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EXHIBIT 99.5
FIRST AMENDMENT TO REVOLVING LOAN AGREEMENT
This Amendment to Revolving Loan Agreement ("Amendment") is made this
26th day of February, 1999 by and between (i) KARRINGTON OPERATING COMPANY,
INC., an Ohio corporation ("Borrower"), with an address at 000 Xxx Xxxxxxxxx
Xxxx, Xxxxxxxx, Xxxx 00000, (ii) KARRINGTON HEALTH, INC., an Ohio Corporation
("Guarantor"), with an address at 000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000,
and (iii) SUNRISE ASSISTED LIVING, INC., a Delaware corporation ("Lender"), with
an address of 0000 Xxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000.
RECITALS:
A. Lender made a revolving line of credit loan ("Loan") to Borrower in
the maximum amount of Ten Million Dollars ($10,000,000), pursuant to that
certain Revolving Loan Agreement dated November 6, 1998 by and between Borrower
and Lender (the "Loan Agreement"). The Loan is evidenced by that certain
Promissory Note dated November 6, 1998, executed by Borrower and payable to
Lender in the original principal amount of Ten Million Dollars ($10,000,000), or
so much thereof as shall have been advanced or readvanced to or for the account
of Borrower and remain unpaid pursuant to the Loan Agreement. Pursuant to that
certain First Allonge and Modification to Promissory Note ("First Allonge") made
of even date herewith by Borrower, Borrower increased the principal amount of
the Promissory Note from Ten Million Dollars ($10,000,000) to Sixteen Million
Five Hundred Thousand Dollars ($16,500,000). The Promissory Note, as amended and
modified by the First Allonge, is referred to herein as the "Note."
B. The Note is secured by, among other security, any and all mortgages,
deeds of trust, security agreements, assignments and lien instruments
(collectively, the "Security Instruments") executed by Borrower in favor of
Lender pertaining to and securing the Note, including those executed of even
date with the Note, and those executed prior to and after execution of the Note,
encumbering Borrower's interest in those certain parcels of real property
described in the Security Instruments (collectively, the "Original Collateral").
C. The Loan is further evidenced and secured by a certain Agreement of
Unconditional Guaranty dated November 6, 1998, made by Karrington Health, Inc.,
an Ohio corporation, to Lender ("Guaranty"). The Note, Security Instruments,
Guaranty, Loan Agreement and all other documents evidencing or pertaining to the
Loan are referred to herein as the "Loan Documents."
D. The Original Collateral is subject to the first priority liens of the
Security Instruments and there exist no junior or other liens affecting the
Original Collateral.
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E. Borrower is the contract purchaser under that certain Real Estate
Purchase Contract dated May 12, 1997 (the "Naperville Purchase Contract")
between the Borrower and Central DuPage Health System, an Illinois
not-for-profit corporation, as seller. Pursuant to the Naperville Purchase
Contract, as amended and extended, the Borrower is required to close on the
purchase (the "Naperville Purchase") of certain real estate located at Xxxxx
Avenue and Mill Street, Naperville, Illinois, consisting of approximately 4.14
acres, more or less, as more particularly described in Exhibit A thereto (the
"Naperville Property"), said closing to occur not later than Friday, February
26, 1999, for a total purchase price of One Million Five Hundred Thousand
Dollars ($1,500,000).
F. Borrower has applied to Lender for an increase in the Loan for general
corporate purposes and to finance the acquisition of the Naperville Property;
Lender has agreed to said increase in accordance with the terms and conditions
of this Amendment and the Note.
G. In conjunction with the Naperville Purchase, and in consideration of
the Loan increase made hereby, Borrower has agreed to grant, and Lender has
agreed to accept, a security interest in the Naperville Property as provided in
that certain Mortgage of even date herewith, by and between Borrower, as
Mortgagor, and Lender, as Mortgagee, covering and affecting the Naperville
Property.
H. All capitalized terms used but not defined herein shall have the
meaning given to such terms in the Loan Agreement.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
and covenants contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
to amend the Loan Agreement and other Loan Documents as follows:
1. Representations Accurate. Borrower represents and warrants that the
foregoing Recitals are true and accurate.
2. Principal Balance Verified. Borrower and Lender agree that as of
February 25, 1999 (that is, immediately prior to Draw #6 intended to be
disbursed on the date hereof) the total amount advanced under the Loan was Ten
Million Three Thousand Two Hundred Forty-Seven and 00/100 Dollars
($10,003,247.00). Borrower confirms its absolute and unconditional obligation to
make all payments and to perform its other obligations pursuant to the Note, the
Loan Agreement, and the other Loan Documents, all as amended hereby, including
its obligation to repay advances in excess of the stated principal amount of the
Note prior to the First Allonge.
3. Continuance of Security Interest. The repayment of the Note and
performance of all the Borrower's other obligations to the Lender under the Loan
Agreement is secured and shall continue to be secured, inter alia, by the Loan
Documents, as such documents are amended hereby.
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4. Increase in Loan. Borrower and Lender agree that the maximum amount of
the Loan shall be increased from $10,000,000 to $16,500,000. The definition of
"Loan," as set forth on page 5 of the Loan Agreement and as used throughout the
Loan Agreement shall be modified to mean "the Loan in the maximum principal
amount outstanding at any time of $16,500,000 made by Lender to Borrower
pursuant to this Agreement."
5. Commitment Fee. Borrower shall pay or cause to be paid to Lender, at
the closing of the increase in the Loan contemplated hereby, a non-refundable
commitment fee equal to the sum of One Hundred Thirty Thousand Dollars
($130,000). All other fees shall remain in effect and continue as set forth in
Paragraph 2.4 of the Loan Agreement.
6. Reaffirmation of Guaranty. Karrington Health, Inc., an Ohio
corporation ("Guarantor"), by signature below as such, for a valuable
consideration, the receipt and adequacy of which are hereby acknowledged, hereby
consents to and joins in this Amendment and hereby declares to and agrees with
the Lender that the Agreement of Unconditional Guaranty dated November 6, 1998,
made by Guarantor to Lender is and shall continue in full force and effect for
the benefit of Lender with respect to all Loan Obligations, as amended by this
Amendment; that there are no offsets, claims, counterclaims, crossclaims or
defenses of Guarantor with respect to the Guaranty nor, to Guarantor's
knowledge, with respect to the Loan Obligations; that the Guaranty is not
released, diminished or impaired in any way by this Amendment or the
transactions contemplated hereby, and that the Guaranty is hereby ratified and
confirmed in all respects. Guarantor hereby reaffirms all the representations
and warranties set forth in the Guaranty. Guarantor acknowledges that without
its consent and reaffirmation as set forth in this Amendment, Lender would not
execute this Amendment or otherwise consent to its terms.
7. Ratification. The Loan Documents are hereby modified to be consistent
with this Amendment, and in the event of any inconsistency, the provisions of
this Amendment shall prevail and control. Borrower and Guarantor hereby ratify
and confirm the Loan Documents as hereby amended and all Borrower's and
Guarantor's representations, warranties, covenants, negative covenants, duties
and liabilities thereunder, and agree that as hereby modified, the Loan
Agreement, the Note, the Security Instruments and the other Loan Documents are,
and continue to be, in full force and effect and are enforceable in accordance
with their respective terms. This Amendment is secured by the Security
Instruments and other Loan Documents, as amended hereby.
8. Continuing Obligations. Borrower and Guarantor each acknowledge and
stipulate that the Loan Agreement, the Note, the Guaranty, and all other Loan
Documents executed in connection therewith by Borrower and Guarantor, together
with any and all renewals, extensions and modifications thereof are and remain
legal, valid and binding obligations of Borrower and Guarantor and are
enforceable against Borrower and
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Guarantor in accordance with the terms thereof, except as expressly modified
herein; and that all the obligations evidenced thereby are owing and payable
without defense, offset, or counterclaim.
9. No Waiver. Execution of this Amendment by Lender shall be without
prejudice to Lender's rights at any time in the future to exercise any and all
rights conferred upon it by any of the Loan Documents in accordance with their
original terms as hereby amended. Neither this Amendment nor any provision
hereof or of any other documents modifying the Loan Documents shall constitute,
or shall be construed to constitute, a waiver of any default by Borrower or any
right or remedy of Lender under the Note, the Loan Agreement, the Guaranty or
any other Loan Documents subsequent to the date hereof. Any failure by Lender at
any point in time during the term of the Loan Agreement, as amended hereby to
insist upon strict and timely compliance with the terms and provisions of the
Loan Agreement and the other Loan Documents, as amended hereby, shall not be
deemed a waiver either expressly or impliedly by Lender of any of its rights
under any such documents, nor shall the same excuse Borrower's or Guarantor's
obligation to strictly and timely perform their obligations hereunder and
thereunder.
10. Release. Borrower, by execution of this Amendment, hereby declares
that as of the date hereof, it has no claim, set-off, counterclaim, defense, or
other cause of action against Lender including, but not limited to, a defense of
usury, any claim or cause of action at common law, in equity, statutory or
otherwise, in contract or in tort. Further, to the extent that any such set-off,
counterclaim, defense, or other cause of action may exist or might hereafter
arise based on facts known or unknown which exist as of the date hereof, such
set-off, counterclaim, defense and other cause of action is hereby expressly and
knowingly waived and released by Borrower.
11. Condition to Further Funding. Immediately after the execution and
delivery of this amendment, Lender will fund One Million Four Hundred Two
Thousand Nine Hundred Thirty-Five and 00/100 Dollars ($1,402,935.00) in order to
enable Borrower to close on the Naperville Purchase. Any further funding of the
Loan shall be expressly conditioned upon the execution of an amendment to the
merger agreement between Borrower and Lender which is acceptable to Lender.
12. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.
13. Applicable Law. The validity and effect of this Amendment shall be
governed by and construed in accordance with the laws of the Commonwealth of
Virginia.
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14. Modifications; Severability. There are and were no oral or written
representations, warranties, understandings, stipulations, agreements, or
promises made by any party, or by any agent, employee, or other representative
of any party, pertaining to the subject matter of this Amendment which have not
been incorporated into this Amendment. This Amendment shall not be modified,
changed, terminated, amended, superseded, waived, or extended except by a
written instrument executed by the parties hereto. If any term, covenant, or
condition of this Amendment is held to be invalid, illegal, or unenforceable as
to a particular person, entity, or situation, this Amendment shall be construed
and enforced without such provision, but will be otherwise enforced to the
fullest extent permitted by law as to such person, entity, or situation, and
this Amendment will also be enforced to the fullest extent permitted by law as
to any other person, entity, or situation.
15. Binding Effect. This Amendment shall be binding on and inure to the
benefit of the parties and their respective successors, and assigns.
16. Warranties and Representations of Borrower. Borrower and Guarantor
hereby warrant and represent to the Lender that:
(a) the person or persons executing this Amendment on behalf of Borrower
and Guarantor have full authority to execute this Amendment on behalf of
Borrower and Guarantor and to bind Borrower and Guarantor thereby; and
(b) the execution, delivery and performance by Borrower and Guarantor of
this Amendment, the Loan Agreement, the Note and the other Loan
Documents, as amended as of the date hereof, have been duly and validly
authorized and all consents and approvals which are necessary for
authorization, binding effect, performance, and enforceability of this
Amendment, the Loan Agreement, the Note, the Guaranty and the Loan
Documents have been received.
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IN WITNESS WHEREOF, the parties have executed this Amendment under seal
on the date first written above.
WITNESS: BORROWER:
KARRINGTON OPERATING COMPANY, INC.,
an Ohio corporation
/s/ Xxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Chief Executive Officer
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GUARANTOR:
KARRINGTON HEALTH, INC., an Ohio
corporation
/s/ Xxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Chief Executive Officer
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LENDER:
SUNRISE ASSISTED LIVING, INC., a Delaware
Corporation
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Executive Vice President
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STATE OF OHIO )
) ss:
COUNTY OF FRANKLIN)
I, Xxx x. Xxxxxxx, a notary public in and for the jurisdiction aforesaid,
do hereby certify that Xxxxxxx X. Xxxxxx, who is personally well known to me as
the Chief Executive Officer of Borrower in the foregoing Amendment to Revolving
Loan Agreement, bearing date on the 26th day of February, 1999, and hereto
annexed, personally appeared before me in said jurisdiction and as the Chief
Executive Officer of Borrower as aforesaid, and by virtue of the power vested in
him by said Karrington Operating Company, Inc., acknowledged the same to be the
act and deed of Karrington Operating Company, Inc., the Borrower herein, and
delivered the same as such.
Given under my hand and seal this 26th day of February, 1999.
/s/ Xxx X. Xxxxxxx
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Notary Public
[Notarial Seal] My commission expires: 9/29/99
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STATE OF OHIO )
) ss:
COUNTY OF FRANKLIN )
I, Xxx X. Xxxxxxx, a notary public in and for the jurisdiction aforesaid,
do hereby certify that Xxxxxxx X. Xxxxxx, who is personally well known to me as
the Chief Executive Officer of Guarantor in the foregoing Amendment to Revolving
Loan Agreement, bearing date on the 26th day of February, 1999, and hereto
annexed, personally appeared before me in said jurisdiction and as the Chief
Executive Officer of Guarantor as aforesaid, and by virtue of the power vested
in him by said Karrington Health, Inc., acknowledged the same to be the act and
deed of Karrington Health, Inc., the Guarantor herein, and delivered the same as
such.
Given under my hand and seal this 26th day of February, 1999.
/s/ Xxx X. Xxxxxxx
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Notary Public
[Notarial Seal] My commission expires: 9/29/99
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COMMONWEALTH OF VIRGINIA )
) ss:
COUNTY OF FAIRFAX )
I, Xxxxx X. Xxxxxxx, a notary public in and for the jurisdiction
aforesaid, do hereby certify that Xxxxxx X. Xxxxxx, who is personally well known
to me as the Executive Vice President of Lender in the foregoing Amendment to
Revolving Loan Agreement, bearing date on the 26th day of February, 1999, and
hereto annexed, personally appeared before me in said jurisdiction and as the
Executive Vice President of Lender as aforesaid, and by virtue of the power
vested in him by said Sunrise Assisted Living, Inc., acknowledged the same to be
the act and deed of Sunrise Assisted Living, Inc., the Lender herein, and
delivered the same as such.
Given under my hand and seal this 26th day of February, 1999.
/s/ Xxxxx X. Xxxxxxx
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Notary Public
[Notarial Seal] My commission expires: 8/31/99
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