FOURTH AMENDMENT TO LOAN AGREEMENT
[$18,000,000]
THIS FOURTH AMENDMENT TO LOAN AGREEMENT (this "Amendment"), is dated as of
June 30, 1997 by and between THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New
Jersey corporation ("Lender"), and BRE PROPERTIES, INC., a Maryland corporation
("Borrower"), as ultimate successor-in-interest by merger to Real Estate
Investment Trust of California, a California real estate investment trust
("Original Borrower").
RECITALS:
A. Lender has made a loan (the "Loan") to Original Borrower in the
original principal amount of $18,000,000, which loan is governed by that certain
Loan Agreement dated as of July 7, 1995 by and between Original Borrower and
Lender, as amended by that certain First Amendment to Loan Agreement dated as of
April 30, 1996, as further amended by that certain Second Amendment to Loan
Agreement dated as of November 20, 1996, as further amended by that certain
Third Amendment to Loan Agreement dated as of February 25, 1997 (collectively,
the "Loan Agreement"), and evidenced by that certain Promissory Note dated as of
July 7, 1995 executed by Original Borrower in favor of Lender (the "Note").
B. Pursuant to a series of mergers, Original Borrower merged into Real
Estate Investment Trust of Maryland, a Maryland real estate investment trust,
which in turn merged into BRE Properties Inc., a Delaware corporation, which in
turn merged into Borrower (which was then and formerly known as BRE Maryland,
Inc., a Maryland corporation).
C. Pursuant to the terms of that certain Assumption Agreement dated as of
April 30, 1996 by and between Borrower and Lender, Borrower absolutely and
irrevocably assumed the Loan, the Loan Agreement, the Note and the other Loan
Documents and the obligations of Original Borrower thereunder.
D. Borrower and Lender have agreed to modify and amend the Loan Agreement
as provided herein.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, Borrower and Lender hereby agree as follows:
AGREEMENT:
1. DEFINITIONS. All capitalized terms used in this Amendment, unless
otherwise defined, shall have the meanings given thereto in the Loan Agreement.
2. AMENDMENTS TO LOAN AGREEMENT. Borrower and Lender agree that the Loan
Agreement shall be amended as provided in this Paragraph 2.
2.1. Section 1.1 of the Loan Agreement shall be amended by replacing the
definition of Approved Indebtedness, in its entirety, with the following revised
definition therefor:
"APPROVED INDEBTEDNESS" means collectively, (i) this Loan, (ii)
the 525 Prudential Loan, (iii) the Sanwa Line of Credit (including
amounts borrowed thereunder after the Closing Date in compliance with
the terms hereof), (iv) the PruExpress Loans, (v) the Tango Loan,
(vi) the Bank of America Line of Credit (including amounts borrowed
thereunder after the Closing Date in compliance with the terms
hereof), (vii) the Public Unsecured BRE Debt, (viii) debt incurred in
the ordinary course of business to acquire goods, supplies, services
or merchandise on normal trade credit, (ix) surety bonds which are
obtained in the ordinary course of business, (x) Indebtedness secured
by New Purchase Money Liens, (xi) Existing BRE Secured Debt, and
(xii) Capital Lease Obligations in an amount not to exceed, at any
time, $1,000,000; provided, however, that in any and all events, such
Approved Indebtedness shall be subject to, and included within the
calculations relating to, the financial covenants set forth in
Section 6.9 hereof.
2.2. Section 1.1 of the Loan Agreement shall be amended by replacing the
definition of Indebtedness, in its entirety, with the following revised
definition therefor:
"INDEBTEDNESS" at any date of determination means: (i) all
obligations of Borrower and the Consolidated Partnership (including,
without limitation, all indebtedness of Borrower to Lender and all
Approved Indebtedness) which in accordance with GAAP would be shown on
the balance sheet of Borrower and/or the Consolidated Partnership as a
liability (including, without limitation, obligations for borrowed
money and for the deferred purchase price of property or services,
trade debt payable, accruals and other liabilities, and obligations
evidenced by bonds, debentures, notes or other similar instruments);
(ii) all Capitalized Lease Obligations; (iii) all Contingent
Obligations of Borrower and or the Consolidated Partnership in respect
of, or obligations to purchase or otherwise acquire or to assure
payment of, Indebtedness of others; and (iv) all Indebtedness of
others secured by any Lien upon property owned by Borrower or the
Consolidated Partnership, whether or not assumed.
2.3. Section 1.1 of the Loan Agreement shall be amended by adding the
following definition to be inserted therein in alphabetical order:
"PUBLIC UNSECURED BRE DEBT" means the indebtedness evidenced by
the unsecured debt securities issued by Borrower from time to time
provided that the maximum principal amount of such Public Unsecured
BRE Debt shall at no time exceed $150,000,000.
2.4. Clause (y) of the parenthetical found in the second grammatical
sentence of Section 6.1 of the Loan Agreement shall be amended, in its entirety,
to provide as follows:
(y) forward commitments to acquire new construction projects which
will be at least 80% leased pursuant to market rate leases as of the
date of acquisition thereof and the cost of which do not
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exceed $30,000,000 per project; provided, however, that at no time
shall the aggregate amount of such commitments exceed more than
twenty-five percent (25%) of Tangible Net Worth)
2.5. Section 7.2.A of the Loan Agreement shall be amended, in its entirety,
to provide as follows:
A. FAILURE TO MAKE PAYMENTS. Failure of Borrower or the
Consolidated Partnership to pay when due any principal or interest on
any Indebtedness (including, without limitation, the Tango Loan, the
Sanwa Line of Credit, the Bank of America Line of Credit, the Public
Unsecured BRE Debt, and/or the Existing BRE Secured Debt) (other than
Indebtedness referred to in Section 7.1 and Section 7.2.C) or
Contingent Obligation; or
2.6. Section 7.12.A of the Loan Agreement shall be amended, in its
entirety, to provide as follows:
A. Any Person shall have (i) acquired beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934) directly or
indirectly, of shares or securities of Borrower (or other securities
convertible into such securities), or (ii) acquired by contract or
otherwise, or shall have entered into a contract or arrangement which
upon consummation will result in its acquisition of or control over
shares or securities of Borrower (or other securities convertible into
such securities), in either case, (x) representing twenty percent
(20%) or more of the outstanding shares or securities of Borrower, or
(y) representing ten percent (10%) or more of the outstanding shares
or securities of Borrower and resulting in any change of the board of
directors of Borrower and/or any change in the management of Borrower
or any of its assets; or
3. REPRESENTATIONS AND WARRANTIES. Borrower makes the following
representations and warranties to Lender all of which are material and are made
to induce Lender to enter into this Amendment.
3.1. All representations and warranties in the Loan Documents were
true, accurate and complete in every material respect as of the date
made and are true, accurate and complete in every respect as of the
date hereof, and do not fail to disclose any material fact necessary
to make the representations not misleading.
3.2. Borrower has full power, legal capacity and authority to execute
and deliver this Amendment.
3.3. This Amendment has been duly authorized, executed and delivered
by Borrower.
4. NO OTHER MODIFICATIONS. Except as provided herein, the Loan Agreement
shall remain unchanged and in full force and effect.
5. GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the laws of the State of California.
6. SEVERABILITY. If any term, provision, covenant or condition of this
Amendment or any application thereof should be held by a court of competent
jurisdiction to be invalid, void or unenforceable, all terms, provisions,
covenants and conditions hereof and all applications thereof not held invalid,
void or unenforceable shall continue in full force and effect and shall in no
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way be affected, impaired or invalidated thereby.
7. SUCCESSOR AND ASSIGNS. The provisions of this Amendment shall be
binding upon and inure solely to the benefit of Lender and Borrower, and their
respective heirs, legal representatives, successors and assigns.
8. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which counterparts, when so executed and delivered, shall be deemed to be an
original, and all of which counterparts, taken together, shall constitute but
one and the same Amendment.
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IN WITNESS WHEREOF, Borrower and Lender have caused this Amendment to be
executed as of the day and year first above written.
BORROWER:
BRE PROPERTIES, INC., a Maryland corporation
By:
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Name:
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Title:
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By:
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Name:
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Title:
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LENDER:
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By:
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Its:
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