Document:

Exhibit

EXHIBIT 10.21

CLOSING AGREEMENT
THIS CLOSING AGREEMENT (this “Agreement”) is made effective as of June 8, 2017 by and between GAHC4 Menlo Park CA MC, LLC, a limited liability company organized under the laws of the State of Delaware (“Griffin Menlo Park Buyer”), GAHC4 Fairfield CA MC, LLC, a limited liability company organized under the laws of the State of Delaware (“Griffin Fairfield Buyer”), GAHC4 Belmont CA ALF, LLC, a limited liability company organized under the laws of the State of Delaware (“Griffin Belmont Buyer”), GAHC4 Sacramento CA ALF, LLC, a limited liability company organized under the laws of the State of Delaware (“Griffin Sacramento Buyer”; and collectively with Griffin Menlo Park Buyer, Griffin Fairfield Buyer and Griffin Belmont Buyer, the “Griffin Tranche 1 Buyer”), GAHC4 Napa CA ALF, LLC, a limited liability company organized under the laws of the State of Delaware (“Griffin Napa ALF Buyer”), GAHC4 Napa CA MC, LLC, a limited liability company organized under the laws of the State of Delaware (“Griffin Napa MC Buyer”), GAHC4 Sonoma CA ALF, LLC, a limited liability company organized under the laws of the State of Delaware (“Griffin Sonoma Buyer”, and collectively with Griffin Napa ALF Buyer and Griffin Napa MC Buyer, “Griffin Tranche 2 Buyer”, and collectively with Griffin Tranche 1 Buyer, “Griffin”), Colonial Oaks Master Tenant, LLC, a limited liability company organized under the laws of the State of Delaware (“Tenant”), COSL Menlo Park, LP, a limited partnership organized under the laws of the State of Delaware (together with its successors and assigns, “Menlo Park Subtenant”), COSL Fairfield, LP, a limited partnership organized under the laws of the State of Delaware (together with its successors and assigns, “Fairfield Subtenant”), COSL Belmont, LP, a limited partnership organized under the laws of the State of Delaware (together with its successors and assigns, “Belmont Subtenant”), COSL Sacramento, LP, a limited partnership organized under the laws of the State of Delaware (together with its successors and assigns, “Sacramento Subtenant”; and collectively with Menlo Park Subtenant, Fairfield Subtenant and Belmont Subtenant, “Tranche 1 Subtenant”), COSL Napa RG, LP, a limited partnership organized under the laws of the State of Delaware (together with its successors and assigns, “Napa RG Subtenant”), COSL Napa CCN, LP, a limited partnership organized under the laws of the State of Delaware (together with its successors and assigns, “Napa CCN Subtenant”), and COSL Sonoma, LP, a limited partnership organized under the laws of the State of Delaware (together with its successors and assigns, “Sonoma Subtenant”, and collectively with Napa RG Subtenant and Napa CCN Subtenant, “Tranche 2 Subtenant”, and collectively with Tranche 1 Subtenant, “Subtenant”). 
RECITALS
A.    Colonial Oaks Senior Living Holdco, LLC, a Delaware limited liability company (“Colonial”), Nazareth Classic Care Community LLC, a California limited liability company (“Nazareth Menlo Park Seller”), and Nazareth Classic Care Community, Inc., a California S corporation (“Nazareth Menlo Park Operator”, and together with Nazareth Menlo Park Seller, “Menlo Park Sellers”) are parties to that certain Purchase and Sale Agreement and Joint Escrow Instructions dated March 6, 2017 (as amended prior to and after the date hereof, the “Menlo Park PSA”) pursuant to which the Menlo Park Sellers have agreed to sell to Colonial, and Colonial has agreed to purchase from the Menlo Park Sellers, the facility located at 800 Roble Avenue, Menlo Park, California and commonly known as Nazareth Classic Care Menlo Park 

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(the “Menlo Park Facility”) together with the other Property (as said term is defined in the Menlo Park PSA) relating thereto.
B.    Colonial, Nazareth Classic Care of Fairfield, LLC, a California limited liability company (“Nazareth Fairfield Seller”), and Nazareth Classic Care of Fairfield, Inc., a California S corporation (“Nazareth Fairfield Operator”, and together with Nazareth Fairfield Seller, “Fairfield Sellers”) are parties to that certain Purchase and Sale Agreement and Joint Escrow Instructions dated March 6, 2017 (as amended prior to and after the date hereof, the “Fairfield PSA”) pursuant to which the Fairfield Sellers have agreed to sell to Colonial, and Colonial has agreed to purchase from the Fairfield Sellers, the facility located at 1095 E. Tabor Avenue, Fairfield, California and commonly known as Nazareth Classic Care Fairfield (the “Fairfield Facility”) together with the other Property (as said term is defined in the Fairfield PSA) relating thereto.
C.    Colonial and Nazareth Vista, LLC, a California limited liability company (“Belmont Seller”) are parties to that certain Purchase and Sale Agreement and Joint Escrow Instructions dated March 6, 2017 (as amended prior to and after the date hereof, the “Belmont PSA”) pursuant to which the Belmont Seller has agreed to sell to Colonial, and Colonial has agreed to purchase from the Belmont Seller, the facility located at 900 Sixth Avenue, Belmont, California and commonly known as Nazareth Vista Belmont (the “Belmont Facility”) together with the other Property (as said term is defined in the Belmont PSA) relating thereto.
D.    Colonial, Nazareth Park Place, LLC, a California limited liability company (“Nazareth Sacramento Seller”), and Nazareth Park Place, Inc., a California S corporation (“Nazareth Sacramento Operator”, and together with Nazareth Sacramento Seller, “Sacramento Sellers”) are parties to that certain Purchase and Sale Agreement and Joint Escrow Instructions dated March 6, 2017 (as amended prior to and after the date hereof, the “Sacramento PSA”, and collectively with the Menlo Park PSA, Belmont PSA, and Fairfield PSA, the “Tranche 1 PSAs”) pursuant to which the Sacramento Sellers have agreed to sell to Colonial, and Colonial has agreed to purchase from the Sacramento Sellers, the facility located at 1922 Morse Avenue, Sacramento, California and commonly known as Nazareth Park Place Sacramento (the “Sacramento Facility”) together with the other Property (as said term is defined in the Sacramento PSA) relating thereto.
E.    Colonial, Nazareth Rose Garden of Napa, LLC, a California limited liability company (“Nazareth Napa ALF Seller”), and Nazareth Rose Garden of Napa, Inc., a California S corporation (“Nazareth Napa ALF Operator”, and together with Nazareth Napa ALF Seller, “Napa ALF Sellers”) are parties to that certain Purchase and Sale Agreement and Joint Escrow Instructions dated March 6, 2017 (as amended prior to and after the date hereof, the “Napa ALF PSA”) pursuant to which the Napa ALF Sellers have agreed to sell to Colonial, and Colonial has agreed to purchase from the Napa ALF Sellers, the facility located at 903 Saratoga Drive, Napa, California and commonly known as Nazareth Rose Garden of Napa (the “Napa ALF Facility”) together with the other Property (as said term is defined in the Napa ALF PSA) relating thereto.
F.    Colonial, Napa Skilled Nursing Center, LLC, a California limited liability company (“Nazareth Napa MC Seller”), and Nazareth Classic Care of Napa, Inc., a California S corporation (“Nazareth Napa MC Operator”, and together with Nazareth Napa MC Seller, 

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“Napa MC Sellers”) are parties to that certain Purchase and Sale Agreement and Joint Escrow Instructions dated March 6, 2017 (as amended prior to and after the date hereof, the “Napa MC PSA”) pursuant to which the Napa MC Sellers have agreed to sell to Colonial, and Colonial has agreed to purchase from the Napa MC Sellers, the facility located at 2465 Redwood Road, Napa, California and commonly known as Nazareth Classic Care Napa (the “Napa MC Facility”) together with the other Property (as said term is defined in the Napa MC PSA) relating thereto.
G.    Colonial, Nazareth Agua Caliente Villa, LLC, a California limited liability company (“Nazareth Sonoma Seller”), and Nazareth Agua Caliente Villa, Inc., a California S corporation (“Nazareth Sonoma Operator”, and together with Nazareth Sacramento Seller, “Sonoma Sellers”, and collectively with the Menlo Park Sellers, Fairfield Sellers, Belmont Seller, Sacramento Sellers, Napa ALF Sellers and Napa MC Sellers, “Sellers”) are parties to that certain Purchase and Sale Agreement and Joint Escrow Instructions dated March 6, 2017 (as amended prior to and after the date hereof, the “Sonoma PSA”, and collectively with the Napa ALF PSA and Napa MC PSA, the “Tranche 2 PSAs”, and collectively with the Tranche 1 PSAs, the “PSAs”) pursuant to which the Sonoma Sellers have agreed to sell to Colonial, and Colonial has agreed to purchase from the Sonoma Sellers, the facility located at 17250 Vailetti Drive, Sonoma, California and commonly known as Nazareth Agua Caliente Retirement Community (the “Sonoma Facility”, and collectively with the Menlo Park Facility, the Fairfield Facility, the Belmont Facility, the Sacramento Facility, the Napa ALF Facility and the Napa MC Facility, the “Facilities”) together with the other Property (as said term is defined in the Sonoma PSA) relating thereto.
H.    Simultaneous with the execution of this Agreement, Colonial, Menlo Park Subtenant and Griffin Menlo Park Buyer entered into that certain Assignment of Asset Purchase Agreement dated of even date herewith pursuant to which Colonial assigned to (i) Griffin Menlo Park Buyer certain of the rights, title and interests of Colonial under the Menlo Park PSA, including the right to acquire the Real Property Assets, and (ii) Menlo Park Subtenant certain of the rights, title and interests of Colonial under the Menlo Park PSA, including the right to acquire the Operating Assets (the “Menlo Park Assignment”).
I.    Simultaneous with the execution of this Agreement, Colonial, Fairfield Subtenant and Griffin Fairfield Buyer entered into that certain Assignment of Asset Purchase Agreement dated of even date herewith pursuant to which Colonial assigned to (i) Griffin Fairfield Buyer certain of the rights, title and interests of Colonial under the Fairfield PSA, including the right to acquire the Real Property Assets, and (ii) Fairfield Subtenant certain of the rights, title and interests of Colonial under the Fairfield PSA, including the right to acquire the Operating Assets (the “Fairfield Assignment”).
J.    Simultaneous with the execution of this Agreement, Colonial, Belmont Subtenant and Griffin Belmont Buyer entered into that certain Assignment of Asset Purchase Agreement dated of even date herewith pursuant to which Colonial assigned to (i) Griffin Belmont Buyer certain of the rights, title and interests of Colonial under the Belmont PSA, including the right to acquire the Real Property Assets, and (ii) Belmont Subtenant certain of the rights, title and interests of Colonial under the Belmont PSA, including the right to acquire the Operating Assets (the “Belmont Assignment”).

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K.    Simultaneous with the execution of this Agreement, Colonial, Sacramento Subtenant and Griffin Sacramento Buyer entered into that certain Assignment of Asset Purchase Agreement dated of even date herewith pursuant to which Colonial assigned to (i) Griffin Sacramento Buyer certain of the rights, title and interests of Colonial under the Sacramento PSA, including the right to acquire the Real Property Assets, and (ii) Sacramento Subtenant certain of the rights, title and interests of Colonial under the Sacramento PSA, including the right to acquire the Operating Assets (the “Sacramento Assignment”).
L.    Simultaneous with the execution of this Agreement, Colonial, Napa RG Subtenant and Griffin Napa ALF Buyer entered into that certain Assignment of Asset Purchase Agreement dated of even date herewith pursuant to which Colonial assigned to (i) Griffin Napa ALF Buyer certain of the rights, title and interests of Colonial under the Napa ALF PSA, including the right to acquire the Real Property Assets, and (ii) Napa RG Subtenant certain of the rights, title and interests of Colonial under the Napa ALF PSA, including the right to acquire the Operating Assets (the “Napa ALF Assignment”).
M.    Simultaneous with the execution of this Agreement, Colonial, Napa CCN Subtenant and Griffin Napa MC Buyer entered into that certain Assignment of Asset Purchase Agreement dated of even date herewith pursuant to which Colonial assigned to (i) Griffin Napa MC Buyer certain of the rights, title and interests of Colonial under the Napa MC PSA, including the right to acquire the Real Property Assets, and (ii) Napa CCN Subtenant certain of the rights, title and interests of Colonial under the Napa MC PSA, including the right to acquire the Operating Assets (the “Napa MC Assignment”).
N.    Simultaneous with the execution of this Agreement, Colonial, Sonoma Subtenant and Griffin Sonoma Buyer entered into that certain Assignment of Asset Purchase Agreement dated of even date herewith pursuant to which Colonial assigned to (i) Griffin Sonoma Buyer certain of the rights, title and interests of Colonial under the Sonoma PSA, including the right to acquire the Real Property Assets, and (ii) Sonoma Subtenant certain of the rights, title and interests of Colonial under the Sonoma PSA, including the right to acquire the Operating Assets (the “Sonoma Assignment”, and collectively with the Menlo Park Assignment, Fairfield Assignment, Belmont Assignment, Sacramento Assignment, Napa ALF Assignment and Napa MC Assignment, the “Assignment”). 
O.    Griffin and Tenant intend to enter into two amendments to that certain Master Lease, dated as of December 1, 2016 (the “Master Lease”), between GAHC4 Lafayette LA ALF, LLC (“ALF Landlord”), GAHC4 Lafayette LA MC, LLC (“MC Landlord”, and collectively with ALF Landlord, “Master Landlord”), pursuant to which Griffin shall lease to Tenant certain additional assets, including the Real Property Assets, acquired pursuant to the Tranche 1 PSAs and the Tranche 2 PSAs, respectively. 
P.    Griffin, Tenant and Subtenant desire to state their agreement regarding the Required Closing Documents (as defined below) to be executed and delivered by Buyer, Tenant, Colonial Oaks Assisted Living Lafayette, LLC, a Delaware limited liability company (“Rosewood Subtenant”), Colonial Oaks Memory Care Lafayette, LLC, a Delaware limited liability company (“Cedar Crest Subtenant”, and collectively with Rosewood Subtenant, the “Current Subtenants”), Subtenant and each of their respective affiliates named therein, and 

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certain other matters as between them in connection with the closing under each of the PSAs (the Closing under the Tranche 1 PSAs, the “Tranche 1 Closing”, the Closing under the Tranche 2 PSAs, the “Tranche 2 Closing”, and collectively with the Tranche 1 Closing, the “Closing”).
AGREEMENTS
NOW, THEREFORE, for and in consideration of the sum of Ten and No/100 Dollars ($10.00), in hand paid, and the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereby, intending to be legally bound, agree as follows:
1.    Required Closing Documents.  Griffin, Tenant and Subtenant hereby acknowledge and agree that, in connection with the consummation of each Closing, Griffin, Tenant, Current Subtenants and Subtenant shall execute and deliver, or (as appropriate or required) shall cause their respective affiliates to execute and deliver, the documents listed below where each is a party thereto (collectively, the “Required Closing Documents”):
a.    Tranche 1 Closing:  At the Tranche 1 Closing, each of the following documents shall be executed and delivered in the form and substance as indicated below, and, if not utilizing a form used in connection with the original Master Lease, otherwise reasonably acceptable to Griffin and Tenant: 
1)    Amendment to Master Lease (to be signed by Griffin Tranche 1 Buyer, Tenant and Master Landlord) in the form attached hereto as Exhibit A;
2)    Affirmation of and Amendment to, or (at Griffin’s election) an Amendment and Restatement of, the Guaranty of Master Lease Agreement (to be signed by Colonial Oaks Senior Living, LLC, a Delaware limited liability company (“Manager”)), which shall include, among other things, the following:
The first sentence of Section 3(c) is hereby deleted in its entirety and replaced with the following: 

“Guarantor and COSL California, LLC, a Delaware limited liability company (“New Manager”), shall maintain, in the aggregate, a Tangible Net Worth (as hereinafter defined) of not less than (i) beginning on June 1, 2019, Two Million and No/100 Dollars ($2,000,000.00) and (ii) beginning on June 1, 2020, Four Million Two Hundred Thousand and No/100 Dollars ($4,200,000) (collectively, the “Minimum Tangible Net Worth Requirement”) (provided that, for purposes of determining Guarantor’s and New Manager’s Tangible Net Worth, the portion of Tenant’s cash held by the Letter of Credit issuer and pledged as collateral for the Letter of Credit under the Lease shall be included). Further, the Minimum Tangible Net Worth Requirement shall immediately increase commensurate with any additional funding of Tenant Improvement Allowance from Landlord to or for the benefit of Tenant based on the equivalent increase in Base Rent resulting from such deployment.”
3)     Guaranty of Master Lease Agreement (to be signed by COSL California, LLC, a Delaware limited liability company (“New Manager”);

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4)    Affirmation of and Amendment to, or (at Griffin’s election) an Amendment and Restatement of, the Guaranty of Master Lease Agreement (to be signed by Carl Mittendorff), which shall include, among other things, the following:
The words “Two Million and No/100 Dollars ($2,000,000.00)” in the seventh line of the second paragraph of Section 1 are hereby deleted and replaced with Four Million Two Hundred Thousand and No/100 Dollars ($4,200,000.00)” and, for purposes of Section 1, the Tangible Net Worth shall be that of Colonial Guarantor and COSL California, LLC, a Delaware limited liability company, in the aggregate.
5)    Guaranty of Seniors Investments II, LLC (“Seniors 2”)  in the same form as the Guaranty of Master Lease Agreement executed by Manager; 
6)    Subordination of Management Agreement (to be signed by Griffin Tranche 1 Buyer, Tenant, Tranche 1 Subtenant, Manager and New Manager) in the same form as the Subordination of Management Agreement executed in connection with the Master Lease;   
7)    Security Agreements (to be signed by each of Menlo Park Subtenant, Fairfield Subtenant, Belmont Subtenant and Sacramento Subtenant and the applicable Griffin Tranche 1 Closing affiliate) in the same form as the Security Agreement executed by Current Subtenants in connection with the Master Lease; and
8)    New Manager and each of Menlo Park Subtenant, Fairfield Subtenant, Belmont Subtenant and Sacramento Subtenant shall enter into the Interim Lease and the Interim Management Agreement as required by the Tranche 1 PSAs.
b.    Tranche 2 Closing: At the Tranche 2 Closing, each of the following documents shall be executed and delivered in the form and substance as indicated below, and otherwise reasonably acceptable to Griffin:
1)    Second Amendment to Master Lease (to be signed by Griffin Tranche 2 Buyer, Tenant and Master Landlord) in the form attached hereto as Exhibit A];
2)    Affirmation of and Amendment to, or (at Griffin’s election) an Amendment and Restatement of, the Guaranty of Master Lease Agreement (to be signed by Manager), which shall include, among other things, the following:
The first sentence of Section 3(c) is hereby deleted in its entirety and replaced with the following:
“Guarantor and COSL California, LLC, a Delaware limited liability company (“New Manager”), shall maintain, in the aggregate, a Tangible Net Worth (as hereinafter defined) of not less than (i) beginning on June 1, 2019, Two Million and No/100 Dollars ($2,000,000.00) and (ii) beginning on June 1, 2020, Five Million One Hundred Thousand and No/Dollars ($5,100,000) (collectively, the “Minimum Tangible Net Worth Requirement”) (provided that, for purposes of determining Guarantor’s and New Manager’s Tangible Net Worth, the portion of Tenant’s cash held by the Letter of Credit issuer and pledged as collateral for the Letter of Credit under the Lease shall be included). Further, the Minimum Tangible Net 

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Worth Requirement shall immediately increase commensurate with any additional funding of Tenant Improvement Allowance from Landlord to or for the benefit of Tenant based on the equivalent increase in Base Rent resulting from such deployment”.
3)    Affirmation of and Amendment to, or (at Griffin’s election) an Amendment and Restatement of, the Guaranty of Master Lease Agreement (to be signed by New Manager); 
4)    Affirmation of and Amendment to, or (at Griffin’s election) an Amendment and Restatement of, the Guaranty of Master Lease Agreement (to be signed by Carl Mittendorff);
5)    Affirmation of and Amendment to, or (at Griffin’s election) an Amendment and Restatement of, the Guaranty of Master Lease Agreement (to be signed by Seniors 2);
6)    Subordination of Management Agreement (to be signed by Griffin Tranche 2 Buyer, Tenant, Tranche 2 Subtenant, Manager and New Manager) in the same form as the Subordination of Management Agreement executed in connection with the Master Lease;
7)    Security Agreements (to be signed by each of Napa RG Subtenant, Napa CCN Subtenant and Sonoma Subtenant and the applicable Griffin Tranche 1 Closing affiliate) in the same form as the Security Agreement executed by Current Subtenants in connection with the Master Lease; and
8)    New Manager and each of Napa RG Subtenant, Napa CCN Subtenant and Sonoma Subtenant shall enter into the Interim Lease and the Interim Management Agreement as required by the Tranche 2 PSAs.
c.    In addition, each of the following documents shall be executed and delivered at each of the Tranche 1 Closing and the Tranche 2 Closing, in the same form and in the substance as was used in connection with the Master Lease, or as otherwise approved by Griffin and Tenant, in their reasonable discretion:
1)    Each Subtenant shall execute and deliver a Sublease Agreement pursuant to which Subtenant agrees to perform all of the obligations of Tenant under the Master Lease as the same pertain to the Subtenant’s Facility, and such other terms and conditions reasonably required by the parties;
2)    If, at Closing, Tenant or a Subtenant grants to a Working Capital Lender (as said term shall be defined in the Master Lease) a security interest in some or all of the Tenant Personal Property, Health Care Licenses and/or Provider Agreements (as said terms shall be defined in the Master Lease), an inter-creditor agreement required by the Master Lease;
3)    Each Subtenant shall execute and deliver a Guaranty of Master Lease Agreement; 

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4)    At the request of any party, Griffin, Tenant, Current Subtenant, Subtenant, Manager and New Manager shall execute and deliver for themselves and their respective affiliates such resolutions, incumbency certificates and certificates of good standing as the other party may reasonably require to evidence the customary authorizations and consents required to consummate the Closing; and
5)    Any additional documents that Griffin, Tenant, Current Subtenant and Subtenant may reasonably require from the other for the proper consummation of the Closing and the transaction contemplated in connection therewith, including an affirmation by the parties to the documents executed in connection with the Master Lease, provided the same are customary for transactions such as this one and do not increase or enlarge a party’s obligations or liability hereunder.
2.    Covenants, Representations and Warranties.
a.    No Brokerage Commissions. 
1)    Griffin warrants and represents to Tenant and Subtenant that it has not dealt with any real estate broker or finder in connection with the transactions set forth in this Agreement or the PSAs other than Seller’s agent, if any, and no commission or finder’s fee is due any broker or agent representing Griffin.  Griffin hereby indemnifies and holds harmless Tenant and Subtenant from all liability, expense, loss, cost, or damage, including reasonable attorneys’ fees that may arise by reason of any claim, demand, or suit arising out of facts constituting a breach of the foregoing representation and warranty.  
2)    Tenant and Subtenant each represents and warrants to Griffin that it has not dealt with any real estate agent, broker or finder in connection with the transactions set forth in this Agreement or the PSA other than Seller’s agent, and no commission or finder’s fee is due any broker or agent representing Tenant, Subtenant or any other party.  Tenant and Subtenant each hereby indemnifies and holds harmless Griffin from all liability, expense, loss, cost, or damage, including reasonable attorneys’ fees, that may arise by reason of any claim, demand or suit arising out of any facts constituting a breach of the foregoing representation and warranty.  
b.    Licensure.  Subtenant shall use commercially reasonable efforts to obtain all Required Governmental Approvals (as defined in each PSA) either as of or as soon as reasonably practicable after the Closing Date.
c.    Due Diligence Materials.  Tenant and Subtenant each represents and warrants to Griffin that they have made available to Griffin all due diligence materials provided to Tenant and/or Subtenant by Seller.
3.    Due Deposit and Diligence Expenses.  
a.    Deposit.  Following the full execution of this Agreement and the Assignment (including the consent thereto executed by Sellers) Griffin shall pay the balance of the Deposit due under each of the PSAs in the manner and within the time frame required by the PSAs.

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b.    Expenses.  Except as expressly provided to the contrary in this Section, Tenant and Subtenant each shall be solely responsible for and shall pay all of the costs, fees and expenses incurred by Colonial, Tenant and/or Subtenant in connection with their own due diligence, inspection and assessment of the Property (as defined in each PSA), the business conducted thereon, and the assets they or their affiliates acquire under the PSAs.  Griffin hereby agrees that it shall be solely responsible for and shall pay all of the costs, fees and expenses incurred by Griffin in connection with its inspection and assessment of the Assets, the business conducted thereon, and the assets it or its affiliates acquire under the PSAs.  Notwithstanding the foregoing, Griffin shall reimburse Colonial (a) at the Tranche 1 Closing, the sum of $28,572, said payment being made to reimburse Colonial for the aggregate initial Deposit paid by Colonial under the Tranche 1 PSAs, which amount shall be retained by Griffin and applied against any additional security deposit requirement under the Master Lease Amendment; and (b) at the Tranche 2 Closing, the sum of $21,429, said payment being made to reimburse Colonial for the aggregate initial Deposit paid by Colonial under the Tranche 2 PSAs, provided, however, that Griffin shall retain the entirety of said amounts pursuant to the First Master Lease Amendment and Second Master Lease Amendment, as applicable, and shall hold such retained amounts as additional security under the Master Lease until Tenant delivers to Master Landlord the letter of credit required under each of the First Master Lease Amendment and Second Master Lease Amendment.  Other than as aforesaid, Griffin shall have no obligation to pay or reimburse Carl Mittendorff, Colonial, Tenant, Subtenant, Current Subtenant, Manager, New Manager or any of their respective affiliates for any cost or expense incurred by them in connection with the PSAs, the transactions contemplated by them or otherwise. 
4.    Indemnification.  
a.    Indemnity Allocation under the PSA. 
1)    Seller Claims against any Griffin Indemnified Party.  Tenant and Subtenant each hereby agrees to indemnify, defend and hold harmless Griffin and its affiliates, and its and their respective partners, shareholders, members, directors, managers, officers, employees, agents, successors and assigns (collectively, the “Griffin Indemnified Parties”) from and against any damages, losses, taxes, liabilities, claims, judgments, penalties, causes of action, investigations, audits, demands, assessments, adjustment, settlement payments, deficiencies, fines, diminutions in value, costs and expenses (including without limitation reasonable attorney’s fees and court costs) (collectively “Claims”) to the extent arising as a result of or in connection with:  (A) any material breach or inaccuracy of any of the representations or warranties made by any Tenant Indemnified Party (as defined herein) in or pursuant to the PSAs or in any agreement, instrument, certificate or affidavit delivered by any Tenant Indemnified Party to any Seller in connection therewith or in any Exhibit, Schedule, certificate, or other executed document furnished or to be furnished to any Seller thereunder, (B) any failure by any Tenant Indemnified Party to carry out, perform, satisfy and discharge in any material respect any covenant, agreement, undertaking, liability or obligation of any Tenant Indemnified Party under the PSAs, whether prior or subsequent to Closing, or in any instrument, certificate or affidavit delivered by any Tenant Indemnified Party to any Seller at or in connection with the Closings, or (C) any indemnification obligation asserted by any Seller or its successors and assigns and their respective agents, employees, officers and partners against Griffin Indemnified Parties to the extent arising as a result of or in connection with (including 

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with respect to any breach of) the obligations and/or liabilities of Tenant and/or Subtenant or any of their respective affiliates set forth in either PSA (including, without limitation, the indemnity provisions in favor of the Sellers set forth therein as the same have been assigned to Tenant or Subtenant) (any of the foregoing, a “Tenant Indemnification Obligation”).  
2)    Griffin hereby agrees to indemnify, defend and hold harmless Tenant, Subtenant and their affiliates, and its and their respective partners, shareholders, members, directors, managers, officers, employees, agents, successors and assigns (collectively, the “Tenant Indemnified Parties”) from and against any Claims to the extent arising as a result of or in connection with:  (A) any material breach or inaccuracy of any of the representations or warranties made by any Griffin Indemnified Party in or pursuant to the PSAs, whether prior or subsequent to Closing, or in any agreement, instrument, certificate or affidavit delivered by any Griffin Indemnified Party to any Seller in connection therewith or in any Exhibit, Schedule, certificate, or other executed document furnished or to be furnished to any Seller thereunder, (B) any failure by any Griffin Indemnified Party to carry out, perform, satisfy and discharge in any material respect any covenant, agreement, undertaking, liability or obligation of any Griffin Indemnified Party under the PSAs or in any instrument, certificate or affidavit delivered by any Griffin Indemnified Party to any Seller at or in connection with the Closing, or (C) any indemnification obligation asserted by any Seller or its successors and assigns and their respective agents, employees, officers and partners against Tenant Indemnified Parties to the extent arising as a result of or in connection with (including with respect to any breach of) the obligations and/or liabilities of Griffin or any of its affiliates set forth in either PSA (including, without limitation, the indemnity provisions in favor of the Sellers set forth therein as the same have been assigned to Griffin)  (any of the foregoing, a “Griffin Indemnification Obligation”).
3)    The parties hereto acknowledge that the post-Closing indemnification obligations of Sellers under the PSAs are supported by a Holdback Escrow pursuant to a Holdback Escrow Agreement (as such capitalized terms are defined in each PSA).  To the extent that the parties are successful in pursuing a Claim under the PSAs, funds from the Seller (whether from the Holdback Escrow or otherwise) will first be paid to Griffin, and Griffin will determine in its reasonable discretion whether (a) such funds are required by Tenant and/or the applicable Subtenant for operation of the applicable Facility, in which case such funds will be promptly delivered to Tenant or (b) not required by Tenant and/or the applicable Subtenant for operation of the applicable Facility, but rather payable to Griffin as a result of a diminution of value of the applicable Facility, in which case Griffin shall retain such funds and rent payable under the Master Lease shall be reduced by such amount that shall reflect a reduction in Griffin’s underlying initial capital investment in the applicable Facility on a dollar for dollar basis (but excluding any amount that Griffin actually expends in connection with the pursuit, cure or repair of the issue underlying such Claim).  To the extent a Claim relates to a matter covered by both of subclauses (a) and (b) of this Section, then Griffin shall make such recovered funds available to Tenant and/or the applicable Subtenant only for payment of third-party costs and expenses actually incurred related to such Claim, or which they are otherwise obligated under the Master Lease to incur. 
4)    Pursuing and Defending Indemnity Claims under the PSAs.  Griffin shall notify Tenant and Subtenant in writing as promptly as practicable (but in all events within 30 days) of any indemnification obligation which has been or may reasonably be expected 

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to be asserted by any Seller Indemnified Party against any Griffin Indemnified Party, or by any Griffin Indemnified Party against any Seller, under the PSAs, and Tenant shall notify Griffin in writing as promptly as practicable (but in all events within 30 days) of any indemnification obligation which has been or may reasonably be expected to be asserted by any Seller Indemnified Party against any Tenant Indemnified Party, or by any Tenant Indemnified Party against any Seller, under the PSAs; provided, however, that the failure to give such notice in a timely fashion shall not result in the loss of the rights of, or result in any liability to, the notifying party with respect thereto except to the extent the other party is materially prejudiced by such delay.  Subject to the provisos to this sentence, Griffin shall have the right (but not the obligation) to fully assume, commence, control and pursue the prosecution or defense of any such indemnification Claim under the PSAs; provided, however, that (A) Tenant and the applicable Subtenant shall have the right to participate in such prosecution or defense at its own cost and expense; (B) Griffin shall not settle any such indemnification Claim for and on behalf of any Tenant Indemnified Party or in respect of any Griffin Indemnification Obligation without the prior written consent of Tenant and the applicable Subtenant (which consent shall not be unreasonably withheld or delayed), and (C) Tenant and/or the applicable Subtenant shall have the right (but not the obligation) to fully assume, commence, control and pursue the prosecution or defense of any such indemnification Claim to the extent relating any Tenant Indemnification Obligation or to Losses and Liabilities (as defined in the PSA) exclusively suffered or incurred (or expected to be suffered or incurred) by any Tenant Indemnified Party in respect of any breach of any covenant, agreement or undertaking made by any Seller which is to be performed after the Closing that relates to the operation of a Facility, regardless of whether such Losses and Liabilities also give rise to Claims against any Seller for any breach, inaccuracy, misrepresentation or omission in any of the representations or warranties made by any Seller.  Should Griffin decline to assume the prosecution or defense of any indemnification Claim under the PSAs, or if, following such assumption, Griffin fails to diligently pursue such prosecution or defense, Tenant or the applicable Subtenant may elect to fully assume, commence, control and pursue the same, provided, however, that with respect to the prosecution or defense of any indemnification Claim properly assumed by Tenant or the applicable Subtenant under this Section, neither Tenant nor a Subtenant shall settle any such indemnification Claim for and on behalf of any Griffin Indemnified Party or in respect of any Tenant Indemnification Obligation without the prior written consent of Griffin (which consent shall not be unreasonably withheld or delayed).  Each of the parties hereto shall cooperate reasonably with and render reasonable assistance to the other in the prosecution or defense of any indemnification Claims under the PSA.  Notwithstanding the foregoing, if an Event of Default exists under the Master Lease, then any recovery for a Claim against Seller, whether made by any Griffin Indemnified Party or any Tenant Indemnified Party shall, at the election of Griffin, be applied to amounts owed under the Master Lease. Additionally, (i) Tenant or a Subtenant hereby waive any rights or remedies they may have against a Landlord Indemnified Party pursuant to the Master Lease to the extent of any proceeds they receive from Seller for Claims relating to such Master Lease rights and remedies and (ii) to the extent Landlord recovers from Seller proceeds for any Claims it may have against Seller, Landlord waives any right to recover the same amount from Tenant pursuant to remedies it may have against Tenant under the Master Lease.
5)    Indemnification in respect of Deposit Forfeiture.

11

(i)    If the Closing does not occur under the PSAs as a result of a default by Tenant, Subtenant or any of their affiliates under the PSAs and/or this Agreement,  including, (a) the failure by Tenant, Subtenant, Manager, New Manager and their affiliates to execute and deliver all of the Required Closing Documents that each is required to execute and deliver; and (b) as a result of the failure of Colonial and/or its affiliates to consummate the Closing due to a failure to complete the acquisition of some or all of the so-called “Other Properties” located in California (referenced in Section 9.1.17 of the PSAs), and if as a result of such default (A) Seller and/or Griffin terminate(s) the PSAs, and (B) Seller receives, or is entitled to receive, the Deposit (or any portion thereof) that Griffin or any of its affiliates has funded under the PSAs, or such other amount that Griffin or any of its affiliates has paid or is required to pay Seller pursuant to the PSAs (collectively, the “Griffin Forfeited Funds”), then Tenant, Subtenant, Current Subtenant, Manager, New Manager and, by joinder to this Agreement, Carl Mittendorff, shall indemnify Griffin for and, within thirty (30) days after receipt of written notice from Griffin, pay by wire transfer of immediately available funds to such account(s) designated by Griffin an amount equal to, the Griffin Forfeited Funds, plus the reasonable, actual and documented expenses incurred by Griffin directly in connection with the transaction described in the PSAs and this Agreement, plus an amount equal to Griffin’s actual cost, if any, to collect any or all of said amounts, and the failure of said parties to timely do so shall constitute an automatic Event of Default under the Master Lease.  The preceding sentence shall apply to a termination by Seller where Griffin does not complete Closing where such completion is rendered impossible or impractical by the default or failure of Tenant, Subtenant or any of their affiliates. 
(ii)    If the Closing does not occur under the PSAs as a result of a default by Griffin or any of its affiliates under the PSAs and/or this Agreement, including, (a) the failure by Griffin and their affiliates to execute and deliver all of the Required Closing Documents that each is required to execute and deliver; and (b) as a result of the failure of Griffin to consummate the Closing due to the failure of Colonial and/or its affiliates to consummate the acquisition of some or all of the Other Properties, and if as a result of such default (A) Seller and/or Tenant terminate(s) the PSAs, and (B) Seller receives, or is entitled to receive, the Deposit (or any portion thereof) that Tenant or any of its affiliates has funded under the PSAs, or such other amount that Tenant or any of its affiliates has paid Seller pursuant to the PSAs (collectively, the “Tenant Forfeited Funds”) Griffin shall indemnify Tenant for and, within thirty (30) days after receipt of written notice from Tenant, pay by wire transfer of immediately available funds to such account(s) designated by Tenant an amount equal to the Tenant Forfeited Funds, plus the reasonable, actual and documented expenses incurred by Colonial, Tenant and/or Subtenant directly in connection with the transaction described in the PSA and this Agreement plus an amount equal to Colonial’ actual cost, if any, to collect any or all of said amounts.  The preceding sentence shall apply to a termination by Seller where Tenant does not complete Closing where such completion is rendered impossible or impractical by the default or failure of Griffin or any of its affiliates.
b.    Default Indemnification Procedures under this Agreement.  With respect to any Claim subject to indemnification hereunder, the party asserting a right to indemnification in respect thereof (the “Indemnified Party”) shall notify the party liable for such indemnification (the “Indemnifying Party”) in writing of such Claim as promptly as practicable (but in all events within 30 days) after the Indemnified Party becomes aware of such Claim; 

12

provided, however, that the Indemnified Party’s failure to give such notice to the Indemnifying Party in a timely fashion shall not result in the loss of the Indemnified Party’s rights with respect thereto except to the extent the Indemnifying Party is materially prejudiced by the delay.  With respect to any such Claim that is finally determined to be subject to indemnification hereunder, the Indemnifying Party shall satisfy its obligations in respect thereof within thirty (30) days after such final determination.
c.    Interest.  If any amount payable by any Indemnifying Party in respect of a Claim that is finally determined to be subject to indemnification hereunder is not paid when due, such unpaid amount shall bear interest at an interest rate equal to a margin of 2% plus the “Prime Rate” as published by the Wall Street Journal (Eastern edition) under its Money Rates column and specified as the base rate on corporate loans at large U.S. commercial banks or, if it no longer publishes such, the rate of interest announced from time to time by Well Fargo Bank as its prime rate, base rate or reference rate.
5.    PSA Actions and Termination Elections.  Neither Tenant, Griffin nor any of their respective affiliates shall cause or permit an affiliate to modify, amend, terminate or waive any rights with respect to, the PSAs without first obtaining the written consent of the other party.  In the event either party elects to terminate the PSAs, such party (the “Terminating Party”) shall provide prompt written notice (a “Termination Notice”) of the foregoing to the other party (the “Continuing Party”) upon which the Continuing Party shall have the right to assume the Terminating Party’s partial interest in the PSAs by delivering notice of such election (a “Take-Over Notice”) to the Terminating Party within two (2) business days of the Continuing Party’s receipt of the Termination Notice.  In such event, (i) the Terminating Party shall assign its partial interest as Buyer under the PSAs to the Continuing Party or its designee and (ii) the Continuing Party shall reimburse the Terminating Party for the portion of the Deposits previously paid by the Terminating Party. 
6.    Specific PSA Provisions.  
a.    Funding of Master Lease Reserves:  At the Closings, Tenant will fund into escrow (in accordance with the terms of the Master Lease) such amount as may be required to establish the reserve for Impositions and insurance premiums required thereby.  
b.    Prorations under the PSAs.  Griffin, Tenant and Subtenant agree that any prorations and credits provided for in the PSAs (whether determined at or subsequent to Closing) are payable to or from Subtenant, as Buyer, and all such amounts shall be paid directly to the applicable Subtenant (with respect to sums payable by Seller) and by the applicable Subtenant (with respect to sums payable to Seller).
7.    Miscellaneous.
a.    Entire Agreement; Counterparts; Amendments.  This Agreement, the PSAs and the Assignment constitute the entire agreement between the parties hereto with respect to the subject matter set forth herein, and it supersedes all prior understandings or agreements between the parties.  In the event of an inconsistency between the terms of this Agreement and the terms of the PSAs or the Assignment, the terms of this Agreement shall control.  This 

13

Agreement may be executed in one (1) or more duplicate original counterparts, each of which shall be effective as and shall constitute an original document binding upon the party or parties signing the same.  Signatures delivered in electronic form (e.g. vie electronic mail or facsimile) shall be valid for all purposes.
b.    Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the parties hereto, and their respective heirs, devisees, personal representatives, successors and assigns.
c.    Waiver; Modification.  Failure by Griffin, Tenant or Subtenant to insist upon or enforce any of its rights shall not constitute a waiver thereof.  Either party hereto may waive the benefit of any provision or condition for its benefit contained in this Agreement.  No oral modification hereof shall be binding upon the parties, and any modification shall be in writing and signed by the parties.
d.    Time of Essence.  TIME IS OF THE ESSENCE OF THIS AGREEMENT.
e.    Construction.  Each party hereto hereby acknowledges that all parties hereto participated equally in the drafting of this Agreement and that, accordingly, no court construing this Agreement shall construe it more stringently against one party than the other.
f.    Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of California, without application of its conflict of laws provisions.
g.    Assignment.  The parties hereto shall not assign this Agreement or their interest in the PSAs, in whole or in part, without the prior written consent of the other party, except to an affiliate.  Neither Griffin, Tenant nor Subtenant (nor their applicable affiliates) shall assign their respective interests under the PSA without the prior written consent of the other party except (i) pursuant to the Assignment or (ii) with respect to a further assignment to an affiliate. 
h.    Schedules and Exhibits.  All schedules and exhibits attached to this Agreement are incorporated into this Agreement by this reference and made a part of this Agreement as if fully set forth herein.
i.    Specific Performance.  The parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.  The parties further agree that (i) by seeking the remedies provided for in this Section 7(i), a party shall not in any respect waive its right to seek any other form of relief that may be available to a party under this Agreement, including monetary damages and (b) nothing contained in this Section 7(i) shall require any party to institute any proceeding for (or limit any party’s right to institute any proceeding for) specific performance under this Section 7(i) before pursuing damages nor shall the commencement of any action pursuant to this Section 7(i) or anything contained in this Section 7(i) restrict or limit any other remedies under this Agreement that may be available then or thereafter.

14

j.    Master Landlord. By joining in the execution of this Agreement, Master Landlord, Current Subtenants, Manager and New Manager agree to enter into each of the Required Closing Documents to which it is a party at the applicable Closing, as and when required pursuant to the terms of this Agreement.

[Signatures are set forth on the following page.]

15

TENANT AND SUBTENANT SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date and year first above written.

TENANT:
	
		
	Colonial Oaks Master Tenant, LLC

	 
	 

	 
	 

	By:
	/s/ Carl Mittendorff

	Name:
	Carl Mittendorff

	Its:
	Authorized Signatory

SUBTENANT:

COSL Menlo Park, LP 
COSL Fairfield, LP
COSL Belmont, LP
COSL Sacramento, LP
COSL Napa RG, LP
COSL Napa CCN, LP
COSL Napa Sonoma, LP

Each a Delaware limited liability company
	
		
	 
	 

	 
	 

	Each By:
	/s/ Carl Mittendorff

	Name:
	Carl Mittendorff

	Its:
	Authorized Signatory

JOINDER BY CARL MITTENDORFF

IN WITNESS WHEREOF, the undersigned hereby joins in the execution of this Agreement for the purpose of consenting to the entirety hereof and for the purpose of being bound by the terms and conditions of Section 4(a)(5)(i) (and the other Sections hereof necessarily associated therewith for the application thereof) and has duly executed this Agreement on the date and year first above written for such purposes.
	
		
	By:
	/s/ Carl Mittendorff

	Name:
	Carl Mittendorff

Signatures continue on the next page.

16

GRIFFIN SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date and year first above written.
GRIFFIN:
GAHC4 Menlo Park CA MC, LLC
GAHC4 Fairfield CA MC, LLC 
GAHC4 Belmont CA ALF, LLC 
GAHC4 Sacramento CA ALF, LLC 
GAHC4 Napa CA ALF, LLC 
GAHC4 Napa CA MC, LLC 
GAHC4 Sonoma CA ALF, LLC,
each a Delaware limited liability company,

	
					
	By:
	GAHC4 Northern CA Senior Housing

	Portfolio, LLC, a Delaware limited liability

	company, its Sole Member

	 
	 
	 
	 
	 

	By:
	Griffin-American Healthcare REIT IV

	Holdings, LP, its Sole Member

	 
	 
	 
	 

	By:
	Griffin-American Healthcare REIT, Inc.,

	its General Partner

	 
	 
	 
	 
	 

	By:
	/s/ Stefan Oh

	Name:
	Stefan Oh

	Its:
	Executive Vice President, Acquisitions

Griffin signatures continue on the next page.

17

SOLELY FOR THE PURPOSES OF ACKNOWLEDGING ITS AGREEMENT TO THE TERMS OF SECTION 7(J) HEREOF:

MASTER LANDLORD:
	
				
	GAHC4 Lafayette LA ALF Portfolio, LLC,

	a Delaware limited liability company

	 
	 
	 
	 

	By:
	Griffin-American Healthcare REIT IV

	 
	Holdings, LP, a Delaware limited partnership,

	 
	Its Sole Member

	 
	 
	 

	 
	By:
	Griffin-American Healthcare REIT

	 
	 
	IV, Inc., a Maryland corporation,

	 
	 
	Its General Partner

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	By:
	/s/ Stefan Oh

	 
	 
	Name:
	Stefan Oh

	 
	 
	Title:
	Executive Vice President, Acquisitions

	
				
	GAHC4 Lafayette LA MC, LLC,

	a Delaware limited liability company

	 
	 
	 
	 

	By:
	Griffin-American Healthcare REIT IV

	 
	Holdings, LP, a Delaware limited partnership,

	 
	Its Sole Member

	 
	 
	 

	 
	By:
	Griffin-American Healthcare REIT

	 
	 
	IV, Inc., a Maryland corporation,

	 
	 
	Its General Partner

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	By:
	/s/ Stefan Oh

	 
	 
	Name:
	Stefan Oh

	 
	 
	Title:
	Executive Vice President, Acquisitions

18Exhibit 10.1

 

 

AMENDMENT NO. 2 TO THE CREDIT AGREEMENT

AMENDMENT NO. 2, dated as of June 14, 2017 (this “Agreement”), to the Credit Agreement dated as of May 17, 2017, among Ashland LLC, a Kentucky limited liability company (the “Borrower”), the Lenders from time to time party thereto, The Bank of Nova Scotia, as Administrative Agent (in such capacity, the “Administrative Agent”), Swing Line Lender and an L/C Issuer, each other L/C Issuer from time to time party thereto and Citibank, N.A., as Syndication Agent, and the various other parties thereto (as amended by Amendment No. 1 to the Credit Agreement, dated as of May 19, 2017, and as further amended, restated, modified and supplemented from time to time, the “Credit Agreement”).  Capitalized terms used in this Agreement but not defined herein shall have the meaning assigned to such terms in the Credit Agreement.

W I T N E S S E T H:

WHEREAS, the Borrower notified the Administrative Agent that it is requesting an Incremental Term Loan Facility in the form of Term B Loans in an aggregate amount of $600,000,000 pursuant to Section 2.14(e)(iii)(C) of the Credit Agreement;

WHEREAS, pursuant to Sections 2.01(c) and 2.14(e)(iii)(C) of the Credit Agreement, the Borrower may incur Incremental Term Commitments under the Credit Agreement by entering into one or more Incremental Amendments (including this Agreement) with the Administrative Agent and Persons who agree to become Term B Lenders and to provide the Term B Commitments, in each case subject to the terms and conditions set forth in Section 2.14 of the Credit Agreement;

WHEREAS, each Term B Lender party hereto has indicated its willingness to provide (on a several and not joint basis), subject to the terms and conditions set forth herein and in the Credit Agreement, a Term B Commitment, as of the date hereof, in the amount set forth opposite such Term B Lender’s name on Schedule 1 hereto; and

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged), the parties hereto hereby agree as follows:

SECTION 1.    Incremental Amendment.  Subject to the terms and conditions set forth herein and pursuant to the provisions of Section 2.14 of the Credit Agreement, each Term B Lender hereby agrees, on a several and not joint basis, to extend the Term B Commitments in the amount set forth opposite such Term B Lender’s name on Schedule 1 hereto which shall take the form of Term B Loans under a Term B Facility under the Credit Agreement on the date hereof.  The aggregate amount of the Term B Commitments shall be $600,000,000, all of which will be drawn on the Second Amendment Effective Date (as defined below). The Term B Commitments shall terminate on the Second Amendment Effective Date following the funding to the Borrower in full in immediately available funds of the Term B Loans. After giving effect to the Term B Commitments under this Agreement, no additional amount of Term B Loans shall be available under Section 2.14(e)(iii)(C) of the Credit Agreement.

SECTION 2.    Amendments to the Credit Agreement.  Upon the Second Amendment Effective Date (as defined below), each of the parties hereto hereby agrees as follows:

(a)    Term B Loans.

 

 

  

 (i)    Except as expressly contemplated in the Credit Agreement, the Term B Loans will rank pari passu in right of payment and of security with the Loans outstanding under the Credit Agreement.

 (ii)    The Term B Loans will be issued at a price equal to 100% of the aggregate principal amount thereof.

 (iii)    The Second Amendment Effective Date shall be deemed the “Term B Funding Date” under the Credit Agreement and the other Loan Documents.

 (iv)    Each Term B Lender shall be deemed a “Term B Lender”, a “Term Lender” and a “Lender” under the Credit Agreement, and shall be bound by all obligations of a Term B Lender, a Term Lender and a Lender under the Credit Agreement.

 (v)    Each Term B Commitment under this Agreement shall be deemed for all purposes a “Term B Commitment”, a “Term Commitment” and a “Commitment” under the Credit Agreement, and each Loan made thereunder shall be deemed for all purposes a “Term B Loan” , a “Term Loan” and a “Loan” under the Credit Agreement.

 (vi)    This Agreement shall be deemed an “Incremental Amendment” under Section 2.14(d) of the Credit Agreement and be deemed a “Loan Document” for all purposes under the Credit Agreement and the other Loan Documents.

(b)    Maturity Date. The Term B Facility will mature on the date that is seven years after the Closing Date (the “Term B Maturity Date”); provided, however, that, if such date is not a Business Day, the Term B Maturity Date shall be the next preceding Business Day.

(c)    Amortization.  For purposes of Section 2.07(c) of the Credit Agreement, the Borrower shall repay to the Term B Lenders the aggregate principal amount of all Term B Loans outstanding on the following dates in the respective amounts set forth opposite such dates (which amounts shall be reduced as a result of the application of prepayments in accordance with the order of priority set forth in Section 2.05 of the Credit Agreement):

	
Date

 

	
Amount

 

	
September 30, 2017

	
$1,500,000

	
December 31, 2017

	
$1,500,000

	
March 31, 2018

	
$1,500,000

	
June 30, 2018

	
$1,500,000

	
September 30, 2018

	
$1,500,000

	
December 31, 2018

	
$1,500,000

	
March 31, 2019

	
$1,500,000

	
June 30, 2019

	
$1,500,000

	
September 30, 2019

	
$1,500,000

	
December 31, 2019

	
$1,500,000

	
March 31, 2020

	
$1,500,000

	
June 30, 2020

	
$1,500,000

	
September 30, 2020

	
$1,500,000

	
December 31, 2020

	
$1,500,000

 

 

- 2 -

 

 

	
Date

 

	
Amount

 

	
March 31, 2021

	
$1,500,000

	
June 30, 2021

	
$1,500,000

	
September 30, 2021

	
$1,500,000

	
December 31, 2021

	
$1,500,000

	
March 31, 2022

	
$1,500,000

	
June 30, 2022

	
$1,500,000

	
September 30, 2022

	
$1,500,000

	
December 31, 2022

	
$1,500,000

	
March 31, 2023

	
$1,500,000

	
June 30, 2023

	
$1,500,000

	
September 30, 2023

	
$1,500,000

	
December 31, 2023

	
$1,500,000

	
March 31, 2024

	
$1,500,000

	
Term B Maturity Date

	
$559,500,000

 

provided, however, that the final principal repayment installment of the Term B Loans shall be repaid on the Term B Maturity Date and in any event shall be in an amount equal to the aggregate principal amount of all Term B Loans outstanding on such date.

(d)    Interest; Interest Periods.

 (i)    Interest.  The Applicable Rate for the Term B Loans shall be (x) 1.00% per annum, in the case of any Term B Loan that is a Base Rate Loan and (y) 2.00% per annum, in the case of any Term B Loan that is a Eurodollar Rate Loan.

 (ii)    Interest Periods.  Pursuant to Section 2.02(e) of the Credit Agreement, after giving effect to all Term B Borrowings, all conversions of Term B Loans from one Type to the other, and all continuations of Term B Loans as the same Type, there shall not be more than six Interest Periods in effect in respect of the Term B Facility.  On the Second Amendment Effective Date, the Term B Loans shall initially be incurred in one or more Borrowings, with each Borrowing subject to the applicable Interest Period indicated in the Committed Loan Notice delivered pursuant to Section 3(g) hereof. The Administrative Agent shall record the Term B Loans in the Register, together with the principal amounts and stated interest of the Term B Loans owing to the Term B Lenders and their subsequent permitted assignees.

(e)    Mandatory and Voluntary Prepayments.

 (i)    Mandatory Prepayments. Except as expressly provided in Section 2.05(b)(iii) of the Credit Agreement, the Term B Loans shall be entitled to share in mandatory prepayments of Term Loans under Section 2.05(b) of the Credit Agreement on a pro rata basis with the Term Loans existing under the Credit Agreement immediately prior to the Second Amendment Effective Date (the “Existing Term Loans”).  Mandatory prepayments shall be applied to scheduled installments of principal of Term Loans (including the Term B Loans) as directed by the Borrower.

 (ii)    Voluntary Prepayments.

(x)    The Term B Loans shall be entitled to the same provisions for voluntary prepayments as the Existing Term Loans, as set forth in Section 2.05(a) of the Credit Agreement, and each prepayment of the outstanding Term Loans (including the Term B Loans) pursuant to Section 2.05(a)(i) of the Credit Agreement shall be applied (x) to one or more of the Term A-1 Facility, the Term A-2 Facility and the Term B Facility as the Borrower directs and (y) to the then remaining principal repayment installments of the Term Facilities as the Borrower directs, and each prepayment of Term Loans shall be paid to the Lenders in accordance with their respective Applicable Percentages in respect of each of the relevant Facilities.

 

 

- 3 -

  

(y)    The Term B Facility may be prepaid at any time, in whole or in part, without premium or penalty, except, on or prior to the sixth month anniversary of the Second Amendment Effective Date, subject to the terms and conditions of Section 2.05(c) of the Credit Agreement.

(f)    Financial Covenant.  The Term B Facility shall not have the benefit of, or any rights with respect to, the financial covenants as set forth in Section 7.11 of the Credit Agreement (including, without limitation, as to amendments, modifications and waivers).

(g)    Use of Proceeds.  The Borrower will use the proceeds of the Term B Loans, after the Second Amendment Effective Date, (x) to repurchase in a tender offer, redemption, defeasance, satisfaction and discharge or other repayment  (the “Note Refinancing”) all or a portion of the Borrower’s outstanding 3.875% Senior Notes due 2018 (the “Existing Notes”), and (y) to pay fees and expenses in connection with the foregoing and the other transactions contemplated herein and, to the extent that any such proceeds are remaining after giving effect to the transactions, the Borrower may use such proceeds for general corporate and working capital purposes.

SECTION 3.    Conditions Precedent to the Effectiveness of this Agreement.  This Agreement shall become effective and the Term B Commitment of each Term B Lender shall be subject to the satisfaction or waiver of the following conditions precedent (the date on which such conditions precedent are so satisfied or waived, the “Second Amendment Effective Date”):

(a)    the Administrative Agent’s receipt of executed counterparts of this Agreement executed by each Loan Party party hereto and the Term B Lenders, each of which shall be originals, electronic copies or facsimiles unless otherwise specified;

(b)    the Administrative Agent’s receipt of a favorable opinion of (A) Cravath, Swaine & Moore LLP, special New York counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, in form and substance reasonably satisfactory to the Administrative Agent and (B) Dinsmore & Shohl, as special Kentucky counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, in form and substance reasonably satisfactory to the Administrative Agent;

(c)    the Borrower shall have paid to the Administrative Agent all reasonable and documented out-of-pocket costs and expenses (but including, in any event, without limitation, the reasonable fees, charges and disbursements of Cahill Gordon & Reindel LLP, counsel for the Administrative Agent), of the Administrative Agent;

(d)    the Borrower shall have paid to the Administrative Agent, for the ratable account of the Arrangers, in immediately available funds, all compensation and other amounts then due and payable pursuant to the Engagement Letter in connection with the funding of the Term B Facility;

(e)    the Borrower shall have delivered to the Administrative Agent a certificate of the Borrower dated as of the Second Amendment Effective Date signed by a Responsible Officer certifying that, before and after giving effect to this Agreement, the representations and warranties contained in Article V of the Credit Agreement and the other Loan Documents are true and correct in all material respects (except that any representation and warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects) on and as of the Second Amendment Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (or in all respects, as the case may be) as of such earlier date;

 

 

- 4 -

  

(f)    no Event of Default has occurred and is continuing on and as of the Second Amendment Effective Date and immediately after giving effect to the Term B Commitments, the extension of Term B Loans thereunder, and the application of the proceeds therefrom;

(g)    the Borrower shall have delivered to the Administrative Agent a Committed Loan Notice for the Term B Loans in accordance with Section 2.02 of the Credit Agreement; and

(h)    the trustee of the Existing Notes shall have delivered to the holders of the Existing Notes a notice of redemption in connection with the Note Refinancing.

SECTION 4.    Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Delivery by telecopier or electronic means, including by e-mail with a “pdf” copy attached, of an executed counterpart of a signature page to this Agreement shall be effective as delivery of an original executed counterpart of this Agreement.  The Administrative Agent may also require that any such documents and signatures delivered by telecopier be confirmed by a hard copy signed original thereof; provided that the failure to request or deliver the same shall not limit the effectiveness of any document or signature delivered by telecopier or other electronic format.

SECTION 5.    Governing Law, Jurisdiction and Waiver of Right to Trial by Jury. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.  The jurisdiction and waiver of right to trial by jury provisions in Sections 10.14 and 10.15 of the Credit Agreement are incorporated herein by reference mutatis mutandis.

SECTION 6.    Headings.  The headings of this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

SECTION 7.    Reaffirmation.  Each Loan Party hereby expressly acknowledges the terms of this Agreement and reaffirms, as of the date hereof, (i) its obligations under the Loan Documents to which it is a party and (ii) its guarantee of the Obligations pursuant to the Guaranty, as applicable, and its grant of Liens on the Collateral to secure the Obligations pursuant to the Collateral Documents, with all such Liens continuing in full force and effect immediately after giving effect to this Agreement.

SECTION 8.    Effect of Amendment.  This Agreement shall not constitute a novation of the Credit Agreement or any of the Loan Documents. Except as expressly set forth herein, this Agreement (i) shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Lenders, the Administrative Agent, the Swing Line Lenders or the L/C Issuers, in each case under the Credit Agreement or any other Loan Document, and (ii) shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other provision of either such agreement or any other Loan Document.  Each and every term, condition, obligation, covenant and agreement contained in the Credit Agreement or any other Loan Document is hereby ratified and re-affirmed in all respects and shall continue in full force and effect.

 

 

- 5 -

  

[SIGNATURE PAGES FOLLOW]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- 6 -

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

 

	 	ASHLAND LLC, as Borrower	 
	 	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ Eric N. Boni	 
	 	 	Name:  Eric N. Boni	 
	 	 	Title:    Vice President and Treasurer	 
	 	 	 	 
	 	 	 	 
	 	
ASH GP INC.,

	 
	 	
ASHLAND CHEMCO INC.,

	 
	 	
ASHLAND GLOBAL HOLDINGS INC.,

	 
	 	
ASHLAND INTERNATIONAL HOLDINGS LLC,

	 
	 	
ASHLAND SPECIALTY INGREDIENTS G.P.,

	 
	 	
HERCULES LLC,

	 
	 	
INTERNATIONAL SPECIALTY HOLDINGS LLC,

	 
	 	
INTERNATIONAL SPECIALTY PRODUCTS INC.,

	 
	 	
ISP CHEMCO LLC

	 
	 	
ISP CHEMICALS LLC,

	 
	 	
ISP GLOBAL TECHNOLOGIES INC.,

	 
	 	
ISP INVESTMENTS LLC,

	 
	 	
ISP TECHNOLOGIES INC.,

	 
	 	
ALERA TECHNOLOGIES, INC.

	 
	 	
ALIX TECHNOLOGIES, INC.,

	 
	 	
AVOCA, INC.,

	 
	 	
IMPROVERA USA, LLC,

	 
	 	
PHARMACHEM LABORATORIES UTAH, LLC,

	 
	 	
PHARMACHEM LABORATORIES, INC.,

	 
	 	
PROPRIETARY NUTRITIONALS, INC.,

	 

 

	 	
each as Guarantor

	 
	 	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ Eric N. Boni	 
	 	 	Name:  Eric N. Boni	 
	 	 	Title:    Authorized Signatory	 
	 	 	 	 

 

[Signature Page to Ashland Amendment No. 2]

 

 

	 	
CITIBANK, N.A.,

	 
	 	as a Term B Lender	 
	 	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ Kirkwood Roland	 
	 	 	Name:  Kirkwood Roland	 
	 	 	Title:   Managing Director & Vice President	 
	 	 		 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Ashland Amendment No. 2]

 

 

	 	
THE BANK OF NOVA SCOTIA,

	 
	 	as Administrative Agent	 
	 	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ Clement Yu	 
	 	 	Name:  Clement Yu	 
	 	 	Title:    Director	 
	 	 	 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Ashland Amendment No. 2]

 

 

Schedule 1

Term B Commitment Schedule

	
Name of Term B Lender

	
Term B Commitments

	 	 
	
Citibank, N.A.

	
$600,000,000.00

	 	 
	
Total:

	
$600,000,000.00

  

 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule 1 - 1

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