EXHIBIT 10.16
SECOND AMENDMENT TO
OPTION AGREEMENT AND ESCROW INSTRUCTIONS
This SECOND AMENDMENT TO OPTION AGREEMENT AND ESCROW INSTRUCTIONS
("AMENDMENT") is made and effective as of July 18, 2001 ("EFFECTIVE DATE"), by
DIVERSIFIED EASTGATE VENTURE, an Illinois general partnership ("SELLER"), and
ILLUMINA, INC., a Delaware corporation ("BUYER"), with reference to the facts
set forth below.
R E C I T A L S:
A. Pursuant to that certain Option Agreement and Escrow Instructions
dated July 6, 2000, as amended by that certain First Amendment to Option
Agreement and Escrow Instructions dated May 25, 2001 ("FIRST AMENDMENT")
(collectively, "OPTION AGREEMENT"), Seller granted to Buyer an option ("OPTION")
to purchase certain real property located in the County of San Diego,
California, as more particularly described therein ("PROPERTY"). On or about
November 30, 2000, Buyer exercised its Option to purchase the Property.
B. Seller and Buyer have also entered into that certain Eastgate Pointe
Lease dated July 6, 2000 ("LEASE") whereby Seller, as Landlord, leased the
Property to Buyer, as Tenant.
C. Pursuant to the First Amendment, the parties agreed to certain
modifications to the Option Agreement and the Lease based upon Buyer's request
for certain additions and modifications to (a) the Project Plans and the Project
Work under the Option Agreement, and (b) the Tenant Improvement Plans and the
Tenant Improvements under the Lease. As a result of these modifications, the
parties acknowledge that Buyer will not be in a position to close Escrow on or
before the outside Closing Date of August 1, 2001. Accordingly, the parties
desire to modify the Option Agreement to extend the Close of Escrow until
October 1, 2001, on the terms and conditions set forth herein.
D. In connection with the extension of the Close of Escrow, the parties
also desire to amend the Option Agreement to provide for certain modifications
to the economic terms of the transaction, as set forth on EXHIBIT "A" attached
hereto and incorporated herein. The parties agree that such modifications shall
be made on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the foregoing recitals, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as set forth below.
1. Section 1.3 -- Option Deposit. The third sentence of Section 1.3 of
the Option Agreement shall be deleted and replaced with the following:
"The Option Deposit, together with interest calculated thereon at the
rate of nine percent (9%) per annum (calculated from the date of such
deposit until August 1, 2001) shall be applied to the Purchase Price in
the event that Buyer exercises the Option pursuant to Section 1.5
herein."
2. Section 1.5 - Exercise Deposit. Section 1.5 of the Agreement shall be
modified to require Buyer to deliver to Seller an additional Exercise Deposit
("ADDITIONAL EXERCISE DEPOSIT") in the amount of Two Million Six Hundred
Seventy-Eight Thousand Eight Hundred Fifty-Six Dollars ($2,678,856). Buyer shall
deliver the Additional Exercise Deposit directly to Seller, in immediately
available funds, on or before August 1, 2001. Hereafter, the term "EXERCISE
DEPOSIT" shall refer collectively to original Exercise Deposit previously
delivered by Buyer and the Additional Exercise Deposit. The parties acknowledge
that the calculation of the Additional Exercise Deposit, as set forth on EXHIBIT
"A", includes a credit against the Purchase Price to Buyer for the payment of
the Security Deposit and the first month's Monthly Base Rent under the Lease.
3. Section 2.1 -- Purchase Price. The first sentence of Section 2.1 of
the Option Agreement shall be modified to delete subsection (c) and replace it
with the following:
"(c) the product of nine percent (9%) per annum multiplied by the amount
of Three Million Four Hundred Fifty Thousand Dollars ($3,450,000) (the
"INTEREST CASH CONSIDERATION"), which Interest Cash Consideration shall
be calculated for the period of time between December 1, 2000 and August
1, 2001, plus"
4. Section 3.4 - Extension of Closing Date. The last sentence of Section
3.4 of the Agreement shall be deleted and replaced with the following: "Escrow
shall close on or before October 1, 2001 ("CLOSING DATE")".
5. Section 3.7 -- Proration of Taxes. Section 3.7(a) of the Option
Agreement shall be deleted in its entirety and replaced with the following:
"(a) Prorations. The following items shall be prorated in Escrow,
as of August 1, 2001, based on the latest information available to
Escrow Agent: (i) real property taxes and any bonds and assessments
which are Permitted Exceptions as described in Section 4.2 and (ii) all
insurance paid by or due and owing from Seller relating to the Property
("PROPERTY INSURANCE"). Seller shall provide copies of all invoices
relating to the Property Insurance at least one (1) business day prior
to the Close of Escrow. All prorations shall be made on the basis of a
30-day month and a 365-day year, unless the parties otherwise agree in
writing."
6. Section 3.7(d) -- Reimbursement for Construction Loan Interest.
Section 3.7 of the Option Agreement shall be amended to add the following as
subsection (d):
"(d) Buyer agrees that it shall reimburse Seller for the cost of
all interest which accrues for the period from and after August 1, 2001
until the Close of Escrow ("CONSTRUCTION LOAN INTEREST") under that
certain loan to Seller by Washington Capital Joint Master Trust Income
Fund, as evidenced by that certain
-2-
Promissory Note in the principal amount of Twenty-Four Million Dollars
($24,000,000) and secured by that certain Deed of Trust, Security
Agreement, Assignment of Rents and Fixture Filing recorded against the
Property. Buyer shall pay the Construction Loan Interest to Seller
monthly within ten (10) days after Buyer's receipt of a written request
from Seller. Notwithstanding anything to the contrary set forth herein,
the Construction Loan Interest shall be paid in full on or before the
Close of Escrow."
7. Amendment. Except as expressly amended or modified by the provisions
and conditions of this Second Amendment, the Option Agreement shall remain in
full force and effect.
8. Defined Terms. Capitalized Terms which are not otherwise defined
herein shall have the meanings attributed to them in Option Agreement.
9. Counterparts. This Amendment may be executed in counterparts.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
-3-
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date set forth above.
SELLER: DIVERSIFIED EASTGATE VENTURE,
an Illinois general partnership
By: Diversified Eastgate Pointe, LLC,
a California limited liability company,
Its General Partner
By: /s/ XXXXXXX X. XXXXXXXX
--------------------------------
Its: Manager
By: GFBP Partners, LLC,
a California limited liability company,
Its General Partner
By: /s/ XXXXXXX X. XXXXXXXX
--------------------------------
Its: Manager
BUYER: ILLUMINA, INC.,
a Delaware corporation
By: /s/ XXXXXXX X. XXXX
-------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President & Chief Financial
Officer
-4-
CONSENT OF LENDER
The undersigned, as "Lender" under that certain Construction Loan
Agreement dated September 26, 2000, hereby consents to the terms and conditions
of the foregoing Second Amendment to Option Agreement and Escrow Instructions.
Date: July 25, 2001 WASHINGTON CAPITAL JOINT MASTER
TRUST MORTGAGE INCOME FUND
By: Washington Capital Management, Inc.,
a Washington corporation,
Its Investment Manager
By: /s/ XXXXXX X. XXXXXXXX
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President, California Division
-5-
