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EXHIBIT 10.4
FIRST AMENDMENT TO REVOLVING LOAN AGREEMENT
THIS FIRST AMENDMENT TO REVOLVING LOAN AGREEMENT (this "Amendment") is
dated as of April 3, 1997 and entered into by and between XXXXXXX PACIFIC
PROPERTIES, INC., a California corporation ("Borrower"), and NOMURA ASSET
CAPITAL CORPORATION, a Delaware corporation ("Lender"), with reference to the
following:
RECITALS
A. Borrower and Lender are parties to that certain Revolving Loan
Agreement dated as of November 18, 1996 (the "Loan Agreement"), pursuant to
which Lender agreed to make available to Borrower Secured Advances and Unsecured
Advances upon the terms and subject to the conditions set forth in the Loan
Agreement. Capitalized terms used herein and not otherwise defined have the
respective meanings ascribed to such terms in the Loan Agreement.
B. Borrower has requested that Lender make a one-time Unsecured Advance
to Borrower in the principal amount of $28,000,000.00 and a one-time Secured
Advance to Borrower in the principal amount of $42,000,000.00; and Lender has
agreed to make such Special Advances (as hereinafter defined) upon the terms and
subject to the conditions set forth herein. The Special Advances are not, and
shall not be deemed to be, included in the Commitment.
C. Lender and Borrower desire to amend the Loan Agreement to reflect
the Special Advances and to reaffirm the terms and provisions of the Loan
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein 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. SPECIAL ADVANCES AMENDMENTS TO LOAN AGREEMENT. Effective as of the
Special Advances Effective Date (as hereinafter defined), the Loan Agreement is
hereby amended and modified as follows:
1.1 DEFINITIONS, ETC.
1.1.1 The definition of "Applicable LIBO Rate" set forth in
the Loan Agreement is hereby deleted in its entirety and replaced with the
following definition:
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"'APPLICABLE LIBO RATE' means, for any Interest Period, the
rate per annum of interest equal to the sum of (i) (x) 1.65% in the
case of Secured Advances, and (y) 1.75% in the case of Unsecured
Advances, plus (ii) LIBOR for such Interest Period."
1.1.2 The definition of "Rate Reduction Date" is hereby
deleted in its entirety.
1.1.3 In addition to the other "Events of Default" as defined
and described in the Loan Agreement, Borrower's failure to repay the Special
Advances on or before the later of (i) the Special Advances Maturity Date (as
hereinafter defined), or (ii) if the date for repayment of the Special Advances
is extended pursuant to the terms of Section 1.2.7 hereof, the Special Secured
Advance Maturity Date or the Special Unsecured Advance Maturity Date, as
applicable, without notice, grace or cure rights of any kind, shall constitute
an "Event of Default" under the Loan Agreement.
1.1.4 The definition of "Loan Documents" set forth in the Loan
Agreement is hereby amended to include the Special Advances Notes (as
hereinafter defined), and each reference in the Loan Agreement or this Amendment
to "Loan Documents" shall be deemed to include, without limitation, a reference
to the Special Advances Notes.
1.1.5 Section 2.3.3 of the Loan Agreement is hereby deleted in
its entirety and replaced with the following language:
"2.3.3 PAYMENT OF INTEREST. Accrued interest shall be due and
payable in arrears on each Interest Payment Date and on the Maturity
Date."
1.2 AMOUNT AND TERMS OF SPECIAL ADVANCES.
1.2.1 SPECIAL SECURED ADVANCE AND SPECIAL UNSECURED ADVANCE.
Upon the terms and subject to the conditions set forth in this Amendment and
notwithstanding anything to the contrary set forth in the Loan Agreement, Lender
hereby agrees to make available to Borrower on or after the Special Advances
Effective Date until the Special Advances Outside Closing Date (as hereinafter
defined), a one-time Secured Advance in the aggregate principal sum of Forty-Two
Million Dollars ($42,000,000.00) (the "Special Secured Advance") and a one-time
Unsecured Advance in the aggregate principal sum of Twenty-Eight Million Dollars
($28,000,000.00) (the "Special Unsecured Advance" and collectively with the
Special Secured Advance, the "Special Advances"). The Special Advances shall be
repaid as set forth herein, and once repaid may not be re-borrowed.
Notwithstanding Lender's agreement to make the Special Advances set forth
herein, neither the Secured Revolving Commitment nor the Unsecured Revolving
Commitment shall be increased or decreased as a result of this Amendment, nor
shall the availability under the Secured Revolving Commitment or the Unsecured
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Revolving Commitment be affected by the Special Advances. Except as set forth
herein to the contrary, the Special Secured Advance shall be for all purposes a
Secured Advance under the Loan Agreement, and the Special Unsecured Advance
shall be for all purposes an Unsecured Advance under the Loan Agreement.
1.2.2 NO PARTIAL SPECIAL ADVANCES. Borrower shall borrow the
Special Advances, if at all, in the aggregate amount thereof, but shall have no
right to request a partial borrowing of the Special Advances. Borrower shall
have no right to borrow the Special Secured Advance unless Borrower
simultaneously borrows the Special Unsecured Advance; and Borrower shall have no
right to borrow the Special Unsecured Advance unless Borrower simultaneously
borrows the Special Secured Advance.
1.2.3 FUNDING. Subject to and upon satisfaction of the
applicable conditions set forth in Section 2 hereof, Lender shall make the
proceeds of the Special Advances available to Borrower in Dollars by
transferring immediately available funds to the account(s) designated by
Borrower.
1.2.4 USE OF PROCEEDS. The proceeds of the Special Advances
shall be used by Borrower to purchase the fee interest in the real properties
described on Schedule 1 attached hereto (collectively, the "Acquisition
Properties").
1.2.5 INTEREST. (a) So long as no Event of Default exists, the
unpaid principal amount of the Special Secured Advance shall bear interest at
the rate per annum of interest (the "Special Secured Advance Interest Rate")
equal to the sum of (i) 1.65% plus (ii) LIBOR for the applicable Interest
Period. During such time as an Event of Default exists (whether or not the
Obligations have then become due and payable by acceleration) and from and after
the Special Advances Maturity Date (as such date may be extended pursuant to
Section 1.2.7 hereof), the unpaid principal amount of the Special Secured
Advance shall bear interest at the rate per annum equal to the sum of (i) the
Special Secured Advance Interest Rate plus (ii) 5%.
(b) So long as no Event of Default exists, the unpaid
principal amount of the Special Unsecured Advance shall bear interest at the
rate per annum of interest (the "Special Unsecured Advance Interest Rate") equal
to the sum of (i) 2.50% plus (ii) LIBOR for the applicable Interest Period.
During such time as an Event of Default exists (whether or not the Obligations
have then become due and payable by acceleration) and from and after the Special
Advances Maturity Date (as such date may be extended pursuant to Section 1.2.7
hereof), the unpaid principal amount of the Special Unsecured Advance shall bear
interest at the rate per annum equal to the sum of (i) the Special Unsecured
Advance Interest Rate plus (ii) 5%.
(c) The interest rates for each Interest Period under
the Special Advances Notes shall be determined by Lender as set forth in the
Loan Agreement.
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Accrued interest shall be due and payable in arrears on each Interest Payment
Date and on the Special Advances Maturity Date.
1.2.6 SPECIAL ADVANCES NOTES. The Special Secured Advance made
by Lender shall be evidenced by the special secured advance note in the
principal amount of $42,000,000.00, executed by Borrower and payable to the
order of Lender, in substantially the form of Exhibit A hereto (as amended from
time to time, the "Special Secured Advance Note"); and the Special Unsecured
Advance made by Lender shall be evidenced by the special unsecured advance note
in the principal amount of $28,000,000.00, executed by Borrower and payable to
the order of Lender, in substantially the form of Exhibit B hereto (as amended
from time to time, the "Special Unsecured Advance Note" and collectively with
the Special Secured Advance Note, the "Special Advances Notes").
1.2.7 REPAYMENT. (a) The unpaid principal amount of the
Special Advances shall be paid in full on the date (the "Special Advances
Maturity Date") which is sixty (60) days following the date (the "Special
Advances Funding Date") on which the Special Advances are made by Lender to
Borrower or, if such day is not a Business Day, on the next succeeding Business
Day, as such date may be extended as hereinafter provided.
(b) Borrower may, by written notice to Lender not
less than ten (10) days nor more than twenty-five (25) days before the Special
Advances Maturity Date, request that the Special Advances Maturity Date be
extended to the date that is ninety (90) days following the Special Advances
Maturity Date; provided that the Special Advances Maturity Date may be so
extended only one time. If Borrower shall so request such an extension, the
Special Advances Maturity Date shall be automatically extended to the date that
is ninety (90) days following the Special Advances Maturity Date; provided that
no such extension shall be effective unless (i) no Default or Event of Default
shall exist either on the date of the notice requesting such extension or on the
Special Advances Maturity Date then in effect, (ii) each of the representations
and warranties of Borrower set forth in the Loan Documents shall be true and
complete in all material respects on and as of each such date with the same
force and effect as if made on and as of each such date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date) and (iii) Borrower shall have paid to
Lender an extension fee in immediately available funds in an amount equal to the
difference between (x) 0.25% of the Special Advances minus (y) Fifty Thousand
Dollars ($50,000.00).
(c) If the Special Advances Maturity Date has been
extended in accordance with subparagraph (b) above, then, Borrower may, by
written notice to Lender not less than thirty (30) days before the extended
Special Advances Maturity Date, request that (or, if Borrower has not timely
delivered such notice, Borrower shall be deemed to have requested that):
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(i) the Acquisition Properties be removed from the Collateral
Pool and the Special Secured Advance be converted into a long-term
mortgage loan to a special purpose entity secured by the Acquisition
Properties, which shall be due and payable in full on the date (the
"Special Secured Advance Maturity Date") which is ten (10) years
following the effective date of conversion of the Special Unsecured
Advance, shall bear interest and otherwise be upon other economic terms
to be determined by Lender, and shall be evidenced and secured by
documents and instruments substantially similar to the documents and
instruments evidencing and securing (x) the loan made by Lender to
Borrower on January 30, 1997 in the original principal amount of
$25,400,000.00 and (y) the loan made by Lender to Borrower on February
21, 1997 in the original principal amount of $33,100,000.00; and
(ii) the Special Unsecured Advance (and any portion of the
Special Secured Advance not converted to a long-term mortgage loan due
to a reduction of the amount of such loan by Lender as a result of its
underwriting) be converted into a loan, the principal of which shall
fully amortize in sixty (60) equal monthly payments and which shall be
due and payable in full on the date (the "Special Unsecured Advance
Maturity Date") which is five (5) years following the effective date of
conversion of the Special Unsecured Advance, shall be upon terms
substantially similar to standard mezzanine financing terms then being
quoted by Lender for similar unsecured loans (or if Lender is not then
quoting such terms, on such terms as may be determined by Lender in its
sole and absolute discretion), and shall be evidenced by documents
mutually acceptable to Borrower and Lender.
It shall be a condition precedent to Lender's agreement to convert the Special
Secured Advance and the Special Unsecured Advance as provided in this
subparagraph (c) that (i) no Default or Event of Default shall exist either on
the date of the notice requesting such conversion, on the extended Special
Advances Maturity Date then in effect or upon the conversion of the Special
Advances as contemplated hereby; (ii) each of the representations and warranties
of Borrower set forth in the Loan Documents shall be true and complete in all
material respects on and as of each such date with the same force and effect as
if made on and as of each such date (or, if any such representation or warranty
is expressly stated to have been made as of a specific date, as of such specific
date); (iii) Borrower (and, in the case of the Special Secured Advance, the
special purpose entity created by Borrower) shall have satisfied all of Lender's
customary conditions precedent to the extension of such long-term and/or
mezzanine financing, as the case may be, on or prior to the Special Advances
Maturity Date, including without limitation posting such reserves for deferred
maintenance, capital expenditures, taxes and insurance, securitization costs and
tenant improvements as Lender may reasonably require; (iv) Borrower (and, in the
case of the Special Secured Advance, the special purpose entity created by
Borrower) shall have executed and delivered to Lender all documents and
instruments reasonably requested by Lender in connection with the transactions
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contemplated hereby, (v) Borrower shall have paid all reasonable costs and
expenses incurred by Lender in connection with the proposed conversion of the
Special Advances, whether or not such conversion actually is consummated; (vi)
Borrower shall have paid to Lender a structuring fee in an amount equal to 1% of
the Special Advances; and (vii) Lender shall have completed its underwriting of
such long-term and mezzanine loans and agreed to make such loans. Nothing set
forth herein is intended as, nor shall it be deemed under any circumstances to
be, a commitment by Lender to make the permanent loan and/or the mezzanine loan
referred to herein.
1.2.8 PREPAYMENT. Notwithstanding anything to the contrary set
forth in Section 2.7.4 of the Loan Agreement, in the event Borrower issues and
sells any shares of Capital Stock, Borrower shall prepay the entire outstanding
principal amount of, and all accrued interest on, the Special Advances, from the
net cash proceeds of such issuance of Capital Stock. Such prepayment shall be
made not later than one (1) Business Day following the date of issuance of the
Capital Stock.
1.2.9 MANNER OF PAYMENT. Payments on the Special Advances
shall be made in the manner set forth in Section 2.8 of the Loan Agreement.
2. CONDITIONS PRECEDENT TO SPECIAL ADVANCES. The agreement of Lender to
make the Special Advances and to amend the Loan Agreement as set forth in
Section 1 above shall be subject to the satisfaction of the following conditions
precedent:
2.1 SPECIAL ADVANCES OUTSIDE CLOSING DATE. The Special Advances
Effective Date shall occur on or prior to April 3, 1997 (the "Special Advances
Outside Closing Date").
2.2 NOTICE OF BORROWING. Lender shall have received a Notice of
Borrowing, duly executed by a Responsible Officer of Borrower, which shall
request that the Special Advances be made as of a date not later than the
Special Advances Outside Closing Date.
2.3 CERTAIN DOCUMENTS. Lender shall have received and recorded, where
applicable, the following documents (collectively with this Amendment, the
"Amendment Documents"), duly executed and, if applicable, acknowledged, by
Borrower, and in form and substance satisfactory to Lender:
2.3.1 the Special Secured Advance Note;
2.3.2 the Special Unsecured Advance Note; and
2.3.3 an amendment to each of the Mortgages, the Assignment of
Leases, and the other Loan Documents, in each case reflecting that such Loan
Documents secure the repayment of the Special Secured Advance.
2.4 FEES AND EXPENSES PAID.
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2.4.1 Borrower shall have paid to Lender a structuring fee in an
amount equal to Fifty Thousand Dollars ($50,000.00) with respect to the Special
Advances, which fee shall be fully earned when paid and shall be non-refundable:
2.4.2 Borrower shall have paid all reasonable costs and expenses
incurred by Lender in connection with the transactions contemplated by this
Amendment or with respect to prior proposed amendments to the Loan Agreement,
prior, pending and abandoned additions to the Collateral Pool, and other
proposed secured loans by Lender to Borrower, whether or not consummated.
2.5 TITLE ENDORSEMENTS. Lender shall have received an endorsement, or
the irrevocable commitment of the Title Company to issue an endorsement, to each
title insurance policy insuring the Lien of a Mortgage, which endorsement shall
insure the continued priority of the Liens created under the Mortgage insured
thereby notwithstanding the amendments to the Loan Agreement contemplated
hereby, increasing the aggregate liability by the Secured Special Advance,
subject only to the Permitted Encumbrances, and otherwise in form and substance
satisfactory to Lender; and Borrower shall have paid to the Title Company (and
shall have delivered to Lender evidence of such payment) all expenses of the
Title Company in connection with the issuance of such endorsements and an amount
equal to the recording taxes payable in connection with the recording of the
amendments to the Mortgages and the Assignment of Leases in the appropriate
county land offices.
2.6 COUNSEL OPINION. Lender shall have received one or more favorable
legal opinions from counsel to Borrower stating that the Loan Documents, as
modified by the Amendment Documents, remain enforceable, that the Amendment
Documents have been duly authorized, executed and delivered and are valid and
binding obligations of Borrower, enforceable in accordance with their respective
terms, and with regard to such other matters as Lender may request.
2.7 CORPORATE AUTHORIZATION. Borrower shall have delivered to Lender
copies of the articles of incorporation and bylaws of Borrower, and all
amendments thereto, all certified by the relevant government officials or the
Secretary of Borrower, as appropriate, and certified copies of all corporate
action taken by Borrower approving the execution and delivery of this Amendment
and the other Amendment Documents, and the transactions contemplated thereby and
hereby.
2.8 REPRESENTATIONS AND WARRANTIES. All representations and warranties
made by Borrower under the Loan Agreement shall be true and correct in all
material respects as of the Special Advances Effective Date as if made on such
date, and Borrower shall have delivered to Lender a certificate of a Responsible
Officer of Borrower, dated as of the Special Effective Date, to the effect that
all representations and warranties of Borrower under the Loan Agreement were
true and correct in all material respects as of the date made and are true and
correct in all material respects as of the Special Advances
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Effective Date, as though made on and as of such date (except to the extent that
such representations and warranties expressly were made only as of a specific
date).
2.9 NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of Default
shall have occurred and be continuing under Loan Agreement, and Borrower shall
have delivered to Lender (i) a certificate of a Responsible Officer of Borrower,
dated as of the Special Advances Effective Date, to the effect that no Default
and no Event of Default shall have occurred and be continuing as of such date
under the Loan Documents and (ii) a Compliance Certificate, executed by a
Responsible Officer of Borrower.
2.10 NO MATERIAL ADVERSE CHANGE. There shall have occurred no Material
Adverse Change since September 30, 1996, and Borrower shall have delivered to
Lender a certificate of a Responsible Officer of Borrower, dated as of the
Special Advances Effective Date, to the effect that no such Material Adverse
Change shall have occurred.
2.11 DESIGNATION OF COLLATERAL PROPERTIES. Borrower shall have
delivered to Lender the information and documents required to be delivered under
Section 3.4 of the Loan Agreement as to each of the Acquisition Properties, and
each of the Acquisition Properties shall have been approved by Lender, in its
sole discretion, as eligible for inclusion in the Collateral Pool in accordance
with Section 3.4 of the Loan Agreement.
2.12 GENERAL. All other documents and legal matters in connection with
the Special Advances shall have been delivered or executed or recorded in form
and substance reasonably satisfactory to Lender and Lender shall have received
all such counterpart originals or certified copies thereof as Lender may
request.
2.13 SPECIAL ADVANCES EFFECTIVE DATE. The earliest date upon which all
of the conditions to (i) the making of the Special Advances and (ii) the
amendment of the Loan Agreement are either satisfied or waived by Lender in its
sole and absolute discretion is referred to herein as the "Special Advances
Effective Date."
3. CERTAIN AGREEMENTS OF LENDER. During the period (the "Special
Advances Term") from the Special Advances Funding Date through the Special
Advances Maturity Date, Borrower shall have the right to make borrowing requests
pursuant to Section 2.1 of the Loan Agreement. Lender hereby agrees that,
notwithstanding anything to the contrary set forth herein or in the Loan
Agreement, during the Special Advances Term, the Special Advances shall not be
included in the definition of "Debt" of Borrower for purposes of determining
whether Borrower has satisfied the financial conditions set forth in the Loan
Agreement, including without limitation the financial conditions set forth in
Section 3.2.4 (Pro Forma Debt Service Coverage Ratio) and/or Section 3.2.5 (Pro
Forma Consolidated Total Debt to Total Capitalization of the Borrower), and/or
whether Borrower is in compliance with the financial covenants set forth in the
Loan Agreement, including without limitation the financial covenants set forth
in Section 6.2.1 (Maximum Consolidated Total Debt to
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Total Capitalization of the Borrower) and/or Section 6.2.2 (Debt Service
Coverage Ratio) of the Loan Agreement. In addition, Lender and Borrower hereby
agree that, for purposes of determining the Available Amount under the Loan
Agreement, the Acquisition Properties shall not be included as Collateral
Properties.
4. REAFFIRMATION OF LOAN AGREEMENT. Borrower and Lender intend hereby
to amend the Loan Agreement only as set forth herein, and Borrower and Lender
hereby agree that, except as expressly amended hereby, all other terms and
conditions of the Loan Agreement are hereby confirmed and shall remain in full
force and effect.
5. INCORPORATION BY REFERENCE. All terms and provisions of the Loan
Agreement, unless specifically amended by this Amendment, are hereby deemed
incorporated by reference herein.
6. COUNTERPARTS. This Amendment may be executed in counterpart, each of
which shall constitute an original and all of which, when taken together, shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
BORROWER:
XXXXXXX PACIFIC PROPERTIES,
INC., a California corporation
By: ______________________________
Name:
Title:
LENDER:
NOMURA ASSET CAPITAL CORPORATION,
a Delaware corporation
By: ______________________________
Xxxxx X. Xxxxxx, Vice President
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