Brookdale Senior Living (the Company) disclosed earlier this week in conjunction with its secondary public offering that the company entered into the First Amendment to the Second Amended and Restated Credit Agreement (the “First Amendment”), where the maximum revolving loans that can be outstanding at any time under the Second Amended and Restated Credit Agreement will be reduced to $75 million. This agreement gives Brookdale greater flexibility to make acquisitions by increasing aggregate permitted cash consideration from $10 million to $100 million, to make capital expenditures up to $30 million per quarter and to incur an additional $20 million in liens and letters of credit.
Additionally, the First Amendment eliminates the requirements that Fortress Investment Group LLC (“Fortress”) and certain of its affiliates maintain at least 40% ownership of the Company’s common stock and a majority of the voting power for the election of directors. The First Amendment modifies the definition of Change of Control to mean the occurrence of either of the following events: (a) the acquisition of beneficial ownership by any person or group (other than Fortress and certain of its affiliates, and certain employee benefits plans and their administrators) of 35% or more of the combined voting power of the voting stock of the Company on a fully diluted basis or (b) the board of directors of the Company shall cease to consist of a majority of the current directors or their approved replacements. The effectiveness of the First Amendment is conditioned primarily upon the closing of the public offering and the repayment of all outstanding loans (which may then be re-borrowed up to a maximum of $75 million, inclusive of any outstanding letters of credit) on or before June 10, 2009.
For the full filing, click here.