SECOND AMENDMENT TO
SECOND AMENDED AND RESTATED
FIRST LIEN CREDIT AGREEMENT
This SECOND AMENDMENT TO SECOND
AMENDED AND RESTATED FIRST LIEN CREDIT AGREEMENT (this “
Amendment ”) is dated as of April 28, 2009 and
entered into by and among SKILLED HEALTHCARE GROUP, INC.
(formerly known as SHG Holding Solutions, Inc.), a Delaware
corporation (“ Company ”), THE REVOLVING
LENDERS LISTED ON THE SIGNATURE PAGES HEREOF (“
Revolving Lenders ”), and CREDIT SUISSE, CAYMAN
ISLANDS BRANCH , as Administrative Agent (in such capacity,
“ Administrative Agent ”) and Collateral Agent
(in such capacity, “ Collateral Agent ”), and,
for purposes of Section 5 hereof, CERTAIN
SUBSIDIARIES OF COMPANY LISTED ON THE SIGNATURE PAGES HEREOF
(“ Credit Support Parties ”), and is made with
reference to that certain Second Amended and Restated First Lien
Credit Agreement dated as of December 27, 2005, by and among
Skilled Healthcare Group, Inc. (formerly known as Fountain View,
Inc.), SHG Holding Solutions, Inc., the lenders listed party
thereto, Administrative Agent and Collateral Agent, as amended by
that certain First Amendment to Second Amended and Restated First
Lien Credit Agreement dated as of January 31, 2007 (as so
amended and as it may have been amended, supplemented or otherwise
modified to the date hereof, the “ Credit Agreement
”). Capitalized terms used herein without definition shall
have the same meanings herein as set forth in the Credit
Agreement.
RECITALS
WHEREAS , Company and each
Revolving Lender identified on the signature pages hereof as an
Extending Revolving Lender (such Revolving Lenders, the “
Extending Revolving Lenders ”) desire to amend the
Credit Agreement to extend the Revolving Loan Commitment
Termination Date of such Extending Revolving Lenders as provided
herein and the other Revolving Lender identified on the signature
pages hereof as a Non-Extending Revolving Lender (such Revolving
Lender, the “ Non-Extending Revolving Lender ”)
desires to enter into this Second Amendment.
NOW, THEREFORE , in
consideration of the premises and the agreements, provisions and
covenants herein contained, the parties hereto agree as
follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
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1.1
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Amendments to Subsection 1.1:
Definitions .
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A. Subsection 1.1 of the
Credit Agreement is hereby amended by adding thereto the following
definitions, which shall be inserted in proper alphabetical
order:
“ Non-Extended Revolving
Commitment ” means any Revolving Loan Commitments of the
Non-Extending Revolving Lender (as defined in the Second Amendment)
and its assigns that have not been extended to June 15, 2012
after the Second Amendment Effective Date as contemplated by the
Second Amendment and clause (i) of the definition of Revolving
Loan Commitment Extension Date, it being understood that the amount
of the Non-Extended Revolving Loan Commitments is $11,000,000 as of
the Second Amendment Effective Date and the Non-Extended Revolving
Loan Commitments shall be reduced following the Second Amendment
Effective Date to the extent that any assignee of such Non-Extended
Revolving Loan Commitments delivers to the Company and the
Administrative Agent a written agreement reasonably satisfactory to
the Company and the Administrative Agent extending such Commitments
to June 15, 2012.
“ Revolving Loan Commitment
Extension Date ” means the earlier of (i) the first
Business Day prior to June 15, 2010 on which all of the
Non-Extended Revolving Loan Commitments have been extended to
June 15, 2012 pursuant to written agreements delivered and
reasonably satisfactory to the Company and the Administrative
Agent, or (ii) in the event that the Non-Extending Revolving
Lender Assignment and related Revolving Loan Commitment reduction
occurs on June 15, 2010 as contemplated by Section 2 of
the Second Amendment and no Event of Default has occurred and is
continuing as of such date, June 15, 2010.
“ Second Amendment
” means that certain Second Amendment to this Agreement dated
as of April 28, 2009 by and among the Company, the Revolving
Lenders party thereto, Administrative Agent, Collateral Agent and,
for purposes of Section 5 thereof only, certain Subsidiaries
of the Company listed on the signature pages thereto.
“ Second Amendment Effective
Date ” means the date on which the Second Amendment
becomes effective in accordance with its terms.
B. Subsection 1.1 of the
Credit Agreement is hereby amended by deleting the definition of
“Revolving Loan Commitment Termination Date” therein
and replacing it with the following:
“ Revolving Loan Commitment
Termination Date ” means (i) prior to the Revolving
Loan Commitment Extension Date, June 15, 2010, and
(ii) on and after the Revolving Loan Commitment Extension
Date, June 15, 2012; provided however, solely for the purpose
of Section 3 herein, as of and after the Second Amendment
Effective Date, the Revolving Loan Commitment Termination Date
shall be June 15, 2012.
SECTION 2. ASSIGNMENT AND CONCURRENT VOLUNTARY REDUCTION OF
REVOLVING LOAN COMMITMENT AMOUNT OF NON-EXTENDING REVOLVING
LENDER
A. Assignment .
In the event that as of June 15, 2010, the Revolving Loan
Commitment Extension Date has not occurred as contemplated by
clause (i) of the definition thereof, the total utilization of
the Revolving Loan Commitments is not greater than the Revolving
Loan Commitments of all Extending Revolving Lenders, and no Event
of Default has occurred and is continuing as of June 15, 2010, all
Revolving Lenders holding Non-Extended Revolving Loan Commitments
(such Lender(s), the “ Assigning Lender ”) shall
be deemed to have irrevocably sold and assigned to each Extending
Revolving Lender, and each such Extending Revolving Lender shall be
deemed to have irrevocably purchased and assumed on a pro rata
basis from such Revolving Lenders all of such Revolving Lender(s)
rights and obligations under the Credit Agreement with respect to
the Non-Extended Revolving Loan Commitments and related Assigned
Interest (as defined and set forth in the form of Assignment and
Assumption attached as Exhibit A hereto) (such assignment
shall be referred to herein as the “ Non-Extending
Revolving Lender Assignment ”), it being understood that
the Non-Extending Revolving Lender Assignment shall constitute an
assignment of the Non-Extended Revolving Loan Commitments in the
aggregate as of June 15, 2010, that each Extending Revolving
Lender shall acquire a ratable portion of the Assigned Interest in
proportion to the Revolving Loan Exposure of that Extending
Revolving Lender as compared with the Revolving Loan Exposure of
all Extending Revolving Lenders as further set forth in the
Non-Extending Revolving Lender Assignment and that any such
Assigning Lender and Extending Revolving Lender shall complete and
execute a Non-Extending Revolving Lender Assignment in the event
the Non-Extending Revolving Lender Assignment occurs. For purpose
of this paragraph, “ Extending Revolving Lender
” means each of the Extending Revolving Lenders (as defined
in the Recitals of this Second Amendment), any Revolving Lender
that has agreed to extend any part of the Non-Extending Revolving
Loan Commitments as contemplated by the Second Amendment and clause
(i) of the definition of Revolving Loan Commitment Extension
Date and their respective assigns.
B. Reduction of Revolving
Loan Commitment Amount . The Company and the other parties
hereto acknowledge and agree that concurrently with the making of
the Non-Extending Revolving Lender Assignment on June 15,
2010, pursuant to Section 2.4B(ii) of the Credit Agreement,
the Revolving Loan Commitment Amount under the Credit Agreement
shall be permanently and irrevocably reduced by the amount of the
Non-Extending Revolving Loan Commitments on June 15, 2010 and
shall reduce the amount of the Revolving Loan Commitment of each
Revolving Lender proportionately to its Pro Rata Share. The
Revolving Loan Commitment reduction set forth in this
Section 2(B) shall be irrevocable.
SECTION 3. CONDITIONS TO EFFECTIVENESS
Section 1 and
Section 2 of this Amendment shall become effective only
upon the satisfaction of the following conditions precedent (the
date such conditions are fulfilled is hereafter referred to as the
“ Second Amendment Effective Date ”):
A. Corporate Documents .
On or before the Second Amendment Effective Date, Company shall,
and shall cause each Credit Support Party to, deliver to Revolving
Lenders (or to Administrative Agent with sufficient originally
executed copies, where appropriate, for each Revolving Lender and
its counsel), with respect to Company or such Credit Support Party,
as the case may be, the following:
(i) a
Secretary’s Certificate of the Company (executed by its
corporate secretary or assistant secretary), in form and substance
reasonably satisfactory to Administrative Agent and dated the
Second Amendment Effective Date, (a) certifying (i) that
the Organizational Documents of Company attached thereto are true,
correct and complete copies and in full force and effect as of the
Second Amendment Effective Date and (ii) as to the signature
and incumbency of the officers of Company and (b) certifying,
as being in full force and effect without modification or
amendment, and attaching the resolutions of the Governing Body of
Company approving and authorizing the execution, delivery, and
performance of this Amendment and the performance of the Amended
Agreement (as defined below); and
(ii) a
Secretary’s Certificate or Secretary’s Certificates of
each Credit Support Party (executed by its corporate secretary or
assistant secretary), as applicable, in form and substance
reasonably satisfactory to Administrative Agent and dated the
Second Amendment Effective Date, (a) certifying (i) that
the Organizational Documents of each Credit Support Party
previously delivered to the Administrative Agent in connection with
the Credit Agreement, the Existing First Lien Credit Agreement or
otherwise, as applicable, are in full force and effect as of the
Second Amendment Effective Date and have not been amended,
restated, supplemented or otherwise modified in any respect since
the date of such delivery, and (ii) as to the signature and
incumbency of the officers of each Credit Support Party and
(b) certifying, as being in full force and effect without
modification or amendment, and attaching the resolutions of the
Governing Body of each Credit Support Party approving and
authorizing the execution, delivery, and performance of this
Amendment and the performance of the Amended Agreement.
B. Amendment .
Administrative Agent shall have executed this Amendment and
received a counterpart of this Amendment that bears the signature
of Company, each of the Lenders with Revolving Loan Exposure and
each of the Credit Support Parties.
C. Assignment . On or
prior to the Second Amendment Effective Date, CapitalSource Finance
LLC and Barclays Bank PLC (“ Barclays ”) shall
have entered into an Assignment Agreement whereby Capital Source
shall have assigned $10,000,000 of its Revolving Loan Commitments
to Barclays on the terms and conditions described therein, such
assignment shall be effective on or prior to the Second Amendment
Effective Date and Barclays shall have executed the Second
Amendment as a Extending Revolving Lender.
D. Opinion of Counsel .
On or before the Second Amendment Effective Date, Company shall
have delivered to Revolving Lenders (or to Administrative Agent
with sufficient originally executed copies, where appropriate, for
each Revolving Lender and its counsel) originally executed copies
of one or more favorable written opinions of Latham &
Watkins LLP, special counsel for Loan Parties, in form and
substance reasonably satisfactory to Administrative Agent and its
counsel, dated as of the Second Amendment Effective Date, with
respect to the enforceability of this Amendment and the Amended
Agreement, and as to such other matters as Administrative Agent
acting on behalf of Revolving Lenders may reasonably request.
E. Amendment Fee .
Company shall have paid to Administrative Agent for the ratable
benefit of each Extending Revolving Lender with Revolving Loan
Exposure that shall have executed this Amendment on or prior to
5:00 PM New York City time on Tuesday, April 28, 2009 an
amendment fee equal to a percentage of the Revolving Loan Exposure
of all Extending Revolving Lenders as agreed by Company and
Administrative Agent and communicated to each Lender with Revolving
Loan Exposure.
F. Other Fees and
Expenses . Company shall have paid all other fees and expenses
due in connection with this Amendment and that certain engagement
letter (the “ Engagement Letter ”) between
Company, Credit Suisse Securities (USA) LLC and Banc of
America Securities LLC.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce Revolving Lenders
and Administrative Agent to enter into this Amendment and to amend
the Credit Agreement in the manner provided herein, Company
represents and warrants to each Lender and Administrative Agent
that the following statements are true, correct and complete as of
the Second Amendment Effective Date:
A. Corporate Power and
Authority . Company has all requisite corporate power and
authority to enter into this Amendment and to carry out the
transactions contemplated by, and perform its obligations under,
this Amendment and the Credit Agreement as amended by this
Amendment (the “ Amended Agreement ”).
B. Authorization of
Ag
