LOAN MODIFICATION AGREEMENT
EX-10.71.21
“Emeritol
Facilities”
This LOAN
MODIFICATION AGREEMENT dated October 30, 2009, is made by and among EMERITOL
STONECREEK LODGE LLC, a Delaware limited liability company and EMERITOL
MEADOWBROOK LLC, a Delaware limited liability company (each a “Borrower”
and collectively, “Borrowers”),
KEYBANK NATIONAL ASSOCIATION, a national banking association, its successors and
assigns (“Lender”),
and EMERITUS CORPORATION, a Washington corporation (“Emeritus”
or “Guarantor”).
Recitals
A. On
or about October 17, 2008, Lender made a loan (“Loan”) to
Borrowers in the original principal amount of $9,802,500.00. The Loan is
evidenced by Borrowers’ Promissory Note (“Note”)
and is secured by (i) a Deed of Trust, Assignment of Rents, Security Agreement
and Fixture Filing (“Meadowbrook Deed
of Trust”), recorded as Instrument No. 2008-7454, records of Malheur
County, Oregon, encumbering certain real property (“Meadowbrook
Property”) located in Malheur County, Oregon and legally described on
Exhibit A to the Meadowbrook Deed of Trust; and (ii) a Mortgage, Assignment
of Rents, Security Agreement and Fixture Filing (“Stonecreek
Mortgage”), recorded October 23, 2008 in Mortgage Book 11355, Page 0506,
in the Office of the Clerk of Jefferson County, Kentucky, encumbering certain
real property (“Stonecreek
Property”) located in Jefferson County, Kentucky, and legally described
on Exhibit A to the Stonecreek Mortgage. Disbursement of the proceeds of
the Loan is governed by a Loan Agreement (“Loan
Agreement”) between Borrowers and Lender dated October 17,
2008. Payment of the Loan is unconditionally guaranteed by Guarantor
under an Unconditional Payment Guaranty (“Guaranty”)
dated October 17, 2008.
B. Borrowers
have requested that the Loan Documents be modified to allow the release of the
Meadowbrook Property. Lender is willing to do so subject to the terms
and conditions of this Agreement.
Agreement
NOW
THEREFORE, the parties agree as follows:
1.
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Definitions. Capitalized
terms used but not defined in this Agreement are defined in the Loan
Agreement.
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2.
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Release
of Meadowbrook Property. Notwithstanding the restrictions in the
Loan Agreement and the Meadowbrook Deed of Trust, Lender will cause the
Meadowbrook Deed of Trust to be released and reconveyed from the
Meadowbrook Property, provided that all the following conditions are
satisfied:
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2.1
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Borrower
has provided evidence satisfactory to Lender that the Stonecreek Property
has been approved by Xxxxxxx Mac for permanent
financing.
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1
2.2
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Lender
has been paid the “Release
Price” for the Meadowbrook Property. The Release Price
for the Meadowbrook Property is
$2,595,000.
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2.3
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There
is then no Event of Default, nor any event or condition which would be an
Event of Default if not cured within the time
allowed.
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2.4
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Borrower
has provided to Lender, at Borrower’s expense, an endorsement to Lender’s
policy of title insurance for the Stonecreek Property, insuring the
continued priority of the lien of the Stonecreek Mortgage against the
Stonecreek Property. There shall be no exceptions to title
other than those previously approved by
Lender.
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2.5
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Borrower
has paid all costs and expenses (including all attorney, trustee, title
and recording fees) incurred by Lender in connection with Borrower’s
request for a release of the Meadowbrook Property. Borrower
covenants to pay all such costs and expenses even if the release is not
given because the conditions have not been
met.
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2.6
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Emeritol
Stonecreek Lodge LLC has executed and delivered to Lender an Amended and
Restated Promissory Note in the form attached as Exhibit 1
hereto.
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3.
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Loan
Modifications. The following modifications to the Loan
Documents shall become effective upon the date that the Meadowbrook Deed
of Trust has been released.
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3.1
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Definitions. The
definitions of the following terms in the Loan Documents are revised to
mean the following:
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Borrower: Emeritol
Stonecreek Lodge LLC, a Delaware limited liability company.
Debt
Service: (a) For each quarterly period (based on calendar
quarters) commencing October 1, 2008, and continuing through September 30, 2010,
interest-only payments on the Loan (assuming that the Loan was outstanding
commencing October 1, 2008) during such period at the greater of the Applicable
Rate or 6.85% per annum, and (b) for each calendar quarter thereafter, the total
payments of principal and interest which would be required during such period in
order to fully amortize the stated principal amount of the Loan ($7,207,500.00)
over a 25 year amortization period at an interest rate equal to the greater of
the Applicable Rate or 6.85% per annum.
Debt
Service Coverage: For each calendar quarter commencing with
the calendar quarter ending December 31, 2008, the ratio of the aggregate Net
Operating Income of the Stonecreek Lodge Facility during such period, to the
Debt Service during such period.
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Facilities: All
references to the Facilities shall be deemed to refer to the Stonecreek Lodge
Facility located at 0000 Xxxxxxxxxxx Xx, Xxxxxxxxxx,
XX 00000.
Loan
Amount: Seven Million, Two Hundred Seven Thousand, Five
Hundred and No/100 Dollars ($7,207,500.00), as reduced by principal payments
made from time to time.
Note: The
Amended and Restated Promissory Note in the Loan Amount, executed by Borrower
and payable to the order of Lender, evidencing the Loan.
3.2
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Compliance
Certificate. The form of Compliance Certificate attached as Exhibit B to
the Loan Agreement is hereby replaced with the Compliance Certificate
attached as Exhibit B
hereto:
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4.
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Conditions. This
Agreement shall be effective only upon satisfaction of the conditions set
forth below:
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4.1
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Borrower
has paid Lender all costs, fees and expenses relating to the execution and
performance of this Agreement, including all legal fees, title insurance
premiums, and other out-of-pocket expenses of
Lender.
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4.2
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Lender
has received certified copies of such duly adopted resolutions as Lender
may require, authorizing Borrower’s and Guarantor’s execution of this
Agreement and naming the persons authorized to execute this Agreement on
their behalf.
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5.
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Guaranty. Guarantor
consents and agrees to this Agreement and ratifies and reaffirms the
obligations of such Guarantor under the respective Guaranty of the Loan as
modified by this Agreement.
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6.
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Representations. Borrower
and Guarantor represent to Lender as
follows:
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6.1
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Neither
Borrower nor Guarantor has any claim, defense, counterclaims or right of
offset against Lender or its agents arising out of or in any way connected
with the Loan.
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6.2
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Borrower
and Guarantor have full right, power and authority to enter into this
Agreement and perform their obligations hereunder, and no information or
material submitted to Lender in connection with this Agreement contains
any material misstatement or misrepresentation nor omits to state any
material fact or circumstance.
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6.3
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There
is no Event of Default by Borrower under any of the Loan Documents, nor,
to Borrower’s knowledge, any event, circumstance or condition which with
notice or the passage of time or both would be an Event of
Default.
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3
6.4
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Except
as disclosed to Lender in writing, all representations made by Borrower
and Guarantor to Lender in the
Loan Documents are true and
correct.
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7.
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Ratification. Each and
every representation and warranty made by Borrower in the Loan Documents
and the Environmental Indemnities are hereby renewed and each and every
provision of the Loan Documents, as amended by this Agreement, is hereby
affirmed and ratified. This Agreement is not intended and shall
not be construed to impair the validity, priority or enforceability of the
Mortgages or the other Loan Documents. As further consideration
for Lender’s execution of this Agreement, Borrower and Guarantor hereby release and
discharge Lender from any and all claims, defenses, actions, counterclaims
or rights of offset in connection with the Loan and arising out of any act
or circumstance prior to the date
hereof.
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8.
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General.
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8.1
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This
Agreement and the documents and instruments to be executed hereunder
constitute the entire agreement among the parties with respect to the
subject matter hereof and shall not be amended, modified or terminated
except by a writing signed by the party to be charged
therewith.
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8.2
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Borrower
and Guarantor agree to execute
such other instruments and documents and provide Lender with such further
assurances as Lender may reasonably request to more fully carry out the
intent of this Agreement.
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8.3
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This
Agreement may be executed in a number of identical
counterparts. If so, each such counterpart shall collectively
constitute one agreement.
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8.4
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No
provision of this Agreement is intended or shall be construed to be for
the benefit of any third party.
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8.5
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The
Loan Documents are hereby modified to include this Agreement within the
definition of the term “Loan
Documents” as used therein.
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ORAL
AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
LAW.
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IN
WITNESS WHEREOF, the parties execute this Agreement as of the day and year first
above written.
“Borrowers”
EMERITOL
STONECREEK LODGE LLC,
a Delaware
limited liability company
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By:
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Summerville
Senior Living, Inc., a Delaware corporation, its Sole
Member
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By:
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/s/
Xxxx Xxxxxxxxxx _
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Xxxx
Xxxxxxxxxx, Senior VP Corporate
Development
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EMERITOL
MEADOWBROOK LLC,
a
Delaware limited liability company
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By:
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Summerville
Senior Living, Inc., a Delaware corporation, its Sole
Member
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By:
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/s/
Xxxx Xxxxxxxxxx ___
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Xxxx
Xxxxxxxxxx, Senior VP Corporate
Development
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“Lender”
KEYBANK
NATIONAL ASSOCIATION, a national banking association
By: /s/
Xxxxxxx Xxxxx ____
Name: Xxxxxxx
Xxxxx _________________
Title: AVP
Closing Officer ___________________
“Guarantor”
EMERITUS
CORPORATION, a Washington corporation
By: /s/
Xxxx Xxxxxxxxxx ____________
Name: Xxxx
Xxxxxxxxxx
Title: Senior
VP Corporate Development
5
EXHIBIT
B
to
Loan
Agreement
Certificate
of Compliance
KeyBank
National Association
KeyBank
Real Estate Capital
Healthcare
Finance
0000 0xx
Xxx, 00xx Xxxxx
Xxxxxxx,
XX 00000
Attn:
____________________
Re:
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Loan
Agreement dated as of October 17, 2008 (as amended, modified,
supplemented, restated, or renewed, from time to time, the “Agreement”),
between EMERITOL STONECREEK LODGE LLC, a Delaware limited liability
company, (“Borrower”),
and KEYBANK NATIONAL ASSOCIATION (“Lender”).
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Reference
is made to the Agreement. Capitalized terms used in this Certificate
(including schedules and other attachments hereto, this “Certificate”)
without definition have the meanings specified in the Agreement.
Pursuant
to applicable provisions of the Agreement, Borrower and Emeritus Corporation
hereby certifies to Lender that all information furnished in this Certificate
and in the attachments hereto and in the financial statements (such statements
the “Financial
Statements” and each periods covered thereby the “reporting
period”) submitted herewith is true, correct and complete in all material
respects.
Emeritus
Corporation further certifies to Lender that:
1. Compliance with Financial
Covenants.
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A.
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Covenant: Minimum
Facility Occupancy. As of the end of each calendar
quarter commencing with the calendar quarter ending December 31, 2008, the
Occupancy of the Facility shall no time be less than 90% of the Occupancy
for the Facility as of September 30,
2008.
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Facility
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Occupancy
as of 9/30/08
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Occupancy
at end of reporting period
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Compliance?
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Stonecreek
Lodge
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_______%
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________%
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________
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See attached rent rolls and
operating statements for calendar quarter ending _______________,
20__
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B.
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Covenant: Minimum
Debt Service Coverage. For each calendar
quarter commencing with the calendar quarter ending December 31, 2008,
the
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Debt
Service Coverage shall be no less than the required Debt Service Coverage set
out below:
Quarter End
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Required Debt Service
Coverage
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12/31/2008
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1.00
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3/31/2009
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1.00
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6/30/2009
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1.00
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9/30/2009
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1.00
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12/31/2009
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1.10
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3/31/2010
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1.10
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6/30/2010
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1.10
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9/30/2010
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1.10
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12/31/2010
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1.10
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3/31/2011
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1.15
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6/30/2011
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1.20
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9/30/2011
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1.25
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Quarter
Ending ________________, 20___
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Required
Debt Service
Coverage: 1.___
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Actual
Debt Service
Coverage: 1.___
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Compliance?
(Yes or
No) ____________________
See attached Financial
Statements
2. Compliance with Emeritus
Covenants.
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A.
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Covenant: Minimum
Liquid Assets. Emeritus
shall maintain minimum Liquid Assets of Twenty Million Dollars
($20,000,000.00)
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Emeritus
Liquid
Assets: $_________ as
of period ending ___________
See attached Financial
Statements
Compliance?
(Yes or
No) ____________________
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B.
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Covenant: Minimum
Fixed Charge Coverage. Emeritus agrees to
maintain a minimum Fixed Charge Coverage Ratio of 1.10 to 1.00 (measured
at the end of each calendar quarter beginning with the calendar quarter
ending December 31, 2008, and building to the previous four calendar
quarters).
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Quarter
Ending ________________, 20___
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EBITAR1 ($______________________) divided
by Fixed Charges2 ($____________________)
= Fixed Charge Coverage Ratio of ____________ .
See
calculations of EBITAR and Fixed Charges attached to this
Certificate
Compliance: __________
yes _________________ no
See attached Financial
Statements
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C.
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Covenant: Emeritus
agrees to permit no Change of Control without the prior written consent of
Lender.
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Compliance?
(Yes or
No) ____________________
More Restrictive Financial
Covenants
If
Emeritus has entered into an agreement with any other entity providing financing
to Emeritus or to any Affiliate of Emeritus to comply with any more restrictive
covenants than the Emeritus Covenants set out above, those more restrictive
covenants and Emeritus’ compliance or non-compliance therewith are described on
Schedule B to this Certificate. If Schedule B indicates “none,” this
Certificate shall constitute Emeritus’ representation to Lender that no such
more restrictive covenants have been agreed to.
3. Review of
Condition. Emeritus has reviewed the terms of the Agreement,
including, but not limited to, the representations, warranties and covenants of
Borrower set forth in the Agreement and has made a review in reasonable detail
of the transactions and condition of Borrower and Emeritus through the reporting
periods.
4. Representations and
Warranties. To the actual knowledge of Emeritus, the representations and
warranties of Borrower and Emeritus contained in the Loan Documents, including
those contained in the Agreement, are true and accurate in all material respects
as of the date hereof and were true and accurate in all material respects at all
times during the reporting period except as expressly noted on Schedule A
hereto.
5. Covenants. To
the actual knowledge of Emeritus, during the reporting period, Borrower and
Emeritus observed and performed all of their respective covenants and other
agreements under the Agreement and the Loan Documents in all material respects,
except as expressly noted on Schedule A hereto.
1 Net
income computed in accordance with generally accepted accounting principles,
plus facility
lease expense, income taxes, interest expense depreciation, amortization, asset
impairment and other non-cash charges and plus or minus, as applicable,
non-recurring and/or extraordinary items.
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6. No Event of
Default. To the actual knowledge of Emeritus, no Default or
Event of Default exists as of the date hereof or existed at any time during the
reporting period, except as expressly noted on Schedule A hereto.
IN
WITNESS WHEREOF, this Certificate is executed by this ____ day of __________,
20__.
EMERITUS
CORPORATION, a Washington corporation
By: _________________________________
Name: _________________________________
Title: _________________________________
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Exhibit
1
Amended
and Restated Promissory Note
10