EXHIBIT 10.44
Loan No. C-332757
FIRST AMENDMENT TO
CONTRIBUTION AND REIMBURSEMENT AGREEMENT
THIS FIRST AMENDMENT TO CONTRIBUTION AND REIMBURSEMENT AGREEMENT (this
"First Amendment") is made as of November 5, 2008 by Mission West Properties,
L.P., a Delaware limited partnership ("MW"), Mission West Properties, L.P. I, a
Delaware limited partnership ("MWI"), and Mission West Properties, L.P. II, a
Delaware limited partnership ("MWII") (each a "Borrower" and collectively,
"Borrowers"), and Mission West Properties, Inc., a Maryland corporation, (the
"Principal"), and The Northwestern Mutual Life Insurance Company, a Wisconsin
corporation ("Lender").
RECITALS
A. Borrowers, Principal and Lender entered into that certain Contribution
and Reimbursement Agreement dated January 3, 2003 (the "Original Contribution
Agreement") regarding the allocation and disbursement of proceeds from those
certain loans (the "Loan") to Borrowers from Lender in the original aggregate
amount of One Hundred Million Dollars ($100,000,000.00). The Original
Contribution Agreement, as amended by this First Amendment and as may be further
amended from time to time is referred to herein as this "Contribution
Agreement".
B. Borrowers have requested Lender to consent to a release and substitution
of properties securing the Loan (the "Substitution") resulting in one (1)
Property owned by MWI and two (2) Properties owned by MWII (the three (3)
Properties being referred to as the "Release Properties") being released from
the Lien Instruments, as defined in the Original Contribution Agreement, and
four (4) new properties (the "Substitute Properties") owned by MW being
substituted as therefore as security for the Loan. Concurrently herewith, the
Lien Instruments are being amended to document the Substitution (the "Lien
Instrument Amendments"). The Term "Lien Instruments" is hereby amended to mean
the Lien Instruments, as amended by the Lien Instrument Amendments, as the same
may be modified or amended from time to time. The Term "Property" shall mean
each individual property subject to a Lien Instrument and the term "Properties"
shall mean collectively all of the properties subject to the Lien Instruments.
C. As a result of the Substitution, MWI and MWII are being permitted to
prepay without penalty of a prepayment fee solely for this prepayment that
portion of the outstanding principal balance due on their respective Notes, as
defined in the Original Contribution Agreement, allocated to their respective
Release Properties and such amount is being advanced to MW. Concurrently
herewith, the Notes are being amended (the "Note Amendments") to document the
prepayment and additional advance of Loan proceeds. The term "Notes" is hereby
amended to mean the Notes, as amended by the Note Amendments, as the same may be
modified or amended from time to time.
D. Principal continues to be the general partner of each Borrower. As of
the date hereof, Principal owns 19.96% of MW, 21.79% of MW I and 16.27% of MW
II.
E. As a result of the Note Amendments, the proceeds of the Loan will
continue to be allocated and disbursed to the individual Borrowers in the
amounts set forth in the Notes.
F. Concurrently herewith, Borrowers, Principal and Lender are executing a
First Amendment to Environmental Indemnity Agreement ("First Amendment to EIA")
with respect to the Substitution. The term "EIA" is hereby amended to mean the
EIA, as defined in the Original Contribution Agreement, as amended by the First
Amendment to EIA, as the same may be modified or amended from time to time.
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G. Borrowers understand that the consequence of being obligated under the
amended EIA and under the amended Loan Documents that secure the Loan is that
each Borrower's respective Property is being encumbered as collateral for the
entire Loan which is in excess of the proceeds of the Loan allocated to it.
H. On the basis of the foregoing facts and consideration, each Borrower is
willing to enter into the amendments to the Loan Documents and EIA, but only in
reliance on the acknowledgements, representations, warranties and undertakings
of each other Borrower contained herein.
NOW, THEREFORE, in order to induce each other Borrower to agree to the
Substitution, and in consideration thereof and with the understanding that each
other Borrower is relying thereon, each Borrower and Principal hereby jointly
and severally agree and certify as follows:
1. Representations and Warranties. Each Borrower jointly and severally
represents, warrants and acknowledges to each other Borrower that it has joined
with each other Borrower in requesting that Lender consent to the Substitution
and that all Borrowers continue to be jointly and severally liable under the
EIA, and that the Loan continue to be structured as a cross-defaulted,
cross-collateralized obligation in light of the following considerations and
expected benefits:
a. The interest rate and repayment terms of the Loan are more
favorable than those that each individual Borrower could have obtained on
its own without the "pooling" of all of the collateral as security for the
Loan, the issuance of several Notes from the Borrowers, and the
cross-default provisions and cross-collateralization of the Notes and the
Loan.
b. Financing of each of the separate Properties apart from the others
would be upon terms that are less favorable to Borrowers, and Lender would
not finance each Property separately under such more favorable terms, and
each Borrower, because of the common ownership relationship of the
Borrowers, expects to receive a substantial portion of the benefit of such
favorable terms.
c. The structure of the Loan and the Substitution has been devised in
order to accommodate each Borrower's existing operational structure in
order to best serve such Borrower's interests.
d. Each Borrower has received and expects to receive a substantial
portion of the benefit of such favorable rate and terms. Without limiting
the foregoing, each Borrower expects that the more favorable terms it
believes have and will result from the Loan as presently structured will
preserve each Borrower's individual cash flow and equity in its Property
and hence such Borrower's interest in each other Borrower and the cash flow
available to the owners thereof.
e. None of the Borrowers is insolvent as of the date hereof, nor,
after completing the Substitution, including the Note Amendments and Lien
Instrument Amendments, shall any Borrower be insolvent on the date of the
closing of the Substitution or the date of any transfer and each Borrower,
on the date hereof, (as evidenced by its most recent quarterly financial
statements) copies of which have been delivered to Lender, has assets with
a positive value, net of liabilities and obligations.
2. Contribution and Reimbursement. Each Borrower, in consideration of the
benefits it has received and expects to continue to receive from the EIA and
Loan as structured, including the Substitution, and in order to induce the other
Borrowers to accept the Substitution and execute and deliver the First Amendment
to EIA, the Note Amendments and the Lien Instrument Amendments (the
"Amendments"), continues to agree, for the benefit of each of the other
Borrowers and their respective creditors, that it shall contribute to, reimburse
and indemnify and hold harmless each other Borrower for any claim, loss,
liability, damage or expense suffered or paid by such Borrower (a) (including
payments of the Loan and the loss of such Borrower's respective Property as a
result of the exercise of Lender's remedies under the Loan Documents) if, as a
result of the cross-default or cross-collateralization provisions of the Loan
Documents, such Borrower suffers a loss or liability in excess of the amount of
the Loan allocated to it in respect of its individual Note (together with
accrued interest and other charges and costs fairly allocated to such Borrower
under the terms of the Loan Documents), to the extent of such excess loss or
liability, and (b) as a result of
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such Borrower's failure to pay in full or perform such Borrower's obligations
under the EIA as to Property owned by such Borrower.
3. Indemnity. Each Borrower jointly and severally continues to agree to
indemnify, defend, protect and hold harmless each other Borrower against any
losses, claims, damages, liabilities, or expenses (including attorneys' fees),
suffered or incurred by such other Borrower in the event of any
misrepresentation by any such Borrower in this Contribution Agreement.
4. No Other Modification. Except as hereby amended, the Contribution
Agreement shall remain in full force and effect, unchanged and in all respects,
ratified and confirmed.
5. Counterparts. This First Amendment may be executed in one or more
counterparts and such counterparts taken together shall constitute one and the
same document.
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IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
as of the day and year first written above.
BORROWERS:
MISSION WEST PROPERTIES, L.P.,
a Delaware limited partnership
By: Mission West Properties, Inc., a Maryland
corporation, its general partner
By: /S/ Raymond V. Marino
-----------------------------------------
Name: Raymond V. Marino
---------------------------------------
Title: President & COO
--------------------------------------
MISSION WEST PROPERTIES, L.P., I,
a Delaware limited partnership
By: Mission West Properties, Inc., a Maryland
corporation, its general partner
By: /S/ Raymond V. Marino
-----------------------------------------
Name: Raymond V. Marino
---------------------------------------
Title: President & COO
--------------------------------------
MISSION WEST PROPERTIES, L.P. II,
a Delaware limited partnership
By: Mission West Properties, Inc., a Maryland
corporation, its general partner
By: /S/ Raymond V. Marino
----------------------------------------
Name: Raymond V. Marino
--------------------------------------
Title: President & COO
-------------------------------------
(Signatures continue on following page.)
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PRINCIPAL:
MISSION WEST PROPERTIES, INC.,
a Maryland corporation
By: /S/ Raymond V. Marino
-------------------------------------------------
Name: Raymond V. Marino
-----------------------------------------------
Title: President & COO
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LENDER:
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY,
a Wisconsin corporation
By: Northwestern Investment Management Company,
LLC, a Delaware limited liability company, its
wholly-owned affiliate and authorized
representative
By: /S/ Michael P. Cusick
-----------------------------------------
Name: Michael P. Cusick
Title: Managing Director
Attest: /S/ Donna L. Lemanczyk
-------------------------------------
(corporate seal) Name: Donna L. Lemanczyk
Title: Assistant Secretary
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