EXHIBIT 10.1
EXECUTION VERSION
================================================================================
$350,000,000
THIRD AMENDED AND RESTATED
UNSECURED LINE OF CREDIT LOAN AGREEMENT
Dated as of April 4, 2003
among
BRE PROPERTIES, INC.
as the Borrower,
BANC OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and Sole Book Manager,
BANK OF AMERICA, N.A.,
as Administrative Agent, Swing Line Lender and L/C Issuer,
BANK ONE, NA,
as Co-Syndication Agent,
COMMERZBANK AG,
as Co-Syndication Agent,
WACHOVIA BANK, N.A.,
as Documentation Agent,
and
The Other Lenders Party Hereto
================================================================================
TABLE OF CONTENTS
Section Page
------- ----
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS...........................................................1
1.01 Defined Terms..............................................................................1
1.02 Other Interpretive Provisions.............................................................19
1.03 Accounting Terms..........................................................................20
1.04 Rounding..................................................................................20
1.05 References to Agreements and Laws.........................................................20
1.06 Times of Day..............................................................................20
1.07 Letter of.................................................................................20
1.08 Credit Amounts............................................................................20
ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS.....................................................20
2.01 Committed Loans...........................................................................20
2.02 Borrowings, Conversions and Continuations of Committed Loans..............................21
2.03 Bid Loans.................................................................................22
2.04 Letters of Credit.........................................................................24
2.05 Swing Line Loans..........................................................................31
2.06 Prepayments...............................................................................33
2.07 Termination or Reduction of Commitments...................................................34
2.08 Repayment of Loans........................................................................34
2.09 Interest..................................................................................34
2.10 Fees......................................................................................35
2.11 Computation of Interest and Fees..........................................................35
2.12 Evidence of Debt..........................................................................36
2.13 Payments Generally........................................................................36
2.14 Sharing of Payments.......................................................................37
2.15 Extension of Maturity Date................................................................38
2.16 Increase in Commitments...................................................................39
ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY....................................................39
3.01 Taxes.....................................................................................39
3.02 Illegality................................................................................40
3.03 Inability to Determine Rates..............................................................41
3.04 Increased Cost and Reduced Return; Capital Adequacy; Reserves on
Eurodollar Rate Loans.....................................................................41
3.05 Funding Losses............................................................................42
3.06 Matters Applicable to all Requests for Compensation.......................................42
3.07 Survival..................................................................................43
ARTICLE IV. CONDITIONS PRECEDENT TO THE AMENDMENT AND RESTATEMENT OF THE EXISTING AGREEMENT AND
FURTHER CREDIT EXTENSIONS..........................................................................43
4.01 Conditions of Effectiveness of this Agreement.............................................43
4.02 Conditions to all Credit Extensions.......................................................44
ARTICLE V. REPRESENTATIONS AND WARRANTIES............................................................45
5.01 Existence, Qualification and Power; Compliance with Laws; Status as a REIT................45
5.02 Authorization; No Contravention...........................................................45
i
5.03 Governmental Authorization; Other Consents................................................45
5.04 Binding Effect............................................................................45
5.05 Financial Statements; No Material Adverse Effect..........................................46
5.06 Litigation................................................................................46
5.07 No Default................................................................................46
5.08 Ownership of Property; Liens..............................................................46
5.09 Environmental Compliance..................................................................47
5.10 Insurance.................................................................................47
5.11 Taxes.....................................................................................47
5.12 ERISA Compliance..........................................................................47
5.13 Subsidiaries..............................................................................48
5.14 Margin Regulations; Investment Company Act; Public Utility Holding Company Act............48
5.15 Disclosure................................................................................48
5.16 Compliance with Laws......................................................................48
5.17 Tax Shelter Regulations...................................................................48
5.18 Intellectual Property; Licenses, Etc......................................................49
ARTICLE VI. AFFIRMATIVE COVENANTS.....................................................................49
6.01 Financial Statements......................................................................49
6.02 Certificates; Other Information...........................................................50
6.03 Notices...................................................................................51
6.04 Payment of Obligations....................................................................51
6.05 Preservation of Existence, Etc............................................................52
6.06 Maintenance of Properties.................................................................52
6.07 Maintenance of Insurance..................................................................52
6.08 Compliance with Laws......................................................................52
6.09 Books and Records.........................................................................52
6.10 Inspection Rights.........................................................................52
6.11 Use of Proceeds...........................................................................53
6.12 Additional Guarantors.....................................................................53
ARTICLE VII. NEGATIVE COVENANTS........................................................................54
7.01 Liens.....................................................................................54
7.02 Investments...............................................................................54
7.03 Indebtedness..............................................................................54
7.04 Fundamental Changes.......................................................................54
7.05 Dispositions..............................................................................55
7.06 Restricted Payments.......................................................................55
7.07 Change in Nature of Business..............................................................55
7.08 Transactions with Affiliates..............................................................56
7.09 Burdensome Agreements.....................................................................56
7.10 Use of Proceeds...........................................................................56
7.11 Financial Covenants.......................................................................56
7.12 Development...............................................................................57
7.13 Fundamental Changes and REIT Covenants....................................................57
ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES............................................................58
8.01 Events of Default.........................................................................58
8.02 Remedies Upon Event of Default............................................................59
8.03 Application of Funds......................................................................60
ii
ARTICLE IX. ADMINISTRATIVE AGENT......................................................................61
9.01 Appointment and Authorization of Administrative Agent.....................................61
9.02 Delegation of Duties......................................................................61
9.03 Liability of Administrative Agent.........................................................61
9.04 Reliance by Administrative Agent..........................................................61
9.05 Notice of Default.........................................................................62
9.06 Credit Decision; Disclosure of Information by Administrative Agent........................62
9.07 Indemnification of Administrative Agent...................................................63
9.08 Administrative Agent in its Individual Capacity...........................................63
9.09 Successor Administrative Agent............................................................63
9.10 Administrative Agent May File Proofs of Claim.............................................64
9.11 Other Agents; Arrangers and Managers......................................................65
9.12 Guaranty Matters..........................................................................65
ARTICLE X. MISCELLANEOUS.............................................................................65
10.01 Amendments, Etc...........................................................................65
10.02 Notices and Other Communications; Facsimile Copies........................................66
10.03 No Waiver; Cumulative Remedies............................................................67
10.04 Attorney Costs, Expenses and Taxes........................................................67
10.05 Indemnification by the Borrower...........................................................68
10.06 Payments Set Aside........................................................................68
10.07 Successors and Assigns....................................................................69
10.08 Confidentiality...........................................................................72
10.09 Set-off...................................................................................73
10.10 Interest Rate Limitation..................................................................73
10.11 Counterparts..............................................................................73
10.12 Integration...............................................................................73
10.13 Survival of Representations and Warranties................................................73
10.14 Severability..............................................................................74
10.15 Tax Forms.................................................................................74
10.16 Governing Law.............................................................................75
10.17 Waiver of Right to Trial by Jury..........................................................76
10.18 Time of the Essence.......................................................................76
10.19 ENTIRE Agreement..........................................................................76
SIGNATURES..........................................................................S-1
iii
SCHEDULES
2.01 Commitments and Pro Rata Shares
5.05 Supplement to Financial Statements
5.06 Litigation
5.08 Liens
5.09 Environmental Matters
5.13 Subsidiaries and Other Investments
10.02 Administrative Agent's Office, Certain Addresses for Notices
EXHIBITS
Form of
A Committed Loan Notice
B-1 Bid Request
B-2 Competitive Bid
C Swing Line Loan Notice
D Note
E Compliance Certificate
F Assignment and Assumption
G Guaranty
H Opinion Matters
I Form of Letter of Credit Application
iv
THIRD AMENDED AND RESTATED
UNSECURED LINE OF CREDIT LOAN AGREEMENT
This THIRD AMENDED AND RESTATED UNSECURED LINE OF CREDIT LOAN AGREEMENT
(this "Agreement") is entered into as of April 4, 2003, among BRE PROPERTIES,
INC., a Maryland corporation (the "Borrower"), BANC OF AMERICA SECURITIES LLC,
as sole lead arranger and sole book manager, BANK ONE, NA, as co-syndication
agent, COMMERZBANK AG, as co-syndication agent, WACHOVIA BANK, N.A., as
documentation agent, the several financial institutions from time to time party
hereto (collectively, the "Lenders" and individually, a "Lender"), and BANK OF
AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.
A. Borrower, Administrative Agent, BofA as a "Bank" and the several
financial institutions identified on the signature pages thereto as "Banks" and
"Designated Bid Lenders" (each as defined therein) are parties to a Second
Amended and Restated Unsecured Line of Credit Loan Agreement, dated as of
December 19, 2000, as amended by a First Amendment to Second Amended and
Restated Unsecured Line of Credit Loan Agreement, dated as of June 7, 2001 (as
amended, the "Existing Agreement").
B. The parties desire 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:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Absolute Rate" means a fixed rate of interest expressed in multiples of
1/100th of 1%.
"Absolute Rate Loan" means a Bid Loan that bears interest at a rate
determined with reference to an Absolute Rate.
"Administrative Agent" means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
"Administrative Agent's Office" means the Administrative Agent's address
and, as appropriate, account as set forth on Schedule 10.02, or such other
address or account as the Administrative Agent may from time to time notify the
Borrower and the Lenders.
"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.
"Adjusted NOI" means, for any fiscal quarter with respect to any Real
Property, the gross rental income of such Real Property for such fiscal quarter
(determined in accordance with GAAP), adjusted by deducting (a) the aggregate
amount of all reasonable and customary property expenses, including operating
costs, maintenance and repair costs, leasing and administrative costs,
management fees, real estate taxes and insurance premiums attributable to such
Real Property for such fiscal quarter; and (b) in respect of capital
expenditures for such fiscal quarter, $62.50 per apartment unit including,
without double counting, any amounts for capital reserves included in operating
expense when calculating net
income. Adjusted NOI will be adjusted for any non-recurring items and the
acquisitions and dispositions of Real Property during any fiscal quarter.
"Affiliate" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with the Person specified. 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-Related Persons" means the Administrative Agent, together with
its Affiliates (including, in the case of Bank of America in its capacity as the
Administrative Agent, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.
"Aggregate Commitments" means the Commitments of all the Lenders.
"Agreement" means this Third Amended and Restated Unsecured Line of
Credit Loan Agreement.
"Amendment Closing Date" means the first date all the conditions
precedent in Section 4.01 are satisfied or waived in accordance with Section
4.01 (or, in the case of Section 4.01(b), waived by the Person entitled to
receive the applicable payment).
"Applicable Capitalization Rate" means, for any Real Property, 8.65%, or
such rate(s) as the Required Lenders, taking into consideration such factors as
the location or type of such Real Property, may establish on a prospective basis
from time to time (but no more often than once in any calendar year) as the
applicable capitalization rate for such Real Property.
"Applicable Rate" means, from time to time, the following percentages
per annum, based upon the Debt Rating as set forth below:
APPLICABLE RATE
EURODOLLAR
RATE + (bps)
PRICING DEBT RATINGS LETTERS OF BASE RATE +
LEVEL S&P/▇▇▇▇▇'▇ FACILITY FEE (bps) CREDIT (bps) (bps)
---------------------------------------------------------------------------
1 A-/A3 or better 15 50 0
2 BBB+/Baa1 15 60 0
3 BBB/Baa2 20 70 0
4 BBB-/Baa3 25 90 0
5 Worse than 30 120 25
BBB-/Baa3
"Debt Rating" means, as of any date of determination, the rating
as determined by either S&P or ▇▇▇▇▇'▇ (collectively, the "Debt
Ratings") of the Borrower's non-credit-enhanced, senior unsecured
long-term debt; provided that if a Debt Rating is issued by each of the
foregoing rating agencies, then the lower of such Debt Ratings shall
apply (with the Debt Rating for Pricing Level 1 being the highest and
the Debt Rating for Pricing ▇▇▇▇▇ ▇ being the lowest).
2
Initially, the Applicable Rate shall be determined based upon the Debt Rating
specified in the certificate delivered pursuant to Section 4.01(a)(vii).
Thereafter, each change in the Applicable Rate resulting from a publicly
announced change in the Debt Rating shall be effective, in the case of an
upgrade, during the period commencing on the date of delivery by the Borrower to
the Administrative Agent of notice thereof pursuant to Section 6.03(e) and
ending on the date immediately preceding the effective date of the next such
change and, in the case of a downgrade, during the period commencing on the date
of the public announcement thereof and ending on the date immediately preceding
the effective date of the next such change.
"Arranger" means Banc of America Securities LLC, in its capacity as sole
lead arranger and sole book manager.
"Assignment and Assumption" means an Assignment and Assumption
substantially in the form of Exhibit E.
"Attorney Costs" means and includes all fees, expenses and disbursements
of any law firm or other external counsel and, without duplication, the
allocated cost of internal legal services and all expenses and disbursements of
internal counsel.
"Attributable Indebtedness" means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.
"Audited Financial Statements" means the audited consolidated balance
sheet of the Borrower and the Subsidiaries for the fiscal year ended December
31, 2002, and the related consolidated statements of income or operations,
shareholders' equity and cash flows for such fiscal year of the Borrower and the
Subsidiaries, including the notes thereto.
"Availability Period" means the period from and including the Amendment
Closing Date to the earliest of (a) the Maturity Date, (b) the date of
termination of the Aggregate Commitments pursuant to Section 2.07, and (c) the
date of termination of the commitment of each Lender to make Loans and of the
obligation of the of the L/C Issuer to make L/C Credit Extensions pursuant to
Section 8.02.
"Bank of America" means Bank of America, N.A. and its successors.
"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." The "prime rate" is a rate set by Bank of America
based upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"Base Rate Committed Loan" means a Committed Loan that is a Base Rate
Loan.
"Base Rate Loan" means a Loan that bears interest based on the Base
Rate.
3
"Bid Borrowing" means a borrowing consisting of simultaneous Bid Loans
of the same Type from each of the Lenders whose offer to make one or more Bid
Loans as part of such borrowing has been accepted under the auction bidding
procedures described in Section 2.03.
"Bid Loan" has the meaning specified in Section 2.03(a).
"Bid Loan Lender" means, in respect of any Bid Loan, the Lender making
such Bid Loan to the Borrower.
"Bid Loan Sublimit" means an amount equal to 50% of the Aggregate
Commitments. The Bid Loan Sublimit is part of, and not in addition to, the
Aggregate Commitments.
"Bid Request" means a written request for one or more Bid Loans
substantially in the form of Exhibit B-1.
"Borrower" has the meaning specified in the introductory paragraph
hereto.
"Borrower Entity" means a Person (a) in which the Borrower, directly or
indirectly, has made an Investment, but which is not a Subsidiary, and (b) in
which Person the Borrower, directly or indirectly, has a capital investment of
no less than 10% of the aggregate capital investment of such Person.
"Borrowing" means a Committed Borrowing, a Bid Borrowing or a Swing Line
Borrowing, as the context may require.
"BRE Property Investors" means BRE Property Investors LLC.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks are authorized to close under the Laws of, or are in
fact closed in, the State of California and the state where the Administrative
Agent's Office is located and, if such day relates to any Eurodollar Rate Loan,
means any such day on which dealings in Dollar deposits are conducted by and
between banks in the London interbank eurodollar market.
"Cash Collateralize" has the meaning specified in Section 2.04(g).
"Change of Control" means, with respect to any Person, an event or
series of events by which:
(a) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding
any employee benefit plan of such person or its subsidiaries, and any
person or entity acting in its capacity as trustee, agent or other
fiduciary or administrator of any such plan) becomes the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, except that a person or group shall be deemed to
have "beneficial ownership" of all securities that such person or group
has the right to acquire (such right, an "option right"), whether such
right is exercisable immediately or only after the passage of time),
directly or indirectly, of 33?% or more of the equity securities of such
Person entitled to vote for members of the board of directors or
equivalent governing body of such Person on a fully-diluted basis (and
taking into account all such securities that such person or group has
the right to acquire pursuant to any option right); or
(b) during any period of twelve consecutive months, a majority
of the members of the board of directors or other equivalent governing
body of such Person cease to be composed of individuals (i) who were
members of that board or equivalent governing body on the first day of
4
such period, (ii) whose election or nomination to that board or
equivalent governing body was approved by individuals referred to in
clause (i) above constituting at the time of such election or nomination
at least a majority of that board or equivalent governing body or (iii)
whose election or nomination to that board or other equivalent governing
body was approved by individuals referred to in clauses (i) and (ii)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in the
case of both clause (ii) and clause (iii), any individual whose initial
nomination for, or assumption of office as, a member of that board or
equivalent governing body occurs as a result of an actual or threatened
solicitation of proxies or consents for the election or removal of one
or more directors by any person or group other than a solicitation for
the election of one or more directors by or on behalf of the board of
directors).
"Code" means the Internal Revenue Code of 1986.
"Commitment" means, as to each Lender, its obligation to (a) make
Committed Loans to the Borrower pursuant to Section 2.01, (b) purchase
participations in L/C Obligations, and (c) purchase participations in Swing Line
Loans, in an aggregate principal amount at any one time outstanding not to
exceed the amount set forth opposite such Lender's name on Schedule 2.01 or in
the Assignment and Assumption pursuant to which such Lender becomes a party
hereto, as applicable, as such amount may be adjusted from time to time in
accordance with this Agreement.
"Committed Borrowing" means a borrowing consisting of simultaneous
Committed Loans of the same Type and, in the case of Eurodollar Rate Committed
Loans, having the same Interest Period made by each of the Lenders pursuant to
Section 2.01.
"Committed Loan" has the meaning specified in Section 2.01.
"Committed Loan Notice" means a notice of (a) a Committed Borrowing, (b)
a conversion of Committed Loans from one Type to the other, or (c) a
continuation of Eurodollar Rate Committed Loans, pursuant to Section 2.02(a),
which, if in writing, shall be substantially in the form of Exhibit A.
"Competitive Bid" means a written offer by a Lender to make one or more
Bid Loans, substantially in the form of Exhibit B-2, duly completed and signed
by a Lender.
"Completed" means, with respect to any item of Real Property, that the
construction of all apartment units (or discreet phase(s) thereof, if
applicable) has been completed, certificates of occupancy shall have been issued
with respect to such apartment units, and such apartment units shall be
available for immediate lease and occupancy in the normal course of business.
"Completed and Stabilized Real Property" means each item of Real
Property for which either of the following is true: (a) such Real Property has
been Completed for a minimum of twelve months, or (b) such Real Property has
been Completed and at least 90% of the apartment units within such Real Property
are occupied by tenants, under written leases, who have commenced paying rent.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit E.
"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.
"Consolidated Adjusted EBITDA" means, for any fiscal quarter and without
double counting any item, Consolidated Net Income for such fiscal quarter plus
(a) the following to the extent deducted in
5
calculating such Consolidated Net Income: (i) interest expense (as it appears on
the Borrower's consolidated income statement in accordance with GAAP) for such
fiscal quarter, (ii) the provision for federal, state, local and foreign income
taxes payable by the Borrower and the Subsidiaries for such fiscal quarter,
(iii) the amount of depreciation and amortization expense deducted in
determining such Consolidated Net Income, and (iv) losses from extraordinary
items or assets sales which were deducted in determining such Consolidated Net
Income; and minus (b) the sum of (i) all non-cash items increasing Consolidated
Net Income for such fiscal quarter, (ii) a capital reserve equal to $62.50 per
apartment unit in the case of any Real Property asset owned by the Borrower or
the Subsidiaries (without duplication to the extent that capital expenditures
have already been included in operating expenses in calculating Consolidated Net
Income), (iii) gains from extraordinary items or assets sales which are included
in determining Consolidated Net Income, and (iv) the portion of such
Consolidated Net Income attributable to the minority interests in any Subsidiary
during such fiscal quarter. Consolidated Adjusted EBITDA will include income and
expenses relating to continuing and discontinued operations and will be adjusted
for any non-recurring items and the acquisitions and dispositions of property
during any fiscal quarter.
"Consolidated Fixed Charges" means, for any fiscal quarter (a) the sum
of (i) Consolidated Interest Expense for such fiscal quarter, plus (ii)
scheduled or otherwise required principal amortization for such fiscal quarter
on all Indebtedness of Borrower and the Subsidiaries, but excluding any balloon
payment due at maturity, plus (iv) all dividends accrued during such fiscal
quarter in respect of any and all outstanding preferred shares of Borrower and
the Subsidiaries, whether or not declared or paid.
"Consolidated Interest Expense" means, for any fiscal quarter, for the
Borrower and the Subsidiaries, the sum of (a) all interest, premium payments,
debt discount, fees, charges and related expenses of the Borrower and the
Subsidiaries in connection with borrowed money (including accrued or capitalized
interest) or in connection with the deferred purchase price of assets, in each
case to the extent treated as interest in accordance with GAAP, and (b) the
portion of rent expense of the Borrower and the Subsidiaries with respect to
such fiscal quarter under capital leases that is treated as interest in
accordance with GAAP.
"Consolidated Net Income" means, for any fiscal quarter, for the
Borrower and the Subsidiaries, the net income of the Borrower and the
Subsidiaries for that fiscal quarter.
"Consolidated Tangible Net Worth" means, as of any date of
determination, for the Borrower and the Subsidiaries, (a) the Shareholders'
Equity of the Borrower and the Subsidiaries on that date, exclusive of minority
interests, minus (b) the Intangible Assets of the Borrower and the Subsidiaries
on that date.
"Consolidated Total Liabilities" means as of any date, and without
double counting any item, the sum of (a) the Total Liabilities of the Borrower
and the Subsidiaries as of such date, plus (b) the Recourse Indebtedness of any
Borrower Entity that is Guaranteed by the Borrower or that is otherwise recourse
to the Borrower, plus (c) to the extent not included in (b), the Borrower's pro
rata share of the Indebtedness of any Borrower Entity.
"Consolidated Unsecured Indebtedness" means, as of any date,
Indebtedness of Borrower and the Subsidiaries not secured by a Lien on any
property.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Controlled Borrower Entity" means any Borrower Entity of which (a)
Borrower or any Subsidiary is a general partner (if the Borrower Entity is a
partnership) or a managing member (if the
6
Borrower Entity is a limited liability company) or trustee (if the Borrower
Entity is a trust); or (b) if the management of such Borrower Entity or the
right to Dispose of or encumber such Borrower Entity's property is otherwise
controlled, directly or indirectly, through one or more intermediaries, by
Borrower or any Subsidiary.
"Credit Extension" means each of the following: (a) a Borrowing and (b)
an L/C Credit Extension.
"Debt Rating" has the meaning set forth in the definition of "Applicable
Rate."
"Debtor Relief Laws" means the Bankruptcy Code of the United States, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any event or condition that constitutes an Event of
Default or that, with the giving of any notice, the passage of time, or both,
would be an Event of Default.
"Default Rate" means an interest rate equal to (a) the Base Rate plus
(b) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 4% per
annum; provided, however, that with respect to a Eurodollar Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 4% per annum, in each
case to the fullest extent permitted by applicable Laws.
"Defaulting Lender" means any Lender that (a) has failed to fund any
portion of the Committed Loans, participations in L/C Obligations or
participations in Swing Line Loans required to be funded by it hereunder within
one Business Day of the date required to be funded by it hereunder, (b) has
otherwise failed to pay over to the Administrative Agent or any other Lender any
other amount required to be paid by it hereunder within one Business Day of the
date when due, unless the subject of a good faith dispute, or (c) has been
deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.
"Development" means, with respect to any multifamily apartment project
under construction, that the real property has been acquired by the owner
thereof, and that construction contracts have been entered into and all
necessary building permits have been obtained, until the construction of all
units (or discreet phase(s) thereof, if applicable) of such apartment project
shall have been Completed.
"Disposition" or "Dispose" means the sale, transfer, exclusive license
or other, similar disposition (including any sale and leaseback transaction) of
any property by any Person, including any sale, assignment, transfer or other
disposal with or without recourse of any notes or accounts receivable or any
rights and claims associated therewith.
"Dollar" and "$" mean lawful money of the United States.
"Down REIT Subsidiary" shall mean a Subsidiary of the Borrower that is a
partnership or limited liability company whereby the limited partners or members
contribute Real Property in exchange for membership or partnership interests in
such Subsidiary that are convertible into shares of common stock of the
Borrower.
"DRA Venture" means Borrower's 15% ownership interest in G&I III
Residential One, LLC, an affiliate of DRA Advisors, Inc.
7
"Eligible Assignee" has the meaning specified in Section 10.07(g).
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of any Loan Party or any of their respective
Subsidiaries directly or indirectly resulting from or based upon (a) violation
of any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041(c) or 4041A
of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate.
"Eurodollar Bid Margin" means the margin above or below the Eurodollar
Rate to be added to or subtracted from the Eurodollar Rate, which margin shall
be expressed in multiples of 1/100th of 1%.
"Eurodollar Margin Bid Loan" means a Bid Loan that bears interest at a
rate based upon the Eurodollar Rate.
"Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Rate Loan:
(a) the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate that appears on the page of
the Telerate screen (or any successor thereto) that displays an average
British Bankers Association Interest Settlement Rate for deposits in
Dollars (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two Business Days prior to the first day of
such Interest Period, or
8
(b) if the rate referenced in the preceding clause (a) does
not appear on such page or service or such page or service shall not be
available, the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate on such other page or other
service that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day
of such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period, or
(c) if the rates referenced in the preceding clauses (a) and
(b) are not available, the rate per annum determined by the
Administrative Agent as the rate of interest at which deposits in
Dollars for delivery on the first day of such Interest Period in same
day funds in the approximate amount of the Eurodollar Rate Loan being
made, continued or converted by Bank of America (or, in the case of a
Bid Loan, the applicable Bid Loan Lender) and with a term equivalent to
such Interest Period would be offered by Bank of America's (or such Bid
Loan Lender's) London Branch to major banks in the London interbank
eurodollar market at their request at approximately 4:00 p.m. (London
time) two Business Days prior to the first day of such Interest Period.
"Eurodollar Rate Committed Loan" means a Committed Loan that bears
interest at a rate based on the Eurodollar Rate.
"Eurodollar Rate Loan" means a Eurodollar Rate Committed Loan or a
Eurodollar Margin Bid Loan.
"Event of Default" has the meaning specified in Section 8.01.
"Existing Agreement" has the meaning specified in the Recitals hereto.
"Existing Letters of Credit" means the letter of credit issued under the
Existing Agreement in the face amount of $766,583.68 with an expiration date of
December 19, 2003, and the letter of credit issued under the Existing Agreement
in the face amount of $500,000, with an expiration date of December 19, 2003.
"Extension Effective Date" has the meaning specified in Section 2.15.
"Extension Request" has the meaning specified in Section 2.15.
"Federal Funds Rate" means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate (rounded upward,
if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on
such day on such transactions as determined by the Administrative Agent.
"Fee Letter" means the letter agreement, dated January 22, 2003, among
the Borrower, the Administrative Agent and the Arranger.
"Foreign Lender" has the meaning specified in Section 10.15(a)(i).
9
"FRB" means the Board of Governors of the Federal Reserve System of the
United States.
"Funds From Operations" means, with respect to the Borrower and the
Subsidiaries on a consolidated basis, net income calculated in accordance with
GAAP, excluding gains (or losses) from sales of property, plus real estate
depreciation and amortization (excluding amortization of financing costs), and
after adjustments for unconsolidated partnerships and joint ventures (with
adjustments for unconsolidated partnerships and joint ventures calculated to
reflect funds from operations on the same basis), in conformity with the
National Association of Real Estate Investment Trusts in its April 2002 White
Paper on Funds From Operations.
"GAAP" means generally accepted accounting principles in the United
States 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 such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Granting Lender" has the meaning specified in Section 10.07(h).
"Guarantor" means each Person that is a party to a Guaranty, including
BRE Property Investors, Cambridge Park L.L.C., Emerald Pointe Apartments, LLC,
Meridian Apartments, LLC, ITCR Villa Verde Limited Partnership, Riverview LLC
and each other Person that becomes a party to a Guaranty pursuant to Section
6.12.
"Guarantee" means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person. The amount of any Guarantee shall be
deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good
faith. The term "Guarantee" as a verb has a corresponding meaning.
"Guaranty" means each Guaranty made by each Guarantor in favor of the
Administrative Agent and the Lenders, substantially in the form of Exhibit F;
provided, however, that with respect to Cambridge Park, L.L.C., the guaranty
shall be the Guaranty executed by Cambridge Park, L.L.C., in
10
connection with the Existing Agreement, together with such confirmations
(including confirmations that such guaranty guarantees the Obligations under
this Agreement and the other Loan Documents) as may be required by the
Administrative Agent.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and
all obligations of such Person evidenced by bonds, debentures, notes,
loan agreements or other similar instruments;
(b) all direct or contingent obligations of such Person
arising under letters of credit (including standby and commercial),
bankers' acceptances, bank guaranties, surety bonds and similar
instruments;
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred
purchase price of property or services;
(e) indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse;
(f) capital leases and Synthetic Lease Obligations; and
(g) all Guarantees of such Person in respect of any of the
foregoing.
For all purposes hereof, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any capital lease or Synthetic Lease
Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.
"Indemnified Liabilities" has the meaning set forth in Section 10.05.
"Indemnitees" has the meaning set forth in Section 10.05.
"Intangible Assets" means assets that are considered to be intangible
assets under GAAP, including customer lists, goodwill, computer software,
copyrights, trade names, trademarks, patents, franchises, licenses, unamortized
deferred charges, unamortized debt discount and capitalized research and
development costs.
11
"Interest Payment Date" means, (a) as to any Loan other than a Base Rate
Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; provided, however, that if any Interest Period for a Eurodollar
Rate Loan exceeds three months, the respective dates that fall every three
months after the beginning of such Interest Period shall also be Interest
Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan),
the last Business Day of each March, June, September and December and the
Maturity Date.
"Interest Period" means (a) as to each Eurodollar Rate Committed Loan,
the period commencing on the date such Eurodollar Rate Loan is disbursed or
converted to or continued as a Eurodollar Rate Committed Loan and ending on the
date one, two, three or six months thereafter, as selected by the Borrower in
its Committed Loan Notice; and (b) as to each Absolute Rate Loan or Eurodollar
Margin Bid Loan, the period commencing on the date such Absolute Rate Loan or
Eurodollar Margin Bid Loan is disbursed and ending on the date one, two or three
months thereafter, as selected by the Borrower in its Bid Request; provided
that:
(i) any Interest Period that would otherwise end on a day
that is not a Business Day shall be extended to the next succeeding
Business Day unless, in the case of a Eurodollar Rate Loan, such
Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Business Day;
(ii) any Interest Period pertaining to a Eurodollar Rate Loan
that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last Business
Day of the calendar month at the end of such Interest Period; and
(iii) no Interest Period shall extend beyond the Maturity
Date.
"Investment" means any direct or indirect acquisition or investment by
the Borrower or BRE Property Investors in any Person, whether by means of (a)
the purchase or other acquisition of capital stock, partnership interests or
other securities of or equity interests in such Person, (b) a loan, advance or
capital contribution to, Guarantee or assumption of debt of, or purchase or
other acquisition of any other debt or equity participation or interest in, such
Person, including any partnership or joint venture interest in such Person, or
(c) the purchase or other acquisition (in one transaction or a series of
transactions) of assets of such Person that constitute a business unit. For
purposes of covenant compliance, the amount of any Investment shall be the
amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.
"IP Rights" has the meaning set forth in Section 5.18.
"IRS" means the United States Internal Revenue Service.
"Laws" means, collectively, all international, foreign, Federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"L/C Advance" means, with respect to each Lender, such Lender's funding
of its participation in any L/C Borrowing in accordance with its Pro Rata Share.
12
"L/C Borrowing" means an extension of credit resulting from a drawing
under any Letter of Credit which has not been reimbursed on the date when made
or refinanced as a Committed Borrowing.
"L/C Credit Extension" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the renewal or
increase of the amount thereof.
"L/C Issuer" means Bank of America in its capacity as issuer of Letters
of Credit hereunder, or any successor issuer of Letters of Credit hereunder.
"L/C Obligations" means, as at any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings.
"Lender" has the meaning specified in the introductory paragraph hereto
and, as the context requires, includes the L/C Issuer and the Swing Line Lender.
"Lending Office" means, as to any Lender, the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Borrower
and the Administrative Agent.
"Letter of Credit" means any standby letter of credit issued hereunder
and shall include the Existing Letters of Credit.
"Letter of Credit Application" means an application and agreement for
the issuance or amendment of a Letter of Credit in the form of Exhibit I
attached hereto.
"Letter of Credit Expiration Date" means the day that is 30 days prior
to the Maturity Date then in effect (or, if such day is not a Business Day, the
next preceding Business Day).
"Letter of Credit Sublimit" means an amount equal to 10% of the
Aggregate Commitments. The Letter of Credit Sublimit is part of, and not in
addition to, the Aggregate Commitments.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, and any financing lease having substantially the same economic effect
as any of the foregoing).
"Loan" means an extension of credit by a Lender to the Borrower under
Article II in the form of a Committed Loan, a Bid Loan or a Swing Line Loan.
"Loan Documents" means this Agreement, each Note, the Fee Letter, and
each Guaranty.
"Loan Parties" means, collectively, the Borrower and each Guarantor.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent), condition (financial or otherwise) or prospects of any
Loan Party, or the Loan Parties and the Subsidiaries taken as a whole; (b) a
material impairment of the ability of any Loan Party to perform its obligations
under any Loan Document to which it is a party; or (c) a material adverse effect
upon the legality, validity, binding effect or enforceability against any Loan
Party of any Loan Document to which it is a party.
13
"Maturity Date" means the later of (a) April 4, 2006, and (b) if
maturity is extended pursuant to Section 2.15, such extended maturity date as
determined pursuant to such Section.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and any successor
thereto.
"Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
five plan years, has made or been obligated to make contributions.
"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.
"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 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 a promissory note made by the Borrower in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of Exhibit C.
"Obligations" means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party arising under any Loan
Document or otherwise with respect to any Loan or Letter of Credit, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against any
Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief
Laws naming such Person as the debtor in such proceeding, regardless of whether
such interest and fees are allowed claims in such proceeding.
"Off-Balance Sheet Liabilities" means, with respect to any Person as of
any date of determination thereof, without duplication and to the extent not
included as a liability on the consolidated balance sheet of such Person and the
Subsidiaries in accordance with GAAP: (a) with respect to any asset
securitization transaction (including any accounts receivable purchase facility)
(i) the unrecovered investment of purchasers or transferees of assets so
transferred, and (ii) any other payment, recourse, repurchase, hold harmless,
indemnity or similar obligation of such Person or any of its Subsidiaries in
respect of assets transferred or payments made in respect thereof, other than
limited recourse provisions that are customary for transactions of such type and
that neither (x) have the effect of limiting the loss or credit risk of such
purchasers or transferees with respect to payment or performance by the obligors
of the assets so
14
transferred nor (y) impair the characterization of the transaction as a true
sale under applicable Laws (including Debtor Relief Laws); (b) the monetary
obligations under any financing lease or so-called "synthetic," tax retention or
off-balance sheet lease transaction which, upon the application of any Debtor
Relief Law to such Person or any of its Subsidiaries, would be characterized as
indebtedness; (c) the monetary obligations under any sale and leaseback
transaction which does not create a liability on the consolidated balance sheet
of such Person and its Subsidiaries; or (d) any other monetary obligation
arising with respect to any other transaction which (i) upon the application of
any Debtor Relief Law to such Person or any of its Subsidiaries, would be
characterized as indebtedness or (ii) is the functional equivalent of or takes
the place of borrowing but which does not constitute a liability on the
consolidated balance sheet of such Person and its Subsidiaries (for purposes of
this clause (d), any transaction structured to provide tax deductibility as
interest expense of any dividend, coupon or other periodic payment will be
deemed to be the functional equivalent of a borrowing).
"Organization Documents" means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"Outstanding Amount" means (i) with respect to Committed Loans, Bid
Loans and Swing Line Loans on any date, the aggregate outstanding principal
amount thereof after giving effect to any borrowings and prepayments or
repayments of Committed Loans, Bid Loans and Swing Line Loans, as the case may
be, occurring on such date; and (ii) with respect to any L/C Obligations on any
date, the amount of such L/C Obligations on such date after giving effect to any
L/C Credit Extension occurring on such date and any other changes in the
aggregate amount of the L/C Obligations as of such date, including as a result
of any reimbursements of outstanding unpaid drawings under any Letters of Credit
or any reductions in the maximum amount available for drawing under Letters of
Credit taking effect on such date.
"Participant" has the meaning specified in Section 10.07(d).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.
15
"Pro Rata Share" means, with respect to each Lender at any time, a
fraction (expressed as a percentage, carried out to the ninth decimal place),
the numerator of which is the amount of the Commitment of such Lender at such
time and the denominator of which is the amount of the Aggregate Commitments at
such time; provided that if the commitment of each Lender to make Loans and the
obligation of the L/C Issuer to make L/C Credit Extensions have been terminated
pursuant to Section 8.02, then the Pro Rata Share of each Lender shall be
determined based on the Pro Rata Share of such Lender immediately prior to such
termination and after giving effect to any subsequent assignments made pursuant
to the terms hereof. The initial Pro Rata Share of each Lender is set forth
opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.
"Real Property" shall mean multi-family residential properties held for
rental.
"Recourse Indebtedness" means any Indebtedness of a Person that is not
contractually limited to specific assets encumbered by a Lien securing such
Indebtedness.
"Register" has the meaning set forth in Section 10.07(c).
"Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than events for which the 30 day notice period has been waived.
"Request for Credit Extension" means (a) with respect to a Borrowing,
conversion or continuation of Committed Loans, a Committed Loan Notice, (b) with
respect to a Bid Loan, a Bid Request, (c) with respect to an L/C Credit
Extension, a Letter of Credit Application, and (d) with respect to a Swing Line
Loan, a Swing Line Loan Notice.
"Required Lenders" means, as of any date of determination, Lenders
having at least 66-2/3% of the Aggregate Commitments or, if the commitment of
each Lender to make Loans and the obligation of the L/C Issuer to make L/C
Credit Extensions have been terminated pursuant to Section 8.02, Lenders holding
in the aggregate at least 66-2/3% of the Total Outstandings (with the aggregate
amount of each Lender's risk participation and funded participation in L/C
Obligations and Swing Line Loans being deemed "held" by such Lender for purposes
of this definition); provided that the Commitment of, and the portion of the
Total Outstandings held or deemed held by, any Defaulting Lender shall be
excluded for purposes of making a determination of Required Lenders.
"Responsible Officer" means the chief executive officer, president,
chief financial officer, treasurer or assistant treasurer of a Loan Party. Any
document delivered hereunder that is signed by a Responsible Officer of a Loan
Party shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. and any successor thereto.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Secured Indebtedness" means, without duplication, all recourse and
Non-Recourse Indebtedness of Borrower or any Subsidiary that is secured by a
Lien on any property.
16
"Shareholders' Equity" means, as of any date of determination,
consolidated shareholders' equity, determined in accordance with GAAP.
"SPC" has the meaning specified in Section 10.07(h).
"Subsidiary" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
the Borrower or of BRE Property Investors.
"Swap Contract" means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
▇▇▇▇-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
"Swing Line Borrowing" means a borrowing of a Swing Line Loan pursuant
to Section 2.05.
"Swing Line Lender" means Bank of America in its capacity as provider of
Swing Line Loans, or any successor swing line lender hereunder.
"Swing Line Loan" has the meaning specified in Section 2.05(a).
"Swing Line Loan Notice" means a notice of a Swing Line Borrowing
pursuant to Section 2.05(b), which, if in writing, shall be substantially in the
form of Exhibit C.
"Swing Line Sublimit" means an amount equal to the lesser of (a)
$50,000,000, and (b) the Aggregate Commitments. The Swing Line Sublimit is part
of, and not in addition to, the Aggregate Commitments.
17
"Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
"Threshold Amount" means $25,000,000.
"Total Asset Value" means, with respect to the Borrower and the
Subsidiaries on a consolidated basis, and without double counting any item, the
sum of:
(a) the value of any Completed and Stabilized Real Property owned by
the Borrower and the Subsidiaries for one or more fiscal quarters, determined by
calculating the annualized Adjusted NOI for such property for the most recent
fiscal quarter, capitalized at the Applicable Capitalization Rate; plus
(b) with respect to any Real Property that has been owned by the
Borrower or a Subsidiary for less than one fiscal quarter or that is Completed,
but does not qualify as Completed and Stabilized Real Property, the value of
such property calculated as the acquisition cost of such property in accordance
with GAAP; plus
(c) the value of any other real property owned by the Borrower or a
Subsidiary and that is under Development, calculated at the lower of the
acquisition cost or fair market value of such property; plus
(d) the book value (net of any applicable reserves) of all other
tangible assets of the Borrower and the Subsidiaries as shown on its most recent
quarterly financial statements prepared on a consolidated basis in accordance
with GAAP; plus
(e) the Borrower's pro rata share of all items referred to in the
foregoing clauses (a)-(c) owned by any Borrower Entity that is not Consolidated
with Borrower.
"Total Liabilities" of a Person means the sum of (a) all Recourse
Indebtedness and Non-Recourse Indebtedness of such Person, whether or not such
Indebtedness should be included as a liability on the balance sheet of such
Person in accordance with GAAP, and (b) all other liabilities of every nature
and kind of such Person that should be included as liabilities on the balance
sheet of such Person in accordance with GAAP, and (c) all Off-Balance Sheet
Liabilities of such Person.
"Total Outstandings" means the aggregate Outstanding Amount of all Loans
and all L/C Obligations.
"Type" means (a) with respect to a Committed Loan, its character as a
Base Rate Loan or a Eurodollar Rate Loan, and (b) with respect to a Bid Loan,
its character as an Absolute Rate Loan or a Eurodollar Margin Bid Loan.
"Unencumbered Real Property" means any Real Property as to which neither
such Real Property, nor any interest in the Person owning such Real Property, is
(a) subject to any Lien (other than Liens described in clauses (i) -(iii) of
Section 7.01(b)) or (b) subject to any agreement (other than this Agreement or
any other Loan Document, and including any provision of the Organizational
Documents of such Person) that prohibits or limits the creation of any Lien
thereon as security for Indebtedness of the owner of such Real Property.
18
"Unencumbered Real Property Adjusted NOI" means for all Unencumbered
Real Property owned by the Borrower or a Guarantor, the annualized Adjusted NOI
for the most recent fiscal quarter.
"Unencumbered Real Property Value" means the value of any Unencumbered
Real Property owned by the Borrower or any Guarantor, determined by calculating
the annualized Unencumbered Real Property Adjusted NOI for such Unencumbered
Real Property, capitalized at the Applicable Capitalization Rate.
"Unfunded Pension Liability" means the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Pension Plan's assets, based on the actuarial value of the assets and
the actuarial accrued liabilities that are used in conjunction with determining
the funding requirements for such Pension Plan reported in such Pension Plan's
annual report for the applicable plan year.
"United States" and "U.S." mean the United States of America.
"Unreimbursed Amount" has the meaning set forth in Section 2.04(c)(i).
"Unsecured Indebtedness" means, without duplication, all Indebtedness of
Borrower and the Subsidiaries that is not Secured Indebtedness.
"Wholly-Owned Subsidiary" means a Subsidiary of the Borrower or BRE
Property Investors 100% of the stock, partnership interests, membership
interests or other equity or other beneficial interests (in the case of Persons
other than corporations) of which is owned directly or indirectly by the
Borrower and/or BRE Property Investors.
1.02 Other Interpretive Provisions. With reference to this Agreement
and each other Loan Document, unless otherwise specified herein or in such other
Loan Document:
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) (i) The words "herein," "hereto," "hereof" and "hereunder"
and words of similar import when used in any Loan Document shall refer to such
Loan Document as a whole and not to any particular provision thereof.
(ii) Article, Section, Exhibit and Schedule references are to
the Loan Document in which such reference appears.
(iii) The term "including" is by way of example and not
limitation.
(iv) The term "documents" includes any and all instruments,
documents, agreements, certificates, notices, reports, financial
statements and other writings, however evidenced, whether in physical or
electronic form.
(c) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including;" the words "to"
and "until" each mean "to but excluding;" and the word "through" means "to and
including."
(d) Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
19
1.03 Accounting Terms.
(a) All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP applied on
a consistent basis, as in effect from time to time, applied in a manner
consistent with that used in preparing the Audited Financial Statements, except
as otherwise specifically prescribed herein.
(b) If at any time any change in GAAP would affect the computation
of any financial ratio or requirement set forth in any Loan Document, and either
the Borrower or the Required Lenders shall so request, the Administrative Agent,
the Lenders and the Borrower shall negotiate in good faith to amend such ratio
or requirement to preserve the original intent thereof in light of such change
in GAAP (subject to the approval of the Required Lenders); provided that, until
so amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.
1.04 Rounding. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
1.05 References to Agreements and Laws. Unless otherwise expressly
provided herein, (a) references to Organization Documents, agreements (including
the Loan Documents) and other contractual instruments shall be deemed to include
all subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are not prohibited
by any Loan Document; and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.
1.06 Times of Day. Unless otherwise specified, all references herein
to times of day shall be references to Pacific time (daylight or standard, as
applicable).
1.07 Letter of 1.08 Credit Amounts. Unless otherwise specified, all
references herein to the amount of a Letter of Credit at any time shall be
deemed to mean the maximum face amount of such Letter of Credit after giving
effect to all increases thereof contemplated by such Letter of Credit or the
Letter of Credit Application therefor, whether or not such maximum face amount
is in effect at such time.
ARTICLE II.
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 Committed Loans. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make loans (each such loan, a "Committed
Loan") to the Borrower from time to time, on any Business Day during the
Availability Period, in an aggregate amount not to exceed at any time
outstanding the amount of such Lender's Commitment; provided, however, that
after giving effect to any Committed Borrowing, (i) the Total Outstandings shall
not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount
of the Committed Loans of any Lender, plus such Lender's Pro Rata Share of the
Outstanding Amount of all L/C Obligations, plus such Lender's Pro Rata Share of
the
20
Outstanding Amount of all Swing Line Loans shall not exceed such Lender's
Commitment. Within the limits of each Lender's Commitment, and subject to the
other terms and conditions hereof, the Borrower may borrow under this Section
2.01, prepay under Section 2.06, and reborrow under this Section 2.01. Committed
Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided
herein. The Borrower and each Lender acknowledges that, as of March 31, 2003,
the principal amount outstanding under the Existing Agreement is $225,000,000
and that the entire principal amount shall be repaid in accordance with this
Article II on the Amendment Closing Date.
2.02 Borrowings, Conversions and Continuations of Committed Loans.
(a) Each Committed Borrowing, each conversion of Committed Loans
from one Type to the other, and each continuation of Eurodollar Rate Committed
Loans shall be made upon the Borrower's irrevocable notice to the Administrative
Agent, which may be given by telephone. Each such notice must be received by the
Administrative Agent not later than 10 a.m.. (i) three Business Days prior to
the requested date of any Borrowing of, conversion to or continuation of
Eurodollar Rate Committed Loans, and (ii) one Business Day prior to the
requested date of any Borrowing of Base Rate Committed Loans or any conversion
of Eurodollar Rate Committed Loans to Base Rate Committed Loans. Each telephonic
notice by the Borrower pursuant to this Section 2.02(a) must be confirmed
promptly by delivery to the Administrative Agent of a written Committed Loan
Notice, appropriately completed and signed by a Responsible Officer of the
Borrower. Each Borrowing of, conversion to or continuation of Eurodollar Rate
Committed Loans shall be in a principal amount of $1,000,000 or a whole multiple
of $500,000 in excess thereof. Except as provided in Sections 2.04(c) and
2.05(c), each Borrowing of or conversion to Base Rate Committed Loans shall be
in a principal amount of $500,000 or a whole multiple of $100,000 in excess
thereof. Each Committed Loan Notice (whether telephonic or written) shall
specify (i) whether the Borrower is requesting a Committed Borrowing, a
conversion of Committed Loans from one Type to the other, or a continuation of
Eurodollar Rate Committed Loans, (ii) the requested date of the Borrowing,
conversion or continuation, as the case may be (which shall be a Business Day),
(iii) the principal amount of Committed Loans to be borrowed, converted or
continued, (iv) the Type of Committed Loans to be borrowed or to which existing
Committed Loans are to be converted, and (v) if applicable, the duration of the
Interest Period with respect thereto. If the Borrower fails to specify a Type of
Committed Loan in a Committed Loan Notice or if the Borrower fails to give a
timely notice requesting a conversion or continuation, then the applicable
Committed Loans shall be made as, or converted to, Base Rate Loans. Any such
automatic conversion to Base Rate Loans shall be effective as of the last day of
the Interest Period then in effect with respect to the applicable Eurodollar
Rate Committed Loans. If the Borrower requests a Borrowing of, conversion to, or
continuation of Eurodollar Rate Committed Loans in any such Committed Loan
Notice, but fails to specify an Interest Period, it will be deemed to have
specified an Interest Period of one month.
(b) Following receipt of a Committed Loan Notice, the Administrative
Agent shall promptly notify each Lender of the amount of its Pro Rata Share of
the applicable Committed Loans, and if no timely notice of a conversion or
continuation is provided by the Borrower, the Administrative Agent shall notify
each Lender of the details of any automatic conversion to Base Rate Loans
described in the preceding subsection. In the case of a Committed Borrowing,
each Lender shall make the amount of its Committed Loan available to the
Administrative Agent in immediately available funds at the Administrative
Agent's Office not later than 10 a.m. on the Business Day specified in the
applicable Committed Loan Notice. Upon satisfaction of the applicable conditions
set forth in Section 4.02 (and, if such Borrowing is the initial Credit
Extension, Section 4.01), the Administrative Agent shall make all funds so
received available to the Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrower on the
books of Bank of America with the amount of such funds or (ii) wire transfer of
such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative Agent by the Borrower; provided,
however, that if, on the
21
date the Committed Loan Notice with respect to such Borrowing is given by the
Borrower, there are Swing Line Loans or L/C Borrowings outstanding, then the
proceeds of such Borrowing shall be applied, first, to the payment in full of
any such L/C Borrowings, second, to the payment in full of any such Swing Line
Loans, and third, to the Borrower as provided above.
(c) Except as otherwise provided herein, a Eurodollar Rate Committed
Loan may be continued or converted only on the last day of an Interest Period
for such Eurodollar Rate Committed Loan. During the existence of a Default, no
Loans may be requested as, converted to or continued as Eurodollar Rate
Committed Loans without the consent of the Required Lenders.
(d) The Administrative Agent shall promptly notify the Borrower and
the Lenders of the interest rate applicable to any Interest Period for
Eurodollar Rate Committed Loans upon determination of such interest rate. The
determination of the Eurodollar Rate by the Administrative Agent shall be
conclusive in the absence of manifest error. At any time that Base Rate Loans
are outstanding, the Administrative Agent shall notify the Borrower and the
Lenders of any change in Bank of America's prime rate used in determining the
Base Rate promptly following the public announcement of such change.
(e) After giving effect to all Committed Borrowings, all conversions
of Committed Loans from one Type to the other, and all continuations of
Committed Loans as the same Type, there shall not be more than five Interest
Periods in effect with respect to Committed Loans.
2.03 Bid Loans.
(a) General. Subject to the terms and conditions set forth herein,
each Lender agrees that the Borrower may from time to time request the Lenders
to submit offers to make loans (each such loan, a "Bid Loan") to the Borrower
prior to the Maturity Date pursuant to this Section 2.03; provided, however,
that after giving effect to any Bid Borrowing, (i) the Total Outstandings shall
not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount
of all Bid Loans shall not exceed the Bid Loan Sublimit. There shall not be more
than five different Interest Periods in effect with respect to Bid Loans at any
time.
(b) Requesting Competitive Bids. As long as the Borrower maintains a
Debt Rating of not less than Baa2 from ▇▇▇▇▇'▇ and BBB from S&P, the Borrower
may request the submission of Competitive Bids by delivering a Bid Request and
an auction fee of $2,500 to the Administrative Agent not later than 10 a.m. (i)
one Business Day prior to the requested date of any Bid Borrowing that is to
consist of Absolute Rate Loans, or (ii) five Business Days prior to the
requested date of any Bid Borrowing that is to consist of Eurodollar Margin Bid
Loans. Each Bid Request shall specify (i) the requested date of the Bid
Borrowing (which shall be a Business Day), (ii) the aggregate principal amount
of Bid Loans requested (which must be $10,000,000 or a whole multiple of
$1,000,000 in excess thereof), (iii) the Type of Bid Loans requested, and (iv)
the duration of the Interest Period with respect thereto, and shall be signed by
a Responsible Officer of the Borrower. No Bid Request shall contain a request
for (i) more than one Type of Bid Loan, or (ii) Bid Loans having more than three
different Interest Periods. Unless the Administrative Agent otherwise agrees in
its sole and absolute discretion, the Borrower may not submit a Bid Request if
it has submitted another Bid Request within the prior five Business Days.
(c) Submitting Competitive Bids.
(i) The Administrative Agent shall promptly notify each
Lender of each Bid Request received by it from the Borrower and the
contents of such Bid Request.
22
(ii) Each Lender may (but shall have no obligation to) submit
a Competitive Bid containing an offer to make one or more Bid Loans in
response to such Bid Request. Such Competitive Bid must be delivered to
the Administrative Agent not later than 8:00 a.m. (A) on the requested
date of any Bid Borrowing that is to consist of Absolute Rate Loans, and
(B) four Business Days prior to the requested date of any Bid Borrowing
that is to consist of Eurodollar Margin Bid Loans; provided, however,
that any Competitive Bid submitted by Bank of America in its capacity as
a Lender in response to any Bid Request must be submitted to the
Administrative Agent not later than 7:45 a.m. on the date on which
Competitive Bids are required to be delivered by the other Lenders in
response to such Bid Request. Each Competitive Bid shall specify (A) the
proposed date of the Bid Borrowing; (B) the principal amount of each Bid
Loan for which such Competitive Bid is being made, which principal
amount (x) may be equal to, greater than or less than the Commitment of
the bidding Lender, (y) must be $5,000,000 or a whole multiple of
$1,000,000 in excess thereof, and (z) may not exceed the principal
amount of Bid Loans for which Competitive Bids were requested; (C) if
the proposed Bid Borrowing is to consist of Absolute Rate Bid Loans, the
Absolute Rate offered for each such Bid Loan and the Interest Period
applicable thereto; (D) if the proposed Bid Borrowing is to consist of
Eurodollar Margin Bid Loans, the Eurodollar Bid Margin with respect to
each such Eurodollar Margin Bid Loan and the Interest Period applicable
thereto; and (E) the identity of the bidding Lender.
(iii) Any Competitive Bid shall be disregarded if it (A) is
received after the applicable time specified in clause (ii) above, (B)
is not substantially in the form of a Competitive Bid as specified
herein, (C) contains qualifying, conditional or similar language, (D)
proposes terms other than or in addition to those set forth in the
applicable Bid Request, or (E) is otherwise not responsive to such Bid
Request. Any Lender may correct a Competitive Bid containing a manifest
error by submitting a corrected Competitive Bid (identified as such) not
later than the applicable time required for submission of Competitive
Bids. Any such submission of a corrected Competitive Bid shall
constitute a revocation of the Competitive Bid that contained the
manifest error. The Administrative Agent may, but shall not be required
to, notify any Lender of any manifest error it detects in such Lender's
Competitive Bid.
(iv) Subject only to the provisions of Sections 3.02, 3.03
and 4.02 and clause (iii) above, each Competitive Bid shall be
irrevocable.
(d) Notice to Borrower of Competitive Bids. Not later than 9:00 a.m.
(i) on the requested date of any Bid Borrowing that is to consist of Absolute
Rate Loans, or (ii) four Business Days prior to the requested date of any Bid
Borrowing that is to consist of Eurodollar Margin Bid Loans, the Administrative
Agent shall notify the Borrower of the identity of each Lender that has
submitted a Competitive Bid that complies with Section 2.03(c) and of the terms
of the offers contained in each such Competitive Bid.
(e) Acceptance of Competitive Bids. Not later than 10:00 a.m. (i) on
the requested date of any Bid Borrowing that is to consist of Absolute Rate
Loans, and (ii) three Business Days prior to the requested date of any Bid
Borrowing that is to consist of Eurodollar Margin Bid Loans, the Borrower shall
notify the Administrative Agent of its acceptance or rejection of the offers
notified to it pursuant to Section 2.03(d). The Borrower shall be under no
obligation to accept any Competitive Bid and may choose to reject all
Competitive Bids. In the case of acceptance, such notice shall specify the
aggregate principal amount of Competitive Bids for each Interest Period that is
accepted. The Borrower may accept any Competitive Bid in whole or in part;
provided that:
(i) the aggregate principal amount of each Bid Borrowing may
not exceed the applicable amount set forth in the related Bid Request;
23
(ii) the principal amount of each Bid Loan must be $5,000,000
or a whole multiple of $1,000,000 in excess thereof;
(iii) the acceptance of offers may be made only on the basis
of ascending Absolute Rates or Eurodollar Bid Margins within each
Interest Period; and
(iv) the Borrower may not accept any offer that is described
in Section 2.03(c)(iii) or that otherwise fails to comply with the
requirements hereof.
(f) Procedure for Identical Bids. If two or more Lenders have
submitted Competitive Bids at the same Absolute Rate or Eurodollar Bid Margin,
as the case may be, for the same Interest Period, and the result of accepting
all of such Competitive Bids in whole (together with any other Competitive Bids
at lower Absolute Rates or Eurodollar Bid Margins, as the case may be, accepted
for such Interest Period in conformity with the requirements of Section
2.03(e)(iii)) would be to cause the aggregate outstanding principal amount of
the applicable Bid Borrowing to exceed the amount specified therefor in the
related Bid Request, then, unless otherwise agreed by the Borrower, the
Administrative Agent and such Lenders, such Competitive Bids shall be accepted
as nearly as possible in proportion to the amount offered by each such Lender in
respect of such Interest Period, with such accepted amounts being rounded to the
nearest whole multiple of $1,000,000.
(g) Notice to Lenders of Acceptance or Rejection of Bids. The
Administrative Agent shall promptly notify each Lender having submitted a
Competitive Bid whether or not its offer has been accepted and, if its offer has
been accepted, of the amount of the Bid Loan or Bid Loans to be made by it on
the date of the applicable Bid Borrowing. Any Competitive Bid or portion thereof
that is not accepted by the Borrower by the applicable time specified in Section
2.03(e) shall be deemed rejected.
(h) Notice of Eurodollar Rate. If any Bid Borrowing is to consist of
Eurodollar Margin Loans, the Administrative Agent shall determine the Eurodollar
Rate for the relevant Interest Period, and promptly after making such
determination, shall notify the Borrower and the Lenders that will be
participating in such Bid Borrowing of such Eurodollar Rate.
(i) Funding of Bid Loans. Each Lender that has received notice
pursuant to Section 2.03(g) that all or a portion of its Competitive Bid has
been accepted by the Borrower shall make the amount of its Bid Loan(s) available
to the Administrative Agent in immediately available funds at the Administrative
Agent's Office not later than 10:30 a.m. on the date of the requested Bid
Borrowing. Upon satisfaction of the applicable conditions set forth in Section
4.02, the Administrative Agent shall make all funds so received available to the
Borrower in like funds as received by the Administrative Agent.
(j) Notice of Range of Bids. After each Competitive Bid auction
pursuant to this Section 2.03, the Administrative Agent shall notify each Lender
that submitted a Competitive Bid in such auction of the ranges of bids submitted
(without the bidder's name) and accepted for each Bid Loan and the aggregate
amount of each Bid Borrowing.
2.04 Letters of Credit.
(a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein,
(A) the L/C Issuer agrees, in reliance upon the agreements of the other
Lenders set forth in this Section 2.04, (1) from time to time on any
Business Day during the period from the Amendment Closing Date until the
Letter of
24
Credit Expiration Date, to issue Letters of Credit for the account of
the Borrower, and to amend or renew Letters of Credit previously issued
by it, in accordance with subsection (b) below, and (2) to honor drafts
under the Letters of Credit; and (B) the Lenders severally agree to
participate in Letters of Credit issued for the account of the Borrower;
provided that the L/C Issuer shall not be obligated to make any L/C
Credit Extension with respect to any Letter of Credit, and no Lender
shall be obligated to participate in any Letter of Credit if as of the
date of such L/C Credit Extension, (x) the Total Outstandings would
exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount
of the Committed Loans of any Lender, plus such Lender's Pro Rata Share
of the Outstanding Amount of all L/C Obligations, plus such Lender's Pro
Rata Share of the Outstanding Amount of all Swing Line Loans would
exceed such Lender's Commitment, or (z) the Outstanding Amount of the
L/C Obligations would exceed the Letter of Credit Sublimit. Within the
foregoing limits, and subject to the terms and conditions hereof, the
Borrower's ability to obtain Letters of Credit shall be fully revolving,
and accordingly the Borrower may, during the foregoing period, obtain
Letters of Credit to replace Letters of Credit that have expired or that
have been drawn upon and reimbursed. All Existing Letters of Credit
shall be deemed to have been issued pursuant hereto, and from and after
the Amendment Closing Date shall be subject to and governed by the terms
and conditions hereof.
(ii) The L/C Issuer shall be under no obligation to issue any
Letter of Credit if:
(A) any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms purport
to enjoin or restrain the L/C Issuer from issuing such Letter of
Credit, or any Law applicable to the L/C Issuer or any request
or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the L/C Issuer
shall prohibit, or request that the L/C Issuer refrain from, the
issuance of letters of credit generally or such Letter of Credit
in particular or shall impose upon the L/C Issuer with respect
to such Letter of Credit any restriction, reserve or capital
requirement (for which the L/C Issuer is not otherwise
compensated hereunder) not in effect on the Amendment Closing
Date, or shall impose upon the L/C Issuer any unreimbursed loss,
cost or expense which was not applicable on the Amendment
Closing Date and which the L/C Issuer in good ▇▇▇▇▇ ▇▇▇▇▇
material to it;
(B) subject to Section 2.04(b)(iii), the expiry date
of such requested Letter of Credit would occur more than twelve
months after the date of issuance or last renewal, unless the
Required Lenders have approved such expiry date;
(C) the expiry date of such requested Letter of
Credit would occur after the Letter of Credit Expiration Date,
unless all the Lenders have approved such expiry date;
(D) the issuance of such Letter of Credit would
violate one or more policies of the L/C Issuer; or
(E) such Letter of Credit is in an initial amount
less than $400,000 or is to be denominated in a currency other
than Dollars.
(iii) The L/C Issuer shall be under no obligation to amend any
Letter of Credit if (A) the L/C Issuer would have no obligation at such
time to issue such Letter of Credit in its amended form under the terms
hereof, or (B) the beneficiary of such Letter of Credit does not accept
the proposed amendment to such Letter of Credit.
25
(b) Procedures for Issuance and Amendment of Letters of Credit;
Auto-Renewal Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the
case may be, upon the request of the Borrower delivered to the L/C
Issuer (with a copy to the Administrative Agent) in the form of a Letter
of Credit Application, appropriately completed and signed by a
Responsible Officer of the Borrower. Such Letter of Credit Application
must be received by the L/C Issuer and the Administrative Agent not
later than 9:00 a.m. at least three Business Days (or such later date
and time as the L/C Issuer may agree in a particular instance in its
sole discretion) prior to the proposed issuance date or date of
amendment, as the case may be. In the case of a request for an initial
issuance of a Letter of Credit, such Letter of Credit Application shall
specify in form and detail satisfactory to the L/C Issuer: (A) the
proposed issuance date of the requested Letter of Credit (which shall be
a Business Day); (B) the amount thereof; (C) the expiry date thereof;
(D) the name and address of the beneficiary thereof; (E) the documents
to be presented by such beneficiary in case of any drawing thereunder;
(F) the full text of any certificate to be presented by such beneficiary
in case of any drawing thereunder; and (G) such other matters as the L/C
Issuer may require. In the case of a request for an amendment of any
outstanding Letter of Credit, such Letter of Credit Application shall
specify in form and detail satisfactory to the L/C Issuer (A) the Letter
of Credit to be amended; (B) the proposed date of amendment thereof
(which shall be a Business Day); (C) the nature of the proposed
amendment; and (D) such other matters as the L/C Issuer may require.
(ii) Promptly after receipt of any Letter of Credit
Application, the L/C Issuer will confirm with the Administrative Agent
(by telephone or in writing) that the Administrative Agent has received
a copy of such Letter of Credit Application from the Borrower and, if
not, the L/C Issuer will provide the Administrative Agent with a copy
thereof. Upon receipt by the L/C Issuer of confirmation from the
Administrative Agent that the requested issuance or amendment is
permitted in accordance with the terms hereof, then, subject to the
terms and conditions hereof, the L/C Issuer shall, on the requested
date, issue a Letter of Credit for the account of the Borrower or enter
into the applicable amendment, as the case may be, in each case in
accordance with the L/C Issuer's usual and customary business practices.
Immediately upon the issuance of each Letter of Credit, each Lender
shall be deemed to, and hereby irrevocably and unconditionally agrees
to, purchase from the L/C Issuer a risk participation in such Letter of
Credit in an amount equal to the product of such Lender's Pro Rata Share
times the amount of such Letter of Credit.
(iii) If the Borrower so requests in any applicable Letter of
Credit Application, the L/C Issuer may, in its sole and absolute
discretion, agree to issue a Letter of Credit that has automatic renewal
provisions (each, an "Auto-Renewal Letter of Credit"); provided that any
such Auto-Renewal Letter of Credit must permit the L/C Issuer to prevent
any such renewal at least once in each twelve-month period (commencing
with the date of issuance of such Letter of Credit) by giving prior
notice to the beneficiary thereof not later than a day (the "Nonrenewal
Notice Date") in each such twelve-month period to be agreed upon at the
time such Letter of Credit is issued. Unless otherwise directed by the
L/C Issuer, the Borrower shall not be required to make a specific
request to the L/C Issuer for any such renewal. Once an Auto-Renewal
Letter of Credit has been issued, the Lenders shall be deemed to have
authorized (but may not require) the L/C Issuer to permit the renewal of
such Letter of Credit at any time to an expiry date not later than the
Letter of Credit Expiration Date; provided, however, that the L/C Issuer
shall not permit any such renewal if (A) the L/C Issuer has determined
that it would have no obligation at such time to issue such Letter of
Credit in its renewed form under the terms hereof (by reason of the
provisions of Section 2.04(a)(ii) or otherwise), or (B) it has received
notice (which may be by
26
telephone or in writing) on or before the day that is five Business Days
before the Nonrenewal Notice Date (1) from the Administrative Agent that
the Required Lenders have elected not to permit such renewal or (2) from
the Administrative Agent, any Lender or the Borrower that one or more of
the applicable conditions specified in Section 4.02 is not then
satisfied.
(iv) Promptly after its delivery of any Letter of Credit or
any amendment to a Letter of Credit to an advising bank with respect
thereto or to the beneficiary thereof, the L/C Issuer will also deliver
to the Borrower and the Administrative Agent a true and complete copy of
such Letter of Credit or amendment.
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon receipt from the beneficiary of any Letter of
Credit of any notice of a drawing under such Letter of Credit, the L/C
Issuer shall notify the Borrower and the Administrative Agent thereof.
On the later of (a) 11:00 a.m. on the date of any payment by the L/C
Issuer under a Letter of Credit, or (b) one hour after any payment by
the L/C Issuer under a Letter of Credit on the date of any payment by
the L/C Issuer under a Letter of Credit (each such date, an "Honor
Date"), the Borrower shall reimburse the L/C Issuer through the
Administrative Agent in an amount equal to the amount of such drawing.
If the Borrower fails to so reimburse the L/C Issuer by such time (which
reimbursement made be made by a Borrowing, if permitted under this
Agreement), the Administrative Agent shall promptly notify each Lender
of the Honor Date, the amount of the unreimbursed drawing (the
"Unreimbursed Amount"), and the amount of such Lender's Pro Rata Share
thereof. In such event, the Borrower shall be deemed to have requested a
Committed Borrowing of Base Rate Loans to be disbursed on the Honor Date
in an amount equal to the Unreimbursed Amount, without regard to the
minimum and multiples specified in Section 2.02 for the principal amount
of Base Rate Loans, but subject to the amount of the unutilized portion
of the Aggregate Commitments and the conditions set forth in Section
4.02 (other than the delivery of a Committed Loan Notice). Any notice
given by the L/C Issuer or the Administrative Agent pursuant to this
Section 2.04(c)(i) may be given by telephone if immediately confirmed in
writing; provided that the lack of such an immediate confirmation shall
not affect the conclusiveness or binding effect of such notice.
(ii) Each Lender (including the Lender acting as L/C Issuer)
shall upon any notice pursuant to Section 2.04(c)(i) make funds
available to the Administrative Agent for the account of the L/C Issuer
at the Administrative Agent's Office in an amount equal to its Pro Rata
Share of the Unreimbursed Amount not later than 1 p.m. on the Business
Day specified in such notice by the Administrative Agent, whereupon,
subject to the provisions of Section 2.04(c)(iii), each Lender that so
makes funds available shall be deemed to have made a Base Rate Committed
Loan to the Borrower in such amount. The Administrative Agent shall
remit the funds so received to the L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is not
fully refinanced by a Committed Borrowing of Base Rate Loans because the
conditions set forth in Section 4.02 cannot be satisfied or for any
other reason, the Borrower shall be deemed to have incurred from the L/C
Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is
not so refinanced, which L/C Borrowing shall be due and payable on
demand (together with interest) and shall bear interest at the Default
Rate. In such event, each Lender's payment to the Administrative Agent
for the account of the L/C Issuer pursuant to Section 2.04(c)(ii) shall
be deemed payment in respect of its participation in such L/C Borrowing
and shall constitute an L/C Advance from such Lender in satisfaction of
its participation obligation under this Section 2.04.
27
(iv) Until each Lender funds its Committed Loan or L/C
Advance pursuant to this Section 2.04(c) to reimburse the L/C Issuer for
any amount drawn under any Letter of Credit, interest in respect of such
Lender's Pro Rata Share of such amount shall be solely for the account
of the L/C Issuer.
(v) Each Lender's obligation to make Committed Loans or L/C
Advances to reimburse the L/C Issuer for amounts drawn under Letters of
Credit, as contemplated by this Section 2.04(c), shall be absolute and
unconditional and shall not be affected by any circumstance, including
(A) any set-off, counterclaim, recoupment, defense or other right which
such Lender may have against the L/C Issuer, the Borrower or any other
Person for any reason whatsoever; (B) the occurrence or continuance of a
Default, or (C) any other occurrence, event or condition, whether or not
similar to any of the foregoing; provided, however, that each Lender's
obligation to make Committed Loans pursuant to this Section 2.04(c) is
subject to the conditions set forth in Section 4.02 (other than delivery
by the Borrower of a Committed Loan Notice). No such making of an L/C
Advance shall relieve or otherwise impair the obligation of the Borrower
to reimburse the L/C Issuer for the amount of any payment made by the
L/C Issuer under any Letter of Credit, together with interest as
provided herein.
(vi) If any Lender fails to make available to the
Administrative Agent for the account of the L/C Issuer any amount
required to be paid by such Lender pursuant to the foregoing provisions
of this Section 2.04(c) by the time specified in Section 2.04(c)(ii),
the L/C Issuer shall be entitled to recover from such Lender (acting
through the Administrative Agent), on demand, such amount with interest
thereon for the period from the date such payment is required to the
date on which such payment is immediately available to the L/C Issuer at
a rate per annum equal to the Federal Funds Rate from time to time in
effect. A certificate of the L/C Issuer submitted to any Lender (through
the Administrative Agent) with respect to any amounts owing under this
clause (vi) shall be deemed presumptively correct, absent manifest
error.
(d) Repayment of Participations.
(i) At any time after the L/C Issuer has made a payment
under any Letter of Credit and has received from any Lender such
Lender's L/C Advance in respect of such payment in accordance with
Section 2.04(c), if the Administrative Agent receives for the account of
the L/C Issuer any payment in respect of the related Unreimbursed Amount
or interest thereon (whether directly from the Borrower or otherwise,
including proceeds of cash collateral applied thereto by the
Administrative Agent), the Administrative Agent will distribute to such
Lender its Pro Rata Share thereof (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such
Lender's L/C Advance was outstanding) in the same funds as those
received by the Administrative Agent.
(ii) If any payment received by the Administrative Agent for
the account of the L/C Issuer pursuant to Section 2.04(c)(i) is required
to be returned under any of the circumstances described in Section 10.06
(including pursuant to any settlement entered into by the L/C Issuer in
its discretion), each Lender shall pay to the Administrative Agent for
the account of the L/C Issuer its Pro Rata Share thereof on demand of
the Administrative Agent, plus interest thereon from the date of such
demand to the date such amount is returned by such Lender, at a rate per
annum equal to the Federal Funds Rate from time to time in effect.
(e) Obligations Absolute. The obligation of the Borrower to
reimburse the L/C Issuer for each drawing under each Letter of Credit and to
repay each L/C Borrowing shall be absolute,
28
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of
Credit, this Agreement, or any other agreement or instrument relating
thereto;
(ii) the existence of any claim, counterclaim, set-off,
defense or other right that the Borrower may have at any time against
any beneficiary or any transferee of such Letter of Credit (or any
Person for whom any such beneficiary or any such transferee may be
acting), the L/C Issuer or any other Person, whether in connection with
this Agreement, the transactions contemplated hereby or by such Letter
of Credit or any agreement or instrument relating thereto, or any
unrelated transaction;
(iii) any draft, demand, certificate or other document
presented under such 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; or any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under such Letter of Credit;
(iv) any payment by the L/C Issuer under such Letter of
Credit against presentation of a draft or certificate that does not
strictly comply with the terms of such Letter of Credit; or any payment
made by the L/C Issuer under such Letter of Credit to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession, assignee
for the benefit of creditors, liquidator, receiver or other
representative of or successor to any beneficiary or any transferee of
such Letter of Credit, including any arising in connection with any
proceeding under any Debtor Relief Law; or
(v) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing, including any other circumstance
that might otherwise constitute a defense available to, or a discharge
of, the Borrower.
The Borrower shall promptly examine a copy of each Letter of Credit and
each amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower's instructions or other irregularity, the
Borrower will immediately notify the L/C Issuer. The Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.
(f) Role of L/C Issuer. Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
any Agent-Related Person nor any of the respective correspondents, participants
or assignees of the L/C Issuer shall be liable to any Lender for (i) any action
taken or omitted in connection herewith at the request or with the approval of
the Lenders or the Required Lenders, as applicable; (ii) any action taken or
omitted in the absence of gross negligence or willful misconduct; or (iii) the
due execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Letter of Credit Application. The
Borrower hereby assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude the Borrower's
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. None of the L/C Issuer, any
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of the L/C Issuer, shall be liable or responsible for
29
any of the matters described in clauses (i) through (v) of Section 2.04(e);
provided, however, that anything in such clauses to the contrary
notwithstanding, the Borrower may have a claim against the L/C Issuer, and the
L/C Issuer may be liable to the Borrower, to the extent, but only to the extent,
of any direct, as opposed to consequential or exemplary, damages suffered by the
Borrower which the Borrower proves were caused by the L/C Issuer's willful
misconduct or gross negligence or the L/C Issuer's willful failure to pay under
any Letter of Credit after the presentation to it by the beneficiary of a sight
draft and certificate(s) strictly complying with the terms and conditions of a
Letter of Credit. In furtherance and not in limitation of the foregoing, the L/C
Issuer 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, and the L/C Issuer shall not be responsible for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.
(g) Cash Collateral. Upon the request of the Administrative Agent,
(i) if the L/C Issuer has honored any full or partial drawing request under any
Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if,
as of the Letter of Credit Expiration Date, any Letter of Credit may for any
reason remain outstanding and partially or wholly undrawn, the Borrower shall
immediately Cash Collateralize the then Outstanding Amount of all L/C
Obligations (in an amount equal to such Outstanding Amount determined as of the
date of such L/C Borrowing or the Letter of Credit Expiration Date, as the case
may be). For purposes hereof, "Cash Collateralize" means to pledge and deposit
with or deliver to the Administrative Agent, for the benefit of the L/C Issuer
and the Lenders, as collateral for the L/C Obligations, cash or deposit account
balances pursuant to documentation in form and substance satisfactory to the
Administrative Agent and the L/C Issuer (which documents are hereby consented to
by the Lenders). Derivatives of such term have corresponding meanings. The
Borrower hereby grants to the Administrative Agent, for the benefit of the L/C
Issuer and the Lenders, a security interest in all such cash, deposit accounts
and all balances therein and all proceeds of the foregoing. Cash collateral
shall be maintained in blocked, interest bearing deposit accounts at Bank of
America.
(h) Applicability of ISP98. Unless otherwise expressly agreed by the
L/C Issuer and the Borrower when a Letter of Credit is issued (including any
such agreement applicable to an Existing Letter of Credit), the rules of the
"International Standby Practices 1998" published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each standby Letter of Credit.
(i) Letter of Credit Fees. The Borrower shall pay to the
Administrative Agent for the account of each Lender in accordance with its Pro
Rata Share a Letter of Credit fee for each Letter of Credit equal to the
Applicable Rate times the daily maximum amount available to be drawn under such
Letter of Credit (whether or not such maximum amount is then in effect under
such Letter of Credit). Such letter of credit fees shall be computed on a
quarterly basis in arrears. Such letter of credit fees shall be due and payable
on the first Business Day after the end of each March, June, September and
December, commencing with the first such date to occur after the issuance of
such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on
demand. If there is any change in the Applicable Rate during any quarter, the
daily maximum amount of each Letter of Credit shall be computed and multiplied
by the Applicable Rate separately for each period during such quarter that such
Applicable Rate was in effect.
(j) Fronting Fee and Documentary and Processing Charges Payable to
L/C Issuer. The Borrower shall pay directly to the L/C Issuer for its own
account a fronting fee in an amount equal to the greater of (i) $1,500 or (ii)
12.5 basis points times the daily maximum amount available to be drawn under the
applicable Letter of Credit (whether or not such maximum amount is then in
effect under such
30
Letter of Credit). In addition, the Borrower shall pay directly to the L/C
Issuer for its own account the customary issuance, presentation, amendment and
other processing fees, and other standard costs and charges, of the L/C Issuer
relating to letters of credit as from time to time in effect. Such customary
fees and standard costs and charges are due and payable on demand and are
nonrefundable.
(k) Conflict with Letter of Credit Application. In the event of any
conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.
2.05 Swing Line Loans.
(a) The Swing Line. Subject to the terms and conditions set forth
herein, the Swing Line Lender agrees to make loans (each such loan, a "Swing
Line Loan") to the Borrower from time to time on any Business Day during the
Availability Period in an aggregate amount not to exceed at any time outstanding
the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing
Line Loans, when aggregated with the Pro Rata Share of the Outstanding Amount of
Committed Loans and L/C Obligations of the Lender acting as Swing Line Lender,
may exceed the amount of such Lender's Commitment; provided, however, that after
giving effect to any Swing Line Loan, (i) the Total Outstandings shall not
exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount of
the Committed Loans of any Lender, plus such Lender's Pro Rata Share of the
Outstanding Amount of all L/C Obligations, plus such Lender's Pro Rata Share of
the Outstanding Amount of all Swing Line Loans shall not exceed such Lender's
Commitment, and provided, further, that the Borrower shall not use the proceeds
of any Swing Line Loan to refinance any outstanding Swing Line Loan. Within the
foregoing limits, and subject to the other terms and conditions hereof, the
Borrower may borrow under this Section 2.05, prepay under Section 2.06, and
reborrow under this Section 2.05. Each Swing Line Loan shall be a Base Rate
Loan. Immediately upon the making of a Swing Line Loan, each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the Swing Line Lender a risk participation in such Swing Line Loan in an amount
equal to the product of such Lender's Pro Rata Share times the amount of such
Swing Line Loan.
(b) Borrowing Procedures. Each Swing Line Borrowing shall be made
upon the Borrower's irrevocable notice to the Swing Line Lender and the
Administrative Agent, which may be given by telephone. Each such notice must be
received by the Swing Line Lender and the Administrative Agent not later than 10
a.m. on the requested borrowing date, and shall specify (i) the amount to be
borrowed, which shall be a minimum of $500,000, and (ii) the requested borrowing
date, which shall be a Business Day. Each such telephonic notice must be
confirmed promptly by delivery to the Swing Line Lender and the Administrative
Agent of a written Swing Line Loan Notice, appropriately completed and signed by
a Responsible Officer of the Borrower. Promptly after receipt by the Swing Line
Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will
confirm with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has also received such Swing Line Loan Notice and, if not,
the Swing Line Lender will notify the Administrative Agent (by telephone or in
writing) of the contents thereof. Unless the Swing Line Lender has received
notice (by telephone or in writing) from the Administrative Agent (including at
the request of any Lender) prior to 11 a.m. on the date of the proposed Swing
Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line
Loan as a result of the limitations set forth in the proviso to the first
sentence of Section 2.05(a), or (B) that one or more of the applicable
conditions specified in Article IV is not then satisfied, then, subject to the
terms and conditions hereof, the Swing Line Lender will, not later than 12:00
noon on the borrowing date specified in such Swing Line Loan Notice, make the
amount of its Swing Line Loan available to the Borrower at its office by
crediting the account of the Borrower on the books of the Swing Line Lender in
immediately available funds.
31
(c) Refinancing of Swing Line Loans.
(i) The Swing Line Lender at any time in its sole and
absolute discretion may request, on behalf of the Borrower (which hereby
irrevocably authorizes the Swing Line Lender to so request on its
behalf), that each Lender make a Base Rate Committed Loan in an amount
equal to such Lender's Pro Rata Share of the amount of Swing Line Loans
then outstanding. Such request shall be made in writing (which written
request shall be deemed to be a Committed Loan Notice for purposes
hereof) and in accordance with the requirements of Section 2.02, without
regard to the minimum and multiples specified therein for the principal
amount of Base Rate Loans, but subject to the unutilized portion of the
Aggregate Commitments and the conditions set forth in Section 4.02. The
Swing Line Lender shall furnish the Borrower with a copy of the
applicable Committed Loan Notice promptly after delivering such notice
to the Administrative Agent. Each Lender shall make an amount equal to
its Pro Rata Share of the amount specified in such Committed Loan Notice
available to the Administrative Agent in immediately available funds for
the account of the Swing Line Lender at the Administrative Agent's
Office not later than 10 a.m. on the day specified in such Committed
Loan Notice, whereupon, subject to Section 2.05(c)(ii), each Lender that
so makes funds available shall be deemed to have made a Base Rate
Committed Loan to the Borrower in such amount. The Administrative Agent
shall remit the funds so received to the Swing Line Lender.
(ii) If for any reason any Swing Line Loan cannot be
refinanced by such a Committed Borrowing in accordance with Section
2.05(c)(i), the request for Base Rate Committed Loans submitted by the
Swing Line Lender as set forth herein shall be deemed to be a request by
the Swing Line Lender that each of the Lenders fund its risk
participation in the relevant Swing Line Loan and each Lender's payment
to the Administrative Agent for the account of the Swing Line Lender
pursuant to Section 2.05(c)(i) shall be deemed payment in respect of
such participation.
(iii) If any Lender fails to make available to the
Administrative Agent for the account of the Swing Line Lender any amount
required to be paid by such Lender pursuant to the foregoing provisions
of this Section 2.05(c) by the time specified in Section 2.05(c)(i), the
Swing Line Lender shall be entitled to recover from such Lender (acting
through the Administrative Agent), on demand, such amount with interest
thereon for the period from the date such payment is required to the
date on which such payment is immediately available to the Swing Line
Lender at a rate per annum equal to the Federal Funds Rate from time to
time in effect. A certificate of the Swing Line Lender submitted to any
Lender (through the Administrative Agent) with respect to any amounts
owing under this clause (iii) shall be conclusive absent manifest error.
(iv) Each Lender's obligation to make Committed Loans or to
purchase and fund risk participations in Swing Line Loans pursuant to
this Section 2.05(c) shall be absolute and unconditional and shall not
be affected by any circumstance, including (A) any set-off,
counterclaim, recoupment, defense or other right which such Lender may
have against the Swing Line Lender, the Borrower or any other Person for
any reason whatsoever, (B) the occurrence or continuance of a Default,
or (C) any other occurrence, event or condition, whether or not similar
to any of the foregoing; provided, however, that each Lender's
obligation to make Committed Loans pursuant to this Section 2.05(c) is
subject to the conditions set forth in Section 4.02. No such funding of
risk participations shall relieve or otherwise impair the obligation of
the Borrower to repay Swing Line Loans, together with interest as
provided herein.
32
(d) Repayment of Participations.
(i) At any time after any Lender has purchased and funded a
risk participation in a Swing Line Loan, if the Swing Line Lender
receives any payment on account of such Swing Line Loan, the Swing Line
Lender will distribute to such Lender its Pro Rata Share of such payment
(appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Lender's risk participation was
funded) in the same funds as those received by the Swing Line Lender.
(ii) If any payment received by the Swing Line Lender in
respect of principal or interest on any Swing Line Loan is required to
be returned by the Swing Line Lender under any of the circumstances
described in Section 10.06 (including pursuant to any settlement entered
into by the Swing Line Lender in its discretion), each Lender shall pay
to the Swing Line Lender its Pro Rata Share thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand
to the date such amount is returned, at a rate per annum equal to the
Federal Funds Rate. The Administrative Agent will make such demand upon
the request of the Swing Line Lender.
(e) Interest for Account of Swing Line Lender. The Swing Line Lender
shall be responsible for invoicing the Borrower for interest on the Swing Line
Loans. Until each Lender funds its Base Rate Committed Loan or risk
participation pursuant to this Section 2.05 to refinance such Lender's Pro Rata
Share of any Swing Line Loan, interest in respect of such Pro Rata Share shall
be solely for the account of the Swing Line Lender.
(f) Payments Directly to Swing Line Lender. The Borrower shall make
all payments of principal and interest in respect of the Swing Line Loans
directly to the Swing Line Lender.
2.06 Prepayments.
(a) The Borrower may, upon notice to the Administrative Agent, at
any time or from time to time voluntarily prepay Committed Loans in whole or in
part without premium or penalty; provided that (i) such notice must be received
by the Administrative Agent not later than 10 a.m. (A) three Business Days prior
to any date of prepayment of Eurodollar Rate Committed Loans and (B) on the date
of prepayment of Base Rate Committed Loans; (ii) any prepayment of Eurodollar
Rate Committed Loans shall be in a principal amount of $2,000,000 or a whole
multiple of $500,000 in excess thereof; and (iii) any prepayment of Base Rate
Committed Loans shall be in a principal amount of $500,000 or a whole multiple
of $100,000 in excess thereof or, in each case, if less, the entire principal
amount thereof then outstanding. Each such notice shall specify the date and
amount of such prepayment and the Type(s) of Committed Loans to be prepaid. The
Administrative Agent will promptly notify each Lender of its receipt of each
such notice, and of the amount of such Lender's Pro Rata Share of such
prepayment. If such notice is given by the Borrower, the Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein. Any prepayment of a Eurodollar Rate Loan
shall be accompanied by all accrued interest thereon, together with any
additional amounts required pursuant to Section 3.05. Each such prepayment shall
be applied to the Committed Loans of the Lenders in accordance with their
respective Pro Rata Shares.
(b) No Bid Loan may be prepaid without the prior consent of the
applicable Bid Loan Lender.
(c) The Borrower may, upon notice to the Swing Line Lender (with a
copy to the Administrative Agent), at any time or from time to time, voluntarily
prepay Swing Line Loans in whole
33
or in part without premium or penalty; provided that (i) such notice must be
received by the Swing Line Lender and the Administrative Agent not later than 10
a.m. on the date of the prepayment, and (ii) any such prepayment shall be in a
minimum principal amount of $500,000. Each such notice shall specify the date
and amount of such prepayment. If such notice is given by the Borrower, the
Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein.
(d) If for any reason the Total Outstandings at any time exceed the
Aggregate Commitments then in effect, the Borrower shall immediately prepay
Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal
to such excess; provided, however, that the Borrower shall not be required to
Cash Collateralize the L/C Obligations pursuant to this Section 2.06(d) unless
after the prepayment in full of the Committed Loans and Swing Line Loans the
Total Outstandings exceed the Aggregate Commitments then in effect.
2.07 Termination or Reduction of Commitments. The Borrower may, upon
notice to the Administrative Agent, terminate the Aggregate Commitments, or from
time to time permanently reduce the Aggregate Commitments; provided that (i) any
such notice shall be received by the Administrative Agent not later than 11 a.m.
five Business Days prior to the date of termination or reduction, (ii) any such
partial reduction shall be in an aggregate amount of $10,000,000 or any whole
multiple of $1,000,000 in excess thereof, (iii) the Borrower shall not terminate
or reduce the Aggregate Commitments if, after giving effect thereto and to any
concurrent prepayments hereunder, the Total Outstandings would exceed the
Aggregate Commitments, and (iv) if, after giving effect to any reduction of the
Aggregate Commitments, the Bid Loan Sublimit, the Letter of Credit Sublimit or
the Swing Line Sublimit exceeds the amount of the Aggregate Commitments, such
Sublimit shall be automatically reduced by the amount of such excess. The
Administrative Agent will promptly notify the Lenders of any such notice of
termination or reduction of the Aggregate Commitments. Any reduction of the
Aggregate Commitments shall be applied to the Commitment of each Lender
according to its Pro Rata Share. All fees set forth in the Fee Letter, all fees
set forth in subsections (i) and (j) of Section 2.04, and all fees set forth in
Section 2.10 accrued until the effective date of any termination of the
Aggregate Commitments shall be paid on the effective date of such termination.
2.08 Repayment of Loans.
(a) The Borrower shall repay to the Lenders on the Maturity Date the
aggregate principal amount of Committed Loans outstanding on such date.
(b) The Borrower shall repay each Bid Loan on the last day of the
Interest Period in respect thereof.
(c) The Borrower shall repay each Swing Line Loan on the earlier to
occur of (i) the date three Business Days after such Loan is made and (ii) the
Maturity Date.
2.09 Interest.
(a) Subject to the provisions of subsection (b) below, (i) each
Eurodollar Rate Committed Loan shall bear interest on the outstanding principal
amount thereof for each Interest Period at a rate per annum equal to the
Eurodollar Rate for such Interest Period plus the Applicable Rate; (ii) each
Base Rate Committed Loan shall bear interest on the outstanding principal amount
thereof from the applicable borrowing date at a rate per annum equal to the Base
Rate plus the Applicable Rate; (iii) each Bid Loan shall bear interest on the
outstanding principal amount thereof for the Interest Period therefor at a rate
per annum equal to the Eurodollar Rate for such Interest Period plus (or minus)
the Eurodollar Bid Margin, or
34
at the Absolute Rate for such Interest Period, as the case may be; and (iv) each
Swing Line Loan shall bear interest on the outstanding principal amount thereof
from the applicable borrowing date at a rate per annum equal to the Base Rate
plus the Applicable Rate.
(b) If any amount payable by the Borrower under any Loan Document is
not paid when due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws. Furthermore,
while any Event of Default exists, the Borrower shall pay interest on the
principal amount of all outstanding Obligations hereunder at a fluctuating
interest rate per annum at all times equal to the Default Rate to the fullest
extent permitted by applicable Laws. Accrued and unpaid interest on past due
amounts (including interest on past due interest) shall be due and payable upon
demand.
(c) Interest on each Loan shall be due and payable in arrears on
each Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
2.10 Fees. In addition to certain fees described in subsections (i)
and (j) of Section 2.04:
(a) Facility Fee. The Borrower shall pay to the Administrative Agent
for the account of each Lender in accordance with its Pro Rata Share, a facility
fee equal to the Applicable Rate times the actual daily amount of the Aggregate
Commitments (or, if the Aggregate Commitments have terminated, on the
Outstanding Amount of all Committed Loans, Swing Line Loans and L/C
Obligations), regardless of usage. The facility fee shall accrue at all times
during the Availability Period (and thereafter so long as any Committed Loans,
Swing Line Loans or L/C Obligations remain outstanding), including at any time
during which one or more of the conditions in Article IV is not met, and shall
be due and payable quarterly in arrears on the last Business Day of each March,
June, September and December, commencing with the first such date to occur after
the Amendment Closing Date, and on the Maturity Date (and, if applicable,
thereafter on demand). The facility fee shall be calculated quarterly in
arrears, and if there is any change in the Applicable Rate during any quarter,
the actual daily amount shall be computed and multiplied by the Applicable Rate
separately for each period during such quarter that such Applicable Rate was in
effect.
(b) Other Fees. (i) The Borrower shall pay to the Arranger and the
Administrative Agent for their own respective accounts fees in the amounts and
at the times specified in the Fee Letter. Such fees shall be fully earned when
paid and shall not be refundable for any reason whatsoever.
(ii) The Borrower shall pay to the Lenders such fees as shall have
been separately agreed upon in writing in the amounts and at the times so
specified. Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever.
2.11 Computation of Interest and Fees. All computations of interest
for Base Rate Loans when the Base Rate is determined by Bank of America's "prime
rate" shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest shall
be made on the basis of a 360-day year and actual days elapsed (which results in
more fees or interest, as applicable, being paid than if computed on the basis
of a 365-day year). Interest shall accrue on each Loan for the day on which the
Loan is made, and shall not accrue on a Loan, or any portion thereof, for the
day on which the Loan or such portion is paid, provided that any Loan that is
repaid on the same day on which it is made shall, subject to Section 2.13(a),
bear interest for one day.
35
2.12 Evidence of Debt.
(a) The Credit Extensions made by each Lender shall be evidenced by
one or more accounts or records maintained by such Lender and by the
Administrative Agent in the ordinary course of business. The accounts or records
maintained by the Administrative Agent and each Lender shall be conclusive
absent manifest error of the amount of the Credit Extensions made by the Lenders
to the Borrower and the interest and payments thereon. Any failure to so record
or any error in doing so shall not, however, limit or otherwise affect the
obligation of the Borrower hereunder to pay any amount owing with respect to the
Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any
Lender made through the Administrative Agent, the Borrower shall execute and
deliver to such Lender (through the Administrative Agent) a Note, which shall
evidence such Lender's Loans in addition to such accounts or records. Each
Lender may attach schedules to its Note and endorse thereon the date, Type (if
applicable), amount and maturity of its Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to in
subsection (a), each Lender and the Administrative Agent shall maintain in
accordance with its usual practice accounts or records evidencing the purchases
and sales by such Lender of participations in Letters of Credit and Swing Line
Loans. In the event of any conflict between the accounts and records maintained
by the Administrative Agent and the accounts and records of any Lender in
respect of such matters, the accounts and records of the Administrative Agent
shall control in the absence of manifest error.
2.13 Payments Generally.
(a) All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent's
Office in Dollars and in immediately available funds not later than 11:00 a.m.
on the date specified herein. The Administrative Agent will promptly distribute
to each Lender its Pro Rata Share (or other applicable share as provided herein)
of such payment in like funds as received by wire transfer to such Lender's
Lending Office. All payments received by the Administrative Agent after 11 a.m.
shall be deemed received on the next succeeding Business Day and any applicable
interest or fee shall continue to accrue.
(b) If any payment to be made by the Borrower shall come due on a
day other than a Business Day, payment shall be made on the next following
Business Day, and such extension of time shall be reflected in computing
interest or fees, as the case may be.
(c) Unless the Borrower or any Lender has notified the
Administrative Agent, prior to the date any payment is required to be made by it
to the Administrative Agent hereunder, that the Borrower or such Lender, as the
case may be, will not make such payment, the Administrative Agent may assume
that the Borrower or such Lender, as the case may be, has timely made such
payment and may (but shall not be so required to), in reliance thereon, make
available a corresponding amount to the Person entitled thereto. If and to the
extent that such payment was not in fact made to the Administrative Agent in
immediately available funds, then:
(i) if the Borrower failed to make such payment, each Lender
shall forthwith on demand repay to the Administrative Agent the portion
of such assumed payment that was made available to such Lender in
immediately available funds, together with interest thereon in respect
of each day from and including the date such amount was made available
by the Administrative
36
Agent to such Lender to the date such amount is repaid to the
Administrative Agent in immediately available funds at the Federal Funds
Rate from time to time in effect; and
(ii) if any Lender failed to make such payment, such Lender
shall forthwith on demand pay to the Administrative Agent the amount
thereof in immediately available funds, together with interest thereon
for the period from the date such amount was made available by the
Administrative Agent to the Borrower to the date such amount is
recovered by the Administrative Agent (the "Compensation Period") at a
rate per annum equal to the Federal Funds Rate from time to time in
effect. If such Lender pays such amount to the Administrative Agent,
then such amount shall constitute such Lender's Committed Loan or Bid
Loan, as the case may be, included in the applicable Borrowing. If such
Lender does not pay such amount forthwith upon the Administrative
Agent's demand therefor, the Administrative Agent may make a demand
therefor upon the Borrower, and the Borrower shall pay such amount to
the Administrative Agent, together with interest thereon for the
Compensation Period at a rate per annum equal to the rate of interest
applicable to the applicable Borrowing. Nothing herein shall be deemed
to relieve any Lender from its obligation to fulfill its Commitment or
to prejudice any rights which the Administrative Agent or the Borrower
may have against any Lender as a result of any default by such Lender
hereunder.
A notice of the Administrative Agent to any Lender or the Borrower with
respect to any amount owing under this subsection (c) shall be conclusive,
absent manifest error.
(d) If any Lender makes available to the Administrative Agent funds
for any Loan to be made by such Lender as provided in the foregoing provisions
of this Article II, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions to the applicable Credit Extension
set forth in Article IV are not satisfied or waived in accordance with the terms
hereof, the Administrative Agent shall return such funds (in like funds as
received from such Lender) to such Lender, without interest.
(e) The obligations of the Lenders hereunder to make Committed Loans
and to fund participations in Letters of Credit and Swing Line Loans are several
and not joint. The failure of any Lender to make any Committed Loan or to fund
any such participation on any date required hereunder shall not relieve any
other Lender of its corresponding obligation to do so on such date, and no
Lender shall be responsible for the failure of any other Lender to so make its
Committed Loan or purchase its participation.
(f) Nothing herein shall be deemed to obligate any Lender to obtain
the funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.
2.14 Sharing of Payments. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Committed Loans made
by it, or the participations in L/C Obligations or in Swing Line Loans held by
it, any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder) thereof, such Lender shall immediately (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Lenders such
participations in the Committed Loans made by them and/or such subparticipations
in the participations in L/C Obligations or Swing Line Loans held by them, as
the case may be, as shall be necessary to cause such purchasing Lender to share
the excess payment in respect of such Committed Loans or such participations, as
the case may be, pro rata with each of them; provided, however, that if all or
any portion of such excess payment is thereafter recovered from the purchasing
Lender under any of the circumstances described in Section 10.06 (including
pursuant to any settlement
37
entered into by the purchasing Lender in its discretion), such purchase shall to
that extent be rescinded and each other Lender shall repay to the purchasing
Lender the purchase price paid therefor, together with an amount equal to such
paying Lender's ratable share (according to the proportion of (i) the amount of
such paying Lender's required repayment to (ii) the total amount so recovered
from the purchasing Lender) of any interest or other amount paid or payable by
the purchasing Lender in respect of the total amount so recovered, without
further interest thereon. The Borrower agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to Section 10.09) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.
The Administrative Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under this
Section and will in each case notify the Lenders following any such purchases or
repayments. Each Lender that purchases a participation pursuant to this Section
shall from and after such purchase have the right to give all notices, requests,
demands, directions and other communications under this Agreement with respect
to the portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased.
2.15 Extension of Maturity Date. The Borrower shall have the right to
exercise one option to extend the Maturity Date then in effect (such existing
Maturity Date being the "Extension Effective Date"), for an additional term of
twelve months, provided that each of the following conditions precedent are met:
(a) the Borrower delivers to the Administrative Agent (which shall
promptly notify the Lenders) a request for such extension (an "Extension
Request") not later than 60 days prior to the Extension Effective Date;
(b) at the time that the Borrower delivers the Extension Request to
the Administrative Agent and as of the Extension Effective Date, no Default or
Event of Default has occurred and is continuing;
(c) the Borrower has a Debt Rating of not less than Baa2 from
▇▇▇▇▇'▇ and BBB from S&P;
(d) on the Extension Effective Date, the Borrower pays to the
Administrative Agent, for the account of each Lender in accordance with its Pro
Rata Share, a extension fee (the "Extension Fee") in an amount equal to 0.25%
times the Aggregate Commitment outstanding as of the date of the Extension
Request;
(e) the Borrower delivers to the Administrative Agent a certificate
of each Loan Party, dated as of the Extension Effective Date (in sufficient
copies for each Lender), signed by a Responsible Officer of such Loan Party (i)
certifying and attaching the resolutions adopted by such Loan Party approving or
consenting to such extension; and (ii) in the case of the Borrower, certifying
that, before and after giving effect to such extension, (A) the representations
and warranties contained in Article V and the other Loan Documents are true and
correct on and as of the Extension Effective Date, except to the extent that
such representations and warranties specifically refer to an earlier date, in
which case they are true and correct as of such earlier date, and except that
for purposes of this Section 2.15, the representations and warranties contained
in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most
recent statements furnished pursuant to subsections (a) and (b), respectively,
of Section 6.01, (B) no Default or Event of Default exists, and (C) the Borrower
has a Debt Rating of not less than Baa2 from ▇▇▇▇▇'▇ and BBB from S&P. This
Section shall supersede any provisions in Section 2.14 or 10.01 to the contrary.
38
2.16 Increase in Commitments.
(a) Provided there exists no Default, upon notice to the
Administrative Agent (which shall promptly notify the Lenders), the Borrower may
from time to time, request an increase in the Aggregate Commitments by an amount
(for all such requests) not exceeding $100,000,000 (and provided that, in any
event, the Aggregate Commitments shall not exceed $450,000,000 at any time). At
the time of sending such notice, the Borrower (in consultation with the
Administrative Agent) shall specify the time period within which each Lender is
requested to respond (which shall in no event be less than ten Business Days
from the date of delivery of such notice to the Lenders). Each Lender shall
notify the Administrative Agent within such time period whether or not it agrees
to increase its Commitment and, if so, whether by an amount equal to, greater
than, or less than its Pro Rata Share of such requested increase. Any Lender not
responding within such time period shall be deemed to have declined to increase
its Commitment. The Administrative Agent shall notify the Borrower and each
Lender of the Lenders' responses to each request made hereunder. To achieve the
full amount of a requested increase, the Borrower may also invite additional
Eligible Assignees to become Lenders pursuant to a joinder agreement in form and
substance satisfactory to the Administrative Agent and its counsel. The
Borrower's ability to increase the Aggregate Commitments under this Section 2.16
shall be subject to syndication by the Arranger. Borrower shall execute and
deliver such amendments to the Loan Documents and other documents and
certificates, including, but not limited to a new Note in favor of
Administrative Agent and any additional Eligible Assignee, and shall pay such
additional upfront fees, arrangement fees and other fees, as may be required by
the Administrative Agent, the Lenders or such additional Eligible Assignees or
by financial market conditions to effect such increase.
(b) If the Aggregate Commitments are increased in accordance with
this Section, the Administrative Agent and the Borrower shall determine the
effective date (the "Increase Effective Date") and the final allocation of such
increase. The Administrative Agent shall promptly notify the Borrower and the
Lenders of the final allocation of such increase and the Increase Effective
Date. As a condition precedent to such increase, the Borrower shall deliver to
the Administrative Agent a certificate of each Loan Party dated as of the
Increase Effective Date (in sufficient copies for each Lender) signed by a
Responsible Officer of such Loan Party (i) certifying and attaching the
resolutions adopted by such Loan Party approving or consenting to such increase,
and (ii) in the case of the Borrower, certifying that, before and after giving
effect to such increase, (A) the representations and warranties contained in
Article V and the other Loan Documents are true and correct on and as of the
Extension Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date, and except that for purposes of this
Section 2.16, the representations and warranties contained in subsections (a)
and (b) of Section 5.05 shall be deemed to refer to the most recent statements
furnished pursuant to subsections (a) and (b), respectively, of Section 6.01,
and (B) no Default exists. The Borrower shall prepay any Committed Loans
outstanding on the Increase Effective Date (and pay any additional amounts
required pursuant to Section 3.05) to the extent necessary to keep the
outstanding Committed Loans ratable with any revised Pro Rata Shares arising
from any nonratable increase in the Commitments under this Section.
(c) This Section shall supersede any provisions in Sections 2.14 or
10.01 to the contrary.
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes.
(a) Any and all payments by the Borrower to or for the account of
the Administrative Agent or any Lender under any Loan Document shall be made
free and clear of and without deduction for any
39
and all present or future taxes, duties, levies, imposts, deductions,
assessments, fees, withholdings or similar charges, and all liabilities with
respect thereto, excluding, in the case of the Administrative Agent and each
Lender, taxes imposed on or measured by its overall net income, and franchise
taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the Laws of which the Administrative Agent
or such Lender, as the case may be, is organized or maintains a lending office
(all such non-excluded taxes, duties, levies, imposts, deductions, assessments,
fees, withholdings or similar charges, and liabilities being hereinafter
referred to as "Taxes"). If the Borrower shall be required by any Laws to deduct
any Taxes from or in respect of any sum payable under any Loan Document to the
Administrative Agent or any Lender, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section), each of the
Administrative Agent and such Lender receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions, (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with applicable
Laws, and (iv) within 30 days after the date of such payment, the Borrower shall
furnish to the Administrative Agent (which shall forward the same to such
Lender) the original or a certified copy of a receipt evidencing payment thereof
or, if such receipts are not obtainable, other evidence of such payments by the
Borrower reasonably satisfactory to the Lenders or Administrative Agent, as
applicable.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "Other Taxes").
(c) The Borrower agrees to indemnify the Administrative Agent and
each Lender for (i) the full amount of Taxes and Other Taxes (including any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section) paid by the Administrative Agent and such Lender, and (ii)
any liability (including additions to tax, penalties, interest and expenses)
arising therefrom or with respect thereto (other than any such liability
directly resulting from the gross negligence or willful misconduct of the
Administrative Agent or the Lenders), in each case whether or not such Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. Payment under this subsection (c) shall be made within
30 days after the date the Lender or the Administrative Agent makes a demand
therefor.
(d) The Borrower will not be required to pay any additional amounts
in respect of United States Federal income tax pursuant to Section 3.01(a) to
any Lender:
(i) if the obligation to pay such additional amounts arose
solely as a result of such Lender's failure to comply with its
obligation under Section 10.15; or
(ii) if, but only to the extent that, at the time such Lender
becomes a party to the Agreement such Lender was subject to United
States federal withholding taxes on amounts payable pursuant to the
terms of this Agreement (except to the extent that such Lender's
assignor (if any) was entitled, at the time of the assignment, to
receive additional amounts from the Borrower with respect to such
Taxes).
3.02 Illegality. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurodollar Rate Loans, or to determine or charge interest rates based upon the
Eurodollar Rate, then, on notice thereof by such Lender to the Borrower through
the Administrative
40
Agent, any obligation of such Lender to make or continue Eurodollar Rate Loans
or to convert Base Rate Committed Loans to Eurodollar Rate Committed Loans shall
be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on
the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans.
Upon any such prepayment or conversion, the Borrower shall also pay accrued
interest on the amount so prepaid or converted. Each Lender agrees to designate
a different Lending Office if such designation will avoid the need for such
notice and will not, in the good faith judgment of such Lender, otherwise be
materially disadvantageous to such Lender.
3.03 Inability to Determine Rates. If the Required Lenders determine
that for any reason adequate and reasonable means do not exist for determining
the Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Committed Loan, or that the Eurodollar Rate for any requested
Interest Period with respect to a proposed Eurodollar Rate Committed Loan does
not adequately and fairly reflect the cost to such Lenders of funding such Loan,
the Administrative Agent will promptly so notify the Borrower and each Lender.
Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate
Loans shall be suspended until the Administrative Agent (upon the instruction of
the Required Lenders) revokes such notice. Upon receipt of such notice, the
Borrower may revoke any pending request for a Borrowing of, conversion to or
continuation of Eurodollar Rate Committed Loans or, failing that, will be deemed
to have converted such request into a request for a Committed Borrowing of Base
Rate Loans in the amount specified therein.
3.04 Increased Cost and Reduced Return; Capital Adequacy; Reserves on
Eurodollar Rate Loans.
(a) If any Lender determines that as a result, after the date
hereof, of the introduction of or any change in or in the interpretation of any
Law, or such Lender's compliance therewith, there shall be any increase in the
cost to such Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Loans or (as the case may be) issuing or participating in
Letters of Credit, or a reduction in the amount received or receivable by such
Lender in connection with any of the foregoing (excluding for purposes of this
subsection (a) any such increased costs or reduction in amount resulting from
(i) Taxes or Other Taxes (as to which Section 3.01 shall govern), (ii) taxes
based on, or changes in the basis of, taxation of overall net income or overall
gross income by the United States or any foreign jurisdiction or any political
subdivision of either thereof under the Laws of which such Lender is organized
or has its Lending Office, and (iii) reserve requirements contemplated by
Section 3.04(c), then from time to time upon demand of such Lender (with a copy
of such demand to the Administrative Agent), the Borrower shall pay to such
Lender such additional amounts as will compensate such Lender for such increased
cost or reduction.
(b) If any Lender determines that the introduction of any Law
regarding capital adequacy or any change therein or in the interpretation
thereof, or compliance by such Lender (or its Lending Office) therewith, has the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of such Lender's
obligations hereunder (taking into consideration its policies with respect to
capital adequacy and such Lender's desired return on capital), then from time to
time upon demand of such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amounts as will compensate such Lender for such reduction.
41
(c) The Borrower shall pay to each Lender, as long as such Lender
shall be required to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency funds or deposits (currently known as
"Eurocurrency liabilities"), additional interest on the unpaid principal amount
of each Eurodollar Rate Loan equal to the actual costs of such reserves
allocated to such Loan by such Lender (as determined by such Lender in good
faith, which determination shall be conclusive), which shall be due and payable
on each date on which interest is payable on such Loan, provided the Borrower
shall have received at least 15 days' prior notice (with a copy to the
Administrative Agent) of such additional interest from such Lender. If a Lender
fails to give notice 15 days prior to the relevant Interest Payment Date, such
additional interest shall be due and payable 15 days from receipt of such
notice.
(d) Each Lender will notify the Borrower and the Administrative
Agent of any event of which it has knowledge which will entitle such Lender to
compensation pursuant to this Section 3.04 and, if requested by the Borrower,
will designate a different Lending Office if such designation will avoid the
need for, or reduce the amount of, such compensation and will not, in the good
faith judgment of such Lender, be otherwise materially disadvantageous to such
Lender. Notwithstanding the foregoing, the Borrower shall only be obligated to
compensate any Lender for any amount arising or accruing under subsections (a)
or (b) of this Section 3.04 during (i) any time or period commencing not more
than 90 days prior to the date on which such Lender notifies the Administrative
Agent and the Company that it proposes to demand such compensation; and (ii) any
time or period during which, because of the retroactive application of such
statute, regulation or other such basis, such Lender did not know that such
amount would arise or accrue.
3.05 Funding Losses. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan
other than a Base Rate Loan on a day other than the last day of the Interest
Period for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise);
(b) any failure by the Borrower (for a reason other than the failure
of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Borrower;
including any loss of anticipated profits (but not including any loss of the
margin for the period following prepayment) and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Committed Loan made by it at the Eurodollar Rate for such Loan by a
matching deposit or other borrowing in the London interbank eurodollar market
for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Committed Loan was in fact so funded.
3.06 Matters Applicable to all Requests for Compensation.
A certificate of the Administrative Agent or any Lender claiming
compensation under this Article III and setting forth the additional amount or
amounts to be paid to it hereunder shall be
42
conclusive in the absence of manifest error. In determining such amount, the
Administrative Agent or such Lender may use any reasonable averaging and
attribution methods.
3.07 Survival. All of the Borrower's obligations under this Article
III shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.
ARTICLE IV.
CONDITIONS PRECEDENT TO THE AMENDMENT AND RESTATEMENT OF THE
EXISTING AGREEMENT AND FURTHER CREDIT EXTENSIONS
4.01 Conditions of Effectiveness of this Agreement. The amendment and
restatement of the Existing Agreement and the effectiveness of this Agreement is
subject to satisfaction of the following conditions precedent:
(a) The Administrative Agent's receipt of the following, each of
which shall be originals or facsimiles (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Loan Party, each dated the Amendment Closing Date (or, in the case of
certificates of governmental officials, a recent date before the Amendment
Closing Date) and each in form and substance satisfactory to the Administrative
Agent and its legal counsel:
(i) executed counterparts of this Agreement and the
Guaranty, sufficient in number for distribution to the Administrative
Agent, each Lender and the Borrower;
(ii) a Note executed by the Borrower in favor of each Lender
requesting a Note;
(iii) such certificates of resolutions or other action,
incumbency certificates and/or other certificates of Responsible
Officers of each Loan Party as the Administrative Agent may require
evidencing the identity, authority and capacity of each Responsible
Officer thereof authorized to act as a Responsible Officer in connection
with this Agreement and the other Loan Documents to which such Loan
Party is a party;
(iv) such documents and certifications as the Administrative
Agent may reasonably require to evidence that each Loan Party is duly
organized or formed, and that each Loan Party is validly existing, in
good standing and qualified to engage in business in each jurisdiction
where its ownership, lease or operation of properties or the conduct of
its business requires such qualification;
(v) a favorable opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel to
the Loan Parties, and a favorable written opinion of the Borrower's
Maryland counsel that is reasonably acceptable to the Administrative
Agent, addressed to the Administrative Agent and each Lender, as to the
matters set forth in Exhibit G and such other matters concerning the
Loan Parties and the Loan Documents as the Required Lenders may
reasonably request;
(vi) a certificate of a Responsible Officer of each Loan
Party either (A) attaching copies of all consents, licenses and
approvals required in connection with the execution, delivery and
performance by such Loan Party and the validity against such Loan Party
of the Loan Documents to which it is a party, and such consents,
licenses and approvals shall be in full force and effect, or (B) stating
that no such consents, licenses or approvals are so required;
(vii) a certificate signed by a Responsible Officer of the
Borrower certifying (A) that the conditions specified in Sections
4.02(a) and (b) have been satisfied, (B) that there has been no
43
event or circumstance since the date of the Audited Financial Statements
that has had or could be reasonably expected to have, either
individually or in the aggregate, a Material Adverse Effect; (C) that
there is no litigation as described in Section 5.06, (D) that each
representation and warranty set forth in Article V is true and correct
as of the Amendment Closing Date; (E) the current Debt Ratings of the
Borrower; (F) that the Borrower is in compliance with each of its
financial covenants set forth in Sections 7.11 and 7.12 as of the last
day of the fiscal quarter of the Borrower most recently ended prior to
the Amendment Closing Date; and (G) a calculation of the Consolidated
Tangible Net Worth as of the last day of the fiscal quarter of the
Borrower most recently ended prior to the Amendment Closing Date;
(viii) proforma financial statements (including balance sheets,
income statements and cash flow statements) and covenant compliance
projections covering a three-year period from the date of the Amendment
Closing Date, shown on a quarterly basis for the first year and annually
thereafter; and
(ix) such other assurances, certificates, documents, consents
or opinions as the Administrative Agent, the L/C Issuer, the Swing Line
Lender or the Required Lenders reasonably may require.
(b) Any fees required to be paid on or before the Amendment Closing
Date shall have been paid.
(c) Unless waived by the Administrative Agent, the Borrower shall
have paid all Attorney Costs of the Administrative Agent to the extent invoiced
prior to or on the Amendment Closing Date, plus such additional amounts of
Attorney Costs as shall constitute its reasonable estimate of Attorney Costs
incurred or to be incurred by it through the closing proceedings (provided that
such estimate shall not thereafter preclude a final settling of accounts between
the Borrower and the Administrative Agent).
(d) Evidence that the full principal amount of and all accrued
interest and fees under the Existing Agreement will be paid with the initial
Credit Extension under this Agreement.
(d) The Arranger shall have received Commitments from Lenders of at
least $350,000,000, including the Commitment of Bank of America.
(e) The Amendment Closing Date shall have occurred on or before
April 4, 2003.
4.02 Conditions to all Credit Extensions. The obligation of each
Lender to honor any Request for Credit Extension (other than a Committed Loan
Notice requesting only a conversion of Committed Loans to the other Type, or a
continuation of Eurodollar Rate Committed Loans) is subject to the following
additional conditions precedent:
(a) The representations and warranties of each Loan Party contained
in Article V or any other Loan Document, or which are contained in any document
furnished at any time under or in connection herewith or therewith, shall be
true and correct on and as of the date of such Credit Extension, except to the
extent that such representations and warranties specifically refer to an earlier
date, in which case they shall be true and correct as of such earlier date, and
except that for purposes of this Section 4.02, the representations and
warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed
to refer to the most recent statements furnished pursuant to clauses (a) and
(b), respectively, of Section 6.01.
(b) No Default shall exist, or would result from such proposed
Credit Extension.
44
(c) The Administrative Agent and, if applicable, the L/C Issuer or
the Swing Line Lender shall have received a Request for Credit Extension in
accordance with the requirements hereof.
Each Request for Credit Extension (other than a Committed Loan Notice
requesting only a conversion of Committed Loans to the other Type or a
continuation of Eurodollar Rate Committed Loans) submitted by the Borrower shall
be deemed to be a representation and warranty that the conditions specified in
Sections 4.02(a) and (b) have been satisfied on and as of the date of the
applicable Credit Extension.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and the
Lenders that:
5.01 Existence, Qualification and Power; Compliance with Laws; Status
as a REIT. The Borrower is a Maryland corporation. BRE Property Investors is a
Delaware limited liability company. Each Loan Party and each Subsidiary (a) is
duly organized or formed, validly existing and in good standing under the Laws
of the jurisdiction of its incorporation or organization, (b) has all requisite
power and authority and all requisite governmental licenses, authorizations,
consents and approvals to (i) own its assets and carry on its business and (ii)
execute, deliver and perform its obligations under any Loan Documents to which
it is a party, (c) is duly qualified and is licensed and in good standing under
the Laws of each jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such qualification or
license, and (d) is in compliance with all Laws; except in each case referred to
in clause (b)(i), (c) or (d), to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect. The Borrower has been
organized in conformity with the requirements for qualification as a REIT under
the Code, and the Borrower's method of operation has enabled it, and its
proposed method of operation will continue to enable it since its formation on a
continuous basis, to meet the requirements for qualification and taxation as a
REIT under the Code. The Borrower has not engaged in any "prohibited
transactions" as defined in Section 857(b)(6)(iii) of the Code (or any successor
provision thereto). The shares of common stock of the Borrower are listed on the
New York Stock Exchange.
5.02 Authorization; No Contravention. The execution, delivery and
performance by each Loan Party of each Loan Document to which such Loan Party is
party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person's Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under, (i) any
Contractual Obligation to which such Person is a party or (ii) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Person or its property is subject; or (c) violate any Law.
5.03 Governmental Authorization; Other Consents. No approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document.
5.04 Binding Effect. This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and delivered
by each Loan Party that is party thereto. This Agreement constitutes, and each
other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that
is party thereto in accordance with its terms.
45
5.05 Financial Statements; No Material Adverse Effect.
(a) The Audited Financial Statements (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein, and except for financial performance measured
by Funds From Operations which is calculated in conformity with the National
Association of Real Estate Investment Trusts in its April 2002 White Paper on
Funds From Operations; (ii) fairly present the financial condition of the
Borrower and the Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material Indebtedness and other liabilities,
direct or contingent, of the Borrower and the Subsidiaries as of the date
thereof, including liabilities for taxes, material commitments and Indebtedness.
(b) The unaudited consolidated financial statements of the Borrower
and the Subsidiaries for the fiscal quarter ending on December 31, 2002, and the
related consolidated statements of income or operations for the fiscal quarter
ended on that date and the statement of cumulative cash flows for the portion of
the Borrower's fiscal year then ended (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein, and except for financial performance measured by Funds
From Operations which is calculated in conformity with the National Association
of Real Estate Investment Trusts in its April 2002 White Paper on Funds From
Operations, and (ii) fairly present the financial condition of the Borrower and
the Subsidiaries as of the date thereof and their results of operations for the
period covered thereby, subject, in the case of clauses (i) and (ii), to the
absence of footnotes and to normal year-end audit adjustments. Schedule 5.05
sets forth all material Indebtedness and other liabilities, direct or
contingent, of the Borrower and the Subsidiaries as of the date of such
financial statements, including liabilities for taxes, material commitments and
Indebtedness.
(c) Since the date of the Audited Financial Statements, there has
been no event or circumstance, either individually or in the aggregate, that has
had or could reasonably be expected to have a Material Adverse Effect.
5.06 Litigation. Except as set forth on Schedule 5.06, there are no
actions, suits, proceedings, claims or disputes pending or, to the knowledge of
the Borrower, threatened, at law, in equity, in arbitration or before any
Governmental Authority, by or against any Loan Party, any Subsidiary or any
Controlled Borrower Entity or against any of their properties or revenues that
(a) purport to affect or pertain to this Agreement or any other Loan Document,
or any of the transactions contemplated hereby, or (b) either individually or in
the aggregate could reasonably be expected to have a Material Adverse Effect.
5.07 No Default. None of the Loan Parties, nor any Subsidiary or
Controlled Borrower Entity, is in default under or with respect to any
Contractual Obligation that could, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. No Default has
occurred and is continuing or would result from the consummation of the
transactions contemplated by this Agreement or any other Loan Document.
5.08 Ownership of Property; Liens. Each of the Loan Parties, each
Subsidiary and each Controlled Borrower Entity has good record and marketable
title in fee simple to, or valid leasehold interests in, all real property
necessary or used in the ordinary conduct of its business, except for such
defects in title as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The properties of each of the Loan
Parties, each Subsidiary and each Controlled Borrower Entity are subject to no
Liens, other than Liens disclosed as of the Amendment Closing Date in
46
Schedule 5.08, and such other Liens after the Amendment Closing Date that have
been disclosed to the Administrative Agent and the Lenders in writing.
5.09 Environmental Compliance. Each of the Loan Parties, each
Subsidiary and each Controlled Borrower Entity conducts in the ordinary course
of business a review of the effect of existing Environmental Laws and claims
alleging potential liability or responsibility for violation of any
Environmental Law on their respective businesses, operations and properties, and
as a result thereof the Borrower has reasonably concluded that, except as
specifically disclosed in Schedule 5.09, such Environmental Laws and claims
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
5.10 Insurance. The properties of each of the Loan Parties, each
Subsidiary and each Controlled Borrower Entity are insured with financially
sound and reputable insurance companies not Affiliates of the Borrower, in such
amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar properties
in localities where the applicable owner operates.
5.11 Taxes. Each of the Loan Parties, each Subsidiary and each
Controlled Borrower Entity has filed all Federal, state and other material tax
returns and reports required to be filed, and have paid all Federal, state and
other material taxes, assessments, fees and other governmental charges levied or
imposed upon them or their properties, income or assets otherwise due and
payable, except those which are being contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves have been
provided in accordance with GAAP. There is no proposed tax assessment against
any Loan Party, any Subsidiary or any Controlled Borrower Entity that would, if
made, have a Material Adverse Effect.
5.12 ERISA Compliance.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal or state Laws. Each
Plan that is intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS or an application for such a letter
is currently being processed by the IRS with respect thereto and, to the
knowledge of the Borrower, nothing has occurred which would prevent, or cause
the loss of, such qualification. The Borrower and each ERISA Affiliate have made
all required contributions to each Pension Plan, and no application for a
funding waiver or an extension of any amortization period pursuant to Section
412 of the Code has been made with respect to any Pension Plan.
(b) There are no pending or, to the knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability in excess of the
lesser of (A) the Threshold Amount, or (B) 10% of the accrued pension benefit
obligation of the Pension Plan; (iii) neither the Borrower nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability under
Title IV of ERISA with respect to any Pension Plan (other than premiums due and
not delinquent under Section 4007 of ERISA); (iv) neither the Borrower nor any
ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and
no event has occurred which, with the giving of notice under Section 4219 of
ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with
respect to a Multiemployer Plan; and
47
(v) neither the Borrower nor any ERISA Affiliate has engaged in a transaction
that could be subject to Sections 4069 or 4212(c) of ERISA.
5.13 Subsidiaries. As of the Amendment Closing Date, (a) each of the
Subsidiaries of the Borrower and of BRE Property Investors is listed in Part (a)
of Schedule 5.13; (b) neither the Borrower nor BRE Property Investors has any
Investments in any other Person, other than those specifically disclosed in Part
(b) of Schedule 5.13; and (c) each of the Borrower Entities are disclosed in
Part (c) of Schedule 5.13; and (d) each of the Subsidiaries of the Borrower and
of BRE Property Investors that owns any Unencumbered Real Property is disclosed
in Part (d) of Schedule 5.13.
5.14 Margin Regulations; Investment Company Act; Public Utility
Holding Company Act.
(a) None of the Loan Parties is engaged or will engage, principally
or as one of its important activities, in the business of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the FRB), or
extending credit for the purpose of purchasing or carrying margin stock.
(b) None of the Loan Parties, any Person controlling any Loan Party,
or any Subsidiary (i) is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, or (ii) is or is required to be registered as an
"investment company" under the Investment Company Act of 1940.
5.15 Disclosure. The Borrower has disclosed to the Administrative
Agent and the Lenders all agreements, instruments and corporate or other
restrictions to which any Loan Party, any Subsidiary or any Controlled Borrower
Entity is subject, and all other matters known to it, that, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect. No report, financial statement, certificate or other information
furnished (whether in writing or orally) by or on behalf of any Loan Party to
the Administrative Agent or any Lender in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered hereunder
(as modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
5.16 Compliance with Laws. Each Loan Party, each Subsidiary and each
Controlled Borrower Entity is in compliance in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its properties, except in such instances in which (a)
such requirement of Law or order, writ, injunction or decree is being contested
in good faith by appropriate proceedings diligently conducted or (b) the failure
to comply therewith, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
5.17 Tax Shelter Regulations. The Borrower does not intend to treat
the Loans and/or Letters of Credit and related transactions as being a
"reportable transaction" (within the meaning of Treasury Regulation Section
1.6011-4). In the event the Borrower determines to take any action inconsistent
with such intention, it will promptly notify the Administrative Agent thereof.
If the Borrower so notifies the Administrative Agent, the Borrower acknowledges
that one or more of the Lenders may treat its Committed Loans, Bid Loans and/or
its interest in Swing Line Loans and/or Letters of Credit as part of a
transaction that is subject to Treasury Regulation Section 301.6112-1, and such
48
Lender or Lenders, as applicable, will maintain the lists and other records
required by such Treasury Regulation.
5.18 Intellectual Property; Licenses, Etc. Each Loan Party, each
Subsidiary and each Controlled Borrower Entity owns, or possess the right to
use, all of the trademarks, service marks, trade names, copyrights, patents,
patent rights, franchises, licenses and other intellectual property rights
(collectively, "IP Rights") that are reasonably necessary for the operation of
their respective businesses, without conflict with the rights of any other
Person. To the knowledge of the Borrower, no slogan or other advertising device,
product, process, method, substance, part or other material now employed, or now
contemplated to be employed, by any Loan Party, Subsidiary or Controlled
Borrower Entity infringes upon any rights held by any other Person. No claim or
litigation regarding any of the foregoing is pending or, to the best knowledge
of the Borrower, threatened, which, either individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding:
6.01 Financial Statements. The Borrower shall deliver to the
Administrative Agent, in form and detail satisfactory to the Administrative
Agent and the Required Lenders:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower, a consolidated balance sheet of the
Borrower and the Subsidiaries as at the end of such fiscal year, and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail and prepared in
accordance with GAAP (except for financial performance measured by Funds From
Operations which shall be calculated in conformity with the National Association
of Real Estate Investment Trusts in its April 2002 White Paper on Funds From
Operations), audited and accompanied by a report and opinion of an independent
certified public accountant of nationally recognized standing reasonably
acceptable to the Required Lenders, which report and opinion shall be prepared
in accordance with generally accepted auditing standards and shall not be
subject to any "going concern" or like qualification or exception or any
qualification or exception as to the scope of such audit; and
(b) as soon as available, but in any event within 45 days after the
end of each of the first three fiscal quarters of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower and the Subsidiaries as
at the end of such fiscal quarter, and the related consolidated statements of
income or operations for such fiscal quarter and for the portion of the
Borrower's fiscal year then ended and the statement of cumulative cash flows for
the portion of the Borrower's fiscal year then ended, setting forth in each case
in comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous fiscal year,
all in reasonable detail and certified by a Responsible Officer of the Borrower
as fairly presenting the financial condition, results of operations,
shareholders' equity and cash flows of the Borrower and the Subsidiaries in
accordance with GAAP (except for financial performance measured by Funds From
Operations which shall be calculated in conformity with the National Association
of Real Estate Investment Trusts in its April 2002 White Paper on Funds From
Operations), subject only to normal year-end audit adjustments and the absence
of footnotes.
49
As to any information contained in materials furnished pursuant to Section
6.02(d), the Borrower shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Borrower to furnish the information and
materials described in subsections (a) and (b) above at the times specified
therein.
6.02 Certificates; Other Information. The Borrower shall deliver to
the Administrative Agent, in form and detail satisfactory to the Administrative
Agent and the Required Lenders:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.01(a), a certificate of its independent certified
public accountants certifying such financial statements and stating that in
making the examination necessary therefor no knowledge was obtained of any
Default under the financial covenants set forth in Sections 7.06, 7.11 and 7.12,
or, if any such Default shall exist, stating the nature and status of such
event;
(b) concurrently with the delivery of the financial statements
referred to in Sections 6.01(a) and (b), a duly completed Compliance Certificate
signed by a Responsible Officer of the Borrower;
(c) promptly after any request by the Administrative Agent, copies
of any detailed audit reports, management letters or recommendations submitted
to the board of directors (or the audit committee of the board of directors) of
the Borrower or any Subsidiary by independent accountants in connection with the
accounts or books of the Borrower or any Subsidiary, or any audit of any of
them;
(d) promptly after the same are available, copies of each annual
report, proxy or financial statement or other report or communication sent to
the stockholders of the Borrower or the members of BRE Property Investors, and
copies of all annual, regular, periodic and special reports and registration
statements which the Borrower may file or be required to file with the SEC under
Section 13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise
required to be delivered to the Administrative Agent pursuant hereto;
(e) concurrently with the delivery of the financial statements
referred to in Section 6.01(a), Borrower's consolidated financial projections
for the then current fiscal year, including balance sheets and income
statements, in a format and with such detail as the Administrative Agent may
require and certified by a Responsible Officer of the Borrower;
(f) promptly after the Borrower has notified the Administrative
Agent of any intention by the Borrower to treat the Loans and/or Letters of
Credit and related transactions as being a "reportable transaction" (within the
meaning of Treasury Regulation Section 1.6011-4), a duly completed copy of IRS
Form 8886 or any successor form; and
(g) promptly, such additional information regarding the business,
financial or corporate affairs of any Loan Party, any Subsidiary or any
Controlled Borrower Entity, or compliance with the terms of the Loan Documents,
as the Administrative Agent may from time to time reasonably request.
Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date that the Borrower
(i) on which the Borrower posts such documents, or provides a link thereto on
the Borrower's website on the Internet at the website address listed on Schedule
10.02; or (ii) on which such documents are posted on the Borrower's behalf on
IntraLinks/IntraAgency or another relevant website, if any, to which each Lender
and the Administrative Agent have access (whether a commercial, third-party
website or whether
50
sponsored by the Administrative Agent); provided that the Borrower shall notify
(which may be by facsimile or electronic mail) the Administrative Agent of the
posting of any such documents and shall provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies in PDF format) of such
documents. Notwithstanding anything contained herein, in every instance the
Borrower shall be required to provide paper copies of the Compliance
Certificates required by Section 6.02(c) to the Administrative Agent. Except for
such Compliance Certificates, the Administrative Agent shall have no obligation
to request the delivery or to maintain copies of the documents referred to
above, and in any event shall have no responsibility to monitor compliance by
the Borrower with any such request for delivery.
6.03 Notices. The Borrower shall promptly notify the Administrative
Agent:
(a) of the occurrence of any Default;
(b) of any matter that has resulted or could reasonably be expected
to result in a Material Adverse Effect, including (i) breach or non-performance
of, or any default under, a Contractual Obligation of any Loan Party, Subsidiary
or Controlled Borrower Entity; (ii) any dispute, litigation, investigation,
proceeding or suspension between any Loan Party, Subsidiary or Controlled
Borrower Entity and any Governmental Authority; or (iii) the commencement of, or
any material development in, any litigation or proceeding affecting any Loan
Party, Subsidiary or Borrower Entity, including pursuant to any applicable
Environmental Laws;
(c) of the occurrence of any ERISA Event;
(d) of any material change in accounting policies or financial
reporting practices by any Loan Party;
(e) of any announcement by ▇▇▇▇▇'▇ or S&P of any change or possible
change in a Debt Rating; and
(f) of (i) the failure of the Borrower to qualify as a REIT under
the Code; (ii) any act by the Borrower causing its election to be taxed as a
real estate investment trust to be terminated, (iii) Borrower's knowledge of any
act causing the Borrower to be subject to the taxes imposed by Section 857(b)(6)
of the Code (or any successor provision thereto), or (iv) the failure of any
Subsidiary of the Borrower to maintain its status as a qualified REIT subsidiary
under the Code, if and to the extent required by applicable law.
Each notice pursuant to this Section shall be accompanied by a statement
of a Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken and proposes
to take with respect thereto. Each notice pursuant to Section 6.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.
6.04 Payment of Obligations. The Borrower shall, and shall cause each
other Loan Party and each Subsidiary to, pay and discharge as the same shall
become due and payable, all its obligations and liabilities, including (a) all
tax liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in accordance
with GAAP are being maintained by such Person (b) all lawful claims which, if
unpaid, would by law become a Lien upon its property; and (c) all Indebtedness,
as and when due and payable, but subject to any subordination provisions
contained in any instrument or agreement evidencing such Indebtedness.
51
6.05 Preservation of Existence, Etc. The Borrower shall, and shall
cause each other Loan Party and each Subsidiary to, (a) preserve, renew and
maintain in full force and effect its legal existence and good standing under
the Laws of the jurisdiction of its organization (except in a transaction
permitted by Section 7.04 or 7.05); (b) take all reasonable action to maintain
all rights, privileges, permits, licenses and franchises necessary or desirable
in the normal conduct of its business, except to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect; and (c)
preserve or renew all of its registered patents, trademarks, trade names and
service marks, the non-preservation of which could reasonably be expected to
have a Material Adverse Effect.
6.06 Maintenance of Properties. The Borrower shall, and shall cause
each other Loan Party and each Subsidiary to (a) maintain, preserve and protect
all of its material properties and equipment necessary in the operation of its
business in good working order and condition, ordinary wear and tear excepted;
and (b) make all necessary repairs thereto and replacements thereof except where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (c) use the standard of care typical in the industry in the
operation and maintenance of its facilities.
6.07 Maintenance of Insurance. The Borrower shall, and shall cause
each other Loan Party, each Subsidiary and each Controlled Borrower Entity to,
maintain with financially sound and reputable insurance companies not Affiliates
of the Borrower, insurance with respect to its properties and business against
loss or damage of the kinds customarily insured against by Persons engaged in
the same or similar business, of such types and in such amounts as are
customarily carried under similar circumstances by such other Persons. Upon the
Administrative Agent's request, the Borrower shall furnish to the Administrative
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.
6.08 Compliance with Laws. The Borrower shall, and shall cause each
other Loan Party, each Subsidiary and each Controlled Borrower Entity to, comply
in all material respects with the requirements of all Laws and all orders,
writs, injunctions and decrees applicable to it or to its business or property,
except in such instances in which (a) such requirement of Law or order, write,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted; or (b) the failure to comply therewith could not
reasonably be expected to have a Material Adverse Effect.
6.09 Books and Records. The Borrower shall, and shall cause each
other Loan Party and each Subsidiary to, (a) Maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied (except for financial performance measured by Funds From
Operations which shall be calculated in conformity with the National Association
of Real Estate Investment Trusts in its April 2002 White Paper on Funds From
Operations) shall be made of all financial transactions and matters involving
the assets and business of such Person; and (b) maintain such books of record
and account in material conformity with all applicable requirements of any
Governmental Authority having regulatory jurisdiction over such Person.
6.10 Inspection Rights. The Borrower shall, and shall cause each
other Loan Party, each Subsidiary and each Controlled Borrower Entity to, permit
representatives and independent contractors of the Administrative Agent and each
Lender to visit and inspect any of its properties, to examine its corporate,
financial and operating records, and make copies thereof or abstracts therefrom,
and to discuss its affairs, finances and accounts with its directors, officers,
and independent public accountants, at such reasonable times during normal
business hours and as often as may be reasonably desired, upon reasonable
advance notice; provided, however, that if no Event of Default exists, each
Lender shall conduct no more than one such inspection of such properties in any
fiscal year; and provided further, however, that when an Event of Default exists
the Administrative Agent or any Lender (or any of their respective
representatives or independent contractors) may do any of the foregoing at any
time during
52
normal business hours and without advance notice. The Borrower shall reimburse
the Administrative Agent for its expenses in connection with one such inspection
in any fiscal year; provided, however, that when an Event of Default exists, the
Borrower shall reimburse the Administrative Agent and each Lender for all of
their inspections conducted under this Section 6.10.
6.11 Use of Proceeds. The Borrower shall use the proceeds of the
Credit Extensions only for (a) the funding of costs directly related to the
acquisition of Real Property, or (b) general working capital and other corporate
purposes of Borrower, including (but subject to Section 7.12), development
expenditures, or (c) refinancing existing and future Indebtedness otherwise
permitted by this Agreement. 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.
6.12 Additional Guarantors.
(a) The Borrower shall notify the Administrative Agent at
the time that any Subsidiary becomes an owner of Unencumbered Real Property and
promptly thereafter (and in any event within 15 days), cause such Subsidiary (if
not already a Guarantor) to (i) become a Guarantor by executing and delivering
to the Administrative Agent a counterpart of the Guaranty or such other document
as the Administrative Agent shall deem appropriate for such purpose, and (ii)
deliver to the Administrative Agent documents of the types referred to in
clauses (iii) and (iv) of Section 4.01(a) and favorable opinions of counsel to
such Person (which shall cover, among other things, the legality, validity,
binding effect and enforceability of the documentation referred to in clause
(i)), all in form, content and scope reasonably satisfactory to the
Administrative Agent. Until the Guaranty and all items described in this Section
6.12 are delivered to the Administrative Agent, the Unencumbered Real Property
owned by such Person shall not be included for the purposes of calculating the
financial covenants set forth in Sections 7.11(d) and (e).
(b) Provided that the Borrower provides to the
Administrative Agent no less than ten Business Days advance written notice that
one of the following events will occur, and provided that the Borrower and
applicable Guarantor complies with this Section, the Administrative Agent, for
itself and on behalf of the Lenders, shall release any Guarantor (other than BRE
Property Investors) from its obligations under such Guarantor's Guaranty upon
the occurrence of any of the following events: (i) on the date that such
Guarantor incurs a Lien upon the Real Property owned by such Guarantor in a
transaction permitted under Section 7.01 hereof and as a consequence of such
transaction, such Guarantor will no longer own any Unencumbered Real Property;
or (ii) on the date that such Guarantor has Disposed of all of its Unencumbered
Real Property in one or more transactions permitted under Sections 7.04 and 7.05
hereof; or (iii) on the date that such Guarantor enters into a merger permitted
under Section 7.04(a) and, as a result thereof, such Guarantor is no longer a
Subsidiary; provided that in the case of each of the foregoing clauses (i),
(ii), or (iii), the Administrative Agent shall release such Guarantor from its
obligations under such Guarantor's Guaranty only if the Administrative Agent is
satisfied that: (A) no Default or Event of Default exists or will exist after
such encumbrance, Disposition or merger; and (B) the Borrower is in compliance
on a pro forma basis with the financial covenants set forth in Section 7.11
hereof and has provided evidence of such compliance to the Administrative Agent.
Upon the release of the Guaranty as provided in this Section, the Real Property
owned by such Guarantor or former Guarantor shall not be included for the
purposes of calculating the financial covenants set forth in Sections 7.11(d)
and (e).
(c) Notwithstanding the foregoing, the Administrative Agent and
Lenders acknowledge and agree that Pinnacle at Blue Ravine LLC and Pinnacle
Sonata LLC are scheduled to enter into a secured
53
loan transaction shortly after the Amendment Closing Date and that, as of the
Amendment Closing Date, such Subsidiaries will not enter into a Guaranty;
provided, however, that if such secured loan transaction does not occur on or
before May 31, 2003, or if either such Subsidiary thereafter becomes an owner of
Unencumbered Real Property, such Subsidiary shall execute a Guaranty and
otherwise comply with the provisions of Section 6.12(a).
ARTICLE VII.
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding:
7.01 Liens.
(a) The Borrower shall not, and shall not permit any Loan Party or
Subsidiary to, create, incur, assume or suffer to exist any Lien upon its
interest in any Guarantor.
(b) The Borrower shall not, and shall not permit any other Loan
Party to, create, incur, assume or suffer to exist any Lien upon any
Unencumbered Real Property included for the purposes of calculating the
financial covenants under Sections 7.11(d) and (e), other than (i) Liens for
taxes not yet due or which are being contested in good faith and by appropriate
proceedings diligently conducted, if adequate reserves with respect thereto are
maintained on the books of the applicable Person in accordance with GAAP; (ii)
carriers', warehousemen's, mechanics', materialmen's, repairmen's or other like
Liens arising in the ordinary course of business which are not overdue for a
period of more than 30 days or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person; and (iii)
easements, rights-of-way, restrictions and other similar encumbrances affecting
real property which, in the aggregate, are not substantial in amount, and which
do not in any case materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the business of the
applicable Person.
(c) The Borrower shall not, and shall not permit any other Loan
Party to, create, incur, assume or suffer to exist any Lien upon any
Unencumbered Real Property (other than any Lien described in clauses (i) - (iii)
of Section 7.01(b) hereof) except if, both before and after giving affect
thereof, (i) no Default or Event of Default exists; and (ii) the Borrower is in
compliance on a pro forma basis with the financial covenants set forth in
Section 7.11 hereof.
7.02 Investments. The Borrower shall not, and shall not permit any
Loan Party or Subsidiary to, permit the aggregate Investments of the Borrower
and its Subsidiaries in any Person that is not a Wholly-Owned Subsidiary to
exceed, in the aggregate, 25% of Total Asset Value as calculated as of the end
of the most recent fiscal quarter, excluding, for the purposes of the above
calculation, the Borrower's interest in BRE Property Investors.
7.03 Indebtedness. The Borrower shall not, and shall not permit any
Loan Party or Subsidiary to, directly or indirectly create, assume or otherwise
become liable with respect to any Indebtedness (other than Indebtedness owing to
the Borrower), except if, both before and after giving affect thereto, (a) no
Default or Event of Default exists; and (b) the Borrower is in compliance on a
pro forma basis with the financial covenants set forth in Section 7.11 hereof.
7.04 Fundamental Changes. The Borrower shall not, and shall not
permit any other Loan Party or any Subsidiary to, merge, dissolve, liquidate,
consolidate with or into another Person, or Dispose
54
of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to or
in favor of any Person, except that, so long as no Default exists or would
result therefrom:
(a) (i) any Guarantor, Subsidiary or other Person may merge with the
Borrower, provided that the Borrower shall be the continuing or surviving
Person, or (ii) any Guarantor, Subsidiary or other Person may merge with a
Guarantor provided that a Guarantor is the continuing or surviving Person, or
(iii) any Subsidiary (other than BRE Property Investors) may merge with any
Person, provided, in the cause of any of the foregoing clauses (i), (ii) or
(iii): (A) no Default or Event of Default exists or will exist after the merger;
and (B) the Borrower is and will be after the merger in compliance on a pro
forma basis with the financial covenants set forth in Section 7.11 hereof and
has provided evidence of such compliance prior to the merger; and (C) such
merger will not cause a Material Adverse Effect; and
(b) (i) any Subsidiary may Dispose of all or substantially all of
its assets (upon voluntary liquidation or otherwise) to the Borrower or to
another Subsidiary; provided that if the transferor in such a transaction is a
Guarantor, then the transferee must either be the Borrower or a Guarantor; (ii)
any Subsidiary (other than BRE Property Investors) may otherwise Dispose of all
or substantially all of its assets, if, both before and after giving effect
thereto, (A) no Default or Event of Default exists or will exist after the
Disposition; and (B) the Borrower is in compliance on a pro forma basis with the
financial covenants set forth in Section 7.11 hereof and has provided evidence
of such compliance prior to the Disposition; and (C) such Disposition will not
cause a Material Adverse Effect.
7.05 Dispositions. The Borrower shall not, and shall not permit any
other Loan Party or Subsidiary to, sell, lease, transfer, encumber or otherwise
Dispose of any Real Property except if, both before and after giving affect
thereof, (a) no Default or Event of Default exists; and (b) the Borrower is in
compliance on a pro forma basis with the financial covenants set forth in
Section 7.11 hereof.
7.06 Restricted Payments.
(a) Neither the Borrower nor BRE Property Investors shall declare or
make, or permit any of their respective Subsidiaries to declare or make, any
distribution of any properties, including cash, rights, obligations, or limited
liability company interests or units, on account of any membership interests or
stock, or purchase, redeem or otherwise acquire for value any of its limited
liability company interests or units or stock, now or hereafter outstanding to
any Person other than the Borrower, BRE Property Investors or a Wholly-Owned
Subsidiary, (all of the foregoing, collectively, "distributions"), except (i)
for the exchange of membership or partnership interests of the Subsidiaries of
the Borrower for common stock of the Borrower; (ii) that if no Default or Event
of Default exists, the Borrower, BRE Property Investors and all such
Subsidiaries may make distributions during any twelve (12) month period in an
amount in the aggregate which does not exceed the greater of 95% of Funds From
Operations for such period or such amount as may be necessary to qualify as a
REIT under the Code.
(b) During the continuance of any monetary Default or any other
Event of Default: (i) aggregate distributions shall not exceed the lesser of (A)
the aggregate amount permitted to be made during the continuance thereof under
clause (ii) above, and (B) the minimum amount that the Borrower must distribute
to its shareholders in order to qualify as a REIT under the Code; and (ii) the
Borrower shall not effect any repurchases of its common or preferred stock.
7.07 Change in Nature of Business. The Borrower shall not, and shall
not permit any other Loan Party or Subsidiary to, make any change in the nature
of the business as conducted and as proposed to be conducted as of the date
hereof; provided, however, that the foregoing shall not restrict its development
of related lines of business which are complimentary to the existing core
multifamily
55
ownership and rental operations and such other changes as are necessary to
comply with applicable laws and the Code, and to enable the Borrower to qualify
as a REIT under the Code.
7.08 Transactions with Affiliates. The Borrower shall not, and shall
not permit any other Loan Party or Subsidiary to, enter into any transaction of
any kind with any Affiliate of the Borrower, whether or not in the ordinary
course of business, other than on fair and reasonable terms substantially as
favorable to such Person as would be obtainable by such Person at the time in a
comparable arm's length transaction with a Person other than an Affiliate.
7.09 Burdensome Agreements. The Borrower shall not, and shall not
permit any other Loan Party or Subsidiary to, enter into any Contractual
Obligation (other than this Agreement or any other Loan Document) that limits
the ability (a) of any Subsidiary to make dividends and distributions to the
Borrower or any other Loan Party or to otherwise transfer property to the
Borrower or any other Loan Party, (b) of any Subsidiary that is an owner of
Unencumbered Real Property to Guarantee the Indebtedness of the Borrower;
provided, however, that the partnership or operating agreement of a Down REIT
Subsidiary may contain Contractual Obligations limiting the payment of dividends
or distributions to the Borrower until preferred distributions are made to the
limited partners or members of such Down REIT Subsidiary that have contributed
Real Property in exchange for their partnership or membership interests.
7.10 Use of Proceeds. The Borrower shall not use the proceeds of any
Credit Extension, whether directly or indirectly, and whether immediately,
incidentally or ultimately, to purchase or carry margin stock (within the
meaning of Regulation U of the FRB) or to extend credit to others for the
purpose of purchasing or carrying margin stock or to refund indebtedness
originally incurred for such purpose.
7.11 Financial Covenants. Each of the following financial
requirements shall be calculated as of the last day of each fiscal quarter, but
shall be satisfied at all times, provided, however, that for the purposes of
calculating the financial covenants under this Section 7.11, the financial
results of DRA Venture, and the Borrower's Investment in DRA Venture, will be
excluded:
(a) Minimum Consolidated Tangible Net Worth. The Borrower
shall not permit Consolidated Tangible Net Worth at any time to be less than the
sum of (i) $754,441,200; plus (ii) 85% of Net Offering Proceeds received after
the Amendment Closing Date.
(b) Maximum Leverage. The Borrower shall not permit the
ratio of Consolidated Total Liabilities to Total Asset Value as of the end of
any fiscal quarter of Borrower to exceed 0.55:1.
(c) Maximum Secured Indebtedness. The Borrower shall not
permit the ratio of (i) Secured Indebtedness to (ii) Total Asset Value as of the
end of any fiscal quarter of Borrower to exceed 0.30:1.
(d) Maximum Unsecured Leverage. The Borrower shall not
permit the ratio of (i) Unencumbered Real Property Value to (ii) total
outstandings under Unsecured Indebtedness as of the end of any fiscal quarter of
Borrower to be less than 1.75:1.
(e) Minimum Unencumbered Interest Coverage. The Borrower
shall not permit the ratio of (i) Unencumbered Real Property Adjusted NOI to
(ii) Consolidated Interest Expense on Unsecured Indebtedness as of the end of
any fiscal quarter of Borrower to be less than 1.75:1.
56
(f) Minimum Fixed Charge Coverage. The Borrower shall not
permit the ratio of Consolidated Adjusted EBITDA to Consolidated Fixed Charges
as of the end of any fiscal quarter of Borrower to be less than 1.75:1.
7.12 Development. The Borrower shall not permit the sum of (a) the
total acquisition and development cost incurred to date, plus the total cost
required to complete, all Real Property under Development by Borrower and its
Subsidiaries, plus (b) the Borrower's pro rata share of the total cost incurred
to date, plus the total cost required to complete, all Real Property under
Development by any Borrower Entity, to exceed 15% of Total Asset Value.
7.13 Fundamental Changes and REIT Covenants.
(a) Except for any such amendment that is required under any
requirement of law imposed by any Governmental Authority or in order for the
Borrower to qualify as a REIT under the Code, the Borrower shall not, and shall
not permit any other Loan Party or any Subsidiary, to amend its Organizational
Documents, except in each case (i) upon at least ten Business Days' prior
written notice to the Administrative Agent, and (ii) if the Administrative Agent
notifies the Borrower within such ten-Business Day period that such amendment
is, in Administrative Agent's reasonable judgment, a material amendment, with
the prior written consent of the Required Lenders.
(b) The Borrower shall not fail to comply in all material
respects with all rules and regulations of the Securities Exchange Commission
and shall not fail to file all reports required by the Securities Exchange
Commission relating to the Borrower's publicly-held securities.
(c) The Borrower shall not cease to have its common stock
listed on the New York Stock Exchange, the American Stock Exchange, or the
Nasdaq Stock Exchange.
(c) The Borrower shall not cease to qualify as a REIT under
the Code.
(d) At no time shall BRE Property Investors be taxed as a
corporation under the Code.
(e) The Borrower shall not cease to own the majority of the
outstanding entity interests in, and serve as the managing member of, BRE
Property Investors.
(f) The Loan Parties shall not cease to own the majority of
the outstanding stock, membership interests or other entity interests in, each
Guarantor and each Subsidiary and, with respect to any Guarantor or Subsidiary
that is not a corporation (other than BRE Property Investors), the Loan Parties
shall not cease to serve as the managing member or managing partner of, each
such Guarantor and Subsidiary; provided, however, that notwithstanding the
foregoing, a Loan Party may make a Disposition not otherwise prohibited under
this Agreement that results in such Loan Party ceasing to own the majority of
the outstanding stock, membership interests or other entity interests in any
Guarantor or Subsidiary, with the exception of BRE Property Investors, or which
may result in such Loan Party ceasing to serve as the managing member or
managing partner of, such Guarantor and Subsidiary, with the exception of BRE
Property Investors, as long as (i) no Default or Event of Default exists or will
exist after such Disposition; and (ii) the Borrower is and will be after such
Disposition in compliance on a pro forma basis with the financial covenants set
forth in Section 7.11 hereof and has provided evidence of such compliance prior
to the occurrence of such Disposition, and (iii) such Disposition will not cause
a Material Adverse Effect.
57
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default. Any of the following shall constitute an
Event of Default:
(a) Non-Payment. Any Loan Party fails to pay (i) when and as
required to be paid herein, any amount of principal of any Loan or any L/C
Obligation, or (ii) within three days after the same becomes due, any interest
on any Loan or on any L/C Obligation, or any commitment facility or other fee
due hereunder, or (iii) within five days after the same becomes due, any other
amount payable hereunder or under any other Loan Document; or
(b) Specific Covenants. The Borrower fails to perform or observe any
term, covenant or agreement contained in any of Section 6.01, 6.02, 6.03, 6.05,
6.10, 6.11 or 6.12 or Article VII; or
(c) Other Defaults. Any Loan Party fails to perform or observe any
other covenant or agreement (not specified in subsection (a) or (b) above)
contained in any Loan Document on its part to be performed or observed and such
failure continues for 30 days; or
(d) Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of any
Loan Party herein, in any other Loan Document, or in any document delivered in
connection herewith or therewith shall be incorrect or misleading in any
material respect when made or deemed made; or
(e) Cross-Default. (i) Any Loan Party or any Subsidiary (A) fails to
make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Swap Contracts) having
an aggregate principal amount (including undrawn committed or available amounts
and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than the Threshold Amount, or (B) fails to observe
or perform any other agreement or condition relating to any such Indebtedness or
Guarantee or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, the effect of which default or
other event is to cause, or to permit the holder or holders of such Indebtedness
or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to be demanded or to become
due or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded; or (ii)
there occurs under any Swap Contract an Early Termination Date (as defined in
such Swap Contract) resulting from (A) any event of default under such Swap
Contract as to which the any Loan Party or any Subsidiary is the Defaulting
Party (as defined in such Swap Contract) or (B) any Termination Event (as so
defined) under such Swap Contract as to which any Loan Party or any Subsidiary
is an Affected Party (as so defined) and, in either event, the Swap Termination
Value owed by any Loan Party or any Subsidiary as a result thereof is greater
than the Threshold Amount; or
(f) Insolvency Proceedings, Etc. Any Loan Party or any Subsidiary
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged
or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any
58
material part of its property is instituted without the consent of such Person
and continues undismissed or unstayed for 60 calendar days, or an order for
relief is entered in any such proceeding; or
(g) Inability to Pay Debts; Attachment. (i) Any Loan Party or any
Subsidiary becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due, or (ii) any writ or warrant of attachment
or execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within 30 days after its issue or levy; or
(h) Judgments. There is entered against (i) any Loan Party, (ii) any
Subsidiary, or (iii) any Controlled Borrower Entity that is a partnership or
joint venture (other than a joint venture that is itself a corporation or
limited liability company) in which any Loan Party or Subsidiary is a general
partner or joint venturer: (A) a final judgment or order for the payment of
money in an aggregate amount exceeding the Threshold Amount (to the extent not
covered by independent third-party insurance as to which the insurer does not
dispute coverage), or (B) any one or more non-monetary final judgments that
have, or could reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect and, in either case, (1) enforcement proceedings are
commenced by any creditor upon such judgment or order, or (2) there is a period
of 10 consecutive days during which a stay of enforcement of such judgment, by
reason of a pending appeal or otherwise, is not in effect; or
(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan
or Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold
Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after
the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or
(j) Invalidity of Loan Documents. Any Loan Document, at any time
after its execution and delivery and for any reason other than as expressly
permitted hereunder or satisfaction in full of all the Obligations, ceases to be
in full force and effect; or any Loan Party contests in any manner the validity
or enforceability of any Loan Document; or any Loan Party denies that it has any
or further liability or obligation under any Loan Document, or purports to
revoke, terminate or rescind any Loan Document; or
(k) Change of Control. There occurs any Change of Control with
respect to the Borrower, or any Change of Control not otherwise permitted by the
terms of this Agreement with respect to BRE Property Investors or any other Loan
Party.
8.02 Remedies Upon Event of Default. If any Event of Default occurs
and is continuing, the Administrative Agent shall, at the request of, or may,
with the consent of, the Required Lenders, take any or all of the following
actions:
(a) declare the commitment of each Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions to be terminated,
whereupon such commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower;
59
(c) require that the Borrower Cash Collateralize the L/C Obligations
(in an amount equal to the then Outstanding Amount thereof); and
(d) exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or applicable
law;
provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrower to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender.
8.03 Application of Funds. After the exercise of remedies provided
for in Section 8.02 (or after the Loans have automatically become immediately
due and payable and the L/C Obligations have automatically been required to be
Cash Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including Attorney Costs and amounts
payable under Article III) payable to the Administrative Agent in its capacity
as such;
Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including Attorney Costs and amounts payable under Article III),
ratably among them in proportion to the amounts described in this clause Second
payable to them;
Third, to payment of that portion of the Obligations constituting
accrued and unpaid interest on the Loans and L/C Borrowings, ratably among the
Lenders in proportion to the respective amounts described in this clause Third
payable to them;
Fourth, to payment of that portion of the Obligations constituting
unpaid principal of the Loans and L/C Borrowings, ratably among the Lenders in
proportion to the respective amounts described in this clause Fourth held by
them;
Fifth, to the Administrative Agent for the account of the L/C Issuer, to
Cash Collateralize that portion of L/C Obligations comprised of the aggregate
undrawn amount of Letters of Credit; and
Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Subject to Section 2.04(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.
60
ARTICLE IX.
ADMINISTRATIVE AGENT
9.01 Appointment and Authorization of Administrative Agent.
(a) Each Lender hereby irrevocably appoints, designates and
authorizes the Administrative 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. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" herein and in the other Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.
(b) The L/C Issuer shall act on behalf of the Lenders with respect
to any Letters of Credit issued by it and the documents associated therewith,
and the L/C Issuer shall have all of the benefits and immunities (i) provided to
the Administrative Agent in this Article IX with respect to any acts taken or
omissions suffered by the L/C Issuer in connection with Letters of Credit issued
by it or proposed to be issued by it and the applications and agreements for
letters of credit pertaining to such Letters of Credit as fully as if the term
"Administrative Agent" as used in this Article IX and in the definition of
"Agent-Related Person" included the L/C Issuer with respect to such acts or
omissions, and (ii) as additionally provided herein with respect to the L/C
Issuer.
9.02 Delegation of Duties. The Administrative Agent may execute any
of its duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel and other consultants or experts concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects in the
absence of gross negligence or willful misconduct.
9.03 Liability of Administrative Agent. No Agent-Related Person shall
(a) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct in connection with its duties expressly set forth herein), or (b) be
responsible in any manner to any Lender or participant for any recital,
statement, representation or warranty made by any Loan Party or any officer
thereof, contained herein or in any other Loan Document, or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document, or for any failure
of any Loan Party or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender or participant to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Loan Party or any Affiliate thereof.
9.04 Reliance by Administrative Agent.
61
(a) The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, electronic mail message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to any Loan
Party), independent accountants and other experts selected by the Administrative
Agent. The Administrative Agent shall be fully justified in failing or refusing
to take any action under any Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate and, if it
so requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders (or such greater number of Lenders as may be
expressly required hereby in any instance) and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 4.01, each Lender that has signed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless the Administrative Agent shall
have received notice from such Lender prior to the proposed Amendment Closing
Date specifying its objection thereto.
9.05 Notice of Default. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default, except with
respect to defaults in the payment of principal, interest and fees required to
be paid to the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Agreement, describing such Default and stating that
such notice is a "notice of default." The Administrative Agent will notify the
Lenders of its receipt of any such notice. The Administrative Agent shall take
such action with respect to such Default as may be directed by the Required
Lenders in accordance with Article VIII; provided, however, that unless and
until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall deem
advisable or in the best interest of the Lenders.
9.06 Credit Decision; Disclosure of Information by Administrative
Agent. Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Loan Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties and the Subsidiaries, and all applicable
bank or other regulatory Laws relating to the transactions contemplated hereby,
and made its own decision to enter into this Agreement and to extend credit to
the Borrower hereunder. Each Lender also represents that it will, independently
and without reliance upon any Agent-Related Person and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and the other Loan Parties.
62
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent herein, the Administrative
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of any of the Loan
Parties or any of their respective Affiliates which may come into the possession
of any Agent-Related Person.
9.07 Indemnification of Administrative Agent. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand each Agent-Related Person (to the extent not reimbursed by or on
behalf of any Loan Party and without limiting the obligation of any Loan Party
to do so), pro rata, and hold harmless each Agent-Related Person from and
against any and all Indemnified Liabilities incurred by it; provided, however,
that no Lender shall be liable for the payment to any Agent-Related Person of
any portion of such Indemnified Liabilities to the extent determined in a final,
nonappealable judgment by a court of competent jurisdiction to have resulted
from such Agent-Related Person's own gross negligence or willful misconduct;
provided, however, that no action taken in accordance with the directions of the
Required Lenders shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section. Without limitation of the foregoing,
each Lender shall reimburse the Administrative Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs) incurred
by the Administrative Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that the Administrative Agent is not reimbursed for such expenses by or on
behalf of the Borrower. The undertaking in this Section shall survive
termination of the Aggregate Commitments, the payment of all other Obligations
and the resignation of the Administrative Agent.
9.08 Administrative Agent in its Individual Capacity. Bank of America
and its Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from, acquire equity interests in and generally engage in
any kind of banking, trust, financial advisory, underwriting or other business
with each of the Loan Parties and their respective Affiliates as though Bank of
America were not the Administrative Agent or the L/C Issuer hereunder and
without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, Bank of America or its Affiliates may receive
information regarding any Loan Party or its Affiliates (including information
that may be subject to confidentiality obligations in favor of such Loan Party
or such Affiliate) and acknowledge that the Administrative Agent shall be under
no obligation to provide such information to them. With respect to its Loans,
Bank of America shall have the same rights and powers under this Agreement as
any other Lender and may exercise such rights and powers as though it were not
the Administrative Agent or the L/C Issuer, and the terms "Lender" and "Lenders"
include Bank of America in its individual capacity.
9.09 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders, and shall
resign upon the request of the Required Lenders if the Required Lenders
reasonably determine that any action taken by the Administrative Agent hereunder
constitutes gross negligence or willful misconduct; provided that any such
resignation by Bank of America shall also constitute its resignation as L/C
Issuer and Swing Line Lender. If the Administrative Agent resigns under this
Agreement, the Required Lenders shall appoint from among the Lenders a successor
administrative agent for the Lenders, which successor administrative agent shall
be consented to by the Borrower at all times other than during the existence of
an Event of Default (which consent of the Borrower shall not be unreasonably
withheld or delayed). If no successor administrative agent is appointed prior to
the effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Lenders and the
Borrower, a successor administrative agent from among the Lenders. Upon the
acceptance of its appointment as successor administrative agent hereunder, the
Person acting as such successor administrative agent shall
63
succeed to all the rights, powers and duties of the retiring Administrative
Agent, L/C Issuer and Swing Line Lender and the respective terms "Administrative
Agent," "L/C Issuer" and "Swing Line Lender" shall mean such successor
administrative agent, Letter of Credit issuer and swing line lender, and the
retiring Administrative Agent's appointment, powers and duties as Administrative
Agent shall be terminated and the retiring L/C Issuer's and Swing Line Lender's
rights, powers and duties as such shall be terminated, without any other or
further act or deed on the part of such retiring L/C Issuer or Swing Line Lender
or any other Lender, other than the obligation of the successor L/C Issuer to
issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or to make other arrangements
satisfactory to the retiring L/C Issuer to effectively assume the obligations of
the retiring L/C Issuer with respect to such Letters of Credit. After any
retiring Administrative Agent's resignation hereunder as Administrative Agent,
the provisions of this Article IX and Sections 10.04 and 10.05 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. If no successor administrative agent
has accepted appointment as Administrative Agent by the date which is 30 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above.
9.10 Administrative Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans, L/C
Obligations and all other Obligations that are owing and unpaid and to
file such other documents as may be necessary or advisable in order to
have the claims of the Lenders and the Administrative Agent (including
any claim for the reasonable compensation, expenses, disbursements and
advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and
the Administrative Agent under Sections 2.04(i) and (j), 2.09 and 10.04)
allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 10.04.
Nothing contained herein shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender any
plan of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.
64
9.11 Other Agents; Arrangers and Managers. None of the Lenders or
other Persons identified on the facing page or signature pages of this Agreement
as a "syndication agent," "documentation agent," "co-agent," "book manager,"
"lead manager," "arranger," "lead arranger" or "co-arranger" shall have any
right, power, obligation, liability, responsibility or duty under this Agreement
other than, in the case of such Lenders, those applicable to all Lenders as
such. Without limiting the foregoing, none of the Lenders or other Persons so
identified shall have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders or other Persons so identified in deciding to enter into this
Agreement or in taking or not taking action hereunder.
9.12 Guaranty Matters. The Lenders irrevocably authorize the
Administrative Agent, at its option and in its discretion, to release any
Guarantor from its obligations under the Guaranty upon the occurrence of the
events described in Section 6.12(b) or Section 6.12(c) hereof. Upon request by
the Administrative Agent at any time, the Required Lenders will confirm in
writing the Administrative Agent's authority to release any Guarantor from its
obligations under the Guaranty pursuant to this Section 9.12.
ARTICLE X.
MISCELLANEOUS
10.01 Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrower or any other Loan Party therefrom, shall be effective unless in writing
signed by the Required Lenders and the Borrower or the applicable Loan Party, as
the case may be, and acknowledged by the Administrative Agent, and each such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such amendment,
waiver or consent shall:
(a) waive any condition set forth in Section 4.01(a) without the
written consent of each Lender;
(b) extend or increase the Commitment of any Lender (or reinstate
any Commitment terminated pursuant to Section 8.02) without the written consent
of such Lender;
(c) postpone any date fixed by this Agreement or any other Loan
Document for any payment or mandatory prepayment of principal, interest, fees or
other amounts due to the Lenders (or any of them) hereunder or under any other
Loan Document without the written consent of each Lender directly affected
thereby;
(d) reduce the principal of, or the rate of interest specified
herein on, any Loan or L/C Borrowing, or (subject to clause (v) of the second
proviso to this Section 10.01) any fees or other amounts payable hereunder or
under any other Loan Document without the written consent of each Lender
directly affected thereby; provided, however, that only the consent of the
Required Lenders shall be necessary to amend the definition of "Default Rate" or
to waive any obligation of the Borrower to pay interest at the Default Rate;
(e) change Section 2.14 or Section 8.03 in a manner that would alter
the pro rata sharing of payments required thereby without the written consent of
each Lender;
(f) change any provision of this Section or the definition of
"Required Lenders" or any other provision hereof specifying the number or
percentage of Lenders required to amend, waive or otherwise
65
modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender;
(g) other than as provided in Section 9.12, release any Guarantor
from the Guaranty without the written consent of each Lender;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Letter
of Credit Application relating to any Letter of Credit issued or to be issued by
it; (ii) no amendment, waiver or consent shall, unless in writing and signed by
the Swing Line Lender in addition to the Lenders required above, affect the
rights or duties of the Swing Line Lender under this Agreement; (iii) no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; and (iv) Section 10.07(h) may not be amended, waived or otherwise
modified without the consent of each Granting Lender all or any part of whose
Loans are being funded by an SPC at the time of such amendment, waiver or other
modification; and (v) the Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased or extended
without the consent of such Lender.
10.02 Notices and Other Communications; Facsimile Copies.
(a) General. Unless otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
by facsimile transmission). All such written notices shall be mailed, faxed or
delivered to the applicable address, facsimile number or (subject to subsection
(c) below) electronic mail address, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:
(i) if to the Borrower, the Administrative Agent, the L/C
Issuer or the Swing Line Lender, to the address, facsimile number,
electronic mail address or telephone number specified for such Person on
Schedule 10.02 or to such other address, facsimile number, electronic
mail address or telephone number as shall be designated by such party in
a notice to the other parties; and
(ii) if to any other Lender, to the address, facsimile
number, electronic mail address or telephone number specified in its
Administrative Questionnaire or to such other address, facsimile number,
electronic mail address or telephone number as shall be designated by
such party in a notice to the Borrower, the Administrative Agent, the
L/C Issuer and the Swing Line Lender.
All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, four Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of subsection (c)
below), when delivered; provided, however, that notices and other communications
to the Administrative Agent, the L/C Issuer and the Swing Line Lender pursuant
to
66
Article II shall not be effective until actually received by such Person. In no
event shall a voicemail message be effective as a notice, communication or
confirmation hereunder.
(b) Effectiveness of Facsimile Documents and Signatures. The Loan
Documents may be transmitted and/or signed by facsimile. The effectiveness of
any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually-signed originals and shall be binding on all
Loan Parties, the Administrative Agent and the Lenders. The Administrative Agent
may also require that any such documents and signatures be confirmed by a
manually-signed original thereof; provided, however, that the failure to request
or deliver the same shall not limit the effectiveness of any facsimile document
or signature.
(c) Limited Use of Electronic Mail. Electronic mail and Internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information as provided in Section 6.02, and to
distribute Loan Documents for execution by the parties thereto, and may not be
used for any other purpose.
(d) Reliance by Administrative Agent and Lenders. The Administrative
Agent and the Lenders shall be entitled to rely and act upon any notices
(including telephonic Committed Loan Notices and Swing Line Loan Notices)
purportedly given by or on behalf of the Borrower even if (i) such notices were
not made in a manner specified herein, were incomplete or were not preceded or
followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation thereof.
The Borrower shall indemnify each Agent-Related Person and each Lender from all
losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Borrower. All
telephonic notices to and other communications with the Administrative Agent may
be recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.
10.03 No Waiver; Cumulative Remedies. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
10.04 Attorney Costs, Expenses and Taxes. The Borrower agrees (a) to
pay or reimburse the Administrative Agent for all costs and expenses incurred in
connection with the development, preparation, negotiation and execution of this
Agreement and the other Loan Documents and any amendment, waiver, consent or
other modification of the provisions hereof and thereof (whether or not the
transactions contemplated hereby or thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs, and (b) to pay or reimburse the
Administrative Agent for all costs and expenses incurred in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or the other Loan Documents (including all such costs and
expenses incurred during any "workout" or restructuring in respect of the
Obligations and during any legal proceeding, including any proceeding under any
Debtor Relief Law), including all Attorney Costs. The foregoing costs and
expenses shall include all search, filing, recording, title insurance and
appraisal charges and fees and taxes related thereto, and other out-of-pocket
expenses incurred by the Administrative Agent and the cost of independent public
accountants and other outside experts retained by the Administrative Agent or
any Lender. All amounts due under this Section 10.04 shall be payable within ten
Business Days after demand therefor. The agreements in this Section shall
survive the termination of the Aggregate Commitments and repayment of all other
Obligations.
67
10.05 Indemnification by the Borrower. Whether or not the transactions
contemplated hereby are consummated, the Borrower shall indemnify and hold
harmless each Agent-Related Person, each Lender and their respective Affiliates,
directors, officers, employees, counsel, agents and attorneys-in-fact
(collectively the "Indemnitees") from and against any and all liabilities,
obligations, losses, damages, penalties, claims, demands, actions, judgments,
suits, costs, expenses and disbursements (including Attorney Costs) of any kind
or nature whatsoever which may at any time be imposed on, incurred by or
asserted against any such Indemnitee in any way relating to or arising out of or
in connection with (a) the execution, delivery, enforcement, performance or
administration of any Loan Document or any other agreement, letter or instrument
delivered in connection with the transactions contemplated thereby or the
consummation of the transactions contemplated thereby, (b) any Commitment, Loan
or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the L/C Issuer to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (c) any actual or
alleged presence or release of Hazardous Materials on or from any property
currently or formerly owned or operated by any Loan Party, any Subsidiary or any
Borrower Entity, or any Environmental Liability related in any way to any Loan
Party, any Subsidiary or any Borrower Entity (provided, however, that the
Borrower's shall have no indemnification obligation to an Indemnitee under this
clause (c) with respect to any property currently or formerly owned or operated
by any Borrower Entity or any Environmental Liability related to any Borrower
Entity if such Indemnitee has any Indebtedness outstanding to such Borrower
Entity outside of this Agreement and if such Indemnitee's claim for
indemnification arises in connection with such other Indebtedness and not the
Indebtedness arising under this Agreement, or (d) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory (including any investigation
of, preparation for, or defense of any pending or threatened claim,
investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"), in all cases, whether or not caused by or arising, in whole or in
part, out of the negligence of the Indemnitee; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee. No Indemnitee
shall be liable for any damages arising from the use by others of any
information or other materials obtained through IntraLinks or other similar
information transmission systems in connection with this Agreement, nor shall
any Indemnitee have any liability for any indirect or consequential damages
relating to this Agreement or any other Loan Document or arising out of its
activities in connection herewith or therewith (whether before or after the
Amendment Closing Date). All amounts due under this Section 10.05 shall be
payable within ten Business Days after demand therefor. The agreements in this
Section shall survive the resignation of the Administrative Agent, the
replacement of any Lender, the termination of the Aggregate Commitments and the
repayment, satisfaction or discharge of all the other Obligations.
10.06 Payments Set Aside. To the extent that any payment by or on
behalf of the Borrower is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of set-off, and such
payment or the proceeds of such set-off or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) 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 (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its applicable share of any amount so recovered from or repaid
by the Administrative
68
Agent, plus interest thereon from the date of such demand to the date such
payment is made at a rate per annum equal to the Federal Funds Rate from time to
time in effect.
10.07 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of participation in
accordance with the provisions of subsection (d) of this Section, or (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of subsection (f) or (i) of this Section, or (iv) to an SPC in accordance with
the provisions of subsection (h) of this Section (and any other attempted
assignment or transfer by any party hereto shall be null and void). Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d) of this
Section and, to the extent expressly contemplated hereby, the Indemnitees) any
legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans (including for
purposes of this subsection (b), participations in L/C Obligations and in Swing
Line Loans) at the time owing to it); provided that (i) except in the case of an
assignment of the entire remaining amount of the assigning Lender's Commitment
and the Loans at the time owing to it or in the case of an assignment to a
Lender or an Affiliate of a Lender or an Approved Fund (as defined in subsection
(g) of this Section) with respect to a Lender, the aggregate amount of the
Commitment (which for this purpose includes Loans outstanding thereunder)
subject to each such assignment, determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative
Agent or, if "Trade Date" is specified in the Assignment and Assumption, as of
the Trade Date, shall not be less than $5,000,000 unless each of the
Administrative Agent and, so long as no Event of Default has occurred and is
continuing, the Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed); (ii) each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned, except that this clause (ii) shall not apply to rights in respect of
Swing Line Loans; (iii) any assignment of a Commitment must be approved (each
such approval not to be unreasonably withheld or delayed) by the Administrative
Agent, the L/C Issuer and the Swing Line Lender unless the Person that is the
proposed assignee is itself a Lender (whether or not the proposed assignee would
otherwise qualify as an Eligible Assignee); and (iv) the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Assumption, together with a processing and recordation fee of $3,500.
Notwithstanding the foregoing, as long as no Event of Default has occurred and
is continuing, no assignment of the Commitment of Bank of America shall be
permitted as long as Bank of America remains the Administrative Agent, if the
effect of such assignment is to cause the remaining Commitment of Bank of
America to be less than $10,000,000, Subject to acceptance and recording thereof
by the Administrative Agent pursuant to subsection (c) of this Section, from and
after the effective date specified in each Assignment and Assumption, the
Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
3.01, 3.04, 3.05, 10.04 and 10.05
69
with respect to facts and circumstances occurring prior to the effective date of
such assignment). Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.
(c) The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent's Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans and L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.
(d) Any Lender may at any time, without the consent of, or notice
to, the Borrower or the Administrative Agent, sell participations to any Person
(other than a natural person or the Borrower or any of the Borrower's Affiliates
or Subsidiaries) (each, a "Participant") in all or a portion of such Lender's
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans (including such Lender's participations in L/C
Obligations and/or Swing Line Loans) owing to it); provided that (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative Agent
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that directly affects such Participant. Subject to subsection (e)
of this Section, the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.09 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.14 as though it were a
Lender.
(e) A Participant shall not be entitled to receive any greater
payment under Section 3.01 or 3.04 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 3.01 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
10.15 as though it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement (including under its
Note, if any) to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.
(g) As used herein, the following terms have the following meanings:
70
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a
Lender; (c) an Approved Fund; and (d) any other Person (other than a
natural person) that is approved by (i) the Administrative Agent, the
L/C Issuer and the Swing Line Lender, and (ii) unless an Event of
Default has occurred and is continuing, the Borrower (each such approval
not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, "Eligible Assignee" shall not include the
Borrower or any of the Borrower's Affiliates or Subsidiaries.
"Fund" means any Person (other than a natural person) that is
(or will be) engaged in making, purchasing, holding or otherwise
investing in commercial loans and similar extensions of credit in the
ordinary course of its business.
"Approved Fund" means any Fund that is administered or managed
by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.
(h) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower (an "SPC") the option to provide all or
any part of any Committed Loan that such Granting Lender would otherwise be
obligated to make pursuant to this Agreement; provided that (i) nothing herein
shall constitute a commitment by any SPC to fund any Committed Loan, and (ii) if
an SPC elects not to exercise such option or otherwise fails to make all or any
part of such Committed Loan, the Granting Lender shall be obligated to make such
Committed Loan pursuant to the terms hereof. Each party hereto hereby agrees
that (i) neither the grant to any SPC nor the exercise by any SPC of such option
shall increase the costs or expenses or otherwise increase or change the
obligations of the Borrower under this Agreement (including its obligations
under Sections 3.01 and 3.04), (ii) no SPC shall be liable for any indemnity or
similar payment obligation under this Agreement for which a Lender would be
liable, and (iii) the Granting Lender shall for all purposes, including the
approval of any amendment, waiver or other modification of any provision of any
Loan Document, remain the lender of record hereunder. The making of a Committed
Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to
the same extent, and as if, such Committed Loan were made by such Granting
Lender. In furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive the termination of this Agreement) that, prior to the
date that is one year and one day after the payment in full of all outstanding
commercial paper or other senior debt of any SPC, it will not institute against,
or join any other Person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency, or liquidation proceeding under the
laws of the United States or any State thereof. Notwithstanding anything to the
contrary contained herein, any SPC may (i) with notice to, but without prior
consent of the Borrower and the Administrative Agent and with the payment of a
processing fee of $3,500, assign all or any portion of its right to receive
payment with respect to any Committed Loan to the Granting Lender and (ii)
disclose on a confidential basis any non-public information relating to its
funding of Committed Loans to any rating agency, commercial paper dealer or
provider of any surety or Guarantee or credit or liquidity enhancement to such
SPC.
(i) Notwithstanding anything to the contrary contained herein, if at
any time Bank of America assigns all of its Commitment and Loans pursuant to
subsection (b) above, Bank of America may, (i) upon 30 days' notice to the
Borrower and the Lenders, resign as L/C Issuer and/or (ii) upon 30 days' notice
to the Borrower, resign as Swing Line Lender. In the event of any such
resignation as L/C Issuer or Swing Line Lender, the Borrower shall be entitled
to appoint from among the Lenders a successor L/C Issuer or Swing Line Lender
hereunder, as long as such Lender so appointed by the Borrower is willing, in
its sole discretion, to accept such appointment; provided, however, that no
failure by the Borrower to appoint any such successor shall affect the
resignation of Bank of America as L/C Issuer or Swing Line Lender, as the case
may be. If Bank of America resigns as L/C Issuer, it shall retain
71
all the rights and obligations of the L/C Issuer hereunder with respect to all
Letters of Credit outstanding as of the effective date of its resignation as L/C
Issuer and all L/C Obligations with respect thereto (including the right to
require the Lenders to make Base Rate Committed Loans or fund risk
participations in Unreimbursed Amounts pursuant to Section 2.04(c)). If Bank of
America resigns as Swing Line Lender, it shall retain all the rights of the
Swing Line Lender provided for hereunder with respect to Swing Line Loans made
by it and outstanding as of the effective date of such resignation, including
the right to require the Lenders to make Base Rate Committed Loans or fund risk
participations in outstanding Swing Line Loans pursuant to Section 2.05(c).
10.08 Confidentiality. Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority (including any self-regulatory authority, such as
the National Association of Insurance Commissioners), (c) to the extent required
by applicable laws or regulations or by any subpoena or similar legal process,
(d) to any other party hereto, (e) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) with the consent of the Borrower or (h) to
the extent such Information (x) becomes publicly available other than as a
result of a breach of this Section or (y) becomes available to the
Administrative Agent or any Lender on a nonconfidential basis from a source
other than the Borrower. For purposes of this Section, "Information" means all
information received from any Loan Party relating to any Loan Party or any of
their respective businesses, other than any such information that is available
to the Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by any Loan Party, provided that, in the case of information received
from a Loan Party after the date hereof, such information is clearly identified
at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information. Notwithstanding
anything set forth herein or in any other written or oral understanding or
agreement to which the parties hereto are parties or by which they are bound,
the parties acknowledge and agree that (i) any obligations of confidentiality
contained herein and therein do not apply and have not applied from the
commencement of discussions between the parties to the "tax treatment" and "tax
structure" of the transactions contemplated by this agreement and (ii) each
party (and each of its employees, representatives, or other agents) may disclose
without limitation of any kind, any information with respect to the tax
treatment and tax structure of the transactions contemplated hereby and all
materials of any kind (including opinions or other tax analyses) that are
provided to any such party relating to such tax treatment and tax structure, all
within the meaning of Treasury Regulation Section 1.6011-4; provided that with
respect to any document or similar item that in either case contains information
concerning the tax treatment or tax structure of the transaction as well as
other information, this sentence shall only apply to such portions of the
document or similar item that relate to the tax treatment or tax structure of
the Loans, Letters of Credit and transactions contemplated hereby, and provided
further, that each party recognizes that the privilege each has to maintain, in
its sole discretion, the confidentiality of a communication relating to the
transactions contemplated hereby, including a confidential communication with
its attorney or a confidential communication with a federally authorized
practitioner under Section 7525 of the Code, is not intended to be affected by
the foregoing. In addition, the Administrative Agent may disclose to any agency
or organization that assigns standard identification
72
numbers to loan facilities such basic information describing the facilities
provided hereunder as is necessary to assign unique identifiers (and, if
requested, supply a copy of this Agreement), it being understood that the Person
to whom such disclosure is made will be informed of the confidential nature of
such Information and, subject to this Section 10.08, instructed to make
available to the public only such Information as such person normally makes
available in the course of its business of assigning identification numbers.
10.09 Set-off. In addition to any rights and remedies of the Lenders
provided by law, upon the occurrence and during the continuance of any Event of
Default, each Lender is authorized at any time and from time to time, without
prior notice to the Borrower or any other Loan Party, any such notice being
waived by the Borrower (on its own behalf and on behalf of each Loan Party) to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Lender to or for the credit or
the account of the respective Loan Parties against any and all Obligations owing
to such Lender hereunder or under any other Loan Document, now or hereafter
existing, irrespective of whether or not the Administrative Agent or such Lender
shall have made demand under this Agreement or any other Loan Document and
although such Obligations may be contingent or unmatured or denominated in a
currency different from that of the applicable deposit or indebtedness. Each
Lender agrees promptly to notify the Borrower and the Administrative Agent after
any such set-off and application made by such Lender; provided, however, that
the failure to give such notice shall not affect the validity of such set-off
and application.
10.10 Interest Rate Limitation. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the "Maximum Rate"). If the Administrative
Agent or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Loans or, if
it exceeds such unpaid principal, refunded to the Borrower. In determining
whether the interest contracted for, charged, or received by the Administrative
Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent
permitted by applicable Law, (a) characterize any payment that is not principal
as an expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Obligations hereunder.
10.11 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.12 Integration. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and thereof and supersedes all prior agreements, written
or oral, on such subject matter. In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control; provided that the inclusion of
supplemental rights or remedies in favor of the Administrative Agent or the
Lenders in any other Loan Document shall not be deemed a conflict with this
Agreement. Each Loan Document was drafted with the joint participation of the
respective parties thereto and shall be construed neither against nor in favor
of any party, but rather in accordance with the fair meaning thereof.
10.13 Survival of Representations and Warranties. All representations
and warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their
73
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default at the time of any Credit Extension, and
shall continue in full force and effect as long as any Loan or any other
Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit
shall remain outstanding.
10.14 Severability. If any provision of this Agreement or the other
Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10.15 Tax Forms. (a) (i) Each Lender that is not a "United States
person" within the meaning of Section 7701(a)(30) of the Code (a "Foreign
Lender") shall deliver to the Administrative Agent (who will deliver a copy of
the same to the Borrower), prior to receipt of any payment subject to
withholding under the Code (or upon accepting an assignment of an interest
herein), two duly signed completed copies of either IRS Form W-8BEN or any
successor thereto (relating to such Foreign Lender and entitling it to an
exemption from, or reduction of, withholding tax on all payments to be made to
such Foreign Lender by the Borrower pursuant to this Agreement) or IRS Form
W-8ECI or any successor thereto (relating to all payments to be made to such
Foreign Lender by the Borrower pursuant to this Agreement) or such other
evidence satisfactory to the Borrower and the Administrative Agent that such
Foreign Lender is entitled to an exemption from, or reduction of, U.S.
withholding tax, including any exemption pursuant to Section 881(c) of the Code.
In addition, a Foreign Lender claiming the exemption under the so-called
"portfolio interest exemption" shall also provide a statement that such lender
is eligible for a complete exemption under Section 871(h) or 881(c) of the Code
(including certificate that it is not a "bank"). Thereafter and from time to
time, each such Foreign Lender shall (A) promptly submit to the Administrative
Agent such additional duly completed and signed copies of one of such forms (or
such successor forms as shall be adopted from time to time by the relevant
United States taxing authorities) as may then be available under then current
United States laws and regulations to avoid, or such evidence as is satisfactory
to the Borrower and the Administrative Agent of any available exemption from or
reduction of, United States withholding taxes in respect of all payments to be
made to such Foreign Lender by the Borrower pursuant to this Agreement, (B)
promptly notify the Administrative Agent of any change in circumstances which
would modify or render invalid any claimed exemption or reduction, and (C) take
such steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Lender, and as may be reasonably necessary (including the
re-designation of its Lending Office) to avoid any requirement of applicable
Laws that the Borrower make any deduction or withholding for taxes from amounts
payable to such Foreign Lender.
(ii) Each Foreign Lender, to the extent it does not act or
ceases to act for its own account with respect to any portion of any sums paid
or payable to such Lender under any of the Loan Documents (for example, in the
case of a typical participation by such Lender), shall deliver to the
Administrative Agent on the date when such Foreign Lender ceases to act for its
own account with respect to any portion of any such sums paid or payable, and at
such other times as may be necessary in the determination of the Administrative
Agent (in the reasonable exercise of its discretion), (A) two duly signed
completed copies of the forms or statements required to be provided by such
Lender as set forth above, to establish the portion of any such sums paid or
payable with respect to which such Lender acts for its own account that is not
subject to U.S. withholding tax, and (B) two duly signed completed copies of IRS
Form W-8IMY (or any successor thereto), together with any information such
Lender chooses to transmit with such form, and any other certificate or
statement of exemption required under the Code, to
74
establish that such Lender is not acting for its own account with respect to a
portion of any such sums payable to such Lender.
(iii) The Borrower shall not be required to pay any additional
amount to any Foreign Lender under Section 3.01 (A) with respect to any Taxes
required to be deducted or withheld on the basis of the information,
certificates or statements of exemption such Lender transmits with an IRS Form
W-8IMY pursuant to this Section 10.15(a) or (B) if such Lender shall have failed
to satisfy the foregoing provisions of this Section 10.15(a); provided that if
such Lender shall have satisfied the requirement of this Section 10.15(a) on the
date such Lender became a Lender or ceased to act for its own account with
respect to any payment under any of the Loan Documents, nothing in this Section
10.15(a) shall relieve the Borrower of its obligation to pay any amounts
pursuant to Section 3.01 in the event that, as a result of any change in any
applicable law, treaty or governmental rule, regulation or order, or any change
in the interpretation, administration or application thereof, such Lender is no
longer properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender or other Person for the
account of which such Lender receives any sums payable under any of the Loan
Documents is not subject to withholding or is subject to withholding at a
reduced rate.
(iv) The Administrative Agent may withhold any Taxes required
to be deducted and withheld from any payment under any of the Loan Documents.
(b) Upon the request of the Administrative Agent, each Lender that
is a "United States person" within the meaning of Section 7701(a)(30) of the
Code shall deliver to the Administrative Agent two duly signed completed copies
of IRS Form W-9. If such Lender fails to deliver such forms, then the
Administrative Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable back-up withholding tax imposed by the Code,
without reduction.
(c) If any Governmental Authority asserts that the Administrative
Agent did not properly withhold or backup withhold, as the case may be, any tax
or other amount from payments made to or for the account of any Lender, such
Lender shall indemnify the Administrative Agent therefor, including all
penalties and interest, any taxes imposed by any jurisdiction on the amounts
payable to the Administrative Agent under this Section, and costs and expenses
(including Attorney Costs) of the Administrative Agent. The obligation of the
Lenders under this Section shall survive the termination of the Aggregate
Commitments, repayment of all other Obligations hereunder and the resignation of
the Administrative Agent.
10.16 Governing Law.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF CALIFORNIA APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND
EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA
SITTING IN SAN FRANCISCO COUNTY OR OF THE UNITED STATES FOR THE NORTHERN
DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE
BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO
75
THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.
THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER WAIVES PERSONAL SERVICE
OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY THE LAW OF SUCH STATE.
10.17 Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
10.18 Time of the Essence. Time is of the essence of the Loan
Documents.
10.19 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
76
Exhibit 10.1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
BRE PROPERTIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-------------------------------------
Title: Executive Vice President, Chief
------------------------------------
Financial Officer and Secretary of
------------------------------------
BRE Properties, Inc.
------------------------------------
S - 1
BANK OF AMERICA, N.A., as
Administrative Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Principal
------------------------------------
S - 2
BANK OF AMERICA, N.A., as a Lender, L/C
Issuer and Swing Line Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Principal
------------------------------------
S - 3
BANK ONE, NA, as a Co-Syndication Agent and
as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Title: Director, Capital Markets
------------------------------------
S - 4
COMMERZBANK AG, NEW YORK AND GRAND CAYMAN
BRANCHES, as a Co-Syndication Agent and
as a Lender
By: /s/ E. ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------
Name: E. ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Title: Assistant Vice President
------------------------------------
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Title: Senior Vice President
------------------------------------
S - 5
WACHOVIA BANK, N.A., as Documentation
Agent and as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Title: Managing Director
------------------------------------
▇ - ▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ACTING THROUGH
ITS SAN FRANCISCO AGENCY, as a Managing
Agent and as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Title: Director
------------------------------------
S - 7
KEYBANK, A NATIONAL BANKING ASSOCIATION,
as a Managing Agent and as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Title: Assistant Vice President
------------------------------------
S - 8
PNC BANK, NATIONAL ASSOCIATION, as a
Managing Agent and as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Title: Vice President
------------------------------------
S - 9
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ BANK, as a Co-Agent and as a
Lender
By: /s/ Jaap L. Tonckens
---------------------------------------
Name: Jaap L. Tonckens
-------------------------------------
Title: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Bank
------------------------------------
S - 10
UNION BANK OF CALIFORNIA, N.A., as a
Co-Agent and as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Title: Senior Vice President
------------------------------------
S - 11
SCHEDULE 2.01
COMMITMENTS
AND PRO RATA SHARES
LENDER COMMITMENT PRO RATA SHARE
------------------------------------------ -------------- -----------------
Bank of America, N.A. $ 51,000,000 14.571428571%
Bank One, NA 50,000,000 14.285714286%
Commerzbank AG, New York and Cayman 50,000,000 14.285714286%
Branches
Wachovia Bank, N.A. 50,000,000 14.▇▇▇▇▇▇▇▇▇%
The Bank of Nova Scotia Acting Through Its 33,000,000 9.▇▇▇▇▇▇▇▇▇%
San Francisco Agency
KeyBank National Association, a national 33,000,000 9.428571429%
banking association
PNC Bank, National Association 33,000,000 9.428571429%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Bank 25,000,000 7.142857143%
Union Bank of California, N.A. 25,000,000 7.142857143%
--------------
Total $ 350,000,000 100.000000000%
1