounts receivable from the corporation as of December 31, 2008 and 2007.

        The Company has conducted business with certain entities ("RMC Entity" or "RMC Entities"), whose principals include Timothy M. Jones, Robert F. Weinberg and Martin S. Berger, each of whom are affiliated with the Company as the former president of the Company, a current member of the Board of Directors and a former member of the Board of Directors of the Company, respectively. In connection with the Company's acquisition of 65 Class A properties from The Robert Martin Company ("Robert Martin") on January 31, 1997, as subsequently modified, the Company granted Robert Martin the right to designate one seat on the Company's Board of Directors ("RM Board Seat"), which right has since expired. The RM Board Seat had historically been shared between Robert F. Weinberg and Martin S. Berger, each of whom had agreed that, for so long as either of them serves on the Board of Directors, that such board seat would be rotated among Mr. Berger and Mr. Weinberg annually at the time of each annual meeting of stockholders. At the Company's 2003 annual meeting of stockholders, Mr. Berger was elected to the Board of Directors and he continued to share his board seat with Mr. Weinberg. At the Company's 2006 annual meeting of stockholders, Mr. Weinberg was elected to the Board of Directors and he resigned after the Company's 2007 annual meeting of stockholder and Mr. Berger was appointed to his board seat. At the Company's 2008 annual meeting of Stockholders, Mr. Berger resigned and Mr. Weinberg was appointed to his board seat. The business that the Company has conducted with RMC Entities was as follows:

(1)

The Company provides management, leasing and construction-related services to properties in which RMC Entities have an ownership interest. The Company recognized approximately $2.5 million, $2 million and $2 million in revenue from RMC Entities for the years ended December 31, 2008, 2007 and 2006, respectively. As of December 31, 2008 and 2007, respectively, the Company had $161,000 and $319,000 accounts receivable from RMC Entities.



(2)

An RMC Entity leased space at one of the Company's office properties for approximately 4,860 square feet, which, after a three-year renewal signed in October 2008, is scheduled to expire in October 2011. The Company has recognized $133,000, $132,000 and $119,000, in revenue under this lease for the years ended December 31, 2008, 2007 and 2006, respectively,

114

Table of Contents

MACK-CALI REALTY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

17. RELATED PARTY TRANSACTIONS (Continued)

and had no accounts receivable due from the RMC Entity, as of December 31, 2008 and 2007, respectively.

        Through June 2007, Mr. Berger held a 24 percent interest, acted as chairman and chief executive officer, Mr. Weinberg also held a 24 percent interest and was a director, and W. Mack held a nine percent interest and was a director of City and Suburban Federal Savings Bank and/or one of its affiliates, which leases 12,842 square feet of space at one of the Company's office properties, which was scheduled to expire in April 2013. In July 2007, Mssrs. Berger, Weinberg and Mack sold their interests and no longer are directors of City and Suburban Federal Savings Bank and/or its affiliates. The Company recognized $190,000, $404,000 and $396,000 in revenue under the leases for the years ended December 31, 2007, 2006 and 2005, respectively, and had no accounts receivable from the company as of December 31, 2007 and 2006.

        The Company provides administrative support and related services to John J. Cali, who served as the Chairman Emeritus and a Board member of the Company, for which it was reimbursed $153,000, $192,000 and $184,000 from Mr. Cali for the years ended December 31, 2008, 2007 and 2006, respectively. On June 27, 2005, an affiliate of Mr. Cali entered into a three-year lease for 1,825 square feet of space at one of the Company's office properties, which is scheduled to expire at the end of 2011. On September 18, 2006, an affiliate of Mr. Cali entered into another lease agreement for 806 additional square feet, in the same building, commencing on December 29, 2006, which is scheduled to expire at the end of 2011. The Company recognized approximately $67,000, $68,000 and $47,000 in total revenue under the leases for the year ended December 31, 2008, 2007 and 2006, respectively, and had no accounts receivable from the affiliate as of December 31, 2008 and 2007.

17. RELATED PARTY TRANSACTIONS

        William L. Mack, Chairman of the Board of Directors of the Company ("W. Mack"), David S. Mack, a director of the Company, and Earle I. Mack, a former director of the Company ("E. Mack"),
are the executive officers, directors and stockholders of a corporation that leases approximately 7,801 square feet at one of the Company's office properties, which is scheduled to expire in November
2011. The Company has recognized $258,000, $233,000 and $228,000 in revenue under this lease for the years ended December 31, 2008, 2007 and 2006, respectively, and had no accounts receivable
from the corporation as of December 31, 2008 and 2007.

        The
Company has conducted business with certain entities ("RMC Entity" or "RMC Entities"), whose principals include Timothy M. Jones, Robert F. Weinberg and Martin S. Berger, each of
whom are affiliated with the Company as the former president of the Company, a current member of the Board of Directors and a former member of the Board of Directors of the Company, respectively. In
connection with the Company's acquisition of 65 Class A properties from The Robert Martin Company ("Robert Martin") on January 31, 1997, as subsequently modified, the Company granted
Robert Martin the right to designate one seat on the Company's Board of Directors ("RM Board Seat"), which right has since expired. The RM Board Seat had historically been shared between Robert F.
Weinberg and Martin S. Berger, each of whom had agreed that, for so long as either of them serves on the Board of Directors, that such board seat would be rotated among Mr. Berger and
Mr. Weinberg annually at the time of each annual meeting of stockholders. At the Company's 2003 annual meeting of stockholders, Mr. Berger was elected to the Board of Directors and he
continued to share his board seat with Mr. Weinberg. At the Company's 2006 annual meeting of stockholders, Mr. Weinberg was elected to the Board of Directors and he resigned after the
Company's 2007 annual meeting of stockholder and Mr. Berger was appointed to his board seat. At the Company's 2008 annual meeting of Stockholders, Mr. Berger resigned and
Mr. Weinberg was appointed to his board seat. The business that the Company has conducted with RMC Entities was as follows:

(1)

The
Company provides management, leasing and construction-related services to properties in which RMC Entities have an ownership interest. The Company
recognized approximately $2.5 million, $2 million and $2 million in revenue from RMC Entities for the years ended December 31, 2008, 2007 and 2006, respectively. As of
December 31, 2008 and 2007, respectively, the Company had $161,000 and $319,000 accounts receivable from RMC Entities.




(2)

An
RMC Entity leased space at one of the Company's office properties for approximately 4,860 square feet, which, after a three-year renewal
signed in October 2008, is scheduled to expire in October 2011. The Company has recognized $133,000, $132,000 and $119,000, in revenue under this lease for the years ended December 31, 2008,
2007 and 2006, respectively,

114

HREF="#bG13001A_main_toc">Table of Contents

MACK-CALI REALTY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

17. RELATED PARTY TRANSACTIONS (Continued)

and
had no accounts receivable due from the RMC Entity, as of December 31, 2008 and 2007, respectively.

        Through
June 2007, Mr. Berger held a 24 percent interest, acted as chairman and chief executive officer, Mr. Weinberg also held a 24 percent interest and was
a director, and W. Mack held a nine percent interest and was a director of City and Suburban Federal Savings Bank and/or one of its affiliates, which leases 12,842 square feet of space at one of the
Company's office properties, which was scheduled to expire in April 2013. In July 2007, Mssrs. Berger, Weinberg and Mack sold their interests and no longer are directors of City and Suburban Federal
Savings Bank and/or its affiliates. The Company recognized $190,000, $404,000 and $396,000 in revenue under the leases for the years ended
December 31, 2007, 2006 and 2005, respectively, and had no accounts receivable from the company as of December 31, 2007 and 2006.

        The
Company provides administrative support and related services to John J. Cali, who served as the Chairman Emeritus and a Board member of the Company, for which it was reimbursed
$153,000, $192,000 and $184,000 from Mr. Cali for the years ended December 31, 2008, 2007 and 2006, respectively. On June 27, 2005, an affiliate of Mr. Cali entered into a
three-year lease for 1,825 square feet of space at one of the Company's office properties, which is scheduled to expire at the end of 2011. On September 18, 2006, an affiliate of
Mr. Cali entered into another lease agreement for 806 additional square feet, in the same building, commencing on December 29, 2006, which is scheduled to expire at the end of 2011. The
Company recognized approximately $67,000, $68,000 and $47,000 in total revenue under the leases for the year ended December 31, 2008, 2007 and 2006, respectively, and had no accounts receivable
from the affiliate as of December 31, 2008 and 2007.

18.       RELATED PARTY TRANSACTIONS

William L. Mack, Chairman of the Board of Directors of the Company (“W. Mack”), David S. Mack, a director of the Company, and Earle I. Mack, a former director of the Company (“E. Mack”), are the executive officers, directors and stockholders of a corporation that leases approximately 7,801 square feet at one of the Company’s office properties, which is scheduled to expire in November 2008. The Company has recognized $242, $227 and $218 in revenue under this lease for the years ended December 31, 2005, 2004 and 2003, respectively, and had no accounts receivable from the corporation as of December 31, 2005 and 2004.

The Company has conducted business with certain entities (“RMC Entity” or “RMC Entities”), whose principals include Timothy M. Jones, Martin S. Berger and Robert F. Weinberg, each of whom are affiliated with the Company as the former president of the Company, a current member of the Board of Directors and a former member of the Board of Directors of the Company, respectively. In connection with the Company’s acquisition of 65 Class A properties from The Robert Martin Company (“Robert Martin”) on January 31, 1997, as subsequently modified, the Company granted Robert Martin the right to designate one seat on the Company’s Board of Directors (“RM Board Seat”), which right has since expired. Robert Martin designated Martin S. Berger and Robert F. Weinberg to jointly share the RM Board Seat, as follows: Mr. Weinberg served as a member of the Board of Directors of the Company from 1997 until December 1, 1998, at which time Mr. Weinberg resigned and Mr. Berger was appointed to serve in such capacity. Mr. Berger served as a member of the Board of Directors of the Company from December 1, 1998 until March 6, 2001, at which time Mr. Berger resigned and Mr. Weinberg was appointed to serve in such capacity until the Company’s 2003 annual meeting of stockholders. The Company elected to nominate for re-election to its Board of Directors Mr. Berger at the Company’s 2003 annual meeting of stockholders. Mr. Berger was elected to the Board of Directors and Mr. Berger and Mr. Weinberg have agreed that the seat will be rotated among Mr. Berger and Mr. Weinberg annually at the time of each annual meeting of stockholders. Mr. Berger currently serves in this capacity. Upon the death of Mr. Berger or Mr. Weinberg, the surviving person shall solely fill the remainder of the term of the RM Board Seat. Such business was as follows:

(1)          The Company provides management, leasing and construction-related services to properties in which RMC Entities have an ownership interest. The Company recognized approximately $1,095, $1,996 and $1,831in revenue from RMC Entities for the years ended December 31, 2005, 2004 and 2003, respectively. As of December 31, 2005 and 2004, respectively, the Company had no accounts receivable from RMC Entities.

(2)          An RMC Entity leased space at one of the Company’s office properties for approximately 3,330 square feet, which, after a three-year renewal and expansion signed with the Company in 2005, now leases 4,860 square feet which is scheduled to expire in October 2008. The Company has recognized $89, $91 and $89, in revenue under this lease for the years ended December 31, 2005, 2004 and 2003, respectively, and had no accounts receivable due from the RMC Entity, as of December 31, 2005 and 2004.

Mr. Berger holds a 24 percent interest, acts as chairman and chief executive officer, Mr. Weinberg also holds a 24 percent interest and is a director, and W. Mack holds a nine percent interest and is a director of City and Suburban Federal Savings Bank and/or one of its affiliates, which leases a total of 15,879 square feet of space at two of the Company’s office properties, comprised of 3,037 square feet scheduled to expire in June 2008 and 12,842 square feet scheduled to expire in April 2013. As of February 13, 2004, City & Suburban assigned its lease with respect to 3,037 square feet of office space to an unaffiliated third party and has no continuing obligations under such lease. The Company recognized $396, $398 and $429 in revenue under the leases for the years ended December 31, 2005, 2004 and 2003, respectively, and had no accounts receivable from the company as of December 31, 2005 and 2004.

Vincent Tese, a director of the Company, is currently a director of Cablevision, Inc. who, through its affiliates, leases an aggregate of 58,885 square feet of office space, as well as has several telecom licensing agreements at the Company’s properties. The Company recognized approximately $1,594, $1,695 and $1,645 in total revenue from affiliates of Cablevision for the years ended December 31, 2005, 2004 and 2003, respectively, and had accounts receivable from the affiliates of none and $2, respectively, as of December 31, 2005 and 2004.

Vincent Tese is also currently a member of the Board of Directors of Bear, Stearns & Co. Inc. W. Mack had been a member of the Board of Bear Stearns until October 2004. Bear Stearns acted as underwriter on several of the Operating Partnership’s previously-completed public debt offerings.

104