Exhibit 10.4

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

To each of the Lenders
signatory hereto

 

Ladies and Gentlemen:

 

Reference is hereby made to that certain Credit Agreement dated as of
December 26, 2003 (as amended hereby, the “Credit Agreement”), between the
undersigned, LTC Properties, Inc., the Guarantors party thereto, the Lenders
party thereto, Bank of Montreal, as Administrative Agent, Harris Nesbitt Corp.,
as Co-Lead Arranger and Book Manager and Key Bank National Association, as
successor in interest to Key Corporate Capital Inc., as Co-Lead Arranger and
Syndication Agent.  All capitalized terms used herein without definition shall
have the same meanings herein as such terms have in the Credit Agreement.

 

The Company has requested that Merrill Lynch Capital, a Division of Merrill
Lynch Business Financial Services, Inc. be approved as an Eligible Assignee with
a Commitment of $20,000,000 pursuant to Section 1.14 of the Credit Agreement,
that the Lenders consent to an increase of the limitation on Secured Recourse
Debt, that the definition of Required Lenders be amended, and that certain other
amendments be made to the Credit Agreement, and the Lenders are willing to do so
under the terms and conditions set forth in this agreement (herein, the
“Amendment”).

 

1.                                       AMENDMENTS.

 

Subject to the satisfaction of the conditions precedent set forth in Section 2
below, the Credit Agreement shall be and hereby is amended as follows:

 

1.1.                              Section 1.14 of the Credit Agreement shall be
amended by (i) deleting the amount “$14,000,000” appearing therein and inserting
in its place the amount “$20,000,000”, (ii) deleting the amount “$59,000,000”
appearing therein and inserting in its place the amount “$65,000,000”, and
(iii) adding the following sentence to the end of Section 1.14:  “The Lenders
approve Merrill Lynch Capital, a Division of Merrill Lynch Business Financial
Services, Inc., as an Eligible Assignee with a Commitment of $20,000,000
provided that Merrill Lynch Capital shall not become a Lender hereunder until
the documents required by Section 1.14(c) have been executed and delivered.”

 

1.2.                              The defined term “Borrowing Base” appearing in
Section 5.1 of the Credit Agreement shall be amended and restated in its
entirety to read as follows:

 

“Borrowing Base” means, at any date of its determination, an amount equal to 50%
of the Borrowing Base Value on such date minus the outstanding principal amount
of all Unsecured Debt of

 

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the Borrower on such date that is pari passu in rank to the indebtedness under
the Credit Agreement other than the Obligations.

 

1.3.                              The defined term “Required Lenders” appearing
in Section 5.1 of the Credit Agreement is hereby amended and restated in its
entirety as follows:

 

“Required Lenders” means, as of the date of determination thereof, Lenders whose
outstanding Loans and interests in Letters of Credit and Unused Commitments
constitute more than 66-2/3% of the sum of the total outstanding Loans,
interests in Letters of Credit, and Unused Commitments of the Lenders.

 

1.4.                              Subsection (e) of Section 8.21 of the Credit
Agreement is hereby amended by deleting the amount “$15,000,000” and replacing
it with the amount “$30,000,000”.

 

1.5.                              Subsection (c) of Section 8.22 of the Credit
Agreement is hereby amended in its entirety to read as follows:

 

“(c)                         Minimum Eligible Property NOI to Debt Service
Ratio.  As of the last day of each Fiscal Quarter of the Borrower, the Borrower
shall not permit the ratio of Eligible Property NOI to the sum of (i) Unsecured
Debt Service with respect to indebtedness that is pari passu in rank to the
indebtedness under the Credit Agreement, plus (ii) Credit Facility Debt Service,
to be less than 2.25 to 1.0.”

 

1.6.                              Exhibit E to the Credit Agreement is hereby
amended and restated in its entirety in the form attached hereto as Exhibit E.

 

1.7.                              Schedule I to Exhibit F to the Credit
Agreement is hereby amended and restated in its entirety in the form attached as
Schedule 1(F) hereto.

 

2.                                       CONDITIONS PRECEDENT.

 

The effectiveness of this Amendment is subject to the satisfaction of all of the
following conditions precedent:

 

2.1.                              The Borrower, the Administrative Agent and the
Lenders shall each have executed and delivered this Amendment.

 

2.2                                 All legal matters incident to the execution
and delivery of this Amendment and the instruments and documents contemplated
hereby shall be satisfactory to the Lenders and their counsel; and the
Administrative Agent shall have received (with a signed copy for each Lender)
(i) the favorable written opinion of counsel for the Borrower in form and
substance satisfactory to the Administrative Agent and (ii) the signed
Certificate of the Secretary or an Assistant Secretary of the Borrower, dated
the date hereof, certifying (x) a true and correct copy of resolutions adopted
by the Board of

 

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Directors of the Borrower authorizing or ratifying the execution, delivery and
performance of the Credit Agreement as amended by this Amendment and the other
instruments and documents called for above, including the Note to be issued to
the New Lender and (y) the incumbency and specimen signatures of officers of the
Borrower executing the documents referred to in clause (x) above and any other
documents delivered to the Administrative Agent in connection with this
Amendment.

 

2.3.                              The Guarantors shall have executed and
delivered their consent to this Amendment in the space provided for that purpose
below.

 

3.                                       REPRESENTATIONS.

 

In order to induce the Lenders to execute and deliver this Amendment, the
Borrower hereby represents to the Administrative Agent and the Lenders that as
of the date hereof the representations and warranties set forth in Section 6 of
the Credit Agreement are and shall be and remain true and correct (except to the
extent the same expressly relate to an earlier date) and the Borrower is in
compliance with all of the terms and conditions of the Credit Agreement and the
other Loan Documents and no Default or Event of Default has occurred and is
continuing under the Credit Agreement or shall result after giving effect to
this Amendment.

 

4.                                       MISCELLANEOUS.

 

4.1.                              Except as specifically amended herein, the
Credit Agreement shall continue in full force and effect in accordance with its
original terms.  Reference to this specific Amendment need not be made in the
Credit Agreement, or any other instrument or document executed in connection
therewith, or in any certificate, letter or communication issued or made
pursuant to or with respect to the Credit Agreement, any reference in any of
such items to the Credit Agreement being sufficient to refer to the Credit
Agreement as amended hereby.

 

4.2.                              The Borrower agrees to pay on demand all
reasonable costs and expenses of or incurred by the Administrative Agent in
connection with the negotiation, preparation, execution and delivery of this
Amendment and the other instruments and documents contemplated hereby, including
the reasonable fees and expenses of counsel for the Administrative Agent.

 

4.3.                              This Amendment may be executed in any number
of counterparts, and by the different parties on different counterpart signature
pages, all of which taken together shall constitute one and the same agreement. 
Any of the parties hereto may execute this Amendment by signing any such
counterpart and each of such counterparts shall for all purposes be deemed to be
an original.  This Amendment shall be governed by the internal laws of the State
of New York.

 

[SIGNATURES PAGES TO FOLLOW]

 

3

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This First Amendment to Credit Agreement is dated as of September 17, 2004.

 

 

LTC PROPERTIES, INC.

 

 

 

 

 

 

 

By

 

 

 

Name

/s/ Andre Dimitriadis

 

 

 

Title

Chairman & CEO

 

 

 

 

 

 

 

By

 

 

 

 

 

Name

/s/ Alex J. Chavez

 

 

 

Title

Sr. Vice President and Treasurer

 

 

4

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Accepted and agreed to as of the date and year last above written.

 

 

BANK OF MONTREAL, Chicago Branch, in its
individual capacity as a Lender, as L/C Issuer, and as
Administrative Agent

 

 

 

 

 

By

 

 

Name

/s/ Thomas A. Batterham

 

 

Title

Managing Director

 

 

 

 

 

KEY BANK NATIONAL ASSOCIATION, successor
in interest to KEY CORPORATE
CAPITAL INC., in its individual capacity as a
Lender

 

 

 

 

 

 

By

 

 

Name

/s/ Florentina Djulvezan

 

 

Title

Vice President

 

 

 

 

 

BANK LEUMI USA, in its individual capacity as
a Lender

 

 

 

 

 

 

 

By

 

 

Name

/s/ Joung Hee Hong

 

 

Title

Vice President

 

 

5

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GUARANTORS’ ACKNOWLEDGMENT

 

The undersigned each hereby consent to the First Amendment to Credit Agreement
as set forth above and confirm all of the undersigneds’ obligations thereunder
remain in full force and effect.  The undersigned each further agree that the
consents of the undersigned to any further amendments to the Credit Agreement
shall not be required as a result of this consent having been obtained.

 

Dated as of September 17, 2004.

 

 

 

LTC-WEST, INC.

 

 

 

By

 

Name

/s/ Andre Dimitriadis

 

 

Title

Chairman & CEO

 

 

 

 

By

 

Name

/s/ Alex J. Chavez

 

 

Title

Sr. Vice President and Treasurer

 

 

 

 

FLORIDA-LTC, INC.

 

 

 

By

 

Name

/s/ Andre Dimitriadis

 

 

Title

Chairman & CEO

 

 

 

 

By

 

Name

/s/ Alex J. Chavez

 

 

Title

Sr. Vice President and Treasurer

 

 

 

 

 

LTC GP I, INC.

 

 

 

By

 

Name

/s/ Andre Dimitriadis

 

 

Title

Chairman & CEO

 

 

 

 

 

By

 

Name

/s/ Alex J. Chavez

 

 

Title

Sr. Vice President and Treasurer

 

 

6

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LTC GP VI, INC.

 

 

 

By

 

Name

/s/ Andre Dimitriadis

 

 

Title

Chairman & CEO

 

 

 

 

By

 

Name

/s/ Alex J. Chavez

 

 

Title

Sr. Vice President and Treasurer

 

 

 

 

NORTH CAROLINA REAL ESTATE INVESTMENTS LLC

 

 

 

By

 

Name

/s/ Andre Dimitriadis

 

 

Title

Chairman & CEO

 

 

 

 

By

 

Name

/s/ Alex J. Chavez

 

 

Title

Sr. Vice President and Treasurer

 

 

 

 

 

EDUCATION PROPERTIES INVESTORS, INC.

 

 

 

By

 

Name

/s/ Andre Dimitriadis

 

 

Title

Chairman & CEO

 

 

 

 

 

By

 

Name

/s/ Alex J. Chavez

 

 

Title

Sr. Vice President and Treasurer

 

 

7

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EXHIBIT E

 

BORROWING BASE CERTIFICATE

 

To:                              Bank of Montreal, Chicago Branch, as
Administrative Agent under, and the
Lenders party to, the Credit Agreement
described below.

 

Pursuant to the terms of the Credit Agreement dated as of December 26, 2003,
among us (the “Credit Agreement”), we submit this Borrowing Base Certificate to
you and certify that the information set forth below and on any attachments to
this Certificate is true, correct and complete as of the date of this
Certificate.

 

1.

 

Borrowing Base Value

 

$

 

 

 

 

 

 

 

2.

 

Line 1 multiplied by 50%

 

$

 

 

 

 

 

 

 

3.

 

Unsecured Debt (other than Obligations)

 

$

(

)

 

 

 

 

 

 

 

4.

 

Borrowing Base (Line 2 minus by Line 3 above)

 

$

 

 

The Borrower represents and warrants that the aggregate principal amount of
Loans and L/C Obligations on the date hereof, including any Loans to be made or
Letters of Credit to be issued on the date hereof, do not exceed the Borrowing
Base set forth above.

 

The foregoing certifications, together with the computations set forth in
Schedule I hereto are made and delivered this          day of
                         20    .

 

 

LTC PROPERTIES, INC.

 

 

 

By

 

 

Name

 

 

 

Title

 

 

 

 

 

 

By

 

 

Name

 

 

 

Title

 

 

 

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SCHEDULE I

CALCULATIONS

 

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SCHEDULE I(F)

TO COMPLIANCE CERTIFICATE

 

COMPLIANCE CALCULATIONS

FOR CREDIT AGREEMENT DATED AS OF DECEMBER 26, 2003

 

CALCULATIONS AS OF                 ,       

 

A.                                    Maximum Total Indebtedness to Total Asset
Value (Section 8.21(a))

 

1.

 

Total Indebtedness

 

$

 

 

 

 

 

 

 

2.

 

Total Asset Value

 

 

 

 

 

 

 

 

 

3.

 

Ratio of Line A1 to A2

 

:1.0

 

 

 

 

 

 

 

4.

 

Line A3 ratio must not exceed

 

:1.0

 

 

 

 

 

 

 

5.

 

The Borrower is in compliance (circle yes or no)

 

yes/no

 

 

B.                                    Maximum Secured Debt to Total Asset Value
(Section 8.21(b))

 

1.

 

Secured Debt

 

$

 

 

 

 

 

 

 

2.

 

Total Asset Value

 

 

 

 

 

 

 

 

 

3.

 

Ratio of Line B1 to B2

 

:1.0

 

 

 

 

 

 

 

4.

 

Line B3 ratio must not exceed

 

:1.0

 

 

 

 

 

 

 

5.

 

The Borrower is in compliance (circle yes or no)

 

yes/no

 

 

C.                                    Minimum EBITDA to Interest Expense Ratio
(Section 8.21(c))

 

1.

 

Net Income for the last 4 quarters

 

$

 

 

 

 

 

 

 

2.

 

Depreciation and Amortization Expense for last 4 quarters

 

 

 

 

 

 

 

 

 

3.

 

Interest Expense for last 4 quarters

 

 

 

 

 

 

 

 

 

4.

 

Income Tax Expense for last 4 quarters

 

 

 

 

 

 

 

 

 

5.

 

Extraordinary, unrealized or non-recurring losses, including impairment charges
and reserves for the last 4 quarters

 

 

 

 

 

 

 

 

 

6.

 

Sum of Lines C1 through C5

 

 

 

 

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7.

 

The funds received by the Borrower’s Subsidiaries rent by which are reserved for
capital expenses for the last 4 quarters

 

 

 

 

 

 

 

 

 

8.

 

Unrealized gains of the sale of assets for the last 4 quarters

 

 

 

 

 

 

 

 

 

9.

 

Income tax benefits of the last 4 quarters

 

 

 

 

 

 

 

 

 

10.

 

Sum of Lines C6 through C8

 

 

 

 

 

 

 

 

 

11.

 

Line 6 minus Line 10 (“EBITDA”)

 

 

 

 

 

 

 

 

 

12.

 

Interest Expense

 

 

 

 

 

 

 

 

 

13.

 

Ratio of Line C12 to C11

 

:1.0

 

 

 

 

 

 

 

14.

 

Line C13 ratio shall not be less than

 

:1.0

 

 

 

 

 

 

 

15.

 

The Borrower is in compliance (circle yes or no)

 

yes/no

 

 

D.                                    Minimum EBITDA to Fixed Charges Ratio
(Section 8.21(d))

 

1.

 

EBITDA

 

$

 

 

 

 

 

 

 

2.

 

Fixed Charges

 

 

 

 

 

 

 

 

 

3.

 

Ratio of Line D1 to D2

 

:1.0

 

 

 

 

 

 

 

4.

 

Line D3 ratio shall not be less than

 

:1.0

 

 

 

 

 

 

 

5.

 

The Borrower is in compliance (circle yes or no)

 

yes/no

 

 

E.                                      Secured Debt (Section 8.21(e))

 

1.

 

Secured Debt

 

$

 

 

 

 

 

 

 

2.

 

Line E1 shall not exceed

 

 

 

 

 

 

 

 

 

3.

 

The Borrower is in compliance (circle yes or no)

 

yes/no

 

 

F.                                      Net Worth (Section 8.21(f))

 

1.

 

Net Worth

 

$

 

 

 

 

 

 

 

2.

 

Line F1 shall not be less than

 

$

 

 

 

 

 

 

 

3.

 

The Borrower is in compliance (circle yes or no)

 

yes/no

 

 

G.                                    Floating Rate Debt (Section 8.21(g))

 

1.

 

Total Asset Value

 

$

 

 

 

 

 

 

 

2.

 

Percentage of Total Asset Value consisting of
outstanding unhedged floating rate debt

 

 

%

 

2

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3.

 

Line G1 shall not exceed

 

 

 

 

 

 

 

 

 

4.

 

The Borrower is in compliance (circle yes or no)

 

yes/no

 

 

H.                                    Minimum Borrowing Base Value
(Section 8.22(b))

 

1.

 

Borrowing Base Value

 

$

 

 

 

 

 

 

 

2.

 

Line H1 shall not be less than

 

 

 

 

 

 

 

 

 

3.

 

The Borrower is in compliance (circle yes or no)

 

yes/no

 

 

I.                                         Minimum Eligible Property NOI to Debt
Service Ratio (Section 8.22(c))

 

1.

 

Eligible Property NOI

 

 

 

 

 

 

 

 

 

2.

 

pari passu Unsecured Debt Service plus Credit Facility Debt Service

 

$

 

 

 

 

 

 

 

3.

 

Ratio of Line I1 to I2

 

:1.0

 

 

 

 

 

 

 

4.

 

Line I3 ratio shall not be less than

 

2.25:1.0

 

 

 

 

 

 

 

5.

 

The Borrower is in compliance (circle yes or no)

 

yes/no

 

 

3

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