Exhibit 10.1

 

 

PUBLISHED CUSIP NUMBER: [                    ]

CREDIT AGREEMENT

Dated as of July 25, 2011

by and among

UNIVERSAL HEALTH REALTY INCOME TRUST,

THE LENDERS PARTY HERETO

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent

BANK OF AMERICA, N.A.,

as Syndication Agent

FIFTH THIRD BANK, N.A.,

JPMORGAN CHASE BANK, N.A.

and

SUNTRUST BANK,

as Co-Documentation Agents

WELLS FARGO SECURITIES, LLC,

and

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

as Joint Lead Arrangers and Joint Bookrunners

 

 

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TABLE OF CONTENTS

 

          Page  

ARTICLE I DEFINITIONS

     1   

Section 1.1

  

Defined Terms

     1   

Section 1.2

  

Other Definitional Provisions

     24   

Section 1.3

  

Accounting Terms

     24   

Section 1.4

  

Execution of Documents

     25   

Section 1.5

  

Time References

     25   

ARTICLE II LOANS; AMOUNTS AND TERMS

     25   

Section 2.1

  

Revolving Loans

     25   

Section 2.2

  

Revolving Facility Increase

     27   

Section 2.3

  

Letters of Credit

     29   

Section 2.4

  

Fees

     34   

Section 2.5

  

Commitment Reductions

     34   

Section 2.6

  

Prepayments

     35   

Section 2.7

  

Default Rate and Payment Dates

     36   

Section 2.8

  

Conversion Options

     37   

Section 2.9

  

Swingline Loan Subfacility

     37   

Section 2.10

  

Computation of Interest and Fees; Usury

     39   

Section 2.11

  

Pro Rata Treatment and Payments

     41   

Section 2.12

  

Non-Receipt of Funds by the Agent

     43   

Section 2.13

  

Inability to Determine Interest Rate

     44   

Section 2.14

  

Yield Protection

     45   

Section 2.15

  

Compensation for Losses

     46   

Section 2.16

  

Taxes

     47   

Section 2.17

  

Indemnification; Nature of Issuing Lender’s Duties

     50   

Section 2.18

  

Illegality

     51   

Section 2.19

  

Replacement of Lenders

     52   

Section 2.20

  

Cash Collateral

     53   

Section 2.21

  

Defaulting Lenders

     54   

ARTICLE III REPRESENTATIONS AND WARRANTIES

     57   

Section 3.1

  

Corporate Existence

     57   

Section 3.2

  

Subsidiaries

     57   

Section 3.3

  

Authority, Etc.

     57   

Section 3.4

  

Binding Effect Of Documents, Etc.

     58   

Section 3.5

  

No Events Of Default, Etc.

     58   

Section 3.6

  

Title to Properties; Leases

     58   

Section 3.7

  

Financial Statements

     59   

Section 3.8

  

No Material Changes; No Internal Control Event, Full Disclosure, Etc.

     59   

Section 3.9

  

Permits; Patents; Copyrights

     59   

Section 3.10

  

Litigation

     59   

Section 3.11

  

Compliance With Other Instruments, Laws, Etc.

     60   

Section 3.12

  

Tax Status; REIT Status

     60   

Section 3.13

  

Investment Company Act

     60   

 

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Section 3.14

  

Absence of Financing Statements, Etc.

     60   

Section 3.15

  

Certain Transactions

     61   

Section 3.16

  

Pension Plans

     61   

Section 3.17

  

Margin Regulations

     61   

Section 3.18

  

Environmental Matters

     61   

Section 3.19

  

Use of Proceeds

     62   

Section 3.20

  

Indebtedness

     63   

Section 3.21

  

Solvency

     63   

Section 3.22

  

Investments

     63   

Section 3.23

  

Labor Matters

     63   

Section 3.24

  

Accuracy and Completeness of Information

     63   

Section 3.25

  

Material Contracts

     64   

Section 3.26

  

Insurance

     64   

Section 3.27

  

Anti-Terrorism Laws

     64   

Section 3.28

  

Compliance with OFAC Rules and Regulations

     64   

Section 3.29

  

Compliance with FCPA

     64   

Section 3.30

  

Equity Interests

     65   

Section 3.31

  

Security Documents

     65   

ARTICLE IV CONDITIONS PRECEDENT

    

65

  

Section 4.1

  

Conditions Precedent to Closing

     65   

Section 4.2

  

Conditions To Loans

     69   

ARTICLE V COVENANTS OF THE COMPANY

    

70

  

Section 5.1

  

Punctual Payment

     70   

Section 5.2

  

Legal Existence, Etc.

     70   

Section 5.3

  

Financial Statements, Etc.

     71   

Section 5.4

  

Health Care Facilities - Financial Statements, Etc.

     73   

Section 5.5

  

Tangible Net Worth

     74   

Section 5.6

  

Ratio of Debt To Total Capital

     74   

Section 5.7

  

Debt Service Coverage Ratio

     74   

Section 5.8

  

Debt To Cash Flow Available For Debt Service

     74   

Section 5.9

  

Indebtedness

     74   

Section 5.10

  

Security Interests and Liens; Negative Pledge

     76   

Section 5.11

  

No Further Negative Pledge

     76   

Section 5.12

  

Guarantees

     77   

Section 5.13

  

Notice of Litigation And Judgments

     77   

Section 5.14

  

Notice of Defaults; Material Adverse Effect

     77   

Section 5.15

  

Notices With Regard to Health Care Operators

     78   

Section 5.16

  

Books and Records

     78   

Section 5.17

  

Maintenance of Properties

     78   

Section 5.18

  

Insurance

     78   

Section 5.19

  

Taxes

     79   

Section 5.20

  

Compliance With Laws, Contracts, and Licenses

     79   

Section 5.21

  

Access

     79   

Section 5.22

  

ERISA Compliance

     80   

Section 5.23

  

Reserves

     80   

Section 5.24

  

Distributions

     80   

 

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Section 5.25

  

Investments

     80   

Section 5.26

  

Mortgage Loans

     81   

Section 5.27

  

Construction Loans

     81   

Section 5.28

  

Environmental Audits

     82   

Section 5.29

  

Merger, Consolidation and Disposition of Assets

     82   

Section 5.30

  

Sale and Leaseback

     83   

Section 5.31

  

Use of Proceeds

     83   

Section 5.32

  

Fiscal Year; Organizational Documents; Material Contracts

     83   

Section 5.33

  

Subsidiary Guarantors

     83   

Section 5.34

  

Pledged Assets

     84   

Section 5.35

  

Further Assurances

     84   

Section 5.36

  

Transactions with Affiliates

     84   

ARTICLE VI [RESERVED]

     84   

ARTICLE VII EVENTS OF DEFAULT; ACCELERATION

     84   

Section 7.1

  

Events of Default

     84   

Section 7.2

  

Acceleration; Remedies

     87   

ARTICLE VIII THE ADMINISTRATIVE AGENT

     87   

Section 8.1

  

Appointment and Authority

     88   

Section 8.2

  

Nature of Duties

     88   

Section 8.3

  

Exculpatory Provisions

     88   

Section 8.4

  

Reliance by Agent

     89   

Section 8.5

  

Notice of Default

     89   

Section 8.6

  

Non-Reliance on Agent and Other Lenders

     90   

Section 8.7

  

Indemnification

     90   

Section 8.8

  

Agent in Its Individual Capacity

     91   

Section 8.9

  

Successor Agent

     91   

Section 8.10

  

Collateral and Guaranty Matters

     92   

Section 8.11

  

Bank Products

     92   

ARTICLE IX MISCELLANEOUS

     93   

Section 9.1

  

Amendments, Waivers and Consents

     93   

Section 9.2

  

Notices

     95   

Section 9.3

  

No Waiver; Cumulative Remedies

     97   

Section 9.4

  

Survival of Representations and Warranties

     97   

Section 9.5

  

Payment of Expenses and Taxes; Indemnity

     98   

Section 9.6

  

Successors and Assigns; Participations

     100   

Section 9.7

  

Right of Set-off; Sharing of Payments

     104   

Section 9.8

  

Table of Contents and Section Headings

     105   

Section 9.9

  

Counterparts; Effectiveness; Electronic Execution

     105   

Section 9.10

  

Severability

     106   

Section 9.11

  

Integration

     106   

Section 9.12

  

Governing Law

     106   

Section 9.13

  

Consent to Jurisdiction; Service of Process and Venue

     106   

Section 9.14

  

Confidentiality

     107   

Section 9.15

  

Acknowledgments

     108   

Section 9.16

  

Waivers of Jury Trial; Waiver of Consequential Damages

     108   

 

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Section 9.17

  

Patriot Act Notice

     109   

Section 9.18

  

Resolution of Drafting Ambiguities

     109   

Section 9.19

  

Continuing Agreement

     109   

Section 9.20

  

Press Releases and Related Matters

     109   

Section 9.21

  

[Reserved]

     110   

Section 9.22

  

No Advisory or Fiduciary Responsibility

     110   

Section 9.23

  

Responsible Officers

     110   

 

iv

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EXHIBITS AND SCHEDULES

 

Exhibit 1.1(a)

  

Form of Account Designation Letter

Exhibit 1.1(b)

  

Form of Assignment and Assumption

Exhibit 1.1(c)

  

Form of Bank Product Provider Notice

Exhibit 1.1(d)

  

Form of Notice of Borrowing

Exhibit 1.1(e)

  

Form of Notice of Conversion/Extension

Exhibit 1.1(f)

  

Form of Subsidiary Guaranty

Exhibit 2.1(a)

  

Form of Funding Indemnity Letter

Exhibit 2.1(e)

  

Form of Revolving Note

Exhibit 2.6(a)

  

Form of Notice of Prepayment

Exhibit 2.9(d)

  

Form of Swingline Note

Exhibit 4.1(p)

  

Form of Solvency Certificate

Exhibit 4.1(u)

  

Form of Patriot Act Certificate

Exhibit 5.3(d)

  

Form of Compliance Certificate

Schedule 1.1

  

Existing Letters of Credit

Schedule 2.1

  

Commitments

Schedule 3.2

  

Subsidiaries; Capital Structure

Schedule 3.6

  

Title to Properties; Leases

Schedule 3.18

  

Environmental Matters

Schedule 3.25

  

Material Contracts

Schedule 3.26

  

Insurance

Schedule 3.30

  

Equity Interests

Schedule 5.9

  

Indebtedness

Schedule 5.10(e)

  

Liens

Schedule 5.25(e)

  

Existing Investments

 

v

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CREDIT AGREEMENT

This CREDIT AGREEMENT is made as of July 25, 2011 among UNIVERSAL HEALTH REALTY
INCOME TRUST, a real estate investment trust organized under the laws of the
State of Maryland and having its principal place of business at 367 South Gulph
Road, King of Prussia, Pennsylvania 19406 (the “Company”), the financial
institutions from time to time party hereto (individually, a “Lender” and
collectively, the “Lenders”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, as
administrative agent for the Lenders (the “Agent”).

BACKGROUND

A. The Company has requested that the Lenders provide a $150 million revolving
credit facility for the purposes hereinafter set forth;

B. The Lenders have agreed to make the requested revolving credit facility
available to the Company on the terms and conditions hereinafter set forth;

NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Defined Terms.

The following terms shall have the meanings set forth in this Article I or
elsewhere in the provisions of this Agreement referred to below:

“2011 Portfolio Transaction” shall have the meaning specified in that certain
letter dated as of the Closing Date from the Company and addressed to the
Administrative Agent and Lenders.

“Account Designation Letter” shall mean the Notice of Account Designation Letter
dated as of the Closing Date from the Company to the Agent substantially in the
form of Exhibit 1.1(a).

“Administrative Questionnaire” shall mean an Administrative Questionnaire in a
form supplied by the Agent.

“Affiliate” shall mean as to any Person, any other Person (excluding any
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with,

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such Person. For purposes of this definition, a Person shall be deemed to be
“controlled by” a Person if such Person possesses, directly or indirectly, power
either (a) to vote 10% or more of the securities having ordinary voting power
for the election of directors of such Person or (b) to direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise. Notwithstanding the foregoing, neither the Agent nor any Lender shall
be deemed an affiliate of the Company solely by reason of the relationship
created by the Loan Documents.

“Agent” shall have the meaning set forth in the preamble hereto and shall
include any successors in such capacity.

“Agreement” shall mean this Credit Agreement, including the Exhibits and
Schedules hereto, as originally executed, or if this Agreement is amended,
restated, modified, varied or supplemented from time to time, as so amended,
restated, modified, varied or supplemented.

“Anti-Terrorism Order” shall mean that certain Executive Order 13224 signed into
law on September 23, 2001.

“Applicable Law” means all applicable provisions of constitutions, laws,
statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities and
all orders and decrees of all courts and arbitrators.

“Applicable Margin” shall mean, for any day, the rate per annum set forth below
opposite the applicable Level then in effect, it being understood that the
Applicable Margin for (a) Loans that are Base Rate Loans shall be the percentage
set forth under the column “Base Rate Margin”, (b) Loans that are LIBO Rate
Loans or Swingline Loans shall be the percentage set forth under the column
“LIBO Rate Margin”, (c) the Letter of Credit Fee shall be the percentage set
forth under the column “Letter of Credit Fee” and (d) the Commitment Fee shall
be the percentage set forth under the column “Commitment Fee”:

 

Level

  

Ratio of Debt to Total Capital

  

Base Rate

Margin

  

LIBO Rate

Margin

  

Letter of

Credit

Fee

  

Commitment

Fee

I    less than 35%    75.0 bps    175.0 bps    175.0 bps    30.0 bps II   

greater than or equal to 35%

but less than 45%

   100.0 bps    200.0 bps    200.0 bps    35.0 bps III   

greater than or equal to 45%

but less than 50%

   125.0 bps    225.0 bps    225.0 bps    45.0 bps IV    greater than or equal
to 50%    150.0 bps    250.0 bps    250.0 bps    50.0 bps

The Applicable Margin shall, in each case, be determined and adjusted quarterly
on the date five (5) Business Days after the date on which the Agent has
received from the Company the financial information and the certifications
required to be delivered to the Agent and the Lenders in accordance with the
provisions of Sections 5.3(a), (b), (d) and (e) (each an “Interest Rate
Determination Date”). Such Applicable Margin shall be effective from such
Interest Rate Determination Date until the next such Interest Rate Determination
Date. The initial Applicable

 

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Margins shall be based on Level I (which corresponds to the ratio of Debt to
Total Capital of the Company calculated based on the unaudited quarterly
financial statements of the Company dated as of March 31, 2011) and shall remain
at such level until the first Interest Rate Determination Date occurring after
the delivery of the officer’s compliance certificate pursuant to Section 5.3(d)
for the quarter ended September 30, 2011. After the Closing Date, if the Company
shall fail to provide the financial information or certifications in accordance
with the provisions of Sections 5.3(a), (b), (d) and (e), the Applicable Margin
shall, on the date five (5) Business Days after the date by which the Company
was so required to provide such financial information or certifications to the
Agent and the Lenders, be based on Level IV until such time as such information
or certifications or corrected information or corrected certificates are
provided, whereupon the Level shall be determined by the then current ratio of
Debt to Total Capital. In the event that any financial information or
certification provided to the Agent in accordance with the provisions of
Sections 5.3(a), (b), (d) and (e) is shown to be inaccurate (regardless of
whether this Agreement or the Commitments are in effect when such inaccuracy is
discovered), and such inaccuracy, if corrected, would have led to the
application of a higher Applicable Margin for any period (an “Applicable
Period”) than the Applicable Margin applied for such Applicable Period, the
Company shall immediately (a) deliver to the Agent a corrected compliance
certificate for such Applicable Period, (b) determine the Applicable Margin for
such Applicable Period based upon the corrected compliance certificate, and
(c) immediately pay to the Agent for the benefit of the Lenders the accrued
additional interest and other fees owing as a result of such increased
Applicable Margin for such Applicable Period, which payment shall be promptly
distributed by the Agent to the Lenders entitled thereto. It is acknowledged and
agreed that nothing contained herein shall limit the rights of the Agent and the
Lenders under the Loan Documents, including their rights under Sections 2.7 and
7.1.

“Applicable Percentage” shall mean, with respect to any Lender, the percentage
of the total Revolving Commitments represented by such Lender’s Revolving
Commitment. If the Revolving Commitments have terminated or expired, the
Applicable Percentage shall be determined based on the Revolving Commitments
most recently in effect, giving effect to any assignments.

“Approved Fund” shall mean any Fund that is administered, managed or
underwritten by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or
an Affiliate of an entity that administers or manages a Lender.

“Arrangers” shall mean WFS and MLPFS, in their capacity as joint lead arrangers
and joint bookrunners, and their respective successors.

“Assignment and Assumption” shall mean an assignment and assumption entered into
by a Lender and an Eligible Assignee (with the consent of any party whose
consent is required by Section 9.6), and accepted by the Agent, in substantially
the form of Exhibit 1.1(b) or any other form approved by the Agent.

“Bank Product” shall mean any of the following products, services or facilities
extended to any Credit Party or any Subsidiary by any Bank Product Provider:
(a) Cash Management Services; (b) products under any Hedging Agreement; and
(c) commercial credit card, purchase

 

3

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card and merchant card services; provided, however, that for any of the
foregoing to be included as “Credit Party Obligations” for purposes of a
distribution under Section 2.11(b), the applicable Bank Product Provider must
have previously provided a Bank Product Provider Notice to the Agent which shall
provide the following information: (i) the existence of such Bank Product and
(ii) the maximum dollar amount (if reasonably capable of being determined) of
obligations arising thereunder (the “Bank Product Amount”). The Bank Product
Amount may be changed from time to time upon written notice to the Agent by the
Bank Product Provider. Any Bank Product established from and after the time that
the Lenders have received written notice from the Company or the Agent that an
Event of Default exists, until such Event of Default has been waived in
accordance with Section 9.1, shall not be included as “Credit Party Obligations”
for purposes of a distribution under Section 2.11(b).

“Bank Product Provider” shall mean any Person that provides Bank Products to a
Credit Party or any Subsidiary to the extent that (a) such Person is a Lender,
an Affiliate of a Lender or any other Person that was a Lender (or an Affiliate
of a Lender) at the time it entered into the Bank Product but has ceased to be a
Lender (or whose Affiliate has ceased to be a Lender) under this Agreement or
(b) such Person is a Lender or an Affiliate of a Lender on the Closing Date and
the Bank Product was entered into on or prior to the Closing Date (even if such
Person ceases to be a Lender or such Person’s Affiliate ceased to be a Lender).

“Bank Product Provider Notice” shall mean a notice substantially in the form of
Exhibit 1.1(c).

“Bankruptcy Code” shall mean the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.

“Bankruptcy Event” shall mean any of the events described in Section 7.1(f).

“Base Rate” shall mean, for any day, a rate per annum equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate
in effect on such day plus 1/2 of 1% and (c) the sum of (i) LIBO (as determined
pursuant to the definition of LIBO), for an Interest Period of one (1) month
commencing on such day plus (ii) 1.00%, in each instance as of such date of
determination. For purposes hereof: “Prime Rate” shall mean, at any time, the
rate of interest per annum publicly announced or otherwise identified from time
to time by Wells Fargo at its principal office in Charlotte, North Carolina as
its prime rate. Each change in the Prime Rate shall be effective as of the
opening of business on the day such change in the Prime Rate occurs. The parties
hereto acknowledge that the rate announced publicly by Wells Fargo as its Prime
Rate is an index or base rate and shall not necessarily be its lowest or best
rate charged to its customers or other banks; and “Federal Funds Effective Rate”
shall mean, for any day, the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published on the
next succeeding Business Day, the average of the quotations for the day of such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by it. If for any reason the Agent shall have
determined (which determination shall be conclusive in the absence of manifest
error) (A) that it is unable to ascertain the Federal Funds Effective Rate, for
any reason, including the inability or failure of the Agent to obtain sufficient
quotations in

 

4

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accordance with the terms above or (B) that the Prime Rate or LIBO no longer
accurately reflects an accurate determination of the prevailing Prime Rate or
LIBO, the Agent may select a reasonably comparable replacement index or source
to use as one of the bases for determining the Base Rate, until the
circumstances giving rise to such inability no longer exist. Any change in the
Base Rate due to a change in any of the foregoing will become effective on the
effective date of such change in the Federal Funds Effective Rate, the Prime
Rate or LIBO for an Interest Period of one (1) month. Notwithstanding anything
contained herein to the contrary, to the extent that the provisions of
Section 2.13 shall be in effect in determining LIBO pursuant to clause
(c) hereof, the Base Rate shall be the greater of (i) the Prime Rate in effect
on such day and (ii) the Federal Funds Effective Rate in effect on such day plus
1/2 of 1%.

“Base Rate Loans” shall mean Revolving Loans that bear interest based on the
Base Rate.

“Business” shall have the meaning set forth in Section 3.18.

“Business Day” shall mean any day other than a Saturday, Sunday or other day on
which commercial banks in Charlotte, North Carolina or New York, New York are
authorized or required by law to close, it being recognized that a Business Day
relating to interest calculated or payable by the reference to the LIBO Rate
shall also exclude any day on which banks in London, England are not open for
dealings in Dollar deposits in the London interbank market.

“Capital Lease” shall mean any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.

“Cash Available for Distributions” shall mean with respect to any fiscal period
of the Company, (i) Net Income of the Company and its Subsidiaries, plus
(ii) depreciation and amortization, plus (iii) provision for investment losses,
plus (iv) any loss on marketable securities, minus (v) any gain on marketable
securities, in each case determined for such period and in accordance with GAAP.

“Cash Collateralize” shall mean to pledge and deposit with or deliver to the
Agent, for the benefit of the Agent, the Issuing Lender or Swingline Lender (as
applicable) and the Lenders, as collateral for LOC Obligations, obligations in
respect of Swingline Loans, or obligations of Lenders to fund participations in
respect of either thereof (as the context may require), cash or deposit account
balances or, if the Issuing Lender or Swingline Lender benefiting from such
collateral shall agree in its sole discretion, other credit support, in each
case pursuant to documentation in form and substance satisfactory to (a) the
Agent and (b) the applicable Issuing Lender or the Swingline Lender. “Cash
Collateral” shall have a meaning correlative to the foregoing and shall include
the proceeds of such cash collateral and other credit support.

“Cash Flow Available For Debt Service” shall mean for any fiscal period of a
Person, Net Income for such period plus (i) expenses for interest on
Indebtedness and for Commitment Fees, Letter of Credit Fees and any other fees
in connection with the borrowing of money or the maintenance of letters of
credit by such Person, plus (ii) depreciation and amortization plus

 

5

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(iii) losses on the sale of real estate, less (iv) gains on the sale of real
estate, in each case determined for such period and in accordance with GAAP.

“Cash Management Services” shall mean any services provided from time to time to
any Credit Party or Subsidiary in connection with operating, collections,
payroll, trust, or other depository or disbursement accounts, including
automatic clearinghouse, controlled disbursement, depository, electronic funds
transfer, information reporting, lockbox, stop payment, overdraft and/or wire
transfer services and all other treasury and cash management services.

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980.

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all requests, rules, guidelines or directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted or issued.

“Closing Date” shall mean the date of this Agreement.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Collateral” shall mean a collective reference to the collateral which is
identified in, and at any time will be covered by, the Security Documents.

“Company” shall have the meaning set forth in the preamble hereto.

“Commitment” shall mean the Revolving Commitments, the LOC Commitment and the
Swingline Commitment, individually or collectively, as appropriate.

“Commitment Fee” shall have the meaning set forth in Section 2.4(a).

“Commitment Period” shall mean (a) with respect to Revolving Loans and Swingline
Loans, the period from and including the Closing Date to but excluding the
Maturity Date and (b) with respect to Letters of Credit, the period from and
including the Closing Date to but excluding the Letter of Credit Expiration
Date.

 

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“Consolidated Subsidiary” shall mean any Subsidiary or other entity the results
of whose operations are, for financial accounting purposes, consolidated with
the results of the operations of the Company and its other Consolidated
Subsidiaries in accordance with GAAP.

“Construction Loans” shall mean secured loans from time to time made by the
Company to various borrowers the proceeds of which are designated for the
construction of Health Care Facilities or for the acquisition of real estate and
the construction thereon of Health Care Facilities.

“Contractual Obligation” shall mean, as to any Person, any provision of any
security issued by such Person or of any contract, agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.

“Credit Party” shall mean any of the Company or the Guarantors.

“Credit Party Obligations” shall mean, without duplication, (a) the Obligations
and (b) for purposes of the Security Documents and the Subsidiary Guaranty and
all provisions under the other Loan Documents relating to the Collateral, the
sharing thereof and/or payments from proceeds of the Collateral, all Bank
Product Debt.

“Debt” shall mean with respect to any Person, all Indebtedness of such Person
for borrowed money other than Non-Recourse Debt of such Person.

“Debt Service Charges” shall mean for any fiscal period of the Company, the sum
of (i) the expenses of the Company and its Subsidiaries, on a consolidated
basis, for such period for interest on Debt and for Commitment Fees, Letter of
Credit Fees and any other fees in connection with the borrowing of money by the
Company or its Subsidiaries or the maintenance of Letters of Credit for the
account of the Company or its Subsidiaries plus (ii) required principal payments
to be made by the Company or its Subsidiaries for such period on Debt of the
Company or its Subsidiaries (excluding any principal payments made by the
Company pursuant to Section 2.6 hereof), in each case determined in accordance
with GAAP.

“Debt Service Coverage Ratio” shall mean, at any date of determination thereof,
the ratio of Cash Flow Available for Debt Service of the Company and its
Subsidiaries, on a consolidated basis, for the period of the four most recently
ended fiscal quarters of the Company to Debt Service Charges for such period.

“Debtor Relief Laws” shall mean the Bankruptcy Code and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief laws of the United States or other applicable jurisdictions from
time to time in effect.

“Default” shall mean any event which but for the giving of notice or the lapse
of time or both would constitute an Event of Default.

 

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“Default Rate” shall mean (a) when used with respect to the Obligations, other
than Letter of Credit Fees, an interest rate equal to (i) for Base Rate Loans
(A) the Base Rate plus (B) the Applicable Margin applicable to Base Rate Loans
plus (C) 2.00% per annum and (ii) for LIBO Rate Loans, (A) the LIBO Rate plus
(B) the Applicable Margin applicable to LIBO Rate Loans plus (C) 2.00% per
annum, (b) when used with respect to Letter of Credit Fees, a rate equal to the
Applicable Margin applicable to Letter of Credit Fees plus 2.00% per annum and
(c) when used with respect to any other fee or amount due hereunder, a rate
equal to the Applicable Margin applicable to Base Rate Loans plus 2.00% per
annum.

“Defaulting Lender” means, subject to Section 2.21(g), any Lender that (a) has
failed to (i) fund all or any portion of its Loans within two Business Days of
the date such Loans were required to be funded hereunder unless such Lender
notifies the Agent and the Company in writing that such failure is the result of
such Lender’s determination that one or more conditions precedent to funding
(each of which conditions precedent, together with any applicable default, shall
be specifically identified in such writing) has not been satisfied, or (ii) pay
to the Agent, any Issuing Lender, any Swingline Lender or any other Lender any
other amount required to be paid by it hereunder (including in respect of its
participation in Letters of Credit or Swingline Loans) within two Business Days
of the date when due unless subject to a good faith dispute, (b) has notified
the Company, the Agent or any Issuing Lender or Swingline Lender in writing that
it does not intend to comply with its funding obligations hereunder, or has made
a public statement to that effect (unless such writing or public statement
relates to such Lender’s obligation to fund a Loan hereunder and states that
such position is based on such Lender’s determination that a condition precedent
to funding (which condition precedent, together with any applicable default,
shall be specifically identified in such writing or public statement) cannot be
satisfied), (c) has failed, within three Business Days after written request by
the Agent or the Company, to confirm in writing to the Agent and the Company
that it will comply with its prospective funding obligations hereunder (provided
that such Lender shall cease to be a Defaulting Lender pursuant to this clause
(c) upon receipt of such written confirmation by the Agent and the Company), or
(d) has, or has a direct or indirect parent company that has, (i) become the
subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for
it a receiver, custodian, conservator, trustee, administrator, assignee for the
benefit of creditors or similar Person charged with reorganization or
liquidation of its business or assets, including the Federal Deposit Insurance
Corporation or any other state or federal regulatory authority acting in such a
capacity; provided that a Lender shall not be a Defaulting Lender solely by
virtue of the ownership or acquisition of any Equity Interest in that Lender or
any direct or indirect parent company thereof by a Governmental Authority so
long as such ownership interest does not result in or provide such Lender with
immunity from the jurisdiction of courts within the United States or from the
enforcement of judgments or writs of attachment on its assets or permit such
Lender (or such Governmental Authority) to reject, repudiate, disavow or
disaffirm any contracts or agreements made with such Lender. Any determination
by the Agent that a Lender is a Defaulting Lender under clauses (a) through
(d) above shall be conclusive and binding absent manifest error, and such Lender
shall be deemed to be a Defaulting Lender (subject to Section 2.21(g)) upon
delivery of written notice of such reasonable determination to the Company, each
Issuing Lender, each Swingline Lender and each Lender.

 

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“Distribution” shall mean (i) the declaration or payment of any dividend on or
in respect of any shares of any class of capital stock of the Company or any
Subsidiary other than dividends payable solely in shares of common stock of the
Company or such Subsidiary; (ii) the purchase, redemption, or other retirement
of any shares of any class of capital stock of the Company or any Subsidiary
directly or indirectly or otherwise; (iii) the return of capital by the Company
or any Subsidiary to its shareholders as such; or (iv) any other distribution on
or in respect of any shares of any class of capital stock of the Company or any
Subsidiary.

“Dollars” or “$” shall mean dollars in lawful currency of the United States of
America.

“Domestic Subsidiary” shall mean any Subsidiary that is organized and existing
under the laws of the United States or any state or commonwealth thereof or
under the laws of the District of Columbia.

“Drawdown Date” shall mean (i) with respect to a Loan, the date on which any
Loan is made or is to be made and (ii) with respect to a Letter of Credit, the
date any Letter of Credit is issued or extended.

“Eligible Assignee” shall mean (a) a Lender, (b) an Affiliate of a Lender,
(c) an Approved Fund and (d) any other Person (other than a natural person)
approved by (i) the Agent, (ii) in the case of any assignment of a Revolving
Commitment, the Issuing Lender and (iii) unless an Event of Default has occurred
and is continuing, the Company (each such approval not to be unreasonably
withheld or delayed); provided that notwithstanding the foregoing, “Eligible
Assignee” shall not include (A) any Credit Party or any of the Credit Party’s
Affiliates or Subsidiaries or (B) any Defaulting Lender or any Subsidiary of a
Defaulting Lender or any Person who, upon becoming a Lender hereunder would
constitute a Defaulting Lender.

“Environmental Laws” shall mean any and all applicable foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other Requirement
of Law (including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time be in effect during the term of this Agreement.

“Equity Interests” shall mean (a) in the case of a corporation, capital stock,
(b) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (c) in the case of a partnership, partnership interests (whether
general, preferred or limited), (d) in the case of a limited liability company,
membership interests and (e) any other interest or participation that confers or
could confer on a Person the right to receive a share of the profits and losses
of, or distributions of assets of, the issuing Person, without limitation,
options, warrants and any other “equity security” as defined in Rule 3a11-1 of
the Exchange Act.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, and
regulations thereunder, as amended from time to time.

 

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“ERISA Affiliate” shall mean any Person which is treated as a single employer
with the Company under Section 414 of the Code.

“Eurodollar Reserve Percentage” shall mean for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation, any basic,
supplemental or emergency reserves) in respect of Eurocurrency liabilities, as
defined in Regulation D of such Board as in effect from time to time, or any
similar category of liabilities for a member bank of the Federal Reserve System
in New York City.

“Event of Default” shall mean any event described in Article VII hereof.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Existing Letters of Credit” shall mean those certain letters of credit set
forth on Schedule 1.01 attached hereto.

“Excluded Subsidiary” shall mean any Subsidiary that is (x) acquired in
connection with the 2011 Portfolio Transaction or (y) any other Subsidiary
acquired or formed following the Closing Date and designated by the Company at
any time thereafter as an “Excluded Subsidiary”, in each case, so long as such
Subsidiary (i) is organized as a single purpose entity, (ii) owns directly or
indirectly one or more Health Care Facilities and (iii) is a party to, or in
connection with being designated as an Excluded Subsidiary will incur,
Non-Recourse Debt (including Non-Recourse Debt of the type described in clause
(y) of the definition thereof) the terms of which do (or will) not permit such
Subsidiary to be (or would be breached by such Subsidiary becoming) a Subsidiary
Guarantor hereunder; provided, however, that the aggregate amount of assets held
by Excluded Subsidiaries (other than those acquired in connection with the 2011
Portfolio Transaction) shall not exceed 20% of Consolidated Total Assets;
provided further, that, upon any Subsidiary Guarantor being designated an
“Excluded Subsidiary” pursuant to the foregoing, such Subsidiary shall be
released from all obligations under the Subsidiary Guaranty.

“Excluded Taxes” means, with respect to the Agent, any Lender, the Issuing
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Company hereunder, (a) Taxes imposed on or measured by its
overall net income (however denominated), and franchise taxes imposed on it (in
lieu of net income taxes), by the United States of America or the jurisdiction
(or any political subdivision thereof) under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable Lending Office is located, in which it books an
interest in any Note for tax accounting purposes or to which the Company is
directed to make payments, (b) any branch profits taxes imposed by the United
States or any similar Tax imposed by any other jurisdiction described in clause
(a), (c) backup withholding tax imposed under Section 3406 of the Code on
amounts payable to a Lender other than a Foreign Lender, (d) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Company
under Section 2.19(e)), any withholding tax that is imposed on amounts payable
to such Foreign Lender at the

 

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time such Foreign Lender becomes a party hereto (or designates a new Lending
Office) or is attributable to such Foreign Lender’s failure or inability (other
than as a result of a Change in Law) to comply with Section 2.16(e), except to
the extent that such Foreign Lender (or its assignor, if any) was entitled, at
the time of designation of a new Lending Office (or assignment), to receive
additional amounts from the Company with respect to such withholding tax
pursuant to Section 2.19(e) and (e) any Taxes imposed under FATCA and (f) any
Taxes to the extent that such Taxes would not have been imposed but for a
failure by such Person to file or supply any forms, returns or other
documentation pursuant to Applicable Law that such Person is legally permitted
to supply or provide, if such form, return or other item has been provided to
such Person by the Company in a form reasonably acceptable to such Person in a
timely manner, and such Person will not suffer any unimdemnified cost or expense
in connection therewith or any legal or regulatory burdens reasonably deemed by
such Person to be material.

“Extension of Credit” shall mean, as to any Lender, the making of a Loan by such
Lender, any conversion of a Loan from one Type to another Type, any extension of
any Loan or the issuance, extension or renewal of, or participation in, a Letter
of Credit or Swingline Loan by such Lender.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with) and any current or future
regulations or official interpretations thereof (including any Revenue Ruling,
Revenue Procedure, Notice or similar guidance issued by the U.S. Internal
Revenue Service thereunder as a precondition to relief or exemption from Taxes
under such provisions).

“Facility Cash Flow Available for Debt Service” shall mean for any fiscal period
of an owner or operator of a Health Care Facility, the Net Income of such Person
plus (i) expenses for interest on Indebtedness and for Commitment Fees, Letter
of Credit Fees and any other fees in connection with the borrowing of money by
such person plus (ii) depreciation and amortization plus (iii) rental expenses
plus (iv) management fees plus (v) intercompany interest expenses, in each case
to the extent attributable to such Health Care Facility and determined for such
period and in accordance with GAAP.

“Facility Coverage Ratio” shall mean for any fiscal period of an owner or
operator of a Health Care Facility, the ratio of (a) Cash Flow Available for
Debt Service attributable to such Health Care Facility to (b) interest expense
plus current maturities of long-term Indebtedness plus rental expense, in each
case to the extent attributable to such Health Care Facility and determined for
such period and in accordance with GAAP.

“Federal Funds Effective Rate” shall have the meaning set forth in the
definition of Base Rate.

“Fee Letters” shall mean each of the Wells Fargo Fee Letter and the MLPFS Fee
Letter.

 

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“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Company is resident for tax purposes.
For purposes of this definition, the United States, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

“Foreign Subsidiary” shall mean any Subsidiary that is not a Domestic
Subsidiary.

“Fronting Exposure” shall mean, at any time there is a Defaulting Lender,
(a) with respect to any Issuing Lender, such Defaulting Lender’s Applicable
Percentage of the outstanding LOC Obligations with respect to Letters of Credit
issued by such Issuing Lender other than LOC Obligations as to which such
Defaulting Lender’s participation obligation has been reallocated to other
Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with
respect to any Swingline Lender, such Defaulting Lender’s Applicable Percentage
of outstanding Swingline Loans made by such Swingline Lender other than
Swingline Loans as to which such Defaulting Lender’s participation obligation
has been reallocated to other Lenders or Cash Collateralized in accordance with
the terms hereof.

“Fund” shall mean any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

“GAAP” shall mean generally accepted accounting principles as in effect from
time to time in the United States, consistently applied, subject, however, in
the case of determination of compliance with the financial covenants set forth
in Sections 5.5, 5.6, 5.7 and 5.8 to the provisions of Section 1.3.

“Government Acts” shall have the meaning set forth in Section 2.17(a).

“Governmental Authority” shall mean the government of the United States of
America or any other nation, or of any political subdivision thereof, whether
state or local, and any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).

“Guarantor” shall mean each Subsidiary of the Company that executes the
Subsidiary Guaranty on the Closing Date and any Significant Subsidiary that
executes and/or joins the Subsidiary Guaranty from time to time.

“Health Care Facility” or “Health Care Facilities” shall mean, individually or
collectively as appropriate, real estate and improvements thereon used
exclusively or primarily for the delivery of health or human services, including
but not limited to hospitals, clinics, long term care facilities, custodial care
facilities (including but not limited to childcare centers), congregate care
facilities, assisted living facilities, surgery centers and medical office
buildings.

 

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“Hedging Agreements” shall mean, with respect to any Person, any agreement
entered into to protect such Person against fluctuations in interest rates, or
currency or raw materials values, including, without limitation, any interest
rate swap, cap or collar agreement or similar arrangement between such Person
and one or more counterparties, any foreign currency exchange agreement,
currency protection agreements, commodity purchase or option agreements or other
interest or exchange rate or commodity price hedging agreements.

“Incremental Increase Amount” shall have the meaning set forth in
Section 2.2(a).

“Indebtedness” shall mean, without duplication, with respect to any Person, all
indebtedness, liabilities and other obligations of such Person which would, in
accordance with GAAP, be classified upon a balance sheet of such Person as
liabilities but in any event including:

(a) all debt and similar monetary obligations, whether direct or indirect;

(b) all guaranties of such Person, endorsements and other contingent liabilities
and other obligations of such Person, whether direct or indirect in respect of
indebtedness of others, to purchase indebtedness, or to assure the owner of
indebtedness against loss, through an agreement to purchase goods, supplies or
services for the purpose of enabling the debtor to make payment of the
indebtedness held by such owner or otherwise, and any obligations to reimburse
the issuer in respect of any letters of credit;

(c) all liabilities and other obligations to the extent not, included in
(a) secured by any mortgage, lien, pledge, charge, security interest or other
encumbrance in respect of property owned by such Person, whether or not such
Person has assumed or become liable for the payment of such obligations;

(d) all indebtedness, liabilities and other obligations of such Person arising
under any conditional sale or other title retention agreement, whether or not
the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property;

(e) all indebtedness, liabilities and other obligations of such Person in
respect of leases of real and personal property (whether or not required to be
capitalized);

(f) all cash obligations of such Person then due under Hedging Agreements; and

(g) the principal balance outstanding under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet financing
product plus any accrued interest thereon (excluding operating leases).

“Indemnified Taxes” means Taxes and Other Taxes other than Excluded Taxes.

“Indemnitee” shall have the meaning set forth in Section 9.5(b).

 

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“Interest Payment Date” shall mean (a) as to any Base Rate Loan or any Swingline
Loan, the last Business Day of each March, June, September and December during
the term of this Agreement and on the Maturity Date, (b) as to any LIBO Rate
Loan having an Interest Period of three months or less, the last day of such
Interest Period, (c) as to any LIBO Rate Loan having an Interest Period longer
than three months, (i) each day which is three months after the first day of
such Interest Period and (ii) the last day of such Interest Period and (d) as to
any Loan which is the subject of a mandatory prepayment required pursuant to
Section 2.6(b), the date that such prepayment is due.

“Interest Period” shall mean, with respect to any LIBO Rate Loan,

(a) initially, the period commencing on the Drawdown Date or conversion date, as
the case may be, with respect to such LIBO Rate Loan and ending one, two, three,
or six months thereafter as selected by the Company in the Notice of Borrowing
or Notice of Conversion/Extension given with respect thereto; and

(b) thereafter, each period commencing on the last day of the immediately
preceding Interest Period applicable to such LIBO Rate Loan and ending one, two,
three, or six months thereafter as selected by the Company by irrevocable notice
to the Agent not less than three Business Days prior to the last day of the then
current Interest Period with respect thereto; provided that the foregoing
provisions are subject to the following:

(i) if any Interest Period pertaining to a LIBO Rate Loan would otherwise end on
a day that is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;

(ii) any Interest Period pertaining to a LIBO Rate Loan that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the relevant calendar month;

(iii) if the Company shall fail to give notice as provided above, the Company
shall be deemed to have selected a Base Rate Loan to replace the affected LIBO
Rate Loan;

(iv) no Interest Period in respect of any Loan shall extend beyond the Maturity
Date; and

(v) no more than ten (10) LIBO Rate Loans may be in effect at any time; provided
that, for purposes hereof, LIBO Rate Loans with different Interest Periods shall
be considered as separate LIBO Rate Loans, even if they shall begin on the same
date and have the same duration, although borrowings, extensions and conversions
may, in accordance with the provisions hereof, be combined at

 

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the end of existing Interest Periods to constitute a new LIBO Rate Loan with a
single Interest Period.

“Internal Control Event” shall mean a material weakness in, or fraud that
involves management or other employees who have a significant role in the
Company’s internal controls over financial reporting, in each case as described
in the Securities Laws.

“Investments” shall mean all expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock, partnership or limited
liability company interests or Indebtedness of, or for loans, advances, capital
contributions or transfers of property to, or in respect of any guaranties (or
other commitments as described under Indebtedness), or obligations of, any
Person, or for the acquisition of real estate or interests therein. In
determining the aggregate amount of Investments outstanding at any particular
time: (a) the amount of any Investment represented by a guaranty shall be taken
at not less than the principal amount of the obligations guaranteed; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
interest included as provided in the foregoing clause (b) may be deducted when
paid; and (e) there shall not be deducted from the aggregate amount of
Investments any decrease in the value thereof.

“Issuing Lender” shall mean Wells Fargo together with any successor.

“Issuing Lender Fees” shall have the meaning set forth in Section 2.4(c).

“Lender” shall mean any of the several banks and other financial institutions as
are, or may from time to time become parties to this Agreement; provided that
notwithstanding the foregoing, “Lender” shall not include any Credit Party or
any of the Credit Party’s Affiliates or Subsidiaries.

“Lending Office” shall mean, with respect to any Lender, the office of such
Lender maintaining such Lender’s Extensions of Credit.

“Letter of Credit” shall mean (a) any letter of credit issued by the Issuing
Lender pursuant to the terms hereof, as such letter of credit may be amended,
modified, restated, extended, renewed, increased, replaced or supplemented from
time to time in accordance with the terms of this Agreement and (b) any Existing
Letter of Credit, in each case as such letter of credit may be amended,
modified, extended, renewed or replaced from time to time in accordance with the
terms of this Agreement.

“Letter of Credit Expiration Date” shall have the meaning set forth in
Section 2.3(a).

“Letter of Credit Facing Fee” shall have the meaning set forth in
Section 2.4(c).

 

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“Letter of Credit Fee” shall have the meaning set forth in Section 2.4(b).

“LIBO” shall mean, for any LIBO Rate Loan for any Interest Period therefor, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBOR01 Page (or any successor page) as the London
interbank offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two (2) Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, then “LIBO” shall mean the rate per annum at which, as
determined by the Agent in accordance with its customary practices, Dollars in
an amount comparable to the Loans then requested are being offered to leading
banks at approximately 11:00 A.M. London time, two (2) Business Days prior to
the commencement of the applicable Interest Period for settlement in immediately
available funds by leading banks in the London interbank market for a period
equal to the Interest Period selected.

“LIBO Rate” shall mean a rate per annum (rounded upwards, if necessary, to the
next higher 1/100th of 1%) determined by the Agent pursuant to the following
formula:

 

LIBO Rate =    LIBO       1.00 - Eurodollar Reserve Percentage   

“LIBO Rate Loans” shall mean Loans that bear interest at an interest rate based
on the LIBO Rate.

“LIBO Reference Rate” shall mean a rate determined by reference to the LIBO Rate
for a one (1) month interest period that would be applicable for a Loan at the
LIBO Rate, as such rate may fluctuate in accordance with changes in the LIBO
Rate on a daily basis. If such rate is not available at such time for any
reason, then the rate for that interest period will be determined by an
alternate method as reasonably selected by the Lender.

“LIBO Tranche” shall mean the collective reference to LIBO Rate Loans whose
Interest Periods begin and end on the same day.

“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation,
(a) any conditional sale or other title retention agreement and any Capital
Lease having substantially the same economic effect as any of the foregoing and
(b) the filing of, or the agreement to give, any UCC financing statement).

“Loans” shall mean the Revolving Loans and/or the Swingline Loans, as
appropriate, and “Loan” shall mean any one of them.

“Loan Documents” shall mean collectively, this Agreement, the Notes, the
Subsidiary Guaranty, the LOC Documents and the Security Documents and any
document or instrument delivered pursuant to or in connection with this
Agreement or the LOC Documents (including,

 

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without limitation, any guaranty delivered in connection with this Agreement),
each as amended and in effect from time to time.

“LOC Commitment” shall mean the commitment of the Issuing Lender to issue
Letters of Credit and with respect to each Lender, the commitment of such Lender
to purchase Participation Interests in the Letters of Credit up to such Lender’s
Revolving Commitment Percentage of the LOC Committed Amount.

“LOC Committed Amount” shall have the meaning set forth in Section 2.3(a).

“LOC Documents” shall mean, with respect to any Letter of Credit, such Letter of
Credit, any amendments thereto, any documents delivered in connection therewith,
any application therefor, and any agreements, instruments, guarantees or other
documents (whether general in application or applicable only to such Letter of
Credit) governing or providing for (a) the rights and obligations of the parties
concerned or (b) any collateral for such obligations.

“LOC Obligations” shall mean, at any time, the sum of (a) the maximum amount
which is, or at any time thereafter may become, available to be drawn under
Letters of Credit then outstanding, assuming compliance with all requirements
for drawings referred to in such Letters of Credit plus (b) the aggregate amount
of all drawings under Letters of Credit honored by the Issuing Lender but not
theretofore reimbursed.

“Mandatory LOC Borrowing” shall have the meaning set forth in Section 2.3(e).

“Mandatory Swingline Borrowing” shall have the meaning set forth in
Section 2.9(b)(ii).

“Material Adverse Effect” means (A) a material adverse change in, or a material
adverse effect on, the operations, business, assets, properties, liabilities
(actual or contingent) or condition (financial or otherwise) of the Company and
its subsidiaries, taken as a whole, (B) a material impairment of the rights and
remedies of the Agent or any Lender under any Loan Document, or of the ability
of the Credit Parties, taken as a whole, to perform their obligations, when such
obligations are required to be performed, under any Loan Document to which it is
a party or (C) a material adverse effect upon the legality, validity, binding
effect or enforceability against any Credit Party of any Loan Document to which
it is a party.

“Material Contract” shall mean any contract or other arrangement, whether
written or oral, to which the Company or any of its Subsidiaries (other than
Excluded Subsidiaries) is a party as to which the breach, nonperformance,
cancellation or failure to renew by any party thereto could reasonably be
expected to have a Material Adverse Effect.

“Materials of Environmental Concern” shall mean any gasoline or petroleum
(including crude oil or any extraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
perchlorate, polychlorinated biphenyls and urea-formaldehyde insulation.

 

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“Maturity Date” shall mean the date that is four (4) years following the Closing
Date; provided, however, if such date is not a Business Day, the Maturity Date
shall be the next preceding Business Day.

“MLPFS” shall mean Merrill Lynch, Pierce, Fenner and Smith Incorporated.

“MLPFS Fee Letter” means the letter agreement dated June 27, 2011, addressed to
the Company from MLFPS, as amended, modified, extended, restated, replaced, or
supplemented from time to time.

“Moody’s” shall mean Moody’s Investors Service, Inc.

“Mortgage Loans” shall mean loans from time to time made by the Company, in each
case secured by a first mortgage lien on a Health Care Facility.

“Net Income” shall mean for any fiscal period of a Person, the net income (or
loss), after income taxes, of such Person determined in accordance with GAAP.

“Non-Defaulting Lender” shall mean, at any time, each Lender that is not a
Defaulting Lender at such time.

“Non-Recourse Debt” shall mean (x) in the case of any Person other than an
Excluded Subsidiary (except as otherwise provided in clause (y) below),
Indebtedness of the Company or its Subsidiaries which is at all times
non-recourse in nature to the Company or any of its wholly-owned Subsidiaries,
except to the extent of any recourse to an asset of the Company or a Subsidiary
purchased or otherwise financed by such Indebtedness including, without
limitation, Indebtedness of multi-member limited liability companies in which
the Company or any of its Subsidiaries has an ownership interest, but only to
the extent that such Indebtedness remains non-recourse to the Company or any of
its wholly-owned Subsidiaries and (y) in the case of an Excluded Subsidiary and
any Subsidiary acquired in connection with the 2011 Portfolio Transaction
(whether or not an Excluded Subsidiary), Indebtedness of such Excluded
Subsidiary or Subsidiary which is at all times non-recourse in nature to the
Company or its wholly-owned Subsidiaries (except such Excluded Subsidiary or
Subsidiary and or such assets of such Excluded Subsidiary or Subsidiary).

“Notes” shall mean the Revolving Notes and/or the Swingline Notes, as
applicable.

“Notice of Borrowing” shall mean a request for a Revolving Loan borrowing
pursuant to Section 2.1(b)(i) or a request for a Swingline Loan borrowing
pursuant to Section 2.9(b)(i), as appropriate. A Form of Notice of Borrowing is
attached as Exhibit 1.1(d).

“Notice of Conversion/Extension” shall mean the written notice of conversion of
a LIBO Rate Loan to a Base Rate Loan or a Base Rate Loan to a LIBO Rate Loan, or
extension of a LIBO Rate Loan, in each case substantially in the form of Exhibit
1.1(e).

“Notice of Prepayment” shall have the meaning set forth in Section 2.6(a).

 

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“Obligations” shall mean, collectively, all of the obligations, Indebtedness and
liabilities of the Credit Parties to the Lenders (including the Issuing Lender)
and the Agent, whenever arising, under this Agreement, the Notes or any of the
other Loan Documents, including principal, interest, fees, costs, charges,
expenses, professional fees, reimbursements, all sums chargeable to the Credit
Parties or for which any Credit Party is liable as an indemnitor and whether or
not evidenced by a note or other instrument and indemnification obligations and
other amounts (including, but not limited to, any interest accruing after the
occurrence of a filing of a petition of bankruptcy under the Bankruptcy Code
with respect to any Credit Party, regardless of whether such interest is an
allowed claim under the Bankruptcy Code).

“OFAC” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets
Control.

“Other Taxes” means all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.

“Participant” has the meaning assigned to such term in clause (d) of
Section 9.6.

“Participation Interest” shall mean a participation interest purchased by a
Lender in LOC Obligations as provided in Section 2.3(c) and in Swingline Loans
as provided in Section 2.9.

“Patriot Act” shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT)
Act of 2001 (Title III of Pub. L. No. 107-56 (signed into law October 26,
2001)), as amended or modified from time to time.

“Payment Event of Default” shall mean an Event of Default specified in
Section 7.1(a).

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.

“Permitted Liens” shall have the meaning set forth in Section 5.10(g).

“Pension Plan” shall mean pension plan shall include (a) any multi employer plan
within the meaning of Section 3(37) of ERISA, (b) any employee benefit plan
within the meaning of Section 3(3) of ERISA, other than plans described in (a)
above and (c) any employee pension benefit plan within the meaning of
Section 3(2) of ERISA the benefits of which are guaranteed on termination in
full or in part by PBGC pursuant to Title IV of ERISA, other than plans
described in (a) above, each as maintained or contributed to by the Company or
any ERISA Affiliate.

 

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“Person” shall mean any corporation, unincorporated association, partnership,
trust, organization, business, individual or other legal entity and any
government or any governmental agency or political subdivision thereof.

“Pledge Agreement” shall mean the Pledge Agreement dated as of the Closing Date
executed by the Company in favor of the Agent, for the benefit of the Secured
Parties, as the same may from time to time be amended, modified, extended,
restated, replaced, or supplemented from time to time in accordance with the
terms hereof and thereof.

“Prime Rate” shall have the meaning set forth in the definition of Base Rate.

“Pro Forma Basis” shall mean, with respect to any transaction, that such
transaction shall be deemed to have occurred as of the first day of the
four-quarter period (or twelve month period, as applicable) ending as of the
most recent quarter end (or month end, as applicable) preceding the date of such
transaction for which financial statement information is available; provided,
for purposes of Section 5.9(c), 5.9(h) and 5.25(e), the rental income for any
newly-acquired Health Care Facility which is used for purposes of such
calculation shall be based on the amounts contractually due under any related
leases that are then in effect.

“Properties” shall have the meaning set forth in Section 3.18(a).

“Register” shall have the meaning set forth in Section 9.6(c).

“Reimbursement Obligation” shall mean the obligation of the Company to reimburse
the Issuing Lender pursuant to Section 2.3(d) for amounts drawn under Letters of
Credit.

“Related Parties” shall mean, with respect to any Person, such Person’s
Affiliates and the partners, directors, officers, employees, agents and advisors
of such Person and of such Person’s Affiliates.

“Required Lenders” shall mean, as of any date of determination, Lenders holding
at least a majority of, if the Revolving Commitments have been terminated, the
outstanding Loans and Participation Interests; provided, however, that if any
Lender shall be a Defaulting Lender at such time, then there shall be excluded
from the determination of Required Lenders, Obligations (including Participation
Interests) owing to such Defaulting Lender and such Defaulting Lender’s
Commitments.

“Requirement of Law” shall mean, as to any Person, (a) the articles or
certificate of incorporation, trust documents and by-laws or other
organizational or governing documents of such Person, and (b) all international,
foreign, Federal, state and local statutes, treaties, rules, guidelines,
regulations, ordinances, codes, executive orders, and administrative or judicial
precedents or authorities, including the interpretation or administration
thereof by any Governmental Authority charged with the enforcement,
interpretation or administration thereof, and all applicable administrative
orders, directed duties, requests, licenses, authorizations and permits of, and
agreements with, any Governmental Authority (in each case whether or not

 

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having the force of law); in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.

“Responsible Officer” shall mean, for any Credit Party, the chief executive
officer, the president or chief financial officer of such Credit Party and any
additional responsible officer that is designated as such to the Agent.

“Revolving Commitment” shall mean, with respect to each Lender, the commitment
of such Lender to make Revolving Loans in an aggregate principal amount at any
time outstanding up to an amount equal to such Lender’s Revolving Commitment
Percentage of the Revolving Committed Amount.

“Revolving Commitment Percentage” shall mean, for each Lender, the percentage
identified as its Revolving Commitment Percentage on Schedule 2.1(a) or in the
Assignment and Assumption pursuant to which such Lender became a Lender
hereunder, as such percentage may be modified in connection with any assignment
made in accordance with the provisions of Section 9.6(b).

“Revolving Committed Amount” shall mean the amount of each Lender’s Revolving
Commitment as specified on Schedule 2.1(a), as such amount may be reduced or
increased from time to time in accordance with the provisions hereof.

“Revolving Facility” shall have the meaning set forth in Section 2.1(a).

“Revolving Facility Increase” shall have the meaning set forth in
Section 2.2(a).

“Revolving Note” or “Revolving Notes” shall mean the promissory notes of the
Company provided pursuant to Section 2.1(e) in favor of any of the Lenders
evidencing the Revolving Loan provided by any such Lender pursuant to
Section 2.1(a), individually or collectively, as appropriate, as such promissory
notes may be amended, modified, extended, restated, replaced, or supplemented
from time to time.

“Revolving Loans” shall have the meaning set forth in Section 2.1(a).

“S&P” shall mean Standard & Poor’s Ratings Services, a division of The McGraw
Hill Companies, Inc.

“Sanctioned Entity” shall mean (a) a country or a government of a country,
(b) an agency of the government of a country, (c) an organization directly or
indirectly controlled by a country or its government, or (d) a person or entity
resident in or determined to be resident in a country, that is subject to a
country sanctions program administered and enforced by OFAC.

“Sanctioned Person” shall mean a Person named on the list of Specially
Designated Nationals maintained by OFAC.

“Sarbanes-Oxley” shall mean the Sarbanes-Oxley Act of 2002.

 

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“SEC” shall mean the Securities and Exchange Commission or any successor
Governmental Authority.

“Secured Parties” shall mean the Agent, the Lenders and the Bank Product
Providers.

“Securities Act” shall mean the Securities Act of 1933, together with any
amendment thereto or replacement thereof and any rules or regulations
promulgated thereunder.

“Securities Laws” shall mean the Securities Act, the Exchange Act,
Sarbanes-Oxley and the applicable accounting and auditing principles, rules,
standards and practices promulgated, approved or incorporated by the SEC or the
Public Company Accounting Oversight Board, as each of the foregoing may be
amended and in effect on any applicable date hereunder.

“Security Documents” shall mean the Pledge Agreement and all other agreements,
documents and instruments relating to, arising out of, or in any way connected
with any of the Pledge Agreement or granting to the Agent, for the benefit of
the Secured Parties, Liens or security interests to secure, inter alia, the
Credit Party Obligations whether now or hereafter executed and/or filed, each as
may be amended from time to time in accordance with the terms hereof, executed
and delivered in connection with the granting, attachment and perfection of the
Agent’s security interests and liens arising thereunder, including, without
limitation, UCC financing statements.

“Significant Subsidiary” shall mean each Subsidiary of the Company (other than
an Excluded Subsidiary) with assets totaling more than 3.5% of the total assets
of the Company and its Subsidiaries taken as a whole. Notwithstanding the
foregoing, the Guarantors that execute the Subsidiary Guaranty as of the Closing
Date shall be deemed to be Significant Subsidiaries and in any event will
include each of 73 Medical Building L.L.C., Cypresswood Investment L.P. and
Sheffield Properties L.L.C.

“Subsidiary” shall mean with respect to any Person, any corporation,
association, trust or other business entity with respect to which such Person
owns directly, or indirectly through a subsidiary, at least a majority of voting
interest entitling such Person to direct the management and policies of such
entity.

“Subsidiary Guaranty” shall mean the guaranty executed by the Guarantors in
substantially the form of Exhibit 1.1(f).

“Swingline Commitment” shall mean the commitment of the Swingline Lender to make
Swingline Loans in an aggregate principal amount at any time outstanding up to
the Swingline Committed Amount, and the commitment of the Lenders to purchase
participation interests in the Swingline Loans as provided in
Section 2.9(b)(ii), as such amounts may be reduced from time to time in
accordance with the provisions hereof.

“Swingline Committed Amount” shall mean the amount of the Swingline Lender’s
Swingline Commitment as specified in Section 2.9(a).

 

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“Swingline Lender” shall mean Wells Fargo and any successor swingline lender.

“Swingline Loan” shall have the meaning set forth in Section 2.9(a).

“Swingline Note” shall mean the promissory note of the Company in favor of the
Swingline Lender evidencing the Swingline Loans provided pursuant to
Section 2.9(d), as such promissory note may be amended, modified, extended,
restated, replaced, or supplemented from time to time.

“Tangible Net Worth” shall mean the aggregate of the capital stock (but
excluding treasury stock and capital stock subscribed and unissued) and surplus
(including earned surplus, capital surplus and the balance of the current profit
and loss account not transferred to surplus) of the Company and its Subsidiaries
as the same properly appears on a balance sheet of the Company prepared in
accordance with GAAP, less the sum of the total book value of all assets of the
Company and its Subsidiaries which would be treated as intangibles under GAAP
including without limitation, such items as good will, leasehold improvements,
trademarks, trade names, service marks, brand names, copyrights, patents and
licenses, and rights with respect to the foregoing.

“Taxes” shall mean all present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.

“Total Capital” shall mean the aggregate of the capital stock (but excluding
treasury stock and capital stock that is subscribed and unissued) and surplus
(including earned surplus, capital surplus and the balance of the current profit
and loss account not transferred to surplus) of the Company and its
Subsidiaries, on a consolidated basis, as the same properly appears on a balance
sheet of the Company prepared in accordance with GAAP, plus all Debt of the
Company and its Subsidiaries.

“Tranche” shall mean the collective reference to (a) LIBO Rate Loans whose
Interest Periods begin and end on the same day and (b) Base Rate Loans made on
the same day.

“Transactions” shall mean the closing of this Agreement and the other Loan
Documents and the other transactions contemplated hereby and pursuant to the
other Loan Documents (including, without limitation, the initial borrowings
under the Loan Documents and the payment of fees and expenses in connection with
all of the foregoing).

“Type” shall mean, as to any Loan, its nature as a Base Rate Loan or LIBO Rate
Loan, as the case may be.

“UCC” shall mean the Uniform Commercial Code from time to time in effect in any
applicable jurisdiction.

“UHS” Universal Health Services, Inc., a Delaware corporation.

 

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“UHS Subsidiaries” shall mean, as of any date of determination, any Subsidiary
or other entity the accounts of which would be consolidated with those of
Universal Health Services, Inc. in its consolidated financial statements if such
statements were prepared as of such date.

“Unencumbered Property” shall mean any property owned or held under a Capital
Lease by the Company which is not subject to any form of mortgage, deed of
trust, or other lien or encumbrance; provided that for purposes of this
definition, leases shall not be deemed to be encumbrances.

“Wells Fargo” shall mean Wells Fargo Bank, National Association, a national
banking association, together with its successors and/or assigns.

“Wells Fargo Fee Letter” means the letter agreement dated June 28, 2011,
addressed to the Company from Wells Fargo and WFS, as amended, modified,
extended, restated, replaced, or supplemented from time to time.

“WFS” shall mean Wells Fargo Securities, LLC, together with its successors and
assigns.

Section 1.2 Other Definitional Provisions.

The definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
“include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.” The word “will” shall be construed to have the same
meaning and effect as the word “shall.” Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, restated, supplemented, amended and
restated or otherwise modified (subject to any restrictions on such amendments,
supplements or modifications set forth herein), (b) any reference herein to any
Person shall be construed to include such Person’s successors and assigns,
(c) the words “herein,” “hereof” and “hereunder,” and words of similar import,
shall be construed to refer to this Agreement in its entirety and not to any
particular provision hereof, (d) all references herein to Articles, Sections,
Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Agreement, (e) any reference to any law or
regulation herein shall, unless otherwise specified, refer to such law or
regulation as amended, modified or supplemented from time to time, (f) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights and (g) all terms
defined in this Agreement shall have the defined meanings when used in any other
Loan Document or any certificate or other document made or delivered pursuant
hereto.

Section 1.3 Accounting Terms.

(a) Generally. All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data (including
financial

 

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ratios and other financial calculations) required to be submitted pursuant to
this Agreement shall be prepared in conformity with, GAAP applied on a
consistent basis, as in effect from time to time, applied in a manner consistent
with that used in preparing the most recently delivered audited consolidated
financial statements of the Company, except as otherwise specifically prescribed
herein.

(b) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Company or the Required Lenders shall so request, the
Agent, the Lenders and the Company shall negotiate in good faith to amend such
ratio or requirement to preserve the original intent thereof in light of such
change in GAAP (subject to the approval of the Required Lenders); provided that,
until so amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Company shall
provide to the Agent and the Lenders financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting forth
a reconciliation between calculations of such ratio or requirement made before
and after giving effect to such change in GAAP.

Section 1.4 Execution of Documents.

Unless otherwise specified, all Loan Documents and all other certificates
executed in connection therewith must be signed by a Responsible Officer.

Section 1.5 Time References.

Unless otherwise specified, all references herein to times of day shall be
references to Eastern time (daylight or standard, as applicable).

ARTICLE II

LOANS; AMOUNTS AND TERMS

Section 2.1 Revolving Loans.

(a) Revolving Commitment. During the Commitment Period, subject to the terms and
conditions hereof, each Lender severally, but not jointly, agrees to make
revolving credit loans in Dollars (“Revolving Loans”) to the Company from time
to time in an aggregate principal amount of up to ONE HUNDRED FIFTY MILLION
DOLLARS ($150,000,000) (as increased from time to time as provided in
Section 2.2 and as such aggregate maximum amount may be reduced from time to
time as provided in Section 2.6, the “Revolving Committed Amount”) for the
purposes hereinafter set forth (such facility, the “Revolving Facility”);
provided, however, that (i) with regard to each Lender individually, the sum of
such Lender’s Revolving Commitment Percentage of the aggregate principal amount
of outstanding Revolving Loans plus such Lender’s Revolving Commitment
Percentage of outstanding Swingline Loans plus such Lender’s

 

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Revolving Commitment Percentage of outstanding LOC Obligations shall not exceed
such Lender’s Revolving Commitment and (ii) with regard to the Lenders
collectively, the sum of the aggregate principal amount of outstanding Revolving
Loans plus outstanding Swingline Loans plus outstanding LOC Obligations shall
not exceed the Revolving Committed Amount then in effect. Revolving Loans may
consist of Base Rate Loans or LIBO Rate Loans, or a combination thereof, as the
Company may request, and may be repaid and reborrowed in accordance with the
provisions hereof; provided, however, the Revolving Loans made on the Closing
Date or any of the three (3) Business Days following the Closing Date, may only
consist of Base Rate Loans unless the Company delivers a funding indemnity
letter, substantially in the form of Exhibit 2.1(a), reasonably acceptable to
the Agent not less than three (3) Business Days prior to the Closing Date.

(b) Revolving Loan Borrowings.

(i) Notice of Borrowing. The Company shall request a Revolving Loan borrowing by
delivering a written Notice of Borrowing (or telephone notice promptly confirmed
in writing by delivery of a written Notice of Borrowing, which delivery may be
by fax or electronic mail) to the Agent not later than 11:00 A.M. (Charlotte,
North Carolina time) on the Business Day of the requested borrowing in the case
of Base Rate Loans, and on the third Business Day prior to the date of the
requested borrowing in the case of LIBO Rate Loans. Each such Notice of
Borrowing shall be irrevocable and shall specify (A) that a Revolving Loan is
requested, (B) the date of the requested borrowing (which shall be a Business
Day), (C) the aggregate principal amount to be borrowed and (D) whether the
borrowing shall be comprised of Base Rate Loans, LIBO Rate Loans or a
combination thereof, and if LIBO Rate Loans are requested, the Interest
Period(s) therefor. If the Company shall fail to specify in any such Notice of
Borrowing (1) an applicable Interest Period in the case of a LIBO Rate Loan,
then such notice shall be deemed to be a request for an Interest Period of one
month, or (2) the Type of Revolving Loan requested, then such notice shall be
deemed to be a request for a Base Rate Loan hereunder. The Agent shall give
notice to each Lender promptly upon receipt of each Notice of Borrowing, the
contents thereof and each such Lender’s share thereof.

(ii) Minimum Amounts. Each Revolving Loan that is made as a Base Rate Loan shall
be in a minimum aggregate amount of $100,000 and in integral multiples of
$100,000 in excess thereof (or the remaining amount of the Revolving Committed
Amount, if less). Each Revolving Loan that is made as a LIBO Rate Loan shall be
in a minimum aggregate amount of $100,000 and in integral multiples of $100,000
in excess thereof (or the remaining amount of the Revolving Committed Amount, if
less).

(iii) Advances. Each Lender will make its Revolving Commitment Percentage of
each Revolving Loan borrowing available to the Agent for the account of the
Company at the office of the Agent specified in Section 9.2, or at

 

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such other office as the Agent may designate in writing, by 1:00 P.M.
(Charlotte, North Carolina time) on the date specified in the applicable Notice
of Borrowing, in Dollars and in funds immediately available to the Agent. Such
borrowing will then be made available to the Company by the Agent by crediting
the account of the Company on the books of such office (or such other account
that the Company may designate in writing to the Agent) with the aggregate of
the amounts made available to the Agent by the Lenders and in like funds as
received by the Agent.

(c) Repayment. Subject to the terms of this Agreement, Revolving Loans may be
borrowed, repaid and reborrowed during the Commitment Period, subject to
Section 2.6(a). The principal amount of all Revolving Loans shall be due and
payable in full on the Maturity Date, unless accelerated sooner pursuant to
Section 7.2.

(d) Interest. Subject to the provisions of Section 2.7, Revolving Loans shall
bear interest as follows:

(i) Base Rate Loans. During such periods as any Revolving Loans shall be
comprised of Base Rate Loans, each such Base Rate Loan shall bear interest at a
per annum rate equal to the sum of the Base Rate plus the Applicable Margin; and

(ii) LIBO Rate Loans. During such periods as Revolving Loans shall be comprised
of LIBO Rate Loans, each such LIBO Rate Loan shall bear interest at a per annum
rate equal to the sum of the LIBO Rate plus the Applicable Margin.

Interest on Revolving Loans shall be payable in arrears on each Interest Payment
Date.

(e) Revolving Notes; Covenant to Pay. The Company’s obligation to pay each
Lender shall be evidenced by this Agreement and, upon such Lender’s request, by
a duly executed promissory note of the Company to such Lender in substantially
the form of Exhibit 2.1(e). The Company covenants and agrees to pay the
Revolving Loans in accordance with the terms of this Agreement.

Section 2.2 Revolving Facility Increase.

(a) Revolving Facility Increases. Subject to the terms and conditions set forth
herein, the Company shall have the right, at any time and from time to time
prior to the Maturity Date to increase the Revolving Committed Amount (each, a
“Revolving Facility Increase”) by an aggregate principal amount for all such
Revolving Facility Increases of up to $50,000,000 (“Incremental Increase
Amount”).

(b) Terms and Conditions. The following terms and conditions shall apply to any
Revolving Facility Increase: (i) no Default or Event of Default shall exist
immediately prior to or after giving effect to such Revolving Facility Increase,
(ii) the terms and documentation of such Revolving Facility Increase (other than
the Applicable

 

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Margin and fees, which shall be determined as set forth below in clause (c))
shall be the same as the existing Revolving Facility, (iii) any loans made
pursuant to a Revolving Facility Increase shall constitute Credit Party
Obligations and will be secured and guaranteed with the other Credit Party
Obligations on a pari passu basis, (iv) any Lenders providing such Revolving
Facility Increase shall be entitled to the same voting rights as the existing
Lenders and shall be entitled to receive proceeds of prepayments on the same
basis as the existing Lenders, (v) any such Revolving Facility Increase shall be
in a minimum principal amount of $10,000,000 and integral multiples of
$1,000,000 in excess thereof (or the remaining amount of the Incremental
Increase Amount, if less), (vi) the proceeds of any such Revolving Facility
Increase will be used for the purposes set forth in Section 3.19, (vii) the
Company shall execute a Revolving Note, in favor of any new Lender or any
existing Lender requesting a Revolving Note, to evidence its Revolving
Commitment to the extent increased pursuant to this Section, (viii) the
conditions to Extensions of Credit in Section 4.2 shall have been satisfied,
(ix) the Agent shall have received (A) upon request of the Agent, an opinion or
opinions of counsel for the Credit Parties, addressed to the and the Lenders, in
form and substance acceptable to the Agent substantially similar to those
opinions delivered to the Agent on the Closing Date, (B) any authorizing
corporate documents as the Agent may reasonably request and (C) if applicable, a
duly executed Notice of Borrowing, and (x) the Agent shall have received from
the Company an officer’s certificate, in form and substance reasonably
satisfactory to the Agent, demonstrating that, after giving effect to any such
Revolving Facility Increase on a Pro Forma Basis, the Company will be in
compliance with the financial covenants set forth in Sections 5.5, 5.6, 5.7 and
5.8.

(c) Applicable Margin and Fees. The Applicable Margin and any other fees
(including upfront fees and commitment fees) on the Revolving Facility Increase
will be determined by the Company and the Lenders providing such Revolving
Facility Increase at the time such Revolving Facility Increase is made; provided
that in the event that the Applicable Margin, Commitment Fee, upfront fees or
other fees, taken as a whole, for any Revolving Facility Increase are higher
than the Applicable Margin, Commitment Fee, upfront fees or other fees, taken as
a whole, for the Revolving Facility, then the Applicable Margin, Commitment Fee,
upfront fees or other fees for the Revolving Facility shall be increased to the
extent necessary so that such Applicable Margin, Commitment Fee, upfront fees or
other fees, as applicable, are equal to Applicable Margin, Commitment Fee,
upfront fees or other fees, as applicable, for such Revolving Facility Increase;
provided, further, that in determining the interest rate margins applicable to
the Revolving Facility Increase and the Revolving Facility, (i) upfront fees
payable by the Company to the Lenders under the Revolving Facility or any
Revolving Facility Increase in the initial primary syndication thereof (with
such upfront fees being equated to interest based on assumed four-year life to
maturity) and the effects of any and all interest rate floors shall be included
and (ii) customary arrangement or commitment fees payable to the Arrangers (or
their affiliates) in connection with the Revolving Facility or to one or more
arrangers (or their affiliates) of any Revolving Facility Increase shall be
excluded.

(d) Revolving Facility Increase. In connection with the closing of any Revolving
Facility Increase, the outstanding Revolving Loans and Participation Interests

 

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shall be reallocated by causing such fundings and repayments (which shall not be
subject to any processing and/or recordation fees) among the Lenders (which the
Company shall be responsible for any costs arising under Section 2.15 resulting
from such reallocation and repayments) of Revolving Loans as necessary such
that, after giving effect to such Revolving Facility Increase, each Revolving
Lender will hold Revolving Loans and Participation Interests based on its
Revolving Commitment Percentage (after giving effect to such Revolving Facility
Increase).

(e) Participation. Participation in any Revolving Facility Increase may be
offered to each of the existing Lenders, but each such Lender shall have no
obligation to provide all or any portion of such Revolving Facility Increase.
The Company may invite other banks and financial institutions reasonably
acceptable to the Agent (such consent not to be unreasonably withheld or
delayed) to join this Agreement as Lenders hereunder for any portion of such
Revolving Facility Increase; provided that such other banks and financial
institutions shall enter into such joinder agreements to give effect thereto as
the Agent may reasonably request.

(f) Amendments. The Agent is authorized to enter into, on behalf of the Lenders,
any amendment to this Agreement or any other Loan Document as may be necessary
to incorporate the terms of any such Revolving Facility Increase.

Section 2.3 Letters of Credit.

(a) Issuance. Subject to the terms and conditions hereof and of the LOC
Documents, if any, and any other terms and conditions which the Issuing Lender
may reasonably require which are not inconsistent with this Agreement, during
the Commitment Period the Issuing Lender shall issue, and the Lenders shall
participate in, Letters of Credit for the account of the Company from time to
time upon request in a form acceptable to the Issuing Lender; provided, however,
that (i) the aggregate amount of LOC Obligations shall not at any time exceed
FIFTY MILLION DOLLARS ($50,000,000) (the “LOC Committed Amount”), (ii) the sum
of the aggregate principal amount of outstanding Revolving Loans plus
outstanding Swingline Loans plus outstanding LOC Obligations shall not at any
time exceed the Revolving Committed Amount then in effect, (iii) all Letters of
Credit shall be denominated in Dollars, (iv) Letters of Credit shall be issued
for any lawful corporate purposes and may be issued as standby letters of
credit, including in connection with workers’ compensation and other insurance
programs, and (v) no Letter of Credit shall be issued after the occurrence and
during the continuance of a Default or an Event of Default. Except as otherwise
expressly agreed in writing upon by all the Lenders, no Letter of Credit shall
have an original expiry date more than one year from the date of issuance;
provided, however, so long as no Default or Event of Default has occurred and is
continuing and subject to the other terms and conditions to the issuance of
Letters of Credit hereunder, the expiry dates of Letters of Credit may be
extended annually or periodically from time to time on the request of the
Company or by operation of the terms of the applicable Letter of Credit to a
date not more than one year from the date of extension; provided, further,
except as otherwise set forth in clause (k) hereof, no Letter of Credit, as
originally issued or as

 

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extended, shall have an expiry date extending beyond the date that is five
(5) Business Days prior to the Maturity Date (the “Letter of Credit Expiration
Date”). Each Letter of Credit shall comply with the related LOC Documents. The
issuance and expiry date of each Letter of Credit shall be a Business Day. Each
Letter of Credit issued hereunder shall be in a minimum original face amount of
$50,000, or such lesser amount as approved by the Issuing Lender. The Company’s
Reimbursement Obligations in respect of each Existing Letter of Credit, and each
Lender’s participation obligations in connection therewith, shall be governed by
the terms of this Agreement. Wells Fargo shall be the Issuing Lender on all
Letters of Credit issued after the Closing Date. The Existing Letters of Credit
shall, as of the Closing Date, be deemed to have been issued as Letters of
Credit hereunder and subject to and governed by the terms of this Agreement.

(b) Notice and Reports. The request for the issuance of a Letter of Credit shall
be submitted to the Issuing Lender at least five (5) Business Days prior to the
requested date of issuance. The Issuing Lender will promptly upon request
provide to the Agent for dissemination to the Lenders a detailed report
specifying the Letters of Credit which are then issued and outstanding and any
activity with respect thereto which may have occurred since the date of any
prior report, and including therein, among other things, the account party, the
beneficiary, the face amount, expiry date as well as any payments or expirations
which may have occurred. The Issuing Lender will further provide to the Agent
promptly upon request copies of the Letters of Credit. The Issuing Lender will
provide to the Agent promptly upon request a summary report of the nature and
extent of LOC Obligations then outstanding.

(c) Participations. Each Lender, (i) on the Closing Date with respect to each
Existing Letter of Credit and (ii) upon issuance of a Letter of Credit, shall be
deemed to have purchased without recourse a risk participation from the Issuing
Lender in such Letter of Credit and the obligations arising thereunder and any
Collateral relating thereto, in each case in an amount equal to its Revolving
Commitment Percentage of the obligations under such Letter of Credit and shall
absolutely, unconditionally and irrevocably assume, as primary obligor and not
as surety, and be obligated to pay to the Issuing Lender therefor and discharge
when due, its Revolving Commitment Percentage of the obligations arising under
such Letter of Credit; provided that any Person that becomes a Lender after the
Closing Date shall be deemed to have purchased a Participation Interest in all
outstanding Letters of Credit on the date it becomes a Lender hereunder and any
Letter of Credit issued on or after such date, in each case in accordance with
the foregoing terms. Without limiting the scope and nature of each Lender’s
participation in any Letter of Credit, to the extent that the Issuing Lender has
not been reimbursed as required hereunder or under any LOC Document, each such
Lender shall pay to the Issuing Lender its Revolving Commitment Percentage of
such unreimbursed drawing in same day funds pursuant to and in accordance with
the provisions of subsection (d) hereof. The obligation of each Lender to so
reimburse the Issuing Lender shall be absolute and unconditional and shall not
be affected by the occurrence of a Default, an Event of Default or any other
occurrence or event. Any such reimbursement shall not relieve or otherwise
impair the obligation of the Company to

 

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reimburse the Issuing Lender under any Letter of Credit, together with interest
as hereinafter provided.

(d) Reimbursement. In the event of any drawing under any Letter of Credit, the
Issuing Lender will promptly notify the Company and the Agent. The Company shall
reimburse the Issuing Lender on the day of drawing under any Letter of Credit if
notified prior to 3:00 P.M. (Charlotte, North Carolina time) on a Business Day
or, if after 3:00 P.M. (Charlotte, North Carolina time), on the following
Business Day (either with the proceeds of a Revolving Loan obtained hereunder or
otherwise) in same day funds as provided herein or in the LOC Documents. If the
Company shall fail to reimburse the Issuing Lender as provided herein, the
unreimbursed amount of such drawing shall automatically bear interest at a per
annum rate equal to the Default Rate. Unless the Company shall immediately
notify the Issuing Lender and the Agent of its intent to otherwise reimburse the
Issuing Lender, the Company shall be deemed to have requested a Mandatory LOC
Borrowing in the amount of the drawing as provided in subsection (e) hereof, the
proceeds of which will be used to satisfy the Reimbursement Obligations. The
Company’s Reimbursement Obligations hereunder shall be absolute and
unconditional under all circumstances irrespective of any rights of set-off,
counterclaim or defense to payment the Company may claim or have against the
Issuing Lender, the Agent, the Lenders, the beneficiary of the Letter of Credit
drawn upon or any other Person, including, without limitation, any defense based
on any failure of the Company to receive consideration or the legality,
validity, regularity or unenforceability of the Letter of Credit. The Agent will
promptly notify the other Lenders of the amount of any unreimbursed drawing and
each Lender shall promptly pay to the Agent for the account of the Issuing
Lender, in Dollars and in immediately available funds, the amount of such
Lender’s Revolving Commitment Percentage of such unreimbursed drawing. Such
payment shall be made on the Business Day such notice is received by such Lender
from the Agent if such notice is received at or before 2:00 P.M. (Charlotte,
North Carolina time), otherwise such payment shall be made at or before
12:00 Noon (Charlotte, North Carolina time) on the Business Day next succeeding
the Business Day such notice is received. If such Lender does not pay such
amount to the Agent for the account of the Issuing Lender in full upon such
request, such Lender shall, on demand, pay to the Agent for the account of the
Issuing Lender interest on the unpaid amount during the period from the date of
such drawing until such Lender pays such amount to the Agent for the account of
the Issuing Lender in full at a rate per annum equal to, if paid within two
(2) Business Days of the date of drawing, the Federal Funds Effective Rate and
thereafter at a rate equal to the Base Rate. Each Lender’s obligation to make
such payment to the Issuing Lender, and the right of the Issuing Lender to
receive the same, shall be absolute and unconditional, shall not be affected by
any circumstance whatsoever and without regard to the termination of this
Agreement or the Commitments hereunder, the existence of a Default or Event of
Default or the acceleration of the Obligations hereunder and shall be made
without any offset, abatement, withholding or reduction whatsoever.

(e) Repayment with Revolving Loans. On any day on which the Company shall have
requested, or been deemed to have requested, a Revolving Loan to reimburse a
drawing under a Letter of Credit, the Agent shall give notice to the Lenders
that a

 

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Revolving Loan has been requested or deemed requested in connection with a
drawing under a Letter of Credit, in which case a Revolving Loan borrowing
comprised entirely of Base Rate Loans (each such borrowing, a “Mandatory LOC
Borrowing”) shall be made (without giving effect to any termination of the
Commitments pursuant to Section 7.2) pro rata based on each Lender’s respective
Revolving Commitment Percentage (determined before giving effect to any
termination of the Commitments pursuant to Section 7.2) and the proceeds thereof
shall be paid directly to the Agent for the account of the Issuing Lender for
application to the respective LOC Obligations. Each Lender hereby irrevocably
agrees to make such Revolving Loans on the day such notice is received by the
Lenders from the Agent if such notice is received at or before 2:00 P.M.
(Charlotte, North Carolina time), otherwise such payment shall be made at or
before 12:00 Noon (Charlotte, North Carolina time) on the Business Day next
succeeding the day such notice is received, in each case notwithstanding (i) the
amount of Mandatory LOC Borrowing may not comply with the minimum amount for
borrowings of Revolving Loans otherwise required hereunder, (ii) whether any
conditions specified in Section 4.2 are then satisfied, (iii) whether a Default
or an Event of Default then exists, (iv) failure for any such request or deemed
request for Revolving Loan to be made by the time otherwise required in
Section 2.1(b), (v) the date of such Mandatory LOC Borrowing, or (vi) any
reduction in the Revolving Committed Amount after any such Letter of Credit may
have been drawn upon; provided, however, that in the event any such Mandatory
LOC Borrowing should be less than the minimum amount for borrowings of Loans
otherwise provided in Section 2.1(b), the Company shall pay to the Agent for its
own account an administrative fee of $500. In the event that any Mandatory LOC
Borrowing cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the occurrence of a Bankruptcy
Event), then each such Lender hereby agrees that it shall forthwith fund its
Participation Interests in the outstanding LOC Obligations on the Business Day
such notice to fund is received by such Lender from the Agent if such notice is
received at or before 2:00 P.M. (Charlotte, North Carolina time), otherwise such
payment shall be made at or before 12:00 Noon (Charlotte, North Carolina time)
on the Business Day next succeeding the Business Day such notice is received;
provided, further, that in the event any Lender shall fail to fund its
Participation Interest as required herein, then the amount of such Lender’s
unfunded Participation Interest therein shall automatically bear interest
payable by such Lender to the Agent for the account of the Issuing Lender upon
demand, at the rate equal to, if paid within two (2) Business Days of such date,
the Federal Funds Effective Rate, and thereafter at a rate equal to the Base
Rate.

(f) Modification, Extension. The issuance of any supplement, modification,
amendment, renewal, or extension to any Letter of Credit shall, for purposes
hereof, be treated in all respects the same as the issuance of a new Letter of
Credit hereunder.

(g) ISP98 and UCP. Unless otherwise expressly agreed by the Issuing Lender and
the Company, when a Letter of Credit is issued, (i) the rules of the
“International Standby Practices 1998,” published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each standby Letter of Credit,
and (ii) the rules of The Uniform Customs and

 

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Practice for Documentary Credits, as most recently published by the
International Chamber of Commerce at the time of issuance, shall apply to each
documentary Letter of Credit.

(h) Conflict with LOC Documents. In the event of any conflict between this
Agreement and any LOC Document (including any letter of credit application and
any LOC Documents relating to the Existing Letters of Credit), this Agreement
shall control.

(i) Designation of Subsidiaries as Account Parties. Notwithstanding anything to
the contrary set forth in this Agreement, including, without limitation,
Section 2.3(a), a Letter of Credit issued hereunder may contain a statement to
the effect that such Letter of Credit is issued for the account of a Subsidiary
of the Company; provided that, notwithstanding such statement, the Company shall
be the actual account party for all purposes of this Agreement for such Letter
of Credit and such statement shall not affect the Company’s Reimbursement
Obligations hereunder with respect to such Letter of Credit.

(j) Cash Collateral. At any point in time in which there is a Defaulting Lender,
the Issuing Lender may require the Company to Cash Collateralize the LOC
Obligations pursuant to Section 2.20.

(k) Letters of Credit. The Issuing Lender shall, at the request of the Company,
issue one or more Letters of Credit hereunder, with expiry dates that would
occur after the Letter of Credit Expiration Date (and after the Maturity Date),
based upon the Company’s agreement to fully Cash Collateralize the LOC
Obligations relating to such Letters of Credit on the Letter of Credit
Expiration Date pursuant to the terms of Section 2.20(a)(ii). In the event the
Company fails to fully Cash Collateralize the outstanding LOC Obligations on the
Letter of Credit Expiration Date, each outstanding Letter of Credit shall
automatically be deemed to be drawn in full, and the Company shall be deemed to
have requested a Base Rate Loan to be funded by the Lenders on the Letter of
Credit Expiration Date to reimburse such drawing (with the proceeds of such Base
Rate Loan being used to Cash Collateralize outstanding LOC Obligations as set
forth in Section 2.20). If the event a Mandatory LOC Borrowing cannot for any
reason be made on such date (including, without limitation, as a result of the
occurrence of a Bankruptcy Event) then each such Revolving Lender hereby agrees
that it shall fund its Participation Interests in the outstanding LOC
Obligations on such day (with the proceeds of such funded Participation
Interests being used to Cash Collateralize outstanding LOC Obligations as set
forth in Section 2.20). Each Lender’s obligation to make such payment to the
Issuing Lender, and the right of the Issuing Lender to receive the same, shall
be absolute and unconditional, shall not be affected by any circumstance
whatsoever and without regard to the termination of this Agreement or the
Commitments hereunder, the existence of a Default or Event of Default or the
acceleration of the Obligations hereunder and shall be made without any offset,
abatement, withholding or reduction whatsoever.

 

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Section 2.4 Fees.

(a) Commitment Fee. Subject to Section 2.21, in consideration of the Revolving
Commitments, the Company agrees to pay to the Agent, for the ratable benefit of
the Lenders, a commitment fee (the “Commitment Fee”) in an amount equal to the
Applicable Margin for the Commitment Fee per annum on the average daily unused
amount of the Revolving Committed Amount. The Commitment Fee shall be calculated
quarterly in arrears. For purposes of computation of the Commitment Fee, LOC
Obligations shall be considered usage of the Revolving Committed Amount but
Swingline Loans shall not be considered usage of the Revolving Committed Amount.
The Commitment Fee shall be payable quarterly in arrears on the last Business
Day of each calendar quarter.

(b) Letter of Credit Fees. Subject to Section 2.21, in consideration of the LOC
Commitments, the Company agrees to pay to the Agent, for the ratable benefit of
the Lenders, a fee (the “Letter of Credit Fee”) equal to the Applicable Margin
for Letter of Credit Fee per annum on the average daily maximum amount available
to be drawn under each Letter of Credit from the date of issuance to the date of
expiration. The Letter of Credit Fee shall be payable quarterly in arrears on
the last Business Day of each calendar quarter.

(c) Issuing Lender Fees. In addition to the Letter of Credit Fees payable
pursuant to subsection (b) hereof, the Company shall pay to the Issuing Lender
for its own account without sharing by the other Lenders the reasonable and
customary charges from time to time of the Issuing Lender with respect to the
amendment, transfer, administration, cancellation and conversion of, and
drawings under, such Letters of Credit (collectively, the “Issuing Lender
Fees”). The Issuing Lender may charge, and retain for its own account without
sharing by the other Lenders, an additional facing fee (the “Letter of Credit
Facing Fee”) of 0.150% per annum on the average daily maximum amount available
to be drawn under each such Letter of Credit issued by it. The Issuing Lender
Fees and the Letter of Credit Facing Fee shall be payable quarterly in arrears
on the last Business Day of each calendar quarter.

(d) Administrative Fee. The Company agrees to pay to the Agent the annual
administrative fee as described in the Wells Fargo Fee Letter.

Section 2.5 Commitment Reductions.

(a) Voluntary Reductions. The Company shall have the right to terminate or
permanently reduce the unused portion of the Revolving Committed Amount at any
time or from time to time upon not less than five (5) Business Days’ prior
written notice to the Agent (which shall notify the Lenders thereof as soon as
practicable) of each such termination or reduction, which notice shall specify
the effective date thereof and the amount of any such reduction which shall be
in a minimum amount of $500,000 or a whole multiple of $250,000 in excess
thereof and shall be irrevocable and effective upon receipt by the Agent;
provided that no such reduction or termination shall be permitted if

 

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after giving effect thereto, and to any prepayments of the Revolving Loans made
on the effective date thereof, the sum of the aggregate principal amount of
outstanding Revolving Loans plus outstanding Swingline Loans plus outstanding
LOC Obligations would exceed the Revolving Committed Amount then in effect. Any
reduction in the Revolving Committed Amount shall be applied to the Commitment
of each Lender in according to its Revolving Commitment Percentage.

(b) LOC Committed Amount. If the Revolving Committed Amount is reduced below the
then current LOC Committed Amount, the LOC Committed Amount shall automatically
be reduced by an amount such that the LOC Committed Amount equals the Revolving
Committed Amount.

(c) Swingline Committed Amount. If the Revolving Committed Amount is reduced
below the then current Swingline Committed Amount, the Swingline Committed
Amount shall automatically be reduced by an amount such that the Swingline
Committed Amount equals the Revolving Committed Amount.

(d) Maturity Date. The Revolving Commitments, the Swingline Commitment and the
LOC Commitment shall automatically terminate on the Maturity Date.

Section 2.6 Prepayments.

(a) Optional Prepayments. The Company shall have the right to prepay Loans in
whole or in part from time to time; provided, however, that (i) each partial
prepayment of any Base Rate Loan shall be in a minimum principal amount of
(i) $100,000 and integral multiples of $100,000 in excess thereof, (ii) each
partial prepayment of a Swingline Loan shall be in a minimum principal amount of
$100,000 and integral multiples of $100,000 in excess thereof and (iii) each
partial prepayment of a LIBO Rate Loan shall be in a minimum principal amount of
$100,000 and integral multiples of $100,000 in excess thereof. The Company shall
notify the Agent of such prepayment by written notice in the form of Exhibit
2.6(a) (a “Notice of Prepayment”). The Company shall give three Business Days’
irrevocable notice in the case of LIBO Rate Loans and one Business Day’s
irrevocable notice in the case of Base Rate Loans, to the Agent (which shall
notify the Lenders thereof as soon as practicable). Amounts prepaid under this
Section shall be applied to the outstanding Loans as the Company may elect.
Within the foregoing parameters, prepayments under this Section 2.6(a) shall be
applied first to Base Rate Loans and then to LIBO Rate Loans in direct order of
Interest Period maturities. All prepayments under this Section 2.6(a) shall be
subject to Section 2.15, but otherwise without premium or penalty. Interest on
the principal amount prepaid shall be payable on the next occurring Interest
Payment Date that would have occurred had such Loan not been prepaid or, at the
request of the Agent, interest on the principal amount prepaid shall be payable
on any date that a prepayment is made hereunder through the date of prepayment.
Amounts prepaid on the Loans may be reborrowed in accordance with the terms
hereof.

 

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(b) Mandatory Prepayments. If at any time after the Closing Date, the sum of the
aggregate principal amount of outstanding Revolving Loans plus outstanding
Swingline Loans plus outstanding LOC Obligations shall exceed the Revolving
Committed Amount, the Company shall immediately prepay the Revolving Loans and
Swingline Loans and (after all Revolving Loans and Swingline Loans have been
repaid) Cash Collateralize the LOC Obligations in an amount sufficient to
eliminate such excess. All amounts required to be paid pursuant to this Section
shall be applied as follows: (1) first to the outstanding Swingline Loans,
(2) second to the outstanding Revolving Loans and (3) third to Cash
Collateralize the LOC Obligations. Within the foregoing parameters, prepayments
under this Section 2.6(b) shall be applied first to Base Rate Loans and then to
LIBO Rate Loans in direct order of Interest Period maturities. All prepayments
under this Section 2.6(b) shall be subject to Section 2.15, but otherwise
without premium or penalty.

(c) Bank Product Obligations Unaffected. Any prepayment made pursuant to this
Section 2.6 shall not affect the Company’s obligation to continue to make
payments under any Bank Product, which shall remain in full force and effect
notwithstanding such repayment or prepayment, subject to the terms of such Bank
Product.

Section 2.7 Default Rate and Payment Dates.

(a) If all or a portion of the principal amount of any Loan which is a LIBO Rate
Loan shall not be paid when due or continued as a LIBO Rate Loan in accordance
with the provisions of Section 2.8 (whether at the stated maturity, by
acceleration or otherwise), such overdue principal amount of such Loan shall be
converted to a Base Rate Loan at the end of the Interest Period applicable
thereto.

(b) Upon the occurrence and during the continuance of a (i) Bankruptcy Event or
a Payment Event of Default, the principal of and, to the extent permitted by
law, interest on the Loans and any other amounts owing hereunder or under the
other Loan Documents shall automatically bear interest at a rate per annum which
is equal to the Default Rate and (ii) any other Event of Default hereunder, at
the option of the Required Lenders, the principal of and, to the extent
permitted by law, interest on the Loans and any other amounts owing hereunder or
under the other Loan Documents shall automatically bear interest, at a per annum
rate which is equal to the Default Rate, in each case from the date of such
Event of Default until such Event of Default is waived in accordance with
Section 9.1. Any default interest owing under this Section 2.7(b) shall be due
and payable on the earlier to occur of (x) demand by the Agent (which demand the
Agent shall make if directed by the Required Lenders) and (y) the Maturity Date.

(c) Interest on each Loan shall be payable in arrears on each Interest Payment
Date; provided that interest accruing pursuant to paragraph (b) of this Section
shall be payable from time to time on demand.

 

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Section 2.8 Conversion Options.

(a) The Company may, in the case of Revolving Loans, elect from time to time to
convert Base Rate Loans to LIBO Rate Loans or to continue LIBO Rate Loans, by
delivering a Notice of Conversion/Extension to the Agent at least three Business
Days’ prior to the proposed date of conversion or continuation. In addition, the
Company may elect from time to time to convert all or any portion of a LIBO Rate
Loan to a Base Rate Loan by giving the Agent irrevocable written notice thereof
by 11:00 A.M. one (1) Business Day prior to the proposed date of conversion. If
the date upon which a Base Rate Loan is to be converted to a LIBO Rate Loan is
not a Business Day, then such conversion shall be made on the next succeeding
Business Day and during the period from such last day of an Interest Period to
such succeeding Business Day such Loan shall bear interest as if it were a Base
Rate Loan. LIBO Rate Loans may only be converted to Base Rate Loans on the last
day of the applicable Interest Period. If the date upon which a LIBO Rate Loan
is to be converted to a Base Rate Loan is not a Business Day, then such
conversion shall be made on the next succeeding Business Day and during the
period from such last day of an Interest Period to such succeeding Business Day
such Loan shall bear interest as if it were a Base Rate Loan. All or any part of
outstanding Base Rate Loans may be converted as provided herein; provided that
(i) no Loan may be converted into a LIBO Rate Loan when any Default or Event of
Default has occurred and is continuing and (ii) partial conversions shall be in
an aggregate principal amount of $100,000 or a whole multiple of $100,000 in
excess thereof. All or any part of outstanding LIBO Rate Loans may be converted
as provided herein; provided that partial conversions shall be in an aggregate
principal amount of $100,000 or a whole multiple of $100,000 in excess thereof.

(b) Any LIBO Rate Loans may be continued as such upon the expiration of an
Interest Period with respect thereto by compliance by the Company with the
notice provisions contained in Section 2.8(a); provided, that no LIBO Rate Loan
may be continued as such when any Default or Event of Default has occurred and
is continuing, in which case such Loan shall be automatically converted to a
Base Rate Loan at the end of the applicable Interest Period with respect
thereto. If the Company shall fail to give timely notice of an election to
continue a LIBO Rate Loan, or the continuation of LIBO Rate Loans is not
permitted hereunder, such LIBO Rate Loans shall be automatically converted to
Base Rate Loans at the end of the applicable Interest Period with respect
thereto.

Section 2.9 Swingline Loan Subfacility.

(a) Swingline Commitment. During the Commitment Period, subject to the terms and
conditions hereof, the Swingline Lender, in its individual capacity, agrees to,
in reliance upon the agreements of the other Lenders set forth in this Section,
make certain revolving credit loans to the Company (each a “Swingline Loan” and,
collectively, the “Swingline Loans”) for the purposes hereinafter set forth;
provided, however, (i) the aggregate principal amount of Swingline Loans
outstanding at any time shall not exceed TWENTY MILLION DOLLARS ($20,000,000)
(the “Swingline Committed

 

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Amount”), and (ii) the sum of the aggregate principal amount of outstanding
Revolving Loans plus outstanding Swingline Loans plus outstanding LOC
Obligations shall not exceed the Revolving Committed Amount then in effect.
Swingline Loans hereunder may be repaid and reborrowed in accordance with the
provisions hereof.

(b) Swingline Loan Borrowings.

(i) Notice of Borrowing and Disbursement. Upon receiving a Notice of Borrowing
from the Company not later than 3:00 P.M. (Charlotte, North Carolina time) on
any Business Day requesting that a Swingline Loan be made, the Swingline Lender
will make Swingline Loans available to the Company on the same Business Day such
request is received by the Agent. Swingline Loan borrowings hereunder shall be
made in minimum amounts of $50,000 (or the remaining available amount of the
Swingline Committed Amount if less) and in integral amounts of $50,000 in excess
thereof.

(ii) Repayment of Swingline Loans. Each Swingline Loan borrowing shall be due
and payable on the earlier of thirty (30) days following the date such Swingline
Loan is made and the Maturity Date. The Swingline Lender may, at any time, in
its sole discretion, by written notice to the Company and the Agent, demand
repayment of its Swingline Loans by way of a Revolving Loan borrowing, in which
case the Company shall be deemed to have requested a Revolving Loan borrowing
comprised entirely of Base Rate Loans in the amount of such Swingline Loans;
provided, however, that, in the following circumstances, any such demand shall
also be deemed to have been given one Business Day prior to each of (A) the
Maturity Date, (B) the occurrence of any Bankruptcy Event, (C) upon acceleration
of the Obligations hereunder, whether on account of a Bankruptcy Event or any
other Event of Default, and (D) the exercise of remedies in accordance with the
provisions of Section 7.2 hereof (each such Revolving Loan borrowing made on
account of any such deemed request therefor as provided herein being hereinafter
referred to as “Mandatory Swingline Borrowing”). Each Lender hereby irrevocably
agrees to make such Revolving Loans promptly upon any such request or deemed
request on account of each Mandatory Swingline Borrowing in the amount and in
the manner specified in the preceding sentence on the date such notice is
received by the Lenders from the Agent if such notice is received at or before
2:00 P.M., otherwise such payment shall be made at or before 12:00 Noon on the
Business Day next succeeding the date such notice is received notwithstanding
(1) the amount of Mandatory Swingline Borrowing may not comply with the minimum
amount for borrowings of Revolving Loans otherwise required hereunder,
(2) whether any conditions specified in Section 4.2 are then satisfied,
(3) whether a Default or an Event of Default then exists, (4) failure of any
such request or deemed request for Revolving Loans to be made by the time
otherwise required in Section 2.1(b)(i), (5) the date of such Mandatory
Swingline Borrowing, or (6) any reduction in the Revolving Committed Amount or
termination of the Revolving Commitments immediately prior to such Mandatory
Swingline Borrowing or contemporaneously

 

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therewith. In the event that any Mandatory Swingline Borrowing cannot for any
reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the Bankruptcy
Code), then each Lender hereby agrees that it shall forthwith purchase (as of
the date the Mandatory Swingline Borrowing would otherwise have occurred, but
adjusted for any payments received from the Company on or after such date and
prior to such purchase) from the Swingline Lender such Participation Interest in
the outstanding Swingline Loans as shall be necessary to cause each such Lender
to share in such Swingline Loans ratably based upon its respective Revolving
Commitment Percentage (determined before giving effect to any termination of the
Commitments pursuant to Section 7.2); provided that (x) all interest payable on
the Swingline Loans shall be for the account of the Swingline Lender until the
date as of which the respective Participation Interest is purchased, and (y) at
the time any purchase of a Participation Interest pursuant to this sentence is
actually made, the purchasing Lender shall be required to pay to the Swingline
Lender interest on the principal amount of such Participation Interest purchased
for each day from and including the day upon which the Mandatory Swingline
Borrowing would otherwise have occurred to but excluding the date of payment for
such Participation Interest, at the rate equal to, if paid within two
(2) Business Days of the date of the Mandatory Swingline Borrowing, the Federal
Funds Effective Rate, and thereafter at a rate equal to the Base Rate. The
Company shall have the right to repay the Swingline Loan in whole or in part
from time to time in accordance with Section 2.6(a).

(c) Interest on Swingline Loans. Subject to the provisions of Section 2.7,
Swingline Loans shall bear interest at a per annum rate equal to the LIBO
Reference Rate plus the Applicable Margin for Revolving Loans. Interest on
Swingline Loans shall be payable in arrears on each Interest Payment Date.

(d) Swingline Note; Covenant to Pay. The Swingline Loans shall be evidenced by
this Agreement and, upon request of the Swingline Lender, by a duly executed
promissory note of the Company in favor of the Swingline Lender in the original
amount of the Swingline Committed Amount and substantially in the form of
Exhibit 2.9(d). The Company covenants and agrees to pay the Swingline Loans in
accordance with the terms of this Agreement.

(e) Cash Collateral. At any point in time in which there is a Defaulting Lender,
the Swingline Lender may require the Company to Cash Collateralize the
outstanding Swingline Loans pursuant to Section 2.20.

Section 2.10 Computation of Interest and Fees; Usury.

(a) Interest payable hereunder with respect to any Base Rate Loan based on the
Prime Rate shall be calculated on the basis of a year of 365 days (or 366 days,
as applicable) for the actual days elapsed. All other fees, interest and all
other amounts payable hereunder shall be calculated on the basis of a 360-day
year for the actual days

 

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elapsed. The Agent shall as soon as practicable notify the Company and the
Lenders of each determination of a LIBO Rate on the Business Day of the
determination thereof. Any change in the interest rate on a Loan resulting from
a change in the Base Rate shall become effective as of the opening of business
on the day on which such change in the Base Rate shall become effective. The
Agent shall as soon as practicable notify the Company and the Lenders of the
effective date and the amount of each such change.

(b) Each determination of an interest rate by the Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Company and
the Lenders in the absence of manifest error. The Agent shall, at the request of
the Company, deliver to the Company a statement showing the computations used by
the Agent in determining any interest rate.

(c) It is the intent of the Lenders and the Credit Parties to conform to and
contract in strict compliance with applicable usury law from time to time in
effect. All agreements between the Lenders and the Credit Parties are hereby
limited by the provisions of this subsection which shall override and control
all such agreements, whether now existing or hereafter arising and whether
written or oral. In no way, nor in any event or contingency (including, but not
limited to, prepayment or acceleration of the maturity of any Obligation), shall
the interest taken, reserved, contracted for, charged, or received under this
Agreement, under the Notes or otherwise, exceed the maximum nonusurious amount
permissible under applicable law. If, from any possible construction of any of
the Loan Documents or any other document, interest would otherwise be payable in
excess of the maximum nonusurious amount, any such construction shall be subject
to the provisions of this paragraph and such interest shall be automatically
reduced to the maximum nonusurious amount permitted under applicable law,
without the necessity of execution of any amendment or new document. If any
Lender shall ever receive anything of value which is characterized as interest
on the Loans under applicable law and which would, apart from this provision, be
in excess of the maximum nonusurious amount, an amount equal to the amount which
would have been excessive interest shall, without penalty, be applied to the
reduction of the principal amount owing on the Loans and not to the payment of
interest, or refunded to the Company or the other payor thereof if and to the
extent such amount which would have been excessive exceeds such unpaid principal
amount of the Loans. The right to demand payment of the Loans or any other
Indebtedness evidenced by any of the Loan Documents does not include the right
to receive any interest which has not otherwise accrued on the date of such
demand, and the Lenders do not intend to charge or receive any unearned interest
in the event of such demand. All interest paid or agreed to be paid to the
Lenders with respect to the Loans shall, to the extent permitted by applicable
law, be amortized, prorated, allocated, and spread throughout the full stated
term (including any renewal or extension) of the Loans so that the amount of
interest on account of such Indebtedness does not exceed the maximum nonusurious
amount permitted by applicable law.

 

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Section 2.11 Pro Rata Treatment and Payments.

(a) Allocation of Payments Prior to Exercise of Remedies. Each borrowing of
Revolving Loans and any reduction of the Revolving Commitments shall be made pro
rata according to the respective Revolving Commitment Percentages of the
Lenders. Unless otherwise required by the terms of this Agreement, each payment
under this Agreement shall be applied, first, to any fees then due and owing by
the Company pursuant to Section 2.4, second, to interest then due and owing
hereunder of the Company and, third, to principal then due and owing hereunder
and under this Agreement of the Company. Each payment on account of any fees
pursuant to Section 2.4 shall be made pro rata in accordance with the respective
amounts due and owing (except as to the Letter of Credit Facing Fees and the
Issuing Lender Fees which shall be paid to the Issuing Lender). Each payment by
the Company on account of principal of and interest on the Revolving Loans,
shall be applied to such Loans on a pro rata basis and, to the extent
applicable, in accordance with the terms of Section 2.6 hereof. All payments
(including prepayments) to be made by the Company on account of principal,
interest and fees shall be made without defense, set-off or counterclaim and
shall be made to the Agent for the account of the Lenders at the Agent’s office
specified on Section 9.2 in Dollars and in immediately available funds not later
than 1:00 P.M. (Charlotte, North Carolina time) on the date when due. The Agent
shall distribute such payments to the Lenders entitled thereto promptly upon
receipt in like funds as received. If any payment hereunder (other than payments
on the LIBO Rate Loans) becomes due and payable on a day other than a Business
Day, such payment shall be extended to the next succeeding Business Day, and,
with respect to payments of principal, interest thereon shall be payable at the
then applicable rate during such extension. If any payment on a LIBO Rate Loan
becomes due and payable on a day other than a Business Day, such payment date
shall be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day.

(b) Allocation of Payments After Exercise of Remedies. Notwithstanding any other
provisions of this Agreement to the contrary, after the exercise of remedies
(other than the application of default interest pursuant to Section 2.7) by the
Agent or the Lenders pursuant to Section 7.2 (or after the Commitments shall
automatically terminate and the Loans (with accrued interest thereon) and all
other amounts under the Loan Documents (including, without limitation, the
maximum amount of all contingent liabilities under Letters of Credit) shall
automatically become due and payable in accordance with the terms of such
Section), all amounts collected or received by the Agent or any Lender on
account of the Credit Party Obligations or any other amounts outstanding under
any of the Loan Documents shall or in respect of the Collateral shall be paid
over or delivered as follows (irrespective of whether the following costs,
expenses, fees, interest, premiums, scheduled periodic payments or Credit Party
Obligations are allowed, permitted or recognized as a claim in any proceeding
resulting from the occurrence of a Bankruptcy Event):

 

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FIRST, to the payment of all reasonable out-of-pocket costs and expenses
(including, without limitation, reasonable attorneys’ fees) of the Agent in
connection with enforcing the rights of the Lenders under the Loan Documents and
any protective advances made by the Agent with respect to the Collateral under
or pursuant to the terms of the Security Documents;

SECOND, to the payment of any fees owed to the Agent and the Issuing Lender;

THIRD, to the payment of all reasonable out-of-pocket costs and expenses
(including, without limitation, reasonable attorneys’ fees) of each of the
Lenders in connection with enforcing its rights under the Loan Documents or
otherwise with respect to the Credit Party Obligations owing to such Lender;

FOURTH, to the payment of all of the Credit Party Obligations consisting of
accrued fees and interest, and including, with respect to any Bank Product, any
fees, premiums and scheduled periodic payments due under such Bank Product and
any interest accrued thereon;

FIFTH, to the payment of the outstanding principal amount of the Credit Party
Obligations and the payment or cash collateralization of the outstanding LOC
Obligations, and including with respect to any Bank Product, any breakage,
termination or other payments due under such Bank Product and any interest
accrued thereon;

SIXTH, to all other Credit Party Obligations and other obligations which shall
have become due and payable under the Loan Documents or otherwise and not repaid
pursuant to clauses “FIRST” through “FIFTH” above; and

SEVENTH, to the payment of the surplus, if any, to whoever may be lawfully
entitled to receive such surplus.

In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (b) each of the Lenders and any Bank Product Provider shall
receive an amount equal to its pro rata share (based on the proportion that the
then outstanding Loans and LOC Obligations held by such Lender or the
outstanding obligations payable to such Bank Product Provider bears to the
aggregate then outstanding Loans and LOC Obligations and obligations payable
under all Bank Products) of amounts available to be applied pursuant to clauses
“THIRD”, “FOURTH”, “FIFTH” and “SIXTH” above; and (c) to the extent that any
amounts available for distribution pursuant to clause “FIFTH” above are
attributable to the issued but undrawn amount of outstanding Letters of Credit,
such amounts shall be held by the Agent in a cash collateral account and applied
(i) first, to reimburse the Issuing Lender from time to time for any drawings
under such Letters of Credit and (ii) then, following the expiration of all
Letters of Credit, to all other obligations of the types described in clauses
“FIFTH” and “SIXTH” above in the manner

 

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provided in this Section. Notwithstanding the foregoing terms of this Section,
only Collateral proceeds and payments under the Subsidiary Guaranty (as opposed
to ordinary course principal, interest and fee payments hereunder) shall be
applied to obligations under any Bank Product.

Section 2.12 Non-Receipt of Funds by the Agent.

(a) Funding by Lenders; Presumption by Agent. Unless the Agent shall have
received written notice from a Lender prior to the proposed date of any
Extension of Credit that such Lender will not make available to the Agent such
Lender’s share of such Extension of Credit, the Agent may assume that such
Lender has made such share available on such date in accordance with this
Agreement and may, in reliance upon such assumption, make available to the
Company a corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable Extension of Credit available to the Agent, then the
applicable Lender and the Company severally agree to pay to the Agent within two
Business Days on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Company to but excluding the date of payment to the Agent, at (i) in the case of
a payment to be made by such Lender, the greater of the Federal Funds Effective
Rate and a rate determined by the Agent in accordance with banking industry
rules on interbank compensation and (ii) in the case of a payment to be made by
the Company, the interest rate applicable to Loans. If the Company and such
Lender shall pay such interest to the Agent for the same or an overlapping
period, the Agent shall promptly remit to the Company the amount of such
interest paid by the Company for such period. If such Lender pays its share of
the applicable Extension of Credit to the Agent, then the amount so paid shall
constitute such Lender’s Loan included in such Extension of Credit. Any payment
by the Company shall be without prejudice to any claim the Company may have
against a Lender that shall have failed to make such payment to the Agent.

(b) Payments by Company; Presumptions by Agent. Unless the Agent shall have
received notice from the Company prior to the date on which any payment is due
to the Agent for the account of the Lenders or the Issuing Lender hereunder that
the Company will not make such payment, the Agent may assume that the Company
has made such payment on such date in accordance herewith and may, in reliance
upon such assumption, distribute to the Lenders or the Issuing Lender, as the
case may be, the amount due. In such event, if the Company has not in fact made
such payment, then each of the Lenders or the Issuing Lender, as the case may
be, severally agrees to repay to the Agent forthwith on demand the amount so
distributed to such Lender or the Issuing Lender, with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Agent in accordance with banking
industry rules on interbank compensation.

A notice of the Agent to any Lender or the Company with respect to any amount
owing under subsections (a) and (b) of this Section shall be conclusive, absent
manifest error.

 

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(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to
the Agent funds for any Loan to be made by such Lender as provided in the
foregoing provisions of this Article II, and such funds are not made available
to the Company by the Agent because the conditions to the applicable Extension
of Credit set forth in Article IV are not satisfied or waived in accordance with
the terms thereof, the Agent shall return such funds (in like funds as received
from such Lender) to such Lender, without interest.

(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to
make Revolving Loans, to fund participations in Letters of Credit and Swingline
Loans and to make payments pursuant to Section 9.5(c) are several and not joint.
The failure of any Lender to make any Loan, to fund any such participation or to
make any such payment under Section 9.5(c) on any date required hereunder shall
not relieve any other Lender of its corresponding obligation to do so on such
date, and no Lender shall be responsible for the failure of any other Lender to
so make its Loan, to purchase its participation or to make its payment under
Section 9.5(c).

(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to
obtain the funds for any Loan in any particular place or manner or to constitute
a representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

Section 2.13 Inability to Determine Interest Rate.

Notwithstanding any other provision of this Agreement, if (a) the Agent shall
reasonably determine (which determination shall be conclusive and binding absent
manifest error) that, by reason of circumstances affecting the relevant market,
reasonable and adequate means do not exist for ascertaining the LIBO Rate for
such Interest Period, or (b) the Required Lenders shall reasonably determine
(which determination shall be conclusive and binding absent manifest error) that
the LIBO Rate does not adequately and fairly reflect the cost to such Lenders of
funding LIBO Rate Loans that the Company has requested be outstanding as a LIBO
Tranche during such Interest Period, the Agent shall forthwith give telephone
notice of such determination, confirmed in writing, to the Company, and the
Lenders at least two (2) Business Days prior to the first day of such Interest
Period. Unless the Company shall have notified the Agent upon receipt of such
telephone notice that it wishes to rescind or modify its request regarding such
LIBO Rate Loans, any Loans that were requested to be made as LIBO Rate Loans
shall be made as Base Rate Loans and any Loans that were requested to be
converted into or continued as LIBO Rate Loans shall remain as or be converted
into Base Rate Loans. Until any such notice has been withdrawn by the Agent, no
further Loans shall be made as, continued as, or converted into, LIBO Rate Loans
for the Interest Periods so affected.

 

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Section 2.14 Yield Protection.

(a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or advances, loans or other credit extended or
participated in by, any Lender (except any reserve requirement reflected in the
LIBO Rate) or the Issuing Lender;

(ii) subject any Lender or the Issuing Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any participation in a
Letter of Credit or any LIBO Rate Loan made by it, or change the basis of
taxation of payments to such Lender or the Issuing Lender in respect thereof (it
being understood that Indemnified Taxes and Other Taxes are covered by
Section 2.16); or

(iii) impose on any Lender or the Issuing Lender or the London interbank market
any other condition, cost or expense affecting this Agreement or LIBO Rate Loans
made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making, converting into or maintaining any LIBO Rate Loan (or of
maintaining its obligation to make any such Loan), or to increase the cost to
such Lender or the Issuing Lender of participating in, issuing or maintaining
any Letter of Credit (or of maintaining its obligation to participate in or to
issue any Letter of Credit), or to reduce the amount of any sum received or
receivable by such Lender or the Issuing Lender hereunder (whether of principal,
interest or any other amount) then, upon written request of such Lender or the
Issuing Lender, the Company shall promptly pay to any such Lender or the Issuing
Lender, as the case may be, such additional amount or amounts as will compensate
such Lender or the Issuing Lender, as the case may be, for such additional costs
incurred or reduction suffered.

(b) Capital Requirements. If any Lender or the Issuing Lender determines that
any Change in Law affecting such Lender or the Issuing Lender or any lending
office of such Lender or such Lender’s or the Issuing Lender’s holding company,
if any, regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender’s or the Issuing Lender’s capital or on the
capital of such Lender’s or the Issuing Lender’s holding company, if any, as a
consequence of this Agreement, the Commitments of such Lender or the Loans made
by, or participations in Letters of Credit held by, such Lender, or the Letters
of Credit issued by the Issuing Lender, to a level below that which such Lender
or the Issuing Lender or such Lender’s or the Issuing Lender’s holding company
could have achieved but for such Change in Law (taking into consideration such
Lender’s or the Issuing Lender’s policies and the policies of such Lender’s or
the Issuing Lender’s holding company with respect to capital adequacy), then
from time to time the Company will pay to such Lender or the Issuing Lender, as
the case may be, such additional amount or amounts as will compensate such
Lender or the

 

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Issuing Lender or such Lender’s or the Issuing Lender’s holding company for any
such reduction suffered.

(c) Certificates for Reimbursement. A certificate of a Lender or the Issuing
Lender setting forth the amount or amounts necessary to compensate such Lender
or the Issuing Lender or its holding company, as the case may be, as specified
in paragraph (a) or (b) of this Section and delivered to the Company shall be
conclusive absent manifest error. The Company shall pay such Lender or the
Issuing Lender, as the case may be, the amount shown as due on any such
certificate within fifteen (15) days after receipt thereof; provided any such
amounts being demanded of the Company by such Lender shall be made on a
nondiscriminatory basis, consistent with other requests being made by such
Lender in connection with other similar loans held by such Lender.

(d) Delay in Requests. Failure or delay on the part of any Lender or the Issuing
Lender to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender’s or the Issuing Lender’s right to demand such
compensation, provided that the Company shall not be required to compensate a
Lender or the Issuing Lender pursuant to this Section for any increased costs
incurred or reductions suffered, as the case may be, to the extent that such
Lender or the Issuing Lender fails to make a demand for such compensation more
than six (6) months after becoming aware of such Change in Law giving arise to
such increased costs or reductions.

Section 2.15 Compensation for Losses.

Upon demand of any Lender (with a copy to the Agent) from time to time, the
Company shall promptly compensate such Lender for and hold such Lender harmless
from any loss, cost or expense (it being understood that Indemnified Taxes and
Other Taxes are covered by Section 2.16) incurred by it as a result of:

(i) any continuation, conversion, payment or prepayment (other than pursuant to
Section 2.12) of any Loan other than a Base Rate Loan on a day other than the
last day of the Interest Period for such Loan (whether voluntary, mandatory,
automatic, by reason of acceleration, or otherwise);

(ii) any failure by the Company (for a reason other than the failure of such
Lender to make a Loan) to prepay, borrow, continue or convert any Loan other
than a Base Rate Loan on the date or in the amount notified by the Company; or

(iii) any assignment of a LIBO Rate Loan on a day other than the last day of the
Interest Period therefor as a result of a request by the Company pursuant to
Section 2.19;

excluding any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Company

 

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shall also pay any customary administrative fees charged by such Lender in
connection with the foregoing.

For purposes of calculating amounts payable by the Company to the Lenders under
this Section, each Lender shall be deemed to have funded each LIBO Rate Loan
made by it at the LIBO Rate for such Loan by a matching deposit or other
borrowing in the London interbank eurodollar market for a comparable amount and
for a comparable period, whether or not such LIBO Rate Loan was in fact so
funded.

Section 2.16 Taxes.

(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Company hereunder or under any other Loan Document shall be
made free and clear of and without reduction or withholding for any Indemnified
Taxes or Other Taxes; provided that if the Company shall be required by
Applicable Law to deduct any Indemnified Taxes (including any Other Taxes) from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Agent, the applicable Lender or
the Issuing Lender, as the case may be, receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Company shall
make such deductions and (iii) the Company shall timely pay the full amount
deducted to the relevant Governmental Authority in accordance with Applicable
Law.

(b) Payment of Other Taxes by the Company. Without limiting the provisions of
paragraph (a) above, the Company shall timely pay any Other Taxes to the
relevant Governmental Authority in accordance with Applicable Law.

(c) Indemnification by the Company. The Company shall indemnify the Agent, each
Lender and the Issuing Lender, within thirty (30) days after demand therefor,
for the full amount of any Indemnified Taxes or Other Taxes (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) paid by the Agent, such Lender or the
Issuing Lender, as the case may be, and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to the Company by a Lender or the Issuing Lender
(with a copy to the Agent), or by the Agent on its own behalf or on behalf of a
Lender or the Issuing Lender, shall be conclusive absent manifest error. The
Company shall also indemnify the Agent, within thirty (30) days after demand
therefor, for any amount which a Lender or the Issuing Lender for any reason
fails to pay indefeasibly to the Agent as required by paragraph (g) below;
provided that, such Lender or the Issuing Lender, as the case may be, shall
indemnify the Company to the extent of any payment the Company makes to the
Agent pursuant to this sentence. In addition, the Company shall indemnify the
Agent, each Lender and the Issuing Lender, within thirty (30) days after demand
therefor, for any incremental Taxes that may become payable by such

 

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Agent, Lender (or its beneficial owners) or Issuing Lender as a result of any
failure of any Credit Party to pay any Taxes when due to the appropriate
Governmental Authority or to deliver to such Agent, pursuant to clause (d),
documentation evidencing the payment of Taxes.

(d) Evidence of Payments. As soon as practicable and in any event within thirty
(30) days after any payment of Indemnified Taxes or Other Taxes by the Company
to a Governmental Authority, the Company shall deliver to the Agent the original
or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Agent.

(e) Status of Lenders. Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which the
Company is resident for tax purposes, or any treaty to which such jurisdiction
is a party, with respect to payments hereunder or under any other Loan Document
shall deliver to the Company (with a copy to the Agent), at the time or times
prescribed by Applicable Law or reasonably requested by the Company or the
Agent, such properly completed and executed documentation prescribed by
Applicable Law as will permit such payments to be made without withholding or at
a reduced rate of withholding. In addition, any Lender, if requested by the
Company or the Agent, shall deliver such other documentation prescribed by
Applicable Law or reasonably requested by the Company or the Agent as will
enable the Company or the Agent to determine whether or not such Lender is
subject to backup withholding or information reporting requirements. Without
limiting the generality of the foregoing, in the event that the Company is a
resident for tax purposes in the United States, any Foreign Lender shall deliver
to the Company and the Agent (in such number of copies as shall be requested by
the recipient) on or prior to the date on which such Foreign Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the request
of the Company or the Agent, but only if such Foreign Lender is legally entitled
to do so), whichever of the following is applicable:

(i) duly completed copies of IRS Form W-8BEN claiming eligibility for benefits
of an income tax treaty to which the United States is a party;

(ii) duly completed copies of IRS Form W-8ECI;

(iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Lender is not (A) a “bank” within the meaning of
section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Company
within the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled
foreign corporation” described in section 881(c)(3)(C) of the Code and (y) duly
completed copies of IRS Form W-8BEN; or

 

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(iv) any other form prescribed by Applicable Law as a basis for claiming
exemption from or a reduction in United States Federal withholding tax duly
completed together with such supplementary documentation as may be prescribed by
Applicable Law to permit the Company to determine the withholding or deduction
required to be made.

If a payment made to a Lender under any Loan Document would be subject to U.S.
Federal withholding Tax imposed by FATCA if such Lender fails to comply with any
requirements of FATCA (including those contained in Section 1471(b) or 1472(b)
of the Code, as applicable), such Lender shall (A) enter into such agreements
with the IRS as necessary to establish an exemption from withholding under
FATCA; (B) comply with any certification, documentation, information, reporting
or other requirement necessary to establish an exemption from withholding under
FATCA; (C) provide any documentation reasonably requested by the Company or the
Agent sufficient for the Agent and the Company to comply with their respective
obligations, if any, under FATCA and to determine that such Lender has complied
such applicable requirements; and (D) provide a certification signed by the
chief financial officer, principal accounting officer, treasurer or controller
of such Lender certifying that such Lender has complied with any necessary
requirements to establish an exemption from withholding under FATCA. To the
extent that the relevant documentation provided pursuant to this paragraph is
rendered obsolete or inaccurate in any material respect as a result of changes
in circumstances with respect to the status of a Lender or Issuing Lender, such
Lender or Issuing Lender shall, to the extent permitted by Applicable Law,
deliver to the Company and the Agent revised and/or updated documentation
sufficient for the Company and the Agent to confirm such Lender’s or such
Issuing Lender’s compliance with their respective obligations under FATCA.

(f) Treatment of Certain Refunds. If the Agent, a Lender or the Issuing Lender
determines, in its reasonable discretion, that it has received a refund of any
Taxes or Other Taxes as to which it has been indemnified pursuant to this
Section (including additional amounts paid by the Company pursuant to this
Section), it shall pay to the applicable indemnifying party an amount equal to
such refund (but only to the extent of indemnity payments made, or additional
amounts paid, under this Section with respect to the Taxes or Other Taxes giving
rise to such refund), net of all out-of-pocket expenses of the Agent, such
Lender or the Issuing Lender, as the case may be, and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund); provided that the applicable indemnifying party, upon the request
of the Agent, such Lender or the Issuing Lender, agrees to repay the amount paid
over pursuant to this Section (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Agent, such Lender or the
Issuing Lender in the event the Agent, such Lender or the Issuing Lender is
required to repay such refund to such Governmental Authority. Notwithstanding
anything to the contrary in this paragraph (f), in no event will the Agent, the
Issuing Lender or any Lender be required to pay any amount to an indemnifying
party pursuant to this paragraph (f) the payment of which would place the Agent,
Issuing Lender or Lender in a less favorable net after-Tax position than the
Agent, Issuing Lender or Lender would have been in if the indemnification
payments or additional amounts giving rise to such refund had never been paid.
This paragraph shall not be construed to require the Agent, any Lender or the

 

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Issuing Lender to make available its tax returns (or any other information
relating to its taxes which it deems confidential) to the Company or any other
Person.

(g) Indemnification of the Agent. Each Lender and the Issuing Lender shall
indemnify the Agent within ten (10) days after demand therefor, for the full
amount of any Excluded Taxes attributable to such Lender or Issuing Lender that
are payable or paid by the Agent, and reasonable expenses arising therefrom or
with respect thereto, whether or not such Excluded Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to any
Lender by the Agent shall be conclusive absent manifest error. Each Lender and
the Issuing Lender hereby authorizes the Agent to set off and apply any and all
amounts at any time owing to such Lender or the Issuing Lender, as the case may
be, under any Loan Document against any amount due to the Agent under this
paragraph (g). The agreements in paragraph (g) shall survive the resignation
and/or replacement of the Agent.

(h) Survival. Without prejudice to the survival of any other agreement of the
Company hereunder, the agreements and obligations of the Company contained in
this Section shall survive the payment in full of the Obligations and the
termination of the Revolving Commitment.

Section 2.17 Indemnification; Nature of Issuing Lender’s Duties.

(a) In addition to its other obligations under Section 2.3, the Credit Parties
hereby agree to protect, indemnify, pay and save the Issuing Lender and each
Lender harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable attorneys’
fees) (it being understood that Indemnified Taxes and Other Taxes are covered by
Section 2.16) that the Issuing Lender or such Lender may incur or be subject to
as a consequence, direct or indirect, of (i) the issuance of any Letter of
Credit or (ii) the failure of the Issuing Lender to honor a drawing under a
Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority (all such acts or omissions, herein called “Government
Acts”).

(b) As between the Credit Parties, the Issuing Lender and each Lender, the
Credit Parties shall assume all risks of the acts, omissions or misuse of any
Letter of Credit by the beneficiary thereof. Neither the Issuing Lender nor any
Lender shall be responsible: (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for and issuance of any Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, that may prove to be invalid or ineffective for any reason; (iii) for
failure of the beneficiary of a Letter of Credit to comply fully with conditions
required in order to draw upon a Letter of Credit so long as the Issuing Bank
acts with reasonable care in connection therewith;

 

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(iv) for errors, omissions, interruptions or delays in transmission or delivery
of any messages, by mail, cable, telegraph, telex or otherwise, whether or not
they be in cipher; (v) for errors in interpretation of technical terms; (vi) for
any loss or delay in the transmission or otherwise of any document required in
order to make a drawing under a Letter of Credit or of the proceeds thereof; and
(vii) for any consequences arising from causes beyond the control of the Issuing
Lender or any Lender, including, without limitation, any Government Acts. None
of the above shall affect, impair, or prevent the vesting of the Issuing
Lender’s rights or powers hereunder.

(c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Issuing
Lender or any Lender, under or in connection with any Letter of Credit or the
related certificates, if taken or omitted in the absence of gross negligence or
willful misconduct, shall not put such Issuing Lender or such Lender under any
resulting liability to the Credit Parties. It is the intention of the parties
that this Agreement shall be construed and applied to protect and indemnify the
Issuing Lender and each Lender against any and all risks involved in the
issuance of the Letters of Credit, all of which risks are hereby assumed by the
Credit Parties, including, without limitation, any and all risks of the acts or
omissions, whether rightful or wrongful, of any Governmental Authority. The
Issuing Lender and the Lenders shall not, in any way, be liable for any failure
by the Issuing Lender or anyone else to pay any drawing under any Letter of
Credit as a result of any Government Acts or any other cause beyond the control
of the Issuing Lender and the Lenders.

(d) Nothing in this Section is intended to limit the Reimbursement Obligation of
the Company contained in Section 2.3(d) hereof. The obligations of the Credit
Parties under this Section shall survive the termination of this Agreement. No
act or omissions of any current or prior beneficiary of a Letter of Credit shall
in any way affect or impair the rights of the Issuing Lender and the Lenders to
enforce any right, power or benefit under this Agreement.

(e) Notwithstanding anything to the contrary contained in this Section, the
Credit Parties shall have no obligation to indemnify the Issuing Lender or any
Lender in respect of any liability incurred by the Issuing Lender or such Lender
arising out of the gross negligence or willful misconduct of the Issuing Lender
(including action not taken by the Issuing Lender or such Lender), as determined
by a court of competent jurisdiction or pursuant to arbitration.

Section 2.18 Illegality.

Notwithstanding any other provision of this Agreement, if any Change in Law
shall make it unlawful for such Lender or its Lending Office to make or maintain
LIBO Rate Loans as contemplated by this Agreement or to obtain in the interbank
eurodollar market through its Lending Office the funds with which to make such
Loans, (a) such Lender shall promptly notify the Agent and the Company thereof,
(b) the commitment of such Lender hereunder to make LIBO Rate Loans or continue
LIBO Rate Loans as such shall forthwith be suspended until the Agent shall give
notice that the condition or situation which gave rise to the suspension shall
no

 

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longer exist, and (c) such Lender’s Loans then outstanding as LIBO Rate Loans,
if any, shall be converted on the last day of the Interest Period for such Loans
or within such earlier period as required by law as Base Rate Loans. The Company
hereby agrees to promptly pay any Lender, upon its demand, any additional
amounts necessary to compensate such Lender for actual and direct costs (but not
including anticipated profits) reasonably incurred by such Lender in making any
repayment in accordance with this Section including, but not limited to, any
interest or fees payable by such Lender to lenders of funds obtained by it in
order to make or maintain its LIBO Rate Loans hereunder; provided any such
amounts being demanded of the Company by such Lender shall be made on a
nondiscriminatory basis, consistent with other requests being made by such
Lender in connection with other similar loans held by such Lender. A certificate
(which certificate shall include a description of the basis for the computation)
as to any additional amounts payable pursuant to this Section submitted by such
Lender, through the Agent, to the Company shall be conclusive in the absence of
manifest error. Each Lender agrees to use reasonable efforts (including
reasonable efforts to change its Lending Office) to avoid or to minimize any
amounts which may otherwise be payable pursuant to this Section; provided,
however, that such efforts shall not cause the imposition on such Lender of any
additional costs or legal or regulatory burdens deemed by such Lender in its
sole discretion to be material.

Section 2.19 Replacement of Lenders

(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 2.14, or requires the Company to pay any Indemnified
Taxes or additional amounts to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.16, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.14 or Section 2.16, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Company
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

(b) Replacement of Lenders. If any Lender requests compensation under
Section 2.14, any Lender does not provide its consent in the case of any request
of the Company where all Lenders are required to so consent (and the Required
Lenders have consented thereto), or if the Company is required to pay any
Indemnified Taxes or additional amounts to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.16, or if any
Lender becomes a Defaulting Lender then the Company may, at its sole expenses
and effort, upon notice to such Lender and the Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in, and consents required by, Section 9.6), all of its
interests, rights and obligations under this Agreement and the related Loan
Documents to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment), provided that:

 

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(i) the Company shall have paid to the Agent the assignment fee (if any)
specified in Section 9.6;

(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in Letters of Credit,
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder and under the other Loan Documents (including any amounts under
Section 2.15) from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Company (in the case of all other amounts);

(iii) in the case of any such assignment resulting from a claim for compensation
under Section 2.14 or payments required to be made pursuant to Section 2.16,
such assignment will result in a reduction in such compensation or payments
thereafter; and

(iv) such assignment does not conflict with applicable law.

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Company to require such assignment and delegation
cease to apply.

Section 2.20 Cash Collateral.

(a) Cash Collateral.

(i) At any time that there shall exist a Defaulting Lender, immediately upon the
request of the Agent, the Issuing Lender or any Swingline Lender, the Company
shall deliver to the Agent Cash Collateral in an amount sufficient to cover all
Fronting Exposure (after giving effect to Section 2.21(g) and any Cash
Collateral provided by the Defaulting Lender).

(ii) If, as of the Letter of Credit Expiration Date, any Letter of Credit may
for any reason remain outstanding, the Company shall immediately deliver to the
Agent for the benefit of the Issuing Lender Cash Collateral in an amount to
equal 105% of the stated amount of all such Letters of Credit.

(b) Grant of Security Interest. All Cash Collateral (other than credit support
not constituting funds subject to deposit) shall be maintained in blocked,
non-interest bearing deposit accounts with the Agent. The Company, and to the
extent provided by any Lender, such Lender, hereby grants to (and subjects to
the control of) the Agent, for the benefit of the Agent, the Issuing Lenders and
the Lenders (including the Swingline Lender), and agrees to maintain, a first
priority security interest in all such cash, deposit accounts and all balances
therein, and all other property so provided as collateral pursuant hereto, and
in all proceeds of the foregoing, all as security for the obligations to which
such Cash Collateral may be applied pursuant to clause (c) below. If at any time
the Agent, Issuing Lender or Swingline Lender determines that Cash Collateral is
subject to

 

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any right or claim of any Person other than the Agent as herein provided, or
that the total amount of such Cash Collateral is less than the applicable
Fronting Exposure and other obligations secured thereby, the Company or the
relevant Defaulting Lender will, promptly upon demand by the Agent, Issuing
Lender or Swingline Lender pay or provide to the Agent additional Cash
Collateral in an amount sufficient to eliminate such deficiency.

(c) Application. Notwithstanding anything to the contrary contained in this
Agreement, Cash Collateral provided under any of this Section or Section 2.21 in
respect of Letters of Credit or Swingline Loans, shall be held and applied to
the satisfaction of the specific LOC Obligations, Swingline Loans, obligations
to fund participations therein (including, as to Cash Collateral provided by a
Defaulting Lender, any interest accrued on such obligation) and other
obligations for which the Cash Collateral was so provided, prior to any other
application of such property as may be provided for herein.

(d) Release. Cash Collateral (or the appropriate portion thereof) provided to
reduce Fronting Exposure or other obligations shall be released promptly
following (i) the elimination of the applicable Fronting Exposure or other
obligations giving rise thereto (including by the termination of Defaulting
Lender status of the applicable Lender (or, as appropriate, its assignee)), or
(ii) the Agent’s good faith determination that there exists excess Cash
Collateral (which determination shall be confirmed by any Issuing Lender or
Swingline Lender affected by such release of Cash Collateral); provided,
however, (A) that Cash Collateral furnished by or on behalf of a Credit Party
shall not be released during the continuance of a Default (and following
application as provided in this Section may be otherwise applied in accordance
with Section 2.11), and (B) the Person providing Cash Collateral and each
applicable Issuing Lender or Swingline Lender may agree that Cash Collateral
shall not be released but instead held to support future anticipated Fronting
Exposure or other obligations.

Section 2.21 Defaulting Lenders.

Notwithstanding anything to the contrary contained in this Agreement, if any
Lender becomes a Defaulting Lender, then, until such time as such Lender is no
longer a Defaulting Lender, to the extent permitted by applicable law:

(a) Waivers and Amendments. Such Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in Section 9.1.

(b) Reallocation of Payments. Any payment of principal, interest, fees or other
amounts received by the Agent under this Agreement for the account of such
Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Article VII or otherwise) or received by the Agent from a Defaulting Lender
pursuant to Section 9.7 shall be applied at such time or times as may be
determined by the Agent as follows: first, to the payment of any amounts owing
by such Defaulting Lender to the Agent hereunder; second, to the payment on a
pro rata basis of any amounts owing by such

 

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Defaulting Lender to any Issuing Lender or Swingline Lender hereunder; third, to
Cash Collateralize the Issuing Lenders’ Fronting Exposure with respect to such
Defaulting Lender in accordance with Section 2.20; fourth, as the Company may
request (so long as no Default or Event of Default exists), to the funding of
any Loan in respect of which such Defaulting Lender has failed to fund its
portion thereof as required by this Agreement, as determined by the Agent;
fifth, if so determined by the Agent and the Company, to be held in a deposit
account and released pro rata in order to (x) satisfy such Defaulting Lender’s
potential future funding obligations with respect to Loans under this Agreement
and (y) Cash Collateralize the Issuing Lenders’ future Fronting Exposure with
respect to such Defaulting Lender with respect to future Letters of Credit
issued under this Agreement, in accordance with Section 2.20; sixth, to the
payment of any amounts owing to the Lenders, the Issuing Lenders or Swingline
Lenders as a result of any judgment of a court of competent jurisdiction
obtained by any Lender, the Issuing Lenders or Swingline Lenders against such
Defaulting Lender as a result of such Defaulting Lender’s breach of its
obligations under this Agreement; seventh, so long as no Default or Event of
Default exists, to the payment of any amounts owing to the Company as a result
of any judgment of a court of competent jurisdiction obtained by the Company
against such Defaulting Lender as a result of such Defaulting Lender’s breach of
its obligations under this Agreement; and eighth, to such Defaulting Lender or
as otherwise directed by a court of competent jurisdiction; provided that if
(x) such payment is a payment of the principal amount of any Revolving Loans or
funded participations in Swingline Loans or Letters of Credit in respect of
which such Defaulting Lender has not fully funded its appropriate share, and
(y) such Revolving Loans or funded participations in Swingline Loans or Letters
of Credit were issued at a time when the conditions set forth in Section 4.2
were satisfied or waived, such payment shall be applied solely to pay the
Revolving Loans of, and funded participations in Swingline Loans or Letters of
Credit owed to, all Non-Defaulting Lenders on a pro rata basis prior to being
applied to the payment of any Loans of, or Letters of Credit owed to, such
Defaulting Lender until such time as all Loans and funded and unfunded
participations in LOC Obligations and Swingline Loans are held by the Lenders
pro rata in accordance with the Revolving Commitments without giving effect to
Section 2.21(c). Any payments, prepayments or other amounts paid or payable to a
Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting
Lender or to post Cash Collateral pursuant to this Section 2.21(b) shall be
deemed paid to and redirected by such Defaulting Lender, and each Lender
irrevocably consents hereto.

(c) Reallocation of Revolving Commitment Percentages to Reduce Fronting
Exposure. All or any part of such Defaulting Lender’s participation in LOC
Obligations and Swingline Loans shall be reallocated among the Non-Defaulting
Lenders in accordance with their respective Revolving Commitment Percentage
(calculated without regard to such Defaulting Lender’s Revolving Commitment) but
only to the extent that (x) the conditions set forth in Section 4.2 are
satisfied at the time of such reallocation (and, unless the Company shall have
otherwise notified the Agent at such time, the Company shall be deemed to have
represented and warranted that such conditions are satisfied at such time), and
(y) such reallocation does not cause the aggregate Revolving Loans outstanding,
participations in LOC Obligations and Swingline Loans of any Non-

 

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Defaulting Lender to exceed such Non-Defaulting Lender’s Revolving Commitment.
No reallocation hereunder shall constitute a waiver or release of any claim of
any party hereunder against a Defaulting Lender arising from that Lender having
become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a
result of such Non-Defaulting Lender’s increased exposure following such
reallocation.

(d) New Swingline Loans/Letters of Credit. So long as any Lender is a Defaulting
Lender, (i) the Swingline Lender shall not be required to fund any Swingline
Loans unless it is satisfied that it will have no Fronting Exposure after giving
effect to such Swingline Loan and to any reallocation under Section 2.21(c) and
(ii) no Issuing Lender shall be required to issue, extend, renew or increase any
Letter of Credit unless it is satisfied that it will have no Fronting Exposure
after giving effect thereto and to any reallocation under Section 2.21(c).

(e) Cash Collateral, Repayment of Swingline Loans. If the reallocation described
in Section 2.21(c) above cannot, or can only partially, be effected, the Company
shall, without prejudice to any right or remedy available to it hereunder or
under law, (x) first, prepay Swingline Loans in an amount equal to the Swingline
Lender’s Fronting Exposure and (y) second, Cash Collateralize the Swingline
Lender’s Fronting Exposure in accordance with the procedures set forth in
Section 2.20.

(f) Certain Fees. For any period during which such Lender is a Defaulting
Lender, such Defaulting Lender (i) shall not be entitled to receive any
Commitment Fee pursuant to Section 2.4 (and the Company shall not be required to
pay any such fee that otherwise would have been required to have been paid to
such Defaulting Lender) and (ii) shall not be entitled to receive any letter of
credit fees pursuant to Section 2.4(b) otherwise payable to the account of a
Defaulting Lender with respect to any Letter of Credit as to which such
Defaulting Lender has not provided Cash Collateral pursuant to Section 2.20.
With respect to any Letter of Credit fee pursuant to Section 2.4(b) not required
to be paid to any Defaulting Lender pursuant to this Section 2.21(f), the
Company shall (x) pay to each Non-Defaulting Lender that portion of any such fee
otherwise payable to such Defaulting Lender with respect to such Defaulting
Lender’s participation in LOC Obligations or Swingline Loans that has been
reallocated to such Non-Defaulting Lender pursuant to Section 2.21(c) above,
(y) after giving effect to any reallocation under Section 2.21(c), pay to each
Issuing Lender and Swingline Lender, as applicable, the amount of any such fee
otherwise payable to such Defaulting Lender to the extent allocable to such
Issuing Lender’s or Swingline Lender’s Fronting Exposure to such Defaulting
Lender, and (z) not be required to pay the remaining amount of any such fee.

(g) Defaulting Lender Cure. If the Company, the Agent, the Swingline Lender and
the Issuing Lender agree in writing in their sole discretion that a Defaulting
Lender should no longer be deemed to be a Defaulting Lender, the Agent will so
notify the parties hereto, whereupon as of the date specified in such notice and
subject to any conditions set forth therein (which may include arrangements with
respect to any Cash Collateral), that Lender will, to the extent applicable,
purchase that portion of outstanding

 

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Revolving Loans of the other Lenders or take such other actions as the Agent may
determine to be necessary to cause the Revolving Loans and funded and unfunded
participations in Letters of Credit and Swingline Loans to be held on a pro rata
basis by the Lenders in accordance with their Revolving Commitment Percentages
(without giving effect to Section 2.21(c)), whereupon such Lender will cease to
be a Defaulting Lender; provided that no adjustments will be made retroactively
with respect to fees accrued or payments made by or on behalf of the Company
while such Lender was a Defaulting Lender; and provided, further, that except to
the extent otherwise expressly agreed by the affected parties, no change
hereunder from Defaulting Lender to Lender will constitute a waiver or release
of any claim of any party hereunder arising from such Lender’s having been a
Defaulting Lender.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

The Company hereby represents and warrants to the Lenders and the Agent as
follows:

Section 3.1 Corporate Existence.

(a) The Company (i) is a real estate investment trust duly organized, validly
existing and in good standing under the laws of the State of Maryland, (ii) has
adequate power and authority and full legal right to own or to hold under lease
its properties and to carry on the business in which it is presently engaged;
and (iii) is qualified, licensed, admitted or approved to do business as a
foreign business entity in each jurisdiction wherein the character of the
properties owned or held under lease by it, or the nature of the business
conducted by it, makes such qualification necessary, except where such failure
to qualify could not reasonably be expected to have a Material Adverse Effect.

(b) The Company has adequate power and authority and has full legal right to
enter into each of the Loan Documents to which it is or is to become a party, to
perform, observe and comply with all of its agreements and obligations under
each of such documents, and to make all of the borrowings contemplated by this
Agreement.

Section 3.2 Subsidiaries.

The Company has no Subsidiaries other than those Subsidiaries listed on Schedule
3.2 and such other Subsidiaries established by the Company from time to time
subject to the requirements of Section 5.33. As of the applicable date indicated
thereon, the capital structure of the Company is set forth on Schedule 3.2.

Section 3.3 Authority, Etc.

The execution and delivery by the Company of each of the Loan Documents to which
it is or is to become a party, the performance by the Company of all of its
agreements and

 

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obligations under each of such documents and the making by the Company of all of
the borrowings contemplated by this Agreement as and when such borrowings are
made, have been duly authorized by all necessary action on the part of the
Company and its shareholders and do not (i) contravene any provision of its
declaration of trust, by-laws or other organizational document, (ii) conflict
with, or result in a breach of any material term, condition or provision of, or
constitute a default under or result in the creation of any mortgage, lien,
pledge, charge, security interest or other encumbrance upon any of its property
under, any agreement, trust deed, indenture, mortgage or other instrument to
which it is or may become a party or by which it or any of its property is or
may become bound or affected, (iii) violate or contravene any provision of any
law, regulation, order or judgment of any court or governmental or regulatory,
bureau, agency or official except where such violation or contravention could
not reasonably be expected to have a Material Adverse Effect, (iv) require any
waivers, consents or approvals by any of the creditors of the Company,
(v) require any consents or approvals by any shareholders of the Company (except
such as will be duly obtained on or prior to the Closing Date and will be in
full force and effect on and as of the Closing Date), or (vi) require any
approval, consent, order, authorization or license by, or giving notice to, or
taking any other action with respect to, any governmental or regulatory
authority or agency under any provision of any applicable law, except those
actions which have been taken or will be taken prior to the Closing Date or
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect.

Section 3.4 Binding Effect Of Documents, Etc.

The Company has duly executed and delivered each of the Loan Documents to which
it is a party and each of such documents is in full force and effect. The
agreements and obligations of the Company contained in each of the Loan
Documents to which it is a party constitute its legal, valid and binding
obligations enforceable against it in accordance with their respective terms
except as enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the enforcement of
creditors’ rights and except to the extent that the availability of the remedy
of specific performance or injunctive relief is subject to the discretion of the
court before which any proceeding therefor may be brought.

Section 3.5 No Events Of Default, Etc.

No Event of Default has occurred and is continuing. Neither the Company nor any
of its Subsidiaries is in default under or with respect to any of its
Contractual Obligations in any respect which could reasonably be expected to
have a Material Adverse Effect. No event has occurred and is continuing, and no
condition exists within the knowledge of the Company which would, with notice or
the lapse of time, or both, constitute an Event of Default.

Section 3.6 Title to Properties; Leases.

Except as indicated on Schedule 3.6 hereto, the Company and its Subsidiaries own
all of the assets reflected in the balance sheet of the Company as at
December 31, 2010, or acquired since that date (except property and assets sold
or otherwise disposed of in the ordinary course of business since that date),
subject to no mortgages, leases, liens or other encumbrances except Permitted
Liens.

 

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Section 3.7 Financial Statements.

The Company has delivered to the Agent and the Lenders (a) the balance sheets
and related statements of income and of cash flows of the Company and its
Subsidiaries for the fiscal years ended December 31, 2008, December 31, 2009 and
December 31, 2010, audited by KPMG, (b) a company-prepared unaudited balance
sheet and related statement of income for the three months ending March 30,
2011, (c) balance sheets and related statements of income for each of the
Company’s Health Care Facilities which is leased to UHS, in each case for the
year ended December 31, 2010 and (d) the five-year projections of the Company
which have been prepared in good faith based upon reasonable assumptions. The
financial statements referred to in clauses (a) and (b) above are complete and
correct in all material respects and present fairly the financial condition of
the Company and its Subsidiaries as of such dates. The financial statements
referred to in clauses (a) and (b) above, including the related schedules and
notes thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as disclosed therein).

Section 3.8 No Material Changes; No Internal Control Event, Full Disclosure,
Etc.

Since December 31, 2010 (and, in addition, after delivery of annual audited
financial statements in accordance with Section 5.3(a), from the date of the
most recently delivered annual audited financial statements), (a) there has been
no development or event which has had or could reasonably be expected to have a
Material Adverse Effect and (b) no Internal Control Event has occurred. No
representation or warranty made by the Company in this Agreement, the other Loan
Documents or in any agreement instrument, document, certificate, statement or
letter furnished to the Lenders or the Agent by or on behalf of the Company in
connection with any of the transactions contemplated by any of the Loan
Documents contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained therein not
misleading in light of the circumstances in which they are made. Except as
disclosed in writing to the Lenders and the Agent, there is no fact known to the
Company or its Subsidiaries which, in the Company’s reasonable belief, has had
or could be reasonably expected to have a Material Adverse Effect.

Section 3.9 Permits; Patents; Copyrights.

The Company and its Subsidiaries possess all franchises, patents, copyrights,
trademarks, tradenames, licenses and permits and rights in respect of the
foregoing, adequate for the conduct of their respective businesses substantially
as now conducted without known conflict with any rights of others.

Section 3.10 Litigation.

There are no actions, suits, proceedings or investigations of any kind pending
or threatened against the Company or any of its Subsidiaries or against any of
their properties or

 

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revenues before any court, tribunal or administrative agency or board which, if
adversely determined, could be reasonably expected to have a Material Adverse
Effect.

Section 3.11 Compliance With Other Instruments, Laws, Etc.

Neither the Company nor any of its Subsidiaries is in violation of any provision
of its declaration of trust (or corporate charter or similar document) or
by-laws or any agreement or instrument by which it or any of its properties may
be bound or any decree, order, judgment, or, to the knowledge of the Company’s
officers, any Requirement of Law, including without limitation, the provisions
of the Code and related regulations governing real estate investment trusts,
ERISA and environmental laws, in a manner which could result in the imposition
of substantial penalties or could be reasonably expected to have a Material
Adverse Effect.

Section 3.12 Tax Status; REIT Status.

(a) The Company and its Subsidiaries have made or filed all federal and state
income and, all other material tax returns, reports and declarations required by
any jurisdiction to which it is subject; and has paid all taxes and other
governmental assessments and charges shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith;
and has set aside on its books provisions reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim.

(b) The Company has operated its business at all times so as to satisfy all
requirements necessary to qualify and maintain the Company’s status as a real
estate investment trust under Section 856 through 860 of the Code. The Company
has maintained adequate records so as to comply with all the record-keeping
requirements relating to its qualification as a real estate investment trust as
required by the Code and applicable regulations of the Department of the
Treasury promulgated thereunder and has properly prepared and timely filed
(taking into account any valid extensions) with the U.S. Internal Revenue
Service all returns and reports required thereby.

Section 3.13 Investment Company Act.

Neither the Company nor any of its Subsidiaries is an “investment company”, or
an “affiliated company” or a “principal underwriter” of an “investment company”,
as such terms are defined in the Investment Company Act of 1940. Neither the
Company nor any of its Subsidiaries is subject to regulation under the Federal
Power Act, the Interstate Commerce Act, or any federal or state statute or
regulation limiting its ability to incur the Indebtedness hereunder.

Section 3.14 Absence of Financing Statements, Etc.

Except as indicated on Schedule 5.11(e) hereto and except in connection with the
Loan Documents, there is no financing statement, security agreement, chattel
mortgage, real estate

 

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mortgage or other document executed by the Company or any of its Subsidiaries
(other than Excluded Subsidiaries) filed or recorded with any filing records,
registry, or other public office of any jurisdiction, which purports to cover,
affect or give notice of any present or possible future lien on, or security
interest in, any assets or property of the Company or any of its Subsidiaries
(other than any Excluded Subsidiary) or rights thereunder.

Section 3.15 Certain Transactions.

Except for arm’s length transactions pursuant to which the Company or any of its
Subsidiaries makes payments in the ordinary course of business upon terms no
less favorable than the Company or such Subsidiary could obtain from third
parties, none of the officers, directors, or employees of the Company or any of
its Subsidiaries is presently a party to any transaction with the Company or any
of its Subsidiaries having a value in excess of $250,000 (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any corporation, partnership, trust or other entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.

Section 3.16 Pension Plans.

Neither the Company nor any of its Subsidiaries maintains nor contributes, or
has maintained or contributed in the last seven years, to any Pension Plan.

Section 3.17 Margin Regulations.

No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. The Company
does not own “margin stock” except as identified in the financial statements of
the Company delivered to Agent pursuant to Section 5.3 and the aggregate value
of all “margin stock” owned by the Company does not exceed 25% of the value of
its assets.

Section 3.18 Environmental Matters.

(a) To the best knowledge of the Company, the facilities and properties owned,
leased or operated by the Company or any of its Subsidiaries (collectively, the
“Properties”) do not contain any Materials of Environmental Concern in amounts
or concentrations which (i) constitute a violation of, or (ii) could reasonably
be expected to give rise to liability under, any Environmental Law except to the
extent such violation or liability could not reasonably be expected to have a
Material Adverse Effect.

(b) To the best knowledge of the Company, (i) the Properties and all operations
of the Company at the Properties are in compliance, and have in the last five

 

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years been in compliance, in all material respects with all applicable
Environmental Laws, and (ii) there is no contamination at, under or about the
Properties or violation of any Environmental Laws with respect to the Properties
or the business operated by the Company (the “Business”) except to the extent
such noncompliance or violation could not reasonably be expected to have a
Material Adverse Effect.

(c) Except as set forth on Schedule 3.18, the Company has not received any
written or actual notice of material violation, alleged violation,
non-compliance, liability or potential liability regarding environmental matters
or compliance with Environmental Laws with regard to any of the Properties or
the Business, nor does the Company have knowledge or reason to believe that any
such notice will be received or is being threatened.

(d) To the best knowledge of the Company, Materials of Environmental Concern
have not been transported or disposed of from the Properties in violation of, or
in a manner or to a location which could reasonably be expected to give rise to
material liability under any Environmental Law, nor have any Materials of
Environmental Concern been generated, treated, stored or disposed of at, on or
under any of the Properties in violation of, or in a manner that could
reasonably be expected to give rise to material liability under, any applicable
Environmental Law.

(e) No judicial proceeding or governmental or administrative action is pending
or, to the knowledge of the Company, threatened, under any Environmental Law to
which the Company is or will be named as a party with respect to the Properties
or the Business, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with respect to
the Properties or the Business that, in each case, individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.

(f) To the best knowledge of the Company, there has been no release or threat of
release of Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations of the Company in connection with the
Properties or otherwise in connection with the Business, in violation of or in
amounts or in a manner that could reasonably be expected to give rise to
material liability under Environmental Laws.

Section 3.19 Use of Proceeds.

The proceeds of the Loans and Letters of Credit shall be used solely by the
Company as follows:

(a) with respect to the Loans, (i) to refinance certain existing indebtedness of
the Company, (ii) to pay any fees and expenses, (iii) to provide for the working
capital and general corporate requirements of the Company and its Subsidiaries
(including to make Investments permitted by Section 5.25(e) and for acquisitions
permitted under this

 

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Agreement), (iv) to provide mortgage and construction financing permitted by
Sections 7.26 and 7.27, (v) to make Distributions permitted by Section 5.24, and
(vi) for other general corporate purposes; and

(b) the Letters of Credit shall be used only for or in connection with appeal
bonds, reimbursement obligations arising in connection with surety and
reclamation bonds, reinsurance, domestic or international trade transactions and
obligations not otherwise aforementioned relating to transactions entered into
by the applicable account party in the ordinary course of business.

Section 3.20 Indebtedness.

Except as otherwise permitted under Sections 5.9, the Company and its
Subsidiaries (other than Excluded Subsidiaries) have no Indebtedness.

Section 3.21 Solvency.

The fair saleable value of the assets of the Company and its Subsidiaries, taken
as a whole, measured on a going concern basis, exceeds all probable liabilities,
including those to be incurred pursuant to this Agreement. The Company and its
Subsidiaries, taken as a whole, do not (a) have unreasonably small capital in
relation to the business in which it is or proposes to be engaged or (b) have
incurred, or believes that it will incur after giving effect to the transactions
contemplated by this Agreement, debts beyond its ability to pay such debts as
they become due.

Section 3.22 Investments.

All Investments of the Company and its Subsidiaries are Investments permitted
under Section 5.25.

Section 3.23 Labor Matters.

There are no collective bargaining agreements or multiemployer plans covering
the employees of the Company or any of its Subsidiaries as of the Closing Date
and neither the Company nor any of its Subsidiaries (i) has suffered any
strikes, walkouts, work stoppages or other material labor difficulty within the
last five years, or (ii) has knowledge of any potential or pending strike,
walkout or work stoppage. No unfair labor practice complaint is pending against
the Company or any of its Subsidiaries or, to the best knowledge of the Company,
before any Governmental Authority.

Section 3.24 Accuracy and Completeness of Information.

All factual information (which does not include projections) heretofore,
contemporaneously or hereafter furnished by or on behalf of the Company or any
of its Subsidiaries or the Agent or any Lender for purposes of or in connection
with this Agreement or any other Loan Document, or any transaction contemplated
hereby or thereby, is or will be true and accurate in all material respects and
not incomplete by omitting to state any material fact

 

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necessary to make such information not misleading. There is no fact now known to
the Company which has, or could reasonably be expected to have, a Material
Adverse Effect which fact has not been set forth herein, in the financial
statements of the Company furnished to the Agent and/or the Lenders, or in any
certificate, opinion or other written statement made or furnished by the Company
to the Agent and/or the Lender.

Section 3.25 Material Contracts.

As of the Closing Date, Schedule 3.25 sets forth a true and correct and complete
list of all Material Contracts currently in effect. Except as permitted by
Section 5.32, all of the Material Contracts are in full force and effect and no
material defaults currently exist thereunder.

Section 3.26 Insurance.

As of the Closing Date, the present insurance coverage of the Company and its
Subsidiaries and, where available, of the lessees of each Health Care Facility
is outlined as to carrier, policy number, expiration date, type and amount on
Schedule 3.26. The insurance coverage of the Company complies with the
requirements set forth in Section 5.18.

Section 3.27 Anti-Terrorism Laws.

Neither the Company nor any of its Subsidiaries is an “enemy” or an “ally of the
enemy” within the meaning of Section 2 of the Trading with the Enemy Act of the
United States of America (50 U.S.C. App. §§ 1 et seq.), as amended. Neither the
Company nor any of its subsidiaries is in violation of (a) the Trading with the
Enemy Act, as amended, (b) any of the foreign assets control regulations of the
United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or
any enabling legislation or executive order relating thereto, or (c) the Patriot
Act. Neither the Company nor any of its subsidiaries (i) is a blocked person
described in section 1 of the Anti-Terrorism Order or (ii) to the best of its
knowledge, engages in any dealings or transactions, or is otherwise associated,
with any such blocked person.

Section 3.28 Compliance with OFAC Rules and Regulations.

Neither the Company nor any of its Subsidiaries (i) is a Sanctioned Person,
(ii) has more than 15% of its assets in Sanctioned Entities, or (iii) derives
more than 15% of its operating income from investments in, or transactions with
Sanctioned Persons or Sanctioned Entities. No part of the proceeds of any
Extension of Credit hereunder will be used directly or indirectly to fund any
operations in, finance any investments or activities in or make any payments to,
a Sanctioned Person or a Sanctioned Entity.

Section 3.29 Compliance with FCPA.

The Company and each of its Subsidiaries is in compliance with the Foreign
Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et seq., and any foreign counterpart
thereto. Neither the Company nor any of its Subsidiaries has made a payment,
offering, or promise to pay, or authorized the payment of, money or anything of
value (a) in order to assist in obtaining or

 

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retaining business for or with, or directing business to, any foreign official,
foreign political party, party official or candidate for foreign political
office, (b) to a foreign official, foreign political party or party official or
any candidate for foreign political office, and (c) with the intent to induce
the recipient to misuse his or her official position to direct business
wrongfully to the Company or such subsidiary or to any other Person, in
violation of the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et seq.

Section 3.30 Equity Interests.

Set forth on Schedule 3.30, as of the Closing Date and as of the last date such
Schedule was required to be updated in accordance with Section 5.3(i), is a list
of 100% (or, if less, the full amount owned by the Company) of the issued and
outstanding Equity Interests owned by the Company of each Domestic Subsidiary of
the Company.

Section 3.31 Security Documents.

The Security Documents create valid and enforceable security interests in, and
Liens on, the Collateral purported to be covered thereby. Except as set forth in
the Security Documents, such security interests and Liens are currently (or will
be, upon (a) the filing of appropriate financing statements with the Secretary
of State of the state of incorporation or organization for each Credit Party,
and (b) the Agent obtaining control or possession over those items of Collateral
in which a security interest is perfected through control or possession)
perfected security interests and Liens in favor of the Agent, for the benefit of
the Secured Parties, prior to all other Liens other than Permitted Liens.

ARTICLE IV

CONDITIONS PRECEDENT

Section 4.1 Conditions Precedent to Closing.

This Agreement shall be effective as of the date on which all of the conditions
set forth below shall have been satisfied or waived in writing by the Agent and
each of the Lenders:

(a) Execution of Agreement. Each Lender, the Agent and the Company shall have
executed and delivered this Agreement.

(b) Subsidiary Guaranty. The Company shall have caused each (i) 73 Medical
Building, L.L.C., (ii) Cypresswood Investments L.P. and (iii) Sheffield
Properties, L.L.C. to execute and deliver to the Agent the Subsidiary Guaranty.

 

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(c) Pledge Agreement. The Company shall have executed and delivered the Pledge
Agreement.

(d) Corporate Documents. The Agent shall have received from the Company:

(i) a certificate of recent date of the Secretary of State of the applicable
state of jurisdiction as to the good standing of the Company and each Guarantor
and a certificate of recent date of the Secretary of State of each foreign
jurisdiction in which the Company and each Guarantor is qualified as a foreign
corporation, unless the failure to be so qualified could not reasonably be
expected to have a Material Adverse Effect;

(ii) a certificate from the President, Chief Financial Officer or Treasurer of
the Company certifying that the representations and warranties of the Company
set forth herein are true and correct as of the date hereof;

(iii) a certificate from the Secretary or an Assistant Secretary of the Company
and each Guarantor certifying as to the declaration of trust, bylaws and any
other organizational documents of the Company and each Guarantor and the
resolutions of the Board of Directors of the Company and each Guarantor
authorizing the execution, delivery and performance of this Agreement;

(iv) an incumbency certificate from the Secretary or an Assistant Secretary of
the Company and each Guarantor certifying to the signatures and status of the
officers signing this Agreement;

(v) Notes to the extent requested by the Lenders in accordance with Sections
2.1(e) and 2.9(d), each duly executed by the Company and dated the Closing Date;

(vi) an opinion of the general counsel for the Company, as to the Company and
each Guarantor, in the form of satisfactory to the Agent and the Lenders;

(vii) an opinion of Fulbright & Jaworski L.L.P. counsel for the Company, as to
the Company and each Guarantor, in a form satisfactory to the Agent and the
Lenders;

(viii) stock certificates or other certificates evidencing the Equity Interest
pledged pursuant to the Security Documents, together with an undated stock power
for each such certificate duly executed in blank by the registered owner
thereof; and

(ix) completed UCC financing statements for each appropriate jurisdiction as is
necessary, in the Agent’s sole discretion, to perfect the Agent’s security
interest in the Collateral;

 

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(e) Arranger Fee. The Company shall have paid to each Arranger, all structuring
and arrangement fees due and payable to such Arranger.

(f) Fees. The Company shall have paid to the Lenders, the Agent and Arrangers
all fees due and payable pursuant to the Fee Letters and Section 2.4 and any
other fees required to be paid prior to or on the Closing Date in connection
with the execution and delivery of this Agreement, together with all legal fees
and expenses incurred by the Agent in connection with this Agreement.

(g) Proceedings And Documents. All corporate, governmental and other proceedings
in connection with the transactions contemplated by the Loan Documents and all
instruments and documents incidental thereto shall be in form and substance
reasonably satisfactory to the Agent and the Agent shall have received (with
copies for each Lender) all such counterpart originals or certified or other
copies of all such instruments and documents as the Agent shall have reasonably
requested.

(h) Consents. The Company shall have provided to the Agent evidence satisfactory
to the Agent that all governmental, shareholder and third party consents and
approvals necessary in connection with the transactions contemplated hereby have
been obtained and remain in effect.

(i) Corporate Structure and Other Matters. The corporate, capital and ownership
structure of the Company and its Subsidiaries shall be as described on Schedule
3.2 and shall otherwise be satisfactory to the Agent and the Lenders.

(j) No Material Adverse Change. Since December 31, 2010, there shall have not
occurred any event or condition that has had or could be reasonably expected,
either individually or in the aggregate, to have a Material Adverse Effect.

(k) No Material Litigation. There shall be no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened in any court
or before any arbitrator or governmental authority that could reasonably be
expected to have a Material Adverse Effect.

(l) Repayment of Existing Indebtedness. All of the existing indebtedness for
borrowed money of the Company and its Subsidiaries (other than Excluded
Subsidiaries) shall be repaid in full and all liens relating thereto, if any,
extinguished on or prior to the Closing Date (including, without limitation,
that certain Credit Agreement dated as of January 19, 2007 by and among the
Company, the lenders party thereto and Wells Fargo, as successor in interest by
merger of Wachovia Bank, National Association, as administrative agent) other
than Non-Recourse Debt and the Indebtedness set forth on Schedule 5.9.

(m) Due Diligence. The Agent and Arranger shall have completed in form and scope
satisfactory thereto their business, legal, financial and environmental due
diligence

 

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on the Company and its Subsidiaries (including due diligence related to
management, strategy, material customers and contracts) and shall be satisfied
with the corporate and capital structure of the Company and its Subsidiaries in
all material aspects.

(n) Financial Statements. All financial statements referred to in Section 3.7
shall have been received by the Agent and shall be in form and substance
satisfactory to the Agent and the Lenders.

(o) [Reserved].

(p) Solvency. The Agent shall have received a certificate from the Company
executed by the Chief Financial Officer as to the financial condition, solvency
and related matters of the Company and its Subsidiaries taken as a whole, in
each case after giving effect to the initial borrowings under the Loan
Documents, in substantially the form of Exhibit 4.1(p).

(q) Account Designation Letter. The Agent shall have received the executed
Account Designation Letter in the form of Exhibit 1.1(a) hereto.

(r) Compliance with Laws. The financings and other transactions contemplated
hereby shall be in compliance with all applicable laws and regulations
(including all applicable securities and banking laws, rules and regulations).

(s) Bankruptcy. There shall be no bankruptcy or insolvency proceedings pending
or threatened with respect to the Company or any of the Subsidiaries.

(t) Officer’s Certificates. The Agent shall have received a certificate executed
by a the President, Chief Financial Officer or Treasurer of the Company as of
the Closing Date stating that (i) no action, suit, investigation or proceeding
is pending or, to the knowledge of the Company, threatened in any court or
before any arbitrator or governmental instrumentality that purports to affect
the Company or any transaction contemplated by the Loan Documents, if such
action, suit, investigation or proceeding could reasonably be expected to have a
Material Adverse Effect and (ii) immediately after giving effect to this
Agreement (including the initial Loans made and Letters of Credit issued
hereunder), the other Loan Documents and all the transactions contemplated
herein and therein to occur on such date, (A) no Default or Event of Default
exists, (B) all representations and warranties contained herein and in the other
Loan Documents are true and correct in all material respects, and (C) the
Company is in compliance with each of the financial covenants set forth in
Sections 5.5, 5.6, 5.7 and 5.8, and demonstrating compliance with such financial
covenants.

(u) Patriot Act Certificate. The Agent shall have received a certificate
satisfactory thereto, substantially in the form of Exhibit 4.1(u), for benefit
of itself and the Lenders, provided by the Company that sets forth information
required by the Patriot Act including, without limitation, the identity of the
Company and the Guarantors, the name and address of the Company and the
Guarantors and other information that will

 

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allow the Agent or any Lender, as applicable, to identify the Company and the
Guarantors in accordance with the Patriot Act.

(v) Additional Matters. All other documents and legal matters in connection with
the transactions contemplated by this Agreement shall be reasonably satisfactory
in form and substance to the Agent and its counsel.

Section 4.2 Conditions To Loans.

The obligation of each Lender to make any Extension of Credit hereunder (other
than a conversion or continuation under Section 2.8) is subject to the
satisfaction of the following conditions precedent on the date of making such
Extension of Credit:

(a) Representations and Warranties. The representations and warranties made by
the Credit Parties herein, in the other Loan Documents and which are contained
in any certificate furnished at any time under or in connection herewith shall
(i) with respect to representations and warranties that contain a materiality
qualification, be true and correct and (ii) with respect to representations and
warranties that do not contain a materiality qualification, be true and correct
in all material respects, in each case on and as of the date of such Extension
of Credit as if made on and as of such date except for any representation or
warranty made as of an earlier date, which representation and warranty shall
remain true and correct as of such earlier date.

(b) No Default or Event of Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the Extension
of Credit to be made on such date unless such Default or Event of Default shall
have been waived in accordance with this Agreement.

(c) Compliance with Commitments. Immediately after giving effect to the making
of any such Extension of Credit (and the application of the proceeds thereof),
(i) the sum of the aggregate principal amount of outstanding Revolving Loans
plus outstanding Swingline Loans plus outstanding LOC Obligations shall not
exceed the Revolving Committed Amount then in effect, (ii) the outstanding LOC
Obligations shall not exceed the LOC Committed Amount, and (iii) the outstanding
Swingline Loans shall not exceed the Swingline Committed Amount.

(d) Additional Conditions to Revolving Loans. If a Revolving Loan is requested,
all conditions set forth in Section 2.1 shall have been satisfied.

(e) Additional Conditions to Letters of Credit. If the issuance of a Letter of
Credit is requested, (i) all conditions set forth in Section 2.3 shall have been
satisfied and (ii) there shall exist no Lender that is a Defaulting Lender
unless the Issuing Lender has entered into satisfactory arrangements with the
Company or such Defaulting Lender to eliminate the Issuing Lender’s risk with
respect to such Defaulting Lender’s LOC Obligations.

 

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(f) Additional Conditions to Swingline Loans. If a Swingline Loan is requested,
(i) all conditions set forth in Section 2.9 shall have been satisfied and
(ii) there shall exist no Lender that is a Defaulting Lender unless the
Swingline Lender has entered into satisfactory arrangements with the Company or
such Defaulting Lender to eliminate the Swingline Lender’s risk with respect to
such Defaulting Lender’s in respect of its Swingline Commitment.

Each request for an Extension of Credit (other than a conversion or a
continuation under Section 2.8) and each acceptance by the Company of any such
Extension of Credit shall be deemed to constitute representations and warranties
by the Credit Parties as of the date of such Extension of Credit that the
conditions set forth above in paragraphs (a) through (f), as applicable, have
been satisfied.

ARTICLE V

COVENANTS OF THE COMPANY

The Company covenants and agrees that, so long as any portion of any Loan or
Note or Letter of Credit is outstanding or the Lenders have any obligation to
make any Loan or issue any Letter of Credit hereunder, unless the Lenders
otherwise agree, in writing:

Section 5.1 Punctual Payment.

The Company will duly and punctually pay or cause to be paid the principal and
interest on the Loans, the Commitment Fees, the Letter of Credit Fee, the
outstanding LOC Obligations, fees associated with the closing of this Agreement,
any other fees payable in connection herewith and any other amounts payable
hereunder, all in accordance with the terms of this Agreement, the Notes, and
the LOC Documents.

Section 5.2 Legal Existence, Etc.

The Company will maintain its legal existence as a real estate investment trust
and qualify as such under the Code and will maintain its good standing under the
laws of its jurisdiction of organization, maintain its qualification to do
business in each state in which the failure to do so could reasonably be
expected to have a Material Adverse Effect, and maintain all of its rights and
franchises reasonably necessary to the conduct of its business. The Company will
furnish to the Agent and each Lender copies of all amendments to its declaration
of trust, by-laws or other organizational documents promptly upon their adoption
by the Company or its shareholders. The Company and its Subsidiaries taken as a
whole will continue to engage in business of the same general type as now
conducted by it on the Closing Date.

 

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Section 5.3 Financial Statements, Etc.

The Company will deliver to the Agent and each Lender:

(a) Annual Financial Statements. Within 90 days (or, if earlier, within 5 days
after the required date of delivery to the SEC) after the close of each fiscal
year of the Company, a copy of the consolidated and consolidating balance sheet
of the Company and its Consolidated Subsidiaries as of the end of such fiscal
year and the related statements of income and retained earnings and of cash
flows of the Company and its Consolidated Subsidiaries for such year, including
the notes thereto and audited, except with respect to the consolidating
statements, by KPMG, in each case setting forth in comparative form consolidated
and consolidating figures for the preceding fiscal year, reported on without a
“going concern” or like qualification or exception, or qualification indicating
that the scope of the audit was inadequate to permit such independent certified
public accountants to certify such financial statements without qualification
and accompanied by a report and a certificate of KPMG or other firm of
independent certified public accountants selected by the Company and acceptable
to the Agent or other firm of independent certified public accountants selected
by the Company and acceptable to the Agent, reporting on such financial
statements stating that in making the examination necessary therefor no
knowledge was obtained of any Default or Event of Default, except as specified
in such certificate, which report shall be prepared in accordance with generally
accepted auditing standards and applicable Securities Laws;

(b) Quarterly Financial Statements. Within 45 days (or, if earlier, within 5
days after the required date of delivery to the SEC) after the end of each
fiscal quarter of the Company, other than the final quarter in a fiscal year,
(i) unaudited company-prepared consolidated and consolidating balance sheet of
the Company and its Consolidated Subsidiaries, as of the end of such period and
related statements Company prepared consolidated and consolidating statements of
income and retained earnings and of cash flows for the Company and its
Consolidated Subsidiaries for such quarterly period and for the portion of the
fiscal year ending with such period, in each case, setting forth in comparative
form consolidated and consolidating figures for the period or periods in the
preceding fiscal year (subject to normal year-end audit adjustments) and
including management discussion and analysis of operating results in comparative
form;

(c) Annual Budget Plan. As soon as available, but in any event within sixty
(60) days of the end of each fiscal year, a copy of the detailed annual
operating budget and cash flows or plan of the Company for the then fiscal year
on a quarterly basis, in form and detail reasonably acceptable to the Agent and
the Required Lenders, together with a summary of the material assumptions made
in the preparation of such annual budget or plan;

(d) Compliance Certificate. At the delivery of each quarterly and annual
financial statement delivered pursuant to clauses (a) and (b) above, a
compliance certificate, substantially in the form of Exhibit 5.3(d) hereto,
showing compliance by the Company with the covenants set forth in Sections 5.5 -
5.8 hereof;

 

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(e) Officer’s Certificate. At the time of delivery of each quarterly and annual
statement, a certificate, executed by the chief executive officer or Chief
Financial Officer or Treasurer of the Company, stating that such officer has
caused this Agreement to be reviewed and has no knowledge of any Default by the
Company during such quarter or at the end of such year or, if such officer has
such knowledge, specifying each Default and the nature thereof;

(f) Management Letters. Promptly upon receipt thereof, copies of all management
letters and other material reports which are submitted to the Company by its
independent accountants in connection with any annual or interim audit of the
Company made by such accountants;

(g) SEC Reports, Etc. As soon as practicable but, in any event, within ten (10)
Business Days after the issuance thereof, copies of such other financial
statements and reports sent by the Company to its shareholders, copies of all
press releases, and copies of all regular and periodic reports which the Company
may be required to file with the SEC (including any certifications required
under Sarbanes-Oxley) or any similar or corresponding governmental commission,
department or agency substituted therefor;

(h) Prospectus Update. Promptly after the effective date, copies of any new,
revised or updated prospectus used by the Company to effect sales of its shares;
and

(i) Updated Schedules. Concurrently with or prior to the delivery of the
financial statements referred to in Sections 5.3(a) and 5.3(b) above, (i) an
updated copy of Schedule 3.2 and Schedule 3.30 if the Credit Parties or any of
their Subsidiaries has formed or acquired a new Subsidiary since the Closing
Date or since such Schedule was last updated, as applicable, (ii) an updated
copy of Schedule 3.25 if any new Material Contract has been entered into since
the Closing Date or since such Schedule was last updated, as applicable,
together with a copy of each new Material Contract and (iii) an updated copy of
Schedule 3.26 if the Credit Parties or any of their Subsidiaries has altered or
acquired any insurance policies since the Closing Date or since such Schedule
was last updated.

(j) Other Matters. With reasonable promptness, such other information related to
the Company as the Agent or any Lender may reasonably request in writing.

All such financial statements to be complete and correct in all material
respects (subject, in the case of interim statements, to normal recurring
year-end audit adjustments) and to be prepared in reasonable detail and, in the
case of the annual and quarterly financial statements provided in accordance
with subsections (a) and (b) above, in accordance with GAAP applied consistently
throughout the periods reflected therein and further accompanied by a
description of, and an estimation of the effect on the financial statements on
account of, a change, if any, in the application of accounting principles as
provided in Section 1.3.

 

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Documents required to be delivered pursuant to Section 5.3 or Section 5.4 may be
delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Company posts such documents, or provides
a link thereto on the Company’s website on the Internet; or (ii) on which such
documents are posted on the Company’s behalf on an Internet or intranet website,
if any, to which each Lender and the Agent have access (whether a commercial,
third-party website or whether sponsored by the Agent); provided that: (i) the
Company shall deliver paper copies of such documents to the Agent or any Lender
that requests the Company to deliver such paper copies until a written request
to cease delivering paper copies is given by the Agent or such Lender and
(ii) the Company shall notify the Agent and each Lender (by telecopier or
electronic mail) of the posting of any such documents and provide to the Agent
by electronic mail electronic versions of such documents. The Agent shall have
no obligation to request the delivery or to maintain copies of the documents
referred to above, and in any event shall have no responsibility to monitor
compliance by the Company with any such request for delivery, and each Lender
shall be solely responsible for requesting delivery to it or maintaining its
copies of such documents.

Section 5.4 Health Care Facilities - Financial Statements, Etc.

The Company will use commercially reasonable efforts to obtain from each
operator of a Health Care Facility leased by the Company or on which the Company
holds a Mortgage Loan, a consent to deliver to the Agent and each Lender copies
of the financial statements, notices and information described in (a),
(b) and (d) below. The Company will deliver to the Agent and each Lender:

(a) upon the later of receipt by the Company or, in the case of quarterly
information, the date the Company delivers its financial statements pursuant to
Section 5.2(b), or in the case of annual information, the date the Company
delivers its financial statements pursuant to Section 5.2(a), copies of any
quarterly or annual balance sheets and statements of income of any operator of
any Health Care Facility leased by the Company or on which the Company holds a
Mortgage Loan and copies of any quarterly or annual balance sheets and
statements of income of any Person which is a guarantor of any such lease or
loan, including in each case a calculation by the Chief Financial Officer or
Treasurer of the Company of the applicable Facility Coverage Ratio;

(b) promptly upon receipt thereof by the Company, any notice of deficiency with
respect to any of its Health Care Facilities from any Governmental Authority,
licensing board or agency, or any notice of any inquiry, proceeding,
investigation, or other action with respect to any of its Health Care
Facilities, including, without limitation, any notice from any federal, state or
local environmental agency or board of potential liability, that could
materially affect the financial condition, properties or business of the
Company;

(c) upon request, an appraisal, made at the Company’s expense (except as limited
hereby) in form and substance satisfactory to the Agent, of any Health Care
Facility of the Company (other than those leased to UHS or a UHS Subsidiary)
that has a Facility Coverage Ratio of less than 1.6 to 1.0 for the most recent
four fiscal quarters;

 

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provided that the Company shall not be required to pay for more than one
appraisal of any single Health Care Facility during any period of
twenty-four (24) consecutive months; and

(d) with reasonable promptness, such other information related to the operators
of such Health Care Facilities as the Agent or any Lender may reasonably request
in writing.

Section 5.5 Tangible Net Worth.

The Company will maintain at all times (but which shall be calculated only for
the last day of each fiscal quarter) Tangible Net Worth of not less than
$125,000,000.

Section 5.6 Ratio of Debt To Total Capital.

The Company will not permit the ratio of Debt of the Company and its
Subsidiaries on a consolidated basis to Total Capital to exceed .55 to 1.0 as of
the last day of each fiscal quarter of the Company.

Section 5.7 Debt Service Coverage Ratio.

The Company will not permit the Debt Service Coverage Ratio as of the last day
of any fiscal quarter occurring during the fiscal year set forth below to be
less than the ratio corresponding to such fiscal year set forth below:

 

For each fiscal quarter ending in the

fiscal year set forth below

   Minimum Debt Service
Coverage Ratio

2011

   6.0 to 1.0

2012

   5.0 to 1.0

2013

   4.0 to 1.0

2014 and thereafter

   3.0 to 1.0

Section 5.8 Debt To Cash Flow Available For Debt Service.

The Company will not permit the ratio of Debt of the Company and its
Subsidiaries on a consolidated basis as of such date of determination to Cash
Flow Available for Debt Service of the Company and its Subsidiaries on a
consolidated basis (for the four most recently ended fiscal quarters) to be
greater than 3.5 to 1.0 as of the last day of each fiscal quarter of the
Company.

Section 5.9 Indebtedness.

The Company will not, nor will it permit any Subsidiary to, incur or permit to
exist or remain outstanding any Indebtedness to any Person provided, however,
that the Company and its Subsidiaries may incur or permit to exist or remain
outstanding:

 

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(a) Indebtedness of the Company arising under this Agreement or the other Loan
Documents;

(b) Indebtedness in respect of taxes, including withholding and payroll taxes,
assessments, governmental charges or levies, and claims for labor, materials and
supplies to the extent that payment therefor is not at the time required to be
made in accordance with the provisions of Section 5.19;

(c) Indebtedness incurred in connection with the acquisition after the date
hereof of any real or personal property by the Company or any of its
Subsidiaries provided that the aggregate principal amount of all such
Indebtedness shall not exceed the lesser of (i) 100% of the aggregate cost, to
the Company or such Subsidiary of the real or personal property so acquired and
(ii) the fair market value of such acquired property, determined on or about the
time of such acquisition on the basis of an MAI appraisal or such other
valuation method as may from time to time be acceptable to the Required Lenders
(it being understood that an MAI appraisal shall be a valuation method which is
acceptable to the Required Lenders) and further provided that after giving
effect to such Indebtedness the Company would (on a Pro Forma Basis, calculated
as of the last day of the immediately preceding fiscal quarter) be in compliance
with Sections 5.5 – 5.8;

(d) Indebtedness in respect of leases of real and personal property by the
Company and its Subsidiaries provided that the aggregate amount due is not
greater than $2,000,000 in any one fiscal year;

(e) Non-Recourse Debt;

(f) Indebtedness and obligations owing under Hedging Agreements entered into to
manage existing or anticipated interest rate, exchange rate or commodity price
risks and not for speculative purposes;

(g) Indebtedness outstanding on the date of this Agreement and described on
Schedule 5.9 of such Agreement (and renewals, refinancings or extensions thereof
in a principal amount not in excess of that outstanding as of the date of such
renewal, refinancing or extension); and

(h) Indebtedness incurred after the date hereof which is secured by a mortgage,
pledge, security interest or other lien or encumbrance on any of its property,
provided that, after giving effect to such Indebtedness the Company would (on a
Pro Forma Basis, calculated as of the last day of the immediately preceding
fiscal quarter) be in compliance with Sections 5.5 – 5.8, the aggregate amount
of all such secured Indebtedness shall not exceed $30,000,000.

 

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Section 5.10 Security Interests and Liens; Negative Pledge.

The Company will not, nor will it permit any of its Subsidiaries to, create or
permit to exist any mortgage, pledge, security interest or other lien or
encumbrance on any of their respective properties except:

(a) Liens under the Security Documents;

(b) Liens arising from attachments or similar proceedings, pending litigation,
judgments or taxes or assessments in any such event whose validity or amount is
being contested in good faith by appropriate proceedings and for which adequate
reserves have been established and are maintained in accordance with GAAP, or
taxes and assessments which are not due and delinquent;

(c) Liens of carriers, warehousemen, mechanics and materialmen and other like
liens;

(d) pledges or deposits made in connection with workmen’s compensation,
unemployment or other insurance, old age pensions, or other Social Security
benefits, and good faith deposits in connection with tenders, contracts or
leases to which it is a party or deposits to secure, or in lieu of, surety,
penalty or appeal bonds, performance bonds and other similar obligations;

(e) such minor defects, irregularities, encumbrances, easements, rights of way,
and clouds on title as normally exist with respect to similar properties which
do not materially impair the property affected thereby for the purpose for which
it was acquired;

(f) Liens existing on the date of this Agreement and described on
Schedule 5.10(f) of such Agreement and purchase money security interests in or
purchase money mortgages on, or mortgages given in connection with the
contemporaneous refinancing of, real property acquired after the date hereof to
secure purchase money indebtedness of the type incurred in connection with the
acquisition or refinancing of such property, which security interests or
mortgages cover only the real or personal property so acquired or refinanced and
proceeds thereof and reasonable attachments and accessions thereto; and

(g) Liens securing Indebtedness permitted by Section 5.9 (collectively,
“Permitted Liens”).

Section 5.11 No Further Negative Pledge.

The Company will not, nor will it permit any of its Subsidiaries (other than
Excluded Subsidiaries) to, enter into any commitment or agreement with any other
party that limits or impairs the ability of the Company or any such Subsidiaries
to grant security interests, liens or mortgages in favor of the Lenders, except
that this Section 5.11 shall not be deemed to prohibit the granting of any Lien
permitted by Section 5.10.

 

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Section 5.12 Guarantees.

The Company will not, nor will it permit any of its Subsidiaries to, guarantee
or otherwise in any way become or be responsible for indebtedness or obligations
(including working capital maintenance, take-or-pay contracts, etc.) of any
other Person, contingently or otherwise, except:

(a) the endorsement of negotiable instruments of deposit in the normal course of
business;

(b) guarantees by the Company or a Subsidiary issued to secure Indebtedness
permitted by Sections 5.9; and

(c) guarantees (other than those described in (a) and (b) of this Section) made
in the ordinary course of business which shall not at any time exceed $5,000,000
in the aggregate.

For the avoidance of doubt, the Company nor any wholly-owned Subsidiary of the
Company (other than an Excluded Subsidiary) shall be permitted to guarantee any
Non-Recourse Debt.

Section 5.13 Notice of Litigation And Judgments.

The Company will give notice to the Agent and each of the Lenders in writing, in
form and detail satisfactory to the Lenders, within ten (10) Business Days of
becoming aware of any litigation or proceedings threatened in writing or any
pending litigation and proceedings affecting the Company or any of its
Subsidiaries or to which the Company or any of its Subsidiaries is or becomes a
party involving an uninsured or unindemnified claim of more than $5,000,000
against the Company or any of its Subsidiaries and stating the nature and status
of such litigation or proceedings. The Company will give notice, in writing, in
form and detail satisfactory to the Lenders, within ten (10) Business Days of
any judgment, final or otherwise, against the Company or any of its Subsidiaries
in an amount in excess of $5,000,000.

Section 5.14 Notice of Defaults; Material Adverse Effect.

(a) The Company will give notice to the Agent and each of the Lenders
immediately upon becoming aware of the occurrence of any Default or Event of
Default under this Agreement. If any Person shall give any notice or take any
other action in respect of a claimed default (whether or not constituting an
Event of Default) under this Agreement or any other note, evidence of
Indebtedness, indenture or other obligation to which or with respect to which
the Company or any of its Subsidiaries is a party or obligor, whether as
principal or surety, and such claimed default has potential total liability in
excess of $5,000,000 the Company shall forthwith give written notice thereof to
each of the Lenders, describing the notice or action and the nature of the
claimed default; and

 

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(b) The Company will give notice to the Agent and each of the Lenders
immediately upon becoming aware, but in any event within five (5) Business Days,
of the occurrence of any event that has resulted or could reasonably be expected
to result in a Material Adverse Effect.

Section 5.15 Notices With Regard to Health Care Operators.

The Company will give notice to the Agent and each of the Lenders, and will
provide information to the Agent and each of the Lenders, of the types set forth
in Sections 5.13 and 5.14 hereof as to each operator of Health Care Facilities
owned by the Company or on which the Company holds a mortgage, provided, that
such operator consents in writing to the release of such information. The
Company will use commercially reasonable efforts to acquire the written consent
of each operator for the release of such information.

Section 5.16 Books and Records.

The books and records relating to the financial affairs of the Company and its
Subsidiaries shall at all times be maintained in accordance with GAAP
consistently applied.

Section 5.17 Maintenance of Properties.

The Company shall maintain (or cause to be maintained) and shall cause each of
its Subsidiaries to maintain (or cause to be maintained) each of its properties
in good physical condition and shall make (or cause to be made) all necessary
repairs, replacements and renewals thereon except where the failure to so
maintain could not reasonably be expected to result in a Material Adverse
Effect.

Section 5.18 Insurance.

The Company will require that the lessees of its properties maintain at all
times with financially sound and reputable insurers insurance with respect to
their properties and business and against such casualties and contingencies and
in such types and such amounts as shall be in accordance with sound business
practices and reasonably satisfactory to the Agent. Without limiting the
foregoing, the Company will use commercially reasonable efforts cause such
lessees to (i) keep all of its physical property insured against fire and
extended coverage risks in amounts and with deductibles equal to those generally
maintained by businesses of similar size engaged in similar activities in
similar geographic areas, (ii) maintain all such workers’ compensation or
similar insurance as may be required by law, and (iii) maintain, in amounts and
with deductibles equal to those generally maintained by businesses of similar
size engaged in similar activities in similar geographic areas, general public
liability insurance against claims for bodily injury, death or property damage
occurring on, in or about the properties of the Company and business
interruption insurance. In the event that any lessee shall fail to maintain such
insurance, the Company will maintain such insurance. The Company will notify the
Agent and each Lender of any cancellation of any such insurance. Evidence of all
renewals or replacements of such insurance from time to time in force,
satisfactory to the Agent shall be delivered to the Agent before the expiration
date of the then current insurance.

 

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Section 5.19 Taxes.

The Company will pay all taxes or other assessments or governmental charges or
levies imposed upon it or upon its income or profits or upon its property prior
to the time when any penalties or interest (except interest during extensions of
time for filing of federal income tax returns not in excess of six months)
accrue with respect thereto, as well as all claims for labor, materials or
supplies that if unpaid might by law become a lien or charge upon any of its
property unless, in any such case, the amount, applicability or validity of such
amounts is contested in good faith by appropriate proceedings and other
appropriate action and an adequate reserve therefor has been established and is
maintained in accordance with GAAP. The Company will, and will cause each of its
Subsidiaries to, also pay all such taxes, assessments, charges, levies or claims
forthwith upon the commencement of proceedings to foreclose any lien that may
have attached as security therefor, except where the failure to do so could not
reasonably be expected to have an Material Adverse Effect.

Section 5.20 Compliance With Laws, Contracts, and Licenses.

The Company will, and will cause each of its Subsidiaries to (i) comply with all
laws, including the Patriot Act, CERCLA and Environmental Laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject, the Company’s or Subsidiary’s noncompliance with which could
reasonably be expected to have a Material Adverse Effect, including, without
limitation, the provisions of the Code and related regulations governing real
estate investment trusts, as the same may be as amended and in effect from time
to time and (ii) promptly obtain, maintain, apply for renewal, and not allow to
lapse, any authorization, consent, approval, license or order, and accomplish
any filing or registration with, any court or judicial, administrative or
Governmental Authority which may be or may become necessary in order that it
perform in all material respects all of its obligations under this Agreement or
the other Loan Documents and in order that the same may be valid and binding and
effective in accordance with their terms and in order that the Lenders may be
able freely to exercise and enforce any and all of their rights under this
Agreement or the other Loan Documents, (iii) comply with the provisions of its
charter documents and by-laws and (iv) comply with all agreements and
instruments by which it or any of its properties may be bound.

Section 5.21 Access.

The Company will, and will cause each of its Subsidiaries to, permit any Lender,
by its representatives and agents, to inspect any of the properties, including,
without limitation, corporate books, computer files and tapes and financial
records of the Company and its Subsidiaries to examine and make copies of the
books of accounts and other financial records of the Company and its
Subsidiaries, and to discuss the affairs, finances and accounts of the Company
and its Subsidiaries with, and to be advised as to the same by, its officers at
such reasonable times and intervals as such Lender may designate.

 

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Section 5.22 ERISA Compliance.

Neither the Company nor any of its Subsidiaries will permit any employee pension
benefit plan (as that term is defined in Section 3 of ERISA) maintained by the
Company to (x) engage in any “prohibited transaction” as such term is defined in
Section 4975 of the Code that is likely to result in a material liability for
the Company; or (y) incur any “accumulated funding deficiency”, as such term is
defined in Section 302 of ERISA, whether or not waived; or (z) terminate any
such benefit plan in a manner which could result in the imposition of a lien or
encumbrance on the assets of the Company pursuant to Section 4068 of ERISA.

Section 5.23 Reserves.

The Company will, and will cause each of its Subsidiaries to, maintain reserves,
appropriate for the Company and its Subsidiaries, for depreciation, taxes and
other expenses or liabilities in accordance with GAAP.

Section 5.24 Distributions.

Neither the Company nor any of its Subsidiaries will make any Distributions
other than (a) Distributions required by the Code and related regulations
governing real estate investment trusts, (b) Distributions by a Subsidiary to
the Company and (c) Distributions to shareholders in excess of the amounts
permitted by clause (a) above provided that no Default or Event of Default then
exists or would result from such payment; provided, however, in no event may the
Company make any Distributions with respect to any fiscal year that exceed
ninety-five percent (95%) of the Company’s Cash Available for Distributions for
such fiscal year unless and to the extent that such Distributions are required
to be made by the Code and related regulations governing real estate investment
trusts.

Section 5.25 Investments.

Neither the Company nor any of its Subsidiaries will make or maintain any
Investment, except for Investments which consist of:

(a) obligations having an original maturity of not greater than three years
issued or guaranteed as to principal and interest by the United States of
America;

(b) certificates of deposit issued by any of the Lenders or any other bank
organized under the laws of the United States of America or any state thereof
and having capital and unimpaired surplus of at least $50,000,000 or of foreign
subsidiaries of such banks;

(c) commercial paper or finance company paper which is rated not less than BBB
or its equivalent by S&P or Moody’s;

(d) repurchase agreements secured by any one or more of the Investments
permitted by paragraphs (a), (b) or (c) above;

 

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(e) direct or indirect Investments in domestic (United States) Health Care
Facilities which Investments either (i) existed on the Closing Date and set
forth on Schedule 5.25(e), or (ii) were or are made after such date, provided
that no Investment in any one Health Care Facility made after such date shall be
made with respect to any Health Care Facility the acquisition cost of which
exceeds the lesser of $40,000,000 or the fair market value of the acquired
property, determined on the basis of an MAI appraisal or such other valuation
method as may from time to time be acceptable to the Required Lenders, provided
that after giving effect to such Investment the Company would (on a Pro Forma
Basis, calculated as of the last day of the immediately preceding fiscal
quarter) be in compliance with Sections 5.5 – 5.8. Any indirect Investment shall
be restricted to an Investment made by the Company in a Person engaged
exclusively in the business of owning or operating domestic Health Care
Facilities and in which the Company has an Equity Interest of at least 25%;

(f) Mortgage Loans permitted by Section 5.26;

(g) Construction Loans permitted by Section 5.27; and

(h) Investments made in connection with the 2011 Portfolio Transaction.

Section 5.26 Mortgage Loans.

The Company will not permit at any time the aggregate outstanding principal
amount of the Mortgage Loans held by the Company and its Subsidiaries to exceed
$30,000,000 and will not make any Mortgage Loan in an original principal amount
in excess of $20,000,000. In no event may the Company or any of its Subsidiaries
provide any Mortgage Loan to any Person except on a full recourse basis to an
owner or operator of a domestic (United States) Health Care Facility and except
upon using the Company’s commercially reasonable efforts to obtain the agreement
and consent of such Person to provide its quarterly and annual balance sheets
and income statements to the Company or to the its Subsidiary for delivery to
the Agent and each Lender.

Section 5.27 Construction Loans.

(a) In the event that any portion of the Loans is to be used by the Company to
finance the construction of Health Care Facilities, the Company will monitor
such construction to insure that all approvals, consents, waivers, orders,
agreements, acknowledgments, authorizations, permits and licenses required under
any law, ordinance, code, order, rule or regulation of any Governmental
Authority, or under the terms of any restriction, covenant or easement affecting
the construction project, or otherwise necessary, for the ownership and
acquisition of the subject properties and the improvements thereon, the
construction and equipping of the improvements being constructed on the subject
properties, and the use, occupancy and operation of the construction project as
a Health Care Facility following completion of construction of the

 

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improvements on the subject property, have been obtained, whether from a
Governmental Authority or other Person. Further, the Company will give notice to
the Agent and each of the Lenders immediately after becoming aware that any
construction project will likely not be completed in a timely manner or on
budget. The Company shall from time to time deliver such further information and
take such further action as may be reasonably requested by the Agent or any
Lender to effect the purposes of this Section 5.27.

(b) The Company will not permit at any time the aggregate outstanding principal
amount of Construction Loans to exceed $25,000,000. In no event may the Company
provide any Construction Loans to any Person except on a full recourse basis to
an owner or operator of a domestic (United States) Health Care Facility and
except upon using the Company’s commercially reasonable efforts to obtain the
agreement and consent of such Person to provide its quarterly and annual balance
sheets and income statements to the Company for delivery to the Agent and each
Lender.

Section 5.28 Environmental Audits.

The Company will not make any Investment, Mortgage Loan or Construction Loan
otherwise permitted by Section 5.25(e), 5.26 or 5.27, respectively, unless the
Company shall have first received a Phase I environmental audit report with
respect to the property involved, which audit shall have been conducted not
earlier than twenty-four (24) months prior to the date of the transaction, a
copy of such audit shall have been furnished to the Lenders, and such audit
shall not have reported or uncovered any environmental matters which could have
a material adverse effect on such property or on the financial condition,
properties or business of the Company.

Section 5.29 Merger, Consolidation and Disposition of Assets.

(a) Neither the Company, nor any of its Subsidiaries, will at any time merge or
consolidate with or into any Person or sell or otherwise dispose of any Health
Care Facility of the Company leased to UHS or to a UHS Subsidiary, except
(i) that the Company may sell, if after giving effect to such sale no Default or
Event of Default exists or would result as a consequence thereof, any Health
Care Facility of the Company leased to UHS or to a UHS Subsidiary so long as
such Health Care Facilities so sold do not in the aggregate account for more
than 5% of the total assets of the Company and its Subsidiaries as determined in
accordance with GAAP over the term of this Agreement, (ii) a Subsidiary of the
Company may merge with and into any wholly-owned Subsidiary of the Company and
(iii) any Subsidiary of the Company may merge with and into the Company so long
as the Company is the surviving corporation.

(b) No Subsidiary that is not an Excluded Subsidiary will at any time (x) merge
or consolidate with an Excluded Subsidiary or (y) sell or otherwise transfer of
any assets to an Excluded Subsidiary. Notwithstanding the foregoing, the Company
or any Subsidiary may sell or otherwise transfer assets to an Excluded
Subsidiary so long as the aggregate amount of the fair market value of all such
assets does not exceed $17,000,000.

 

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Section 5.30 Sale and Leaseback.

Neither the Company, nor any of its Subsidiaries, will enter into any
arrangement, directly or indirectly, whereby the Company or a Subsidiary shall
sell or transfer any property owned by it and then or thereafter lease such
property or lease other property that the Company or such Subsidiary intends to
use for substantially the same purpose as the property being sold or
transferred.

Section 5.31 Use of Proceeds.

After the date of this Agreement the Company will use the proceeds of the Loans
(a) to refinance certain existing indebtedness of the Company, (b) to pay any
fees and expenses, (c) to provide for the working capital and general corporate
requirements of the Company and its Subsidiaries (including to make Investments
permitted by Section 5.25(e) and for acquisitions permitted under this
Agreement), (d) to provide mortgage and construction financing permitted by
Sections 5.26 and 5.27, (e) to make Distributions permitted by Section 5.24, and
(f) for other general corporate purposes. The Company will not use the proceeds
of any Loan, either directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of buying or carrying margin stock within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System, as amended
from time to time.

Section 5.32 Fiscal Year; Organizational Documents; Material Contracts.

Neither the Company, nor any of its Subsidiaries, will, upon less than thirty
(30) days prior written notice, change its fiscal year or accounting policies
except to comply with changes in GAAP. Neither the Company, nor any of its
Subsidiaries, will amend, modify or change its declaration of trust (or
corporate charter or other similar document) in any matter materially adverse to
the Lenders, without the prior written consent of the Required Lenders. Neither
the Company, nor any of its Subsidiaries, will, without the prior written
consent of the Agent, amend, modify, cancel or terminate or fail to renew or
extend any of the Material Contracts, except in the event that such amendments,
modifications, cancellations, terminations or failure to renew could not
reasonably be expected to have a Material Adverse Effect.

Section 5.33 Subsidiary Guarantors.

The Company shall promptly upon the formation or acquisition of any additional
wholly-owned Significant Subsidiary or upon any wholly-owned Subsidiary (other
than an Excluded Subsidiary) becoming a Significant Subsidiary, and in any event
within 30 days of such formation, acquisition or change to status of a
Significant Subsidiary, (i) cause such Significant Subsidiary to (i) execute
joinder to the Subsidiary Guaranty substantially in the form of the Guarantor
Accession (as defined in the Subsidiary Guaranty) and (ii) deliver such
organizational documents, secretary’s certificates and legal opinions in
connection therewith as the Agent may reasonably request.

 

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Section 5.34 Pledged Assets.

The Company will cause 100% of the Equity Interests in each of its direct
Domestic Subsidiaries and 65% (to the extent the pledge of a greater percentage
would be unlawful or may cause any adverse tax consequences to the Company) of
the voting Equity Interests and 100% of the non-voting Equity Interests of its
first-tier Foreign Subsidiaries, to be subject at all times to a first priority,
perfected Lien in favor of the Agent pursuant to the terms and conditions of the
Security Documents or such other security documents as the Agent shall
reasonably request.

Section 5.35 Further Assurances.

The Company shall at any time or from time to time execute and deliver such
further instruments and take such further action as may reasonably be requested
by the Agent or any Lender, in each case further and more perfectly to effect
the purposes of this Agreement and the other Loan Documents.

Section 5.36 Transactions with Affiliates.

Enter into any transaction of any kind with any Affiliate of the Company,
whether or not in the ordinary course of business, other than on fair and
reasonable terms substantially as favorable to the Company or such Subsidiary as
would be obtainable by the Company or such Subsidiary at the time in a
comparable arm’s length transaction with a Person other than an Affiliate;
provided that the foregoing restriction shall not apply to the 2011 Portfolio
Transaction or any other transaction between or among the Company and any of its
wholly-owned Subsidiaries (other than Excluded Subsidiaries) or between and
among any wholly-owned Subsidiaries (other than Excluded Subsidiaries).

ARTICLE VI

[RESERVED]

ARTICLE VII

EVENTS OF DEFAULT; ACCELERATION

Section 7.1 Events of Default.

If any of the following events (an “Event of Default”) has occurred and is
continuing:

(a) if the Company shall fail to (i) pay any principal on the Loans or any Note
owing hereunder or fail to reimburse the Issuing Lender for any LOC Obligations
in each case when the same shall become due and payable, whether at the stated
date of maturity or any accelerated date of maturity or at any other date fixed
for payment in accordance with the terms hereof or thereof or (ii) the Company
shall fail to pay any interest on the

 

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Loans or any other amount payable hereunder or under the LOC Documents when the
same shall become due and payable and such failure shall continue for three
(3) Business Days(or any Guarantor shall fail to pay on the Guaranty in respect
of any of the foregoing within the applicable period of time);

(b) if the Company shall fail to comply with any of its covenants contained in
Sections 5.1, 5.2, 5.5-5.12, or 5.24-5.32;

(c) if the Company or any Subsidiary shall fail to perform any term, covenant or
agreement contained herein or in any other Loan Document (other than those
specified in subsections (a) and (b) above) and the continuance of such failure
shall exist for 30 days after written notice of such failure has been given to
the Company by the Agent;

(d) if any representation or warranty of the Company in this Agreement or of the
Company or any Guarantor in any other Loan Document shall prove to have been
false in any material respect upon the date when made or deemed to have been
made or repeated;

(e) if the Company or any of its Significant Subsidiaries shall (i) fail to make
any payment due on any Indebtedness (having a total amount outstanding in excess
of $5,000,000), or (ii) fail to observe or perform any material term, covenant
or agreement contained in any agreement by which it is bound, evidencing or
securing any Indebtedness (having a total amount outstanding in excess of
$5,000,000) and the effect of such failure could or would have permitted
(assuming the giving of appropriate notice if required) the holder or holders
thereof or a trustee for such holder or holders or of any obligations issued
thereunder to accelerate the maturity thereof;

(f) if the Company or any of its Significant Subsidiaries shall be involved in
financial difficulties as evidenced (i) by its admission in writing of its
inability to pay its debts generally as they become due; (ii) by its
commencement of a voluntary case under Title 11 of the United States Code as
from time to time in effect, or by its authorizing, by appropriate proceedings
of its board of directors or other governing body, the commencement of such a
voluntary case; (iii) by its filing an answer or other pleading admitting or
failing to deny the material allegations of a petition filed against it
commencing an involuntary case under Title 11, or seeking, consenting to or
acquiescing in the relief therein provided, or by its failing to controvert or
challenge in a timely manner the material allegation of any such petition;
(iv) by the entry of an order for relief against it in any involuntary case
commenced under Title 11 which remains undischarged or unstayed for more than
sixty (60) days; (v) by its seeking relief as a debtor under any applicable law,
other than Title 11, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the rights of
creditors, or by its consenting to or acquiescing in such relief; (vi) by entry
of an order by a court of competent jurisdiction (A) finding it to be bankrupt
or insolvent or (B) ordering or approving its liquidation, reorganization or any
modification or alteration of the rights of its creditors which remains
undischarged or unstayed for more than sixty (60) days; (vii) by the entry of an
order by a court of competent jurisdiction assuming custody of, or

 

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appointing a receiver or other custodian for, all or a substantial part of its
property which remains undischarged or unstayed for more than sixty (60) days;
or (viii) by its making an assignment for the benefit of, or entering into a
composition with, its creditors, or appointing or consenting to the appointment
of a receiver or other custodian for all or a substantial part of its property
(the occurrence of any of the foregoing shall constitute a “Bankruptcy Event”);

(g) if there shall remain in force, undischarged, unsatisfied and unstayed, for
more than sixty days, whether or not consecutive, any final judgment against the
Company or any of its Significant Subsidiaries which, with other outstanding
final judgments which are also undischarged, unsatisfied and unstayed for more
than sixty days, against such Person(s) exceeds $5,000,000 in aggregate amount
with respect to the Company or any of its Significant Subsidiaries;

(h) if UHS of Delaware, Inc., a subsidiary of UHS, shall cease to be the real
estate investment trust advisor to the Company and a new advisor satisfactory to
each of the Lenders has not been appointed, or a group of managers satisfactory
to each of the Lenders has not been hired, within ninety (90) days of such
cessation;

(i) (i) if any Person or group of Persons (within the meaning of Section 13
or 14 of the Exchange Act) shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission
under said Act) of thirty percent (30%) or more of the outstanding shares of
common stock of the Company; or, (ii) during any period of twelve consecutive
calendar months, individuals who were directors of the Company on the first day
of such period shall cease to constitute a majority of the board of directors of
the Company;

(j) if any guarantee by UHS of any lease by the Company to a UHS Subsidiary is
disavowed, terminated, or ceases to be in full force and effect, or is waived or
amended without the prior written consent of the Required Lenders (other than
the termination of a guarantee of such a lease in connection with the sale of a
Health Care Facility permitted by Section 5.29) or if UHS shall fail to pay when
due (after giving effect to any applicable grace period) amounts owing under any
guarantee of obligations of a UHS Subsidiary owed to the Company under any
lease;

(k) any lease by the Company to a UHS Subsidiary is terminated (other than as
scheduled by its terms) prior to its stated term, or is amended or compliance by
the lessee is waived, without the prior written consent of the Required Lenders
(other than the termination of a lease of a Health Care Facility in connection
with a sale of such Health Care Facility permitted by Section 5.29);

(l) if the Company or any of its Significant Subsidiaries shall fail to make any
payment due under any Hedging Agreement or if the Company or any of its
Significant Subsidiaries shall fail to observe or perform any material term,
covenant or agreement contained in any Hedging Agreement and the effect of such
failure could or would have permitted (assuming the giving of appropriate notice
if required) the counterparty thereof

 

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to terminate such Hedging Agreement and demand payment from the Company or such
Significant Subsidiary in excess of $5,000,000; or

(m) if the Subsidiary Guaranty or any material provision thereof shall cease to
be in full force and effect or any Guarantor or any Person acting by or on
behalf of any Guarantor shall deny or disaffirm any Guarantor’s obligations
under the Subsidiary Guaranty;

(n) if any material provision of any Loan Document shall fail to be in full
force and effect or to give the Agent and/or the Lenders the security interests,
liens, rights, powers, priority and privileges purported to be created thereby
(except as such documents may be terminated or no longer in force and effect in
accordance with the terms thereof, other than those indemnities and provisions
which by their terms shall survive) or any Lien shall fail to be a first
priority, perfected Lien on a material portion of the Collateral; or

(o) if the Company or any of its Subsidiaries maintains or contributes to any
Pension Plan.

Section 7.2 Acceleration; Remedies.

Upon the occurrence and during the continuance of an Event of Default, then, and
in any such event, (a) if such event is a Bankruptcy Event, automatically the
Commitments shall immediately terminate and the Loans (with accrued interest
thereon), and all other amounts under the Loan Documents (including, without
limitation, the maximum amount of all contingent liabilities under Letters of
Credit) shall immediately become due and payable, and (b) if such event is any
other Event of Default, any or all of the following actions may be taken:
(i) with the written consent of the Required Lenders, the Agent may, or upon the
written request of the Required Lenders, the Agent shall, declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; (ii) the Agent may, or upon the written request of the
Required Lenders, the Agent shall, declare the Loans (with accrued interest
thereon) and all other amounts owing under this Agreement and the Notes to be
due and payable forthwith and direct the Company to pay to the Agent cash
collateral as security for the LOC Obligations for subsequent drawings under
then outstanding Letters of Credit an amount equal to the maximum amount of
which may be drawn under Letters of Credit then outstanding, whereupon the same
shall immediately become due and payable; and/or (iii) with the written consent
of the Required Lenders, the Agent may, or upon the written request of the
Required Lenders, the Agent shall, exercise such other rights and remedies as
provided under the Loan Documents and under applicable law.

ARTICLE VIII

THE ADMINISTRATIVE AGENT

 

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Section 8.1 Appointment and Authority.

Each of the Lenders and the Issuing Lender hereby irrevocably appoints Wells
Fargo to act on its behalf as the Agent hereunder and under the other Loan
Documents and authorizes the Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto. The provisions of this Article are solely for the benefit of the Agent,
the Lenders and the Issuing Lender, and neither the Company nor any other Credit
Party shall have rights as a third party beneficiary of any of such provisions.

Section 8.2 Nature of Duties.

Anything herein to the contrary notwithstanding, none of the bookrunners,
arrangers or other agents listed on the cover page hereof shall have any powers,
duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as the Agent, a Lender, the
Swingline Lender or the Issuing Lender hereunder. Without limiting the
foregoing, none of the Lenders or other Persons so identified shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders or
other Persons so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.

The Agent may perform any and all of its duties and exercise its rights and
powers hereunder or under any other Loan Document by or through any one or more
sub-agents appointed by the Agent. The Agent and any such sub-agent may perform
any and all of its duties and exercise its rights and powers by or through their
respective Related Parties. The exculpatory provisions of this Article shall
apply to any such sub-agent and to the Related Parties of the Agent and any such
sub-agent, and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as Agent.

Section 8.3 Exculpatory Provisions.

The Agent shall not have any duties or obligations except those expressly set
forth herein and in the other Loan Documents. Without limiting the generality of
the foregoing, the Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Agent is required to
exercise as directed in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be expressly provided for herein or in the
other Loan Documents), provided that the Agent shall not be required to take any
action that, in its opinion or the opinion of its counsel, may expose the Agent
to liability or that is contrary to any Loan Document or applicable law; and

 

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(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to any Credit Party or any of its Affiliates
that is communicated to or obtained by the Person serving as the Agent or any of
its Affiliates in any capacity.

The Agent shall not be liable for any action taken or not taken by it (i) with
the consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as the Agent shall believe
in good faith shall be necessary, under the circumstances as provided in
Sections 9.1 and 7.2) or (ii) in the absence of its own gross negligence or
willful misconduct.

The Agent shall not be responsible for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection with
this Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein
or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Loan Document or any
other agreement, instrument or document or (v) the satisfaction of any condition
set forth in Article IV or elsewhere herein, other than to confirm receipt of
items expressly required to be delivered to the Agent.

Section 8.4 Reliance by Agent.

The Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument,
document or other writing (including any electronic message, Internet or
intranet website posting or other distribution) believed by it to be genuine and
to have been signed, sent or otherwise authenticated by the proper Person. The
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to have been made by the proper Person, and shall not incur any
liability for relying thereon. In determining compliance with any condition
hereunder to the making of a Loan, or the issuance of a Letter of Credit, that
by its terms must be fulfilled to the satisfaction of a Lender or the Issuing
Lender, the Agent may presume that such condition is satisfactory to such Lender
or the Issuing Lender unless the Agent shall have received notice to the
contrary from such Lender or the Issuing Lender prior to the making of such Loan
or the issuance of such Letter of Credit. The Agent may consult with legal
counsel (who may be counsel for the Company), independent accountants and other
experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or
experts.

Section 8.5 Notice of Default.

The Agent shall not be deemed to have knowledge or notice of the occurrence of
any Default or Event of Default hereunder unless the Agent has received written
notice from a Lender or the Company referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a “notice of
default”. In the event that the Agent receives such a notice, the Agent shall
give prompt notice thereof to the Lenders. The Agent shall take such

 

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action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders; provided, however, that unless and until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders except to the extent that this Agreement expressly
requires that such action be taken, or not taken, only with the consent or upon
the authorization of the Required Lenders, or all of the Lenders, as the case
may be.

Section 8.6 Non-Reliance on Agent and Other Lenders.

Each Lender and the Issuing Lender expressly acknowledges that neither the Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representation or warranty to it and that no act by the
Agent hereinafter taken, including any review of the affairs of any Credit
Party, shall be deemed to constitute any representation or warranty by the Agent
to any Lender. Each Lender and the Issuing Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender or any of
their Related Parties and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender and the Issuing Lender also acknowledges that it will,
independently and without reliance upon the Agent or any other Lender or any of
their Related Parties and based on such documents and information as it shall
from time to time deem appropriate, continue to make its own decisions in taking
or not taking action under or based upon this Agreement, any other Loan Document
or any related agreement or any document furnished hereunder or thereunder.

Section 8.7 Indemnification.

The Lenders agree to indemnify the Agent, the Issuing Lender and the Swingline
Lender in its capacity hereunder and their Affiliates and their respective
officers, directors, agents and employees (to the extent not reimbursed by the
Credit Parties and without limiting the obligation of the Credit Parties to do
so), ratably according to their respective Revolving Commitment Percentages in
effect on the date on which indemnification is sought under this Section, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Credit Party Obligations) be imposed on, incurred
by or asserted against any such indemnitee in any way relating to or arising out
of any Loan Document or any documents contemplated by or referred to herein or
therein or the Transactions or any action taken or omitted by any such
indemnitee under or in connection with any of the foregoing; provided, however,
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent resulting from such indemnitee’s
gross negligence or willful misconduct, as determined by a court of competent
jurisdiction. The agreements in this Section shall survive the termination of
this Agreement and payment of the Notes, any Reimbursement Obligation and all
other amounts payable hereunder.

 

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Section 8.8 Agent in Its Individual Capacity.

The Person serving as the Agent hereunder shall have the same rights and powers
in its capacity as a Lender as any other Lender and may exercise the same as
though it were not the Agent and the term “Lender” or “Lenders” shall, unless
otherwise expressly indicated or unless the context otherwise requires, include
the Person serving as the Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Credit Parties or any Subsidiary or other
Affiliate thereof as if such Person were not the Agent hereunder and without any
duty to account therefor to the Lenders.

Section 8.9 Successor Agent.

The Agent may at any time give notice of its resignation to the Lenders, the
Issuing Lender and the Company. Upon receipt of any such notice of resignation,
the Required Lenders shall have the right, with the approval of the Company, to
appoint a successor, or an Affiliate of any such bank. If no such successor
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within thirty (30) days after the retiring Agent gives notice
of its resignation, then the retiring Agent may on behalf of the Lenders and the
Issuing Lender, appoint a successor Agent meeting the qualifications set forth
above provided that if the Agent shall notify the Company and the Lenders that
no qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (a) the retiring
Agent shall be discharged from its duties and obligations hereunder and under
the other Loan Documents and (b) all payments, communications and determinations
provided to be made by, to or through the Agent shall instead be made by or to
each Lender and the Issuing Lender directly, until such time as the Required
Lenders appoint a successor Agent as provided for above in this paragraph. Upon
the acceptance of a successor’s appointment as Agent hereunder, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or retired) Agent, and the retiring Agent shall be
discharged from all of its duties and obligations hereunder or under the other
Loan Documents (if not already discharged therefrom as provided above in this
paragraph). The fees payable by the Company to a successor Agent shall be the
same as those payable to its predecessor unless otherwise agreed between the
Company and such successor. After the retiring Agent’s resignation hereunder and
under the other Loan Documents, the provisions of this Article and Section 9.5
shall continue in effect for the benefit of such retiring Agent, its sub-agents
and their respective Related Parties in respect of any actions taken or omitted
to be taken by any of them while the retiring Agent was acting as Agent.

Any resignation by Wells Fargo, as Agent pursuant to this Section shall also
constitute its resignation as Issuing Lender and Swingline Lender. Upon the
acceptance of a successor’s appointment as Agent hereunder, (a) such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring Issuing Lender and Swingline Lender, (b) the retiring
Issuing Lender and Swingline Lender shall be discharged from all of their
respective duties and obligations hereunder or under the other Loan Documents,
and (c) the successor Issuing Lender shall issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
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retiring Issuing Lender to effectively assume the obligations of the retiring
Issuing Lender with respect to such Letters of Credit.

Section 8.10 Collateral and Guaranty Matters.

(a) The Lenders and the Bank Product Provider irrevocably authorize and direct
the Agent:

(i) to release any Lien on any Collateral granted to or held by the Agent under
any Loan Document (A) upon termination of the Commitments and payment in full of
all Credit Party Obligations (other than contingent indemnification obligations
for which no claim has been made or cannot be reasonably identified by an
Indemnitee based on the then-known facts and circumstances) and the expiration
or termination of all Letters of Credit, (B) that is transferred or to be
transferred as part of or in connection with any sale or other disposition
permitted under Section 6.29, or (C) subject to Section 9.1, if approved,
authorized or ratified in writing by the Required Lenders;

(ii) to release any Guarantor from its obligations under the applicable Guaranty
if such Person ceases to be a Guarantor as a result of a transaction permitted
hereunder.

(b) In connection with a termination or release pursuant to this Section, the
Agent shall promptly execute and deliver to the Company, at the Company’s
expense, all documents that the Company shall reasonably request to evidence
such termination or release. Upon request by the Agent at any time, the Required
Lenders will confirm in writing the Agent’s authority to release or subordinate
its interest in particular types or items of Collateral, or to release any
Guarantor from its obligations under the Subsidiary Guaranty pursuant to this
Section.

Section 8.11 Bank Products.

No Bank Product Provider that obtains the benefits of Sections 2.11 and 7.2, any
guaranty by virtue of the provisions hereof or of any guaranty shall have any
right to notice of any action or to consent to, direct or object to any action
hereunder or under any other Loan Document other than in its capacity as a
Lender and, in such case, only to the extent expressly provided in the Loan
Documents. The Agent shall not be required to verify the payment of, or that
other satisfactory arrangements have been made with respect to, Obligations
arising under Bank Products unless the Agent has received written notice
(including, without limitation, a Bank Product Provider Notice) of such
Obligations, together with such supporting documentation as the Agent may
request, from the applicable Bank Product Provider.

 

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ARTICLE IX

MISCELLANEOUS

Section 9.1 Amendments, Waivers and Consents.

Neither this Agreement nor any of the other Loan Documents, nor any terms hereof
or thereof may be amended, modified, extended, restated, replaced, or
supplemented (by amendment, waiver, consent or otherwise) nor may Collateral be
released except as specifically provided herein or in the Security Documents or
in accordance with the provisions of this Section. The Required Lenders may or,
with the written consent of the Required Lenders, the Agent may, from time to
time, (a) enter into with the Company written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Company hereunder or thereunder or
(b) waive or consent to the departure from, on such terms and conditions as the
Required Lenders may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such amendment, supplement,
modification, release, waiver or consent shall:

(i) reduce the amount or extend the scheduled date of maturity of any Loan or
Note or any installment thereon, or reduce the stated rate of any interest or
fee payable hereunder (except in connection with a waiver of interest at the
Default Rate which shall be determined by a vote of the Required Lenders) or
extend the scheduled date of any payment thereof or increase the amount or
extend the expiration date of any Lender’s Commitment, in each case without the
written consent of each Lender directly affected thereby; or

(ii) amend, modify or waive any provision of this Section or reduce the
percentage specified in the definition of Required Lenders, without the written
consent of all the Lenders; or

(iii) release the Company or all or substantially all of the value of the
Guaranty, without the written consent of all of the Lenders; provided that the
Agent may release any Guarantor permitted to be released pursuant to the terms
of this Agreement; or

(iv) release all or substantially all of the value of the Collateral without the
written consent of all of the Lenders; provided that the Agent may release any
Collateral permitted to be released pursuant to the terms of this Agreement or
the Security Documents; or

(v) subordinate the Loans to any other Indebtedness without the written consent
of all of the Lenders; or

 

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(vi) permit the Company to assign or transfer any of its rights or obligations
under this Agreement or other Loan Documents without the written consent of all
of the Lenders; or

(vii) amend, modify or waive any provision of the Loan Documents requiring
consent, approval or request of the Required Lenders or all Lenders without the
written consent of the Required Lenders or all the Lenders as appropriate; or

(viii) amend, modify or waive the pro rata sharing of payments by and among the
Lenders without the written consent of each Lender directly affected thereby; or

(ix) amend, modify or waive any provision of Article VIII without the written
consent of the then Agent.

provided, further, that no amendment, waiver or consent affecting the rights or
duties of the Agent, the Issuing Lender or the Swingline Lender under any Loan
Document shall in any event be effective, unless in writing and signed by the
Agent, the Issuing Lender and/or the Swingline Lender, as applicable, in
addition to the Lenders required hereinabove to take such action.

Any such waiver, any such amendment, supplement or modification and any such
release shall apply equally to each of the Lenders and shall be binding upon the
Company, the Lenders, the Agent and all future holders of the Notes. In the case
of any waiver, the Company, the Lenders and the Agent shall be restored to their
former position and rights hereunder and under the outstanding Loans and Notes
and other Loan Documents, and any Default or Event of Default permanently waived
shall be deemed to be cured and not continuing; but no such waiver shall extend
to any subsequent or other Default or Event of Default, or impair any right
consequent thereon.

Notwithstanding any of the foregoing to the contrary, the consent of the Company
shall not be required for any amendment, modification or waiver of the
provisions of Article VIII (other than the provisions of Section 8.9).

Notwithstanding any of the foregoing to the contrary, the Company and the Agent,
without the consent of any Lender, may enter into any amendment, modification or
waiver of any Loan Document, or enter into any new agreement or instrument, to
correct any obvious error or omission of a technical nature, in each case that
is immaterial (as determined by the Agent), in any provision of any Loan
Document, if the same is not objected to in writing by the Required Lenders
within five (5) Business Days following receipt of notice thereof.

Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (a) each Lender is entitled to vote as
such Lender sees fit on any

 

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bankruptcy reorganization plan that affects the Loans, and each Lender
acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code
supersedes the unanimous consent provisions set forth herein, (b) the Required
Lenders may consent to allow a Credit Party to use cash collateral in the
context of a bankruptcy or insolvency proceeding and (c) no Defaulting Lender
shall have any right to approve or disapprove any amendment, waiver or consent
hereunder, except (i) that the Commitment of such Lender may not be increased or
extended without the consent of such Lender and (ii) to the extent such
amendment, waiver or consent impacts such Defaulting Lender more than the other
Lenders (other a as a result of being a Defaulting Lender).

For the avoidance of doubt and notwithstanding any provision to the contrary
contained in this Section 9.1, this Agreement may be amended (or amended and
restated) with the written consent of the Credit Parties and the Agent in
accordance with Section 2.2.

Section 9.2 Notices.

(a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopier as follows:

(i) If to the Company or any other Credit Party:

Cheryl K. Ramagano

Vice President & Treasurer

Universal Health Realty Income Trust

367 South Gulph Road

King of Prussia, PA 19406

Telecopier:     (610) 382-4407

Telephone:     (610) 768-3402

Email: cheryl.ramagano@uhsinc.com

(ii) If to the Agent:

Wells Fargo Bank, National Association, as Agent

1525 West W.T. Harris Blvd.

Mail Code NC 0680

Charlotte, North Carolina 28262

Attention:     Syndication Agency Services

Telephone:   (704) 590-2912

Fax:              (704) 715-0017

Email: andrew.wullshleger@wachovia.com

 

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with a copy to:

Wells Fargo Bank, National Association

301 South College Street, 15th Floor

MAC D1053-150

Charlotte, North Carolina 28202

Attention:     Andrea Chen

Telephone:   (704) 383-3747

Fax:              (704) 715 -1438

Email: andrea.chen@wachovia.com

(iii) if to a Lender, to it at its address (or telecopier number) set forth in
its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when confirmed receipt (except
that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next business day
for the recipient). Notices delivered through electronic communications to the
extent provided in paragraph (b) below, shall be effective as provided in said
paragraph (b).

(b) Electronic Communications. Notices and other communications to the Lenders,
the Swingline Lender and the Issuing Lender hereunder may be delivered or
furnished by electronic communication (including e-mail and Internet or intranet
websites) pursuant to procedures approved by the Agent, provided that the
foregoing shall not apply to notices to any Lender, the Swingline Lender or the
Issuing Lender pursuant to Article II if such Lender, the Swingline Lender or
the Issuing Lender, as applicable, has notified the Agent that it is incapable
of receiving notices under such Article by electronic communication. The Agent
or the Company may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.

Unless the Agent otherwise prescribes, (i) notices and other communications sent
to an e-mail address shall be deemed received upon the sender’s receipt of an
acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is not
sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

 

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(c) Change of Address, Etc. Any party hereto may change its address or
telecopier number for notices and other communications hereunder by notice to
the other parties hereto.

(d) Platform.

(i) The Company agrees that the Agent may make the Communications (as defined
below) available to the Lenders by posting the Communications on Intralinks or a
substantially similar electronic transmission system (the “Platform”).

(ii) The Platform is provided “as is” and “as available.” The Agent Parties (as
defined below) do not warrant the adequacy of the Platform and expressly
disclaim liability for errors or omissions in the communications effected
thereby (the “Communications”). No warranty of any kind, express, implied or
statutory, including, without limitation, any warranty of merchantability,
fitness for a particular purpose, non-infringement of third-party rights or
freedom from viruses or other code defects, is made by any Agent Party in
connection with the Communications or the Platform. In no event shall the Agent
or any of its affiliates or any of their respective officers, directors,
employees, agents, advisors or representatives (collectively, “Agent Parties”)
have any liability to the Credit Parties, any Lender or any other Person or
entity for damages of any kind, including, without limitation, direct or
indirect, special, incidental or consequential damages, losses or expenses
(whether in tort, contract or otherwise) arising out of any Credit Party’s or
the Agent’s transmission of communications through the Platform.

Section 9.3 No Waiver; Cumulative Remedies.

No failure to exercise and no delay in exercising, on the part of the Agent or
any Lender, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.

Section 9.4 Survival of Representations and Warranties.

All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans; provided that all such representations and warranties shall
terminate on the date upon which the Commitments have been terminated and all
Credit Party Obligations have been paid in full.

 

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Section 9.5 Payment of Expenses and Taxes; Indemnity.

(a) Costs and Expenses. The Company shall pay (i) all reasonable out-of-pocket
expenses incurred by the Agent and its Affiliates (including the reasonable
fees, charges and disbursements of counsel for the Agent), and shall pay all
fees and time charges and disbursements for attorneys who may be employees of
the Agent, in connection with the syndication of the credit facilities provided
for herein, the preparation, negotiation, execution, delivery and administration
of this Agreement and the other Loan Documents or any amendments, modifications
or waivers of the provisions hereof or thereof (whether or not the Transactions
shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by
the Issuing Lender and the Swingline Lender in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or Swingline Loan or any
demand for payment thereunder and (iii) all reasonable out-of-pocket expenses
incurred by the Agent, any Lender, the Issuing Lender or the Swingline Lender
(including the fees, charges and disbursements of any counsel for the Agent, any
Lender, the Swingline Lender or the Issuing Lender), and shall pay the
reasonable fees and time charges for attorneys who may be employees of the
Agent, any Lender, the Issuing Lender or the Swingline Lender, in connection
with the enforcement or protection of its rights (A) in connection with this
Agreement and the other Loan Documents, including its rights under this Section,
or (B) in connection with the Loans made or Letters of Credit issued hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.

(b) Indemnification by the Company. The Company shall indemnify the Agent (and
any sub-agent thereof), each Lender, the Issuing Lender and the Swingline
Lender, and each Related Party of any of the foregoing Persons (each such Person
being called an “Indemnitee”) against, and hold each Indemnitee harmless from,
any and all losses, claims, penalties, damages, liabilities and related expenses
(including the fees, charges and disbursements of any counsel for any
Indemnitee), and shall indemnify and hold harmless each Indemnitee from all fees
and time charges and disbursements for attorneys who may be employees of any
Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any
third party or by the Company or any other Credit Party arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder or the consummation of the Transactions,
(ii) any Loan or Letter of Credit or the use or proposed use of the proceeds
therefrom (including any refusal by the Issuing Lender to honor a demand for
payment under a Letter of Credit if the documents presented in connection with
such demand do not strictly comply with the terms of such Letter of Credit),
(iii) any actual or alleged presence or release of Materials of Environmental
Concern on or from any property owned or operated by any Credit Party or any of
its Subsidiaries, or any liability under Environmental Law related in any way to
any Credit Party or any of its Subsidiaries, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by the Company or

 

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any other Credit Party, and regardless of whether any Indemnitee is a party
thereto, provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee or result from a claim brought by the Company or
any other Credit Party against an Indemnitee for a material breach of such
Indemnitee’s obligations hereunder or under any other Loan Document, if the
Company or such Credit Party has obtained a final and nonappealable judgment in
its favor on such claim as determined by a court of competent jurisdiction. This
section (b) shall not apply with respect to Taxes other than any Taxes that
represent losses or damages arising from non-Tax claim.

(c) Reimbursement by Lenders. To the extent that the Company for any reason
fails to indefeasibly pay any amount required under paragraph (a) or (b) of this
Section to be paid by it to the Agent (or any sub-agent thereof), the Issuing
Lender, Swingline Lender or any Related Party of any of the foregoing, each
Lender severally agrees to pay to the Agent (or any such sub-agent), the Issuing
Lender, Swingline Lender or such Related Party, as the case may be, such
Lender’s Revolving Commitment Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount, provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Agent (or any such sub-agent), the Issuing Lender or
Swingline Lender in its capacity as such, or against any Related Party of any of
the foregoing acting for the Agent (or any such sub-agent), Issuing Lender or
Swingline Lender in connection with such capacity.

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, none of the Credit Parties shall assert, and each of the Credit
Parties hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter of Credit or the use
of the proceeds thereof. No Indemnitee referred to in paragraph (b) above shall
be liable for any damages arising from the use by unintended recipients of any
information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the Transactions.

(e) Payments. All amounts due under this Section shall be payable promptly/not
later than ten (10) days after demand therefor.

(f) Survival. The agreements contained in this Section shall survive the
resignation of the Agent, the Swingline Lender and the Issuing Lender, the
replacement of any Lender, the termination of the Commitments and the repayment,
satisfaction or discharge of the Credit Party Obligations.

 

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Section 9.6 Successors and Assigns; Participations.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that neither the Company nor any
other Credit Party may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of the Agent and each
Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an assignee in accordance with the
provisions of paragraph (b) of this Section, (ii) by way of participation in
accordance with the provisions of paragraph (d) of this Section or (iii) by way
of pledge or assignment of a security interest subject to the restrictions of
paragraph (f) of this Section (and any other attempted assignment or transfer by
any party hereto shall be null and void). Nothing in this Agreement, expressed
or implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, Participants
to the extent provided in paragraph (d) of this Section and, to the extent
expressly contemplated hereby, the Related Parties of each of the Agent and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it); provided that any such assignment shall be subject to the
following conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or contemporaneous
assignments to related Approved Funds that equal at least the amount specified
in paragraph (b)(i)(B) or in the case of an assignment to a Lender, an Affiliate
of a Lender or an Approved Fund, no minimum amount need be assigned; and

(B) in any case not described in paragraph (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the applicable Commitment is not then in effect,
the principal outstanding balance of the Loans of the assigning Lender subject
to each such assignment (determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Agent or, if “Trade Date” is
specified in the Assignment and Assumption, as of the Trade Date) shall not be
less than $5,000,000, in the case of any assignment in respect of any portion of
the Revolving Facility, unless each of the Agent and, so long as no Event of
Default has occurred and is continuing, the Company otherwise consents (each
such consent not to be unreasonably withheld or delayed).

 

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(ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loan or the Commitment
assigned, except that this clause (ii) shall not prohibit any Lender from
assigning all or a portion of its rights and obligations among separate Tranches
on a non-pro rata basis.

(iii) Required Consents. No consent shall be required for any assignment except
to the extent required by paragraph (b)(i)(B) of this Section and, in addition:

(A) the consent of the Company (such consent not to be unreasonably withheld or
delayed) shall be required unless (x) an Event of Default has occurred and is
continuing at the time of such assignment or (y) such assignment is to a Lender,
an Affiliate of a Lender or an Approved Fund; provided that the Company shall be
deemed to have consented to any such assignment unless it shall object thereto
by written notice to the Agent within ten (10) Business Days after having
received notice thereof;

(B) the consent of the Agent (such consent not to be unreasonably withheld or
delayed) shall be required for assignments in respect of a Revolving Commitment
if such assignment is to a Person that is not a Lender with a Commitment in
respect of such facility, an Affiliate of such Lender or an Approved Fund with
respect to such Lender; and

(C) the consent of the Issuing Lender and Swingline Lender (such consent not to
be unreasonably withheld or delayed) shall be required for assignments in
respect of a Revolving Commitment.

(iv) Assignment and Assumption. The parties to each assignment shall execute and
deliver to the Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500; provided that the Agent may, in its sole
discretion, elect to waive such processing and recordation fee in the case of
any assignment. The assignee, if it is not a Lender, shall deliver to the Agent
an Administrative Questionnaire.

(v) No Assignment to Certain Persons. No such assignment shall be made to
(A) any Credit Party or any Credit Party’s Affiliates or Subsidiaries or (B) any
Defaulting Lender or any of its Subsidiaries or any Person who, upon becoming a
Lender hereunder, would constitute any of the foregoing Persons described in
this clause (B).

(vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.

 

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(vii) Certain Additional Payments. In connection with any assignment of rights
and obligations of any Defaulting Lender hereunder, no such assignment shall be
effective unless and until, in addition to the other conditions thereto set
forth herein, the parties to the assignment shall make such additional payments
to the Agent in an aggregate amount sufficient, upon distribution thereof as
appropriate (which may be outright payment, purchases by the assignee of
participations or subparticipations, or other compensating actions, including
funding, with the consent of the Company and the Agent, the applicable pro rata
share of Loans previously requested but not funded by the Defaulting Lender, to
each of which the applicable assignee and assignor hereby irrevocably consent),
to (A) pay and satisfy in full all payment liabilities then owed by such
Defaulting Lender to the Agent or any Lender hereunder (and interest accrued
thereon), and (B) acquire (and fund as appropriate) its full pro rata share of
all Loans and participations in Letters of Credit and Swingline Loans in
accordance with its Applicable Percentage. Notwithstanding the foregoing, in the
event that any assignment of rights and obligations of any Defaulting Lender
hereunder shall become effective under applicable Law without compliance with
the provisions of this paragraph, then the assignee of such interest shall be
deemed to be a Defaulting Lender for all purposes of this Agreement until such
compliance occurs.

Subject to acceptance and recording thereof by the Agent pursuant to
paragraph (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto) but shall continue to be entitled to
the benefits of Sections 2.14 and 9.5 with respect to facts and circumstances
occurring prior to the effective date of such assignment. Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this paragraph shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (d) of this Section.

(c) Register. The Agent, acting solely for this purpose as an agent of the
Company, shall maintain at one of its offices in Charlotte, North Carolina a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be
conclusive absent manifest error, and the Company, the Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for

 

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inspection by the Company and any Lender, at any reasonable time and from time
to time upon reasonable prior notice; provided that a Lender shall only be
entitled to inspect its own entry in the Register and not that of any other
Lender. In addition, the Agent shall maintain on the Register information
regarding the designation and revocation of designation, of any Lender as a
Defaulting Lender.

(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Company or the Agent, sell participations to any Person (other
than a natural person or any Credit Party or any Credit Party’s Affiliates or
Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Company, the Agent and the Lenders, Issuing
Lender and Swingline Lender shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement. For the avoidance of doubt, each Lender shall be responsible for the
indemnity under Section 9.1(b) with respect to any payments made by such Lender
to its Participant(s).

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver that affects such Participant. Subject
to paragraph (e) of this Section, the Company agrees that each Participant shall
be entitled to the benefits of Sections 2.14 and 2.16 to the same extent as if
it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section; provided such Participant agrees to be subject to
Sections 2.19 as if it were a Lender. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 9.7 as though it
were a Lender, provided such Participant agrees to be subject to Section 2.11 as
though it were a Lender. Each Lender that sells a participation shall, acting
solely for this purpose as a non-fiduciary agent of the Company, maintain a
register in the United States on which it enters the name and address of each
Participant and the principal amounts (and stated interest) of each
Participant’s interest in the Loans or other obligations under the Loan
Documents (the “Participant Register”). The entries in the Participant Register
shall be conclusive absent manifest error, and such Lender shall treat each
person whose name is recorded in the Participant register as the owner of such
participation for all purposes of this Agreement notwithstanding any notice to
the contrary.

(e) Limitations Upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Sections 2.14 and 2.16 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Company’s prior written consent (such consent not
to be unreasonably withheld or delayed).

 

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(f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

Section 9.7 Right of Set-off; Sharing of Payments.

(a) If an Event of Default shall have occurred and be continuing, each Lender,
the Issuing Lender, the Swingline Lender and each of their respective Affiliates
is hereby authorized at any time and from time to time, to the fullest extent
permitted by applicable law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final, in whatever currency) at any
time held and other obligations (in whatever currency) at any time owing by such
Lender, the Issuing Lender, the Swingline Lender or any such Affiliate to or for
the credit or the account of the Company against any and all of the obligations
of the Company now or hereafter existing under this Agreement or any other Loan
Document to such Lender, the Swingline Lender or the Issuing Lender,
irrespective of whether or not such Lender, the Swingline Lender or the Issuing
Lender shall have made any demand under this Agreement or any other Loan
Document and although such obligations of the Company may be contingent or
unmatured or are owed to a branch or office of such Lender, the Swingline Lender
or the Issuing Lender different from the branch or office holding such deposit
or obligated on such indebtedness; provided that in the event that any
Defaulting Lender shall exercise any such right of setoff, (i) all amounts so
set off shall be paid over immediately to the Agent for further application in
accordance with the provisions of Section 2.21 and, pending such payment, shall
be segregated by such Defaulting Lender from its other funds and deemed held in
trust for the benefit of the Agent and the Lenders, and (ii) the Defaulting
Lender shall provide promptly to the Agent a statement describing in reasonable
detail the Credit Party Obligations owing to such Defaulting Lender as to which
it exercised such right of setoff. The rights of each Lender, the Swingline
Lender, the Issuing Lender and their respective Affiliates under this Section
are in addition to other rights and remedies (including other rights of setoff)
that such Lender, the Swingline Lender, the Issuing Lender or their respective
Affiliates may have. Each Lender, the Swingline Lender and the Issuing Lender
agrees to notify the Company and the Agent promptly after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such setoff and application.

(b) If any Lender shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or other obligations hereunder resulting in such Lender’s receiving
payment of a proportion of the aggregate amount of its Loans and accrued
interest thereon or other such obligations greater than its pro rata share
thereof as provided herein, then the Lender receiving such greater proportion
shall (i) notify the Agent of such fact, and (ii) purchase (for cash at face
value) participations in the Loans and such other obligations of the other

 

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Lenders, or make such other adjustments as shall be equitable, so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and other amounts owing them, provided that:

(A) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest; and

(B) the provisions of this paragraph shall not be construed to apply to (x) any
payment made by the Company pursuant to and in accordance with the express terms
of this Agreement (including the application of funds arising from the existence
of a Defaulting Lender), (y) any payment obtained by a Lender as consideration
for the assignment of or sale of a participation in any of its Loans or
participations in Letters of Credit to any assignee or participant, other than
to any Credit Party or any Subsidiary thereof (as to which the provisions of
this paragraph shall apply) or (z) (1) any amounts applied by the Swingline
Lender to outstanding Swingline Loans and (2) any amounts received by the
Issuing Lender and/or Swingline Lender to secure the obligations of a Defaulting
Lender to fund risk participations hereunder.

(c) The Company consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Company of setoff and counterclaim with respect to such participation as fully
as if such Lender were a direct creditor of the Company in the amount of such
participation.

Section 9.8 Table of Contents and Section Headings.

The table of contents and the Section and subsection headings herein are
intended for convenience only and shall be ignored in construing this Agreement.

Section 9.9 Counterparts; Effectiveness; Electronic Execution.

(a) Counterparts; Effectiveness. This Agreement may be executed in counterparts
(and by different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. Except as provided in Section 4.1, this Agreement shall become
effective when (i) it shall have been executed by the Company, the Guarantors
and the Agent, the Lenders and the Agent shall have received copies hereof and
thereof (telefaxed or otherwise), and thereafter this Agreement shall be binding
upon and inure to the benefit of the Company, the Guarantors, the Agent and each
Lender and their respective successors and permitted assigns. Delivery of an
executed counterpart of a signature

 

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page of this Agreement by telecopy or email shall be effective as delivery of a
manually executed counterpart of this Agreement.

(b) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.

Section 9.10 Severability.

Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

Section 9.11 Integration.

This Agreement and the other Loan Documents represent the agreement of the
Company, the other Credit Parties, the Agent and the Lenders with respect to the
subject matter hereof, and there are no promises, undertakings, representations
or warranties by the Agent, the Company, the other Credit Parties, or any Lender
relative to the subject matter hereof not expressly set forth or referred to
herein or therein.

Section 9.12 Governing Law.

This Agreement and the other Loan Documents, any claims, controversy or dispute
arising out of or relating to this Agreement or any other Loan Document (except,
as to any other Loan Document, as expressly set forth therein) shall be governed
by, and construed in accordance with, the laws of the State of New York without
reference to principles of conflicts or choice of law.

Section 9.13 Consent to Jurisdiction; Service of Process and Venue.

(a) Consent to Jurisdiction. The Company irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
courts of the State of New York and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement or any other
Loan Document, or for recognition or enforcement of any judgment, and each of
the parties hereto irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York sitting State court or, to the fullest extent

 

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permitted by applicable law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or in any other
Loan Document shall affect any right that the Agent, any Lender, the Swingline
Lender or the Issuing Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against the
Company or any other Credit Party or its properties in the courts of any
jurisdiction.

(b) Service of Process. Each party hereto irrevocably consents to service of
process in the manner provided for notices in Section 9.2. Nothing in this
Agreement will affect the right of any party hereto to serve process in any
other manner permitted by applicable law.

(c) Venue. The Company irrevocably and unconditionally waives, to the fullest
extent permitted by applicable law, any objection that it may now or hereafter
have to the laying of venue of any action or proceeding arising out of or
relating to this Agreement or any other Loan Document in any court referred to
in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

Section 9.14 Confidentiality.

Each of the Agent, the Lenders, the Swingline Lender and the Issuing Lender
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its Affiliates and to its and
its Affiliates’ respective partners, directors, officers, employees, agents,
advisors and other representatives (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process,
(d) to any other party hereto, (e) in connection with the exercise of any
remedies hereunder, under any other Loan Document or Bank Product or any action
or proceeding relating to this Agreement, any other Loan Document or Bank
Product or the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section,
to any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement,
(g) (i) any actual or prospective party (or its partners, directors, officers,
employees, managers, administrators, trustees, agents, advisors or other
representatives) to any swap or derivative or similar transaction under which
payments are to be made by reference to the Company and its obligations, this
Agreement or payments hereunder, (ii) an investor or prospective investor in
securities issued by an Approved Fund that also agrees that Information shall be
used solely for the purpose of evaluating an investment in such securities
issued by the Approved Fund, (iii) a trustee, collateral manager, servicer,
backup servicer, noteholder or secured party in connection with the
administration, servicing and

 

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reporting on the assets serving as collateral for securities issued by an
Approved Fund, or (iv) a nationally recognized rating agency that requires
access to information regarding the Credit Parties, the Loans and Loan Documents
in connection with ratings issued in respect of securities issued by an Approved
Fund (in each case, it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such information and
instructed to keep such information confidential), (h) with the consent of the
Company or (i) to the extent such Information (x) becomes publicly available
other than as a result of a breach of this Section or (y) becomes available to
the Agent, any Lender, the Swingline Lender, the Issuing Lender or any of their
respective Affiliates on a nonconfidential basis from a source other than the
Company.

For purposes of this Section, “Information” shall mean all information received
from any Credit Party or any of its Subsidiaries relating to any Credit Party or
any of its Subsidiaries or any of their respective businesses, other than any
such information that is available to the Agent, any Lender, the Swingline
Lender or the Issuing Lender on a nonconfidential basis prior to disclosure by
any Credit Party or any of its Subsidiaries; provided that, in the case of
information received from any Credit Party or any of its Subsidiaries after the
date hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.

Section 9.15 Acknowledgments.

The Company hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
each Loan Document;

(b) neither the Agent nor any Lender has any fiduciary relationship with or duty
to the Company or any other Credit Party arising out of or in connection with
this Agreement and the relationship between the Agent and the Lenders, on one
hand, and the Company and the other Credit Parties, on the other hand, in
connection herewith is solely that of creditor and debtor; and

(c) no joint venture exists among the Lenders and the Agent or among the
Company, the Agent or the other Credit Parties and the Lenders.

Section 9.16 Waivers of Jury Trial; Waiver of Consequential Damages.

EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED

 

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ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

Section 9.17 Patriot Act Notice.

Each Lender and the Agent (for itself and not on behalf of any other party)
hereby notifies the Company that, pursuant to the requirements of the Patriot
Act, it is required to obtain, verify and record information that identifies the
Company and the other Credit Parties, which information includes the name and
address of the Company and the other Credit Parties and other information that
will allow such Lender or the Agent, as applicable, to identify the Company and
the other Credit Parties in accordance with the Patriot Act.

Section 9.18 Resolution of Drafting Ambiguities.

The Company acknowledges and agrees that it was represented by counsel in
connection with the execution and delivery of this Agreement and the other Loan
Documents to which it is a party, that it and its counsel reviewed and
participated in the preparation and negotiation hereof and thereof and that any
rule of construction to the effect that ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation hereof or
thereof.

Section 9.19 Continuing Agreement.

This Agreement shall be a continuing agreement and shall remain in full force
and effect until all Credit Party Obligations (other than those obligations that
expressly survive the termination of this Agreement) have been paid in full and
all Commitments and Letters of Credit have been terminated.

Section 9.20 Press Releases and Related Matters.

The Company and its Affiliates agree that they will not in the future issue any
press releases or other public disclosure using the name of Agent or any Lender
or their respective Affiliates or referring to this Agreement or any of the Loan
Documents without the prior written consent of such Person (other than in
connection with standard SEC 10-q, 8-k and other similar filings), unless (and
only to the extent that) the Company or such Affiliate are required to do so
under law and then, in any event, the Credit Parties or such Affiliate will
consult with such Person before issuing such press release or other public
disclosure. The Credit Parties consent to the publication by Agent or any Lender
of customary advertising material relating to the Transactions using the name,
product photographs, logo or trademark of the Credit Parties.

 

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Section 9.21 [Reserved].

Section 9.22 No Advisory or Fiduciary Responsibility.

In connection with all aspects of each Transaction, each of the Credit Parties
acknowledges and agrees, and acknowledges its Affiliates’ understanding, that:
(a) the credit facility provided for hereunder and any related arranging or
other services in connection therewith (including in connection with any
amendment, waiver or other modification hereof or of any other Loan Document)
are an arm’s-length commercial transaction between the Credit Parties and their
Affiliates, on the one hand, and the Lenders, Agent and the Arrangers, on the
other hand, and the Credit Parties are capable of evaluating and understanding
and understands and accepts the terms, risks and conditions of the Transactions
and by the other Loan Documents (including any amendment, waiver or other
modification hereof or thereof); (b) in connection with the process leading to
such transaction, each Lender, the Agent, WFS and MLPFS each is and has been
acting solely as a principal and is not the financial advisor, agent or
fiduciary, for any Credit Party or any of their Affiliates, stockholders,
creditors or employees or any other Person; (c) no Lender, the Agent, WFS nor
MLPFS has assumed or will assume an advisory, agency or fiduciary responsibility
in favor of any Credit Party with respect to any of the Transactions or the
process leading thereto, including with respect to any amendment, waiver or
other modification hereof or of any other Loan Document (irrespective of whether
any Lender, the Agent, WFS or MLPFS has advised or is currently advising any
Credit Party or any of its Affiliates on other matters) and none of the Lenders,
the Agent, WFS nor MLPFS has any obligation to any Credit Party or any of their
Affiliates with respect to the Transactions except those obligations expressly
set forth herein and in the other Loan Documents; (d) the Lenders, the Agent and
the Arrangers and their respective Affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Credit Parties
and their Affiliates, and none of the Lenders, the Agent or the Arrangers has
any obligation to disclose any of such interests by virtue of any advisory,
agency or fiduciary relationship; and (e) the Lenders, the Agent and the
Arrangers have not provided and will not provide any legal, accounting,
regulatory or tax advice with respect to any of the Transactions (including any
amendment, waiver or other modification hereof or of any other Loan Document)
and the Credit Parties have consulted their own legal, accounting, regulatory
and tax advisors to the extent it has deemed appropriate. Each of the Credit
Parties hereby waives and releases, to the fullest extent permitted by law, any
claims that it may have against the Lenders, the Agent, WFS or MLPFS with
respect to any breach or alleged breach of agency or fiduciary duty.

Section 9.23 Responsible Officers.

The Agent and each of the Lenders are authorized to rely upon the continuing
authority of the Responsible Officers with respect to all matters pertaining to
the Loan Documents including, but not limited to, the selection of interest
rates, the submission of requests for Extensions of Credit and certificates with
regard thereto. Such authorization may be changed only upon written notice to
Agent accompanied by evidence, reasonably satisfactory to Agent, of the
authority of the Person giving such notice and such notice shall be effective
not sooner than five (5) Business Days following receipt thereof by Agent (or
such earlier time as agreed to by the Agent).

 

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[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement under seal
as of the date first set forth above.

 

UNIVERSAL HEALTH REALTY INCOME

TRUST, a real investment trust organized under the laws of the state of Maryland

By:   /s/ Cheryl K. Ramagano Name: Cheryl Ramagano Title: Vice President,
Treasurer and Secretary

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WELLS FARGO BANK, NATIONAL

ASSOCIATION, as a Lender, Agent, Swingline Lender and Issuing Lender

By:

 

/s/ Andrea S. Chen

Name:

 

Andrea Chen

Title:

 

Director

 

Bank of America, N.A., as a Lender

By:

 

/s/ Jill J. Hogan

Name:

 

Jill J. Hogan

Title:

 

Vice President

 

SunTrust Bank, as a Lender

By:

 

/s/ Mary E. Coke

Name:

 

Mary E. Coke

Title:

 

Vice President

 

PNC Bank, National Association, as a Lender

By:

 

/s/ Jeffrey Wymard

Name:

 

Jeffrey Wymard

Title:

 

Managing Director

 

Fifth Third Bank, as a Lender

By:

 

/s/ Megan Brearey

Name:

 

Megan Brearey

Title:

 

AVP

 

JPMorgan Chase Bank, N.A., as a Lender

By:

 

/s/ Dawn Lee Lum

Name:

 

Dawn Lee Lum

Title:

 

Executive Director

 

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK as a Lender

By:

 

/s/ Tanya Crossley

Name:

 

Tanya Crossley

Title:

 

Managing Director

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By:   /s/ David Christiansen Name:   David Christiansen Title:   Director

 

The Royal Bank of Scotland plc, as a Lender By:   /s/ Scott Mac Vicar Name:  
Scott Mac Vicar Title:   Vice President