Exhibit 10.27
SECOND MODIFICATION AGREEMENT
REGARDING UNSECURED LINE OF CREDIT
TO
BRE PROPERTIES, INC.
MADE BY VARIOUS
FINANCIAL INSTITUTIONS
WITH
BANK OF AMERICA NT & SA
AS AGENT
TABLE OF CONTENTS
PAGE
CERTAIN DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1. LINE OF CREDIT AMOUNT AND TERMS . . . . . . . . . . . . . . . . . . . 5
1.1 Line of Credit Amount. . . . . . . . . . . . . . . . . . . . . . 5
1.2 Availability Period. . . . . . . . . . . . . . . . . . . . . . . 6
1.3 Interest Rate. . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.4 Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . 6
2. FEES, EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.2 Expenses and Costs . . . . . . . . . . . . . . . . . . . . . . . 7
3. DISBURSEMENTS, PAYMENTS AND COSTS . . . . . . . . . . . . . . . . . . 7
3.1 Requests for Credit. . . . . . . . . . . . . . . . . . . . . . . 7
3.2 Disbursement and Payment Record. . . . . . . . . . . . . . . . . 8
3.3 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.4 Banking Days . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4. CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.1 Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.2 Governing Documents; Good Standing Certificates. . . . . . . . . 9
4.3 Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.4 Payment of Fees. . . . . . . . . . . . . . . . . . . . . . . . . 9
4.5 Other Items. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . 9
5.1 Organization of the Borrower; Good Standing. . . . . . . . . . . 9
5.2 Authorization; Enforceable Agreement . . . . . . . . . . . . . . 9
5.3 Financial Information. . . . . . . . . . . . . . . . . . . . . . 9
5.4 Lawsuits . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
5.5 Title to Assets. . . . . . . . . . . . . . . . . . . . . . . . .10
5.6 Permits, Franchises. . . . . . . . . . . . . . . . . . . . . . .11
5.7 Income Tax Returns . . . . . . . . . . . . . . . . . . . . . . .11
5.8 ERISA Plans. . . . . . . . . . . . . . . . . . . . . . . . . . .11
5.9 Other Obligations. . . . . . . . . . . . . . . . . . . . . . . .11
5.10 Event of Default . . . . . . . . . . . . . . . . . . . . . . . .11
5.11 Status as a REIT . . . . . . . . . . . . . . . . . . . . . . . .12
6. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
6.1 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . .12
6.2 Financial Information. . . . . . . . . . . . . . . . . . . . . .12
6.3 Other Information. . . . . . . . . . . . . . . . . . . . . . . .13
6.4 Financial Covenants. . . . . . . . . . . . . . . . . . . . . . .14
6.5 Taxes and Other Liabilities. . . . . . . . . . . . . . . . . . .16
6.6 Notices to the Bank. . . . . . . . . . . . . . . . . . . . . . .16
6.7 Audits; Books and Records. . . . . . . . . . . . . . . . . . . .16
6.8 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . .17
6.9 Preservation of Rights . . . . . . . . . . . . . . . . . . . . .17
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TABLE OF CONTENTS
(Continued) PAGE
6.10 Maintenance of Properties. . . . . . . . . . . . . . . . . . . .17
6.11 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . .17
6.12 ERISA Plans. . . . . . . . . . . . . . . . . . . . . . . . . . .17
6.13 Additional Negative Covenants. . . . . . . . . . . . . . . . . .17
6.14 Continued Status as a REIT; Prohibited Transactions. . . . . . .18
6.15 NYSE Listed Company. . . . . . . . . . . . . . . . . . . . . . .18
6.16 Conduct of Business. . . . . . . . . . . . . . . . . . . . . . .18
6.17 Cooperation. . . . . . . . . . . . . . . . . . . . . . . . . . .19
7. COLLATERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
8. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
8.1 Failure to Pay . . . . . . . . . . . . . . . . . . . . . . . . .19
8.2 False Information. . . . . . . . . . . . . . . . . . . . . . . .19
8.3 Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . .19
8.4 Receivers. . . . . . . . . . . . . . . . . . . . . . . . . . . .19
8.5 Lawsuits . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
8.6 Judgments. . . . . . . . . . . . . . . . . . . . . . . . . . . .20
8.7 ERISA Plans. . . . . . . . . . . . . . . . . . . . . . . . . . .20
8.8 Government Action. . . . . . . . . . . . . . . . . . . . . . . .20
8.9 Material Adverse Change. . . . . . . . . . . . . . . . . . . . .20
8.10 Other Breach Under This Agreement or Other Loan Documents. . . .20
8.11 Cross-Default. . . . . . . . . . . . . . . . . . . . . . . . . .20
9. ENFORCING THIS AGREEMENT; MISCELLANEOUS . . . . . . . . . . . . . . .21
9.1 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
9.2 California Law . . . . . . . . . . . . . . . . . . . . . . . . .21
9.3 Arbitration. . . . . . . . . . . . . . . . . . . . . . . . . . .21
9.4 Presentment, Demands and Notice. . . . . . . . . . . . . . . . .22
9.5 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . .22
9.6 Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . . .22
9.7 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
9.8 Successors and Assigns . . . . . . . . . . . . . . . . . . . . .23
9.9 No Third Parties Benefited . . . . . . . . . . . . . . . . . . .23
9.10 Integration; Relation to Any Loan Commitment; Headings . . . . .23
9.11 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . .23
9.12 Severability; Waivers; Amendments. . . . . . . . . . . . . . . .24
9.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . .25
EXHIBIT A - BORROWING NOTICE . . . . . . . . . . . . . . . . . . . . . . A-1
REQUESTED ADVANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . A-3
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SECOND MODIFICATION AGREEMENT
This Second Modification Agreement ("Agreement") is made as of October
22, 1996, by and between BRE PROPERTIES, INC., a Maryland corporation
("Borrower"); BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a
national banking association ("Agent"); and the several financial
institutions a party to this Agreement (collectively, the "Banks";
individually a "Bank").
FACTUAL BACKGROUND
A. Bank of America National Trust and Savings Association ("BofA"),
Manufacturers Bank ("Manufacturers"), and The Industrial Bank of Japan,
Limited, Los Angeles Agency ("IBJ") have agreed to make a loan (the "Loan")
to the Borrower in accordance with an Unsecured Line of Credit Loan Agreement
dated April 4, 1996 (as amended, the "Loan Agreement"). The Loan Agreement
has previously been amended by the Modification Agreement to Syndicate Loan,
dated as of April 4, 1996 (the "First Modification"), and BofA has previously
assigned a portion of its interest under the Loan to IBJ pursuant to an
Assignment and Assumption Agreement dated as of June 19, 1996 (the "IBJ
Assignment"). Capitalized terms used herein without definition have the
meanings given to them in the Loan Agreement. The Loan is evidenced by a
Note dated April 4, 1996 in the stated principal amount of $70,000,000.
B. Borrower has requested that the Maximum Loan Amount under the
Commitment be increased to $120,000,000. In connection with such increase,
Commerzbank AG, Los Angeles Branch ("Commerzbank"), desires to become a party
to the Loan Agreement and to participate in the Commitment in an amount equal
to $25,000,000, IBJ desires to increase its share of the Commitment from
$5,000,000 to $25,000,000 and BofA desires to increase its share of the
Commitment from $50,000,000 to $55,000,000.
C. The Borrower, Agent and the Banks wish to modify the Loan Documents
to increase the Commitment as referred to above, and to make certain related
modifications, all as set forth herein.
AGREEMENT
Therefore, the Borrower, the Banks and Agent agree as follows:
1. MODIFICATION OF LOAN DOCUMENTS. The Loan Documents are hereby
amended as follows, subject to the terms and conditions hereof:
(a) As of the Effective Date (as defined below), Section 1.1(a) of
the Loan Agreement is hereby amended by deleting the reference therein to
"Seventy Million Dollars ($70,000,000)" and inserting in lieu thereof "One
Hundred Twenty Million Dollars ($120,000,000)". All references in the Loan
Documents to the Commitment and the Maximum Loan Amount shall be understood
to mean $120,000,000.
(b) Concurrent with the execution with this Agreement, the
Borrower shall execute and deliver to Agent the Amended and Restated
Promissory Note in the form attached hereto as EXHIBIT A. All references to
the "Note" in the Loan Documents shall mean and refer to said Amended and
Restated Promissory Note. Promptly following the Effective Date, Agent shall
xxxx the Prior Note (as defined in the Amended and Restated Promissory Note)
"superseded" and return same to the Borrower.
(c) Pursuant to Section 2.1(a) of the Loan Agreement, the Borrower
shall pay to Agent, on or before the Effective Date, a fee equal to 0.25% of the
$50,000,000 increase in the Commitment agreed to under this Agreement, prorated
based upon the number of days remaining in the
Availability Period, as measured from and including the Effective Date, to
but not including the Maturity Date. Portions of said additional commitment
fee shall be paid by Agent to IBJ and Commerzbank in accordance with separate
letter understandings between Agent and each such Bank.
(d) Section 6.4(h) of the Loan Agreement is hereby amended by
deleting the reference therein to "One Hundred Million Dollars
($100,000,000)" and inserting in lieu thereof "One Hundred Fifty Million
Dollars ($150,000,000)".
(e) Section 26 of the First Modification is hereby amended to change
the address of BofA as Agent to the following:
Bank of America National Trust and Savings Association
Commercial Real Estate Services/National Accounts 9105
00 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
2. THE CREDIT.
(a) The Borrower and each Bank acknowledge that, as of the
Effective Date, the Loan, the principal amount outstanding thereunder, and
each Bank's Pro Rata Share are:
(i) The Loan: $120,000,000
(ii) Total Current Outstanding $ 49,000,000
Principal
(as of October 24, 1996):
(iii) Each Bank's Pro Rata Share of the
Loan:
BofA: 45.8333333334%
Manufacturers: 12.5000000000%
IBJ: 20.0000000000%
Commerzbank: 20.0000000000%
--------------
100.0000000000%
(b) Subject to the terms and conditions of the Loan Documents, each
Bank agrees to fund its Pro Rata Share of each Advance of Loan proceeds from
time to time until the Maturity Date of the Loan. Such Loan proceeds shall
be delivered to the Borrower in accordance with provisions of the Loan
Documents.
(c) BofA and IBJ agree that the IBJ Assignment (which is not a Loan
Document) shall be modified to conform to the terms of this Agreement with
respect to the amended Commitment and Pro Rata Shares.
3. ADDITION OF COMMERZBANK.
(a) As of the Effective Date, Commerzbank shall be a party to the
Loan Documents and the Co-Lender Agreement and, accordingly, shall succeed to
all of the rights and be obligated to perform all of the obligations of a
Bank thereunder, with an interest in the Loan equal to its Pro Rata Share as
set forth above. Without limiting the foregoing, Commerzbank hereby appoints
and authorizes Agent to take such action as Agent on its behalf and to
exercise such powers as are delegated to Agent by the Banks pursuant to the
terms of the Loan Documents and Co-Lender Agreement.
(b) Commerzbank shall furnish to Agent and the Borrower, concurrently
with the execution of this Agreement, an appropriate U.S. Internal Revenue
Service form regarding exemption from or reduced rate of U.S.
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federal withholding tax on interest payments and fees under the Loan
Documents.
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(c) Commerzbank acknowledges that neither Agent nor any Bank (i)
makes any representation or warranty or assumes any responsibility with
respect to any statements, warranties or representations made in connection
with the Loan Documents or Co-Lender Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents, Co-Lender Agreement or any other instrument or document furnished
pursuant thereto, or (ii) makes any representation or warranty in connection
with, or assumes any responsibility with respect to, the solvency, financial
condition or statements of the Borrower or the performance or observance by
the Borrower of any of its respective obligations under the Loan Documents or
any other instrument or document furnished in connection therewith.
Commerzbank acknowledges that it has received a copy of the Loan Documents,
the Co-Lender Agreement and such other documents and information as it has
deemed appropriate and requested in order to make its own credit and legal
analysis and decision to enter into this Agreement, and will continue to make
its own credit and legal decisions in taking or not taking action under the
Loan Documents independently based on such documents and information as it
shall deem appropriate at the time and without reliance upon Agent or any
other Bank.
(d) Commerzbank hereby specifies the following as its Lending
Office and address for purposes of all communications and notices under the
Loan Documents and Co-Lender Agreement:
Commerzbank AG, Los Angeles Branch
000 X. Xxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
EXHIBIT B attached sets forth certain additional addresses and payment
instructions of Commerzbank for use by the Agent.
4. EFFECTIVE DATE; ALLOCATION OF PAYMENTS.
(a) The effective date ("Effective Date") for this Agreement shall be
the date that the following conditions precedent have been satisfied:
(i) This Agreement and each other document or instrument
referred to herein as being executed in connection herewith shall have been
fully executed and delivered by all parties thereto;
(ii) The Borrower shall have paid to Agent the additional
commitment fee referred to in Section 1(c) above;
(iii) The Borrower shall have provided to Agent an authorizing
resolution of the Board of Directors of Borrower (as certified by the
Secretary of Borrower) approving the execution, delivery and performance of
this Agreement by the Borrower; and
(iv) IBJ and Commerzbank shall have funded to Agent, in the
manner set forth in the Loan Documents, and the Agent shall have allocated
and paid such funds to BofA and Manufacturers, in each case in the amounts
specified to the Banks by the Agent, as necessary in order to balance
outstanding advances under the Loan to the Pro Rata Shares of the Banks as
set in Section 2(a) above.
(b) Upon payment by the Borrower, Agent shall allocate interest and
the unused commitment fee (i) for the period to but not including the Effective
Date, to those Banks (and in accordance with their respective Pro Rata Shares)
in effect under the Loan Documents prior to the effectiveness of this Agreement,
and (ii) from and including the Effective Date, to the Banks in accordance with
their Pro Rata Shares as set forth in this Agreement.
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5. MISCELLANEOUS.
(a) The Borrower shall reimburse to Agent all of its costs and
expenses (including legal fees) incurred in connection with the negotiation,
preparation and execution of this Agreement and all related documents.
(b) This Agreement shall be binding upon and inure to the benefit
of the parties and their respective successors and assigns, subject however
to the provisions of the Loan Documents and the Co-Lender Agreement.
(c) This Agreement may be executed in counterparts all of which
taken together shall be deemed to constitute one and the same instrument.
(d) This Agreement shall be governed by the laws of the State of
California.
(e) This Agreement (and those documents and instruments expressly
referred to herein) integrates all the terms and conditions hereof,
constitutes the entire agreement and understanding between the parties hereto
and supersedes any and all prior agreements and understandings related to the
subject matter hereof. In the event of any conflict between the terms and
conditions of this Agreement and any other document, this Agreement shall
prevail.
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IN WITNESS WHEREOF, the parties have executed this Agreement of the date
set forth above.
BORROWER: BRE PROPERTIES, INC.
By:
---------------------------
Name: Xxxxx X. XxXxxxxx
Title: President & Chief Executive Officer
By:
---------------------------
Name: XxXxx X. Xxxxxxx
Title: Secretary & Chief Financial Officer
BANKS: BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:
---------------------------
Name:
------------------------
Title:
------------------------
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, LOS ANGELES AGENCY
By:
---------------------------
Name:
------------------------
Title:
------------------------
MANUFACTURERS BANK
By:
---------------------------
Name:
------------------------
Title:
------------------------
By:
---------------------------
Name:
------------------------
Title:
------------------------
COMMERZBANK AG, LOS ANGELES BRANCH
By:
---------------------------
Name:
------------------------
Title:
------------------------
AGENT: BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
By:
---------------------------
Name:
------------------------
Title:
------------------------
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EXHIBIT B
A. COMMERZBANK ADMINISTRATIVE CONTACTS - Borrowings, Paydown, Interest, Fees,
etc.:
Xxxxxxxxx Xxxxxxxx, Commerzbank AG, New York Branch
2 World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
B. COMMERZBANK PAYMENT INSTRUCTIONS:
Name of Bank where funds are to be transferred:
Commerzbank AG, New York Branch
Routing Transit/ABA number of Bank were funds are to be transferred:
000000000
Name of Account: Commerzbank AG, Los Angeles Branch
Account Number: 150/940123300USD
Additional Information: Ref: BRE Properties, Inc.
Acct. No.: 123/2920056/05USD
