Amendment No. 7, dated as of September 12, 2019, to Term Loan Agreement by and among Genesis Healthcare, Inc., FC-GEN Operations Investment, LLC, GEN Operations I, LLC and GEN Operations II, LLC as borrowers, HCRI Tucson Properties, Inc. and OHI Mezz Lender, LLC as lenders and Welltower, Inc. as the administrative agent and collateral agent

EX-10.2 3 gen-20190930ex10233d46c.htm EX-10.2 Ex102

Exhibit 10.2

Execution Copy

AMENDMENT NO. 7 TO LOAN AGREEMENT

This Amendment No. 7 to Loan Agreement (this “Agreement”), dated as of September 12, 2019, is entered into by and among GENESIS HEALTHCARE, INC., a Delaware corporation (“Ultimate Parent”), FC-GEN OPERATIONS INVESTMENT, LLC, a Delaware limited liability company (the “Borrower”), GEN OPERATIONS I, LLC, a Delaware limited liability company (“Parent”), GEN OPERATIONS II, LLC, a Delaware limited liability company (“Holdings”, and together with Ultimate Parent, Borrower and Parent, “Amendment Parties”), each of the Lenders (as defined below) party hereto and WELLTOWER INC., as Administrative Agent (in such capacity, and together with its successors and permitted assigns, “Administrative Agent”).

WHEREAS, Amendment Parties, Administrative Agent, Collateral Agent and the financial institutions from time to time party thereto as lenders (the “Lenders”) are parties to that certain Term Loan Agreement, dated as of July 29, 2016, as amended by that certain Amendment No. 1 to Loan Agreement, dated as of December 22, 2016, as amended by that certain Amendment No. 2 and Waiver to Loan Agreement, dated as of May 5, 2017, as amended by that certain Amendment No. 3 to Loan Agreement, dated as of August 8, 2017, as amended and restated by that certain Amendment No. 4 to Loan Agreement, dated as of March 6, 2018, as amended by that certain Amendment No. 5 to Loan Agreement, dated as of March 13, 2019, as amended by that certain Amendment No. 6 to Loan Agreement, dated as of May 9, 2019 (as it may have been further amended, restated, amended and restated, supplemented or otherwise modified through the date hereof prior to this Agreement, the “Existing Loan Agreement” and as amended hereby and as it may be further amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Loan Agreement”), pursuant to which Administrative Agent, Collateral Agent and the Lenders have agreed, among other things, to provide to Borrower certain loans and other financial accommodations in accordance with the terms and conditions set forth therein;

WHEREAS, the Loan Parties and Collateral Agent are parties to that certain Guarantee and Collateral Agreement, dated as of July 29, 2016 (as amended, restated, amended and restated, supplemented or otherwise modified through the date hereof prior to this Agreement, the “Existing Collateral Agreement” and as amended hereby, and as it may be further amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Collateral Agreement”), pursuant to which each Loan Party guaranteed the obligations of each other Loan Party under the Loan Agreement and granted a security interest over substantially all of such Loan Party’s personal assets in favor of the Collateral Agent;

WHEREAS, Amendment Parties and the Loan Parties have requested that Administrative Agent and the Lenders agree to amend the Existing Loan Agreement and the Existing Collateral Agreement as set forth in this Agreement; and

WHEREAS, Administrative Agent and the Lenders constituting at least Required Lenders are willing to agree to Amendment Parties’ request for such amendments, subject to and in accordance with the terms and conditions set forth in this Agreement.

NOW, THEREFORE, Amendment Parties, Administrative Agent and the Lenders constituting at least Required Lenders each hereby agrees as follows:

1. Recitals; Definitions. The foregoing recitals, including all terms defined therein, are incorporated herein and made a part hereof. All capitalized terms used herein (including, without limitation, in the foregoing recitals) and not defined herein shall have the meanings given to such terms in the Loan

Agreement and the rules of interpretation set forth in Section 1.2 thereof are incorporated herein mutatis mutandis.

2. Amendments to the Existing Loan Agreement. Subject to the terms and conditions of this Agreement, including, without limitation, the conditions to effectiveness set forth in Section 4 below, the Existing Loan Agreement is hereby amended as follows:

(a) The following definition shall be added in alphabetical order:

“Seventh Amendment Effective Date” shall mean September 12, 2019.

(b) Section 7.2(w) of the Existing Loan Agreement is hereby deleted in its entirety and replaced with the following:

“(w)In the case of any Investments in joint ventures permitted under Section 7.4(t) hereof, any put and call arrangements related to its Capital Stock set forth in its organizational documents or any related joint venture or similar agreement;”

“(z)Liens in the Capital Stock of a joint venture granted in connection with the pledge or transfer of the Capital Stock of a joint venture permitted under Section 7.4(t) hereof;”

(d) Section 7.4(t) of the Existing Loan Agreement is hereby amended and restated in its entirety as follows:

“(t)so long as no Default or Event of Default shall have occurred and be continuing at the time thereof or would result therefrom, Investments in joint ventures in an amount not to exceed $100,000,000 at any time outstanding, provided (i) such Investments were in existence as of and including the Seventh Amendment Effective Date or (ii) such Investments are made in connection with that certain joint venture transaction with New Generation Health, LLC and known as Bold Quail Holdings LLC; and”

(e) Section 7.6(a) of the Existing Loan Agreement is hereby amended and restated in its entirety as follows:

“7.6Restricted Payments; Restrictive Agreements. (a) Declare or make, any Restricted Payment; provided that (i) (A) the Borrower may declare and pay dividends or make other distributions to Ultimate Parent and its Subsidiary that is a managing member of the Borrower (it being understood and agreed that this clause (i) (A) shall not permit any Restricted Payments to be made by the Borrower to any Person other than Ultimate Parent and its Subsidiary that is a managing member of the Borrower and that dividends or other distributions pursuant to this clause (i) (A) may in any event be made only to recipients that are Loan Parties) and (B) any Subsidiary may make a Restricted Payment to a Loan Party; (ii) the Borrower and the Restricted Subsidiaries may acquire shares of Ultimate Parent delivered or to be delivered to a director, officer or employee of the Parent Companies, the Borrower or a Restricted Subsidiary in connection with the grant,

vesting, exercise or payment of a stock option, warrant or other equity or equity-based award granted by the Parent Companies, the Borrower or a Restricted Subsidiary, and the Loan Parties may make distributions in order to satisfy the exercise or purchase price of the award and/or any Tax withholding obligations arising in connection with such event, provided that any Restricted Payment made under this clause (ii) shall be non-cash; (iii) the repurchase or redemption of Capital Stock of Ultimate Parent and the Borrower owned by former or current management, directors, officers or employees (or their transferees, estates or beneficiaries under their estates) of any Parent Company, the Borrower or any of the Restricted Subsidiaries or to make payments (including on promissory notes issued to pay the purchase price) with respect to such repurchases or redemptions upon death, disability, retirement, severance or termination of employment or service or pursuant to any employee, management or director equity plan, employee, management or director stock option plan or any other employee, management or director benefit plan or any agreement (including any stock subscription or shareholder agreement) or similar equity incentives or equity-based incentives in an aggregate amount not to exceed $2,000,000 in any fiscal year; (iv) payments of customary fees to members of its or any Parent Company’s board of directors and in respect of insurance coverage or for indemnification obligations under any law, indenture, contract or agreement to any director or officer of any Parent Company or any of its Restricted Subsidiaries shall be permitted; (v) [reserved]; (vi) [reserved]; (vii) [reserved]; (viii) any Parent Company may make payments in cash, in lieu of the issuance of fractional shares, upon the exercise of warrants or upon the conversion or exchange of Capital Stock of Ultimate Parent and the Borrower; (ix) [reserved]; and (x) the Borrower may pay cash distributions in respect of taxes owing by the Borrower’s direct or indirect investors in respect of GHLLC and the Restricted Subsidiaries (“Tax Distributions”); provided that no payments or distributions may be made under any provision of this Section 7.6 or otherwise (i) in the case of any Default or Event of Default having occurred and being continuing.”

3. Amendment to the Existing Collateral Agreement. Subject to the terms and conditions of this Agreement, including, without limitation, the conditions to effectiveness set forth in Section 4 below, clause (vii) of the definition of “Excluded Assets” set forth in the proviso of Section 3.1 of the Existing Collateral Agreement is hereby amended and restated as follows:

“(vii) interests in partnerships, joint ventures and non-Wholly-Owned Restricted Subsidiaries, Investments in which are permitted pursuant to Section 7.4(t) of the Credit Agreement, which interests cannot be pledged without the consent of one or more third parties except to the extent the prohibition is with respect to a tenant or any other entity under a Material Master Lease or its Subsidiaries in a Material Master Lease (unless otherwise restricted or limited by the Master Lease Intercreditor Agreements and any other intercreditor agreement entered into pursuant to Section 6.13 of the Credit Agreement) or is ineffective under the applicable anti-assignment provisions under 9-406, 9-407, 9-408 or 9-409 of the UCC or other Requirement of Law; provided that the Borrower shall use commercially reasonable efforts to obtain any required consent from the applicable third party;”

4. Conditions. The effectiveness of this Agreement is subject to the following conditions, each in form and substance satisfactory to Administrative Agent (the date on which such conditions have been satisfied, the “Seventh Amendment Effective Date”):

(a) Administrative Agent shall have received a fully executed copy of this Agreement;

(a) no Default or Event of Default shall have occurred and be continuing as of the date hereof under this Agreement, the Loan Agreement or any other Loan Document; and

(a) Loan Parties shall have delivered such further documents, information, certificates, records and filings as Administrative Agent may reasonably request.

5. Reaffirmation of Loan Documents. By executing and delivering this Agreement, each Loan Party hereby (i) reaffirms, ratifies and confirms its Obligations under the Loan Agreement, the Notes and the other Loan Documents, as applicable, (ii) agrees that this Agreement shall be a “Loan Document” under the Loan Agreement and (iii) hereby expressly agrees that the Loan Agreement, the Notes and each other Loan Document shall remain in full force and effect.

6. Reaffirmation of Grant of Security Interest in Collateral. Each Loan Party hereby expressly reaffirms, ratifies and confirms its obligations under the Guarantee and Collateral Agreement, including its mortgage, grant, pledge and hypothecation to Administrative Agent for the benefit of the Secured Parties, of the Lien on and security interest in, all of its right, title and interest in, all of the Collateral.

7. Confirmation of Representations and Warranties; Liens; No Default. Each Loan Party hereby confirms that (i) all of the representations and warranties set forth in the Loan Documents to which it is a party continue to be true and correct in all material respects as of the date hereof as if made on the date hereof and as if fully set forth herein, except to the extent (A) such representations and warranties by their terms expressly relate only to a prior date (in which case such representations and warranties shall be true and correct in all material respects as of such prior date) or (B) any such representation or warranty is no longer true, correct or complete due to the occurrence of one or more events that are permitted to occur (or are not otherwise prohibited) under the Loan Documents, (ii) there are no continuing Defaults or Events of Default that have not been waived or cured, (iii) subject to the terms and conditions of the Loan Documents, Administrative Agent has and shall continue to have valid, enforceable and perfected Liens on the Collateral with the priority set forth in the Intercreditor Agreement, for the benefit of the Secured Parties, pursuant to the Loan Documents or otherwise granted to or held by Administrative Agent, for the benefit of the Secured Parties, subject only to Liens expressly permitted pursuant to Section 7.2 of the Loan Agreement, and (iv) the agreements and obligations of Borrower and each other Loan Party contained in the Loan Documents and in this Agreement constitute the legal, valid and binding obligations of Borrower and each other Loan Party, enforceable against Borrower and each other Loan Party in accordance with their respective terms, except to the extent limited by general principles of equity and by bankruptcy, insolvency, fraudulent conveyance, or other similar laws affecting creditors’ rights generally.

8. No Other Amendments. Except as expressly set forth in this Agreement, the Loan Agreement and all other Loan Documents shall remain unchanged and in full force and effect. This Agreement shall be limited precisely and expressly as drafted and shall not be construed as consent to the amendment, restatement, modification, supplementation or waiver of any other terms or provisions of the Loan Agreement or any other Loan Document.

9. Costs and Expenses. The payment of all fees, costs and expenses incurred by Administrative Agent in connection with the preparation and negotiation of this Agreement shall be

governed by Section 10.5 of the Loan Agreement, and in any event shall be paid within thirty (30) days of the Seventh Amendment Effective Date.

10. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. THE JURISDICTION AND WAIVER OF RIGHT TO TRIAL BY JURY PROVISIONS IN SECTIONS 10.12 AND 10.17 OF THE LOAN AGREEMENT ARE INCORPORATED, MUTATIS MUTANDIS, HEREIN BY REFERENCE.

11. Successors/Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

12. Headings. Section headings in this Agreement are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

13. Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Agreement by facsimile transmission or by electronic mail in “portable document format” shall be effective as delivery of a manually executed counterpart hereof. A copy of this Agreement signed by all the parties shall be lodged with the Borrower and Administrative Agent.

14. Release of Claims. In consideration of the Lenders’ and Administrative Agent’s agreements contained in this Agreement, each Loan Party hereby releases and discharges each Lender and Administrative Agent and their affiliates, subsidiaries, successors, assigns, directors, officers, employees, agents, consultants and attorneys (each, a “Released Person”) of and from any and all claims, suits, actions, investigations, proceedings or demands, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law of any kind or character, known or unknown, which such Loan Party ever had or now has against Administrative Agent, any Lender or any other Released Person which relates, directly or indirectly, to any acts or omissions of Administrative Agent, any Lender or any other Released Person relating to the Loan Agreement or any other Loan Document on or prior to the date hereof.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, each of the undersigned has executed this Agreement or has caused the same to be executed by its duly authorized representatives as of the date first above written.

GENESIS HEALTHCARE, INC.,
as Ultimate Parent