Document:

Exhibit

Exhibit 10.1

EXECUTION VERSION

AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT

This AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMEN (this “Amendment”) is made as of June 17, 2019 (the “Effective Date”) by and among BLACK HILLS CORPORATION, a South Dakota corporation (the “Borrower”), the financial institutions listed on the signature pages hereto (the “Banks”) and JPMORGAN CHASE BANK, N.A., as Administrative Agent (in such capacity, the “Administrative Agent”), under that certain Amended and Restated Credit Agreement, dated as of July 30, 2018 (as amended, supplemented or otherwise modified from time to time prior to the date hereof, the “Credit Agreement”), by and among the Borrower, the Banks party thereto and the Administrative Agent.  Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Credit Agreement, as amended by this Amendment (the “Amended Credit Agreement”).

WHEREAS, the Borrower has requested that the Banks modify the Credit Agreement in certain respects including to, among other things, increase the term loan facility provided thereunder (the “Existing Term Loan Facility”) by an aggregate principal amount of $100,000,000 to permit a term loan facility (including the Existing Term Loan Facility) in an aggregate principal amount of $400,000,000; and

WHEREAS, the Borrower, the Banks and the Administrative Agent have so agreed on the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Banks and the Administrative Agent hereby agree as follows.

ARTICLE I

AMENDMENT

Effective as of the Effective Date but subject to the satisfaction of the conditions precedent set forth in Article III below, the Credit Agreement is hereby amended as follows:

1.1    Section 1.1 of the Credit Agreement is hereby amended to insert the following definitions alphabetically therein:

“Additional Commitment” means (a) as to any Bank, the aggregate commitment of such Bank to make Additional Loans on the Amendment No. 1 Effective Date as set forth on Schedule 2.1 or in the most recent Assignment and Assumption or other documentation contemplated hereby executed by such Bank, as it may be modified pursuant to the terms hereof and (b) as to all Banks, the aggregate commitment of all Banks to make Additional Loans, which aggregate commitment shall be $100,000,000 on the Amendment No. 1 Effective Date.  After advancing each Additional Loan, each reference to a Bank’s Additional Commitment shall refer to that Bank’s Percentage of the Additional Loans.

“Additional Loans” means, with respect to a Bank, such Bank’s term loan made on the Amendment No. 1 Effective Date pursuant to Section 2.1(b) (or any conversion or continuation thereof).

“Amendment No. 1” means that certain Amendment No. 1 to Amended and Restated Credit Agreement, dated as of the Amendment No. 1 Effective Date, by and among the Borrower, the Banks party thereto and the Administrative Agent.

“Amendment No. 1 Effective Date” means June 17, 2019.

“Initial Commitment” means, as to any Bank, such Bank’s Percentage of the Initial Loans.

“Initial Loans” means, with respect to a Bank, such Bank’s term loan continued on the Effective Date pursuant to Section 2.1(a) (or any conversion or continuation thereof).

1.2    Section 1.1 of the Credit Agreement is hereby further amended to amend and restate the definitions of “Commitment”, “Fee Letter”, “Loans” and “Termination Date” in its entirety as follows:

“Commitment” means each Bank’s Initial Commitment and/or Additional Commitment, as applicable.

“Fee Letter” means that certain letter dated as of the Amendment No. 1 Effective Date by and between JPMorgan and the Borrower pertaining to fees to be paid by the Borrower to JPMorgan thereunder.

“Loans” means, with respect to a Bank, such Bank’s Initial Loans and/or Additional Loans, as applicable, and includes a Base Rate Loan or Eurodollar Loan, each of which is a “type” of Loan hereunder.

“Termination Date” means June 17, 2021.

1.3    Section 2.1 of the Credit Agreement is hereby amended and restated in its entirety as follows: 

Section 2.1    The Loan Commitments.  

(a)    Prior to the Effective Date, certain term loans were previously made to the Borrower under the Existing Credit Agreement which remain outstanding as of the Effective Date (such outstanding loans being hereinafter referred to as the “Existing Loans”). Subject to the terms and conditions of this Agreement, the Borrower and each Bank agree that on the Effective Date the Existing Loans shall be re-evidenced as loans under this Agreement (each such loan, a “Initial Loan” hereunder), and the terms of the Existing Loans shall be restated in their entirety and shall be evidenced by this Agreement. Any amount borrowed under this Section 2.1(a) and subsequently repaid or prepaid may not be reborrowed. 

(b)    Each Bank with an Additional Commitment severally agrees, on the terms and conditions set forth in Amendment No.1 and this Agreement, to make an Additional Loan to the Borrower in U.S. Dollars on the Amendment No. 1 Effective Date, in an amount equal to such Bank’s Additional Commitment by making immediately available funds available to the Administrative Agent’s designated account, not later than the time specified by the Administrative Agent.  Any amount borrowed under this Section 2.1(b) and subsequently repaid or prepaid may not be reborrowed.  Unless previously terminated, the Additional Loan Commitments shall terminate at 5:00 p.m. (New York time) on the Amendment No. 1 Effective Date.  Notwithstanding anything to the contrary herein, from and after the Amendment No.1 Effective Date, the Initial Loan and Additional Loan of each Bank shall be combined into a single “Loan” made by such Bank for all purposes hereunder.  

Unless an earlier maturity is provided for hereunder, all Loans shall mature and be due and payable on the Termination Date.

1.4    Schedule 2.1 to the Credit Agreement is hereby amended and restated in its entirety in the form attached hereto as Annex I.  

ARTICLE II

REPRESENTATIONS AND WARRANTIES

The Borrower hereby represents and warrants as follows:

2.1    This Amendment and the Amended Credit Agreement constitute legal, valid and binding obligations of the Borrower and are enforceable against the Borrower in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally.  

2.2    As of the date hereof and after giving effect to the terms of this Amendment, (i) the Borrower shall be in full compliance with all of the terms and conditions of the Amended Credit Agreement, and no Default or Event of Default shall have occurred and be continuing and (ii) each of the representations and warranties of the Borrower set forth in the Amended Credit Agreement are true and correct in all material respects (unless such representation or warranty is already qualified with respect to materiality, in which case it shall be and remain true and correct in all respects) as of the date hereof, except that if any such representation or warranty relates solely to an earlier date it need only remain true in all material respects (unless such representation or warranty is already qualified with respect to materiality, in which case it shall be and remain true and correct in all respects) as of such date.

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ARTICLE III

CONDITIONS PRECEDENT

This Amendment shall become effective on the Effective Date, provided, however, that the effectiveness of this Amendment is subject to the satisfaction of each of the following conditions precedent:

3.1    The Administrative Agent shall have received counterparts of this Amendment duly executed by the Borrower, each Bank and the Administrative Agent. 

3.2    The Administrative Agent shall have received for each Bank the favorable written opinion of each of (i) Faegre Baker Daniels LLP, counsel to the Borrower and (ii) General Counsel to the Borrower.

3.3    The Administrative Agent shall have received for each Bank copies of the Borrower’s (i) Articles of Incorporation, together with all amendments and (ii) bylaws (or comparable constituent documents) and any amendments thereto, certified in each instance by its Secretary or an Assistant Secretary.

3.4    The Administrative Agent shall have received for each Bank satisfactory evidence that the Borrower’s Board of Directors has authorized the execution and delivery of the Amendment and the consummation of the transactions contemplated thereby together with specimen signatures of the persons authorized to execute such documents on the Borrower’s behalf, all certified in each instance by its Secretary or Assistant Secretary. 
 
3.5    The Administrative Agent shall have received for each Bank which has requested same such Bank’s duly executed Note of the Borrower dated the date hereof and otherwise in compliance with the provisions of Section 2.10(a) of the Credit Agreement.

3.6    All legal matters incident to the execution and delivery of the Amendment shall be satisfactory to the Banks.

3.7    The Administrative Agent shall have received a duly executed Compliance Certificate containing financial information as of March 31, 2019 (stating a Consolidated Indebtedness to Capitalization Ratio in accordance with Section 7.17 of the Credit Agreement).

3.8    There has been no material adverse change in the business, assets, operations, performance or condition, financial or otherwise, of the Borrower and its subsidiaries, taken as a whole, since the date of the most recently audited financial year of the Borrower.

3.9    The Borrower shall have provided to the Administrative Agent a certificate stating that the conditions precedent set forth in Article II and this Article III have been satisfied.

3.10    The Administrative Agent shall have received payment and/or reimbursement of the Administrative Agent’s fees and expenses (including, to the extent invoiced, reasonable fees, charges and disbursements of outside counsel to the Administrative Agent) in connection with preparation, negotiation and execution of this Amendment and any other document required to be furnished herewith.

3.11    The Administrative Agent shall have received such other documents and information as it may reasonably request.

ARTICLE IV

GENERAL

4.1    Expenses.  The Borrower agrees to reimburse the Administrative Agent upon demand for all reasonable out-of-pocket expenses paid or incurred by the Administrative Agent, including, without limitation, reasonable fees, charges and disbursements of outside counsel to the Administrative Agent incurred in connection with preparation, negotiation and execution of this Amendment and any other document required to be furnished herewith (collectively, “Costs and Expenses”). 

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4.2    Counterparts.  This Amendment may be executed in any number of counterpart signature pages, and by the different parties on different counterparts, each of which when executed shall be deemed an original but all such counterparts taken together shall constitute one and the same instrument.  Delivery of an executed counterpart hereof via facsimile or electronic means shall for all purposes be as effective as delivery of an original counterpart. 

4.3    Severability of Provisions.  Any provision in this Amendment that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of this Amendment are declared to be severable. 

4.4    Governing Law.  This Amendment, and the rights and duties of the parties hereto, shall be construed and determined in accordance with the internal laws of the State of New York. 

4.5    Successors; Enforceability.  The terms and provisions of this Amendment shall be binding upon the Borrower, the Administrative Agent and the Banks and their respective successors and assigns, and shall inure to the benefit of the Borrower, the Administrative Agent and the Banks and the successors and assigns of the Administrative Agent and the Banks.

4.6    Reference to and Effect on the Credit Agreement.

(a)    Upon the effectiveness of this Amendment, on and after the date hereof, each reference in the Amended Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import shall mean and be a reference to the Credit Agreement, as amended and modified hereby.

(b)    Except as specifically amended above, the Credit Agreement and all other documents, instruments and agreements executed and/or delivered in connection therewith (including, without limitation, all of the Credit Documents) 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 the Administrative Agent or the Banks, nor constitute a waiver of any provision of the Amended Credit Agreement or any other documents, instruments and agreements executed and/or delivered in connection therewith.

(d)    This Amendment shall constitute a Credit Document.

4.7    Headings.  Section headings used in this Amendment are for reference only and shall not affect the construction of this Amendment.

4.8    Addition of Banks.

(a)Certain Persons are becoming Banks under the Credit Agreement as of the date of this Amendment.  Such Banks shall evidence their entry into the Credit Agreement by their execution and delivery of signature pages to this Amendment.  This Amendment shall not be given effect prior to receipt of such Banks’ executed pages hereto.  Such Banks’ Commitments and Loans appear in Schedule 2.1 of Annex I hereto.  Such Persons shall have the rights, duties and obligations of Banks on and after the date hereof as a result of executing this Amendment (including, without limitation, funding obligations in respect of their Additional Commitments as and when required under the Credit Agreement).  The Administrative Agent is hereby authorized to take such steps under the Credit Agreement as reasonably required to give effect to the addition of such Persons as Banks, including, without limitation, reallocating outstanding obligations among the Banks ratably based on their Commitments.  The parties hereto agree with and consent to the foregoing.

(b)The Administrative Agent shall make such reallocations, sales, assignments or other relevant actions in respect of “Loans” (each as defined in and in effect under the Credit Agreement) as are necessary in order that each such Banks’ Loans hereunder reflects such Banks’ Percentage thereof on the Effective Date, and the Borrower and each Bank that was a Bank under the Credit Agreement prior to giving effect to this Amendment hereby agrees (with effect immediately prior to the Effective Date) that (x) such reallocation, sales and assignments shall be deemed to have been effected by way of, and subject to the terms and conditions of, Assignment and Assumptions, without the payment of any related assignment fee, and, except for promissory notes requested by a Bank in accordance with the Section 2.10(a) of the Credit Agreement, no other documents or instruments shall be, or shall be required to be, executed in connection with such assignments (all of which are hereby waived), (y) such reallocation shall satisfy the assignment provisions of Section 11.10(b) of the Credit Agreement and (z) in connection with such reallocation, the Borrower shall pay all interest and fees on the outstanding Loans accrued to the date hereof to the Administrative Agent for the account of the Banks party hereto other than “breakage” costs waived pursuant to Section 4.8(c) below. 

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(c)Each Bank who was a Bank immediately prior to giving effect to the Amendment agrees to waive all losses, costs and expenses incurred by such Lender under Section 2.11 of the Credit Agreement in connection with the sale and assignment of any Eurodollar Loans and such reallocation described in this Section 4.8.

(signature pages follow)

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In WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their duly authorized representatives as of the day and year first above written.

BORROWER:

BLACK HILLS CORPORATION,
a South Dakota corporation

	
		
	By:
	/s/ Richard W. Kinzley

	Name:
	Richard W. Kinzley

	Title:
	Senior Vice President and Chief Financial Officer

Signature Page to 
Amendment No. 1 to Amended and Restated Credit Agreement

JPMORGAN CHASE BANK, N.A.,
as the Administrative Agent and a Bank

	
		
	By:
	/s/ Justin Martin

	Name:
	Justin Martin

	Title:
	Authorized Officer

Signature Page to 
Amendment No. 1 to Amended and Restated Credit Agreement

U.S. BANK NATIONAL ASSOCIATION,
as a Bank

	
		
	By:
	/s/ John M. Eyerman

	Name:
	John M. Eyerman

	Title:
	Senior Vice President

Signature Page to 
Amendment No. 1 to Amended and Restated Credit Agreement

BANK OF AMERICA, N.A.,
as a Bank

	
		
	By:
	/s/ Jonathan M. Phillips

	Name:
	Jonathan M. Phillips

	Title:
	Senior Vice President

Signature Page to 
Amendment No. 1 to Amended and Restated Credit Agreement

COBANK, ACB, as a Bank

	
		
	By:
	/s/ Ryan M. Spearman

	Name:
	Ryan M. Spearman

	Title:
	Vice President

Signature Page to 
Amendment No. 1 to Amended and Restated Credit Agreement

BANK OF MONTREAL, as a Bank

	
		
	By:
	/s/ Rahul Shah

	Name:
	Rahul Shah

	Title:
	Managing Director

Signature Page to 
Amendment No. 1 to Amended and Restated Credit Agreement

ANNEX I

SCHEDULE 2.1
TERM LOANS
	
				
	Bank
	Initial Loan Amount
	Additional Commitment Amount
	Pro Rata Share

	JPMorgan Chase Bank, N.A.
	$90,000,000
	$10,000,000
	25.000000000%

	U.S. Bank National Association
	$90,000,000
	$10,000,000
	25.000000000%

	Bank of America, N.A.
	$60,000,000
	$10,000,000
	17.500000000%

	CoBank, ACB
	$60,000,000
	$10,000,000
	17.500000000%

	Bank of Montreal, Chicago Branch
	$0
	$60,000,000
	15.000000000%

	TOTALS
	$300,000,000
	$100,000,000
	100.000%rhe-ex1011_643.htm

 

Exhibit 10.11

 

EXECUTION VERSION

FIRST AMENDMENT

TO SECOND AMENDED AND RESTATED FORBEARANCE AGREEMENT

This FIRST AMENDMENT TO SECOND AMENDED AND RESTATED FORBEARANCE AGREEMENT (this “Amendment”) is entered into as of June 12, 2019 by and among CP PROPERTY HOLDINGS, LLC, a Georgia limited liability company, as borrower (the “CP Borrower”), NORTHWEST PROPERTY HOLDINGS, LLC, a Georgia limited liability company, as borrower (the “Northwest Borrower”), ATTALLA NURSING ADK, LLC, a Georgia limited liability company, as borrower (the “Attalla Borrower”), ADCARE PROPERTY HOLDINGS, LLC, a Georgia limited liability company, as borrower and guarantor (“AdCare Holdco”; the CP Borrower, the Northwest Borrower, the Attalla Borrower and AdCare Holdco are collectively referred to herein as “Borrowers” and each, as a “Borrower”), HEARTH & HOME OF OHIO, INC., a Georgia corporation, as guarantor (the “HHO Guarantor”), REGIONAL HEALTH PROPERTIES, INC. a Georgia corporation, as guarantor (the “RHP Guarantor”), ADCARE OPERATIONS, LLC, a Georgia limited liability company, as guarantor (the “AdCare Ops”), ADCARE ADMINISTRATIVE SERVICES, LLC, a Georgia limited liability company, as guarantor (“AdCare Admin”), ADCARE CONSULTING, LLC, a Georgia limited liability company, as guarantor (“AdCare Consulting”), ADCARE FINANCIAL MANAGEMENT, LLC, a Georgia limited liability company, as guarantor (“AdCare Financial”), ADCARE OKLAHOMA MANAGEMENT, LLC, a Georgia limited liability company, as guarantor (“AdCare OK”), and ADCARE EMPLOYEE LEASING, LLC, a Georgia limited liability company, as guarantor (“AdCare Employee”; the HHO Guarantor, AdCare Holdco, the RHP Guarantor, AdCare Ops, AdCare Admin, AdCare Consulting, AdCare Financial, AdCare OK and AdCare Employee are collectively referred to herein as “Guarantors” and each, as a “Guarantor”), and PINECONE REALTY PARTNERS II, LLC, a Delaware limited liability company, as lender (together with its successors and assigns, the “Lender”) and (except to the extent set forth herein) amends that certain Second Amended and Restated Forbearance Agreement, dated as of March 29, 2019 (the “Second A&R Forbearance Agreement”), by and among the Credit Parties and the Lender.

RECITALS

WHEREAS, certain Credit Parties and the Lender are parties to that certain Loan Agreement, dated as of February 15, 2018 (as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Loan Agreement”);

WHEREAS, the Credit Parties and the Lender entered into that certain Second A&R Forbearance Agreement, pursuant to which the Lender agreed, subject to the terms and conditions thereof, to forbear during the Forbearance Period (as defined therein) from exercising certain of its default-related rights and remedies against the Credit Parties with respect to the Specified Defaults;

WHEREAS, upon the request of the Credit Parties, the Lender, subject to the terms and conditions set forth herein, has agreed to the amendments to the Second A&R Forbearance Agreement, and other agreements, as set forth herein.

NOW, THEREFORE, in consideration of the foregoing, the terms, covenants and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

 

 

SECTION 1. Definitions. Unless otherwise defined herein, all capitalized terms used but not defined in this Amendment shall have the meanings given to such terms in the Second A&R Forbearance Agreement, as amended, supplemented or otherwise modified by this Amendment, or the Loan Agreement, as applicable.

SECTION 2. Amendments. Subject to the satisfaction of the conditions set forth in Section 3 hereof:

(a)Section 5(b) of the Second A&R Forbearance Agreement is hereby amended by deleting “the Letter of Intent” from clause (iii) and replacing it with “that certain Purchase and Sale Agreement, dated as of April 15, 2019, by and among certain Credit Parties and Attalla Realty LLC, an Alabama limited liability company, College Park Realty LLC, a Georgia limited liability company, Quail Creek Realty LLC, an Oklahoma limited liability company, and Northwest Realty LLC, an Oklahoma limited liability company, as amended by that certain first amendment dated as of May 15, 2019, that certain second amendment dated as of May 20, 2019, that certain third amendment dated as of May 23, 2019, that certain fourth amendment dated as of May 31, 2019, and that certain fifth amendment dated as of June 12, 2019”;

(b)Section 5(d) of the Second A&R Forbearance Agreement is hereby amended by deleting “May 30, 2019” set forth therein and replacing it with “June 13, 2019 (it being understood and agreed that, as of the Amendment Effective Date (as defined in the First Amendment to this Agreement dated June 12, 2019), no Default or Event of Default  has occurred pursuant to this Section 5(d))”;

(c)Section 5(e)(ii) of the Second A&R Forbearance Agreement is hereby amended by deleting “July 3, 2019” set forth therein and replacing it with “August 15, 2019”; and

(d)Section 5(f)(i)(A) of the Second A&R Forbearance Agreement is hereby amended by amending and restating such section in its entirety as set forth below:

“(A)[Reserved].”

SECTION 3. Conditions. This Amendment shall be effective on the first day (the “Amendment Effective Date”) upon which each of the following conditions precedent shall have been satisfied:

(a)(i) the Lender shall have received a counterpart signature of the Credit Parties to this Amendment and (ii) the Credit Parties shall have received a counterpart signature of the Lender to this Amendment;

(b)the Lender shall have received from the Borrowers a fee in an amount equal to $25,000 payable in immediately available funds, which fee shall be fully earned and payable on the Amendment Effective Date;

(c)the Borrowers shall have paid to Lender a non-refundable payment as additional interest, payable in-kind by increasing the outstanding principal amount of Loans held by such Lender by an amount equal to $462,500 (with such increase being applied to each outstanding Loan on a pro rata basis in accordance with the outstanding principal amount thereof prior to such payment), whereupon from and after such date such amounts shall be added to and constitute Obligations;

(d)the Lender shall have received a legal, valid and binding copy of a fifth amendment to that certain Purchase and Sale Agreement, dated as of April 15, 2019, by and among certain Credit Parties and Attalla Realty LLC, an Alabama limited liability company, College Park Realty LLC, a Georgia limited liability company, Quail Creek Realty LLC, an Oklahoma limited liability company, and Northwest Realty LLC, an Oklahoma limited liability company, having terms acceptable to the Lender; and

(e)the Lender shall have received from the Borrowers reimbursement in full in immediately available funds for all accrued and unpaid Expenses.

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SECTION 4. Representations and Warranties. Each Credit Party represents and warrants to the Lender, on the Amendment Effective Date, that the following statements are true and correct in all material respects on and as of such date:

(a)the execution, delivery and performance of this Amendment has been duly authorized by all requisite corporate or limited liability company action on the part of such  Credit Party; this Amendment has been duly executed and delivered by such Credit Party; and this Amendment constitutes a valid and binding agreement of such Credit Party, enforceable against such Credit Party in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability;

(b)no approval, consent, exemption, authorization or other action by, or material notice to, or material filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, the Borrowers or any other Credit Party of this Amendment;

(c)the execution, delivery and performance by each Borrower and the other Credit Parties of this Amendment do not (i) contravene the terms of the Borrowers’ or any other Credit Party’s certificate or articles of incorporation, certificate of formation, limited liability company agreement or by-laws (or equivalent constitutional, organizational and/or formation documents), as applicable; (ii) conflict with or result in any breach or contravention of, or the creation of any Lien under, (A) any indenture, mortgage, deed of trust, Loan Agreement or loan agreement, or any other material agreement, contract or instrument to which any Borrower or any other Credit Party is a party or by which it or any of its properties or assets is bound or to which it may be subject or (B) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which any Borrower or any other Credit Party or the properties or assets of any Borrower or any other Credit Party is subject; (iii) violate any Applicable Law; or (iv) result in a limitation on any governmental approvals applicable to the business, operations or properties of any Borrower or any other Credit Party;

(d)all of the Obligations are secured by a legal, valid and enforceable first priority security interest in and Lien on the Collateral in favor of the Lender;

(e)there are no offsets, counterclaims or defenses to the liabilities or obligations (including any Obligations) under any of the Loan Documents, or to the rights, remedies or powers of the Lender in respect of any of the Obligations or any of the Loan Documents;

(f)the execution and delivery of this Amendment has not established any course of dealing between the parties hereto or created any obligation, commitment or agreement of the Lender with respect to any future modification, amendment, waiver, forbearance or related transactions with respect to the Obligations, the Collateral or any of the Loan Documents; and

(g)except for the Specified Defaults, no Default or Event of Default has occurred or is continuing under this Amendment, the Loan Agreement or any other Loan Document.

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SECTION 5. Repayment. If the Credit Parties pay the Obligations in full in cash (excluding  the Specified Principal Amount, but including any accrued and unpaid interest, or other fees or premiums payable, in respect of the Specified Principal Amount) on or prior to August 15, 2019, Lender shall forgive the Specified Principal Amount, which shall not be required to be repaid and shall be automatically cancelled. “Specified Principal Amount” means $137,500 in aggregate principal amount of the Loans (applied to each outstanding Loan on a pro rata basis in accordance with the outstanding principal amount thereof prior to such payment) and does not include any accrued and unpaid interest, or fees or premiums payable, in respect of the Specified Principal Amount.

SECTION 6. Ratification of Liability.

Each of the Borrowers and each other Credit Party hereby ratifies and reaffirms all of its payment and performance obligations and obligations to indemnify, contingently or otherwise, under this Amendment and each other Loan Document to which such party is a party, and each such party hereby ratifies and reaffirms its grant of Liens on, or security interests in, its properties pursuant to such Loan Documents to which it is a party as security for the Obligations, and confirms and agrees that such Liens and security interests hereafter secure all of the Obligations. This Amendment shall in no manner affect or impair the Obligations or the Liens securing the payment and performance thereof. Each of the Borrowers and each other Credit Party (a) acknowledges receipt of a copy of this Amendment and all other agreements, documents and instruments executed and/or delivered in connection herewith, (b) consents to the terms and conditions of the same, and (c) agrees and acknowledges that each of the Loan Documents remains in full force and effect and is hereby ratified and confirmed.

SECTION 7. Release. Each of the Credit Parties (on behalf of itself and its Affiliates) for itself and for its successors in title and assignees and for its past, present and future employees, agents, representatives (other than legal representatives), officers, directors, shareholders, and trustees (each, a “Releasing Party” and collectively, the “Releasing Parties”), does hereby remise, release and discharge, and shall be deemed to have forever remised, released and discharged, the Lender, the Lender’s successors-in-title, legal representatives and assignees, past, present and future officers, directors, partners, general partners, limited partners, managing directors, members, affiliates, shareholders, trustees, agents, employees, consultants, principals, experts, advisors, attorneys and other professionals and all other persons and entities to whom the Lender or its successors-in-title, legal representatives and assignees, past, present and future officers, directors, affiliates, shareholders, trustees, agents, employees, consultants, experts, advisors, attorneys and other professionals would be liable if such persons or entities were found to be liable to any Releasing Party or any of them (collectively, hereinafter the “Releasees”), from any and all manner of action and actions, cause and causes of action, claims, charges, demands, counterclaims, crossclaims, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, rights of setoff and recoupment, controversies, damages, judgments, expenses, executions, liens, claims of liens, claims of costs, penalties, attorneys’ fees, or any other compensation, recovery or relief on account of any liability, obligation, demand or cause of action of whatever nature, whether in law, equity or otherwise (including, without limitation, any claims relating to (i) the making or administration of the Loans, including, without limitation, any such claims and defenses based on fraud, mistake, duress, usury or misrepresentation, or any other claim based on so-called “lender liability” theories, (ii) any covenants, agreements, duties or obligations set forth in the Loan Documents, (iii) increased financing costs, interest or other carrying costs, (iv) penalties, (v) lost profits or loss of business opportunity, (vi) legal, accounting and other administrative or professional fees and expenses and incidental, consequential and punitive damages payable to third parties, (vii) damages to business reputation, or (viii) any claims arising under 11 U.S.C. §§ 541-550 or any claims for avoidance or recovery under any other federal, state or foreign law equivalent), whether known or unknown, fixed or contingent, joint and/or several, secured or unsecured, due or not due, primary or secondary, liquidated or unliquidated, 

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contractual or tortious, direct, indirect, or derivative, asserted or unasserted, foreseen or unforeseen, suspected or unsuspected, now existing, heretofore existing or which may heretofore accrue against any of the Releasees, and which are, in each case, based on any act, fact, event or omission or other matter, cause or thing occurring at any time prior to or on the date hereof in any way, directly or indirectly arising out of, connected with or relating to the Loan Agreement or any other Loan Document and the transactions contemplated thereby, and all other agreements, certificates, instruments and other documents and statements (whether written or oral) related to any of the foregoing (each, a “Claim” and collectively, the “Claims”). Each of the Releasing Parties further stipulates and agrees with respect to all Claims, that it hereby waives, to the fullest extent permitted by applicable law, any and all provisions, rights, and benefits conferred by any applicable U.S. federal or state law, or any principle of common law, that would otherwise limit a release or  discharge of any unknown Claims pursuant to this Section 7. Each of the Credit Parties, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by the Borrowers or any other Credit Party pursuant to this Section 7. If any Credit Party or any of its successors, assigns or other legal representatives violates the foregoing covenant, the Borrowers and other Credit Parties, each for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys’ fees and costs incurred by any Releasee as a result of such violation. For the avoidance of doubt, the provisions of this Section 7 shall survive the occurrence of a Termination Event.

SECTION 8. Construction. This Amendment and all other agreements and documents  executed and/or delivered in connection herewith have been prepared through the joint efforts of all of the parties hereto. Neither the provisions of this Amendment or any such other agreements and documents nor any alleged ambiguity herein or therein shall be interpreted or resolved against any party on the ground that such party or its counsel drafted this Amendment or such other agreements and documents, or based on any other rule of strict construction. Each of the parties hereto represents and declares that such party has carefully read this Amendment and all other agreements and documents executed in connection therewith and that such party knows the contents thereof and signs the same freely and voluntarily. The parties hereto acknowledge that they have been represented by legal counsel of their own choosing in negotiations for and preparation of this Amendment and all other agreements and documents executed in connection herewith and that each of them has read the same and had their contents fully explained by such counsel and is fully aware of their contents and legal effect.

SECTION 9. Execution of Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which when taken together shall constitute one and the same instrument.

SECTION 10. Continuing Effect of the Loan Agreement.

(a)The Lender has not waived, is not by this Amendment waiving, and has no intention of waiving any of the Specified Defaults, any other Defaults or Events of Default or any of the liabilities or obligations (including any Obligations) under any of the Loan Documents, and the Lender has not agreed to forbear with respect to any rights or remedies concerning any Defaults or Events of Default (other than, during the Forbearance Period, the Specified Defaults solely to the extent expressly set forth in the Second A&R Forbearance Agreement, as amended, supplemented or otherwise modified by this Amendment), which may have occurred or are continuing as of the date hereof or which may occur after the date hereof, all of which rights are ratified and affirmed in all respects and shall continue in full force and effect. Subject to Section 2(b) of the Second A&R Forbearance Agreement (solely with respect to the Specified Defaults and only 

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during the Forbearance Period), the Lender reserves the right, in its discretion, to exercise any or all of its rights and remedies under the Loan Agreement and the other Loan Documents, at law or otherwise as a result of any Defaults or Events of Default which may be continuing on the date hereof or any Defaults or Events of Default that may occur after the date hereof, and the Lender has not waived any of such rights or remedies, and nothing in this Amendment, and no delay on the Lender’s part in exercising any such rights or remedies, should be construed as a waiver of any such rights or remedies.

(b)Nothing herein shall be deemed to entitle the Borrowers to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Loan Agreement in similar or different circumstances.

(c)This Amendment shall apply and be effective only with respect to the provisions of the Second A&R Forbearance Agreement specifically referred to herein. After the effectiveness of this Amendment, any reference to the Second A&R Forbearance Agreement shall mean the Second A&R Forbearance Agreement as amended and modified hereby.

SECTION 11. Governing Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 12. Loan Document. This Amendment shall constitute a Loan Document. It shall be an immediate Event of Default under the Loan Agreement if any Borrower or any other Credit Party fails to perform, keep or observe any term, provision, condition, covenant or agreement contained in this Amendment or if any representation or warranty made by any Borrower or any other Credit Party under or in connection with this Amendment shall be untrue, false or misleading in any respect when made.

SECTION 13. Assignments; No Third Party Beneficiaries. This Amendment shall be binding upon and inure to the benefit of the Borrowers, the other Credit Parties, the Lender and their respective successors and assigns; provided that neither the Borrowers nor any other Credit Party shall be entitled to delegate any of its duties hereunder and shall not assign any of its rights or remedies set forth in this Amendment without the prior written consent of the Lender, in its sole discretion. No person other than the parties hereto and the Lender shall have any rights hereunder or be entitled to rely on this Amendment and all third-party beneficiaries rights are hereby expressly disclaimed.

SECTION 14. Amendment. No amendment, modification or waiver of the terms of this Amendment shall be effective except in a writing signed by the Credit Parties and the Lender.

SECTION 15. Arms-Length/Good Faith; Review and Construction of Documents. This Amendment has been negotiated at arms-length and in good faith by the parties hereto. The Credit Parties (a) have had the opportunity to consult with legal counsel of their own choice and have been afforded an opportunity to review this Amendment with their legal counsel, (b) have reviewed this Amendment and fully understand the effects thereof and all terms and provisions contained in this Amendment, and (c) have executed this Amendment of their own free will and volition. Furthermore, the Credit Parties acknowledge that (i) this Amendment shall be construed as if jointly drafted by the Credit Parties and the Lender, and (ii) the recitals contained in this Amendment shall be construed to be part of the operative terms and provisions of this Amendment.

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SECTION 16. Submission to Jurisdiction; Waiver of Venue; Waiver of Trial by Jury; Headings; Severability; Preferences; Prior Agreements. The provisions of Sections 14.4, 14.6, 14.8, 14.9, 14.10 and 14.13 of the Loan Agreement are hereby incorporated into this amendment, mutatis mutandis.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their respective duly authorized officers as of the date first written above.

 

	
BORROWERS:

	
 
	
 
	
 

	
CP PROPERTY HOLDINGS, LLC,

	
a Georgia limited liability company

	
 
	
 
	
 

	
By:
	
 
	
/s/ Brent Morrison

	
 
	
 
	
Name:
	
Brent Morrison

	
 
	
 
	
Title:
	
Manager

 

	
NORTHWEST PROPERTY HOLDINGS, LLC, a

	
Georgia limited liability company

	
 
	
 
	
 

	
By:
	
 
	
/s/ Brent Morrison

	
 
	
 
	
Name:
	
Brent Morrison

	
 
	
 
	
Title:
	
Manager

 

	
ATTALLA NURSING ADK, LLC, a Georgia

	
limited liability company

	
 
	
 
	
 

	
By:
	
 
	
/s/ Brent Morrison

	
 
	
 
	
Name:
	
Brent Morrison

	
 
	
 
	
Title:
	
Manager

 

	
ADCARE PROPERTY HOLDINGS, LLC, a

	
Georgia limited liability company

	
 
	
 
	
 

	
By:
	
 
	
/s/ Brent Morrison

	
 
	
 
	
Name:
	
Brent Morrison

	
 
	
 
	
Title:
	
Manager

 

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GUARANTORS:

	
 
	
 
	
 

	
REGIONAL HEALTH PROPERTIES, INC., a

	
Georgia corporation

	
 
	
 
	
 

	
By:
	
 
	
/s/ Brent Morrison

	
 
	
 
	
Name:
	
Brent Morrison

	
 
	
 
	
Title:
	
Chief Executive Officer

 

	
ADCARE PROPERTY HOLDINGS, LLC, a

	
Georgia limited liability company

	
 
	
 
	
 

	
By:
	
 
	
/s/ Brent Morrison

	
 
	
 
	
Name:
	
Brent Morrison

	
 
	
 
	
Title:
	
Manager

 

	
HEARTH & HOME OF OHIO, INC., a Georgia

	
limited liability company

	
 
	
 
	
 

	
By:
	
 
	
/s/ Brent Morrison

	
 
	
 
	
Name:
	
Brent Morrison

	
 
	
 
	
Title:
	
President, Secretary and Treasurer

 

	
ADCARE OPERATIONS, LLC, a Georgia

	
limited liability company

	
 
	
 
	
 

	
By:
	
 
	
/s/ Brent Morrison

	
 
	
 
	
Name:
	
Brent Morrison

	
 
	
 
	
Title:
	
Manager

 

	
ADCARE ADMINISTRATIVE SERVICES,

	
LLC, a Georgia limited liability company

	
 
	
 
	
 

	
By:
	
 
	
/s/ Brent Morrison

	
 
	
 
	
Name:
	
Brent Morrison

	
 
	
 
	
Title:
	
Manager

 

	
ADCARE CONSULTING, LLC, a Georgia

	
limited liability company

	
 
	
 
	
 

	
By:
	
 
	
/s/ Brent Morrison

	
 
	
 
	
Name:
	
Brent Morrison

	
 
	
 
	
Title:
	
Manager

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ADCARE FINANCIAL MANAGEMENT, LLC,

	
a Georgia limited liability company

	
 
	
 
	
 

	
By:
	
 
	
/s/ Brent Morrison

	
 
	
 
	
Name:
	
Brent Morrison

	
 
	
 
	
Title:
	
Manager

 

	
ADCARE OKLAHOMA MANAGEMENT,

	
LLC, a Georgia limited liability company

	
 
	
 
	
 

	
By:
	
 
	
/s/ Brent Morrison

	
 
	
 
	
Name:
	
Brent Morrison

	
 
	
 
	
Title:
	
Manager

 

	
ADCARE EMPLOYEE LEASING, LLC, a

	
Georgia limited liability company

	
 
	
 
	
 

	
By:
	
 
	
/s/ Brent Morrison

	
 
	
 
	
Name:
	
Brent Morrison

	
 
	
 
	
Title:
	
Manager

 

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LENDER:

	
 
	
 
	
 

	
PINECONE REALTY PARTNERS II, LLC, a

	
Delaware limited liability company

	
 
	
 
	
 

	
By:
	
 
	
Pinesap Investments, LLC, a Delaware

	
 
	
 
	
limited liability company, its Manager

	
 
	
 
	
 

	
 
	
 
	
By:
	
Pine Companies, LLC, a California

	
 
	
 
	
 
	
limited liability company, its Manager

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
By:
	
/s/ Brian Timmer

	
 
	
 
	
 
	
 
	
Name:
	
Brian Timmer

	
 
	
 
	
 
	
 
	
Title:
	
Manager

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Forbearance Agreement Amendment]

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