Exhibit 10.36
SECOND AMENDMENT TO LOAN AGREEMENT
[$18,000,000]
THIS SECOND AMENDMENT TO LOAN AGREEMENT (this "Amendment"), is dated as
of November 20, 1996 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 (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 Bank of America Line of Credit, in its entirety, with the
following revised definition therefor:
"BANK OF AMERICA LINE OF CREDIT" means that certain unsecured
line of credit in the maximum amount of $120,000,000 provided to
Borrower by Bank of America, NT&SA.
2.2. A new Section 5.14 of the Loan Agreement shall be added thereto and
shall provide, in its entirety, as follows:
5.14 S&P RATING.
Borrower will use its best efforts to obtain on or before
December 31, 1997, and shall thereafter always maintain in effect,
an investment grade rating for the long-term unsecured debt of
Borrower from Standard & Poor's Rating Group or Xxxxx Investor
Services. Borrower shall pay all of the fees, costs and expenses
incurred in connection with obtaining and maintaining such rating.
2.3. On and after the occurrence of the Unsecured Conversion as
described in Paragraph 3 below, (i) any Secured Facilities or Core Secured
Facilities shall thereafter constitute Facilities under the Loan Agreement,
and (ii) any provision of the Loan Agreement which is made subject to any term
or provision contained in any of the Deeds of Trust shall be disregarded.
3. Borrower and Lender understand, acknowledge and agree that for the
purposes of Section 9.2.C of the Loan Agreement, Lender has agreed to accept
in satisfaction thereof, a rating of BBB+ from Duff & Xxxxxx and that
therefore, Borrower has satisfied the conditions precedent set forth in
Section 9.2 of the Loan Agreement and immediately prior to the execution and
delivery of this Amendment, Lender has reconveyed the Secured Facilities as
collateral for the Loan, thereby converting the Loan from a fully recourse
secured Loan into a fully recourse unsecured Loan (an "Unsecured
Conversion") in accordance with the terms of Section 9.2 of the Loan
Agreement. Borrower hereby (i) reaffirms its understandings, agreements and
acknowledgments set forth in Sections 9.3 and 9.4 of the Loan Agreement, (ii)
agrees that such Unsecured Conversion shall not impair, reduce, satisfy, or
otherwise limit any of Borrower's obligations under the Loan Documents and/or
any of Lender's rights or remedies with respect thereto, and all such
obligations, rights and remedies shall remain in full force and effect, and
(iii) as of the execution and delivery hereof, the Loan shall be an unsecured
Loan and the California one-action and antideficiency laws relating to real
property secured transactions (including, without limitation, Sections 580a,
580b, 580d, and 726 of the California Code of Civil Procedure) shall not
apply to the Loan or be available to Borrower as a defense or right with
respect to the Loan or with respect to an Unsecured Conversion of the Loan.
4. 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.
4.1. 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.
4.2. Borrower has full power, legal capacity and authority to
execute and deliver this Amendment.
4.3. This Amendment has been duly authorized, executed and
delivered by Borrower.
5. NO OTHER MODIFICATIONS. Except as provided herein, the Loan Agreement
shall remain unchanged and in full force and effect.
6. GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the laws of the State of California.
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7. 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 way be affected, impaired or invalidated thereby.
8. 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.
9. 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: _____________________________________
Name: _____________________________________
Title: _____________________________________
By: _____________________________________
Name: _____________________________________
Title: _____________________________________
LENDER:
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: _____________________________________
Its: _____________________________________
