Exhibit 10.9
FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT
THIS FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT (this "Amendment") is
made as of October 29, 1999, by and among TRINET CORPORATE REALTY TRUST (the
"BORROWER"), MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent
(the "LEAD AGENT"), BANK OF AMERICA, N.A. ("BAC"), and the BANKS listed on the
signature pages hereof.
W I T N E S S E T H:
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WHEREAS, the Borrower and the Banks have entered into the Third
Amended and Restated Revolving Credit Agreement, dated as of June 1, 1998 (the
"CREDIT AGREEMENT"); and
WHEREAS, the parties desire to modify the Credit Agreement upon the
terms and conditions set forth herein.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties do hereby agree as
follows:
1. DEFINITIONS. All capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Credit Agreement.
2. LEAD AGENT. Simultaneously herewith, Morgan has assigned and transferred
its Commitment to BAC and Bank One, NA, and, in accordance with Section 7.8 of
the Credit Agreement, hereby resigns as Lead Agent. The Required Banks, with the
approval of the Borrower, hereby appoint BAC 257582.08-New York S3A as successor
Lead Agent, and Bank One, NA, as "syndication agent". The syndication agent has
no right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Banks as such. From and after the
date hereof, all references to Morgan shall be deemed to be references to BAC.
3. BAS. The Required Banks acknowledge and agree that Banc of America
Securities LLC ("BAS") is hereby appointed "book manager" and "lead arranger".
4. APPLICABLE MARGIN. The grid set forth in the definition "Applicable
Margin" is hereby deleted and the following substituted therefor:
Range of Applicable
Borrower's Margin for Applicable Applicable
Credit Rating Base Rate Margin for Margin for Euro
(S&P/Moody's Loans CD Loans Dollar Loans
RATINGS) (% PER ANNUM) (% PER ANNUM) (% PER ANNUM)
- --------- ------------------- ------------------- ---------------
BBB+/Baa1 0.25 0.975 0.85
BBB/Baa2 0.25 1.125 1.00
BBB-/Baa3 0.25 1.1875 1.0625
Non-Invest-
ment Grade 0.50 1.675 1.55
5. LETTERS OF CREDIT. The references in Sections 2.2(b) and 2.6(c) to "10:00
A.M., New York City time" are hereby deleted, and "11:00 A.M., New York City
time" substituted therefor. In addition, the following is hereby inserted after
the second sentence of Section 2.2(b): "In addition, together with such notice,
the Borrower shall deliver to the designated Fronting Bank an "Application and
Agreement for Standby Letter of Credit" in the form attached hereto as EXHIBIT
A, or in such other form as may reasonably be required by the designated
Fronting Bank."
6. EXTENSION FEE. Section 2.9(c) is hereby deleted, and the following
substituted therefor:
(c) EXTENSION FEE. Simultaneously with the delivery by Borrower of
the Notice to Extend pursuant to Section 2.10(b), the Borrower shall
pay to the Lead Agent for the account of the Banks ratably in
proportion to their Commitments an extension fee (each, the
"EXTENSION FEE") of .20% of the Commitments then outstanding
(provided, with respect to any Bank's share of such fee, such Bank
has honored its Commitment in accordance herewith).
7. EXTENSION OPTION. Section 2.10(c) of the Credit Agreement, and all
references to Section 2.10(c) and to the Request to Extend, are hereby deleted.
8. REPRESENTATIONS. Section 4.15 of the Credit Agreement is hereby deleted.
9. FINANCIAL INFORMATION. The reference to "Borrower" in Section 5.1(k) of
the Credit Agreement is hereby deleted and "Starwood" substituted therefor.
10. DIVIDENDS. Section 5.8(d) is hereby deleted and the following substituted
therefor:
(d) DIVIDENDS. The Borrower will not, as determined as of the last
day of each quarter, with respect to the previous four quarters, pay
or declare any dividends on common stock in excess of 85% of CFFOA
(as hereinafter defined) for such previous four quarters, provided,
however, that dividends may exceed 85% of CFFOA if required in order
for Starwood Financial Inc. ("STARWOOD") to maintain its status as a
real estate investment trust under the Code, assuming, however, that
all other Subsidiaries of Starwood shall have dividended or
distributed 100% of their disposable cash during the applicable
twelve (12) month period to Starwood. For purposes hereof, "CFFOA"
means the "net cash provided by operating activity", as shown on the
Borrower's consolidated statements of cash flows,
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and calculated in a manner consistent with the Borrower's historical
methods of calculating the same.
11. ACQUISITION. Notwithstanding the provisions of Section 5.9 of the Credit
Agreement, the Required Banks hereby consent to the acquisition by merger (the
"MERGER") of 100% of the stock of the Borrower by Starwood and hereby waive any
Event of Default that would otherwise arise under Sections 6.1(i), (j) and (k)
of the Credit Agreement.
12. CHANGES IN BUSINESS. Section 5.10 is hereby amended by adding after the
reference to "Section 5.17" the following: "and Section 5.23".
13. BORROWER STATUS. Section 5.13 of the Credit Agreement is hereby deleted
and the following substituted therefor: "Borrower shall at all times maintain
its status as a "qualified REIT subsidiary" of Starwood."
14. ASSET SALES AND TRANSFERS. The following Section 5.20 is hereby added to
the Credit Agreement:
SECTION 5.20 ASSET SALES AND TRANSFERS. The Borrower shall not sell,
transfer or otherwise convey any Real Property Asset to any
Affiliate, other than a wholly-owned Subsidiary or a newly formed
joint venture with an unaffiliated third party, except that any such
sale, transfer or
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conveyance shall be permitted if the same is for a price not less
than the then fair market value of the applicable Real Property
Asset, shall be on an all cash basis, and shall otherwise be on fair
market, arms' length terms. For purposes of this Section, the term
"AFFILIATE" shall mean as applied to any Person, any other Person
that directly or indirectly controls, is controlled by, or is under
common control with, that Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms
"controlling", "controlled by" and "under common control with"), as
applied to any Person, means the possession, directly or indirectly,
of the power to vote fifteen percent (15%) or more of the equity
securities having voting power for the election of directors of such
Person or otherwise to direct or cause the direction of the
management and policies of that Person, whether through the
ownership of voting equity securities or by contract or otherwise.
15. INTERCOMPANY DEBT. The following Section 5.21 is hereby added to the
Credit Agreement: SECTION 5.21. The Borrower may not incur any Debt from
Starwood or any Affiliate of Starwood ("AFFILIATE DEBT"), unless repayment of
such Debt, by its express written terms, is fully subordinated to the repayment
of the Loans and all other Obligations, as well as all other Debt from
un-Affiliated third parties. In addition, all Affiliate Debt shall be on then
market terms, and at no time shall, in the aggregate, exceed fifteen percent
(15%) of the total Debt permitted pursuant to Section 5.8(b) of the Credit
Agreement. In addition, at no time may the Borrower or any Subsidiary of the
Borrower lend any amounts to Starwood or any of its wholly-owned Subsidiaries or
any Affiliates of Starwood
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that in the aggregate would exceed five percent (5%) of Consolidated Tangible
Net Worth.
16. BOARD OF DIRECTORS. The following Section 5.22 is hereby added to the
Credit Agreement:
SECTION 5.22. From and after the Effective Date, the members
of the board of directors of the Borrower (the "Board") shall at all
times be identical with the members of the board of directors of
Starwood, except that at all times there shall be one additional
member of the Board (the "SPECIAL DIRECTOR"), which member shall be
"independent" (in accordance with S&P's standard requirement from
time to time). A unanimous vote of all members of the Board,
including the Special Director, shall be required in accordance with
the organizational documents of the Borrower (the "UNANIMOUS VOTING
REQUIREMENT", for the Borrower to (i) file a voluntary insolvency
proceeding, or (ii) to sell, transfer or convey in any three (3)
month period, any Real Property Asset(s) to Starwood or any
wholly-owned Subsidiary of Starwood or any Affiliates of Starwood
other than a wholly-owned Subsidiary of the Borrower or a newly
formed joint venture of the Borrower with an unaffiliated third
party, that exceed, either individually or in the aggregate, five
percent (5%) of Combined Asset Value as of the last day of the most
recently ended fiscal quarter for which financial information has
been delivered in accordance with Section 5.1 (a) and (b).
17. ALTERNATIVE INVESTMENTS. The following Section 5.23 is hereby added to the
Credit Agreement:
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SECTION 5.23. ALTERNATIVE INVESTMENTS. Borrower may use proceeds of
the Loans to make Alternative Investments, provided, however, that
as of the last day of each calender quarter, the total book value,
calculated in accordance with GAAP but without deduction for
depreciation, of Alternative Investments made from and after the
closing of the Merger shall not exceed 20% of Combined Asset Value.
For purposes hereof, "ALTERNATIVE INVESTMENTS" means any investment
other than (i) the acquisition of a Real Property Asset more than
75% of the rentable area of which is leased to a single tenant,
whether directly or through a joint venture, or (ii) development
activities as described in Section 5.17. Whether directly or through
a joint venture.
18. EVENTS OF DEFAULT. (a) Section 6.1(i) of the Credit Agreement is hereby
deleted and the following substituted therefor: "(i) Starwood shall cease to
own, directly or indirectly, 100% of the issued and outstanding shares of stock
of the Borrower;".
(b) Section 6.1(j) of the Credit Agreement is hereby deleted and the
following substituted therefor: "(j) there shall not be at all times
at least one Special Director on the Board, or the Unanimous Voting
Requirements shall be amended, modified or terminated without the
prior written consent of the Required Banks;"
(c) Section 6.1(k) of the Credit Agreement is hereby deleted and the
following substituted therefor: "(k) Starwood shall cease at any
time to qualify as a real estate investment trust under the Code;".
19. NOTICES. The reference in Section 9.1 of the Credit Agreement to "One
Embarcadero Center, 33rd Floor, San Francisco, CA 94111, Attn.: A. William
Stein" is hereby deleted and the following substituted therefor: "1114 Avenue of
the Americas, 27th Floor, New York, NY 10036, Attn.: Spencer Haber, with a copy
to Nina Matis, Esq."
20. ADDITIONAL COMMITMENT. Section 9.18 of the Credit Agreement is hereby
deleted.
21. EFFECTIVE DATE. This Amendment shall become effective when each of the
following conditions is satisfied (or waived by the Required Banks) (the date
such conditions are satisfied or waived being deemed the "EFFECTIVE DATE"):
(a) the Borrower shall have executed and delivered to the Lead Agent
a duly executed original of this Amendment;
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(b) the Required Banks shall have executed and delivered to the Lead
Agent a duly executed original of this Amendment;
(c) the Lead Agent shall have received all documents the Lead Agent
may reasonably request relating to the existence of the Borrower,
the authority for and the validity of this Amendment, and the other
documents executed in connection therewith, and any other matters
relevant hereto, all in form and substance reasonably satisfactory
to the Lead Agent. Such documentation shall include, without
limitation, the organizational documents of the Borrower, as
amended, modified or supplemented prior to the Effective Date, each
certified to be true, correct and complete by an officer of the
Borrower, as of a date not more than twenty (20) days prior to the
Effective Date, together with a good standing certificate from the
Secretary of State (or the equivalent thereof) of the State of
Maryland with respect to
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the Borrower, to be dated not more than twenty (20) days prior to
the Effective Date;
(d) the Lead Agent shall have received all certificates, agreements
and other documents and papers referred to in this Amendment, unless
otherwise specified, in sufficient counterparts, satisfactory in
form and substance to the Administrative Agent in its reasonable
discretion;
(e) the Borrower shall have taken all actions required to authorize
the execution and delivery of this Amendment and the performance
hereof by the Borrower;
(f) the Lead Agent shall have received from the Borrower, for the
account of the Banks, an amendment fee equal to .30% of the
Commitments;
(g) the Lead Agent shall have received the reasonable fees and
expenses accrued through the Effective Date of Skadden, Arps, Slate,
Meagher & Flom LLP, together with any other fees or expenses of the
Lead Agent;
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(h) the representations and warranties of the Borrower contained in
the Credit Agreement, as amended hereby, shall be true and correct
in all material respects on and as of the Effective Date, as the
same may be amended by virtue of the Merger transactions with
Starwood described in the Proxy, dated September 22, 1999, a copy of
which has previously been delivered by the Borrower to the Banks
(the "PROXY");
(i) receipt by the Lead Agent and the Banks of a certificate of an
officer of the Borrower certifying that the Borrower is in
compliance with all covenants of the Borrower contained in the
Credit Agreement, as amended hereby, including, without limitation,
the requirements of Section 5.8, as of the Effective Date, as the
same may be amended by virtue of the Merger transactions with
Starwood described in the Proxy; and
(j) receipt by the Lead Agent of proof reasonably satisfactory to
the Lead Agent that Starwood shall have acquired by merger 100% of
the stock of the Borrower.
22. ENTIRE AGREEMENT. This Amendment constitutes the entire and final agreement
among the parties hereto with
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respect to the subject matter hereof and there are no other agreements,
understandings, undertakings, representations or warranties among the parties
hereto with respect to the subject matter hereof except as set forth herein.
23. GOVERNING LAW. This Amendment shall be governed by, and construed in
accordance with, the law of the State of New York.
24. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
agreement, and any of the parties hereto may execute this Amendment by signing
any such counterpart.
25. HEADINGS, ETC. Section or other headings contained in this Amendment are
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Amendment.
26. NO FURTHER MODIFICATIONS. Except as modified herein, all of the terms and
conditions of the Credit Agreement, as modified hereby shall remain in full
force and effect and, as modified hereby, the Borrower confirms and ratifies all
of the terms, covenants and conditions of the Credit Agreement in all respects.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective authorized officers as of the day and year
first above written.
BORROWER: TRINET CORPORATE REALTY TRUST, INC.
By:
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Name:
Title:
Facsimile number: (415) 391-6259
Address: One Embarcadero Center
33rd Floor
San Francisco, CA 94111
Attn: Chief Financial
Officer
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MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Bank and as resigning Lead Agent
By:
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Name:
Title:
12
BANK OF AMERICA, N.A., as a Bank
and as successor Lead Agent
By:
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Name:
Title:
600 Montgomery Street
37th Floor
Mail Code: CA5-801-37-01
San Francisco, CA 94111
Attention:
Telecopy:
DOMESTIC AND EURO-CURRENCY LENDING
OFFICE:
Attention:
Telecopy:
13
BANKERS TRUST COMPANY, as Co-Agent and as a Bank
By:
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Name:
Title:
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DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCHES,
as Bank and as Co-Agent
By:
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Name:
Title:
By:
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Name:
Title:
15
BANK ONE, NA (f/k/a The First National Bank of Chicago,
as a Bank, as Co-Agent, and as Syndication Agent
By:
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Name:
Title:
16
PNC BANK, NATIONAL ASSOCIATION, as a Bank
and as Co-Agent
By:
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Name:
Title:
17
AMSOUTH BANK
By:
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Name:
Title:
18
BANK OF MONTREAL, CHICAGO BRANCH
By:
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Name:
Title:
19
FIRST UNION NATIONAL BANK
By:
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Name:
Title:
20
UBS AG, STAMFORD BRANCH
By:
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Name:
Title:
By:
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Name:
Title:
21
KEY BANK NATIONAL ASSOCIATION
(f/k/a Society Bank)
By:
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Name:
Title:
22
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
LOS ANGELES AGENCY
By:
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Name:
Title:
23
COMMERZBANK AKTIENGESELLSCHAFT,
NEW YORK AND GRAND CAYMAN BRANCHES
By:
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Name:
Title:
By:
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Name:
Title:
24
BANQUE NATIONALE DE PARIS
By:
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Name:
Title: