Exhibit 10.101
OMNIBUS MODIFICATION AGREEMENT
This OMNIBUS MODIFICATION AGREEMENT (this "Agreement") dated as of the
25th day of September, 2002 by and between CAPITAL SENIOR LIVING PROPERTIES,
INC., a Texas corporation (hereinafter called "Borrower"), and BANK ONE, NA
(successor by merger to Bank One, Texas, N.A.), as Agent (hereinafter called
"Agent") for the Lenders under the Loan Agreement (as hereinafter defined);
WITNESSETH:
WHEREAS, Borrower, Agent and the Lenders (as such term is defined
therein) entered into that certain 1999 Amended and Restated Loan Agreement
dated April 8, 1999, as modified by Modification Agreement dated March 28, 2000,
Second Modification Agreement dated August 15, 2000, Third Modification
Agreement dated March 30, 2001 and Fourth Modification Agreement dated January
10, 2002 (as the same may be modified, amended, restated or supplemented from
time to time, the "Loan Agreement"); and
WHEREAS, pursuant to the terms of the Loan Agreement, Borrower
delivered that certain Third Amended and Restated Promissory Note dated August
15, 2000 in the principal amount of $9,000,000, payable to the order of Agent,
as modified by Modification Agreement dated August 15, 2000 and Extension and
Modification Agreement dated February 11, 2002 (together with all other notes
given in substitution therefor or in modification, renewal or extension thereof,
in whole or in part, including any notes delivered pursuant to Section 10.13 of
the Loan Agreement, the "Note");
WHEREAS, payment of the Note is secured by the deed of trust (the
"Mortgage") and the assignment of leases and rents (the "Assignment of Leases
and Rents") described on Exhibit B attached hereto and made a part hereof, which
Mortgage and Assignment of Leases and Rents cover certain property described
therein (the "Mortgaged Property"), including, without limitation, the property
described on Exhibit A attached hereto and made a part hereof (the Note, the
Mortgage, the Assignment of Leases and Rents, the Loan Agreement and all other
documents executed by Borrower or any other party in connection with the loan
evidenced by the Note being herein collectively called the "Loan Documents");
WHEREAS, Borrower executed and delivered to Agent that certain Pledge
Agreement (herein so called) dated July 31, 2001;
WHEREAS, the Note is due and payable on July 15, 2003;
WHEREAS, Borrower has requested that Agent extend the term of the Note
to January 15, 2006 and Agent is willing to do so on the terms and conditions
herein set forth; and
WHEREAS, Borrower has requested and Agent has agreed to make certain
additional revisions to the Loan Documents as more particularly set forth below;
NOW, THEREFORE, for and in consideration of the mutual covenants
contained herein and for other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Capitalized Terms. Capitalized terms not otherwise defined herein
shall have the meaning assigned to such terms in the Loan Agreement.
2. Outstanding. Balance. The current outstanding principal balance of
the Loan as of September l, 2002 is $7,552,500.00. Neither Agent nor the Lender
shall have any further obligation to make Advances.
3. Modification of Loan Agreement. The Loan Agreement is modified as
follows:
(a) Sections 1.5 and 1.67 are deleted and the following are
substituted in lieu thereof
1.5 Applicable LIBOR Margin. The term "Applicable
LIBOR Margin" shall mean (i) two and one-quarter percent
(2.25%) per annum, or (ii) at such time as the Cash Flow
Coverage is at least 1.45 to 1 for a calendar quarter, two
percent (2%) per annum, provided, however, that if the Cash
Flow Coverage should thereafter fall below 1.45 to 1 for a
calendar quarter, the percentage in this clause (ii) shall
increase to two and one-quarter percent (2.25%) until such
time as the Cash Flow Coverage is again at 1.45 to 1 for a
calendar quarter, it being understood and agreed that the
Applicable LIBOR Margin will be continuously adjusted based on
the current Cash Flow Coverage. No downward adjustment of the
Applicable LIBOR Margin shall be made unless Borrower has
previously notified Agent an adjustment is warranted.
1.67 Maturity Date. The term "Maturity Date" shall
mean January 15, 2006.
(b) Sections 5.15(a), (e), (f) and (g) are deleted and the
following are substituted in lieu thereof
(a) Current Ratio. CSLC shall maintain a minimum
Current Ratio of 1.0 to 1.0 at all times. Unless requested
more often by Agent, which request must be reasonable,
evidence of the Current Ratio shall be submitted quarterly,
calculated as of the last day of the calendar quarter being
measured. For purposes of this calculation, (i) pre-paid
expenses will be classified as non-Current Assets, except that
prepaid insurance may be classified as a Current Asset to the
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extent any debt incurred to finance such insurance is
classified as a Current Liability, and (ii) any current
portion of the Newman Debt shall be excluded as a Current
Liability until the date which is the later of (i) November l,
2002, and (ii) ninety (90) calendar days prior to the maturity
date of the Newman Debt.
(e) Cash Flow Coverage. The Property shall maintain a
minimum Cash Flow Coverage, calculated based on the prior
three (3) months of operation, as follows:
1.1 to 1.0 As of June 30, 2002
1.2 to 1.0 As of September 30, 2002
1.3 to 1.0 As of December 31, 2002
1.3 to 1.0 As of March 31, 2003
1.3 to 1.0 As of June 30, 2003
1.3 to 1.0 As of September 30, 2003
1.4 to 1.0 As of December 31, 2003 and the end
of each quarter thereafter.
"Cash Flow Coverage" is a ratio, the first number of which is net
income from the normal operations of the Property (without deduction
for actual management fees paid or incurred), plus interest expense (to
the extent deducted in calculating net income) and allowances for
depreciation and amortization of the Property for said period, less (i)
the greater of actual capital expenditures for that period or $250 per
unit, and (ii) the greater of actual management fees during that period
or a five percent (5%) management fee, and the second number of which
is an amount equivalent to the constant monthly payment sufficient to
fully amortize the principal balance outstanding on the Loan at the
time of determination in equal installments aver a 25-year period using
an interest rate equal to 2.50% per annum above the Treasury Note Rate.
For purposes of the calculation above, the term "Loan" shall mean the
outstanding principal balance of the Loan on the date of determination
less any sums held in the Account (as such term is defined in the
Pledge Agreement dated July 31, 2001 made by Borrower in favor of
Agent) on the date of determination.
(f) Liquid Assets. CSLC shall continuously maintain Liquid
Assets of at least $6,000,000 at all times. For purposes of calculating
Liquid Assets, (i) cash consolidated for accounting purposes that is
not owned by CSLC shall be excluded, (ii) cash held in the Account
shall be included, and (iii) the amount which CSLC and/or its
Affiliates is bound to invest in future acquisitions under the terms of
the Anticipated Joint Venture Transaction shall be excluded. Unless
requested more often by Agent, which request must be reasonable,
evidence of the Liquid Assets shall be submitted quarterly, within
forty-five (45} days of the end of each calendar quarter, calculated as
of the last day of each calendar quarter being measured.
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(g) EBITDA/Interest Expense Ratio. CSLC shall maintain an
EBITDA/Interest Expense Ratio of not less than 1.25 to 1.0 for the two
calendar quarters ending June 30, 2002, not less than 1.15 to 1.0 for
the two calendar quarters ending September 30, 2002, not less than 1.15
to 1.0 for the two calendar quarters ending December 31, 2002, not less
than 1.20 to 1 for the two calendar quarters ending March 31, 2003, and
not less than 1.25 to 1.0 as of the end of each rolling two calendar
quarters thereafter. Unless requested more often by Agent, which
request must be reasonable, evidence of the EBITDA/Interest Expense
Ratio shall be submitted quarterly, calculated as of the last day of
the two calendar quarters being measured.
4. Extension of Note and Liens. The maturity date of the Note is hereby
extended to January 15, 2006. The liens, security interests, assignments and
other rights evidenced by the Mortgage, Assignment of Leases and Rents, Pledge
Agreement and other Loan Documents are hereby extended to secure payment of the
Note as extended hereby.
5. Extension Fee. Upon the execution of this Agreement, Borrower shall
pay to Agent an extension fee in the amount of $37,763.00.
6. Modification of Note. The following is added after the second
paragraph on page 2 of the Note:
Commencing August l, 2002 and on the first day of each month
thereafter, Borrower shall make a principal payment on the Note in the
amount of $11,850.00. Such principal installment payments shall be in
addition to payments of interest due on each such dates.
7. Pledge Agreement. The following is added as Section 7.15 to the
Pledge Agreement:
7.15(a) For proposes of calculation of Cash Flow Coverage, the
term "Loan" means the outstanding principal balance of the Loan on the
date of determination less any sums held in the Account on the date of
determination. Such adjusted Loan balance is referred to herein as the
"Adjusted Loan Balance." The term "Principal Amount" as used herein is
the maximum amount which could be added to the Adjusted Loan Balance
without causing the Cash Flow Coverage of the Property for any two (2)
quarters under review to be less than 1.4 to 1.
(b) Notwithstanding anything to the contrary contained herein,
Bank will release from the Account the Principal Amount, provided:
(1) No Default or Event of Default exists;
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(2) The Cash Flow Coverage of the Property for the two (2)
consecutive calendar quarters immediately preceding the release is at
least 1.4 to 1; and
(3) Borrower makes a written request for such release.
(c) The following is an example of the calculation of a
"Principal Amount":
(1) Assume the following:
(i) As of December 31, 2002, the actual outstanding
balance of the Loan is $7,500,000 and the amount in the
Account is $1,000,000. As a result, the "Adjusted Loan
Balance" as of December 31, 2002 is $6,500,000.
(ii) The Cash Flow Coverage of the Property for the 2
consecutive calendar quarters ending December 31, 2002 is 1.45
to 1.
(iii) If the Adjusted Loan Balance as of December 31,
2002 were $6,700,000, the Cash Flow Coverage of the Property
for the 2 consecutive calendar quarters ending December 31,
2002 would be at Least 1.4 to 1.
(iv) if the Adjusted Loan Balance as of December 31,
2002 were $6,700,001, the Cash Flow Coverage of the Property
for the 2 consecutive calendar quarters ending December 31,
2002 would be less than 1.4 to 1.
(2) The Principal Amount is $200,000, which is the maximum
amount which could be added to the Adjusted Loan Balance as of December
31, 2002 without causing the Cash Flow Coverage of the Property for the
two quarters ending December 31, 2002 to be less than 1.4 to 1.
8. Loan Document. This Agreement constitutes a Loan Document.
9. Agent/Lender. Bank One, NA is the sole Lender under the Loan
Agreement. Accordingly, the terms Lender and Agent may be used interchangeably.
10. Representations and Warranties. Borrower hereby represents and
warrants that (a) Borrower is duly organized and legally existing under the laws
of the State of Texas and qualified to do business in the State of Arizona; (b)
the execution and delivery of, and performance under this Agreement are within
Borrower's power and authority without the joinder or consent of any other party
and have been duly authorized by all requisite corporate action and are not in
contravention of law or the powers of Borrower's organizational documents; (c)
this Agreement constitutes the legal, valid and binding obligations of Borrower
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enforceable in accordance with its terms, subject to laws regarding creditor's
rights and general principles of equity; and (d) the execution and delivery of
this Agreement by Borrower do not contravene, result in a breach of or
constitute a default under any deed of trust, loan agreement, indenture or other
contract, agreement or undertaking to which Borrower is a party or by which
Borrower or any of its properties may be bound (nor would such execution and
delivery constitute such a default with the passage of time or the giving of
notice or both) and do not violate or contravene any law, order, decree, rule or
regulation to which Borrower is subject.
11. Further Assurances. Borrower or Agent, upon request from the other
party, agrees to execute such other and further documents as may be reasonably
necessary or appropriate to consummate the transactions contemplated herein or
to perfect the liens and security interests intended to secure the payment of
the Obligations.
12. Confirmation of Loan Documents. Except as provided herein, the
terms and provisions of the Loan Agreement, Note, the Mortgage, the Assignment
of Leases and Rents, the Pledge Agreement and the other Loan Documents shall
remain unchanged and shall remain in full force and effect. Any modification
herein of the Loan Agreement, Note, the Mortgage, the Assignment of Leases and
Rents, the Pledge Agreement and the other Loan Documents shall in no way affect
the security of the Mortgage, the Assignment of Leases and Rents, the Pledge
Agreement and the other Loan Documents for the payment of the Note. The
promissory note described in the Mortgage, the Assignment of Leases and Rents,
the Pledge Agreement and other Loan Documents as the note secured thereby shall
hereafter mean the Note as modified by this Agreement. The Loan Agreement, the
Note, the Mortgage, the Assignment of Leases and Rents, the Pledge Agreement and
the other Loan Documents, as modified and amended hereby, are hereby ratified
and confirmed in all respects. All liens, security interests, mortgages and
assignments granted or created by or existing under the Mortgage, the Assignment
of Leases and Rents, the Pledge Agreement and the other Loan Documents remain
unchanged and continue, unabated, in full force and effect, to secure Borrower's
obligation to repay the Note. All references in the Loan Documents to the Loan
Documents shall hereafter be references to such documents as modified by this
Agreement.
13. Endorsement. Contemporaneously with the execution and delivery
hereof, Borrower shall, at its sole cost and expense, obtain and deliver to
Agent an Endorsement of the Mortgagee Title Policy insuring the lien of the
Mortgage, in form and content acceptable to Agent, stating that the company
issuing said Mortgagee Title Policy will not claim that policy coverage has
terminated or that policy coverage has been reduced, solely by reason of the
execution of this Agreement and maintaining the liability thereunder for the
period of limitation applicable to the indebtedness secured by the lien of the
Mortgage calculated from the renewed and extended maturity date as provided
herein.
14. Liens, Security Interests and Assignments. Borrower hereby
acknowledges that the liens, security interests and assignments created and
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evidenced by the Loan Documents are valid and subsisting and further
acknowledges and agrees that there are no offsets, claims or defenses to the
Obligations or any Loan Documents.
15. Costs and Expenses. Contemporaneously with the execution and
delivery hereof, Borrower shall pay, or cause to be paid, all reasonable costs
and expenses incident to the preparation hereof and the consummation of the
transactions specified herein, including, without limitation, title policy
endorsement charges, recording fees and fees and expenses of legal counsel to
Agent and the Lenders.
16. Release. Borrower hereby releases, remises, acquits and forever
discharges Lenders and Agent, together with their employees, agents,
representatives, consultants, attorneys, fiduciaries, servants, officers,
directors, partners, predecessors, successors and assigns, subsidiary
corporations, parent corporations, and related corporate divisions (all of the
foregoing hereinafter called the "Released Parties"), from any and all actions
and causes of action, judgments, executions, suits, debts, claims, demands,
liabilities, obligations, damages and expenses of any and every character, known
or unknown, direct and/or indirect, at law or in equity, of whatsoever kind or
nature, whether heretofore or hereafter accruing, for or because of any matter
or things done, omitted or suffered to be done by any of the Released Parties
prior to and including the date hereof, and in any way directly or indirectly
arising out of or in any way connected to this Agreement, the Loan Agreement or
any other Loan Document, or any of the transactions associated therewith,
including specifically but not limited to claims of usury.
17. Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if all parties hereto had signed the same
document. All such counterparts shall be construed together and shall constitute
one instrument, but in making proof hereof it shall only be necessary to produce
one such counterpart.
18. Severabilitv. If any covenant, condition, or provision herein
contained is held to be invalid by final judgment of any court of competent
jurisdiction, the invalidity of such covenant, condition, or provision shall not
in any way affect any other covenant, condition or provision herein contained.
19. Time of Essence. It is expressly agreed by the parties hereto that
time is of the essence with respect to this Agreement.
20. Review by Counsel. The parties acknowledge and confirm that each of
their respective attorneys have participated jointly in the review and revision
of this Agreement and that it has not been written solely by counsel for one
party. The parties hereto therefore stipulate and agree that the rule of
construction to the effect that any ambiguities are to or may be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement to favor either party against the other.
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21. Governing Law. This Agreement and the rights and duties of the
parties hereunder shall be governed for all purposes by the law of the State of
Texas and the law of the United States applicable to transactions within said
State.
22. Successors and Assigns. The terms and provisions hereof shall be
binding upon and inure to the benefit of the parties hereto, their successors
and assigns.
23. No Oral Agreements. Borrower and Agent hereby take notice of and
agree to the following:
A. PURSUANT TO SUBSECTION 26.02(b) OF THE TEXAS BUSINESS AND
COMMERCE CODE A LOAN AGREEMENT IN WHICH THE AMOUNT INVOLVED THEREIN
EXCEEDS $50,000 IN VALUE IS NOT ENFORCEABLE UNLESS THE AGREEMENT IS IN
WRITING AND SIGNED BY THE PARTY TO BE BOUND OR BY THAT PARTY'S
AUTHORIZED REPRESENTATIVE.
B. PURSUANT TO SUBSECTION 26.02(c) OF THE TEXAS BUSINESS AND
COMMERCE CODE. THE RIGHTS AND OBLIGATIONS OF THE PARTIES TO THE LOAN
DOCUMENTS SHALL BE DETERMINED SOLELY FROM THE LOAN DOCUMENTS. AND ANY
PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED
INTO THE LOAN DOCUMENTS.
C. THE LOAN AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES THERETO AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES THERETO. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, this Agreement is executed on the respective dates
of acknowledgment, to be effective as of the date first above written.
CAPITAL SENIOR LIVING PROPERTIES, INC.,
a Texas corporation
By: /s/ Paul T. Lee
-----------------------------------
Name: Paul T. Lee
Title: Vice President
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BANK ONE, NA, as Agent
(Main Office Chicago)
By: /s/ Jeffrey A. Etter
----------------------------------
Name: Jeffrey A. Etter
Title: First Vice President
THE STATE OF TEXAS ss.
ss.
COUNTY OF DALLAS ss.
This instrument was acknowledged before me on September ____, 2002, by
Paul T. Lee, Vice President of Capital Senior Living Properties, Inc., a Texas
corporation, on behalf of said corporation.
_________________________________________
Notary Public, State of Texas
_________________________________________
(printed name)
My Commission Expires:
_______________________
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THE STATE OF TEXAS ss.
ss.
COUNTY OF DALLAS ss.
This instrument was acknowledged before me on September ____, 2002, by
Jeffrey A. Etter, First Vice President of Bank One, NA, a national association,
on behalf of said association, as Agent.
_____________________________________
Notary Public, State of Texas
_____________________________________
(printed name)
My Commission Expires:
_______________________
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CONSENT OF GUARANTOR
For a valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, CAPITAL LIVING SENIOR CORPORATION, the Guarantor (herein so
called) under that certain Unlimited Guaranty (herein so called) dated March 28,
2000, hereby consents to and acknowledges the Omnibus Modification Agreement to
which this Consent is attached and hereby declares to and agrees with Lender
that all of the obligations of the Guarantor under the Unlimited Guaranty are
and shall be unaffected by said transactions and that the Unlimited Guaranty is
hereby ratified and confirmed in all respects.
Executed on the date of acknowledgment, to be effective as of September
25, 2002.
CAPITAL SENIOR LIVING CORPORATION,
a Delaware corporation
By:_________________________________
Name: James A. Stroud
Title: Chairman
THE STATE OF TEXAS ss.
ss.
COUNTY OF DALLAS ss.
This instrument was acknowledged before me on September ____, 2002, by
James A. Stroud, Chairman of Capital Senior Living Corporation, a Delaware
corporation, on behalf of said corporation.
_______________________________________
Notary Public, State of Texas
_______________________________________
(printed name)
My Commission Expires:
_______________________
EXHIBIT B
Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture
Filing dated April 8, 1999, recorded in Book 3655, Page 223 in the office of the
Recorder of Yavapai County, Arizona, as modified by Modification Agreement dated
August 15, 2000 and Extension and Modification Agreement dated February 1l,
2002.
Assignment of Leases and Rents dated April 18, 1999, recorded in Book 3655, Page
224 in the office of the Recorder of Yavapai County, Arizona, as modified by
Modification Agreement dated August 15, 2000 and Extension and Modification
Agreement dated February 11, 2002.