Document:

EX-10.53

 Exhibit 10.53 

SECOND SUPPLEMENT TO ADVANCES, COLLATERAL PLEDGE 

AND SECURITY AGREEMENT—ADDITIONAL COVENANTS 

THIS SECOND SUPPLEMENT TO ADVANCES, COLLATERAL PLEDGE AND SECURITY AGREEMENT—ADDITIONAL COVENANTS (“Additional Covenants Supplement”), dated as
of February 19, 2015, is made by and among the FEDERAL HOME LOAN BANK OF CHICAGO, with its principal office located at 200 East Randolph Drive, Chicago, Illinois 60601 (“Bank”), RWT FINANCIAL, LLC, a Delaware limited liability company
authorized by the Delaware Insurance Commissioner as a special purpose captive insurance company pursuant to a Certificate of Authority dated April 24, 2014 (“Member”), organized under the laws of Delaware, and having its chief
executive office at 155 South Wacker Drive, Suite 4250, Chicago, Illinois 60606, and REDWOOD TRUST, INC., a corporation (“Company”) organized under the laws of Maryland, and having its chief executive office at One Belvedere Place, Suite
300, Mill Valley, California 94941. 
 WHEREAS, Company is the parent company of Member; and 

WHEREAS, Member and Bank have entered into an Advances, Collateral Pledge, and Security Agreement, dated July 16, 2014 (as supplemented and amended from
time to time, the “Agreement”), and Member, Company, and Bank have entered into a Supplement to Advances, Collateral Pledge, and Security Agreement-Financial Covenants, also dated July 16, 2014 (“Financial Covenants
Supplement”), each of which Agreement and Financial Covenants Supplement remain in full force and effect; and 
 WHEREAS, Company has guaranteed
payment of all of Member’s present and future obligations and liabilities of any kind to Bank pursuant to the Guaranty, dated July 16, 2014 (“Guaranty”), which Guaranty remains in full force and effect; 

WHEREAS, Company and Member acknowledge that they will benefit from Bank continuing to enter into transactions with Member pursuant to the Agreement; and 

WHEREAS, Company and Member acknowledge that certain additional covenants are hereby agreed to by Member and the Agreement shall be amended hereby to include
these additional covenants. 
 NOW THEREFORE, Company, Member and Bank agree as follows: 

Section 1.01. DEFINITIONS. Unless otherwise defined herein, terms defined in the Agreement or in the Financial Covenants Supplement will have such
defined meanings when used herein. Terms defined herein will have such meanings for purposes of this Additional Covenants Supplement. To the extent a term, as defined in this Additional Covenants Supplement, is used in the Agreement, the definition
in this Additional Covenants Supplement will control. 
 Section 2.01. ADDITIONAL COVENANTS. Member covenants and agrees that at any time Member has
any Indebtedness that remains unpaid, that: 
 (a) Assets maintained by Member for purposes of compliance with Section 5.01A(a)(ii) of
the Agreement and of the type identified in clauses (A), (B), and (C) of such Section 5.01A(a)(ii) that are eligible to satisfy the requirements of such Section 5.01A(a)(ii), shall be held (i) in the case of cash, in
Member’s DID Account, (ii) in the case of Securities, in a safekeeping account at the Bank, and (iii) in the case of Mortgage Loans, at an approved third-party custodian pursuant to a custodial control agreement satisfactory to the
Bank and executed by such Custodian, Member, and the Bank; 

 (b) Member shall not incur financial obligations to any third party greater than $500,000 without
the prior written consent of the Bank; provided that, Member shall be permitted to (i) incur intercompany indebtedness to its affiliates subordinate in right of payment to Indebtedness, (ii) commit to purchase residential mortgage
loans from its affiliates, (iii) incur ordinary course servicing-relating financial obligations in connection with the ownership of residential mortgage loans and mortgage servicing rights (including financial obligations to sub-servicers
retained to service such loans), and (iv) issue a Directors’ and Officers’ Liability Retention Buy Down Policy in favor of Company with an insurance limit of not more than $10,000,000; and 

(c) From and after the date of this Additional Covenants Supplement, each time Company incurs additional “Company Subordinated Debt”
(defined below), Company shall provide in writing to the Bank a certification that such Company Subordinated Debt is subordinate in right of payment to claims of all of its senior creditors, as well as subordinate in right of payment to the
obligations of Company to the Bank under the Guaranty. For purposes of this Section 3.01(c), “Company Subordinated Debt” shall mean recourse indebtedness of Company that is subordinate in right of payment to claims of all senior
creditors of Company. 
 Section 3.01 GENERAL REPRESENTATIONS AND WARRANTIES BY MEMBER. Member hereby represents, warrants and covenants that, as
of the date hereof and hereafter: 
 (a) Member is not, and neither the execution of nor performance of any obligations of Member under this
Additional Covenants Supplement shall, with the passage of time, the giving of notice or otherwise, cause Member to be in violation of its charter or articles of incorporation, by-laws, any applicable law or any material administrative regulation;
provided, however, that violation of such material administrative regulation shall not include any regulatory violation that does not adversely impact the ability of Member to perform its obligations under this Additional Covenants Supplement; 

(b) Member has full corporate power and authority and has received all corporate and governmental authorizations and approvals as may be
required to enter into and perform the obligations under this Additional Covenants Supplement; and 
 (c) The information given by Member in
any document provided in connection with its obligations under this Additional Covenants Supplement is true, accurate and does not contain a material misstatement. 

Section 3.02 MISCELLANEOUS. 
 (a) Company
acknowledges Member’s obligations as set forth in this Additional Covenants Supplement and agrees that such obligations are subject to the Guaranty. 

(b) The captions and headings in this Additional Covenants Supplement are for convenience only and shall not be considered as part of or
affect the construction or interpretation of any provision of this Additional Covenants Supplement. 
 (c) All representations, warranties,
and covenants by Member and Company contained in this Additional Covenants Supplement or made in writing in any certificate or other writing required to be delivered pursuant to the terms of this Additional Covenants Supplement, shall, at the time
made, be true, accurate and complete in all material respects. 
 (d) This Additional Covenants Supplement may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Additional Covenants Supplement by telecopy or other electronic
imaging means shall be effective as delivery of a manually executed counterpart of this Additional Covenants Supplement. 

*    *    * 

  
 -2- 

 IN WITNESS WHEREOF, Member, Company, and the Bank have caused this Additional Covenants Supplement to be signed
in their names by their duly authorized officers as of the date first above mentioned. 
  

									
	RWT FINANCIAL, LLC						
					
	By:		 /s/ Christopher Abate
						
					
	Title:		Chief Financial Officer				Member Number:		 03024-7

  

									
	REDWOOD TRUST, INC.						
					
	By:		 /s/ Christopher Abate
						
					
	Title:		Chief Financial Officer						
				
	FEDERAL HOME LOAN BANK OF CHICAGO						
					
	By:		 /s/ Agnes Hardison
				By: 		 /s/ Matthew Zimmerman

					
	Name:		Agnes Hardison				Name:		Matthew Zimmerman
	Title:		Senior Vice President				Title:		Vice President - Credit

  
 -3-Ex10.22.1

 

Exhibit 10.1.2

 

HCP, Inc.

1920 Main Street, Suite 1200

Irvine, CA 92614

Attention: General Counsel 

December 29, 2014

 

Re: First Amendment to Amended and Restated Master Lease and Security Agreement and Option Exercise Notice

 

Dear Sir or Madam: 

 

Reference is made to that certain Amended and Restated Master Lease and Security Agreement (the “NNN Lease”), dated as of August 29, 2014, by and among the Lessors identified therein  (“Lessors”), and Emeritus Corporation, Summerville at Hazel Creek, LLC, and Summerville at Prince William, Inc., as Lessees (each, a “Lessee”).  Capitalized terms used herein and not defined shall have the meanings ascribed to such terms in the NNN Lease.

 

Pursuant to Section 31.4 of the NNN Lease,  each Lessee has been granted a purchase option with respect to certain Facilities identified on Schedule 31.4 to the NNN Lease.  The parties hereto agree that this letter (this “Notice and Amendment”)  shall serve as the Option Exercise Notice as described in Section 31.4.1 of the NNN Lease.  

 

The parties hereto hereby agree that the NNN Lease shall be amended hereby to delete Schedule 31.4 and to insert in lieu thereof Schedule 1 attached hereto (as so amended, “Modified Schedule 31.4”).  In accordance with the terms of Section 31.4, the Lessees hereby notify you that (i) the Lessees have opened escrow with First American Title Company (“Escrow Agent”) by delivery of this letter, together with a copy of the NNN Lease, on December 30, 2014 and (ii) the Lessees hereby exercise their respective rights to acquire each of the nine (9) Facilities set forth on Modified Schedule 31.4 for an aggregate purchase price equal to $60,000,000.  The allocated purchase price and attendant rent reduction for each such Facility is set forth on Modified Schedule 31.4.    Lessors shall, as soon as reasonably practicable following the consummation of the transactions contemplated hereby, reallocate any rent currently allocated to the Facilities and not reduced pursuant to Modified Schedule 31.4 to the remaining Facilities in the NNN Lease, and shall notify Lessees of such reallocation in writing.  The parties hereto agree that the real property and FF&E allocations for each Facility shall be as set forth on Schedule 2 attached hereto. 

 

The parties hereto agree that,  provided no Event of Default arising as a result of the failure to pay Minimum Rent has occurred and is continuing hereunder, the consummation of the acquisition of the Facilities set forth on Modified Schedule 31.4 by the Lessees (or by any designee, at such Lessee’s written direction) shall occur, with respect to each such Facility, by release of the purchase price and transfer documents from escrow on December 31, 2014, with effect as of January 1, 2015.  Notwithstanding the foregoing, if all required regulatory approvals for any such Facility shall not have been obtained prior to December 31, 2014, the Lessees shall give notice thereof to Lessors prior to December 31, 2014, and the consummation of the acquisition 

 

of such Facility by the applicable Lessee (or its designee) shall occur on any date specified in a later notice given by the Lessees to Lessor not less than five (5) Business Days prior to such specified date, provided, however, that the consummation of the acquisition of such Facility shall in any event occur prior to the expiration of the NNN Lease term, including any applicable extensions thereto,  and if the consummation of the acquisition of such Facility does not occur by such date, the option for such facility referenced in this letter shall be deemed terminated.  The parties hereto agree that Section 31.4.4 of the NNN Lease is hereby deleted in its entirety.

 

As required by Section 31.4 of the NNN Lease, attached hereto as Exhibit A is a Reaffirmation of the Guaranty.  

 

As amended by this Notice and Amendment, the terms and provisions of the NNN Lease are hereby ratified and confirmed in all respects.    The parties hereto acknowledge, agree and reaffirm that (i) except as otherwise expressly provided in the NNN Lease (as hereby amended) to the contrary and for the limited purposes so provided, the NNN Lease (as hereby amended) is and the parties intend the same for all purposes to be treated as a single, integrated and indivisible agreement and economic unit, and (ii) except as otherwise required by Legal Requirements or any accounting rules or regulations, the NNN Lease (as hereby amended) shall be treated as an operating lease for all purposes and not as a synthetic lease, financing lease or loan, and Lessors shall be entitled to all the benefits of ownership of the Leased Property, including depreciation for all federal, state and local tax purposes.

 

[Remainder of page intentionally left blank]

 

 

2

 

Please confirm your agreement with the terms of this Notice and Amendment by executing this Notice and Amendment in the space provided below and returning the fully executed document to the undersigned.

 

Best, 

/s/ Todd Kaestner        

Todd Kaestner

Cc: 

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas 

New York, NY 10019-6064

Attention: Harris B. Freidus, Esq. and Salvatore Gogliormella, Esq.

 

Skadden, Arps, Slate, Meagher & Flom, LLP

155 N. Wacker Drive

Suite 2700

Chicago, IL 60606

Attention: Nancy Olson, Esq.

 

 

3

 

Acknowledged and Agreed by:

 

HCP, INC. 

 

 

 

By: /s/ Kendall K. Young_____

Name: Kendall K. Young______

Its: ___Executive Vice President

 

 

4

 

Schedule 1

Purchase Option Properties

	
Property

	
Purchase Price

	
Rent Reduction

	
Osprey Court, Emeritus at

	
[***]

	
[***]

	
Snohomish, Emeritus at

	
[***]

	
[***]

	
Hemet, Emeritus at

	
[***]

	
[***]

	
Lynnwood, Emeritus at

	
[***]

	
[***]

	
Stone Mountain

	
[***]

	
[***]

	
Eldorado Heights

	
[***]

	
[***]

	
Dry Creek

	
[***]

	
[***]

	
Heritage, Emeritus at The

	
[***]

	
[***]

	
Peachtree Village, Emeritus at

	
[***]

	
[***]

Portions of this exhibit that have been marked by [***] have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.

 

 

 

5

 

Schedule 2

Real Property and FF&E Allocations

	
Property

	
Purchase Price

	
Real Property Allocation

	
FF&E Allocation

	
Osprey Court, Emeritus at

	
[***]

	
[***]

	
[***]

	
Snohomish, Emeritus at

	
[***]

	
[***]

	
[***]

	
Hemet, Emeritus at

	
[***]

	
[***]

	
[***]

	
Lynnwood, Emeritus at

	
[***]

	
[***]

	
[***]

	
Stone Mountain

	
[***]

	
[***]

	
[***]

	
Eldorado Heights

	
[***]

	
[***]

	
[***]

	
Dry Creek

	
[***]

	
[***]

	
[***]

	
Heritage, Emeritus at The

	
[***]

	
[***]

	
[***]

	
Peachtree Village, Emeritus at

	
[***]

	
[***]

	
[***]

Portions of this exhibit that have been marked by [***] have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.

 

 

 

6

 

Exhibit A

 

Guaranty Reaffirmation

 

 

 

7

 

HCP, Inc.

1920 Main Street, Suite 1200

Irvine, CA 92614

Attention: General Counsel

December 29, 2014

Dear Sir or Madam:

Reference is made to that certain Amended and Restated Master Lease and Security Agreement (the “NNN Lease”), dated as of August 29, 2014, by and among the Lessors identified therein (“Lessors”), and Emeritus Corporation, Summerville at Hazel Creek, LLC, and Summerville at Prince William, Inc., as Lessees (each, a “Lessee”). Capitalized terms used herein and not defined shall have the meanings ascribed to such terms in the NNN Lease.

Pursuant to Section 31.4 of the NNN Lease, each Lessee has been granted a purchase option with respect to certain Facilities identified on Schedule 31.4 to the NNN Lease, as amended by that certain Notice and Amendment dated as of the date hereof (the “Notice and Amendment”). The Notice and Amendment served as the Option Exercise Notice as described in Section 31.4.1 of the NNN Lease.

Pursuant to the Notice and Amendment, Brookdale will acquire certain facilities from HCP effective as of January 1, 2015. Brookdale hereby notifies HCP that (i) the required regulatory approvals (the “Required Approvals”) for the Facility known as Emeritus at The Heritage (the “Heritage Facility”) will not be obtained on or prior to December 31, 2014 and (ii) Brookdale shall not acquire the Heritage Facility until such time as the Required Approvals are obtained. Pursuant to the terms of the Notice and Amendment, and notwithstanding the terms of  Section 34.1 of the NNN Lease, Brookdale will notify HCP by separate written notice, not less than five (5) business days prior to the proposed acquisition date for the Heritage Facility, which in any event shall not occur until the Required Approvals have been obtained, and the parties shall consummate the acquisition promptly following the delivery of such notice.

Best,

/s/ Todd Kaestner

Todd Kaestner

Cc:

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY 10019-6064

Attention: Harris B. Freidus, Esq. and Salvatore Gogliormella, Esq.

Skadden, Arps, Slate, Meagher & Flom, LLP

155 N. Wacker Drive

Suite 2700

Chicago, IL 60606

Attention: Nancy Olson, Esq.

 

Acknowledged and Agreed by:

 

HCP, INC.

 

By:/s/ Kendall K. Young

Name:Kendall K. Young

Its: Executive Vice President

 

2

 

GUARANTY REAFFIRMATION

 

This Guaranty Reaffirmation (this “Reaffirmation”) is made and entered into as of December 29, 2014, by Brookdale Senior Living Inc. as “Guarantor”  (“Guarantor”), in favor of each of the entities identified as a “Lessor” on Schedule I (each, a “Lessor”). 

 

RECITALS

 

	

	
1.Each Lessor is a “Lessor”, and each Lessee identified on Schedule I as such is a “Lessee” under that certain Amended and Restated Master Lease and Security Agreement, dated as of August 29, 2014, by and among the Lessors and Lessees (the “NNN Lease”). 

 

	

	
2.Guarantor has guaranteed Lessee’s obligations under NNN Lease pursuant to that certain Guaranty of Obligations dated as of August 29, 2014 (the “Original Guaranty”).

 

	

	
3.Pursuant to Section 31.4 of the NNN Lease, the Lessees have exercised their rights to acquire certain of the Facilities (as such term is defined in the NNN Lease) (the “Purchase Option”). 

 

	

	
4.As a condition to the effectiveness of Lessee’s exercise of the Purchase Option, Guarantor is required to reaffirm its obligations under the Original Guaranty, including with respect to Lessee’s payment and performance obligations in connection with the consummation of the transactions contemplated by the Purchase Option. 

 

AGREEMENT

 

NOW THEREFORE, in consideration of the foregoing Recitals and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor, intending to be legally bound, hereby agrees for the benefit of the Lessors as follows:

 

	

	
1.Reaffirmation. Guarantor hereby (i) reaffirms all of its obligations under the Original Guaranty, including with respect to Lessee’s payment and performance obligations in connection with the consummation of the transactions contemplated by the Purchase Option, (ii) ratifies and confirms that all of the terms, covenants, indemnifications and other provisions set forth in the Original Guaranty remain in full force and effect without impairment in any respect, and (iii) represents and warrants that it has full power, authority and legal right to execute and deliver this Reaffirmation. 

 

	

	
2.Fees and Costs. Guarantor shall promptly pay upon demand the out of pocket attorney’s fees and expenses incurred by Lessors and their affiliates in connection with this Reaffirmation. 

 

	

	
3.Electronic Signatures. Telecopied signatures or signatures delivered via electronic mail in portable document format (.pdf) may be used in place of original signatures on this 

 

 

Reaffirmation, and Lessees and Guarantor intend to be bound by the signatures of the telecopied or emailed document. 

 

[Signature Pages Follow]

 

 

 

2

 

IN WITNESS WHEREOF, Guarantor shall cause this Reaffirmation  to be executed as of the date first above written. 

 

GUARANTOR:

 

Brookdale Senior Living Inc., a Delaware corporation

 

 

By: /s/ H. Todd Kaestner__

Name: Todd Kaestner

Title: Executive Vice President—Corporate Development

 

 

[Signature Page to Guaranty Reaffirmation]

 

SCHEDULE I

Lessors and Lessees

 

Lessees:

Emeritus Corporation

Summerville at Hazel Creek, LLC

Summerville at Prince William, Inc.

 

Lessors:

HCP AUR1 California A Pack, LLC

HCP EMOH, LLC

HCP Hazel Creek, LLC

HCP MA2 California, LP

HCP MA2 Massachusetts, LP

HCP MA2 Ohio, LP

HCP MA2 Oklahoma, LP

HCP MA3 California, LP

HCP MA3 South Carolina, LP

HCP MA3 Washington, LP

HCP Partners, LP

HCP Senior Housing Properties Trust

HCP SH Eldorado Heights LLC

HCP SH ELP1 Properties, LLC

HCP SH ELP2 Properties, LLC

HCP SH ELP3 Properties, LLC

HCP SH Lassen House, LLC

HCP SH Mountain Laurel, LLC

HCP SH Mountain View, LLC

HCP SH River Valley Landing, LLC

HCP SH Sellwood Landing, LLC

HCP ST1 Colorado, LP

HCP, Inc. 

HCPI Trust

[Schedule I]

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