LETTER AGREEMENT Effective as of October 31, 2007
Exhibit
10.128
EXECUTION
COPY
Effective
as of October 31, 2007
Reference
is made to (a) that certain
Membership Interest Purchase and Contribution Agreement by and among Xx. Xxxxxxx
X. Xxxx, SCG Holding Corp., Xxxx-Xxxx Realty Acquisition Corp. (“MCRAC”)
and Xxxx-Xxxx Realty, L.P. (“MCRLP”) dated as of March 7, 2006 and as
amended through the date hereof (the “Contribution Agreement”), and (b)
that certain Non-Portfolio Property Interest Contribution Agreement by and
among
Xx. Xxxxxxx X. Xxxx, Xx. Xxxx Xxxxxx, GCF II Investor LLC, The Xxxx
Investments Company, LLC (“Xxxx Investments”), Xxxx & Wentworth
Xxxxxxxx, LLC, Xxxx Xxxxx Solutions LLC, MSGW-ONE Campus Investors, LLC, MCRAC
and MCRLP dated as of May 9, 2006 (the “Non-Portfolio Property
Agreement”). Capitalized terms used herein and not defined shall
have the meaning ascribed to such terms in the Contribution Agreement or the
Non-Portfolio Property Agreement, as applicable.
WHEREAS,
the
undersigned parties have entered into a series of transactions pursuant to
the
Contribution Agreement and the Non-Portfolio Property Agreement with respect
to
the development, management and ownership of the real property that is the
subject of such agreements; and
WHEREAS,
the
undersigned parties desire to enter into this Letter Agreement to memorialize
the understanding of the parties with respect to certain elements of the subject
transactions and to make certain revisions to such agreements.
NOW,
THEREFORE, for and in consideration of the amounts set forth
herein below, the mutual promises herein contained and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged
by
each party hereto, and intending to be legally bound hereby, the parties hereby
agree as follows:
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1.
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Assignment
and Assumption of M-C Belmar, LLC Membership
Interests.
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x.
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Xxxx-Xxxx
Belmar Realty, LLC (“Xxxx Xxxxxx”), the owner of a 99.9% Percentage
Interest in M-C Belmar, LLC, a Delaware limited liability company
(“M-C
Belmar”), without representation or warranty except as set forth
herein, hereby sells, transfers, assigns, delivers and conveys to
Xxxx
Investments its successors and assigns, all rights, title and interests
in
and to a 49.8% Percentage Interest in M-C Belmar (the “Transferred
Interests”), and Xxxx Investments hereby accepts the Transferred
Interests from Xxxx Xxxxxx, it being expressly understood and agreed
that
such transfer is without assumption of any rights, obligations and
liabilities of Xxxx Xxxxxx heretofore or hereafter accrued with respect
to
the Transferred Interests under or pursuant to that certain Limited
Liability Company Operating Agreement of M-C Belmar dated as of June
15,
2006 (the “M-C Belmar Operating Agreement”) and as hereinafter
amended to reflect the transaction set forth
herein.
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b.
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For
and in consideration of the Transferred Interests, each member of
M-C
Belmar hereby agrees to a restatement of its capital account balance
and
to modify the terms of the M-C Belmar Operating Agreement relating
to the
distribution of Net Cash Flows (as defined in the M-C Belmar Operating
Agreement) as follows (collectively, the “Amended Belmar
Interests”):
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i.
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The
capital account of Xxxx Xxxxxx in X-X Xxxxxx shall be debited
$2,000,000;
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ii.
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The
capital account of Xxxx Investments in M-C Belmar shall be credited
with a
deemed contribution of $2,000,000 (the “Xxxx Contribution
Amount”);
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iii.
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Xxxx
Xxxxxx’x right to receive the CLI Investor Preferential Return shall be
terminated;
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iv.
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The
distribution of Net Cash Flows shall be
payable:
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1.
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First,
to Xxxx Xxxxxx until it shall have received payments of Net Cash
Flows
equal to the aggregate amount of all funds invested by Xxxx Xxxxxx
in M-C
Belmar less the Xxxx Contribution
Amount;
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2.
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Second,
to Xxxx Investments until it shall have received payments of Net
Cash
Flows equal to the Xxxx Contribution Amount;
and
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3.
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Thereafter,
to Xxxx Xxxxxx and Xxxx Investments in accordance with their respective
Payout Percentages (as defined in the M-C Belmar Operating
Agreement).
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c.
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The
parties hereto shall negotiate in good faith to modify the M-C Belmar
Operating Agreement so as to effect the intent of the parties as
closely
as possible in an acceptable manner in order that the transactions
contemplated by this Agreement are consummated to the greatest extent
possible, it being expressly understood that Xxxx Xxxxxx shall remain
the
majority holder of the Percentage Interests in M-C Belmar and continue
to
exercise sole management control of M-C
Belmar.
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2.
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Acceleration
of Earnout Payments. Notwithstanding anything to the
contrary in that certain Amendment No. 8 to the Contribution Agreement
dated as of May 23, 2007, it is expressly understood and agreed by
MCRLP
and the Sellers that the aggregate $6,000,000 in payments due to
the
Sellers from MCRLP in two equal installments on May 9, 2008 and May
9,
2009 pursuant to Section 2.02(c) of the Contribution Agreement, as
amended, shall be deemed to be paid in full on the date hereof and
shall
consist of the following:
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2
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a.
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$4,000,000
in cash to be paid by MCRLP or its affiliate to the Sellers;
and
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b.
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The
issuance of the Transferred Interests in consideration of the Amended
Belmar Interests.
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it
being
expressly understood by the parties that these transactions shall be deemed
accomplished by a wire transfer of immediately available funds of $4,000,000
by
MCRLP or its affiliate to Xxxx Investments or its designated affiliate pursuant
to wire transfer instructions attached hereto as Exhibit A.
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3.
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Excluded
Assets.
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a.
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It
is mutually acknowledged and agreed by the parties to this Agreement
that
any commissions (the “Commissions”) payable to The Xxxx Real Estate
Advisors Company, L.L.C. (“Xxxx Advisors”) in connection with that
certain Expansion Option Agreement by and between Xxxx 55 Corporate
Associates II, LLC (“Xxxx XX”) and Aventis Inc. (the “Expansion
Option Agreement”) and pursuant to that certain Management/Leasing
Agreement by and between Xxxx 55 Corporate Associates, LLC, The Xxxx
Services Company, L.L.C. and Xxxx Advisors (the “Management
Agreement”) in the amount of $2,336,891 are an Excluded Asset
described in Section 5.11(c) of the Contribution Agreement. Upon
exercise
of the expansion option specified in the Expansion Option
Agreement:
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i.
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If
Xxxx XX fails to pay all or any portion of the Commissions to Xxxx
Investments, then MCRLP shall pay to Xxxx Investments or its designated
successors or assigns up to one-half (1/2) of the amount of such
unpaid
portion of the Commissions (the “MCRLP Contribution”);
provided, however, that the aggregate amount of MCRLP’s
contributions for the payment of the Commissions, either directly
through
the payment of the MCRLP Contribution or indirectly through the funding
of
any capital call properly made for such purpose, shall not exceed
$769,000.
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ii.
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MCRLP
shall not, directly or indirectly through its affiliates and subsidiaries
as a partner in Xxxx XX, object to or block the payment of any Commissions
and will consent to and fund any capital call properly made for the
same;
provided, however, that the aggregate amount of MCRLP’s
contributions for the payment of the Commissions, either directly
in the
form of the MCRLP Contribution or indirectly through the funding
of any
capital call properly made for such purpose, shall not exceed
$769,000.
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iii.
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If
requested in writing by Xxxx Investments, MCRLP shall accept the
payment
of any Commissions on behalf of Xxxx Investments and distribute such
Commissions in accordance with the written instructions of Xxxx
Investments.
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3
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iv.
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MCRLP
hereby undertakes to pay to Xxxx Investments or its designated successors
or assigns any portion of the Commissions received by MCRLP or any
of its
subsidiaries or affiliates.
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v.
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It
is expressly understood and agreed by the parties to this Agreement
that,
except for the MCRLP Contribution, MCRLP shall have no obligation
to take
or cause to be taken any action to solicit the payment of the
Commissions.
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vi.
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In
the event that Aventis Inc. does not exercise its expansion option
and
Xxxx XX becomes entitled to the $7,000,000 penalty payable to such
entity
under the terms of the Expansion Option Agreement, any portion of
such
penalty payable to MCRLP or any of its subsidiaries or affiliates
shall
not be considered an Excluded Asset and MCRLP shall be entitled to
retain
such penalty.
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4.
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Expense
Reimbursements.
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a.
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MCRLP
hereby waives and forfeits all rights, title and interest to any
reimbursement under Section 7.07 of the Non-Portfolio Property Agreement
only for services performed by Xxxx Xxxxxx, whether prior to or after
the
date hereof.
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b.
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All
other reimbursements under Section 7.07 of the Non-Portfolio Property
Agreement for services performed by persons other than Xxxx Xxxxxx,
whether prior to or after the date hereof, shall continue in full
force
and effect in accordance with the terms thereof; provided,
however, that such sum shall not be required to be paid currently,
but shall accrue and include a carrying charge of 6% per annum, compounded
monthly, commencing on the date hereof (the “Expense
Accruals”). The amount of the Expense Accruals shall be
credited toward MCRAC’s Rock Cash Contribution under Section 2.03(f) of
the Non-Portfolio Property Agreement in furtherance of MCRAC’s acquisition
of the Rock GW Office Interests, subject to the satisfaction of all
of the
conditions of Section 2.06(b) of the Non-Portfolio Property
Agreement. If, as of May 9, 2009, the acquisition of the Rock
GW Office Interests by MCRAC has not closed for any reason (other
than a
breach by MCRAC of its obligations under the Non-Portfolio Property
Agreement), then:
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i.
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The
then outstanding balance of the Expense Accruals, with accrued carrying
charges through and as of May 9, 2009 or until paid, plus an additional
$1,000,000 in cash, shall be paid by Xxxx/Xxxxxx Investments LLC
to MCRLP
within three (3) business days; and
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ii.
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All
other terms and conditions of the Non-Portfolio Property Agreement
shall
remain in full force and effect.
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x.
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Xxxx/Xxxxxx
Investments LLC hereby pledges to MCRLP, and grants to MCRLP a security
interest in, Xxxx/Xxxxxx Investments LLC’s interests in the Rock GW Office
Interests, and any related rights to payment, profits, distributions
in
connection therewith, as the case may be, and all proceeds therefrom,
including any securities and moneys received, whether now existing
or
acquired, as security for the prompt and complete performance of
Xxxx/Xxxxxx Investments LLC’s obligations under paragraph (b) of Section 4
of this Agreement.
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5.
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Severability. If
any term or other provision of this Agreement is invalid, illegal
or
incapable of being enforced by any Law or public policy, all other
terms
and provisions of this Agreement shall nevertheless remain in full
force
and effect for so long as the economic or legal substance of the
transactions contemplated by this Agreement is not affected in any
manner
materially adverse to either party hereto. Upon such determination
that
any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify
this
Agreement so as to effect the original intent of the parties as closely
as
possible in an acceptable manner in order that the transactions
contemplated by this Agreement are consummated as originally contemplated
to the greatest extent possible. If any term or other provision
of this Agreement is inconsistent or in conflict with a term or provision
of any other oral or written agreement or arrangement between the
parties
hereto, the terms of this Agreement shall supersede all such prior
agreements or arrangements.
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6.
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PFV
Capital Call. MCRLP hereby acknowledges and agrees that it
will, either directly or indirectly through its affiliates and
subsidiaries, consent to any capital call made under the operating
agreements of The Xxxx PFV Investor Company, L.L.C., GMW Village
Associates, LLC or GE/Xxxx Funding LLC relating to MCRLP’s interests in
The Xxxx PFV Investor Company, L.L.C. for the purpose of paying accrued
and unpaid management fees and expenses, regardless of when earned
(collectively, the “PFV Accruals”). MCRLP, either
directly or indirectly through its affiliates and subsidiaries, will
consent to and fund any capital call properly made for the purpose
of
paying the PFV Accruals, and in the event of such a capital call,
MCRLP
further undertakes to pay to Xxxx Investments or its designated successors
or assigns Xxxx Investments’ portion of the PFV
Accruals.
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7.
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Governing
Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware without
reference to its principles regarding conflicts of
laws.
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8.
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Waiver. Any
party to this Agreement may (a) extend the time for the performance
of any
of the obligations or other acts of the other party, (b) waive any
inaccuracies in the representations and warranties of the other party
contained herein or in any document delivered by the other party
pursuant
hereto, or (c) waive compliance with any of the agreements of the
other
party or conditions to such party’s obligations contained herein. Any such
extension or waiver shall be valid only if set forth in an instrument
in
writing signed by the party to be bound thereby. Any waiver of any
term or
condition shall not be construed as a waiver of any subsequent breach
or a
subsequent waiver of the same term or condition, or a waiver of any
other
term or condition of this Agreement. The failure of either party
hereto to
assert any of its rights hereunder shall not constitute a waiver
of any of
such rights.
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9.
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Binding
Effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, legal representatives, successors and
assigns.
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10.
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Counterparts. This
Agreement may be executed and delivered (including by facsimile
transmission or portable document format (PDF)) in one or more
counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an
original, but all of which taken together shall constitute one and
the
same agreement.
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11.
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No
Third Party Beneficiaries. This Agreement shall be binding
upon and inure solely to the benefit of the parties hereto and their
respective successors and permitted assigns and nothing herein, express
or
implied, is intended to or shall confer upon any other person any
legal or
equitable right, benefit or remedy of any nature whatsoever, under
or by
reason of this Agreement.
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[Signature
Pages Follow]
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IN
WITNESS WHEREOF, the parties hereto have executed, or have caused this
Agreement to be executed, as of the day and year first above
written.
GCF
II INVESTOR LLC
By: /s/
Xxxxxxx X. Xxxx
Name: Xxxxxxx
X.
Xxxx
Title: Managing
Member
THE
XXXX INVESTMENTS COMPANY,
LLC
By: /s/
Xxxxxxx X. Xxxx
Name: Xxxxxxx
X.
Xxxx
Title: Managing
Member
XXXX
& WENTWORTH XXXXXXXX, LLC
By: /s/
Xxxxxxx X. Xxxx
Name: Xxxxxxx
X.
Xxxx
Title: Managing
Member
XXXX
XXXXX SOLUTIONS LLC
By: /s/
Xxxxxxx X. Xxxx
Name: Xxxxxxx
X.
Xxxx
Title: Managing
Member
MSGW-ONE
CAMPUS INVESTORS,
LLC
By: /s/
Xxxxxxx X. Xxxx
Name: Xxxxxxx
X.
Xxxx
Title: Managing
Member
SCG
HOLDING CORP.
By: /s/
Xxxxxxx X. Xxxx
Xxxxxxx
X. Xxxx
Chief
Executive Officer
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XXXXXXX
X. XXXX
/s/
Xxxxxxx X.
Xxxx
XXXX
XXXXXX
/s/
Xxxx Xxxxxx
XXXX-XXXX
REALTY, L.P.
By: Xxxx-Xxxx
Realty Corporation, its general partner
By: /s/
Xxxxxxxx X. Xxxxx
Xxxxxxxx
X. Xxxxx
President
and Chief Executive
Officer
XXXX-XXXX
REALTY ACQUISITION
CORP.
By: /s/
Xxxxxxxx X. Xxxxx
Xxxxxxxx
X. Xxxxx
President
and Chief Executive
Officer
XXXX-XXXX
BELMAR REALTY,
LLC
By: Xxxx-Xxxx
Services, Inc., its sole member
By: /s/
Xxxxxxxx X. Xxxxx
Xxxxxxxx
X. Xxxxx
President
and Chief Executive
Officer
M-C
BELMAR, LLC
By: Xxxx-Xxxx
Belmar Realty, LLC, its Manager
By: Xxxx-Xxxx
Services, Inc., its sole member
By: /s/
Xxxxxxxx X. Xxxxx
Xxxxxxxx
X. Xxxxx
President
and Chief Executive
Officer
8
XXXX/XXXXXX
INVESTMENTS LLC
By: /s/
Xxxx Xxxxxx
Name: Xxxx
Xxxxxx
Title: Member
9
