Exhibit 10.1
SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
dated as of May 15, 2002
among
ESSEX PORTFOLIO, L.P.,
a California limited partnership,
THE LENDERS LISTED HEREIN,
BANK OF AMERICA, N.A.,
as Administrative Agent,
UNION BANK OF CALIFORNIA, N.A.,
and
BANK ONE, N.A.,
as Co-Syndication Agents,
and
BANC OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and Sole Book Manager
TABLE OF CONTENTS
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1. DEFINITIONS................................................................................. 2
1.1 Defined Terms...................................................................... 2
1.2 Other Interpretive Provisions...................................................... 15
2. LOAN AMOUNTS AND TERMS...................................................................... 17
2.1 Amount and Terms of Commitment..................................................... 17
2.2 Swing Line......................................................................... 18
2.3 Loan Accounts; Notes............................................................... 20
2.4 Procedure for Obtaining Credit..................................................... 20
2.5 Conversion and Continuation Elections.............................................. 21
2.6 Voluntary Termination or Reduction of Commitment................................... 22
2.7 Principal Payments................................................................. 23
2.8 Extension of Maturity Date......................................................... 24
2.9 Interest........................................................................... 24
2.10 Fees............................................................................... 25
2.11 Computation of Fees and Interest................................................... 26
2.12 Increase in Maximum Commitment Amount.............................................. 26
2.13 Payments by Borrower............................................................... 28
2.14 Payments by the Lenders to Administrative Agent.................................... 29
2.15 Sharing of Payments, Etc........................................................... 30
2.16 Defaulting Lender.................................................................. 30
2.17 Increases and Decreases in Pro Rata Shares......................................... 32
3. Taxes, Yield Protection and Illegality...................................................... 32
3.1 Taxes.............................................................................. 32
3.2 Illegality......................................................................... 33
3.3 Increased Costs and Reduction of Return............................................ 33
3.4 Funding Losses..................................................................... 34
3.5 Inability to Determine Rates....................................................... 35
3.6 Certificate of Lender.............................................................. 35
3.7 Survival........................................................................... 35
4. UNENCUMBERED ASSET POOL..................................................................... 35
4.1 Additions of Property to the Unencumbered Asset Pool............................... 35
4.2 Delivery of Information............................................................ 38
5. CONDITIONS TO DISBURSEMENTS................................................................. 39
5.1 Conditions to Initial Loans........................................................ 39
5.2 Conditions of Each Borrowing or Issuance of Letter of Credit....................... 40
6. COVENANTS OF BORROWER....................................................................... 41
6.1 Covenants Relating to Unencumbered Asset Pool...................................... 41
6.2 Payment of Expenses................................................................ 42
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6.3 Financial and Other Information; Certification................................. 43
6.4 Notices........................................................................ 45
6.5 Negative Covenants............................................................. 46
6.6 Type of Business; Development Covenants........................................ 47
6.7 Performance of Acts............................................................ 47
6.8 Keeping Guarantor Informed..................................................... 47
6.9 Maximum Total Liabilities to Gross Asset Value................................. 48
6.10 Unsecured Debt to Unencumbered Asset Value..................................... 48
6.11 Fixed Charge Coverage Ratio.................................................... 48
6.12 Consolidated Tangible Net Worth................................................ 48
6.13 Maximum Quarterly Dividends.................................................... 48
6.14 Negative Pledge................................................................ 48
6.15 Change in Ownership of Borrower or Management of the Unencumbered
Asset Pool Property............................................................ 49
6.16 Books and Records.............................................................. 49
6.17 Audits......................................................................... 49
6.18 Cooperation.................................................................... 49
6.19 ERISA Plans.................................................................... 49
6.20 Use of Proceeds................................................................ 50
6.21 Use of Proceeds - Ineligible Securities........................................ 50
6.22 Existing Convertible "Flipper" Loans........................................... 50
7. REPRESENTATIONS AND WARRANTIES.......................................................... 50
7.1 Organization of Borrower....................................................... 50
7.2 Authorization.................................................................. 50
7.3 Enforceable Agreement.......................................................... 50
7.4 Good Standing.................................................................. 51
7.5 No Conflicts................................................................... 51
7.6 Financial Information.......................................................... 51
7.7 Borrower Not a "Foreign Person"................................................ 51
7.8 Lawsuits....................................................................... 51
7.9 Permits, Franchises............................................................ 51
7.10 Other Obligations.............................................................. 52
7.11 Income Tax Returns............................................................. 52
7.12 No Event of Default............................................................ 52
7.13 ERISA Plans.................................................................... 52
7.14 Location of Borrower........................................................... 52
7.15 No Required Third Party/Governmental Approvals................................. 52
8. DEFAULT AND REMEDIES.................................................................... 52
8.1 Events of Default.............................................................. 52
8.2 Remedies....................................................................... 54
8.3 Rights Not Exclusive........................................................... 55
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9. REFERENCE AND ARBITRATION............................................................. 55
9.1 Mandatory Arbitration........................................................ 55
9.2 Judicial Reference........................................................... 55
9.3 Provisional Remedies; Self-Help.............................................. 55
10. THE ADMINISTRATIVE AGENT.............................................................. 56
10.1 Appointment and Authorization of Administrative Agent........................ 56
10.2 Administrative Agent's Powers................................................ 56
10.3 Limitation on Administrative Agent's Duties.................................. 56
10.4 Liability of Administrative Agent............................................ 57
10.5 Co-Agents.................................................................... 57
10.6 Credit Decision.............................................................. 57
10.7 Indemnification; Cost and Expenses........................................... 58
10.8 Administrative Agent in its Individual Capacity.............................. 58
10.9 Notice of Default............................................................ 58
10.10 Successor Administrative Agent............................................... 59
10.11 Withholding Tax.............................................................. 59
11. MISCELLANEOUS PROVISIONS.............................................................. 60
11.1 Amendments and Waivers....................................................... 60
11.2 Notices...................................................................... 61
11.3 Attorneys' Fees.............................................................. 61
11.4 Indemnity.................................................................... 62
11.5 Assignments and Participations............................................... 62
11.6 Confidentiality.............................................................. 64
11.7 Heirs, Successors and Assigns................................................ 64
11.8 No Third Parties Benefited................................................... 65
11.9 Payments Set Aside........................................................... 65
11.10 Interpretation............................................................... 65
11.11 Miscellaneous................................................................ 65
11.12 Governing Law................................................................ 65
11.13 Counterparts................................................................. 65
11.14 Integration and Relation to Loan Commitment.................................. 65
11.15 Actions...................................................................... 66
11.16 Relationships with Other Customers........................................... 66
11.17 Amendment and Restatement; Termination of Co-Lender Agreement................ 66
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TABLE OF CONTENTS
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EXHIBITS
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Exhibit A Unencumbered Asset Pool
Exhibit B Form of Borrowing Notice
Exhibit C Form of Letter of Credit Agreement
Exhibit D-1 Form of Supplemental Signature Page (Existing Co-Lender)
Exhibit D-2 Form of Supplemental Signature Page (New Co-Lender)
Exhibit E Form of Compliance Certificate
Exhibit F Form of Assignment and Assumption
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EXHIBIT 10.1
SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT, dated as
of May 15, 2002 (this "Agreement"), is among Essex Portfolio, L.P., a California
limited partnership ("Borrower"), the several financial institutions from time
to time party to this Agreement (collectively, the "Lenders" and individually, a
"Lender"), BANK OF AMERICA, N.A., as administrative agent for the Lenders (in
such capacity, "Administrative Agent"), and BANC OF AMERICA Securities LLC, a
Delaware limited liability company, as sole lead arranger and sole book manager
(the "Arranger").
Factual Background
A. Certain of the Lenders have previously made available to Borrower
an unsecured revolving line of credit in the maximum principal amount of
$120,000,000 (the "Credit Line") on the terms and subject to the conditions set
forth in that certain First Amended and Restated Revolving Loan Agreement dated
as of May 16, 2000, among Borrower, the financial institutions party thereto and
Bank of America, N.A., as administrative agent for the lenders, as modified by
that certain First Amended and Restated Modification Agreement to Syndicate
$120,000,000 Revolving Loan among Borrower, the financial institutions party
thereto, and Bank of America, N.A., as administrative agent for the lenders (as
modified, the "Existing Agreement"), to be used for the interim financing of
acquisitions, for general working capital, to provide letters of credit, and for
other purposes permitted by Borrower's organizational documents other than the
repurchase of Guarantor's common stock.
B. Essex Property Trust, Inc., a Maryland corporation and Borrower's
general partner, has guaranteed Borrower's obligations under the Existing
Agreement.
C. Under the Existing Agreement, Bank of America, N.A. has a pro rata
share of 29.1666666666667%, representing a maximum commitment of $35,000,000;
Union Bank California, N.A. has a pro rata share of 20.8333333333333%,
representing a maximum commitment of $25,000,000; Bank One, N.A. has a pro rata
share of 20.8333333333333%, representing a maximum commitment of $25,000,000;
Comerica Bank has a pro rata share of 16.6666666666667%, representing a maximum
commitment of $20,000,000; and KeyBank National Association has a pro rata share
of 12.50%, representing a maximum commitment of $15,000,000.
D. In connection with the Existing Agreement, Borrower, the financial
institutions party thereto, Bank of America, N.A., as administrative agent for
the lenders, and certain other parties entered into that certain First Amended
and Restated Co-Lender Agreement dated as of May 16, 2000 (the "Co-Lender
Agreement").
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Borrower has requested that the Lenders and Administrative Agent modify the
Existing Agreement to, among other things, extend the term and increase the
maximum principal amount of the Credit Line to $165,000,000. The Lenders and
Administrative Agent are willing to modify the Credit Line on the terms and
subject to the conditions set forth in this Agreement, which amends and restates
the Existing Agreement in full, with the pro rata shares of the Lenders adjusted
so that Bank of America, N.A. has a pro rata share of 15.1515151515152%,
representing a maximum commitment of $25,000,000; Union Bank California, N.A.
has a pro rata share of 15.1515151515152%, representing a maximum commitment of
$25,000,000; Bank One, N.A. has a pro rata share of 15.1515151515152%,
representing a maximum commitment of $25,000,000; Comerica Bank has a pro rata
share of 12.1212121212121%, representing a maximum commitment of $20,000,000;
KeyBank National Association has a pro rata share of 12.1212121212121%,
representing a maximum commitment of $20,000,000; Dresdner Bank AG, New York and
Grand Cayman Branches, has a pro rata share of 10.6060606060606%, representing a
maximum commitment of $17,500,000; PNC Bank, National Association has a pro rata
share of 10.6060606060606%, representing a maximum commitment of $17,500,000;
and Chevy Chase Bank, F.S.B. has a pro rata share of 9.0909090909090%,
representing a maximum commitment of $15,000,000.
Agreement
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, the parties agree as follows:
1. DEFINITIONS.
1.1 Defined Terms. In addition to the terms defined elsewhere in this
Agreement, the following terms have the following meanings:
"Administrative Agent" means Bank of America, N.A., in its capacity as
administrative agent for the Lenders hereunder, and any successor administrative
agent designated under Section 10.10.
"Affiliate" means, with respect to a specified Person, any other
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the specified Person.
"Control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Agent-Related Persons" means BankAmerica and any successor
administrative agent hereunder, together with their respective Affiliates and
the officers, directors, employees, and agents of such Persons.
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"Agent's Payment Office" means the address for payments set forth
herein for Administrative Agent, or such other address as Administrative Agent
may from time to time specify by the delivery of a written notice.
"Agreement" means this Second Amended and Restated Revolving Credit
Agreement, as supplemented, modified, amended or amended and restated from time
to time.
"Applicable LIBOR Margin" means the Applicable Margin for LIBOR Loans.
"Applicable Margin" means the Applicable LIBOR Margin or the
Applicable Reference Rate Margin determined from the following pricing grid
based on the current published or private pro forma ratings of Guarantor's
senior long term debt by the Rating Agencies:
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LIBOR PER ANNUM REFERENCE
MARGIN FACILITY Rate
GUARANTOR'S SENIOR UNSECURED LONG TERM DEBT RATING (BPS) FEE (BPS) MARGIN (BPS)
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BBB+/Baa1 or better 100 15 0
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BBB/Baa2 105 17.5 0
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BBB-/Baa3 110 20 0
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Less than BBB-/Baa3 150 25 25
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Borrower shall provide to the Administrative Agent annually, on or before June
30, written evidence of the current rating on Guarantor's senior long term debt
by the Rating Agencies, which evidence shall be reasonably acceptable to the
Administrative Agent. In the event of a difference in rating between the Rating
Agencies, the Applicable Margin shall be based on the lower rating. Changes in
the Applicable Margin shall become effective on the first day following the date
on which one or both of the Rating Agencies changes the rating on Guarantor's
senior long term debt.
"Applicable Reference Rate Margin" means the Applicable Margin for
Reference Rate Loans.
"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.
"Arranger" has the meaning given to it in the introductory paragraph
of this Agreement.
"Availability" means, at any time, an amount equal to the least of (a)
fifty percent (50%) of the Unencumbered Asset Pool Value at such time, (b) the
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Unencumbered Asset Pool Mortgage Value at such time, or (c) the Maximum
Commitment Amount at such time.
"BankAmerica" means Bank of America, N.A.
"Borrowing" means any borrowing hereunder consisting of Loans (other
than a Swing Loan) of the same Type made by the Lenders to Borrower on the same
day under Article 2 and, other than in the case of Reference Rate Loans, having
the same Interest Period, but does not include (a) a conversion of Loans of one
Type to another Type or (b) a continuation of a Loan as a Loan of the same Type,
but with a new Interest Period.
"Borrowing Notice" means a notice substantially in the form of Exhibit
B given by Borrower to Administrative Agent pursuant to Section 2.4.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in New York, New York, or San Francisco,
California, are authorized or required by law to close and, if the applicable
Business Day relates to any LIBOR Loan, means such a day on which dealings are
carried on in the applicable offshore dollar interbank market.
"Capital Adequacy Regulation" means any guideline or directive of any
central bank or other Governmental Authority, or any other law, rule or
regulation regarding capital adequacy of any Lender or of any corporation
controlling a Lender.
"Capital Interest" means, with respect to any Joint Venture, the ratio
of (i) Borrower's contribution to the capital of such Joint Venture to (ii) the
aggregate amount of all contributions to the capital of such Joint Venture.
"Capitalization Rate" means eight and three-fourths percent (8.75%);
provided, however, that if Borrower satisfies all of the extension conditions
set forth in Section 2.8 and the Maturity Date is extended, all of the Lenders
may, in their reasonable discretion, adjust the Capitalization Rate applicable
to the period from and after the initial Maturity Date by up to one-quarter of
one percent (0.25%).
"Closing Date" means the earliest date on which all conditions
precedent set forth in Section 5.1 are satisfied or waived by Administrative
Agent.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Co-Lender Agreement" has the meaning given to it in Recital D.
"Commitment" means, as to any Lender, the amount of the credit and the
outstanding Loans for which such Lender is obligated.
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"Conversion/Continuation Notice" means a notice substantially in the
form of Exhibit B completed for a conversion or continuation of LIBOR Loans and
given by Borrower to Administrative Agent pursuant to Section 2.5.
"Credit Line" has the meaning given to it in Recital A.
"Debt Service" means the sum of (x) the aggregate interest payments,
Letter of Credit fees and other fees paid or payable in respect of or relating
to debt on a property, plus (y) the aggregate principal installments paid and
payable (but not payments due at maturity) in respect of or relating thereto.
"Debt Service Coverage Ratio" means, for the Unencumbered Asset Pool
at any time, the ratio of (a) the sum of (x) the Net Operating Income for the
four (4) most recent full consecutive calendar quarters for each of the
Unencumbered Asset Pool Properties that Borrower has owned for four (4) or more
full consecutive calendar quarters, and (y) the annualized Net Operating Income
for the most recent number of full consecutive calendar quarters that Borrower
has owned each Unencumbered Asset Pool Property that Borrower has owned for more
than one (1) full calendar quarter but less than four (4) full calendar
quarters, less, in each case, a $250 per unit capital expense reserve, divided
by (b) a calculated debt service payment based on the greater of (i) an eight
and eighty-one one-hundredths percent (8.81%) mortgage constant (8.0% per annum
rate; 30 year amortization) or (ii) the seven year United States treasury rate
plus one hundred seventy-five basis points (1.75%).
"Default" means any event or circumstance which, with notice or the
passage of time or both, would become an Event of Default.
"Default Rate" means the per annum rate of interest that is 300 basis
points in excess of the rate otherwise applicable.
"Defaulting Lender" has the meaning given to it in Section 2.14.2.
"EBITDA" means, for any fiscal period of Guarantor and its
consolidated subsidiaries, (a) the sum for such period of (i) consolidated net
income, (ii) consolidated interest expense (including capitalized interest
expense); (iii) consolidated charges against income for all federal, state and
local taxes based on income, (iv) consolidated depreciation expense, (v)
consolidated amortization expense, (vi) the aggregate amount of other non-cash
charges and expenses, and (vii) the aggregate amount of extraordinary losses
included in the determination of consolidated net income for such period, less
(b) the aggregate amount of extraordinary gains included in the determination of
consolidated net income for such period, and in each case excluding Minority
Interests, all as determined in accordance with GAAP, consistently applied. For
purposes of this definition, EBITDA includes Borrower's pro rata shares of
interest expense, federal, state and local taxes based on income, depreciation
expense and amortization expense for Joint Ventures, based on its Capital
Interests in such Joint Ventures.
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"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)
approved by (i) the Administrative Agent, and (ii) unless an Event of Default
has occurred and is continuing, Borrower (each such approval not to be
unreasonably withheld or delayed); provided, however, that notwithstanding the
foregoing, "Eligible Assignee" shall not include Borrower or any of Borrower's
Affiliates or subsidiaries. Approval by Administrative Agent or, if required, by
Borrower of any Person as an Eligible Assignee shall not constitute a waiver of
any right to approve any other Person before such other Person can become an
Eligible Assignee.
"EMC" means Essex Management Corporation, a California corporation.
"Environmental Laws" means all federal, state, and local laws,
ordinances and regulations relating to any Hazardous Substance, including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C.ss. 9601 et seq., the Hazardous Materials Transportation Act,
49 U.S.C.ss. 1802, et seq., the Resource Conservation and Recovery Act, 42
U.S.C.ss. 6901 et seq., the Toxic Substance Control Act of 1976, as amended, 15
U.S.C.ss. 2601 et seq., the Clean Water Act, 33 U.S.C.ss. 466 et seq., as
amended, and the Clean Air Act, 42 U.S.C.ss. 7401 et seq.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Event of Default" means any of the events or circumstances specified
in Section 8.1.
"Existing Agreement" has the meaning given to it in Recital A.
"Federal Funds Rate" means, for any day, the rate published by the
Federal Reserve Bank of New York for the preceding Business Day as "Federal
Funds (Effective)" (or, if not published, the arithmetic mean of the rates for
overnight Federal Funds arranged prior to 9:00 a.m. (New York City time) on that
day quoted by three (3) brokers of Federal Funds in New York City as determined
by Administrative Agent).
"Fee Letter" has the meaning given to it in Section 2.10.3.
"Fixed Charges" means, for any fiscal period of Guarantor and its
consolidated subsidiaries, the sum of the following items for such period
(including Borrower's share of each such item for each Joint Venture): (i)
interest expense (whether paid or accrued), (ii) capitalized interest expense,
(iii) preferred stock dividends, (iv) scheduled principal payments other than
balloon payments, and (v) a reserve for recurring capital expenditures in an
amount equal to sixty-two dollars and fifty cents ($62.50) per quarter per unit
(computed based on the average number of units owned during such period).
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"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.
"GAAP" means generally accepted accounting principles set forth from
time to time 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 agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of, or pertaining to,
government, and any entity owned or controlled, through capital ownership or
otherwise, by any of the foregoing.
"Gross Asset Value" means, at any time, the sum (without duplication)
of (i) an amount equal to EBITDA for Guarantor and its consolidated subsidiaries
for the most recent fiscal quarter for which the Administrative Agent has
received financial statements (excluding any income attributable to properties
bought or sold during such fiscal quarter and any income received during such
fiscal quarter attributable to the Clarewood Office Building located at
22110-22120 Clarendon Street, Woodland Hills, California, and the office
building located at 925 East Meadow Drive; Palo Alto, California), multiplied by
four (4) and divided by the Capitalization Rate (expressed as a decimal), (ii)
the amount of cash and marketable securities held by Guarantor and its
consolidated subsidiaries as of the end of such fiscal quarter, (iii) the
aggregate acquisition cost of properties acquired by Guarantor or any of its
consolidated subsidiaries during such fiscal quarter (including Borrower's pro
rata shares of any properties acquired by Joint Ventures, based on its Capital
Interests in such Joint Ventures), (iv) the aggregate book value of all
development in progress as of the end of such fiscal quarter (including
Borrower's pro rata share of development in progress held by Joint Ventures,
based on its Capital Interests in such Joint Ventures), as reported on
Guarantor's 10K and 10Q, (v) $4,500,000, if Borrower owns the Clarewood Office
Building located at 22110-22120 Clarendon Street, Woodland Hills, California at
such time, and (vi) $4,500,000, if Borrower owns the office building located at
925 East Meadow Drive; Palo Alto, California at such time.
"Guarantor" means Essex Property Trust, Inc., a Maryland corporation
operating as a real estate investment trust.
"Guaranty" means that certain Amended and Restated Payment Guaranty of
even date herewith executed by Guarantor.
"Guaranty Obligation" means, as applied to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary obligations") of
another Person. The amount of
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any Guaranty Obligation shall be deemed equal to the stated or determinable
amount of the primary obligation in respect of which such Guaranty Obligation is
made or, if not stated or if indeterminable, the maximum reasonably anticipated
liability in respect thereof.
"Hazardous Substance" means any substance, material or waste,
including asbestos and petroleum (including crude oil or any fraction thereof),
which is or becomes designated, classified or regulated as "toxic," "hazardous,"
a "pollutant" or similar designation under any federal, state or local law,
regulation or ordinance.
"Indebtedness" of any Person means, without duplication, (a)
all indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services; (c) all
reimbursement obligations with respect to surety bonds, letters of credit and
similar instruments; (d) all obligations evidenced by notes, bonds, debentures
or similar instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or businesses; (e) all
indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to
property acquired by the Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property); (f) all indebtedness referred to in
clauses (a) through (e) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property owned by such Person, even though such Person has
not assumed or become liable for the payment of such Indebtedness; and (g) all
Guaranty Obligations in respect of indebtedness or obligations of others of the
kinds referred to in clauses (a) through (e) above.
"Indemnified Liabilities" has the meaning given to it in
Section 11.4.
"Indemnified Person" has the meaning given to it in Section
11.4.
"Insolvency Proceeding" means (a) any case, action or
proceeding before any court or other Governmental Authority relating to
bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the benefit
of creditors, composition, marshaling of assets for creditors or other similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors; in each case (a) and (b) undertaken under U.S. federal, state or
foreign law, including the United States Bankruptcy Code (11 U.S.C. ss.101 et
seq.).
"Interest Payment Date" means (a) the first Business Day of
each month for interest due through the last day of the preceding month, (b) the
Maturity Date, and (c) the date of any prepayment of any Loan made hereunder, as
to the amount prepaid.
"Interest Period" means, with respect to any LIBOR Loan, the
period commencing on the Business Day the Loan is disbursed or continued or on
the Conversion Date on which the Loan is converted to a LIBOR Loan and ending on
the
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date that is one (1), two (2), three (3) or six (6) months thereafter, as
selected by Borrower in its Borrowing Notice or Conversion/Continuation Notice;
provided that:
(a) if any Interest Period pertaining to a LIBOR Loan
would otherwise end on a day that is not a Business Day, that Interest Period
shall be extended to the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the immediately preceding Business
Day; and
(b) any Interest Period pertaining to a LIBOR 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.
"Joint Venture" means a Person in which Borrower has an
ownership interest that is less than one hundred percent (100%).
"Joint Venture Investments" means the aggregate amount of
Borrower's investments (valued in accordance with GAAP), advances and loans to
Joint Ventures unconsolidated under GAAP, excluding investments in such Joint
Ventures in which Borrower's Capital Interest is less than fifteen percent
(15%).
"Lenders" means BankAmerica and the several additional
financial institutions from time to time a party to this Agreement.
"Lending Office" means, as to any Lender, the office specified
as its Lending Office on the signature pages hereto, or such other office as
such Lender may designate to Borrower and Administrative Agent in writing from
time to time.
"Letter of Credit" means a standby letter of credit issued by
BankAmerica for Borrower's account pursuant to Section 2.1.
"Letter of Credit Agreement" has the meaning given to it in
Section 2.1.
"Leverage Ratio" means, as of any date of determination, the
ratio of (a) Total Liabilities as of such date to (b) Gross Asset Value as of
such date.
"LIBOR Base Rate" has the meaning set forth in the definition
of LIBOR Rate.
"LIBOR Borrowing" means a Borrowing consisting of LIBOR Loans.
"LIBOR Loan" means a Loan that bears interest based on the
LIBOR Rate.
"LIBOR Rate" means, for any Interest Period with respect to
any LIBOR Loan, a rate per annum determined by Administrative Agent pursuant to
the following formula:
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LIBOR Base Rate
LIBOR Rate = ---------------------------------
1.00 - LIBOR Reserve Percentage
Where,
"LIBOR Base Rate" means, for such Interest Period:
(a) the rate per annum equal to the rate determined by
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
(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
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 LIBOR Loan being made,
continued or converted by Bank of America and with a term equivalent to
such Interest Period would be offered by Bank of America'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.
"LIBOR Reserve Percentage" means, for any day during any
Interest Period, the reserve percentage (expressed as a decimal, carried out to
five decimal places) in effect on such day, whether or not applicable to any
Lender, under regulations issued from time to time by the FRB for determining
the maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to LIBOR funding (currently referred
to as "LIBOR liabilities"). The LIBOR Rate for each outstanding LIBOR Loan shall
be adjusted automatically as of the effective date of any change in the LIBOR
Reserve Percentage.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preference, priority or other security interest or
preferential arrangement of any kind or nature whatsoever (including those
created by, arising under or evidenced by any
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conditional sale or other title retention agreement, the lessor's interest under
a capital lease (determined in accordance with GAAP), any financing lease having
substantially the same economic effect as any of the foregoing, or the filing of
any financing statement under the UCC or any comparable law naming the owner of
the asset to which such lien relates as debtor) and any contingent or other
agreement to provide any of the foregoing, but not including the interest of a
lessor under an operating lease (determined in accordance with GAAP).
"Loan" means an extension of credit by a Lender to Borrower
pursuant to Article 2, and may be a Reference Rate Loan, a LIBOR Loan or, in the
case of the Swing Line Lender, a Swing Loan.
"Loan Documents" means this Agreement, the Swing Line Note,
the Note, the Guaranty and any other documents delivered to Administrative
Agent, on behalf of the Lenders, in connection therewith, in each case as
supplemented, modified, amended or amended and restated from time to time.
"Maturity Date" means May 1, 2004, as the same may be extended
pursuant to Section 2.8.
"Maximum Commitment Amount" means, at any time, an amount
equal to $165,000,000.00, subject to increase pursuant to, and on the terms and
subject to the conditions set forth in, Section 2.12, and to decrease pursuant
to the provisions of Section 2.6.
"Minority Interest" means Borrower's interest in a Person in
which Borrower has an ownership interest whose financial results are not
consolidated with those of Borrower for financial reporting purposes.
"Net Operating Income" for a property means, for the relevant
period, the aggregate total cash revenues actually collected from the normal
operation of such property (excluding all security deposits until such time as
the tenant or other user making such deposit is no longer entitled to return
thereof), plus amounts payable to unrelated third parties on behalf of the owner
of the property, if actually paid, plus the proceeds of any rental or business
interruption insurance actually received by the owner of the property with
respect to such property, from which there shall be deducted all costs and
expenses paid or payable by the owner and relating to such property (other than
Debt Service which is paid and payments made at maturity), including (a) any
charges paid in connection with the use, ownership or operation of such
property, (b) any cost of repairs and maintenance, (c) any cost associated with
the management of such property, (d) any payroll cost and other expenses for
general administration and overhead paid in connection with the use, ownership
or operation of such property, (e) current real estate taxes, (f) any sums paid
or subject to payment in the nature of a rebate, refund or other adjustment to
revenue previously collected, (g) all assessment bond indebtedness (whether
principal or interest) in respect of such property paid or payable for the
interval in question, (h) all amounts paid to unrelated third parties on behalf
of the owner of the property, and (i) any and all costs or expenses, of whatever
nature or kind, incurred in
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connection with the use, ownership or operation of the property; provided,
however, that such costs and expenses paid or payable by Borrower and relating
to such property shall not include tenant improvement costs, leasing commissions
or the costs and expenses of capital improvements and capital repairs, or
depreciation, amortization or other non-cash expenses.
"Nominated Property" has the meaning given to it in Section
4.1(a).
"Note" means a promissory note of Borrower payable to the
order of a Lender, and any amendments, supplements, modifications, renewals,
replacements, consolidations or extensions thereof, evidencing the aggregate
indebtedness of Borrower to a Lender resulting from Loans made by such Lender
pursuant to this Agreement; "Notes" means, at any time, all of the Notes (other
than the Swing Line Note) executed by Borrower in favor of a Lender outstanding
at such time.
"O&M Plan" means an operations and maintenance plan relating
to any asbestos containing materials.
"Obligations" means all Loans, advances, debts, liabilities,
obligations and covenants owing from Borrower to any Lender, Administrative
Agent or any Indemnified Person under any Loan Document, whether absolute or
contingent, due or to become due, now existing or hereafter arising.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
"Per Annum Facility Fee" has the meaning given to it in the
pricing grid for the defined term "Applicable Margin."
"Permitted Liens" has the meaning given to it in Section
4.1(a)(5).
"Person" means an individual, corporation, partnership, joint
venture, limited liability company, joint stock company, business trust,
unincorporated association or Governmental Authority.
"Plan" means any employee pension benefit plan maintained or
contributed to by Borrower and insured by the Pension Benefit Guaranty
Corporation under Title IV of ERISA.
"Pro Rata Share" means, as to any Lender at any time, the
percentage equivalent (expressed as a decimal rounded to the ninth decimal
place) at such time of such Lender's share of the credit and the outstanding
Loans.
"Rating Agencies" means, collectively, (1) Standard & Poor's,
and (2) either (i) Moody's or (ii) Fitch.
"Reference Rate" means the rate of interest publicly announced
from time to time by Administrative Agent at its offices in Charlotte, North
Carolina as its
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"Reference Rate." The Reference Rate is set by Administrative Agent based on
various factors, including Administrative Agent's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing loans. Administrative Agent may price loans at, above or below the
Reference Rate. Any change in the Reference Rate shall take effect on the day
specified in the public announcement of such change. In the event that
Administrative Agent no longer announces a "Reference Rate", the Reference Rate
will be a per annum rate of interest equal to fifty (50) basis points above the
Federal Funds Rate, with changes in the Reference Rate from time to time taking
effect on the same date as corresponding changes in the Federal Funds Rate.
"Reference Rate Borrowing" means a Borrowing consisting of
Reference Rate Loans.
"Reference Rate Loan" means a Loan that bears interest based
on the Reference Rate.
"Required Lenders" means at any time two (2) or more Lenders
then holding at least sixty-six and two-thirds percent (66.67%) of the then
aggregate unpaid principal amount of the Loans (not including any Swing Loan)
(or, if no principal amount is then outstanding, two (2) or more Lenders then
having at least sixty-six and two-thirds percent (66.67%) of the aggregate
amount of the Commitment).
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation, or any determination of an
arbitrator or of a Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject.
"Secured Debt" means Indebtedness for money borrowed that is
secured by a Lien encumbering property owned or leased by the obligor.
"Swing Line" has the meaning given to it in Section 2.2.1.
"Swing Line Availability" means, at any time, the lesser of
(a) Twenty-Five Million Dollars ($25,000,000.00) or (b) the difference between
(i) the Availability at such time and (ii) the aggregate principal amount of
Loans (other than Swing Loans) outstanding at such time.
"Swing Line Lender" means BankAmerica, in its capacity as the
maker of Swing Loans under Section 2.2.
"Swing Line Note" means the promissory note of Borrower
payable to the order of the Swing Line Lender to evidence the Swing Loans, and
any amendments, supplements, modifications, renewals, replacements,
consolidations or extensions thereof.
"Swing Loan" and "Swing Loans" have the meanings given to them
in Section 2.2.1.
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"Tangible Net Worth" means at any time, the total consolidated
stockholders' equity of Guarantor at such time, excluding as assets (i) any
loans to tenants for tenant improvements and (ii) goodwill and other intangible
assets, and valuing all real property at book value, as evidenced by Guarantor's
most recently delivered consolidated financial statements.
"Total Liabilities" means, without duplication, all
Indebtedness of Guarantor and its consolidated subsidiaries, including
subordinated debt, capitalized leases, purchase obligations (defined as
nonrefundable deposits and non-contingent obligations), and unfunded obligations
of Borrower reported in accordance with GAAP, Borrower's pro rata share of
non-recourse liabilities of unconsolidated Joint Ventures, based on its Capital
Interests in such Joint Ventures, and all liabilities of unconsolidated
affiliates that are recourse to Borrower or Guarantor. The term "Total
Liabilities" does not include that portion of minority interests attributable to
ownership in Borrower by Persons other than Guarantor.
"Type" means, in connection with a Loan, the characterization
of such loan as a Reference Rate Loan or a LIBOR Loan.
"UCC" means the Uniform Commercial Code as in effect in any
jurisdiction, as the same may be amended, modified or supplemented from time to
time.
"Unencumbered Asset Pool" means, at any time, all of the
Unencumbered Asset Pool Properties at such time.
"Unencumbered Asset Pool Mortgage Value" means, at any time,
the sum of (i) the maximum mortgage amount supportable by the Unencumbered Asset
Pool at such time (excluding Unencumbered Asset Pool Properties owned by
Borrower for less than one (1) full calendar quarter at such time) at a 1.75:1.0
Debt Service Coverage Ratio plus (ii) fifty percent (50%) of aggregate
acquisition cost of Unencumbered Asset Pool Properties owned by Borrower for
less than one (1) full calendar quarter at such time.
"Unencumbered Asset Pool Property" means a real property
listed on Exhibit A and any additional real property that satisfies all of the
conditions set forth in Section 4.1(a), in each case so long as Borrower holds
fee simple title to such real property.
"Unencumbered Asset Pool Value" means, at any time, an amount
equal to the sum of the Unencumbered Asset Value at such time for each
Unencumbered Asset Pool Property at such time.
"Unencumbered Asset Value" means, for an Unencumbered Asset
Pool Property at any time,
(a) if at such time Borrower has owned such Unencumbered Asset
Pool Property (other than the properties commonly known as The Essex and
Vista del Mar) for four (4) or more full consecutive calendar quarters, an
amount equal to (i) its Net
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Operating Income for the most recent four (4) consecutive quarter period,
less a $250 per unit capital reserve, divided by (ii) the Capitalization
Rate (expressed as a decimal);
(b) if at such time Borrower has owned such Unencumbered Asset Pool
Property (other than the properties commonly known as The Essex and Vista
del Mar) for one (1) full calendar quarter or more but fewer than four (4)
full consecutive calendar quarters, an amount equal to (i) its annualized
Net Operating Income for the number of the most recent full consecutive
quarters that Borrower has owned such property (e.g., Net Operating Income
for properties owned for two (2) full consecutive quarters is annualized by
multiplying by a factor of two (2)), less a $250 per unit capital reserve,
divided by (ii) the Capitalization Rate (expressed as a decimal);
(c) if at such time Borrower has owned such Unencumbered Asset Pool
Property for less than one (1) full calendar quarter, an amount equal to its
acquisition cost; or
(d) for the property commonly known as The Essex, an amount equal to
fifty percent (50%) of cost (to be determined upon completion); and for the
property commonly known as Vista del Mar, an amount equal to fifty percent
(50%) of cost (to be determined upon completion).
"Unsecured Debt" means, at any time, all Indebtedness of Borrower,
Guarantor and any wholly owned subsidiary of Borrower or Guarantor for money
borrowed that is not Secured Debt at the end of Guarantor's most recent fiscal
quarter.
Terms capitalized in this Agreement and not defined in this Section
1 have the meanings given to them elsewhere in this Agreement.
1.2 Other Interpretive Provisions.
1.2.1 Use of Defined Terms. Unless otherwise specified herein or
therein, all terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant to
this Agreement. The meaning of defined terms shall be equally applicable to the
singular and plural forms of the defined terms.
1.2.2 Certain Common Terms.
(1) The Agreement. The words "hereof," "herein," "hereunder"
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
section, schedule and exhibit references are to this Agreement unless otherwise
specified.
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(2) Documents. The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(3) Including. The term "including" is not limiting and means
"including without limitation."
(4) Performance. Whenever any performance obligation hereunder
(including a payment obligation) is stated to be due or required to be satisfied
on a day other than a Business Day, such performance shall be made or satisfied
on the next succeeding Business Day. In the computation of periods of time from
a specified date to a later specified date (other than with respect to
computation of interest owed or accrued under this Agreement), the word "from"
means "from and including" and the words "to" and "until" each mean "to and
including". If any provision of this Agreement refers to any action taken or to
be taken by any Person, or which such Person is prohibited from taking, such
provision shall be interpreted to encompass any and all reasonable means, direct
or indirect, of taking or not taking such action.
(5) Contracts. Unless otherwise expressly provided in this
Agreement, references to agreements and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document.
(6) Laws. References to any statute or regulation are to be
construed as including all statutory and regulatory provisions consolidating,
amending or replacing the statute or regulation.
(7) Captions. The captions and headings of this Agreement are for
convenience of reference only, and shall not affect the construction of this
Agreement.
(8) Independence of Provisions. If a conflict exists between the
terms of this Agreement and those of any other Loan Document, this Agreement
shall prevail; provided, however, that the parties acknowledge that this
Agreement and the other Loan Documents may use several different limitations,
tests or measurements to regulate the same or similar matters, and that such
limitations, tests and measurements are cumulative and must each be performed,
except as expressly stated to the contrary in this Agreement, or unless the
applicable provisions are inconsistent or cannot be simultaneously enforced or
performed.
(9) Exhibits. All of the exhibits attached to this Agreement are
incorporated herein by this reference.
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1.2.3 Accounting Principles.
(1) Accounting Terms. Unless the context otherwise clearly
requires, all accounting terms not otherwise expressly defined herein shall be
construed, and all financial computations required under this Agreement shall be
made, in accordance with GAAP, consistently applied.
(2) Fiscal Periods. References herein to "fiscal year" and
"fiscal quarter" refer to such fiscal periods of Guarantor and its consolidated
subsidiaries.
2. LOAN AMOUNTS AND TERMS.
2.1 Amount and Terms of Commitment. Each Lender severally agrees, on
the terms and subject to the conditions hereinafter set forth,
(a) to make Loans to Borrower from time to time on any Business
Day during the period from the Closing Date to the Maturity Date to be used for
the interim financing of acquisitions, for general working capital, and for
other purposes permitted by Borrower's organizational documents other than the
repurchase of Guarantor's common stock, in an aggregate amount not to exceed
such Lender's Pro Rata Share of the Availability, and
(b) to fund drawings on any Letters of Credit that BankAmerica
issues for Borrower's account from time to time, in an aggregate amount not to
exceed at any time outstanding such Lender's Pro Rata Share of the amount of
such drawing. On the date that BankAmerica issues a Letter of Credit for
Borrower's account, each Lender shall be deemed to have unconditionally and
irrevocably purchased from BankAmerica a pro rata risk participation in the
stated amount of such Letter of Credit, without recourse or warranty, in an
amount equal to such Lender's Pro Rata Share of the stated amount of such Letter
of Credit.
BankAmerica agrees to issue Letters of Credit in its standard form for the
account of Borrower or any Joint Venture on any Business Day during the period
from the Closing Date to the Maturity Date, for any purpose for which Borrower
can obtain Loans under this Agreement, in an aggregate amount not to exceed
Twenty Million Dollars ($20,000,000.00) at any time outstanding; provided,
however, that no Letter of Credit shall have an expiry date (or shall have an
"evergreen" or other extension provision that results in a final expiry date)
that is not later than thirty (30) days prior to the then-applicable Maturity
Date.
Each Letter of Credit issued hereunder (including any supplement,
modification, amendment, renewal or extension thereof) will be issued pursuant
to BankAmerica's standard form of Application and Agreement for Letter(s) of
Credit (a "Letter of Credit Agreement"), substantially in the form attached
hereto as Exhibit C, which will set forth the agreement between the account
party and BankAmerica regarding the Letter of Credit and drawings thereunder.
Pursuant to each Letter of Credit Agreement, Borrower shall repay drawings under
a Letter of Credit to Administrative
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Agent, for the account of Lenders, on demand. Reimbursement of drawings under
any Letter of Credit issued for the account of a Person other than Borrower
shall be the responsibility of, and shall create an obligation of, Borrower and
any guarantor, including Guarantor.
Notwithstanding any contrary provision of this Agreement, the
aggregate principal amount of all outstanding Loans shall not at any time exceed
the Availability, and the aggregate amount of outstanding but undrawn Letters of
Credit shall be considered a portion of the principal amount outstanding on the
Loans for purposes of determining (x) the amount of Availability remaining
available for disbursement and (y) mandatory repayments under Section 2.7.2.
Within the limits of the Availability, and subject to the other terms and
conditions hereof, Borrower may borrow under this Section 2.1 prior to the
Maturity Date, repay pursuant to Section 2.7 and reborrow pursuant to this
Section 2.1 prior to the Maturity Date.
2.2 Swing Line.
2.2.1 Upon Borrower's request, and subject to the terms and
conditions of this Agreement, the Swing Line Lender may, in its sole and
absolute discretion, on and after the Closing Date and prior to the Maturity
Date, provide to Borrower a swing line credit facility (the "Swing Line") of up
to Twenty-five Million Dollars ($25,000,000.00); provided that the Swing Line
Lender shall not in any event make any Loan under the Swing Line (each a "Swing
Loan" and collectively, the "Swing Loans") if, after giving effect thereto, (i)
the sum of the aggregate principal amount of all then-outstanding Loans
(including Swing Loans) plus the aggregate amount of all then-outstanding but
undrawn Letters of Credit would exceed the Availability at such time, or (ii)
the aggregate principal amount of all then-outstanding Swing Loans made by the
Swing Line Lender would exceed the Swing Line Availability at such time. Within
the limits of the Swing Line Availability, Borrower may borrow under this
subsection 2.2.1 at any time prior to the Maturity Date, repay pursuant to
subsections 2.2.3 or 2.2.4 and reborrow pursuant to this subsection 2.2.1 prior
to the Maturity Date. Notwithstanding any contrary provision of this Section
2.2, the Swing Line Lender shall not at any time be obligated to make any Swing
Loan.
2.2.2 Notwithstanding the provisions of subsections 2.9.1 and
2.9.2, each Swing Loan outstanding under the Swing Line shall accrue interest at
a rate per annum equal to the interest rate applicable to a Reference Rate Loan,
computed on the basis of a three hundred sixty (360) day year and actual days
elapsed (which results in higher interest than if a three hundred sixty-five
(365) day year were used), which interest shall be payable in arrears on each
Interest Payment Date and on the due date for Swing Loans set forth in
subsection 2.2.3, and shall be payable to the Administrative Agent for the
account of the Swing Line Lender; provided that, notwithstanding any other
provision of this Agreement, each Swing Loan shall bear interest for a minimum
of one (1) day.
2.2.3 Notwithstanding the provisions of Section 2.7, the
principal outstanding under the Swing Line shall be due and payable:
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(i) at or before 10:00 a.m., San Francisco time, on the
third Business Day immediately following any date on which a Swing Loan is made
under the Swing Line; and
(ii) in any event on the Maturity Date;
provided that, if no Event of Default has occurred and remains uncured, and
Borrower is permitted to borrow under the terms of this Agreement (the
Availability being determined for such purpose without giving effect to any
reduction thereof occasioned by such Swing Loans due and payable) at the time
such Swing Loans are due, then unless Borrower notifies the Swing Line Lender
that it will repay such Swing Loans on their due date, Borrower shall be deemed
to have submitted a Borrowing Notice for Reference Rate Loans in an amount
necessary to repay such Swing Loans on their due date, and the provisions of
Section 2.4 concerning (i) the minimum principal amounts required for Borrowings
and (ii) the funding of requested Borrowings as Swing Loans shall not apply to
Loans made pursuant to this subsection 2.2.3.
2.2.4 Notwithstanding the provisions of subsection 2.7.1, Borrower
may, from time to time on any Business Day, make a voluntary prepayment, in
whole or in part, of the outstanding principal amount of any Swing Loans,
without incurring any premium or penalty; provided that:
(i) each such voluntary prepayment shall require prior
written notice given to the Administrative Agent and Swing Line Lender no later
than 10:00 a.m., San Francisco time, on the day on which Borrower intends to
make a voluntary prepayment, and
(ii) each such voluntary prepayment shall be in a minimum
amount of $500,000 (or, if less, the aggregate outstanding principal amount of
all Swing Loans then outstanding).
2.2.5 Each Lender shall, upon the request of the Swing Line Lender,
purchase a pro rata risk participation from the Swing Line Lender in the Swing
Loans then outstanding, without recourse or warranty, in an amount equal to such
Lender's Pro Rata Share of such Swing Loans, within three (3) Business Days
after such Swing Loans are made. In addition, from and after the date that any
Lender funds such participation, such Lender shall, to the extent of its Pro
Rata Share, be entitled to receive a ratable portion of any payment of principal
and/or interest received by the Swing Line Lender on account of such Swing
Loans, payable to such Lender promptly upon such receipt.
2.2.6 At any time during the continuance of an Event of Default, the
Swing Line Lender may, without Borrower's consent, upon one (1) Business Day's
notice to Borrower, terminate the Swing Line and cause Reference Rate Loans to
be made by the Lenders in an aggregate amount equal to the amount of principal
and interest outstanding under the Swing Line (the Availability being determined
for such purpose without giving effect to any reduction thereof occasioned by
such Swing Loans), and the conditions precedent set forth in Section 2.4 and
Section 5.2, and any requirement of
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Section 2.4 that a Borrowing be funded as a Swing Loan shall not apply to such
Loans. The proceeds of such Loans shall be paid to the Swing Line Lender to
retire the outstanding principal and interest owing under the Swing Line.
2.2.7 The Swing Line Lender shall not, without the approval of all
Lenders, make a Swing Loan if the Swing Line Lender then has actual knowledge
that a Default has occurred and is continuing.
2.3 Loan Accounts; Notes.
2.3.1 The Loans made by each Lender shall be evidenced by one or more
loan accounts or records maintained by such Lender and by Administrative Agent
in the ordinary course of business. The loan accounts or records maintained by
Administrative Agent and each Lender shall, absent manifest error, be conclusive
of the amounts of the Loans made by the Lenders to Borrower and the interest and
payments thereon. Any failure so to record or any error in doing so shall not,
however, limit or otherwise affect Borrower's obligations hereunder to pay any
amount owing with respect to the Loans.
2.3.2 The Loans made by each Lender shall be evidenced by a Note
payable to the order of such Lender in an amount equal to such Lender's Pro Rata
Share of the Maximum Commitment Amount on the Closing Date, all of which Notes
shall collectively amend and restate the Existing Note in its entirety. In
addition, the Swing Loans made by the Swing Line Lender may be evidenced by a
Note payable to the order of the Swing Line Lender in the amount of
$25,000,000.00. Each Lender may endorse on any schedule annexed to its Note(s)
the date, amount and maturity of each Loan that it makes (which shall not
include undrawn amounts on outstanding Letters of Credit, but shall include the
amounts of any drawings on outstanding Letters of Credit), and the amount of
each payment of principal that Borrower makes with respect thereto. Borrower
irrevocably authorizes each Lender to endorse its Note(s), and such Lender's
record shall be conclusive absent manifest error; provided, however, that any
Lender's failure to make, or its error in making, a notation thereon with
respect to any Loan shall not limit or otherwise affect Borrower's obligations
to such Lender hereunder or under its Note(s).
2.4 Procedure for Obtaining Credit. Each Borrowing shall be made and each
Letter of Credit shall be issued upon the irrevocable written notice (including
notice via facsimile confirmed immediately by a telephone call) of Borrower in
the form of a Borrowing Notice (which notice must be received by Administrative
Agent prior to 10:00 a.m., San Francisco time, (i) three (3) Business Days prior
to the requested borrowing date, in the case of LIBOR Loans, or (ii) one (1)
Business Day prior to the requested borrowing date, in the case of Reference
Rate Loans, or (iii) on the requested borrowing date, in the case of Swing
Loans, or (iv) five (5) Business Days prior to the requested issuance date of a
Letter of Credit), specifying:
(a) the amount of the Borrowing or the Letter of Credit, which in the
case of a Borrowing shall be in an aggregate principal amount of not less than
(i) Five Hundred Thousand Dollars ($500,000) (or the remaining Availability, if
less) for
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Reference Rate Borrowings or Swing Loans, and (ii) One Million Dollars
($1,000,000) and increments of Five Hundred Thousand Dollars ($500,000) in
excess thereof for any LIBOR Borrowings;
(b) the requested borrowing or Letter of Credit issuance date, which
shall be a Business Day;
(c) in the case of a Borrowing, the Type of Loans comprising the
Borrowing;
(d) in the case of a LIBOR Borrowing, the duration of the Interest
Period applicable to the Loans comprising such LIBOR Borrowing. If the Borrowing
Notice fails to specify the duration of the Interest Period for the Loans
comprising a LIBOR Borrowing, such Interest Period shall be one (1) month.
Unless the Required Lenders otherwise agree, during the existence of a Default
or Event of Default, Borrower may not elect to have a Loan made as, or converted
into or continued as, a LIBOR Loan. After giving effect to any Loan, there shall
not be more than seven (7) different Interest Periods in effect. Notwithstanding
the foregoing provisions of this Section 2.4, any amount drawn under a Letter of
Credit shall, from and after the date on which such drawing is made, constitute
a Borrowing for all purposes under this Agreement (including accrual and payment
of interest and repayment of principal) other than disbursement of Loan proceeds
under this Section 2.4.
Unless Borrower's Borrowing Notice expressly requests a LIBOR Borrowing, a
Reference Rate Borrowing in an amount in excess of the Swing Line Availability
or the issuance of a Letter of Credit, each requested Borrowing shall initially
be funded as a Swing Loan (unless the Swing Line Lender declines to make a Swing
Loan, in which case the requested Borrowing shall be funded as a Reference Rate
Borrowing in accordance with this Section 2.4), and shall be subject to the
provisions of Section 2.2.
Borrower indemnifies and excuses Administrative Agent (including its officers,
employees and agents) from all liability, loss and costs in connection with any
act resulting from facsimile instructions that Administrative Agent reasonably
believes are made by any individual authorized by Borrower to give such
instructions, except to the extent such liability, loss or cost results directly
from Administrative Agent's gross negligence or willful misconduct. This
indemnity and excuse will survive the termination of this Agreement.
2.5 Conversion and Continuation Elections.
2.5.1 Borrower may, upon irrevocable written notice to Administrative
Agent in accordance with subsection 2.5.2:
(a) elect to convert, on any Business Day, any Reference Rate Loans
(or any part thereof in an amount not less than $1,000,000.00 and increments of
$500,000 in excess thereof) into LIBOR Loans;
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(b) elect to convert on the last day of any Interest Period any LIBOR
Loans maturing on such date (or any part thereof in an amount not less than
$500,000.00) into Reference Rate Loans; or
(c) elect to renew on the last day of any Interest Period (for a new
Interest Period that commences immediately upon the expiration of such existing
Interest Period) any LIBOR Loans maturing on such date (or any part thereof in
an amount not less than $1,000,000.00 and increments of $500,000 in excess
thereof);
provided, that if the aggregate amount of LIBOR Loans in respect of any
Borrowing shall have been reduced, by payment, prepayment or conversion of part
thereof, to less than $1,000,000.00, such LIBOR Loans shall automatically
convert into Reference Rate Loans, and on and after such date the right of
Borrower to continue such Loans as, and convert such Loans into, LIBOR Loans
shall terminate.
2.5.2 Borrower shall deliver in writing (including via facsimile
confirmed immediately by a telephone call) a Conversion/Continuation Notice
(which notice must be received by Administrative Agent not later than 10:00 a.m.
San Francisco time, (i) at least three (3) Business Days prior to the conversion
date or continuation date, if the Loans are to be converted into or continued as
LIBOR Loans, or (ii) on the conversion date, if the Loans are to be converted
into Reference Rate Loans) specifying:
(a) the proposed conversion date or continuation date;
(b) the aggregate amount of Loans to be converted or continued;
(c) the nature of the proposed conversion or continuation; and
(d) if Borrower elects to convert a Reference Rate Loan into a LIBOR
Loan or elects to continue a LIBOR Loan, the duration of the Interest Period
applicable to such Loan. If the Conversion/Continuation Notice fails to specify
the duration of the Interest Period for a LIBOR Loan, such Interest Period shall
be one (1) month.
2.5.3 If upon the expiration of any Interest Period applicable to LIBOR
Loans Borrower has failed to select a new Interest Period to be applicable to
LIBOR Loans, or if any Default or Event of Default shall then exist, Borrower
shall be deemed to have elected to convert LIBOR Loans into Reference Rate Loans
effective as of the expiration date of such current Interest Period.
2.5.4 Notwithstanding any other provision of this Agreement, after
giving effect to any conversion or continuation of any Loans, there shall not be
more than seven (7) different Interest Periods in effect.
2.6 Voluntary Termination or Reduction of Commitment. Borrower may, upon
not less than five (5) Business Days' prior written notice to Administrative
Agent, terminate the Lenders' commitment to make Loans to Borrower or issue
Letters of Credit for Borrower's account, or permanently reduce the Maximum
Commitment Amount by a
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minimum amount of $500,000.00, unless, after giving effect thereto and to any
prepayments of Loans made on the effective date thereof, the sum of the
aggregate principal amount of (i) the then-outstanding Loans and (ii) the
then-outstanding but undrawn Letters of Credit would exceed the Availability.
Once reduced in accordance with this Section 2.6, the Maximum Commitment Amount
may not be increased except pursuant to Section 2.12. Any reduction of the
commitment amounts shall be applied to each Lender according to its Pro Rata
Share. No commitment or extension fees paid prior to the effective date of any
reduction of the Maximum Commitment Amount or termination of the Lenders'
commitment to make Loans to Borrower or issue Letters of Credit for Borrower's
account shall be refunded, and all accrued facility fees for the period up to
but not including the effective date of any reduction or termination of the
commitments shall be payable on the effective date of such reduction or
termination.
2.7 Principal Payments.
2.7.1 Optional Prepayments. Subject to the provisions of Section 3.4,
Borrower may, at any time or from time to time, upon written notice to
Administrative Agent not later than 10:00 a.m., San Francisco time, on the
prepayment date, ratably prepay Loans in full or in part in an amount not less
than $500,000.00 for Reference Rate Loans (or, if less, the aggregate
outstanding principal amount of all Reference Rate Loans and/or Swing Loans) or
$1,000,000 for LIBOR Loans. Such notice of prepayment shall specify the date and
amount of such prepayment and the Type(s) of Loans to be prepaid. Administrative
Agent will promptly notify each Lender of its receipt of any such notice and
such Lender's Pro Rata Share of such prepayment. If Borrower gives a prepayment
notice to Administrative Agent, such notice is irrevocable and the prepayment
amount specified in such notice shall be due and payable on the date specified
therein, together with accrued interest to such date on the amount prepaid, if
required by Administrative Agent, and all amounts required to be paid pursuant
to Section 3.4.
2.7.2 Mandatory Repayments.
(a) Availability Limit. Should the aggregate principal amount of the
outstanding Loans at any time exceed the Availability, Borrower shall
immediately repay such excess to Administrative Agent, for the account of the
Lenders; provided, however, that in the event that the aggregate amount of
outstanding but undrawn Letters of Credit exceeds the Availability, Borrower
shall deliver cash collateral to Administrative Agent in the amount of such
excess.
(b) Debt and Equity Proceeds. Not less than two (2) Business Days
prior to the closing of any transaction in which Borrower or Guarantor issues
any debt or equity securities (other than in connection with (i) Guarantor's
dividend reinvestment plan or (ii) the exercise of stock options under
Guarantor's stock option plans), Borrower shall deliver to Administrative Agent
a compliance certificate in the form of Exhibit E (based on the most recent
financial information available to Borrower or Guarantor and taking account of
the proposed transaction) signed and certified by an authorized financial
officer of Borrower. If such compliance certificate discloses any Default or
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Event of Default, then upon the closing of such securities transaction, unless
the Required Lenders otherwise agree in writing, Borrower shall repay to
Administrative Agent, for the account of the Lenders and application to the
outstanding principal amount of the Loans, an amount sufficient to cure all such
Defaults or Events of Default (up to the issuance proceeds of such debt or
equity securities net of any actual out-of-pocket costs incurred by Borrower or
Guarantor in connection with the issuance of such securities).
(c) Application of Repayments. Any repayments pursuant to this
subsection 2.7.2 shall be (i) subject to Section 3.4, and (ii) applied first to
any Reference Rate Loans then outstanding and then to LIBOR Loans with the
shortest Interest Periods remaining.
2.7.3 Repayment at Maturity. Borrower shall repay the principal amount
of all outstanding Loans on the Maturity Date or, if earlier, upon termination
of the Lenders' commitment pursuant to Section 2.6.
2.8 Extension of Maturity Date. Upon Borrower's written request, delivered
to Administrative Agent at least sixty (60) days and not more than ninety (90)
days prior to the initial Maturity Date, such Maturity Date may be extended for
a single period of one (1) year, provided that:
(a) No Default or Event of Default shall have occurred and remain
uncured on the initial Maturity Date, and Administrative Agent shall have
received a certificate to that effect signed by an officer of Borrower;
(b) The representations and warranties set forth in this Agreement
and the other Loan Documents shall be correct as of the initial Maturity Date as
though made on and as of that date, and Administrative Agent shall have received
a certificate to that effect signed by an officer of Borrower;
(c) Borrower shall have paid to Administrative Agent, for the account
of the Lenders, an extension fee equal to one-quarter of one percent (0.25%) of
the Maximum Commitment Amount on the initial Maturity Date; and
(d) Borrower shall have executed, acknowledged and delivered to
Administrative Agent such documents as Administrative Agent reasonably
determines to be necessary to evidence the extension of the Maturity Date.
2.9 Interest.
2.9.1 Accrual Rate. Subject to the provisions of Section 2.9.3, each
Loan shall bear interest on the outstanding principal amount thereof from the
date when made (which, in the case of a drawing on a Letter of Credit, is the
date of such drawing) until it becomes due at a rate per annum equal to LIBOR or
the Reference Rate, as the case may be, plus the Applicable Margin.
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2.9.2 Payment. Interest on each Loan shall be payable in arrears on
each Interest Payment Date. Interest shall also be payable on the date of any
repayment of Loans pursuant to Sections 2.7.1 or 2.7.2 for the portion of the
Loans so repaid, if required by Administrative Agent, and upon payment
(including prepayment) of the Loans in full. During the existence of any Event
of Default, interest shall be payable on demand.
2.9.3 Default Interest. Commencing upon the occurrence of any Event
of Default, and continuing thereafter while such Event of Default remains
uncured, or after maturity, Borrower shall pay interest (after as well as before
entry of judgment thereon to the extent permitted by law) on the principal
amount of all Obligations due and unpaid, at a rate per annum determined by
adding 300 basis points to the Applicable Margin then in effect for such Loans
and, in the case of Obligations not subject to an Applicable Margin, at a rate
per annum equal to the Reference Rate plus 300 basis points; provided, however,
that on and after the expiration of any Interest Period applicable to any LIBOR
Loan outstanding on the date of occurrence of such Event of Default, the
principal amount of such Loan shall, during the continuation of such Event of
Default, bear interest at a rate per annum equal to the Reference Rate plus 300
basis points in excess of the Applicable Margin then in effect for Reference
Rate Loans.
2.9.4 Maximum Legal Rate. Notwithstanding any contrary provision of
this Agreement, if a court ultimately determines that one or more Loans violate
applicable usury law, then (a) Borrower shall not be required to pay to a Lender
interest on any Loan at a rate in excess of the maximum rate that may lawfully
be charged under applicable law; and (b) in the event that any Lender collects
interest or other monies deemed to constitute interest such Lender's collection
of such amounts has the effect of increasing the effective interest rate on any
Loan to a rate in excess of that permitted by applicable law, such excess
interest shall, at such Lender's option, be returned to Borrower or credited
against the principal balance of the Loans made by such Lender that are then
outstanding; provided, however, that if any usury law applies to one or more but
fewer than all Lenders, then the Lenders not affected by such usury law shall be
entitled to the full amount of interest payable by Borrower under the Loan
Documents even though other Lenders may receive or retain less due to such usury
law.
2.10 Fees.
2.10.1 Facility Fee. Borrower shall pay to Administrative Agent, for
the account of the Lenders (based on their respective Pro Rata Shares), a
facility fee computed based on the annual rate specified in the definition of
the term "Applicable Margin" multiplied by the daily weighted average of the
Maximum Commitment Amount, in each case measured quarterly and payable quarterly
in arrears on (a) each January 1, April 1, July 1, and October 1, commencing
July 1, 2002 (for the calendar quarter ending June 30, 2002, but with such
initial payment of the Facility Fee pro rated from the Closing Date) and (b) the
Maturity Date (with such final payment of the Facility Fee pro rated to the
Maturity Date).
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2.10.2 Letter of Credit Fees. Borrower shall pay to Administrative
Agent, for the account of the Lenders (based on their respective Pro Rata
Shares), a letter of credit fee for each issued and outstanding Letter of Credit
in an amount equal to the Applicable LIBOR Margin multiplied by the face amount
of such Letter of Credit, which fee shall be payable annually in advance on the
issuance date of such Letter of Credit and on every anniversary of such issuance
date while such Letter of Credit or any unreimbursed drawings thereunder remain
outstanding. Borrower shall also pay to Administrative Agent, for the account of
BankAmerica, at the time each Letter of Credit is issued, a fronting fee in an
amount equal to the greater of (i) twelve and one-half (12.5) basis points
multiplied by the face amount of the Letter of Credit, or (ii) One Thousand Two
Hundred and Fifty Dollars ($1,250).
2.10.3 Other Fees. Borrower shall pay to Administrative Agent, for its
own account, for the account of BankAmerica or for the account of the Lenders,
as applicable, such other fees as are required by the letter agreement of even
date herewith (the "Fee Letter") between Borrower and Administrative Agent.
2.11 Computation of Fees and Interest. All computations of interest and
fees under this Agreement shall be made on the basis of a 360-day year and
actual days elapsed, which results in more interest or fees being paid than if
computed on the basis of a 365-day year. Interest and fees shall accrue during
each period during which interest or such fees are computed from the first day
thereof to the last day thereof. Any change in the interest rate on a Loan
resulting from a change in the Reference Rate or the applicable reserve
requirement, deposit insurance assessment rate or other regulatory cost shall
become effective as of the opening of business on the day on which such change
in the Reference Rate or such reserve requirement, assessment rate or other
regulatory cost becomes effective. Each determination of an interest rate by
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on Borrower and the Lenders in the absence of manifest
error.
2.12 Increase in Maximum Commitment Amount.
2.12.1 Subject to the provisions of Section 2.6, on the terms and
subject to the conditions set forth in this Section 2.12, Borrower may, at any
time and from time to time prior to the Maturity Date, by written notice to
Administrative Agent, request an increase in the Maximum Commitment Amount by
(i) permitting any Lender to increase its Commitment (and accordingly increase
the Maximum Commitment Amount by such amount), or (ii) inviting any Eligible
Assignee that has previously been approved by Administrative Agent in writing to
become a Lender under this Agreement and to provide a commitment to lend
hereunder (and accordingly increase the Maximum Commitment Amount by such
amount); provided, however, that in no event shall such actions cause the
Maximum Commitment Amount to increase above $200,000,000.
2.12.2 Each of the Lenders acknowledges and agrees that,
notwithstanding any contrary provision of Section 11.1, (i) its consent to any
such increase in the Maximum Commitment Amount shall not be required and (ii)
Eligible Assignees may be
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added to this Agreement and any Lender may increase its Commitment without
the consent or agreement of the other Lenders (provided, however, that no
Lender's Commitment may be increased without such Lender's consent), so long as
Administrative Agent and Borrower have consented in writing to such Eligible
Assignee or the increase in the Commitment of any of the Lenders, as applicable.
2.12.3 Administrative Agent shall not unreasonably withhold its consent
to Borrower's request for an increase in the Maximum Commitment Amount under
this Section 2.12 provided that Borrower satisfies all of the following
conditions precedent:
(a) No Default or Event of Default shall have occurred and remain
uncured on the Effective Date (as hereinafter defined), and Administrative Agent
shall have received a certificate to that effect signed by an officer of
Borrower;
(b) any Eligible Assignee is acceptable to Administrative Agent in
its reasonable discretion;
(c) Borrower and each such Lender or Eligible Assignee shall have
executed and delivered to Administrative Agent supplemental signature pages to
this Agreement, in the form of Exhibit D-1 attached hereto in the case of a
Lender, or in the form of Exhibit D-2 hereto in the case of an Eligible Assignee
(each, a "Supplemental Signature Page");
(d) Borrower shall have paid to Administrative Agent, for the
account of such Lender or Eligible Assignee, Administrative Agent and the
Arranger, as applicable, a commitment fee and/or an arrangement fee in an amount
reasonably satisfactory to Administrative Agent;
(e) Administrative Agent shall have sent written notice of each such
request by Borrower to the Lenders, together with notice of such Eligible
Assignee's Commitment or such Lender's increased Commitment, as the case may be,
and the effective date (the "Effective Date") of such increase in the Maximum
Commitment Amount as set forth on the Supplemental Signature Page; and
(f) all requirements of this Section 2.12 shall have been satisfied.
2.12.4 Upon the Effective Date, and notwithstanding any contrary
provision of this Agreement (i) each such Eligible Assignee shall become a party
to this Agreement, and thereafter shall have all of the rights and obligations
of a Lender hereunder, (ii) each such Eligible Assignee or Lender shall
simultaneously pay to Administrative Agent, for distribution to the Lenders
whose Pro Rata Shares of the combined Commitments of all of the Lenders have
decreased as a result of the new Commitment of such Eligible Assignee or the
increased Commitment of such Lender, an amount equal to the product of such
Eligible Assignee's Pro Rata Share (or the increase in such Lender's Pro Rata
Share), expressed as a decimal, multiplied by the aggregate outstanding
principal amount of the Loans on the date of determination, and (iii) each such
Eligible Assignee or Lender shall thereafter be obligated to make its Pro Rata
Share
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of Borrowings to Borrower up to and including the amount of such Eligible
Assignee's or Lender's Pro Rata Share of the increased Maximum Commitment
Amount, on the terms and subject to the conditions set forth in this Agreement.
2.12.5 Notwithstanding any contrary provision of this Section 2.12, no
increase in the Maximum Commitment Amount will be permitted unless (a) all then
outstanding Loans constitute Reference Rate Loans, or (b) the Interest Periods
for all outstanding LIBOR Loans will expire (and any new Interest Periods for
any such LIBOR Loans will commence) concurrently with the date on which any
increase in the Maximum Commitment Amount becomes effective, or (c) Borrower
pays to Administrative Agent, for the account of Lenders, all costs arising
under Section 3.4 as a result of such increase in the Maximum Commitment Amount.
2.13 Payments by Borrower.
2.13.1 All payments (including prepayments) made by Borrower on account
of principal, interest, fees and other amounts required hereunder shall be made
without set-off or counterclaim. All such payments (other than payments on Swing
Loans, which shall be made to Administrative Agent for the account of the Swing
Line Lender) shall, except as otherwise expressly provided herein, be made to
Administrative Agent for the account of the Lenders at Administrative Agent's
Payment Office, in dollars and in immediately available funds, no later than
11:00 a.m. San Francisco time on the date specified herein. Any payment received
by Administrative Agent later than 11:00 a.m. San Francisco time shall be deemed
to have been received on the immediately succeeding Business Day and any
applicable interest or fee shall continue to accrue. Administrative Agent will
promptly (and in any event, not later than two (2) Business Days after
Administrative Agent's actual receipt) distribute to each Lender its Pro Rata
Share (or other applicable share as provided herein) of such payment in like
funds as received; provided, however, if and to the extent Administrative Agent
shall receive any such payment for the account of Lenders on or before 11:00
a.m. San Francisco time on any Business Day and Administrative Agent shall not
have distributed to each Lender its Pro Rata Share (or other applicable share as
provided herein) on such Business Day, the distribution to each Lender when made
shall include interest at the Federal Funds Rate for each day from the date of
Administrative Agent's actual receipt of such payment from Borrower until the
date Administrative Agent distributes to each Lender its Pro Rata Share (or
other applicable share as provided herein).
2.13.2 Subject to the provisions set forth in the definition of the
term "Interest Period," whenever any payment hereunder is stated to be due on a
day other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be.
2.13.3 Unless Administrative Agent receives notice from Borrower prior
to the date on which any payment is due and payable to the Lenders that Borrower
will not make such payment in full as and when required, Administrative Agent
may assume
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that Borrower has made such payment in full to Administrative Agent on
such date in immediately available funds and Administrative Agent may (but shall
not be so required), in reliance upon such assumption, distribute to each Lender
on such date an amount equal to the amount then due and payable to such Lender.
If and to the extent Borrower has not made such payment in full to
Administrative Agent, each Lender shall repay to Administrative Agent on demand
the amount distributed to such Lender, together with interest thereon at the
Federal Funds Rate for each day from the date such amount is distributed to such
Lender until the date repaid.
2.13.4 To the extent that Borrower makes a payment to Administrative
Agent or the Lenders, or Administrative Agent or any Lender exercises the right
of set-off, and such payment or the proceeds of such set-off or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including by any settlement) to be repaid to a trustee,
receiver, Borrower or any other Person, in connection with any Insolvency
Proceeding or otherwise, then (i) to the extent of such recovery the obligation
or part thereof originally intended to be satisfied shall be revived and
continued in full force and effect as if such payment had not been made or such
set-off had not occurred, and (ii) each Lender severally agrees to pay to
Administrative Agent upon demand its Pro Rata Share of any amount so recovered
from or repaid by Administrative Agent.
2.14 Payments by the Lenders to Administrative Agent.
2.14.1 With respect to any Borrowing, unless Administrative Agent
receives notice from a Lender at least one (1) Business Day prior to the date of
such Borrowing, that such Lender will not make available to Administrative
Agent, for the account of Borrower, the amount of that Lender's Pro Rata Share
of the Borrowing as and when required hereunder, Administrative Agent may assume
that each Lender has made such amount available to Administrative Agent in
immediately available funds on the borrowing date and Administrative Agent may
(but shall not be so required), in reliance upon such assumption, make available
to Borrower on such date a corresponding amount. If and to the extent any Lender
shall not have made its full amount available to Administrative Agent in
immediately available funds and Administrative Agent in such circumstances has
made available to Borrower such amount, that Lender shall, on the Business Day
following such borrowing date, make such amount available to Administrative
Agent, together with interest at the Federal Funds Rate for each day during such
period. A notice of Administrative Agent submitted to any Lender with respect to
amounts owing under this Section 2.14 shall be conclusive absent manifest error.
If such amount is so made available, such payment to Administrative Agent shall
constitute such Lender's Loan on the date of Borrowing for all purposes of this
Agreement. If such amount is not made available to Administrative Agent on the
Business Day following the borrowing date, Administrative Agent will notify
Borrower of such failure to fund and, upon demand by Administrative Agent,
Borrower shall pay such amount to Administrative Agent for Administrative
Agent's account, together with interest thereon for each day elapsed since the
date of such Borrowing, at a rate per
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annum equal to the interest rate applicable at the time to the Loans comprising
such Borrowing.
2.14.2 The failure of any Lender (a "Defaulting Lender") to make any
Loan on any borrowing date shall not relieve any other Lender of any obligation
hereunder to make a Loan on such borrowing date, but no Lender shall be
responsible for the failure of any other Lender to make the Loan to be made by
such other Lender on any borrowing date.
2.15 Sharing of Payments, Etc. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Obligations owing to
it any payment (whether voluntary, involuntary, or otherwise) in excess of its
ratable share (or other share contemplated hereunder), such Lender shall
immediately (a) notify Administrative Agent of such fact, and (b) purchase from
the other Lenders such participations in the Loans made by them as shall be
necessary to cause such purchasing Lender to share the excess payment 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, 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. 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 (other
than the right of set-off) with respect to such participation as fully as if
such Lender were the direct creditor of Borrower in the amount of such
participation; provided, however, that Borrower shall not be obligated to pay
any amount more than once as a result of such participation. Administrative
Agent will keep records (which shall be conclusive and binding in the absence of
manifest error) of participations purchased under this Section 2.15 and will in
each case notify the Lenders following any such purchases or repayments.
2.16 Defaulting Lender.
2.16.1 Notice and Cure of Lender Default; Election Period; Electing
Lenders. Administrative Agent shall notify (such notice being referred to as the
"Default Notice") Borrower (for Loans) and each non-Defaulting Lender if any
Lender is a Defaulting Lender. Each non-Defaulting Lender shall have the right,
but in no event or under any circumstance the obligation, to fund any amount
that a Defaulting Lender fails to fund (the "Defaulting Lender Amount"),
provided that, within twenty (20) days after the date of the Default Notice (the
"Election Period"), such non-Defaulting Lender or Lenders (each such Lender, an
"Electing Lender") irrevocably commit(s) by notice in writing (an "Election
Notice") to Administrative Agent, the other Lenders and Borrower to fund the
Defaulting Lender Amount. If Administrative Agent receives more than one
Election Notice within the Election Period, then the commitment to fund the
Defaulting Lender Amount shall be apportioned pro rata among the Electing
Lenders in the
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proportion that the amount of each such Electing Lender's Commitment bears to
the total Commitments of all Electing Lenders. If the Defaulting Lender fails to
pay the Defaulting Lender Amount within the Election Period, (a) the Electing
Lender or Lenders, as applicable, shall be automatically obligated to fund the
Defaulting Lender Amount (and Defaulting Lender shall no longer be entitled to
fund such Defaulting Lender Amount) within three (3) Business Days after such
notice to Administrative Agent for reimbursement to Administrative Agent or
payment to Borrower as applicable, and (b) Borrower may enforce any rights it
may have under this Agreement, at law or in equity, against Defaulting Lender.
Notwithstanding any contrary provision of this Agreement, if Administrative
Agent has funded the Defaulting Lender Amount, Administrative Agent shall be
entitled to reimbursement from the Electing Lenders for its portion of the
Defaulting Lender Amount.
2.16.2 Removal of Rights; Indemnity. Administrative Agent shall not be
obligated to transfer to a Defaulting Lender any payments made by or on behalf
of Borrower to Administrative Agent for the Defaulting Lender's benefit; nor
shall a Defaulting Lender be entitled to the sharing of any payments hereunder
or under any Note until all Defaulting Lender Amounts are paid in full.
Administrative Agent shall hold all such payments received or retained by it for
the account of such Defaulting Lender. Amounts payable to a Defaulting Lender
shall be paid by Administrative Agent to reimburse Administrative Agent and any
Electing Lender pro rata for all Defaulting Lender Amounts funded by such
Persons. Solely for the purposes of voting or consenting to matters with respect
to the Loan Documents, a Defaulting Lender shall be deemed not to be a "Lender"
and such Defaulting Lender's Commitment shall be deemed to be zero. A Defaulting
Lender shall have no right to participate in any discussions among and/or
decisions by Lenders hereunder and/or under the other Loan Documents. This
Section shall remain effective with respect to a Defaulting Lender until such
time as the Defaulting Lender shall no longer be in default of any of its
obligations under this Agreement by curing such default by payment of all
Defaulting Lender Amounts (i) within the Election Period, or (ii) after the
Election Period with the consent of the non-Defaulting Lenders. Such Defaulting
Lender nonetheless shall be bound by any amendment to, or waiver of, any
provision of, or any action taken or omitted to be taken by Administrative Agent
and/or the non-Defaulting Lenders under, any Loan Document which is made
subsequent to the Defaulting Lender's becoming a Defaulting Lender and prior to
such cure or waiver. The operation of this subsection or the subsection above
alone shall not be construed to increase or otherwise affect the Commitment of
any non-Defaulting Lender, or to relieve or excuse the performance by Borrower
of its duties and obligations hereunder or under any of the other Loan
Documents. Furthermore, nothing contained in this Section shall release or in
any way limit a Defaulting Lender's obligations as a Lender hereunder and/or
under any other of the Loan Documents. Further, a Defaulting Lender shall
indemnify and hold harmless Administrative Agent and each of the non-Defaulting
Lenders from any claim, loss, or costs incurred by Administrative Agent and/or
the non-Defaulting Lenders as a result of a Defaulting Lender's failure to
comply with the requirements of this Agreement, including any and all additional
losses, damages, costs and expenses (including attorneys' fees) incurred by
Administrative Agent and any non-Defaulting Lender as a result of and/or in
connection
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with (i) a non-Defaulting Lender's acting as an Electing Lender, (ii)
any enforcement action brought by Administrative Agent against a Defaulting
Lender, and (iii) any action brought against Administrative Agent and/or
Lenders. The indemnification provided above shall survive any termination of
this Agreement.
2.16.3 Commitment Adjustments. In connection with the adjustment of
the amounts of the Commitments of the Defaulting Lender and Electing Lender(s)
upon the expiration of the Election Period described above, Borrower,
Administrative Agent and Lenders shall execute such modifications to the Loan
Documents as shall, in the reasonable judgment of Administrative Agent, be
necessary or desirable in connection with the adjustment of the amounts of
Commitments in accordance with the foregoing provisions of this Section. For the
purpose of voting or consenting to matters with respect to the Loan Documents
such modifications shall also reflect the removal of voting rights of the
Defaulting Lender and increase in voting rights of Electing Lenders to the
extent an Electing Lender has funded the Defaulting Lender Amount. In connection
with such adjustments, each Defaulting Lender shall execute and deliver an
Assignment and Assumption covering that Lender's Commitment and otherwise comply
with Section 11.6. If a Lender refuses to execute and deliver such Assignment
and Assumption or otherwise comply with Section 11.6, such Lender hereby
appoints Administrative Agent to do so on such Lender's behalf. Administrative
Agent shall distribute an amended schedule of Lenders, which shall thereafter be
incorporated into this Agreement, to reflect such adjustments. However, all such
Defaulting Lender Amounts funded by Administrative Agent or Electing Lenders
shall continue to be Defaulting Lender Amounts of the Defaulting Lender pursuant
to its obligations under this Agreement.
2.16.4 No Election. In the event that no Lender elects to commit to
fund a Defaulting Lender Amount within the applicable Election Period,
Administrative Agent shall, upon the expiration of such Election Period, so
notify Borrower and each Lender.
2.17 Increases and Decreases in Pro Rata Shares. Upon Borrower's
satisfaction of all of the conditions set forth in Section 5 of this Agreement,
each Lender whose Pro Rata Share of the combined Commitments of all of the
Lenders has increased, as evidenced by the difference for each Lender between
the Pro Rata Share reflected in the Existing Agreement and the Pro Rata Share
reflected in this Agreement, shall pay to Administrative Agent, for distribution
to the Lenders whose Pro Rata Shares of the combined Commitments of all of the
Lenders has decreased pursuant to this Agreement, an amount equal to the product
of the increase in such Lender's Pro Rata Share (expressed as a decimal)
multiplied by the aggregate outstanding principal amount of the Loans on the
date of determination.
3. Taxes, Yield Protection and Illegality.
3.1 Taxes. If any payments to Administrative Agent under this Agreement are
made from outside the United States, Borrower will not deduct any foreign taxes
from any payments it makes to Administrative Agent. If any taxes (other than
taxes on a
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Lender's net income or gross receipts, or franchise or similar taxes payable
by a Lender) are at any time imposed on any payments under or in respect of this
Agreement or any instrument or agreement required hereunder, including payments
made pursuant to this Section 3.1, Borrower shall pay all such taxes and shall
also pay to the Administrative Agent, for the account of the applicable Lender,
at the time interest is paid, all additional amounts which such Lender specifies
as necessary to preserve the yield, after payment of such taxes, that such
Lender would have received if such taxes had not been imposed.
3.2 Illegality.
(a) If any Lender determines that (i) the introduction of any
Requirement of Law, or any change in any Requirement of Law or in the
interpretation or administration thereof, has made it unlawful, or (ii) any
central bank or other Governmental Authority has asserted that it is unlawful,
for such Lender or its applicable Lending Office to make LIBOR Loans, then, on
notice thereof by such Lender to Borrower and Administrative Agent, the
obligation of such Lender to make LIBOR Loans shall be suspended until such
Lender shall have notified Borrower and Administrative Agent that the
circumstances giving rise to such determination no longer exist.
(b) If any Lender determines that it is unlawful to maintain any LIBOR
Loan, Borrower shall, upon its receipt of notice of such fact and demand from
such Lender (with a copy to the Administrative Agent), prepay in full all LIBOR
Loans of that Lender then outstanding, together with interest accrued thereon
and any amounts required to be paid in connection therewith pursuant to Section
3.4, either on the last day of the Interest Period thereof, if such Lender may
lawfully continue to maintain such LIBOR Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such LIBOR Loans.
(c) Notwithstanding any contrary provision of Section 2.1, if Borrower
is required to prepay any LIBOR Loan immediately as provided in subsection
3.2(b), then concurrently with such prepayment Borrower shall borrow a Reference
Rate Loan from the affected Lender in the amount of such repayment.
(d) If the obligation of any Lender to make or maintain LIBOR Loans has
been terminated, Borrower may elect, by giving notice to such Lender through
Administrative Agent, that all Loans which would otherwise be made by such
Lender as LIBOR Loans shall instead be Reference Rate Loans.
(e) Before giving any notice to Administrative Agent or Borrower
pursuant to this Section 3.2, the affected Lender shall designate a different
Lending Office with respect to its LIBOR Loans if such designation would avoid
the need for giving such notice or making such demand and would not, in the
judgment of such Lender, be illegal or otherwise disadvantageous to such Lender.
3.3 Increased Costs and Reduction of Return.
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(a) If any Lender determines that, due to either (i) the introduction
of, or any change (other than a change by way of imposition of, or increase in,
reserve requirements included in the LIBOR Reserve Percentage) in or in the
interpretation of, any law or regulation or (ii) the compliance by such Lender
(or its Lending Office) or any entity controlling such Lender with any guideline
or request from any central bank or other Governmental Authority (whether or not
having the force of law), there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining any LIBOR Loans, then
Borrower shall be liable for, and shall from time to time, upon demand therefor
by such Lender with a copy to Administrative Agent, pay to Administrative Agent
for the account of such Lender such additional amounts as are sufficient to
compensate such Lender for such increased costs.
(b) If any Lender determines that (i) the introduction of any Capital
Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation, (iii)
any change in the interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or (iv) compliance by such Lender (or
its Lending Office), or any corporation controlling such Lender, with any
Capital Adequacy Regulation affects or would affect the amount of capital that
such Lender or any corporation controlling such Lender is required or expected
to maintain, and such Lender (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy and such Lender's
desired return on capital) determines that the amount of such capital is
increased as a consequence of any of its loans, credits or obligations under
this Agreement, then, upon sixty (60) days' notice from such Lender to Borrower
through Administrative Agent, Borrower shall immediately pay to Administrative
Agent, for the account of such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender for such
increase.
3.4 Funding Losses. Borrower agrees to pay to Administrative Agent, from
time to time, for the account of the Lenders, any amount that would be necessary
to reimburse the Lenders for, and to hold the Lenders harmless from, any loss or
expense which the Lenders may reasonably sustain or incur as a consequence of:
(a) the failure of Borrower to make any required payment or prepayment
of principal of any LIBOR Loan (including payments made after any acceleration
thereof);
(b) the failure of Borrower to borrow, continue or convert a Loan
after Borrower has given a Borrowing Notice or a Conversion/Continuation Notice;
(c) the failure of Borrower to make any prepayment after Borrower has
given a notice in accordance with Section 2.7.1;
(d) the prepayment (including pursuant to Section 2.7.2) of a LIBOR
Loan on a day which is not the last day of the Interest Period with respect
thereto;
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(e) the conversion pursuant to Section 2.5 of any LIBOR Loan to a
Reference Rate Loan on a day that is not the last day of the respective Interest
Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained to maintain the LIBOR Loans hereunder or from fees payable to
terminate the deposits from which such funds were obtained. Solely for purposes
of calculating amounts payable by Borrower to Administrative Agent, for the
account of Lenders, under this Section 3.4, each LIBOR Loan (and each related
reserve, special deposit or similar requirement) shall be conclusively deemed to
have been funded at the LIBOR used in determining the LIBOR Rate for such LIBOR
Loan by a matching deposit or other borrowing in the applicable offshore dollar
interbank market for a comparable amount and for a comparable period, whether or
not such LIBOR Loan is in fact so funded.
3.5 Inability to Determine Rates. If any Lender determines that for any
reason adequate and reasonable means do not exist for ascertaining the LIBOR
Rate for any requested Interest Period with respect to a proposed LIBOR Loan or
that the LIBOR Rate applicable pursuant to Section 2.9.1 for any requested
Interest Period with respect to a proposed LIBOR Loan does not adequately and
fairly reflect the cost to such Lender of funding such Loan, such Lender will
forthwith give notice of such determination to Borrower through the
Administrative Agent. Thereafter, the obligation of such Lender to make or
maintain LIBOR Loans hereunder shall be suspended until such Lender revokes such
notice in writing. Upon receipt of such notice, Borrower may revoke any
Borrowing Notice or Conversion/Continuation Notice then submitted by it. If
Borrower does not revoke such notice, the affected Lender shall make, convert or
continue the Loans, as proposed by Borrower, in the amount specified in the
applicable notice submitted by Borrower, but such Loans shall be made, converted
or continued as Reference Rate Loans instead of LIBOR Loans.
3.6 Certificate of Lender. Any Lender, if claiming reimbursement or
compensation pursuant to this Article 3, shall deliver to Borrower through the
Administrative Agent a certificate setting forth in reasonable detail the amount
payable to such Lender hereunder, and such certificate shall be conclusive and
binding on Borrower in the absence of manifest error.
3.7 Survival. The agreements and obligations of Borrower in this Article 3
shall survive the payment and performance of all other Obligations for a period
of four (4) years after the Maturity Date.
4. UNENCUMBERED ASSET POOL.
4.1 Additions of Property to the Unencumbered Asset Pool.
(a) In addition to the real property described in Exhibit A attached
hereto, Borrower may from time to time request Administrative Agent to add a new
property (a "Nominated Property") to the Unencumbered Asset Pool. To become an
Unencumbered Asset Pool Property, a Nominated Property must satisfy each of the
following conditions:
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(1) Borrower shall hold fee simple title to such Nominated Property
(except in the case of Bristol Commons, in which case Borrower shall own a 99%
interest in such property);
(2) Such Nominated Property is operated as residential apartments,
with no more than fifteen percent (15%) of gross revenue generated by retail
tenants;
(3) Such Nominated Property shall have minimum occupancy of eighty
percent (80%), and if admitted to the Unencumbered Asset Pool would not cause
the aggregate occupancy of the Unencumbered Asset Pool Properties to be less
than ninety percent (90%);
(4) Administrative Agent shall have received a Phase I environmental
site assessment for such Nominated Property, in form and substance reasonably
acceptable to Administrative Agent and prepared within one (1) year of its
delivery, and such environmental site assessment (i) shall not disclose the
presence of any material toxic or hazardous substances on the Nominated Property
(other than asbestos or asbestos containing materials ("ACM") or Hazardous
Substances used for cleaning, pool and other chemicals typically located on
residential properties that are otherwise consistent with all applicable laws)
and (ii) if such environmental site assessment discloses the presence of
asbestos or ACM on the Nominated Property, all such asbestos or ACM shall be in
a condition reasonably acceptable to Administrative Agent, shall be subject to
an O&M Plan reasonably acceptable to Administrative Agent, and Borrower shall be
performing its obligations under such O&M Plan in a manner reasonably acceptable
to Administrative Agent; and
(5) Such Nominated Property shall be free of all liens, encumbrances
and negative pledges, except for the following permitted liens ("Permitted
Liens"): (i) liens for taxes, assessments or governmental charges or levies to
the extent that Borrower is not yet required to pay the amount secured thereby;
and (ii) liens imposed by law, such as carrier's, warehouseman's, mechanic's,
materialman's and other similar liens, arising in the ordinary course of
business in respect of obligations that are not overdue or are being actively
contested in good faith by appropriate proceedings, as long as the Borrower has
established and maintained adequate reserves for the payment of the same and, by
reason of nonpayment, no property of Borrower is in danger of being lost or
forfeited; and (iii) easements; covenants, conditions and restrictions;
reciprocal easement and access agreements and similar agreements relating to
ownership and operation.
Nominated Properties that satisfy all of the foregoing conditions will
automatically become Unencumbered Asset Pool Properties so long as Guarantor has
a BBB-/Baa3 or better credit rating from any Rating Agency at the time such
conditions are satisfied. If Guarantor's credit rating is less than BBB-/Baa3,
Nominated Properties will become Unencumbered Asset Pool Properties at the sole
and absolute discretion of the Required Lenders.
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Notwithstanding the foregoing conditions, each of the properties commonly known
as The Essex and Vista del Mar may be included as part of the Unencumbered Asset
Pool with an Unencumbered Asset Value equal to fifty percent (50%) of cost upon
(i) Administrative Agent's receipt of satisfactory evidence of the completion of
construction and receipt of certificates of occupancy, and (ii) satisfaction of
each of the foregoing conditions other than the occupancy conditions set forth
in paragraph (3) above. Increases in the Unencumbered Asset Value for such
properties shall be based on annualized operating results for at least one full
calendar quarter applied to the definition of the term "Unencumbered Asset
Value". Each such property shall cease to be an Unencumbered Asset Pool Property
if it fails to meet all of the conditions set forth in this Section 4.1(a) on or
before the first anniversary of the date that such property became an
Unencumbered Asset Pool Property.
(b) Borrower may from time to time elect to remove an Unencumbered
Asset Pool Property from the Unencumbered Asset Pool. Borrower shall make such
an election by giving Administrative Agent notice in writing, setting forth the
identity of the Unencumbered Asset Pool Property and the requested date of
removal no less than thirty (30) days before the requested date of removal. With
such notice, Borrower shall also deliver a compliance certificate substantially
similar to the form of Exhibit E signed and certified by an authorized financial
officer of Borrower (i) setting forth the information and computations (in
sufficient detail) to determine the Unencumbered Asset Pool Value after such
removal and to establish that Borrower will be in compliance with all financial
covenants set forth in this Agreement following such removal, (ii) stating
specifically that the aggregate principal amount of Loans outstanding after such
removal will be less than or equal to the Availability, and (iii) setting forth
whether there exists or to the best of Borrower's knowledge as of the date of
such removal there will exist, any Default or Event of Default and, if any such
Default or Event of Default exists, specifying the nature thereof and the action
Borrower is taking and proposes to take with respect thereto. At the time of any
such removal, Borrower shall pay Administrative Agent all reasonable attorneys'
fees (including fees for in-house counsel) incurred by Administrative Agent in
connection with removing the property from the Unencumbered Asset Pool and shall
make any payments to continue compliance with the terms of this Agreement,
including those relating to the requirement that the aggregate principal amount
outstanding on the Loans not exceed the Availability, necessary as a result of
the requested removal. Borrower may not remove the Unencumbered Asset Pool
Property until it has complied with the terms of this Section 4.1(b).
(c) Administrative Agent may, at its option, remove any property from
the Unencumbered Asset Pool if it determines in its reasonable discretion that
the property no longer satisfies all of the conditions set forth in Section
4.1(a), provided that Administrative Agent first gives Borrower written notice
that the property no longer meets the conditions for being an Unencumbered Asset
Pool Property set forth in Section 4.1(a), together with the reason or reasons
why it does not, and gives Borrower thirty (30) days after receipt of such
notice to cure the defect. At the time of any such removal, Borrower shall pay
Administrative Agent all reasonable attorneys' fees (including fees for in-house
counsel) incurred by Administrative Agent in connection
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with removing the property from the Unencumbered Asset Pool, and shall make any
payments to continue compliance with the terms of this Agreement, including but
not limited to those relating to the requirement that the aggregate principal
amount outstanding on the Loans not exceed the Availability, necessary as a
result of such removal. If the Unencumbered Asset Pool as a whole fails to meet
any of the conditions set forth in Section 4.1(a), and any one of two or more
properties might be removed to maintain compliance of the Unencumbered Asset
Pool as a whole with the conditions set forth in Section 4.1(a), then Borrower
shall select the property or properties to be removed, provided that if it does
not do so within ten (10) days of written request to do so from Administrative
Agent, then Administrative Agent may in its sole discretion select the property
or properties to remove and so remove them. Notwithstanding the foregoing, the
property commonly known as Marina Cove shall not cease to be an Unencumbered
Asset Pool Property solely because a portion of that property has been acquired
by ground lease and not by fee simple.
4.2 Delivery of Information. In connection with each request to add a
Nominated Property to the Unencumbered Asset Pool, Borrower will submit to
Administrative Agent all of the following information and documentation:
(a) A current Phase I environmental site assessment for such Nominated
Property addressed to Borrower; provided, however, that Borrower shall not be
required to resubmit a Phase I environmental site assessment to Administrative
Agent for any Unencumbered Asset Pool Property listed on Exhibit A attached
hereto;
(b) A title insurance policy insuring Borrower's fee title to such
Nominated Property free of any liens, except for Permitted Liens, and a current
title report with respect to such Nominated Property; provided, however,
Borrower shall not be required to resubmit a title insurance policy to
Administrative Agent for any Unencumbered Asset Pool Property listed on Exhibit
A attached hereto;
(c) A current rent roll and leasing status report for such Nominated
Property;
(d) An operating statement for such Nominated Property (which shall
include a detailed analysis of the net operating income generated from such
property, including gross rental receipts, detailed operating expenses, capital
expenditures and other relevant information) for the four (4) most recent
consecutive calendar quarters for which Borrower has operating information (or,
if operating information for fewer than four (4) consecutive calendar quarters
is available to Borrower, an operating statement for such Nominated Property for
the number of the most recent consecutive calendar quarters for which Borrower
has operating information); and
(e) any other information, documentation or other items relating to
the Nominated Property that Administrative Agent may require in its sole
discretion.
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5. CONDITIONS TO DISBURSEMENTS.
5.1 Conditions to Initial Loans. The obligation of the Lenders to make the
initial Loan after the Closing Date is subject to the satisfaction of all of the
following conditions precedent:
5.1.1 Deliveries to Administrative Agent. Administrative Agent shall
have received each of the following tems, in form and substance satisfactory to
Administrative Agent:
(a) Loan Documents. This Agreement, each Note (including the Swing
Line Note), the Guaranty, and each other document Administrative Agent may
reasonably require, executed and acknowledged as appropriate;
(b) Authorizations. Evidence that the execution, delivery and
performance by Borrower or Guarantor, as the case may be, of this Agreement and
the other Loan Documents have been duly authorized;
(c) Governing Documents. Copies of Borrower's current partnership
agreement and certificate of limitedpartnership and any amendments and
modifications thereto, and Guarantor's articles of incorporation and any
amendments and modifications thereto;
(d) Good Standing. If required by Administrative Agent, Certificates
of Good Standing for Borrower and Guarantor from their respective states of
organization and from any other state in which Borrower or Guarantor, as the
case may be, is required to qualify to conduct its business;
(e) Legal Opinions. If required by Administrative Agent, a written
opinion of Borrower's legal counsel and a written opinion of Guarantor's legal
counsel, each covering such matters as Administrative Agent may reasonably
require. The legal counsel and the terms of the opinion must be reasonably
acceptable to Administrative Agent;
(f) Insurance. If required by Administrative Agent, evidence of any
insurance coverage required by Section 6.1.3 of this Agreement; and
(g) Other Items. Any other items that Administrative Agent
reasonably requires.
5.1.2 Payment of Fees. Borrower shall have paid to Administrative
Agent, for its own account or for the account of the Lenders, as applicable, the
fees set forth in the Fee Letter that are due on or before the Closing Date.
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5.1.3 Payment of Expenses. Payment of the expenses of preparing this
Agreement and the other Loan Documents, including reasonable attorneys' fees and
costs, the review of any Phase I environmental site assessments, and any and all
other fees due from Borrower to Administrative Agent.
5.2 Conditions of Each Borrowing or Issuance of Letter of Credit. The
obligation of the Lenders to make any Loan (including the initial Loan) or of
BankAmerica to issue any Letter of Credit is subject to the satisfaction of all
of the following conditions precedent on the relevant borrowing date:
(a) Administrative Agent shall have received a Borrowing Notice
requesting an extension of credit;
(b) The requested extension of credit shall not cause the aggregate
outstanding principal amount of the Loans to exceed the Availability at such
time and, if the request is for a Swing Loan, shall not cause the aggregate
outstanding principal amount of Swing Loans to exceed the Swing Line
Availability at such time;
(c) Administrative Agent shall have received a certificate from
Borrower in the form of Exhibit E and described in Section 6.3(h) representing,
among other things, that the requested extension of credit shall not cause the
aggregate outstanding principal amount of the Loans to exceed the Availability
at such time or the Swing Line Availability at such time, as the case may be,
and that Borrower and Guarantor, and any subsidiaries or affiliates whose
financial results are consolidated with those of Borrower and Guarantor for
reporting purposes, are in compliance with all other material covenants and
financial covenants that each has made in this Agreement;
(d) The representations and warranties of Borrower set forth in
Article 7 of this Agreement shall be true and correct in all material respects
on and as of the date of such borrowing with the same force and effect as if
made on and as of such date;
(e) No Default or Event of Default shall exist or result from such
borrowing;
(f) Administrative Agent shall have received from Borrower a pro
forma calculation of Availability and of each of the financial covenants set
forth in Sections 6.9, 6.10, 6.11 and 6.12; and
(g) If Borrower has requested issuance of a Letter of Credit,
Administrative Agent shall have received a Letter of Credit Agreement signed by
the account party (and Borrower, if Borrower is not the account party), and the
fronting fee for such Letter of Credit described in Section 2.10.2.
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6. COVENANTS OF BORROWER. Borrower promises to keep each of the following
covenants:
6.1 Covenants Relating to Unencumbered Asset Pool.
6.1.1 Compliance with Law. Borrower shall comply with all existing and
future laws (including Environmental Laws), regulations, orders, building
restrictions and requirements of, and all agreements with and commitments to,
all Governmental Authorities having jurisdiction over Borrower or Borrower's
business, including those pertaining to the construction, sale, leasing or
financing of any Unencumbered Asset Pool Property or the environmental condition
of any Unencumbered Asset Pool Property, and with all recorded covenants and
restrictions affecting any Unencumbered Asset Pool Property (all collectively,
the "Requirements"). Notwithstanding any contrary provision in this subsection,
(i) Borrower shall have a right to contest all existing and future Requirements
(other than those relating to Environmental Laws) before complying therewith,
and (ii) Borrower shall have a right to contest all existing and future
Requirements relating to Environmental Laws for one year, before complying
therewith.
6.1.2 Site Visits. Borrower and Guarantor shall allow Administrative
Agent and Lenders access to each Unencumbered Asset Pool Property at any
reasonable time upon reasonable written notice by Administrative Agent to
Borrower for the purpose of inspecting the Unencumbered Asset Pool Property,
and, upon reasonable belief by Administrative Agent or Lenders of the existence
of a matter that should be investigated, taking soil or groundwater samples and
conducting tests, among other things, to investigate for the presence of
Hazardous Substances. Borrower and Guarantor shall also allow Administrative
Agent to examine, copy and audit its and their books and records. Neither
Administrative Agent nor any Lender is under any duty to visit or observe any
Unencumbered Asset Pool Property, and Administrative Agent is under no duty to
examine any books or records. Any site visit, observation or examination by
Administrative Agent or any Lender shall be solely for the purpose of protecting
Administrative Agent's and such Lender's interests and preserving Administrative
Agent's rights under the Loan Documents. Neither Administrative Agent nor any
Lender owes a duty of care to protect Borrower or any other Person against, or
to inform Borrower, Guarantor, or any other Person of, any adverse condition
affecting any Unencumbered Asset Pool Property, including any defects in the
design or construction of any improvements located on an Unencumbered Asset Pool
Property or the presence of any Hazardous Substances on an Unencumbered Asset
Pool Property.
6.1.3 Insurance. Borrower shall maintain the following insurance:
(a) Special Form property damage insurance in non-reporting form on
each Unencumbered Asset Pool Property, with a policy limit in an amount not less
than the full insurable value of the improvements located on such Unencumbered
Asset Pool Property on a replacement cost basis, including tenant improvements,
if any. The policy shall include a business interruption (or rent loss, if more
appropriate) endorsement in the amount of six months' principal and interest
payments, taxes and insurance premiums, a
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lender's loss payable endorsement (438 BFU) in favor of Administrative Agent, as
agent for the Lenders, and any other endorsements reasonably required by
Administrative Agent.
(b) Comprehensive General Liability coverage with such limits as
Administrative Agent may reasonably require. This policy shall name
Administrative Agent as an additional insured. Coverage shall be written on an
occurrence basis, not claims made.
All policies of insurance required by Administrative Agent must be issued by
companies reasonably approved by Administrative Agent and otherwise be
reasonably acceptable to Administrative Agent as to amount, forms, risk
coverages and deductibles. In addition, each policy (except workers'
compensation) must provide Administrative Agent at least thirty (30) days' prior
notice of cancellation, non-renewal or modification. If Borrower fails to keep
any such coverage in effect while any Commitment is outstanding, Administrative
Agent may procure the coverage at Borrower's expense. Borrower shall reimburse
Administrative Agent, on demand, for all premiums advanced by Administrative
Agent or Lenders, which advances shall be considered to be additional loans to
Borrower hereunder at the Default Rate applicable to Reference Rate Loans.
6.1.4 Preservation of Rights. Borrower shall obtain and preserve all
rights, privileges and franchises necessary or desirable for the operation of
each Unencumbered Asset Pool Property and the conduct of Borrower's business.
Borrower shall maintain all of the Unencumbered Asset Pool Property in good
condition. Borrower shall, at Borrower's sole cost and expense, follow all
recommendations in any asbestos survey conducted by an expert selected by
Borrower and approved by Administrative Agent with respect to any Unencumbered
Asset Pool Property regarding safety conditions for, and maintenance of, any
asbestos containing materials, including any recommendation to institute an O&M
Plan.
6.1.5 Taxes. Borrower shall make timely payments of all local, state
and federal taxes; provided, however, that Borrower need not pay any such taxes
(a) that it is contesting in good faith and by appropriate proceedings that were
promptly commenced and are being diligently pursued, and (b) for which Borrower
has created an appropriate reserve or other provision as required by GAAP.
6.2 Payment of Expenses.
(a) Borrower shall pay or reimburse Administrative Agent for the
benefit of each Lender within fifteen (15) days after demand for all reasonable
costs and expenses, including all legal, audit and review fees and expenses
(including the allocated cost of such services by Administrative Agent's
employees) incurred by Administrative Agent in connection with the preparation,
administration (including the cost of any documentation fees, but excluding
other costs and expenses of ordinary collection and servicing administration
while the Loans are not in default), and execution of any Loan Document and any
amendment, supplement, waiver or modification and any other documents prepared
in connection herewith or therewith (whether or not the particular
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Loan, transaction or document is consummated). Such costs and expenses shall
include fees for due diligence and environmental services (including only those
services performed by Administrative Agent or Lender employees and the cost of
those services that the Administrative Agent or any Lender incurs because it
believes that such services are required), legal fees and expenses of counsel,
counsel's travel expenses associated with any syndication, lender meetings or
other conferences and any other reasonable fees and costs for services,
regardless of whether such services are furnished by Administrative Agent's or
any Lender's employees or by independent contractors.
(b) Borrower shall pay or reimburse Administrative Agent for the
benefit of each Lender within fifteen (15) days after demand for all costs and
expenses, including all legal, audit and review fees and expenses (including the
allocated cost of such services by Administrative Agent's employees) incurred by
Administrative Agent in connection with the enforcement or preservation of any
rights or remedies under any Loan Document with respect to an Event of Default
(including any "workout" or restructuring of the Loans, and any bankruptcy,
insolvency or other similar proceeding, judicial proceeding or arbitration).
Borrower acknowledges that none of the fees described in Section 2.10 include
amounts payable by Borrower under this Section 6.2. All such sums incurred by
Administrative Agent or any Lender and not immediately reimbursed by Borrower
within fifteen (15) days of written notice by Administrative Agent shall be
considered an additional loan to Borrower hereunder at the Default Rate
applicable to Reference Rate Loans.
6.3 Financial and Other Information; Certification. Borrower shall provide
to Administrative Agent the following financial information and statements for
Guarantor and its consolidated subsidiaries prepared on a consolidated basis:
(a) Within one hundred twenty (120) days after each fiscal year end,
the annual audited consolidated financial statements of Borrower and Guarantor
prepared in accordance with GAAP;
(b) Within forty-five (45) days after the end of each fiscal quarter,
quarterly unaudited financial statements of Borrower and Guarantor, including
cash flow statements;
(c) Within one hundred twenty (120) days of Borrower's fiscal year
end, Borrower's annual report.
(d) If requested by Administrative Agent, copies of Borrower's and
Guarantor's federal income tax return (with all schedule K-1's attached), within
fifteen (15) days of filing, and, if requested by Administrative Agent, copies
of any extensions of the filing date.
(e) Within sixty (60) days after the end of each calendar quarter, an
operating statement and rent roll for each Unencumbered Asset Pool Property in
form and substance reasonably satisfactory to Administrative Agent.
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(f) Copies of Guarantor's Form 10-K Annual Report within one hundred
twenty (120) days of its fiscal year end, the financial statements contained
therein to be prepared on a consolidated basis according to GAAP, to include
Borrower and Guarantor, to be certified by the chief financial officer of
Borrower, and to be audited (with an unqualified opinion) by KPMG Peat Marwick
or another Certified Public Accountant acceptable to Administrative Agent.
(g) Copies of Guarantor's Form 10-Q Quarterly Report within sixty (60)
days after the end of each calendar quarter except fiscal year end, copies of
any and all Form 8-K filings immediately upon filing with the Securities and
Exchange Commission, and copies of all statements, reports and notices sent or
made available generally by Borrower or Guarantor to their respective security
holders at the time they are so sent or made available, any financial statements
contained therein to be certified by the chief financial officer of Borrower,
and (to the extent appropriate) to be prepared on a consolidated basis according
to GAAP and to include Borrower and Guarantor.
(h) At the time of each advance, each extension of credit, and each
issuance of a Letter of Credit hereunder, a compliance certificate of Borrower
in the form of Exhibit E signed and certified by an authorized financial officer
of Borrower (i) stating specifically that the aggregate outstanding principal
amount of the Loans is less than or equal to the Availability, and (ii) setting
forth whether there exists as of the date of the certificate, any Event of
Default under this Agreement and, if any such Event of Default exists,
specifying the nature thereof and the action Borrower is taking and proposes to
take with respect thereto.
(i) Within sixty (60) days of the end of each calendar quarter and in
addition within one hundred twenty (120) days of the end of each calendar year,
a compliance certificate of Borrower in the form of Exhibit E signed and
certified by an authorized financial officer of Borrower (i) setting forth the
information and computations (in sufficient detail) to determine the Gross Asset
Value and to establish that Borrower is in compliance with all financial
covenants set forth in this Agreement at the end of the period covered by the
financial statements then being furnished, (ii) stating specifically that the
aggregate principal amount outstanding on the Loans is less than or equal to the
Availability, and (iii) setting forth whether there existed as of the date of
the most recent financial statements of Guarantor and its consolidated
subsidiaries and whether there exists as of the date of the certificate, any
Event of Default under this Agreement and, if any such Event of Default exists,
specifying the nature thereof and the action Borrower is taking and proposes to
take with respect thereto.
(j) Within thirty (30) days after the end of fiscal year, Borrower's
and Guarantor's one-year calendar budget (showing month-by-month projections).
(k) Within forty-five (45) days after the end of each fiscal quarter,
rolling four (4) quarter operating projections of Borrower and Guarantor in form
and content reasonably acceptable to Administrative Agent.
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(l) General information on the status of projects under development
directly or indirectly by Borrower or by Guarantor prepared on a quarterly
basis, in the form of Exhibit E and the schedules attached thereto.
(m) Within thirty (30) days after the end of each fiscal year, an
annual business plan for Borrower and Guarantor in form and content reasonably
acceptable to Administrative Agent.
(n) Any other financial or other information concerning Borrower's or
Guarantor's affairs and properties as Administrative Agent may reasonably
request, to be furnished promptly upon such request.
6.4 Notices. Borrower shall promptly notify Administrative Agent in
writing of any knowledge that any officer of Borrower or Guarantor has of:
(a) any litigation affecting Borrower, Guarantor, any Unencumbered
Asset Pool Property, and/or any subsidiary or affiliate of Borrower or Guarantor
that directly owns any development property or whose financial results are
consolidated with those of Borrower or Guarantor for reporting purposes, in each
case where the aggregate amount at risk or at issue (including litigation costs
and attorneys' fees and expenses, but excluding claims which, in Administrative
Agent's reasonable judgment, are expected to be covered by insurance) exceeds:
(1) in the case of litigation affecting an Unencumbered Asset Pool Property, an
aggregate amount of Five Million Dollars ($5,000,000), or (2) in the case of
litigation affecting Borrower, Guarantor, or any such subsidiary or affiliate of
Borrower or Guarantor, an aggregate amount of Twenty-five Million Dollars
($25,000,000);
(b) any notice that any property or Borrower's or Guarantor's business
fails in any material respect to comply with any applicable law (including any
Environmental Law), regulation or court order, where the failure to comply could
have a material adverse effect on Borrower or Guarantor;
(c) any material adverse change in the physical condition of any
Unencumbered Asset Pool Property or Borrower's or Guarantor's financial
condition or operations, or any other circumstance that materially adversely
affects Borrower's intended use of any Unencumbered Asset Pool Property or
Borrower's ability to repay the Loan;
(d) any failure to comply with this Agreement or any other material
agreement to which Borrower or Guarantor is a party, where such noncompliance
has a material adverse effect on the ability of Borrower or Guarantor to perform
their respective obligations under the terms of the Loan Documents; and
(e) any change in Borrower's or Guarantor's name, legal structure,
jurisdiction of formation, place of business to a state other than the State of
California, or chief executive office to a state other than the State of
California if Borrower or Guarantor has more than one place of business.
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6.5 Negative Covenants.
6.5.1 Without the prior written consent of the Required Lenders (or
Administrative Agent at the request of the Required Lenders), which consent
shall not be unreasonably withheld or delayed, neither Borrower nor Guarantor
shall:
(1) engage in any business activities that would result in less
than seventy percent (70%) of the Gross Asset Value being derived from
multifamily residential apartments;
(2) other than in the ordinary course of Borrower's or
Guarantor's business, lease all or a substantial part of Borrower's or
Guarantor's business or Borrower's or Guarantor's assets;
(3) enter into or invest in any consolidation, merger, pool,
syndicate or other combination unless Borrower is the surviving entity and
control of Borrower does not change.
(4) change the legal structure of Borrower from a limited
partnership that is an operating partnership whose sole general partner is
Guarantor, change the legal structure of Guarantor from a publicly traded real
estate investment trust under the provisions of Internal Revenue Code Sections
856 and 857, or change the legal structure of Borrower and Guarantor as a
so-called up-REIT, or without thirty (30) days' prior written notice to
Administrative Agent, change Borrower's jurisdiction of formation, place of
business, or chief executive office if Borrower or Guarantor has more than one
place of business;
(5) change Borrower's general partner from Guarantor or allow
Guarantor to suffer a change in its executive management such that Keith
Guericke is no longer Chief Executive Officer, George M. Marcus is no longer
Chairman of the Board of Directors or Michael J. Schall is no longer Chief
Financial Officer, unless such executive management is replaced by parties
reasonably acceptable to Administrative Agent within one hundred eighty (180)
days; or
(6) in any rolling four quarter period, dispose of and
distribute sales proceeds to partners, in the case of Borrower, or to
shareholders, in the case of Guarantor, of more than fifteen percent (15%) of
Borrower's or Guarantor's business or Borrower's or Guarantor's assets.
6.5.2 Borrower and Guarantor shall not in any case:
(1) form additional unconsolidated down-REITs for property
acquisitions unless they comply on an on-going basis with each of the following
conditions:
(i) EMC or any wholly owned subsidiary of Borrower or
Guarantor shall be the sole general partner of any such partnership;
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(ii) Guarantor and/or Borrower and/or EMC shall have
effective management control of each property and entity; and
(iii) limited partners shall receive only units and/or cash
for value contributed.
(2) liquidate or dissolve Borrower's or Guarantor's business; or
(3) dispose of all of Borrower's or Guarantor's business or
Borrower's or Guarantor's assets.
6.6 Type of Business; Development Covenants. Borrower shall own, manage,
finance, lease and/or operate as an owner multifamily residential properties,
and all of Borrower's other business activities and investments shall be
incidental thereto. Guarantor and its consolidated subsidiaries shall not own at
any time, on a consolidated basis:
(a) unentitled land whose aggregate value exceeds three percent (3%)
of Gross Asset Value, or entitled and unentitled land whose aggregate value
exceeds seven and one-half percent (7.5%) of Gross Asset Value; or
(b) any single property under development whose value (at projected
total cost) exceeds five percent (5%) of Gross Asset Value; or
(c) properties under development whose aggregate value (at projected
total cost) exceeds twenty-five percent (25%) of Gross Asset Value; or
(d) Joint Venture Investments whose aggregate value exceeds twenty
percent (20%) of Gross Asset Value; or
(e) Capital Interests in down-REITs the aggregate value of which
Capital Interests exceeds fifteen percent (15%) of Gross Asset Value.
For the purpose of calculating the development limits contained in paragraphs
(a), (b) and (c) above, projects that have not yet attained a stabilized
occupancy (which, for this purpose only, shall be ninety percent (90%)
occupancy) shall be valued at one hundred percent (100%) of the projected total
cost of the project (multiplied, if such project is owned by a Joint Venture, by
Borrower's Capital Interest in such Joint Venture). Projects that attain ninety
percent (90%) occupancy shall no longer be considered for the purpose of
calculating the development limits contained in paragraphs (a), (b) and (c)
above.
6.7 Performance of Acts. Upon request by Administrative Agent, Borrower
shall perform all acts which may be reasonably necessary or advisable to carry
out the intent of the Loan Documents.
6.8 Keeping Guarantor Informed. Borrower shall keep Guarantor (and any
other Person giving a guaranty to Administrative Agent and Lenders with regard
to the Loans), in its capacity as guarantor, informed of Borrower's financial
condition and
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business operations and all other circumstances that may affect Borrower's
ability to pay or perform its obligations under the Loan Documents. In addition,
Borrower shall deliver to Guarantor all of the financial information required to
be furnished to Administrative Agent hereunder.
6.9 Maximum Total Liabilities to Gross Asset Value. Total Liabilities at
the end of each calendar quarter shall not exceed fifty percent (50%) of Gross
Asset Value at such time.
6.10 Unsecured Debt to Unencumbered Asset Value. The amount of Unsecured
Debt at the end of each calendar quarter shall not exceed fifty percent (50%) of
the Unencumbered Asset Pool Value at such time.
6.11 Fixed Charge Coverage Ratio. The ratio of EBITDA for each calendar
quarter divided by the amount of Fixed Charges for such calendar quarter shall
not be less than 1.60:1.0.
6.12 Consolidated Tangible Net Worth. Borrower shall maintain a
consolidated Tangible Net Worth at the end of each calendar quarter that exceeds
the sum of (1) $321,700,000.00 plus (2) eighty percent (80%) of the net proceeds
of all equity issues or sales (including common stock, preferred stock and
operating partnership units) that close after the Closing Date.
6.13 Maximum Quarterly Dividends. Guarantor shall not declare or pay any
distributions or dividends except from cash flow available for distributions or
dividends and earned during the immediately preceding fiscal year, and in any
event not in excess of ninety-five percent (95%) of Funds From Operations (as
generally defined by the National Association of Real Estate Investment Trusts)
("FFO") on a rolling four (4) calendar quarter basis. The total of common and
preferred stock dividends in any calendar quarter may exceed FFO for the quarter
only to the extent necessary for Guarantor to retain its status as a real estate
investment trust under the provisions of Internal Revenue Code Sections 856 and
857.
6.14 Negative Pledge.
(a) Borrower shall not create, assume, or allow any Lien (including
any judicial lien) on any Unencumbered Asset Pool Property, except:
(1) Liens for taxes, assessments or governmental charges or
levies, to the extent that Borrower is not yet required to pay the amount
secured thereby, and easements, covenants, conditions and restrictions,
reciprocal easement and access agreements and similar agreements relating to
ownership and operation; and
(2) Liens imposed by law, such as carrier's, warehouseman's,
mechanic's, materialman's and other similar liens, arising in the ordinary
course of business in respect of obligations that are not overdue or are being
actively contested in good faith by appropriate proceedings, as long as Borrower
has established and
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maintained adequate reserves for the payment of the same and, by reason of
nonpayment, no property of Borrower is in danger of being lost or forfeited; and
(b) Borrower shall not create, assume or allow any negative
pledge agreement in favor of any other Person affecting or relating to any
Unencumbered Asset Pool Property.
(c) Borrower shall have the right to contest in good faith by
appropriate legal or administrative proceeding the validity of any prohibited
Lien affecting its properties so long as (i) no Event of Default exists and is
continuing, (ii) Borrower first deposits with Administrative Agent a bond or
other security satisfactory to Administrative Agent in the amount reasonably
required by Administrative Agent; (iii) Borrower immediately commences its
contest of such Lien and continuously pursues the contest in good faith and with
due diligence; (iv) foreclosure of the Lien is stayed; and (v) Borrower pays any
judgment rendered for the Lien claimant or other third party, unless such
judgment has been stayed as the result of an appeal, within thirty (30) days
after the entry of the judgment. Borrower will discharge or elect to contest and
post an appropriate bond or other security within thirty (30) days of written
demand by Administrative Agent.
6.15 Change in Ownership of Borrower or Management of the Unencumbered
Asset Pool Property. Borrower shall not cause, permit or suffer (a) any change
of the general partner of Borrower, (b) any change in the control of Guarantor
(whether by tender offer for a majority of the outstanding shares of Guarantor,
a merger in which Guarantor is not the surviving entity, or otherwise), or (c)
any Person other than Guarantor or an affiliate of Guarantor to manage an
Unencumbered Asset Pool Property.
6.16 Books and Records. Borrower shall maintain adequate books and
records.
6.17 Audits. Borrower shall allow Administrative Agent and its agents
to inspect Borrower's properties and examine, audit and make copies of books and
records at any reasonable time upon reasonable notice to Borrower. If any of
Borrower's properties, books or records are in the possession of a third party,
Borrower authorizes that third party to permit Administrative Agent or its
agents to have access to perform inspections or audits and to respond to
Administrative Agent's requests for information concerning such properties,
books and records.
6.18 Cooperation. Borrower shall take any action reasonably requested
by Administrative Agent to carry out the intent of this Agreement.
6.19 ERISA Plans. Borrower shall give prompt written notice to
Administrative Agent of:
(a) The occurrence of any reportable event under Section 4043(b)
of ERISA which requires thirty (30) days' notice;
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(b) Any action by Borrower to terminate or withdraw from a Plan or the
filing of any notice of intent to terminate under Section 4041 of ERISA;
(c) Any notice of noncompliance made with respect to a Plan under
Section 4041(b) of ERISA; or
(d) The commencement of any proceeding with respect to a Plan under
Section 4042 of ERISA.
6.20 Use of Proceeds. Borrower shall use the proceeds of the Loan only for
(i) financing for acquisition of real and personal property, (ii) letters of
credit, (iii) working capital in Borrower's business, and (iv) other purposes
permitted by Borrower's organizational documents as they appear as of the
Closing Date, but not for the repurchase of the common stock of Guarantor.
6.21 Use of Proceeds - Ineligible Securities. Borrower shall not use any
proceeds of the Loans, directly or indirectly, to purchase or carry, or reduce
or retire any loan incurred to purchase or carry, any "Margin Stock" (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System)
or to extend credit to others for the purpose of purchasing or carrying any
Margin Stock.
6.22 Existing Convertible "Flipper" Loans. Within twenty-five (25) days
prior to Borrower's conversion (each, a "Conversion") of any portion of the
existing One Hundred Twenty-seven Million Four Hundred Eighteen Thousand Dollars
($127,418,000) of "flipper" loans from a secured to an unsecured status,
Borrower shall provide Lender with an executed certificate of compliance (each,
a "Certificate of Compliance") notifying Lender of such Conversion and
containing a covenant that after the occurrence of any Conversion Borrower shall
continue to be in compliance with all covenants required under the terms of this
Agreement.
7. REPRESENTATIONS AND WARRANTIES. When Borrower and Guarantor sign this
Agreement, and until Administrative Agent and Lenders are repaid in full,
Borrower and Guarantor make the following representations and warranties. Each
request for an extension of credit constitutes a renewed representation and
warranty.
7.1 Organization of Borrower. Borrower is a limited partnership duly formed
and existing under the laws of California.
7.2 Authorization. The execution and compliance with this Agreement and
each Loan Document to which Borrower is a party are within Borrower's powers,
have been duly authorized, and do not conflict with any of Borrower's
organizational papers.
7.3 Enforceable Agreement. This Agreement is a legal, valid and binding
agreement of Borrower, enforceable against Borrower in accordance with its
terms, and it and any other Loan Document to which it is a party, when executed
and delivered, will be similarly legal, valid, binding and enforceable, except
as the same may be limited by
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insolvency, bankruptcy, reorganization, or other laws relating to or affecting
the enforcement of creditors' rights or by general
equitable principles.
7.4 Good Standing. In each state in which Borrower does business, it is
properly licensed, in good standing, and, where required, in compliance with
fictitious name statutes.
7.5 No Conflicts. Neither Borrower nor the Unencumbered Asset Pool Property
are in violation of, nor do the terms of this Agreement or any other Loan
Document conflict with, any regulation or ordinance, any order of any court or
governmental entity, any organizational documents of Borrower or Guarantor, or
any covenant or agreement affecting Borrower or the Unencumbered Asset Pool
Property, which has a material adverse effect on the Borrower or the
Unencumbered Asset Pool Property.
7.6 Financial Information. All financial information which has been and
will be delivered to Administrative Agent, including all information relating to
the financial condition of Borrower, Guarantor and the Unencumbered Asset Pool
Property, did as of its date fairly and accurately represent the financial
condition being reported on. All such information was and will be prepared in
accordance with generally accepted accounting principles consistently applied,
unless otherwise noted. Since December 31, 2001, there has been no material
adverse change in the financial condition of Borrower, Guarantor or the
Unencumbered Asset Pool Property.
7.7 Borrower Not a "Foreign Person". Borrower is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986,
as amended from time to time.
7.8 Lawsuits. There are no lawsuits, actions, tax claims, investigations,
proceedings, or other disputes, pending or threatened, in any court or before
any arbitrator or Governmental Authority that purport to affect Borrower,
Guarantor, any subsidiaries or affiliates of Borrower or Guarantor, or any
transaction contemplated by this Agreement that will have a material adverse
effect on Borrower, Guarantor, or any subsidiaries or affiliates of Borrower or
Guarantor, or any transaction contemplated by this Agreement, or on the ability
of Borrower, Guarantor or any of their subsidiaries or affiliates, to perform
their respective obligations under the Loan Documents.
7.9 Permits, Franchises. Borrower possesses all permits, memberships,
franchises, contracts and licenses required and all trademark rights, trade name
rights, patent rights and fictitious name rights necessary to enable it to
conduct the business in which it is now engaged.
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7.10 Other Obligations. Borrower is not in material default (taking into
account all applicable cure periods, if any) on any material obligation for
borrowed money, any purchase money obligation or any other material lease,
commitment, contract, instrument or obligation.
7.11 Income Tax Returns. Except as otherwise disclosed to Administrative
Agent in a writing referring to this Section 7.11, Borrower has no knowledge of
any pending assessments or adjustments of its income tax in an amount in excess
$500,000 for any year.
7.12 No Event of Default. There is no event which is, or with notice or
lapse of time or both would be, an Event of Default under this Agreement.
7.13 ERISA Plans.
(a) Borrower has fulfilled its obligations, if any, under the minimum
funding standards of ERISA and the Code with respect to each Plan and is in
compliance in all material respects with the presently applicable provisions of
ERISA and the Code, and has not incurred any liability with respect to any Plan
under Title IV of ERISA.
(b) No reportable event has occurred under Section 4043(b) of ERISA
for which the applicable authorities require thirty (30) days' notice.
(c) No action by Borrower to terminate or withdraw from any Plan has
been taken and no notice of intent to terminate a Plan has been filed under
Section 4041 of ERISA.
(d) No proceeding has been commenced with respect to a Plan under
Section 4042 of ERISA, and no event has occurred or condition exists which might
constitute grounds for the commencement of such a proceeding.
7.14 Location of Borrower. Borrower's place of business (or, if Borrower
has more than one place of business, its chief executive office) is located at
the address listed under Borrower's signature on this Agreement or at such other
place as to which Borrower has notified Administrative Agent in writing.
7.15 No Required Third Party/Governmental Approvals. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with any
third party or any governmental agency is necessary or required in connection
with Borrower's execution, delivery or performance of this Agreement or any
other Loan Document to which Borrower is a party, or the enforcement of any such
agreements against Borrower.
8. DEFAULT AND REMEDIES.
8.1 Events of Default. Borrower will be in default under this Agreement
upon the occurrence of any one or more of the following events ("Event of
Default"):
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(a) Borrower fails to make any payment due hereunder, or fails to make
any payment demanded by Administrative Agent under any Loan Document, on the
earlier of (i) the Maturity Date or (ii) within fifteen (15) days after (x) the
date when due or (y) if the payment is unscheduled, the date when payment is
demanded by Administrative Agent; or
(b) Borrower fails to comply with any covenant contained in this
Agreement other than those referred to in clause (a), and does not either cure
that failure within thirty (30) days after written notice from Administrative
Agent, or, if the default cannot be cured in thirty (30) days, Borrower fails to
promptly commence cure (in any event, within ten (10) days after receipt of such
notice), and thereafter diligently prosecute such cure to completion, and
complete such cure within ninety (90) days after receipt of such notice; or
(c) Borrower or Guarantor becomes insolvent or the subject of any
bankruptcy or other voluntary proceeding, in or out of court, for the adjustment
of debtor-creditor relationships; or the subject of any involuntary proceeding,
in court, for the adjustment of debtor-creditor relationships, where such
proceeding is not dismissed within sixty (60) days of commencement; or
(d) Borrower or Guarantor dissolves or liquidates; or
(e) Any representation or warranty made or given in any of the Loan
Documents proves to be false or misleading in any material respect; or
(f) Guarantor breaches or fails to comply with any covenant contained
in this Agreement and does not cure that failure within thirty (30) days after
written notice from Administrative Agent, or, if the default cannot be cured in
thirty (30) days, Guarantor fails to promptly commence cure (in any event,
within ten (10) days after receipt of such notice), and thereafter diligently
prosecute such cure to completion, and complete such cure within ninety (90)
days after receipt of such notice; or
(g) A defined event of default occurs under any of the Loan Documents;
or
(h) A final non-appealable judgment or order is entered against
Borrower or Guarantor that materially adversely affects (i) Borrower's intended
use of one or more of the Unencumbered Asset Pool Properties (subject to
Borrower's right to remove any Unencumbered Asset Pool Property from the
Unencumbered Asset Pool pursuant to Section 4.1(b)) or (ii) Borrower's or
Guarantor's ability to repay the Loan; or
(i) Borrower or Guarantor fails, after the expiration of applicable
cure periods, if any, to perform any obligation under any other agreement
Borrower has with Administrative Agent or any Lender or any affiliate of
Administrative Agent or any Lender. For the purposes of this section,
"affiliated with" means in control of, controlled by or under common control
with; or
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(j) Borrower or Guarantor defaults (taking into account applicable
cure periods, if any) in connection with any credit such Person has with any
lender, if (1) the default consists of the failure to make a payment in excess
of Five Million Dollars ($5,000,000) when due, or (2) one or more obligations
that are recourse to Borrower or Guarantor whose outstanding principal amount
exceeds Fifteen Million Dollars ($15,000,000) in the aggregate have been
accelerated; or
(k) There is a material adverse change in Borrower's or Guarantor's
financial condition, or an event or condition that materially impairs Borrower's
intended use of one or more of the Unencumbered Asset Pool Properties occurs
which materially impairs Borrower's or Guarantor's ability to repay the Loan; or
(l) The Guarantor shall no longer qualify as a real estate
investment trust under the provisions of Code Sections 856 and 857.
8.2 Remedies. If any Event of Default occurs, Administrative Agent shall,
at the request of, or may, with the consent of, the Required Lenders:
8.2.1 Termination of Commitment to Lend. Declare the Commitment of
each Lender to make Loans (including Swing Line Loans) or the commitment of
BankAmerica to issue Letters of Credit to be terminated, whereupon such
commitment shall forthwith be terminated; provided, however, that Administrative
Agent and the Lenders shall continue to honor any outstanding Letter of Credit;
and
8.2.2 Acceleration of Loans. 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 Borrower; and
8.2.3 Security for Letters of Credit. Require that Borrower deposit
with Administrative Agent, for the benefit of the Lenders, on demand and as cash
security for Borrower's obligations under the Loan Documents, an amount equal to
the aggregate undrawn amount of all then outstanding Letters of Credit (and
Borrower hereby grants to Administrative Agent, as administrative agent for the
Lenders, a security interest in any such amount deposited with Administrative
Agent (and any amount deposited with Administrative Agent pursuant to subsection
2.7.2(a)), all earnings thereon and all proceeds thereof, and as to such amounts
Administrative Agent shall have the rights and remedies of a secured party under
the California Uniform Commercial Code); provided that upon the occurrence of
any event specified in subsection 8.1(c) above such amounts shall automatically
become due and payable without further act of Administrative Agent or the
Lenders; and
8.2.4 Exercise of Rights and Remedies. Exercise all rights and
remedies available to it under the Loan Documents or applicable law; provided,
however, that upon the occurrence of any event specified in subsection 8.1(c)
above the obligation of each Lender to make Loans and the obligation of
BankAmerica to issue Letters of Credit shall
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automatically terminate, and the unpaid principal amount of all outstanding
Loans and all interest and other amounts as aforesaid shall automatically become
due and payable without further act of Administrative Agent or any Lender.
8.3 Rights Not Exclusive. The rights provided for in this Agreement and the
other Loan Documents are cumulative and are not exclusive of any other rights,
powers, privileges or remedies provided by law or in equity, or under any other
instrument, document or agreement now existing or hereafter arising.
9. REFERENCE AND ARBITRATION.
9.1 Mandatory Arbitration. Except as provided below, any controversy or
claim between or among the parties, including those arising out of or relating
to this Agreement or the other Loan Documents and any claim based on or arising
from an alleged tort, shall at the request of any party be determined by
arbitration. The arbitration shall be conducted in accordance with the United
States Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of law
provision in this Agreement, and under the Commercial Rules of the American
Arbitration Association ("AAA"). The arbitrator(s) shall give effect to statutes
of limitation in determining any claim. Any controversy concerning whether an
issue is arbitrable shall be determined by the arbitrator(s). Judgment upon the
arbitration award may be entered into any court having jurisdiction. The
institution and maintenance of an action for judicial relief or pursuit of a
provisional or ancillary remedy shall not constitute a waiver of the right of
any party, including the plaintiff, to submit the controversy or claim to
arbitration if any other party contests such action for judicial relief.
9.2 Judicial Reference. Subject to the provisions of Section 9.1 above, in
any judicial action between or among the parties, including but not limited to
any action or cause of action arising out of or relating to this Agreement or
the other Loan Documents or based on or arising from an alleged tort, all
decisions of fact and law shall at the request of any party be referred to a
referee in accordance with California Code of Civil Procedure Sections 638 et
seq. The parties shall designate to the court a referee or referees selected
under the auspices of the AAA in the same manner as arbitrators are selected in
AAA-sponsored proceedings. The presiding referee of the panel, or the referee if
there is a single referee, shall be an active attorney or retired judge.
Judgment upon the award rendered by such referee(s) shall be entered in the
court in which such proceeding was commenced in accordance with California Code
of Civil Procedure Sections 644 and 645.
9.3 Provisional Remedies; Self-Help. No provision of this Agreement shall
limit the right of any party to this Agreement to exercise self-help remedies
such as setoff, or obtaining provisional or ancillary remedies from a court of
competent jurisdiction before, after, or during the pendency of any arbitration
or other proceeding. The exercise of a remedy does not waive the right of either
party to resort to arbitration or reference.
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10. THE ADMINISTRATIVE AGENT.
10.1 Appointment and Authorization of Administrative Agent. Each Lender
hereby irrevocably appoints, designates and authorizes 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 and any other Loan
Document, together with such powers as are reasonably incidental thereto.
10.2 Administrative Agent's Powers. Subject to the limitations set forth in
the Loan Documents, Administrative Agent's powers include but are not limited to
the power: (a) to administer, manage and service the Loans; (b) to enforce the
Loan Documents; (c) to make all decisions under the Loan Documents in connection
with the day-to-day administration of the Loans, any inspections required by the
Loan Documents, and other routine administration and servicing matters; (d) to
collect and receive from Borrower or any third persons all payments of amounts
due under the terms of the Loan Documents and to distribute the amounts thereof
to the Lenders; (e) to collect and distribute or disburse all other amounts due
under the Loan Documents; (f) to grant or withhold consents, approvals or
waivers, and make any other determinations in connection with the Loan
Documents; and (g) to exercise all such powers as are incidental to any of the
foregoing matters. Administrative Agent shall furnish to the Lenders copies of
material documents, including confidential ones, received from Borrower
regarding the Loans, the Loan Documents and the transactions contemplated
thereby. Administrative Agent shall have no responsibility with respect to the
authenticity, validity, accuracy or completeness of the information provided.
Administrative Agent will exercise its powers under this Agreement in the
ordinary course of business and in accordance with Administrative Agent's usual
practices, as may be modified from time to time as Administrative Agent deems
appropriate under the circumstances. Except as expressly set forth in this
Agreement or the other Loan Documents, Administrative Agent shall be entitled to
use its discretion in taking or refraining from taking any actions in connection
with the Loans and the Loan Documents. Agent may, in its sole discretion,
request the Lenders' consent to an action for which their consent is not
required under this Agreement or the other Loan Documents, but any such request
shall not create any express or implied requirement that the Lenders' consent to
any action be obtained except as expressly provided in this Agreement or the
other Loan Documents. Administrative Agent may exercise any of its powers under
this Agreement or any other Loan Document by or through agents or employees, and
shall be entitled to advice of counsel concerning all matters pertaining to such
actions. Administrative Agent shall not be responsible for the negligence or
misconduct of any agent or counsel that Administrative Agent selects with
reasonable care.
10.3 Limitation on Administrative Agent's Duties. Notwithstanding any
contrary provision of any Loan Document, Administrative Agent shall not have any
duties or responsibilities except those expressly set forth in the Loan
Documents, nor shall Administrative Agent have any fiduciary relationship with
any Lender, and no
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implied covenants, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document against Administrative
Agent.
10.4 Liability of Administrative Agent. None of Agent-Related Persons shall
(i) be liable for any action taken or omitted to be taken by any of them in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for such Person's own gross negligence or willful
misconduct), or (ii) be responsible to any of the Lenders for any statement,
representation or warranty made by Borrower, Guarantor or any affiliate of
Borrower or Guarantor contained in any Loan Document or in any certificate,
report, statement or other document provided in connection with this Agreement
or any Loan Document, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document, or
for any failure of Borrower or Guarantor to perform its obligations under any
Loan Document. Except as expressly provided in this Agreement, no Agent-Related
Person shall be under any obligation to any Lender 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 Borrower or Guarantor or any of their
subsidiaries or affiliates.
10.5 Co-Agents. None of the Lenders identified on the face page or the
signature pages of this Agreement as a "Co-Agent" shall have any right, power,
obligation, liability, responsibility or duty under this Agreement or the other
Loan Documents other than those applicable to all Lenders as such.
10.6 Credit Decision. Each Lender acknowledges that none of Agent-Related
Persons has made any representation or warranty to it, and that no act by
Administrative Agent hereinafter taken, including any review of the affairs of
Borrower or Guarantor, shall be deemed a representation or warranty by any
Agent-Related Person to any Lender. Each Lender represents to Administrative
Agent that, independently and without reliance upon any Agent-Related Person,
and based on such documents and information as it has deemed appropriate, such
Lender has made its own appraisal of and investigation into the business,
prospects, operations, property, financial and other condition and
creditworthiness of Borrower and Guarantor, the value of and title to any and
all Unencumbered Asset Pool Properties, and all applicable financial and
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to Borrower, and
that it will continue to make its own credit analysis 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 Borrower and Guarantor. Except for notices, reports and
other documents that Administrative Agent is expressly required to furnish to
Lenders, Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning Borrower,
Guarantor or any Unencumbered Asset Pool Property that may come into the
possession of any Agent-Related Person.
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10.7 Indemnification; Cost and Expenses.
10.7.1 Lenders, according to their respective Pro Rata Shares, shall
indemnify any Agent-Related Person upon demand from and against any and all
Indemnified Liabilities to the extent not reimbursed by or on behalf of Borrower
and without limiting the obligation of Borrower to do so. However, no Lender
shall be liable for the payment of Indemnified Liabilities to any Agent-Related
Person to the extent that such Indemnified Liabilities result from such
Agent-Related Person's gross negligence or willful misconduct.
10.7.2 Each Lender shall reimburse Administrative Agent upon demand
for its Pro Rata Share of any costs or expenses (including legal fees) incurred
by Administrative Agent in connection with the preparation, administration,
modification or enforcement of, or legal advice in connection with, this
Agreement or any other Loan Document to the extent that Administrative Agent is
not reimbursed for such expenses by or on behalf of Borrower.
10.7.3 Each Lender is severally but not jointly liable to Borrower
according to its Pro Rata Share under the Loan Documents. Each Lender agrees to
indemnify the other Lenders and Administrative Agent with respect to claims,
liabilities, damages or losses arising out of the failure of said indemnifying
Lender to meet its obligations under the Loan Documents.
10.7.4 The undertakings in this Section 10.7 shall survive the
termination of this Agreement and the other Loan Documents, the payment of all
obligations hereunder and the resignation or replacement of Administrative
Agent.
10.8 Administrative Agent in its Individual Capacity. Each Lender
acknowledges that Administrative Agent and its Affiliates now or in the future
may have banking or other financial relationships, including being an agent on
other loans, with Borrower, Guarantor and their respective affiliates, as though
BankAmerica were not Administrative Agent hereunder and without notice to or any
consent of Lenders. Each Lender hereby expressly waives any objection to such
actual or potential conflict of interest (subject however to Lenders' right to
replace Administrative Agent as provided herein). Each Lender acknowledges that
in the course of such activities BankAmerica or its Affiliates may receive
information regarding Borrower, Guarantor or their respective affiliates and
acknowledge that Administrative Agent shall be under no obligation to provide
such information to them, whether or not confidential. With respect to the
Loans, BankAmerica shall have the same rights and powers under this Agreement
and the other Loan Documents as any other Lender, may exercise the same as
though it were not Administrative Agent, and the terms "Lender" and "Lenders"
include BankAmerica in its individual capacity. Bank of America shall continue
to be a Lender under this Agreement so long as it acts as Administrative Agent.
10.9 Notice of Default. Except for defaults in the payment of principal,
interest and fees payable to Administrative Agent for the account of Lenders and
such other Obligations for which Administrative Agent is expressly responsible
for determining
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Borrower's compliance, Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default,
unless Administrative Agent shall have received written notice from Borrower or
a Lender referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". Administrative
Agent will promptly notify Lenders of its receipt of any such notice.
Administrative Agent's action with respect to any such Default or Event
of Default shall be in accordance with the provisions of this Agreement and the
other Loan Documents.
10.10 Successor Administrative Agent. Administrative Agent may, and at the
request of the Required Lenders shall, resign as Administrative Agent upon
thirty (30) days' notice to Lenders. If Administrative Agent resigns under this
Agreement, the Required Lenders shall appoint from among the Lenders a successor
administrative agent. If no successor administrative agent is appointed prior to
the effective date of the resignation of Administrative Agent, Administrative
Agent may appoint, after consulting with the Lenders, a successor administrative
agent that would qualify as an Eligible Assignee. Upon its acceptance of the
appointment as successor administrative agent, such successor shall succeed to
all of the rights, powers and duties of the retiring Administrative Agent, the
term "Administrative Agent", shall mean such successor, and the appointment,
powers and duties of such retiring Administrative Agent shall terminate. After
any retiring Administrative Agent's resignation hereunder as administrative
agent, the provisions of this Agreement regarding payment of costs and expenses
and indemnification of Administrative Agent shall inure to its benefit as to any
actions that such retiring Administrative Agent took or omitted to take while it
was Administrative Agent under this Agreement. If no successor administrative
agent has accepted appointment as Administrative Agent by the date that is
thirty (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
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor administrative agent in the manner set forth above. Upon
replacement of Administrative Agent as provided in this Agreement, the former
Administrative Agent shall promptly deliver to the new Administrative Agent an
assignment of all beneficial interest in any collateral security for the Loans,
if any (if before acquisition of title to any such collateral security), or a
quitclaim deed to and assignment of any such property, if any (if after
acquisition of any such collateral security) and copies of any books, records
and documents related to the Loans to which the Lenders are entitled and which
is then in the former Administrative Agent's possession.
10.11 Withholding Tax. All taxes due and payable on any payments to be made
to a Lender under this Agreement shall be such Lender's sole responsibility,
except to the extent such taxes are actually reimbursed by Borrower under the
Loan Documents. All payments to be made to each Lender under this Agreement
shall be made after deduction for any taxes, charges, levies or withholdings
which are imposed by the country of incorporation of such Lender, the United
States of America or any other applicable taxing authority. Each Lender agrees
to provide to Administrative Agent completed and signed
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copies of any forms that may be required by the United States Internal Revenue
Service (and any applicable state authority) in order to certify such Lender's
exemption from or reduction of United States (or applicable state) withholding
taxes with respect to payments to be made to such Lender under the Loan
Documents.
Each Lender agrees to promptly notify Administrative Agent of any
change that would modify or render invalid any claimed exemption or reduction,
or of any sale, assignment, participation or other transfer by such Lender of
all or part of its Commitment or its Loans. If any Governmental Authority
asserts a claim that Administrative Agent did not properly withhold tax from
amounts paid to or for the account of any Lender, such Lender shall indemnify
Administrative Agent fully for all amounts paid by Administrative Agent as tax
or otherwise, including penalties and interest, and including any taxes imposed
by any jurisdiction on the amounts payable to Administrative Agent under this
Section, together with all costs and expenses (including legal expenses). The
obligation of each Lender under this Section 10.11 shall survive the payment of
all Obligations and the resignation or replacement of Administrative Agent.
11. MISCELLANEOUS PROVISIONS.
11.1 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by Borrower therefrom, shall be effective unless the same shall be in
writing and signed by the Required Lenders (or by Administrative Agent at the
written request of the Required Lenders) and, in the case of an amendment, by
Borrower if required, and acknowledged by Administrative Agent, and then any
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 waiver,
amendment or consent shall do any of the following unless it is in writing and
signed by all the Lenders (and in the case of an amendment, by Borrower if
required) and acknowledged by Administrative Agent:
(a) Except as otherwise provided in Sections 2.12 and 2.16, increase
the aggregate Commitment or increase the Commitment of any Lender;
(b) Postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees or other amounts due
to the Lenders, or any of them, hereunder or under any other Loan Document;
(c) Reduce the rate of interest or any fees or other amounts payable
in connection with the Loans except as expressly provided in this Agreement;
(d) Change the voting percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans that is required for the Lenders,
or any of them, to take any action hereunder (e.g., the provisions of this
Section 11.1 or the definition of the term "Required Lenders");
(e) Amend this or any provision requiring consent of all Lenders for
action by the Lenders or Administrative Agent;
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(f) Discharge Borrower or any Guarantor, or release all or
substantially all of the collateral securing the Obligations, if any, except as
otherwise may be provided in the Loan Documents or except where only the consent
of the Required Lenders is expressly required by any Loan Document; or
(g) Amend any Loan Document to change the definition of or provisions
relating to an Event of Default by Borrower.
Notwithstanding the foregoing, no amendment, waiver or consent shall affect the
rights or duties of Administrative Agent under this Agreement or any other Loan
Document unless it is in writing and signed by Administrative Agent in addition
to the required number of Lenders. Administrative Agent shall not issue a set
aside letter or waive a condition of disbursement without the consent of the
Required Lenders.
11.2 Notices. All notices, requests and other communications given under
this Agreement shall be in writing and mailed, faxed or delivered to the address
or facsimile number specified for notices on the applicable signature page
hereof, or to such other address as shall be designated by such party in a
written notice to the other parties. All such notices and communications shall
be effectively served upon delivery; or if mailed, upon the first to occur of
receipt or the expiration of forty-eight (48) hours after deposit in certified
United States mail, postage prepaid; or sent by overnight courier, twenty-four
(24) hours after deposit, prepaid, with the courier; or if sent by facsimile
transmission, upon confirmation of receipt (to be followed by delivery of a hard
copy of such notice by first class United States mail). Any agreement of
Administrative Agent to receive certain notices from Borrower or the Lenders by
telephone or facsimile is solely for their convenience and at their request.
Administrative Agent shall be entitled to rely on the authority of any Person
purporting to be an authorized Person, and Administrative Agent shall not have
any liability to Borrower, any Lender or any other Person on account of any
action taken or not taken by Administrative Agent in reliance upon such
telephonic or facsimile notice, unless such liability arises from the gross
negligence or willful misconduct of Administrative Agent.
11.3 Attorneys' Fees. If any lawsuit, reference or arbitration is commenced
which arises out of, or which relates to this Agreement, the other Loan
Documents or the Obligations, including any alleged tort action, regardless of
which party commences the action, the prevailing party shall be entitled to
recover from each other party such sums as the court, referee or arbitrator may
adjudge to be reasonable attorneys' fees in the action or proceeding, in
addition to costs and expenses otherwise allowed by law. Any such attorneys'
fees incurred by either party in enforcing a judgment in its favor under this
Agreement shall be recoverable separately from and in addition to any other
amount included in such judgment, and such attorneys' fees obligation is
intended to be severable from the other provisions of this Agreement and to
survive and not be merged into any such judgment. In all other situations,
including any bankruptcy or other voluntary or involuntary proceeding, in or out
of court, for the adjustment of debtor-creditor relationships, Borrower agrees
to pay all of Administrative Agent's costs and expenses, including attorneys'
fees, which may be incurred in any effort to collect or enforce the
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Obligations, or any part of them, or any term of any Loan Document. Attorneys'
fees shall include the allocated costs for services of in-house counsel.
11.4 Indemnity. Borrower shall indemnify, defend and hold all Agent-Related
Persons, each Lender and each of their respective officers, directors,
employees, and agents (each, an "Indemnified Person") harmless from and against
any and all liabilities, obligations, losses, damages, actions, judgments,
costs, and expenses (including legal fees) which may be incurred by or asserted
against any such Person arising out of or relating to the Loans or the Loan
Documents or any document or transaction or action taken or not by any such
Person in connection with any of the foregoing, including any investigation,
arbitration, litigation, Insolvency Proceeding or other proceeding whether or
not any Indemnified Person is a party thereto (all the foregoing, collectively,
the "Indemnified Liabilities"); provided, that Borrower shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities that
result from the gross negligence or willful misconduct of such Indemnified
Person. The agreements in this Section 11.4 shall survive the termination of
this Agreement and the other Loan Documents and payment of all other
Obligations.
11.5 Assignments and Participations.
11.5.1 Assignments. Each Lender may at any time assign to one or more
Eligible Assignees (each an "Assignee") all or part of its Pro Rata Share of the
Loans and the other rights and obligations of such assignor Lender hereunder, in
a minimum amount of Five Million Dollars ($5,000,000) and in additional
increments of One Million Dollars ($1,000,000); provided, however, that no such
assignment shall be permitted if the effect thereof is to cause the remaining
Commitment of the assignor Lender to be less than Five Million Dollars
($5,000,000), provided further that, these restrictions on dollar amounts
notwithstanding, a Lender may, subject to the other requirements of this Section
and this Agreement, at any time, assign one hundred percent (100%) of its Pro
Rata Share of the Loans. However, such assignment shall be conditioned on, and
Borrower and Administrative Agent may continue to deal solely and directly with
such assignor Lender until, (i) written notice of such assignment, substantially
in the form of the attached Exhibit F shall have been given to Borrower and
Administrative Agent by such Lender and the Assignee; (ii) such Lender and its
Assignee shall have delivered to Administrative Agent and Borrower an Assignment
and Assumption Agreement substantially in the form of the attached Exhibit F
("Assignment and Assumption Agreement") (together with any Note(s) subject to
such assignment) and (iii) such Lender has paid or caused to be paid to
Administrative Agent a processing fee in the amount of Three Thousand Dollars
($3,000).
11.5.2 Effect of Assignment. From the date that Administrative Agent
notifies the assignor Lender that all conditions and requirements of the
assignment have been met, then to the extent that rights and obligations
hereunder have been assigned (i) the Assignee thereunder shall be a party hereto
and shall have the rights and obligations of a Lender under the Loan Documents,
as amended, (ii) the assignor Lender shall relinquish such assigned rights and
be released from such assigned obligations
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under the Loan Documents, (iii) this Agreement shall be deemed to be amended to
the extent necessary to reflect the addition of the Assignee and the resulting
adjustment of the Pro Rata Shares of the Loans arising therefrom, and (iv) the
Pro Rata Share allocated to an Assignee shall reduce the Pro Rata Share of the
assigning Lender.
11.5.3 Participations. A Lender (the "originating Lender") may sell to
one or more Persons that are not Affiliates of Borrower (each, a "Participant")
participating interests in the Loans, the Commitment and the other interests of
such originating Lender hereunder and under the other Loan Documents; provided,
however, that (i) the originating Lender's obligations under the Loan Documents,
as amended, shall remain unchanged, (ii) the originating Lender shall remain
solely responsible for the performance of such obligations, (iii) Borrower and
Administrative Agent shall continue to deal solely and directly with the
originating Lender in connection with the Loans and the Loan Documents, (iv) no
Lender shall transfer or grant any participating interest under which the
Participant has rights to approve any amendment, consent or waiver with respect
to any Loan Document, and (v) each participating interest shall be in a minimum
amount of Five Million Dollars ($5,000,000), and no such participation shall be
permitted if the non-participated interest of the originating Lender would
thereafter be less than Five Million Dollars ($5,000,000). A Participant shall
not have any rights under the Loan Documents, as amended, and all amounts
payable by Borrower hereunder shall be determined as if the originating Lender
had not sold such participation.
11.5.4 Pledge to Federal Reserve Bank. Notwithstanding any other
provision, a Lender may pledge its interest in the Loans in favor of any Federal
Reserve Bank in accordance with Federal law.
11.5.5 Notice of Final Assignment by Administrative Agent. If
Administrative Agent assigns or sells all of its remaining interest in the
Loans, Administrative Agent shall give each other Lender written notice of such
assignment or sale at the time of the closing of such assignment or sale.
11.5.6 Syndication by the Arranger; Dissemination of Information.
Subject to the provisions and limitations of this Section 11.5, the Arranger may
at any time syndicate the Loans or sell to one or more Persons participating
interests in the Loans and/or any interest of any Lender under any of the Loan
Documents, and may provide financial information about Borrower to actual or
potential participants or assignees, without notice to or the consent of
Borrower. These rights may include the following without limitation: subsequent
to the Closing Date, the Arranger may arrange a syndicate of financial
institutions (including Administrative Agent and the Lenders) which institutions
shall be acceptable to Borrower (such acceptance not to be unreasonably withheld
or delayed). Each Lender will be authorized to disseminate any information it
obtains pertaining to this Agreement or the Loans, including any credit or other
information relating to Borrower or any subsidiary or affiliate of Borrower, to
any assignee or participant or prospective assignee or prospective participant,
to any of Lenders' Affiliates, any regulatory body having jurisdiction over any
Lender and to any other Persons as may be necessary or appropriate in any
Lender's reasonable judgment.
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Borrower agrees to actively assist the Arranger in syndication of the Loans. To
assist the Arranger in its syndication efforts, Borrower shall, at the request
of the Arranger: (1) provide and cause its advisors to provide the Arranger and
any Lender that becomes a party to this Agreement as a successor in interest to
a Lender, upon request, with all information reasonably deemed necessary by the
Arranger to syndicate the Loans; (2) assist the Arranger upon its reasonable
request in the preparation of an offering memorandum to be used in connection
with the syndication of the Loans and; (3) otherwise assist the Arranger in its
syndication efforts, including making available from time to time officers and
advisors of Borrower and its affiliates and subsidiaries to attend and make
presentations regarding the business and prospects of Borrower and its
subsidiaries, as appropriate, at a meeting or meetings of prospective lenders.
11.6 Confidentiality. Notwithstanding any contrary provision of this
Agreement, each Lender agrees to exercise due care to maintain the
confidentiality of information provided by Borrower and identified by it as
"confidential" in connection with the Loans except (a) to the extent such
information was or becomes generally available to the public (other than by
disclosure by the Lender in violation of this provision), or becomes available
on a non-confidential basis from a source other than Borrower (if such source is
not bound by a confidentiality agreement with Borrower known to the Lender); and
(b) any Lender may disclose such information at the request of or pursuant to
any requirement of any Governmental Authority to which the Lender is subject; or
pursuant to subpoena or other court process or when otherwise required by law or
regulation; or to the extent reasonably required in connection with any
litigation, arbitration or other proceeding to which Administrative Agent, any
Lender or their respective Affiliates may be party; or to the extent reasonably
required in connection with the exercise of any remedy under any Loan Document;
or to such Lender's auditors, counsel and other professional advisors; or to any
Participant or Assignee, actual or potential, provided that such Person agrees
in writing to keep such information confidential to the same extent required of
the Lenders hereunder.
11.7 Heirs, Successors and Assigns. The terms of this Agreement shall bind
and benefit the heirs, legal representatives, successors and assigns of the
parties; provided, however, that Borrower may not assign this Agreement without
the prior written consent of Administrative Agent, given only with the consent
of all of the Lenders in each instance. Each Lender shall have the right to
transfer its Commitment and its outstanding Loans to any other Person on the
terms and subject to the conditions set forth in Section 11.5. Without the
consent of or notice to Borrower, Administrative Agent and Lenders may disclose
to any prospective purchaser of any securities issued by Administrative Agent or
Lenders, and to any prospective or actual purchaser of any interest in any Loan
or any other loans made by Lenders to Borrower (in the case of a prospective
purchase of an interest in the Loans or any other loan, upon Lender's receiving
its standard confidentiality letter from the prospective purchaser of the
interest in the Loan or any other loan), any financial or other information
relating to Borrower, the Loans or the Unencumbered Asset Pool Property.
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11.8 No Third Parties Benefited. This Agreement is made and entered into
for the sole protection and benefit of the parties signing this Agreement and
their successors and assigns. No trust is created by this Agreement and no other
persons or entities shall have any right of action under this Agreement or any
right to the Loan funds.
11.9 Payments Set Aside. To the extent that any payments or transfers of
any assets to Administrative Agent in respect of the credit facility extended by
this Agreement or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party in connection with any insolvency proceeding, or
otherwise, then: (i) any and all obligations owed to Administrative Agent and
any and all remedies available to Administrative Agent under the terms of the
Loan Documents or in law or equity against Borrower shall be automatically
revived and reinstated to the extent (and only to the extent) of any recovery
permitted under clause (ii) below; and (ii) Administrative Agent shall be
entitled to recover (and shall be entitled to file a proof of claim to obtain
such recovery in any applicable bankruptcy, insolvency, receivership or
fraudulent conveyance or fraudulent transfer proceeding) either: (x) the amount
of the payments or the value of the transfer or (y) if the transfer has been
undone and the assets returned in whole or in part, the value of the
consideration paid to or received by Borrower for the initial asset transfer,
plus in each case any deferred interest from the date of the disgorgement to the
date of distribution to Administrative Agent in any bankruptcy, insolvency,
receivership or fraudulent conveyance or fraudulent transfer proceeding, and any
costs and expenses due and owing, including, without limitation, any reasonable
attorneys' fees incurred by Administrative Agent in connection with the exercise
of its rights under this Section 11.9.
11.10 Interpretation. The language of this Agreement shall be construed as
a whole according to its fair meaning, and not strictly for or against any
party.
11.11 Miscellaneous. The invalidity or unenforceability of any one or more
provisions of this Agreement shall in no way affect any other provision. If
Borrower consists of more than one Person, each shall be jointly and severally
liable for the faithful performance of this Agreement and the other Loan
Documents. Time is of the essence in the performance of this Agreement and the
other Loan Documents.
11.12 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California, without regard to any
conflicts of law principles.
11.13 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall, for all purposes, be deemed an original and
all of which counterparts, taken together, shall constitute one and the same
instrument.
11.14 Integration and Relation to Loan Commitment. The Loan Documents fully
state all of the terms and conditions of the parties' agreement regarding the
matters mentioned in or incidental to this Agreement. The Loan Documents
supersede all oral negotiations and prior writings concerning the subject matter
of the Loan Documents, including any loan commitment issued to Borrower.
-65-
11.15 Actions. Administrative Agent shall have the right, but not the
obligation, to commence, appear in, and defend any action or proceeding which
might affect its rights, duties or liabilities relating to the Loan, the
Unencumbered Asset Pool Property, or any of the Loan Documents. Borrower shall
pay promptly on demand all of Administrative Agent's reasonable out-of-pocket
costs, expenses, and legal fees and expenses of Administrative Agent's counsel
incurred in those actions or proceedings.
11.16 Relationships with Other Customers. From time to time, Administrative
Agent or any Lender may have business relationships with Borrower's customers,
suppliers, contractors, tenants, partners, shareholders, officers or directors,
with businesses offering products or services similar to those of Borrower, or
with persons seeking to invest in, borrow from or lend to Borrower. Borrower
agrees that in no event shall Administrative Agent or any Lender be obligated to
disclose to Borrower any information concerning any other customer thereof.
Borrower further agrees that any Lender may extend credit to those parties and
may take any action it may deem necessary to collect any such credit, regardless
of any effect the extension or collection of such credit may have on Borrower's
financial condition or operations.
11.17 Amendment and Restatement; Termination of Co-Lender Agreement. This
Agreement amends and restates the Existing Agreement in full. Upon the Closing
Date, the Co-Lender Agreement will terminate in its entirety.
IN WITNESS WHEREOF, Borrower and the other parties hereto have
executed this Agreement as of the date first above written.
ESSEX PORTFOLIO, L.P.,
a California limited partnership
By: ESSEX PROPERTY TRUST, INC.,
a Maryland corporation, its General Partner
By:___________________________________________________
Name:_________________________________________________
Title:________________________________________________
925 East Meadow Drive
Palo Alto, CA 94303
Attn: Toby Lieberman (facsimile: (650) 565-9855)
Michael J. Schall (facsimile: (650) 858-0139)
Jordan E. Ritter (facsimile: (650) 858-1372)
-66-
BANK OF AMERICA, N.A.,
as Administrative Agent and as a Lender
By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
600 Montgomery Street, 22/nd/ Floor
San Francisco, CA 94111
Attn.: Frank Stumpf (facsimile: (415) 913-3445)
UNION BANK OF CALIFORNIA, N.A.,
as a Lender
By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
200 Pringle Avenue, Suite 200
Walnut Creek, CA 94596
Attn.: Geoffrey Horn (facsimile: (925) 947-2416)
BANK ONE, N.A.,
as a Lender
By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
1 Bank One Plaza, 14th Floor
Mail Code: IL1-0315
Chicago, IL 60670-0315
Attn.: Dell McCoy (facsimile: (312) 732-5939)
-67-
COMERICA BANK,
as a Lender
By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
Comerica Tower, MC 3256
500 Woodward Avenue, 7th Floor
Detroit, MI 48226
Attn.: Casey Ostrander (facsimile: (313) 222-9295)
KEYBANK NATIONAL ASSOCIATION,
as Lender
By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
1675 Broadway, Suite 400
Denver, CO 80202
Attn.: Scott Childs (facsimile: (720) 904-4410)
PNC BANK, NATIONAL ASSOCIATION,
as Lender
By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
One PNC Plaza, Mail Stop P1-POPP-l9-2
Pittsburg, PA 15222
Attn.: Lou Stempkowski (facsimile: (412) 762-6500)
-68-
DRESDNER BANK AG, New York and Grand Cayman
Branches, as a Lender
By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
355 South Grand Avenue, Suite 3200
Los Angeles, CA 90071
Attn.: Gabe Potyondy (facsimile: (213) 473-1958)
CHEVY CHASE BANK, F.S.B.,
as a Lender
By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
7501 Wisconsin Avenue, 12/th/ Floor
Bethesda, MD 20814
Attn.: J. Jordan O'Neill (facsimile: (240) 497-7714)
-69-
CONSENT OF GUARANTOR
Essex Property Trust, Inc., a Maryland corporation, consents to the
foregoing Second Amended and Restated Revolving Credit Agreement, and agrees to
be bound by the covenants of Article 6 that apply to Guarantor and reaffirms its
obligations under the Payment Guaranty dated the date of this Agreement.
Dated as of May 15, 2002 ESSEX PROPERTY TRUST, INC.,
a Maryland corporation, as Guarantor
By:__________________________________________
Name:________________________________________
Title:_______________________________________
925 East Meadow Drive
Palo Alto, CA 94303
Attn.: Michael Schall and Jordan E. Ritter
-70-
EXHIBIT A
UNENCUMBERED ASSET POOL
AS OF 3/25/02
- --------------------------------------------------------------------------------------
# of Current AVAILABLE
Property Name Units Location Value Amount
- --------------------------------------------------------------------------------------
Bristol Commons 188 Sunnyvale, CA 27,831,920 13,915,960
Laurels at Mill Creek 164 Mill Creek, WA 10,065,851 5,032,926
Marina Cove 292 Santa Clara, CA 41,816,354 20,908,177
Plumtree 140 Santa Clara, CA 18,538,766 9,269,383
Foothill/Twin Creeks 176 San Ramon, CA 26,882,171 13,441,086
Kings Road 194 Los Angeles, CA 19,837,337 9,918,669
Park Place/Windsor Court/Cochran 176 Los Angeles, CA 20,256,080 10,128,040
Monterra del Mar (Windsor Terrace) 123 Pasadena, CA 15,101,520 7,550,760
The Village 122 Oxnard, CA 16,457,714 8,228,857
Villa Scandia 118 Ventura, CA 8,232,914 4,116,457
Trabuco Villas 132 Lake Forest, CA 16,047,451 8,023,726
Meadows at Cascade Park 198 Vancouver, WA 11,085,451 5,542,726
Village at Cascade Park 192 Vancouver, WA 10,487,840 5,243,920
Castle Creek 216 Newcastle, WA 21,521,737 10,760,869
Avondale at Warner Center 446 Woodland Hills, CA 40,653,223 20,326,612
Linden Square 183 Seattle, WA 15,864,937 7,932,469
Mirrabella (Marina View) 188 Marina del Rey, CA 37,521,966 18,760,983
Salmon Run 132 Bothell, WA 11,855,131 5,927,566
TOTAL: 370,058,363 185,029,182
======================================================================================
A-1
EXHIBIT B
FORM OF BORROWING NOTICE AND CERTIFICATE
Date: __________, ______,
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Second Amended and Restated Revolving Credit
Agreement dated as of May 15, 2002, among Essex Portfolio L.P., a California
limited partnership ("Borrower"), the Lenders party thereto, and Bank of
America, N.A., as Administrative Agent (in such capacity, "Administrative
Agent") and Letter of Credit issuer (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the
"Agreement"; the terms defined therein being used herein as therein defined).
The undersigned hereby requests (select one):
[_] A Borrowing of Loans [_] A Conversion or Continuation of Loans [_] Issuance
of a Letter of Credit (Application for Letter of Credit enclosed)
Borrower's New Availability under the Agreement $____________.
1. On ______________________________.
2. In the amount of $___________________.
3. Comprised of : [_] Swing [_] Reference Rate [_] LIBOR [_] Letter of Credit
[type of credit requested]
4. If applicable: with an Interest Period of ________ months.
The foregoing request complies with the requirements of [Section 2.4 (for a
borrowing of Loans)] [Section 2.5 (for a conversion/continuation of Loans)] of
the Agreement. The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the above date, before and
after giving effect to the application of the proceeds therefrom:
B-1
(a) The aggregate outstanding principal amount of the Loans shall not,
after giving effect to the requested Borrowing, Swing Loan or Letter of Credit,
exceed the Availability, as defined in the Agreement.
(b) All of the representations and warranties contained in the
Agreement and the other Loan Documents are true and correct as of the date
hereof and shall be true and correct on the date of the Borrowing, the making of
the Swing Loan or the issuance of the requested Letter of Credit, both before
and after giving effect to such Borrowing, Swing Loan or issuance of the
requested Letter of Credit; provided, however, that the representations and
warranties set forth in the Agreement regarding financial statements shall be
deemed to be made with respect to the financial statements most recently
delivered to Administrative Agent pursuant to the Agreement.
(c) No Default or Event of Default has occurred and is continuing on
the date hereof or after giving effect to the requested extension of credit.
(d) The proceeds of the Borrowing or the Swing Loan, or the purpose of
the Letter of Credit, are only as permitted by the Agreement;
(e) No act, omission, change or event which would have a material
adverse effect on the Borrower has occurred since the date of the Agreement.
(f) Enclosed are the documents and information requested by Lender as
a condition to the requested Borrowing, the Swing Loan or the issuance of the
Letter of Credit.
Dated as of _____________, 200__ ESSEX PORTFOLIO, L.P.,
a California limited partnership
By: Essex Property Trust, Inc.,
a Maryland corporation,
its General Partner
By:___________________________________
Name:_________________________________
Title:________________________________
B-2
EXHIBIT C
FORM OF LETTER OF CREDIT AGREEMENT
[See Attached]
C-1
EXHIBIT D-1
SUPPLEMENTAL SIGNATURE PAGE
(EXISTING CO-LENDER)
Re: Second Amended and Restated Revolving Credit Agreement
(the "Credit Agreement"), dated as of May 15, 2002, among
Essex Portfolio, L.P., the several financial institutions
from time to time party thereto (each a "Lender" and
collectively, the "Lenders"), and Bank of America, N.A.,
individually as a Lender and as administrative agent for
the Lenders (in such capacity, the "Administrative
Agent"). Capitalized terms used below and not otherwise
defined shall have the meanings given such terms in the
Credit Agreement.
Pursuant to Section 2.12 of the Credit Agreement, the
undersigned agrees to increase its Commitment to $______________ (and
accordingly increase the Maximum Commitment Amount to $______________), which
represents a revised Pro Rata Share of _______________% of the combined
Commitments of all the Lenders, effective as of __________________, 20___ (the
"Effective Date"). The undersigned further agrees to continue to be bound by all
of the terms and conditions of the Credit Agreement.
__________________________________
By _______________________________
_______________________________
[Printed Name and Title]
D-1-1
ACKNOWLEDGED AND APPROVED:
We hereby consent to and approve the foregoing supplement to the Credit
Agreement, and acknowledge and agree that as of the Effective Date the Maximum
Commitment Amount is increased to $______________, and the Commitment of
_______________________________________, is increased to $______________. We
further agree that the foregoing supplement to the Credit Agreement, and the
amendments effected thereby, shall not alter, diminish or otherwise affect any
obligations under the Credit Agreement or any other Loan Document except as
expressly set forth above. This acknowledgment and approval may be executed in
any number of counterparts, each of which shall constitute an original and all
of which, taken together, shall constitute a single agreement.
Date: __________________, 20___
"Borrower"
ESSEX PORTFOLIO, L.P.,
a California limited partnership
By: ESSEX PROPERTY TRUST, INC.,
a Maryland corporation
By ____________________________
____________________________
[Printed Name and Title]
"Administrative Agent"
BANK OF AMERICA, N.A.,
as Administrative Agent
By _________________________________
_________________________________
[Printed Name and Title]
D-1-2
EXHIBIT D-2
SUPPLEMENTAL SIGNATURE PAGE
(NEW CO-LENDER)
Re: Second Amended and Restated Revolving Credit Agreement
(the "Credit Agreement"), dated as of May 15, 2002, among
Essex Portfolio, L.P., the several financial institutions
from time to time party thereto (each a "Lender" and
collectively, the "Lenders"), and Bank of America, N.A.,
individually as a Lender and as administrative agent for
the Lenders (in such capacity, the "Administrative
Agent"). Capitalized terms used below and not otherwise
defined shall have the meanings given such terms in the
Credit Agreement.
Pursuant to Section 2.12 of the Credit Agreement, the
undersigned agrees to become a Lender under the Credit Agreement as if
originally named therein, with a Commitment of $______________ (increasing the
Maximum Commitment Amount to $______________), which represents a Pro Rata Share
of _______________% of the combined Commitments of all the Lenders, effective as
of __________________, 20__ (the "Effective Date"). The undersigned further
agrees to be bound by all of the terms and conditions of the Credit Agreement.
_________________________________
By _____________________________
_____________________________
[Printed Name and Title]
D-2-1
Offshore and Domestic Lending Offices,
Addresses for Notices:
_____________________________________,
as a Lender
_________________________________
_________________________________
_________________________________
_________________________________
Attention: ____________________
Telephone: ____________________
Telecopier: ____________________
Payment Information:
ABA No.: ________________
Account Number: ________________
At: _________________________________
Reference: ___________________________
Admin. Contact: ___________________________
Telephone: ___________________________
Telecopier: ___________________________
D-2-2
ACKNOWLEDGED AND APPROVED:
We hereby consent to and approve the foregoing supplement to the Credit
Agreement, and acknowledge and agree that as of the Effective Date the Maximum
Commitment Amount is increased to $______________, and ____________________ has
become a Lender under the Credit Agreement as if originally named therein, with
a Commitment of _______________________. We further agree that the foregoing
supplement to the Credit Agreement, and the amendments effected thereby, shall
not alter, diminish or otherwise affect any obligations under the Credit
Agreement or any other Loan Document except as expressly set forth above. This
acknowledgment and approval may be executed in any number of counterparts, each
of which shall constitute an original and all of which, taken together, shall
constitute a single agreement.
Date: __________________, 20__
"Borrower"
ESSEX PORTFOLIO, L.P.,
a California limited partnership
By: Essex Property Trust, Inc.,
a Maryland corporation
By ____________________________
____________________________
[Printed Name and Title]
"Administrative Agent"
BANK OF AMERICA, N.A.,
as Administrative Agent
By __________________________________
__________________________________
[Printed Name and Title]
D-2-3
Exhibit E
COMPLIANCE CERTIFICATE
____________, 20__
Mr. Frank H. Stumpf
Bank of America, N.A.
600 Montgomery Street, 37/th/ Floor
San Francisco, CA 94111
Re: Second Amended and Restated Revolving Credit Agreement dated as
of May 15, 2002 (the "Agreement") among Essex Portfolio L.P., a
California limited partnership ("Borrower"), the several
financial institutions from time to time party thereto (each a
"Lender" and collectively, the "Lenders"), and Bank of America,
N.A., individually as a Lender and as administrative agent for
the Lenders (in such capacity, the "Administrative Agent")
Dear Frank:
To the best of my knowledge, no Event of Default has occurred and is continuing
or would result after notice or passage of time and the Borrower is in
compliance with all of the financial covenants of the Agreement under the
applicable sections as of ______________, as follows:
(1) Minimum Tangible Net Worth (Section 6.12) Required: $___MM
Actual: $
Margin: $
Minimum $____ MM
Plus 80% of post 5/15/02 offerings $
------------
Total $
(2) Total Liabilities to Gross Asset Not to Exceed: 0.50:1.00
Value (Section 6.9)
Actual:
Margin: $
Total Liabilities (Schedule 1) $
E-1
Gross Asset Value:
Net income before minority interest, gain on sale of real
estate and extraordinary items (10K, 10Q or supplemental $
Plus: Interest $
Depreciation $
Amortization $
Joint Venture EBITDA Adjustment (Schedule 7) $
----------------------
EBITDA $
Less: NOI from assets held for *3 months (Schedule 3) $
Minority interest for the quarter (Schedule 4) $
Properties sold in the quarter (Schedule 5) $
----------------------
Quarterly EBITDA $
Annualized $
Capitalization Rate 8.75%
Preliminary GAV $
Plus: Cash and Marketable Securities (Financial $
Statement/ Unrestricted/ 90 days liquid)
100% acquisitions during the quarter (Schedule 3) $
100% of book value of development in progress $
(Schedule 6)
----------------------
Gross Asset Value $
(3) Fixed Charge Coverage (Section 6.11) Not less than: 1.60:1.00
Actual:
Margin: $
Quarterly EBITDA (10K, 10Q or supplemental) $
Includes: Joint Venture EBITDA Adjustment
(Schedule 7)
Fixed Charges:
Interest $
Capitalized interest $
Perpetual preferred stock dividend $
Convertible preferred stock dividend $
Scheduled principal amortization $
Capital Expense Reserve ($250/unit/yr) $
* denotes less than
E-2
Joint Venture Fixed Charge Addback $
(Schedule 7)
----------------------
Total Fixed Charges $
(4) Unsecured Debt to Unencumbered Asset Pool Not to exceed: 0.50: 1.00
Value (Section 6.10)
(see Schedule 1 for detail calculation) Actual:
Margin: $
Unsecured Debt (Schedule 1) $
Unencumbered Asset Pool Value (Schedule 2) $
Mortgageability Value (Schedule 2) $
(5) Distributions year to date (Section 6.13) Not to exceed: 95% of FFO
Actual:
Actual FFO (trailing 4 Qtrs - specify dates
1/st/ Quarter 20___ $
2/nd/ Quarter 20___ $
3/rd/ Quarter 20___ $
4/th/ Quarter 20___ $
----------------------
$
Actual distributions (trailing 4 Qtrs. - specify dates)
1/st/ Quarter 20___ $
2/nd/ Quarter 20___ $
3/rd/ Quarter 20___ $
4/th/ Quarter 20___ $
----------------------
$
(6) Development - Schedule 6 (percentage of
Gross Asset Value) (Section 6.6)
a: Total Development Not to exceed: 25.0%
Actual:
Margin:
Total Under Development = $
b: Single Asset Not to exceed: 5.0%
Actual:
Margin:
Single Assets Under Development = $
E-3
c: Total Land (includes unentitled land) Not to exceed: 7.5%
Actual:
Margin:
Land Under Development = $
d: Total Unentitled Land Not to exceed: 3.0%
Actual:
Margin:
Unentitled Land Under Development = $
e: Joint Venture Development Not to exceed: 20.0%
Actual:
Margin:
Joint Venture Development = $
f: Down-REITs Not to exceed 15.0%
Actual
Margin
Down-REITs = $
Each of the foregoing ratios and financial requirements were calculated as of
the last day of each fiscal quarter, but were satisfied at all times during the
period covered and are further detailed on the attached spreadsheet Schedules 1
through 6.
Sincerely,
[or] Michael Schall, [Title]
[or] Mark Mikl, [Title]
[or] Keith Guericke, [Title]
[or] Jordan Ritter, [Title]
E-4
EXHIBIT F
FORM OF ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (the "Assignment and Assumption")
is dated as of the Effective Date set forth below and is entered into by and
between [Insert name of Assignor] (the "Assignor") and [Insert name of Assignee]
(the "Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
"Credit Agreement"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably
sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases
and assumes from the Assignor, subject to and in accordance with the Standard
Terms and Conditions and the Credit Agreement, as of the Effective Date inserted
by the Administrative Agent as contemplated below (i) all of the Assignor's
rights and obligations in its capacity as a Lender under the Credit Agreement
and any other documents or instruments delivered pursuant thereto to the extent
related to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor under the respective
facilities identified below (including without limitation any letters of credit,
guarantees, and swing line loans included in such facilities) and (ii) to the
extent permitted to be assigned under applicable law, all claims, suits, causes
of action and any other right of the Assignor (in its capacity as a Lender)
against any Person, whether known or unknown, arising under or in connection
with the Credit Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or
related to any of the foregoing, including, but not limited to, contract claims,
tort claims, malpractice claims, statutory claims and all other claims at law or
in equity related to the rights and obligations sold and assigned pursuant to
clause (i) above (the rights and obligations sold and assigned pursuant to
clauses (i) and (ii) above being referred to herein collectively as, the
"Assigned Interest"). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by the Assignor.
1. Assignor: _____________________________
2. Assignee: ______________________________
[and is an Affiliate/Approved Fund of [identify Lender] ]
3. Borrower(s): ______________________________
F-1
4. Administrative Agent: ______________________, as the
administrative agent under the Credit Agreement
5. Credit Agreement:[The [amount] Credit Agreement dated as of
_______ among [name of Borrower(s)], the Lenders parties thereto, [name of
Administrative Agent], as Administrative Agent, and the other agents parties
thereto]
6. Assigned Interest: ------------------------
- -----------------------------------------------------------------------------------------------
Facility Assigned Aggregate Amount of Amount of Commitment/ Percentage Assigned of
Commitment/Loans for all Loans Assigned Commitment/Loans
Lenders
- -----------------------------------------------------------------------------------------------
$ $ ------------%
- -----------------------------------------------------------------------------------------------
$ $ ------------%
- -----------------------------------------------------------------------------------------------
$ $ ------------%
- -----------------------------------------------------------------------------------------------
[7. Trade Date: ______________]
Effective Date: _____________ ___, 20___ [TO BE INSERTED BY
ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF
TRANSFER IN THE REGISTER THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby
agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By _________________________
Title: _______________________
ASSIGNEE
[NAME OF ASSIGNEE]
By __________________________
Title: ______________________
F-2
Consented to and Accepted:
BANK OF AMERICA, N.A.,
as Administrative Agent
By ____________________________
Title: __________________________
Consented to:
ESSEX PORTFOLIO, L.P.,
a California limited partnership
By: ESSEX PROPERTY TRUST, INC.,
a Maryland corporation
its General Partner
By _________________________
Title: _______________________
F-3
ANNEX 1
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor. The Assignor (a) represents and warrants
that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the
Assigned Interest is free and clear of any lien, encumbrance or other adverse
claim, and (iii) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Loan Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of Borrower, any of its subsidiaries or affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or observance
by the Borrower, any of its subsidiaries or affiliates or any other Person of
any of their respective obligations under any Loan Document.
1.2. Assignee. The Assignee (a) represents and warrants
that (i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) it meets all requirements of an Eligible Assignee under the
Credit Agreement (subject to receipt of such consents as may be required under
the Credit Agreement), (iii) from and after the Effective Date, it shall be
bound by the provisions of the Credit Agreement as a Lender thereunder and, to
the extent of the Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Credit Agreement, together with
copies of the most recent financial statements delivered pursuant to Section 6.3
thereof, as applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without
reliance on the Administrative Agent or any other Lender, and (v) if it is a
foreign Lender, attached to the Assignment and Assumption is any documentation
required to be delivered by it pursuant to the terms of the Credit Agreement,
duly completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.
F-1
2. Payments. From and after the Effective Date, the
Administrative Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) to the
Assignor for amounts which have accrued to, but excluding, the Effective Date
and to the Assignee for amounts which have accrued from and after the Effective
Date.
3. General Provisions. This Assignment and Assumption shall
be binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption. This Assignment
and Assumption shall be governed by, and construed in accordance with, the laws
of the State of California, without regard to any conflicts of law principles.
F-2