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FIRST AMENDMENT TO PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO PURCHASE AGREEMENT (the "Amendment"), is made as of
January 15, 1998, by and between ICG HOLDINGS, INC., a Colorado corporation
("Seller"), and TRINET ESSENTIAL FACILITIES X, INC., a Maryland corporation
("Buyer"), with reference to the following facts:
A. Seller and Buyer entered into that certain Purchase Agreement, dated as
of December 9, 1997 (the "Agreement"), with respect to the purchase and sale of
the Property. Each capitalized term used in this Amendment, but not defined
herein, shall have the meaning ascribed to it in the Agreement.
B. Buyer and Seller have agreed that Buyer shall waive the condition
precedent to the Closing that the Project has been Substantially Completed by
the Closing Date, as set forth in Section 8.2(d) of the Agreement, as long as
one hundred thirty percent (130%) of the Unpaid Project Costs shall not be
disbursed to Seller at Closing, but is held in escrow to pay for the Unpaid
Project Costs pursuant to the terms and provisions contained herein.
C. Because the actual amount of Buyer's out-of-pocket costs in connection
with the Purchase Agreement and the transactions contemplated thereby, the Lease
and the Project, for which Seller is required to reimburse Buyer up to two
hundred fifty thousand dollars ($250,000) pursuant to Section 9.3(b) of the
Purchase Agreement, will not be determined by Closing, Buyer and Seller have
agreed that two hundred eighteen thousand seven hundred ninety-seven and
twenty-five hundredths dollars ($218,797.25) of the Purchase Price shall not be
disbursed to Seller at Closing, but shall be held in escrow to satisfy Seller's
obligation.
D. Seller and Buyer desire to enter into this Amendment to modify the terms
of the Agreement, all as set forth hereinbelow.
NOW, THEREFORE, the parties agree as follows:
1. Holdback Escrow. The Agreement is hereby amended by adding new Sections
2.3 through 2.5 thereto, which read in their entirety as follows:
"2.3 Funds for Unpaid Project Costs Held in Escrow.
"(a) Escrow Account-A. Buyer and Seller acknowledge that there will be
Unpaid Project Costs after the Closing Date. In order to assure Buyer that
such Unpaid Project Costs will be paid promptly as they become due, Seller
and Buyer agree that, upon and subject to the terms and conditions of this
section 2.3 and an escrow agreement (the "Escrow Agreement") in the form
attached hereto as Exhibit S, at the Closing, one hundred thirty percent
(130%) of the Unpaid Project Costs shall not be then disbursed to Seller,
and shall be held in escrow by the Escrow Holder in an interest-bearing
escrow account ("Escrow Account-A"), pursuant to the Escrow Agreement. Such
escrowed funds are referred to herein as "Escrow Amount-A". All interest
earned on Escrow Amount-A shall be paid to Seller. Escrow Amount-A shall be
held and disbursed in accordance with the terms of this section 2.3 and the
Escrow Agreement.
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"(b) Completion of Unfinished Work. Seller shall promptly complete all
Unfinished Work; in any event, all Unfinished Work shall be completed by
Seller no later than by June 30, 1998. If Seller has not completed the
Unfinished Work by June 30, 1998, Buyer may complete the Unfinished Work
and receive disbursements from Escrow Account-A upon Buyer's instruction to
the Escrow Agent to pay for the costs incurred in completing such
Unfinished Work. If at any time Escrow Amount-A is insufficient to cover
such costs incurred by Buyer to complete the Unfinished Work, Seller shall
promptly pay Buyer for such costs upon demand by Buyer, as additional rent
under the Lease. Seller's failure to pay such additional costs within ten
(10) days after demand shall constitute an Event of Default under the
Lease.
"(c) Disbursements to Seller from Escrow Account-A.
(i) Substantial Completion. From time to time, whenever Buyer receives
evidence from Seller that Seller has paid for any Unfinished Work (in the
form of one or more invoices together with such lien releases or other
evidence of payment as Buyer may reasonably require) which has been
completed and is in place (as evidenced by an architect's certificate or
such other evidence as Buyer may reasonably require), Buyer and Seller
shall instruct the Escrow Holder to disburse to Seller from Escrow
Account-A the amount paid by Seller for such Unfinished Work; provided,
however, that no disbursement from Escrow Account-A shall exceed the amount
of the then remaining Escrow Amount-A.
(ii) Punch-list Items. Upon satisfaction of the conditions set forth
in Sections 7.5(i)(1) through 7.5(i)(4) and 7.5(i)(6) (i.e. once the
Project is Substantially Completed), Buyer and Seller shall instruct the
Escrow Holder to disburse to Seller an amount equal to the remaining Escrow
Amount-A less the amount required to be held in escrow pursuant to Section
7.5(j). Buyer and Seller shall instruct the Escrow Holder to make
disbursements to Seller from Escrow Account-A amounts paid by Seller to
complete the Punch-list Items pursuant to Section 2.3(c)(i).
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"(d) Termination of Escrow Agreement. Buyer and Seller shall instruct
the Escrow Holder that Escrow Account-A shall be closed and the Escrow
Agreement shall terminate with respect to Escrow Account-A and any
remaining amounts of Escrow Amount-A shall be paid to Seller upon the
earlier to occur of the following: (i) all sums have been disbursed from
Escrow Account-A in accordance with this section 2.3; or (ii) Buyer has
received adequate evidence from Seller (in the form of an architect's
certificate or such other evidence as Buyer may reasonably require) that
the Punch-list Items have been completed in their entirety.
"2.4 Funds for Out-of-Pocket Costs Held in Escrow.
"(a) Escrow Account-B. Buyer and Seller acknowledge that, after the
Closing Date, there will be out-of-pocket costs which have been incurred by
Buyer prior to the Closing Date and which will be incurred by Buyer after
the Closing Date that are required to be reimbursed, but will not be
reimbursed by the Closing Date, by Seller pursuant to Section 9.3(b)
("Out-of-Pocket Costs"). In order to assure Buyer that such Out-of-Pocket
Costs will be paid promptly as they become due, Seller and Buyer agree
that, upon and subject to the terms and conditions of this section 2.4 and
the Escrow Agreement, at the Closing, two hundred eighteen thousand seven
hundred ninety-seven and twenty-five hundredths dollars ($218,797.25) of
the Purchase Price shall not be then disbursed to Seller, and shall be held
in escrow by the Escrow Holder in an interest-bearing escrow account
("Escrow Account-B"), pursuant to the Escrow Agreement. Such escrowed funds
are referred to herein as "Escrow Amount-B". All interest earned on Escrow
Amount-B shall be paid to Seller. Escrow Amount-B shall be held and
disbursed in accordance with the terms of this section 2.4 and the Escrow
Agreement.
"(b) Disbursements to Seller from Escrow Account-B. From time to time,
whenever Seller receives evidence from Buyer that Buyer owes any
Out-of-Pocket Costs (in the form of one or more invoices or other such
evidence as Seller may reasonably require), Buyer and Seller shall instruct
the Escrow Holder to disburse to Buyer from Escrow Account-B the amount
paid by Buyer for such Out-of-Pocket Costs; provided, however, that no
disbursement from Escrow Account-B shall exceed the amount of the then
remaining Escrow Amount-B.
"(c) Termination of Escrow Agreement. Buyer and Seller shall instruct
the Escrow Holder that Escrow Account-B shall be closed and the Escrow
Agreement shall terminate with respect to Escrow Account-B and any
remaining amounts of Escrow Amount-B shall be paid to Seller upon the
earlier to occur of the following: (i) all sums have been disbursed from
Escrow Account-B in accordance with this section 2.4; or (ii) Buyer and
Seller have agreed in writing that Seller has fully satisfied its
obligation to reimburse Seller for the Out-of-Pocket Costs.
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"2.5 Arbitration.
"(a) Buyer and Seller agree that any dispute respecting their rights
to Escrow Amount-A and/or Escrow Amount-B (the "Escrow Amount") shall be
determined exclusively by final and binding arbitration in accordance with
this section 2.5. In the event either party wishes to commence an
arbitration proceeding to resolve any dispute relating to the parties'
rights to the Escrow Amount, such arbitration shall be final and binding on
Buyer and Seller, shall be conducted in the County of Arapahoe, Colorado,
and shall be administered by and in accordance with the Comprehensive or
Streamlined Arbitration Rules and Procedures of J.A.M.S./Endispute, as
applicable, or, if such rules no longer exist, the then existing rules of
practice and procedure of J.A.M.S./Endispute (both sets of rules are
collectively referred to as the "Rules of J.A.M.S./Endispute"). The
arbitrator shall be a retired Colorado or federal judge selected in
accordance with the Rules of J.A.M.S./Endispute. The arbitrator and not a
jury will decide the matter submitted to arbitration.
"The arbitrator shall determine only the rights of Buyer and Seller to
the Escrow Amount and no other issues. Judgment upon any decision rendered
by the arbitrator may be entered by any state or federal court having
jurisdiction thereof. Subject to the final sentence of this Section 2.5,
the arbitrator shall have the power to award damages in accordance with
this section 2.5 payable from Escrow Account-A and/or Escrow Account-B,
whichever is applicable, and to order the disposition of the Escrow Amount,
but shall not have the power to award any other damages or grant any other
relief, and shall not have the power to vary the provisions of this
Agreement.
"Discovery in any arbitration shall be permitted but it shall be
limited to one deposition and the exchange of documents and witness lists.
"Except as otherwise required by law, the parties agree that the
arbitration proceeding will be confidential; all conduct, statements,
promises, offers, views and opinions, oral or written, made during the
arbitration by any party or a party's agent, employee or attorney will
remain confidential and, where appropriate, will be considered work product
and privileged; and the existence and the results of the arbitration will
be maintained by the parties and their respective agents, employees and
attorneys as confidential at all times.
"In the event that J.A.M.S./Endispute is no longer in existence at the
time that arbitration is requested, the dispute shall be submitted to
arbitration in accordance with the rules and procedures of the successor to
J.A.M.S./Endispute or, if there is no such successor, the matter shall be
submitted to an organization which consists of members similar to
J.A.M.S./Endispute or its successor.
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"The losing party shall bear all of its own and the prevailing party's
costs and expenses incurred in connection with the arbitration, including
the arbitrator's fees and costs."
2. Survey. The Agreement is hereby further amended as follows:
(a) Subparagraph (5) of Section 7.5(i) is hereby deleted.
(b) Section 7.5(g) is hereby replaced in its entirety with the
following paragraph:
"7.5(g) Surveys. If Buyer requests upon completion of the
Project, Seller shall deliver to Buyer, at Seller's expense, an
as-built survey of the Real Property meeting the requirements
described in Section 5.5 and showing no material encroachments, bases
for third-party claims or violations of law or private covenants not
shown on the survey delivered pursuant to Section 5.5 (the "Final
Survey").
3. No Other Amendment; Conflict. Except as set forth in this Amendment, the
provisions of the Agreement shall remain in full force. If the provisions of
this Amendment conflict with the provisions of the Agreement, then the
provisions of this Amendment shall prevail.
4. Counterparts. This Amendment may be signed in multiple counterparts
which, when signed by all parties, shall constitute a binding agreement.
SELLER: ICG HOLDINGS, INC., a Colorado
corporation
By: /s/ James D. Grenfell
--------------------------------
James D. Grenfell
Its: Executive Vice President
and Chief Financial Officer
BUYER: TRINET ESSENTIAL FACILITIES X, INC.,
a Maryland corporation
By: /s/Gary P. Lyon
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Garry P. Lyon
Its: Executive Vice President