FIRST AMENDMENT TO LOAN AGREEMENT
AND REAFFIRMATION AGREEMENT
This FIRST AMENDMENT TO LOAN AGREEMENT AND REAFFIRMATION AGREEMENT ("Amendment"), made as of July ___, 1998 is by and among THE CAPITAL COMPANY OF AMERICA LLC, a Delaware limited liability company, having an address at 2 World Financial Center, Building B, New York, New York 10281-1198, Attention: Christopher Tierney, Telefax Number (212) 667-1666 (together with its successors and assigns, "Lender"), ALS-VENTURE II, INC., a Delaware corporation having an address at c/o Alternative Living Services, Inc., 450 North Sunnyslope Road, Suite 300, Brookfield,
Wisconsin 53005, Attention: Chief Financial Officer, Thomas E. Komula, Telefax Number (414) 789-6182 ("Borrower"), ALTERNATIVE LIVING SERVICES, INC., a Delaware corporation, 450 North Sunnyslope Road, Suite 300, Brookfield, Wisconsin 53005, Attention: Chief Financial Officer, Thomas E. Komula, Telefax Number (414) 789-6182 ("Guarantor" and "Parent Pledgor", as applicable) and ALS-CLARE BRIDGE, INC., a Delaware corporation, 450 North Sunnyslope Road, Suite 300, Brookfield, Wisconsin 53005 ("Subsidiary Pledgor"; the "Parent Pledgor" and the "Subsidiary Pledgor" are referred to herein collectively as the "Pledgors").
RECITALS
A. WHEREAS, Nomura Asset Capital Corporation, a Delaware corporation, as Lender ("Nomura"), and Borrower entered into that certain Loan Agreement made as of May 26, 1998 (the "Original Loan Agreement") which Original Loan Agreement provides for a series of advances (collectively, the "Loan") from Nomura in the principal amount up to $82,000,000 which amount may be increased by the Earn-Out Advance for up to $8,000,000, provided the terms of the Loan Agreement are complied with. The Loan is evidenced by four
Promissory Noteseach dated as of May 26, 1998 and each executed and delivered by Borrower to Nomura. The Loan is secured by, inter alia, real property, improvements thereon and other collateral (collectively, "Property"). Unless otherwise defined herein, capitalized terms used in this Amendment shall have the meaning set forth in the Original Loan Agreement;
B. WHEREAS, subsequent to making the Closing Date Advance, and pursuant to that certain Assignment and Assumption Agreement dated as of July ___, 1998, Allonge and other documents related thereto, Nomura assigned to Lender, and Lender assumed from Nomura, all of Nomura's right, title, interest, duties and obligations in, to and under the Original Loan Agreement and the other Loan Documents;
C. WHEREAS, pursuant to Article III of the Original Loan Agreement, the parties to this Amendment desire Lender to make an Additional Facility Advance.
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D. WHEREAS, in connection with the foregoing recitals, and as a condition to Lender making the Additional Facility Advance, the parties desire to amend the Original Loan Agreement in the manner set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals, which are by this reference incorporated herein, and for other valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows:
1. Exhibit B. Exhibit B of the Original Loan Agreement is hereby deleted in its entirety and replaced with the Exhibit B attached hereto and by this reference incorporated herein.
2. Section 2.15(b)(1) of the Original Loan Agreement is hereby amended by adding the words "and licensed" after the phrase "be a property operated."
3. Section 5.1(z) of the Original Loan Agreement is hereby amended by adding the following sentence to the end of Section 5.1(z): "Notwithstanding the foregoing, any security deposits collected by Borrower shall be held and administered in accordance with applicable laws governing the use and operation of assisted living facilities."
4. Section 6.1(m)(6) of the Original Loan Agreement is hereby amended by adding the words "or which is not in compliance with Legal Requirements" after the word "Facility".
5. Ratification and Reaffirmation. Each of Borrower, Guarantor and Pledgors hereby ratify and confirm, and reaffirm in all respects and without condition, all of the terms, covenants and conditions set forth in the Loan Documents to which each is bound and hereby respectively agree as follows:
5.1 Borrower, Guarantor and Subsidiary Pledgor each acknowledge the assignment by Nomura, and the assumption by Lender, of Nomura's right, title and interest in and to the Loan Documents.
5.2 Borrower remains unconditionally liable to Lender in accordance with the terms, covenants and conditions of the Loan Documents, all Collateral, Liens, and other security interests and pledges created pursuant thereto or referred to therein shall continue unimpaired and in full force and effect and shall continue to secure all of the existing and future Indebtedness due under the Original Loan Agreement.
5.3 Guarantor remains unconditionally liable to Lender in accordance with the terms, covenants and conditions of the Guaranty and Suretyship Agreement, the Environmental Indemnity Agreement, Equity Pledge Agreement and any other Loan Document by which Guarantor is bound.
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5.4 Subsidiary Pledgor remains unconditionally liable to Lender in accordance with the terms, covenants and conditions of the Equity Pledge Agreement and any other Loan Document by which Subsidiary Pledgor is bound.
5.5. Borrower, Guarantor and Subsidiary Pledgor agree that the Loan Documents, as so modified, remain in full force and effect as of the date hereof, and nothing herein contained shall be construed to impair the security or affect the first priority of the lien of any mortgage, nor impair any rights or powers which Lender or its successors may have for nonperformance of any term of any of the Loan Documents. All Collateral, Liens and other security interests and pledges created pursuant to, or referred to in, the Loan Documents shall continue unimpaired and in full force and effect and shall continue to secure all of the existing and future Indebtedness due under the Original Loan Agreement.
6. Representations and Warranties. Borrower, Guarantor and Pledgors acknowledge and agree that any and all representations and warranties (including, without limitation, the Single-Purpose Entity representations and warranties) contained in the Original Loan Agreement and all the other Loan Documents shall be deemed to be remade as of the date hereof. Further, Borrower, Guarantor and Pledgors represent and warrant that there are no existing or pending Defaults or Events of Default under the Loan Agreement or any other Loan Document.
7. Severability. In case any provision of this Amendment shall be invalid, illegal, or unenforceable, such provision shall be deemed to have been modified to the extent necessary to make it valid, legal, and enforceable. The validity, legality, and ...