EXHIBIT 10.32
AMENDMENT NO. 1
TO
LOAN AGREEMENT
THIS AMENDMENT NO. 1 (this "Amendment") is entered into as of March 8,
2004, by and among THE ENTITIES LISTED ON THE SIGNATURE PAGE HERETO
(collectively as "BORROWER"), COLUMN FINANCIAL, INC. ("COLUMN"), CAPITALSOURCE
FINANCE LLC, as successor-in-interest with respect to a portion of the Debt
referred to herein ("CAPITALSOURCE") (Column and CapitalSource hereafter,
"LENDER"), SKILLED HEALTHCARE GROUP, INC. (formerly known as Fountain View,
Inc.) (as "GUARANTOR").
BACKGROUND
Borrower and Column entered into a Loan Agreement dated as of August 19,
2003 (as amended, restated, supplemented or otherwise modified from time to
time, the "LOAN AGREEMENT") pursuant to which Lender provided Borrower with
certain financial accommodations. The obligations of Borrower to repay the Debt
incurred under the Loan Agreement are evidenced by Promissory Note A and
Promissory Note B, as such terms are defined in the Loan Agreement.
Column, as the initial holder of both Promissory Note A and Promissory
Note B under the Loan Agreement, entered into an Agreement Among Noteholders
(the "NOTEHOLDERS AGREEMENT"), with CapitalSource, as agent on behalf of the
"Initial Note B Holders" and with each of CapitalSource and other lenders (such
other lenders, the "FORMER LENDERS"), pursuant to which CapitalSource and the
Former Lenders purchased from Column Promissory Note B-1, Promissory Note B-2
and Promissory Note B-3, which collectively comprised Promissory Note B.
The Loan Agreement provides, in Section 2.4.1 thereof, that Borrower has
the right to prepay Promissory Note B, in whole or in part, at any time without
premium or penalty. Paragraph 4 of the Noteholders Agreement provides that any
payments made by Guarantor on the "NOTE B GUARANTY" shall be applied exclusively
towards payment of amounts due and payable on Promissory Note B. In order to
reduce its liability under its Guaranty of the Debt, Guarantor has tendered to
Former Lenders an amount equal to the outstanding obligations of Borrower with
respect to that portion of the Debt held by the Former Lenders and evidenced by
Promissory Note B-2 and Promissory Note B-3 (hereafter, the "PREPAID NOTES").
Financing for the Prepaid Notes was provided by CapitalSource to Borrower.
Contemporaneous with the financing of the Prepaid Notes, Borrower issued and
delivered to CapitalSource an Amended and Restated Promissory Note B in the form
annexed hereto as Exhibit A (the "RESTATED NOTE"). The parties hereto have
agreed to amend the Loan Agreement to, inter alia, (a) clarify that the Restated
Note hereafter constitutes the "PROMISSORY NOTE B" as defined therein and (b)
reduce the interest rate payable thereunder with respect to Promissory Note B.
NOW, THEREFORE, in consideration of any loan or advance or grant of credit
heretofore or hereafter made to or for the account of Borrower by Lender, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions. All capitalized terms not otherwise defined herein
shall have the meanings given to them in the Loan Agreement.
2. Amendments to Loan Agreement. Subject to satisfaction of the
conditions precedent set forth in Section 3 below, the Loan Agreement is hereby
amended as follows:
(a) References to each of the Former Lenders appearing in the
first introductory paragraph of the Loan Agreement are deleted in their
entireties.
(b) The definitions of "Promissory Note B" and "Spread" appearing
in Section 1.1 of the Loan Agreement are amended and restated in their
entireties to read as follows:
"Promissory Note B" shall mean that certain Amended and
Restated Promissory Note B, dated as of March 8,2004, in the
principal amount of Ten Million Dollars ($10,000,000) made by
Borrower in favor of CapitalSource Finance LLC, as the same
may be amended, restated, replaced, supplemented or otherwise
modified from time to time."
"Spread" shall mean four and one-half percent (4.50%) with
respect to Promissory Note A and fifteen percent (15%) with
respect to Promissory Note B.
(c) The definitions of "Promissory Note B-1", "Promissory Note
B-2" and "Promissory Note B-3" appearing in Section 1.1 of the Loan Agreement
are deleted in their entireties.
3. Conditions of Effectiveness. This Amendment shall become effective
upon satisfaction of the following conditions precedent: Agent shall have
received (i) four (4) copies of this Amendment executed by Borrower, Guarantor,
CapitalSource and Column and (ii) and such other certificates, instruments,
documents, agreements and opinions of counsel as may be required by Agent or its
counsel, each of which shall be in form and substance satisfactory to Agent and
its counsel.
4. Representations and Warranties. Each Borrower hereby represents and
warrants as follows:
(a) This Amendment and the Loan Agreement, as amended hereby,
constitute legal, valid and binding obligations of Borrower and are enforceable
against Borrower in accordance with their respective terms.
(b) Upon the effectiveness of this Amendment, each Borrower hereby
reaffirms all covenants, representations and warranties made in the Loan
Agreement to the extent
2
the same are not amended hereby and agree that all such covenants,
representations and warranties shall be deemed to have been remade as of the
effective date of this Amendment.
(c) No Event of Default or Default has occurred and is continuing
or would exist after giving effect to this Amendment.
(d) No Borrower has any defense, counterclaim or offset with
respect to the Loan Agreement.
5. Effect on the Loan Agreement.
(a) Upon the effectiveness of Section 2 hereof, each reference in
the Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" or words
of like import shall mean and be a reference to the Loan Agreement as amended
hereby.
(b) Except as specifically amended herein, the Loan Agreement, and
all other documents, instruments and agreements executed and/or delivered in
connection therewith, shall remain in full force and effect, and are hereby
ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any right, power or remedy of Agent or Lender,
nor constitute a waiver of any provision of the Loan Agreement, or any other
documents, instruments or agreements executed and/or delivered under or in
connection therewith.
6. Certification Regarding Prepaid Notes. Each of Borrower, Guarantor
and CapitalSource hereby certifies to Column that all of the obligations of
Borrower with respect to the Prepaid Notes have been satisfied in full and that
the Former Lenders have no further rights under the Loan Agreement or the Loan
Documents.
7. Reaffirmation of Guaranty. By its signature below, Guarantor hereby
reaffirms its guaranty of the Guaranteed Obligations, as such term is defined in
that certain B Note Guaranty Agreement dated as of August 19, 2003, which
Guaranty remains in full force and effect in accordance with its original terms,
except that all references therein to "Note B-1", "Note B-2" and/or "Note B-3"
shall hereafter be deemed to refer to "Promissory Note B", as defined herein.
8. Governing Law. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns and
shall be governed by and construed in accordance with the laws of the State of
New York.
9. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
10. Counterparts; Facsimile. This Amendment may be executed by the
parties hereto in one or more counterparts, each of which shall be deemed an
original and all of which when taken together shall constitute one and the same
agreement. Any signature delivered by a party by facsimile transmission shall be
deemed to be an original signature hereto.
3
IN WITNESS WHEREOF, this Amendment has been duly executed as of the day
and year first written above.
BRIAFCLIFF NURSING AND
REHABILITATION CENTER, LP
By: Briarcliff Nursing and Rehabilitation
Center GP, LLC, its general partner
CALIFORNIA SECURED RESOURCES, LLC
CAREHOUSE HEALTHCARE CENTER, LLC
CLAIRMONT BEAUMONT, LP
By: Clairmont Beaumont GP, LLC, its
general partner
CLAIRMONT LONGVIEW, LP
By: Clairmont Beaumont GP, LLC, its
general partner
COLONIAL NEW BRAUNFELS CARE
CENTER, LP
By: Colonial New Braunfels GP, LLC, its
general partner
COLONIAL TYLER CARE CENTER, LP
By: Colonial Tyler GP, LLC, its general
partner
COMANCHE NURSING CENTER, LP
By: Comanche Nursing Center GP, LLC, its
general partner
CORONADO NURSING CENTER, LP
By: Coronado Nursing Center GP, LLC, its
general partner
DEVONSHIRE CARE CENTER, LLC
FLATONIA OAK MANOR, LP
By: Flatonia Oak Manor GP, LLC, its
general partner
FOUNTAIN CARE CENTER, LLC
FOUNTAIN SENIOR ASSISTED LIVING, LLC
GUADALUPE VALLEY NURSING CENTER, LP
By: Guadalupe Valley Nursing Center GP,
LLC, its general partner
HALLETTSVILLE REHABILITATION AND NURSING
CENTER, LP
By: Hallettsville Rehabilitation GP, LLC,
its general partner
HOSPITALITY NURSING AND
REHABILITATION CENTER, LP
By: Hospitality Nursing GP, LLC, its
general partner
LIVE OAK NURSING CENTER, LP
By: Live Oak Nursing Center, GP, LLC, its
general partner
MONUMENT REHABILITATION AND
NURSING CENTER, LP
By: Monument Rehabilitation GP, LLC, its
general partner
OAK CREST NURSING CENTER, LP
By: Oak Crest Nursing Center GP, LLC, its
general partner
OAKLAND MANOR NURSING CENTER, LP
By: Oakland Manor GP, LLC, its general
partner
SHG SECURED RESOURCES, LP
By: Secured Resource Management GP, LLC
its general partner
SOUTHWOOD CARE CENTER, LP
By: Southwood Care Center GP, LLC, its
general partner
SPRING SENIOR ASSISTED LIVING, LLC
TEXAS CITYVIEW CARE CENTER, LP
By: Texas Cityview Care Center GP, LLC
its general partner
TEXAS HERITAGE OAKS NURSING AND
REHABILITATION CENTER, LP
By: Texas Heritage Oaks Nursing and
Rehabilitation Center GP, LLC, its
general partner
TEXAS SECURED RESOURCES, LLC
THE CLAIRMONT TYLER, LP
By: The Clairmont Tyler GP, LLC, its
general partner
THE EARLWOOD, LLC
TOWN AND COUNTRY MANOR, LP
By: Town and Country Manor GP, LLC, its
general partner
VALLEY HEALTHCARE CENTER, LLC
VILLA MARIA HEALTHCARE CENTER, LLC
WEST SIDE CAMPUS OF CARE, LP
By: West Side Campus of Care GP, LLC, its
general partner
WILLOW CREEK HEALTHCARE CENTER, LLC
By: /s/ JOHN HARRISON
-------------------------------------
Name: JOHN HARRISON
Title: CFO of each of the foregoing
entities
COLUMN FINANCIAL, INC.
By: _____________________________________
Name: ___________________________________
Title: __________________________________
CAPITALSOURCE FINANCE LLC
By: _____________________________________
Name: James J. Pieczynski
Title: Director
ACKNOWLEDGED AND AGREED:
SKILLED HEALTHCARE GROUP, INC.
By: /s/ JOHN HARRISON
-------------------------------------
Name: JOHN HARRISON
Title: CFO
WILLOW CREEK HEALTHCARE CENTER, LLC
By: _____________________________________
Name: ___________________________________
Title: _______________ of each of the
foregoing entities
COLUMN FINANCIAL, INC.
BY: /s/ EDMUND TAYLOR
-------------------------------------
Name: EDMUND TAYLOR
Title: Vice President
CAPITALSOURCE FINANCE LLC
By: _____________________________________
Name: James J. Pieczynski
Title: Director
ACKNOWLEDGED AND AGREED:
SKILLED HEALTHCARE GROUP, INC.
By: _____________________________________
Name: ___________________________________
Title: __________________________________
WILLOW CREEK HEALTHCARE CENTER, LLC
By: _____________________________________
Name: ___________________________________
Title: _______________ of each of the
foregoing entities
COLUMN FINANCIAL, INC.
By: _____________________________________
Name: ___________________________________
Title: __________________________________
CAPITALSOURCE FINANCE LLC
BY: /s/ James J. Pieczynski
-------------------------------------
Names: James J. Pieczynski
Title: Director
ACKNOWLEDGED AND AGREED:
SKILLED HEALTHCARE GROUP, INC.
By: _____________________________________
Name: ___________________________________
Title: __________________________________