Exhibit 10.170
FIRST AMENDMENT TO CONTRIBUTION
AND EXCHANGE AGREEMENT
This FIRST AMENDMENT TO CONTRIBUTION AND EXCHANGE AGREEMENT (the "FIRST
AMENDMENT") is made this 8th day of June, 1998, by and between Pacifica Holding
Company, a Colorado corporation ("PACIFICA") and Apollo Real Estate Investment
Fund II, L.P., a Delaware limited partnership ("APOLLO RE II"; together with
Pacifica, the "CONTRIBUTORS," and each individually the "CONTRIBUTOR"),
Pacifica Holding Company, LLC, a Colorado limited liability corporation,
Xxxx-Xxxx Realty, L.P., a Delaware limited partnership ("MCRLP") and Xxxx-Xxxx
Realty Corporation, a Maryland corporation ("XXXX-XXXX").
RECITALS
A. The parties desire to amend the Contribution and Exchange Agreement dated
March 25, 1998 (as amended hereby, the "AGREEMENT") to provide for, among other
things, the fact that the Property known as "Pacifica Tech at Briargate"
("BRIARGATE") does not have an occupancy level sufficient for its value to
exceed the construction loan thereon.
B. The parties further desire to equitably adjust the consideration paid,
following completion of all transactions to effect proper apportionment of value
to all of the Earnout Properties.
C. The parties have determined that the transactions contemplated hereby are
in their respective best interests.
NOW THEREFORE, in consideration of $10.00, the mutual promises hereinafter
set forth and other good and valuable consideration, the mutual receipt and
legal sufficiency which are hereby acknowledged, the parties hereto, intending
to be legally bound, do hereby agree as follows. Capitalized terms not defined
herein shall have the meaning set forth in the Agreement.
1. BRIARGATE. Prior to Closing, Briargate shall be conveyed to
Apollo/Pacifica Tech at Briargate, LLC, a Delaware limited liability company
("TECH LLC"), which is solely owned by the Contributors. Following such
conveyance and closing of all Properties other than Briargate, as used in the
Agreement, the term "CLOSING" and "CLOSING DATE," solely with respect to
Briargate, shall be deemed to apply to the date and time when the Contributors
assign to MCRLP all of their interests in Tech LLC. The Closing Date for all of
the Earnout Properties except Briargate shall occur simultaneous with the date
of this First Amendment. The NOI for Briargate shall not be included in the
calculation of the Earnout Consideration paid on the Closing Date for all of the
Earnout Properties except Briargate. The Closing of Briargate shall occur on a
date five business days following delivery of written notice from Contributors
to MCRLP of the date on which the occupancy level of Briargate is 55% and all
other conditions of the Agreement relating to leasing requirements necessary to
attain a valid occupancy level, including, without limitation, the obligation to
deliver tenant estoppel certificates, have been satisfied by Contributors.
1. PAYMENT OF EARNOUT CONSIDERATION AND EARNOUT ADDITIONAL
CONSIDERATION - BOMBARDIER REPAYMENT OBLIGATION. Due to the fact that Earnout
Consideration and Earnout Additional Consideration is calculated on the basis of
the average total occupancy of the Earnout Properties, and thus more
consideration will be paid for certain Properties than others, because the
occupancy level may be higher at the time Earnout Additional Consideration is
paid or because certain Properties' rental rates are higher or lower than
others, the parties agree to the following: upon the earlier of (i) expiration
of the Earnout Period, (ii) the date when the average occupancy level of the
Earnout Properties equals 95%, (iii) the payment by MCRLP of total Earnout
Consideration and Earnout Additional Consideration equal to $57,000,000.00, or
(iv) the funding by MCRLP of 95% of the projected aggregate value for the
Earnout Properties following initial lease-up, the parties shall adjust the
Earnout Consideration and the Earnout Additional Consideration in order to
reconcile all Earnout Consideration and Earnout Additional Consideration paid so
that the total consideration for each of the Earnout Properties is based on the
NOI for each Earnout Property at a 95% occupancy level (the "ADJUSTMENT"),
subject to other prorations, credits and charges set forth in the Agreement. In
addition to the other requirements set forth in the Agreement, no Earnout
Additional Consideration shall be paid to Contributors until (A) as to the
tenants listed on Exhibit A, estoppels are delivered to MCRLP showing that, (i)
all tenant improvements that Apollo is obligated to complete (including any
punch list items in excess of $1,000 in the aggregate) have been completed and
all contributions by Apollo with respect to tenant improvements have been paid
as required under the applicable lease, (ii) all rent is being paid on a current
basis, and (iii) no rent has been paid more than one month in advance
(hereinafter an "EARNOUT ESTOPPEL"), and (B) as to any future tenant for whom
Earnout Additional Consideration is requested, estoppels are delivered to MCRLP
substantially in the form attached to the Agreement as Exhibit 9.1.
If Bombardier, Inc. defaults under its lease beyond any applicable grace or
cure period or terminates its lease due to a default by Contributors of their
obligation to complete tenant improvements in accordance with the Bombardier,
Inc. lease, then the Contributors shall repay to MCRLP any Earnout Consideration
paid for the Bombardier, Inc. lease (the "REPAYMENT OBLIGATION"); provided,
however, that the Repayment Obligation shall automatically terminate and expire
if, prior to the date on which the Repayment Obligation would have otherwise
arisen, either: (i) Bombardier, Inc. has delivered to MCRLP an Earnout Estoppel
with respect to Phase II stating also that the current rent is not being
subsidized and that it has accepted possession of the premises (but it need not
have taken physical occupancy thereof) and that tenant finish improvements for
the premises have been completed as required under its lease, or (ii) if the
tenant finish improvements have not been completed, and Bombardier Inc. has paid
full rent for the entire calendar year 1999 that is not subsidized by
Contributors directly or indirectly (as evidenced by an estoppel certificate
from Bombardier, Inc. reaffirming the lease and confirming the absence of any
rent subsidy by Contributors) and Contributors have paid to MCRLP the amount
necessary to complete the tenant finish improvements as required under the
Bombardier, Inc. lease. If the Repayment Obligation is paid, Contributors shall
have two years following the date thereof in which to re-lease the premises in
accordance with the Agreement. Upon such reletting, MCRLP shall pay
Contributors the Earnout Additional Consideration applicable thereto. If
Bombardier, Inc. sets off any rent due for any period prior to termination of
the
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Repayment Obligation, Contributors shall repay the amount of such rent to MCRLP
within 30 days thereafter.
Xxxxx Xxxxxxx will, pursuant to a separate guaranty agreement of even date
herewith, (a) guarantee payment of the Adjustment and payment of the items set
forth in Section 14(a) of the Agreement and (b) guarantee the Repayment
Obligation.
3. RESERVED AMOUNT ESCROW. The amount of $3.8 Million (the "RESERVED
AMOUNT") shall be held in escrow by the Title Company to pay the Reserved Items
set forth on Exhibit B. Amounts shall be released from the escrow by the Title
Company and paid to Contributors or their designees upon the following
conditions:
a. As to payments for completion of construction, Contributors shall
present to the Title Company and MCRLP invoices and lien releases for the
amount requested to be released from escrow;
b. As to lease commissions, Contributors shall present to the Title
Company and MCRLP, invoices from the applicable broker or agent;
c. As to other operating expenses, capital expenses or other
non-lienable expenses, Contributors shall present
invoices to the Title Company and MCRLP.
d. In the event the tenant for whom construction and capital
expenses are incurred objects to such work in writing or notifies MCRLP or
the Contributors that such work is not proceeding under its lease, and the
Contributors, after notice and a reasonable opportunity to cure tenant's
objection, have failed to so cure, MCRLP shall be entitled to be paid funds
from the Reserved Amount to complete such work to the tenant's reasonable
satisfaction.
e. Any portion of the Reserved Amount remaining in escrow following
payment and completion of all items on the schedule set forth on Exhibit B
and following delivery to MCRLP of the Earnout Estoppels required
hereinabove, shall be paid to Contributors.
4. PRORATED RENTS ESCROW. Due to the fact that the Closing is taking
place on or about June 8, 1998, the parties have calculated a proration of base
rents and operating expense pass-through payments based on the scheduled rents
and payments due on the current rent roll. Contributors will not deposit any
checks received by Apollo for the month of June, but, instead, shall promptly
upon receipt send the original checks to MCRLP. At Closing, the parties shall
calculate an amount which would have been credited to Contributors as of Closing
if all of the rents for June, 1998 had been received by Apollo prior to Closing.
However, Contributors shall not receive a credit on the settlement sheet, but
MCRLP shall pay the amount of such proration to the Title Company as escrow
agent (the "PRORATED RENTS ESCROW"). If by June 30, 1998, any of the scheduled
rents for the month of June, 1998 have not been actually received by MCRLP,
MCRLP may give written notice thereof to Contributors and the Title Company of
the fact that
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such rent has not been received, along with the amount of the proration for the
then delinquent tenants for which MCRLP made a deposit into the Prorated Rents
Escrow. Unless the Title Company receives written objection thereto from
Contributors within three days after receipt of such claim from MCRLP, the Title
Company shall pay to MCRLP from the Prorated Rents Escrow an amount equal to the
prorated rent credit which would have been received by Contributors at Closing
applicable to the then delinquent tenants and, thereafter, if such rent for the
month of June is received by MCRLP for such tenant for whom MCRLP has been
reimbursed from the Prorated Rents Escrow, MCRLP shall hold the prorated amount
for such tenant in trust and shall promptly pay the same to Contributors. Any
portion of the Prorated Rents Escrow which is not claimed by MCRLP by July 15,
1998 as a result of any rents not received by MCRLP during the month of June,
1998 shall immediately be paid to Contributors by the Title Company.
5. ESCROW MATTERS. All notices to the Title Company shall be made in
writing and delivered by facsimile transmission to Ellie Xxxxxxx at 000-000-0000
with copies to the parties in the manner required in the Agreement. The Title
Company shall only take action required hereunder if proof of copies of notice
to the other party is provided by the party requesting payment and if no
objection to payment is made by any other party within three business days
following receipt of notice. If objection is made, the applicable funds shall
be retained by the Title Company until it receives an instruction executed by
the parties or a valid court order. The Title Company shall have the right to
interplead any funds that are the subject of dispute into a court of lawful
jurisdiction. The parties shall share equally all of the Title Company's costs
and expenses (including reasonable attorneys fees) involving any matters related
thereto.
6. JOINT AND SEVERAL. The obligations of Pacifica Holding Company and
Apollo Real Estate Investment Fund II, L.P. hereunder shall be joint and several
as principals and not at guarantors or sureties.
7. SERVICE CONTRACTS. The parties shall adjust and prorate for service
contracts affecting the Properties following Closing.
8. MISCELLANEOUS. Except as set forth herein, all other provisions of
the Agreement shall remain in full force and effect.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties set their hands this 8th day of June, 1998.
PACIFICA HOLDING COMPANY LLC, a Colorado limited
liability company
By:
---------------------------------
Name: Xxxxx Xxxxxxx
Title: President
APOLLO REAL ESTATE INVESTMENT FUND II, L.P., a
Delaware limited partnership
By: APOLLO REAL ESTATE ADVISORS II, L.P.,
its General Partner
By: APOLLO REAL ESTATE CAPITAL ADVISORS
II, INC., its general partner
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
PACIFICA HOLDING COMPANY, a Colorado corporation
By:
---------------------------------
Name: Xxxxx Xxxxxxx
Title: President
XXXX-XXXX REALTY, L.P., a Delaware limited
partnership
By: XXXX-XXXX REALTY CORPORATION, a Maryland
corporation, its general partner
By:
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: Executive Vice President
XXXX-XXXX REALTY CORPORATION, a Maryland
corporation
By:
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: Executive Vice President
APOLLO/PACIFICA, LLC, a Delaware limited liability
company
By:
---------------------------------
Name: Xxxxx Xxxxxxx
Title: Manager
AS TO PARAGRAPH 2:
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Xxxxx Xxxxxxx
AS TO PARAGRAPHS 3, 4 AND 5:
TITLE COMPANY - ESCROW AGENT
LAND TITLE GUARANTY CO.
By:
---------------------------------
APOLLO/PACIFICA TECH AT BRIARGATE, LLC, a Delaware
limited liability company
By:
---------------------------------
Xxxxx Xxxxxxx, Manager
EXHIBIT A
TENANTS
1. Sun Microsystems
2. First Tennessee Bank National Association
3. MultiFamily and Commercial Lending Corporation
4. Convergent Communications, Inc.
5. Ascend Communications, Inc.
6. Knowledge Development Centers
7. Bombardier (solely with respect to "Phase I" improvements)
