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SECOND AMENDMENT TO LOAN AGREEMENT, FIRST AMENDMENT TO
GUARANTY AND SURETYSHIP AGREEMENT,
AND REAFFIRMATION AGREEMENT
This SECOND AMENDMENT TO LOAN AGREEMENT, FIRST AMENDMENT TO GUARANTY
AND SURETYSHIP AGREEMENT, AND REAFFIRMATION AGREEMENT ("Amendment"), made as of
September ___, 1998 is by and among THE CAPITAL COMPANY OF AMERICA LLC, a
Delaware limited liability company, having an address at 2 World Xxxxxxxxx
Xxxxxx, Xxxxxxxx X, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Xxxxxxxxxxx
Xxxxxxx, Telefax Number (000) 000-0000 (together with its successors and
assigns, "Lender"), ALS-VENTURE II, INC., a Delaware corporation having an
address at c/o Alternative Living Services, Inc., 000 Xxxxx Xxxxxxxxxx Xxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxx 00000, Attention: Chief Financial Officer,
Xxxxxx X. Xxxxxx, Telefax Number (000) 000-0000 ("Borrower"), ALTERNATIVE
LIVING SERVICES, INC., a Delaware corporation, 000 Xxxxx Xxxxxxxxxx Xxxx, Xxxxx
000, Xxxxxxxxxx, Xxxxxxxxx 00000, Attention: Chief Financial Officer, Xxxxxx X.
Xxxxxx, Telefax Number (000) 000-0000 ("Guarantor" and "Parent Pledgor", as
applicable) and ALS-CLARE BRIDGE, INC., a Delaware corporation, 000 Xxxxx
Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxx 00000 ("Subsidiary Pledgor";
the "Parent Pledgor" and the "Subsidiary Pledgor" are referred to herein
collectively as the "Pledgors").
RECITALS
A. WHEREAS, Lender and Borrower are parties to that certain Loan
Agreement made as of May 26, 1998 and amended as of July 31, 1998 pursuant to
that certain First Amendment to Loan Agreement and Reaffirmation Agreement (the
"Original Loan Agreement") which Original Loan Agreement provides for a series
of advances (collectively, the "Loan") from Lender in the principal amount up
to $82,000,000 which amount may be increased by the Earn-Out Advance for up to
$8,000,000, provided the terms of the Loan Agreement are complied with. The
Loan is evidenced by those certain promissory notes each dated as of May 26,
1998 and each executed and delivered by Borrower to Lender. The Loan is secured
by, inter alia, real property, improvements thereon and other collateral
(collectively, "Property"). Unless otherwise defined herein, capitalized terms
used in this Amendment shall have the meaning set forth in the Original Loan
Agreement;
B. WHEREAS, pursuant to Article III of the Original Loan
Agreement, the parties to this Amendment desire Lender to make the final
Additional Facility Advance;
C. WHEREAS, Lender and Borrower have agreed, among other things,
to amend the Loan by having the Loan be evidenced by five notes, instead of the
four notes referenced in the Original Loan Agreement. Accordingly, Borrower is
splitting the note in
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the amount of $72,681,000 ("Original Master Note") and, in exchange therefor,
delivering to Lender a note in the amount of $65,737,000 ("Note A") and a note
in the amount of $5,650,000 ("Note B"); and
D. WHEREAS, in connection with the foregoing recitals, and as a
condition to Lender making the Additional Facility Advance, the parties desire
to amend the Original Loan Agreement in the manner set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals, which are
by this reference incorporated herein, and for other valuable consideration the
receipt and sufficiency of which is hereby acknowledged, the parties, intending
to be legally bound, hereby agree as follows:
1. Amendments to Original Loan Agreement.
1.1 Exhibit B. Exhibit B of the Original Loan Agreement
is hereby deleted in its entirety and replaced with the Exhibit B attached
hereto and by this reference incorporated herein.
1.2 Adjusted Net Operating Income Definition. The
definition of "Adjusted Net Operating Income" is hereby deleted in its entirety
and replaced with the following:
"Adjusted Net Operating Income" means (calculated for the
Facilities or any Facility), for any period, the Net
Operating Income for such period reduced by (i) the Capital
Reserve Amount, pro rated for the applicable period, (ii) to
the extent not reflected in the Net Operating Income, annual
base management fees, pro rated for the applicable period,
equal to the greater of (y) actual base management fees paid
pursuant to the applicable Management Agreement and (z) five
percent (5%) of Gross Revenues (provided, however, in no
event shall the annual base management fees included in this
clause (ii) include any management expenses, such as, but not
limited to, accounting expenses, marketing costs, regional
and corporate personnel expenses and general corporate
overhead, to the extent such expenses are actually reflected
in the Net Operating Income), and (iii) an amount necessary
to reflect a minimum annual vacancy factor of five percent
(5%), pro rated for the applicable period. Notwithstanding
the foregoing , to the extent Adjusted Net Operating Income
must be calculated for a period which is less than twelve
(12) months, Adjusted Net Operating Income shall be
calculated for such period on an annualized basis.
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1.3. Base Adjusted NOI Definition. The definition of "Base
Adjusted NOI" is hereby deleted in its entirety.
1.4. Note. The definition of "Note" is hereby deleted in
its entirety and replaced with the following:
"Note" means and refers to collectively, (i) the $1,690,000
promissory note relating to the Facility located in Penn
Hills, Pennsylvania, (ii) the $4,271,000 promissory note
relating to the Facility located in Cheswick, Pennsylvania,
(iii) the $3,358,000 promissory note relating to the Facility
located in Export, Pennsylvania, (iv) the $5,650,000
promissory note relating to the Facility located in Mars,
Pennsylvania, and (v) the $65,737,000 promissory note
relating to all the other Facilities, each in form and
substance satisfactory to Lender in Lender's discretion,
dated the Closing Date, made by Borrower to Lender or made by
Borrower to Nomura Asset Capital Corporation, a Delaware
corporation ("Nomura") and subsequently assigned and endorsed
by Nomura to Lender pursuant to this Agreement, as any such
promissory notes may be modified, amended, supplemented,
extended or consolidated in writing, and any note(s) issued
in exchange therefor or in replacement thereof.
1.4. Spread. The definition of "Spread" is hereby deleted
in its entirety and replaced with the following:
"Spread" means 2.18%, which is a weighted average of the
following spreads: (i) 1.95% spread on the Closing Date
Advance on May 26, 1998, (ii) 1.95% spread on the Additional
Facility Advance on July 31, 1998, and (iii) 2.65% spread on
the Additional Facility Advance on the date hereof.
2. Amendments to Guaranty and Suretyship Agreement. The Guaranty
and Suretyship Agreement is hereby amended to delete the first "Whereas"
paragraph thereof and to replace such paragraph with the following:
"WHEREAS, Borrower and Lender are parties to a Loan Agreement dated as
of May 26, 1998 and amended as of July 31, 1998 and as of the date of
the September Additional Facility Advance (said Loan Agreement, as
modified and supplemented and in effect from time to time, the "Loan
Agreement"), which Loan Agreement provides for a series of advances
(collectively, the "Loan") to be made by the Lender to Borrower. The
Loan is to be evidenced by, and repayable with interest thereon,
Default Rate interest, and Late Charges, together with the Yield
Maintenance Premium, if any, in accordance with those certain
promissory notes each dated as of May 26, 1998 (such notes, as
modified and supplemented and in effect from time to time,
collectively, the
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"Note"). Capitalized terms when used herein without definition shall
have the same meaning as defined in the Loan Agreement;"
3. Ratification and Reaffirmation. Each of Borrower, Guarantor
and Pledgors hereby ratify and confirm, and reaffirm in all respects and
without condition, all of the terms, covenants and conditions set forth in the
Loan Documents to which each is bound and hereby respectively agree as follows:
3.1 Borrower remains unconditionally liable to Lender in
accordance with the terms, covenants and conditions of the Loan Documents, all
Collateral, Liens, and other security interests and pledges created pursuant
thereto or referred to therein shall continue unimpaired and in full force and
effect and shall continue to secure all of the existing and future Indebtedness
due under the Original Loan Agreement.
3.2 Guarantor remains unconditionally liable to Lender in
accordance with the terms, covenants and conditions of the Guaranty and
Suretyship Agreement, the Environmental Indemnity Agreement, Equity Pledge
Agreements and any other Loan Document by which Guarantor is bound.
3.3 Subsidiary Pledgor remains unconditionally liable to
Lender in accordance with the terms, covenants and conditions of the Equity
Pledge Agreements and any other Loan Document by which Subsidiary Pledgor is
bound.
3.4 Borrower, Guarantor and Subsidiary Pledgor agree that
the Loan Documents, as so modified, remain in full force and effect as of the
date hereof, and nothing herein contained shall be construed to impair the
security or affect the first priority of the lien of any mortgage, nor impair
any rights or powers which Lender or its successors may have for nonperformance
of any term of any of the Loan Documents. All Collateral, Liens and other
security interests and pledges created pursuant to, or referred to in, the Loan
Documents shall continue unimpaired and in full force and effect and shall
continue to secure all of the existing and future Indebtedness due under the
Original Loan Agreement.
4. Representations and Warranties. Borrower, Guarantor and
Pledgors acknowledge and agree that any and all representations and warranties
(including, without limitation, the Single-Purpose Entity representations and
warranties) contained in the Original Loan Agreement and all the other Loan
Documents shall be deemed to be remade as of the date hereof. Further,
Borrower, Guarantor and Pledgors represent and warrant that there are no
existing or pending Defaults or Events of Default under the Loan Agreement or
any other Loan Document.
5. Severability. In case any provision of this Amendment shall be
invalid, illegal, or unenforceable, such provision shall be deemed to have been
modified to the extent necessary to make it valid, legal, and enforceable. The
validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
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6. No Modification Except in Writing. None of the terms of this
Amendment may be modified, waived, altered, amended, supplemented, extended,
consolidated, replaced, exchanged or otherwise changed except by an instrument
in writing duly executed by all of the parties hereto.
7. Further Assurances. Borrower, Guarantor and Subsidiary Pledgor
shall execute and deliver such further instruments and perform such further
acts as may be requested by Lender from time to time to confirm the provisions
of this Amendment and the Loan Documents, to carry out more effectively the
purposes of this Amendment and the Loan Documents, or to confirm the priority
of any Lien created by any of the Loan Documents.
8. Miscellaneous.
8.1 This Amendment constitutes the entire agreement among
the parties concerning its subject matter.
8.2 This Amendment shall inure to the benefit of and be
binding upon the parties and their respective heirs, successors and assigns.
8.3 This Amendment may be executed in two or more
counterparts each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.4 This Amendment shall be governed by and construed in
accordance with the laws of the State of New York (without giving effect to New
York's principles of conflict of law).
8.5 Any reference to the Loan Agreement in any of the
Loan Documents shall hereafter mean the Original Loan Agreement as amended by
this Amendment as the same may be subsequently amended, modified, altered,
supplemented, extended, consolidated, replaced, exchanged or otherwise changed.
9. Effective Date. This Amendment was signed on September 16,
1998. However, this Amendment is effective only as of September ___, 1998.
[Signatures Appear On Next Page]
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IN WITNESS WHEREOF, the parties hereto have caused this SECOND
AMENDMENT TO LOAN AGREEMENT, FIRST AMENDMENT TO GUARANTY AND SURETYSHIP
AGREEMENT, AND REAFFIRMATION AGREEMENT to be duly executed by their duly
authorized representatives, all as of the day and year first above written.
LENDER:
THE CAPITAL COMPANY OF AMERICA LLC, a
Delaware limited liability company
By:
---------------------------------
Xxxxxxxxxxx Xxxxxxx
Vice President
BORROWER:
ALS-VENTURE II, INC., a Delaware
corporation
By:
---------------------------------
Xxxxx Xxxxxxx
Vice President
GUARANTOR / PARENT PLEDGOR:
ALTERNATIVE LIVING SERVICES, INC.,
a Delaware corporation
By:
--------------------------
Xxxxx Xxxxxxx
Vice President
SUBSIDIARY PLEDGOR:
ALS-CLARE BRIDGE, INC., a Delaware corporation
By:
---------------------------
Xxxxx Xxxxxxx
Vice President
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EXHIBIT B
Additional Definitions
Closing Date Advance (May 26, 1998) $32,516,000
Initial Basic Carrying Costs Amount $121,905.16
Initial Capital Reserve Amount $ 0
Additional Facility Advance (July 31, 1998) $21,330,000
Additional Facility Advance (September ___, 1998) $26,860,000
ALLOCATED LOAN AMOUNTS
----------------------
1. Clare Bridge of Cheswick $4,271,000
Cheswick, PA
2. Clare Bridge of Murrysville $3,358,000
Export, PA
3. Sterling House of Columbia $2,352,000
Columbia, SC
4. Sterling House of Rock Hill $2,259,000
Rock Hill, SC
5. WovenHearts of Battle Creek $2,495,000
Battle Creek, MI
6. WovenHearts of Bay City $2,478,000
Bay City, MI
7. WovenHearts of Midland $2,500,000
Midland, MI
8. WovenHearts of Monroe $2,769,000
Monroe, MI
9. WovenHearts of Penn Hills $1,690,000
Penn Hills, PA
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10. WovenHearts of Saginaw $2,547,000
Saginaw Township, MI
11. WovenHearts of Xxxxxx Creek $1,069,000
Xxxxxx Creek, MI
12. WovenHearts of West St. Xxxx $2,206,000
West St. Xxxx, MN
13. WovenHearts of Westland $2,502,000
Westland, MI
14. Sterling House of South Bend $2,210,000
SouthBend, IN
15. WovenHearts of Xxxx Rapids $3,330,000
Coon Rapids, MN
16. Clare Bridge of Oviedo/ $6,940,000
WovenHearts of Oviedo
Oviedo, FL
17. Xxxxxxxx House of Portage/ $8,850,000
Wynwood of Portage
Portage, MI
18. Wynwood of Xxxxx (I) $5,650,000
Mars, PA
19. Clare Bridge of Sun City West $4,610,000
Sun City West, AZ
20. Clare Bridge of Eagan $4,500,000
Eagan, MN
21. Clare Bridge of Brandon (II) $2,530,000
Brandon, FL
22. Sterling House of Maryville $2,300,000
Maryville, TN
23. Sterling House of Littleton $2,730,000
Littleton, CO
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24. Sterling Cottage of Goodlettsville $2,180,000
Goodlettsville, TN
25. Sterling House of Cape Coral $2,360,000
Cape Coral, FL
LEASED FACILITIES OPERATOR ADDRESS
----------------- -------- -------
Clare Bridge of Cheswick ALS-Indiana (PA) 000 Xxxxx 000
Xxxxxxxx, XX Partners, a Pennsylvania Xxxxxxxx, XX 00000
general partnership
Clare Bridge of Murrysville Clare Bridge of 0000 Xxx Xxxxxxx
Xxxxxx, XX Murrysville L.P., a Penn Highway
Delaware limited partnership Xxxxxx, XX 00000
Sterling House of Columbia Burkshire Development, L.L.C., 000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX a South Carolina limited Xxxxxxxx, XX 00000
liability company
Sterling House of Rock Hill Gatwick Development, L.L.C., 0000 Xxxxxxxx Xxxx
Xxxx Xxxx, XX a South Carolina limited Xxxx Xxxx, XX 00000
liability company
WovenHearts of Bay City WovenHearts of Bay City L.P., 000/000 X. Xxxx Xxxx
Xxx Xxxx, XX a Delaware limited partnership Xxx Xxxx, XX 00000
WovenHearts of Midland WovenHearts of Midland L.P., 0000/0000 Xxxxx Xxxxxx
Xxxxxxx, XX a Delaware limited partnership Xxxxxxx, XX 00000
WovenHearts of Monroe WovenHearts of Xxxxxx X.X., 0000/0000 Xxxxxxxxxx Xxxxx
Xxxxxx, XX a Delaware limited partnership Xxxxxx, XX 00000
WovenHearts of Saginaw WovenHearts of Saginaw L.P., 0000/0000 XxXxxxx Xxxx
Xxxxxxx, XX a Delaware limited partnership Xxxxxxx, XX 00000
WovenHearts of West WovenHearts of West St. Xxxx 305/315 X. Xxxxxxxx
Avenue St. Xxxx L.P., a Delaware limited Xxxx Xx. Xxxx, XX 00000
Xxxx Xx. Xxxx, XX partnership
WovenHearts of Westland WovenHearts of Westland 32111/32151 Cherry Xxxx
Xx L.P., a Delaware limited Xxxxxxxx, XX 00000
Westland, MI partnership
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Sterling House of Rosebery Development, L.L.C., 00000 Xxxxx Xxxx 00,
Xxxxx Xxxx an Indiana limited liability South Bend, IN
company
WovenHearts of Xxxx WovenHearts of Xxxx Rapids I, 0000 000xx Xxxx,
Xxxxxx (I) L.P., a Delaware limited Coon Rapids, MN
partnership
WovenHearts of Xxxx WovenHearts of Xxxx Rapids II, 11372 Xxxxxxxx Drive,
Rapid (II) L.P., a Delaware limited Coon Rapids, MN
partnership
Clare Bridge of Oviedo (I) WovenHearts of Oviedo I, L.P., 000 Xxxxxxxxxx Xxxx.,
a Delaware limited partnership Oviedo, FL
WovenHearts of Oviedo WovenHearts of Xxxxxx XX, X.X., 000 Xxxxxxx Xxxxx Xxxx.,
(XX) a Delaware limited partnership Oviedo, FL
WovenHearts of Oviedo WovenHearts of Oviedo III, L.P., 355 Alafaya Xxxxx Blvd.,
(III) a Delaware limited partnership Oviedo, FL
Xxxxxxxx House of Portage Xxxxxxxx House of Portage L.P. 0000 Xxx Xxxxxx Xxxxxx,
a Delaware limited partnership Portage, MI
Wynwood of Portage Wynwood of Portage L.P., 0000 Xxx Xxxxxx Xxxxxx,
a Delaware limited partnership Portage, MI
Wynwood of Xxxxx (I) Wynwood of Xxxxx X.X., a 00 Xxxxx Xxxxx Xxxx.,
Xxxxxxxx limited partnership Mars, PA
Clare Bridge of Sun City Clare Bridge of Sun City West 00000 X. Xxxxxx Xxxx.,
Xxxx L.P., a Delaware limited Sun City West, AZ
partnership
Clare Bridge of Xxxxx Xxxxx Bridge of Xxxxx X.X., a 0000 Xxxxxxxxxx Xxxx,
Xxxxxxxx limited partnership Eagan, MN
Sterling House of Xxxxxxx Xxxxxxxx of Xxxxxxx XX/Cape 000 X. Xxxxxxx Xxxxxx,
Xxxxx LLC, a Delaware limited Brandon, FL
liability company
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Sterling House of Sterling of Maryville/ 000 Xxxxxxx Xxxxxxx Xxxx,
Xxxxxxxxx Xxxxxxxxxxxxxx LLC, a Delaware Maryville, TN
limited liability company
Sterling House of Sterling of Littleton LLC, a 0000 X. Xxxxxxxxxxx
Xxxxxxxxx Xxxxxxxx limited liability Divide Road,
Littleton, CO
Sterling Cottage of Sterling Cottage Maryville/ 0000 Xxxxxxxx Xxxxx,
Xxxxxxxxxxxxxx Xxxxxxxxxxxxxx LLC, a Delaware Goodlettsville, TN
limited liability company
Sterling House of Sterling of Xxxxxxx XX/Cape 0000 Xxxxxxx Xxxx Xxxx,
Xxxx Xxxxx Coral LLC, a Delaware limited Cape Coral, FL
liability company
NONLEASED FACILITIES ADDRESS
-------------------- -------
WovenHearts of Battle Creek 000/000 Xxxx Xxxxx
Xxxxxx Xxxxx, XX Xxxxxxxxxxx, XX 00000
WovenHearts of Penn Hills 0000 Xxxxxxxxx Xxxx
Xxxx Xxxxx, XX Xxxx Xxxxx, XX 00000
WovenHearts of Xxxxxx Creek 0000 Xxxxxx Xxxx
Xxxxxx Xxxxx, XX Xxxxxx Xxxxx, XX 00000
JOINT VENTURE FACILITIES JOINT VENTURE ADDRESS
------------------------ ------------- -------
None
ADDITIONAL FACILITIES
---------------------
None
SUBLEASED FACILITIES
--------------------
Clare Bridge of Oviedo (I)
Clare Bridge of Sun City Xxxx
Xxxxx Bridge of Xxxxxxx XX
Sterling House of Cape Coral
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* The Initial Basic Carrying Costs are allocated among the Facilities as
follows:
Facility Real Estate Insurance
Taxes Premiums
Clare Bridge of Cheswick $ 3,333.33 $ 640.00
Clare Bridge of Murrysville 2,083.33 608.25
Sterling House of Columbia 2,730.92 504.17
Sterling House of Rock Hill 2,482.67 458.33
WovenHearts of Battle Creek (I) & (II) 4,583.33 596.00
WovenHearts of Bay City (I) & (II) 2,700.00 596.00
WovenHearts of Midland (I) & (II) 2,700.00 596.00
WovenHearts of Monroe (I) & (II) 2,700.00 596.00
WovenHearts of Penn Hills 2,916.67 300.00
WovenHearts of Saginaw (I) & (II) 2,700.00 596.00
WovenHearts of Xxxxxx Creek 2,416.67 298.00
WovenHearts of West St. Xxxx (I) & (II) 2,700.00 596.00
WovenHearts of Westland (I) & (II) 4,583.33 596.00
Sterling House of SouthBend 2,979.17 650.00
WovenHearts of Xxxx Rapids (I) & (II) 6,883.33 875.00
Clare Bridge of Oviedo (I) &
WovenHearts of Oviedo (II) & (III) 11,100.00 1,483.25
Xxxxxxxx House of Portage &
Wynwood of Portage 11,083.33 1,557.58
Wynwood of Xxxxx (I) 3,333.33 949.33
Clare Bridge of Sun City West 5,600.00 708.25
Clare Bridge of Eagan 5,600.00 708.25
Sterling House of Xxxxxxx (II) 3,000.00 2,500.00
Sterling House of Maryville 2,979.17 550.00
Sterling House of Littleton 3,800.00 925.00
Sterling Cottage of Goodlettsville 2,979.17 550.00
Sterling House of Cape Coral 3,000.00 2,500.00
----------- ---------
Total $100,967.75 Total $ 20,937.41
DOING BUSINESS AS NAMES
-----------------------
Clare Bridge of Xxxxxxxx
Xxxxx Bridge of Murrysville
Sterling House of Columbia
Sterling House of Rock Hill
WovenHearts of Battle Creek
WovenHearts of Bay City
WovenHearts of Midland
WovenHearts of Monroe
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WovenHearts of Penn Hills
WovenHearts of Saginaw
WovenHearts of Xxxxxx Creek
WovenHearts of West St. Xxxx
WovenHearts of Westland
Sterling House
WovenHearts
Clare Bridge
Xxxxxxxx House
Wynwood
Sterling Cottage
