NINTH AMENDMENT TO LOAN AGREEMENT AND DOCUMENTS
THIS NINTH AMENDMENT TO LOAN AGREEMENT AND DOCUMENTS, dated as of April
14, 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");
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;
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;
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;
- 1 -
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;
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;
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;
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 (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 and this Amendment is herein referred to
as the "Loan Agreement"); and
WHEREAS, subject to the terms and conditions of this Amendment,
Borrower has requested the Bank 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), which the Bank is willing to do subject to the
terms and conditions set forth herein.
- 2 -
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. Increased Loan Commitment; Reduction; Maturity. As of the date of
this Amendment, the Loan Agreement and the Documents are hereby amended to
increase the principal amount of the Loan and Maximum Revolving Loan Commitment
from $25,000,000.00 to an amount not to exceed $29,000,000.00 until the Interim
Maturity Date on which 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 this Paragraph 2 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 3 of the Eighth Amendment.
3. Use of Loan Proceeds. Borrower reaffirms and covenants that the Loan
has been used and that the Loan (including the $4,000,000 increase in the
principal amount of the Loan and Maximum Revolving Commitment granted pursuant
this Amendment) will continue to be used by Borrower solely for working capital
or in connection with the acquisition, leasing or development of Real Property,
including for the purpose of funding expenses relating to Borrower's Real
Property located in New York, New York (Battery Park City); Southfield,
Michigan, and Austin, Texas.
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. Contemporaneous with and as a condition to the
execution of this Amendment, Borrower shall pay the Bank a fee in the amount of
$10,000.00 (the "Fee"), which Fee is deemed fully earned by the Bank at the time
Borrower and the Bank execute this Amendment, as additional consideration for
increasing the amount of the Loan and Maximum Revolving Loan Commitment as set
forth in this Amendment. Borrower shall also pay the reasonable legal fees of
Bank counsel in connection with the preparation of this Amendment and matters
related thereto. In addition to the Fee, Borrower shall continue to be obligated
to pay the Bank the Unused
- 3 -
Commitment Fee in the amount of one-quarter of one percent (1/4%) per annum of
the average unused Maximum Revolving Loan Commitment, excluding the LC Reserve,
and as otherwise set forth in the Loan Agreement, as amended by this Amendment.
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.
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.
- 4 -
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: /s/ Xxxxx X. Xxxxx
------------------------------------
Print Name: Xxxxx X. Xxxxx
Title: Commercial Banking Officer
- 5 -
EXHIBIT A
CONSENT
CONSENT
The undersigned, FBR ASSET INVESTMENT CORPORATION, a Virginia
corporation, hereby acknowledges and consents to execution by Brookdale Living
Communities, Inc., a Delaware corporation, of (a) the Ninth Amendment to Loan
Agreement and Documents dated April 14, 1999 by and between Brookdale Living
Communities, Inc. and LaSalle National Bank, a copy of which is attached hereto
as Exhibit A, (the "Ninth Amendment"), and (b) the Fifth Amended and Restated
Note, dated April 14, 1999, made and delivered by Brookdale Living Communities,
Inc. to LaSalle National Bank, a copy of which is attached hereto as Exhibit B,
(the "Fifth Amended and Restated Note"), and acknowledges that the Loan, as
described in the Ninth Amendment and Fifth Amended and Restated Note, 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 14, 1999.
FBR ASSET INVESTMENT CORPORATION
By: _________________________________
Name: ______________________________
Title: _____________________________
