FOURTH AMENDMENT TO LOAN AGREEMENT AND DOCUMENTS
THIS FOURTH AMENDMENT TO LOAN AGREEMENT AND DOCUMENTS, dated as of November
3, 1998 (the "Amendment"), is entered into by and between BROOKDALE LIVING
COMMUNITIES, INC., a Delaware corporation (the "Borrower"), and LaSALLE NATIONAL
BANK, a national banking association (the "Bank").
WITNESSETH
WHEREAS, Borrower has previously executed and delivered to the Bank a
certain Note dated April 27, 1998 in the original principal amount of up to
Fifteen Million Dollars ($15,000,000.00) (the "Original Note") evidencing a
certain loan (the "Loan") set forth more fully in and governed by a certain Loan
Agreement of that same date to which the Bank is also a party (the "Original
Loan Agreement");
WHEREAS, the Loan was subsequently modified and amended by Borrower's
execution and delivery to the Bank of a certain Amended and Restated Note dated
July 16, 1998 increasing the principal amount of the Loan by $10,000,000.00, on
an interim basis only, from $15,000,000.00 to $25,000,000.00 (the "Amended and
Restated Note") and a certain First Amendment to Loan Agreement and Documents of
that same date to which the Bank is also a party (the "First Amendment") that
(a) increased the principal amount of the Loan on an interim basis as aforesaid
and (b) permitted a portion of the Loan to be reserved for the issuance of
standby Letters of Credit by the Bank to and for the benefit of municipalities
and other governmental units in connection with projects developed by Borrower
from time to time as set forth more fully therein;
WHEREAS, the Loan was subsequently modified and amended by Borrower's
execution and delivery to the Bank of a certain Second Amendment to Loan
Agreement and Documents dated October 14, 1998 to which the Bank is also a party
(the "Second Amendment") wherein (a) the Bank consented to the Borrower's
proposed issuance of a convertible subordinated and unsecured note to OZ Master
Fund, Ltd. in the principal amount of Ten Million Dollars ($10,000,000.00), (b)
the Bank permitted the Borrower to guarantee financing from other financial
institutions to certain Subsidiaries of Borrower in connection with certain
development projects located in Xxx Xxxx, Xxx Xxxx (Xxxxxxx Xxxx Xxxx), Xxxx
Ellyn, Illinois and Raleigh, North Carolina, which projects were to be
originally financed by Nomura Asset Capital Corporation, (c) the Event of
Default set forth in Section 7.01(O) of the Loan Agreement was modified and
restructured, and (d) the Interim Maturity Date was extended to November 3,
1998;
WHEREAS, the Loan was subsequently modified and amended by Borrower's
execution and delivery to the Bank of a certain Third Amendment to Loan
Agreement and Documents dated October 20, 1998 to which the Bank is also a party
(the "Third Amendment") wherein (a) the Maximum Revolving Loan Commitment was
frozen at $24,953,750 (the "Outstanding Principal Amount"), (b) the "Interim
Maturity Date" was extended to November 3, 1998, (c) it was agreed that, on the
Interim Maturity Date (x) the outstanding principal balance of the Loan was to
be reduced to $10,000,000, and (y) the principal amount of the Loan and Maximum
Revolving Loan Commitment were to be decreased from $25,000,000 to an amount not
to exceed $10,000,000, (d) the Interim Interest Rate and the Revised Default
Rate were adjusted, and (e) certain additional changes to the Maximum Revolving
Loan Commitment were mandated based upon the Stock Price of the Company from
time to time, all of the foregoing as set forth more fully in and subject to the
terms and conditions of the Third Amendment (the Original Loan Agreement, as
amended by the First Amendment, the Second Amendment, and the Third Amendment,
is herein referred to as the "Loan Agreement");
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WHEREAS, the Borrower has represented to the Bank that it intends to
close on a convertible subordinated debt offering of approximately $35,000,000
(the "Offering") on or about November 18, 1998, the proceeds of which would be
used by the Borrower to reduce the outstanding principal balance of the Loan to
zero, and has therefore requested the Bank to extend the Interim Maturity Date
as set forth herein, which the Bank is willing to do subject to the terms and
conditions set forth herein:
NOW, THEREFORE, in consideration of the premises, the covenants and
agreements herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. Incorporation of Recitals. The above and foregoing recitals are
incorporated into and made a part of this Amendment. All capitalized terms used
herein, if not otherwise specifically defined, shall have the meanings and
definitions prescribed in the Loan Agreement and the Documents referred to
therein.
2. Outstanding Principal Balance of Loan. Except for the provisions of
Paragraph 4 (a) of this Amendment, for purposes of this Amendment and the Loan
Agreement, the outstanding principal balance of the Loan at any time shall be
the sum of (a) all amounts of the Loan Advances made under the Loan Agreement
remaining unpaid plus (b) all outstanding LC Reserves. For the purposes of
Paragraph 4 (a) of this Amendment, the outstanding principal balance of the Loan
shall mean all amounts of the Loan Advances made under the Loan Agreement
remaining unpaid excluding the outstanding LC Reserves.
3. Interim Maturity Date. The term "Interim Maturity Date" is hereby
amended and restated to mean a date certain which is the first to occur of (a)
November 30, 1998, or (b) the date on which Borrower closes on the Offering.
4. Decreased Loan Balance and Commitment. On the Interim Maturity Date,
without further notice, (a) the Borrower shall pay down the outstanding
principal balance of the Loan to zero ($0.00) provided the Offering has closed,
and (b) the Borrower shall pay down the outstanding principal balance of the
Loan to $10,000,000.00 regardless of whether the Offering has closed, and (c)
the principal amount of the Loan and Maximum Revolving Loan Commitment shall be
decreased from $25,000,000.00 to an amount not to exceed $10,000,000.00
regardless of whether the Offering has closed.
5. Maturity Date. The term "Maturity Date" is hereby amended and
restated to mean (a) the Interim Maturity Date as to any and all amounts of the
outstanding principal balance of the Loan in excess of $10,000,000.00, and (b)
April 26, 1999 as to the outstanding principal balance of the Loan at or below
$10,000,000.00 together with any accrued but unpaid interest thereon and any
other costs or amount owed to the Bank under the Loan Agreement as amended
hereby.
6. Interim Interest Rate. The Borrower acknowledges and agrees that
effective as of October 20, 1998, (a) the outstanding principal balance of the
Loan in excess of $10,000,000.00 has been bearing and shall continue to bear
interest at the Prime Rate plus four percent (4.0%), and (b) the outstanding
principal balance of the Loan not in excess of $10,000,000.00 has been bearing
and shall continue to bear interest payable at the Prime Rate plus one-half of
one percent (0.50%) per annum (the "Interim Interest Rate"). The Interim
Interest Rate is, during its pendency, in lieu of the interest rate set forth in
Section 2.02 of the Loan Agreement and in lieu of the Interim Interest Rate set
forth in the Second Amendment.
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7. Fee. As an inducement and condition to the execution of this
Amendment by the Bank, the Borrower shall pay the Bank an extension fee in the
amount of $50,000.00 (the "Extension Fee"). If on the Interim Maturity Date the
outstanding principal balance of the Loan is reduced to zero ($0.00) by
application of the proceeds of the Offering and if the Borrower is not otherwise
in default under the Loan Agreement or the Documents, the Extension Fee shall be
refunded to Borrower. If on the Interim Maturity Date the outstanding principal
balance of the Loan has not been reduced to zero ($0.00) by application of the
proceeds of the Offering or if the Borrower is otherwise in default under the
Loan Agreement or the Documents, the Extension Fee shall be deemed fully paid to
and earned by the Bank.
8. Reaffirmation. To the extent any term(s) or condition(s) in any of
the Documents (including, without limitation, the Amended and Restated Note)
shall contradict or be in conflict with the amended terms of the Loan as set
forth herein, such terms and conditions are hereby deemed modified and amended
accordingly, upon the effective date hereof, to reflect the terms of the Loan as
so amended herein. All terms of the Documents (including, without limitation,
the Amended and Restated Note), as amended hereby, shall be and remain in full
force and effect and shall constitute the legal, valid, binding and enforceable
obligations of Borrower to the Bank. As of the date of this Amendment, Borrower
herein restates, ratifies and reaffirms each and every term and condition set
forth in the Documents as amended herein. There are no other changes to the
Documents, including without limitation the Loan Agreement, except for the
changes specifically set forth herein.
9. No Waiver. No failure or delay on the part of the Bank in exercising
any right, power or remedy hereunder or under any other Documents shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy hereunder or under any other Document. The
remedies herein provided and under any other Document are cumulative and not
exclusive of any remedies provided by law.
10. Certification. To further induce the Bank to enter into this
Amendment, Borrower represents and warrants to the Bank as follows: (a) Borrower
is empowered to perform all acts and things undertaken and done pursuant to this
Amendment and has taken all corporate or other action necessary to authorize the
execution, delivery and performance of the of this Amendment; (b) the officers
of Borrower executing this Amendment have been duly elected or appointed and
have been fully authorized to execute the same at the time executed; (c) this
Amendment, when executed and delivered, will be the legal, valid and binding
obligation of Borrower, enforceable against it in accordance with its respective
terms; and (d) Borrower is delivering to the Bank contemporaneously herewith, a
certificate of Borrower's Secretary certifying as to the resolutions of the
Executive Committee of Borrower's Board of Directors approving this Amendment
and the incumbency and signatures of the officers of Borrower signing this
Amendment.
11. Absence Of Claim. To further induce the Bank to enter into this
Amendment, Borrower hereby acknowledges and agrees that, as of the date hereof,
there exists no right of offset, defense, counterclaim or objection in favor of
Borrower as against the Bank with respect to the Obligations to the Bank.
12. Illinois Law To Govern. This Amendment and each transaction
contemplated hereunder shall be deemed to be made under and shall be construed
and interpreted in accordance with the laws of the State of Illinois.
13. Binding Effect. The terms, provisions and conditions of this
Amendment shall be binding upon and inure to the benefit of each respective
party and their respective legal representatives, successors and assigns.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BORROWER:
BROOKDALE LIVING COMMUNITIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
Print Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Executive Vice President
ATTEST:
By: /s/ Xxxxxx X. Xxxxxx
Print Name: Xxxxxx X. Xxxxxx
Title: Secretary
BANK:
LaSALLE NATIONAL BANK
By: /s/ Xxx X. X'Xxxxxxxxxxx
Print Name: Xxx X. X'Xxxxxxxxxxx
Title: Assistant Vice President
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