TENTH AMENDMENT TO LOAN AGREEMENT AND DOCUMENTS
THIS TENTH AMENDMENT TO LOAN AGREEMENT AND DOCUMENTS, dated as of April
26, 1999 (this "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"); and
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; and
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; and
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 $24,953,750.00, (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 $10,000,000.00,
and (y) the principal amount of the Loan and Maximum Revolving Loan Commitment
were to be decreased from $25,000,000.00 to an amount not to exceed
$10,000,000.00, (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; and
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WHEREAS, the Loan was subsequently modified and amended by Borrower's
execution and delivery to the Bank of a certain Fourth Amendment to Loan
Agreement and Documents dated November 3, 1998 to which the Bank is also a party
(the "Fourth Amendment") wherein (a) the Interim Maturity Date was extended to a
date certain which was the first to occur of (x) the earlier of November 30,
1998, or (y) the date on which Borrower closed on the Offering (as defined in
the Fourth Amendment), and (b) it was agreed that, on the Interim Maturity Date
(x) the outstanding principal balance of the Loan was to be reduced to zero
($0.00) provided that the Offering had closed, (y) the outstanding principal
balance of the Loan was to be reduced to $10,000,000.00 regardless of whether
the Offering had closed, and (z) the principal amount of the Loan and Maximum
Revolving Loan Commitment were to be decreased from $25,000,000.00 to an amount
not to exceed $10,000,000.00 regardless of whether the Offering had closed, all
of the foregoing as set forth more fully in and subject to the terms and
conditions of the Fourth Amendment; and
WHEREAS, the Loan was subsequently modified and amended by Borrower's
execution and delivery to the Bank of a certain Third Amended and Restated Note
dated December 21, 1998 (the "Third Amended and Restated Note") and a certain
Fifth Amendment to Loan Agreement and Documents of that same date to which the
Bank is also a party (the "Fifth Amendment") wherein the principal amount of the
Loan and the Maximum Revolving Loan Commitment was increased from $10,000,000.00
to $15,000,000.00, as set forth more fully in and subject to the terms and
conditions of the Fifth Amendment; and
WHEREAS, the Loan was subsequently modified and amended by Borrower's
execution and delivery to the Bank of a certain Fourth Amended and Restated Note
dated January 15, 1999 (the "Fourth Amended and Restated Note") and a certain
Sixth Amendment to Loan Agreement and Documents of that same date to which the
Bank is also a party (the "Sixth Amendment") wherein the principal amount of the
Loan and the Maximum Revolving Loan Commitment was increased from $15,000,000.00
to $25,000,000.00, as set forth more fully in and subject to the terms and
conditions of the Sixth Amendment; and
WHEREAS, the Loan was subsequently modified and amended by Borrower's
execution and delivery to the Bank of a certain Seventh Amendment to Loan
Agreement and Documents dated January 25, 1999 (the "Seventh Amendment") wherein
the Bank consented to the Borrower's execution of FBR Loan Documents (as defined
in the Seventh Amendment) to enable the Borrower to obtain the FBR Loan (as
defined in the Seventh Amendment); and
WHEREAS, the Loan was subsequently modified and amended by Borrower's
execution and delivery to the Bank of a certain Eighth Amendment to Loan
Agreement and Documents dated March 24, 1999 (the "Eighth Amendment") wherein
the Bank consented to the Borrower's request to (a) extend the latest date on
which the Bank may issue a Letter of Credit to and for the benefit of
municipalities and other governmental or quasi-governmental units or to and for
the benefit of Battery Park City Authority in connection with projects developed
by Borrower from April 1, 1999 to December 31, 1999, (b) extend the expiry date
of any existing Letters of Credit from April 1, 1999 to a date not later than
December 31, 1999, and (c) permit the expiry date of any Letters of Credit
issued subsequent to the date thereof to be a date not later than December 31,
1999, all as set forth more fully in the Eighth Amendment; and
WHEREAS, the Loan was subsequently modified and amended by Borrower's
execution and delivery to the Bank of a certain Ninth Amendment to Loan
Agreement and Documents dated April 14, 1999 (the "Ninth Amendment") wherein the
Bank consented to the Borrower's request to increase the Loan and the Maximum
Revolving Loan Commitment from Twenty Five Million Dollars ($25,000,000.00) to
Twenty Nine Million Dollars ($29,000,000.00), all as set forth more fully in the
Ninth Amendment (the Original Loan Agreement, as amended by the First Amendment,
the Second Amendment, the Third Amendment, the Fourth Amendment, the Fifth
Amendment, the Sixth Amendment, the Seventh Amendment, the Eighth Amendment, the
Ninth Amendment and this Amendment is herein referred to as the "Loan
Agreement"), and further evidenced by Borrower's execution
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and delivery to the Bank of a certain Fifth Amended and Restated Note dated
April 14, 1999 (the Fifth Amended and Restated Note"); and
WHEREAS, subject to the terms and conditions of this Amendment,
Borrower has requested the Bank to extend the Maturity Date from April 26, 1999
to May 21, 1999, 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. 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)
the Maturity Date (as defined herein), (b) a date certain which is the date on
which Borrower closes on the refinancing or restructuring of three letters of
credit currently extended by LaSalle National Bank and BankOne in the
approximate amount of $65,000,000.00 in connection with bonds issued with
respect to Real Property located in Lisle, Illinois (The Devonshire) and Des
Plaines, Illinois (The Heritage), but only if as a result thereof, Borrower or
an Affiliate or a Subsidiary receives the return of the cash collateral
currently pledged as security for said letters of credit, (c) a date certain
which is the date on which Borrower closes on the restructuring of two recent
lease transactions, but only if as a result thereof, Borrower or an Affiliate or
a Subsidiary receives the return of the cash invested in said transactions, or
(d) a date certain which is the date on which Borrower closes on any offering of
Borrower's Stock. On the Interim Maturity Date, without further notice or demand
(a) Borrower shall pay amounts necessary to reduce the outstanding principal
balance of the Loan to $15,000,000.00 or less, excluding the amount of the LC
Reserve and (b) the Maximum Revolving Loan Commitment shall be permanently
reduced to an amount not to exceed $15,000,000.00, excluding the amount of the
LC Reserve (the "Mandatory Permanent Reduction"). In addition to (but not to the
exclusion of) the circumstances comprising the Interim Maturity Date which
result in the Mandatory Permanent Reduction, the Maximum Revolving Loan
Commitment shall also be automatically and permanently reduced to an amount not
to exceed $15,000,000.00, excluding the amount of the LC Reserve, on a date and
time certain which date and time certain shall occur contemporaneous with
Borrower's repayment of the outstanding principal balance of the Loan to an
amount that is $15,000,000.00 or less at any time and for any reason whatsoever
(the "Voluntary Permanent Reduction"). Notwithstanding the foregoing, in the
event the Interim Maturity Date is the same date as the Maturity Date, and in
any event, on the Maturity Date, the outstanding principal balance of the Loan
together with any accrued but unpaid interest thereon and any other costs or
amounts owed to the Bank hereunder, excluding (for purposes of Paragraphs 2 and
3 hereof only) the aggregate amount of LC Reserves outstanding on the Maturity
Date, shall be due and paid in full on such date. On the LC Maturity Date, the
aggregate amount of Loan Advances made as a result of LC Drawings together with
any accrued but unpaid interest thereon and any other costs or amounts remaining
owed to the Bank hereunder shall be due and paid in full on such date. As of the
date of this Amendment, the provisions of this paragraph are intended to
supersede the provisions of Paragraph 2 of the Ninth Amendment.
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3. Maturity Date. The term "Maturity Date" is hereby amended and
restated to mean the first to occur of (a) May 21, 1999, or (b) the date on
which Borrower closes on the issuance and sale of $100,000,000 convertible
subordinated debt pursuant to the Indenture, Supplemental Indenture and related
instruments, drafts of which have been tendered to the Bank. On the Maturity
Date, the outstanding principal balance of the Loan together with any accrued
but unpaid interest thereon and any other costs or amounts owed to the Bank
hereunder, excluding (for purposes of Paragraphs 2 and 3 hereof only) the
aggregate amount of LC Reserves outstanding on the Maturity Date, shall be due
and paid in full.
4. FBR Loan. This Amendment is expressly conditioned upon FBR's
execution and delivery to the Bank of a Consent to this Amendment in the form
attached hereto as Exhibit A. Further, the Borrower hereby reaffirms the terms
and conditions of the Acknowledgment and Agreement attached to the Subordination
Agreement. For purposes of the Subordination Agreement, and to induce FBR to
consent to this Amendment, the Bank confirms that any Mandatory Permanent
Reduction or Voluntary Permanent Reduction as defined above shall constitute a
"Permanent Reduction" as contemplated by Section 3 of the Subordination
Agreement.
5. Payment of Fees. Borrower shall pay the reasonable legal fees of
Bank counsel in connection with the preparation of this Amendment and matters
related thereto.
6. Reaffirmation. To the extent any term(s) or condition(s) in the Loan
Agreement or any of the Documents 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 Loan
Agreement and the Documents, 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 Loan Agreement and 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. Notwithstanding the
foregoing, Borrower acknowledges and agrees that in addition to amending certain
terms and conditions of the Loan, this Amendment restates certain terms and
conditions previously set forth in the Loan Agreement. Any terms or conditions
set forth in the Loan Agreement that are not specifically amended or modified by
this Amendment, even if not specifically restated herein, shall remain binding
on the parties hereto.
7. 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.
8. 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 or the resolutions of
Borrower's Board of Directors approving this Amendment and the incumbency and
signatures of the officers of Borrower signing this Amendment.
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9. 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.
10. 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.
11. 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.
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: _________________________________
Print Name: __________________________
Title: ______________________________
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EXHIBIT A
CONSENT
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CONSENT
The undersigned, FBR ASSET INVESTMENT CORPORATION, a Virginia
corporation, hereby acknowledges and consents to the execution by Brookdale
Living Communities, Inc., a Delaware corporation, of the Tenth Amendment to Loan
Agreement and Documents dated April 26, 1999 by and between Brookdale Living
Communities, Inc. and LaSalle National Bank, a copy of which is attached hereto
as Exhibit A, (the "Tenth Amendment"), and acknowledges that the Loan, as
described in the Tenth Amendment, is part of the Senior Obligations defined and
described in the Subordination Agreement entered into as of January 25, 1999
between FBR Asset Investment Corporation and LaSalle National Bank (the
"Subordination Agreement"), and that the Subordinated Debt is and continues to
be subordinate to the Senior Obligations as set forth in the Subordination
Agreement.
Dated: April 26, 1999.
FBR ASSET INVESTMENT CORPORATION
By: _______________________________
Name: _____________________________
Title: ____________________________
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