EXHIBIT 10.1
Loan Identification No.:
AMENDED AND RESTATED
UNSECURED LINE OF CREDIT LOAN AGREEMENT
By and Among
BRE PROPERTIES, INC.,
as Borrower,
the several financial institutions from time to time party to
this Agreement,
as Banks or Designated Bid Lenders,
and
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
as Agent
Dated as of October 21, 1998
TABLE OF CONTENTS
-----------------
PAGE
----
CERTAIN DEFINITIONS...................................................... 1
1. CREDIT FACILITIES AMOUNTS AND TERMS................................. 16
1.1 Line of Credit Amount........................................ 16
---------------------
1.2 The Credit Facilities........................................ 17
---------------------
1.3 Procedure for Borrowing...................................... 26
-----------------------
1.4 Interest Rates............................................... 32
--------------
1.5 Prepayments.................................................. 32
-----------
1.6 Usury........................................................ 33
-----
1.7 Increased Costs and Reduction of Return...................... 33
---------------------------------------
2. FEES, EXPENSES...................................................... 33
2.1 Fees; Indemnities............................................ 33
-----------------
2.2 Costs and Expenses........................................... 34
------------------
2.3 Indemnification by Borrower.................................. 35
---------------------------
3. DISBURSEMENTS AND PAYMENTS.......................................... 36
3.1 Requests for Credit.......................................... 36
-------------------
3.2 Disbursement and Payment Record; Loan Account; Note.......... 36
---------------------------------------------------
3.3 Authorization................................................ 37
-------------
3.4 Banking Days................................................. 37
------------
3.5 Payments..................................................... 37
--------
4. CONDITIONS........................................................... 40
4.1 Conditions Precedent to Initial Funding Date on or
--------------------------------------------------
after the Effective Date...................................... 40
------------------------
4.2 Conditions to All Borrowings.................................. 42
----------------------------
5. REPRESENTATIONS AND WARRANTIES....................................... 42
5.1 Organization of Borrower; Good Standing....................... 42
---------------------------------------
5.2 Authorization; Enforceable Agreement.......................... 43
------------------------------------
5.3 Financial Information......................................... 43
---------------------
5.4 Lawsuits...................................................... 44
--------
5.5 Title to Assets............................................... 44
---------------
5.6 Permits, Franchises........................................... 44
-------------------
5.7 Income Tax Returns............................................ 44
------------------
5.8 ERISA Plans................................................... 45
-----------
5.9 Other Obligations............................................. 45
-----------------
5.10 Event of Default.............................................. 45
----------------
5.11 Status as a REIT.............................................. 45
----------------
5.12 Year 2K....................................................... 46
-------
6. COVENANTS............................................................ 46
6.1 Use of Proceeds............................................... 46
---------------
6.2 Financial Information......................................... 46
---------------------
6.3 Other Information............................................. 48
-----------------
i
TABLE OF CONTENTS
-----------------
(continued)
6.4 Financial Covenants........................................... 48
-------------------
6.5 Taxes and Other Liabilities................................... 51
---------------------------
6.6 Notices to Agent.............................................. 51
----------------
6.7 Audits; Books and Records..................................... 52
-------------------------
6.8 Compliance with Laws.......................................... 52
--------------------
6.9 Preservation of Rights........................................ 52
----------------------
6.10 Maintenance of Properties..................................... 52
-------------------------
6.11 Insurance..................................................... 52
---------
6.12 ERISA Plans................................................... 53
-----------
6.13 Indemnity of Guarantors....................................... 53
-----------------------
6.14 Additional Negative Covenants................................. 53
-----------------------------
6.15 Continued Status as a REIT; Prohibted Transactions............ 55
--------------------------------------------------
6.16 NYSE Listed Company........................................... 55
-------------------
6.17 Conduct of Business........................................... 55
-------------------
6.18 Delivery of Guaranties and Other Dcuments..................... 55
-----------------------------------------
6.19 Cooperation................................................... 56
-----------
7. COLLATERAL; OTHER SPECIAL PROVISIONS................................. 56
7.1 Collateral.................................................... 56
----------
7.2 Other Special Provisions...................................... 56
------------------------
8. DEFAULT.............................................................. 57
8.1 Failure to Pay................................................ 57
--------------
8.2 False Information............................................. 57
-----------------
8.3 Bankruptcy.................................................... 57
----------
8.4 Receivers; Dissolution........................................ 58
----------------------
8.5 Lawsuits...................................................... 58
--------
8.6 Judgments..................................................... 58
---------
8.7 ERISA Plans................................................... 58
-----------
8.8 Government Action............................................. 59
-----------------
8.9 Material Adverse Change....................................... 59
-----------------------
8.10 Other Breach Under This Agreement or Other Loan Documents..... 59
---------------------------------------------------------
8.11 Cross-Default................................................. 59
-------------
9. ENFORCING THIS AGREEMENT............................................. 59
9.1 Remedies...................................................... 59
--------
10. APPOINTMENT AND AUTHORIZATION OF AGENT............................... 60
10.1 Appointment................................................... 60
-----------
10.2 Powers........................................................ 60
------
10.3 Limitation on Duties.......................................... 61
--------------------
10.4 Co-Lender Agreement........................................... 61
-------------------
10.5 Resignation; Replacement...................................... 61
------------------------
11. ASSIGNMENTS, PARTICIPATIONS, ETC..................................... 62
11.1 Assignments................................................... 62
-----------
ii
TABLE OF CONTENTS
11.2 Effects of Assignment......................................... 63
---------------------
11.3 Participations................................................ 63
--------------
11.4 Pledges....................................................... 64
-------
11.5 Designated Bid Lenders........................................ 64
----------------------
12. MISCELLANEOUS....................................................... 67
12.1 California Law................................................ 67
--------------
12.2 Arbitration................................................... 67
-----------
12.3 Presentment, Demands and Notice............................... 67
-------------------------------
12.4 Attorneys' Fees............................................... 68
---------------
12.5 Integration................................................... 68
-----------
12.6 Electronic Notices............................................ 68
------------------
12.7 Notices....................................................... 68
-------
12.8 No Bankruptcy Proceedings Against Designated Bid Lenders...... 69
--------------------------------------------------------
12.9 Certain Acknowledgments by Borrower........................... 69
-----------------------------------
12.10 Successors and Assigns........................................ 69
----------------------
12.11 No Third Parties Benefited.................................... 69
--------------------------
12.12 Integration; Relation to Any Loan Commitment; Headings........ 70
------------------------------------------------------
12.13 Interpretation................................................ 70
--------------
12.14 Severability; Waivers; Amendments............................. 71
---------------------------------
12.15 Publicity; Confidentiality.................................... 71
--------------------------
12.16 Continuing Effect of Certain Prior Modifications to Loan
--------------------------------------------------------
Documents; Cross-References, Etc.............................. 72
--------------------------------
12.17 Counterparts.................................................. 74
------------
EXHIBITS AND SCHEDULES
EXHIBITS:
A. Form of Borrowing Notice
B. Form of Guaranty
C. Form of Competitive Bid Request
D. Form of Competitive Bid
E. Form of Designation Agreement
F. Form of Notice of Assignment
G. Form of Assignment and Assumption
H. Form of Controlled Funds Agreement
SCHEDULES:
I. Lending Offices
1. Material Borrower Entities, Other Guarantors, and Other Unencumbered
Property Owners
iii
AMENDED AND RESTATED
UNSECURED
LINE OF CREDIT LOAN AGREEMENT
THIS AMENDED AND RESTATED UNSECURED LINE OF CREDIT LOAN AGREEMENT
("Agreement") is entered into as of October 21, 1998, among BRE PROPERTIES,
INC., a Maryland corporation ("Borrower"); the several financial institutions
identified on the signature pages hereto as "Banks" (collectively, the "Banks",
and individually a "Bank"); those entities identified on the signature pages
hereto as "Designated Bid Lenders" (collectively, the "Designated Bid Lenders",
and individually a "Designated Bid Lender"); and BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, a national banking association ("BofA"), in its
capacity as a Bank and as agent for the Banks (in that capacity, "Agent").
RECITALS:
A. Borrower, Agent, Banks and Designated Bid Lenders are parties to an
Unsecured Line of Credit Loan Agreement dated November 17, 1997, as amended by
the Modification Agreement to Syndicate Loan ("Modification Agreement") dated as
of January 20, 1998 and by the Second Modification Agreement dated as of August
12, 1998 (as so amended, the "Existing Agreement").
B. The parties desire to modify the Existing Agreement to provide for an
increase of $135,000,000 (to $400,000,000) in the maximum amount of the line of
credit made available to Borrower pursuant thereto and to provide for the
issuance of letters of credit for the account of Borrower, as a subfacility
under the line of credit in the amount of $15,000,000; and, in connection
therewith, to make other modifications to the terms and conditions applicable to
the credit facilities made available pursuant to the Existing Agreement.
C. In connection with the foregoing modifications, Borrower, Agent, the
Banks, the Designated Bid Lenders wish to amend and restate the Existing
Agreement, all as set forth herein.
NOW, THEREFORE, the Existing Agreement is hereby amended and restated to read
in its entirety as follows:
CERTAIN DEFINITIONS
-------------------
The following terms used in this Agreement shall have the following meanings
(such meanings to be applicable, except to the extent otherwise indicated in a
definition of a particular term, both to the singular and the plural forms of
the terms defined; other terms are defined elsewhere in the Agreement, and
capitalized terms that are used herein without definition but that are defined
in the Note or the Guaranty have the definitions ascribed to them therein):
"Absolute Rate" means, in connection with any Absolute Rate Auction, the rate
-------------
of interest per annum (expressed in multiples of 1/1000th of one basis point)
offered for any Bid Loan to be made pursuant thereto.
"Absolute Rate Auction" means a solicitation of Competitive Bids setting forth
---------------------
Absolute Rates pursuant to Section 1.3(b).
"Absolute Rate Bid Loan" means a Bid Loan that bears interest at an Absolute
----------------------
Rate.
"Accommodation Obligations", as applied to any Person, means any Indebtedness
-------------------------
or other Contractual Obligation or liability, contingent or otherwise, of
another Person in respect of which that Person is liable, including, without
limitation, any such indebtedness, obligation or liability directly or
indirectly guaranteed, endorsed (otherwise than for collection or deposit in the
ordinary course of business), co-made or discounted or sold with recourse by
that Person, or in respect of which that Person is otherwise directly or
indirectly liable, including in respect of any partnership in which that Person
is a general partner, Contractual Obligations (contingent or otherwise) arising
through any agreement to purchase, repurchase or otherwise acquire such
indebtedness, obligation or liability or any security therefor, or to provide
funds for the payment or discharge thereof (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or to maintain
solvency, assets, level of income, or other financial condition, or to make
payment other than for value received.
"Advance" means any advance of proceeds, whether of a Committed Loan
-------
(including Swing Line Borrowings and payments under Letters of Credit) or a Bid
Loan, made pursuant to the terms of the Loan Documents.
"Affiliate" means, as to any Person, any other Person which, directly or
---------
indirectly, is in control of, is controlled by, or is under common control with,
such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, membership interests, by contract,
or otherwise.
"Agent" means BofA in its capacity as agent for the Banks hereunder, and any
-----
successor agent.
2
"Agent-Related Persons" means BofA and any successor agent hereunder, together
---------------------
with their respective Affiliates and the officers, directors, employees and
agents of such Persons.
"Agent's Payment Office" means the address for payments set forth herein for
----------------------
Agent, or such other address as Agent may specify.
"Applicable Capitalization Rate" means, for any real property asset, the
------------------------------
Korpacz Real Estate Investor Survey Overall Cap Rate Average ("OAR") for real
property assets of a type most similar to that of such real property asset, as
then most recently published by The Korpacz Company, Inc.; or, if a new OAR has
not been published for a period of 150 days, such rate as the Majority Banks,
taking into consideration such factors as the location and type of such real
estate asset, may establish from time to time (but no more often than once in
any calendar year) as the applicable capitalization rate for a real property
asset of that type.
"Applicable Facility Fee Percentage" means, as of any date of determination,
----------------------------------
(i) if no Rating is then in effect, 0.20%; or (ii) effective on the first day of
--
the fiscal quarter following Borrower's obtaining a Rating (or a change in the
then-effective Rating) and giving written notice thereof to Agent, the
Applicable Facility Fee Percentage set forth below in the definition of
"Applicable Margin" opposite the then Rating (as determined in accordance with
the definition of "Applicable Margin") of Borrower. As of the date of this
Agreement, Borrower has obtained Ratings of (x) BBB from Standard & Poor's, (y)
Baa2 from Moody's Investor's Service, and (z) BBB+ from Duff & ▇▇▇▇▇▇, Inc., and
the Applicable Facility Fee Percentage for the current calendar quarter is
0.15%.
"Applicable Margin" means, as of any date of determination, (i) if no Rating
-----------------
is then in effect, 1.35%; or (ii) effective on the first day of the fiscal
--
quarter following Borrower's obtaining a Rating (or a change in the then-
effective Rating) and giving written notice thereof to Agent, the Applicable
Margin set forth below opposite the then Rating (as hereinbelow determined) of
Borrower:
Applicable
Rating Facility Fee
(S&P/Moody's) Applicable Margin Percentage
----------------- ------------------ -------------
A-/A3 or better 0.55% 0.10%
BBB+/Baal 0.60% 0.15%
BBB/Baa2 0.70% 0.15%
BBB-/Baa3 1.00% 0.20%
below BBB-/Baa3 1.35% 0.20%
3
As used herein, the term "Rating" shall mean the rating of Borrower's senior
long-term unsecured debt obligations, as determined by one or more Rating
Agencies. If two Ratings are obtained by Borrower, then the lower Rating shall
control for purposes of determining the Applicable Margin; provided, however,
that if the difference between the two Ratings is greater than two levels, then
Agent shall reasonably determine the average of such Ratings, which shall
control (and, if such average is greater than one of the rating levels specified
in the foregoing table but less than the next higher rating level, the lower of
the two rating levels shall be deemed the average of the two Ratings for
purposes of determining the Applicable Margin). If three or more Ratings are
obtained by Borrower, then all but the two highest Ratings shall be disregarded,
and the Applicable Margin shall be determined in accordance with the preceding
sentence as if such two highest Ratings were the only two Ratings obtained. If
Borrower shall obtain a Rating from a Rating Agency other than Standard & Poor's
Corporation or Moody's Investor's Service, Inc., then Agent shall reasonably
determine the rating-level equivalents of such other Rating Agency for purposes
of determining the Applicable Margin in accordance with the matrix above. Based
on Borrower's current Ratings, the Applicable Margin for the current calendar
quarter is 0.70%.
"Availability Period" means the period commencing on the Effective Date and
-------------------
ending on the Maturity Date, subject to earlier termination in accordance with
the provisions of the Loan Documents.
"Bank" has the meaning specified in the introductory sentence of this
----
Agreement; BofA in its capacity as a lender hereunder is one of the Banks.
"Bid Loan" means an Advance by a Bank or its Designated Bid Lender pursuant to
--------
the Bid Loan Facility, and may be either an Absolute Rate Bid Loan or a LIBOR
Bid Loan.
"Bid Loan Facility" means the credit facility for the requesting and making of
-----------------
Bid Loans described in Sections 1.2(c) and 1.3(b).
"Bid Loan Rate Period" means (i) with respect to a LIBOR Bid Loan, the period,
--------------------
commencing on the date of such LIBOR Bid Loan and ending on a date (determined
by Agent in accordance with the practices of the London U.S. dollar inter-bank
market) that is one, two, three or six months later, but not extending beyond
the Maturity Date; and (ii) with respect to an Absolute Rate Bid Loan,
commencing on the date of such Absolute Rate Bid Loan and ending on a Banking
Day that is at least 14, but no more than 180 days, later (but not extending
beyond the Maturity
4
Date), as specified by Borrower in the relevant Competitive Bid Request.
"Bid Loan Facility Limit" means, at any time, an amount equal to fifty
-----------------------
percent (50%) of the Maximum Loan Amount.
"BofA" means Bank of America National Trust and Savings Association, a
----
national banking association.
"Borrower Entity" means each Person, other than a Joint Venture Entity, in
---------------
which Borrower, directly or indirectly, has made an Investment, whether or not
under GAAP the financial results of such Person are reported on a consolidated
basis with the results of Borrower.
"Borrowing" means a borrowing hereunder consisting of Advances of the same
---------
type (i.e., Committed Loans, Absolute Rate Bid Loans, or LIBOR Bid Loans) made
----
to Borrower on the same day and (except in the case of Committed Loans accruing
interest at the Reference-based Rate) having the same Rate Period or Bid Loan
Rate Period, as the case may be.
"Capital Adequacy Regulation" means any guideline or directive of any central
---------------------------
bank or other Governmental Authority, or any other law, rule or regulation
regarding capital adequacy of a Bank or of any corporation controlling a Bank.
"Charter Documents" means, with respect to any Person, such Person's
-----------------
partnership agreement (if any), articles or certificate of incorporation or
organization or other document required to effect the formation of such Person
(including all certificates of determination or other instruments relating to
the rights of preferred stockholders of such Person) (if any), by-laws (if any),
and any operating agreement, management agreement or other agreement among any
stockholders or other holders of any interest in such Person, in their
respective capacities as such, in each case, as at any time amended or restated.
"Co-Lender Agreement" has the meaning ascribed to it in Section 10.4.
-------------------
"Committed Loan" means an Advance made by the Banks pursuant to the Line of
--------------
Credit described in Section 1.1, and shall include (i) each other Advance,
initially made under the Swing Line, that is deemed converted into a Committed
Loan pursuant to Section 1.2(b)(iii), (ii) except where the context otherwise
requires, each Swing Line Borrowing, and (iii) each Advance consisting of the
payment by Agent of a draw under a Letter of Credit.
5
"Committed Loan Availability" means, at any time, the Maximum Loan Amount less
---------------------------
(i) the aggregate principal amount of all Bid Loans then outstanding, and (ii)
the Letter of Credit Exposure.
"Commitment" means the amount of the Line of Credit for which each Bank is
----------
obligated.
"Competitive Bid" means an offer by a Bank to make a Bid Loan in response to a
---------------
Competitive Bid Request.
"Competitive Bid Request" means a notice, in substantially the form of Exhibit
-----------------------
C, requesting that the Banks submit bids for a Bid Loan.
"Consolidated" means, with respect to any Person, that such Person's financial
------------
results are consolidated (or required to be consolidated) under GAAP with the
financial results of Borrower.
"Contractual Obligation", as applied to any Person, means any provision of any
----------------------
securities issued by that Person or any indenture, mortgage, deed of trust,
lease, contract, undertaking, document or instrument to which that Person is a
party or by which it or any of its properties is bound, or to which it or any of
its properties is subject.
"Controlled" means, as applied to any Borrower Entity or Joint Venture Entity,
----------
(i) that Borrower, or another Person that is Controlled by Borrower, (a) owns at
least fifty percent (50%) of the outstanding equity interests in such Borrower
Entity or Joint Venture Entity, and (b) serves as a managing partner, managing
member, trustee or in any similar capacity, however denominated, of such
Borrower Entity or Joint Venture Entity, and (ii) that Borrower, or such other
Controlled Person, has discretion and authority, under such Borrower Entity's or
Joint Venture Entity's Charter Documents, to cause such Borrower Entity or Joint
Venture Entity to encumber or sell such Borrower Entity's or Joint Venture
Entity's real property (subject, in the case of BRE Property Investors LLC, to
any contractual restrictions on taxable sales or exchanges of property set forth
in its Charter Documents, as in effect on the date hereof; and "Control" has a
-------
correlative meaning.
"Controlled Funds Agreement" means an agreement in substantially the form of
--------------------------
Exhibit H, as such agreement may at any time be amended, supplemented or
replaced.
"CPA" means Ernst & Young, LLP, any other "big six" accounting firm or another
---
firm of certified public accountants of national standing selected by Borrower
and acceptable to the
6
Majority Banks.
"Current Value Method" means, with respect to each real property asset as of
--------------------
any date: (i) if such real property has not been operated under ownership by
Borrower, a Controlled Borrower Entity or a Controlled Joint Venture Entity for
at least three (3) months, or is a completed building that is part of a larger
development project that remains under construction, on a cost basis, as
reflected in such owner's books in accordance with GAAP; and (ii) in any other
case, capitalization of the Net Operating Income for such real property for the
four (4) most recent calendar quarters (or, if Borrower, a Controlled Borrower
Entity or a Controlled Joint Venture Entity has owned a real property asset for
less than such time period, then the annualized Net Operating Income for such
real property based on the period of ownership by such Person), as certified by
Borrower to Agent and the Banks, at an annual rate equal to the Applicable
Capitalization Rate.
"Debt Service" means, for the most recent three (3) month period, Interest
------------
Expense for such period plus scheduled or otherwise required principal
----
amortization (i.e., excluding any balloon payment due at maturity) for such
----
period on all of Borrower's Indebtedness, determined on a consolidated basis,
plus all dividends accrued during such period in respect of any and all
----
outstanding preferred shares of Borrower, whether or not declared or paid.
"Designated Bid Lender" means a special purpose corporation, organized under
---------------------
the laws of the United States or any subdivision thereof, that is engaged in
making, purchasing or otherwise investing in commercial loans in the ordinary
course of its business and that (i) shall have become a party to this Agreement
and the Co-Lender Agreement pursuant to Section 11.5, and (ii) is not otherwise
a Bank. References herein to a Bank's Designated Bid Lender or a Designating
Bank's Designated Bid Lender mean the Designated Bid Lender party to a
Designation Agreement with such Bank or Designating Bank.
"Designating Bank" means a Bank that has entered into a Designation Agreement
----------------
with a Designated Bid Lender pursuant to Section 11.5.
"Designation Agreement" means a designation agreement, in substantially the
---------------------
form of Exhibit E, entered into by a Bank and a Designated Bid Lender and
accepted by Borrower and Agent.
"EBITDA" means, for the most recent three (3) month period, (i) the sum of (a)
------
Borrower's consolidated net income as determined in accordance with GAAP, (b)
depreciation and amortization expense and other non-cash items deducted on
7
Borrower's consolidated financial statements in determining such net income, (c)
interest expense (as it appears on Borrower's consolidated income statement in
accordance with GAAP), and (d) taxes imposed by any jurisdiction upon Borrower's
or any Consolidated Borrower Entity's or Consolidated Joint Venture Entity's net
income, absent the effect of extraordinary items or asset sales or write-ups or
forgiveness of Indebtedness; minus (ii) the sum of (a) $50 per apartment unit in
-----
the case of a real property asset, owned by Borrower or any Consolidated
Borrower Entity or Consolidated Joint Venture Entity, that is improved with an
apartment project, and (b) in the case of any other real property asset owned by
Borrower or any Consolidated Borrower Entity or Consolidated Joint Venture
Entity, $0.125 for each rentable square foot of the improvements thereon. (All
references in this Agreement to "apartment project" shall be understood to mean
multi-family residential properties held for rental.)
"Effective Date" means the date on which this Agreement has been executed and
--------------
delivered by each of the parties hereto and the conditions precedent to the
initial Advance hereunder set forth in Section 4.1 have been satisfied.
"Eligible Assignee" means (i) a commercial bank or investment bank organized
-----------------
under the laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000; (ii) a Person that is primarily
engaged in the business of commercial banking and is an Affiliate of a Bank; and
(iii) any other Person approved by Majority Banks and Agent.
"Event of Default" has the meaning given to it in Section 8.
----------------
"Federal Funds Rate" means, for any day, the rate published by the Federal
------------------
Reserve Bank of New York for the preceding Banking Day as "Federal Funds
(Effective)"; (or, if not published, the arithmetic mean of the rates for
overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on that
day quoted by three brokers of Federal Funds in New York City as determined by
Agent).
"Funding Date" means (i) with respect to any Advance, the date of the funding
------------
of such Advance, and (ii) with respect to the issuance of any Letter of Credit,
the date of such issuance.
"Funds From Operations" means, for any period, Borrower's consolidated net
---------------------
income (computed in accordance with GAAP), excluding gains (or losses) from debt
restructuring and sales of property, plus depreciation and amortization, and
after adjustments for unconsolidated Borrower Entities and unconsolidated Joint
Venture Entities. (Adjustments for
8
unconsolidated partnerships and unconsolidated Joint Venture Entities shall be
calculated to reflect funds from operations on the same basis.)
"GAAP" means generally accepted accounting principles set forth in the
----
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board, or in such other statements by such
other entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"Governmental Authority" means any government, state or other political
----------------------
subdivision thereof, any central bank (or similar monetary or regulatory
authority) thereof, any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government, and any
entity owned or controlled through capital ownership or otherwise by any of the
foregoing.
"Guaranty" means a guaranty of Borrower's obligations under the Loan
--------
Documents, executed by one or more Borrower Entities or Joint Venture Entities,
in substantially the form of Exhibit B.
---------
"Guarantor" means each Borrower Entity or Joint Venture Entity that is a party
---------
to a Guaranty.
"Indebtedness", as applied to any Person (and without duplication), means (i)
------------
all indebtedness, obligations or other liabilities for borrowed money, (ii) all
indebtedness, obligations or other liabilities evidenced by notes, bonds,
debentures or other similar instruments, (iii) all reimbursement obligations and
other liabilities with respect to letters of credit, banker's acceptances,
surety bonds or similar instruments issued for such Person's account, (iv) all
obligations to pay the deferred purchase price of property or services, (v) all
obligations in respect of capital leases, (vi) all Accommodation Obligations,
and (vii) all indebtedness, obligations or other liabilities of such Person or
others secured by a Lien on any asset of such Person, whether or not such
indebtedness, obligations or liabilities are assumed by, or are a personal
liability of, such Person (including, without limitation, the principal amount
of any assessment or similar indebtedness encumbering any asset); provided that,
--------
in determining the amount of any Person's indebtedness under clause (ii) of this
definition in respect of construction financing, only the outstanding principal
amount of such construction financing (and not the unused portion of the related
commitment) shall be included.
9
"Indemnified Liabilities" has the meaning given in Section 2.3.
-----------------------
"Indemnified Person" has the meaning given in Section 2.3.
------------------
"Intangible Assets" means all assets that would be classified as intangible
-----------------
assets under GAAP, including, without limitation, goodwill, patents, trademarks,
trade names, copyrights and franchises, treasury stock held by Borrower or any
Consolidated Borrower Entity or Consolidated Joint Venture Entity, and deferred
charges (including but not limited to unamortized debt discount and expense,
organization expenses, experimental and development expenses, but excluding
prepaid expenses).
"Interest Expense" means, for any period, the total interest expense of
----------------
Borrower, whether paid, accrued or capitalized (including the interest component
of capital leases and including interest-related costs such as amounts payable
under interest rate swaps, caps or other derivatives and loan fees, to the
extent that such costs are permitted to be amortized under GAAP, but excluding
amounts, such as prepayment premiums and breakage fees, that are not permitted
to be amortized under GAAP), for such period, determined on a consolidated
basis.
"Investment" means in the case of each Borrower Entity and Joint Venture
----------
Entity, Borrower's total investment therein determined on the basis of actual
cost, including all equity contributions, loans, advances and guaranties or
other contractual undertakings in the nature thereof, whether funded or
committed.
"Joint Venture Entity" means a Person (i) in which Borrower, directly or
--------------------
indirectly, has made an Investment, whether or not under GAAP the financial
results of such Person should be reported on a consolidated basis with those of
Borrower, and (ii) which is in substance a joint venture, formed for the sole
purpose of developing apartment projects, with a Person, other than an Affiliate
of Borrower, that is (a) a regulated insurance company or a regulated financial
institution or other Person generally recognized as an "institutional investor,"
in each case, that is engaged in the ordinary course of its business (directly
or through wholly-owned subsidiaries) in real estate investment activities, or
(b) a wholly-owned Subsidiary of any such insurance company or other financial
institution or institutional investor.
"Lending Office" means, as to any Bank or Designated Bid Lender, the office
--------------
specified as its Lending Office on Schedule I or as such Person may designate to
Borrower and Agent.
10
"Letter of Credit Documents" has the meaning given to it in Section 1.2(d).
--------------------------
"Letter of Credit Exposure" means, at any time, the aggregate amount remaining
-------------------------
to be drawn under all outstanding Letters of Credit.
"Letter of Credit Obligations" mean, collectively, all reimbursement and other
----------------------------
obligations of Borrower in respect of Letters of Credit.
"Letters of Credit" means the standby letters of credit issued from time to
-----------------
time by Agent, for the account of Borrower, pursuant to Section 1.2(d), in each
case, as the same may be drawn on, advanced, replaced or modified from time to
time.
"LIBOR Auction" means a solicitation of Competitive Bids setting forth LIBOR
-------------
Bid Margins pursuant to Section 1.3(b).
"LIBOR Bid Loan" means a Bid Loan that bears interest at the relevant LIBOR
--------------
Bid Margin above (or below, as the case may be) the LIBOR Rate (determined as
described in the definition of "LIBOR Bid Margin").
"LIBOR Bid Margin" means, in connection with any LIBOR Auction, a margin
----------------
(expressed in multiples of 1/1000th of one basis point) above or below the LIBOR
Rate (determined, with respect to any LIBOR Bid Loan, in the same manner as the
LIBOR Rate is determined under the Note, except based on the principal amount
and Bid Loan Rate Period of the relevant LIBOR Bid Loan) offered for any Bid
Loan to be made pursuant thereto.
"Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment,
----
deposit arrangement, security interest, encumbrance, preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever, including without limitation any conditional sale or other title
retention agreement, the interest of a lessor under a capital lease, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement or document having similar
effect (other than a financing statement filed by a "true" lessor pursuant to
Section 9408 of the Uniform Commercial Code) naming the owner of the asset to
which such Lien relates as debtor, under the Uniform Commercial Code or other
comparable law of any jurisdiction.
"Line of Credit" means the line of credit described in Section 1.1.
--------------
"Liquidity Provider" means, for any Designated Bid Lender and at any time, on
------------------
a collective basis, the financial
11
institutions that at such date are providing liquidity or credit support
facilities to or for the account of such Designated Bid Lender to fund such
Designated Bid Lender's obligations hereunder or to support the securities, if
any, issued by such Designated Bid Lender to fund such obligations.
"Loan" means, collectively, all Advances hereunder from time to time
----
outstanding under the Line of Credit.
"Loan Documents" means this Agreement, the Note, each Guaranty, the Letter of
--------------
Credit Documents, each Controlled Funds Agreement and all other agreements,
instruments and documents (together with amendments and supplements thereto and
replacements thereof) now or hereafter executed by Borrower or any Guarantor
which evidence or support the obligations of Borrower in respect of the credit
facilities made available to Borrower pursuant hereto.
"Majority Banks" means, at any time, a Bank or Banks then having in excess of
--------------
66 2/3% of the Commitments (or, if the Commitments have been terminated pursuant
to the Loan Documents, holding in excess of 66 2/3% of the then aggregate unpaid
principal amount of the Advances, determined as if each Designating Bank held
(in addition to outstanding Committed Loans and Bid Loans made for its own
account) all outstanding Bid Loans made by its Designated Bid Lender).
"Material Adverse Effect" means, with respect to a Person, a material adverse
-----------------------
effect upon the condition (financial or otherwise), operations, performance or
properties of such Person or its ability to perform its obligations under the
Loan Documents. The phrase "has a Material Adverse Effect" or "will result in a
Material Adverse Effect" or words substantially similar thereto shall in all
cases be intended to mean "has resulted, or will or could reasonably be
anticipated to result, in a Material Adverse Effect", and the phrase "has no (or
does not have a) Material Adverse Effect" or "will not result in a Material
Adverse Effect" or words substantially similar thereto shall in all cases be
intended to mean "does not or will not or could not reasonably be anticipated to
result in a Material Adverse Effect".
"Material Borrower Entity" means a Borrower Entity as to which either of the
------------------------ ------
following conditions exists: (i) Borrower's pro rata share of the consolidated
assets of such Person (as reflected on the GAAP-prepared financial statements of
such Borrower Entity) exceeds $30,000,000 at the end of any fiscal quarter, with
"pro rata" share being Borrower's effective percentage ownership of such Person;
or (ii) Borrower's pro rata share of such Person's consolidated net income
--
exceeds five percent (5%) of Borrower's consolidated net income for the
12
immediately preceding four fiscal quarters, determined in accordance with GAAP.
"Maturity Date" means, at any time, the then-effective Maturity Date under the
-------------
Note.
"Maximum Loan Amount" has the meaning ascribed to it in Section 1.1(a).
-------------------
"Net Offering Proceeds" means all cash proceeds received by Borrower as a
---------------------
result of the sale of common, preferred or other classes of stock in Borrower
(if and only to the extent reflected in stockholders' equity on the consolidated
balance sheet of Borrower prepared in accordance with GAAP), minus (i)
-----
attorneys' fees and disbursements, (ii) accountants' fees, (iii) underwriters'
or placement agents' fees, discounts or commissions, (iv) brokerage,
consultants' and other fees, and (v) printing, registration and related
expenses, in each case, actually incurred in connection with such sale.
"Net Operating Income" means, at any time with respect to any real property
--------------------
asset, the cash-basis net operating income of such real property determined on a
basis consistent with the operating statements provided by Borrower to Agent
prior to the Effective Date, adjusted as follows: (i) by deducting, in respect
of capital reserves, on an annualized basis: (a) $200 per apartment unit in the
case of a real property asset improved with an apartment project, and (b) in the
case of any other real property asset, $0.50 for each rentable square foot of
the improvements thereon; and (ii) by deducting (to the extent not already
deducted in determining such net operating income) actual management fees paid
in respect of the management of such real property asset for the period in
question.
"Non-Recourse Indebtedness" means, with respect to any Person, Indebtedness of
-------------------------
that Person with respect to which recourse to such Person for payment is
contractually limited to specific assets encumbered by a Lien securing such
Indebtedness. Notwithstanding the foregoing, Indebtedness of any Person shall
not fail to constitute Non-Recourse Indebtedness by reason of the inclusion in
any document evidencing, governing, securing or otherwise relating to such
Indebtedness to the effect that such Person shall be liable, beyond the assets
securing such Indebtedness, for (i) misapplied moneys, including insurance and
condemnation proceeds and security deposits, (ii) liabilities (including
environmental liabilities) of the holders of such Indebtedness and their
affiliates to third parties, (iii) breaches of customary representations and
warranties given to the holders of such Indebtedness, (iv) commission of waste
with respect to any part of the collateral securing such Indebtedness, (v)
recovery of rents, profits or other income attributable to
13
the collateral securing such Indebtedness collected following a default, (vi)
fraud, gross negligence or willful misconduct, and (vii) breach of any covenants
regarding compliance with ERISA.
"Note" means the Promissory Note executed by Borrower in favor of Agent
----
pursuant to the Existing Agreement, as at any time amended, supplemented or
replaced.
"Obligations" means all advances, debts, liabilities, obligations and
-----------
covenants arising under any Loan Document owing by Borrower to any Bank or
Designated Bid Lender, Agent or any Indemnified Person, whether absolute or
contingent, due or to become due, now existing or hereafter arising.
"Other Unencumbered Property Owner" means any Borrower Entity or Joint Venture
---------------------------------
Entity, other than a Guarantor, that owns Unencumbered Pool Property any portion
of the value of which is included in calculating Total Real Property Market
Value of Unencumbered Real Property.
"Person" means any natural person, employee, corporation, limited partnership,
------
general partnership, joint stock company, limited liability company, joint
venture, association, company, trust, bank, trust company, land trust, business
trust or other organization, whether or not a legal entity, or any other non-
governmental entity, or any Governmental Authority.
"Pro Rata Share" means, as to any Bank at any time, the percentage equivalent
--------------
(expressed as a decimal rounded to the twelfth decimal place) at such time of
such Bank's share of the Maximum Loan Amount.
"Prudential Indebtedness" means the unsecured Indebtedness of Borrower to The
-----------------------
Prudential Insurance Company of America in the original principal amount of
$73,000,000.
"Rating Agency" means each of Standard & Poor's Corporation, Moody's
-------------
Investor's Service, Inc., Duff and ▇▇▇▇▇▇ and Fitch Investors or such other
nationally recognized rating service or services as may be mutually agreed upon
by Borrower and Agent, with the consent of the Majority Banks.
"Real Property" means all improved, income-producing real property (i) owned
-------------
in fee entirely by Borrower or by a Controlled Borrower Entity or Controlled
Joint Venture Entity, and (ii) as to which at least eighty-five percent (85%) of
(a) the apartment units (in the case of real property improved with an apartment
project) or (b) the net rentable square footage of the improvements thereon, in
the case of all other real property, is occupied by tenants, under written
leases, who have commenced
14
paying rent. Where a real estate development project consisting of several
buildings is under construction, each building, as it is completed and satisfies
the requirements of the preceding clauses (i) and (ii), shall be treated as a
separate "Real Property" for purposes of this definition until such time as all
of the buildings included in that project have been completed. Upon completion,
the project shall be treated as a whole for purposes of determining whether it
qualifies as "Real Property."
"Secured Indebtedness" means, without duplication, all Indebtedness, of
--------------------
Borrower or any Consolidated Borrower Entity or Consolidated Joint Venture
Entity, that is secured by a Lien on any real property asset.
"Subsidiary" of a Person means any other Person of which 50% or more of the
----------
voting stock, membership interests or other equity interests is owned or
controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof.
"Swing Line" has the meaning specified in Section 1.2(b).
----------
"Swing Line Availability Period" means the period commencing on the Effective
------------------------------
Date and ending on the earlier of (i) the last day of the Availability Period,
and (ii) the later of (A) such date as may be designated in a notice delivered
to Borrower by Agent upon the written instructions (or with the written consent)
of the Majority Banks, and (B) the date that is thirty (30) days after the date
upon which such notice becomes effective in accordance with the notice
provisions of the Loan Agreement.
"Swing Line Borrowing" means a Borrowing effected under the Swing Line.
--------------------
"Swing Line Lender" means Agent acting in its capacity as the lender under the
-----------------
Swing Line, and any successor to Agent in that capacity.
"Tangible Net Worth" means, at any time, (i) shareholders' equity, as shown on
------------------
Borrower's consolidated financial statements prepared in accordance with GAAP,
exclusive of minority interests, minus (ii) all Intangible Assets.
-----
"Total Assets" means, at any time, the sum of (i) the aggregate value, using
------------
the Current Value Method, of all Real Property owned directly by Borrower or by
any Consolidated Borrower Entity or Consolidated Joint Venture Entity, plus (ii)
to the extent not in excess of 15% of Total Assets, the book value (net of any
applicable reserves) of all other tangible
15
assets of Borrower as shown on its most recent quarterly financial statements
prepared on a consolidated basis in accordance with GAAP.
"Total Liabilities" means (i) all Indebtedness of Borrower, whether or not
-----------------
such Indebtedness should be included as a liability on the balance sheet of
Borrower in accordance with GAAP, plus (ii) all other liabilities of every
----
nature and kind of Borrower that should be included as liabilities on the
balance sheet of Borrower in accordance with GAAP (other than minority
interests), in each case, determined on a consolidated basis.
"Total Real Property Market Value of Unencumbered Real Property" means, at any
--------------------------------------------------------------
time, the sum of (i) the aggregate value (as determined using the Current Value
Method) of all Unencumbered Real Properties owned directly by Borrower or by any
Controlled Borrower Entity that is a Guarantor, plus (ii) to the extent that the
aggregate contribution to Total Real Property Market Value of Unencumbered Real
Property of this clause (ii) is not in excess of 10% of Total Real Property
Market Value of Unencumbered Real Property, for each Other Unencumbered Property
Owner, Borrower's Share of the aggregate value of all Unencumbered Real
Properties owned directly by such Person (as determined using the Current Value
Method).
"Unencumbered Real Property" means all Real Property as to which (i) neither
--------------------------
such Real Property, nor any interest in the Person owning such Real Property, is
subject to any Lien (other than Liens in respect of nondelinquent real estate
taxes or assessments) or to any agreement (other than this Agreement or any
other Loan Document, and including any provision of such Person's charter
documents) that (A) prohibits the creation of any Lien thereon as security for
Indebtedness of the Person owning such Real Property; or (B) limits the
Indebtedness owed to the Banks in respect of which such Real Property may be
encumbered to less than the full market value (determined using the Current
Value Method) of such Real Property; (ii) the Person owning such Real Property,
if a Borrower Entity or a Joint Venture Entity, has no Indebtedness other than
Indebtedness permitted to exist under Section 6.4(i) (whether or not such Person
is a Guarantor); and (iii) no event described in Section 8.3 or Section 8.4 has
occurred and is continuing with respect to the Person that owns such Real
Property (and including, for purposes of this definition only, any such event
with respect to a Guarantor or Other Unencumbered Property Owner, whether or not
it is a Material Borrower Entity, other than a merger or liquidation of a
Guarantor or Other Unencumbered Property Owner into a Material Borrower Entity
or Borrower).
"Unsecured Indebtedness" means Indebtedness of Borrower not secured by a
----------------------
Lien, determined on a consolidated basis.
16
"Unsecured Interest Expense" means, for any period, the total interest expense
--------------------------
of Borrower with respect to Unsecured Indebtedness (whether paid, accrued or
capitalized (including the interest component of capital leases and including
interest-related costs such as amounts payable under interest rate swaps, caps
or other derivatives and loan fees, to the extent that such costs are permitted
to be amortized under GAAP, but excluding amounts, such as prepayment premiums
and breakage fees, that are not permitted to be amortized under GAAP)) for such
period, determined on a consolidated basis.
1. CREDIT FACILITIES AMOUNTS AND TERMS
1.1 Line of Credit Amount.
---------------------
(a) Line of Credit. During the Availability Period, the Banks will
--------------
provide a line of credit (the "Line of Credit"; also referred to as the "Loan")
to Borrower in accordance with the other provisions hereof. The amount of the
Line of Credit is Four Hundred Million Dollars ($400,000,000) (the "Maximum Loan
Amount"); provided that the Borrower shall have the right, upon each August 1
following the Effective Date, to reduce the Maximum Loan Amount by up to
$250,000,000 in the aggregate, in increments of $10,000,000 or integral
multiples of $10,000,000. Each reduction under the preceding clause (2) shall
become effective on the date both of the following conditions have been
satisfied:
(i) Borrower shall have given at least ten (10) Business Days'
prior written notice to Agent irrevocably and unconditionally reducing the
Maximum Loan Amount, as of such August 1, in an amount equal to $10,000,000
or an integral multiple of $10,000,000 (A) that, together with all prior
reductions in the Maximum Loan Amount, does not exceed $250,000,000 and (B)
---
that does not cause the Maximum Loan Amount, as so reduced, to be less than
twice the aggregate outstanding principal amount of all Bid Loans having
Bid Loan Rate Periods extending beyond the proposed reduction date; and (C)
---
that does not cause the Maximum Loan Amount, as so reduced, to be less than
the sum of (1) the aggregate outstanding principal amount of all Bid Loans
having Bid Loan Rate Periods extending beyond the proposed reduction date,
plus (2) the Letter of Credit Exposure on the proposed reduction date; and
---
(ii) if the sum of (A) the aggregate principal balance of all
Advances under the Loan Documents then outstanding, plus (B) the Letter of
Credit Exposure, exceeds the Maximum Loan Amount as so reduced, Borrower
shall have made a voluntary prepayment of principal of the Advances in
accordance with the applicable provisions of the Note and the Loan
Documents, in an aggregate amount sufficient to
17
reduce the sum of the aggregate outstanding balance of the Advances, plus
the Letter of Credit Exposure, to such reduced amount of the Maximum Loan
Amount or less, together with accrued and unpaid interest on the amount of
such prepayment and any applicable "Prepayment Premium" payable under the
Note or any other Loan Documents.
No such reduction of the Maximum Loan Amount shall relieve Borrower of any
obligation in respect of any fees paid or accrued prior to the date of such
reduction. Upon the effectiveness of each such reduction, all references to the
"Maximum Loan Amount" shall be understood to mean and refer to a loan facility
of an amount equal to $400,000,000 less the aggregate amount of the reductions
in the Maximum Loan Amount that have been so effected (including by reason of
prior reductions, if any).
(b) Revolving Credit. This is a revolving line of credit. During
----------------
the Availability Period, Borrower may from time to time repay principal amounts
(subject to the provisions of Exhibit B to the Note) and reborrow such
principal, subject to compliance with the terms and conditions of the Loan
Documents.
(c) Minimum Advance. Each Advance under the Line of Credit,
---------------
other than an Advance in respect of a draw under a Letter of Credit, must be for
at least Five Hundred Thousand Dollars ($500,000), or for the amount of the
remaining available Line of Credit if less.
(d) Limit. Borrower agrees not to permit the sum of the
-----
aggregate principal amount of all Advances under the Loan Documents outstanding
at any time, plus the Letter of Credit Exposure, to exceed the Maximum Loan
Amount.
1.2 The Credit Facilities.
---------------------
(a) Line of Credit.
--------------
(i) Subject to the terms and conditions hereof, each Bank
severally agrees to fund its Pro Rata Share of each Committed Loan under
the Line of Credit from time to time during the Availability Period;
provided, however, that at no time shall the aggregate principal
-------- -------
amount of all Committed Loans then outstanding exceed the Committed Loan
Availability. The proceeds of each such Advance shall be delivered to
Borrower in accordance with the provisions of the Loan Documents.
(ii) Each of Sanwa Bank California and U.S. Bank, which is
becoming a party hereto as of the Effective Date with respect to its
Commitment set forth on the signature pages hereto, shall pay to Agent, for
the account of the
18
other Banks, its Pro Rata Share of the outstanding principal of the Loan as
of the Effective Date. In addition, BofA shall pay to Agent, for the
account of the other Banks, the amount by which BofA's Pro Rata Share of
the outstanding principal of the Loan, determined immediately after the
effectiveness of the increase in the Maximum Loan Amount provided for
hereby, exceeds BofA's Pro Rata Share thereof, determined immediately
before the effectiveness of the increase in the Maximum Loan Amount
provided for hereby. Borrower and each Bank acknowledge that, as of the
Effective Date and immediately after giving effect to the increase in the
Maximum Loan Amount provided for hereby, the Loan, the principal amount
outstanding thereunder, and each Bank's Pro Rata Share and Commitment (by
dollar amount) are:
The Loan: $400,000,000
Total Current Outstanding Principal
(as of the Effective Date): $136,000,000
Each Bank's Commitment and Pro Rata Share of the Loan are as
set forth below its name on the signature pages hereto.
(b) Swing Line Subfacility.
----------------------
(i) In addition to its other agreements with respect to the
making of Committed Loans, the Swing Line Lender additionally agrees, on
the terms and conditions of the Loan Documents (and subject to the Swing
Line Lender's discretion, as provided in Section 1.2(b)(ii)(B)), to make
Advances to Borrower from time to time, on a same-day basis, on Banking
Days during the Swing Line Availability Period that do not fall within the
last three (3) Business Days preceding a noticed reduction in the Maximum
Loan Amount pursuant to Section 1.1(a), in an aggregate principal amount
not exceeding at any one time the lesser of (A) (1) the Committed Loan
Availability, less (2) the outstanding principal of all Committed Loans
other than Swing Line Borrowings, and (B) Fifty Million Dollars
($50,000,000) (the foregoing subfacility, the "Swing Line"). The Swing Line
Lender's obligation to fund Swing Line Borrowings shall be unaffected by
its making of any Committed Loans or issuance of Letters of Credit,
notwithstanding that the sum of the Swing Line Borrowings plus the Swing
Line Lender's Pro Rata Share of the aggregate principal amount of the
outstanding Committed Loans and Letter of Credit Exposure, may exceed the
Swing Line Lender's Commitment.
19
(ii) Procedure.
---------
(A) If Borrower desires to effect a Swing Line Borrowing,
Borrower shall deliver to Agent, no later than 11:00 a.m. (California time)
on the proposed borrowing date, a Borrowing Notice identifying the
requested Borrowing as a Swing Line Borrowing and otherwise complying with
the provisions of the Loan Documents relating generally to Borrowing
Notices. Any Borrowing Notice received after 11:00 a.m. (California time)
with respect to a requested Swing Line Borrowing shall be deemed a request
for a Swing Line Borrowing to be made on the next Banking Day. Each
Borrowing Notice requesting that a Swing Line Borrowing be made shall also
constitute a Borrowing Notice requesting that a Committed Loan in the
amount of the requested Swing Line Borrowing be made, as a Committed Loan
to bear interest at the Reference-based Rate, on the date that is two (2)
Banking Days after the date of such Swing Line Borrowing, the proceeds of
which shall be applied (if the requested Swing Line Borrowing is made) to
repayment of such Swing Line Borrowing. Each Swing Line Borrowing, and each
Committed Loan made pursuant to the related Borrowing Notice, shall bear
interest at the Reference-based Rate.
(B) If Agent, acting in its capacity as the Swing Line
Lender, elects, in its sole and absolute discretion, to make the requested
Swing Line Borrowing (but subject to the limits set forth in Section
1.2(b)(i) and to the requirement that the requested Funding Date fall
within the Swing Line Availability Period but not within the last three (3)
Business Days preceding a noticed reduction in the Maximum Loan Amount
pursuant to Section 1.1(a)), and if all other conditions precedent to the
making of Committed Loans generally, are then satisfied, Agent shall (a)
notify Borrower that it has elected to make the requested Swing Line
Borrowing, and (b) disburse the proceeds of such Swing Line Borrowing in
accordance with provisions of this Agreement generally applicable to the
disbursement of Advances. The other Banks shall have no obligation to fund
their respective Pro Rata Shares of any Swing Line Borrowing, and Agent
alone (as the Swing Line Lender) shall fund all Swing Line Borrowings.
(iii) Effect of Swing Line Borrowings on Obligations of Banks.
-------------------------------------------------------
(A) Each Bank shall (subject to the limitation that no Bank
shall be required to fund any Committed Loan that would cause its Committed
Loans, plus its Pro Rata Share of the Letter of Credit Exposure, to
20
exceed such Bank's Commitment), pay to the Swing Line Lender, on the date
that is two (2) Banking Days after the date of any Swing Line Borrowing, in
immediately available funds and otherwise as provided in the Loan Documents
or the Co-Lender Agreement (as defined below), as applicable, such Bank's
Pro Rata Share of the principal amount of such Swing Line Borrowing,
irrespective of the existence of any Event of Default or event that, with
the giving of notice or passage of time, or both, would constitute an Event
of Default, and without regard to whether or not on such date the other
conditions precedent to Committed Loans are satisfied. Upon such funding,
each Bank shall be deemed (1) if the conditions precedent to the making of
Committed Loans are in fact satisfied as of such date, to have made an
Advance to Borrower in a principal amount equal to such Bank's Pro Rata
Share of such Swing Line Borrowing, or (2) in any other event, to have
acquired from the Swing Line Lender (and the Swing Line Lender shall be
deemed to have assigned to each such Bank) a percentage interest in such
Swing Line Borrowing equal to such Bank's Pro Rata Share thereof. For
purposes of determining the availability of Swing Line Borrowings or
Committed Loans, such Swing Line Borrowing shall thereafter be deemed a
Committed Loan, and no longer a Swing Line Borrowing.
(B) Each Bank's obligation to fund (and, if applicable, to
purchase from the Swing Line Lender) its Pro Rata Share of a Swing Line
Borrowing pursuant to this Section 1.2(b) shall be absolute and
unconditional under any and all circumstances (including, without
limitation, irrespective of any intervening bankruptcy of Borrower or
acceleration of the Loan). It is not the parties' intent that the
obligations of the Banks under this Section 1.2(b) constitute guaranties or
obligations of suretyship. If and to the extent, however, that the
obligations of any Bank under this Section 1.2(b) are determined to be
those of a guarantor or surety, such Bank, with full knowledge of the
consequences thereof, hereby expressly waives the benefit of each and every
right or defense of a guarantor or surety the effect of which would relieve
such Bank of all or any portion of its obligations under this Section
1.2(b). In the event that any Bank fails to pay to the Swing Line Lender
when due any amount it is required to fund under this Section 1.2(b), such
Bank and Borrower severally agree to pay to Agent, on demand, the amount
such Bank has failed to so pay, together with interest thereon for each day
from the date on which such payment was due until the date such amount is
repaid to Agent, at (1) in the case of Borrower, the Reference-based Rate,
or (2) in the case of such Bank, the Federal Funds Rate. Any such repayment
by Borrower shall be without
21
prejudice to any rights it may have against the Bank that has failed to pay
when due any such amount.
(c) Bid Loan Facility.
-----------------
(i) In addition to its agreement to make Committed Loans
under the Line of Credit, each Bank severally agrees that, subject to the
conditions that at the time of Borrower's submission of the relevant
Competitive Bid Request (X) Borrower's Rating (as determined for purposes
of the definition of "Applicable Margin") is at least BBB/Baa2 or the
equivalent, and (Y) no Event of Default or event that, with the giving of
notice or the lapse of time, or both, has occurred and is continuing,
Borrower may, in accordance with this Section 1.2(c) and the other relevant
provisions of the Loan Documents, from time to time request that the Banks,
during the Availability Period, submit offers to make Bid Loans to
Borrower; provided, however, that the Banks may, but shall not be
-------- -------
obligated to, submit such offers, and Borrower may, but shall not be
obligated to, accept any such offers; and provided further that (A) at no
-------- -------
time shall the aggregate principal amount of all Advances (whether
Committed Loans or Bid Loans) at any time outstanding exceed the Maximum
Loan Amount; (B) at no time shall the aggregate principal amount of all Bid
Loans exceed the Bid Loan Facility Limit; and (C) at no time may the number
of Bid Loan Rate Periods then outstanding plus the number of Rate Periods
for Committed Loans then outstanding exceed eight. The obligation of a Bank
to fund its Pro Rata Share of Committed Loans shall be unaffected by its
(or its Designated Bid Lender's) making of any Bid Loans, notwithstanding
that the sum of such Bank's Pro Rata Share of the aggregate principal
amount of the outstanding Committed Loans, plus the aggregate amount of
such Bank's (and its Designated Bid Lender's) outstanding Bid Loans, may
exceed such Bank's Commitment.
(ii) Each Bid Loan shall mature on the last day of the Bid
Loan Rate Period applicable thereto. On the last day of each Bid Loan Rate
Period, Borrower shall pay to Agent, for the respective accounts of the
Banks and Designated Bid Lenders making Bid Loans maturing thereon, the
full amount of the principal of, and accrued and unpaid interest on, each
Bid Loan ending thereon. Borrower's failure to pay such amount in full on
such date shall constitute an Event of Default without notice or right to
cure.
22
(d) Letters of Credit.
-----------------
(i) Subject to the terms and conditions set forth in this
Agreement, at any time and from time to time prior to the date that is six
(6) months prior to the then applicable Maturity Date, Agent shall issue
such Letters of Credit (or amend or otherwise modify an existing Letter of
Credit) for the account of Borrower as Borrower may request, provided that
-------- ----
(A) upon issuance of any such Letter of Credit: (1) the sum of the
aggregate outstanding principal amount of all Committed Loans plus the
Letter of Credit Exposure shall not exceed the Maximum Loan Amount less the
aggregate principal amount of all Bid Loans then outstanding; (2) the
Letter of Credit Exposure shall not exceed the lesser of (a) the Maximum
Loan Amount less the aggregate principal amount of all other Advances then
outstanding, and (b) $15,000,000; and (3) (a) the stated expiration date of
any Letter of Credit (including any automatic extension or renewal clause)
shall not be later than the earlier of (i) the Maturity Date, and (ii) the
date that is twelve (12) months after its date of issuance; and (b) no
Letter of Credit shall be issued for an initial face amount of less than
$500,000. Unless the context otherwise requires: (x) all references herein
to "the outstanding principal balance of the Committed Loans" or similar
references shall be deemed to include, for all purposes, the Letter of
Credit Exposure; and (y) each reference herein to a "Committed Loan" or an
"Advance" shall include both the issuance of a Letter of Credit and (except
with respect to conditions precedent to Advances) the payment of any draw
thereunder by Agent, as appropriate.
(ii) Borrower shall deliver to Agent a duly executed request
for Letter of Credit not later than 9:00 A.M. (San Francisco time), at
least three (3) Business Days prior to the date upon which the requested
Letter of Credit is to be issued. Borrower shall further execute and
deliver to Agent such additional instruments and documents as Agent may
require, in conformity with the then standard practices of Agent's letter
of credit department, in connection with the issuance of such Letter of
Credit (collectively, the "Letter of Credit Documents").
--------------------------
(iii) Agent shall, if it approves of the content of the
request for a Letter of Credit, and subject to the conditions set forth in
Section 4.2, issue the Letter of Credit on or before 2:00 P.M. (San
Francisco time), on or before the day three (3) Business Days following
receipt of the documents last due pursuant to the preceding paragraph (ii).
Promptly following issuance of a Letter of Credit,
23
Agent shall deliver it to Borrower's offices.
(iv) (A) If and to the extent that any amounts are drawn under
any Letter of Credit, the amount so drawn shall be considered a Committed
Loan for all purposes hereunder as of the date of such draw, the proceeds
of which were applied to reimburse Agent for the payment made by it under
the Letter of Credit and bearing interest at the Reference-based Rate. Upon
receipt by Agent of a draw request under any Letter of Credit, Agent shall
promptly notify Borrower, and each Bank, of such drawing and of the date on
which such drawing is proposed to be paid, and (in the case of a notice to
a Bank) of the amount (and such Bank's Pro Rata Share) thereof. Each Bank
shall (subject to the limitation that no Bank shall be required to fund any
Committed Loan that would cause its Committed Loans, plus its Pro Rata
Share of any remaining Letter of Credit Exposure, to exceed such Bank's
Commitment), pay to Agent, no later than 11:00 A.M. (San Francisco time) on
the date Agent pays any draw under a Letter of Credit, in immediately
available funds and otherwise as provided in the Loan Documents or the Co-
Lender Agreement, as applicable, such Bank's Pro Rata Share of the
principal amount of such drawing, irrespective of the existence of any
Event of Default or event that, with the giving of notice or passage of
time, or both, would constitute an Event of Default, and without regard to
whether or not on such date the other conditions precedent to Committed
Loans are satisfied. Upon such funding, each Bank shall be deemed (1) if
the conditions precedent to the making of Committed Loans are in fact
satisfied as of such date, to have made an Advance to Borrower in a
principal amount equal to such Bank's Pro Rata Share of such drawing, or
(2) in any other event, to have acquired from Agent (and Agent shall be
deemed to have assigned to each such Bank) a percentage interest in such
drawing equal to such Bank's Pro Rata Share thereof. For purposes of
determining the availability of Letters of Credit or Committed Loans, such
drawing shall thereafter be deemed a Committed Loan, and no longer part of
the Letter of Credit Exposure.
(B) Each Bank's obligation to fund (and, if applicable, to
purchase from Agent) its Pro Rata Share of a drawing under a Letter of
Credit pursuant to this Section 1.2(d) shall be absolute and unconditional
under any and all circumstances (including, without limitation,
irrespective of any intervening bankruptcy of Borrower or acceleration of
the Loan). It is not the parties' intent that the obligations of the Banks
under this Section 1.2(d) constitute guaranties or obligations of
suretyship. If and to the extent, however, that the obligations of any Bank
24
under this Section 1.2(d) are determined to be those of a guarantor or
surety, such Bank, with full knowledge of the consequences thereof, hereby
expressly waives the benefit of each and every right or defense of a
guarantor or surety the effect of which would relieve such Bank of all or
any portion of its obligations under this Section 1.2(d). In the event that
any Bank fails to pay to Agent when due any amount it is required to fund
under this Section 1.2(d), such Bank and Borrower severally agree to pay to
Agent, on demand, the amount such Bank has failed to so pay, together with
interest thereon for each day from the date on which such payment was due
until the date such amount is repaid to Agent, at (1) in the case of
Borrower, the Reference-based Rate, or (2) in the case of such Bank, the
Federal Funds Rate. Any such repayment by Borrower shall be without
prejudice to any rights it may have against the Bank that has failed to pay
when due any such amount.
(v) (A) No later than the Maturity Date (or the earlier
acceleration of the Loan or termination of the Commitments prior to the
expiration of all Letters of Credit), Borrower shall immediately make
provision satisfactory to Agent for the full collateralization, by cash or
cash equivalent, of all such outstanding Letters of Credit, such provision
to include, but not be limited to, (1) the deposit by Borrower with Agent
of cash or cash equivalents, in an amount equal to the aggregate Letter of
Credit Exposure, to be held by Agent as collateral for the Obligations of
Borrower with respect to the Letters of Credit, and (2) the execution and
delivery by Borrower of a Controlled Funds Agreement with respect to such
cash collateral.
(B) Upon the failure of Borrower to comply with the
requirements of the foregoing subparagraph (A), such portion of the Letter
of Credit Exposure as to which Borrower has failed to comply shall be
deemed to be immediately due and payable.
(vi) The issuance of any supplement, modification, amendment,
renewal or extension to or of any Letter of Credit shall be treated in all
respects the same as the issuance of a new Letter of Credit.
(vii) Borrower assumes all risks as to the acts or omissions of
any beneficiary or transferee of any Letter of Credit with respect to its
use of such Letter of Credit. Neither Agent nor any of its officers or
directors shall be liable or responsible for, nor shall Borrower's
obligations hereunder in respect of any Letter of Credit be impaired as a
result of:
25
(A) any lack of validity or enforceability of any Letter of
Credit or any Letter of Credit Document;
(B) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith;
(C) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(D) the existence of any claim, set-off, defense or other
right that Borrower may have at any time against any beneficiary or any
transferee of a Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), Agent or any other
Person, whether in connection with the transactions contemplated by the
Letter of Credit Documents or any unrelated transaction;
(E) payment by Agent against presentation of documents that
do not comply with the terms of a Letter of Credit, including failure of
any documents to bear any reference or adequate reference to the Letter of
Credit; or
(F) any other circumstance whatsoever in making or failing
to make payment under any Letter of Credit.
In furtherance and not in limitation of the foregoing, Agent may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary.
Notwithstanding the foregoing, Borrower may have a claim against Agent, and
Agent may be liable to Borrower, to the extent of any direct (as opposed to
consequential or exemplary) damages suffered by Borrower caused by Agent's
wilful misconduct or gross negligence.
(e) Certain General Provisions.
--------------------------
(i) Each Bank acquiring an interest in the Committed Loans shall
become vested with its Pro Rata Share of Committed Loans upon execution and
delivery of the required documents and upon payment of its Pro Rata Share
of the principal balance of the outstanding Committed Loans and any other
fees, costs or expenses due hereunder or pursuant to another agreement.
Upon such payment, the respective interests of each Bank in the Loan
Documents and the other rights and claims with respect to the Line of
Credit shall be of equal priority with one another, except as otherwise
26
expressly provided.
(ii) A complete set of Loan Documents shall be held by Agent.
(iii) No Bank other than a Bank that is also Agent, and no
Designated Bid Lender, shall have any interest in any (A) property taken as
security for any other loan or financial accommodation made or furnished to
Borrower by Agent (in which such Bank or Designated Bid Lender has not
acquired an interest); (B) property now or hereafter in Agent's possession
or under Agent's control other than by reason of the Loan Documents; or (C)
deposits which may be or might become security for Borrower's Obligations
by reason of the general description contained in any instrument not a Loan
Document held by Agent or by reason of any right of setoff, counterclaim,
banker's lien or otherwise. If, however, such property shall actually be
applied to the payment of amounts owing by Borrower in connection with the
Advances, then each Bank and Designated Bid Lender shall be entitled to a
pro rata share, if any, of such application to amounts due in connection
with the Advances, based on the ratio of the outstanding principal amount
of all Advances made by such Bank (whether under the Line of Credit or the
Bid Loan Facility) or Designated Bid Lender to the outstanding principal
amount of all Advances.
(iv) All the parties agree that, except as may be otherwise
expressly provided, all of the interest rates for the Advances are those of
and are calculated in accordance with the requirements and any applicable
assessments of Agent, regardless of which Bank or Designated Bid Lender is
making an Advance or receiving a payment thereon.
(v) If, at any time or for any reason whatsoever, (A) the sum of
the aggregate principal amount of all outstanding Committed Loans shall
exceed the Committed Loan Availability, or (B) the aggregate amount of all
outstanding Bid Loans shall exceed the Bid Loan Facility Limit, or (C) the
aggregate amount of all outstanding Advances (whether Committed Loans or
Bid Loans), plus the Letter of Credit Exposure, shall exceed the Maximum
Loan Amount, then Borrower shall immediately pay to the Banks (for their
own account and for the accounts of their respective Designated Bid
Lenders, as applicable, to be applied to repayment of the affected Advances
in such order as Agent may determine, in its sole discretion), the amount
of such excess (or, if less, the outstanding principal of all affected
Advances).
27
1.3 Procedure for Borrowing.
-----------------------
(a) Committed Loans.
---------------
(i) Each Borrowing under the Line of Credit shall be made upon
Borrower's irrevocable written notice delivered to Agent in accordance with
Section 3.1.
(ii) Agent will promptly notify each Bank of (A) any election of
a LIBOR Alternative Rate by Borrower pursuant to the provisions of Exhibit
A to the Note and of the amount of such Bank's Pro Rata Share of the
principal of the Loan with respect to which such election has been made,
and (B) any Notice of Borrowing and of the amount of such Bank's Pro Rata
Share of that Borrowing. With respect to a Notice of Borrowing, the Banks,
acting through Agent, shall disburse the requested Advance as provided in
the Loan Agreement.
(b) Bid Loans.
---------
(i) When Borrower desires to effect a Borrowing (or Borrowings)
consisting of one or more Bid Loans, but not more often than twice in any
calendar month, Borrower shall notify Agent by telephone, followed promptly
by facsimile of a Competitive Bid Request in the form of Exhibit C (to be
received no later than 10:00 a.m., San Francisco time, (x) in the case of a
LIBOR Auction, four Banking Days prior to the date of the proposed
Borrowing(s), or (y) in the case of an Absolute Rate Auction, two Banking
Days prior to the date of the proposed Borrowing(s)), specifying (among the
other information required by Exhibit C):
(A) the date of such Borrowing(s), which shall be a Banking
Day;
(B) the aggregate amount of such Borrowing(s), which shall
be in an amount (subject to the limitations set forth in other provisions
of the Loan Documents) equal to $10,000,000 or an integral multiple of
$1,000,000 in excess thereof;
(C) whether the requested Borrowing(s) is/are to be made as
either (1) one or more LIBOR Bid Loans or (2) one or more Absolute Rate Bid
Loans; and
(D) the duration of the requested Bid Loan Rate Period
(subject to the limitations that Borrower may request no more than three
Bid Loan Rate Periods in any single Competitive Bid Request and that each
Bid Loan Rate
28
Period must relate to at least $5,000,000 in principal) and, if more than
one Bid Loan Rate Period is requested, the requested principal amount of
the related Borrowing.
Borrower's right to request Competitive Bids for LIBOR Bid Loans, and each
Bank's or Designated Bid Lender's obligation to fund any LIBOR Bid Loan
pursuant to any Competitive Bid accepted by Borrower, shall be subject in
all respects to the provisions of Section 2.2(d) of Exhibit A to the Note,
applied as if each reference therein to the "LIBOR Alternative" referred as
well to LIBOR Bid Loans.
(ii) Upon receipt of a Competitive Bid Request, Agent shall
promptly send a copy thereof to each of the Banks by facsimile, attaching
thereto notice of the date and time by which responses must be received in
order to be considered by Borrower. The Competitive Bid Request shall not
constitute an offer by Borrower, but merely an invitation to the Banks to
submit Competitive Bids with respect to the requested Borrowing(s).
(iii) (A) Each Bank may, in its discretion, submit a Competitive
Bid containing an offer or offers to make Bid Loans in response to any
Competitive Bid Request. Each Competitive Bid must comply with the
provisions of this Section 1.3(b)(iii) and must be submitted to Agent (or,
in the case of a Competitive Bid being submitted by Agent in its capacity
as a Bank, to Borrower), by facsimile, no later than 6:30 a.m. (or, in the
case of a Competitive Bid by Agent, 6:15 a.m.), San Francisco time, (1) in
the case of a LIBOR Auction, three Banking Days prior to the date of the
proposed Borrowing(s), or (2) in the case of an Absolute Rate Auction, on
the date of the proposed Borrowing(s). Each Competitive Bid so submitted
(subject only to the provisions of Section 2.2(d) of Exhibit A to the Note,
as described above, and to the satisfaction of all conditions precedent to
the requested Advance) shall be irrevocable, unless Borrower otherwise
agrees in writing.
(B) Each Competitive Bid shall be in substantially the form
of Exhibit D hereto, shall identify the submitting Bank and the date of the
proposed Borrowing(s) specified in the Competitive Bid Request to which the
submitting Bank is responding and shall specify:
(1) the principal amount of each Bid Loan for which
the Competitive Bid is being made (which shall not be limited by the
submitting Bank's Commitment, but which shall be in an amount, no greater
than the amount of the requested Borrowing, equal to $5,000,000 or an
integral multiple of $1,000,000 in excess thereof); and
29
(2) (a) in the case of a LIBOR Auction, the LIBOR Bid
Margin offered by the submitting Bank, or (b) in the case of an Absolute
Rate Auction, the Absolute Rate offered by the submitting Bank.
A Competitive Bid may include up to three separate offers by the submitting
Bank with respect to each Bid Loan Rate Period specified in the Competitive
Bid Request to which it responds. Any Competitive Bid that (X) does not
include all the information required by this Section 1.3(b)(iii)(B), (Y)
contains language that qualifies or conditions the submitting Bank's offer
to make the Bid Loan(s) described therein or proposes terms other than (or
in addition to) the terms proposed in the relevant Competitive Bid Request
other than to set an aggregate limit on the principal amount of Bid Loans
----- ----
for which offers being made by the submitting Bank may be accepted, or (Z)
is received by Agent (or Borrower, as applicable) after the time set forth
in Section 1.3(b)(ii)(A) (unless amended to bring it into compliance prior
to the time set forth in Section 1.3(b)(ii)(A)), shall be disregarded.
(iv) Promptly upon receipt, but not later than 7:00 a.m. on
the date by which Competitive Bids are required to have been submitted with
respect to a Competitive Bid Request, Agent shall notify Borrower of (A)
the terms of each Competitive Bid (other than one that is to be disregarded
as described above) received in response to the Competitive Bid Request,
and (B) (1) the aggregate principal amount of Bid Loans for which
Competitive Bids have been received for each Rate Period requested in the
Competitive Bid Request, and (2) the respective principal amounts and LIBOR
Bid Margins or Absolute Rates, as the case may be, so offered.
(v) No later than 7:30 a.m. on the date by which Competitive
Bids are required to have been submitted with respect to a Competitive Bid
Request, Borrower shall notify Agent of its acceptance or rejection of the
offers notified to it as provided in Section 1.3(b)(iv). Borrower shall
have no obligation to accept any such offer, and may choose to reject all
of them. If Borrower has failed to timely notify Agent of its acceptance or
rejection of any one or more offers by the time specified in the preceding
sentence, Borrower shall be deemed to have rejected such offer(s). Borrower
may accept any Competitive Bid (other than one that is to be disregarded as
provided above) in whole or in part, provided that:
-------- ----
(A) the aggregate principal amount of
30
the Competitive Bids so accepted may not exceed the aggregate amount of the
Borrowing(s) requested in the relevant Competitive Bid Request;
(B) (1) subject to the provisions set forth below with
respect to multiple offers at the same LIBOR Bid Margin or Absolute Rate,
the principal amount of each accepted Competitive Bid must be in an amount
equal to $5,000,000 or an integral multiple of $1,000,000 in excess
thereof, and (2) Competitive Bids must be accepted with respect to an
aggregate principal amount of at least $10,000,000; and
(C) with respect to each Bid Loan Rate Period for which
Competitive Bids were requested, Borrower may accept offers solely on the
basis of ascending LIBOR Bid Margins or Absolute Rates, as the case may be
(provided that Borrower may, to the extent necessary to comply with the
preceding paragraph (B) or to accept offers in an aggregate principal
amount equal to the aggregate amount of the Borrowing(s) requested in the
relevant Competitive Bid Request, accept only part of an offer at a
particular LIBOR Bid Margin or Absolute Rate and accept all or part of one
or more offers at a higher LIBOR Bid Margin or Absolute Rate).
If Borrower chooses to accept one or more offers, Borrower's notice to
Agent shall specify the aggregate principal amount of offers with respect
to each requested Bid Loan Rate Period that it chooses to accept. If two or
more Banks offer the same LIBOR Bid Margin or Absolute Rate for an
aggregate principal amount greater than the amount for which such offers
were requested with respect to any requested Bid Loan Rate Period, then,
notwithstanding that in all other cases no Bid Loan may be made in an
amount less than $5,000,000, Agent shall allocate the principal amount of
the affected Bid Loan among such Banks as nearly as possible (in such
multiples, not less than $1,000,000, as Agent may deem appropriate) in
proportion to the aggregate principal amounts to which their respective
offers related. Agent's allocation, in the absence of manifest error, shall
be conclusive.
(vi) Agent shall promptly notify each Bank having submitted a
Competitive Bid whether its offer has been accepted and, if its offer has
been accepted, of the amount of the Bid Loan(s) to be made by it (or its
Designated Bid Lender) on the date of the relevant Borrowing(s). Each Bid
Loan shall bear interest, from and including the date it is made to but
excluding the last day of the Bid Loan Rate Period applicable thereto, at a
rate per annum equal to (A) in the case of an Absolute Rate Bid
31
Loan, the Absolute Rate specified by the Bank making (or whose Designated
Bid Lender makes) such Absolute Rate Bid Loan in its accepted Competitive
Bid, and (B) in the case of a LIBOR Bid Loan, the sum of (1) the LIBOR Bid
Margin specified by the Bank making (or whose Designated Bid Lender makes)
such LIBOR Bid Loan in its accepted Competitive Bid, plus (2) the LIBOR
Rate (determined in the same manner as the LIBOR Rate is determined under
the Note, except based on the principal amount and Bid Loan Rate Period of
such LIBOR Bid Loan).
(vii) Upon the request of any Bank, Agent shall notify such Bank,
following a Borrowing of one or more Bid Loans, of the ranges of bids
submitted and the highest and lowest bids accepted for each Bid Loan Rate
Period requested by Borrower and of the aggregate amount of the Bid Loans
made pursuant to such Borrowing. From time to time, Borrower and the Banks
(for themselves and for their respective Designated Bid Lenders) shall
furnish such information to Agent as Agent may reasonably request relating
to the Bid Loans, including the amounts, interest rates, dates of Borrowing
and last days of the applicable Bid Loan Rate Periods, for the purpose of
enabling Agent to allocate amounts received from Borrower to payment of
amounts due and owing under the Loan Documents.
(viii) All notices or other communications required or desired to
be delivered by Borrower pursuant to this Section 1.3(b) shall be given by
an individual authorized to do so pursuant to Section 3.9 of Exhibit A to
the Note in a writing delivered to Agent by Borrower pursuant thereto.
(ix) Any Bid Loan that would otherwise be made by a Bank that is
a Designating Bank may from time to time be made by its Designated Bid
Lender, in such Designated Bid Lender's sole discretion. Nothing herein
shall constitute a commitment to make Bid Loans by such Designated Bid
Lender; provided, however, if such Designating Bank's Designated Bid
-------- -------
Lender elects not to, or fails to, make any such Bid Loan, for any reason
whatsoever, such Designating Bank shall make such Bid Loan pursuant to the
terms hereof, it being the obligation of each Designating Bank to make each
Bid Loan with respect to a Competitive Bid submitted by such Designating
Bank and accepted by Borrower, in whole or in part, pursuant hereto, except
to the extent that such Bid Loan is in fact funded by its Designated Bid
Lender.
(c) Certain General Provisions.
--------------------------
32
(i) (A) Each Bank shall make the aggregate amount of its Pro Rata
Share of each Committed Loan,
(B) each Bank having a Competitive Bid accepted will make the
aggregate amount of the Bid Loan(s) with respect to which its Competitive
Bid was accepted, and
(C) each Designated Bid Lender electing to fund one or more
Bid Loans that would otherwise have been made by its Designating Bank with
respect to an accepted Competitive Bid (or, if such Designated Bid Lender
fails to do so, its Designating Bank) will make the aggregate amount of
such Bid Loan(s),
available to Agent for the account of Borrower at Agent's Payment Office by
11:00 a.m. (San Francisco time) on the date of the relevant Borrowing and
in funds immediately available to Agent. The proceeds of all such Advances
will then be made available to Borrower by Agent by wire transfer in
accordance with written instructions provided to Agent by Borrower. If any
Bid Loan is funded by a Designated Bid Lender, its Designating Bank shall
provide Agent with notice to that effect on the date of such Borrowing.
(ii) Unless Agent receives notice from any Bank at least one
Banking Day prior to the date of a Borrowing that such Bank (or such Bank's
Designated Bid Lender, in the case of a Bid Loan) will not make available
to Agent when required (A) its Pro Rata Share of the Committed Loan to be
made thereon, or (B) the amount of the Bid Loans to be made by such Bank
(or its Designated Bid Lender) thereon, as the case may be, Agent may
assume that such Bank (or, if applicable, its Designated Bid Lender) has
made such amount available to Agent in immediately available funds on the
date of such Borrowing.
(iii) The failure of any Bank or Designated Bid Lender to make
available to Agent any amount it is required to make so available in
respect of any Borrowing shall not relieve any other Bank or Designated Bid
Lender of any obligation hereunder to make an Advance on the date of such
Borrowing, but, except to the extent expressly provided (A) in Section
1.3(b)(ix) with respect to the obligation of any Designating Bank to fund
Bid Loans that are not funded by its Designated Bid Lender or (B) in
Section 11.5(b), no Bank or Designated Bid Lender shall be responsible for
the failure of any other Bank or Designated Bid Lender to make any amount
so available.
1.4 Interest Rates.
--------------
33
(a) The Note sets forth certain provisions regarding the interest
rates and certain other terms and conditions applicable to the credit facilities
provided pursuant to the Loan Documents. Borrower may elect interest rates
applicable to the Committed Loans in accordance with the requirements, terms and
conditions set forth in the Note upon irrevocable written notice to Agent to be
received by Agent on the appropriate day not later than 9:30 a.m. (San Francisco
time). Interest rates applicable to Bid Loans are subject to the provisions of
Section 1.3(b)(vi).
(b) Agent will promptly notify each Bank of receipt of an election of
the Contract Rate. If no timely notice is provided by Borrower, Agent will
promptly notify each Bank of any automatic conversion to the Reference-based
Rate. All rate elections and conversions with respect to Committed Loans shall
be made ratably according to the respective outstanding principal amounts of the
Committed Loan held by each Bank with respect to which the notice was given.
1.5 Prepayments.
-----------
(a) In the event Borrower elects to prepay the Committed Loans in
whole or in part in accordance with the Loan Documents, Agent will promptly
notify each Bank of such notice and of each Bank's Pro Rata Share of such
prepayment.
(b) Notwithstanding any other provision of this Agreement or of any
other Loan Document, Borrower shall have no right to prepay any Bid Loan prior
to the last day of the applicable Bid Loan Rate Period.
(c) In the event of any prepayment by Borrower of a Bid Loan prior to
the last day of the Bid Loan Rate Period applicable thereto (by reason of
acceleration or for any other reason), Borrower shall pay to each Bank holding
an interest therein, or whose Designated Bid Lender holds an interest therein, a
prepayment premium equal to the sum of
(i) $250; and
(ii) the sum of such losses and expenses as such Bank or its
Designated Bid Lender, as applicable, may incur by reason of such
prepayment, including without limitation any losses or expenses
incurred in obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin for the period after such
prepayment.
The prepayment premium provided for herein shall be due and payable not later
than fifteen (15) days after delivery to Borrower, by or on behalf of the
affected Bank or Designated Bid
34
Lender, of a demand for payment accompanied by a calculation, in reasonable
detail, of such losses and expenses, which shall be conclusive in the absence of
manifest error.
(d) Each of the waivers and acknowledgments of Borrower set forth in
Paragraphs 4 and 5 of Exhibit B to the Note shall apply to Borrower's covenants
set forth in this Section 1.5 as if set forth herein.
1.6 Usury.
-----
If a court ultimately determines that the Loan (or any Advance)
violates applicable usury law, then (a) Borrower shall not be required to pay to
or for the account of any Bank or Designated Bid Lender interest on the Loan (or
such Advance) at a rate in excess of the maximum rate that may be lawfully
charged under applicable law; and (b) in the event that any Bank or Designated
Bid Lender shall collect interest or other monies which are deemed to constitute
interest which would increase the effective interest rate on the Loan (or any
Advance) to a rate in excess of that permitted by applicable law, such excess
interest shall, at the option of said Bank or Designated Bid Lender, be returned
to Borrower or credited against the principal balance of the Loan (or such
Advance) then outstanding; (c) provided, however, that if a usury law applies to
one or more but not all Banks and Designated Bid Lenders, then the Banks and
Designated Bid Lenders not affected by the usury law shall be entitled to the
full amount of interest from Borrower under the Loan Documents even though other
Banks or Designated Bid Lenders may receive or retain less due to the usury law.
1.7 Increased Costs and Reduction of Return.
---------------------------------------
If any Bank shall have determined that a change in or compliance with any
Capital Adequacy Regulation affects the amount of capital required to be
maintained by the Bank, or by any Person controlling the Bank, and such Bank
determines that the amount of such required capital is increased as a
consequence of the Line of Credit or other obligations under the Loan Documents
taking into consideration such Bank's or controlling Person's policies with
respect to capital adequacy and desired return on capital, then, upon demand of
such Bank to Borrower through Agent, Borrower shall pay to the Bank an
additional amount sufficient to compensate the Bank for such increase.
35
2. FEES, EXPENSES
2.1 Fees; Indemnities.
-----------------
(a) Facility Fee. Borrower agrees to pay, in quarterly installments,
------------
in arrears, a facility fee in an amount equal to one quarter of the Applicable
Facility Fee Percentage of the Maximum Loan Amount as of the Effective Date, as
of the first day of each calendar quarter thereafter during the term hereof and
as of the last day of the Availability Period (prorated for partial quarters on
the basis of a year of 360 days for the actual number of days elapsed). This fee
shall be due and payable not later than fifteen (15) days following the
rendering of an invoice therefor by Agent.
(b) Letter of Credit Fees. As additional consideration for the
---------------------
issuance, extension or renewal of Letters of Credit pursuant to Section 1.2(d),
Borrower agrees to pay to Agent, for the ratable account of the Banks, a Letter
of Credit fee equal to (i) the Applicable Margin times (ii) the face amount of
such Letter of Credit, payable upon issuance (and, in the event of any extension
or renewal of a Letter of Credit, upon such extension or renewal), pro rated for
periods of less than twelve months on the basis of a year of 360 days and for
the actual number of days elapsed. In addition, Borrower shall pay Agent all
processing, administrative, transfer, amendment and issuance of standby letters
of credit.
(c) Agency Fee. Borrower shall pay an agency fee to Agent for
----------
Agent's own account, as set forth in a separate letter understanding between
Agent and Borrower.
(d) Auction Fee. Together with Borrower's submission of each
-----------
Competitive Bid Request, Borrower shall pay to Agent an auction fee in the
amount of $2,500, which fee shall be fully earned and nonrefundable upon Agent's
transmittal of the Competitive Bid Request to the Banks, regardless of whether
the request is subsequently cancelled by Borrower, any Bid Loans are made by any
Bank or Designated Bid Lender in response thereto or any Competitive Bids are
accepted by Borrower.
(e) Other Fees. Borrower shall pay to Agent, for Agent's own
----------
account, a commitment fee and arrangement fee as set forth in a separate letter
understanding between Borrower and Agent.
36
2.2 Costs and Expenses.
------------------
Borrower shall:
(a) pay or reimburse Agent within five Banking Days after demand for
all costs and expenses (including legal fees) incurred by it in connection with
the preparation, administration and execution of any Loan Document and any
amendment, supplement, waiver or modification and any other documents prepared
in connection herewith or therewith, (whether or not the particular Loan,
transaction or document is consummated), including reasonable legal fees
incurred by BofA (including as Agent) with respect thereto; and
(b) pay or reimburse Agent and each Bank within five Banking Days
after demand for all costs and expenses (including legal fees) incurred by them
in connection with the enforcement or preservation of any rights or remedies
under any Loan Document with respect to an Event of Default (including any
"workout" or restructuring of all or any portion of the Obligations and any
Insolvency Proceeding, judicial proceeding or arbitration).
2.3 Indemnification by Borrower.
---------------------------
(a) Borrower shall indemnify, defend and hold Agent-Related Persons
and each Bank, and each of their respective officers, directors, employees and
agents (each, an "Indemnified Person") harmless from and against:
(i) any and all liabilities, obligations, losses, damages,
actions, judgments, costs and expenses (including legal fees) which may be
incurred by or asserted against any such Person arising out of or relating
to (A) the Line of Credit, the Bid Loan Facility, Advances under the Loan
Documents, Letters of Credit or the Loan Documents or any document or
transaction or action taken or not by any such Person in connection with
any of the foregoing, including but not limited to the execution, delivery,
enforcement, performance and administration of this Agreement and the other
Loan Documents, or (B) the transactions contemplated hereby, including any
investigation, arbitration, litigation, Insolvency Proceeding or other
proceeding thereto related to this Agreement or the other Loan Documents,
the Line of Credit, the Bid Loan Facility, Letters of Credit, Advances
under the Loan Documents or the use of the proceeds thereof (including,
without limitation, any investigation, litigation or proceeding related to
the acquisition by any Borrower Entity or Joint Venture Entity of all or
any portion of its assets), whether or not any Indemnified Person is a
party; and
37
(ii) any and all writs, subpoenas, claims, demands, actions, or
causes of action that are served on or asserted against any Indemnified
Person (if directly or indirectly related to a writ, subpoena, claim,
demand, action, or cause of action against Borrower or any Affiliate of
Borrower); and any and all liabilities, losses, costs, or expenses
(including attorneys' fees) that any Indemnified Person suffers or incurs
as a result of any of said matters;
(all the foregoing, collectively, the "Indemnified Liabilities"); provided, that
Borrower shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities resulting solely from the gross negligence or
willful misconduct of such Indemnified Person; nor shall Borrower have any
obligation to indemnify any Designating Bank in respect of any matter with
respect to which Borrower is entitled to be indemnified pursuant to Section 11.5
or in respect of any act or omission by such Designating Bank or its Designated
Bid Lender under their Designation Agreement or any other agreement entered into
between them in connection therewith.
(b) Borrower shall further indemnify Agent, each Bank and each
Designated Bid Lender from and hold it harmless against any transfer or
documentary taxes, assessments or charges imposed by any governmental authority
by reason of the execution, delivery and performance of the Loan Documents.
(c) Borrower's obligations under this Section 2.3 shall survive
payment of all other Obligations, and shall inure to the benefit of Agent's,
Banks' and Designated Bid Lenders' successors and assigns.
3. DISBURSEMENTS AND PAYMENTS
3.1 Requests for Credit.
-------------------
(a) Each request for an extension of credit shall be made in writing
in a manner acceptable to Agent.
(b) Borrowing Notice. Except as otherwise provided in the Loan
----------------
Documents, each draw request shall be made upon the irrevocable written notice
of Borrower (including notice via facsimile confirmed by a mailed copy) pursuant
to a Borrowing Notice in the form attached hereto as Exhibit A. Each Borrowing
---------
Notice shall be submitted to and received by the Bank prior to 9:00 a.m.
(California time) at least two (2) Banking Days prior to the specified borrowing
date. The truth and accuracy of each statement made in the Borrowing Notice
shall be a condition precedent to the advance requested thereunder.
3.2 Disbursement and Payment Record; Loan Account; Note.
---------------------------------------------------
38
(a) Each disbursement by Agent, and each payment by Borrower, shall be
evidenced by records kept by Agent. The Advances made by each Bank or Designated
Bid Lender shall be evidenced by one or more loan accounts or records maintained
by such Bank, Designated Bid Lender (and its Designating Bank) or Agent, as the
case may be, in the ordinary course of business. The loan accounts or records
maintained by Agent and each Bank or Designated Bid Lender (and its Designating
Bank) shall be conclusive absent manifest error of the amount of the Advances
made by the Banks or Designated Bid Lenders to Borrower and the interest and
payments thereon. Any failure so to record or any error in doing so shall not,
however, limit or otherwise affect the obligation of Borrower hereunder to pay
any amount owing with respect to Advances made under the Loan Documents.
(b) Borrower has previously executed the Note, in the amount of the
heretofore existing Maximum Loan Amount, evidencing Advances made under the Loan
Documents and payable to BofA, in its capacity as Agent. Effective as of the
Effective Date:
(i) the face amount of the Note is hereby amended to read
"$400,000,000"; and the "Maximum Loan Amount" stated therein is hereby
amended to read "the principal sum of Four Hundred Million Dollars
($400,000,000)"; and
(ii) the stated Maturity Date of the Note (subject to extension in
accordance with the provisions of Section 22 of the Note) is hereby amended
to read "August 1, 2001."
The Note will continue to evidence Advances outstanding as of the Effective Date
under the Existing Agreement, as well as evidencing Advances made on and after
the Effective Date.
3.3 Authorization.
-------------
(a) Agent may honor facsimile instructions for advances or repayments
(or for the designation of any optional interest rates that may be permitted by
the Note) given by any one of the individuals authorized to sign loan documents
on behalf of Borrower, or any other individual designated by any one of such
authorized signers.
(b) Advances will be deposited in Borrower's account number 00333-
10805 maintained with Agent, or such other of Borrower's accounts with Agent as
designated in writing by Borrower.
(c) Borrower indemnifies and releases Agent and each Bank and
Designated Bid Lender (including, in each case, its officers, employees, and
agents) from all liability, loss, and
39
costs in connection with any act resulting from written instructions any such
Person reasonably believes are made by any individual authorized by Borrower to
give such instructions. This indemnity and release shall survive this
Agreement's termination.
3.4 Banking Days.
------------
A Banking Day is defined in the Note. All payments and disbursements
which would be due on a day which is not a Banking Day will be due on the next
Banking Day. All payments received on a day which is not a Banking Day will be
applied to amounts due under the Loan Documents on the next Banking Day.
3.5 Payments.
--------
(a) All payments to be made by Borrower shall be made without set-off,
recoupment or counterclaim. Except as otherwise provided, all payments by
Borrower shall be made to Agent for the account of the Banks and the Designated
Bid Lenders, as applicable, at Agent's Payment Office, and shall be made in U.S.
dollars and in immediately available funds, in accordance with the Loan
Documents. Agent will promptly distribute to each Bank (including, to the extent
applicable, for the account of its Designated Bid Lender, in accordance with
Section 11.5), in like funds as received: (i) its Pro Rata Share (or other
applicable share as may be agreed by a Bank) of each payment in respect of the
Line of Credit and (ii) its (or, if applicable, its Designated Bid Lender's) pro
rata share of each payment in respect of any one or more Bid Loans (based on the
proportion of the outstanding principal amount of such Bank's (or Designated Bid
Lender's) Bid Loans in respect of which such payment is made to all the
outstanding principal amount of all Bid Loans in respect of which such payment
is made); provided that if any payment is received or otherwise realized by
-------- ----
Agent at a time when the Availability Period has ended and all outstanding
Advances have become, or have been declared, due and payable, then Agent shall
distribute to each Bank (including, to the extent applicable, for the account of
its Designated Bid Lender, in accordance with Section 11.5) its (or its
Designated Bid Lender's) pro rata share thereof, based on the proportion of the
aggregate principal amount of such Bank's (or its Designated Bid Lender's)
outstanding Advances to the aggregate principal amount of all outstanding
Advances. Any payment received by Agent later than 11:00 a.m. (San Francisco
time) shall be deemed to have been received on the following Banking Day and any
applicable interest or fee shall continue to accrue.
(b) To the extent that Borrower makes a payment to Agent or the Banks
or Designated Bid Lenders, or Agent or (notwithstanding any provision of the Co-
Lender Agreement to the
40
contrary) the Banks exercise the right of set-off, and such payment or the
proceeds of such set-off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including by
any settlement) to be repaid to a trustee, receiver, Borrower or any other
party, in connection with any Insolvency Proceeding or otherwise, then (i) to
the extent of such recovery the obligation or part thereof originally intended
to be satisfied shall be revived and continued in full force and effect as if
such payment had not been made or such set-off had not occurred; and (ii) each
Bank severally agrees to pay to Agent upon demand (A) in the case of an amount
received in respect of a Bid Loan, its allocable share of any amount so
recovered from or repaid by Agent, and (B) in the case of any other amount
received under the Loan Documents, its Pro Rata Share of any amount so recovered
from or repaid by Agent; and (iii) each Designated Bid Lender agrees to pay such
Designated Bid Lender's allocable share of any amount so recovered from or
repaid by Agent in respect of any Bid Loan made by such Designated Bid Lender;
provided, however, that the foregoing clause shall not prohibit any
-------- -------
Designating Bank from agreeing with its Designated Bid Lender that, as between
such Designating Bank and Designated Bid Lender, such Designating Bank shall pay
to Agent any amount that would otherwise be due to Agent under this Section
3.5(b), and such Designated Bid Lender shall not be liable for any payment of
any such amount to the extent that its Designating Bank makes such payment.
(c) Agent shall have the exclusive right to collect on the Loan from
Borrower or any guarantors, third parties, or otherwise including principal,
interest, fees or any prepayment premiums, whether such amounts are received
directly from Borrower, any guarantors, or other persons, or are collected by
offset by Agent against the money or other property of Borrower or any
guarantors deposited at or held by Agent, or other enforcement of the Loan
Documents. No Bank or Designated Bid Lender shall independently initiate any
judicial action or equivalent action or other proceeding against Borrower with
respect to the Loan.
(d) (i) Notwithstanding any other provision of any Loan Document or
the Co-Lender Agreement to the contrary, Agent, Banks and Designated Bid
Lenders agree with Borrower that any funds, claims, or distributions
actually received by Agent for the account of any Bank or Designated Bid
Lender as a result of the enforcement of, or pursuant to, any Guaranty, net
of Agent's and Banks' expenses of collection thereof (such net amount,
"Guaranty Proceeds"), shall be made available for distribution equally and
ratably (in proportion to the aggregate amount of principal, interest and
other amounts then owed in respect of the Obligations or of an issuance of
Public Debt (as defined
41
below), as the case may be) among the Agent, the Banks and the Designated
Bid Lenders and the trustee or trustees (or to the holders) of (A) the
Prudential Indebtedness, for so long as it remains Unsecured Indebtedness,
and (B) any other Unsecured Indebtedness, not subordinated to the
Obligations, issued by Borrower, before or after the Effective Date, in
offerings registered under the Securities Act of 1933, as amended, or in
transactions exempt from registration pursuant to Rule 144A thereof (the
Prudential Indebtedness, and any other such qualifying Unsecured
Indebtedness, "Public Debt"), and Agent is hereby authorized, by Borrower,
by each Bank (on its own behalf and on behalf of its Designated Bid Lender,
if any) and by each Guarantor (by its execution and delivery of the
Guaranty to which it is party) to make such Guaranty Proceeds so available.
No Bank or Designated Bid Lender shall have any interest in any amount paid
over by Agent to the trustee or trustees in respect of any Public Debt (or
to the holders thereof) pursuant to the foregoing authorization. This
Section 3.5(d) shall apply solely to Guaranty Proceeds, and not to any
payments, funds, claims or distributions received by Agent, any Bank or any
Designated Bid Lender directly or indirectly from Borrower or any other
Person other than from a Guarantor pursuant to a Guaranty. Borrower is
aware of the terms of the Guarantees, and specifically understands and
agrees with Agent, the Banks and the Designated Bid Lenders that, to the
extent Guaranty Proceeds are distributed to holders of Public Debt or their
respective trustees, such Guarantor has agreed that the Obligations will
not be deemed reduced by any such distributions, and each Guarantor shall
continue to make payments pursuant to its Guaranty until such time as the
Obligations have been paid in full (and the Commitments have been
terminated and any Letter of Credit Exposure reduced to zero), after taking
into account any such distributions of Guaranty Proceeds in respect of
Indebtedness other than the Obligations.
(ii) Nothing contained herein shall be deemed (A) to limit,
modify, or alter the rights of Agent, the Banks and the Designated Bid
Lenders under any Guaranty, (B) to subordinate the Obligations to any
Public Debt, or (C) to give any holder of Public Debt (or any trustee for
such holder) any rights of subrogation.
(iii) This Agreement, and each Guaranty, are for the sole
benefit of Agent, the Banks and the Designated Bid Lenders and their
respective successors and assigns. Nothing contained herein or in any
Guaranty shall be deemed for the benefit of any holder of Public Debt, or
any trustee for such holder; nor shall anything contained herein or therein
be construed to impose on Agent, any Bank or any
42
Designated Bid Lender any fiduciary duties, obligations or responsibilities
to the holders of any Public Debt or their trustees (including, but not
limited to, any duty to pursue any Guarantor for payment under its
Guaranty).
4. CONDITIONS
4.1 Conditions Precedent to Initial Funding Date on or after the
------------------------------------------------------------
Effective Date.
--------------
The obligation of each Bank and Designated Bid Lender under the Loan
Documents to make any Advances, and the obligation of Agent to issue any Letter
of Credit, on or after the Effective Date is subject to the further conditions
that Agent has received all of the following in form and substance satisfactory
to Agent:
(a) Loan Documents. Fully executed originals of this Agreement
--------------
(including the Reconfirmation of Guaranty attached hereto, executed on behalf of
each Guarantor) and the Co-Lender Agreement and any other documents any Bank may
reasonably require or request in accordance with the Loan Documents.
(b) Authorizations. Evidence that the execution, delivery and
--------------
performance by Borrower and each Material Borrower Entity or other Guarantor (if
any) of each of the Loan Documents to which such Person is or is to become a
party have been duly authorized, including, without limitation, (i) Corporate
Resolution to borrow, certified by the Corporate Secretary of Borrower, together
with a Certificate of Incumbency for the authorized signing officers, containing
their specimen signatures and certified by the Corporate Secretary of Borrower,
and (ii) resolutions, or other required action, by each Material Borrower Entity
or other Guarantor with respect to the execution and delivery of its Guaranty
(or reconfirmation of its existing Guaranty), together with a Certificate of
Incumbency for the authorized signing officers, containing their specimen
signatures and certified by such Material Borrower Entity's or other Guarantor's
Secretary (or the equivalent).
(c) Governing Documents; Good Standing Certificates. For Borrower,
-----------------------------------------------
BRE Property Investors LLC and each other Material Borrower Entity or Guarantor
or Other Unencumbered Property Owner (if any):
(i) a copy of such Person's articles of incorporation and
bylaws, articles of organization, Form LLC-1 and operating agreement, Form
LP-1 and agreement of limited partnership or other charter documents, as
the case may be, and
(ii) a certificate of good standing for Borrower
43
and each Material Borrower Entity, other Guarantor or Other Unencumbered
Property Owner from the state where formed and, at the Bank's request, from
any other state in which Borrower or such Material Borrower Entity, other
Guarantor or Other Unencumbered Property Owner is required to qualify to
conduct its business.
(d) Reimbursement. Reimbursement of all costs and expenses incurred
-------------
by Agent in connection with this Agreement, including legal fees and expenses of
Agent's counsel, and the costs for services of Agent's in-house staff, such as
legal services.
(e) Payment of Fees. Payment of all accrued and unpaid fees and
---------------
expenses due Agent as provided for by the Loan Documents, including those
referred to in Section 2.1 that are required by this Agreement or any letter
understanding between Borrower and Agent to be paid on or before the Effective
Date, and all other accrued and unpaid fees and expenses provided for under the
Existing Agreement (including, but not limited to, the pro-rated facility fee
accrued thereunder).
(f) Legal Opinion. An opinion of legal counsel for Borrower and each
-------------
Material Borrower Entity and other Guarantor addressing such matters as Agent
may reasonably request.
(g) Termination of Sanwa Facility. Evidence that the heretofore
-----------------------------
existing line of credit established by Sanwa Bank California in favor of
Borrower in the maximum principal amount of Thirty-Five Million Dollars
($35,000,000) has been terminated and that all obligations of Borrower in
respect thereof have been paid in full.
(h) Other Items. Any other documents and other items Agent may
-----------
reasonably require as conditions precedent to the initial extensions of credit
under this Agreement.
4.2 Conditions to All Borrowings.
----------------------------
The obligation of each Bank and Designated Bid Lender to make any
Advance (including its first disbursement on or after the Effective Date), and
of Agent to issue any Letter of Credit, under the Loan Documents is subject to
the satisfaction on the Funding Date of the Relevant Borrowing of the conditions
set forth below, and, in the case of a Bid Loan, shall be subject to the further
condition that each of the statements made in the applicable Competitive Bid
Request shall be true and accurate in all material respects as if made on and as
of the date of such Bid Loan:
(a) Borrower shall have submitted a timely Borrowing
44
Notice or request for the issuance of a Letter of Credit (and, in the case of a
Letter of Credit, shall have delivered, or caused to be delivered, to Agent,
each of the Letter of Credit Documents relating thereto, in each case, duly
executed and delivered by each party thereto other than Agent);
(b) No Event of Default or event that, with the giving of notice or
the passage of time, or both, would constitute an Event of Default shall have
occurred and be continuing at the time of such Advance or issuance, or would
exist as a result thereof; and
(c) Each of the representations and warranties of Borrower and each
Guarantor contained in this Agreement or the other Loan Documents shall be true
and correct in all material respects on the date of such Advance or issuance
(both before and after giving effect thereto), as if made thereon.
5. REPRESENTATIONS AND WARRANTIES
When Borrower signs this Agreement, and until the Commitments have
terminated, the Letters of Credit have been cancelled or have terminated and all
Obligations have been repaid in full, Borrower makes the following
representations and warranties. Each request for an extension of credit
constitutes a restatement of each such representation and warranty.
5.1 Organization of Borrower; Good Standing.
---------------------------------------
(a) Borrower, and each Guarantor, is duly formed and existing under
the laws of the state where organized. In each state in which Borrower or any
Guarantor does business, it is properly licensed, in good standing, and, where
required, in compliance with any fictitious name statute.
(b) Schedule 1 (if applicable, as updated pursuant to Section 6.18)
sets forth the members, general partners and limited partners, or other holders
of ownership interests in BRE Property Investors LLC and each other Material
Borrower Entity or Guarantor, as well as of each Other Unencumbered Property
Owner, and their respective ownership percentages, and there are no other
membership, partnership or other ownership interests outstanding. No membership,
partnership or other ownership interest (or any securities, instruments,
warrants, option or purchase rights, conversion or exchange rights, calls,
commitments or claims of any character convertible into or exercisable for such
interests) in any Material Borrower Entity, other Guarantor or Other
Unencumbered Property Owner is subject to issuance under any security,
instrument, warrant, option or purchase rights, conversion or exchange rights,
call, commitment or claim of any right, title or interest therein or thereto.
All
45
of the membership, partnership or other ownership interests in Borrower and each
Material Borrower Entity, other Guarantor or Other Unencumbered Property Owner
have been issued in compliance with all applicable requirements of law.
5.2 Authorization; Enforceable Agreement.
------------------------------------
This Agreement and the other Loan Documents are within the powers of
Borrower or the Material Borrower Entity or other Guarantor party thereto, have
been duly authorized and do not conflict with any of its organizational
documents. The Loan Documents do not conflict with any law, agreement or
obligation by which Borrower or any Material Borrower Entity or other Guarantor
is bound. This Agreement is a legal, valid and binding agreement of Borrower,
enforceable against Borrower in accordance with its terms, and any instrument or
document required hereunder, when executed and delivered by Borrower or any
Material Borrower Entity or other Guarantor, will be similarly a legal, valid,
binding and enforceable agreement of such Person.
5.3 Financial Information.
---------------------
(a) All financial statements and data submitted in writing by Borrower
to Agent or any Bank pursuant hereto are true and correct, and all such
financial statements present fairly the financial condition of Borrower as at
the date thereof and the results of the operations of Borrower for the period(s)
covered thereby, and have been prepared in accordance with generally accepted
accounting principles on a basis consistently applied. Borrower has no knowledge
of any liabilities, contingent or otherwise, not reflected in said financial
statements, and neither Borrower nor any Borrower Entity or Joint Venture Entity
has entered into any material commitments or material contracts which are not
reflected in said balance sheet which may have a Material Adverse Effect on
Borrower or any Material Borrower Entity. Since said date there have been no
changes in the assets or liabilities or financial condition of Borrower or any
Material Borrower Entity other than changes in the ordinary course of business,
and no such changes have been materially adverse changes.
(b) All financial and other information that has been or will be
supplied to Agent or any Bank, including the financial statements of Borrower or
any other Person:
(i) is sufficiently complete to give Agent and the Banks
accurate knowledge of the subject's financial condition;
(ii) is in form and content as required by Agent and the Banks,
previously communicated to Borrower;
46
(iii) is in compliance with any government regulations that apply;
and
(iv) does not fail to state any material facts necessary to make
the information contained therein not misleading.
All such information (other than Funds From Operations) was and will be prepared
in accordance with GAAP, unless otherwise noted.
5.4 Lawsuits.
--------
There is no lawsuit, arbitration, claim or other dispute pending or
threatened against Borrower or any Borrower Entity or Joint Venture Entity
which, if lost, could reasonably be expected to impair Borrower's or any
Material Borrower Entity's financial condition or ability to repay advances
made, and other amounts due, under the Loan Documents, except as has been
previously disclosed in writing to Agent and the Banks.
5.5 Title to Assets.
---------------
Borrower, and each Borrower Entity and Joint Venture Entity, has good
and clear title to its assets, and the same are not subject to any Liens other
than those disclosed to Agent and the Banks in writing.
5.6 Permits, Franchises.
-------------------
Borrower, and each Material Borrower Entity, possesses all permits,
franchises, contracts and licenses required and all trademark rights, trade name
rights, and fictitious name rights necessary to enable it to conduct the
business in which it is now engaged.
5.7 Income Tax Returns.
------------------
Borrower, and each Borrower Entity and Joint Venture Entity, has filed
all tax returns and reports required to be filed and has paid all applicable
federal, state and local franchise, income and property taxes which are due and
payable. Borrower has no knowledge of any pending assessments or adjustments of
its income taxes or property taxes (or those of Borrower Entity or Joint Venture
Entity) for any year, except as have been disclosed in writing to Agent and the
Banks. Borrower is not a "foreign person" within the meaning of Section
1445(f)(3) of the Internal Revenue Code of 1986, as amended (the "Code").
5.8 ERISA Plans.
-----------
47
(a) As used herein, (i) "ERISA" means the Employee Retirement Income
Act of 1974, as amended; (ii) "PBGC" means the Pension Benefit Guaranty
Corporation established pursuant to ERISA; and (iii) "Plan" means any employee
pension benefit plan maintained or contributed to by Borrower or any Borrower
Entity and insured by the PBGC.
(b) Borrower, and each Borrower Entity, has fulfilled its obligations,
if any, under the minimum funding standards of ERISA and the Code with respect
to each Plan and is in compliance in all material respects with the presently
applicable provisions of ERISA and the Code, and has not incurred any liability
with respect to any Plan under Title IV of ERISA.
(c) No reportable event has occurred under Section 4043(b) of ERISA
for which the PBGC requires 30 day notice. No action by Borrower or any Borrower
Entity to terminate or withdraw from any Plan has been taken and no notice of
intent to terminate a Plan has been filed under Section 4041 of ERISA. No
proceeding has been commenced with respect to a Plan under Section 4042 of
ERISA, and no event has occurred or condition exists which might constitute
grounds for the commencement of such a proceeding.
5.9 Other Obligations.
-----------------
Neither Borrower nor any Material Borrower Entity or Joint Venture
Entity is in default on any Indebtedness or Contractual Obligation of Borrower,
such Material Borrower Entity or such Joint Venture Entity, as the case may be,
except as has been previously disclosed in writing to Agent and the Banks.
5.10 Event of Default.
----------------
There is no event which is, or with notice or lapse of time or both
would be, an Event of Default hereunder.
5.11 Status as a REIT.
----------------
Borrower (i) is a real estate investment trust as defined in Section
856 of the Code (or any successor provision thereto), (ii) has not revoked its
election to be a real estate investment trust, (iii) has not engaged in any
"prohibited transactions" as defined in Section 856(b)(6)(iii) of the Code (or
any successor provision thereto), and (iv) for its current "tax year" (as
defined in the Code) is and for all prior tax years subsequent to its election
to be a real estate investment trust has been entitled to a dividends paid
deduction which meets the requirements of Section 857 of the Code.
48
5.12 Year 2K.
-------
Borrower has conducted a comprehensive review and assessment of
Borrower's, and each Controlled Borrower Entity's and Controlled Joint Venture
Entity's, computer applications, and made inquiry of Borrower's and each such
other Person's key suppliers, vendors and customers or prospects, with respect
to the "year 2000 problem" (that is, the risk that computer applications may not
be able to perform date-sensitive functions after December 31, 1999), and, based
on that review and inquiry, Borrower does not believe that the year 2000 problem
will have a Material Adverse Effect on Borrower or any Material Borrower Entity.
6. COVENANTS
Borrower agrees, so long as credit is available under this Agreement
or any other Loan Document, until the Letters of Credit have been cancelled or
have terminated and all Obligations have been repaid in full:
6.1 Use of Proceeds.
---------------
Borrower shall use, and shall permit the proceeds of the advances under
the Loan Documents to be used, only for (a) the funding of costs directly
related to the acquisition of apartment projects, or (b) general working capital
purposes of Borrower, including (but subject to Section 6.4(g)), development
expenditures. In complying with the provisions of the foregoing clause (a),
Borrower shall not be required to apply advances under the Loan Documents in
direct payment of acquisition costs, but shall be permitted to request and
obtain such advances by way of reimbursement of acquisition costs previously
incurred and funded out of Borrower's cash reserves.
6.2 Financial Information.
---------------------
Borrower shall provide the following financial information and
statements and such additional information as requested by Agent from time to
time:
(a) As soon as available but not later than ninety (90) days after
Borrower's fiscal year end, a copy of Borrower's Form 10-K Annual Report and (to
the extent not included in such Form 10-K) a copy of Borrower's annual
consolidated financial statements for such fiscal year including balance sheet,
income statement, statement of cash flows and statement of shareholders' equity.
All such financial statements (whether or not included in Borrower's Form 10-K)
must be audited (with an unqualified opinion) by Borrower's CPA and certified by
Borrower's Chief
49
Financial Officer (or other officer acceptable to Agent).
(b) As soon as available but not later than sixty (60) days after each
fiscal quarter end, Borrower's Form 10-Q Quarterly Report and (to the extent not
included in such Form 10-Q) a copy of Borrower's consolidated financial
statements for such fiscal quarter, including balance sheet, income statement,
statement of cash flows and statement of shareholders' equity. All such
financial statements must be certified by Borrower's Chief Financial Officer (or
other officer acceptable to Agent).
(c) As soon as available but not later than ninety (90) days after
Borrower's fiscal year end, Borrower's annual three-year consolidated financial
projection, including balance sheet and income statement, in a format and with
such detail as Agent may require. These projections must be certified by
Borrower's Chief Financial Officer (or other officer acceptable to Agent).
(d) Copies of Borrower's Form 8-K Current Reports and all other
filings within fifteen (15) days after the date of filing with the Securities
and Exchange Commission, and copies of all press releases made by Borrower.
(e) As soon as available but not later than sixty (60) days after the
end of each of the first three fiscal quarters of Borrower's fiscal year, and as
soon as available but not later than ninety (90) days after the end of each of
Borrower's fiscal years, Borrower's quarterly internal management reports
(including (i) a schedule of all Debt Service for the prior quarter, (ii) a
schedule of Net Operating Income for each Real Property and other real property
asset for the preceding four (4) fiscal quarters, (iii) a schedule listing all
Indebtedness secured by a Lien on any real property assets of Borrower or any
Borrower Entity or Joint Venture Entity, (iv) a statement of the number of
apartment units (by project and location) under development (as defined in
Section 6.4(g)) by Borrower or any Borrower Entity or Joint Venture Entity at
fiscal quarter-end, (v) a schedule identifying all real property leaseholds held
by Borrower or any Borrower Entity or Joint Venture Entity at fiscal quarter-
end, and (vi) a schedule showing the Borrower's Share of each Borrower Entity
that is not a Guarantor and of each Joint Venture Entity at fiscal quarter-end).
These reports must be certified by Borrower's Chief Financial Officer (or other
officer acceptable to Agent).
(f) At the time of the delivery of the financial statements provided
for in Sections 6.2(a) and (b), a certificate executed by the Chief Financial
Officer of Borrower certifying compliance with all financial covenants herein,
including appropriate supporting schedules and calculations, and certifying
50
that to the best of the such officer's knowledge, no Event of Default has
occurred and is continuing or would result after notice or passage of time or
both or, if any Event of Default has occurred and is continuing or would result
after notice or passage of time or both, specifying the nature and extent
thereof. Notwithstanding anything to the contrary contained herein and without
limiting Agent's or the Banks' other rights and remedies, if any certificate
required under this Section 6.2 is not provided on or before the due date
therefor, Borrower shall be prohibited from any further borrowing or issuances
of Letters of Credit under the Loan Documents until such certificate is
provided.
6.3 Other Information.
-----------------
Borrower shall provide Agent:
(a) Promptly upon, and in any event within forty-eight (48) hours
after Borrower first has actual knowledge of (i) its failing to continue to
qualify as a real estate investment trust as defined in Section 856 of the Code
(or any successor provision thereof), (ii) any act by Borrower causing its
election to be taxed as a real estate investment trust to be terminated, (iii)
any act causing Borrower to be subject to the taxes imposed by Section 857(b)(6)
of the Code (or any successor provision thereto), or (iv) Borrower failing to be
entitled to a dividends paid deduction which meets the requirements of Section
857 of the Code, a notice of any such occurrence or circumstance.
(b) Such additional financial and other information as Agent may
reasonably request from time to time.
6.4 Financial Covenants.
-------------------
(a) Minimum Net Worth. Borrower will maintain a Tangible Net Worth
-----------------
of not less than (i) Six Hundred Million Dollars ($600,000,000), plus (ii)
seventy percent (70%) of Net Offering Proceeds received by Borrower after June
30, 1998.
(b) Total Liabilities to Total Assets. The ratio of Total
---------------------------------
Liabilities to Total Assets shall not exceed 0.50:1.
(c) Secured Indebtedness to Total Assets. The ratio of Secured
------------------------------------
Indebtedness to Total Assets shall not exceed 0.30:1.
(d) Unencumbered Real Property to Unsecured Indebtedness;
-----------------------------------------------------
Unencumbered Real Property NOI to Unsecured Interest Expense.
-------------------------------------------------------------
(i) The ratio of (A) Total Real Property Market Value of all
Unencumbered Real Property to (B) total
51
outstandings under Unsecured Indebtedness shall not be less than 1.75:1.
(ii) The ratio of
(A) the sum of (1) the aggregate Net Operating Income of all
Unencumbered Real Properties owned directly by Borrower or any Controlled
Borrower Entity that is a Guarantor, plus (2) to the extent that the
aggregate contribution to the amount determined in accordance with this
clause (A) attributable to this subclause (2) is not in excess of 10% of
such total amount, for each (a) Controlled Borrower Entity that is not a
Guarantor or (b) Controlled Joint Venture Entity (whether or not it is a
Guarantor), Borrower's Share of the Net Operating Incomes of all
Unencumbered Real Properties owned directly by such Person; to
(B) Unsecured Interest Expense for any fiscal quarter, shall
not be less than 1.75:1.
(e) EBITDA to Debt Service. The ratio of EBITDA to Debt Service
----------------------
shall not be less than 2.00:1.
(f) Distributions.
-------------
(i) Subject to subparagraph (ii) below, aggregate distributions
by Borrower, determined on a consolidated basis, shall not exceed the
following, as reported in accordance with GAAP, for any period of four (4)
consecutive fiscal quarters of Borrower ended on December 31 of any
calendar year: the greater of (A) ninety-five percent (95%) of Funds From
Operations for such period, or (B) an amount, but not in excess of one
hundred percent (100%) of Funds From Operations for such period, as
Borrower may be required to distribute to its shareholders in order to
maintain compliance with Section 6.15. For purposes of this Section 6.4(f),
the term "distributions" shall mean and include (A) all dividends and other
distributions to, and the repurchase of shares or other equity interests
from, the holder of any equity interests in Borrower, BRE Property
Investors LLC or any other Consolidated Borrower Entity or Consolidated
Joint Venture Entity, other than (B) (1) redemptions of equity interests
----- ----
for common stock of Borrower, and (2) to the extent not in excess of
$5,000,000 in any one fiscal year, redemptions of equity interests in BRE
Property Investors LLC for cash or property other than common stock of
Borrower pursuant to the redemption provisions of its Charter Documents as
in effect on the date hereof.
52
(ii) No distributions (or redemptions in cash or property, other
than common stock of Borrower, of equity interests in BRE Property
Investors LLC not constituting distributions) shall be made during the
continuance of any Event of Default arising out of Borrower's failure to
pay any monetary obligation when due under any Loan Document (a "Monetary
Default"). Aggregate distributions or redemptions, in cash or property
other than common stock of Borrower, of equity interests in BRE Property
Investors LLC during the continuance of any Event of Default other than a
Monetary Default (determined on a consolidated basis) shall not exceed the
lesser of (A) the aggregate amount of distributions permitted to be made
during the continuance thereof under subparagraph (i) above, or (B) the
minimum amount that Borrower must distribute to its shareholders in order
to maintain compliance with Section 6.15.
(g) Development. At no time shall the total number of apartment
-----------
units under development by Borrower or any Borrower Entity or Joint Venture
Entity exceed the lesser of (i) twenty percent (20%) of the total number of
apartment units (excluding such units under development) then owned by Borrower
or any Borrower Entity or Joint Venture Entity, and (ii) 6,000 apartment units.
For purposes of the foregoing covenant, "development" shall mean all units under
construction, at or beyond the foundation stage, within a particular apartment
project, until the construction of all units (or discreet phase(s) thereof, if
applicable) shall have been completed, certificates of occupancy shall have been
issued with respect to such units, and such units shall be available for
immediate lease and occupancy in the normal course of business.
(h) Maximum Unsecured Lines of Credit. Borrower shall not permit
---------------------------------
total commitments (disbursed and undisbursed) with respect to Unsecured
Indebtedness of Borrower, any Borrower Entity or any Joint Venture Entity under
lines of credit to exceed the sum of (i) the Maximum Loan Amount, plus (ii) the
total commitments (disbursed and undisbursed) made available to Borrower under
any and all other lines of credit from time to time provided to Borrower, any
Borrower Entity or any Joint Venture Entity by (A) Agent and the Banks, or (B) a
group of lenders, consisting of BofA and one or more other lenders, for whom
BofA serves as agent at the time such line of credit is first made available.
Further, neither Borrower nor any Borrower Entity or Joint Venture Entity shall
enter into any commitment for Unsecured Indebtedness under lines of credit other
than under (x) this Agreement, and (y) any other lines of credit from time to
time provided to Borrower, any Borrower Entity or any Joint Venture Entity by
Agent and the Banks or by a group of lenders, consisting of BofA and one or more
other lenders, for whom BofA
53
serves as agent at the time such line of credit is first made available.
(i) Unsecured Indebtedness. Neither Borrower nor any Borrower
----------------------
Entity or Joint Venture Entity shall incur, or permit to exist, any Unsecured
Indebtedness other than (i) Indebtedness under revolving lines of credit to the
extent permitted under Section 6.4(h), and (ii) non-revolving, non-amortizing
Indebtedness with a maturity or call date not earlier than one (1) year after
the Maturity Date under the Note in effect at the time such Indebtedness is
incurred; provided, however, that the foregoing amortization restriction shall
-------- -------
not apply to amortization required, as of the date of this Agreement, under the
Prudential Indebtedness, and provided further that no Guarantor or Other
-------- -------
Unencumbered Property Owner shall incur, or permit to exist, any Indebtedness
other than Non-Recourse Indebtedness.
(j) Calculation. Each of the foregoing ratios and financial
-----------
requirements shall be calculated as of the last day of each fiscal quarter, but
shall be satisfied at all times.
6.5 Taxes and Other Liabilities.
---------------------------
Borrower shall pay and discharge, and shall cause each Controlled
Borrower Entity and Controlled Joint Venture Entity to pay and discharge, before
the same become delinquent and before penalties accrue thereon, all taxes,
assessments and governmental charges upon or against it or any of its
properties, and all its other liabilities at any time existing, except to the
extent and so long as:
(a) The same are being contested in good faith and by appropriate
proceedings in such manner as not to cause any Material Adverse Effect on
Borrower or any Material Borrower Entity or the loss of any right of redemption
from any sale thereunder; and
(b) Borrower shall have set aside on its books reserves (segregated to
the extent required by generally accepted accounting principles) adequate with
respect thereto.
6.6 Notices to Agent.
----------------
Borrower shall promptly notify Agent in writing of:
(a) any Event of Default hereunder or any event which would become an
Event of Default hereunder upon the giving of notice, the lapse of time, or
both;
(b) any single lawsuit or arbitration claiming over
54
Two Hundred Fifty Thousand Dollars ($250,000), and lawsuits or arbitrations
collectively claiming over One Million Dollars ($1,000,000), against Borrower or
any Guarantor;
(c) any significant dispute between Borrower or any Guarantor and any
government authority;
(d) Borrower's receipt of any notice relating to (i) any change in or
reaffirmation of, or proposed change in or reaffirmation of, the rating of
Borrower's senior long-term unsecured debt obligations by any Rating Agency, or
(ii) the issuance of any Rating by a Rating Agency as to which no Rating is then
in effect; and
(e) any event, circumstance or condition which may have a Material
Adverse Effect on Borrower or any Guarantor.
6.7 Audits; Books and Records.
-------------------------
Borrower shall (i) maintain (and shall cause each Controlled Borrower
Entity and Controlled Joint Venture Entity to maintain) adequate books and
records, and (ii) allow and its agents (and cause Controlled Borrower Entities
and Controlled Joint Venture Entities to allow Agent and its agents) to inspect
Borrower's and such Controlled Borrower Entities' and Controlled Joint Venture
Entities' properties and examine, audit and make copies of books and records at
any reasonable time. If any of Borrower's properties, books or records are in
the possession of a third party, Borrower hereby authorizes that third party to
permit Agent or its agents to have access to perform inspections or audits and
to respond to Agent's requests for information concerning such properties, books
and records.
6.8 Compliance with Laws.
--------------------
Borrower shall comply, and shall cause each Controlled Borrower Entity
and Controlled Joint Venture Entity to comply, with the laws (including any
fictitious name statute), regulations, and orders of any government body with
authority over such Person's business.
6.9 Preservation of Rights.
----------------------
Borrower shall maintain and preserve, and shall cause each Material
Borrower Entity to maintain and preserve, all rights, privileges, and franchises
Borrower or such Material Borrower Entity now has (or, if later, as of the date
such Person becomes a Material Borrower Entity).
6.10 Maintenance of Properties.
-------------------------
55
Borrower shall make, and shall cause each Controlled Borrower Entity
and Controlled Joint Venture Entity to make, repairs, renewals, or replacements
to keep such Person's properties in good working condition.
6.11 Insurance.
---------
Borrower shall maintain, or cause to be maintained, insurance in such
amounts and covering such risks as is usually carried by companies engaged in
similar businesses and owning similar properties in the same general areas in
which Borrower and the Controlled Borrower Entities and Controlled Joint Venture
Entities operate and maintain such other insurance and coverages as may be
reasonably required by Agent. All such insurance shall be in form and amount and
with companies satisfactory to Agent. Upon Agent's request, Borrower shall
furnish Agent with a copy of the policy or binder of all such insurance and
continuing evidence that such insurance remains in force at applicable renewal
dates.
6.12 ERISA Plans.
-----------
Borrower shall give prompt written notice to Agent of the occurrence of
any reportable event under Section 4043(b) of ERISA for which the PBGC requires
30 day notice; any action by Borrower or any Borrower Entity to terminate or
withdraw from a Plan or the filing of any notice of intent to terminate under
Section 4041 of ERISA; any notice of noncompliance made with respect to a Plan
under Section 4041(b) of ERISA; or the commencement of any proceeding with
respect to a Plan under Section 4042 of ERISA.
6.13 Indemnity of Guarantors.
-----------------------
Borrower shall indemnify and hold harmless each Guarantor from and
against any liability (in the form of indebtedness repaid to Agent, any Bank or
any Designated Bid Lender) in respect of Borrower's obligations under the Loan
Documents, including (if applicable) by way of foreclosure on any collateral in
which such Guarantor may at any time hereafter grant to Agent a security
interest) in excess of the benefit realized by such Guarantor from the proceeds
of the Loan. As between Borrower and each Guarantor, Borrower shall be
responsible to reimburse each Guarantor in respect of amounts paid by such
Guarantor pursuant to its Guaranty of Borrower's obligations under the Loan
Documents to the end that Borrower, and each Guarantor, ultimately bear the
burden of their respective shares of such obligations. Borrower's obligations to
the Guarantors under this Section 6.13 shall be subordinated to its obligations
to Agent, the Banks and the Designated Bid Lenders as provided in the
Guaranties.
56
6.14 Additional Negative Covenants.
-----------------------------
Borrower shall not, without Agent's written consent (delivered upon
such consent of any or all of the Banks as may be required under the Co-Lender
Agreement):
(a) Merge or dissolve into, or consolidate with, any Person, or permit
any Material Borrower Entity to do so, except in each case for mergers and
consolidations (i) which result in Borrower or such Material Borrower Entity, as
the case may be, being the surviving entity (provided that Borrower shall be the
surviving entity in any merger or consolidation with a Material Borrower
Entity), (ii) which do not have a Material Adverse Effect on Borrower or the
affected Material Borrower Entity, and (iii) which do not result in Borrower,
following the consummation of such merger or consolidation, being in default
under any term or condition of this Agreement. Neither Borrower nor any Material
Borrower Entity shall sell, lease, transfer, encumber or otherwise dispose of
all or any substantial part of its properties or assets, whether in a single
transaction or series of transactions, if such sale, lease, transfer,
encumbrance or other disposition would cause a Material Adverse Effect on
Borrower or such Material Borrower Entity; nor shall Borrower transfer to any
Borrower Entity or Joint Venture Entity any Real Property or other material
asset owned as of the date hereof or that constitutes proceeds (or proceeds of
proceeds) of any Real Property or other material asset owned by Borrower as of
the date hereof;
(b) Except for any such amendment that is required under any
requirement of law imposed by any governmental authority or in order to maintain
compliance with Section 6.15, amend its articles of incorporation or by-laws, or
permit any Material Borrower Entity to amend any of its charter documents,
except in each case (i) upon at least ten (10) Banking Days' prior written
notice to Agent, and (ii) if Agent notifies Borrower within such 10-day
---
period that such amendment is, in Agent's reasonable judgment, a material
amendment, with the prior written consent of Agent;
(c) Suspend its business activity, or permit any Material Borrower
Entity to suspend its business activity, in either case for more than two days;
(d) Voluntarily commence any case under the United States Bankruptcy
Code (or any successor statute) with respect to itself unless Borrower
concurrently causes each Guarantor to commence a voluntary case under the United
States Bankruptcy Code (or such successor statute) with respect to itself, and
requests that all such cases be consolidated with its own.
57
(e) Use any proceeds of any advance under the Loan Documents (or
permit such proceeds to be used), directly or indirectly, to purchase or carry,
or reduce or retire any loan incurred to purchase or carry any "Margin Stock"
(within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System) or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock;
(f) Permit Borrower's aggregate Investments in Borrower Entities or
Joint Venture Entities that have not executed and delivered a Guaranty that
remains in full force and effect to exceed at any time ten percent (10%) of
Borrower's consolidated total assets, determined in accordance with GAAP;
(g) Cease to Control any Material Borrower Entity, other Guarantor or
Other Unencumbered Property Owner; or
(h) Create, suffer or permit to exist any Lien on its interest in any
Guarantor or Other Unencumbered Property Owner.
6.15 Continued Status as a REIT; Prohibited Transactions.
---------------------------------------------------
Borrower (i) will continue to be a real estate investment trust as
defined in Section 856 of the Code (or any successor provision thereto), (ii)
will not revoke its election to be a real estate investment trust, (iii) will
not engage in any "prohibited transactions" as defined in Section 856(b)(6)(iii)
of the Code (or any successor provision thereto), and (iv) will continue to be
entitled to a dividend paid deduction meeting the requirements of Section 857 of
the Code.
6.16 NYSE Listed Company.
-------------------
The common stock of Borrower shall at all times be listed for trading
and be traded on the New York Stock Exchange.
6.17 Conduct of Business.
-------------------
Borrower shall engage primarily in the business of direct ownership,
operation and acquisition or development for its own account of apartment
projects located in the Western United States (which shall be understood to mean
Colorado and States westward); provided, however, that the foregoing shall not
restrict either Borrower's continued ownership and operation of assets owned as
of the Effective Date or other business activities of Borrower or any Borrower
Entity reasonably incidental to business activities otherwise permitted under
this Section 6.17.
6.18 Delivery of Guaranties and Other Documents.
------------------------------------------
58
Within fifteen (15) days after (a) any Borrower Entity becomes a
Material Borrower Entity, or (b) Borrower forms or acquires, by merger or
otherwise, a Material Borrower Entity: Borrower shall (x) give Agent written
notice thereof, (y) cause such Material Borrower Entity to execute and deliver
to Agent a Guaranty, and (z) deliver to Agent (i) with respect to such Material
Borrower Entity, the documents described in Sections 4.1(b) and 4.1(c), (ii) an
updated Schedule 1, reflecting such information with respect to such Material
Borrower Entity as is required to be reflected on Schedule 1 pursuant to Section
5.1(b), and (iii) an opinion of counsel addressing the due formation, existence
and good standing of such Person, the due authorization, execution and delivery
by such Person of such Guaranty, the enforceability thereof, and such other
matters, if any, as Agent may reasonably request. Upon the inclusion of any real
property asset owned by a Borrower Entity or Joint Venture Entity other than a
Material Borrower Entity as Unencumbered Real Property by virtue of the
execution and delivery by such Borrower Entity or Joint Venture Entity of a
Guaranty, or by a Person that would, as a result of such inclusion, become an
Other Unencumbered Property Owner (but, in either case, without limiting the
requirement that such real property asset qualify in all respects as
"Unencumbered Real Property" in order to be included as such), Borrower shall
deliver to Agent (1) with respect to such Guarantor or Other Unencumbered
Property Owner, the documents described in Sections 4.1(b) and 4.1(c), as
applicable, (2) an updated Schedule 1, reflecting such information with respect
to such Guarantor or Other Unencumbered Property Owner as is required to be
reflected on Schedule 1 pursuant to Section 5.1(b), and (3) if such Person is
becoming a Guarantor, an opinion of counsel addressing the due formation,
existence and good standing of such Person, the due authorization, execution and
delivery by such Person of such Guaranty, the enforceability thereof, and such
other matters, if any, as Agent may reasonably request.
6.19 Cooperation.
-----------
Borrower shall take any action reasonably requested by Agent to carry
out the intent of the Loan Documents.
7. COLLATERAL; OTHER SPECIAL PROVISIONS
7.1 Collateral. This Line of Credit is unsecured.
----------
7.2 Other Special Provisions. For purposes of this Section 7.2,
------------------------
capitalized terms not otherwise defined in this Agreement have the definitions
given to them in Section 7.2(c).
Notwithstanding any other provision of this Agreement,
59
effective as of the date on which Blue Ravine Properties LLC executes and
delivers to Agent a Guaranty, together with the other documents required by
Section 6.18:
(a) Until the Special Provisions Termination Date, the Blue Ravine
Property shall constitute "Unencumbered Real Property" for purposes of this
Agreement, notwithstanding that it is subject to Borrower Lien (as defined
below); provided that, but for the existence of Borrower Lien (and for that
-------- ----
reason alone), the Blue Ravine Property would constitute both "Real Property"
and "Unencumbered Real Property", within the meaning of those terms.
(b) The "value" of the Blue Ravine Property for all purposes of this
Agreement (including, without limitation, for purposes of determining "Total
Assets" and "Total Real Property Market Value of Unencumbered Real Property"),
at any time, shall be equal to (i) its value, as determined using the "Current
Value Method", minus (ii) the then- outstanding principal amount of
-----
Borrower-Owned Debt.
(c) As used in this Section 7.2, the following terms have the
following meanings:
(i) "Borrower Lien" means the Lien, in existence as of the date
of this Agreement, in favor of Borrower, securing Borrower-Owned Debt (and only
Borrower-Owned Debt).
(ii) "Borrower-Owned Debt" means the indebtedness of Blue Ravine
Properties LLC, in an original principal not exceeding $5,700,000, outstanding
as of the date on which Blue Ravine Properties LLC acquires the Blue Ravine
Property, as reduced from time to time by any repayment or prepayment of the
principal thereof; provided that such indebtedness is, and continues to be, held
-------- ----
by Borrower free and clear of all Liens in favor of any other Person whatsoever.
(iii) "Blue Ravine Property" means the Real Property owned by Blue
Ravine Properties LLC as of the date of the initial advance under the Line of
Credit or acquired thereon.
(iv) "Special Provisions Termination Date" means the earliest of
(A) December 31, 1998, (B) the date as of which (1) Blue Ravine Properties LLC
is liquidated or dissolved, or merged into BRE Property Investors LLC, or (2)
the Blue Ravine Property otherwise ceases to be owned by Blue Ravine Properties
LLC; or (C) the date on which the Blue Ravine Property otherwise fails to
constitute "Unencumbered Real Property" pursuant to Section 7.2(a).
60
8. DEFAULT
If any of the following events occurs (an "Event of Default"), Agent may
(and shall, upon the instructions of Majority Banks) declare Borrower in
default, stop making any additional credit available to Borrower, and require
Borrower to repay its entire debt immediately and without prior notice. However,
if a bankruptcy petition is filed with respect to Borrower, the entire debt
outstanding under the Loan Documents shall automatically be due immediately.
8.1 Failure to Pay.
--------------
Borrower, or any Guarantor, fails to make any payment due under the
Loan Documents (i) within fifteen (15) days after the date when due, or (ii)
within such other period, or no period, as may expressly be provided in any
other Loan Document to constitute an Event of Default.
8.2 False Information.
-----------------
Borrower, or any Guarantor, has given Agent, or any Bank, false or
misleading information or representations.
8.3 Bankruptcy.
----------
Borrower, or any Borrower Entity or Joint Venture Entity, files a
bankruptcy petition or makes a general assignment for the benefit of creditors,
or a bankruptcy petition is filed against any such Person. The default will be
deemed cured if any bankruptcy petition filed against Borrower or any Borrower
Entity or Joint Venture Entity is dismissed within a period of forty-five (45)
days after the filing; provided, however, that neither Agent, any Bank nor any
Designated Bid Lender will be obligated to extend any additional credit to
Borrower during that period.
8.4 Receivers; Dissolution.
----------------------
A receiver or similar official is appointed for Borrower's, or any
Borrower Entity's or Joint Venture Entity's, business, or the business is
terminated; or any order, judgment or decree is entered against Borrower or any
Borrower Entity or Joint Venture Entity decreeing its involuntary dissolution or
split up and remains undischarged and unstayed for a period in excess of thirty
(30) days; the directors or other managing body of, or the members, shareholders
or other holders of the equity interests in, Borrower or any Material Borrower
Entity shall take any action authorizing the dissolution of Borrower or any
Material Borrower Entity; or Borrower or any Material Borrower Entity shall
otherwise dissolve or (except as the result of the
61
merger of a Material Borrower Entity into Borrower) cease to exist.
8.5 Lawsuits.
--------
Any lawsuit(s) or arbitration(s) are initiated against Borrower or any
Material Borrower Entity involving claims exceeding in the aggregate Fifty
Million Dollars ($50,000,000) or more at any one time in excess of any insurance
coverage.
8.6 Judgments.
---------
Any judgment or arbitration award is entered against Borrower or any
Material Borrower Entity, or Borrower, or any Material Borrower Entity, enters
into any settlement agreement with respect to any litigation, claim or
arbitration, in an aggregate amount of Ten Million Dollars ($10,000,000) or more
in excess of any insurance coverage.
8.7 ERISA Plans.
-----------
The occurrence of any of the following event(s) with respect to
Borrower or any Material Borrower Entity, provided such event(s) could
reasonably be expected, in the judgment of Agent, to subject Borrower or such
Material Borrower Entity to any tax, penalty or liability (or any combination of
the foregoing) which in the aggregate could have a Material Adverse Effect on
Borrower or such Material Borrower Entity with respect to a Plan:
(a) A reportable event occurs with respect to a Plan which in the
reasonable judgment of Agent may result in the termination of such Plan for
purposes of ERISA.
(b) Any Plan termination (or commencement of proceedings to terminate
a Plan) or Borrower's, or any Material Borrower Entity's, full or partial
withdrawal from a Plan.
8.8 Government Action.
-----------------
Any government authority takes action that the Majority Banks believe
could have a Material Adverse Effect on Borrower or any Material Borrower
Entity.
8.9 Material Adverse Change.
-----------------------
Any event, circumstance or condition shall occur, or is reasonably
likely to occur, which the Majority Banks believe could have a Material Adverse
Effect on Borrower or any Material Borrower Entity.
62
8.10 Other Breach Under This Agreement or Other Loan Documents.
---------------------------------------------------------
(a) Borrower fails to meet the conditions of or fails to perform any
obligation under any of Sections 6.2, 6.5, 6.11 and 6.18, and such failure
continues uncured for a period of fifteen (15) days.
(b) Borrower, or any Guarantor, fails to meet the conditions of or
fails to perform any obligation under any term of this Agreement or any other
Loan Document not specifically referred to in this Article 8. If, in Agent's
opinion, the breach is capable of being remedied, the breach will not be
considered an Event of Default under this Agreement for a period of thirty (30)
days after the date on which Agent gives written notice of the breach to
Borrower; provided, however, that neither Agent, the Banks nor the Designated
Bid Lenders will be obligated to extend any additional credit to Borrower during
that period.
8.11 Cross-Default.
-------------
Any default occurs under any agreement in connection with any credit
Borrower or any Controlled Borrower Entity, Consolidated Borrower Entity,
Controlled Joint Venture Entity or Consolidated Joint Venture Entity, or any of
Borrower's other Affiliates, has obtained from any creditor, or which
constitutes an Accommodation Obligation of Borrower or any such other Person, if
the default consists of a failure to make a payment when due or gives the
creditor the right to accelerate (or causes the acceleration of) the obligation.
9. ENFORCING THIS AGREEMENT
9.1 Remedies.
--------
If an Event of Default occurs under the Loan Documents, Agent, the
Banks and the Designated Bid Lenders may exercise any right or remedy they have
under any of the Loan Documents or which is otherwise available at law or in
equity. All of such rights and remedies shall be cumulative. At the Majority
Banks' option, exercisable in their sole discretion, all of Borrower's
obligations under the Loan Documents will become immediately due and payable
without notice of default, presentment or demand for payment, protest or notice
of nonpayment or dishonor, or other notices or demands of any kind.
10. APPOINTMENT AND AUTHORIZATION OF AGENT
10.1 Appointment.
-----------
Each Bank hereby irrevocably appoints, designates and
63
authorizes Agent to take such action on its behalf under the provisions of this
Agreement and each other Loan Document and to exercise such powers and perform
such duties as are expressly delegated to it by the terms of this Agreement or
any other Loan Document, together with such powers as are reasonably incidental
thereto and as further provided in the Co-Lender Agreement described below.
10.2 Powers.
------
Subject to the limitations set forth in the Loan Documents and Co-
Lender Agreement, Agent's powers include but are not limited to the power: (i)
to administer, manage and service the Line of Credit and the Bid Loan Facility;
(ii) to enforce the Loan Documents; (iii) to make all decisions under the Loan
Documents in connection with the day-to-day administration of the Line of Credit
and Bid Loan Facility, any inspections authorized by the Loan Documents, and
other routine administration and servicing matters; (iv) to collect and receive
from Borrower or any third persons all payments of amounts due under the terms
of the Loan Documents and to distribute the amounts thereof to the Banks, for
their own account and for the respective accounts of their Designated Bid
Lenders; (v) to collect and distribute or disburse all other amounts due under
the Loan Documents; (vi) to grant or withhold consents, approvals or waivers,
and make any other determinations in connection with the Loan Documents; and
(vii) to exercise all such powers as are incidental to any of the foregoing
matters. Agent shall furnish to Banks, for their own use and for transmittal to
their Designated Bid Lenders, copies of material documents, including
confidential ones, received from Borrower regarding the Line of Credit or the
Bid Loan Facility, the Loan Documents and the transactions contemplated thereby.
Agent shall have no responsibility with respect to the authenticity, validity,
accuracy or completeness of the information provided.
10.3 Limitation on Duties.
--------------------
Notwithstanding any provision to the contrary contained in any Loan
Document, Agent shall not have any duties or responsibilities, except those
expressly set forth in the Loan Documents or the Co-Lender Agreement, nor shall
Agent have any fiduciary relationship with any Bank or Designated Bid Lender,
and no implied covenants, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document against Agent.
10.4 Co-Lender Agreement.
-------------------
Borrower acknowledges that the Banks (and each Designated Bid Lender at
any time party to a Designation
64
Agreement) have executed a Co-Lender Agreement (as amended from time to time,
the "Co-Lender Agreement") to supplement the Loan Documents with respect to the
relationship of the Banks, the Designated Bid Lenders and Agent among themselves
in connection with the credit facilities provided under the Loan Documents. The
Co-Lender Agreement is not a Loan Document. Each of Sanwa Bank California and
U.S. Bank acknowledges that, upon the execution and delivery of this Agreement
by all parties, it shall become a party to (i) the other Loan Documents (other
than the separate letter understanding between Borrower and BofA referred to in
Section 2.1(e), which separate letter understanding shall hereafter constitute
the "Supplemental Letter" for purposes of any other Loan Document or the Co-
Lender Agreement) to which the Banks are party and (ii) the Co-Lender Agreement,
and shall succeed to all of the rights and be obligated to perform all of the
obligations of a Bank under the Loan Documents. Each of Sanwa Bank California
and U.S. Bank agrees that it will perform all of the obligations required to be
performed by it as a Bank under the Loan Documents and the Co-Lender Agreement.
10.5 Resignation; Replacement.
------------------------
(a) Agent may, and at the request of the Majority Banks shall, resign
as Agent upon 30 days' notice to the Banks. If Agent resigns under this
Agreement, the Majority Banks subject to Section 10.5(b)) shall appoint from
among the Banks a successor agent. If no successor agent is appointed prior to
the effective date of the resignation of Agent, Agent may appoint, after
consulting with the Banks, a successor agent from among the Banks. Upon the
acceptance of appointment as successor agent hereunder, such successor agent
shall succeed to all the rights, powers and duties of the retiring Agent and the
term "Agent" shall mean such successor agent, and the retiring Agent's
appointment, powers and duties as Agent shall terminate. After any retiring
Agent's resignation hereunder as Agent, the provisions regarding payment of
costs and expenses and indemnification of Agent shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent under this
Agreement. If no successor agent has accepted appointment as Agent by the date
which is 30 days following a retiring Agent's notice of resignation, the
retiring Agent's resignation shall nevertheless thereupon become effective, and
the Banks shall perform all of the duties of Agent hereunder until such time, if
any, as the Majority Banks appoint a successor agent.
(b) Each successor Agent appointed by the Banks shall concurrently
assume the rights and obligations of (i) the Swing Line Lender (including the
Swing Line Lender's commitment to fund Swing Line Borrowings and its interest in
outstanding Advances under the Swing Line) and (ii) Agent in its capacity as
issuer of
65
all outstanding Letters of Credit (and who, concurrently with its appointment as
Agent, issues replacement Letters of Credit for such outstanding Letters of
Credit, which shall be cancelled and returned to the outgoing Agent). Neither
the commitment of the Swing Line Lender to fund Swing Line Borrowings, nor the
Swing Line Lender's interest in outstanding Swing Line Borrowings, may be
assigned to any Person other than a Person who concurrently becomes both a
successor Agent and the Swing Line Lender.
11. ASSIGNMENTS, PARTICIPATIONS, ETC.
11.1 Assignments.
-----------
A Bank may at any time assign to one or more Eligible Assignees (each
an "Assignee") with the written consent of Borrower (other than during the
existence of an Event of Default) and of Agent (at all times), which consent
shall not be unreasonably withheld (provided that no written consent shall be
required for an Eligible Assignee that is an Affiliate of such assignor Bank)
all or part of its Pro Rata Share of the Line of Credit and the other rights and
obligations of such assignor Bank hereunder with respect to the Committed Loans
and the Line of Credit (excluding, however, its interest in any outstanding Bid
Loans), in a minimum amount (with respect to such Bank's Commitment) of
$5,000,000; provided, however, that no such assignment (other than an assignment
of the assignor Bank's entire remaining Commitment) shall be permitted if the
effect thereof is to cause the remaining Commitment of the assignor Bank to be
less than $15,000,000, and no assignment may be made of any outstanding
Committed Loan except in connection with an assignment of a corresponding
proportional share of the assignor Bank's Commitment. However, such assignment
shall be conditioned on, and Borrower and Agent may continue to deal solely and
directly with such assignor Bank until, (i) written notice of such assignment,
substantially in the form of the attached Exhibit F shall have been given to
Borrower and Agent by such Bank and the Assignee; (ii) such Bank and its
Assignee shall have delivered to Agent and Borrower an Assignment and Assumption
Agreement substantially in the form of the attached Exhibit G ("Assignment and
Assumption Agreement") (together with any Note(s) subject to such assignment);
and (iii) the Assignor has paid (or caused to be paid) to Agent a processing fee
in the amount of $5,000.
66
11.2 Effects of Assignment.
---------------------
From the date that Agent notifies the assignor Bank that all
conditions and requirements of the assignment have been met, then to the extent
that rights and obligations hereunder have been assigned (i) the Assignee
thereunder shall be a party hereto and shall have the rights and obligations of
a Bank under the Loan Documents and the Co-Lender Agreement, (ii) the assignor
Bank shall relinquish such assigned rights and be released from such assigned
obligations under the Loan Documents, (iii) this Agreement shall be deemed to be
amended to the extent necessary to reflect the addition of the Assignee and the
resulting adjustment of the Pro Rata Shares of the Loan arising therefrom, and
(iv) the Pro Rata Share allocated to an Assignee shall reduce the Pro Rata Share
of the assigning Bank.
11.3 Participations.
--------------
A Bank or Designated Bid Lender (the "originating Lender") may sell to
one or more Persons not Affiliates of Borrower (a "Participant") participating
interests in the Line of Credit or in any Bid Loans made by the originating
Lender; provided that (i) the originating Lender's obligations under the Loan
Documents and the Co-Lender Agreement shall remain unchanged, (ii) the
originating Lender shall remain solely responsible for the performance of such
obligations, (iii) Borrower and Agent shall continue to deal solely and directly
with the originating Lender (or, in the case of a Designated Bid Lender, its
Designating Bank) in connection with the Advances and Loan Documents, (iv) (A)
no Bank shall transfer or grant any participating interest under which the
Participant has rights to approve any amendment, consent or waiver with respect
to any Loan Document, except (1) in the case of a participation that includes an
interest in the originating Lender's Commitment, to the extent such amendment,
consent or waiver would require unanimous consent of the Banks under Section
7(a) of the Co-Lender Agreement, or (2) in the case of a participation that is
limited to an interest in one or more Bid Loans, to the extent such amendment,
consent or waiver would take effect while such Bid Loan(s) remained outstanding
and would require the unanimous consent of the Banks under any of the following
clauses of Section 7(a) of the Co-Lender Agreement: clause (ii), to the extent
that the proposed action would affect Bid Loans or any amount payable with
respect to Bid Loans; clause (iii), to the extent that the proposed action would
affect any amount payable in connection with Bid Loans; clause (iv); clause (v);
and clause (vi); and (B) no Designated Bid Lender shall transfer or grant any
participating interest under which the Participant has rights to approve any
amendment, consent or waiver with respect to any Loan Document greater that the
lesser of (1) such rights of approval as may
67
have been granted to such Designated Bid Lender in connection with its entry
into the relevant Designation Agreement, or (2) as described in Section 11.5(a)
as being permitted to Designated Bid Lenders, (v) with respect to the sale of
participating interests in the Line of Credit (it being understood that the
limitations of this clause (v) shall not apply with respect to the sale of a
participating interest in all or any portion of a Bid Loan), each participating
interest in a Bank's Commitment shall be in a minimum amount of $5,000,000, and
no such participation shall be permitted if the non-participated interest of the
originating Lender in its Commitment would thereafter be less than $15,000,000.
A Participant shall not have any rights under the Loan Documents or the Co-
Lender Agreement, and all amounts payable by Borrower hereunder shall be
determined as if the originating Lender had not sold such participation.
11.4 Pledges.
-------
Notwithstanding any other provision of this Agreement, any other Loan
Document or the Co-Lender Agreement: (i) a Bank or Designated Bid Lender may
pledge its interest in Borrower's obligations under the Loan Documents in favor
of any Federal Reserve Bank in accordance with Federal law; and (ii) a
Designated Bid Lender may pledge its interest in Borrower's obligations under
the Loan Documents in respect of any Bid Loan in favor of any Liquidity Provider
qualifying as such with respect to the Bid Loan so pledged.
11.5 Designated Bid Lenders.
----------------------
(a) Any Bank may at any time, with the prior written consent of
Borrower and Agent, which consent shall not be unreasonably withheld, designate
one Designated Bid Lender to fund Bid Loans on behalf of such Designating Bank
subject to the terms of this Section 11.5, and the provisions of Sections 11.1,
11.2 and 11.3 shall not apply to such designation, except that no Designating
------ ----
Bank shall enter into any agreement under which its Designated Bid Lender has
rights to approve any amendment, consent or waiver with respect to any Loan
Document, except to the extent such amendment, consent or waiver would amend any
right of Designated Bid Lenders or would require the unanimous consent of the
Banks under any of the following clauses of Section 7(a) of the Co-Lender
Agreement: clause (ii), to the extent that the proposed action would affect Bid
Loans or any amount payable with respect to Bid Loans; clause (iii), to the
extent that the proposed action would affect any amount payable in connection
with Bid Loans; clause (iv); clause (v), if the proposed action would take
effect while any Bid Loans made by such Designated Bid Lender were outstanding;
and clause (vi). No Bank may designate more than one Designated Bid Lender at
any one time, and, following the termination of a designation with
68
respect to one Designated Bid Lender, no new Designated Bid Lender may be
designated until all outstanding Bid Loans made by the prior Designated Bid
Lender have been paid in full. The parties to each such designation shall
execute and deliver to Borrower and Agent for their acceptance a Designation
Agreement, and, upon Agent's receipt of (i) an appropriately completed
Designation Agreement (A) executed by a Designating Bank and a designee
representing that it is a Designated Bid Lender and (B) accepted by Borrower,
and (ii) a processing fee in the amount of $2,500, Agent shall accept such
Designation Agreement and register such Designated Bid Lender as a Designated
Bid Lender, and give prompt notice thereof to Borrower, whereupon: from and
after the effective date specified in the Designation Agreement, the Designated
Bid Lender shall become a party to this Agreement and to the Co-Lender
Agreement, as a Designated Bid Lender, with (X) a right to make Bid Loans on
behalf of its Designating Bank pursuant to Section 1.3(b)(ix) with respect to
any Competitive Bid of such Designating Bank that is accepted in whole or in
part by Borrower, and (Y) the other rights, and the obligations, provided herein
and therein, subject to the limitation, however, that, notwithstanding the
------- -- --- ----------
assumption by a Designated Bid Lender of certain of the obligations of its
Designating Bank (but without limiting the Designating Bank's obligations under
the following paragraph (b)), no Designated Bid Lender shall be required to make
payments with respect to any of its obligations under this Agreement or any
other Loan Document, or under the Co-Lender Agreement, except to the extent of
excess cash flow of such Designated Bid Lender (i.e., cash that is not otherwise
----
required to repay obligations of such Designated Bid Lender that are then due
and payable).
(b) Notwithstanding any other provision of this Agreement, any other
Loan Document or the Co-Lender Agreement: regardless of any designation of a
Designated Bid Lender hereunder, the Designating Bank making such designation
(i) shall be and remain obligated to Borrower, Agent and each of the other Banks
and other Designated Bid Lenders for each and every one of the obligations of
the Designating Bank and its Designated Bid Lender with respect to this
Agreement, any other Loan Document or the Co-Lender Agreement (including,
without limitation, any indemnification obligations under the Co-Lender
Agreement and other obligation to pay any amount otherwise payable to Borrower
by the Designated Bid Lender); and (ii) shall indemnify, defend and hold Agent,
Borrower, each Bank and each Designated Bid Lender harmless from and against any
and all losses, costs, expenses (including reasonable attorneys' fees and the
cost of any services of in-house counsel) and liabilities incurred by any such
Person in connection with or arising from (A) (1) the non-performance by such
Designating Bank's Designated Bid Lender of any obligation assumed by the
Designated Bid Lender under its Designation Agreement, (2) any other act or
omission of the
69
Designated Bid Lender committed in violation of the provisions of any Loan
Document or the Co-Lender Agreement, or (3) the failure of any representation or
warranty made by such Designating Bank's Designated Bid Lender for the benefit
of Agent, Borrower, any other Bank or any other Designated Bid Lender to be true
and correct in all material respects, or (B) such Designating Bank's
nonperformance of any obligation owed to its Designated Bid Lender under the
Designation Agreement or any other agreement between such Designating Bank and
its Designated Bid Lender with respect to the transactions contemplated hereby.
(c) Notwithstanding any designation hereunder, Borrower and Agent
shall continue to deal solely and directly with the Designating Bank in
connection with the Advances (including any Bid Loans made by such Designating
Bank's Designated Bid Lender), the Loan Documents and the Co-Lender Agreement.
Each Designating Bank shall serve as the administrative agent of its Designated
Bid Lender and shall on behalf of the Designated Bid Lender: (i) receive any and
all payments made for the benefit of the Designated Bid Lender (and Borrower's
and Agent's obligation to make any payment to the Designated Bid Lender shall be
satisfied upon payment of such amount to its Designating Bank for the benefit of
such Designated Bid Lender, without any duty to see to the application thereof
by such Designating Bank), and (ii) give and receive all communications and
notices and take all actions under any Loan Document or the Co-Lender Agreement,
including, without limitation, votes, approvals, waivers, consents and
amendments under or relating to this Agreement, the other Loan Documents and the
Co-Lender Agreement; and any notice or other communication so delivered to a
Designating Bank shall be deemed validly delivered to its Designated Bid Lender,
without any duty on the part of Borrower or Agent to verify whether such notice
or other communication is actually delivered by such Designating Bank to its
Designated Bid Lender. Agent shall have no responsibility for, and shall not
incur liability to any Designated Bid Lender arising out of, the disposition by
such Designated Bid Lender's Designating Bank of any funds or notice or other
communication delivered to such Designating Bank for the account of such
Designated Bid Lender in accordance herewith. Any notice, communication, vote,
approval, waiver, consent or amendment of or with respect to any Loan Document
or the Co-Lender Agreement that is delivered or executed on behalf of any
Designated Bid Lender shall be signed by its Designating Bank as administrative
agent for the Designated Bid Lender (whether or not noted as such thereon), and
shall not be signed by the Designated Bid Lender on its own behalf. Borrower,
Agent, the Banks and the other Designated Bid Lenders may rely thereon without
any requirement that the Designated Bid Lender sign or acknowledge the same. No
Designated Bid Lender may assign or transfer all or any portion of its interest
hereunder or under any other Loan Documents,
70
other than (X) an assignment to the Designating Bank which originally designated
such Designated Bid Lender, or (Y) in accordance with the provisions of Section
11.3 or 11.4.
(d) A Designated Bid Lender shall not have any right to the payment of
any amount under the Loan Documents or the Co-Lender Agreement other than with
----- ----
respect to (i) principal of and interest (including, to the extent, interest at
the Default Rate) on Bid Loans made by such Designated Bid Lender, (ii) late
charges with respect to Bid Loans made by such Designated Bid Lender that are
not paid when due, and (iii) compensatory amounts payable by Borrower in respect
of Bid Loans made by such Designated Bid Lender that are paid prior to the last
day of the Bid Rate Interest Period applicable thereto; and all other amounts
payable by Borrower hereunder, under any other Loan Document or under the Co-
Lender Agreement shall be determined as if such Designated Bid Lender's
Designating Bank had not made such designation.
12. MISCELLANEOUS
12.1 California Law.
--------------
This Agreement is governed by California law but without regard to the
choice of law rules of California.
12.2 Arbitration.
-----------
(a) Mandatory Arbitration. Except as provided below, any controversy
---------------------
or claim between or among the parties, including those arising out of or
relating to this Agreement or the other Loan Documents and any claim based on or
arising from an alleged tort, shall at the request of any party be determined by
arbitration. The arbitration shall be conducted in accordance with the United
States Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of law
provision in this Agreement, and under the Commercial Rules of the American
Arbitration Association ("AAA"). The arbitrator(s) shall give effect to statutes
of limitation in determining any claim. Any controversy concerning whether an
issue is arbitrable shall be determined by the arbitrator(s). Judgment upon the
arbitration award may be entered in any court having jurisdiction. The
institution and maintenance of an action for judicial relief or pursuit of a
provisional or ancillary remedy shall not constitute a waiver of the right of
any party, including the plaintiff, to submit the controversy or claim to
arbitration if any other party contests such action for judicial relief.
(b) Provisional Remedies, Self-Help and Foreclosure. No provision
-----------------------------------------------
of this Agreement shall limit the right of any party to this Agreement to
exercise self-help remedies such as setoff,
71
or obtaining provisional or ancillary remedies from a court of competent
jurisdiction before, after, or during the pendency of any arbitration or other
proceeding. The exercise of a remedy does not waive the right of either party to
resort to arbitration.
12.3 Presentment, Demands and Notice.
-------------------------------
Neither Agent nor any Bank or Designated Bid Lender shall be under any
duty or obligation to make or give any presentment, demands for performances,
notices of nonperformance, protests, notices of protest or notices of dishonor
in connection with any obligation or indebtedness under the Loan Documents.
12.4 Attorneys' Fees.
---------------
In the event of a lawsuit or arbitration proceeding, including any
tort proceeding, between or among the parties hereto, the prevailing party is
entitled to recover costs and reasonable attorneys' fees (including any
allocated costs of in-house counsel) incurred in connection with the lawsuit or
arbitration proceeding, as determined by the court or arbitrator.
12.5 Integration.
-----------
The Loan Documents, including this Agreement: (a) integrate all the
terms and conditions incidental to the Loan Documents; (b) supersede all oral
negotiations and prior and other writings with respect to their subject matter;
and (c) are intended by the parties as the final expression of their agreement
with respect to the terms and conditions set forth in those documents and as the
complete and exclusive statement of the terms agreed to by the parties. If there
is any conflict between the terms, conditions and provisions of this Agreement
and those of any other agreement or instrument, including any of the other Loan
Documents, the terms, conditions and provisions of this Agreement shall prevail.
The Co-Lender Agreement addresses matters among the Banks, the Designated Bid
Lenders and Agent and is intended by the Banks, the Designated Bid Lenders and
Agent to supplement and be compatible with and not abrogate the Loan Documents,
and Borrower's rights, obligations and liabilities shall not be diminished or
increased by the Co-Lender Agreement.
12.6 Electronic Notices.
------------------
Any agreement of Agent to receive certain notices from Borrower or the
Banks (in their own capacities or in their capacities as administrative agent
for any Designated Bid Lender) by telephone or facsimile is solely for their
convenience and at their request. Agent shall be entitled to rely on the
authority of any Person giving such notice and Agent shall not have any
72
liability to Borrower, any Bank, any Designated Bid Lender or other Persons on
account of any action taken or not taken by Agent in reliance upon such
telephonic or facsimile notice.
12.7 Notices.
-------
Notices and other communications that Borrower, Agent or any Lender is
required to deliver under any Loan Document, or that any such Person desires to
deliver to any other party to a Loan Document, shall be sent to the address for
such Person set forth on the signature pages hereto. As provided in Section
11.5, any notice or other communication to a Designated Bid Lender shall be sent
to its Designating Bank. Except as otherwise specified: (x) all notices or
other communications sent by mail, if duly given, shall be effective three (3)
Business Days after deposit into the mails, postage prepaid, (y) all notices or
other communications sent by a nationally recognized overnight courier service,
if duly given, shall be effective one (1) Business Day after delivery to such
courier service (with the relevant fees paid or duly provided for), and (z) all
other notices or other communications, if duly given or made, shall be effective
upon receipt. Any party may change its address for notices by notice delivered
to Agent or Borrower, as the case may be, in accordance with the provisions of
Section 12.7.
12.8 No Bankruptcy Proceedings Against Designated Bid Lenders.
--------------------------------------------------------
Each of Borrower, the Banks, and Agent hereby agrees that it will not
institute against any Designated Bid Lender, or join with any other Person in
instituting against any Designated Bid Lender, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding under any federal or state
bankruptcy or similar law, at any time prior to the date that is one year and
one day after payment in full of the latest maturing commercial paper note
issued by such Designated Bid Lender.
12.9 Certain Acknowledgments by Borrower.
-----------------------------------
Borrower acknowledges that (i) it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Loan
Documents; and (ii) the relationship between Borrower, on the one hand, and
Agent and the Banks and Designated Bid Lenders, on the other hand, in connection
with the Loan Documents and the transactions contemplated thereby is solely that
of debtor and creditor; no joint venture is created hereby or by the other Loan
Documents or otherwise exists (among Borrower, the Banks and the Designated Bid
Lenders or between Borrower and Agent) by virtue of the transactions
contemplated hereby.
73
12.10 Successors and Assigns.
----------------------
This Agreement is binding on each of the parties' successors and
assignees. Borrower agrees that it may not assign this Agreement or the other
Loan Documents without Agent's prior consent. Agent, the Banks and the
Designated Bid Lenders may sell participations in or assign their rights under
the Loan Documents in accordance with Section 11, and may provide financial
information about Borrower and the Guarantors to actual or potential
participants or assignees, without notice to or consent of Borrower.
12.11 No Third Parties Benefited.
--------------------------
This Agreement is made and entered into for the sole protection and
benefit of Borrower, Agent, the Banks and the Designated Bid Lenders and their
respective successors and assigns. No trust fund is created by this Agreement
and no other persons or entities (other than Indemnified Persons) shall have any
right of action under this Agreement or any right to the proceeds of advances
made pursuant to the Loan Documents.
12.12 Integration; Relation to Any Loan Commitment; Headings.
------------------------------------------------------
(a) The Loan Documents (i) integrate all the terms and conditions in
or incidental to this Agreement, (ii) supersede all oral negotiations and prior
writings with respect to their subject matter, including any loan commitment to
Borrower, and (iii) are intended by the parties as the final expression of the
agreement with respect to the terms and conditions set forth in those documents
and as the complete and exclusive statement of the terms agreed to by the
parties. No representation, understanding, promise or condition shall be
enforceable against any party unless it is contained in the Loan Documents.
(b) If there is any conflict between the terms, conditions and
provisions of this Agreement and those of any other agreement or instrument,
including any other Loan Document, the terms, conditions and provisions of this
Agreement shall prevail.
(c) Headings and captions are for reference only and shall not
affect the interpretation or meaning of any provisions of this Agreement.
(d) The schedule(s) and exhibit(s) to this Agreement are hereby
incorporated in this Agreement.
12.13 Interpretation.
--------------
74
(a) Time is of the essence in the performance of this Agreement by
Borrower.
(b) The word "include(s)" means "include(s), without limitation,"
and the word "including" means "including but not limited to." No listing of
specific instances, items or matters in any way limits the scope or generality
of any language of this Agreement.
(c) Any accounting terms used in this Agreement which are not
specifically defined shall have the meanings customarily given them in
accordance with GAAP. All references herein to Borrower or any other Person, in
connection with any financial or related covenant, representation or
calculation, shall be understood to mean and refer to Borrower and such other
Person on a consolidated basis in accordance with GAAP, unless otherwise
specifically provided and subject in all events to any adjustments herein set
forth.
(d) Any time the phrase "to the best of Borrower's knowledge" or a
phrase similar thereto is used herein, it means: "to the actual knowledge of the
then officers of Borrower, after reasonable inquiry of those agents, employees
or contractors of Borrower who could reasonably be anticipated to have knowledge
with respect to the subject matter or circumstances in question and after review
of those documents or instruments which could reasonably be anticipated to be
relevant to the subject matter or circumstances in question."
(e) In each case where the consent or approval of Agent or the Banks
is required, or Agent's or the Banks' non-obligatory action is requested by
Borrower, such consent, approval or action shall be in the sole and absolute
discretion of Agent or the Banks, as the case may be (subject, in the case of
Agent, to receipt of such authorizations of the Banks as may be required under
the Co-Lender Agreement), unless otherwise specifically indicated.
(f) Any time the word "or" is used herein, unless the context
otherwise clearly requires, it has the inclusive meaning represented by the
phrase "and/or". The words "hereof", "herein", "hereby", "hereunder" and similar
terms refer to this Agreement as a whole and not to any particular provision of
this Agreement. Article, section, subsection, clause, exhibit and schedule
references are to this Agreement unless otherwise specified. Any reference in
this Agreement to this Agreement or to any other Loan Document includes any and
all amendments, modifications, supplements, renewals or restatements thereto or
thereof, as applicable.
75
12.14 Severability; Waivers; Amendments.
---------------------------------
This Agreement may not be modified or amended except by a written
agreement signed by the parties. Any consent or waiver under this Agreement must
be in writing. If any part of this Agreement is not enforceable, the rest of the
Agreement may be enforced. If Agent (with such consent of any or all of the
Banks as may be required under the Co-Lender Agreement) waives a default, Agent
and the Banks may nevertheless enforce a later default. No waiver shall be
construed as a continuing waiver. No waiver shall be implied from Agent's, or
any Bank's or Designated Bid Lender's, delay in exercising or failure to
exercise any right or remedy against Borrower. Consent by Agent or the Banks to
any act or omission by Borrower shall not be construed as a consent to any other
or subsequent act or omission or as a waiver of the requirement for Agent's or
the Banks' consent to be obtained in any future or other instance. Agent, the
Banks and the Designated Bid Lenders retain all of their respective rights and
remedies, even if one or more Advances is made after the occurrence of any
default.
12.15 Publicity; Confidentiality.
--------------------------
(a) Publicity. Each Bank and Designated Bid Lender may refer to
---------
the credit facilities provided pursuant to the Loan Documents in its own
promotional and advertising materials. Borrower shall not identify a Bank or
Designated Bid Lender as a lender, except with such Bank's or Designated Bid
Lender's prior written consent, provided through Agent in each instance.
(b) Confidentiality. Agent, and each of the Banks and Designated
---------------
Bid Lenders, understands that some of the information and documents furnished to
it pursuant to this Agreement or the other Loan Documents may be confidential,
and agrees that it will keep all non-public information, documents and
agreements so furnished to it confidential and will make no disclosure to other
Persons of such information or agreements until it shall have become public,
except (i) to the extent required in connection with matters involving
operations under or enforcement or amendment of the Loan Documents; (ii) in
accordance with Agent's or such Bank's or Designated Bid Lender's obligations
under law or regulations or pursuant to subpoenas or other legal process to make
information available to governmental agencies and examiners or to others; (iii)
to any corporate parent or (if such Affiliate is a financial institution) other
Affiliate of Agent or such Bank or Designated Bid Lender, solely for purposes of
the administration or enforcement of the Loan, so long as such parent or other
Affiliate agrees to accept such information or agreement subject to the
restrictions provided in this Section 12.15(b); (iv) to any participant of the
Agent or such Lender that agrees
76
to keep such information, documents or agreement confidential in accordance with
the restrictions provided in this Section 12.15(b); (v) to Agent or to any other
Bank or Designated Bid Lender and Agent's and such other Bank's or Designated
Bid Lender's respective counsel and other professional advisors so long as such
Persons are instructed to keep such information confidential in accordance with
the provisions of this Section 12.15(b); (vi) to proposed assignees,
participants and Designated Bid Lenders that agree to keep such information,
documents or agreements confidential in accordance with the provisions of this
Section 12.15(b); or (g) with the prior written consent of Borrower (which shall
not be unreasonably withheld).
12.16 Continuing Effect of Certain Prior Modifications to Loan Documents;
-------------------------------------------------------------------
Cross-References, Etc.
---------------------
(a) The amendment and restatement of the Existing Agreement
provided for hereby shall not affect the following, previously effected
amendments to the Note and Guaranty:
(i) (A) "Bank", as used in the Note, means Agent acting as
agent for the Banks, except that each reference to "Bank" in Sections 6, 7 and
18 of the Note and in Paragraph 5 of Exhibit B to the Note is modified to mean
"Banks and Designated Bid Lenders", or "each Bank or Designated Bid Lender", as
the context requires;
(B) "Banking Day", as used in the Note, means, with
respect to any LIBOR Bid Loan, the same as "Banking Day" with respect to the
LIBOR Alternative;
(C) "Rate Period", as used in the Note, means, in any
context relating to a Bid Loan, the applicable Bid Loan Rate Period; and
the Note shall continue to evidence all Advances, and, except to the extent
inconsistent with the express provisions of this Agreement, the terms of the
Note (including, without limitation, the provisions relating to the Default
Rate) shall apply to Bid Loans in addition to Committed Loans.
(ii) "Bank", as used in any Guaranty, whenever executed and
delivered, means (or shall mean, as the case may be) Agent acting as agent
for the Banks, except that (i) in Section 3 of each Guaranty, each
reference to "Bank" means (or shall mean) "Agent or the Banks", (ii) in
Sections 4, 5, 8, 9 and 14(c) of each Guaranty, each reference to "Bank"
means (or shall mean) "Agent or any Bank", and (iii) in Section 19, each
reference to "Bank", except for the second incidence of "Bank" in the first
sentence, means (or
77
shall mean) "Agent and each Bank". Each Guarantor reconfirming its
Guaranty as required herein, and each Guarantor executing and delivering a
Guaranty after the date hereof, by its execution and delivery of such
reconfirmation or Guaranty, as the case may be, agrees to the foregoing
modifications to such Guaranty, and a statement to that effect shall be
added to the form of Guaranty for use after the date hereof.
(b) Each reference, in the Note or any exhibit thereto, the Co-
Lender Agreement, any Guaranty or any Loan Document heretofore executed and
delivered, to a specified provision of the Existing Agreement or any component
agreement thereof (such as the Modification Agreement to Syndicate Loan or the
Second Modification Agreement referred to in the recitals hereto) shall, on and
after the Effective Date, constitute a reference to the corresponding
provision(s) of this Agreement.
(c) Each of the Loan Documents is hereby modified to provide that
all references therein to the "Loan Agreement", or to any other "Loan Document",
shall be deemed to refer to the Loan Agreement or any such Loan Documents as at
any time previously amended and as amended (or further amended) hereby. It is
the intent of the parties that this Agreement shall constitute a part of, and
construed to amend, each other Loan Document stated to be amended hereby.
(d) Except as expressly provided herein, nothing in this Agreement
shall alter or affect any provision, condition or covenant contained in any
other Loan Document, or limit or impair any rights, powers or remedies of Agent
or any Bank or Designated Bid Lender thereunder, it being the intent of the
parties hereto that the provisions of the Loan Documents shall continue in full
force and effect except as expressly modified hereby. By its signature hereto,
Agent, and each Bank (on its own behalf and on behalf of its Designated Bid
Lender, if any), agrees that (i) each reference to a "Committed Loan" in the Co-
Lender Agreement (the "Co-Lender Agreement") dated as of January 20, 1998, among
Agent, the Banks and the Designated Bid Lenders relating to the Loan shall have
the meaning provided for in this Agreement, and (ii) to the extent of any
inconsistency between the provisions of this Agreement and any provision of the
Co-Lender Agreement, the provisions of this Agreement shall control. Each Bank
executing this Agreement on behalf of a Designated Bid Lender represents and
warrants that it is authorized to do so.
12.17 Counterparts.
------------
This Agreement may be executed in counterparts each of which, when
executed, shall be deemed an original, and all such counterparts shall
constitute one and the same agreement.
78
This Agreement is executed as of the date stated at the top of the first page.
BRE PROPERTIES, INC., a Maryland
corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President &
Chief Financial Officer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President & Chief Executive
Officer
Address for Notices: BRE Properties, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a Bank
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇
----------------------------
▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇
Title: Vice President
79
RECONFIRMATION OF GUARANTY
--------------------------
The undersigned hereby (i) acknowledges and approves the foregoing Amended and
Restated Unsecured Line of Credit Loan Agreement ("Loan Agreement"); (ii) agrees
to the modifications to the undersigned's Guaranty set forth in the Loan
Agreement (including, without limitation, the authorization set forth in Section
3.5 with respect to amounts paid or collected under such Guaranty); and (iii)
restates and reconfirms each and every representation, warranty and covenant as
set forth in its Guaranty, dated as of November 17, 1997, executed in favor of
BofA, and acknowledges and agrees that each such representation, warranty and
covenant shall inure to the benefit of each of Agent, Banks and Designated Bid
Lenders, notwithstanding the modifications to the terms and conditions of the
Loan effected thereby.
GUARANTOR: BRE PROPERTY INVESTORS, LLC, a
Delaware limited liability company,
By: BRE PROPERTIES, INC., a
Maryland corporation
Its: Managing Member
By:___________________________
Its:__________________________
1
EXHIBIT A
---------
BORROWING NOTICE
----------------
___________________, 199__
Bank of America National Trust
and Savings Association
Commercial Real Estate
Services Group 9105
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Re: Amended and Restated Unsecured Line of Credit Loan Agreement dated as of
October __, 1998, as amended, among BRE Properties, Inc. (the "Borrower");
Bank of America National Trust and Savings Association, in its capacity as
Agent ("Agent"); and the several financial institutions from time to time
party thereto in their respective capacities as "Banks" or "Designated Bid
Lenders," as the case may be
Dear _______________:
Reference is made to the Agreement. Capitalized terms used in this
Borrowing Notice without definition have the meanings specified in the
Agreement.
Pursuant to the Agreement, notice is hereby given that Borrower desires
that the Banks make the advance described in attached Schedule 1 (the "Advance")
----------
(and, if this Borrowing Notice relates to a Swing Line Borrowing, that Agent
initially fund the requested Advance as a Swing Line Borrowing). Borrower and
the undersigned Officer of Borrower hereby certify that:
(1) Committed Loan Availability. (a) The outstanding amount of the
---------------------------
Line of Credit, together with any other amounts required by the Loan Documents
to be charged against the availability of advances under the Line of Credit,
shall not, after giving effect to the making of the Advance, exceed the
Committed Loan Availability; and (b) if this Borrowing Notice relates to a Swing
Line Borrowing: (i) the outstanding principal amount of all Swing Line
Borrowings, after giving effect to the making of the requested Swing Line
Borrowing, will not exceed $50,000,000, and (ii) the requested funding date
falls within the Swing Line Availability Period.
(2) Representations and Warranties. All representations and
------------------------------
warranties of Borrower or any Material Borrower Entity or other Guarantor
contained in the Agreement and
1
the other Loan Documents are true and correct as of the date hereof and shall be
true and correct on the date of the Advance, both before and after giving effect
to the Advance; provided, however, that the representations and warranties of
Borrower set forth in the Agreement regarding financial statements shall be
deemed to be made with respect to the financial statements most recently
delivered to the Bank pursuant to the Agreement;
(3) No Event of Default. No Event of Default exists as of the date
-------------------
hereof or will result from the making of the Advance or would result after
notice or passage of time or both;
(4) Use of Proceeds. The proceeds of the Advance will be used only
---------------
as permitted by the Agreement; and
(5) No Material Adverse Effect. No event, circumstance or
--------------------------
condition, which could have a Material Adverse Effect on Borrower or any
Material Borrower Entity, has occurred since the date of the Agreement.
Enclosed are the documents and information, if any, requested by the
Bank with respect to use of proceeds as a condition to this Advance.
BRE PROPERTIES, INC., a
Maryland corporation
By: __________________________
Its: _________________________
2
Schedule 1
----------
to Borrowing Notice
REQUESTED ADVANCE
-----------------
1. Amount and Nature of Requested Advance: $
-------------------------------------- --------------
(must be $500,000 or more)
This Borrowing Notice does ___/does not ___ include a request for a Swing
Line Borrowing.
2. Purpose of Advance/1/:
---------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
provided that if a Swing Line Borrowing has been requested and the
--------
requested Swing Line Borrowing is funded: (i) the Swing Line Borrowing will
be used for the purpose described above, and (ii) the corresponding Advance
by the Banks will be used to repay the Swing Line Borrowing in its
entirety.
3. Effective Date of Requested Advance/1/:
--------------------------------------
--------------------------------------------------------------------------
If a requested Swing Line Borrowing is funded as such, the related Advance
--------------------------------------------------------------------------
by the Banks shall be funded on the day that is two (2) Banking Days after
--------------------------------------------------------------------------
the Swing Line Borrowing is funded.
--------------------------------------------------------------------------
----------------------
/1/ If the Advance is requested to be made initially as a Swing Line Borrowing,
the Effective Date of the Swing Line Borrowing may be the date of the Borrowing
Notice, if delivered no later than 11:00 a.m, California time, and otherwise
shall be the Business Day after the day on which the Borrowing Notice is
delivered.
SCHEDULE 1
----------
MATERIAL BORROWER ENTITIES, OTHER GUARANTORS
AND
OTHER UNENCUMBERED PROPERTY OWNERS