Exhibit 10.99
FIRST AMENDMENT
TO THE
CONTRIBUTION AND EXCHANGE AGREEMENT
AMONG
THE MK CONTRIBUTORS,
THE MK ENTITIES,
THE PATRIOT CONTRIBUTORS,
THE PATRIOT ENTITIES,
PATRIOT AMERICAN MANAGMENT AND LEASING CORP.,
CALI REALTY, L.P.
AND
CALI REALTY CORPORATION
Dated as of: December 11, 1997
FIRST AMENDMENT
TO THE
CONTRIBUTION AND EXCHANGE AGREEMENT
THIS FIRST AMENDMENT TO THE CONTRIBUTION AND EXCHANGE AGREEMENT (this "
FIRST AMENDMENT") made as of this 11th day of December, 1997 by and among the MK
Contributors, the MK Entities, the Patriot Contributors, the Patriot Entities,
and Patriot American Management and Leasing Corporation ("XXX"); (the MK
Contributors and the Patriot Contributors shall collectively be referred to as
the "XXXX CONTRIBUTORS" and each individually a "XXXX CONTRIBUTOR"); (the MK
Entities and the Patriot Entities shall collectively be referred to as the "XXXX
ENTITIES" and each individually a "XXXX ENTITY"); (the Xxxx Contributors and the
Xxxx Entities shall collectively be referred to as "XXXX") and CALI REALTY,
L.P., a Delaware limited partnership ("CRLP") and CALI REALTY CORPORATION, a
Maryland corporation ("CALI").
W I T N E S S E T H
WHEREAS, XXXX, CRLP and Cali have entered into a certain Contribution and
Exchange Agreement dated September 18, 1997 (the "Original Agreement", which as
amended by this First Amendment, shall hereinafter be referred to as the
"AGREEMENT"), whereby XXXX has agreed (i) to contribute certain properties,
ground leases and/or one-hundred (100%) percent of its partnership, limited
liability company and/or other ownership interests in and to certain Xxxx
Entities to CRLP or, at CRLP's direction, to an entity (1) owned by (a) CRLP,
(b) Cali and/or (c) Cali's one-hundred (100%) percent owned subsidiaries, and
(ii) to cause certain key executives of XXXX to become part of the management of
Cali;
WHEREAS, XXXX, CRLP and Cali have agreed that the Original Agreement is to be
amended in accordance with the terms and conditions set forth herein;
WHEREAS, all capitalized terms used in this First Amendment and not otherwise
defined herein shall have the meaning ascribed to such terms in the Original
Agreement, as amended hereby.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and of other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound hereby, do hereby agree as follows:
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1. PROPERTY.
1.1 Based upon the results of due diligence undertaken to date and
other developments with respect to the Property,
(a) the property commonly known as Biltmore Plaza or Western
Plaza, located at 0000 X. 00xx, Xxxxxxx, Arizona, and which is referenced in
Schedule 1.1(a)(i) to the Original Agreement under the Patriot American
Properties as "No. 3" (the "BILTMORE PROPERTY"), is, pursuant to Section 3.4(b)
of the Original Agreement, hereby eliminated from the transaction and deemed a
Partner Property, subject to all of the provisions of the Original Agreement
applicable thereto, including but not limited to Section 3.4(d) of the Original
Agreement, whereby the Biltmore Property may become a Resolved Property and
thereby subject to the Put/Call Provisions;
(b) the property commonly known as Xxxx Xxxxxx Xxxx, located at
000 Xxxxxxxx Xxxxxx, Xxx Xxxxxxxxxx, Xxx Xxxxxx, and which is referenced in
Schedule 1.1(a)(i) to the Original Agreement under the Xxxx Properties (the
"XXXXXX XXXX PROPERTY"), is hereby deleted from Schedule 1.1(a)(ii) to the
Original Agreement to reflect that the Xxxxxx Hill Property is not subject to a
ground lease; and
(c) (i) unless a ruling is obtained prior to Closing from the
United States Internal Revenue Service (the "IRS") to the effect that Cali's
voting interest in a maintenance association constitutes "real estate assets"
within the meaning of Section 856(c)(6)(B) for purposes of Section 856(c)(5)(A)
of the Internal Revenue Code of 1986, as amended (the "CODE") and the Treasury
regulations promulgated thereunder, and that said voting interest will not be
considered "voting securities" for purposes of Section 856(c)(5)(B) of the Code,
then the property commonly known as Patriot Westage Center, located at 000 Xxxxx
Xxxx Xxxxx, Xxxxxxxx, Xxx Xxxx, and which is referenced in Schedule 1.1(a)(i) to
the Original Agreement under the Patriot American Properties as "No. 23" (the
"FISHKILL PROPERTY") shall be leased to CRLP pursuant to a ninety-nine (99) year
ground lease (the "FISHKILL GROUND LEASE"), in the form annexed hereto as
Exhibit 1.1(c). In the event that a favorable ruling with respect to the
foregoing issues is obtained from the IRS prior to the Closing Date, then this
Section 1.1(c) of this First Amendment shall be void AB INITIO, and of no
further force and effect, and the Fishkill Property shall be contributed to
CRLP, Cali or any of its subsidiaries or affiliates as originally contemplated
by the Original Agreement.
(ii) Section 1.3 of the Original Agreement is hereby amended by
deleting the words "at Closing" at the end of the first paragraph of Section 1.3
and adding in its place the words "or Ground Lease at Closing".
(iii) Section 5.3 of the Original Agreement is hereby amended by
adding the words "or Ground Lease" at the end of the first sentence.
(iv) The Fishkill Ground Lease is not intended, in any way, to
limit, curtail or restrict CRLP's rights under the Agreement. In the event of
any conflict between
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the terms and conditions of the Fishkill Ground Lease and the Agreement, the
terms and conditions of the Agreement shall govern.
2. EXCHANGE CONSIDERATION ADJUSTMENT.
2.1 To reflect, among other things, the elimination of the Biltmore
Property and certain increases in value including the additional value
attributable to increased management potential which Cali will be able to
realize upon the acquisition of the Exchange Property, the Exchange
Consideration shall be adjusted as follows, notwithstanding the terms and
provisions of Section 2.6(b) of the Agreement to the contrary:
(a) the total Exchange Consideration shall be one billion one
hundred forty-four million seventy-nine thousand and twelve dollars
($1,144,079,012.00), plus the Warrants, consisting of the following combination:
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TYPE OF CONSIDERATION AMOUNT DETAILS
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Cash: $468,958,000.00
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Common Units: $125,128,012.00 3,972,318 Units
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Series A Preferred Units: $27,132,153.00 27,132 Preferred Units
--------------------------------------------------------------------------------
Series B Preferred Units: $223,123,847.00 223,124 Preferred Units
--------------------------------------------------------------------------------
Mortgage Debt Amount: $299,737,000.00
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Warrants: 2,000,000 Warrants
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3. EARNOUT/CONTINGENT UNITS.
3.1 (a) The property commonly known as Xxxx Centre IV, located at
South 00 Xxxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxx, and which is referenced in Schedule
1.1(a)(i) to the Original Agreement under the Xxxx properties (the "XXXX CENTRE
IV PROPERTY"), the property commonly known as Xxxx Xxxxxxxxxx XX, located at 000
Xxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx, and which is referenced in Schedule
1.1(a)(i) to the Original Agreement under the Xxxx properties (the "WOODBRIDGE
PROPERTY"), the property commonly known as Xxxx Plymouth Meeting, located at
0000 Xxxxxxxx Xxxxxxx Xxxx, Xxxxxxxx Meeting, Pennsylvania, and which is
referenced in Schedule 1.1(a)(i) to the Original Agreement under the Xxxx
properties (the "PLYMOUTH MEETING PROPERTY"), the Xxxxxx Hill Property, the
property commonly known as Patriot Monticello, located at 0000 Xxxxxxxxxx,
Xxxxxx, Xxxxx, and which is referenced in Schedule 1.1(a)(i) to the Original
Agreement under the Patriot American properties as "No. 12" (the "MONTICELLO
PROPERTY"), and the property commonly known as the Xxxxxx Building, located at
000 Xxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx, and which is referenced in
Schedule 1.1(a)(i) to the Original Agreement under the Patriot American
properties as "No. 13" (the "PHELAN PROPERTY") currently have unleased square
footage (the "UNLEASED SPACE") in the respective amounts per Earnout Property
(defined below) shown in Column A on Schedule 3.1(a)
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annexed hereto. Hereinafter, the Xxxx Centre IV Property, the Woodbridge
Property, the Plymouth Meeting Property, and the Xxxxxx Hill Property shall be
cumulatively referred to as the "XXXX EARNOUT PROPERTIES", and the Monticello
Property and Xxxxxx Property shall be cumulatively referred to as the "PATRIOT
EARNOUT PROPERTIES"; cumulatively, the Xxxx Earnout Properties and the Patriot
Earnout Properties shall hereinafter be referred to as the "EARNOUT PROPERTIES"
or individually as an "EARNOUT PROPERTY". The aggregate assumed annual base
rent (the "ASSUMED UNLEASED RENT") attributed by the parties to the Unleased
Space in each Earnout Property is shown in Column C on Schedule 3.1(a) (annexed
hereto). It shall be the sole responsibility of XXXX to lease the Unleased
Space, and if the actual aggregate annual base rent from new leases for the
Unleased Space (the "EARNOUT RENT") entered into prior to Closing is less than
the Assumed Unleased Rent for any particular Earnout Property, then, at Closing,
Cali shall issue to XXXX either, or all of the following: (i) contingent Common
Units ("CONTINGENT COMMON UNITS") in place of the Common Units shown in Column D
of Schedule 3.1(a) (annexed hereto), otherwise allocable to the Unleased Space
for each Earnout Property, or (ii) contingent Series A Preferred Units
("CONTINGENT SERIES A PREFERRED UNITS") in place of the Series A Preferred Units
shown in Column G of Schedule 3.1(a) (annexed hereto) otherwise allocable to the
Unleased Space for each Earnout Property, or (iii) Contingent Series B Preferred
Units ("CONTINGENT SERIES B PREFERRED UNITS") in place of the Series B Preferred
Units shown in Column F of Schedule 3.1(a) (annexed hereto) otherwise allocable
to the Unleased Space for each Earnout Property, all in accordance with the
formula set forth on Schedule 3.1(a)-A (hereinafter, the Contingent Common
Units, the Contingent Series A Preferred Units and the Contingent Series B
Preferred Units shall collectively be referred to as the "CONTINGENT UNITS").
(b) For the purposes of this First Amendment, the Earnout Rent
shall be equal to the lesser of the annual base rent for the first year of any
lease for the Unleased Space, or the average annual base rent over the term of
said lease.
(c) (i) Rents from new leases for the Unleased Space within
each Earnout Property shall qualify as Earnout Rent for the purposes of
triggering the redemption of Contingent Units for Common Units and/or Preferred
Units, as applicable, if (i) the new lease satisfies the minimum criteria set
forth on Schedule 3.1(c) annexed hereto, (ii) the tenant has commenced paying
the first month's rent under said new lease, and (iii) the new lease term has
commenced (the "REDEMPTION STANDARD"). The redemption of Contingent Units for
Common Units and/or Preferred Units, as is applicable, shall automatically occur
once the Redemption Standard has been met (the "REDEMPTION DATE"), in such
amounts as earned and on a pro-rata basis amongst all of the Unit Holders and
Preferred Unit Holders holding Contingent Units.
(ii) Subject to the provisions of clause (c)(iii) below, the
Common or Preferred Units issued upon the redemption of Contingent Units
pursuant to this Section 3 shall be entitled to all of the rights attributable
to said units including, without limitation, voting and distribution rights, as
of the Redemption Date. In any given calendar quarter in which Contingent Units
are redeemed for Common Units or Preferred Units, as applicable, such Common
Units and Preferred Units shall receive distributions on a pro-rata basis based
upon the number of days contained in said calendar quarter between the
Redemption Date (including the Redemption Date) and the subsequent Partnership
Record Date.
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(iii) The Contingent Units shall be subject to the same
restrictions, set forth in the Original Agreement, as the Common Units and/or
Preferred Units into which they are redeemable, and notwithstanding that the
Contingent Units shall not be redeemed until after Closing, for purposes of
calculation of the Holding Period only, the Holding Period for the Common Units
and/or Preferred Units received pursuant to the redemption of the Contingent
Units shall be deemed to commence on the Closing Date.
3.2 (a) For the period commencing immediately after the Closing and
ending two (2) years after the Closing (the "INITIAL REDEMPTION PERIOD"), the
Contingent Units allocated to any particular Earnout Property shall be
redeemable for Common Units and/or Preferred Units, as applicable, in accordance
with this Section 3 and the formula set forth on Schedule 3.2(a) (annexed
hereto).
(b) If new leases for the balance of the Unleased Space are not
entered into on or before the last day of the Initial Redemption Period, Cali,
at its option, shall either (i) extend (the "EXTENSION OPTION") the Initial
Redemption Period for an additional two (2) years (the "EXTENDED REDEMPTION
PERIOD"), or (ii) unless the parties otherwise agree on the value for the
Unleased Space, cause the Unleased Space to be appraised and issue Common Units
and/or Preferred Units, as applicable, in redemption of Contingent Units based
upon the appraised value of the balance of the Unleased Space ("APPRAISED
VALUE") in accordance with the formula set forth on Schedule 3.2(b) (annexed
hereto).
(c) The appraisal shall be conducted, and the Appraised Value
agreed upon, in accordance with the arbitration procedures set forth in Schedule
3.2(c) (annexed hereto).
(d) In the event that Cali elects its Extension Option and there
is Unleased Space remaining at the end of the Extended Redemption Period, Cali
shall redeem Contingent Units and xxxxx XXXX Common Units and/or Preferred
Units, as applicable, at the end of the Extended Redemption Period in accordance
with Sections 3.2(b)(ii) and 3.2(c) of this First Amendment.
3.3 The Contingent Units, if any, issued at Closing shall be
represented by certificates duly issued by CRLP, but shall not be entitled to
any economic, voting or other rights under the OP Agreement unless and until
they are redeemed for Common Units and/or Preferred Units, as applicable,
pursuant to the terms and conditions of this First Amendment.
3.4 Notwithstanding the foregoing formulas, Earnout Rent shall be
determined separately for the Xxxx Earnout Properties and the Patriot Earnout
Properties (each such group of properties being hereinafter referred to as a
"PORTFOLIO"), and over-achievement in one Earnout Property within a Portfolio
may be used to counter-balance under-achievement in another Earnout Property
within that particular Portfolio. Over-achievement within one Portfolio will
not counterbalance under-achievement in the other Portfolio.
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3.5 Under no circumstances shall XXXX ever have the ability to redeem
Contingent Units for more than the maximum number of Common Units set forth in
Column D of Schedule 3.1(a) (annexed hereto) and/or Preferred Units set forth in
Column F or G of Schedule 3.1(a) (annexed hereto), on a Portfolio-by-Portfolio
basis.
3.6 With respect to the Patriot Earnout Properties, the Earnout Rent
will first be applied to the redemption of the Contingent Preferred Units (pro
rata between the Contingent Series A Preferred and the Contingent Series B
Preferred), and then, after all of the Contingent Preferred Units have been
redeemed, to the redemption of the Contingent Common Units.
4. AMENDMENTS TO SCHEDULES.
4.1 The following Schedules (the "AMENDED SCHEDULES") to the Original
Agreement are hereby amended as set forth in Schedule 4.1 (annexed hereto) to
reflect the adjustments which are required in order to conform said Schedules to
the matters agreed upon in this First Amendment:
AMENDED SCHEDULES CONTENT OF SCHEDULE
----------------- -------------------
Schedule 2.1 Allocated Property Values
Schedule 7.1(m) Threshold Amount
Schedule 5.1(f) Pro Forma Rent Roll
Schedule 26.2(v) Xxxx Significant Interest Attribution Rules
The Amended Schedules annexed hereto as Schedule 4.1 hereby
replace and supersede the Schedules bearing those numbers annexed to the
Original Agreement, which are hereby deemed null and void.
4.2 The parties acknowledge that the Threshold Amount, as set forth
in the amended Schedule 7.1(m) (which is annexed hereto as part of Schedule
4.1), has been met.
5. CONTINGENT LIABILITIES.
5.1 The Xxxx Contributors acknowledge that they are, and shall remain
after Closing, responsible for all obligations related to, arising out of or
resulting from that certain agreement as amended (the "TRIWEST AGREEMENT")
between TriWest Associates, L.P. ("TRIWEST"), Xxxxxxx X. Xxxx, Xxxxxxx Xxxx,
Xxxx X. Xxxxxxx and Xxxx X. Xxxxxxxx (collectively, with TriWest, the "TRIWEST
GROUP") and Western Pacific Associates, L.P. ("WPA") dated December 3, 1992 with
respect to the property commonly known as TriWest Plaza, located at 0000 XXX
Xxxxxxx, Xxxxxx, Xxxxx, and which is referenced in Schedule 1.1(a)(i) to the
Original Agreement under the Patriot American Properties as "No. 22" (the
"TRIWEST PROPERTY"), and recorded at Book 92253, page 9493 (the "TRIWEST
RECORDING") in the Dallas
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County Clerk's Office on December 31, 1992, as amended and restated by that
certain Amended and Restated Agreement by and among the TriWest Group, WPA and
Western Pacific Consulting, Inc. ("WPC"), as assignee of a part of the interest
of WPA, and TriWest Land Investors (the "TRIWEST INVESTORS", and together with
the TriWest Group, WPA and WPC, hereinafter being collectively referred to as
the "TRIWEST PARTIES") dated March 18, 1994, as amended by that certain First
Amendment to Amended and Restated Agreement by and among the TriWest Parties
dated July 31, 1995 and that certain Second Amendment to Amended and Restated
Agreement by and among the TriWest Parties dated December 22, 1995.
5.2 If the TriWest Recording has not been released of record as of
the Closing, the parties hereby agree that the TriWest Recording shall
thereafter be released by the earlier to occur of (i) sixty (60) days after
written notice delivered to the Xxxx Contributors of CRLP's reasonable
determination that the TriWest Recording is materially adversely impacting
Cali's efforts to obtain an unsecured debt rating, or CRLP's ability to finance
either the TriWest Property or any other property or group of properties which
CRLP, Cali or any of its subsidiaries or affiliates shall have an interest in,
or (ii) December 31, 2001, (the "RELEASE DATE").
5.3 In the event that the TriWest Recording shall not be released by
the Release Date, then XXXX hereby authorizes CRLP to (i) satisfy and obtain the
release of the TriWest Recording at the Xxxx Contributors' sole cost and expense
(including but not limited to CRLP's reasonable attorney's fees and expenses),
plus the maximum permissible interest rate applicable on the Release Date,
effective from the Release Date and payable through the date of reimbursement to
CRLP or Cali, and (ii) pursue all of CRLP's rights and remedies which may be
available in both law and equity. The remedies afforded CRLP in this Section
5.3 are cumulative, and CRLP's pursuit of either (i) or (ii) above shall in no
way preclude CRLP's pursuit of the other. The Xxxx Contributors' obligations
with respect to this Section 5 shall not be subject to the one (1) year survival
period in Section 5.3 of the Agreement, the liability "floor" of $1.5 million or
the liability "ceiling" of $50 million in Section 5.3 of the Agreement.
6. PREFERRED UNITS.
6.1 The Certificate of Designation of Series A Preferred Units and
Certificate of Designation of Series B Preferred Units, annexed to the Original
Agreement as Exhibits 2.4(a)(i) and 2.4(a)(ii), respectively, are hereby amended
(the "AMENDED CERTIFICATES") in the form annexed hereto in Schedule 6.1 to
reflect, among other things, that the calculation of the number of issued and
outstanding shares of Common Stock and Common Units used in determining Cali's
ability to issue Qualifying Preferred Units (as defined in each respective
Certificate of Designation) without the consent of holders of the Preferred
Units includes the aggregate value of the liquidation preference of any
non-convertible preferred stock then outstanding.
6.2 XXXX, at its option, may cause Cali to issue at Closing to XXXX
or its affiliates, an amount of Preferred Units which would otherwise be
designated as Series A Preferred Units as Series B Preferred Units.
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6.3 The Amended Certificates annexed hereto as Schedule 6.1 hereby
replace and supersede Exhibits 2.4(a)(i) and 2.4(a)(ii) annexed to the Original
Agreement, which are hereby deemed null and void.
7. FORM OF ASSIGNMENT OF CONTRIBUTED INTEREST.
7.1 Exhibit 10.2(b)(i) to the Original Agreement, form of Assignment
of Contributed Interest, is hereby deleted in its entirety, and hereby replaced
by a new Exhibit 10.2(b)(i) annexed hereto as Schedule 7.1.
8. AMENDMENT TO OP AGREEMENT.
8.1 The parties hereto hereby agree to execute and deliver, as of
Closing, the Second Amended and Restated Agreement of Limited Partnership of
Xxxx-Xxxx Realty, L.P. in the form annexed hereto as Schedule 8.1.
9. XXXX INDEMNITY.
9.1 The MK Contributors hereby agree to indemnify CRLP and Cali for
certain obligations and liabilities more particularly set forth in the
Indemnification Agreement (the "XXXX INDEMNITY") annexed hereto as Schedule 9.1,
which shall be executed as of Closing.
10. CALI INDEMNITY.
10.1 CRLP and Cali hereby agree to indemnify the MK Contributors for
certain obligations and liabilities more particularly set forth in the Indemnity
Agreement (the "CALI INDEMNITY") annexed hereto as Schedule 10.1, which shall be
executed as of Closing.
11. RESTRICTIONS ON THE SALE OF PROPERTY.
11.1 Section 27.1 of the Original Agreement is hereby amended by
deleting the word "or" immediately preceding "(iv)" in the first sentence of
Section 27.1 and by adding the following at the end of the first sentence of
Section 27.1 the following:
"or (v) in connection with a sale or disposition of any Exchange Property which
is subject to an option to purchase by a Tenant pursuant to a Lease."
12. REPRESENTATIONS AND WARRANTIES OF XXXX.
12.1 Section 5.1 of the Original Agreement is hereby amended by adding
the following:
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"(hh) XXXX hereby represents and warrants that it has entered into an
unconditional binding agreement to acquire one-hundred percent (100%) of
the third-party partnership interest of Xxxxx Creek, Inc., UBSCO
Corporation, Carborundum J.V., and Portfolio U. Holdings Corporation (the
"FL PARTNERS") with respect to the Exchange Properties known as Xxxx Centre
I, Xxxx Centre II, Xxxx Willowbrook and Xxxx Saddle River. The FL
Partners' partnership interest shall be acquired by XXXX at Closing and
simultaneously contributed by XXXX to CRLP by Assignment of Contributed
Interest."
12.2 Section 5.1(y)(i) of the Original Agreement is hereby amended by
substituting for the word "property" the words "Real Property".
13. CONDITIONS TO CLOSING.
13.1 Section 12.1 of the Original Agreement is hereby amended by
adding the following:
"(k) CRLP and Cali shall have executed and delivered to XXXX the Cali
Indemnity."
13.2 Section 12.1 of the Original Agreement is hereby amended by
adding the following:
"(l) XXXX shall have executed and delivered to CRLP and Cali the Xxxx
Indemnity."
13.3 Section 12.1 of the Original Agreement is hereby amended by
adding the following:
"(m) XXXX shall have delivered to CRLP an unconditional commitment letter
(provided, however, the commitment letter may contain the condition that
the definitive documents evidencing the NY Life Restructuring (defined
below) are to be mutually agreed upon by New York Life, the MK Contributors
and Xxxx-Xxxx Realty, L.P.) executed by New York Life with regard to the
restructuring (the "NY LIFE RESTRUCTURING") of the mortgages held by New
York Life (the "NEW YORK LIFE MORTGAGES") on the Exchange Properties
commonly known as Xxxx Xxxxxxxxxxx I and Xxxx Xxxxxxxxxx XX (shown as No.'s
11 and 12 on the Debt Schedule). The parties hereto hereby agree that the
executed term sheets annexed hereto as Schedule 13.3
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(the "NYL Term Sheets) fully satisfy the requirements of this Section
13.3."
14. CLOSING.
14.1 Section 10.2(c) of the Original Agreement is hereby amended by
revising clauses (xvii) and (xxi) to be read as follows:
"(xvii) Letter of direction regarding the issuance of the Xxxx Securities
to the Xxxx Contributors from XXXX.", and
"(xxi) Opinions of counsel from Battle Xxxxxx, LLP, Xxxxxxxxx and
Xxxxxxxxx, P.C., and Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P. in forms to
be mutually agreed upon by the parties."
15. CORPORATE NAME CHANGE; CHANGE IN MANAGEMENT; OTHER ARRANGEMENTS; TRANSFER
SECURITIES; NUMBER OF COMMON UNITS.
15.1 The fourth and fifth sentences of Section 26.2(i) of the Original
Agreement are hereby deleted in their entirety and replaced by the following:
"If any Xxxx Board Member shall withdraw for any reason, Xxxxxxx Xxxx
or if Xxxxxxx Xxxx is not a Board Member, Xxxxx Xxxx, or if Xxxxx Xxxx
is not a Board Member, Xxxxxxxx Xxxxx (or their respective successors)
shall have the right to designate such withdrawing director's
replacement on behalf of the Xxxx Group. Xxxxxxx Xxxx or, if Xxxxxxx
Xxxx is not a Board Member, Xxxxx Xxxx, or if Xxxxx Xxxx is not a
Board member, Xxxxxxxx Xxxxx (or their respective successors), shall
have the right to renominate such three (3) members of the Board or
replacements selected on behalf of the Xxxx Group for re-election to
the Board when their terms expire so long as Xxxx'x Significant
Interest (as defined below) is maintained by the Xxxx Group."
15.2 The sixth, seventh and eight sentences of Section 26.2(i) of the
Original Agreement are hereby deleted in their entirety and replaced by the
following:
"Three (3) such members of the Board shall be designated by Cali,
two(2) of which shall initially be Xxxxxx X. Xxxx and Xxxx X. Xxxx
(the "CALI BOARD MEMBERS"), and one of which shall initially be Xxxxxx
Xxxxxxxx (the "RM BOARD MEMBER"). Xxxx X. Xxxx shall remain Chairman
of the Board. It is understood that if any Cali Board Member shall
withdraw for any reason, the remaining Cali
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Board Member (or, his respective successor) shall have the right to
designate such withdrawing director's replacement. If the RM Board
Member shall withdraw for any reason, Xxxxxx Xxxxxxxx or Xxxxxx Xxxxxx
(or, their respective successor) shall have the right to designate
such withdrawing director's replacement."
15.3 (a) The first sentence of Section 26.2(vi) of the Original
Agreement is hereby deleted in its entirety and replaced by the following:
"So long as the Xxxx Group retains Xxxx'x Significant Interest, the
Cali Board Members and the RM Board Member shall support the
renomination of Xxxxxxx Xxxx, Xxxxx Xxxx and Xxxxxxxx Xxxxx (and any
successor appointed by the Xxxx Board Members) for successive
three-year terms upon the expiration of each three-year term."
(b) The parties hereto hereby agree that if either Xxxx X. Xxxx,
Xxxxxx X. Xxxx or Xxxxxx Xxxxxxxx, or any of them, die, voluntarily resign or
otherwise become unable to serve so long as the Xxxx Group retains the Xxxx
Significant Interest, the Xxxx Board Members (to the extent any remain) shall
support the nomination of the individual selected by the survivors of Xxxx X.
Xxxx, Xxxxxx X. Xxxx or Xxxxxx Xxxxxxxx to fill the vacancy created by such
death, resignation or inability to serve.
15.4 The word "Cali" in the second sentence of Section 26.2(vi) of the
Original Agreement is hereby deleted and replaced with the words "the Cali Board
Members and the RM Board Member".
15.5 Section 18.5(ii) of the Original Agreement is hereby amended to
add the following sentence at the end thereof:
"Any conflict between the terms of Section 13.1 of the OP Agreement
and this Agreement as amended shall be resolved in favor of this
Agreement as this Agreement may be amended."
15.6 After the words "permitted by Section" in the first line of
Section 18.6 of the Agreement, the words "18.4 (ii) and" are hereby added.
15.7 Section 6.1(1)(ii) of the Original Agreement is hereby deleted
and replaced with the following:
"As of the second business day immediately preceding the date hereof
the issued and outstanding Units held by limited partners of
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CRLP consist of 4,090,170 Common Units and no Preferred Units."
16. ENVIRONMENTAL REMEDIATION AGREEMENT.
16.1 Pursuant to the terms and conditions of Section 28 of the
Original Agreement, CRLP and XXXX have agreed, as a result of certain
environmental conditions that have been discovered at certain Real Property,
which are not material adverse environmental conditions (as such term is
described in Section 3.4(a) of the Original Agreement), to correct,
investigate, remediate and/or clean up said environmental conditions in
accordance with the terms, conditions and provisions of that certain agreement
by and among XXXX, the MK Contributors, CRLP and Cali which is annexed hereto as
Schedule 16.1, and which is hereby deemed binding and effective upon XXXX, the
MK Contributors, CRLP and Cali by the signing of this First Amendment.
17. MORTGAGES.
17.1 In accordance with Section 2.2 of the Original Agreement, the
parties hereto have agreed on which Mortgages CRLP shall be taking title subject
to (the "ASSUMED MORTGAGES"). The Assumed Mortgages, and their applicable
terms, are more specifically set forth in Schedule 17.1, annexed hereto (the
"DEBT SCHEDULE").
17.2 In order to induce CRLP and Cali to take title subject to the
Assumed Mortgage, XXXX hereby warrants and represents that the Debt Schedule is
true, complete and correct in all material respects. Notwithstanding the
foregoing, to the extent that a Mortgagee shall certify in its estoppel
certificate as to any matters which are contained in the Debt Schedule, then
XXXX'x representation and warranty made in this Section 17.2 as to such matters
shall terminate.
18. METHOD OF CONTRIBUTION OF PROPERTY.
18.1 Section 1.3 of the Original Agreement is hereby amended to
designate said section as subsection "(a)" and adding a new subsection "(b)" as
follows:
"(b) In the event XXXX desires to effectuate the Agreement by having
the Xxxx Entities contribute their Property to CRLP, then to the
extent such transfer is effectuated as provided for in Section 1.3(a),
such transfers shall be treated for all purposes as a contribution by
the Xxxx Entities of their respective Property and a distribution by
the Xxxx Entity of the Exchange Consideration it receives, from CRLP,
to its respective partners or members."
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19. ESTOPPELS.
19.1 The Patriot Contributors hereby acknowledge that certain Estoppel
Certificates relating to the Patriot Entities required to be delivered to CRLP
and Cali at Closing pursuant to Section 9 of the Original Agreement contain
errors with regard to Tenants' options to acquire all or any portion of the
Property.
19.2 The Patriot Contributors hereby represent and warrant that except
as set forth in Schedule 5.1 to the Original Agreement, no Tenant, including but
not limited to Tetco, Inc., a tenant in the Exchange Property commonly referred
to as Tetco Towers, has any option to acquire all or any portion of the
Property.
19.3 The second sentence of Section 5.3 of the Original Agreement
shall not apply to Section 19.2 of this First Amendment unless and until the
Patriot Contributors deliver to Cali or CRLP a revised Estoppel Certificate
which corrects the errors referred to in Section 19.1 of this First Amendment.
20. POST-CLOSING ITEMS.
20.1 (a) The MK Contributors hereby covenant and agree that no later
than thirty (30) days after Closing, the second Mortgages held by The Mitsubishi
Trust and Banking Corporation ("Mitsubishi") relating to the Exchange Properties
commonly known as Xxxxxx Plaza I and Xxxxxx Plaza II (shown as No.'s 22 and 23
on the Debt Schedule) shall be completely released, and, as a result, that with
regard to the first Mortgages on said properties, that the applicable letters of
credit are extinguished, and the escrow requirements are removed.
(b) The MK Contributors hereby covenant and agree that no later
than thirty (30) days after Closing the MK Contributors, at their sole cost and
expense, shall obtain from Mitsubishi executed and acknowledged certificates of
mortgage reduction, and file said certificates in the applicable recording
offices against the Exchange Properties commonly known as Xxxxxx Plaza I and
Xxxxxx Plaza II, to reflect the payments in the approximate amounts of: (i)
twenty million four-hundred and five thousand dollors ($20,405,000.00) applied
towards the Xxxxxx I Mortgage, and (ii) twenty-four million fifty-thousand
dollars ($24,050,000.00) applied towards the Kemble II Mortgage, which payments
were made at Closing in partial satisfaction of the first Mortgages (shown as
No.'s 22 and 23 on the Debt Schedule) held by Mitsubishi on said Exchange
Properties.
20.2 The parties hereto hereby agree, that (i) Xxxx-Xxxx shall be
responsible for satisfying that portion of the NY Life Restructuring
attributable to the "Proposed Reduction", as that term is used in the NYL Term
Sheets, in the amount of eight million five-hundred and eight thousand
two-hundred and eighty-seven dollars ($8,508,287.00), and nothing else, and (ii)
the MK Contributors shall be responsible for satisfying all of the other terms
and conditions of the NY Life Restructuring contained in the NYL Term Sheets,
including, but not limited to, satisfying all pre-payment penalties, interest
rate buy-down fees and legal fees. The parties hereto hereby agree and
acknowledge that any rebate, credit, deduction, offset or similar
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consideration paid or given to the borrower under the NY Life Mortgages as a
result of the retroactive interest rate deduction shall accrue entirely to the
benefit of Xxxx-Xxxx.
20.3 With respect to the property commonly known as Xxxx Glendale or
Honeywell, located at 0000 Xxxx Xxxxxx Xxxx., Xxxxxxxx, XX, and which is
referenced in Schedule 1.1(a)(i) to the Original Agreement under the Xxxx
Properties ("HONEYWELL"), the parties hereto hereby acknowledge (i) Xxxx
Glendale Limited Partnership, the fee owner of Honeywell, has recently acquired
fee ownership of an adjacent parcel, described in the preliminary Ticor Title
Insurance Company title report annexed hereto as EXHIBIT 20.3-A (the "PARKING
PARCEL TITLE POLICY") order number 159717819/PL/VS/md as Xxx 0, XXXXXX,
according to Book 331 of Maps, Page 44, records of Maricopa County, Arizona,
which is to be used as a parking lot (the "PARKING PARCEL"), and (ii) that CRLP
and Cali have neither inspected nor otherwise investigated the environmental
condition or state of title on the Parking Parcel. Notwithstanding (ii) above,
CRLP shall take fee ownership of the Parking Parcel at Closing in conjunction
with the assignment of partnership interest of Xxxx Glendale Limited Partnership
to CRLP, provided the MK Contributors shall indemnify and hold CRLP and Cali
harmless from any and all cost and expenses (including, but not limited to,
reasonable attorneys' fees and disbursements) in the event that (A) any material
adverse environmental condition is found to exist on the Parking Parcel other
than as shown in the Phase I Environmental Report, written by Dames and Xxxxx,
and dated September 18, 1997, a copy of which is annexed hereto as EXHIBIT
20.3-B, or (B) any defect in title exists which is not reflected in the Parking
Parcel Title Policy. In addition, in the event of (A) or (B) immediately above,
Xxxx Glendale Limited Partnership, CRLP, or its affiliates, successors and
assigns, shall have the right, at its sole discretion, to convey by deed
transfer to the MK Contributors or their designee, the Parking Parcel, and the
MK Contributors hereby agree to accept such transfer (and pay all costs and
expenses associated therewith, including, but not limited to, all transfer taxes
and recording fees) and thereafter lease back the Parking Parcel to Xxxx
Glendale Limited Partnership, CRLP, or its affiliates, successors and assigns,
at a rate of ten dollars per ($10.00) year.
20.4 The MK Contributors, CRLP and Cali hereby agree that in the event
of any dispute or discrepancies as to the post-Closing items set forth in this
First Amendment shall be submitted for arbitration in accordance with the
provisions set forth in Schedule 3.2(c) annexed hereto.
20.5 The parties hereto hereby agree to proceed in good faith after
Closing to rectify and correct any errors or mistakes with regard to the
adjustments made at Closing pursuant to Section 11 of the Original Agreement,
including, without limitation, the cost of all tenant improvement obligations
and leasing commissions, any receivables and payables, Additional Rents and
Taxes.
21. TENANT IMPROVEMENT, RESTORATION AND OTHER OBLIGATIONS.
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21.1 (a) Schedules 5.1(m-l) and (m-2) to the Original Agreement are
hereby deleted in their entirety, and replaced with new versions of Schedules
5.1(m-1) and (m-2) annexed hereto as SCHEDULE 20.1-A. In addition, a new
Schedule 5.1(m-3) is hereby added to the Original Agreement, annexed hereto
as Schedule 20.1-B.
(b) Section 11.6 of the Original Agreement is hereby deleted in
its entirety, and replaced with the following:
"At the Closing, CRLP shall be credited with those unpaid leasing
commissions, tenant improvement obligations and other capital
expenditures related to Exchange Property and deemed "Total Patriot
Responsibility" on Schedule 5.1(m-1) annexed hereto, in the amount of
$1,295,059.67 (the "PATRIOT IMPROVEMENT OBLIGATIONS COST"), and which
are the obligations of XXXX. Those unpaid leasing commissions, tenant
improvement obligations and other capital expenditures related to
Exchange Property and deemed "Total Xxxx Responsibility" on Schedule
5.1(m-1), in the amount of $5,713,234.62 (the "XXXX IMPROVEMENT
OBLIGATIONS COST"), and which are the obligations of XXXX shall be
assumed by CRLP subject to the terms and conditions of Section 13 of
this Agreement."
(c) The last sentence of Section 13.1 is hereby deleted in its
entirety and replaced with the following:
"CRLP shall receive a credit at Closing pursuant to Section 11.6
of this Agreement for the Patriot Improvement Obligations Cost, and
the performance and/or satisfaction of the leasing commissions,
tenant improvement obligations, capital expenditures and other
costs related to the Patriot Improvement Obligations Cost shall be
the post-closing obligation of Xxxx-Xxxx. CRLP shall not receive a
credit at Closing for the Xxxx Improvement Obligations Cost,
nonetheless, except as set forth herein, the performance and/or
satisfaction of the leasing commissions, tenant improvement
obligations, capital expenditures and other costs related to the
Xxxx Improvement Obligations Cost shall be the post-closing
obligation of Xxxx-Xxxx; provided, however, that in consideration
for CRLP agreeing to forgo a credit at Closing for the Xxxx
Improvement Obligations Cost, the MK Contributors hereby agree to (i)
pay directly $2,153,538.97 of such Xxxx Improvement Obligations
Cost as set forth on Schedule 5.1(m-3) on or before March 15, 1998,
and (ii) repay to CRLP after Closing, the remaining $3,559,695.65
of such Xxxx Improvement Obligations Cost, in thirty-six (36) equal
monthly installments (due and payable on the first day of each
month, commencing January 1, 1998), and which shall bear interest
at a rate of seven percent (7%) per annum on the remaining balance.
Notwithstanding the foregoing, in no event shall CRLP be obligated
to expend, at any given time, in order to satisfy the Xxxx
Improvement Obligations Cost, more than the MK
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Contributors have, up to that time, re-paid to CRLP, excluding
interest. In the event CRLP expends more than the MK Contributors
have re-paid, at any given time, then the MK Contributors shall, upon
ten (10) days' notice remit to CRLP that amount (not to exceed the
unpaid balance of the Xxxx Improvement Obligations Cost) which CRLP
has paid in excess of the amount received from the MK Contributors and
the amount of each monthly payment to be made thereafter pursuant to
this Section 21(c) shall be re-calculated in accordance with the
formula set forth on SCHEDULE 21.1(C)."
21.2 XXXX and the MK Contributors hereby acknowledge and agree that
they are responsible for completing the restoration and subsequent build-out of
the Xxxxxx Property, in the amounts of (i) five million dollars ($5,000,000.00)
for the restoration, and (ii) two million five-hundred thousand dollars
($2,500,000.00) for the subsequent build-outs. XXXX and the MK Contributors
hereby agree that it shall promptly complete said restoration and build-outs in
a manner conforming to other Class A office buildings in San Francisco,
California and otherwise acceptable to Xxxx-Xxxx.
22. MISCELLANEOUS.
22.1 This First Amendment constitutes the entire agreement between the
parties and incorporates and supersedes all prior negotiations and discussions
between the parties, and, except as modified herein, the Original Agreement
shall remain in full force and effect. This First Amendment shall be binding
upon and inure solely to the benefit of each party hereto and their successors
and assigns, and nothing in the First Amendment express or implied, is intended
to confer upon any other person any rights or remedies of any nature whatsoever
under or by reason of this First Amendment.
22.2 This First Amendment cannot be amended, waived or terminated
orally, but only by an agreement in writing signed by the party to be charged.
22.3 This First Amendment shall be interpreted and governed by the
laws of the State of New York and shall be binding upon the parties hereto and
their respective successors and assigns.
22.4 The caption headings in this First Amendment are for convenience
only and are not intended to be part of this First Amendment and shall not be
construed to modify, explain or alter any of the terms, covenants or conditions
herein contained.
22.5 If any term, covenant or condition of this First Amendment is
held to be invalid, illegal or unenforceable in any respect, this First
Amendment shall be construed without such provision.
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22.6 This First Amendment shall not be effective or binding until such
time as it has been executed and delivered by all parties hereto. This First
Amendment may be executed by the parties hereto in counterparts, all of which
together shall constitute a single agreement.
22.7 All of the Schedules and Exhibits annexed hereto are, by this
reference, incorporated herein.
22.8 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.
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