Exhibit 10.3
SKILLED HEALTHCARE GROUP, INC.
INSTRUMENT OF JOINDER
This Instrument of Joinder (this "AGREEMENT") dated as of May 11, 2007 is
entered into by and between Skilled Healthcare Group, Inc. (formerly known as
SHG Holding Solutions, Inc.), a Delaware corporation ("COMPANY"), Bank of
America, N.A. ("BOA") and UBS Loan Finance LLC ("UBS" and together with BOA,
each a "NEW LENDER" and, collectively, the "NEW LENDERS") and Credit Suisse,
Cayman Islands Branch, as Administrative Agent (in such capacity,
"ADMINISTRATIVE AGENT") pursuant to that certain Second Amended and Restated
First Lien Credit Agreement dated as of December 27, 2005 and entered into by
and among the Company, the financial institutions party thereto (the "EXISTING
LENDERS" and together with the New Lenders, the "LENDERS") and the
Administrative Agent and Collateral Agent (said Credit Agreement, as amended,
supplemented, restated or otherwise modified from time to time, being the
"CREDIT AGREEMENT"). Capitalized terms used herein without definition shall have
the same meanings herein as set forth in the Credit Agreement.
1. Pursuant to subsection 2.1 A(iv) of the Credit Agreement, each New
Lender desires to become a Lender under the terms of the Credit Agreement.
Accordingly, each New Lender hereby acknowledges, agrees and confirms that, by
its execution of this Agreement, the New Lender will be deemed to be a party to
the Credit Agreement and a "Lender" for all purposes of the Credit Agreement and
the other Loan Documents, and shall have all of the rights and obligations of a
Lender thereunder as fully as if it had executed the Credit Agreement and the
other Loan Documents. The New Lender hereby ratifies, as of the date hereof, and
agrees to be bound by, all of the terms, provisions and conditions contained in
the Credit Agreement and in the Loan Documents which are binding upon the
Lenders, including, without limitation, all of the authorizations of the Lenders
set forth in Section 9 of the Credit Agreement, as supplemented from time to
time in accordance with the terms thereof.
2. The Administrative Agent confirms that immediately upon the
effectiveness of this Agreement, the New Lender shall become a Lender under the
Credit Agreement.
3. Each New Lender's portion of the Revolving Loan Commitments shall be as
set forth on Schedule A annexed hereto.
4. The New Lender (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this
Agreement and to consummate the transactions contemplated hereby and to become a
Lender under the Credit Agreement; (ii) it meets all of the requirements of an
Eligible Assignee under the Credit Agreement; (iii) from and after the date
hereof, it shall be bound by the provisions of the Credit Agreement and, to the
extent of its Pro Rata Share of the Commitments, shall have the rights and
obligations of a Lender thereunder; (iv) it has received a copy of the Credit
Agreement and the Schedules and Exhibits thereto, together with copies of the
most recent financial statements delivered pursuant to subsection 6.1(i)
thereof, and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Agreement on the
basis of which it has made such analysis and decision; and (v) if it is a Non-US
Lender, attached hereto is any documentation required to be delivered by it
pursuant to the terms of the
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Credit Agreement, duly completed and executed by the New Lender; and (b) agrees
that (1) it will, independently and without reliance on the Administrative Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents; and (2) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.
5. The undersigned officer of the Company hereby represents, warrants and
agrees as follows:
a. The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true, correct and complete in all
material respects on and as of the date hereof to the same extent as though made
on and as of the date hereof, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties were true, correct and complete in all material
respects on and as of such earlier date.
b. No event has occurred and is continuing or would result from the
consummation of the increase in the Revolving Loan Commitments that constitutes
or would constitute an Event of Default or a Potential Event of Default.
c. The Company and its Subsidiaries are in Pro Forma Compliance with
each of the financial covenants contained in subsection 7.6.
6. The Company hereby accepts the Revolving Loan Commitments of each New
Lender as set forth on Schedule A attached hereto (the "NEW REVOLVING LOAN
COMMITMENTS") and hereby notifies the Administrative Agent that the aggregate
principal amount of the Revolving Loan Commitments are hereby increased pursuant
to subsection 2.1A(iv) of the Credit Agreement by the amount of the New
Revolving Loan Commitments.
7. The Company agrees that at any time and from time to time, upon the
written request of the Administrative Agent, it will execute and deliver such
further documents and instruments and take such further actions as the
Administrative Agent may reasonably request in connection with the increase in
the Revolving Commitments pursuant to this Agreement.
8. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute one contract. Provided that Requisite Lenders have not notified the
Administrative Agent by 5:00 P.M., New York City time, on Friday, May 11, 2007,
that the amount of any increase in the Revolving Loan Commitments pursuant to
subsection 2.1A(iv) of the Credit Agreement shall not be less than $30,000,000,
this Agreement shall become effective upon execution by all of the parties
hereto.
9. Upon effectiveness of this Agreement, the Commitments and Pro Rata
Shares of each Lender will be adjusted to give effect to the increase in the
Revolving Loan Commitments, effected hereby as of the date of this Agreement.
10. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of New York.
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11. The New Lender agrees that at any time and from time to time, upon the
written request of the Administrative Agent, it will execute and deliver such
further documents and do such further acts and things as the Administrative
Agent may reasonably request in order to effect the purposes of this Agreement.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the Company, Administrative Agent and the New Lenders
have caused this Agreement to be duly executed by their respective authorized
officers, as of the day and year first above written.
COMPANY SKILLED HEALTHCARE GROUP, INC.
By: /s/ Roland Rapp
----------------------------
Name: Roland Rapp
Title: CAO/Secretary
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ADMINISTRATIVE AGENT: CREDIT SUISSE, CAYMAN ISLANDS
BRANCH, as Administrative Agent
By: /s/ Vanessa Gomez
-----------------------------
Name: Vanessa Gomez
Title: Vice President
By: /s/ Ranka Mohan
-----------------------------
Name: Ranka Mohan
Title: Vice President
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NEW LENDER: Bank of America, N.A., as New Lender
By: /s/ Jill J. Hogan
------------------------------
Name: Jill J. Hogan
Title: Vice President
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NEW LENDER: UBS LOAN FINANCE LLC, as New Lender
By: /s/ Richard L. Tavrow
-------------------------------
Name: Richard L. Tavrow
Title: Director
By: /s/ Mary E. Evans
------------------------------
Name: Mary E. Evans
Title: Associate Director
S-4
SCHEDULE A
NEW LENDER'S
AMOUNT OF PERCENTAGE OF
COMMITMENT/LOANS AGGREGATE AMOUNT OF
NEW LENDER FACILITY FOR NEW LENDER COMMITMENT/LOAN
- ---------------------- -------------- ------------------ --------------------
Bank of America, N. A. Revolving Loan $12,500,000 12.5%
Facility
NEW LENDER'S
AMOUNT OF PERCENTAGE OF
COMMITMENT/LOANS AGGREGATE AMOUNT OF
NEW LENDER FACILITY FOR NEW LENDER COMMITMENT/LOAN
- ---------------------- -------------- ------------------ --------------------
UBS Loan Finance LLC Revolving Loan $12,500,000 12.5%
Facility
Schedule A-1