SECOND AMENDMENT TO LOAN AGREEMENT
This SECOND AMENDMENT TO LOAN AGREEMENT (this "Amendment"), dated as of
September 23, 2003, is made by and between ARCPI HOLDINGS, INC., a Delaware
corporation ("Borrower"), and HEALTH CARE PROPERTY INVESTORS, INC., a Maryland
corporation ("Lender").
Recitals
--------
A. Borrower and Lender have entered into that certain Amended and Restated
Loan Agreement, dated as of September 30, 2002 (the "Original Loan Agreement"),
made by and between Borrower and Lender. Capitalized terms used in this
Amendment without definition shall have the meanings given such terms in the
Original Loan Agreement, as amended by that certain First Amendment to Loan
Agreement dated March 31, 2003, and as further amended by this Amendment (as so
amended, the "Loan Agreement").
B. Borrower and Lender are concurrently herewith entering into that certain
Contract of Acquisition ("Contract of Acquisition") pursuant to which, among
other things, Borrower will be selling to Lender, Borrower's applicable interest
in certain of the Facilities, all as more particularly set forth in the Contract
of Acquisition.
C. Borrower has requested that Lender permit a partial repayment of the
Loan and consent to certain actions, all as more particularly set forth herein.
D. Lender is willing to agree to the amendments, on the terms and
conditions set forth in this Amendment.
Agreement
---------
NOW THEREFORE, in consideration of the premises and the mutual agreements
set forth herein, Borrower and Lender agree as follows:
1. Partial Prepayment. Notwithstanding Section 2.4 of the Loan Agreement,
Lender hereby consents to a partial prepayment of the Loan in an amount equal to
$51,825,956.00, which amount shall be applied first to accrued but unpaid
interest as of the Effective Date hereof and then to reduce the principal amount
of the Loan. The foregoing consent shall not be deemed or construed to
constitute Lender's consent or approval of any other prepayments, and all future
prepayments shall be subject in all respects to the provisions of Section 2.4 of
the Loan Agreement.
2. Consent of Lender. Lender hereby consents to Borrower entering into, and
causing its Affiliates to enter into, each of the Transaction Documents (as
defined in the Contract of Acquisition) and consummate the transactions
contemplated thereby in accordance with the terms thereof, including but not
limited to the transactions set forth in the Recitals thereto. In addition,
Lender hereby consents to Fort Austin Limited Partnership entering into the
Management Agreement (as defined below) and Borrower entering into the Guaranty
of Management Agreement (as defined below). The parties acknowledge that this
Amendment is one of the Transaction Documents contemplated by the Contract of
Acquisition.
1
3. Amendments To Loan Agreement. Subject to the conditions and upon the
terms set forth in this Amendment and in reliance on the representations and
warranties of Borrower set forth in this Amendment, the Loan Agreement is hereby
amended as follows:
(a) Schedule I. Schedule I shall be amended and restated in its
entirety with the information on Exhibit A attached hereto and
incorporated herein. Any definition in the Loan Agreement
referencing Schedule I shall be deemed to reference Schedule I
attached hereto.
(b) Schedule 2.3(b). Schedule 2.3(b) shall be amended and restated in
its entirety with the information on Exhibit B attached hereto
and incorporated herein.
(c) Schedule 5.4(g)(iv). Schedule 5.4(g)(iv) shall be amended and
restated in its entirety with the information on Exhibit C
attached hereto and incorporated herein.
(d) Amended Definitions. Each of the following definitions shall be
amended and restated in its entirety as follows:
(i) "Debt Service Coverage Ratio" means, for any period, the
ratio obtained by dividing (i) Adjusted Net Operating Income
for such period by (ii) the sum of (A) the cash payments
required on the Loan during such period plus (B) the
aggregate principal and interest payments on the First
Mortgage Loans during such period (excluding therefrom any
principal paid in connection with a Permitted Refinancing
Loan or a Permitted Payoff) plus (C) the net payments, if
any, made on the Required Interest Hedge during such
period."
(ii) "HCPI Guaranty" means each of that certain Guaranty of
Obligations dated March 29, 2002 with respect to the Phase I
Master Lease, and that certain Guaranty of Obligations dated
of even date herewith with respect to the New Separated
Master Lease.
(iii)"HCPI Lease" means each of the Phase I Master Lease and the
New Separated Master Lease. As used in any provision
relating to a default hereunder, including but not limited
to Section 6.1(n), "HCPI Lease" shall mean either or both of
the foregoing leases, as applicable.
(iv) "HCPI Lessees" means each of the Phase I Master Lease
Lessees and the Separated Lease Lessees. As used in any
provision relating to a default hereunder, "HCPI Lessee"
shall mean either or both of the foregoing lessees, as
applicable.
(v) "Master Lease" means that certain Master Lease, dated as of
September 30, 2002, between the Property Owners, on the one
hand, and the Property Operators, on the other hand, as
amended by that certain First Amendment to Master Lease of
even date herewith.
2
(e) New Definitions. The following new defined terms shall be added
to Section 1.1 of the Loan Agreement in appropriate alphabetical
order:
(i) "Guaranty of Management Agreement" means Borrower's guaranty
of Fort Austin Limited Partnership's obligations under the
Management Agreement, as set forth in the Management
Agreement.
(ii) "Land Loan" means the loan in the principal amount of
$7,000,000 made by Lender to Borrower pursuant to that
certain Contract of Acquisition and Loan Agreement dated of
even date herewith.
(iii)"Land Loan Documents" means (A) that certain Secured
Promissory Note of even date herewith by and between Lender
and Borrower, evidencing the Land Loan, and (B) that certain
Deed of Trust dated of even date herewith securing the Land
Loan, and (C) any other documents executed or delivered by
Borrower in connection with the Land Loan.
(iv) "Management Agreement" means that certain Management
Agreement of even date herewith by and between Fort Austin
Limited Partnership, a Texas limited partnership, as
manager, and Park Place Investments, LLC, a Kentucky limited
liability company, as lessee, with respect to the retirement
center located in Denver, Colorado, commonly known as "Park
Place".
(v) "New Separated Master Lease" means that certain Master Lease
of even date herewith by and between ARC Santa Catalina Real
Estate Holdings, LLC and Fort Austin Real Estate Holdings,
LLC, both of which are Delaware limited liability companies
and are collectively, lessor, and the Separated Lease
Lessees, as lessees, together with that certain Assignment
and Assumption Agreement dated of even date herewith by and
between ARC Santa Catalina Real Estate Holdings, LLC, ARC SC
Holdings, LLC, and Fort Austin Real Estate Holdings, LLC, as
assignors, and Lender and Borrower, as assignee, and that
certain Assignment and Assumption Agreement dated of even
date herewith by and between Borrower, as assignor, and
Arizona/Denver HCP REVX, LLC, as assignee.
(vi) "Phase I Master Lease" means that certain Master Lease dated
as of March 29, 2002, between HCPI and Texas HCP Holding,
L.P., a Delaware limited partnership, on one hand, and the
Phase I Master Lease Lessees, on the other hand.
(vii)"Phase I Master Lease Lessees" means, collectively, ARC
Carriage Club of Jacksonville, Inc., a Tennessee
corporation; ARC Delray Beach, LLC, a Tennessee limited
liability company; ARC Post Oak, L.P., a Tennessee limited
partnership; ARC Richmond Heights, LLC, a Tennessee limited
liability company; ARC Shavano, L.P., a Tennessee limited
partnership, ARC Boynton Beach, LLC, a Tennessee limited
liability company; and ARC Victoria, L.P., a Tennessee
limited partnership.
3
(viii) "Separated Lease Lessees" means, collectively, Fort Austin
Limited Partnership, a Texas limited partnership, and ARC
Santa Catalina, Inc., a Tennessee corporation.
(f) Deleted References. All references to ARC Santa Catalina, ARC SC
Holdings, ARC Somerby, ARC Fleetwood Entities, Ft. Worth
Facility, Sinking Fund Reserve Account and Somerby Purchase
Option shall be deleted.
(g) Section 2.3(a). The first sentence of Section 2.3(a) and the
table set forth therein shall be amended and restated in its
entirety as follows:
"On each Payment Date (other than the Payment Date occurring in
October 2003, on which Borrower shall make a cash payment to Lender in an
amount equal to $113,695.70, which amount shall represent accrued but
unpaid interest from the Effective Date through September 30, 2003),
Borrower shall make a cash payment to Lender in an amount equal to the
amount for such Payment Date set forth in the following table:
Period Payment
------ -------
From the Effective Date through February 1, 2004 $1,705,436
After February 1, 2004 through February 1, 2005 $1,810,476
After February 1, 2005 through February 1, 2006 $1,915,516
After February 1, 2006 through February 1, 2007 $2,020,556
After February 1, 2007 through the Maturity Date $2,125,596"
(h) Sections 5.1(a), 5.3(n)(i)(C) and 5.3(n)(iv). Sections 5.1(a),
5.3(n)(i)(C) and 5.3(n)(iv) shall each be amended and restated in
their entirety as follows:
"[Intentionally Deleted]"
(i) Section 5.1(b). The reference to "$31,600,000" in Section 5.1(b)
shall be amended and restated to be "$16,500,000"; the reference
to "$8,474,400" shall be amended and restated to be "$4,410,400";
and the reference to "$8,672,400" shall be amended and restated
to be "$4,513,500".
(j) Section 5.4(a). The following section shall be added to the Loan
Agreement as Section 5.4(a)(xi):
"(xi) any Lien created under any Land Loan Documents."
4
(k) Section 5.4 (b)(xi). The following section shall be added to the
Loan Agreement as Section 5.4(b)(xi):
"(xi) Indebtedness incurred pursuant to the Land Loan Documents."
(l) Section 5.4(c)(iii). Section 5.4(c)(iii) shall be amended and
restated in its entirety as follows:
"(iii) Contingent Obligations incurred pursuant to the Management
Agreement; and"
(m) Section 5.4(f). The following subsection (vi) shall be added to
Section 5.4(f):
"(vi) For Fort Austin LP, make advances in accordance with the
Management Agreement."
(n) Section 5.4(g)(xi). Section 5.4(g)(xi) shall be amended and
restated in its entirety as follows:
"(xi) For Fort Austin LP, the business of (x) operating the Ft.
Worth Facility and Austin Facility (as such terms are
defined in the New Separated Master Lease), and (y) serving
as the manager under the Management Agreement;"
(o) Section 6.1. The following section shall be added to the Loan
Agreement as Section 6.1(o):
"(o) Land Loan Documents. Borrower (i) fails to pay when due any
monetary obligation under the Land Loan Documents or (ii)
fails to perform or observe (giving effect to all applicable
cure periods) any material term, covenant or agreement
contained in the Land Loan Documents;"
(p) HCPI Loan Reserve Account. After the partial prepayment described
in Section 1 of this Amendment, Borrower shall have paid all
current interest on the Loan through the Effective Date. Lender
hereby agrees to release $1,691,763.44 from the HCPI Loan Reserve
Account promptly after the Effective Date. Notwithstanding
Section 5.4(n)(vi) of the Loan Agreement, for the Distribution
Date in October 2003 only, Borrower shall deposit into the HCPI
Loan Reserve Account an amount equal to $113,695.70, and such
amount shall be immediately released to Lender pursuant to
Section 2.3(a) of the Loan Agreement, as amended herein. All
deposits into the HCPI Loan Reserve Account after the
Distribution Date in October 2003 shall be in accordance with
Section 5.4(n)(vi) of the Loan Agreement.
(q) Separateness Covenant. Borrower shall, within 60 days of the date
hereof, cause each Subsidiary to amend all of its respective
organizational documents currently containing separateness
covenants (including, but not limited to charters, bylaws,
limited liability company operating agreements and limited
partnership
5
agreements) to add that such Subsidiary will not permit any
Affiliate to guarantee its debt or obligations except as may be
expressly provided for by the terms of the Loan Agreement or the
HCPI Lease.
4. Representations And Warranties of Borrower. In order to induce Lender to
enter into this Amendment, Borrower represents and warrants to Lender that the
following statements are true, correct and complete:
(a) Power and Authority. Borrower has the corporate or other
organizational power: (i) to carry on its business as now being
conducted and as proposed to be conducted by it; (ii) to execute,
deliver and perform this Amendment and to perform the Loan
Agreement; and (iii) to take all action as may be necessary to
consummate the transactions contemplated hereunder and
thereunder.
(b) Due Authorization. The execution, delivery and performance by
Borrower of this Amendment and the Loan Agreement have been duly
authorized by all necessary corporate or other organizational
action, and do not contravene (i) Borrower's charter or bylaws or
other organizational documents or (ii) any law or any contractual
restriction binding on or affecting Borrower, and do not result
in or require the creation of any Lien upon or with respect to
any of its respective properties.
(c) Binding and Enforceable. This Amendment has been duly executed
and delivered by Borrower and the Amendment and the Loan
Agreement are legally valid and binding obligations of Borrower
enforceable against Borrower in accordance with their respective
terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limiting creditors' rights generally and
subject to the availability of equitable remedies.
(d) No Defaults. No Default or Event of Default has occurred and is
continuing.
(e) No Conflicts or Restrictions. The execution, delivery and
performance by Borrower of this Amendment and the performance of
the Loan Agreement do not and will not (i) conflict with, result
in a breach of, or constitute (with or without notice or the
lapse of time or both) a default under, any material agreement,
document or other instrument of Borrower or binding on Borrower
or any property of Borrower; or (ii) result in or require the
creation or imposition of any Lien upon any of the property or
assets of Borrower.
(f) No Material Adverse Effect. No event has occurred that has
resulted, or could reasonably be expected to result, in a
Material Adverse Effect.
(g) Representations and Warranties. Each of the representations and
warranties contained in the Loan Documents is and will be true
and correct in all material respects on and as of the date hereof
and as of the effective date of this Amendment, except to the
extent that such representations and warranties specifically
relate to an earlier date, in which case they were true, correct
and complete in all material respects as of such earlier date.
6
5. Conditions To Effectiveness Of This Amendment. This Amendment shall be
effective as of September 23, 2003 (the "Effective Date") only if and when
signed by, and when counterparts hereof shall have been delivered to Lender (by
hand delivery, mail or telecopy) by Borrower and Lender and only if and when
each of the following conditions is satisfied:
(a) No Default or Event of Default; Accuracy of Representations and
Warranties. No Default or Event of Default shall exist and each
of the representations and warranties made by the Loan Parties
herein and in or pursuant to the Loan Documents shall be true and
correct in all material respects as if made on and as of the date
on which this Amendment becomes effective (except that any such
representation or warranty that is expressly stated as being made
only as of a specified earlier date shall be true and correct as
of such earlier date), and Borrower shall have delivered to
Lender a certificate confirming such matters.
(b) Other Documents. Lender shall have received such documents as
Lender may reasonably request in connection with this Amendment.
6. Effect Of Amendment; Ratification. This Amendment is a Loan Document.
From and after the date on which this Amendment becomes effective, all
references in the Loan Documents to the Loan Agreement shall mean the Loan
Agreement as amended hereby. Except as expressly amended hereby or waived
herein, the Loan Agreement and the other Loan Documents, including the Liens
granted thereunder, shall remain in full force and effect, and all terms and
provisions thereof are hereby ratified and confirmed. Borrower confirms that as
amended hereby, each of the Loan Documents is in full force and effect, and that
none of the Loan Parties has any defenses, setoffs or counterclaims to its
Obligations.
7. Governing Law. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York.
8. Entire Agreement. This Amendment, together with the other Loan
Documents, embodies the entire agreement and understanding between Borrower and
Lender and supersedes all prior or contemporaneous agreements and understandings
of such persons, verbal or written, relating to the subject matter hereof and
thereof.
9. Execution in Counterparts. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
10. Headings. The captions and headings of this Amendment are for
convenience of reference only and shall not affect the construction of this
Amendment.
[signatures follow; remainder of page intentionally left blank]
7
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
Loan Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
ARCPI HOLDINGS, INC., a Delaware corporation, as Borrower
By:
--------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
HEALTH CARE PROPERTY INVESTORS, INC.,
a Maryland corporation, as Lender
By:
--------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
1
