EXHIBIT 10.32.3
SECOND AMENDMENT TO LOAN AGREEMENT AND LOAN DOCUMENTS
THIS SECOND AMENDMENT TO LOAN AGREEMENT AND LOAN DOCUMENTS (this
"AMENDMENT"), dated as of March 24, 2005 (the "EFFECTIVE DATE"), is entered into
by and between BROOKDALE LIVING COMMUNITIES, INC., a Delaware corporation (the
"BORROWER"), and LASALLE BANK NATIONAL ASSOCIATION, a national banking
association (the "BANK").
WITNESSETH
WHEREAS, Borrower has previously executed and delivered to the Bank a
certain Revolving Note dated as of dated as of October 19, 2004 in the original
principal amount of up to $10,000,000.00 (the "REVOLVING NOTE") evidencing
certain Revolving Loans set forth more fully in and governed by a certain Loan
Agreement dated as of October 19, 2004 between Borrower and the Bank, as amended
by a First Amendment Loan Agreement dated as of March 1, 2005 (collectively and
as amended, the "LOAN AGREEMENT"); and
WHEREAS, Borrower has requested that the Bank make an additional loan
(the "TERM LOAN") to Borrower as further defined and described herein; and
WHEREAS, the Borrower has requested that the Bank extend the expiration
date for certain General Letters of Credit and certain Lifecare Letters of
Credit issued by the Bank for the account of Borrower as set forth in the Loan
Agreement; and
WHEREAS, Bank and Borrower agree to amend the terms of the Loan
Agreement for the purpose of adding the Term Loan as provided in and subject to
this Amendment;
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 ascribed in the Loan Agreement and the Loan Documents referred to
therein.
2. AMENDMENT TO DEFINITIONS. The following definitions (a) contained in
Section 1.01 of the Loan Agreement are hereby amended and restated in their
entirety as follows, or (b) in the case of new terms, added to in Section 1.01
of the Loan Agreement:
"NOTE" shall mean each, either and both of, separately and
collectively, the Revolving Note in form attached hereto as EXHIBIT A and
further described in Section 2.01 (E) hereof, and/or the Term Note in form
attached hereto as EXHIBIT B and further described in Section 2.15 hereof,
including any note issued as a renewal, amendment, restatemenent or replacement
thereof.
"OBLIGATIONS" shall mean all of Borrower's liabilities, obligations and
indebtedness to the Bank of any and every kind and nature, including the
Revolving Credit Loans, Term Loan, Letters of Credit, Purchasing Card Program,
Interest Rate Agreements, Borrower's other liabilities and obligations to the
Bank under this Agreement, and Borrower's liabilities and obligations to the
Bank under any other agreement, document or instrument (including , without
limitation, any Interest Rate Agreements and any guaranty to the Bank of another
Person's Obligations), whether heretofore, now or hereafter owing, arising, due
or payable by or from such Person to the Bank, howsoever evidenced, created,
incurred, acquired or owing, and whether joint, several, primary, secondary,
direct, contingent, fixed or otherwise.
"REVOLVING LOAN MATURITY DATE" means May 31, 2006 with respect to the
balance of all Revolving Loans outstanding on that date.
"TERM INTEREST RATE" shall mean the Prime Rate plus 1.0 % per annum.
"TERM LOAN" shall mean the Term Loan made by the Bank to the Borrower
under and pursuant to this Agreement, as set forth in Section 2.15 of this
Agreement.
"TERM LOAN COMMITMENT" shall mean Ten Million and 00/100 Dollars
($10,000,000.00).
"TERM LOAN MATURITY DATE" means March 31, 2007.
"TERM NOTE" shall have the meaning set forth in Section 2.15 hereof.
3. SECTION 2.01 (E) AMENDED. Section 2.01 (E) of the Loan Agreement is
amended and restated in its entirety as follows:
"(E) The Revolving Loans and the General Letter of Credit
Obligations shall be evidenced by a single Revolving Note (together
with any and all renewal, extension, modification or replacement notes
executed by the Borrower and delivered to the Bank and given in
substitution therefor, the "REVOLVING NOTE") in the form of Exhibit "A"
attached hereto, duly executed by the Borrower and payable to the order
of the Bank. At the time of the initial disbursement of a Revolving
Loan and at each time an additional Revolving Loan shall be requested
hereunder or a repayment made in whole or in part thereon, an
appropriate notation thereof shall be made on the books and records of
the Bank. All amounts recorded shall be, absent demonstrable error,
conclusive and binding evidence of (i) the principal amount of the
Revolving Loans advanced hereunder and the amount of all General Letter
of Credit Obligations, (ii) any unpaid interest owing on the Revolving
Loans, and (iii) all amounts repaid on the Revolving Loans or the
General Letter of Credit Obligations. The failure to record any such
amount or any error in recording such amounts shall not, however, limit
or otherwise affect the obligations of the Borrower under the Revolving
Note to repay the principal amount of the Revolving Loans, together
with all interest accruing thereon."
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4. AMENDMENT TO SECTION 2.02. Section 2.02 of the Loan Agreement is
amended and restated in its entirety as follows:
"2.02 General Letters of Credit. Subject to the terms and
conditions of this Agreement and upon the execution by the Borrower and
the Bank of a Master Letter of Credit Agreement dated October 19, 2004
(as amended from time to time, the "Master Letter of Credit Agreement")
and, the upon the execution and delivery by the Borrower, and the
acceptance by the Bank, in its sole and absolute discretion, of, in
each case, an application for letter of credit, the Bank agrees to
issue or reissue for the account of the Borrower out of the Revolving
Loan Availability, such General Letters of Credit in the standard form
of the Bank and otherwise in form and substance acceptable to the Bank,
from time to time during the term of this Agreement, provided that the
General Letter of Credit Obligations may not at any time exceed in the
aggregate the Maximum General Letter of Credit Obligation and provided,
further, that no General Letter of Credit shall have an expiration date
later than May 31, 2006, unless otherwise authorized by the Bank in
writing. The Bank has issued certain letters of credit (the
"Outstanding Old Brookdale General Letter of Credit") under the Old
Brookdale Loan Agreement and a certain Master Letter of Credit
Agreement dated March 31, 2004 (the "Old Brookdale MLCA") for the
account of Old Brookdale, identified in Schedule 2.02 hereto, which
Outstanding Old Brookdale General Letters of Credit are deemed General
Letters of Credit issued out of the Revolving Loan Availability under
this Agreement, and are otherwise deemed General Letters of Credit
subject to and governed by the terms and conditions of this Agreement
and the Master Letter of Credit Agreement. The amount of any payments
made by the Bank with respect to draws made by a beneficiary under a
General Letter of Credit shall be deemed to have been converted to a
Revolving Loan as of the date such payment was made by the Bank to such
beneficiary. Upon the occurrence of an Event of a Default and at the
option of the Bank, all General Letter of Credit Obligations shall be
converted to Revolving Loans, all without demand, presentment, protest
or notice of any kind, all of which are hereby waived by the Borrower."
5. AMENDMENT TO SECTION 2.03 AND SCHEDULE 2.03. Section 2.03 of the
Loan Agreement is amended and restated in its entirety as follows:
"2.03 Lifecare Letters of Credit. In addition to General
Letters of Credit, the Bank hereby makes a credit facility available to
Borrower for the purpose of issuing standby letters of credit to the
Illinois Department of Public Health and to other state agencies
required in order to operate Borrower's Lifecare facilities
(separately, a "Lifecare Letter of Credit" and, if more than one, the
"Lifecare Letters of Credit"); provided, however, the maximum aggregate
stated amount of any and all Lifecare Letters of Credit shall not
exceed Eight Million Six Hundred Thousand and 00/100 Dollars
($8,600,000.00) [the "Lifecare Letters of Credit Cap"]. Lifecare
Letters of Credit may be issued, cancelled and reissued form time to
time up to the Lifecare Letters of Credit Cap and, except for the
provisions of this Section 2.03, shall be issued under, governed by and
subject to the terms of the Master Letter of Credit Agreement. The Bank
has issued certain stand by letters of credit (the "Old Brookdale IDPH
Letters of Credit") set forth in Section 2.03 for the account of Old
Brookdale to the to the Illinois Department of Public
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Health in the aggregate stated amount of Six Million Six Hundred Forty
Thousand and 00/100 Dollars ($6,640,000.00), the reimbursement
obligations for which have been assumed by Borrower. The Old Brookdale
Letters of Credit constitute and are deemed Lifecare Letters of Credit
issued under this Agreement and the Master Letter of Credit Agreement
and are included under the Lifecare Letters of Credit Cap. The Lifecare
Letters of Credit are not a part of nor shall any draws thereunder be
credited against the Revolving Loan Availability. The Lifecare Letters
of Credit set forth in Section 2.03 have an initial expiration date of
May 31, 2005, which the Bank has agreed, upon expiration, to renew and
reissue with an expiration date of May 31, 2006. No Lifecare Letter of
Credit shall have an expiration date later than May 31, 2006, unless
otherwise authorized by the Bank in writing."
Schedule 2.03 is hereby amended to provide that the Existing
Expiration Date is May 31, 2005 and the Authorized Expiration Date May
31, 2006.
5. AMENDMENTS TO LOAN AGREEMENT. A new Section 2.12 is added to the
Loan Agreement, as follows:
2.12 Term Loan.
(a) Term Loan Commitment. Subject to the terms and conditions
of this Agreement and the other Loan Documents, and in reliance upon
the representations and warranties of the Borrower set forth herein and
in the other Loan Documents, the Bank agrees to make a Term Loan equal
to the Term Loan Commitment. The Term Loan shall be available to the
Borrower in a single principal advance. The Term Loan shall be used by
the Borrower to refinance certain obligations of the Borrower to the
Bank under certain Interest Rate Agreements that are being restructured
concurrently herewith. The Term Loan may be prepaid in whole or in part
at any time without penalty, but shall be due in full on the Term Loan
Maturity Date, unless the credit extended under the Term Loan is
otherwise terminated or extended as provided in this Agreement.
(b) Term Loan Interest and Payments. Except as otherwise
provided in this Section 2.12, the principal amount of the Term Loan
outstanding from time to time shall bear interest at the Term Interest
Rate. Accrued and unpaid interest on the unpaid principal balance of
the Term Loan outstanding from time to time shall be due and payable
monthly, in arrears, commencing on May 1, 2005 and continuing on the
first day of each calendar month thereafter, and on the Term Loan
Maturity Date. Any amount of principal or interest on the Term Loan
which is not paid when due, whether at stated maturity, by acceleration
or otherwise, shall bear interest payable on demand at the Default
Rate.
(c) Term Loan Principal Payments. The outstanding principal
balance of the Term Loan shall be repaid in consecutive quarterly
principal installments of Five Hundred Thousand and 00/100 Dollars
($500,000.00) each, together with an additional amount representing
accrued interest as set forth above, beginning on July 1, 2005, and
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continuing on the first day of each and every October, January, April
and July thereafter, with a final payment of all outstanding principal
and accrued interest due on the Term Loan Maturity Date. Principal
amounts repaid on the Term Note may not be borrowed again.
(d) Term Note. The Term Loan shall be evidenced by a single
Term Note (together with any and all renewal, extension, modification
or replacement notes executed by the Borrower and given in substitution
therefor, the "TERM NOTE") in the form of Exhibit "B" attached hereto,
duly executed by the Borrower and payable to the order of the Bank. At
the time of the disbursement of the Term Loan or a repayment made in
whole or in part thereon, an appropriate notation thereof shall be made
on the books and records of the Bank. All amounts recorded shall be,
absent demonstrable error, conclusive and binding evidence of (i) the
principal amount of the Term Loan advanced hereunder, (ii) any unpaid
interest owing on the Term Loan and (iii) all amounts repaid on the
Term Loan. The failure to record any such amount or any error in
recording such amounts shall not, however, limit or otherwise affect
the obligations of the Borrower under the Term Note to repay the
principal amount of the Term Loan, together with all interest accruing
thereon.
(e) The Bank may, at its sole option, accelerate the Term
Loan, and declare the Term Loan to be immediately due and payable, in
the event of (1) any sale or issuance by the Borrower of any equity
interest, any security convertible into an equity interest or any
subordinated debt, any merger of the Borrower with or into any other
entity, any sale or exchange by the Borrower of any assets other than
in the ordinary course of business or any contribution by Borrower to
any direct or indirect subsidiary of any assets, or (2) any sale or
issuance by any Significant Subsidiary of any equity interest, any
security convertible into an equity interest or any subordinated debt,
any merger of any Significant Subsidiary with or into any other entity,
any sale or exchange by any Significant Subsidiary of any assets other
than in the ordinary course of business or any contribution by any
Significant Subsidiary of assets to any direct or indirect subsidiary
of Borrower; provided, however, that a transaction in which there are
no parties other than the Borrower and one or more entities which are,
immediately prior to the event, Significant Subsidiaries shall not be
subject to this provision. Borrower agrees to provide to the Bank at
least thirty (30) day's prior written notice of any event described in
the preceding sentence, which notice shall include all relevant
details. The term "Significant Subsidiary" means any direct or indirect
subsidiary of Borrower or any direct or indirect subsidiary of any
subsidiary of Borrower which (i) owns any assets which are included in
the collateral for the Term Loan or (ii) owns 5% or more of either the
total assets or net assets of the Borrower, on a consolidated basis.
6. CONDITIONS PRECEDENT. The obligation of the Bank to make the Loan is
subject to the following conditions precedent:
A. CONDITIONS PRECEDENT TO THIS AMENDMENT. The Borrower shall
have delivered or caused to be delivered to the Bank on or before the effective
date of this Agreement, the following:
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(i) this Amendment, duly executed by the Borrower;
(ii) the Term Note
(iii) a certificate of the secretary or an assistant
secretary of the Borrower, dated the date of the
Closing, as to incumbency, and resolutions of the
Board of Directors of Borrower approving the
transaction contemplated hereby;
(iv) a certificate, dated as of the most recent date
practicable, of the Secretary of State of Delaware
and the Secretary of State of Illinois as to the good
standing of the Borrower;
(v) such other documents, certificates or evidence as the
Bank may reasonably request to consummate the
transactions contemplated hereby. The representations
and warranties set forth in the Loan Agreement are
true and correct in all material respects as of the
date hereof.
B. No Event of Default has occurred and is continuing, and no
event has occurred and be continuing that, with the giving of notice or passage
of time or both, would be an Event of Default.
C. No material adverse change has occurred in the financial
condition of the Borrower since the delivery of the last Financial Statement to
Bank.
D. The Borrower has paid to the Bank a loan fee in the amount
of $25,000.00.
7. EFFECTIVE DATE. This Amendment and the modification of the Loan
Agreement and Loan Documents provided by this Amendment shall be effective as of
the Effective Date.
8. REAFFIRMATION. To the extent any term(s) or condition(s) in any of
the Loan 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 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 representation, warranty, covenant, term and
condition set forth in the Loan Documents as amended herein. There are no other
changes to the Loan Documents except for the changes specifically set forth
herein.
9. 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
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or other action necessary to authorize the execution, delivery and performance
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 Borrower's Board of Directors approving
this Amendment and the incumbency and signatures of the officers of Borrower
signing this Amendment.
10. 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.
11. 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.
12. BINDING EFFECT. This Amendment shall be binding upon and inure to
the benefit of and be enforceable by 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/ R. Xxxxxxx Xxxxx
---------------------------------
Print Name: R. Xxxxxxx Xxxxx
Title: Executive Vice President and
Chief Financial Officer
BANK:
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Print Name: Xxxxx Xxxxxx
-----------------------------
Title: VP
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EXHIBIT B TO LOAN AGREEMENT
TERM NOTE
See attached.
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