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EXHIBIT 10.17
LOAN AGREEMENT
This Loan Agreement ("THIS AGREEMENT") is entered into as of the 24th day
of October, 2000, by and between IRVINE APARTMENT COMMUNITIES, L.P., a Delaware
limited partnership ("LENDER") and THE IRVINE COMPANY, a Delaware corporation
("BORROWER").
RECITALS
A. Lender desires to loan to borrower and Borrower desires to borrow from
Lender certain funds in accordance with the terms and conditions set forth
herein (the "LOAN").
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals and subject to
the terms and conditions set forth below, Lender and Borrower hereby agree as
follows:
1. TERMS OF LOAN
(a) Agreement to Lend and Borrow. Subject to the terms and
conditions in this Agreement, Lender agrees to lend to Borrower, from time
to time, at Borrower's request, funds in an amount no less than Five
Hundred Thousand Dollars ($500,000) up to an aggregate amount outstanding
at any time not in excess of Two Hundred Million Dollars ($200,000,000)
(the "MAXIMUM LOAN AMOUNT"). Each individual borrowing made under the
terms of this Agreement shall hereinafter be referred to as a "TRANCHE" in
the singular and "Tranches" in the plural, and each such Tranche may be
repaid and reborrowed without premium or penalty.
(b) Promissory Note. All Tranches borrowed pursuant to the terms of
this Agreement shall be evidenced by a single Promissory Note executed by
Borrower in the form attached hereto as Exhibit A (the "PROMISSORY NOTE").
The Promissory Note shall contain a schedule upon which the date, amount,
loan type (Fixed Rate or Variable Rate, both as defined below) index,
margin, interest rate and payment method of each Tranche shall be entered.
(c) Interest. At Borrower's option, each Tranche shall bear interest
on its unpaid principal amount from the date made until paid in full,
compounded monthly:
(i) at a fixed rate as quoted by Lender ("FIXED RATE"); or
(ii) at a variable rate as quoted by Lender ("VARIABLE RATE").
In no event will the Variable Rate be less than the interest paid to
Lender on its overnight repurchase agreements entered into with Bank
of America, N.A, or Xxxxx Fargo Bank, N.A., which repurchase
agreements are secured by United States Treasury or Agency debt
instruments, or the Liquid Institutional Reserve Money Market Fund
offered by Xxxxx Xxxxxx, Inc.
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If Borrower does not notify Lender, concurrently with each borrowing under this
Agreement, of its election of a Fixed Rate or Variable Rate, the Loan shall bear
interest at the Variable Rate. Notwithstanding the above, and in any event, the
interest rate shall not be lower than the applicable federal rate (short term
monthly rate) as determined by the Internal Revenue Service, as adjusted from
time to time (as defined in 1986 Internal Revenue Code Section 1274(d), as
amended from time to time).
(d) Payments. Unless sooner accelerated pursuant to the terms
of this Agreement:
(i) Monthly Interest Payments. Interest accrued on each
Tranche as of the last day of each calendar month shall be due
and payable on the fifth business day of the following month,
or, with Lender's consent, accrued and compounded until the
principal balance of such Tranche is repaid, at which time
such accrued and compounded interest shall be due and payable;
and
(ii) Principal Payments: the entire unpaid principal
amount of the Loan and all accrued interest thereon shall be
due and payable five (5) business days after a demand
therefore by Lender.
(e) Expiration of Agreement. This Agreement shall expire on
June 30, 2003.
2. COVENANTS AND CONTINUING AGREEMENTS
During the term of this Agreement, and thereafter for so long as there are
any amounts outstanding hereunder to Borrower, Borrower covenants that it shall:
(a) Business and Existence. Preserve and maintain its separate
corporate existence and all rights, privileges, and franchises in
connection therewith.
(b) Other Information. With reasonable promptness, deliver to Lender
such other information and data as from time to time may be reasonably
requested by Lender.
(c) Unused Corporate Line Capacity. At all times that principal is
outstanding under either or both of the Term Note and/or the Revolving
Note, reserve available capacity under its unsecured corporate facilities
in an amount sufficient to pay in full such principal amount outstanding
at any time and from time to time.
3. REPRESENTATIONS AND WARRANTIES
Lender and Borrower hereby represent and warrant that this Agreement, and
in Borrower's case the Revolving Note and Term Note executed of even date
herewith, have been duly authorized, executed and delivered by Lender and
Borrower, respectively.
4. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
(a) Events of Default. The occurrence of any one or more of the
following events shall constitute an "EVENT OF DEFAULT":
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(1) Non-payment. The failure of Borrower to pay any
installment of principal or interest owing hereunder within 10
business days after such payment is due.
(2) Insolvency, etc. Borrower shall (a) apply for, suffer the
appointment of or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property, (b) admit in
writing its inability, or be generally unable, to pay its debts as
they become due or cease operations of its present business, (c)
make a general assignment for the benefit of creditors, (d) commence
a voluntary case under the federal bankruptcy laws (as now or
hereafter in effect), (e) be adjudicated a bankrupt or insolvent,
(f) file a petition seeking to take advantage of any other law
providing for the relief of debtors, (g) acquiesce to, or fail to
have dismissed, within thirty (30) days, any petition filed against
it in any involuntary case under such bankruptcy laws, or (h) take
any action for the purpose of effecting any of the foregoing.
(b) Acceleration of the Obligations. Upon the occurrence of any
Event of Default pursuant to this Agreement, all advances outstanding
under this Agreement shall be immediately due and payable, without notice
or demand by Lender. Borrower shall forthwith pay to Lender the entire
principal amount together with any interest accrued thereon.
5. MISCELLANEOUS
(a) Modification of Agreement. This Agreement may not be modified,
altered or amended, except by an agreement in writing signed by each of
the parties hereto.
(b) Termination of Agreement. This Agreement may be terminated by
either party at any time in a writing delivered by the party terminating
this Agreement to the other party. Upon any such termination, the entire
unpaid amount of principal and accrued interest under the Revolving Note
and the Term Note shall be immediately due and payable, interest on such
entire amount accruing thereafter at the Note Rate as set forth in the
Revolving Note or the Term Note, as applicable.
(c) Successors and Assigns. This Agreement shall inure to the
benefit of the parties hereto, their successors and assigns; provided,
however, that neither party hereto may make an assignment of its
obligations or liabilities under this Agreement without the prior written
consent of the other party.
(d) Execution in Counterparts. This Agreement may be executed in
counterparts, each of which when so executed and delivered shall be deemed
to be an original and all of which counterparts taken together shall
constitute one and the same instrument.
(e) Entire Agreement. This Agreement, together with all other
instruments, agreements and certificates executed by the parties in
connection herewith, embody the entire understanding and agreement between
the parties hereto and thereto with respect to the subject matter hereof
and thereof, and supersede all prior agreements, understandings and
inducements, whether express or implied, oral or written.
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(f) Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of California
excluding any laws that require the application of another jurisdiction's
laws.
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IN WITNESS WHEREOF, Lender and Borrower have duly executed this Agreement
as of the day and year first written above.
BORROWER: THE IRVINE COMPANY,
a Delaware corporation
By:
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Xxxx X. Xxx,
Senior Vice President, Capital Markets &
Chief Investment Officer
By:
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Xxxxx X. Xxxxxx,
Vice President, Corporate Finance
LENDER: IRVINE APARTMENT COMMUNITIES, L.P.,
a Delaware limited partnership
By: Irvine Apartment Communities, LLC,
a Delaware limited liability company
By: The Irvine Company,
a Delaware corporation
By:
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Xxxxxxxx X. Xxxxxx,
President
By:
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Xxxxx X. Xxxxx,
Executive Vice President
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EXHIBIT A
FORM OF PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned, THE IRVINE COMPANY, a Delaware
corporation ("BORROWER"), hereby promises to pay to IRVINE APARTMENT
COMMUNITIES, L.P., a Delaware limited partnership ("LENDER"), or its order, in
lawful money of the United States of America, the principal sum of the Loan
Amount or Loan Amounts, shown in Column B of SCHEDULE 1, attached hereto and
incorporated herein by this reference, together with interest on the unpaid
principal balance of this Note from the date hereof until paid in full at a rate
of interest equal to the Interest Rate or Interest Rates shown in Column D of
SCHEDULE 1, but in no event at a rate higher than the maximum permitted by law
(the "NOTE RATE"). This Note is issued pursuant to that certain Loan Agreement
dated as of October 24, 2000, by and between Lender and Borrower, and all of the
terms, covenants and conditions therein, as may be amended from time to time
(the "LOAN AGREEMENT"). All capitalized terms herein, unless otherwise
specifically defined, shall have the meanings given them by the Loan Agreement.
This Note shall mature and all payments of principal and accrued but
unpaid interest shall be due and payable five (5) business days after a demand
therefore by Lender.
It shall be an event of default (i) if Borrower fails to make any payment
under this Note or (ii) if Borrower becomes insolvent, commences a bankruptcy
case or makes an assignment for the benefit of creditors. Upon the occurrence of
an event of default, the entire unpaid amount of principal and accrued interest
hereunder may be declared by Lender to be immediately due and payable, interest
on such entire amount accruing thereafter at the Note Rate set forth above.
This Note may be prepaid, in part or in full by Borrower at any time,
without penalty, by payment of all principal and interest accrued thereon to the
date of prepayment, together with any other sums owed to Lender hereunder. Any
partial prepayment shall be applied first, to any sums other than principal and
interest owed to Lender hereunder, second, to accrued, but unpaid interest and
the balance, if any, to the principal amount of this Note.
The undersigned hereby waives presentment, notice of nonpayment or
dishonor, protest, notice of protest, demand and all other notices in connection
with the delivery, acceptance, performance, default or enforcement of this Note.
The holder hereof shall not be deemed, by any act of omission or commission, to
have waived any of its rights or remedies hereunder unless such waiver is in
writing and signed by such holder and then only to the extent specifically set
forth in writing. A waiver with reference to one event shall not be construed as
continuing or as a bar to or waiver of any right of remedy as to a subsequent
event. No delay or omission of the holder hereof to exercise any right, whether
before or after a default hereunder, shall impair any such right or shall be
construed to be a waiver of any right or default, and the acceptance at any time
by the holder hereof of any past due amounts shall not be deemed to be a waiver
of the right to require prompt payment when due of any other amounts then or
thereafter due and payable.
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The undersigned promises to pay costs of collection, including attorneys'
fees, whether or not suit is filed, upon the nonperformance by the undersigned
of any duty or obligation arising out of or in connection with this Note.
Time is of the essence hereof. Upon the occurrence of any event of default
hereunder, the holder hereof may exercise all rights and remedies provided for
herein and by law including, but not limited to, the right to enforce immediate
payment in full of this Note.
The remedies of the holder hereof as provided herein or at law or in
equity, shall be cumulative and concurrent, and may be pursued singly,
successively, or together at the sole discretion of the holder hereof, and may
be exercised as often as occasion therefore shall occur; and the failure to
exercise any such right or remedy shall in no event be construed as a waiver or
release thereof.
Whenever used, the words "undersigned" and "Lender" shall be deemed to
include the respective successors and assigns of each.
This Note has been delivered to and accepted by Lender in Newport Beach,
California. This Note shall be governed and construed in accordance with and
pursuant to the laws of the State of California.
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IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby,
has duly executed this Note the day and year first above written.
THE IRVINE COMPANY,
a Delaware 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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SCHEDULE 1
TO
PROMISSORY NOTE
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F COLUMN G
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Payment
Loan Type Method
Date of Loan (Fixed or Interest (Paid or
Loan Amount Variable) Index Margin Rate Accrued)
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