FIRST AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
AND WAIVER
FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
AND WAIVER , dated as of June 1, 2009 (this “
Amendment ”), to the SECOND AMENDED AND RESTATED
CREDIT AGREEMENT, dated as of February 27, 2009 (the “
Existing Credit Agreement ”), among BROOKDALE SENIOR
LIVING INC., a Delaware corporation (the “ Borrower
”), the guarantors party thereto from time to time (the
“ Guarantors ”), the several banks and other
financial institutions or entities parties to the Existing Credit
Agreement (the “ Lenders ”), and BANK OF
AMERICA, N.A., as administrative agent for the Lenders (in such
capacity, the “ Administrative Agent ”) and L/C
Issuer.
WHEREAS,
the Borrower has informed the Administrative Agent and the Lenders
that it intends to issue common stock (the “ June Equity
Offering ”) on or around June 10, 2009 and apply the
proceeds thereof (or the portion thereof required to repay the
outstanding amount of the Loans in full) to the reduction of the
outstanding Obligations, as required by the Existing Credit
Agreement;
WHEREAS,
in anticipation of the June Equity Offering, the Borrower has
requested that the Lenders amend the Existing Credit Agreement as
set forth herein;
WHEREAS,
the Borrower has informed the Administrative Agent and the Lenders
that a collective bargaining agreement (the “ Collective
Bargaining Agreement ”) covering five employees of the
Loan Parties existed as of the Closing Date and, therefore, the
Borrower’s representation in Section 6.21 of the Credit
Agreement was inaccurate when made;
WHEREAS,
the Borrower has requested that the Lenders waive any Event of
Default arising as a result of the Borrower’s failure to
disclose the Collective Bargaining Agreement and the making of the
representation in Section 6.21 (the “ Collective
Bargaining Default ”);
WHEREAS,
the Lenders have agreed to amend the Existing Credit Agreement
solely upon the terms and conditions set forth herein;
NOW,
THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as
follows:
1.
Defined Terms . Unless otherwise noted herein, terms defined
in the Existing Credit Agreement and used herein shall have the
meanings given to them in the Existing Credit Agreement. The term
“Amended Credit Agreement” means the Existing Credit
Agreement, as amended hereby.
2.
Amendments to Credit Agreement . The Existing Credit
Agreement is hereby amended as follows:
(A) Amendments
to Section 1.01 . Section 1.01 of the Existing Credit
Agreement is hereby amended as follows:
(i) Change of
Control . The definition of “Change of Control” is
hereby deleted in its entirety and replaced with the
following:
“
Change of Control ” means the occurrence of either of
the following events: (a) any “person” or
“group” (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), excluding (i) any employee
benefit plan of such person or its subsidiaries, and any person or
entity acting in its capacity as trustee, agent or other fiduciary
or administrator of any such plan or (ii) the Permitted Investors)
becomes the “beneficial owner” (as defined in Rules 13d
3 and 13d 5 under the Securities Exchange Act of 1934), directly or
indirectly, of 35% or more of the combined voting power of all
Voting Stock of the Borrower on a fully diluted basis or
(b) the board of directors of the Borrower shall cease to
consist of a majority of Continuing Directors.
(ii) The
definition of “Continuing Directors” is hereby deleted
in its entirety and replaced with the following:
“
Continuing Directors ” means, the directors of the
Borrower on the Closing Date, and each other director of the
Borrower, if, in each case, such other director’s nomination
for election to the board of directors of the Borrower is
recommended by at least a majority of the then Continuing
Directors.
(iii) The
definition of “Permitted Acquisition” is hereby amended
as follows:
(a) Clause
(f) is hereby deleted in its entirety and replaced with the
following:
(f) the
aggregate amount of cash consideration with respect to all such
Acquisitions (including the amount of any assumed Indebtedness,
deferred purchase price and any earn-out payments) in the
aggregate, during the term of this Agreement shall not exceed
$100,000,000; and
(b) A new clause
(g) is hereby added which shall read as follows:
(g) after
giving effect to such Acquisition, (I) if the aggregate amount
of cash consideration with respect to all such Acquisitions
(including the amount of any assumed Indebtedness, deferred
purchase price and any earn-out payments), including the amount of
cash consideration paid in connection with such Acquisition, is
less than $50,000,000, then there shall be at least $20,000,000 of
borrowing availability and (II) if the aggregate amount of
cash consideration with respect to all such Acquisitions (including
the amount of any assumed Indebtedness, deferred purchase price and
any earn-out payments), including the amount of cash consideration
paid in connection with such Acquisition, is $50,000,000 or more,
then there shall be at least $40,000,000 of borrowing
availability.
(B) Amendments
to Section 2.05 . Section 2.05 of the Existing Credit
Agreement is hereby amended as follows:
(i)
Sections 2.05(b)(ii), (iii), (iv) and (v) are hereby
deleted in their entirety and replaced with the
following:
(ii)
Section 2.05(b)(vi)(B) is hereby deleted in its entirety and
replaced with the following:
(C) Amendment
to Section 2.06(b) . Section 2.06(b) of the Existing
Credit Agreement is hereby deleted in its entirety and replaced
with the following:
(D) Amendment
to Section 6.21 . Section 6.21 of the Existing Credit
Agreement is hereby deleted in its entirety and replaced with the
following:
There are no
collective bargaining agreements or Multiemployer Plans covering
the employees of any Loan Party or any Subsidiary as of the Closing
Date, other than a collective bargaining agreement with the Service
Employees International Union, Local No. 1, which covered five
(5) janitorial service technicians at a single community.
Pursuant to such agreement, the Borrower’s Subsidiary made
contributions on behalf of such service technicians to union
pension and welfare funds. Said agreement expired in
November 2008. However, pursuant to applicable law, the
Borrower’s Subsidiary continues to honor the terms of the
agreement and to make contributions to those funds. No Loan Party
or Subsidiary has suffered any strikes, walkouts, work stoppages or
other material labor difficulty in the five years preceding the
Closing Date.
(E) Amendment
to Section 7.03 . Section 7.03 of the Existing Credit
Agreement is hereby amended by deleting clause (e) in its
entirety and replacing it with the following:
(F) Amendment
to Section 7.14 . Section 7.14(c) of the Existing
Credit Agreement is hereby amended by deleting clause (iv) in
its entirety and replacing it with the following:
(iv) simultaneously with any such release, the Borrower
shall have prepaid the Loans (to be applied first ratably to
the L/C Borrowings, second , to the outstanding Revolving
Loans, and, third , to Cash Collateralize the remaining L/C
Obligations (with a corresponding reduction in the Aggregate
Revolving Commitments)) in an amount equal to the greater of
(A) 100% of the Net Cash Proceeds received by such Loan Party
(to the extent such release is in connection with a Disposition of
such Mortgaged Property or a Debt Issuance with respect to such
Mortgaged Property) and (B) 95% of the Allocated Amount of
such Mortgaged Property.
(G) Amendment
to Section 8.01 . Section 8.01 of the Existing Credit
Agreement is hereby amended by deleting clause (s) in its
entirety and replacing it with the following:
(s) Liens
on cash and Cash Equivalents pledged by the Borrower and its
Subsidiaries to secure Indebtedness permitted by
Section 8.03(f) in an amount not to exceed $35,000,000
at any time outstanding;
(H) Amendment
to Section 8.03 . Section 8.03 of the Existing Credit
Agreement is hereby amended by deleting clause (f) in its
entirety and replacing it with the following:
(f) Indebtedness consisting of obligations arising under
letters of credit in an aggregate face amount not to exceed
$82,500,000 at any one time outstanding;
(I) Amendment
to Section 8.15 . Section 8.15 of the Existing Credit
Agreement is hereby deleted in its entirety and replaced with the
following:
Permit
Consolidated Capital Expenditures to exceed (a) from the
period beginning on the Closing Date and ending on the last day of
the first full fiscal quarter following the Closing Date,
$40,000,000 and (b) for any fiscal quarter thereafter,
$30,000,000; provided , that any unused amounts for any
fiscal quarter may be carried forward and used in the next
succeeding fiscal quarters by the Borrower and its Subsidiaries;
provided , further , in no event shall the Borrower
permit Consolidated Capital Expenditures to exceed $100,000,000 in
any fiscal year of the Borrower.
(J)
Schedule 2.05(b) . Schedule 2.05(b) is hereby
deleted in its entirety.
3.
Commitment Reduction . The Borrower has requested that the
Aggregate Revolving Commitments be permanently reduced to
$75,000,000 in accordance with Section 2.06(a) of the Existing
Credit Agreement. The notice of such reduction required by
Section 2.06(a) is hereby waived and the Administrative Agent
and the Required Lenders agree that the Borrower shall have
complied with the mandatory prepayment set forth in
Section 2.05(b)(i) if the Net Cash Proceeds of the June Equity
Offering are paid to the Administrative Agent as required below
and, after payment thereof, the Total Revolving Outstandings are
reduced to an amount no greater than the amount of the Aggregate
Revolving Commitments after giving effect to this Amendment (
i.e. , $75,000,000).
4.
Waiver . The Administrative Agent and the Required Lenders
hereby waive, on a limited one-time basis the Collective Bargaining
Default This waiver shall be effective only in the specific
circumstances provided for above and only for the purposes for
which given.
5.
Conditions to Effectiveness . This Amendment shall become
effective on the date on which all of the conditions set forth in
this Section have been satisfied (the “ First Amendment
Effective Date ”).
(a) Execution
of Counterparts of Amendment . The Administrative Agent shall
have received counterparts of this Amendment, which collectively
shall have been duly executed on behalf of the Borrower, each
Guarantor, the Administrative Agent and the Required
Lenders.
(b) Amendment
Fee . The Administrative Agent shall have received, for the
account of each Lender which executes this Agreement before the
close of business on June 1, 2009
(each, an
“ Executing Lender ”) an amendment fee in amount
equal to $7,500 per Executing Lender.
(c) June Equity
Offering; Payment of Proceeds . The Borrower shall
successfully complete the June Equity Offering and receive gross
proceeds therefrom in an amount not less than $125,000,000. The
Borrower shall pay to the Administrative Agent for the prepayment
of the Loans an amount equal to 100% of the Net Cash Proceeds (but
in no event an amount in excess of the aggregate amount of Loans
then outstanding) received by the Loan Parties in connection with
the June Equity Offering by not later than the close of business on
June 10,
|
