ex105711capmarkfretusloan.htm


    Ex-10.57.11

     

    
 

    SECOND
AMENDMENT TO LOAN AGREEMENT

    (Amended
and Restated)

    


    


     

    THIS SECOND AMENDMENT TO LOAN
AGREEMENT (Amended and Restated) (this “Amendment”) is made as of December 31, 2008 (the “Effective Date”), by and between FRETUS
INVESTORS EL PASO LP, a Delaware limited partnership (together with its
successors and assigns, the “Borrower”), and CAPMARK BANK, a Utah industrial
bank (together with its successors and assigns, “Lender”).

     

    RECITALS

     

    A.           Borrower
and other borrower parties obtained forty-eight (48) loans from Lender in the
aggregate principal sum of $90,000,000.00, as evidenced and governed by that
certain Loan Agreement dated August 31, 2005 (the “Original Loan
Agreement”).

     

    B.           Borrower
and the other borrower parties subsequently requested that the loans evidenced
and governed by the Original Loan Agreement be consolidated into two (2) loans
and increased to an aggregate of $140,000,000.00, with one note for
$132,000,000.00 and the second for $8,000,000.00, and Lender agreed to such
consolidation and increase upon certain conditions which were set forth in that
certain Amended and Restated Loan Agreement dated February 28, 2007, which was
subsequently amended by that certain First Amendment to Amended and Restated
Loan Agreement dated as of April 25, 2008, which, among other things, served to
reduce the outstanding principal balance under the $132,000,000 loan to
$16,800,000 (as amended, the “Loan Agreement”).

     

    C.           Concurrently
herewith the outstanding principal balance due under the Loan Agreement is being
further reduced and all of the borrower parties, other than Borrower, have been
requested to be released from further liability under the Loan
Agreement.

     

    D.           Borrower,
as the sole remaining Borrower under the Loan Agreement, has requested, and
Lender has agreed, to revise such Loan Agreement from and after the Effective
Date on the terms and conditions hereinafter set forth.

     

    AGREEMENT

     

    NOW, THEREFORE, in
consideration of Ten and No/100 Dollars ($10.00) and other good and valuable
consideration, the sufficiency of which is hereby acknowledged, it is hereby
agreed as follows:

     

    1.           Release
of Certain Borrowers and Facilities from Agreement.  Upon receipt of a
principal reduction in connection with this Amendment in the amount of
$12,511,104.60, resulting in an outstanding balance of $4,350,000, Lender shall
release the specific Borrowers listed on Schedule A (the “Released Borrowers”),
attached hereto and incorporated herein by reference, from the Loan Agreement
and other documents relating to the Loan Agreement.  Upon

     


    
      
         


      

      
        1

        
          

        

      

      
         


      

    


    such
release, the Loan Agreement shall be automatically amended so that the term
“Borrowers” or “Borrower” shall refer only to Fretus Investors El Paso LLC
(Cielo Vista Facility).

     

    All
Mortgages or Deeds of Trust and Security Agreements made by the Released
Borrowers shall be referred to as the “Released
Mortgages”.   Upon such release, all obligations under this Loan
Agreement and the Loan Documents related to the Released Borrowers and the
Released Mortgages shall be deemed fully satisfied and the properties encumbered
shall be fully released from the liens created by the Released Mortgages and
Loan Documents.  Lender agrees upon request to execute and/or to
authorize the Released Borrowers to record and/or file such documents as may be
necessary to evidence the release provided for herein.

     

    2.           Certain
Defined Terms.  Section 1.1 of the Loan Agreement is hereby
amended by adding the following definitions and defined terms:

     

    “Actual Management Fees” means
actual management fees paid or incurred in connection with operation of the
Facility.

     

    “Assumed Management Fees”
means assumed management fees of five percent (5%) of net patient revenues of
the Facility (after Medicaid and Medicare contractual adjustments, if
any).

     

    “Debt Service Coverage Ratio”
means a ratio in which the first number is the “net pre-tax income” of
Borrower from usual operations of the Facility as set forth in the financial
statements provided to Lender (without deduction for Actual Management Fees, if
any, or management expenses, if any, paid or incurred in connection with the
operation of the Facility), calculated based upon the preceding three (3)
months, plus Loan interest expense or Facility lease expense to the extent
deducted in determining net income and non-cash expenses or allowances for
depreciation and amortization of the Facility for such period, less Assumed
Management Fees for such period and the second number is the sum of principal
and interest on the Loans, assuming a twenty-five (25) year amortization
schedule at the Note Rate (as defined in the Note), for said three (3) month
period.  In calculating “net pre-tax income,” extraordinary income and
extraordinary expenses shall be excluded.

     

    3.           Debt
Service Coverage Ratio.  Article IV of the Agreement is hereby
amended by adding the following new Section 4.24:

     

    4.24 Debt
Service Coverage Ratio.  Borrower shall achieve, by the
quarters ending on the schedule below, and maintain thereafter throughout the
term, and within forty-five (45) days after the end of each fiscal quarter of
Borrower, provide evidence to Lender of the achievement of, the following Debt
Service Coverage Ratios until the Loan is paid in full:

     

    
      	
              Period Ending

            	
              DSCR Minimum

            	
              Period Calculated

            
	
              3/31/10
      and 6/30/10

            	
              1.0
      to 1.0

            	
              three
      (3) months

            


    


    
      
         


      

      
        2

        
          

        

      

      
         


      

    


    


    
      	
              9/30/10
      and 12/31/10

            	
              1.10
      to 1.0

            	
              three
      (3) months

            
	
              3/31/11
      and thereafter

            	
              1.25
      to 1.0

            	
              three
      (3) months

            


    

    If Borrower fails to achieve or provide
evidence of achievement of the Debt Service Coverage Ratio, Borrower may deposit
with Lender, at Borrower’s option within fifteen (15) days of such failure,
additional cash or other liquid collateral in an amount which, when added to the
first number of the Debt Service Coverage Ratio, would have resulted in the
noncomplying Debt Service Coverage Ratio having been satisfied.  If
after Borrower has deposited such additional cash or liquid collateral, Borrower
again fails to achieve or provide evidence of the achievement of the Debt
Service Coverage Ratio requirement set forth above and such failure continues
for two (2) consecutive quarters, Borrower may deposit with Lender, at
Borrower’s option within fifteen (15) days of such failure, additional cash or
other liquid collateral (with credit for amounts currently being held by Lender
pursuant to the foregoing sentence), in an amount which, if the same had been
applied on the first (1st) day of the first quarter for which such noncompliance
of the Debt Service Coverage Ratio occurred to reduce the outstanding principal
indebtedness of the Loan, would have resulted in the noncomplying Debt Service
Coverage Ratio having been satisfied.  Any additional cash or liquid
collateral deposited by a Borrower hereunder in order to achieve the required
Debt Service Coverage Ratio and cure any existing default with respect thereto
will be held by Lender in a standard custodial account and shall constitute
additional Collateral for the Loan Obligations and an “Account” as defined in
this Agreement, and, upon the occurrence of an Event of Default, may be applied
by Lender, in such order and manner as Lender may elect, to the reduction of the
Loan Obligations.  Borrower shall not be entitled to any interest
earned on such additional Collateral.  Provided that there is no
outstanding Default or Event of Default, such additional Collateral which has
not been applied to the Loan Obligations will be released by Lender at such time
as Borrower provides Lender with evidence that the required Debt Service
Coverage Ratio outlined above has been achieved and maintained (without regard
to any cash deposited pursuant to this Section) for two (2) consecutive fiscal
quarters.

     

    4.           Incorporation
of Loan Agreement.  Except as amended
herein, the Loan Agreement is in full force and effect and the terms and
conditions of the Loan Agreement are incorporated herein by
reference.

     

    5.           Counterparts.  This
Agreement may be executed in counterparts, each of which shall be deemed to be
an original, but all of which taken together shall constitute but one the same
instrument.

     


    
      
         


      

      
        3

        
          

        

      

      
         


      

    


    


     

    IN WITNESS WHEREOF, Borrowers
and Lender have caused this Amendment to be properly executed by their
respective duly authorized representatives as of the date first above
written.

     

    PLEASE BE ADVISED THAT ORAL
AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT ARE UNENFORCEABLE UNDER WASHINGTON
LAW.

     

    


     

    [Signatures
on following pages]

     

    



    
      
         


      

      
        4

        
          

        

      

      
         


      

    


    IN WITNESS WHEREOF, Borrower
and Lender have caused this Amendment to be properly executed by their
respective duly authorized representatives as of the date first above
written.

    


    


    CAPMARK BANK, a Utah
industrial bank

    


    


    By:           _/s/
Malana C. Bryant____(Seal)

    Name:                      ___
Malana C. Bryant _________

    Its:           ____Authorized
Signer_________

    



    
      
         


      

      
        5

        
          

        

      

      
         


      

    


    


    FRETUS Investors El Paso LP, a
Delaware limited partnership

    


    By:           Village
Oaks Cielo Vista Investors LLC, a Delaware limited liability
company

    Its:           General
Partner

    


    By:           FRETUS
Investors LLC, a Washington limited liability company

    Its:           Managing
Member

    


    By:           Emeritus
Corporation, a Washington corporation

    Its:           Administrative
Member

    


    


    


    By:           /s/
Eric Mendelsohn

    Eric Mendelsohn

    Its:           Senior Vice President Corporate
Development

    



    
      
         


      

      
        6

        
          

        

      

      
         


      

    


    SCHEDULE
A

    


    [List of
Borrowers Being Released]

    


    


    
      	
              Fretus
      Investors Houston LLC (Champion Oaks Facility)

            
	
              Fretus
      Investors Greenwood LLC (Greenwood Facility)

            
	
              Fretus
      Investors San Antonio LLC (Woodbridge Estates Facility)

            
	
              Fretus
      Investors Indianapolis LLC (Meridian Oaks Facility).

               

            
	 
      
	 
      
	 
      
	 
      
	 
      
	 
      
	 
      
	 
      
	 
      
	 
      
	 
      
	 
      
	 
      
	 
      


    

    


    


    



    
      
         


      

      
        7