<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
----------------------------------
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): DECEMBER 15, 1999
BURNHAM PACIFIC PROPERTIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
MARYLAND 1-9524 33-0204126
- ---------------------------- ----------------------- -------------------
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (IRS EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
110 WEST A STREET, SUITE 900, SAN DIEGO, CALIFORNIA 92101-3711
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(619) 652-4700
--------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
N/A
---
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
IF CHANGED SINCE LAST REPORT )
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ITEM 5. OTHER EVENTS.
On December 15, 1999, Burnham Pacific Properties, Inc. (the "Company")
completed certain modifications to its joint venture with the California Public
Employees' Retirement System ("CalPERS").
As part of the modification, the Company exchanged substantially all of
its equity interest in the venture, BPP Retail, LLC, for a total consideration
of approximately $39.4 million, comprised of approximately $29.1 million in cash
and an in-kind property distribution valued at approximately $10.3 million. The
cash proceeds were used to reduce outstanding indebtedness.
In addition, as part of the modification, the Company sold two
properties, the Stanford Ranch Shopping Center and the Foothill Plaza Shopping
Center, to BPP Retail for approximately $18.9 million, comprised of
approximately $12.8 million in cash and the assumption by BPP Retail of
approximately $6.1 million in existing mortgage debt. Cash proceeds were used to
reduce outstanding indebtedness and for general working capital purposes.
The Company will continue to serve as the manager of BPP Retail's
assets and would be entitled to continue to receive fees for asset management,
leasing, acquisition and disposition activities, but will no longer be eligible
for the incentive fee attributable to increases in asset values.
Copies of the agreements relating to the aforementioned modifications,
as well as agreements relating to necessary amendments to, and waivers and
consents under, BPP Retail's credit facility with The Chase Manhattan Bank, are
attached as Exhibits 10.1 through 10.5 to this Current Report on Form 8-K. In
addition, attached as Exhibit 99.1 to this Current Report on Form 8-K is the
press release of the Company, dated January 6, 2000.
This Current Report on Form 8-K contains "forward-looking statements"
that predict or indicate future events or trends or that do not relate to
historical matters. The Company cannot assure the future events or outcomes of
the matters described in these statements; rather, these statements merely
reflect the Company's current expectations of the approximate outcome of the
matter discussed. Investors should read the documents the Company files from
time to time with the SEC, specifically the risk factors that were disclosed in
its Registration Statement on Form S-3 that was filed with the SEC on August 13,
1999. Investors should be aware that the risk factors contained in that Form S-3
may not be exhaustive. Therefore, the Company recommends that investors read the
information in that Form S-3 together with other reports and documents that the
Company files with the SEC from time to time, including its Forms 10-K, 10-Q,
and 8-K, which may supplement, modify, supersede or update those risk factors.
2
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
10.1 Second Amendment to Operating Agreement of BPP Retail, LLC,
dated as of December 15, 1999, between Burnham Pacific
Employees LLC and CalPERS.
10.2 Contribution Agreement, dated as of November
30, 1999, between Burnham Pacific Employees
LLC and CalPERS.
10.3 Bell Gardens Ownership Agreement, dated as
of December 15, 1999, by and among Burnham
Pacific Operating Partnership, L.P., Burnham
Pacific Employees LLC, BPP Retail, LLC and
CalPERS.
10.4 Waiver, Amendment and First Consent, dated
as of December 15, 1999, by and among BPP
Retail, LLC, the Lenders named therein, The
Chase Manhattan Bank, as Administrative
Agent, Burnham Pacific Employees LLC,
Burnham Pacific Operating Partnership, L.P.
and CalPERS.
10.5 Waiver, Amendment and Second Consent to
Credit Agreement, dated as of December 15,
1999, by and among BPP Retail, LLC, BPAC
Texas, L.P., the Lenders named therein and
The Chase Manhattan Bank, as Administrative
Agent.
99.1 Press Release, dated January 6, 2000, relating to certain
modifications to BPP Retail, LLC, the Company's joint venture
with CalPERS.
</TABLE>
3
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, as amended, the Company has duly caused this report to be filed on
its behalf by the undersigned, thereunto duly authorized.
BURNHAM PACIFIC PROPERTIES, INC.
Dated: January 14, 2000 By: /s/ Daniel B. Platt
-------------------------
Name: Daniel B. Platt
Title: Chief Financial Officer
4
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
10.1 Second Amendment to Operating Agreement of BPP Retail, LLC,
dated as of December 15, 1999, between Burnham Pacific
Employees LLC and CalPERS.
10.2 Contribution Agreement, dated as of November
30, 1999, between Burnham Pacific Employees
LLC and CalPERS.
10.3 Bell Gardens Ownership Agreement, dated as
of December 15, 1999, by and among Burnham
Pacific Operating Partnership, L.P., Burnham
Pacific Employees LLC, BPP Retail, LLC and
CalPERS.
10.4 Waiver, Amendment and First Consent, dated
as of December 15, 1999, by and among BPP
Retail, LLC, the Lenders named therein, The
Chase Manhattan Bank, as Administrative
Agent, Burnham Pacific Employees LLC,
Burnham Pacific Operating Partnership, L.P.
and CalPERS.
10.5 Waiver, Amendment and Second Consent to
Credit Agreement, dated as of December 15,
1999, by and among BPP Retail, LLC, BPAC
Texas, L.P., the Lenders named therein and
The Chase Manhattan Bank, as Administrative
Agent.
99.1 Press Release, dated January 6, 2000, relating to certain
modifications to BPP Retail LLC, the Company's joint venture
with CalPERS.
</TABLE>
5
<PAGE>
Exhibit 10.1
SECOND AMENDMENT TO OPERATING AGREEMENT
OF
BPP RETAIL, LLC,
a Delaware limited liability company
THIS SECOND AMENDMENT TO OPERATING AGREEMENT ("Second Amendment") is
dated as of December 15, 1999, by and between STATE OF CALIFORNIA PUBLIC
EMPLOYEES' RETIREMENT SYSTEM, a unit of the State and Consumer Services Agency
of the State of California ("CalPERS"), with offices at 400 P Street,
Sacramento, California 95814, and BURNHAM PACIFIC EMPLOYEES LLC, a Delaware
limited liability company ("BPE" or the "Manager"), with offices at 110 West A
Street, Suite 900, San Diego, California 92101.
RECITALS:
A. BPP Retail, LLC, a Delaware limited liability company (the
"Company"), was formed by the filing of a Certificate of Formation with the
Secretary of State of the State of Delaware on September 15, 1998. The
management and operation of the Company is governed by the terms of that certain
Operating Agreement dated August 31, 1998, by and between CalPERS, as a member
of the Company, and Burnham Pacific Operating Partnership, L.P., a Delaware
limited partnership ("BPOP"), the predecessor to BPE as a member and as the
Manager of the Company (the "Original Agreement"), as amended by that certain
First Amendment dated as of June 1, 1999 to the Original Agreement ( the "First
Amendment," and the Original Agreement, as amended by the First Amendment, the
"Amended Agreement").
B. CalPERS and the Manager now wish to further amend the Amended
Agreement, and, in connection therewith, to enter into certain other
transactions with the Company.
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, and the mutual covenants herein
contained, the parties hereto agree as follows:
1. DEFINED TERMS. Capitalized terms used herein and not defined shall
have the same meaning as ascribed thereto in the Amended Agreement. As used in
this Second Amendment:
"BELL GARDENS PROPERTY" means that certain real property located at
6811 Eastern Avenue in Bell Gardens, California and legally described on
EXHIBIT A to this Second Amendment.
"CALPERS CONTRIBUTION" means a Capital Contribution by CalPERS in cash
in an amount equal to the then-current Capital Account of the Manager, MINUS the
sum of (a) the agreed fair market value of the Bell Gardens Property (less
11.23% of the difference between the fair market value of the Bell Gardens
Property and the
<PAGE>
credit the Manager received to its Capital Account at the time such property was
contributed to the Companyand (b) $250,000. The CalPERS Contribution shall
initially be made in the estimated amount of $29,236,484 (based upon a
$10,200,000 estimated valuation of the Bell Gardens Property). This amount shall
be subject to an adjustment, if necessary, to be made promptly upon completion
of an independent third-party valuation of the Bell Gardens Property. This
adjustment will be made by means of either an additional capital contribution by
CalPERS to the Company for immediate distribution to the Manager, or a
contribution of capital by the Manager to the Company followed by an immediate
distribution thereof to CalPERS, as the case may be.
"EXISTING SECTION" refers to a section of the Amended Agreement.
"MANAGER DISTRIBUTIONS" is defined in Section 2(b).
"NON-CONTROLLED SUBSIDIARY" means a corporation, all of the capital
stock of which is owned by BPPI and its executive officers or directors,
provided that at least 95% of the economic interest attributable to such
corporation's capital stock is held by BPPI.
2. CERTAIN TRANSACTIONS.
(a) CALPERS CAPITAL CONTRIBUTION. On or prior to December 20, 1999,
CalPERS shall make the CalPERS Contribution to the Company. The amount of the
Capital Contributions made by BPOP and BPE to the Company shall be verified by
CalPERS and the Manager prior to the CalPERS Contribution.
(b) DISTRIBUTIONS TO THE MANAGER. Immediately after receipt of the
CalPERS' Contribution, the Company shall (a) make a cash Distribution to the
Manager in the amount of the CalPERS Contribution, and (b) make a Distribution
in kind to the Manager of the Bell Gardens Property. Title to such property is
currently held by BPOP as nominee on behalf of the Company, and the Manager
hereby requests that the Distribution of the Bell Gardens Property be effected
by means of a mutually acceptable written instrument. (The foregoing cash and
in-kind Distributions are herein referred to as the "Manager Distributions.")
The Manager Distribution will be reported on the tax returns of the Company in
the manner set forth on EXHIBIT B to this Second Amendment.
Immediately upon completion of the Manager Distributions: (i) the Manager shall
have a Percentage Interest of 1% and a Capital Account of $250,000, and (ii)
CalPERS shall have a Percentage Interest of 99% and a Capital Account of
$360,826,852 (subject to final verification by the accounting departments of
CalPERS and the Manager).
(c) CONDITIONS TO CALPERS CONTRIBUTION AND MANAGER DISTRIBUTIONS. The
CalPERS Contribution and the Manager Distributions shall be subject to the
satisfaction by the Manager of the following conditions:
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(i) REPRESENTATIONS AND WARRANTIES. The Manager shall, by means
of a certificate of an Officer of BPPI (in its capacity as the general partner
of the manager of the Manager) make the following representations and warranties
to CalPERS:
(A) The Company is a limited liability company duly formed, validly
existing and in good standing under the laws of the State of
Delaware. The Company has all requisite power and authority to
carry on its business as now conducted.
(B) All of the Membership Interests of the Company have been validly
issued in accordance with applicable law and the Amended
Agreement, and are held of record by CalPERS or BPE. The Manager's
Membership Interest is free and clear of any pledge, lien,
security interest, encumbrance, claim or equitable interest (other
than security interests granted to secure the indebtedness
identified on EXHIBIT C to this Second Amendment, which security
interests shall be released concurrently with the Manager
Distributions) and the partial liquidation of such interest as a
result of the Manager Distribution is not in violation of (x) any
preemptive right, co-sale right, right of first refusal or similar
right, or (y) any agreement to which the Manager is a party.
(C) The Manager has obtained all necessary corporate approvals and
authorizations for the transactions contemplated by this Second
Amendment and all third party consents and approvals that may be
required in order to consummate the transactions contemplated
herein.
(ii) THIRD PARTY CONSENTS. The Manager shall have obtained all
necessary corporate approvals and authorizations for the transactions
contemplated by this Second Amendment and all third party consents and approvals
that may be required in order to consummate the transactions contemplated
herein, in form and content satisfactory to CalPERS.
3. AMENDMENTS TO THE AMENDED AGREEMENT. The following amendments to
the Amended Agreement shall become effective without further action by either
Member immediately from and after the occurrence of the Manager Distributions:
(a) Notwithstanding any provision of the Amended Agreement to the
contrary, the Manager shall not be entitled to any Incentive Distribution and
no Incentive Distribution shall be paid or payable. Accordingly, neither the
Incentive Distribution nor any other amount or factor that would be
determined or calculated solely for purposes of determining the Incentive
Distribution (including without limitation the following: "Applicable NCREIF
Index," "Applicable Percentage," "Cash Inflows," "Cash Outflows," "Future
Value of each Prior
-3-
<PAGE>
Incentive Distribution," "Leverage Premium," "NCREIF Adjustment," "NCREIF
Adjusted Tentative Incentive Distribution," "NCREIF Benchmark," "Nominal Return
Benchmark," "Project-Type Premium," "Real Internal Rate of Return," "Tentative
Incentive Distribution," "Threshold Amount," "Total Return," "Unleveraged
Incentive Portfolio Return," and "Unrealized Projects") shall be determined or
calculated.
(b) Notwithstanding any provision to the Amended Agreement to the
contrary, (including without limitation, the provisions of Existing Section 3.2
and existing Section 3.12 (which is set forth in the First Amendment), and the
provisions of Section 3 of the First Amendment), the Manager shall have no
obligation to make any further Capital Contribution and shall be deemed to have
made all Capital Contributions required to be made by it.
(c) The defined term "Additional Capital Contributions" in Existing
Section 1.1 is amended in its entirety to read as follows:
"ADDITIONAL CAPITAL CONTRIBUTIONS" means contributions of cash to
the capital of the Company which may be required from time to time to
be made by CalPERS as provided in Section 3.2 hereof."
(d) The final sentence of the defined terms "Approved by the Members"
and "Approved by CalPERS" in Existing Section 1.1 is deleted in its entirety.
(e) The defined term "Budget" in Existing Section 1.1 is amended in
its entirety to read as follows:
""BUDGET" means a statement setting forth the estimated receipts
and expenditures (capital, operating and other) of the Company for the
period covered by such statement prepared in accordance with a format
Approved by CalPERS. A separate budget shall be prepared individually
for each Project and for the portfolio of Projects on a consolidated
basis."
(f) The second sentence of the defined term "Distribution" in Existing
Section 1.1 is deleted in its entirety.
(g) The final sentence of the defined term "Fair Market Value" in
Existing Section 1.1 is deleted in its entirety.
(h) The defined term "Financing" in Existing Section 1.1 is amended in
its entirety to read as follows:
""FINANCING" means any secured or unsecured financing or borrowing
or assumption of debt, including any refinancing of existing debt, by
the Company."
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<PAGE>
(i) The defined term "Percentage Interest" in Existing Section 1.1 is
amended in its entirety to read as follows:
""PERCENTAGE INTEREST" shall mean 1% in the case of BPOP, and 99%
in the case of CalPERS."
(j) The defined term "Preferred Return" in Existing Section 1.1 is
deleted in its entirety.
(k) The defined term "Program Guidelines" in Existing Section 1.1 is
amended in its entirety to read as follows:
""PROGRAM GUIDELINES" means the agreed-upon parameters within
which the Manager shall seek to acquire, develop and sell one or more
Projects on behalf of the Company, subject to the requirement to obtain
CalPERS' Consent, as may be amended from time-to-time by CalPERS after
consultation with and Notification to BPOP; provided that any such
amendment shall not affect any transaction to be entered into by the
Company for which the Company has made a binding commitment to
undertake or has executed a binding letter of intent or similar
document. The initial Program Guidelines are attached hereto as
EXHIBIT B."
(l) The fifth paragraph of subsection (b) of Existing Section 3.1 is
amended by the addition of the following sentence at the end thereof:
"Notwithstanding the foregoing provisions of this paragraph, none
of the Manager, BPOP nor any of their respective affiliates shall have
any obligation or liability to the Company with respect to any of the
Manager's Projects after the first anniversary of the date of the date
of the Second Amendment to this Agreement, other than for any claim
made by the Company under this Agreement prior to such anniversary."
(m) The first sentence of subsection (a) of Existing Section 3.2 is
amended in its entirety to read as follows:
"To the extent the Company has insufficient capital from
operations, the Manager may call for Additional Capital Contributions
by written Notification to the Members from time to time for any
purpose permitted under this Agreement, including, without limitation,
operating deficits and the acquisition, development or redevelopment of
new Projects by the Company ("NEW PROJECTS") or for emergency needs."
(n) Existing Section 3.3 is amended in its entirety to read as
follows:
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<PAGE>
"SECTION 3.3. PERCENTAGE INTERESTS. The Percentage Interest of
CalPERS shall be equal to 99%, and the Percentage Interest of BPOP
shall be equal to 1%."
(o) Subsection (e) of Existing Section 3.4 is amended in its entirety
to read as follows:
"ALLOCATION OF INCOME. After giving effect to the Special
Allocations set forth in SECTION 3.5, and except as provided in SECTION
3.6, Income of the Company for any period shall be allocated among the
Members as follows:
(i) To the Members, in proportion to the Loss previously
allocated to one Member as to the aggregate Loss previously allocated
to both Members up to the amount of Loss previously allocated to such
Member reduced by allocations of Income under this SECTION 3.4 (e)(i);
and
(ii) To the Members, in proportion to their respective
Percentage Interests."
(p) Subsection (f) of Existing Section 3.4 is amended in its entirety
to read as follows:
"ALLOCATION OF LOSS. After giving effect to the Special
Allocations set forth in SECTION 3.5, and except as provided in
SECTION 3.6, Loss of the Company for any period shall be allocated to
the Members in proportion to their respective Percentage Interests.
Notwithstanding the above, Loss from a Capital Transaction with
respect to a sale of a Project shall be allocated first to Manager to
the extent of Manager's Unreturned Capital Contributions after
reflecting any distributions of Unreturned Capital Contributions
resulting from such sale under SECTION 3.9(c), second to CalPERS to the
extent of CalPERS' Unreturned Capital Contributions after reflecting
any distributions of Unreturned Capital Contributions resulting from
such sale under SECTION 3.9(c) and third to the Members in proportion
to their respective Percentage Interests. Furthermore, Loss from a
Capital Transaction upon the Liquidation of the Company shall be
allocated first to Manager to the extent of Manager's Unreturned
Capital Contributions after reflecting any distributions of Unreturned
Capital Contributions resulting from such Liquidation pursuant to
SECTION 3.9(c), second to CalPERS to the extent of CalPERS' Unreturned
Capital Contributions after reflecting any distributions of Unreturned
Capital Contributions resulting from such Liquidation pursuant to
SECTIONS 3.9(c), and
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<PAGE>
third to the Members in proportion to their respective Percentage
Interests. Notwithstanding the above, Losses of the Company shall not
be allocated to the Manager to the extent that such allocation would
cause the Manager's Capital Account to become negative, but shall
instead be allocated to CalPERS."
(q) Existing Section 3.9 is amended in its entirety to read as
follows:
"SECTION 3.9. DISTRIBUTIONS.
(a) The Manager shall determine each month whether cash or
property is available for Distribution to the Members.
(b) Cash or other property of the Company available for
Distribution upon the dissolution or liquidation of the Company
(including cash received upon the sale or other disposition of assets
in anticipation of liquidation) shall be distributed as provided in
accordance with the provisions of SECTION 6.2 or SECTION 6.3, as
applicable.
(c) The Company shall make Distributions of Cash Available
for Distribution monthly and Distributions of Extraordinary Cash Flow
(including, without limitation, any proceeds from the sale of a
Project) within 30 days of the event resulting in such Extraordinary
Cash Flow.
(d) Distributions of Cash Available for Distribution shall
be made to the Members in proportion to their respective Percentage
Interests on the date of the Distribution.
(e) Distributions of Extraordinary Cash Flow shall be
made to the Members in the following order:
(i) To CalPERS, until CalPERS has been distributed an
amount equal to its Unreturned Capital Contributions in excess of
$24,750,000; and
(ii) To the Members, in proportion to their
respective Percentage Interests.
(f) If upon Liquidation of the Company CalPERS has not
received cumulative Distributions from the inception of the Company in
an amount equal to CalPERS' Unreturned Capital Contributions, then
CalPERS shall receive a priority Distribution (after any Distributions
of Extraordinary Cash Flow have been made under SECTION 3.9(e)(i)
above) to the extent of its Unreturned
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Capital Contributions before any Distributions are made under SECTIONS
3.9(e)(ii).
If the Manager determines that the Company has excess
capital which can be returned to the Members ("EXCESS CAPITAL"), the
Company may from time to time make Distributions of such Excess Capital
in such amounts and at such times as may be determined by the Manager
in the priority set out in SECTION 3.9(e) for Distributions of
Extraordinary Cash Flow. After any such Distribution of Excess Capital
is made, the Capital Account and Unreturned Capital Contributions of
each Member shall be reduced by the amount of the Distribution received
by each such Member."
(r) Existing Section 3.10 is deleted in its entirety.
(s) Subsection (a) of Existing Section 3.12 (which is set forth in the
First Amendment) is amended by changing the amount of the "Additional Capital
Contribution Obligation" of (i) BPOP to "None" and (ii) CalPERS to
"$180,000,000".
(t) The first sentence of subsection (b) of Existing Section 3.12
(which is set forth in the First Amendment) is deleted in its entirety.
(u) Clause (i) of subsection (n) of Existing Section 3.12 (which is
set forth in the First Amendment) is amended in its entirety to read as follows:
"(i) as to BPOP and BPE, there shall be no obligation to provide
financial information;"
(v) Clause (i) of subsection (a) of Existing Section 4.1 is amended in
its entirety to read as follows:
"(i) cause the Company to acquire, manage and sell Projects and
arrange Financings, in accordance with the Investment Objectives and
Policies, the Program Guidelines, the Annual Investment Plan and this
Agreement."
(w) Clause (xi) of subsection (a) of Existing Section 4.1 is deleted
in its entirety and the clause next following it is renumbered as clause (xi).
(x) Clause (ii) of subsection (d) of Existing Section 4.1 is amended
in its entirety to read as follows:
"(ii) If the Manager desires to present a Project investment
proposal for CalPERS consideration, then the Manager shall prepare and
package an investment proposal, in a format consistent with agreed
specifications, for presentation to CalPERS
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<PAGE>
for review and for the approval of CalPERS. CalPERS will use its best
efforts to respond to such proposal within 10 business days after
submission (however, if the matter requires CalPERS Investment
Committee approval, then the matter may require 30 days for CalPERS'
approval)."
(y) The first sentence of clause (iii) of subsection (d) of Existing
Section 4.1 is amended in its entirety to read as follows:
"Select, underwrite, negotiate and coordinate closing and funding
of investment opportunities in New Projects consistent with the terms
approved by CalPERS."
(z) Clause (iv) of subsection (d) of Existing Section 4.1 is amended
in its entirety to read as follows:
"(iv) Provide various asset management services for the Projects
with discretion (subject to Section 4.6 and in accordance with the
Annual Investment Plan) to execute leasing decisions, capital
expenditure programs and selection of property management and leasing
agents. The Manager shall assist CalPERS Staff in developing and
executing efficient monitoring processes for the Company's Projects
consistent with the to-be-developed CalPERS Annual CORE Monitoring
Policy."
(aa) Clause (vi) of subsection (d) of Existing Section 4.1 is amended
in its entirety to read as follows:
"(vi) Periodically review and monitor the Projects to determine
sales opportunities and timing of such sales for properties within the
portfolio. Once a Project has been determined by the Manager to be a
sales candidate, the Manager shall prepare and package a sale proposal,
in a format consistent with agreed specifications, for presentation to
CalPERS for review and for the approval of CalPERS. CalPERS will use
its best efforts to respond to such proposal within 10 business days
after submission (however, if the matter requires CalPERS Investment
Committee approval, then the matter may require 30 days for CalPERS'
approval). If such sale proposal is Approved by CalPERS, then the
Manager shall have responsibility to market and sell the designated
Project based upon the terms approved by CalPERS. The listing broker,
if a non-Affiliate of the Manager, must be included in a list of
brokerage companies Approved by CalPERS. As further provided in SECTION
4.10, but subject to the limitations in Section 4.10, the Manager may
be required to market and sell a Project at any time at the sole
discretion and determination of CalPERS."
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<PAGE>
(bb) Clauses (i), (ii) and (iii) of subsection (e) of Existing Section
4.1 are amended in their entirety to read as follows:
"(i) causing the Company to obtain any Financing, or any increase
in or extension of such Financing, including the approval of the
documents evidencing any such Financing (it being understood that
CalPERS will use its best efforts to determine whether or not to give
such approval within five business days in the case of any proposed
loan assumptions or seller financings in connection with the
acquisitions of New Projects), or selecting the lender or lenders
providing such Financing;
(ii) causing the acquisition of any Project or the sale, exchange
or other voluntary transfer of one or more Projects;
(iii) commencing any new construction or capital improvement on a
Project with respect to an uninsured loss costing in excess of $50,000
not otherwise contained in the Budget;"
(cc) Clause (x) of subsection (e) of Existing Section 4.1 is amended in
its entirety to read as follows:
"(x) instituting any legal action involving a claim in excess of
$50,000 (excluding unlawful detainer actions or rent collection cases);
settling any legal action which involves an uninsured expense in excess
of $50,000 or confessing a judgment against the Company;"
(dd) The first sentence of Existing Section 4.6 is amended in its
entirety to read as follows:
"Each year in conjunction with the preparation of the strategic
plan, the Manager shall prepare and submit a Budget to be Approved by
CalPERS, and CalPERS will use its best efforts to give its approval
within 10 business days after such Budget is submitted."
(ee) Subsection (c) of Existing Section 4.7 is amended in its entirety
to read as follows:
"(c) If CalPERS elects to remove the Manager as the result of a
For Cause Removal Event, the Manager's management authority shall be
immediately suspended at the discretion of CalPERS. If CalPERS elects
to remove the Manager as the result of a Without Cause Removal Event,
the Manager's management authority shall cease on the effective date of
the termination. In either case, at CalPERS' election to be made within
45 days, the Company shall either (i) be dissolved and the assets of
the
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Company shall be distributed in kind to CalPERS in accordance with the
procedures described in SECTION 6.3, or (ii) CalPERS may elect to
continue the Company and to elect a successor Manager in accordance
with Section 6.1(b). If the Manager is removed due to a For Cause
Removal Event, any actual damages caused by the Manager may be deducted
or offset against amounts distributable to the Manager. The Manager
shall be paid all accrued fees payable to it on the effective date of
the Manager's termination;"
(ff) Subsection (c) of Existing Section 5.1 is amended by deleting
clause (ii) of the second sentence thereof.
(gg) Existing Section 5.2 is amended in its entirety to read as
follows:
"SECTION 5.2 This Section intentionally left blank."
(hh) Subsection (b) of Existing Section 6.1 is amended in its entirety
to read as follows:
"(b) Notwithstanding the occurrence of an event specified in
SECTION 6.1(a)(i) by or against BPOP, the Company shall not be
dissolved and its business and affairs shall not be discontinued, and
the Company shall remain in existence as a limited liability company
under the Act, if CalPERS elects within 180 days after such occurrence
to continue the Company and the Company business and elects a successor
Manager, if necessary; provided, however, that if CalPERS so elects, it
shall pay (or cause the Company to pay) to the Manager not later than
15 days after the date of such election an amount in cash equal to the
amount of the Manager's Capital Account on the date of such election."
(ii) Clause (ii) of subsection (b) of Existing Section 6.2 is amended
in its entirety to read as follows:
"(ii) To the Members in accordance with the priorities set forth
in SECTION 3.9(c) with respect to the distribution of Extraordinary
Cash Flow."
(jj) Existing Section 6.3 is amended in its entirety to read as
follows:
"SECTION 6.3. DISTRIBUTION IN KIND. Upon the dissolution of the
Company or if a Member's Membership Interest is to be liquidated for
whatever reason under this Agreement, and provided that a distribution
in cash has been made to the Manager in the amount provided in
SECTION 6.2(b)(ii), the Liquidator shall, if CalPERS so elects,
distribute to CalPERS in kind all or any portion of the assets of
the Company designated by CalPERS."
-11-
<PAGE>
(kk) Existing Section 7.15 is deleted in its entirety.
(ll) Existing Section 7.20 is deleted in its entirety.
(mm) Existing Sections 10.1-10.6 are deleted in their entirety.
(nn) The second numbered paragraph (entitled "Asset Management Fee") of
Exhibit H (entitled "Fees to Manager or Affiliates") to the Original Agreement
is amended in its entirety to read as follows:
"2. ASSET MANAGEMENT FEE. The Asset Management Fee shall be an
amount equal to (i) .40% of the first $500 million, (ii) .30% of the
next $500 million, and (iii) .20% of the amount in excess of
$1 billion of the aggregate Fair Market Value of the Company's Projects
over the preceding Fiscal Quarter. (For example, if such aggregate Fair
Market Value were $1.1 billion, then the Asset Management Fee would be
$3.7 million.) The Asset Management Fee shall be payable in arrears in
quarterly installments within 30 days after the end of the preceding
Fiscal Quarter. Notwithstanding the foregoing, the Asset Management Fee
payable to the Manager (or its designee) shall be reduced to the extent
that (i) Distributions (other than Distributions of Extraordinary Cash
Flow ) actually paid to the Manager based upon its Percentage Interest
with respect to periods after the date of the Manager Distributions
exceed (ii) the amount of such Distribution that would have been paid
based upon the Manager's proportionate interest in the total invested
capital in the Company. (For example, if the Manager (or its designee)
receives Distributions (other than Distributions of Extraordinary Cash
Flow) of $100,000 during the year (based on its 1% Percentage
Interest), but it would have only received such Distributions in an
amount of $10,000 if such Distributions were made in accordance with
relative invested capital balances among the Members during such year,
then the Company shall receive a credit against the Asset Management
Fees payable to the Manager (or its designee) in the amount of
$90,000.)"
(oo) Section 16 of the First Amendment is deleted in its entirety.
4. SUBSTITUTION OF MANAGER. Pursuant to 5.1(a) of the Original
Agreement, CalPERS hereby agrees that BPE may at any time on or prior
to December 31, 1999, withdraw as a Member and as the Manager of the
Company, provided that BPOP is substituted as to BPE's interest as a
Member and BPE's position as the Manager pursuant to an Assignment of
Membership Interest (the "Assignment") that is substantially the same
form as that which was entered into by BPE on June 1, 1999. In the
event that BPE effects the Assignment, CalPERS hereby waives the
180-day notice requirement contained in Section 5.1(a) of the Original
Agreement and elects under Section 6.1(b) of the
-12-
<PAGE>
original Agreement to continue the Company. After the Assignment
becomes effective, all references to BPE in the Amended Agreement and
in this Second Amendment shall be deemed to refer to BPOP. The
Assignment shall provide that BPE shall be released from its
obligations under the Agreement (other than any liabilities accruing
from its acts prior to the effective date of the Assignment), including
from its duties to act as the Manager of the Company; provided, that
BPOP shall assume such obligations (including any obligations of BPE
outstanding at the time of such assumption). BPOP shall remain wholly
subject to the Transfer prohibition in Section 8.1 of the Original
Agreement. BPOP shall pay or reimburse the Company for any
out-of-pocket costs incurred in connection with the Assignment.
5. ASSIGNMENT OF MANAGEMENT RESPONSIBILITIES AND FEES. CalPERS
hereby agrees that, at any time after the amendments in Section 3 have
become effective, the Manager may assign all or any portion of the
responsibilities for which the Manager is entitled to receive the fees
provided for in EXHIBIT H to the Original Agreement to a Non-Controlled
Subsidiary, together with the right to receive such fees with respect
to the performance of the assigned responsibilities; provided, that the
Manager shall remain responsible for any non-performance by the
Non-Controlled Subsidiary of such assigned responsibilities.
6. REAFFIRMATION. CalPERS hereby reaffirms, as of the date hereof
and taking into account the provisions of this Second Amendment, each
of CalPERS' representations acknowledgements made in Sections 2.3 and 8
of the First Amendment, and represents and warrants that the
performance by it of its obligations under the Amended Agreement, as
Amended by this Second Amendment, will not violate any applicable
constituent document, policy or guideline of CalPERS, or any statute,
rule or regulation applicable to CalPERS.
7. CONFLICTS. In the event of any conflicts or discrepancies
between this Second Amendment and the Amended Agreement, the provisions
of this Second Amendment shall control. In all other respects not
specifically modified by this Second Amendment, the Amended Agreement
shall remain unmodified and in full force and effect. The First
Amendment and this Second Amendment are the sole amendments or
modifications to the Amended Agreement.
8. RATIFICATION OF AGREEMENT. In all other respects, the Amended
Agreement is hereby ratified and confirmed.
-13-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Second Amendment as
of the date first written above.
MANAGER:
BURNHAM PACIFIC EMPLOYEES LLC,
a Delaware limited liability company
By: BURNHAM PACIFIC OPERATING PARTNERSHIP, L.P.
a Delaware limited partnership, its manager
By: BURNHAM PACIFIC PROPERTIES, INC.,
a Maryland corporation, its general partner
By: /s/ Scott C. Verges
----------------------------------------
Its: Secretary
---------------------------------------
MEMBERS:
STATE OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM,
an agency of the State of California
By: /s/ Guy Jacquier
---------------------------------------------
Its: Senior Real Estate Investment Officer
--------------------------------------------
AND:
BURNHAM PACIFIC EMPLOYEES LLC,
a Delaware limited liability company
By: BURNHAM PACIFIC OPERATING PARTNERSHIP, L.P.
a Delaware limited partnership, its manager
By: BURNHAM PACIFIC PROPERTIES, INC.,
a Maryland corporation, its general partner
By: /s/ Scott C. Verges
----------------------------------------
Its: Secretary
---------------------------------------
-14-
<PAGE>
EXHIBIT A
Bell Gardens Shopping Center, Bell Gardens, California
Parcels 1 thru 15 inclusive of parcel map No. 20044, in the city of Bell
Gardens, county of Los Angeles, state of California, as recorded in Book 244
pages 18 through 23 inclusive of parcel maps, in the office of the county
recorder of said county.
Except therefrom all oil, gases, minerals and hydrocarbon substances in and
under said land as reserved in various deeds of record one of them being
registered on June 14, 1945 as document No. 10090-N of Torrens.
Also except therefrom any and all oil, gases, minerals and hydrocarbons rights
previously reserved in deeds.
-15-
<PAGE>
EXHIBIT B
TAX REPORTING METHOD
CalPERS and the Manager acknowledge and agree that $12,794,671 of the Manager
Distributions constitute and shall be reported as a reimbursement to the Manager
of pre-contribution capital expenditures within the meaning of Treasury
Regulations Section 1.707-4(d)(2)(ii) with respect to Greenway Town Center
property and the Young's Bay property. The remainder of the Manager
Distributions constitute and shall be reported as partnership distributions
described in Section 731 of the Code, except to the extent otherwise required
under the Code as determined by the Manager.
-16-
<PAGE>
EXHIBIT C
INDEBTEDNESS
Indebtedness in the aggregate principal amount of $202,800,000, evidenced by
that certain Loan Agreement dated as of November 19, 1999, by and among Burnham
Pacific Operating Partnership, L.P. and certain of its affiliates, as borrowers,
and CMF Capital Company, LLC, as administrative agent for certain lenders,
secured by, among other things, certain rights of the borrowers to distributions
and proceeds from the Company.
-17-
<PAGE>
Exhibit 10.2
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (the "Agreement") is entered into as of November 30,
1999 by and between the STATE OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM,
a unit of the State and Consumer Services Agency of the State of California
("CalPERS"), with offices at 400 P Street, Sacramento, California 95814, and
BURNHAM PACIFIC EMPLOYEES LLC, a Delaware limited liability company (either
"BPE" or the "Manager"), with offices at 110 West A Street, Suite 900, San
Diego, California 92101.
RECITALS
A. BPP Retail, LLC, a Delaware limited liability company (the
"Company") was formed by the filing of a Certificate of Formation with the
Secretary of State of the State of Delaware on September 15, 1998. The
management and operation of the Company is governed by the terms of that certain
Operating Agreement dated August 31, 1998, as amended by that certain First
Amendment to Operating Agreement dated June 1, 1999 (as amended, the
"Agreement").
B. CalPERS and BPE, as the current members of the Company, now wish
to provide for the contribution of certain real property to the Company by BPE.
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, and the mutual covenants herein contained, the
parties hereto agree as follows:
1. DEFINED TERMS. Capitalized terms used herein and not defined shall
have the same meaning as ascribed thereto in the Agreement.
2. CONTRIBUTION OF CERTAIN PROJECTS BY BPE. Section 3.2(a) of the
Agreement permits BPE to make Additional Capital Contributions in the form of
contributions of property. On December 1, 1999 (the "Effective Date"), BPE shall
cause to be contributed by grant deed to the Company (i) certain property in Los
Altos, California commonly known as Foothill Plaza and legally described on
Exhibit A annexed hereto ("Foothill Plaza") and (ii) certain property in
Rocklin, California commonly known as Stanford Ranch and legally described on
Exhibit B annexed hereto ("Stanford Ranch"). The parties have agreed that the
Net Asset Value of Foothill Plaza is Six Million Nine Hundred Thousand Dollars
($6,900,000) and the Net Asset Value of Stanford Ranch is Five Million Nine
Hundred Ten Thousand Dollars ($5,910,000), reflecting a fair market value of
Twelve Million Dollars ($12,000,000) less the amount of secured debt currently
encumbering the property. The contributions shall be made in accordance with the
terms and conditions of the Agreement, including without limitation the
representations and warranties contained in Exhibit F thereto.
3. TITLE TO STANFORD RANCH. Stanford Ranch is currently encumbered by
a deed of trust in favor of Massachusetts Mutual Life Insurance Company (the
"Lender"), and the Company will assume all obligations contained in such deed of
trust and the related promissory note and other loan documents from and after
the Effective Date in connection with its contribution. Lender has consented to
such assumption, subject to the satisfaction of certain customary conditions
precedent (the "Conditions"), such as receipt of an appropriate endorsement to
its title policy. In the event that all Conditions are not satisfied as of the
Effective Date, then notwithstanding anything contained herein to the contrary,
BPE may continue to hold title to Stanford Ranch as nominee on behalf of the
Company until such time as all of the Conditions are satisfied; provided,
however, that if all of the Conditions are not satisfied on or before December
15, 1999, then CalPERS shall be entitled to rescind the contribution of Stanford
Ranch to the Company, in which case this Agreement shall be a nullity as to
Stanford Ranch, BPE shall promptly refund to the Company any distributions it
received from the Company in connection with its attempted contribution of
Stanford Ranch, and the Company shall promptly return such refunded
distributions to CalPERS.
<PAGE>
4. CAPITAL CONTRIBUTION BY CALPERS. On the Effective Date, CalPERS
shall make an Additional Capital Contribution to the Company equal to the
combined Net Asset Value of Foothill Plaza and Stanford Ranch, which amount
shall in turn be distributed to BPE by the Company.
5. MISCELLANEOUS. This Agreement may be executed in counterparts, all
of which shall constitute one instrument. This Agreement shall be governed by
the laws of California.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
BURNHAM PACIFIC EMPLOYEES LLC,
a Delaware limited liability company
By: BURNHAM PACIFIC OPERATING PARTNERSHIP, L.P.
a Delaware limited partnership, its manager
By: BURNHAM PACIFIC PROPERTIES, INC.,
a Maryland corporation, its general partner
By: /s/ Joseph Byrne
---------------------------------------
Its: Executive Vice President
---------------------------------------
STATE OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM,
an agency of the State of California
By: /s/ Guy Jacquier
----------------------------------------
Its: Senior Investment Officer
---------------------------------------
-2-
<PAGE>
Exhibit 10.3
BELL GARDENS OWNERSHIP AGREEMENT
THIS AGREEMENT (the "Agreement") is entered into to be effective as of December
15, 1999 by and between the STATE OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT
SYSTEM, a unit of the State and Consumer Services Agency of the State of
California ("CalPERS"), with offices at 400 P Street, Sacramento, California
95814, BURNHAM PACIFIC EMPLOYEES LLC, a Delaware limited liability company
("BPE"), with offices at 110 West A Street, Suite 900, San Diego, California
92101, BURNHAM PACIFIC OPERATING PARTNERSHIP, L.P., a Delaware limited
partnership ("BPOP"), with offices at 110 West A Street, Suite 900, San Diego,
California 92101, and BPP RETAIL, LLC, a Delaware limited liability company (the
"Company"), with offices at 110 West A Street, Suite 900, San Diego, California
92101.
RECITALS
A. The Company was formed by the filing of a Certificate of Formation
with the Secretary of State of the State of Delaware on September 15, 1998. The
management and operation of the Company is governed by the terms of that certain
Operating Agreement dated August 31, 1998 (the "Original Agreement"), as amended
by that certain First Amendment to Operating Agreement dated June 1, 1999 (the
"First Amendment") and that certain Second Amendment to Operating Agreement of
even date herewith (the "Second Amendment", and together with the First
Amendment and the Original Agreement, the "Operating Agreement").
B. Prior to June 1, 1999, and pursuant to the Original Agreement,
BPOP was a member and the manager of the Company. In connection with the First
Amendment, BPE became a member and the manager of the Company, and BPOP withdrew
from the Company.
C. The Company acquired all right and beneficial interest in that
certain real property known as Bell Gardens Shopping Center ("Bell Gardens")
pursuant to that certain Agreement of Conveyance and Contribution (Bell Gardens
Shopping Center) dated December 21, 1998 by and among BPOP, CalPERS and the
Company (the "Contribution Agreement"). As permitted under the Contribution
Agreement and the Operating Agreement, BPOP has continued to hold record title
to Bell Gardens
D. In connection with the Second Amendment, the parties hereto now
wish to provide for the termination of the Contribution Agreement and the return
of all right and beneficial interest in Bell Gardens to BPOP.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. Capitalized terms used herein and not otherwise
defined shall have the meaning ascribed to them in the Operating Agreement.
<PAGE>
2. TRANSFER TO BPE. Pursuant to Section 2(b) of the Second Amendment,
and as part of the Manager Distributions, the Company hereby grants to BPE all
right and beneficial interest in Bell Gardens, including without limitation any
and all rights in leases, licenses, contracts, permits, warranties, easements,
records, documents and other tangible and intangible property relating to Bell
Gardens and disclaims any interest in the same, all from and after the date of
the Manager Distributions. BPE hereby grants to BPOP all right and beneficial
interest in the Bell Gardens Property granted to it in the preceding sentence.
3. TERMINATION OF CONTRIBUTION AGREEMENT. The parties agree that the
Contribution Agreement shall automatically terminate as of the date of the
Manager Distributions; provided, however, that all rights and obligations
accruing thereunder prior to the date of the Manager Distributions shall survive
such termination.
4. MISCELLANEOUS. This Agreement may be executed in counterparts, all
of which shall constitute one instrument. This Agreement shall be governed by
the laws of California.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
SIGNATURE PAGE FOLLOWS
-2-
<PAGE>
STATE OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM,
an agency of the State of California
By: /s/ Guy Jacquier
----------------------------------------
Its: Senior Real Estate Investment Officer
---------------------------------------
BURNHAM PACIFIC EMPLOYEES LLC,
a Delaware limited liability company
By: BURNHAM PACIFIC OPERATING PARTNERSHIP, L.P.
a Delaware limited partnership, its manager
By: BURNHAM PACIFIC PROPERTIES, INC.,
a Maryland corporation, its general partner
By: /s/ Scott C. Verges
----------------------------------------
Its: Secretary
---------------------------------------
BURNHAM PACIFIC OPERATING PARTNERSHIP, L.P.
a Delaware limited partnership, its manager
By: BURNHAM PACIFIC PROPERTIES, INC.,
a Maryland corporation, its general partner
By: /s/ Scott C. Verges
----------------------------------------
Its: Secretary
---------------------------------------
BPP RETAIL, LLC,
a Delaware limited liability company
By: BURNHAM PACIFIC EMPLOYEES LLC,
a Delaware limited liability company
By: BURNHAM PACIFIC OPERATING PARTNERSHIP, L.P.
a Delaware limited partnership, its manager
By: BURNHAM PACIFIC PROPERTIES, INC.,
a Maryland corporation, its general partner
By: /s/ Scott C. Verges
----------------------------------------
Its: Secretary
---------------------------------------
-3-
<PAGE>
Exhibit 10.4
WAIVER, AMENDMENT, AND FIRST CONSENT
WAIVER, AMENDMENT, AND FIRST CONSENT, dated as of December 15,
1999 (this "Consent"), by and among BPP RETAIL, LLC, a Delaware limited
liability company (the "Borrower"), the Lenders (as defined in the Credit
Agreement referred to below), THE CHASE MANHATTAN BANK, as Administrative Agent
(as defined in the Credit Agreement referred to below), BURNHAM PACIFIC
EMPLOYEES LLC, a Delaware limited liability company (the "Manager"), BURNHAM
PACIFIC OPERATING PARTNERSHIP, L.P., a Delaware limited partnership ("BPOP"),
and STATE OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM, a unit of the State
and Consumer Services Agency of the State of California (the "Investor").
R E C I T A L S:
The Borrower, the Lenders and the Administrative Agent entered
into a Credit Agreement dated as of June 14, 1999 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"). Unless the
context requires otherwise, capitalized terms used herein without definition
shall have the meanings ascribed to them in the Credit Agreement.
The Borrower has informed the Lenders and the Administrative Agent
that the Investor and the Manager wish to amend the Operating Agreement in
various respects and enter into certain transactions with the Borrower,
including having the Manager exchange substantially all of its equity interest
in the Borrower for cash and certain property. The Manager would be released
from its obligation under the Operating Agreement to contribute additional
capital to the Borrower, but the Investor would increase the amount of its
obligation under the Operating Agreement to contribute additional capital to the
Borrower to at least $180,000,000.00 in cash.
The Borrower has requested that the Lenders and the Administrative
Agent consent to such amendments and transactions and amend and waive certain
provisions of the Credit Agreement and the Member Letter signed by the Manager
and BPOP upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements
contained in the Credit Agreement and herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
CONSENT, AMENDMENT, AND WAIVER
1.1. Notwithstanding anything to the contrary contained in the
Credit Agreement or any of the other Loan Documents, upon the effectiveness of
this Consent, each of the Lenders and the Administrative Agent consents to (i)
the Manager and the Investor entering into the Second Amendment to Operating
Agreement of BPP Retail, LLC substantially in the form attached hereto as
EXHIBIT A (the "Second Amendment") and (ii) the Manager, the Investor, the
Borrower, and BPOP consummating the transactions provided for in the Second
Amendment. Without limiting the generality of the foregoing, upon the
effectiveness of this Consent, (i) the payment of the special CalPERS
Contribution referred to in Section 2(a) of the Second Amendment need not be
funded through the Subscription Account; PROVIDED that nothing contained in this
Consent shall impair or detract from the obligation of the Investor to make all
payments of the Additional Capital Contributions referred to in Section 3.12 of
the Operating Agreement to the Subscription Account, and (ii) notwithstanding
anything to the contrary
<PAGE>
contained in the Credit Agreement or any of the other Loan Documents (including
paragraphs (a), (b), (d) and (e) of the Member Letter signed by the Manager and
BPOP), the Capital Commitment and Unpaid Capital Obligation of the Manager may
be terminated; PROVIDED that the Capital Commitment and Unpaid Capital
Obligation of the Investor are increased to at least $180,000,000.00.
1.2. Upon the effectiveness of this Consent:
(a) The definition of the term "Change of Control" set forth
in Section 1.01 of the Credit Agreement shall be amended by inserting the
following sentence as the last sentence of such definition: "Notwithstanding the
foregoing, a "Change of Control" shall not be deemed to have occurred in the
event that the Manager withdraws as a member and manager of the Borrower so long
as BPOP is substituted as to the Manager's interest as a member and manager
under the Operating Agreement in accordance with the terms and provisions of the
Operating Agreement."
(b) Notwithstanding anything to the contrary contained in the
Credit Agreement or any of the other Loan Documents, neither the consent of the
Administrative Agent or the Lenders nor the prepayment of the Obligations
pursuant to Section 2.10(b) of the Credit Agreement shall be required in the
event that the Manager withdraws as a member and manager of the Borrower so long
as (i) BPOP is substituted as to the Manager's interest as a member and manager
under the Operating Agreement in accordance with the terms and provisions of the
Operating Agreement and (ii) the documents and instruments effectuating such
transfer and withdrawal are in form and substance reasonably satisfactory to the
Administrative Agent.
(c) From and after the effectiveness of the Second Amendment,
(i) the references in the Member Letter signed by the Investor to the amount
"$171,000,000.00" shall refer instead to the amount "$180,000,000.00", and (ii)
clause (ii)(x) of the definition of the term "Available Borrowing Amount"
contained in Section 1.01 of the Credit Agreement shall be amended by adding the
phrase "less $9,000,000.00" immediately after the phrase "the aggregate Unpaid
Capital Obligations of the Investor" appearing therein.
1.3. Upon the effectiveness of this Consent, the Lenders hereby
waive their right under Section 2.10(b) of the Credit Agreement to require the
Borrower to prepay the Obligations as a result of the reduction or termination
of the Manager's Capital Commitment.
MISCELLANEOUS
2.1. Each Credit Party hereby represents and warrants that:
(a) Its execution, delivery and performance of this Consent
(i) is within its limited liability company power, (ii) has been duly authorized
by all necessary limited liability company or other action, and (iii) does not
contravene any law, rule or regulation applicable to it or violate or create a
default under its organizational documents or any contractual provision binding
on it or affecting it or any of its property.
(b) This Consent constitutes its legal, valid and binding
obligation enforceable against it in accordance with its terms, except as
enforcement hereof may be subject to (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar
2
<PAGE>
law affecting creditors' rights generally, and (ii) general principles of equity
(regardless of whether such enforcement is sought in a proceeding in equity or
at law).
(c) No Default has occurred and is continuing or would exist
immediately after giving effect to this Consent and to the transactions
contemplated hereby.
(d) The representations and warranties of the Credit Parties
appearing in the Loan Documents were true and correct in all material respects
as of the date when made and, after giving effect to this Consent, continue to
be true and correct in all material respects on the date hereof.
(e) No consent of any other Person is required in connection
with the execution, delivery and performance by the Credit Parties of this
Consent (other than any consents that have been obtained and are in full force
and effect).
(f) The Borrower has no offsets, defenses, claims,
counterclaims, setoffs or other basis for reduction with respect to any of the
Obligations.
2.2. The Borrower agrees to pay on demand all reasonable costs and
expenses of the Administrative Agent in connection with or arising out of the
negotiation, preparation, execution and delivery of this Consent (including the
reasonable fees and expenses of counsel) and the consummation of the
transactions contemplated by this Consent.
2.3. Except to the extent of the consent set forth in this
Consent, each of the Credit Agreement and the other Loan Documents is hereby
ratified and confirmed and shall continue in full force and effect. Without
limiting the generality of the foregoing, each of the Borrower and the Investor
hereby confirms that the Unpaid Capital Obligation of the Investor, after giving
effect to this Consent, to the effectiveness of the Second Amendment, and to the
making of the payment referred to in Section 2(a) of the Second Amendment, is
not less than $180,000,000.00 in cash. This Consent is effective exclusively for
the purposes set forth herein, and any additional consents or any amendment,
modification, or supplement to any Loan Document must be in writing in
accordance with the terms of the Credit Agreement or other applicable Loan
Document. A breach of any of the representations, warranties, or covenants
contained in this Consent shall constitute an Event of Default under the Credit
Agreement, entitling the Administrative Agent and the Lenders to exercise any
and all rights and remedies thereunder or available to it at law or in equity.
2.4. This Consent sets forth the entire agreement of the parties
with respect to the subject matter hereof.
2.5. Neither this Consent nor any provision hereof may be waived,
amended or modified except pursuant to an agreement complying with Section
9.02(b) of the Credit Agreement.
2.6. This Consent shall be construed in accordance with and
governed by the laws of the State of New York (without giving effect to the
principles thereof relating to conflict of laws).
2.7. This Consent shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns.
3
<PAGE>
2.8. This Consent may be executed in any number of counterparts
(and by different parties hereto on different counterparts), each of which shall
be deemed an original, and all of which taken together shall constitute but one
agreement. Delivery of an executed signature page of this Consent by telecopy
shall be as effective as delivery of a manually executed counterpart of this
Consent.
2.9. The Borrower shall furnish the Administrative Agent with
prompt written notice of the effectiveness of the Second Amendment.
EFFECTIVENESS
3.1. This Consent shall not become effective until the date (the
"Effective Date") on which each of the following conditions is satisfied (or
waived in accordance with Section 9.02 of the Credit Agreement):
(a) The Administrative Agent shall have received from each
party hereto either (i) a counterpart of this Consent signed on behalf of such
party or (ii) written evidence satisfactory to the Administrative Agent (which
may include a telecopy transmission of a signed signature page of this Consent)
that such party has signed a counterpart of this Consent).
(b) The Borrower shall have executed and delivered to the
Administrative Agent a consent, waiver or amendment to the credit agreement and
loan documents under the Senior Facility, in form and substance satisfactory to
the Administrative Agent.
(c) The Administrative Agent shall have received such other
documents and certificates (if any) as the Administrative Agent or its counsel
may reasonably request relating to the organization, existence and good standing
of the Credit Parties and their Related Parties, the authorization of the Second
Amendment or this Consent, or the consummation of the transactions described
therein or herein, all in form reasonably satisfactory to the Administrative
Agent.
(d) The Borrower shall have paid (i) to the Administrative
Agent, for the account of each Lender in accordance with its respective
Applicable Percentage, a nonrefundable amendment fee in an aggregate amount
equal to $85,500.00, and (ii) to Chase, for the account of Chase or Chase
Securities Inc. ("CSI"), a nonrefundable advisory fee in the amount separately
agreed upon in writing among the Borrower, Chase, and CSI.
(e) The Administrative Agent shall have received a
certificate from a Responsible Officer of the Borrower confirming that, as of
the Effective Date, (i) no Default or Event of Default shall have occurred and
be continuing and (ii) all representations and warranties of the Credit Parties
appearing in the Loan Documents were true and correct in all material respects
as of the date when made and, after giving effect to this Consent, continue to
be true and correct in all material respects as of the Effective Date.
The Administrative Agent shall notify the Borrower and each of the Lenders if
and when such conditions shall have been satisfied, and such notice shall be
conclusive and binding.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Consent to be duly executed and delivered by their respective authorized
officers or other representatives as of the day and year first above written.
BPP RETAIL, LLC, a Delaware limited
liability company
By: BURNHAM PACIFIC EMPLOYEES LLC,
a Delaware limited liability company,
its manager
By: BURNHAM PACIFIC OPERATING PARTNERSHIP,
L.P., a Delaware limited partnership,
its manager
By: BURNHAM PACIFIC PROPERTIES, INC.,
a Maryland corporation, its general
partner
By: /s/ Scott C. Verges
--------------------------------
Name: Scott C. Verges
Title: Secretary
BURNHAM PACIFIC EMPLOYEES LLC, a Delaware
limited liability company
By: BURNHAM PACIFIC OPERATING PARTNERSHIP,
L.P., a Delaware limited partnership,
its manager
By: BURNHAM PACIFIC PROPERTIES, INC.,
a Maryland corporation, its general
partner
By: /s/ Scott C. Verges
--------------------------------
Name: Scott C. Verges
Title: Secretary
BURNHAM PACIFIC OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership
By: BURNHAM PACIFIC PROPERTIES, INC., a Maryland
corporation, its general partner
By: /s/ Scott C. Verges
------------------------------
Name: Scott C. Verges
Title: Secretary
5
<PAGE>
STATE OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT
SYSTEM, a unit of the State and Consumer Services
Agency of the State of California
By: /s/ Guy Jacquier
----------------------------------------------
Name: Guy Jacquier
Title: Senior Real Estate Investment Officer
THE CHASE MANHATTAN BANK, as a Lender
and as Administrative Agent
By: /s/ John F. Mix
----------------------------------------------
Name: John F. Mix
Title: Vice President
ALLIED IRISH BANK, NEW YORK BRANCH,
as a lender
By: /s/ William J. Strickland
----------------------------------------------
Name: William J. Strickland
Title: Executive Vice President
By: /s/ Germaine Reusch
----------------------------------------------
Name: Germaine Reusch
Title: Vice President
BANCO DI NAPOLI, NEW YORK BRANCH,
as a Lender
By: /s/ Vito Spada
----------------------------------------------
Name: Vito Spada
Title: Executive Vice President
By: /s/ Claude P. Mapes
----------------------------------------------
Name: Claude P. Mapes
Title: First Vice President
6
<PAGE>
BANCO DI SICILIA, NEW YORK BRANCH,
as a Lender
By: /s/ Carlo Cracolici
----------------------------------------------
Name: Carlo Cracolici
Title: Senior Vice President & General Manager
By: /s/ Pierpaolo Carrubba
----------------------------------------------
Name: Pierpaolo Carrubba
Title: Vice President
BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC.,
as a Lender
By: /s/ Peter W. Wood
----------------------------------------------
Name: Peter W. Wood
Title: Vice President
By: /s/ Rachel L. Mena
----------------------------------------------
Name: Rachel L. Mena
Title: Assistant Vice President
BANK OF IRELAND, as a Lender
By: /s/ Niamh O'Flynn
----------------------------------------------
Name: Niamh O'Flynn
Title: Manager
BANQUE NATIONALE DE PARIS, as a Lender
By: /s/ William Shaheen
----------------------------------------------
Name: William Shaheen
Title: Vice President
By: /s/ Franck P. Blua
----------------------------------------------
Name: Franck P. Blua
Title: Assistant Treasurer
7
<PAGE>
CARIPLO - CASSA DI RISPARMIO DELLE PROVINCIE
LOMBARDE S.p.A., GRAND CAYMAN BRANCH, as a Lender
By: /s/ Giancarlo Baiocchi
----------------------------------------------
Name: GianCarlo Baiocchi
Title: Assistant Vice President
By: /s/ Maria Elena Greene
----------------------------------------------
Name: Maria Elena Greene
Title: Assistant Vice President
DG BANK, DEUTSCHE GENOSSENSCHAFTSBANK AG, NEW YORK
BRANCH, as a Lender
By: /s/ Linda J. O'Connell
----------------------------------------------
Name: Linda J. O'Connell
Title: Vice President
By: /s/ Michael Campto
----------------------------------------------
Name: Michael Campto
Title: Assistant Vice President
ERSTE BANK NEW YORK BRANCH, as a Lender
By: /s/ Paul Judicke
----------------------------------------------
Name: Paul Judicke
Title: Vice President
By: /s/ John S. Runnion
----------------------------------------------
Name: John S. Runnion
Title: First Vice President
8
<PAGE>
KBC BANK N.V., as a Lender
By: /s/ Patrick J. Owens
----------------------------------------------
Name: Patrick J. Owens
Title: Vice President
By: /s/ Michael V. Curran
----------------------------------------------
Name: Michael V. Curran
Title: Vice President
REPUBLIC NATIONAL BANK OF NEW YORK, as a Lender
By: /s/ Theodore Koerner
----------------------------------------------
Name: Theodore Koerner
Title: First Vice President
By: /s/ Monisha V. Khadse
----------------------------------------------
Name: Monisha V. Khadse
Title: Vice President
RZB FINANCE LLC, as a Lender
By: /s/ Dieter Beintrexler
----------------------------------------------
Name: Dieter Beintrexler
Title: President
By: /s/ Robert E. Woods
----------------------------------------------
Name: Robert E. Woods
Title: First Vice President
VIA BANQUE, as a Lender
By: /s/ C. Prot /s/ J.F. VITTE
----------------------------------------------
Name: C. Prot J.F. Vitte
Title:
9
<PAGE>
Exhibit 10.5
WAIVER, AMENDMENT AND SECOND CONSENT TO CREDIT AGREEMENT
This WAIVER, AMENDMENT AND SECOND CONSENT TO CREDIT AGREEMENT
(this "SECOND CONSENT"), dated as of December 15, 1999, is among BPP RETAIL,
LLC, a Delaware limited liability company (the "COMPANY"), BPAC TEXAS, L.P., a
Delaware limited partnership ("BPAC"; together with the Company, collectively,
the "BORROWERS"), the Lenders (as defined in the Credit Agreement (as defined
below)), and THE CHASE MANHATTAN BANK, as administrative agent for itself, the
Issuing Bank (as defined in the Credit Agreement) and the Lenders (in such
capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H
WHEREAS, the Borrowers, the Lenders, the Administrative Agent,
the Issuing Bank and The First National Bank of Chicago, as Syndication Agent,
entered into a Credit Agreement, dated as of June 14, 1999, as amended by that
certain First Consent, dated as of August 6, 1999, among the Borrowers, the
Lenders, the Administrative Bank, the Issuing Bank and The First National Bank
of Chicago, as Syndication Agent (as amended, supplemented or modified from time
to time, including, by this Second Consent, the "CREDIT AGREEMENT"; capitalized
terms not defined herein shall have the meaning ascribed thereto in the Credit
Agreement);
WHEREAS, pursuant to Section 2.10(d)(iv) of the Credit
Agreement, BPPI or an Affiliate thereof is required to maintain at least a 12.5%
Percentage Interest (as defined in the Operating Agreement) in the Company
("OWNERSHIP REQUIREMENT");
WHEREAS, the Company has informed the Lenders and the
Administrative Agent that the Company desires to amend its Operating Agreement
pursuant to a Second Amendment to Operating Agreement (the "AMENDMENT"), dated
on or about December 15, 1999, between the State of California Public Employees'
Retirement System ("CalPERS") and Burnham Pacific Employees LLC ("BPE"),
pursuant to which, among other things, BPE's Percentage Interest (as defined in
the Operating Agreement) in the Company shall be decreased to 1%;
WHEREAS, in connection with such Amendment, the Company shall
also cause the Nominee Project commonly known as Bell Gardens Shopping Center
located in Bell Gardens, California (the "BELL GARDENS PROPERTY") to be
transferred to BPE;
WHEREAS, the Company has requested that the Lenders
acknowledge their consent to such Amendment and to amend and waive certain
provisions of the Credit Agreement as a result thereof (including, the waiver
and removal of the Ownership Requirement), and the Lenders have agreed, as set
forth herein; and
WHEREAS, the Lenders have requested and CalPERS has agreed to
execute this Second Consent to acknowledge and confirm their consent to the
execution by the Company of this Second Consent.
NOW, THEREFORE, for fair and valuable consideration, the
adequacy of which is hereby acknowledged, the parties agree as follows:
<PAGE>
1. CONSENT TO AMENDMENT. Subject to the satisfaction of the
Consent Conditions (as defined below) and the terms of this Second Consent, the
Lenders hereby consent to the Amendment, which amendment shall be substantially
in the form attached hereto as EXHIBIT A, notwithstanding anything to the
contrary that may be contained in the Credit Agreement (including, without
limitation, the terms and provisions of SECTIONS 3.02, 6.03, 6.06, 6.11 AND 6.14
of the Credit Agreement). In connection with consummating the transactions
provided for in the Amendment, the Manager (as defined in the Operating
Agreement) will be released from its obligation to contribute additional capital
to the Company.
2. AMENDMENTS TO CREDIT AGREEMENT. Upon satisfaction of the
Consent Conditions,
(a) SECTION 2.10(D)(IV) of the Credit Agreement is hereby
deleted in its entirety and replaced with the following: "(iv) BPPI or an
Affiliate thereof fails to maintain at least a 1% Percentage Interest (as
defined in the Operating Agreement) in the Company; ".
(b) The definitions "Nominee Acknowledgment", "Nominee
Agreements", "Nominee Party" and "Nominee Projects" shall be deleted in its
entirety from SECTION 1.01 of the Credit Agreement and all references in the
Credit Agreement to such terms shall be amended accordingly to reflect such
deletion (including, without limitation, SECTIONS 1.01, 3.05, 3.07, 3.13,
4.01(F), 5.02, 5.05, 5.11, 5.15, 6.01(H), 6.14 AND 9.02(B) of the Credit
Agreement). In addition, SCHEDULE 3.05(G) of the Credit Agreement is hereby
deleted in its entirety.
(c) SCHEDULE 3.02 of the Credit Agreement is hereby deleted in
its entirety and replaced with Schedule 3.02 attached hereto.
(d) SCHEDULE 3.05(A) of the Credit Agreement is hereby deleted
in its entirety and replaced with Schedule 3.05(a) attached hereto.
(e) The definition "Change of Control" set forth in SECTION
1.01 of the Credit Agreement shall be amended by inserting the following
sentence as the last sentence of such definition: "Notwithstanding the
foregoing, a "Change in Control" shall not be deemed to have occurred in the
event that BPE withdraws as a member and manager of the Company so long as BPOP
is substituted as to BPE's interest as a member and manager under the Operating
Agreement in accordance with the terms and provisions of the Operating
Agreement."
(f) From and after the effective date of the transfer of the
Bell Gardens Property to BPE, the Bell Gardens Property shall no longer be
considered an Eligible Project.
(g) Notwithstanding anything to the contrary contained in the
Credit Agreement, the consent of the Administrative Agent or the Lenders shall
not be required in the event that BPE withdraws as a member and manager of the
Company so long as (i) BPOP is substituted as to BPE's interest as a member and
manager under the Operating Agreement in accordance with the terms and
provisions of the Operating Agreement (as amended by the Amendment) and (ii) the
documents and instruments effectuating such transfer and withdrawal are in form
and substance reasonably satisfactory to the Administrative Agent.
(h) Notwithstanding anything to the contrary contained in the
Credit Agreement, the parties hereto acknowledge and agree that the Term Loan
Commitments terminated on December 1, 1999.
3. WAIVER. Upon the satisfaction of the Consent Conditions,
the Lenders hereby waive (a) their right under SECTION 2.10 of the Credit
Agreement to require the Borrowers to prepay the Loans in their entirety as a
result of the reduction in BPE's Percentage Interest in the Company to 1% and
(b) any Event of Default under the Credit Agreement or under SECTION 4 hereof,
arising for the period commencing on the Effective Date thorugh the effective
date of this Second Consent (including any default interest on account thereof)
as a result of a breach of the Ownership Requirement.
4. CONDITIONS TO EFFECTIVENESS. This Second Consent shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with SECTION 9.02 of the Credit
Agreement)(collectively, the "CONSENT CONDITIONS"):
(a) The Administrative Agent (or its counsel) shall have
received either (i) one or more copies of this Second
Consent, executed by each of the Borrowers, the
Administrative Agent and the Lenders or (ii) written
evidence satisfactory to the Administrative Agent
(which may include a facsimile transmission of a
signed copy of this Second Consent) that each of such
parties has signed a copy of this Second Consent.
(b) The Borrowers shall have delivered to the
Administrative Agent a certificate signed by an
executive officer of the managing member or general
partner of each Borrower, as applicable, certifying
to the Administrative Agent and the Lenders that (i)
the representations and warranties made by any Credit
Party or Constituent Party set forth in the Credit
Agreement or any other Loan Document (including this
Second Consent) are true and correct in all material
respects on and as of the date of this Second Consent
(except with respect to such representations and
warranties that are made expressly as of an earlier
date, in which case, such representations and
warranties were true and correct in all material
respects on and as of such date), (ii) immediately
prior to, at the time of, and immediately after
giving effect to this Second Consent, no Default or
Event of Default shall have occurred and be
continuing, and (iii) no Borrower has received
written notice from the Required Lenders that an
event has occurred since the date of the Credit
Agreement which has had, and continues to have, or is
reasonable likely to have, a Material Adverse Effect.
(c) Intentionally Omitted..
(d) The Borrowers shall have delivered to the
Administrative Agent an updated Compliance
Certificate (together with all appropriate schedules
and back-up documentation) demonstrating compliance
with the financial
<PAGE>
covenants and ratios set forth in Article VI of the
Credit Agreement both immediately prior to, and after
giving effect to the Amendment.
(e) The Company shall execute and deliver to the
Administrative Agent a consent, waiver or amendment
to the credit agreement and loan documents under the
Secured Facility, in form and substance satisfactory
to the Administrative Agent.
(f) The Administrative Agent shall have received such
other documents and certificates as the
Administrative Agent or its counsel may reasonably
request relating to the organization, existence and
good standing of the Credit Parties and their Related
Parties, the authorization of the Amendment or this
Second Consent or the consummation of the
transactions described therein and herein, all in
form reasonably satisfactory to the Administrative
Agent.
(g) The Borrowers shall have paid to the Administrative
Agent, (i) for the account of each Lender in
accordance with its respective Applicable Percentage,
a nonrefundable amendment fee in an amount equal to
0.05% of the sum of (A) the aggregate outstanding
principal amount of the Term Loans on the date hereof
and (B) $20,000,000; and (ii) for the account of the
Chase Manhattan Bank ("CHASE") or Chase Securities,
Inc. ("CSI"), a nonrefundable advisory fee in an
amount separately agreed upon in writing among Chase,
CSI and the Borrowers.
By entering into this Second Consent, each Borrower shall be deemed to represent
and warrant on the date hereof that each of the Consent Conditions have been
satisfied. The Administrative Agent shall notify the Borrowers and each of the
Lenders if and when the Consent Conditions have been satisfied, and such notice
shall be conclusive and binding.
5. ADDITIONAL COVENANTS, REPRESENTATIONS AND WARRANTIES
OF THE BORROWERS. (a) Each Borrower hereby represents and warrants to the
Administrative Agent and the Lenders as follows:
(i) Each Borrower has the legal power and authority to enter
into this Second Consent without consent or approval by and third party (or such
consent has been obtained) and this Second Consent constitutes the legal, valid
and binding obligation of each Borrower enforceable against such Borrower in
accordance with its terms.
(ii) The execution and deliver by each Borrower of this Second
Consent has been duly authorized by all requisite limited liability company or
partnership action, as the case may be, on the part of such Borrower and will
not violate any provision of such Borrower's organizational documents or any
other agreements or contracts to which such Borrower is a party or to which its
assets or property are bound.
(iii) Each Borrower hereby confirms and acknowledges that such
Borrower has no offsets, defenses, claims, counterclaims, setoffs or other basis
for reduction with respect to any of the Obligations owed to the Lenders.
<PAGE>
(iv) Each Borrower hereby represents and warrants that it owns
good and marketable fee simple absolute title to all of the Real Property listed
on SCHEDULE 3.05(A) to the Credit Agreement (as amended by this Second Consent).
There are no Real Properties owned by any Person for the benefit of any Borrower
pursuant to any nominee or similar arrangements as of the date hereof and the
Borrowers covenant that it shall not enter into any such arrangements after the
date hereof, without the prior written consent of the Administrative Agent.
(b) The Borrowers acknowledge and agree that a breach of any
of the representations, warranties and covenants contained in this Second
Consent shall constitute an Event of Default under the Credit Agreement,
entitling the Administrative Agent and the Lenders to exercise any all rights
and remedies thereunder or available to it at law or in equity.
6. TERMINATION OF NOMINEE ACKNOWLEDGEMENTS. Upon the
satisfaction of the Consent Conditions and the transfer of fee simple title (a)
of the Point Loma Project to the Company and (b) of the Bell Gardens Property to
BPE, each of the Acknowledgement and Agreement of Nominee Party, dated as of
June 14, 1990, executed by BPOP and the Company in favor of the Administrative
Agent for the benefit of the Lenders with respect to the Point Loma Project and
the Bell Gardens Property shall be terminated and of no further force and effect
(other than any indemnity obligations expressly provided for under the terms of
such agreements).
7. MISCELLANEOUS. (a) Except as specifically set forth
herein, all terms and conditions of the Credit Agreement and the other Loan
Documents shall remain in full force and effect and are hereby ratified and
confirmed. This Second Consent is effective exclusively for the purposes set
forth herein, and any additional consents, waivers or amendments, modifications
or supplements to any Loan Document must be in writing in accordance with the
terms of the Credit Agreement or other applicable Loan Document. The execution,
delivery and effectiveness of this Second Consent shall not operate as a waiver
of any right, power or remedy of the Administrative Agent or any Lender under
the Loan Documents (except to the extent expressly set forth herein), or in any
other document, instrument or agreement executed and/or delivered in connection
therewith.
(b) Any inconsistency between this Second Consent and the
terms and provisions of the Credit Agreement prior to its modification
hereunder, shall be resolved in favor of this Second Consent, whether or not
this Second Consent specifically modifies the particular provision(s) in the
original Credit Agreement inconsistent with this Second Consent. All references
to the "Credit Agreement" in the Loan Documents and to "this Agreement" in the
original Credit Agreement shall mean and refer to the original Credit Agreement
as modified and amended hereby.
(c) This Second Consent may be executed in counterparts (and
by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Second Consent constitutes the entire understanding among
the parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof. This Second Consent shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature
<PAGE>
page of this Second Consent by telecopy shall be effective as delivery of a
manually executed counterpart of this Second Consent.
(d) The Borrowers agree to pay on demand all reasonable costs
and expenses of the Administrative Agent and the Lenders in connection with, or
arising out of the negotiation, preparation, execution and delivery of this
Second Consent (including the reasonable fees and expenses of counsel) and the
consummation of the transactions contemplated by the Amendment.
(e) This Second Consent shall be construed in accordance with
and governed by the law of the State of New York.
8. CALPERS. By its execution of this Second Consent,
CalPERS hereby acknowledges and consents to the entering into of this Second
Consent by the Company and confirms that the Loans as modified by this Second
Consent do not violate any policy, guidelines or limitations applicable to the
Company under the Operating Agreement, as amended by the Amendment.
Signatures Commence on Following Page.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Waiver, Amendment and Second Consent to Credit Agreement be duly executed
by their respective authorized officers as of the day and year first above
written.
BPP RETAIL, LLC,
a Delaware limited liability company,
By: Burnham Pacific Employees LLC,
a Delaware limited liability company,
its managing member
By: Burnham Pacific Operating
Partnership, L.P.,
a Delaware limited partnership,
its managing member
By: Burnham Pacific Properties, Inc.,
a Maryland corporation,
its general partner
By: /s/ Scott C. Verges
------------------------------
Name: Scott C. Verges
------------------------
Title: Secretary
------------------------
BPAC TEXAS, L.P.,
a Delaware limited partnership
By: BPAC Texas GP, LLC,
a Delaware limited liability company,
its general partner
By: BPAC Texas, Inc.,
a Delaware corporation,
its managing member
By: /s/ Scott C. Verges
------------------------------------
Name: Scott C. Verges
----------------------------
Title: Secretary
----------------------------
<PAGE>
THE CHASE MANHATTAN BANK, individually
and acknowledged as Administrative Agent
By: /s/ John F. Mix
-----------------------------------
Name: John F. Mix
------------------------------
Title: Vice President
-----------------------------
LAND BANK OF TAIWAN
By: /s/ Mayer Chen
------------------------------------
Name: Mayer Chen
-----------------------------
Title: Vice President & General Manger
-----------------------------
CHANG HWA COMMERCIAL BANK, LTD.
By: /s/ James Lin
------------------------------------
Name: James Lin
-----------------------------
Title: Vice President & General Manger
-----------------------------
BANK ONE, NA as Successor to
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Dell K. McCoy
------------------------------------
Name: Dell K. McCoy
-----------------------------
Title: Vice President
-----------------------------
AMSOUTH BANK
By: /s/ Lawrence Clark
------------------------------------
Name: Lawrence Clark
-----------------------------
Title: Vice President
-----------------------------
<PAGE>
CITIZENS BANK OF RHODE ISLAND
By: /s/ Craig E. Schermerhorn
------------------------------------
Name: Craig E. Schermerhorn
----------------------------
Title: Vice President
----------------------------
FIRST COMMERCIAL BANK
By: /s/ Bruce Ju
------------------------------------
Name: Bruce Ju
----------------------------
Title: Deputy General Manger
----------------------------
USTRUST
By: /s/ James P. McGoldrick
------------------------------------
Name: James P. McGoldrick
----------------------------
Title: Vice President
----------------------------
FIRST AMERICAN BANK TEXAS, SSB
By: /s/ Amy Engelberg
------------------------------------
Name: Amy Engelberg
----------------------------
Title: Assistant Vice President
----------------------------
COMERICA BANK
By: /s/ David J. Campbell
------------------------------------
Name: David J. Campbell
----------------------------
Title: Vice President
----------------------------
<PAGE>
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.
By: /s/ Jack R. Bertges
------------------------------------
Name: Jack R. Bertges
----------------------------
Title: Senior Vice President
----------------------------
By: /s/ James F. McCann
------------------------------------
Name: James F. McCann
----------------------------
Title: Vice President
----------------------------
UNION BANK OF CALIFORNIA, N.A.
By: /s/ David B. Murphy
------------------------------------
Name: David B. Murphy
----------------------------
Title: Vice President
----------------------------
TRAVELERS INSURANCE COMPANY
By: /s/ Robert Scoville
------------------------------------
Name: Robert Scoville
----------------------------
Title: Vice President
----------------------------
NEW YORK LIFE INSURANCE COMPANY
By: /s/ Mary Hebron
------------------------------------
Name: Mary Hebron
----------------------------
Title: Assistant Vice President
----------------------------
<PAGE>
ACKNOWLEDGED AND CONSENTED TO:
STATE OF CALIFORNIA PUBLIC
EMPLOYEES' RETIREMENT SYSTEM, AN
agency of the State of California
By: /s/ Guy F. Jacquier
------------------------------------
Name: Guy F. Jacquier
------------------------------------
Title: Senior Real Estate Investment Officer
------------------------------------
<PAGE>
EXHIBIT 99.1
Burnham Pacific Announces Modification of Joint Venture Agreement with CalPERS
SAN DIEGO, Jan. 6 /PRNewswire/ -- Burnham Pacific Properties, Inc.
(NYSE: BPP - news) today announced that it has finalized certain modifications
to BPP Retail LLC, the Company's joint venture with the California Public
Employees' Retirement System ("CalPERS").
As part of the modification, the Company exchanged substantially all of
its equity interest in BPP Retail LLC for a total consideration of approximately
$39.4 million, comprised of approximately $29.1 million in cash and an in-kind
property distribution valued at approximately $10.3 million. The cash proceeds
were used to reduce outstanding indebtedness.
In addition, as part of the modification, the Company sold two
properties to the joint venture for approximately $18.9 million, comprised of
approximately $12.8 million in cash and the assumption by the joint venture of
approximately $6.1 million in existing mortgage debt. The sale included the
Stanford Ranch Shopping Center, a 100,374 square-foot shopping center located in
Rocklin, California, anchored by a 45,540 square-foot Raley's Supermarket, and
the Foothill Plaza Shopping Center, a 52,300 square-foot shopping center located
in Los Altos, California, anchored by a 22,400 square-foot Rite Aid Drug Store.
The sale represents an aggregate gain of approximately $1.6 million over the
Company's book values for these properties. Cash proceeds were used to reduce
outstanding indebtedness and for general working capital purposes.
The Company will continue to serve as the manager of BPP Retail's
assets and would be entitled to continue to receive fees for asset management,
leasing, acquisition and disposition activities, but will no longer be eligible
for the incentive fee attributable to increases in asset values.
Commenting on the ongoing joint venture relationship, David Martin,
BPP's Chief Executive Officer, stated, "We look forward to continuing our
excellent relationship with CalPERS and working to maximize the value of BPP
Retail by continuing to acquire first-class neighborhood shopping centers."
"We are pleased to have quickly completed these modifications and to
position BPP Retail LLC as a continued growth investment vehicle for CalPERS
shopping center portfolio," said Charles P. Valdes, Chair of CalPERS Investment
Committee.
CalPERS is the nation's largest public pension fund with assets of more
than $165 billion. The System provides retirement and health benefits to more
than one million state and public employees and their families.
<PAGE>
Burnham Pacific is a real estate investment trust (REIT) that focuses
on value-added retail real estate opportunities throughout the United States.
Through its affiliates, the Company currently has interests in 106 properties
nationwide and makes available on a quarterly basis supplemental information
that includes property and corporate level detail which is available upon
request. More information on Burnham Pacific may be found on the Company's web
site at burnhampacific.com or by calling 800-462-5181.
This news release contains "forward-looking statements" that predict or
indicate future events or trends or that do not relate to historical matters. We
cannot assure the future events or outcomes of the matters described in these
statements; rather, these statements merely reflect our current expectations of
the approximate outcome of the matter discussed. Investors should read the
documents the Company files from time to time with the SEC, specifically the
risk factors that were disclosed in our Registration Statement on Form S-3 that
was filed with the SEC on August 13, 1999. You should be aware that the risk
factors contained in that Form S-3 may not be exhaustive. Therefore, we
recommend that you read the information in that Form S-3 together with other
reports and documents that we file with the SEC from time to time, including our
Forms 10-K, 10-Q, and 8-K which may supplement, modify, supersede or update
those risk factors.
