Document:

EXHIBIT 10.1

FOURTH AMENDMENT TO AMENDED AND RESTATED

REVOLVING CREDIT AGREEMENT

THIS FOURTH AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (this “Fourth Amendment”) is made as of January 29, 2014 (the “Effective Date”), by and among ESSEX PORTFOLIO, L.P., a California limited partnership (“Borrower”), the lenders which are parties hereto (collectively, “Lenders”) and PNC BANK, NATIONAL ASSOCIATION, as administrative agent under the Credit Agreement (in such capacity, “Administrative Agent”) and L/C Issuer.

BACKGROUND

A.                 Administrative Agent, Lenders, and Borrower entered into that certain Amended and Restated Revolving Credit Agreement, dated as of September 16, 2011, as amended by that certain First Amendment to Amended and Restated Revolving Credit Agreement, dated as of May 31, 2012, as further amended by that certain Second Amendment to Amended and Restated Revolving Credit Agreement, dated as of August 30, 2012, and as further amended by that certain Third Amendment to Amended and Restated Revolving Credit Agreement, dated as of January 22, 2013 (as so amended, the “Credit Agreement”), pursuant to which Lenders agreed to make revolving credit loans to Borrower in an aggregate outstanding amount of up to Six Hundred Million Dollars ($600,000,000) (the “Credit Line”).

B.                  Borrower has requested that Lenders and Administrative Agent modify the Credit Agreement to, among other things, (i) increase the Credit Line to the maximum principal amount of One Billion Dollars ($1,000,000,000) (the “Increased Commitment Amount”) and (ii) to increase the Commitments of certain existing Lenders under the Credit Agreement (collectively, “Existing Lenders” and each, an “Existing Lender”) and to add additional Lenders under the Credit Agreement (collectively, “Additional Lenders” and each, an “Additional Lender”).  Existing Lenders and Additional Lenders are identified on Exhibit A attached hereto.  Lenders and Administrative Agent are willing to make such modifications, and to make certain other modifications, to the Credit Agreement, all on the terms and subject to the conditions herein set forth.

NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows:

AGREEMENT

1.                   Terms.  Capitalized terms used herein and not otherwise defined herein shall have the meanings given to such terms in the Credit Agreement.

2.                   Amendments to Credit Agreement.  The Credit Agreement is hereby amended as follows:

(a)           The cover page of the Credit Agreement is hereby amended by deleting the phrase “PNC Capital Markets LLC, as Sole Lead Arranger and Sole Book Runner” and replacing it with the following:

“PNC Capital Markets LLC, U.S. Bank, N.A., and Union Bank, N.A., as Joint Lead Arrangers and Joint Book Runners

U.S. Bank, National Association, and Union Bank, N.A., as Co-Syndication Agents

Wells Fargo Bank, National Association, CitiBank, N.A., and JPMorgan Chase Bank, N.A., as Co-Documentation Agents

Bank of the West, Regions Bank, Capital One, HSBC Bank USA, National Association, and Bank of Montreal, as Co-Managing Agents”

(b)          The definition of “Applicable Committed Loan Margin” in Article 1 is hereby amended and restated to read in full as follows:

““Applicable Committed Loan Margin” means the Applicable LIBOR Committed Loan Margin or the Applicable Reference Rate Committed Loan Margin determined from the following pricing grid based on the current published or private ratings of Guarantor’s senior unsecured long term debt, as provided below:

 

	
TIER

	
GUARANTOR’S SENIOR 

UNSECURED LONG 

TERM DEBT RATING

	
APPLICABLE 

LIBOR

COMMITTED 

LOAN MARGIN 

(BPS)

	
FACILITY 

FEE

(BPS PER 

ANNUM)

	
APPLICABLE 

REFERENCE 

RATE 

COMMITTED 

LOAN 

MARGIN (BPS)

	
I

	
A- and/or A3 or better

	
85

	
15

	
0

	
II

	
BBB+ and/or Baal

	
95

	
15

	
0

	
III

	
BBB and/or Baa2

	
105

	
20

	
5

	
IV

	
BBB- and/or Baa3

	
135

	
25

	
35

	
V

	
Less than BBB- and/or Baa3

	
180

	
25

	
80

 

Borrower shall provide to Administrative Agent written evidence of the current rating or ratings on Guarantor’s senior unsecured long term debt by any of Moody’s, S&P and/or Fitch, if such rating agency has provided to Guarantor a rating on such senior unsecured long term debt, which evidence shall be reasonably acceptable to Administrative Agent; provided, that, at a minimum, Guarantor must provide such a rating from either Moody’s or S&P.  In the event that Guarantor has a rating on its senior unsecured long term debt provided by (a) both Moody’s and S&P, (b) both Moody’s and Fitch, (c) both S&P and Fitch, or (d) each of Moody’s, S&P and Fitch, and there is a difference in rating between such rating agencies, the Applicable Committed Loan Margin shall be based on the higher rating.  Changes in the Applicable Committed Loan Margin shall become effective on the first day following the date on which any of Moody’s, S&P or Fitch that has provided Guarantor a rating on Guarantor’s senior unsecured long term debt changes such rating.  Borrower shall notify Administrative Agent of any such changes in Guarantor’s senior unsecured long term debt pursuant to and in accordance with Section 6.4(i).”

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(c)           The definition of “Arranger” in Article 1 is hereby amended and restated to read in full as follows:

““Arranger” means PNC Capital Markets LLC, U.S. Bank, N.A., and Union Bank, N.A., in their capacities as joint lead arrangers and joint book runners.”

(d)          The definition of “Capitalization Rate” in Article 1 is hereby amended and restated to read in full as follows:

““Capitalization Rate” means (A) 6.00% from the Fourth Amendment Effective Date through the Original Maturity Date and (ii) 6.50% during the Extension Period (if exercised).”

(e)           The definitions of “Core Markets,” “First Extension Period” and “Second Extension Period” in Article 1 are hereby deleted in their entirety.

(f)           The definition of “Extended Maturity Date” in Article 1 is hereby amended and restated to read in full as follows:

““Extended Maturity Date” means the date that immediately follows the expiration of the Extension Period, if the extension option for the Extension Period is duly exercised by Borrower hereunder.”

(g)          The definition of “Extension Period” in Article 1 is hereby amended and restated to read in full as follows:

““Extension Period” shall mean the consecutive eighteen (18) month period immediately following the Original Maturity Date, as set forth in Section 2.9 hereof.”

(h)          The definition of “FATCA” is hereby added in Article 1 as follows:

““FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.”

(i)            The definition of “Fourth Amendment Effective Date” is hereby added in Article I as follows:

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““Fourth Amendment Effective Date” shall mean the “Effective Date” as defined in that certain Fourth Amendment to Amended and Restated Revolving Credit Agreement dated January 29, 2014, by and among Borrower, Lenders, and Administrative Agent.”

(j)             The definition of “Maturity Date” in Article 1 is hereby amended and restated to read in full as follows:

““Maturity Date” means the earlier of the following dates:  (a) the Original Maturity Date or, if Borrower has exercised its extension option pursuant to and in accordance with Section 2.9 hereof, the Extended Maturity Date, or (b) any earlier date on which all of the Loans shall become due, whether by acceleration, mandatory prepayment or otherwise, provided, however, that if such date is not a Business Day, the Maturity Date shall be the next preceding Business Day.”

(k)           The definition of “Maximum Commitment Amount” in Article 1 is hereby amended and restated to read in full as follows:

““Maximum Commitment Amount” means, at any time, an amount equal to One Billion Dollars ($1,000,000,000), subject to increase pursuant to, and on the terms and subject to the conditions set forth in Section 2.17, and to decrease pursuant to the provisions of Section 2.7.”

(l)             The definition of “Original Maturity Date” in Article 1 is hereby amended and restated to read in full as follows:

““Original Maturity Date” means December 31, 2017.”

(m)         Section 2.9 is hereby amended and restated to read in full as follows:

 

“Section 2.9                Extension of Original Maturity Date.

Upon Borrower’s written request, delivered to Administrative Agent at least sixty (60) days and not more than ninety (90) days prior to the Original Maturity Date, Borrower shall have the right to extend the Original Maturity Date for the Extension Period, provided that:

(a)                No Default or Event of Default shall have occurred and remain uncured on the Original Maturity Date, and Administrative Agent shall have received a certificate to that effect signed by a Responsible Officer of Borrower;

(b)                The representations and warranties set forth in this Agreement and the other Loan Documents shall be correct as of the Original Maturity Date as though made on and as of that date, and Administrative Agent shall have received a certificate to that effect signed by a Responsible Officer of Borrower;

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(c)                 Borrower shall have paid to Administrative Agent, for the account of the Lenders, an extension fee equal to twenty (20) basis points multiplied by the Maximum Commitment Amount on the Original Maturity Date.  The Extension Fee shall be determined as of the date Borrower provides the extension notice for the Extension Period and shall be paid by Borrower on the first day of the Extension Period; and

(d)                Borrower shall have executed, acknowledged and delivered to Administrative Agent such documents as Administrative Agent reasonably determines to be necessary to evidence the extension of the Original Maturity Date.”

(a)           Section 2.17.1 is hereby amended and restated to read in full as follows:

“Section 2.17.1.     Request for Increase.

Subject to the provisions of Section 2.7, on the terms and subject to the conditions set forth in this Section 2.17, Borrower shall have (A) a one‐time right prior to the Original Maturity Date and (B) a one‐time right during the Extension Period, by written notice to Administrative Agent, to request an increase in the Maximum Commitment Amount by (i) first permitting any Lender to increase its Commitment (and accordingly increase the Maximum Commitment Amount by such amount), or (ii) thereafter inviting any Eligible Assignee that has previously been approved by Administrative Agent in writing to become a Lender under this Agreement and to provide a commitment to lend hereunder (and accordingly increase the Maximum Commitment Amount by such amount); provided, however, that in no event shall such actions cause the Maximum Commitment Amount to increase above $1,500,000,000.”

(b)          Section 3.1.5 is hereby amended by adding the following at the end of such Section:

“If a payment made to a Foreign Lender under any Loan Document would be subject to U.S. federal withholding tax imposed by FATCA, if such Foreign Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Foreign Lender shall deliver to Borrower and Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by Borrower or Administrative Agent, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Borrower or Administrative Agent as may be necessary for Borrower and Administrative Agent to comply with their obligations under FATCA and to determine that such Foreign Lender has complied with such Foreign Lender's obligations under FATCA or to determine the amount to deduct and withhold from such payment.”

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(c)           Section 6.10 is hereby amended and restated to read in full as follows:

 

“Certain Debt Limitations.  (a) The Outstanding Amount of all Loans plus the Outstanding Amount of all L/C Obligations shall not exceed the Availability at any time; and (b) the amount of Secured Debt at the end of each calendar quarter shall not exceed 40% of the Gross Asset Value at such time.”

(d)          Section 6.12 is hereby amended and restated to read in full as follows:

 

“Maximum Unsecured Debt Leverage Ratio.  The ratio determined at the end of each calendar quarter of (a) the Unencumbered Asset Value for the four consecutive calendar quarter period ending on such date divided by (b) the amount of Unsecured Debt for such four calendar quarter period shall not be less than 1.50:1.0.”

(e)           Section 6.13 is hereby is hereby amended and restated to read in full as follows:

“During the continuance of any Event of Default, aggregate distributions shall not exceed the minimum amount that Guarantor must distribute to its shareholders in order to qualify as a real estate investment trust under the provisions of Internal Revenue Code Sections 856 and 857.”

(f)            The following new Section 7.17 is hereby added as follows:

 

“Section 7.17.  OFAC; FCPA.  None of (a) Borrower, any Subsidiary (as hereinafter defined) of Borrower or Guarantor and (b) each Person that, directly or indirectly, is in Control (as hereinafter defined) of a Person described in clause (a) above, is currently subject to any United States sanctions administered by the Office of Foreign Asset Control of the Department of Treasury of the United States (“OFAC”); and Borrower will not directly or indirectly use the proceeds of the Loans or the Letters of Credit or otherwise make available such proceeds to any Person, for the purpose of financing the activities of any Person currently subject to any United States sanctions administered by OFAC.  In addition, Borrower hereby agrees to provide to Lenders any additional information that a Lender deems reasonably necessary from time to time in order to ensure compliance with all applicable laws concerning money laundering and similar activities.  For purposes of this Section 7.17, (i) “Subsidiary” shall mean, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests  are, as of such date, directly or indirectly owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent and (ii) “Control” shall mean the direct or indirect (x) ownership of, or power to vote, 51% or more of the issued and outstanding equity interests having ordinary voting power for the election of directors of a Person or other Persons performing similar functions for such Person, or (y) power to direct or cause the direction of the management and policies of a Person whether by ownership of equity interests, contract or otherwise.  To Borrower’s knowledge, no part of the proceeds of the Loans or the Letters of Credit will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.”

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(g)          Section 9.8 is hereby is hereby amended and restated to read in full as follows:

 

“Anything herein to the contrary notwithstanding, none of the Joint Lead Arrangers or the Joint Book Runners listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in their respective capacities, as applicable, as Administrative Agent, a Lender or the L/C Issuer hereunder.”

(h)           To give effect to the increase in the Maximum Commitment Amount hereunder, the joinder of the Additional Lenders and the changes in the Commitment of the Existing Lenders, Schedule 1.1 to the Credit Agreement is hereby amended and replaced with Schedule 1.1 attached hereto.

3.                    Loan Documents.  Except where the context clearly requires otherwise, all references to the Credit Agreement in any other Loan Document shall be to the Credit Agreement as amended by this Fourth Amendment.

4.                   Borrower’s Ratification.  Borrower agrees that it has no defenses or set-offs against Lenders or their respective officers, directors, employees, agents or attorneys, with respect to the Loan Documents, all of which are in full force and effect, and that all of the terms and conditions of the Loan Documents not inconsistent herewith shall remain in full force and effect unless and until modified or amended in writing in accordance with their terms.  Borrower hereby ratifies and confirms its obligations under the Loan Documents and agrees that the execution and delivery of this Fourth Amendment does not in any way diminish or invalidate any of its obligations thereunder.

5.                   Guarantor Ratification.  Guarantor agrees that it has no defenses or set-offs against Lenders or their respective officers, directors, employees, agents or attorneys, with respect to the Guaranty, which is in full force and effect, and that all of the terms and conditions of the Guaranty not inconsistent herewith shall remain in full force and effect unless and until modified or amended in writing in accordance with their terms.  Guarantor hereby ratifies and confirms its obligations under the Guaranty and agrees that the execution and delivery of this Fourth Amendment does not in any way diminish or invalidate any of its obligations thereunder.

6.                   Representations and Warranties.  Borrower hereby represents and warrants to Lenders that:

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(a)           The representations and warranties made in the Credit Agreement, as amended by this Fourth Amendment, are true and correct in all material respects as of the date hereof;

(b)          After giving effect to this Fourth Amendment, no Default or Event of Default under the Credit Agreement or the other Loan Documents exists on the date hereof;

(c)           This Fourth Amendment has been duly authorized, executed and delivered by Borrower so as to constitute the legal, valid and binding obligations of Borrower, enforceable in accordance with its terms, except as the same may be limited by insolvency, bankruptcy, reorganization or other laws relating to or affecting the enforcement of creditors’ rights or by general equitable principles;

(d)          The Joinder Pages to this Fourth Amendment have been duly authorized, executed and delivered by Guarantor; and

(e)           No material adverse change in the business, assets, operations, condition (financial or otherwise) or prospects of Borrower, Guarantor or any of their subsidiaries or Affiliates has occurred since the date of the last financial statements of the afore-mentioned entities which were delivered to Administrative Agent.

All of the above representations and warranties shall survive the making of this Fourth Amendment.

7.                   Conditions Precedent.  The effectiveness of the amendments set forth herein is subject to the fulfillment, to the satisfaction of Administrative Agent and its counsel, of the following conditions precedent:

(a)           Borrower shall have delivered to Administrative Agent the following, all of which shall be in form and substance satisfactory to Administrative Agent and shall be duly completed and executed (as applicable):

(i)              This Fourth Amendment;

(ii)            The Replacement Notes and the Additional Notes, as more fully set forth in Section 8 below;

(iii)           Evidence that the execution, delivery and performance by Borrower and Guarantor, as the case may be, of this Fourth Amendment have been duly authorized by Borrower and Guarantor, as the case may be, and that this Fourth Amendment has been duly executed and delivered by Responsible Officers of Borrower and Guarantor, as the case may be; and

(iv)           Such additional documents, certificates, opinions and information as Administrative Agent may require pursuant to the terms hereof or otherwise reasonably request.

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(b)          The representations and warranties set forth in the Credit Agreement shall be true and correct in all material respects on and as of the date hereof.

(c)           After giving effect to this Fourth Amendment, no Default or Event of Default shall have occurred and be continuing as of the date hereof.

(d)          Borrower shall have paid to Administrative Agent, (i) any fees required to be paid by Borrower to Administrative Agent for its benefit or the benefit of the Lenders in connection with the Increased Commitment Amount as agreed to by Borrower and Administrative Agent; and (ii) all other costs and expenses of Administrative Agent in connection with preparing and negotiating this Fourth Amendment, including, but not limited to, reasonable attorneys’ fees and costs.

8.                    Replacement and Additional Notes.  Concurrently with the execution and delivery of this Fourth Amendment, Borrower shall execute and deliver (i) to each Existing Lender, a replacement Revolving Note in the face amount of the Increased Commitment of such Existing Lender as set forth on Exhibit A attached hereto and (ii) to each Additional Lender, a Revolving Note in the face amount of the Commitment of such Additional Lender as set forth on Exhibit A attached hereto, in each case in the form of Exhibit G-1 attached to the Credit Agreement.  The replacement Revolving Note to each Existing Lender shall evidence any outstanding Loans of such Existing Lender and upon receipt thereof the existing Revolving Note to such Existing Lender shall be cancelled and returned to Borrower.

9.                   Joinder by Additional Lenders.  Effective on the Effective Date, each Additional Lender hereby joins in and becomes a party to the Credit Agreement with the Commitment set forth opposite its name on Exhibit A attached hereto, agrees to be bound by the provisions of the Credit Agreement and shall have the rights and obligations of a Lender thereunder and under any other document issued in connection therewith.  Each Additional Lender hereby makes and agrees to be bound by all of the terms and conditions set forth in Section 10.5(b) of the Credit Agreement as if it were an assignee of its Commitment under the provisions of Section 10.5 of the Credit Agreement.

10.                Adjusting Payments.  As of the Effective Date, Administrative Agent shall notify each Lender as to the adjusting payments which will be required to be made to the outstanding Loans of each Lender in order to give effect to the increase in the Maximum Commitment Amount and the increase to and addition of the individual Commitments of certain Lenders pursuant to this Fourth Amendment so that after such adjusting payments are made each Lender’s outstanding Loans evidenced by such Lender’s Revolving Note shall be in an amount equal to its Pro Rata Share of all outstanding Loans.  On the Effective Date each Lender agrees to pay to the other Lenders the amounts, if any, specified by Administrative Agent in such notice.

11.                 Miscellaneous.

 

(a)          All terms, conditions, provisions and covenants in the Loan Documents and all other documents delivered to Administrative Agent in connection therewith shall remain unaltered and in full force and effect except as modified or amended hereby.  To the extent that any term or provision of this Fourth Amendment is or may be deemed expressly inconsistent with any term or provision in any Loan Document or any other document executed in connection therewith, the terms and provisions hereof shall control.

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(b)          Except as expressly provided herein, the execution, delivery and effectiveness of this Fourth Amendment shall neither operate as a waiver of any right, power or remedy of Administrative Agent or Lenders under any of the Loan Documents nor constitute a waiver of any Default or Event of Default thereunder.

(c)           This Fourth Amendment constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous understandings and agreements.

(d)          In the event any provisions of this Fourth Amendment shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.

(e)           This Fourth Amendment shall be governed by and construed according to the laws of the State of California, without giving effect to any of its choice of law rules.

(f)            This Fourth Amendment shall inure to the benefit of, and be binding upon, the parties hereto and their respective successors and assigns and may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(g)          The headings used in this Fourth Amendment are for convenience of reference only, do not form a part of this Fourth Amendment and shall not affect in any way the meaning or interpretation of this Fourth Amendment.

 

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IN WITNESS WHEREOF, Borrower, Administrative Agent and Lenders have caused this Fourth Amendment to be executed by their duly authorized officers as of the date first above written.

 

ESSEX PORTFOLIO, L.P.,

a California limited partnership

 

	
BY:

	
ESSEX PROPERTY TRUST, INC.,

	
 

	
a Maryland corporation, its general partner

	
 

		
 

	
 

	
 

	By:	
/s/ Mark J. Mikl

	
 

	
 

		
Name: Mark J. Mikl

	
 

	
 

		
Title:   Senior Vice President

	
 

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[Signature Page to Fourth Amendment to Amended and Restated Credit Agreement]

 

	
PNC BANK, NATIONAL ASSOCIATION,

	
 

	
as Administrative Agent

	
 

	
 

	
 

	
 

	
By:

	
/s/ Nicolas Zitelli

	
 

	
 

	
Nicolas Zitelli, Vice President

	
 

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PNC BANK, NATIONAL ASSOCIATION,

	
	
as L/C Issuer, Swing Line Lender and Lender

	
	 	 	
	
By:

	
/s/ Nicolas Zitelli

	
 

	
 

	
Nicolas Zitelli, Vice President

	
 

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[Signature Page to Fourth Amendment to Amended and Restated Credit Agreement]

	
UNION BANK, N.A.,

	
	
as Lender

	
	 	 	
	
By:

	
/s/ Thomas E. Little 

	
 

	
 

	
Name: Thomas E. Little

	
 

	 	Title:   Vice President	

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[Signature Page to Fourth Amendment to Amended and Restated Credit Agreement]

	
COMERICA BANK, a Texas Banking Association

	
	
as Lender

	
	 	 	
	
By:

	
/s/ Sam F. Meehan 

	
 

	
 

	
Name: Sam F. Meehan

	
 

	 	
Title:   Vice President

	

 

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US BANK, NATIONAL ASSOCIATION,

	
	
as Lender

	
	 	 	
	
By:

	
/s/ Christopher Osborn   

	
 

	
 

	
Christopher Osborn

	
 

	 	
Senior Vice President

	

 

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CAPITAL ONE, N.A.

	
	 	 	
	
By:

	
/s/ Frederick Denecke   

	
 

	
 

	
Name: Frederick Denecke

	
 

	 	
Title:   Senior Vice President

	

 

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BANK OF THE WEST,

	
	
as Lender

	
	 	 	
	
By:

	
/s/ Michael Pavao

	
 

	
 

	
Name: Michael Pavao

	
 

	 	
Title:   Vice President

	

 

	
By:

	
/s/ Ben Arroyo     

	
 

	
 

	
Name: Ben Arroyo

	
 

	 	
Title:   Vice President

	

 

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WELLS FARGO BANK, NATIONAL ASSOCIATION,

	
	
as Lender

	
	 	 	
	
By:

	
/s/ Kevin A. Stacker

	
 

	
 

	
Name: Kevin A. Stacker

	
 

	 	
Title:   Vice President

	

 

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BANK OF MONTREAL, as Lender

	
	
 

	
	 	 	
	
By:

	
/s/ Gwendolyn Gatz

	
 

	
 

	
Name: Gwendolyn Gatz

	
 

	 	
Title:   Vice President

	

 

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CITIBANK, N.A., as Lender

 

	
By:

	
/s/ John C. Rowland

	
 

	
 

	
Name: John C. Rowland

	
 

	
 

	
Title:   Vice President

	
 

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HSBC BANK USA, N.A., as Lender

 

	
By:

	
/s/ Jack P. Kissane

	
 

	
 

	
Name: Jack P. Kissane

	
 

	
 

	
Title:   Vice President

	
 

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JPMORGAN CHASE BANK, N.A., as Lender

 

	
By:

	
/s/ Marc Constantino 

	
 

	
 

	
Name: Marc Constantino

	
 

	 	
Title:   Executive Director

	

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CITY NATIONAL BANK, a national banking association,

	
	
as Lender

	
	 	 	
	
By:

	
/s/ Katie Davidson

	
 

	
 

	
Katie Davidson

	
 

	 	
Vice President

	

 

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[Signature Page to Fourth Amendment to Amended and Restated Credit Agreement]

REGIONS BANK, as Lender

 

	
By:

	
/s/ Paul E. Burgan

	
 

	
 

	
Name: Paul E. Burgan

	
 

	 	
Title:   Vice President

	

 

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[Signature Page to Fourth Amendment to Amended and Restated Credit Agreement]

BRANCH BANKING AND TRUST COMPANY, as Lender

 

	
By:

	
/s/ Steve Whitcomb

	
 

	
 

	
Name: Steve Whitcomb

	
 

	 	
Title:   Senior VP

	

 

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[Signature Page to Fourth Amendment to Amended and Restated Credit Agreement]

JOINDER PAGE

 

Essex Property Trust, Inc., a Maryland corporation, as the “Guarantor” under the Credit Agreement hereby joins in the execution of this Fourth Amendment to make the affirmations set forth in Section 5 of this Fourth Amendment and to evidence its agreement to be bound by the terms and conditions of this Fourth Amendment applicable to it.  The party executing this Joinder Page on behalf of Guarantor has the requisite power and authority, and has been duly authorized, to execute this Joinder Page on behalf of Guarantor.

ESSEX PROPERTY TRUST, INC.,

a Maryland corporation, as Guarantor

 

	
By:

	
/s/  Mark J. Mikl 

	
 

	
 

	
   Name: Mark J. Mikl

	
 

	 	
   Title:   Senior Vice President

	

EXHIBIT A TO FOURTH AMENDMENT

 

EXISTING LENDERS

 

	
Existing Lenders

	 	
Original Commitment

	 	 	
Increased Commitment

	 
	
PNC Bank, National Association

	 	
$

	
75,000,000

	 	 	
$

	
40,000,000

	 
	
Bank of the West

	 	
$

	
40,000,000

	 	 	
$

	
25,000,000

	 
	
Capital One, N.A.

	 	
$

	
30,000,000

	 	 	
$

	
20,000,000

	 
	
US Bank, National Association

	 	
$

	
60,000,000

	 	 	
$

	
55,000,000

	 
	
Union Bank, N.A.

	 	
$

	
60,000,000

	 	 	
$

	
55,000,000

	 
	
Wells Fargo Bank, National Association

	 	
$

	
60,000,000

	 	 	
$

	
40,000,000

	 
	
Bank of Montreal

	 	
$

	
40,000,000

	 	 	
$

	
10,000,000

	 
	
Citibank, N.A.

	 	
$

	
60,000,000

	 	 	
$

	
40,000,000

	 
	
JPMorgan Chase Bank, N.A.

	 	
$

	
65,000,000

	 	 	
$

	
35,000,000

	 
	
HSBC Bank USA, N.A.

	 	
$

	
10,000,000

	 	 	
$

	
40,000,000

	 
	
TOTAL:

	 	
$

	
500,000,000

	 	 	 	 	 

ADDITIONAL LENDERS

 

	
Additional Lenders

	 	
Commitment

	 
	
Branch Banking and Trust Company

	 	
$

	
30,000,000

	 
	
City National Bank

	 	
$

	
30,000,000

	 
	
Regions Bank

	 	
$

	
50,000,000

	 
	
 

	 	 	 	 

A-1

SCHEDULE 1.1 TO CREDIT AGREEMENT

 

LENDERS’ NAMES, COMMITMENTS AND PRO RATA SHARES

	
Lender

	 	
Commitment

	 	 	
Pro Rata Share

	 
	
 

	 	

	 	 	

	 
	
PNC Bank, National Association

	 	
$

	
115,000,000

	 	 	 	
11.5000000

	
%

	
Bank of West

	 	
$

	
65,000,000

	 	 	 	
6.5000000

	
%

	
Capital One, N.A.

	 	
$

	
50,000,000

	 	 	 	
5.0000000

	
%

	
Comerica Bank

	 	
$

	
30,000,000

	 	 	 	
3.0000000

	
%

	
US Bank, National Association

	 	
$

	
115,000,000

	 	 	 	
11.5000000

	
%

	
Union Bank, N.A.

	 	
$

	
115,000,000

	 	 	 	
11.5000000

	
%

	
Wells Fargo, National Association

	 	
$

	
100,000,000

	 	 	 	
10.0000000

	
%

	
Bank of Montreal

	 	
$

	
50,000,000

	 	 	 	
5.0000000

	
%

	
Citibank, N.A.

	 	
$

	
100,000,000

	 	 	 	
10.0000000

	
%

	
JPMorgan Chase Bank, N.A.

	 	
$

	
100,000,000

	 	 	 	
10.0000000

	
%

	
HSBC Bank USA, N.A.

	 	
$

	
50,000,000

	 	 	 	
5.0000000

	
%

	
Branch Banking and Trust Company

	 	
$

	
30,000,000

	 	 	 	
3.0000000

	
%

	
City National Bank

	 	
$

	
30,000,000

	 	 	 	
3.0000000

	
%

	
Regions Bank

	 	
$

	
50,000,000

	 	 	 	
5.0000000

	
%

	
Total

	 	
$

	
1,000,000,000

	 	 	 	
100.00

	
%

  

1.1 - 1EXHIBIT 10.2

  

THIRD MODIFICATION AGREEMENT

This Third Modification Agreement ("Agreement") is made as of January 29, 2014, by and among ESSEX PORTFOLIO, L.P., a California limited partnership ("Borrower"), U.S. BANK NATIONAL ASSOCIATION, a national banking association, as administrative agent ("Agent"), under the Loan Agreement described below, U.S. BANK NATIONAL ASSOCIATION, a national banking association, as a Lender ("U.S. Bank"), and each of the other Lenders set forth on the signature pages hereof (and together with any other bank that becomes a party to the Loan Agreement in the future, collectively, "Lenders").

Factual Background

A.            Under a Term Loan Agreement dated November 15, 2011 (as amended by the modification agreements referenced below, the "Loan Agreement"), certain of the Lenders originally agreed to make an unsecured term loan of up to $200,000,000 (with an additional $100,000,000 "accordion" feature) to Borrower (as amended as described below, the "Loan"), subject to the terms and conditions specified therein.

B.             Borrower, Agent, and Lenders subsequently executed that certain Modification Agreement dated as of July 30, 2012 (the "First Modification Agreement"), which, among other things, extended the term of a portion of the Loan, modified the interest rate payable under the Loan, and made additional Loan proceeds available under the Loan (so that the total available principal amount of the Loan was $350,000,000, with a $150,000,000 "accordion" feature), as more fully set forth therein).

C.             Borrower, Agent, and Lenders subsequently executed that certain Second Modification Agreement dated as of August 16, 2012 (the "Second Modification Agreement"), which, among other things, modified the negative pledge and limitations on affiliate indebtedness covenants in the Loan Agreement.

D.            Borrower's obligations under the Loan are currently evidenced by (i) an Amended and Restated Note dated July 30, 2012 made payable to U.S. Bank National Association in the stated principal amount of Fifty-Three Million Five Hundred Thousand Dollars ($53,500,000), (ii) an Amended and Restated Note dated July 30, 2012 made payable to Bank of the West in the stated principal amount of Twenty-Five Million Dollars ($25,000,000), (iii) an Amended and Restated Note dated July 30, 2012 made payable to Bank of Montreal in the stated principal amount of Thirty-Six Million Dollars ($36,000,000), (iv) an Amended and Restated Note dated July 30, 2012 made payable to PNC Bank National Association in the stated principal amount of Forty-Six Million Dollars ($46,000,000), (v) an Amended and Restated Note dated July 30, 2012 made payable to Comerica Bank in the stated principal amount of Ten Million Dollars ($10,000,000), (vi) an Amended and Restated Note dated July 30, 2012 made payable to Capital One, N.A. in the stated principal amount of Twenty Million Dollars ($20,000,000), (vii) a Note dated July 30, 2012 made payable to Citibank, N.A.  in the stated principal amount of Fifteen Million Dollars ($15,000,000), (viii) an Amended and Restated Note dated July 30, 2012 made payable to Union Bank, N.A. in the stated principal amount of Forty-Six Million Dollars ($46,000,000), (ix) an Amended and Restated Note dated July 30, 2012 made payable to KeyBank National Association in the stated principal amount of Twenty-Five Million Dollars ($25,000,000), (x) an Amended and Restated Note dated July 30, 2012  made payable to Wells Fargo Bank National Association in the stated principal amount of Forty-Eight Million Five Hundred Thousand Dollars ($48,500,000), and (xi) an Amended and Restated Note dated July 30, 2012 made payable to HSBC Bank USA, N.A. in the stated principal amount of Twenty-Five Million Dollars ($25,000,000) (collectively, the "Note").

-1-

E.             As of the date of this Agreement the principal balance outstanding under the Loan is $350,000,000.

F.             In connection with the Loan, Essex Property Trust, Inc., a Maryland corporation ("Guarantor"), executed in favor of Agent and Lenders that certain Payment Guaranty dated as of November 15, 2011 (the "Guaranty").

G.             Subject to the terms and conditions of this Agreement, Borrower, Agent and Lenders have agreed to modify the terms of the Loan to, among other things, modify the interest rate payable under the Loan and amend certain financial covenants, as more fully set forth herein.

H.            As used in this Agreement, the term "Loan Documents" means the Loan Agreement, the First Modification Agreement, the Second Modification Agreement, the Note, the Guaranty and the other "Loan Documents" described in the Loan Agreement, all as amended or modified hereby.  This Agreement shall also constitute a Loan Document.  Capitalized terms used herein without definition have the meanings ascribed to them in the Loan Agreement.

Agreement

Therefore, Borrower, Agent and Lenders agree as follows:

1.              Recitals.  The recitals set forth above in the Factual Background are true, accurate and correct, and such recitals hereby are incorporated herein as an agreement of Borrower, Agent and Lenders.

2.              Reaffirmation of Obligations.  Borrower reaffirms all of its Obligations under the Loan Documents, and Borrower acknowledges that it has no claims, offsets or defenses with respect to the payment of sums due under the Note or any other Loan Document.  Without limiting the foregoing, Borrower (a) reaffirms Agent's right, following the occurrence of any Event of Default, subject only to the terms and conditions of the Loan Agreement, to apply any and all payments made by Borrower or otherwise received by Agent or Lenders with respect to the Loan to the obligations owing by Borrower under the Loan Documents in such order and manner deemed appropriate by Agent in its sole discretion (subject only, as between Agent and Lenders, to the provisions of the Loan Agreement governing the application of payments as between Agent and Lenders), and (b) expressly waives all of its rights under applicable law or otherwise to direct Agent as to such application or to designate the portion of the obligations to be satisfied.

-2-

3.              Exiting Lender; Assignment and Assumption of Exiting Lender’s Commitment.  On the Effective Date, KeyBank National Association's (the "Exiting Lender") existing Commitment is being assigned to and assumed by other Lenders as indicated on Schedule 1.1 attached hereto (i.e., U.S. Bank National Association's Commitment is increasing by $7,000,000, from $53,500,000 to $60,500,000, Wells Fargo Bank, National Association's Commitment is increasing by $6,000,000, from $48,500,000 to $54,500,000, PNC Bank National Association's Commitment is increasing by $6,000,000, from $46,000,000 to $52,000,000, and Union Bank, N.A.'s Commitment is increasing by $6,000,000, from $46,000,000 to $52,000,000, each of the foregoing Lenders herein referred to as the “Assuming Lenders”).  Such assignment and assumption by the Assuming Lenders shall be automatically be effective on the Effective Date, and thereafter, Exiting Lender shall be released from its obligations under this Agreement and shall cease to be a party to the Loan Agreement but shall continue to be entitled to the benefits of Sections 3.1, 3.3, 3.4, and 10.4 with respect to facts and circumstances occurring prior to the effective date of such assignment.  The modified Commitments of the remaining existing Lenders following the Effective Date shall be as set forth in the new Schedule 1.1 attached to this Agreement, effective as of the Effective Date and such Commitments shall be evidenced by the existing Notes and amended and restated Notes in the amount of the applicable new Commitments as to the Assuming Lenders.  None of the new Notes are intended to, nor shall they be construed to, constitute a refinancing, repayment, accord or satisfaction, or novation of the Exiting Lender’s Note or any of the obligations contained therein.

 

4.              New Definitions.  The "Definitions" section of the Loan Agreement is hereby amended by adding the following definitions, in appropriate alphabetical order:

 

"Third Modification Agreement":  Means that certain Third Modification Agreement dated as of January 29, 2014 executed by and among Borrower, Administrative Agent and the Lenders.

 

"Modification Fee Letter":  Means that certain letter dated as of January 29, 2014 executed by and among Borrower and Administrative Agent.

 

5.              Existing Definitions.

 

(a)            The definition of "Applicable Committed Loan Margin" contained in the "Definitions" section of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

 

"Applicable Committed Loan Margin" means the Applicable LIBOR Committed Loan Margin or the Applicable Reference Rate Committed Loan Margin determined from the following pricing grid based on the current published or private ratings of Guarantor's senior unsecured long term debt, as provided below:

-3-

	
TIER

 

	
GUARANTOR'S SENIOR 

UNSECURED LONG 

TERM DEBT RATING

 

	
APPLICABLE LIBOR

COMMITTED LOAN 

MARGIN

 

	
APPLICABLE 

REFERENCE 

RATE 

COMMITTED 

LOAN 

MARGIN

 

	
I

	
A- and/or A3 or better

	
1.00%

	
 0%

	
II

	
BBB+ and/or Baal

	
1.05%

	
.05%

	
III

	
BBB and/or Baa2

	
1.20%

	
.20%

	
IV

	
BBB- and/or Baa3

	
1.55%

	
.55%

	
V

	
Less than BBB- and/or Baa3

	
2.00%

	
1.00%

Borrower shall provide to Administrative Agent written evidence of the current rating or ratings on Guarantor's senior unsecured long term debt by any of Moody's, S&P and/or Fitch, if such rating agency has provided to Guarantor a rating on such senior unsecured long term debt, which evidence shall be reasonably acceptable to Administrative Agent; provided, that, at a minimum, Guarantor must provide such a rating from either Moody's or S&P.  In the event that Guarantor has a rating on its senior unsecured long term debt provided by (a) both Moody's and S&P, (b) both Moody's and Fitch, (c) both S&P and Fitch, or (d) each of Moody's, S&P and Fitch, and there is a difference in rating between such rating agencies, the Applicable Committed Loan Margin shall be based on the higher rating.  Changes in the Applicable Committed Loan Margin shall become effective on the first day following the date on which any of Moody's, S&P or Fitch that has provided Guarantor a rating on Guarantor's senior unsecured long term debt changes such rating.  Borrower shall notify Administrative Agent of any such changes in Guarantor's senior unsecured long term debt pursuant to and in accordance with Section 6.4(i); provided, however, that any increase in the Applicable Committed Loan Margin that results from a change in the rating of Guarantor's senior unsecured long term debt shall become effective on the first day following the date on which the rating agency changes such rating, as provided in the immediately preceding sentence, whether or not Borrower has notified Administrative Agent of any such change.  On the Closing Date, the Applicable Committed Loan Margin shall be based on Tier III."

 

(a)            The definition of "Capitalization Rate" contained in the "Definitions" section of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

 

"Capitalization Rate” means 6.00% from the Effective Date (as defined in the Third Modification Agreement)."

 

6.              Further Modifications to the Loan Agreement.  The Loan Documents are hereby further amended as follows:

 

(a)             Section 6.10 (Certain Debt Limitations) of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

-4-

"Certain Debt Limitations.  (a) The Outstanding Amount of all Loans shall not exceed the Availability at any time and (b) the amount of Secured Debt at the end of each calendar quarter shall not exceed 40% of the Gross Asset Value at such time."

 

(b)            Section 6.12 (Maximum Unsecured Debt Leverage Ratio) of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

 

"Maximum Unsecured Debt Leverage Ratio.  The ratio determined at the end of each calendar quarter of (a) the Unencumbered Asset Value for the four consecutive calendar quarter period ending on such date divided by (b) the amount of Unsecured Debt for such four calendar quarter period shall not be less than 1.50:1.0."

 

(c)             Section 6.13 (Maximum Quarterly Dividends) of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

 

“During the continuance of any Event of Default, aggregate distributions shall not exceed the minimum amount that Guarantor must distribute to its shareholders in order to qualify as a real estate investment trust under the provisions of Internal Revenue Code Sections 856 and 857.”

 

(d)            The following new Section 7.17 is hereby added as follows:

 

“Section 7.17.  OFAC; FCPA.  None of (a) Borrower, any Subsidiary (as hereinafter defined) of Borrower or Guarantor and (b) each Person that, directly or indirectly, is in Control (as hereinafter defined) of a Person described in clause (a) above, is currently subject to any United States sanctions administered by the Office of Foreign Asset Control of the Department of Treasury of the United States (“OFAC”); and Borrower will not directly or indirectly use the proceeds of the Loans or otherwise make available such proceeds to any Person, for the purpose of financing the activities of any Person currently subject to any United States sanctions administered by OFAC.  In addition, Borrower hereby agrees to provide to Administrative Agent and Lenders any additional information that Administrative Agent or any Lender deems reasonably necessary from time to time in order to ensure compliance with all applicable laws concerning money laundering and similar activities.  For purposes of this Section 7.17, (i) “Subsidiary” shall mean, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests  are, as of such date, directly or indirectly owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent and (ii) “Control” shall mean the direct or indirect (x) ownership of, or power to vote, 51% or more of the issued and outstanding equity interests having ordinary voting power for the election of directors of a Person or other Persons performing similar functions for such Person, or (y) power to direct or cause the direction of the management and policies of a Person whether by ownership of equity interests, contract or otherwise.  To Borrower’s knowledge, no part of the proceeds of the Loans will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.”

-5-

(e)             Effective as of the Effective Date, Schedule 1.1 to the Loan Agreement is hereby deleted, and the new Schedule 1.1 attached to this Agreement is hereby substituted in place thereof, and the new Schedule 1.1 attached hereto shall, from and after the Effective Date, be the governing Schedule for the Commitments and the Pro Rata Shares of the Lenders under the Loan Agreement and with respect to the Loan.

 

(f)              In order to properly reflect and evidence the new Commitments and Pro Rata Shares of each of the Lenders under the Loan Agreement as modified by this Agreement, Borrower shall execute and deliver new Notes to each of the Assuming Lenders whose Commitments are changing as described herein in the amount of their new Commitments, substantially in the same form of Note as previously executed by Borrower in connection with the existing Loan Agreement, with such changes thereto as Agent shall reasonably require.  Following receipt of the new Notes, the superseded old Note for the Exiting Lender and the Notes being replaced for the applicable Lenders shall be marked "cancelled" and returned to the Borrower.

 

7.              No Other Modifications.  Except as expressly set forth in this Agreement, the Loan Documents shall be and remain unmodified and in full force and effect

 

8.              General Release.  As further inducement to Agent and Lenders to enter into this Agreement, Borrower and Guarantor hereby release Agent and Lenders as follows:

 

(a)            Borrower and Guarantor and their heirs, successors and assigns (collectively, the "Releasing Parties") do hereby release, acquit and forever discharge Agent and Lenders of and from any and all claims, demands, obligations, liabilities, indebtedness, breaches of contract, breaches of duty or any relationship, acts, omissions, misfeasance, malfeasance, cause or causes of action, debts, sums of money, accounts, compensation, contracts, controversies, promises, damages, costs, losses and expenses of every type, kind, nature, description, or character, whether known or unknown, suspected or unsuspected, liquidated or unliquidated, each as though fully set forth herein at length, which in any way, have, prior to the Effective Date, arisen out of, are connected with or related to the Loan Documents, this Agreement or any earlier and/or other agreement or document referred to therein (collectively, the "Released Claims").

 

(b)            The agreement of the Releasing Parties, as set forth in the preceding subparagraph (a) shall inure to the benefit of the successors, assigns, insurers, administrators, agents, employees, and representatives of Agent and Lenders.

 

(c)            The Releasing Parties have read the foregoing release, fully understand the legal consequences thereof and have obtained the advice of counsel with respect thereto.  The Releasing Parties further warrant and represent that they are authorized to make the foregoing release.

-6-

(d)            Each Releasing Party acknowledges that the foregoing release shall extend to Released Claims which the Releasing Party does not know or suspect to exist in Releasing Party's favor at the time of executing this Agreement, regardless of whether such Released Claims, if known by such Releasing Party, would have materially affected such Releasing Party's decision to enter into this Agreement.  Each Releasing Party acknowledges that they are familiar with Section 1542 of the Civil Code of the State of California which provides as follows:

 

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

 

Each Releasing Party waives and relinquishes any right or benefit which it has or may have under Section 1542 of the Civil Code of the State of California and any similar provision of the statutory or non-statutory law of any other jurisdiction, to the full extent that it may lawfully waive all such rights and benefits.  In connection with such waiver and relinquishment, each Releasing Party acknowledges that it is aware that it or its attorneys or agents may hereafter discover facts in addition to or different from those which it now knows or believes to exist with respect to the subject matter of this Section 8 or the other parties hereto, but that each Releasing Party intends hereby fully, finally and forever to settle, waive and release all of the Released Claims, known or unknown, suspected or unsuspected, which now exist or may exist hereafter between Releasing Parties and Agent and Lenders in connection with the Loan, except as otherwise expressly provided in this Section 8.  This foregoing release shall be and remain in effect notwithstanding the discovery or existence of any such additional or different facts.

 

(e)            Each Releasing Party warrants and represents that it is the sole and lawful owner of all right, title and interest in and to all of the respective Released Claims released hereby and that it has not heretofore voluntarily, by operation of law or otherwise, assigned or transferred or purported to assign or transfer to any person or entity any such claim or any portion thereof.

 

(f)             This release is not to be construed and does not constitute an admission of liability on the part of Agent or Lenders.  This release shall constitute an absolute bar to any Released Claim of any kind, whether such claim is based on contract, tort, warranty, mistake or any other theory, whether legal, statutory or equitable.  The Releasing Parties specifically agree that any

attempt to assert a claim barred hereby shall subject each of them to the provisions of applicable law setting forth the remedies for the bringing of groundless, frivolous or baseless claims or causes of action.

 

	
__________

	
__________

	
Borrower's Initials

	
Guarantor's Initials

-7-

9.              Conditions Precedent.  Before this Agreement becomes effective and any party becomes obligated under it, all of the following conditions shall have been satisfied in a manner acceptable to Agent in the exercise of Agent's sole judgment (except as waived or reserved by Agent in writing):

 

(a)            Agent shall have received fully executed originals of this Agreement, the new Notes for each Lender (as specified in Section 6(e) above of this Agreement), the Modification Fee Letter and any other documents which Agent may reasonably require or request in accordance with this Agreement or the other Loan Documents (including, without limitation, pertaining to the Patriot Act).

 

(b)            Guarantor shall have executed and delivered to Agent the attached Consent of Guarantor.

 

(c)            Borrower shall have paid to Agent all fees set forth in the Modification Fee Letter.

 

(d)            Agent and Lenders shall have received reimbursement, in immediately available funds, of all reasonable actual, out-of-pocket costs and expenses incurred by Agent and Lenders in connection with the Loan or this Agreement, including the legal fees, charges and expenses of Agent's counsel (determined on the basis of such counsel's generally applicable rates, which may be higher than the rates such counsel charges Agent in certain matters).

 

(e)            Agent shall have received all documents evidencing the formation, organization and valid existence of the Borrower and Guarantor (to the extent such documents have been amended or modified since the original Closing Date) and the authorization for the execution, delivery, and performance of the Agreement.

 

(f)             No change shall have occurred in the financial condition of Borrower or Guarantor, which would have, in Agent's sole judgment, a material adverse effect on Borrower's or Guarantor's ability to repay the Loan or otherwise perform its obligations under the Loan Documents.

 

(g)            Exiting Lender shall have received the applicable payment from the Assuming Lenders necessary to pay Exiting Lender an amount equal to the outstanding balance of the Loan under the Exiting Lender’s Note as of the Effective Date.  Upon receipt of such amounts, the assignment and assumption of the Exiting Lender’s Note, in the pro rata portions indicated herein, shall immediately and automatically be effective.

 

(h)            Borrower's representations and warranties set forth in Section 10 below are  true and correct in all respects.

 

(i)             The conditions precedent shall have been satisfied prior to January 29, 2014  unless waived or reserved by Agent in writing.

 

(j)              Each of the Lenders shall have received credit approval from the appropriate credit committee or other authority within that Lender as to its Commitment and performance of its obligations under the Loan Agreement and other Loan Documents, as modified by this Agreement.

-8-

10.           Borrower's Representations and Warranties.  Borrower represents and warrants to Agent and Lenders as follows:

 

(a)            Loan Documents.  Except as previously disclosed to Agent in writing, all representations and warranties made and given by Borrower in the Loan Documents are true, accurate and correct in all material respects.  Borrower is in compliance with all covenants, terms and conditions in effect and as required under the Loan Documents (as modified by this Agreement).

 

(b)            No Default.  No Event of Default has occurred and is continuing, and no event has occurred and is continuing which, with notice or the passage of time or both, would be an Event of Default.

 

(c)            Borrowing Entity.  Borrower is a limited partnership which is duly organized, validly existing and in good standing under the laws of the State of California and is duly qualified to conduct business, and is in good standing, in the State of California and, to the extent legally required,  in each other state in which it conducts business.  Except as previously disclosed in writing by Borrower to Agent, there have been no changes in the organization, composition, ownership structure or formation documents of Borrower since the Closing Date.  Borrower's execution and delivery of this Agreement and the continued performance by Borrower of its obligations under the Loan Documents to which it is a party have been duly authorized by all necessary action on the part of Borrower and any other required parties.  This Agreement has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors' rights.

 

11.           Incorporation.  This Agreement shall form a part of each Loan Document, and all references to a given Loan Document shall mean that document as modified pursuant to this Agreement.  For purposes of this Agreement, the "Effective Date" shall be the date that Agent notifies Borrower that all of the conditions precedent set forth in Section 9 hereof have been satisfied in a manner acceptable to Agent in the exercise of Agent's sole judgment, or waived or reserved by Agent in writing.

 

12.           No Prejudice; Reservation of Rights.  Except as expressly set forth herein, this Agreement shall not prejudice any rights or remedies of Agent or Lenders under the Loan Documents.  Agent and Lenders reserve, without limitation, all rights which it has against any endorser of the Note.

 

13.           No Impairment.  Except as specifically hereby amended, the Loan Documents shall each remain unaffected by this Agreement and all such documents shall remain in full force and effect.

-9-

14.           Integration.  The Loan Documents, including this Agreement: (a) integrate all the terms and conditions mentioned in or incidental to the Loan Documents; (b) supersede all oral negotiations and prior and other writings with respect to their subject matter; and (c) are intended by the parties as the final expression of the agreement with respect to the terms and conditions set forth in those documents and as the complete and exclusive statement of the terms agreed to by the parties.  If there is any conflict between the terms, conditions and provisions of this Agreement and those of any other agreement or instrument in effect as of the Effective Date, including any of the other Loan Documents, the terms, conditions and provisions of this Agreement shall prevail.

 

15.           Miscellaneous.  This Agreement and any attached consents or exhibits requiring signatures may be executed in counterparts, and all counterparts shall constitute but one and the same document.  If any court of competent jurisdiction determines any provision of this Agreement or any of the other Loan Documents to be invalid, illegal or unenforceable, that portion shall be deemed severed from the rest, which shall remain in full force and effect as though the invalid, illegal or unenforceable portion had never been a part of the Loan Documents.  This Agreement shall be governed by the laws of the State of California, without regard to the choice of law rules of that State.  As used here, the word "include(s)" means "includes(s), without limitation," and the word "including" means "including, but not limited to."

 

[Signatures on following page]

-10-

	
 

	
Borrower:

 

ESSEX PORTFOLIO, L.P.,

a California limited partnership

	 				
	 	By: 	ESSEX PROPERTY TRUST, INC.,	
	 		a Maryland corporation, its general partner	
	 				
	
 

		
By:

	
/s/ Mark J. Mikl

	
	
 

		
 

	
Name: Mark J. Mikl

	
	
 

		
 

	
Title:  Senior Vice President

	

	
 

	
925 East Meadow Drive

	
 

	
Palo Alto, CA 94303

	
 

	
Attn:    Mark J. Mikl (facsimile: (650) 843-1514)

Jordan E. Ritter (facsimile: (650) 858-1372)

Michael T. Dance (facsimile: (650) 858-0139)

Internet Website: www.essexpropertytrust.com

 

	
Agent:

	
	 	
	
U.S. BANK NATIONAL ASSOCIATION,

	
	
as Administrative Agent

	
	 	 	
	
By:

	
/s/ Michael Diemer

	
 

	
 

	
Name: Michael Diemer

	
 

	 	
Title:   Vice President

	

 

[Signatures Continue on the Next Page]

[Signature Page to Third Modification Agreement]

S-1

	
Lenders:

	
	 	
	
U.S. BANK NATIONAL ASSOCIATION,

	
	
as Lender

	
	 	 	
	
By:

	
/s/ Michael Diemer

	
 

	
 

	
Name: Michael Diemer

	
 

	 	
Title:   Vice President

	

 

[Signatures Continue on the Next Page]

[Signature Page to Third Modification Agreement]

S-2

	
WELLS FARGO BANK, NATIONAL ASSOCIATION,

	
	
as Lender

	
	 	 	
	
By:

	
/s/ Kevin A. Stacker

	
 

	
 

	
Kevin A. Stacker

	
 

	 	
Vice President

	

 

[Signatures Continue on the Next Page]

[Signature Page to Third Modification Agreement]

S-3

	
UNION BANK, N.A.,

	
	
as Lender

	
	 	 	
	
By:

	
/s/ Thomas E. Little

	
 

	
 

	
Thomas E. Little, Vice President

	
 

 

[Signatures Continue on the Next Page]

[Signature Page to Third Modification Agreement]

S-4

	
PNC BANK, NATIONAL ASSOCIATION,

	
	
as Lender

	
	 	 	
	
By:

	
/s/ Nicolas Zitelli

	
 

	
 

	
Nicolas Zitelli

	
 

	 	Vice President	

 

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[Signature Page to Third Modification Agreement]

S-5

	
BANK OF MONTREAL,

	
	
as Lender

	
	 	 	
	
By:

	
/s/ Gwendolyn Gatz

	
 

	
 

	
Gwendolyn Gatz,

	
 

	 	Vice President	

 

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[Signature Page to Third Modification Agreement]

S-6

	
BANK OF THE WEST,

	
	
as Lender

	
	 	 	
	
By:

	
/s/ Michael Pavao

	
 

	
 

	
Name:  Michael Pavao

	
 

	 	Title:    Vice President	
	  	 	
	By: 	 /s/ Benjamin Arroyo	
	 	Name:  Benjamin Arroyo	
	 	Title:    Vice President	

 

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[Signature Page to Third Modification Agreement]

S-7

	
HSBC BANK USA, N.A.,

	
	
as Lender

	
	 	 	
	
By:

	
/s/ Jack P. Kissane

	
 

	
 

	
Jack P. Kissane

	
 

	 	Vice President	

 

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[Signature Page to Third Modification Agreement]

S-8

	
CAPITAL ONE, N.A.,

	
	
as Lender

	
	 	 	
	
By:

	
/s/ Frederick H. Denecke

	
 

	
 

	
Frederick H. Denecke

	
 

	 	Senior Vice President	

 

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[Signature Page to Third Modification Agreement]

S-9

	
CITIBANK, N.A.,

	
	
as Lender

	
	 	 	
	
By:

	
/s/ John C. Rowland

	
 

	
 

	
John C. Rowland, Vice President

	
 

 

[Signatures Continue on the Next Page]

[Signature Page to Third Modification Agreement]

S-10

	
COMERICA BANK,

	
	a Texas banking association,	
	
as Lender

	
	 	 	
	
By:

	
/s/ Sam F. Meehan

	
 

	
 

	
Sam F. Meehan, Vice President

	
 

 

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[Signature Page to Third Modification Agreement]

S-11

CONSENT OF GUARANTOR

The undersigned, having read and understood the foregoing Third Modification Agreement ("Agreement"), hereby (i) consents to all of the terms, conditions and provisions of the Agreement and the transactions contemplated by the Agreement, including, but not limited to, Sections 2 through 8, inclusive, thereof, (ii) agrees that the Agreement does not terminate any of the obligations of the undersigned to Agent and Lenders under the Guaranty, and (iii) reaffirms its obligations under the Guaranty in light of the Agreement (including, but not limited to, Sections 2 through 8, inclusive, thereof).  The undersigned, having reread the Guaranty and with advice of its own counsel, hereby reaffirm and restate all waivers, authorizations, agreements and understandings set forth in the Guaranty, as though set forth in full herein.  Capitalized terms used in this consent but not otherwise defined shall have the meanings ascribed to such terms in the Agreement.

 

Dated as of January 29, 2014.

 

		
"Guarantor"

 

ESSEX PROPERTY TRUST, INC.,

 a Maryland corporation

	
		
 

	
 

	
		By:  	/s/ Mark J. Mikl	
		Name:	Mark J. Mikl	
		Title:	Senior Vice President	

 

CONSENT

SCHEDULE 1.1

 

LENDERS NAMES, COMMITMENTS AND PRO RATA SHARES

 

	
LENDER

	 	
TERM

COMMITMENT

	 	
PRO RATA

SHARE % *

	
US Bank National Association

	 	
$

	
60,500,000

	 	
 

	
Wells Fargo Bank National Association

	 	
$

	
54,500,000

	 	
 

	
PNC Bank, National Association

	 	
$

	
52,000,000

	 	
 

	
Union Bank

	 	
$

	
52,000,000

	 	
 

	
Bank of Montreal

	 	
$

	
36,000,000

	 	
 

	
Bank of the West

	 	
$

	
25,000,000

	 	
 

	
HSBCBank USA, N.A.

	 	
$

	
25,000,000

	 	
 

	
Capital One, N.A.

	 	
$

	
20,000,000

	 	
 

	
Citibank, N.A.

	 	
$

	
15,000,000

	 	
 

	
Comerica Bank

	 	
$

	
10,000,000

	 	
 

	
TOTAL

	 	
$

	
350,000,000

	 	
100.00%

*  The Pro Rata Share Rata Percentage for a Lender shall be equal to the percentage obtained by dividing such Lender's Commitment by the total aggregate Commitment of all Lenders, as calculated by Administrative Agent.

 

SCHEDULE 1.1

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