EXHIBIT 10.35
AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT (the "Agreement") is made and
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entered into as of the 31st day of December, 1997 by and between Sanwa Bank
California, a California banking corporation (the "Bank"), and BRE Properties,
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Inc. a Maryland corporation (the "Borrower").
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RECITALS
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A. Pursuant to that certain Line of Credit Agreement dated as of
June 21, 1991 between the Bank and the predecessor in interest of the Borrower
(as amended, the "Line of Credit Agreement"), Bank agreed to extend a revolving
line of credit to the Borrower secured by a Collateral Pool (as therein
defined).
B. Thereafter, Bank agreed to extend an unsecured line of credit to
the Borrower pursuant to the terms of a Credit Agreement dated as of April 9,
1996 (as amended, the "Prior Agreement") which superseded the Line of Credit
Agreement.
C. To modify terms applicable to interest payable on credit extended
under the Prior Agreement, to revise certain financial covenants, to require the
delivery of guaranties in favor of Bank, and to make certain other revisions in
the agreements between the Borrower and Bank, the parties have agreed to amend
and restate the terms of the Prior Agreement in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree that the Prior Agreement is
amended and restated to read as follows and all Loans and Letters of Credit
outstanding under the Prior Agreement shall remain outstanding under this
Agreement on the following terms and conditions:
1. DEFINITIONS
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1.1 Definitions. The following terms, as used in this Agreement, shall
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have the following meanings:
"Affiliate" shall mean any corporation, association, partnership, joint
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venture or other business entity of which more than 20% of the voting stock or
other equity interests (in the case of entities other than corporations) is
owned or controlled directly or indirectly by the Borrower, or one or more of
the Subsidiaries of the Borrower, or a combination thereof.
"Aggregate Distributions to Shareholders" shall mean (a) any Dividend
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Payments in respect of the Borrower or any Subsidiary of the Borrower (other
than on account of capital stock or other equity interests of a Subsidiary of
the Borrower), including, without limitation, any Dividend Payments resulting
in the acquisition by the Borrower of securities which would constitute
treasury stock, and (b) any payment, repayment, redemption, retirement,
repurchase or other acquisition, direct or indirect, by the Borrower or any
Subsidiary of, on account of, or in respect of, the principal of any
Subordinated Debt (or any installment thereof) prior to the regularly
scheduled maturity date
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thereof (as in effect on the date such subordinated debt was originally
incurred). For purposes of this Agreement, the amount of any Aggregate
Distributions to Shareholders made in property shall be the greater of (x) the
fair market value of such property (as determined in good faith by the board
of directors (or equivalent governing body) of the Person making such
distribution) and (y) the net book value thereof on the books of such Person,
in each case determined as of the date on which such distribution is made.
"Applicable LIBOR Rate" shall mean, with respect to any Interest Period for
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a LIBOR Loan, the rate per annum (rounded upward, if necessary, to the next
higher 1/100 of one percent (0.01%)) equal to the LIBOR Rate for such Interest
Period plus the LIBOR Rate Spread.
"Business Day" shall mean a day other than a Saturday or Sunday on which
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the Bank is open for business in Los Angeles, California.
"Capital Lease" shall mean a lease with respect to which the lessee is
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required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Continuing Guaranty" shall mean a continuing guaranty substantially in the
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form of Exhibit A hereto.
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"Credit Limit" shall mean $35,000,000, as such amount shall be modified
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from time to time pursuant to this Agreement.
"Debt" shall mean, with respect to the Borrower on a consolidated basis,
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without duplication (a) its liabilities for borrowed money; (b) its
liabilities for the deferred purchase price of property acquired (excluding
accounts payable arising in the ordinary course of business but including,
without limitation, all liabilities created or arising under any conditional
sale or other title retention agreement with respect to any such property);
(c) its obligations to make payments under Capital Leases; (d) all liabilities
for borrowed money secured by any Lien with respect to any property owned by
the Borrower or any of its Subsidiaries (whether or not it has assumed or
otherwise become liable for such liabilities); and (e) liability on any
Guaranty of such Person with respect to liabilities of a type described in any
of clauses (a) through (d) hereof. Debt shall include all obligations of the
character described in clauses (a) through (e) to the extent that the Borrower
or any of its Subsidiaries remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished under
GAAP.
"Debt Service" shall mean, with respect to any period, the sum of the
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following (a) Interest Charges for such period and (b) all payments of
principal in respect of Debt of the Borrower and its Subsidiaries (including
the principal component of any payments in respect of capital lease
obligations) paid or payable during such period after eliminating all
offsetting debits and credits between the Borrower and its Subsidiaries and
all other items required to be eliminated in the course of the preparation of
consolidated financial statements of the Borrower and its Subsidiaries in
accordance with GAAP.
"Default Interest Rate" shall mean a rate per annum equivalent to the
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Reference Rate plus 3%, adjusted concurrently with any change in the Reference
Rate and calculated on the basis of 360 days per year but charged on the
actual number of days elapsed.
"Development Units" shall mean housing units Under Construction by the
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Borrower, any of its Subsidiaries or any Person in which the Borrower is a
general partner, joint venturer or otherwise fully liable for the Indebtedness
of such Person.
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"Dividend Payments" shall mean (a) dividends or other distributions or
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payments on capital stock or other equity interest thereof (except
distributions in such stock or other equity interest); and (b) the redemption
or acquisition of such stock or other equity interests or of warrants, rights
or other options to purchase such stock or other equity interests (except when
solely in exchange for such stock or other equity interests) unless made,
contemporaneously, from the net proceeds of a sale of such stock or other
equity interests.
"Drawing" shall mean the presentation of a draft(s) together with any
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accompanying documents by a beneficiary under a Letter of Credit seeking
payment under such Letter of Credit.
"EBITDA" shall mean the sum of (a) net income of the Borrower and its
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Subsidiaries, on a consolidated basis, for the relevant period, plus (b)
interest expense deducted in determining such net income plus (c) tax
provision deducted in determining such net income plus (d) depreciation and
amortization deducted in determining such net income.
"Environmental Claims" shall mean all claims, however asserted, by any
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Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release of
Hazardous Materials or injury to the environment as a result thereof.
"Environmental Laws" shall have the meaning set forth in Section 5.9 below.
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
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it may from time to time be amended, supplemented or otherwise modified or
replaced.
"Event of Default" shall have the meaning set forth in Section 8 below.
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"Expiration Date" shall mean April 30, 2000, as such date may be extended
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in the sole discretion of the Bank.
"FFO" shall mean "funds from operations" as such terms are defined by
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NAREIT from time to time.
"Governmental Authority" shall mean any nation or government, any state or
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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 corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"GAAP" shall mean generally accepted accounting principles set forth from
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time to time in the opinions and pronouncements of 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 accounting profession), or in such
other statements by such other entity as may be in general use by significant
segments of the U.S. accounting profession, which are applicable to the
circumstances as of the date of determination.
"Gross Offering Proceeds" shall mean all cash proceeds received by the
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Borrower and its Subsidiaries as a result of the sale of common, preferred or
other classes of stock in the Borrower or any of its Subsidiaries (if and only
to the extent reflected in stockholders' equity on the consolidated balance
sheet of the Borrower prepared in accordance with GAAP), without deduction for
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any costs and discounts of issuance paid by the Borrower and its Subsidiaries.
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"Guarantor" shall mean BRE Property Investors LLC and each other Material
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Subsidiary of the Borrower which, from time to time, executes and delivers a
Continuing Guaranty pursuant to the terms of this Agreement.
"Guaranty" shall mean, with respect to any Person, any obligation (except
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the endorsement in the ordinary course of business of negotiable instruments
for deposit or collection) of such Person guaranteeing or in effect
guaranteeing any Indebtedness, dividend or other obligation of any other
Person in any manner, whether directly or indirectly.
"Hazardous Material" shall mean any flammable materials (excluding wood
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products normally used in construction), explosives, radioactive materials,
hazardous wastes, toxic substances or related materials, including, without
limitation, any substances defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials," or "toxic
substances" under any applicable federal, state, county, regional or local
laws, ordinances, regulations or guidelines.
"Indebtedness" shall mean, with respect to the Borrower and its
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Subsidiaries, all items of indebtedness which, in accordance with GAAP, would
be included in determining liabilities as shown on the liability side of a
statement of condition thereof as of the date as of which indebtedness is to
be determined, including, without limitation, all Debt of the Borrower and its
Subsidiaries.
"Intangible Assets" shall mean all assets that would be classified as
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intangible assets under GAAP, including, without limitation, goodwill,
patents, trademarks, trade names, copyrights and franchises, treasury stock
held by the Borrower and it Subsidiaries, and deferred charges (including but
not limited to unamortized debt discount and expense, organization expenses,
experimental and development expenses, but excluding prepaid expenses).
"Interest Charges" shall mean, with respect to any period, the sum (without
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duplication) of the following (in each case, eliminating all offsetting debits
and credits between the Borrower and its Subsidiaries, all other items
required to be eliminated in the course of the preparation of consolidated
financial statements of the Borrower and its Subsidiaries in accordance with
GAAP) (a) all interest in respect of Debt of the Borrower and its
Subsidiaries deducted in determining Net Income for such period and (b) all
debt discount and expense with respect to Debt amortized or required to be
amortized in the determination of Net Income for such period.
"Interest Period" shall mean with respect to any LIBOR Loan, the period
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commencing on the date advanced and ending one, two, three, six or twelve
months thereafter, as designated in the relevant Loan Request; provided,
however, that (1) any Interest Period which would otherwise end on a day which
is not a LIBOR Business Day shall be extended to the next succeeding LIBOR
Business Day unless by such extension it would fall in another calendar month,
in which case such Interest Period shall end on the immediately preceding
LIBOR Business Day, (2) any Interest Period applicable to a LIBOR Loan which
begins on a day for which there is no numerically corresponding day in the
calendar month during which such Interest Period is to end shall, subject to
the provisions of clause (1) hereof, end on the last day of such calendar
month, and (3) no such Interest Period shall extend beyond the relevant
Expiration Date.
"L/C Sublimit" shall mean $2,000,000, as such amount shall be reduced from
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time to time pursuant to the terms of this Agreement.
"L/C Documents" shall have the meaning given such term in Section 3.2
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below.
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"Letter of Credit" shall mean a letter of credit issued by Bank for the
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account of the Borrower pursuant to the terms of this Agreement.
"Letter of Credit Obligations" shall mean, at any time, the aggregate
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obligations of the Borrower then outstanding, or which may thereafter arise in
respect of Letters of Credit then issued by the Bank, to reimburse the amount
paid by Bank with respect to a past, present or future Drawing under Letters
of Credit.
"Letter of Credit Request" shall mean a request for a Letter of Credit in
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form satisfactory to the Bank.
"LIBOR Business Day" shall mean a Business Day upon which commercial banks
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in London, England, New York, New York and Los Angeles, California are open
for domestic and international business.
"LIBOR Loans" shall mean Loans hereunder at such time as they are made
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and/or being maintained at a rate of interest based upon the LIBOR.
"LIBOR Rate" shall mean with respect to any Interest Period for a LIBOR
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Loan, the rate per annum (rounded upward, if necessary to the next higher
1/100 of one percent (0.01%); calculated in accordance with the following
formula:
LIBOR = IR
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1 - IRP
where
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IR = with respect to any Interest Period for a LIBOR Loan, the rate
per annum quoted to the Bank by major banks in the interbank eurocurrency
market at approximately 11:00 a.m. London time two LIBOR Business Days prior
to the first day of the proposed Interest Period for LIBOR Loans for deposits
in immediately available U.S. Dollars in an amount equal to the aggregate
amount of LIBOR Loans proposed to be subject to such rate during such Interest
Period.
IRP = for any day, that percentage, expressed as a decimal, which is
in effect on such day, as specified by the Board of Governors of the Federal
Reserve System for determining the maximum aggregate reserve requirement which
is imposed on eurocurrency liabilities.
"LIBOR Rate Spread" shall mean, as of any date of determination, (i) :if no
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Rating is then in effect, 1.35%; or (ii) effective on the first day of the
fiscal quarter following the Borrower's obtaining a Rating (or a change in the
then-effective Rating) and giving written notice thereof to the Bank, the LIBOR
Rate Spread set forth below opposite the then Rating (as hereinbelow determined)
of the Borrower:
"Category LIBOR
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Rate Spread
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A- or higher by S&P 0.55%
A3 or higher by Moody's
A- or higher by D&P
BBB+ by S&P 0.60%
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Baa1 by Moody's
BBB+ by D&P
BBB by S&P 0.70%
Baa2 by Moody's
BBB by D&P
BBB- by S&P 1.00%
Baa3 by Moody's
BBB- by D&P
Lower than BBB- by S&P 1.35%
Lower than Baa3 by Moody's
Lower than BBB- by D&P
Each change in the LIBOR Rate Spread shall apply to all LIBOR Rate
Loans that are outstanding at any time during the period commencing on
the effective date. If the rating system of any Rating Agency shall
change, or if any such Rating Agency shall cease rating the corporate
debt obligations of the Borrower (other than by reason of any action
or nonaction by the Borrower following or in anticipation of a ratings
downgrade), the parties hereto shall negotiate in good faith to amend
the references to specific ratings in this definition (including by
way of substituting another Rating Agency mutually acceptable to the
Borrower for the Rating Agency with respect to which the rating system
has changed or for which no Rating is then in effect) to reflect such
changed rating system or the nonavailability of Ratings from such
Rating Agency, and pending agreement on such amendment, the Rating in
effect immediately prior to such change or cessation will be used in
determining the LIBOR Rate Spread.
If the Borrower's senior long-term debt has only one Rating, then
LIBOR Rate Spread shall be determined by reference solely to such
Rating. If two Ratings are maintained by the Borrower, then the lower
Rating shall control for purposes of determining the LIBOR Rate
Spread; provided, however, that if the difference between the two
Ratings is greater than two levels, then the Bank shall reasonably
determine the average of such Ratings, which shall control (and, if
such average is greater than one of the rating levels specified in the
foregoing table, but less than the next higher rating level, the lower
of the two rating levels shall be deemed the average of the two
Ratings for purposes of determining the LIBOR Rate Spread). If three
or more Ratings are obtained by the Borrower, than all but the two
highest Ratings shall be disregarded, and the LIBOR Rate Spread shall
be determined in accordance with the preceding sentence as if such two
highest Ratings were the only two Ratings obtained.
For purposes of this definition, the following terms shall have the
following meanings:
"D&P" shall mean Duff & Xxxxxx Rating Agency
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"Moody's" shall mean Xxxxx'x Investors Service, Inc.
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"Rating Agencies" shall mean D&P, Moody's and S&P and any substitute
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rating
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agencies agreed upon by the Borrower and the Bank.
"Ratings" shall mean the rating from time to time established by the
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Rating Agencies by the Borrower's long term unsecured debt.
"S&P" shall mean Standard and Poor's Ratings Group
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"Lien" shall mean any security interest, mortgage, pledge, lien, claim on
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property, charge or encumbrance (including any conditional sale or other title
retention agreement), any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction.
"Loan" shall have the meaning set forth in Section 2.1 below
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"Loan Documents" has the meaning set forth in Section 4.1 below.
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"Loan Request" shall mean written request for a loan in form and substance
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satisfactory to Bank.
"Market Value" shall mean, with respect to Unencumbered Property owned by a
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Person:
(i) if such Unencumbered Property has not been owned and operated for at
least one full fiscal quarter after the Stabilized Occupancy Date by
such Person, the cost thereof, as reflected on the Borrower's
consolidated books and records in accordance with GAAP;
(ii) if such Unencumbered Property has been so owned and operated for more
than one fiscal quarter but less than four after the Stabilized
Occupancy Date, (1) the product of (x) the relevant Net Operating
Income of such Unencumbered Property for the number of fiscal
quarters, up to four, such Unencumbered Property has been so owned
and operated times (y) (1) if owned and operated for not more than
one fiscal quarter, four (4); (2) if owned and operated for at least
two but less than three fiscal quarters, two (2); and (z) if owned
and operated for at least three but less than four fiscal quarters,
four-one-thirds (4/3) divided by (2) a capitalization rate reasonably
determined by the Borrower; and
(iii) in all other cases, (1) the Net Operating Income of such Unencumbered
Property for the four fiscal quarters most recently ended divided by
(2) a capitalization rate reasonably determined by the Borrower.
"Material Adverse Effect" shall mean, with respect to a Person, a material
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adverse effect upon the condition (financial or otherwise), operations,
performance or properties of such Person.
"Material Subsidiary" shall mean a Subsidiary with assets or net income
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which, when multiplied by the Borrower's effective ownership percentage,
exceed, respectively, $30,000,000 or five percent (5%) of the Borrower's
consolidated net income. For purposes of this definition, the Borrower's
"effective ownership percentage" of a Subsidiary shall mean the percentage of
outstanding voting interests of all classes in such Subsidiary owned or
controlled by the Borrower.
"NAREIT" shall mean the National Association of Real Estate Investment
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Trusts.
"Net Operating Income of Unencumbered Property" shall mean, with reference
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to any period, the net income (or loss) of the Borrower and its Subsidiaries
from operation of Unencumbered Property during
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such period (taken as a cumulative whole), as determined in accordance with
GAAP, after eliminating all offsetting debits and credits between the Borrower
and its Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the Borrower
and its Subsidiaries in accordance with GAAP; provided that there shall be
excluded (i) the income (or loss) of any Person accrued prior to the date it
becomes a Subsidiary or is merged into or consolidated with the Borrower or a
Subsidiary, and the income (or loss) of any Person, substantially all of the
assets of which have been acquired in any manner, realized by such other
Person prior to the date of acquisition, (ii) the income (or loss) of any
Person (other than a Subsidiary) in which the Borrower or any Subsidiary has
an ownership interest, except to the extent that any such income has been
actually received by the Borrower or such Subsidiary in the form of cash
dividends or similar cash distributions, (iii) the undistributed earnings of
any Subsidiary to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time permitted by the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such Subsidiary, (iv)
any restoration to income of any contingency reserve, except to the extent
that provision for such reserve was made out of income accrued during such
period, (v) any aggregate net gain (including any aggregate net loss) during
such period arising from the sale, conversion, exchange or other disposition
of capital assets (such term to include, without duplication, (y) all non-
current assets and, without duplication (z) the following whether or not
current: all fixed assets, whether tangible or intangible, all inventory sold
in conjunction with the disposition of fixed assets, and all securities), (vi)
any net gain from the collection of the proceeds of life insurance policies,
(vii) any gain arising from the acquisition of any security, or the
extinguishment, under GAAP, of any Indebtedness of the Borrower or any
Subsidiary, (viii) any net income or gain (but not any net loss) during such
period from (w) any change in accounting principles in accordance with GAAP,
any prior period adjustments resulting from any change in accounting
principles in accordance with GAAP, (y) any extraordinary items, or (z) any
discontinued operations or the disposition thereof, (ix) any deferred credit
representing the excess of equity in any Subsidiary at the date of acquisition
over the cost of the investment in such Subsidiary, (x) in the case of a
successor to the Borrower by consolidation or merger or as a transferee of its
assets, any earnings of the successor corporation prior to such consolidation,
merger or transfer of assets, and (xi) any portion of such net income that
cannot be freely converted into United States Dollars.
"Obligations" shall mean all amounts owing by the Borrower to the Bank
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pursuant to this Agreement including, but not limited to Loans and the Letter
of Credit Obligations.
"Ordinary Course of Business" shall mean, in respect of any transaction
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involving the Borrower or any Subsidiary, the ordinary course of the
Borrower's or such Subsidiary's business, as conducted by the Borrower or such
Subsidiary in accordance with past practice and undertaken by the Borrower or
such Subsidiary in good faith.
"Outstanding Letters of Credit" shall mean (i) any Letter of Credit which
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has not been canceled, expired un-utilized or fully drawn down and (ii) the
amount of any unreimbursed Drawings.
"Permitted Liens" shall mean:
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(i) Liens and security interests securing indebtedness owed by the
Borrower to the Bank;
(ii) Liens for taxes, assessments or similar charges either not yet due
or being contested in good faith;
(iii) Liens of materialmen, mechanics, warehousemen, or carriers or other
like Liens arising in the
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Ordinary Course of Business and securing obligations which are not yet
delinquent;
(iv) Liens on real estate securing Indebtedness in an aggregate amount
outstanding at any one time not to exceed 30% of the Borrower's and its
Subsidiaries' Total Assets;
(v) Liens on equipment leased by the Borrower to the extent rents payable
in connection therewith which are not otherwise prohibited under Section 7;
and
(vi) Liens which, as of the date hereof, have been disclosed to and
approved by the Bank in writing or which may hereafter be approved by the
Bank in writing.
"Person" shall mean an individual, partnership, corporation, business
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trust, joint stock company, trust, unincorporated association, joint venture
or Governmental Authority.
"Potential Event of Default" shall mean an event or occurrence which with
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the passage of time or the giving of notice or of both would become an Event
of Default.
"Property" shall mean, collectively and severally, any and all real
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property, including all improvements and fixtures thereon, owned, occupied, or
leased by the Borrower or by any Person whose financial condition is
consolidated with the financial condition of the Borrower on financial
statements prepared in accordance with GAAP.
"Reference Rate" shall mean an index for a variable interest rate which is
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quoted, published or announced from time to time by the Bank as its reference
rate and as to which loans may be made by the Bank at, below or above such
rate.
"Reference Rate Loans" shall mean Loans bearing interest calculated based
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on the Reference Rate.
"Stabilized Occupancy Date" shall mean, with respect to any Property, the
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last day of the first fiscal quarter when the Occupancy Percentage of such
Property has reached 90%, where "Occupancy Percentage" means (i) the number of
residential units comprising such Property which are occupied pursuant to
written lease or rental agreements in accordance with the Borrower's customary
business practice divided by (ii) the total number of units comprising such
Property.
"Subordinated Debt" shall mean such liabilities of the Borrower which have
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been subordinated to those owed to the Bank in a manner acceptable to the
Bank.
"Subsidiary" shall mean, as to any Person, any corporation, association,
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limited liability company or other business entity in which such Person or one
or more of its Subsidiaries or such person and one or more of its Subsidiaries
own sufficient equity or voting interests to enable it or them (as a group)
ordinarily, in the absence of contingencies, to elect a majority of the
directors (or Persons performing similar functions) of such entity, and any
partnership or joint venture if more than a 50% interest in the profits or
capital thereof is owned by such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries (unless such partnership can
and does ordinarily take major business actions without the prior approval of
such Person or one or more of its Subsidiaries). In the case of the Borrower,
"Subsidiary" shall include BRE Property Investors LLC and each other "Down
REIT" with which it may, from time to time, be affiliated.
"Tangible Net Worth" shall mean, at any time, (i) shareholders' equity, as
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shown on the Borrower's consolidated financial statement prepared in
accordance with GAAP, exclusive of minority interests, minus
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(ii) all Intangible Assets.
"Total Assets" shall mean the total assets of the Borrower and its
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Subsidiaries which would be shown as assets on a consolidated balance sheet of
the Borrower and its Subsidiaries determined on a current value basis.
"Under Construction" shall mean that a Person has agreed to incur, or has
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incurred, any liability to (i) obtain entitlement to develop land, (ii)
improve land, or (iii) construct one or more buildings on land which are not
ready for immediate occupancy (whether through sale or lease). The number of
housing units deemed Under Construction, as of any date of determination,
shall be the maximum number of housing units that the Borrower reasonably
determines can or will be constructed on such land.
"Unencumbered Property" shall mean a Property fee title to which is vested
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in the Borrower or any of its Wholly-Owned Subsidiaries or BRE Property
Investors LLC and which is free and clear of all Liens except for Liens for
taxes, assessments or similar charges either not yet due or being contested in
good faith;
"Unsecured Interest Expense" shall mean, with respect to any period, the
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Interest Charges calculated for Unsecured Debt.
"Unsecured Debt" shall mean Debt not secured directly or indirectly by a
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Lien, including, without limitation, Debt under (i) this Agreement and (ii)
that certain Credit Agreement dated as of November 17, 1997 between the
Borrower and Bank of America National Trust and Savings Association."
1.2 Accounting Terms. All references to financial statements, assets,
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liabilities, and similar accounting items not specifically defined herein shall
mean such financial statements or such items prepared or determined in
accordance with GAAP consistently applied, and, except where otherwise
specified, all financial data submitted pursuant to this Agreement shall be
prepared in accordance with such principles.
1.3 Other Terms. Other terms not otherwise defined shall have the meanings
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attributed to such terms in the California Uniform Commercial Code.
2. CREDIT FACILITIES.
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2.1 Credit Limits.
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(a) Revolving Loans. On the terms and subject to the conditions set forth
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herein, the Bank agrees that it shall, from time to time, to and including the
Expiration Date (as such term and capitalized terms not otherwise defined herein
are defined in Section 1 above) make revolving loans (each a "Loan" and,
collectively, the "Loans") to the Borrower in an aggregate amount with all its
other outstanding Loans not to exceed the Credit Limit minus the face amount of
Outstanding Letters of Credit. Loans may be repaid and reborrowed in accordance
with this Agreement.
(b) Letters of Credit. On the terms and subject to the conditions set
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forth herein, the Bank agrees to issue for the account of the Borrower from time
to time from the date hereof to and including the 30th day
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immediately preceding the Expiration Date, its standby Letters of Credit (a
"Letter of Credit" and collectively the "Letters of Credit") in an aggregate
face amount with the face amount of other Outstanding Letters of Credit not to
exceed at any one time the lesser of (i) the L/C Sublimit or (ii) the Credit
Limit minus Revolving Loans outstanding.
2.2 Maintenance of Loans. Loans shall be maintained, at the election of the
--------------------
Borrower made from time to time as permitted herein, as Reference Rate Loans
and/or LIBOR Loans or any combination thereof.
2.3 Calculation of Interest. The Borrower shall pay interest on Loans
-----------------------
outstanding hereunder from the date disbursed to but not including the date of
payment at a rate per annum equal to, at the option of and as selected by the
Borrower from time to time (subject to the provisions of Sections 2.6, 2.7 and
---------------------
2.8 below): (1) with respect to each Loan which is a LIBOR Loan, at the
---
Applicable LIBOR Rate for the applicable Interest Period, and (2) with respect
to each Loan which is a Reference Rate Loan, at a fluctuating rate per annum
equal to the Reference Rate during the applicable calculation period.
2.4 Payment of Interest. Interest accruing on Reference Rate Loans
-------------------
outstanding hereunder shall be payable monthly, in arrears, for each month on or
before the [tenth] Business Day of the next succeeding month and a final payment
shall be payable on the Expiration Date in the amount of interest then accrued
but unpaid. Interest accruing on LIBOR Loans outstanding hereunder shall be
payable in arrears: (1) in the case of LIBOR Loans with Interest Periods ending
from not more than three (3) months from the date advanced, at the end of the
applicable Interest Period therefor; and (2) in the case of LIBOR Loans with
Interest Periods ending later than three (3) months from the date advanced, at
the end of each three (3) month period from the date advanced, and then at the
end of the applicable Interest Period therefor. The Borrower hereby irrevocably
authorizes and directs the Bank to collect interest when due by debiting the
amount of interest payable from any collected funds then on deposit in such
account maintained by the Borrower with the Bank as the Borrower shall
designate, but no failure by the Bank to so debit such account and no
insufficiency in the amount on deposit in such account shall excuse the Borrower
from making any payment in full when due. In accordance with its usual
procedures, the Bank will notify the Borrower of the date and approximate amount
of any such debit prior to the date thereof.
2.5 Repayment of Principal. Subject to the prepayment requirements of this
----------------------
Agreement, the Borrower shall pay the principal amount of all Loans remaining
outstanding on the Expiration Date. The Borrower hereby irrevocably authorizes
and directs the Bank to collect principal on the Loans when due by debiting the
amount of principal payable from any collected funds then on deposit in such
account maintained by the Borrower with the Bank as the Borrower shall
designate, but no failure by the Bank to so debit such account and no
insufficiency in the amount on deposit in such account shall excuse the Borrower
from making any payment in full when due.
2.6 Election of Type of Loan; Conversion Options.
--------------------------------------------
(a) The Borrower may elect from time to time to have Loans funded (i) as
Reference Rate Loans by giving the Bank prior irrevocable notice no later than
10:00 a.m. (Los Angeles time) on the proposed date of borrowing of such
election, and (ii) as LIBOR Loans by giving the Bank at least three LIBOR
Business Days' prior irrevocable notice of such election. The Borrower may
elect from time to time to (i) convert Loans outstanding as LIBOR Loans to
Reference Rate Loans by giving the Bank at least one Business Day's prior
irrevocable notice of such election, and (ii) convert Loans outstanding as
Reference Rate Loans to LIBOR Loans by giving the Bank at least three Business
Days' prior irrevocable notice of such election. Any such conversion of LIBOR
Loans may only be made on the last
71
day of the applicable Interest Period. All such elections shall be evidenced by
the delivery by the Borrower to the Bank within the required time frame of a
duly executed Loan Request. No Reference Rate Loan shall be converted into a
LIBOR Loan if an Event Of Default or Potential Default has occurred and is
continuing on the day occurring three LIBOR Business Days prior to the date of
the conversion requested by the Borrower. All or any part of outstanding Loans
may be converted as provided in this Section 2.6(a), provided that partial
--------------
conversions shall be in a principal amount of $500,000 or whole multiples of
$100,000 in excess thereof, and in the case of conversions into LIBOR Loans,
after giving effect thereto the aggregate of the then number of respective LIBOR
Loans having a different Interest Period does not exceed five.
(b) Any LIBOR Loan may be continued as such upon the expiration of the
Interest Period with respect thereto by giving the Bank at least three LIBOR
Business Days' prior irrevocable notice of such election as set forth on a duly
executed Loan Request; provided, however, that no LIBOR Loan may be continued as
such when any Event Of Default or Potential Default has occurred and is
continuing, but shall be automatically converted to a Reference Rate Loan on the
last day of the then current Interest Period applicable thereto. If the
Borrower shall fail to give notice as provided above, the Borrower shall be
deemed to have elected to convert the affected LIBOR Loan to a Reference Rate
Loan on the last day of the relevant Interest Period.
2.7 Inability to Determine Rate. In the event that the Bank shall have
---------------------------
determined (which determination shall be conclusive and binding upon the
Borrower) that by reason of circumstances affecting the interbank market
adequate and reasonable means do not exist for ascertaining the LIBOR Rate for
any Interest Period, the Bank shall forthwith give notice to the Borrower. If
such notice is given: (1) no Loan may be funded as a LIBOR Loan, (2) any Loan
that was to have been or would be converted to a LIBOR Loan shall, subject to
the provisions hereof, be continued as a Reference Rate Loan, and (3) any
outstanding LIBOR Loan shall be converted, on the last day of the then current
Interest Period with respect thereto, to a Reference Rate Loan.
2.8 Illegality. Notwithstanding any other provisions herein, if any law,
----------
regulation, treaty or directive or any change therein or in the interpretation
or application thereof, shall make it unlawful for Bank to make or maintain
LIBOR Loans as contemplated by this Agreement: (1) the commitment of the Bank
hereunder to make or to continue LIBOR Loans or to convert Reference Rate Loans
to LIBOR Loans shall forthwith be canceled and (2) Loans then outstanding as
LIBOR Loans, if any, shall be converted automatically to Reference Rate Loans at
the end of their respective Interest Periods or within such earlier period as
required by law. In the event of a conversion of any such Loan prior to the end
of its applicable Interest Period the Borrower hereby agrees promptly to pay the
Bank, upon demand in writing setting forth in reasonable detail the calculation
of the amount so demanded, the amounts required pursuant to Section 2.11 below,
------------
it being agreed and understood that such conversion shall constitute a
prepayment for all purposes hereof. The provisions hereof shall survive the
termination of this Agreement and payment of the outstanding Loans and all other
amounts payable hereunder.
2.9 Requirements Of Law; Increased Costs. In the event that any applicable
------------------------------------
law, order, regulation, treaty or directive issued by any central bank or other
Governmental Authority, agency or instrumentality or in the governmental or
judicial interpretation or application thereof, or compliance by Bank with any
request or directive (whether or not having the force of law) issued by any
central bank or other Governmental Authority, agency or instrumentality:
(1) Does or shall subject the Bank to any tax of any kind whatsoever with
respect to this Agreement or any Loans made or Letters Of Credit issued
hereunder, or change the basis of taxation
72
of payments to the Bank of principal, fee, interest or any other amount
payable hereunder (except for change in the rate of tax on the overall net
income of the Bank);
(2) Does or shall impose, modify or hold applicable any reserve, capital
requirement, special deposit, compulsory loan or similar requirements against
assets held by, or deposits or other liabilities in or for the account of,
advances or Loans by, or other credit extended by, or any other acquisition of
funds by, any office of such Bank which are not otherwise included in the
determination of interest payable on the Obligations; or
(3) Does or shall impose on the Bank any other condition;
and the result of any of the foregoing is to increase the cost to the Bank of
making, renewing or maintaining any Loan or to reduce any amount receivable in
respect thereof or the rate of return on the capital of the Bank or any
corporation controlling the Bank, then, in any such case, the Borrower shall
promptly pay to the Bank, upon its written demand made to the Borrower, any
additional amounts necessary to compensate the Bank for such additional cost or
reduced amounts receivable or rate of return as determined by the Bank with
respect to this Agreement or Loans made or Letters Of Credit issued hereunder.
If the Bank becomes entitled to claim any additional amounts pursuant to this
Section 2.9, it shall promptly notify the Borrower of the event by reason of
-----------
which it has become so entitled. A certificate as to any additional amounts
payable pursuant to the foregoing sentence containing the calculation thereof in
reasonable detail submitted by the Bank to the Borrower shall be conclusive in
the absence of manifest error. The provisions hereof shall survive the
termination of this Agreement and payment of the outstanding Loans and all other
amounts payable hereunder.
2.10 Funding. The Bank shall be entitled to fund all or any portion of its
-------
Loans in any manner it may determine in its sole discretion, including, without
limitation, in the Grand Cayman inter-bank market, the London inter-bank market
and within the United States, but all calculations and transactions hereunder
shall be conducted as though the Bank actually funds all LIBOR Loans through
funding dollar deposits in the amount of the relevant Loan in maturities
corresponding to the applicable Interest Period in a manner consistent with the
method based on which the LIBOR Rate was calculated by the Bank.
2.11 Prepayment Premium. In addition to all other payment obligations
------------------
hereunder, in the event: (1) any Loan which is outstanding as a LIBOR Loan is
prepaid prior to the last day of the applicable Interest Period, whether
following a voluntary prepayment, a mandatory prepayment or otherwise, or (2)
the Borrower shall fail to continue or to make a conversion to a LIBOR Loan
after the Borrower has given notice thereof as provided in Section 2.6 above,
-----------
then the Borrower shall immediately pay to the Bank, an additional premium sum
compensating the Bank for losses, costs and expenses incurred by the Bank in
connection with such prepayment, including, without limitation, those incurred
in connection with redeployment of funds.
3. MISCELLANEOUS PROVISIONS.
------------------------
3.1 Use of Proceeds. Loans and Letters of Credit will be used by the
---------------
Borrower in connection with the acquisition and development of Properties, for
working capital, and payment of distributions.
3.2 Request For Loans and Letters Of Credit; Making of Loans and Issuance of
------------------------------------------------------------------------
Letters Of Credit.
-----------------
(a) The Loans. If the Borrower desires to borrow hereunder, the Borrower
---------
shall deliver a Loan Request to the Bank, which shall be delivered
telephonically no later than 10:00 a.m. (Los Angeles time)
73
and immediately confirmed by facsimile transmission, on the day notice of
borrowing is required to be given for the type of Loan being requested pursuant
to Section 2.6 above. Each Loan that is a Reference Rate Loan shall be in a
-----------
minimum amount not less than $100,000 and in increments of $50,000 in excess
thereof. Each Loan that is a LIBOR Loan shall be in a minimum amount not less
than $500,000 and in increments of $100,000 in excess thereof.
(b) Letters Of Credit. If the Borrower desires to request a Letter Of Credit
-----------------
hereunder, the Borrower shall deliver a Letter Of Credit Request (which shall be
completed in form and substance satisfactory to the Bank) to the Bank which
shall be delivered by telefacsimile transmission at least three (3) Business
Days prior to the requested date of issuance. Each such Letter Of Credit
Request shall be accompanied by all other documents, instruments, and agreements
as the Bank may reasonably request in connection with such request (the "L/C
Documents").
3.3 Evidence of Repayment Obligations.
---------------------------------
(a) The Loans. The obligation of the Borrower to repay the Loans shall be
---------
evidenced by the book, records and accounts of the Bank. Upon any advance,
conversion or prepayment as provided in this Agreement with respect to any Loan,
the Bank is hereby authorized to record the date and amount of each such advance
and conversion, or the date and amount of each such payment or prepayment of
principal of the Loan, the applicable Interest Period and interest rate with
respect thereto, by any method the Bank may elect consistent with its customary
practices and any such recordation shall constitute prima facie evidence of the
----- -----
accuracy of the information so recorded absent manifest error. The failure of
the Bank to make any such notation shall not affect in any manner or to any
extent the Borrower's Obligations hereunder.
(b) Letters Of Credit. Each Drawing under a Letter Of Credit shall be payable
-----------------
in full by the Borrower on the date thereof, without demand or notice of any
kind. If the Borrower desires to repay a Drawing from the proceeds of a Loan,
the Borrower may request a Reference Rate Loan in accordance with the other
terms and conditions of this Agreement and, if disbursed on the date of such
Drawing, such Reference Rate Loan shall be applied in payment of such
reimbursement obligation by the Borrower. The obligation of the Borrower to
reimburse the Bank for Drawings shall be absolute, irrevocable and unconditional
under any and all circumstances whatsoever and irrespective of any set-off,
counterclaim or defense to payment which the Borrower may have or have had
against the Bank (except such as may arise out of the Bank's gross negligence or
willful misconduct hereunder) or any other Person, including, without
limitation, any set-off, counterclaim or defense based upon or arising out of:
(i) Any lack of validity or enforceability of this Agreement or any of
the other Loan Documents;
(ii) Any amendment or waiver of or any consent to departure from the terms
of any Letter Of Credit;
(iii) The existence of any claim, set-off, defense or other right which the
Borrower or any other Person may have at any time against any beneficiary
or any transferee of any Letter Of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting); or
(iv) Any allegation that any demand, statement or any other document
presented under any Letter Of Credit is forged, fraudulent, invalid or
insufficient in any respect, or any statement therein being untrue or
inaccurate in any respect whatsoever or any variations in punctuation,
74
capitalization, spelling or format of the drafts or any statements
presented in connection with any Drawing.
3.4 Nature and Place of Payments. All payments made on account of the
----------------------------
Obligations shall be made by the Borrower, without setoff or counterclaim, in
lawful money of the United States of America in immediately available funds,
free and clear of and without deduction for any taxes, fees or other charges of
any nature whatsoever imposed by any taxing authority and must be received by
the Bank by 1:00 p.m. (Los Angeles time) on the day of payment, it being
expressly agreed and understood that if a payment is received after 1:00 p.m.
(Los Angeles time) by the Bank, such payment will be considered to have been
made by the Borrower on the next succeeding Business Day and interest thereon
shall be payable by the Borrower at the Reference Rate during such extension.
If any payment required to be made by the Borrower hereunder becomes due and
payable on a day other than a Business Day, the due date thereof shall be
extended to the next succeeding Business Day and interest thereon shall be
payable at the then applicable rate during such extension.
3.5 Default Interest. After the occurrence of and during the continuance of
----------------
an Event Of Default, the Bank, in its sole discretion, may determine that all
Obligations shall bear interest from the date due until paid in full at a per
annum rate equal to the Default Rate.
3.6 Computations. All computations of interest and fees payable hereunder
------------
shall be based upon a year of 360 days for the actual number of days elapsed.
3.7 Prepayments.
-----------
(1) The Borrower may prepay Reference Rate Loans hereunder in whole or in
part at any time. LIBOR Loans may only be paid at the end of their respective
Interest Periods.
(2) The Borrower shall pay in connection with any prepayment hereunder,
whether voluntary or mandatory, all interest accrued but unpaid on Loans to
which such prepayment is applied, and all prepayment premiums, if any, on
LIBOR Loans to which such prepayment is applied, concurrently with payment to
the Bank of any principal amounts.
(3) Subject to the other terms and conditions of this Agreement, the
Borrower may, from time to time upon five (5) Business Days' prior written
notice to the Bank, reduce the Credit Limit, in increments of not less than
$1,000,000, to an amount not less than the aggregate Loans outstanding and
Outstanding Letters Of Credit.
3.8 Fees.
----
(1) . The Borrower shall pay to the Bank an unused credit fee on the average
daily amount by which the Credit Limit exceeds the sum of outstanding Loans
and Letter of Credit Obligations, computed on a quarterly basis in arrears
on the last Business Day of each calendar quarter, based upon the daily
utilization for such quarter, equal to .125% per annum. Such fee shall
accrued from the date of the Second Amendment to this Agreement and shall be
due and payable quarterly in arrears on the last Business Day of each
calendar quarter, commencing on September 30, 1997 with the final payment to
be made on the Maturity Date.
(2) Letter Of Credit Fees. The Borrower shall pay to the Bank (i) on the
---------------------
date of issuance of each Letter of Credit a non-refundable letter of credit
commission computed at the per annum rate of 1.5% on the face amount of such
standby Letters Of Credit and (ii) on demand, such other fees as
75
may be required by the Bank in accordance with its standard fee structure for
such Letters of Credit.
(3) Other Fees. The Borrower shall pay such other fees as it shall from
----------
time to time agree upon in connection with this Agreement pursuant to letter
agreements entered into with reference to this paragraph.
4. CONDITIONS TO EXTENDING CREDIT. As conditions precedent to the obligation
------------------------------
of the Bank to make any Loan and to issue any Letter of Credit:
4.1 Conditions Precedent to First Credit Extension. With respect to the
----------------------------------------------
first such credit extension under this Agreement:
(a) Delivery of Documents. The Borrower shall have delivered to the Bank, in
---------------------
form and substance satisfactory to the Bank and each of its counsel, each of the
following:
(i) Loan Documents. This Agreement and all other documents,
--------------
instruments and agreements required or necessary to consummate the
transactions contemplated under this Agreement (collectively with the
Continuing Guaranties, the "Loan Documents"), all duly executed.
--------------
(ii) Continuing Guaranty. A Continuing Guaranty from each Material
-------------------
Subsidiary, duly executed.
(iii) Evidence of Authority. Certified resolutions of the Board of
---------------------
Directors of the Borrower and each Material Subsidiary approving the
execution, delivery and performance of each of the Loan Documents to which
it is a party.
(iv) Incumbency. A certificate of the Secretary or an Assistant
----------
Secretary of the Borrower and each Material Subsidiary certifying the names
and true signatures of the officers of the Borrower authorized to sign the
Loan Documents to which it is party and, on an ongoing basis, to act under
and to perform the Loan Documents.
(iv) Bylaws. A copy of the Bylaws of the Borrower and each Material
------
Subsidiary, certified by the Secretary or an Assistant Secretary of the
Borrower and each Material Subsidiary as being accurate and complete.
(v) Articles of Incorporation. A copy of the Articles of
-------------------------
Incorporation or other organizational documents of the Borrower and each
Material Subsidiary certified by the Secretary of State or other official
of the state or jurisdiction of incorporation as of a recent date.
(vii) Opinions. An opinion of counsel in form and substance
--------
satisfactory to the Bank with respect to the matters set forth in Sections
--------
5.1, 5.2, 5.3 and 5.4 below.
----------------------
(viii) Credit Applications, Etc. Such credit applications, financial
-------------------------
statements, authorizations and such information concerning the Borrower as
the Bank may reasonably request.
(ix) Miscellaneous Documents. Such other documents as the Bank may
-----------------------
reasonably require with respect to the transactions described in this
Agreement.
(b) Other Actions. All acts and conditions (including, without limitation,
-------------
the obtaining of any necessary regulatory approvals and the making of any
required filings, recordings or registrations) required
76
to be done and performed and to have happened precedent to the execution,
delivery and performance of the Loan Documents and to constitute the same legal,
valid and binding obligations, enforceable in accordance with their respective
terms, shall have been done and performed and shall have happened in due and
strict compliance with all applicable laws.
(c) Documentation Satisfactory. All documentation, including, without
---------------------------
limitation, documentation for corporate and legal proceedings in connection with
the transactions contemplated by the Loan Documents shall be in form and
substance satisfactory to the Bank and its counsel.
4.2 Conditions to Each Credit Extension . As conditions precedent to the
------------------------------------
Bank's obligation to make any Loan and to issue any Letter of Credit, including
the first such credit extension, at and as of the date of the funding or
issuance thereof.
(i) Representations and Warranties. The representations and warranties
------------------------------
set forth in Section 5 hereof and in any other document, instrument,
agreement or certificate delivered to the Bank hereunder are true and
correct in all material respects.
(ii) Event of Default. No event has occurred and is continuing which
----------------
constitutes, or, with the lapse of time or giving of notice or both, would
constitute an Event of Default.
For the purposes hereof, the Borrower's request for a Loan or a Letter of Credit
shall be deemed to constitute the Borrower's representation and warranty that
the statements set forth in clauses (i) and (ii) of this Section 4.2 are true
-----------
and correct.
5. REPRESENTATIONS AND WARRANTIES. The Borrower hereby makes the following
-------------------------------
representations and warranties to the Bank, which representations and warranties
are continuing:
5.1 Status. That the Borrower and each Material Subsidiary:
------
(a) is duly organized, validly existing and in good standing under the laws of
the jurisdiction of its creation, and is in good standing under the laws of each
jurisdiction where it is organized;
(b) has the power and authority and all governmental licenses, authorizations,
consents and approvals to own its assets, carry on its business and to execute,
deliver, and perform its obligations under the Loan Documents to which it is a
party;
(c) is duly qualified as a foreign Person, licensed and in good standing under
the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification; and
(d) is in compliance with all applicable laws and regulations;
except, in each case referred to in clauses (b), (c), or (d), to the extent
that the failure to do so could not reasonably be expected to have a Material
Adverse Effect.
5.2 Authority. The execution, delivery and performance by the Borrower and
---------
by the Material Subsidiaries of the Loan Documents to which it is a party and
any instrument, document or agreement required hereunder have been duly
authorized and do not and will not: (i) violate, in any material respect, any
provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award presently in effect having application to the
Borrower or any of its Subsidiaries; (ii) result in a breach of or
77
constitute a default under any material indenture or loan or credit agreement or
other material agreement, lease or instrument to which the Borrower or any of
its Subsidiaries is a party or by which it or its properties may be bound or
affected; or (iii) require any consent or approval of its stockholders or
members or violate any provision of its articles of incorporation or by-laws or
other organizational documents.
5.3 Governmental Authorization. No approval, consent, exemption,
--------------------------
authorization, or other action by, or notice to, or filing with, any
governmental authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Borrower or
any Material Subsidiary of this Agreement or any other Loan Document.
5.4 Legal Effect. Each Loan Document has been duly executed and delivered on
------------
behalf of the Borrower or the Material Subsidiary party thereto and constitutes,
and any instrument, document or agreement required hereunder when delivered
hereunder will constitute, legal, valid and binding obligations of the Borrower
or such Material Subsidiary enforceable against the Borrower or such Material
Subsidiary in accordance with their respective terms subject to bankruptcy,
insolvency, reorganization, moratorium and other laws affecting creditors rights
generally and by general equitable principles.
5.5 Financial Statements. All financial statements which may have been or
--------------------
which may hereafter be submitted by the Borrower to the Bank are true, accurate
and correct in all material respects, as of their respective dates and with
respect to year end financial statements, have been or will be prepared in
accordance with GAAP consistently applied, and, with respect to other financial
statements, fairly represent the Borrower's consolidated financial condition or,
as applicable, the other information disclosed therein. Since the most recent
submission of any such financial statement, information or other data to the
Bank, the Borrower represents and warrants that no material adverse change in
the Borrower's consolidated financial condition has occurred which has not been
fully disclosed to the Bank in writing.
5.6 Litigation. Except as have been disclosed to the Bank in writing, there
----------
are no actions, suits or proceedings pending or, to the knowledge of the
Borrower, threatened against or affecting the Borrower, any of its Subsidiaries
or the Borrower's or any Subsidiary's properties before any court or
administrative agency which, if determined adversely to the Borrower or such
Subsidiary, would have a material adverse effect on the Borrower's consolidated
financial condition or operations.
5.7 ERISA. If the Borrower has a pension, profit sharing or retirement plan
-----
subject to ERISA, such plan has been and will continue to be funded in
accordance with its terms and otherwise complies with and will continue to
comply with the requirements of ERISA.
5.8 Taxes. The Borrower and each of its Subsidiaries have filed all tax
-----
returns required to be filed and paid all taxes shown thereon to be due,
including interest and penalties, other than taxes which are currently payable
without penalty or interest or those which are being duly contested in good
faith.
5.9 Environmental Matters. Except as otherwise disclosed to the Bank in a
---------------------
writing referencing this Agreement or the Prior Agreement, the operations of the
Borrower and each of its Subsidiaries comply, and during the term of this
Agreement will at all times comply, in all material respects with all federal,
state and local laws, statutes, common law duties, rules, regulations,
ordinances and codes applicable to the Borrower ("Environmental Laws"); the
------------------
Borrower and each of its Subsidiaries have obtained all licenses, permits,
authorizations and registrations required under any Environmental Law
("Environmental Permits") and necessary for their respective Ordinary Course of
-----------------------
Business, all such Environmental Permits are in good standing, and the Borrower
and each of its Subsidiaries are in compliance with all material terms and
conditions of such Environmental Permits; neither the Borrower nor any of its
Subsidiaries nor any of their
78
respective present Property or operations is subject to any outstanding written
order from or agreement with any governmental authority nor subject to any
judicial or docketed administrative proceeding respecting any Environmental Law,
Environmental Claim or Hazardous Material which would have a material adverse
effect on the Borrower's consolidated financial condition or operations; there
are no conditions or circumstances existing, or arising from operations prior to
the date of this Agreement, with respect to any Property of the Borrower or any
of its Subsidiaries that would reasonably be expected to give rise to
Environmental Claims which would have a material adverse effect on the
Borrower's consolidated financial condition or operations; provided, however,
--------
that with respect to property leased from an unrelated third party, the
foregoing representation is made to the best knowledge of the Borrower. In
addition, (i) neither the Borrower nor any of its Subsidiaries have any
underground storage tanks (x) that are not properly registered or permitted
under applicable Environmental Laws, or (y) that are leaking or disposing
Hazardous Materials, and (ii) the Borrower and each of its Subsidiaries have
notified all of their respective employees of the existence, if any, of any
health hazard arising from the conditions of their employment and have met all
notification requirements under all Environmental Laws.
6. FINANCIAL CONDITION; REPORTING. The Borrower promises and agrees, during
-------------------------------
the term of this Agreement and until full payment of all of Borrower's
Obligations hereunder, to:
6.1 Reporting and Certification Requirements. Deliver or cause to be
----------------------------------------
delivered to the Bank in form and detail satisfactory to the Bank:
(a) Annual Statements. As soon as available, and in any event not later than
-----------------
ninety (90) days after the close of each fiscal year of the Borrower,
consolidated and consolidating financial statements for the Borrower for such
fiscal year, including a balance sheet, cash flow statement, income statement
and such other statements as may be reasonably required by the Bank prepared in
accordance with GAAP accompanied by an unqualified report of a firm of
independent certified accountants acceptable to the Bank and including therewith
a copy of the management letter from such certified public accountants;
(b) Quarterly Statements. As soon as available, and in any event not later
--------------------
than sixty (60) days after the last day of each fiscal quarter, consolidated and
consolidating financial statements for the Borrower for the quarter just ended
and the fiscal year to date, including a balance sheet, cash flow statement,
income statement and such other statements as may be reasonably required by the
Bank prepared in accordance with GAAP and certified as true and complete by the
Chief Financial Officer of the Borrower.
(c) Compliance Certificate. Together with the delivery of the financial
----------------------
statements of the Borrower pursuant to the preceding clauses (a) and (b), a
certificate of the Chief Financial Officer of the Borrower substantially in the
form of Exhibit B;
---------
(d) Two-Year Statements. As soon as available, and in any event not later
-------------------
than ninety (90) days after the close of each fiscal year of the Borrower,
consolidated and consolidating financial projections for the Borrower for the
succeeding two (2) fiscal years, including a balance sheet, cash flow statement,
income statements and such other statements as may be reasonably required by the
Bank prepared.
(e) SEC Filings, Etc. Promptly after sending, filing or publishing the same,
-----------------
copies of all proxy statements, financial statements and reports which the
Borrower sends to its public stockholders and copies of all regular and periodic
reports and all registration statements which the Borrower files with the
Securities and Exchange Commission. Delivery of such documents to the Bank
shall satisfy the requirements of Sections 6.1(a) and (b) to the extent the
-----------------------
contents, date, and delivery of such documents are consistent with the
requirements of such Sections.
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(f) Management Reports. As soon as available and in any event not later than
------------------
sixty (60) days after the last day of each fiscal quarter, a Summary of Net
Operating Income and such other information as the Bank may reasonably request,
all certified as true and complete by the Chief Financial Officer of the
Borrower.
6.2 Accounting Records: Maintain adequate books and records in accordance
------------------
with GAAP consistently applied and in a manner otherwise acceptable to the Bank,
and, at any reasonable time and from time to time, upon three Business Days'
notice, permit the Bank or any representative thereof to examine and make copies
of the records and visit the Properties of the Borrower and any of its
Subsidiaries and discuss the business and operations of the Borrower and any of
its Subsidiaries with any of its officers and employees. If the Borrower or any
of its Subsidiaries shall maintain any records (including, but not limited to,
computer generated records or computer programs for the generation of such
records) in the possession of a third party, the Borrower hereby agrees to
provide the Bank with copies of any such records that it may request, all at the
Bank's expense, the amount of which shall be payable immediately upon demand.
In addition, the Bank may, at any reasonable time and from time to time, upon
three Business Days' notice, conduct inspections and audits of the Borrower's
and its Subsidiaries' accounts payable, the cost and expenses of which shall be
paid by the Bank.
7. OTHER COVENANTS During the term of this Agreement and until payment in full
---------------
of the Borrower's Obligations hereunder, the Borrower promises and agrees to and
to cause each of its Subsidiaries to:
7.1 Preservation of Existence; Compliance with Applicable Laws. Maintain and
----------------------------------------------------------
preserve its existence and all rights and privileges material to its business as
conducted as of the date of this Agreement; not liquidate or dissolve, merge or
consolidate with or into any other business organization; and conduct its
business and operations in accordance with all applicable laws, rules and
regulations, except that (i) any Subsidiary may merge into another Subsidiary so
long as the surviving entity which is owned by the Borrower in a percentage not
less than the percentage of the non-surviving entity owned by the Borrower and
(ii) any Subsidiary may merge into the Borrower so long as the Borrower is the
surviving entity.
7.2 Maintenance of Insurance. Maintain insurance in such amounts and
------------------------
covering such risks as is usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in which the
Borrower and each of its Subsidiaries operate and maintain such other insurance
and coverages as may be reasonably required by the Bank. All such insurance
shall be in form and amount and with companies satisfactory to the Bank. Upon
the Bank's request, the Borrower shall furnish the Bank with a copy of the
policy or binder of all such insurance.
7.3 Payment of Obligations and Taxes. Make timely payment of all assessments
--------------------------------
and taxes and all of its liabilities and obligations including, but not limited
to, trade payables, unless the same are being contested in good faith by
appropriate proceedings with the appropriate court or regulatory agency. For
purposes hereof, the issuance of a check, draft or similar instrument without
delivery to the intended payee shall not constitute payment.
7.4 Redemption or Repurchase of Stock; Repurchase of Partnership Interests:
----------------------------------------------------------------------
Except as pursuant to any provision in any security agreement, instrument or
undertaking by which it is bound, not redeem or repurchase any class of its
stock now or hereafter outstanding or purchase or repurchase, in whole or in
part, any partnership interest; provided that any Subsidiary wholly owned by the
Borrower may do any of the foregoing.
7.5 Liens and Encumbrances: Not create, assume or permit to exist any
----------------------
security interest, encumbrance, mortgage, deed of trust, or other lien
(including, but not limited to, a lien of attachment, judgment or execution)
affecting any of its properties, or execute or allow to be filed any financing
statement or
80
continuation thereof affecting any of such properties, except for Permitted
Liens or as otherwise provided in this Agreement.
7.6 Indebtedness. Not create, incur, assume or suffer to exist, or otherwise
------------
become liable for, Indebtedness or accept a commitment for Indebtedness except:
(a) The Obligations;
(b) Trade debt incurred in the ordinary course of business and outstanding
less than thirty (30) days after the same has become due and payable or which is
being contested in good faith, provided provision is made to the satisfaction of
the Bank for the eventual payment thereof in the event it is found that such
contested trade debt is payable by the Borrower or Subsidiary;
(c) Indebtedness secured by Liens permitted under Section 7.5 above;
(d) Unsecured Debt which is revolving Indebtedness and incurred under lines
of credit with financial institutions and which, when aggregated with
commitments (including, without limitation, under this Agreement) to extend
unsecured Indebtedness to the Borrower and or one or more of its Subsidiaries,
does not to exceed $300,000,000 (calculated without double counting Unsecured
Debt on account of Guaranties of such Unsecured Debt);
(e) Non-revolving, non-amortizing Indebtedness with a maturity or call date
not earlier than two (2) years after the date incurred;
(f) Non-revolving, amortizing Indebtedness in favor of the Prudential Life
Insurance Company of America in an original principal amount of
$73,000,000.
7.7 Change in Nature of Business. Not make any material change in its
----------------------------
financial structure or the nature of its business as existing or conducted as of
the date hereof.
7.8 Compensation of Employees. Compensate its employees for services
-------------------------
rendered at an hourly rate at least equal to the minimum hourly rate prescribed
by any applicable federal or state law or regulation.
7.9 Notices. Give prompt written notice to the Bank of:
-------
(a) any and all Event(s) of Default and each Potential Default;
(b) any and all litigation, arbitration or administrative proceedings to which
the Borrower or any of its Subsidiaries is a party and in which the claim or
liability exceeds $5,000,000;
(c) any other matter which has resulted in, or might result in, a material
adverse change in the financial condition or affairs of the Borrower; and
(d) upon, but in no event later than 10 days after, becoming aware after the
date of this Agreement of (i) any enforcement, cleanup, removal or other
governmental or regulatory actions instituted, completed or threatened against
the Borrower or any of its Subsidiaries or any of their respective Properties
pursuant to any applicable Environmental Laws, (ii) all other Environmental
Claims, and (iii) any environmental or similar condition on any real property
adjoining or in the vicinity of the Property of the Borrower or any of its
Subsidiaries that could reasonably be anticipated to cause such Property or any
part thereof to be subject to any restrictions on the ownership, occupancy,
transferability or use of such Property under any Environmental Laws.
81
7.12 Environmental Laws. Conduct its operations and keep and maintain all of
------------------
its property in compliance with all Environmental Laws.
7.13 Financial Covenants. Not, on a consolidated basis for the Borrower and
-------------------
its Subsidiaries:
(a) Permit, at any time, its Tangible Net Worth to be less than $612,000,000
plus 85% of the Gross Offering Proceeds received by the Borrower after
November 17, 1997.
(b) Permit the ratio of (i) Net Operating Income of Unencumbered Real Property
in any quarter to (ii) Unsecured Interest Expense for such quarter to be
less than 2.00 to 1.00.
(c) Permit, at any time, the ratio of (i) aggregate Indebtedness to (ii) of
Total Assets to exceed 0.50 to 1.00.
(d) As at the end of any fiscal quarter, permit the ratio of EBITDA to Debt
Service for the preceding four fiscal quarters to be less than 2.00 to
1.00.
(e) Permit the ratio of (i) Aggregate Distributions to Shareholders for any
consecutive four (4) fiscal quarter to (ii) FFO for such four (4) fiscal
quarters to exceed 0.95 to 1.00 or, if greater, the ratio equal to (y) the
minimum Aggregate Distributions to Shareholders required for the Borrower
to qualify for treatment as a real estate investment trust under Section
856 of the Internal Revenue Code.
(f) At any time, permit the number of Development Units to exceed 20% of the
aggregate number of Development Units and completed units (that is, housing
units which are no longer Development Units) of the Borrower, its
Subsidiaries and any Person in which the Borrower is a general partner,
joint venturer or otherwise fully liable for the Indebtedness of the owner.
(g) Permit, at any time, the ratio of (i) the Market Value of Unencumbered
Property to (ii)Unsecured Debt to be less than 2.00 to 1.00.
7.13 Continuing Guaranties; Further Assurances. Promptly upon a Person
-----------------------------------------
becoming a Material Subsidiary, cause such Material Subsidiary to execute and
deliver to the Bank a Continuing Guaranty together with resolutions, incumbency
certificates, by laws, articles of incorporation, and opinions relating to such
Material Subsidiary substantially as contemplated by Sections 4.1(a)(i), (ii),
-------------------------
(iii), (iv), (v), and (vi) above with respect to Continuing Guaranties delivered
--------------------------
in connection with this Agreement; and execute and deliver or cause to be
executed and delivered all other instruments, and perform or cause to be
performed such other acts, as the Bank may reasonably deem necessary or
desirable to confirm and secure to the Bank all rights and remedies conferred
upon it by this Agreement and all other Loan Documents.
8. EVENTS OF DEFAULT. Any one or more of the following described events shall
------------------
constitute an event of default (an "Event of Default") under this Agreement:
----------------
8.1 Non-Payment. The Borrower shall fail to pay any payment of principal or
-----------
interest or any other sum referred to in this Agreement when due and any such
failure shall continue for more than five (5) Business Days after written notice
from the Bank to the Borrower..
8.2 Performance Under This and Other Agreements. The Borrower or any
-------------------------------------------
Guarantor shall fail in any material respect to perform or observe any other
term, covenant or agreement contained in this Agreement, in any other Loan
Document, or in any document, instrument or agreement evidencing or relating to
any other Indebtedness of the Borrower or any Guarantor to the Bank, and any
such failure shall continue for more than 10 days after written notice from the
Bank to the Borrower of the existence and character of such failure.
82
8.3 Other Indebtedness. The Borrower or any of its Subsidiaries shall (i)
------------------
fail to pay when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) any Indebtedness in an aggregate principal
amount (including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than $5,000,000 and such failure shall
continue after the applicable grace or notice period, if any, specified in the
document relating thereto; or (ii) shall fail to perform or observe any other
condition or covenant, or any other event shall occur or condition exist
(irrespective of whether such non-performance or non-observance shall be waived
or otherwise excused by the holder or holders of such Indebtedness), under any
agreement or instrument relating to any such Indebtedness, if the effect of such
failure, event or condition is to cause, or to permit the holder or holders of
such Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause such Indebtedness in an aggregate principal amount of
more than $5,000,000 to be declared to be due and payable prior to its stated
maturity, or cash collateral in respect thereof to be demanded.
8.4 Representations and Warranties; Financial Statements. Any representation
----------------------------------------------------
or warranty made by the Borrower or any Guarantor under or in connection with
this Agreement or any financial statement to be provided under this Agreement
shall prove to have been incorrect in any material respect when made or given or
when deemed to have been made or given.
8.5 Insolvency. (a) The Borrower or any of its Subsidiaries shall: (i)
----------
become insolvent or be unable to pay its debts as they mature; (ii) make an
assignment for the benefit of creditors or to an agent authorized to liquidate
any substantial amount of its properties or assets; (iii) file a voluntary
petition in bankruptcy or seek reorganization or to effect a plan or other
arrangement with creditors; (iv) file an answer admitting the material
allegations of an involuntary petition relating to bankruptcy or reorganization
or join in any such petition; (v) become or be adjudicated a bankrupt; or (vi)
apply for or consent to the appointment of, or consent that an order be made,
appointing any receiver, custodian or trustee for itself or any of its
properties, assets or affairs; or (b) with respect to the Borrower or, any of
its Subsidiaries, any receiver, custodian or trustee shall have been appointed
for all or a substantial part of its properties, assets or affairs and shall not
be discharged within 60 days after the date of such appointment.
8.6 Suspension. The Borrower or any of its Subsidiaries shall voluntarily
----------
suspend the transaction of business or allow to be suspended, terminated,
revoked or expired any permit, license or approval of any governmental body
necessary to conduct the Borrower's or a Subsidiary's business as now conducted.
9. REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default described
--------------------
in Section 8.5 above, automatically and, upon the occurrence of any other Event
-----------
of Default, at the sole election of the Bank, without demand or notice, all of
which are hereby waived:
9.1 Acceleration. All of the Obligations (including, without limitation, the
------------
obligation to reimburse the Bank for future Drawings under Letters of Credit)
shall be immediately due and payable, whether or not otherwise due and payable.
Any amount paid to the Bank on account of undrawn amounts under Letters of
Credit that is not thereafter applied to reimburse the Bank for Drawings shall
be repaid to the Borrower without interest upon return to the Bank and
termination of the undrawn Letter(s) of Credit.
9.2 Non-Exclusivity of Remedies. Exercise one or more of the Bank's rights
---------------------------
set forth herein or seek such other rights or pursue such other remedies as may
be provided by law, in equity or in any other agreement now existing or
hereafter entered into between the Borrower and the Bank, or otherwise.
83
10. WAIVER OF JURY TRIAL. THE BORROWER AND THE BANK EACH WAIVE THEIR
--------------------
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
THE BORROWER AND THE BANK EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION
SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING,
THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS
WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
11. MISCELLANEOUS PROVISIONS
------------------------
11.1 Default Interest Rate. The Borrower shall pay to the Bank interest
---------------------
on any Indebtedness or amount payable under this Agreement, from the date that
such Indebtedness or amount became due or was demanded to be due until paid in
full, at the Default Interest Rate. If any regularly scheduled payment of
principal and/or interest (exclusive of the final payment upon maturity), or any
portion thereof, under this Agreement is not paid within ten (10) calendar days
after it is due, a late payment charge equal to five percent (5%) of such past
due payment may be assessed and shall be immediately payable.
11.2 Notices. Any notices required or permitted to be given under
-------
this Agreement shall be in writing and shall be delivered by hand, by prepaid
telegram, by telecopy or by registered or certified U.S. mail, return receipt
requested (postage prepaid), to the respective notice addresses set forth below
or to such other addresses as the parties may provide to one another in
accordance with this Section. Such notices and other communications shall, if
sent by mail in accordance with this Section, be deemed given two Business Days
after deposit in the U.S. mail, on the date sent if by telecopy and, if sent by
any other method, shall be effective only if and when received by the addressee.
All notices and other communications shall be addressed as follows:
If to the Bank: If to the Borrower:
Sanwa Bank California BRE Properties, Inc.
Xxxxxxx Oaks CBC One Xxxxxxxxxx Street
15165 Ventura Blvd., Suite 000 Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxx, XX 00000 Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx Attn: XxXxx X. Xxxxxxx
11.3 Reliance. Each warranty, representation, covenant and agreement
--------
contained in this Agreement shall be conclusively presumed to have been relied
upon by the Bank regardless of any investigation made or information possessed
by the Bank and shall be cumulative and in addition to any other warranties,
representations, covenants or agreements which the Borrower shall now or
hereafter give, or cause to be given, to the Bank.
84
11.4 Attorneys' Fees. The Borrower agrees to pay or reimburse the Bank
---------------
within five Business Days after demand for (i) all costs and expenses incurred
by the Bank in connection with the development, preparation, delivery,
administration and execution of any amendment, supplement, waiver or
modification to (in each case, whether or not consummated) this Agreement, any
other Loan Document and any other documents prepared in connection therewith,
and the consummation of the transactions contemplated hereby and thereby,
including the reasonable attorneys' fees and costs incurred by Bank with respect
thereto; and (ii) all costs and expenses incurred by the Bank in connection with
the enforcement, attempted enforcement, or preservation of any rights or
remedies (including in connection with any restructuring regarding the
obligations and including in any insolvency proceeding or appellate proceeding)
under this Agreement, any other Loan Document, and any such other documents,
including reasonable attorneys' fees incurred by the Bank; and (iii) in the
event of any action in relation to this Agreement or any document, instrument or
agreement executed with respect to, evidencing or securing the Obligations, the
prevailing party, in addition to all other sums to which it may be entitled,
shall be entitled to reasonable attorneys' fees.
11.5 Waiver. Neither the failure nor delay by the Bank in exercising any
------
right hereunder or under any document, instrument or agreement mentioned herein
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right hereunder or under any document, instrument or agreement mentioned
herein preclude other or further exercise thereof or the exercise of any other
right; nor shall any waiver of any right or default hereunder or under any other
document, instrument or agreement mentioned herein constitute a waiver of any
other right or default or constitute a waiver of any other default of the same
or any other term or provision.
11.6 Conflicting Provisions. To the extent that any of the terms or
----------------------
provisions contained in this Agreement are inconsistent with those contained in
any other document, instrument or agreement executed pursuant hereto, the terms
and provisions contained herein shall control. Otherwise, such provisions shall
be considered cumulative.
11.7 Binding Effect; Assignment. This Agreement shall be binding upon and
--------------------------
inure to the benefit of the Borrower and the Bank and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the Bank's prior
written consent. The Bank may sell, assign or grant participations in all or
any portion of its rights and benefits hereunder. The Borrower agrees that, in
connection with any such sale, grant or assignment, the Bank may deliver to the
prospective buyer, participant or assignee financial statements and other
relevant information relating to the Borrower.
11.8 Jurisdiction. THIS AGREEMENT, ANY NOTES ISSUED HEREUNDER, AND ANY
------------
DOCUMENTS, INSTRUMENTS OR AGREEMENTS MENTIONED OR REFERRED TO HEREIN SHALL BE
GOVERNED BY AND CONSTRUED ACCORDING TO THE LAWS OF THE STATE OF CALIFORNIA
WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES, TO THE JURISDICTION OF WHOSE
COURTS THE PARTIES HEREBY SUBMIT.
11.9 Counterparts. This Agreement may be executed in one or more
------------
counterparts and each set of counterparts signed by all the parties shall
constitute one original.
11.10 Severability. If any provision of this Agreement shall be
------------
unenforceable for any reason, then the remaining provisions of this Agreement
shall be enforced without regard to such provision.
11.11 Headings. The headings set forth herein are solely for the purpose
--------
of identification and have no legal significance.
11.12 Entire Agreement. This Agreement and the other Loan Documents shall
----------------
constitute the entire and complete understanding of the parties with respect to
the transactions contemplated hereunder. All previous
85
conversations, memoranda and writings between the parties or pertaining to the
transactions contemplated hereunder that are not incorporated or referenced in
this Agreement or the other Loan Documents are superseded hereby
86
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
as of the date first hereinabove written.
BANK: BORROWER:
SANWA BANK CALIFORNIA BRE PROPERTIES, INC.
By: /s/ Xxxxx X. XxXxxxxx
----------------------------
Title: President
By: /s/ XxXxx Xxxxxxx
-----------------------------
Title: Executive Vice President
and Secretary
87
